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INTRODUCTION
Entrepreneurship is an evolved thing. With the advancement of science and technology it has undergone metamorphosis change and emerged as a critical input for socio-economic development. Various writers have developed various theories on entrepreneurship and popularized the concept among the common people. Theories Of Entrepreneurship Economic Psychological principles Sociological principles
principles
ECONOMIC THEORY
Entrepreneurship and economic development are interdependent. Economic development takes place when a country' real rational income increases overall period of time wherein the role of entrepreneurs is an integral part. Entrepreneurship and economic growth take place when the economic conditions are favorable. Economic incentives are the main motivators for entrepreneurial activities. Economic incentives include taxation policy, industrial policy, sources of finance and raw material, infrastructure availability, investment and marketing opportunities, access to information about market conditions, technology etc.
PSYCHOLOGICAL THEORY
Entrepreneurship gets a boost when society has sufficient supply of individuals with necessary psychological characteristics. The psychological characteristics include need for high achievement, a vision or foresight, ability to face opposition.
SOCIOLOGICAL THEORIES
Entrepreneurship is likely to get a boost in a particular social culture Societys values, religious beliefs, customs, taboos influence the behavior of individuals in a society. The following theories explain how sociological factors accelerate the growth of entrepreneurs: Theory of religious beliefs Theory of social change
Inducement of profit - The spirit of capitalism intertwined with the motive of profit resulted in creation of greater number of business enterprises. In fact, this theory suited the British rulers, who desired to encourage European entrepreneurship in India. This theory was vehemently criticized by many researchers because of the unrealistic assumptions.
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Historic shift as a factor of initiating change-Hagen in his book, How Economic Growth Begins, depicts historic shift as the crucial force which has brought about social change technological progress thereby leading to the emergence of entrepreneurial class from different castes and communities. Withdrawal of status respects as the mechanism for rigorous entrepreneurial activity-Closely consistent with the historic shift it is the social group that plunges into rigorous entrepreneurism which experiences the status withdrawal or withdrawal of status respects.
CULTURAL THEORIES
Entrepreneurship is the product of culture. Entrepreneurial talents come from cultural values and cultural system embedded into the cultural environment. Hoselitzs Theory The supply of entrepreneurship is governed by cultural factors, and culturally minority groups are the spark-plugs of entrepreneurial and economic development. In many countries, entrepreneurs have emerged from a particular socio-economic class.
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Entrepreneurs must be able to perceive 1.buying and selling opportunities in different markets. 2.the possibility of transforming input into output 3.determine the profitable activities Evaluation of Leibensteins theory It analyzes role of entrepreneur in terms of efficiency. It tells us why growth rate is different in different countries. This theory shows that a firm will achieve maximum efficiency when the firm minimizes cost.
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Opportunity structure: It consists of the availability of capital management and technological skills, information concerning production methods, labour and markets. This structure is required to increase the probability of entrepreneurial activity. Labour structure: it is concerned with the supply of competent and willing labour . The supply of labour is governed by several factors such as available alternative means of livelihood, traditionalism, expectations of life etc.