NATURE AND DEVELOPMENT OF ENTREPRENEURSHIP

Factors Influencing Entrepreneurship

The

Individuals who initiate, establish, maintain and expand new enterprises generate entrepreneurship in a society.
individual.

Environment.

This factor is constituted by the socio-political and economic policies of the government and financial institutions and the opportunities available in a society as a result of such policies.

Entrepreneurs grow in the traditions of families and societies and internalize certain values and norms from these sources. The contribution from these socio-cultural factors, in the process of transmission, gets filtered through the individual whom it seeks to influence. Support system. Support systems that work for the development of entrepreneurs include financial and commercial institutions, research, training, extension and consultancy services/
Socio-cultural factors.

actually there are only two factors, on which entrepreneurship development depends. These are the Personal characteristics of the individual and the environment.

THE INDIVIDUAL The three main factors, which influence the individuals behavior are his motivational factors, factors concerning various skills, and the factors relating to his knowledge The motivational factor in itself has three major elements: >>Entrepreneurial motivation, >>Personal efficacy 1.Project development. An entrepreneur plans to establish an enterprise. 2.Enterprise management. Once an enterprise is started, its proper management which is crucial to its survival and growth, has to be ensured. >>Coping capability.

 ENVIRONMENT Knowledge about the economic-political environment, more particularly about the economic policies of the government and the financial as well as commercial institutions , is important for the small entrepreneur, which industries are being encouraged for the small entrepreneur, which industries are being given assistance of various kinds, etc., are information relevant to the prospective entrepreneur. >>SOCIO-CULTURAL FACTORS Socio-cultural factors like the family background and the norms and values of the immediate social circle contribute substantially to entrepreneurship development. >>The values and attitudes an individual has, are a function of the socio-cultural milieu in terms of developing normative behavior (norms of behavior) in the individual.

Normative Behavior
The following aspects of normative behavior are relevant for entrepreneurship.

>>Family expectations and pressures >>Familys role in small business

>>>>AGAIN,

IN THE NORMATIVE BEHAVIOR;

Risk-taking: Independence: \ Work. Socialization.

SUPPORT SYSTEMS Possibility of the success of an entrepreneur generally is enhanced by efficient and effective operation of the support systems.
>>Corporations specially set-up to develop entrepreneurship and small industries in a region; >>Financing institutions including banks; >>Extension services of the department of industries, Nongovernmental organizations of small industries or entrepreneurs, consultants, private agencies doing research, or providing services to entrepreneurs, training institutions, etc. >>Development administration in the district; >>Large industrial establishments interested in developing ancillary industries thereby helping small units to grow and develop.

Environmental

factors

at

the

micro

level

correlated

with

entrepreneurial

development and success;

>>Social/psychological factors including family, peer group formal and informal association, etc. >>Financial. >>Material availability. >>Technology availability/applicability.

macro level
>>Increase in profits. >>Increase in turnover. >>Increase in assets. >>Extent of diversification.

Developmental Theory of Entrepreneurship

According to research: it is extension of the process of occupational choice in the individual Process of occupational choice
The general process of the occupational choice can be shown as follows:

Model for Entrepreneurship Development

Developmental Theory of Entrepreneurship consists of the following five stages; >>Fantasy stage. This is dependent on many environmental and experiential factors. Stories with Achievement
Motivation themes could spur fantasies of being entrepreneurs.

>>Tentative decision making stage. At a certain stage, say after completing education or while working a
person tries converting the fantasies into realities, evaluating them and making a tentative decision of becoming an entrepreneur.

>>Stage to exploration to implement the decision. The person then tries to further explore details
about types of business to be undertaken, sources of finance, etc. As per the study the mean age at which this stage was over 28 years. Thus on an average entrepreneurs took 3.4 years in stage 3.

>>Trial stage. The entrepreneur launches the project but keeps an escape route like keeping a lien on the job, having a
working wife, etc. This is the most crucial stage for the entrepreneurship development.

>>Commitment and stability. His commitment as an entrepreneur is complete.