Danish Maniyar

 

 

 

 

 

 

 

 

 

ENTREPRENEURIAL DEVELOPMENT

 

 

 

BY DANISH MANIYAR

 

ENTREPRENEUR AND AUTHOR

 

 

 

Entrepreneurship

 

Introduction

 

Entrepreneurship refers to all those activities which are to be carried out by a person to establish and to run the business enterprises in accordance with the changing social, political and economic environments. Entrepreneurship includes activities relating to the anticipation of the consumers likes and dislikes, feelings and behaviors, tastes and fashions and the introduction of business ventures to meet out all these expectations of the consumers.

 

Entrepreneurship is considered as a ‗new product‘that would enable businessmen to develop new form of business organization and new business activities catering to the changing needs of the society. The liberalization of cultural rigidities are mainly due to this new product ‗entrepreneurship‘ Entrepreneurship is the abilit y of entrepreneurs to assess the risks and establish businesses which are risky but at the same time suits perfectly to the changing scenarios of the economy.

 

What is Entrepreneurship?

 

There are many meanings of the term ‗entrepreneurship‘. After attentively discussing all the available ones, we can conclude that entrepreneurship is a system of operating business in which opportunities existing within the scope of a market are exploited. Self-employment necessitates that any available opportunities within the economic system should be utilized in the creation and functioning of new organizations. A potential entrepreneur should show the interest to seek out investment opportunities in the market, so that they can run the enterprise successfully based on the identifiable opportunities. Thus, going through the above responsibilities of an entrepreneur, the term ‗entrepreneurship‘ has been finally defined as a function which covers multiple functions such as:

 

• Building organizations.

 

• Providing self-employment

 

• Utilization of available resources

 

• Innovation applied to the novel concept

 

• Bringing together multiple factors of production in a tangible manner.

 

• Identifying and exploiting business opportunities within the available market.

 

 

Who is an Entrepreneur?

 

Entrepreneurs are business people who can detect and sense the availability of business opportunities in any given scenario. They will utilize these opportunities to create new products by employing new production methods in different markets. They will also function in different ways by using various resources who will give them profit. It is important to note that although most entrepreneurial businesses start small, the owners of such businesses need not be small scale owners. They could in fact be big business owners, who first try and test the waters before investing big time in the business. Small business owners dread risk, but successful entrepreneurs are very innovative and know how to operate profitably in a business environment, even if the risk is very high.

 

In fact, innovation is the life blood of any kind of entrepreneurs; this is one of the tools that helps them gain an advantage over established players in the market. Entrepreneurs are, thus, defined as ―individuals or groups of individuals who carry out entrepreneurship activities that are based on their innovative approaches to solving real-word problems‖.

 

Types of Entrepreneurs:

 

 

Based on their working relationship with the business environment they are functioning in, various types of entrepreneurs can be found. The chief categories are these four types of entrepreneurs, i.e.

 

• Innovative entrepreneurs,



• Imitating Entrepreneurs,



• Fabian Entrepreneurs, and



• Drone Entrepreneurs.

 

 

Let us now discuss each of them in detail.

 

 

Innovative Entrepreneurs : This type of an entrepreneur is more interested in introducing some new ideas into the market, organization or in the nation. They are drawn towards innovations and invest a lot of time and wealth in doing research and development.

Imitating Entrepreneurs: These are often disparagingly referred to as ‗copy cats‘. They observe an existing successful system and replicate it in a manner where all the deficiencies of the original business model are addressed and all its efficiencies are retained. These entrepreneurs help to improve an existing product or production process and can offer suggestions to enhance the use of bettertechnology.

 

Fabian Entrepreneurs: These are entrepreneurs that are very careful in their approaches and cautious in adopting any changes. They are not prone to sudden decisions and try to shy away from any innovations or change that doesn‘t fit their narrative.

 

Drone Entrepreneurs: These are entrepreneurs who do not like a change. They are considered as ‗old school‘. They want to do business in their own traditional or orthodox methods of production and systems. Such people attach pride and tradition to even outdated methods of doing business.

 

Roles of an Entrepreneur:

 

 

Entrepreneurs fulfill the following three dominant roles:

 

 

• Economic Change



• Social Change



• Technological Change

 

 

These are referred to as behavioral roles. All entrepreneurs have these common characteristics and decide to become an entrepreneur due to the factors or circumstances in their lives which made them think the way they do. To do their work effectively and operate a successful business, these entrepreneurs should perform certain roles. These roles are the same as the basic managerial roles.

THE ENTREPRENEURIAL MINDSET

 

 

Entrepreneurial mindset refers to a specific state of mind which orientates human conduct towards entrepreneurial activities and outcomes. Individuals with entrepreneurial mindsets are often drawn to opportunities, innovation and new value creation. Characteristics include the

 

 

ability to take calculated risks and accept the realities of change and uncertainty.

 

 

 

The traditional career path is an anachronism. Statistics show 40 to 50 percent of students entering college in 2016 will be self-employed or will freelance at some point in their careers, according to a study commissioned by Intuit. The economy, students‘ desires and the world‘s expectations of students are all very different than what I faced when I graduated college. There is no better way to prepare students for the world of the 21st century, whether they aspire to work for a large company, start their own business, go into academia or devote themselves to public service than through cultivating their skills inentrepreneurship.

 

 

 

When we teach entrepreneurship, the emphasis is on developing skills, not starting businesses. Of course we support and encourage those students who are passionate about launching the next Facebook, and there are many resources at MSU to help them. Rather the goal is about developing the inter-disciplinary skills that lead to the development of an ―entrepreneurial mindset.‖

 

 

 

To me the term embodies a set of cross-functional life and professional skills that describe someone who is innovative, resourceful and creates value. The entrepreneurial mindset can be applied in many contexts. It applies to employees in large, hierarchical entities, and it applies to community organizers, academics, inventors, doctors, lawyers, politicians, musicians and public servants. In no way is it unique to startup companies, and the skills that are developed are relevant to everyone. Our premise is that learning the entrepreneurial mindset is a critically valuable 21st century skill. Those who learn it well will have outsized success in their careers — no matter what they choose to do — because by definition they become resourceful and adaptable.

 

 

 

Entrepreneurism must be practiced to be learned. It is experiential. Just as you can‘t learn to swim at the library, you can‘t learn what entrepreneurship is about unless you have experienced it. We are putting programs in place now to add an experiential dimension to our entrepreneurship and innovation curriculum.

 

 

And for those students who aspire to start their own business, there is no better time to do it than while they are in college since the cost of doing so goes up an order of magnitude the minute they lose their full-time student status. On campus students have access to facilities (like our ideation center, The Hive), an incubator (The Hatch), mentors, support and funding. Building a business is hard and most fail. But that‘s not the point. The point is that in the trying, students develop skills that pay handsome dividends long into their careers — decades in my case. The justification is in the experience, not in the outcome.

 

 

The Revolutionary Impact of Entrepreneurship

 

Many people around the world are calling for an ―entrepreneurial revolution‖ to fix social and economic problems. This call naively assumes that more entrepreneurs are needed to address these issues. Increasing the number of entrepreneurs, however, is not as critical as persuading entrepreneurs to improve their societies through growth, innovation and social transformation. The revolution should be one of transforming contemporary entrepreneurial culture to make it more socially minded.

 

 

Entrepreneurs are known for creating new ventures that creatively solve problems. This basic definition, I believe, has to be expanded to conceive of entrepreneurs as powerful agents of cultural change capable of transforming their societies. This does not mean taking time after work to address social issues. It means consciously incorporating social goals into entrepreneurs‘ strategic thinking as a means to maximize personal and collective benefits. It demands getting rid of the paradigm that only governments and established companies are capable of addressing social needs. Entrepreneurs, who operate closer to the people, are in a perfect position to identify and to tackle critical problems, such as poverty and the lack of access to health and education.

 

 

Contemporary societies are demanding more efficient and socially interconnected ways to satisfy their necessities. To make this happen, entrepreneurs must understand that, by establishing new ventures that aim both to create economic prosperity and to spur social development, they are ensuring their long-term sustainability. More developed nations translate into platforms for larger growth and even internationalization.

Functions of an Entrepreneur

 

 

An entrepreneur is expected to perform the following functions.

 

 

1. Risk Absorption

 

 

The entrepreneur assumes all possible risks of business. A business risk also involves the risk due to the possibility of changes in the tastes of consumers, techniques of consumers, techniques of production and new inventions. Such risks are not insurable. If they materialise, the entrepreneur has to bear the loss himself. Thus, Risk-bearing or uncertainty-bearing still remains the most function of an entrepreneur. An entrepreneur tries to reduce the uncertainties by his initiative, skill and good judgment.

 

1. Formulate Strategic Business Decisions

 

 

The entrepreneur has to decide the nature and type of goods to be produced. He enters the particular industry which offers from he best prospects and produces whatever commodities he thinks will pay him the most employs those methods of production which seem to him the most profitable. He effects suitable changes in the size of the business, its location techniques of production and does everything that is needed for the development of his business.

 

1. Execute Managerial Functions

 

 

The entrepreneur performs the managerial functions though the managerial functions are different from entrepreneurial functions. He formulates production plans, arranges finance, purchased, raw material provides, production facilities, organises sales an assumes the task of personnel management. In a large establishment these management functions are delegated to the paid managerial personnel.

 

1. Adopt Innovation Function

 

An important funct ion of an entrepreneur is ―Inno vat ion‖. He conceives the idea for the improvement in the quality of production line. He considers the economic inability and technological feasibility in bringing about improve quality. The introduction of different kinds of Electronic gadgets is an example of such an innovation of new products. Innovation is an ongoing function rather than once for all, or possibly intermittent activity

Characteristics of Entrepreneur

 

1. Facilitating Character

 

An entrepreneur must build a team, keep it motivated, and provide an environment for individual growth and career development

 

1. Self-Confidence

 

Entrepreneurs must have belief in themselves and the ability to achieve their oils.

 

1. Work with Vision and Mission

 

An entrepreneur must be committed to the project with a time horizon of f vie to seven years. No ninety-day wonders are allowed.

 

1. High Degree of Endurance

 

Success of an entrepreneur demands the ability to work long hours for sustain period of time

 

1. Trouble Shooting Nature

 

An entrepreneur must have an intense desire to complete task or solve a problem. Creativity is an essential ingredient

 

1. Initiative and Enterprising Personality

 

An entrepreneur must have initiative, accepting personal responsibility for a ones, and above all makegood use of resources.

 

1. Goal Setter

 

An entrepreneur must be able to set challenging but realistic goals.

 

 

1. Calculated Risk-Taking Ability

 

An entrepreneur must be a moderate risk-taker and learn from any failures.

 

 

 

 

Distinguish Between The Terms Entrepreneur And Entrepreneurship:

 

 

 

Though both the terms entrepreneurs and entrepreneurship are almost imilar the possess several differentiating terms with them. The differences between the entrepreneurs and entrepreneurship are as follows:

 

Entrepreneur

 

Entrepreneurship

 

 

 

 

 

 

 

An entrepreneur one who undertakes

 

Entrepreneurship is the practice of starting new

 

 

and operates a new enterprise and

 

organizations, particularly new businesses generally

 

 

assumes some accountability for the

 

in responses to identified opportunities.

 

 

inherent risks.

 

 

 

 

 

 

 

 

 

Entrepreneur is

 

 

often

 

 

Entrepreneurship ranges in scale from solo projects to

 

 

synonymous with founder.

 

major undertakings creating many job opportunities.

 

 

 

 

 

 

The person who starts and operates a

The process in which an entrepreneur starts and

business

enterprise

is

an

operates his business

enterprise is

entrepreneur.

 

 

 

entrepreneurship.

 

 

 

 

 

 

The entrepreneur is a coordinator as

 

Entrepreneurship

is

the coordination

 

 

he coordinates all the three elements

 

maintained by an entrepreneur.

 

 

 

of production i.e. land, labor and

 

 

 

 

 

 

capital.

 

 

 

 

 

 

 

 

 

 

 

The person who innovates something

 

The innovation of something new or the process of

 

 

new is an entrepreneur.

 

innovation is entrepreneurship.

 

 

 

 

 

 

 

 

 

 

He who leads an enterprise towards

The way in which an entrepreneur leads his

its vision thorough leadership,

manpower, motivates them for the achievement of

motivation is an entrepreneur.

the firms goal is entrepreneurship.

 

 

 

 

 

He who bears risk of the firm for

 

The risk bearing practice that is

 

 

 

the sake of making a reasonable

 

done

byan entrepreneur

is

 

 

 

 

 

 

 

 

 

 

Approaches to entrepreneurship:-

 

There are broadly four approaches to the study of entrepreneurship:

 

• 1. Sociological Approach

 



 

• 2. Psychological Approach

 



 

• 3. Political Approach

 



 

• 4. Composite Approach

 

 

1. Sociological Approach:

 

The sociological approach to the study of entrepreneurship deals with social and cultural factors responsible for the nature and growth of entrepreneurship development in a society. It attempts to understand as to why a social structure and culture facilitates or inhibits entrepreneurial development. It believes that laws of development lie in the social structure and culture of a region.

 

 

• It tries to seek answer to the question, why one segment of social structure produces larger number of entrepreneurs than the other. For example, it is mainly the Samurai community that could rise to entrepreneurship during the Meiji regime in Japan. Indian entrepreneurship, from the very beginning, has been dominated by three communities: the Parsis, the Gujratis and the Marwaris. They, however, continue to dominate the business sector even today.



 Max Weber, Cocharan, Young, Hoselitz and Hagen are prominent among the scholars known for sociological interpretation of entrepreneurial development. Max Weber‘s thesis is that Protestantism, and not Catholicism, could help generate entrepreneurship and modern capitalism. Weber believed that the Hindu religion of India did not have the potential to promote

entrepreneurship.



 

• The traditional social structures; the caste and the joint family which were essential attributes of the Hindu society, according to Weber, have been detrimental to the process

of entrepreneurial growth. Kapp (1963) also holds the Hindu culture and Hindu social organization responsible for slow pace of development and suggests that ―a lasting solution of the problem can be found only by a gradual but systematic transformation of India‘s social system, world view and the level of personal aspirations‖.

 

 The backward economies, according to Hoselitz, exhibit usually a lack of reliance on achievement as a norm for acquiring economic goods. Achievement-oriented behaviour is however not fully

absent but exists only in limited cases.



 

• Distribution of economic goods in primitive societies and also in medieval societies has been typical example of ascriptive way of distribution pattern. The advanced societies, on the other hand, exhibit the norms of achievement-oriented behaviour. In such societies, there is system of formal education and vocational and professional training.



 

• The second characteristic of underdeveloped economies is the prevalence of particularism in the distribution of economically relevant tasks among performers. Particularistic pattern of distribution has been prevalent, for example, in the traditional Indian caste system. The advanced societies have universalistic i.e., rational approach to the allocation of resources.



 

• Again, it is to be emphasized that both these variables do not exist in the respective societies in their pure forms. The movement of society is seen from particularistic to universalistic system as it moves from backward to advanced economy. Sir Henry Maine has also postulated this movement with different terminology and that is from ‗status to contract‘.



 Thirdly, in the backward societies, economic activities are quite diffuse. It is so because of the fact that there is a low level of development of division of labour. Partly it is the result and, at the same time, cause of the low level of productivity. Thus, the specialization of tasks and the finer division of labour require the development of principle of specificity and rational allocation of

roles.



 

• Specificity is the outcome of rational planning, the result of the combined application of the principles of universalism and achievement as the norm to economically relevant social situations. Hoselitz concludes that the analysis of social structural aspects of the different iat ion between ―advanced‖ and ―underdeveloped‖ economies leads us to conclude that we expect the former to exhibit predominantly universalistic norms in

determining the selection process for the attainment of economically relevant roles; that the roles themselves are functionally highly specific; that the predominant norms by which the selection process for those roles is regulated are based on the principle of achievement, or ―performance‖.

 

 In an underdeveloped society, on the contrary, particularism, functional diffusion and the principle of ascription predominate as regulators of social structural relations especially in its economic aspects and the orientation of actors in economically or politically influential roles is

determined predominantly by considerations of their ego.



 Entrepreneurial characteristics, such as the ability to make new combinations of factors of production, managerial skill perception of opportunity, risk-taking, inventiveness and achievement motivation are not merely a pale reflection of these antecedent conditions; they constitute an independent causal factor mediating between structural factors and consequent

economic development.



 

• Modern democratic system is more conducive to the development of innovative behaviour. According to him, they are more prone to taking up entrepreneurship as a career whose existing social status has been denigrated in the course of historical change.

 

1. Psychological Approach:

 

We have understood by now that the entrepreneur is not a common person. He has a typical personality with creative, managerial and imaginative skill who can innovate and contribute positively to an industrial project. This kind of personality develops in a person who has strong motivation for achievement.

 

 

 David McClelland, the greatest exponent of the psychological approach to entrepreneurship, is of the view that the genesis and performance of entrepreneurs requires strong motivation for achievement. The achievement motivation, according to McClelland, is a function of child rearing

practices in a society.



 

• Unlike the sociological approach which asserts that the existing social structure determines entrepreneurship and economic development, the psychological approach seeks to find out how the social structure affects the attitude of the people of a society. Areas like entrepreneurial commitments, tendency of saving and investment and business management have been usually covered by the studies carried out by psychologists.

• Collins, Moore and others have examined a sub-category of business leaders. Their study of innovating entrepreneurs revealed that many of their subjects had experienced childhood poverty and disrupted family lives which stimulated strong motivations for personal achievements.



 

 John H. Kunkel questioned the validity of many psycho-dynamic concepts and principles and the unresolved controversy surrounding the role of social structure and personality in the process of

economic development. He propounds the behavioural approach as an alternative.



 

• Joseph Schumpeter, the first to offer a systematic interpretation of entrepreneurship, had psychological perspective in his mind when he said that the entrepreneur possesses energy of will and mind to overcome fixed habits of thought and the capacity to withstand social opposition.

 

 

1. Political Approach:

 

 The political approach to entrepreneurship deals with the issues involved in relationships between entrepreneurship development and the state particularly in the context of the role of the latter in the development of entrepreneurs. The role of the government is crucial in deciding the nature

and rate of development.



 

 Rapid growth of industries and good pace of economic development largely depend on the merit of economic policies of the government. Democratic and relatively stable governments are

supposed to be conducive to economic development.



 

 Entrepreneurial supply would be greater in a state which believes in the ideology of capitalistic liberalism and provides requisite credit facility, appropriate training opportunity, technological

and scientific knowledge and adequate incentive.



 

• The Government of India pursued the policy of mixed economy till the end of 80s of the 20th century which could not contribute to growth rate of 3 to 4 per cent for over 40 years of the economic regime of the country. Corruption, laziness, traditional power structure and weak governance, responsible for sluggish development, could not be removed by the state.

 Economic reforms initiated by India from 1991 with an objective to liberalize economic policies, promote individual investors and bring about structural adjustment have undoubtedly yielded

significant results.



 

• Entrepreneurial growth in India had been very slow till 1990. A long span of colonial rule and the following strict and partially controlled economy and red-tapism did not allow fast entrepreneurial growth. By 1990, the number of small-scale units in the country was about 10 lakh which, due to economic reform movement, swelled up to about 35 lakh by 2005.



• Political studies on entrepreneurship have revealed that the late growth of entre - preneurship in

 

Russia and France had been due to the existing political conditions in the countries. Japan‘s fast entrepreneurial growth can be attributed to the country‘s political system which peculiarly integrated the industrial and agricultural economy.

 

1. Composite Approach:

 

 The entrepreneurship is a complex phenomenon. None of the approaches discussed above has been able to explain the entrepreneurial dynamics fully. Due to their non-holistic nature, they

have failed to offer the precise laws of supply and success of entrepreneurship.



 

• It has been observed that entrepreneurial behaviour is an outcome of the interplay of multiple social, cultural, economic, political and psychological factors. No single factor is entirely responsible for the supply of successful entrepreneurs. We, in our study of carpet manufacturers in the Bhadohi-Mirjapur belt in India, found no manufacturer entering into business on account of any single factor.



 Dwijendra Tripathi also, in his comparative study of historical roots of industrial entrepreneurship in India and Japan, has observed that the emergence, performance and perception of entrepreneurs can be understood by an integrated approach which would take into account all the possible sociological, psychological, economic and political factors contributing to the increase in

entrepreneurial behaviour.



 

• The variables like business acumen, motivation for achievement, modern and progressive value orientation, minimum necessary capital, technical knowledge, adequate market and

favorable political conditions need to exist together for the development of a milieu conducive to entrepreneurial supply and industrial development.

 

 

Entrepreneurship Challenges in 21st. Century:

 

The definition of entrepreneurship has been debated among scholars, educators, researchers, and policy makers since the concept was first established in the early 1700‘s. The term

 

―entrepreneurship‖ comes from the French verb ―entreprendre‖ and the German word

 

―unternehmen‖, both means to ―undertake‖. Bygrave and Hofer in1891 defined the entrepreneurial process as ‗involving all the functions, activities, and actions associated with perceiving of opportunities and creation of organizations to pursue them‘. Joseph Schumpeter introduced the modern definition of ‗entrepreneurship‘ in 1934. According to Schumpeter, ―the carrying out of new combinations we call ‗enterprise‘,‖ and ― the individuals whose function it is to carry them out we call ‗entrepreneurs‘.‖ Schumpeter tied entrepreneurship to the creation of five basic ―new combinations‖ namely: introd uction of a new product, introduction of a ne w method of production, opening of a new market, the conquest of a new source of supply and carrying out of a new organization of industry. Peter Drucker proposed that ‗entrepreneurship‘ is a practice. What this means is that entrepreneurship is not a state of being nor is it characterized by making planes that are not acted upon. Entrepreneurship begins with action, creation of new organization. This organization may or may not become self-sustaining and in fact, may never earn significant revenues. But, when individuals create a new organization, they have entered the entrepreneurship paradigm.

 

The study of entrepreneurship has relevance today, not only because it helps entrepreneurs better fulfill their personal needs but because of the economic contribution of the new ventures. More than increasing national income by creating new jobs, entrepreneurship acts as a positive force in economic growth by serving as the bridge between innovation and market place. Although government gives great support to basic and applied research, it has ot had great success in translating the technological innovations to products or services. Although entrepreneurships offers a promise of marriage of those research capabilities and business skills that one expects from a large corporation, the results have not been spectacular. This leaves the entrepreneur, who frequently lacks both technical and business skills, to serve as the major link in the process of innovation development, and economic growth and revitalization. The study of entrepreneurship

and education of potential entrepreneurs are essential parts of any attempt to strengthen this link so essential to a country‘s economic well-being.

 

 

 

 

 

Questions:

 

 

1. What are the approaches to entrepreneurship?

 

1. Explain the revolution impact of entrepreneurship.

 

1. Distinguish between ‗entrepreneur‘, Entrepreneurship‘ and ‗Enterprise‘ Discuss the role of an entrepreneur for economic development.

 

1. How can an organizational development be aided by having a good entrepreneurial mindset.

 

1. What are the new trends you have noticed in Entrepreneurship during 21st century?

Entrepreneurship refers to all those activities which are to be carried out by a person to establish and to run the business enterprises in accordance with the changing social, political and economic environments. Topics covered includes: Types of Entrepreneur, The Entrepreneurial Mindset, The Revolutionary Impact of Entrepreneurship, The Entrepreneurial Mindset and Personality, Stress and Entrepreneur, Entrepreneurial Ego, The Entrepreneurial Motivations, Framework for sustainable corporate entrepreneurship, Launching An Entrepreneurial Venture.

 

 

 

Author(s): Danish Maniyar

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Tag der Veröffentlichung: 26.09.2021

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