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    Factors Affecting Entrepreneurial Growth

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    MAHENDRA SHIVAJI DHENAK
    The document discusses several factors that affect entrepreneurial growth, including economic, social, cultural, and personality factors. Some key challenges to entrepreneurship in less developed countries are lack of infrastructure, access to capital, high risk, and lack of skilled labor. Additionally, cultural and social beliefs in some places view high profits as unethical, inhibiting entrepreneurship. Entrepreneurs are also sometimes viewed with suspicion in less developed nations. The emergence of entrepreneurs depends on interconnected social, religious, cultural, economic, and political influences in a society.

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    Factors Affecting Entrepreneurial Growth

    Uploaded by

    MAHENDRA SHIVAJI DHENAK
    125K views6 pages
    The document discusses several factors that affect entrepreneurial growth, including economic, social, cultural, and personality factors. Some key challenges to entrepreneurship in less developed countries are lack of infrastructure, access to capital, high risk, and lack of skilled labor. Additionally, cultural and social beliefs in some places view high profits as unethical, inhibiting entrepreneurship. Entrepreneurs are also sometimes viewed with suspicion in less developed nations. The emergence of entrepreneurs depends on interconnected social, religious, cultural, economic, and political influences in a society.

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    Entrepreneurship– 4th Sem -

    Original Title

    15. Factors Affecting Entrepreneurial Growth

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    The document discusses several factors that affect entrepreneurial growth, including economic, social, cultural, and personality factors. Some key challenges to entrepreneurship in less developed countries are lack of infrastructure, access to capital, high risk, and lack of skilled labor. Additionally, cultural and social beliefs in some places view high profits as unethical, inhibiting entrepreneurship. Entrepreneurs are also sometimes viewed with suspicion in less developed nations. The emergence of entrepreneurs depends on interconnected social, religious, cultural, economic, and political influences in a society.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    125K views6 pages

    Factors Affecting Entrepreneurial Growth

    Uploaded by

    MAHENDRA SHIVAJI DHENAK
    The document discusses several factors that affect entrepreneurial growth, including economic, social, cultural, and personality factors. Some key challenges to entrepreneurship in less developed countries are lack of infrastructure, access to capital, high risk, and lack of skilled labor. Additionally, cultural and social beliefs in some places view high profits as unethical, inhibiting entrepreneurship. Entrepreneurs are also sometimes viewed with suspicion in less developed nations. The emergence of entrepreneurs depends on interconnected social, religious, cultural, economic, and political influences in a society.

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    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 6
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    The passage discusses several factors that influence entrepreneurial growth including economic, social, cultural, political, and psychological factors.

    Some of the economic factors discussed are lack of adequate infrastructure, lack of capital availability, high risks in less developed countries, and lack of skilled labor.

    Social factors discussed include importance given to education and skills. Cultural factors mentioned are religious beliefs that high profits are unethical.

    FACTORS AFFECTING ENTREPRENEURIAL GROWTH

    1. ECONOMIC FACTORS
    a) Lack of adequate overhead facilities:
    Profitable innovations require basic facilities like transportation,
    communication power supply etc. They reduce cost of production and
    increase profit.
    b) Non availability of capital
    Inventions are capital oriented. In less developed countries most capital
    equipment
    have to be imported which involves foreign exchange which acts as a
    difficult problem.
    c) Great risk
    Risk is high in case of less developed countries as there is lack of reliable
    information, markets for good and services is small etc.
    d) Non availability of labor and skills
    Though there is abundant labor supply there is generally scarcity of skills at
    all levels.’
    2. SOCIAL FACTORS
    A society that is rational in decision making would be favorable for decision
    making. Education, research and training is given less importance in less
    developed countries therefore there is very little vertical mobility of labor.
    3. CULTURAL FACTORS
    Religious, social and cultural factors also influence the individual taking up
    an entrepreneurial career, in some countries there is religious and cultural
    belief that high profit is unethical. This type of belief inhibits growth of
    entrepreneurship.
    4. PERSONALITY FACTORS
    In less developed countries the entrepreneur is looked upon with suspicion.
    Public
    opinion in the less developed nations sees in the entrepreneur only a profit
    maker and exploited.
    5. MOTIVATION
    Motivation is the act of stimulating someone or oneself to get a desired
    course of
    action, to push the right button to get the desired results.
    MOTIVATING FACTORS
    1. Education background
    2. Occupational experience
    3. Family background
    4. Desire to work independently in manufacturing line
    5. Assistance from financial institution
    6. Availability of technology
    7. Other factors

    FACTORS INFLUENCING ENTERPRENURESHIP


    The emergence of entrepreneurs in a society depends upon closely
    interlinked social, religious, cultural, psychological, and political and
    economic factors.
    FAMILY TRADITION: Individuals who for some reason, initiate,
    establish maintain and expand new enterprises generate entrepreneurship in
    society. It is observed that entrepreneurs grow in the tradition of their
    families and society and accept certain values and norms from these sources.
    RELIGIOUS, SOCIAL AND CULTURAL FACTORS: Religious, social
    and cultural factors also influence the individual taking up an entrepreneurial
    career, in some countries there is religious and cultural belief that high profit
    is unethical. This type of belief inhibits growth of entrepreneurship.
    PSYCHOLOGICAL FACTORS: The psychological factors like high need
    for achievement, determination of unique accomplishment, self confidence,
    creativity, vision, leadership etc, promote entrepreneurship among
    individuals. On the other hand psychological factors like security,
    conformity and compliance, need for
    affiliation etc restrict promotion of entrepreneurship.
    POLITICAL FACTORS: The political and also the political stability of
    country influence the growth of entrepreneurship. The political system,
    which promotes free market, individual freedom and private enterprise, will
    promote entrepreneurship.
    ECONOMIC POLICIES: The economic policies of the government and
    other financial institutions and the opportunities available in a society as a
    result of such policies play a crucial role in exerting direct influence on
    entrepreneurship.
    In view of the haphazard development of economic zones, Government is
    encouraging the entrepreneurs to establish their business in backward and
    tribal areas. This is primarily to arrest the migration of people from the
    villages to cities and to create employment opportunities locally.
    Government is promoting such development by giving incentives like tax
    holidays (both sales and income), subsidized power tariff, raw materials,
    transportation cost etc

    CAUSES OF SLOW GROWTH OF ENTREPRENEURSHIP IN


    INDIA
    Entrepreneurship developed only in the beginning of the 19th century and
    though the base for industrialization had been laid a century ago. The
    following be the main reasons, which could be responsible for lack of
    initiative and entrepreneurial spirit among the Indians.
    1. Caste System: - This decided occupation for members from each caste.
    The altitudes were restrictive and therefore there were no changes of
    accumulating wealth and promoting production.
    2. Agriculture: - Agriculture was the main occupation. Farmers and
    cultivators were always in the clutches of the money lenders. The zamindars,
    nawabs and rajahs exploited the laborers. They spent money on enjoyment
    and luxury and never risked money in industry. Banking and commercial
    system was also absent so even if there were savings, they could not be
    utilized for productive use.
    3. Educational System: - Talented young men were prepared to take white
    collared jobs or join government or professional services. Many were
    attracted towards politics. The result was that very few young men got
    attracted towards becoming efficient, industrialists, technicians, managers
    etc.
    4. Colonial Rules: - The British rulers adopted discriminatory policy Rich
    Indian businessman had special connections with foreign rulers and both
    satisfied their self interests. Even the few insurance and banking services
    catered to the needs of some rich Indian businessman, Britishers in India did
    also not encourage Industrialization.
    5. Managing Agents: - There were just a handful of people who were
    known to be having managerial skills. On common basis, these agents would
    lend their skills to some top industries. Industrialists could not manage their
    own units. They were always at the mercy of the managing agents who filled
    their pockets with big chunks of the companies’ profits and took full
    advantage of Indian industrialists till
    the managing agency system was abolished in 1970.
    6. Joint Family System: - Younger members of the family always depended
    on the Head who never gave any kind of independence or encouraged units
    other than family business ones. A number of young men were discouraged
    from diversifying from family business and doing something new and
    different.
    7. Religious attitude: - Indians were very religious mi9nded. They gave
    more time to religion than to earning material wealth. Religion got priority
    over business. Some religions even condemned excess earnings and
    indulgence I in comforts. Industrial activity was, therefore, given secondary
    consideration by the religious Indians.
    8. Mindset: - The mindset of the average Indian was never entrepreneurial.
    Our religious literature and epics told us to have patience and to keep on
    working without expecting the fruits of labor. This also killed the drive and
    desire to get into entrepreneurial activities.
    9. Recognition by the society: - In earlier days, the heroes India were the
    social reformers and the politicians. Now it is the era of sportsmen, models
    and film stars. It is sad that successful or the struggling entrepreneurs have
    never been recognized as heroes. Entrepreneurial activity did not get due
    importance in the India society.
    10. Family Background: - Empirical studies have shown that a good
    number of entrepreneurs come from families with industrial backgrounds.
    Unfortunately, only a few entrepreneurial communities in India made
    entrepreneurial contribution. These communities could also not make
    headway in the entrepreneurial field on account of the colonial rule, lack of
    infrastructure and other facilities. Entrepreneurship development could only
    take place after independence in India.

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