1. ENTREPRENEURSHIP MANAGEMENT
Prof Bharat Nadkarni

2. Entrepreneurship Management
Reference Books
Entrepreneurship by Hisrich & Peters
Entrepreneurship by Rajeev Roy (Oxford Univ. Press)
Entrepreneurial Management by R K Mittal
Entrepreneurship Development – Programmes & Practices by J S Saini
Entrepreneurship – strategies and resources by Marc D Dollinger
Indian Entrepreneurship – its past and present by V Chernovskaya
Entrepreneurship Management by P N Singh & J C Saboo

3. Entrepreneurship : Definition
Entrepreneurship : Definition
Entrepreneurship is the process of creating something different
with value by devoting the necessary time and effort, assuming
the accompanying financial, psychic, social risks and receiving
the resulting rewards of monetary and personal satisfaction and
independence.
Points to note
Creating something different with value
Devoting necessary time & effort
Assuming accompanying financial, psychic and social risks
Receiving resulting rewards – Monetary, Personal satisfaction, independence

4. Entrepreneurship Management
Entrepreneurial Traits
Need for achievement
High level of motivation
Creative / Innovative
Moderate risk taker
Agility / quickness in analysing and picking up opportunities
Self Confidence
Excellent Leadership Qualities
Good business acumen
Independence of thought & action
Flexible/ Ready to change
Resilience

5. Entrepreneurship Management
Who is an Entrepreneur
“Entrepreneur”, a french word literally translated means go
between.
Oxford Dictionary defines it as a person who organizes a
commercial undertaking involving personal financial risk.
“An Entrepreneur is one who organizes and operates an
enterprise for personal gain. He pays current prices for the
materials consumed in the business, for the use of the land, for
the personal services he employs and for the capital he
requires. He contributes his own initiative, skill and ingenuity
in planning, organizing and administering the enterprise. He
also assumes the chance of loss and gain consequent to
unforeseen and uncontrollable circumstances. The net residue
of the annual receipts of the enterprise after all costs have been
paid, he retains for himself.”

6. Entrepreneurship Management
Decision Process for a potential entrepreneur
Form new enterprise
Desirable Possible
- Cultural - Government
- Family - Background
- Teachers - Marketing
- Peers - Financing
- Role Models
Change from present lifestyle
- Work Environment
- Disruption

7. Entrepreneurship Management
Origin & Development
Marco Polo as a Trader
Thomas Edison as an Inventor
Narayan Murthy / Shahnaz Huassain as Innovators
J N Tata & Dhirubhai Ambani as Visionaries
Venture Capital concept
The function of an entrepreneur is to reform or revolutionize
the pattern of production by exploiting an invention or more
generally an untried technological possibility for producing a
new commodity or producing an old one in a new way, opening
a new source of supply or a new outlet for products by re-
organizing a new industry.

8. Entrepreneurship Management
Challenges Involved
Person who actually starts his/ her own business, the experience is filled with enthusiasm, frustration, anxiety and hard work. There is a high failure rate due to:
External Factors
Inflation, recession, lack of infrastructure, corruption, economic & political uncertainty, Intense competition.
Internal Factors
Lack of capital, poor sales, lack of managerial ability.
WHAT THEN CAUSES A PERSON TO MAKE THIS DIFFICULT DECISION?

9. Employment for near & dear Prolonged career for next generations
 Advantages of Entrepreneurship
To an Individual
Self Employment
Employment for near & dear
Prolonged career for next generations
Innovation & Creativity
Unlimited income/ higher retained income
Freedom to use own ideas
Independence
Satisfaction

10. Provides larger employment Results in wider distribution of wealth
 Advantages of Entrepreneurship
To the Nation
Provides larger employment
Results in wider distribution of wealth
Mobilises local resources, skills and savings
Accelerates the pace of economic development
Stimulates innovation & efficiency.
Competition

11. Growth of education – science, technology & management
 Factors favouring Entrepreneurship
Growth of education – science, technology & management
Developed infrastructure facilities
Financial assistance
Training facilities
Protective and promotional policies
Globalization

12. Entrepreneurship Theories
: French verb – Go between or To undertake
: Person bearing Risks of Profit in a fixed price contract
: Richard Cantillon – Person bearing risks is different from capital supplier (Risk)
: J B Say – Shifts economic resources out of an area of
lower into an area of higher productivity & greater yields (Value Addition)
: Joseph Schumpeter – “ Innovation is the sole cause of profit.
: David McClelland – Need for Achievement – N Ach factor - highly motivated, energetic, moderate risk taker. – Need for Power – Need for Affiliation.

13. Entrepreneurship Theories .... Contd.
: Peter Drucker – Searches for change, responds to it and exploits as opportunity. (Opportunity focused)
: Karl Vesper – Behaviour perceptions – Economists, Psychologists, Businessmen, Politicians, (Environment)
: Gifford Pinchot – Intrapreneur
: Robert Hisrich – Creating something different with value, devoting time and effort, assuming risks – financial, psychic and social, results – rewards, satisfaction (Leadership & Vision)

14. Entrepreneurship Management
How entrepreneurship helps in economic
development
Employment Generation
Distribution of economic power
Optimum utilisation of regional resources
Meeting the demand gap by seizing appropriate opportunity
Export potential
Regional development

15. Entrepreneurship Management
Karl Vesper’s Theory

16. Entrepreneurship Management
Entrepreneur to an economist
One who brings resources, labor, material and other assets into combinations that make their value greater than before and also one who introduces changes, innovations and a new order.
Entrepreneur to a psychologist
One who is typically driven by certain forces – need to obtain or attain something, to experiment, to accomplish or perhaps to escape authority of others.
Entrepreneur to a businessman
One who appears as a threat and an aggressive competitor OR an ally, a source of supply, a customer or someone who creates wealth for others as well, who finds better ways to utilize resources, reduce waste and produces jobs for others.

17. Entrepreneurship & Leadership MCCLELLAND’S NEED THEORY OF MOTIVATION

18. MCCLELLAND’S NEED THEORY OF MOTIVATION
Three basic types of motivating needs
1] Need for achievement
Have an intense desire for success and an equally intense fear of failure
Want to be challenged
Set moderately difficult goals for themselves
Take realistic approach to life
Would analyse and assess problems and take personal responsibility of completing a job
Like specific and prompt feedback on how they are doing

19. MCCLELLAND’S NEED THEORY OF MOTIVATION
2] need for power
People with high need for power have a great concern for exercising influence and control
They seek positions of leadership
Good conversationalists
Can be argumentative
Forceful, outspoken, hardheaded and demanding
Enjoy mentoring

20. MCCLELLAND’S NEED THEORY OF MOTIVATION
3] need for affiliation
Derive pleasure from being loved and tend to avoid the pain of being rejected by a social group
Concerned with maintaining pleasant social relationships
Enjoy sense of intimacy and understanding
Ready to console and help others in trouble

21. MCCLELLAND’S NEED THEORY OF MOTIVATION
How it applies to managers
Entrepreneurs : showed very high need for achievement ; fairly high need for power ; low in their need for affiliation
In small companies/ Ventures : president/ entrepreneur has a very high achievement motivation
In large companies :
CEO/ Entrepreneur tend to be average in achievement but stronger in power and affiliation
Entrepreneurs: rated higher in achievement motivation

22. Entrepreneurship Management
Innovation and Entrepreneurship
Prof Bharat Nadkarni

23. Entrepreneurship Management
Breaking of the Circular Flow
Schumpeter’s Model
Profits caused by a particular innovation tends to be competed away as other imitate and adapt that. But if the entrepreneur comes out with another innovation at that time when the favourable effects of the former innovation are dying out, he will make profits again. Therefore, as long as innovation exist, profits continue to arise out of them. According to Schumpeter, Innovation is the sole cause of Profit.

24. Entrepreneurship Management
Thank You