y ENTREPRENEURSHIP AND NEW VENTURE PLANNING Dr Sapna Bansal sistant Professor Sri Ra hg eee RCO, University of Delhi. Dr. Yahaya Abubakar CER (Royal Highness) j= JSR PUBLISHING HOUSE LLP i- 6 WZ 61/8A, Vashisth Park, Pankha Road, New Delhi-11004CONTENTS BEE wtrooucriow | 1.1 Concept and Definition 1.2. WhoIs An Entrepreneur? 13 Entrepreneurial History in Indian Society 1.4 Functions Of Entrepreneurship Review Questions. 2. DIMENSIONS AND THEORIES OF ENTREPRENEURSHIP 14 21 Theories of Entrepreneurshi 22. The Entrepreneurial Mindset 2.3. Traits of Entrepreneurs 24 Entrepreneurship Process... 2.5 Determinants of Entrepreneurship 2.6 Factors affecting the emergence of Entrepreneurship Summary. Review Questions. 3. ENTREPRENEURSHIP IN ECONOMIC GROWTH 26 3.1 Role of an Entrepreneur in economic growth as Innovator:... 26 3.2. Generation of Employment Opportunities 28 3.3 Bringing About Social Stability and Balanced Regional Development of Industries ......29. oo xiv || Entrepreneurship and New Venture Planning ative Response to Society's Problem........., challenges of globalization “ee asa Cres 34° Entrepreneurship p and new 3.5 Entrepreneurshi Summary... Case studies Review Questions. TYPE OF ENTREPRENEURSHIP | 4. TYPES OF ENTREPRENEURSHIP 7 repreneurship-- 41 Types/Dimensions of Ent 4,2 Individual and Entrepreneurshij 4.3 Comparing Family Business Dynam prehensive Analysis 4.4 Nascent Entrepreneurship 4.5 Conclusion: Summaryav Case studies Review Questions. [ uNiT- | BUSINESS PLAN 5. BUSINESS IDEA AND INNOVATION 5 5.1 Creating Entrepreneurial Venture: 1 76 5.2. Business Ideas 5,3 Business Ideas - Feas 5.4 Sources Of Innovation, Creativity and Entrepreneurship. 5.5. Challenges in Managing Innovation ... 5.6 Incubators in Busines: 5.7 Fundraising in Entrepreneurship yy Analysis: Need and Element Summary: Case studies Review Questions. 6. ENTREPRENEURIAL STRATEGIES AND BUSINESS PLANNING 6.1 Entrepreneurial Strategy and Scaling Up 6.2. Business Plan......... 6.3 Drawing of Business Plan7. 8. FUNDING LANDSCAPE IN ENTREPRENEURSHIP 64 Failure Of Business Plan... ae 65 Team Building... ~ oe anne 20 Summary Case studies Review Questions, Ti MOBILIZING RESOURCES RESOURCE MOBILIZATION us 7.1 Meaning Process of Mobilising Resources Types Of Resources, Arrangement Funds... Institutions Facilitating Resource Mobilizztion . Sustainability in Resource Mobilization Review Questions... 8.1 What isa Start-Up Funding Proposal?....... 8.2 Traditional Sources of Financing .. 8.3 Venture Capital...... 8.4 Angel Investors .... 8.5 Business Incubators Summar; Case Study. Review Questions... MANAGERIAL ASPECTS OF BUSINESS AND GOVERNMENT INITIATIVES 9. MANAGERIAL ASPECTS OF BUSINESS 161 9.1 Managing Finance ... lL 9.2 Understanding Capital Structure... 9.3. Understanding Organization Structure 166ae xvi || Entrepreneurship and New Venture Planning Ged Management of Human Resources of a Nev Enterp Review Questions. TING MIX AND RELATIONSHIP MANAGEMENT DERSTANDING OF MARKETING MIX. 18: of Assets and Liabilities 1 , 18) 10. MARKE 10.1 UN 10.2. Management 10.3. Relationship Management... 10.4. Cost Management. 10.5. Understanding Family Business Management. Review Questions...Introduction Learning Outcomes Bx. s After studying this chapter, you should be able to understand: |11 Concept and Definition |12 Whois an Entrepreneur? 13, Entrepreneurial history in Indian Society 14 Tunctions of Entrepreneurship 1.1 Concept and Definition In this modern and fast moving world, the term entrepreneurship is rising rapidly and touching the skies, Almost everyday new innovations are made, new technologies are invented, and solutions of different problems are found out. Entrepreneurship Entrepreneurship is something which comes within and a great force insist to take risk and catch the opportunity, Just because of entrepreneurship, the world has founded solutions of many serious problems. Basically entrepreneurship is something like converting your ideas into reality, giving it an existence and growing it further to the next extent. Entrepreneurship is the art of finding out the opportunity prevailing in the society and creating something which is unique and new in the market. The term entrepreneurship has become more popular {rom last few years and people have started to switch from their jobs, and want to become entrepreneur as it gives them freedom in many aspects of life and business,oN 4 || Entrepreneurship and New Ventre Pan — ———— < geldom marked by smooth paths. It entails facing Fchal lenges, Yet, within this journey lies a profound opport ortunity The journey of an entreprene! ng setbacks. y abstacle surmounted serves serves as a buildi ing block navigating uncertainties, and oe for learning, personal growth, ane ‘ re fostering vee resilience ering determination pisa journey of transformation, where the entrepreneur Serves as a catalyst fo sxisting systems: envision innovative solutions, and set ambitious goals or ‘This relentless pursuit of novelty materializes in the form of viliaile a dynamic dance of future-gazing, meticulous planning, and k le hifts in the landscape and swiftly adapting their actions a constantly changing world. and unwavé Entrepreneurshi change. They see flaws if & satisfy their audiences needs: 1 products or enhanced offerings Isa ayn’ awareness of evolving trends. BY nticipating © entrepreneurs ensure their creations flourish in ‘ asbeen around fora very Fong time, In the last decade it has resurged as if The entre| reneurship hi i new dis aici been made. It isan elusive concept that cannot be defined precisely. It has been taken : _ » Le” yee ord “entreprendre” means “tO undertake. ta solution for the problem existing in the society, fy from the French wort ' In simple words, entrepreneurship is finding out a 0 ip is related to converting the ideas! thoughts into the reality and making can be said that entrepreneurs! the dream come true: So collectively it can into reality starting @ business, Imagine you see @ §8P in the market for the passion, and the willingness to take some risks. idea into a business. That's entrepreneurship in action! about launching a business; its a vibrant dance of innovation, sparking a chain reaction of positive disruptions. Entrepreneurs weave magic into production processes, conjuring novel uses for materials and even birthing entire markets from mere potential. They are more than business founders; they are opportunity alchemists, sniffing out unmet needs and gaps in the market like gold hidden in plain sight. With a keen eye and a restless spirit, they gather resources, fuel the fires of invention, and transform possibilities into tangible value. : The capacity and willingness to develop, organise and manage a business venture along with any of its risks in order to make a profit. The most obvious example of entrepreneurship is the starting of anew business venture. a economic terms, Entrepreneursh ip combined with land, labour, natural resources and capital can a i peal ari aan spirit is characterised by innovation and risk-taking, and is an essential ‘a nation’ » - * e ‘ ae 's ability to succeed in an ever changing and increasingly competitive global marketplace. intrepreneurship i s ici ir spreneurshtip is based on purposeful and systematic innovator. It included not only the independent business but also company directors and rs who a carry out innovative functions any directors and managers ctually carry out ini ive function — Schumpeter eurship means grabbing the opportunity, converting idea risk in the hope of earning profits. tor service that doesn't exist yet. You have the idea, You gather resources, build a team, and turn your be said that Entrepren' with the estimated ra product Entrepreneurship isn't just “Entrepreneurship is ivi i preneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintai , maintain or aggrandize profit by production or distribution of economic goods and services.” — AH. Cole2 eee introduction {I 5 ~ _ WW Who Is An Entrepreneur? ureprencur is defined as an agent of eh \ v an fal KREME OL change, innovator, create value etc. An Entrepreneur ts af Jcividual ith knowledge, sills, initative bncereator ol. value.elc, An Fait drive and . ving goals ei , and spirit of innovation who aims at achieving §' qn entrepreneur identifies and seises Opportunities for economic benefits. Entrepreneurs are Not just business builders; they are architects of change. ‘Their blueprints are forged in innovation, fueled by the recognition of opportunity. They wield time, effort, and skill like mortar and brick, laying the foundation for value creation, But theirs is a dynamic landscape, ever- shifting with the tides of the market, Undaunted, they navigate the risks, their reward the satisfaction of shaping ¢ world anew, “Entrepreneur is someone who has a vision for something and a want to create.” —David Karp, Tumblr Founder and CEO. “An entrepreneur is someone who jumps off a cliff and builds a plane on the way down.” —Rei Hoffman. A person who pays certain price for a product to resell it at an uncertain price thereby making decision about obtaining and using resources while assuming the risk of enterprise, according to Richard Cantillon. ‘The entrepreneur as an individual who forms an organisation for commercial purpose. He/She is proprietary capitalist, a supplier of capital and at the same time, a manager who intervenes between the labor and the consumer, according to Adam Smith. ‘The dictionary of social science has defined entrepreneur from functional viewpoint, According to it, entrepreneur is a person: 1, Who exercise the function. 2. Initiating coordinating controlling or institute major change in a business enterprise. 3. Bearing those risk of operation which arise from the dynamic nature of society and impertect knowledge of the future which can cast through transfer calculation or elimination. Entrepreneurship is the act of being an entrepreneur, which can be defined as “one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods” This may result in forming new organisations or may be part of revitalising mature organisations in fesponse to a perceived opportunity.6 Il Entre S Ul Entrepreneurship and y Venture Planning An Entrepre + Idea * Backup ne! “rts thus always considered to have ~ * Initiative * Strong future insight + Profit motive 3. Entrepreneurial History in Indian Society + In India, the entrepreneurial journey traces back to the Indus Valley Civilization during the Harappa period, roughly spanning from 3200 to 2600 BCE, also known as the Copper Age, Thic a’ demonstrated considerable mobility and trade, as evidenced by ceramic similarities with regi : like southern Turkmenistan and northern Iran, Beyond traditional activities such as agriculture and hunting, the people of the Indus Valley engaged in trade, exchanging goods like pottery, ornaments, and animals. + Intheearly years, around 1000 B.C. to 500 B.C., Indian traders played a pivotal role in re-exporting items, such as purchasing milk from China and sellirg it to Central Asia, as well as acquiring horses from West Asia and selling them to the Chinese. During the Maurya Era, considered a golden age in Indian history, extensive territories and enhanced trade capabilities were notable. The widespread use of metallic currency and diplomatic missions to regions like Sri Lanka and Southeast Asia contributed to the expansion of trade. «+ Inthe Gupta Era (400 A.D. to 600 A.D.), traders organized associations to safeguard their interests, and there was a codification of transnational business practices. The Middle Ages (700 A.D. to 1300 A.D.) witnessed significant developments, including the invention of paper and printing, as well as the construction of dams and roads that facilitated trade, particularly with Southeast Asia and Indonesia, During the Mughal era (1500 A.D, to 1600 A.D.), India held sway over global commerce, witnessing substantial inflows of gold and silver. In Mughal Era Il (1600 A.D. to 1700 A.D,), the British arrived, and among the early entrepreneurs was Virji Vora, a merchant from Surat. + In Colonial Era I (1700 A.D. to 1850 A.D.), Europe was a hotbed of technological innovation, and the influx of traders introduced novel business practices. Capitalizing on emerging opportunities, many Indians ventured into entrepreneurship. Dwarkanath Tagore played a pivotal role, forming India’s first joint venture with Carr Tagore Nanabhai Davar, who established the country’s first textile mill in 1854, albeit facing challenges in its operation. + Moving into Colonial Era IT (1850 A.D. to 1900 A.D.), significant developments included the establishment of railways in 1853, Cowasjee Nanabhai Davar's initiation of the first cotton mill in Bombay, and Sir J.N Tata founding the Jamshedpur steelworks. Key figures of the era included Ghanshyam Das Birla, Goenkas, Khaitans, Jamsetjee Jejeebhoy, and others who laid the foundations of jute mills, the pharmaceutical industry, and more. + In Colonial Era III (1900 A.D. to 1947 A.D.), trailblazers like JRD Tata, MS Oberai, and Jami Bajaj led the way for Indian entrepreneurs. Post-Independence, the emergence of industrialization saw entrepreneurs like Dhirubhai Ambani. With globalization, figures like Premji, Narayana natal Murthy, evolved and mo « Entrep that th oppor need t qualit + Impe early and inno 1.4 Fur Entrepre Entrepr- - Introduction || 7 Marthy, and Rajesh Jai ai took cer . Mer stage. Y -volved into diverse role: ‘age. Over the ; have e ¢ roles, Serving as wealth e ¢ last 68 years, Indian entrepreneurs ca more Teators, communicators, change agents, entertainers, » Entrepreneurship Present Era that the need for innovation in ¢ opportunities. To succeed, one need to tap thinking of every o quality. ee Fortune at the bottom of the pyramidi/ states iisedtocomtinnoteig ent enna explore domestic ihn ous innovation & to have continuous innovation, one prise. Innovation plays a key factor in an entrepreneurial + Importance of Innovation i . carly stage,where as exist b entrepreneurship - ‘The starter face toothache and hick ups at the ; Xisting business face different problems, limitations, management problems and constraints in he market ete. Both the cases it needs to learn many things and should be innovative for the survival in the business market 1.4 Functions Of Entrepreneurship epreneurshi activil tne atashin hal an activity performed is crucial for both Entrepreneurs and Enterprise. Entrepreneurship helps to perform various functions for Entrepreneurs, which are as follows:- « Create something innovative and better + Involvement of Risk to achieve goals + Managerial Functions Analyzing Organisational requirements Economic Growth and Development Adapting to changing Business Environment « Commercial Functions « Create something innovative and better - Entrepreneurs aren't mere cogs in the market machine; they're the engineers who redesign it. Their minds are idea factories, churning out unconventional solutions to problems both old and new. They sculpt products from clay, weave experiences from air, and breathe life into processes, all with a flair for efficiency and effectiveness. This relentless innovation isn't a mere skill; it’s their very pulse, driving them to conquer markets and rewrite the rules of the game. « Involvement of Risks to achieve goals -It is widely acknowledged that success invariably entails making sacrifices and encountering failures. Every gain achieved carries an associated opportunity cost. For entrepreneurs, failure is often a stepping stone to success, and taking risks is a fundamental aspect of their journey. The absence of risk corresponds to a lack of gain or success in the entrepreneurial realm. Entrepreneurs exhibit a readiness to undertake risks in pursuit of their desired outcomes, including the possibility of acquiring substantial loans or advances to initiate their ventures. Instances abound of individuals leaving secure employment to establish their own businesses. Women entrepreneurs, in particular, demonstrate a willingness to confront societal barriers by embracing risks. The correlation between an entrepreneur's level of risk-taking and the potential for profits is evident—greater risks often lead to greater rewards...8 IB i l\ Entrepreneurship and New Venture Planning + Managerial functions - ‘The management functions performed by entrepreneur are classified into the following five types Plan Organising | determined set of actions devised to i 15 to a pre a - ning invades forecasting today for tomorrow's ts of business. Entrepreneurs are tasked with ecute them, when they should occur, .d so forth. The significance of cient operation of a business Drecting | controlling staffing (a) Planning: in everyday language. achieve established objectives. sentially, plan activities, Its applicatio ds across all facel decisions on what tasks need to be undertaken, how to &% where the activities are located, who will carry them oul ani planning lies in its ability © guarantee the seamless and el enterprise. (b) Organising: The resources, material “The entrepreneur arranges that enables them to operate collec ‘on of an entrepreneur the organizing functi neu cooperative action amon8 numerous indiv’ bring business plan to fruition. d human resource management. Thus, (c) Staffing: Staffing inv olves human resource planning and hus : staffing function of an entrepreneur includes preparing inventory of personnel available, requirement of personnel, sources ‘of manpower recruitment, their selection, remuneration, training and development and periodic appraisal of personnel working in the enterprise. (d) Directing: Functions such as planning, organizing, and staffing serve as initial preparations for establishing a business enterprise. ‘The directing function of an entrepreneur marks the commencement of the enterprise setup. Within the directing function, the entrepreneur provides guidance, counsel, instruction, motivation, and activation to employees, ensuring efficient efforts towards achieving predetermined objectives. Therefore, the directing function of an entrepreneur en the overall manner in which they influence the actions of their employees or wor: usive step an entrepreneur takes to prompt their employees to act, following the completion of all preparatory activities.. (e) Controlling: Controlling is the last management function performed by the entrepreneur. In common parlance controlling means looking whether the activities are going on as planned. If there is any deviation between the planned results and actual results , corrective action is taken by the entrepreneur to rectify the deviation « Analyzing Organisational requiremen' A research is pre requis organization commencing business have various requirements such as assets » mobilization of resources etc. The organization also requires human capital who are equip] ‘ole of an entrepreneur involves the coordination of human and other elements to implement planned activities. the diverse CO! mponents of an enterprise in a manner edentity—theenterprise itself Consequently, shes a system for purposeful, cohesive, and ‘oint and organized effort to organizational re Js, machinery, finances, and structures tively asa unifil establ iduals engaged in @ j compasse: ‘cers, It represents the conch te for setting up a venture. An source of finance, ped with skills and talent. . Heogan growth and development: Entrepreneurship is the process which adds utility t0 4 product. An entrepreneur converts his ideas into profit & also leads to expansion of output in the|9 . ; Introduction economy whi ch in turn impacts the national ational income ro increased demand which in tar of a nation, Increased national income leads nimpac nI ie Pacts employment of a nation. Thus ,an entrepreneur plays 7 ene @ nation + Adapting to changing business environment: Ir operates in a turbulent envin lyst Be iy himself updated with v: ion ronment An entrepreneur acts as an catalyst of change and keeps a amendments in laws & regulation etc, Thus, an entrepreneur while Jesigning business plans st designing s should consi environment. ider the external forces resulting from flexibility of business avital ole in economic uplifimen A business does not operate in a static environment Commercial functions — ) Production/M: ing: fa re pperation ene aning Onc the enterprise has gathered all the necessary resources to be industry type Production rete hi sans manufacturing goods / services depending on the design & layout, products to be in Ives many crucial decisions e.g. selection of factory site, : , produced / services to be rendered , research & development ete. Te ee Aten ako needs to plan about the ancillary activities such as ~ production planning & " " pair, purchasing, storage and keeping and material handling. A proper planning about ancillary activities helps an entrepreneur to enjoy internal economies of scale. (b) Marketing: Production activities are basically undertaken for marketing. Marketing is that business activity that directs flow of goods & services from the producers to final consumers or users. In this function entrepreneur is responsible for deciding the channel of distribution to be used for marketing the goods to consumers, selection of intermediaries for distributing goods etc. Its important not to confuse marketing is selling. Marketing involves much more than just selling. selling is just the last step in marketing process. The examples of marketing activities are market or consumer research, product pl development, standardization, packaging, pricing, storage, promotional activities, distribution channel, etc. The success of marketing function is linked with an appropriate ‘marketing mix’ Traditionally, marketing mix referred to 4 Ps, namely, product, price, promotion, and physical distribution, Oflate, 3 more Ps namely, packaging, people, and process are also added to ‘marketing mix. (c] Accounting: earning profit & acc This requires keeping a proper reco anning and uumulating wealth is the primary objective of a business venture. ds of business transactions and keeping an eye on its cash flow Thus an entrepreneur is liable to maintain an healthy accounting environment within the business to maintain proper records of business transactions e.g, recording consumption of stock , amount of cash sales , debtors outstanding , money owed to creditors etc. Summary Entrepreneurship- Entreprene' verting idea into reality urship means grabbing the opportunity, com starting a business, with the estimated risk in the hope of earning profits. hua! with knowledge, skills, initiative, drive and spirit of innovation who dd seizes opportunities for economic benefits. Entrepreneur- is an indi aims at achieving goals. An entrepreneur identifies anIS 10 || Entrepreneurship and Net Relevance of Entrepreneurship in Indian Society- siness creation + Entrepreneurship leads to ba es creation leads to value addition + Busine: + Value addition leads to job creation + Job creation leads to consumption + Consumption drives entrepreneurship Entrepreneurial Evolution method of trading in India was changed by European investment. ntrepreneurship came i hasized on i + In 17th century s «= After 1850 manufacturing & into existence. « In 1905, the ‘Swadeshi’ movement emp ndigencnous goods formed an important face, of nationalism. ‘Technical skills and insufficient capital d there has been considerable growth of Entrepreneurship d the stream of Entrepreneurship. . | resources made a hurdle in the growth of Entrepreneurship in Pre- Independence. In the post-Independence perio with diverse backgrounds have joine + Now People Functions of Entrepreneurship gine: Generate fresh ideas and turn them into reality. + Innovation En, « Risk Takers: Embrace uncertainty and chase big rewards. + Master Managers: Plan, organize, and lead the way. « Company Analysts: Know your resources and needs inside out. « Economic Boosters: Drive growth, create jobs, and fuel progress. Navigate change and stay ahead of the curve. + Adaptation Champions: « Production Powerhouse: Craft products and services that deliver. + Marketing Mavens: Reach the right people and tell your story. + Money Masters: Keep track of every penny and make it count. CASE STUDY Silicon Valley, USA Overview: Silicon Vall Sa Fi tn ¢ alley, located in California, is a global hub for technology and innovation. Its success is often attributed to re ai . ‘obust entrepreneurship development, creating an ecosystem that has produced some of the world’s most suce, orld’s most successful and influential companies.Key Aspects: Economic Growth: Silicon V, United States. The establish: have contributed significantly alley has been a driving force behind the economic growth of the ent and growth of tech giants such as Apple, Google, and Facebook " to the nation’s GDP. Innovation and Technological Advancements: The region is synonymous with cutting-edge technology. Entrepreneurship in Silicon Valley has led to the development of revolutionary products and services, shaping the course of global technological advancements. « Job Creation: Silicon Valley has been a prolific job creator, attracting talent from around the world. ‘The entrepreneurial ecosystem has generated employment opportunities across various sectors, including software development, hardware manufacturing, and venture capital. Venture Capital and Funding: The availability of venture capital is a crucial factor in Silicon Valley's success. The region has a well-established network of venture capitalists willing to invest in innovative and high-potential startups, fucling their growth, Cultural Impact: Silicon Valley has cultivated a culture that celebrates risk-taking, experimentation, and learning from failure. This culture has permeated the global business landscape, influencing entrepreneurial mindsets worldwide, Diversity of Industries: The entrepreneurial ecosystem in Silicon Valley is not limited to a single industry. It spans technology, biotechnology, finance, and more, showcasing the importance of diversification for sustained economic success, Conclusion: Silicon Valley exemplifies the transformative impact of entrepreneurship development on regional and national economies. The case demonstrates the critical role played by a well-nurtured entrepreneurial ecosystem in driving economic growth, technological innovation, and global competitiveness. Silicon Valley serves as a model for nations seeking to leverage entrepreneurship for comprehensive economic developmentnture Planning 12 |l_ Entrepreneurship and N Flipkart - Revolutionizing E-commerce in India Overview: Flipkart, founded in 2007 by success in contemporary Ind significantly to India’s economic growth v1 ica paradigmaticexample of entrepreneyr vithe e-commerce landscape, contributi, 4 pniz! achin Bansal and Binny Bar The company revel! ted Flipkart with the vision of making books easily Key Aspects: Binny Bansal star' platforms. This vision later expanded to include a Founding Vision: Sachin and accessible to Indian consumers through online n disrupting traditional retail models. The wide range of products. E-commerce Disruption: Flipkart played a pivotal rolei introduction of online shopping. cash-on-delivery, and easy return policies transformed consumer behavior and expectations. « Innovative Business Models: Flipkart introduced innovative business models, such as the ‘Big Billion Days’ sale, which became a Jandmark event in the Indian e-commerce calendar. These strategies contributed to the company’s rapid growth. Technology Integration: Leveraging technology, and logistics system. The company embraced mobile commerce ear! Flipkart created a user-friendly platform ly, catering to the growing smartphone user base in India. Job Creation and Skill Development: Flipkart’s success has led to significant job creation, not only within the company but also in associated sectors like logistics and technology. The company has played a role in skill development and training for e-commerce-related jobs. ally acquired other companies, such as Myntra his diversification showcased Acquisitions and Diversification: Flipkart strategic: and PhonePe, expanding its reach into fashion and digital payments. 1 adaptability to market trends.> SS ion || 13 TT Introducti ee mtrodtuction = Impact: cjipkart’s success is emblematic ¢ ean It contributed to the a she transformative impact entrepreneurship can have on a nati n cent aed the potecdal ont foot a the e-commerce sector, increased consumer choices, and ‘ ATTUPS on the global sta; stage jon's Challenges Faced: kart navigated hast x Fie Toovercon anes Such as intense competition, regulatory changes, and logistics complexities Theat) ¢sechallenges reflects the resilienceand adaptability required for entrepreneurial success. Legacy and Future Outlook: While the Bansals exited Flipkart with its acquisition by Walmart, the legacy of Elipkart remains as a symbol of Indian entrepreneurship. The case underscores the importance of vision, innovation, and adaptability in building a successful entrepreneurial venture in Indias dynamic market. REVIEW QUESTIONS Explain the evolution of Entrepreneurship in brief. . What do you understand by the Entrepreneurship? Discuss functions of Entrepreneurship through managerial, commercial and business point of wee view. What are the core elements of Entrepreneurship? Comment on the relevance of Entrepreneurship in the Indian Scenario. goa2 Dimensions and Theories of hip ____Entreprenevrs"P ‘omes » —_—_——— Learning Oute ‘fer studying this chapter, ou should be able to understond: ship. 2.2 Entre 2.3 Traits of Entrepreneurs 2.4 Entrepreneurial Process 2.5 Determinants of Entrepreneurship e of Entrepreneurship the emergenc 7.6 Factors affecting 21 Theories of Entrepreneurship ]. Economic Theories: a) Innovation Theory (Joseph Schumpeter): Entrepreneurs, according to Schumpeter’s Innovation Theory, drive ¢ innovations This involves the creation of new products, services, or processes that disrupt existing rkets, leading to ‘creative destruction” and enhancing overall economic efficiency and competitiveness. Example + Sieve jobs with the | = teri xamples include Steve Jobs with the iPhone and Henry Ford with the assembly line Criticisms of this » economic growth by introducinga, CN ——————E———— 5 os Of Entrepreneurship |) 15 - Dimensions and T theory include its potential oy ESIBhE of co} diverse entrepreneurial contexte ‘shat ts ecUIVe innovation eflorts y across its limited applicability acros: b) Profit Motive Theory (adam Smith): adam Smith’ Profit Motive 4 : Theory pos for financial gain. ‘The ident vm sits that entrepreneurs are primarily m: the desire Jor Manel gain arket opy ies, ta ‘ — a Gompetition, ultimately contribu “pPortunities, take calculated risks, and drive innovation and ting to economic effi atin ic efliciency. Howev as cversimplification of entrepreneurial mllation, as age factors like passion and social impact. . criticisms of this theory include as entrepreneurs may also be driven by intrinsic c) Resource-Based View (Barney & Penrose): e Resource Based View . Ihe ‘SW emphasizes that entrepreneurial success hinges on a firm's possession of intelecual sooo’ These resources encompass tangible assets like technology, intangible Property, and organizational capabilities. Firms must strategically manage these esources to gain a competitive adw tio resources 10 Bain & competitive advantage. Criticisms include potential overemphasis on resources at the expense of creativity and market dynamics overemphasis on resource 2, Psychological Theories: a) Personality Trait Theory; Personality Trait Theory suggests that i ‘cn, zeal Specific traits are linked to entrepreneurial success, such as risk- taking, novation, resilience, and an internal locus of contral. Individuals with these traitsare moreinclined to pursue enlrepreneurship and navigate challenges effectively. Criticisms include oversimplification of the complex interplay of personality traits and the Potential neglect of environmental factors b) Behavioural Theory: Entrepreneurial behaviour, according to Behavioural Theory, is learned through social interaction and observation. Role models, mentors, and exposure to successful entrepreneurs influence individuals’ atlitudes and intentions toward entrepreneurship. However, criticisms include a potential downplay of individual agency and intrinsic motivations in entrepreneurial action. ¢) Motivation Theory: Motivation Theory posits that entrepreneurs are driven by a mix of intrinsicand extrinsic factors. Intrinsic motivators include autonomy, creativity, and personal growth, while extrinsic motivators encompass financial rewards and social recognition. Understanding these motivations aids in designing effective support structures for aspiring entrepreneurs. Challenges include the complexity of disentangling intrinsic and extrinsic motivators and their cultural variations. 3. Sociological Theories: a) Institutional Theory: Institutional Theory underscores the impact of social institutions and norms on entrepreneurial activity. Legal frameworks, government policies, cultural values, and educational systems shape the ee san ——<$—16 || En reprene 16 |] Enireprencurship and New Veuture Planing ee ms entrepreneurship by providing re. ° ‘SOU, jitutions can foster js on institutional determin entrept ‘preneurial landscape. Supportive inst emphasi and reduci os chall ducing risks. Criticisms include potential over lenge of isolating specific institutional impacts ST and yy, b) Social Network Theory: he cruci Social Network Theory highlights ( al role of social networks in entrepreneurship, Acco juabl al, impac Sty networks provides valuable social capit ting entrepreneurial success by facilitating eso) acquisition and market opportunites Criticisms include potential overemphasis on Pre-exign networks and a neglect of entrepreneurs ability to build new networks over time. ing anced understanding of entrepreneurship, conside, “These theories collectively contribute toa nu d sociological perspectives Ting economic, psychological, am Some of the Aditional Theorias Are as Follle he entrepreneurship theorigy Certainly! Let’ integrate the explanation and critique parts for each of t! urship as an Opportul rtunity-Driven nd exploiting opportun! and capitalizing 0” ferences, ideline the creative and innovative dimensio unique ideas in creating oppoctiniee downplay the strategic importance of ess (Stevenson & Jarillo): Process, advocated by Stevenson and Jarillo, accentuat, ities in entrepreneurial success. According to the merging market needs, whether spur r or gaps in existing markets. ‘ 1. Entreprene nity-Driven Proc Entrepreneurship as an Oppot the pivotal role of identifying @ theory, entrepreneurs excel at recognizing by technological advancements, sh ifts in consumer pre! Critics argue that this theory May inadvertently si of individual entrepreneurs: neglecting the essential role of Additionally, the emphasis on opportunity-driven processes may planning and foresight in entrepreneurial ventures proach ( ‘Sarasvathy): Sarasvathy, challenges the traditional notion of entrepreneur having predetermined goals. Instead, it suggests that entrepreneurs exhibit adaptability, making decisi s based on available resources and emerging opportunities Effectuation involves a dynamic proc sof experimentation, earning from failures, and adjusting strategies 28 needed aie proces of Critics contend that this theory might underestimate the importance of having a clear vision id pote oe planning in entrepreneurship. There is concern that the focus on effectuation may jownplay t i fi ific ki ‘, 7 iplay the significance of specific skills and knowledge essential for entrepreneurial success. 3. The Behavioural Theory of the Firm (Cyert & March): ‘The Behavi y e ehavioural Theory of the Him, develops by Cyert and March, posits that firms, including e within the bounds of rationality, Entrepreneurship, according to {sions aim for “good enough” solutions rather d routines are considered crucial in shaping 2. The Effectuation Ap The Effectuation Approach, proposed by entrepreneurial ventures, operat iis theory inves a process of satisficing, where dec! ptimal ones, Standard o| i. rating pro a entrepreneurial actions. peg, meres om Critics ar; i gue that this th entrepreneurial ea the Theory ay downplay the role of individual agency and creativity in 1g. There are concerns that the emphasis on satisficing may overstate_ a —— the limitations of rational tinder uncertainty, Dantensons and Theories Of ntropronewrsiit NT Potentially ove ally overlooking ¢ | looking entrepreneurs’ ability to make informed decisions 4, Social Learning Theory (Bandura) Social Learning Theor: Yas articuly shaping entrepreneurial behav lated by and attitudes by observing ani y Bandura, underse ‘our. This theory high serecbres the significance of social interactions 1n a ation ie interacting with en lights how individuals acquire entrepreneurial skills pa ntrepreneurial communities are s uccessful entrepreneurs. Role models, mentors, and 8 are seen as valuable so i urces of learning and motivation. Critics suggest that 'st that this th the importance of individ eory may place too much emph: imi idual creativiny and | ch emphasis on imitation, potentially overlooking concerns that the theory may not ade i j innovation in entrepreneurship. Additionally, there are : Y may ately a ° , oi ” and motivations on entrepreneurial ee diverse influence of individual personality traits The rise of entre i : ‘preneurshij atiributes and motivations to AG is shaped by a intricate interplay of elements, spanning from personal broader economic, societal, and cultural miliew. 2.2 The Entrepreneurial Mindset The success of entrepreneurial ventures hinges upon a distinct set of attributes and behaviors aptly termed the “entrepreneurial mindset” This constellation of characteristics fosters innovation, resilience, and ultimately, triumph. ‘ 1, Keen Observation and Opportunity Identification: Unlike the casual glance, the entrepreneurial gaze penetrates the surface, discerning latent needs and market gaps invisible to others. ‘This keen observation forms the bedrock of successful ventures, laying the foundation for impactful solutions and disruptive innovations. |. Embracing Uncertainty asa Catalyst: While most seck the comfort of predictability, entrepreneurs thrive in the embrace of the unknown. ‘They perceive inherent risk as the engine of progress, propelling them beyond stagnation. Uncertainty thus becomes a stepping stone, leading to groundbreaking ideas and uncharted territories 3, Adaptability in the Face of Change: Agility is t world marked by constant flux, entrep reneurs Poss readily embrace feedback, transforming perceived s! New paradigms and evolving trends are not met ith willingness to reimagine their path. 4. Taking Initiative and Charting the They are self-directed captains, firm! 1 initiative propels them forward, enabling them te forgs Bw he hallmark of the entrepreneurial spirit. In a ess the uncanny ability to pivot and adapt. They hhortcomings into catalysts for improvement. i resistance, but rather with open arms anda ‘ole of passive bystanders: wn course. ‘This delible mark on Course: Entrepreneurs reject the r ly grasping the helm and charting their 0} ar new paths and leave their in for the entrepreneurs Jy a brushstroke hin their ventures the world. of innovation will Cultivating a Culture 0 it is the very fabric of theiz existence. Th yy is not mere} f Innovation: Creal vit a culture hey foster wv18 || Entreprencurshi an challenge the stats que, Unconventiony vement, for they harbor the potential: constal y » toil tantly seeking toimprove upon existing solution® h excill approaches are not met with skepticism, bat rather with revolutionize entir ie’ e industries adblocks centre] vaeutin , troad s forthe entrepreneur les are no! sblem-solving mindse! 10 1g mindset, viewing 6, Transforming Challenges into Steppin S , ssess a P but rather stepping stones on the path to suc as he Pesce and craft ingenious solutions, Th i jectual ‘ s "each lex their intellec ove setbacks emerge stronger from each, allows therm to TISe & triumph: hurdle into 4 ne entreprene' 1 beco ‘They actively listen to feedback challenges as opportunities to fl resilience in the face of adversity struggle, and ultimately turn every ur must become a maestro of +, Prioritizing Customer Needs: To tuly sce astorer empathy, attuned to the needs and desires : mets erings to ensure satisfaction and exceed nds, and meticulously | fosters loyalty. builds trust, and propels the venture c analyze market tren entric approwcl expectations. This < towards sustainable ttaboration: Nor & Buildinga Network of Support and Col inet Nae of netorks 2 actively cutivat rings true for the entreprene 7 iano Low entrepreneurs ‘These connections provide relationships with mentors col ipo ves for synergistic growth. By leveraging the in oth eepreneuts 3 plify their ow" potential and propel their ventures to strength of eir nel " greater heights. 9. Lifelong Learnii within the entre] ustomer-< growth. nan isan island, and this adage especially provement: The thirst for knowledge is an insatiable flame ng learners, constantly seeking new information, honing try trends. This dedication to continuous improvement dscape of business. nd Continuous Im They are lifelo breast of indus ing a preneur. Kills, and staying 2! ; ee oe caiceand adaptability in the ever-evolving landscat .. By embodying these key characteristics, entrepreneurs unlock their ful potentia and pere te way for success. They Become HOE vnerely business owners, Bul agents of change, shaping the world around them with innovation, resilience, and a passionate pursuit of progress. The journey of the entrepreneur is one of continuous learning, unwavering determination, and the unwavering belief f human ingenuity to change the world. in the power 0! 23 Traits of Entrepreneurs im big and « Visionary: The ability to drea paint a picture of the impact your venture will have and rally people around it. + Passionate: A burning desire to see your idea come to life, fueled by a deep belie ‘This passion fuels your drive and resilience through challenges. + Risk-taker: The courage to step outside the comfort zone and tal failure is a possibility but not a deterrent. You understand that calculated risks al for innovation and growth. vou have, be it limited resources, tight budgets, + Resourceful: The ability to make the most of what y or unexpected challenges. You can think creatively and find solutions where others might see dead envision a future where your idea becomes reality. Youcan f in its potential. ke calculated risks, knowing that re often necessary ends.CC ES —E SES Dimensions and Thearies of Entrepreneurship || 19 + Tenacious: Persistence jy) th back from setbacks with re + Adaptable: The ability ty CHTCUMSTANCES, OF New opportunities. re fh ‘ou're + Self-motivated: The ability t “ external MoUvation. You set + People-oriented: Strong con ; inspiring teams, atideain mtn and interpersonal skillsare vital for building relationships ans With ¢ i " ‘ backgrounds and build trust Bwith others. You can elfectively cannect with people from diverse he face of adversity ficaed ity is key You d Actermination adjust and Plvot your ph and you can bounce vt give up easil Ans as needed, based on market feedback. changing ible and open to learning and adapting © take initiative and eding constant Ambitious Roals drive yourself forward without and hold yourself accountable for achieving them. + Learner: A continuous thirst for kn rapidly changing world, Yousre alw and successes. + Problem-solver: The ability to j Youcan think oi sty to identify Problems, analyze them, and develop creative solutions. the eae ju ‘cal and outside the box to ind innovative solutions. ese are just s . u aicoessfil ent Some of the Key traits that successful entrepreneurs often possess. Remember, Nowover caltiny atS Come in all shapes and sizes, and there’s no one-size-is-all formula. However cultivating these traits can give you a strong foundation for building thriving venture, owledge and a commitment to ongoing learning is crucial in a YS open to new ideas and willing to learn from your mistakes 24 Entrepreneurship Process Every subject and every method you have learned so far has some specific steps to follow or understand. From the very basics of any topic or its applied section to its advanced usage and requirements, all follow some specific stages. Entrepreneurship also follows some entrepreneurial development methodologies, and each of these terms has specific functionalities as well. Process for Entrepreneurship ‘The process of entrepreneurship can be outlined as a series of steps and approaches that entrepreneurs adhere to when launching a new business or venture, Each phase in the entrepreneurial process holds specific significance and functions that individuals must follow and pursue in order to establish a successful venture, Here is a flow diagram of the different phases of the Entrepreneurship pracess. Fn ee ee Con 1, Discovering: + Brainstorming ideas: This involves exploring potential problems to solve, needs to fulfill, and opportunities to capitalize on. Think creatively and consider different angles. + Market research: Analyze existing products and services, identify target audiences, and assess the feasibility of your ideas,- mentors, and advisors to refin 20 ||, Entrepreneurship and New Venture Plann + Idea validation: Get feedback from potemtial customer’ 8 concept and ensure it resonates with the market. 2. Developing a Business Plan: dience als, target audience, a iculate your goals, wares unique valye Define your vision and mission: | proposition. Craft a marketing strategy: Determine your offering'’s benefits. i Develop financial projections: Forecast your revenue, expenses: and potential profitability ., secure funding. Create an operational plan: Outli how you'll reach your target audience and communica ure, processes, and technology needs. ne your team struct 3. Resources: » Identify required res «Seek funding: Explore opti + Build your team: Recruit tal plan, + Acquire necessar ources: This could include equipment manpower, technology, and funding, s m % ‘ons like bootstrapping Joans, grants, oF angel investors. ented individuals with the skills and expertise needed to execute your -y assets: Secure equipment, technology, and licenses to operate your business. 4,Managing Company? / « Launch and goto market: Implement your marketing plan and begin generating sales. / « Deliver value to customers: Fulfill your promises and ensure customer satisfaction to build loyalty, + Manage day-to-day operations: Oversee finances, logistics, employee performance, and customer service. + Adapt and evolve: Mo prepared to adapt your s nitor market trends, competitor activity, and customer feedback, and be strategies as needed. 5, Harvesting: + Assess growth and performance: satisfaction to measure success. « Seek new opportunities: Explore expansion possibilities, diversi fication, or entering new markets. + Enjoy the rewards: Celebrate your achievements and recognize the fruits of your labor, whether financial, social, or personal fulfillment. Remember, this is a dynamic process, and on your specific venture. Embrace flexibility, the path to entrepreneurial success! Track key metrics like revenue, market share, and customer the order or emphasis of each stage may vary depending continuous learning, anda can-do attitude to navigate 25 Determinants of Entrepreneurship Various factors impacting the rate of entrepreneurial activities in an economy can be cl: following categories: assified into~ Dimensions and theories OF Entrepreneurship || 2 and Theories Of Entrepreneurship | 21 |. Entrepreneurial Capah:ji; abilities; © fac These factors pertain to an individual’ life, personality traits, cultural bael iw open and family influences. Elements such educ “tity ethnicity, *. initiative, and openness to cl such as age, educational quality ethnicity For instance, younger individucy: ee hans collectively shape a person’ overll personality their older counterparts ‘ypically exhibit « greater willingness to take risks compared to 2. Regulatory Framework: G, . new ventiives within creer atl play a crucial roe in influencing the development of policies. Consequently, the Indien an ‘able dusiness environments are preferred over restrictive in the global ease of doing bitsiners Aeon has been actively striving to enhance Indiais position factors such as barriers to entry for new bial s senlstory framework ofa ation is delineated Py and expansion of existing entetpiiie care administrative procedures necessary for growth 3, Market Condition: Fntrepren ba ela regulations, and labor laws.. ; high likelihood of ucreptivce ers are inspired by the presence ofa realy avalable market and 2 establishment of nev venture anew products, Vibrant markets playa crucial role in fostering the both domestic aid internan a actor such as the existing competitive landscape, accessibility to for entrepreneutship. As anil markets, and the fairness in competition act as compelling forces during its early years in Indi stration, Maruti was able to secure its position as a market leader : s 'a, benefiting from a lack of significant competition. 4, Access to Finance: Establishing a new business requires time for profit generation, as sales take time to accrue and initial receipts typically fall short of covering startup costs to break even. Hence, entrepreneurs must meticulously estimate the funds needed, identify various sources that can be tapped, and explore government schemes that support entrepreneurship across different industries in India. Notably, Steve Jobs and Steve Wozniak initiated Apple Computers by leveraging finances from the sale of a Volkswagen micro bus and a Hewlett Packard calculator. 5. Technological Development: Technological advancements occur rapidly. Researchers and technical experts worldwide are dedicated to developing improved products, delivering innovative services, and elevating customer expectations. In the global marketplace, entrepreneurs must strategically plan their actions, ensuring timely execution to capitalize on opportunities and derive benefits. 6. Interest and Vision: Success in entrepreneurship is contingent upon performance rather than the amount of time devoted to a specific endeavor. Entrepreneurs should engage in areas that genuinely interest them to sustain a strong work ethic and avoid failure. This personal interest must also evolve into a visionary perspective for the company’s growth. While the day-to-day operations may be intriguing, true success requires transforming this interest into a comprehensive vision for expansion. This vision must be compelling enough for effective communication with both investors and emloyees. Skill: While interest and vision are crucial, they cannot compensate for a complete absence of practical skills, As the leader of a company, whether managing a team or not, an entrepreneur must proficiently assume various roles. For example, if someone aims to establish a business focused on developing mobile games, they should possess specialized expertise in mobile technology, the gaming industry, game design, and skills related to mobile app marketing or programming. 8. Investment: Entrepreneurs need to make substantial investments in their companies, which may include intangible contributions such as time, skills, or reputation. Additionally, there is often a22 c =——— need for significant investments in tangible assets with clear value, whether in the form of cas) Teal estate, or intellectual property, An entrepreneur unwilling oF unable to invest in their compar, cannot anticipate external investments oF anticipate its success Organisation and Delegation: While many startups initially ‘operate as one-person ventures, the essence of successful entrepreneurship is characterized by swift and ee expansion, ‘This requires bringing on board individuals with spe! d skills. As tie } enurepreneuship calls for meticulous organization and the eflective delegation of responsi pe s: nl eprenenre need tg stay attentive to their company’ operations: but for optimal success» ey must excel in the art of choosing the right individuals for distinct roles and empowering them to execute their tasks with minimal managerial interference. 10. Riskand Rewards: Engaging in entrepr this risk is proportional to the time and money inv risk is directly tied to the potential rewards. For ins! essentially purchasing someone else’s established busines the other hand, an entreprencur pioneering innovative brea basing their venture on the assumption that a groundbreakin, While being wrong could result in significant losses, being correc! and substantial wealth. 26 Factors affecting the emergence of Entrepreneurship : the emergence of entrepren eurship: eo eneurship inherently involves taking risks, and the extent of ested in the business. It is crucial to note that this tance, an entrepreneur investing in a franchise jg 5 model, leading to a reliable income. On kthroughs places everything at stake, g idea will find success in the market thas the potential to bring sudden Here are key factors influencing 1 Individual Factors: (a) Personality Traits: robust internal locus of control (b) Motivations: Aspirations for autonomy, a impact propel individuals towards entrepreneurship. (c) Skills and Knowledge: Entrepreneurs require a diverse skill set, encompassing business acumen, leadership, marketing, communication, and problem-solving capabilities. (d) Education and Training: Formal education and training equip entrepreneurs with essential knowledge and skills for initiating and managing successful businesses. xperience in related fields offers valuable insights and competencies for Distinctive traits like risk-taking, creativity, innovation, independence, anc a are commonly linked to entrepreneurial triumph. ccomplishment, financial stability, or creating @ social (c) Experience: Previous e prospective entrepreneurs. 2. Economic Factors: (a) Economic Growth and Stability: A robust and expanding economy fosters more opportuniti entrepreneurs and enhances access to capital. (b) Market Size and Potential: ‘The size and potential ofa target market significantly impact the appeal and feasibility of entrepreneurial endeavors. es fora (c) Availability of Resoure ss es: investors, proves critical for b ns, and angel Access t 88 {0 financial re: al resources, including . business initi ing capital, loar ig) Government Policies: siness initiation and expansion. ae " : Government police ; programs, can ei - Policies, enco 7 i inion tet stimulate or hinder ee eulceinaenlgres ( ical Advan, nurial activity. cements: Tecl * reduces entry + Technological ntry barriers for entrepreneurs gical progress opens up novel market opportunities and 3, Social Factors: (a) Cultural Values and No; rms: ‘i achievement contibuteto a1 sie values that endorse innovation, risk-taking, and individual sal Ne entrepreneurial envir (b) Social Networks: Entrepre ‘ronment. information. preneurs often depend on social networks for assistance, (c) Role Models and Mentors: i inspiration and guid rs: Accomplished entrepreneurs serve as role models and mentors, offe socal S guidance to budding entrepreneurs. a St Retard oa Support and encouragement from family, friends, role i ivating individuals to pursue entrepreneurship. resources, and ring and communities play a pivotal Additional Considerations: 4, Infrastructure: ‘Access to dependable infrastructure, encompassing transportation, com essential for entrepreneurial activities. munication, and energy, proves 5-Legal and Regulatory Environment: ‘A stable and foreseeable legal and regulatory e! uncertainty and risk. nnvironment encourages entrepreneurship by minimizing 6, Access to Markets: urs require access to both do: ational markets for business growth. Entreprene mestic and intern 7. Global Competition: obalization of the economy inte ation to stay competitive. nsifies competition for entrepreneurs, necessitating The growing gh adaptability and innovs Its crucial to acknowledge that the sigt contexts and individual circumstances. Nevertheless, insights into the intricate landscape of entrepreneurshi juctuate based on specific Jements provides valuable 0 its emergence cance of these factors can fi comprehending these ¢l ipand the conditions conducive t and suce:os —__ eprencurship and New Venture Planning 24 || Fa Summary 1. Economic Theories: « Innovation Theory (Schumpeter): Entrepreneurs drive economic growth through ough disry Ptive innovations, creating new products, services, or processes. «Profit Motive Theory (Smith): Entrepreneurs are primarily motivated Py Financia gain, market opportunities and driving competition. meeehng « Re | i sours ‘Based View (Barney & Penrose): Entrepreneurial success binges on unique resoy and capabilites, lke technology intellectual property, or organizational skills me and resilience are linked t, 2. Psychological Theories: + Personality Trait Theory: Specific traits like 1! entrepreneurial success. behaviou + Behavioural Theory: Entrepreneurial observation, with role models and networks playing @ key role. insic (autonomy, creativity) and extrinsic « Motivation Theory: Entrepreneurs are driven by intr (financial rewards, social recognition) factors. isk-taking, innovation, ris learned through social interaction ang works and cultural values, ‘urship. \d opportunities, like legal frame 3. Sociological Theories: foster entreprene! + Institutional Theory: shape the entrepreneurial « Social Network Theory: Access to social impacting entrepreneurial success. Social institutions and norms, landscape. Supportive institutions can networks provides valuable resources an 4, Entrepreneurial Mindset: «Keen observation and opportunity identification « Embracing uncertainty as a catalyst « Adaptability in the face of change + Taking initiative and charting the course + Cultivating a culture of innovation « Transforming challenges into stepping stones + Prioritizing customer needs + Building a network of support an + Lifelong learning and continuous improvement d collaboration 5, Entrepreneurship Process: 1. Discovering: Brainstorming ideas, 2, Developing a Business Plan: Defining your vision, financial projections, and creating an operational plan. conducting market research, and validating your concept. crafting a marketing strategy, developingFC ————EE——=S and Theories Of Entrepreneurship || 25 3, Resources: Identify ing resources, se * Seeking funding, build: es . building your team, and a y am, and acquiring necess: assets 4, Managing Company: | y: Launching yo day operalions, and adapting to merker gees a ing to eee thts: delivering value to customers A 5 sting: Assessing growth anes. manasa th rewards Srowth and performance, seek . seeking new opportunit ies, and enjoying the 6, Determinants of Entrepreneurship: . Entrepreneurial capabilities (personality, ed « Regulatory framework (government polick , » Market conditions (competition, access) * . Access to finance (funding, investments) « Technological development (advancements) « Interest and vision (passion, goals) « Skills (expertise, abilities) « Investment (time, money, resources) + Organisation and delegation (management, teamwork) . Risk and rewards (potential gains, losses) ‘ . 7. Factors Affecting the Emergence of Entrepreneurship: « Individual factors (personality, motivations, skills) » Economic factors (growth, market size, resources) + Social factors (culture, networks, role models) . Additional considerations (infrastructure, legal envi REVIEW QUESTIONS its impact on economic growth. he Resource-Based View in entre} hip, highlighting traits and motivations. fluence on entrepreneurship. ronment, market access) ter’s Innovation Theory an preneurship. 1, Explain Joseph Schump' 2, Compare Adam smith’s Profit Motive Theory with t 3. Summarize Psychological ‘Theories of Entrepreneurs d Social Network Theories’ in! 4, Describe Institutional an! 5, Outline key attributes of the Entrepreneurial Mindset for business success. vith a real life example. 6, Highlight the Entrepreneurial Process and also co-relate it w aaaurship in Economic Entreprene Growth Learning Outcomes chopler, you shod be able to ‘understand: owth Entrepreneurship serves pivotal role in propelling econotnic growth through innovation, and entrepreneurs Driving Innovation: + Pioneering new products and set rodFC —O—=———=— _ — 27 — Entrepreneurship in Economic Gro th MS «Adopting and implementin and applying emerging tecl overall economic adv i New technologies: nologies, leading ty ancement, + Disrupting established industries: established industries, ' Ri 1 ‘acing Mreprencurs are often tralblazers in embracih seness, and cightened productivity, competitiveness, 4M! Fntrepreneurs. challenge conventional norms, disrupting NUes for new opportunities, both for themselves and others. tphone by Apples Steve Jobs and Steve Wozniak transformed Ossal industry and generating millions of jobs. and opening ave Example: The introduction ofthe smart global communication, sparw ning a col Fostering Competition: + Penetrating established market : ts: Entre businesses to innovate and enhance the « This competition results in 7 . fiti Sin reduced prices, improv service quality, ultimately benefiting consumers, ' proved product and service quality Preneurs inject new competition, compelling existing ir offerings. Example: The emergence of bud to streamli activity. Sct airlines like Ryanair and Easyjet prompted established airlines ne operations and offer Competitive prices, fostering a surge in air travel and economic Creating Jobs: + Entrepreneurs act as job creators, initiating new businesses that contribute to workforce growth. + Entrepreneurial ventures spawn job opportunities across various sectors, including technology, healthcare, and education. Example: The proliferation of the sharing economy through platforms like Uber and Airbnb has led to the creation of millions of jobs for drivers, hosts, and service providers globally. Stimulating Economic Activity: + Entrepreneurs invest personal capital and attract funding, a significant contribution to economic growth. + Their enterprises generate revenue, pay taxes, and contribute to a country’ overall economic output. Example: Success stories of tech giants such as Google and Amazon have generated substantial wealth and contributed billions in tax revenue, significantly bolstering the economic growth of the United States. Promoting Social ond Environmental Change: + Entrepreneurs often strive to make a positive impact, developing innovative solutions to social and environmental challenges. + Socially responsible businesses address issues like renewable energy, sustainable agriculture, and ble healthcare, positively impacting lives and fostering a more sustainable future.OY 28 ||_Entrepre me slp and New Venture Plarmi Example: Social enterprises like TOMS and Patagonia showease how entrepreneurs leverage the ive change: tr snomic growth as innovators. Their ingenuity, risk-taking of novel products» services, and technologies, promoting nic activity. Moreoveh entrepreneurs can contribute : tackling pressing challenges businesses to address social concerns and drive positi In essence, entrepreneursare integral to ec spirit, and innovative drive lead to the creation healthy competition, job creation, and econott positive societal and environmental changes by " | It is essential to acknowledge that the role of entrepreneurship In eeoeorn srowth may vary based on factors like economic development stage, government support, ane ape entrepreneuria| ecosystem. Nevertheless, fostering @ dynamic and innovative entrepreneurial environment remains pivotal for any nation aspiring '© achieve sustainable economic grow yth and prosperity. 3.2 Generation of Employment Opportunities ns and disruptions, playsa crucial role jy i Si tless innovatio Entrepreneurshi », the driving force behind coum up r ale Pel nt Spportorites across diverse sectors and economies. It’s not just about building enerating employme! ‘ . . bard rt purest it’s about empowering individuals, fostering economic growth, and creating a ripple vafect of prosperity Within communities. Let's delve into the multifaceted ways entrepreneurship fuels job creation: Direct Job Creation: « Startup Ecosystem: As roles, from marketing talent pool and injects «Scaling Up: As startups gail translates to increased hiring, and opening doors for new talent. ake root, they directly hire employees for various entrepreneurial ventures t n and customer service. [his creates a dynamic and finance to productior fresh energy into the job market. traction and expand, they naturally require more manpower. This providing career advancement opportunities for existing employees Indirect Job Creation: sstem; An intricate web of relationships forms around each entrepreneurial + Supply Chain and Ecosy: venture, Suppliers, logistics providers, marketing agencies, and other supporting businesses thrive alongside the growing venture, generating indirect employment opportunities. « Innovation and Spillovers: Entrepreneurial ventures often pioneer new technologies or processes ‘These innovations can spill over to other sectors creating demand for skilled professionals in related fields and stimulating further job creation. Entrepreneurial Spirit Fosters Job Creation: . Risk-Taking and Opportunity Creation: Entrepreneurs are natural risk-takers, identifying and an Zing on new opportunities. ‘This creates space for new ventures and industries to emerge, leading to diversification in the job market and additional employment avenues.> ——E——————__—_——_— \| 29 a ——__ Entrepreneurship in Economic Growth . Empowerment and Skill Development: reliance and initiative. Individuals are e starting their own businesses or free! The entrepreneurial journey fosters a culture of self egutPowered to take control of their careers potentially lanci ing, thus contributing to overall job creation. |mpoct on Different Levels: + Local Communiti ies: Local entreprene se een intacon Hes tool pode ee needs within their communities, sectors roduction, retail c i economies and reduces unemployment ‘eal and cnacion THE espe “ . Developing Economies: In ine ee alle aie poverty by canes economies, entrepreneurship plays @ crucial role in contri eile sustainable income opportuniti ters social mobility and contributes to long-term economic growth pportunities. This fosters s mobility Challenges and the Road Ahead: \While the job creation potential of entrepreneurship is undeniable, challenges remain. Unequal access to resources, limited infrastructure, and lack of entrepreneurial training can hinder its full potential. Addressing these challenges through iargeted policies, skill development programs, and fostering 2 supportive ecosystem is crucial for maximizing the employment generation potential ofent repreneurship. By nurturing a vibrant entrepreneurial landscape, we can unlock a future where innovation thrives, communities prosper, and everyone has the opportunity to build a fulfilling career. Remember, every successful entrepreneur was once a beginner with a dream. Let’s create an environment where those dreams can flourish and translate into meaningful employment opportunities for all. 43 Bringing About Social Stability and Balanced Regional Development of Industries Inan increasingly globalized world, social stability and balanced regional development pose significant challenges. However, a potent force emerges as a potential solution: entrepreneurship. By fostering a vibrant ecosystem of innovative and responsible businesses, we can unlock transformative progress across diverse communities. How Entrepreneurship Fosters Social Stability: + Job Creation: A thriving entrepreneurial landscape translates to more employment opportunities, reducing unemployment and fostering financial security. This economic stability contributes to greater social cohesion and a sense of purpose within communities. + Poverty Reduction: Entrepreneurial ventures, particularly in underserved areas, can provide income-generating opportunities for marginalized populations. This alleviates poverty, improves living standards, and empowers individuals to build better futures. + Enhanced Social Fabric: Successful entrepreneurs often become pillars of their communities, driving investment in local infrastructure, education, and healthcare. This strengthens the social fabric and increases the overall well-being of residents.