Proponents of various schools of thought on the motivational theory of entrepreneurship have come up with various arguments to explain why an entrepreneur would go...

The macro view entrepreneurial thought:
According to this school of thought, factors beyond the control of the entrepreneur constitute
the reasons for going into business. This point of view presents a number of schools of thought
which suggest that a range of external factors are the forces behind the entrepreneurial
process. The constituents of this school of though are:
• Environmental School of thought
• Financial/Capital School of Thought
• Displacement School of thought

1. Environmental School of thought-Support
The proponents of this school of thought argue that entrepreneurial desires are molded by
external factors (which may be positive or negative) that affect a potential entrepreneur’s
lifestyle. They further argue that institutions and societal values grouped together form
an environmental framework that strongly influences the development of entrepreneurs.
Freedom and support in the work environment can also foster a manager’s desire to pursue
an entrepreneurial career. In addition, the social group a person belongs to often may affect
the potential development of an entrepreneur

2. Financial/Capital School of Thought- Capital
T his school presents the view that the desire to become an entrepreneur is based on the
capital seeking process; that the entrepreneurial process is about making decisions involving
finances at every major point in the venture process i.e.
(a) Startup or acquisition venture stage:
I n the beginning, the entrepreneur’s main concern is deciding on the major sources of
funds to give him a head start on the venture. He may either take up a loan or decide to
save up his. The success or failure of this decision making process will lead him further
to make a decision as to whether to proceed or abandon the project.
b) Ongoing venture stage:
The financial consideration here is how to manage cash, make investments, undertake
financial analysis, and evaluate the financial position of the venture. The decision to be
made here is whether to increase, maintain or reduce size of the business.
c) Decline or succession stage:
The entrepreneur will be forced at some point to investigate the future profitability of the
venture. Following this analysis, he may then consider options such as corporate buyout,
dissolution or succession. This decision of course, has a financial consideration.

3. Displacement School of thought
T his view suggests that individuals will not pursue a venture unless they are prevented or
displaced from doing other activities. Factors that may force one from pursuing other ends
in life include:
i) Political factors:
ii) Cultural factors:
iii) Economic factors

The micro view entrepreneurial thought
Here, the proponents argue that the entrepreneur is more or less in charge of determining
his success or failure in business. Factors within his control can be attributed to whether or
not his vision yields returns. This view presents factors that are specific to an entrepreneur
who has the ability or control to direct or adjust the outcome of each major influence. The
following schools of thought comprise this view point. The constituents of this school of
thought include;
1. The Entrepreneurial Trait School of thought
2. The Venture Opportunity School of thought
3. The Strategic Formulation School of thought

1. The Entrepreneurial Trait School of thought- Traits
Following a study of successful people, it has been found that they exhibit similar
characteristics. Those behind this school of thought suggest that if certain traits associated
with successful entrepreneurs are established and supported early in life, this will lead
eventually to entrepreneurial success. The four traits usually exhibited by successful
entrepreneurs include:
i) Creativity,
ii) Determination,
iii) Achievement,
iv) Technical knowledge.
Family development and education are also important traits which contribute to the success of an entrepreneur

2. The Venture Opportunity School of thought
This school of thought suggests that the ability to become an entrepreneur lies in being able
to search for idea sources, develop concepts, and implement venture opportunities. The
proponents further argue that creativity, market awareness, developing the right idea, at the
right time, for the right market niche are the essential ingredients to entrepreneurial success.
Opportunity identification is thus the key force behind becoming an entrepreneur
The Strategic Formulation School of thought- Strategy
This approach to entrepreneurial theory emphasizes that the planning process is vital
for successful venture development. The argument is that through strategic planning and
formulation an individual is able to develop an effective venture. This is because he will
be able to identify and make use of unique markets, unique people, unique products, and unique resources.

---

Kavungya answered the question on April 12, 2021 at 15:18