ENTREPRENEURSHIP THEORIES What is a Theory Theory in Social and Management Science Entrepreneurship Theories What is a Theory? Theories are systematic/scientific explanations of phenomenon/phenomena which forms the basis of predicting future events. A theory is a coherent group of assumption put forth to explain the relationship between two or more observable facts ( Gilberth, Freeman & Stoner). John Clancy calls theories as invisible powers , the unseen ways in which We approach our world. Schutt consider theory as a logically interrelated set of proposition about empirical reality. These propositions are composed of: 1. Definitions 2. Functional relationship 3. Operational Definition According to Lipsey & Chriytal a theory consists 1. Set of definitions that clearly describe the variables to be used 2. Set of Assumptions about the behavior of these variables, and the conditions under which the theory is applied 3. Set of predictions that are deduced from the assumption of the theory, and a set of tests against actual data, to which the prediction can be subjected. There are various explanations on the development and emergence of entrepreneurship, but the theories are either based on economic or management perspectives, for the purpose of this class the following theories are considered: 1. J. Schumpeter – Entrepreneurship as Innovation Schumpeter considers human capital as the central factor in the process of economic development, for this reason He assigned critical role to entrepreneurship in his theory of economic development. He considered economic development as a discrete technological change. According to Schumpeter development process is characterized by five types of activities: a. Introduction of new technology b. New production technology c. New market d. New source of supply e. New organization of any industry 2. Frederick Harbison- Entrepreneurship as Organizational Building 3. All human beings are part of one organization or the other, organizations are very critical to the development of human society, establishing and maintaining efficient and effective organizations for the development of human society means entrepreneurship. Harbison’s Theory has the following attributes a. Entrepreneurship does not necessarily means innovation but applies the innovation and inventions of others to build organizations b. Entrepreneurship does not necessarily means idea generation or initiation but idea integrations and coordination c. Managerial skills are paramount to the development of entrepreneurship 4. Hoselitz- Managerial skills and Leadership To Hoselitz, it means industrial leadership/leader that possess both personal entrepreneurship traits and the ability to lead. Three types of business leadership are identified under this theory a. Merchant money lender type b. Managerial type c. Entrepreneur type 5. Mc Clelland-High Achivement Enterpreneurs are high achievement individual, that is they do not behave traditionally; they take moderate risk or even high risk to attain high level of achievement, the theory differentiated between high achievers and underachievers in the following orde: a. Underachievers work to get money b. High achievers work for profit, competence, quality, professionalism, efficiency and competitiveness. Entrepreneurship Skills and Personal Development Students of entrepreneurship especially at introductory stage can use the 17 traits of entrepreneurship presented by FitnessBusiness.interview- online management consultants- the important traits are 1. Passionate 2. Take action 3. Get out of their comfort 4. Great energy 5. Willing to do whatever it takes 6. Over deliver 7. Have systems in place 8. Work on their business 9. Unique selling proposition 10. Invest in their business 11. Invest in their education 12. Have a coach/mastermind group 13. Make decision quickly 14. Practice what they preach 15. Willing to turn business away 16. Are focus based 17. Right mindset and attitude Potential entrepreneurs should evaluate their skills and personal development approach base on the 17 points presented above.
Posted on: Sun, 09 Jun 2013 15:36:20 +0000
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