Chapter 3

Entrepreneurship competency Development

Entrepreneurship competency refers to the key traits, qualities, skills, knowledge and
abilities possessed by an entrepreneur to establish and operate a new venture
successfully.
An individual can develop entrepreneurial competency from two sources. The first
one is innate and another is acquired.
Innate competency is inherited in nature which involves attitude, self- image and
social role .
Acquired competency can be gained through learning which involves skills,
knowledge and experience.
According to B.Bird, “ Entrepreneurial competencies are defined as underlying
characteristics possessed by person which result in new venture creation, survival
and growth,”
According to Brophy and Kiely, “ entrepreneurial competencies are comprised of the
entrepreneur’s motives, traits, self-images, attitudes, behaviors, skills and
knowledge.”
Hence, entrepreneurial competencies are all those traits and qualities which are
highly essential for entrepreneur to start new venture, operate and get success.
Distinct Traits of Entrepreneur
The common personal characteristics or traits of successful entrepreneur are as
follows:
1. Prior experience
2. Social network
3. Creativity
4. Moderates risk bearer
5. Confidence on ability
6. High level of energy
7. Take immediate feedback
8. Future orientation
9. Skill of organizing
10. High level of commitment
1. Prior Experience
Work experience is the means that makes a person rational and practical in the
concerned area of business. It supports t the individual to know how the business
can be started and how can be operated successfully. Past experience supports the
entrepreneur t handle the difficult issues in an effective way.
2. Social network
An entrepreneur needs to make and maintain good and up to date relation with all
the stakeholders for successful operation of business. The stakeholders involve
customers, suppliers, government, financial institutions, agents, media persons,
pressure groups, trade union, competitors, employees, etc… The establishment of
social network facilitates to know the feedback of products and services offer in the
market. It will useful in developing business strategies and necessary measure to
achieve entrepreneurial objectives.
3. Creativity
Creativity is function of creating something new and doing same things differently.
To be successful entrepreneurial, creativity is highly essential trait. It is a
competency necessary for identifying opportunities in dynamic environment and
solving problems arise during entrepreneurial activities. Creativity is the basis for
innovation. And innovation is key element for entrepreneurial success.
4. Moderate Risk Bearer
Entrepreneurial risk can be financial, social, psychological and career risks. The risk
is an inevitable part of entrepreneurship. Hence, the entrepreneur should neither be
risk averter or risk seeker but he must be moderate risk bearer.
5. Confidence of ability
The entrepreneur must have belief in his own ability. He must be confidence on his
own performance and decision for the success. Poor confidence, confusion and
dilemmas can never make an individual a successful entrepreneur. For abundant
6. High level of energy
The entrepreneur should be confident, smart and highly energetic. He is naturally energetic
and want to accomplish more in short time period. He works hard and encourages the
subordinate to work hard and to use formal time for productive purpose. He provides
instruction, guidance and information to the employees for accomplished of assigned job
effectively.
7. Take immediate feedback
An Entrepreneur enjoy the challenge of running business and he likes to know how he is
running and is constantly looking for feedback. He gets continuously feedback about the
efficient performance. It supports to him to take immediate corrective measure any
entrepreneurship deficiency.
8. Future orientation
The entrepreneur must have vision and foresight for how to operate business in future. He
shows the destination and proper guidance to fulfill procedure of achieving predetermined
destination focusing procedures. He must consider the present and future scenario of
9. Skill of Organizing
Skill of organizing is the act of managing all activities systematically based on their
importance. The entrepreneur must have the skill of managing and organizing all
activities. The division of work to the employees based on their skills and efficiency
is supportive for entrepreneurs to transform their vision into reality.
10. High level of commitment
The full commitment and hard work of entrepreneurs is essential for successful
operation of a new venture. The strong and high dedication is required to be
successful entrepreneur.
Competency Mapping
Competency mapping is the process of identifying the specific skills, knowledge
and behavior required to operate and accomplish assigned job effectively.
Competency mapping is the process of identifying and defining the knowledge,
skills and personal attributes required for a particular role.
These process involve job evaluation, training, recruitment and hiring of
employees. It supports the management to know the level of capabilities and
knowledge that individual employee possesses in his area of function.
The analysis of competency mapping of an organization helps to compare the
individual strengths and weaknesses of its employees along with their leadership
qualities, creativity and innovation abilities, decision making and communication
skills.
Need/ Importance of Competency Mapping
1. Improve performance
2. Maximize Productivity
3. Systematized hiring process
4. Increase morale
5. Professional development
6. Performance appraisal
1. Improve performance
Competency mapping involves the evaluation of current performance with certain
criteria to identify the strengths and weaknesses of the employees. It facilitates in
taking decision for training and development programs. It identifies the employees’
areas of weaknesses which facilitates to improve their level of performance.
2. Maximize productivity
Competency mapping considers the job fit that means it facilitates in assigning job,
duties and responsibilities as per the knowledge, ability and expertise of the
employees. It appraises the performance of the employees based on the standard and
take corrective action if there is any deviation. It involves in conducting training
program, workshop and seminars for improving the capacity and productivity of the
employees.
3. Systematized hiring process
The main objectives of the competency mapping is to match the job requirement
with the capabilities of the employees. It clearly defines the qualifications, job
experience and training requirement along with incentives provides while recruiting
the applicants. It facilitates in developing the proper system for hiring new
employees.
4. Increase morale
Competency mapping increases the morale and dedication of employees because
they have knowledge of role assignments and expectations of management. They
can maintain interaction with managers for getting support to solve work related
problems which would be supportive to achieve common expectations.
5. Professional development
Competency mapping allows management to identify the gap between existing and
desired competency levels of employees. It helps in initiating career development
programs if any deficiency is found in level of skills of employees. It broadens career
path and career growth which will create greater opportunities for promoters along
with added roles in the organization.
6. Performance appraisals
Competency mapping emphasizes on open, fair and merit based performance
evaluation of employees and team of employees. It is appreciated by the competent
employees and is supportive to improve performance and productivity of employees.
Types of Competency Mapping
Types of Competency Mapping are as follows:

Types of competency mapping

Intellectual Motivational
Social competency Emotional competency
competency competency
1. Intellectual Competency
The intellectual competency mapping focuses on the analytical and critical thinking
skills of employees. The common elements of intellectual competencies involves
communication, creativity, analytical, planning and organizing skills. These skills are
essential for understanding the issues, problems and complexity in organizational
activities and their proper solution.
2. Motivational Competency
The common elements of motivational competencies are continuous learning,
achievement orientation, time management and determinants. The employees
having motivational competency are achievement oriented and self- determinants
and they can motivate subordinates for better performance to achieve common
goals.
3. Social Competency
Social competency includes interpersonal skills which is highly essential to maintain
good relation with employees, customers and other stakeholders. It is the means for
developing favorable working environment in the business organization so that the
entrepreneurial objectives can be achieved effectively and efficiently. It also support
to develop harmonious relation with customer which will be beneficial in getting
good feedback for improving product and service feature and qualities.
4. Emotional Competency
Emotional competency focuses on self-control of an individual that support to show
matured behavior. Emotional competency enables the individuals to manage stress
and solve the problems through patient and cool mind. It supports employees to
work for long hours, focus on job, develop optimism and maintain work-life balance.
Method of Competency Mapping
Business uses competency mapping to match the capabilities and talent of
employees with specific job tasks and organizational needs. The common method
or technique for competency mapping are as follows:
Assessment Centre

Critical Incident Technique

Methods of Competency
Mapping
Personal Interview

Questionnaire

Psychometric Tests
1. Assessment Centre
The assessment center approach involves situational observation to evaluate
performance and growth potential of the individual for related jobs. This approach uses
various types of discussion and simulation exercise to reflect real-life demand of the job.
Employees are asked to work through certain scenarios where managers or a trained
assessor observes their behavior and activities . The work situations are designed to show
the skills and aptitude of individual employees. This shows the job fit and potential
growth of the employees.
2. Critical Incidents Technique
This approach focuses on certain critical behavior of employees that impacts in their
performance. In this approach, the manager prepares list of statements of very effective
and ineffective behavior of an employee in critical situation. The manager maintains
register of each employees, he periodically records critical incidents of the workers
behavior. At the end of the rating period, such recorded critical incidents are used in the
3. Personal Interview
This approach concerned on one to one interview of an employees regarding their
job and behavior. Interviewer should be prepared with targeted questions. The
interview question must include both employees’ tangible job experience and
general motivation, disposition and attitude. The interview record can be compared
against the competency map created for the job to determine which candidate offers
the best match for the organization’s needs.
4. Questionnaires
Under this approach, the questionnaires are distributed among the employees for
gathering information about job competencies and work performance. The
questionnaire should include the work requirements and activities of employees. Job
analysis (job description, job specification, job evaluation, job performance
standard) facilitates for the development of questionnaire by providing detail
information about job characteristics and job requirement.
5. Psychometric tests
Psychometric tests examines the behavioral attributes on an individual employees.
The two major types of psychometric assessment are aptitude tests and
achievements tests. Aptitude tests helps to determine individual’s potentiality to
make detail learning in the assigned area of job. It helps to develop future
potentiality and career on individuals. Aptitude test can be sub-classify into
intelligence test, mechanical test, psychomotor test and visual test. Achievement test
measure the level of proficiency an individual has achieved in a certain area. The
practical and theoretical abilities and examined of an individual about job
independently and effectively.
Process/steps of Competency Mapping
The common processes and steps for competency mapping are as follows:
1. Identify organizational goals
2. Carry-out job analysis
3. Define competencies
4. Identify competency gap
5. Formulate an action plan
6. Manage additional resources
7. Implement action plan
1. Identify organizational goals
It is the primary step of competency mapping which includes identifying the
organizational goals they are long term, medium term and short term goals. The
identification and determination of goals is the basis for organizational smooth
functioning which defines the role and responsibilities of employees. It helps to
remove the ambiguity or uncertainty of existence and functioning of organization.
2. Carry –out Job Analysis
Job analysis provides detail information about the job to be done by the employees.
It is based on the overall goal of the organization. It describes about the nature,
types, levels, location and process of performing the job. It shows the competencies
of an employee required to perform job. It shows job relation, interdependencies, job
value and standard of job performance. The competency mapping should draw clear
and proper job structure.
3. Define competencies
The competencies of an employees are essential to perform future job to achieve
organizational objectives. The managers should clearly mention the future jobs and
activities. They should also describe the qualities and abilities of the employees to do
those jobs.
4. Identify competency gap
Competency gap is the difference between the job requirement and capabilities of an
employees. The identification of competency gap shows the strength and weaknesses of
the employees. It also shows the current competency level and potential competency
levels required to achieve high level of organizational ability.
5. Formulate an Action Plan
The action plan should be formulated based on future objectives and activities of the
organization. Based on required competency levels, action plan should be formulated for
hiring new employees, training existing employees or both. The main focus of an action
plan is to fulfill the competency levels required for effective functioning of future activities
6. Manage additional resources
After formulation of action plan to fulfill competency levels, another element of
competency mapping is to manage additional resources. Additional resources
involve management of capital, physical facilities, new technologies and so on.
Management can improve employee morale through allocating additional resources.
7. Implement Action Plan
The ultimate element of competency mapping process is to implement the action
plan in effective way. For this, the management should attract and appoint
competent employees in the concerned areas of functions. They should be provided
all required resources for effective and efficient performance. The proper guidance
and instruction should also be provided for accomplishing assigned jobs. There
should be proper performance evaluation mechanism to obtain feedback.
Characteristics and Competencies of Entrepreneurial
Leadership
Entrepreneurs are both leader and manager of business enterprise. Entrepreneurial leadership is the
ability to create new concept, ideas and knowledge to grab the business opportunity created by
changing environment of the society. The common competency and characteristics of
entrepreneurial leadership are as follows:
1. Creative and Innovative
2. Risk bearer
3. Assess opportunity
4. Self-confidence
5. Future oriented
6. Organizing skills
7. Commitment and hard work
8. Flexible attitude
9. Initiate team work
1. Creative and Innovative
Innovative and creativity are the basic quality and competency highly essential to be
successful and smart entrepreneur. The entrepreneur should generate and implement new
concept, ideas and knowledge on the basis of time and requirement.
2. Risk bearer
Risks are the uncertainties and chances of occurring losses. The entrepreneur needs to
assume moderate level of risk for enhancement of the organizational effectiveness. The
risks involves financial risk, career risk, social risk and psychological risk. He should be
able to solve organizational issues, problems and functional difficulties by taking proper
decisions.
3. Assess opportunity
The changes in external factors( political, economic, social and technological) brings
threats and opportunities to the entrepreneur. The entrepreneur should have capabilities
and knowledge to assess the opportunity, grab it and convert into business. He should
4. Self- confidence
Self-confidence is the ability to belief in own self. An entrepreneur should have belief
on his own decision. During entrepreneurial operations, there may arise different
kinds of obstacles, difficulties and complexities. He should have abilities and
knowledge to face those complexities and should identify the solutions with his
creativity. Those solutions must be implemented with full confidence.
5. Future oriented
The decisions taken by entrepreneur for the progress and success of the business
should based on future. He must have vision and foresight for how to operate
business in future. He should show the destination and provide guidelines to fulfill
procedures of achieving predetermined destination. The decisions for the present
should be taken considering its future impacts.
6. Organizing skills
Entrepreneur as a leader, he must have quality to organize the skills as per the nature and
requirement of job. He must have knowledge to appoint right person at the right job and at
the right time. The division of work to the employees based on their skills and efficiency is
supportive to transform his vision into reality.
7. Commitment and hard work
Commitment and hard work of an entrepreneur is the basis of entrepreneurial success. The
dynamic environment of business brings several threats and challenges to the
entrepreneur. But an entrepreneur must face those threats with full confidence and
committed to achieve desired objectives through hard work.
8. Flexible attitude
The entrepreneur as a leader should be dynamic and flexible with time and situation. He
can not be rigid. Entrepreneur must learn from their mistakes and should take advice,
information and guidance from others and should open for introduction of new
9. Initiate team work
As a professional manager, the entrepreneur should initiate teamwork in the
organization. He should play significant role for employment of new employees. He
should divide all the activities of the organization into different groups based on
their common nature. Necessary resources and guidance should be provided to team
members so that they can do the assigned job effectively.
10. Tolerance of Ambiguity
The successful entrepreneur tends to have a high tolerance for ambiguous. He must
have capacity to accept uncertainty that may create during business operation. He
should monitor and observe all the changing environmental factors affecting
business activities of the enterprise which will facilitate to develop new plans, polices
and strategies for effective operation of business.
Concept of Entrepreneurship Competency Development
Programs (ECDPs)
Entrepreneurship Competency Development Program is a program that refers to
develop entrepreneurial abilities among the people. It is the meant for impression,
development and polishing the entrepreneurial skills among the individuals to
establish and operate a business successfully.
ECDP consists of formal training program that supports to increase skills and
behavior needed to create, develop, manage and grow a business venture.
The main objectives of ECDP is to equip the persons with the required abilities
and knowledge which are necessary for starting and running a business
enterprieses.
Need for Entrepreneurial Competency Development
Need for ECDP are as follows:
1. Identify opportunities
2. Generate ideas
3. Develop strategies
4. High motivation
5. Leadership ability
6. Improve competencies
7. Manage risk
8. Analyze information
9. Solve problems
10. Enhance productivity
1. Identify opportunities
Entrepreneurial competency development is a means of identifying and recognizing
business opportunities. The major objectives of developing entrepreneurial
competency is to make an individual person capable of analyzing the opportunities
in dynamic environment that can gain excessive profit and business success.
2. Generate ideas
Entrepreneurial competency development is the process of developing the qualities
and traits essential for being successful entrepreneur. These competencies enables
the individual person to generate new ideas, concept, knowledge and information
that can be converted into business. These competencies supports innovation for
new product and services through changing environment that can create social
value.
3. Develop strategies
The competent entrepreneur can develop business strategies, plans, policies and
procedures necessary for long term business operation and success. The
development of entrepreneurial competency develop such capacity within an
individual person. This is supportive for sustainable development of business
activities of the organization.
4. High motivation
Competency development is the source high level of motivation of the
entrepreneurs. Competent entrepreneurs are self-motivated toward business
activities. They have the knowledge and skills about how the job should be started,
process to be completed and find-out the outcome of performance. The self-
motivated entrepreneur can motivate others for better performance.
5. Leadership ability
ECD aims to develop leadership skills and abilities to the entrepreneurs as he
represents, manages and leads the business firm. ECD develops the skill to influence
others and make them to follow in accordance to the entrepreneur for achievement
of entrepreneurial goals. The entrepreneur can provide instruction and guidance to
subordinates for better performance.
6. Improve competencies
ECDPs are the source of improving competency levels of entrepreneurs. The proper
education, training program, seminar, workshop and trade fair enhances the
competencies of the entrepreneur. It would be supportive for best utilization of
organization resources and to maximize productivity.
7. Manage risk
Risk is inevitable part of the entrepreneurship. The changing external environmental
factors creates challenges and threats to the entrepreneur. A competent and well
trained entrepreneur enable to minimize business risk properly. He can develop new
strategies and policies to adapt with changing environment of business.
8. Analyze information
ECDP develops the skills and competencies to analyze the environment and collect
require information. After collection of necessary information, they analysis based
on business requirement. It provides major inputs for taking rational decision and
smooth functioning of business activities.
9. Solve problems
Solving problems tactfully is an art and skills. It can be developed by ECDP. The
competent and smart entrepreneur can identify the problems during operation of
business and can develop creative solution for those problems.
10. Enhance productivity
Entrepreneurial competency is the means of enhancing productivity of the
organization through proper utilization of resources. The competent entrepreneur
always implement proper division of work, allocation of resources and getting
feedback. Provide training and development program as per necessity. It will create
efficiency and effectiveness in the performance of the organization.
Steps for Entrepreneurial Competency Development Program
The steps of entrepreneurial competency development program are:
1. Introduction of entrepreneurship
2. Motivation training
3. Management skills
4. Support system and procedure
5. Project feasibility study
6. Plant visit
1. Introduction of entrepreneurship
At the beginning of ECDP, the participants should be have general knowledge about
entrepreneurship. They are given clear information about the concept of
entrepreneurship, factors of affecting in entrepreneurship development, role of
entrepreneurs in economic development, entrepreneurial behavioral, status of
entrepreneur in the society and facility available for establishment and operation of
business etc..
2. Motivation training
ECDP’s main objectives is to induce and develop need for achievement among the
participant through enterprise development. All the efforts are used to inject
confidence and positive attitude and behavior among the participants toward
business. The participants are encouraged to establish new business after completing
training program. Other motivational activities like guest lecture from successful
and experienced entrepreneurs.
3. Management skills
To be an successful entrepreneur, he must possess managerial skills. Managerial skills
are essential for proper functioning of different functional departments such as
production, marketing, finance, human resource and public relation etc… An effective
management is essential for proper utilization of organizational resources and to
maximize productivity. ECDP emphasize have given for development of managerial
skills of all the participants.
4. Support system and Procedures
There are several government and non-government organization institutions who
support in establishment and operation of business firm. There are several stages,
documents and procedures for establishment and operation of new business. The
institute involves industry and commerce, company registrar office, financial
institutions, local body, representative associations etc…. IN ECDP program detail
information of the support system and procedures for establishment of different forms
5. Project feasibility study
Feasibility study involves in-depth study of detail project which serve as a valuable
means of developing successful plan. It involves all the relevant factors related to a
particular project such as economic, technical, legal and scheduling for completion
of project work effectively. In ECD program, workshop is organized where clear
guidelines is explained for preparation of a project report or feasibility repost for a
certain product or services.
6. Plan/ industrial visit
It is last but not least stage of ECDP. Under this, industrial site visit program is
organized. Participants are taken to small industries to get practical knowledge. The
practical knowledge includes behavior, personality, thoughts, aspirations and
knowledge of entrepreneurs. It may create the confidence in the mind of
participants.
Phases of Entrepreneurial Competency Development
Programs
ECDP’s main objectives is to provide inputs of entrepreneurial knowledge among the
participants and encourage them to establish their own business. It has three stages
which are as follows:
1. Pre-training stage
2. Training stage
3. Post training stage

4. Pre-training stage
It is the initial stage of ECDPs. In this stage, all the activities which are essential for
preparation to launch the training program. It involves the identification and
selection of potential entrepreneurs and providing initial motivation about
entrepreneurship and its benefits to them. It includes the following activities:
Identification and selection of trainee entrepreneurs
Preparation of training syllabus
Arrangement of infrastructure for training
Make tie-up with guest faculties
Arrangement for inauguration of program
Designing tools and techniques for selecting the trainees
Formation of selection committee
Publicity campaign for the program
Development of application form
Pre-potential survey of opportunities available in present environment.
2. Post Training stage