Q.1 Explain the following questions in not more than 250 words each.
(A) “Intrapreneurial Environment is a necessity for faster entrepreneurial growth”.
Intrapreneurship is the practice of entrepreneurial skills and approaches by or within a company or at home. Employees, perhaps engaged in a special project within a larger firm are supposed to behave as entrepreneurs, even though they have the resources and capabilities of the larger firm to draw upon. Capturing a little of the dynamic nature of entrepreneurial management (trying things until successful, learning from failures, attempting to conserve resources, etc.) is claimed to be quite valuable in otherwise static organizations.
The term itself dates to the 1983 PhD dissertation by Burgelman and later defined in a 1985 book by Gifford Pinchot, "Intrapreneuring"; a revised edition, entitled "Intrapreneuring in Action" is currently published. The concept apparently dates back to 1976.
An Intrapreneur is the person who focuses on innovation and creativity and who transforms a dream or an idea into a profitable venture, by operating within the organizational environment. Thus, Intrapreneurs are Inside entrepreneurs who follow their founder’s example.
Intrapreneurial environment
Good Intrapreneurial environment is necessary for faster entrepreneurial growth due to following reasons:
- Intrapreneurial organizations have a climate of encouraging new ideas. As research and development is the key source of new products, such organizations often operate on the frontiers of technology. Most organizations looking after high sales volumes and growth in return on investment discourage new ideas, as they tend to hinder immediate increase in sales and ROI. However, Intrapreneurial climate supports or rather encourages new product and process ideas.
- Such organizations encourage trial and error experimentation. It is expected that any product will require sufficient amount of trial and errors. A new product is rarely a success at the first attempt and hence experimentation is encouraged and in the process failure tolerated.
- The organization should not insist on any pre-conceived initial parameters. As this inhibits creativity for developing new products or processes. Protecting various turfs in organization may frustrate the potential intrapreneurs to establish new ventures. Consider a case when a manager’s initiative for a new product is rejected on the ground that the said project falls under the preview of a different department or a subsidiary.
- The organization should be able to allocate sufficient resources to the new projects without much of red tape. The resources should not only be available for Intrapreneurial activities, but the same should be easily accessible.
(b) “Entrepreneurship can be created through proper education and training”
Ans. Training and education can develop entrepreneurship . For the same SIDBI has been supporting suitable agencies to train and guide potential entrepreneurs to set up enterprises towards this end and also to make the entrepreneurship development programmes EDPs result-oriented. These EDPs usually have following priorities:
Objective:
EDPs aim at training various target groups in entrepreneurial traits so that they obtain adequate information, motivation and guidance in setting up their own enterprise. In order to maintain a homogenous nature of participating groups, EDPs focus on rural entrepreneurs, women, SC/ST, etc.
Program Particulars
The EDPs are normally of 4-6 weeks duration coupled with proper practical training inputs. Training Agencies specializing in conducting EDPs, Non-Governmental Organizations (NGOs) and specialized technical institutes are extended assistance to conduct product specific EDPs. In an effort to attract more professional and result oriented institutions into the EDP fold, the Bank has made the scheme more performance oriented by extending reasonable support towards training cost and encouraging the institutions to earn performance fee by grounding units.
(d) “In a developing economy like India, State support for entrepreneurship developemet is highly required”.
State/ union territories have their own package of facilities and incentives for small scale. They relate to development of induatrial estates, tax subsidies, power tariff subsidies, capital investment subsidies and other support. Both the Centre and State, whether under law or otherwise, target their incentives and support packages generally to units registered with them.
1. Credit linked Capital Subsidy Scheme for Technology Up gradation: the revised scheme aims at facilitating technology up gradation by providing 15% upfront capital subsidy with effect from 29th sep 2005 to SSI units, including tiny, khadi village and coir industrial units, on institutional finance availed of by them for induction of well established and improved technologies in the specified sub-sectors/ products approved under the scheme. The revised ceiling on loan amount for availing the benefit under this scheme is Rs. 100 lakh.
2. Credit Guarantee Scheme- Collateral free loans up to a limit of Rs.25 lakhs – for individual SSIs.
3. ISO 9000/ISO 14001 certification reimbursement Scheme: Incentive scheme reimbursement of expenses for acquiring quality management system QMS ISO 9000 certification/environment management EMS ISO 14001 certification to the extent of 75% or Rs.75000 whichever is lower.
4. Participation in international fairs- full subsidy on space rent and shipment of exhibits of SSI units – for individual SSIs.
5. Purchase and price preference policy: this is administered through the single point registration scheme of NSIC. Under this, 358 items are reserved for exclusive purchase from SSI by central government. Other facilities include tender documents free of cost, exemption from earnest money and security deposit and 15% price preference in central govt. purchases.
Q. Describe various entrepreneurial qualities. Discuss the role of training institutes in the promotion of such qualities.
An entrepreneur is a person who bears risk, unites various factors of production and carries out innovation.
An entrepreneur can thus, be defined as an individual or a group of individuals who try to create something new, who organizes production and undertakes risk involved in the establishment and operation of business enterprise.
The term entrepreneur has been defined as one who detects and evaluates a new situation in his environment and directs the making of such adjustments in the economic systems, as he deems necessary. He conceives of an industrial enterprise for the purpose, displays considerable initiative, grit and determination in bringing his project to fruition, and in this process, performs one or more of the following:
- Perceives opportunities for profitable investments;
- Explores the prospects of starting such a manufacturing enterprise;
- Obtains necessary industrial licenses;
- Arranges initial capital;
- Provides personal guarantees to the financial institutions;
- Promises to meet the shortfalls in the capital
- Supplies technical know-how.
Qualities of an Entrepreneur:
- Accept challenges
- Decision making capabilities
- Risk taking
- Innovation
- Organization skills
- Skillful management
- Making the enterprise a success
Some key characteristics of an entrepreneur:
- Motivator
- Self confidence
- Long term involvement
- High energy level
- Problem solver
- Initiative
- Goal setter
The entrepreneurship development institute of India, popularly known as EDI is one such training school, a pioneer in the field, recognized world over.
The EDI has been spearheading entrepreneurship movement throughout the nation with a belief that entrepreneurs need not necessarily been born; they can be developed through well-conceived and well-directed activities.
Q. Are entrepreneurs born? Or are they taught to turn good ideas into great companies?
"There are definitely traits which I inherited," Richard Branson says with a grin in a new documentary, Lemonade Stories, about mothers' influence on entrepreneurial kids.
The film raises critical questions that experts are debating more than ever: Are entrepreneurs born? Or are they taught to turn good ideas into great companies?
Scouting answers, U.S. universities have poured $1 billion into the subject in the past 10 years. Along the way, they're upending business schooling — adding hundreds of instructors and thousands of classes on entrepreneurship.
The outcome is crucial to the U.S. economy as it struggles to claw back 2.4 million jobs lost to the recession. Entrepreneurs historically have led the nation out of hard times. Start-ups, often begun by laid-off executives, create as many as 80% of jobs. But amid the slow recovery, there are worrisome signs that entrepreneurship needs a boost.
Just 6.8% of discharged managers started companies last year — down from 9.6% in 2002. That's far below the 15% average in 1991-92 as the nation emerged from recession, the outplacement firm says. Overall, the share of workers who are self-employed, 7.4%, was up fractionally last year from 2002. But that's still below the last peak, 8.5% in 1983, when self-employment rates started sliding.
Educators want to create more entrepreneurs like Earl Graves Sr., the founder of Black Enterprise magazine, whose success landed him on DaimlerChrysler's board. Graves, 69, sold Christmas cards when he was 7 — imitating his father, who held three jobs at once.
Branson started his British empire at 17 with a high school magazine. More than 30 years later, Virgin Group employs 35,000 and has $7.9 billion in annual revenue.
Entrepreneurs like Branson are born — though skills can be taught, too, experts say.
From family, they inherit many traits key to entrepreneurship: creativity, drive, a willingness to take risks.
Male entrepreneurs are about twice as likely to be self-employed if their parents were self-employed, says Babson College Dean Patricia Greene, citing research by others. Moreover, 35% of female entrepreneurs had self-employed fathers vs. 24% of wage earners, Greene's research shows.
Arthur Blank, co-founder of Home Depot, recalls the risk his father took starting a pharmaceuticals supply business. That never-say-die spirit can't be taught, Blank, 61, says. But with education, he says, "If somebody has that potential, that kernel within ... it can be nurtured."
Book learning
So, what can be taught about entrepreneurship?
•Skills. Young ventures, unlike big existing firms, need to be organized from scratch.
That means basics like writing a business plan, deciding whether to incorporate and knowing how to get intellectual property protection. It also means learning to get financing from the most common source — friends, family and credit cards — and the least common, venture capital.
•Frequency. Students need to know that starting a company isn't as rare as they might think, so they shouldn't be afraid to try.
About one of every nine U.S. adults was involved in starting a company last year, the Ewing Marion Kauffman Foundation said in a survey of 9,195 adults. Ventures might never go further than doodles on a lunch napkin. But that's a start as "common as getting married or having a baby," says Kauffman CEO Carl Schramm.
Born and raised
•Opportunity. That means learning to recognize when you have a great idea — and when you don't. Being the 18th person to open a nail care salon in an already crowded market is a crummy idea.
That entrepreneurs can be hatched in unlikely academic fields rings true to Joe Phillips. His story underlines the fact that entrepreneurs are often born —and raised.
Phillips, 40, is a third-generation entrepreneur near Phoenix. His Italian immigrant grandfather was a grocer in Phoenix. Phillips' father dropped out of school to launch a produce pushcart business that blossomed into trucking, cold storage and vegetable wholesaling.
Joe Phillips and three siblings learned about business at the dinner table. "You couldn't go to my family's house without it being business," he says.
He graduated from the University of Arizona with degrees in finance and — more important for his entrepreneurial future — psychology. After jobs at Charles Schwab and a Wall Street start-up, he returned to Phoenix to co-found Second Look Financial in 2002. It has 18 employees.
His psychology education is crucial to helping clients at the financial services firm, he says. Money management is fraught with emotion, he says, so, "You really have to ... read them first in how they think about and act toward money."
Still, Phillips says he inherited 70% of his entrepreneurial skills. "There's something there that is innate," he says.
It's the other 30% that educators are focusing on, with help from entrepreneurs such as Howard Lester, chairman of housewares giant Williams-Sonoma in San Francisco.
Lester funded an entrepreneurship research center at the University of California, Berkeley, in 1991. He wants to arm more aspiring entrepreneurs with skills to boost their success rates.
About a third of start-ups fail in four years. "I'm sure we could do much, much better," Lester says.
Graves, the publisher, says the secret for start-up success is a pit-bull-like refusal to give up. "You have to have a junkyard-dog mentality," he says: "I am a junkyard dog!"
Q. Distinguish between MANAGER and ENTREPRENEUR.
Those people are the leading heads of every business. Here I'll try to categorize them by some specific features that are definite for each of them. One should know the main differences between the traditional manager and the common entrepreneur. And so:
Main objectives: Manager (M)-career, office, power, authority
Entrepreneur (E)- independence, possibility of own moneymaking
Orientation in time: M- short period- weekly, monthly report, account
E- evaluation and achieving 5-10% growth per year
Activity: M- overall management and supervision
E- involved directly in the business
Risk taking: M- attentively and considerably small risk
E- taking a thoughtful risk
Status: M- interested by the status symbols- like car, position, money and income.
E- no real attention the personal society status
Mistakes and collapses: M- tries avoiding mistakes and surprises
E- fights all the mistakes and downfalls
Decisions: M- according to upper levels
E- follows his dream withy decisions
In service: M- of others
E- of him, his team and his clients
Family history: M- originates often from wealthy family from big corporations
E- often specialists and scientists or farm growing families
Attitude to the others: M-hierarchy as main
E- making personal contracts with people, often in words
