Entrepreneurship Development Module-II: Key Factors That Motivate Entrepreneurs

Entrepreneurship Development
Module-II
ACHIEVEMENT & MOTIVATION
GURURAJ PHATAK

Motivation
• What is Motivation?

• Motivation is defined as a
drive that cause a person
to take some goal
oriented action.

• Motivational theories are based on the idea that behavior
is essentially purposeful and directed towards the
attainment of certain goal.
• Thus entrepreneurial motivation is viewed as the
willingness of an entrepreneur to sustain his or her
entrepreneurial behavior.

Entrepreneurial Motivation
David McClelland Theory of Motivation

• Motivation theorists have
pointed out that at least
three general categories of
social motives as important
determinant of human
behavior:
• The need for achievement (n
Ach)
• The need for Power (n Pow)
• The need for affiliation (n
Aff)

The need for achievement
(n Ach)
• Achievement motive -
drive to do well, strive
for excellence and
overcome challenges and
obstacles in the pursuit
of goal.
The need for Power (n
Pow)
• Power motive - drive to
control, influence and to
have impact on others
and change the
situations.
The need for affiliation (n
Aff)
• Affiliation motive - drive
to establish, maintain or
renew affective
relationship with others.

High need for achievement (high n Ach)
• High need for
achievement (high n Ach)
has been identified as the
critical motive that
influence for most of
venture creation and
entrepreneurship.
• Individual with high need
for achievement found in
most good business
founder.
• Need for achievement
also known as urge to
improve.


High need for power (high n Pow)

• Individual with High need
for power (high n Pow)
normally seek position of
leadership.
• They potentially to be
good managers,
executive or supervisors.

High need for affiliation (n Aff)
• High need for affiliation (n Aff) has
mostly been associated with
individual whose desire in life is
to establish, maintain or renew
affective relationship with others.
• They potentially to be good social
workers
• As an entrepreneur the need for
affiliation to certain extent may
contribute to the drive for
maintaining effective business
networking.

Common characteristics associated with
achievement oriented entrepreneurs

Drive to achieve
• Internally driven self starter with strong desire
to:
• To compete with others
• To excel with self imposed standard
• To pursue and attain challenging goal

Calculated risk taking
• High achiever tend to take moderated or
calculated risk
– Examining the situation and determine how
to increase the chance of winning a business
situation
– They make their effort to get the odds in
their favor
– They do not take unnecessary risks


Internal locus of control
• They belief that success or failure is
determined by their own effort.
• They belief in themselves
• They do not belief that success or failure of
their ventures were determined by fate or luck
• This behavior is consistent with self
confidence and desire to take personal
responsibility


Tolerance for failure
• High achievers take failure as a learning experience.
• Do not easily become disappointed, distress or
discouraged by any setback or difficulties faced in
the mist of business competition.
• Many successful entrepreneurs belief that they learn
more from their earlier failure than from their earlier
success.


Seeking Feedback
• They have strong desire to actively seek and
used feed back to know how well they are doing
and how to improve their performance.
• Most successful entrepreneurs are quick
learners

Integrity and reliability
• Integrity and reliability help to build and sustain
trust and confidence
• This helps to endure the relationship between
entrepreneurs, partners, customers, suppliers and
stakeholders.


Competence motivation

Besides the three social motives, a
successful entrepreneur should also have
the competence motivation
• Competence motivation Is a drive to do high
quality work.

Competence motivation
• Competence motivated entrepreneur
– seek mastery in job or tasks that they are
undertaking,
– develop problem solving skill and
– strive to be innovative
• In general they tend to perform good work
because the inner satisfaction they feel and
esteem they gain from others due to their
competence.


PERSONAL ENTREPRENEURIAL
COMPETENCIES (PECs)

The term "ENTREPRENEURIAL
COMPETENCIES" refers to the key
characteristics that should be possessed
by successful entrepreneurs in order to
perform entrepreneurial functions
effectively

Entrepreneurial Competencies
McClelland and McBer (1985)

1. Initiative
The entrepreneur should be able to take actions that go
beyond his job requirements and to act faster. He is always
ahead of others and able to become a leader in the field of
business.

Examples
 Does things before being asked or compelled by the
situation.
 Acts to extend the business into new areas, products or
services

2. Sees and acts on opportunities
An entrepreneur always looks for and takes action on
opportunities.

Examples
 Sees and acts on new business opportunities
 Seizes unusual opportunities to obtain financing,
equipment, land, work space or assistance

3. Persistence
An entrepreneur is able to make repeated efforts or to
take different actions to overcome an obstacle that get
in the way of reaching goals.

Examples
 Takes repeated or different actions to overcome an
obstacle
 Takes action in the face of a significant obstacle


4. Information Seeking
An entrepreneur is able to take action on how to seek
information to help achieve business objectives or clarify
business problems.

Examples
 Does personal research on how to provide a product or service
 Consults experts or experienced persons to get relevant
information
 Seeks information or asks questions to clarify a client's or a
supplier's need
 Personally undertakes market research, analysis or investigation
 Uses contacts or information networks to obtain useful information


5. Concern for High Quality of Work
An entrepreneur acts to do things that meet certain
standards of excellence which gives him greater
satisfaction.

Examples
 States a desire to produce or sell a top or better quality
product or service
 Compares own work or own company's work favorably
to that of others

6. Commitment to Work Contract
An entrepreneur places the highest priority on getting a
job completed.

Examples
 Makes personal sacrifice or expends extraordinary effort
to complete a job
 Accepts full responsibility for problems in completing a
job for customers
 Pitches in with workers or works in their place to get the
job done
 Expresses a concern for satisfying the customer

7. Efficiency Orientation
A successful entrepreneur always finds ways to do things
faster or with fewer resources or at a lower cost.

Examples
 Looks for or finds ways to do things faster or at less cost
 Uses information or business tools to improve efficiency
 Expresses concern about costs vs. benefits of some
improvement, change, or course of action

8. Systematic Planning
An entrepreneur develops and uses logical, step-by-
step plans to reach goals.

Examples
 Plans by breaking a large task down into sub-tasks
 Develops plans that anticipate obstacles
 Evaluate alternatives
 Takes a logical and systematic approach to activities


9. Problem Solving
Successful entrepreneur identifies new and potentially
unique ideas to achieve his goals.

Example
 Switches to an alternative strategy to reach a goal
 Generates new ideas or innovative solutions


10.Self-Confidence
A successful entrepreneur has a strong belief in self
and own abilities.

Examples
 Expresses confidence in own ability to complete a task
or meet a challenge
 Sticks with own judgment in the face of opposition or
early lack of success


11.Assertiveness
An entrepreneur confronts problems and issues with
others directly.

Examples
 Confronts problems with others directly
 Tells others what they have to do
 Reprimands or disciplines those failing to perform as
expected


12.Persuasion
An entrepreneur can successfully persuade or influence
others for mobilizing resources, obtaining inputs, organizing
productions and selling his products or services.
Examples
 Convinces someone to buy a product or service
 Convinces someone to provide financing
 Convinces someone to do something else that he would like
that person to do
 Asserts own competence, reliability, or other personal or
company qualities
 Asserts strong confidence in own company's products or
services


13.Use of Influence Strategies
An entrepreneur is able to make use of influential
people to reach his business goals.

Examples
 Acts to develop business contracts
 Uses influential people as agents to accomplish own
objectives
 Selectively limits the information given to others
 Uses a strategy to influence or persuade others


THE KAKINADA EXPERIMENT
What is this KAKINANDA EXPERIMENT?
This is a Training Programme held on January 1964, Organized by David McClelland
at Kakinada in A.P.
Kakinada is a well-developed district town of a population of around 1 lakh with
High Literacy and modest Industrial Structure.

Objectives of the Experiment:

8.To Instill them the Quality of Imagination.
9.To encourage Introspection(Tending to think a lot about your Status and Feelings etc)
and Convert it in to Personal Motivation and Community Goal

The Process of Training/Experiment:
The Training was Conducted at Small Industries Extension and Training Institute(SIETI)
Hyderabad.

They framed 3 Batches in the composition of 52 Trainees in 1 Batch. These trainees are
belonged to Business and Industrial Community of that Particular Area.

The Achievement Motivation Training (AMT) included in the following basics which were
supposed to be accomplished by the trainees.

9.Goal Setting and Goal Achievement.
10. Emulating the models of achievement by constant watch and alertness.
11.Attainment of Concrete and Frequent feedback.
12.Planning Carefully the realistic goals performance appraisal of their own
13.Converting Ideas in to Opportunities using + ve Self Concept and Controlling day dreaming

Results of Kakinada Experiment

4.The Training Helped those Participants in providing high degree of Motivation and
subsequently the need for achievement.
5.They displayed a more active business behavior and took enough stress to accomplish
the job.
6.This AMT is regarded as necessary tool for breaking the barriers of limited
aspirations among individuals on one hand and inducing them high need for
achievement on the other.
7.The training also acts as boost to the risk taking and decision making behavior of
Potential Entrepreneurs.
8.The N.ACH is also termed as Efficiency Motivation.

Important Questions
PART-A 2 Marks Questions
•What is Entrepreneurial Motivation?
•What is N.ACH?
•What is Entrepreneurial Competency?
•What are the Objectives of Kakinada Experiment?

PART-B 5 Marks Questions
8.Explain the David McClelland Theory of Motivation.
9.Explain The Kakinada Experiment
10.Explain the Characteristics of Successful Entrepreneurs.

PART –C 10 Marks Questions
13.Explain the Concept of Achievement and Motivation with respect to Kakinada Experiment.
14.Explain the Concept of N.ACH with respect to Entrepreneurs by taking relevant examples.

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