RBSE Class 12 Business Studies Notes Chapter 11 Entrepreneurship: Introduction, Nature, Importance and Problems

RBSE Class 12 Business Studies Notes Chapter 11 Entrepreneurship: Introduction, Nature, Importance and Problems

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Rajasthan Board RBSE Class 12 Business Studies Notes Chapter 11 Entrepreneurship: Introduction, Nature, Importance and Problems

Importance of Entrepreneurship :

  1. Entrepreneurship is the basis of economic development of a nation.
  2. Entrepreneurship helps in establishing new enterprises.
  3. Entrepreneurship contributes in development and expansion of existing enterprises.
  4. Entrepreneurship helps in developing new products and techniques.
  5. Entrepreneurs use their creative vision to exploit full human potential.
  6. Entrepreneurship helps is creation of employment opportunities.
  7. Entrepreneurship promotes capital formation.
  8. Entrepreneurship helps in balanced economic development.
  9. Entrepreneurship helps is execution of government policies and plans.
  10. Entrepreneurship helps in bringing about social change.
  11. Entrepreneurship encourages research and investigation.

RBSE Class 12 Business Studies Notes Chapter 11 Entrepreneurship: Introduction, Nature, Importance and Problems

Qualities of Entrepreneurs

1. According to MC Clelland:

  • Extraordinary creativity.
  • Strong determination of risk taking/bearing.
  • Ambition to excel.

2. According to J. B. Say :

  • Decision making.
  • Strong determination.
  • Business knowledge.
  • Supervision and administrative abilities.

3. According to James Burna :

  • Organisational and administrative ability.
  • Technical and business knowledge.
  • Awareness towards opportunities.
  • Interest in accepting changes.
  • Psychological ability to bear risks.

4. According to Hornaday and Aboud :

  • Risk taking and bearing ability and capacity.
  • Ability and capacity of coordinating resources.
  • Organisational and administrative abilities.
  • Hankering after discovering new opportunities.
  • Interest in changes.

5. According to A. C. Bradford :

  • Knowledge of basic technical principles.
  • Cooperation and coordination between business groups.
  • Holistic approach to human outlook and training.
  • Ability to select and train human resources.

After studying opinions of various experts, the qualities of an entrepreneur can be classified into three categories :

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Terminology

  1. Entrepreneurship: Entrepreneurship is the attempt to create value through recognition of business opportunity.
  2. Entrepreneur: Individual who establishes enterprises is known as an entrepreneur.
  3. Enterprise: Commercial unit established by the entrepreneur is known as enterprise.
  4. Entrepreneurship risk : Chances of losses in business because of commercial uncertainties is known as entrepreneurship risk.
  5. Entrepreneurship opportunity: Combination of favourable conditions to start a new enterprise is called entrepreneurship opportunity.
  6. Research : Investigating products to make them better with different experiments is known as research.
  7. Investigation : Conducting tests and observation for fulfilment of needs which gives birth to new product is called Investigation.
  8. Entrepreneurship suitability : Special capabilities are required for running every enterprise. This is known as entrepreneurship suitability.

RBSE Class 12 Business Studies Notes Chapter 11 Entrepreneurship: Introduction, Nature, Importance and Problems

Important Definitions

Entrepreneurship is mainly classified under 5 heads which are as follows :

1. Definition related to establishing Business Venture or Enterprise:

  • According to Prof. Musselman and Jackson, “Entrepreneurship is the investment of time, money and efforts to start a business and make it successful, and bearing the risk.”
  • According to Prof. Udai Pareek and Manohar Nadkarni, “Entrepreneurship refers to the general trend of setting up new enterprise in a society.”

2. Definitions related to Functions and Activities :

  • According to Joseph A. Schumpeter, “Entrepreneurship is an innovative function. It is leadership rather than ownership.”
  • According to Peter Kilby, “Entrepreneurship involves a wide range of areas which includes perception of market opportunity, coordinating and managing the factors of production and adoption of the production techniques and products.”

3. Definition related to Decision Making :

  • According to Prof. H. N. Pathak: “Entrepreneurship involves a wide range of areas on which series of decisions are required which can be broadly grouped into three categories :
  • Perception of an opportunity.
  • Organising an industrial unit.
  • Running the industrial unit as a profitable going, and growing concern.

4. Definition related to organisation of combination:

  • According to Prof. Howard Johnson : “Entrepreneurship is the combination of three basic elements invention, innovation and adaptation.”
  • According to Franklin Lindsay: “Entrepreneurship is anticipating future requirements of society and successful^ meeting these needs with new, creative and imaginative combinations of resources.”

5. Definition related to Innovation :

  • According to Robbins & Coulter: “Entrepreneurship is the process where individuals or a group of individuals risk time and money in pursuit of opportunities to create value and go through innovation regardless of the resources they currently control.”
  • According to Prof. Rao and Mehta: “Entrepreneurship can be described as creative and innovative response to the environment.”

RBSE Class 12 Business Studies Notes