Organisation Of Commerce & Management Solutions Solutions for Class 12 Commerce Business studies Chapter 8 - Entrepreneurship Development

Answer:

Correct option- c
The word ‘entrepreneur’ is derived from the French word ‘entreprende’.

Explanation:
The word “entrepreneur” is derived from the French word “entreprende”, which means to undertake. Thus, it can be said that an entrepreneur is a person who undertakes the risk of running a business.

Answer:

Correct option- a
‘Entreprende’ means to undertake.

Explanation:
The French word “entreprende”, means to undertake. The word “entrepreneur” is derived from this word. Accordingly, an entrepreneur is a person who undertakes the risk of operating a business; who coordinates with production resources and who undertakes innovation.

Answer:

Correct option- c
The oxford English dictionary defines an entrepreneur as the director of a business.

Explanation:
According to the Oxford English Dictionary, an entrepreneur is defined as the director or manager of a business, as he/she is the person who sets up and manages the business. 

Answer:

Correct option- b
The term entrepreneur was first used by R. Cantilon.

Explanation:
Richard Cantillon, an Irish economist, first used the term “entrepreneur” in the 18th century. According to him, ‘‘an entrepreneur is the person who buys factors services at certain prices with a view to selling its product at uncertain prices.’’

Answer:

Correct option- c
13 functions of an entrepreneur were enumerated by Kilby Peter.

Explanation:
Kilby Peter identified certain roles and functions of an entrepreneur in relation to an enterprise. According to him, these functions such as purchasing inputs, industrial engineering and financial management, if followed, can lead to a successful organisation.

Answer:

Correct option- a
The inner urge of a person to do something is initiative.

Explanation:
Initiative implies taking the first step towards something, i.e., starting up activities like production, providing services or working for the welfare of the society. It is one of the core competencies of an entrepreneur. An entrepreneur is a person/individual who takes the initiative of setting up a business.

Answer:

Correct option- b
Entrepreneurial attitude is measured in terms of the individual’s attitude toward opportunity recognition.

Explanation:
An individual is said to have entrepreneurial attitude when he/she has the characteristic ability of recognising opportunities.

Answer:

Correct option- b
The basic element of the process of motivation is motive, behaviour and goal.

Explanation:
The three main elements of motivation are motive, behaviour and goal. Herein, the motives of an individual influence his or her behaviour in achieving the desired goal. Motivation refers to an ongoing process and the motive is the inner state of mind that directs the activities of an individual towards a desired goal.

Answer:

The above columns can be correctly matched as:

a. Entrepreneurship is an economic activity, as an entrepreneur produces goods and services and sells them in the market with the objective of earning profits. Hence, we can say that it is an economic activity.

b. An entrepreneur is highly optimistic, as he/she never loses hope in times of failure and quickly learns from his/her mistakes. He/she looks at things with a positive attitude.

c. Sense of belonging is an external value. It is a part of the List of Values (LOV), which was prepared by some researchers. Other values of LOV include excitement, fun and enjoyment in life, warm relationships with others, self-fulfilment, sense of accomplishment, feeling of being well respected, security and self-respect.

d. Self-fulfilment is an internal value. Other internal values also include sense of accomplishment and self-respect.

e. Motivation can be positive as well as negative. A person can be motivated using positive techniques like rewards, incentives and promotions and negative techniques like warning and demotions. The kind of motivation to be followed depends on the needs and attitude of the employee.

Answer:

An undertaking or adventure involving uncertainty and risk and requiring innovation – Enterprise.

Explanation:
An enterprise is an organisation or industry that works for earning profits. It undertakes the innovation of goods and services along with the risk involved.

Answer:

A function of creating something new for an economic activity – Innovation.

Explanation:
Innovation is one of the most important functions of an entrepreneur. Through innovation, the entrepreneur either produces new goods and services or upgrades the existing goods and services as per new trends with a view of creating something new for the society.

Answer:

A person who is innovator who introduces new combination of means of production – Entrepreneur.

Explanation:
An entrepreneur is an innovator, as he introduces a new combination of means of production. This combination of means of production can be made by introducing new products, new techniques, new markets, new sources of raw materials, etc.

Answer:

The process of enhancing entrepreneurial skills and knowledge through structural training and institution-building programmes – Entrepreneurial development

Explanation:
Entrepreneurial development refers to the development of entrepreneurial skills and knowledge through various training and development programmes. The prime objective of entrepreneurial development is to enlarge the base of the entrepreneurs so as to increase the pace at which new ventures are started.

Answer:

The process that motivates a person into action and induces him to continue the course of action for the achievement of goals – Motivation.

Explanation:
Motivation is the process of encouraging or urging employees to perform to the best of their capabilities so as to achieve the desired goals of the organisation. It is a continuous process, as human wants are unlimited and never ending.

Answer:

Answer:

1. Values are a set of beliefs and thoughts that are socially or individually acceptable and preferred. To put in other words, it is a specific code of conduct or behaviour which is preferable personally, or by society, over the opposite code of conduct. Some researchers developed a List of Values (LOV) comprising nine values such as excitement, a sense of belonging and self-fulfilment. These values are further subdivided into three main categories namely, internal, external, and fun and excitement values.

2. The main objective of an entrepreneur is to achieve organisational objectives by putting in maximum efforts. For this, the entrepreneur needs to have the required skill, ability and willingness. Skill and ability come with educational qualification or training, whereas willingness comes with motivation. Thus, it can be said that motivation is important for the development of an entrepreneur.

3. The three terms “entrepreneur”, “entrepreneurship” and “enterprise” are different yet interrelated to each other. An entrepreneur refers to a person or an individual who starts up a business. He/she is the one who takes up the basic idea of setting up the business. In the process of setting up the business, he/she undertakes risk, coordinates production resources and undertakes innovation. This whole process of setting up a new business is called entrepreneurship. The final result, i.e., the business established after undertaking the process of entrepreneurship, is called an enterprise. Thus, an entrepreneur is a person who undertakes the process of entrepreneurship to set up an enterprise.

Answer:

1. Training broadens the vision of entrepreneurs – True

Explanation:
The above statement is correct. Training enhances the skills and competences of an entrepreneur, as he/she learns through practical exposure. With training, an entrepreneur gains experience by interacting with people inside as well as outside the industry. Thus, we can say that training makes an entrepreneur efficient.

2. Attitude builds an entrepreneur – True

Explanation:
Yes, it is correct to say that attitude builds an entrepreneur. Attitude of an entrepreneur is judged by how quickly he/she identifies new opportunities. There are some traits that a successful entrepreneur should have in his/her attitude such as passion for the business, trustworthiness, timely decision-making quality and strong work ethics.

3. Motivation is an important factor in the development of an entrepreneur – True

Explanation:
The basic objective of an entrepreneur is to accomplish the goal of the organisation for which he/she needs skills and willingness. Skills can be achieved through education and training, while willingness is something that comes with motivation. An entrepreneur should be motivated from within to work towards the fulfilment of the organisational goal. Hence, we can say that motivation leads to entrepreneurial development.

Answer:

Following are the important competencies of an entrepreneur:

i. Opportunity - An entrepreneur is the one who identifies opportunities and works on them to convert them into realistic achievable goals.

ii. Initiative - An entrepreneur is an initiator. This means that he/she is the one who starts up an enterprise.

iii. Problem solver - An entrepreneur is a problem solver. He/she has the most efficient solution to any problem and does not allow the problem to come in the way of achieving goals.

iv. Persuasiveness - An entrepreneur, with his intelligence and logical reasoning, convinces his subordinates and superiors to believe in his ideas.

v. Knowledgeable - An entrepreneur is a knowledgeable person who works continuously to keep himself/herself updated with latest information and trends.

Answer:

Entrepreneurial development programmes (EDPs) are the ones that primarily focus on developing and enhancing the entrepreneurial role. They help the entrepreneurs by motivating them to acquire necessary skills and attitudes so as to make the best use of their capabilities and play the entrepreneurial role efficiently.

Following are the objectives of the entrepreneurial development programme:

i.  Encouraging entrepreneurship throughout the nation

iii.  Working towards the betterment of socially backward areas

iv.  Generating and providing employment opportunities

v.  Increasing the role of small- and medium-scale industriesa

Answer:

Motivation refers to the act of inducing and motivating an individual to follow a particular course of action for the accomplishment of organisational goals.
The factors that motivate an entrepreneur can be classified as internal and external factors.

Internal Factors

i. Passion or desire to do something

iii. Proper education and technical knowledge

i. Financial help from the government

ii. High demand for the product

iii. Easy availability of raw materials, infrastructure and credit

Answer:

An entrepreneur is needed in the society because of the following reasons:

i. Innovation - The entrepreneur provides goods and services to customers by introducing new and innovative techniques of production which facilitate economic activities.

ii. Bears risks - By venturing into the new and uncertain areas, the entrepreneur also bears the risks involved in the project.

iii. Adds to the economic development - By creating employment opportunities in the society, an entrepreneur contributes towards the economic development of a country.

iv. Market development - The entrepreneurs constantly strive to establish new techniques of productions and products which in turn helps in the market growth and development.

Answer:

According to Cantillon, “An entrepreneur is a person who buys factor services at certain prices with a view to sell the product at uncertain prices”.

Characteristics of an entrepreneur are as follows:

i. Foresees future- An entrepreneur can look into the future and identify upcoming opportunities and threats. Thus, this quality helps an entrepreneur to take proper and timely decisions.

ii. High goals- An entrepreneur always sets high goals and tries to achieve them in the best possible manner. He/she also removes the hindrances that come in his/her way, thereby achieving the objectives so framed.

iii. Positive attitude- An entrepreneur works with a positive attitude towards all activities. He/she takes all decisions confidently and never loses hopes during failures.

iv. Hardworking- An entrepreneur works hard to achieve organisational goals on time. He not only works for long hours but also handles the problems independently.

v. Creative- An entrepreneur is creative in nature. He/she either produces new things or upgrades the existing things in a new way.  Thus, innovation is an essential characteristic of a successful entrepreneur.

vi. Good communicator- A successful entrepreneur needs to be a good communicator as he is required to communicate effectively with various parties such as buyers, sellers and employees.

Answer:

Entrepreneurship is the process where an entrepreneur derives some new way to produce goods and services or brings about innovation in order to earn profits. In words of B.C.Tandon, ‘entrepreneurship is the ability to create something new, organizing, coordinating and undertaking risks and handling economic uncertainty’.

Characteristic of entrepreneurship are as follows-

i. Economic activity: entrepreneurship is an economic activity as entrepreneur provides goods and services for the satisfaction of human wants with the objective of earning profit.

ii. Innovation: Entrepreneurship is all about innovation such as innovation in method of production, finding new markets, looking for new sources of supply of raw materials, etc.

iii. Creativity: Innovation comes along with creativity. Entrepreneurship is regarded as a highly creative activity as it is said that entrepreneurship adds or creates 'value'.

iv. Building of organisation: In the entrepreneurship, various factor of production are arranged and managed for the successful running of the business.

v. Bearing risk: By venturing into the new and uncertain areas, the entrepreneur bears the risks involved in the project. Thus, entrepreneurship involves risk bearing.

vi. Leadership quality: Leadership forms an important characteristic of entrepreneurship as an entrepreneur is not only required to earn profits but also to lead and manage the organisation efficiently.

Answer:

Entrepreneurial development is the process of sharpening entrepreneurial skills and knowledge through numerous training and institution-building programmes. The process of entrepreneurial development includes:

i. Training– It involves a set of instructions and guidelines to improve the efficiency of an entrepreneur. It broadens his/her vision by offering experience in different fields and builds the necessary skills of new entrepreneurs. It not only includes training programmes for them but also, imparts knowledge and education to work in an efficient manner.

ii. Entrepreneurial Development Programme (EDP)- Such programmes help an entrepreneur in acquiring new skills and capabilities along with developing and enhancing the entrepreneurial role so as to perform in a better and efficient manner. Some of the objectives of EDPs are as follows.

1. Encouraging entrepreneurship throughout the nation

2. Making optimum use of scarce resources

3. Working towards the betterment of socially backward areas

4. Generating and providing employment opportunities

5. Increasing the role of small- and medium-scale industries

iii. Specialised entrepreneurship development agencies- These are specialised agencies set by the government for the development of entrepreneurs. Some of such agencies are as follows.

1. Institute for Rural Management and Administration

2. National Small Industries Corporation

3. Small Industries Service Institutes

Answer:

The role of entrepreneur and entrepreneurship in economic development can be highlighted with the help of the following functions performed by entrepreneurs:

i) Generating Income- Economic development of any economy is related to the increase in its GDP. As an entrepreneur takes up production activities, he/she directly contributes to the income.

ii) Forming Capital- The GDP of an economy is directly related to the rate of capital formation. An entrepreneur invests his/her own savings and mobilises the savings of others. Thus, an entrepreneur contributes to the process of capital formation.

iii) Generating Employment- By setting up a business, an entrepreneur provides employment directly or indirectly. He/she provides employment to labourers for building a factory or hires people who can work in the production process.

iv) Creating Business Linkages- An entrepreneur helps in creating a chain of business linkages. An enterprise provides opportunities to both the suppliers of the raw materials and the marketers who will be selling the final product.

v) Increasing Efficiency- An entrepreneur improves economic efficiency by avoiding the wastage of resources. He/she focuses on the optimisation of resources and aims at producing greater output from the available inputs. He/she also works on the technological aspect to contribute to the productivity.

vi) Increasing the Range of Economic Activities- Entrepreneurs always look out for fresh areas to invest their savings or to start up a new business. By doing so, they help in increasing the scale of economic development.