Psychological

Entrepreneurship
Theory
Group 4

- Hinacay, Henry
- Toreno, James
- Ibañez, Michael
- Quimada, Jezavel
- Traya, Honey
 OBJECTIVES
• Present the meaning or
definition, the scope and
concept of the theory.

• Present an example scenario of

the theory.
 What is
psychological
entrepreneurship
theory?
 DEFINITION
- Psychological theories of
entrepreneurship put emphasis
on the emotional and mental
aspects of the individuals that
drive their 04
entrepreneurial
activities (Baum, Frese & Baron,
2014).
- The entrepreneurs are primarily
motivated by an atavistic will to
power, will to find a private
kingdom or will to 04 conquer
(Joseph Schumpeter, 1934).
- Entrepreneurship gets boost
when society has sufficient
supply of individuals with
necessary psychological
04
characteristics.
 Need for
achievement
Vision
Characteristics
Competitive
ability
Capacity to
stand against
social opposition
There are three most popular psychological
theories:

1. McClelland’s theory,

2. Rotter’s locus of control theory, &

3. Action regulation theory.

 1. McClelland’s Theory
● Achievement motivation theory talks about
the behavior of every individual to achieve
success. McClelland argued that the need for
achievement is partially and culturally
determined with some societies producing
fewer individuals with achievement
orientations. Societies lacking in achievement
– oriented individuals are expected to have
David Clarence
McClelland lower average incomes.
 2. Rotter’s Locus of Control Theory
● This theory considered to be an important
aspect of personality. A locus of control
orientation is a belief about whether the
outcomes of our actions are contingent on
what we do (internal control orientation) or on
events outside our personal control (external
control orientation). Internal locus control is
simply our decisions and efforts, while external
Julian Rotter
locus control is about our fate and luck.
 3. Action Regulation Theory
● Michael Frese outlines the application of
action theory in relation to entrepreneurship.
This theory explains how individuals control
their cognitive behavior with the help of
cognitive processes which consist of
selection and development, orientation,
monitoring and planning and processing
feedback.
Michael Frese
- In a nutshell, psychological perspective
helps to determine whether society has a
healthy supply of individuals possessing
entrepreneurial characteristics. It also
helps develop the overall concept of
04
entrepreneurship which is dynamic and
changes as per the market conditions.
Scenario
Businesswoman
Entrepreneur
Businesswoman
Entrepreneur
Businesswoman
Entrepreneur
Thank you!