NCERT Solution - Resource Mobilization, Entrepreneurship-2 | Entrepreneurship Class 11 - Commerce PDF Download

Mentor Ship
Question 1. Answer in not more than 15 words:
(i) Who is a ‘Mentor’?
(ii) Define the term ‘Business Mentor’.
(iii) Give one difference between Group Mentoring and Peer Mentoring.
Answer: (i) A mentor is an experienced person, trusted guide, an advisor, wise and intellectual person who provides information, support, and encouragement, uses the mind creatively especially to another person, in their board for day-to-day issues encountered on the job and alternative perspectives on issues in terms of both problem identification and problem solving.
(ii) Business refers to an established person who is capable and willing to offer invaluable advice, support and guidance to a new entrepreneur is referred as Business mentor.
(iii) Group Mentoring/Peer Mentoring: This requires a mentor to work with 4-6 mentees at one time. Mentoring relations, formally or informally with colleagues.

Question 2. Answer in not more than 50 words:
(i) What is informal mentoring?
(ii) Enumerate the role played by the mentor.
Answer: (i) (a) There is no mentoring agreement.
(b) Goals of the relationship are not specified.
(c) Outcomes are not measured.
(d) Mentor and mentee self-select on the basis of personal chemistry.
(ii) (a) Help in diagnosing in order to define and understand the current situations in ,’ the enterprise.
(b) Help a mentee to assess his/her areas of shortcomings and strengths, giving critical , feedback to him in key areas.
(c) Provide assistance in finding the necessary information.
(d) Provide assistance in preparation of documentation for the enterprise and enterprise support programmes.
(e) Provides guidance and support in preparation and implementation of development activities/plans/projects, in order to achieve the best possible business results.
(f) Helps in identification, procurement and utilization of resources required for the proposed venture.
(g) Provides assistance in finding business partners.
(h) Provides consultation, and helps in coordinating activities aimed at accessing funds, new technologies, etc.
(i) Introduce the mentee to relevant consultants, trainers, suppliers, lawyers, accountants, etc. for that will help him boost confidence.
(l) As the mentor has the experience of witnessing ‘highs’ and ‘lows’ daring his venture starting, he/she can be a great source of introducing mentee to threats, can risks of market. –
(k) Helps the mentee in learning, specific skills, knowledge, unspoken rules critical for success of business. Mentoring benefits the enterprise, mentors and mentees.

Question 3. Answer in not more than 75 words:
(i) What benefits do mentors gain from their function?
(ii) Explain the concept of mentoring. Give two examples to support your answer.
Answer: (i) Mentors enjoy many benefits:
(a) Gains insights from the mentee’s background and history that can be used in the mentor’s professional and personal development.
(b) Gains satisfaction in sharing expertise with others.
(c) Re-energizes the mentor’s career.
(d) Gains an ally in promoting the organization’s well-being.
(e) Learns more about other areas within the organization.
(ii) Mentoring is about a person helping another to achieve something beneficial.
He is a faithful, wise advisor, creates an informal environment, in which the other person feels encouraged to discuss their needs and circumstances openly and in confidence.
Mentoring is a powerful personal development and empowerment tool.
His help and support are in a non-threatening manner, so that the recipient appreciates and give values to him.
It involves to support and encourage people to manage their own learning in order that may maximize their potential develop their skills, improve performance and become the person they want to do.
Examples:
1. Family members, experienced friends or your career advisor giving out advice.
2. Well established person who is capable and willing to offer invaluable advice, support and guidance to a new entrepreneur.
3. Teacher teaches students.
4. Group of promoters advising and new entrepreneurs.
5. Coaching is also one of the transactional situation.

Question 4. Answer in not more than 150 words:
(i) Briefly state the different types of mentoring.
(ii) “Not only the entrepreneur but also the entire organization benefits from Mentoring”. Explain?
Answer: (i)

Types:
Generally, a mentor does not get involved in the daily activities of the business. But they will stay in contact with the new business owner, and make themselves available when questions arise.
At the start, the person being mentored may need more frequent meetings but as the mentee grows confident, they will need fewer contacts with the mentor. It is for the mentee to select the type of mentoring required.
Mentoring thus may be classified on two grounds:
(a) Mode of construction (in which way mentorship is structured)
(b) Mode of delivering (in which manner mentorship is rendered).
Informal:
• Goals of the relationship are not specified
• Outcomes are not measured
• Mentor and mentee self-select on the basis of personal chemistry.
Formal:
• Mentor and mentee are paired based on compatibility
• Goals are established from the beginning by the organization
• Outcomes are measured.
Delivering Mode
One-on-one: This mentoring matches one mentor with one mentee.
Group Mentoring: This requires a mentor to work with 4-6 mentees at one time. Online Mentoring: Mentoring relations through computerized programmes.
Peer Mentoring: Mentoring relations, formally or informally with colleagues.
(ii) Mentoring in itself benefits the organisation through:
• Enhancing strategic business initiatives.
• Encouraging retention.
• Reducing turnover costs.
• Improving productivity and production.
• Breaking down the “silo” mentality by senior employees and in between employers and employees.
• Elevating knowledge transfer from just getting information and to retaining the practical experience and wisdom gained from long-term employees.
• Enhancing professional development.
• Linking employees with valuable knowledge and information to other employees in need of such information.
• Using own employees, instead of outside consultants, as internal experts for professional.
• Development and encouraging them.
• Supporting the creation or a multicultural workforce by creating relationships among diverse employees and allowing equal access to mentoring.
• Creating a mentoring culture, which continuously promotes individual employee growth and development.

Question 5. Answer in not more than 250 words:
(i) Discuss the role and importance of mentoring.
(ii) Explain mentoring. What are the characteristics?
Answer: (i) For giving a strong foothold to the venture and ensuring its growth, the role of the mentor is very wide, crucial and significant. This long-term guidance support, enabling someone who is less experienced to develop and grow in their chosen role can be summarized as follows:
(а) Help in diagnosing in order to define and understand the current situations in the enterprise.
(b) Help a mentee to assess his/her areas of shortcomings and strengths, giving critical feedback to him in key areas.
(c) Provide assistance in finding the necessary information.
(d) Provide assistance in preparation of documentation for the enterprise and enterprise support programmes.
(e) Provides guidance and support in preparation and implementation of development activities/plans/projects, in order to achieve the best possible business results.
(f) Helps in identification, procurement and utilization of resources required for the proposed venture.
(g) Provides assistance in finding business partners.
(h) Provides consultation, and help in coordinating activities aimed at accessing funds, new technologies, etc.
(i) Introduce the mentee to relevant consultants, trainers, suppliers, lawyers, accountants etc. for that will help him boost confidence.
(j) As the mentor has the experience of witnessing “highs’ and ‘lows’ during his venture starting, he/she can be a great source of introducing mentee to threats, risks of market.
(k) Helps mentee in learning, specific skills, knowledge, unspoken rules critical for success of business.
(ii) Mentoring is about a person helping another to achieve something. As a faithful and wise advisor he creates an informal environment, in which the other person feels encouraged to discuss their needs and circumstances openly and in confidence.
It is a powerful personal development and empowerment tool. He/she is always providing help and support in a non-threatening way, in a manner that the recipient appreciates and values is mentoring. It involves to support and encourage people to manage their own learning in order that may maximize their potential, develop their skills, improve performance and become the person they want to do.
It is the process through which someone who is perceived as a facilitator, listener, coalition builder, trustworthy, creates a safe learning environment, without making the mentee worry about negative consequences.
These are the following characteristics of mentoring :
1. Takes place outside a line manager-employee relationship, at the mutual consent of a mentor and the person being mentored.
2. It always focuses on professional development and sometimes may go beyond the extent like outside a mentee’s area of work.
3. It is always considered as a personal relationship. As a mentor he provides both professional and personal support.
4. Relationship may be initiated by a mentor through a match initiated by the organization.
5. Relationship crosses job boundaries.
6. Relationship may last for a specific period like short period of time (nine months to a year) in a formal program, at which point the pair may continue in an informal mentoring relationship.
7. It is really about developing a person’s character and ability to grow. Coaching is more for the immediate future.
8. The relationship itself, which determines if the mentoring will be successful. Trust, rapport and caring are important in coaching but the relationship dynamic is not the same.
9. Mentoring is a gift, and usually the person will pay it back by mentoring someone else. This is what helps mentoring grow exponentially throughout society. Coaching is a more transactional situation.

Sources of Information
Question 1. Answer in not more than 15 words:
(i) Define Census Method of collecting data.
(ii) Name the main producers of information.
(iii) Name the-sources available to an entrepreneur at the state and the central level, to seek information regarding plant and machinery .
Answer: (i) It refers to the method of collecting data covering each and every item of the prescribed area under investigation.
(ii) There are three main producers/originators of information. These are the:
(a) Government Agencies (b) Academic Institutions
(c) Private sector (d) Individuals
(iii) SFC (State Finance Corporation).
CCIE (chief Controller of Import and Export).

Question 2. Answer in not more than 75 words:
(i) Identify any six major small scale industry groups in India.
(ii) What purpose does ‘information’ serve for an entrepreneur?
Answer: (i) Small scale industries: These are the industrial units whose investment in plant and machinery does not exceed ? 5 crore.
The main features of these industries are as follows:
(i) Labours are the main people involved in the part of production. They will be get wages.
(ii) They use machine and runs with electricity.
Examples:
(a) Hosiery factories in Ludhiana.
(b) Scientific instruments making factories in Ambala.
(c) Carpet making factories in Panipat.
(d) Radio, TV, etc. manufacturing factories in Delhi.
1. Tiny Sector: Only the business enterprises which are constituted under the tiny sector and whose investment in plant and machinery is up to 25 lakhs, but would
• shortly be raised irrespective of location of the unit.
2. Auxiliary Small Units: A small-scale industry unit can be known as ancillary (auxiliary) small industrial unit if it supplies not less than 50% of its production to another unit, referred to as the parent unit. Such type of units manufacture tools and equipments, components, unfinished goods, spare parts, etc. for the parent units.
These units also enjoy the benefit of getting demand from the parent units so that they can survive for long time and time to time they get financial help also from their parent unit.
3. Micro-business: A unit can be called as micro business enterprise, if it has an investment in plant and machinery and it does not exceed 25 lakh.
4. Small-scale Service and Business (industry Related) Enterprise:
The definition of MSME’s (Ministry of Micro, Small and Medium Enterprises) in the service sector is:
Micro-enterprise: Investment in equipment does not exceed 10 lakh.
Small enterprise: Investment in equipment is more than 10 lakh but does not exceed 2 crores.
Medium enterprise: Investment in equipment is more than 2 crores and less than 5 crores.
5. Small-Scale Industries Owned and Managed by Women Entrepreneurs:
A small-scale industry can be known as a ‘Women Enterprise’ if a woman or a group of women individually or jointly, have share capital of not less than 51%. Such type of enterprises can avail of the concession offered by the government, e.g. low rate of interest on loans, etc.
6. Export-oriented: A small scale industry unit can be known as export-oriented unit if it exports more than 50% of its production. Such type of units have the benefit like subsidy offered by the government.
The Ministry of MSME & ARI will bring out a specific list of hi-tech and export oriented industries which would require the investment limit to be raised upto 5 crores to admit of suitable technology upgradation and to enable them to maintain their competitive edge.
7. Cottage and Rural: According to the Fiscal Commission, “Cottage industry is an industry which is run either as whole-time or part-time occupation with the full or partial help of the members of the family.”
The main features of these industries are as follows:
(i) Run only by the members of the family.
(ii) Mainly run by the artisans at their homes.
(iii) Involve very little capital.
(iv) Often fulfil the requirement of a local region.
(v) Involve rare use of machines.
(vi) The main examples are khadi and handicrafts industries. Traditional items are manufactured in these industries like mats, shoes, pottery, etc.
(ii) Importance of Information for an Entrepreneur:
Entrepreneur is a person who conceives an idea, or who discovers the opportunity in the environment. This ability of an entrepreneur of perceiving and sensing an opportunity, makes him always, search “For knowledge/need/problem” in the environment. He needs to, in depth scan “inquiry/idea”/“quest” so as to evaluate its feasibility and viability. A detailed investigation is a must, before an entrepreneur converts the idea into enterprise. The most common parameters to be investigated are:
(1) Feasibility, viability, application and utility of prevailing market conditions viz. demand, supply, competitors.
(2) Types of resources required and their supplies.
(3) Expected profitability.
(4) Prevailing environmental factors and their impact on idea’s feasibility. Thus, before any decision is taken an entrepreneur needs accurate, authentic and relevant information.

Question 3. Answer in not more than 150 words:
Identify the information resource centre at the State and Central levels available in India to the entrepreneur regarding:
(a) Product standardization and quality mark.
(b) Technical know-how.
(c) Selection of project.
(d) Registration.
Answer:

Question 4. Answer in not more than 250 words:
(i) Differentiate between Primary, Secondary and Tertiary source of information.
(ii) What is meant by primary source of information? Explain the method of collecting primary data.
Answer: (i)

(ii) Primary sources are original materials and collected from the time period involvec and have not been filtered through interpretation or valuation. They present original thinking, report a discovery, or share new information and it is based on in-depth research studies.It includes:(a) The data is collected by the investigator for the first time.(b) Primary source report, a discovery or share new information.
(c) They present first hand accounts and information relevant to an event.
(d) They present information in its original form, not interpreted, condensed or evaluated by other writers.
(e) They are usually evidence or accounts of the events, practices being researched and created by a person who directly experienced that event.
(f) Primary sources are the first formal appearance of results in print or electronic formats.
Methods of Collection:
The different methods of collecting data are as follows:
(a) Direct Personal Investigation: It refers to the method by which the investigator collects the information personally from the informants and the source concerned. It can be possible if field of investigation is limited. More degree of originality and accuracy is required. Direct data with the informants are required.
(b) Indirect Oral Investigation: The investigator collects the information not from the original person but approaches certain sources which are close or to be known directly or indirectly to the informants.

• It can be more suitable-if the field of investigation is large.
• There is no possibility of direct contact.
• The concerned informants are not able to read and write.
•  Mostly used in government departments.

(c) Local Correspondents: The investigator appoints local agents or correspondents in different parts of the area under investigation. Generally, they collect the information according to their skills and tactfulness and then submit it to the investigators.

• It is more suitable when regular and time-to-time information is required.
• Area has wide coverage.
•  The availability of information is possible through magazine, journals, annual report.

(d) Mailed Questionnaire: It refers to the type prepared by the investigator keeping in view the objective of the inquiry and sends it to informants/respondents who post or e-mail. The informants fill it completely by himself and send it back to the investigator.
(e) Questionnaire through Enumerators: The enumerators go to informants along with the questionnaire to help fill the questionnaire according to the answers given by the informants. It is also known as schedules.

Sizee and Capital Based

Classification of Business Enterprises
Question 1. Answer in not more than 15 words:
(i) Define a ‘Tiny enterprise’.
(ii) Define a Large Scale Enterprise.
(iii) When is a unit said to be a “Medium Scale Enterprise”?
(iv) When is a unit referred to as a “Micro-Business Enterprise”?
Answer: (i) Tiny enterprises are those business unit where the investment in plant and machinery does not exceed Rs 2.5 million (Rs 25 Lakhs) irrespective of the location of the unit.
(ii) The industrial units whose investment in plant and machinery exceeds 10 crores are
said to be large units. .
(iii) A medium enterprise is one where the investment in plant and machinery is more than ? 5 crore but does not exceed ? 10 crore.
(iv) A unit is known as micro business enterprise if it has an investment in plant and machinery (their original cost excluding/and building and items specified by Ministry of SSI in its notification No. S.O. 1722 (e) dated Oct. 5, 2006) does not exceed Rs. 25 lakh.

Question 2. Answer in not more than 50 words:
(i) List the parameters used to measure the volume of the business.
(ii) How would you differentiate between an ancillary unit and a tiny unit?
(iii) When is any activity referred as a ‘Business Activity’?
Answer: (i) Following are the list of the parameters used to measure the volume of the business.

(ii) Differences between an ancillary unit and a tiny unit.

(iii) All the activities which are undertaken in connection with the place of production to the place of consumption is said to be business activity.

Question 3. Answer in not more than 75 words:
(i) Classify, on the basis of size, the business enterprises.
(ii) Explain the characteristics of a cottage and rural industry.
(iii) Discuss the enterprises which comes under the category of being an SSI units.
Answer: (i) On the basis of size three types of industries are there:
1. Small Scale Industry: It means that industrial unit whose investment in plant and machinery does not exceed Rs 5 crores.
2. Medium Scale Industries: A medium enterprise is one where the investment in plant and machinery is more than Rs 5 crores but does not exceed ? 10 crores.
3. Large Scale Industries: The industrial units whose investment in plant and machinery exceeds 10 crores are said to be large units.
Whether a business enterprise is small or large depends upon its volume. Some of the prevalent parameters for measuring the volume are as follows: In India, often, it is adjudged on the basis of the volume of the capital invested whether an enterprise is large or small.
Thus, according to volume of capital invested, industries are categorized as:
(a) Small Scale (b) Medium Scale (c) Large Scale
(a) Small Scale Industries: It means that industrial unit whose investment in plants and machinery does not exceed Rs. 5 crores. In this type of industry labours are kept on wages, machines are used,machines must run with electricity. Some examples of SSI units are:
(а) Hosiery factories in Ludhiana.
(b) Scientific instruments making factories in Ambala,
(c) Carpet making factories in Panipat.
(b) Medium Scale Industries: A medium enterprise is one where the investment in plant and machinery is more than Rs. 5 crores but does not exceed Rs. 10 Crores.
(c) Large Scale Industries: The industrial units whose investment in plant and machinery exceeds 10 crores are said to be large units.
(ii) Cottage and Rural: According to the Fiscal Commission, “Cottage industry is an industry which is run either as a whole-time or a part-time occupation with the full or partial help of the members of the family.” It includes all the products that are produced in a home-based enterprise rather than in a factory.
The main features of these industries are as follows:
(a) Run only by the members of the family.
(b) Mainly run by the artisans at their homes.
(c) Involve very little capital.
(d) Often fulfil the requirement of a local region.
(e) Involve rare use of machines.
(f) The main examples are khadi and handicraft industries.
(g) Cottage industries are mainly traditional industries which produce traditional goods with the traditional techniques.
Examples of cottage industries are khadi industry, handicrafts, handlooms, cane and bamboo based industries, pottery, black smithy, etc. Cottage industries in India are spread all over the country. This is an employment opportunity for people who know how to make articles such as rugs, clothing, jewellery and other things. It is usually done at home and then sold. The industry tries to preserve the cultural history of the people.
(iii) Small Scale Industries: The industrial unit whose investment in plant and
machinery does not exceed ? 5 crore are called Small Scale Industries.
The main features of these industries are as follows:
(a) Labour are the main people involved in the part of production. They will be get wages.
(b) They use machine and runs with electricity.
Examples: (a) Hosiery factories in Ludhiana.(b) Scientific instruments making
factories in Ambala. (c) Carpet making factories in Panipat. (d) Radio, TV, etc.
manufacturing factories in Delhi.
(1) Tiny Sector: Only those business enterprises are constituted under the tiny sector whose investment in plant and machinery is up to ? 25 lakhs, but would shortly be raised irrespective of location of the unit.
(2) Auxiliary Small Units: A small-scale industry unit can be known as ancillary (auxiliary) small industrial unit if it supplies not less than 50% of its production to another unit, referred to as the parent unit. Such type of units manufactures tools and equipments, components, unfinished goods, spare parts, etc. for the parent units. These units also enjoy the benefit of getting demand from the parent units so that they can survive for long time and they get financial help also from their parent unit. ‘
(3) Micro-business: A unit can be called as micro business enterprise, if it has an investment in plant and machinery does not exceed ? 25 lakhs.
(4) Small-scale Service and Business (industry Related) Enterprise: The definition of MSME’s (Ministry of Micro, Small and Medium Enterprises) in the service sector is:
• Micro-enterprise: Investment in equipment does not exceed ? 10 lakhs.
• Small enterprise: Investment in equipment is more than ? 10 lakhs but does not exceed ? 2 crores.
• Medium enterprise: Investment in equipment is more than ? 2 crores and less than 5 crores.
(5) Small-Scale Industries Owned and Managed by Women Entrepreneurs:
A small-scale industry can be known as a ‘Women Enterprise’ if a woman or a group of women individually or jointly, have share capital of not less than 51%. Such type of enterprises can avail of the concession offered by the government, e.g. low rate of interest on loans, etc.
(6) Export-oriented: A small scale industry unit can be known as export-oriented unit if it exports more than 50% of its production. Such type of units have the benefit like subsidy offered by the government.
The Ministry of MSME & ARI will bring out a specific list of hi-tech and export oriented industries which would require the investment limit to be raised upto ? 5 crores to admit of suitable technology upgradation and to enable them to maintain their competitive edge.
(7) Cottage and Rural: According to the Fiscal Commission, “Cottage industry is an industry which is run either as a whole-time or a part-time occupation with the full or partial help of the members of the family.”
The main features of these industries are as follows:
(a) Run only by the members of the family.
(b) Mainly run by the artisans at their homes.
(c) Involve very little capital.
(d) Often fulfil the requirement of a local region.
(e) Involve rare use of machines.
(f) The main examples are khadi and handicraft industries.

Question 4. Higher Order Thinking Skills (Hots)
(i) Anurag, a textile industrialist, wants to buy a new printing machinery and its allied tools.
Suggest for him, that before any finalising the same, what he should investigate first.
(ii) Procurement of physical resources is not an easy job. Do you agree? Give reasons.
(iii) How is “Capitalisation” different from “Capital Structure”?
(iv) ‘An ideal capital structure is a result of great, planning and team work’. What factors are required to be planned and paid attention to at this time?
(v) Anjali Ltd. had decided to expand its production capacity by modernizing its plant and machinery at an estimated cost of ? 2 crores. The company doesn’t have enough reserves to finance modernization. Suggest two sources to the company from where they can raise finance.
Answer: (i) Physical resources are those that are made by human through his abilities and skills.
It includes various capital equipments required by an entrepreneur at the startup stage of the business that he can carry out his business smoothly. They are available to an organisation in the form of:
(а) buildings, plants, machineries, etc.
(b) raw-material required for the basic operation.
(c) other requirements depending upon the nature of the product and services for running of an enterprise like technology.

• So, the foremost concern for the entrepreneur is to assess the ‘place’ where the enterprise is going to be established.
The basic infrastructure required to be constructed is all part of physical resources.
• The category of physical resources covers a wide range of operational resources concerned with the physical capability of the enterprise.
(ii) A careful selection of physical resources is essential because many allied issues are influenced by the ‘place’ selected such as:
(1) Capital Cost: Physical resources should be within the limit laid down.
(2) Access to other resources: At initial stage availability resources should be assured
(3) Transport and Communication Cost: These two things should be within the limit.
(4) Availability of manpower and its cost (wages, salaries) All skilled, unskilled, administrative staff and technical expert should be available and their remuneration should be appropriate.
(5) Cost of production should not exceed.
(6) Availability of other utilities like water, gas, fuel, etc. must be ensured. The premises should be located according to the availability of various infrastructural requirement like water, gas, power, fuel, etc.
(7) Access to market for both raw materials and finished goods within the area easily accessible and delaying should be avoided for both market and supply of finished goods.
(8) Pollution concerns involved: Should be cross checked and verified throughout means it should not be harmful to the society.
(iii)

(iv) Capital structure is the composition or mix of different types of long-term capita whether owned or borrowed. It includes all the long term funds consisting of share capital, debentures, bonds, loans and reserves.

To find out an ideal debt-equity mix is a difficult task. Every entrepreneur should try developing that relationship of debt and equity securities which is maximum the value of a company’s shares in the market. There are many factors which are to be considered while designing an appropriate capital structure of a company like earning capacity of the company. The relative weightage assigned to each of these factors will vary widely from company to company depending upon the:
(а) Characteristics of the company
(b) General economic conditions prevailing
(c) Circumstances under which the company is operating.
A proper proportion between fixed and variable yield-bearing securities is very necessary for the liquidity and solvency of the company.

If a company make an ideal capital structure which shows a high degree of earning capacity it shows a result of great, planning and team work.
(v) (i) Loans from Financial Institutions: Institutional finance refers to institutional sources of finance to industry, other than commercial banks. These institutions are established by the Central/State Government, aiming at promoting the industrial development of a country and to provide technical assistance to industrial units.
(ii) Loans and Advances: A loan is a lumpsum advance made for a specified period. Here, the entire amount is paid to the borrower in lumpsum either in cash or by way of transfer to his account. In this:

• The borrower may withdraw the entire amount in a lumpsum or in installments as per his/her needs.
• The interest is charged on full amount of loan irrespective of how much had been actually withdrawn.
• Loans are generally granted against the security of certain assets.
  These are the two sources to the company from where they can easily raise finance.