entrepreneurship

1. IT Entrepreneurship and
Supply chain Management
BIM VII Semester
Chapter 1: Overview of
Entrepreneurship

2. Courseware
Introduction to Entrepreneurship
Entrepreneurial Decision Process
Role of Entrepreneurship in Economic
Development
Intrapreneurship
Ethics and Social Responsibility of
Entrepreneurship
Overview

3. References
 Management Information
System
Managing the digital firm
by: Laudon & Laudon
 Management Information
System
by: James O’ Brien
Main Books
 Entrepreneurship
by: R. D. Hishrich & M. P.
Peters
 Supply Chain Management
Strategy, Planing and
Operation
by: Sunil Chopra & Peter
Meindl
Books to Follow
ITE & SCM| Prepared by BIBHOR BARAL

5. What is Entrepreneurship?

6. Who is an Entrepreneur?

7. Earliest Period
Middle Ages
17th Century
18th Century
19th & 20th Centuries
Nature & Development of Entrepreneurship

8.  Change in Present Life Style
 Desirability of New Venture Formation
 Possibility of New Venture Formation
Entrepreneurial Decision Process

9. Role of Entrepreneurship in Economic Development

10. Concept and Definitions of Entrepreneur
 the word ‘entrepreneur’- taken from French language
 means an organizer of musical or other entertainments
 defined as the director or a manager of a public musical
institution
 Early 16th century: application to military expedition
 Beginning of 18th century: used in economic aspect
 various views and ways of use of the word
 classification of views into three groups

11. Concept of Entrepreneur (contd.)
a. Risk -Bearer: early 18th century by Richard Cantillon
Richard Cantillon:
 the first person, introduced the term ‘entrepreneur’
 as a risk bearer, purchases factors of production at a
certain prices and resell it at an uncertain price
 as an agent , buys factors of production in order to
combine into a product and sell it in future
 Merchants, entrepreneurs, buy product at certain price
and sell at uncertain price
 Entrepreneurs: uncertainty bearer

12. Concept of Entrepreneur (Contd.)
b. An Organizer: developed by Jean Baptiste Say
 Jean Baptiste Say:
 associates entrepreneur with the function of coordination,
organization and supervision
 efficient and effective organization of factors of
production to operate the business
 factors of production such as land , labor and capital
 combination of land, labor and capital by entrepreneur

13. Concept of Entrepreneur (contd.)
c .As an Innovator: developed by Joseph A. Shumpeter
 Joseph A. Shumpeter:
 investigator and founders of new ideas and methods
 brings dynamic changes into the society with innovation of new
combination of production
 utilizes investigation and discovery
 the differences between an inventor and innovator
 innovator: who utilizes inventions and discoveries
 inventor: who discovers new methods and materials

14. Definitions of Entrepreneur
International labour Organization( ILO):
“Entrepreneurs are people who have the abilities to see
and evaluate business opportunities , together with the
necessary resources to take advantage of them, and to
ensure appropriate action to ensure success.”
David H. Holt:
“ An entrepreneur is a person who starts a new venture ,
taking the imitative and risk associated with it and does so
by crating something new to provide value to customers.”

15. Concept of Entrepreneurship
 various views and ways of use of Entrepreneur:
as a risk bearer
as an organizer
as an innovator
entrepreneurship is related to:
coordination, innovation and performance of the
entrepreneur
a system of creating new business
 referred to the various activities ,done for the
establishment and operation of an enterprise

16. Concept of Entrepreneurship (contd.)
Definitions:
A.H. Cole : “Entrepreneurship is the purposeful activity of
an individual or a group of associated individuals,
undertaken to initiate, maintain or aggrandize profit by
production or distribution of economic goods and
services”
Joseph A. Schumpeter : “ Entrepreneurship is based on
purposeful and systematic innovation. It included not only
the independent businessman but also company directors
and managers who actually carry out innovative
functions.”

17. Concept of Entrepreneurship (Contd.)
Entrepreneurship :
- a process, involves various actions, taken by
entrepreneur to establish enterprise
- a process of giving birth to a new enterprise
- involvement of two basic elements; innovation and
risk- bearing.
Innovation:
- does something new and different, seeking to do
something different and unique, try to meet the changing
requirements of customers

18. Concept of Entrepreneurship (Contd.)
Risk – Bearing:
- involvement of risk in new enterprise
- incurrence of profit or loss
- various factors effects the profit and loss ie.
- increasing competition
- changes in customers’ preferences
- shortage of raw materials
So, entrepreneur must be able to assume the risk involved
in the enterprise, needs to be a risk taker not an avoider, should
have ability of risk bearing .

19. Role of Entrepreneurship in economic development
Economic Development:
 increment of per capita income of country
 increment in living standard of the people of the country
 role of entrepreneurship in economic development varies
from economy of the nation
 depends on available resources, industrial climate and
political system etc.
 contribution of entrepreneurship to economic
development in different ways.

20. Role of Entrepreneurship….(contd.)
1. Capital formation:
- promotion of capital formation
- collection and mobilization of capital
- capital, prerequisite for any activities
2. Employment opportunities:
- generation of employment opportunities
- initiation of business
- reduction of the problem of unemployment
- increase income and living style of people

21. Role of Entrepreneurship…..(contd.)
3. Balanced regional development:
- reduction of regional imbalance (rural – urban
migration)
- mobility of entrepreneurs
- movement of business activities on the basis of
availability of recourses and facilities
4. Reduce concentration of economic power:
- reduction of economic power of a certain group
- reduction in exploitation of people as well as other small
entrepreneur

22. Role of Entrepreneurship…..(contd.)
5. Promote foreign trade:
- promotion of country’s export trade
- production and introduction of new product
- supports in revenue collection by exporting the
good
6. Optimum utilization of resources:
- use of available resources
- brings the resources together and use and
utilization of land , labor and capital

23. Role of Entrepreneurship…..(cont.)
7.Industrialization:
- no. of industries , running in the country
- helps to increase economic activities
- establishment of industries , consumption of variety
of goods at cheaper price, remove unemployment,
high level of income

24. Meaning of Intrapreneur
 Intrapreneur refers to corporate entrepreneur
 A person , who handles ventures based on innovation
 should be creative , visionary and flexible
 Must be able to work within the existing corporate structure and
climate
 Commitment to intraprenuership is a must
 Adoption of entrepreneurships for innovation and growth of the
firm
 salaried employees of the firm work with top level
management.

25. Intrapreneurship
- a new breed of entrepreneur
- emergence of intrapreneur from within an existing enterprise
- in organizations, top executives, encouraged to generate
new ideas and convert into products through research and
development activities
- the concept, becoming popular in developed countries like
America
- intrapreneurs : leaving their jobs and starting own enterprises
- many of the, becoming successful in their venture

26. Intrapreneurship (contd.)
Difference Entrepreneur Intrapreneur
1. Dependency independent dependent
2. Raising of raises funds funds are not raise
funds
3. Risk bears the risk doesn’t fully bear
4. Operation operates from within the
outside organization

27. The entrepreneurial decision process
 Deciding to become an entrepreneur by leaving present
activity
 Difficulty in bringing ideas to the market and create new
venture
 Formation of millions of ventures despite recession,
inflation, high interest rates, lack of infrastructure,
economic uncertainty and high probability of failure
 Entrepreneurial decision process:
entails a movement from something to something
Movement from a present lifestyle to forming a new
enterprise

28. entrepreneurial decision process (contd…..)
1. Change from present lifestyle:
 Decision to leave career or lifestyle: a great deal of
energy and courage to change and do something
new and different
 Start up business with familiar areas
 Importance of two working environment:
Research and development
Marketing
 Research and development:
 working with technology
 Development of new product ideas and processes

29. entrepreneurial decision process (contd…..)
 Change the form of company
 No acceptance of new ideas by the employees
 Marketing:
 Becoming familiar with the market
 Customers’ unfulfilled needs and want
 Start up new enterprises to fulfill the needs

30. entrepreneurial decision process (contd…..)
 Source of leaving present lifestyle to something new:
negative force-disruption
 Formation of companies: by retired, relocated due to
moving and fired from the job
 Study in major city in USA: increment of new business by 12
percent, listing in yellow pages
 Formation of business, cause of frustration from job (no
promotion)
 Formation of enterprise by individual as perception of
desirable and possible

31. entrepreneurial decision process (contd…..)
2. Desirability of New Venture Formation:
 Aspects of a situation that make it desirable to start a
new company
 Perception of starting new company as desirable from:
 Culture, subculture, family, teachers and peers
 Culture: variability in culture of places
 creating new business, value on being one’s own boss,
having individual opportunities, being success and
making money in one place
 No value of establishment of new business and making
money in other places
 Afraid of disgrace of failure

32. entrepreneurial decision process (contd…..)
Desirability of New Venture Formation (contd…..)
 Subculture: shape value systems operate within a cultural
framework
 Entrepreneurial subculture widely recognized in US i.e.
Route 128(Boston), Silicon Valley (California), North
Carolina Triangle, less known entrepreneurial centers i.e.
Los Angeles, Denver, Cleveland and Austin.
 Support and promote entrepreneurship from subculture to
form new company as one of the best occupations
 Active plan for new enterprise with supportive
environments

33. entrepreneurial decision process (contd…..)
 Desirability of New Venture Formation (contd…..)
 Variation in subculture to form business
 In Silicon Valley, caused by family traits
 Indication of the studies made in different companies
throughout the world, value of independence of fathers and
mothers
 Giving encouragement and value to company formation
 Influence and stimulation of teachers to entrepreneurship as
desirable and viable career path
 Courses in entrepreneurship and innovation develop
entrepreneurs and drive in entrepreneurial environment

34. entrepreneurial decision process (contd…)
 Desirability of New Venture Formation (contd…..)
 Peer: an entrepreneurial pool and a meeting place where
entrepreneurs and potential entrepreneurs
 Discussion on ideas, problems, solutions to spawn new
companies
 important in decision to form a company

35. entrepreneurial decision process (contd…)
 Possibility of New Venture Formation(contd……)
 Importance of education system for business knowledge
 Question: are entrepreneurs born or develop?
 Marketing: have crucial role in forming a new company
 Need of sufficient size of market
 Need of putting together total package of product, price,
distribution, and promotion for successful venture
 Role model: powerful influences in marketing company
formation
 Seeing someone else succeed, engagement in similar activity

36. entrepreneurial decision process (contd…)
 Possibility of New Venture Formation(contd……)
 Financial resources: need of financial resources
 Sources of finance: personal savings, credit, friends,
relatives
 Need of additional seed capital
 Essential role of Risk-capital availability in the
development and growth of entrepreneurial activity

37. Ethics and Social Responsibility of Entrepreneurs
 Business ethics: the study of behavior and morals in a business
situation
Need to take risks with own capital for different purposes such
as
to sell and deliver products by an entrepreneur
 expending greater energy to innovate
 Face daily stressful situation and difficulties
 Need to balance between ethical exigencies, economic
expediency and social responsibilities
 Differences at balance depends on moral stance of business
manager

38. Ethics and Social Responsibility of Entrepreneurs (contd….)
 Relation of Manager’s attitude concerning corporate
responsibilities to the organizational climate, perceived to be
supportive of laws and professional code of conduct
 New entrepreneurs with role of model develop an internal
ethical code
 Determination of ethically appropriate course of action
depends on the personal value system of their own
 Sensitive to peer pressure, social norms in the community and
from the competitors in value system
 reflection of norms and values of the communities and
countries in value system(U.S. managers-individualistic and less
communitarian values then German and Austrian)

39. Ethics and Social Responsibility of Entrepreneurs (contd….)
 Relation between concept of culture and ethics
 Ethics: Originated from Greek “ethos”, means “custom
and usage”, more originated from “swedhethos”, concern
with individual, morality and behavioral habits, identified
as essential quality
 study of whatever is right and good for humans
 The broad field of study exploring the general nature of
morals and the specific moral choices to be made by
individual in relationship with others
 Business ethics: concern with the investigation of business
practices in light of human values

40. Ethics and Social Responsibility of Entrepreneurs (contd….)
 Credit by western authors to Greek philosophers
Socrates(469-399 B.C.), Plato (427-347 B.C.), and Aristole
(384-322 B.C.)as earliest writings upon ethical concepts
 Judaism (1800 B.C.) and Hiduism (1500B.C.): findings of
earlier writings on moral codes and laws
 Classification of business ethics into four types:
1. pedagogical oriented inquiry: theory and empirical
studies
2. theory-building without empirical testing

41. Ethics and Social Responsibility of Entrepreneurs (contd….)
3. empirical research, measuring the attitudes and ethical
beliefs of students and academic faculty
4. empirical research within business environments,
measuring the attitudes and ethical views, within the large
organization

42. Questions & Discussion