Introduction
Entrepreneurial
activity is increasing throughout the world. In India too, there has been a
significant change in the mindset of the society. There is no doubt that
entrepreneurs and entrepreneurship are playing important roles in today’s
global business environment. So what is entrepreneurship? And who are
entrepreneurs?
The concept of
entrepreneurship is a complex phenomenon. Broadly, it relates to the
entrepreneur, his vision and its implementation. Entrepreneurship refers to a
process of action an entrepreneur (person) and it is a creative and innovative
response to the business environment. It promotes capital formation and creates
wealth, and it has the thrill of risk, change, challenge and growth. Entrepreneurship
extends beyond
a conventional
business and economic perspective. Entrepreneurship is a composite skill, which
include imagination, readiness to take risks, ability to bring together and put
to user other factors of production, capital, labour, land, as also intangible
factors such as the ability to mobilize scientific and technologic advances.
One of the qualities of entrepreneurship is the ability to discover an
investment opportunity and to organize an enterprise, thereby contributing to real
economic growth. It involves taking of risks and making the necessary
investments under conditions of uncertainty and innovating, planning and taking
decisions.
Defining Entrepreneurship:
Defining entrepreneurship might
seem simple, but it isn’t! There are about as many definitions of
entrepreneurship. Everyone seems to have his or her own views about what it is
and in the same way they have defined it. Let’s look at some of the various
ways in which entrepreneurship has been defined.
“Entrepreneurship is the
propensity of mind to take calculated risks with confidence to achieve a
predetermined business or industrial objective. In substance, it is the
risk-taking ability of the individual, broadly coupled with correct
decision-making.”
In another view “Entrepreneurship
refers to an action process of entrepreneur towards establishing an enterprise.
It is a creative and innovative process and adapting response to environment.
This concept can be seen in Figure 1.1
Entrepreneurship has long been described by researchers and
writers with terms such as new, innovative,flexible, dynamic, creative, and
risk-taking. Many authors have said that identifying and pursuing
opportunitiesare an important part of entrepreneurship.
According to Frank
Knight, “It involves a specialized
group or persons who bear ‘risks’ and meet the uncertainty”.
According to Musselman
and Jackson, “Entrepreneurship is the
investing and risking of time, money and effort to start a business and make it
successful.”
Fig 1.2 A Conceptual Model of
Entrepreneurship
Entrepreneur Qualities:-
Fig 1.3 Entrepreneur Qualities
Process
for Entrepreneurs
In
this fiercely competitive, global world, creativity is not only an important
source for building a competitive advantage, but it is also a necessity for
survival. When developing creative solutions to modern problems, entrepreneurs
must go beyond merely relying on what has worked in the past. Ideas usually
evolve through a creative process whereby imaginative people germinate ideas,
nurture them, and develop them successfully. Various labels have been applied
to stages in the creative process, but most social scientists agree on five
stages. A model of the entrepreneur’s creative process is shown in Figure 1.4.
Fig 1.4 Entrepreneur creative
Process
Nature and Characteristics of
Entrepreneurship
The
main characteristics of entrepreneurship are given below:
1. Economic Activity: Entrepreneurship
is primarily an economic activity because it involves the creation and
operation of an enterprise. It is basically concerned with the production and
distribution of goods and services and optimally utilizes the resource towards
productive use.
2. Entrepreneurship Involves Innovation: Entrepreneurship involves changing, revolutionizing, transforming,
and introducing new approaches. Entrepreneurship is an innovative function as
it involves doing things in a new and better way. Innovation may take several
forms, such as a new product, a new source of raw material a new market, a new
method of -production, not yet applied in a particular branch or, manufacturing
etc. Drucker says, “Innovation is the specific instrument of entrepreneurship”.
Entrepreneur is a change agent.
3. Goal-oriented Activity: The
entrepreneur who creates and operates enterprises seeks to earn profits through
satisfaction of needs of consumers; hence, entrepreneurship is a goal-oriented
activity.
Entrepreneurship
emphasizes results, achievements and targets achieved. It is work done not imaginary
plans or paper decisions. Hence entrepreneurship is a goal oriented activity.
4. Value Creation: Next, we
find that the process of creating value is a characteristic in describing entrepreneurship.
Through entrepreneurship, new products, services, transactions, approaches, resources,
technologies, and markets are created that contribute some value to a community
or marketplace. We can also see value created when, through entrepreneurship,
resources are transformed into outputs such as products or services. During
this transformation process, value is created because the entrepreneur is
fashioning something worthwhile and useful. Drucker says, “Until
entrepreneurial act, every plant is a seed and every mineral just another
rock”.
5. Enterprise Creation: The next
characteristic of entrepreneurship is enterprise creation. In order to pursue
the perceived opportunities for innovation and to create value, there must be
organized efforts and actions. Someone must take the initiative to do something
– take action to get the entrepreneurial venture up and running.
Entrepreneurship is a creative response to changes in the environment. It
involves innovation or introduction of something new or improved. An
entrepreneuris an agent to effect change.
6. A Function of Risk Bearing: Risk
is an inherent and inseparable element of entrepreneurship. An entrepreneur
works under uncertainties and he assumes the uncertainty of future. In the
pursuit of profit, there is possibility of loss also.
7. Entrepreneurship Implies Growth: The next characteristic in entrepreneurship is growth. One major
difference between entrepreneurial ventures and other small businesses is the
emphasis on growth. Entrepreneurship is about growing a business and pursuing opportunities
as they arise. It’s not about standing still or being content to stay in one
market or with one product.
8. Managerial Skill and Leadership Function: Managerial skill and leadership are the most important facets of
entrepreneurship. An entrepreneur must have the ability to lead and manage. He provides
direction, create work culture, and build teamwork and cohesiveness among
employees.
9. Recognition that it is a process: The characteristics commonly found in entrepreneurship is the recognition
that it is a process, very simply, is a set of ongoing decisions and actions.
Entrepreneurship is not a one-time phenomenon; it occurs over time. It involves
a series of decisions and actions from initial start-up to managing the
entrepreneurial venture.
10. Gap Filling Function: The gap
between human needs and the available products and services filled by
entrepreneurship. An entrepreneur determines the needs of people and combines
resources to produce goods and services of requirements.
