An entrepreneur is a person who comes up with a business idea bearing in mind the amount of risks involved in the carrying out that business. In other words, an entrepreneur is any person who is in possession of any new business enterprise, idea or a venture. The entrepreneur is accountable for the inherent risk involved and the general outcome of undertaking the venture. From the above definitions of an entrepreneur, it is critical that one bears in mind that there are key issues with regards to these definitions.
Firstly, there is coming up with a business idea. A business is identified by entrepreneur through ways such as observations and carrying out research. The second crucial thing in the definition is setting up a new business venture. For one to be regarded as an entrepreneur, the individual must come up with a new business venture. This is so because entrepreneurs are famous for setting up new business ventures. Finally, the other key issue that needs noting in the two definitions is that, there are certain risks involved in setting up a new business venture. Every new venture undertaken by any entrepreneur has its risks involved. A risk is the potential that a chosen action or activity will either lead to an undesirable outcome or a loss. All business undertakings have the possibility that their undertakings bound to fail or succeed.
They are key elements in this topic. This is because they assist an individual to determine whether their business venture based on the entrepreneurial conditions or not. Entrepreneurial behavior is the common reaction of any given entrepreneur. This is so with regards to the current outcome of undertaking any business venture amidst all the risks involved in getting involved in the business. With regards to entrepreneurship, there are some experiences which greatly affect how an entrepreneur may behave. These experiences greatly determine how an entrepreneur will behave or how the entrepreneur will react to changes in these experiences. Some of these experiences are what determines which corrective or sustainable measure an entrepreneur bound to take to achieve the given or the stated objectives.
Firstly, there is the cultural experience. Culture is an ambiguous term that has many definitions. The first definition of these terms is the set of shared attitudes, goals, values, or practices that characterize a group, an institution or an individual. On the other hand, culture is , an integrated pattern of human practices, belief, knowledge or behavior that greatly depends upon the capacity for thought and simple learning. The influence of culture on entrepreneurial behavior is drawing a lot of interests from scholars in both the current and the future years.
There is an exploration by researchers on the effect of national, organizational and regional effect on the entrepreneurial behavior. Researchers have explored the relationship between culture and the entrepreneurial behavior and its outcomes. The most special issues focus on the relationship between culture and entrepreneurship. People's beliefs and practices greatly influence how the entrepreneur will react. Several scholars have carried out various researches to come up with suggestions as to how culture and entrepreneurial behavior related. These scholars have come up with theories that try to explain the relationship between entrepreneurship and people's culture. These scholars came up with three theories to come up with their explanations.
The first approach is the aggregate psychological approach. There is extensive research carried out. They have proven that there is a very close link between people's values and believes on one hand and, the behaviors of individuals. This is greatly influenced by factors such as the geographical location of different people. People living in different countries or regions have different beliefs and practices. For example, there can be a culture where individuals present mainly adopt the culture of either employment or self employed. For a culture that greatly appreciates employment, entrepreneurs forced to come up with a business idea in such a way that it will accommodate the environmental needs. In this case, the entrepreneur forced to try and create as many job opportunities as possible in order to meet the needs of the environment in which he resides.
In addition, people believe greatly affect entrepreneurial behaviors. In some cultures, people believe that dealing in some products is unacceptable and morally wrong. For example, there are some businesses that an entrepreneur cannot deal in. For example, in a culture where Islam is highly practiced, it would be wrong for an entrepreneur to come up with a business that deals with pork. This is because Islam is against the consumption of pork among its faithful. The entrepreneur will come up with an idea that is greatly accepted in that environment and culture.
The second theory and approach is the moral approval and the social legitimating approach. The social legitimating approach mainly focuses on the social norms on the conducts of the society at large. According to this view, a higher entrepreneurial activity witnessed in a society that an entrepreneur considered having a high social status. This is present in a society where education is highly appreciated and, entrepreneurs seen as people with a high level of education. The higher level of education an entrepreneur gets, the higher the acceptance the entrepreneur has in the given society.
Therefore, the society that has a high entrepreneurial activity will gain much acceptance in a society that greatly embraces entrepreneurship. This will force entrepreneurs to embrace greater educational experiences in order that they excel in the society.
Finally, there is the dissatisfaction theory. This theory is very different compared to the two theories above. As the word suggests, there may occur a need satisfy the needs of the environment. A culture that mainly believes in getting the best out of the environment will trigger entrepreneurs to get involved with a view that they meet the required targets. An entrepreneur will seize that opportunity and try and come up with brilliant ways of meeting the needs of consumers in the best way possible.
Social factors are the factors which determine certain aspects of people's lives. They relate to matters such as health distribution, population growth rate, age distribution, career attitudes, also the emphasis on people's safety. These are all the provisions that are to be discussed. When looking at social factors, it is vital that we consider how human beings relate to each other in both in their living conditions and their working conditions. How they relate greatly matters if the business is to succeed or not. Understanding people's way of living determines how one will relate to the environment. It is therefore, important to discuss ways in which the social environment of people will determine how entrepreneurs make their decisions.
Before discussing how social factors affect the way an entrepreneur makes the decisions, it is critical that we understand the environment as a whole. The way the entrepreneur interacts with the environment will influence whether the business activity which the entrepreneur, is undertaking will succeed or fail.
The first key issue to put into consideration is the population growth rate in an economy. The number of people in any given region or economy greatly influences how an entrepreneur will behave. For example, in a highly populated region, there will be pressure to come up with business ventures that will satisfy the needs of that given population and at the same time act as a means for creating employment to the residents. The main reason why people involve themselves in business activities is to earn a profit. Therefore, population growth will greatly influence people to come up with business ventures bearing in mind that people will be available to ensure that the business is successful.
In addition, the other factor which determines, the action of an entrepreneur is the age distribution in a given economy. The way a population composed will also act as a driving factor to an entrepreneur as to which business an entrepreneur start. For instance, a population where majority are old people will influence an entrepreneur in a different way as compared to a population where majority are young and energetic people. A population mainly containing the majority of its population being young people, will greatly influence an entrepreneur to come up with a business venture which requires a lot of physical energy bearing in mind that it is highly available.
If an entrepreneur decides to get involved in the given business where majority of the people are young, the entrepreneur may decide to deal in products that are greatly appreciated by the young people. For example if the entrepreneur decides to deal in a clothing business in such an economy, the entrepreneur may be forced to buy clothes that are the young people deem fashionable and acceptable to them. When dealing with an aging population, an entrepreneur may be forced to deal in products or commodities that the old people deem acceptable to them in all aspects of their lives.
Another crucial issue to look at in the social aspect of the entrepreneur's behavioral activities is the population growth rate. Population is the key issue in the success of any given business. In a population which has a high-growth rate, the entrepreneur may come up with suggestions to meet the needs of a growing population. For example, an entrepreneur may establish an institution which mainly educates the young people in the society. For instance, an entrepreneur may establish a school which will provide educational facilities to the residents. This will ensure that people in the given population will not travel through greater distances to look for a place where they can take their children. They will take them to the nearest educational facility available. This will act as a new solution benefitting both the entrepreneur and people in the region.
Besides rising population, another crucial social factor that determines the behavior of an entrepreneur is the social acceptance or discrimination of a group or a country. There are social and cultural factors that hold down and prevent entrepreneurs from dealing in such countries or regions. Discrimination is one of those factors. If a country or a region discriminated against, entrepreneurs are least likely to venture in those regions. This is because many people may have developed a certain negative attitude towards the region making any business located in that region to fail. Discrimination may come in various ways. For example, people may be discriminated against with regards to tribe, race or social status. Racial and tribal discrimination are the major issues in this factor. For example, an entrepreneur may be discouraged from getting involved in a certain region since he is of another tribe. A country or a region that practices tribalism is likely to lose the services of the other tribe which they may consider inferior. This will likely strike fear in the minds of the other potential entrepreneurs and, act as a discouragement for any entrepreneur planning to get involved in the given region.
In addition, there may be another division of discrimination. For example, there are some cultures that do not believe in women as either entrepreneurs or important in society. This is socially wrong. In this kind of environment, there may exist a business idea in the mind of a female entrepreneur. Since this culture does not accept women involvement in business in the region, the female entrepreneur may be discouraged from participating in the business.
This social factor mainly depends on the people's culture and their moral upbringing. Such a culture may create some limitations in terms of resources and services such as the educational facilities and opportunities. Women in such a society given little or no importance and their roles limited to taking care of children and feeding them. A keen look at this social environment may bring up certain negative effects from this. For example, if the women are restricted to homes, taking care of their children, more children bound to be born. This may as a lead to increase the population of the children forcing them to be more than the working population. Therefore, if more children born and the population of those working remains constant, there will be pressure on the working population to feed the young population. If there come a situation where the working population is not able to feed the growing population, the result will be a strain on the available resources. This will finally lead to poverty among the people in the given population.
In the above results, it is important to understand that both social and cultural factors determine the behaviors of entrepreneurs besides other factors. Some of the other factors include the technological factors and the political factors. All these factors play a fundamental role in determining the success or actions that an entrepreneur may take for the success of his venture. When all these factors held constant, entrepreneurship bound to succeed.