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".
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