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THEORIES OF ENTREPRENEURSHIP

The concept of entrepreneurship has been evolved ( develop gradually ) over a period more then two centuries. There are different opinions on the theories or emergence of an entrepreneurship. All theories of entrepreneurship is incomplete and neither right nor wrong. Theories of entrepreneurship are interdisciplinary and influenced by multitude ( large number of people thinks) of factors. THEORIES OF ENTREPRENEURSHIP The theories of entrepreneur may be classified into four classes. a. ECONOMICS THEORY. b. SOCIOLOGICAL THEORY. c. PSYCHOLOGICAL THEORY. THEORY. d. ANTHROPOLOGY THEORY. THEORY. ECONOMICS THEORY: The following economist have expressed their view entrepreneurs. knights theory: According to this theory, the main object of establishing the business is to earn profit. Profit is the reward to bearing and uncertainties. Thus this theory suggest some ways and means of diversification and minimization of risk and uncertainties. Economics theory: A.H cole or Harvard school thought: According to A.H cole entrepreneur are established the business units for realizing the Socio-Economic Goal and his own earnings. kizners theory : According to this theory entrepreneur arise out of price differentials. Generally price should be same in all places and markets. But due to problems of demand and supply the price of same commodity or service may be different in two places. For example apple is available in Himachal pradseh at cheaper rates because of more supply where as the same apples can be sold at Hubli or other places at higher prices. In this case demand for goods and services and supply of goods and services and supply of goods and services determine the prices the prices. On account of price differentials opportunities are provide for entry of entrepreneurs . Lebensteins theory or X theory of efficiency: efficiency: He found X theory. This theory identifies and ascertain the loss arising out of wastage in utilizing resources like men, machine, materials, etc. improper use of resources leads to inefficiency. Inefficiency cause to loss. Optimum utilization of resources, minimize the losses and maximize the incomes. The persons who is able to make optimum use of resources and minimize the losses can become successful entrepreneurs.

Marks Cessons theory: theory: Mark Cesson explains entrepreneurship with help of laws and demand supply, customers always expect new goods and services. It creates new opportunities to the entrepreneur. Entrepreneur utilize such opportunities and establish business enterprise with a view to manufacture and supply the goods and services that are required by the customers. Thus this theory explains how entrepreneurs come up and start ventures. 2. SOCIOLOGICAL APPROACH : According to sociologists, Entrepreneurship is more likely to emerge under a specific social culture. According to them, social functions, cultural valves ( a device which control the flow) and role are responsible for the emergence of entrepreneurship. It means society influence the growth of entrepreneurs. For e.g. when society provides a favorable environment to entrepreneur by offering appreciation, recognition, felicitation etc.Then we expect good number etc. of entrepreneurs or vise versa. According to sociological theories the sons and daughters of businessman become entrepreneur naturally and automatically. It is because of their business background. They get the business education, knowledge and skill by their birth. Cocheran theory : According to cocharan, the entrepreneur represents society's model personality. Society values are the most important determinant of the attitudes and role expectations. In most countries, entrepreneurs have emerged from a particular socio-economics class. In the UK,USA and TURKY, ranks of entrepreneur were filled from commerce Samurai in japan, Yoruba in Nigeria,Kikuya in Kenya,Christians in Lebanon, Halai memon industrialists in Pakistan. Parsees, Marwaries, and Gujaratis in India are sources of entrepreneurship. Hagen has concluded that entrepreneurship emerged from certain communities and castes. Max weber theory : According to him, religion plays very important role in developing entrepreneur, for examples various religions like Hinduism Buddhism Christianity and Muslims. Christianity religion particular ,Protestantism provides a good platform to the industries and business undertakings. Psychological approach: According to the advocates (means here supporters) of this approach, entrepreneurship is most likely to emerge when a society has sufficient supply of individuals possessing particular psychological characteristics. Scheumpeter believed that entrepreneur are motivated by an atavistic will power. Will to find a private kingdom or will to conquer PSYCHOLOGICAL APPROACH: According to psychological theories the people with strong mental qualities set up business units successfully. Mental qualities refers to commitment. Dedication, adventurous, bold, dynamic, creative etc. The psychological features of some people make them great business magnates ( wealthy and influential businessman).

Mentally strong people never become nervous in facing hurdles, problems, risks and uncertainties of the business. Hence, the personality of the people plays vital role. The follow are the experts who have founded the psychological theories. Webbers theory: According to him extra ordinary people with exceptional qualities become a successful entrepreneur . Extra ordinary people means. Who live alone think independently in a contractive manner and they want to do something new. Evert Hagens theory : Hagen gave importance to creative nature of individuals. According to Hagen, there are some persons who are driven by a duty to achieve. More ever, they are also having creative mentality creative refers to thinking logically, differently and in a new way. creativity comes up with different solutions to a problem. Creative people develop their own technology and use creativity along with technology. These creativity and technology make great and successful entrepreneurs. ANTHROPOLOGICAL THEORY : This theory was developed by fredrik Barth. According to Barth, entrepreneurship has essentially to do with spheres in the society between which there exists a difference of value. Something which is cheap in one sphere. So Barth states that entrepreneurial behavior means to connect two different spheres in the society between which there is a huge discrepancy in value.

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