Motivation in

Entrepreneurship
Unit 2
Role of Motivation in Entrepreneurship
Encourages
Risk-Taking
Drives
Inspires Innovation &
Leadership Creativity

Sustains Helps
Long-Term Overcome
Growth Challenges
Enhances
Decision-Maki
ng
Motivating Factors in Entrepreneurship
Financial
Passion &
Gain &
Personal
Fulfillment Wealth
Creation

Desire for
Risk-Taking Market Recognition
Independenc
Mindset Opportunity & Status
e

Government Family &

Problem-Solvi Need for
ng Mentality Achievement
Support & Social
Incentives Influence
Theories of Motivation

Hierarchy of
Need for Two-Factor Incentive-Ba Expectancy
Needs
Achievement Theory sed Theory Theory
Theory
Theory of Need for Achievement (nAch)
• Entrepreneurs are primarily motivated by a high "Need for
Achievement" (nAch).
• Entrepreneurs with high nAch are goal-oriented, competitive,
and constantly strive for excellence.
• They prefer tasks that require personal responsibility and
problem-solving.
• They seek feedback and are willing to take moderate risks to
succeed.
• https://www.youtube.com/watch?v=MdX0FjqW6us
• https://www.youtube.com/watch?v=bSx6hDjALkQ
Aman is launching a new tech startup and prefers to set
challenging but achievable goals rather than taking
extremely high risks. According to McClelland’s theory,
he is motivated by:

Need for Power Need for Affiliation

Need for Achievement

Need for Achievement Need for Financial Security

Ria prefers running her own business because she enjoys solving problems,
making independent decisions, and improving efficiency. Which
motivational factor is most relevant to her, based on McClelland’s theory?

Desire for a stable income Need for Achievement

Need for Achievement

Need for External

Family Pressure
Recognition
A business owner takes moderate financial risks, tracks performance, and
values feedback. Based on McClelland’s theory, what is the entrepreneur's
primary motivation?

High rewards with minimal

Social recognition
effort

Strong need for

Achievement

Strong need for

Power and Influence
Achievement
Which of the following situations best illustrates McClelland’s Need for
Power motivation?

A startup founder who wants

An entrepreneur who starts
to dominate the tech
a business to spend more
industry and influence
time with family
market trends
A startup founder who wants
to dominate the tech
industry and influence
market trends

A small business owner who A freelancer who works only

avoids expansion to keep when necessary to cover
risks low expenses
McClelland’s Need for Achievement is least relevant in which of the
following cases?

A real estate developer A person starting a business

constantly looking for bigger only because they were
and better projects forced to leave their job

A person starting a business

only because they were
forced to leave their job.

An athlete who trains every A restaurant owner who

day to improve their experiments with new
performance dishes to attract customers
Maslow’s Hierarchy of Needs Theory

Self-Actualization – Innovation, creativity,

and contributing to society.

Esteem Needs – Recognition, reputation,

and leadership in the business world.

Social Needs – Building relationships,

networking, and customer loyalty.

Safety Needs – Financial security, stable

income, and business stability.

Physiological Needs – Basic survival

needs like food, water, and shelter.
A startup founder struggles to cover basic expenses such as rent and food.
According to Maslow, what type of motivation is most important for them?

Self-actualization Esteem needs

Safety needs

Safety needs Social needs

Sneha has built a successful business and now wants to give back to
society by mentoring young entrepreneurs. According to Maslow’s theory,
she is motivated by:

Physiological needs Social needs

Self-actualization

Self-actualization Financial stability

An entrepreneur who starts a business to gain status and industry
recognition is driven by which level of Maslow’s hierarchy?

Safety needs Esteem needs

Esteem needs

Self-actualization Physiological needs

Why might an entrepreneur prioritize securing long-term contracts for their
business?

To increase brand To ensure financial stability

recognition and safety

To ensure financial stability

and safety

To satisfy self-actualization
To build social networks
needs
According to Maslow, which need is fulfilled when an entrepreneur develops
a business purely out of passion and personal growth rather than financial
necessity?

Safety needs Social needs

Self-actualization

Esteem needs Self-actualization

Herzberg’s Two-Factor Theory

Motivators Hygiene
• Recognition
• Job security
• Achievement
• Growth • Company
opportunities policies
• Meaningful work • Salary
Which of the following is an example of a hygiene factor that can prevent
dissatisfaction but does not necessarily motivate employees?

Challenging job
Flexible work schedule
assignments

Salary and job security

Recognition for
Salary and job security
achievements
A startup founder provides employees with incentives and career growth
opportunities to keep them motivated. According to Herzberg, what kind of
factor is this?

Hygiene factor Motivational factor

Motivational factor

Psychological factor Safety factor

A tech entrepreneur improves working conditions and offers better salaries
but finds that employee productivity does not significantly increase. What
mistake is being made?

Overemphasis on Relying only on hygiene

motivation factors

Relying only on hygiene

factors

Ignoring government
Using outdated technology
regulations
According to Herzberg, what is the best way for an entrepreneur to increase
employee motivation?

Offer career development

Increase salaries only
and meaningful work

Offer career development

and meaningful work

Improve office design and

Give more vacation time
working hours
If an entrepreneur removes demotivating factors (such as poor
management and low salary), what is the likely outcome?

Employees will be satisfied

Employees will be highly
but not necessarily
motivated
motivated

Employees will be satisfied

but not necessarily
motivated

Productivity will increase Employees will become

dramatically overconfident
Incentive-Based Theory of
Entrepreneurship
Government policies

Subsidies

market opportunities

Investors

venture capital funding

Policy changes
Expectancy Theory

Expectancy Instrumentality Valence

• Belief that • Belief that • Value of the

effort leads to success will reward.
success. lead to
rewards.

Motivation = Expectancy × Instrumentality × Valence

A business owner believes that if employees work extra hours, they will
receive high bonuses. According to Vroom’s Expectancy Theory, this belief
is called:

Expectancy Instrumentality

Instrumentality

Valence Risk-taking
Vroom’s Expectancy Theory states that employees are more motivated
when:

They believe their effort will They are forced to work

lead to rewards harder

They believe their effort will

lead to rewards

They are not given feedback They work in isolation

An entrepreneur launches a startup believing that hard work will lead to
funding from investors. According to Vroom, this belief represents:

Instrumentality Expectancy

Expectancy

Valence Risk management

In Vroom’s theory, Valence refers to:

The strength of an The perceived value of the

employee’s work ethic reward

The perceived value of the

reward

The probability of business

The risk of failure
success
According to Expectancy Theory, an entrepreneur who does not see a direct
link between effort and success will likely:

Stay highly motivated Lose motivation

Lose motivation

Work harder Ignore financial rewards