This chapter introduces the theory of entrepreneurship and key dimensions of entrepreneurship. It discusses two main approaches to defining entrepreneurship - the functional approach that describes what entrepreneurs do and the indicative approach that describes their characteristics. It also outlines three key individual characteristics of entrepreneurs - the need for achievement, an internal locus of control, and a higher risk-taking propensity. The objectives are to understand entrepreneurship principles and theory and gain a better understanding of entrepreneurial concepts and traits.

1. Part 1 Foundation of Entrepreneursh
Chapter 1:
Theory of entrepreneurship
Objectives: To introduce students
• Theory of entrepreneurship
• Key dimensions of entrepreneurship(need of
achievement, locus of control, risk taking
prosperity, enterpreneurial characteristics and
traits.
Learning outcomes:
• Understand the principles and theory of
entrepreneurships.
• Adapt and adopt entrepreneurial culture in their
life.
• Gain a better understanding of the concept of key

2. List of
topics
Introduction
The
Entrepreneur
Individual
characteristics of
an entrepreneur
Summary
Review
questions

3. 1.1 Introduction
 Casson (2003) argues that this failure is partly due to
the disagreement among scholars on how to
integrate the two main approaches for defining term:
the functional approach and the indicative approach.
 While the functional approach simply describes what
an entrepreneur does, the indicative approach
describes the entrepreneur’s characteristics or
attributes.
 Entrepreneurs can be different persons, wearing
different hats.

4. 1.2 The Entrepreneur
 ‘Entrepreneur’originates from the French word
‘entreprende’ which means ‘to do something’
(Swedberg, 2000) or ‘to undertake the risk of
new ventures (Kuratko & Hodgetts, 2001)
 Adam Smith (1776)
 Joseph Schumpeter, an economists of 1930s
 Frank Knight (1921)
 Israel Kirzner (1973)

5. 1.3 Individual characteristics of
an entrepreneur
Three attributes entrepreneurial behavior
 Need for achievement
◦ Personal attribute associated with the expectation of doing
something better over others and/or the individuals’ earlier
accomplishment (Hansemark, 2003)
 Locus Control
◦ Belief or disbelief that one can control or influence the
environment in which one is found.
 Risk-taking propensity
◦ Higher propensities for risk-taking are believed to be more
likely to be involved in entrepreneurial activities.

6. ~end of chapter 1~