FACTORS LEADING TO
ENTREPRENEURSHIP

1

FACTORS LEADING TO ENTREPRENEURSHIP
—
—
—
—
—
—
—

Psychological Factors
Sociological Factors
Personality Traits/Factors
Cultural Factors
Economic Factors
Legal-political Factors
Technological Factors

2

PSYCHOLOGICAL FACTORS
— Need for achievement
— Propensity for risk taking
—
Self confidence will be driven into

engaging in successful entrepreneurial activities — Locus of control construct
3

PSYCHOLOGICAL FACTORS
(cont’d.)
Locus of control construct
— High self esteem with high internal locus of control exhibiting initiative commitment and perseverance with a high tolerance for ambiguity
— Individuals differ on perceived locus of control
— It is perceived to be intentional
—
Individuals with greater internal locus of control take responsibility for rewards following success
— An individual with a greater locus of control is not affected greatly by either success or failure
— The involvement results from personal needs regulated by their values beliefs &attitudes
4

PSYCHOLOGICAL FACTORS
(cont’d.)
Need for achievement
— High need for achievement – setting goals strategies and working for the attainment of the goal

5

PSYCHOLOGICAL FACTORS
(cont’d.)
Propensity for risk taking
— Propensity to take moderate, calculated and controllable risks be it psychic, financial etc
Self confidence
— An individual will be driven into engaging in successful entrepreneurial activities
— Personal value system of honesty, duty responsibility and ethical behaviour that is dependable and conscientious

6

SOCIOLOGICAL FACTORS
—
Despite a multiplicity of talents, potential entrepreneurs often require negative reinforcement or precipitating events in their lives to plunge into new venture founding
—The pulls and pushes of entrepreneurship: Liles
(1974) has identified positive (pulls) and negative
(pushes) factors that trigger talent entrepreneurship.
— he main pull-force apart from support and
T
encouragement from significant others such as family and friends and the entrepreneurs inner for accomplishment is an opportunity recognition
7

SOCIOLOGICAL FACTORS (cont’d.)
—
The push forces or displacement into entrepreneurship arise from the entrepreneurs increasing inability to function effectively within the existing organizational framework and includes the desire: —o
T

escape a suffocating bureaucracy where opportunities are lost due to resources and procedure – related

8

SOCIOLOGICAL FACTORS (cont’d.)
—
To develop his full potential which current circumstances or scope of work have left to solve latent or neglected
— To avoid unacceptable practices and organizational

politics in current employment
—To circumvent glass ceiling especially for staff in

middle management levels where displacement outwards or sideways due to organizational restructuring is the norm
9

SOCIOLOGICAL FACTORS (cont’d.)
— To obtain alternative sources of income arising from

loss of employment due to company downsizing and employee retrenchment program (such as the now familiar public service golden handshake)
—
To obtain income from sources other than employment this is lacking due to lack of relevant skills, nepotism and other forms of discriminatory practices such as racism, tribalism among others.

10

SOCIOLOGICAL FACTORS (cont’d.)
— To be usefully engaged after escaping social upheavals in

their communities and settling in a host community where employment opportunity may not be availed. Liles (1974) say that Ach alone is a weak predictor of enterprise start – up tendencies of entrepreneurs

11

SOCIOLOGICAL FACTORS (cont’d.)
— The entrepreneur has been portrayed as a social reject

and organizational misfit, as stubborn and unlikeable person (Collins, Moore and Unwell, 1964); but also as a social architect that brings into being new institutional frameworks to serve interests of the society through new modes of social interaction such as the E-mail, Internet service providers (ISP) (Bennis and Nanus, 1985)

12

SOCIOLOGICAL FACTORS (cont’d.)
Impact of sibling position and familial socialization processes on Entrepreneurship
— First born children from large families or single children were more likely to start and own small businesses than others sibling position, if they come from working class backgrounds for whom small business ownership is a sign of success.

13

SOCIOLOGICAL FACTORS (cont’d.)
—Middle class backgrounds prefers the professions like

medicine and law and shun small business ownership
(Starworth et al, 1989)
— There is no comparable Kenyan data, but many people believe that sibling positions such as first born and last born , particularly, have distinctive behavioural characteristic related to the nature of socialization they go through 14

SOCIOLOGICAL FACTORS
(cont’d.)
Social maladjustment as a basic for entrepreneurship

—
Hagen (1962) suggests an alternative sociological orientation that leads to creative entrepreneurship in terms of withdrawal events.
—Displacement by force from an elitist position by rural group for control of social order for alternative supremacy through entrepreneurship.

15

SOCIOLOGICAL FACTORS
(cont’d.)
—
Degeneration of valued symbols by a group in a higher hierarch of social order that leads to the development of alternative status symbols in the wealth that entrepreneurship confers.

16

SOCIOLOGICAL FACTORS
(cont’d.)
— Change in status symbols
—Non acceptance in a new society to which the group

migrates
— Degeneration of valued symbols by a group in a higher hierarch of social order that leads to the development of alternative status symbols in the wealth that entrepreneurship confers.
— Change in status symbols
—Non acceptance in a new society to which the group migrates 17

SOCIOLOGICAL FACTORS (cont’d.)
Exclusion and exclusiveness roots of entrepreneurship
— The social marginality theory proposed by McEvoy &
Curran (1966) looks at entrepreneurship of groups

18

PERSONALITY TRAITS
—Self confidence
—Task/ result oriented
—Leadership
—Originality
—Future oriented
19

CULTURAL FACTORS
—Social forces include factors that relate to the values

attitudes &demographic characteristic of an organization’s customers. —Dynamic social forces can significantly influence the demand for an organization’s products and can alter its strategic decisions.
—Culture incorporates set of values, ideas and attitudes of a homogenous group that are transmitted from one generation to the next.

20

CULTURAL FACTORS (cont’d.)
Some of the key areas that indicate the impact of culture to the market
— Changing attitudes and values
— Value consciousness
— Changing roles of women and men
— Aesthetic values - what the society rate as attractive and unattractive. In terms of design, styling, fashion and color

21

CULTURAL FACTORS (cont’d.)
—If the culture is economically or monetarily oriented,

entrepreneurship would be applauded and praised; wealth accumulation as a way of life would be appreciated
— The presence of proper economic motives where people attach great value to business talents industrial leadership etc —Entrepreneurship growth requires proper motives like profit-making, acquisition of prestige and attainment of social status

22

ECONOMIC FACTORS
—Income Levels
—Inflation
—Purchasing power: Disposable

income and Discretion income
—Distribution of income
23

ECONOMIC FACTORS
—
—
—
—

Availability of adequate overhead facilities
Availability of capital
Lower risk levels in the business environment
Availability of labour and skills

24

LEGAL-POLITICAL FACTORS
—
—
—
—

Attitude of the Government towards business activity
Legal controls of business activity
Influence of business groups
Relationship between political parties

25

LEGAL-POLITICAL FACTORS
(cont’d.)
Other impacts of political environment
— Sanction
— Price control
— Promotion
— Distribution
— Agreement between states
— Government comes up with regulations that affect the way we do business

26

TECHNOLOGICAL FACTORS
— New Processes
— New materials
— Other issues in technological environment

27