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The Nature and Importance of Entrepreneurs and Entrepreneurship_2012 Aug_final.ppt
1. Unit 1
The Nature and Importance of
Entrepreneurs and Entrepreneurship
Presented by:
Bal Ram Chapagain, M. Phil.
May 27, 2023 1
balram.chapagain@gmail.com
3. Opening profile of ‘Oprah Winfrey’
Background
An American television host, actress,
entrepreneur, and philanthropist
Richest African American of the 20th century
(only black woman billionaire)
According to some surveys, the most influential
woman in the world.
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4. Opening profile of ‘Oprah Winfrey’
Early life
Born in a poor family of rural Mississippi in 1954
Spent her early years in a house with no
electricity and no piped water
Experienced considerable hardship during her
childhood, claiming to be raped at age nine
And becoming pregnant at 14; her son died in
infancy
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5. Opening profile of ‘Oprah Winfrey’
Turning points
Landed a job in radio while still in high school
and began co-anchoring the local evening news at
the age of 19.
Was hired by another television show; and within
a month ‘The Oprah Winfrey Show’ ranked first
in the USA.
In 1986, at the age of 32, established her own
media company ‘Harpo Inc.’, and hired her own
former boss as a chief operating officer (COO).
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6. Opening profile of ‘Oprah Winfrey’
Success story
In her media company she became both chief content
creator and chief content itself.
Gradually, she entered into alliances with other
companies; diversified her company to audio, video, print
magazine, film production etc. as an owner and chair of
all companies.
In 1998, she got ‘Lifetime Achievement Award’ – a
very prestigious award in USA.
In 2000, her company’s total net worth exceeded $ 1 billion
and became a only woman billionaire of 20th century.
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balram.chapagain@gmail.com
7. Opening profile of ‘Oprah Winfrey’
Success story
“One of the most influential people” from 2004 to 2011
by TIME.
Although Oprah readily admits that she cannot read a
balance sheet, evidence clearly reveal that she has a
vision and a true entrepreneurial spirit.
Having come from poverty, Oprah is one of the largest
philanthropists of our time (donates at least 10 percent of
her annual income to charity, most of it anonymously).
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8. Opening profile of ‘Oprah Winfrey’
Lessons to learn
Does not necessarily need to be rich (can be started small)
Desire to be own boss (independence)
Internal locus of control
Aim high
Creative and ability to find and explore opportunities
Does not necessarily need sound technical skills
Self-respect, respect for others, be responsible
Entrepreneurship is important not only for self & family
but also for society and the country
WHAT ELSE????....
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9. Nature of Entrepreneurship
Entrepreneur?
Individual who takes risks and starts something
new
Entrepreneurship?
Process of creating something new and
assuming the risks and rewards
Process of creating a venture capable of
entering new or established markets.
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10. Evolution of the Concept of Entrepreneur
Earliest period : Marco-Polo (1254-1324)
Merchant adventurer. Capitalist provided
goods and money (at a 22.5 percent rate) to sell
the product, merchant sells and takes profit as
75% -25%
Middle Ages (15th – 16th Century): A person
who managed large construction/production
projects like public buildings, castles, cathedrals
etc., usually resources provided by government
or any others.
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11. Evolution of the Concept of Entrepreneur
17th Century: Risk-taking, success and
failure was associated to Entrepreneurship
18th Century: The person with capital (venture
capitalists) was differentiated from one who
required capital (Entrepreneur)
19th and 20th Century: Innovation, creativity,
newness are associated with Entrepreneurship.
Entrepreneur is an individual developing
something new.
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16. Some common characteristics of
today’s entrepreneurs
Brainstorming about key characteristics
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17. Some common characteristics of
today’s entrepreneurs
1. Strong desire to achieve
2. Independence
3. Risk-bearing (but never a wild gamble)
4. Internal locus of control
5. Persistence
6. Ability to create and innovate
7. Optimistic
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18. Some common characteristics of
today’s entrepreneurs
8. Flexible and open minded (but assertive too)
9. Mostly rational but sometimes intuitive
10. Interpersonal skills
11. Ability to influence others
12. Stress takers
13. Visionary
14. Good planners, decision makers and
mobilizers
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19. Top 10 characteristics of today’s
entrepreneurs (according to some
studies in the west)
1. Married
2. Man (but now rate of increase is high in woman)
3. Thirties (early thirties for man and late thirties for
woman)
4. Bachelor’s Degree
5. To be independent
6. Oldest
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20. Some common characteristics of
today’s entrepreneurs (according to
some studies in the west)
7. Doers
8. Take advice and support form mentor and/or
network system
8. Moderate risk takers
9. Want to do something new
10. Variety of ventures depending on their field of
experience and backgrounds; but woman prefer
service sector
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21. To sum up…
“Entrepreneurship is the process of
creating something new with value by
devoting the necessary time and effort,
assuming the accompanying financial,
psychic, and social risks, and receiving
the resulting rewards of monetary and
personal satisfaction and
independence.” – Hisrich, Peters and Shepherd (2007)
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22. Role of Entrepreneurship in
Economic development
Entrepreneurship converts idle or less
useful resources into valuable products.
It creates new jobs, creates wealth and
many more.
Thus, it is the backbone of all economies –
developed, developing and least developed.
23. Role of Entrepreneurship in
Economic development
Specifically, they are helpful in:
Mobilizing idle resources
Capital formation
Employment creation and increasing per capita
income
Stimulating both supply and demand sides
Balanced development (e.g., tourism
development in Nepal)
24. Role of Entrepreneurship in
Economic development
Export promotion
Industrialization
Increasing government revenue
Reducing concentration of economic power; and
Finally, entrepreneurship contributes to different
types of innovations, commercializing
innovations and enhancing the quality of life of
people.
25. The Myths of Entrepreneurship
Myth 1: Entrepreneurs are doers, not thinkers
It’s true that entrepreneurs are doers, but ate the same
time they are thinkers.
The emphasis today on creation of clear business plan
is its indication.
Myth 2: Entrepreneurs are born, not made
Entrepreneurial qualities are partly born and partly
made.
Like other disciplines entrepreneurship can be taught
and, over time, an appropriate mind set and skills can
be developed.
26. The Myths of Entrepreneurship
Myth 3: All entrepreneurs need is money
It is true that a venture needs capital to survive and
grow.
But, it is mostly a means rather than ends.
They create and run business mainly for independence
and status, rather than merely for money
Myth 4: Only rich people can become entrepreneurs
Even poor people can become successful
entrepreneurs.
It can be started small and gradually expanded.
27. The Myths of Entrepreneurship
Myth 5: Entrepreneurs are extreme risk takers
Myth 6: Entrepreneurs are favored by luck
Myth 7: Entrepreneurs are academic and social
misfits
Myth 8: Entrepreneurs are dishonest
Myth 9: Entrepreneurs are inventors
Myth 10: Entrepreneurs must fit the profile
28. The Dark Side of Entrepreneurship
A great deal of literature is devoted on bright side of
entrepreneurship such as rewards, success and
achievements.
However, it is also essential to understand that the a
dark side also exists – before creating a venture.
The dark side is that entrepreneurs face a number of
different types of risks. They are:
1. Financial Risk
2. Career Risk
3. Family and Social Risk
4. Psychic Risk
29. The Dark Side of Entrepreneurship
1. Financial Risk
In most of new ventures, the individual puts a
significant portion of his/her savings or other resources
at stake, which creates a serious financial risk.
The entrepreneur is thus exposed to personal
bankruptcy.
In case of sole proprietorship and partnership firms,
entrepreneurs may have to even sell their personal
property if the liability exceeds business assets.
30. The Dark Side of Entrepreneurship
2. Career Risk
A question frequently raised by would-be
entrepreneurs is whether they will be able to find job
or go back to their old job if their venture fails.
This career risk is a major concern to managers who
have a secured job with high salary and benefits.
3. Family and Social Risk
Starting a new venture requires much of the
entrepreneur’s energy and time.
Consequently, his/her commitment to spouse, children
and friends may suffer.
31. The Dark Side of Entrepreneurship
4. Psychic Risk
Psychic risk is probably the most critical risk that an
entrepreneur faces.
Money can be replaced; a new house can be built;
spouse, children, and friends can usually adapt.
But alienation, depression resulting from failure of
venture may be very hard to recover.
32. Entrepreneurship vs. Intrapreneurship
S.N. Entrepreneur Intrapreneur
1 Entrepreneur is independent. Intrapreneur is semi-independent.
2 Entrepreneur raises their funds
on his own initiative.
Intrapreneur depends upon the industry in which he
works for getting the finance.
3 Entrepreneur takes the profit of
the business
Intrapreneur doesn’t take profit out of innovations
but he can be provided with a variety of benefits for
their innovation.
4 Entrepreneur bears the full risk
of his business.
Intrapreneur bears the risk of the business which is
a small part of the entire business.
5 Entrepreneur is the real owner
of the business.
Intrapreneur is not the real owner of the business;
rather he works for the business.
6 Entrepreneur operates from
outside and organization.
Intrapreneur operates from within the organization.
7 Entrepreneur converts the
ideas of intrapreneur into viable
opportunities.
Intrapreneur takes the responsibility of creating
innovation of any kind from within the organization.
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33. Business Ethics (Ethics of Entrepreneurs)
Ethics in concerned with adherence to widely
accepted norms of behavior, i.e., adherence to
right things.
Business ethics is the application of general
ethical ideas to business behavior.
Although ethical scandals in business are not
really new, media and public attention on them
in recent years has increased significantly.
34. Business Ethics (Ethics of Entrepreneurs)
Violation of ethical codes, knowingly or
unknowingly, by business/entrepreneurs and
its managers may result in penalties and even
social boycott.
However, if it is managed properly by
developing and adhering to ethical codes, it
results in better stakeholder relations and
enhanced reputation of the organization.
35. Social Responsibility of Business/
Entrepreneurs
Widely known as corporate social
responsibility (CSR)
It generally goes beyond ethical issues.
CSR refers to the business management’s (or
entrepreneur’s) obligation to set policies, make
decisions and follow courses of action to
protect and promote the interest of different
stakeholders going beyond the minimum
requirement of law.
36. Social Responsibility of Business/
Entrepreneurs
It oversees different areas as workplace
(employees); marketplace (customers, suppliers);
shareholders; government; community;
environment; ethics; and human rights.
Organizations may reap long term benefits of
improved relationships with the local communities,
customer loyalty, increased worker motivation and
retention, enhanced reputation, and ultimately
higher profitability by committing themselves to
CSR practices.
37. Contrasting views on CSR
To Milton Friedman:
“There is one and only one social responsibility
of business – to use its resources and engage in
activities designed to increase its profits so long
as it stays within the rules of the game, which is
to say, engages in open and free competition
without deception of fraud” (Friedman,
1970:126).
38. Contrasting views on CSR
Rejecting the idea of Milton Friedman, Drucker
states that:
“It is futile to argue, as Milton Friedman... that a
business has only one responsibility: economic
performance. Economic responsibility is the first
responsibility of a business... Economic performance
is the base without which a business cannot
discharge any other responsibilities... But economic
performance is not the only responsibility of a
business” (Drucker, 1992:99, cited in Smith, 2008).
39. Contrasting views on CSR
To me:
“CSR is a business principle and/or practice which
integrates legal, economic, ethical, social and
environmental concerns and seeks to fulfill the interests
of all stakeholders including the interest of business
itself” (Chapagain, 2010:11).
In essence, CSR is not merely an obligation of business
enterprises towards different stakeholders but, more
importantly, an opportunity for economic success and
sustainability.
40. Video Show on
‘Social Responsibility of Nepalese
Entrepreneurs’
(Courtesy: BBC World Service)
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41. Brainstorming
What is the understanding of CSR among Nepalese
entrepreneurs? Are there any misconceptions?
What does CSR mean to you? Is it a rhetoric or a nice
thing to do for creating a win-win situation between
business and other stakeholders?
What is the role of government to promote CSR in
Nepal?
If you were a consultant to Mr. Jyoti or any other
entrepreneur/industrialist of Nepal, what would be
your suggestions on CSR?
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42. The Future of Entrepreneurship
Entrepreneurship means different things to
different people and viewed in different
perspective (e.g. German view: power and
property; owner-manager vs. American view:
new and small-mainly owner)
However, in spite of differences, there are
some commonalities – risk taking, creativity,
independence, and rewards – which will
continue to be the driving force behind the
notion of Entrepreneurship in future.
43. The Future of Entrepreneurship
Entrepreneurship education throughout the
world is growing
NGOs/INGOs are also giving more importance
to entrepreneurship
Unique entrepreneurship programs are
evolving day after day
Governments are taking an increased interest
in promoting the growth of entrepreneurship
Society and media are giving more importance
Corporations are encouraging Intrapreneurship
44. Discussion Questions
1. What is entrepreneurship? Why is it important for
individual, society and the country?
2. List merits and drawbacks of creating and running
your own venture and working for somebody else.
3. Despite the importance of entrepreneurship, why is
Nepal behind many other countries in the world? Is
the problem internal to individuals or somewhere
else?
4. Discuss the roles and responsibilities of different
stakeholders in promoting entrepreneurship in Nepal.
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