Chapter 23: Elements of Entrepreneurship — Exercise Solutions
How to Use This Page
1. Start with the Key Concepts table to quickly revise all essential definitions and terms. 2. Attempt the MCQs — bold options mark the correct answer; try solving before looking. 3. Fill in the Blanks and True/False sections test your recall of classifications, definitions, and schemes. 4. Match the Following strengthens term-to-scholar and term-to-category associations. 5. Brief (2-mark) and Detailed (5-mark) answers follow the board exam format — use the sub-points as a template for your own answers. 6. Common Mistakes highlights traps that cost marks; read these carefully. 7. Exam Checklist is your final revision sheet — tick off items as you master them.
Key Concepts (Quick Recap)
| Term | Definition |
|---|---|
| Entrepreneur | A person who undertakes the risk of starting a new business, organises factors of production, and manages the enterprise |
| Intrapreneur | A person who thinks and acts like an entrepreneur within an organisation, assigned projects without personal risk |
| Risk Bearer (Cantillon) | Classification where the entrepreneur bears the risk of uncertainty — buys at known price, sells at unknown price |
| Organiser (Jean Baptize) | Classification where the entrepreneur organises factors of production and coordinates all activities |
| Innovator (Schumpeter) | Classification where the entrepreneur introduces new products, methods, markets, and sources of raw materials |
| Managerial Functions | Planning, Organising, Directing, Controlling, and Co-ordination — administrative in nature |
| Commercial Functions | Manufacturing, Accounting, Marketing, HRM, and Financing — business operations in nature |
| Promotional Functions | Discovery of Idea, Determining objectives, Investigation, Choice of form, Formalities, Business Plan, Mobilisation, Procurement |
| Woman Entrepreneur | A woman who innovates, imitates, or adopts a business activity |
| DWCRA | Development of Women and Children in Rural Areas — a government programme for women entrepreneurs |
| WIT | Women in Trade — an association supporting women entrepreneurs |
| WEAT | Women Entrepreneurs Association of Tamil Nadu |
| SEWA | Self Employed Women's Association |
| Stand-Up India | A government scheme to facilitate bank loans for SC/ST and women entrepreneurs |
| Magalir Udavi | A Tamil Nadu government scheme supporting women entrepreneurs |
I. Choose the Best Answer (MCQs)
Textbook MCQs
Q1. Which of the following is a factor of production?
- a) Land b) Labour c) Entrepreneurship d) All of the above
Q2. Entrepreneur is NOT classified as
- a) Employer b) Employee c) Employee d) Organiser
Q3. Characteristics of an entrepreneur include
- a) Spirit of enterprise b) Flexibility c) Self Confidence d) All of the above
Q4. Which is NOT a managerial function?
- a) Planning b) Directing c) Organizing d) Controlling
Q5. Which is a commercial function?
- a) Accounting b) Planning c) Directing d) Controlling
Additional MCQs
Q6. Richard Cantillon classified entrepreneur as
- a) Risk Bearer b) Innovator c) Organiser d) None
Q7. Jean Baptize classified entrepreneur as
- a) Risk Bearer b) Innovator c) Organiser d) None
Q8. J.A. Schumpeter classified entrepreneur as
- a) Risk Bearer b) Innovator c) Organiser d) None
Q9. An entrepreneur who works within an organisation is called
- a) Intrapreneur b) Manager c) Promoter d) Drone
Q10. Odd one out: Planning, Organising, Directing, Marketing
- a) Planning b) Organising c) Directing d) Marketing (commercial, not managerial)
Q11. Odd one out: Accounting, Finance, HRM, Controlling
- a) Accounting b) Finance c) HRM d) Controlling (managerial, not commercial)
Q12. Incorrectly matched: CWEI
- a) CWEI expansion incorrect b) Correct c) Partially correct d) None
Q13. Incorrectly matched: WIT
- a) Correct b) WIT expansion incorrect c) Partially correct d) None
Q14. Choose the correct statements
- a) (i) only b) (ii) only c) (iii) only d) (i) and (ii) correct; (iii) not correct
II. Fill in the Blanks
1. Richard Cantillon classified the entrepreneur as a Risk Bearer. 2. Jean Baptize classified the entrepreneur as an Organiser. 3. J.A. Schumpeter classified the entrepreneur as an Innovator. 4. An entrepreneur who thinks and acts like an entrepreneur within an organisation is called an Intrapreneur. 5. Planning, Organising, Directing, Controlling, and Co-ordination are managerial functions. 6. Manufacturing, Accounting, and Marketing are commercial functions. 7. Stand-Up India is a government scheme that facilitates bank loans for SC/ST and women entrepreneurs. 8. Magalir Udavi is a Tamil Nadu government scheme supporting women entrepreneurs. 9. DWCRA stands for Development of Women and Children in Rural Areas. 10. SEWA stands for Self Employed Women's Association.
III. True or False (with corrections)
1. True. Entrepreneurship is one of the four factors of production along with Land, Labour, and Capital. 2. False. Marketing is a managerial function. — Correction: Marketing is a commercial function; managerial functions are Planning, Organising, Directing, Controlling, and Co-ordination. 3. True. An intrapreneur does not bear personal risk; the organisation bears the risk. 4. False. Risk Bearer classification was given by Schumpeter. — Correction: Risk Bearer classification was given by Richard Cantillon; Innovator was given by Schumpeter. 5. True. DWCRA stands for Development of Women and Children in Rural Areas. 6. False. An entrepreneur and a manager are the same. — Correction: An entrepreneur is the owner with profit motive and bears risk; a manager is an employee with a service motive and earns a fixed salary. 7. True. Discovery of Idea is the first promotional function of an entrepreneur. 8. False. Controlling is a commercial function. — Correction: Controlling is a managerial function; commercial functions include Manufacturing, Accounting, Marketing, HRM, and Financing.
IV. Match the Following
Match Q1.
| Column A | Column B |
|---|---|
| Innovator | 2. J.A. Schumpeter |
| Organiser | 3. Jean Baptize |
| Risk Bearer | 4. Richard Cantillon |
| Women Entrepreneur | 1. Magalir Udavi Scheme |
Match Q2.
| Column A | Column B |
|---|---|
| Planning | 4. Managerial |
| Marketing | 3. Commercial |
| Procurement | 2. Promotional |
| DWCRA | 1. Women and Children Development |
Match Q3. — Functions and Categories
| Column A | Column B |
|---|---|
| Directing | 5. Managerial function |
| Accounting | 4. Commercial function |
| Mobilisation | 3. Promotional function |
| SEWA | 2. Women entrepreneurs association |
| Stand-Up India | 1. Government scheme for SC/ST and women |
V. Assertion and Reason
Assertion (A): An entrepreneur should be bold enough to encounter risk. Reason (R): Entrepreneur has to take calculated risk. Answer: Both A and R are true, and R correctly explains A.
VI. Answer Briefly (2-mark questions)
Q1. State any two features of an entrepreneur. 1. Spirit of Enterprise 2. Self Confidence
Q2. List the managerial functions of an entrepreneur. Planning, Directing, Organising, Controlling, Co-ordination.
Q3. List the promotional functions of an entrepreneur. Discovery of Idea, Determining objectives, Investigation, Choice of form, Formalities, Business Plan, Mobilisation, Procurement.
Q4. Who is an intrapreneur? An intrapreneur thinks and acts like an entrepreneur within an organisation. He is assigned projects and does not bear personal risk. He uses the organisation's resources and innovates from within.
Q5. What are the challenges faced by women entrepreneurs? Finance, Education, Network, Competition, Information.
Q6. How is an entrepreneur classified? 1. Risk Bearer — Richard Cantillon 2. Organiser — Jean Baptize 3. Innovator — J.A. Schumpeter
Q7. Define Woman Entrepreneur (Schumpeter). A woman entrepreneur is one who innovates, imitates, or adopts a business activity. She may run a manufacturing unit, service enterprise, or trading business.
Q8. State the importance of entrepreneurship. 1. Balanced Regional Development: Entrepreneurs set up industries in backward areas, reducing regional imbalance. 2. Reduce Economic Power Concentration: Entrepreneurship distributes economic power among many, preventing monopoly. 3. Innovation: Entrepreneurs introduce new products and methods, driving progress. 4. Contribution to GDP: Entrepreneurship increases national income and GDP. 5. Export Promotion: Entrepreneurs produce goods for export, earning foreign exchange.
Q9. Distinguish between Entrepreneur and Intrapreneur.
| Point | Entrepreneur | Intrapreneur |
|---|---|---|
| Dependency | Independent | Depends on the organisation |
| Fund Mobilisation | Raises own funds | Uses company resources |
| Operation | Operates from outside | Operates within the organisation |
| Rewards | Gets profit | Gets salary and recognition |
| Thinking | Creates new venture | Innovates within existing venture |
| Status | Owner | Employee |
VII. Answer in Detail (5-mark questions)
Q1. Define Entrepreneur (A.H. Cole). According to A.H. Cole, an entrepreneur is a person who undertakes the risk of starting a new business venture, organises the factors of production, and manages the enterprise. He is the one who:
- Initiates the business idea
- Arranges capital and resources
- Bears the risk of uncertainty
- Coordinates all factors of production
- Aims to earn profit
Q2. Distinguish between Entrepreneur and Manager.
| Point | Entrepreneur | Manager |
|---|---|---|
| Motive | Profit motive | Service motive |
| Rewards | Profit (uncertain) | Salary (fixed) |
| Status | Owner | Employee |
| Risk | Bears all risk | No risk |
| Innovation | Introduces innovations | Executes given plans |
| Decision-making | Takes all major decisions | Follows decisions of the entrepreneur |
Q3. What are the commercial functions of an entrepreneur? 1. Manufacturing — converting raw materials into finished goods 2. Accounting — maintaining financial records 3. Marketing — selling and distributing products
Q4. List the promotional functions with brief explanation. 1. Discovery of Idea — identifying a business opportunity 2. Determining objectives — setting goals for the venture 3. Investigation — analysing feasibility of the idea 4. Choice of form — selecting sole proprietorship, partnership, or company 5. Formalities — completing legal requirements 6. Business Plan — preparing a detailed plan of operations 7. Mobilisation — raising funds and resources 8. Procurement — acquiring machinery, materials, and manpower
Q5. What are the business-based opportunities for women? 1. Manufacturing: Garments, Pickles, Papad, Agarbathi 2. Service: Catering, Computer Centres, Beauty Parlours, Crches 3. Trading: Grocery, Hostel, Stationery, Fancy Stores 4. Highly Educated: Hospitals, Diagnostic Centres, Consultancy
Q6. What are the non-financial supports for women entrepreneurs? 1. Legal barriers removed 2. Product design assistance 3. Lower interest rates on loans 4. Commercial linkages 5. Simplified processing 6. Advisory services
Q7. Name the associations that support women entrepreneurs. WIT (Women in Trade), WEAT (Women Entrepreneurs Association of Tamil Nadu), WEPA (Women Entrepreneurs Promotion Association), SHG (Self Help Groups), SIDO (Small Industries Development Organisation), SEWA (Self Employed Women's Association).
Q8. List the government opportunities for women entrepreneurs. Standup India, Mahila E-haat, Magalir Udavi, Udyogini, Mahila Coir Yojana.
Q9. Name the institutional opportunities for women entrepreneurs. NSIC (National Small Industries Corporation), STEP (Support to Training and Employment Programme), SISI (Small Industries Service Institute), DIC (District Industries Centre), DWCRA (Development of Women and Children in Rural Areas), SFC (State Financial Corporation).
Common Mistakes to Avoid
- Confusing managerial and commercial functions: Planning, Organising, Directing, and Controlling are managerial functions. Accounting, Marketing, Manufacturing, HRM, and Financing are commercial functions. Do not mix them.
- Organizing vs Organising: The textbook uses "Organising" as a managerial function, not "Organizing" (which is the American spelling).
- Classification of entrepreneurs: Risk Bearer is by Cantillon, Organiser by Jean Baptize, Innovator by Schumpeter — do not mix up the names.
- Intrapreneur vs Manager: An intrapreneur innovates within an organisation; a manager merely executes. They are not the same.
- DWCRA expansion: DWCRA stands for Development of Women and Children in Rural Areas, not Women and Children Development as sometimes confused.
- Entrepreneur vs Intrapreneur: An entrepreneur is independent, raises own funds, and gets profit. An intrapreneur depends on the organisation, uses company resources, and gets salary.
- Promotional vs Managerial vs Commercial: Promotional functions (Discovery of Idea, etc.) are pre-startup activities. Managerial functions (Planning, etc.) are ongoing administration. Commercial functions (Manufacturing, etc.) are core business operations.
- Standup India vs Stand-Up India: The correct spelling is "Stand-Up India" — a government scheme for SC/ST and women entrepreneurs. Do not confuse with similar-sounding schemes.
- Mahila E-haat: An online platform for women entrepreneurs to sell their products; part of government opportunities for women.
Exam Checklist
- [ ] Know the three classifications: Risk Bearer (Cantillon), Organiser (Jean Baptize), Innovator (Schumpeter)
- [ ] Can list all 8 promotional functions with brief explanation
- [ ] Can distinguish Entrepreneur vs Manager (3-row table) and Entrepreneur vs Intrapreneur (6-row table)
- [ ] Can list 7 characteristics of an entrepreneur
- [ ] Know the difference between managerial functions and commercial functions
- [ ] Can name at least 5 challenges of women entrepreneurs
- [ ] Can list 5 government schemes and 6 institutional opportunities for women
- [ ] Can explain the 5 points of importance of entrepreneurship
- [ ] Can define intrapreneur and distinguish from entrepreneur
- [ ] Know the full forms: DWCRA, SEWA, WIT, WEAT, NSIC, STEP, SISI, DIC, SFC
- [ ] Can list the 5 commercial functions: Manufacturing, Accounting, Marketing, HRM, Financing
- [ ] Can explain the 5 managerial functions: Planning, Organising, Directing, Controlling, Co-ordination
- [ ] Can explain the importance of entrepreneurship (5 points: Balanced Regional Development, Reduce Economic Power Concentration, Innovation, GDP Contribution, Export Promotion)
- [ ] Can list at least 4 business-based opportunities for women (Manufacturing, Service, Trading, Highly Educated)