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Entrepreneurship: Definition, Types, and Motivational Factors

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Entrepreneurship: Definition, Types, and Motivational Factors

Definition

The word entrepreneurship has been derived from a French root which means ” to undertake”. It is also called by various names, e.g. adventurism, risk taking, thrill seeking, innovating, etc.

According to Higgins, ” Entrepreneurship is meant the function of seeking investment and production opportunity, organizing an enterprise to undertake a new production process, raising capital, hiring labor, arranging the supply of raw materials, finding site, introducing a new technique and commodities, discovering new sources of raw materials and selecting top managers of day-to-day operations of the enterprise.

Jaffrey A. Timmons has defined entrepreneurship as “the ability to create and build something from practically nothing. Fundamentally, a human creative activity, it is finding personal energy by initiating, building and achieving an enterprise or organization rather than by watching, analyzing or describing one. It requires the ability to take calculated risk and to reduce the chance of failure…..”

According to A.H.Cole “entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain or aggrandize profit by production or distribution of economic goods and services.”

Characteristics and Significance

A Function of High Achievement: People having high need for achievement are more likely to succeed as entrepreneurs, according to McClelland. Motive is high achievement and profit  is merely a measure of success and competency.

Innovation: According to Schumpeter, entrepreneurship is a creative activity. An entrepreneur is basically an innovator who introduces something new into the economy.

Organization Building Function: According to Harbison, Organization Building skill means the ability to ” multiply oneself” by effectively delegating responsibility to others.

A Function of Managerial Skills and Leadership: Managerial skills and leadership qualities are more important than financial skills

A Function of Status Withdrawal: According to Hagen,” Creative innovation or change is the fundamental feature of economic growth. He describes an entrepreneur as a creative problem solver interested in things in the practical and technological realm.

Types of an Entrepreneur

Innovating Entrepreneur:

Aggressive in experimentation and clever in putting attractive possibilities into practice.

Adoptive or Imitative Entrepreneurs:

They adopt best practices. Imitative entrepreneurs are revolutionary and important.

Fabian Entrepreneurs:

Drone Entrepreneurs:

Against any change in production method even at the cost of losses.

Forced Entrepreneurs:

They become entrepreneurs on account of    circumstances

Functions of an Entrepreneur

Perceiving market opportunities

Gaining command over scarce resources

Managing human relations within firms

Marketing of the products

Responding to the competition

Dealing with bureaucracy

Managing finance

Upgrading process and product quality

Managing costumer and supplier relations

Introducing new production techniques and products

Risk Taking

Organization and management

Qualities of a good entrepreneur

According to McClelland:

An unusual creativeness

A propensity of risk taking

A strong need for achievement

According to Prof. Tandon :

1. Capacity to assume risks

2. Technical Knowledge and willingness to change

3. Ability to marshal resources

4. Ability of organization and administration

According to more than fifty research studies:

  1. Total commitment, determination and perseverance
  2. Drive to achieve and grow
  3. Opportunity and goal orientation
  4. Taking initiative and personal responsibility
  5. Persistent problem solving
  6. Realism and sense of humor
  7. Seeking and using feedback
  8. Calculated risk taking and risk seeking
  1. 9.   Low need for status and power

10.  Integrity and reliability

11.  Capacity to work hard

12.  Self Motivation

13.  Vision and foresight

14.  Sound Judgment

15.  Flexibility and sociability

16.  Persistence in the face of adversity

17.  Will to conquer and impulse to fight

Entrepreneurial Motivation Factor

Educational background

Occupational Experience

Desire to work independently

Desire to branch out to manufacturing

Family background

Assistance from Government

Assistance from financial institution

Availability of technology/raw material

Profit margin

Desire for taking personal responsibility

Anticipation of future possibilities

Success stories of entrepreneurs

To gain social prestige

Heavy Demand

Technical knowledge

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Source by Ajay Kumar Sharma

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