International Entrepreunership in developing a country like india . Please give your suggestion in building an Indian MNC

India is a developing nation which needs to utilise its natural resources in an optimal fashion in order to create wealth for the nation . As a nation our major strenghts are skilled manpower  , technical skills , access to modern technology  & ecenomical costs of labour . However we also have certain inherent weaknesses like poor infrastructure  , lack of literacy & a great number of people living below the poverty line.

International Entrepreunership will benefit our country in the following ways

• It will develop industrially with some infrastructure a part of India where the project will be set up.
• It will aim to generate employment amongst the local people & the functioning of this firm will benefit the community at large.
• Its products & services will add to the GNP /GDP  & will be a source of tax collection for the government besides contributing to increasing the basic standard of living & per capita income.
• It will earn valuable foreign exchange will India badly needs to reduce its balance of payment position . The future commercial strength of India will depend on the ability of its entrepreuners & other established companies to take advantage  of markets outside the countrys borders.

Suggestions for building Indian MNC

Before an entrepreunership organisation  thinks of doing buisness on foreign soil it should first consolidate  & have  preferably leadership foot hold  in the domestic market. It should have  encountered  any of the following conditions

• Saturation in local market
• Declining market size in India ie de-growing markets for its products
• Has core competency in existing field of business with spare capacity  & hence looking to expand in terms of geographical boundaries .

Under such conditions a producer of goods & services should look forward to cross boundaries into other nations to sell his goods & services . They should start  off by tapping neighbouring countries   before expanding to further areas.

 

Before  an Indian entrepreuner thinks of doing business abroad he must understand how international business differs from his local business . The key to his success lies in being able to understand the above & respond accordingly. International entreprenuerial decisions  are more complex due to the following factors

• Economics – Creating a business strategy for a multi country area means dealing with differences with levels of Economic development, currency valuations , government regulations , banking , systems as well as market /distribution systems . The extent of the quality of these factors significantly impacts the ability to succesfully engage in international business .
• The countries balance of payment (BOP)- differenec between imports versus exports effects  the valuation of its currency & hence effects  its ability to do business with developed countries.
• Political enviornment – The difference in political & legal environments across international markets pose different cahllenges  in doing business  in foreign markets.Each element of the business strategy of the inmternational entreprenuer can be effected  by political/legal
• Culture – The impact of culture on Entrepreuners is significant with respect to the strategies that they intend to employ. Each element of the business plan has to have some degree of congruence with local culture . Understanding local culture is essential to development of the entrepreuners worlwide strategy plan, the degree of adaptation  & standardisation would vary in each country.
• Technology – Like culture varies significantly across countries  & industyr standards  vary from country to country .

Hence the major steps should be

• Stage 1 – make initial movements into international business following a highly centralised decision making process. Tread carefully & start  up operations through direct or Indirect exports. In this stage the entreprenuer & his organisation undergo the learning & experience curve effects which will help in the long run
• Stage- 2 – Once the business is succesful & the organisation ahs managed to transfer its competencies across borders into many countries, the decision making process has to get de-centralised. The firm could  employ a multi country strategy by tailoring its producst to suit each countries preferences & culture  or go in for high degree of Integration & standardisation.
• Stage- 3- Once decentalisation is carried out the HQ should retain tight control overr strategic decisions & tactical implementation of corporate strategy.

Trade barriers

• Import quotas particularly imposed by developed nations on goods allowed from developing nations .
• Local tariffs / import duty in developed nation making indian goods non-competitive.
• Subsidies to local manufacturers makes imports unviable
• Trade blocks & free trade areas between developed nations & their neighbours encourages trade between them For e g EU countries , NAFTA etc. which reduces indias chances of doing business in these sectors.

Trade barriers increase an entrepreuners cost of exporting products  & hence such incrased cost will force entrepreuner to establish the manufacturing base in those countries to surmount such barriers .

Favourable Conditions

The indian government is encouraging international entrepreunership by offering the following initiatives.

• Tax sops on export earnings
• Setting up of export processing zones close to ports
• Waiver of import duties on essential RM meant for processing export goods
• Waiver of sale tax, octroi  & other govt. levies on export goods
• Providing for cheaper land to 100 % EOUs

What is the Entriprenurial decision process?

Many individuals have difficulty bringing their ideas to the mkt and creating a new venture. Yet, entreprenuership and the actual entreprenurial decision hv resulted in several million new businesses being started throughout the world. Altough no one knows the exact no., in the united states estimates indicate that 1.1 to 1.9 million new companies hv been formed each year in recent years. Indeed millions of ventures are formed despite recession, inflation, high interest rate, lack of infrastructure, ecnomic in certainty and the high probability of failure. Each of these ventures are formed to a very personal human processes that, although unique, has some characterstic common to all. Like all processes the entreprenurial decision process initiates the movement, from something to something  –  a moment from a present life style to forming a new entreprises, as indicated.

1. Change from present life style: the decision to leave a career or life style is not an easy one. It take a great deal of energy to change and do something new and different. Although individual tend to start business in area that are familier, two work environments hv been particular good for spawning new entreprises, r&d, individuals development, new product ideas or processes and often leave to form their own companies, when this new ideas are not accepted by their employers. Perhaps and even stronger incentive to overcome the inertia and leave a present life style to create something new come from a negative force – disruption. A significant no. of companies and formed by people who hv retired, who are reallocated due to a move by other members in a dual – career family, or who hv been fired. There is probably not greater force than personal dislocation.

 

The decision to start a new company occurs when an individual perceives that forming a new entreprise is both desiable and possible.

 

Work environment, disruption:  

 

2. Desireability of a new venture formation : the perception that starting a co. is desirable results form an individuals culture, sub culture, family, teachers & peers. A culture that values an individual who successfully creates a new business will spawn more venture formation that one that does note. Countries with cultures that more closely emulate this attitude do not have as high a business formation rate. It will be interesting to watch which of the once – controlled economies will develop a pro-entrepreneur culture. No culture is totally for or against entrepreneurship. Many sub cultures that shape value systems operates within a cultural framework. There are pockets of entrepreneur subculture in the united states. This sub culture supports & even promotes enterpreneurship – forming a new co. – as one of the best occupation. No wonder more individuals actively plan new enterprises in this supportive environments. There are also variations within this subculture caused by family traits. A very high percentage of the founders of co.s  had fathers or mothers who valued independence. The independence achieved by co. owners, professional, artists, professors or farmers permits their entire family life, giving encouragement & value to their children’s co. – formation activity.

 

Encouragement to form a co. is further stimulated by teachers, who can sinificantly influence individuals regarding enterpreneurship as a good possible career path. Schools with exciting course in enterpreneurship & innovations tend to develop entrepreneurs & can actually drive the  entrepreneur environment in an economical area. An area having a strong education base is a strong support factor for entreprenural activity & co. formation. Peers are very impt. In the decision to form a co. an area with an entrepreneur pool & a meeting place where entrepreneurs & potential entrepreneurs can discuss ideas, problems & solution spawns more new co.’s than an area where these are not available.

3. Possibility of new venture formation: Several factors- govt., background, mktg, role models & finances – contribute to a creation of new venture. The govt contributes by providing the infrastructure to help & support a new venture.countries that have a repressive tax rate on business or individuals can suppress company formation, since companies will not have the money to start & grow & monetary gain cannot be achieved. However the social, psychological & financial risk are still present. Formal education & previous business experience gives a potential entrepreneur the skills needed in forming & managing a new enterprise. Although education systems are important in providing the needed business knowledge, individual will tend to be more successful in forming business in fields in which they have worked. Mktg also plays a critical role in forming a new company. In addition to the presence of market of sufficient size, there must also be a level of mktg know-how to put together the best total package of product, price, distribution & promoting needed for successful product launching. A co. is more easily formed where the driving force is from market demand than a technology push. A role model can be one of the most powerful influence in making co. formation seem possible. To see someone else succeed makes it easier to picture yourself engaged in similar activities-of course, even more successful. Finally resource must be readily available. Risk capital availability plays an initial role in the development & growth of

why enterprenureship mgmt is a compulsory subject for mgmt study

The overall for a course in enterprenuership:

1. Understand the role of new and smaller firm in the economy
2. Understand the relative strengths and weaknesses of the different type of enterprise
3. Know the general characteristics of the entreprenurial process
4. Assess the students own entreprenuership process
5. Understand the entrepreneurial process and the product planning and development process
6. Known alternatives, methods for identifying and evaluating business opportunities and the fact is that support and inhabit creativity
7. It develop an ability to form, organise and work in interdisciplinary teams
8. Know the general correlates of success and failure in innovation and new venture creation
9. Know generic entry strategies for new venture creation
10. Understand the aspects of creating and presenting a new venture business plan
11. Know-how to identify, evaluate and obtain resource
12. Know the essentials of: mktg plan, financial planning, operation planning, orgn planning, venture launch planning.
13. Know how to manage and grow a new venture
14. Know the managerial challenges and demands of a new venture launch
15. Understand the role of entreprenuership in existing orgn

 

role of entrepreneurship in the role of economic development of a country

1. the role of entrepreneurship in economic development involves more than just increasing per capita output & income; it involves initiating & constituting changes in the structure of business & society. This change is accompanied by growth & increase output which allows more wealth to be divided by various participants. Entrepreneurship is presently the most effective method for bridging the gap between science & the mkt. place., creating new enterprises & bridging new products & service to the market. These activities significantly effect the economy of an area by building the economic base & providing jobs given its impact on bot the overall economy & the employment of an area.

Following roles are played by entrepreneurs in economic development of the country:

1. Raises productivity
2. Powerful tool for job creation
3. Transfer of technology
4. Strategic role in commercialising new invention
5. Crucial role in restructuring & transfer of economy
6. Reduce concentration of economic power
7. Support growth to organised sector
8. Make market more competitive
9. Stimulate a redistribution of wealth, income & political power
10. Improve social welfare
11. Create new market- expansion into international market

12. Is low cost strategy of economic development, job creation & technical innovatio

Role of SIDBI in devp. Of small scale industries.

modernisation & technology upgradation

For this technology upgradation & modernisation of SSI units, SIDBI has a no. od schemes of assistance, the major among these are technology development & modernisation fund(TDMF) scheme. In line with the announcement made by the union finance minister in union budget 95-96, SIDBI in april 95, had setup its on resources, a technology development & modernisation fund with an ear mark corpus of 2 billion. The fund aims at encouraging existing industrial units in small scale sectors to modernise their production facilities & adopt improved  & updated technology so as to strengthen their export capabilities. Direct assistance by way of term loan or participation in equity or both is provide to SSI units.

The TDMF scheme has been liberalised to include :

1. Non exporting SSI/Ancillary units
2. SSI/Ancillary units which are graduating out of SSI sectors on implementation of modernisation programs as eligible units of assistance under this scheme.

Under TDMF scheme direct assistance is provided at the prime lending rate of SIDBI with no up front fee.

1. Marketing finance:

To assist SSI in mktg. Of their products, SIDBI had created a mktg. Development assistance fund(MDAF) in 1995-96 by appropriating a sum of rupees 100 million out of net profit. The corpus of the fund has been expanded to rupees 350 million. Out of this a sum of rupees 25 million has been specially year mark for providing mktg assistance to women entrepreneurs. MDAF provides for financing innovative mktg projects through a suitable mix of instruments like loans, conditional loans, grant & equity. Under the mktg. Scheme assistance ins also available for intangibles like marketing research, R&R, product upgradation & standardisation, preparation of strategic mktg plans, advertising, branding, catalogue preparation, production of audio/visual aids, participation in trade fairs/ exhibitions, undertaking sales promotion tours, establishing distribution networks, retail outlets & warehousing facilities etc. besides this assistance  is available for development for infrastructure. Working capital term loan requireents & bills discounting facilities for service providers are also covered under the scheme.

1. Development of Industrial Infra-structure:

Laying special emphasis on the development of infrastructure of the SSI sector SIDBI launched an improved scheme “of direct assistance for development of industrial infrastructure for  the SSI sector”. The range of assistance covers the setting up of industrial estates /development of industrial areas, strengthening of existing industrial estates & clusters setting up of common facilities centre’s, warehousing & container services, electronic & software technology parks, permanent exhibition cum sales outlets, mktg outlets etc. wherever  the benficieries are predominantly SSI’s. SIDBI also operates scheme for integrated infrastructural development (IID), under which financial assistance is provided for the setting up of IID centre’s .

1. Bill Discounting & Factoring Services :

In order to promote a bill culture and to mitigate the problem of dealyed payment of reciveables by SSIs, SIDBI operates two schemes, viz.; Direct discounting of bills (Components) and Direct Discounting of Bills (Equipment). DDS (Components) covers arising out of purchase of indigenous components parts / subassemblies / intermediates manufactures by SSI units, primarily targeted to help SSIs realize their payments quickly.

1. National Venture Fund for Software and IT Industry :

• A national level venture fund, viz; National venture fund for software and IT Industry was launched on December 10,1999 by Hon’ble Prime Minister of India.
• Main objective of the fund is to meet the total fund requirement of software and IT companies.
• The fund would also develop international networking and enable assisted units to attract co-investment from international venture capitalists in subsequent round of financing.
• NVFSIT is closed ended 10year fund with an initial corpus of Re.1 billion promoted by SIDBI.
• The fund is being managed by SIDBI Venture capital Limited a wholly subsidary of SIDBI.

1. Credit Rating for Exporting SSI units:

SIDBI has an arrangement with Dun & Bradstreet information services (I) pvt.Ltd. (D&B) to provide credit rating and allied services to SSI units.

1. Incubating Centres:

SIDBI launched National Program on Innovation and incubation for small Industrial under which incubator facilities are provided to the project, which are at seed stage, and having high research and development content and are technology focused to reach the pre-commercial stage, has been initiated.

Product/Project Identification

Product selection: one has to select the right product, it involves research, careful evaluation & sound judgement. This activity is called the product selection analysis technique.

This technique consists of following steps:

1. Idea generation
2. Search & screen
3. Evaluation

Product Idea: can be generated in a no. of ways. They are as follows:

1. Observations
2. Foreign publications
3. Brainstorming sessions
4. Talking to various bodies like SISI,SIDC, The national small Industries Corp. Ltd. & The national Institute for Enterpreneurship & small business development
5. Talking to large scale pvt/public co. can also generate ideas

Product Search & screening

After we come up with product ideas, we look at products presently available & products related to those products ideas. Then pose the explortoey questions:

1. Are customers satisfied with what they are getting?
2. Can we identify a better method of production?
3. Can the basic design be changed?
4. What is the present demand, future demand likely to be & so on?
5. What are the skills?
6. Can I handle the technical subjects?
7. If not can I hire people easily?
8. Do the product idea generated match my basic interest or do I have to develoe nnew area of interest?
9. How much knowledge do I have about the markets?
10. Can I dig more info easily?

As a prospective entrepreneur one should know the bent of mind one has by asking the following questions.

1. Am I comfortable in the room full of strangers?
2. Can I deal efficiently with people in position of power?
3. Can I communicate efficiently & freely with?

If yes, mktg. Is the strong area or may be one has a head for figures an details. Then finance may be the area of strength. One could be interested in mechanical

& technical matter with flair for conceptualising & design. Then production or product design can be the areas of strength.

Production Evaluation Techniques

These are products, which have to be evaluated objectively & in depth..   This is the product evaluation. This evaluation is carried on the following factors:

1. Growth
2. Stability
3. Marketability
4. Company position
5. Production

Stability

1. Performance of mkt.

A product for which there is likely to be long lasting demand would enjoy a higher degree of market permanence than an item likely to become obsolete.

2. Breadth of mkt.

A product used by a variety of customers belonging to various mkt. Segment and covers greater no. of consumers and is rated very well.

3. Possibility of captive mkt.

A product, which provides a unique and exclusive solution to specific mkt. needs, would be a very good rating.

4. Difficult of copying.

Products that are highly technical and difficult to copy would be rated very good.

5. Stability in recession

Luxury items are rated poor because they are susceptible to drop in demand levels during economic recession. On the other and consumer goods having regular demand may be rated very good.

Growth Factors

1. Uniqueness of product

A product that satisfies mkt. need exclusively or can replace a more costly product by material substitution or better design possess a high degree of uniqueness and may be rated very good.

2. Demand supply relationship

If demand is greater than supply, unique or not a good rating can be give

3. Rate of technological change

Areas where rapid changes in technology are likely to occur are risky and deserve poor rating. Such products become obselete faster

4. export possibilities

those products that enjoy international demand & can be exported easily demand a good rating.

Marketability

1. ease of distribution

A good rating would be given to a product, which can be transported from point of manufacture to a point of sale easily, quickly & with minimum breakage or transmission loss.

2. after sales service

products that have to be provided with after sales service, specially at customers location are rated poorly.

3. average order size / per customer

greater the average order size per customer better would be the rating. It would be relatively easier & more beneficial to cater to customer to buy large volumes.

4. freedom from numerous variations

products that have to be made available in a wide range of grade, size, shape etc. resulting avg. manuf. Economy and inventory control problem & would be rated poorly.

5. freedom from seasonal fluctuations

products for which demand falls in off season are rated poorly. Alternative products will have to be thought of to sustain profit during such lean periods

 

Company position factors

1. time required to get established

projects having higher gestation period are more risky for entrepreneurs as he exposes himself to a greater risk of changes in technology, competition & economic conditions.

 

2. Degree of value addition

Greater the value addition better the rating, hence it is better to carry out the entire manufacturing process yourself rather than sub-contracting.

 

3. availability of raw material

if crucial raw material and other materials are available during varying conditions than a good rating can be assigned

 

3. general labour atmosphere

the project should be located in a area enjoying a good labour climate.

 

 

Production Factors

1. procurement of equipment

will it be possible to get machinery & equipment easily & quickly ? are the supplies reliable & convientantly located? If your answer is yes, rating is good

 

2. utilities / facilities required

Some projects are highly dependent on clean water, steam, electricity and good sewage system & if these are not available regularly then that project would be rated poorly.

 

3.training of personnel

are technical people easily available ? if yes, can they be quickly into the company ? Is the training likely to be time consuming.

 

4. freedom from difficult maintainance problem

Does a project involve a manufacturing process, which is hazardous, which could affect the well being of the work place but also the community at large. A poor rating follows.

 

5 freedom from costly waste – disposal problem

both govt. & society are becoming more conscious of pollution and its dangers. If your project calls for a larger waste disposal system to neutralise the effluents than it will be a negative factor.

 

 

Conclusion – the list of factors is by no mean exhaustive and can be modified to suit specific products. A comparision of product profile would help us to decide which product to pick up.

What are prominent institutes imparting training for entrepreneurship development. Explain their activities and method adopted

There are several organisation engaged in conducting entrepreneurship development program in India. The lead in the matter was given by the small Industrial Development Organisation through its service centres. Other organisations that have been actively conducting entrepreneurship development progammes are State Bank of India; financial institutes such as IDBI entrepreneurial motivation training centre in northern-eastern region, Xavier Institute of social services, Ranchi: industrial consultancy organizations in various states, centre for enterperneurship development, Ahmedabad state financial corporations, centre of entrepreneurship development, Hubli small industries extension training institute, Hyderabad, National science& technology enterpreneurship development Board etc.

 

The need for a national org. to serve as an apex body to coordinate training program for various centre’s and organisation in the country, to train trainers & motivators in entrepreneurship development, to prepare a model syllabis training for varoius target group & target areas etc. was felt, with  a view to evolve & integrated national approach to this subject

The training program is designed to sub serve  the  following objectives:

1. To impart basic knowledge about the industry, product & production methods
2. To build the necessary skill for new entrepreneurs & workers
3. To assist the entrepreneur/ worker to function more effectively in his present position by exposing him to a least concept, technique & info.
4. To build up second line of workers & prepare them to shoulder additional responsibilities and/or switch on to the production of new products, if the is any diversification.
5. To expose the entrepreneur to latest the developments which directly or indirectly effect him.
6. To broaden the vision of entrepreneurs by providing them suitable opportunity for an inter change of experiences within and outside an industry.
7. To impart customer education
8. To impart knowledge of the mktg. Of good

Methods of Training:

1. The individual instructions : Under this method, a single individual is selected for training. This mode of training is undertaken where a complicated skill is to be thought to an individual
2. Group instructions: This mode of training is suitable for a group of individuals with a similar type of work & where general instruction are applicable to all are to be given.
3. Lecture method: Here the instructor communicates in theory the practice to be followed by the learners. Under this method, whenever there are any doubts they may be clarified on the spot.
4. Demonstration method : Where the performance of work to be shown practically by the instructor for better understanding, this method can be followed. This is more concerned with the practical then theoretical aspects.
5. Written instruction method: The medium of training is followed where a feature reference is to be made by the learners. This method is mostly followed where a standardisation production is followed.
6. Conference: conferences are frequently organised wherein experts in the field share their ideas & bring to the notice of learners new ideas & techniques to increase the production
7. Meeting: Meetings are a mode of training involving a group of people who discuss the various problems confronting them, they involve exchanging ideas & views later on coming to firm conclusion based on the various proposals & alternatives.

Comparison of Male and Female Entrepreneur

Male Entrepreneur

Comparison of Male and Female Entrepreneur

• Motivation achievement – strive to make things happen personal independence – self image as it relates to status through their role in comparison is unimportant job satisfaction arising from the desire to be in control
• Departure point Dissatisfaction with present job sideline  In college, sideline to present job, discharge or lay off , opportunity for accusation
• Sources of fundsPersonal asset & savings, bank financing, investors, loan from friends & family
• Occupational Background Experience in the line of work, recognised specialist or one who has gained a high level of achievement in the field, competent in a variety of business function
• personality Characteristics opinionated & persuasive, goal oriented, innovative & idealistic, high level of self confidence, Enthusiastic & energetic must be own boss
• Background Age when starting venture :25 to 35 father was self employed College educated – degree in business or technical areas usually Engineering First born child
• support groups friends, professional acquaintances, business associates, spouse
• Types of business started Manufacturing Or construction

 Female Entrepreneur

•  Achievement – accomplishment of a goal Independence – to do it alone
• Job frustration, interest in recognition in the area, Change in personal circumstances
• Personal assets & savings, personal loans
• Experience in the area of business, middle mgmt or administrative level experience in the field, self related occupational background
• Flexible & tolerant, goal oriented, creative & realistic, medium level of self confidence, enthusiastic & energetic,
• ability to deal with social & economic environment.
• Age when starting venture: 35 to 45 father was self employed
• College educated – degree in liberal art First born
• Close friends, spouse, family, women professional groups, trade associations
• Service related – educational service, consulting or public relations

Comparison Manager vs Entrepreneur

Managers

• primary motives promotion & other traditional corporate rewards, such as office staff & powers
• time orientation short term meeting quotas & budgets, weekly, monthly & quarterly
• Activity Delegates & supervises more than direct involvement
• Risk Careful
• Status Concerned about status symbol
• Failures & mistakes Tries to avoid mistakes & surprises
• Decisions usually agrees with those in upper mgmt. Positions
• Service serves others
• Family History Family members worked for large orgns.
• Relationship with others Hierarchy as basic relationship

Entrepreneur

• Independence, opportunity to create, & money
• Survival and achieving 5 to 10 yr growth of business
• Direct involvement
• Moderate risk taker
• No concern about status symbol
• Deals with mistakes and failures
• Follows dreams with decisions
• Serves self & customers
• Entrepreneurial small business, professional, or firm background
• Transaction & deal making as a basic relationship

 

Selection criteria for factory site location

There are certain general factors that influence the selection of the location of an enterprise. The most impt. Are :

1. Availability of raw materials- the biggest advantage of availability of RM at the location of industry is that it involves less cost in terms of transportation cost.
2. Markets: If the products are fragile and highly susceptible to spoilage & if the transportation cost constitutes a substantial portion of the total cost involved the proximity to mkt conditions assumes added impt in selecting the location of the enterprise.
3. Infrastructural facility- the easy availability of infrastructutal facilities play a deciding role in the location selection of an industry. The facilities includes transport & communication, power, water , banking etc.
4. Policy- in order to promote the balance regional development the govt. offers several incentives, concession to attract entrepreneurs to setup industries in backward areas.
5. Availability of man power
6. Local laws of regulations- certain local laws prohibit the setting up of polluting industries in particular areas similarily taxation on a higher rate may discourage some industries form setting up in an area.
7. Ecological & environment factors
8. Competition- in case of some enterprises like retail stores where the revenue of a particular site depends on the degree of competition from the other competitiors in the locality, they play a crucial role in selecting the location of the stores.