Entrepreneurship Theories

Topics: Entrepreneurship, Joseph Schumpeter, Entrepreneur Pages: 2 (270 words) Published: December 4, 2012
Several theories have been developed to explain entrepreneurial behavior and motivating factors. 1). Psychological theories – As those developed by McClelland pay attention to personal traits, motives and incentives of an individual and conclude that entrepreneurs have a strong need for achievement. According to this theory, entrepreneurship get a boost when there are sufficient supply of individuals with certain psychological characteristics such as need for achievement self-reliance and risk taking. Some of the characteristics are formed during ones early upbringing. -A similar focus is found in locus of control theories

-To overcome obstacles and attain a high standard.
-High – risk taking propensity connected with need to overcome obstacles. -Tolerance of ambiguity – associated with ‘to accomplish something difficult. -High needs for autonomy dominance and independence coincide with to master manipulate or organize. -Capacity for endurance

-Need for independence – to rival and surpass others.
In analyzing entrepreneurial behaviour – pay attention to expectations, motive and incentives. 2). Sociological Theories
Start from ethnic identification sociological (disadvantageous) background as one of the decisive “push” factors to become an entrepreneur. According to this theory, entrepreneurship is likely to get a boost in a particular social-cultural background. Society’s values, religious beliefs, customs, taboos influence the behavior of individuals.

3). Economic Theory
Entrepreneurship and economic growth take place when the economic conditions are favorable. -Economic incentives are the main motivators for entrepreneurial activities. -Economic incentives include taxation policy industrial policy source of finance and raw material infrastructure availability investment and marketing opportunities access to information about market condition technology etc. -Entrepreneurship...
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