Date post: | 04-Apr-2018 |
Category: |
Documents |
Upload: | charu-modi |
View: | 222 times |
Download: | 2 times |
of 21
7/30/2019 Theories of Entrepreneurship Final
1/21
1
7/30/2019 Theories of Entrepreneurship Final
2/21
Classification
Theory
Economic
principles
Psychological
principles
Sociological
principles
2
7/30/2019 Theories of Entrepreneurship Final
3/21
An economic theory
Given by Mark Casson in his book The Entrepreneur
AnEconomic Theory
Demand for entrepreneurship arise from the need to changeand the supply of entrepreneurship is limited.
Four Qualities of Entrepreneur
1. Judgmental decisions.2. Co-ordination of Scarce resources.
3. Motivated by Self Interest.
4. Imaginationentirely innate.
3
7/30/2019 Theories of Entrepreneurship Final
4/21
Risk bearing theory of Knight
Prof. Knights theory is based on economic principles .
According to Risk Bearing theory1. Entrepreneur earns profits because he undertakes risk
2. The main function of an entrepreneur is to act in anticipation offuture events.
3. Uncertainty-bearing is essential to production; therefore it is factorof production and the reward for it is a part of normal cost ofproduction.
4. Profit is a payment for the assumption of risks the entrepreneurundertake.
4
7/30/2019 Theories of Entrepreneurship Final
5/21
Evaluation of Knights Theory Entrepreneur has to cope up with the various
challenges which is at once unknown andunpredictable i.e. there lies uncertainty.
5
7/30/2019 Theories of Entrepreneurship Final
6/21
Innovation theory of Schumpeter(1949)
Entrepreneur is a man who sees opportunity for
introducing new techniques or commodity Improving organization.
Development resources. Entrepreneur embarks upon new combination of factors of production
resulting in new product--termed as innovator.
Entrepreneur is Dynamic
6
7/30/2019 Theories of Entrepreneurship Final
7/21
Type Of Innovations The introduction of new product.
The introduction of new method of production
The opening of new market
The conquest of new source of raw material supply. Reorganization of any industry.
7
7/30/2019 Theories of Entrepreneurship Final
8/21
Features of Schumpeter Theory High degree of risk and uncertainty in Schumpeterian World.
Highly motivated and talented individual.
Profit is merely a part of objectives of entrepreneurs.
It is leadership rather than ownership which matters.
8
7/30/2019 Theories of Entrepreneurship Final
9/21
Leibenstein X-efficiency theoryWhen an input is not used effectively the difference between the
actual output and the maximum output attributable to that input ismeasure of Degree of XEfficiency.
Types of Entrepreneurship Routine entrepreneurship
Innovational entrepreneurship
Role of Entrepreneurship Input completion Gap filling
Entrepreneurs must be able to perceive1.buying and selling opportunities in different markets.2.the possibility of transforming input into output3.determine the profitable activities
9
7/30/2019 Theories of Entrepreneurship Final
10/21
Evaluation ofLeibensteins theory
It analyzes role of entrepreneur in terms of efficiency.
This theory shows that a firm will achieve maximumefficiency when the firm minimizes its cost.
10
7/30/2019 Theories of Entrepreneurship Final
11/21
Harvard School theory Given by Cole (1949)
Envisages (predict)entrepreneurship as purposeful activity thatinitiate, maintain and develop a profit oriented business.
Focus on two activities
--co-ordination of activity--sensitivity to the environment.
11
7/30/2019 Theories of Entrepreneurship Final
12/21
HBS ( Harvard Business School) consider entrepreneurship is theoutcome of the combination of internal and external Forces.
Internal forcesIndividuals traits and qualities viz : Intelligence Skill Knowledge Intuition Exposure & Experience
External forcesSurroundings conditions viz : Economic Political Social & Cultural Legal frame-work Stable Govt. External security, law & order and legal process are the
influencing factors.
7/30/2019 Theories of Entrepreneurship Final
13/21
McClellands Achievement Motivation
Theory
This is a psychological theory.
Developed by David Mc Clelland as an Achievement motivation theory.
Mc Clelland proposed that there are three major needs or motives forpersonnel accomplishments. They are as follows:
1. The need for achievement(nAch)
2. The need for affiliation(association).(nAff)
3. The need for power.(nPow)
Implications of Motives Need for affiliation and need for power are driving force towards
entrepreneurship.
High level of achievement makes an entrepreneur.
Dreams of entrepreneur appear to be not to getrich but to getbig.
13
7/30/2019 Theories of Entrepreneurship Final
14/21
View of McClellands theory
1. Entrepreneurs are motivated by strong need forachievement.
2. To improve the condition of poor countries
entrepreneurs are to be increased.
14
7/30/2019 Theories of Entrepreneurship Final
15/21
Evaluation of McClellands theory It produced reason for difference in economic condition of
rich and poor countries or developed and underdevelopedcountries.
It called the nations leaders to build up ambition into the
minds of the young people.
15
7/30/2019 Theories of Entrepreneurship Final
16/21
Theory of Change
Propounded by Young after conducting TAT(Thematic AppreciationTest).
According to it entrepreneurs have tendency to
i. Describe situation as problem to be solved
ii. Awareness of effort required
iii. Confidence in their own ability to solve the problemiv. Analyze the situation before decision making.
16
7/30/2019 Theories of Entrepreneurship Final
17/21
Theory of change is based on society's incorporation ofreactive subgroups.
According to it group becomes reactive when following
three conditions coincide..a) When a group experiences low status recognition.
b) When denied to access to important social networks
c) When the group has better institutional resources
than other groups in society at the same level.
17
7/30/2019 Theories of Entrepreneurship Final
18/21
Theory of Adjustment of Price
Given by Kirzner.
According to him entrepreneur has followingcharacteristics
Adjustment of price is the main role of entrepreneur. Entrepreneur are unpredictable.
Evaluation
This theory lays stress on the behavior of the entrepreneurand its quality of grabbing opportunities in the market.
18
7/30/2019 Theories of Entrepreneurship Final
19/21
Theory of Personal Resourcefulness
Personal resourcefulness is the belief in ones owncapability for initiating actions directed towardscreation and growth of enterprise. Thus, it emphasize
on initiative rather than reaction.
19
7/30/2019 Theories of Entrepreneurship Final
20/21
Theory of Cultural Values
Propounded by Thomas Cochran.
Entrepreneurs are not super normal individual but they are societysmodel personality.
Performance of entrepreneur influenced by these factors:i. His own attitude towards his own occupation .
ii. Operational requirement of job.
20
7/30/2019 Theories of Entrepreneurship Final
21/21
Thank you
21