Entrepreneurship 2.0
Entrepreneurship 2.0
E ( Information Technology)
Eighth Semester
ENTREPRENEURSHIP
Lecture Notes
UNIT-I
Management
Meaning:
According to Follet Management is ‘the art of getting things done through people’.
According to George R.terry Management is a process consisting of planning, organizing,
actuating and controlling performed to determine and accomplish the objectives by the use of
people and resources.
There are four views of management
1) Management is a process
2) Management is a discipline
3) Management is a human activity
4) Management is a career.
Characteristics of Management
The following are the characteristics of management
1) Management is a continuous process
2) Management is an art as well as science
3) Management aims at achieving predetermined objectives
4) Management is a factor of production
5) Management is decision making
6) Universal application
7) Management is needed at all levels
8) Management aims at maximum profit
9) Dynamics
10) Management as a career
11) Management is a profession
12) Management is a discipline
Nature of Management
The nature of management can be described as follows.
1) Multidisciplinary
2) Dynamic nature of principles
3) Relative not absolute principles
4) Management - science or art
5) University of management
Management Functions
The Five Main(1-5) plus two additional (6-7) functions of management are
1) Planning
2) Organizing
3) Staffing
4) Directing
5) Controlling
6) Innovation
7) Representation
Role of Management
There are three roles of management/manager.
1) Interpersonal Role
2) Informative Role
3) Decisional Role
Levels of Management
There are three levels of management
1) Top Management
2) Middle Management
3) Lower/Supervisory
Levels of Management
Evolution of Management
Early management approaches:
Taylor’s Scientific Management
Henry Fayol’s Administrative Management
Human Relations Approach
Modern Mangement Approaches:
Behavioral Approach
Quantitative Approach
Systems Approach
Contingency Approach
UNIT-II
Planning
Meaning
According to Koontz and O Donnel “Planning is deciding in advance what to do, how to
do it, when to do it, and who is to do it”. It bridges the gap from where we are and to where we
want to go. It is in essence the exercise of foresight.
Nature of Planning
Planning: A Relational Approach
Planning: An Open System Approach
Flexibility of planning
Pervasiveness of planning
Importance of Planning
Planning is of great importance in all types of organization whether business or non-business,
private or public, small or large. Planning is important because of the following reasons.
Primacy of planning
To minimize risk and uncertainty
To focus attention on objectives
To facilitate control
To increase organizational effectiveness
Types of Planning
Corporate and functional planning
Strategic and operational planning
Long and short term planning
Proactive and reactive plans
Formal and informal planning
Types of plans
Single use plans – for non-repetitive activities
Standing plans – for repetitive activities
Steps in Planning
The steps generally involved in planning are as follows.
1) Establishing goals/objectives
2) Establishing planning premises
3) Deciding the planning period
4) Identification of alternatives
5) Evaluation and selection of alternatives
6) Developing derivative/supportive plans
7) Measuring and controlling the process
Decision Making
Decision making is an essential part of modern management; whatever a manager does he does
by making decisions.
Types of Decisions
Programmed and non-programmed decisions
Major and minor decisions
Simplex and complex decisions
Strategic and tactical or operational decisions
Individual and group decisions
The following steps are involved in the process of decision making
1) Recognizing the problems
2) Deciding priorities among the problems
3) Diagnosing the problems
4) Developing alternative solutions or courses of alternatives
5) Evaluating alternatives
6) Converting the decision into effective action and follow up action
Steps in Organizing
Organization involves the following interrelated steps.
1) Consideration of objectives
2) Identification and grouping of activities
3) Assignment of duties
4) Delegation of authority
Nature of Organization
The nature of organization can be highlighted by the following features
1) Organization is always related to certain objectives
2) An organization connotes a group of people
3) Communication is the nervous system of organization
4) Organizing is a basic function of management
5) Organization is a continuous process
6) Organization connotes a structure of relationships
7) Organization involves a network of authority and responsibility relationship.
Organization Structure
An organization structure shows the authority and responsibility relationship between the various
positions of the organization by showing who reports to whom.
Purpose of Organization
Organization is essential for the following purposes
1) To facilitate pattern of communication
2) To allocate authority and responsibility
3) To locate decision centers
4) To create proper balance
5) To stimulate creativity
6) To encourage growth
7) To make use of technological improvements
Principles of Organization
The principles of organization are
1) Objectives
2) Specialization
3) Span of control
4) Exception
5) Scalar principle
6) Unity of command
7) Delegation
8) Responsibility
9) Authority
10) Efficiency
11) Simplicity
12) Flexibility
13) Balance
14) Unity of direction
15) Personal abilities
Departmentation
The horizontal differentiation of tasks or activities into discrete segments is called as
Departmentalization or Depar mentation.
Depart mentation involves grouping of operating tasks into jobs, combining of jobs into effective
work group and combining of groups into divisions often termed as departments.
Different types
1) Depart mentation by functions
2) Depart mentation by product
3) Departmentation by customers
4) Departmentation by territory
5) Departmentation by process
Types of Organization
1) Line, military or scalar organization
2) Functional organization
3) Line and staff organization
4) Committee organization
Delegation of Authority
A manager in an enterprise cannot do all the tasks necessary for the accomplishment of group
goals. He therefore assigns some part of his work to his subordinates and grants them necessary
authority to make decisions within the area of their assigned duties. This downward pushing of
authority to make decisions is known as delegation of authority.
Various issues are
Centralization and Decentralization
Delegation vs Decentralization
Management by Objectives (MBO)
Staffing
The staffing function performs the following sub functions
1) Manpower planning
2) Recruitment
3) Selection of the best qualified from those who seeks job.
4) Training and development
5) Performance appraisal and compensation.
Nature and Importance of Staffing
The various reasons which have increased the significance of staffing functions are
1) Increasing size of organization
2) Advancement of technology
3) Long range needs of manpower
4) Recognition of human relation.
Recruitment
It is the process of identifying the sources for prospective candidates and to stimulate them to
apply for the Jobs.
It can be from
Internal sources
External sources
Selection
The process of selection leads to Employment of persons having the ability and
qualifications to perform the jobs which have fallen vacant in an organization.
The basic purpose of selection is to choose the right person for the right Job.
Principles of Directing
The following principles of directing may be useful to a manager.
1) Harmony of objectives
1) Unity of direction or command
2) Direct supervision
3) Effective communication
4) Follow through
Leadership Styles
Leadership styles are the patterns of behaviour which a leader adopts in influencing
the behaviour of his followers/subordinates.
These styles are based on
1) Behavioural approach
a) Power generation
b) Leadership as a continuum
c) Employee - production orientation
d) Likert‟s management system
e) Managerial grid
f) Tri-dimensional grid
2) Situational Approach
a) Fiedler‟s contingency model
b) Hursey and Blanchard‟s situational model
c) path-goal model
3) Motivation
a) Positive
b) Negative
4) Authority
a) Autocratic leadership
b) Democratic leadership
c) Free- reign
Motivation
Motivation is inspiring the subordinates to contribute with zeal and enthusiasm
towards organizational goals.
Performance of an employee depends on two factors, ability to work and willingness
to work.
Performance=Ability X Willingness
Motivation is enhancing the willingness to work which improves the performance.
Motivational Theories
1) Maslow‟s Need Hierarchy Theory
2) Hertz berg‟s Two factors Theory
3) Vroom‟s Expectancy Theory
4) Adam‟s Equity Theory
5) Mcclelland‟ s Need Theory
6) Carrot and stick Approach
7) Skinner‟s Reinforcement Theory.
Communication
Communication is defined as the process of Exchange of information, ideas and
opinions which bring about integration of interests aims and Efforts among the members of a
group organized for achievement of predetermined goals.
Communication Process
Communication process involves the sender, the transmission of a message through a
selected channel and the receiver as shown in Fig. below.
Feedback
Noise
Importance of Communication
The purpose of communication is to effect change, to influence action towards the
welfare of the Enterprise. It integrates managerial function.
Communication is important because of the following
1) Every aspect of Manager‟s Job involves communication.
2) Managers do not deal with „things‟but with information about things.
3) Decisions taken at top managementlevel serve no purpose unless it is successfully
communicated downwards.
4) Communication is the basis for direction and leadership.
5) Communication renders the complexity of business intelligible and workable.
6) The better the communication the more Efficient the work performance.
Channels of Communication
A channel of communication is a path through which information flows throughout
the organization.
The numerous channels used in the organization constitute its communication
network.
The channels of communication are divided into two types
1) Formal channel – the paths of communication which are deliberately created and
officially recognized connecting various positions in the organization hierarchy are
called as formal channels.
2) Informal channel- the path of communication which is not officially created is known
as informal channel.
People who know each other talk together informally about the happenings in the
organization.
Types of Communication
Based on the direction of flow of information communications are classified as
1) Downward communication: Communication flows from people at higher level to
those at the lower levels in the organizational hierarchy.
To communicate policies, procedures, programs and objectives and to issue
orders and instructions to subordinates
2) Upward communication: Travels from subordinates to superiors
Ex: Replies, suggestions etc.
3) Horizontal communication: It refers to transmission of communication at the same
level.
Forms of Communication
There are three forms of communication.
1) Oral communication: communication takes place directly either face to face, or
through telephone or in meetings, conferences etc.
2) Written communication: communication in the form of a report, statement, circular,
letter, memo etc.
3) Non-verbal communication: communication is expressed through the body, facial
expression, postures, gestures etc.
COORDINATION
According to Terry “Coordination deals with the task of blending efforts in order to
ensure successful attainment of an objective”. It is accomplished by means of planning,
organizing, directing and controlling.
Managerial Control
Control is an important process in management.
According to EFL Brech “Control is checking current performance against predetermined
standards contained in the plans, with a view to ensuring adequate progress and satisfactory
progress”.
In the words George. R. Terry “Controlling is determining what is being accomplished, that
is evaluating the performance and if necessary applying corrective measures so that the
performance takes place according to plans “.
Control methods
Two types
1) Past-oriented controls
2) Future-oriented controls.
UNIT-IV
Concept Of Entrepreneur
The word entrepreneur is used in various ways and views. These views are
broadly classified into three groups namely risk bearer, organizer and inventor.
Hence the concept of entrepreneurship is associated with three elements risk bearing,
organizing and innovating. Hence an Entrepreneur can be defined as a person who tries to
create something new organizes production and undertakes risk and handles economic
uncertainty involved in enterprise.
Hence an entrepreneur can be a change agent, and having a character who combines
innovativeness, readiness to take risks, setting opportunities, identifying and mobilizing
potential resources, Concern for Excellence and who is persistent in achieving the goal.
Characteristics Of Entrepreneur
An Entrepreneur needs to possess the following entrepreneurial characteristics
Initiative
Perceiving opportunities
Persistence
Information gathering
Concern for quality work
Commitment to contractual obligations
Efficiency orientation
Planning
Problem solving ability
Self confidence
Experience
Self- critical
Persuasion
Use of influence strategies
Assertiveness
Monitoring
Credibility etc.
An Entrepreneur bears risk and uncertainity whereas a manager does not bear any
risk.
An Entrepreneur is rewarded with profits which are highly uncertain and not
fixed. A manager gets salary which is fix and certain.
An Entrepreneur is free to take his own decisions and implement them, whereas
manager cannot take independent decisions.
Technical Entrepreneur
Even though there is no necessity for an entrepreneur to have technical education
background those having are at advantage especially when they want to start a Technical/
Engineering Enterprise.
Types Of Entrepreneurs
Entrepreneurs are classified in a number of ways
1. Danhof's classification
a) Innovative entrepreneurs
b) Adaptive or initiative entrepreneurs
c) Fabian entrepreneurs
d) Drone entrepreneurs
4.Other classification
Solo operators
Active partners
Inventors
Challenge
Buyers
Life timers
Industrial entrepreneurs
Service entrepreneurs
Business entrepreneurs
Agricultural entrepreneurs
Corporate entrepreneurs
Rural entrepreneurs
Women entrepreneurs
Intrapreneurs
The top executives in the organization are encouraged to catch hold of new ideas
and then convert them into products through R and D activities within the framework of
organizations.
Ultrapreneurs
Today's entrepreneurs need to have different mindset about establishing and
operating a company. This mindset is called ultrapreneuring. According to James B
Arkebaur, the concept of ultra preneuring is to identify business opportunity, determine
its viability and form a company.
Concept Of Entrepreneurship
Concept Of Entrepreneurship
The first stage in the entrepreneurial process is some change in the real world for
example a war or any disaster, such a change leads to changes in every aspect of life in
the country. It creates need for new goods and services. A country rebuilds industry from
scratch.
The second stage in the entrepreneurial development is the idea. it was the idea that is
perceived by entrepreneurs which help them in building businesses.
One may become entrepreneur by starting a new enterprise or he may acquire a franchise.
Barriers to Entrepreneurship
A large number of entrepreneurs particularly in the small Enterprises fail due to
several problems and barriers. The greatest barrier to entrepreneurship is the failure of
success.
Karl. H. Vesper has identified the following entrepreneurship barriers:
1. Lack of viable concepts.
2. Lack of market knowledge.
3. Lack of technical skills.
4. Lack of seed capital.
5. Lack of business know how.
6. Complacency -lack of motivation.
7. Social stigma.
8. Time presence and distraction.
9. Legal constraints and regulations.
10. Monopoly and protectionism.
11. Inhibition due to patents.
UNIT-V
Meaning Of Project
A project can be defined as a scientifically evolved work plan devised to achieve
a specific objective within a specified period of time.
Project can differ in their size, nature of objectives, time duration and complexity.
However projects partake of the following three basic objectives:
i. A course of action
ii. Specific objectives and
iii. Definite time perspectives
Every project has starting point and ending point with specific objectives.
Project Classification
The following are some of the important classification of projects
i. Quantifiable and non quantifiable projects
ii. Sectional projects
iii. Techno Economic project
Project Identification
Indenting entrepreneurs always are in search of project having a good market.
Idea Generation
The process of project selection starts with Idea generation. In order to select most
promising and profitable project the entrepreneur has to generate large number of Ideas
about the possible projects he can take. Project ideas can be discovered from various
sources.
Project Selection
Project selection starts once the entrepreneurs has generated few ideas of project.
After having some ideas, these project ideas are analyzed in the light of existing
economic conditions, market conditions and the government policy and so on. For this
purpose a tool is generated what is called SWOT analysis.
Product
Raw material
Ownership
Location Market
Labour
working Capital
Total Investment
The second purpose of the project report is to attract lenders and investors.
Contents of a project report
A good project report should contain the following:
General information
Promoter information
Location details
Land and building details
Plant and machinery requirements
Production process
Utilities
Transport and communication
Raw material requirement
Manpower requirement
Product details
Market
Requirement of working capital
Requirement of funds
Cost of production and probability of first 10 years
Break even analysis
Schedule of implementation
Identification Of Opportunity
Opportunities according to Draker are of three kinds
1. Additive opportunity - Enable the decision maker to better utilize the existing
resources without any way involving a change in the character of business.
UNIT-II
1. Discuss the nature and importance of planning.
2. Write a note on different types of planning.
3. Illustrate the different steps involved in the planning process.
4. Explain in detail the decision making process.
5. Write a note on nature, process and structure of organization.
6. Explain the need for delegation of authority in an organization.
7. Describe the staffing and recruitment process.
UNIT-III
1. Explain the meaning, nature and principles of directing.
2. What is the importance of leadership ?Explain different leadership styles.
3. Explain what is motivation, and different motivational theories.
4. Explain the role of communication in the successful running of an organization.
5. What are the different types and forms of Communication. ? Explain
6. Explain about co-ordination and co-operation.
7. Explain the steps involved in managerial control.
UNIT-IV
1. Explain the concept and evolution of entrepreneur.
2. Describe the characteristics of an entrepreneur.
3. Explain the functions of an entrepreneur.
4. What are the different types of entrepreneur.? Explain
5. Describe the role of entrepreneurship in the economic development of a country.
6. What are the barriers to entrepreneurship? Explain.
7. What are the different stages in entrepreneurial process ? Explain.
8. Outline the role of entrepreneurship development cell (EDC) in a technical institution
UNIT-V
1. Write a note on product classification.
2. Illustrate the various steps in the process of project identification.
3. Explain the significance of a project report.
4. Describe the contents of a project report.
5. Explain the steps in formulation of a project report.
6. Write a note on planning commission guidelines.
7. Explain the various aspects of project feasibility study.
8. Describe a startup idea of your own.