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Class 12 Business Study Chapter 13 Entrepreneurship Development
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PART – B
VERY SHORT TYPE QUESTIONS ANSWERS (1 MARK EACH)
1. Which Act of consumer protection provides safety to consumers against deficient services?
Ans: Consumer Protection act 1986.
2. Give any two points of remedies available to consumers under consumer protection Act.
Ans: (i) Removal of defects in goods or services supplied by the seller.
(ii) Replacement of goods with new goods of similar descriptions.
3. Establishing ‘Consumer Service Cell’ is the example of which consumer right ?
Ans: Right to be heard.
4. To publish a magazine under the title ‘Upbhokta Jagaran’ is the example of which consumer right ?
Ans: Right to consumer education.
5. Ahmed wants to buy an iron. As an award customer how can he be sure about the quality of Iron ?
Ans: By seeing ISI mark.
6. Which act aims at controlling production, supply and distribution of essential commodities ?
Ans: The Essential Commodities Act, 1986.
7. Which Act has replaced the Trade and Merchandise Marks Act, 1988 ?
Ans: The Trade Marks Act, 1999.
8. Which Mark, is used under the Bureau of Indian Standards Act, 1986 ?
Ans: ISI Mark
9. What is the quality certification mark meant for food products ?
10. Kabita wants to buy a gold ring. As an aware consumer how can she be sure about the quality of gold ring she is going to buy ?
B. SHORT TYPE QUESTIONS ANSWERS TYPE – I ( 3 MARKS EACH )
11. Clarify the meaning of the term “entrepreneur, entrepreneurship and enterprise.”
Ans: “Entrepreneur’ is a person who bears risks and uncertainty in business. Entrepreneurship’ is the process of setting up one’s own business as distinct from pursuing any other economic activity, be it employment or practising some profession. On the other hand, the output of the process of entrepreneurship that is the business unit is called an enterprise.
12. Why is entrepreneurship regarded as a creative activity ?
Ans: Entrepreneurship is regarded in the sense that it involves creation of value. Entrepreneurship is creative also in the sense that it involves innovation is creative also in the sense that it involves innovation introduction of new products, discovery of new markets and some of supply of inputs technological break through as well as introduction of never organisational forms for doing things better, cheaper, faster.
13. “Entrepreneurs undertake “Moderate Risk” Elaborate this statement.
Ans: It generally believed that entrepreneurs take high risk. But, practically it is not so easy to bear the high risks. But in practice for example, when a person quite a jobs to start on his own, he tries to calculate whether he would be able to earn the same level of income or not. So an observe, the risk of quitting a well entrenched and promising career seems a high risk but what the person has taken is a calculated risk. The situation is similarly to a motorcyclist in the ring of death or a trapeze artist in circus. While the spectators are in the arise of the high risk, the artists, have taken a calculated risk given their training, skills and of course, confidence and daring. It is said that the entrepreneurs thrive on circumstances where odds favouring and against success area even, that is 50: 50 situation. So, entrepreneurship undertake modulate risks.
14. How does entrepreneurship result in increasing the spectrum and scope of economic activities ?
Ans: Entrepreneurs lead the process of economic development via bringing about sectorial change. You must be aware that as the economic grow, percentage of GDP originating from agriculture decreases and that originating in industry and services sectors goes up. Entrepreneurship through their decisions to divest from the state sectors and invest in green field sectors bring about a virtual transformation of the economy from underdeveloped to on emerging and developed status.
15. Describe briefly the role of achievement motivation in entrepreneurship.
Ans: Need for achievement implies a desire to accomplish something difficult. To master manipulate on organise physical objects, human beings or ideas. To do this as rapidly and as independently as possible. To over come obstacles and attain a high standard. To excel oneself. To rival and surpass others. To increase self regard by successful exercise of talent.Entrepreneurship provides the best opportunity for making the best use of talents as in employment. So, achievement motivation can play a vital role in entrepreneurship by enhancing the level of talent and skill for achievement.
C. SHORT TYPE QUESTIONS ANSWERS TYPE-II ( 4 MARKS EACH )
16. Entrepreneurs earn a profit, and Managers earn salaries elucidate the statement.
Ans: An entrepreneur is the owner of the organisation and he bears all the risk and uncertainties involved in running an organisation. Entrepreneur’s objective is to innovate and create and he acts as a change agent, the reward of the entrepreneur come in the form of capital gains, asset acquisition, cash flow, profit etc.
Whereas a manager is an employee and does not accept any risk. Manager’s objective is to supervise and create routines. He implements the entrepreneurs plans and ideas. The reward of managers come in form of salaries, pay off, promotion, bonus etc. So, from the above discussion we come to know that entrepreneurs earn profit and managers earn salaries.
17. Entrepreneurship is once for all activity but management is continuous activity. Do you agree give reasons.
Ans: Entrepreneurship is a process of creating new idea of business and industries and there by a business man is encouraged to establish a business. So, entrepreneurship is a process which helps a person called entrepreneur to do any kind of business on risk. That why entrepreneurship can be defined as a tool for starting new business or existing business. But management helps a business to perform its day-to-day activities, such as planning, organising, staffing, directing and controlling of marketing, human resource, finance sales etc.
On the ground of the above reason, i am agree with the above statement.
18. Entrepreneurs found the business managers operate it. Explain.
Ans: Entrepreneur found the business and managers operate it. We can understand this statement clearly with the help of the differences between entrepreneurship and management.
These are explained below:
(i) Entrepreneurs always focus on setting up business and manager focus or operate in running an existing business.
(ii) An entrepreneur owns the business, a manager is simply an employee that works in the entrepreneur’s business. A manager is paid to operate or run the entrepreneur’s business.
(iii) An entrepreneur is the owner of the organisation and he bears all the risks and uncertainties involved in running an organisation where as a manager is an employee and does not accept any risk.
(iv) An entrepreneur discovering new and better methods of work, products, marketing, strategies etc. whereas managers applying the innovations of the entrepreneurs.
19. Introducing new production techniques and products is not an aspect of political administration explain briefly.
Ans: Political administration is a part of government administration: On the other hand, introducing of a new production techniques is engaged in the field of science and technology. So political administration can not interfere on the innovation of production techniques or product.
But, Government can interfere on the volume of product, quality of product, marketing, price of the product etc. for the maintaining human and social welfare. To protect human rights and human lives sometimes government can restrict some technology to be adopted by manufacturer to produce hygienic goods. For example, food products, child food products, cosmetic products, etc.
20. What are entrepreneurial values and attitudes? Explain.
Ans: Attitudes is a complex cognitive process just like the personality of an individual. The personality is generally thought of as the whole person, which an attitude may make up the personality. An attitude may be called a tendency to feel and behave in a particular way towards some object. An entrepreneur is supposed to regulate and coordinate the work of employees working in an organisation. Every person has its own attitude towards work, organisation, environment, etc. The better thing will be to reconcile the thinking of various persons for achieving good results.
An entrepreneur should understand values for understanding human behaviour. Value means standards prescribed as regards any field. of activity such as business, art, culture, profession etc. values represent something which is considered good and desirable for everyone. Value is a belief of an individual in what is good or bad, right or wrong, desirable or undesirable. Values have an important influence on the attitudes, perceptions, needs and motives of people at work. Values lay the foundations for the understanding of attitude and motivation.
22. What is entrepreneurial motivation ?
Ans: Motivation is a factor which encourages persons to give their best performance and help in reaching organisational goals. It is the process which influences entrepreneurs to act and determine organisational efficiency motivation is a psychological phenomenon which generates within an individual. A person feels the lack of certain needs, to satisfy which he feels working more. The need satisfying ego motivates a person to be better than he normally does.
Motivation may be summed up as follows:
(i) Motivation is an inner feeling which energises a person to work more.
(ii) The emotions or desires of a person prompt him for doing a particular work.
(iii) There are unsatisfied needs of a person which disturb his equilibrium.
(iv) To person moves to fulfil his unsatisfied needs by conditioning his energies.
(v) There are dormant energies in a person which are activated by channelising them into action.
D. LONG TYPE QUESTIONS ANSWERS TYPE – I ( 5 MARKS EACH )
22. “Entrepreneurs are born not made.” Elucidate the statement.
Ans: The entrepreneur is essentially a business leader and the function by him is entrepreneurship. Entrepreneur is important agent of production who gets together all the factors of production. An entrepreneur is a person who initiate, organise, manage and control the affairs of a business. So, entrepreneur has been consider a person or a group who combines factors of production and produce goods or services, the success of the enterprise will depend on the ability of the entrepreneur. A traditional thinking that entrepreneurs are born and not made is no longer valid now. There are training courses which help people to learn the functions which an entrepreneur is required to undertake.
23. How need for achievement, Power, Affiliation and Autonomy drives economic and entrepreneurship development. Explain.
Ans: Need for achievement, power, affiliation and autonomy drives economic and entrepreneurship development as follows ―
(i) Need for achievement: Need for achievement implies a desire to accomplish something difficult. To master, manipulate, or organise physical objects, human beings or ideas. To do this as rapidly and as independently as possible. To overcome obstacles and attain a high standard. To excel oneself. To rival and surpass others, etc. Yes entrepreneurship provides you with the best opportunity for making the best use of your talents as in employment the 9-5 routine, pressure to adhere to rules and regulations, preferences for compliance of boss’s instructions over the use of personal creativity and in no activeness stifles your progress and self development. You can create a work environment that suits your abilities and interests. So, the urge for achievement is an important motivating factors.
(ii) Need for power: Need for power is the concern for influencing people or the behaviour of others for moving in the chosen direction and attaining the envisioned objectives. In common perception, politicians, social, religious leaders, chief executive officer etc. typify the needs for power. Such a perception seems more based on the belief that the source of power lies in the “position” a person occupies in organisational/societal context. In the same view, business ownership too may imply a need for power Entrepreneurs may also feel the need for power to further the interests of their organisations and also to increase influence in society. So, need for power acts as a motivational factor.
(iii) Need for affiliation: Often you must have heard your parents saying that whatever they do, they do it for their children. If a man thinks about interpersonal relationships, he has a concern for affiliation. It implies, among other things a tendency of the people to conform to the wishes and norms of those whom they value. Apparently, social activists, environmentalists, teacher etc. may seem as predominantly driven by these needs. Entrepreneurs are believed to be low on affiliation, as they are and expected to be innovative, trend setters, and tradition breaker. However it is not necessary that affiliation should only interfere with achievement. In certain cultures, family comprises the bedrock on which the successful careers are built. One works, as if not for personal gratification but for family. Need for affiliation acts as a strong motivation for doing things in a better way:
(iv) Need for autonomy: The need for autonomy is a desire to work independently and accountable to himself only. It is an expression of a desire to use one’s potential to the maximum. In the context of an entrepreneurship, it is generally interpreted as the determination not to work for someone else. The need for autonomy certainly motivates a person to plan his own course of activities and try to achieve that which he may not have been able to do while working under others.
24. What are the roles and functions of the entrepreneur is relation the enterprise ?
Ans: The roles of the entrepreneur in relation the enterprise :
A. Developing Exchange Relationships.
(i) Perceiving market opportunities.
(ii) Gaining command over scarce resources.
(ii) Purchasing inputs.
B. Political Administration :
(i) Dealing with public bureaucracy (approvals, taxes).
(ii) Managing human relations within the firm.
(iii) Managing customer and supplier relations.
C. Management Control:
(i) Managing finance.
(ii) Managing production.
(i) Acquiring and overseeing assembly of the factory.
(ii) Industrial engineering (minimising inputs with a given production process)
(ii) Upgrading the production process and product quality.
(iv) Introducing new production techniques and products.
The functions of entrepreneur in relation to the enterprise are:
(i) Discovery of an idea: A person or a group of persons having entrepreneurship and business acumen conceive the idea of venturing an organisation. Such ideas may relate to the formation of a new business unit, diversification of an existing unit, rationalisation of an enterprise etc.
(ii) Planning: Planning is the first step in the direction of setting up of an enterprise. The entrepreneur prepares a scheme of proposed project in a formal systematic approach. The authorities in return if satisfied fully with the requirements, grants legal sanction for the venture.
(iii) Organisation: An entrepreneur co-ordinates, compiles, assembles and supervises land, labour and capital during the initial stage and at the performance stage, for optimum utilisation of resources.
(iv) Management: An entrepreneur need to manage not only the working of the venture but also managing the day to day problems of the enterprise. It includes future expansion, growth and policies of the organisation.
(v) Risk Taker: Risk taking is an important task of an entrepreneur. He takes decision for the future or plans activities for the coming periods. He faces uncertainties and bears risk. A risk situation. involves potential gain or loss.
25. What are process of setting up a business ?
Ans: There are five stages in setting up a new venture. They are discussed below:
(i) Discovery of an idea: The first and fore most step is that the businessman should initiate an idea, discover an opportunity. The idea can be regarding introduction of a new conduct or service or exploring a new technology. He develops the idea with the help of marketing and technical experts.
(ii) Collecting Information: After initiating the idea, various information’s are collected relating to business, demand and supply conditions, sources of finance, labour and power requirements etc. A detail investigation of various factors related to business is made. On the basis of these information’s, a proper analysis is being made.
(iii) Assembling the requirements: The entrepreneur assembles various factors of production like land, labour, capital and organisation and join hands with other people for better organisation and co ordination. In case of new innovations, registration is essential.
(iv) Deciding on financing the proposal: After this, the promoter decides on the capital structure. The requirements relating to finance is first estimated then the sources raising finance is determined. Finance can be raised by issue of shares, debentures, public deposits, loans requirements for short period and long period are estimated separately.
(v) Legal formalities: The entrepreneurs will have to go through some legal formalities for making the whole process lawful. Permissions must be sought from local authority, state government, memorandum or articles. After performing the legal formalities the company can be incorporated.
26. What is the role of a entrepreneur in relation to the enterprise ?
Ans: See Answer to Question No. 24 (1st part)
27. What are the functions of entrepreneurs in relation to economic development ?
Ans: The functions of entrepreneurs in relation to economic development:
(i) Contribution to GDP: Increase in the Gross Domestic Product is the common definition of economic development. We are aware that income is generated in the process of production. So, entrepreneurs generate income via organisation of production be it agriculture, manufacturing or services.
(ii) Capital Formation: The entrepreneurial decision, in effect, is an investment decision that augments the productive capacity of the economy and hence results in capital formation. Entrepreneurs by investing their own savings and informally mobilising the savings of their friends contribute to the process of capital formation.
(iii) Generation of Employment: Every new business is a source of employment to people with different abilities, skills and qualifications. As such entrepreneurship becomes a source of livelihood to those who do neither have capital to earn interest or nor have the land to earn rent. Entrepreneur touch the lives of many directly as well as indirectly.
(iv) Generation of Business Opportunities for others: Every new enterprise or business create opportunities for the supplier of input and the marketers of output. As a pen manufacturer you would create opportunities for refill manufacturers as well as wholesalers and retailers.
(v) Improvement in Economic Efficiency: Entrepreneurs improve economic efficiency by improving processes, reducing wastes, increasing yield and bring about technical progress that is by altering labour capital ratios.
28. Clarify how motivation and abilities impact an individual’s decision to choose entrepreneurship as a career ?
Ans: Able and willing men and women are a ready source of entrepreneurship. Such persons leap up the first opportunity comes their way to be on their own. Every opportunity and successful performance of every role and function has a competence requirement. The term competence refers to a composite of knowledge skills and a host of psychosocial attributes in a person: that make his/her effectiveness for a task.
So, the individual having these opportunities and abilities can choose the entrepreneurship as career. Thereby such person can develop up to a satisfactory level. Such person can sell such quality at a higher rate or value. Such type of person should invest capital and their effort in the line of entrepreneurship for building up of a challenging career. In this connection, environmental influences economic policy and institutional framework. On the other hand, individual personality competencies, motivations, value and attitudes must be combined with the environmental factors. The following diagram shows how motivation and abilities impact on individuals decision to choose entrepreneurship as a career.
29. Describe briefly the steps involved in starting a new business.
Ans: See Answer to Question No. 25.
30. Examine the nature of relationship between Entrepreneurship and Management.
Ans :The relationship between entrepreneurship and management are explained as follows:
(i) Entrepreneurship is related to setting up a new business, while management assures efficiency and success of it.
(ii) Strategic decisions such as resource allocation, market search, expansion etc. are linked to entrepreneurship, while management helps in controlling resources, suggesting better techniques of marketing etc.
(iii) In developing countries entrepreneurs also undertake day to day activities and managers remain in touch while taking strategic decisions.
(iv) Managers are now required to display entrepreneurial abilities, while entrepreneurs should demonstrate managerial capabilities. An entrepreneur owns the business, a manager is simply an employee that work’s in the entrepreneurs business.
31. What is the basic concept of Entrepreneurship ?
Ans: Entrepreneurship refers to a process of action an entrepreneur undertakes to establish his enterprise. It is a cycle of action to further the interests of an entrepreneur. It is concerned with the development and coordination of entrepreneurial functions. The word ‘entrepreneurship’ has derived from French root which means ‘to undertake”. It owes its origin to the western society. Even in western society, it has undergone changes from time to time. In the early 16th century, the term was used to denote army leaders. In the 18th century, it was used to denote a dealer who sells goods at uncertain prices.
In the words of Joseph A. Schumpeter “entrepreneurship is a creative activity or it is an innovation function.”
32. Explain briefly Entrepreneurial values and attitudes.
Ans: See Answer to Question No. 20.
E. LONG TYPE QUESTIONS ANSWERS TYPE II ( 6/8 MARKS EACH )
33. “Entrepreneur is born not made.” Elucidate the statement.
Ans: See Answer to Question No. 22.
34. Need for achievement, power, affiliation and Autonomy are the basic factors of entrepreneurial Motivation. Explain.
Ans: See Answer to Question No. 23.
35. Describe the process of Entrepreneurship Development.
Ans: Entrepreneurial development may have the following steps or process
(i) Selection of potential entrepreneurs: The first step in entrepreneurial development programme will be to identify those persons who will be suitable to work as entrepreneurs. An effort should be made to see the family background, motivational level. educational qualification etc.
(ii) Identifications of Traits and skills: Every participant in entrepreneurial development process should have a minimum level of eligibility. The entrepreneurial traits include family background, education level, age factor, social status, influencing ability, achievement motivation etc.
(iii) Identification of enterprise: After studying the socio-personal characteristics of an entrepreneur, the next will be to identify a suitable enterprise project. The project must be suitable to the requirements of potential entrepreneur. The factor such as skill, experience, physical resources, etc. should be taken into consideration before selecting an enterprise.
(iv) Selecting contents of training programme: The participants in a training programme may have varied background. A training programme should be so planned that it is useful for and every participants.
(v) Support system: An entrepreneur needs information relating to credit, finance, marketing etc. This information will be available from the support system created for the entrepreneur. There are also a number of agencies which provide all types of help to those who want to set up new units.
(vi) Monitoring and follow up: The success of an entrepreneur development programme is linked to the monitoring and follow up of what has been taught during training. Monitoring will help in identifying the lacunae of the system and making mends for the proper results. It also provide guidelines to ensure better results.
36. Explain the role of entrepreneurs in relation to the Enterprise.
Ans: See Answer to Question No. 24. (1st part)
37. What are the functions of Entrepreneurs in relation to economic development ?
Ans: See Answer to Question No.
27. What are the characteristics of Entrepreneurship. Explain.
Ans: An entrepreneurs is highly achievement oriented, enthusiastic and energy individual, who has the following characteristics―
(i) Mental ability: An entrepreneur should be sufficiently intelligent and must have creative thinking. He should have the ability to visualizer the likely changes to take place in market, consumer attitude, government policy etc and take timely actions accordingly,
(ii) Clear objectives: Before starting any venture, he should prepare a clear objective of his/her all activities to be undertaken. Without a clear objective he/she may not achieve the goal.
(iii) Secrecy: An entrepreneur must have the ability to keep business secretes. Leakage of business secretes will be an opportunity for competitors and problems for him.
(iv) Technical knowledge: He/she should have a minimum technical knowledge in their respective field.
(v) Good organiser: Finding out various sources the resources required for standing a proposed enterprise, gather all the resources and combine those properly to get best product and profit out of those.
(vi) Communication ability: An effective and efficient communication ability solves half the our problems in life and business too. Only a good communication ability may motivate employees to communicate with customers, suppliers and creditors will be more likely to succeed than the entrepreneur who does not.
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