QUESTION: Describe the theories that have embraced entrepreneurship culture. (10 Marks)

Entrepreneurship culture refers to the way of embracing the concept of finding new opportunities in business and gathering the necessary resources to fill the opportunity.

The following are theories that have embraced entrepreneurship culture:

1. Economic theory

Believes that entrepreneurial behaviour is influenced by the economic factors. This affects entrepreneurial activities. An entrepreneur is a person who brings factors of production into a combination that makes them better than before. They are seen as innovators who bring new production into a production process. According to Schum Peter, entrepreneurs are innovators. He further says that entrepreneurs can introduce new service or product through the following ways;

I. Introducing new methods of production

II. Finding new sources of materials by creating a new business

III. Opening new markets

IV. By providing some kind of industrial re-organization

According to Cantillon, entrepreneurs are seen as risk takers. Entrepreneur is a combiner of factors of production. In such a way wealth is created. The economic perspective is the important because there are several businesses starting up and for one to succeed, there has to an enabling environment in areas of government policies, infrastructure among others.

2. Psychological theory

It says that entrepreneurs have unique values, attitudes and needs which drive them. It is mostly concerned with personality traits as the main determinant of entrepreneurial behaviour. People are likely to become entrepreneurs because of high liking or independence, attitude and having unsatisfied needs. According to McClelland, high need for achievement is the main determinant of entrepreneurial behaviour. This high need for achievement tend to make them desire to take personal responsibilities and calculated risks. Entrepreneurs are people with little interest for routine activities and tend to work hard and take challenges. It is an inner concern that exists within a person and creates within that person a desire for success or accomplishment.

3. Sociological theory

It maintains that environmental factors such as believes, cultures, social structures of organizations are the main determinants of entrepreneurial behaviour. For example, the Asian community where it is believed that the one who succeeded in business is respected and seen as a leader.

4. Management theory

It emphasises on organization of resources in a specific way to attain profit. It says that entrepreneurs are organizers of economic undertakings. They are always seen to be leaders or as people with leadership traits. They are always visionary and make others see what needs to be achieved for example they have an impact on the behaviour of other leaders. They are seen as pioneers and they must be visionary.

5. Motivational Theory
- Motivation is that which causes you to behave in the way you behave i.e. the why of behavior
- Entrepreneurial motivation is those factors and forces or events that energizes an individual, his desires and the needs to go into and sustain a business venture.
- Types of motivation; i) Internal Motivation Factors ii) External Motivation Factors
- Internal Motivations and Drives: Refers to those personal traits and desires that induce a person to become an entrepreneur. Such motivations are;
i. Employment Creation Need.
ii. Need for independence or self-Reliance:
iii. Need for Power:
iv. Need for Recognition:
v. Need for Security:
vi. Self-actualization need:
- External Motivations and Drives
i. Infrastructure:.
ii. Credit Facilities:
iii. Information Support
iv. Pricing Policy
v. Tax Policy
vi. Legal Control
vii. Political Climate
viii. Technical Technology Assistance
ix. Training Consultancy Assistance
x. Friends Motivation

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Dullayo answered the question on May 1, 2018 at 20:58