ARTICLE
2: THE MOTIVATION TO BECOME AN ENTREPRENEUR
Introduction
Herron and Sapienza (1992, p. 49) stated, “Because
motivation plays an important part in the creation of new organizations,
theories of organizational creation that fail to address this notion are
incomplete”. More recently, Kuratko et
al. (1997) reported that the lack of empirical
research into entrepreneurial motivation was still evident.
Being
an entrepreneur, one who is self‐employed and who
starts, organizes, manages, and assumes responsibility for a business, offers a
personal challenge that many individuals prefer over being an employee working
for someone else. Entrepreneurs accept the personal financial risks that go
with owning a business but also benefit directly from the potential success of
the business. Being an entrepreneur is often viewed as an aversive career
choice where one is faced with everyday life and work situations that are
fraught with increased uncertainty, impediments, failures, and frustrations
associated with the process of new firm creation (Campbell,
1992).
Not surprisingly, many researchers have investigated the motivation to become
self‐employed. What is it about certain
people that drives them to take on the risk, the uncertainty and the
independent structure of business ownership?
In
this paper we examine key components of motivation that may contribute to the
decision to become self‐employed. We begin with a review of the
evolution of research on entrepreneurial motivation starting with content‐based
theories of motivation. We then explore the current state of the more recent
process‐oriented research on the motivation to
become an entrepreneur. Three constructs that play an important role in the
intention to become self‐employed are proposed as part of our
model of entrepreneurial motivation. To test the model, four hypotheses are
suggested. An exploratory research study is then presented utilizing a survey
instrument that was presented to 112 undergraduate business students. The
findings of our hypothesis testing are discussed with attention given to the
limitations and implications of this study.
The
topic of motivation in the entrepreneurship literature has evolved along a path
similar to that of the organizational psychology field. From an organizational
psychology perspective, theories of motivation have progressed from static,
content‐oriented theories to dynamic, process‐oriented
theories, a framework suggested by Campbell et
al. (1970). Content theories search for the specific things
within individuals that initiate, direct, sustain, and stop behavior. Process
theories explain how behavior is initiated, directed, sustained, and stopped.
Organizational
psychology research focused on developing and testing content (i.e. need)
theories of motivation during the 1950s and early 1960s. According to Landy (1989, p. 379), “data supportive of need
theories have been infrequent. Damaging data are commonplace.” In a general
sense, focusing on personality profiles of people to explain behaviors, the
personological perspective, has fallen out of favor. For over 30 years,
psychologists have accepted Mischel's (1968) explanation
that behavior results from the interaction between the person and the
situation, a dynamic process (Shaver and
Scott, 1991).
According
to Landy (1989), by the mid‐1960s
process models were preferred, beginning with Vroom's
(1964) expectancy
theory. This was supplanted by Locke's
(1968) goal‐setting
theory and later by Bandura's (1977) self‐efficacy theory.
Early
entrepreneurial research followed a similar path, focusing on identifying
traits and characteristics that distinguished entrepreneurs from the general
population, rather than developing process‐based models.
Beginning with McClelland (1961), who argued that a high need for
achievement was a personality trait common to entrepreneurs, a great deal of
research has focused on characteristics of entrepreneurs (Churchill
and Lewis, 1986; Shaver
and Scott, 1991).
In
spite of the large number of studies examining personality traits of
entrepreneurs (Churchill and Lewis, 1986; Timmons,
1999),
results are still mixed and inconclusive (Herron and
Sapienza, 1992; Shaver
and Scott, 1991).
Yet studies continue (Stewart et al., 1998). Low
and MacMillan (1988, p. 148) commented:
Being innovators and idiosyncratic,
entrepreneurs tend to defy aggregation. They tend to reside at the tails of
personality distributions, and though they may be expected to differ from the
mean, the nature of these differences are not predictable. It seems that any
attempt to profile the typical entrepreneur is inherently futile.
Gilad and Levine (1986) proposed two
closely‐related explanations of entrepreneurial
motivation, the “push” theory and the “pull” theory. The “push” theory argues
that individuals are pushed into entrepreneurship by negative external forces,
such as job dissatisfaction, difficulty finding employment, insufficient
salary, or inflexible work schedule. The “pull” theory contends that
individuals are attracted into entrepreneurial activities seeking independence,
self‐fulfillment, wealth, and other desirable
outcomes. Research (Keeble et al., 1992; Orhan and Scott, 2001) indicates that
individuals become entrepreneurs primarily due to “pull” factors, rather than
“push” factors.
Entrepreneurship
research has also attempted to identify the situational and environmental
factors that predict entrepreneurial activity, such as job displacement,
previous work experience, availability of various resources, and governmental
influences. However, these empirical studies of contextual factors have found
low explanatory power and predictive ability (Krueger et
al., 2000).
Logically,
there is no reason to expect a direct relationship between these external
forces and entrepreneurial activity. For example, job displacement may be a
triggering event leading to entrepreneurship. However, displaced workers will
not pursue this career unless there is a more direct, process‐oriented
linkage. Although external forces may provide a more conducive environment
supporting entrepreneurship, it may be just as likely that other career option
may be pursued.
Sexton (1987) stated that much of the then‐current
research was fragmented and unrelated. He felt that the transfer of up‐to‐date
research findings from other areas was needed to contribute to the development
of paradigms and constructs that lead to the development of convergent
theories. Bird and Jelinek (1988) mentioned the
need for a behavioral, process‐oriented model of
entrepreneurship. Calls for frameworks grounded in well‐established
theory are regularly echoed (Jelinek and
Litterer, 1994;MacMillan and Kartz, 1992).
As
a result, many of the entrepreneurship models advanced in recent years are
process‐oriented cognitive models, focusing on
attitudes and beliefs and how they can predict intentions and behaviors. Human
endeavors, especially complex activities such as new venture initiation, are a
result of people's cognitive processes. Humans are able to think about possible
future outcomes, decide which of these are most desirable, and whether it is
feasible to pursue attaining these outcomes. It is not reasonable to expect
people to pursue outcomes that they perceive to be either undesirable or
unfeasible.
Many
cognitive models explaining the motivation to found a new enterprise are
analogous to Vroom's (1964) expectancy framework. Although
these models use different terminology and build on different theory bases,
Vroom's expectancy model can be used to demonstrate the commonalities between
these disparate models.
The
Vroom model explains that an individual will choose among alternative behaviors
by considering which behavior will lead to the most desirable outcome.
Motivation is conceptualized as the product of expectancy, instrumentality, and
valence. Expectancy is analogous to measures such as perceived feasibility and
self‐efficacy used in other models predicting
entrepreneurial intentions. Despite subtle, technical differences in these constructs,
they are frequently operationalized in similar ways. For example, expectancy,
self‐efficacy, and perceived feasibility have
all been measured by responding to the question: How confident are you that you
can perform the task?’ by circling the appropriate percentage range on a
survey.
Mone (1994) discussed two measures of self‐efficacy,
process and outcome. The former refers to people's confidence to successfully
perform a task, whereas the latter refers to people's confidence to achieve an
outcome. The first measure would be analogous to expectancy; the latter would
be analogous to the product of expectancy and instrumentality. The product of
instrumentality and valence is analogous to a wide variety of measures used in
various organizational psychology or economic decision models predicting
entrepreneurial intentions, such as perceived desirability, outcome
expectations, net benefits, and perceived utility.
Vroom's (1964) expectancy model establishes a
common thread connecting many process‐oriented explanations
of entrepreneurial motivation. Current process models are implicitly or
explicitly grounded in this basic conception: an individual's intentions to
become an entrepreneur are predicted by these two questions:
1. is entrepreneurship
desirable to me? (i.e. does it lead to desired outcomes?); and
2. is entrepreneurship
feasible for me? (i.e. do I have what it takes to succeed as an entrepreneur?).
Current
process models of entrepreneurial motivation
Baumol (1990) suggested that entrepreneurs are
motivated by the reward structure in the economy. This economic perspective on
new venture initiation focuses on the usefulness, utility, or desirability of
an entrepreneurial career. Campbell's
(1992) economic
decision model compares the expected net present benefits of entrepreneurship
relative to the expected gains from wage labor. For both entrepreneurship and
wage labor, Campbell multiplied probability of success times average income to
determine expected benefits.
Praag and Cramer (2001) found that
people would become entrepreneurs if the expected rewards surpass the wages of
employment. Because expected rewards depended on assessments of individual
ability and attitudes towards risk, perceptions of entrepreneurial feasibility
were included. Thus the model, like expectancy theory, finds entrepreneurial
activity to be a function of feasibility and desirability. Levesque et
al. (2002) examined the choice between employment and self‐employment
in a utility‐maximizing model that changes according
to the individual's age (i.e. stage of life).
These
economics‐based models (Campbell,
1992; Praag and Cramer, 2001; Levesque et
al., 2002)
explicitly consider the role of risk in the decision to become an
entrepreneur. Rees and Shah (1986) found that the
variance of earnings for self‐employed individuals
was triple that of individuals working for others, leading to the conclusion
that risk‐averse individuals are less likely to
pursue self‐employment. Douglas
and Shepherd (1999, p. 231), using anticipated risk as a predictor,
stated “The more tolerant one is of risk bearing, the greater incentive to be
self‐employed.”
Other
recent research is based on an organizational psychological framework. Bird
(1988),
stressing the importance of entrepreneurial intentions as a precursor to new
venture creation, called for development of a behavioral, process‐oriented
model of entrepreneurship.
In
a theoretical discussion of the psychology of new venture creation, Shaver
and Scott (1991) emphasized that new ventures emerge because of
deliberate choices made by individuals. They then examined the immediate
antecedents of choice:
- Can I
make a difference? (i.e. feasibility).
- Do I
want to? (i.e. desirability).
Arguably
the most widely and successfully applied theories for predicting behavioral
intention are the theories of reasoned action (Ajzen and
Fishbein, 1980; Fishbein and
Ajzen, 1975) and planned behavior (Ajzen, 1988, 1991). The theory of
planned behavior (TPB) is essentially an extension of the theory of reasoned
action (TRA) that includes measures of control belief and perceived behavioral
control. The theory of planned behavior (Ajzen, 1985)
was developed to account for the process by which individuals decide on, and
engage in, a particular course of action. Kolvereid (1996) demonstrated
that the Ajzen (1991) framework
is a solid model for explaining or predicting entrepreneurial intentions. Ajzen (1991) states that a person's
intention is the immediate antecedent of behavior. Intent to perform a
behavior, in turn, is a function of three variables:
1. attitude toward the
behavior, which refers to the degree to which individuals perceive the
attractiveness of the behavior in question. In general, a person who believes
that the performance of a given behavior will, with high probability, lead to
mostly positive outcomes will possess a favorable attitude toward that
behavior;
2. subjective norm, which
refers to the perceived social pressure to perform the behavior in question.
Perceived social norms is a measure of social support of the behavior by
significant others, such as family, friends, and other role models and mentors;
and
3. perceived behavioral
control (i.e. a self‐evaluation of one's own competence with
regard to the task or behavior). Perceived feasibility is a measure of
behavioral control, similar to Bandura's
(1986) self‐efficacy
construct.
Thus,
the TPB provides an account of the way in which attitudes, subjective norms,
perceived behavioral control, and behavioral intentions combine to predict
behavioral performance. Depending on the difficulty of engaging in the
behavior, perceived behavioral control may also exert a direct effect on
behavioral performance. Ajzen's theory of planned behavior has wide acceptance
in many behavioral science disciplines and has been used empirically in a
variety of settings to predict and understand behavioral intentions (Bansal, 2002; King, 2003; Masalu and Astrom, 2001; Rhodes,
2002).
Individuals'
behavioral intentions are, according to Shapero's (1982) model
of the entrepreneurial event, also dependent on two main factors: perceived
credibility (perceived feasibility) and perceived desirability. Shapero and Sokol (1982) conceptualized
perceived desirability as the personal attractiveness of starting a business,
and perceived feasibility as a perceptual measure of personal capability with
regard to new venture creation. In addition, Shapero adds a third predictor
variable, propensity to act. This measure of volition or proactiveness is
closely related to locus of control. Both Shapero and
Sokol (1982) and Krueger
(1993) argued
that perceived desirability, perceived feasibility, and propensity to act are
associated with entrepreneurial behavioral intentions. Moreover, Erikson
(2001) found
that the model explained entrepreneurial intentions quite well.
The
Azjen and Shapero models consider self‐efficacy, a proxy for
feasibility, an important predictor. Chen et
al. (1998) found entrepreneurial self‐efficacy
a reliable measure to differentiate between business founders and non‐founders.
Krueger et al. (2000) compared the
predictive validity of the Ajzen and Shapero‐Krueger models, using
a sample of 97 senior university business students. Regression analysis using
perceived desirability, subjective norms, and perceived feasibility to predict
intentions supported Ajzen's theory of planned behavior, with adjusted R2 of
0.350 (P<0.0001) for the overall model. However, the subjective norms
predictor variable was not significant in the regression. Regression analysis
using perceived desirability, propensity to act, and perceived feasibility to
predict intentions fully supported the Shapero‐Krueger model, with
adjusted R2 of 0.408 (p<0.0001). The
Shapero‐Krueger model used Seligman's
(1990) learned
optimism construct to measure propensity to act.
Our
proposed model of entrepreneurial motivation
We
started with the Shapero‐Krueger framework, as described in Krueger et
al. (2000), also using self‐efficacy as a proxy
for perceived feasibility. Borrowing from the previously discussed economic
models (Campbell, 1992; Praag and
Cramer, 2001;Levesque et al., 2002),
we substituted perceived net desirability for perceived desirability, believing
that people may be motivated to become entrepreneurs if they believe self‐employment
is more likely than working for others to lead to valued outcomes. It seemed to
us that the motivation to become an entrepreneur is driven by the difference
between the desirability of self‐employment and the
desirability of working for others.
We
also operationalized Shapero and Krueger's propensity to act differently. We
felt that an individual's willingness to accept a moderate, calculated risk
would be the best indicator of this propensity. We recognized that not all
people viewing themselves as efficacious, and seeing self‐employment
as a path to acquiring desirable outcomes, intend to become self‐employed.
To act on their perceptions of feasibility and net desirability, people must be
willing to bear the moderate, calculated risk intrinsic to self‐employment.
This is consistent with the economics‐based models discussed
above (Campbell, 1992; Douglas and
Shepherd, 1999,Praag and Cramer, 2001; Levesque et
al., 2002),
which all included risk as a predictor.
We
view the decision between a career of self‐employment or working
for others as a rational three‐part process in which:
1. Individuals compare
the desirability of self‐employment with the desirability of
working for others.
2. Individuals assess
whether they possess the requisite knowledge, skills, and abilities to perform
the tasks and activities necessary to become an entrepreneur.
3. Individuals determine
whether they are willing to accept the inherent risk of entrepreneurial
activity.
People
with a sense of entrepreneurial self‐efficacy may be drawn
to self‐employment's desirable opportunities and
benefits, compared to the availability of these benefits obtained through
working for others. If they also can accept the intrinsic risk of self‐employment,
they are likely to act on these perceptions by forming intentions and goals for
self‐employment.
The
current study therefore represents a new paradigm for process‐oriented
entrepreneurial motivation research drawing upon well‐grounded
theory. It facilitates a needed convergence of frameworks on the motivational
intention to become an entrepreneur. This model of entrepreneurship motivation
introduces new constructs and uniquely combines them in specifying that the
intention to become an entrepreneur is a function of these three variables: the
perceived net desirability of self‐employment (NDSE), the
perceived feasibility (self‐efficacy) of self‐employment
(SE), and tolerance for risk (TR). Our model is depicted graphically in Figure 1. Our model addresses a long‐standing
call in the entrepreneurial literature for the development of behavioral,
process‐oriented models of entrepreneurship that
are well‐grounded and transfer up‐to‐date
research findings (Jelinek and Litterer, 1994; MacMillan
and Kartz, 1992; Sexton,
1987).
To
test our model, we hypothesize as follows:H1. There is a positive
relationship between an individual's entrepreneurial self‐efficacy
(SE) and his or her intention to become an entrepreneur. H2. There
is a positive relationship between an individual's tolerance for risk (TR) and
his or her intention to become an entrepreneur. H3. There is a
positive relationship between an individual's net desirability for self‐employment
(NDSE) and his or her intention to become an entrepreneur. H4.
There is a positive relationship between an individual's net desirability for
self‐employment (NDSE), entrepreneurial self‐efficacy
(SE) and tolerance for risk (TR) and his or her intention to become an
entrepreneur. H1 through H3 suggest that each
of the three independent variables in the model separately explain an
individual's entrepreneurial intentions. H4 suggests that all
three independent variables together (our model) significantly explain an
individual's intention to become an entrepreneur.
This
section examines the methodology used in the present study, including sample
data and variable measures, and research design.
Sample
data and variable measures
Sample
data. We
began this research with a survey instrument consisting of 100 questions, many
of which dealt with parameters outside the scope of the present research. We
administered this survey to 112 junior and senior undergraduate business students
at Florida Gulf Coast University (FGCU). Later, the survey was reformulated to
be more focused, reducing the total number of questions from 100 to 26. The
final sample for this study consisted of the responses to the 26‐question
survey by 115 junior and senior undergraduate business students at FGCU, and
was administered in January 2001. Surveys were completed anonymously during
regular class time, with a response rate of 100 percent. Student respondents
were close enough to graduation to contemplate important career choices, such
as that of self‐employment versus working for others.
Dependent
variable. The
dependent variable in our model is entrepreneurial intentions. The survey
instrument defined entrepreneurship as “being self‐employed
in your own business.” Chen et
al. (1998) established six measures of entrepreneurial
intentions using the questions listed below:Q1. How interested are you
in becoming an entrepreneur? Q2. How much have you considered
becoming an entrepreneur? Q3. How much have you already prepared to
become an entrepreneur? Q4. How likely are you to become an
entrepreneur? Q5. How likely are you to work very hard at becoming
an entrepreneur? Q6. How soon are you going to become an
entrepreneur? We included all six measures of intentions in our initial test of
the model. Later, we reduced the length of the survey instrument. We
accomplished this reduction in length in part by reducing the number of
questions designed to measure entrepreneurial intentions from six to one. This
reduction was justified based on the results of Cronbach Alpha analysis.
Cronbach Alpha is a model of internal consistency, based on the average inter‐item
correlation. Crano and Brewer (1986) suggest
that the degree of internal consistency is considered acceptable if the Alpha
coefficient is 0.75 or better.
Table I shows the impact on reliability
(Alpha) of removing each of the questions, 1 through 6, one at a time. It is
clear from this analysis that question 6 is not internally consistent with
questions 1 through 5. The overall Alpha increases to an acceptable level,
0.9175 when questions 1 through 5 are included and question 6 is removed.
These
results suggest that questions 1 through 5 create a unitary construct that
measures entrepreneurial intentions. Based on these results, and our desire to
reduce the length of our survey to improve the accuracy of subject responses,
we selected question 4 (How likely are you to become an entrepreneur?) as our
measure of the dependent variable entrepreneurial intentions.
Independent
variables.
The model includes three independent variables. The first independent variable
is entrepreneurial self‐efficacy, which was measured by one
question designed to assess an individual's self‐confidence in his or
her ability to perform the tasks and activities necessary to become an
entrepreneur. The second independent variable was an entrepreneur's tolerance
for risk (TR). Tolerance for risk was determined by asking pointedly “To what
extent are you willing to take a moderate, calculated risk to get ahead?” The
third independent variable in the model is net desirability to become self‐employed
(NDSE). The computation and significance of this variable deserves special
attention.
The
variable net desirability to become self‐employed (NDSE) was
calculated as shown in Figure 2. The decision between a career of self‐employment
or working for others may be viewed as a rational process in which individuals
compare the relative desirability of each option. If an individual believes
self‐employment is more likely than working
for others to lead to valued outcomes, then he or she is more likely to be
drawn to self‐employment.
A
review of the literature revealed five outcomes emphasized as criteria in the
decision between self‐employment or being employed by others:
income potential; financial security; independence; need for achievement; and
escape from corporate bureaucracy. Using an expectancy (Vroom,
1964)
framework, we hypothesized that the desirability of self‐employment
(DSE) is related to the product of, first, importance of desired outcomes and
second, the probability of attaining these outcomes through self‐employment.
In a similar vein, desirability of working for others is obtained by multiplying
importance of desired outcomes by the probability of attaining these outcomes
through working for others (DWO). Net desirability to become self‐employed
(NDSE) was then obtained by subtracting desirability of working for others
(DWO) from desirability of self‐employment (DSE).
After
identifying and computing variables necessary for evaluating the efficacy of
the model, we tested the model, as previously described in Figure 1. We used regression analysis to assess
the ability of the model to explain self‐employment intentions,
the dependent variable. As we test the model using regression, the appropriate
comparative diagnostic is the Adjusted R2.
Model
results
Results
are presented in Figure 3 and Table II. Figure 3 shows significant and complete
support for the model. The Adjusted R2 for the
regression was 0.528 (p<0.001). A discussion of the findings of each
of the four model hypotheses follows.H1. There is a positive
relationship between an individual's entrepreneurial self‐efficacy
(SE) and his or her intention to become an entrepreneur. It is apparent
from Table II that the
dependent variable intentions was significantly positively correlated with the
independent variable self‐efficacy with a significant (0.001)
Pearson correlation coefficient of 0.669. Higher entrepreneurial self‐efficacy
was associated with a higher intention to engage in entrepreneurial activity.
In addition, the model's link between self‐efficacy and
intentions possessed significant explanatory power, with a t‐statistic
of 7.116 (p<0.001).H2. There is a positive relationship
between an individual's tolerance for risk (TR) and his or her intention to
become an entrepreneur. An individual's intention to become an entrepreneur was
significantly positively correlated with the independent variable tolerance for
risk (TR). A higher entrepreneurial TR was associated with a higher likelihood
to become an entrepreneur with a significant Pearson correlation coefficient of
0.480 (p < 0.001). In addition, the model's link between TR and
intentions possessed significant explanatory power, with a t‐statistic
of 2.476 (p= 0.015), demonstrating that higher TR led to a higher
likelihood that an individual would engage in entrepreneurial activity.H3.
There is a positive relationship between an individual's net desirability for
self‐employment (NDSE) and his or her
intention to become an entrepreneur. An individual's intention to become an
entrepreneur was significantly positively correlated with the independent
variable net desirability for self‐employment (NDSE).
Higher NDSE was associated with a higher likelihood to become an entrepreneur
with a significant Pearson correlation coefficient of 0.488 (p<0.001).
In addition, the model's link between NDSE and intentions possessed significant
explanatory power, with a t‐statistic of 3.032 (p =
0.003), demonstrating that higher NDSE led to higher aspirations toward
entrepreneurial activity.H4. There is a positive relationship between an
individual's net desirability for self‐employment (NDSE),
entrepreneurial self‐efficacy (SE) and tolerance for risk
(TR) and his or her intention to become an entrepreneur. Figure 3 summarizes the overall findings of
our model. The test of the overall model resulted in an adjusted R2 of
0.528 (p<0.001) indicating strong support for the overall model.
Discussion
We
can understand why the intentions construct validated by Chen et
al. (1998) failed to form a unitary construct in our study.
The first five questions asked students whether they had plans, aspirations, or
intentions to eventually become entrepreneurs, and these were highly correlated
with each other. The sixth question focused instead on how soon they would act
on those plans. Clearly, the respondents saw the eventual intention of
entrepreneurship as an issue separate and unrelated to their timing to initiate
this action. For these students, questions regarding whether they had
entrepreneurial intentions were addressing a quite different issue than the
question addressing their time frame for taking such an action.
One
of the most significant findings of this study was the statistical support for
the variable net desirability for self‐employment (NDSE).
Previous organizational psychology‐based research based
has investigated the usefulness of the perceived desirability of self‐employment
on the intention to engage in entrepreneurial activity. These studies, however,
did not use a “net” variable to focus on the difference between the
desirability of self‐employment and the desirability of
working for others.
As
hypothesized, the respondents in this study formed entrepreneurial intentions
if they considered themselves to be efficacious and they anticipated positive
outcomes from entrepreneurship. We also found that an individual's tolerance
for risk (TR) had a significant influence on his or her intention to engage in
entrepreneurial activity. Even though an individual might find engagement in
entrepreneurial activity desirable and has the self‐confidence
to do so, it was also important that that person have a relatively high
tolerance for risk to engage in such activity.
The R2 for
this model was 0.528; such strong explanatory power is rare in the literature
explaining entrepreneurial behavior. Kruegeret al. (2000) found R2 of
0.350 for the Ajzen theory of planned behavior and R2 of
0.408 for the Shapero‐Krueger model. In comparison it should
be noted that trait or attitude measures typically measure 10 percent of
variance in behavior (Ajzen, 1987).
Our
sample consisted entirely of undergraduate business students. However, other research
(Audet, 2000; Krueger et
al., 2000)
has also relied on student surveys to measure entrepreneurial intentions. Our
primary goal was to better understand these students' decisions to become self‐employed
or work for others. This study was not a simulation using students to predict
the behavior of managers or other non‐student populations.
Rather, this was a study of people actually beginning to face career decisions.
However, they are students – we cannot be certain that their intentions are
durable and clear. Also, our findings may not be generalizable to non‐student
populations.
This
research did not examine the role of negative motivations, or “push” factors.
As mentioned above, “push” factors appear to be less important than “pull”
factors in explaining the motivation to become an entrepreneur. Also, we
believe “push” factors are less significant to our sample of young college
students than to the general population. Because of the students' lack of prior
work experience, dissatisfaction or involuntary separation from previous
employment would not have been an important issue. Accordingly, our findings
may not generalize to non‐student populations with greater levels
of work experience.
The
cross‐sectional rather than longitudinal
design of the study raises the usual caveats regarding lack of causal evidence.
However, cross‐sectional research designs are
frequently used and considered acceptable in this type of research (Ajzen, 1987).
Finally,
a limitation of any survey research is the inability to ask follow‐up
questions and explore in more depth the reasoning behind any finding. The
inclusion of qualitative interviews and/or focus group sessions could therefore
provide rich explanatory information that could add value to the survey data.
According
to Timmons (1999), America has created over 34 million
new jobs since 1980, while the Fortune 500 lost over 5 million
jobs. Timmons further reported that, since 1980, entrepreneurs have created
over 95 percent of the wealth that exists in America today. For these reasons,
understanding why people make intentions to become entrepreneurs is becoming
increasingly important for educators and policy makers.
This
research proposed a new model of entrepreneurship motivation. Introduced was
the construct net desirability for self‐employment, which was
operationalized as the difference between the desirability of self‐employment
compared to the desirability of working with others. Tolerance for risk was
also operationalized uniquely in the model as an indicator of the propensity to
act. Together with the construct of perceived feasibility (self‐efficacy)
a new model of motivational intentions was proposed. The results indicate that
tolerance for risk, self‐efficacy and perceived net desirability
significantly predict self‐employment intentions. Further, the
findings illustrated that when combined these three variables provide a
stronger indication for the intention to become an entrepreneur.
This
research study furthers our understanding of what motivates someone to become
an entrepreneur by expanding on the process models of motivation that have been
offered by Ajzen (1991), Shapero (1982) and others that have
explored entrepreneurial intentions. The results have important implications
for those who have the opportunity to guide and influence career choices and
provide career preparation.
We
suggest educators, policy makers, and other wishing to enhance entrepreneurial
activity focus first on increasing entrepreneurial self‐efficacy.
According to Bandura (1986), self‐efficacy in an
activity such as entrepreneurship develops through four processes:
1. enactive mastery or
repeated performance accomplishments;
2. vicarious experience
or modeling;
3. verbal persuasion; and
4. autonomic or
physiological arousal.
Educators
may also point out the relative merits of self‐employment versus
working for others. A common misconception is that the vast majority of small
businesses fail within their first few years. This has a chilling effect on
perceptions of outcome expectations. Yet, a large‐scale study of the
eight‐year destiny of small firms (Kirchhoff,
1994)
found that only 18 percent of all new venture initiations resulted in business
failures with losses to creditors. In contrast, 28 percent survived under their
original ownership and another 26 percent continued under ownership changes. To
stimulate entrepreneurship, perhaps educators should remind students of the
high earnings potential an entrepreneurial career makes possible. The best‐selling
book: The Millionaire Next Door (Stanley and
Danko, 1999)
reported that two‐thirds of America's 3.5 million
millionaires were self‐employed.
Finally
we suggest educators and policy makers highlight the advantages of taking
moderate, calculated risks to get ahead. Examples of the rewards that can
result from risking an entrepreneurial endeavor abound. Many of our most
successful executives, including Bill Gates, Michael Dell, and many others
achieved their success by taking the risk of launching their own ventures.
As
the foregoing discussion suggests, many educational practices may be modified
to increase entrepreneurial self‐efficacy, highlight
the advantages of self‐employment, and encourage judicious risk
taking. Further research is planned to recommend specific pedagogical methods
and interventions, based on our model, that entrepreneurship educators may use
to stimulate entrepreneurial intentions.
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