ANSWER KEYS
Subject Code: 80001
Q.1.
Q.1.
QP Code: 54782
Total Marks: 75
(A) State whether the following statements are True or False (Any Eight)
1. An entrepreneur is a risk bearer.
2. Risk assessment is the process of determining the likelihood that a specified negative
event will occur.
3. Feedback from consumer is a group method of generating new ideas for
entrepreneurs.
4. Innovation is the only specific instrument of entrepreneurship.
5. Company is the complex form of organization.
6. Merger is the extended version of licensing.
7. Entrepreneurship is for profit making only.
8. Entrepreneur has no role in development of economy.
9. Women entrepreneurship has more challenges in India.
10. Idea generation is the first method of project appraisal.
(B)
1
Answer
2
Answer
3
Answer
4
Answer
5
Answer
6
Answer
7
Answer
8
Answer
9
Answer
10
Answer
Choose the Correct answer: (Any Seven)
Which one of the following actions by an entrepreneur is most likely to contribute to
creative destruction?
A) Development of a new product
Innovative entrepreneurs face special issues in raising:
D) Seed capital
Which of the following is NOT recognized as a misconception about
entrepreneurship?
D) Entrepreneurial ventures and small businesses are different.
The creation of new firms is important because these new firms contribute to
economic development through benefits that include all of the following EXCEPT:
C) Unemployment
Which of the following is not a main project objective?
B) Structure
EDP stands for
B) Entrepreneurship Development
The definition of entrepreneurship holds the promise of….
c) Growth, unlimited expansion and long-term financial gain
Which ONE of the following is not a creativity barrier?
c) Full financial support
Which of the following techniques is an excellent method for initially screening ideas
and concepts in addition to generating new ideas?
a. Focus group
Entrepreneurs are:
1. High risk takers
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True
True
False
False
False
False
False
False
True
True
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Q.2.
(a)
Answer
(b)
Answer
Define entrepreneur. Explain the qualities of an entrepreneur.
According to J.B. Say, “An Entrepreneur is the economic agent who unites all
means of production; land of one, the labour of another and the capital of yet
another and thus produces a product. By selling the product in the market the pays
rent of land, wages to labour, interest on capital and what remains is his profit". Thus
an Entrepreneur is an organizer who combines various factors of production to
produce a socially viable product.
( Meaning and definition for 3 Marks and qualities for 12 marks can be given)
Qualities:
(i) High need for achievement
(ii) Acquisitiveness
(iii) Self-confidence and autonomous personality
(iv) Non-dogmatic and non-conformist personality
(v) Aggressiveness and risk-bearing capability
(vi) Rationality and pragmatism
(vii) Creative and technical mind
(viii) Adaptability
(ix) Managerial skill and leadership qualities
(x) Administrative ability
(xi) Sound decision-making ability
(xii) High personal efficacy
(xiii) High commitment to the task
OR
Give a brief classification of different types of entrepreneurs.
1. Entrepreneurs according to the type of business
a. Business entrepreneur: Business entrepreneurs are individuals who conceive
an idea for a new product or service and then create a business to materialize
their idea into reality. Trading Entrepreneur: The trading entrepreneur is one
who undertakes trading activities and is not concerned with the
manufacturing work
b. Industrial Entrepreneurs: Industrial entrepreneur is essentially a
manufacturer who identifies the potential needs of customers and tailors a
product or service to meet the marketing needs.
c. Corporate Entrepreneur: Corporate entrepreneur is a person who
demonstrates his innovative skill in organizing and managing corporate
undertaking.
d. Agricultural Entrepreneur: Agricultural entrepreneur are those entrepreneurs
who undertake agricultural activities as raising and marketing of crops,
fertilizers and other inputs of agriculture.
2. Entrepreneurs in technology
a. Technical entrepreneur: A technical entrepreneur also called as technopreneur is essentially compared to a crafts man dealing with technology.
b. Non technical entrepreneur: These are people who are not concerned with
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Q.3.
(a)
Answer
the technical aspects of the product in which they deal.
c. Professional entrepreneurs: Professional entrepreneurs are a person who is
interested in establishing a business but does not have interest in managing
or operating it once it is established.
3. Entrepreneurs and motivation
a. Pure entrepreneur: A pure entrepreneur is an individual who is motivated by
psychological and economic rewards.
b. Induced Entrepreneur: He is the person who is induced to take up an
entrepreneurial task due to the policy measures of the government that
provides assistance, incentives, concessions, and necessary overhead facilities
to start the venture
c. Motivated entrepreneur: New entrepreneurs are motivated by the desire for
fulfilment.
d. Spontaneous Entrepreneur: These entrepreneurs start their business because
of their natural talents.
4. Growth and Entrepreneurs
a. Growth Entrepreneur: Growth entrepreneurs are those who necessarily take
up high growth industry which has substantial growth prospects.
b. Super Growth Entrepreneurs: Super growth entrepreneurs are those who
have shown enormous growth of performance in their venture. The growth
performance is identified by the liquidity of funds, profitability and gearing.
5. Entrepreneurs and stages of Development:
a. First-generation entrepreneur: A first generation entrepreneur is one who
starts an industrial unit by innovative skills.
b. Modern entrepreneur: A modern entrepreneur is one who undertakes those
ventures which go well along with the changing demand in the market.
c. Classical entrepreneur: A classical entrepreneur is one who is concerned with
the customers and marketing needs through the development of the self
supporting venture.
6. Others
a. Innovating Entrepreneurs: Entrepreneur in this group are generally aggressive
in experimentation who exhibit cleverness in putting attractive possibilities
into practice.
b. Imitative entrepreneurs: They imitate techniques and technology innovated
by others. They are adoptive and more flexible.
Explain SWOT analysis with respect to entrepreneurship in India.
SWOT Analysis is the most renowned tool for audit and analysis of the overall
strategic position of the business and its environment.
1. Strengths - Strengths are the qualities that enable us to accomplish the
organization’s mission.
2. Weaknesses - Weaknesses are the qualities that prevent us from
accomplishing our mission and achieving our full potential. These weaknesses
deteriorate influences on the organizational success and growth.
Opportunities - Opportunities are presented by the environment within
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(b)
Answer
Q.4.
Answer
(a)
which our organization operates.
3. Threats - Threats arise when conditions in external environment jeopardize
the reliability and profitability of the organization’s business.
(The explanations for the points with examples from Indian Context is
required- examiner can assign marks according to the examples added from
Indian context)
OR
What are the methods and sources of Idea generation for entrepreneur?
Sources of Idea Generation:
(i) Knowledge of potential customer needs,
(ii) Watching emerging trends in demands for certain products,
(iii) Scope for producing substitute product,
(iv) Going through certain professional magazines catering to specific interests like
electronics, computers, etc.,
(v) Success stories of known entrepreneurs or friends or relatives,
(vi) Making visits to trade fairs and exhibitions displaying new products and services
(vii) Meeting with the Government agencies,
(viii) Ideas given by the knowledgeable persons,
(ix) Knowledge about the Government policy, concessions and incentives, list of items
reserved for exclusive manufacture in small-scale sector,
(x) A new product introduced by the competitor, and
(xi) One’s market insights through observation.
In nutshell, a prospective entrepreneur can get ideas for establishing his/ her
enterprise from various sources. These may include consumers, existing products and
services presently on offer, distribution channels, the government officials, and
research and development.
Methods of Idea Generation:
a. Focus Groups
b. Brainstorming
c. Problem Inventory Analysis
Explain cultural and environmental issues to be considered while starting business.
Cultural factors:
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fashion trends,
lifestyle,
social media influence (blogging, etc) vs traditional media (press, tv, radio),
dominant communication technology in social groups,
participation in cultural events,
willingness to pay for tickets,
popular actors, music styles, design forms, etc.
creativity of people,
relative population of local (folk) artists vs. global imported culture,
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Environmental Issues:
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(b)
Answer
Environmental Regulations
Permit requirement
Waste Management techniques
sustainable development
water usage and disposing in water issues
Air emissions etc.
OR
Define NGO. What are the roles and responsibilities of NGO?
NGO is a non-profit organization that operates independently of any government,
typically one whose purpose is to address a social or political issue.
(definition for 3 marks)
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Roles and responsibility:
1. Education of Children
2. Development of Youth
3. Protection of animals
4. Betterment of disabled
5. Development and operation of infrastructure
6. Technical assistance and training
7. Facilitating communication
8. Providing service
9. Emancipation of women
10. Helping in distress
11. Protection of environment
12. Preventing exploitation of unorganised labour etc.
Q.5.
Answer
(a)
Define women Entrepreneurship? Why it is important for India.
Women entrepreneurs are those women who think of a business enterprise, initiate
it, organize and combine the factors of production, operate the enterprise and
undertake risks and handle economic uncertainty involved in running a business
enterprise.
(One definition will do with a brief meaning of Women entrepreneur for 2 marks)
Importance of Women Entrepreneurship in India:
a. Economic development
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b.
c.
d.
e.
f.
g.
Social Change
Narrowing gender Gap
Social Change
New opportunities are created
More employment opportunities are generated
Women gain a better understanding of managing family and business
concurrently
h. Indian women achieve a sense of self-realization and self-fulfillment
i. Women gain better ability to take risks and business decisions
j. Women become more confident, etc.
(b)
Answer
What is risk management? Explain the different types of risk faced by entrepreneur.
Risk is defines as an event having adverse impact on profitability and/or reputation
due to several distinct source of uncertainty. (Meaning for 2 marks)
Financial Risk:
(a) Credit Risk: Credit risk occurs when customers default or fail to comply with their
obligation to service debt, triggering a total or partial loss
(b) Liquidity Risk: Liquidity risk is when the bank is unable to meet a financial
commitment arising out of a variety of situations.
(c) Interest Rate Risk: Interest rate risk occurs due to movements in interest rates.
(d) Foreign Exchange Risk: Foreign Exchange or forex risk relates to likely loss due to
variations in earnings on account of indexation of revenues and changes in assets and
liabilities labelled in foreign currency.
(e) Market Risk: Market risk signifies the adverse movement in the market value of
trading portfolio during the period required to liquidate the transaction.
(f) Counter-party Risk: Counter-party risk is associated with the inability or
unwillingness of a customer or a counter-party to meet the commitments in relation
to lending/trading/hedging/settlement or any other financial transaction
(g) Regulatory and Legal Risks: Regulatory risk refers to the adverse impact of the
existing or new rules or statutes.
(h) Operational Risk: Operational risk refers to the malfunctioning of information
and/or reporting system and of internal monitoring mechanism.
(i) Environmental Risk: The environmental risk is defined as the likelihood, or
probability, of injury, disease, or death resulting from exposure to a potential
environmental hazard.
Non-Financial Risks:
(a) Business Risk: These are the risks that the bank willingly assumes to create a
competitive advantage and add value for shareholders. Business or operating risk
pertains to the product market in which the bank operates, and includes
technological innovations, marketing and product design.
(b) Strategic Risk: This results from a fundamental shift in the economy or political
environment. An example for this would be the nationalization of Indian banks.
OR
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Q.5.
Answer
1.
Answer
2.
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3.
Answer
4.
Answer
5.
Short Notes (Any three)
Acquisition- Acquisition occurs when one company, the buyer, purchases the assets
or shares of another company, the seller, paying in cash, stock or other assets of
value to the seller. Acquisition refers a corporate action in which a company buys
almost, the target company’s ownership stakes in order to assume control of the
target firm. It is often made as part of a company’s growth strategy whereby it is
more beneficial to take over an existing firm’s operations. (Examples required and
explanation)
Environmental Scanning- Environmental scanning refers to possession and utilization
of information about occasions, patterns, trends, and relationships within an
organization’s internal and external environment. It helps the managers to decide the
future path of the organization. Scanning must identify the threats and opportunities
existing in the environment. While strategy formulation, an organization must take
advantage of the opportunities and minimize the threats. A threat for one
organization may be an opportunity for another.
(A brief explanation of Internal and external environmental Scanning is required)
SHGs- A Self-Help Group (SHG) is a village-based financial intermediary usually
composed of 10-20 local women. Most self-help groups are located in India, though
SHGs can also be found in other countries, especially in South Asia and Southeast
Asia. Members make small regular savings contributions over a few months until
there is enough capital in the group to begin lending. (characteristics and
Importance of SHGs can be part of the answer)
Entrepreneurship- Entrepreneurship is the process of identifying opportunities in
the market place, arranging the resources required to pursue these opportunities
and investing the resources to exploit the opportunities for long term gains. It
involves creating wealth by bringing together resources in new ways to start and
operate an enterprise.
(Derivation of the word, explanation of the term and few examples is required)
Technological feasibility- While making project appraisal, the technical feasibility of
the project also needs to be taken into consideration. In the simplest sense, technical
feasibility implies to mean the adequacy of the proposed plant and equipment to
produce the product within the prescribed norms. As regards know-how, it denotes
the availability or otherwise of a fund of knowledge to run the proposed plants and
machinery. (Examples required and explanation)
All relevant answers can be consider
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