Chapter 1: Introduction
Chapter 1
INTRODUCTION
Today’s society has been characterised as a knowledge society and its economy as a
knowledge economy. Leveraging of information is an essential ingredient in the
making of a knowledge economy. Information is recognized as a valuable resource
and a key factor in today’s competitive world. It is an integral part of life. Whatever
one does, wherever one stays, whoever one is, whether one recognises it or not,
everyone needs and uses information. Integrated and internalised information is
‘Knowledge’, and in today’s world ‘Knowledge is Power’.
In the knowledge economy, where the touchstone of competitiveness is the capacity
for innovation, the fostering of an entrepreneurial culture is important. It is important
to concentrate on the conditions that favour the emergence of both entrepreneurs and
the process of innovation. Entrepreneurship has to be nurtured through a complex
support system consisting of – appropriate policies, financial and technical agencies,
infrastructure and access to training and information.
As India gets ready to become a knowledge economy, libraries and information
centres need to adapt to the new information environment and design appropriate
systems and services to support the new scenario. Various user groups need to be
serviced; among the emerging work groups they must focus on, are entrepreneurs. It
is necessary to first understand the user group, their characteristics, their information
needs and information seeking behaviour.
1.1 Entrepreneurs
The twenty-first century has been described as a century of new developments based
on entrepreneurship and as ‘the century of young enterprisers’ (Shejwalkar, 1996).
Entrepreneurship
flourishes
in
communities
where
resources
are
mobile
(Stevenson,2000). During the last century, the world witnessed and experienced
1
Chapter 1: Introduction
rapid advances in science and technology, which narrowed the distances between
peoples of the world bringing them closer with better communication and easier
interaction. This raised levels of aspirations and demands for goods and services
grew. For India, the change of the millennium was a significant turning point. It was
the ‘Y2K’ phenomenon or the advent of the year 2000, which virtually forced the
world to make use of the IT professionals in India bringing a broad spectrum of
opportunities to Indians. The change of the millennium was a significant turning
point as it led to many lifestyle changes-- technical, social, economic and personal.
The last two decades have seen major societal changes in many dimensions. Changes
in the financial markets and labour markets have increased mobility substantially.
Perhaps more importantly, improvement in logistics, cross border flows of labour,
capital and ideas, weakening of intellectual property protection and global
communication have helped people, money, product and ideas to disperse throughout
the world and to flow to the areas of greatest opportunity. (Stevenson, 2000)
In theses changing situations, entrepreneurs and small and medium sized enterprises
(SMEs) have emerged as the engine of economic and social development. The 90s
have seen the celebration of the entrepreneur (Stevenson, 2000). The role of
entrepreneurship has evolved significantly and is now seen as a requisite ingredient
in the global economy - generating employment, growth and international
competitiveness. Small businesses are also important at a national level, for a number
of reasons. They provide regionally distributed employment around the country.
They deliver a range of local services to the economic, social and cultural life of the
population. They form an essential part of the supply chain for larger firms and, in
particular, are part of the support infrastructure needed to attract and retain foreign
investment (Martin, 2006).
2
Chapter 1: Introduction
In the history of economic thought, while trying to understand entrepreneurship, a
variety of suggestions have been proposed concerning the ‘essence’ of
entrepreneurship. Some economists have seen entrepreneurship as consisting
essentially in the bearing of pure, sheer uncertainty. Others have seen it as consisting
in it an innovative character. Still others have seen the entrepreneur as the
middleman linking markets. Some have seen the entrepreneur as providing
leadership; others as a source of information (Kirzner, 1984).
Entrepreneurs handle information in different ways and at different phases of
entrepreneurial growth. Entrepreneurship has been studied from different
perspectives. The present study seeks to see entrepreneurship from the perspective of
library and information science (LIS). This introductory chapter examines the
concepts of entrepreneurship, information needs & information seeking behaviour
and the links between the two.
Background
An entrepreneur is an individual who accepts risks and undertakes new ventures. The
word derives from the French word ‘entre’ (to enter) and ‘prendre’ (to take), and in a
general sense applies to any person starting a new project or trying a new
opportunity. The term was first introduced by Richard Cantillon a French banker, in
the mid 18th century, as “the agent who buys means of production at certain prices in
order to combine them into a new product” (Schumpeter, 1951). Before that, the term
was used in the early 16th century France for men engaged in leading military
expeditions, and in the early 18th century the term was frequently applied by the
French government for their road, harbour and fortification contractors. An
entrepreneur, according to Cantillon, was a kind of person who was engaged in
production activities and made certain payments in expectation of uncertain receipts
and was mainly an uncertainty bearer (Aitken, 1965 cited by Deshpande, 1989).
Knight (1921) further elaborated the definition emphasizing the uncertainty aspect.
He described an entrepreneur as a person who takes decisions under the conditions of
‘risk’ and ‘uncertainty’- risk which can be covered through insurance and uncertainty
which can neither be evaluated, nor insured.
3
Chapter 1: Introduction
Peter Drucker (1970) emphasised that entrepreneurship is about taking risk. The
behaviour of the entrepreneur reflects a kind of person willing to put his career and
financial security on the line and take risks in the name of an idea, spending much
time as well as capital on an uncertain venture. Still another view of entrepreneurship
is that it is the process of discovering, evaluating, and exploiting opportunities, which
go on to reify themselves in the form of new business ventures.
Another view was to look at the entrepreneur from the perspective of capital. Say
(1821), a French economist viewed the entrepreneur as one who generally, but not
necessarily, worked with his own or borrowed capital.
He viewed him as an
‘organiser’ and distinguished him from a ‘capitalist’ (Schumpeter, 1951). The role
of a capitalist was to finance the enterprise, whereas, an entrepreneur was an
organizer and speculator of a business enterprise. On the other hand entrepreneurs
have also been defined by their functions like superintendence, control, direction,
and risk bearing.
The definition used at the Harvard University is “Entrepreneurship is the pursuit of
opportunity beyond the resources you currently control”. This definition takes into
account both the individual and the society in which the individual is embedded. The
individual identifies an opportunity to be pursued, then, as an entrepreneur, must
seek the resources from the broader society (Stevenson, 2000).
Many theorists, especially economists believe that Schumpeter’s definition of an
entrepreneur as an innovator is more applicable to advanced and developed countries
of the world.
Berna (1960) stated that “economy shaking innovators are the
exceptional few who emerge at the summit of the broadly based pyramid. Such men
do not appear and could not function until a certain level of educational, social and
technical progress has been achieved” in a society. Chaudhary (1975) not only
endorsed the views of Berna but also emphasized the need to alter Schumpeter’s
definition of an entrepreneur for it to be applicable to less developed countries of the
world.
4
Chapter 1: Introduction
Modern scholars have adopted a practical approach by taking into consideration the
existing conditions of the Third World Countries. The entrepreneurs of such
countries cannot afford to have large-scale operations at the inception level nor can
they restrict themselves to any one or two of the entrepreneurial tasks but have to
perform multiple functions to run an enterprise successfully. Kilby (1971) envisaged
an entrepreneur in an underdeveloped country: “in an underdeveloped economy,
entrepreneurship involves a wide range of activities which include inter-alia,
perception of market opportunities, combining and managing the factors of
production, and introduction of the production techniques and products…. A vast
majority of firms in underdeveloped countries are of small and medium size, and
input markets are also under-developed”.
Amar Bhide (2004) explains how the role of individual entrepreneurs is somewhat
different in India than in an advanced economy. In advanced countries, most
resources are fully utilised and increase in productivity requires new technologies.
Small businesses started by individual entrepreneurs play an important role in
developing new technologies by conducting low budget feasibility experiments, a
view that is also supported by Rock (1987). In contrast, in a developing economy the
actual productivity of resources is below that of developed economies.
The
acquisition of proven, more efficient technology usually requires large scale
operations which are generally beyond the resources of the individual entrepreneur.
However, the successful implementation of such technologies requires a host of new
complementary goods and services to make them useful for local use. Individual
entrepreneurs can play a critical role in developing such small scale complementary
enterprises.
The necessity of entrepreneurship for production was first formally recognized by
Alfred Marshall in 1890. In his famous treatise Principles of Economics, Marshall
asserted that there were four factors of production: land, labour, capital, and
organization. Organization was the coordinating factor, which brought the other
factors together. Marshall believed that entrepreneurship was the driving element
5
Chapter 1: Introduction
behind an organization. By creatively organizing, entrepreneurs create new
commodities or improve "the plan of producing an old commodity”. He suggested
that the skills associated with entrepreneurship were rare and limited in supply and
claimed that the abilities of the entrepreneur were "so great and so numerous that
very few people could exhibit them all in a very high degree". Marshall, however,
implied that people could be taught to acquire the abilities that were necessary to be
an entrepreneur. Although entrepreneurs shared some common abilities, all
entrepreneurs were different, and their successes depended on the economic
situations in which they attempted their endeavours (Marshall, 1994).
The key elements about entrepreneurs that emerge from the various definitions are :-
Ability to recognize an opportunity for a product or service.

Ability to innovate in order to provide for the same.

Willingness to take a risk.

Applying technical know how and other skills to create and supply the product or
service and to make a profit from this.
Characteristics, Types and Functions
Entrepreneurs share many character traits with those of leaders. In their traits, they
are often contrasted with managers and administrators who are said to be more
methodical and less prone to risk-taking. Extensive research studying the
‘entrepreneurial personality’ has found that certain traits seem to dominate in them.
They are

Primarily motivated by an overwhelming need for achievement; a strong ‘urge to
build’ (David McClelland, 1961).

Tough, pragmatic people driven by needs of independence and achievement,
seldom willing to submit to authority. (Collins and Moore, 1970).

Mercurial, that is, prone to insights, brainstorms, deceptions, ingeniousness and
resourcefulness; they are cunning, opportunistic, creative, and unsentimental.
(Bird, 1992).

Prone to overconfidence and over generalizations (Busenitz and Barney, 1997).
6
Chapter 1: Introduction
According to Cole (1959), there are four types of entrepreneurs: the innovator, the
calculating inventor, the over-optimistic promoter, and the organisation builder.
These types are not related to the personality but to the type of opportunity that the
entrepreneur faces.
Clarence Danhof on the basis of his study of American agriculture, classified
entrepreneurs as of four types (Khanka, 2001)

Innovating Entrepreneurs are those who introduce new goods, inaugurate new
methods of production, discover new markets and reorganise an enterprise.
These entrepreneurs can work only after a certain level of development is
achieved and people look forward to change and improvement.

Imitative Entrepreneurs are characterised by readiness to adopt successful
innovations inaugurated by innovating entrepreneurs. Imitative entrepreneurs do
not innovate the changes themselves, they only imitate techniques and
technologies innovated by others. Such types of entrepreneurs are suitable for
under developed and developing countries for bringing a mushroom drive of
imitation of new combinations of factors of production already available in
developed regions.

Fabian Entrepreneurs are characterised by very great caution and scepticism in
experimenting any change in their enterprises. They imitate only when it
becomes clear that failure to do so would result in a loss of the relative position
of the enterprise.

Drone Entrepreneurs are characterised by a refusal to adopt opportunities to
make changes in production formulae even at the cost of severely reduced
returns. Such entrepreneurs may even suffer from losses but they are not ready
to make changes in their existing production methods.
Whatever be the type of personality of the entrepreneur, the fact remains that they
have to be both creative and innovative. In their enterprise, they have to be
multifaceted and they have to multitask. Khanka (2001) describes the functions of a
start-up entrepreneur. The tasks he/she has to perform range from the genesis of an
idea upto the establishment of an enterprise and are as follows
7
Chapter 1: Introduction

Idea generation and scanning of the best possible idea.

Determination of the business objectives.

Product analysis and market research.

Determination of form of ownership / organisation.

Completion of promotional formalities.

Raising necessary funds.

Procuring machine and material.

Recruitment.

Undertaking the business operations.
The entrepreneur will need to continue performing most of these tasks even after
start-up. As the enterprise establishes itself, the managerial role predominates over
the innovator’s role. Whether the enterprise is small or big, all the tasks involved in
managing it are generally the same though the scale may vary substantially. The
small enterprise may have to merge several managerial roles in one.
Entrepreneurship in India
In a developing economy, balancing the aspirations of people with the scarce
resources available is a challenge. In India, soon after Independence, large underemployment and unemployment were recognised as important issues to be dealt
with. In the agrarian context developing employment in the villages and encouraging
self-employment were key strategies.
The role of new ventures and small business in job creation was accepted. Over the
years, despite systematic planning, unemployment, both of educated and uneducated
people has grown. In recent years, downsizing of large enterprises and closure of
companies have created a new class of the unemployed. Voluntary retirement
schemes may have solved problems for organisations but have added to the number
of unemployed. Increase in life span and improved health care facilities have meant
that people who superannuate from their jobs are also free and looking for something
to occupy themselves professionally. One solution, which can give rise to increased
8
Chapter 1: Introduction
employment, is the creation of small enterprises; another is self-employment or
entrepreneurship.
The conceptualisation of the idea of ‘small scale sector’ arose on account of low
capital requirement and potential to generate employment both in rural and
geographically difficult regions. The growth and development of the small scale
sector has been favoured by the Government of India on the following grounds:
generation of employment opportunities by small scale industries.

mobilization of capital and entrepreneurship skills.

regional dispersal of industries .

equitable distribution of national income.
Steps like creation of Small Industries Service Institutes to provide necessary skills
and their up-gradation, reservation of areas of operation, incentives, concessions of
various types, priority credits through nationalized banks were all directed to create
appropriate atmosphere for operation by small scale entrepreneurs.
The Small Industries Development Organization (SIDO) was established in 1954 to
provide a wide spectrum of services to the small industries sector. These included
facilities for testing, training, preparation of project and production profiles,
consultancy and provision of economic information services. The National Small
Industries Corporation Ltd (NSIC) was established in 1955 to promote aid and foster
the growth of small industries in the country. NISIET or the National Institute for
Small Industry Extension Training was set up in 1960 for training, research and
consultancy.
In 1970 NISIET set up SENDOC (Small Enterprises National
Documentation Centre) as a knowledge resource centre to cater to the information
needs of Small and Medium Enterprises (SME). It provides a variety of
documentation and information services through its division Business Information
Bureau (BIB). It acts as an information lounge and provides facilities to just-in-time
accesses to information and knowledge to CEOs, academicians and other senior
managers from business and industry. The EXIM (export-import) services section of
BIB provides information on export-import data of countries, their policies and
9
Chapter 1: Introduction
regulations. SENDOC has built up a rich collection of books, journals, newspaper
clippings etc. It provides special services such as literature searches, reprographic
services, Internet facility, SDI (Selective Dissemination of Information) and
technology enquiry and just-in-time access to information. It brings out several
periodicals such as SME Technology, SME Policy, SEDME Journal, NISIET
Bulletin and SSI Cluster News. It also offers LIS training programmes geared to
information handling and services, for business.
The National Institute for Entrepreneurship and Small Business Development
(NIESBUD) was established in 1983 by the Ministry of Industry (now Ministry of
Small Scale Industries), Govt. of India, as an apex body for coordinating and
overseeing the activities of various institutions/ agencies engaged in entrepreneurship
development particularly in the area of small industry and small business. Some of
the aims of NIESBUD are to provide vital information and support to trainers,
promoters and entrepreneurs by organising research and documentation relevant to
entrepreneurship development; to provide national/international forums for
interaction and exchange of experiences helpful for policy formulation and
modification at various levels; to offer consultancy nationally/internationally for
promotion of entrepreneurship and small business development; to share
internationally experience and expertise in entrepreneurship development and to
share experience and expertise in entrepreneurship development across National
frontiers.
The creation of Small Industries Development Bank of India (SIDBI) in April 1990,
for financial back up was another boost to the small industries. In 1993, the Indian
Institute for Entrepreneurship (IIE) was established by the Ministry of Industries to
undertake training, research and consultancy activities in the small industry and
entrepreneurship.
The Entrepreneurship Development Institute of India (EDI), an autonomous body
and not-for-profit institution, set up in 1983, is sponsored by apex financial
institutions, namely the Industrial Development Bank of India (IDBI), the Industrial
Finance Corporation of India (IFCI), the Industrial Credit and Investment
10
Chapter 1: Introduction
Corporation of India (ICICI) and State Bank of India (SBI). EDI has been
spearheading entrepreneurship movement throughout the nation with a belief that
entrepreneurs need not necessarily be born, but can be developed through well
conceived and well directed activities. One of the aims of EDI is developing and
disseminating new knowledge and insights in entrepreneurial theory and practice
through research.
The State Industrial & Investment Corporation Of Maharashtra Limited (SICOM) is
the premier financial institution located in Mumbai, dedicated to catalyzing
development in the Industry, Services and Infrastructure sectors in India by
providing tailor-made financial solutions and advisory services to entrepreneurs,
companies in the private and public sector and Government bodies. It was
established in 1966, by the Govt. of Maharashtra.
In October 2006 a new act (Act 27 of 2006) entitled the Micro, Small and Medium
Enterprises Development Act 2006 was passed by Parliament and came into effect
from 1st October 2006.
The Act provides for facilitating the promotion,
development and enhancing the competitiveness of micro, small and medium
enterprises. (SME World, 2006).
The growth of the Small Scale Industries was however, uneven till perhaps the last
decade. Changes in the economic environment resulting from rapid scientific and
technological advancement particularly in the field of ICT (Information and
Communication Technology) and globalisation have provided both opportunities
and challenges for entrepreneurs. The challenges of stiff global competition are
offset by the steep increase in outsourcing by large companies, direct marketing
using the Internet, being able to work from any location and the possibility of
computer supported cooperative work. In a short span of time, the emergence of
large-scale outsourcing, decoupling of work from employment, home based
workers and the popular phenomenon of SOHO (small office-home office) enabling
working from home, have emerged (Mukherjee, 2000) Global economic forces
have created and nudged remote processing towards India and with it a large
employment and entrepreneurial opportunity. Together these forces have resulted in
11
Chapter 1: Introduction
the ‘birth’ of a very large number of entrepreneurs to meet virtually every type of
demand.
The last two decades have shown the importance and the relevance of the field of
entrepreneurship. It is not important in isolation. Its importance is part of the global
change that is affecting the way we live and work (Stevenson, 2000).
1.2 Information
Definition
Information is a difficult word to define. According to the Webster’s dictionary
information may be news, data, fact, intelligence or knowledge. The word is
specifically derived from the Latin word ‘in formare’ which signifies to put into
form, to create an idea or emotion, to present or represent. This etymological
definition helps in distinguishing between three related concepts viz. data,
information and knowledge.
Information is derived from data and may need to be further processed before it can
become knowledge. Data are language, mathematical and other symbolic surrogates
which are generally agreed upon to represent people, objects, events, and concepts.
In this sense data can be considered as an uninterpreted raw statement of fact; it may
exist in numerical, text, voice or image form.
Information, on the other hand can be defined as data, which is recorded, classified,
organized, or interpreted within context to convey meaning. The ALA Glossary of
Library and Information Science (1983) defines information as “all ideas, facts and
imaginative works of the mind which have been communicated, recorded, published
and distributed formally or informally in any format.”
Faibisoff and Ely (1976) define information as that which reduces uncertainty. It is that
which assists in decision-making. It may exist as data in books, computers, people,
files and thousands of other sources. These sources have to be considered simply as
raw data until they are used to solve uncertainties. What is called information is often a
12
Chapter 1: Introduction
random collection of data, which does not become information, until used by someone
to achieve a specific purpose.
Information Needs
Since library science became library and information science, ‘information’ has
become one of the focal points of study and research of the discipline. Various
aspects of information have been studied and researched, including information needs.
Through these researches, information is seen as something ‘more than facts’
involving the ideological, historical and cultural
context of the individual.
Knowledge is located neither in text nor in the individuals’ head but involves the
coconstruction of situated meanings and takes place in networks of artists and
artefacts (Kapitzke, 2003 cited by Tuominen, Savolainen & Talja, 2005).
Information needs are not something distinct like the need for food or water that is
easily recognized. They arise out of other basic physiological, affective and cognitive
needs. It is the situation in which people find themselves that gives rise to the need for
information. When individuals feel themselves stopped in a situation, when there are
gaps in their knowledge that prevent them from making sense of the situation, it is
then, that a conscious ‘information need’ is experienced (Dervin, 1983).
Dervin's ‘sense-making’ theory is one of the several cognitive models of information
need that have developed over a number of years. These include Belkin’s ‘anomalous
state of knowledge (ASK)’ (Belkin, 1982a, 1982b). The term sense-making is a label
for a coherent set of concepts and methods used to study how people construct sense
of their worlds and, in particular, how they construct information needs and uses for
information in the process of sense-making.
Information needs are defined as 1) conceptual incongruity in which the person’s
cognitive structure is not adequate to a task; 2) when a person recognizes something
wrong in his or her state of knowledge and wishes to resolve the anomaly; 3) when
the current state of possessed knowledge is less than needed; 4) when internal sense
13
Chapter 1: Introduction
runs out and 5) when there is insufficient knowledge to cope with voids, uncertainty
or conflict in a knowledge area (Dervin, 1986).
The sense-making approach is implemented in terms of four constituent elements, a
situation in time and space which defines the context in which information problems
arise, a gap which identifies the difference between the contextual situation and
desired situation, an outcome that is the consequence of the sense-making approach
and a bridge or some means of closing the gap between situation and outcome.
These elements are presented in terms of a triangle: situation, gap / bridge, and
outcome (Figure 1.1).
The use of ‘three’ dimensions has been seen as particularly appropriate both in the
realm of practice as well as research because it involves ‘triangulating’ subjectivity.
The idea is that since different people create sense differently, when one attempts to
understand the sense made by another, it is useful to assess three points as a minimal
basis for co-orienting (Dervin, 1983; 1998).
Figure 1.1: Dervin's Sense-making Framework
GAPS
What’s missing in your understanding?
What are you trying to find out?
What would you like to know?
SITUATIONS
OUTCOMES / USES
What happened?
What got you stopped?
What are you working on?
What brought you here today?
What would help you?
How do you plan to use this?
What are you trying to do?
(Source: Wilson, T.D. (1999). Models in information behaviour research. Journal of Documentation,
55, 249-270.)
14
Chapter 1: Introduction
Information Seeking
Gaps in our knowledge are often cited as factors that motivate people to seek more
information (Cooper, Folta, & Woo, 1995). Along with the concept of information
needs, the relative concept of information seeking also developed. Marchionini
defines information seeking as "a process in which humans purposefully engage in
order to change their state of knowledge” (Marchionini,1995). Information seeking
behaviour is an activity of an individual that is undertaken to identify a message that
satisfies a perceived need. It is defined as goal-seeking behaviour, the goal being the
resolution of the problem. A stage process is postulated, in which the individual
proceeds from the identification of a problem for investigation (or has such a
problem thrust upon him), through the definition of the problem, to its resolution and
the presentation of the solution. At each stage it is suggested that some uncertainty or
gap, which originally drove the search for information, is resolved. However, the
search for information may not fully resolve uncertainty and, therefore, successive
searches within the same stage may be necessary, or the search may increase
uncertainty and the individual may have to return to an earlier stage to resolve that
uncertainty. The general model is shown in Figure 1.2.
Figure 1.2: Problem Solving Model
Uncertainty
Resolution
Problem
identification
Uncertainty
Resolution
Problem
definition
Problem
resolution
Uncertainty
Resolution
Solution
Statement
(Source: Wilson, T. D. (1999). Models in information behaviour research. Journal of
Documentation, 55, 249-270.)
15
Chapter 1: Introduction
Wilson developed a model, linking various information related concepts (Figure 1.3).
He suggests that information-seeking behaviour arises as a consequence of a need
perceived by an information user, who, in order to satisfy that need, makes demands
upon formal or informal information sources or services, which results in success or
failure to find the relevant information (Wilson, 1999; 2000). The model also shows
that a part of information seeking behaviour may involve other people through
information exchange and that information perceived as useful may be passed to
other people, as well as being used by the person himself or herself.
Figure 1.3: Wilson's Model of Information Behaviour
Information user
Satisfaction or
non-satisfaction
Information use
Need
Information seeking
Behaviour
Demands on
Information system
Success
Information
exchange
Demands on other
information sources
Failure
Other
people
Information
transfer
(Source: Wilson, T. D. (1999). Models in information behaviour research. Journal of Documentation,
55,249-270.)
The various models given have been used in different empirical studies and
information needs and information-seeking behaviour of different user groups have
been researched on. Entrepreneurs are an upcoming group whose information needs
and information-seeking behaviours warrant further consideration.
16
Chapter 1: Introduction
1.3 Entrepreneurs and Information
Information is a key resource for any new venture. Entrepreneurs gather information
to assist them in identifying key opportunities and assembling the resources
necessary to conduct the business they have chosen. The entrepreneurial informationgathering process has been described as “an iterative process in which they learn
about the proposed business and the process of entrepreneurship as they proceed”
(Cooper, Folta & Woo, 1995).
Entrepreneurs in different situations need information inputs in planning,
implementing, monitoring or reviewing schemes, projects and programmes. The
purpose, for which information is required, varies. There may be an immediate need
for information to understand the situation one is in, to convince and persuade others,
and to use the opportunities available. Without being conscious of the need,
individuals in a situation may gather information, which would either prevent a
problem situation in future or help one to make the most of it.
Information needs and information-seeking behaviours are a result of the individual
with all of his/her variables as he/she is a member of a certain set of people working
in a certain context with all of its inherent rules and resources (Lillard,2002).
Entrepreneurs, combining in themselves the roles of innovators, technologists and
managers need and use information for all these functions.
Successful generation of ideas for new products and services require a base of
reliable information. One model of idea generation (Figure 1.4) ( Pruthi and Nagpal
1978, cited by Gupta 1981) includes :-1. A certain level of information in the mind of a scientist.
2. Existence of the problem situation and its recognition by the scientist.
3. The ability to relate the information to the problem.
4. A trigger which gives a quantum jump to his information level and makes it
critical.
17
Chapter 1: Introduction
This trigger may be provided externally by an encounter with literature,
experiment and analysis or interaction with a scientist inside or outside the group.
Alternatively it may be provided internally by his own thinking process (Gupta,
1981). Gupta says that 70 % of idea generation is triggered by need recognition
while 30 % is by opportunity recognition.
Figure 1.4: Fusion Model of Idea Generation
Information
Information
Perception of
Need
Recognition of
Opportunity
Problem
(Question)
Solution
(Answer)
Fusion
Innovative
Idea
(Source: Gupta, B.M (1981) Information communication and technology transfer. Annals of Lib Sc
and Doc, 28(1-4), 1-13)
Information thus plays a critical role in idea generation. It is also an important aspect
at the time of business start-up. Creating and maintaining a new business is
obviously a very risky and uncertain activity. Business start-up has been depicted as
a time of chaos and uncertainty. Research findings suggest that people seek
information from a variety of sources when faced with risk or uncertainty (Yeoh,
2000). Information plays a key role in the successful creation and maintenance of
18
Chapter 1: Introduction
fledgling businesses (Lillard, 2002). Nelson (1987), for example, argues that
entrepreneurs usually need information during this period of economic turmoil.
Lack of experience (Cooper et al., 1995) and lack of technical and business skills
(Gnyawali & Fogel, 1994 cited by Lillard 2002.) are proven deterrents to successful
creation and maintenance of a new business. To resolve or face the start-up situation,
entrepreneurs need and use vital information.
By the very definition of the word, entrepreneurs put to use, their ‘technical’
knowledge, to create a product or service. This ‘technical’ knowledge may range
from ‘high tech’, such as that required for construction of complex engineering
products to ‘low tech’, such as that required for production of day-to-day food
products. Whatever the level of technicality, knowledge implies internalisation of
information, acquired through formal education, experience and observation.
Technical knowledge also needs to be continuously modified in the light of new
developments, new situations and new needs.
After the establishment of the business, the entrepreneurs take on the role of a
manager. There are different ways of describing the manager's work. The traditional
identification of the functional responsibilities of planning, organizing, staffing, etc.
can be translated into different managerial activities which can be linked to
informational behaviour; e.g. planning may require different information from
different sources than staffing would; budgeting may require more current and
accurate information than coordinating.
An alternate way of classifying managerial activities suggested by John Kotter is that
agenda setting and network building are the two main activities of the manager.
Agenda setting requires information about goals, strategies and priorities; it involves
continuous information seeking about different subjects from a wide range of
sources. In order to further their agendas, managers ‘grow and feed’ an interrelated
network of cooperative relationships. These networks are created and maintained
through various interactions, often oral and face-to-face, in which both business and
non-business topics are discussed. The people in the network can include people
19
Chapter 1: Introduction
from inside and outside the organization in all relevant functional areas and at all
levels, both formal and informal (Kotter,1982).
One of the clearest articulations of the functions of the manager, from the
information point of view is by Mintzberg (1973, cited by Kroenke, 1992). His
studies indicated that management had 10 roles to play and that these could be
grouped into 3 broad interlocking categories (Figure 1.5).
Figure 1.5: Managerial Roles
1. Interpersonal Roles
a) Figurehead
b) Leader
c) Liaison
2. Informational Roles
a) Monitor
b) Dissemination
c) Spokesperson
3. Decisional Roles
a) Entrepreneur
b) Disturbance Handler|
c) Resource Allocation Role
d) Negotiator
(Source :Kroenke,David. (1992). Management Information System.
New York : McGraw Hill. 119-132).
In terms of the importance of information to these three sets of roles, the second is
directly connected with communication of information while the third set is
substantially dependent on utilization of information.
The activities undertaken, as a manager plays his informational roles, include seeking
and collecting information from both within and outside the organization to monitor
and steer it. Information is to be disseminated to colleagues, subordinates and
superiors within the organization and to agencies outside. Formal reports and
processed data have also to be conveyed to outsiders by the manager who thus acts as
a spokesperson of the organization (Mintzberg, 1973).
20
Chapter 1: Introduction
The monitoring role of the manager as described above has become more critical in
today’s fast changing world. The ways by which managers collect information about
the external business environment is referred to as environmental scanning. Aguilar
defined it as "Scanning for information about events and relationships in a company's
outside environment, the knowledge of which would assist top management in its
task of charting the company's future course of action"(Aguilar 1967).
Environmental scanning is a continuous process.
Aguilar divides sources into personal (which communicate information personally to
the executive) and impersonal (which communicate information to broad audiences
or through normalized, group communication activity) and also as internal or
external, giving rise to four categories (Figure 1.6). Aguilar found that personal
sources were far more important than impersonal sources. Keegan observed that for
multinationals outside sources were more important than inside ones (Keegan, 1974).
Figure 1.6 : Information Sources Used in Environmental Scanning.
External Personal Sources
Customers
Competitors
Business/Professional Associates*
Government Officials
External Impersonal Sources
Newspapers, periodicals,
Government publications
Broadcast media (radio, TV)
Industry/Trade Associations
Conferences, trips
Internal Personal Sources
Superiors, Board members
Subordinate managers#
Subordinate staff#
Internal Impersonal Sources
Internal memos, circulars
Internal reports, studies
Company Library
Electronic information services@
* Includes suppliers, distributors, bankers, lawyers, financial analysts, consultants,
other CEOs, etc.
# Includes sales persons.
@ Newswires, online databases, electronic news bulletin boards etc.; classified as
internal because they are directly accessed from within the organization.
(Source: Aguilar, F. J. Scanning the business environment. New York : Macmillan, 1967.)
The core of a manager's work is decision-making. Decision-making has been defined
as ‘the process of converting information into action’. This definition emphasises the
vital role of information in management. The classical model of decision-making
21
Chapter 1: Introduction
emphasises the need for data and information in making the right choice. This model
presumed that the specification and analysis of information precedes decisionmaking. The model of is based on rationalization and assumes that the decision
maker can and will engage in a thorough search for all relevant information. The
totality of the information needed and the thoroughness of the search process makes
this model of decision making impossible in most real circumstances (Simon, 1976
cited by Lillard, 2002). Managers therefore resort to methods to cope with the
situation by putting realistic bounds on their searching.
Research by McKenny and Keen (1974) on the workings of managers’ minds has
categorized cognitive styles along two dimensions (Figure 1.7), information
gathering and information evaluation. "Information gathering essentially relates to
the perceptual processes through which the mind organizes the diffuse verbal and
visual stimuli it encounters”. The authors identify two styles of information gathering
viz. perceptive and receptive. Perceptive individuals filter information by the use of
precepts, that is, internalised concepts and expectations. They look for relationships
between data and test information by its degree of congruity to their precepts. On the
other hand, receptive individuals are sensitive to all stimuli and tend to focus on
details rather than relationships.
The information evaluation dimension refers to processes commonly classified under
problem solving. Two styles of evaluation are proposed, viz. systematic and intuitive.
Systematic individuals tend to impose on problems a structure or method which they
expect will provide a solution, whilst intuitive ones are more likely to use trial and
error methods, discard data and act in unpredictable ways. The two dimensions can
be plotted in a matrix to yield four composite styles of information gathering and
evaluation.
Figure 1.7:Information Gathering and Information Evaluation
Information Evaluation
Systematic Intuitive
Information
Gathering
Perceptive
Receptive
(Source: McKenny J. L.& Keen, P. G. W.(1974). How managers' minds work.
Harvard Business Review , 74(3), 79-91).
22
Chapter 1: Introduction
Research suggests that different managerial occupations match these styles; thus a
production manager is likely to be systematic and perceptive, whilst an advertising
manager is more likely to be intuitive and receptive.
1.4 The Present Study
Rationale
Searching for information is cited as a prime task for entrepreneurs (Cooper, et al.,
1995), although “there is some consensus that small businesses are not being well
served in either the efficient use of information or in the provision of access to
pertinent information” (Glynn & Koenig, 1995).
The role of information in idea generation, facing uncertainty and decision making
has been well recognized. If it is recognized that entrepreneurs have a major
contribution to play in India’s growing economy, it is essential that supportive
services to facilitate their growth be provided. This includes not only capital and
labour but also information and ideas. Without an understanding of informationseeking and use in an ever-changing information world, design of useful information
systems and reasonable utilization of information is not possible (Vakkari,
Savolainen, & Dervin, 1997). It is necessary to understand the information needs of
entrepreneurs and their search behaviour as a prerequisite to developing appropriate
services. Providing value-added information to this group in a volatile and rapidly
changing economic and information environment will be a major challenge before
the library and information science professionals in India. Very little is known of the
information behaviour of the Indian entrepreneur and work needs to be done in this
field. The present study was an attempt undertaken to fill this lacuna. It focuses on
the nature of information needed by entrepreneurs and the sources used by them.
23
Chapter 1: Introduction
Objectives
The objectives of the present study on ‘Information Needs Analysis and InformationSeeking Behaviour of Entrepreneurs: With Special Reference to Women’ were to
find out:-
The information needs of entrepreneurs, i.e. the types of information that they
require for their work.

The sources of information used - documentary, institutional or human.

Difficulties, barriers and constraints experienced in gathering information for
their work.

How they kept up to date in their field of work.

If there was any difference in the information needs and information seeking
behaviour of men and women entrepreneurs.

If there was any difference in the information needs and information gathered
due to differences in educational levels, types of business, years of experience,
level at which their business was, etc.
Scope
The scope of the study included only first generation entrepreneurs who were
responsible for setting up the business all by themselves or in partnership with
relatives, friends or spouse. These businesses could include production and
manufacture, trade, office and support services, and others. They included SOHOs,
home based workers, individuals who had taken advantage of the outsourcing
opportunities and those who wanted to innovate and create new products and
services. The study was limited to Pune city. In recent years, Pune has developed as a
technology hub. The business environment, the presence of educational and research
institutions of repute and the availability of infrastructure have provided a conducive
atmosphere for the growth of entrepreneurship. Entrepreneurs in different fields are
flourishing with support from government and semi government agencies.
Professionals such as doctors, chartered accountants and lawyers were deliberately
excluded in this study since their information needs are highly focussed.
The present study examined the types of information needed, the information sources
used and the ways used to keep up to date to determine how this population locates
24
Chapter 1: Introduction
and uses information. Being one of the first studies in this area, there were several
issues it did not cover. It did not look at the quality of information used or the
timeliness of information. Neither did it look at how the information was finally
used. It must also be noted that the cognitive information gathering and evaluation
styles were also not covered.
This chapter has provided an introduction to the study, elaborating the basic concept,
background and rationale of the study. It has spelt out the objectives and scope of the
research. Chapter 2 reviews the available literature that guides the study while the
following chapter gives the research methodology, the sample population, and the
techniques used to collect data. Chapter 4 presents the data collected and its analysis
and interpretations. Chapter 5 presents some case studies of the entrepreneurs
interviewed. The final chapter summarises the study and recommends areas for
action and further research.
25
Chapter 1: Introduction
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