CHAPTER - I1 REVIEW OF LITERATURE

CHaPTER I1

REVIEW OF LITERATURE

There i s a considerable volume of research

findings on the fac tors tending t o influence the

development of entrepreneurship i n d i f f e ren t societ ies .

The findings emphasise a var ie ty of psychological,

social and economic factors. Some of the important

s tudies on the psychological and socio-economic

fac tors of entrepreneurship relevant t o the present

s t u w a r e reviewed i n t h i s chapter.

ENTREPRENEURSHIP AND PSYCHOLOGICAL VARIABLES

A number of studies on entrepreneurship r e l a t e t o

psychological dimensions l i k e need f o r achievement,

need f o r a f f i l i a t i o n , need f o r power, risk-taking,

l eve l of aspiration, extroversion, neuroticism, and

occupational preferences.

Mayer, Walker and Litwin( 1961 ) studied two groups , viz ., the managerial and s p e c i a l i s t groups , in regard t o

t h e i r motivational patterns anCi r i s k preferences, The

study revealed t h a t among persons i n jobs with de f in i t e

entrepreneurial character is t i c s , the need f o r

achievement was higher than among persons whose jobs

were non-entrepreneurial i n nature. In jobs judged

t o be non-entreprencaurial, managers scored higher than

s p e c i a l i s t s of comparable age, education and job level ,

on a projec t ive measure of achievement motivation and

showed grea ter preference f o r intermediate l e v e l of r i sks .

Scharge (1965) studied 22 entrepreneurs t o iden t i fy

t h e q u a l i t i e s t h a t make a successful R & D entrepreneur.

The respondents were interviewed concerning t h e i r

a t t i tud+s, methods of decis ion-making and management

problem,solving. The study revealed tha t :

i ) The most successful individual is high i n

achievement motivation, low i n power

motivation, and high i n awareness of s e l f ,

the market and h i s employees;

ii The most unpredictable man, who shows loss

a f t e r l o s s each year, d i f f e r s from the

successful manager only i n t h a t he lacks

awareness.

Lynn ( 1969 ) invest igated 40 entrepreneurs t o f i n d

out t h e i r personal i ty charac ter i s t ics . The Eysenck

Personal i ty Inventory was used i n the study. He found

t h a t t h e entrepreneur was more extroverted and anxious

tooe ) According t o Lynn, anxiety and neuroticism a re

the underlying contributory fac to r s i n entrepreneurship.

Javillonar and ~eters(1969) studied 27 small scale

manufacturers i n an industr ial estate. The study

revealed tha t entrepreneurship among the Indian small

scale manufacturers may be more meaningfully viewed

as a s i tuat ional phenomenon t i ed t o the type of

ownership of the business enterprise than as an

individual phenomenon, i.e, related t o an individual's

need f o r achievement, Family ownership and involvement

i n manufacturing may f a c i l i t a t e and sometimes

necessitate the entrepreneuri s entry in to his

occupational role.

Waincr and Rubin(1969) sslected a sampls of 51

small technical entrepreneurs. They collected

information through personal interview method and

by administering the Thematic Apperception T ~ S ~ ( T A T ) ,

They found tha t high n ach i s associated wi th high

company perfomancc, but the relationship b3tween

n ach and performance i s not l inear across the en t i re

range of n ach scores, The combination of high n ach

and a moderate n pow characteriscs the highest

performing entrepreneurs,

Udai Pareek and Kumar (1969 ) invest igated the

factors motivating people t o s t a r t an industry and

t h e i r r e l a t i v e importance. For the purpose they

se lec ted two categories of respondents v iz ,

i n d u s t r i a l i s t s and potenti a1 entrepreneurs, each

consis t ing of 25 resgondents . Thcy concluded t h a t r

1) Economic or ien ta t ion and family o r i en ta t ion

are two important f ac to r s of expressed

motives.

ii) I n the case of i n d u s t r i a l i s t s , c r e a t i v i t y

seems t o b~ important.

iii Entrepreneurs have more status need than

achievement need.

Hundal(1967) made a study of a sample of 184

small scale indus t r i a l entrepreneurs to determine the

motivational fac tors associated wi th t h e d i f f e r e n t i a l

r a t e of indus t r i a l growth. They were administered

t e s t s t o measure t h e i r achievement motivation,

a t t i t u d e towards money, and a t t i t u d e toward 1&gr

urrbns, and were personally interviewed t o assess

their job sa t i s fac t ion , job prestige, value pat terns ,

aspirgt ions , and in te res t s . The analysis showed t h a t

aspi ra t ions , achievement motivation and invest ing

tendency a r e associated with a f a s t r a t e of growth,

while hoarding tendency and opt imis t ic tendency

seem t o be r e l a t ed t o the slow r a t e of growth,

Singh and Singh(l971) ca r r i cd out a study with a

sample of agr icu l tu ra l entrepreneurs and another

sample of business cntreprendurs t o f i n d out the

re la t ionsh ip between the need f o r achievement and

i t s a l l i e d psychological fac tors , pa r t i cu l a r l y

risk-taking behaviour and anxiety. The study

reveal od tha t :

i) There appears t o bc hardly any re la t ionsh ip

bctween t radi t ional ism or progressiveness

and risk-taking behaviour,

ii ) Risk-taking behaviour may be e i t h e r f a c i l i t a t e d

by success or inh ib i t ed by fa i lu re .

i i f ) Tradit ional agr icu l tu ra l cntreprencurs a r e

more strongly motivated than progressive

entrepreneurs by success i n t h e i r risk-taking

behaviour .

i v ) As compared with progressive agr icu l tura l

entrepreneurs, t r ad i t i ona l entrepreneurs

are more strongly inh ib i ted by f a i lu re .

Nandy( 1973) conducted a study t o explore the

motives, modernity and entrepreneurial competence

under two subcultures. H e se lected a samplc of

67 entrepreneurs and anothdr samplc of 48

non-entrcprencurs, This study showed t h a t whi le

n ach, n pow, eff iciency and overal l modernity

were pos i t ive ly corre la ted with entry i n t o enterprise,

a factor-analyt ical ly devised s c a l ~ of entrepreneurial

competence cor re la ted w i t h only education and re l ig ious

modernity, Need a f f i l i a t i o n showed no associat ion with

e i the r entry or competence, The socia l and

psychological skills required f o r entrepreneurial '

competence a re d i f f e ren t from those required f o r

entry i n t o entrepreneurial ac t iv i ty , The subcultural

differences as cor rc la tcs of competence were suggestive,

but not suf f ic ien t .

42

Nandy( 1973 1 studied t h ~ need"achicvement among I <

entrepreneurs i n a suburb of Calcutta. He select& .

66 entrepreneurs and 48 non-entrepreneurs f o r his

study, Need f o r achievement contributes d i rec t ly to

entry in to enterprise but once a person has entered

and survived i n his new rols, the need f o r

achi~vement bacomes less of an asse t t o him and

other variables come t o determine more d i rec t ly the

qual i ty of his entrepreneurial performance. Achievement

motivated men could enter and survive i n business but

cannot, on the basis of the strength of the i r

motivational s ta te , perform bct tcr than others i n

t he i r new role. Such p~rfonnance requires different

types of sk i l l s , although n ach docs contribute

marginally t o some w r y limited typzs of expansive

entrepreneurial bchaviour, The study indicates tha t

t hc relationship bctween n ach and cntrcprencurial

performance appears t o bc complicated by a number of

mediating variables which could be both psychological

and non-psychological .

~ a o ( 1975) s e l e c t e d 78 manufacturing ent repreneurs

i n Bangalore t o s tudy t h e na tu re of ent repreneurship ,

The s tudy revealed t h a t t h e t e c h n i c a l en t repreneur i s

e n t h u s i a s t i c , c r e a t i v e , s e l f - r e l i a n t , i n t e l l i g e n t and

hard working. H e knows a t l e a s t t h e b a s i c management

t o o l s and techniques inc luding human r e l a t i o n s . H e i s

g e n e r a l l y success fu l and h i s success makcs him

fu ture-or iented , H e i s g e n e r a l l y a b l e t o b r i n g about

expansion and d i v e r s i f i c a t i o n i n production a c t i v i t y .

Singh and Jaiswal(1977) s t u d i e d t h e achidvement

motivat ion and r i sk- taking a t t i t u d e s among 54 small

s c a l e i n d u s t r i a l entrepreneurs . They adminis tered an

adapted ve r s ion of McClclland8s Thanatic Apperception

T e s t and a verba l mlasure of r isk- taking. They found

t h a t :

i) Achievement motivat ion anu r i sk- taking as

p e r s o n a l i t y c h a r a c t d r i s t ics i n f l u e n c e t h e

success and f a i l u r e of small business ,

ii) Low s tanding i n achievemznt motivat ion and

h igh s tanding i n r i sk- taking r e t a r d

i n d u s t r i a l growth,

iii) H i g h achievement motivat ion and moderate r i s k -

t ak ing promote en t repreneur ia l success ,

Subrmanian, Sivakumar and ~a lan i swami ( 1975 )

s tud ied a sample of 150 indus t r i e s t o understand t h e i r

economic s t ruc tu re , t o f i n d out t he adcquacy of the

ex i s t i ng supporting f a c i l i t i e s f o r these indus t r i e s ,

t o i nves t i ga t e various f ac to r s t h a t tend to inf luence

entrepreneurship and t o i den t i fy thz c h a r a c t e r i s t i c s

of entrepreneurs i n small s ca l e indus t r ids i n Madurai

Ci ty and cnvirons, Thc quest ionnaire and interview

methods were used f o r data co l l ec t ion , A f a c t o r

analys is y ie lded the following resu l t s :

Thc entrspreneur i s more dependent than

s e l f - r e l i a n t b ~ c a u s e he of ten seeks'

confidence from h i s re la t ives , f r i ends and

others i n f inding c a p i t a l resources and

extending h i s market,

H e exhibi t s a des i re t o achieve goals and

this ul t imate ly turns him i n t o an

achievancnt-oriented innovator.

The cntreprencurs a r e l i k s l y t o be young and

married a t t he time of s t a r t i n g t h e i r indust ry ,

i v ) Caetre is secn t o bc a predominant fac tor .

Coll ins and ~oo re (1964 ) interviewed 150 small

business entrepreneurs and found tha t :

i ) Most of t h e entrepreneurs were orphans o r

half-orphans i . ~ , with parents psychologically

away o r i n forced separation which means

symbolic o r actual r e jec t ion of fathcr .

ii ) Zntrcpreneurs lack socia l mobility drives,

they do not s t r i v e f o r posts of author i ty

and rewards associated with power and s ta tus .

iii) When one job i s done, entrepreneurs l i k e t o

take up another t o conquer,

i v ) Thcy categorisc subordinates only as good or

bad.

v ) They rebel against petxs and parents,

Lim and Javi l lonar( l968) made an empirical study .

of F i l i p ino entrepreneurship and found t h a t while

ach i~vment -o r ien ted mcn a rc a t t r a c t ed t o entrepreneurial

occupations, n ach i s not thz chicf motivation

underlying entrepreneurial performance. They suggested

t h e pos i t ive r o l e of a psychological need f o r dominance

o r power and need f o r a f f i l i a t i o n i n Fi l ipino.

entrcpreneurship.

Researches dnne i n t h e a rea of entrepreneurship

r e l a t i n g t o occupational preferences have revealed

t h a t indiv iduals with ent reprenzur ia l q u a l i t i a s p r e f e r

business occupations because they perceive t h a t these

occupations s u i t t he c h a r a c t e r i s t i c s which they possess.

Mcclclland' s ( 1961 ) cross c u l t u r a l s tudy conf inns these

f indings.

ENTREPRENAURSHIP AND SOCIO-ECONOMIC FACTORS

\ s t u d i e s on entrepreneurship i n d i f f e r e n t s o c i e t i e s

under d i f f e r e n t con& t ions have provided severa l

perspect ives on the phcnomcnon of entrepreneurship,

Researches have focussed a t t e n t i o n on a mult i tude of

f a c t o r s t h a t con t r ibu te t o the development of

entreprcricurship such as cas te , soc ia l valucs, s o c i a l

marginal i ty , a s s i s tancc and incent ives , new ideas and

oppor tuni t ies , socio-cconomic mil ieu and ecological

factors , \

Berna(1957) s tud ied a samplc of 50 medium s c a l e

i n d u s t r i a l entrepreneurs t o i n v e s t i g a t e t h e i r background,

t h e ways i n which they made the t r a n s i t i o n t o industry,

the problems they faced i n e s t ab l i sh ing and bui ld ing up

t h e i r e n t e r p r i s e s and i n improving t h e i r performance.

The f ind ings i n d i c a t e t h e cxis tcnce of a g r e a t e r

freedom of e n t r y i n t o i n d u s t r y than i s genera l ly

supposed even i n a l e s s developed region where

t r a d i t i o n a l occupation and caste a r e important i n

determining cconomic s t a t u s . soc io log ica l f a c t o r s

such as cas te , attachment t o t r a d i t i o n a l a c t i v i t i e s ,

and approval or disapproval of t h c s o c i a l group t o

which a p o t e n t i a l entrepreneur bclongs a r e less

important than cconomic f a c t o r s such as h i s access

t o c a p i t a l and possession of business cxpcrience and

t echn ica l exper t i se .

~ e r n a ( 1960) s t u d i e d 52 i n d u s t r i a l entrepreneurs

i n Madras S t a t 2 and concluded thi l t access t o c a p i t a l

and th? possession of business cxpcr imccs and t echn ica l

e x p u r t i s c a r c thc morc important f a c t o r s i n

cntrcprcncurship. .

~ i n g h ( 1970) conducted a s tudy on progressive and

t r a d i t i o n a l entrepreneurs i n the v i l l a g e s around Delhi,

A sample of 30(15 successfu l and 15 unsuccessful)

a g r i c u l t u r a l e n t r e p r e n ~ u r s were s e l e c t e d from thcsq

vi l lages , They were interviewed and t h e i r responses

were analysed i n terms of frequencies and were f i n a l l y

subjected t o chi-square analysis , The finclings

revealed t h a t progressive s u c c ~ s s f u l ag r i cu l t u r a l

ent reprenmrs had a more pos i t ive r a t i ng with

reference t o t h e i r economic progress, l i k i n g f o r

t h e i r present occupation, preference f o r agr icu l tu re

as a profession f o r t h c i r sons i f they so desired,

and a t t i t u d e towards modcrnisation than t he t r ad i t i ona l

and unsuccessful agr icu l tu ra l entrepreneurs.

Sharmd 1970) who surveyed thc soc ia l cha rac t e r i s t i c s

of entrcprencurs of Gu jara t , Pun jab, Dclhi, Andhra

Pradesh, Naharashtra and Ut tar Pradesh presented the

ca s t e background of t h ~ entrcprencurs of thesc S ta tes

which revealed t h a t morc than 50 percent of the

cntrcprcncurs were from Vaisyas, a business community.

Thc data show t h a t casbe and family background help

t o c r e a t e an cntrcprcncurial environment and

occupational awarcncss f o r thd cntrepreneurs,

Hagen4s(1962) theory of 'withdrawal of s t a t u s

respect1 claims that the disadvantaged minority groups

are an important source of entrepreneurship. ,

Hagen i l l u s t r a t e s h i s theory with reference t o Japanese

Society. Further, he a t t r i b u t e s Japan's technological

advancement t o t h e f a c t t h a t Japan had no o ther means

of self-assurance.

Frayer and McClclland( 1971 ) applied t he concept

of disadvantaged minority t o t he Indian context.

The Pars i s had enjoycd p res t ige traditionally. , But

when they were deprived of t h e i r prest ige, t h e i r

s t rong des i re couplcd with industr ious cf f o r t helped

them regain t h e i r l o s t s t a t u s through entrepreneurship.

According t o than, th.: r e a l cause of the cntrep?~;nGurial

success of tk Jains has been due t o t he prevai l ing

minority group moralc of the Ja in community which

generated a high degree of need achi~vement i n them,

Stanworth and curran ( 1973) consider the entrepreneur

as a soc i a l l y marginal person' . By soc ia l marginality

i s meant a s i t u a t i o n i n which a d iscont inui ty ex i s t s

between the individual s p ~ r s o n a l a t t r i b u t e s and the

ro l e which he plays i n society. Under ce r t a in

conditions,an individual adopts t hc r o l e of an

e n t r e p r ~ n e u r of small business as a so lu t ion t o

soc ia l marginality. Such a person seeks t o ga in

50 s o c i a l recognit ion and e s t a b l i s h an i d e n t i f y which he

otherwise lacks by s e t t i n g up a business. Bimilar ly

~ a r k ( 1 9 5 0 ) and Stonequist (1937) have pointed ou t t h a t

technological innovations a r e caused more by t h e

c u l t u r a l l y marginal persons than others.

Papanek( 19 67 ) provides evi aence t h a t economic

f a c t o r s a r e not paramount i n en t repreneur ia l growth

but s t rong incent ives and oppor tuni t ies a r e of g r e a t

s igni f icance , According t o ~ u n k e l ( l 9 7 1 ) , en t repreneur ia l

behaviour i s a funct ion of the surrounding s o c i a l

s t ruc tu re , both p a s t and present, which can be read i ly

inf luenced by manipulative economic and s o c i a l

incent ives . ~ r i p a t h i ( l 9 7 1 ) observes t h a t exposure t o

new ideas and values i s t h e common f a c t o r between P a r s i

and Hindu entrepreneurs, which l e d them t o i n d u s t r i a l

a c t i v i t y . H e a l s o poin ts ou t t h a t s o c i a l organisa t ions

l i k e the Brahmo Samaj and A r y a Samaj inf luenced t h e

emergence of entrepreneurship. Hoselitz ( 1955) argues

t h a t a congenial s o c i a l s t r u c t u r e along can provide

s u f f i c i e n t incent ives and s e c u r i t y t o entrepreneurs ,

andi it ( 1957 ) observes t h a t ecologica l f a c t o r s a r e

t h e main f a c t o r s cont r ibut ing t o entrepreneurship.

According t o her c e r t a i n regional cen t res can he lp

promote entrepreneurship.

Agarwal( 1975) c o l l e c t e d data which support-$he

hypothes i s t h a t t h e p a t t e r n s of en t r ep reneu r sh ip i n

I n d i a a r e s e c t o r - s p e c i f i c as opposed t o the national

and c u l t u r a l mil ieu.

Spodek(1965) conducted a s tudy t o f i n d o u t why

t e x t i l c cn t r cp reneu r s develop mainly i n and around

Ahmcdabad i n Gu j a r a t S t a t e , Hc found t h a t t h e

socio-cconomic f a c t o r s c o n t r i b u t e t o t h e c n t r e p r e n c u r i a l

growth i n Ahmadabad.

Pan in i (1977) conducted a s tudy wi th i n d u s t r i a l

en t r ep reneu r s of Far idabad and found t h a t c l a s s

background s e t s l i m i t s t o growth and a l s o l i m i t s t h e

e x t e n t t o which t h e cn t r cp rencu r can ovcrcomc h i s

c o n s t r a i n t s by expanding h i s s k i l l s , The lower down

an en t r ep reneu r i s i n t h c c l a s s s t r u c t u r e , t h ? more

d i f f i c u l t it i s f o r him t o transcclnd h i s c l a s s p o s i t i o n ,

Therefore , t h c p o s i t i o n i n t hd urban s o c i a l s t r u c t u r e

i t s e l f de tdrmin , :~ how f a r onc can expec t t o move i n t h a t

s t r u c t u r e .

According to Javi l lonar and Peters ( 1969 1,

entrepreneurship among the Indian small sca le

rnanuf acturers may be more meaningfully viewed as a

s i tua t iona l phenomenon t i e d t o the typa of ownership

of the business enterprise than as an individual

phenomenon, i .e. re la ted t o an individual s need f o r

achievement, Family involvement i s an important

fac to r i n promoting entrepreneurship,

Nafziger( 1972) s tudied the South Indian

Indus t r i a l i s t s and made the following observations :

i ) Entrepreneurs from high castes were more

numerous and more successful than those

from low castes ,

ii) Imnigrants from other s ta tes , who were less

l i k c l y t o be bound by local values,

obligations and cas te mores, were more

highly represented and more successful

than entrepreneurs from the region.

iii) Paternal economic s t a tu s was pos i t ive ly

re la tcd t o entry i n t o and success i n

entrepreneurial ac t iv i ty .

Some c h a r a c t e r i s t i c s of t echn ica l entrepreneurs

were s t u d i e d by Roberts and wainer( 1966). The f indings

suggest tha t :

i) Entrepreneurial f a t h e r s arc more l i k e l y t o

produce ent rcprcneur ia l sons.

ii) An indiv idual s home environment f a c i l i t a t e s

entrcprencurship.

iii) Thosc technica l entrepreneurs whose f a t h e r s

had high occupational s t a t u s werc? educated

sooner and t o a higher lL-vcl than those whose

f a t h c r s had low occupational s t a t u s .

Brozen(1954) found a c o r r e l a t i o n between f a c t o r s

such as soc ic ty ' s mores, religious background,

technology and e n t r ~ p r e n e u r s h i p . ~ e d h o r a ( l 9 6 5 ) borrows

hkavi ly from Max Webcr's ana lys i s of r e l ig ion , t h e

c a s t c systcm and the family systwn,and notes t h e

in f lucncc of r e l i g i o u s b ~ l i e f s , c a s t c norms and

f a m i l i a l p a t k ~ s n s on t h e cmergencc of entrepreneurship.

54

I n a study of entrepreneurs i n a Punjabi c i ty ,

Hazlchurst( 1966) analysed thc e f f e c t of caste, socio-

economic c lass , kinship s t ruc tu re and soc ia l community.

The Banias co-opcrated w i t h a lower caste, the 'Suds I ,

t o control thc timber busineSs against the displaced

persons and t o regain t h c i r l o s t soc ia l s t a t u s and

economic power. Udsj. Par~r3k and ~ u m a r ( 1969 ), by using

the f a c t o r analysis t echn iq~c~conc luded t h a t economic

or ienta t ion and family or ienta t ion arc two important

f ac to r s i n entrepr~neurship.

Some scholars hold thd view t h a t the various f ac to r s

ident i f i c d i n these s tudies cannot by thcmselvcs f u l l y

explain thc growth of entrcprencurship unless the p o l i t i c a l

s t ruc tu re of a society is taken i n t o consideration.

Boulding ( l954), f o r instance, hcld t h a t p o l i t i c a l s t ruc tu rc

wa3 tha decisive factor . Hoselit lC: :1955) a l so has s imi la r

arguments, while comparing entrepreneurial development i n

India and Japan. Vepa( 1967) pointed out t h a t Japanese

cntrcprcneurship found ac t ive exprcssion and resul ted i n

f as t c r economic growth ,because t h c i r p o l i t i c a l system

properly in tegra ted thc indus t r i a l and agr i cu l tu ra l

econorny,largc, medium and small sca lz industr ies ,

labour and c a p i t a l intensivc technology, t r a d i t i o n a l

and modern s o c i a l s t r u c t u r e and because there was no

existence of colonia l disruption. Indian scholars a l s o

aff i rm t h i s perspective. Modhorv (1965) a t t r i b u t e s

t h e l a t o incept ion of e n t r ~ p r e n c u r i a l growth t o thc

l ack of e n t r c p r c n ~ u r i a l motivation which hd r e l a t e s t o

non-comnitment of t h e p o l i t i c a l s t ruc tu re . Besides,

Shanna . ( 1965) and Mishra (1966) zxplored the

impact of public p o l i c i + s on ent rcpreneur ia l growth

i n 1ndia.Farooquee ( 1966 ) explored the impact of

r ~ c c n t legislation i n entrepreneurial growth i n

corporate and other sec tors .

CRITICAL EVALUATION AND THZ NBED FOR F U R W R RESEARCH

Thd studios on entrdprcneurship, reviewed above,

suggest t h a t thzre a r c c e r t a i n major unifying currents

of "thought. Psychological studies on entroprcnrlurship

centre on c e r t a i n key concepts l i k ~ motivation and

personal i ty . Among these thk ina jor emphasis was l a i d

on .need f o r achievmdnt, nccd f o r power, need for

a f f i l i a t i o n , r isk-taking, asp i ra t ion , cxtroversion, and

occupational personal i ty . H O W L ~ V ~ , achicvemcnt

motivation i s t h s one v a r i a b l ~ which has r e c ~ i v e d the

g r e a t e s t a t t e n t i o n from the rescarchcrs , Other

personality var iables have generally been ignored i n

explaining entrepreneurship,

Another current of thought underscores the achievement

motivation aspccts and l inks these with the nature of

s o c i a l i s a t i a n i n thc socicty, In thesc s tudies there

i s an overemphasis on the individual and h i s personality,

Researchers l i k c Kilby( 197 1 ) and Kunkel(1971') have

c r i t i c i s e d t h i s approach, According t o thcm, values,

a t t i t u d e s and personal i ty a rc meaningless var iables

leading t o b l ind a l leys of theory and action,

Early soc io logis t s analyszd cntreprcncurial

occurrence i n thc context of re l igious bcl ief systems;

t h c i r conclusions suggested t h a t the bel ief systems of

Hinduism, Buddhism and Islam do not encourage

entrepreneurship, This cantcntion has, howevcr, been

refu ted by l a t t e r soc io logis t s l i k c ~ox(1977) ,

Mines (1973), ~andy(1973) , and Singer(1973), According

t o thcsc l a t t e r invest igators , ~conomic opportunitias

and p o l i t i c a l conditions play a v i t a l ro le i n

promoting cntreprcncurship,

The ihportance of family, cas t o , community, s o c i a l

values, exposure t o nGw ideas, and s o c i a l pa r t i c ipa t ion

have been emphasiscd by many rosearchers.

Another group of thinkers cmphasise t h e exis tence

of economic oppor tuni t i i s and incent ives as bas ic t o t h e

developm~nt of entrepreneurship. The economists assume

t h a t the f a c t o r s of production possess a high degree

of mobility, t h a t inputs and outputs a r e homogenous,

and t h a t produclzrs, consumers and rdsourca owners have

knowlcdgc of a l l thc p o s s i b i l i t i c s opm t o t h m . Such

i d e a l conditions do not e x i s t i n underdcvcloped countr ids

A s suck, the ctntreprcncurship ~ n v i s a g c d by.cconomists

cannot bc d c v d o p ~ d i n such countr ies by giving

a t t e n t i o n t o the cconomic dimensions alone.

A c r i t i c a l evaluation of thdsc th ree major

cur rents of thought brings t o l i g h t c e r t a i n basic

factors bcaring on entrepreneurship. These include

c e r t a i n psychological f a c t o r s such as motivation,

r isk-taking, a sp i ra t ion and pcrsonal i ty , Under the

rubric of socio-economic f a c t o r s caste , f a m i l y type,

economic s t a t u s , associat ion with business groups and

occupational cxpericnce merge as important factors .

Review of s t u d i e s on e n t r e p r e n e u r i a l development

i n d i f f e r e n t s o c i e t i e s r evea l s t h a t they focus on

var ious f a c t o r s determining e n t r e p r e n z u r i a l growth.

They a r e seen t o h i g h l i g h t d i f f e r e n t pe r spec t ives

f o r t h e a n a l y s i s of t h e determinants of e n t r e p r e n e u r i a l

growth. But i t w i l l be wrong t o t r e a t them as mutual ly

exclusive. Enough evidence of t h c i r inter-dependence

i s provided by t h ~ s c s t u d i e s . I t becomcs c l d a r t h a t

t h e c o r e f a c t o r s i n en t rep reneur ia l growth a r e c e r t a i n

bzhavioural c h a r a c t e r i s t i c s and t h c i r i n t e r p l a y with

the socio-economic environment. Psychologis t s have

conc lus ive ly e s t a b l i s h e d t h c c e n t r a l r o l ? of

achievement motivat ion and r e l a t e d p e r s o n a l i t y f a c t o r s

i n ontrcprencurship. However, bchavioural f e a t u r e s

can f i n d appropr ia t e expression only i n a conducive

socio-economic environment. Environmental f a c t o r s

l i k c rcligio'cls valucs, minor i ty group morale, a p o s u r c

t o new ideas and o p p o r t u n i t i AS, goverruncn t support , and

p o l i t i c a l s t r u c t u r e , may h e l p or h inder the genera t ion

and a c t i v i s a t i o n of c n t r c p r e n e u r i a l motivation.

Thercf o re , a r e a l i s t i c pc r spcc t iv3 must incorpora te

t h e s e dimensions of bdhavioural c h a r a c t e r i s t i c s and

Review of s t u d i e s on en t repreneur ia l development

i n d i f f e r e n t s o c i e t i e s r evea l s t h a t they focus on

var ious f a c t o r s determining en t reprenzur ia l growth.

They are seen t o h i g h l i g h t d i f f e r e n t perspect ives

f o r t h c ana lys i s of t h e determinants of en t rep reneur ia l

growth. But it w i l l be wrong t o t r e a t thcm a s mutually

exclusive. Enough evidcnce of t h c i r inter-dependence

i s provided by that s tud ies . I t bccomcs c l c a r t h a t

t h e co re f a c t o r s i n cn t rep rcncur ia l growth are c e r t a i n

bdhavioural c h a r a c t e r i s t i c s and t h c i r i n t e r p l a y with

the socio-economic environment, Psychologis ts have

conclus ive ly established t h c c e n t r a l r o l ? of

achievement motivation and r e l a t e d p e r s o n a l i t y f a c t o r s

i n entrepreneurship. However, bchavioural f e a t u r e s

can f i n d appropr ia te expression only i n a conducive

socio-cconomic environment. Environmental factors

l i k c r e l i g i o u s valucs, minor i ty group morale, dxposurc

t o new ideas and o p p o r t u n i t i ~ s , g o v c r m ~ n t support , and

p o l i t i c a l s t r u c t u r e , may he lp or h inder the genera t ion

and a c t i v i s a t i o n of cn t rep rencur ia l motivation,

Thcrcf ore , a r e a l i s t i c pe r spcc t ivs must incorpora te

t h e s c dimensions of bchavioural c h a r a c t e r i s t i c s and

the r e l a t e d s o c i o economic cnvironmcntal f a c t o r s ,

Tha present study proccsds with t h i s perspective.

Such an integrated study i n a developing indus t r ia l

complex such as Coimbatore City w i l l provide an

ins ight in to the dynamics of entrepreneurship and

of fe r pointers t o t h s poss ib i l i t i e s of future

development of entrepreneurship.

OBJECTIVES OF THE PRESENT STUDY

The main focus of thc present study i s on small

scalc cn t rcpren~urs i n and around Coimbatore C i t y

with t hc following objzctives:

i) t o invest igate t h ~ psychological an'd

socio-economic characteris t i c s of

small s c a l ~ entrepreneurs i n Coimbatore

City and i ts environs;

ii to understand the reasons f o r s t a r t i n g

a u n i t and t h ~ factors encouraging o r

discouraging tho s t a r t i n g of un i t s ;

iii) t o develop a p ro f i l e of entrepreneurs

on the basis of the study.

HYPOTHESIS OF THE PRESENT STUDY

The following general hypothesis was formulated

based on t h e review of l i t e r a t u r e i n rcgard t o t h e

psychological var iab les of entrepreneurship,

Need f o r achievement i s pos i t i ve ly r e l a t e d t o

need f o r a f f i l i a t i o n , n c ~ d for power, risk-taking,

l e v e l of asp i ra t ion , extroversion, ncuroticism,

r e a l i s t i c personali ty, i nves t iga t ive personali ty,

a r t i s t i c personali ty, soc ia l personal i ty ,

en te rp r i s ing pcrsona l i ty and conventional personal i ty ,

A s regards thc socio-economic var iables , t h c

naturc of t h ~ va r i sb lc s i n c l u d ~ d i n t h e presen t

study i s such t h a t s p c c i f i c i n i t i a l hypothcsization

would ne i thc r bc meaningful nor possible. I n t h i s

rcgard t h e study i s exploratory i n nature and the

r e l a t ionsh ip between socio-economic var iab les and

cntrcprcndurship w i l l bc uxaminod on the bas i s of

thc: ana lys i s of thc data col lected.

CHAPTER - I11 MZTHODOLOGY