An Empirical Study on Key Entrepreneur Motivations and Their Influence on Enterprise Success

Abstract

MSMEs play vital role in the economy by way of their robust contributions to GDP, National Income and Employment. Therefore, they get special focus from Government and witness larger public participation. However, in spite of their systematic importance and large scale presence, they face several hurdles for their existence. While many succumb to quick failures, some of them also proceed to attain phenomenal success. Most of the research curiosity in MSMEs comes from this fragility and uncertainty.Researchers believe that, reason of success or failure can be better diagnosed by finding out the genesis—what at all motivated the entrepreneur to initiate the venture. With this objective, 396 samples comprising both successful and not-so-successful enterprises are studied together to understand role of entrepreneurial motivations in enterprise success. The study finds significant co-relation between motivation and enterprise success. Independent t-Test established significant difference between successful and unsuccessful ones in terms of entrepreneurial motivation. Through Principal Component Analysis, three underlying constructs were identified explaining cumulative variance of 62.37%. They measured Need Oriented Motivation, Inspiration Oriented Motivation and Ambition Oriented Motivation. Need Oriented Motivation is found to be basic and universal to both successful and not-so-successful ones. Need served as the necessary condition but not sufficient condition for success. Combining this with Inspiration and Ambition oriented motivation seemed to lead to better probability of success.