PROCESS EXAMPLE: TATA MOTORS

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1 DHU-501: INDUSTRIAL MANAGEMENT AND ENTREPRENEURSIP DEVELOPMENT ENTREPRENEURSHIP Introduction: - Difference between managers and entrepreneurs, functions of an entrepreneur, types of an entrepreneur, and qualities in an Entrepreneur. Entrepreneur The word Entrepreneur is derived from French verb Entreprendre. It means to undertake. 4 key elements of Entrepreneur: 1. Innovation: The process of translating an idea into a good or service that creates value or for which customers will pay. Innovation is the act or process of introducing new ideas, devices, or methods. 2. Risk-Taking: The act or fact of doing something that involves danger or risk in order to achieve a goal. Starting a business always involves some risk-taking. This might create an opportunity or can even cause loss. 3. Vision: A description of what an organization would like to achieve or accomplish in the long-term future. i.e., years. It is intended to serves as a clear guide for choosing current and future courses of action. 4. Organising Skill: The ability to use your time, energy, resources, etc. in an effective way so that you achieve the things you want to achieve. Self-discipline and organizational skills are crucial to success in any profession. According to Peter.F.Drucker An entrepreneur is the one who always searches for change, respond to it and exploits (make use of) it as an opportunity. ENTREPRENEURSHIP: Entrepreneurship is a process undertaken by an entrepreneur to satisfy his business interests. Concept of Entrepreneurship: ENTREPRENEUR PERSON EXAMPLE: RATAN TATA ENTREPRENEURSHIP PROCESS EXAMPLE: TATA MOTORS ENTERPRISE OBJECT EXAMPLE: NANO

2 TYPES OF ENTREPRENEURS: 1. Business Entrepreneur: Business entrepreneurs are individuals who conceive an idea for a new product or service and then create a business to convert their idea into reality. They may setup a big business or a small business unit. They are called small business entrepreneur when found in small business units such as printing press, readymade garments, advertising agency etc. 2. Trading Entrepreneur: Trading entrepreneur is the one who undertakes trading activities and is not concerned with manufacturing work. He identify potential markets, creates demand and interest for his product among buyers. They have the ability in pushing many ideas ahead to promote their business. 3. Industrial Entrepreneur: These entrepreneurs are essentially manufacturer who identifies the potential needs of customers and designs a product or service to meet the market needs. Industrial entrepreneur is a product-oriented person who starts in an industrial unit because of the possibility of making some new product. These type of entrepreneurs are found in Electronic industry, machine tools industry etc. 4. Corporate Entrepreneur: Corporate entrepreneur is a person who shows his innovative skill in organising and managing corporate business. A corporate entrepreneur is an individual who plans, develops and manages a corporate body. He try to bring new process or update them using his innovative skills. 5. Professional Entrepreneur: Professional entrepreneur is a person who is interested in establishing a business but does not have interest in managing or operating it once it is established. He sells out the running business and starts another business. Such an entrepreneur is dynamic and he considers new ideas to develop alternative projects. 6. Pure Entrepreneur: A pure entrepreneur is an individual who is motivated by psychological & economic rewards. He undertakes an entrepreneurial activity for his personal satisfaction in work, ego or status. 7. First-Generation Entrepreneur: A first generation entrepreneur is one who starts an industrial unit by innovative skill. He is essentially an innovator, combining different technologies to produce a marketable product or service. 8. Modern Entrepreneur: A modern entrepreneur is one who undertakes those ventures which go well along with the changing demand in the market. They undertake those ventures which suit the current market needs. CHARACTERISTICS OF ENTREPRENEUR 1. Mental Ability: Mental ability consists of intelligence and creativity. An entrepreneur must be reasonably intelligent, and should have creative thinking and must be able to analyse various problems and situations inorder to deal with them. He should be able to study various situations under which various decisions have to be made.

3 2. Clear Objectives: An entrepreneur should have a clear objective as to the exact nature of goods to be produced. He should plan for the monthly, annually for the organisation. A successful entrepreneur may also have the objective to establish the product and to make profit. 3. Business Secrecy: An entrepreneur must be able to guard business secrets. Leakage of business secrets to trade competitors is a serious matter which should be carefully guarded by entrepreneur. He should make proper selection of his assistants. 4. Human Relations Ability: An entrepreneur must maintain good relations with his customers if he is to establish relations that will encourage them to continue to support his business. An entrepreneur who maintains good relations with customers, employees, suppliers, creditors and the community is much more likely to succeed in his business. 5. Communication ability: An entrepreneur should be able to communicate effectively. Good communication also means that both sender and receiver understand each other. An entrepreneur who can effectively communicate with customers, suppliers, employees are more likely to success than who do not. 6. Technical Knowledge: An entrepreneur must have a reasonable level of technical knowledge. Technical knowledge is the knowledge to understand a particular subject, art or craft or its techniques. Technical knowledge is the one ability that most people are able to acquire if they try hard enough. QUALITIES OF ENTREPRENEUR 1. VISION: A description of what an organization would like to achieve or accomplish in the long-term future. i.e., years. It is intended to serves as a clear guide for choosing current and future courses of action. 2. INNOVATION: The process of translating an idea into a good or service that creates value or for which customers will pay. Innovation is the act or process of introducing new ideas, devices, or methods. 3. ORGANISING: The ability to use your time, energy, resources, etc. in an effective way so that you achieve the things you want to achieve. Self-discipline and organizational skills are crucial to success in any profession. 4. MOTIVATION: Internal and external factors that create need and energy in people to be continually interested and committed to a job, role or subject, or to make an effort to attain a goal. Motivation is a reason or reasons for acting or behaving in a particular way. 5. RISK-TAKING: The act or fact of doing something that involves danger or risk in order to achieve a goal. Starting a business always involves some risk-taking. This might create an opportunity or can even cause loss. 6. ADAPTABILITY: Ability of an organisation to modify itself or its responses to the changed circumstances or environment. Adaptability shows the ability to learn from experience, and improves the fitness of the learner as a competitor.

4 7. DETERMINATION: The power or ability to make a decision for oneself without influence from outside. Freedom to live as one chooses, or to act or decide without consulting others. Determination is a fixed goal or resolution. 8. SELF-CONFIDENCE: A feeling of trust in one's abilities, qualities, and judgement. It is believing in oneself that he/she can achieve that particular objectives. 9. INTELLIGENCE: The ability to acquire and apply knowledge and skills is intelligence. An entrepreneur should hold this quality of intelligence as he should know where to apply his skills whenever required. 10. COMMITMENT: The state or quality of being dedicated to a cause, activity, etc.is commitment. An entrepreneur should have the commitment towards his objectives and goals inorder to achieve them. 11. DREAMER: An entrepreneur should dream about his future and work to fulfil them. He should plan wisely and arrange the resources required for employees and make them work to reach his dream. FUNCTIONS OF ENTREPRENEUR: RISK- TAKING BUSINESS DECISIONS RAISING FUNDS MANAGERIAL FUNCTIONS INNOVATION PLANNING 1. RISK TAKING: The entrepreneur assumes all possible risks of business which arises due to the possibility of changes in the tastes of consumers, techniques of production and new inventions. Such risks are not insurable. Thus, risk taking still remains the most important function of an entrepreneur which he tries to reduce by his initiative, skill and good judgement. 2. BUSINESS DECISIONS: The entrepreneur has to decide the nature and type of goods to be produced. He enters the particular industry which offers him the best profits. He makes

5 suitable changes in the size of business, its location, techniques of production and does everything that helps him for the development of his business. 3. MANAGERIAL FUNCTIONS: The entrepreneur performs managerial function which are a bit different from entrepreneurial functions. He formulates production plans, sees to finance, deals with purchase of raw materials, provides production facilities, organises sales including management. Usually in large establishments, these managerial functions are given to the paid managers. 4. INNOVATION: Innovation means Doing new things or doing of things that are already being done in a new way. It includes new process of production, introduction of new products, creation of new markets etc. It is the duty of entrepreneur that he should always find an innovative way so that he can make some profits. 5. RAISING FUNDS: It is the process of gathering money or other resources, by requesting from individuals, businesses, charitable foundations, or governmental agencies, or investors. The major sources of raising funds are: a) Self or Own savings. b) Bank Loans c) Investors or Private Financial Institutions d) Shareholders. So, the entrepreneur should find out various sources of finance and should be able to get sufficient finance for the business. 6. PLANNING: Planning is pre-determined course of action to achieve the set objectives. In other words, planning is today s prediction for tomorrow s activity. Planning appears in all aspects of business. An entrepreneur has to make decisions as to what is to be done, how it is to be done, when it is to be done, where it is to be done, by whom it is to be done and so on. The importance of planning lies in the fact that it ensures the smooth and effective completion and running of a business enterprise. Absence of planning causes confusion which, in turn, affects the smooth performance of job whatsoever it may be.

6 DIFFERENCES BETWEEN MANAGERS AND ENTREPRENEUR:

Characteristics/Traits of Entrepreneurs. Dr. M. S. Memon Dept. of Industrial Engineering and Management

Characteristics/Traits of Entrepreneurs. Dr. M. S. Memon Dept. of Industrial Engineering and Management Dr. M. S. Memon Dept. of Industrial Engineering and Management Several research studies have been carried out to identify the characteristics/traits of a true entrepreneur. Although there are no specific,