UNIT 2
ENTREPRENEURIAL COMPETENCIES
Entrepreneurial Competency
Competencies are a set of skills, related knowledge and attitude that helps an
individual to perform an activity. The entrepreneurial competencies can be classified
under the following categories;
1. Decision- making competency.
2. Problem solving competency.
3. Risk bearing competency.
4. Leadership competency.
5.Communication competency.
6. Competency of the entrepreneur in dealing with customers.
7. Competency of the entrepreneur in discharging social responsibility.
1. Decision making competency
Decision making is a process of thinking before doing. It is an intellectual process.
The DECIDE can be elaborated as;
D - Describe the situation
E - Explore your options
C - Cross out the negative options
I - Investigate the positive options
D - Determine best course of action
E - Evaluate what happens as a result.
An entrepreneur has to take number of decisions to run the business, Decision
making process involves the following aspects.
(a) Conceiving and identifying business ideas.
(b) Establishing an industrial concern to put those ideas into practice.
(c) Converting that industrial concern into a fast growing and profit making unit.
In the first stage, the entrepreneur has to identify a suitable business idea. After
conceiving the business idea, one has to decide where it must be started, when it must
be started, etc.
Krishnanunni.T, GVHSS Karakurissi, Palakkad
, In the second stage, the entrepreneur has to decide the size of the organization,
whether plant and machinery must be purchased or take it on lease, what must be the
form of organization, etc.
In the third stage, the entrepreneur decides how to raise funds from different sources,
what should be the proportion of funds, what sort of pricing to be followed, whether to
diversify or not, make or buy the product, etc.,
2. Problem solving competency
An entrepreneur has to face various problems while running a business unit. He
must have the ability to foresee such problems and to find out an appropriate solution
without delay.
The following points are to be borne in mind while solving a problem;
1) Identify the problem in a business unit.
2) Collect necessary information from his own experiences or from other entrepreneurial
units.
3) Define the problem properly with the available information.
4) List down alternative solutions.
5) Select the most appropriate solution from the alternatives.
6) Implementation of the selected solution and
7) Follow up.
3. Risk bearing competency of entrepreneur
Risks are inherent in all business activities. The entrepreneur has to face a number
of risks. He may not be able to sell all products due to change in fashion, change in
attitude of the customers, reduction in the purchasing power, severe competition in the
market etc. Risk can also be due to fire, accidents and natural calamities like
earthquake, flood, etc.
Management of risk - No risk means no gain. So an entrepreneur must be ready to
face risk. There is no known panacea to eliminate risk. Instead, he can divide the risk
into insurable and non insurable. For insurable risks, insurance policies can be taken. In
the case of non-insurable risks, a successful entrepreneur can try to minimise or reduce
the evil effects by taking timely and wise decisions. By taking precautionary measures
risks due to fire, theft, accidents, strikes, etc., can be minimised.
Krishnanunni.T, GVHSS Karakurissi, Palakkad
ENTREPRENEURIAL COMPETENCIES
Entrepreneurial Competency
Competencies are a set of skills, related knowledge and attitude that helps an
individual to perform an activity. The entrepreneurial competencies can be classified
under the following categories;
1. Decision- making competency.
2. Problem solving competency.
3. Risk bearing competency.
4. Leadership competency.
5.Communication competency.
6. Competency of the entrepreneur in dealing with customers.
7. Competency of the entrepreneur in discharging social responsibility.
1. Decision making competency
Decision making is a process of thinking before doing. It is an intellectual process.
The DECIDE can be elaborated as;
D - Describe the situation
E - Explore your options
C - Cross out the negative options
I - Investigate the positive options
D - Determine best course of action
E - Evaluate what happens as a result.
An entrepreneur has to take number of decisions to run the business, Decision
making process involves the following aspects.
(a) Conceiving and identifying business ideas.
(b) Establishing an industrial concern to put those ideas into practice.
(c) Converting that industrial concern into a fast growing and profit making unit.
In the first stage, the entrepreneur has to identify a suitable business idea. After
conceiving the business idea, one has to decide where it must be started, when it must
be started, etc.
Krishnanunni.T, GVHSS Karakurissi, Palakkad
, In the second stage, the entrepreneur has to decide the size of the organization,
whether plant and machinery must be purchased or take it on lease, what must be the
form of organization, etc.
In the third stage, the entrepreneur decides how to raise funds from different sources,
what should be the proportion of funds, what sort of pricing to be followed, whether to
diversify or not, make or buy the product, etc.,
2. Problem solving competency
An entrepreneur has to face various problems while running a business unit. He
must have the ability to foresee such problems and to find out an appropriate solution
without delay.
The following points are to be borne in mind while solving a problem;
1) Identify the problem in a business unit.
2) Collect necessary information from his own experiences or from other entrepreneurial
units.
3) Define the problem properly with the available information.
4) List down alternative solutions.
5) Select the most appropriate solution from the alternatives.
6) Implementation of the selected solution and
7) Follow up.
3. Risk bearing competency of entrepreneur
Risks are inherent in all business activities. The entrepreneur has to face a number
of risks. He may not be able to sell all products due to change in fashion, change in
attitude of the customers, reduction in the purchasing power, severe competition in the
market etc. Risk can also be due to fire, accidents and natural calamities like
earthquake, flood, etc.
Management of risk - No risk means no gain. So an entrepreneur must be ready to
face risk. There is no known panacea to eliminate risk. Instead, he can divide the risk
into insurable and non insurable. For insurable risks, insurance policies can be taken. In
the case of non-insurable risks, a successful entrepreneur can try to minimise or reduce
the evil effects by taking timely and wise decisions. By taking precautionary measures
risks due to fire, theft, accidents, strikes, etc., can be minimised.
Krishnanunni.T, GVHSS Karakurissi, Palakkad
