Entrepreneurship Short Answer Type Questions
Explain the term entrepreneurship. Bring out of the characteristics of entrepreneurship.
The capacity and willingness to develop, organize and manage a business venture along with any of its risks in order to make a profit is called entrepreneurship.
The characteristics of entrepreneurship are as follows:
(1) Innovation: Innovation involves problem solving and the entrepreneur is a problem solver. According to Schumpeter entrepreneurship is a creative activity. An entrepreneur is basically an innovator who introduces something new in the economy.
(2) High Achievement: People having high need for achievement are more likely to succeed as entrepreneurs. Various studies on psychological roots of entrepreneurship reveal the presence of high achievement among successful entrepreneurs.
(3) Managerial Skill and Leadership: A person who is to become an industrial entrepreneur must have more than the drive to earn profit. He must have the ability to lead and manage.
(4) Organization Building: Organization building ability is the most critical skill required for industrial development. This skill means the ability to ‘multiply oneself’ by effectively delegating responsibility to others.
(5) Gap Filling Function: The most significant feature of entrepreneurship is gap filling. It is the job of the entrepreneur to fill the gap or to makeup the deficiencies which always exist in the knowledge above the production function.
(6) Goal-orientated: Entrepreneurs are all about setting goals and putting their efforts in achieving them; the are determined to make their business succeed and will remove any burdens that may stand in their way.
Explain the meaning and importance of the term “Entrepreneur”.
A person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk is called entrepreneur.
The importance of entrepreneur is as follows:
- Catalyst of development.
- Enhances economic growth.
- Initiate action towards achieving goals.
- Stimulator of social economic change.
- Creates employment opportunities.
- Introduces innovative technology.
- Enhances quality standards.
- Enhances living standards.
- Enhanced productivity.
- Optimum use of local resources.
Distinguish between entrepreneur and enterprise.
|1. Entrepreneur refers to a person||1. Enterprise refers to a process|
|2. Entrepreneur is a visualiser||2. Enterprise considers to the vision statement.|
|3. Entrepreneur is a creator||3. Enterprise is a creation process.|
|4. Entrepreneur is a organiser.||4. Enterprise is a organisation|
|5. Entrepreneur is a innovator||5. Enterprise is a innovation process|
|6. Entrepreneur is a technician||6. Enterprise implement the technology through the technician|
|7. Entrepreneur is a decision maker.||7. Enterprise takes decision through entrepreneur.|
|8. Entrepreneur is a planner||8. Planning is a function of enterprise|
|9. Entrepreneur is a leader||9. Enterprise need leadership process through the leader|
|10. Entrepreneur is a administrator.||10. Enterprises is a administration process.|
Compare and contrast between private company and public company.
Difference between private company and public company are:
|Private Company||Public Company|
|1. A Private Ltd. the company is one that is not listed on a stock exchange and is held privately by the members.||1. The public company refers to a company that is listed on a recognized stock exchange and traded publicly.|
|2. As against this, the private company can be started with minimum two members.||2. There must be at least seven members to start a public company.|
|3. A private company can have a maximum of 200 members, subject to certain conditions.||3. There is no ceiling on the maxi mum number of members in a public company.|
|4. Private Ltd. company can have a minimum of two directors.||4. A public company should have at least three directors.|
|5. There is no compulsion in the case of a private company.||5. It is compulsory to call a statutory general meeting of members, in the case of a public company.|
|6. In the case of Private Ltd. Company, that number is 2.||6. In a Public Ltd. Company, there must be at least five members, personally present at the Annual General Meeting (AGM) for constituting the requisite quorum.|
|7. The issue of prospectus/ statement instead of the prospectus is not mandatory in case of the private company.||7. The issue of prospectus/statement instead of the prospectus is mandatory in case of a public company|
|8. A private company can start its business just after receiving a certificate of incorporation.||8. To start a business, the public company needs a certificate of commencement of business after it is incorporated.|
Explain the functions of an entrepreneur.
The functions of an entrepreneur are classified into five broad categories:
(1) Risk-bearing function: Risk bearing or uncertainty bearing still remains the most important function of an entrepreneur which he tries to minimize by his initiative, skill and good judgment.
(2) Organizational Function: The organizational function includes the following:
- Various factors of production.
- Ensures continuing management.
(3) Innovative Function: The basic function of an entrepreneur performs is to innovate new products, services, ideas and information’s for the enterprise. As an innovator, the entrepreneur foresees the potentially profitable opportunity and tries to exploit it. He is always involved in the process of doing new things.
(4) Managerial Function: The managerial function includes the following:
- Determination of business objectives.
- Formulation of production plans.
- Product analysis.
- Market research.
- Organization of sales procuring machine and material.
- Recruitment of men and undertaking.
(5) Decision Making Function:
The decision making function includes the following:
- Determines the business objectives suitable for the enterprise.
- Develops an organization and creates cordial atmosphere.
- Securing adequate financial resources for the organization.
- Development of a market for products.
Discuss various roles of Entrepreneur for Economic Development.
The various roles of Entrepreneur for economic development are as follows:
a. Promotes capital formation: Entrepreneurs promote capital formation by mobilising the idle savings of public. They employ their own as well as borrowed resources for setting up their enterprises.
b. Helps in creation of wealth: Through formation of capital and creation in employment opportunities entrepreneurs add value and create wealth.
c. Creates large scale employment opportunities: Entrepreneurs provide immediate large-scale employment to the unemployed. With the setting up of more and more units by entrepreneurs, both on small and large-scale numerous job opportunities are created for others.
d. Promotes balanced regional development: Entrepreneurs help to remove regional disparities through setting up of industries in less developed and backward areas.
e. Reduce concentration of economic power: By setting up business enterprises and mobilization of wealth in the less developed regions, entrepreneurs reduce the concentration of power among just the big industrialists.
f. Increases gross national product and Per capita Income: They explore and exploit opportunities, encourage effective resource mobilisation of capital and skill, bring in new products and services and develops markets for growth of the economy. In this way, they help increasing gross national product as well as per capita income of the people in a country.
g. Improvement in Standard of living: Entrepreneurs play a key role in increasing the standard of living of the people by adopting latest innovations in the production of wide variety of goods and services in large scale that too at a lower cost.
h. Promote Country’s export trade: Entrepreneurs help in promoting a country’s export-trade, which is an important ingredient of economic development. They produce goods and services in large scale for the purpose earning huge amount of foreign exchange from export in order to combat the import dues requirement.
State the characteristic features or qualities of an Entrepreneur.
The characteristic features which make up a successful entrepreneur are as follows:
(i) Mental ability: It consists of intelligence and creative thinking. An entrepreneur must be reasonably intelligent, and should have creative thinking and must be able to engage in the analysis of various problems and situations in order to deal with them.
(ii) Clarity of objectives: An .entrepreneur should be clear as to the exact nature of the goods to be produced and subsidiary activities to be undertaken.
(iii) Achievement Motivation: This is the most important characteristic of an entrepreneur since all other characteristics emanate from this motivation. He must have a strong desire to achieve business goals.
(iv) 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 patronise his business.
(v) Prudence: A successful entrepreneur must be prudent in all his dealings. He should have the ability to work out the details of the venture from all angles, assess the favourable factors and pitfalls and take suitable measures to overcome the pitfalls.
(vi) Risk taking: An entrepreneur is not a gambler and hence he should not assume high risks. However, he must love a moderate risk situations, high enough to be exciting, but with a fairly reasonable chance to win.
(vii) Secrecy Maintenance: A successful entrepreneur must be capable of maintaining and guarding all his business secrets. Leakage of business secrets to trade competitors will definitely lead to the downfall of his business. Hence, he should be very careful in selecting his subordinates.
(viii) Communication skill: Good communication skill enables them to put their points across effectively and with clarity and thereby helps them to win customers.
(ix) Keen Foresight: An entrepreneur must have keen foresight to predict the future business environment. He should have the capacity to visualise the likely changes to take place in the market, customer attitude, technological developments, government’s policy etc. and take timely actions accordingly.
(x) Innovativeness: The entrepreneurs should initiate research and innovative activities to produce new goods and services. It is a never ending process.
What are the barriers to entrepreneurship?
The barriers to entrepreneurship are as follows:
- Lack of viable concept.
- Lack of market knowledge.
- Lack of technical skills.
- Lack of seed capital.
- Lack of business knowhow.
- Complacency- lack of motivation.
- Social stigma.
- Time presences and distractions.
- Legal constraints and regulations.
- Monopoly and protectionism,
- Inhibitions due to. patents.
Why is the growth of entrepreneurship slow in India?
There are various reasons for slow growth of entrepreneurs in India. These can be divided into internal and external reasons as follows:
- Social system and social set-up.
- Customs and traditions.
- Faulty planning.
- Poor Project Implementation.
- Non availability of skilled labour.
- Lack of vision and strategies.
- Lack of motivation.
- Lack of Basic Infrastructure.
- Non availability of capital.
- Non availability of raw material and finished goods.
- Government policies, regulations, and taxation.
- Administrative hurdles.
- Rampant corruption.
- Competitive & volatile environment.
Distinguish between “Entrepreneur” and “Manager”.
|Basis of differences||Entrepreneur||Manager|
|Motivation level||1. The entrepreneur is a person who is motivated to satisfy a high need for achievement in innovative and creative activities. An entrepreneur is the owner of the enterprise which he establishes by himself.||1. A manager acts in the capacity of a servant in the enterprise. The primary motives of a manager being promotion and traditional corporate rewards. They are power motivated.|
|Reward||2. The reward for an entrepreneur is profit which is highly uncertain.||2. The reward for a manager is salary and his salary is certain and fixed.|
|Risk bearing||3. As a owner, the entrepreneur has to bear all risks and uncertainties involved in running the business.||3. As a servant, the manager need not bear any risk involved in the enterprise.|
|Functions||4. An entrepreneur has to perform many functions in order to run the enterprise successfully.||4. A manager renders only the managerial services in an enterprise.|
|Role||5. An entrepreneur mainly acts as an innovator and prepares plans for execution.||5. A manager mainly acts as an executor of plans pre prepared by the entrepreneur.|
|Objectives||6. The entrepreneur differs from the professional manager. He undertakes a venture for his personal gratification.||6. A Manager undertakes a venture as a duty towards job.|
Write a short note on women entrepreneurs.
Women entrepreneurs are the woman or group of women who initiate, organise and operate a business enterprise. The Government of India has defined women entrepreneur as ” an enterprise owned and controlled by a woman having a minimum financial interest of 51% of capital and giving atleast 51% of the employment generated in the enterprise to women.”
The women entrepreneurs in India can be classified into 3 categories:
(i) Women with adequate education and professional qualification: Majority of these entrepreneurs live in cities and are engaged in medium and large industrial units and non-traditional establishments like electronics, engineering and services.
(ii) Middle class women: These women are engaged in handicrafts and cottage industries and produce low value added items such as knitting, garments, dolls and toy-making etc.
(iii) The third category of women are those who are forced to take up business enterprise because of financial difficulties and family circumstances. They are mostly illiterate, financially weak and are engaged in family business such as horticulture, fisheries etc.
Explain any five strategies for the development of women entrepreneur.
The five strategies for the development of women entrepreneur are as
1) Training: The training to be extended to women community that enables them to understand the production process and production management. The training on professional competence and leadership skill to be extended to women entrepreneurs.
2) Working capital assistance: The financial institutions should provide more working capital assistance both for small scale ventures and large scale ventures.
3) Support from NGO’s: Involvement of Non-governmental Organizations in women entrepreneurial training programs and counseling.
4) Support from government: Better educational facilities and schemes should be extended to women folk from government part.
5) Guidance Cell: A Women Entrepreneurs Guidance Cell may be set up to handle the various problems of women entrepreneurs all over the state.
What are the problems faced by the women entrepreneurs in India? OR State the psycho-social barriers faced by women entrepreneurs.
Indian women entrepreneurs face the following problems in setting up and running business units:
1) Less Confidence: Women entrepreneurs are not confident about their strength and competence. Their family members don’t stand by their entrepreneurial growth. In recent years, though the situation is changing, yet the women have to face further change for increased entrepreneurial growth.
2) Non-Availability of Finance: They have lack of access to funds, because they do not possess any tangible asset and credit in the market. Very few women have the tangible property in hand. So, they are suffering from inadequate financial resources and working capital.
3) Socio-cultural Disturbance: Women have to manage both home and business duties at a time. Such obligations may become a great barrier for some women in succeeding as an entrepreneur.
4) Lack of Managerial Skills: It is argued that women entrepreneurs have low level of management skills. They have to depend on other persons like office staff and middle men to get things done, particularly marketing function.
5) Competition from Male Entrepreneurs: Competition from male counterparts develops hurdles to women entrepreneurs in business management process. Women entrepreneurs have to face the constraints of competition form male entrepreneurs due to less organizational skills than men.
6) Production Problem: Production in a manufacturing enterprise involves coordination of a number of activities. While some of these activities are in the control of entrepreneur, there are others over which she has little control.
7) Lack of Knowledge of Availability of Raw Materials: For running business, entrepreneur requires to have knowledge of alternative source of raw material availability and high negotiations skills. Women entrepreneurs have lack of such knowledge and skills which affect their business adventures.
8) Lack of Education and Awareness: In a country like India, the literacy rate of women is found at low level compared to male population. So, they have not sufficient knowledge of technologies; know how, etc. that affect their business ventures adversely.
9) Low Level of Risk Taking Attitude: It is normally believed that women being feminist gender have low risk taking ability. Because of this, they are suppressed by the protected environment and are not allowed most of the time to take any type of risk even if she has capacity to bear it.