Economic Motives Definition, Nature, Purpose And Types

ACTIVELY SHARE — Economic motives are every reason, encouragement, and activity implemented by a person or entity to carry out economic action.

Motive means reason or mover. The ultimate goal of the economic motive is to achieve prosperity. Check out the understanding, as well as the various economic motives and their goals below.

Economic Motives Definition

Economic motive is a reason that encourages someone to carry out economic activities to achieve prosperity. Economic activities are activities carried out by individuals or groups to obtain goods and or services to meet their needs.

Examples of economic motives include a diligent farmer so that his harvest is successful or an entrepreneur promotes his products on television so that his products reach a wider market.

Economic motives are also the things that underlie various economic actions. Economic Action is all human efforts to meet unlimited needs with good considerations based on a priority scale to achieve prosperity.

Needs are human wants that demand to be fulfilled such as eating, drinking, clothing, housing, education, and so on.

Humans who try or work to earn income, it means that they have taken economic action, because humans can use it to meet their daily needs.

Humans try to fulfill their needs starting from the most basic needs (food, clothing, and shelter needs) to higher needs (security, esteem, self-esteem, and self-actualization needs). Economic motives can be extrinsic or intrinsic:

  • Extrinsic motives are motivations that come from outside the individual. Extrinsic motives are mostly support needs. This motif usually arises because of environmental influences. For example, a house or a board is one of the primary needs. However, someone may buy a house with certain prices and criteria for reasons of wanting to get recognition or improve social status in their environment.
  • Intrinsic motive is motivation that comes from within the individual itself without any external encouragement or influence. This motive generally includes basic human needs that are primary, for example, humans will buy food and drinks when they feel hungry.

Economic Motives Definition According to Experts

Economic motives are desires that encourage people to take economic actions or activities. The role of motives to evoke and demonstrate consumer behavior, the following are various economic motives, namely motives for meeting needs, getting profits, social, getting awards, economic power, to politics. Here are some definitions of economic motives according to experts:

1. Schiffman And Kanuk

“Motivation can be described as the driving force between individuals that impels them to action”. That is, motivation can be described as the driving force between individuals that drives them to act. The driving force is caused by the tension that arises due to unfulfilled needs.

2. Robbins (2001:156)

Motivation is the processes that account for individual’s intensity, direction, and persistence of effort toward attaining a goal .

3. Loudon And Della Bitta

“A motif as an inner state that mobilizes bodily energy and directs it in selective fashion toward goals usually located in the external environment”.

This means that the motive is a state that moves energy and physical energy in a person and directs it selectively towards a goal which is usually located in the external environment.

Kinds Of Economic Motives And Their Goals

The ultimate goal of the economic motive is of course so that a person achieves prosperity and is able to fulfill his various needs. Check out the various economic motives and their goals below:

1. Individual Motives

This individual motive is a motive that is based on an internal drive to improve the economy and also prosper oneself and their family. Some of these individual motives include the following:

a. Motives To Meet Needs And Improve Living Standards

This motif has a clear purpose, namely to meet the needs of life and achieve prosperity. To maintain their survival, everyone has a need, both in the form of goods and services that must be met.

This relates to consumptive behavior which is discussed in the book on Individual Consumer Behavior which discusses various factors that cause this behavior to occur.

Usually in a need it is not limited, while the means of satisfying it is limited. Therefore, everyone must have a careful calculation in order to get the results in accordance with his expectations.

The human tendency is always to achieve prosperity for his life. This prosperity can be interpreted as a condition in which he is able to fulfill most of his life.

For example, someone will work hard to get money which can later be used to meet their daily needs. If the income is not sufficient then try to get additional income by carrying out other economic activities.

Another example is an employee changing jobs or working harder to get a promotion so as to increase his income. Human needs are generally divided into three types, namely:

  • Primary Needs: Primary comes from the word primus which means first. So primary needs are the main or basic needs that arise instinctively so that humans can survive. If these needs are not met, then human life is threatened. Primary needs consist of food (food), clothing (clothing), and board (place to live). Without food, humans will die. Without food and clothing, humans will be susceptible to disease.
  • Secondary Needs, namely needs that are complementary or additional. This need is not like a primary need that is absolute. Usually this need will arise naturally after all primary needs can be met. Because, the function of secondary needs is as a supporter of life. If these needs are not met, human life is not threatened. In addition, the secondary needs of each person are also different. Examples of secondary needs include bicycles, internet connections, smartphones, entertainment, and others.
  • Tertiary Needs, Tertiary comes from the word teririus which means third. Tertiary needs are needs that can be met if the primary and secondary needs have been met. Usually tertiary needs serve to increase social status. Examples of tertiary needs are vacations abroad, jewelry, branded clothing, luxury vehicles, and luxury homes.

b. Profit Motive

This motive is clearly the goal, namely to get profit. Profits can be in the form of money or otherwise. In everyday life, we often pursue profit. Most of the profits pursued are in material form.

This motive is an impulse that arises with the aim of getting additional benefits, both in the form of money and goods. By getting a profit, it is hoped that a person’s wealth will then increase and he can maintain his life better.

For example, a clothing merchant sells clothes of very good quality, at affordable prices, and serves them in a very friendly manner. Many people will then be interested in buying so that he gets a large profit or profit.

Sharing other strategies to gain profits is discussed in the book Strategy to Multiply Profits of Distributor Companies by Frans M. Royan below.

c. Motive For Earning Awards

This motive is done so that someone is appreciated by others. Appreciation itself is one of the motivations for individuals to feel that they exist. Appreciation from other people will give satisfaction to the perpetrators of economic activities.

The award in question is not only getting a compliment or a charter but also getting a higher social status from the surrounding community. For example: In a manager or entrepreneur who continues to carry out economic activities with hard work even though he is in his profit and prosperity.

This he did so that he appeared as a reliable and respected manager. These achievements often lead to awards from the government and business circles.

Another example is an entrepreneur offers his business franchise to others so that other people sell their products and reduce competition as well. A restaurant entrepreneur regularly opens new branches in other areas to expand his business network and increase his economic power.

d. Motive Of Gaining Power

This motive aims to gain power. Power does not only exist in state politics, but can also exist at the level of friends or family. According to the philosopher Nietzsche, everyone has the will to power. At least control himself.

For example, a student treats his friend not to be nominated for class president. Being attractive is used as an excuse to be able to control his friends’ opinions because he doesn’t want to be nominated as class president.

It could also be the other way around, attracting to be nominated. In essence, treating friends is done to control the voice of friends. An entrepreneur offers his business franchise to others so that other people sell their products and reduce competition.

A restaurant entrepreneur regularly opens new branches in other areas to expand his business network and increase his economic power

e. Social Motive 

Social motives as economic motives are actually problematic. Because not all social actions are economic actions. But all economic action is social action. The scope of the term “social” itself is broader in meaning than “economic”.

Here, we understand social motives as motives for helping fellow human beings only. For example, a student starts a business, then hires his friends as employees. His motive was to help his friends.

Opening a business and employing his friends is one form of economic motive. In addition, an entrepreneur establishes a cooperative for the benefit of its members based on social motives.

It should be underlined here, according to some economists, social motives are categorized into non-economic motives. Economic actions are just one type of social action. Therefore, economic action should involve social considerations.

2. Organizational Motive

Organizational or corporate motives are economic motives based on the desire of a group to improve the economic conditions of members of the group by working together. Some of the motives of this organization include:

a. Goods Production Motive

A company seeks to produce goods or services at low prices with good quality. It aims to get a certain portion in the market in a sustainable manner. Production itself is an activity that will create, produce, realize and add value to goods or services.

In terms of economics, production is an activity to add or utility to goods and services, to meet the needs of consumers or buyers.

This production will produce a good or service, which is called a product and has a selling value until it finally produces a profit or profit.

Products resulting from production can be in the form of agricultural products, livestock, fisheries, design products and so on. Production can also help add value to the goods, for example in the fabrics produced and produce a product in the form of clothing.

When producing a good or service, producers will think about the needs of consumers, so the process of this production has the aim of providing goods or services to consumers in need, in order to improve the welfare of society.

This production process also has the aim of increasing income for producers, increasing employment opportunities, building relationships and maintaining continuity between producers and consumers.

b. Profit Motive

The main reason for a company to carry out economic actions is to make a profit. With these advantages, an organization or company can carry out their economic activities or activities on an ongoing basis.

Steps that a company can take to increase profits include:

  • The Right Product Price – The price of the product is very influential on the amount of profit that will be obtained. When you want big profits with small capital, the first thing to do is set the right price.
  • Reduce Expenditures – Expenditures in the production and distribution process are very influential on profits. Therefore, calculate the expenses that are not too important properly. For example, if your place of business is only busy at certain times, you can hire part-time employees to reduce salary costs. So, the company’s profit will not be wasted too much and get a big profit.
  • Multiply Products – Every product that is produced must have a profit from its purchase price. The more products that are sold or produced, the greater the profit that will be obtained. To get a big profit with a small capital, it can be done by multiplying the product at the same time.
  • Expanding Network – When the product being sold is in high demand, you can do business with a franchise system. With this system, businesses can grow with the capital paid for by the people who buy them. So you don’t need to spend a lot of capital but will get profits every month.
  • Appropriate MarketingMarketing of a product affects potential consumers who will buy the product. If the promotion is right, there will be many consumers who come to try the products you sell. There are so many ways to promote that can be done. Choose a promotional method with a small cost but can attract many consumers.
  • Take Other Business Opportunities – Many business people today don’t just run one business to get a lot of profit. You can also use this method to get a lot of profit. For example, if you open a fresh fish business, then you can also provide the spices needed to process the fish, or make fish-based preparations that are ready to be consumed.

c. Motives To Maintain Continuity

Companies Although there are many who build companies, but not all of them can maintain their existence. This is the reason for all companies to be able to always try to generate profits in a sustainable manner so that the company’s activities or activities can continue to operate.

Understanding the meaning of economic motives is not as difficult as imagined. However, a comprehensive understanding of economic motives includes not only the meaning, but also the types or types and purposes. I hope this information is helpful!

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