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CONCEPT OF ENTREPRENEURSHIP

CONCEPT OF ENTREPRENEURSHIP. Entrepreneurship is one of the four mainstream economics factors – land, labour, capital & entrepreneurship. Different economists have different opinion about entrepreneurship. Richard Cantillon, Frank H. Knight, J.B. Say developed the concept of entrepreneurship.

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CONCEPT OF ENTREPRENEURSHIP

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  1. CONCEPT OF ENTREPRENEURSHIP

  2. Entrepreneurship is one of the four mainstream economics factors – land, labour, capital & entrepreneurship. • Different economists have different opinion about entrepreneurship. • Richard Cantillon, Frank H. Knight, J.B. Say developed the concept of entrepreneurship. • Schumpeter considered entrepreneur is the source of dynamic change which leads to economic development. • According to Kerzner, “Entrepreneurship means alertness towards profit opportunities.

  3. “Entrepreneur precedes entrepreneurship” According to A.H.Cole, “ Entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain or organise a profit-oriented business unit for the production or distribution of economic goods & series”. Therefore entrepreneurship can be defined as the prosperity of mind to take calculated risks with confidence to achieve a pre-determined business or individual objective. Mc-Clellandidentifies two characteristics of entrepreneurship • Doing things in a new and better way. • Decision making under uncertainty.

  4. Entrepreneur • Refers to a person. • Creator. • Organiser. • Decision maker. • Initiator. • Leader. • Motivator. • Risk Taker. Entrepreneurship • Refers to a process. • Creation. • Organisation. • Decision making. • Initiative. • Leadership. • Motivation. • Risk Taking.

  5. Importance of Entrepreneurship • Intangible factor. • Moving Force. • Leads to establishment & management of Small Business enterprises & setting up these units. • Acts as a solution to the baffling problems like over population, unemployment, under employment and poverty. Leads to:- • Generation of employment. • Increasing per capita income. • Helping in capital formation. • Balanced regional development. • Promoting self reliance.

  6. HURDLES TO THE SUCCESS OF ENTREPRENEURSHIP IN INDIA • Inadequate infrastructural facilities. • Shortage of Capital. • Shortage of Technical Knowledge. • Shortage of Transport Facilities. • Absence of Cheap & Good quality Raw-Material. • Shortage of Power.

  7. FEATURES OF ENTREPRENEURSHIP • Economic Activity. Decision making about resource allocation. • Innovative Activity. Process of doing new thing i.e. introduction of new good, new method of production, new market, new source of supply of raw-material, new industry, etc. • A Function of High Achievement. Doing new things in a different and better way. Decision making under uncertainity.

  8. Creative & Purposeful Activity. The ability to bring something new into existence. • Organising function. Brings together various factors of production, ensures the continuing management & reduces risk bearing function. • Risk bearing function. Organising, coordinating, supervising, undertaking risk & handling economic uncertainty.

  9. INVENTIONS and INNOVATIONS • Inventions Creating Something New Resulting in New Knowledge. • Innovations Transferingan idea into application. Resulting in new products, services or process.

  10. THEORIES OF ENTREPRENEURSHIP • Economic Theory: 1. Versatile and multi – disciplinary. 2. Combining various factors of production. • Sociological Theory: 1. Social movement. 2. Cultural values, family ties, trust effect, entrepreneurship. • Psychological Theory: 1. Psychological theories such as those developed by McLelland pay attention to personal traits, motives and incentives of an individual and conclude that entrepreneurs have a strong need for achievement • Anthropological Theory: 1. Entrepreneurship behavior means to connect different spheres in the society.

  11. Problems in Growth of Entrepreneurship • Incompetence and Poor Management. • Involvement of High Risks. • Socio- Cultural Rigidities. • Lack of Motivation. • Lack of Infrastructural Facilities. • Lack of Communication Network. • Market Imperfection. • Legal Formalities.

  12. INTRAPRENEURSHIP • Establishment of Entrepreneurship activity in large organisations to improve Products & Services. • Intrapreneur are the employees of organisations who have something new, but does not have funds to start new business. • Don’t Presume Ownership. • No Financial Risk.

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