Entrepreneurial Decision
Process:
Entrepreneurial
Decision Process is about deciding to become an entrepreneur by leaving present
activity i.e. a movement from the present lifestyle to forming a new
enterprise. The decision to start a new company occurs when an individual
perceives that forming a new enterprise is both desirable and possible.
The
decision to become an entrepreneur to start a new business consist of several
sequential steps-
1.
The decision to leave a present career or lifestyle (Pushing
and pulling influences active in the decision to leave a present career or
lifestyle
2.
The decision about desirability of new venture formation
i.e. the aspects of a situation that make it desirable to start a new venture
and this relates to culture, subculture, family, teachers and peers.
3.
The decision about possibility of new venture formation i.e.
factors making it possible to create a new venture like government, background,
marketing, financial, role models.
Desirability of
New Venture Formation :- (Aspects of a situation that make it desirable to start
a new company)
1.
The perception that starting a new company is desirable
results from an individual’s culture, subculture, family, teachers and peers.
·
American culture places a high value on being your own boss,
being a success and making money therefore, it is not surprising to find a high
rate of company formation in the United States.
·
On the other hand in some countries making money is not as
valued and failure may be a disgrace. The rate of business formation in these
countries is not as high.
2.
Many subcultures that shape value systems operate within a
cultural framework.
·
In
the U.S. they include Route 128 (Boston), Silicon Valley (California), and
North Carolina Triangle. In India they include Marwari, Gujrati, and Rajasthani
Businessmen.
·
These
subcultures support and even promote entrepreneurship.
3.
Studies indicate that a high percentage of founders of
companies had fathers and/or mothers who valued independence.
4.
Encouragement to form a company is also gained from
teachers, who can significantly influence individuals.
5.
An area having a strong educational base is also a
requirement for entrepreneurial activity.
6.
Peers are important, also, as is an area with an
entrepreneurial pool and peer-meeting place.
Possibility of
New Venture Formation : - (Factors
making it possible to create a new venture)
Although
the desire of new venture formation derived from the individual’s culture,
subculture, family, teachers and peers needs to be present before any action is
taken, the second feature necessary centers around this question “What makes it
possible to form a new company?”
1.
The government contributes by providing the infrastructure
to help a new venture.
· The India has the necessary roads,
communication and transportation systems, utilities, and
Economic stability
· The Indian tax rate for companies and
individuals is better than in some European countries.
2.
The entrepreneur
must have the necessary background.
·
Formal education and previous business experience give a
potential entrepreneur the skills needed to form and manage a new enterprise.
·
Although educational systems are important in providing the
needed business knowledge, individual will tend to be more successful in
forming in fields in which they have worked.
3.
The market must be large enough and the entrepreneur must
have the marketing know-how to put together the entire package.
4.
The entrepreneur must have the marketing know-how to put
together the entire package.
5.
A role model can powerfully influence the perception of
venture possibility.
6.
Finally, financial resources must be readily available.
·
Although most start-up money comes from personal savings,
credit, and friends, but there is often a need for additional capital.
·
Risk-capital availability plays an essential role in the
development and growth of entrepreneurial activity.
Good notes, Thank you
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