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Chapter: Business Science - Enterpreneurship Development - Entrepreneural Environment

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Business Entrepreneural Environment

The emergence and development of entrepreneurship is not a spontaneous one but a dependent phenomenon of economic, social, political, psychological factor often nomenclature as supporting condition to entrepreneurship development.

Business Environment

 

The emergence and development of entrepreneurship is not a spontaneous one but a dependent phenomenon of economic, social, political, psychological factor often nomenclature as supporting condition to entrepreneurship development.

 

These factor may have both positive and negative in uence on the emergence of entrepreneurship. Negative influence create inhabiting milieu to the emergence of entrepreneurship. For analytical purpose this conditions factor are grouped and discussed under two categories (i.e.) Economic factor and non-economic factor

 

Economic Factor:

 

·        Capital

 

Capital is one of the most important prerequisites to establish an enterprise. If only a capital is available, entrepreneur can bearing land, machine and raw material and together produce goods 'Capital is regarded as lubricants/fuel to the process of production' Increase in capital investment,

 

capital output ratios tends to increase. This result in increase in pro t.

 

Capital --------------output ratio------------Profit

 

This suggests that capital supply increases entrepreneurship also increases.

 

·        Labour:

 

Quantity rather quality of labour in uence the emergence of entrepreneurship Cheap labour is often less mobile or even immobile. Adam smith consider division of labour as an important element in economic development. According to him division of labour as an important element it depends. Up on the size of the market leads to improvement in the productive capacities of labour due to an increase in the dexterity (i.e.) improvement in skills, grace and cleverness) of labour. Ii appears that labour problem clearly does not prevent entrepreneurship for emerging.

 

·        Raw material:

 

The necessity of raw material hardly needs any emphasis for establishing any industrial activity. In the absence of raw material neither any enterprises nor entrepreneur can emerge. In some cases " technological innovations can compensate for raw material inadequate. The Japanese case for example, witness that " Lack of raw material clearly does not prevent entrepreneurship from emerging but in uence the directions in which entrepreneurship took place". In fact, supply of raw materials is not in uenced by themselves but became in uential depending upon the opportunity conditions. The more favourable these condition are, the more likely is the raw material to have it is in uenced on entrepreneurial emergence.

 

·        Market:

 

Potential of the market constitutes the major determinant of provable rewards from entrepreneurial function. " the proof of pudding lies in eating, the proof of all production lies in conceptions (i.e.) Marketing." " Both size and composition of market in uence entrepreneurship in their own ways" Monopoly in a particular product in a Particular market becomes in uential for entrepreneurship than a competitive market. Lands hold the opinion that improvement in transportation are more bene cial to heavy industry than to light industry because of their e ect on the movement of raw materials.

 

Wilken claims that instances of sudden rather than 'Gradual improvement in market potential provide the clearest evidence of the in uence of entrepreneurship. Germany and Japan as the prime examples where rapid improvement in market was followed by rapid entrepreneurial appearance.

 

Non - Economic Factor:

 

Sociologist and psychologist advocate that the in uence of economic factor on entrepreneurial emer-gence largely depends upon the extends of non economic factor (i.e) social and psychological in the society.

 

Social Conditions:

 

·        Legitimacy of entrepreneurship:

 

The proponents of non-Economic factors gives emphasis to the relevance of a system of norms and values with in socio culture setting for the emergence of entrepreneurship.

 

The social status of those playing entrepreneurial role has been considered one of the most important content of entrepreneur legitimacy.

 

To increase the legitimacy of entrepreneurship scholar have purpose the need for change in the traditional values, which are assumed to be opposite to entrepreneurship.

 

"McClelland had also pointed out that a complete change may not be necessary for entrepreneurial appearance". Instead, they submit a re - interpretation of the traditional values or its synthesis with the newer values to increase entrepreneurial legitimacy.

 

 

·        Social mobility:

 

Social mobility involves degree of mobility, both social and geographical and the nature of mobility channel with in a system. "social mobility is crucial for entrepreneurial emergence is not unanimous".

 

Tags : Business Science - Enterpreneurship Development - Entrepreneural Environment
Study Material, Lecturing Notes, Assignment, Reference, Wiki description explanation, brief detail

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