Module 2. Entrepreneurship Theory Overview And Context

Welcome to Module 2!

This module provides an overview of the main entrepreneurship theories and outlines the concept of entrepreneurship, with particular focus on social entrepreneurship. It defines the common personality traits of entrepreneurs and how they exploit new business opportunities. Not only must entrepreneurs be prepared to take risks and face personal and business challenges along to way, but they must also learn to think “outside the box” to increase their likelihood of success.


The instructor of this module is Dolores Kores from the University of Ljubljana.

But don’t worry, entrepreneurship can be learned! So continue along your entrepreneurial path by viewing the videos and reading the contents in this module.

This first topic of module 2 is a short description of the most relevant theories in entrepreneurship such as: psychological, sociological, anthropological, economic, resource-based theories, opportunity-based and theories of innovation.

When we examine an enterprise according to different theories, we can say that all of these views are applicable. The main difference is actually the angle from which the theories try to examine entrepreneurship. It is all about getting acquainted with entrepreneurship in different sciences, and the enrichment of entrepreneurship theories in an interdisciplinary approach.


We also analyse the meaning of social entrepreneurship. Social entrepreneurs solve societal or environmental problems through an entrepreneurial approach. The main difference between ordinary and social entrepreneurship is in governance, social aim and profit distribution. Social entrepreneurship includes different stakeholders in governance, the societal aim is at the same level of importance as financial sustainability and all profit is usually reinvested in the enterprise or in solving a societal problem.

Entrepreneurship –the entrepreneurial function- can be conceptualised as the discovery of opportunities and the subsequent creation of new economic activity, often via the creation of a new organisation (Reynolds, 2005). Behind the theories are three main principles: an economic or business concept (examining the business processes necessary for the development of an enterprise), psychology (disclosing the importance of entrepreneurial individuals and their traits) and sociology (concerning the importance of various social contexts such as social networks, a desire for a meaningful life, ethnic identification social-political factors).

The main challenges of entrepreneurship start with changing business opportunity into business, and include issues such as a lack of resources, cash flows, financing in general, business growth, employees, time management and marketing. On the level of the entrepreneur, the challenge is often self-doubt and failure. Benefits are usually seen after a long time, mostly in a change of society on a local or world level.


Entrepreneurial thinking and behavior are often not rational as expected from business leaders. They are able to make decisions in highly uncertain environments where the stakes and time pressure are high. Entrepreneurs see what others don’t, they don’t fit into the system and they experiment all the time. They usually take advantage of what they already know and try to put it into different contexts in terms of a new market, new product or service. They also don’t have time, therefore they squeeze all the business ideas into quick actions.

Entrepreneurs have varying personalities and they all organise their days in different ways. The common trait of all entrepreneurs is an extremely structured day, in order to make the most of every hour. They usually start early and finish late, no one day is the same and they are able to engage in different positions such as marketing, HR, accounting, finance.

Entrepreneurship can be learned and there are certain personal and business traits that you require. Entrepreneurs have to be prepared to take risks. They also need to learn to think outside the box, which can be achieved through comprehensive and connecting questions such as: What is the problem? What is the question? How does my solution differ from existing solutions? Etc.


A successful entrepreneur needs passion and has to be prepared for a lot of stressful work, constant worry and fast change. There are also some other traits that can help to achieve success, such as focusing on your work, being prepared to learn all the time, putting quality before quantity (which is extremely important in today’s highly competitive world) and having vision. Without vision, nothing will happen. The choice of role model is also important, as are the use of networks and having the right mentor.