The Theory of Performance (ToP) develops and relates six foundational concepts  to form a framework that can be used to explain performance as well as performance improvements. 

To perform is to produce valued results. A performer can be an individual or a group of people engaging in a collaborative effort.

 Developing performance is a journey, and level of performance describes location in the journey. 

Current level of performance depends holistically on 6 components: 

1. context, 
2. level of knowledge, 
3. levels of skills,
4.  level of identity, 
5. personal factors, and 
6. fixed factors.

 Three axioms are proposed for effective performance improvements. These involve a performer’s mindset, immersion in an enriching environment, and engagement in reflective practice. A theory of performance (ToP) is useful in many learning contexts. 

Traditional Contexts 

A theory of performance(ToP) informs learning in classrooms, workshops, and other venues that are traditionally associated with learning. 

Non-traditional Contexts 

A ToP informs learning in contexts that are not traditionally conceptualized as learning environments. Examples of these contexts include academic advising, self development, departments, academic committees, professional research groups, colleges. 

Organizational Learning

 A ToP informs learning by organizations through the idea of examining the “level of performance” of the organization. Performance 

To perform is to take a complex series of actions that integrate skills and knowledge to produce a valuable result. 

In some instances, the performer is an individual. In other performances, the performer is a collection of people who are collaborating such as an academic department, research team, committee, student team, or a university.

 Level of Performance Performance,  is a “journey not a destination.” The location in the journey is labeled as “level of performance.” Each level characterizes the effectiveness or quality of a performance. 

• As a lawyer improves her level of performance, she can conduct legal research faster, more thoroughly, and more in-depth. 

• As an academic department improves its level of performance, the members of the department are able to produce more effective student learning, more effective research, and a more effective culture. 

• As a manager advances his level of performances, he is able to organize people and resources more effectively and to get higher quality results in a shorter time. 

• As a teacher advances his levels of performance, he is able to produce deeper levels of learning, improved levels of skill development, and more connection with the discipline for larger classes while spending less time doing this. 

• As an actor improves his level of performance, he is able to learn parts quicker, play more varied roles, and produce an deeper and more meaningful impact on audiences. Performance advancing through levels is shown in Figure 1 where the labels “

Read More

Organizational Change Theory

Organizational change theory is also known as stage theory, change management or organizational change management (OCM). It is a multidisciplinary field of study that seeks to understand and explain how organizations implement change and undergo a transformational process.

The ultimate goal of organizational change management is to find the best strategies for leading successful transformations within an organization. It's all about navigating the twists and turns of shifting structures, systems, cultures and behaviors to adapt to different pressures and seize exciting new opportunities.

This theory serves as a valuable guide for leaders, managers and business professionals who need to foster resilience and promote sustainable growth in today's dynamic business landscape.

Organizational Theory of Change is a methodical approach to planning, implementing, and evaluating organizational change initiatives. It provides a roadmap for organizations to move from their current state to a desired future state by outlining the logical sequence of steps required to achieve long-term goals.

The Importance of Theory of Change in Organizational Development

The Theory of Change (TOC) is an essential framework for strategic planning in organizations. It helps align activities with long-term visions and missions, leading to improved decision-making at all organizational levels.

By clearly outlining the path to change, TOC enhances communication, providing a common language for stakeholders to discuss and understand the change process. Additionally, it fosters increased accountability by setting clear metrics and milestones and allows for adaptive management by offering a clear view of the change process. This makes organizations more flexible and responsive to changing circumstances.

Key Components of a Theory of Change

A well-developed Theory of Change typically includes several key components. The long-term goal represents the ultimate impact or change the organization aims to achieve. Preconditions or intermediate outcomes are the necessary and sufficient conditions that must be in place for the long-term goal to be realized. Interventions or activities refer to the specific actions or strategies the organization will implement to bring about the desired change.

How does organizational change get started?

Let's take a look at some of the usual suspects:

• Technological advancements
• Market forces
• Changes in regulatory or legal requirements
• Economic factors
• Internal pressures, size changes or acquisitions
• External stakeholder expectations

These drivers of change vary in importance depending on the industry, the specific organization and what's happening in the world. Understanding these drivers helps organizations stay on their toes, ready to recognize when a moment for change has arrived.

 

Types of organizational change

some common types of organizational changes:

1. Strategic change

This type of change focuses on the big picture, involving shifts in the organization's overall direction and long-term goals. It happens when the organization adapts its mission, vision, strategy or core processes to respond to external changes or explore new opportunities.

2. Structural change

This involves implementing changes to how the organization is organized (strategy structure systems). It can include things like changing the hierarchy, reporting relationships, departments or how work is divided among teams. The aim is to improve efficiency, communication and coordination within the organization.

3. Cultural change

Cultural change revolves around transforming the values, beliefs, norms and behaviors that shape the company culture. The goal is to create a new culture that aligns with the desired vision, encouraging collaboration, innovation, adaptability or customer focus.

4. Process change

Process change improved the organization's operational processes and workflows. It aims to make things more efficient, reduce costs, eliminate unnecessary steps or enhance quality by adopting new technologies, streamlining procedures or following best practices.

5. Technological change

This type of change introduces or integrates new technologies within the organization. This could mean implementing new software systems, automation, digital tools or advanced machinery (ex: utilizing AI)to boost productivity, drive innovation or support day-to-day operations.

6. Personnel change

Personnel change emphasizes developing and enhancing the skills, knowledge and capabilities of individuals within the organization. It may involve training programs, talent development initiatives, performance management systems or planning for future leaders to foster personal and organizational growth.

7. Incremental change

Incremental change happens gradually over time, short term wins here, short term wins there. This involves small improvements or refinements to existing processes, products or services. The goal is to continuously enhance efficiency, quality or customer satisfaction through ongoing adjustments.

8. Transformational change

Transformational change is a significant and radical shift that fundamentally transforms the organization. These are large scale changes. It often requires a comprehensive and holistic approach to drive substantial organizational development to create a new status quo.

 

Read More

Social Judgement Theory

Social judgment theory (SJT) is a self-persuasion theory proposed by Carolyn Sherif, Muzafer Sherif, and Carl Hovland, as the perception and evaluation of an idea by comparing it with current attitudes.

Social Judgement theory states that you have a statement or message and you accept it or reject it based on your cognitive map, one's own ego-involvement and if it falls within their latitude of acceptance.

 This theory is that when people receive messages (verbal or nonverbal) they immediately judge where the message should be placed on a scale in their mind through comparing the message with currently held views.

Social Judgement theory is a scientific theory.  Social Judgement theory is value-neutral in that the theoretical propositions are objective and not biased.  This theory explains how individuals judge the messages they receive.  It predicts that individuals accept, or reject specific attitudes and messages.

• Epistemologically( the study of the nature, origin, and limits of human knowledge,) are is one universal interpretation (one truth) in that people judge the messages they receive.  

• Ontologically,(the philosophical study of being.)  this theory is deterministic in that an individuals behavior can be predicted.
• Axiologically(the study of the nature, types, and criteria of values and of value judgments especially in ethics.),   Social Judgement theory has relative simplicity in that it is a fairly simple study.  It can be tested and proved false in that an individual can test the theory through reflecting on statements, which evoke various opinions.  

 

Critique:

Social Judgement theory proposes the idea that persuasion is a two-step process. 

1. The first step involves individuals hearing or reading a message and immediately evaluating where the message falls within their own position. 
2. The second step involves individuals adjusting their particular attitude either toward or away from the message they heard.

Ideas and Implications:

Individuals have three zones in which they accept or reject specific messages or attitudes. 

1. The latitude of acceptance zone is where individuals place attitudes they consider acceptable.  
2. The latitude of rejection zone is where individuals place attitudes they consider unacceptable or objectionable.  
3. The latitude of noncommitment is where people place attitudes they find neither acceptable nor rejectable.

Example:

Example of Social Judgement theory:

Read through these statements and recognize the variety of opinions they represent;

1. Student athletes should be given extra time to complete assignments.

2. Student athletes are for the most part lazy when it comes to college work.

3. Student athletes should receive more time to complete assignments because their schedule is more hectic than the average student.

 

Read More

Social Action Theory

 Sociologist Max Weber developed social action theory.

Definition of Social Action Theory

 Social action theory in sociology is a critical theory that holds that society is a construction of the interactions and meanings of its members.  It explains human behaviour at a microscopic, small-scale level through which we can understand societal structures. 

This is because social action theory argues that society is made up of human behaviour and that people create and embed meaning into institutions. On the other hand, structural theories are based on the idea that society is made up of institutions and that these institutions shape and give meaning to human behaviour.

 Social action theory states that people create society, institutions, and structures. People determine society, not the other way around. Society is created 'from the bottom up'.

 Weber attributes this to the fact that norms and values are not fixed but flexible. He argues that individuals give them meaning, and have a much more active influence in shaping society than structuralist theorists assume.

 Weber only considered an action to be 'social' if it took into account the behaviour of other people, because that also contributes to the creation of meaning. 

He also believed that we should practise understanding, i.e., empathy, to understand the meaning behind people's actions. He specified two kinds of understanding

Social Action And Understanding

According to Weber, social action should be the primary focus of sociology. Social action is the term for an action behind which an individual attaches meaning.

Positive aspects of social action theory

• Social action theory acknowledges individual agency and motivations for change and impact on society. It allows for large-scale structural change.
• The theory does not see the individual as a passive entity in a societal structure. Instead, the individual is viewed as an active member and shaper of society.

It can help trace significant structural changes throughout history by considering the meanings behind social actions.

Read More

Braddock’s Derivation of Lasswell’s Model

 Harold Lasswell’s Model (1948)

 Harold Dwight Lasswell (1902–1978) was a leading American political scientist and communications theorist. He was the Chief of the Experimental Division for the Study of War Time Communications at the Library of Congress during the Second World War. He analysed Nazi propaganda films to identify mechanisms of persuasion used to secure the acquiescence and support of the German populace for Hitler. He gave verbal models of communication and politics in the same year when Shannon wrote his paper on mathematical theory. 

His model of communication is in the shape of a question containing many more questions. 

Who says

 What to Whom 

in What Channel 

with What effect? 

This linear model enumerates main variables involved in the process of communication. 

The ‘Who’ refers to the identification of the source and

 ‘What’ refers to the analysis of the content of the message. 

The choice of channel is denoted by the question ‘What channel’ and the characteristics of the audience by the question ‘Whom’. 

The main thing about this model is that it makes the end result of communication as the most important aspect of the whole process, when Lasswell asks ‘What effect?’ 

In a way, this model of communication appears to be influenced to a large extent by the behaviourism which was the newly developing trend in America those days. 

Behaviourism is a school of psychology that supports that behaviours can be influenced by conditioning. Laswell’s model takes the psychological conditioning of individuals and society into account. 

His model of communication can also be described as the psycho-sociological model of communication because it deals with the psychological and sociological aspects of communication. It considers what effects communication has on the recipient(s) of the message, and so it enters the domain of psychology as well as sociology.

 Braddock’s Derivation of Lasswell’s Model In 1958,

 Richard Braddock suggested that Lasswell’s model be expanded to consider two additional elements that Braddock argued that Lasswell’s model ignored ‘for what purpose’ and ‘under what circumstances’. 

Braddock’s model is Models of Communication 

Read More

Theories of Entrepreneurship

Theories of Entrepreneurship

 For scientist theory means relationship between facts. Entrepreneurship has been defined differently by different writers and thinkers. Various authors have developed various theories on entrepreneurship and popularized the concept among the common people. The concept of entrepreneurship is as old as civilization while the theories of entrepreneurship have evolved from over a period of more than two centuries. The theories of entrepreneurship can be explained from economists‟, psychologists‟ and socialists‟ viewpoint, which are developed over a period of time.

 Entrepreneurship has been defined differently by different writers and thinkers. Various authors have developed various theories on entrepreneurship and popularized the concept among the common people. The concept of entrepreneurship is as old as civilization while the theories of entrepreneurship have evolved from over a period of more than two centuries. The theories of entrepreneurship can be explained from economists‟, psychologists‟ and socialists‟ viewpoint, which are developed over a period of time.

 

Historical perspective:

 

In early 17th century, Richard Cantillon, an economist who is originally called as developer of entrepreneurship coined the term „entrepreneur” and in late 17th century, it was defined that entrepreneur bears the risk, supervises and owns the factor of production.

  Later in 1803, Jean Baptiste Say proposed that profits earned by the entrepreneur are different from the profit earned by the capital owner and thus differentiated between both. Later in late 18th century distinction was further made clear between those who supply funds and earn interests and the one who earns from entrepreneurial activities.

 In 1934, Joseph Schumpeter defines entrepreneur as an innovator and later

in 1964, Peter Drucker defined the entrepreneur as the one who maximizes opportunities.

In 20th century, as technology improves and globalization takes place, it‟s further stated that entrepreneur not only has to make profits but also has to tap new markets, develop new products and processes. Thus, entrepreneurship has taken new meanings in this century and a lot more has to be added

https://ebooks.inflibnet.ac.in/mgmtp09/chapter/theories-of-entrepreneurship/

On the basis of that entrepreneurship has been divided into five stages: There are different opinions on the emergence of entrepreneurship which can be classified as follows:

·         Economist‟s view

·         Socialist‟s view

·         Psychologist‟s view 

·         Economist’s view

 Entrepreneurship has been a topic of interest to the economists since 1700 and term entrepreneur has been first coined by Richard Cantillon and was popularized by James Stuart Mill in England.

According to the economists, favourable economic conditions are the main motivators for the entrepreneurship. Entrepreneurs like to work in the situations which are positive for the economic growth.

G.F Papanek and J.R Harris are the firm believer of this theory and strongly consider economic incentives as the main force of entrepreneurial activities. Lack of entrepereneurship can be because of market imperfections and incompetent market conditions.

  Sociologist’s view:

 Social system has direct or indirect effect on the entrepreneurship. The power of customs, culture, values, religion, and rigidity has a significant impact on the entrepreneurs and thus helps in creativity and exposure. Researchers believe that entrepreneurship is most likely to grow under social values and cultural values, role expectations etc are accountable for the growth of entrepreneurship in the country.

The theories of Max Weber, Hoselitz and Cocharan have propounded sociological theories.

According to Max Weber, religious beliefs generate the drive for entrepreneurship by producing specific value orientations and thus chasing opportunities and the accumulation of assets.

According to Cochran, entrepreneurs are the role model of the society and develop the solutions for their problems. Individual‟s performance depends on his attitude towards his occupation and understanding of the occupational requirement of the job.

According to Stokes socio-cultural values guide economic deed. He put forward that personal and social opportunity and the existence of the necessary psychological distributions may be considered as situations for an individual‟s progress in industrial entrepreneurship.

 Hoselitz proposed that culturally marginal groups encourage entrepreneurship and economic development. Such groups, because of their unclear position are noticeably suited to make innovative change and thereby expand authentic innovations.

 c. Psychologist’s view:

 Different psychologists have given different psychological theories; Joseph Schumpeter, McClelland, Hagen and Kunkal are the few names among them.

 According to them, psychological aspects have significant impact on the entrepreneurship development. 

According to Schumpeter, entrepreneurs are motivated by the will to power and will to conquer.

 According to McClelland, high need for achievement is the prime drive for the entrepreneurship. People who have high achievement needs can work better and they give their best to achieve the desired performance. This achievement need can be inculcated through child rearing practices thus helps in achieving excellence. Hagen concludes that withdrawal of the status recognition is the main source of personality formation. People who have lost their status from the previous groups try to attain their status by focusing on entrepreneurship.

 

Theories of Entrepreneurship 

Large number of the theories has been propounded till date. Following are the few theories propounded by the eminent thinkers: 

Innovation Theory by Schumpeter

Theory of High Achievement by McClelland

Leibenstein’s X-Efficiency Theory

Risk bearing theory of Knight

Max Weber’s theory of entrepreneurial growth

Hagen’s theory of entrepreneurship

Thomas Cochran’s Theory of Cultural Values

Theory of Change in Group Level Pattern

Economic theory of Entrepreneurship

Exposure Theory of Entrepreneurship

Political System Theory of Entrepreneurial Growth

 

 Innovation Theory by Schumpeter

 According to him, innovation is the key factor in entrepreneurship in addition to risk and organizing function. He defines, Entrepreneurship as a “creative activity” and this creation may be in the form of-Introduction of new product with which customer is not familiar or

introduction of new quality of the existing product.

·         Use of new method of production which is not yet tested

·         Opening of new market in which particular manufacturer of the country has not yet entered

·         Conquest of new source of supplying raw material

·         New form of organization

According to Schumpeter, Entrepreneurship is innovation and can be in the form of any product, process, method, new market etc. It brings new technological changes into the society. He also differentiated between the innovator and inventor. 

Inventor is the one who invents some new methods, technology, processes etc and

 Innovator is the one who uses these new inventions to offer new products in the market.

 Schumpeter is the first major theorist to place the human at the centre of the process of economic development. He is very clear about the economic function of the entrepreneur.

According to him, entrepreneur is the major mover in economic development with his function, to innovate or bring out new combinations.

To Schumpeter, entrepreneurs are persons who are motivated by a spirit for power; their extraordinary characteristic being an innate capacity to choose correct answers, energy, will and mind to conquer fixed talents of thoughts, and a capacity to withstand social opposition.

The factors that contribute to the development of entrepreneurship would essentially be a suitable environment in grasping the essential facts. It can be noted that this theory‟s main figure, the “innovating entrepreneur” has played an important role in the rise of modern capitalism. The entrepreneur has been the prime mover – for economic development process.

 Criticism:

·         This theory seems to be one sided as it put extreme stress on entrepreneurship only and ignores the other functions of the entrepreneurship.

·         Applicability and success of this theory becomes doubtful in under developed country.

Theory of High Achievement by McClelland

 This theory is regarded as the most important psychological theory. McClelland wanted to find the internal factors that motivate people to take opportunity of the trade.  

According to McClelland, a person attains three types of needs as an outcome of one‟s life knowledge.

Three needs are:

·         Need for Achievement:  A drive to excel, advance and grow.

·         Need for Power: A drive to dominate or influence others and situations.

·         Need for Affiliation:  A drive for friendly and close inter-personal relationships.

According to the McClelland, people who have high need for achievement have tendency to win and excel.  People who have high need for achievement personally take the responsibility of solving problems and will always try to be better than others. He further explained that people with high need of achievement are more likely to succeed as entrepreneur because it is the need for achievement that motivates and promotes entrepreneurship.

The definite characteristics of a high achiever (entrepreneur) can be listed as follows:

(i)                 They lay down moderate realistic and achievable goals for them.

(ii)              They take planned risks.

(iii)            They favor situations wherein they can get individual responsibility for solving problems.

(iv)             They need actual feedback on how well they are doing.

(v)               Their need for achievement live not only for the sake of economic rewards or social recognition rather personal achievement is essentially more satisfying to them.

 Leibenstein’s X-Efficiency Theory

 The thought of x-efficiency was introduced by Harvey Leibenstein in his paper Allocative efficiency v. “x-efficiency” in American Economic Review 1966.  This theory was recently applied to entrepreneurship and otherwise was developed for the firms in determining the degree of inefficiencies. X-Efficiency is the degree of inefficiency in the use of resources within the firm, it measures the extent to which the firm fails to realise its productive potential. When the input is not used efficiently then the difference between the actual output and the maximum attainable output is the X-efficiency. X efficiency occurs if resources are wasted or not used at all.

Therefore, leibenstein identifies two roles for the entrepreneur: gap filler and an input completer. Thus, if not all the inputs will be used there will be market imperfections and entrepreneur has to fill the gaps to correct the market imperfections. The other role is of input completer, to make available the inputs required for the efficient outputs.

Leibenstein X- efficiency Theory

According to him there are two types of entrepreneurships.

(i) Routine entrepreneurship – deals with normal business functions like coordinating the business activities.

(ii) Innovative entrepreneurship – wherein an entrepreneur is innovative in his approach. It includes the activities necessary to create an enterprise where not all the markets are well-established or clearly defined.

 Risk bearing theory of Knight:

 

According to Knight, the most important feature of entrepreneurship is Risk bearing. Some important features of the theory are:

• Risk Creates profit: As entrepreneur bears risk, therefore he earns profit.
• More Risk more Gain: Entrepreneurs face different types of risks according to their ability and interests. This theory states that more the risk more will be the returns.
• Profit as Reward and cost: Profit is the reward of bearing risk. Therefore, it is also called as normal cost of production.
• Entrepreneur’s  income  is  uncertain:  According  to  knight,  uncertainty  is  the  important element of entrepreneurship. There are two types of the risk: insurable and non-insurable. Entrepreneur earns profit because he bears non– insurable risk which is uncertain.

Max Weber’s theory of entrepreneurial growth:

 

Max Weber believes that religion has a large impact on the entrepreneurial development of the country because some religion has basic faith to earn more money whereas some has less. He calls them „spirit of capitalism‟ which can be enhanced in the country if there will be favourable attitude towards capitalism in the country. It is the religious beliefs that develop the sense of capitalism in the individual which generates the feeling of occupational chase and the addition of assets. This theory states that Hinduism, Buddhism and Islam do not encourage entrepreneurship which was criticized by various sociologists. 

Max Weber’s Theory

 

This theory was criticized by many researchers, as it was based on the invalid assumptions like:

(a)  There is a single system of Hindu value.

(b)  The Indian people learn those values and translate them to their every day behaviour, and

(c)  These values remained resistant to and protected against external pressures and change.

The quick growth of entrepreneurship in India since independence shows that Hinduism is not averse to the spirit of capitalism and to adventurous spirit but some researchers has accepted this theory but it was not universally accepted.

 

Hagen’s theory of entrepreneurship

 

Hagen‟s has propounded a theory of withdrawal of status respect. According to him, withdrawal of status respect leads to the entrepreneurship. It occurs when the member in the group perceive that their efforts and purposes in the life are not valued by the other members. He proposed four events which can lead to status withdrawal:

• Displacement of a conventional best group from its earlier status by another conventional supply physical force.
• Defamation of valued symbols through some change in the attitude of the superior group
• Inconsistency of status symbols with a changing‟ distribution of economic power.
• Acceptance of expected status on migration to a new society.

    He further stated that withdrawal of the status respect would give rise to following:

(a) Innovator: An entrepreneur who is innovative and try to attain his objectives set by himself

(b) Retreatist: Entrepreneur who keeps on working in society but remains apathetic to his work or status. 

(c) Ritualist: One who works as per the rules of the society but has no hope in the improvement in his status. 

(d) Reformist: One who is a revolting and tries to carry new ways of working and develops new society.

 

Hagen developed this theory from the case of samurai community of Japan who were deprived of the high status they were enjoying and thus gave rise to many entrepreneurs as they want to gain their lost prestige.

 

Thomas Cochran’s Theory of Cultural Values

 

According to him, entrepreneurs are not super normal powers but are the role models of the society. The   key   magnitude in   this   theory   is   cultural   values,  role   expectations   and   social   sanctions. Entrepreneur’s performance is influenced by the three factors:

• own attitudes towards his occupation,
• the role expectations held by sanctioning groups,
• and the operational requirements of the job.

Society‟s values are the main determinant of the first two factors and the changes over the time in different variables like population; technology etc will impose change in role expectations by generating new operational needs.

 

Theory of Change in Group Level Pattern:

 

This theory of change is propounded by Young. He conducted a Thematic Appreciation Test (TAT) on group of entrepreneurs. This test revealed that entrepreneurs has the ability to define the solution to the problem, awareness of the efforts required, confidence in their own ability and ability to analyse the situation before decision making. Young‟s theory is a theory of change based on society‟s incorporation of reactive subgroups. A group becomes reactive when the following three conditions coincide:

• When the group has better institutional resources than the other groups of the society at the same level
• When the group experiences low status respect.
• When deprived of access to important social networks.

   Economic theory of Entrepreneurship

 

This theory was propounded by Papanek and Harris. According to them if economic incentives are available in the country then there will be entrepreneurship. Economists believe that entrepreneurship and economic growth exists where economic conditions are favourable to the business environment. There are large numbers of economic factors which helps in upgrade or degrade entrepreneurship in a country. Following are the factors:

 

(a)  The availability of bank credit

(b)  High capital formation with a good flow of savings and investments

(c)  Supply for loanable funds with a lower rate of interest.

(d)  Increased demand for consumer goods and services

(e)  Availability of productive resources.

(f)  Efficient economic policies like fiscal and monetary policies

(g)  Communication and transportation facilities

 

It is further strengthened by the fact that Marwaris and Vaishyas are everywhere in the country but only Gujarati Marwaris and Vaishyas leads in businesses because Gujarat has a more favourable economic conditions. Thus, it is concluded that favourable business environment has impact on entrepreneurial growth.

 

Exposure Theory of Entrepreneurship

 

This theory states that exposure to new ideas and opportunities leads to innovation and creativity thus creates a new enterprise. An Individual‟s education, cultural values, motivation, economic factors, need for achievement, religious beliefs and risk bearing capacity helps in exposing him/her towards the new ideas and opportunities and thus leading to innovation and creativity. Innovation is the most important factor entrepreneurship.

 

Political System Theory of Entrepreneurial Growth

 

This theory states that favourable political environment has an impact on the entrepreneurial growth because stable political system creates infrastructure, promotes policies and encourage people towards entrepreneurship. Commitment in the political system creates a favourable business environment and enhances creative and entrepreneurial ability which leads to the entrepreneurial growth in the country.

 

 Summary

 

Many theorists have propounded large number of theories over the period of time but every theorist has a different view which explains the concept of entrepreneurship according to their own perception. This various approaches of entrepreneurship make the concept unclear because different views of economist‟s, socialist‟s and psychologist‟s view. So, there is a need of a summarized and comprehensive theory which covers all the aspects of entrepreneurship.

https://ebooks.inflibnet.ac.in/mgmtp09/chapter/theories-of-entrepreneurship/

 

Read More