Entrepreneurial Skills – Class X

Part – 2

Short Notes

  • Managerial  Functions

Planning

An entrepreneur documents a business idea in the form of a business plan, to detail each element of the business such as product or service description, operations, marketing, finance, accounting, growth plan etc. A business plan serves as a guide to determine the business objectives and the course of action. It helps to detail the “what, when, how and who” of doing every specific task.

Directing:

Directing is about initiating planned action and ensuring that each employee is performing effectively. This also includes doing continuous performance reviews and organizing tasks according to plans.

Staffing:

Staffing refers to different sub-processes around human resource management, such as manpower planning, recruitment, selection, placement, training, transfer, salary, promotion, payroll, appraisal etc. The objective of staffing is to fill a particular position with the right employee at the right time.

Leadership:

Leadership is more of a skill than a function for an entrepreneur as he or she has to lead, guide and supervise people who work for the business. It is the process by which an entrepreneur directs, guides and influences the work of others in choosing and attaining specified goals by mediating between the individual and organisation in such a manner that both get maximum satisfaction.

Communication

An entrepreneur has to communicate every single day, in the form of writing, responding, drafting emails, verbal instruction, discussion etc. It has been established that entrepreneurs spend 75% to 90% of their working time communicating with others. It refers to the exchange of ideas, feelings, emotions, knowledge and information between two or more persons. Nothing happens in management until effective communication takes place.

Supervision

After issuing instructions, the entrepreneur has to see that the given instructions are carried out. Supervision refers to the job of overseeing subordinates at work to ensure the maximum utilization of resources, to get the required and directed work done, and to correct the subordinates whenever they go wrong and ensure each function of the business runs smoothly.

Motivation

Along with guiding employees, an entrepreneur also plays the role of motivating them and encouraging positive behaviour and culture within the organization. It is the psychological process of creating an urge among the employees to do certain things or behave in the desired manner. The importance of motivation can be realised from the fact that the performance of a worker depends upon his/her ability and motivation. A sound motivational system must be productive, competitive, comprehensive and flexible, and it must consider all needs of the worker.

Co-ordination

Coordination between different departments of the business helps to ensure that work happens in a timely manner. It is essential to channelize the activities of various individuals in the organization, for the achievement of common goals. The entrepreneur has to make sure that the work of different segments is going according to pre-determined targets and corrective measures have to be initialised if there is any deviation.

Controlling

Sometimes controlling enables the entrepreneur to get his/her company’s policies implemented and take corrective action if performance is not according to the pre-determined standards. The process begins with establishing standards of performance, measuring actual performance, comparing the actual performance with the standard, finding variations and finally, taking corrective action.

  • Commercial  Functions

Production and Operations:

Depending on whether it is a service business or product business, an entrepreneur has to perform the function of managing production. It is the key function of an entrepreneur. The activities of production are independent of the size of the undertaking. In a small concern, one person may be undertaking this function whereas, in large organizations, this activity may be undertaken by various individuals or separate teams. 

Finance and Accounting:

While finance is more focused on raising funds and managing them, accounting helps to record and analyse the financial position of the business. Thus, an entrepreneur has to prepare and analyse cash flow statements, income sheet, balance sheet etc.

Marketing: 

Marketing refers to promoting products and services. It is primarily concerned with the movement of goods and services from the producer to the ultimate consumer. It is directed towards the satisfaction of consumer wants. Marketing plays a significant role in promoting the well-being of the business enterprise. An entrepreneur has to perform this function to make people aware about the offerings of the business and makes sales.

Human Resource Management:

Human Resource Management (HRM) refers to recruitment, employment, selection, training, development and compensation of the employees with an organization. An entrepreneur performs this function as no business can function without people.

  • Role of Entrepreneurs

Coordinating role:  An entrepreneur has to coordinate the various factors for production. It involves the selection of the best possible combination of factors.

 Agent’s role: Entrepreneurs are perceived as ‘Agents of Change’. They identify the opportunities, establish enterprises and build-up industries which in turn lead to the overall development of the economy.

Innovator’s Role: Entrepreneurs as innovators bring new products or service to the market or improve existing products or services. They act as market leaders and play the role of pioneers.  

Risk assumption role: Risk is involved in every venture. The economic reward of risk-bearing is profit. Entrepreneurs retain some amount of the profits earned and put it back in business. This ultimately leads to the capital.

Imitating role:  In developing nations, entrepreneurs usually imitate or adopt the innovations done by the entrepreneurs of the developed nations. By doing so, they adapt these innovations to the local conditions and hence work towards overcoming the entrepreneurial challenges.

Capital formation role: Entrepreneurs enable the formation of capital by mobilising the idle savings for the purpose of carrying on a business. The mobilisation of wealth leads to an increase in the capital of the company and development of assets. This helps in carrying on trade and development of the economy.

Balancing role:  Entrepreneurs provide for regional developments by starting small-scale industries. India needs decentralized structures to remove regional imbalances in economic development.

Status transformation roleEntrepreneurs generate employment, income and wealth which improves the overall standard of living in the society. Improved standard of living leads to economic development as it reduces the disparity in income.

Employment Generation role: Establishment of business enterprises leads to the generation of employment opportunities as various human resource professionals are needed to run the business effectively. Thus, entrepreneurship leads to the reduction in unemployment levels which is a known cause for hindrance in the development of the economy.

  • Importance of Entrepreneurs

Free market evolutionEntrepreneurs are important in a free market because they help the market respond to changing prices and consumer preferences. For example, with the rise in the use of the internet, an entrepreneur may see the potential to set up a new home delivery service which uses an app for consumers to buy. Without entrepreneurs, product markets would become static and be slow to changes in new technology and trends.

Efficiency improvements:  A successful entrepreneur tends to adapt in an established business and increase their own efficiency. Entrepreneurs can make radical changes and introduce new technologies which significantly move on an industry. 

New values: An entrepreneur is not just about price and profit. An entrepreneur may be motivated to enter an industry to offer a more ethical product or provide a service to a community. For example, Anita Roddick set up Body Shop at a time when many cosmetics were tested on animals. Her new set up eschewed animal testing. It proved a successful business strategy and it soon became the industry standard. In other situations, entrepreneurs may take a risk and provide community service such as a volunteer-led railway – offering steam trains for tourists and locals.

  • Myths of Entrepreneurship

Entrepreneurs are born and not made: Many people assume that entrepreneurial qualities are innate and that only people who have certain natural talents can be entrepreneurs. However, the truth is that almost anyone can become an entrepreneur if they can learn the necessary skills. Entrepreneurs may be gregarious extroverts or quiet introverts; they may be “big picture” thinkers or more focused on the details of executing an idea. Entrepreneurship is a learned skill, not a natural-born ability.

All entrepreneurs have great ideas: Some people may not attempt to start their own business because they don’t have a unique idea. It is not needed to reinvent the wheel to be an entrepreneur. There is nothing wrong with taking an existing idea and making your own business out of it.

The only requirement is a good idea: Even the very best ideas, ones with the potential to disrupt an entire industry, need proper execution to become reality. Ideas are important, but so are planning, talent, leadership, communication, and a host of other factors.

Businesses either flourish or fail: Because the select few start-ups that skyrocket out of the gate receive the bulk of the media, it’s easy to adopt an all-or-nothing outlook on entrepreneurship. While many ventures make it big and many fail, a lot of businesses are run with patience and strategy with a focus on self-sustenance and gradual growth.

Entrepreneurs take lots of risks: Entrepreneurs take risks. With that said, they don’t necessarily take lots of risks or put themselves in high-risk situations all the time. Entrepreneurs learn how to take calculated risks. It is all about balancing the risk and reward.

One must know everything before starting a business: Real entrepreneurs thrive on being in a constant state of learning. They enjoy creating, improvising and pushing boundaries. Being new and even somewhat naïve can be an asset in today’s rapidly changing world. That’s because succeeding at entrepreneurship requires energy, innovation and the ability to push yourself outside your comfort zone. It’s often not what you know, but how fast you learn, that counts.

A lot of money is required to start any business: While certain amount of capital is required for take a business off the ground, it varies depending on the business. The key in entrepreneurship is to start with resources available and grow slowly and steadily. It is not necessary that one should fear or deter from entrepreneurship due to lack of financial resources.

  • Entrepreneurship as a Career – Why entrepreneurship for you?
  • Nurtures development of entrepreneurial skills and capabilities 
  • Enables the application of an entrepreneurial mindset
  • Develops the ability to handle failure and ambiguity
  • Enhances critical thinking and problem-solving ability 
  • Provides early exposure to the real world
  • Inspires to think about one’s career differently 
  • Leads to creating a difference in society

 

Video Tutorial

Questions and Answers


1) Name the types of Managerial functions.

Ans :

  • Planning
  • Organising
  • Directing
  • Staffing
  • Leadership skill
  • Communication
  • Supervision
  • Motivation
  • Coordination
  • Negotiation

2) Name the types of Commercial functions.

Ans :

  • Production and operations
  • Financing and accounting
  • Marketing
  • Human Resource Management


3) What is the coordinating role of an entrepreneur?

Ans.  An entrepreneur has to co-ordinate various factors for the production of goods and services.  He or she has to coordinate with the external parties as well as internal parties of his organisations such as employees, various departments etc.

4) What is imitating role of an entrepreneur?

Ans.  Entrepreneurs are not the inventors, they usually imitate or adopt the innovations done by the entrepreneurs of the developed nations.  In this process, they adapt the innovation to the local conditions and work towards overcoming the entrepreneurial challenges.

5) Write any two myths about entrepreneurship.

Ans.   Entrepreneurs are born and not made:

Many people assume that entrepreneurial qualities are innate and that only people who have certain natural talents can be entrepreneurs. However, the truth is that almost anyone can become an entrepreneur if they can learn the necessary skills.

A lot of money is required to start any business:

Though capital is essentially required for setting up a business, its quantity varies depending on the business and its size.  The key to becoming an entrepreneur is to start with resources available and grow slowly and steadily.  

6)  Enlist any five benefits of taking entrepreneurship as a career.

Ans :

  • Nurtures development of entrepreneurial skills and capabilities
  • Enables the application of an entrepreneurial mindset
  • Develops the ability to handle failure and ambiguity
  • Enhances critical thinking and problem-solving ability 
  • Provides early exposure to the real world
  • Inspires to think about one’s career differently
  • Leads to creating difference in society

7) Write a short note on the Importance of entrepreneurship.

Ans. The importance can be illustrated through the following points :

  1. Entrepreneurs are important in a free market because they help the market respond to changing prices and consumer preferences
  2. Entrepreneurs can make radical changes and introduce new technologies which significantly move on an industry.
  3. An entrepreneur may be motivated to enter an industry to offer a more ethical product or provide a service to a community.

8)  Explain any 3 qualities of an entrepreneur.

Ans.  Coordinating roleAn entrepreneur has to coordinate the various factors for production. It involves selection of the best possible combination of factors.

Agent’s role: Entrepreneurs are perceived as ‘Agents of Change’. They identify the opportunities,establish enterprises and build-up industries which in turn lead to overall development of the economy.

Innovator’s Role: Entrepreneurs as innovators bring new products or service to the market or improve existing products or services. They act as market leaders and play the role of pioneers.  

9)  How does entrepreneur provide exposure to the real world?

Ans.  Entrepreneurship practice at an early stage in one’s career and courageous activities such as going out and interacting with customers creating tangible concepts, ideas, preparing detailed documents, working with investors and vendors etc.  which gives great exposure and knowledge about the trends and requirements of the real world.

Multiple choice Questions

  1. Which of the following is a quality of Entrepreneurship?

a)  Optimistic b) Independent

c) Self Confident d) All of the above

Ans.  All of the above

  1. Which of the following is not the step taken by an entrepreneur to build up an organization?

a) Hiring employees b) Organizing the factors of production

c) Sourcing finance  d) None of the above

Ans.  None of the above

  1. Which of the following is the key commercial function of an entrepreneur?

a)  Finance & Accounts   b) Production & Operation

c)  Marketing      d) Human Resource Management

Ans.  Production and Operation

  1. The role of an entrepreneur is _______

a) Coordinator b) Agent

c)  Innovator  d) All of the above

Ans.  All of the above

 

  1. Which of the following is the importance of an entrepreneur?

a)  Efficiency b) Old markets

c) Free markets d) New Values

Ans.  Old Markets

  1. Anita Roddick tested her cosmetic products on _____

a)  Animals b) Humans

c) Birds       d) All of the above

Ans.  Humans

  1. Which of the following is not the myth regarding entrepreneurship?

a)  Entrepreneurs are born that way

b)  The business will either flourish or fail

c)   Entrepreneurs take the least risk.

d)   A lot of capital investment is required to start any business.

Ans.  Entrepreneurs take the least risk

  1. Which of the following includes core business areas?

a)  Finance b) Sales

c) Marketing d) All of the above

Ans.  All of the above

  1. Entrepreneurship forces one to ____

a)  Think critically b) Analyze all alternatives

c) Consider possible solutions d)  All of the above

Ans.  Consider possible solutions

Fill in the Blanks

  1.  Successful entrepreneurs show perseverance in their pursuit.
  2. Entrepreneurs innovate by introducing new concepts, products, services etc.
  3. Raising capital for a business is one of the core function that entrepreneurs perform themselves.
  4. Entrepreneurs are perceived as Agents of change.
  5. Entrepreneurs lead to a reduction in Unemployment levels.
  6. Entrepreneurs can often redefine the rules.
  7. There are Myths about the traits of an entrepreneur.
  8. Real entrepreneurs thrive on being in a constant state of learning.
  9. As life is uncertain, business is full of Ambiguity.



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