BUCU 4108 AND BENT 1207: - ENTREPRENEURSHIP SKILLS
TOPIC 11. ENTREPRENEURIAL MOTIVATION: [INTERNAL AND
EXTERNAL FACTORS].
INTRODUCTION
Motivation is the state that energizes activities and directs or channels behaviour towards a
goal.
Motivation is the process that arouses action, sustains the activity in progress and that regulates
the pattern of activity.
Therefore, entrepreneurial motivation is the process that activates and motivates the
entrepreneur to exert higher level of efforts for the achievement of his/her entrepreneurial goals.
Entrepreneurial motivation refers to the forces or drive within and outside an entrepreneur that
affect the direction, intensity, and persistence of his / her voluntary behaviour as entrepreneur.
1. THEORIES OF MOTIVATION
Importance of motivation to human life and work can be judged by the number of theories
that have been propounded to explain human behaviour. They explain human motivation
through human needs and human nature.
1. Maslow’s Need Hierarchy Theory: Prof A. H. Maslow developed a theoretical framework
for understanding human motivation which has been widely acclaimed. According to him, a
person’s effectiveness is a function of matching his opportunity with the appropriate position of
hierarchy of needs. Process of motivation begins with an assumption that behaviour, at least in
part, is directed towards the satisfaction of needs.
(i) Basic Physiological Needs: The physiological needs relate to the survival and
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maintenance of human life. These needs include such things as food, clothing, air, water
and other necessaries of life which are biological in nature. These needs are primary
needs.
(ii) Safety and Security Needs: After satisfying the ‘physiological needs, people want the
assurance of maintaining a given, economic level. They want job security, personal
bodily
security, security of source of income, provision for old age, insurance - against risks, etc.
(iii) Social Needs: Man is a social being. He is, therefore, interested in conversation,
sociability, exchange of feelings and grievances; companionship, recognition,
belongingness, etc.
(iv) Esteem and Status Needs: These needs embrace such things as self- confidence,
independence, achievement, competence, knowledge and success. These needs boost the
ego of individual. They are also known as egoistic needs. They are concerned with
prestige and status of the individual.
(v) Self-Fulfilment Needs: The final step under the need priority model is the need for
self-fulfilment or the need to fulfil what a person considers to be his mission in life. It
involves
realizing one’s potentialities for continued self-development and for being creative in the
broadest sense of the word. After his other needs are fulfilled, a man has the desire for
personal achievement
Nature of Motivation
The nature of motivation emerging out of above definitions can be expressed as follows:
1. Motivation is internal to man
Motivation cannot be seen because it is internal to man. It is externalized via behaviour.
It activates the man to move toward his / her goal.
2. A Single motive can cause different behaviours
A person with a single desire or motive to earn prestige in the society may move forwards
to join politics, attain additional education and training, join identical groups, and change
his outward appearance.
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3. Different motives may result in single behaviour
It is also possible that the same or single behaviour may be caused by many motives. For
example, if a person buys a car, his behaviour may be caused by different motives such as
to look attractive, be respectable, gain acceptance from similar group of persons,
differentiate the status, and so on.
4. Motives come and go
Like tides, motives can emerge and then disappear. Motives emerged at a point of time
may not remain with the same intensity at other point of time. For instance, an
entrepreneur overly concerned about maximization of profit earning during his initial age
as entrepreneur may turn his concern towards other higher things like contributing
towards philanthropic activities in social health and education once he starts earning
sufficient profits.
5. Motives interact with the environment
The environment in which we live at a point of time may either trigger or suppress our
motives. You probably have experienced environment or situation when the intensity of
your hunger picked up just you smelled the odour of palatable food.
You may desire an excellent performance bagging the first position in your examination
but at the same time may also be quite sensitive to being shunned and disliked by your
class mates if you really perform too well and get too much of praise and appreciation
from your teachers. Thus, what all this indicates is that human behaviour is the result of
several forces differing in both direction and intent.
STEPS OF MOTIVATION PROCESS.
1. Unsatisfied Needs and Motives
The first process of motivation involves unsatisfied needs and motives. Unsatisfied needs
activated by internal stimuli such as hunger and thirst. They can also be activated by
external stimuli such as advertisement and window display.
2. Tension
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Unsatisfied needs to create tension in the individual. Such tension can be physical,
psychological, and sociological. In this situation, people try to develop objects that will
satisfy their needs.
3. Action to satisfy needs and motives
Such tension creates a strong internal stimulus that calls for action. The individual
engages in activities to satisfy needs and motives for tension reduction. For this purpose,
alternatives are searched and choices are made, the action can be hard work for earning
more money.
4. Goal accomplishment
Action to satisfy needs and motives accomplishes goals. It can be achieved through
reward and punishment. When actions are carried out as per the tensions, then people are
rewarded others are punished. Ultimately goals are accomplished.
5. Feedback
Feedback provides information for revision or improvement or modification of needs as
needed. Depending on how well the goal is accomplished their needs and motives are
modified.
Entrepreneurial Motivating Factors
Most of the researchers have classified all the factors motivating entrepreneurs into internal and
external factors as follows:
Internal Motivating factors
1. Need to create employment- Failure to get any form of salaried employment
irrespective of the personal level of education may lead to the creation of an
entrepreneurial venture. One could also be more concerned about creating
employment for self and others who may be dear to them- our current situation
strategy is aimed at self- reliance which is enough motivator for a person to
become entrepreneur.
2. Self-reliance/independence- Entrepreneurs do not like taking orders from others.
Entrepreneurs want to be master of their own actions- they seek great flexibility in
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the utilization of their time free from dependence- they thus seek opportunities
that provide independence where they set challenging goals and make an effort to
achieve them.
3. Competitiveness – Human beings are generally competitive in nature and would
in most cases try to prove that whatever others can do he/she can do better. This
can be in response to the achievement of their peers, friends or family members-
the competitive challenge posed will provide good stimulus and standards by
which you will gauge your performance.
4. Need for recognition- Man normally acts in a manner that will impress others,
especially those people whose opinion about us we hold dear e.g., family, peers
and society- success is a personal business venture is the most effective way of
getting recognition in the society- this may lead you to be pillar of society, a
symbol and a role model, a person whose opinion will be sought and appreciated.
5. Need for security- We all strive to be free from anxiety, anxiety about the future
about our very survival etc. Entrepreneurship does provide an avenue through
which you may achieve a greater measure of such security- you will be control of
your destiny, will have greater certainty in terms of your continued future
earnings etc.
6. Need for adventure- In salaried employment your duties are well specified, your
work may be routine therefore posing no challenges- adventure is a way of taking
risk of challenge without knowing the end results- adventure gives a potential
entrepreneur the opportunity to explore new areas and opportunities thus
enhancing his/her knowledge and innovativeness.
7. Need for self-actualization- Refer to the need for personal identity, the need to
feel that you are unique, that you have been able to accomplish that which you as
a person are capable of achieving, that you have achieved your maximum.
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8. Profit maximization- The motivation of the maximize profit will make potential
entrepreneurs work harder be innovative and even venture into other enterprises.
9. Desire to succeed- Desire to succeed towards one’s welfare to maximize pleasure
and happiness. This gives entrepreneurs appreciation and recognition, especially
if they have accomplished difficult task where others have failed.
10. Survival- to succeed entrepreneurs has to strive to overcome micro and macro
factors such as hyper competition. The spirit of survival sustains them though the
challenging environment to achieve their goals.
11. Power- The desire to feel in a total control in all situations ‘hands on’. Power
brings satisfaction which ultimately becomes the driving force behind the
activities of an entrepreneur- should be power that respects the humanity and the
dignity of others
External Motivating factors
1. Infrastructure- power, water, transport, communication premises. Most
businesses also require services of banks; post offices etc. the provision of these
facilities is the responsibility of established authorities. Basic infrastructure help
in creating place utility i.e. Making it possible for people to venture into business
with the assurance that goods to reach the end users.
2. Finance and Credit facilities- To start and operate a business we usually require
financing from external sources e.g., from government agencies, banks and non-
banks financial institutions, NGOs e.tc. one has to meet the lending institutions
criteria to get the finances where they consider, amount required, period of the
loan, viability of the proposed business co- lateral(security) required, the interest
charged and the repayment terms i.e. (date servicing).
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3. Information support- Especially relating to the market (domestic and foreign),
the nature of competition, financing requirements, documentation requirements,
legal requirements (licensing), and foreign exchange requirements, barriers to
trade the government gathers and provide such information though its embassies
for use by our entrepreneurs- information can also be provided by trade
associations such as Kenya national chamber of commerce and also the NGOs
.
4. Pricing policy- Government pricing policy is an incentive to entrepreneurs who
are motivated to establish enterprises. The pricing policies should not be too
restrictive. However, in the case of certain essential commodities, some elements
of price control are necessary to prevent unscrupulous business person from
exploiting the consumers in their pre-occupation of reaping as much profit as
possible- However, where price control is necessary, they should take into
account all the material facts e.g. the cost of production and the reasonable profit
margin.
5. Tax policy- Tax should not be too exorbitant for this would be counterproductive
in the long run. The tax levied on a commodity can easily be passed on to the
consumers raising the market price and in situations where it cannot, then would
erode the earnings of the entrepreneur.
6. Legal controls- Manifested in the licensing requirements for establishing various
types of businesses. Sometimes the licenses amount to an added tax-burden, they
are too many and at times they are mere duplication.
7. Political climate- Relates to absence of war, fairness in the granting of licenses,
consideration for credit facilities, tax concessions etc. where issues of tribalism,
nepotism, racism and any form of discrimination should be discouraged. Peace
and respect of law and order is necessary in the country.
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8. The government’s export and import incentive schemes to entrepreneurs. Provide
monetary concessions e.g., customs duties, tax deduction and licensing. These are
financial deductions which accrue to entrepreneur who invest in a particular asset for
their business operations e.g., Investment allowances of 85% to entrepreneurs who
had invested outside the cities of Nairobi and Mombasa This is where the government
provides several opportunities to the entrepreneur. The government offers subsidies to
the entrepreneurs through the provision of aids.
9. Availability of raw materials
When there are readily available raw materials which motivates entrepreneurs to
establish enterprises to exploit the readily available raw materials.
10. Availability of affordable labour
This involves readily and affordable labour required to perform specific tasks.
This includes both the skilled and unskilled labour.
11. Encouragement from established businesses
Big and established businesses e.g., Safaricom might decide to help an
entrepreneur who has a profitable business idea in order to motivate him or her
into entrepreneurship.
12. Promising demand for the products/services
An entrepreneur might be motivated to produce a particular product due to its
future promising sales through the current demand hence venturing into the
production of the product.
13. High profit margins
Entrepreneurs are always fascinated with high profit margins because profits are
generally the main aim for them to enter into a business. Hence, high profit
margins motivate entrepreneurs.
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Conclusion
Entrepreneurial motivation factors are both internal and external. These motivation factors entice
and encourages people to venture into entrepreneurship. The internal motivating factors are
inbuilt in the individual while external motivating factors provide a conducive environment for
entrepreneurship to grow and thrive. The combine internal and external motivating factors propel
people to venture in establishing enterprises and therefore, the growth and development of
entrepreneurship.
