ENTREPRENEURIAL BEHAVIOUR

INTRODUCTION:

Human behaviour in an enterprise is generally

concerned with the thoughts, feelings, emotions and
actions of the people working in it. It is rightly said
that the success of any enterprise primarily depends
upon the efficiency and the effectiveness of the
entrepreneur and the effectiveness of entrepreneurs
depends primarily upon its human skills and how
well he understands the needs and desires of the
people working in the enterprise.
Meaning of entrepreneurial
behaviour

Entrepreneurial behaviour is directly concerned with

the understanding, prediction and control of
human behaviour in enterprises.
Definition

“Entrepreneurial behaviour is a subset of

entrepreneurial activities concerned with
understanding, predicting and influencing
individual behaviour in entrepreneurial
settings.” -Callahan
Characteristics of Entrepreneurial behaviour:

Behavioural approach to management

Cause and effect relationship

A branch of social sciences

Three level of analysis

A science as well as an art

A body of theory, Research
&Application
Rational thinking
Human part of enterprise
Change oriented
1. Behavioural approach to management : Entrepreneurial
behaviour represents the behavioural approach of
management. It emerged as a distinct field of study because of
the importance of human behaviour in enterprise.

2. Cause and effect relationship: Human behaviour is generally

taken in terms of cause and effect relationship. It provides
generalisation that entrepreneurs can use to anticipate the
effect of certain activities on human behaviour.

3. A branch of social sciences: Entrepreneurial behaviour is greatly

influenced by other social sciences viz., psychology, sociology
and anthropology.

4. Three levels of analysis: Entrepreneurial behaviour is the study

of three levels of analysis i.e. individual behaviour, inter-
individual behaviour and the behaviour of organisations.
6. A body of theory, research and application: Entrepreneurial
behaviour consists of a body of theory, research and application
which helps in understanding the human behaviour in
organisation.

7. Beneficial to both enterprise and individuals: A reasonable

climate is created so that employees may get much needed
satisfaction and the entrepreneur may attain its objectives.

8. Rational thinking: Entrepreneurial behaviour provides a rational

thinking about people and their behaviour. The major aim of
entrepreneurial behaviour is to explain and predict human
behaviour in enterprise.

9. Human part of enterprise: It focuses on people, their desires and

needs. It is the systematic study of the action of the action and
attitudes of people working in enterprise.
Approaches to the study of entrepreneurial bhaviour:

Human resources
approach

Contingency approach

Productivity approach

System approach
1) Human resources approach: Entrepreneurs should provide
active support to workers by threating them part and parcel
of the unit. Entrepreneurs should provide opportunities and
encouragement to workers to work under loose supervision

2) Contingency approach: According to this approach, there is

no single way to handle the human resources under all
conditions. The behaviours or methods successful in one
situation may fail in other situation.

3) Productivity approach: Productivity means the numerical

value of the ratio of output to input. Higher the value of
this ratio, greater is the efficiency and effectiveness of the
entrepreneur.

4) System approach: According to system approach, an

enterprise is a powerful system with several subsystems
which are highly and closely interconnected. Any action
Model of Entrepreneurial behaviour:
1) Autocratic model: The basis of this model is the power of the boss.
Maxweber defined power as,
“the probability that one actor, within
a social relationship, will be in a position
to carry out his own will despite
resistance.”

The essential feature of this model

are as follows:

 Enterprise with an autocratic environment is authority oriented.

 Under autocratic model, the employee’s orientation is obedience to the
boss, they need not be respectful to him.
 The autocratic model has been successful in some situations where the
workers are actually lazy and have a tendency to shirk work.
 The leadership in an autocratic model is negative
2) The custodial model: This model overcomes
the shortcomings of the Autocratic model.
The insecurity and frustration felt by the
workers under the autocratic model sometimes
led to aggression frustration. There was a
need to develop a model which will improve
the employer-employee relations
Some of this important features of this model are as explained below:

 The success of the custodial model depends upon the economic

resources because this model emphasis the economic reward &
benefits.
 The employees depends upon unit rather than their boss.
 Under this model, the employees are satisfied & happy and they are
not strongly motivated.
 The main benefit of this model is to bring security & satisfaction to the
employees.

3) The supportive model: The supportive model has originated from the
‘Principals of supportive relationships’.

The main features of this model are as

follows:
 The supportive model depends on
leadership instead of power or money.
 The leader assumes that the workers
will take responsibility, make their
contribution and improve themselves,
if given a chance.
 It should be the duty of the entrepreneur to support the employees’
4)The collegial model: The dictionary meaning of collegial is a body of
persons having a common purpose.

The main features of this model are

as follows:
 This model creates a favourable
climate in the unit as the workers
feel that they are the partner in
the enterprise.
 This model inculcates the team
spirit in an unit.
 In this model, the workers have job satisfaction, job involvement, job
commitment.

5)Other model:
1. Normative models: The normative models seek to find out that what
should be done to produce optimum result.
3. Ecological models: Models which deal with the changes
which take place in the environment & which understand
the complexities of environment are ecological models.

4. Non- Ecological models: Non- ecological models assume

stability in the environment & that everything will remain
the same.

5.Ideographic models: The models that are developed to deal

with specific cases or unique situations are called
ideographic models.

6. Nomothetic models: These models deal with general

situations. These are concerned with theory building on
the macro level basis.
Understanding human
behaviour
Predicting human
behaviour
Control and direct
behaviour
Entrepreneurial
effectiveness
Motivation

Better human relations

 Role and importance of Entrepreneurial behaviour

1. Understanding human behaviour: Entrepreneurial

behaviour plays an important role to develop full
knowledge about the behaviour of employees.

2. Predicting human behaviour: Entrepreneurial behaviour

also help in predicting the future employee behaviour. This
would allow them to take preventive actions.

3. Control and direct behaviour: Entrepreneurial behaviour

assists entrepreneur to direct and control the human
behaviour to build successful enterprise.
4. Entrepreneurial effectiveness: It helps in better use of raw
material and other resources to improve the quality of
work in the enterprises.
5. Motivation: Entrepreneurial behaviour helps the
entrepreneurs to identify the needs and requirement of the
employees.

6. Better human relations: Entrepreneurial behaviour also help

in maintaining cordial human relations in the enterprise. It
assists in find out causes of industrial conflicts.