Entrepreneurship and Venture Creation Essay Example | Topics and Well Written Essays - 3000 words - 1

Entrepreneurship and Venture Creation - Essay Example There are several theories that explain the multidimensional concept of entrepreneurship. For example, the psychological theories that focuses on the mental and emotional factors characteristic of entrepreneurs. In the classical and neo-classical period, the terms entrepreneurship and entrepreneur were perceived to be similar (Evans 2014:48). The theories explaining entrepreneurship can be divided into three broad categories that are the psychological aspects, sociological theories and economic principles. However, scholars in the discipline of economics are the main contributors to the development of the entrepreneurship concept. In the neo-classical theories, entrepreneurship does not exploit the business field. Based on the earlier concepts of market equilibrium, neo-classical theories argue that firms in the market obtain their profit margin based on their levels of labor. The neo-classical theories also argue that entrepreneurs who put in more effort compared to their counterpar ts in turn obtain more profits (Evans 2014:48). The key limitation in the neo-classical theories is that they undermined the role of management and decision making in the success of the firm in the market. The theories also focused on the knowledge of the entrepreneurs and the nature of the business that an entrepreneur carries out. For example, if an entrepreneur is more knowledgeable in a particular type of business compared to their counterpart, then the entrepreneur is likely to be successful.