UNIT-1

ENTREPRENEURSHIP
INTRODUCTION:

Concept of Entrepreneurship
Entrepreneurship is the ability and readiness to develop, organize and run a business
enterprise, along with any of its uncertainties in order to make a profit. The most
prominent example of entrepreneurship is the starting of new businesses.

In economics, entrepreneurship connected with land, labor, natural resources and

capital can generate a profit. The entrepreneurial vision is defined by discovery and risk-
taking and is an indispensable part of a nation’s capacity to succeed in an ever-
changing and more competitive global marketplace.

Entrepreneurship is the process of creating, managing, and scaling a business

by taking calculated risks, and being innovative.

MEANING OF ENTREPRENEUR:
An entrepreneur is someone who starts or owns a business. Whether it’s in farming,
retail, and manufacturing or in the service sector, entrepreneurs are businesspeople
who find their success by taking risks. In their pursuits, they often become disruptors in
established industries.

The word entrepreneur originates from the French word, entreprendre, which means “to
undertake”. Means to start a business.

Entrepreneur is a person who creates and manages any business by identifying a need
and benefiting from the opportunity. This usually comes with considerable risk, personal
sacrifice, and initiative.

We usually see the entrepreneur as an individual who innovates and produces new
ideas, goods, or services.

They are also at risk of losing their capital. They run that risk because like any other
business in the world, there is a chance of failure.

An entrepreneur can be the owner, a partner, or in some cases the majority

shareholder in the venture. They usually assume all roles that involve managing the
business activities.

TYPES OF ETREPRENEURS:

Depending on the type of business, entrepreneurs are classified into the following types:

Trading Entrepreneur

A trading entrepreneur refers to a person who undertakes business-related activities.

These types of entrepreneurs usually buy finished products in bulk from manufacturers
at some discount. They then sell these products directly or with the help of retailers or
vendors with profits. A business entrepreneur usually acts as a middleman between
manufacturers and customers. This may include wholesalers, retailers, dealers, etc.
Manufacturing Entrepreneur

The founder of a business to manufacture products is known as a manufacturing

entrepreneur. Manufacturing entrepreneurs analyze market needs or customer needs
and manufacture products to meet such needs using various resources or technologies.
In simple words, manufacturing entrepreneurs transform raw materials into finished
products according to the customer's needs.

Agricultural Entrepreneur
Agricultural entrepreneurs refer to the types of entrepreneurs who primarily do
agricultural work. They participate in a wide range of agricultural activities such as
farming, irrigation, agricultural produce, mechanization, technology, etc.

Based on the Technology

Based on technology, entrepreneurs are classified into the following types:

Technical Entrepreneur
Such entrepreneurs are called technology entrepreneurs who use to start and continue
industries primarily based on science and technology. These entrepreneurs develop new
ideas and turn those ideas into technology-based innovations and inventions. They
always work to create new methods of production in the fields of technology and
science. Besides, they also manufacture products that can help ordinary citizens and
other non-technical entrepreneurs in their enterprises.

Non-Technical Entrepreneur
As the name suggests, entrepreneurs who do not set up and run enterprises based on
science and technology are known as non-technical entrepreneurs. In short, non-tech
entrepreneurs are those who work for innovations using traditional methods. They
typically use alternative and exemplary marketing methods and follow non-technical
delivery strategies to engage directly with customers. This ultimately helps them to
survive and grow their business in a competitive market. Moreover, they create better
relationships and meet customer needs.

Based on Ownership
Based on ownership, entrepreneurs are classified into the following types:
Private Entrepreneur
When an entrepreneur starts something personal of his or her own, such as setting up
an enterprise, he/she is called a private entrepreneur. A private entrepreneur is the only
person who plays the sole proprietor role for a business venture and bears the risk
associated with it.

State Entrepreneur
When a state or government does a business or industrial undertaking, it is referred to
as a 'state entrepreneur'. In this case, the government is the sole owner of the enterprise
and will bear all the profits and losses involved with it.

Joint Entrepreneurs
When a business or industrial undertaking is established and operated jointly by the
private entrepreneur and the government, it is called joint entrepreneurship. The parties
involved are called joint entrepreneurs. In this case, risk and profits are shared by both
parties. However, the sharing percentages generally depend on the type of business and
the agreement between the two parties.

Based on Gender
Based on gender, entrepreneurs are classified into the following types:

Men Entrepreneurs
When any business venture is formed, managed and operated by men, these men are
referred to as men entrepreneurs.

Women Entrepreneurs
When any business venture is formed, managed and operated by women, these women
are referred to as women entrepreneurs. Besides, if women have a minimum 51 percent
share of the capital, they can also be known as women entrepreneurs.

Based on the Enterprise size

Based on the size of the enterprise, entrepreneurs are classified into the following types:

Small-Scale Entrepreneur
If an entrepreneur has invested up to a maximum of 1 crore in starting an enterprise,
including plant and machinery, such entrepreneur is called Small Scale Entrepreneur.

Medium-Scale Entrepreneur
If an entrepreneur has invested a minimum of 1 crore to a maximum of 5 crores in
starting an enterprise, including plant and machinery, then such entrepreneur is called
Medium Scale Entrepreneur.

Large-Scale Entrepreneur
If an entrepreneur has invested more than 5 crores in starting an enterprise, including
plant and machinery, such an entrepreneur is called a large-scale entrepreneur. This
includes any investment above 5 crores.

Based on Clarence Danhof Study

Clarence Danhoff conducted a study on American agriculture and classified
entrepreneurs accordingly. According to him, entrepreneurs generally have less initiative
and drive when they start any business venture. However, they learn things with their
continued economic work and become more innovative and enthusiastic. Based on his
study, he classified entrepreneurs as follows:

Innovating Entrepreneurs
Innovative entrepreneurs, also known as innovators, are the type of entrepreneurs who
usually come to the market with new ideas or innovations. In particular, they create new
products, find new production methods, create new markets and restructure the
business. Such entrepreneurs always try to innovate and invest their time and money in
research and development.

Imitative Entrepreneurs
Imitative entrepreneurs or imitating entrepreneurs are often called 'copy cats'. This is
because these entrepreneurs mainly follow and adopt the innovative entrepreneurs'
existing successful enterprise system. They do nothing new of their own. Imitative
entrepreneurs apply strategy from other enterprises in a manner where all core
fundamentals of the original business model are replicated, and all efficiencies are
retained. These entrepreneurs help improve any product, production process or suggest
the use of improved technology addressed by other enterprises.

Fabian Entrepreneurs
Fabian entrepreneurs are defined as those types of entrepreneurs who generally do not
seek to implement changes in their enterprise techniques. They are very careful in
applying any approach and cautious in exercising any change. These entrepreneurs are
known for not making sudden decisions. They imitate the change in their strategy only
when it is completely clear that failing to do so will not harm.

Drone Entrepreneurs
Drone entrepreneurs are defined as entrepreneurs who do not like to adopt any changes
in their enterprise techniques. They strictly follow their traditional strategies or methods
for development, production or marketing.

KNOWLEDGE &SKILLS REQUIREMENT:

1. Business Management Skills

Business management skills are essential for entrepreneurs to effectively plan, organize,
direct, and control the resources of an organization. These skills can build credibility,
improve efficiency, manage risks, implement effective strategies, create a positive
company culture, and grow a business.

Business management skills include:

 Leadership
 Strategic thinking
 Budget management
 Business acumen
 Communication
2. Communication and Listening

Communication skills allow individuals to express thoughts, ideas, and feelings clearly
through speaking, writing, and other forms of expression. Listening skills provide the
ability to understand and retain information and respond appropriately. Both
communication and listening are essential entrepreneurship skills that can make a
difference in how you run your business as they help you to build trust, maintain
relationships, resolve conflicts, understand needs and perspectives, and make informed
decisions.

Communication and listening skills include:

 Written communication
 Non-verbal communication
 Stress management
 Active listening
 Emotion control
3. Critical and Creative Thinking Skills

Strong critical and creative thinking skills are essential for entrepreneurs to build and
expand their businesses. Critical thinking allows you to objectively analyze information
using the evidence to make informed decisions and solve problems. Creative thinking
provides a way to look at issues from various angles, consider alternative perspectives,
and come up with original ideas.

Critical and creative thinking skills include:

 Analysis
 Brainstorming
 Visualization
 Evaluation
 Research
4. Strategic Thinking and Planning Skills

Strategic thinking and planning skills allow entrepreneurs to analyze information, adapt,
manage projects, solve problems, and make informed decisions.
These entrepreneurship skills are vital in helping leaders overcome challenges and
ensure efficient allotment of resources and achievement of goals.

Strategic thinking and planning skills include:

 Analysis
 Implementation
 Flexibility
 Attention to detail
 Assertiveness
5. Branding, Marketing, and Networking Skills

In today’s competitive business environment, branding, marketing, and networking skills

are essential for scaling the business and boosting opportunities. These skills enable
entrepreneurs to promote and sell products or services. Branding creates a unique and
memorable image of a product, service, or organization, and marketing promotes them
to target consumers. Networking builds relationships and allows individuals to connect
with potential customers, partners, suppliers, or colleagues.

Branding, marketing, and networking skills include:

 Collaboration
 Communication
 Interpersonal skills
6. Teamwork and Leadership Skills

Teamwork and leadership are highly critical entrepreneurship skills that foster a positive
and collaborative organizational culture, leading to increased employee satisfaction and
improved performance. These qualities can enable leaders to effectively inspire,
motivate, work in teams, and lead the company toward success.

Teamwork and leadership skills include:

 Communication
 Emotional intelligence
 Empathy
 Delegation
 Conflict resolution
7. Time Management and Organizational Skills

Great leaders should know how to delegate and prioritize tasks, manage their time and
resources, and maintain a well-structured and efficient work environment. Effective time
management and organization skills can enable you to achieve goals, manage stress,
maintain a healthy work-life balance, and improve well-being and satisfaction.

Time management and organizational skills include:

 Prioritizing
 Goal setting
 Multi-tasking
 Decision making
 Collaboration

8. Sales Skills

Sales skills are vital for salespeople and valuable for entrepreneurs, as they need to
know how to sell their businesses to potential customers and investors. Developing
sales skills can help entrepreneurs make sales, pitch ideas, negotiate, and create great
relationships with their customers, investors, and stakeholders to build a strong
business.

Sales skills include:

 Business acumen
 Negotiation
 Relationship-building
 Data analysis
 Social selling
9. Stress Management Skills

Leading a business can take a toll on an entrepreneur’s well-being. They need to know
how to efficiently manage and cope with stress for themselves, their employees, and
their business. Stress management skills allow leaders to maintain good physical and
mental health, enhance personal and professional relationships, and improve the overall
quality of life.

Stress management skills include:

 Meditation
 Positive thinking
 Mindfulness
 Sleep hygiene
 Exercise

10. Entrepreneurial Skills in the Workplace

The skills in the workplace refer to qualities that enable individuals to effectively create
and manage their businesses, as well as drive innovation and growth within
organizations.

Entrepreneurial skills in the workplace include:

 Time management
 Finance skills
 Sales
 Adaptability
 Problem-solving

Characteristics of Successful Entrepreneurs

1. Full of determination

To be a successful entrepreneur it is important to set clear goals along the way.

Growing business, increasing sales and hiring new employees require several micro-
goals within them to be executed successfully. This type of workload and challenge is
enough to stop many people from pursuing the entrepreneurial career path. One has to
be determined from the beginning to be successful.
If one isn’t fully
determined there is a good chance to crumble under the pressure.
2. Risk Taking

Some of the most successful entrepreneurs took major risks, and they paid off in a
bigway. Entrepreneurs are risk takers ready to dive deep into a future of uncertainty. But
not all risk takers are successful entrepreneurs. Successful entrepreneurs have will to
risk time and money on unknowns, but they also keep resources, plans and bandwidth
for dealing with “unknown” in reserve. When evaluating risk, a successful entrepreneur
Always thinks that is this risk worth the cost of career, time and money? And, what will
he do if this venture doesn’t pay off?
3. High level of confidence

Entrepreneurs that have a high level of confidence are able to get the job done even
under the most stressful conditions. They understand that big challenges breed big
rewards. This is the same mentality that allows successful entrepreneurs to spot an
opportunity when most just see a possible challenge. When most focus on the
challenge, a successful entrepreneur focuses on the finish line and the end reward.

4.CURIOUSITY:
Successful entrepreneurs have a distinct personality trait that sets them apart from
other organizational leaders: a sense of curiosity. An entrepreneur's ability to remain
curious allows them to continuously seek new opportunities. Rather than settling for
what they think they know, entrepreneurs ask challenging questions and explore
different avenues.

This is validated in the online course Entrepreneurship Essentials, where

entrepreneurship is described as a “process of discovery." Without curiosity,
entrepreneurs can’t achieve their main objective: discovering new opportunities.
The drive they have to continuously ask questions and challenge the status quo can
lead them to valuable discoveries easily overlooked by other business professionals.

5. Willingness to Experiment
Along with curiosity, entrepreneurs require an understanding of structured
experimentation, such as design thinking. With each new opportunity, an entrepreneur
must run tests to determine if it’s worthwhile to pursue.
For example, if you have an idea for a new product or service that fulfills an underserved
demand, you’ll have to ensure customers are willing to pay for it and it meets their
needs. To do so, you’ll need to conduct thorough market research and run meaningful
tests to validate your idea and determine its potential.

6. Adaptability
Entrepreneurship is an iterative process, and new challenges and opportunities present
themselves at every turn. It’s nearly impossible to be prepared for every scenario, but
successful business leaders must be adaptable.
This is especially true for entrepreneurs who need to evaluate situations and remain
flexible to ensure their business keeps moving forward, no matter what unexpected
changes occur.

7. Decisiveness
To be successful, an entrepreneur has to make difficult decisions and stand by them.
As a leader, they’re responsible for guiding the trajectory of their business, including
every aspect from funding and strategy to resource allocation.
Being decisive doesn’t always mean being correct. Entrepreneurs need the confidence
to make challenging decisions and see them through to the end. If the outcome turns
out to be less than favorable, the decision to take corrective action is just as important.
8. Innovative Thinking

Innovation often goes hand-in-hand with entrepreneurship. While innovation in

business can be defined as an idea that’s both novel and useful, it doesn’t always
involve creating an entirely new product or service. Some of the most successful
startups have taken existing products or services and drastically improved them
to meet the changing needs of the market.

Although innovation doesn’t come naturally to every entrepreneur, it’s a type of

strategic mindset that can be cultivated. By developing your problem-solving
skills, you’ll be well-equipped to spot innovative opportunities and position your
venture for success.

9. Long-Term Focus

Most people associate entrepreneurship with starting a business. While the early
stages of launching a venture, such as securing funding, are critical to its
success, the process doesn’t end once the business is operational.

According to Entrepreneurship Essentials, “it’s easy to start a business, but hard

to grow a sustainable and substantial one. Some of the greatest opportunities in
history were discovered well after a venture launched.”
Entrepreneurship is a long-term endeavor, and entrepreneurs must focus on the
process from beginning to end to ensure long-term success.

10. Self-Awareness
A great entrepreneur is aware of their strengths and weaknesses. Rather than
letting shortcomings hold them back, they build well-rounded teams that
complement their abilities.
In many cases, it’s the entrepreneurial team, rather than an individual, that drives
a business venture toward success. When starting your own business, it’s critical
to surround yourself with teammates who have complementary talents and
contribute to a common goal
.
ENTREPRENEURSHIP PROCESS:
 1. Idea Generation
2. Opportunity Analysis
3. Developing Planning
4. Collecting Resources
5. Forming Organization
6. Growing Business
#1. Idea Generation
This is the first step in the entrepreneurial process. An idea can be a problem or solution.
Here, the entrepreneur identified an idea worth pursuing. The entrepreneur will conduct
the feasibility study and take input from other stakeholders.

#2. Opportunity Analysis

After identifying the opportunity, the entrepreneur will evaluate it. They will see if the
opportunity provides any value to the business or the consumer, whether it will be
sustainable in the long term if the profit is healthy, the market competition, the risks
associated with the opportunity, and the entrepreneur’s product or service will be
different or better than the competition.

The entrepreneur should look to answer for following questions:

 Is the opportunity worth investing capital, resources, and energy?

 Can we offer better solutions than existing ones?
 Can we beat the competition?
 Is the business sustainable in the long run?
 What are the risks?
If the answers are generally positive, entrepreneurs move to the next step.

#3. Developing Plan

After analyzing the opportunity, the entrepreneur develops a plan to realize it and launch
the company. This is a crucial step in the entrepreneurial process. The plan will have a
business strategy and operating structures, including steps for the formation of the
company. It will provide details on business objectives, goals, mission statement, and
details of products or services.

#4. Collecting Resources

Launching a new business requires resources, including financing, human labor,
materials, and more. If the entrepreneur is self-sufficient, they can self-finance. However,
they may go to investors or financial institutions to get the funds.

These days, entrepreneurs have a new option called crowdfunding. Using these
platforms, entrepreneurs raise awareness about their business and ask for support.

If the idea resonates with the audience, businesses can quickly raise a significant
amount.

#5. Forming Organization

Once the entrepreneur secures the funds and resources, they will launch the company
and form a legal entity. The structure of the organization will depend on its
requirements.

The entrepreneur will name the company and file the papers with the government to
form LLC, WLL or PLC, Corporation, or a Non-profit.
#6. Growing Business
After launching the company, it will start producing products or offering services. The
entrepreneur will ensure that the business is running smoothly and growing. Now the
operating plan will be executed. The entrepreneur will have regular status updates and
compare the actual progress with the planned progress. If things are not going as
planned, they will take corrective actions to bring the progress on track.

Timmons Model of the Entrepreneurial Process”:

Understanding the Timmons Model of Entrepreneurship

According to the Timmons Model of Entrepreneurship the three critical factors of
a successful venture are opportunities, teams, and resources. The successful
entrepreneur is one that can balance these critical factors.
•
The Opportunity Factor
The Timmons model of entrepreneurship states that entrepreneurship is opportunity
driven, or that the market shapes the opportunity. A good idea is not necessarily a
good business opportunity and the underlying mar)et demand determines the potential
of the idea. An idea becomes viable only %hen it remains anchored in products or
services that create or add value to customers, and remains attractive, durable, and timely.
•
THE Management team:

After identifying the business opportunity, the entrepreneur develops an organization

team to start the working operations and to plan number of operative tasks in
organization. The size of organization team that is required to be developed depends
upon the size of business idea or opportunity. Effective teams are required to be
developed to effectively execute the identified opportunity. Ineffective teams could
result in failure of the developed business opportunity (Timmons Model, 2018). Also, a
good team can further help in removing the chance of ambiguity and uncertainty in the
business idea by applying creativity. In addition to this, the management team hired for
executing the business idea will help in managing the available resources of
organization in most effective manner. The developed team will help in interacting with
various exogenous forces and capital market which are viable factors and may affect
the successful implementation of business idea.

The management team also helps in developing the vision and mission of organization
by identifying the capabilities of team members and by identifying the needs of
customers in the industry.

Resource factor:

The Timmons model discounts the popular notion than extensive resources reduce the
risk of starting a venture and encourages bootstrapping or starting with the bare
minimal requirements as a way to attain competitive advantages.

Starting a business plan by defining the business opportunity is not enough. It is must
to define the resources required in the business. The presence of extensive resources
decreases the risks associated with start-up of new business by the entrepreneur.
These resources help in establishing the new venture with the bootstrapping to achieve
the advantages among the competitors. Mainly four factors play a significant role in
establishment of the new company with economic profits such as land, labor, capital
and entrepreneurship because these are utilized in production of the new venture. The
type and size of the new venture describes the requirement of the resource factors
along with entrepreneur which plays a role in resource management to develop the best
venture. However, there are number of resources that are scarce in current times and
may cause number of problems for the business organization and it is must for
business firms to identify all the opportunities and develop an effective team to manage
all the resources. However, business management teams must encourage availability of
creative resources in organization to achieve competitive advantage in the industry.

FACTORS IMPACTING EMERGENCE OF ENTREPRENEURSHIP:

Economic Factors
Capital, labour, raw materials and market are the main economic factors.

(a) Capital:

Capital is one of the most important prerequisites to establish an enterprise. Availability

of capital helps an entrepreneur to bring together the land of one, machine of another
and raw material of yet another to combine them to produce goods. Therefore, capital is
regarded as lubricant to the production process. Basically, capital is the life blood of any
activity. If capital is available, people who have innovative ideas would like to put them
into reality. Without having any obstacles, if capital is available, it will act as a lifeline to
entrepreneurs. So, if capital is available, entrepreneurial activities will increase.

(b) Labor:

The quality and quantity of labor is another factor which influences the emergence of
entrepreneurship. Availability of labor makes entrepreneurship attractive. More than
abundantly available labor, the presence of skilled labor force is very important because
such a workforce is generally less mobile than other resources. If entrepreneurial
activities are initiated near areas where labor is available, then it is easy to carry out the
business more comfortably and profitably at low cost. This is why one finds textile units
and machine tools manufacturing industries concentrated in certain cities like
Coimbatore, Tiruppur, Ludhiana, Rajkot, Baroda, etc. just because of availability of
skilled labour force required for such units.

(c) Raw Materials:

Raw materials are required for establishing any industrial activity and therefore have an
influence in the emergence of entrepreneurship. In the absence of raw materials, neither
any enterprise can be established nor an entrepreneur can emerge. In some cases
technological innovations can compensate for raw material inadequacies. The supply of
raw mat

(d) Market:

It is not only the availability of capital, labour and raw materials but a readily available
market that attracts entrepreneurial activities. Ultimately, it is the market that fetches
revenue for any business. If sufficient market is not there, people will naturally hesitate
to do business in a sector where there is no market. In addition to market opportunities,
it is equally important to ensure future market opportunities for the emergence of
entrepreneurial activities.

2. Social Factors:

Caste factor:

There are certain cultural practices and values in every society which influence the
actions of inviduals.These practices and value have evolved over hundred of years.
Consider the caste system, it has divided the population on the basis of caste into four
divisions. The Brahman (priest),the Kshatriya(warrior),the vaishya(trade) and the
shudra(artisan).It has also defined limits to the social mobility of individuals. The caste
system does not permit an individual who is born a shudra to move to higher caste.
Thus commercial activities were the monopoly of the vaishyas.

FAMILY BACKGROUND:

This factor includes size of the family, type of family and economic status of
family.Zamindar family helped to gain access to political power and exhibit higher level
of entrepreneurship. For example in a society where the joint family system is in vogue,
those members of joint family who gain wealth by their hard work denied opportunity to
enjoy the fruits of their labor because they have to share their wealth with the other
members of the family.

EDUCATION:

Education has an important role to play in defining your entrepreneurial journey. This
may be formal or informal education. While one should acquire the degrees required to
start a business, this opportunity may not be accessible to all. However, every person
can get educated through experience and consultation. Work for different entrepreneurs
and learn how they get their businesses to grow. Learn from their mistakes and errors.
Consult experts and professionals. The whole journey of entrepreneurship is a never-
ending learning process.

Attitude of the Society

The attitude of society is another factor that should be considered for the growth of
entrepreneurship. For entrepreneurs to flourish, society should learn to accept changes.
They should learn to encourage growth when it is directed towards the progress of the
community as a whole. There might be instances where it is necessary to have slight
changes in cultural traditions and norms for growth and development. The society has a
role to play in showing a positive attitude toward entrepreneurial advancements.

Cultural Value

The cultural values of a country also impact the growth of entrepreneurship. If the
culture has a leaning toward the growth of the economy and money-making business,
there are higher chances of entrepreneurs flourishing in the country. There are certain
countries whose cultures encourage a strong work ethic. These kinds of countries are
the ideal place to start a business or company for an entrepreneur.
Psychological Factors:
The main psychological factors influencing entrepreneurship are as
follows:

i. Need Achievement:
To the best of our knowledge, the best known of primarily psychological theories is
David McClelland’s ‘theory of need achievement’. According to McClelland, a
constellation of personality characteristics which are indicative of high need
achievement is the major determinant of entrepreneurship development.

McClelland’s Need for Achievement

Theory
The need for power (nPow) is the need to control and influence the behavior
of others. It involves taking charge and making an impact. People with a high
nPow tend to make more suggestions, try to bring others around to their way
of thinking, and seek positions of leadership.

The need for achievement is the need to demonstrate high performance

levels and high standards of excellence. People who have a high nAch are
motivated by opportunities for personal improvement and self-success. They
prefer tasks that are moderately difficult, have a strong desire for feedback
about how they are doing, and tend to work alone rather than with others. In
addition, high nAch individuals desire challenging jobs over which they have
some control. In contrast, low nAch individuals are more satisfied with jobs
that have a high probability of success and involve little challenge.

The need for affiliation (designated nAff) is the motivation to establish and
maintain friendly relationships with others. Those high in need for affiliation spend
more time interacting with others, express more of a desire to be with others (as
opposed to those low in this need), more readily learn social networks, tend to be more
accommodating to others, and avoid situations that are characterized by interpersonal
conflict. Individuals high in this need prefer to work with friends.
I

Withdrawal of Status Respect: Status Withdrawal Theory: HAGEN’S

THEORY

According to Hagen, entrepreneurship is a function of status

withdrawal.

Hagen attributed the withdrawal of status respect of a group to the genesis of

entrepreneurship. Giving a very brief sketch of the history of Japan, he concludes
that she developed sooner than any non-Western society except Russia due to two
historical differences.

Hagen postulates four types of events which can produce status

withdrawal:
(i) Displacement of a traditional elite group from its previous status by another
traditional group by physical force.

(ii) Denigration of values, symbols through some change in the attitude of superior
group.

(iii) Inconsistency of static symbol with a changing distribution of economic power

There are four responses which assess the personality-

(i) Retreatist – One who combines to work in the society but remains indifferent to
his work and position.

(ii) Ritualist – One who adopts a kind of defensive behavior and acts in the ways
accepted and approved in his society but with no hopes of improving his position.

(iii) Reformist- One who foments a rebellion and attempts to establish a new society.
 (iv) Innovator- A creative individual who is likely to be an entrepreneur.

MOTIVES:

Reasons might include

personal satisfaction, challenge, freedom and independence.

 An entrepreneur may feel a level of personal satisfaction that they have created a
successful business. It may be that an entrepreneur is able to make a business out of
a hobby or interest.

 More freedom: entrepreneurial systems grant more freedom

than conventional ones. Entrepreneurs want to have a working
structure that ensures more flexibility. They have more freedom
to make choices that they think will benefit the venture in the
long run.
 More authority: entrepreneurs have more authority, which also
makes them self-accountable. Since they have these business
ideas, they want to be involved in every aspect of it. From
product development to ensuring a sustainable customer base,
entrepreneurs have the final say in each of these decisions.
 MANAGING ENTREPRENEURS: Their chief motive is security.
 Innovating entrepreneurs: whose chief motive is only in
excitement

 Controlling entrepreneurs: whose chief motive is authority.

Political factors:

Social stability
Social stability has a significant impact on the running of a business. Any
unrest in the country or a hostile takeover over a government will lead to
looting, riots, and chaos in the country. Such situations might lead to ‘bandhs’
which can disrupt the normal working of business operations.
Taxes
Government can increase or decrease tax for some companies or business
verticals and lower it for others. For example -the state government in India
earns a third of its revenue from the liquor industry. Closure of pubs and bars
in the pandemic led to no sales of alcohol due to which the state government
went cash strapped. To compensate for the revenue the state government
allowed the liquor shops to open by hiking taxes in the liquor industry.

Foreign trade relations

The government can exert control on businesses through taxation. Foreign
companies that want to set up their businesses often face the brunt of high
taxes since the government wants to protect the business interests of local,
small and medium scale businesses. Imposing high taxes on foreign brands
will eventually cause them to increase the price of their products thus
preventing people to buy more from local businesses.

Difference between Entrepreneur and Intrapreneur

BASIS FOR
ENTREPRENEUR INTRAPRENEUR
COMPARISON
Meaning Entrepreneur refers to a Intrapreneur refers to an
person who set up his own employee of the organization
business with a new idea who is in charge of undertaking
or concept. innovations in product, service,
process etc.

Approach Intuitive Restorative

Resources Uses own resources. Use resources provided by the

 BASIS FOR
ENTREPRENEUR INTRAPRENEUR
COMPARISON
company.
Capital Raised by him. Financed by the company.

Enterprise Newly established An existing one

Dependency Independent Dependent

Position founder of the company employee in existing company

Motivation Self motivated motivated by appreciation

RISK High Minimum

Flexibility more fixed scheduled hours

Operations from outside also inside the company

Responsibility oversees all the activities only assigned tasks.