Max Weber in his theory says religion has a large impact on entrepreneurial development. According to Weber, some religions have basic beliefs to earn and acquire money and some have less of it. He calls then a “spirit of capitalism” and “adventurous spirit”. The spirit of capitalism will be generated when mental attitude in society is favourable to capitalism. According to Max Weber, driving entrepreneurial energies are generated by the adoption of exogenously-supplied religious beliefs. It is these beliefs which produce intensive exertion in occupational pursuits, the systematic ordering of means to ends, and the accumulation of assets. His theory suggests the belief systems of Hinduism, Buddhism and Islam do not encourage entrepreneurship. His stand has been challenged by many sociologists.

Max Weber’s Theory suited the colonial rulers who wanted to encourage European entrepreneurship in India. But it has been criticised by subsequent researchers. The theory is based on invalid assumptions, which are:

1. There is a single system of Hindu value,
2. The Indian community internalised those values and translated them to day to day behaviour, and
3. These values remained immune to and insulted against external pressures and changes. The rapid growth of entrepreneurship in India since independence proves that Hinduism is not averse to the spirit of capitalism and adventurous spirit.

Many thinkers have accepted Weber’s analysis of the linkage between religious belief and entrepreneurial growth. But this view is not accepted universally. Samuelson criticised Weber’s view on the ground that capitalism also developed in those societies where protestant ethic was “not prevalent”. Hoselitz argued that protestant could not develop industries in France because they were not given political security. It can be concluded in the words of Carol that “ethical values have some effect on entrepreneurial growth but to consider them all in all would be unrealistic”.

Let me know your thoughts about the theory in comments, and subscribe to my newsletter to receive similar articles in your inbox.

The process of performing an internal audit closely parallels the process of performing an external audit. The internal audit requires gathering and assimilating information about the firm’s management, marketing, finance/accounting, production/operations, research and development (R&D), and operation of management information system (MIS). The process of internal audit provides more opportunity for participants to understand how their jobs, departments, and divisions fit into the whole organization. This is of a great benefit because managers and employees perform better when they understand how their work affects other areas and activities of the firm.

Performing an internal audit requires gathering, assimilating, and evaluating information about the firm’s operations. Critical success factors, consisting of both strengths and weaknesses, can be identified and prioritised.

Strategic management is a highly interactive process that requires effective coordination among management, managers of marketing, finance/accounting, production/operation, R&D, and MIS. Although the strategic-management process is overseen by strategists, success requires that managers and employees from all functional areas work together to provide ideas and information. A key to organisational success is effective coordination and understanding among managers from all functional business areas. Through involvement in performing an internal strategic-management audit, managers from different departments and divisions of the firm come to understand the nature and effect of decisions on other functional business areas in the firm. Financial ratio analysis provides a good example of the complexity of relationships among the functional areas of the business. A declining return on investment or profit margin ratio could be the result of an ineffective marketing, poor management policies, research and development errors, or a weak management information system. The effectiveness of strategy formulation, implementation, and evaluation activities hinges upon a clear understanding of how major business functions affect one another.

The internal factors are generally regarded as controllable factors because the company, generally, has control over these factors; it can alter or modify such factors as it’s personal, physical facilities, organization and functional means, such as the marketing mix, to suit the environment.

Within a given industry, why do some companies do better than others? Porter proposed the view that success depends on the competitive advantage. Competitive advantage comes from:

• Efficiency
• Quality of products and services
• Customer responsiveness
• Innovations

Many entrepreneurs run small businesses, political decisions usually have a greater percentage impact on the company’s bottom line. For example, the Presidential Council of Economic Advisors reported in 2009 that small businesses pay up to 18% more per worker than larger firms for the same insurance policy. Without policies directed to correct this disparity, any increase in health care costs will most likely be felt disproportionately by small businesses. For start-up companies, the effect of cost drivers and regulatory requirements can be overwhelming as entrepreneurs try to also balance time demands of branding and building a customer base with complying with financial and regulatory requirements.

How Politics Touches The Concerns Of The Entrepreneur?

Every entrepreneur faces challenges that can affect their future success in growing their business. The National Federation of Independent Businesses has identified the most common concerns as reported on its monthly survey of the economic trends for small businesses. Many of these concerns have a political component that entrepreneurs need to be aware of.

• Inflation – Primarily controlled by the interest rate policies set by the Federal Reserve.
• Poor Sales – Generally attributable to economic conditions which can be the focus of governmental stimulus.
• Interest Rates – A product of the monetary policies of the Federal Reserve.
• Cost Of Labor – Increased through mandates and legal requirements for employee benefits.
• Government Regulation And Red Tape – Touches many areas of operating a small business, including licensure, certification, and permitting processes.
• Competition From Large Businesses – Alleviated in part by government programs directed to help small businesses gain traction and compete more effectively, including rewarding a certain percentage of government contracts to companies that qualify as a small business.
• Quality Of Labor – Partly attributable to politics directed to funding and supporting educational and training initiatives.
• Cost And Availability Of Insurance – Directly related to the integral role politics plays in determining insurance coverage, benefits, and limits in such areas as health care, workers compensation, unemployment insurance, and in a few states, disability insurance.

How Politics Can Send Sunshine Or A Cloud Over Entrepreneurship

The effects of politics on entrepreneurship can be either a ray of sunshine or a dark cloud hanging over the prospects of the ultimate success of the entrepreneur’s venture. Political stances on taxes, regulatory reform, immigration, intellectual property rights, and funding for social and educational programs weigh heavily on the decisions of entrepreneurs to hire employees, expand capital spending, increase inventories, and apt for credit.

Entrepreneurs need to stay on top of the political agendas aimed to boost entrepreneurship through investment tax credits, capital expenditure deductions, and incentives to promote lending to small businesses. For example, the recent 2010 proposal to give businesses a short term one year 100% capital expense deduction is great for s all business ready to reinvest in their business. The hope is that business reinvestment will stimulate the economy, reduce cyclical unemployment, and eventually, bring back strong consumer demand.

Dark clouds from politics can sweep in at any time and have bad or unintended consequences. Sometimes even good intended policies short of their objectives. For example, government pixies to stimulate lending to small businesses can be ineffective because the government fails to recognize that loan demand is down not because of the lack of credit but because small businesses are not applying for loans for the want of customers. Other potential dark clouds that entrepreneurs need to keep a lookout for on the horizon are political decisions regarding Bush tax cuts, cal and trade, and Value Added Taxes (VAT) to reduce the rising budget deficit. However, for the entrepreneur, the biggest challenge in laying down their business plan is managing the uncertainty and cloudy conditions that politics can generate.

It is necessary to realize that sustainable development does not mean any human impact on the environment. Such a situation is impossible to achieve as long as there are people on earth. There is a need to change the socio-economic systems to reduce environmental impacts. It is necessary to reduce the number of resources exploited and used for economic growth and these must be replaced by an emphasis on sustainable development – the qualitative improvement in human welfare.

To achieve this there is a need to bring about drastic changes at global, national and regional or local levels to achieve a globally sustainable future. Sustainable development is a global challenge which must be based on a long term perspective and is required for the entire world’s population, not just a select and privileged few.

Following points reflect the need for sustainable development:

1. Environmental Issues: Most of the environmental issues are related to physical, environmental and human elements in one way or other. A man by the virtue of his intelligence has tried to understand various processes and forces operating in the natural environment. He has made use of these forces of nature to his benefit to satisfy his needs and wants. This has resulted in environmental issues. Today there is a need to tackle these issues.
2. Human Capacity: Human capacity to use these environmental forces and natural resources depends upon his scientific and technological development. Hence, we find that the rate of exploitation of resources and pollution created in this process is much more in the industrialised economies as compared to the industrially underdeveloped economies. The development processes provide comfort and luxuries and human well being.
3. Cost Of Development: Although mankind has enjoyed the fruits of development, in the process of development has paid a heavy price in terms of degraded and polluted environments. The development has resulted due to the exploitation of natural resources. But human ideas of development, greed has resulted in a rapid rate of exploitation of resources.
4. Resources Exploitation: The technology used for the exploitation of resources has given man tremendous capacities to exploit resources beyond human limits. The result is reckless exploitation of resources which resulted in wastage, overexploitation, depletion and degradation of resources, making resource exploitation unsustainable.
5. Resource Consumption: Today many resources are on or near the verge of exhaustion. This becomes a major problem in the case of fossil fuels and minerals resources. These resources are known as fund resources, which mean they are limited. Fossil fuels in particular once used cannot be reused in any economy in future. Another major problem is related to the use of these fossil fuels which are responsible for tremendous amounts of pollution of air.

Other resources like forests, water, air, etc. are known as flow resources and can regenerate. But the rate at which these resources are being exploited is tremendous. Here too the problem is of two-fold. Firstly the time required for the regeneration is far more than the rate at which they are exploited, the best example is the rate of destruction of forests. Secondly, resources like water are not only being consumed on a larger scale but are also being depleted due to pollution and contamination.

Theoretically, the long term result of environmental degradation would be local environments that are no longer able to sustain human populations to any degree. Such degradation on a glob scale could imply the extinction of humanity.

Human actions have proved to be disastrous to the environment. But even today we find certain societies still living in harmony with nature. But in other cases, as stated earlier the developed societies are loving in a polluted and degraded environment. So it is essential that we have to change our ideas and methods of development. The change is essential to have a healthier environment to live in not only for today but also for the generations to come. This planet has been inherited by us. It is our responsibility to keep it as we have inherited for our future generations. We have no right to pass them a polluted environment.

The future development processes need to more rational in their use of natural resources as well as adopting environmentally friendly technologies. It is important to realize that a sustainable future lies in our hands; for which it is necessary to alter our values, beliefs and behaviour only then we will be able to achieve proper sustainable development.