Entrepreneurship - Misconceptions

• Successful entrepreneurship needs only a great idea.

• It is easy.

• It is a risky gamble.

• It is found only in small business.

• Entrepreneurial ventures and small business is the same thing.

• Entrepreneurship cannot be developed.

Entrepreneurship is:

• A multi-dimensional concept

• A purposeful economic activity.

• A dynamic and risky process.

• A fusion of capital, technology and human intellect.

Entrepreneurship is:

• HIGGINS: Entrepreneurship is the function of seeking investment and production opportunity, organizing an enterprise to undertake a new production process, raising capital, hiring labor, arranging the supply of raw materials, finding site, introducing a new technique and commodities, discovering new sources of raw materials and selecting top managers for day-to-day operations of an enterprise.

Entrepreneurship is:

• A.H.COLE: Entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain or aggrandise profit by production or distribution of economic goods and services.

Distinctive Features of Entrepreneurship

• Innovation

• Motivation

• Risk Taking

• Organizing Building

• Managerial Skills and Leadership

Concept of Entrepreneur

• Derived from French word entreprendre which means to initiate or undertake.

• Now the word is used to indicate one who is risk taker, organizer and innovator.

• Richard Cantillon: “Entrepreneur is an agent who buys factors of production at certain prices in order to combine them into a product with a view to selling it at uncertain prices in future.”

Concept of Entrepreneur

• Knight: “Entrepreneur is the economic functioning who undertakes such responsibility of uncertainty which by its very nature cannot be insured nor capitalised nor salaried too.”

Concept of Entrepreneur

• JEAN-BAPTISTE SAY: “An entrepreneur who combines the land of one, labor of another and capital of yet another and produces a product. By selling the product in the market, he pays interest on capital, rent on land, and wages to labor. What remains is his profit. He has to surmount obstacles, suppress anxieties, repair misfortunes and device expedients.”

Concept of Entrepreneur

• New Encyclopedia Britannica: “Entrepreneur is an individual who bears the risk of operating a business in the face of uncertainty about the future conditions.”

Concept of Entrepreneur• Joseph A. Schumpeter: “Entrepreneur is an

individual who introduces something new in the economy – a method of production not yet tested by experience in the branch of manufacture concerned, a product with which consumers are not yet familiar, a new source of raw material or of new markets and the like.”

• “Entrepreneur are creative disrupters. Those who bring resources together in an unusual situations to generate profits.

Concept of Entrepreneur

• Peter F. Drucker: “Entrepreneur is one who always searches for changes, responds to them and exploits them as an opportunity.”

• The entrepreneur uses resources not merely to solve problems but also to take advantage of opportunities.

Concept of Entrepreneur

• Karl Vesper: “Entrepreneurs are achievement oriented individuals driven to seek challenges and new accomplishments.”

WHO IS AN ENTREPENUER

• Entrepreneur are doers and not thinkers.

• They do unexpected things.

• Often adventurers, they can at once disrupt a society and instigate progress.

• They are change agents of progressive societies.

• They are the movers and shakers who constructively disrupt the status quo.

Types of Entrepreneurs• Joseph A. Schumpeter: Talks of

adventurous entrepreneur – one who acts on his own account, introduces changes that others do not dare to experiment with.

• Arthur H. Cole: i) Empirical Entrepreneur – one who hardly introduces anything revolutionary as follows the rule of thumb.ii) Rational entrepreneur – one who is well – informed about the general economic conditions and introduces changes that look more revolutionary.

Concept of Entrepreneur

iii) Cognitive Entrepreneur: One who is well-informed, draws upon the advices and services of experts and introduces changes that reflect complete break from the existing frame of things.

CLARENCE DANHOF classifies as:

i. Innovative Entrepreneur: Aggressive and industrial leader, he introduces new products, new methods, new methods of production, opens new markets and reorganises the enterprise.

ii. Imitative or Adoptive Entrepreneur: He imitates innovations done by others. CDChin Shipyard used technology provided by Mitsubishi Heavy industries, Japan.

CLARENCE DANHOF classifies as:

iii. Fabian Entrepreneur – cautions, skeptical, shy, lazy. No will or desire. No risk but follows footsteps of predecessors, is guided by custom, tradition, past practices.

iv. Drone Entrepreneur: Laggard- refuses to adopt and use opportunities. He may even be pushed out of market when product marketability.

Some of other Types of Entrepreneurs• Nascent Entrepreneur: An individual who is in

the process of starting a new business.• Novice Entrepreneur: An individual who has no

previous business experience as a founder inheritor.

• Habitual Entrepreneur: An individual who has prior ownership experience.

• Serial Entrepreneur: An individual who has sold or closed an original business, established another new business, sold and closed it, and continues that cycle of entrepreneurial behaviour.

Some of other types of Entrepreneurs

• Portfolio Entrepreneur: An individual who retains an original business and builds a portfolio of additional businesses through inheriting, establishing or purchasing them.

Entrepreneurial Values

• Values are the inner most layer of the self which provide goal and direction to an individual.

– Innovativeness

– Independence

– Outstanding Performance

– Respect for work

Entrepreneurial AttitudeTendencies to act in response to stimulus is

called attitude.

• Tendency to take moderate risk.

• Imaginative

• Initiative

• An eye for economic activity

• Belief that he can change the environment

• Enjoyment of freedom of expression

• Analysis of situation and planning Action

• Satisfaction from successful completion of task.