The Nature and Importance of Entrepreneurs

Chapter 1
The Nature and Importance

of Entrepreneurs
BABA KALYANI (Bharat Forge)
 With sheer entrepreneurial drive, MIT-trained
engineer Baba Kalyani converted his inheritance
into a world beater.
 He worked with the family business since1972
 Spent 22 years as a plant manager
 He made 4cr. Company to 6,500 cr. Kalyani group.
 Beginning at single location in 1966, it is today
one of the largest and technologically most
advanced manufacturers of forged and machined
components today.
 It has 9 manufacturing locations in 6 countries.
 It aspires to be number one company in the world
by 2008.
 The company drives 70%of its sales from
oversees and 40% of its global workforce
are non-Indians.
 Today, they have most demanding
customers in the world like Daimler
Chrysler, Ford, GM, Volkswagen, Toyota,
Caterpillar, Iveco etc.
 Every second truck in the US has a
product from this co.
 Kalyani has boldly declared his intent to
unseat its rival ThyssenKrupp by ’08.
Farming to Forging
 ’60 his father ventured outside his farming
root to set up an industrial venture.
 First forging was produced at the Pune
factory in ’66.
 He realized low-tech and labour intensive
technology as the problem of co.
 He created excitement and provide
leadership. (50 cr. Co.)
 ’73 Kalyani Steel was set up to make alloy
steel for Bharat Forge.
Turning Point
 ’80, they expanded it to auto sector
 ’89, Kalyani made a bet-the-company
move by investing 150 cr. On doubling
capacity & acquiring a high tech
Weingarten forging press.
 By ’91, Bharat Forge had made headway
in its export drive by targeting the North
America market
 By the mid ’90, Bharat Forge’s capacity was fully
allocated to customers in India & US.
 He used to be 20 days a month on the road meeting
customers and looking at new technologies.
 Philosophy:
 Rather than finding ways to cut costs, company's engineers should
focus on superior product.
 We don’t want experienced people as they would come with previous
baggage.
 Indian manufacturers should replace muscle power with brain power
 I don’t care if market don’t grow, but we must grow
Kalyani is training his sights on non-auto sectors for
forgings like, aerospace,oil and gas. This new area
will take the group to a higher level of technology and
derisk the automotive forging business.
Development of Entrepreneurship
 Earliest Period- Marco Polo

 Middle Ages- Theater,
Architectural Works
 17th Century- Mississippi
Company
 18th Century- Edison & Whitney
 19th & 20th Centuries
 Organize/Operate
 Innovation
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Importance of Entrepreneurship
Reasons to have them:

 To capitalize new opportunities
 To create wealth & new jobs
 India needs at least 8000 new business to
achieve its target of building $87 billion IT
sector by ’08.
 Similarly, by ’15, 110-130 mi. Indian
citizens will be searching for new jobs
Why should you become an
Entrepreneur
 You will be your own boss & boss to other
people & make decision
 You will have the chance to put your ideas into
practice
 You will make money for yourself rather than for
someone else
 You may participate in every aspect of running a
business
 You will have a personal satisfaction of creating
and running a successful business
 You will be able to work in a field or area that
you really enjoy
Characteristics of Successful
Entrepreneurs
 Creativity
 Germination
 Preparation
 Incubation
 Illumination
 verification
 Innovation
 Dynamism
 Leadership
 Teambuilding
 Achievement motivation
 Problem solving
 Goal orientation
 Risk taking & decision making ability
 Commitment
Morals
Fast and steady also wins the race.

Core competency, surely, wins the
race.
Innovation and team work,
successfully win the race…any race.
Myths of Entrepreneur
 Entrepreneur are born, not made
 Entrepreneurs are academic & social misfits
 Entrepreneurs fit an ideal profile
 All you need is money to be an Entrepreneur
 All you need is luck to be an Entrepreneur
 A great idea is the only ingredient in a recipe for
success
 My best friend will be great business partner
 Having no boss is a great fun
 I’ll definitely become successful
 Life will be much simpler if I work for myself
Definitions
 Acc. to D C McClellend,” Entrepreneurship is in
a new & a better way & decision making under
the condition of uncertainty.”
 Acc. to Benjamin Higgins,” Entrepreneurship as
the function of foreseeing investment &
production opportunity, organizing an
enterprise to undertake new production
process, raising capital hiring labour, arranging
for the supply of raw materials & selecting
managers for day to day operations of the
enterprise.”
 Acc. to Peter F Drucker,” Entrepreneurship is
neither science nor an art. It has a knowledge
base. Knowledge in entrepreneurship is a
means to an ends.”
Entrepreneurial Decision
Present
Lifestyle
Catalyst
New Enterprise
Desirable
Possible
Change from present lifestyle
Often leave to form own companies

when these new ideas are not
accepted by their present employees
May start new enterprises to fill the
gap (needs)
Disruption
 Personal dislocation
 As a student not got promoted
Drivers of New
Venture Formation
Desirability Influences
 Culture/Subculture
 Family/Peers
 Teachers
Possibility Factors
 Government
 Background
 Marketing
 Role Models
 Finances
Organizations contributing in
Entrepreneurship
 Ministry of small industries
 Development commissioner Handicrafts, Ministry of textiles
 Textile Committee of India
 SIDO
 NSIC
 NISIET
 IIE
 National Institute of Entrepreneurship & Small Business Developmement
 EDII
 Institute for Entrepreneurship Development
 Centre for Entrepreneurship Development
 SIDBI
 Science & Entrepreneurship Development Parks
 NABARD
 KVIC
 Coir Board
 Technology Business Incubators
 Government of MP, AP, Gujarat , Kerala
 Grameen Development Services
 State Chamber of Commerce & Industry
Types of Startups
Lifestyle:
 Modest growth
 Limited money devoted to R & D
 Primarily to support Entrepreneurs
Foundation
 Created from R & D
 This type of start up rarely go public
 Draws interest of private investors only
High Potential
 Greatest investment interest & publicity
 Though start up like foundation co., growth is far more rapid
 Firms are also called Gazelles & are integral to the development of
an area
Entrepreneur &
Economic Development
 Product-Evolution Process
 Process for developing & commercializing an innovation
 Iterative Synthesis
 The intersection of knowledge & social need that starts the product
development process
 Innovation
 Technological - new products with significant technological
advancement
 Breakthrough – new product with significant technological
advancement
 Government – government active in commercializing in technology
 Technology Transfer – commercializing the technology in the laboratories
into new products
 Intrapreneurship vs. Entrepreneurship
Product Evolution
Need Recognition Industrial
Initiate Innovation Development
Press To Invent
Skills Required
of Entrepreneur
Business
Technical Management Personal
Writing Planning Inner Control

Oral Decision
Communication Making Risk Taking
Monitoring The Human
Environment Relations Innovative
Marketing Change-Oriented
Use Technology (Selling) Visionary
Ethics & Social Responsibility
Ethics- Behavior/Morals in
Business
Value System
 Peer Pressure
 Social Norms
 Competitors
 Individual vs. Community
Future
Entrepreneurial Education
Government- Promotion
Society’s Support
Corporate Intrapreneurship
Entrepreneurial Universities
 Structures
 Activities  Business Assistance
Centers
 Seminars  Incubators
 Innovation Centers
 Consulting  Industrial Parks
 Enterprise Development
 Research Centers
 Venture Capital Exchanges
 Case Development
 Inputs
 Technology Development  Guest Lectures
 Board of Advisors/Trustees
& Transfer  Internships
 Student Projects
 Joint Ventures &
 Source of Funds
Strategic Alliances

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Chapter 1

The Nature and Importance

 Earliest Period- Marco Polo

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Reasons to have them:

Fast and steady also wins the race.

Often leave to form own companies

Initiate Innovation Development

Writing Planning Inner Control

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