ME5075 - Entrepreneurship

Development
UNIT – II
MOTIVATION
 Syllabus

Entrepreneurial Motivation: Theories and Factors,

Achievement Motivation –Entrepreneurial Competencies –
Entrepreneurship Development Programs – Need, Objectives –
Business Game, Thematic Apperception Test, Self Rating, Stress
management.
 Motivation

 The word ‘motivation’ comes from the Latin root ‘moveers’ which means to
move.

 Motivation is usually defined as an internal state that arouses, directs and

maintains behaviour. Motivation, thus may regarded as something which
prompts, compels and energies an individual to act or behave .
 Entrepreneurial Motivation

 Entrepreneurial motivation may be defined as the process that activates

the entrepreneurs to exert a high level of effort for the achievement of
his/her goals.

 In other words, the entrepreneurial motivation refers to the drive or forces

within an entrepreneur that affects his/her direction, intensity and
persistence of voluntary behavior.
Nature of motivation
Process of Motivation
 Maslow’s Hierarchy of Needs
Theory
 Maslow’s theory is based on human needs.

 These needs are classified into a sequential priority from the lower to
the higher.

 Abraham Maslow developed the Hierarchy of Needs model in 1940-50s

USA, and the Hierarchy of Needs theory remains valid today for
understanding human motivation, management training, and personal
development.

 Maslow’s theory of motivation contends that people act to satisfy their

unmet needs
 Physiological needs
 These are the basic needs of human life. It includes needs for food, clothing,
shelter, air, water and other necessities of life.

 An entrepreneur is also a man. He also needs to meet his physiological

needs.

 Hence, he/she is motivated to work in the enterprise to meet the basic

needs.

 In order to survive as an individual and as a species, these needs are the

very basic ones and, therefore, are first on the hierarchy.
 Safety and security needs
 After satisfying the physiological needs, the next needs felt are called safety and security
needs.
 These are the needs for economic security and protection. from physical dangers.
 Meeting these needs requires more money.
 And hence, the entrepreneur is promoted to work more in his enterprise. Like physiological
needs, these become inactive once they are satisfied. Safety can be somewhere to stay out of
the elements.
 Social needs
 All individuals want to be recognized and accepted by others. Likewise, an
entrepreneur is motivated to interact with fellow entrepreneurs, his
employees and others.
 Esteem needs
 Esteem needs include the desire for self-respect, self-esteem, and the esteem of
others.
 When focused externally, these needs also include the desire for reputation,
prestige, status, fame, glory, dominance, recognition, attention,
importance, and appreciation.
 Self-actualization

 The highest need.

 It means to fulfil one’s individual nature in all aspects, being what
one can be.
 One of the most important aspects of self-actualization is freedom from
cultural and self-imposed restrains.

 Self-actualization is possible when the basic needs of the person are met
 Achievement Motivation Theory

 AMT was put forward and refined by a group of researchers Murray (1938), Lowel (1953),
Atkinson, Clark and Mc Clelland (1961) over the years.

 According to this theory, an individual’s motivation to achieve something in life or the dire
need to achieve a specific goal is governed by various internal factors such as willingness,
determination, punctuality, personal drive along with numerous external factors (also
known as environmental factors) such as pressures, expectations, targets, etc., set by
relevant organizations, members of the family or the society.
 McClelland’s Theory of needs
 McClelland’s Needs Theory was proposed by a psychologist David McClelland,
who believed that the specific needs of the individual are acquired over a
period of time and gets molded with one’s experience of the life. McClelland’s
Needs Theory is sometimes referred to as Three Need theory or Learned
Needs Theory.
 According to David McClelland, regardless of culture or gender,
people are driven by three motives:
• Achievement
• Affiliation
• Power
 Need for Power

 What is Power? Power is the ability to induce or influence the behavior of

others.

 The people with high power needs seek high-level positions in the
organization, so as to exercise influence and control over others.

 Generally, they are outspoken, forceful, demanding, practical/realistic-not

sentimental, and like to get involved in the conversations .
 Need for Power

• Are high performers

• Believe in excellence
• Have strong mind setting to accomplish the given task
• Calculates risk of the task beforehand
• Demands regular feedback from the superiors.
• Prefers working alone to group works
• Appreciates accomplishment rather than rewards (tangible or intangible)
 Need for Affiliation
 People with high need for affiliation derives pleasure from being loved by
all and tend to avoid the pain of being rejected.

 Since, the human beings are social animals, they like to interact and be with
others where they feel, people accept them.

 Thus, people with these needs like to maintain the pleasant social
relationships, enjoy the sense of intimacy and like to help and console
others at the time of trouble.
 Need for Affiliation

• Have desire to control and influence others

• Are argumentative, competitive and assertive in nature
• Enjoys status and recognition
• Are likely to feel frustration under uncontrollable situations
 Need for Achievement
 McClelland found that some people have an intense desire to achieve. He
has identified the following characteristics of high achievers:
• High achievers take the moderate risks, i.e. a calculated risk while performing the activities in the
management context. This is opposite to the belief that high achievers take high risk.
• High achievers seek to obtain the immediate feedback for the work done by them, so as to know
their progress towards the goal.
• Once the goal is set, the high achiever puts himself completely into the job, until it gets
completed successfully. He will not be satisfied until he has given his 100% in the task assigned
to him.
• A person with a high need for achievement accomplishes the task that is intrinsically satisfying
and is not necessarily accompanied by the material rewards. Though he wants to earn money,
but satisfaction in the accomplishment of work itself gives him more pleasure than merely the
cash reward.
 Achievement Motivation
 Desires to feel belongingness and relatedness
 Seeks love, affection and recognition
 Are likely to agree on whatever his coworkers have to say
 Fears rejection
 Prefers collaboration to competition
 Tends to avoid high risk and uncertainty
 Prefers group works to working alone
 Common characteristics associated with achievement
oriented entrepreneurs

 Drive to achieve

• Internally driven self starter with strong desire to:

• To compete with others
• To excel with self imposed standard
• To pursue and attain challenging goal
Common characteristics associated with
achievement oriented entrepreneurs

Calculated risk taking

 High achiever tend to take moderated or calculated risk

 Examining the situation and determine how to increase the chance of winning a
business situation

 They make their effort to get the odds in their favor

 They do not take unnecessary risks

 Internal locus of control

• They belief that success or failure is determined by their own effort.

• They belief in themselves
• They do not belief that success or failure of their ventures were determined by
fate or luck
• This behavior is consistent with self confidence and desire to take personal
responsibility.
Tolerance for failure
 High achievers take failure as a learning experience.

 Do not easily become disappointed, distress or discouraged by

any setback or difficulties faced in the mist of business
competition.
 Many successful entrepreneurs belief that they learn more from
their earlier failure than from their earlier success.
Seeking Feedback
• They have strong desire to actively seek and used feed back to know how well they
are doing and how to improve their performance.
• Most successful entrepreneurs are quick learners

Integrity and reliability

• Integrity and reliability help to build and sustain trust and confidence
• This helps to endure the relationship between entrepreneurs, partners, customers,
suppliers and stakeholders.
 Entrepreneurial Motivating Factors

 Let us address to the larger question what factors motivate entrepreneurs

to start enterprises.
 Many researchers have tried to understand and answer this question by
conducting research studies to identify the factors that motivate people to
take all the risk and start a business enterprise (Kamraj and Muralidaran
2005, Manimala and Pearson 1998, Maslow 1954, Mitchell 2004, Saxena
2005, Khanka 2009).
 Entrepreneurial Motivating Factors
 While some researchers have classified the factors motivating
entrepreneurs into ‘push’ (compulsion) and ‘pull’ (choice) factors, most of
the researchers have classified all the factors motivating entrepreneurs into
internal and external factors as follows:
 Internal Factors:
 1 . Desire to do something new.
 2. Become independent.
 3. Achieve what one wants to have in life.
 4. Be recognized for one’s contribution.
 5. One’s educational background.
 6. One’s occupational background and experience in the relevant field.
External Factors
1. Government assistance and support.
2. Availability of labour and raw material.
3. Encouragement from big business houses.
4. Promising demand for the product.
 One research study (Murthy et. al. 1986) reports that entrepreneurs are
motivated to start business enterprises due to the following three types of
factors:
1. Ambitious factors.
2. Compelling factors
3. Facilitating factors.
 The present author (Murthy) also conducted a study on “Entrepreneurship
Development in Assam” financially supported by the All India Council for
Technical Education (AICTE), New Delhi.

 The study found the following motivational factors for the entrepreneurs.

 The study chose the 15 statements on motives on the basis of prior

research on human motives.

 It measured the keenness (the quality of being eager)

Motivating Factors for Entrepreneurial Plunge
Sl. No The Statements Mean Scores

1. Money motive 4.52

2. Independence/one’s own boss 4.47
3. Provide greater comfort to family 4.39
4. Do something new and path-breaking 4.32
5. Reputation and recognition 4.16
6. Preside over a big business 4.05
7. Take family business to new heights 3.93
8. Do business because it is one’s duty 3.85
9. Express one’s creativity and ingenuity 3.76
10. Make optimum utilization of one’s ability 3.66
11. Temperament fit between self and business 3.61
12. Contribute to the good of the society 3.50
13. Desire to give financial security to one’s kins 3.21
14. Flexibility of balancing work and family life 3.07
15. Enjoyable work 2.85
 Factor-wise Classification of Entrepreneurial Motives
Motivating Factors Mean Score
I. Self-Actualization
1. Money / Economic Motive 4.52
4. Do something new and path-breaking 4.32
Rather than interpreting each of 9. Express one’s creativity and ingenuity 3.76
the 15 statements individually, 10. Make optimum use of one’s ability 3.66
for the convenience of analysis, II. Nature of Work Motive
we have grouped all these 12. Contribution to the good of society 3.50
statements into six major
15. Enjoyable work 2.85
factors as shown in Table
III. Autonomy and Power Motive
2. Desire of Independence 4.47
6. Preside over a big business 4.05
11. Temperament fit between Self and business 3.61
14. Flexibility of balancing work and family life 3.07
IV. Status Motive
5. Reputation and Recognition 4.15
7. Take family business to new heights 3.93
V. Affiliation Motive
3. Provide greater comfort to family 4.39
13. Desire to give financial security to one’s kins 3.21
VI. Deontic Motive
8. Do business because it is one’s duty 3.85
 Competency: forms of business-related expertise
 Basic business competency: understanding the organizational and
business processes of a firm.
 COMPETENCY is a bundle of skills and technologies that enables a
company to provide a particular benefit to stakeholders
 For example
 At Sony – benefit is pocketability

 Core competence is miniaturization

 At Times of India – benefit is on time delivery

 Core competence is logistics management

 At Motorola–benefit is un tethered(rope) communication

 Core competence is wireless communication.

 Entrepreneurial
Competencies

 A competence is an underlying characteristic of a person which led to his or

her effective or superior performance in a job.

 The term ‘competence’ refers to the combination of Knowledge, Skills,

Motive, Attitude and Habits.

 Every role requires some particular competencies.

 Entrepreneurial Competencies
 Initiative.  Problem solving.
 Seeking and Acting on opportunities.  Self confidence.
 Persistence.  Persuasion.
 Information seeking.  Use of influence strategies.
 Concerns for high quality of work.  Assertiveness.
 Commitment to work contract.  Monitoring.
 Efficiency orientation.  Concern for other`s welfare.
 Systematic planning.
Initiative
 Taking actions that go beyond job requirements or demands of the situation.
 Doing things on own before being asked for; or being forced to by events.
 Taking actions to expand the business into new areas, products or services.
Seeing and Acting on Opportunities
 Seeing and acting on opportunities for business development or for personal
growth.
 Seizing unusual opportunities to obtain and mobilize necessary resources.
Looking for and taking actions to seize opportunities.
Persistence
 Taking suitable actions in the face of a significant obstacle.
 Ensuring all efforts to solve a problem or barrier.
 Taking repeated actions to overcome obstacles that get in the way of achieving
goals.
Information Seeking
 Personally undertaking a research or analysis to find out answer of some problem.
 Seeking information to clarify what is needed.
 Using contacts & networks to obtain desired information. Taking action on own to help reach
objectives.
Concern for High Quality of Work
 Stating a desire to produce work of high quality.
 Comparing own/ company’s work favourably to that of others.
 Making all out efforts to ensure the quality of products or services.
 Doing things that meet or beat existing standards of excellence.
Commitment to Work Contract
 Taking extra-ordinary efforts or making personal sacrifices to complete a job.
 Accepting full responsibility for failures, if any.
 Expressing utmost concern for the customers.
 Readiness to work even at workers’ places to get work done.
 Placing highest priority for getting a job completed.
Systematic Planning
 Breaking a large task down into several sub-tasks.
 Developing plans after duly anticipating obstacles.
 Evaluating alternatives on merits and demerits.
 Taking a logical and systematic approach to activities, in general.
 Developing and using logical, step-by-step plans to reach goals.

Problem Solving
 Identifying the root-cause of the problem or objectives.
 Developing strategy in the light of objectives, resources and constraints.
 Keeping alternatives, wherever necessary.
 Generating new ideas or innovative solutions Identifying and applying new and
potentially unique ideas to reach the goals.
Self-confidence
 Expressing confidence in own ability to complete a task.
 Sticking with own judgment in the face of opposition or early lack of success.
 Doing something for which chances of success are not very fair.
 Having a strong belief in self and own abilities.
Persuasion
 Convincing someone successfully to do something else than what he/she would have
done.
 Selling someone a product or service.
 Making someone agree to provide resources on extra-ordinary conditions.
 Asserting own confidence & competence in personal or company’s strengths.
 Persuading others successfully.
Monitoring
 Ensuring that the work is completed or it is of high quality.
 Personally supervising all aspects of the work.
 Developing a system of supervision & monitoring.
 Ensuring smooth progress of project or work

Concern for Others’ Welfare

 Taking actions to improve the welfare of society.
 Responding positively to employees’ specific needs.
 Having a concern for the welfare of employees and their families.
 Having a concern & taking suitable actions to improve others’ welfare.

Conclusion
 These fifteen competencies are very common in good entrepreneur.
 It can vary with one person to another but mostly these are very common and important for an
entrepreneur.
To be considered competence a skill must
meet three tests
Customer Value:
 Competencies are the skills that enable a firm to deliver a fundamental
customer benefit.

 Honda’s ability to produce some of the world’s best engines and power trains
does provide customers with highly valued benefits of superior fuel economy,
zippy acceleration, less noise and vibration.
Competitor Differentiation:
 A capability must also be competitively unique

 Power trains is a competence at Honda which has never been so at Ford.

 To be considered competence a skill must
meet three tests
Extendibility:
 A competitive is truly core when it focus the basis for entry into new product markets.

 SKF, the world’s leading manufacturer of roller bearing has competencies in

antification, precision engineering and making perfectly spherical devices. In order to
achieve extendibility, SKF must be capable of manufacturing the round, high precision
recording heads that go inside a VCR, most of which are now manufactured by
Japanese firms.
Entrepreneurship Development Programme
(EDP)
Need for EDP’s:
 Traits or competencies are underlying characteristics of the entrepreneurs
which result in superior performance.

 People appreciate the need for and importance of

the entrepreneurial training to induce motivation and competence
among the young prospective entrepreneurs.
 Objectives of EDP’s
 Develop and strengthen their entrepreneurial quality.

 Analyse environmental set up relating to small industry and business.

 Select product.

 Formulate project for the product.

 Understand the process and procedure.

 Know the sources of help and support available.

 Acquire the necessary managerial skills.

 Appreciate the needed entrepreneurial discipline.

 Other important objectives
 Let the entrepreneur set or reset the objectives and strive for their realization

 Prepare to accept the uncertainty involved.

 Enable to take decisions.

 Develop a broad vision.

 Make him subscribe to industrial democracy.

 Develop passion for integrity and honesty.

 Make him learn compliance with Law.

 Course contents and Curriculum of EDP’s
General introduction to Entrepreneurship
 Factors affecting small scale industries ,the role of entrepreneurs in
economic development ,entrepreneurial behavior and the facilities
available for establishing SSI

Motivation training
 Efforts are made to inject confidence and positive attitude and behaviour
among participants towards business.

Management skills
 Knowledge of managerial skills enables an entrepreneur to run his/her
enterprise smoothly and successfully.
 Course contents and Curriculum of EDP’s
Support system and Procedure.
 Support available from different institutions and agencies for setting up and
running small scale enterprises.

Fundamentals of Project Feasibility study.

 Provide guidelines on the effective analysis of feasibility or viability of the
particular project

Plant visits.
 To familiarize the participants with real life situations in small business ,plant
visits are also arranged.
 Phases of EDPs
 Pre- training phase

 Training phase

 Post- training phase

 PRE- TRAINING PHASE
 Selection of entrepreneurs
 Arrangement of infrastructure
 Tie-up of Guest faculty for the training purposes
 Arrangement for inauguration of the programme
 Selection of necessary tools and techniques
 Formation of selection committee
 Arrangement for publicity and campaigning
 Development of application form
 Finalization of training syllabus
 Pre-potential survey of opportunities available
 TRAINING PHASE
Need for achievement A trainer should see the following changes in the
behavior of the trainees.

 Attitudinally tuned very much towards his proposed project ideas

 motivated to plunge into entrepreneurial career and bear risk

 How should he behave like an Entrepreneur

 What kinds of Entrepreneurial traits he lacks the most

 Whether he possess the knowledge of technology and resources

 Does he possess the required skill in selecting the viable product; mobilizing

the required resources at the right time

 POST-TRAINING PHASE

 Review the pre-training work

 Review the process of training programme

 Review past training approach

 Assessing the Effectiveness of EDPs
 Activity level of the respondents
 New enterprise established
 Total investments made
 Investments in the fixed assets made
 Number of people employed
 Number of jobs created
 Increase in profit
 Increase in sales
 Quality of product/ service improved
 Quicker repayment of loans
 EDPs measured with Entrepreneurial
behavior

 Planning orientation.

 Achievement orientation.

 Expansion orientation.

 Management orientation.
 Problems faced by EDP
 Trainer motivations are not found up to the mark in motivating the trainees
to start their own enterprises.

 ED organizations lack in commitment and sincerity in conducting the EDPs

 Non conducive environment and constraints make the trainers-motivator

role ineffective.

 The antithetic attitude of the supporting agencies.

 Selection of wrong trainees also leads to low success rate of EDP.

 THEMATIC APPERCEPTION TEST
ORIGIN & METHOD
 T.A.T is the most widely used constructive projective technique.
 This test was developed in American university unlike Rorschach, it has its roots in
America.
 It has been developed by Murray & Morgan in 1935, 1943 in Harvard University.
 It is a popular technique to measure personality, it is equally popular in personality
research.
 Along with Rorschach & WAIS, TAT forms the test battery to evaluate a client in a
precise & accurate manner.
 It is more structured than Rorschach & less structured than WAIS.
 In assessing the personality, the content of the story provide us the base to assess
patient.
 The TAT is sometime described as a test of personality.
 METHOD/PROCEDURE
 The complete version of the test contains 31 picture cards.
The subject is asked to tell a story for each picture that is
presented to them, including the following:

 1) what has led up to the event show

 2) what is happening at the moment

 3) what the characters are feeling and thinking

 4) what the outcome of the story was

THE PICTURE CARDS:
 Out of the 31 cards, 30 cards are picture cards, all black and
white, which contain a variety of scenes designed to present
the test taker with certain classical human situations. One card
is left blank where participants are asked to imagine a picture
and then tell a story about it.
 The original 31 cards were divided into three categories, for
use with men only, with women only, or for use with subjects of
either sex.
 In practice, an examiner might administer as few as one or two
cards or as many as 31.
INTERPRETATION OF CARDS
 In interpreting responses to the TAT, examiners typically focus their
attention on one of three areas:
 a) the content of the stories that the subject tells
 b) the feeling or tone of the stories and the participant
 c) or the subject's behaviours apart from responses
 These behaviours may include verbal remarks (for example, comments about
feeling stressed by the situation or not being a good storyteller) as well as
nonverbal actions or signs (blushing, stammering, fidgeting in the chair, etc.)
 The story content usually reveals the subject's attitudes, fantasies, wishes,
inner conflicts, and view of the outside world.
 The story structure typically reflects the subject's feelings, assumptions about
the world, and an underlying attitude of optimism or pessimism.
SCORING SYSTEMS:
 Several formal scoring systems have been
developed for analyzing TAT stories
systematically and consistently.
 Three common methods that are currently used
in research are the:
 1) Defence Mechanisms Manual
 2) Social Cognition and Object Relations (SCOR)
scale
 3) Personal Problem-Solving System—Revised
(PPSS-R)
PSYCHOMETRIC CHARECTERISTICS
 Reliability
 Validity
APPLICATIONS OF TAT
 Personality Assessment: Helps to evaluate a person's patterns of thought,
attitudes, observational capacity, and emotional responses to ambiguous test
materials
 Expectations: Reveals the expectations of participants in relationships with peers,
parents or other authority figures, subordinates, and possible romantic partners.
 Recruitment: The TAT is often used in individual assessments of candidates for
employment in fields requiring a high degree of skill in dealing with other people
and ability to cope with high levels of psychological stress— such as law
enforcement, military leadership positions, etc.
 Forensic Purposes: TAT is sometimes used for forensic purposes in evaluating the
motivations and general attitudes of persons accused of violent crimes.
 Consumer Behaviour: TAT is widely used to study consumer perceptions and
motivations.
CONCLUSION
 Despite criticisms for being unscientific, the TAT continues to be used as a tool for
research into areas of psychology such as dreams, fantasies, mate selection and
what motivates people to choose their occupation.

 However, for accurate results, the TAT must be interpreted in the context of the
subject's personal history, age, sex, level of education, occupation, racial or ethnic
identification, first language, and other characteristics that may be important.

 Sometimes it is used in a psychiatric or psychological context to assess personality

disorders, thought disorders, in forensic examinations to evaluate crime suspects,
or to screen candidates for high-stress occupations