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IT Entrepreneurship andSupply chain Management
BIM VII Semester
Chapter 1: Overview of Entrepreneurship
Courseware Introduction to Entrepreneurship Entrepreneurial Decision ProcessRole of Entrepreneurship in Economic
DevelopmentIntrapreneurshipEthics and Social Responsibility of
Entrepreneurship
Overview
ReferencesManagement
Information SystemManaging the digital firm
by: Laudon & LaudonManagement
Information System
by: James O’ Brien
Main Books Entrepreneurship
by: R. D. Hishrich & M. P. Peters
Supply Chain ManagementStrategy, Planing and Operation
by: Sunil Chopra & Peter Meindl
Books to Follow
ITE & SCM| Prepared by BIBHOR BARAL
The lecture slides and other learning contents provided by the teacher are reference materials. The students are encouraged to
study them in detail. These materials can be taken as starting points in the learning
journey.However, these materials should
NOT be taken as the supplementary to the text
book(s). An in-depth study of the text book(s) is mandatory.
What is Entrepreneurship?
Who is an Entrepreneur?
Earliest PeriodMiddle Ages17th Century18th Century19th & 20th Centuries
Nature & Development of Entrepreneurship
Change in Present Life Style Desirability of New Venture Formation Possibility of New Venture Formation
Entrepreneurial Decision Process
Role of Entrepreneurship in Economic Development
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
Concept of Entrepreneur (contd.)
a. Risk -Bearer: early 18th century by Richard CantillonRichard 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
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
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
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.”
Concept of Entrepreneurship
various views and ways of use of Entrepreneur:as a risk beareras an organizeras an innovator
entrepreneurship is related to:coordination, innovation and performance of the
entrepreneura system of creating new business referred to the various activities ,done for the
establishment and operation of an enterprise
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.”
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
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 materialsSo, 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 .
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.
Role of Entrepreneurship….(contd.)
1. Capital formation:- promotion of capital formation- collection and mobilization of capital- capital, prerequisite for any activities2. Employment opportunities:- generation of employment opportunities- initiation of business- reduction of the problem of unemployment- increase income and living style of people
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 facilities4. Reduce concentration of economic power:- reduction of economic power of a certain group- reduction in exploitation of people as well as other small entrepreneur
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 good6. Optimum utilization of resources:- use of available resources - brings the resources together and use and utilization of land , labor and capital
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
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.
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
Intrapreneurship (contd.)
Difference Entrepreneur Intrapreneur1. Dependency independent dependent2. Raising of raises funds funds are not
raise funds3. Risk bears the risk doesn’t fully bear4. Operation operates from within the
outside organization
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 somethingMovement from a present lifestyle to forming a new
enterprise
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 developmentMarketing
Research and development: working with technology Development of new product ideas and processes
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
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
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
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
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
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
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
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
Ethics and Social Responsibility of Entrepreneurs
Business ethics: the study of behavior and morals in a business situationNeed to take risks with own capital for different purposes
such asto 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
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)
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
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
studies2. theory-building without empirical testing
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
Questions & Discussion
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