MAHARANA PRATAP ENGINEERING COLLEGE

Affiliated to Dr A.P.J Abdul Kalam Technical University, Lucknow Uttar Pradesh

B.TECH Notes
KHU-802: PROJECT MANAGEMENT & ENTREPRENEURSHIP

UNIT-1
Entrepreneurship: Entrepreneurship: need, scope , Entrepreneurial competencies & traits, Factors
affecting entrepreneurial development, Entrepreneurial motivation (Mc Clellend’s Achievement
motivation theory), conceptual model of entrepreneurship , entrepreneur vs. intrapreneur; Classification
of entrepreneurs; Entrepreneurial Development Programmes

Entrepreneurship
1. Introduction to Entrepreneurship
Entrepreneurship is the process of identifying opportunities, taking risks, and innovating to create
and manage a business venture for profit and growth. Entrepreneurs play a key role in economic
development by generating employment, fostering innovation, and driving market competition.

Key Elements:

• Innovation & Idea Generation: Finding a market gap.

• Business Model Development: Structuring operations for profitability.
• Funding & Investment: Bootstrapping, venture capital, loans.
• Marketing & Sales: Reaching and converting customers.
• Leadership & Team Building: Managing people and culture.
• Scaling & Growth: Expanding beyond the startup phase.

The Connection Between Project Management & Entrepreneurship

• Entrepreneurs Need Project Management – Turning ideas into reality requires

structured planning and execution.
• Project Managers Need an Entrepreneurial Mindset – Adaptability, problem-solving,
and innovation are key to success.

2. Need for Entrepreneurship

1. Entrepreneurship: Need

• Economic Growth – Entrepreneurs drive innovation, create jobs, and contribute to GDP
growth. GDP growth is the rate at which a country's gross domestic product (GDP)
increases over time. It's a key indicator of the health of an economy.

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 • Employment Generation – Startups and new businesses provide job opportunities,
reducing unemployment.
• Innovation and Creativity – Entrepreneurs introduce new products, services, and
technologies, enhancing efficiency and convenience.
• Wealth Creation and Distribution – Entrepreneurship leads to capital formation and
equitable distribution of wealth.
• Social Development – Entrepreneurs contribute to community development by addressing
societal issues like poverty, education, and healthcare.
• Increased Competition – Encourages market efficiency and better products for consumers.
• Self-Reliance – Reduces dependency on government jobs and fosters independent
economic growth.

3. Scope of Entrepreneurship
Entrepreneurship has a broad scope of entrepreneurship because it has vast and spans across
different sectors and industries, including:

• Startups and Small Businesses – Opportunities in various fields such as retail, food,
fashion, and services.
• Technology and Innovation – IT startups, AI, blockchain, and automation-driven
businesses.
• Social Entrepreneurship – Businesses focused on solving social and environmental
issues.
• Agripreneurship – Innovations in agriculture, organic farming, and agritech solutions.
• E-commerce and Digital Business – Online marketplaces, dropshipping, and digital
marketing services.
• Manufacturing and Production – Establishing small-scale industries, consumer goods
production, and local manufacturing units.
• Service Sector – Healthcare, education, tourism, consulting, and financial services.
• Green and Sustainable Enterprises – Renewable energy, eco-friendly products, and
sustainability-focused ventures.

4. Entrepreneurial Competencies & Traits

Entrepreneurial Competencies(Skills):

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Entrepreneurs need a mix of competencies (skills and abilities) and traits (personal characteristics)
to succeed. Here’s a breakdown:

1. Entrepreneurial Competencies (Skills & Abilities)

These are the specific skills that help entrepreneurs manage and grow their businesses effectively.

A. Business & Management Competencies

• Opportunity Seeking & Recognition – Identifying business opportunities in the market.

• Strategic Thinking & Planning – Setting long-term goals and mapping out how to
achieve them.
• Financial Management – Budgeting, financial planning, and understanding cash flow.
• Marketing & Sales – Understanding customer needs, promoting products, and closing
deals.
• Risk Management – Identifying and managing potential risks in business operations.

B. Leadership & People Management Competencies

• Team Building & Collaboration – Assembling and leading an effective team.

• Negotiation & Conflict Resolution – Handling disputes and making deals.
• Networking & Relationship Building – Connecting with partners, investors, and
customers.
• Decision-Making & Problem-Solving – Making informed and timely decisions.

C. Innovation & Adaptability Competencies

• Creative Thinking & Innovation – Developing unique solutions and business ideas.
• Adaptability & Resilience – Adjusting to market changes and overcoming setbacks.
• Technology Utilization – Leveraging technology for efficiency and growth.

Traits of a Successful Entrepreneur (Entrepreneurial Traits (Personal

Characteristics))-

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 • These are personality traits that drive entrepreneurs to success.

A. Personal Drive & Motivation

• Passion – A strong desire to achieve business goals.

• Self-Confidence – Belief in one’s abilities and decisions.
• Initiative & Proactiveness – Taking action without waiting for opportunities.
• Perseverance & Resilience – Pushing forward despite challenges.

B. Risk-Taking & Problem-Solving Traits

• Calculated Risk-Taking – Willing to take risks with careful analysis.

• Resourcefulness – Finding solutions even with limited resources.
• Curiosity & Learning Mindset – A desire to continuously learn and improve.

C. Ethical & Social Responsibility

• Integrity & Honesty – Being trustworthy in business dealings.

• Customer Orientation – Prioritizing customer satisfaction.
• Social Responsibility – Considering the impact of business on society.

Entrepreneurs need a combination of competencies (skills) and traits (personal characteristics) to

build and sustain successful businesses. While some traits are inherent, competencies can be
developed through experience, education, and practice.

5. Factors Affecting Entrepreneurial Development

Entrepreneurial development is influenced by a variety of factors, including economic, social,

political, and technological factors:
 Economic factors

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  Capital: The availability of capital to start a business
 Labor: The availability of the right type of workers
 Raw materials: The availability of the necessary raw material.
 Market: The role of the market and marketing
 Infrastructure: The development of communication and transportation facilities.
 Social & Cultural factors
 Family background: The size, type, and economic status of the family
 Education: The level of education and the skills it provides
 Social attitudes: The attitude of society towards entrepreneurship
 Cultural values: The cultural values and practices of the society
 Political and legal factors
 Political & Legal factors
 Government Policies & Regulations – Favorable policies (like ease of business
registration, lower bureaucracy) promote entrepreneurship.
 Political Stability – Stable governments attract investors and entrepreneurs.
 Legal Framework & Property Rights – Clear laws protect business interests and
encourage investment.
 Corruption & Bureaucracy – High corruption discourages entrepreneurship by
increasing operational costs and risks.
 Psychological & Personal Factors
 Risk-Taking Ability – Entrepreneurs must be willing to take calculated risks.
 Innovative Thinking – Creativity and problem-solving abilities help entrepreneurs
find unique business opportunities.
 Need for Achievement – Ambition and self-motivation drive entrepreneurs to
succeed.
 Leadership & Managerial Skills – Strong leadership ensures effective business
decision-making.

6. Entrepreneurial Motivation (McClelland’s Achievement

Motivation Theory)
Entrepreneurial motivation refers to the internal and external factors that drive individuals to start
and sustain businesses. One of the most influential theories in this area is McClelland’s
Achievement Motivation Theory, which explains why some people are more likely to become
entrepreneurs than others.
McClelland’s Achievement Motivation Theory
David McClelland, a psychologist, proposed the Achievement Motivation Theory (also called
Need Theory) in the 1960s. This theory suggests that human motivation is driven by three primary
needs:

1. Need for Achievement (nAch) – Desire to excel, accomplish goals.

2. Need for Power (nPow) – Desire to control, influence others.
3. Need for Affiliation (nAff) – Desire for social relationships.

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Need for Achievement (nAch)

• This is the most crucial need for entrepreneurs. Individuals with a high need for
achievement are more likely to take risks, innovate, and strive for success(to put in a lot
of effort and energy to achieve success). They exhibit the following characteristics:

 Desire to set and achieve challenging goals.

 Preference for moderate risks rather than high risks.
 Strong commitment to personal responsibility.
 Need for continuous feedback and improvement.
 Entrepreneurs with a high achievement motivation are driven by their inner urge to excel
rather than external rewards like money or status.

Need for Power (nPow)

• This need refers to a person’s desire to influence and control others. It is divided into two
types:
• Personalized Power – Seeking power for personal gain.
• Socialized Power – Using power to organize and lead teams for collective success.

Entrepreneurs with a high need for power enjoy leadership roles, decision-making, and
influencing market trends.

Need for Affiliation (nAff)

• This need relates to the desire for social relationships, teamwork, and belongingness.
• Entrepreneurs with high affiliation needs prioritize relationships over competition.
• They focus on networking, collaboration, and maintaining harmony in business(the
coordination of different elements of a business to work together towards common goals).
• However, excessive concern for relationships can sometimes limit risk-taking and tough
decision-making.

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 Application of McClelland’s Theory in Entrepreneurship

 Identifying Potential Entrepreneurs – People with a high need for achievement are more
likely to start businesses.
 Training & Development – Entrepreneurial training programs should focus on
developing achievement motivation.
 Policy Formulation – Governments can design policies to support achievement-oriented
individuals by providing resources and funding.
 Business Growth & Expansion – Entrepreneurs who seek achievement are more likely to
innovate and grow their businesses.

7. Conceptual Model of Entrepreneurship

The Conceptual Model of Entrepreneurship provides a structured framework to understand
how entrepreneurship functions as a process, incorporating various elements such as the
entrepreneur, the environment, opportunity identification, resource mobilization, and business
creation.
Below is an elaboration of this model:
1. Core Elements of the Entrepreneurship Model
• The conceptual model of entrepreneurship typically includes the following components:
A. Entrepreneur (The Individual)
The entrepreneur is the central figure in the model, characterized by:
• Personal Traits – Risk-taking, innovation, resilience, leadership, and vision.
• Skills & Knowledge – Business acumen(the ability to understand and respond to
business situations), industry expertise, problem-solving skills, and adaptability.
• Motivation & Intentions – The drive to achieve success, financial independence or social
impact.
B. Opportunity Recognition
Entrepreneurship begins with identifying or creating a business opportunity. This involves:
• Market Needs & Gaps – Identifying customer pain points and unmet demands.
• Innovation & Creativity – Developing novel solutions, products, or services.

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 • Feasibility Analysis – Assessing technical, financial, and market viability.
C. Resource Mobilization
Entrepreneurs need to acquire and manage resources efficiently to transform an idea into
reality. These include:
• Financial Resources – Capital, loans, investments, crowdfunding.
• Human Resources – Skilled employees, partners, advisors.
• Technological & Physical Resources – Equipment, infrastructure, digital tools.
• Social Capital – Networking, mentorship, partnerships.
D. Business Environment
The external environment influences entrepreneurial success and includes:
• Economic Factors – Market conditions, inflation, interest rates.
• Legal & Regulatory Framework – Business laws, taxation, intellectual property rights.
• Socio-Cultural Factors – Consumer behavior, cultural trends, social acceptance.
• Technological Advancements – Digital transformation, automation, AI, blockchain.
E. Entrepreneurial Process
The model also outlines the key stages of the entrepreneurial journey:
• Idea Generation – Identifying a business concept.
• Planning & Strategy – Developing a business model and securing funding.
• Implementation & Launch – Establishing operations and entering the market.
• Growth & Scaling – Expanding, diversifying, or innovating further.
• Sustainability & Exit – Ensuring long-term success or planning an exit strategy.

2. Theoretical Perspectives in the Model

Several theories complement the conceptual model of entrepreneurship:
• Schumpeter’s Innovation Theory – Entrepreneurs drive economic development through
innovation.
• Resource-Based View (RBV) – Success depends on effectively utilizing unique resources
and capabilities.
• Effectuation Theory – Entrepreneurs navigate uncertainty by leveraging available means
rather than predicting outcomes.

3. Practical Implications
The conceptual model helps in:
• Entrepreneurship Education – Understanding the process for aspiring entrepreneurs.
• Policy Making – Designing supportive policies for startups and small businesses.
• Business Strategy Development – Helping entrepreneurs navigate challenges effectively.

8. Entrepreneur vs. Intrapreneur

Both entrepreneurs and intrapreneurs drive innovation and business growth, but they operate in
different environments and have distinct levels of risk, control, and responsibility.
Definition-
Entrepreneur: An individual who starts and runs their own business, taking financial risks to
bring their vision to life.
Intrapreneur: An employee within a company who acts like an entrepreneur by innovating,
leading projects, and driving change without owning the business.

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Factor Entrepreneur Intrapreneur

Owns the business and has full Works within a company,

Ownership
control following its structure
Risk Bears personal financial and Limited personal risk, as the
business risks company absorbs losses.

Resources Raises capital through Uses company-provided

investors, loans, or personal resources and funding
funds
Decision-Making Full autonomy in making Needs approval from company
business decisions leadership
Goal Build a successful business, Innovate and grow the
create wealth, and achieve company from within
independence
Reward Keeps all profits but also bears Earns salary, bonuses, or
losses promotions based on
performance
Similarities
✅ Both are innovators, bringing new ideas to life.
✅ Both require creativity, leadership, and problem-solving skills.
✅ Both focus on growth, efficiency, and market impact.
✅ Both must take calculated risks and adapt to change.

9. Classification of Entrepreneurs
Entrepreneurs can be classified based on various criteria such as their business approach,
motivation, ownership, and industry. Here are the common classifications:

1. Based on Business Type

• Innovative Entrepreneurs – Develop new products, services, or business models (e.g.,

Elon Musk, Steve Jobs).
• Imitative Entrepreneurs – Copy existing business ideas and improve them (e.g., local
franchise owners).
• Drone Entrepreneurs – Resist change and continue traditional business methods.

2. Based on Ownership

• Private Entrepreneurs – Own and operate businesses independently.

• Public Entrepreneurs – Operate businesses in the public sector, often government-
backed.
• Joint Entrepreneurs – Form partnerships between private and public sectors.

3. Based on Motivation

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 • Opportunity Entrepreneurs – Start businesses to take advantage of market opportunities.
• Necessity Entrepreneurs – Start businesses due to lack of job opportunities.
• Social Entrepreneurs – Focus on solving social issues while generating revenue (e.g.,
NGOs, impact-driven businesses).

4. Based on Scale of Business

• Small-Scale Entrepreneurs – Operate businesses with limited capital and workforce.

• Medium-Scale Entrepreneurs – Expand businesses with moderate investment and
employees.
• Large-Scale Entrepreneurs – Run large corporations with significant capital investment.

5. Based on Industry

• Agricultural Entrepreneurs – Engage in farming, livestock, or agribusiness.

• Trading Entrepreneurs – Involved in buying and selling goods (retailers, wholesalers).
• Manufacturing Entrepreneurs – Produce and sell goods.
• Service Entrepreneurs – Provide intangible services (consulting, IT, finance).

6. Based on Technology Use

• Tech Entrepreneurs – Focus on software, AI, robotics, and other tech-driven innovations.
• Non-Tech Entrepreneurs – Operate businesses without heavy reliance on technology.

7. Based on Entrepreneurial Experience

• First-Generation Entrepreneurs – Start businesses without prior family business

experience.
• Second-Generation Entrepreneurs – Continue and expand family-owned businesses.
• Serial Entrepreneurs – Start multiple businesses over time.

10. Entrepreneurial Development Programmes (EDPs)

Entrepreneurial Development Programmes (EDPs) are structured training programs designed to
develop and enhance the skills, knowledge, and mindset required to become successful
entrepreneurs. These programs help individuals identify business opportunities, understand risks,
and develop the necessary managerial and technical skills to establish and run a business.

Objectives of EDPs
 To develop entrepreneurial skills among individuals.
 To provide knowledge on business planning, financial management, and marketing.
 To encourage self-employment and startups.
 To foster innovation and problem-solving abilities.
 To support economic growth and employment generation.

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Stages of an Entrepreneurial Development Programme
1. Pre-Training Phase
 Identifying potential entrepreneurs.
 Designing the curriculum and selecting trainers.
 Gathering financial and infrastructural support.
2. Training Phase
 Entrepreneurial Mindset Development – Building risk-taking ability and leadership.
 Business Opportunity Identification – Helping participants find viable business ideas.
 Managerial & Technical Skills – Training on business operations, marketing, finance, and
supply chain.
3. Post-Training Phase
 Mentorship & Handholding Support – Continuous support to help launch startups.
 Financial Assistance – Connecting participants with banks, venture capitalists, and
government schemes.
 Networking & Market Linkages – Helping entrepreneurs build partnerships and market
access.

Impact of Entrepreneurial Development Programmes

• Increased job creation and economic growth.
• Empowerment of women and marginalized communities.
• Growth of startup ecosystems and innovation hubs.
• Reduction in unemployment through self-employment.

Conclusion
Entrepreneurship is a crucial driver of economic growth, innovation, and job creation. With the
right skills, motivation, and support, entrepreneurs can contribute significantly to a nation’s
progress. Government policies, financial support, and proper training play a key role in fostering
entrepreneurship.

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