Lecture-02: Entrepreneurship Related Theory Part-I (IT Entrepreneurship)

 Maslow’s Hierarchy of Needs & Entrepreneurship

Maslow's Hierarchy of Needs, when applied to entrepreneurship, suggests that entrepreneurs progress through a series of needs, starting with basic survival and moving towards self-actualization, similar to the individual journey outlined by Abraham Maslow. Just as individuals need their basic needs met before pursuing higher-level goals, entrepreneurs need to address foundational business needs before focusing on growth and fulfillment. 

Here's a breakdown of how Maslow's Hierarchy can be applied to the entrepreneurial journey: 

1. Physiological Needs (Basic Survival): 

• Individual: Food, water, shelter, sleep.
• Entrepreneurial: Securing enough income to cover living expenses, having a stable workspace, and managing time effectively to ensure basic well-being.

2. Safety Needs (Security and Stability): 

• Individual: Personal security, financial security, health.
• Entrepreneurial: Building a sustainable business model, managing financial risks, protecting intellectual property, and establishing a reliable network.

3. Love and Belonging Needs (Social Connection): 

• Individual: Feeling connected to others, having meaningful relationships.
• Entrepreneurial: Building a strong team, cultivating customer relationships, and fostering a sense of community within the business.

4. Esteem Needs (Recognition and Respect): 

• Individual: Self-esteem, confidence, achievement, recognition from others.
• Entrepreneurial: Establishing a positive brand reputation, gaining recognition for products or services, and building a loyal customer base.

 

 

5. Self-Actualization Needs (Fulfillment and Growth): 

• Individual:

Achieving one's full potential, pursuing personal growth, and making a meaningful contribution.

• Entrepreneurial:

Focusing on innovation, pursuing a larger vision, leaving a positive impact on the world, and continuously striving for improvement.

Key takeaways:

• Not a strict hierarchy:

While Maslow's original theory suggests a linear progression, entrepreneurs may experience these needs simultaneously or revisit them as the business evolves. 

• Motivation:

Understanding these needs can help entrepreneurs identify what motivates them and their team at different stages of their journey. 

• Business Strategy:

By addressing these needs, entrepreneurs can create a more sustainable and fulfilling business that contributes to their overall well-being and success.

                                                                 
                                    Figure: Maslow’s Hierarchy of Needs      

McClelland’s Need for Achievement Theory

Another well-known need-based theory of motivation, as opposed to hierarchy of needs or satisfaction-dissatisfaction, is the theory developed by David C. McClelland and his associates. McClelland developed his theory based on Henry Murray’s (1938) developed long list of motives and manifest needs used in his early studies of personality.

McClelland’s need theory is closely associated with learning theory, because he believed that needs are learned or acquired by the kinds of events people experience in their environment and culture. He found that people who acquire a particular need behave differently from those who do not have.

His theory focused on Murray’s three needs: achievement, power, and affiliations. In the literature, these three needs are abbreviated as “n Ach”, “n Pow”, and “n Aff” respectively.

 

A brief description of these three follows:

Need for Achievement (“n Ach”):

This is the drive to excel, to achieve in relation to a set “standard, and to strive to succeed. In other words, need for achievement is a Behaviour directed towards competition with a standard of excellence. McClelland found that people with a high need for achievement perform better than those with a moderate or low need for achievement, and noted regional, national differences in achievement motivation.

 

Through his research, McClelland identified the following six characteristics of high need achievers:

1. High-need achievers have a strong desire to assume personal responsibilities for performing a task or finding a solution to a problem.

2. High need achievers tend to set moderately difficult goals and take calculated risks?

3. High need achievers have a strong desire for performance feedback?

4. They have need for achievement for attaining personal accomplishment.

5. They look for challenging tasks.

6. The high need-achievement individuals are not buck-passers.

 

Need for Power (“n Pow”):

The need for power is concerned with making an impact on others, the desire to influence others, the urge to change people, and the desire to make a difference in life. People with a high need for power are people who like to be in control of people and events. These result in ultimate satisfaction to man.

People who have a high need for power are characterized by:

1. A desire to influence and direct somebody else.

2. A desire to exercise control over others.

3. A concern for maintaining leaders-follower relations.

 

Need for Affiliation (“n Aff”):

The need for affiliation is defined as a desire to establish and maintain friendly and warm relations with other people. The need for affiliation, in many ways, is similar to Maslow’s social needs.

The people with high need for affiliation have the following characteristics:

1. They have a strong desire for acceptance and approval from others.

2. They tend to conform to the wishes of those people whose friendship and companionship they value.

3. They value the feelings of others.