DEFINITION OF ENTREPRENEURSHIP

DEFINITION OF ENTREPRENEURSHIP

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definition of entrepreneurship

few weeks back, I noticed most people misinterpret the definition of entrepreneurship and its concepts, so I  took my time out and I did a lot of research, eventually I came up with this post, have in mind that I had to go back to the very beginning of entrepreneurship itself so you can get  what entrepreneurship really means. You may also see entrepreneurship definition

            HERE’S WHAT YOU’LL LEARN:

  • Different definitions of entrepreneurship from different perspectives.
  • The concept of entrepreneurship
  • The origin of entrepreneurship

definition of entrepreneurship

David McClelland:

David McClelland (1961) is another famous contributor of the definition of entrepreneurship. In his own contribution to the definition, he argued that entrepreneurial behaviour in business is motivated by the individual need for achievement. Although his position is psychological, which he demonstrated by using “Maslow’s Hierarchy of Needs” referred to as “n” achievement. David McClelland (1961) in his studies opined that, apart from need for achievement, need for power and need for affiliation can spur an individual into entrepreneurship. He states that: “the connection seen by Max Weber between the protestant reformation and the entrepreneurial spirit can only be understood as a special case and by no means limited to Protestantism but could also be in form of “n” achievement, resulting from an ideological change.”

His conclusion was based on the evidence obtained from art, literature and the response to questionnaires obtained from the citizens of the societies aimed at showing the relationship between economic growth and the fostering of an individual need for personal achievement. According to him, classes, tribes or nations differ in entrepreneurship as a result of different ideologies of personal achievement and not basically due to system of values. He saw moral propaganda as a crucial factor in the promotion of business for providing capital, skill management, organisation and market, supporting this by stating that: “The problem of course is to develop character by means that will not be rejected out of hand as an unwarranted intrusion into a national way of life. The solution lies in presenting openly the psychological evidence that certain motives and values are for economic growth….then the individual is at last faced with a clear decision of what he wants to do…..there is no real substitute for ideological favour.”

McClelland also believed that the “need for achievement” exists in every individual; that a particular training, emotional practices and value orientation cannot produce the disposition, which favours the rational pursuit of economic gains. In support of this, Peter Maris (1972) stated that “The ideology which draws its members into mutual protection may also legitimize their economic relationship and as it does so, drive them on to achieve more, inculcating the same value in their children. Racial and cultural loyalties may bind a group together, without constant emphasis on the beliefs they share, entrepreneurship may be legitimized by practical economic arguments whose underlying values are barely stated, and it may be stimulated by dominant culture.”

It is pertinent to note that McClelland in his definition of entrepreneurship failed to prove the sense of frustration that drives men to become entrepreneurs. One may therefore be tempted to say that if neither religion (Max Weber) nor ideology (McClelland) absolutely justifies and stimulates entrepreneurship, then there must still be some moral arguments to sustain (even if) the premises on which these arguments are based are not clearly expressed.

definition of entrepreneurship

Joseph Schumpeter:

                Another famous contributor to the theory of entrepreneurial studies and development is Joseph Schumpeter (1934). According to him, innovation is an essential function of the entrepreneur. He postulates that entrepreneurship is not necessarily invention but it turns invention into a profitable venture. So, he only considered entrepreneurship as an element of the mechanism of change and argued that the principal force behind entrepreneurship is the profit motive.

Schumpeter saw entrepreneurship as a fundamental factor in the economic development process and entrepreneur as an innovator who is different from a bureaucratic executive that merely runs an establishment. To him, an entrepreneur is neither a bureaucrat (executive manager) nor an inventor (scientist) but rather an innovator who successfully finds a way of introducing invention into the economic realm for solving human needs

An entrepreneur according to Schumpeter must not necessarily be a development planner and therefore nee not originate a business but should be able to manipulate a specific enterprise that is already in existence, create and carve new things out of its form. He believes that the invention of an enterprise may lie in, the techniques of production, the market served, the labour used, the organisation of a firm or the raw materials available. An entrepreneur in the process of exploiting what was previously in use can further improve it into a new arrangement of economic value.

DEFINITION OF ENTREPRENEURSHIP

There you have It, a detailed and in depth look into the concept and definition of entrepreneurship. Below is a quick rundown of all the things I’ve said so far.

  1. McClelland: saw the need for entrepreneurship in an in individual resulting from the achievement, ideologies and values of the individual. His thirst for excellence and the need achievement are the main driving force behind every entrepreneur. He also emphasised on character and the physiological state of such an individual.
  2. Schumpeter: saw the need for entrepreneurship in an individual as a result of the profit motive coupled with innovation and he strongly believed that only then can economic growth be attained.

Have I said well? If there’s anything you would like to point out, please share your view with us and do you really think entrepreneurship is all about profit?

 

 

 

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  1. Pingback: Being An Entrepreneur- The Secret of True Wealth | LEGAL BUSINESS ONLINE VENTURES

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