Here we are providing Class 12 Business Studies Important Extra Questions and Answers Chapter 13 Entrepreneurship Development. Business Studies Class 12 Important Questions are the best resource for students which helps in class 12 board exams.
Class 12 Business Studies Chapter 13 Important Extra Questions Entrepreneurship Development
Entrepreneurship Development Important Extra Questions Short Answer Type
What is the relationship between innovation and entrepreneurship?
Creativity is the seed that inspires entrepreneurship. Innovation is the process of entrepreneurship. Drucker agrees and elaborates “Innovation” is the means by which the entrepreneur either creates new wealth-producing resources or endorse existing resources with enhanced potential for creating wealth.
It is important to recognize that innovation implies action, not just conceiving new ideas when people have passed through the illumination and verification stages of creativity, they may have become inventors, but they are not yet innovators. The diff. between invention and innovation is shown as under:
Explain the fundamentals of a feasibility plan for the success of a business enterprise.
A feasibility plan encompasses the full range of business planning activities, but it seldom requires the depth of research of detail expected for an established enterprise.
Every new business is unique. Each will have something that sets it apart from others even if it is no more than the personality of an entrepreneur. For that reason, no plan is going to provide an absolute prescription of success. A feasibility plan is an outline of potential issues to address and a set of guidelines to help an entrepreneur make better decisions.
Developing a Good Plan: Feasibility plans usually are written for investors and lenders, and being aware of this audience often leads to over-optimistic presentations by entrepreneurs who “hard sell” their business concepts. Occasionally this tactic may attract investors and help secure loans, but it will have little value as a management tool for the founder. Writing an honest plan with well-supported information will benefit everyone.
A well-written plan should be succinct, clearly identifying products, services, markets, and the founder. A feasibility plan does not have to be “stick”, but it does have to be prepared in a quality manner. The plan should be easy to read, complete and accurate.
There should be no misspelling, improper grammar, or mistakes ‘ in data. Effective plans avoid emotion-packed phrases like “This can’t miss!” or everybody needs this!” They also avoid abstract language. Entrepreneurs who know have to write a good plan will avoid saying they “think” there is a market or they “believe” a product will work. Instead, they will use facts to support their assertions.
Protecting the Business: Since business plans are used to attract investors and lenders, many copies are circulated. Wide circulation can be dangerous if the plan contains sensitive information consequently, It is wise to include a strong “nondisclosure statement” on the cover page that states information in the plan is proprietary and cannot be copied, disclosed, shared, or otherwise compromised.
Many entrepreneurs also assign an index number on each copy in addition to a signature line for each recipient. This constitutes an agreement on the nondisclosure terms and provides a reference number for documenting circulation. Although this procedure may not always protect entrepreneurs from having their ideas stolen, it can be a strong deterred.
Making the Plan Readable: A thorough business plan often has more than 50 pages, but many plans based on easily understood business concepts may be less than 20 pages long. Plans for complex enterprises requiring extensive documentation are much longer. If there is a choice keep it short potential investors and lenders receive many proposals, but they rarely read more than the first few pages.
If the concept is intriguing, they spend more time probing financial data. It can be quite disturbing to an entrepreneur who has spent months writing a good plan to watch a loan officer spend five minutes reading the front page and skimming projections. Therefore, it is even more important to be convincing in the opening pages.
For those few enterprises that capture an investor’s attention (or get past the junior loan officer), there is a more complete study. This means that an entrepreneur must be very careful to capture a reader’s attention early, yet provides thorough information for a detailed analysis that occurs later.
Explain the role of entrepreneurship and relations between Entrepreneurship and Management?
Entrepreneurship is about business start-ups and renewals. That is, it appears at the time of starting a new business, disappears for some time in the course of stabilizing the venture as an on-going business, and reappears in case there is a need for introducing changes in product, market, technology, structure, and so on. In fact, it is said that everyone is an entrepreneur when he actually ‘carries out new combinations’, and loses the character as soon as he has built up his business when he settles down to running it as other people run their businesses.
In developed countries, the distinction between the entrepreneurial focus on start-ups and managerial focus on routine is so sharp that it is argued that once the project has reached the level of maturity, the entrepreneurs must move out and the managers must come in.
In developing countries, however, the concept of owner-manager seems more apt for entrepreneurship as the entrepreneur remains attached even to the day-to-day operations of the venture. In fact, they’re lacking managerial skills is often forwarded as the cause of business failures. Just as managers are expected to play entrepreneurial roles in times of need, likewise the entrepreneurs must also demonstrate managerial abilities for the success of their ventures. Irrespective of whether the entrepreneur’s power way for the managers or they themselves assume the managerial responsibilities, it is possible to distinguish between the terms of entrepreneurship and management.
Differences Between Entrepreneurship and Management:
No. Basis of Differentiation
|1. Focus||Business Start-up||Ongoing Operations of an existing business.|
|2. Resources orientation||The entrepreneur does not feel constrained by resources. Entrepreneur mobilizes the resources.||A manager is constrained by the resources at his disposal|
|3. Approach to the task||Informal||Formal|
|4. Primary motivation||Achievement||Power|
|5. Status vis-a-vis the enterprise.||Owner||Employee|
|6. Primary economic reward||Profit||Salary|
|7. Innovation orientation||Challenges the status quo, that is, the existing.||Maintains the status quo.|
|8. Risk orientation||Risk-taker||Risk-averse|
|9. Approach to decision-making||Driven by inductive logic and personal courage and determination.||Driven by deductive logic and research.|
|10. Scale of operations||Small business||Large business|
|11. Primary skills requirement||Opportunity spotting, initiative, resource negotiation.||Organizing, systems design and operating procedures, people management.|
|12.. Specialisation orientation||Generalist; has to know and do all the trades by himself.||Specialist.|
Explain the role and functions of an Entrepreneur in relation to the enterprise?
Roles and functions of the Entrepreneur in relation to the enterprise: Developing Exchange Relations
- Perceiving market opportunities
- Gaining command over scarce resources
- Purchasing inputs
- Marketing of products and responding to competition. Political Administration
- Dealing with public bureaucracy Capprovals, concessions, taxes)
- Managing human relations within the firm
- Managing customer and supplier relations. Management Control
- Managing Finance
- Managing production Technology
- Acquiring and overseeing the assembly of the factory
- Industrial engineering (minimizing inputs with a given production process)
- Upgrading the production process and product quality.
- Introducing new production techniques and products.
Note: The scope of the entrepreneurial functions varies with the level of economy in which the entrepreneur operates; the scale of production/operations; and entrepreneurs’ comparative efficiency in utilizing managerial employees. In developed countries, entrepreneurship assumes upon itself the responsibility of introducing innovation and after some time, pave way for the managers.
In large-scale organizations, entrepreneurs provide leadership and there is a team of managers to look after specific aspects of the enterprise. Likewise, those entrepreneurs who have the ability and willingness to delegate may concentrate on the select few, strategic aspects of .enterprise.
Explain in brief the functions of an entrepreneur especially to the Economic Development of the enterprise.
Functions of entrepreneurs in relation to Economic Development: You are aware that entrepreneurs “organize” the production process. In the absence of this function, all other resources, namely land, labor, and capital would remain idle. They may not be inventing/ discovering the products, their role in the commercial exploitation of the advancements in science and technology via the organization of the productive apparatus makes the other resources productive and useful. So much so that it is said that in the absence of entrepreneurial intervention, every plant would remain a weed and every mineral would remain a rock!
1. Contribution of GDP: Increase in the Gross Domestic Product or GDP is the most common definition of economic development. You are aware that income is generated in the process of production. So, entrepreneurs generate income via the organization of production be it agriculture, manufacturing, or services.
You are also aware that income generated is distributed among the factors of production where land gets rent, labor gets wages and salaries, capital gets interested and the residual income accrues to the entrepreneur in the form of profits. As rent and interest accrue to those few who have land and capital-respectively whereas large masses are destined to earn their incomes via wage employment, the biggest contribution of entrepreneurship lies in capital formation and generation of employment.
2. Capital Formation: The entrepreneurial decision, in effect, is an investment decision that arguments the productive capacity of the economy and hence results in capital formation. In fact, GDP and capital formation are related to each other via capital-output Ratio (COR); more precisely Incremental Capital Output Ratio (I.COR) measures the percentage increase in capital formation required to obtain a percentage increase in GDP. So, if a country desires to grow @ 10:0%. p.a. and its ICOR is 2.6%. p.a. Entrepreneurs, by investing their own savings and informally mobilizing the savings of their friends and relatives contribute to the process of capital formation. These informal funding supplements the funds made available by the formal means of raising resources from banks, financial institutions, and capital markets.
3. Generation of Employment: Every new business is a source of employment for people with different abilities, skills, and qualifications. As such entrepreneurship becomes a source of livelihood to those who do neither have the capital to learn interest in nor have the land to earn rent. In fact, what they earn is not only a livelihood or means of sustenance but also a lifestyle for themselves and their families as well as personal job satisfaction. As such entrepreneurs touch the lives of many, directly as well as indirectly.
4. Generation of Business opportunities for others: Every new business creates opportunities for the suppliers of n (this is referred to as backward linkages) and the marketers of the output (what is referred to as forwarding linkages). As a pen manufacturer you would create opportunities for refill manufacturers as well as wholesalers and retailers of stationery products. These immediate linkages induce further linkages.
For example, greater opportunities for refill manufacturers would mean the expansion of business for ink manufacturers. In general, there are greater opportunities for the transporter, advertisers, and, so on. So, via a chain-reaction, entrepreneurship provides a spur to the level of economic activity.
5. Improvement in Economic Efficiency: You are aware that efficiency means to have greater output from the same input. Entrepreneurs improve economic efficiency by:
(a) Improving processes, reducing wastes, increasing yield, and,
(b) Bringing about technical progress, that is, by altering labor-capital ratios. You are aware that if labor is provided with good implements (capital), its productivity increases.
What are the various success factors for entrepreneurs?
Success factors for entrepreneurs: Several success factors are apparent from research on innovation and entrepreneurship. We now have fairly solid evidence of what it takes to succeed in a new venture, and although there will always be exceptions, most new ventures succeed because their founders are capable individuals.
1. The Entrepreneurial Team: At the top of the success factor list is the “entrepreneurial team”. The term team is used because, more often than, not entrepreneurs do not start businesses by themselves; they have teams, partners, close associate, or extensive Networks of advisers. In major studies of entrepreneurs in the United States, Canada, and Europe, between 60 and 70 percent of all technology-based ventures were started by the founder with at least one panner or cofounder. Those in nontechnical enterprises (e.g., personal services or merchandising) were less likely to have partners or cofounders; yet they were well networked with associates or expert advisers.
An entrepreneurial team is usually headed by an individual who provides the critical profile of success. This focal entrepreneur typically has an above-average education, with about 35 percent of technical entrepreneurs holding graduate degrees. Most entrepreneurs started their businesses when they were in their 30s, and they had solid job experience. Also, nearly two-thirds of those studied in the United States had attempted a new venture before, and slightly fewer Canadians had made an earlier attempt of some interest, far less than half of those from Europe had previously tried to start a business.
Most technical entrepreneurs tend to start businesses closely related to what they did in previous career positions. Those in non – technical areas often leverage their experience in marketing, merchandising, or a professional service area such as insurance or finance. We can infer that success is closely tied to a solid knowledge base and substantial experience in related fields of endeavor.
They will also have well-developed social and business relationships, and therefore have a strong foundation for building a team or support network. This finding was reinforced in studies of Silicon Valley firms where researchers found entrepreneurs to have good relationships with vendors, potential customers, financiers, bankers, attorneys, and their competitors.
2. Venture Products or Services: Nearly all successful ventures start small and grow incrementally; few “gear up” with the substantial organization for a big-bang start. Increment expansion of products and services also tends to stay within the bounds of positive cash flow. Products tend to have strong profit potential with high initial margins rather than small margins that require a substantial volume of sales to meet profit objectives. Service businesses retain good margins by effective cost controls and well- monitored overheads.
In each instance, products and services tend to display a distinctive competency in their industries. This is important because very few entrepreneurs start businesses in already competitive situations. This observation relates to an earlier point that we emphasized; Entrepreneurs must assure themselves of a niche for- their services. A corollary to this rule is that successful entrepreneurs should “stick to their knitting” by concentrating initially on one distinct product or service, making it successful before diversifying.
From an investor’s viewpoint, the product or service idea is secondary to the entrepreneur. A popular expression among investors is that they would rather “hack a first-rate entrepreneur with a second-rate product than the other way around”. This guideline does not mean the business concept can be weak, but it does suggest that investors must have considerable confidence in the entrepreneurial team before buying into the venture.
3. Market and Timing: Successful entrepreneurs tend to have a clear vision of both existing and potential customers. A crucial aspect of planning is to have a well-documented forecast of sales based on sensible projections at each stage of incremental growth. A charismatic entrepreneur loaded with talent and a great idea will not convince investors that a venture is Viable without valid market research. There are no shortcuts; innovation requires market demand, not simply a good idea.
The market evolves, and as noted earlier, there are windows of opportunity that can lead to exceptional success. Misjudging those windows can result in dismal failure. The market potential is critically influenced by the timing of new products or services. Timing pertains to when products or services are introduced, how they are priced, how they are distributed, and how they are promoted.
4. Business Ideology: From an entrepreneur’s perspective, every venture has an ideology, a philosophy, or rationale for existing. Although the ideology may be extremely difficult to quantify, it is nevertheless important. A business ideology is defined as a system of beliefs about how one conducts an enterprise.
These beliefs include a commitment to providing customers with value, the ability to take calculated risks, the determination to grow and to control the fate of the business, the propensity to elicit cooperation among team RH, embers, and the perspective of creating wealth, realistically. A business ideology may not be entirely defined by these notions, but failure is often blamed as one of them. For example, rarely do we hear that a business failed because the product was flowed, but more often because the firm lost track of its commitment to customers
Entrepreneurship Development Important Extra Questions Long Answer Type
What is Market Plan? Explain the main Elements of the Marketing Plan?
The Market Plan: The market plan describes an entrepreneur’s intended strategy, it builds on market research and distinct characteristics of the business to explain how the venture will succeed. Some issues addressed in the research section may be reserved for the market plan, such as describing a market niche. This section usually focuses on specific marketing activities. It describes pricing policies, quality image, warranty policies, promotional programs, distribution channels, and other issues such as service-after-sale and marketing responsibility. These are described as under:
Prices: Well-defined prices are obviously necessary to project sales volume and financial performance. As discussed earlier, prices also indicate quality and product image, and depending on the channels of distribution, prices will reflect the nature of the business. Pricing policies relate to bulk, wholesale, retail, and discount methods used to set prices. Such methods as cost-plus pricing or setting prices to match those of competitors indicate how entrepreneurs will make strategic pricing decisions.
Promotions: Advertising and promotional strategies must be consistent with the product or service image. For example, quality office furniture is not apt to be sold through discount newspaper ads. Choosing proper media for advertising is one aspect of the plan, but introductory strategies should relate to the start-up stage. For example, a new software program may be introduced at computer trade shows and be demonstrated at seminars offered to select clientele.
Software developers may also sponsor business contests, set up displays in book stores or computer retail outlets, or provide educational versions of programs to universities. The promotional mix is determined by a conscious decision, selecting various promotional tools from advertising, personal selling, public relations, point-of-purchase displays, sampling, and direct-mail solicitation, among others.
Distribution Channels: If distribution channels have not been identified earlier, they must be described here. For example, unusual gift items ranging from greeting cards to imported beef fillets are sold through catalogs, but Hallmark opened chain stores in shopping malls nationwide to market gifts and greeting cards. Liz Claiborne, Inc., reached $ 3 billion in sales by positioning fashionable women’s clothing in department stores through regional distribution centers, but recently the company opened a chain of exclusive stores supplemented with catalog sales.”
Service and warranty considerations: Most retail stores offer warranties and service-after-sale guarantees in the event a product requires repair or adjustment. Often the distinguishing characteristic of a car dealership is its service and – warranty policies. Appliance dealers may also base their strategies on follow-up services and warranties. Telemarketing companies invariably offer money-back guaranteed because customers cannot evaluate products before they buy. On the other hand, there are many cash-and-carry discount outlets that sell “seconds” or flowed merchandise, and customers rarely expect warranty service.
Service companies also compete on warranty and service-after-sale policies. Software firms, for example, typically have “hotlines” for answering customers’ inquiries. Because software programs are updated with how or enhanced versions, or trade-in allowance. In estate planning, a recent new service in which consultants help clients plan their investments, service after sale includes periodic reviews of clients portfolios, investment newsletters, and special reports on tax laws and legislative activities.”
Marketing Leadership: The market plan should address the way in which organizational members will be involved in the marketing effort. From a strategic perspective, investors want to know who is going to actually take the lead in making customer sales. If the venture requires a sales force, then issues such as sales training, commission structures, recruitment, and sales management become important.
Investors and lenders are accustomed to seeing too general patterns in poor business proposals that get rejected. First, there are technically competent entrepreneurs who have great ideas but who know every little about marketing. Their plans provide overkill on product attributes but ignore marketing strategies. Second, there are super salespeople with brilliant ideas who are overenthusiastic about projects.
Explain the various factors essential for the success of a business enterprise especially in a service sector/venture.
Factors essential in service ventures: There are various critical factors that helped entrepreneurs succeed. The nature of a service venture is different from a Product- based company in that services require exceptional human resource skills. Services can usually be initiated with low-entry capital requirements, but having the right people is vital. A good service idea can also be easily copied; therefore, a competitor flock to a growth market, having committed people will often make the difference between success and failure.
Human-resource issues are far-reaching, but we will explore several focal points for new ventures. During the start-up planning phase, for example, an entrepreneur must ventures. During the start-up planning phase, for example, an entrepreneur must establish a vision that everyone will work to fulfill. This may relate to a distinct competency of quality service in a particular kind of business.
At the outset, entrepreneurs must firmly establish sound policies for customer service. Service firms rely on capable staff, and this need requires skills at hiring, training, and motivating employees. The leadership skills of an entrepreneur are vital to position the service firm for growth. Although we cannot begin to cover each topic in detail, we can describe its importance to new service ventures.
Creating the vision: A good way to fail quickly in a new business is to start without a clear vision. A vision encompasses the value that an entrepreneur will provide for his or her customers, and if that service is achieved, the encompasses the result the entrepreneur will achieve without this basic vision, start a business on a whim is tantamount to shooting dice; you are relying on chance to dictate fate.
Vision is vital but it must be orchestrated through effective planning and a strong commitment to the image of service one wants to project. The image is a result of conscientious planning to provide value to customers there has to be a clarity of direction that provides service goals for human endeavor.
Effective Hiring: Three things are generally needed to get a business started. New ventures need a good product or service based on a sound vision. Sufficient money to pursue that venture, and people-good people.
Research indicates that patterns of employment for most small businesses are relatively fixed at the moment of opening. This generalization is particularly true for personal service enterprises that start and remain small. Consequently, a beauty salon or clothing boutique will open with a few carefully selected employees, and although these employees may be replaced, their numbers and skills will remain fairly constant. Owners are, never the less, responsible for staffing the enterprise no matter how small.
The pattern of employment for smaller enterprises is that owners will initially hire one or two full-time persons and supplement busy seasons usually will be skilled or experienced in the trade. The rest often will have to be trained. Unfortunately, small business owners rarely follow good personnel practices in hiring, and even less often provide adequate training.
Many full-time employees are hired from among friends or family members. This practice provides no assurance of having employees with the required skills or commitment to make a business a success. Part-time employees may come from unemployed walking or students looking for supplemental income. Too many entrepreneurs tend to hire them as a matter of convenience, not as a conscious effort of staff their enterprises.
Perhaps a small firm can survive without systematic hiring and training practices but entrepreneurs will more often experience high turnover among employees who are poorly prepared to do a good job. Also, there is a fundamental problem with finding highly motivated long-term employees because smaller firms can seldom offer high wages, good benefits, or opportunities for advancement.
When the entrepreneur is not in a position to hire or train employees, and when the business is too small to support an organization, another interesting option is to lease personnel. This is a recent innovation in staffing that is, itself, an entrepreneurial service. Unlike temporary service agencies, leasing firms actually hire hundreds of employees, train them, and provide a full range of employee benefits. The leasing company places employees in a client’s firing, thereby relieving an owner of hiring, firing, training, and managing a complex system of compensation and benefits.
For growing companies, increased sales mean changes in human resources and substantial responsibility for attracting, hiring, training, and retaining employees during the early stage of planning, it is important to clearly understand that there is no way companies can grow if entrepreneurs try to do everything themselves. To resolve this difficulty, the first step is for entrepreneurs to purposely describe their roles and how those roles will change with growth.
The second step is to write employee job descriptions for the first stage of business. The third step is to write expanded job descriptions for employees whose jobs will change with growth. These descriptions will help identify how responsibilities will change and therefore opportunities for career development. They will not only attract better- applicants who want a challenge, but also will help clarify how the entrepreneur and the employee want a challenge, but also will help clarify how the entrepreneur and the employee will relate to one another over time.
High-growth enterprises are unlikely to follow the recruiting methods of smaller firms, for two reasons. First, professional and personal service firms that remain localized usually will not need highly skilled individuals They can therefore recruit through local labor markets. Second, small firms that do not intend to grow will not develop management positions for functional specialists in areas such as marketing operations, or finance.
On the other hand, growing firms will need functional specialists, and in high-tech fields, they will often need research scientists engineers, and other technical specialists. For these firms, recruiting through newspaper ads in the local labor market is pointless. Professional and managerial talent is found through national searches professional societies conferences, university placement services, and networking.
The last method, networking is particularly fruitful as entrepreneurs socialize with other entrepreneurs, do business with their counterparts in other firms, and develop contact with suppliers and customers who may become potential applicants. Net-working provides an inside track to key people, but the entrepreneur still has the responsibility to recruit them and help them mold their entrepreneurial careers.
Training: Personal service firms tend to be structured around the skills of the founder. For very small firms, such as independent beauticians or professional photographers, success hinges on the reputation of skilled individuals. When the expansion occurs, owners have two options: they can hire comparably skilled individuals or train apprentices. Either option can be extremely difficult to accomplish.
For example, if a professional photographer wants to hire someone who can reinforce his or her established reputation, it means getting someone as skilled as the founder, and hiring such a person translates to a rather high cost. The new employee will demand a substantial income, and the owner initially will have to share clients and income, if a less skilled, person is hired, then the owner must train the employee. In either case, initial costs can be high, and there will be inefficiencies until the employee becomes proficient transient employees enjoy wages well in excess of the minimum wage required by law. In fact, the minimum wage has become meaningless in these circumstances.
Unlike fast-food restaurants and discount retailers, computer service firms, telecommunication specialists, antique boutiques, health clinics, and many other enterprises must have competently trained employees. Moreover, service and technical ability may be comparably important so that, for example, an owner of an antique boutique may require employees who are at once experienced inexpensive antiques and able to work with knowledgeable customers.
A computer service firm may require employees who are skilled in technical aspects of hardware, who are capable of working with a substantial range of software, and who also have the human relation skills to “service and sell” to end-users that range from high school students to corporate executives. Finding employees with all these attributes can be extremely difficult.
How many skilled computer technicians with sales experience exist? How many experts are therein? antiques who also want a job? The same questions apply to hundreds of professionals in equally diverse fields. A safe assumption, therefore is that ‘ideal’ employees rarely can be found, and it falls to an entrepreneur to find those with potential who can be trained.
Training poses two problems: first learning how to seek out and hire people with potential, and second, establishing effective methods of employee training.
Explain in detail the entrepreneurial values and attitudes.
Entrepreneurial values and attitudes: In any explanation of human behavior, the reference to values and attitudes is inevitable.
Values: Values are general ideas about all that is deemed desirable/ important by an individual or a collectivity. The term is used in the plural sense, that is there are various types of values. Because they are general they do not specify how one should act in a particular situation. When the value is shared across the majority of a collectivity be it the organization. Professional body or even a nation in the sense that these are upheld professed, included. Practiced and rewarded, they comprise “culture;” as they take roots. They become so deep-seated that they begin to govern individual behavior. In any discussion on economic development and social change, the role of value is inevitable. –
These values underlie the human quest for knowledge, As such, these values imply whether and how must a society respects and rewards pursuits in education in general and science and technology in particular, you would appreciate that a society that value education, science, and technology is like to be more entrepreneurial than the one that does not. An important aspect of these values is avoidance or embracing of uncertainly. Any question science, technology, and even the outcomes of entrepreneurial endeavor are subject to a host of unseen circumstances. Daring and risk-taking become inevitable aspects of the quest for knowledge and all advances.
Aesthetics: It is a scientific fact that man cannot create matter. What he does is that through his ingenuity and creativity he find its want-satisfying properties and change its form to create good and services for consumption and need satisfaction. What, however, we, use is the whole ‘ like figure on the pipe like figure, as you grew up you learned to draw branches and leave to make it look more real; as you perfected the extent and advancement of entrepreneurial activity. It includes respect for nature and concern for maintaining ecological balance, sustainability, and harmony between economic progress and the environment.
Moral Values: Honesty, Fairplay, integrity, peace, truthfulness, commitment, concern for other, etc. are the value that provides us the critical a to judge what is wrong and what is right. One often doubts whether business and morality go together yet one knows that these values are desirable.
In today’s context when business performance is based on the combined efforts of not just the people within the organization but also on the collaborative efforts of the geographically dispersed (in many cases even internationally dispersed) network of suppliers and distributors it -is not the management by controls but management by values that will be effective. Thus nowadays, organizations make conscious efforts in defining, communicating, and encouraging the practice of some core values.
Political values: Democracy is a desirable value as it fasters individual freedom and the right to equality. That is why in the modern interpretation of development, political freedom is also considered as a factor, societies that value individual freedom is fertile ground for entrepreneurship, we have seen that entrepreneurship is a great leveler as it provides the opportunity to rise to those section of the society that does not have recourse to property and interest income.
The socialized face of power reflects the political value of decentralization and empowerment and concern for the upliftment of those who are at the bottom of the pyramid, organization that creates a culture of decentralization and people empowerment become highly dynamic, creative and entrepreneurship individuals can empower themselves by taking recourse to entrepreneurship. The societies that are hierarchically ordered are exhibit high power distance stifle personal growth as they demand obedience to authority and tradition rather than encouraging the habit of questioning suggestion seeking and giving and collaborative problem solving and teamwork.
Social Values: Concern for people in distress wherever they may be is the central value that drives help and rescue operations in case of natural disasters. These values make a man a truly social animal. These values include respect for the norms of collectivity and placing the society ahead of the self. These include being responsive to the needs and expectations of society and fulfilling one’s social responsibilities.
In dealings with people, these values include openness trust, compassion, empathy brotherhood. Solidarity and so on. Social value defined role – variations across family caste and sex. The societies that adhere to rigid stratification of the roles and occupations along these lines are not very suitable for the flowering of entrepreneurship, on the other hand, the societies that allow mobility auger well for the development of entrepreneurship. Entrepreneurship is not and cannot be an exclusive preserve of the privileged few on the basis of their birth in a particular caste family all as a particular sex.
Economic values: These values imply a desire for material well-being by engagement in productive activities and include wealth accumulation and capital formation. Consumption and saving are the two most important behaviors that are governed by these values. Economics value also governs the institution of property – Who owns the society’s resources? How would these resources be distributed? What uses these resources be put to-toward producing “guns” or toward producing “bread”? We have seen that capitalism or free-market economics are a very good ground for the flourishing of individuals’ Entrepreship.
These values then form the basis of exchange within and across economics. These values to an extent determine whether we would follow inward-looking growth or we would proactively integrate with the world economy to benefit from the opportunities arising from globalization.
Together these values comprise a social value system. Some values are interdependent such as democracy freedom and equality, others may be arranged in order of preference, for example in some societies, observing, trading may be considered more important than individual freedom. Different societies ‘ organizations/collectivities, as well as different individuals, may subscribe to different values but once their value system is known it becomes easier to understand and predict behavior.
Values tend to be stable yet the values do and can be changed in fact those societies that are hot able to bring about the mindset/ value system change in sync with the changing times stagnate and lag behind. Are there any values that typify entrepreneurial culture? Alternatively, what are values that an entrepreneurial society “Consistently demonstrates? We take the example of America, inarguably ‘ among the most entrepreneurial societies of the world.
Attitudes: Attitudes refers to tendencies to feel and behave in a particular way toward the object of the attitudes in a consistent manner. It may vary from like/dislike for a thing say, tea, to positive or negative views about a person or a circumstance and maybe a generalized enthusiasm or lack of it for life. (Remember” The glass is half empty “vs. “The glasses half full” “attitudes?)
Attitudes, therefore have three characteristics:
(a) Attitudes persist and are therefore difficult to change.
(b) They lie anywhere on either side of the scale very unfavorable to favorable; and,
(c) They are directed toward something or someone about whom we have strong feelings. Such a feeling may develop as a result of the information or knowledge we may have about the person or the things that do not really matter, whether the information itself was correct or real.
Values represent a sociological variable whereas attitudes have a lot to do with a person’s psyche. Value in as much as they represent what is virtuous or desirable, tends to be positively loaded whereas attitude can be either positive or negative. In terms of their influence on behavior, attitudes seem to be exerting a more proximate influence vis-a-vis values.