TS Inter 2nd Year Commerce Study Material Chapter 5 Entrepreneurship

Telangana TSBIE TS Inter 2nd Year Commerce Study Material 5th Lesson Entrepreneurship Textbook Questions and Answers.

TS Inter 2nd Year Commerce Study Material 5th Lesson Entrepreneurship

Long Answer Type Questions

Question 1.
Define entrepreneur and explain the characteristics.
Answer:
Meaning :

1. The word entrepreneur is derived from from the French word “Entrepredre” which mean “Undertake i.e. individual who undertake the risk of new enterprise.
2. An entrepreneur should be one who bears, innovates and organises the business.
3. Entrepreneur is an economic agent who unites all means of production to maximize his profits by Innovations.

Definitions :

1. According to F.Dc Bolidar, entrepreneur is a person who performs the task of bringing labour and material at certain price and selling the resultant product at a contracted price.
2. The American heritage dictionary defines an entrepreneur as “a person who organise, operate and assumes the risk for a business venture”.

Characteristics of an Entrepreneur :
1. Innovation :

1. Innovation means doing newthings. or doing of things that are already being done in a new way
2. Entrepreneurs deals with the changes. He does not countinue with the old ideas. Entrepreneurs tend to tackle the unknown.

2. Risk Taking :
Any new business poses risk for enterpreneurs. They may succeed or fail. Thus entrepreneur main characteristic is bearing the risk.

3. Self confidence :
Entrepreneurs beliyes in themselves. They have the confidence that they can change the existing position.

4. Hard work :
Entrepreneurs are hard workers to get the desire results entrepreneurs put in longer hours of work. They are not depend on others.

5. Goal setting :
Entrepreneur get happiness by setting and striving for goals. Reaching one goals set by entrepreneur will lead to the setting up of another goal.

6. Accountability :
Entrepreneurs take success or failure to their stride. Credit for success, balance for the failure will go to entrepreneurs they are responsible and accountable for results.

7. Leadership :
Leadership represents an abstract quality of a man it is the process of directing, guiding and influencing the people to do their best for the attainment of a specified god. The entrepreneur’s leadership acts like a motive power to group efforts. Hence, the entrepreneur must possess good leadership qualities to become on successful entrepreneur.

8. Managerial skills :
The managerial skills of an entrepreneur refer to ability to formulate a clear policy, ensuring proper balance between the duties, responsibilities, rights and authority of different personnel. Hence the entrepreneur required the managerial skills, for achieving he goals of the enterprises.

Question 2.
Explain the functions of an entrepreneur.
Answer:
Modem writers have emphasised that an entrepreneur is supposed to perform the following functions:

1. Innovation :

1. The word entrepreneur is associated with innovation. Innovation means doing new things, or the doing of things that are already being done in a new way.
2. Innovation includes production of new products, creation of new markets, introduction of new method of production, discovery of new and better channels of supply of raw materials and creation of new organisational structure.
3. According to Schumpeter, the basic function of an entrepreneur is to innovate.

2. Risk Bearing :

1. Due to unforeseen contingencies like changes in consumer tastes, techniques of production, government policies and new inventions, there may be losses which are bom by the entrepreneur.
2. He is an enterprising person willing to assume the risks involved in inventions, new ventures and expansions.
3. J.B. Say and others stressed risk taking as the specific function of the entrepreneur.

3. Organisation and Management :

1. The entrepreneur has to decide, the nature and type of goods and services to be produced. He brings together the various factors of production, such as land, labour, capital.
2. In order to minimicse the losses, entrepreneur allocatges resourcees more judiciously. He makes required alternation in the size of the business, its location, techniques of production etc.
3. Entrepreneur also undertakes the managerial functions like formulation of production plans, organisation of sales and personnel management.
4. Alfred morshasll, organisation and management of the enterprise is main function of an enterprineur.

4. Business Planning :

1. The entrepreneur must provide a logical and scientific basis for planning the business operations like need of raw materials, and men, production schedules, sales, inventory, advertising, budgetary allocation etc.
2. For a systematic business planning, the entrepreneur must be able to formulate goals, policies, procedures, programmes and budgets.
3. Proper planning minimises the cost, activities are taken up in an orderly manner, guides the business along predetermined channel and highly helpful in performance of other managerial functions.
4. Hence, the entrepreneurs have to give utmost importance to this function as it pervades all other managerial functions.

5. Decision Making :

1. Another important function discharged by entrepeneur is the decision making. He has to take decisions regarding the activities of the enterprise.
2. He is expected to make a number of decisions to run and maintain business concern. The function of decision making is considered as vital for the success and growth of any business entiry.

Question 3.
Explain the functions of an entrepreneur.
Answer:
I. Danhof classification of Entrepreneurs :
Danhof has classified entrepreneurs into four categories
1) Innovating entrepreneurs,
2) Adoptive (or) -imitative entrepreneurs,
3) Fabian entrepreneurs,
4) Drone entrepreneurs.

1) Innovating entrepreneurs :
He introduces new products, new methods of production and opens new market. Innovating entrepreneur experiments.

2) Adoptive (or) imitative entrepreneurs :
This type of entrepreneurs instead of innovating new things they just adopt the successful innovations innovated by others. In such cases the imitative innovations may make some changes in the innovations made by the innovative entrepreneur so as to suit their requirements.

3) Fabian entrepreneurs :
These are entrepreneurs rigid 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.

4) Drone entrepreneurs :
They resist changes. They are laggards. They may close down their business but they don’t accept for changes.

II. Other catetories of Entrepreneurs :
1) Individual entrepreneurs :
There are found in small scale business firms. When an individual setup an enterprise, arrange finance, bear the risk and adopt the latest techniques in the business with an intention to earn profits, he is called as an individual entrepreneur.

2) Institutional entrepreneurs :
In the case of business organisations where complex decisions are required to be taken, group entrepreneurs or institutional entrepreneurs emerge to arrange finance, bear the risk and adopt latest technological changes with an intention to earn profits.

3) Entrepreneurs by inheritance :
This type of entrepreneurs are found in India, where a person inherit the bustiness of the family through succession. They ae also called as second generation entrepreneurs since they inherit the family business firms and pass it from one generation to another.

4) Forced entrepreneurs :
Force people to become entrepreneurs. Rich people from agriculture sector, unemployed youth, non-resident indians may belong to this group.

5) Industrial entrepreneurs :
Industrial entrepreneur through research or otherwise estimate customer needs and wants manufacture the products to cater to their needs.

6) Agricultural Entrepreneurs :
Agricultural entrepreneurs are normallyh engaged in the activity of raising crops and marketing crops, fertilisers and ohter inputs of agriculture. They are also engaged in allied agricultural activity.

7) Spontaneous entrepreneurs :
This type of entrepreneurs are in quite contrast with induced entrepreneurs. They commerce their business out of their confidence and talent. They are not induced by other agencies.

8) Pure entrepreneurs :
Pure entrepreneurs is one who undertakes any activity to satisfy his ego. He is motivated to achieve or prove his excellence.

9) Motivated entrepreneurs :
These are induced or motivated government or non-government agencies which may be providing financial and other assistance, concessions, subsidies, training etc.

10) Professional entrepreneurs :
Professional entrepreneurs make it as a profession in commencing a business. They develop a business and sell it to somebody and start another business to sell its to others.

Question 4.
Distinguish entrepreneur and entrepreneurship.
Answer:
The following table may help us to understand the distinction between entrepreneur and entrepreneurship.

Entrepreneur	Entrepreneurship
1) He is a person.	1) It is a plan of action.
2) He is an administrator.	2) It is an administration.
3) He is a risk bearer.	3) It is a risk bearing activity.
4) He is an innovator.	4) It is a process of innovation.
5) He combines factors of production.	5) It is the process of use of factors of production.
6) He is an initiator.	6) It is taking an initiative.
7) He is a leader.	7) It is nothing but leadership.

 

Short Answer Type Questions

Question 1.
What is Business Planning?
Answer:
Business Planning :

1. The entrepreneur must provide a logical and scientific basis for planning the business operations like need of raw materials, and men, production schedules, sales, inventory, advertising, budgetary allocation etc.
2. For a systematic business planning, the entrepreneur must be able to formulate goals, policies, procedures, programmes and budgets.
3. Proper planning minimises the cost, activities are taken up in an orderly manner, guides the business along predetermined channel and highly helpful in performance of other managerial functions.

Question 2.
What are the risk bearing function of entrepreneurs?
Answer:

1. Due to unforeseen contingencies like changes in consumer tastes, techniques of production, government policies and new inventions, there may be losses which are born by the entrepreneurs.
2. Entrepreneurs, in the game of business wherein risks and rewards are a plenty will be ready to accept them.
3. He is an enterprising person willing to assume the risks involved in inventions, new ventures and expansions.

Question 3.
How innovation function is different fro invention functions of an entrepreneur?
Answer:
1) Innovation means doing new things that are already being done in a new way. Innovation includes production of new products creation of new market, introduction of new, method of production discovery of new and better channels of supply of raw materials and creation of new organisational structure.

2) Innovation is also different from invention. Invention implies discovery of new ideas, new articles and new methods whereas, innovations means the application of inventions and discovery to make a new and desired products and services that can be successfully sold in market.

3) Invention in creation of a new product, where as innovation mean adding value to that product.

Question 4.
How danhof classified the entrepreneurs?
Answer:
Danhof has classified entrepreneurs into four categories 1) Innovating entrepreneurs, 2) Adoptive (or) imitative entrepreneurs, 3) Fabian entrepreneurs, 4) Drone entrepreneurs.
1) Innovating entrepreneurs :

1. He introduces new products, new methods of production and opens new market.
2. Innovating entrepreneur experiments and converts the attractive possibilities into practice.

2) Adoptive (or) imitative entrepreneurs :

1. This type of entrepreneurs instead of innovating new things they just adopt the successful innovations innovated by others.
2. In such cases the imitative innovations may make some changes in the innovations made by the innovative entrepreneur so as to suit their requirements.

3) Fabian entrepreneurs :

1. These are entrepreneurs rigid and fundamental in approach. They follow the foot steps of their successors.
2. They are shy to introduce new methods and ideas. Fabian entrepreneurs are no risk takers.

4) Drone entrepreneurs :

1. They resist changes. They are laggards. They may close down their business but they don’t accept for changes.
2. Drone enterpreneurs are refuse to adopt changes.

Very Short Answer Type Questions

Question 1.
Entrepreneurs.
Answer:
He is an economic agent who unites all means of production, to maximize his profit by innovations.

Question 2.
EnterpMrise.
Answer:
It is unit of economic organisation. An organisation created for business venture.

Question 3.
Entrepreneurship.
Answer:
It is a purposeful activity of an individual or a group of associated individuals under – taken to initiate, maintain and to earn profit by production or distribution of economic goods and services.

Question 4.
Balanced Regional Develolpment.
Answer:
Entrepreneurs in the public and private sectors help to remove regional disparties by setting up industries in the backward areas. Government give to various concessions and subsidies to the entrepreneurs.

Question 5.
Leadership.
Answer:
Leadership represents an abstract quality of a man it is the process of directing, guiding and influencing the people to do their best for the attainment of a specified god. The entrepreneur’s leadership acts like a motive power to group efforts. Hence, the entrepreneur must possess good leadership qualities to become on successful! entrepreneur.

Question 6.
Innovation.
Answer:

1. Innovation means doing newthings. or doing of things that are already being done in a new way
2. Entrepreneurs deals with the changes. He does not countinue with the old ideas. En-trepreneurs tend to tackle the unknown.

Question 7.
Adoptive Entrepreneur.
Answer:

1. This type of entrepreneurs instead of innovating new things they just adopt the successful innovations innovated by others.
2. In such cases the imitative innovations may make some changes in the innovations made by the innovative entrepreneur so as to suit their requirements.

Question 8.
Fabian Entrepreneur.
Answer:

1. These are entrepreneurs rigid and fundamental in approach. They follow the foot steps of their successors.
2. They are shy to introduce new methods and ideas. Fabian entrepreneurs are no risk takers.

Question 9.
Drone entrepreneur.
Answer:

1. They resist changes. They are laggards. They may close down their business but they don’t accept for Changes.
2. Drone enterpreneur are refuse to adopt charges.

Question 10.
Forced entrepreneurs.
Answer:
Some circumstances force people to become entrepreneurs. Rich people from agriculture sector, unemployed youth, non-resident indians may belong to this group.

Question 11.
Industrial entrepreneurs.
Answer:
Industrial entrepreneur through research or otherwise estimate customer needs and wants manufacture the products to cater to their needs. He is essentially a manufacturer.

Question 12.
Spontaneous entrepreneurs.
Answer:
spontaneous entrepreneurs are in quite contrast with induced entrepreneurs. They commerce their business out of their confidence and talent. They are not induced by other agencies.

Question 13.
Pure entrepreneurs.
Answer:
Pure entrepreneurs is one who undertakes any activity to satisfy his ego. He is motivated to achieve or prove his excellence.

Question 14.
Corporate entrepreneurs.
Answer:
Corporate entrepreneur is one who promotes a corporation. A corporate undertaking is formed and registered under a statute which gives a separate legal entity.

Question 15.
Motivated entrepreneurs.
Answer:
These ace induced or motivated government or non-government agencies which may be providing financial and other assistance, concessions, subsidies, training etc.

Question 16.
Professional entrepreneurs.
Answer:
Professional entrepreneurs make it as a profession in commencing a business. They develop a business and sell it to somebody and start another business to sell its to others. They are not interested in managing or operating a business with is established by them.

Question 17.
Classical entrepreneurs.
Answer:
He is a sterotype entrepreneur whose main aim is to maximise his economic returns at a level consistent with the survival of the unit but with or without an element of growths.

Question 18.
Small scale entrepreneurs.
Answer:
On the basis of scale of operation of the unit entrepreneurs may be classified as large scale, medium scale and small scale industry entrepreneur. He is essentially a manufacturer. He manufactures the products in small scale and tiny industry. Government given many facilities to these small scale industry entrepreneurs.