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Transcript

Hello! Friends in our previous discussions we had an understanding of the overview of Indian economy, the strategic implications of social, legal, economic and the political institutions on entrepreneurship development and the globalization and its impact on entrepreneurship development. In this class we will be understanding the “Concept of Entreprenuer”. Basically, the term entrepreneur has been derived from the French word i.e. ‘Entrepredre’ and the similar term was also available in case of German language which means “To Undertake”. The meaning of both these words are “To Undertake”. It means the person who is ready to take any new activity can be termed as an entrepreneur or in French language it is known as ‘Entrepredre’ and in German language it is spelt like this “Unternehmen”.

The connotations of the French term also include the person who is ready to be an adventurer, or who is an undertaker or who is a projector. All these meanings are leading to the elements of newness. The person who is taking a new task means he is ready to undertake or he is ready to accept a new thing. So he is called an entrepreneur. With this basic literal meaning of the term entrepreneur let us move into the concept of entrepreneur as defined by Weber in the 1930. He said that entrepreneur is a product of the particular social conditions in which they live, means the entrepreneur is influenced by the society from which he is coming from. So you can observe the societal influence on entrepreneur and it is the society which shapes the personality of an individual as an entrepreneur. May be society has provided him an opportunity or society has deprived him an opportunity. In either case there is possibility of development of entrepreneurship. Now let us take the case of first one. When the society provides him a congenial environment obviously he can shape his future in a desired manner and he develops as an entrepreneur. And in the other case were the society has deprived him it means he is accepting it as a challenge, because he is slowly become aware that society is not giving me any opportunity but the opportunity prevails in the environment I will grab that opportunity and I will develop as an entrepreneur, and he takes it as a challenge and he takes it as a risk factor and he develops the entrepreneurship among himself. So, this is how ultimately we can say that entrepreneur is a product of social conditions. One beautiful example that we can quote as how the society behaves with an individual and how individual can take it as a challenge and develop himself as a entrepreneur. It is the case of the former president of United States of America that is Abraham Lincoln, who comes from a very normal middle class family and he became the 16th president of United States of America at the age of 51 after many failures that are listed in the following finds. He started as a business man but couldn’t succeed. Then he contested the election he was defeated. There are good numbers of defeats that he has observed in his life times and ultimately he emerged as at the age of 51 the successful president of United States of America. What does it indicate and whether can we call him as an entrepreneur. Obviously he is an entrepreneur. What type of entrepreneur is he? He is a political entrepreneur. So, wherein he made consistent efforts without being complacent with the what he has already got but with these consistent efforts he could reach the highest possible position of the president. And that is what are the extreme possibilities that are available with the entrepreneur. And this is how we can say that entrepreneur is the product of social conditions from which he is coming from. Coming to next definition given by Schumpter who explains the concept of an entrepreneur as the person who destroys existing economic orders, it means the person who enters into the market with such a product or with such a service so that all the existing service are going to be we can say that it is going to be negative term if I use the term collapse because it is the most suitable term here wherein we are going to destroy or wherein we are going to collapse all the existing system and we are going to develop a new order because the idea what I have is having that particular potential of developing a new order. So, how he is doing that? He is doing that by introducing new product or new services or by creating new forms of organization or by exploiting the raw materials that are available. These are various ways means or options that are available for an entrepreneur wherein he is coming out with the new product or the new services and he is destroying the existing market and establishing a new order. The person who does all these things can be called as an entrepreneur. It regularly happens in our day to day life also but we need to observe that. So, when a company introduces a new product it has a good number of new futures it starts accepting that it means we are disturbing the existing economic orders. The traditionally product what we were purchasing from last many years so now we are easily switching over to some other product it means we are disturbing the established economic order and we are establishing a new economic order because the new product is having certain elements of innovation, is having certain elements of advantages for the individual, for the society, for the community or for the nation as a whole and that is how the new economic orders are being developed. Another example given by Encyclopedia Britannica: which says that individual response for the operation of a business; entrepreneur is the individual response for the operation of a business. This we can very well understand there is an equal opportunity of being a successful entrepreneur for each one of us. But there is one person who is responding to that opportunity that is prevailing in the environment and he takes it as a challenge and goes with it and he becomes an entrepreneur. I as a common man I was also having the equal opportunity of identifying it as an enterprise and accepting that one. It means I did not respond somebody else responded and he became an entrepreneur I remained as a common man. So that is what is the meaning of individual response for the operation of a business including the choice of product, the product may be anything. But what is my response to that one so that becomes more important. The mobilization of the necessary capital, what is the role of an entrepreneur and that decisions on the product prices and the quantities the employment of labour and expanding the reducing the productive facilities. All these are the issues associated as productive response to the opportunities that are existing and that are prevailing in the environment. With this background, so now let us make an effort to understand concept of entrepreneur in the context of agriculture. So, so far in the three definitions we try to understand the general meaning and the concept of an entrepreneur. But in the context of agriculture so there is a little bit deviation. As we have said in our previous discussions agriculture has been the part of Indian culture and till today we are under the same perception. In that context the national research and agriculture system at regular intervals providing good numbers of opportunities for the farmer to adopt a new technology. And farmers are responding to that also. As we have seen the issue of response for the opportunity in case of the definition given by encyclopedia Britannica. So, now the question remains is whether a farmer can become a entrepreneur by only adopting a new agriculture technology? The answer for this question is obviously NO. If a farmer adopts a new agriculture technology he becomes an innovative farmer or he become an early adopter or he becomes an early majority, these are the classifications what we have. But, he cannot become an entrepreneur. When he can become an entrepreneur? He becomes an entrepreneur only when he comes to be an operator of a farm business. This is where the entire process of entrepreneurship is associated with. Basically, entrepreneur is also a businessman. But in Indian context farmers have never accepted agriculture as the business operation. So this is what is the basic mind set that Indian farmer is having. The moment he starts accepting it as a business so, he translate himself to be an agricultural entrepreneur because the definition also says that the business involves the rational decisions on investment after assessing the risk, other alternatives and possibilities of profit and loss. If we ask a farmer whether he is in this particular profession for profit obviously, the answer what we are going to get is there is no profit. This is the common answer that we are going to get. But still he is into this process. Why? The answer is because he is not having any other alternatives and this particular profession is his family profession and they are practicing this particular profession over centuries and that is how he is also continuing. Neither his fore fathers nor this particular farmer is considering his profession as the farm business. The moment he accepts it as a business so, he has to have these processes. What is that? Number one he has to go for the rational decisions, he has to go for the assessment of the risks that are available and he has to go for various alternatives that are available and he has to think of profit and loss. The moment he thinks on these things he translates himself to be an entrepreneur and that is what this definition is also prevailing.

Now coming to the concept of entrepreneurship. Earlier what we were talking of entrepreneur is an individual activity. It is pertaining to a particular individual. But the concept of entrepreneurship we said that it is a process. This is where the entire meaning lies. It is the process means it is a continuous in nature. The person who accepts this as a profession he has to be in this particular activity over a period of time so that is how it becomes a process, by which the individuals either on their own or inside organizations pursues the opportunities without regard to the resources they currently control. Whatever may be the situation on a continuous basis he is into that particular profession so that is why he develops it as a process of entrepnuership?

Now let us move on to the behavior. Can this enterprise be the part of our behavior? When we say that it is a human behavior – Human behavior consists of three important components. The components of human behavior- Knowledge, Skill, Attitude and various other personality factors. Now as an entrepreneurial behavior which Singh in the year 1986 stated that the entrepreneurial behavior is a function of an individual’s personality characteristics and the environmental factors. The qualities what an individual’s has we are going to discuss in the subsequent lectures regarding the qualities of an entrepreneur which are nothing but the personality characteristics. Along with that there are good numbers of environmental factors which are being provided to an entrepreneur which makes him the successful entrepreneur. So, mathematically it can be expressed that entrepueral behavior is the function of the personality characteristics which is represented by ‘P’ and the environmental factors which is represented by ‘E’. So, the moment he starts grabbing the opportunities he becomes an entrepreneur, by making use of his own personality characteristics and fitting all these factors into one function so automatically he develops himself into an entrepreneur. With this brief background now let us move on to the functions of an entrepreneur. Though as an entrepreneur he has to determine the objectives what exactly he wanted to take up or what he is interested in. And to satisfy that objective he has to develop his own organization. So, to satisfy these objectives he needs to develop this organization. Then securing adequate financial resources this is what another entrepreneur function and technological equipment and the revision of it as new machinery appeared. Means it is not that ones he has brought new machine may be for processing or may be for providing services it is an end in itself. There needs to be constant revision of that over a period of time so that is what is the function of an entrepreneur. As there is no machinery hours as a new process come into the market he has to accept that also. Then he has to develop the market for the products that he has developed. There are good number of examples that we can find in today’s market. There are new products that are being coming into the market and they are trying to establish their own products in the market by their various means of promotion, of demonstration accepting various methodologies they are establishing their products and this is another function of an entrepreneur. Then the next issue is maintenance of the good relationship with public authorities and with society at large so that you can promote your product and these are some of the basic function of an entrepreneur.

In this class we discussed about the literal meaning of the term entrepreneur and the definitions associated with the entrepreneur, entrepreneurship and entrepreneurial behavior and at the end we discussed about the functions of an entrepreneur. And in the next class we will be discussing about the differences between the entrepreneur, the businessman, the manager and the leader.

Thank You.”>