Sociological Theories Of Entrepreneurship

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This chapter aims at reviewing theories relating to entrepreneurship i.e. Psychological Entrepreneurship Theories and Sociological theories, Schumpeter’s Innovation Theory, Entrepreneurial Orientation Theory at Individual Level and Entrepreneurial Orientation theory at Firm Level.This review will aid in the understanding of the concept of entrepreneurship, social entrepreneurship and entrepreneurial orientation. This chapter will also show the conceptual framework which will be derived from the theoretical review. Finally, this chapter will cover various empirical studies done by other scholars based on which the operational framework will be formed. 2.2 Conceptual Review 2.2.1 Savings and Credit Co-operative Savings and Credit Co-operative…show more content…
Schumpeter (1942) describes a process of “creative destruction” where wealth creation occurs through disruption of existing market structures due to introduction of new goods and/or services that cause resources to move away from existing firms to new ones thus allowing the growth of the new firms. Accordingly, Schumpeter calls innovation the specific tool of entrepreneurs, the means by which entrepreneurs exploit change as an opportunity for a different business or a different service. Schumpeter (1942) stressed the role of entrepreneurs as primary agents effecting creative destruction, and emphasized to the entrepreneurs the need to search purposefully for the sources of innovation, the changes and their symptoms that indicate opportunities for successful innovation; as well as their need to know and to apply the principles of successful innovation. This Schumpeterian vein of thinking has been carried forward by successive scholars and researchers (Drucker, 1985; Lumpkin and Dess, 1996; Shane, Covered and Westhead, 1991). On his part, Drucker (1985) held out the entrepreneur always searching for change, responding to it, and exploiting it as an opportunity, and engaging by this means in purposeful innovation. Lumpkin and Dess (1996) saw the process of creative destruction as initiated by an entrepreneur, which makes innovation an important success factor within…show more content…
Bruce and Max (2005) did a study on the impact of the Entrepreneurial orientation on performance in Australian Franchise firms. Their key variables were Autonomy, innovation, risk-taking, proactiveness and competitive aggressiveness and the dependent variable performance. They found that in the franchise industry, innovation was not the most important dimension of EO. Proactiveness diminished over time as no group within the firms indentified significant importance in proactiveness as most of the firms were working within their proven and tried environment. Risk propensity although identified was not an apparent concern in the surveyed firms. Risk is observed as the second most observable dimension. Risk taking will be present, but the entrepreneur will not identify with risk-taking. They will identify with calculated risk and leveraging and identify that risk taking post of the environment. According to Bruce and Max (2005) they found that competitive aggression was more important to the establishment and initial survival to the organization than current direction. Autonomy is seen as the lifeblood of the entrepreneur without it the entrepreneur cannot function. Autonomy interacts strongly with the other dimensions and drives the dimensions of EO. In terms of performance there is sales volume which represents an overall increase in performance. The results proved that all EO dimensions are present in the franchise industry and with these dimensions present all companies
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