Motivation: is about what makes people do things. (What makes people work) 

Maslow’s Need Hierarchy Theory of Motivation!

1. Physiological Needs:

These needs are of the lowest-order and most basic needs of human beings. These involve satisfying fundamental biological drives, such as the need for food, air, water, cloth, and shelter.

2. Safety and Security Needs:

The second level of need in Maslow’s hierarchy is emerged once physiological needs are met. Safety needs involve the need for a secure environment, free from threats of physical and psychological harm. These needs find expression in such desires as economic security and protection from physical dangers.

3. Social Needs:

Man is social animal. These needs, therefore, refer to belongingness or affiliation. All individuals want to be recognized and accepted by others. Likewise, an entrepreneur is motivated to interact with fellow entrepreneurs, his employees, and others.

4. Esteem Needs:

These needs refer to self-esteem and self-respect. These include such needs that indicate self-confidence, achievement, competence, knowledge, and independence. 

5. Self-Actualization:

The final step under the need hierarchy model is the need for self-actualization. This refers to self- fulfilment. The term ‘self- actualization’ was coined by Kurt Goldstein and means to become actualized in what one is potentially good. An entrepreneur may achieve self-actualization in being a successful entrepreneur.

In Maslow’s above need hierarchy theory, human needs are arranged in a lowest to the highest order. The second need does not dominate unless the first is reasonably satisfied and the third need does not dominate until the first two needs have been reasonably satisfied. This process goes on till the last need.

This is because man is never satisfied. If one need is satisfied, another need arises. Once a need is satisfied, it ceases to be a motivating factor. For entrepreneurs, it is mainly social, esteem, and self-actualization needs which motivate them to work more and more for satisfying them.

McGregor – Theory X and Theory Y 

Theory X: Managers believe staff are lazy, hate work, untrustworthy and resistant to change

Theory Y: Managers believe that workers can enjoy work, trustworthy and can be flexible.

Evaluation:  Too Simplistic

  • Theory X Mangers create a climate of hostility within the firm
  • Theory Y – A modern approach. Recognises value of staff and seeks to nurture their desire to work hard and develop.