UNIT 1

PROJECT MANAGEMENT AND ENTREPRENEURSHIP

Meaning of Entrepreneurship
Entrepreneurship is the process of designing and running a new business venture for earning profits. It is a
process that brings innovation that is new ideas, products, and services in the market. Entrepreneurship is
the ability to create, manage and operate a new business and bears all of its risk with a view to earn profits.
A person who develops new business and undertakes all risks and challenges associated with it is termed as
Entrepreneur.
Entrepreneurship is defined as an act of looking for an investment and production opportunity, then
creating and managing a business venture for earning profits. It involves arranging for materials, labor,
land, and capital, bringing new techniques and product and recognizing new sources for enterprises. The risk
associated with entrepreneurship is high but at the same, it may also provide high rewards to a person starting
a venture.
Entrepreneurship results in creativity, innovation, employment opportunities and leads to the overall
economic development of the country. Entrepreneurship is of the following kinds: – Small Business
Entrepreneurship, Large Company Entrepreneurship, Scalable Startup Entrepreneurship, and Social
Entrepreneurship.

Nature of Entrepreneurship
Creation of Enterprise
Entrepreneurship is a process that refers to the creation and running of a new enterprise. It is an activity under
which a person called an entrepreneur starts a new venture using a new idea.
Economic Activity
Entrepreneurship is an economic activity as it involves creating and running a new business through optimum
utilization of all combined resources. It ensures that all scarce resources are efficiently used for deriving better
returns in the form of profit.
Innovation and Creativity
It is the process of discovering new ideas and concepts and implementing them in business ventures.
Entrepreneurship involves bringing innovation in the market by introducing new products or process that
delivers better service.
Risk Bearing
It is an activity which involves huge risk which every entrepreneur needs to undertake for starting a venture.
New ideas developed and implemented by the entrepreneur are uncertain and may result in losses.
Profit
Profit earning is the sole objective of an entrepreneur for undertaking risk. Entrepreneurs start a new venture
with a view to earning profits.
Gap Filling
Entrepreneurship is a process of recognizing and filling the gap between customer needs and available
products or services. It focuses on removing the deficiencies from the currently available products to fulfill
the needs of customers.
Organizing Function
It is an organizing function that brings together different factors of production like land, labor, and capital.
Entrepreneurship is concerned with coordinating and managing all resources engaged within the enterprise.

Characteristics of Entrepreneurship
Ability to Take Risk
Willingness to undertake risk is the most important characteristic of entrepreneurship. Starting a new
enterprise involves a lot of risk such as more chances of failure and therefore entrepreneur should properly
analyze such risk.
Visionary
Entrepreneurs should have a clear vision of his new venture for converting an idea into reality. He should
have proper planning regarding future activities for the attainment of desired results.
Open Minded
Good entrepreneurs should properly analyze all prevailing situations in the market. They should realize that
every situation can be treated as an opportunity for business. Such opportunities should be grabbed as early as
possible for the betterment of the business.
Goal Oriented
Entrepreneurship is a goal-oriented activity. Entrepreneurs create and start a new venture with the purpose of
earning profits by satisfying the needs of customers.
Flexible
Entrepreneurs should be flexible and should change according to the prevailing situations in the market.
Businessmen should consider and bring all required changes in their products or service as and when required
from time to time.
Confident and Well Informed
It is important for entrepreneurs to be confident about his ideas and abilities. He should have proper
knowledge regarding the industry and the environment. Proper understanding of all business policies will help
in taking the right decision at the right time.
Elements of Entrepreneurship
Economic and Dynamic Activity
Entrepreneurship is an economic activity as it entails the creation and operation of an enterprise with a view
of creating value or wealth by ensuring optimum utilization of scarce resources. These activities are
performed on a continuous basis in an uncertain environment; hence it is regarded as a dynamic force.
Associated To Innovation
Entrepreneurship deeply involves a search for new ideas on a continuous basis. It forces an individual to
evaluate the existing modes of business operations continuously so as to evolve and adopt the more efficient
and effective system.
Profit Potential
Profit potential is the likely level of return to the entrepreneur for captivating on the risk of developing an idea
into an actual business venture. Without profit perspectives, the efforts of entrepreneurs would remain only a
non-figurative and merely theoretical activity.
Creative and Purposeful Activity
Entrepreneurship is a creative and purposeful activity. It is a creative answer to the changing environment.
Earning profit may not be sole objective but the introduction of something creative and new is the purpose of
entrepreneurship.
Risk Bearing
The core of entrepreneurship is the “willingness to assume risk arising out of the creation and implementation
of new ideas. New ideas are always tentative and their results may not be instantaneous and positive. An
entrepreneur has to have the patience to see his effort bear fruit. In the intervening period, an entrepreneur has
to assume the risk.

Need of Entrepreneurship
The word ‘Entrepreneurship’ is very often confused with the word Entrepreneur’. They look alike but carry
different meanings. Entrepreneurship is nothing but all those activities which are to be undertaken by an
entrepreneur. The prevailing socio, political and economic activities act as a propelling force for the aspiring
personalities to become entrepreneurs. Entrepreneurship development is the outcome of the entrepreneurs. In
other words, the entrepreneurs give birth to entrepreneurship. This statement is partially true because certain
activities of the entrepreneurs are due to the existing policies and programmes of the Central as well as the
state governments and not only by the entrepreneurs themselves. Under such circumstances, it is not the
entrepreneurs who give birth to entrepreneurship. Instead, it is the existing entrepreneurship development
programmes that give birth to entrepreneurs. The emergence of entrepreneurs and the level of
entrepreneurship development are also the far reaching changes that are taking place in the social and political
activities rather than changes taking place in the economic activities. Entrepreneur cannot emerge from the
vacuum. Entrepreneurship development depends upon the environment (both external and internal) within
which the entrepreneurs have to do their business. Entrepreneurs are closely associated with the existing as
well as the past entrepreneurial activities of the society. Business opportunities are identified from the social,
political and economic crisis and in turn these crisis become the favourable climate for the entrepreneurs to
innovate new business ventures. From this perspective, it is true that entrepreneurial activities are the resultant
efforts of the prevailing entrepreneurship development programmes. On the other hand, entrepreneurs keenly
observe the society and its economic activities and try to elicit innovative business opportunities. They try to
make use of the modern technology and manufacture new products which are hitherto unknown to the market
and induce the consumers to buy them and thereby improving their standard of living. It is possible for
entrepreneurs to find new market, new product and introduce a new form of organization. Therefore, the
entrepreneurship development is due to the innovative thoughts and actions of the entrepreneurs. Thus the
term entrepreneur and entrepreneurship are different and complementary with each other.

Scope of Entrepreneurship Development

Entrepreneurship development could be made in all walks of the society and in all fields of activities. The
scope of entrepreneurship development encompasses the following:
To Identify Entrepreneurial Activities
The entrepreneurial activities ‘and opportunities could be identified by the planner of the Government. The
Government through various economic policies and programmes like ‘Globalisation’, ‘Privatisation’,
‘Liberalisation’, ‘Free Export and Import of Goods and Services’ inviting NRI’s capital introduction of
innovation in the stock market activities, and the establishment of SSI identifies entrepreneurship
opportunities. These programmes give ample opportunities for the entrepreneurship development.
 To liberalise the existing licensing policies and offer incentives and thereby attract multinational
companies of various countries to develop new industries in the backward regions.
 To encourage the researchers of entrepreneurship development to find new opportunities for the
business and industrial development.
 To identify the existing and the emerging economic, social and political crisis and find out a suitable
remedial measure to overcome the crisis.
 To offer training to the first generation entrepreneurs and encourage them to enter into new business
ventures.
 To find out the entrepreneurial activities of the neighboring countries and the international financial
institutions and other associated activities like bilateral agreements, SAARC countries Agreement, Common
Wealth Countries agreements and Non-Aligned Nations agreements and the like.
 To encourage the institutions engaged in the industrial development to find avenues for
entrepreneurship development.
The institutions informing entrepreneurial opportunities are:
The Government’s sponsored institutes, University Departments and entrepreneurship development
institutions, Voluntary organisations and research agencies, the commercial banks and Industrial
Development Institutions.
Imparting Training to Develop Entrepreneurial Talents
Entrepreneurs can be made by means of allowing them to undergo rigorous training. The level of
entrepreneurship development especially in all underdeveloped countries depends upon the extent with which
the aspiring men are given training. Through training, they can be able to improve their power of achievement
and power of affiliation. Training of this type shall be given to the young pupil even at the school level.
 The training enables entrepreneurs:
 To know as how to search the innovative business ideas.
 To know the various sources available for new business ideas.
 How to process and find out the best ideas.
 To know the various input requirements for the proposed business.
 To find out the location for the proposed business.
 To know as how to fulfill the various legal formalities.
 To know as how best to make use of the existing infrastructural facilities.
 To know the various sources of finance available for the new business venture.
 To know as how best to overcome the resistance, and
 To know as how to assess the market and future trend.
To Develop Infrastructural Facilities
Entrepreneurship development could be possible through the setting up of both social and economic
infrastructural facilities for the aspiring entrepreneurs. The following infrastructural facilities are worth
noting:
 Impart entrepreneurship education to the pupils at the school level so as to enable them to develop the
entrepreneurial talents.
 Establish a separate Department of Entrepreneurship Development or School of Entrepreneurship
Development at the College/ University level and allow the academics to’ undertake researches on
‘Entrepreneurship Development’ and its allied activities.
 Conduct the ‘Entrepreneurship Development Programmer’s through the setting up of Entrepreneurship
Training Institutions at least at the taluk level in all parts of the country.
 The State Governments shall give special attention to the entrepreneurship development programme. They
can in collaboration with the neighboring states, chalk out a programme of action for developing
entrepreneurial activities in a phased manner.
The existing financial institutions especially the commercial banks situated in rural areas shall take utmost
care in identifying the aspiring entrepreneurs and offer not only the required financial assistance but also the
required managerial techniques so as to enable them to establish new business and withstand in the market.
Institutions which are engaged in the development of small industries shall frame long range planning in
developing entrepreneurial talents. They should monitor the changing industrial and business scenarios and
determine the future course of actions to be taken to improve the entrepreneurship development.
The role of R & D institutions is not only to innovate but also to inform the entrepreneurs as how best to make
use of the innovation and apply in the manufacturing process. These institutions should act as entrepreneur
and all its activities constitute entrepreneurship.
Entrepreneurship development depends upon the existence of a stable Government so that industrialists and
business magnets could have long range planning. Foreign investors would not hesitate to go over to any
other country if there is an existence of a stable Government.
The availability of finance in time is yet another support for the entrepreneurship development. The existing
tools for the better financial management are not adequate. They could be used in the giant business concerns
only. Hence, the immediate need of the hour is to develop new tools that must be suitable for the effective
utilisation of finance in the small scale industrial units.
Identification of the effective utilisation of the available finance itself creates ground for the development of
entrepreneurial activities. The entrepreneurs could be able to mobilise funds from existing stock market arid
the market shall imbibe confidence in the minds of small investors that their investments are protected and
“’used for profitable business opportunities.
There must be an existence of the skilled labourers and experts who are able to make use of the latest
technology. Timely, adaptation of the new technology ensures entrepreneurship development, since there are
chances for making use of the new technology for alternative purposes.
Entrepreneurship could be developed through an effective communication net work. It avoids scarcity of
information and ensures equilibrium in updating the knowledge of the people of the entire globe. It enables a
uniform growth of the economy. The entire globe in these days is considered as a village owing to the fast
communication new work system.
Absence of one or more of the above said infrastructures hinder the growth of entrepreneurship development.
What is needed at present is a comprehensive planning as how best to help the young entrepreneurs to avail
these infrastructure facilities.
Ascertain the demand and Supply of Entrepreneurs
It is true that the economic growth depends upon the existence of the technical progress. The level of
technical progress in turn depends upon the existence of the entrepreneurs. In other words, the economic
growth is the resultant effect of the existing as well as future demand for and supply of entrepreneurs.
Disequilibrium between these two affects the economic growth. Excess supply of entrepreneurs over demand
leads to exploitation of natural resources beyond the required level. Of course it leads to ‘super development’.
This is one side of argument. The other side of the argument is how to measure the excess supply. If the
measure it with the help of the variable’ development’, we can say that excess supply is found in all the
industrially advanced countries. In real life, what is advanced to-day in industrially advanced countries
becomes a common phenomenon tomorrow in all other developing and less developed countries.
If such is the case, it is proved that excess supply of entrepreneurs is only an imagination and it will never
become true. In other words the demand for entrepreneur is a constant factor and is in existence for ever. The
supply of entrepreneurs could be enhanced through motivation. As propounded my Mc Clelland, any society
with generally high level of achievement will produce more real entrepreneurs who can accelerate the growth
of the economy. Max Weber suggested that entrepreneurship is the outcome of the existing social conditions
of the society. He was of the opinion that the entrepreneurs’ personality has been determined and shaped by
the existing social customs and values of the society. The living conditions of the society have been
influenced by the existing cultural and religious norms, economic status of the people, their castes and inter
group relations.
Concepts of Entrepreneurial Traits
The three prevailing concepts of entrepreneurship are:
1. Psychological Traits
Entrepreneurship development is due to the ability of the individuals’ urge to achieve something in their life.
This concept was developed by Mc Clelland. According to him individuals have psychological urge to
achieve something new. Of course the degree of urge varies from one individual to another. Those who have
high degree of urge to achieve in their life become entrepreneurs and all the activities enabling them to fulfill
their urges are called entrepreneurship.
Mc Clelland’s research results reveal that the entrepreneurship and its development are the results of a
combination of three needs of individual’s viz., Low need for achievement. High need for power and Low
need for affiliation.
2. Sociological Traits
Entrepreneurship development is also due to the sociological traits of the individuals living in a particular
place. Certain individuals would like to attain status in the society by means of setting up of a new business or
industry. However, they are allowed to act within the constraints of the cultural norms and religious moves
that are customary in the society.
3. Economic Factors
Apart from the psychological and sociological factors, entrepreneurship development is also due to the
existing economic activities of the state where the entrepreneurs live. Individuals learn from the existing
economic activities as how best to equip themselves for meeting the future challenges. They collect adequate
economic and technical information and decide as how best to introduce new business that suits to the
expectations of the Government and its revised economic policies.
Thus, the concept of entrepreneurship is very is widely changing and entrepreneurship and its development is
said to be in existence so long as the humankind are in existence and the spheres of entrepreneurship activities
are getting multiplied every now and then due to the changes that have been taken place in the liberalization,
Privatization, and Globalization (LPG) era.

7 key Qualities of Entrepreneur

Being an entrepreneur is about more than just starting a business or two, it is about having attitude and the
drive to succeed in business. All successful Entrepreneurs have a similar way of thinking and posses several
key personal qualities that make them so successful in business. Successful entrepreneurs like the ambitious
Richard Branson have an inner drive to succeed and grow their business, rather than having a Harvard
Business degree or technical knowledge in a particular field.
All successful entrepreneurs have the following qualities:
Inner Drive to Succeed
Entrepreneurs are driven to succeed and expand their business. They see the bigger picture and are often very
ambitious. Entrepreneurs set massive goals for themselves and stay committed to achieving them regardless
of the obstacles that get in the way.
Strong Belief in themselves
Successful entrepreneurs have a healthy opinion of themselves and often have a strong and assertive
personality. They are focused and determined to achieve their goals and believe completely in their ability to
achieve them. Their self optimism can often been seen by others as flamboyance or arrogance but
entrepreneurs are just too focused to spend too much time thinking about un- constructive criticism.
Search for New Ideas and Innovation
All entrepreneurs have a passionate desire to do things better and to improve their products or service. They
are constantly looking for ways to improve. They're creative, innovative and resourceful.
Openness to Change
If something is not working for them they simply change. Entrepreneurs know the importance of keeping on
top of their industry and the only way to being number one is to evolve and change with the times. They're up
to date with the latest technology or service techniques and are always ready to change if they see a new
opportunity arise.
Competitive by Nature
Successful entrepreneurs thrive on competition. The only way to reach their goals and live up to their self
imposed high standards is to compete with other successful businesses.
Highly Motivated and Energetic
Entrepreneurs are always on the move, full of energy and highly motivated. They are driven to succeed and
have an abundance of self motivation. The high standards and ambition of many entrepreneurs demand that
they have to be motivated!
Accepting of Constructive Criticism and Rejection
Innovative entrepreneurs are often at the forefront of their industry so they hear the words "it can't be done"
quite a bit. They readjust their path if the criticism is constructive and useful to their overall plan, otherwise
they will simply disregard the comments as pessimism. Also, the best entrepreneurs know that rejection and
obstacles are a part of any leading business and they deal with them appropriately.
True entrepreneurs are resourceful, passionate and driven to succeed and improve. They're pioneers and are
comfortable fighting on the frontline The great ones are ready to be laughed at and criticized in the beginning
because they can see their path ahead and are too busy working towards their dream.

Factors Influencing Entrepreneurship Development

Entrepreneurs are visionary, creative, confident, opportunity seeker, relation builder, and risktaker individuals who
decided to ditch the nine-to-five lifestyle to set up their own businesses, taking on financial risks in the hope for profit.
But what is the making of such individuals? What factors play behind the scenes to produce them? Entrepreneurship,
in fact, is a complex phenomenon influenced by the interplay of many distinct factors.
Economic Factors
The economic environment exercises the most direct and immediate influence on entrepreneurship. This is likely
because people become entrepreneurs due to necessity when there are no jobs. “In countries where the economy is
poorer, or where unemployment rates are high, citizens turn to starting their own small
businesses where they see opportunity,” Trilby Rajna of Approved Index said. Economic factors impacting
entrepreneurship include:
1. Capital
Capital is one of the most important factors, yet one of the biggest barriers when launching a new business.
Entrepreneurs require capital to start risky ventures and also require instant capital to scale up the business quickly if
the idea is found to be successful. There are however numerous ways to fund a new venture including bank loans,
crowdfunding, and bootstrapping.
2. Labor
The availability of labor impacts entrepreneurship. Nevertheless, the quality rather than the quantity of labor influences
the emergence and growth of entrepreneurship.
3. Raw Material
The necessity of raw materials consisting of natural resources hardly needs any emphasis for establishing any
industrial activity and the emergence of entrepreneurship. The absence of raw materials adversely affects the
entrepreneurial development.
Psychological Factors
They say entrepreneurship is not for the faint of heart. But then for whom is it! What does it take for an individual to
become an entrepreneur? While there isn’t a single “ideal” entrepreneurial personality, one thing remains constant: an
entrepreneurial spirit. This type of spirit entails many traits and characters that make 400 million entrepreneurs out of 7
billion people worldwide.(1)
1. Passion
Starting up a new business is not an easy task to pull off and a consistent and constant commitment to the idea and the
long hours it will require to turn it to a success is essential. Passion is the fuel of this commitment that motivates
entrepreneurs to rise early in the morning and put their blood, sweat, and tears into their business.
2. Need for Achievement
Entrepreneurs are self-starters with a need to achieve. This achievement motivation isn’t necessarily driven by the
incentives of financial gain only but also by the satisfaction gain. To add, entrepreneurs’ motivation extends to reach
their employees and partners to keep them on the same page and drive them to achieve as well.
3. Resilience
Resilience comes with the package of the entrepreneurial spirit to help entrepreneurs stay determined in the face of any
defeat they might encounter throughout the process. Failure is then a mere lesson to learn from and continue instead of
giving up.

Social Factors
Social factors can go a long way in boosting entrepreneurship. In fact, it was the highly helpful society that made the
industrial revolution a glorious success in Europe. Such factors strongly affect the entrepreneurial behavior, which
contributes to entrepreneurial growth. The main components of the social environment include:
1. Family Background
Family background including the size, type, and economic status can influence entrepreneurs and; therefore,
entrepreneurship. Nonetheless, the entrepreneurial spirit does not necessarily run in the family. According to some
sources, 51.9% of all entrepreneurs were the first to launch a business in their family.(2) Furthermore, less than 1% of
all entrepreneurs come from extremely rich or extremely poor families.
2. Education
Studies state that 95.1% of all entrepreneurs hold a bachelor degree, 47% of those have advanced in their education
and acquired masters, Ph.D. or the like.(2) This is a well enough indicator of the importance of education to the
development of entrepreneurship.
3. Social Networks
Interacting with the surrounding society and forming a reliable network is essential. Social networks facilitate access to
information and influence the quality, quantity, and speed of information reception thus help identify opportunities.

Entrepreneurial Motivation
The process of transforming an ordinary individual to a powerful businessman, who can create opportunities
and helps in maximizing wealth and economic development. It is defined as various factors stimulate desires
and activates enthusiasm in entrepreneurs which make them attain a particular goal. Entrepreneurship is the
process of identifying strengths and opportunities which help in the realization of one’s dreams for designing,
developing and running a new business by facing threats and risks effectively.
To become an entrepreneur one should identify their strengths and opportunities from the external
environment. Here motivation plays a major role in identifying their own strengths to become strong leaders
or powerful entrepreneurs which make them to accepting risks and face uncertainty for the purpose of
reaching pre-described goals.
Motivation makes entrepreneur by fulfilling higher level needs such as recognition, esteem, and self-
actualization. Various theories explained motivation as an influencing concept, it can bring out hidden talents
and creativity, and it contributes to the individual goals and society development. Maslow’s need hierarchy
theory, Hertzberg’s two-factor theory, and David MC Clelland’s acquired needs theory proved that motivation
can bring energy, enthusiasm, creativity and efficiencies in fulfilling the desired objectives.
Motivation activates innate strengths to achieve a particular goal, many questions arise during knowing this
concept such as why can’t all the human beings become leader or entrepreneurs even though they face same
motivation during his/her lifetime? Who can become effective motivators? What type of motivation can
influence one’s behavior? Is the extent of motivation decides the power of externalized behavior? Etc,
entrepreneurial motivation is a psychological process in which all the motives may not influence with the
same intensity, it varies with the perception levels of the individuals and factors responsible for the
motivation. Sometimes a single motive can influence to become strong and powerful entrepreneurs, these
motives may come from various factors as follows.
 Internal factors
 External factors
Internal factors
Need for self-actualization
It is explained by Maslow and it is the top level need refers to the desire for self-fulfillment. Need for freedom
and self-fulfillment makes the individuals or employees of the organization make them become powerful
leaders or entrepreneurs.
Optimism
Individuals having positive mindset get motivated by finding opportunities during critical situations also.
Positive attitude and perception motivate an individual to work out for the best even during unfavorable and
tough situations also.
Positive attitude
The positive attitude is the most important factor which motivates the individuals to become successful
entrepreneurs. Habituating positive attitude can lead an individual to develop constructive thinking; it
motivates them to become powerful entrepreneurs, finally, the positive attitude can prove that how valuable
they are.
Self-motivation
Most of the successful and powerful entrepreneurs are self-motivated; here they fulfill the desired objectives
by motivating themselves. Though many individuals have ideas but they cannot put those for business
development; however self-motivated people can take decisions to implement ideas.
Enthusiasm
Enthusiasm motivates in finding better solutions, finally, it stabilizes the ideas and makes them become
creators and innovators which result in successful entrepreneurs.
Commitment
Commitment towards a goal can make to achieve success. It motivates entrepreneurs by inspiring and
developing emotional attachment towards an objective.
Education
Education is the most important factor it motivates a person to innovate and create new products, this result in
establishing an organization or a new business venture. The knowledge acquired during the course of time and
innate skills highly motivates a person to become a successful entrepreneur.
Background
Family background, occupational background and a person’s own experience in a job motivates him/her to
become an entrepreneur. Having entrepreneurial background acts as a clear path to becoming a successful and
powerful entrepreneur.
Financial background
Finance is the scarce resource which motivates and enables a person to become an entrepreneur. Money can
make many things it is the major thing in deciding one’s status and development, strong financial background
facilitates to start a business.

External factors
Influence
Influence of family members, friends, and society motivates the individuals to become entrepreneurs. The
extent of influence shows an effect on the character, behavior, and development, it comes from the external
environment. Here people get influenced by seeing successful entrepreneurs or by the words of others.
Availability of resources
Resource availability motivates at a high extent to become entrepreneurs, availability of land, labor, money,
machinery, and materials make individual to start a new business. Though there is creativity, intelligence,
commitment and enthusiasm in the individuals, but the unavailability of resources becomes an obstacle for
new entrants or entrepreneurs.
Product’s demand
Higher demand for a particular product motivate entrepreneurs to produce innovative and value added
products, here product’s demand motivates the individuals to become entrepreneurs. The hope of success
makes them produce innovative products or substitute products, some entrepreneurs fulfill the market demand
by producing complementary goods also. So the increase in products demand highly motivates to become
entrepreneurs.
Government policies
Subsidies and benefits given by the government motivate entrepreneurs to produce new products or motivates
individual to become entrepreneurs. Government policies show higher influence on establishing new firms
and it leads to economic development. In the case of small scale industries, rural people are encouraged by the
various training programs, financial support, and subsidies; it is one of the main reasons for the establishment
of new firms and arrival of new entrants.
Information availability
Market knowledge and information motivate individuals to enter into the markets and to become
entrepreneurs. If there is abundant information then it automatically creates interest in the minds of
enthusiastic people to become entrepreneurs. Availability of information facilitates research and producing
innovative and value added products, and it creates a scope to become entrepreneurs.
Technological advancement
Technological advancement acts as a path to transform ideas into products, feasibility in production and
expected success rate highly motivates to become entrepreneurs. It reduces errors and cost of production and
maximizes success rate, this is the reason why people are interested in becoming entrepreneurs with the
increase in technology.
Changing tastes and preferences
Changing tastes and preferences of the customers maximizes the chance to produce substitute and
complementary goods; it creates a scope to innovation and establishment of the new ventures.

6Cs that motivate entrepreneurs to establish their own business are as follows:
Change – Entrepreneurs frequently want change, not only change, they also want to be the bearers of change.
They are solution givers and want to interrupt the status quo. They have a vision like "I want to assemble the
world's information" or "I want to put an AC at every desk" and they take an attempt to make this change. In
this attempt, some succeed and some fail.
Challenge – Some people love challenges and they opt for starting a new business as it is very challenging to
handle big problems. These people find typical job in a big corporate as boring and not challenging enough.
Creativity – Running one‘s own business is all about being more creative and having the independence to
make new discoveries. For example, testing a new website design, launching a new marketing scheme,
creating inventive items that solve a known issue in a different way, creating new advertising campaigns, etc.
One needs to have an infinite room to welcome and introduce creativity in a small business.
Control – Some people tend to start a business because they don't want to be pushed around and work for a
product/company in which they have no way to shape their destiny. They want to be their own boss having
their own time, own pace, location of their choice, employees of their choice and have a progressive role in
deciding the direction of the company.
Curiosity - Successful entrepreneurs are always anxious and ask - "what if we do X this way?‖ They want to
have more than one option to do a work and choose the best one from them. They want to understand the
customer's perceptions, point of views, markets and competitors. They are frequently anxious to see how their
particular theory like "people want to do A with B" works. In this aspect, they can‘t be differentiated from a
scientist who is trying to prove his theorem.
Cash – The last but not the least part is the cash. Money says it all. Many non-entrepreneurs have a
misconception that cash comes first for entrepreneurs but this is never really true. If this would be the case,
then there is no reason for an Ellison or Gates to keep expanding their business aggressively after they have
made more than billion dollars. However, money is not the primary motivation.
Results of Motivation:
Successful entrepreneurship needs determination, freedom, discipline, connectivity and an abundance of skills
in planning. People with a complete package of physical strength combined with perseverance, mental
strength, and self-discipline have the passion and urge to succeed.
With proper motivation, we get the following outcomes:
Heavy industrialization: Tremendous growth can be seen in industrialization. Example: Companies like
TISCO, TELCO have been set up and are flourishing.
Self-employment: A common man gets a chance to make a difference, set a new standard of industrial
growth. Example: Entrepreneurs like Dhirubhai Ambani and Azim Premji are born.
Economic growth: When there is growth in an individual‘s economy, there is a growth in the company‘s
economy, which in turn results in the growth of that particular area and country. Example: Emergence of
smart cities concept.
Creating new jobs: More entrepreneurship leads to more job openings. More job openings leads to more
employment opportunities.
Proper social benefit: When a country‘s economy grows or increases we see that more advanced and proper
social benefits are provided to the general public like construction of roads, school, hospital, colleges, etc.
McClelland's Human Motivation Theory
David McClelland's Human Motivation Theory allows you to identify people's motivating drivers. This can
then help you to give praise and feedback effectively, assign them suitable tasks, and keep them motivated.
Understanding McClelland's Theory
In the early 1940s, Abraham Maslow created his theory of needs . This identified the basic needs that human
beings have, in order of their importance: physiological needs, safety needs, and the needs for belonging, self-
esteem and "self-actualization".
Later, David McClelland built on this work in his 1961 book, "The Achieving Society." He identified three
motivators that he believed we all have: a need for achievement, a need for affiliation, and a need for power.
People will have different characteristics depending on their dominant motivator. [1]
According to McClelland, these motivators are learned (which is why this theory is sometimes called the
Learned Needs Theory).
McClelland says that, regardless of our gender, culture, or age, we all have three motivating drivers, and one
of these will be our dominant motivating driver. This dominant motivator is largely dependent on our culture
and life experiences.
These characteristics are as follows:

Dominant
Characteristics of This Person
Motivator

 Has a strong need to set and accomplish challenging goals.

 Takes calculated risks to accomplish their goals.
 Likes to receive regular feedback on their progress and achievements.
Achievement  Often likes to work alone.

 Wants to belong to the group.

 Wants to be liked, and will often go along with whatever the rest of the group wants
to do.
 Favors collaboration over competition.
Affiliation  Doesn't like high risk or uncertainty.

 Wants to control and influence others.

 Likes to win arguments.
Power  Enjoys competition and winning.
Dominant
Characteristics of This Person
Motivator

 Enjoys status and recognition.

Note:
Those with a strong power motivator are often divided into two groups: personal and institutional. People
with a personal power drive want to control others, while people with an institutional power drive like to
organize the efforts of a team to further the company's goals. As you can probably imagine, those with an
institutional power need are usually more desirable as team members!
Using the Theory
McClelland's theory can help you to identify the dominant motivators of people on your team. You can then
use this information to influence how you set goals and provide feedback, and how you motivate
and reward team members.
You can also use these motivators to craft, or design, the job around your team members, ensuring a better
fit.
Let's look at the steps for using McClelland's theory:
Step 1: Identify Drivers
Examine your team to determine which of the three motivators is dominant for each person. You can probably
identify drivers based on personality and past actions.
For instance, perhaps one of your team members always takes charge of the group when you assign a project.
They speak up in meetings to persuade people, and delegate responsibilities to others to meet the goals of the
group. They like to be in control of the final deliverables. This team member is likely primarily driven
by power.
You might have another team member who never speaks during meetings. They always agree with the group,
work hard to manage conflict when it occurs, and visibly become uncomfortable when you talk about doing
high-risk, high-reward projects. This person is likely to have a strong need for affiliation.
Step 2: Structure Your Approach
Based on the driving motivators of your workers, structure your leadership style and project assignments
around each individual team member. This will help ensure that they all stay engaged , motivated, and happy
with the work they're doing.
Examples of Using the Theory
Let's take a closer look at how to manage team members who are driven by each of McClelland's three
motivators:
Achievement
People motivated by achievement need challenging, but not impossible, projects. They thrive on overcoming
difficult problems or situations, so make sure you keep them engaged this way. People motivated by
achievement work very effectively either alone or with other high achievers.
When providing feedback, give achievers a fair and balanced appraisal. They want to know what they're
doing right – and wrong – so that they can improve.

Affiliation
People motivated by affiliation work best in a group environment, so try to integrate them with a team (versus
working alone) whenever possible. They also don't like uncertainty and risk. Therefore, when assigning
projects or tasks, save the risky ones for other people.
When providing feedback to these people, be personal. It's still important to give balanced feedback, but if
you start your appraisal by emphasizing their good working relationship and your trust in them, they'll likely
be more open to what you say. Remember that these people often don't want to stand out, so it might be best
to praise them in private rather than in front of others.
Power
Those with a high need for power work best when they're in charge. Because they enjoy competition, they do
well with goal-oriented projects or tasks. They may also be very effective in negotiations or in situations in
which another party must be convinced of an idea or goal.
When providing feedback, be direct with these team members. And keep them motivated by helping them
further their career goals

CONCEPTUAL MODEL OF ENTREPRENEURSHIP

John Kao’s Model on Entrepreneurship
John Kao thinks you need to play on the job. "When people use the word play in a business context, it sounds
kind of frivolous, but being playful is very much the source of new ideas," says Kao, author of Innovation
Nation and chairman of the global Institute for Large Scale Innovation.
John Kao has developed a conceptual model of entrepreneurship in his article: Entrepreneurship, creativity
and organisation in 1989. This model has four main aspects:
1. Entrepreneurial Personality: The overall success of a new venture largely depends upon the skill, qualities,
traits and determination of the entrepreneur.
2. Entrepreneurial Task: It is a role played by entrepreneur in an enterprise. The major task of the entrepreneur
is to recognize and exploit opportunities.
3. Entrepreneurial Environment: It involves the availability of resources, infrastructure, competitive pressures,
social values, rules and regulations, stage of technology etc.
4. Organisational Context: It is the immediate setting in which creative and entrepreneurial work takes place.
It involves the structure, rules, policies, culture, human resource system, communication system.
According to Kao, the most successful entrepreneur is one who adapts himself to the changing needs of
the environment and makes it hospitable for the growth of his business enterprise. This ECO
(Entrepreneurship, creativity ad organization) analysis frame work developed and conceptualized by John J.
Kao contributes a great deal to the emergence as well as sustenance of entrepreneurship and entrepreneurial
talent in the prevailing business environment.

Udai Pareek and Nadkarni Model of Entrepreneurship Development: Pareek and Nadakarni
have identified four sets of factors that influence development of entrepreneurship. They are the individual,
socio-cultural traditions, support systems and the environment.
1. The Individual: the individuals generate entrepreneurship in a society. They initiate, establish, maintain
and expand enterprises and make the enterprise a success.
The factors in individuals that are found to be of relevance to entrepreneurship development are:
a. Motivational Factors: they are considered to be crucial to entrepreneurship. The major elements of
motivational factors are (i) individuals need for achievement as it was found to be significantly related to
entrepreneurial success; (ii) Personal efficiency (iii) his coping capability

b. Skills: An entrepreneur needs several skills which constitute an important contributing factor to
entrepreneurship. (i) Skills in product identification and project development, (ii) management skills, i.e.,
accounting, financial control, marketing, production planning and inventory control, and (iii) enterprise
building.
c. Knowledge: knowledge in the areas of industry, technology and general economic and political
environment.
2. Socio-Cultural Factors: It is observed that individuals grow in the traditions of their families and the
society, and internalize certain values and norms from these sources. Since these values and norms get filtered
through the individual whom it seeks to influence, they have indirect influence on entrepreneurship. The
factors are (a) family expectations and pressure (b) Risk-taking (c) self-reliance (d) value to work with one’s
own hand and (e) value given to work.
3. Support system: efficient and effective support system such as financial institutions, agencies set-up for
development of entrepreneurship, nongovernmental agencies and educational institutions concerned with the
 promotion of entrepreneurship development administration in the district, contribute to a very great extent to
the success of an entrepreneur. Quite often entrepreneurs come into contact with these support systems.
4. Environment: This refers to economic and political philosophy of the government and consequential
encouragement generated and opportunities available in a society as a result of such policies. Even though
entrepreneurship is viewed here a dependent variable with all the four sets of factors influencing and
contributing to, it may be noted that the individual, the environment and support systems are considered to
influence entrepreneurship directly.

NISIET Model of Entrepreneurship Development A Conceptual model of entrepreneurship

development worked out at National Institute for small industries, extension and Training, Hyderabad,
involves various activities of organizations concerned with the task of entrepreneurship development.
These activities are conveniently grouped under three categories:
a. Stimulatory Activities
b. Support Activities
c. Sustaining Activities.

I. Stimulatory Activities: The stimulatory activities refer to all such activities that stimulate entrepreneurship
in any society. They are entrepreneurial education, planned publicity about entrepreneurial opportunities,
Identification of potential entrepreneurs in a given area, motivating them by providing economic insight and
managerial skills through training.
1. Impart entrepreneurial education
2. Make planned publicity for entrepreneurial opportunities
3. Identify potential entrepreneurs through scientific method
4. Impart motivational training to new entrepreneur
5. Help and guide in selecting products and preparing projects reports.
6. Make available techno-economic information and product profiles
7. Evolve new products and process suitable to the local situation
8. Set up local agencies with trained personnel for entrepreneurial counseling.
9. Create situation where entrepreneurs get due recognition
II. Support Activities: these activities that help the entrepreneurs in establishing and running their enterprises
are called support activities.
These includes:
1. Registration of unit.
2. Arrange finance
3. Provide, land, shed, power and water etc.,
4. Guidance for selecting and obtaining machinery
5. Supply of scarce raw material
6. Obtain licenses/import licenses
7. Provide common facilities
8. Help in getting tax relief or other subsidies.
9. Offer management consultancy
10. Help in marketing products
11. Provide information
III Sustaining Activities: Setting up of an enterprise is not enough. It should run profitably and continuously.
Sustaining activities ensures:
1. Help in modernization
2. Help in diversification /expansion/substitute production.
3. Provide additional finance for full capacity utilization
4. Arrange for deferring repayment/interest
5. Provide diagnostic industrial extension/consultancy service
6. Bring about modification/change in legislation or policy
7. Introduce and increase product services
8. Provide need-based common facilities centre.
National Institute for Small Industry Extension and Training (NISIET) It was established as an autonomous
society by the Government of India at Hyderabad in 1962. it undertakes training, research and consultancy
activities in the four related fields of small industry development, management extension and information for
development. Every year about 90 regular training programmes are offered in the relevant fields. NISIETs
courses are fully residential and participatory in nature. Foundation for massive EDP movement in the
country was Laid at this institute under the leadership of David C. McClelland in early 1960s. The experiment
was conducted in Andhra Pradesh in the town s of Kakinada and Rajmundri in East Godvari District In
1970’s the institute was one of the selected few to impart training to young engineers and technologies
Entrepreneurship Development Institute of India(EDII) Gujarat Government, State Bank of India and All
India Financial Institutions jointly established the entrepreneurship Development Institute of India at
Ahmadabad in 1983. this is an apex agency for creating the institutional infrastructure required for
entrepreneurship development. It undertakes model training programmes, trains the trainers, conduct research
and assist the state level agencies in planning, implementing and monitoring EDPs. The institute expended
resource person’s support to organize entrepreneurs trainer motivators programme in African countries. This
programme was funded by common wealth secretariat. it supports the government policy of inculcating
entrepreneurial qualities in younger generation by introducing the subject of entrepreneurship at +2level. EDII
is developing text book for 11th and 12th standards
The EDII has been entrusted with challenging task of designing and implementing a programme and Gender
Planning in entrepreneurship by the Department of personnel and training government of India.
 Distinguish Between The Terms Entrepreneur And Entrepreneurship:

BASIS FOR
ENTREPRENEUR ENTREPRENEURSHIP
COMPARISON

Meaning An entrepreneur is an Entrepreneurship is a risky activity

individual or a team of commencing a business usually
thereof, having an a start up company, offering
innovative idea, and takes distinct products and services to
every step to turn the idea the target customers, which may
into reality, while bearing or may not get success.
the risks.

What is it? Person who has an idea Process which gives shape to the
and gives shape to it. idea.

Represents An innovator, who chased A procedure through which an

the dream, till it becomes innovation is done.
true.

Business Venture He/She is the one who sets It is the activity, which an
up the business venture, to entrepreneur undertakes to set up
turn a concept into reality. the business venture.

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 differentiat 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
historicalchange.

2. 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.

3. 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
agriculturaleconomy.

4. 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.

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.
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
better technology.
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.
Classic entrepreneurs: The so-called "classic" entrepreneur is someone who observes a gap in
the market or takes note of a business or consumer need, and develops a company that addresses
the deficit or the need. In some cases, the entrepreneur may also be an inventor, although some
classic entrepreneurs will team up with someone who has invented a product. In many cases, the
classic entrepreneur starts the business and continues to own and manage it for many years.
Serial entrepreneurs: A serial entrepreneur enjoys getting businesses started, and then sells the
business to another person or company. This type of entrepreneur is typically somebody who is
excited about starting something new and taking risks. Once the business is doing well, however,
this entrepreneur wants to move on to another new and different challenge.
Social entrepreneurs: Social entrepreneurs incorporate social conscience with business. While
their businesses may still be for-profit, there is typically a strong mission statement connecting the
business with a social cause. For example, a social entrepreneur may import fair trade goods for
resale while also educating the public about the importance of activism in the area of sustainably
and responsibly sourcing products.

COMPARISON BETWEEN ENTREPRENEUR VS INTRAPRENEUR

BASIS ENTREPRENEUR INTRAPRENEUR

Meaning Entrepreneur refers to a Intrapreneurrefers to an

person who set up his own employee of the organization
business with a new idea or who is in charge of
concept. undertaking innovations in
 product, service, process etc.

Approach Intuitive Restorative

Resources Uses own resources. Use resources provided by the

company.

Capital Raised by him. Financed by the company.

Enterprise Newly established An existing one

Dependency Independent Dependent

Risk Borne by the entrepreneur Taken by the company.

himself.

Works for Creating a leading position in Change and renew the

the market. existing organizational system
and culture.

Entrepreneurial Development Programmes

There is a need to reformulate the existing entrepreneurial development programmes that suit to
the entrepreneurs of different groups. Entrepreneurs need training at regular intervals so that they
could clarify their doubts which many come at every subsequent stages of manufacturing process.
Training enable and motivate entrepreneurs to find alternative course, of action to be taken in the
event of dearth of funds, poor quality and labour deficiencies.
The objectives of training programmes must be clear and unambiguous. While selecting
entrepreneurs for training, chance must be given to a group of entrepreneurs whose status, family
and social background are uniform.
Only the enthused and self-motivated entrepreneurs shall be given chance for undergoing training.
The entrepreneurial development programmes become failure due to the wrong choice of
selection of entrepreneurs.
The entrepreneurial development programmes must be such that there must be scope for follow
up activities. In other words, the entrepreneurial development and training institutions must give
refresher courses and give an opportunity to update the knowledge of entrepreneurs.

Meaning:
As the term itself denotes, EDP is a programme meant to develop entrepreneurial abilities among
the people. In other words, it refers to inculcation, development, and polishing of entrepreneurial
skills into a person needed to establish and successfully run his / her enterprise. Thus, the concept
of entrepreneurship development programme involves equipping a person with the required skills
and knowledge needed for starting and running the enterprise.
Let us also consider a few important definitions of EDPs given by institutions and experts:
Small Industries Extension and Training Institute (SIET 1974), now National Institute of Small
Industry Extension Training (NISIET), Hyderabad defined EDP as “an attempt to develop a
person as entrepreneur through structural training.
The main purpose of such entrepreneurship development programme is to widen the base of
entrepreneurship by development achievement motivation and entrepreneurial skills among the
less privileged sections of the society.”
According to N. P. Singh (1985), “Entrepreneurship Development Programme is designed to help
an individual in strengthening his entrepreneurial motive and in acquiring skills and capabilities
necessary for playing his entrepreneurial role effectively. It is necessary to promote this
understanding of motives and their impact on entrepreneurial values and behaviour for this
purpose.” Now, we can easily define EDP as a planned effort to identify, inculcate, develop, and
polish the capabilities and skills as the prerequisites of a person to become and behave as an
entrepreneur.

Need for EDPs:

That, entrepreneurs possess certain competencies or traits. These competencies or traits are the
underlying characteristics of the entrepreneurs which result in superior performance and which
distinguish successful entrepreneurs from the unsuccessful ones.
Then, the important question arises is: where do these traits come from? Or, whether these traits
are in born in the entrepreneurs or can be induced and developed? In other words, whether the
entrepreneurs are born or made? Behavioural scientists have tried to seek answers to these
questions.
A well-known behavioural scientist David C. McClelland (1961) at Harvard University made an
interesting investigation-cum-experiment into why certain societies displayed great creative
powers at particular periods of their history? What was the cause of these creative bursts of
energy? He found that ‘the need for achievement (n’ ach factor)’ was the answer to this question.
It was the need for achievement that motivates people to work hard. According to him, money-
making was incidental. It was only a measure of achievement, not its motivation.
In order to answer the next question whether this need for achievement could be induced, he
conducted a five-year experimental study in Kakinada, i.e. one of the prosperous districts of
Andhra Pradesh in India in collaboration with Small Industries Extension and Training Institute
(SIET), Hyderabad.
This experiment is popularly known as ‘Kakinada Experiment’. Under this experiment, young
persons were selected and put through a three-month training programme and motivated to see
fresh goals.
One of the significant conclusions of the experiment was that the traditional beliefs did not seem
to inhibit an entrepreneur and that the suitable training can provide the necessary motivation to
the entrepreneurs (McClelland & Winter 1969). The achievement motivation had a positive
impact on the performance of entrepreneurs.
In fact, the ‘Kakinada Experiment’ could be treated as a precursor to the present day EDP inputs
on behavioural aspects. In a sense, ‘Kakinada Experiment’ is considered as the seed for the
Entrepreneurship Development Programmes (EDPs) in India.
The fact remains that it was the ‘Kakinada Experiment’ that made people appreciate the need for
and importance of the entrepreneurial training, now popularly known as ‘EDPs’, to induce
motivation and competence among the young prospective entrepreneurs.
Based on this, it was the Gujarat Industrial Investment Corporation (GIIC) which, for the first
time, started a three-month training programmes on entrepreneurship development. Impressed by
the results of GIIC’s this training programme, the Government of India embarked, in 1971, on a
massive programme on entrepreneurship development. Since then, there is no looking back in this
front. By now, there are some 686 all-India and State level institutions engaged in conducting
EDPs in hundreds imparting training to the candidates in thousands.
Till now, 12 State Governments have established state-level Centre for Entrepreneurship
Development (CED) or Institute of Entrepreneurship Development (lED) to develop
entrepreneurship by conducting EDPs. Today, the EDP in India has proliferated to such a
magnitude that it has emerged as a national movement. It is worth mentioning that India operates
the oldest and largest programmes for entrepreneurship development in any developing country.
The impact of India’s EDP movement is borne by the fact that the Indian model of
entrepreneurship development is being adopted by some of the developing countries of Asia and
Africa. Programmes similar to India’s EDPs are conducted in other countries also, for example,
‘Junior Achievement Programme’ based on the principle of ‘catch them young’ in USA and
‘Young Enterprises’ in the U. K.

Objectives of EDP:
The major objectives of the Entrepreneurship Development Programmes (EDPs) are to:
a. Develop and strengthen the entrepreneurial quality, i.e. motivation or need for achievement.
b. Analyse environmental set up relating to small industry and small business.
c. Select the product.
d. Formulate proposal for the product.
e. Understand the process and procedure involved in setting up a small enterprise.
f. Know the sources of help and support available for starting a small scale industry.
g. Acquire the necessary managerial skills required to run a small-scale industry.
h. Know the pros and cons in becoming an entrepreneur.
i. Appreciate the needed entrepreneurial discipline.
j. Besides, some of the other important objectives of the EDPs are to:
k. Let the entrepreneur himself / herself set or reset objectives for his / her enterprise and strive
for their realization.
l. Prepare him / her to accept the uncertainty in running a business.
m. Enable him / her to take decisions.
n. Enable to communicate clearly and effectively.
o. Develop a broad vision about the business.
p. Make him subscribe to the industrial democracy.
q. Develop passion for integrity and honesty.
r. Make him learn compliance with law.

Phases of EDP
All the EDPs mainly consist of three phases, which are illustrated as below:
1) Pre-Training Phase:
This step can be considered as the introductory phase in which the entrepreneurship development
programmes are launched. A wide spectrum of activities are performed in this phase arc described
below:
i) Identification of suitable location where the operations can be initiated like a district.
ii) Selection of an individual as a course coordinator or project leader to coordinate the EDP
activities.
iii) Organisation of basic infrastructural facilities related to the programme.
iv) Conducting the environmental scanning or industrial survey in order to look for better
business opportunities.
v) Developing various plans associated with the programme, like :
a) Promotional activities by using electronic or print media, posters, leaflets, etc.
b) Contacting business experts, different agencies, NGOs that can become a part of the
programme, directly or indirectly.
c) Printing the application forms and availing them in different locations with the instructions.
d) Establishing selection committee for screening of candidates.
e) Preparing budget and getting it approved from the management and arranging other activities
which are related to the programme.
f) Arranging and deciding the need-based elements in the syllabus of training programme and to
contact guest faculties for the training session.
vi) Looking for the assistance of various agencies such as DICs, banks, SISI, NSIC, DM and so
on.
vii) Conducting industrial motivational campaigns to increase the number of applications.
2) Training Phase:
The main function of any EDP is to impart training to future entrepreneurs and guiding them for
establishing the enterprise. The normal duration of the entrepreneurship development programme
is 4-6 weeks and it is usually a full time course. The objectives, training inputs and the centre of
focus are explained in the programme design.
Commonly, it is considered that the trainees do not have enough information about the change
because of which new programme is prepared. Each trainee should appraise himself at the
termination of the training programme to have a clear view about his/her future endeavours.

Training Phase - Programme Design

Objectives Focus Inputs

Promoting and
sustaining the skills of
entrepreneurship and
up Entrepreneur. Behavioral inputs.
building
the confidence.

Business opportunity
guidance,
information and project
planning inputs, technical
inputs. Guiding for
Helping in establishing enabling business
Enterprise establishment
the new enterprise opportunities. information
Creating enterprise.
through decision- and project planning and
making. technical opinions.
 Successful and profitable Enterprise
operation of enterprise. management, first-hand Management inputs, plant
Industrial exposure knowledge of factory visit/in-plant training
Performing profitable layout, business sites, Management suggestions
and successful etc. Information related industrial visit or training.
operations, exposure to factory layout, plant
various industrial location, organisation
knowledge. management and so on.

3) Post-Training Phase:
This phase is also referred as the phase of follow-up assistance. In this phase, the candidates who
have completed their programme successfully are provided post-training assistance. This phase is
very important as after the completion of training programme, most of the entrepreneurs face a lot
of hardship in the business plan implementation. Thus, with the help of various counselling
sessions, the training organisations try to extend their support to trainees. Members like State
Financial Corporation, commercial banks, training institutions and District Industries Centre
constituted all together to assist the entrepreneurs on the basis of mentioned goals :
 To assist trainees in a meaningful manner so that trainees can realize their business plan.
 To analyse the development made by trainees in the project implementation.
 To evaluate the post-training approach.
 To provide escort services to the trainees with the help of various promotional and financial
institutions.

Commonly, these follow-up action meetings are conducted after every three years of
training completion and the tools used for the follow-up are:
 Postal questionnaires.
 Telephonic follow-up.
 Individual contact by the trainer.
 Team meetings.
A number of government and private institutions are providing assistance in India to
entrepreneurs. Some of them are listed below:
 Small Industries Development Organisation (SIDO),
 Commercial Banks,
 National Alliance of Young Entrepreneurs (NAYE),
 National Institute for Entrepreneurship and small Business Development (NIESBUD),
 Entrepreneurship Development Institute of India (EDI),
 India Investment Centre (LIC),
 Small-scale industrial Development Bank Of India (SIDBI), and
 Technical Consultancy Organisation (TCO).

The Importance of EDP

The importance of EDP is as follows:
1) Formation of Employment Opportunities:
Entrepreneurial development programmes generate employment opportunities in the developing
and under-developed countries. It assists and encourages individuals to establish their own
business and enable them to become self-employed. By setting-up several business enterprises,
EDP also creates abundant job opportunities for other people.
2) Provides Adequate Capital:
A large amount of capital is required to set-up a business enterprise. This financial assistance is
provided by various EDP agencies. EDPs instruct the development banks such as ICICI, IDBI,
IFCI, SIDCs, etc., to take initiative in promoting entrepreneurship.
3) Proper Utilization of Local Resources:
New entrepreneurs utilize the available local resources in the most effective way. This
utilization of resources plays an important role in the development of a particular area or region at
minimum cost. EDPs .guide, educate and teach the entrepreneurs to exploit the local resources
efficiently.
4) Increased Per Capital Income:
Entrepreneurs have the ability to organise the factors of production and utilize them in the most
productive manner by establishing an enterprise. This development leads to increased production,
employment and wealth generation. As a result, overall productivity and per capital income of the
economy is raised.
5) Improved Standard of Living:
EDPs provide latest technologies and innovative methods to entrepreneurs which helps them to
produce large quantity of products at lower cost. This also enables entrepreneurs to exploit the
available resources and produce quality products. This automatically leads to improved standard
of living.
6) Economic Independence:
EDPs strengthen the entrepreneurs to produce variety of products in large quantities at
competitive prices. It also helps an entrepreneur to develop substitutes of imported products
which prevents the country from being dependent on other foreign countries. It also saves foreign
exchange of the country.
7) Preventing Industrial Slums:
Most of the developed industrial areas are facing problems related to industrial slums. This leads
to over burdening of public amenities and also affects the health of people adversely. EDPs offers
several subsidies, incentives, infrastructural support and financial grants to new entrepreneurs for
establishing their businesses, thus, preventing the growth of industrial slums.
8) Reducing Social Tension:
A majority of youngsters and educated individuals of the society are in the state of social unrest
and tension. This social tension restricts them from finding the right direction in their careers.
Most of the students feel frustrated about not getting a job after the completion of education. In
such situations, EDPs helps people by providing them proper guidance, assistance, training and
support for establishing new enterprises and businesses, As a consequence, social tension is
reduced as they generate self-employment opportunities.
9) Facilitating Overall. Development:
EDPs facilitate entrepreneurship which helps in the overall development of the society by
producing new products, innovative services, low cost consumer goods, job opportunities,
increasing the standard of living, and overall productivity. This facilitates in the overall
development of the economy and the country.