Entrepreneurial Developmeny By Danish Maniyar, Danish Maniyar, Juned King [simple e reader .txt] 📗

particularly new businesses generally

 

 

assumes some accountability for the

 

in responses to identified opportunities.

 

 

inherent risks.

 

 

 

 

 

 

 

 

 

Entrepreneur is

 

 

often

 

 

Entrepreneurship ranges in scale from solo projects to

 

 

synonymous with founder.

 

major undertakings creating many job opportunities.

 

 

 

 

 

 

The person who starts and operates a

The process in which an entrepreneur starts and

business

enterprise

is

an

operates his business

enterprise is

entrepreneur.

 

 

 

entrepreneurship.

 

 

 

 

 

 

The entrepreneur is a coordinator as

 

Entrepreneurship

is

the coordination

 

 

he coordinates all the three elements

 

maintained by an entrepreneur.

 

 

 

of production i.e. land, labor and

 

 

 

 

 

 

capital.

 

 

 

 

 

 

 

 

 

 

 

The person who innovates something

 

The innovation of something new or the process of

 

 

new is an entrepreneur.

 

innovation is entrepreneurship.

 

 

 

 

 

 

 

 

 

 

He who leads an enterprise towards

The way in which an entrepreneur leads his

its vision thorough leadership,

manpower, motivates them for the achievement of

motivation is an entrepreneur.

the firms goal is entrepreneurship.

 

 

 

 

 

He who bears risk of the firm for

 

The risk bearing practice that is

 

 

 

the sake of making a reasonable

 

done

byan entrepreneur

is

 

 

 

 

 

 

 

 

 

 

Approaches to entrepreneurship:-

 

There are broadly four approaches to the study of entrepreneurship:

 

1. Sociological Approach

 



 

2. Psychological Approach

 



 

3. Political Approach

 



 

4. Composite Approach

 

 

Sociological Approach:

 

The sociological approach to the study of entrepreneurship deals with social and cultural factors responsible for the nature and growth of entrepreneurship development in a society. It attempts to understand as to why a social structure and culture facilitates or inhibits entrepreneurial development. It believes that laws of development lie in the social structure and culture of a region.

 

 

It tries to seek answer to the question, why one segment of social structure produces larger number of entrepreneurs than the other. For example, it is mainly the Samurai community that could rise to entrepreneurship during the Meiji regime in Japan. Indian entrepreneurship, from the very beginning, has been dominated by three communities: the Parsis, the Gujratis and the Marwaris. They, however, continue to dominate the business sector even today.



 Max Weber, Cocharan, Young, Hoselitz and Hagen are prominent among the scholars known for sociological interpretation of entrepreneurial development. Max Weber‘s thesis is that Protestantism, and not Catholicism, could help generate entrepreneurship and modern capitalism. Weber believed that the Hindu religion of India did not have the potential to promote

entrepreneurship.



 

The traditional social structures; the caste and the joint family which were essential attributes of the Hindu society, according to Weber, have been detrimental to the process

of entrepreneurial growth. Kapp (1963) also holds the Hindu culture and Hindu social organization responsible for slow pace of development and suggests that ―a lasting solution of the problem can be found only by a gradual but systematic transformation of India‘s social system, world view and the level of personal aspirations‖.

 

 The backward economies, according to Hoselitz, exhibit usually a lack of reliance on achievement as a norm for acquiring economic goods. Achievement-oriented behaviour is however not fully

absent but exists only in limited cases.



 

Distribution of economic goods in primitive societies and also in medieval societies has been typical example of ascriptive way of distribution pattern. The advanced societies, on the other hand, exhibit the norms of achievement-oriented behaviour. In such societies, there is system of formal education and vocational and professional training.



 

The second characteristic of underdeveloped economies is the prevalence of particularism in the distribution of economically relevant tasks among performers. Particularistic pattern of distribution has been prevalent, for example, in the traditional Indian caste system. The advanced societies have universalistic i.e., rational approach to the allocation of resources.



 

Again, it is to be emphasized that both these variables do not exist in the respective societies in their pure forms. The movement of society is seen from particularistic to universalistic system as it moves from backward to advanced economy. Sir Henry Maine has also postulated this movement with different terminology and that is from ‗status to contract‘.



 Thirdly, in the backward societies, economic activities are quite diffuse. It is so because of the fact that there is a low level of development of division of labour. Partly it is the result and, at the same time, cause of the low level of productivity. Thus, the specialization of tasks and the finer division of labour require the development of principle of specificity and rational allocation of

roles.



 

Specificity is the outcome of rational planning, the result of the combined application of the principles of universalism and achievement as the norm to economically relevant social situations. Hoselitz concludes that the analysis of social structural aspects of the different iat ion between ―advanced‖ and ―underdeveloped‖ economies leads us to conclude that we expect the former to exhibit predominantly universalistic norms in

determining the selection process for the attainment of economically relevant roles; that the roles themselves are functionally highly specific; that the predominant norms by which the selection process for those roles is regulated are based on the principle of achievement, or ―performance‖.

 

 In an underdeveloped society, on the contrary, particularism, functional diffusion and the principle of ascription predominate as regulators of social structural relations especially in its economic aspects and the orientation of actors in economically or politically influential roles is

determined predominantly by considerations of their ego.



 Entrepreneurial characteristics, such as the ability to make new combinations of factors of production, managerial skill perception of opportunity, risk-taking, inventiveness and achievement motivation are not merely a pale reflection of these antecedent conditions; they constitute an independent causal factor mediating between structural factors and consequent

economic development.



 

Modern democratic system is more conducive to the development of innovative behaviour. According to him, they are more prone to taking up entrepreneurship as a career whose existing social status has been denigrated in the course of historical change.

 

Psychological Approach:

 

We have understood by now that the entrepreneur is not a common person. He has a typical personality with creative, managerial and imaginative skill who can innovate and contribute positively to an industrial project. This kind of personality develops in a person who has strong motivation for achievement.

 

 

 David McClelland, the greatest exponent of the psychological approach to entrepreneurship, is of the view that the genesis and performance of entrepreneurs requires strong motivation for achievement. The achievement motivation, according to McClelland, is a function of child rearing

practices in a society.



 

Unlike the sociological approach which asserts that the existing social structure determines entrepreneurship and economic development, the psychological approach seeks to find out how the social structure affects the attitude of the people of a society. Areas like entrepreneurial commitments, tendency of saving and investment and business management have been usually covered by the studies carried out by psychologists.

Collins, Moore and others have examined a sub-category of business leaders. Their study of innovating entrepreneurs revealed that many of their subjects had experienced childhood poverty and disrupted family lives which stimulated strong motivations for personal achievements.



 

 John H. Kunkel questioned the validity of many psycho-dynamic concepts and principles and the unresolved controversy surrounding the role of social structure and personality in the process of

economic development. He propounds the behavioural approach as an alternative.



 

Joseph Schumpeter, the first to offer a systematic interpretation of entrepreneurship, had psychological perspective in his mind when he said that the entrepreneur possesses energy of will and mind to overcome fixed habits of thought and the capacity to withstand social opposition.

 

 

Political Approach:

 

 The political approach to entrepreneurship deals with the issues involved in relationships between entrepreneurship development and the state particularly in the context of the role of the latter in the development of entrepreneurs. The role of the government is crucial in deciding the nature

and rate of development.



 

 Rapid growth of industries and good pace of economic development largely depend on the merit of economic policies of the government. Democratic and relatively stable governments are

supposed to be conducive to economic development.



 

 Entrepreneurial supply would be greater in a state which believes in the ideology of capitalistic liberalism and provides requisite credit facility, appropriate training opportunity, technological

and scientific knowledge and adequate incentive.



 

The Government of India pursued the policy of mixed economy till the end of 80s of the 20th century which could not contribute to growth rate of 3 to 4 per cent for over 40 years of the economic regime of the country. Corruption, laziness, traditional power structure and weak governance, responsible for sluggish development, could not be removed by the state.

 Economic reforms initiated by India from 1991 with an objective to liberalize economic policies, promote individual investors and bring about structural adjustment have undoubtedly yielded

significant results.



 

Entrepreneurial growth in India had been very slow till 1990. A long span of colonial rule and the following strict and partially controlled economy and red-tapism did not allow fast entrepreneurial growth. By 1990, the number of small-scale units in the country was about 10 lakh which, due to economic reform movement, swelled up to about 35 lakh by 2005.



Political studies on entrepreneurship have revealed that the late growth of entre - preneurship in

 

Russia and France had been due to the existing political conditions in the countries. Japan‘s fast entrepreneurial growth can be attributed to the country‘s political system which peculiarly integrated the industrial and agricultural economy.

 

Composite Approach:

 

 The entrepreneurship is a complex phenomenon. None of the approaches discussed above has been able to explain the entrepreneurial dynamics fully. Due to their non-holistic nature, they

have failed to offer the precise laws of supply and success of entrepreneurship.



 

It has been observed that entrepreneurial behaviour is an outcome of the interplay of multiple social, cultural, economic, political and psychological factors. No single factor is entirely responsible for the supply of successful entrepreneurs. We, in our study of carpet manufacturers in the Bhadohi-Mirjapur belt in India, found no manufacturer entering into business on account of any single factor.



 Dwijendra Tripathi also, in his comparative study of historical roots of industrial entrepreneurship in India and Japan, has observed that the emergence, performance and perception of entrepreneurs can be understood by an integrated approach which would take into account all the possible sociological, psychological, economic and political factors contributing to the increase in

entrepreneurial behaviour.



 

The variables like business acumen, motivation for achievement, modern and progressive value orientation, minimum necessary capital, technical knowledge, adequate market and

favorable political conditions need to exist together for the development of a milieu conducive to entrepreneurial supply and industrial development.

 

 

Entrepreneurship Challenges in 21st. Century:

 

The definition of entrepreneurship has been debated among scholars, educators, researchers, and policy makers since the concept was first established in the early 1700‘s. The term

 

―entrepreneurship‖ comes from the French verb ―entreprendre‖ and the German word

 

―unternehmen‖, both means to ―undertake‖. Bygrave and Hofer in1891 defined the entrepreneurial process as ‗involving all the functions, activities, and actions associated with perceiving of opportunities and creation of organizations to pursue them‘. Joseph Schumpeter introduced the modern definition of ‗entrepreneurship‘ in 1934. According to Schumpeter, ―the carrying out of new combinations we call ‗enterprise‘,‖ and ― the individuals whose function it is to carry them out we call ‗entrepreneurs‘.‖ Schumpeter tied entrepreneurship to the creation of five basic ―new combinations‖ namely: introd uction of a new product, introduction of a ne w method of production, opening of a new market, the conquest of a new source of supply and carrying out of a new organization of industry. Peter Drucker proposed that ‗entrepreneurship‘ is a practice. What this means is that entrepreneurship is not a state of being nor is it characterized by making planes that are not acted upon. Entrepreneurship begins with action, creation of new organization. This organization may or may not become self-sustaining and in fact, may never earn significant revenues. But, when individuals create a new organization, they have entered the entrepreneurship paradigm.

 

The study of entrepreneurship has relevance today, not only because it helps entrepreneurs better fulfill their personal needs but because of the economic contribution of the new ventures. More than increasing national income by creating new jobs, entrepreneurship acts as a positive force in economic growth by serving as the bridge between innovation and market place. Although government gives great support to basic and applied research, it has ot had great success in translating the technological innovations to products or services. Although entrepreneurships offers a promise of marriage of those research capabilities and business skills that one expects from a large corporation, the results have not been spectacular. This leaves the entrepreneur, who frequently lacks both technical and business skills, to serve as the major link in the process of innovation development, and