Directorate of Distance Education University of Jammu Jammu SELF LEARNING MATERIAL FOR M. COM - Ist Semester ENTREPRENEURSHIP AND NEW VENTURES For the Examination to be held in 2019 onwards Course No. M. COM-E116 Unit : I - IV Lesson No. 1 to 20 Co-ordinator, M.Com Prof. Sandeep Kour Tandon Room No. 111, 1st Floor, Directorate of Distance Education, University of Jammu http:/www.distanceeducationju.in Printed and published on behalf of Directorate of Distance Education, University of Jammu, Jammu by the Director, DDE, University of Jammu, Jammu 1 ENTREPRENEURSHIP AND NEW VENTURES Lesson Writer : Dr. Sumeet Kour Assistant Professor in Commerce Cluster University of Jammu. Cintact No: 7006239524 c Directorate of Distance Education, University of Jammu, Jammu, 2019 onwards. • All rights reserved. No part of this work may be reproduced in any form, by mimeograph or any other means, without permission in writing from the DDE, University of Jammu. • The script writer shall be responsible for the lesson/script submitted to the DDE and any plagiarism shall be his/her entire responsibility. Printed at : S. K. Printing Press / 2020 / Qty. 2 DETAILED SYLLABUS Course No. M.COM-E116 Title : Entrepreneurship and New Ventures Credit : 4 Max. Marks : 100 Marks Time : 3.00 Hrs. External : 80 Marks Internal : 20 Marks Syllabus for the examination to be held in Dec 2019 onwards. OBJECTIVE: The academic goal is to develop the skill necessary for evaluating and creating a new venture, with the ability to communicate the endeavor effectively through written and vertical presentation. At the end of this course, students will be able to evaluate business opportunities as both an entrepreneur and an investor, within start- ups and established companies. Page No. UNIT - I: THE FOUNDATIONS OF ENTREPRENEURSHIP 1-138 Entrepreneurship - lntroduction to entrepreurship, benefits and drawbacks of entrepreneurship, drivers of entrepreneurship, cultural diversity of entrepreneurship; Managing the pitfalls of entrepreneurship, models of entrepreneurship; Creativity - Creative thinking, barriers to creativity, creativity and innovation, process of innovation; Corporate entrepreneurship - Concept and aproaches; Role of small business in economic development; Entrepreneurial environment. UNIT-II :BUILDING THE BUSINESS PLAN 139- 274 The concept of business planning, need for developing business plan, what lenders and investors look for in a business plan; Growth model for new ventures; Fundamentals for good feasibility plan; Major components of a feasibility plan; The product development process; Legal requirements for setting up a venture; Product protection: Patents, trademarks & copyrights; Exit strategies; Ethical issues in setting new ventures. 3i UNIT-III : ENTREPRENEURIAL DEVELOPMENT 275-382 PROGRAMMES (EDPS) Objectives, relevance and phases of EDPs; Misconceptions about EDPs; Factors affecting success of EDPs; Role of EDP: Stimulatory role, supportive role, sustaining role & socio-economic role; Operational difficulties of EDPs; Strategies to overcome the problems; Entrepreneurial training; Models for entrepreneurial development programmes; Institutional arrangements for development of new ventures: NIESBUD, EDI, TCOs, MSME; Schemes for women entrepreneurship; Rural entrepreneurship - Concept, constraints and schemes for rural entrepreneurship. UNIT-IV: MANAGING GROWTH AND TRANSITION 383-527 Oragnisational life cycle from entrepreneurial perspective; Entrepreneurship beyond startup; Changing entrepreneurial roles; Managing growth and changing culture; Management succession; Strategic alliance; Merger, acquisition and initial public offering (IPO); Global opportunities for new ventures - Export, import, joint ventures, foreign licensing, franchising, countertrading, outsourcing; Strategies for going global; Barriers to international business; International trade agreements. 4ii BOOKS RECOMMENDED 1. Essentials of Entrepreneurship and small Business Management - Thomas W. Zimmerer, Norman N. Scarborough and Doug Wilson, PHI Learning Pvt. Ltd., New Delhi. 2. Entrepreneurship New Venture Creation - David H. Holt, PHI Learning Pvt. Ltd., New Delhi. 3. New Venture Creation : Entrepreneurship for the 21st Century - Jeffrey A. Timmons Stephen Spinelli, McGraw-Hill/Irwin. 4. Entrepreneurship and small Business - Michael Schaper and Thierry Vilery, John Wiley and Sons Australia Ltd. MODE OF EXAMINATION The paper consists of two sections. Each section will cover the whole of the syllabus without repeating the questions in the entire paper. Section A:- It will consist of eight short answer questions, selecting two from each unit. A candidate has to attempt any six questions and answer to each question shall be within 200 words. Each question carries four marks and total weightage to this section shall be 24 marks. Section B:-It will consist of six essay type questions with answer to each question within 800 words. One question will be set atleast from each unit and the candidate has to attempt four. Each question will carry 14 marks and total weightage shall be 56 marks. iii5 MODEL QUESTION PAPER ENTREPRENEURSHIP AND NEW VENTURES Time : 3 hours Max. Marks : 80 SECTION-A Note :- Attempt any six questions. Each question carries four marks. Answer to each question should be within 200 words. 1. Explain the benefits of entrepreneurship. 2. Explain integrated model of entrepreneurship. 3. Explain the fundamentals of good feasibility plan. 4. What do you mean by exit strategies ? 5. Discuss the objectives of entrepreneurial development programmes (EDPs). 6. Explain the misconceptions about EDPs. 7. Explain the term initial public offerring (IPO). 8. Differentiate between merger and acquisition. SECTION-B Note :- Attempt any four questions. Each question carries 14 marks. Answer to each question should be within 800 words. 1. Explain the relationship between creativity, innovation and entrepreneurship in detail. 2. Discuss in detail the major components of a feasibility plan. 3. Explain in detail the institutional arrangements for development of entrepreneurship.. 4. Discuss the global opportunities available for setting new ventures. 5. What is rural entrepreneurship.? Discuss the various schemes introduced by government related to rural entrepreneurs. 6. Discuss the strategies adopted by entrepreneurs for going global. iv6 UNIT- I LESSON - 1 THE FOUNDATIONS OF ENTREPRENEURSHIP ENTREPRENEURSHIP: INTRODUCTION TO ENTREPRENEURSHIP, BENEFITS AND DRAWBACKS OF ENTREPRENEURSHIP STRUCTURE 1.1 Introduction 1.2 Objectives 1.3 Entrepreneurship 1.3.1 Introduction to Entrepreneurship 1.3.2 Characteristics of Entrepreneurship 1.4 Entrepreneur 1.4.1 Meaning 1.4.2 Entrepreneurial Traits/Characteristics 1.5 Benefits of Entrepreneurship 1.6 Drawbacks of Entrepreneurship 1.7 Summary 1.8 Glossary 1.9 Self-Assessment Questions 7 1.10 Lesson End Exercise 1.11 Suggested Readings 1.1 INTRODUCTION The concept of entrepreneurship is a complicated phenomenon. Broadly, it relates to entrepreneur, his vision, and implementation. The key player is the entrepreneur. Entrepreneurship refers to a process of action an entrepreneur undertakes to establish his/her enterprise. It is a creative and innovative response to the environment. Entrepreneurship is thus a cycle of actions to further the interests of the entrepreneur. In this lesson, the concept of entrepreneurship, entrepreneur and enterprise have been discussed. Highly emphasized in entrepreneurial practice, entrepreneur business models have received limited attention from researchers. No consensus exists regarding the definition, nature, structure and evolution of entrepreneur business models. Still, the entrepreneur business model holds promise as a unifying unit of analysis that can facilitate theory development in entrepreneurship. Ventures fail despite the presence of market opportunities, novel business ideas, adequate resources, and talented entrepreneurs. A possible cause is the underlying model driving the business. Surprisingly, little attention has been given to entrepreneur business models by researchers, with much of the published work focusing on Internet-based models. No generally accepted definition of the term “Entrepreneurship Model” has emerged. Diversity in the available definitions poses substantive challenges for delimiting the nature and components of a model and determining what constitutes a good model. It also leads to confusion in terminology, as business model, strategy, business concept, revenue model, and economic model are often used interchangeably. 8 1.2 OBJECTIVES After completion of this lesson you shall be able to understand the : meaning and characteristics of Entrepreneurship meaning and traits of Entrepreneurs benefits of Entrepreneurship drawbacks of Entrepreneurship 1.3 ENTREPRENEURSHIP 1.3.1 Introduction to Entrepreneurship There are as many ways of defining entrepreneurship as has been described by writers dealing with the subject. There is no single definition of entrepreneurship. However, certain definitions of entrepreneurship cover a wider gamut and involve greater depth to understand the term. Entrepreneurship basically revolves around innovation and it should not mean inhibition or imitation. It mainly encompasses innovation that gives rise to an idea having potential economic value to the prospective customer passes innovation that gives rise to an idea having potential economic value to the prospective customer and therefore requires founding an economic organisation to pool up resources to