Monthly Archives: December, 2012

2012 in review

The stats helper monkeys prepared a 2012 annual report for this blog.

Here’s an excerpt:

4,329 films were submitted to the 2012 Cannes Film Festival. This blog had 25,000 views in 2012. If each view were a film, this blog would power 6 Film Festivals

Click here to see the complete report.


Motivation – An Introduction

Motivation is the word derived from the word ’motive’ which means needs, desires, wants or drives within the individuals. It is the process of stimulating people to actions to accomplish the goals. Motivation is the key to organizational effectiveness. The manager in general has to get the work done through others. These ‘others’ are human resources who need to be motivated to attain organizational objectives.

In the work goal context the psychological factors stimulating the people’s behavior can be:

  • desire for money
  • success
  • recognition
  • job-satisfaction
  • team work, etc

One of the most important functions of management is to create willingness amongst the employees to perform in the best of their abilities. Therefore the role of a leader is to arouse interest in performance of employees in their jobs. The process of motivation consists of three stages:-

  1. A felt need or drive
  2. A stimulus in which needs have to be aroused
  3. When needs are satisfied, the satisfaction or accomplishment of goals.

Therefore, we can say that motivation is a psychological phenomenon which means needs and wants of the individuals have to be tackled by framing an incentive plan.

According to George R. Terry, “Motivation is the desire within an individual that stimulates him or her to action.”

In the words of Robert Dubin, it is “the complex of forces starting and keeping a person at work in an organization”. Viteles defines motivation as “an unsatisfied need which creates a state of tension or disequilibrium, causing the individual to move in a goal directed pattern towards restoring a state of equilibrium, by satisfying the need.”

According to Encyclopedia of Management. “Motivation refers to the degree of readiness of an organism to pursue some designated goals and implies the determination of the nature and locus of force inducing a degree of readiness.”

On the basis of above definitions, the following observations can be made regarding motivation:

  1. Motivation is an inner psychological force, which activates and compels the person to behave in a particular manner.
  2. The motivation process is influenced by personality traits, learning abilities, perception and competence of an individual.
  3. A highly motivated employee works more efficiently and his level of production tends to be higher than others.
  4. Motivation originates from the-needs and wants of an individual. It is a tension of lacking something in his mind, which forces him to work more efficiently.
  5. Motivation is also a process of stimulating and channelising the energy of an individual for achieving set goals.
  6. Motivation also plays a crucial role in determining the level of performance. Highly motivated employees get higher satisfaction, which may lead to higher efficiency.
  7. Motivating force an^ its degree, may differ from individual to individual depending on his personality, needs, competence and other factors.
  8. The process of Motivation helps the manager in analysing and understanding human behavior and finding but how an individual can be inspired to produce desirable working behavior.
  9. Motivation may be positive as well as negative. Positive motivation includes incentives, rewards and other benefits while negative motivation implies some punishment, fear, use of force etc.

10. The motivation procedure contributes to and boosts up the morale of the employees. A high degree of motivation may lead to high morale.

Basic Motivational Model

People’s behavior is determined by what motivates them. Their performance is a product of both ability level and motivation. Given below is the basic model of motivation. Although motivation is a necessary contributor for job performance, it is not the only one. Along with ability, motivation is also a combination of level of skill, knowledge about how to complete the task, feelings and emotions, and facilitating and inhibiting conditions not under the individual’s control.

Motivation Model

Performance = function (ability × motivation)

However, what is clearly evident is that if the manager is to improve the work of the organization, attention must be given to the level of motivation of its members. The manager must also encourage staff to direct their efforts (their driving force) towards the successful attainment of the goals and objectives of the organization.

Geert Hofstede’s five dimensions of national culture

The word culture is used frequently in organizational behavior. Culture is the learned and shared way of thinking and acting among a group of people or society. Cultures vary in their underlying patterns of values and attitudes.

The way people think about such matters as achievement, wealth and material gain and risk and change may influence how they approach work and their influence with organization. A framework offered by Hofstede offers one such approach for understanding how values differences across national cultures can influence human behavior at work.

The values that distinguished countries from each other could be grouped statistically into four clusters. These four groups became the Hofstede dimensions of national culture:

  1. Power Distance (PDI)
  2. Individualism versus Collectivism (IDV)
  3. Masculinity versus Femininity (MAS)
  4. Uncertainty Avoidance (UAI)
  5. Long-Term Orientation (LTO)

A fifth Dimension was added in 1991 based on research by Michael Bond who conducted an additional international study among students with a survey instrument that was developed together with Chinese employees and managers.

Cultural 01

1. Power Distance

Power distance is the willingness of a culture to accept status and power differences among its members. In cultures with low power distance, people are likely to expect that power is distributed rather equally, and are furthermore also likely to accept that power is distributed to less powerful individuals. As opposed to this, people in high power distance cultures will likely both expect and accept inequality and steep hierarchies.

The fundamental issue here is how a society handles inequalities among people. People in societies exhibiting a large degree of power distance accept a hierarchical order in which everybody has a place and which needs no further justification. In societies with low power distance, people strive to equalize the distribution of power and demand justification for inequalities of power.

2. Uncertainty Avoidance

Uncertainty Avoidance is referring to a lack of tolerance for ambiguity and a need for formal rules and policies. This dimension measures the extent to which people feel threatened by ambiguous situations. These uncertainties and ambiguities may e.g. be handled by an introduction of formal rules or policies, or by a general acceptance of ambiguity in the organizational life.

The majority of people living in cultures with a high degree of uncertainty avoidance, are likely to feel uncomfortable in uncertain and ambiguous situations. People living in cultures with a low degree of uncertainty avoidance, are likely to thrive in more uncertain and ambiguous situations and environments.

Countries exhibiting strong UAI maintain rigid codes of belief and behavior and are intolerant of unorthodox behavior and ideas. Weak UAI societies maintain a more relaxed attitude in which practice counts more than principles.

3. Masculinity vs. Femininity

It is the tendency of a culture to stereotypical masculine or feminine traits. These values concern the extent on emphasis on masculine work related goals and assertiveness (earnings, advancement, title, respect et.), as opposed to more personal and humanistic goals (friendly working climate, cooperation, nurturance etc.)

The first set of goals is usually described as masculine, whereas the latter is described as feminine. These goals and values can, among other, describe how people are potentially motivated in cultures with e.g. a feminine or a masculine culture.

Japan is considered a very masculine culture whereas Thailand is considered a more feminine culture.

4. Individualism vs. Collectivism

In individualistic cultures people are expected to portray themselves as individuals, who seek to accomplish individual goals and needs. In collectivistic cultures, people have greater emphasis on the welfare of the entire group to which the individual belongs, where individual wants, needs and dreams are often set aside for the common good.

5. Long vs. Short Term Orientation

Long-Term Orientation is the fifth dimension, which was added after the original four dimensions. This dimension was identified by Michael Bond and was initially called Confucian dynamism. Geert Hofstede added this dimension to his framework, and labeled this dimension long vs. short term orientation.

The consequences for work related values and behavior springing from this dimension are rather hard to describe, but some characteristics are described below.

Long term orientation:

  • Acceptance of that business results may take time to achieve
  • The employee wishes a long relationship with the company

Short term orientation:

  • Results and achievements are set, and can be reached within timeframe
  • The employee will potentially change employer very often.


Hofstede provided a definition of culture and how culture can be measured. His research showed that cultural differences matter. Managers in international organizations operate according to their country’s values, rather than to the organization’s culture.

Employees from related national cultures work in similar fashions, thereby reducing the chance of conflicts. Hofstede’s model provides managers of cross-cultural relations a tool to help them understand differences in value sets and behavior.

The model negates that one set of principles is universally applicable by confirming that there are multiple ways of structuring organizations and institutions. An organization’s wider social and cultural environment plus its technology determines the level of bureaucracy and centralization (Scott, Hofstede).


When Hofstede’s first results were criticized by Asian scholars, he added time orientation as a fifth dimension thereby raising doubts about whether the typology itself was exhaustive.

Culture is a far too complex and multifaceted to be used as a straightforward organizational change control. “You do not control culture, at best you shape it” (Green).

Cluster of countries based on Hofstede’s dimension of individualism collectivism and power distance

Cultural 02

Production System

Production systems can be classified as Job Shop, Batch, Mass and Continuous Production systems.

Production Functions

1. Job-Shop Production

This is the oldest method of production on a very small scale. Job shop production are characterized by manufacturing of one or few quantity of products designed and produced as per the specification of customers within prefixed time and cost. The distinguishing feature of this is low volume and high variety of products. With this method individual requirements of consumers can be met. Each job order stands alone and may not be repeated.

A job shop comprises of general purpose machines arranged into different departments. Each job demands unique technological requirements, demands processing on machines in a certain sequence.


The Job-shop production system is followed when there is:

  1. Known for rapid value addition
  2. High variety of products and low volume
  3. Use of general purpose machines and facilities
  4. Highly skilled operators who can take up each job as a challenge because of uniqueness
  5. Large inventory of materials, tools, parts
  6. It deals with ‘low volume and large variety’ production.
  7. Detailed planning is essential for sequencing the requirements of each product, capacities for each work center and order priorities.
  8. This system has a lot of flexibility of operation, and hence general purpose machines are required

Following are the advantages of job shop production:

  1. Because of general purpose machines and facilities variety of products can be produced.
  2. Requires less money and is easy to start with
  3. Operators will become more skilled and competent, as each job gives them learning opportunities.
  4. Less or no management problem because of very small work force.
  5. Full potential of operators can be utilized.
  6. Opportunity exists for creative methods and innovative ideas.

Following are the limitations of job shop production:

  1. Higher cost due to frequent set up changes.
  2. Higher level of inventory at all levels and hence higher inventory cost.
  3. Production planning is complicated.
  4. Low equipment utilization
  5. Larger space requirements.

2. Batch Production

Batch production is defined by American Production and Inventory Control Society (APICS) “as a form of manufacturing in which the job passes through the functional departments in lots or batches and each lot may have a different routing.” It is characterized by the manufacture of limited number of products produced at regular intervals and stocked awaiting sales, this justifies the name batch production.

The batch production system is generally adopted in medium size enterprises. Batch production is a stage in between mass production and job-shop production.


Batch production system is used under the following circumstances:

  1. When there is shorter production runs.
  2. When plant and machinery are flexible.
  3. When plant and machinery set up is used for the production of item in a batch and change of set up is required for processing the next batch.
  4. When manufacturing lead time and cost are lower as compared to job order production.

Following are the advantages of batch production:

  1. Better utilization of plant and machinery
  2. Promotes functional specialization
  3. Cost per unit is lower as compared to job order production
  4. Lower investment in plant and machinery
  5. Most suitable for computer-aided-manufacturing
  6. Flexibility to accommodate and process number of products
  7. Job satisfaction exists for operators

Following are the limitations of batch production:

  1. Material handling is complex because of irregular and longer flows.
  2. Production planning and control is complex.
  3. Work in process inventory is higher compared to continuous production.
  4. Higher set up costs due to frequent changes in set up.

3. Mass Production

Manufacture of discrete parts or assemblies using a continuous process are called mass production. This production system is justified by very large volume of production. The machines are arranged in a line or product layout. Product and process standardization exists and all outputs follow the same path.


Mass production is used under the following circumstances:

  1. Standardization of product and process sequence.
  2. Dedicated special purpose machines having higher production capacities and output rates.
  3. Large volume of products.
  4. Shorter cycle time of production.
  5. Lower in process inventory.
  6. Perfectly balanced production lines.
  7. Flow of materials, components and parts is continuous and without any back tracking.
  8. Production planning and control is easy.
  9. Material handling can be completely automatic.

Following are the advantages of mass production:

  1. Higher rate of production with reduced cycle time.
  2. Higher capacity utilization due to line balancing.
  3. Less skilled operators are required.
  4. Low process inventory.
  5. Manufacturing cost per unit is low.

Following are the limitations of mass production:

  1. Breakdown of one machine will stop an entire production line.
  2. Line layout needs major change with the changes in the product design.
  3. High investment in production facilities.
  4. The cycle time is determined by the slowest operation.

4. Continuous Production

Production facilities are arranged as per the sequence of production operations from the first operations to the finished product. The items are made to flow through the sequence of operations through material handling devices such as conveyors, transfer devices, etc.

In this, the production activity continues for 24 hours or on three shifts a day basis. A steel plant, for example, belongs to this type. It is impossible to stop the production process on a short notice without causing a great damage to its blast furnace and related equipment.


Continuous production is used under the following circumstances:

  1. Dedicated plant and equipment with zero flexibility.
  2. Material handling is fully automated.
  3. Process follows a predetermined sequence of operations.
  4. Component materials cannot be readily identified with final product.
  5. Planning and scheduling is a routine action.

Following are the advantages of continuous production:

  1. Standardization of product and process sequence.
  2. Higher rate of production with reduced cycle time.
  3. Higher capacity utilization due to line balancing.
  4. Manpower is not required for material handling as it is completely automatic.
  5. Person with limited skills can be used on the production line.
  6. Unit cost is lower due to high volume of production.

Following are the limitations of continuous production:

  1. Flexibility to accommodate and process number of products does not exist.
  2. Very high investment for setting flow lines.
  3. Product differentiation is limited.

Components of a product

A product is simply a marketing offering, whether tangible or intangible, that someone wants to purchase and consume. In reality while decisions related to the consumable parts of the product are extremely important, the TOTAL product consists of more than what is consumed.

A product is said to have three components:

Components of Producy 01

Core Benefits

The core product itself is the benefit the customer receives from using the product. People make buying decisions to satisfy their needs.

In some cases these core benefits are offered by the product itself (e.g., floor cleaner) while in other cases the benefit is offered by other aspects of the product (e.g., the can containing the floor cleaner that makes it easier to spread the product).

Consequently, at the very heart of all product decisions is determining the key or core benefits a product will provide. From this decision, the rest of the product offering can be developed.

Actual Product

The core benefits are offered through the components that make up the actual product the customer purchases.

For instance, when a consumer returns home from shopping at the grocery store and takes a purchased item out of her shopping bag, the actual product is the item she holds in her hand.

Within the actual product is the consumable product, which can be viewed as the main good, service or idea the customer is buying.

Augmented Product

Marketers often surround their actual products with goods and services that provide additional value to the customer’s purchase.

While these factors may not be key reasons leading customers to purchase (i.e., not core benefits), for some the inclusion of these items strengthens the purchase decision while for others failure to include these may cause the customer not to buy.

Items considered part of the augmented product include:

  • Guarantee
  • Warranty
  • Customer Service
  • Complementary Products
  • Accessibility

Three components of Products

Components of Product 02

Image Source: Principles of Marketing (14 Edition): Kotler


Capitalism, a term of disparagement coined by socialists in the mid-nineteenth century, is a misnomer for “economic individualism,” which Adam Smith earlier called “the obvious and simple system of natural liberty” (Wealth of Nations). It is now quite commonly used to describe the social system in which we now live. It is also often assumed that it has existed, if not forever, then for most of human history. In fact, capitalism is a relatively new social system.

If capitalism can be said to have a birthplace, the most likely location would be in northern Italy.

Capitalism is that part of economic systems where productions are owned and managed by private individuals and institutions. Or it is economic individualism wherein the individuals are the one to decide what and how much to produced and distributed. They are at liberty to use any technique of production and produce anything they like. In this economic system, State is to take care of only internal and external security of the country. Normally the activities related to Defence, Police, Administration and Courts of Justice are controlled by the government.

A private enterprise economy characterized by the existence of business fluctuations and considerable unemployment. In capitalism there will be considerable ups and downs – swings of the business cycle with their inevitable repercussions on the people.

There are two types of capitalism

  1. Classical Capitalism
  2. Monopoly Capitalism

Classical capitalism

For this credit goes to Adam Smith, in fact Adam Smith the founder of economics presented the idea. Adam Smith assumed the presence of perfect competition.  The state is more or less non-existent so far as the economic matters are concerned. The State job was restrained to enforcement of contracts, protection of property, maintain law and order national frontiers. They were on the opinion the State has no right to interfere in the country economic activities. In this type the principle of laissex-faire dominated.

Monopoly Capitalism

There is no more room for classical capitalism in today’s economic system. Free market, perfect competition and State’s non-interference in the economic activities are not existed. Perfect competition is yielded to imperfect competition. Nowadays market is restricted. Now countries are intervening in the activities of their economic systems.


Under capitalism the most important (but not only) institution of allocation is the market. Markets consist of buyers and sellers of commodities, which are goods and services bought and sold for a price.

Based on the type of commodity being produced and consumed, as well as the amount and nature of competition, markets come in a huge variety. They range from free-wheeling and highly competitive, with many small producers who must accept the price the market hands them, to large markets dominated by a few major producers, or oligopolists, who can shape the market price.

Main Characteristics of Capitalism

  • Right to own property
  • Profit motive
  • Private ownership of means of production
  • Consumer’s sovereignty
  • Economic freedom
  • Social division of people
  • Price mechanism

Merits of Capitalism

  • Stable economic system
  • Reduction in cost of production due to efficient control
  • Efficient control of production process
  • Improved quality of goods
  • Consumer’s choice is given full weight
  • Varieties of products

Demerits of Capitalism

  • Inequality in the distribution of national wealth
  • Fluctuations in the level of employment
  • Class conflicts
  • Waste of talents
  • Heavy expenses on publicity result into increase in cost and price of the commodity
  • Results in imbalances in opportunities

Factors affecting Entrepreneurship Development

Entrepreneurship is influenced by four distinct factors: economic development, culture, technological development and education. In areas where these factors are present, you can expect to see strong and consistent entrepreneurial growth.

These conditions may have both positive and negative influences on the emergence of entrepreneurship. Positive influences constitute facilitative and conducive conditions for the emergence of entrepreneurship, whereas negative influences create inhibiting milieu to the emergence of entrepreneurship.

Let us look at each one of them in details.

Economic Factors

Economic environment exercises the most direct and immediate influence on entrepreneurship. This is likely because people become entrepreneurs due to necessity when there are no other jobs or because of opportunity.

The economic factors that affect the growth of entrepreneurship are the following:

1. Capital

Capital is one of the most important factors of production for the establishment of an enterprise. Increase in capital investment in viable projects results in increase in profits which help in accelerating the process of capital formation. Entrepreneurship activity too gets a boost with the easy availability of funds for investment.

Availability of capital facilitates for the entrepreneur to bring together the land of one, machine of another and raw material of yet another to combine them to produce goods. Capital is therefore, regarded as lubricant to the process of production.

France and Russia exemplify how the lack of capital for industrial pursuits impeded the process of entrepreneurship and an adequate supply of capital promoted it.

2. Labor

Easy availability of right type of workers also effect entrepreneurship. The quality rather than quantity of labor influences the emergence and growth of entrepreneurship. The problem of labor immobility can be solved by providing infrastructural facilities including efficient transportation.

The quality rather quantity of labor is another factor which influences the emergence of entrepreneurship. Most less developed countries are labor rich nations owing to a dense and even increasing population. But entrepreneurship is encouraged if there is a mobile and flexible labor force. And, the potential advantages of low-cost labor are regulated by the deleterious effects of labor immobility. The considerations of economic and emotional security inhibit labor mobility. Entrepreneurs, therefore, often find difficulty to secure sufficient labor.

3. Raw Materials

The necessity of raw materials hardly needs any emphasis for establishing any industrial activity and its influence in the emergence of entrepreneurship. In the absence of raw materials, neither any enterprise can be established nor can an entrepreneur be emerged

It is one of the basic ingredients required for production. Shortage of raw material can adversely affect entrepreneurial environment. Without adequate supply of raw materials no industry can function properly and emergence of entrepreneurship to is adversely affected.

In fact, the supply of raw materials is not influenced by themselves but becomes influential depending upon other opportunity conditions. The more favorable these conditions are, the more likely is the raw material to have its influence of entrepreneurial emergence.

4. Market

The role and importance of market and marketing is very important for the growth of entrepreneurship. In modern competitive world no entrepreneur can think of surviving in the absence of latest knowledge about market and various marketing techniques.

The fact remains that the potential of the market constitutes the major determinant of probable rewards from entrepreneurial function. Frankly speaking, if the proof of pudding lies in eating, the proof of all production lies in consumption, i.e., marketing.

The size and composition of market both influence entrepreneurship in their own ways. Practically, monopoly in a particular product in a market becomes more influential for entrepreneurship than a competitive market. However, the disadvantage of a competitive market can be cancelled to some extent by improvement in transportation system facilitating the movement of raw material and finished goods, and increasing the demand for producer goods.

5. Infrastructure

Expansion of entrepreneurship presupposes properly developed communication and transportation facilities. It not only helps to enlarge the market, but expand the horizons of business too. Take for instance, the establishment of post and telegraph system and construction of roads and highways in India. It helped considerable entrepreneurial activities which took place in the 1850s.

Apart from the above factors, institutions like trade/ business associations, business schools, libraries, etc. also make valuable contribution towards promoting and sustaining entrepreneurship’ in the economy. You can gather all the information you want from these bodies. They also act as a forum for communication and joint action.

Social Factors

Social factors can go a long way in encouraging entrepreneurship. In fact it was the highly helpful society that made the industrial revolution a glorious success in Europe. Strongly affect the entrepreneurial behavior, which contribute to entrepreneurial growth. The social setting in which the people grow, shapes their basic beliefs, values and norms.

The main components of social environment are as follows:

1. Caste Factor


There are certain cultural practices and values in every society which influence the’ actions of individuals. These practices and value have evolved over hundred of years. For instance, consider the caste system (the varna system) among the Hindus in India. It has divided the population on the basis of caste into four division. The Brahmana (priest), the Kshatriya (warrior), the Vaishya (trade) and the Shudra (artisan): It has also defined limits to the social mobility of individuals.

By social mobility’ we mean the freedom to move from one caste to another. The caste system does not permit an individual who is born a Shridra to move to a higher caste. Thus, commercial activities were the monopoly of the Vaishyas. Members of the three other Hindu Varnas did not become interested in trade and commence, even when India had extensive commercial inter-relations with many foreign countries. Dominance of certain ethnical groups in entrepreneurship is a global phenomenon

2. Family Background

This factor includes size of family, type of family and economic status of family. In a study by Hadimani, it has been revealed that Zamindar family helped to gain access to political power and exhibit higher level of entrepreneurship.

Background of a family in manufacturing provided a source of industrial entrepreneurship. Occupational and social status of the family influenced mobility. There are certain circumstances where very few people would have to be venturesome. For example in a society where the joint family system is in vogue, those members of joint family who gain wealth by their hard work denied the opportunity to enjoy the fruits of their labor because they have to share their wealth with the other members of the family.

3. Education

Education enables one to understand the outside world and equips him with the basic knowledge and skills to deal with day-to-day problems. In any society, the system of education has a significant role to play in inculcating entrepreneurial values.

In India, the system of education prior to the 20th century was based on religion. In this rigid system, critical and questioning attitudes towards society were discouraged. The caste system and the resultant occupational structure were reinforced by such education. It promoted the idea that business is not a respectable occupation. Later, when the British came to our country, they introduced an education system, just to produce clerks and accountants for the East India Company, The base of such a system, as you can well see, is very anti-entrepreneurial.

Our educational methods have not changed much even today. The emphasis is till on preparing students for standard jobs, rather than marking them capable enough to stand on their feet.

4. Attitude of the Society

A related aspect to these is the attitude of the society towards entrepreneurship. Certain societies encourage innovations and novelties, and thus approve entrepreneurs’ actions and rewards like profits. Certain others do not tolerate changes and in such circumstances, entrepreneurship cannot take root and grow. Similarly, some societies have an inherent dislike for any money-making activity. It is said, that in Russia, in the nineteenth century, the upper classes did not like entrepreneurs. For them, cultivating the land meant a good life. They believed that rand belongs to God and the produce of the land was nothing but god’s blessing. Russian folk-tales, proverbs and songs during this period carried the message that making wealth through business was not right.

5. Cultural Value

Motives impel men to action. Entrepreneurial growth requires proper motives like profit-making, acquisition of prestige and attainment of social status. Ambitious and talented men would take risks and innovate if these motives are strong. The strength of these motives depends upon the culture of the society. If the culture is economically or monetarily oriented, entrepreneurship would be applauded and praised; wealth accumulation as a way of life would be appreciated. In the less developed countries, people are not economically motivated. Monetary incentives have relatively less attraction. People have ample opportunities of attaining social distinction by non-economic pursuits. Men with organizational abilities are, therefore, not dragged into business. They use their talents for non-economic end.

Psychological Factors

Many entrepreneurial theorists have propounded theories of entrepreneurship that concentrate especially upon psychological factors. These are as follows :

1. Need Achievement

The most important psychological theories of entrepreneurship was put forward in the early) 960s by David McClelland. According to McClelland ‘need achievement’ is social motive to excel that tends to characterise successful entrepreneurs, especially when reinforced by cultural factors. He found that certain kinds of people, especially those who became entrepreneurs, had this characteristic. Moreover, some societies tend to reproduce a larger percentage of people with high ‘need achievement’ than other societies. McClelland attributed this to sociological factors. Differences among societies and individuals accounted for ‘need achievement’ being greater in some societies and less in certain others.

The theory states that people with high need-achievement are distinctive in several ways. They like to take risks and these risks stimulate them to greater effort. The theory identifies the factors that produce such people. Initially McClelland attributed the role of parents, specially the mother, in mustering her son or daughter to be masterful and self-reliant. Later he put less emphasis on the parent-child relationship and gave more importance to social and cultural factors. He concluded that the ‘need achievement’ is conditioned more by social and cultural reinforcement rather than by parental influence and such related factors.

2. Withdrawal of Status Respect

There are several other researchers who have tried to understand the psychological roots of entrepreneurship. One such individual is Everett Hagen who stresses the-psychological consequences of social change. Hagen says, at some point many social groups experience a radical loss of status. Hagen attributed the withdrawal of status respect of a group to the genesis of entrepreneurship.

Hage believes that the initial condition leading to eventual entrepreneurial behavior is the loss of status by a group. He postulates that four types of events can produce status withdrawal:

  1.       i.        The group may be displaced by force;
  2.      ii.        It may have its valued symbols denigrated;
  3.     iii.        It may drift into a situation of status inconsistency; and
  4.    iv.        It may not be accepted the expected status on migration in a new society.

3. Motives

Other psychological theories of entrepreneurship stress the motives or goals of the entrepreneur. Cole is of the opinion that besides wealth, entrepreneurs seek power, prestige, security and service to society. Stepanek points particularly to non-monetary aspects such as independence, persons’ self-esteem, power and regard of the society.

On the same subject, Evans distinguishes motive by three kinds of entrepreneurs

  1. Managing entrepreneurs whose chief motive is security.
  2. Innovating entrepreneurs, who are interested only in excitement.
  3. Controlling entrepreneurs, who above all otter motives, want power and authority.

Finally, Rostow has examined inter gradational changes in the families of entrepreneurs. He believes that the first generation seeks wealth, the second prestige and the third art and beauty.

4. Others

Thomas Begley and David P. Boyd studied in detail the psychological roots of entrepreneurship in the mid-1980s. They came to the conclusion that entrepreneurial attitudes based on psychological considerations have five dimensions:

  1. First came ‘need-achievement’ as described by McClelland. In all studies of successful entrepreneurs a high achievement orientation is invariably present.
  2. The second dimension that Begley and Boyd call ‘locus of control’ This means that the entrepreneur follows the idea that he can control his own life and is not influenced by factors like luck, fate and so on. Need-achievement logically implies that people can control their own lives and are not influenced by external forces.
  3. The third dimension is the willingness to take risks. These two researchers have come to the conclusion that entrepreneurs who take moderate risks earn higher returns on their assets than those who take no risks at all or who take extravagant risks.
  4. Tolerance is the next dimension of this study. Very few decisions are made with complete information. So all business executives must, have a certain amount of tolerance for ambiguity.
  5. Finally, here is what psychologists call ‘Type A’ behavior. This is nothing but “a chronic, incessant struggle to achieve more and more in less and less of time” Entrepreneurs are characterize by the presence of ‘Type A’ behavior in all their endeavors.

What is a product?

One can say a product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in exchange for money or some other unit of value. Product is anything that is capable of satisfying customer needs.

Product – Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.

Products are created as a result of an art or many arts. A product can be characterized by:

  • Its means (how it is made),
  • Material (what it’s made of),
  • Form (shape and style), and
  • Function (how it works).

There are four classes of products:

  1. Information/signs
  2. Artifacts/physical objects
  3. Activities and services
  4. Organizations and systems

In marketing, the term “product” is often used as a catch-all word to identify solutions a marketer provides to its target market. The term “product” to cover offerings that falls into one of the following categories:

  • Goods
  • Services
  • Ideas


Something is considered a good if it is a tangible item. That is, it is something that is felt, tasted, heard, smelled or seen. For example, bicycles, cell phones, are all examples of tangible goods.


Something is considered a service if it is an offering a customer obtains through the work or labor of someone else.

Services can result in the creation of tangible goods (e.g., a publisher of business magazines hires a freelance writer to write an article) but the main solution being purchased is the service.

Unlike goods, services are not stored, they are only available at the time of use (e.g., hair salon) and the consistency of the benefit offered can vary from one purchaser to another (e.g., not exactly the same hair styling each time).


Something falls into the category of an idea if the marketer attempts to convince the customer to alter their behavior or their perception in some way.

Marketing ideas is often a solution put forth by non-profit groups or governments in order to get targeted groups to avoid or change certain behavior.

Product can be define with two ways:

  1. Narrow Sense (Classical Approach to proudct)
  2. Broad Sense (Modern Approach to product)

1.  Narrow Sense

A product is a set of basic characteristic assembled in an identifiable form or product is a set of tangible, physical and chemical attributes assembled in identifiable form. Such as personal computer, steel, pen etc.

2.  Broad Sense

Product means all those things, offer by the company to satisfy the customer. But According to the Walliam J. Stanton “product is a set of tangible and intangible attributes include packaging, price, quality and brand plus seller services and reputation.

Today, as products and services become more commoditized, many companies are moving to a new level in creating value for their customers. To differentiate their offers, beyond simply making products and delivering services, they are creating and managing customer experiences with their brands or company.

Sales Management – Introduction

“Sales management” as the term implies means management of sales. Often it is considered synonymous with the management of personal sales. It involves an understanding of the effort that goes into the management of the sales force and the various processes of sales.


Sales, and selling and the sales force, is inherently a part of the marketing mix. It must be deployed appropriately if it is to play its part and have a significant effect on the whole. That means that those people undertaking the sales task must be professional: able to communicate persuasively and create the necessary relationship with customers. It also means that the efforts of sales staff must be properly coordinated and therefore well managed: sales management is therefore important, and can directly influence results.


Sales management initially was meant to be the direction of sales force personnel. Later the term took on a broader significance apart from personal selling and the term “sales management” included managing of all the sales related activities including below the line advertising, sales promotion, physical distribution, pricing and product merchandising.


American marketers association (AMA’s) definition, takes into consideration a number of these viewpoints. Its definitions runs like: the planning, direction, and control of the personnel, selling activities of a business unit including recruiting, selecting, training, assigning, rating, supervising, paying, motivating, as all these tasks apply to the personnel sales-force.


Sales-management differs from other fields of management, mainly in different aspects: the selling operation of a business firm does not exist in isolation. Thus, simultaneous with the changes taking place in the business, as well as marketing-orientation, a new concept of sales management has evolved. The business, is now society-oriented, on human-welfare aspects. So, sales-management has to work in a broader and newer environment, in co-existence with the traditional lines. The present emphasis is now on total development of human resources.


Formal and Informal Communication

Every organization has a formal communication network, in which ideas and information flow along the lines of command in the company’s organizational structure. Throughout the internal formal network, information flows in three directions.

Formal communication is organized and managed information that is shared with relevant individuals in order to secure coordinated action throughout the organization. Formal communication channels are based on an individual’s role in the organization and distributed in an organized way according to the established chain in organizational charts.

A formal communication channel transmits information such as the goals, policies, and procedures of an organization. Messages in this type of communication channel follow a chain of command. This means information flows from a manager to his subordinates and they in turn pass on the information to the next level of staff.

Formal Communication is of three types

  1. Downward Communication
  2. Upward Communication
  3. Horizontal Communication

Downward communication flows from executives to employees, conveying executive decisions and providing information that helps employees do their jobs.

Upward communication flows from employees to executives, providing insight into problems, trends, opportunities, grievances, and performance—thus allowing executives to solve problems and make intelligent decisions.

Horizontal communication flows between departments to help employees share information, coordinate tasks, and solve complex problems.

An example of a formal communication channel is a company’s newsletter which gives employees as well as the clients a clear idea of a company’s goals and vision. It also includes the transfer of information with regard to memoranda, reports, directions, and scheduled meetings in the chain of command.

Every organization also has an informal communication network—a grapevine—that operates anywhere two or more employees are in contact, from the lunchroom to the golf course to the company’s e-mail and instant messaging (IM) systems.

Informal communication satisfies a variety of needs, particularly social and emotional, and is not based on the positions individuals occupy within the organizations. As a result, the communication is not managed or planned in any organized fashion. It’s more relaxed, casual and tends to be spread by word-of-mouth quickly throughout a department or organization because it’s not restricted to approvals and an established path of distribution.

Probably the most common term used for the informal communication in the workplace is “grapevine” and this communication that is sent through the organizational grapevine is often considered gossip or rumor.

Some executives are wary of the informal network, but savvy managers tap into it to spread and receive informal messages. Smart managers also know that a particularly active grapevine is a sign the formal communication network is not providing the information employees believe they need. Grapevine flourishes when employees don’t receive the information they want to receive.

An example of an informal communication channel is lunchtime at the organization’s cafeteria/canteen. Here, in a relaxed atmosphere, discussions among employees are encouraged. Also managers walking around, adopting a hands-on approach to handling employee queries is an example of an informal communication channel.

Unofficial Communication Channel

Good managers will recognize the fact that sometimes, communication that takes place within an organization is interpersonal. While minutes of a meeting may be a topic of discussion among employees, sports, politics and TV shows also share the floor.

The unofficial communication channel in an organization is the organization’s ‘grapevine’. It is through the grapevine that rumors circulate. Also those engaging in ‘grapevine’ discussions, often form groups which translate into friendships outside of the organization. While the grapevine may have positive implications, more often than not information circulating in the grapevine is exaggerated and may cause unnecessary alarm to employees. A good manager should be privy to information circulating in this unofficial communication channel and should take positive measures to prevent the flow of false information.

An example of an unofficial communication channel is social gatherings among employees.

Formal and Informal