UNIT 1
THE ENTREPRENEURIAL
DEVELOPMENT
PERSPECTIVE
TOPICS TO BE COVERED:
Concept of the term Entrepreneur
Evolution of the concept of Entrepreneur
Concept of the term Entrepreneurship
Entrepreneur Vs. Intrapreneur
Entrepreneur Vs. Entrepreneurship
Entrepreneur Vs. Manager
Attributes and Characteristics of a successful
Entrepreneur
ENTREPRENEUR
… takes on the risk of
starting their own
An Entrepreneur… enterprise and enjoys the
rewards.
Entrepreneur – Origin of the term
ENTREPRENDRE
(19TH C. FRENCH WORD):
means ‘somebody who undertakes’.
DEFINITION OF AN
ENTREPRENEUR
An entrepreneur is someone “who sets up a
business or businesses, taking on financial
risks in the hope of profit”.
(Oxford Dictionaries’ definition)
Entrepreneurs are people that notice
opportunities and take the initiative to
mobilize resources to make new goods and
services
An individual who undertakes the risk
associated with creating, organizing, and
owning a business
EVOLUTION THROUGH TIME….
An entrepreneur is a person who pays a
1725: Richard certain price for a product to resell it at an
uncertain price, thereby making decisions
Cantillon
about obtaining and using the resources
while consequently admitting the risk of
enterprise.
An entrepreneur is an economic agent who
unites all means of
production- land of one, the labour of
another and the capital of yet another and
1803: J.B. Say thus produces a product. By selling the
product in the market he pays rent of land,
wages to labour, interest on capital and
what remains is his profit. He shifts
economic resources out of an area of lower
and into an area of higher productivity
and greater yield.
EVOLUTION THROUGH TIME….
According to him entrepreneurs are
innovators who use a
1934:
process of shattering the status quo of the
Schumpeter existing products and services, to set up
new products, new services.
An entrepreneur is a person with a high
1961: David need for
McClleland achievement [N-Ach]. He is energetic and a
moderate risk taker
An entrepreneur searches for change,
responds to it and
1964: Peter exploits opportunities. Innovation is a
Drucker specific tool of an entrepreneur hence an
effective entrepreneur converts a source
into a resource.
EVOLUTION THROUGH TIME….
Emphasizes the role of an imitator
entrepreneur who does not
1971: Kilby innovate but imitates technologies
innovated by others. Are very important in
developing economies
Entrepreneurs take initiative, accept risk of
1975: Albert failure and
Shapero have an internal locus of control
DEFINITION OF ENTREPRENEURSHIP
Entrepreneurship can be described as a
process of action an entrepreneur undertakes
to establish his enterprise.
According to Peter Drucker: Entrepreneurship
is defined as ‘a systematic innovation, which
consists in the purposeful and organized
search for changes, and it is the systematic
analysis of the opportunities such changes
might offer for economic and social
innovation.’
DEFINITION OF ENTREPRENEURSHIP
Scott Shane (Case Western) –
“Entrepreneurship is an activity that involves
the discovery, evaluation and exploitation of
opportunities to introduce new goods and
services, ways of organizing, markets,
processes, and new materials through
organizing efforts that previously had not
existed.”
Howard Stevenson (Harvard) – “.. The pursuit
of opportunity without regard to resources
currently controlled.”
INTRAPRENEURSHIP
Intrapreneurship is Entrepreneurship
practiced by people within established
organisations
“Spotting and developing an opportunity
from within an organisation to create value
through innovation disregarding the
resources currently controlled.”
Churchill, 1992
WHO IS AN INTRAPRENEUR ?
Gifford and Elizabeth Pinchot coined the
term ‘Intrapreneur’
A person within a large corporation...
….Taking direct personal responsibility for
turning an idea into a
Profitable
Finished product
…Through
Assertiverisk taking and
Innovation
INTRAPRENEURSHIP IS RESPONSIBLE
FOR A LOT OF PRODUCT
INNOVATION AROUND THE WORLD
TODAY
At Lockheed Martin, intrapreneurs
developed a number of famous aircraft
designs and at 3M, they came up with Post-
It Notes and at Google, they came up with
Google News, AdSense and Gmail
EXAMPLES….
At LinkedIn, employees can come up with
a new idea once each quarter, put a team
together and pitch their idea to the
executive team. If their idea is approved,
they are able to spend up to three months
time dedicated to turning the idea into
something that benefits the company.
At DreamWorks, they take this a
step further by actually teaching
their employees how to formulate
their pitch and then allowing them to
practice in front of executives
DIFFERENCE BETWEEN
INTRAPRENEUR AND ENTREPRENEUR
An entrepreneur is an independent person who starts his venture and
bears full risk of his failure and enjoys the fruit of his success whereas
intrapreneur is partially independent and is sponsored by the
corporation in which he is working. He is also not liable to bear the
losses in case of his failure.
An entrepreneur raises the finance from various sources and also
guarantees their return whereas an intrapreneur does not own
responsibility to raise the capital or to return it.
An entrepreneur has no relation with any organisation whereas an
intrapreneur operates within the organisation where he is working.
ENTREPRENEUR VS. ENTREPRENEURSHIP
The term entrepreneur is used to describe men and women who
establish and manage their own business, and the process involved is
called entrepreneurship
Entrepreneurship is an abstraction whereas entrepreneurs are
tangible people
Entrepreneurship is the outcome of complex socio economic,
psychological and other factors whereas Entrepreneur is the key
individual central to entrepreneurship who makes things happen
Thus, Entrepreneur is the actor while entrepreneurship is the
act.
Entrepreneurship is the most effective way of bridging the gap between
science and the market place by creating new enterprises. An
entrepreneur is the catalyst who brings about this change
ENTREPRENEUR VS. MANAGER
An entrepreneur is involved with the start-up process while a manager
with running the business over a long period of time
An entrepreneur assumes financial, material and psychological
risks whereas a manager does not have to bear risks
An entrepreneur is driven by perception of opportunity whereas a
manager by the resources he currently possesses
An entrepreneur initiates change whereas a manager follows
rules & procedures
An entrepreneur is his own boss whereas a manager is a hired employee
An entrepreneur gets uncertain rewards whereas a manager gets
fixed rewards and salary
ATTRIBUTES OF A SUCCESSFUL
ENTREPRENEUR
Personal characteristics of successful
entrepreneurs:
Creative
Goal-oriented
Independent
Inquisitive
Persistent
Responsible
Risk taker
Self-confident/ Self belef
Leadership skill
Convincing/ Influencing skill
CHARACTERISTICS OF
SUCCESSFUL ENTREPRENEURS
Passion for the Business
The number one characteristic shared by successful
entrepreneurs is a passion for the business.
This passion typically stems from the
entrepreneur’s belief that the business will
positively influence people’s lives.
Product/Customer Focus
A second defining characteristic of successful
entrepreneurs is product/customer focus.
An entrepreneur’s keen focus on products and
customers typically stems from the fact that most
entrepreneurs are, at heart, craftspeople.
CHARACTERISTICS OF
SUCCESSFUL ENTREPRENEURS
Tenacity Despite Failure
Because entrepreneurs are typically trying
something new, the failure rate is naturally high.
A defining characteristic for successful
entrepreneurs is their ability to persevere through
setbacks and failures.
Execution Intelligence
The ability to fashion a solid business idea into a
viable business is a key characteristic of successful
entrepreneurs.
The ability to translate thought, creativity, and
imagination into action and measurable results is
the essence of execution intelligence.
CHARACTERISTICS OF
SUCCESSFUL ENTREPRENEURS
High Need for Achievement
A person’s desire either for excellence or to succeed in
competitive situations
High achievers take responsibility for attaining their
goals, set moderately difficult goals, and want
immediate feedback on their performance
Success is measured in terms of what those efforts have
accomplished
Desire for Independence
Entrepreneurs often seek independence from others
As a result, they generally aren’t motivated to perform
well in large, bureaucratic organizations
Entrepreneurs have internal drive, are confident in their
own abilities, and possess a great deal of self-respect
CHARACTERISTICS OF
SUCCESSFUL ENTREPRENEURS
Self-Confidence
Because of the high risks involved in running an
entrepreneurial organization, having an “upbeat” and
self-confident attitude is essential
A successful track record leads to improved self-
confidence and self-esteem
Self-confidence enables that person to be optimistic in
representing the firm to employees and customers alike
Self-Sacrifice
Essential
Nothing worth having is free
Success has a high price, and entrepreneurs have to be
willing to sacrifice certain things
