INTRODUCTION TO

Entrepreneurial behavior
 ENTRE – to enter
ENTREPRENEUR
PRENDRE – to take
Entrepreneur – a person who “ undertakes”
the task of bringing together various resources ,
managing them to achieve desired result
BUTLER ( a business columnist) call
Entrepreneurship as the
“THE EXCITEMENT OF CREATION”
Creating something out of nothing
 What it takes to be an Entrepreneur
Richard Cantillon - Introduced the term Entrepreneurship,
is known as the father on the theory of entrepreneurship .
Alfred Marshal – Entrepreneur is the one who allocates
and manages the factors of production and bears risk.
Joseph Schsumpeter – Entrepreneur is someone who
innovates, whose function is to carry out new
combinations of economic activities.
Arthur H. Cole – Entrepreneur is one who is gifted with the
ability to “perceive latent economic opportunities and to
devise their exploitation”.
William J. Baumol - Entrepreneurship as the venture some
process by which men start business. It is describes as an
economic operation whereby men who take the risk of
setting up (organizing) business must be able first to manage
to ensure success.
Who are Entrepreneurial people?
Entrepreneurial people are those who
are able to:
 perceive and take advantage of
economic opportunities.
 who innovate and develop new
products and services.
 who invest their time,
money and efforts to run
a business.
Rewards of an Entrepreneur
1. Personal Satisfaction / Self fulfillment
2. Independence
3. Profit/ make money
4. Power and Influence
5. Be your own boss
6. Express creativity
7. Social Upliftment
8. Use of accumulated funds
9. Application of skills and background
10. Security
11. Get out of a rut
12. Miscellaneous reasons
Risks of an Entrepreneur
1. Risk of losses/ Failure
2. Long hours of work
3. More time, efforts and funds
4. Unwanted responsibilities
5. Anguish over uncertainty
6. Straining of values
7. Demands above expertise
8. Growth Dilemmas
The bigger the business, the more problems
encountered
 9. Market and Opportunity risk
10. Competitive risk
11. Financial risk
12. Political and economic risk
13. Technology risk
14. Operational risk
15. Environmental risk
 Why are some countries highly
developed and others not so?
HOW DOES AN ECONOMY GROW?
Theories of economic growth may be classified into three
broad groups:
1st- consist of theories viewing economic growth as a
natural and inevitable process.
2nd – explains economic development as a rational
process brought about when men respond to
opportunities in the environment so as to promote
their own self-interest or material welfare.
3rd – views economic development as a result of seemingly
economically irrational yet psychologically & sociologically
 Interacting Forces in nature

1. Economic development
proceeds according to a master
GENERAL plan or “Law of Nature”
EXPLANATION 2. Economic development is
OF ECONOMIC brought about by an “Invisible
DEVELOPMENT Hand”
3. Economic development is
brought about by “cultural
diffusion”
4. Climatic conditions determine
the energy levels of people and
in turn its rate of development.
Economic Explanations for Development
“ Population Changes affect Development”
 David Ricardo says, population
increases eventually lead to
stagnation or final stationary state
of the economy. While admitting
that sustained increases in
population would at first lead to
more & more demand for food, he
argued that time will come when
land becomes less productive, &
requires higher production costs
in order to continue producing.
The consequence is higher prices.
The rise in prices would in turn
push up wage rates and pull down
profits for he capitalists. With
lesser profits, capitalists would
reduce investments. Economy’s
growth would eventually come to
stop.
John Maynard Keynes,
however, disagreed with
Ricardo’s conclusion on the
effect of population
increase on economic
growth. Keynes maintained
that capitalists or
entrepreneurs are most
likely to invest their
resources when there is a
demand for the commodity.
Therefore, with increasing
demand by an increasing
population, capitalists
would most likely invest
more.
The contribution of entrepreneurship are:

1. Development of new market

2. Discovery of new sources of materials
3. Mobilization of capital resources
4. Introduction of new economic development
5. Creation of employment