UNIT -2

MEANING AND DEFINITION OF ENTREPRENEURSHIP

MEANING OF ENTREPRENEURSHIP

Performing the activities of an entrepreneur is called as entrepreneurship. It is a French word, which means to
undertake. In this all the available resources like innovative ideas capital labor and business intelligence is
utilized in effective manner to produce innovative products and services. It may also involve creation of new
enterprise or diversification in established enterprises due to available opportunities in the market.

Entrepreneurship is an ability of an entrepreneur to develop and establish business enterprise and perform all
the functions involved the particular activity. Just like managers perform management, entrepreneurs perform
entrepreneurship. It is a process involving different activities to set up an enterprise. It starts with discovering
of opportunities, designing a business plan, applying resources and techniques, and finally implementing the
ideas. Not
only this it also involves managing and controlling of various risks and uncertainties and turning it into a
successful business venture.
DEFINITION OF ENTREPRENEURSHIP
According to JOSEPH SCHUMPETER entrepreneurship as defined essentially consists in doing things that are
not generally gone in the ordinary course of business routine.
According to PETER F. DRUCKER entrepreneurship occurs when resources are redirected to progressive
opportunities not used to ensure administrative efficiency. He further states that entrepreneurship is not
natural. It is not creative. It is work entrepreneurship requires entrepreneurial management.

ATTITUDES OF AN ENTREPRENEUR
MEANING OF ENTREPRENEUR
An entrepreneur is a rare person who can visualize and materialize water in the desert. His foresightedness
vision motivation, persistent efforts, the ability to presume the risks involved and their outcomes, and the
thrust to achieve the desired goal, facilitate him to convert his ideas into reality the water in the deserve refers
to a scarce commodity hence an entrepreneur visualizes this needs of the need arising in near future and grabs
the opportunity or challenge before others can think about it. Entrepreneur refers to an individual

who has the ability to organize and manage a business idea or a new enterprise considering the in built risks
and consequences. They also act as leaders assuming their responsibility towards the success and failure of the
enterprise. An entrepreneur has the ability to identify the needs of consumers and the society their own
effort. They always like to give direction rather than taking directions from others. They feel comfortable with
profits or even losses arising out of their own decisions.
ATTITUDES OF AN ENTREPRENEUR
BE REFLEXIVE-RECOGNISE THE LIMITATIONS
Survival begins with the principal of need. Entrepreneur rejects others point of view on their limitations.
Having a reflective attitude helps us to recognize our incompleteness Recognizing limitations can cause pride
to deflate.

BE REGARATEFUL-RECOGNISE MISTAKES
The next attitude is regret. The principal for this attitude is brokenness. Brokenness the life is given in humility
and is open to whatever work needs to be done. People who are not broken seen to the hip pant and curt.
BE RESIGNED-RECOGNISE THE NEED TO SUBMIT

By realizing that entrepreneur are in need of being releasing that entrepreneur are in need of being reflecting
and regretful for the mistakes, they can then become resigned to the limits of their own ability. This may drive
entrepreneur to seek wise counsel. The principal of this attitude is submission. While discovering this attitude,
entrepreneur finds the need for others by submitting entrepreneur will find that everyone has good ideas and
is vital to the success of all.
BE RIGHT-RECOGNISE THE NEED TO FIND TRUTH
The fourth attitude is to meet the standard of what is right. The principal is that of yearning to seek the truth.
The opposite of yearning is apathy towards the pursuit of truth. It is the state of indifference between what is
true and false. Realize that yearning is an intense emotion. One who yearns for truth will find it. Right leads to
might and falseness leads to failure.
BE A RECIPROCATOR-RECOGNISE THAT GIVING IS ITS OWN REWARD
This attitude the first of the last four that demand action Is outward and is to become reciprocator. Reciprocity
is the principle of both giving and taking something. Entrepreneur need to learn to give without expecting
anything in return.
BE RIGHTEOUS-RECOGNISE THE OUTCOMES OF BEING RIGHT
The principle contains the aspect of having morality. As entrepreneur interacts with people on their climb the
attitudes must be consistent. Circumstances and situations ought never to change morals. The compass the
directs the heart should be never changing.
BE RECONCILED-RECOGNISE THE WORK TO BRING PEACE
The next attitude is to be reconciled seeking unity. The principle balances seeking peace in own lives, as well as
in others. Sometimes entrepreneurs resist reconciliation because entrepreneurs fear compromise. Consider
the compromise is in fact dangerous. Entrepreneurs must compromise without losing morals and values the
benefits of peace are unity among our colleagues and the acceptance of others.
BE REPROACHED-SET ASIDE YOURSELF
The final attitude is being self-reproached which is the actions of being open to preferring others to self. The
opposite is driving to gain short-term honor from other people. This drive to gain brings of oneself for the
higher purpose. All others attitudes for survival mentioned above lead up to this attitude is high self esteem
because entrepreneur willingly set themselves aside for the good of others.
QUALITIES OF ENTREPRENEURSHIP
SELF-MOTIVATION
An entrepreneur always of enjoys autonomy and rewards that are due to his since are and sustained efforts.
This ultimately leads to his self-motivation. Some entrepreneurs are also driven by passion for their work.
Sometimes some negative factors experienced in early life of a person also act as a motivation factor. Such
persons make sustained efforts to change those factors which were responsible for the negatively.
SELF-CONFIDENCE
Entrepreneur must have self-belief and be confident towards their business their product and their decisions.
This can be achieved when one knows stat is providing quality products at reasonable prices.
ETHICS AND MORALS
In the entrepreneurial life it is very necessary for an individual to determine the cause for the existence of him
and in his venture and also the prohibiting areas. Majority of the entrepreneurs ruin their future because at
times monetary attraction overshadows their ethics and morals. The goodwill of the business gets affected if
an entrepreneur ignores his own morals.
TIME MANAGEMENT
Time is money .Entrepreneur has to systematically distribute his activities and judiciously a lot time for each
activity. He should not give unreasonable long time for his leisure. Instead he should concentrate on designing
new promoting techniques dealing with prospective customers or should be learning desired business skills.
SALES
A business survives on sales only. An entrepreneur has to take necessary measure to promote sales of his
product. This may be quality advertisement, after sales service communicating skills market requirement etc.
the entrepreneur has to carefully handle these factors.
ADMINISTRATION SKILLS
Usually entrepreneurs appoint office assistant for administrative work but it is un economical for new
entrepreneurs. Therefore all entrepreneurs must possess administrative skills along with the management of
the business. They need to be capable of handling all the activities such as billing payment collection managing
receivables invoices printing etc.
FINANCIAL KNOWHOW
Basic knowledge about finance is essential for every entrepreneur. One must know to manage check-books
and invoices related to business keeping track of cheques issued, pending dues against the services or goods
supplied with schedules of receipts enables to known the cash flow and ash ready in hand. It is also important
to recognize and manage time with finance. Having sufficient knowledge of accountancy is enough to handle
finance.
VISION AND LEADERSHIP SKILLS

Focusing on vision is the important requisite for successful entrepreneurs Vision implies the status that a
particular organization wishes to achieve in future The entrepreneur would be able to share his vision with his
team and it would be assist in the development of the new venture. Through effectively communicating the
achievement of shared vision very simply.
INTERPERSONAL SKILLS
In every business entrepreneurs have to deal with different people present in the organizational hierarchy.
Therefore it is important for entrepreneurs to own interpersonal skills in order to communicate with them
effectively.
COMMUNICATION SKILLS
Generally entrepreneurs use basic means to communicate with their customer’s employee’s suppliers,
bankers, etc. This includes telephone calls, e- mails, memos, letters, meeting, seminars, etc. Thus
entrepreneurs must have good writing, speaking and listening skills, all at the same time, there are as follows,
SPEAKING SKILLS
Mostly business people communicate verbally over telephone or face-to-face. The speaking skills greatly
influence the person the entrepreneur is dealing with.

WRITING SKILLS
Entrepreneurs need to have good writing skills so as to effectively communicate with their employees,
customers and suppliers. A good writing skill leads to better understanding to thoughts and ideas readers
should be able to understand what the writer is trying to convey.
LISTENING SKILLS

One of the biggest reasons of miss-understandings between persons or a group is the lack of listening skills.
PROBLEM-SOLVING SKILLS
Entrepreneurs may also face situations where they have to make decisions on their own. Sometimes they may
have to involve employees to discuss a certain problem where brainstorming and consensus-building methods
may be appropriate to make decisions.
TECHNICAL SKILLS
The entrepreneur should have a reasonable level of technical knowledge to understand the technical terms
spoken by the staff during the discussion to enable him to understand the problem. Entrepreneurs need not
be masters in technical skills but must possess basic technical knowledge. This helps the entrepreneur to
appreciate and discuss the efforts of the technical staff.
These skills are very crucial for the successful journey of entrepreneurship.

MOTIVATION
Maslow’s Hierarchy of Needs Theory
Abraham Maslow is well renowned for proposing the Hierarchy of Needs Theory in 1943. This theory is a
classical depiction of human motivation. This theory is based on the assumption that there is a hierarchy of
five needs within each individual. The urgency of these needs varies. These five needs are as follows-
1 Physiological needs- These are the basic needs of air, water, food, clothing and shelter. In other words,
physiological needs are the needs for basic amenities of life.
2 Safety needs- Safety needs include physical, environmental and emotional safety and protection. For
instance- Job security, financial security, protection from animals, family security, health security, etc.
3 Social needs- Social needs include the need for love, affection, care, belongingness, and friendship.
4 Esteem needs- Esteem needs are of two types: internal esteem needs (self- respect, confidence,
competence, achievement and freedom) and external esteem needs (recognition, power, status, attention and
admiration).
5 Self-actualization need- This include the urge to become what you are capable of becoming/what you have
the potential to become. It includes the need for growth and self-contentment. It also includes desire for
gaining more knowledge, social- service, creativity and being aesthetic. The self- actualization needs are never
fully satiable. As an individual grows psychologically, opportunities keep cropping up to continue growing.
According to Maslow, individuals are motivated by unsatisfied needs. As each of these needs is significantly
satisfied, it drives and forces the next need to emerge.
Maslow grouped the five needs into two categories - Higher-order needs and Lower-order needs.

McClelland’s Theory of Needs (Power, Achievement, and Affiliation)

McClelland’s theory of needs is one such theory that explains this process of motivation by breaking down
what and how needs are and how they have to be approached. David McClelland was an American
Psychologist who developed his theory of needs or Achievement Theory of Motivation which revolves around
three important aspects, namely, Achievement, Power, And Affiliation.
This theory was developed in the 1960s and McClelland points out that regardless of our age, sex, race, or
culture, all of us possess one of these needs and are driven by it. This theory is also known as the Acquired
Needs as McClelland put forth that the specific needs of an individual are acquired and shaped over time
through the experiences he has had in life. Psychologist David McClelland advocated the Need theory,
also popular as Three Needs Theory. This motivational theory states that the needs for achievement, power,
and affiliation significantly influence the behavior of an individual, which is useful to understand from a
managerial context.
This theory can be considered an extension of Maslow’s hierarchy of needs. Per McClelland, every individual
has these three types of motivational needs irrespective of their demography, culture, or wealth. These
motivation types are driven by real-life experiences and the views of their ethos.
1. Need For Achievement

The need for achievement as the name itself suggests is the urge to achieve something in what you do. If you
are a lawyer it is the need to win cases and be recognized, if you are a painter it is the need to paint a famous
painting.
It is the need that drives a person to work and even struggle for the objective that he wants to achieve. People
who possess high achievement needs are people who always work to excel by particularly avoiding low reward
low-risk situations and difficult to achieve high-risk situations.

Such people avoid low-risk situations because of the lack of a real challenge and their understanding that such
achievement is not genuine. They also avoid high-risk situations because they perceive and understand it to be
more about luck and chance and not about one’s own effort. The more achievements they make the higher
their performance because of higher levels of motivation.

These people find innovative clever ways to achieve goals and consider their achievement a better reward
than financial ones. They take calculated decision and always appreciate feedback and usually works alone.
The individuals motivated by needs for achievement usually have a strong desire of setting up difficult
objectives and accomplishing them. Their preference is to work in a results-oriented work environment and
always appreciate any feedback on their work. Achievement-based individuals take calculated risks to reach
their goals and may circumvent both high-risk and low-risk situations.
They often prefer working alone. This personality type believes in a hierarchical structure derived primarily
from work-based achievements.
2. Need For Power

The need for power is the desire within a person to hold control and authority over another person and
influence and change their decision in accordance with his own needs or desires. The need to enhance their
self-esteem and reputation drives these people and they desire their views and ideas to be accepted and
implemented over the views and ideas over others.

These people are strong leaders and can be best suited to leading positions. They either belong to Personal or
Institutional power motivator groups. If they are a personal power motivator they would have the need to
control others and an institutional power motivator seeks to lead and coordinate a team towards an end.
The individuals motivated by the need for power have a desire to control and influence others. Competition
motivates them and they enjoy winning arguments. Status and recognition is something they aspire for and do
not like being on the losing side.
They are self-disciplined and expect the same from their peers and teams. They do not mind playing a zero-
sum game, where, for one person to win, another must lose and collaboration is not an option. This
motivational type is accompanied by needs for personal prestige, and better personal status.
3. Need For Affiliation
The need for affiliation is the urge of a person to have interpersonal and social relationships with others or a
particular set of people. They seek to work in groups by creating friendly and lasting relationships and have the
urge to be liked by others. They tend to like collaborating with others to competing with them and usually
avoids high-risk situations and uncertainty
The individuals motivated by the need for affiliation prefer being part of a group. They like spending their time
socializing and maintaining relationships and possess a strong desire to be loved and accepted. These
individuals stick to basics and play by the books without feeling a need to change things, primarily due to a fear
of being rejected.
People in this group tend to adhere to the norms of the culture in that workplace and typically do not change
the norms of the workplace for fear of rejection. Collaboration is the way to work for the competition remains
secondary. They are not risk seekers and are more cautious in their approach. These individuals work
effectively in roles based on social interactions, for instance, client service and other custom.
Entrepreneurial Motivation Meaning
The entrepreneurial motivation is the process that activates and motivates the entrepreneur to exert higher
level of efforts for the achievement of his/her entrepreneurial goals. In other words, the entrepreneurial
motivation refers to the forces or drive within an entrepreneur that affect the direction, intensity, and
persistence of his / her voluntary behaviour as entrepreneur. So to say, a motivational entrepreneur will be
willing to exert a particular level of effort (intensity), for a certain period of time (persistence) toward a
particular goal (direction).

Definition
Motivation is regarded as “the inner state that energizes activities and directs or channels behavior towards
the goal”.
Motivation is the process that arouses action, sustains the activity in progress and that regulates the pattern of
activity.

Nature of Motivation
The nature of motivation emerging out of above definitions can be expressed as follows:
1. Motivation is internal to man
Motivation cannot be seen because it is internal to man. It is externalized via behavior. It activates the man to
move toward his / her goal.
2. A Single motive can cause different behaviors
A person with a single desire or motive to earn prestige in the society may move towards to join politics, attain
additional education and training, join identical groups, and change his outward appearance.

3.Different motives may result in single behaviour

It is also possible that the same or single behaviour may be caused by many motives. For example, if a person
buys a car, his such behaviour may be caused by different motives such as to look attractive, be respectable,
gain acceptance from similar group of persons, differentiate the status, and so on.

4.Motives come and go

Like tides, motives can emerge and then disappear. Motives emerged at a point of time may not remain with
the same intensity at other point of time. For instance, an entrepreneur overly concerned about maximization
of profit earning during his initial age as entrepreneur may turn his concern towards other higher things like
contributing towards philanthropic activities in social health and education once he starts earning sufficient
profits.
5.Motives interact with the environment
The environment in which we live at a point of time may either trigger or suppress our motives. You probably
have experienced environment or situation when the intensity of your hunger picked up just you smelled the
odour of palatable food.

You may desire an excellent performance bagging the first position in your examination but at the same time
may also be quite sensitive to being shunned and disliked by your class mates if you really perform too well
and get too much of praise and appreciation from your teachers. Thus, what all this indicates is that human
behaviour is the result of several forces differing in both direction and intent.

Entrepreneurial Motivating Factors

Most of the researchers have classified all the factors motivating entrepreneurs into internal and external
factors as follows:
Internal Factors

These include the following factors:

Desire to do something new.
Become independent.
Achieve what one wants to have in life.
Be recognized for one’s contribution.

One’s educational background.

One’s occupational background and experience in the relevant field.
External Factors
These include:

Government assistance and support.

Availability of labour and raw material.
Encouragement from big business houses.
Promising demand for the product.
Definition of Small-Scale Enterprise
Small Scale Enterprise manufactures, offers service, and produces goods with minimal
manpower and fewer machines, i.e., they offer services on a small scale. Usually, these
industries make a one-time investment of less than Rs.10 crore on equipment and plant.
The annual turnover of these micro enterprises doesn’t cross Rs.50 crore. The one-time
investment shouldn’t exceed Rs.1 crore with an annual turnover of less than Rs.50 crore for
micro-scale industries. Like many other fortune companies or larger enterprises, small scale
enterprises or industries create numerous employment opportunities. Hence, it plays a vital
role in the nation’s economy. These micro-enterprises take support from government tax
policies and other business functionalities.
Some examples of the small scale industries include paper, toothpicks, pens, bakeries,
candles, native or local chocolates, water bottles, toys, beauty parlors, photography, leather
belts, bags, and a lot more.
Characteristics of a Small Scale Enterprises/ Industries

• Mostly, the Small Scale Enterprises are under single ownership. In rare cases, it
comprises partnership deals.
• The micro-industry owner is actively involved in the various activities of the unit
throughout the day.
• The micro-enterprises use more laborers as they use minimal technical support.
Hence, they support the nation’s employment.
• The micro-enterprises use nearby resources or readily available resources, ensuring
minimal wastage. Also, these industries meet the regional requirements as they are
confined to limited zones.
• As the micro industries run on a small scale, they can adapt any amendment in the
policies or laws. At the same time, the large business units struggle to change the
working environment based on the amendments.

Classification of Small Scale Industries

Small scale industries (SSI) are categorized and classified based on several criteria. There are
over 10 types of micro-enterprises based on goods and services.
Types of Micro and Small Scale Industries
1 Small Scale Industry Before 2006

According to the MSMED Act, micro or small-scale industries are those whose investments
are fixed and don’t exceed one crore. The micro-enterprises were solely involved in the
manufacturing, export improvements, and modernization and used a total amount of about
Rs.5 crore.
2. Ancillary Small Scale Industry

Large enterprises manufacture finished products from the tools provided by the ancillary
industries. The ancillary small-scale industries are the manufacturers for medium or large-
sized enterprises producing machinery components and other standard products. Ancillary
industries supply at least 50% of their products to other large or medium-sized businesses
or the parent unit.

3. Export Oriented Industrial Units

The export-oriented industrial unit is pretty similar to the ancillary industries. However,
these export-oriented industries export over 50% of their products to other companies.
These industrial units get accessed to various grants and bonuses from the Indian
Government.
4. Small Scale Industries Run by Women
The small-scale industries owned by women with at least a share capital of 51% are eligible
to opt for several grants from the Government like low-interest loans and other perks.

5. Village Industries
These are the industries located in the rural regions and don’t belong to the organized
sector. Also, these produce goods and services without the consumption of electricity. The
fixed investment on workers, laborers, or other equipment doesn’t exceed Rs. 50,000.
6. Micro Business Enterprises or Industries

The industries whose total expenditure or investment on equipment and plant doesn’t
exceed Rs.1 lakh are known as micro business industries.
7. Small Scale Services & Business
The small scale services and business units fixed investment doesn’t exceed Rs.10 lakh.
Some examples of this unit include beauty parlor, dry cleaning, industrial testing labs,
marketing & ads agencies, auto repairs, garages, xerox centers, photography, and many
more.
8. Tiny Industrial Units

These are small scale enterprises with a total planned expenditure of less than Rs. 25 lakh.
9. Cottage Industries
The cottage industries are also popularly known as traditional or rural industries and don’t
cover the capital investment criterion. These are classified based on the set of features as
mentioned below.
The cottage industries use private resources and employ laborers within the locality or
family.
It has less capital investment and manufactures simple products.
They use meager and native technologies.

10. Trading Units

The trading business units include small retailers.
Role in the Indian Economy
Employment

SSI’s are a major source of employment for developing countries like India. Because of the
limited technology and resource availability, they tend to use labour and manpower for
their production activities.
Total Production

These enterprises account for almost 40% of the total production of goods and services in
India. They are one of the main reasons for the growth and strengthening of the economy.
Make in India
SSI’s are the best examples for the Make in India initiative. They focus on the mission to
manufacture in India and sell the products worldwide. This also helps create more demands
from all over the world.
Export Contribution
India’s export industry majorly relies on these small industries for their growth and
development. Nearly half of the goods that are exported from India are manufactured or
produced by these industries.
Public Welfare
These industries have an opportunity to earn wealth and create employment. SSIs are also
important for the social growth and development of our country.

Seedbed for Large Scale Industries

SSI acts as the seedbed for Large Scale Industries (LSI) as it provides conducive conditions for
the development and growth of entrepreneurs. Small enterprises require low investment
and simple technology and use local resources to meet local demands through personal
contacts. Thus, it creates scope for the growth and development of LSI.
Objectives of SSI
The objectives of the small scale industries are:

• To create more employment opportunities.

• To help develop the rural and less developed regions of the economy.
• To reduce regional imbalances.
• To ensure optimum utilisation of unexploited resources of the country.
• To improve the standard of living of people.
• To ensure equal distribution of income and wealth.
• To solve the unemployment problem.
• To attain self-reliance.
• To adopt the latest technology aimed at producing better quality products at lower costs.
SSI Registration
SSI/MSME registration can be applied at any time after the unit obtains the Shop and
Establishment Act registration, company registration, or partnership firm registration. If SSI
registration is applied before production, the turnover and investment details must be
mentioned as zero in the registration application. If SSI registration is applied after the SSI
units start production, then the turnover and investment details will be automatically filled
in the registration application from the ITR of the unit

Registration of SSI
SSI registration is a registration provided by the Ministry of MSME. A business should obtain
SSI registration in order to be eligible for a number of schemes, subsidies and other
incentives provided by the Government to such SSI’s. SSI registration can be obtained online
too.
Overview of SSI Registration
SSI registration is provided by the Ministry of Micro, Small and Medium Enterprises (MSME)
through the Directorate of Industries of the State Government. The main logic behind the
SSI registration is to set up new SSI businesses in India. SSI registration helps the business to
be eligible for a number of subsidies given by the Government. We can also get SSI/MSME
registration online through Udyam Registration. Let’s look at the process of SSI/MSME
registration online:
Visit the Udaym Registration portal and click on the “For New Entrepreneurs who are not
Registered yet as MSME or those with EM-II”.

Fill in your “Aadhaar Number” and “Name of the Entrepreneur” and click on the “Validate
and Generate OTP” button.

You will receive OTP to your mobile number. Enter OPT on the PAN verification page will
open. Enter PAN details and click on the “PAN
Validate” button.

The Udyam Registration page will open. Fill in all the personal details and industry details
such as industry name, address, bank account details and some common information and
click on the “Submit and Get Final OTP” button.
With this the MSME registration is complete and a message of successful registration with a
reference number will appear. After verification of registration, the MSME Registration
Certificate is issued.
If a person wants to get registration for more than one industry then also he/she can opt for
an individual SSI registration. The documents required for the SSI registration are the
Aadhar number and PAN number. No registration fees are required for the registration.
Eligibility Criteria for SSI Registration

SSI registration can be obtained for enterprises that are considered as micro and small
enterprises under the MSME Act, 2006.
A micro enterprise is an enterprise whose investment in plant, machinery and equipment
does not exceed Rs.1 crore, and turnover does not exceed Rs.5 crore.

A small enterprise is an enterprise whose investment in plant, machinery and equipment

does not exceed Rs.10 crore, and turnover does not exceed Rs.50 crore.
Benefits of obtaining SSI Registration
There are various tax rebates offered to SSI’s.

A credit for Minimum Alternate Tax (MAT) is allowed to be carried forward for up to 15
years instead of 10 years.
There are many government tenders that are only open to the SSI.
Easy access to credit as banks and financial institutions offer many loan schemes for small
businesses.

Once registered the cost of acquiring a patent, or the cost of setting up the industry reduces
as many rebates and concessions are available.
Businesses registered as SSI are given a higher preference for government licenses and
certification.
SSIs can obtain collateral-free automatic loans for the purchase of raw materials, fulfilling
operational liabilities or restarting the business.
There are several government schemes that provide support to SSIs. These schemes are
listed below:

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) provides
institutional credit to small scale industries.
Credit Linked Capital Subsidy Scheme (CLCSS) is an extension of credit for the upgradation of
technology in SSIs.
Market Promotion and Development Scheme (MPDA) helps SSIs to set up marketing
complexes or khadi plazas to expand the marketing network of Khadi and Gram Udyog
products.

Coir Vikas Yojana (CVY) scheme envisages a wide range of activities like skill development of
artisans, mahila coir yojana, upgrading and establishing a new unit under Coir Industry
Technology Upgradation Scheme (CITUS), promoting the domestic as well as an export
market, providing of trade and industry-related functional support services, and welfare of
coir workers.
International Cooperation Scheme arranges for delegations to other countries for exploring
technology upgradation, facilitating buyer-seller meets in foreign states.
Marketing Assistance Scheme allows for arranging overseas exhibitions, campaigns and
other promotional activities.
Procurement and Marketing Support Scheme aims at improving the domestic markets and
promoting new market access.
Entrepreneurship Skill Development Programme scheme aims to develop entrepreneurial
skills in youth who are keen on setting up SSIs.

Definitions of Corporate Entrepreneurship

Corporate entrepreneurship is the process of creating new businesses within established
organizations. – Steven Kuratko (1993)

Corporate entrepreneurship is the pursuit of opportunities, the discovery and exploitation

of new ideas, and the creation of new products, services, or markets by established
organizations. – Michael T. Hannan and John Freeman (1989)

Corporate entrepreneurship is the process of creating new value through innovative

organizational activities. – James B. Quinn (1985)

Four Models of Corporate Entrepreneurship

Two measurements under the direct control of management reliably differentiate how
companies approach corporate entrepreneurship.

Each model signifies a distinct way of fostering corporate entrepreneurship. A closer look at
the models exemplifies how they help companies build corporate entrepreneurship in
dissimilar ways. Together the two dimensions produce a matrix with four dominant models:
opportunist, enabler, advocate, and producer.
Four Models of corporate entrepreneurship

01. The Opportunist Model in Corporate Entrepreneurship

All companies start as opportunists. Without any chosen organizational ownership or
resources, corporate entrepreneurship proceeds based on the determinations and
serendipity of intrepid project champions persons who toil against the odds, creating new
businesses often in spite of the business.

Zimmer has R&D organizations that assume new product development but no proper
organization or devoted resources for corporate entrepreneurship. The two then got
permission from top management, who approved the use of company resources for
idea development and experimentation.

The new medical approach mandatory innovations in training. So the company recognized
the Zimmer Institution, and by 2006 more than 6,000 doctors were being trained. There are
a dozen dissimilar types of minimally invasive surgical procedures. The resulting
improvement in patient outcomes has led to some private insurers paying a premium for
certain Zimmer procedures.

The opportunist model works fine only in trusting corporate cultures that are open to
testing and have varied social networks overdue the official hierarchy.

Consequently, the opportunist approach is unreliable for many firms. As a result of its past
achievement with slightly invasive surgical procedures; Zimmer has founded more
formal development practices for carrying new businesses to market. As such, the company
has begun to progress beyond the opportunist model.

02. The Enabler Model in Corporate Entrepreneurship

The basic premise of the enabler model is that workforces across a business will be willing to
develop new concepts if they are assumed adequate support.

In the greatest evolved styles of the enabler model, companies provide the following: clear
standards for selecting which opportunities to follow, application rules for funding, decision-
making clearness, both recruitment and retention of entrepreneurially minded employees,
and, possibly above all, active support from senior administration.

Google Inc. is the print child of the enabler model. Keval Desai, a Google program manager,
describes his company in the following way. We’re really an internal ecosystem of
entrepreneurs… sort of like the Valley ecosystem but inside one company. At Google,
employees are allowed to spend 20% of their time. For promoting their ideas to colleagues,
assembling teams, exploring concepts, and building prototypes

03. The Advocate Model in Corporate Entrepreneurship

Advocate organizations perform as evangelists and novelty experts, facilitating corporate
entrepreneurship in combination with business units. The program offers employees an
extensive range of support, everything from idea conceptualization to commercialization.

For example, it includes a four-day business creator session that helps people create and
arrange different business conceptions. After this, a team will characteristically occupy from
four to eight weeks. Developing a comprehensive business plan, with a 180-day contract
with senior administration to address key uncertainties of the future concept. Then the
team and an enabler from the Market Driven Growth program will present the plan
to business-unit management for approval.

Accomplishment within one business unit has a way of constructing interest from others,
and over time teams like those at DuPont can become acute alteration agents. As DuPont’s
Cooper reminiscences, I thought I’d spend the utmost of my time facilitating the design and
building of new companies…. Instead, I spent at least half my time supporting them.

04. The Producer Model in Corporate Entrepreneurship

A few firms such as IBM, Motorola, and Cargill follow corporate entrepreneurship. They
launch and support formal organizations with important devoted funds or active effect over
business-unit finance. As with the enabler and advocate models, an objective is to inspire
latent entrepreneurs. But the creator model also aims to defend emerging projects from
turf battles. Inspire cross-unit collaboration, build possibly troublesome businesses, and
produce paths for administrators to follow careers outside their business units.

Selecting the Right Corporate Model

Evolving from the speculator model to any of the more thoughtful forms of corporate
entrepreneurship. Characteristically starts with an order for growth and a broad, clearly
communicated vision. When a company’s vision for growth is too thin. It will likely end up
with just incremental concepts, while a broader vision helps everybody think outside the
well-known box. DuPont, for example, used the phrase beyond the molecule to describe it.
Desire to go beyond traditional bulk chemicals, adding services and knowledge to its aids.

Next, the vision is set, and a company wants to describe specific objectives. At Google, for
instance, a Web application sample might require only a few engineers. In companies with
self-managed groups of practice and skilled networks, enabler programs can quicken the
commercialization of ideas. That arises from networks of knowledge workers.

For firms that want to quicken the growth of reputable divisions, the supporter model might
be the finest option. Because of the limited resources of this model, executives must tailor
initiatives to the benefits of existing lines of business. Employees have to cooperate
intensively throughout the organization. With respect to resources, the enabler model can
usually be maintained in a much leaner manner than moreover the advocate or producer
models.

Simple procedures communicated companywide, decided by a senior team, and managed

with a limited workforce can suffice. Clearly, the devoted team and capital vital to the
producer model makes it a more resource-intensive choice. But even the advocate model
tends to require an important commitment. Although advocates function without a large
devoted funding pool. They can need substantial investments in the human capital and
practices necessary to help bring new opportunities to completion.

Organizational Structure Types

1) Hierarchical Structure
2) Matrix Structure
3) Horizontal/Flat Structure
4) Network Structure

5) Divisional Structure
1) Hierarchical Structure
The hierarchical model is the most popular organizational chart type. There are a few
models that are derived from this model.

In a hierarchical organization structure, employees are grouped with every employee

having one clear supervisor. The grouping is done based on a few factors, hence many
models are derived from this. Below are a few of those factors

• Function – employees are grouped according to the function they provide. The
below image shows a functional org chart with finance, technical, HR, and admin
groups.
 • Geography – employees are grouped based on their region. For example, in the USA
employees might be grouped according to the state. If it’s a global company the
grouping could be done according to countries.
• Product – If a company is producing multiple products or offering different services
it can be grouped according to the product or service.

This is the dominant mode of organization among large organizations. For example
Corporations, Governments, and organized religions are hierarchical organizations with
different levels of management, power or authority.

Pros:

• Helps establish a clear line of authority and reporting within the organization
• Clarifies employee roles and responsibilities
• Establishes a clear career path for employees which can in turn keep them motivated
• Allows employees to be in-depth specialists as they are more likely to have niche
positions

Cons:

• Slow decision-making due to the complicated chains of command

• A disconnect of lower-level employees from those of the top-level management
• Inconsistencies in communication due to the vertical and horizontal levels between
teams
 • Restricted information due to the very little downward flow of information to the
lower-level employees

2) Matrix Structure
In a Matrix organizational structure, the reporting relationships are set up as a grid, or
matrix, rather than in the traditional hierarchy. It is a type of organizational management in
which people with similar skills are pooled for work assignments, resulting in more than one
manager to report to (sometimes referred to as solid line and dotted line reports, in
reference to traditional business organization charts).

For example, all engineers may be in one engineering department and report to an
engineering manager. But these same engineers may be assigned to different projects and
might be reporting to those project managers as well. Therefore some engineers might have
to work with multiple managers in their job roles.

Pros:

• Helps eliminate traditional siloed communications barriers

• Improved decision-making due to the availability of two chains of command
• Allows employees to use their skills in different roles
• Better use of resources which leads to increased efficiency

Cons:

• May result in confusion regarding roles, responsibilities, and priorities

• Conflict of power between the project manager and the functional manager
• Blurred lines of accountability
• Large overhead costs due to employing several managers
3) Horizontal/Flat Structure
This is an organizational chart type mostly adopted by small companies and start-ups in
their early stage. It’s almost impossible to use this model for larger companies with many
projects and employees.

The most important thing about this structure is that many levels of middle management
are eliminated. This enables employees to make decisions quickly and independently. Thus
a well-trained workforce can be more productive by directly getting involved in the decision-
making process.

This works well for small companies because work and effort in a small company are
relatively transparent. This does not mean that employees don’t have superiors and people
to report to. Just that decision-making power is shared and employees are held accountable
for their decisions.

Pros:

• Fosters better communication and collaboration between team members

• More autonomy and responsibility to employees
• More transparency due to limited bureaucracy
• Because the chain of command is shorter, it allows for faster decision-making

Cons:

• Lack of opportunities for employee progression

• Risk of power struggles arising due to the lack of a formal system
• Employees may have a lower sense of accountability because they have one lead
• Risk of confusion because employees don’t have a clear supervisor
4) Network Structure
Network organizational structure helps visualize both internal and external relationships
between managers and top-level management. They are not only less hierarchical but are
also more decentralized and more flexible than other structures.

The idea behind the network structure is based on social networks. Its structure relies on
open communication and reliable partners; both internal and external. The network
structure is viewed as agiler than other structures because it has few tires, more control,
and a bottom flow of decision making.

Using a Network organizational structure is sometimes a disadvantage because of its

complexity. The below example of a network org chart shows the rapid communication
between entities.

Pros:

• Promotes healthy competition, innovation, and collaboration

• Allows organizations to adapt quickly to changes in their environment
• Paves way for an environment that fosters healthy competition, innovation, and
collaboration
• Smaller, streamlined teams help save costs and contribute to improved efficiency

Cons:

• Due to teams being independent and small, large-scale tasks may prove difficult to
accomplish
 • Without immediate supervision, network organizations may struggle with control
over employees
• Can create an environment where employees compete in an unhealthy manner with
each other to perform tasks
• When work is outsourced, secret information about the organization may get
breached

5) Divisional Structure
Divisional types of organizational charts have their own division which corresponds to either
products or geographies. Each division contains the necessary resources and functions
needed to support the product line and geography.

Another form of divisional org chart structure is the multi-divisional structure. It’s also
known as M-form. It’s a legit structure in which one parent company owns several
subsidiary companies, each of which uses the parent company’s brand and name.

The main advantage of the divisional structure is the independent operational flow, that
failure of one company does not threaten the existence of the others.

It’s not perfect either. There can be operational inefficiencies from separating specialized
functions. An increase in accounting taxes can be seen as another disadvantage.

Pros:

• Makes it much easier to assign responsibility for actions and results

 • Works well in markets where there is high competition as local managers can quickly
respond to changes in local conditions
• Tends to yield faster responses to local market conditions
• Helps build a culture that contributes both to higher morale and a better knowledge
of the division’s portfolio

Cons:

• Multiple divisions add more overhead costs to the organization

• When a number of functional areas are spread among many divisions, it might lead
to inefficiencies
• With skills being compartmentalized by division, it can be difficult to transfer skills or
best practices across the organization
• Since each division may have its own strategic goal, it might not always align with the
overall company strategy.