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Entrepreneur & Environment- Relation, Need, Importance, Growth impeding Factors

Entrepreneur & Environment- Relation, Need, Importance

Relationship between Entrepreneurship and Environment

Some important faces of relationship between entrepreneurship and environment described below:

  1. Uncertain and Dynamic:

    The entrepreneur has to work in dynamic and uncertain environment. Environment includes those pressures and controls which are usually out of control of an entrepreneurial firm. The factors of the environment may change from time to time in accordance with changing conditions in a country. The entrepreneur has to face the uncontrollable external factors.

  2. Creates Opportunities and Threats:

    The environment contains external factors which create challenge., pressures, risks, opportunities, gains and threats for the entrepreneur. This needs a rational vision on his part to take advantages of these changing conditions.

  3. Limits to Planning:

    Throughout the history of entrepreneurial activities environments have been volatile and generally unpredictable. This means that there are limits to planning. This stimulates entrepreneurs to play a leading role in the growth process.

  4. Born of Environment:

    Entrepreneur is a product of environment, His qualities are not innate attributes which blossom naturally against all odds. Entrepreneurial traits are born of an environment through individuals’ creative response to potential opportunities.

  5. Symbiotic Nature:

    Entrepreneurship is practiced in society with various groups of people. It is cooperative and reciprocal activity. Hence, entrepreneurs can not get success unless we realize the basic symbiotic nature of entrepreneurship which is so inextricably integrated with their total life-situations and environment.

Need and Importance of Entrepreneurial Environment

There are many reasons to study the entrepreneurial environment. Some of them are noted below:

  1. Knowledge about Problems and Complexities:

    Business has any problems and complexities. These can have harmful effects on the success of an enterprise. Hence, an entrepreneur needs a clear perception of problems and opportunities to remove crisis and to gain advantages.

  2. Essential of Growth:

    It is the external dynamic environment which regulates entrepreneurial activities. It has a positive relationship with the development of entrepreneurship. Modern business is created as an open system which is affected by the political, social and economic forces. Hence the study 01 environment is essential for the growth of entrepreneurship.

  3. Determines the Entrepreneurial Spirit:

    A number of environmental factors determine the entrepreneurial spirit among people. The factors create the creative clan’ of industrial development. These generate urge, risk-bearing capacity and productive atmosphere. Thee factors help nature creativity.

  4. Affects Performance:

    The environment is dynamic and keeps on changing. It affects different enterprises in different ways. Environment provides data and information. It makes aware of the future problems. It creates right vision. It inspires confidence. It encourage free airing and resolution of conflict. It develops a sense of mission which improves performance.

  5. Positive and Negative Influences:

    Every entrepreneur is intimately associated with the environment surrounding him. The environment factors may have both positive and negative influences on the development of entrepreneurship. Positive factors refer to conductive condition for the emergence of entrepreneurs while negative factors are inimical. They restrict the growth of entrepreneurship.

Factors Impeding the Growth of Entrepreneurship

  1. Traditional Ideology:

    The belief and thought processes influence the way of working of people. Conventional thinking retards the people to bear the risks of new things, to open new fields, to enter into enterprising business or to start any risky but profitable venture.

  2. Social System:

    Entrepreneurial tendencies are not developed due traditional set-up of society. This includes the factors like narrow thinking castism and religion conservative special traditions, family ties, fatism, hereditary jobs, ‘fore-fathers’ occupation, blind faith in family conventions etc. which retard people to choose any new entrepreneurial job according to their tastes and ability.

  3. Uneconomic Culture:

    The people of non-materialistic thinking and of non-productive culture have no aptitude to create wealth, to collect money, to form capital or to invest in productive activities. Religious culture makes peoples sample having limited needs and possessions. This type of culture restricts the spirit of entrepreneurship.

  4. Unproductive Investment:

    In a country where people invest in unproductive channels, such as gold, jewellery, precious stones, idle inventories, luxurious real estates, embellishment display activities speculation, etc., entrepreneurship is restricted.

In a society where people have the tendency of extravagance, show and display wastefulness, leisurely life, art and fashion etc., the spirit of entrepreneurial jobs is curbed. Non-productive acts reduce the income and saving thereby leading to non-economic life.

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