ENTREPRENEURSHIP THEORIES

SoB © 2015 | Dr. Mushumbusi Paul Kato - Department of Marketing and Entrepreneurship: BUS 120
School of Business
Economic Theory
•  Economic entrepreneurship theories date back to
the first half of the 1700s with the work of Richard
Cantillon, who introduced the idea of
entrepreneurs as risk takers. The classic,
neoclassical and Austrian Market process
schools of thought all pose explanations for
entrepreneurship that focus, for the most part, on
economic conditions and the opportunities they
create.
• 
SoB © 2015 | Dr. Mushumbusi Paul Kato - Department of Marketing and Entrepreneurship: BUS 120

School of Business
Economic Theory (Cont’d)
•  In this school of thought the scholars argue that;
Entrepreneurship and economic growth take place
when the economic conditions are favourable.
They believe that economic incentives are the main
motivators for entrepreneurial activities.
•  Economic incentives include favourable taxation
policy, favourable industrial policy, favourable trade
and SMEs policies, favourable sources of finance
and raw material, infrastructure availability,
investment and marketing opportunities, access to
information about market conditions, technology
etc
SoB © 2015 | Dr. Mushumbusi Paul Kato - Department of Marketing and Entrepreneurship: BUS 120

School of Business
Psychological Theories
•  Psychologists (e.g., Begley and Boyd 1987,
McClelland 1961) have proposed theories in which
entrepreneurship is a function of stable
characteristics possessed by some people and not
others.
•  According to this perspective, enduring human
attributes—such as need for achievement
(McClelland 1961), willingness to bear risk
(Brockhaus and Horowitz 1986), self-efficacy (Chen
et al. 1998) internal locus of control, and tolerance
for ambiguity (Begley and Boyd 1987)—lead some
people and not others to choose entrepreneurship
SoB © 2015 | Dr. Mushumbusi Paul Kato - Department of Marketing and Entrepreneurship: BUS 120

School of Business
Sociological theories
•  The sociological theory centers its explanation for
entrepreneurship on the various social contexts
that enable the opportunities entrepreneurs
leverage
•  Entrepreneurship is likely to get a boost in a
particular social culture
•  Society’s values, religious beliefs, customs, taboos
influence the behaviour of individuals in a society
•  The entrepreneur is a role performer according to
the role expectations by the society
SoB © 2015 | Dr. Mushumbusi Paul Kato - Department of Marketing and Entrepreneurship: BUS 120

School of Business