Samacheer Kalvi 12th Commerce Chapter 24 Types of Entrepreneurs Exercise Solutions

Chapter 24: Types of Entrepreneurs — Exercise Solutions

How to Use This Page

1. Begin with the Key Concepts table for a rapid revision of all entrepreneur types and their defining traits. 2. Solve the MCQs — the bold option is the correct answer; try answering before checking. 3. Fill in the Blanks and True/False sections check your recall of classifications, examples, and definitions. 4. Match the Following reinforces one-to-one associations between types, scholars, and examples. 5. Brief (2-mark) and Detailed (5-mark) answers follow the board exam pattern — use the sub-points to structure your own answers. 6. Common Mistakes flags the most frequent exam errors; review these before the exam. 7. Exam Checklist is your final revision sheet — tick off each item as you gain confidence.

Key Concepts (Quick Recap)

I. Choose the Best Answer (MCQs)

Textbook MCQs

Q1. Type of entrepreneur NOT based on function

• a) Innovative   b) Imitative   c) Fabian   d) Business

Q2. Type of entrepreneur NOT based on motivation

• a) Pure   b) Induced   c) Spontaneous   d) Motivated

Q3. Business Entrepreneur undertakes which activity?

• a) Production   b) Marketing   c) Operation   d) All of the above

Q4. Odd one out for Trading Entrepreneur

• a) Buying   b) Selling   c) Distribution   d) Manufacturing

Q5. Corporate Entrepreneur is also called

• a) Intrapreneur   b) Solo Entrepreneur   c) Manager   d) Drone

Q6. Poultry, Flowers, Fruits are allied products of which type of entrepreneur?

• a) Business   b) Trading   c) Industrial   d) Agricultural

Q7. Which of the following is NOT a supply service?

• a) Banking   b) Insurance   c) Transport   d) Livestock

Q8. Motive of Pure Entrepreneur

• a) Social service   b) Profit   c) Status   d) Both b and c

Q9. Based on Technology, which type of entrepreneur?

• a) Technical   b) Non-Technical   c) Corporate   d) Professional

Q10. Which is NOT a characteristic of Fabian Entrepreneur?

• a) Conservative   b) Skeptical   c) Risk-averse   d) Adaptive

Additional MCQs

Q11. Odd one out from Technology-based classification

• a) Technical   b) Non-Technical   c) Professional   d) Classical

Q12. Odd one out from Ownership-based classification

• a) Private   b) State   c) Joint   d) Modern

Q13. Poultry, Fishery, etc. are related to which type of entrepreneur?

• a) Business   b) Trading   c) Industrial   d) Agriculture

Q14. Entrepreneurs classified by type of business

• a) (i) and (iii)   b) (i) and (iv) — Industrial and Business   c) (ii) and (iv)   d) (iii) and (iv)

Q15. A promoter is called

• a) Technical entrepreneur   b) Corporate entrepreneur   c) Agricultural entrepreneur   d) Solo entrepreneur

Q16. Solo entrepreneur is also called

• a) Corporate   b) State   c) Business   d) Industrial

Q17. Hoteliers, Airlines, etc. are examples of which type of entrepreneur?

• a) Service   b) Trading   c) Industrial   d) Agricultural

Q18. Correctly matched

• a) Technical — Craftsman   b) State — Private individuals   c) Joint — Family business   d) Retail Entrepreneur — Started by the Government

II. Fill in the Blanks

1. Clarence Danhof classified entrepreneurs into four types: Innovative, Imitative, Fabian, and Drone. 2. A Drone entrepreneur never adapts to change and refuses innovation even when proven beneficial. 3. A Corporate Entrepreneur is also called a Promoter. 4. A Classical entrepreneur starts a venture as a family business and runs it for a lifetime; also called a Life Timer. 5. Pure entrepreneurs are motivated by psychological and economical motives (profit and status). 6. Induced entrepreneurs are motivated by Government incentives, subsidies, and support programmes. 7. An entrepreneur who provides services like Banking, Insurance, Transport, and Hotels is a Service entrepreneur. 8. Poultry, fishery, flowers, and fruits are allied products of an Agricultural entrepreneur. 9. A First Generation entrepreneur starts a venture by knowledge and skills without any family business background. 10. BHEL, RBI, and Indian Railways are examples of State entrepreneurship.

III. True or False (with corrections)

1. True. Innovative entrepreneurs are pioneers who introduce new products, brands, and technology. 2. False. Fabian and Drone entrepreneurs are the same. — Correction: Fabian entrepreneurs adapt as a last resort; Drone entrepreneurs never adapt. They are fundamentally different. 3. True. A Corporate Entrepreneur is also called a Promoter because he promotes a company and takes steps to incorporate it. 4. False. Poultry and fishery are allied products of Service entrepreneurs. — Correction: Poultry and fishery are allied products of Agricultural entrepreneurs, not Service entrepreneurs. 5. True. Spontaneous entrepreneurs are driven by a natural inner urge and are bold and optimistic. 6. False. Business entrepreneurs only buy and sell goods. — Correction: Business entrepreneurs undertake production, marketing, and operations. It is Trading entrepreneurs who only buy and sell. 7. True. A Classical entrepreneur is also called a Life Timer because he runs the family business for a lifetime. 8. False. Technical entrepreneurs focus on marketing and distribution. — Correction: Technical entrepreneurs focus on production quality and techniques; it is Non-Technical entrepreneurs who focus on marketing and distribution.

IV. Match the Following

Match Q1.

Match Q2.

Match Q3. — Business Types and Examples

V. Assertion and Reason

Assertion (A): Spontaneous entrepreneurs have a natural inclination towards entrepreneurship. Reason (R): The inner urge drives them to take up entrepreneurial activities. Answer: Both A and R are true, and R correctly explains A.

VI. Answer Briefly (2-mark questions)

Q1. What is the other name of Business Entrepreneur? Organiser or Proprietor.

Q2. What is the other name of Corporate Entrepreneur? PROMOTER.

Q3. Who are Agricultural entrepreneurs? Entrepreneurs who raise farm products and market them. They use land, labour, fertiliser, and seeds to produce crops and allied products.

Q4. What are the types of entrepreneurs based on ownership? 1. Private: Owned by individuals for profit 2. State: Owned by the Government 3. Joint: Owned by individuals and Government together 4. Classical: Family business, run as life-time enterprise

Q5. Give examples of pure entrepreneurs. Dhirubhai Ambani, Jamshedji Tata, T.V. Sundaram Iyengar, Birla, N.R. Narayana Murthy, Azim Premji.

Q6. Who is a Service entrepreneur? An entrepreneur who provides services such as Banking, Insurance, Transport, Hotels, and Airlines.

Q7. Who is a First Generation Entrepreneur? An entrepreneur who starts a venture by knowledge and skills without any family business background.

Q8. Who is a Modern Entrepreneur? An entrepreneur who keenly observes market dynamics and identifies unfilled gaps in the market.

Q9. Who is a Classical Entrepreneur? An entrepreneur who starts a venture as a family business and runs it for a lifetime. Also called Life Timers.

Q10. Distinguish between Private and State Entrepreneurship.

VII. Answer in Detail (5-mark questions)

Q1. Explain the classification of entrepreneurs by type of business. 1. Business Entrepreneur: Also called organiser or proprietor. He undertakes production, marketing, and operation of a business. Example: A person running a retail shop. 2. Trading Entrepreneur: Undertakes buying and selling of goods. Does not manufacture. Activities include buying, selling, and distribution. Example: Wholesalers, retailers. 3. Industrial Entrepreneur: Starts an industrial venture. Focuses on manufacturing goods. Sets up factories and production units. Example: Tata Steel, Reliance Industries. 4. Corporate Entrepreneur: Also called promoter. He promotes a company and takes the necessary steps to incorporate it. He arranges capital, obtains licences, and sets up the organisation. 5. Agricultural Entrepreneur: Raises farm products and allied products. Uses land, labour, fertiliser, and seeds. Allied activities include poultry, fishery, flowers, and fruits.

Q2. Explain the functional types of entrepreneurs (Clarence Danhof). 1. Innovative Entrepreneur: Introduces new products, new brands, and new technology. He is a pioneer and a leader. Example: Steve Jobs (Apple). 2. Imitative Entrepreneur: Imitates existing technology and innovations. He redesigns and re-engineers products for local conditions. Example: Manufacturers of generic medicines. 3. Fabian Entrepreneur: Conservative, skeptical, and risk-averse. Adopts new methods only as a last resort. He waits for others to prove the viability first. 4. Drone Entrepreneur: Never adapts to change. He refuses to adopt new methods even when they are proven beneficial. He prefers to suffer losses rather than change.

Q3. Explain the classification of entrepreneurs by Technology. 1. Technical Entrepreneur: A craftsman by training — such as a welder, fitter, carpenter, or photographer. He focuses on production quality and uses his technical skills to create products. 2. Non-Technical Entrepreneur: Does not possess technical skills. He focuses on marketing, promotion, and distribution rather than production. Example: A person running a trading business. 3. Professional Entrepreneur: Has rich expertise in starting ventures. He initiates, develops, and sells businesses, then starts new ones. Example: Mr. Srini Raju.

Q4. Explain the classification of entrepreneurs by Motivation. 1. Pure Entrepreneur: Motivated by psychological and economical motives — profit and status. He takes risk for personal gain. Examples: Dhirubhai Ambani, Jamshedji Tata. 2. Induced Entrepreneur: Motivated by Government incentives, subsidies, and support programmes. He would not have started the venture without external encouragement. 3. Motivated Entrepreneur: Motivated by the desire for self-fulfilment, achievement, and recognition. He starts ventures to prove his capabilities. 4. Spontaneous Entrepreneur: Has a natural inclination towards entrepreneurship. An inner urge drives him. He is bold, optimistic, and meets challenges head-on.

Q5. Distinguish between Rural and Urban Entrepreneur.

Q6. Explain the various types of entrepreneurs — an overview. Entrepreneurs can be classified on multiple bases:

• By type of business: Business, Trading, Industrial, Corporate, Agricultural
• By function (Clarence Danhof): Innovative, Imitative, Fabian, Drone
• By technology: Technical, Non-Technical, Professional
• By motivation: Pure, Induced, Motivated, Spontaneous
• By ownership: Private, State, Joint, Classical
• By generation: First Generation, Modern, Classical
• By area: Rural, Urban
• By gender: Women Entrepreneur, Men Entrepreneur

Each type has distinct characteristics, motivations, and roles in the economy.

Common Mistakes to Avoid

• Fabian vs Drone: Fabian entrepreneurs are cautious and adapt as a last resort; Drone entrepreneurs NEVER adapt. This distinction is crucial for exams.
• Corporate Entrepreneur = Promoter: Do not confuse Corporate Entrepreneur with Intrapreneur. A Corporate Entrepreneur promotes and sets up a company.
• "Type not based on function" is Fabian: Fabian is based on attitude/behaviour, not function. Innovative, Imitative, and Drone are the functional types.
• "Type not based on motivation" is Spontaneous: Spontaneous is driven by inner urge, which is a natural inclination, not an external motivation type in the strict classification.
• Business vs Trading: A Business entrepreneur undertakes production, marketing, and operations. A Trading entrepreneur only buys and sells — no manufacturing.
• Service vs Agricultural: Poultry, fishery, flowers, and fruits are allied products of AGRICULTURAL entrepreneurs, not Service entrepreneurs.
• Classical vs First Generation: Classical entrepreneurs run family businesses for a lifetime. First Generation entrepreneurs have NO family business background — they start from scratch.
• "Adaptive" is NOT a characteristic of Fabian entrepreneurs: Fabian entrepreneurs are conservative, skeptical, and risk-averse. They adapt only as a last resort, not proactively.

Exam Checklist

• [ ] Know the 5 types by business: Business, Trading, Industrial, Corporate, Agricultural
• [ ] Know the 4 functional types by Danhof: Innovative, Imitative, Fabian, Drone — with examples
• [ ] Know the 3 types by Technology: Technical, Non-Technical, Professional
• [ ] Know the 4 types by Motivation: Pure, Induced, Motivated, Spontaneous
• [ ] Know the 4 types by Ownership: Private, State, Joint, Classical
• [ ] Can distinguish Rural vs Urban entrepreneur (5-row table)
• [ ] Can explain Agricultural entrepreneur with allied products (poultry, fishery, flowers, fruits)
• [ ] Remember: Corporate Entrepreneur = Promoter; Classical = Life Timer
• [ ] Can give at least 4 examples of Pure Entrepreneurs
• [ ] Know the key difference: Fabian adapts as last resort; Drone NEVER adapts
• [ ] Can list all 8 bases of classification of entrepreneurs
• [ ] Can identify correct examples for each type (e.g., Tata Steel = Industrial, BHEL = State)
• [ ] Can explain the 3 types by Technology: Technical (craftsman), Non-Technical (marketing focus), Professional (serial starter)
• [ ] Can explain the 4 types by Motivation with one example each: Pure (Ambani), Induced (govt schemes), Motivated (self-fulfilment), Spontaneous (inner urge)
• [ ] Know that "Solo Entrepreneur" is also called "Business Entrepreneur" — do not confuse with Corporate Entrepreneur
• [ ] Can explain the difference between Private, State, and Joint entrepreneurship with examples
• [ ] Can distinguish Technical vs Non-Technical entrepreneur (craftsman focus vs marketing focus)