MOI UNIVERSITY

SCHOOL OF ARTS & SOCIAL SCIENCES

DEPARTMENT OF SOCIOLOGY & PSYCHOLOGY
COURSE OUTLINE
COURSE CODE: SAS 302 COURSE TITLE: ENTREPRENEURSHIP
YEAR: 3SEMESTER:2 AC. YEAR: 2016/2017 SEMESTER: JAN – JUNE 2017
INSTRUCTOR: KIROP K. ISAAC TEL: 0722 715 220 E-MAIL:courselecturer@gmail.com
CLASS HOURS: 2.00 PM – 4.00 PM VENUE: LH 1 CONSULTATION HRS: FRI 2.00 PM - 5.00 PM
PRE-REQUISITE None
PURPOSE  To equip learners with the necessary knowledge, skills and attitudes that will enable them start,
operate and manage a personal or group business.
 To instill the drive necessary for any of them to venture into profit making activities.
COURSE OBJECTIVES By the end of the course unit the learner should be able to:-
 Demonstrate positive attitude towards self-employment
 Identify variable business opportunity
 Understand the factors liable to affect the success of a business
 Portray desire to venture into business
 Apply entrepreneurial competencies in business situations
 Acquire managerial skills necessary for running a successful enterprise.
COURSE CONTENTS/TOPICS

1. ATTRIBUTES OF ENTREPRENEURS AND ENTREPRENEURIAL CAREERS

1.1 Introduction and background
1.2 Meaning, Nature, Characteristics&Evolution of Entrepreneurship in Kenya
1.3 Entrepreneurship and Innovation
1.4 The Entrepreneurship Culture
1.5 Entrepreneurial Cultural Practices in Kenya
1.6 The Theories of Entrepreneurship
1.6.1 Sociological
1.6.2 Economic
1.6.3 Psychological
1.6.4 Financial
1.6.5 Trait
1.7 Role of Entrepreneurship in Economic Development

2 ENTREPRENEURSHIP AND MANAGEMENT

2.1 Principles of management
2.2 Levels of management
2.3 Roles of managers
2.4 Skills needed by managers
2.5 Functions of managers

3 ENTREPRENEURIAL PERSONALITY AND BUSINESS ACUMEN

3.1 Driving forces to entrepreneurship
3.2 Myths and realities
3.3 Stages of entrepreneurial development/ Preparation of entrepreneurs
3.4 Procedures of Starting a Business
3.5 The Process of Screening a Business Idea
3.6 The Generation and Sources of Business ideas
3.7 Business Incubation
3.8 Product Safety and Liability

4 FUNCTIONAL MANAGEMENT DISCIPLINES

4.1 Accounting & Finance
4.1.1 Introduction to Accounting & Book keeping
4.1.2 Accounting Equation and Balance Sheet
4.1.3 Financial statements

4.2 Marketing
4.2.1 Marketing Requirements Assessing and Selecting a Suitable Market
4.2.1.1 Marketing Functions and strategies
4.2.1.2 The Marketing Mix
4.2.1.3 The 4 Ps (the four Ps)

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 4.2.1.4 Factors which may influence an entrepreneur in choosing a promotional method
4.3 Human Resources
4.3.1 Nature of Staffing
4.3.2 Staffing Process
4.3.3 HR Planning and Selection of Human Resources
4.3.4 Labour/ Industrial Relations

4.4 Production / Operations

4.4.1 Production Management and Work Study
4.4.2 Product Design and Development
4.4.3 Facilities Location
4.4.4 Facility Layout
4.4.5 Production Forecasting
4.4.7 Inventory Management
4.4.8 Quality Control

5 ORGANIZATIONAL FORMS
5.1 Unincorporated Business
5.2 Incorporated Business / Joint Stock Companies
5.3 Memorandum of Association
5.4 Articles of Association
5.5 Co-operative Societies

6 RESOURCE NEEDS FOR ENTREPRENEURSHIP

6.1 Sources of Business Finance

7 BUSINESS PLAN DEVELOPMENT

7.1 Planning for the Business Venture
7.2 Business Plan

8 ISSUES IN ENTREPRENEURSHIP
8.1 Ethical
8.2 Political
8.3 Gender
8.4 Economic
8.5 Cultural

9 CURRENT ISSUES IN ENTERPRENEUSHIP

9.1 Business Ethics
9.2 Aspects of Management Ethics
9.3 Role of an Organization (entrepreneurs) to Stakeholders
9.4 Social Responsibility
9.5 E-Commerce / e-business
9.6 E-Government
9.7 E-Procurement
9.8 Globalization Trends

TEACHING METHODOLOGIES Lectures, Discussions, Assignments, Tutorials, Class presentations, Handouts, Case studies, workshops,
Internet Research

EVALUATION 2 CATs = 20% *NOTE: SIT-IN- CAT - 11-06-2016

2 Assignments = 10%
End of Semester Exam = 70%
TOTAL 100%
REFERENCES:-
1. Drucker P.F., Innovation and Entrepreneurship,Kurako
2. D.F &HodgetsR.M.,Entrepreneurship: Theory, Process and Practice, Thomson, South West Publishing co.
3. Timmons J.A., New Venture Creation: Entrepreneurship for 21stCentury, Burr Ridge: Irwin
4. Sexton D.L., Entrepreneurship: Creativity and Growth, New York, McMillan
5. Dillinger M.J., Entrepreneurship, Strategy and Resource, Prentice Hall
Other support materials
6. Various application manuals and journals
7. Variety of electronic resources as may be prescribed by the lecturer

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 MOI UNIVERSITY
SCHOOL OF ARTS AND SOCIAL SCIENCES
DEPARTMENT OF SOCIOLOGY AND PSYCHOLOGY
ACADEMIC YEAR 2016/2017

ASSIGNMENT I - DUE DATE 2ND MAY 2017

SAS 302: ENTREPRENEURSHIP

INSTRUCTIONS:-
 Answer questions ALL Questions
 ASSIGNMENT DUE DATE: 2ND MAY, 2017 * NOTE: SIT CAT – 02-06-2017; END OF SEM EXAMS:5TH MAY-33RD
MAY 2017

Q1. Read the case below and answer the questions that follow.

The Comecraft Group

Mannu Chandra is the chairman of The Comecraft Group in Kenya which is engaged in work covering many
aspects within the framework of a joint family with business interests in more than fifty countries across the
globe and a workforce numbered in many thousand. He points out that his companies grew significantly in
the last two decades due to a number of factors. He shared his experience in a recent workshop of young
entrepreneurs in Nairobi:

I’ve had to learn a lot during the last few years. From a marketing standpoint, most of what I learned has
been from my fellow marketers and mentors. But if you want to grow a multimillion-dollar business, it takes
more than just being an amazing marketer. Below are some of the secret ingredients that allowed my team
and me to grow a company significantly in just three years.
Although many companies claim to be customer focused, I’ve found few businesses truly are. At Comecraft
Group we decided to focus on the customers we have, creating a relationship with each one and working
toward helping each customer get what they want out of our service … and then some. Because of that,
we’ve had an extremely low customer attrition rate, and that low attrition rate has been the biggest
contributor to our crazy growth.

Your goal is always to create an experience for your customers, as well as to provide additional value in the
form of a monthly newsletter, semi-regular educational items, or other mailers with valuable information.
But above all of that, don’t take your customers for granted. Most businesses feel that they are entitled to
“their customers.” Once someone becomes a customer, nearly all communication stops. Offers may or may
not get sent out, but of course the good offers are for new customers only. Instead of being customer-
focused, these incentives seem new-customer-focused.

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If you are going to have a company, you need a team of people to help support your efforts. Like many
people, I used to think that having employees was a zero-sum game, where either I won or they won. The
reality of it is there is no reason having employees has to be a zero-sum game. Can’t we create a world
where everyone wins? If you focus on taking care of your employees, they will take care of your customers
- and I need both great employees and great customers to be in business.

Striving to build a place where people want to come to work and they enjoy what they do has been very
rewarding for me personally, but it also had an unexpected benefit; we actually make more money and my
employees work harder. I would love to say that I am the reason Comecraft Group grew so fast and has
been so successful, but that’s not the case. I was just a piece of the pie. I need great employees who are
passionate about what they do to take care of our amazing customers, so the customer will want to come
back again and again.

I know that statement is kind of like a mom telling you how cute her baby is, so let me explain what I mean.
One trend I’ve noticed in business is owners and companies asking themselves, “How can I create an item
that requires the least amount of work from us, the company?” If your goal is a lifestyle business, there is
nothing wrong with that question, but in most cases you’re limiting yourself. If your goal is to grow a larger
company, that is the wrong question. The right question is, “What do I need to create or what does this
product need to do to get the results my customers both want and need?”

When I created Comecraft Group, I figured out that what my customer really wanted was a newsletter that
sounded like they wrote it, without them having to write a single word. There were far easier and less labor-
intensive ways for me to be in the newsletter business, but for the customers I was targeting, a generic
newsletter product just wouldn’t cut it. At the end of the day, I look up and realize there has been a lot of
blood, sweat, and tears to grow Comecraft Group by a significant percentage in just few years. But
regardless of how fast you’re looking to grow, I know without a doubt that if you focus on the these key
strategies outlined above, you’ll find great success.
--------------------------------------------End of the case--------------------------------------
Questions

(a) From the case, explain the factors that were critical for success of The Comecraft Group.
[10 marks]
Focusing on the customers they have, creating a relationship with each one and working toward helping
each customer get what they want out of their service … and then some. Because of that, they’ve had an
extremely low customer attrition rate, and that low attrition rate has been the biggest contributor to their
crazy growth.
Don’t take your customers for granted. Most businesses feel that they are entitled to “their customers.” Once
someone becomes a customer, nearly all communication stops. Offers may or may not get sent out, but of
course the good offers are for new customers only. Instead of being customer-focused, these incentives seem
new-customer-focused.

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A team of people to help support your efforts. Like many people, they used to think that having
employees was a zero-sum game, where either he won or they won. The reality of it is there is no
reason having employees has to be a zero-sum game.
Striving to build a place where people want to come to work and they enjoy what they do has
been very rewarding
(b) From your experience, explain other factors other than the ones in the case that are critical for success
of any business. [5 marks]

1. The idea
The strength of the founder's idea might seem to be the biggest factor responsible for a business’s success,
but it’s really only a small element of how things might turn out. Consider Google, whose core idea of an
interactive web search was, at its start, already being implemented by dozens of competitors. But because
Google's founders' plan, execution and timing were superior, their lack of originality didn’t cripple their
chances of success.

2. The leader(s)
Leadership is important in startups. Leaders make the decisions, set the vision and inspire people to work
harder for a group’s goals. Put an incompetent leader in place, and not only will high-level decisions be
made less effectively, but the morale of the group could be put in jeopardy. On the other hand, a skilled
and experienced leader can turn even a weak idea into a successful one.

3. The team
Entrepreneurs are important, but they rarely accomplish great things alone. Successful businesses employ
anywhere from a handful to hundreds of people, and those people will be the ones maintaining the
business, driving innovation and executing your high-level goals. Hire the right people for the job, and
you’ll never have a problem. Hire the wrong people and your best-laid plans might be ruined.

4. The capital
Working capital is important; so are your early stages of funding. Don’t panic if you can’t find an investor
-- personal and familial investments are possibilities. And don’t rule out the possibility of opening a line
of credit. Once credit is secured, remember to keep an eye on your cash flow: One wrong move here could
put your cash into negative territory.

5. The plan
The plan has to involve more than just your core idea. It includes your goals, your targets, your
operations and more. Everything written down in your business plan counts as part of your “plan,” and the
degree to which you researched and fine-tuned your plan will greatly affect your chances of eventual
success.

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6. The execution
That being said, a plan is only as valuable as its ability to be executed. If you have a great plan, but botch
its execution, your entire enterprise could be compromised. On the other hand, if you have an adequate
plan and execute it perfectly, you’ll have a solid leg to stand on and a key understanding of what did and
didn’t work from your original concept.

7. The timing
Timing is important from a competitive perspective, and it’s led many businesses to prominence despite a
chaotic and busy market at their time of entry. When YouTube came on the scene, for example, there were
already dozens of video-streaming platforms. But because YouTube launched at a critical moment -- after
high-speed Internet became the norm but before any other streaming service had risen to prominence -- it
enjoyed radical early success.

8. The crisis response

No matter how well you plan or how hard you work, something is going to go wrong. How you respond to
a crisis is far more important than how likely you are to avoid one. One poorly treated crisis is all it takes
to put a company under, so think carefully about your response plan.

9. The marketing
How you package and market your business matters. An inferior product that’s branded in a more
appealing, exciting, and unique way will always outsell its superior product that happens to have plain,
non-memorable branding. This point may seem superfluous, but it critically affects customers’ buying
decisions.

10. The growth

Finally, the path you choose toward growth plays a significant role in how you end up. Grow too fast and
you’ll stretch yourself thin. Grow too slowly and you’ll never get anywhere. So, find a balance, and treat
your growth carefully.

(c) Drawing from the case and your own experience, discuss the factors affecting entrepreneurial
development in Kenya, citing specific examples and show how they can be resolved.
[10 marks]
1) Availability of finance or funds.
Capital is always the major challenge to those who wish to start businesses. Availability of finance of a
starting capital will favour entrepreneurship. Financial assistance from families, friends and relatives further
ensures that the entrepreneurs are better placed financially.

2) Modern technology.
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Technological advancement has made entrepreneurs get more skills in improving their businesses and
helping the entrepreneurs have more advanced business skills in starting and running the business
successfully.

3) Infrastructures.
Development of infrastructure favours entrepreneurship. With good and developed infrastructural facilities,
operational and other costs are reduced. Developed infrastructure also reduces efforts and improves the
viability of projects through higher profit margins.

4) Appropriate knowledge and skills.

Entrepreneurial practices are favoured by appropriate knowledge and skills. An individual will easily go
into starting a business when he or she has the appropriate skills and knowledge.

5) Appropriate training.
Entrepreneurial practices are easily encouraged when one has gone through training and acquired the
relevant and appropriate knowledge in entrepreneurship.

6) Government policies.
The government can also come in to provide incentives to new business persons. Entrepreneurs take this
opportunity to venture into businesses with assurance that they have the government support. The
government can choose to reduce taxes on new businesses, can provide free electricity, and can provide
good roads and such other incentives to attract more businesses.

7) Individual strengths and talents.

An individual’s strengths and/or talents can help him or her or even lead him or her into starting a business.
Some entrepreneurs are motivated by what they see from others while others are just individual who come
to be entrepreneurs through their talents and strengths.

8) Availability of markets.
Availability of markets, in this case customers, will motivate an individual (an entrepreneur) to start or
improve on his or her products, targeted at satisfying customer’s needs. An entrepreneur is able to scan the
market and come out with a general opinion or survey of what the customers need and is not produced or
available in the market so that he or she can supply that product or service.

9) Availability of resources.
Without resources, entrepreneurs find it a challenge to put their ideas into important investments. Resources,
both physical and human among others are very important in entrepreneurship. An entrepreneur will be
motivated to go into a business when there are resources to help him or her start and run the business easily
and effectively.

10) Culture
Environmental impact on the business is important for entrepreneurs. Some cultural values might make
entrepreneurship to grow or rather to develop faster than others. For instance, there are some cultures that
encourage people through role models to develop well through entrepreneurship and this leads to people
following other people’s lines of success.

11) Natural factors.

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Entrepreneurship can also be encouraged by natural factors. For instance, an entrepreneurship will be
encouraged to get into a business when there are favorable natural factors.

12) Political stability.

Political stability favours entrepreneurial practices to a larger extent. For instance, when there is political
stability in a country, entrepreneurs seem to invest, start and run businesses successfully while when there
is political instability, the businesses are mostly affected and entrepreneurs run away and are discouraged
to start businesses.

13) Competition.
Fair competition in the market will encourage entrepreneurship in a country. For instance, when businesses
are almost all in one level so that there is no monopoly, entrepreneurs will tend to get into business and
work hard to succeed.

Q2. Are entrepreneurs born or made? Discuss this statement using various theories of entrepreneurship.
[15 marks]

Entrepreneurs are not born. Entrepreneurs are not like athletes, they don't need natural inherent body and
muscles. An athlete's child may grow up an athlete, but it would not happen in an entrepreneur's family.
Many businesses bankrupted everyday, including some entrepreneur's family. However, entrepreneurs are
nurtually made, and they own some special qualities and also need some trainings and experiences as
athletes. Many people from non-entrepreneur's families start their own business and become entrepreneurs
everyday. Dhirubhai Ambani, the most enterprising business man who's father is a school teacher, started
his business on his own (Prakash, n.d). Warren Buffett, is not born as an entrepreneur either. He started
his company when he was 27 years old using his earns from his pervious investments, made a great profit
from his unique and accurate opinion on the stock market, and his Berkshire industrial Kingdom became a
famous huge business in the world (Kennon, n.d). There are many examples of entrepreneurs who started
their businesses as a green hand, instead of inheriting from their families. Thus we could not say that
entrepreneurs are born, however, the entrepreneurs acquired many qualities that made them success.

The main quality of entrepreneurship is innovation, which is not obtained naturally. Innovation is a new
product, a new technology, a new source, and a new market (Mariotti and Glakin, 2010). There are many
examples of entrepreneurs bankrupted due to lack of innovation. For example, Carrozzeria Touring, an
Italian automobile coachbuilder company, ceased his business in 1966, due to the substitution of the new
automobile construction (van den Brink, n.d). On the other hand, the famous company, Apple, make its
success by innovation. As we all know, Apple will release his new product or innovation of its existing
products every year, and the big success of iphone, ipad and imac make Steven Jobs the most well-known
famous entrepreneur. It is the same with Microsoft. Microsoft releases its new products every year. We all
have noticed that every year we will update our system to the new window. The popularity of the system
proves the success of Microsoft, and makes Bill Gates the famous entrepreneur.

After all, the sense of innovation is not grown natural, it comes from opportunities. When there is
problem, there is opportunities (Mariotti and Glakin, 2010). Several years ago, there is no softwares in the
computer, and Bill Gates made his entrepreneurship from creating the first software, window. The Body
Shop International, was created by Anita Roddick because " she was tired of paying for unnecessary
perfume and fancy packaging when she bought makeup" (Mariotti and Glackin, 2010). The problem that

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Anita faced made her start her own business to solve the problem. The problem finding quality is the
quality that everyone were born with, and the opportunity is just coming from those problems.

The second quality of entrepreneurship is experience, which is exactly extracted from posteriority. About
60 percent of the entrepreneurial leaders are "transitioned", and the number one ranking factor of success
is the experience as the employee (Pinelli, 2001). People can learn terminologies and skills for business
evoked as their language, and the procedures of running a business become his or her conditional reflex,
which will make their future operating business effectively and efficiently. From the previous experience,
the entrepreneur can easily tackle the key of a problem and forecasting the development of his or her
business. Yu Min Hong, a great entrepreneur, started his tutoring school, New Oriental, after his
experience of teaching and tutoring in Peking University. He extracted his way of teaching from his
previous experience of teaching, and used the teaching method in his company. The big success of New
Oriental make Yu Min Hong one of the greatest entrepreneurs in China, and his method of teaching
spreads all over the country. The rules of business are simple, making a business plan, ordinating your
customers, operating and developing the business. From your previous experience, you will have the
blueprint of your business, and moreover, you have already have your customers when you start. Thus
with your employment experience, you are actually jumping the first two steps, which are making a
business plan and ordinating customers, and directly shortcut into the third step -- operating and
developing the business.

The third quality of entrepreneurship is knowledge, which is not inborn but acquired from education. "
And if experience is the best education, the classroom is not far behind. Higher education was ranked the
number one factor by almost one-third of respondents, just behind employee experience" (Pinelli, 2001).
Entrepreneurs are facing with various of challenges from finance, operation, organization, and laws.
Operating the business requires you understand financial statements. Financial statements, consisting of
income statement, cash flow statement and balance sheet, is a tool for entrepreneurs to track their
operations (Mariotti and Glackin, 2010). The knowledge of financial statement is not acquired naturally, it
is obtained from study. Not only the understanding of financial statement, but also the financial ratio
analysis are needed as an entrepreneur. In order to cooperate with government, the entrepreneur needs to
know the regulations such as taxes and franchising. The lack of finance knowledge may be fatal. The
Native Americans sold their lands to a British hundreds years ago and they are excluded from their
homeland by the foreigners, however, if they lent the lands with a low rate, they will still be able to buy it
back today and even gained some returns from lending. Henry Ford surrendered most of his stocks for the
demanded capital, and he spent even more years than he expected to receive money to buy back his stocks
(Mariotti and Glackin, 2010). Some of the entrepreneurs even gain returns from investing using finance
knowledge. Warren Buffet-"The Oracle of Omaha" , Peter Lynch-mutual fund manager, Benjamin
Graham-"The Father of Value Investing", give us vivid instances of making money just through their
wisdom of investing strategy driven from their solid knowledge obtained in school (CapitalVia: Global
Research Limited, n.d). The knowledge will drive the entrepreneurs make the right decision for their
business and operate better.

The fourth quality of entrepreneur is a good sense of dealing with people, communication. People are not
born with good communication since we all start from learning languages, but they can start learning
communication skills at an early age. Communicating well means the entrepreneurs will get their potential
customers and gained more customers from a fabulous customer service. Salespeople will probably
become successful entrepreneurs since they will touch the customers directly and know their needs
(Mariotti and Glackin, 2010). Great entrepreneurs in the U.S. Such as Ray Kroc --founder of McDonald,
Aristotle Onassis, King C. Gillette, and W. Clement Stone, are started from sales (Mariotti and Glackin,

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2010). They sensed people's need and started their entrepreneurship. A good communication is prepared,
not born, in order to sell your product. The entrepreneurs need to know their products, their business field,
as well as their customers. Still, communication skills are built up from the accumulated experience. We
learn communication skills through the relationships and the society of others. It is a connection between
people, and the successful entrepreneurs will know the people's pros and cons through communication,
thus will determine their future path of the business.

Apart from innovation, experience, knowledge, and communication, qualities such as teamwork &
leadership, integrity, and passion are also important (Pinelli, 2001). Teamwork and leadership is an
essential ability that was gained from life, not born. It required the entrepreneur "address complex
problems by utilizing strengths of different group members" and "create a synergy that increases
innovation and successful outcomes" (Reimers and Williams, 2009). The team has a big impact on the
business, so the entrepreneur need to organize his team well. It is the entrepreneur and leader's task to
"communicate and listen, ask questions and summarize, articulate a goal, and build members confidence"
(Reimers and Williams, 2009). These tasks like communication are not born, however, they are trained
through tasks and group projects. That's why the business schools are teaching and training students the
above skills. In addition to it, integrity, which leads to an honest business, is also a personal skill that were
highly influenced from the living environment, not born. The business would not exist long if it cheated
its customers. "Integrity is a deal-breaker" (Anderson, 2008). The entrepreneurs need to convince the
clients to buy their product or invest their companies through the method of integrity, so that they will
gain profit and get funding for their business. Passion, similar to ambition in entrepreneurship, makes your
employment and business experience upgrade into entrepreneurship level (Kamai, 2011). Everyone have
passion, and passion makes entrepreneurs start and grow their businesses. Passion is a personal quality
that was acquired from experience. It is a kind of confidence of your business you alight with. Only when
the entrepreneur targets his or her goal, will he or she have passion in the business. Thus, Teamwork &
Leadership, integrity and passion are not made, but acquired after born.

Q3. Discuss in details the motivational and non-motivational influences on entrepreneurship.

[15 marks]
motivational influences on entrepreneurship.
 Change - Entrepeneurs constantly want change and also want to be the bearers of the change. They are
problem solvers and want to disrupt the status quo. They have a vision ("I want to aggregate the world's
information" or "I want to put a PC in every desk") and go about attempting to change - some succeed
and others don't.
 Challenge - Many people who like to startup want it for the challenge and want to handle big problems.
For such people, the typical job in a big corp is not challenging enough and too boring to be worth.
 Creativity - Running your own business lets you be more creative. For instance, you can experiment
with a new website design, new marketing strategy, create innovative products that attacks a known
problem in a different way, create new packaging and new advertising campaigns. You have an infinite
room to bring in your creativity in a small business that you found.
 Control - Many guys who startup a business don't want to be pushed around and work in a
product/company in which they have no way to shape the destiny. They want to work at their own time,
own pace, location of their choice, employees of their choice and have an active role in deciding the
direction of the company.
 Curiosity - Successful Entrepreneurs are always curious and ask - "what if we do X this way?". They
want to understand the customer's minds, markets and competitors. They are constantly curious to see how

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their particular theory ("people want to do X with Y") works. In this aspect, they are no different from a
researcher who is searching for the truth.

 Cash - The final part is the cash. Many non-entrepreneurs think cash comes first for entrepreneurs. That
is never really true. If that were the case, there is no reason for an Ellison or Gates to keep pursuing their
business aggressively after they have made a billion dollars (which could get them almost everything a
person could want). However, cash (and multi-million dollar exits) do play a part in motivation to run a
business. Just that if it is the primary motivation, it is quite likely that the business would either fail or
have a premature exit.

Non-Motivational Influences on Entrepreneurs

Non-motivational influences or the dark side is used with reference to the stress producing tendency of
each of the issues discussed below.

Opportunity Cost
According to a study by Amit et al., (2009) entrepreneurs are more likely to undertake entrepreneurial
activities when their opportunity costs are lower. That is paid workers who chose to become entrepreneurs
do so because they have less to lose (i.e. lower opportunity costs) by leaving their paid work.

Stocks of Financial Capital:

This refers to the amount of money an individual is able to accumulate or stock. Evans and Leighton
(1989) found that the hazard into self-employment is constant in age. And older workers tend to have the
propensity to become entrepreneurs because they would have had time to build up the capital needed to
start a business unlike younger workers.

Social Ties to Investors

The importance of social embeddeding in the creation of a new business has been appreciated by scholars
of entrepreneurship. Aldrich and Zimmer (1986) note that entrepreneurs are highly social actors and they
actively embed themselves in social contexts. For instance, in the course of their entrepreneurship
research, they found that immigrant entrepreneurs in many cases formed ethnic networks to share capital
or business in order to overcome hostility in the host countries. Thus, given these conditions, an individual
will be propelled to become an entrepreneur.

Career Experience
This is closely related to unsatisfactory work experience. If an individual is not happy with his/her job and
has acquired a great deal of experience on the job and possesses entrepreneurial abilities, then there is the
tendency for the person to become an entrepreneur.

Life-Path Circumstances
This refers to individual circumstances within the life-path of individuals that propel them to become
entrepreneurs. These are factors such as:

Unsatisfactory Work Environment

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When an individual is dissatisfied with his work environment or finds the work environment unconducive,
then in rebellion, he will quit the job and seek alternative employment. However, if the individual in
question is an entrepreneur, then he is likely going to start his own business.

Negative Displacement
This arises when unforeseen circumstances in an individual’s life-path causes the person to make major
changes in lifestyle. This could be an accident, the loss of dear ones or sponsors etc. When such
occurrences happen, the individual is forced to undergo a drastic change in the lifestyle and as such may
become an entrepreneur.

Career Transition
This situation arises when an individual is between one career-related activity and another. For instance,
when an individual who was initially a copy typist goes to Secretarial School and obtains a certificate,
then there is a career transition which can necessitate the creation of a new business.

Positive Pull Influences

This refers to centers of influence within the society. That is, individuals whom people look up to as
mentors encourage a person to become an entrepreneur.

References

Brockhaus, R.H. (1982). The Psychology of the Entrepreneur. In Kent, C.A., Sexton, D.L., & Vesper,
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