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Scholars have divided entrepreneurship into different categories. For example, self-employed individuals are often not considered entrepreneurs. To be an entrepreneur, there has to be an organization being built. There is even a growing sense that only scalable forms of entrepreneurship should be encouraged (Shane, 2009). Another way to slice up entrepreneurs is to separate between necessity and opportunity entrepreneurs (Harding, 2002). Most entrepreneurship theories focus on opportunity entrepreneurship, but perhaps scholars should also embrace broader views that include entrepreneurship that is based on necessity, or at least consider a greater diversity of entrepreneurship (Welter et al., 2017). This approach looks at the motivations of the entrepreneurs, thus can be considered a motivational theory. Basically, if you have one of the two motives, you are more likely become an entrepreneur. Necessity entrepreneurs are individuals who start businesses because they cannot find a decen...

Hofstede et al. (2004) suggest that misfit individuals attempt to start ventures because they do not share the dominant cultural values. The assumption is that misfit individuals are dissatisfied with their job prospects and are more likely to attempt entrepreneurial careers as alternatives. The misfit theory of entrepreneurship has been used to explain why immigrants are often more entrepreneurial than native born populations. Immigrants' credentials may not respected in their new home countries. Their skills may be undervalued, their certifications and degrees may not be trusted or considered invalid or inadequate. Moreover, immigrants from countries with a different language and culture find it more difficult to integrate and find it more difficult to find lucrative employment (Kahn et al., 2017). In sum, imperfect information from foreign experience and education coupled with lingual and cultural differences make it more difficult to enter the workforce as salaried employees. T...

Thomas Cochran (1965) proposed that entrepreneurs are influenced by their own attitudes toward their occupation, and the expectations of groups facilitating new ventures, as well as the difficulty level of the operational requirements of the career. He argues that both attitudes of potential entrepreneurs and the expectations of sanctioning groups are culturally determined. He looked to evidence in historical cases such as the entrepreneurial prominence of Protestants in America , Samurais in Japan , the Yoruba in Nigeria , the Kikuya in Kenya , Christians in Lebanon, the Halai Memon in Pakistan , and the Parsis in India . Each of these cases can be considered interpretations derived from cultural biases. Hofstede (1980) proposed that culture captures the set of values, beliefs and expectations about behaviors that are shared by a social group. Cultural values can be unconscious or conscious, rational or irrational, but either way, they influence the social, political and technological...

William J. Baumol was an American economist at New York University. His theory of entrepreneurship starts with the assumption that every society is endowed with their share of entrepreneurs. However, the way in which entrepreneurs use their energies depends upon the institutions—the rules of the game—in place in a given society. He argues that entrepreneurs may engage in productive (i.e., innovation) or unproductive (rent-seeking and crime) forms of entrepreneurship depending on what a country’s institutions encourage. Baumol argues that the notion of a “spirit of entrepreneurship” is useless for policymakers because there is really nothing they can do to improve it. He proposes that by altering the rules of the game, policymakers can actively invigorate productive entrepreneurship in their societies and reduce unproductive or destructive forms of entrepreneurship. Changes to the rules of the game can vary but include changes to tax rules, regulations, subsidies and support programs. ...

Everett E. Hagen was a political scientist and economist writing at MIT in the 1950s and 1960s. He sought to explain how traditional societies changed into those with continual technological progress and hence, rising per capita incomes. Here we discuss Hagen's theory of entrepreneurship. Hagen argues that a process eventually leading to entrepreneurship is triggered when a social group loses status in relation to other groups in a society. When members of a given social group perceive that they are not respected by the dominant groups in society, this triggers a personality change (creativity) that encourages entrepreneurial behaviors (Dana, 1995). Some examples of withdrawal of status respect include: 1) when a formerly high-status group is displaced by a new group with better technology; 2) when the symbols of a social group are denigrated due to some change in attitude by the elites; 3) when inconsistencies arise between the status symbols of a group and their actual economi...

Max Weber was a German sociologist writing in the early 1900s who theorized that religion is a key determinant of entrepreneurial development. He argued that entrepreneurial energies are driven by religious beliefs about causes and consequences. In particular, he emphasized how religions can encourage growing capital for investment through the virtues of compound interest. A religious belief in saving for the future was key, he believed, to the capitalistic spirit! He distinguished between religions that encourage acquiring and accumulating capital from those that do not. In particular, Weber noted that Hinduism, Buddhism and Islam are not conducive to entrepreneurship. Hinduism and Buddhism purportedly have a focus on the present moment and tend to shun materialism, making them problematic to the pursuit of entrepreneurial goals. Islam’s focus on the rewards of the afterlife make material accumulation problematic. By contrast, the protestant work ethic prevalent in Northern Europe at...