Andhra Pradesh BIEAP AP Inter 2nd Year Commerce Study Material 1st Lesson Entrepreneurship Textbook Questions and Answers.
AP Inter 2nd Year Commerce Study Material 1st Lesson Entrepreneurship
Essay Answer Questions
Question 1.
Explain the characteristics of entrepreneurs.
Answer:
The following are some of the important characteristics that every successful entrepreneur must possess.
1) Innovation:
Innovation is an important characteristic of an entrepreneur in modem business. The entrepreneur makes arrangements for introducing innovations that help in increasing production on the one hand and reducing costs on the other.
2) Risk-taking :
Risk-taking is another feature of an entrepreneur. He has to pay for all the other factors of production in advance. There are chances that he may be rewarded with a handsome profit or he may suffer a heavy loss. Therefore, risk bearing is the final responsibility of an entrepreneur.
3) Decision making :
An entrepreneur has to take decisions with regard to the establishment of a business its management and coordination of various resources. Every activity of the business requires decision-making. The entrepreneur has to take decisions every day which have an impact on the working of the enterprise.
4) Leadership :
An entrepreneur has to be a leader because he is such a person who organise direct, control the functions of the organisation. His personality will influence the working of his subordinates who can praise and appreciate him. An entrepreneur in his role as a leader, not only guide and counsels his persons but he motivates them to achieve goals quickly and efficiently.
5) Organisation of production :
Art entrepreneur procures various factors of production like land, labour, capital, raw materials etc. For manufacturing a product or brining out a service. He assess the viability of different production process and selects one which is most suitable.
6) Planning :
An entrepreneur is the person who plans each and everything in the business. A planning is a process which involves thinking before doing an entrepreneur decides the following : What to do? When to do? How to do? Who do a particular task?
7) Work hard :
Willingness to work hard distinguishes a successful entrepreneur from an unsuccessful one. Most of the successful entrepreneurs work hard endlessly, especially in the beginning and the same becomes their whole life.
8) Desire for high achievement and highly optimistic :
The entrepreneurs should have strong desire to achieve high goals in business. The successful entrepreneurs are not disturbed by present problems and are optimistic for future that situation will become favourable to business in future.
9) Independence :
The successful entrepreneurs do not like to be guided by others and like to be independent in the matters of their business.
10) Foresight:
The entrepreneurs should have a good foresight i.e., they visualize the likely changes take place in market, consumer attitude, technological developments etc., and take timely action accordingly.
Question 2.
Explain the functions of entrepreneurs. [A.P. Mar. 17]
Answer:
An entrepreneur performs all the functions necessary right from the generation of an idea and upto setting up an enterprise. The following are the functions of entrepreneur.
1) Formation of new producing organisation :
The function of an entrepreneur is to rationally combine the factors of production into a new producing organisation.
2) Decision making :
An entrepreneur as a decision maker takes various decisions regarding ascertaining the objective of the enterprise, sources of finance, product mix, pricing policies, promotion strategies, appropriate technology or new equipment.
3) Innovation:
Innovation is the main function of an entrepreneur. Innovation means doing new things or doing of things that are already being done in a new way. An entrepreneur puts science and technology to economic use. Innovative entrepreneurs are essential for rapid industrialisation and economic development.
4) Management:
An entrepreneur performs managerial functions such formulation of production plans, providing raw materials, physical facilities, production facilities, organizing and managing sales.
5) Risk bearing :
An entrepreneur undertakes the responsibility for loss that may arise due to unforeseen contingencies in future. He guarantees interest to creditors, wages to labour and rent to land holders.
6) Supervision, control and direction :
J.S.Mill mentions superintendence, control and direction as entrepreneurial functions. Supervision involves assembling the means, turnout maximum output at minimum cost and supervise the work. The entrepreneur has to regulate and control the flow of goods, the use of finance and machinery. He also has to control and direct the activities of the employees.
7) Planning:
Planning is the first step in the direction of setting up of an enterprise. The entrepreneur prepares a scheme of the proposed project in a formal systematic approach. The authorities, if satisfied fully with the requirements, grants legal sanction of the project.
According to Kilby, an entrepreneur performs the following major four functions.
- Exchange functions
- Administrative functions
- Management and control functions
- Technological functions
Question 3.
Explain the types of entrepreneurs.
Answer:
Entrepreneurs can be found among various sections of the society viz., farmers, artisoris, workers etc. In a study of American Agriculture, Danhof has classified entrepreneurs into four categories. They are :
a) Innovating entrepreneurs
b) Adoptive or initiative entrepreneurs
c) Fabian entrepreneurs and
d) Drone entrepreneurs.
a) Innovating entrepreneurs :
Schumpeter’s entrepreneur was of this type. He introduces new products, new methods of production and open new markets. The entrepreneurs are aggressive in nature. Innovating entrepreneurs experiments and converts attractive possibilities into practice.
b) Adaptive or initiative entrepreneur:
Entrepreneur of this type are found in under-developed countries. This type of entrepreneurs instead of innovating new things, they just adopt the successful innovations innovated by others. However, some of the innovations made by others, may not suit the needs of underdeveloped countries. In such cases, the initiative innovators may make some changes in the innovations made by innovative entrepreneur so as to suit their requirements.
c) Fabian entrepreneur:
These entrepreneurs neither fall in innovative entrepreneur category nor in adoptive entrepreneur category. These are very cautions people. These entrepreneurs are regid and fundamental in approach. They follow the foot steps of their successors. They are shy to introduce new methods and ideas. Fabian entrepreneurs are no risk takers.
d) Drone entrepreneur :
Drone entrepreneurs are lazy in adopting new methods, but Drone entrepreneurs are more rigid than Fabian entrepreneurs. They resist changes. They are laggards. They may close down their business but they dont adopt for changes. Drone entrepreneurs refuse to adopt changes.
Question 4.
Explain the relation between entrepreneur and entrepreneurship. [A.P. Mar. 17]
Answer:
Entrepreneur is the person, entrepreneurship is the process and enterprise is the creation of the person and output of the process. Though the term entrepreneur is often used interchangeably with entrepreneurship, yet they are conceptually different. The relationship between the two is just like the two sides of the same coin.
The following points highlights the relationship between entrepreneur and entre-preneurship.
- Entrepreneur is a person : Entrepreneurship is a process.
- Entrepreneur is organiser : Entrepreneurship is the organisation.
- Entrepreneur is innovator : Entrepreneurship is innovation.
- Entrepreneur is risk bearer : Entrepreneurship is risk bearing.
- Entrepreneur is motivator : Entrepreneurship is motivation.
- Entrepreneur is creator : Entrepreneurship is the creation.
- Entrepreneur is visualiser : Entrepreneurship is vision.
- Entrepreneur is the leader : Entrepreneurship is leadership.
- Entrepreneur is imitator : Entrepreneurship is imitation.
Question 5.
Explain the role of entrepreneurship in economic development.
Answer:
The role of entrepreneurship in economic development varies from economy to economy depending upon its material resources, industrial climate and the responsiveness of the political system to the entrepreneurial functions. India is a developing economy aims to decentralise industries to mitigate the regional imbalances in levels of economic development.
Small-scale entrepreneurship in such industrial structure plays an important role to achieve balanced regional development. It is clearly believed that small scale industries provide immediate large scale employment, ensure a more equitable distribution of national income and facilitate an effective resource mobilisation of capital and skills which might otherwise remain unutilised.
Role of entrepreneurship in economic development:
- Entrepreneurship promotes capital formation by mobilising the idle savings of the public.
- It provides large scale employment and helps to reduce unemployment problem.
- Entrepreneurship promotes balanced regional development.
- It helps to reduce concentration of economic power.
- Entrepreneurship stimulates the equitable distribution of wealth, income and even political power in the interest of the country.
- Entrepreneurship encourages effective resource mobilisation of capital and skill which might otherwise remain unutilised and idle.
- It also induces backward and forward linkages which stimulate the process of economic development.
- Entrepreneurship also promote country’s export trade. It is an important ingradient to economic development.
Question 6.
Explain the opportunities for entrepreneurship in Andhra Pradesh.
Answer:
Andhra Pradesh, with its rich and abundant natural resources base as well as diverse agricultural and forest wealth provides tremendous opportunities for entrepreneurs in the state. The various opportunities for entrepreneurs in A.P. are as follows.
1) Information technology:
Government of A.P. has declared Information Technology (IT) industry as an essential service under the Essential Services Maintenance Act and the industry have been exempted from power cuts. It aims to transform the state into a knowledge society and make available the benefits of IT to all citizens, especially those in rural areas. People with innovative ideas would be encouraged to set up their own IT and IT enabled services units in the state.
2) Automobiles :
A broad base of automotive equipment manufacturers and a large pool of highly trained, skilled and disciplined man power make Andhra Pradesh the desired location for automobile industries. There are more than 100 automotive component manufacturing companies in the state. The industry is highly potential and there is a plenty of demand for automobile components, hence the entrepreneurs in the state may grab the opportunities.
3) Drugs and pharmaceuticals:
The state offers excellent opportunities for the growth of pharmaceutical industry due to availability trained and skilled manpower, good infrastructure as well as research and development facilities. Hyderabad accounts for around one-third of Indias total bulk production, is considered as the drug capital of the country. It provides plenty of opportunities for entrepreneurs as govt, taken a decision for the establishment of pharma city near Visakhapatnam.
4) Mines and Minerals:
Andhra Pradesh is the second largest store house of minerals resources in India. It includes vast deposits of coal, limestone, slabs, oil and natural gas,, manganese, iron ore etc. A wide range of these minerals use in fertilisers, ceramics, abrasives, glass, foundry, oil well drilling filters and pigments. Besides the state has immense potential of untapped and under tapped minerals and provides opportunities for entrepreneurs.
5) Agriculture and Forestry :
Agriculture is the main occupation for the people in A.R Rice is the major crop in the state. Other important crops are lower bajra, pulses, cluster etc. Entrepreneurs may have many opportunities to establish units based on these products. Entrepreneurs make use of recently announced industrial policy of A.R and explore the possibilities of establishing agro based units.
6) Tourism:
A.P is truly a land of beauty and it represents Indian culture and heritage. Beaches, wild life and forests, forts, historical monuments, national parks, holy temples with architectural beauty. It provide many opportunities to entrepreneurs to start ventures related to tourism services.
7) Fisheries:
The state has stretched over the coastal area of Bay of Bengal. A vast coastal area is the main reason for sea food. The aqua culture around the coastal proved to be a rich source for sea food, which occupies a major share in exports from the state. The entrepreneurs may examine the various opportunities and explore the possibilities of setting units based on the sea foods and export the same.
Short Answer Questions
Question 1.
Explain the meaning of entrepreneur.
Answer:
The word entrepreneur is derived from the French verb ‘entrepredre’, which means to undertake. An entrepreneur may be referred to such a single person or group of persons who promote a new enterprise by collecting various factors of production and bearing the risks arising out of such venture.
Question 2.
Write one definition of entrepreneur.
Answer:
According to Peter F.Drucker an entrepreneur is one who “searches for change, responds to it and exploits opportunities and the innovation is the specified tool of an entrepreneur”.
Question 3.
Write one definition of entrepreneurship.
Answer:
In a conference on entrepreneurship held in United States, the term entrepreneurship was defined as “Entrepreneurship is an attempt to create value through recognition of business opportunity, the management of risk-taking appropriate to the opportunity and through the-communication and management skills to mobilise human, financial and material resources necessary to bring a project to function”.
Question 4.
Explain the any one characteristic of an entrepreneur. [A.P. Mar. 17]
Answer:
The following are the some of the important characteristics that every successful entrepreneur must possess.
1) Innovation:
Innovation is an important characteristic of an entrepreneur in modem business. The entrepreneur makes arrangements for introducing innovations which help in increasing production on the one hand and reducing costs on the other.
2) Risk-taking :
Risk taking is another feature of an entrepreneur. He has to pay to all the other factors of production in advance. There are chances that he may be rewarded with a handsome profit or he may suffer a heavy loss. Therefore, the risk bearing is the final responsibility of an entrepreneur.
Question 5.
Explain the any one function of an entrepreneur.
Answer:
An entrepreneur performs all the functions necessary right from the generation of an idea and upto setting up an enterprise. The following are the functions of entrepreneur.
Decision making :
An entrepreneur as a decision maker takes various decisions regarding the following :
- Ascertaining the objective of the enterprise
- Sources of finance
- Product mix
- Pricing policies
- Promotion strategies
- Appropriate technology or new equipments etc.
Question 6.
Write the types of entrepreneurs. [A.P. Mar. 17]
Answer:
Entrepreneurs are classified into four types. They are :
- Innovating entrepreneurs.
- Initiative entrepreneurs.
- Fabian entrepreneurs.
- Drone entrepreneurs.