Entrepreneurial behaviour is influenced by many psycho-
concepts such as perception, motivation, optimism,
conditioning, cognition, self actualization or other psychological thoughts, These psychological processes influence the thinking and behaviour of entrepreneur. Main psycho-theories of entrepreneurial behaviour may be discussed as follows : 1. Need for achievement (n-ach) and power by McClelland 2. Risk-Propensity Theory 3. Motivation Theory 4. Rotter’s locus of control theory He states that people who pursued entrepreneur like careers were high in need achievement. The n-achievement is called a desire to do well, not so much for the sake of social recognition or prestige but for the sake of an inner feeling of personal accomplishment. This theory has been criticized due to the following; The theory is contradictory and it has a limited evidence It holds true to some cases while to other cases it is not It is limited only to business people while other people also show that behavior This theory focuses on “stable” characteristics of entrepreneurs, whereas since the market conditions are dynamic, the entrepreneurial behaviour also keeps changing. Risk-propensity is the to which an individual is willing to take chances and make risky decisions. An entrepreneur with a high risk propensity might be willing to experiment with new ideas and gamble on new products He might also lead the venture in new and different directions. Thus, risk taking-whether financial, social or psychological is an important part of the entrepreneurial behaviour. People differ not only in their ability to do, but also in their will to do or motivation. Motives are the mainsprings of action. Entrepreneurial motivation may be defined as a set of motives, needs, urges or desires such as need for power, to earn money or to be one’s own boss, to dominate and influence others by earning industrial power etc. These behavioral dimensions motivate the people to start a new venture. Various motivational theories are: Maslow theory, ERG theory etc. This theory contends/states that there is a degree to which one believes that he/she is in control of one’s destiny. This can either be internal or external. Internals: The internals believe that what happens to them is a result of their internal efforts whether it is good or bad. In this case, people believe that they are in charge of their actions and fortune. Events would be determined on the basis of their qualities and conduct. Externals: These believe that whatever happens to them is a result of external factors whether good or bad. In this scenario, individuals believe that outcomes are out of their control and it completely depends on external factors such as fate, change etc.