Unit 1: Understanding the entrepreneur
Entrepreneurship Development and Project Management notes · PTU syllabus (MBA 207-18)
On this page
- Unit summary
- Concept of entrepreneur and entrepreneurship
- Characteristics and types of entrepreneurs
- Entrepreneur vs manager; entrepreneurship vs intrapreneurship
- Entrepreneurial mindset, readiness, myths and realities
- Myths and realities
- Women, rural and social entrepreneurship
- Entrepreneurial support systems and the role of government
- Key terms
- Quick revision
- Important questions
Unit summary
Entrepreneurs turn ideas into enterprises and drive economic growth. This unit covers the concept, characteristics and functions of an entrepreneur, entrepreneur vs manager, types of entrepreneurs, the entrepreneurial mindset, myths and realities, entrepreneurship vs intrapreneurship, women, rural and social entrepreneurship, and entrepreneurial support systems including the government's role.
After this unit you can
- Explain the concept, characteristics and functions of an entrepreneur
- Distinguish entrepreneurs, managers and intrapreneurs and classify entrepreneurs
- Explain women, rural and social entrepreneurship
- Describe entrepreneurial support systems and the role of government
PTU syllabus topics
- Concept
- characteristics and functions of an entrepreneur
- entrepreneur vs manager
- types of entrepreneurs
- entrepreneurial mindset and readiness
- myths and realities
- entrepreneurship vs intrapreneurship
- women entrepreneurs
- rural and social entrepreneurship
- entrepreneurial support systems and government's role
Entrepreneur
Yes, personally
Independence and opportunity
Manager
No
Salary, efficiency
Intrapreneur
Partly, inside a firm
Innovation within the organisation
Topic 1
Concept of entrepreneur and entrepreneurship
Entrepreneurship is the process of creating something new with value by devoting time and effort, assuming financial, psychological and social risks, and receiving monetary rewards and personal satisfaction (Hisrich).
Innovation theory
Joseph Schumpeter
Entrepreneurs innovate: new products, methods, markets, sources, organisation
Need for achievement
David McClelland
A high need for achievement drives entrepreneurship
Risk-bearing theory
Richard Cantillon, Frank Knight
Entrepreneurs bear uncertainty and earn profit for it
Sociological theory
Max Weber and others
Values, religion and social structure shape entrepreneurship
Topic 2
Characteristics and types of entrepreneurs
Traits: need for achievement, risk-taking, innovativeness, self-confidence, persistence, leadership, vision and decision-making. Motivation: independence, wealth, recognition, achievement, family tradition, and sometimes necessity (unemployment).
Innovative
Introduce new ideas
Imitative
Copy and adapt successful ideas
Fabian
Cautious, change only when forced
Drone
Resist change
Others
Social, women, rural, technopreneur, intrapreneur
Functions of an entrepreneur
- Innovation (Schumpeter), risk-bearing (Cantillon, Knight), organising factors of production (Say), decision-making, management and control, perceiving opportunities, mobilising resources, and creating employment.
Topic 3
Entrepreneur vs manager; entrepreneurship vs intrapreneurship
Motive
Start and grow a venture
Run an existing organisation
Status
Owner
Employee
Risk
Bears risk and uncertainty
No personal financial risk
Reward
Profit (uncertain)
Salary (fixed)
Focus
Innovation, opportunity
Efficiency, control
Works
Independently
Inside an existing organisation
Resources
Raises own
Uses the company's
Risk
Personal
Borne by the organisation
Example
Founder of a start-up
Employee who led Gmail at Google; Tata Nano project team
Topic 4
Entrepreneurial mindset, readiness, myths and realities
- Mindset: opportunity orientation, comfort with uncertainty, resilience and learning from failure, customer focus, bias for action, resourcefulness (effectuation — Sarasvathy).
- Readiness: skills, finances, family support, risk appetite, network, health.
Topic 5
Myths and realities
| Myth | Reality |
|---|---|
| Entrepreneurs are born, not made | Entrepreneurial skills can be learned |
| You need a lot of money to start | Many start small with bootstrapping |
| Entrepreneurs are reckless gamblers | They take calculated risks |
| It's all about luck | Preparation, persistence and planning matter most |
| Only young people start businesses | Entrepreneurs come from all age groups |
Topic 6
Women, rural and social entrepreneurship
- Women entrepreneurs: businesses owned and controlled by women (at least 51% stake); challenges — access to finance, family responsibilities, mobility, networks, social attitudes; support — Stand-Up India, Mudra (Mahila Udyam), Annapurna, TREAD, WEP (NITI Aayog), SHGs; examples — Kiran Mazumdar-Shaw (Biocon), Falguni Nayar (Nykaa).
- Rural entrepreneurship: enterprises in rural areas using local resources — agro-processing, handicrafts, dairy, rural tourism; reduces migration; supported by KVIC, PMEGP, DAY-NRLM, One District One Product.
- Social entrepreneurship: ventures that address social problems with innovative, sustainable models — Amul (cooperative), SELF (solar), Goonj, Aravind Eye Care; measure success by social impact as well as financial sustainability.
Topic 7
Entrepreneurial support systems and the role of government
| Agency | Role |
|---|---|
| SIDBI | Main financial institution for MSMEs |
| NSIC | Raw materials, marketing support, credit facilitation |
| EDII, NIESBUD, NIMSME | Entrepreneurship training and research |
| KVIC | Village industries promotion |
| NABARD | Rural and agricultural enterprises |
A business incubator nurtures start-ups with space, mentoring, networks and services (Atal Incubation Centres, institutional incubators). Startup India (2016) offers DPIIT recognition, tax exemptions, easier compliance, the Fund of Funds and the Seed Fund Scheme.
Key terms
- Entrepreneur
- Person who identifies opportunities and organises resources to create a venture
- Intrapreneur
- Employee who acts like an entrepreneur within an organisation
- Effectuation
- Entrepreneurial approach starting with available means
- Social entrepreneur
- Entrepreneur pursuing social impact through enterprise
- Incubator
- Organisation supporting early-stage start-ups
Quick revision
- Functions: innovation, risk-bearing, organising, decision-making.
- Entrepreneur vs manager vs intrapreneur.
- Mindset, readiness, myths and realities.
- Women, rural and social entrepreneurship.
- Support: EDIs, SIDBI, NSIC, incubators, Startup India, state policies.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.Define an entrepreneur.
- Q2.Distinguish an entrepreneur and a manager.
- Q3.What is intrapreneurship?
- Q4.State two challenges faced by women entrepreneurs.
- Q5.What is social entrepreneurship?
- Q6.Name two government support schemes for entrepreneurs.
Long-answer questions
- Q1.Explain the concept, characteristics and functions of an entrepreneur.
- Q2.Distinguish entrepreneurship and intrapreneurship and explain types of entrepreneurs.
- Q3.Discuss women, rural and social entrepreneurship in India.
- Q4.Explain the entrepreneurial support system and the role of government.
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