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    Chapter 1

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    The document provides a history of the development of entrepreneurship from ancient times to the modern era. It discusses: 1) Marco Polo in the earliest period who established trade routes to Asia and divided profits with investors. 2) In the Middle Ages, entrepreneurs managed large production projects for governments but did not take risks. 3) In the 17th century, entrepreneurs contracted with governments to perform services for a fixed price, taking the risks of profits and losses. 4) The 18th century saw a differentiation between entrepreneurs who needed capital and capital providers like venture capitalists.

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    Chapter 1

    Uploaded by

    RV Entertainment
    12 views28 pages
    The document provides a history of the development of entrepreneurship from ancient times to the modern era. It discusses: 1) Marco Polo in the earliest period who established trade routes to Asia and divided profits with investors. 2) In the Middle Ages, entrepreneurs managed large production projects for governments but did not take risks. 3) In the 17th century, entrepreneurs contracted with governments to perform services for a fixed price, taking the risks of profits and losses. 4) The 18th century saw a differentiation between entrepreneurs who needed capital and capital providers like venture capitalists.

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    Chapter-1

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    The document provides a history of the development of entrepreneurship from ancient times to the modern era. It discusses: 1) Marco Polo in the earliest period who established trade routes to Asia and divided profits with investors. 2) In the Middle Ages, entrepreneurs managed large production projects for governments but did not take risks. 3) In the 17th century, entrepreneurs contracted with governments to perform services for a fixed price, taking the risks of profits and losses. 4) The 18th century saw a differentiation between entrepreneurs who needed capital and capital providers like venture capitalists.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    12 views28 pages

    Chapter 1

    Uploaded by

    RV Entertainment
    The document provides a history of the development of entrepreneurship from ancient times to the modern era. It discusses: 1) Marco Polo in the earliest period who established trade routes to Asia and divided profits with investors. 2) In the Middle Ages, entrepreneurs managed large production projects for governments but did not take risks. 3) In the 17th century, entrepreneurs contracted with governments to perform services for a fixed price, taking the risks of profits and losses. 4) The 18th century saw a differentiation between entrepreneurs who needed capital and capital providers like venture capitalists.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 28

    Development/History of Entrepreneurship

    Earliest period
    Earliest example Entrepreneur was Marco Polo who attempted
    to establish trade routes to the Far East. Concept of in-
    between.
    • What Marco Polo would do is to sign a contract with money
    person to sell goods and dividing profit 1:3
    Middle Ages
    • Entrepreneur is somebody who manages large production
    projects. In such large production projects, this individual did
    not take any risks, but merely managed the project using the
    resources provided, usually by the government of the
    country.
    • A typical entrepreneur in the Middle Ages was the cleric- the
    person in charge of great architectural works such as castles,
    17th Century
    • The concept of Risk was connected with
    entrepreneurship in 17th century, with an entrepreneur
    being a person who entered into contractual
    arrangement with government to perform a service or to
    supply stipulated products. Since the contract price was
    fixed, any resulting profit or losses were the
    entrepreneur’s.
    18th Century
    • In the 18th century person providing capital was
    differentiated from the one who needed capital. In other
    words entrepreneur were distinguished from the capital
    provider.
    • Reason for differentiation was industrialization.
    • Many new inventions were coming during that period.
    Notable inventors are Edison/ Eli Whitney. They were
    funding their project borrowing money. Both Edison and
    Whitney were entrepreneur (capital users) not provider
    (venture capitalist)
    19th and 20th century
    • In late 19th century and early 20th centuries,
    entrepreneurs were frequently not distinguished from
    managers and were viewed mostly from an economic
    perspective.
    • Entrepreneur organizes and operates an enterprise for
    personal gain. Pays current prices for the materials
    consumed in the business, for the use of land, for
    personal services he employs and for the capital he
    requires.
    • He uses his skills, ingenuity (inventiveness) in planning,
    organizing and administrating the enterprise.
    • He assumes the chances of loss or gain consequent to
    unforeseen and uncontrollable circumstances.
    • In the middle of 20th century, the notion of an
    entrepreneur as an innovator was established.
    • The function of the entrepreneur is to reform or
    revolutionize the pattern of product by exploiting an
    invention or generally an untried technological method
    of producing a new commodity or producing an old one
    in a new way, opening a new source of supply of
    materials or a new outlets for products, by organizing a
    new industry.
    Entrepreneurship refers to all those activities which are to

    be carried out by a person to establish and to run the

    business enterprises in accordance with the changing

    social, political and economic environments.

    Entrepreneurship includes activities relating to the

    anticipation of the consumers likes and dislikes, feelings


    • Entrepreneurship is the dynamic process of
    creating incremental wealth. The wealth is
    created by individuals who assume the major
    risk in terms of equity, time , and /or career
    commitment or provide value for some
    product or service.
    • The product or service may not be new or
    unique, but value must somehow be infused
    by entrepreneur by receiving and locating the
    necessary skills and resources.
    Entrepreneurial Process

    Identify and Evaluate of the opportunity


    Very difficult task.
    Alert to possibilities OR
    Establishment of mechanism that identify potential
    opportunities.
    Sources of ideas can be customers, distribution
    systems, technical people etc
    Once opportunities identified, they must be carefully
    screened and evaluated.
    • Evaluation helps to find the profitability of the
    opportunity as it compares returns against the
    resources required.
    • Opportunity must fit the personal skills and goals of
    entrepreneur.- time and effort entrepreneur is
    willing to put to make the new venture succeed.
    • Must believe on the opportunity
    • Opportunity analysis plan- method for evaluating
    of an opportunity.
    Develop a Business Plan
    • good business plan to be developed to exploit the
    opportunity.
    • Time consuming phase
    • Helps to determine the resources required, how to
    obtain those resources.
    Determine and Acquire the Resources Required
    • Resources needed to address the opportunity is
    determined
    • Appraisal of the present resources
    • Identify the critical resources
    • Care- the amount and variety of resources
    • Risk associated with insufficient or inappropriate
    resources should also be assessed.
    Manage the Enterprise
    • After resources are acquired, entrepreneur should
    make use of it according to the business plan
    previously formulated.
    • Control system
    Ethics and Social Responsibility of Entrepreneur

    • Enterprise earn profits for survival, for bearing risks


    and prestige of management.
    • Profit can’t be sole objective of the management.
    • Entrepreneurs tend to depend on their personal
    value much more than other managers when
    determining their ethically appropriate course of
    action.
    • It is important that entrepreneur create a culture
    of ethics and social responsibility because people
    want to conduct business with organization they
    trust.
    Reasons why entrepreneurs should practice business ethics

    • Customers are more confident when


    buying goods and services from an
    ethical company.
    • An ethical workplace motivates
    employee.
    • Ethical behavior also prevents legal
    problems.
    Establishing an Ethical Workplace
    • To deter unethical behavior company try to create
    transparency, or openness and accountability
    • Use social media, newspaper to enhance
    transparency.
    • Socially Responsible corporate behavior is ETHICAL
    SOURCING which means buying from suppliers who
    provide safe working conditions and respect
    workers right.
    • FAIRTRADE
    Responsibility to Individuals

    • Legal obligation to provide a safe workplace and fair


    employment policy
    • Treat customers fairly
    • Acting responsibly towards suppliers or vendors
    results in making the best choices of materials and
    using them.
    • Investors and creditors who provide money to start
    and run a business. They must believe in both the
    idea behind business and entrepreneur.
    Responsibility to Environment

    • An organization has a responsibility to conduct business in manner that is not


    destructive to the environment which in turns affects the populace (consumers). This
    kind of unethical business practice can have devastating effects on a company’s
    success. Take for example an exposé/disclosure that revealed in the mid-1980s that
    Burger King, in an effort to meet growing consumer demands, engaged in practices
    that led to the deforestation of an enormous portion of the Amazon rainforest to
    raise cattle for beef import. Consumers and environmentalists were in an uproar.
    Armed with scientific evidence to support the importance of rain forests on our
    ecosystem, a movement was created to boycott the corporation. As a result, Burger
    King suffered great losses reflecting a 12% decrease in revenue. This urged them to
    cancel their $35 million contract with Costa Rican beef suppliers agreeing to use US
    domestic cattle only. This demonstrated Burger King’s ability to conduct their
    business affairs more ethically (Aronoff, 2011). Burger King’s strategy embraced an
    ethical culture by finding a solution to create a business culture that displayed a
    concern for the environment as well, a tactic that helped them regain their status in
    the marketplace. In conclusion, entrepreneurs that are concerned with ethics and
    social responsibility create a foundation for success and sustainable business
    practices that consumers can trust.

    References:
    Responsibility to Community
    • Sponsorship- Business sponsors a community event
    or service in exchange for advertising.
    • Philanthropy(Generous donation of money to good
    cause)
    • Cause-related Marketing- A partnership of business
    with a non profit group for the benefit of both. It
    increases sales for the business and raises money
    and awareness for the non profit group.
    Warby Parker: Buy One Give
    One
    How entrepreneur help in economic
    development
    • Most economists agree that entrepreneurship is
    essential to the vitality/strength of any economy,
    developed or developing.
    • Entrepreneurs create new businesses, generating
    jobs for themselves and those they employ. In
    many cases, entrepreneurial activity increases
    competition and, with technological or operational
    changes, it can increase productivity as well.
    • Entrepreneurs Create New Businesses
    • Through the establishment of new businesses, results
    in employment, which can produce a cascading effect
    or virtuous circle in the economy.
    • The simulation of related businesses or sectors that
    support the new venture add to further economic
    development.
    • E.g.: Indian IT industry boomed in 1990s as a backend
    programmers’ hub. People form other sectors like call
    center operations, network maintenance companies,
    hardware providers, education and training institute
    also benefitted from the flourishing IT industry..
    • Entrepreneurs Add to National Income
    • Entrepreneurial ventures literally generate new
    wealth. Existing businesses may remain confined to
    the scope of existing markets and may hit the glass
    ceiling in terms of income. New and improved
    offerings, products or technologies from
    entrepreneurs enable new markets to be developed
    and new wealth created.
    • Additionally, the cascading effect of increased
    employment and higher earnings contribute to
    better national income in form of higher tax
    revenue and higher government spending. This
    revenue can be used by the government to invest in
    • Employment Creation
    • Create employment opportunity to self and others.
    • Unemployment decreases.
    • In the United States, for example, small businesses
    provide approximately 75 percent of the net new
    jobs added to the American economy each year.
    The small businesses in the United States are often
    ones created by self-employed entrepreneurs.
    • Balanced Regional Development

    • Operate business in different parts of the country


    based on the availability of resources.
    • Helps to achieve objectives of balanced regional
    development.
    • Regional disparity
    • Reducing rural-urban migration
    • Eventually rising the living standard of the people.
    • Promotes Foreign Trade
    • FT- regarded as engine of development.
    • Produces new products and services and hence
    increase foreign trade.
    • Helps in improving balance of payment by bringing
    in foreign currency.
    • Optimum utilization of resources
    • Helps in optimum utilization of natural resources
    like land, labor and capital.
    • Increases the production and productivity of the
    country.
    • In turn increases the rate of economic growth.
    • Reduction of the Poverty
    • According to Professor Reuben Abraham,
    “Entrepreneurship is key to escaping poverty”.
    (CNN, January 23, 2012)
    • China since 1970 lifted 600 million people out of
    absolute poverty.
    • S. Korea per capita income- $291 (1970) to $20000
    in 2012.
    • Brazil
    • India
    Problems of Entrepreneurship in Nepal
    • Political instability
    • Banking system- high credit processing costs,
    neglect the small industries to provide loans, collateral (no
    sufficient assets for collateral)
    • Lack of low-cost appropriate technology is not available to
    the small business entrepreneur to promote cottage and
    small enterprises.
    • May need amendment of Nepal Industrial Enterprise act
    1992
    • Maintaining online presence
    • Social media management tool
    • Getting and retaining customers
    • Money management

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