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- 1. IT Entrepreneurship and Supply chain Management BIM VII Semester Chapter 1: Overview of Entrepreneurship
- 2. Courseware Introduction to Entrepreneurship Entrepreneurial Decision Process Role of Entrepreneurship in Economic Development Intrapreneurship Ethics and Social Responsibility of Entrepreneurship Overview
- 3. References Management Information System Managing the digital firm by: Laudon & Laudon Management Information System by: James O’ Brien Main Books Entrepreneurship by: R. D. Hishrich & M. P. Peters Supply Chain Management Strategy, Planing and Operation by: Sunil Chopra & Peter Meindl Books to Follow ITE & SCM| Prepared by BIBHOR BARAL
- 6. Who is an Entrepreneur?
- 7. Earliest Period Middle Ages 17th Century 18th Century 19th & 20th Centuries Nature & Development of Entrepreneurship
- 8. Change in Present Life Style Desirability of New Venture Formation Possibility of New Venture Formation Entrepreneurial Decision Process
- 9. Role of Entrepreneurship in Economic Development
- 10. Concept and Definitions of Entrepreneur the word ‘entrepreneur’- taken from French language means an organizer of musical or other entertainments defined as the director or a manager of a public musical institution Early 16th century: application to military expedition Beginning of 18th century: used in economic aspect various views and ways of use of the word classification of views into three groups
- 11. Concept of Entrepreneur (contd.) a. Risk -Bearer: early 18th century by Richard Cantillon Richard Cantillon: the first person, introduced the term ‘entrepreneur’ as a risk bearer, purchases factors of production at a certain prices and resell it at an uncertain price as an agent , buys factors of production in order to combine into a product and sell it in future Merchants, entrepreneurs, buy product at certain price and sell at uncertain price Entrepreneurs: uncertainty bearer
- 12. Concept of Entrepreneur (Contd.) b. An Organizer: developed by Jean Baptiste Say Jean Baptiste Say: associates entrepreneur with the function of coordination, organization and supervision efficient and effective organization of factors of production to operate the business factors of production such as land , labor and capital combination of land, labor and capital by entrepreneur
- 13. Concept of Entrepreneur (contd.) c .As an Innovator: developed by Joseph A. Shumpeter Joseph A. Shumpeter: investigator and founders of new ideas and methods brings dynamic changes into the society with innovation of new combination of production utilizes investigation and discovery the differences between an inventor and innovator innovator: who utilizes inventions and discoveries inventor: who discovers new methods and materials
- 14. Definitions of Entrepreneur International labour Organization( ILO): “Entrepreneurs are people who have the abilities to see and evaluate business opportunities , together with the necessary resources to take advantage of them, and to ensure appropriate action to ensure success.” David H. Holt: “ An entrepreneur is a person who starts a new venture , taking the imitative and risk associated with it and does so by crating something new to provide value to customers.”
- 15. Concept of Entrepreneurship various views and ways of use of Entrepreneur: as a risk bearer as an organizer as an innovator entrepreneurship is related to: coordination, innovation and performance of the entrepreneur a system of creating new business referred to the various activities ,done for the establishment and operation of an enterprise
- 16. Concept of Entrepreneurship (contd.) Definitions: A.H. Cole : “Entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain or aggrandize profit by production or distribution of economic goods and services” Joseph A. Schumpeter : “ Entrepreneurship is based on purposeful and systematic innovation. It included not only the independent businessman but also company directors and managers who actually carry out innovative functions.”
- 17. Concept of Entrepreneurship (Contd.) Entrepreneurship : - a process, involves various actions, taken by entrepreneur to establish enterprise - a process of giving birth to a new enterprise - involvement of two basic elements; innovation and risk- bearing. Innovation: - does something new and different, seeking to do something different and unique, try to meet the changing requirements of customers
- 18. Concept of Entrepreneurship (Contd.) Risk – Bearing: - involvement of risk in new enterprise - incurrence of profit or loss - various factors effects the profit and loss ie. - increasing competition - changes in customers’ preferences - shortage of raw materials So, entrepreneur must be able to assume the risk involved in the enterprise, needs to be a risk taker not an avoider, should have ability of risk bearing .
- 19. Role of Entrepreneurship in economic development Economic Development: increment of per capita income of country increment in living standard of the people of the country role of entrepreneurship in economic development varies from economy of the nation depends on available resources, industrial climate and political system etc. contribution of entrepreneurship to economic development in different ways.
- 20. Role of Entrepreneurship….(contd.) 1. Capital formation: - promotion of capital formation - collection and mobilization of capital - capital, prerequisite for any activities 2. Employment opportunities: - generation of employment opportunities - initiation of business - reduction of the problem of unemployment - increase income and living style of people
- 21. Role of Entrepreneurship…..(contd.) 3. Balanced regional development: - reduction of regional imbalance (rural – urban migration) - mobility of entrepreneurs - movement of business activities on the basis of availability of recourses and facilities 4. Reduce concentration of economic power: - reduction of economic power of a certain group - reduction in exploitation of people as well as other small entrepreneur
- 22. Role of Entrepreneurship…..(contd.) 5. Promote foreign trade: - promotion of country’s export trade - production and introduction of new product - supports in revenue collection by exporting the good 6. Optimum utilization of resources: - use of available resources - brings the resources together and use and utilization of land , labor and capital
- 23. Role of Entrepreneurship…..(cont.) 7.Industrialization: - no. of industries , running in the country - helps to increase economic activities - establishment of industries , consumption of variety of goods at cheaper price, remove unemployment, high level of income
- 24. Meaning of Intrapreneur Intrapreneur refers to corporate entrepreneur A person , who handles ventures based on innovation should be creative , visionary and flexible Must be able to work within the existing corporate structure and climate Commitment to intraprenuership is a must Adoption of entrepreneurships for innovation and growth of the firm salaried employees of the firm work with top level management.
- 25. Intrapreneurship - a new breed of entrepreneur - emergence of intrapreneur from within an existing enterprise - in organizations, top executives, encouraged to generate new ideas and convert into products through research and development activities - the concept, becoming popular in developed countries like America - intrapreneurs : leaving their jobs and starting own enterprises - many of the, becoming successful in their venture
- 26. Intrapreneurship (contd.) Difference Entrepreneur Intrapreneur 1. Dependency independent dependent 2. Raising of raises funds funds are not raise funds 3. Risk bears the risk doesn’t fully bear 4. Operation operates from within the outside organization
- 27. The entrepreneurial decision process Deciding to become an entrepreneur by leaving present activity Difficulty in bringing ideas to the market and create new venture Formation of millions of ventures despite recession, inflation, high interest rates, lack of infrastructure, economic uncertainty and high probability of failure Entrepreneurial decision process: entails a movement from something to something Movement from a present lifestyle to forming a new enterprise
- 28. entrepreneurial decision process (contd…..) 1. Change from present lifestyle: Decision to leave career or lifestyle: a great deal of energy and courage to change and do something new and different Start up business with familiar areas Importance of two working environment: Research and development Marketing Research and development: working with technology Development of new product ideas and processes
- 29. entrepreneurial decision process (contd…..) Change the form of company No acceptance of new ideas by the employees Marketing: Becoming familiar with the market Customers’ unfulfilled needs and want Start up new enterprises to fulfill the needs
- 30. entrepreneurial decision process (contd…..) Source of leaving present lifestyle to something new: negative force-disruption Formation of companies: by retired, relocated due to moving and fired from the job Study in major city in USA: increment of new business by 12 percent, listing in yellow pages Formation of business, cause of frustration from job (no promotion) Formation of enterprise by individual as perception of desirable and possible
- 31. entrepreneurial decision process (contd…..) 2. Desirability of New Venture Formation: Aspects of a situation that make it desirable to start a new company Perception of starting new company as desirable from: Culture, subculture, family, teachers and peers Culture: variability in culture of places creating new business, value on being one’s own boss, having individual opportunities, being success and making money in one place No value of establishment of new business and making money in other places Afraid of disgrace of failure
- 32. entrepreneurial decision process (contd…..) Desirability of New Venture Formation (contd…..) Subculture: shape value systems operate within a cultural framework Entrepreneurial subculture widely recognized in US i.e. Route 128(Boston), Silicon Valley (California), North Carolina Triangle, less known entrepreneurial centers i.e. Los Angeles, Denver, Cleveland and Austin. Support and promote entrepreneurship from subculture to form new company as one of the best occupations Active plan for new enterprise with supportive environments
- 33. entrepreneurial decision process (contd…..) Desirability of New Venture Formation (contd…..) Variation in subculture to form business In Silicon Valley, caused by family traits Indication of the studies made in different companies throughout the world, value of independence of fathers and mothers Giving encouragement and value to company formation Influence and stimulation of teachers to entrepreneurship as desirable and viable career path Courses in entrepreneurship and innovation develop entrepreneurs and drive in entrepreneurial environment
- 34. entrepreneurial decision process (contd…) Desirability of New Venture Formation (contd…..) Peer: an entrepreneurial pool and a meeting place where entrepreneurs and potential entrepreneurs Discussion on ideas, problems, solutions to spawn new companies important in decision to form a company
- 35. entrepreneurial decision process (contd…) Possibility of New Venture Formation(contd……) Importance of education system for business knowledge Question: are entrepreneurs born or develop? Marketing: have crucial role in forming a new company Need of sufficient size of market Need of putting together total package of product, price, distribution, and promotion for successful venture Role model: powerful influences in marketing company formation Seeing someone else succeed, engagement in similar activity
- 36. entrepreneurial decision process (contd…) Possibility of New Venture Formation(contd……) Financial resources: need of financial resources Sources of finance: personal savings, credit, friends, relatives Need of additional seed capital Essential role of Risk-capital availability in the development and growth of entrepreneurial activity
- 37. Ethics and Social Responsibility of Entrepreneurs Business ethics: the study of behavior and morals in a business situation Need to take risks with own capital for different purposes such as to sell and deliver products by an entrepreneur expending greater energy to innovate Face daily stressful situation and difficulties Need to balance between ethical exigencies, economic expediency and social responsibilities Differences at balance depends on moral stance of business manager
- 38. Ethics and Social Responsibility of Entrepreneurs (contd….) Relation of Manager’s attitude concerning corporate responsibilities to the organizational climate, perceived to be supportive of laws and professional code of conduct New entrepreneurs with role of model develop an internal ethical code Determination of ethically appropriate course of action depends on the personal value system of their own Sensitive to peer pressure, social norms in the community and from the competitors in value system reflection of norms and values of the communities and countries in value system(U.S. managers-individualistic and less communitarian values then German and Austrian)
- 39. Ethics and Social Responsibility of Entrepreneurs (contd….) Relation between concept of culture and ethics Ethics: Originated from Greek “ethos”, means “custom and usage”, more originated from “swedhethos”, concern with individual, morality and behavioral habits, identified as essential quality study of whatever is right and good for humans The broad field of study exploring the general nature of morals and the specific moral choices to be made by individual in relationship with others Business ethics: concern with the investigation of business practices in light of human values
- 40. Ethics and Social Responsibility of Entrepreneurs (contd….) Credit by western authors to Greek philosophers Socrates(469-399 B.C.), Plato (427-347 B.C.), and Aristole (384-322 B.C.)as earliest writings upon ethical concepts Judaism (1800 B.C.) and Hiduism (1500B.C.): findings of earlier writings on moral codes and laws Classification of business ethics into four types: 1. pedagogical oriented inquiry: theory and empirical studies 2. theory-building without empirical testing
- 41. Ethics and Social Responsibility of Entrepreneurs (contd….) 3. empirical research, measuring the attitudes and ethical beliefs of students and academic faculty 4. empirical research within business environments, measuring the attitudes and ethical views, within the large organization