Paper to be presented at the EMNet-Conference on

"Economics and Management of Franchising Networks"

Vienna, Austria, June 26 – 28, 2003
www.univie.ac.at/EMNET

LINKING BETWEEN FRANCHISING NETWORKS FOR

ENTREPRENEURSHIP AND ECONOMICAL
DEVELOPMENT----- LOOKING FOR A NEW MODEL

Jahangir Alam Mohammad Akter Hossan

Associate Professor Lecturer
Department of Finance Department of Finance
University of Chittagong University of Chittagong
Bangladesh Bangladesh
Email: jahangira@hotmail.com Email: mahossan@yahoo.com
Phone: Office: 0088-031-726311-14 Phone: Office: 0088-031-726311-14
Extension: 4234 (Auto) Extension: 4234 (Auto)
Fax: 0088-031-726310 Fax: 0088-031-726310

Abstract
Entrepreneurship is an outcome of complex balancing of opportunity initiatives, risks and rewards.
Entrepreneurship is as a process by which people pursue opportunities, fulfilling needs and wants through
innovations, without regard to the resources they currently control. Entrepreneurial resource is vital ingredient of
economic development whereas a key element of economic development is that the 'people of the country' must be
major participants in the process that brought about changes in structure of economic and population growths along
with consumption pattern. Through the process of entrepreneurship, it is possible to argument the scope of capital
formation, employment generation and facilitate industrialization in a country on the hand. On the other hand,
entrepreneurship acts as a powerful tool of employment generation, raising productivity through innovation,
facilitating transfer of technology, playing key role in commercializing new products, redistribution of wealth and
income, earning foreign exchanges, promoting social welfare and the like.
Adequate information is one of the important aspects of entrepreneurship development. Entrepreneurs have
to face different problems such as, knowledge about markets, about key people in buyer organizations, and so on.
Such information and understanding is not easily, cheaply or rapidly acquired. As a result, networks between buyers,
sellers and other related parties, which form the basis of effective communication, must be established. Networks
establishment can be a demanding and time consuming process where the gap between the accentuated by physical
and cultural distance barriers. There is a considerable inertia amongst buyers who feel more secure with suppliers
from familiar sources and location. As a result, the new entrants have to face more problems as compared to others
existing entities.
A core competence of overcoming barriers of innovation and development of entrepreneurship is
franchising networks. This will reduce the costs of entrepreneurs/firms to gather information in different aspects.
The benefits are enormous over and above reducing costs of information.
The paper attempts to build a model for entrepreneurship development conducive to overall economic
development of a country - developing or developed- taking franchising networks as a main variable along with
some other associate variables.
 I. Introduction

The concept of entrepreneurship is multifaceted and used in a wide variety of contexts.

At its heart are entrepreneurs, i.e. persons that are believed to have characteristic traits or behave

in some characteristic way. On the basis of these characteristic traits entrepreneurship is

described as an innovator who undertakes the new combinations of factors of production.

Innovation may occur in the form of: i) the introduction of a new goods, ii) the introduction of

new method of production, iii) the opening of a new market, iv) the conquest of a new source of

supply of factors of production and v) the reorganization of any industry. Entrepreneurs are

specially motivated and talented type of individuals who are to see potentially profitable

opportunities and tend to exploit them (Saha, 1989). It is recognized that mere existence of

resources does not guarantee economic growth (Purhit and Rahman, 1995). Experience shows

that progress is basically the human effort and it takes human agents to mobilize capital, to

exploit natural resources to create new markets and to carry on trade (Frederick and Myers).

According to J.A. Schumpter entrepreneurship is the central figure of the development process

because the entrepreneur in the modern complex economic world, can create opportunities for

production technology, by expanding or discovering new market, new product, new source of

resources, etc. All these activities will embrace risk and uncertainties and at the same time will

increase the demand for higher or increased investment in the economy. This demand for

increased investment will necessitate higher capital accumulation and thereby the demand for

increased rate of savings in the economy. The cumulative effects of all these factors will increase

level of income ands total production of goods and services in the economy. In other words, in

totality, the net result of expansion in the volume of economic activities will lead to growth in

2
national economy and if a proper and equitable distribution policy can be formulated by the state

to suit the real development in the economy will take place (Saha, 1989).

Although entrepreneurship is a vital factor in the economic development process, in

practice it has to face the problem of adequate information regarding the potential opportunities

in environment, demand and choice of potential customers, sources of necessary resources for

that new goods, various aspects of the markets, market penetration strategies, existing and

probable competitors, suppliers of raw materials, required technology and expert personnel, etc.

As a result, if entrepreneurs want to collect this information by using the traditional methods then

it will cost more to the entrepreneurs and this cost also leads to increase in the production and as

a transaction cost too.

So, in the world of information technology, entrepreneurs can only be benefited by

gathering various information mentioned earlier, exchange views with the entrepreneurs at home

and abroad, share the experience with such foreign entrepreneurs even can take suggestions from

successful entrepreneurs for overcoming any difficulties through networking support provided by

any parent network company. To use these network support, entrepreneurs have to pay royalties,

establishment and other fees to the parent network company and this system of network support

of parent company is called franchising network where entrepreneurs are called franchisee(s) and

the parent company is known as franchiser(s). By collecting information from such networking

system, entrepreneurs can reduce their cost of production and can contribute more to the

economic development.

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 This paper tries to build a structural model linking between franchising network and

entrepreneurship development and to evaluate whether this model will be able to reduce the cost

or not.

II. Critical Evaluation of Existing Theories of Entrepreneurship

At present there are a number of entrepreneurship theories for the development of

entrepreneurship. So, in this section we have tried to identify the variables used in the existing

models, to find out the merits and demerits of present theories. We have also considered all these

factors while we have tried to provide a new model. All the existing entrepreneurship theories

are divided here into two major categories- psychological theories and sociological &

anthropological theories. These theories are discussed below-

A. Psychological Theories

The essence of psychological or personal theory is the difference in individuals’ attitude.

According to this theory the difference in attitude i.e. the internal attitude and ability to judge and

forecast the situation lead a man to become a successful entrepreneur. Some important theories

of this field are critically discussed below-

David McClelland’s theory on need for achievement is the most important one of the

various psychological theories on entrepreneurship. In his theory McClelland emphasized the

relationship of achievement motivation or need for achievement (symbolically written as n Ach)

to economic development via entrepreneurial activities. He wrote “the presumed mechanism by

which n Achievement level translate itself into economic growth is the entrepreneurial class. If

the n Achievement level is high, there will presumable be more people who behave like

entrepreneurs-----" (Islam, 1989). According to McClelland, one would expect a relatively

4
greater amount of entrepreneurship in a society if the average level of need achievement in a

society is relatively high. Because having a high n Ach encourages an individual to sit

challenging goals, work hard to achieve the goals and uses the skills and abilities needed to

accomplish them (Islam 1989). Moreover, it is the inner drive of individuals that propels them to

work more and to achieve something for their own interest by taking personal risk (Islam and

Mamun, 2000) . Need for achievement then, reflects a strong goal orientation, an obsession with

job or task to be done. So, entrepreneurship becomes the link or intervening variable between

need achievement and economic growth. Consequently, McClelland advocates increasing level

of need-achievement in a society in order to stimulate entrepreneurship and economic growth

(Islam, 1989) . Finally, according to McClelland, entrepreneurs are activated by the high extent of

achievement motivation and he also stated a desire to do well, not so much for the sake of social

recognition or prestige, but for an inner feeling of personal accomplishment, induce people to be

an entrepreneur (Islam and Mamun, 2000). He also suggests that the n Ach level can be

increased in an individual through training and by creating appropriate culture.

In the theory of withdrawal of status respect Everett Hagen’s argument is that certain

social changes are cause of psychological changes in a group or in an individual of the society.

He believes that the initial condition leading to eventual-entrepreneurial behavior is the loss of

status by a group of collectivity (Islam, 1989). According to Hagen loss of status can occur in

one of the four ways- i) the group may be displaced by force; ii) it may have its valued symbols

denigrated; iii) it may drift into a situation of status inconsistency and iv) it may not be accepted

in a new society, and the outcomes or reactions of the loss of status are retreatism, ritualism,

innovation, reformism and rebellion. Among these reactions retreatism is important for

5
entrepreneurship. Because retreatism is characterized by psychological repression of the trauma

associated with the status loss. The suppressed rage resulting from the loss of status ultimately

results in a later generation is standards of achievement being held up by mothers within the

group to their sons. For this reason the son’s becoming innovators is increased and

entrepreneurship becomes a feasible outlet for such tendencies (Islam, 1989). This theory has

been criticized for two major reasons. First reason is that this theory is post hoc that means,

Hagen discovered instances of the withdrawal of status respect by looking first at situation in

which economic growth occurred and then by looking for status losses that might have preceded

that growth. Second criticism has centered on the long period of time- as much as five or more

generations are required for the withdrawal of status respect to result in the emergence of

entrepreneurship.

In motive-Acquisition theory which is a revised version of McClelland n Ach theory

expresses that the mentality, personality, thinking power, attitude etc. are not in-born but they are

flexible and changes with situation. So, this theory advocates in favor of frequent training and

development programs to influence and motivate an individual towards a goal by changing

his/her thinking, mentality, attitude etc (Islam and Mamun, 2000).

Risk taking theory which is introduced by Richard Cantillon and John Stuart Mill defined

entrepreneurship as a mentality to take moderate or calculated risk, because people taking a very

big risk also have a great responsibility. Then, to perform this responsibility people has to take

initiatives and this initiatives result entrepreneurship.

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 Internal-External Locus of Control theory introduced by professor J.D Rotter of Ohio

University highlights the self-confidence of a person, the dependency on fortune and external

environment for becoming an entrepreneur. According to this theory internal locus of control i.e.

self confidence, extreme belief over one’s ability and power motivates individual of a society to

take initiatives for innovation which is very much helpful for individual side by side for society

too (Islam and Mamun, 2000). On the other hand, Independence Motivation theory is the similar

to internal-external Locus of control theory, which also emphasizes on the independents thinking

of entrepreneurs. This theory expresses that people having independent thinking, self-confidence,

self-controlling ability can avoid social condemnation for becoming an entrepreneur.

Another psychological theory of entrepreneurship named Creativity or Innovation Theory

highlights the physical performance as the determinant to evaluate whether an individual is

creative or not, because creative individual use their talents, thinking ability to create new and

fundamental ideas or views and they also find out techniques to bring new ideas into practice. On

the contrary, Power Motivation Theory has given emphasis on the authority to do a certain task

properly. Especially for entrepreneurship development personal power, which is related to self-

interest, is essential.

B. Sociological and Anthropological theories

There are some other theories based on sociological and anthropological aspects. This is

because socio-cultural factors have a substantial influence in creating entrepreneur as well as

entrepreneurship (Katz et al, 1991). Moreover, social and cultural factors places a high value on

innovation, risk taking and independence is more likely to produce entrepreneurial events than a

system with contrasting values (Islam, 1989). Among these type of theories Max Weber’s

7
protestant values is ancient one. In this theory Weber argued that protestant or Calvinistic logic

or values were instrumental in promoting capitalist enterprise. These values included, first of all,

an emphasis on the inherent goodness of work itself. A person’s work was regarded as a calling

in the very literal rendering of the concept of vocation. Moreover, the experience of financial

rewards from one’s work was regarded as a manifestation that one was blessed by God, a

number of elect few predestined to share this grace. However, money created temptations to the

flesh, whose yearnings were to be suppressed. Protestant values called for self-restraint and

deferral of gratification. By investing one’s earnings in the form of capital, one could practice

such self-denial. Over a period of many years, repeated investment of earnings created the capital

base for the take off of Western societies into the economic break-through of the industrial

revolution.

In another anthropological theory named Marginal and Tension theory introduced by

Robert Park in 1928 stated that a marginal man is one whose fate has condemned him to live in

two societies. The two societies are not merely different but antagonistic cultures like occidental

and oriental culture. Sometimes, for their existence, the marginal men engage themselves in

business because marginal man can’t be accepted widely in any society. So, from the group of

marginal man there is a likelihood of creating more entrepreneurs (Islam and Mamun, 2000).

From this discussion we find some variables for the entrepreneurship development. These

variables are- i) need for achievement; ii) withdrawal of status ; iii) training for changing

individual's mentality, thinking and attitude, etc; iv) risk taking mentality; v) self-confidence,

extreme belief over one's ability and power; vi) creative ability; vii) authority or personal power;

vii) inherent goodness of work, self-restraint in the case of consumption profit and; ix) social

8
marginality. All these variables found from existing prominent theories of entrepreneurship

These psychological and sociological variables are of qualitative type that play simulative role in

an individual for becoming an entrepreneur. These variables explain only the initial stage of

entrepreneurship development process, that means why and when an individual acts as an

entrepreneur. But these variables don't explain post initial stage of entrepreneurship development

process. As a result, we don't find any guidelines relating to how entrepreneurs use their

resources (capital, skill, risk taking ability, etc) and overcoming their barriers (coordination,

knowledge) from these models

III. Shifted Entrepreneurial Success factors

In this section we have tried to know what are the shifted success factors for

entrepreneurship development from the old factors with change of time. These factors can be

used for overcoming the shortcomings of psychological and sociological models and also

enhance their applicability. Anyway, the entrepreneurial success factors are broadly divided into

four categories (Ahmed, 1981). These are a) psychological factors (need for achievement, risk

taking, need for power, internal-external locus of control, motivation for autonomy, creativity,

need for affiliation, and intelligence); b) socio-cultural factors (religious values, rural-urban

orientation, marginality and tension, social cohesion, etc.); c) personal factors (family tradition in

business, previous experience, birth order, age at entrepreneurial level, education etc.); d)

opportunity factors (economic opportunities, peer group assistance, training opportunities and

guidance, existing schemes of entrepreneurial training and guided entrepreneurship etc.). Table-1

(Islam and Nazrul, 2000) shown in the appendix reveals that among these factors risk taking is

the most important success factors irrespective of business size, location and types as well for the

9
entrepreneurs, of course according to the researchers this risk should be calculated and moderate

in nature. The second, third, fourth, and fifth important success factors are innovativeness and

well coordinated-flexible persistent actions that indicate the quest for something new, like

managerial capability, as well as adaptability; self awareness/self motivation for achievement;

self confidence and personal initiative; market knowledge relating to business environment like

market demand, competition, technology development, product development, social and political

issues etc. respectively. This chart also shows that the researchers before and after 90s tend to be

different in their focus regarding success factors of entrepreneurs. According to them, before

1990s personal and psychological factors i.e. risk taking ability of entrepreneurs, innovativeness,

and self-confidence, well coordinated flexible persistent managerial actions, personal initiative

and industriousness, dynamism and self motivation are the most success factors. On the other

hand after 1990s managerial and environmental factors of business i.e. market knowledge and

well coordinated flexible persistent managerial action factors followed by risk taking capability,

innovativeness, self motivation, moral attitudes and values, and business and other

environmental consciousness, are the most important success factors for the entrepreneurs. So, it

can be said that entrepreneurial success factors have been shifted from personal and

psychological factors to managerial and environmental factors due to the increasing complexity

in business, and development of information, demanding products and customer sophistication,

globalization of business, etc (Islam and Nazrul, 2000). This trend of entrepreneurial success

factors shown in following figure

High
Fig.-1: Emphasis on
The Shifting Focus of Global Entrepreneurial Success Factors
After managerial and
environmental
Business complexity, factors
Customer and
Emphasis on
Sophistication. Time (1990)
Personal and
Psychological
Factors
10 Before
Low
Source :Islam and Nazrul

From the above diagram it is clear that before 90s, complexity in business was less, customer and

product sophistication, development of information systems and globalization of business were

low in degree. So, entrepreneurial successes were dependent on personal and psychological

factors of entrepreneurs. On the other hand, due to the increase in business complexity, customer

and product sophistication, development of information system, globalization of business after

1990, the entrepreneurial success focus has been changed towards managerial and environmental

factors. So, the shift in success factors from past to present reveals that present dominating

success factors are knowledge (information) and coordination.

IV. Proposed Model

Entrepreneurship plays the key role for the economic development creating employment,

increasing investment and consumption of a nation. But entrepreneurs are facing the problems of

knowledge (information) and coordination to utilize or to use their resources like skill, risk

taking ability, capital, ideas, etc. The main objective of this model is to show how economic

growth can be accelerated through entrepreneurship development giving the network facilities in

the form of franchise for coordination and knowledge (information).

11
 There are three components in this model- i) development entrepreneurship through

technology; ii) Networking support for knowledge (information) and coordination to increase

economic growth; ii) franchising of this network and linking it to entrepreneurship and economic

development. These three phases of the proposed model discussed below-

A. Development of Entrepreneurship through Technological development

From our earlier discussion it is clear that the present dominating success factors are

information and coordination. Based on these factors Islam and Mamun (2000) provided a model

that is shown in appendix, is the first phase of our proposed model. In this phase we have tried to

show the development of entrepreneurship through technological development. The different

integrating variables of this model are-

1) Primary review of the technological development

The effectiveness and efficiency in performance of technology depends on internal and

external environmental factors. Moreover, existing environmental concepts act as the guideline

in designing and implementing the technology development programs. For this reason in

selecting, transforming, adopting or developing the technology environmental factors have been

considered as vital. Thus the present model emphasizes environmental review as the primary task

before going to take the initiative of developing technology. So, for scanning external and

internal environmental factors the Environmental Threats and Opportunity Profile (ETOP) and

Strategic Advantage Profile (SAP) are suggested by Islam and Mamun (2000) respectively in

their proposed model. Here, the external variables are organization of the social setup, politico-

legal environment, socio-cultural variables, demographic variables, existing productive forces

and relations, infrastructural facilities of the community and supply of technical experts in the

society whereas internal variables to judge strengths and weaknesses are- human resource

12
 availability and their capability, financial capability of the organs, present mode of operations in

comparison with competitors strength, status of information available in organization and

management capability, etc.

2) Initiating Strategies for Technology Development

Technology is a powerful tool for exploiting the competitive advantage in the

interdependent world (Sharif, 1995). So, for the development of technology in-depth

deliberation, multi oriental consideration and combination of several important tasks (Islam and

Mamun, 2000) are required. In developing countries technological development requires two-

fold initiatives according to Islam and Mamun. These initiatives are - 1) technological

development by national efforts 2) technology transfer from developed countries and adopting it

to the local community by careful investigations (Islam and Mamun, 2000). On the other hand, to

develop technology within the indigenous structure research and development program is the

basic contributing factor. Especially commercial research inventions and innovations are

disseminated to the entrepreneurs for adoption in the industry and agriculture by preplanned

programs and injects the financial benefits to the total economy (APO 1985). This is why

attention should be made in researching the entrepreneurship development potentiality and

strategies to the off farm sector for rural innovations and informal sector for urban innovations

(Islam and Mamun, 2000).

Another form of technology development strategy is transfer of technology from

developed countries mediation with transnational companies. This transfer and absorption of

technologies to the developing countries may be of different forms, such as, direct foreign

investment, international sub-contracting and licensing (Islam and Mamun, 2000).

13
3) Total development in the technology

Technology is a complex combination of technoware, humanware, informer and

orgaware which are dynamically interrelated (Islam and Mamun, 2000). Technological

development is further influenced by its life cycle in that passage. This life cycle of technology is

divided into four stages named innovation stage, syndication stage, diffusion stage, and

substitution stage. To face these four stages of technological development, entrepreneurs can use

technology leader, technology follower, and technology exploiter and technology extender

strategies. At the initial stage, entrepreneur comes in the market with innovative new products,

new ideas are generated by need-pull and knowledge-push concepts, (Islam and Haque, 1994)

and customers show interest to test revolutionary products. Entrepreneurial ventures gradually

march forward to the growth and maturity through occupation and expansion of market by initial

cost absorption, close contact with customers, solving problems in the new ways and learning by

doing methods. And finally technology gains its highest possible market, competition comes to

its highest peak, per unit margin on the product is minimized by auto-game between the

competitors in the total market. At the ending point extender take the opportunity to purchase the

old technology with minimum cost and by his available resources . But for inventing and

innovating new ways real entrepreneur always seeks and investigates into the technological

phenomena by latest knowledge, which was referred in the article3 as knowledge push

innovation. On the other hand with the expansion o market creative customers do not feel

satisfaction by consuming and utilizing existing products and services in traditional and

conventional patters. Rather they find new offerings or new methods for satisfying their needs.

The dynamic entrepreneur in that stage conducts survey to know the hidden demand of the

customers and translate it by the new blending of means of production for the fulfillment of new

14
demands of the product. The method of innovation in this way is regarded as demand-pull

method. Thus, reinvestigations for further innovation by creative entrepreneurs is started in the

declining stage of old technology utilization. Development in technology is further affected by

the macro environmental settings (Islam and Mamun, 2000).

4) Mass Participation in Technological Innovation for Entrepreneurship

The successful implication of the technology depends on the commercialization, which

in the output of combined consideration of market demand and purposeful marketing strategy for

selling for the technology to its target markets. Other argued competent and dynamic industrial

partner, their techno-managerial capabilities for project execution commitment and interest is

also notable considering aspects in commercializing the technology to the ultimate entrepreneurs.

Thus, developing technology by taking care of market demand and planned publicity for

diffusion of technology to general mass increase the acceptability of technology to the target

clients. To keep this objective in view continuous coordination among the academic and research

institutions, research and development institutes, and engineering and production units with

assessment and reassessment of the production and commercialization results are essential (Islam

and Mamun, 2000). Providing integrated assistance package to the entrepreneurs for translating

their dream into economic reality by utilizing technological innovation is another important

prerequisite for mass entrepreneurial supply in an economy. Thus implementation of the

technology diffusion programs and integrated assistance services in combined form create

avenues for the entrepreneurs to start and run their enterprises. This way total society is blessed

with breeding and development of huge number of entrepreneurial ventures.

15
 The model discussed above doesn’t base on the concept of Franchising Networks. But

from our earlier discussion, it is also found that such type of model is important in the era of

tremendous development of IT and people's perception of entrepreneurial development link to

economic development of a country or a nation. So, in the second phase of our model, the

relationship between networks and economic growth through entrepreneurship development

(Islam and Mamun, 2000). This relationship is shown below-

B. Development of Entrepreneurship through Networks

In this phase we have tried to show by the figure- in the appendix how the shifted

entrepreneurial success factors accelerate entrepreneurship development as well as how it

increases the economic growth through networks. In this figure networks may be established

between entrepreneurs to entrepreneurs and also between entrepreneurs to suppliers, customers,

markets, etc. First type of network may be used for horizontal coordination and second type of

the same may be used for vertical coordination. Moreover, from this networks entrepreneurs may

collect their necessary information related with the sources of raw materials, modern and

advanced production methods, potential customer's need, potential markets, competitive products

and their familiarity to the clients, market share of the same product and it's new dimensions, etc;

with least cost. So, such networking system increases profit of entrepreneurs by reducing the cost

of production. As a result, the increased profit also increases the investment, employment and

productivity, etc; which leads economic growth. On the other hand, suppliers can establish

supply chain with low cost by collecting necessary information through this network, customers

can purchase goods and services with low cost and the ultimate result is that suppliers can

maximize their profit, can reinvest a part of this profit, can create more employment and increase

consumption. All these factors also lead to contribute to economic growth. So, it is clear that

16
networks can help a nation to accelerate its economic growth through entrepreneurship supported

by same.

C. Linking it between franchising network and entrepreneurship and economic

development:

It is the third phase of the proposed model, which is shown in the following figure. In this

section network company will collect all necessary information for the entrepreneurs. This

network company will give permission to the entrepreneurs to use their network facilities in the

form of franchise business where entrepreneurs have to pay royalties, franchise fees and other

required fees. This type of network facilities for knowledge (information) and coordination

estimates individual to act as an entrepreneur. That means such network facilities accelerate

entrepreneurship development side by side of economic growth. On the contrary, Franchise

Company can earn more profit by increasing the number of users, which also increase the

economic growth. Moreover, such type of company will assist entrepreneurs overcoming their

constraints like knowledge and coordination

Benefits of
Fig.-2 :
franchisee i.e. lower
Linking between
Entrepreneur of Franchisee will Entrepreneurs andcost
Network Company through franchising
for collecting
come under the network with information
their resources like, venture
capital, risk taking ability skill
or experience etc.
Franchisee or
entrepreneurs can This process
use their capital, accelerate Economic
Linking between entrepreneurs
skill, with the help Growth
Entrepreneurs and hip
of knowledge and
Network Company development
coordination
through franchising
facilities provided
by Franchiser or
Network
Franchiser or the Network Company by
Company will provide giving franchise
knowledge (information) and fees, royalties and
fees.
. coordination facilities both for
the Entrepreneurs or Franchisee
and also for the supplier,
customers, market etc.
17
Benefits of franchiser
i.e. royalties, increase
the number of users etc.
 There are some shortcomings of this model. These are- (i) privacy of the information; (ii)

efficient personal having the ability to identify wrong information provided by the both network

company, suppliers, customers; (iii) this model requires competent and efficient personnel for

creating new ideas by analyzing the information provided by this networks etc.

V. Conclusion

In this paper we have tried firstly to show entrepreneurship is the essential and key factor

to explore various opportunities from the surrounding environment of a nation for economic

advancement. Secondly, we critically evaluated the existing theories of entrepreneurship

development with a view to find out the success factors or variables, which play dominant role

for increasing the rate of entrepreneurship development. Thirdly, we have made an attempt to

show the shifted success factors from past to present. Finally, considering these shifted success

factors we have given a model for accelerating entrepreneurship towards economic growth.

In our proposed model we have shown initially the entrepreneurship development

through technology as a first phase. Because with the help of technology entrepreneurs can

exercise their command on available resources and it is also discussed how this technological

18
development can be possible. After this phase it is shown that franchising network can help the

entrepreneurs to collect knowledge or information for generating new ideas with low cost. It also

helps the entrepreneurs to coordinate horizontally and vertically. Then with the help of this

network entrepreneurs can earn more profit by reducing cost of production, increasing

productivity and the volume of total sales, expanding market, etc. This profit also can increase

the investment, employment, etc for the economic growth of a nation. Similarly other

stakeholders of the model like network company, suppliers, customers, etc. can also increase

their profit by expanding the number of users, establishing supply chain with low cost,

purchasing goods with low cost respectively. As a result, they can contribute to the economic

growth of the same nation along with the entrepreneurs.

References

Ahmed, S.U, "Entrepreneurship and Management Practices Among Immigrants from Bangladesh in the United

Kingdom", unpublished Doctoral Thesis, Brunel University, London, 1981.

Asian Productivity Organization, Commercialization of Indigevous Technology. Compiled and Edited by

Volunteers in Technical Assistance, 1985.

Dr. Purohit Kumar Kanchan and Rahman Shahedur, "The Development of Entrepreneurship in Bangladesh: A

Study of Entrepreneurs in Garments Industry", Chittagong University Studies, Commerce Vloume- 11, 1995.

Habrison, Fredefick and Charles Myers, Education, Manpower and Economic Growth : Strategies for Human

resources Development, New York, McGraw Hill Series in International Development

Islam M. Mainul, "Theories on Entrepreneurship", Entrepreneurship, Edited by Rahman A.H.M. Habibur,

Published by , University Grand Commission of Bangladesh, (English version) 1989.

Islam Nazrul and Mamun Z Mohammad, Entrepreneurship Development An Operational Approach, Published by

The University Press Limited, Bangladesh, 2000.

Katz. J.A. "The Institution and Infrastructre of Entrepreneurship", Enrepreneurship Theory and Practice, 1991,

15(3).

19
Saha Kumar Saroj, "Entrepreneurship and Economic Development", Entrepreneurship, Edited by Rahman A.H.M.

Habibur, Published by , University Grand Commission of Bangladesh, (English version) 1989.

Sharif, M.N, " Itegrating Busness and technology Strategies in Development Countries", Technological Forecasting

and Scial Change. Vol. 45.

20
 Appendices Table-1: Shifted Entrepreneurial Success Factor
Authors Success Factors
Risk Innovat Well Self Self- Person Knowledge/i Industriousn Moral Intern Long- Relatio Entrepreneur Socializati Future Opport Persevera
Takin iveness coordinate, Awareness/self confide al nformation ess/dynamis attitude al term n ship s personality on pattern orientatio unity nce and
g Flexible motivation nce initiativ (market m and contro involveme in child- n seeking determinat
Persistent (achievement) es issue) values/en l nt hood ion
Actions vironment

(2) (2) (3) (4) (4) (5) (6) (7) (8) (8) (9) (9) (9) (9) (9) (9)
(1)*
Cantillon * * * *
R. (1755)

Mill, J.S.
(1884) * * *
McClelland
, D, (1961) * * * *

Timmos,
J.A. (1978) * * * * * * *

Rahman,
A.H. M. H. *
(1979) *
*
Homaday,
J.A. (1982)
Meridith et
al. (1982)

Continue to next page

Ahmed S. * * * * * *
U.
(1981)

Homaday, * * * * * * * *
J.A. (1982)

Stanworth,
J. (1989)

Kao, J. J.
(1989) * *

Ray, D.D.
(1993)
* * * *
Sengupta,
S.K; *
Debnath,
S.K, (1994)

Osborne,
R.L, (1995) *

Krackhardl,
D, (1995) * * *
McKenna,
S.D., (1996)
Carrier, C., * *
(1996)

*
* *
*
 Continued from previous page
Authors Success Factors
Risk Inno Well Self Self Pers Knowl Industri Moral Internal Long- Relatio Entreprene Socializati Future Opport Perseve
Taki vativ coordinate Awarenes - onal edge/in ousness attitude control term n ship urs on pattern orientat unity rance
ng eness , s/self conf initi formati /dynam and involve Manag personality in child- ion seekin and
Flexible motivatio iden ative on ism values/en ment ement hood g determi
Persistent n ce s (market vironment nation
Actions (achievem issue)
ent) (5) (8) (9)
(1)* (2) (2) (4) (4) (6) (7) (8) (9) (9) (9) (9) (9)
(3)
Brandstaller, * * *
H., (1997)

Frese, M.,
Fay, D., * *
Hilburger, K.,
Leng, T.,
Tag, A., (1997)

Enright, M.,
McDonald, K., * *
(1997)

Chen, C.C.,
Greene, O. G.,
Crick, A., * *
(1998) *

Anderson, A.
R.. (1998)
*
Van Horn,
R.L., Harvey,
M. G., (1998) * *
No. of 11 9 9 7 6 6 5 4 2 2 2 1 1 1 1 1 1
researches
suggested

Source: Islam Nazrul and Mamun Z Mohammad, Entrepreneurship Development An Operational Approach, Published by The University Press Limited, Bangladesh, 2000
 Fig.-2 :
Development of Entrepreneurship through Technology

Investment in basic and

applied research in the Technological
formal and informal development in the Total development in the
* Mass
sector for supporting indigenous structure technology structure
Participation in
technology development
Primary review technological
at the national level
of the existing innovation
technological
Technoware
environment by * Planned
ETOP and SAP publicity for
Multi disciplinary experts' Transformation of dissemination
participation from home locally adaptive and of information
and abroad for conducting environmentally suitable
TOHumanwae
high technological technology * Providing
feasibility study integrated
Inforware assistance
package to
translate
technological
Orgaware innovation into
entrepreneurial
ventures

Entrepreneurial supply in
the greater society

Re-energizing the process Industrialization in the country Deliberate government and Gradual increase in micro and
after reassessment and multiplier impact of entrepreneurs associations' efforts for small enterprises development
development graduation of the enterprises

Proposed Model for Promoting Entrepreneurship through Technological Development

Source: Islam and Mamun
 Fig. 3:
Development of Entrepreneurship through Networks

Supplier, Supply chain

Maximizing profit
Customers, Markets with low that will increase –
Old success Knowledge cost
factors- Consumption
(Information)
Reinvestment
Employment
-Personal
(family
tradition,
experienc
-Sources of
e, birth raw materials
order, age Fo Reduce the cost of
r -New markets
education New or changed Networks transactions for
-New Increase
Factors entrepreneurs
) invention economic
in production Growth
Psycholog Methods
ical (need
for
achievem Accelerate or
ent, risk encourage
Entrepreneurs
taking, Coordination Entrepreneurship
need for
-Increase productivity
power, -Capital formation
motivatio -Increase employment
n for
autonomy
,
creativity) Between the entrepreneur and
also with the suppliers, customers,
markets