Ethics and Entrepreneurship. New Paradigms


Textbook, 2017
50 Pages, Grade: 1.00

Free online reading

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CHAPTER 1
ETHICS & ENTREPRENEURSHIP ­ AN INTRODUCTION
Richard William Paul and Linda Elder define ethics as, "a set of concepts and principles that
guide us in determining what behavior helps or harms sentient creatures".
Ethics is the systematic study of rightness and wrongness of human conduct and character as
known by natural reason. Ethics can be defined as the critical, structured examination of how
people & institutions should behave in the world of commerce. In particular, it involves
examining appropriate constraints on the pursuit of self-interest, or (for firms) profits, when
the actions of individuals or firms affects others.
Entrepreneurship
According to American economist Peter Drucker (1909-2005), The entrepreneur always
searches for change, responds to it and it exploits it as an opportunity.
Entrepreneurship is the act of being an entrepreneur, which can be defined as one who
undertakes innovations, finance and business acumen in an effort to transform innovations
into economic goods. This may result in new organizations or may be part of revitalizing
mature organizations in response to a perceived opportunity. The most obvious form of
entrepreneurship is that of starting new businesses. However, in recent years the term has
been extended to include social and political forms of entrepreneurial activity. When
entrepreneurship is describing activities within a firm or large organization it is referred to as
Intrapreneurship and may include corporate venturing when large entities spin-off
organizations.
Ethical Entrepreneurship:
Johan Wempe says Ethical entrepreneurship, in a nutshell, amounts to the achievement of
ethical goals through entrepreneurship.

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In simple terms, the implication of ethics to entrepreneurship is known as ethical
entrepreneurship. Ethical principles have always increased the value of the business. It helps
the business in retaining good employees and creates a positive environment for the business.
Characteristics of Ethical Entrepreneurship:
1.
Measured risk: Entrepreneurs are risk takers, staking money, time, and personal
reputations to manifest their visions. But, like heroes, entrepreneurs are rarely reckless.
Rather, successful entrepreneurs take measured risks, weighing the stakes and the potential
consequences, and then stepping into unknown territories to generate results. As risk takers,
successful entrepreneurs understand that failure can be a vital part of success, and that
learning from mistakes can be a way of reaping benefits from situations that might otherwise
feel like failures.
2.
Physical responsibility: Businesses run on money, so entrepreneurs must have a solid
sense of how to raise and manage funds. Successful entrepreneurs have an intuitive sense of
how much money they will need to run their companies, but they supplement this sense with
concentrate documentation and calculations to migrate uncertainties. Entrepreneurs are
willing to risk money by making investments in building their businesses, but they keep a
close eye on the numbers in order to understand how much they are spending and whether
their expenditures are bringing about the desired results.
3.
Creativity: Starting a business is a creative endeavor that starts with conceptualizing a
product or service, and then building a practical infrastructure that can sustain itself while
delivering that product or service. Entrepreneurship requires creative problem solving as well
as creative product development, and entrepreneurs have the creative freedom to think
outside the box and develop unique strategies that balance personal values with practical
constraints.
4.
Management skills: Successful entrepreneurs see the big picture. They have the skills
and the humanity to define their own role in company operations, and the interpersonal skills
to successfully delegate the tasks they can`t complete themselves. Successful entrepreneurs
are successful managers, sharing the company`s vision and clearly communicating the ways
that his vision is infused into mundane daily tasks. An entrepreneur`s management skill`s

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come into play in the process of carefully choosing employees, and these skills come into
play in the process of carefully choosing employees, and these skills carry over into careful
training, as well as the daily challenges of motivating and organizing workers.
Examples where entrepreneurship has failed because of ethical issues:
1)
Subhiksha retail:
By the end of 2008, Subhiksha, one of the most popular retail brands of India was on the
verge of bankruptcy. Ramaswamy Subramanian, CEO of Subhiksha, the most written-about
Indian CEO was looking for means of reviving the retail chain. Subhiksha landed in trouble,
after failing to pay its employees, suppliers and landlords for many months in 2008. Adding
to its woes, its biggest investors I-venture (Venture Capital arm of ICICI, India's largest
private bank) and Zash Investment (AzimPremji's investment company) did not extend any
help to the ailing discount store chain.
The condition of the company was well-manifested by the pillage of around 600 Subhiksha
stores in February 2009, as security personnel did not attend duties due to lack of payment.
The perpetrators could be, Subramanian told, "disgruntled vendors, employees or anti-social
elements taking advantage of the situation". Crumbled by the credit crunch, Subhiksha's
operations came to a standstill with bare shelves and closed shops. With one of the renowned
retail pioneers falling prey to the recession, the great story of the glorious organized Indian
retail seems to be fading.
2)
King fisher airlines:
The operating costs were too high, and on top of that their debt increased too fast before the
business became sustainable. Thus, higher market share came at increasing costs and even
higher losses. They overpaid for the Deccan Air acquisitions. They acquired it merely to start
international operations and soon exited the low cost airline business. They made more losses
every year but on every occasion the company pointed that the core reason for dipping
fortunes of the airlines was the airline fuel charges and high fare prices. Structural issues
made the airline business unprofitable.

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Vijay Mallya, (Chairman of UB group) claimed that all his debts were marginal compared to
the assets and equity that his business portfolio had. He believed in this logic so much that
soon his own good money started chasing his bad investment in the airline, with no light at
the end of the tunnel or path to profitability in sight. His ability to raise more debts and his
relationships with the influential people created an aura of inevitable success, till everyone
deserted him. He was probably hoping to get a foreign investor, and was pursuing market
share growth to get a high valuation, but the rules on FDI in aviation changed too late for
him. The valuation of King Fisher airlines crashed in no time.
The problem with entrepreneurs is that either they micro manage or over delegate. Both these
attitudes are harmful in the long run. When the going is good, everything seems to be fine.
But when the downfall begins, entrepreneur starts feeling the pinch.
Good ethical behavior also helps entrepreneurs to develop good relations with everyone in
the business during the initial period of establishing the business. Reputation for meeting
one`s commitment also helps entrepreneurs to win customers. While an entrepreneur may or
may not have very high ethical standards, a bad reputation for flouting norms of ethical
behavior is definitely anathema for an entrepreneur trying to establish a new business.

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CHAPTER 2
INTRAPRENEUR AND ENTREPRENEUR
An Entrepreneur is someone who, through his or her skills and passion, creates a
business and is willing to take full accountability for its success or failure. An Intrapreneur is
someone who utilizes his or her skill, passion and innovation to manage or create something
useful for someone else`s business with entrepreneurial zest. Both are committed to the
business.
1.
Entrepreneurs provide the spark, Intrapreneurs keep the flame going.
2.
Entrepreneurs are found anywhere their vision takes them. Intrapreneurs work within
the confines of an organisation.
3.
Entrepreneurs face many hurdles and are sometimes ridiculed and riddled with
setbacks. Intrapreneurs may sometimes have to deal with conflict within the
organisation.
4.
Entrepreneurs may find it difficult to get resources. Intrapreneurs have their resources
readily available to them.
5.
Entrepreneurs may lose everything when they fail. Intrapreneurs still have a pay check
to look forward to if they fail.
6.
Entrepreneurs know the business on a macro scale. Intrapreneurs are highly skilled and
specialized.
7.
An entrepreneur spots an opportunity in the marketplace and has the courage and zeal
to turn this opportunity into business. Intrapreneur uses his or her passion, drive and
skill to manage the business or create something new and useful for the business.
ADVANTAGES OF SKILLED INTRAPRENEURS WITHIN THE COMPANY
1.
Intrapreneurs are the drivers of innovation within companies. They seek policies,
technology and application that resolve and break the barriers to productivity..
2.
Intrapreneurs are major contributors to increase in productivity within companies.
3.
Intrapreneurs are the driving force that moves a company forward and they will
inevitably rise to the top of the company as they understand the company from all
levels.
4.
Intrapreneurs take risk and find more effective ways to accomplish task.

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Thus we can say that ENTRAPRENURS and INTRAPRENEURS are the pillars of any
organization. They both work for the success of an organization but in different ways.
Entrepreneurs face more risks when compared to Intrapreneurs.

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CHAPTER 3
ROLE OF ENTREPRENEURIAL DEVELOPMENT
Economic development essentially means a process upward change whereby the real per
capital income of a country increases over a long period time. Adam Smith the foremost
classical economist assigned no significance to entrepreneurial role in economic development
in his work "An Enquiry into the nature and Causes of the Wealth of Nations" published that
rate of capital formation as an important determinant for economic development .
The economic history of developed countries like America, Russia and Japan tend to support
the fact that entrepreneurship plays a very important role. The crucial role played by the
entrepreneurs in development of the western countries has made people of underdeveloped
countries too conscious about the need for the entrepreneurship. Now, people have begun to
realize that for achieving the goal of economic development, it is necessary to increase
entrepreneurship both quantitatively and qualitatively in the country. It is only the active and
enthusiastic entrepreneurs who fully explore the potentialities of the countries available
resources like land, labour, capital, and technology.
The ability of the entrepreneur lies in perceiving the opportunity which others do not take
notice of and making it stand out from others. Essentially the entrepreneur searches for
change, analyzes the need and brings together the manpower, material and capital required to
respond to the opportunity what is analyzed from the market.
The role of entrepreneurship in economic development
varies
from
economy
to
economy. This depends upon its material resources , industrial climate and its ability to
use it to its
best. Establishing an industry and thereby developing entrepreneurship is not one ­ man
activity. In fact, it involves multi prolonged activity. The important role that entrepreneurship
plays in economic development of the country can be put together in a more systematic and
orderly manner.
Entrepreneurs create social change through unique offerings of goods and services
entrepreneurs break away from tradition and indirectly support freedom by reducing
dependence on obsolete system and technology. Entrepreneurship promotes balanced

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regional development. Entrepreneurship promotes capital formation by mobilizing the idle
saving of the public.
Entrepreneurship provides large-scale employment Thus, it helps reduce the
unemployment problem in the country which is the root of all socio ­economic problems. It
helps in reducing the concentration of economic power in fewer hands. It
encourages
effective resource mobilization of capital and skill which can remain unutilized and idle. It
also promotes countries export which is an important ingredient in to economic development.
It is clear that entrepreneurship serves as a catalyst of economic development .On the whole
the role of entrepreneurship in economic development of a country can be best put as an
economy is the effect for which entrepreneurship is the cause.

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CHAPTER 4
DIFFERENCES BETWEEN CSR (CORPORATE SOCIAL RESPONSIBILITY) AND
CSE (CORPORATE SOCIAL ENTREPRENEURSHIP)
INTRODUCTION
Corporate social entrepreneur is defined as an employee of the firm who operates in socially
entrepreneurial manner identifying opportunities for championing social responsible activity.
Corporate social responsibility refers to business practice that involves participating in
indicatives that benefit society.
What is CSE??
CSE often becomes necessary when there is a difficult crisis between financial objectives of a
company and public wellbeing. They are not only the crazy ones with the great ideas, but
most importantly they are the risk-takers who take ownership of ideas and bring them
forward
It is relevant to both practitioners and scholars of business, management and more
specifically to the fields of business ethics, sustainability, organization, behavior,
entrepreneurship, human resource management and business strategy.
The notation of CSE is multidisciplinary as the concept is inherently linked with the notation
of personal values derived from the study of sociology, anthropology and social psychology.
What is CSR??
CSR is becoming more main stream as forward thinking companies embed sustainability into
core of their business operations to create shared value for business and society.

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Types of CSR
Environment: one primary focus of CSR is the environment. Business, both small and large
have a large carbon footprint any steps they take to reduce footprints are considered both
good for company and society.
Philanthropy: Business also practices social responsibility by donating to national and local
charities. It is beneficial to both local and community progress.
Ethical labour practices: By treating employees fairly and ethically companies can also
demonstrate their CSR.
Difference between CSR and CSE:
·
Corporate Social Entrepreneurship (CSE) is a necessary and logical step to take after
realizing the CSR strategy, and to take joint economic and social value creation to the next
level, while CSR is about minimizing negative impact (a moral obligation or meeting legal
obligations) proactively pursuing social progress, hereby maximizing positive impact by
using challenges (example climate change) as a driver for innovation in the company
·
Creates new business opportunities and markets at the same time, focusing on
behavior of CSR,CSE challenges employees to be entrepreneurial and forward thinking by
creating a bridge between today`s core business and new meaningful products and services.

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CHAPTER 5
E-COMMERCE
In 2017 and for the upcoming years e-commerce is expected to be in its trajectory and fastest
growing stage, as mobile is the future. Opportunities are aplenty if one wishes to become a
committed entrepreneur of e-commerce.
E-Commerce basically refers to buying and selling of goods and services, or the transmitting
of funds or data or even an electronic network, primarily internet. These business transactions
occur basically as Business-to-Business, Business-to-Consumer, and Consumer-to-Consumer
or Consumer-to-Business. E-Commerce is literally jumping in the waves of innovation.
The basic mistake done by the start-ups is that they rely on technology for simplicity and for
the sake of convenience and affordability. Shoppers prefer to shop their favourite goods
through online sites. People think that it`s more time saving and more economical than
physically visiting the stores for buying things. Creation of a fantabulous web-page is not
enough for succeeding in E-commerce. Strategy is often overlooked even as e-commerce
relies more on short term returns.
To nullify all these mistakes e-commerce entrepreneurs have taken steps like- allowing the
customers to become their brand ambassador, treating their e-commerce as if it is a thriving
offline business, finding the right software for the business, identify the challenges and
prioritizing them according to the requirement of the business and choosing a very creative
and innovative advertising partner.
E-commerce would grow even more rapidly if the e-commerce websites would reduce the
number of screens that the customer has to go through, make sure that the shipping is the
cheapest unless there`s a faster option for the same price, use as few fields as possible, use
auto fill where ever applicable, save billing and shipping applications where ever possible
and last but not the least provide several ways for customers to make the payments for their
order including common payment option such as pay-pal and pay tm. Cash on delivery is
already available as a payment option and this is definitely a welcome move.

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CHAPTER 6
ETHICAL CHALLENGES IN ENTREPRENEURSHIP
All over the world there is a growing realization that ethics is important for any business and
to achieve the progress of any society. Ethics give rise to efficient economy. It is not the
government or law which will protect the society. But ethics alone can protect it. Ethics and
profits go together in the long run. An ethically responsible company is one which has
developed a culture of caring for people and environment, a culture which flows downwards
from the top managers and leaders.
According to the dictionary the term ethics has a variety of different meanings. One of the
meanings given to it is the principles of conduct governing an individual or a group. A
second and more important meaning of ethics according to the dictionary is this: Ethics is
the study of morality. Ethics is a discipline that examines one`s moral standards or the
moral standards of the society. It asks how these standards apply to our lives and whether
these standards are reasonable or unreasonable-that is, whether they are supported by good
reasons or poor ones.
Our concern here, however, is not with ethics in general, but with a particular field of ethics:
business ethics. Business ethics is a specialized study of moral right and wrong. It
concentrates on moral standards as they apply to business institutions, or organizations and
behavior.
Ethical issues arise out of everyday business decisions. An individual`s personal beliefs and
the moral atmosphere of the organization in which one works significantly after the behavior
one exhibits. Many philosophers, organizational relationships, and opportunity influence
behavior, as does the organizational environment.
Business ethics is the process of rationally evaluating our moral standards and applying them
to business situations. Many people have objected to the very idea of applying moral
standards to business activities. They have also looked at what can be said in favour of
bringing ethics into business.
The individuals are faced with questions about ethics in their relations with customers,
employees, and members of the larger society. Frequently, the ethically correct course of

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action is clear, and people in business act as per that. Exceptions occur when there is
uncertainty about ethical obligations in particular situations or when considerations of ethics
come into conflict with the practical demands of business.
In deciding on an ethical course of action, we can rely to some extent on the rules of right
conduct that we employ in everyday life. Deception is wrong.
One of the features that distinguish business activity is an economic character. In the world of
business, we interact with each other not as family members, friends or neighbors but as
buyers and sellers, employers and employees and the like. Employment is also recognized as
a special relation with its own standard of right and wrong. Employers are generally entitled
to hire and promote whomever they wish and to layoff the workers without regard for the
consequences. The ethics of business is at least in part the ethics of economic relations-such
as those involving buyers, sellers, employers, employees.
A second distinguishing feature of business activity is that it takes place in larger, impersonal
organizations. An organization is a hierarchical system of functionally defined positions to
achieve some goals or set of goals. Consequently, the members of a business organization
take on new obligations to pursue the goals of the firm.
Violations of law usually begin when businesspeople stretch the limits of ethical standards, as
defined by company or industry codes of conduct, and then choose to engage in schemes that
knowingly or unknowingly violate the law. In recent years, new laws and regulations have
been passed to discourage such decisions and to foster programs designed to improve
business ethics and social responsibility.
When faced with the fact that different cultures have different moral standards, the managers
of some multinationals have adopted the theory of ethical relativism. Ethical relativism is the
theory that, because different societies have different ethical beliefs, there is no rational way
of determining whether an action is is morally right or wrong other than by asking whether
the people of this or that society believe it is morally right or wrong.
The statement that corporate organizations can be ethical or unethical raises a puzzling issue.
Can we really say that the acts of organizations are moral or immoral in the same sense that

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the actions of human individuals are? Can we say that corporate organizations are morally
responsible for their acts in the same sense that human individuals are? Or must we say that it
makes no sense to apply moral terms to organizations as a whole but only to individuals who
make up the organization?
Two views have emerged in response to this problem. At one extreme is the view of those
who argue that, because the rules that tie organizations together allow us to say that
corporations act as individuals and have intended objectives for what they do, we can also
say that they are morally responsible for their actions and that their actions are moral or
immoral in exactly the same sense that a human being`s are. At the other extreme is the
view of philosophers who hold that it makes no sense to hold business organizations
morally responsible or to say that they have moral duties.
Which of these two extreme views is correct? Neither. The underlying difficulty with which
both views are trying to struggle in this: Although we say that corporate organizations exist
and act like individuals, they obviously are not human individuals. Yet our moral
categories are designed to deal primarily with individual humans who feel, and deliberate,
and who act on the basis of their own feelings, reasoning, and deliberations. Therefore, how
can we apply these moral categories to corporate organizations?
As this description of business ethics suggests, the issues that business ethics covers
encompass a wide variety of topics. To introduce some order into this variety, it helps if we
distinguish three
different kinds of issues that business ethics investigates: systematic, corporate, and
individual. Systematic issues in business ethics are ethical questions raised about the
economic, political, legal, and other social systems or institutions within which business
operates. Corporate issues in business ethics are ethical questions raised about a particular
organization. These include questions about the morality of the activities, policies, practices,
or organizational structure of an individual company taken as a whole. Finally, individual
issues in business ethics are ethical questions raised about a particular individual or particular
individuals within a company and their behaviors and decisions. These include questions
about the morality of the decisions, actions, or character of an individual.

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ETHICAL ISSUES IN ENTREPRENEURSHIP ACROSS THE GLOBE
In the complex global business environment of the 21st century, companies of every size face
a multitude of ethical issues. Businesses have the responsibility to develop codes of conduct
and ethics that every member of the organization must abide by and put into action.
Fundamental ethical issues include concepts such and integrity and trust, but more complex
issues include accommodating diversity, decision-making, compliance and governance.
Business ethics (also corporate ethics) is a form of applied ethics or professional ethics that
examines ethical principles and moral or ethical problems that arise in a business
environment. It applies to all aspects of business conduct. It is relevant to the conduct of
individuals and entire
organizations. The range and quantity of business ethical issues reflects the interaction of
profit-maximizing behavior with non-economic concerns. Interest in business ethics
accelerated dramatically during the 1980s, both within major corporations and within
academia.
Fundamental Issues
The most fundamental or essential ethical issues that businesses must face are integrity and
trust. A basic understanding of integrity includes the idea of conducting your business affairs
with honesty and a commitment to treating every customer fairly. When customers perceive
that a company is exhibiting an unwavering commitment to ethical business practices, a high
level of trust can develop between the business and the people it seeks to serve. A
relationship of trust between you and your customers may be a key determinate to your
company's success.
Diversity Issues
The world is a rich and diverse place full of interesting cultures and people, who should be
treated with respect and from whom there is a great deal to learn. An ethical response to
diversity begins with recruiting a diverse workforce, enforces equal opportunity in all training
programs and is fulfilled when every employee is able to enjoy a respectful workplace

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environment that values their contributions. Maximizing the value of each employee`s
contribution is a key element in your business's success.
Decision-Making Issues
According to Santa Clara University, the following framework for ethical decision-making is
a useful method for exploring ethical dilemmas and identifying ethical courses of action:
"recognizes an ethical issue, gets the facts, evaluates alternative actions, makes a decision and
tests it and reflects on the outcome." Ethical decision-making processes should center on
protecting employee and customer rights, making sure all business operations are fair and
just, protecting the common good and making sure individual values and beliefs of workers
are protected.
Compliance and Governance Issues
Businesses are expected to fully comply with environmental laws, federal and state safety
regulations, fiscal and monetary reporting statutes and all applicable civil rights laws.
Employee Behavior
From large corporations to small businesses, individuals involved in all types of business
often face ethical issues stemming from employee behavior. For example, whether an
employee can spend work time checking personal email accounts, how a manager deals with
claims of harassment and to what extent a manager can "groom" a certain employee for a
promotion are all examples of ethical issues regarding employee behavior.
There are legal consequences for some unethical employee behavior. For example, if a
supervisor discriminated against an employee based on her gender, religion or ethnicity when
making recommendations for a promotion legal action could be sought.
Employee Working Conditions
In addition to employee behavior, there are a number of ethical issues business people must
consider about employee working conditions. For example, employers must be aware of the

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safety of their work environment and if they have compensated employees for all the time
they have worked. Just like there are legal consequences for some unethical issues regarding
employee behavior, there are also legal consequences for unethical working conditions. For
example, an employer who requires an employee to work without pay or who creates an
unsafe working environment can face legal action.
Supplier/Customer Relations
In addition employees and business owners must consider the ethical issues involved with
their relationships between suppliers and customers. Business owners in particular must
consider whether it is ethical to do business with suppliers who have unethical practices.
When dealing with customers or clients, business people must ensure that they use their
information correctly, do not falsely advertise a product or service, and do not intentionally
do sub-standard work.
Although there are ethical issues like discrimination that apply to all areas of business, each
business area has its own ethical concerns. For example, business people who act as
consultants
must ensure they are giving sound advice. In the area of business, some major ethical issues
result from hiring, firing and dealing with employees. For example, conflicts of interest may
cause ethical issues in businesses, especially if they are family run. When personal family
issues interfere with business decisions, this is a conflict of interest and an ethical concern.

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CHAPTER 7
STORY OF FAILED ENTREPRENEURSHIP
Entrepreneurship has received a great fillip in India due to the growing influence of
technology in business. The success of e-commerce is mainly due to the support from
technology. The growth in social media networks, Internet and mobile technology (smart
phones) has greatly helped entrepreneurship in India. However, many of the startups are
unable to sustain. The reasons are given below:
1)
Over ambition: Entrepreneurs are in a hurry to scale up the business after achieving
initial success. They do not exercise sufficient due diligence while entering new
markets.
2)
Lack of adequate capital: Many startups are unable to mobilize capital from banks and
financial institutions. Not all startups are adept at acquiring funding from venture
capitalists or angel investors.
3)
Failure to follow processes: Many startups prefer to work in an unstructured manner.
As they do not follow processes, they are unable to set clear performance
benchmarks. This hampers their progress.
4)
Hire and fire policy: Many startups attract candidates to join them by promising high
salaries and perks. But when business prospects dim, the entrepreneurs do not flinch
in sacking their employees. Thus they treat their employees as a human resource and
not as human capital.
5)
Under estimation of competition: Many entrepreneurial ventures do not have a clear
idea about the markets and they have a half-baked idea about the competition. Rather
than focusing on developing their core competence, they wish to spread their wings
far too wide.
6)
Improper leveraging: Entrepreneurs believe in taking more and more debt and at some
point the business suffers from a huge interest burden.
7)
Absence of ethical standards: History is replete with examples of entrepreneurial
ventures which collapsed like nine pins due to their failure to adhere to ethical
standards and moral code of conduct.
8)
Faulty selection and recruitment practices: Startups do not have a professional
approach in managing talent. This creates problems at a later stage.

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9)
Refusal of the promoter- entrepreneur to delegate: Many promoters are insecure about
the future. This leads to insufficient delegation due to which attrition of highly
talented people increases.
10)
Lack of intent to clear debts and pay taxes to government: Entrepreneurs are eager to
avail bank credit but they don`t feel accountable to return the loan. Some
entrepreneurs mix up their personal expenses with business expenses. Some startups
defer paying taxes to the government.
Some entrepreneurs do not have a clear cut business plan and no clear business objective.
Startups that fail to sustain often do not have any clear cut business plan, suffer from
ambiguous goals and are greedy to earn money in the quickest time possible. Some startups
behave like copy cats and under estimate the power of competition in the market. These
startups do not have a clear idea of what the customer wants. So when they are unable to
grow their market share, they take impulsive decisions to shut shop or sell off the business.
They either make exaggerated marketing claims or suffer from inadequate marketing
expertise.

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CHAPTER 8
FLIPKART: A SUCCESS STORY OF INDIAN ENTREPRENEURSHIP
Globally, an entrepreneur is one who is willing to bear the risk of a new venture, an innovator
who markets the innovations, develops new goods or processes according to market demands.
Indian Entrepreneurs possess the verve and chutzpah to spread the spirit of entrepreneurship
amongst Indian youth.
Before 1991, Indian business success was a function of ambition, licenses, government
contacts, and an understanding of the bureaucratic system. Decisions were based on
connections, rather than the market or competition. Business goals reflected a continuation of
the "Swadesh movement" which promoted import substitution to attain economic freedom
from the West.
Pre-1991 policies were inward looking and geared towards the attainment of self-reliance.
During this era, entrepreneurship was subdued, capital was limited and India had very few
success stories. As well, society was risk averse and the individual looked primarily for
employment stability. But as the time passes, it brings subtle changes into the mindset of
people and their ability to think.
If we see the present era of Entrepreneurship the first Company which comes in every Indians
Mind is Flipkart as the concept was totally new to the market and most of the people are
unaware of the term Online. But Sachin Bansal and Binny Bansal did not see that as risk
but took that as an opportunity and we can see that today they stand tall.
Flipkart (Company) was founded in 2007 by Sachin Bansal and Binny Bansal, both alumni of
the Indian Institute of Technology Delhi. They worked for Amazon.com, and left to create
their new company incorporated in October 2007 as Flipkart Online Services Pvt. Ltd.
The first product they sold was the book "Leaving Microsoft to Change the World" .Flipkart
now employs more than 33000 people. Flipkart allows payment methods such as cash on
delivery, credit or debit card transactions, net banking, e-gift voucher and card swipe on
delivery. After failure of its 2014 Big Billion Sale, Flipkart recently completed the second

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edition of Big Billion Sale held between October 13 and 17 where it is reported that they saw
a business turnover of 300 million in gross merchandise volume.
When Flipkart started, the country was already witnessing quite a bit of interest in e-
commerce in the form of booking of online tickets etc. Their (Bansal Brothers) first thought
was to start a comparison shopping website that would cater to the growing Indian e-
commerce market. However when they further probed the idea, their research revealed that
companies in India had still not succeeded in creating a comprehensive e-commerce
ecosystem that ensures convenience and security from the customer`s perspective. The entire
category was plagued with issues like delayed deliveries; wrong product deliveries, improper
product description etc. Sensing an opportunity, they decided to start an e-commerce
company that would focus on providing a great shopping experience to their customers.
From the beginning, their intention was to make Flipkart the largest e-commerce portal in the
country. They started by retailing books and after becoming a market leader in this segment
they introduced other product categories such as mobiles, movies, music, games, cameras and
computers. Their aim is to achieve similar success in these categories while maintaining their
USP of a superior customer experience.
The journey has been an extremely interesting and rewarding one. They started off as a
modest venture and in just under four years have gone on to become one of India`s leading
online shopping destinations. Their focus has always been on keeping their customers
satisfied by ensuring convenience and a hassle free shopping experience at every customer
engagement point
­ Not to mention the great discounts and product variety that they have to offer.
The initial challenges they faced were teething troubles common to most start-ups. It was
tough to generate supplier confidence in them and the inability to keep a large enough
inventory posed an issue. Slowly however, they succeeded in building up both customer and
supplier confidence. Traffic to the site started picking up through word-of-mouth publicity
and from then on there has been no looking back. Today, the challenges are different. They
have built their business on the premise of providing a great shopping experience to the
customer and their biggest challenge is to maintain the same quality of service while they
rapidly scale up the size of their operations. The other challenge is to think big; in terms of

23
scales that are yet to be employed in online retail businesses (travel being an exception) in
India.
They started Flipkart on a modest budget. The initial capital was sourced from our personal
money and they did not have a huge marketing budget. Hence they relied heavily on word-of-
mouth marketing to promote their site. Moreover, when it comes to mediums like e-
commerce, word-of-mouth marketing works extremely well as customers rely on the
experience and feedback of their friends and peers before they try out a site.
Sachin Bansal and Binny Bansal of Flipkart have done many things innovative to make it a
great success story:
Some of them are as follows
1)
Cash on Delivery
2)
Same Day delivery
3)
Exceptional packaging
4)
Standardization of Courier service
5)
Building consumer trust in online buying
6)
Leveraging Social media Like Facebook and twitter to create hype around new launches
7)
Created a platform for Users to share product reviews ­ (Flipkart consumer reviews very
informative)
8)
Flipkart Coupons & Contests for making new products successful
9)
Mobile Commerce and beautifully designed Mobile App
10)
Exclusive tie ups
Flipkart also acquired few companies like Myntra.com, LetsBuy.com etc., to better their
presence in the market. With the entry of Amazon.com in India, the competition between the
companies has seen many takeovers. Flip kart's journey from a small book e-retailer to
India`s largest e-commerce platform inspires a generation of start-ups. In a country where
stereotypes are common, Flipkart managed to break the norm and change the ecommerce
industry in India
forever. Flip kart's story proves that if you have a great idea, and you are a doer and not a
thinker, success is not far off.

24
By putting the needs of their customer first and listening to what they have to say, companies
can succeed in building up a loyal customer base. Continuous innovation is the backbone for
any business.

25
CHAPTER 9
INNOVATION AND ENTREPRENURSHIP
Innovation is an important attribute of business advancement. It is an involvement of great
ideas manifested in value addition. Whether novelty is dealing with a huge idea or a few and
whether it is something to do with group work or a single individual, it plays a crucial role in
business. The paper discusses innovations and entrepreneurship, arguing that the latter is
more important because it uses the former to create value.
It is important to look at a case study in order to understand the situation. The first roll film
was launched way back in 1884 by George Eastman. It was part of an economic trajectory
patented by the year 1900, and George had created a big market of photography using a
Brownie camera. The Brownie camera had come up to a successful point extending to the
entire region of New York through Rochester and then worldwide. Unfortunately, Kodak had
experienced a tragic end from the growth of other competitive products and innovations, and
this is a critical lesson learnt about innovation. No matter what is created in the market in
terms of growth as a result of innovativeness, any reliance on existing ideas will shut down in
the long run. Kodak failed to learn fast enough, and it eventually led to the bankruptcy of the
entire company.
Innovation can sometimes go hand in hand with entrepreneurship in a number of ways. The
truth here lies in the situations where innovations are born out of the entrepreneurial spirit of
an individual. While innovations bring new ideas, entrepreneurship creates the value. Both
innovations and entrepreneurship are crucial, and none can exist without the other. However,
without entrepreneurship, innovations cannot create a value for many people. For this reason,
entrepreneurship is more important than innovations in ensuring success of a business.
One of the main conditions for the formation of competitive, strategic perspectives of the
enterprise is its innovative activity. Implementing innovation is the only way to increase the
competitiveness of goods produced and support high rates of growth and profit. However,
experts predict that we should not expect a significant progress in the development of
innovative

26
sphere in the near future. The main reason is a lack of practical experience of innovation in
market conditions. The roots of this problem go back in time. It is associated with the
orientation of research institutions on public. Many problems took place due to lack of well-
established infrastructure and support horizontal linkages between enterprises, academic and
financial institutions.
What is innovation? This is, first of all, a successful commercial use and implementation of
new ideas, knowledge and technology, and secondly, a process of converting new ideas into
those that have direct socio-economic impact. Innovative process extends from the inception
of the idea to its commercial release, covering the full range of relations: production,
exchange, and consumption.
It integrates science, technology, education, economics, entrepreneurship, management, due
to the nature and quality of their interactions and relations. Innovation is the result of a
collective effort, where success depends not only on the field of science and technology, but
on a much broader range of industries and social environment.
The experience of successfully developing companies shows that today survive those, who
can respond quickly accommodate to changes and is continually innovating. Worldwide
innovation today is not a whim, but a necessity of survival, maintaining competitiveness and
further development.
The basic contradiction in the field of innovation is, on the one hand, a high innovation
potential, and on the other one, the economic structure and economic mechanisms, which do
not allow this potential to be perceived. Innovative problem is not only a problem of money
and institutions, but also a problem of human capital. People stand for innovation.
In Western countries, entrepreneurship is seen as a special type of management, based on the
search for new possibilities of goods production and services through innovation and the
ability to attract resources from a variety of sources. The manufacturing process involves the
creation of new goods, new methods of production, development of new markets, and
implementation of industry reorganization.

27
The main motivation for the development of innovation is the desire and commitment to the
management of strategic activities in general and, in particular, to innovation policy. In other
words, the company should be a leader and innovator who are willing to allocate resources
and develop new products. Another condition for innovation is an effective system of
marketing and sales.
THE ELEMENTS OF INNOVATION
Innovation is the successful development of competitive advantage and as such, it is the key
to entrepreneurship. The entrepreneurs are the dreamers, who take hands on responsibility
for creating innovation. It is the presence of innovation that distinguishes the entrepreneur
from others. Innovation, must therefore, increase competitiveness through efforts aimed at the
rejuvenation, renewal, and redefinition of organizations, their markets or industries, if
businesses have to be entrepreneurial. Fiona Fitzpatrick identified the following elements of
innovation:
1.
Challenge: What we are trying to change or accomplish-the pull
2.
Customer focus: Creating value for your customers ­ the Push
3.
Creativity: Generating and sharing the idea(s) - the brain
4.
Communication: The flow of information and ideas ­the life blood
5.
Collaboration: People coming together to work together on the idea(s) - the heart.
6.
Completion: Implementing the new idea-the muscle.
7.
Contemplation; Learning and sharing lessons lead to higher competency-the ladder
8.
Culture: The playing field of innovation includes: Leadership (sees the possibilities and
positions the team for action-the role model) People (diverse groups of radically
empowered people innovate ­the source of innovation) Basic values (trust and respect
define and distinguish an innovative organization-the backbone). Innovation values
(certain values stoke the fires that make the impossible possible-the Spark).
9. Context: Innovation is shaped by interactions with the world.
FORMS OF INNOVATION
In a start-up, the entrepreneur is regarded as the key actors in developing a business idea,
marshalling resources, and creating an enterprise to bring a new product or service to the
market. In a competitive business environment, the entrepreneur and the enterprise should
continue to seek lout now opportunities and make the necessary arrangement to convert

28
them into new goods and services. Innovation should, therefore, impregnate the entire
enterprise for the creation and invention of competitive edge and relevancy in the market
place. Innovation can take several forms:
i.Innovation in processes, including changes and improvement to methods. These contribute
to increases in productivity that lower cost and helps to increase demand.
ii.
Innovation in products or services. While progressive Innovation is predominant, radical
innovation opens up new markets. These lead to increases in effective demand which
encourages increases in investment and employment.
CHALLENGE FOR INNOVATION
The place of innovation in commercial success is the development or adoption of new
concepts or idea that leads to any form of increased organizational or social benefit.
Innovation is vitally concerned with novel approaches, new ideas, and originality, and it the
means by which ideas are exploited for competitive advantage. Creative ideas are not
enough for your business to survive. You need a process organization and culture that will
help you maximize your creative assets. This is innovation capability that helps your pull
together the best thinking within your business, enabling you to connect the organization
dots. Shapiro argues that perpetual and pervasive innovation is the key to long ­ term
sustainable success in the relentless competition for customers. To survive any competition,
you must rapidly and repeatedly re-invent yourself. The road map to reinvention starts by
applying the six R`s.
Rethink your underlying assumptions.
Re-sequence when work takes place.
Relocate where work is done to cut down on handoffs and delays.
Reduce the frequency of carrying our specific activities.
Reassign who does the work by exploring if someone else can achieve the same result
more effectively and efficiently.
Retool the technology that supports getting the work done. Could new software and
automated equipment transform our ways of working?

29
CHAPTER 10
CREATIVITY AND INNOVATION IN AN ENTREPRENEURIAL ORGANIZATION
Growth and development cannot be sustained without additional innovations (usually in the
product or services or in its marketing) with additional innovations, firms become
glamorous Introducing new products is usually seen as part of the process of innovation,
which is itself seen as the engine driving continued growth and development.
The winning performance of the entrepreneur and the organization focuses on:-
·
Competing on quality not prices:
·
Domination of a market niche;
·
Competing in an area of strength
·
Having tight financial and operating controls:
Porter (1985) argues that, while successful businesses will each employ their own strategy,
they achieve completive advantage through acts of innovation. Learning and problem-solving
are common activities in many working environments today, but some people believe that
true entrepreneurship occurs when individuals ignore the established ways of thinking and
acting and seek novel ideas and solutions that can meet customers` needs.
INNOVATION AND CREATIVITY
An innovation starts with creative ideas. Innovation is defined as the successful
implementation of creative ideas. Creativity by individuals and teams is a starting point for
innovation. It is a function of knowledge, curiosity, imagination and evaluation. Although
having a strong knowledge and level of curiosity are precursors for being creative but these
bits and pieces must be shaken up and iterated in ways. Then only the embryonic ideas must
be evaluated and developed into usable ideas. No doubt it is highly systematic.
So creativity and innovation differ in a way that, creativity refers to generating new and novel
ideas while as innovation refers to the application of an idea and generally is a collaborative
enterprise. In a nutshell, innovation is applied creativity.

30
How to increase your creativity and innovation:
1.
By observing and making use of all the senses. You need to sharpen the blade and
take everything in.
2.
Since innovation is based on knowledge, you need to continually expand your
knowledge base.
3.
Perceive the things carefully.
4.
Practice guided imagery.
5.
Incubate ideas by taking a break from them
6.
Seek out new experiences to broaden your experience portfolio.
7.
Redefine the problems completely.
8.
Come up with ideas at the beginning of the innovation process. Take breaks in
between.

31
CHAPTER 11
SOCIAL MEDIA: THE NEW MARKETING FRONTIER IN E-COMMERCE
Over the last 20 years, there have been advances in marketing media outlets and strategies.
One of the more recent forms is referred to as Social Media Marketing. This method can be
defined in a number of ways, but one of the best descriptions came from a marketing
professor at The University of Cincinnati, Ric Sweeny.
Social media marketing is the ability to use nontraditional communication and connection to
build a brand. Social media is one of today`s biggest forms of communication and it has not
only changed the way people interact everyday but also the way companies communicate.
Today's marketers have adapted the various forms of social media to perform a business
purpose.
As a result the adaptation of social media has taken been a focus of innovation and ideas for
the marketing world. Contemporary forms of social media are found in two very popular
websites, Face book and Twitter. Together, these sites are defining the platform for social
media in the digital world, and continue to adapt and evolve with advances in technology and
consumer preferences.
The big debate over social media marketing is, can it be relied on as the new marketing
standard compared to traditional marketing approaches. Others challenge that this outlet is
just
a complement to a strategy that uses multiple marketing methods. Regardless, social media
marketing is an effective form of marketing that needs to be embraced, especially if the target
audience includes people who are younger than age 40.
Marketing media styles have changed over the years and this newest form did not occur over
night; it has growing and developing as this media alternative has become increasingly
popular. This paper will review various approaches to social media marketing, some related
background, and how the process has changed over time. Adapting social media as a platform
for marketing is very different than the more traditional forms of marketing.
As mentioned before the two modern day outlets, Facebook and Twitter have become brand
names that at least for now, have become the standard in social networking, for personal as

32
well as business contacts. What better avenue for business than to gauge consumer
preferences and follow trends that will enhance the appeal of a particular product or service.
If you consider the definition of marketing from its own national organization, the American
Marketing Association, it is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers, clients,
partners, and society at large.
Likewise, the engine that propels marketing efforts is the field known as Marketing Research.
This is defined by the same organization as the function that links the consumer, customer,
and public to the marketer through information used to identify and define marketing
opportunities and problems; generate, refine, and evaluate marketing actions; monitor
marketing performance; and improve understanding of marketing as a process.
Marketing research specifies the information required to address these issues, designs the
method for collecting information, manages and implements the data collection process,
analyzes the results, and communicates the findings and their implications. Considering
these definitions, social exchanges like Facebook and Twitter become the ideal lab where
consumer opinion, ideas and preferences are freely exchanged and available to be cultivated
for business and commerce.
Before we can get into social media marketing I would like to review some of the history of
marketing. Throughout time, most consumer related products has been marketed to some
extent. This process certainly expanded when forms of print media, like the newspaper, began
to be available to everyone. In the most basic form of marketing this included product
advertisements. With the expansion of spoke media, such as radio, the use of advertising
greatly expanded.
The use of marketing techniques and refinement of target audiences began to expand with the
television. Even with these most common forms of influencing consumer attitudes and
behaviors, business has been limited in its ability to gauge consumer response other than
sales activity. With the ability to monitor a free flow of opinions that could affect the appeal
of particular goods or services, social networking provides a never-before forum for
improving techniques and resources to enhance sales and product development.

33
Traditional forms of marketing such as print ads, radio and TV are currently the primary
sources for marketing efforts simply because that is where the majority of consumers go for
information and entertainment. Certainly the growth of internet usage has caused many
consumers to shift that reliance to a more immediate source of targeted information. There is
little question that marketing plays a significant role in internet browsing.
In addition to the internet, many consumers are preferring to seek to be entertained by
podcasts, recorded music and streaming audio and video. Despite the significant expansion of
e-products, marketing efforts will continue to depend on the traditional methods,
especially for certain audiences that may not feel comfortable with or have the resources to
take advantage of electronic alternatives. For example without question, the popularity of
sporting events will continue to fuel the marketing efforts using traditional methods. Just like
the marketing efforts on television, sports-related marketers can target products that may
appeal to a particular population segment.
Even though print, radio, and TV marketing campaigns, will attempt to find the engaged
consumer, only 18% of TV ad campaigns are effective today, with 90% of people who skip
the advertisement .This means that one of the biggest markets in marketing and advertising
is often overlooked. With that in mind, it is not hard to see why marketing efforts are eager
to focus resources on new and more effective forms of advertising and marketing products
to consumers.
This new approach to reaching customers continues to grow every day, especially since the
use of the computer and the internet have become the preferred method for people to gain
and share information and ideas. Originally in the early days of the home PC, the only
marketing that was present on the internet was the banner ad and the ability to interact
with people through messages boards and chat rooms. With the expansion of the internet,
people began to use the computers for many different forms of entertainment. As a result,
consumer marketing also grew in this virtual world, taking advantage of blogs and popular
entertainment websites such as YouTube. To demonstrate the impact there are 65,000 new
YouTube videos per day and 200,000,000 blogs on the web today, with 57% of the online
community joining a social network site .Unlike traditional media, the online audience can
rapidly interact with a global audience.

34
Social media marketing is effective for different sizes of companies. Larger companies, use
this medium to refine product effectiveness and enhance sales efforts. Whereas small
companies use these tools to establish name recognition and brand loyalty. Both large and
small companies benefit from the ability to talk to the everyday customer, and share
upcoming improvement, new products and ideas to keep them interested and informed. It is a
great method for all companies to create excitement and urgency around products.
As with internet message boards, the more that companies are able to get people talking
about your products, the more likely those consumers will continue to be customers. I heard
a quote that it doesn't matter if people are talking about your product in a good or bad
way; you`re getting your product out there anyway.
As long as the publicity is out there it is likely positive. In a copy of Communication World
last year; Angelo Fernando talked about this issue of getting people talking about your
brand. He shared a story about a BMW customer chat room (http://bmwboard.com). People
would discuss negative items such as water pump leaks and issues unflattering to the brand.
But did they stop the interaction?
One of the most exciting uses of social networking in business is building excitement and
anticipation around a new product or service. The more that companies can create a buzz
about the features and advantages of a new product, the more likely they will enhance the
sales when the product is released. Common examples of this include new products such as
cell phones, and video games. The excitement started online as the company began to release
or leak product details to the online community long before the product was released. It
doesn't take long to get people talking and social networking is a proven outlet to create this
interest.
Of course with anything in life, there is always a downside. When marketers create
interest in products or services based on promises or untested information that is leaked to
an online community, they must make sure their product will perform as it is supposed to.
If the product is flawed or simply doesn`t work, the word is spread pretty quickly. In the
past, a manufacturer had some time to evaluate product roll-out and maybe even time to

35
make improvements before consumers were aware of the problems. With today`s
instant feedback, consumers write product evaluations online, causing flawed products
to be doomed in a short period of time.
Likewise, when consumers believed that a company has intestinally misrepresented a
product, it will be known quickly though out the work by using these social networking
forums. In fact, if the consumer feels ripped-off, the great amount of negative writing
with blogs and simple consumer interaction through the online networks, the company
may never recover.
Another example is in the Tech community, products like software, computers and
electronics are put to the test before something even hits the store. This means that your
product is up for the mercy of the reviews. If a product does well it will be promoted
throughout the social media sites. Likewise if something gets a bad review, the sales of
the product will suffer.
Social media marketing in today's world is new and upcoming for marketing and it offers a
great deal of value in today`s society. According to Marta Kagan within the next year,
Generation Y will outnumber the baby boomers generation. This generation is the
generation that will have grown up on computers over their entire life. This generation also
is also holds a large percentage of accounts on social media sites like Facebook and
Twitter. In addition to this large presence of people online, Generation Y has influence in
what products are bought. According to an article in USA today At 82 million people,
Gen Y is the most influential generation for retailers because it is bigger than the baby
boomers and its members have spending power and strong opinions at an earlier age
(O'Donnell). This demonstrates that this next generation is essential to marketers and
branding agents because they represent spending patterns, buying influence, and revenue
growth for companies. Companies that don`t capitalize of the preference and necessity to
promote educate and transact business using online resources such as social networking,
may find themselves irrelevant with the new consumer.
The use of Facebook, Twitter and online blogs has proven to provide a large influence on
buyers. One of the reasons is simply that people in these online communities tend to believe

36
those in their community before an advertiser .Most people today will likely look at
websites/ blogs and ask friends before going to a store or purchasing a product.
Today's consumers are more educated about the products they buy. With today's technology
almost everyone today has the ability to skip advertisements while watching recorded TV.
Business as usual for the TV marketer is going to continue to become more difficult. With
the expansion of DVR technology, the desired practice of watching a program and skipping
ads brings up a new problem of how we reach these consumers likewise this is also the case
with recorded radio and podcasts that allow consumers to listen to desired programming
and entertainment on-demand and without the advertisements. Consumers are tired of
being bombarded with advertisements and the marketer needs to be creative and engage the
consumer with methods that they are comfortable with and have interest when they are
motivated to buy.
Even though social media marketing may seem essential for the future, we as a society still
have some gaps with this dependence on technology. As marketing professional focus on
the advantages of social network marketing, there is still limited to segments of society that
do not participate in these new forms of interaction.
Regardless of income, some people choose not to take advantage of social media marketing
and just have little interest in taking advantage of these public resources; until we see people
using computers and sites like Facebook and twitter within everyday interactions, traditional
methods of marketing will continue to have a foothold in our society. Make no mistake, just
as the growth of these communities have exploded in just a few years, technology will
continue to pay an ever increasing role in all parts of society. Certainly the next generation
of social networking platforms and websites will continue to further highlight the essential
role of this marketing tool in business.

37
CHAPTER 12
THE DEBACLE OF VISHAL RETAIL
Cash is the king in retail business.
Ramchandra Aggarwal is the chairman, managing director of V2 retail ltd .He is in far better
footing now after his big mistakes, at Vishal retail, with V2 retail. He has gone through the
Rags to Riches `phase in life.
In 1986, when Aggarwal was an assistant manager in a rolling shuttering company, he
noticed the rising demand for readymade garments. So, he started one in the year 1986, at
Kolkata Lal Bazaar, which comprised of a 50 sqft store which would not accommodate all of
his dreams then he moved to Delhi set up Vishal retail in 2011.
For instant expansion, Aggarwal admits taking rash decisions like opening too many stores
trusting too many people .When Aggarwal wanted to dilute equity there were no buyers and
soon everything started to fall apart.
An initial public offer in 2007 brought in Rs 110cr,but the next year, downtown hit Vishal
retail, the country`s first publicity traded retail firm went bust. It incurred a debt of Rs 750
crores falling sales rising cost; Aggarwal sold the business to Air plaza retail holidays ,a
Shriram group company private equity firm TPG ,wholesale for Rps70cr,in march
2011.Vishal Retail Ltd. was totally debt ridden.
Aggarwal recovered his business in the market with his second innings within few months
with V2 using modest calculative modes. Focusing on mass markets, he opened small
outlets in places like Bihar, Delhi Odisha cowering 15 stores that have least retail
exposure, but high demand .Now V2 retail stores occupy 10,000-15,000 sqft compared with
Vishal`s 40,000 sqft.
A key strategy he follows now is to go slow open smaller shops with only apparels. Food
grocery are totally out as margins are very thin. He works with cash in hand, than taking
short term debts monitors cash flows closely after burning his fingers in debt. They buy
directly from vendors now, instead of using middlemen, as was the practice a few years ago.

38
As their credibility was hit during the Vishal crisis bankers were not showing up for funding.
But slowly they are clutching up by improving the bankers confidence. Aggarwal is also
putting information technology, systems processes in place, which he sees as crucial to
efficiency transparency.
First priority is for management bandwidth then he gives importance for expansion of his
business. Hence it is understood that no one is born with a golden tooth; make a better life by
adopting accepting risks in life. Learn from failures .As Aggarwal now follows the mantra
from Bhagavad Gita - Stay detached emotionally but work with passion.
There are two kinds of companies in retail, one that learn implement and one that never
learns.
To sum up:
1 .Entrepreneurs often suffer because of over-ambition their quality of trusting people so
easily.
2.
Entrepreneurs can be resilient if they learn from failures.
3.
Perseverance is the goal to success.

39
CHAPTER 13
THEORIES OF ENTREPRENEURSHIP
Entrepreneurship is an evolved thing. With the advancement of science and technology it has
undergone advancement of science and technology it has undergone metamorphosis change
and emerged as a critical input for socio-economic development. Various writers have
developed various theories on entrepreneurship and developed various theories on
entrepreneurship and popularized the concept among the common people. Theories
propounded by them can be categorized as under
·
Sociological theories
·
Economic theories
·
Cultural theories
·
Psychological theories
Sociological Theories
The following theories explain how sociological factors accelerate the growth of
entrepreneurs:
1-Theory of religious beliefs
2- Theory of social change
Theory of religious beliefs
Max Weber has propounded the theory of religious belief. According to him, entrepreneurism
is a function of religious beliefs and impact of religion shapes the entrepreneurial culture. He
emphasized that entrepreneurial energies are exogenous supplied by means of religious
beliefs.

40
Theory of Social Change
Everett E. Hagen, in his theory of social change propounded how a traditional society
becomes one in which continuing technical progress takes place. The theory exhorts the
following feature
which presumes the entrepreneur`s creativity as the key element of social transformation and
economic growth.
Entrepreneurship and economic development are interdependent. Economic development
takes place when a country real rational income increases overall period of time wherein the
role of entrepreneurs is an integral part.
Schumpeter's theory of innovation
Schumpeter`s theory of entrepreneurship is a pioneering work of economic development.
Development in his senses implies that carrying out of new combination of entrepreneurship
is basically a creative activity. According to Schumpeter an entrepreneur is one who
perceives the opportunities to innovate, i.e. to carry out new combinations or enterprise.
Schumpeter makes a distinction between innovation and invention. Invention means creation
of new things and innovation means applicable of new things onto practical use. Schumpeter
has given emphasis on the role of entrepreneurial functions in economic development in his
views, development means basic transformation of the economy that is brought about by
entrepreneurial functions.
The motives of creating things and applying these things into practice inspire the
entrepreneur to undertake innovation.
CULTURAL THEORIES
Advocates of cultural theories point out that entrepreneurship is the product of culture.
Entrepreneurial talents come from cultural values and cultural system embedded into the
cultural environment.

41
Hoselitz's Theory
Hoselitz explains that the supply of entrepreneurship is governed by cultural factors, and
culturally minority groups are the spark-plugs of entrepreneurial and economic development.
In many countries, entrepreneurs have emerged from a particular socio-economic class. He
emphasized the role of culturally marginally groups like Jews and the Greeks in medieval
Europe, the Chinese in South Africa and Indian in east Africa in promoting economic
development. Psychological theory centres on the psychological characteristic of the
individual in a society. Psychological characteristics affect the supply of entrepreneurs in the
society.

42
CHAPTER 14
CHALLENGES FACED BY WOMEN ENTREPRENEURS IN INDIA
Women entrepreneurs may be defined as a Woman or a group of women who initiate,
organize and run a business enterprise. Government of India has defined women
entrepreneurs based on women participation in equity and employment of a business
enterprise. Accordingly, a woman run an enterprise is defined as an enterprise owned and
controlled by a women having a minimum financial interest of 51% of the capital and giving
at least 51%of the employment generated in the enterprise to women.
Women entrepreneur constitute 10 % of the number of entrepreneur in the country. This has
been a significant growth in self-employment of women with women now starting new
ventures at three times the rate of men. They constitute 50% of the population of our country
with a lower literacy rate than men.
This statistical fact indicates that for the economic growth of the nation, women should not
be encouraged to make their share of economic contribution towards the country. One way of
achieving is by making women come out and become entrepreneurs. In the traditional
society, they were confined to the four walls, playing household roles, but in the modern
society, they are coming out to participate in all sorts of activities.
Normally, women entrepreneurship is found in the extension of their kitchen activities,
mainly in preparing commercially the 3Ps namely, Pickles, Papads and Spice powders.
Few of them venture into services industry relating to hospitality, catering, educational
services, consultation or public relations, beauty clinics, etc.
Women enter entrepreneurship due to economic factors which pushed them to be on their
own and urge them to do something independently. Women prefer to work from their own
work residence, difficulty in getting suitable jobs and desire for social recognition motivate
them towards self-employment.
We see a lot of women professionals in engineering, medicine, law etc. They are also setting
up hospitals, training centres, etc. An enterprise owned and controlled by a women having

43
a minimum financial interest of 51 per cent of the capital and giving at least 51 per cent of the
employment generated by the enterprise to women.
A woman entrepreneur can be defined as a confident, innovative and creative woman capable
of achieving self-economic independence individually or in collaboration, generates
employment opportunities for others through initiating, establishing and running the
enterprise by keeping pace with her personal, family and social life.
The biggest improvements had been an increase in the percentage of women entrepreneurs
who were using new technology and introducing innovative products. In addition, there has
been an increase in the percentage of women entrepreneurs who are 'growth oriented', that is
those who plan to add more than 10 new employees and achieve 50% growth in five years.
In the initial business stages, most women are forced to rely on personal funding, including
for meeting working capital requirements. A report released by International Finance
Corporation in 2014 said there was a finance gap of Rs 6.37 lakh crore (Rs 6.37 trillion)
when it came to meeting requirements of women entrepreneurs in the MSME (micro, small
and medium enterprise) sector. Lack of collateral and a misogynist mind-set are the main
stumbling blocks women face in accessing loans.
At present, it has 16 MNC members including Accenture, Cisco, Dell, IBM, Intel, Microsoft,
Marriott, and Hilton Hotels. Women entrepreneurs from the tech and non-tech sector -
including a premium chocolate venture -- have benefitted by obtaining orders from these
MNCs.
When it comes to catching up with their male counterparts, women have made great strides in
the business world over the years. But there's no doubt about it: Today's female entrepreneurs
are still up against a few major obstacles.
1.
Patriarchal Society: Entrepreneurship has been traditionally seen a male preserve and
idea of women taking up entrepreneurial activities considered as a distant dream. Any
deviation from the norm is frowned and if possible, immediately curbed. Women also have to
face role conflict as soon as they initiate any entrepreneurial activity. It is an uphill task for
women to face such conflicts and cope with the twin role.

44
2.
Absence of Entrepreneurial Aptitude: Many women take the training by attending the
Entrepreneurship Development Programmes without entrepreneurial bent of mind. As per a
study, involvement of women in small scale sector as owners stands at mere 7 percent.
Women who are imparted training by various institutes must be verified on account of
aptitude through the tests, interviews etc.
3.
Quality of EDPs: All women entrepreneurs are given the same training through
EDPs. Second-generation women entrepreneurs don`t need such training as they already
have the previous exposure to business.
4.
Marketing Problems: Women entrepreneurs continuously face the problems in
marketing their products. It is one of the core problems as this area is mainly dominated by
males and even women with adequate experience fail to make a dent.
For marketing the products women entrepreneurs have to be at the mercy of middlemen who
pocket the chunk of profit. Although the middlemen exploit the women entrepreneurs, the
elimination of middlemen is difficult, because it involves a lot of running about. Women
entrepreneurs also find it difficult to capture the market and make their products popular.
5.
Financial Problems: Obtaining the support of bankers, managing the working
capital, lack of credit resources are the problems which still remain in the males domain.
Women are yet to make significant mark in quantitative terms. Marketing and financial
problems are such obstacles where even training doesn`t significantly help the women. Some
problems are structural in nature and beyond the control of entrepreneurs.
6.
Family Conflicts: Women also face the conflict of performing of home role as they
are not available to spend enough time with their families. They spend long hours in business
and as a result, they find it difficult to meet the demands of their family members and society
as well. Their inability to attend to domestic work, time for education of children, personal
hobbies, and entertainment adds to their conflicts.
7.
Credit Facilities: Though women constitute about 50 per cent of population, the
percentage of small scale enterprise where women own 51 percent of share capital is less than

45
5 percent. Women are often denied credit by bankers on the ground of lack of collateral
security. Therefore, women`s access to risk capital is limited.
The complicated procedure of bank loans, the inordinate delay in obtaining the loans and
running about involved do deter many women from venturing out. At the same time, a good
deal of self-employment programme has been promoted by the govt. and commercial banks.
8.
Shortage of raw-materials: Women entrepreneurs encounter the problems of
shortage of raw-materials. The failure of many women co-operations in 1971 such as those
engaged in basket making were mainly because of the inadequate availability of forest-based
raw materials.
9.
Heavy Competition: Many of the women enterprises have imperfect organizational
set up. But they have to face severe competition from organized industries.
10.
High cost of production: High cost of production undermines the efficiency and
stands in the way of development and expansion of women`s enterprises, government
assistance in the form of grant and subsidies to some extent enables them to tide over the
difficult situations.
However, in the long run, it would be necessary to increase efficiency and expand productive
capacity and thereby reduce cost to make their ultimate survival possible, other than these,
women entrepreneurs so face the problems of labour, human resources, infrastructure, legal
formalities, overload of work, lack of family support, mistrust etc.
CONCLUSION
India is a male dominated society and women are assumed to be economically as well as
socially dependent on male members. Women entrepreneurs faced lots of problems like lack
of education, social barriers, legal formalities, high cost of production, male dominated
society, limited managerial ability, lack of self-confidence etc.
Government takes various steps for the upliftment of women entrepreneurs in 7th five-year
plan, 8th five-year plan and in 9th five-year plan. Women have the potential and

46
determination to setup, uphold and supervise their own enterprise in a very systematic
manner, appropriate support and encouragement from the society, family, government can
make these women entrepreneur a part of mainstream of national economy and they can
contribute to the economy progress of India.

47
CHAPTER 15
WOMEN ENTREPRENEURS FORGING AHEAD WITH STARTUPS
Gone are the days when you would find women confined to the house and hearth. Today,
women are at the forefront in all fields, be it technology or business, competing with men and
in many areas forging ahead of them. The face of entrepreneurship is changing as well. We
have, not only the seasoned entrepreneurs such KiranMajumdar of Biocon and our television
queen, Ekta Kapoor of Balaji Telefilms but several exceptional and talented women
entrepreneurs emerging in the new startup phenomena in India.
India is at the cusp of entrepreneurial transformation with Bangalore being the hub of startup
culture. With the entrepreneurial spirit growing among Indians, women are not far behind.
What was once a male dominated world can today boast of more than 80 startups by women
from different areas of expertise? Though, the women entrepreneurial spirit in India is still in
a budding stage, here are a few stellar examples of women who have taken the plunge and are
leading from the front:
Anita Ahuja's Conserve India turned discarded plastic bags into a valuable resource. She
combines principles from enterprise and social service in a venture that recycles plastic waste
and provides employment for rag pickers. The social venture has created employment for
scores of underprivileged people and also become a solution for solving the problem of
plastic waste. Today, using a proprietary process, Conserve India transforms discarded plastic
bags into a variety of fashionable products that are sold in high-end retail outlets abroad.
Anita is an Ashoka Fellow.
Saloni Malhotra is the founder of DesiCrew, which is an organization with over 300
employees who are focused and determined to create knowledge based livelihood or
employment opportunities in rural areas and small towns.
Today, she has handed over the management of DesiCrew to a management team and is busy
with another startup, Safe city, which is a citizen`s initiative to make Indian Cities safer
again. Desicrew now has now four rural offices -- Udupi, Apakoodal and Kollumangudi and
employs 300-odd people from these villages. Saloni did her engineering from University of

48
Pune and started her career at an interactive media company called Web Chutney, but her
inspiration for entrepreneurship came from Professor Jhunjhunwala of TeNet group, IIT
Madras. He motivated her to pursue rural IT and BPO work via the IIT incubator. She is the
recipient of FICCI`s Best Women Social Entrepreneur Award (2009) and TIE StreeShakthi
Award (2011).
Anu Sridharan is the founder of Next Drop, a company which allows Indian residents in the
urban areas to track the availability of piped water through SMS.Anu works with the city
operator's authorities to monitor the water system and thenNextDrop sends text messages 60
minutes before water arrives in your tap. It also offers utility boards the tools to better
manage and track leakages in water supply. Anu holds her Bachelor`s and Master`s degrees
from the Civil and Environmental Engineering program at the University of California,
Berkeley
Ajaita Shah Founder and CEO of Frontier Markets, started in 2009, focus on energy products
and connecting with a microfinance partner in Karnataka. Ajaita trains locals to educate and
sell to rural households. The company has sold 10,000 solar solutions to date. Ajaita has
worked on numerous development projects in 7 states in India and has consulted with the
World Bank about microfinance in South Asia and Latin America. She has an experience of
over 5 years in Microfinance with esteemed organizations like Ujjivan Financial Services and
SKS Microfinance. She has been recently awarded the Forbes Magazine`s Top 30 Under
30`s Social Entrepreneur of the Year.
Ishita Khanna, founder of eco-tourism company Spiti Ecosphere, grew up in Dehradun and
joined TISS, with a master`s dissertation on eco-tourism. Her passion for environmental
planning and ecology conservation of the majestic mountains led her to pursue this path. At
an altitude of 17,000 feet above sea level, Spiti in Himachal Pradesh is one of the most
beautiful places in the world but for people living there, it is a harsh life without even the
basic facilities. Ishita learned about the properties of local berries of the sea buckthorn
variety, and started an NGO called Muse to produce berry pulp. Taken in by the local charm
and opportunities for tourism via the Internet, she then founded Spiti Ecosphere in 2002,
inSpiti to promote eco-tourism in Himachal Pradesh.

49
Thanks to a unique initiative by IshitaKhana to improve the quality of lives of the 12,000 odd
villagers in Spiti, many families have begun cultivating sea buckthorn, selling it under the
organic brand named called `Tsering` (which means blessings for life), which is now
available across India.
Aditi Avasthi is the founder and CEO of Embibe.com, an online test preparation portal
specializing in engineering entrance exams. It is a platform for preparing students for
engineering and medical exams. Mumbai-based Individual Learning Pvt Ltd, which owns and
operates Embibe.com, has now acquired 100Marks, a student guidance platforms for JEE
mains, JEE advanced and medical exams, in a cash plus stock deal, as per a company
statement, In acquiring 100Marks, we have not only added a JEE prep guidance platform,
but also committed young entrepreneurs to our team said AditiAvasthi, founder and CEO,
Embibe.
Sumita Ghose : She is the founder and managing director of Rang sutra, a social enterprise
which seeks to bring about socio economic development and inclusive growth in rural India
by engaging both: the community and the market.Rangsutra is owned by 1800 rural artisans-
most of whom are women.Sumita, the founder grew up in Calcutta and studied in Bombay.
Inspired by the Amul story, she and her husband devoted themselves to rural empowerment
work in Rajasthan and then in Assam. However, her husband was abducted by ULFA
militants and never seen again. She then founded Rang Sutra to source textiles and crafts
from artisans and retails them at FabIndia, with a strong focus on quality and punctual
delivery.
Chiki Sarkar with 'Juggernaut'is set to become India's first phone publisher. Ex-publisher of
Penguin Random House wants to entice new readers by presenting books as 'snacks' on the
phone, and Nandan Nilekani is backing her idea. A mobile app for a book publisher indeed
seems to be sharply futuristic idea that which has been envisioned along with her co-
founderDurgaRaghunath, who has worked in digital publishing for over a decade. According
to Chiki Sarkar, Juggernaut will offer all kinds of books: serious and commercial, that you
can buy in a bookshop, or download as an e-book. India is going to be transformed into a
one-device economy with the phone being the primary device, so Indian will also read on the
phone. She promises a strong and robust physical book list by April 2016 with a modest
beginning of 25 titles. But alongside, she is also gearing up to become, from February 2016,

50
India`s first phone publisher. Sarkar has raised Rs 15 crore for her company, which, she
emphasizes, is only round one. The two main investors are Nandan Nilekani, ex-CEO and co-
founder of Infosys, and William Bissell, the managing director of FabIndia.
These are but a few pearls in the ocean...Though the women entrepreneurial spirit has sown
it seeds deep in the last few years, it will take time for more women to come out and take the
plunge. The above women can provide enough inspiration to encourage women to dream big
and to take risks in spite of being burdened with family responsibilities.
Though the women entrepreneurial spirit has sown it seeds deep in the last few years, it will
take time for more women to come out and take the plunge.
50 of 50 pages

Details

Title
Ethics and Entrepreneurship. New Paradigms
Grade
1.00
Author
Year
2017
Pages
50
Catalog Number
V375939
ISBN (Book)
9783668533691
File size
992 KB
Language
English
Notes
This is a collection of articles on ethics and entrepreneurship.
Tags
woman, india, entrepreuneurship, social media, innovation, e-commerce, csr, cse
Quote paper
Dr. Venkatesh Ganapathy (Author), 2017, Ethics and Entrepreneurship. New Paradigms, Munich, GRIN Verlag, https://www.grin.com/document/375939

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