MGT601 SME MANAGEMENT

Lesson 04 Kinds of Entrepreneurs, Their Role and Functions in an Enterprise

Chapter Learning Objectives This lecture will throw light on the:  The kinds of entrepreneurs  Their role and functions in an entrepreneurs  It also explains the hurdles they encounter

Kinds of Entrepreneurs Innovating entrepreneurs  He is the one who introduces something new into the economy or employs a new technique of production. Imitating Entrepreneur  They lap up innovations originated by the innovative entrepreneurs. They are suited to developing countries which are not able to take up expensive research.

Continued…….. Fabian Entrepreneurs  They are very cautious and skeptical in adopting and implementing any change. They are lazy and shy and lack the will to adopt new methods. They follow the old traditions and avoid risk taking. Drone Entrepreneurs  Inert and traditional, they are hurdles in economic development. They struggle to exist, not to grow.

Role of Entrepreneurship or Entrepreneur An entrepreneur is a combination of multiple skills  an idea or creative person  a manager  the originator of the new business venture  a manager who tries to improve organizational effectiveness

Continued………. Entrepreneur role consists of:  the ability to take up the factors of production.  employ them in the production of new goods ad services.  brings together the manpower, materials and capital required to meet that needs.

Introduction of Change  Initial launching i.e., original production of goods.  Subsequent expansions i.e. increase in quantity.  Factor innovation, i.e., increase in the supply or the productivity. The factors are financial, labor and material.

Increasing Productivity Entrepreneur has a role in increasing productivity. The keys to higher productivity are :  Research and development,  investment in plant and machinery and human resources,  resource allocation from areas of average to above average rate of remuneration of capital and labor,  realization of internal and external economies of scale.

Innovation  Entrepreneurship plays an important role in promoting innovative technologies, products and services.  Because entrepreneur always think about innovative and creative ideas.

Functions of Entrepreneur  Determination of the objectives of the enterprise.  Development of the organization.  Securing adequate financial resources.  Requisition of technological; equipment and its revision consonant with the technical change

Continued………  Development of market and devising new products to meet anticipated consumer demand.  Maintenance of good relations with public authorities and society at large.  Management of human relations.  Financial management.  Production management.

Barriers in the Path of Entrepreneurship Vesper has listed 12 common barriers in the path of entrepreneurship. These are:  Lack of viable concept  Lack of market knowledge

Continued…….  Lack of technical skills  Lack of seed capital  Lack of business know-how  Complacency (lack of motivation)

Continued…….  Social stigma attached to certain vocations  Job “ Lockins”, “Golden Handcuffs” or attachment with the job  Time Pressures, Distracter

Continued……  Legal constraints  Monopoly- Protectionism  Inhibitions Relating to Patents

Thanks you Happy Learning Keep Learning