BBA - 301 - Guru Jambheshwar University of Science ...

1 Bachelor of Business Administration( )BBA - 301 ENTREPRENEURSHIP DEVELOPMENT&NEW ENTERPRISE MANAGEMENTD irectorate of Distance EducationGuru Jambheshwar UniversityHISAR-125001 CONTENTSL esson No. Lesson NamePage and Affecting Entrepreneurship Growth :Economic, Social, Psychological andPolitical and Procedures to start andexpand one s own Factors affecting success of anew business; reasons for the failureand visible problems for of Factory analysis and market potential Capital Support to entrepreneurs :Policy Initiatives for EntrepreneurialGrowth; Incentives and Support to Development Programmes325(3)LESSON : 1 ENTREPRENEUR AND ENTREPRENEURSHIPE ntrepreneurs playa vital role in the economic development of a development of a country depends primarily on its entrepreneur is often considered as a person who sets up his own businessor industry.

2 He has initiative, drive, skill and spirit of innovation who aims athigh goals. The entrepreneur is the individual that identifies the opportunity,gathers the necessary resources and is ultimately responsible for theperformance of the organisation. entrepreneurs are action oriented, highlymotivated individuals who take risks to achieve is the purposeful activity of an individual or a groupof associated individuals, undertaken to initiate maintain or aggrandize profitby production, or distribution of economic goods and services. Entrepreneurshipis very often associated with adventurism, risk bearing, innovating creativityetc.

3 It is concerned with making dynamic changes in the process of production,innovation in production, new usage for materials etc. It is a mental attitudeto take calculated risks with a view to attain certain objectives. It also meansdoing something in a new and better OF ENTREPRENEURThe story of defining entrepreneur and entrepreneurship will sound likethe story of six blind men describing an. elephant. There is hardly any commonlyagreed upon definition among economic word entrepreneur is drived from the French word entreprendrewhich means to initiate or undertake. In the early sixteenth century, theFrenchmen who organised and led military expeditions were referred to as entrepreneurs .

4 The term entrepreneur was applied to business in the earlyeighteenth century by French Economist Richard Cantillon. According to him,the entrepreneur buys factor services at certain prices with a view to sell their(4)products at uncertain prices in the future. Richard Cantillon conceived of anentrepreneur as a bearer of non-insurable Frenchman, Say, expanded Cantillon s ideas andconceptualised the entrepreneur as an organiser of a business firm, central toits distributive and production functions. Beyond stressing the entrepreneur simportance to the business, Say did little with his entrepreneurial to Say, an entrepreneur is the economic agent who unties allmeans of production, the labour force of the one and the capital or land ofthe others and who finds in the value of the products his results from theiremployment, the reconstitution of the entire capital that he utilises and thevalue of the wages, the interest and the rent which he pays as well as profitbelonging to himself.

5 He emphasised the functions of co-ordination,organisation and supervision. Further, it can be said that the entrepreneur isan organiser and speculator of a business enterprise. The entrepreneur liftseconomic resources out of an area of lower into an area of high productivityand greater New Encyclopedia Britannica considers an entrepreneur as anindividual who bears the risk of operating a business in the face of uncertaintyabout the future conditions. Leading economists of all schools, including KarlMarx have emphasised the contribution of the entrepreneurs to the developmentof economies, but Joseph A.

6 Schumpeter who argues that the rate of growthin an economy depends to a great extent on the activities of entrepreneurs , hasprobably put greater emphasis on the entrepreneurial function than any the words of Joseph A. Schumpeter, The entrepreneur in an advancedeconomy is an individual who introduces something new in the economy amethod of production not yet tested by experience in the branch of manufactureconcerned, a product with which consumers are not yet familiar, a new sourceof raw material or of new markets and the like . The function of an entrepreneuraccording to him is to reform or revaluationise the pattern of production by(5)exploiting an invention or more generally, an untried technological possibilityfor producing a new commodity.

7 According to Schumpeter, an entrepreneuris an innovator, who introduces something new in the economy. Innovation maybe: (a) introduction of a. new product, (b) introduction of new methods ofproduction, (c) developing new markets and finding fresh sources of rawmaterials, and (d) making changes in the organisation and described entrepreneurs to be a specialised group or persons,who bear uncertainty; and uncertainty is defined as the risk which cannot becalculated. The entrepreneur, according to Knight, is the economic functionarywho undertakes such responsibility which, by its very nature, cannot be insuredor salaried.

8 He also guarantees specified sums to others in return for assignmentsmade to F. Drucker, in his book Innovative entrepreneurs definesentrepreneurs as innovators. entrepreneurs search for change and exploitopportunities. According to him Innovation is the specific tool of entrepreneurs ,the means by which they exploit changes as an opportunity for a differentbusiness or a different service. It is capable of being presented as a discipline,capable of being learned, capable of being practiced. entrepreneurs need tosearch purposefully for the sources of innovation, the changes and theirsymptoms that indicate opportunities for successful innovation.

9 And they needto know and to apply the principles of successful innovation . He further saidthat an entrepreneur is one who always searches for changes, responds to it,and exploits it as an and Lischerson in their recent work have described sixpossible schools of thought on entrepreneurs . The first school of thought Great Person School says that an entrepreneur is born with an intuitive ability a sixth sense and this sense helps him in start up stage. The second schoolof thought, Psychological Characteristics School explains thatentrepreneurs have unique values attitudes, and needs which drive them and helpthem especially in start-up stage.

10 The third school, Classical School of(6)Thought says that central characteristic of entrepreneurial behaviour isinnovation. This characteristic helps the entrepreneur much in start-up andearly growth. Management School is the fourth school of thought and it saysentrepreneurs are organisers of economic venture and they organise, own,manage and assume its risk. Such functional orientation helps them in earlygrowth and maturity. The fifth school of thought is the Leadership School .According to this school, entrepreneurs are leaders of people and they havethe ability to adopt their style to the needs of people.