Entrepreneurship and Business Management - dl4a.org

slipalaskaManagement

Nov 20, 2013 (3 years and 8 months ago)

87 views

Prof Parameshwar P Iyer
Indian Institute of Science

1

Entrepreneurship and
Business Management

Mega Bucks Workshop

Indian Institute of Technology
Kanpur

Prof Parameshwar P Iyer
Indian Institute of Science

2

What is
Entrepreneurship?

Capacity to take risks

Ability to own and organize

Desire and capability to innovate and
diversify
(Stepanek,
1962)

Prof Parameshwar P Iyer
Indian Institute of Science

3

Who is an entrepreneur?

Person conducting own business
(Webster)

Person who sets up business deals in
order to make profits
(Collins Cobuild)

Organizer of an economic venture, one
who owns, organizes, manages, and
assumes the risks of the business
(Chandrashekhar)

Prof Parameshwar P Iyer
Indian Institute of Science

4

Why entrepreneurship?

Process of creating something different,
with value, by devoting necessary time
and effort, by assuming the
accompanying financial, psychological,
and social risks, and receiving the
resulting
rewards of monetary and
personal satisfaction

(Bowen and
Hisrich, 1986).

Prof Parameshwar P Iyer
Indian Institute of Science

5

Role of the Entrepreneur

An innovator who combines technical
innovations and financial finesses.

Important role in producing competitive
products, processes, and services.

Generation of new employment

Local and regional economic development

Improved allocation of resources and transfer
of technologies

Prof Parameshwar P Iyer
Indian Institute of Science

6

Entrepreneur as an
Economic Pioneer

Introduction of new goods and products

Introduction of new processes and
methods of production

Opening up of new markets

Opening up of new sources of supply

Industrial re
-
organization

Prof Parameshwar P Iyer
Indian Institute of Science

7

Strategic Importance of
the Small
-
Scale Sector

Significant contributions to national income,
employment, and export earnings

Value of output over Rs. 5,70,000 crores

Employment of over 17.5 million (> twice the
private sector; almost as much as all public
sector employment)

Exports of over Rs. 54,000 crores (> 35 per
cent of all exports)
(2000
-
01 figures)

Prof Parameshwar P Iyer
Indian Institute of Science

8

Entrepreneurship and
Small Businesses

Entrepreneurship is especially critical in small
businesses because:

Important sources of competition for large
firms; challenge their economic power

Offer a wide range of choice to consumers

Sources of innovation and creativity

Good career opportunities to work in an
unstructured environment of a small company

Prof Parameshwar P Iyer
Indian Institute of Science

9

Marketing Management

Demand variables:

Demographic, social, economic,
political, and competitive factors in
market environment

Psychological, social, and economic
patterns in customer motivations

All autonomous factors

Prof Parameshwar P Iyer
Indian Institute of Science

10

Marketing Management

Semi
-
demand variables:

Market segmentation

Customer behavior

Only partially under the control of the
entrepreneur

Prof Parameshwar P Iyer
Indian Institute of Science

11

Marketing Management

Decision Variables:

Product characteristics and pricing

Distribution and personal selling

Advertising policies

Mostly under the control of the
entrepreneur

Prof Parameshwar P Iyer
Indian Institute of Science

12

Marketing Management

The essential entrepreneurial function in
marketing management is to design an
integrated marketing plan, where the
demand and semi
-
demand variables of
the market are related to the product
and decision variables of the firm.

Prof Parameshwar P Iyer
Indian Institute of Science

13

Market Research

Marketing success depends on design of a
distinctive marketing plan

A small entrepreneur should not try to
compete on a product
-
to
-
product basis with
large firms (same goods to same customers
thru same channels at same prices !!)

Instead, try to do
“something different”.

Prof Parameshwar P Iyer
Indian Institute of Science

14

Operations Management

Process of designing and utilizing the
physical resources of the firm to
maximize the operational capabilities of
the company

Product/ service design

Process design

Job design

Job standards

Prof Parameshwar P Iyer
Indian Institute of Science

15

Operations Management

The entrepreneur’s smaller firm
generally has to provide specialized,
few
-
of
-
a
-
kind products and personalized
services, without the benefits of mass
production and mass distribution

Prof Parameshwar P Iyer
Indian Institute of Science

16

Financial Management

1. Effective utilization of the assets
-

current(short
-
term) and capital (long
-
term)

2. Provision of funds to support those assets

3. Use of current liabilities, intermediate
loans, and capital debt or equity

4. Difficult for smaller companies to compete,
in finance, with larger firms, simply because
they lack money.

Prof Parameshwar P Iyer
Indian Institute of Science

17

Financial Management

Finances needed for:

1. New investments in product development

2. Expansion of markets

3. Process improvements, etc.

Conserve available funds by preparing
detailed financial plans, e.g. cash budgets,
capital investment analysis, short
-
term plans

Prof Parameshwar P Iyer
Indian Institute of Science

18

Financial Management

Finding additional funds from sources as

1. Current liabilities

2. Bank loans

3. Equity investments

4. Retained earnings

5. Venture capital proposals

6. Angel funding proposals

Prof Parameshwar P Iyer
Indian Institute of Science

19

Product Development

Improvements in design of existing product

Inventions of new products

Lack resources for full R&D facility

Must use available capabilities efficiently

Outsourcing of R&D and innovation

Technical feasibility, market feasibility,
development time and cost, manufacturing
capability, and strategic fit

Prof Parameshwar P Iyer
Indian Institute of Science

20

Organizational
Management and
Control

Smaller companies go thru identifiable
stages of growth

Increased specializations in tasks of
staff

Increased delegation on part of founder

Increased systematization and
formalization of information reporting
and accounting procedures

Prof Parameshwar P Iyer
Indian Institute of Science

21

Formation and Growth

Formal and legal procedures of
formation
-

memoranda and articles of
association

Sole proprietorship

Partnership

Private limited

Public listing

Cooperative

Prof Parameshwar P Iyer
Indian Institute of Science

22

Formation and Growth

Purchase of a small company
-

identify,
screen, evaluate, negotiate, and
structure payments

Consolidation of a new company
-

intense conservation of cash, firm
limitations on expenses, continual
examination of company’s strategy.

Prof Parameshwar P Iyer
Indian Institute of Science

23

Conclusions

Entrepreneurship is a challenging and
rewarding profession

Need to concentrate on market analysis,
financial resources, and technology
management

Cannot compete directly with the “big guys”,
so need to be ingenious and innovative in all
entrepreneurial functions