20 Psychological Factors Affecting Entrepreneurship

Physiological factors in entrepreneurship mean feelings, inspirations, tendencies, self-thinking, and physical, economic and social atmosphere of the behavior of entrepreneurs occupied in industrial activities, which cause changes and revisions in the behavior of the employees.

Psychological Factors Affecting Entrepreneurship
Psychological Factors Affecting Entrepreneurship

Entrepreneurship is a physiological activity.

Hence, behaviors of entrepreneurs are guided by physiological tendencies, past trends and mental inclination.

The personality of the entrepreneurs are attracted to his activities, and plans and decisions.

Psychological Factors Affecting Entrepreneurship

The Psychological factors affecting entrepreneurship or his personality are as follows:

1. Competition and Collaboration

This is the main physiological feature of entrepreneurship.

The approach of the entrepreneur is that of Competition and regular Collaboration to Others.

He makes difference between business and relations. Hence, his working style depends upon victory.

He always believes in victory and not in defeat.

Related: 18 Major Factors Affecting Capital Structure (Complete List).

Besides, the competition of entrepreneurs is not against the targets determined by others, but against the targets determined by himself.

2. Entrepreneur Challenges

Following are the characteristics of the entrepreneur’s challenges:

  1. He likes entrepreneurs challenges, but not taking excessive risks beyond his limits.
  2. He does not like very easy assignments, because these have no challenges.
  3. He feels challenges in such activities and decisions, in which the probability of success is quite low.
  4. The entrepreneur pays special attention to planning.
  5. He also gives special attention to assessing the probability of profitability in the markets and their comparison.

3. Expectations from Employees

A significant feature of physiological characteristics of the entrepreneurs is that they determine High targets for themselves and for employees and also motivate them for the achievement of the targets.

They expect hard labour and high achievement from their employees.

Besides, they also provide leadership and supervision to the Employees.

Bonus: Top 12 Factors Affecting Business Finance (Complete List).

4. Social Consciousness

An entrepreneur is also a social being and hence his social consciousness is quite intense. So, he 

  • Formula series of new plans for economic and social development.
  • Creates new ways and sources for development in society.
  • Promotes employment and industrialization, so that economic backwardness may be removed.
  • Makes full utilization of social resources.
  • Strengthens the process of economic and social development, by the capital formation in the country.

5. Dignity Towards Labour

Socially inspired entrepreneurs have high feelings of Glory towards labour and they are always ready for using their energy for manual labour also.

Related: 16 Factors Affecting Economic Environment (With Examples).

6. High Achievement Motive

An entrepreneur believes in high achievements. So, his behavior is characterized by the following aspects:

  1. He believes in attending high achievements and excellence.
  2. He always works for high targets, outstanding standards, and challenging assignments, to fulfill his desire for high achievements and excellence.
  3. His foremost desire is to be ahead of all.
  4. He is laborious, dynamic and high ambitions in life.
  5. He feels pleasure in complicated and challenging jobs.
  6. Target achievement is the main inspiration for him.
  7. He also believes that one should make a struggle in life to appear different from others.

7. Sense Of Effectivity

The central point of all activities of the entrepreneur is the achievement of the goals and objectives.

He is confident about his ability and resources.

So, he believes in solving the problems, rather than avoiding them.

That way, the realization of efficacy keeps the entrepreneur, activity oriented and physiologically motivates him for initiatives, Creativity, self-confidence and solving the problems.

Bonus: 12 Factors Affecting Entrepreneurship Development.

8. Expansion Motivation

An entrepreneur posses the motivation for sharing his experience and helping each other.

Although the level of such type of inspiration among the entrepreneurs is low, to bring such inspiration At The high-level, they may be provided appropriate training and orientation.

9. Efforts for Continuous Innovation

The important physiological feature of the entrepreneurship is that the entrepreneur continuously makes efforts for continuous innovations. Hence:

  1. He always thinks to do something new in his business, whether arrangements for techniques, instruments, and management are available or not.
  2. He develops and adopts innovations for improving his position in competitions and for providing maximum satisfaction and services to society.
  3. He always thinks of doing something by a different method, due to his perceptions and feelings of the heart.
  4. He does not undertake activities performed by common man.
  5. He causes new changes by giving new form to the old thoughts in society.
  6. He also carries out improvements in production techniques, through research, studies and creative thinkings.
  7. The entrepreneur carries out product diversification by developing various new products. It results in the expansion of the Enterprises and availability of new commodities to the society, for consumption.
  8. 19 Factors Influencing Entrepreneurship Development.

10. Builder of New Organisations

An entrepreneur promotes and innovates the new enterprise or to establish an undertaking with his mental tendencies and imaginations.

Besides, he builds the organizations, Arranges infrastructure facilities, organizes the resources and also coordinates them.

The entrepreneur is that economic factor who organizes and coordinates various resources of production.

11. More Practical

The entrepreneurs think over future imagination for future and circumstances prevailing in public life.

psychological and social factor of entrepreneurship
Psychological and social factor of entrepreneurship

Entrepreneurs are more practical. They feel proud of their past achievement and on another side, they regularly assess the future also.

Related: 20 Types of Entrepreneurs (Informative Explained).

12. Select Calculated Risk and Risk Taking

A physiological feature of the entrepreneur is that he selects the calculated risk to bear it.

But, while doing so, he fully utilizes his foresightedness, imagination, alertness, dynamic approach, courage, capability, self-confidence and leadership qualities.

This feature of the entrepreneur may be explained also as follows:

  1. The entrepreneur has the ability and desire to take risks in the enterprise and also the capability of providing a guarantee against uncertainties.
  2. The entrepreneur likes circumstances fully depending on chance.
  3. The entrepreneur has the risk-bearing capacity, organizational ability and desire for product diversification and attempting innovations.

13. Internal Centre of Control

The entrepreneurs consider their achievement as the outcome of their efforts strongly, and not of any chance or anybody is the blessing.

In physiological terms, such persons are known as persons with internal centres of control.

Related: 12 Theories of Entrepreneurship (Explained with Examples).

14. Desire to Influence Other Persons

An entrepreneur has the desire to influence others by his work, ability, skill and leadership knowledge.

So, physiologically, he is good in his behavior and he also leads managers and other persons.

15. Selection of Independent Life Career

The entrepreneur has the desire to select an independent life career. As a result:

  • They get motivation for doing independent business, rather than service for another.
  • They do not like to work as subordinates of any other person.
  • Realization of independence and privacy inspire him to be always distinct.
  • He always feels inspired for maintaining his distinction and entity.

Bonus: 15 Importance of Social Responsibilities of Entrepreneurs.

16. Group Level Activities

The entrepreneur believes in group level activities or in taking all together, the reason being that he has many qualities, like Managerial skill, maturity, social aptitude, honesty, cordial nature, politeness and sense of respect for others, etc.

Besides, the entrepreneur also encourages others to materialized his views and perceptions, by his effective and efficient behavior and cooperative attitude.

17. Concern with Society

The entrepreneur always remains fully conscious of his activities and social impacts.

This is not an individual activity and rather takes the form of a meaningful social enterprise.

As a result, in present conditions, only those entrepreneurs are liked who are concerned with the society and do not feel jealous towards the progress of others.

Related: 15 Major Role of Entrepreneur in Economic Development.

18. Hope of Success

The self-confidence of the entrepreneur is the base of his success.

By self-confidence, difficult tasks also become easy and he is able to overcome the difficult situations.

Hence, confidence for gaining success makes him not only dynamic and energetic but also develops positive thinking in him. What is social entrepreneurship?

19. Follow up Flexibility

An entrepreneur physiologically follows flexibility, because:

  1. He takes various decisions, according to the circumstances and time.
  2. He has the capacity to understand other persons by seeing them and molding himself according to them, and also the ability to understand the changed market conditions and techniques to carry out the changes, accordingly.
  3. He poses managerial ability, skills, and leadership qualities, and hence he follows the following styles of leadership, according to the circumstances, time and atmosphere:

Dictator Style

To provide security to the interests of the enterprise and the associated persons.

Democratic Style

To take full advantage of the perceptions, creativity, and initiatives of the employees.

Independent Power Style

For self-determination of targets by the associated persons or employees and their fulfillment.

Supervisory Power Style

To supervise the performance of various factors of production.

20. Immediate Feedback

The important characteristics of the entrepreneurs are also that they make regular improvements in their performance.

They learn from past experience and regularly evaluates past performance.

The entrepreneurs Aspire for direct and sure progress towards achieving the determined targets.

Not only that, but they also like the concurrent and reliable evaluation of their performance.

Thus, now you all know the psychological factors affecting entrepreneurship.

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