12TH HSC OCM Chapter 3

Chapter 3: Entrepreneurship Development
Q.1 Answer the following

1. Define entrepreneur. Explain characteristics of entrepreneur.
Sol.
(A) Meaning:
Anyone who runs a business is called an entrepreneur. Entrepreneurs are referred to as fourth
'Factor of Production' along with the other factors such as land, labour and capital. They are
the backbone of the nation's economic progress. Entrepreneurs are the people who have the
courage to offer and to share an idea or a product or a service with the world. They have an
ability to apply the creativity to business problems and try to make the market a better place
where the needs of consumers can be satisfied.
(B) Definition:
"An entrepreneur is a person who organises and operates a business or businesses, taking on
greater than normal financial risks in order to do so."
- The Oxford English Dictionary
(C) Characteristics:
(1) Intellectual Capabilities:
Entrepreneurs are creative thinkers, they think out of the box and look for opportunities to
come up with new solutions. They have reasonably good intelligence to give ideas and act on
them. They have ability to analyse business situations and take necessary actions according to
situations
(2) Future Vision:
Entrepreneurs have a good foresight. They visualise the likely changes about to happen in
future market situation, consumer attitude, technological developments, etc. and take timely
actions accordingly.
(3) Hard Work:
Entrepreneurs are dedicated and focused towards their work. They are goal-oriented and
possess the passion and willingness to work hard. Hard work becomes more necessary when a
new venture is started.
(4) Technical Knowledge:
A good entrepreneur will always try to increase their knowledge, keep track of new
developments, advancement in technology, product and process. The better the
entrepreneurs know their playground, the easier they can play in it
(5) Communication Skills:
An entrepreneur needs to have skills to communicate effectively with different people like
customers, suppliers, creditors, employees, etc. He must be able to express his ideas and
strategies effectively. It is necessary that there is a proper understanding between the sender
and the receiver of the message..
(6) Highly Optimistic:
Entrepreneurs are dreamers with a plan in place. They are always hopeful and confident. They
see the positive side of the situation and always move forward even in times of failure.
(7) Risk Bearing Capacity:
Successful entrepreneurs take calculated risks. They are ready to face challenges and seek new
opportunities
(8) Self-Confidence:
Entrepreneurs are created by their 'inner calling', self-drive and self-confidence. They believe
in themselves, their ideas and ability and this acts as a key ingredient in their success.
2. Define entrepreneur. Explain its functions.
Sol.
(A) Meaning:
Anyone who runs a business is called an entrepreneur. Entrepreneurs are referred to as fourth
'Factor of Production' along with the other factors such as land, labour and capital. They are
the backbone of the nation's economic progress. Entrepreneurs are the people who have the
courage to offer and to share an idea or a product or a service with the world. They have an
ability to apply the creativity to business problems and try to make the market a better place
where the needs of consumers can be satisfied.
(B) Definition:
"An entrepreneur is a person who organises and operates a business or businesses, taking on
greater than normal financial risks in order to do so."
- The Oxford English Dictionary
(C) Functions of an Entrepreneur:
(1) Innovation:
An entrepreneur is basically an innovator. He introduces new products, new techniques or
bring changes in the existing products. He keeps himself updated with latest technology in the
market. Innovation is also necessary to solve problems that arise in the business.
(2) Determination of Objectives:
Before beginning the journey, an entrepreneur has to determine the objectives, according to
the exact nature of the business, the nature of the goods to be produced and subsidiary
activities to be undertaken. He has to determine primary and secondary objectives of the
enterprise and work accordingly
(3) Development of Market:
The entrepreneur has to find out different ways of marketing the products and services of his
enterprise. He has to conduct survey and do research to understand the needs and demands
of customer's. This will build consumer satisfaction and entrepreneur will be able to develop
the market for his product or services.
(4) New Technology:
Entrepreneurship throughout the world brings invented technology from different corners of
the world. This results in growth of business by means of new machinery, advanced
technology, new and scientific methods of production, etc.
(5) Good Relations:
An entrepreneur must maintain healthy working atmosphere in the organization. He has to
maintain good relations between superiors and subordinates. This will bring coordination
among employees and thus will bring success to an organisation
(6) Organizing Funds:
Finance is needed continuously for running business. An entrepreneur, using his business plan,
tries to attract venture capitalist and partners for adequate finance necessary for business. He
has to maintain good and honest relation with his investors to satisfy the financial needs of the
organization.
(7) Taking Decisions:
An entrepreneur must take timely and correct business decisions that are necessary for a
proper business plan. He should always consider pros and cons before taking any business
decisions.

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Chapter 3: Entrepreneurship Development

Q.1 Answer the following

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