APPLICATION OF PSY IN ECONOMIC DEVELOPMENT
Q. ENTREPRENEUR SYNDROME? CORRECTIVE MEASURES? COMPONENT
OF ENTREPRENEUR SYNDROME?
Entrepreneur syndrome,
Entrepreneur syndrome is common where a person who has built a very large and
successful business and during the process is forced, by the sheer volume of work,
to employ people. The fun starts to go when they become more involved in
managing people, dealing with banks and are removed more from the day to day
operation of the business. This can create a feeling of loss or irrelevance. Loss, even
though they still own the business and are enjoying a well above average income
from their success.
Some reconcile themselves with their situation and remain attached but not involved.
Other may sell, take the rewards and leave. Many stay and watch the business begin
to decline.
This latter group will jump back in and with great vigor begin to rebuilt the business.
When the actions, of this last group, are analyzed we notice two key traits. There are
many others but these are the two most prominent.
First they employ the wrong people and get upset when they do not do what they
want them to do. Second they sabotage their business by over riding their
employee's decisions, making changes to the business without consulting the
management, alienating customers and a number of other actions that shrink the
size and viability of the business.
In the end of the day they will say something like this. "The business got into trouble
because we had the wrong people. I got back in and was successful in re-building it".
Various Psychological Factors that affecting entrepreneurship
development
The Concept of Entrepreneurship
Marketing
The concept of entrepreneurship has a wide range of meanings. We are
conscious that entrepreneurship is regarded as one of the four major factors
of production, the other three being land, labor and capital. The most
understandable example of entrepreneurship is the starting of innovative
businesses.
The term ‘entrepreneur’ was first introduced in economics by the early 18th
century French economist Richard Cantillon. In his writings, he properly
defined the entrepreneur as the “agent who buys means of production at
definite prices in order to sell the produce at uncertain prices in the future”.
Since then a inspection of the usage of the term in economics shows that
entrepreneurship implies risk/uncertainty bearing; coordination of dynamic
resources; introduction of innovations; and the provision of capital.
Home Business Various Psychological Factors that affecting entrepreneurship development
BUSI NESS
Entr epr eneurship
Entrepreneurship is influenced by four distinct factors: economic development
culture, technological development and education. In areas where these
factors are present, you can expect to see strong and consistent
entrepreneurial growth.
Many entrepreneurial theorists have propounded theories of entrepreneurship
that concentrate especially upon psychological factors. These are as follows:
(1) Need Achievement
The most important psychological theories of entrepreneurship were put
forward in the early 1960s by David McClelland. According to McClelland
‘need achievement’ is a social motive to excel that tends to characterize
successful entrepreneurs, especially when reinforced by cultural factors. He
found that certain kinds of people, especially those who became
entrepreneurs, had this characteristic. Moreover, some societies tend to
reproduce a larger percentage of people with high ‘need achievement’ than
other societies. McClelland attributed this to sociological factors. Differences
among societies and individuals accounted for ‘need achievement’ being
greater in some societies and less in certain others.
The theory states that people with high need-achievement are distinctive in
several ways. They like to take risks and these risks stimulate them to greater
effort. The theory identifies the factors that produce such people. Initially,
McClelland attributed the role of parents, especially the mother, in mustering
her son or daughter to be masterful and self-reliant. Later he put less
emphasis on the parent-child relationship and gave more importance to social
and cultural factors. He concluded that the ‘need achievement’ is conditioned
more by social and cultural reinforcement rather than by parental influence
and such related factors.
(2) Withdrawal of Status Respect
There are several other researchers who have tried to understand the
psychological roots of entrepreneurship. One such individual is Everett Hagen
who stresses the psychological consequences of social change. Hagen says,
at some point many social groups experience a radical loss of status. Hagen
attributed the withdrawal of status respect of a group to the genesis of
entrepreneurship.
Hage believes that the initial condition leading to eventual entrepreneurial
behaviour is the loss of status by a group. He postulates that four types of
events can produce status withdrawal:
 The group may be displaced by force;
 It may have its valued symbols denigrated;
 It
may drift into a situation of status inconsistency; and
 It may not be accepted the expected status on migration in a new
society.
(3) Motives
Other psychological theories of entrepreneurship stress the motives or goals
of the entrepreneur. Cole is of the opinion that besides wealth, entrepreneurs
seek power, prestige, security and service to society. Stepanek points
particularly to non-monetary aspects such as independence, person selfesteem, power and regard of the society. On the same subject, Evans
distinguishes motive by three kinds of entrepreneurs.
 Managing entrepreneurs whose chief motive is security.
 Innovating entrepreneurs, who are interested only in excitement.
 Controlling
entrepreneurs, who above all otter motives want power and
authority.
Finally, Rostow has examined inter gradational changes in the families of
entrepreneurs. He believes that the first generation seeks wealth, the second
prestige and the third art and beauty.
Others
Thomas Begley and David P. Boyd studied in detail the psychological roots of
entrepreneurship in the mid-1980s. They came to the conclusion that
entrepreneurial attitudes based on psychological considerations have five
dimensions:
First came ‘need-achievement’ as described by McClelland. In all studies of
successful entrepreneurs, a high achievement orientation is invariably
present.
The second dimension that Begley and Boyd call ‘locus of control’ This means
that the entrepreneur follows the idea that he can control his own life and is
not influenced by factors like luck, fate and so on. Need-achievement logically
implies that people can control their own lives and are not influenced by
external forces.
The third dimension is the willingness to take risks. These two researchers
have come to the conclusion that entrepreneurs who take moderate risks earn
higher returns on their assets than those who take no risks at all or who take
extravagant risks.
Tolerance is the next dimension of this study. Very few decisions are made
with complete information. So, all business executives must have a certain
amount of tolerance for ambiguity.
Finally, here is what psychologists call ‘Type A’ behaviour. This is nothing but
“a chronic, incessant struggle to achieve more and more in less and less of
time” Entrepreneurs are characterized by the presence of ‘Type A’ behaviour
in all their endeavours.
Psychological Burdens of Being an Entrepreneur
1. Accountability
Everything that goes wrong is going to be your fault -- or at least, that’s
how it’s going to seem. As the leader of your organization, you’re the one
making the final call on most decisions, and you’re the one who will be
most affected (whether positively or negatively) by those decisions’
outcomes. Making too many decisions can increase your levels of stress,
and increased stress can lead to poor decision making, so you may get
caught in a relentless cycle of stress and decisions, a study by the National
Institute of Occupational Safety and Health reported.
2. Financial stress and uncertainty
There’s no such thing as a “typical” startup; some of these businesses are
able to get off the ground with almost no investment, while others spend
millions of dollars before they go live. Still, the Small Business
Administration estimates that the average startup requires at least
$30,000 to get going, and if you're the entreprepreneur starting the
business, you may have to dip into your savings or accumulate debt you’re
personally liable for.
On top of that, you’ll probably have to quit your day job to commit fulltime to your new business, and it’s unlikely that you’ll generate revenue
right away. You’ll need to survive at least a few months without any income.
And you'll have to do this based on a business plan you’re only marginally
confident will eventually yield produce a steady stream of revenue.
Related: 5 Personal Obstacles That Limit Your Success
If you have a family, or are investing significant personal savings, the
financial stress can be nightmarish.
3. Reluctance to trust
No entrepreneur builds a business alone, but even if you surround yourself
with the best employees you can find, you might find it hard to trust them
to take care of your baby. Still, you’re going to have to if you want the
business to grow.
You’ll need to delegate tasks, entrust entire departments to other
people and depend on your partners and vendors to have your back. On
top of that, you’ll need to listen to the advice of mentors and other
entrepreneurs if you want a fuller perspective on the issues you’ll face -and those people won't always going to tell you what you want to hear.
Ultimately, the decisions and direction will be up to you, but you’ll still need
to relinquish some control over what may be the most important project of
your life.
4. Work-life balance
When you take on the role of an entrepreneur, everything else takes a back
seat. You'll be passionate and genuinely excited about your idea, and for
the first few months, the long hours and weekends of work will
be satisfying. But then, even though you can set your own hours, you'll fall
deeper into the demands of the entrepreneurial lifestyle.
You'll see your family and friends less, you'll get only a few hours of sleep
every night, and you'll end up skipping meals, eating junk food and falling
back on some bad habits to keep yourself going. To make matters worse,
as your health declines, you'll find it harder to resist problems like
depression and burnout.
5. Loneliness
It’s not often talked about, but entrepreneurship is incredibly lonely. On top
of working long hours and being away from friends and family members,
you won’t feel connected to the people around you. You’ll have to be the
"boss" and the consummate professional to all the coworkers you consider
a kind of family. And you won’t be able to show a moment of weakness -even if your company is on the brink of collapse.
You won’t have many, if any, peers, and regardless of whether you’re
successful or not, you won’t make a lot of friends along the way. You'll have
professional contacts, perhaps, but not friends. That deep loneliness will
complicate all the other psychological b
Psychological Factors Affecting
Entrepreneurship
Updated on: February 21, 2019 Leave a Comment
Physiological factors in entrepreneurship mean feelings, inspirations, tendencies,
self-thinking, and physical, economic and social atmosphere of the behavior of
entrepreneurs occupied in industrial activities, which cause changes and revisions in
the behavior of the employees.
Psychological Factors Affecting Entrepreneurship
Entrepreneurship is a physiological activity.
Hence, behaviors of entrepreneurs are guided by physiological tendencies, past
trends and mental inclination.
The personality of the entrepreneurs are attracted to his activities, and plans and
decisions.
Psychological Factors Affecting
Entrepreneurship
The Psychological factors affecting entrepreneurship or his personality are as
follows:
1. Competition and Collaboration
This is the main physiological feature of entrepreneurship.
The approach of the entrepreneur is that of Competition and regular Collaboration to
Others.
He makes difference between business and relations. Hence, his working style
depends upon victory.
He always believes in victory and not in defeat.
Related: 18 Major Factors Affecting Capital Structure (Complete List).
Besides, the competition of entrepreneurs is not against the targets determined by
others, but against the targets determined by himself.
2. Entrepreneur Challenges
Following are the characteristics of the entrepreneur’s challenges:
1. He likes entrepreneurs challenges, but not taking excessive risks beyond his
limits.
2. He does not like very easy assignments, because these have no challenges.
3. He feels challenges in such activities and decisions, in which the probability of
success is quite low.
4. The entrepreneur pays special attention to planning.
5. He also gives special attention to assessing the probability of profitability in
the markets and their comparison.
3. Expectations from Employees
A significant feature of physiological characteristics of the entrepreneurs is that they
determine High targets for themselves and for employees and also motivate them for
the achievement of the targets.
They expect hard labour and high achievement from their employees.
Besides, they also provide leadership and supervision to the Employees.
Bonus: Top 12 Factors Affecting Business Finance (Complete List).
4. Social Consciousness
An entrepreneur is also a social being and hence his social consciousness is quite
intense. So, he
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Formula series of new plans for economic and social development.
Creates new ways and sources for development in society.
Promotes employment and industrialization, so that economic backwardness
may be removed.
Makes full utilization of social resources.
Strengthens the process of economic and social development, by the capital
formation in the country.
5. Dignity Towards Labour
Socially inspired entrepreneurs have high feelings of Glory towards labour and they
are always ready for using their energy for manual labour also.
Related: 16 Factors Affecting Economic Environment (With Examples).
6. High Achievement Motive
An entrepreneur believes in high achievements. So, his behavior is characterized by
the following aspects:
1. He believes in attending high achievements and excellence.
2. He always works for high targets, outstanding standards, and challenging
assignments, to fulfill his desire for high achievements and excellence.
3. His foremost desire is to be ahead of all.
4. He is laborious, dynamic and high ambitions in life.
5. He feels pleasure in complicated and challenging jobs.
6. Target achievement is the main inspiration for him.
7. He also believes that one should make a struggle in life to appear different
from others.
7. Sense Of Effectivity
The central point of all activities of the entrepreneur is the achievement of the goals
and objectives.
He is confident about his ability and resources.
So, he believes in solving the problems, rather than avoiding them.
That way, the realization of efficacy keeps the entrepreneur, activity oriented and
physiologically motivates him for initiatives, Creativity, self-confidence and solving
the problems.
Bonus: 12 Factors Affecting Entrepreneurship Development.
8. Expansion Motivation
An entrepreneur posses the motivation for sharing his experience and helping each
other.
Although the level of such type of inspiration among the entrepreneurs is low, to
bring such inspiration At The high-level, they may be provided appropriate training
and orientation.
9. Efforts for Continuous Innovation
The important physiological feature of the entrepreneurship is that the entrepreneur
continuously makes efforts for continuous innovations. Hence:
1. He always thinks to do something new in his business, whether arrangements
for techniques, instruments, and management are available or not.
2. He develops and adopts innovations for improving his position in competitions
and for providing maximum satisfaction and services to society.
3. He always thinks of doing something by a different method, due to his
perceptions and feelings of the heart.
4. He does not undertake activities performed by common man.
5. He causes new changes by giving new form to the old thoughts in society.
6. He also carries out improvements in production techniques, through research,
studies and creative thinkings.
7. The entrepreneur carries out product diversification by developing various
new products. It results in the expansion of the Enterprises and availability of
new commodities to the society, for consumption.
8. 19 Factors Influencing Entrepreneurship Development.
10. Builder of New Organisations
An entrepreneur promotes and innovates the new enterprise or to establish an
undertaking with his mental tendencies and imaginations.
Besides, he builds the organizations, Arranges infrastructure facilities, organizes the
resources and also coordinates them.
The entrepreneur is that economic factor who organizes and coordinates
various resources of production.
11. More Practical
The entrepreneurs think over future imagination for future and circumstances
prevailing in public life.Psychological and social factor of entrepreneurship
Entrepreneurs are more practical. They feel proud of their past achievement and on
another side, they regularly assess the future also.
Related: 20 Types of Entrepreneurs (Informative Explained).
12. Select Calculated Risk and Risk Taking
A physiological feature of the entrepreneur is that he selects the calculated risk to
bear it.
But, while doing so, he fully utilizes his foresightedness, imagination, alertness,
dynamic approach, courage, capability, self-confidence and leadership qualities.
This feature of the entrepreneur may be explained also as follows:
1. The entrepreneur has the ability and desire to take risks in the enterprise and
also the capability of providing a guarantee against uncertainties.
2. The entrepreneur likes circumstances fully depending on chance.
3. The entrepreneur has the risk-bearing capacity, organizational ability and
desire for product diversification and attempting innovations.
13. Internal Centre of Control
The entrepreneurs consider their achievement as the outcome of their efforts
strongly, and not of any chance or anybody is the blessing.
In physiological terms, such persons are known as persons with internal centres of
control.
Related: 12 Theories of Entrepreneurship (Explained with Examples).
14. Desire to Influence Other Persons
An entrepreneur has the desire to influence others by his work, ability, skill
and leadership knowledge.
So, physiologically, he is good in his behavior and he also leads managers and other
persons.
15. Selection of Independent Life Career
The entrepreneur has the desire to select an independent life career. As a result:
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They get motivation for doing independent business, rather than service for
another.
They do not like to work as subordinates of any other person.
Realization of independence and privacy inspire him to be always distinct.
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He always feels inspired for maintaining his distinction and entity.
Bonus: 15 Importance of Social Responsibilities of Entrepreneurs.
16. Group Level Activities
The entrepreneur believes in group level activities or in taking all together, the
reason being that he has many qualities, like Managerial skill, maturity, social
aptitude, honesty, cordial nature, politeness and sense of respect for others, etc.
Besides, the entrepreneur also encourages others to materialized his views and
perceptions, by his effective and efficient behavior and cooperative attitude.
17. Concern with Society
The entrepreneur always remains fully conscious of his activities and social impacts.
This is not an individual activity and rather takes the form of a meaningful social
enterprise.
As a result, in present conditions, only those entrepreneurs are liked who are
concerned with the society and do not feel jealous towards the progress of others.
Related: 15 Major Role of Entrepreneur in Economic Development.
18. Hope of Success
The self-confidence of the entrepreneur is the base of his success.
By self-confidence, difficult tasks also become easy and he is able to overcome the
difficult situations.
Hence, confidence for gaining success makes him not only dynamic and energetic
but also develops positive thinking in him. What is social entrepreneurship?
19. Follow up Flexibility
An entrepreneur physiologically follows flexibility, because:
1. He takes various decisions, according to the circumstances and time.
2. He has the capacity to understand other persons by seeing them and molding
himself according to them, and also the ability to understand the changed
market conditions and techniques to carry out the changes, accordingly.
3. He poses managerial ability, skills, and leadership qualities, and hence he
follows the following styles of leadership, according to the circumstances, time
and atmosphere:
Dictator Style
To provide security to the interests of the enterprise and the associated persons.
Democratic Style
To take full advantage of the perceptions, creativity, and initiatives of the employees.
Independent Power Style
For self-determination of targets by the associated persons or employees and their
fulfillment.
Supervisory Power Style
To supervise the performance of various factors of production.
20. Immediate Feedback
The important characteristics of the entrepreneurs are also that they make regular
improvements in their performance.
They learn from past experience and regularly evaluates past performance.
The entrepreneurs Aspire for direct and sure progress towards achieving the
determined targets. Not only that, but they also like the concurrent and reliable
evaluation of their performance.
Q. DISCUSS HOW ACHIEVEMENT MOTIVATION DEPENDS UPON ON
SOCIO ECONOMIC AND PERSONALITY FACTOR? CAN
ACHIEVEMENT MOTIVATION BE IMPROVED & STRENGTHENED?
Achievement Motivation: Features, Characteristics and
Significance
Achievement motivation can be better understood by
knowing its salient features. These are as follows:
a. It is lateral personal disposition to strive for a particular goal.
b. It’s person’s deep and driving desire to do something important
to attain the feelings of personal accomplishment.
c. It is personal disposition to achieve something difficult and
bigger.
Thus, it becomes clear that achievement motivation is basically the
predisposition or inner urge or inclination of an entrepreneur to
accomplish something important and unique to attain a feelings of
self-accomplishment and satisfaction.
Characteristics of Entrepreneurs with Achievement
Motivation:
Entrepreneurs with achievement motivation are
characterized by the following attributes:
a. They like to undertake risks for personal accomplishment.
b. They have high level of perseverance to attain their goal. They do
not give up even failure after failure. But, they try again and again
till the goal is not achieved. They follow the apt proverb: ‘Fall seven
times, stand up eighth.’
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c. They show courage and fortitude to keep on moving toward their
goal instead of adversities.
d. Entrepreneurs with high level of achievement motivation tend to
be more creative and innovative.
e. They tend to be more future-oriented.
f. Such entrepreneurs are more adaptive and mobile.
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g. Last but no means the least, entrepreneurs with high level of
achievement motivation do not feel contentment, but always have
desire for more and more.
Significance of Achievement Motivation:
The main significance of achievement motivation lies in the fact that
it serves as fuel to activate entrepreneurs to exert more and higher
level of efforts to achieve something important to them. Here the
apt saying of India’s famous woman entrepreneur Shahnaz Hussain
seems pertinent to appreciate the significance of achievement
motivation. “Achievement depends on how badly you want to
achieve.”
The significance of achievement motivation can be imbued
with multiplicity of justifications as follows:
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a. It is an essential ingredient and hallmark of entrepreneurship
development leading to industrial and economic development.
b. This serves the major sources of the entrepreneurial supply.
c. This is a psychological construct that keeps entrepreneurs
activated towards their goals.
d. Being inner drive, it is significant for the people for all walks of
life be entrepreneurs, managers, leaders, social workers and so on.
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e. This also serves as one of the effective inventions for
organizational development and, in turn, national development.
The significance of achievement motivation in essence can be
summed up by quoting Abraham Lincoln’s apt statement; “Always
remember in your mind that your own resolution to succeed (i.e.
achieve) matters the most that anyone thing.”
Role of Motivation in Entrepreneurship
Entrepreneurs are known for their tenacity and commitment – to lofty ideals, long
hours, and success. They are hard workers who go into a project passionately and find
success because they can convince other people of the value of their ideas. A key factor
in sustaining this kind of energy, creativity, and drive is motivation. The role of
motivation in entrepreneurship is foundational to their ultimate success.
Why is Motivation Important?
Motivation services as the reason, or reasons, that compel someone to continue striving
and working. It provides hope and clarity when circumstances become hard and
discouraging. Entrepreneurial motivation, then, is fundamental in someone’s decision to
embark on the journey of creating a business.
Motivation is also important to those that entrepreneurs work with and interact with.
Entrepreneurs need to understand, tap into, and sustain their own motivation for
starting a business, but they also need to be able to motivate others to buy into their
idea. Whether it’s motivating investment groups to provide startup funding or
motivating eventual employees during the early days, motivation is key to keeping
everyone on the same page about the mission of the new business and working towards
fulfilling that.
What are Motivational Influences on Entrepreneurship?
Every entrepreneur and business owner is different; therefore, many entrepreneurial
motivation factors will also be different. But there are similarities among successful
entrepreneurs in where they find motivation and inspiration. Here are some of the
things that not only motivate entrepreneurs to go into business for themselves but keep
motivating them to continue even during difficult parts of the process.

Greater Freedom
Entrepreneurship often appeals to people who want to work for themselves. Whether
they no longer want to report to a supervisory structure or simply want to be able to
create their own hours, entrepreneurship gives people more freedom and flexibility in
how they structure their careers. And while there is inherent anxiety in
entrepreneurship, as there is a lot of unknown about the possible success of a startup, it
also can be freeing to know that your employment is secure in the sense that you are
able to define your own parameters of success, salary, and so on.

Greater Income
Some workers feel that all the work they put into a business owned by someone else
ultimately goes to help add to that owner’s wealth. While employees receive a salary for
their work, they are limited in how much they are able to earn when compared to Csuite level employees, owners, and shareholders. Starting your own business creates the
possibility of increased wealth over time.

Greater Influence
Relatedly, some employees disapprove of the direction that the company they work for
is taking, or they want to have a more direct hand in some of part of the business.
Wanting to have a greater influence over a product’s development, marketing, or
customer base is a significant motivator for some people to break away from a business
or career path and start their own company or product line. It can also appeal to people
who want to have a lasting impact or legacy in an industry, as starting a company sets
them apart.

Control and Creativity
Many entrepreneurs have an idea they want to share with the world or that they think
could influence people’s lives for the better. Wanting a greater creative control over the
product and business process is a driving motivation that launches the career of many
self-made business people and can help create focus and provide inspiration throughout
the entrepreneurial process.
The role of motivation in entrepreneurship is significant. It helps to shape startup
businesses from the very early stages and can have an impact on sustaining growth and
capabilities into the future.
How can women promote India’s economic development?
India has been developing fast, but not always equitably or inclusively. Our
development model is very much a work in progress and deep-rooted challenges
remain.
The biggest issue we face is the empowerment of women.
Across the world, educating and empowering women has proven time and again to
be the catalyst for rapid socio-economic growth. Conversely, societies where women
are repressed are among the most backward.
India seems to be somewhere in-between.
Women in India make up 7.5% of the world’s total population. While certain
development indicators show their quality of life is improving – maternal mortality
rates declining; literacy rates increasing; more women gaining access to healthcare
and education – the pace of change is heartbreakingly slow.
India ranks 113 out of 135 on the World Economic Forum’s Gender Gap Index.
According to India’s 2011 census, the sex ratio for children under six was 914
females to 1,000 males, a disturbing decline from 927 in 2001. The ranking of Indian
women in economic empowerment is 0.3, where 1.0 means equality.
This is a dangerous state of affairs for any society. Denying women opportunities to
realise their potential is a waste of human capital and bar to economic progress.
Women are undoubtedly the foundation of the basic unit of society – the family. Even
in traditional roles they demonstrate great innovation, skill, intelligence, hard work
and commitment.
If we can harness these attributes effectively, India’s growth can be more inclusive
and equitable. The education of women is therefore key.
But in a country where nearly 70% of the population lives in rural areas, access to
educational opportunities is limited. Moreover, poverty puts the girl child at a greater
disadvantage. Add to this the social attitudes towards women, and it is obvious that
we need a multi-pronged approach if we are to achieve education for women
worldwide.
This is where technology – or e-education – can help. E-infrastructure can deliver
relevant education to both sexes in an efficient and equitable manner, enabling our
youth to leapfrog into the internet age.
When we educate and empower one woman, we set off a chain reaction that
transforms the life of her family and the community she lives in. An exemplary model
is the network of trained Accredited Social Health Activists (ASHA), created under
the National Rural Health Mission, who have played a crucial role in improving the
health of women and children across India.
Vocational training is equally important to women’s economic independence. The
inspirational efforts of the Self-Employed Women’s Association, founded by Ela
Bhatt, and other successful self-help groups, have sowed the spirit of
entrepreneurship in hundreds of women.
Sewa’s women members are trailblazers, redefining themselves as they add value to
their families and the nation. This kind of female empowerment can transform India.
Societal perceptions of females and their role are often the biggest barriers to
change, because they shape women’s perception of themselves. Across all strata of
Indian society, people still believe that women are capable of performing only certain
types of jobs and that marriage must take precedence over career.
This mind-set, common to both men and women, must change. We must focus on
the girl child and help her escape the traditional stereotypes that stifle her potential.
Take women in science as an example. The prejudice is that women are less
capable of understanding science, despite all the evidence to the contrary. I faced
seemingly insurmountable road-blocks on my path to building Biocon into the
institution it is today.
As a young woman with hardly any work experience in a male-dominated business
environment, it was challenging to set up a biotechnology enterprise to say the least.
I can credit my success to my education and upbringing which helped instil a strong
sense of self-belief and a “never-say-die” spirit in me.
Today, I am proud that Biocon is an equal-opportunity employer where women thrive
in every role, including scientific research. While we do not believe in hiring women
just because they are women, we do provide the facilities and environment they
need to make them feel empowered.
I believe that by neglecting the development of women, we will compromise the
future of the Indian nation. By investing in women and their education, we are
investing in our present and in our future.
What are factors influencing Entrepreneurial development
in India?
Ans: 1.
Economic Factors
Capital, labour, raw materials and market are the main economic factors.
(a)
Capital:
Capital is one of the most important prerequisites to establish an enterprise. Availability of
capital helps an entrepreneur to bring together the land of one, machine of another and raw
material of yet another to combine them to produce goods. Therefore, capital is regarded as
lubricant to the production process. Basically, capital is the life blood of any activity. If
capital is available, people who have innovative ideas would like to put them into reality.
Without having any obstacles, if capital is available, it will act as a lifeline to entrepreneurs.
So, if capital is available, entrepreneurial activities will increase.
(b)
Labour:
The quality and quantity of labour is another factor which influences the emergence of
entrepreneurship. Availability of labour makes entrepreneurship attractive. More than
abundantly available labour, the presence of skilled labour force is very important because
such a workforce is generally less mobile than other resources. If entrepreneurial activities
are initiated near areas where labour is available, then it is easy to carry out the business more
comfortably and profitably at low cost. This is why one finds textile units and machine tools
manufacturing industries concentrated in certain cities like Coimbatore, Tiruppur, Ludhiana,
Rajkot, Baroda, etc. just because of availability of skilled labour force required for such units.
(c)
Raw Materials:
Raw materials are required for establishing any industrial activity and therefore has an
influence in the emergence of entrepreneurship. In the absence of raw materials, neither any
enterprise can be established nor an entrepreneur can emerge. In some cases technological
innovations can compensate for raw material inadequacies. The supply of raw materials is not
influenced by themselves but becomes influential depending upon other opportunity
conditions. The more favourable these conditions are, the more likely is the raw material to
have its influence on entrepreneurial emergence.
(d)
Market :
It is not only the availability of capital, labour and raw materials but a readily available
market that attracts entrepreneurial activities. Ultimately, it is the market that fetches revenue
for any business. If sufficient market is not there, people will naturally hesitate to do business
in a sector where there is no market. In addition to market opportunities, it is equally
important to ensure future market opportunities for the emergence of entrepreneurial
activities.
2.
Social Factors :
Development of entrepreneurship in a society may take place not just because of better
economic factors but because of the presence of positive social factors. The following social
factors influence the development of entrepreneurship in a society.
(a)
Social norms and values:
A society sets certain norms and values for the behaviour of people who are part of that
society. If people violate or overstep these norms and values, certain restrictions are likely to
be imposed on them. As a result, many people are forced to accept certain types of jobs and
tasks that reflect the social environment. If the society has an open and flexible approach
towards various types of jobs and works, then people will feel free to do whatever they like
and even go in for innovation and creativity. When there is more openness and flexibility,
entrepreneurship will not only emerge but also thrive.
(b)
Role models:
Societies that celebrate entrepreneurship and felicitate successful entrepreneurs in a way
encourage many future generations to take up entrepreneurial activities. This is because
successful businessmen prove to be role models for the society at large. For instance, states
like Gujarat, Maharashtra and to some extent Tamil Nadu and Haryana have experienced
better industrial development as a result of higher concentration of entrepreneurs compared to
lesser industrialised states such as Orissa, Chattisgarh, Madhya Pradesh and other
Northeastern states.
(c)
Social pressure:
At times, entrepreneurship can emerge in a society due to social restriction too. If a society is
orthodox, close and imposes a lot of restrictions, then it is likely to backfire. People who are
at the receiving end are likely to react strongly and go in for change. In other words, because
of negative pressure, more number of people would like to become entrepreneurs as a means
of improving their status. It has been noticed that where people were marginalised, they
became entrepreneurs just to prove their abilities and establish an identity in the society.
(d)
Respect and Status:
If societies accord recognition and respect to people who dare to do something different and
creative, it proves to be an encouragement for others to do something enterprising. Therein
lies the emergence of entrepreneurship. In the traditional societies, people were looked down
upon rather than encouraged for deviating from the set norms or regular occupation. This
means there was no respect for change. Thus, societies where there is respect and recognition
for people to do something different are more likely to see the development of entrepreneurial
activities.
(e)
Security:
The view regarding role of social security in encouraging entrepreneurship development is
rather divided. One school of thought is of the view that people are more prone to take
entrepreneurial risks in secure social environments. On the other hand, there are others who
argue that entrepreneurship will more likely emerge if there are turbulent conditions. In both
cases, there is scope for entrepreneurship development.
3.
Psychological Factors
(a)
Need Achievement:
According to David McClelland’s theory of need achievement, a constellation of personality
characteristics which are indicative of high need achievement is the major determinant of
entrepreneurship development. Therefore, if the average level of need achievement in a
society is relatively high, one would expect a relatively high amount of entrepreneurship
development in that society. McClelland gives the psychological concept of achievement
motivation to account for the differences in response to similar conditions. Referring to the
encouraging impact of achievement motivation training programmes organised by the Small
Industries Extension Training Institute (SIET), Hyderabad McClelland argues that the need
achievement can be developed through the intensive training programmes.
(b)
Withdrawal of Status Respect:
E.E. Hagen attributed the withdrawal of status respect of a group to the genesis of
entrepreneurship. Giving a brief sketch of history of Japan, he concludes that she developed
sooner than other non-Western society except Russia due to two historical differences. First,
Japan had been free from ‘colonial disruption’ and secondly, the repeated long continued
withdrawal of expected status from important groups (Samurai) in her society drove them to
retreatism which caused them to emerge alienated from traditional values with increased
creativity. This very fact led them to the technological progress entrepreneurial roles.
Hagen believes that the initial condition leading to eventual entrepreneurial behaviour is the
loss Of status by a group. He postulates four types of events can produce status withdrawal
(a)
The group may be displaced by force;
(b)
It may have its value symbols integrated;
(c)
It may drift into a situation of status inconsistency; and
(d)
It may not be accepted the expected status on migration in a new society.
He further postulates that withdrawal of status respect would give rise to four possible
reactions and create four different personality types
(a) Retreatist: He who continues to work in a society but remains different to his work
and position.
(b) Ritualist: He who adopts a kind of defensive behaviour and acts in the way accepted
and approved in his society but no hopes of improving his position.
(c) Reformist: He is a person who forements a rebellion and attempts to establish a new
society; and’
(d)
Innovator: He is a creative individual and is likely to be an entrepreneur.
Hagen maintains that once status withdrawal has occured, the sequence of change in
personality formation is set in motion. He refers that status withdrawal takes a long period of
time – as much as five or more generations to result in the emergence of entrepreneurship.
4.
Government Actions
The government by its actions or failure to act also does influence both the economic and
non-economic factors for entrepreneurship. Any interested Government in economic
development can help, through its clearly expressed industrial policy, promote
entrepreneurship in one way or other. By creating basic facilities, services and utilities and by
providing incentives and concessions, the Government can provide the prospective
entrepreneurs a facilitative socio-economic setting. Such conducive setting minimises the
risks which the entrepreneurs are to face. Thus, the supportive actions of the Government
appear as the most conducive to the entrepreneurial growth. This is true of the Indian
entrepreneurs also.
Role of Agriculture in Indian Economy
Agriculture plays a vital role in the Indian economy. Over 70 per cent of the rural households
depend on agriculture. Agriculture is an important sector of Indian economy as it contributes
about 17% to the total GDP and provides employment to around 58% of the population. Indian
agriculture has registered impressive growth over last few decades. The foodgrains production
has increased from 51 million tonnes (MT) in 1950-51 to 250MT during 2011-12 highest ever
since independence
The share of agriculture in GDP increased to 19.9 per cent in 2020-21 from 17.8 per cent in
2019-20. The last time the contribution of the agriculture sector in GDP was at 20 per cent was in
2003-04.
Basic Facts about agriculture

India is the biggest exporter of cotton in the world.

India is the largest producer of ginger, okra, potatoes, onions,
brinjal, etc., amongst vegetables.
Sikkim is the first state in the world that claimed 100% organic
farming.
India ranks 2nd in the world in agriculture production.
India’s world rank in services and industry sector is 9th and 5th
respectively.
Indian agricultural production has increased from 87 USD bn to 459
USD bn in the past 15 years (12% annual growth).




Globally India ranks 9th for the agricultural exports.
Significance of Agriculture in Economy
Agricultural influence on national income:

The contribution of agriculture during the first two decades towards the
gross domestic product ranged between 48 and 60%. In the year 2001 2002, this contribution declined to only about 26%.
Agriculture plays vital role in generating employment:

In India at least two-thirds of the working population earn their living
through agricultural works. In India other sectors have failed generate
much of employment opportunity the growing working populations.
Agriculture makes provision for food for the ever increasing population:


Due to the excessive pressure of population labour surplus economies
like India and rapid increase in the demand for food, food production
increases at a fast rate. The existing levels of food consumption in these
countries are very low and with a little increase in the capita income, the
demand for food rise steeply (in other words it can be stated that the
income elasticity of demand for food is very high in developing
countries).
Therefore, unless agriculture is able to continuously increase it marketed
surplus of food grains, a crisis is like to emerge. Many developing
countries are passing through this phase and in a bid to ma the
increasing food requirements agriculture has been developed.
Contribution to capital formation:

There is general agreement on the necessity capital formation. Since
agriculture happens be the largest industry in developing country like
India, it can and must play an important role in pushing up the rate of
capital formation. If it fails to do so, the whole process economic
development will suffer a setback.
Supply of raw material to agro-based industries:

Agriculture supplies raw materials to various agro-based industries like
sugar, jute, cotton textile and Vanaspati industries. Food processing
industries are similarly dependent on agriculture. Therefore, the
development of these industries entirely is dependent on agriculture.
Market for industrial products:

Increase in rural purchasing power is very necessary for industrial
development as two- thirds of Indian population live in villages. After
green revolution the purchasing power of the large farmers increased
due to their enhanced income and negligible tax burden.
Influence on internal and external trade and commerce:

Indian agriculture plays a vital role in internal and external trade of the
country. Internal trade in food-grains and other agricultural products
helps in the expansion of service sector.
Contribution in government budget:

Right from the First Five Year Plan agriculture is considered as the
prime revenue collecting sector for the both central and state budgets.
However, the governments earn huge revenue from agriculture and its
allied activities like cattle rearing, animal husbandry, poultry farming,
fishing etc. Indian railway along with the state transport system also
earn a handsome revenue as freight charges for agricultural products,
both-semi finished and finished ones.
Need of labour force:

A large number of skilled and unskilled labourers are required for the
construction works and in other fields. This labour is supplied by Indian
agriculture.
Greater competitive advantages:

Indian agriculture has a cost advantage in several agricultural
commodities in the export sector because of low labour costs and selfsufficiency in input supply.
Recent contribution of Agriculture to Indian
Economy










In 2019-20 total production of horticultural products in India was about
310 million tonnes.
In 2019-20, India produced about 24 million tonnes of onion and
exported about 2 million tonnes from it.
The potato production in 2019-20 was about 51 million tonnes and
tomato production stood at about 19 million tonnes.
As per estimates, total fresh vegetables production was about 97 mi llion
tonnes and about 16 lakh tonnes of it was exported.
Grape’s production in 2019-20 was about 1.9 lakh million tonnes,
mangoes stood at about 49 thousand million tonnes (besides processed
mango pulp adding another 85 thousand tonnes).
As of 2019, India’s livestock population rose to around 530 million
including cattle, buffaloes, goats, sheep, pigs and poultry.
India is world’s largest milk producer and exports milk to countries like
Bangladesh, Nepal, Bhutan, the UAE, and Afghanistan etc.
In 2019-20 about 190 million tonnes of milk was produced. In 2019-20,
poultry meat in India accounted for about 4 million tonnes and buffalo
meat for about 1.5 million metric tonnes.
India’s fish production in 2019-20 was approximately 13 thousand
tonnes.
In terms of export, India exported about 11 lakh million tonnes of buffalo
meat, 14 thousand million tonnes of sheep/goat meat and 3.5 lakh
million tonnes of poultry products in 2019-20.
Characteristics and features of Indian
Agriculture

Source of livelihood: Agriculture is the main occupation. It provides
employment to nearly 61% persons of total population. It contributes
25% to national income.







Dependence on monsoon: Agriculture in India mainly depends on
monsoon. If monsoon is good, the production will be more and if
monsoon is less than average then the crops fail. Sometimes floods play
havoc with our crops. As irrigation facilities are quite inadequate, the
agriculture depends on monsoon.
Labour intensive cultivation: Due is increase in population the
pressure on land holding increased. Land holdings get fragmentated and
subdivided and become uneconomical. Machinery and equipment can
not be used on such farms.
Under employment: Due to inadequate irrigation facilities and uncertain
rainfall, the production of agriculture is less, farmers find work a few
months in the year. Their capacity of work cannot be properly utilised. In
agriculture there is under employment as well as disguised
unemployment.
Small size of holdings: Due to large scale sub-division and
fragmentation of holdings, land holding size is quite small. Average size
of land holding was 2.3 hectares in India while in Australia it was 1993
hectares and in USA it was 158 hectares.
Traditional methods of production: In India methods of production of
agriculture along with equipment are traditional. It is due is poverty and
illiteracy of people. Traditional technology is the main cause of low
production.
Low Agricultural production: Agricultural production is low in India.
India produces 27 Qtls. wheat per hectare. France produces 71.2 Qtls
per hectare and Britain 80 Qtls per hectare. Average annual productivity
of an agricultural labourer is 162 dollars in India, 973 dollars in Norway
and 2408 dollars in USA.
Dominance of food crops: 75% of the cultivated area is under food
crops like Wheat, Rice and Bajra, while 25% of cultivated area is under
commercial crops. This pattern is cause of backward agriculture.
Challenges of Indian Agriculture


Instability: Agriculture in India is largely depends on monsoon. As a
result, production of food-grains fluctuates year after year. A year of
abundant output of cereals is often followed by a year of acute shortage.
Cropping Pattern: The crops that are grown in India are divided into
two broad categories: food crops and non-food crops. While the former
comprise food-grains, sugarcane and other beverages, the latter
includes different kinds of fibres and oilseeds.








Land Ownership: Although the ownership of agricultural land in India is
fairly widely distributed, there is some degree of concentration of land
holding. Inequality in land distribution is also due to the fact that there
are frequent changes in land ownership in India. It is believed that large
parcels of land in India are owned by a- relatively small section of the
rich farmers, landlords and money-lenders, while the vast majority of
farmers own very little amount of land, or no land at all.
Sub-Division and Fragmentation of Holding: Due to the growth of
population and breakdown of the joint family system, there has occurred
continuous sub-division of agricultural land into smaller and smaller
plots. At times small farmers are forced to sell a portion of their land to
repay their debt. This creates further sub-division of land.
Land Tenure: The land tenure system of India is also far from perfect.
In the pre-independence period, most tenants suffered from insecurity of
tenancy. They could be evicted any time. However, various steps have
been taken after Independence to provide security of tenancy.
Conditions of Agricultural Labourers: The conditions of most
agricultural labourers in India are far from satisfactory. There is also the
problem of surplus labour or disguised unemployment. This pushes the
wage rates below the subsistence levels.
Manures, Fertilizers and Biocides: Indian soils have been used for
growing crops over thousands of years without caring much for
replenishing. This has led to depletion and exhaustion of soils resulting
in their low productivity. The average yields of almost all the crops are
among t e lowest in the world. This is a serious problem which can be
solved by using more manures and fertilizers.
Irrigation: Although India is the second largest irrigated country of the
world after China, only one-third of the cropped area is under irrigation.
Irrigation is the most important agricultural input in a tropical monsoon
country like India where rainfall is uncertain, unreliable and erratic India
cannot achieve sustained progress in agriculture unless and until more
than half of the cropped area is brought under assured irrigation.
Lack of mechanisation: In spite of the large-scale mechanisation of
agriculture in some parts of the country, most of the agricultural
operations in larger parts are carried on by human hand using simple
and conventional tools and implements like wooden plough, sickle, etc.
Little or no use of machines is made in ploughing, sowing, irrigating,
thinning and pruning, weeding, harvesting threshing and transporting the
crops.
Agricultural Marketing: Agricultural marketing still continues to be in a
bad shape in rural India. In the absence of sound marketing facilities,

the farmers have to depend upon local traders and middlemen for the
disposal of their farm produce which is sold at throw-away price.
Inadequate transport: One of the main handicaps with Indian
agriculture is the lack of cheap and efficient means of transportation.
Even at present there are lakhs of villages which are not well connected
with main roads or with market centres.
The Economists’ Definition of Entrepreneurship and
Entrepreneurial Behavior
Classical and neoclassical theories of economics gave rise to the initial
economic theorization of entrepreneurship and entrepreneurial behavior.
Classical economics viewed an entrepreneur as a director of the production
and distribution of goods using the land, labour, and capital (Simpeh 2011).
Neoclassical economists saw entrepreneurship as a product of diminishing
marginal utility and pure exchange within a fundamentally closed economic
system.
However, the classical and the neoclassical economic schools of thought
failed to be devoid of criticism and unanswered in their postulations of
entrepreneurship and entrepreneurial activity. The Austrian Market Process
(AMP) is the economic school of thought that tried to answer all questions and
respond to all criticism to the abovementioned schools. Joseph Alois
Schumpeter – an Austrian economist – greatly influenced the AMP whose
interpretation of entrepreneurship arose from human activities within an
economy of knowledge.
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Schumpeter viewed an entrepreneur as a unique and creative person, who
produces something new and creatively destroys a market in an economically
stable environment and whose end is the implementation of a new idea
(Bessant & Tidd 2015). An entrepreneur is an agent of change through
creative destruction (or distraction) of the market equilibrium (Naude 2013).
Another Austrian – Israel Kirzner – furthered on Schumpeter’s assertion
adding that an entrepreneur has to be anyone alert to unbalanced profit
opportunities (or gaps) in a market and can match the demand and supply in
such a scenario as long as they have the knowledge and ability to implement
the idea to fill the gap (Douhan, Henrekson & Eliasson 2006).
A Kirznerian entrepreneur is a leader whose whole job emerges from being
alert to unnoticed gaps/opportunities within market systems or knowledge
about market data that other people do not have or notice. Instead of the
entrepreneur disrupting market equilibrium, they remove the disequilibrium
through a short-run movement to a new equilibrium (Kirzner 1973). The
eclectic American economist Frank Knight brought in a new twist to the
Austrians’ view by introducing uncertainties and risks. In Knight’s view, an
entrepreneur is a calculated risk-taker amidst uncertainties and one who bears
ideas, specialized knowledge, and skills on how to bear uncertainty and gain
profits as a reward.
From the first principles outlined above, several conceptualizations of
entrepreneurship from an economist’s perspective arise. One is that
entrepreneurship is a motivating power to individuals – entrepreneurs – to
drive a manageable process that initiates new ideas to produce new products,
production processes, or services, or ideas to better exists products,
production processes, or services to produce value (Bessant & Tidd 2015).
The process of initiating new ideas to develop something new or improve an
already existing thing is entrepreneurial behavior. According to Mbhele (2012)
entrepreneurship is an activity that involves the discovery, evaluation and
exploitation of opportunities to introduce new goods and services, ways of
organizing, markets, processes and raw materials through organizing efforts
that previously had not existed (p. 94).
Though not interchangeable, entrepreneurship and entrepreneurial behavior
are inseparable. Whereas entrepreneurship is a power and an activity within
an individual, entrepreneurial behavior is the tendency and process within the
individual to participate in entrepreneurship; to pursue identified opportunities
irrespective of available resources with openness to take a calculated risk and
getting rewarded through profits.
From an economist’s perspective, therefore, the summative definition of
entrepreneurship and entrepreneurial behavior has to include the generation
of new ideas from gaps identified within the market taking calculated risks and
getting rewarded for these risks through profits irrespective of the resources
available. A notable addition to this postulation is that the entrepreneurship
power or activity ends when competitors develop a new idea or copy the one
an entrepreneur has developed. For instance, when Gillette introduced the
Mach 3 razor, a UK retailer copied it with ease and produced a three-bladed
razor at much lower costs than Gillette (Goffin and Mitchell 2017).
This example implies that entrepreneurship is not all about being first-tomarket, it has to with being creative enough to minimize the possibilities of
imitation or the development of a new idea which would jeopardize or even
end the reward an entrepreneur draws from their enterprise. For instance,
when Tetley introduced the rounded tea bags, instead of discussing the new
production line and equipment with its supplier, it consulted and hired
Cambridge Consultants Ltd to make a completely different manufacturing line
for the round teabags (Goffin & Mitchell 2017). When Tetley’s teabags hit the
market, competitors could not get similar production lines or equipment, and
they could not imitate Tetley’s product.
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The Psychologists’ Definition of Entrepreneurship and
Entrepreneurial Behavior
Unlike in the economists’ case, the psychological conceptualization of
entrepreneurship and entrepreneurial behavior arises from the analysis of
individuals’ characteristics rather than from the market systems. According to
Simpeh (2011), the emphasis of psychological entrepreneurship theory is
personal characteristics in the definition of entrepreneurship and
entrepreneurial behavior. Kobia and Sikalieh (2010) posit that:
Because the entrepreneur is the catalyst for entrepreneurship, this school
posits that individuals are more likely to exploit opportunities, thus behave
entrepreneurially, because traits lead them to make different decisions about
opportunities than other people with the same information and skills (p. 113).
The personality trait theory is a psychological viewpoint that contends that an
entrepreneur has inborn traits and qualities to be enterprising such as mental
resilience, mental energy, optimism, intelligence, industry, perseverance,
creativity and innovation in addition to learned behaviours like management
skills and business knowledge (Simpeh 2011). The locus of control (LOC)
theory is another psychological school that uses people’s perception of
rewards and punishment for their actions in defining entrepreneurial activity.
Additionally, there is the need for achievement theory which is a psychological
framework that emphasizes that human beings possess the need to excel and
succeed just like they have basic needs.
Undoubtedly, psychological attributes occupy a vital position in
entrepreneurship, and in defining entrepreneurship, one cannot dismiss what
psychologists have to say. McClelland developed the need for achievement
theory and contended that the underlying drivers of achievement, affiliation,
and power motivate people to enterprise (Royle & Hall 2012). As Simpeh
(2011) records, “there is evidence for the relationship between achievement
motivation and entrepreneurship” (p. 3).
Indeed, achievement motivation may be the only person-based factor that
affects enterprise creation. Rotter fathered the LOC theory, which is a
person’s belief about what between chance and personal actions control the
outcomes of events in their lives (Ngwoke, Oyeuku & Obikwelu 2013).
According to the LOC theory, an entrepreneur is an individual with an internal
locus of control and believes that “that the outcomes of their actions are
results of their abilities or efforts” (Ngwoke et al. 2013 p.49).
Ajzen developed the Theory of Planned Behavior (TPB) to predict and explain
behavior in various contexts (Sabah 2016). According to the TPB, there are
three precursors to entrepreneurship and entrepreneurial intention: “attitude
towards entrepreneurial behaviour, perceived social norms and perceived
behavior control, in other words, self‐efficacy” (Sabah 2016 p. 87). Following
Ajzen’s model, becoming an entrepreneur is a conscious activity, and
entrepreneurial behavior is a cognitive state and a product of personal,
organizational and environmental factors (Palma, Cunha, & Lopes 2009).
In line with the assertions of the psychologist, several concepts that must
feature in the definition of entrepreneurship and entrepreneurial behavior
arise. First, entrepreneurship arises from individuals’ personal need for
achievement. Secondly, entrepreneurship is a product of an active internal
locus of control within persons who believe that their actions affect the
outcomes of their life events. Lastly, entrepreneurship is a conscious activity,
and entrepreneurial behavior is a cognitive state. Entrepreneurship, therefore,
has to be the process of creating or discovering, assessing, and exploiting an
opportunity that requires one to have the preparedness to either realize or
exploit the opportunity discovered.
To put the psychologists’ perspective into a real-life case evaluation,
consider Les Concierges as an example. Dipali Sikand founded Les
Concierges, and according to Goffin and Mitchell (2017), Sikand’s idea to
establish Les Concierges arose from her personal experience.
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As a young employed mother, Sikan faced the challenge of attaining a worklife balance, and she realized that there were corporates that desired to help
their employees to have people who can help the employees take care of
matters they are unable to take care of themselves. As an individual, the need
to achieve motivated Sikand and she believed that her actions would affect
the outcomes of her life events. Also, the process of identifying the
gap/opportunity was a conscious one, and her behavior was a cognitive state
resulting from her personal, organizational, and environmental influences.
ENTREPRENEURIAL BEHAVIOUR MODEL
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Lesson 8. MOTIVATION AND ENTREPRENEURSHIP DEVELOPMENT
Module.2 Concept and working of entrepreneur
Lesson 8
MOTIVATION AND ENTREPRENEURSHIP DEVELOPMENT
8.1 Introduction
Motive refers to drive and motivation means drive to achieve a goal. Motivation refers to the
way in which urges, drives, desires, aspirations, and strivings or needs direct, control or explain
the behaviour of human beings.
Motivation is related with human behaviour. Motivation is a complex phenomenon. In general
motivation is a psychological phenomenon as it is related to those factors operating within the
individual employee which compel him to act or not to act in a certain way. These phenomena
have been a subject of research by many people.
8.2 Characteristics of Motivation
1. Motivation is internal feeling of a person.
2. Motivation is a continuous process.
3. Motivation varies with person and time.
4. Motivation may be positive or negative.
What motivates an entrepreneur to undertake risk and start new enterprise? Is it financial
scarcity or financial abundance which motivates an individual to start an enterprise? Is it the
family, social status or satisfaction from present life that motivates an entrepreneur to start a
new enterprise? The answer to such questions lies in the study of motivation.
Motivational factors involve the inner urge within an individual. Due to such an urge an
individual is motivated to do something new, unique and perform better than others. :Research
studies associated with finding an answer to the most important question as “To what makes
an entrepreneur?” reveals the following important points.
1. Entrepreneurship is associated with personality.
2. Personality development is closely associated with early childhood experiences.
3. Economic deprivation also acts as a motivating factor.
4. Family environment plays an important role. In a family where security and non risk
bearing situations are given importance, there are less chances of developing
entrepreneurs, whereas family environments which foster venturing in to uncertain risky
environment, tend to develop entrepreneurs.
5. Entrepreneurial characteristics are results of combination of various social, economic and
psychological factors which are developed right from childhood.
8.3 Motivation Theories
Motivation acts as key to enterprise effectiveness. Motivation is originated from the word
motive. Motive means want, need, impulse or drive. Motivation is internal to person. It varies
from person to person and time to time. Motivation is on going process and may be positive or
negative. There are financial and non financial motivation techniques which can be used by
entrepreneur for effective functioning of the enterprise. Incentives directly or indirectly related
with money are referred to as financial motivations. Money acts as important and most effective
source of motivation. Salary and wages, bonus, leave with pay, medical and housing facilities,
profit sharing, vehicle allowance etc are some of the examples of financial motivators which
should be used by the entrepreneur for the employees of the enterprise. Non financial
motivators are psychological in nature. Status, respect, prestige, participation, job enrichment,
recognition, safety of job, responsibility, etc are examples of non financial motivators.
Many motivation theories have evolved over the passage of time. These theories can be
grouped as follows
Table 8.1 Theories of motivation
Content theories
Maslow’s
need
hierarch
theory.
2. Herzberg
two factor
theory.
3. McClelland
theory
of
achievement
, affiliation
and power.
4. Alderfer’s
theory
of
existence,
relatedness
and growth.
1.
Process theories
Vroom’s
theory of
valence
and
expectancy
.
2. Porter and
lower
model of
motivation.
3. Equity
theory.
1.
Theories related with
human nature
McGregor
theory of X
and Y.
2. Ouchi’s
theory Z.
3. Contingenc
y approach.
1.
Maslow’s of theory holds that human needs form a hierarchy ranging from lowest order of
physiological need, security need, social need, esteem need to highest order need of self
actualisation. The theory suggests that various levels are interdependent and overlapping. Each
higher level need emerges before the lower level need is completely satisfied. As the need does
not disappear when other emerges, all needs tend to be partially satisfied in each area. When
the peak of a need is passed, that need does not work as a primary motivator. The next level
need then begins to dominate. Even though a need is satisfied it still influences behaviour due
to interdependent and overlapping characteristics of need.
Fredrick Herzberg and his associate of case western reserve university has conducted research
study by administering survey questions to 200 engineers and accountants in nine different
companies in the Pittusberg, U.S.A. Based upon analysis of the information, two independent
set of factors affecting human behaviour were found out. One set of factors operate primarily
to dissatisfy employees when they are absent, however their presence does not motivate them
in a strong way. They are referred to as hygiene factors. Another set of factors are responsible
for strong motivation and high job satisfaction. They are referred to as hygiene factors. Hygiene
factors found out by Herzberg include company policy and administration, technical
supervision, interpersonal relationship with subordinates, salary, job security, personal life,
working conditions and status. The motivation factors found out by Herzberg include
achievement, recognition, advancement, work itself, possibility of growth and responsibility.
The suggestion of Herzberg is to keep hygiene factors constant or higher while increasing
motivational
factors.
8.3.1 Important guidelines for motivation
1. The enterprise must consider human resources as the most valuable resource from
among all the resources and give them respectable and honorable treatments.
2. Good quality working conditions should be maintained at the enterprise / factory place
3. Safety and health should receive topmost priority.
4. Adequate and fair salary structure should be provided to employees so as to maintain
good standard of living.
5. Job security and enough opportunities to rise ahead in their careers should be given to
employees.
6. Superiors should praise the subordinates when they deserve it.
7. Adequate tools and equipments should be provided to employees so as to perform their
task effectively.
8. Proper feedback system should be implemented so that subordinates can come to know
about their strengths and weaknesses.
9. The employees should be provided with opportunities to show their skills and creative
instincts in work performance through giving them more freedom, encouraging their
participation, implementing management by objectives and latest management
concepts.
10. Principles of natural justice should be followed in handling grievances of employees.
Full freedom should be provided to employees to express their problem.
11. Adequate training should be provided to the employees to develop skills and creative
abilities of the employees.
8.4 Entrepreneurship Development Training Programme
Entrepreneurship development is one of the key elements for promotion of MSME sectors. To
undertake this task on regular basis, the Ministry has set up three national level institutes. These
are 1) National Institute of Micro, Small and Medium Enterprises, Hyderabad; ii) National
Institute of Entrepreneurship and small Business Development, Noida; and iii) Indian Institute
of Entrepreneurship, Guwahati. All would be entrepreneurs, can avail the multi-faceted training
programmes geared for entrepreneurship cult which are tailor-made for their individual needs
and application within the country. Various training programmes are organized on regular basis
to cultivate the latent qualities in youths by enlightening them on various aspects that are
necessary to be considered while setting up micro or small enterprises. These training
programmes have attracted the attention of the educated unemployed youths and have created
confidence in them which led to the self employment and creation of better employment. The
individual MSME-DIs conduct the following training programmes:a) Industrial Motivation Campaign
b) Entrepreneur Development Programme
c) Entrepreneurship Skill Development Programme
d) Management Development Programme
e) Skill Development
f) Business Skill Development Programme
Other Specialized programmes like Bio-technology, etc
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Lesson 9. WOMEN ENTREPRENEURSHIP
Module 2. Concept and working of entrepreneur
Lesson 9
WOMEN ENTREPRENEURSHIP
9.1 Introduction
In today’s male dominated society women constitute around half of the world’s population. In
older days, probably in almost all society, the role of woman was confined to household
activities. But in today’s globalized modern era, the picture has changed. Woman are playing
active role in many different fields like academics, politics, sports, social work and also as
entrepreneurs. In the United States, women own and manage about 25% of all business.
In Canada one third of small businesses are owned and managed by women and in France it is
one fifth. In Britain in recent years, there is three times faster increase in self employed women
as compared to self employed men. In developed nations women entrepreneurs have chosen
different activities like retail business, hotels and restaurants, education, insurance,
manufacturing etc. According to one of the estimate, in India at present woman entrepreneurs
constitute about 10% of total entrepreneurs and their number is increasing every year. Along
with rest of modern world, Indian women have also come a long way in a step with changing
times.
9.2 Status of Women in India
India possess the world’s largest number of professionally qualified women. The number of
female doctors, surgeons, scientists and professors are more in India a USA. India has more
working women a any other country in the world. Their participation ranges from menial to
agriculture labourers, medical surgeons to bus conductors to air line pilots. But even with so
much progress generally women are socially, politically and economically weaker a man.
Government is taking all necessary steps to bring woman at par with men. Certain government
support bodies like National Human Rights Commission for woman, National Council of
Women perform activities for upliftment and betterment of women. At central level, there is
entire ministry which formulates and implements policy for women.
9.3 Concept of Women Entrepreneurs
Women entrepreneurs may be defined as a women or group of women, who intiates, organizes
and runs a business enterprise. According to Schumpeterian concept of innovative
entrepreneurs, woman who innovate initiate or adopt a business activity are called women
entrepreneurs. The government of India has defined woman entrepreneurs based on women
participation in equity and employment of a business enterprise. Accordingly a woman
entrepreneur is defined as ‘An enterprise owned and controlled by a women having a minimum
financial interest of 51 percent of a capital and giving at least 51 percent of the employment
generated in the enterprise to woman.’ But this definition of women entrepreneurs by
government of India is criticized due to the condition of employing more than 50 percent of
woman workers in the enterprise owned and run by woman. In nutshell, women entrepreneurs
are those woman who think of a business enterprise, initiate it, organize and combine the factors
of production, operate the enterprise and undertake risks and handle economic uncertainty
involved in running a business enterprise.
9.4 Growth of Women Entrepreneurs in India
According to constitution, women enjoy all the rights and privileges at par with men. But in
our male dominated society, in real life, situation is not the same. Even in modern world, in
many part of the country she is considered as weak (Abla) and dependent on men. There is low
literacy level, low work participation among women a men. As such Indian women enjoy a
disadvantageous status in our society. Such non conducive conditions are responsible for low
women entrepreneurship development in the country. Women’s entry into business or say
entrepreneurship is traced out as extension of their kitchen activities mainly pickles, masala
powders and papads. With growing awareness about business and spread of education among
women with passage of time, women entrepreneurs have started their enterprise apart from
their traditional sectors (pickles, masala powders and papads) to engineering, electronics and
energy. In Gujarat they have excelled in manufacturing solar cookers, In Maharastra, in small
foundries and in orissa they have excelled in enterprise of TV capacitors. Some of notable
woman entrepreneurs of India include Smt. Sumati Morarji of shipping corporation, Smt
Sharayu Daftary of antomobiles radiators, Smt Yamutai Kirloskar of Mahila Udyog limited,
Smt Vimal Pitre of Surgical Instruments, Smt Manik Vandrekar of leather crafts, Smt Radanika
Pradhan of plastic industries, Smt Prerang Thakor of Jayant vitamins, Smt Nina Malhotra in
exports, Smt Rajani Agrawal in engineering, Smt Sehnaz Hussain in beauty clinic in cosmetics,
Smt Wadia in fabrics, Smt Wehesa Reshma in fast food.
9.5 Problems of Women Entrepreneurs
The basic problem of women entrepreneurs is that she is a woman. Being women she has more
responsibility towards family and society. In modern society joint families are breaking up.
This manifests into loss of elderly support. This acts as a constraint for women entrepreneurs
who has to leave home for the workplace. Even though constitution provides equal status to
women, women entrepreneurs do face certain problems due to male dominated mindset.
Although some women entrepreneurs have excelled in their enterprise, the fear of success
haunts women in general. Some psycho social factors inhibiting the growth of women
entrepreneurs include poor self image of women, inadequate motivation, discriminating
treatment, faulty socialization, role conflict, lack of courage and self confidence, inadequate
encouragement, lack of social acceptance, unjust social economic and cultural system, lack of
freedom of expression, afraid of failure and criticism, susceptible to negative attitudes, non
persistent attitude, low dignity of labour etc.
9.6 Developing Women Entrepreneurs
For all development programs initiated by government, women should be considered as a
special target group. Special attention should be paid for their education right from primary
level. It is said that women entrepreneurs lack managerial status and hence special training
program on management skill should be organized. Vocational training should be extended to
women community which will help them to better understand basics of production
management. Existing and new women entrepreneurs should be counselled by
managerial/technical experts at regular intervals. Financial constraints should be reduced.
Women’s development corporations have to gain access to open ended financing. State
financial institution should be allowed by making constitutional provisions to extend purely
trade related finance to women entrepreneurs. State government should give priority in
allotment of industrial plots to women entrepreneurs and should make provisions of marketing
and sales assistance. Government should make provision for arranging trade shows of women
entrepreneurs.
Following specific guideline should be kept in mind by all the women entrepreneurs
1. They should not undervalue their abilities. They typically tend to give away too much
and charge too little. This generally happens in service based industry where they may
charge by the hour instead of charging a fee on the merit of knowledge or service
rendered.
2. They should learn to juggle family with business. Compared to men, it is difficult for
women to completely ignore family obligations while pursuing business. It is important
to sustain a personal life and balance family obligations with professional ones, if they
are to be successful and happy.
3. They also need to be more persistent and assertive to make their presence felt in this
male dominated business world.
Constitution provides equality of opportunity in all spheres to the Indian women. But
unfortunately the development activities initiated by government have benefited only small
section of women (urban middle class women). Women entrepreneurs face many problems.
Women entrepreneurs must be molded properly with entrepreneurial traits and skills to meet
the changes in trends and also be competent enough to sustain and strive for excellence in the
entrepreneurial arena.
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Lesson 10. GENERATION, INCUBATION AND COMMERCIALIZATION OF IDEAS
AND INNOVATIONS
Module.2 Concept and working of entrepreneur
Lesson 10
GENERATION, INCUBATION AND COMMERCIALIZATION OF IDEAS AND INNOVATIONS
10.1 Introduction
Choosing a good idea decides the success to an enterprise. The idea should be such that it can be independently
managed by an entrepreneur. To arrive at such an idea, it is necessary to pursue/ think about at least five to ten
ideas initially and then screening and analysis, arrives at a most promising single idea.
10.2 Sources of Ideas
1. Consumers : The products and services are meant to satisfy the consumer’s needs. Thus entrepreneurs
should try to search unsatisfied needs of consumers.
2. Existing products : Entrepreneurs should systematically analyze the existing products in the market. It
will give an opportunity to further improve upon the existing products to match with the consumer’s need.
3. Distribution channels : Channel members are responsible for making the product available to the
consumers. They frequently interact with the consumers and thus know their hidden needs. Thus they
provide meaningful clue after developing new products or modifying existing products.
4. Research and Development : R & D efforts by existing organization, leads to new ideas for the
organization.
10.3 Methods of Generating Ideas
1. Focus Groups : Groups of individual providing information in structured formats.
2. Brain Storming : A group method for obtaining new ideas and solutions.
3. Problem inventory analysis : A method for obtaining new ideas and solution by focusing on problems.
4. C reative problem solving : A method for obtaining new ideas focusing on parameters.
5. Reverse Brain Storming : A group method for obtaining new ideas focusing on the negative.
6. Synectics : A method for individuals to solve problem through one of the four analogy mechanism :
Personal, Direct, Symbiotic and Fantasy
7. Gordon Method : A method for developing new ideas when the individuals are unaware of the
problem.
8. Check list method : Developing a new idea through a list of related issues.
9. Free Association : Developing a new idea through a chain of word association.
10. Forced Relationships : Developing a new idea by looking at product combinations.
11. Collective notebook method : Developing a new idea by group members regularly recording ideas.
12. Heuristics : Developing a new idea through a thought process progression.
13. Scientific method : Developing a new idea through inquiry and testing.
14. Value analysis: Developing a new idea by evaluating worth of aspects of ideas.
15. Attribute listing : Developing a new idea by looking at the positive and negative attributes.
16. Matrix Charting : Developing a new idea by listing important elements on attributes axes of a chart.
17. Big dream approach : Developing a new idea by thinking about constraints.
18. Parameter Analysis : Developing a new idea by focusing on parameter identification and creative
synthesis.
10.4 Product Planning and Development Process
Several ideas can be obtained by using the idea generation method. After careful analysis and screening, potential
ideas can be further developed into a final product or service. This is carried out through product planning and
development process which is divided into five stages. Idea stage, Concept Stage, Product development stage,
Test marketing stage and commercialization.
1. Idea Stage : In this stage new product ideas are generated and potential ideas are selected from among all the
generated ideas. Only the best idea is selected, considering its market value and requirement of organization
resources for its development into product.
2. Concept Stage : At this stage only potential viable ideas are developed and refined after obtaining consumer
perception about the same. At this stage product is not actually produced but preliminary reactions are obtained
from prospective consumers. Based upon responses, the product can be refined/ reformulated according to the
consumers need, or dropped.
3. Product Development stage : At this stage actual, physical product is given to the consumer panel for
evaluation.
4. Test Marketing Stage : A market test can be carried out to increase the probability of successful
commercialization. At this stage actual sales results are obtained indicating the acceptance level of the consumers.
Based on the feedback from consumers necessary improvements are incorporated in the product.
5. Commercialization : After knowing fully the success probability, the organization then decides to finalize all
features of the product. At this stage marketing department carries out related promotional activities and
production department for mass production of the product.
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