Psychological theories of entrepreneurial motivation
Answers
1. ECONOMIC AND PSYCHOLOGICAL THEORIES OF ENTREPRENEURIAL MOTIVATION PRESENTATION BY:- Bhashkar Upadhyay Mohit Garg Ritu Jha
2. Entrepreneurial Motivation Entrepreneurial Motivation is the drive of an entrepreneur to maintain an entrepreneurial spirit in all their actions. TWO TERMS:- ENTREPRENEURIAL. MOTIVATION.
3. Defining Motivation Internal and external factors that stimulate desire and energy in people to be continually interested and committed to a job, role or subject, or to make an effort to attain a goal. Motivation refers to the states within a person or animal that drives behaviour toward some goals. - MORGAN AND KING
4. Theories of Entrepreneurial Motivation • Sociological Theories • Economic Theories • Psychological Theories • Cultural Theories • Motivational Theories
5. Economic Theory • Entrepreneurship and economic growth take place when the economic conditions are favourable • Economic incentives are the main motivators for entrepreneurial activities • Economic incentives include taxation policy, industrial policy, sources of finance and raw material, infrastructure availability, investment and marketing opportunities, access to information about market conditions, technology etc.
6. Innovation Theory by Schumpeter Joseph Schumpeter (1934) According to him, process of innovation in entrepreneurship may be in the form of- Introduction of new product Use of new method of production Opening of new market Conquest of new source of supplying raw material New form of organization
7. Continued.. • Innovation in the form of – new ideas, – new products, – new methods/ functions, – opening new market, – capture of new source of raw materials, – carrying out new organization • Schumpeter’s concept of innovation includes element of risk taking, coordination.
8. Continued.. However, if innovation is absent, presence of rest of the elements cannot make Entrepreneur Entrepreneurship is an initiative taken to go beyond the existing way of life But, there is a difference between Inventor and Innovator Criticism: • This theory assumes existence of capitalist society, with private property, private initiative, money and banking system, etc. • Applicability and success of this theory becomes doubtful in under developed country
9. Psychological Theory • Entrepreneurship gets a boost when society has sufficient supply of individuals with necessary psychological characteristics • The psychological characteristics include need for high achievement, a vision or foresight, ability to face opposition • These characteristics are formed during the individual’s upbringing which stress on standards of excellence, self reliance and low father dominance
10. Psychological Theory • He emphasis on two factors- Innovation and Resources. • Innovation is an instrument of entrepreneurship. • Drucker is of the opinion that entrepreneurs need not be owners of their businesses. A professional manager who mobilizes resources and allocates them to make a commercial gain from an opportunity is also an entrepreneur.
11. • Material is converted into resources and are combined in a new or more productive configuration • Entrepreneurship is the practice which has knowledge base. • Entrepreneurship is equally important to small business and non- economic institutions.
12. Psychological Factors • Need for Achievement • Need for Influencing Others • Sense of Efficiency • Risk Taking Behaviour • Self-introspection • Hope of Success