Entrepreneurship 4 Marks Question

Harland David Sanders was born September 9, 1890 in Indiana, USA. He was a businessman owning a petrol service station in Kentucky. In 1930, Sanders was operating a service station in Corby, USA and he observed that many travellers stopped at his service station wanting refreshments and food. Sanders saw and understood the problem. He knew how to cook and considered this as a business opportunity and decided to offer chicken recipe to these customers. The Colonel enjoyed making his customers happy - he was passionate about entertaining them with excellent food and superb service. This spicy chicken recipe became super hit among travellers.
This prompted him to start a restaurant which was beginning of the world famous fast food chain "KFC-Kentucky Fried Chicken”.

Following are the examples:

1. Penicillin:

• Aim: Sir Alexander Fleming, was trying to make "wonder drug” that could cure diseases. However, it wasn't until Fleming threw away his experiments that he found what he was looking for.
• Creation: Fleming found that a contaminated and discarded Petri dish, contained a mold that was dissolving all the bacteria around it. When he grew the mold by itself, he learned that it contained a powerful antibiotic, penicillin.

2. Potato Chips:

• Aim: George Crum, a chef at the Carey Moon Lake House was trying to make a plate of fried potato.
• Creation: One day, a customer repeatedly sent back the plate of potatoes for more frying and having thinner fried potatoes. In anger Crum sliced the potatoes insanely thin and fried them until they were hard as a rock. On serving it to the customer, the customer loved it and wanted more. This is how potato chips came into existence.

3. The Pacemaker:

• Aim: John Hopps, an electrical engineer was trying to use radio frequency heating to restore body temperature.
• Creation: During his experiment, he realized that if a heart stopped beating due to cooling, it could be made to beat again by artificial stimulation. This led to the creation of pacemaker.

The various external factors which give rise to risks are as follows:

1. Economic factors: These factors are the most important cause of external risks. They result from the change in the prevailing market conditions.

The changes may be in the form of:

• Change in demand for the product.
• Price fluctuations.
• Change in tastes and preferences of the consumers.
• Change in the income of the consumer.

2. Natural factors: These are the unforeseen natural calamities over which an entrepreneur has very little or no control. They result from natural calamities such as earthquakes, floods, famines, cyclones, lightening, tornadoes, etc. Such calamities may cause loss of life and property to the firm or may damage its products, e.g. the Gujarat earthquake caused irreparable damage not only to business enterprises, but also adversely affected the whole economy of the state.
3. Political factors: These factors influence the functioning of the business, both in the long, as well as, in the short-term. These factors result from political changes in a country, such as:

• Fall or change in the government.
• Communal violence or riots in the country.
• Civil war.
• Hostilities with the neighbouring countries.
• Changes in government policies and regulations.

Smart Mobility: Those devices which are mobile help in the growth of business. Smart mobility will change the way people interact. Increasingly, smart devices - portable tools that connect to the internet - have become a part of our lives. In the last quarter of 2010, sales of smart phones outpaced those of PCs for the first time, according to data from IDC. By 2014, more smart devices could be used to access the internet than traditional computers. The move to an increasingly mobile world will create new players and new opportunities for a variety of industries. We expect that new emerging market companies will be significant competitors, growing rapidly in part because a lack of legacy systems will enable them to profit more quickly from new technology as it becomes available. For example: Smartphone‘s (with internet, high definition camera).

The economic environment can create barriers for an entrepreneur because of the following reasons:

1. The capital for setting up the new venture is not accessible for the entrepreneur.
2. Non-availability of labour at reasonable cost.
3. If the labour market is unreliable and is fraught with indiscipline and selfishness, it will also become a barrier for entrepreneurship.
4. Shortfall in the availability of raw materials is the desired quality and quantity.
5. Inadequate infrastructure to transport the raw material to the factory.
6. Non-availability of easy access to the market for the finished goods.

In an entrepreneurial process, environment plays a vital role because all the opportunities exist in the environment and the entrepreneur is a part of it. A conducive environment throws up more entrepreneurs than an inhibiting environment.

An entrepreneur is known to be a person, who habitually creates and innovates to build something of value around perceived opportunities. It has been observed that ideas usually evolve through a creative process, whereby, imaginative people like the entrepreneurs innovate the ideas so created. An entrepreneur is a person who undertakes risk and tries to resolve the problems faced by the society and earn profit in this process. Entrepreneurial actions are efforts to solve problems of others. When one solves a problem, a new value is created which leads to the creation of a new profitable enterprise. It can be represented as:

As creativity is a continuous activity for the entrepreneurs they keep on disturbing markets and keeps on challenging large established businesses. Entrepreneurs always see new ways of doing things with little concern. Creativity in the entrepreneur is a mixture of ability to innovate, to take the idea and make it work in practice. Once the project is accomplished, the entrepreneur look for new venture.

Here are the different forms of social media platforms today; Google, Facebook, Twitter, smart phones, tablets and e-readers, -My Space, Orkut, Hi5, LinkedIn 3. technologies that originated in the consumer space, are now reshaping the way companies communicate and collaborate with employees, partners and customers.
There is an increasing trend towards using social media tools that allow marketers to search, track, and analyze conversation on the web about their brand or about topics of interest.
This can be useful in campaign tracking, allowing the user to measure return on investment competitor-auditing, and general public engagement. These changes will definitely lead to the creation of new forms of business enterprises which will surely change the way business will be conducted in the future scenario.

1. Penicillin

Inventor: Sir Alexander Fleming, a scientist.

What he was trying to make: Ironically, Fleming was searching for a "wonder drug" that could cure diseases. However, it wasn't until Fleming threw away his experiments that he found what he was looking for.

2. Potato Chips

Inventor: George Crum, a chef at the Carey Moon Lake House in Saratoga Springs.

What they were trying to make: A plate of fried potato.

How it was created: One day, a customer sent back his plate of potatoes many times and kept asking for them to be more fried and thinner. Crum lost his temper, sliced the potatoes insanely thin and fried them until they were hard as a rock. To the chef's surprise, the customer loved them and wanted more! And this is how potato chips came into existence.

The role can be described under the following headings:

1. Digital Revolution: The digital revolution has changed the working system.
2. the working procedure. World is now more interconnected and the technology is now going for 100% interconnectivity worldwide.
3. Consumer Choices: 'Consumers' taste and preference have undergone tremendous changes. Consumers now demand more powerful devices and applications. Business world on the other hand prefer more cost-effective technology to face the complex challenges of the business world.
4. Consequences: Satisfying the demands of consumers and the firms will lead to an explosive growth in data and analytics, intense competition and realignment of many industries.
5. Opportunities: New and emerging markets are going to create plenty of opportunities related to smart technology, and they will not be limited to for-profit enterprises.

Every society has its own cultural values, beliefs and norms. If the culture of a society is conducive to creativity, risk-taking and adventurous spirit, in such a cultural milieu entrepreneurship will get encouragement.
For example: An entrepreneur will have to keep in mind the cultural reference of the region that he/ she is going to cater to, this will enable him/ her to get a quicker acceptance in that region.

A number of institutes have been set-up, both by the government as well as private agencies to encourage entrepreneurship in the country. Some of these institutes are as follows:

1. National Institute for Entrepreneurship and Small Business Development: (NIESBUD) It is a premier organisation of Ministry of Skill Development and Entrepreneurship, engaged in training, consultancy, research, etc., in order to promote entrepreneurship.
2. Indian Institute for Entrepreneurship: (IIE) It was established in the year 1993 in Guwahati by the Ministry of Micro, Small and Medium Enterprises, as an autonomous institute, with an aim to undertake training, research and consultancy activities in small and micro enterprises, focusing on entrepreneurship development.
3. National Institute for Micro, Small and Medium Enterprises: (NIMSME) This institute is an organisation of the Ministry of Micro, Small and Medium Enterprises, formed to play a pivotal role in the promotion of small enterprises.
4. National Small Industries Corporation: (NSIC) It was set-up in 1955 with the objective of supplying machinery and equipment to small enterprises on a hire-purchase basis and assisting them in procuring government orders for various items of store.
5. Rural Entrepreneurship Development Institute: (REDI) The main purpose of REDI is to promote entrepreneurship and create self-employment avenues in rural areas.
6. Training and Development Centre: (TDC) Training and development centre in collaboration with various departments, launches training and development programmes aimed at improving certain specific sectors. Some of the training programmes conducted by it are as follows:

1. Training in use of agricultural implements and machinery.
2. Basic training of multipurpose health worker, etc.

Social Entrepreneurship: Social entrepreneurship is an attempt to draw upon business techniques to find solutions to social problems. In social entrepreneurship, the focus is not only on helping the poor and needy, but teaching them some competencies, some skills, using which, they can later improve their lives and economic conditions on a sustainable basis.
J Gregory Dees defines social entrepreneurship as, “Social entrepreneurship is which combines the passion of a social mission with an image of business like discipline, innovation and determination”.
Social Entrepreneurs: Social entrepreneurs are ambitious and persistent individuals, tackling major social issues, and offering new ideas for wide scale change. Rather than leaving societal needs to the government, social entrepreneurs find what is not working and solve the problem by changing the system and spreading the solution. They are visionaries and also realists and are ultimately concerned with the practical implementation of their vision.
Martin and Osberg define social entrepreneur as, “The social entrepreneur aims for value in the form of large-scale transformational benefit that accrues either to a significant segment of society or to society at large”.
Need for Social Entrepreneurs: In the current economic crisis, financial pressures are further worsening the existing social problems of poverty and unemployment. According to J Gregory Dees, “Social entrepreneurship is necessary to mitigate the financial repercussions among vulnerable".
With pay cuts and job losses happening all over the world, the needs of the hour are ideas, innovations, creative solutions and fresh perspectives that can cater to the changing market demands, emerging economies and a new world economic order and social entrepreneurs fulfil these needs.
So, in the light of the above discussion, it can be concluded that social entrepreneurs are needed in a society because of the below mentioned reasons:

1. They lead to employment development: The first major advantage of a social entrepreneur is that he/ she creates jobs and employment opportunities in a society.
2. They develop new goods and services: Social entrepreneurs develop an environment conducive for the growth of innovation, thereby, leading to the development of new goods and services. e.g. Brazilian social entrepreneur Veronica Khosa developed a new home based care model for AIDS patients which later changed the government's health policy.
3. They provide social capital: Social entrepreneurs provide the much needed capital for the development of society by channelising the savings of the unorganized section of society.
4. They promote equity: Social entrepreneurs promote a equitable society by addressing social issues and trying to achieve ongoing sustainable impact through their social mission.

The factors which are responsible for economic development such as land, labour, capital, material, market, etc. are equally responsible for the development of entrepreneurship. Thus, an environment, where all these factors are available to the entrepreneurs, will naturally support and promote entrepreneurship.

The development of entrepreneurship is often influenced by factors such as economic, social, cultural and political. These factors are collectively referred to as environmental factors. These factors may have both the positive as well as negative influences on the emergence and growth of entrepreneurship. The negative influence of these factors is referred to as 'environmental barriers'.The various types of environmental barriers are discussed below:

1. Economic barriers: For the development of an enterprise, an entrepreneur needs factors of production such as land, labour, capital, material, market, etc. Thus, an environment, where all these factors are easily available to the entrepreneur, will naturally support and promote entrepreneurship. On the other hand, if any of these factors are not available or are of inadequate quality and quantity, then they can become barriers to entrepreneurship.
2. Social barriers: Social factors such as caste structure, mobility of labour, customer needs, cultural heritage, respect for senior citizens, values of an individual, etc, have a far reaching impact on business. e.g. in India, attitudes have changed with respect to food and clothing as a result of industrialisation, employment of women in factories and offices, and the increased level of education. This has resulted in the growth of food processing and garment manufacturing units and is witnessing the emergence and growth of a new class of entrepreneurs who deal in readymade shirts, instant food, vending machines for tea and eatables, etc. But at the same time, these changing factors have led to the decline of the Indian handicraft industries such as khadi, pottery, etc.
3. Cultural barriers: Every society has its own cultural values, beliefs and norms. An entrepreneur will have to keep in mind the cultural reference of the region that he/ she is going to cater to, as this will enable him/her to get a quicker acceptance in that region. If, however, he/ she fails to do so, then it will definitely act as a cultural barrier.
4. Political barriers: It provides the legal framework within which business is to function. This environment is influenced by political organisations, stability at the centre, government's intervention in business, constitutional provisions, etc. The viability of business depends upon the ability with which an entrepreneur can meet the challenges arising due to the above factors. An entrepreneur's inability to deal with these factors will result in a barrier to entrepreneurship.

Social factors such as caste structure, mobility of labour, customer needs, cultural heritage, respect for senior citizens, values, etc. might have a far reaching impact on business. In India, attitudes have changed with respect to food and clothing as a result of industrialisation, employment of women in factories and offices, and the increased level of education. This has resulted in the growth of food processing and garment manufacturing units thus the emergence and growth of a new class of entrepreneurs.
For example: Readymade shirts, instant food, vending machines for tea and eatables.

Incubators help resident companies secure capital in a number of ways:

1. Connecting companies with angel investors (high-net-worth individual investors).
2. Working with companies to perfect venture capital presentations and connecting them to venture capitalists.
3. Assisting companies in applying for loans.
4. Assisting companies in accessing government agency (example NZTE, Technology NZ) business assistance grant programmes.

Political: It provides the legal framework within which business is to function. The viability of business depends upon the ability with which it can meet the challenges arising out of the political environment. This environment is influenced by political organisations, stability, government's intervention in business, constitutional provisions etc. For example: War tension between two countries can also stop the trade between these countries.

These are programs designed to support the successful development of entrepreneurial companies through an array of business support resources and services, developed and orchestrated by incubator management and offered both in the incubator and through its network of contacts. Incubators vary in the way they deliver their services, in their organizational structure, and in the types of clients they serve. It is an organization designed to accelerate the growth and success of entrepreneurial companies through an array of business support resources and services like providing physical space, capital, coaching, common services, and networking connections.

Story regarding the invention of Kellogg: In 1894, Dr John Harvey Kellogg was a superintendent of a famous hospital and health spa in Battle Creek, Michigan. His younger brother, Will Keith Kellogg was the business manager. The hospital stressed healthful living and kept its patients on a diet that eliminated caffeine, meat, alcohol and tobacco. The brothers invented many foods that were made from grains, including a coffee substitute and a type of granola, which they forced through rollers and rolled into long sheets of dough. One day, after cooking some wheat, the men were called away. When they finally returned, the wheat had become stale. They decided to force the tempered grain through the rollers anyway. Surprisingly, the grain did not come out in long sheets of dough. Instead, each wheat berry was flattened and came out as a thin flake. The brothers baked the flakes and were delighted with their new invention. They realised that they have discovered a new and delicious cereal, but they had no way of knowing that they had accidentally invented a whole new industry. Will Keith Kellogg eventually opened his own cereal business and its most famous product is still sold today. It wasn't until 1906 that Kellogg's corn flakes were made available to the general public.Values conveyed by Kellogg brothers are as follows:

1. Care and concern towards the health of people.
2. Promoting healthful living.

The personal barriers to entrepreneurship can be classified into two types:

1. Motivational: Once the venture starts functioning, the obstacles faced in the initial stages can make the entrepreneurs to lose their commitment and consequently their level of motivation dips. The entrepreneurs who lack toughness and perseverance often quit.
2. Perceptional: Certain perception barriers can hamper the progress of the entrepreneur. Lack of a clear vision and misunderstanding can result in faulty perception. If the entrepreneur demands everything to be clear and well-defined in order to develop a perception, it will lead to disappointment. As entrepreneur's world is basically disorderly and ambiguous, the people who excessively depend on order will find it a barrier to entrepreneurship.

Incubators help resident companies secure capital in a number of ways:

• Connecting companies with angel investors (high-net-worth individual investors).
• Working with companies to perfect venture capital presentations and connecting them to venture capitalists.
• Assisting companies in applying for loans.
• Assisting companies in accessing government agency (example NZTE, Technology NZ) business assistance grant programmes.

Following are the examples:

1. Bigger boats were used for carrying more fishes.
2. Installation of freezers on the big boats for storing the fishes.
3. Installation of fish tanks for providing fresh fish in the market.
4. To improve taste of the fresh fish in the tank shark were kept along with the fishes.

Yes, I agree that there are cultural barriers to entrepreneurship in our society. Every society has developed its own cultural values, if the culture of a society is conducive for creativity, risk-taking and adventurous spirit, in such a cultural milieu entrepreneurship will thrive. At the same time, if the cultural values are bound by conventionalism, status quo, rituals and strong cultural taboos, they may curb entrepreneurial spirit.
For Example:

1. In the past, some societies in India discouraged people from going abroad believing that crossing the sea was a cultural taboo.
2. Certain fields of work were considered unsuitable for people of a particular culture.
3. In rural areas, negative attitude and discrimination towards women may curb their spirit.
4. In India lack of interest and no support of in-laws and husband can be a big barrier to married women entrepreneurs.

Institutions involved in Entrepreneurship Development Program (EDP):

1. National Institute for Entrepreneurship and Small Business Development (NIESBUD).
2. Indian Institute for Entrepreneurship.
3. National Institute for Micro, Small and Medium Enterprises (NIMSME).
4. National Small Industries Corporation (NSIC).
5. Rural Entrepreneurship Development Institute (REDI).
6. Training and Development Centre (TDC). (CEI).
7. Centre for Entrepreneurship Development (CEI).
8. Small Industries Service Institutions (SISI).
9. Small Industries Development Organisation (SIDO).
10. Entrepreneurship Development Institution of India (EDII).
11. National Alliances of Young Entrepreneur (NAYE).

Following are the various schemes/ programs started by the government for the:

1. Schemes implemented by the Ministry of MSME (Micro, Small and Medium Enterprises).
2. SIDBI (Small Industries Development Bank of India) Micro Finance Programme.
3. Memorandum of Understanding (MoUs) with foreign countries.
4. MSME National Award Scheme.
5. NSIC Schemes (National Small Industries Corporation).
6. SIDBI Schemes.
7. Tax Holiday Scheme.
8. Composite Loan Scheme.
9. Industrial Estate Scheme.
10. Factoring Services.
11. Small Industry Cluster Development Programme.
12. National Equity Fund Scheme.

The political environment can work against the interest of entrepreneurs in the following ways:

1. A political environment that is characterised by instability and insecurity will discourage entrepreneurs.
2. Political policies can retard the growth of entrepreneurial ventures in a country.
3. Excessive interference in the form of controls, delays etc. from the government can discourage prospective entrepreneurs.

Various government schemes have been implemented for entrepreneurs by the government:

1. Schemes implemented by the Ministry of MSME(Micro, Small and Medium Enterprises).
2. SIDBI(Small Industries Development Bank of India) Micro Finance Programme.
3. Memorandum of Understanding (MOUs) with foreign countries.
4. MSME National Award Scheme.
5. NSIC Schemes (National Small Industries Corporation).

Perceptual: There are certain perceptual barriers that can hamper the progress of an entrepreneur. Lack of a clear vision and misunderstanding of a situation, can result in a faulty perception. Having preconceived notions and prejudices against a particular business activity will leave limited choices. For example: One should overcome the barriers of selecting a business venture according to one‘s gender. There is hardly a business left where both the genders have not explored and achieved equal success.
Motivational: Sustained motivation is an essential input in any entrepreneurial venture. Lack of motivation is a strong barrier to entrepreneurship. Many entrepreneurs start with enthusiasm, but when they face some difficulties in the execution of their plans, they lose motivation. For example: Failure of a venture.

The main objectives/ functions of the various Government schemes:

1. To provide financial assistance (long-term, medium term and short-term) to all forms of organization like sole tradership, partnership firms and joint stock company.
2. To provide financial assistance enterprises engaged in service sector.
3. To provide administrative and technical assistance for the promotion and expansion of the enterprise.

1. Social factor: Readymade garments, fast food, vending machines for tea and eatables are the result of social factors.
2. Political factor: War tension between two countries can also stop the trade between the two countries.
3. Economic factor: Unavailability of cash deters an entrepreneur from starting a new venture.
4. Cultural factor: Selling of more vegetarian food in the region comprising of vegetarians in majority.

Information Collection as new business forms: In this competitive world, in order to attract a customer, the entrepreneurs have to know the customer in detail so that they can assure that they are loyal to the company. Information which is collected, for example- age, regularity of customer to the shop, preference of purchase - all these factors enable a company to understand the taste and preference of the customer so that they can serve them better. Businesses will compete on analytics to differentiate themselves. The growing number of embedded sensors collecting information about the world, and the rise of social networks that store the data people share, will generate immense quantities of information.