VI.

ENTREPRENIAL BEHAVIOUR AND SOCIO-PHYSCHOLOGICAL SOCIOFACTORS INFLUENCING ENTRPRENEURSHIP DEVELOPMENT

Behavioral Pattern of Entrepreneurs:
Habits attitudes, perception etc. of people reflect the sociosocioeconomic background from which they come. People with varied backgrounds undertake entrepreneurial activities.  The type of industrial activity they undertake has a lot to do with their personal traits. This behavior pattern of entrepreneurial can be observed in the entrepreneurial history of India.


A

man and his son are in a serious car accident. The father is killed, and the son is rushed to the emergency room. Upon arrival, the attending doctor looks at the child gasps, This child is my son! Who is the doctor?

 Socio-economic Socio-

factors affecting entrepreneurship development :  The socio- economic back ground from which sociothey come affects the behavior patterns of entrepreneurs.  In order to understand their behavior patterns, one has to analyze their background.  The background can be studied by analyzing the different socio- economic factors. socio-

 

SocioSocio-Economic Origins / Factors SocioSocio-Economic factors are analyzed for studying the behavior patterns of entrepreneurs, in other words entrepreneurs behave in aparticular manner because of the influence of socio-economic factors. Following socioare some of the factors that are considered in such a study: 1. Caste origins: Certain religions and castes encourage entrepreneurship. Caste system in India led to rigid customs and traditions. Economic activities were also caste-oriented. The caste system in India casteexercised an influence on the occupation of a person. Certain castes have a culture that encourages entrepreneurship.

 It

was because of this that few communities were engaged in trade and industry for centuries in India e.g. the Vaishyas, Khatris, Baniyas, Parsees, Jains and Marwarirs have been responsible for supply of entrepreneurship in India.  This is also true in case of a number of countries e.g. the Protestant ethics in the west, the trading classes in the United States, the family business concerns of France and the Samurai in Japan.

2. Time and age of entry:  The time and age of entry are important factors to be considered in the behavioral pattern of entrepreneurs e.g. the Marwaris enter business at a much younger age than the Parsees or Khatris.
 

Family Background:  This includes the economic status, size and the type of family e.g.because the Zamindar families bad greater access to political power, they were more entrepreneurial.  Again; the joint families could expand their family business projects considerably because the family property could be invested.  If the family came from a rural area, they could not enjoy the advantages like families from urban areas did, though that' consideration was not a hindrance to entrepreneurship.
 3.

4. Religious background:  Certain religions condemn the indulgence in material gains.  On the other band, Max Weber say the protestant ethic among the Christians develops the right attitude for entrepreneurship.  religions teach a man to refrain from material comforts, as he has not come to this world to make money and indulge in pleasures.

number of subsequent studies show that religions in India do not kill the entrepreneurial spirit.  It is not the form of religion that is practiced but the type of interpretation that is given to the religious values and that is important for entrepreneurial success. But religion has definitely had an impact on the entrepreneurial behavior of an individual.
A

5. Education and technical know-how: knowA higher level of education enables entrepreneurs to use their talent more profitably.
 Education

is considered to be a good means to develop man's resourcefulness. A study has shown that a majority of entrepreneurs in the technicaland, engineering industries were graduates and post-graduates. post-

Occupational background:  For starting enterprise what is required is the entrepreneurial spirit .
 6.  Most

of the entrepreneurs have come from families where theparental occupation was employment or agriculture. It was not necessarily the business & background that influenced them into undertaking the entrepreneurial activity. provided a base for study.

 This

7. Migratory character:  The study shows that four - fifths of entrepreneurs were immigrants who had come from places within and outside the state.

8. Type of industry started:  Out of the forty enterprises in two districts of Andhra Pradesh, where the study was conducted, nearly two-thirds of the twoentrepreneurs started industries in engineering works. This factor provided scope for the analysis of entrepreneurial behavior.

9. Type of ownership preferred:  The type of ownership organization the entrepreneurs prefer also helps in understanding the socio economic background.


They come from e.g. the above study showed that nearly fifty percent of the entrepreneurs had launched their units in the partnership form, about one-third in the sole trading form. one-

 This

shows that they wanted, to avoid legal formalities that existed in the Indian society for launching companies. one may conclude that the sociosocioeconomic background exercises an influence on the entrepreneur's motivation, access to resources, risk- bearing capacity etc. that in riskturn determine, entrepreneurial behaviour and the growth of entrepreneurs.

 Thus

Factors Determining the Growth of Entrepreneurship:  Research has shown that entrepreneurs are motivated by a combination and interaction of a number of factors.  Entrepreneurship does not spring and grow automatically.  It does not emerge spontaneously.  It is the result of the availability of anumber of factors. These factors can also be known as "supportive conditions" or "facilitating conditions. "

 Entrepreneurship

can flourish under an atmosphere that is conducive; where these factors are favorable or have a positive influence entrepreneurial activities can grow and develop.  Factors that determine the growth or entrepreneurship can be broadly divided into two categories viz. the economic and the nonnoneconomic factors.  Besides, the Government actions also determinel the entrepreneurial growth in a country.

 OTHER

FACTORS DETERMINING GROWTH OF ENTREPRENEURSHIP DEVELOPMENT:

 A-Economic FactorsFactors- The economic factors that affect the growth of entrepreneurship in a country are as follows:  1. Capital: Capital is required for establishing and running an organization. It is a prerequisite for expansion and developmentdevelopmentprogrammes of an enterprise.  Since capital is the life-blood of trade and lifecommerce, it is the basic requirement for entrepreneurial activities. If it is available in abundance then the entrepreneurial activities will also grow.

 In

the less developed countries entrepreneurship has a slow growth on account of lack of capital.  In such countries there is less domestic saving.  There is also the problem of channelising savings for productive purposes.  Entrepreneurs in such countries always face the problem of inadequate finance.


 Besides,

entrepreneurs do not get capital for experimenting on new ideas.  Innovations require financial resources in abundance.  On the other hand, entrepreneurship grows in the more developed countries on account of availability of financial resources. Capital, therefore, becomes on important determinant of entrepreneurial growth.

2. Labour:  The type of labor available in a country determines entrepreneurialgrowth. The labor is mobile and flexible then the entrepreneurs can get the rlght type of !abour.Beside !abour.Beside entrepreneurs also require skilled labor for certain business activities.  In less developed countries though, labor is available in a large number, it is not mobile. In such countries cheap labor is always immobile on account of emotional and economic insecurity.


Raw Materials: The easy availability of raw materials is a must for any industrial activity Thus factor influences the growth of entrepreneurship . Without its availability, neither can any enterprise nor can entrepreneurship emerge.  Innovations require experimentation on material resources. If raw materials are available in abundance then entrepreneurship can grow and develop easily. However to a certain extent this problem can be solved.
 3.

4. Market:  All production and trading is done for consumers. Until and unless the products and services reach the consumer who is the last link in the chain of distribution and who is responsible for its consumption the objective of entrepreneurial activity is not achieved.  A well regulated and a developed market definitely promotes entrepreneurship. Its size and composition also influences the emergence of entrepreneurs.  as a determinant of entrepreneurial growth.

 Favorable

marketing conditions have positive influences on entrepreneurship.  If the market has a good potential, it is expanding and offers good prospects for trade then definitely entrepreneurship will grow.  Market under the economic factors can be regarded

5. Adequate Overhead Facilities:  Successful entrepreneurial activities require certain basic facilities and services like transportation, communication, technical and economic information,, supply of power, irrigation facilities etc.  They provide economies and make the investments of entrepreneurs fruitful.  They reduce the cost of production and help in the increase of output.


 In

Less developed countries, entrepreneurial growth is restricted on account of scarcity of these facilities.  These services are inadequate and less developed and sometimes very, expensive. These problems affect the profit margins of entrepreneurs. They pose severe problems and discourage entrepreneurial activity.  On the other hand, entrepreneurship has more scope to grow in advanced countries as these overhead facilities are well developed and are available on a larger scale.

6. business Risks:  Economic risk and risks arising out of uncertainties are more in less developed than in developed countries. This is because there is lack of reliable information on cost, size-of sizemarket, conditions of demand,overhead facilities etc.  An entrepreneur cannot. make correct estimates under such circumstances and therefore faces more risks and uncertainties in less developed countries. Besides, the market for goods and services is smaller.

 There

is also the problem of lack of stability in both the domestic and foreign economic policy.  All thesesituations make business extremely risky and sometimes less viableand this discourages entrepreneurs.  When entrepreneurs are put to the mercy of unforeseen conditions they either make shortshortterm investments or do not take up project in which the risk element is high.

B. Non-Economic Factor: NonThe nonnoneconomic factors that determine the growth of entrepreneurship are as follows:  1. Socio-cultural Factors: Socio According to Joseph A.Schumpeter, there has to be an appropriate social climate for entrepreneurship. Cochran calls it cultural themes and sanctions.  They both talk about the existence of norms and values within a socio-cultural set-up. socioset These have influence on entrepreneurial behavior. The behaviour can favor or disfavor entrepreneurial growth.
 

 To

increase the level of entrepreneurial activity in a country, many scholars have proposed a change in traditional values and beliefs.  If these are traditional in nature, they do not favor entrepreneurial growth. For example, if the people in a follow certain customs and traditions rigidly then certain entrepreneurial activities may not be undertaken at all.

 For

example, business in hides, meat canning, poultry farming, etc. While others may not develop enough.  If people are superstitious and beiieve in astrology and destiny, then business may receive a set back.  People may not get into some business activities, as the stars do not favor them. They may launch business projects only when the time according to their stars is auspicious. The economic policy or market conditions may not necessarily be favorable then.

 Entrepreneurs

may not get to the root cause of inefficiency or ineffectiveness in the organizations as they may feel their stars are bad or they are not destined for progress.  Scholars like McClelland suggest that a complete change intraditional values may not be necessary for entrepreneurial appearance.


 They

suggest a synthesis of old values with newer values or their reinterpretation.  Sometimes government actions can also help a society to overcome negative orientations. Under this factor, the opinion of social mobility is not unanimous.Some hold the view that a high degree of mobility is conducive to entrepreneurship.

mobility involves the degree of mobility, both social and geographical and the nature of mobility channels within asystem.  Scholar; like Hoselitz and McClelland propose openness of asystem and flexibility in role relations. If there is mobility within asystem then entrepreneurship development is promoted.  On the other hand, a group of scholars feel that entrepreneurship comes from a rigid social combination of both the systems.
 Social 

to Rostowand Brozen, a social system should neither be too rigid, nor too flexible.  If it is too flexible then an individual may move into other roles easily and not slick to the entrepreneurial one.  On the otherhand if the social system is too rigid then entrepreneurship will be restricted. It will not have a wide scope for growth and development.
 According

mobility can therefore, have a strong influence on entrepreneurial growth.  Social marginality like social mobility is another factor under social conditions that acts as a determinant of entrepreneurial growth.  Social marginality also promotes entrepreneurship according to a groups of scholars.
 Social

 Social

marginality implies a situation in which there is a discontinuity between the individual's personal attributes (eg physical characteristics intellectual make-up, social makebehavior patterns) and the role or roles, which the individual holds in society.

person is likely to adopt owner manager role as a solution to marginality. e g a Brahmin who performs religious duties and rituals and earns his living from such activities may switch over to entrepreneurial activity when the society does not give much importance to these rituals.  However there are some purely structura; factors like the entrepreneurial opportunity available in the society, rate of structural change in the economy etc. that facilitate entrepreneurial activities.
A

2. Pshychological Factors:


A number of entrepreneurial theorists have given theories of entrepreneurship, wrich highlight the psychological factors affecting entrepreneurial growth.

 David

McClelland has propounded the need for achievement, Theory.

 3. GOVERNMENT ACTIONS:  The government of a country can influence both the economic as well as the non-economic nonfactors affecting entrepreneurship.


Its failure to act can create a negative influence on these factors. On the other hand, if it is interested in developing entrepreneurship it can frame suitable industrial policies. It can provide basic facilities, utilities and services.

 It

can provide basic concessions and create a conductive socio-economic set up. Such an socioatmosphere minimizes the risks and uncertainties that entreprenurs have to encounter and induces them to perform.  Supportive action of the governmnet can promote the entrepreneur growth.