1-The-Nature-Definitions-and-Charateristics-of-Entreprenuership.pptx

OBJECTIVES: To deeply understand the nature, concepts, and importance of Entrepreneurship. To identify entrepreneurial opportunities that exist in the Philippines. To create entrepreneurial opportunities in the making of a simplified business plan. DEFINITION,NATURE AND CHARACTERISTI...

OBJECTIVES: To deeply understand the nature, concepts, and importance of Entrepreneurship. To identify entrepreneurial opportunities that exist in the Philippines. To create entrepreneurial opportunities in the making of a simplified business plan. DEFINITION,NATURE AND CHARACTERISTICS OF AN ENTREPRENEUR HISTORY: The word ‘entrepreneur' is derived from the French word ‘entreprendre’which means ‘to undertake’. In the early 16th th century the French men who organised and led military expeditions were referred to as ‘entrepreneur'. After 1700,the term was applied to other types of adventures, mainly civil engineering like constructions of roads etc.  DEFINITION The 1987 Philippine Constitution recognizes entrepreneurship as an engine of economic growth. The capacity and willingness to develop, organize and manage a business venture along with any of its risks in order to make a profit.  CHARACTERISTICS OF AN ENTREPRENEUR 1. Calculated Risk-taker 2. Innovator 3. Organiser 4. Creative 5. Achievement Motivated 6. Technically Competent 7. Self-confident 8. Socially Responsible 9. Optimistic 10.Equipped with Capability to drive 11. Blessed with Mental Ability 12.Human Relations Ability 13.Communication Ability 14.Decision-Making 15.Business Planning 16.A venture Capitalist 17.Visionary 18.Entrepreneur make significant differences 19.Ability to Spot and Exploit Opportunities 20.Courage to Face Adversities 21.Leadership---An essential trait of the entrepreneur WORKING PROFILE OF ENTREPRENEUR Characteristics Traits Self-confidence Confidence, Independence, Optimism, Individuality. Responsibility,Vigour, Initiative, Drive persistence, Ambition. Need for achievement, Profit- Task-result oriented oriented, Energy. Risk taking ability, Likes challenges. Risk-taker Overall intelligence(IQ),Creative thinking, Analytical thinking Mental Ability ability. Leadership behaviour, Gets alongwith others, Responsive to Leadership situations, Criticism.  Human Relations Ability Emotional stability, Healthy personal relations, Sociability, Tactfulness, Originality Consideration. Innovative, Creative, Resourceful, Communication Ability knowledge. Perceptive, Foresight, Future oriented. Entrepreneurship vs. Small Business “Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantage.” ~ Victor Kiam What Is “Small Business”? Independently owned and managed business that does not dominate its market. Entrepreneurship vs. Small Business Entrepreneur: Accepts the risks and opportunities of creating, operating and growing a new business Small Business Owner: Does not have plans for growth  TYPES OF ENTREPRENEUR 1. According to the Type of Business i. Business entrepreneur: Business entrepreneurs are those entrepreneurs who conceive the idea of a new product or service and then translate their ideas into reality. ii. Trading entrepreneur: As the very name indicates trading entrepreneur is concerned with trading activities and not manufacturing. iii. Industrial entrepreneur: As the very name indicates, an industrial entrepreneur is one who sets up an industrial unit. iv. Corporate entrepreneur: Corporate entrepreneur is the one who plans, develops and manages a corporate body. v. Agricultural entrepreneur: Agricultural entrepreneur is the one who is engaged in the agricultural activities.  2. According to Motivation i. Pure entrepreneur: Pure entrepreneur is one who may or may not possess an aptitude for entrepreneurship but is tempted by the monetary rewards or profits to be earned from the business venture. ii. Induced entrepreneur: Induced entrepreneur is attracted by the various incentives, subsidies and facilities offered by the government.  3.According to the Use of Technology i. Technical entrepreneur: The strength of a technical entrepreneur is in his skill in production techniques. He concentrates more on production than on marketing. ii. Non-technical entrepreneur: Unlike technical entrepreneur, non-technical entrepreneur is not concerned with the technical aspect of the product rather he spends more time in developing alternative strategies of the marketing and distribution to promote his business. iii. Professional entrepreneur: Professional entrepreneur means an entrepreneur who is interested in floating a business but does not want to manage or operate it. 4.According to stages of Development i. First generation entrepreneur: First generation entrepreneur are those entrepreneur who do not possess any entrepreneurial background. ii. Second generation entrepreneur: Second generation entrepreneur are those entrepreneurs who inherit the family business firms and pass it from one generation to another. iii. Classical entrepreneur: A classical entrepreneur is a stereotype entrepreneur whose aim is to maximize his economic returns at a level consistent with the survival of the unit but with or without an element of growth. 5.Classification Given by Danhof i. Innovating entrepreneur: Innovative entrepreneurs are generally aggressive and possess the art of cleverly putting the attractive possibilities into practice. ii. Imitative entrepreneurs: Imitative entrepreneurs are characterized by readiness to adopt successful innovations inaugurated by successful innovating entrepreneurs. iii. Fabian entrepreneur: Fabian entrepreneurs are cautions and skeptical in experimenting change in their enterprises. Such entrepreneurs are shy, lazy and lethargic. iv. Drone entrepreneur: Drone entrepreneurs are characterized by a refusal to adopt opportunities to make changes in production formulae even at the cost of severely reduced returns. 6.According to Capital ownership i. Private entrepreneur: When an individual or a group of individuals set up an enterprise, arrange finance, bear the risk and adopt the latest techniques in the business with the intention to earn profits, he or the group is called as private entrepreneur/entrepreneurs. ii. State entrepreneur: As the name indicates, state entrepreneur means the trading or industrial venture undertaken by the state or the government itself. iii. Joint entrepreneur: Joint entrepreneur means the combination of private entrepreneur and state entrepreneur who join hands.  INTRAPRENEUR The term ‘intrapreneur’ was coined in the United States of America in the late seventies. Gifford Pinchot defined intrapreneurs as the persons who resigned from their well paid executive positions to launch their own ventures. Gifford devised the way by which such executives could be retained in the industry and their entrepreneurial urge was also satisfied by their bosses. So a system was devised whereby such executives would operate as entrepreneurs with full independence and autonomy but with in the organisation. Difference between entrepreneur and intrapreneur 1. An entrepreneur is an independence person who starts his venture and bears full risk of his failure and enjoys the fruit of his success whereas intrapreneur is partially independent and is sponsored by the corporation in which he is working. He is also not liable to bear the losses in case of his failure. 2. An entrepreneur raises the finance from various sources and also guarantees their return whereas an intrapreneur does not own responsibility to raise the capital or to return it. 3. An entrepreneur has no relation with any organisation whereas an intrapreneur operates within the organisation where he is working.  Entrepreneurship vs. Intrapreneurship  Intrapreneurship is a form of entrepreneurship that takes place inside a business that is already in existence.  An entrepreneur is starting a business, while an intrapreneur is developing a new product or service in an already existing business.  the ideas of entrepreneurship can be applied not only in new ventures but also in the context of existing organizations. FUNCTIONS OF AN ENTREPRENEUR There has been a great deal of confusion and contradiction in literature on the functions of an entrepreneur. FUNCTIONS 1. Innovations: J.Schumpeter has made substantial contribution to the literature of entrepreneurship. The process of innovations may be in the form of: a) Introduction of a new product. b) Use of new methods of production. c) Opening of a new market. d) The conquest of new source of supply of raw material. e) A new form of organisation. 2. Risk-taking: Richard Cantillon states that entrepreneur is an agent who buys means of production at certain prices and sells them at uncertain prices. The entrepreneur performs the function of reducing uncertainty in his plan of investment and expansion of the enterprise. J.b. Say also stresses risk-taking as the specific function of an entrepreneur. 3. Decision Maker: Entrepreneur as a decision maker describes the following functions of an entrepreneur. a) The determination of objectives of an enterprise and the change of those objectives as conditions required or made advantageous, b) The development of an organisation including efficient relations with subordinates and all employees, c) Securing adequate financial resources, the relations with existing and potential Investors, d) The acquisition of efficient technological equipment and the revision of it as new machinery appears, e)The development of a market for the products and the devising of new products to meet or anticipate consumer’s demand, f) The maintenance of good relations with public authorities and with society at large. 4. Organisation and Management: Marshall recognized organisation and management of the enterprise as the important functions of an entrepreneur. When the organisation grows bigger, the entrepreneur effectively delegates authority and finds responsibility at various levels of management. The network of decision making becomes more complex. The functions of organisation and management includes: a) Planning of an enterprise, b) Co-ordination, administration and control, c) Routine type of supervision.  DISTINCTION BETWEEN AN ENTREPRENEUR AND A MANAGER ENTREPRENEURS MANAGERS 1. Status: An 1. Status: A manager is entrepreneur is the owner just an employee in the of his enterprise. He enterprise which is owned makes his own and run by entrepreneur. investment and owns his 2. Target: The main goal business. or motive of a manager is 2. Target: The main target to give his services to an of an entrepreneur is to enterprise set up by start his venture by someone else i.e. an setting up as a sole-trader entrepreneur. or firm or a company. ENTREPRENEURS MANAGERS 3. Decision making: All of 3. Decision making: the policies and strategic While all those managerial, decisions, like those operational decisions which comprising of expansion would have impact on the diversification, take-over etc short-and medium-term are taken by the results are taken by the entrepreneur. managers. 4.Rectification of wrong 4. Rectification of decisions: The wrong wrong decisions: decisions taken by the Whereas the wrong entrepreneur may not be decisions taken by the rectificable and may result in managers can be amended losses or even closure of the and rectified by the unit. entrepreneur.  ENTREPRENEURS MANAGERS 5. Innovations: An 5. Innovations: A entrepreneur innovates and manager is merely an officer exploits his innovation or an executive who is commercially. appointed for the promotion of the unit. 6. Risk bearing: An 6. Risk bearing: A entrepreneur being the manager doesn’t bear any owner of his unit undertakes risk because he is paid fixed all risks and uncertainty of salary. running his enterprise. 7. Skills: The skill expected from an entrepreneur is in 7. Skills: Whereas manger the form of creativity, depends on public dealing innovation, desire for high abilities and conceptual achievement, intuition etc. abilities.  ENTREPRENEURS MANAGERS 8. Qualification: An 8. Qualification: On the entrepreneur doesn’t need other hand, a manager now to have distinct degree a days need to possess from a reputed university.degree in the stream of management theory and practice. 9. Rewards: The reward of an entrepreneur is the 9. Rewards: A manager profit earned by him. gets his monthly salary as his reward for the services rendered by him.  TIPS TO BECOME A SUCCESSFUL ENTREPRENEUR 1. Acquire sufficient and all-round knowledge about an enterprise you intend to start. 2. Be conservative in calculating income and lavish in calculating expenditure. 3. Don’t expect quick and easy returns from your venture. 4. Be prepared for delegation of work when needed. 5. Take moderate risks; neither too high nor too low. 6. Plan systematically and march ahead step by step according to the plan to achieve your goal. 7. Time management is necessary to maximum utilization of your resources. 8. Collect maximum information about your competitor on continuous basis. 9. Don’t avoid or run away from problems. 10. Take the help of experts and experienced persons or entrepreneur, when in doubt. Reasons for Success and Failure Reasons for Failure Poor management Neglect Weak control systems Insufficient capital Reasons for Success Hard work, drive, dedication Market demand Strong management Luck!!! Conclusion An entrepreneur performs various type of functions. Growth of his enterprise depends upon the way, he performs various functions like innovation, risk-taking, decision- making, organisation and management. Individual Activity: “SELF - ASSESSMENT” STUDENTS ACTIVITY Make your own honest “Personal Entrepreneurial Competencies” Assessment (PEC) and/or SWOT Analysis of your own.  Prepare alternative courses of action to your weaknesses, for you to overcome it and;  Prepare an action plan to grab the opportunities you have. (Note: For the Format Guide, Please see separate MS word file.) (DO NOT ANSWER THIS YET)