The Influence of Entrepreneur Personality and Self-Efficacy on Behavioural Activities in
the Presence of Information Overload
Manisha Karia
Thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy
Faculty of Business and Enterprise
Swinburne University of Technology
2015
i
ABSTRACT
Entrepreneurship is the bedrock of creating new businesses and wealth. Undoubtedly,
the entrepreneur lies at the core of the entrepreneurial process and venture performance.
Prior research has focused on investigating the characteristics of entrepreneurs, the
antecedents of venture creation, and the stages of entrepreneurship. However, the
relationship between entrepreneurs’ characteristics and their behaviours was not given
much attention. Further, recent advances in information and communication technology
have created new challenges for entrepreneurs’ ability and behaviour but this has not
been examined empirically. My research attempts to address these critical issues.
The purpose of the thesis was to examine the impact of the entrepreneur’s personality
characteristics and entrepreneurial self-efficacy on entrepreneurial behavioural activities
in the presence of information overload. Based on a review of extant literature and
discussions with academics and practicing entrepreneurs, I have developed a conceptual
model that incorporates entrepreneurial personality factors, dimensions of
entrepreneurial self-efficacy and various entrepreneurial behavioural activities. Further,
I have included the concept of information overload in my model. In personality
characteristics, I have included three dimensions: the need for achievement, internal
locus of control, and risk-taking propensity. Entrepreneurial self-efficacy has six
dimensions: searching, planning, marshalling, implementing people-related tasks,
implementing finance-related tasks and coping with unexpected challenges. The newly
operationalised construct of entrepreneurial behaviours has eight activities: planning,
controlling, internal communication, human resources management, work-related tasks,
customer service, socialising and politicking. All the variables were hypothesised to
have a positive relationship, excepting information overload, which was posited to have
a negative impact.
The sample was drawn from India, which is a large emerging economy. Data were
collected through a survey covering 1,100 practicing entrepreneurs spread throughout
India. A final usable sample of 403 was obtained. The tests for reliability and validity
ii
of the measurement scale used in this study established the psychometric rigour of the
conceptual model. Each path identified in the conceptual model was tested using
regression-based path analysis.
The results revealed a positive relationship between the personality dimensions of the
need for achievement and risk-taking propensity with all the six dimensions of
entrepreneurial self-efficacy, but the internal locus of control was related positively only
to three dimensions, namely implementing people-related tasks, implementing finance-
related tasks, and coping with unexpected challenges. Similarly, the three entrepreneur
personality characteristics were related to only a few entrepreneurial behavioural
activities, not all. The relationship between entrepreneurial self-efficacy and
entrepreneurial behavioural activities also indicated that only some of these were
related. As expected, information overload has a negative impact on most of the self-
efficacy variables but only on some behavioural activities.
My study provides a significant contribution to the body of literature by confirming that
entrepreneurial self-efficacy has many dimensions that need to be treated differently.
This is the first time information overload has been included in entrepreneurship
studies. I also created a platform for empirically testing entrepreneurial self-efficacy and
entrepreneurial behavioural activities for future research. Overall, the results from my
study have strong implications for scholars, entrepreneurs and policymakers,
particularly those in emerging economies.
Nonetheless, a major limitation of the study is the generalisability of the findings. The
sample is from owner-managers from different cities and industries in India, which may
include inter-regional and inter-industry differences. Therefore, care should also be
taken before these results can be applied to other emerging economies due to their
differences. Future studies could, therefore, undertake an in-depth examination of
regional and industry differences among entrepreneurs in India, as well as replicate the
study in other emerging economies. The concept of entrepreneurial information
overload can be explored further to find how the information-seeking behaviour of
entrepreneurs is impacted by information overload.
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ACKNOWLEDGEMENTS
Blessed are those who find wisdom, those who gain understanding (Proverbs 3: 13).
First and foremost, I would like to thank God, without whose abundant grace this thesis
would have not become a reality. I am truly grateful for God’s provision and guidance
in undertaking this research successfully. Through this research experience, I have
learnt how to face challenges and grow through God’s grace.
I wish to express my sincere thanks to my supervisory team consisting of Dr Malcolm
Abbott and Dr Alexis Espesto of the Swinburne University of Technology, and
Dr Hanoku Bathula of the University of Auckland. Dr Malcolm Abbott was kind
enough to accept me as his research student and also provide guidance and support
during the entire period of the study. I am particularly grateful for his encouragement to
apply for scholarship for my doctoral research. I also wish to thank Dr Alexis Espesto
for his periodic support and feedback on my progress. I also express my deep
appreciation to Dr Hanoku Bathula, who has encouraged and helped me at every stage
in completing this research thesis. I will never be able to thank him enough for his
invaluable support.
I would like to express my sincere gratitude to Dr Sanjaya Gaur of Auckland University
of Technology who was generous in giving his valuable time and expert advice,
particularly in designing the survey and data analysis. I also wish to acknowledge the
support I received from the management and other colleagues of Auckland Institute of
Studies. I want to mention Dr Mike Roberts, Dr Ershad Ali and Sawsan Al-Shamaa for
their timely support and encouragement over the period of my study. Very special
thanks are due to Tony Ó Braonáin for patiently reading my manuscripts and making
suggestions.
As my data were collected from India, I had to seek help from several people in
finalising the survey instrument and also with the collection of data. In this regard, I
wish to acknowledge the support of senior academics from various Indian universities,
Dr. Karuppasamy Ramanathan (Director, Management Studies, Nehru Institute of
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Technology, Coimbatore), Dr. Githa Heggde (Professor of Marketing, WeSchool,
Bengaluru), Dr. Sandip Kar (Chairman, IIMS, Kolkata), and Dr Ramanujam Krishnaraj
(Assistant Professor, Management Studies, SRM University, Chennai). I want to also
thank Mr Ganapathi Batthini, Librarian, Entrepreneurship Development Institute of
India, for his timely help in providing information about the status of entrepreneurship
in India. It is not out of place to thank all the 650 respondents from India who have
spent their valuable time in filling in the surveys and making this study happen. A big
thank you to all the research and administrative staff, Ms Anne Cain, Ms Nadine White
and others at Swinburne University of Technology for their support throughout the last
four years. I especially want to acknowledge the fee scholarship awarded to me by
Swinburne University of Technology.
My special gratitude is to my dearest daughter, Khyaati Narayani, for her undying love,
understanding and support even during the times of frustration. She gave up so many
evenings and weekends so that I could complete my study. During stressful times, she
has been my biggest supporter and has always believed in my ability to complete this
thesis. My special thanks are due to my beloved parents, Rajnikant and Latha Karia,
who have provided me with unconditional love and endless support. They have not
only helped me with their contacts for data collection, but also looked after my daughter
when I was focusing on the thesis. My thanks also go to my loving sister and her
husband, Vaidehi and Tejal Shah, for their encouragement, and to my nieces, Kavya and
Nitya, who have also cheered me up through my doctoral journey.
There are several others that I wish to thank personally, but I am not able to mention all
of them due to limitations of space. I will always remember them with gratitude.
Manisha Karia
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DECLARATION
I, Manisha Karia, declare that: This thesis contains no material which has been accepted for the award to the candidate of any other degree or diploma, except where due reference is made in the text of the examinable outcome; To the best of the candidate’s knowledge, it contains no material previously published or written by another person except where due reference is made in the text of the examinable outcome; and Where the work is based on joint research or publications, it discloses the relative contributions of the respective workers or authors.
Manisha Karia 10 April 2015
vi
TABLE OF CONTENTS ABSTRACT ...................................................................................................................... i ACKNOWLEDGEMENTS.......................................................................................... iii DECLARATION ............................................................................................................. v LIST OF TABLES ......................................................................................................... xi LIST OF FIGURES ..................................................................................................... xiv LIST OF ABBREVIATIONS ...................................................................................... xv CHAPTER 1 INTRODUCTION ............................................................................. 1
1.1 Factors impacting on the entrepreneur’s performance ........................................................ 1
1.1.1 Personality characteristics affecting entrepreneurs ....................................................... 2
1.1.2 Entrepreneurial self-efficacy ......................................................................................... 3
1.1.3 Entrepreneurial behavioural activities........................................................................... 4
1.1.4 Entrepreneurial information overload ........................................................................... 5
1.2 Purpose of the study ............................................................................................................ 5
1.3 Motivation for this research ................................................................................................ 6
1.4 Contributions of the study ................................................................................................... 8
1.6 Outline of the thesis .......................................................................................................... 10
CHAPTER 2 LITERATURE REVIEW ............................................................... 12
2.1 Concept and definition of entrepreneurship ...................................................................... 13
2.1.1 Plurality of definitions ................................................................................................ 16
2.2 Entrepreneur’s background ............................................................................................... 18
2.2.1 Demographic characteristics ....................................................................................... 19
2.2.2 Personality characteristics ........................................................................................... 21
2.3 Entrepreneurial self-efficacy ............................................................................................. 50
2.3.1 The concept of self-efficacy ........................................................................................ 51
2.3.2 Concept of entrepreneurial self-efficacy (ESE) .......................................................... 52
2.4 Entrepreneurial behaviour activities ................................................................................. 62
2.4.1 Concept of entrepreneurial behaviour ......................................................................... 63
2.4.2 Research on entrepreneurial behaviour ....................................................................... 63
2.4.3 Identifying entrepreneurial behaviours ....................................................................... 69
2.5 Entrepreneurial information overload (EIO) ..................................................................... 71
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2.5.1 Concept of information overload ................................................................................ 72
2.5.2 Information-seeking behaviour in entrepreneurship ................................................... 74
2.5.3 Entrepreneurial information overload and its impact .................................................. 78
2.6 Chapter summary .............................................................................................................. 81
CHAPTER 3 ENTREPRENEURSHIP ISSUES IN INDIA ................................ 83
3.1 Emerging economies and their characteristics .................................................................. 83
3.2 Importance of emerging markets ...................................................................................... 85
3.3 Overview of India ............................................................................................................. 86
3.4 Entrepreneurship in India .................................................................................................. 88
3.4.1 Socio-cultural context of entrepreneurship in India ................................................... 88
3.4.2 Economic development and entrepreneurship in India ............................................... 91
3.4.3 Education and entrepreneurship in India..................................................................... 96
3.5 Entrepreneurship research in India ................................................................................... 98
3.6 Chapter summary ............................................................................................................ 102
CHAPTER 4 CONCEPTUAL FRAMEWORK AND HYPOTHESES ........... 103
4.1 Conceptual framework and theoretical model ................................................................ 103
4.2 Personality characteristics and entrepreneurial self-efficacy .......................................... 104
4.2.1 Personality characteristic of need for achievement and dimensions of entrepreneurial self-efficacy.............................................................................................................. 106
4.2.2 Personality characteristic of internal locus of control and dimensions of entrepreneurial self-efficacy .................................................................................... 108
4.2.3 Personality characteristic of risk-taking propensity and dimensions of entrepreneurial self-efficacy.............................................................................................................. 110
4.3 Entrepreneurial information overload and entrepreneurial self-efficacy ........................ 112
4.4 Entrepreneurial information overload and entrepreneurial behavioural activities .......... 113
4.5 Personality characteristics and entrepreneurial behavioural activities ............................ 115
4.5.1 Personality characteristic of need for achievement and entrepreneurial behavioural activities ................................................................................................................... 116
4.5.2 Personality characteristic of internal locus of control and entrepreneurial behavioural activities ................................................................................................................... 118
4.5.3 Personality characteristic of risk-taking propensity and entrepreneurial behavioural activities ................................................................................................................... 119
4.6 Entrepreneurial self-efficacy and entrepreneurial behavioural activities ........................ 121
4.6.1 Dimensions of entrepreneurial self-efficacy and the planning dimension of entrepreneurial behavioural activities ...................................................................... 122
viii
4.6.2 Dimensions of entrepreneurial self-efficacy and the controlling dimension of entrepreneurial behavioural activities ...................................................................... 123
4.6.3 Dimensions of entrepreneurial self-efficacy and the internal communication dimension of entrepreneurial behavioural activities ................................................ 124
4.6.4 Dimensions of entrepreneurial self-efficacy and the human resources dimension of entrepreneurial behavioural activities ...................................................................... 125
4.6.5 Dimensions of entrepreneurial self-efficacy and the work-related task dimension of entrepreneurial behavioural activities ...................................................................... 127
4.6.6 Dimensions of entrepreneurial self-efficacy and the customer service dimension of entrepreneurial behavioural activities ...................................................................... 128
4.6.7 Dimensions of entrepreneurial self-efficacy and the socialising dimension of entrepreneurial behavioural activities ...................................................................... 129
4.6.8 Dimensions of entrepreneurial self-efficacy and the politicking dimension of entrepreneurial behavioural activities ...................................................................... 130
4.7 Chapter summary ............................................................................................................ 131
CHAPTER 5 RESEARCH METHODOLOGY ................................................. 132
5.1 Research approach and strategy ...................................................................................... 132
5.2 Measurement / operationalisation of variables ............................................................... 132
5.2.1 Personality characteristics ......................................................................................... 133
5.2.2 Entrepreneurial self-efficacy (ESE) .......................................................................... 136
5.2.3 Entrepreneurial behavioural activities....................................................................... 140
5.2.4 Entrepreneurial information overload (EIO) ............................................................. 144
5.2.5 Firm and entrepreneur related questions ................................................................... 145
5.3 Developing and validating the survey instrument ........................................................... 146
5.3.1 Time allocated to answer for each question .............................................................. 147
5.4 Sample selection ............................................................................................................. 147
5.5 Statistical analyses .......................................................................................................... 151
5.5.1 Review of sample size based on validity and reliability ........................................... 153
5.5.2 Data analysis ............................................................................................................. 155
5.6 Chapter summary ............................................................................................................ 156
CHAPTER 6 RESULTS AND DISCUSSION ................................................. 157
6.1 Sample characteristics ..................................................................................................... 157
6.1.1 Firm characteristics ................................................................................................... 158
6.2 Measurement properties .................................................................................................. 159
6.2.1 Reliability analysis .................................................................................................... 160
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6.2.2 Exploratory factor analysis (EFA) ............................................................................ 167
6.3 Composite variables ........................................................................................................ 176
6.3.1 Correlation matrix for composite variables .............................................................. 177
6.4 Common method bias ..................................................................................................... 179
6.5 Hypothesis testing ........................................................................................................... 179
6.5.1 Effects of personality characteristics and entrepreneurial information overload on the searching capability dimension of entrepreneurial self-efficacy.............................. 180
6.5.2 Effects of personality characteristics and entrepreneurial information overload on the planning capability dimension of entrepreneurial self-efficacy ............................... 181
6.5.3 Effects of personality characteristics and entrepreneurial information overload on the marshalling capability dimension of entrepreneurial self-efficacy .......................... 182
6.5.4 Effects of personality characteristics and entrepreneurial information overload on the implementing people-related capability dimension of entrepreneurial self-efficacy184
6.5.5 Effects of personality characteristics and entrepreneurial information overload on the implementing finance capability dimension of entrepreneurial self-efficacy .......... 185
6.5.6 Effects of personality characteristics and entrepreneurial information overload on the coping with unexpected challenges capability dimension of entrepreneurial self-efficacy ..................................................................................................................... 186
6.5.7 Effects of entrepreneurial self-efficacy, entrepreneurial information overload and personality characteristics on the planning dimension of entrepreneurial behavioural activities. .................................................................................................................. 188
6.5.8 Effects of entrepreneurial self-efficacy, entrepreneurial information overload and personality characteristics on the controlling dimension of entrepreneurial behavioural activities. .............................................................................................. 190
6.5.9 Effects of entrepreneurial self-efficacy, entrepreneurial information overload and personality characteristics on the internal communication dimension of entrepreneurial behavioural activities. ..................................................................... 193
6.5.10 Effects of entrepreneurial self-efficacy, entrepreneurial information overload and personality characteristics on the human resources management dimension of entrepreneurial behavioural activities. ..................................................................... 195
6.5.11 Effects of entrepreneurial self-efficacy, entrepreneurial information overload and personality characteristics on the work-related tasks dimension of entrepreneurial behavioural activities. .............................................................................................. 198
6.5.12 Testing the effects of entrepreneurial self-efficacy, entrepreneurial information overload and personality characteristics on the customer service dimension of entrepreneurial behavioural activities. ..................................................................... 200
6.5.13 Testing the effects of entrepreneurial self-efficacy, entrepreneurial information overload and personality characteristics on the socialising dimension of entrepreneurial behavioural activities. ..................................................................... 203
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6.5.14 Testing the effects of entrepreneurial self-efficacy, entrepreneurial information overload and personality characteristics on the politicking dimension of entrepreneurial behavioural activities. ..................................................................... 205
6.5.15 Summary of findings for hypotheses tested ............................................................ 208
6.6 Discussion ....................................................................................................................... 212
6.6.1 Relationship between personality characteristics and entrepreneurial self-efficacy . 212
6.6.2 Relationship between entrepreneurial self-efficacy and entrepreneurial behavioural activities ................................................................................................................... 216
6.6.3 Relationship between personality characteristics and entrepreneurial behavioural activities ................................................................................................................... 217
6.6.4 Impact of entrepreneurial overload on entrepreneurial self-efficacy ........................ 222
6.6.5 Impact of entrepreneurial information overload on entrepreneurial behavioural activities ................................................................................................................... 223
6.7 Chapter summary ............................................................................................................ 225
CHAPTER 7 CONCLUSION .............................................................................. 226
7.1 Summary of the study ..................................................................................................... 226
7.1.1 Purpose of the study .................................................................................................. 226
7.1.2 Research context ....................................................................................................... 228
7.1.3 Research methods and results ................................................................................... 229
7.2 Contribution to theory..................................................................................................... 230
7.3 Practical implication of the results ........................................................................... 232
7.3.1 Implications for educators of entrepreneurship ......................................................... 232
7.3.2 Implications for entrepreneurship practitioners ........................................................ 233
7.3.3 Implications for policy makers ................................................................................. 234
7.4 Limitations of the study .................................................................................................. 235
7.5 Directions for future research ......................................................................................... 235
7.6 Concluding remarks ........................................................................................................ 237
REFERENCES ............................................................................................................ 239 APPENDICES………………………………………………………………………..276 A.1. SUHREC Project 2012/005 Ethics Clearance ................................................... 275
A.2.SUHREC Project 2012/005 Final Report Acknowledgment….…………..….278
A.3 QUESTIONNAIRE…………………...………………………….…………….279
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LIST OF TABLES
Table 2.1 Sample of definitions of entrepreneurship/entrepreneur……….…………..17
Table 2.2 Personality characteristics examined in entrepreneurship studies………….24
Table 2.3 Summary of the Big Five characteristics and their corresponding traits ….27
Table 2.4 Specific personality characteristics………………………………….…......33
Table 3.1 BRICS countries details…….………………………………………….......85
Table 3.2 India at a glance……………………………………………………….........87
Table 3.3 Contribution of small scale industry to the Indian economy…… ……….....93
Table 3.4 Indian micro, small and medium enterprise sector (MSME) at a glance ….95
Table 3.5 Research in entrepreneurship in India....……………………………………99
Table 5.1 Operationalisation of entrepreneurs’ personality characteristics.....………..136
Table 5.2 Operationalisation of entrepreneurial self-efficacy….…………………......139
Table 5.3 Operationalisation of entrepreneurial behavioural activities.……………..143
Table 5.4 Operationalisation of entrepreneurial information overload……...………145
Table 5.5 Time allocated to answer for each section…...............................................147
Table 5.6 Final response number.................................................................................149
Table 5.7 Geographical distribution of responses of the sample................................151
Table 5.8 Abbreviation used in coding........................................................................152
Table 6.1 Sample demographics………………………………………..….………..158
Table 6.2 Characteristics of the respondent firms….………………..…....................159
Table 6.3 Correlation matrix for entrepreneurial self-efficacy…………….……….161
Table 6.4 Reliability analysis results for measurement scales –Entrepreneurial self-efficacy……………………………………………………………...…......162
Table 6.5 Correlation matrix for entrepreneurial behavioural activities…………….164
Table 6.6 Reliability analysis results for measurement scales-Entrepreneurial behavioural activities………………………………………………….….165
xii
Table 6.7 Correlation matrix for personality characteristics……..…………………166
Table 6.8 Reliability analysis results for measurement scales-Personality Characteristics…………………………………………………………….166
Table 6.9 Correlation matrix for entrepreneurial information overload……………..167
Table 6.10 Reliability analysis results for measurement scales-Entrepreneurial Information overload……………………..……………..…….…….........167
Table 6.11 Factor analysis for ESE construct - searching ......…………….………...168
Table 6.12 Factor analysis for ESE construct - planning…….………………………168
Table 6.13 Factor analysis for ESE construct - marshalling………………………...169
Table 6.14 Factor analysis for ESE construct - implementing people………………169
Table 6.15 Factor analysis for ESE construct - implementing finance…..……….…170
Table 6.16 Factor analysis for ESE construct - coping with unexpected challenges..170
Table 6.17 Factor analysis for EBA construct - planning…………………………...171
Table 6.18 Factor analysis for EBA construct - controlling………………..…….….171
Table 6.19 Factor analysis for EBA construct - internal communication….……….172
Table 6.20 Factor analysis for EBA construct - HR management…………….…….172
Table 6.21 Factor analysis for EBA construct - work-related tasks…………………173
Table 6.22 Factor analysis for EBA construct - customer service…………………..173
Table 6.23 Factor analysis for EBA construct - socialisation………………………174
Table 6.24 Factor analysis for EBA construct - politicking………………………...174
Table 6.25 Factor analysis for personality characteristic - need for achievement…...175
Table 6.26 Factor analysis for personality characteristic - internal locus of control..175
Table 6.27 Factor analysis for personality characteristic - risk-taking propensity….176
Table 6.28 Factor analysis for entrepreneurial information overload……………….176
Table 6.29 Correlation matrix for the composite variables………………………….178
Table 6.30 Testing PC and EIO association with the searching capability dimension of ESE ………………………………………………………180
xiii
Table 6.31 Testing PC and EIO association with the planning capability dimension of ESE……………………………………………………….181
Table 6.32 Testing PC and EIO association with the marshalling capability dimension of ESE……………………………………………………….182
Table 6.33 Testing PC and EIO association with the implementing people- related capability dimension of ESE…………………………………...184
Table 6.34 Testing PC and EIO association with the implementing finance- related capability dimension of ESE……………..……………………185
Table 6.35 Testing PC and EIO association with the coping with unexpected challenges capability dimension of ESE………………………..……...186
Table 6.36 Testing ESE, EIO and PC association with the planning dimension of EBA……………………………….…………………….188
Table 6.37 Testing ESE, EIO and PC association with the controlling dimension of EBA……………………………………………………..190
Table 6.38 Testing ESE, EIO and PC association with the internal communication dimension of EBA …………………………………...193
Table 6.39 Testing ESE, EIO and PC association with the human resources management dimension of EBA………………….……………………195
Table 6.40 Testing ESE, EIO and PC association with the work-related tasks dimension of EBA……………………………………………….198
Table 6.41 Testing ESE, EIO and PC association with the customer service dimension of EBA……………………………………………………..200
Table 6.42 Testing ESE, EIO and PC association with the socialising dimension of EBA……………………………………………………..203
Table 6.43 Testing ESE, EIO and PC association with the politicking dimension of EBA…………………………………………………….205
Table 6.44 Summary findings for dependent variable – ESE…………………….208
Table 6.45 Summary findings for dependent variable – EBA...………………….209
xiv
LIST OF FIGURES
Figure 4.1 Conceptual Framework………………………………………………..104
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LIST OF ABBREVIATIONS ____________________________________________________
CIIE : Centre for Innovation, incubation and entrepreneurship
CII : Confederation of Indian Industry
ESE : Entrepreneurial self-efficacy
ESE dimensions
Search : Entrepreneurial self-efficacy dimension of searching
Plg : Entrepreneurial self-efficacy dimension of planning
Mrsh : Entrepreneurial self-efficacy dimension of marshalling
Impple : Entrepreneurial self-efficacy dimension of implementing people
Impfin : Entrepreneurial self-efficacy dimension of implementing finance
Copch : Entrepreneurial self-efficacy dimension of coping with challenges
EBA : Entrepreneurial behavioural activities
EBA dimensions
BhvPlg : Entrepreneurial behavioural activity of planning
BhvCon : Entrepreneurial behavioural activity of controlling
BhvCom : Entrepreneurial behavioural activity of internal communication
BhvHRM : Entrepreneurial behavioural activity of human resources management
BhvTas : Entrepreneurial behavioural activity of work-related tasks
BhvSer : Entrepreneurial behavioural activity of customer service
BhvSoc : Entrepreneurial behavioural activity of socialising
BhvPol : Entrepreneurial behavioural activity of politicking
EDII : Entrepreneurship Development Institute of India
EFA : Exploratory factor analysis
EIO : Entrepreneurial information overload
FDI : Foreign direct investment
GDP : Gross domestic product
GEM : Global entrepreneurship monitor
GSE : General self-efficacy
IIE : Indian Institute of Entrepreneurship
IIM : Indian Institute of Management
xvi
PC : Personality characteristic
Personality characteristics
PCLoC : Personality characteristic of internal locus of control
PCnAch : Personality characteristic of need for achievement
PCRisk : Personality characteristic of internal locus of control
UNCTAD : United Nations Conference on Trade and Development
BRICS : Brazil, Russia, India, China and South Africa
MBA : Master of Business Administration
MSME : Micro, small and medium enterprise
NI-MSME : National Institute for micro, small and medium enterprises
NIESBUD : National Institute for Entrepreneurship and Small Business
Development
NSTEDB : National Science and Technology Entrepreneurial Development
SINE : Society for innovation and entrepreneurship
1
CHAPTER 1
INTRODUCTION
Entrepreneurship is the bedrock of creating new businesses and wealth. In addition, it
acts as an important driver in economic development by promoting innovation and
creativity, introducing new products and services, and providing employment. In
general, entrepreneurship is found to significantly contribute to economic development
(Carree & Thurik 2010; Wennekers & Thurik 1999). Recognising the importance of
entrepreneurship, research relating to this domain is undertaken across various
disciplines such as economics, sociology and management. Noted scholars such as
Cantillon (1755), Knight (1921), Schumpeter (1934) and McClelland (1961), amongst
others, have significantly contributed to this domain.
Undoubtedly, the entrepreneur lies at the core of the process of entrepreneurship and
firm performance (Kuratko & Hodgetts 2007; van Praag 2005; Fastré & Van Gils
2007). The entrepreneur’s perception of opportunities and their capacity (i.e., skills and
motivation) to exploit those opportunities are important drivers for entrepreneurial
activity (Reynolds et al. 2000). Therefore, the establishment of a new business implies
that the entrepreneur has acted effectively to identify the entrepreneurial opportunities
and converted them into commercially viable products or services. Given this critical
role that the entrepreneur plays in venture creation and maintenance, understanding the
role of the entrepreneur is important for the further development of entrepreneurship.
1.1 Factors impacting on the entrepreneur’s performance
To be an effective entrepreneur, one should have the knowledge, skills and abilities to
successfully exploit opportunities, new ideas and create new business ventures. Early
research has focussed attention on two major areas, demographic and personality
characteristics, amongst others. For example, demographic characteristics were
examined by a number of studies and covered various factors such as age, gender, and
educational aspects (e.g., Kourilsky & Walsad, 1998; Kim, Aldrich & Keister 2006).
2
Likewise, research in the domain of personality included personality traits (Rauch &
Frese 2007a; Collins, Hanges & Locke 2004), entrepreneurial skills and competencies
(Man, Lau & Chan 2002; Ahmad et al. 2009), entrepreneurial behaviour (Collins,
Hanges & Locke 2004; Endres & Woods 2006), and entrepreneurial self-efficacy
(Chen, Greene & Crick 1998; DeNoble, Jung & Ehrlich 1999).
Therefore, there are a number of factors that influence an entrepreneur’s performance.
However, I examine four important issues that are covered in this study: personality
factors, entrepreneurial self-efficacy, entrepreneurial behavioural activities and
information overload that entrepreneurs’ face. All of them are interrelated and are
expected to have a significant impact and relationship with each other. To understand
these linkages, I now briefly discuss these important constructs.
1.1.1 Personality characteristics affecting entrepreneurs
A significant amount of research has been undertaken on demographic characteristics of
entrepreneurs (Kourilsky & Walsad 1998; Kim, Aldrich & Keister 2006), but it is
personality characteristics that have attracted wider attention (Lee & Tsang 2001; Zhao
& Seibert 2006; Rauch & Frese 2007a). While some studies (e.g., Brockhaus &
Horwitz 1986) did not find any relationship between personality traits and business
creation, other studies (Zhao & Seibert 2006; Rauch & Frese 2007a) indicate a positive
relationship between personality traits and business creation and success. Some
personality traits linked to entrepreneurship are: innovativeness, need for achievement,
proactive personality, self-reliance, extroversion, need for autonomy, risk-taking
propensity, generalised self-efficacy and internal locus of control (Rauch & Frese
2007a; Lee & Tsang 2001).
To gain an overall view of the influence of personality factors on entrepreneurs, Rauch
and Frese (2007a) conducted a meta-analysis and found that specific personality traits
can help predict entrepreneurial behaviour. While the entrepreneurship literature covers
a long list of personality traits of individuals’ forays into venture creation and
maintenance, three specific personality characteristics, namely the need for
achievement, internal locus of control and risk-taking propensity, are considered to be
the most important (Sahin, Nijkamp & Rietdijik 2009; Tang & Tang 2007), and are
3
referred to as the ‘Big Three’ (Chell 2008). Further, Schaper et al. (2011) also stated
that these three characteristics have received and achieved a high level of attention and
validity. My study considers these variables to examine the effect of personality factors
on entrepreneurs’ self-efficacy and entrepreneurial behavioural activities.
1.1.2 Entrepreneurial self-efficacy
Another important dimension that is related to entrepreneurial success is entrepreneurial
self-efficacy. As a concept, self-efficacy was first proposed by Albert Bandura (1977,
p.3) as “an individual’s belief in one’s capacity to organize and execute the courses of
action required to produce given attainments”. Other research (Chen, Greene & Crick
1998; DeNoble, Jung & Ehrlich 1999; Krueger, Reilly & Casrud 2000; Wilson, Kickul
& Marlino 2007; McGee et al. 2009) adapted this to an entrepreneurial field in the form
of entrepreneurial self-efficacy. Chen, Greene and Crick (1998, p.295) refer to the
concept of entrepreneurial self-efficacy “as the strength of a person’s belief that he or
she is capable of successfully performing the various roles and tasks of
entrepreneurship”. The main tasks of an entrepreneur are in the form of developing new
product and market opportunities, building an innovative environment, initiating
investor relationships, financial control, management, marketing, risk-taking, and
coping with unexpected challenges.
Recognising that entrepreneurial self-efficacy has diverse manifestations, studies by
Chen, Greene and Crick (1998), DeNoble, Jung and Ehrlich (1999), Zhao, Seibert and
Hills (2005) have found self-efficacy to be positively associated with different
entrepreneurial tasks. But the problem is that there is a vast array of these
entrepreneurial tasks. For example, DeNoble, Jung and Ehrlich (1999) identified 35
skills and behaviours from an exploratory research of local entrepreneurs. Accordingly,
previous studies have referred to various entrepreneurial roles, tasks and dimensions
within entrepreneurial self-efficacy. To provide some clarity on this issue, McGee et al.
(2009) conducted a meta-analysis of past studies and identified five main dimensions of
entrepreneurial self-efficacy: searching, planning, marshalling, implementing people
and implementing financial related responsibilities that are associated with planning,
launching and growing a new venture. This clear identification of dimensions of
4
entrepreneurial self-efficacy suggests that it is possible that an entrepreneur may
perform effectively in some dimensions of entrepreneurship tasks, but not in others.
1.1.3 Entrepreneurial behavioural activities
While personality traits and self-efficacy aspects are considered important, other
scholars such as Gartner (1989), and Bridge, O’Neill and Cromie (2003) believe that the
focus should not be on the individuals’ psychological aspects but on the behaviours they
display (Gartner, 1989; Bridge, O’Neill & Cromie 2003). Self-evidently, entrepreneurs’
knowledge or intentions without action do not create a venture or value. Entrepreneurs’
behaviours were discussed under different themes: (a) starting a business: opportunity
seeking, planning to start a business, joining courses / workshops to gain skills to start a
business etc. (Gartner, Carter & Reynolds 2010); (b) engaging in general enterprising
behaviour: creativity and risk-taking behaviour (Gibb 1994); and (c) behaviours that are
needed for entrepreneurial success: planning, controlling, commitment and so on
(Timmons 1994; Envick & Langford 1998). Unfortunately, these behavioural activities
were not examined adequately, as most previous studies have looked at only the
intentionality-related aspects of entrepreneurs in new venture formation.
However, the behavioural aspects of entrepreneurs have recently drawn scholarly
attention (Envick & Langford 1998; Luthans & Ibrayeva 2006) to provide new insights
into the behavioural activities of practising entrepreneurs. Specifically, Luthans and
Ibrayeva (2006) observed the entrepreneurial behavioural activities of successful
entrepreneurs and have identified several specific activities. These authors grouped all
these entrepreneurial behavioural activities under nine dimensions: planning,
controlling, internal communication, human resource management, work-related tasks,
customer service, socialising, politicking and on-the-job personal time. Effective
performance in these activities is associated with entrepreneurial success. In order to
establish a new venture and to manage growth successfully, entrepreneurs need to be
proficient in these behavioural activities as well. Further, understanding what specific
behaviours help entrepreneurs succeed in specific environments is a necessary step,
because information can be used to enhance entrepreneurial self-efficacy required for
engaging in entrepreneurial behaviour (Luthans & Ibrayeva 2006).
5
1.1.4 Entrepreneurial information overload
There was a time when entrepreneurs lacked the necessary information for
entrepreneurial decisions. Therefore, having networks and external contacts became a
source of competitive advantage (Ahlstrom & Bruton 2006). However, the business
environment in which businesses operate today has undergone a paradigm shift with the
explosive growth in information and communication technologies. With this shift, the
availability of, and access to, information increased immensely. But, this also became a
problem of too-much information (Edmunds & Morris 2000). Therefore, the impact of
information overload was examined in different disciplines such as marketing,
management, management information systems, and organisation science (Speier,
Valacich & Vessey 1999; Shenk 1997; Eppler & Mengis 2004). The same problem can
also be faced by entrepreneurs, causing biases in their decision-making as identified by
Baron (1998), leading to sub-optimal outcomes. This can also lead to other challenges.
While information overload reduces the effectiveness of decision-making (Schick,
Gordon & Haka 1990), it increases information anxiety (Bawden & Robinson 2009).
Such emotional arousal or physiological responses resulting from anxiety, stress or fear
can negatively impact on self-efficacy (Conger & Kanungo 1988; Bandura 1977).
However, to the best of my knowledge, the extent to which the information overload
impacts on various aspects of entrepreneurship such as entrepreneurial self-efficacy and
entrepreneurial behavioural activities has not been investigated empirically.
1.2 Purpose of the study
The main purpose of my study is to examine the effects of entrepreneurial personality
characteristics on entrepreneurial self-efficacy, and how they in turn, impact on
entrepreneurial behavioural activities. Specifically, I have considered three personality
characteristics, six dimensions of entrepreneurial self-efficacy and eight activities of
entrepreneurial behaviour for empirical testing. My study will also consider how
information overload impacts on other entrepreneurship variables. Investigating the
impact of information overload is also in line with the suggestion by Rauch & Frese
(2007a), who underscored the need for considering situational conditions.
6
Specifically, my research questions are as follows:
i) How do personality characteristics of entrepreneurs impact on different
dimensions of entrepreneurial self-efficacy and entrepreneur behavioural
activities?
ii) What is the relationship between different dimensions of entrepreneurial
self-efficacy and entrepreneur behavioural activities?
iii) How does entrepreneurial information overload impact on two constructs,
namely entrepreneurial self-efficacy and entrepreneurial behavioural
activities?
To address these questions, a conceptual model is proposed based on extant literature.
Other academics and entrepreneurs were consulted before the model was finalised. The
model was empirically tested for various relationships: (i) the association between the
personality traits and the dimensions of entrepreneurial self-efficacy; (ii) the association
between the dimensions of entrepreneurial self-efficacy and the entrepreneurial
behavioural activities; (iii) the association between personality traits and the
entrepreneurial behavioural activities; (iv) the association between entrepreneurial
information overload and dimensions of entrepreneurial self-efficacy; and (v) the
association between entrepreneurial information overload and entrepreneurial
behavioural activities.
1.3 Motivation for this research
The motivation for my study is three-fold. First, earlier studies have mainly
concentrated on demographic and personality characteristics and their impact on
entrepreneurial intentions. Scholars believed that an entrepreneur’s intention (i.e.
cognitive intent) is a predictor of later behaviour (see Prabhu et al. 2012). Accordingly,
the respondents of these studies were mainly tertiary students and/or nascent
entrepreneurs, who in most cases did not own a business at all. Identifying the
predominant use of students as a sample in entrepreneurship studies, scholars have
suggested the use of real-world entrepreneurs instead (Chen, Greene & Crick 1998) or
practicing entrepreneurs (DeNoble, Jung & Ehrlich 1999). Accordingly, my study will
consider entrepreneurial characteristics, entrepreneurial self-efficacy and their impact
7
on the entrepreneurial behaviour of practicing entrepreneurs. While intent is a predictor
of behaviour, it is difficult to relate it to a posterior success. Therefore, Prabhu et al.
(2012) suggest replacing the intent with entrepreneurial behaviour in future research.
My study attempts to do this by empirically testing entrepreneurial behavioural
activities.
Second, many of the studies in entrepreneurship have focused on mature markets and
did not examine issues in emerging market economies (Bruton, Ahlstrom & Obloj,
2008). Emerging economies are experiencing rapid growth and industrialisation, and
are becoming increasingly important for the global economy (Hoskisson et al. 2000;
Ahlstrom & Bruton, 2006). However, Bruton, Ahlstrom and Obloj (2008) reviewed
articles published in top management and entrepreneurship journals between 1990 and
2006 about entrepreneurship, and found that less than one percent of them were on
emerging economies (only 43 out of 7,482). Further, Zahra (2007) also recommended
the adaptation of entrepreneurship theories developed in developed countries to
emerging economies. For richer theoretical development, Bruton, Ahlstrom and Obloj
(2008) also suggested testing the applicability of theory in different settings such as
emerging economies. Each emerging economy has some unique features that
differentiate it from other emerging economies. Therefore, emerging economies offer
the potential to test the theories for new insights that affect the entrepreneurial process,
behaviours and performance. For my study, I have chosen one of the two largest
emerging economies, India. Despite India being one of the two largest emerging
economies in the world, and the fourth largest economy as well, studies on
entrepreneurship in India were very limited (Bruton, Ahlstrom & Obloj 2008). My
study will help to better understand entrepreneurship in the Indian context as it becomes
an increasingly attractive market for multinational firms.
Third, the world has recently experienced an explosive growth of information and
communication technology which has impacted on all aspects of life, including
entrepreneurship. Few scholars were early in recognising the problem of dealing with
the copiousness of information a few decades ago (Milford & Perry 1977, Simon 1971;
Shapiro & Varian, 1999). It was termed information overload, but did not receive much
attention from researchers in entrepreneurship. Apart from a very limited amount of
8
research on the impact of information overload on entrepreneurial decision making
(Baron 1998) and its impact on the entrepreneur’s cognitive ability, causing the
entrepreneur to become overconfident (Forbes 2005), this area has largely been
overlooked by scholars of entrepreneurial research. My study considered this
dimension and incorporated it in the form of ‘entrepreneurial information overload’.
1.4 Contributions of the study
My study makes several contributions that are useful for academic research, as well as
for practitioners of entrepreneurship. They are briefly discussed below:
First, previous studies have examined the role of age, gender and human capital
(DeTienne & Chandler 2007), homemaker status (Singh & Lucas 2005), and intentions
(Ajzen, 1991) as predictors of entrepreneurial behaviour. In these studies, the focus was
on entrepreneurial activities such as opportunity identification, and gathering resources
to start a business or write a business plan, thus focusing on the entrepreneurial
intentions or initial venture creation activities only. As Bird and Schjoedt (2009) have
pointed out, many of these studies used students rather than entrepreneurs as
respondents. There is a consensus among researchers that the research in the area of
entrepreneurial behaviour has not been sufficiently addressed and more empirical data
are required to understand ‘what entrepreneurs actually do’ (Bird & Schjoedt 2009;
Bird, Schjoedt & Baum 2012; Gartner, Carter & Reynolds 2010). In fact, Bird and
Schjoedt (2009, p. 350) specifically ‘call for more studies and better operationalization
of entrepreneurial behaviour’ and for examining entrepreneurial behaviour extending
beyond the context of the start-up new ventures. A few years ago, Luthans and
Ibrayeva (2006) undertook a study of entrepreneurs’ behaviours by observing them in
transition economies and prepared a list. My study uses these entrepreneurial activities
identified by Luthans and Ibrayeva (2006) for empirical analysis and also by sampling
practicing entrepreneurs. I believe they are relevant to my context as the transition
economies share many features of emerging economies. Therefore my methodological
contribution by operationalising entrepreneurial behaviour allows other scholars to
examine and gain insights into entrepreneurial behavioural activities. Further, the
results of my study would be useful for practicing entrepreneurs.
9
Second, while previous studies have examined entrepreneurial self-efficacy as an
important predictor of entrepreneurial competence and behaviour, the construct used a
composite score to measure self-efficacy in entrepreneurial contexts (Chen, Greene &
Crick 1998; DeNoble, Jung & Ehrlich 1999; Forbes 2005). However, a recent study has
suggested that there are several dimensions within the construct of entrepreneurial self-
efficacy (McGee et al. 2009). These are: searching, planning, marshalling, and
implementing people related and finance related responsibilities. Combining different
dimensions of the construct into one composite measure is not only inappropriate, but
also limits our understanding of how entrepreneurs are prepared for their
responsibilities. Although McGee et al. (2009) have identified these different
entrepreneurial self-efficacy dimensions, these authors have tested them on students and
nascent entrepreneurs. However, my study examined them in the context of practicing
entrepreneurs. This makes it easy to identify specific dimensions within entrepreneurial
self-efficacy in which the entrepreneurs feel confident in their abilities. I am also able
to examine the impact of each dimension of entrepreneurial self-efficacy on the
dimensions of entrepreneurial behavioural activities in order to identify any inherent
relationships that may exist between various dimensions of these two constructs. I
believe that my results have greater relevance to both practitioners and students of
entrepreneurship for training purposes.
Third, while information overload has been around as a construct and been used in
various disciplines (Eppler & Mengis 2004; Schick, Gordon & Haka 1990), not much
has been done to examine its impact on entrepreneurship. Research on the impact of
information overload on entrepreneurship was sporadic and limited (Baron 1998;
Forbes 2005). This is surprising, given that we live in a world that is revolutionised by
information and communication technology. I have adapted the concept of ‘information
overload’ to the field of entrepreneurship, and propose a term ‘entrepreneurship
information overload’ (EIO). I examine the impact of EIO on entrepreneurs’
personality characteristics, entrepreneurial self-efficacy, and entrepreneurial behavioural
activities. To the best of my knowledge, my study is the first of its kind, and can
potentially guide future studies on this topic.
10
Fourth, as Bruton, Ahlstrom and Obloj (2008) identified, most of the research in
entrepreneurship is done in developed or mature economies, and the developing
countries are largely ignored. In fact, less than one percent of publications on
entrepreneurship from 1990 to 2006 covered emerging economies. Not surprisingly, the
research in the area of entrepreneurship is also limited in India, even in the local
journals and magazines. To address this gap, our study is undertaken in a large
emerging economy, namely India, which opened its economy about two decades ago,
and is currently a global player in information technology. This provided a unique
context for us to examine entrepreneurship. Also, Zahra (2007) recommended the
adaptation of entrepreneurship theories developed in developed countries to emerging
economies. Therefore, results from this study would allow for a greater understanding
of entrepreneurship in India, which is fast becoming a global player. For many Western
multinationals, understanding entrepreneurship in India is useful as they seek to enter
India through establishing partnerships, licences and joint ventures. Further, small
business owners can benefit from identifying their strengths and weaknesses in the areas
of entrepreneurial self-efficacy and entrepreneurial behavioural activities.
In general, the conceptual model that I proposed and tested in my study can form the
basis for, or act as a platform for, future research in emerging economies.
1.6 Outline of the thesis
This chapter is an introduction to the research study. It includes an overview of the
studies conducted so far in the area of entrepreneurship and the characteristics and
behaviour of the entrepreneur This chapter states the purpose and research questions
of the study, motivations for this research, as well as the expected contribution of this
study. This chapter also includes a discussion on the limitations of this study. The
subsequent chapters of this study are as follows:
Chapter two presents an extensive review of the literature covering concepts and
theories relating to entrepreneurship and entrepreneurs. This chapter has been divided
into six sections to discuss the main aspects. The first section examines the concept of
‘entrepreneurship’ and provides a review of the various definitions of entrepreneurship.
11
The second section explores the research undertaken in the area of entrepreneurial
characteristics with a specific focus on personality traits. In the third section,
entrepreneurial self-efficacy is examined. Section four discusses the various studies
undertaken in the area of entrepreneurial behavioural activities, and the final section of
this chapter covers the concept of information overload and its applicability to the
entrepreneurship domain through the construct of entrepreneurial information overload.
Chapter three is titled, ‘Entrepreneurship issues in India’ and examines the socio-
cultural and economic context of India. It briefly covers the caste system, economic
reforms undertaken, and how education is also used to encourage entrepreneurship.
Chapter four builds on the gaps identified in the literature reviewed in the second
chapter, and proposes a conceptual framework for this study. It includes four major
constructs: (i) entrepreneurial personality characteristics, (ii) entrepreneurial self-
efficacy, (iii) entrepreneurial behavioural activities, and (iv) entrepreneurship
information overload. Based on the proposed conceptual framework, this chapter
articulates the research hypothesis for this study, with explanations for relationships
between the constructs identified in the framework.
Chapter five discusses the research methodology used to conduct this study. It
elaborates on the design of the measurements and the justification of selected
measurements used for the constructs and dimensions. It also discusses the methods
and techniques used along with the details of data collection procedures.
Chapter six presents and discusses the results. First, I include the characteristics of the
sample. Then I outline the results in the sequence of hypothesis based on the
conceptual model. At the end of the results section, I summarise all the hypotheses
tested and whether they are accepted or rejected based on the results. Then I discuss the
results in the light of the extant literature.
Chapter seven concludes my thesis by providing a summary of my research and its
practical implications to entrepreneurs, educators and policy makers. Further,
limitations have been recognised and recommendations are made for future research.
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CHAPTER 2
LITERATURE REVIEW
This chapter reviews the extant literature in the field of entrepreneurship with a view to
identifying significant theoretical and methodological contributions made by scholars in
this area. The relevant discussion is presented as follows. First, the concept and
various definitions of entrepreneurship are presented. Second, entrepreneurial
personality traits are discussed. Thirdly, I examine entrepreneurial self-efficacy.
Fourthly, the current state of entrepreneurial behaviour is detailed. Finally, the literature
on entrepreneurial information overload is reviewed.
Early last century, Schumpeter (1934) underscored the importance of entrepreneurship
for increasing innovation and competition. New ideas are expected to bring competition
and variety, which in turn are likely to replace or displace obsolete firms - a
phenomenon referred to as ‘creative destruction’. Such activity is expected to transform
the economy through start-up activities in new industries (Wennekers & Thurik 1999).
It is seen that entrepreneurship is not a new topic, and has been discussed by academics
since the 18th century and has continued to gain attention.
Scholars highlight the growing importance of entrepreneurship in the modern world
(Acs & Audretsch 2010; Kuratko 2005; Van Praag & Versloot 2008; Wennekers &
Thurik 1999). In the current competitive global scenario, it is seen that on the one hand,
the governments in various countries are unable to create jobs and are relying heavily on
businesses to do so. At the same time, in an attempt to become efficient and fight
competition, large corporations are undertaking various approaches such as downsizing
and outsourcing, leaving new ventures and entrepreneurs to create jobs and grow the
economy (Mazzarol 2007). Entrepreneurship is considered to be an important
mechanism to facilitate economic development through new firm formation, thereby
creating jobs (Baron 2000), wealth (Thandi & Sharma 2004) and economic success (Li,
Zhang & Matlay 2003).
13
2.1 Concept and definition of entrepreneurship
Various scholars (Hebert & Link 1989; Holmes & Schmitz 1990; Murphy, Liao &
Welsch 2006; Van Praag 1999) have referred to the pioneering contributions of
Cantillon (1755/1931), Schumpeter (1942), Schultz (1975), Kirzner (1973, 1985),
Knight (1921/1971) and Say (1803/2001) to the academic discussion on
entrepreneurship. In modern times, the term entrepreneurship has been used differently
in diverse disciplines over the years (Gartner 1990; Hebert & Link 1989; Ireland &
Webb 2007; Murphy, Liao & Welsh 2006), each contributing to building a general
theory of entrepreneurship. Therefore, to understand what constitutes entrepreneurial
activity and to arrive at an acceptable definition of entrepreneurship and / or an
entrepreneur, the views put forth by different schools of thought were commonly
distinguished as classical, neo-classical, Austrian and behavioural approaches; the main
ideas of these approaches are examined here.
The term ‘entrepreneur’ is derived from the French word ‘entreprendre’ which means
‘to undertake’ (Oxford Dictionary, 2009). The earliest reference to the term
‘entrepreneur’ was made by Cantillon (1680-1734) from an economic perspective by
describing an entrepreneur as one who engages in arbitrage and bears risk. Say (1767-
1832) interpreted the role of the entrepreneur as being central to a firm as a co-ordinator
and manager. He assigns an important position to the entrepreneur in production,
distribution and consumption. Other economists, such as Alfred Marshall (1842-1924),
extended the meaning of entrepreneur to include not only the ‘risks’ relating to the
supply of commodities (production), but also making provision for innovation and
progress (Hebert & Link 1989). Marshall believed entrepreneurs are cost minimisers
and therefore innovators, who embody a set of abilities that are scarce in any society.
An early contributor to the development of the theory of entrepreneurship was
Schumpeter (1883-1950), who focused on innovation as an endogenous process and the
entrepreneur as being a prime mover within the economic system through innovation.
Schumpeter, however, did not support the notion of the entrepreneur as a capitalist and
risk-bearer. Instead, he defines an entrepreneur as a person who seeks opportunities for
profit through ‘new combinations’ in production. This ‘new combination’ is
14
synonymous with innovation, which is the basis for meaningful economic progress. In
this process, old firms that are incapable of carrying out ‘new combinations’ cease to
exist and are replaced by firms that are able to perform the ‘new combination’ or
innovation. Schumpeter observes that such an entrepreneur possesses ‘a mental freedom
… [that] is something peculiar and by nature rare’ (1934, p. 86). It is this rare mental
attitude that distinguishes entrepreneurs as leaders who are willing to establish new
paths.
While scholars like Cantillon (1755) and Marshall (1930) emphasised the risk that
entrepreneurial activity involves, Knight (1885-1972) draws a distinction between risk
and uncertainty, and states that only a subset of individuals in any society (i.e., the
entrepreneurs) exercises judgement effectively whenever uncertainty is involved, and
takes responsibility for the decisions made. As a reward for undertaking tasks bearing
uncertainty, the entrepreneur gains residual payment, prestige, and satisfaction (Knight
1921, 1971). However, uncertainty includes a type of probability which cannot be
classified on any valid basis because it concerns the outcome of a unique event (van
Praag 1999).
Therefore, the ability of an entrepreneur to make a judgement of the amount of
uncertainty involved, and to make an estimate of its value, differentiates him / her from
the rest of society (van Praag 1999).
Kirzner, in his earlier work in 1973, described entrepreneurs as people who display an
alertness to identify and exploit profit opportunities and who require a special type of
knowledge which is “knowing where to look for knowledge” (p.68), although he did not
explicitly mention risk and uncertainty. Hebert and Link (1989) were concerned that
such a view “downplays the importance of uncertainty in human decision making”
(p.47). In a later work, Kirzner (1999) clarifies his view of the entrepreneur as being
alert to opportunities, which requires a willingness to shoulder risks, and states that
uncertainty is endemic in the entrepreneurial firm life-cycle: if entrepreneurs are alert,
they will identify ‘marginal products at multi-period instances over time’. Such
behaviour will depend upon the entrepreneur’s ability to deal with uncertainty and the
degree of risk that is involved.
15
Even according to Schultz (1980), entrepreneurs are those who respond to opportunities
arising from disequilibria rather than having an ability to deal with uncertainty and risk.
Schultz maintains that risk and uncertainty are ever present in the economy and that “the
bearing of risk is not a unique attribute of entrepreneurs . . . [even as] entrepreneurs
assume risk, there also are people who are not entrepreneurs who assume risk” (1980,
p.441). Schultz gives an example of farmers who certainly bear risks. However, they do
the same activities as their ancestors did. Their work is repetitive and very mundane. It
does not require searching for new information, but simply using past experience in
dealing with the allocation of resources. In this example, Schultz highlights that the
bearing of risk alone is not necessarily an attribute unique to entrepreneurship.
After examining the contribution of these various economists (e.g. Cantillon, Kirzner,
Knight, Schultz & Schumpeter), Hebert and Link (1989) proposed a definition of
entrepreneurship by focusing on the individual: “the entrepreneur is someone who
specialises in taking responsibility for and making judgemental decisions that affect the
location, form, and the use of goods, resources, or institutions” (p.47). These authors
claim that their new definition accommodates, within a market system, a range of
entrepreneurial activities such as coordination, arbitrage, ownership, speculation,
innovation and resource allocation.
While the various concepts and views about entrepreneurship discussed above have
merit, several studies (e.g. Gartner 1990; Shane & Venkataraman 2000) carried out in
the 1990s have redefined the concept by presenting frameworks that include different
dimensions covering a range of issues. Gartner (1990) has identified two major
perspectives of entrepreneurship. The first one focuses on the characteristics of
entrepreneurship which include the entrepreneur, innovation, growth, and uniqueness.
The second one focuses on the outcomes of entrepreneurship; this perspective also
regards a situation as being entrepreneurial only if it creates value or if an individual has
gained from the outcome. Shane and Venkataraman (2000), on the other hand, defined
entrepreneurship as a study of an individual’s ability to recognise opportunities, to
evaluate, and to exploit these opportunities. This broader view is more than just firm
creation in that it includes the entrepreneurs’ abilities, as well as how value is created.
16
Taking a different approach, Smilor (1997) terms entrepreneurship as a subversive
activity because “it upsets the status quo, disrupts accepted ways of doing things, and
alters traditional patterns of behaviour” (p.341). This is in line with the seminal works
of Schumpeter (1936, 1942) where he argues that entrepreneurs carry out new
combinations and revolutionise the patterns of production. This characteristic of
revolutionising happens when entrepreneurs start a new venture (Bygrave 1989; Gartner
1990; Low & Macmillan 1988). The concept of entrepreneurship has taken many
forms. We also see that entrepreneurs are involved in franchising (Kaufmann & Dant
1998); they are not only involved in establishing new firms, but also in existing firms
when they undertake corporate entrepreneurship (Covin & Slevin 1991; Wortman
1987). They are involved in formal and informal economies (La Porta & Shleifer 2008).
Entrepreneurs are also involved in social entrepreneurship, which is entrepreneurial
ventures that aim to resolve social problems and improve society in general (Parkinson
& Howorth 2008). Since entrepreneurship takes so many different forms, it is necessary
to examine some definitional issues of entrepreneurship.
2.1.1 Plurality of definitions
The study of entrepreneurship has received attention from scholars in a variety of
disciplines such as economics, management, finance, psychology, anthropology and
sociology (Hebert & Link 1989; Ireland & Webb 2007). This multi-disciplinary interest
in entrepreneurship has given rise to a variety of theories and definitions. Several
studies have attempted to define the term entrepreneurship focusing on different aspects
(e.g. Bygrave & Hofer 1991; Kets de Vries 1996; Low & MacMillan1988). For
example, Schumpeter (1934) and Drucker (1985) focused on innovation or the creation
of new processes, methods, and new products, whereas Low and MacMillan (1988) and
Bygrave and Hofer (1991) defined entrepreneurship as creating a new organisation.
Others such as Aldrich and Zimmer (1986) and Shapero (1977) focus on the
behavioural aspects of entrepreneurship. This means that there is no single definition
that is sufficiently comprehensive to encompass all the factors of entrepreneurship. A
huge variety of definitions are seen in the literature, and the most commonly cited
definitions are identified and tabulated in Table 2.1.
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Table 2.1: Sample of Definitions of Entrepreneurship/Entrepreneur Author/Source Definition
Schumpeter (1936, p.78) Schumpeter (1942, p.132)
“Everyone is an entrepreneur when he actually ‘carries out new combinations,’ and loses that character as soon as he has built up his business, when he settles down to running it as other people run their businesses.” “The function of entrepreneurs is to reform or revolutionize the pattern of production by exploiting an invention or, more generally, an untried technological possibility for producing a new commodity or producing an old one in a new way, by opening a new source of supply of materials or a new outlet for products, by reorganizing an industry and so on.”
Carland et al. (1984, p.358)
“An entrepreneur is an individual who establishes and manages a business for the principal purpose of profit and growth. The entrepreneur is characterized principally by innovative behaviour and will employ strategic management practices in the business.”
Drucker (1985) Drucker (1995, p.28)
Defines the entrepreneur as an “innovator”. A business person who builds an enterprise without innovating is not, in his view, an entrepreneur at all. “the entrepreneur always searches for change, responds to it, and exploits it as an opportunity”
Low and MacMillan (1988, p.141)
Entrepreneurship is defined as the “creation of new enterprise”.
Bygrave and Hofer (1991, p.14)
“The entrepreneurial process involves all the functions, activities, and actions associated with the perceiving of opportunities and the creation of organizations to pursue them”. “An entrepreneurial event involves the creation of a new organisation to pursue an opportunity.” “An entrepreneur is someone who perceives an opportunity and creates an organization to pursue it.”
Kets de Vries (1996, p.865)
“An entrepreneur is an individual who is instrumental to the conception of the idea of an enterprise and its implementation”
Sharma and Chrisman (1999, p.17)
They define entrepreneurship as “acts of organizational creation, renewal, or innovation that occur within or outside an existing organisation”
Shane and Venkataraman (2000, p.218)
They define entrepreneurship as being when “opportunities to create future goods and services are discovered, evaluated, and exploited”
Hisrich, Peters, & Shepherd (2005, p.8)
“Entrepreneurship is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic, and social risks, and receiving the resulting rewards”
Kurakto & Hodgetts (2001, p.4) Kuratko & Hodgetts (2004, p.43)
“Entrepreneurs are individuals who recognize opportunities where others see chaos or confusion.” “Entrepreneurship is a process of innovation and new-venture creation through four major dimensions – individual, organizational, environmental, process – that is aided by collaborative networks in government, education, and institutions.”
18
As can be seen from the table above, identifying a comprehensive definition of
entrepreneur or entrepreneurship is a challenging task, since there is enormous variety
in definitions, some of which do not overlap, each focusing on certain aspects with
regard to what constitutes an entrepreneur or entrepreneurship. Considering the vast
array of divergent views, Bygrave and Hofer (1991) observe that “entrepreneurship
scholars have been embroiled in a never-ending debate over the definition of an
entrepreneur” (p. 13). However, Baumol (1993) considers that definitions are
“complementary rather than competitive, each seeking to focus attention on some
different feature of the same phenomenon” (p.198). It is evident from the review of the
literature that entrepreneurship has evolved from the mere use of resources in order to
survive, to the creative use of resources in order to stimulate wealth (Murphy, Liao &
Welsh 2006). To create wealth, the entrepreneur has to identify opportunities, deal with
uncertainty and be exposed to risk.
As seen in the above discussion, it could be surmised that definitions of
entrepreneurship draw from multiple theoretical perspectives. As Murphy, Liao and
Welsch (2006, p.13) put it, “the body of entrepreneurship research is stratified, eclectic,
and divergent”, generating “many theories and frameworks”. However, a closer scrutiny
of the definitions listed above indicated four aspects that are common to
entrepreneurship: opportunity recognition, risk taking, business creation, and business
growth. The next section examines the role of the individual in the process of
entrepreneurship.
2.2 Entrepreneur’s background
A review of the definitions of entrepreneurship would clearly point out that an
entrepreneur is a central entity to a firm (e.g. Fastré & Van Gils 2007; Kuratko &
Hodgetts 2001; van Praag 2005). As an individual, an entrepreneur is the source of
action that takes place in a firm. Therefore, it is crucial to understand the role of the
entrepreneur in successfully establishing and managing the growth of a firm. In a
business context, establishing a successful firm requires an entrepreneur to deal with
complex scenarios and situations. Not all individuals take up entrepreneurship as their
career option, and not all those who become entrepreneurs are successful. Obviously,
19
the greatest determinant of business success is the entrepreneur himself or herself
(Sahin, Nijkamp & Rietdijik 2009). By behaving entrepreneurially, the individual
engages in a process that creates value for the firm by recognising and exploiting
opportunities.
Within a particular context, the effectiveness of entrepreneurs is influenced by both
demographic and personality characteristics (Sahin, Nijkamp & Rietdijik 2009).
Demographic characteristics have been examined by a number of studies covering
various aspects such as age, gender, and educational backgrounds, characteristics which
have been examined in previous studies (e.g. Kim, Aldrich & Keister 2006; Kourilsky
& Walsad 1998). Personality-related aspects studied include personality traits (Collins,
Hanges & Locke 2004; Rauch & Frese 2007a & 2007b), entrepreneurial skills and
competencies (Ahmad et al. 2009; Man, Lau & Chan 2002), entrepreneurial behaviour
(Collins, Hanges & Locke 2004; Endres & Woods 2006), and entrepreneurial self-
efficacy (Chen, Greene & Crick 1998; DeNoble, Jung & Ehrlich 1999). It is therefore
felt that individuals with the appropriate demographic and personality factors would
perform the role of entrepreneur effectively. Among other theoretical constructs, our
study examines entrepreneurs’ personal backgrounds, specifically focusing on their
personality characteristics. However, I will briefly mention the role of demographic
characteristics below, as they also form a part of entrepreneurs’ background details.
2.2.1 Demographic characteristics
The most popular demographic characteristics examined by scholars of
entrepreneurship are: age (Colombo & Delmastro 2001; Lévesque & Minniti 2006),
gender (Blanchflower 2004; Kolvereid, Shane & Westhead 1993; Mazzarol et al. 1999),
education (Blanchflower 2004; Colombo & Delmastro 2001; Robinson & Sexton 1994)
and work experience (Blanchflower & Meyer 1991; Colombo & Delmastro 2001). But
there were also other demographic characteristics that were considered. These include
family support (Pistrui et al. 2000), previous employment (Mazzarol et al. 1999;
Robinson & Sexton 1994), ethnicity (Aldrich & Waldinger 1990), immigrant status
(Thandi & Dini 2010) and religion (Audretsch, Boente & Tamvada 2007; Nunziata &
Rocco 2011). The impacts of the demographic characteristics varied in different
20
contexts, but were found to be important for those taking up entrepreneurship as a
career.
Some findings from studies on the demographic characteristics are discussed here.
Colombo and Delmastro (2001) found that entrepreneurs engaged in a high-tech
business had similar backgrounds with regard to age, level of education and experience.
Lévesque and Minniti (2006) found that the probability of starting a business increases
with age up to 35 years, after which it decreases. Pistrui et al. (2000) compared
entrepreneurs in eastern and western parts of Germany as to the role of family support
on entrepreneurship. These authors found that entrepreneurs from the western parts of
Germany believed that they had more family encouragement compared to those from
the east. They also found that a large percentage (60 per cent) of the German
entrepreneurs from the western side had at least one of their parents who was an
entrepreneur, and some of them inherited their parents’ business and / or had had family
investors. Ciavarelli et al. (2004) found that entrepreneurs’ relevant industry experience
was significantly related to the survival of the venture. Their previous experience helped
them to reduce environmental uncertainty, as they could easily connect with the
suppliers or customers and establish networks, thereby improving the chance of the
survival of their venture.
Of late, research that focused merely on demographic characteristics of entrepreneurs
has been on the decline. Recognising that starting a business is a risky decision,
Koellinger, Minniti and Schade (2007) assert that it is not just the objectively
measureable socio-demographic variables that are important for entrepreneurial
behaviour; instead, it is the subjective preferences and perceptions of the entrepreneurs
that have a significant impact on entrepreneurial behaviour. Consequently, in the last
decade or so, the focus of research in understanding entrepreneurs has shifted from
entrepreneurs’ socio-demographic variables to their personality characteristics,
competencies and success (e.g. Rauch & Frese 2007a, 2007b; Man, Lau & Snape 2008).
Therefore, examining non-demographic variables such as entrepreneurs’ personality
characteristics, self-efficacy and behavioural activities is critical to our understanding of
entrepreneurial behaviour and performance. The next section examines the personality
characteristics of entrepreneurs.
21
2.2.2 Personality characteristics
Since an individual is at the centre of entrepreneurship, scholars in this field have been
concerned about the role of individual attributes of entrepreneurs embedded in his or her
personality. From this perspective, it is felt that “there is a trait or a set of traits that
characterise an entrepreneur and are predictive of entrepreneurial behaviour (Chell
2008, p. 83). Therefore, these personality characteristics are considered to be “stable
over time and provide the reasons for the person’s behaviour” (Mount et al. 2005, p.
448). These traits determine an individual’s affective, behavioural and cognitive style.
These are concerned with the emotions, actions and conscious mental activity
respectively of the individual concerned. Since these traits have been conceptualised as
having the propensity to act, scholars have assumed that personality traits are predictors
of entrepreneurial behaviour (Rauch & Frese 2000).
A review of the extant literature reveals the importance of personality factors in shaping
up an individual’s decision to become a founder of a business (Brockhaus 1975;
Hisrich, Langan-Fox & Grant 2007; Jennings & Zeithaml 1983; Shaver & Scott 1991).
The foundation for research in this area was provided by Mill (1848) who highlighted
that the assumption of risk is a key part of entrepreneurial activity. Then, there was an
emphasis on innovation that could bring new and more efficient products and services
(Schumpeter 1934). While scholars such as Mill and Schumpeter have explained
entrepreneurship activities and their environment, the focus then shifted to the person
involved in entrepreneurship, i.e. the entrepreneur (Shaver & Scott 1991). It was
believed that the entrepreneur had a number of personality characteristics that
distinguished him or her from others. This was consistent with the literature around that
time on vocation-person fit, which proposed that people choose their occupation on the
basis of their personalities, needs and values (Holland 1985).
The stream of research on entrepreneurial personality received a significant impetus
from scholars such as McClelland (1961), Hornaday and Aboud (1971), Brockhaus
(1980b) and Scheré (1982), to name but a few. The pioneering research of McClelland
(1961) shows the need to achieve (nAch) as a very important predictor of
entrepreneurial behaviour. According to his theory, individuals high in need for
achievement will be attracted to taking up an entrepreneurial career and will perform
22
well because of their tendency to excel and a continuous need to improve their
performance. Subsequent research by several scholars (Collins, Hanges & Locke 2004;
Hornaday & Aboud 1971) indicated similar associations between the need for
achievement characteristics of entrepreneurs and their entrepreneurial intention (as well
as behaviour).
Another personality characteristic of entrepreneurs identified is the internal locus of
control proposed by Rotter (1966). Scholars have identified this characteristic as being
linked with the individual’s intention to start a business (Brockhaus 1982; Seligman
1990) and also firm performance (Boone, Brabander, & Witteloostuijn 1996).
Likewise, strong empirical evidence was found to show that innovativeness is a
predictor of entrepreneurial intention (Sexton & Bowman-Upton 1986) and that
entrepreneurs have a higher level of innovative preference than managers (Carland &
Carland 1991). Another personality characteristic of entrepreneurs, namely a risk-
taking propensity, was found to be strongly associated with entrepreneurial intention
(Zhao, Seibert & Lumpkin 2010) and it was also found that entrepreneurs displayed a
significantly higher risk-taking propensity compared to small-business owners and
managers (Carland et al.1995).
Entrepreneurs were also found to have more tolerance for ambiguity than top executives
and managers, since entrepreneurs have to deal with the uncertainty inherent in the
entrepreneurial environment (Scheré 1982). It is seen that individuals who manifest
higher levels of ambiguity tolerance perceive the uncertainty in the environment
positively as desirable, and deliberately seek such situations (MacDonald 1970; Gasse
1982). Yet another important characteristic identified was need for autonomy, which is
said to drive entrepreneurship (Brandstatter 1997). Individuals with this characteristic
will prefer to avoid restrictive environments and make independent decisions by setting
up their own goals and ways to achieve those goals. Therefore, individuals with a high
need for autonomy were found to be motivated to choose to be self-employed (Carter et
al. 2003; Feldman & Bolino 2000), as they would be in control of their decisions and
avoid restrictive rules of established organisations.
23
Some recent studies have gone further to not only look at personality characteristics of
entrepreneurs, but also to examine the relationship between personality traits and
business creation and success (e.g., Barrick & Mount 2005; Zhao & Seibert 2006).
Scholars believe that entrepreneurs engage in both innovation processes and job
creation (Carree & Thurik 2003; Wong, Ho & Autio 2005), and in this process, they
organise a firm by coordinating the resources required to exploit market opportunities
under conditions of uncertainty (Alvarez & Barney 2005). In this context of uncertainty
and risk, entrepreneurs must possess some traits that enable them to go through the risky
process of business venturing (Bouchikhi 1993). This clearly points out the need for
examining personality characteristics such as risk propensity, among others.
Another stream of study focused on the importance of decision making and a venture’s
success. Researchers believe that during the entrepreneurship process, entrepreneurs
face decision-making situations that will determine the success of their venture.
Clearly, entrepreneurs need to not only possess knowledge, but also a variety of skills
and abilities which in turn are influenced by personality characteristics (Caliendo,
Fossen & Kritikos 2014).
On the premise that personality characteristics are critical for entrepreneurship, scholars
have identified several characteristics. A sample of these personality characteristics is
shown in Table 2.2.
24
Table: 2.2 Personality characteristics examined in entrepreneurship studies Personality Characteristics
Authors
Need for Achievement McClelland 1961; Collins, Hanges & Locke 2004; Cromie 2000
Locus of control Rotter 1966; Caliendo, Fossen & Kritikos 2014; Mueller & Thomas 2001
Risk taking Kihlstrom & Laffont 1979; Caliendo, Fossen & Kritikos 2014; Wagener, Gorgievski & Rijsdijk 2010
Innovativeness & Creativity
Bartram 2005; Mazzarol & Reboud 2006; Mueller & Thomas 2001; Utsch and Rauch 2000
Need for autonomy Brandstatter 1997; Carter et al. 2003
Tolerance of ambiguity Wagener, Gorgievski & Rijsdijk 2010
Assertiveness Caliendo & Kritikos 2008
Independence Wagener, Gorgievski & Rijsdijk 2010; Cromie 2000
Stress tolerance Frese 2009
Self-reliance Lee & Tsang 2001
Extroversion Lee & Tsang 2001
Self-confidence Kirkwood 2009
Persistence Cromie & Johns 1983
Trust Caliendo, Fossen & Kritikos 2012
Reciprocity Caliendo, Fossen & Kritikos 2012
Determination Cromie & Johns 1983
Initiative Utsch & Rauch 2000
Passion for work Frese 2009
Proactive personality Crant 1996; Frese 2009
The table above shows a list of 19 popular personality characteristics found in the
literature. I have already discussed some of these personal characteristics that
distinguish entrepreneurs. Further, Rauch and Frese (2007a) have conducted a meta-
analysis of personality characteristics in entrepreneurship recently and identified a list
of 51 personality characteristics that formed part of the studies included in their
analysis. The detailed results of this study will be discussed later in this chapter, but it is
important to point out that this study found evidence to positively link entrepreneurs’
25
personality characteristics with business creation, and that certain personality traits had
higher correlations as they matched with the entrepreneurial tasks.
In contrast to the above studies, researchers such as Aldrich (1999), Blanchflower and
Oswald (1998), who tried to explain entrepreneurship using personality traits, could not
derive any significant findings. Likewise, Brockhaus and Horwitz (1986) also examined
the relationship between the personality traits of entrepreneurs and business creation,
but could not find any supporting evidence. It is not surprising, then, when Gartner
(1985) argues that using a person-centric approach to document a typical entrepreneur
may not be useful, since there is a significant amount of diversity amongst the types of
entrepreneurs, and the variation among them is even larger than the difference between
an entrepreneur and a non-entrepreneur. Due to this heterogeneity among entrepreneurs,
an ‘average entrepreneur’ does not exist, and an average personality profile of
entrepreneurs cannot be arrived at.
In a context of scepticism over whether personality characteristics impact on
entrepreneurship, Low and MacMillan (1988) question the very purpose of personality-
based research, since most of the studies were “confined largely to documenting and
reporting the [entrepreneurs’] personality characteristics, with little attempt to uncover
causal relationships or to explore implications for practice” (p.141), and they argue that
such personality-based descriptive studies do not help in theory development. Even a
couple of decades later, the lack of an appropriate research approach was observed by
Rauch and Frese (2007a), who point out that many studies in this area “were not
theoretically driven but were descriptive in nature” (p. 358). Not surprisingly, some
authors (Aldrich 1999; Chell 1985; Gartner 1985) have already advocated that it was no
longer useful to study personal characteristics of entrepreneurs as such. Probing this
issue further, Delmar (2000) argues that the study of personality traits in
entrepreneurship is obsolete. Some of the reasons for his belief lie in the limitations of
using personality traits to profile entrepreneurs. For instance, the traits identified consist
of a large list and there is not much of a consistency in the traits identified and linked to
entrepreneurship. Further, these traits are not static, change over a period of time, and
may also be culture-dependent, as most of these studies are US-based. Delmar (2000)
also argues that instead of using multi-dimensional constructs, personality studies are
26
using one-dimensional constructs which are obsolete in relation to modern
psychological research.
As seen in the above discussion, several personality traits/characteristics were used to
profile entrepreneurs. But a more important issue is to examine how these traits impact
on entrepreneurs when they engage in entrepreneurial initiatives. It is important to
recognise that scholars have differentiated between broad and specific personality traits.
The following discussion, therefore, highlights the role of personality characteristics,
both broad and specific types, in influencing entrepreneurial initiatives.
2.2.2.1 Broad personality traits
This stream of research on personality traits has identified several traits, resulting in a
large and diverse list of personality characteristics, for example as seen in Table 2.2.
However, evidence suggests that all the personality traits can be reduced to, or
categorised into, five broad personality categories of traits or characteristics, and
popularly known as the Big Five (Costa & McCrae 1992; Digman 1990). It is suggested
that all the individual personality traits can be viewed as being part of, or embedded in,
one of the Big Five constructs: emotional stability, extraversion, openness to
experience, agreeableness and conscientiousness. The Big Five model has been used by
several researchers to identify and examine the relationships between personality traits
and entrepreneurial aspects such as status and intention.
Previously, the Big Five constructs were examined by several scholars in organisational
and leadership studies (Alessandri & Vecchione 2012; Barrick, Mount & Judge 2001).
For example, in the last two decades, the Big Five model was used to understand
individual differences (Goldberg 1993), predict academic performance of students,
academic motivation (Komarraju, Karau & Schmeck 2009), or understand job
preferences, career successes and job performances (Barrick & Mount 1991; Mount et
al. 2005).
In the entrepreneurship research, studies were undertaken in the Big Five model by
various scholars over the years (Norman 1963; Borgatta 1964; Digman 1990; Costa &
McCrae 1992; Ciavarell et al. 2004; Zhao & Seibert 2006). In the process of
27
development, scholars have identified their own big five constructs (e.g. Norman 1963,
Borgatta 1964). While the list of the Big Five has undergone some changes over the
period, recent studies have finally coalesced around the five constructs, based on the
taxonomy developed by Costa and McCrae (1992). The constructs of the Big Five
model and their corresponding traits are presented in Table 2.3.
Table 2.3 Summary of the Big Five characteristics and their corresponding traits Big Five characteristics Traits Extraversion Assertive, dominant, energetic, active, talkative,
and enthusiastic Emotional stability Positive: calm, even-tempered, self-satisfied,
comfortable, unemotional, hardy, stable, confident, and effective Negative: Anxiety, hostility, depression, self-consciousness, impulsiveness, and vulnerability
Agreeableness
Trusting, forgiving, caring, altruistic, gullible, being courteous, flexible, good-natured, cooperative, soft-hearted and tolerant
Conscientiousness Responsible, well-organised, planful, hardworking, achievement-oriented, motivated, and perseverance
Openness to experience Being imaginative, creative, cultured, curious, original, broadminded, intelligent, artistically sensitive, innovative
Source: Costa and McCrae 1992; Caliendo, Fossen & Kritikos 2014; Ciavarella et al. 2004; Judge et al. 1999; Zhao & Seibert 2006
Each of the Big Five constructs is briefly discussed below. The first construct is
extraversion and relates to the individual being assertive, ambitious, socially oriented,
and seeking leadership roles (Judge et al. 1999). Research findings indicate extraversion
is a clear predicator of performance for managers and salespeople (Barrick & Mount
1991). Being extraverted makes individuals sociable and helps in the development of
social networks (Casciaro 1998). Extraversion is therefore seen to have a positive
impact on networking activities (Zhao & Seibert 2006). This ability to establish
networks with suppliers and customers is likely to increase the chances of venture
success (Baron & Markman 2000).
28
The second construct is emotional stability (which is similar to neuroticism in its
negative specification). Individuals with high emotional stability will be even-tempered
and have the ability to maintain relationships (Ciavarella et al. 2004). Emotionally
stable individuals will be more self-confident, stay relaxed in times of pressure and will
be more able to tolerate stress situations (Caliendo, Fossen & Kritikos 2014, Judge et al.
1999). Scoring low on this factor would mean that individuals would be more likely to
experience a multitude of problems such as anxiety, fear, depression and irritability
(Judge et al. 1999). Therefore, individuals with high emotional stability are expected to
become entrepreneurs (Caliendo, Fossen & Kritikos 2014). Entrepreneurs who have
high emotional stability will be able to manage anxiety, address their well-being and,
thereby, manage performance pressures and expectations. Ciavarella et al. (2004) did
not, however, find any relationship between the entrepreneur’s emotional stability and
the survival of the business venture. On the other hand, Zhao, Seibert and Lumpkin
(2010) did find that high emotional stability was positively related to entrepreneurial
intentions as well as performance. The ability to stay calm and even-tempered increases
the likelihood of the entrepreneur being able to perform better.
The third factor is agreeableness, which is related to individuals being co-operative as
well as likeable. A high score on agreeableness means that individuals are co-operative,
courteous and flexible in dealing with others. This may be particularly important where
teamwork and customer service is important. On the other hand, a low score on
agreeableness implies that such individuals are self-centred, inflexible and bargain hard.
In the area of entrepreneurship, researchers (Ciavarella et al. 2004; Baron & Markman
2000) posit that this type of trust and cooperation in the business relationships result in
entrepreneurs’ ability to enter new businesses, achieve new product development,
increase shareholder wealth, and in the likelihood of long-term venture survival.
However, others scholars (Zhao & Seibert 2006; Caliendo, Fossen & Kritikos 2014)
refer to the negative effects of this personality trait, stressing that entrepreneurs who
score highly on agreeableness and in their efforts to please others might restrain
themselves from making the hard bargains which are necessary for improved
performance.
29
The fourth factor is conscientiousness, which is characterised by achievement
orientation, dependability, and orderliness (Ciavarella et al. 2004; Judge et al. 1999).
This trait was found to be a predicator of job performance for both managers and
salespersons (Barrick & Mount 1991). Individuals with this characteristic can
overcome obstacles because they are hard-working, dutiful, dedicated, and persevere to
succeed, thereby increasing the likelihood of venture survival and a longer lifespan for
the venture. This personality characteristic is manifested in three related facets:
achievement orientation (hardworking and persistent), dependability (responsible and
careful), and orderliness (planful and organised). Recent empirical evidence provides
support for the contention that conscientiousness at work is positively linked to positive
job behaviour and performance (Judge et al. 1999). In the area of entrepreneurship, as
seen earlier, the trait of achievement orientation is linked to successful entrepreneurship
(McClelland 1961) and entrepreneurs working very hard and for long hours (Barrick &
Mount 1991). However, there is not much evidence linking individuals who are ‘hard
working or dutiful’ with entrepreneurship. In fact, it is argued that the trait of being
dutiful is negatively linked to entrepreneurial development (see Rauch & Frese
2007a). It is suggested that the personality characteristic of being dutiful is more suited
to employees than entrepreneurs (Caliendo, Fossen & Kritikos 2014). Conventional
wisdom indicates that conscientiousness is positively related to entrepreneurship.
However, recent scholars argue that if the overall construct of conscientiousness is used
to predict entrepreneurial success, there could a possibility of contradictory effects
within the construct (Caliendo, Fossen & Kritikos 2014; Rauch & Frese 2007a).
The fifth construct of the Big Five is openness to experience. Individuals with this
attribute are seen as being intellectual, intelligent and open to new ideas and experiences
(Ciavarella et al. 2004). Perhaps, among the Big Five constructs, this trait is probably
closest to the innovation aspect proposed by Schumpeter (1934). Individuals who score
highly on this characteristic should be creative, innovative and curious (McCrae 1987),
and high in cognitive ability (Barrick & Mount 1991). Therefore, such individuals are
expected to possess ideas that are original and be open-minded. This should allow an
entrepreneur to acquire new knowledge and innovative thinking to develop new
strategies and, in doing so, improve the life span of the new venture. Therefore,
Caliendo, Fossen & Kritikos (2014) expect that the higher an individual’s openness to
30
experience, the greater the probability of that individual becoming an entrepreneur, or
even surviving as an entrepreneur.
Researchers from the entrepreneurial discipline have applied the Big Five constructs to
examine their role in predicting entrepreneurial performance (e.g., Ciavarella et al.
2004; Zhao & Seibert 2006; Zhao, Seibert & Lumpkin 2010). A study by Ciavarella et
al. (2004) posited that the Big Five personality attributes would provide a measure of
the entrepreneur’s personality. Their findings revealed mixed results. While
conscientiousness was positively related to long-term venture survival, openness to
experience was negatively related; the other three characteristics (extraversion,
emotional stability and agreeableness) were unrelated to the long-term survival of the
firm. In a subsequent study, Zhao and Seibert (2006) argued that the Big Five model is a
better approach as it has withstood the reliability and validity tests vis-a-via the specific
traits approach; they also believed that Big-Five personality characteristics are better
predictors of entrepreneurial status, and can also help in differentiating between
entrepreneurs and non-entrepreneurs. These authors suggest that entrepreneurs are of
various types and need matching skills and processes. For example, entrepreneurs who
are open to experience are more likely to start ventures where new technologies are
applied, while entrepreneurs who are associated with extraversion are more likely to
engage in a venture that requires a sales approach. In a recent study, Caliendo, Fossen &
Kritikos (2014) found that the three of the Big Five traits, i.e., openness to experience,
extraversion and emotional stability, increase the probability of an individual’s entry
into self-employment.
However, some scholars have expressed concern about the use of broad personality
characteristics such as the Big Five attributes (e.g., Ciavarella et al. 2004; Caliendo,
Fossen & Kritikos 2014). The Ciavarella et al. (2004) study shows that only one
construct, namely conscientiousness, was positively related to long-term venture
survival, and others are either not related at all or negatively related. Further, each of
these broad personality characteristics have different specific traits or components, and
the effect may not be in the same direction. Dudley et al. (2006) also found that the
general traits approach is not sufficiently related to entrepreneurial tasks. Although
Zhao and Seibert (2006) tried to promote the Big Five approach, Rauch and Frese
31
(2007a) criticised them for including both broad and specific traits in the same rubric,
thereby making it difficult to examine the best predicators for the entrepreneurial tasks.
Caliendo, Fossen and Kritikos (2014) point out that conscientiousness has two
components, namely achievement-orientation and being dutiful; while achievement-
orientation has a positive effect, being dutiful has a negative effect on entrepreneurial
activity. Thus, these two components of conscientiousness will have contradictory
effects within the construct.
Due to the above concerns with regard to the Big Five model, there is debate amongst
researchers as to whether broad personality traits or specific personality traits are key to
entrepreneurial performance becoming important (Hansemark 2003; Barrick & Mount
2005; Dudley et al. 2006; Rause & Frese 2007a). Hansemark (2003) strongly argued
that we should only abandon personal characteristics if there is concrete evidence that
they play no role in an individual’s entrepreneurial efforts. Taking a clear positive stand,
Barrick and Mount (2005) advocated using specific personality characteristics in
predicting entrepreneurial performance because they found that the narrow traits “rely
on explicit description of entrepreneurial activities that may be situated in time and
place and role” (2005, p.367). Further, Rauch and Frese (2007a) believe that
researchers should rely on (specific / narrow) personality traits that are more directly
relevant to entrepreneurship activities, since they will be better predictors of
entrepreneurial performance. Some of these specific or narrow characteristics include
need for achievement, risk-taking propensity, innovativeness, locus of control, need for
autonomy, determination, initiative, creativity, self-confidence and trust, to name but a
few. As Zhao and Seibert (2006) have pointed out, the types of entrepreneurs vary, and
individual personality characteristics may need to match those types and also the
contexts in which they operate.
32
2.2.2.2 Specific entrepreneurial personality traits
Due to the limitations of the Big Five personality model in entrepreneurship research,
recent studies in entrepreneurship have moved away from this approach. As mentioned
in the preceding section, specific or narrow personality traits were again highlighted for
their impact on an individual’s entrepreneurial efforts. For example, Rauch and Freese
(2007a) point out that specific personality traits that match personality and work
characteristics are more likely to predict entrepreneurial behaviour. Endorsing the need
for “putting the person back into entrepreneurship research” (p. 353), the authors argue
that there is a relationship between business owners’ personalities and business creation
as well as business success, but the personality traits vary for different phases of
entrepreneurship such as start-up activities (e.g., identifying opportunities, organising
resources, starting the venture) through to business success (venture performance and
survival).
Evidence shows a revival of research interest in personality traits in entrepreneurship
studies (Tang & Tang 2007). Some specific personality traits linked to entrepreneurship
tasks are innovativeness (Bausch & Rosenbusch 2005; Heunks 1998), need for
achievement (Lee & Tsang 2001; Littunen 2000; Stewart & Roth 2007), proactive
personality (Baum, Locke & Smith 2001; Crant 1996; Rauch & Freese 2007a), stress
tolerance (Rauch & Freese 2007a), need for autonomy (Brandstatter 1997; Cromie
2000), risk-taking propensity (Brockhaus & Horwitz 1986; Caliendo, Fossen & Kritikos
2014; Douglas & Shepherd, 2002; Shaver & Scott 1991), generalised self-efficacy
(Chen, Gully & Eden 2004; Rause & Frese 2007a) and internal locus of control
(Caliendo, Fossen & Kritikos 2014; Littunen 2000; Rotter 1966). While there is
enough literature about each of these popular personality traits, the findings of some
popular studies are summarised in Table 2.4.
33
Table 2.4 Specific personality traits Specific personality traits
Dimensions Authors
Need for achievement
Work ethic Pursuit of excellence Mastery Dominance
Littunen (2000); Lumpkin & Erdogan, (2004); Stewart & Roth (2007).
Locus of control Chance Internal Powerful others
Brockhaus (1975, 1980a); Caliendo, Fossen & Kritikos (2014); Harper (1998); Lee & Tsang (2001); Littunen (2000).
Risk-taking propensity Ability to handle risk, ability to evaluate risk, copes well with uncertainty, enjoys taking risks, willingness to take chances
Brockhaus (1980b); Buttner & Rosen, (1988); Hartog, Ferrer-i-Carbonell & Jonker (2002); Stewart and Roth (2001)
Proactivity Propensity to act Tendency towards action Initiative Perseverance
Baum, Locke & Smith (2001); Bird (1989); Crant (1996)
Passion Emotional energy Devotion Enthusiasm
Baum, Locke and Smith (2001); Bird (1989); Chen, Yao, & Kotha (2009); Smilor (1997)
Energy level Overall level of functioning in carrying out day-to-day activities i.e. enthusiasm and endurance
Thomas and Mueller (2000)
Innovativeness and creativity
Introduction of new goods Introduction of new methods of production Opening of new markets Industrial reorganisation
Carland et al. (1984); Harris, Gibson & Mick (2009)
Many studies have identified and examined the impact of a single trait. For instance,
locus of control and firm performance ( Boone, Brabander & Witteloostuijn 1996), risk-
taking propensity and entrepreneurship (Brockhaus 1980) or need for achievement and
entrepreneurial behaviour (Collins, Hanges & Locke 2004). While there are many traits
identified as being important for entrepreneurs, three traits have been given much
attention and have been commonly applied in research in entrepreneurship (see Sahin,
Nijkamp & Rietdijk 2009; Tang & Tang 2007). These are: need for achievement,
internal locus of control and risk-taking propensity. Further, in an exhaustive study on
entrepreneurial personality, Chell (2008) refers to these very three specific
characteristics as ‘The Big Three’. For these reasons, I have also chosen these three
personality characteristic in my study. Each of them is discussed below:
34
2.2.2.2.1 Need for achievement
One of the most widely discussed psychological measures in entrepreneurship literature
is the personal characteristic of the need for achievement (Collins, Hanges & Locke
2004; Hornaday & Aboud 1971; McClelland 1961). The term is used to describe a
person’s desire for excellence (Cassidy & Lynn 1989). Initially, this concept was
proposed by Murray (1938, cited in Shaver and Scott 1991). According to Murray, the
need for achievement means:
“To accomplish something difficult. To master, manipulate, or organize physical objects, human beings, or ideas. To do this as rapidly, and as independently as possible. To overcome obstacles and attain a high standard. To excel one’s self. To rival and surpass others. To increase self-regard by the successful exercise of talent” (Murray, 1938, p.164, cited in Shaver & Scott, 1991, p.31).
Later on, this concept was examined in depth by McClelland (1961) as referring to a
drive to excel or to achieve a goal. This characteristic is very important as it influences
an individual’s work behaviour to a great extent (Lumpkin & Erdogan 2000). The need
to achieve gives rise to an individual’s expectation of doing something better or faster
than others or even their own personal accomplishments (Hansemark 2003). Such
individuals are high achievers and like situations where they take personal responsibility
and also find solutions to challenges and problems. Achieving targets results in feelings
of accomplishment and satisfaction for them.
In a business context, entrepreneurial occupations provide the opportunities for
individuals who have a high need for achievement (Collins, Hanges & Locke 2004).
According to Littunen (2000), McClelland’s theory suggests that individuals with a high
need for achievement will not only become entrepreneurs but also succeed better than
others in their careers as entrepreneurs. Several studies examined the role of need for
achievement in the entrepreneurship field. In one of the early studies (McClelland
1965), students with a higher need for achievement were found to gravitate towards
business occupations of an entrepreneurial nature. Johnson (1990) reviewed previous
studies on achievement motivation and found a positive relationship between
achievement motivation and entrepreneurship in 20 out of 23 studies. Other studies that
differentiated entrepreneurs from non-entrepreneurs found that entrepreneurs generally
35
have a higher need to achieve than non-entrepreneurs (e.g. McClelland 1965; Langan-
Fox and Roth 1995; Stewart & Roth 2007). A study of female entrepreneurs revealed
the existence of this personality characteristic among them. Langan-Fox and Roth
(1995) developed a typology of female entrepreneurs, namely the need achiever, the
pragmatic and the managerial entrepreneur. Of these, the need achievers scored very
highly on the need achievement, and the managerial entrepreneurs scored highly on
power and influence, with the pragmatics scoring moderately on both motivations of
achievement and power. It can be seen, then, that the need for achievement has an
impact on both male and female entrepreneurs. Bridge, O’Neill and Cromie (2003),
suggest that enterprising people have a need for achievement. It is this need for
achievement that stimulates the individuals to take action (behavioural activities). These
authors also suggest that the high achiever will regard money as a measure of
achievement and in this case, money is not an end in itself, but rather something that
provides an entrepreneur with feedback on their achievement.
Studies were also undertaken to examine the impact of the need for achievement on
venture performance (e.g., Begley & Boyd 1987; Davidsson 1989; Lee & Tsang 2001).
Begley and Boyd (1987) found a positive correlation between achievement orientation
of entrepreneurs and the growth rate of their firms. Later, Davidsson (1989) found a
positive relationship between need for achievement and the willingness of the small
business owner to pursue venture growth. Stewart et al. (1999) conducted a study of 767
small business owner-managers and corporate managers in the US; the small owner-
managers were further categorised into an entrepreneur and the small business owner,
and were compared with the corporate managers. The results showed that owner-
managers who were categorised as entrepreneurs were higher in achievement
motivation compared to the other two groups, namely small business owners and
corporate managers. In a recent study, Stewart and Roth (2007) identified need for
achievement as an important characteristic for founders who are keen on growing their
firms. Lee and Tsang’s (2001) study of entrepreneurs in Singapore found that this
personality trait has the greatest impact on venture performance. These authors found
that Singaporean entrepreneurs’ fear of failure makes them achieve business success,
which is indicated by venture growth. Collins, Hanges and Locke (2004) conducted a
meta-analysis of 41 studies and found that achievement motivation not only influenced
36
the choice of an entrepreneurial career, but was also significantly correlated with
entrepreneurial performance (measured by various constructs such as sales growth,
stock growth and self-reported scales). The authors also found that individuals with a
high need for achievement were more attracted to entrepreneurship, as this career offers
them a high degree of control over outcomes, personal responsibility, and moderate
degree of risk as well as feedback on performance. Interestingly, these factors were also
found to be common to managers, and perhaps due to this reason, the differences
between entrepreneurs and managers were fewer compared to those between
entrepreneurs and non-managers such as engineers and scientists.
However, other scholars were not sure of such a direct relationship between the need for
achievement and entrepreneurship. For example, Hull, Bosley and Udell (1980) found
that the need for achievement is a weak predictor of an individual’s desire to start a
business. Brochhaus (1982) observed that McClelland’s empirical research did not
directly connect this characteristic with the decision to own and manage a venture. In
fact, Begley and Boyd’s study (1986) did not find any relationship between various
personality characteristics, including achievement motivation, of founders and non-
founders and business performance. Low and MacMillan (1988) also show some
reservations in mentioning the need for achievement as a characteristic unique to
entrepreneurs. Rather, they believed that it is a characteristic common to many
successful individuals. Hansemark (2003) undertook a longitudinal study of
entrepreneurs to test the predictive validity of this trait in entrepreneurial activity, and
concluded that the findings that showed successful entrepreneurs have a greater need for
achievement than unsuccessful entrepreneurs was not sufficient proof that this
personality characteristic was an important pre-requisite predicator for entrepreneurship.
This finding implies that any need for achievement characteristics may have developed
after individuals became entrepreneurs or because of entrepreneurial activity rather than
being a predicator.
Some scholars suggest that it is not adequate to focus on personality traits only. Instead,
they suggest that complex models of business venturing have to be developed to
understand the entrepreneurship process. Utsch and Rauch (2000) examined the effect
of achievement orientation on venture performance through the mediation of two
37
behavioural activities, namely innovativeness and initiative. The findings from this
study showed that achievement orientation impacted on venture performance in terms of
profit and employee growth through its impact on two mediating variables, namely
innovative behaviour and initiative. Of the two mediating variables, innovative
behaviour indicated a stronger link to performance outcomes compared to initiative
behaviour. Similarly, Korunka et al. (2003) have examined a complex configuration that
comprised entrepreneurial personality along with resources, environment and
organisational activities. Their findings from a subset of 153 new business owner-
managers (out of a 941 sample size that covered other types of managers) were very
relevant to my study. The authors found these entrepreneurs to be characterised by
strong need for achievement, and they also had a strong internal locus of control, strong
personal initiative and a medium risk-taking propensity. The effect of resources,
environment and organising activities were found to be only moderate. However, these
authors conclude that it is inappropriate to investigate the personality characteristics of
entrepreneurs in isolation from the wider contextual factors that affect patterns of
entrepreneurial activity. Therefore, it is also important to highlight the relevance of
cultural factors in the study of entrepreneurship. Unfortunately, most of the studies on
achievement orientation, as developed by McClelland (1961), were conducted only in
the US, which made Thomas and Mueller (2000) question the relevance and
applicability of the entrepreneurial personality characteristics across cultural contexts,
as they believed that the dominant values of a nation’s culture would influence its
entrepreneurs as well. Their study found that cultures of high uncertainty avoidance and
high individualism exhibit greater entrepreneurial orientation. However, some cultures
are not supportive of entrepreneurship. For example, failure in business is considered to
be a stigma in Asian countries and in some parts of Europe, while in the US, the
American norms are more forgiving and even viewed as a positive learning experience,
as they regard failure to be a step in a process of experimentation (Landier 2001). On
the other hand, Japanese culture is less forgiving of failed entrepreneurs and limits their
access to resources, thus depriving these entrepreneurs of even an opportunity for
redemption (Mitshuashi & Bird 2011). Hence the contextual factors of entrepreneurship
cannot be ignored.
38
Notwithstanding such criticism, it is argued that individuals who have a higher need for
achievement motivation will be more likely to engage in activities that are necessary to
succeed and perform well in entrepreneurial efforts (Collins, Hanges & Locke 2004;
McClelland 1965; Tang & Tang 2007). McClelland (1965) argued that individuals with
high need for achievement will be more likely to take calculated risks, research the
environment, and be willing to undertake activities where they find opportunities to
achieve something. In addition, empirical evidence has also been found to show that
need for achievement has a significant impact on venture performance (Lee & Tsang
2001; Korunka et al. 2003). Stewart and Roth (2007) confirm that high levels of
achievement motivation are associated with the demands of the entrepreneurial role.
They also highlight that in countries where the entrepreneurial environment is tougher,
the most achievement-driven individuals are the ones who will attain entrepreneurship
status. In my study context, where the sample is drawn from a large emerging market,
the environment in which entrepreneurship is pursued is quite challenging, and needs
achievement motivation. For this reason, my study investigates the role of
entrepreneurs’ need for achievement.
2.2.2.2.2 Internal locus of control
Another common personality characteristic in entrepreneurship study is the locus of
control (Littunen 2000). This construct was originally developed by Rotter (1966) and
used to describe a person’s sense of control over his or her life. Locus of control refers
to a generalised expectancy that operates across a wide range of situations, relating to
whether or not an individual has control or power over what happens to them (Rotter
1966). Within this construct, two dimensions of locus of control were identified:
internal and external. According to Lefcourt (1966, p. 207), internal locus of control
refers to “the perception of positive and / or negative events as being a consequence of
one’s own actions and thereby under personal control”, while external control refers to
“the perception of positive and / or negative events as being unrelated to one’s own
behaviours in certain situations and therefore beyond personal control”. Hence
individuals with internal locus of control believe that they determine their future
outcomes with their own actions. On the other hand, individuals with external locus of
39
control believe that their future outcomes are determined by external factors or
randomly.
As a concept, locus of control found immediate acceptance and interest in various
management disciplines. This construct was also examined in leadership studies (Durant
& Nord 1976), decision making (Kets de Vries 1977) and strategy formulation (Miller,
Kets de Vries & Toulouse 1982). Locus of control was found to be associated with job
motivation, effort, satisfaction and performance (Judge & Bono 2001; Spector 1982).
Researchers have also examined locus of control among top decision makers of
organisations and found a positive relationship with CEOs (Boone, Brabander & van
Witteloostuijn 1996) and general managers (Govindarajan 1989). Individuals with
internal locus of control would be able to take responsibility and meet challenges to
influence and lead organisations to achieve set goals.
Reviewing the research undertaken on the role of locus of control in several
organisational and managerial settings, Jennings and Zeithaml (1983) stated that the
findings of these studies mark locus of control as being pertinent for entrepreneurial
research, and advised research in this field. This concept was considered to be relevant
because entrepreneurs are self-motivated individuals who take initiatives for their
entrepreneurial efforts and take responsibility for their outcomes rather than depending
on others (McClelland 1961; Mueller & Thomas 2001). As decision-makers,
entrepreneurs regularly make decisions pertaining to their business outcome, and their
decisions will depend on how they perceive the consequence of their decisions
(Caliendo, Fossen & Kritikos 2014). Hence locus of control is expected to be an
important personality characteristic of entrepreneurs that influences their behaviour.
Due to the very nature of entrepreneurship, where the individual is the initiator of the
venture and also takes responsibility for its success, internal locus of control rather than
external locus of control attracted the attention of researchers (Borland 1974; Brockhaus
1975). Both Borland (1974) and Brockhaus (1975) examined business students and
found that those who had entrepreneurial intentions (starting their own business in the
future) possessed a higher internal locus of control than those who did not have such
plans. Locus of control was also used to distinguish successful entrepreneurs from
40
unsuccessful ones (Brockhaus 1980a, 1982) and entrepreneurs from non-entrepreneurs
(Aldrich & Zimmer 1986). In another study, Cromie and Johns (1983) also found that
practicing entrepreneurs have significantly more internal locus of control than
managers. They believed that individuals who have more internal locus of control are
less likely to allow external events to dominate their lives, and are also more proactive
than reactive when coping with their environments.
Internal locus of control was found to be more effective in dealing with risk. Externals
(i.e., individuals with external locus of control) are known to be associated with non-
risky / conservative behaviour (Boone, Brabander & van Wittelootuijn 1996;
Govindarajan 1989), while internals (ie., individuals with internal locus of control, who
therefore have a high level of perceived control) prefered entrepreneurial behaviour that
takes risks (Boone, Brabander & van Wittelootuijn 1996; Hansemark 2003; Mueller
and Thomas 2001). A person with high internal locus of control assumes that they can
use their effort and skill and thereby control events in their lives (Boone, Brabander &
van Wittelootuijn 1996). Since internal locus of control belief endows entrepreneurs
with a perception of being in control, it is also a necessary personality characteristic that
is closely related to their propensity to act (Shapero 1982). Hence, it could be surmised
that an ability to take initiatives and responsibility are associated with the personality
characteristic of internal locus of control.
While the concept of locus of control was being examined by researchers, there was an
ongoing debate about what constitutes the construct itself. As mentioned earlier, the
construct of locus of control was first proposed by Rotter (1966), and the measurement
scale consisted of 23 dichotomous forced choices representing end points of a
unidimensional scale, which meant that the individual’s locus of control varied along
the internal-external continuum. Many studies have used this Rotter’s internal-external
(I-E) Scale (e.g., Ahmed 1985; Cromie & Johns 1983, Pandey & Tewary 1979;
Timmons 1978). However, Shaver and Scott (1991) believe that these studies have
made a tactical mistake because Rotter’s I-E scale had been developed with the
intention of studying locus of control as a broad construct to study behaviour in diverse
situations. The global I-E scale, which captures all aspects of locus of control, may not
be the best way to measure a specific setting such as new venture creation, since not all
41
of the dimensions measured in this scale were equally plausible predictors of
entrepreneurship (Gatewood, Shaver & Gartner 1995; Shaver & Scott 1991). Other
scholars such as Levenson (1974) have further split the external dimension into Chance
and Powerful Others. The latter dimension (ie., ‘Powerful Others’) is uniquely useful in
examining differences in cross-cultural differences based on political and economic
philosophies and their impact on entrepreneurship. Bonnet and Furnham (1991) used a
three-dimensional locus of control scale that included internal, external, and chance
aspects, as they were concerned that Rotter’s uni-dimensional scale is limited in its
coverage. They believed that people view the effects of chance and powerful others
differently. However, some scholars continued to use the original Rotter’s scale, but
with some modifications (e.g., Mueller & Thomas 2001). Continuing this line of
thinking, Chell (2008) suggests that future studies in the locus of control area should
include multiple measures, mediation effects and performance outcomes, instead of
using it solely as a differentiator between entrepreneurs and other populations.
Irrespective of whichever scale has been used, studies have shown a positive link
between internal locus of control and entrepreneurship (Pandey & Tewary 1979;
Cromie & Johns 1983; Keh, Foo & Lim 2002; Krueger 2009). Individuals with a high
internal locus of control believe that they determine the future outcomes of their actions
and therefore this trait is regarded as a crucial indicator of enterprising potential
(Cromie & Johns 1983; Littunen 2000). Recognising the relative importance of internal
locus of control, scholars in entrepreneurship have most commonly applied the ‘internal
locus of control’ orientation in their studies (e.g., Hansemark 2003; Krueger & Brazeal
1994; Lee & Tsang 2001; Sahin, Nijkamp & Rietdijk 2007). Comparing the internal
and external locus of control, Littunen (2000) points out that the internal locus of
control is positively associated with entrepreneurial behaviour, while the external locus
of control impedes learning and encourages passivity (Littunen 2000). For instance,
enterprising individuals with high internal locus of control may get frustrated working
for others who may curtail their behaviour. This may result in setting up their own
ventures (Bridge, O’Neill & Cromie 2003). Such individuals would like to take control
into their own hands because they believe that they ‘can make things happen’, and
underplay the importance of luck and fate that are outside their sphere of control.
42
Locus of control has also been linked to Kirzner’s (1973) concept of entrepreneurial
alertness (Gilad, 1982, 1986). In particular, Gilad (1986) found that individuals having
an internal locus of control tend to believe that events are triggered by their own
behaviour, and this perception leads them to see more opportunities and therefore
increases their entrepreneurial alertness. Further, Harper (1998) extended Gilad’s theory
and posits that internal locus of control increases entrepreneurial alertness, which helps
in identifying more opportunities and thus leads to entrepreneurship. Krueger (1993)
identifies a close link between an individual’s desire for control and the initiation and
maintenance of goal-directed behaviours; the author believes that this trait is
significantly associated with entrepreneurial intentions.
In the last decade or so, other empirical studies provided evidence about the positive
influence of internal locus of control on entrepreneurship in varied settings. Gray (1999)
examined the impact of both dimensions of locus of control on small businesses. The
findings of this study reveal that while the external locus of control had a direct
(negative) impact on business survival (i.e. success), internal locus of control had an
indirect positive effect on business survival and size (measured by employment growth)
and income. This indirect effect was seen through the entrepreneur’s inventive decision
making style and proactive business strategy. In a study of successful new business
owner-managers, Korunka et al. (2003) found the respondents to have a high internal
locus of control compared to nascent entrepreneurs. Even with regard to starting a new
business, Caliendo, Fossen and Kritikos (2014) found that persons who scored highly
on internal locus of control had a higher probability of starting a business (and also of
being in one), and persons who scored highly on external locus of control had a lower
probability of starting (or being in) a business.
On the whole, the concept of locus of control has been considered to be very important
in various aspects of entrepreneurship: forming entrepreneurial intentions (Krueger,
2009), estimating their risks and evaluating their entrepreneurial opportunity (Keh, Foo
& Lim, 2002), and also encouraging entrepreneurial behaviour (Muller & Thomas,
2001). Entrepreneurs are initiators and decision-makers and therefore their perception
of control will influence their behaviour. Because of these reasons, more researchers
are, in recent times, examining locus of control in the entrepreneurship domain
43
(Schjoedt & Shaver, 2012). The current research has also considered the internal locus
of control factor.
2.2.2.2.3 Risk-taking propensity
Another important characteristic often associated with entrepreneurs is the
entrepreneur’s risk-taking propensity. While discussing the concept of entrepreneurship,
scholars often emphasise that one key factor, that defines an entrepreneur is their
innovative behaviour, manifested by their risk-taking behaviour (see Rauch & Frese
2000). By nature, entrepreneurial functions are not structured, and there is a huge
amount of uncertainty as entrepreneurs have to assume the risk involved in starting their
businesses and growing them. As such, they bear the ultimate responsibility for the
decisions they take (Kilby 1971, Knight 1921/1971). Therefore, many scholars propose
that entrepreneurs need to have a higher risk-taking propensity than others in order to
undertake entrepreneurial functions (e.g., Schumpeter 1934; Carland III et al. 1995).
A risk-taking propensity was defined as “an individual’s current tendency to take or
avoid risks” (Sitkin & Weingart 1995, p.1575), while a risk taker was seen as someone
who “pursues a business idea when the probability of succeeding is low” (Chell 2008,
p.102). Explaining this concept further, Brockhaus (1980b, p. 513) describes it as “the
perceived probability of receiving the rewards associated with success of a proposed
situation, which is required by an individual before he will subject himself to the
consequences associated with failure, the alternative situation providing less reward as
well as less severe consequences than the proposed situation”. Sexton and Bowman
(1985) found that potential entrepreneurs showed a higher need for risk taking, showing
a “willingness to expose themselves to situations with uncertain outcomes” (p.134).
A review of the relevant literature reveals that early scholars were cognisant of the issue
of entrepreneurial risk-taking as an important entrepreneurial activity. The earliest
mention was in the early 18th century by Cantillion, who mentioned risk bearing, among
others, as an important characteristic of an entrepreneur. Other scholars that followed
also touted risk-taking as an important aspect of entrepreneurship. For example, Adam
Smith (1723-1790) argued that entrepreneurs were concerned with creating wealth, and
44
the profits they earned were considered to be a reward for risking their capital. Alfred
Marshall (1842-1924) identified two types of business owners. One type consisted of
people who were innovative and unable to avoid taking risks, and the second type
included those people who copied existing business models. Marshall believed that to
be successful, a businessman should endure mental strain and great anxiety in
organising and developing innovative methods to effectively manage a profitable
enterprise.
Von Thünen (1850/1960) examined the concept of entrepreneurial risk in his book The
Isolated State through his explanation of profit. He identified entrepreneurial gain as
profit minus (i) interest on invested capital, (ii) insurance against business losses, and
(iii) the wages of management, and the residual being a return to entrepreneurial risk.
He believed that entrepreneurs were rewarded for incurring those risks which no
insurance company would cover because those risks were unpredictable and therefore
uninsurable. He declares ‘‘there exists no insurance company that will cover all and
every risk connected with a business. A part of the risk must always be accepted by the
entrepreneur’’ (p. 246). According to von Thunen, the entrepreneur is the person who
takes the venture-related problems home at the end of the day and has sleepless nights
thinking about them. The return the entrepreneur earns is a reward for the uninsured
risk undertaken as well as for being the initiator, problem solver and innovator. Knight
(1921) distinguished risk from uncertainty. He explained that some changes in the
circumstances are foreseeable, making them predictable; therefore, the risks associated
with such circumstances are calculable, making such risks insurable. On the other hand,
the risks undertaken when changes cannot be predicted are uninsurable. Knight (1921)
suggested that profits were the returns on the outcome of entrepreneurs taking risks in
uninsurable uncertainty. His theory suggested that entrepreneurs are the ones who have
made informed judgements and taken calculated risks during periods of uncertainty, and
the profits they earn are the rewards for doing so. Others, who do not seek risky
endeavours, settle for relatively secure employment. This differentiation between risk
and uncertainty helps to establish the boundary between the manager and the
entrepreneur (see Chell 2008, p.33).
45
Modern scholars, too, have speculated on the risk propensity behaviour of entrepreneurs
(e.g., see Baron 2007; Begley & Boyd, 1987; Brockhaus, 1980b, 1982; Chell, Haworth
& Brearley 1991; Markman & Baron 2003; McClelland, 1961; Sexton & Bowman,
1986; Sitkin & Weingart 1995; Smith & Miner 1985; Stewart & Roth 2001). Risk-
taking is inherent in every decision an entrepreneur takes, whether it is to become an
entrepreneur or to make investment decisions, since the outcomes of these decisions are
unpredictable (Caliendo, Fossen & Kritikos 2014). The consequences could be either
making profit from starting a successful firm or incurring loss from business closure or
failure. Therefore, the tendency of individuals to take risks has been viewed as an
important trait associated with entrepreneurship (Zhao, Seibert & Lumpkin 2010). In
fact, risk-taking propensity has even been hailed as a “hallmark of the entrepreneurial
personality” (Begley & Boyd 1987).
Since risk-taking is viewed as a distinguishing characteristic of entrepreneurs, scholars
examined whether it helped to differentiate entrepreneurs from non-entrepreneurs and /
or managers (Begley & Boyd 1987; Brockhaus 1980b; Carland, Carland & Stewart
1999; Palich & Bagby 1995). The results were mixed. It was found that individuals
with a higher risk-taking propensity engage in entrepreneurial ventures, while those
individuals who are risk averse choose to work for others (Carland III et al. 1995;
Stewart et al.1999). For example, the empirical study of Carland III et al. (1995)
identified risk taking as a unique trait that distinguishes entrepreneurs from managers
and non-entrepreneurs. Using a large sample (n=848), they examined risk-taking
propensity among three groups: 114 entrepreneurs, 347 small business owners, and 387
managers. They found that entrepreneurs had a higher risk-taking propensity followed
by the small business owners, with the managers showing the lowest level of risk-taking
propensity. They also looked at the impact of education and gender, and found that
those with higher education and males respectively, had higher levels of risk-taking
propensity. Similarly, Hartog Ferrer-i-Carbonell and Jonker (2002) also found that
entrepreneurs are less risk averse than employed persons. This correlates with earlier
studies that show business founders to be high in risk-taking propensity (Begley &
Boyd 1987; Carland III et al. 1995; Chattopadhyay & Ghosh 2002; Hull, Bosley &
Udell 1980; Stewart et al. 1999; Stewart & Roth 2001, 2004).
46
On the other hand, some studies could not find much evidence to differentiate between
entrepreneurs and non-entrepreneurs in terms of risk-taking propensity. For example,
Brockhaus’s study (1980b) of risk-taking propensity could not distinguish entrepreneurs
from non-entrepreneurs. In this study, he examined three groups of participants:
individuals who quit their jobs to become owner-managers (i.e. entrepreneurs),
managers who had changed organisations (i.e., transferred managers), and managers
who had assumed new managerial positions (i.e., promoted as managers), all of whom
took up these positions within three months prior to the study. The results show no
difference between entrepreneurs and non-entrepreneurs in terms of risk taking, and it
became very popular with other scholars, as it was published in the well-reputed
Academy of Management Journal. Around the same time, other studies also revealed
similar results of no significant differences in the risk-taking propensity of
entrepreneurs as compared with managers (Brockhaus & Nord, 1979; Carland III et al.
1995; Hull, Bosley, & Udell 1980) or the general population (Brockhaus & Horwitz
1986; Brockhaus & Nord 1979; Palich & Bagby 1995).
Because of the conflicting findings concerning risk-taking propensity between
entrepreneurs and managers, Stewart and Roth (2001) conducted a meta-analytic review
to better understand the differences between entrepreneurs and non-entrepreneurs in
their risk propensity. The authors were concerned that there were too many studies with
small sample sizes which obfuscate and inhibit theory building. They tested this
proposition that entrepreneurs are more inclined to take risks than managers because
“the entrepreneurial function entails coping with a less structured, more uncertain set of
possibilities and bearing the ultimate responsibility for the decision” (2001, p.146).
They found that entrepreneurs did have a higher risk propensity than managers, and also
found that those entrepreneurs who were growth-oriented (i.e., those who fcused on
growth) had markedly higher risk-taking propensity than income-oriented entrepreneurs
(those who focused on income). Therefore, these results tend to confirm the proposition
that entrepreneurs are more likely to take risks than managers, but they do not support
the results of the influential study of Brockhaus (1980b). However, Miner and Raju
(2004) raise objections to the results of Stewart and Roth (2001) on the grounds of
insufficient evidence in their sample in the study (that there were only three studies in
respect of risk propensity and growth orientation). To overcome this problem, Miner
47
and Raju (2004) conducted another meta-analysis by including 14 additional studies to
the sample included by Stewart and Roth (2001) and using a Miner Sentence
Completion Scale (MSCS), a different measurement scale for risk. Based on the results
from their study, Miner and Raju (2004) suggested that entrepreneurs may not have risk
propensity, but are risk-avoidant. In fact, it was the managers who took greater risks as
their decision making process was riddled with biases. Clearly, these results contradict
the findings of Stewart and Roth’s (2001) study. However, Stewart and Roth (2004)
provided a quick rebuttal to Miner and Raju (2004) by pointing out some
methodological deficiencies and also conducting a new meta-analysis that indicated an
overall conclusion that is consistent with their previous study of 2001, which supported
the notion that entrepreneurs have a higher level of risk-taking propensity than
managers.
Clearly, the role of risk propensity in entrepreneurship is no straightforward
relationship. Recognising the complex nature of this relationship, Thomas and Mueller
(2000) suggested that not all who are risk takers will become entrepreneurs, as several
other factors also influence entrepreneurship. For example, Palich and Bagby (1995)
highlighted the role of cognitive patterns rather than risk propensity to differentiate
entrepreneurs from managers or other non-entrepreneurs. Compared to others,
entrepreneurs may perceive a situation as less risky as they are predisposed to have a
positive outlook towards business situations and view them as opportunities. Basing
their arguments on the tenets of cognitive theory, these authors explain that
entrepreneurs view a business situation more positively and focus on the high
probability for favourable outcomes than non-entrepreneurs who may take a negative
view, as they perceive them to have little potential (i.e., offering disproportionately low
returns relative to their associated risks). It is the individual’s cognitive patterns and
processes that determine natural potential for entrepreneurial behaviour rather than risk
propensity. Therefore, systematic differences in cognitive processes may help in
differentiating entrepreneurs from small business owners, since both these groups tend
to be usually associated with smaller ventures.
Another line of research suggested was to examine entrepreneurs’ risk-taking propensity
across the venture life cycle. (e.g., Stewart & Roth 2001; Baron & Markman 2005).
48
Stewart and Roth (2001) highlighted the need to examine entrepreneurs through the
venture life cycle in order to avoid the effects of survivor biases, if any. Baron and
Markman (2005) consider entrepreneurship to be a series of what they term as ‘distinct
phases’, each phase comprising of a unique set of critical activities and having different
outcome variables. They note that the importance of specific personality traits, among
other variables, may vary considerably, depending on the distinct phase of the new
venture. Based on this line of thinking, Frank, Lueger and Korunka’s study (2007)
found that the entrepreneurs’ increased level of risk propensity is associated positively
with improving the probability of start-up and / or accelerating the process of starting a
new business; however, an increased level of risk propensity is not advantageous for the
continued existence of the business.
Some scholars try to minimise the role of entrepreneurial risk in some contexts. For
example, Timmons, Smollen and Dingee (1985) argue that the risk taking of
entrepreneurs may actually decrease as the net worth of the firm increases. Here,
entrepreneurs may perhaps be more cautious as they have a larger asset to protect, and
therefore take calculated risks. This view is consistent with the Begley and Boyd (1987)
study which suggested that entrepreneurs’ boldness may be tempered as they have an
asset base to protect. They find that that the risk-taking of founders has a positive effect
on firm performance, measured by return on assets up to a point, and increasing risk-
taking beyond a certain point has a negative effect on the firm’s performance. In a later
study, Rauch and Frese (2000) found that high risk-taking has a clear negative effect on
business success. In a recent study, Zhao, Seibert and Lumpkin (2010) found that risk
propensity may be positively related to entrepreneurial intention, but not necessarily to
other measures of entrepreneurial performance.
The above discussion reveals the conflicting views of scholars about the risk-taking
characteristics of entrepreneurs. This has become an ongoing debate about whether
entrepreneurial risk is necessary, and if so, what the right amount of risk is that should
be taken by the entrepreneur. Several authors have clarified that successful
entrepreneurs take moderate or calculated risks (Palmer 1971; Caliendo, Fossen &
Kritikos 2010; Meredith, Nelson & Neck 1982; Timmons, Smollen & Dingee 1985).
Successful entrepreneurs are not reckless risk-takers, but rather scan their environment
49
carefully, interpret the risk situation and then determine the policies to address it
appropriately. This idea has been summed up well by Meredith, Nelson & Neck (1982,
p. 25) who observed that:
“[Entrepreneurs] enjoy … challenge, but they don’t gamble. Entrepreneurs avoid
low-risk situations because there is a lack of challenge and avoid high-risk
situations because they want to succeed. They like achievable challenges.”
Even a pioneering author like McClelland (1961) has also linked entrepreneurs as risk
optimisers. This implies that risk-taking is a necessity, but there is a limit to its level.
Brockhaus (1980b) speculated that the process of being an entrepreneur would increase
an entrepreneur’s desire for moderate levels of risk; entrepreneurs who have either a
high or a low risk-taking propensity would cease to remain entrepreneurs in the long
run. For this reason, Baum and Locke (2004, p.595) observe that high risk may lead to
high performance, but “it can also lead to disaster if the risks are foolish”. A recent
study by Caliendo, Fossen and Kritikos (2010) also supports this notion that
entrepreneurs who have a medium risk tolerance level have the highest survival
probabilities.
Taken together, all these studies explore the relation of risk-taking propensity to
entrepreneurship, its role in decision-making and its intensity, thus making it a critical
characteristic in understanding entrepreneurial behaviour. However, it is not clear how
risk-taking propensity influences entrepreneurs’ self-efficacy and their behavioural
activities, which calls for further examination.
2.2.2.3 Concluding remarks
In the above section, I have examined the importance of personality characteristics in
entrepreneurship, both specific characteristics and the Big Five. In the past, many
studies on personality characteristics focused mainly on the differences between
entrepreneurs and non-entrepreneurs (e.g., Brockhaus, 1980b; Cromie & Jones 1983).
However, studies on personality factors were criticised for their shortcomings (e.g.,
Baron 1998; Boyd & Vozikis 1994). This led to the use of the Big Five characteristics
by others (e.g., Ciavarella et al. 2004; Caliendo, Fossen & Kritikos 2014). These
50
studies yielded contradictory results. As a consequence, in the last decade,
entrepreneurship scholars have posited that specific personality traits are better
predictors of entrepreneurial behaviour than the more broad trait taxonomies such as the
Big Five (Caliendo, Fossen & Kritikos 2014; Rauch & Freese 2007a; Vinchur et al.
1998). In this context, three specific personality characteristics were found to be
important in entrepreneurship studies: need for achievement, locus of control and risk-
taking propensity. They have received and achieved a high level of attention and
validity (Schaper et al. 2011), and are used in my study.
Ciavarella et al. (2004) suggested that personality factors should be used alone without
considering other situational factors. Further, Rauch and Frese (2007a) in their meta-
analysis found that the personality factors were important and used them to understand
entrepreneurial behaviour in terms of new venture creation and venture success. Since
the entrepreneur (the person) is central to the entrepreneurial process, personality traits
are important to entrepreneurship research (Frank, Lueger & Korunka 2007). I
recognise that personality factors will manifest in the way they influence an
entrepreneur’s behaviour. To understand this process, my study examines the role of
three specific personality characteristics along with self-efficacy and entrepreneurial
behaviour in the presence of external aspects such as information overload.
2.3 Entrepreneurial self-efficacy
The concept of entrepreneurial self-efficacy is an adaptation of the construct of self-
efficacy which was proposed by Bandura in his seminal study in 1977. In simple terms,
it refers to one’s beliefs in his or her capacity to accomplish a certain level of
performance or desired outcomes, and which in turn influences the individual’s
behaviour (Bandura 1986). In the context of entrepreneurship, scholars have adopted the
concept of self-efficacy and termed it as entrepreneurial self-efficacy (e.g, DeNoble,
Jung & Ehrlich 1999; Chen, Greene & Crick 1998; Zhao, Seibert & Hills 2005). This
section examines the construct of self-efficacy and its adaptation to entrepreneurship,
and the issues relating to multiple-dimensionality of the construct.
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2.3.1 The concept of self-efficacy
As mentioned earlier, Bandura (1977, 1982, 1984, 1986, 1997) contributed significantly
to the concept of self-efficacy and how it influences human behaviour. Bandura (1977)
defined self-efficacy as an individual’s belief in his or her capacity to organise and
execute the courses of action required to produce given attainments. In another study,
Bandura (1986) referred to it as an individual’s judgement of their capacity to
accomplish a certain level of performance or desired outcomes. Basically, it affects an
individual’s self-perception of their abilities and tendencies, and that plays a role in the
development of that individual’s intentions and achievement of goals (Boyd & Vozikis
1994). Further, Bandura (1982, 1997) explains that people with stronger self-efficacy
are more likely to put in more effort, accept challenges and persist in the task
undertaken compared to individuals who judge themselves to have low self-efficacy,
dwell on their personal deficiencies and also imagine potential difficulties as more
formidable than they really are. This is because individuals are motivated throughout
their lives by their perceived self-efficacy rather than by an objective ability, thereby
influencing their outward behaviour (Markman, Balkin & Baron 2002). Therefore, the
role of self-perception of an individual’s skills is seen as more important than the actual
skills that the individual possesses, as it enjoins individuals who believe that they have
the relevant skills to be more willing to put in effort in the area where a person
perceives himself/herself as possessing high self-efficacy.
Following Bandura’s (1982, 1997) seminal publications on self-efficacy, this construct
was tested in varied disciplines, and also found support for its influence on human
intentions and / or behaviour. For example, self-efficacy beliefs have been tested in
clinical research which found that it is significantly related to clinical problems like
phobias, addiction, and stress (Bandura, 1983; Garcia, Schmitz & Doerfler 1990;
Marlatt, Baer & Quigley 1995). In the area of social settings, self-efficacy beliefs have
been found to be related to social skills and assertiveness (Lee 1983, 1984; Moe & Zeiss
1982). In educational research, self-efficacy was linked to academic motivation, self-
regulation, and development and achievement (Bandura 1993; Pajares 1997; Pintrich &
Schunk 1995). Self-efficacy was also found to be associated with an individual’s career
choice and development (Bandura 1997; Eccles 1994; Hackett 1995; Lent & Hackett
1987; Markman, Balkin & Baron 2002). Not surprisingly, researchers have found a link
52
between an individual’s efficacy with choice of academic subjects and career (Betz &
Hackett 1981, 1986). Hackett (1995) suggests that self-efficacy beliefs not only
influence career choice, but also play a significant role in the development of core
vocational predictors such as interests, values and goals. Therefore, Markman, Balkin
and Baron (2002) observed that self-efficacy is a good predictor of intended career
options, perseverance, and personal effectiveness.
Gist (1987) extended the concept of self-efficacy to the context of organisational
behaviour and human resource management by exploring its theoretical linkages and
suggesting practical implications in these fields. The author suggests that the
performance of an organisation largely depends on the performance of the workgroups,
which could be influenced by the group’s efficacy perceptions. Stajkovic and Luthans
(1998) in their meta-analysis of 114 studies of self-efficacy found it to be significantly
correlated to work-related performance (r = .38). Maurer (2001) examined the impact of
self-efficacy on employee development behaviour and found that employees with high
self-efficacy are willing to participate in skills development activities. This study also
finds that the decline in self-efficacy is a major factor that impedes older workers’
participation in career-relevant learning and skills development. It may be useful to
note that Wood and Bandura (1989a) emphasised a reciprocal-causational relationship
between a person’s cognitive perceptions and the environment, and observed that
“people are both products and producers of their environment” (p. 362). It is this
linkage between perceptions and behaviour that makes self-efficacy an important
antecedent of human behaviour, both individually or in an organisation.
2.3.2 Concept of entrepreneurial self-efficacy (ESE)
The discussion in the preceding section shows that self-efficacy plays a central role in
an individual’s career decision (intention), and goal achievement. In the last two
decades, researchers focussed their attention on how this concept can be applied to the
entrepreneurship domain in different aspects such as choosing entrepreneurship as a
career, entrepreneurship intention and entrepreneurial actions (Barbosa, Gerhardt &
Kickul 2007; Boyd & Vozikis 1994; Chen, Greene & Crick 1998; Zhao, Seibert & Hills
2005). This approach is different to previous studies in entrepreneurship that focused on
an individual’s personality characteristics and their impact on entrepreneurial outcomes
53
(Caliendo, Fossen & Kritikos 2014; Littunen 2000; Stewart & Roth 2007). Although
self-efficacy is considered as a personal attribute, this construct was found to be an
important antecedent that is linked to intention and action (e.g., Boyd & Vozikis 1994;
Kolvereid 1996; Krueger, Reilly & Carsrud 2000; Zhao, Seibert & Hills 2005).
Specifically, the concept of self-efficacy has been adapted to entrepreneurship in the
form of ‘entrepreneurial self-efficacy’ (ESE) by different authors (e.g., Chen, Greene &
Crick 1998; Wilson, Kickul & Marlino 2007). It is referred to as “the strength of a
person’s belief that he or she is capable of successfully performing the various roles and
tasks of entrepreneurship” (Chen, Greene & Crick 1998, p.295). These authors believed
that entrepreneurial self-efficacy can be used to “predict and study entrepreneurs’
behaviour choice, persistence, and effectiveness” (p. 301). For this reason, an
entrepreneur who believes in his or her capacity to execute and perform a task
successfully (i.e., possesses self-efficacy) is more likely to expect potential outcomes
from a new venture. This perception of his or her ability which I refer to as
entrepreneurial self-efficacy makes an entrepreneur sustain more effort to achieve
positive entrepreneurial outcomes.
As De Noble, Jung and Ehrlich (1999) have pointed out, early studies of entrepreneurial
efficacy did not differentiate between managerial and functional abilities. For example,
Chen, Greene and Crick’s first empirical study (1998) tried to focus on the capabilities
of entrepreneurs which appear to be similar to the roles of an effective manager. This
study developed a measure for ESE that included an individual’s assessment of their
marketing, innovation, management, risk-taking, and financial control skills. Results
from this study indicated a positive effect of ESE on the likelihood of being an
entrepreneur. Further, the ESE was found to be positively related to internal control and
negatively to chance control. Given the empirical evidence of positive relationship
between ESE and entrepreneurship, several scholars have examined this relationship in
different contexts (Forbes 2005; Krueger, Reilly & Casrud 2000; Wilson, Kickul &
Marlino 2007; Zhao, Seibert & Hills 2005). However, there has been a significant
debate on how the self-efficacy construct has to be applied to entrepreneurship studies.
The issue revolved mainly around whether to use the same construct in different
disciplines and settings or to customise the scale to specific situations. Further, scholars
54
also differed on how to capture the dimensionality of the construct when they developed
relevant scales for this purpose. These issues are discussed below.
2.3.2.1 General self-efficacy (GSE) in entrepreneurship
Several researchers have become interested in a trait-like generality dimension of self-
efficacy, which was termed general self-efficacy (GSE) (e.g., Baum & Locke 2004;
Judge, Erez & Bono 1998; Markman, Balkin & Baron 2005). GSE was defined by
Judge, Erez and Bono (1998, p. 170) as an “individual’s perception of their ability to
perform across a variety of different situations”. It means an individual’s beliefs about
his or her competence to perform in a wide variety of achievement situations. It is a
broad concept that allows for differentiating individuals based on their perception of
capacity to meet task demands across varying contexts. Referring to the generality of
self-efficacy, Bandura (1997, p. 53) states ‘what generalises is the belief that one can
mobilise whatever effort it takes to succeed in different undertakings”. Therefore, an
important antecedent of GSE is the aggregation of previous experience (Shelton 1990;
Sherer et al. 1982). Consequently, the concept of self-efficacy was applied in
entrepreneurship in a generalised way without specifically modifying it for the
entrepreneurship domain (see Baum & Locke 2004; Markman, Baron & Balkin 2005).
Several studies found a positive relationship between GSE and self-evaluation
constructs. For example, Judge et al. (1998) found that GSE was strongly related to self-
evaluation constructs such as self-esteem, neuroticism and locus of control. Chen, Gully
and Eden’s (2004) study found GSE to be positively related to other motivational traits
that include need for achievement and conscientiousness. While GSE is increasingly
being used in management and entrepreneurship studies, its construct measurement was
not standardised or used uniformly. Initially, a GSE scale was designed by Sherer et al.
(1982), and it had 17 items. This scale was also used in entrepreneurship and
personality studies (Luthans & Ibrayeva 2006, Urban 2010). However, researchers like
Chen, Gully and Eden (2001) were concerned that this GSE scale had too many items.
Therefore, they designed a new general measure self-efficacy scale consisting of 8
items. They tested this new scale for self-efficacy and found it to be more appropriate
than the original scale for GSE in terms of reliability, content and predictive validity.
55
Hence they suggested the use of this new 8-item GSE scale for all research domains, as
it captures an individual’s confidence in meeting the demands of the task / activity,
irrespective of what the task is. Chen, Gully and Eden (2001) observe that as “jobs
become broader and more complex, measuring dispositional constructs that can predict
motivational reactions and behaviours across a variety of work domains becomes
increasingly important” (p. 77). It implies that the revised GSE scale can help in
explaining motivation and performance in a variety of work contexts, regardless of
specific demands.
Researchers who used GSE felt that entrepreneurs require a set of diverse skills, and so
it would be difficult to identify a comprehensive list of such activities (e.g., Markman,
Balkin & Baron 2002). Using this measure, a few empirical studies were undertaken to
measure self-efficacy of individuals’ entrepreneurial activities (Markman, Baron &
Balkin 2005). Markman, Baron and Balkin (2005) used a GSE scale to differentiate
entrepreneurs from non-entrepreneurs, and found that entrepreneurs scored significantly
higher on self-efficacy than non-entrepreneurs. Their study involved examining the
patent inventors who started their own businesses and the patent inventors who ended
up working for an established company. While the GSE scale was used across different
disciplines including entrepreneurship, it was subjected to criticism on several grounds.
The self-efficacy construct was considered to be situation bound. For example, Wood
and Bandura (1989b, p. 408) define self-efficacy as “beliefs in one’s capabilities to
mobilize the motivation, cognitive resources, and courses of action needed to meet
given situational demands”. The more task-specific a construct of self-efficacy is made,
the better the predictive role of the construct. Bandura (1997, p. 42) himself criticised
the GSE measures on the grounds that they “bear little or no relation either to efficacy
beliefs related to particular activity domains … or to behaviour”. Since the capabilities
required to perform entrepreneurial roles are specific, a generalised GSE may not be
able to capture all the relevant roles of an entrepreneur. Hence, the words ‘given
situational demands’ or ‘particular activity domains’ direct self-efficacy constructs to a
narrow focus that needs to be contextualised to specific tasks, as was done by Gist and
Mitchell (1992) and Lee and Bobko (1994) by modifying the GSE construct scale. This
debate on whether self-efficacy is to be used in a general or customised manner had an
impact on the dimensionality of the construct as well, i.e., whether it is unidimensional
56
or multi-dimensional. While scholars like Sherer et al. (1982) developed the original 17-
item GSE scale and Chen, Gully and Eden (2001) revised it to an 8-item GSE scale
specifically for entrepreneurship, it was proposed as a unidimensional scale. But in the
real world, the capabilities of entrepreneurship are multi-dimensional in their nature.
For this reason, scholars like Chen, Greene and Crick (1998) and McGee et al. (2009)
suggested a specific self-efficacy construct to be used in entrepreneurship studies;
accordingly, they have designed and empirically tested one to provide validation. This
type of specific self-efficacy construct is known as entrepreneurial self-efficacy (ESE),
which is discussed in the next sub-section.
2.3.2.2 Entrepreneurial self-efficacy (ESE)
Entrepreneurship is a complex process that requires a diverse set of roles and skills in
accordance with the core entrepreneurial activities such as opportunity recognition,
managing risk and uncertainty, and innovation (Baron 2002). In this context, it is
pertinent to recall that Bandura (1997) observed that self-efficacy can be used to predict
performance in different domains only if the self-efficacy assessment measures are
refined and tailored to the functions and ‘specific tasks’ in the context in the discipline
being examined. Therefore, the GSE approach to entrepreneurship may not able to
capture the individual’s efficacy in handling the specific roles and tasks of this domain
(Gist 1987; McGee et al. 2009). The limitations of the GSE approach lead to the
inevitable development of an entrepreneurship specific self-efficacy construct. This
construct came to be known as Entrepreneurial Self-efficacy (ESE), and was defined as
a construct that measures a person’s belief in their ability to successfully launch an
entrepreneurial venture (McGee et. al. 2009).
Entrepreneurship researchers believed that having task-related self-efficacy measures in
entrepreneurship would allow them to distinguish between entrepreneurs and non-
entrepreneurs, predict entrepreneurial intentions and also understand the entrepreneurial
decision-making process (Bird 1988; Boyd & Vozikis 1994; Chen, Greene & Crick
1998; DeNoble, Jung & Ehrlich 1999; Forbes 2005; Krueger, Reilly & Casrud 2000;
Wilson, Kickul & Marlino 2007). For example, Bird’s (1988) research illustrates that
individuals are predisposed to entrepreneurial intentions when relevant personal factors
57
(e.g., prior experience, personality characteristics and abilities) and favourable
contextual factors (e.g., social, political and economic variables) exist. Boyd and
Vozikis (1994) built on Bird’s framework and proposed self-efficacy as a critical
antecedent of entrepreneurial intentions and actions / behaviour. Chen, Greene and
Crick (1998) provided robust empirical support that ESE, defined as an individual’s
confidence in his / her ability to successfully perform entrepreneurial roles and tasks,
was positively related to their intentions to start their own business.
Other researchers in this field attempted to identify specific dimensions that constitute
the ESE construct that relate to various entrepreneurial tasks such as opportunity
recognition, planning, marketing, risk taking, financial control, and coping with
challenges (Anna et al. 2000; DeNoble, Jung & Ehrlich1999; Kolveried & Isaken 2006).
By creating specific ESE scales that focus on the various entrepreneurial roles, these
studies have been able to capture the entrepreneurship domain issues more precisely.
Using this approach, these studies looked at how ESE impacts on entrepreneurial
intention (DeNoble, Jung & Ehrlich 1999) and also how ESE is impacted by external
factors such as strategic decision-making processes of the ventures they manage (Forbes
2005). In DeNoble, Jung and Ehrlich’s (1999) study, the findings showed that three
dimensions of ESE (i.e., developing opportunities, innovative environments and coping
with unexpected challenges) were positively related with entrepreneurial intention.
However, other dimensions such as initiating investor relationships, defining the
company’s core purpose, and developing critical human resources were not found to
have any effect on entrepreneurial intentions. One of the reasons suggested was that the
respondents were mainly students and inexperienced, and could not appreciate the
importance of these dimensions. Building on Chen, Greene and Crick’s (1998) work,
Forbes’ study (2005) was designed to study the self-efficacy of entrepreneurs managing
new ventures in a dynamic environment. Forbes (2005) examined the entrepreneur’s
confidence in his/her ability to perform entrepreneurial activities relating to innovation,
management, finance, marketing and risk-taking. The study found a positive
relationship between ESE and new venture performance which was measured by the
entrepreneur’s perception of their firm’s revenue and overall performance.
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In a few studies, ESE was not only found to have a positive influence on entrepreneurial
intentions, but also perform a mediating role (Hmieleski & Corbett 2008; Zhao, Seibert
& Hills 2005). For example, Zhao, Seibert and Hills (2005) have examined the
mediating role of ESE between the entrepreneurial intentions and formal learning,
entrepreneurial experience and risk propensity. Their results provide evidence for the
critical mediating role of ESE in entrepreneurial intentions for the above-mentioned
three antecedents. In their study, Hmieleski and Corbett (2008) examine the relationship
of entrepreneur improvisational behaviour with outcome variables such as the
performance of the start-up as well as the entrepreneur’s level of work satisfaction.
They find that ESE plays a critical positive moderating role in the relationship between
improvisational behaviour and performance.
While the above discussion provided evidence of ESE’s positive relationship with the
entrepreneurship domain, the construct of ESE was not uniform. Several researchers
have contributed to developing the construct of ESE (Chen, Greene & Crick 1998;
Wilson, Kickul & Marlino 2007; Zhao, Seibert & Hills 2005). To make it domain-
specific, these authors focused on identifying the core entrepreneurial tasks or skills that
could be incorporated in the ESE construct. For example, Chen, Greene and Crick
(1998) developed an ESE scale that initially referred to 26 entrepreneurial roles and
tasks. However, the factor analysis identified only 22 items loaded on five different
dimensions of entrepreneurship domain, namely (i) marketing, (ii) innovation, (ii)
management, (iv) risk-taking, and (v) financial control. They used the scale to capture
the degree to which individuals felt capable of performing the tasks associated with new
venture management and also to help distinguish between entrepreneurs and non-
entrepreneurs. The ESE scale developed by Chen, Greene and Crick (1998) has been
adopted by a few researchers (Drnovsek & Glas 2002; Forbes 2005).
Although the ESE construct was built on the five roles, Chen, Greene and Crick (1998)
relied on one composite ESE score enabling them to distinguish between entrepreneurs
and managers. They also found the total ESE score to significantly differentiate
entrepreneurship students from non-entrepreneurs (management and psychology
students). However, one significant drawback of this study was the use of a total score.
59
By using a total score, the study did not measure or identify which type of self-efficacy
was more influential in creating entrepreneurial intention.
In another study, DeNoble, Jung and Ehrlich (1999) identified 35 skills and behaviours
observed among local entrepreneurs. Using Q-sort procedure, the authors identified six
theoretical dimensions that could be used in developing their construct of ESE. These
six dimensions were: i) developing new product and market opportunities, ii) building
an innovative environment, iii) initiating investor relationships, iv) defining core
purpose, v) coping with unexpected challenges and vi) developing critical human
resources. The authors have empirically tested these dimensions of ESE for their effect
on entrepreneurial intentions. As mentioned earlier, only three dimensions were found
to be associated; these are: developing new products and market opportunities, building
an innovative environment, and coping with unexpected challenges. Similarly, Zhao,
Seibert and Hills (2005) developed measures for ESE in four specific entrepreneurial
tasks: i) successfully identifying new business opportunities, ii) creating new products,
iii) thinking creatively, and iv) commercialising an idea or new development. But the
problem with this scale is also that all these four items were loaded on one factor,
creating a general measure for the overall entrepreneurial task domain.
Clearly, much progress has been made in designing a domain-specific efficacy scale for
entrepreneurs in the form of ESE. Scholars have identified various dimensions of
entrepreneurship that could be related to ESE (Chen, Greene & Crick 1998; DeNoble,
Jung & Ehrlich 1999; Forbes 2005; Hmieleski & Corbett 2008; Zhao, Seibert & Hills
2005). However, they suffer from a very serious problem in measurement. Most of
these studies have summed up the ESE scale to form ‘an overall score’ of ESE, even
while recognising the multidimensionality of the construct. This has been identified as
a big shortcoming of these studies, since forming a composite score results in diluting
the multidimensionality of the construct (McGee et al. 2009). In some cases, the
respondents were asked one closed question where the respondent was asked to provide
a yes or no response. Therefore, the impact of the underlying dimensions of the
construct is lost and cannot be examined separately.
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Given the above limitations of the ESE construct development, it became important to
address these issues. The challenge was, therefore, to design an entrepreneurial self-
efficacy construct which recognises the multi-dimensional nature of the
entrepreneurship domain, and to also ensure that the effect of each dimension is
captured well in empirical testing. This is what McGee et al. (2009) have done in their
seminal study of not only identifying the entrepreneurial dimensions, but also testing
them empirically. These authors have identified self-efficacy dimensions at an
individual level of ESE, namely: searching, planning, marshalling and implementing.
The McGee et al. study (2009) examined the effect of ESE on the entrepreneurial
intentions of nascent entrepreneurs. The authors developed their entrepreneurial self-
efficacy construct based on a four-phase venture creation process model that includes:
(i) searching, (ii) planning, (iii) marshalling, and (iv) implementing, put forth by
Stevenson, Roberts and Grousbeck (1985) and Mueller and Goic (2003). Entrepreneurs
were required to have confidence in their ability to undertake entrepreneurial tasks in
each of the four phases, which are briefly explained below.
The first phase, namely the ‘searching’ phase, refers to the entrepreneur’s ability to
identify and develop a unique idea (McGee et al. 2009). Researchers have long since
argued that for entrepreneurship to exist, opportunities must exist and the entrepreneur
must discover and exploit the profitable entrepreneurial opportunity (Shane &
Venkataraman 2000). It is a cognitive task which the latter authors believe only some
individuals possess. Entrepreneurs should have confidence in their ability to identify
opportunities and customers’ needs and wants.
During the ‘planning’ phase, the entrepreneur evaluates the idea/opportunity and
converts the idea into a feasible business plan by addressing questions that relate to
estimating demand and planning operational aspects to understand what is required to
give the idea/opportunity substance as a business (McGee et al. 2009). It is critical that
entrepreneurs have self-efficacy in their ability to estimate the demand, capital
requirements, pricing, marketing issues and so on for them to succeed.
The third phase, ‘marshalling’, involves bringing together the resources and gathering
support for the business idea (McGee et al. 2009). During this phase, the entrepreneur
61
would network with others to get information and necessary resources as well. The
entrepreneur should have confidence in their ability to explain their business idea to the
relevant stakeholders to gain their support.
The final phase consists of tasks related to ‘implementation’. The entrepreneur is
concerned with growing and sustaining the business beyond its infancy, and to do so
successfully, he/she has to be able to implement good management skills (McGee et al.
2009). Within this phase of implementation, McGee identified two categories: those
related to managing human resources and those related to managing finances.
Entrepreneurs should possess confidence in their ability to implement people-related
activities (i.e., supervising, recruiting and hiring, delegating, motivating and dealing
with day-to-day problems) and also in implementing finance-related activities (ie.,
organising and maintaining financial records, managing financial assets, understanding
financial statements). For the purpose of making the ESE construct, McGee et al.
(2009) measure ESE in the implementation phase as two ESE dimensions: one for
measuring self-efficacy in the implementation of people-related tasks, and the
entrepreneur’s efficacy in measuring the implementation of finance-related
entrepreneurial activities.
Using the above four phases as the basis for their theoretical model, McGee et al. (2009)
began a multi-step procedure to design a survey instrument that captured the
multidimensionality of the ESE construct, and discarded tasks that were irrelevant or of
little importance. At the end of a thorough screening process, the study identified 19
questions/items to best represent the five ESE dimensions without overlapping. The
fourth phase of implementing was examined as two separate dimensions: one relating to
people and the other relating to finance. By empirically testing these items, McGee et
al. (2009) found that nascent entrepreneurs showed a higher rating on the ESE measure.
To sum up, entrepreneurial self-efficacy is an important antecedent to behaviour or
actions that an entrepreneur will undertake. However, most of the studies in this area
have only looked at new venture intentions as the outcome of entrepreneurial self-
efficacy. The construct of self-efficacy itself was a bone of contention: whether it
should be generic or specific in content. Although earlier scholars have used GSE,
62
recent studies have recognised the multidimensionality of the ESE construct. For
example, McGee et al. (2009) addressed many of the concerns about dimensions and
also measurement issues of ESE. Further, most of the earlier studies have used only
students as nascent entrepreneurs, but my study examines practicing entrepreneurs and
also seeks to link the ESE construct with entrepreneurial behavioural activities as well.
2.4 Entrepreneurial behaviour activities
In the preceding sections, I have examined various factors that influence
entrepreneurship such as personality characteristics (with a focus on need for
achievement, locus of control, risk-taking propensity) and entrepreneurial self-efficacy.
The main focus of a majority of studies was to distinguish an entrepreneur from a
manager (see Brockhaus 1980a, 1980b; Cromie & Johns, 1983 etc). Using this
approach, academics attempted to educate potential entrepreneurs on how to become
entrepreneurs and stimulate the creation of new ventures (Luthans, Envick & Anderson
1995; Edelman, Manolova & Brush 2008). However, these personality orientations and
traits or abilities do not automatically create economic value. The entrepreneurial
activity is anchored in the actions of the individual who organises the value creation
activity. Therefore, scholars agree that entrepreneurship is not a static concept, but a
functional one (see Ripsas 1998), and that no new ventures can be created without
sustained entrepreneurial behaviour (Shaver 2003). Understanding entrepreneurs’
behaviour gives an insight into the creation of new ventures and their success (Gartner
1989; Bird, Schjoedt & Baum 2012).
Therefore the question arises as to what entrepreneurs actually do to create and grow
new ventures. The existing literature on entrepreneurial behaviour is limited,
fragmented and ad hoc (Bird & Schjoedt 2009; Luthans, Envick & Anderson 1995;
Mueller, Volery & Von Siemens 2012). In a more recent study, Bird, Schjoedt and
Baum (2012) reviewed management and entrepreneurship journals during the period
2004 to 2010 and found only 91 articles related to the area of entrepreneur behaviour.
Their examination of these studies reveals a paucity of research and also methodological
concerns regarding operationalisation of entrepreneurs’ behaviour. Therefore, Bird et
al. (2012, p.903) observe, “behaviour in entrepreneurship research remains a surprising
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void …” and suggest more research in this area. Accordingly, I have reviewed the
existing literature to examine first the concept of entrepreneurial behaviour, and second
various ways in which the construct of enterpeneurial behaviour was used in previous
studies.
2.4.1 Concept of entrepreneurial behaviour
According to Bird (1989), entrepreneurial behaviour can be defined as an
“opportunistic, value-driven, value-adding risk-accepting, creative activity where ideas
take the form of organizational birth, growth or transformation” (p.5). A similar
definition is provided by Bird and Schjoedt (2009), who suggest that entrepreneurial
behaviour is the concrete enactment of individual or team tasks or activities required to
start and grow a new organisation. It is about the behaviour of the individual(s) as
entrepreneurs and not the firm’s behaviour. The behaviour needs to be discrete units of
action that can be observed by others in a meaningful way. Therefore, the behaviour of
entrepreneurs that results in starting and growing a new organisation draws upon the
personal attributes of entrepreneurs such as experience, knowledge, skills, abilities,
cognitions, intelligence, intentions and motivation. However, having these personal
attributes (e.g., right knowledge, skills, abilities, motivation and intention) is not
sufficient to create economic value. Instead, the presence of these personal attributes
would allow or enable entrepreneurs to consciously choose entrepreneurial activities
with the intention of finding and exploiting an opportunity and forming an organisation
[or a firm]. Therefore, entrepreneurial behaviour consists of the observable actions
(activities) of an individual and the responses that are evoked by those activities (Bird,
Schjoedt & Baum 2012).
2.4.2 Research on entrepreneurial behaviour
To find specific aspects of entrepreneurial behaviour, some scholars have examined the
literature in the area of management, and organisational and psychological studies to
identify ‘behavioural concepts’ that can be applied to entrepreneurship (e.g., Bird 1989;
Gartner, Bird & Starr 1992; Baron 2002). It was not a straightforward identification of
behavioural activities, but was part of other related aspects. For example, Bird’s (1989)
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study gathered a number of person-centred variables (such as experience, education,
motivation and values), the social context of entrepreneurial behaviour, leadership,
competencies and learning. Likewise, Gartner, Bird and Starr (1992) attempted to apply
organisational behaviour theory to ‘emerging’ organisations, but found them to be
limited at that time. Therefore, they suggested ‘richer description’ of entrepreneurial
behaviour. Baron (2002) used an organisational behaviour (OB) model of individual,
interpersonal and organisational spheres to three phases of the entrepreneurship process,
i.e., pre-launch, launch and operations. This research focused on the individual’s
cognition and decision-making issues. He also linked OB concepts to person-specific,
person-centred outcomes such as learning from a mentor, social and emotional
competence, situational leadership, influence processes, and group dynamics of teams.
Similarly, Shook, Priem and McGee (2003) used behavioural research in
entrepreneurship by highlighting judgement or cognition and how it was critical for
individuals engaged in opportunity exploitation activities. They observe, ‘we know very
little about the role of the individual in acquiring resources and organising the company’
(p. 390). On the other hand, other authors tried to identify specific and observable
entrepreneurial behavioural activities, moving away from personality-related constructs.
Shepherd, Douglas and Shanley (2000) argue that venture survival depends on
organising activities such as specifying tasks, allocating people to tasks, defining
authority structures, and building communication channels.
In the last decade, some empirical research in entrepreneurship behaviour was also
conducted. Bird and Schjoedt (2009) placed these studies on entrepreneurial behaviour
under three groups, based on whether it is used as a criterion for sampling, as an
independent variable, or as a dependent variable. Finally, they also describe the
entrepreneur’s behaviour based on social theories. In the first group, behavioural
activities served as a criterion for the selection of entrepreneurs. The most prominent of
these efforts is the Panel Study of Entrepreneurial Dynamics (PSED) conducted
between 1998 and 2000. This was followed by a similar survey on a global scale in the
form of the Global Entrepreneurship Monitor (GEM) project (see Reynolds et al. 2000;
Gartner et al. 2004; Langowitz & Minniti 2007). These surveys, together with
telephone interview and mail questionnaires, cover a broad range of topics that include
activities relating to success in organising entrepreneurial business. Embedded in these
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surveys were two questions that were designed to identify nascent entrepreneurs: (i) Are
you, alone or with others, now trying to start a business? and (ii) Are you, alone or with
others, now starting a new business or new venture for your employer? This survey
provided data that are largely contemporaneous with the new venture creation process.
Researchers were able to use these data to develop a behavioural criterion for
individuals based on whether they have engaged in entrepreneurial activities such as
‘developed a product/service, established credit with suppliers, filed a tax return for a
new business, invested own money (Gartner et al. 2004). The PSED study was
designed to examine the earliest stage of the organisational life-cycle so as to get an
understanding of the new business creation of nascent US entrepreneurs. For example,
Edelman, Manolova and Brush (2008) used these start-up behaviours to compare the
practices of nascent entrepreneurs and the practices that textbooks recommended that
entrepreneurs’ undertake. The authors found that the entrepreneurship textbooks did not
present all the activities involved in the starting up of a new venture, either by
underemphasising some activities or not adequately discussing them.
The second group of studies use entrepreneurial behaviour as an independent variable.
Here, Bird and Schjoedt (2009) refer to specific behaviour such as locating the business
in a specific area, writing a business plan, or seeking outside advice. For instance, Haber
and Reichel (2007) examined the impact of entrepreneurial activities such as writing a
business plan and planning the physical design of the venture, as well as applying for
external support like financial and advisory assistance on the venture performance,
which incidentally was only marginal. In a longitudinal study, Lichtenstein, Dooley and
Lumpkin (2006) examine the start-up activities during the venture creation process,
along with their frequency and pacing. The nine start-up behavioural activities used in
this study are those identified in the PSED study: investing own money, defining the
opportunity, organising a founding team, developing a prototype, forming a legal entity,
installing a business phone, purchasing major equipment, opening a business bank
account and asking for funding. Tornikoski and Newbert (2007) identify certain
behavioural activities of nascent entrepreneurs; these include the demonstration of
improvising behaviours (e.g, preparing a business plan, starting marketing efforts,
applying for patents, opening bank accounts, listing in the phone book and Dunn and
Bradstreet), gathering resources (e.g., purchasing raw materials and equipment), and
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displaying networking behaviour (e.g., asking for funds, and receiving outside
assistance). These authors explain the impact of the entrepreneur’s behaviours/activities
on the nascent organisation’s ability to interact with the external environment
successfully. They found that improvising and resource gathering behaviour were
effective, but not the networking behaviour. Other behaviours were less specific and
cognitive in nature rather than observable behaviour such as self-reports relating to
planning or identifying sources of finance (Alsos, Isaken & Ljunggren 2006). In another
study (Rauch, Frese & Utsch 2005), it is the employees, as stakeholders, who report the
entrepreneurs’ behaviours such as ‘support for personal initiative’ and ‘communicating
business goals’.
The third group of studies view behavioural activities as a dependent variable (Bird &
Schjoedt 2009). These studies, for example, use demographic variables such as age,
gender and human capital (DeTienne & Chandler 2007) and homemaker status (Singh
& Lucas 2005) to predict self-reported entrepreneurial behaviours. In their study of
homemaker entrepreneurs, Singh and Lucas (2005) found that both non-homemaker and
homemaker nascent entrepreneurs undertook activities such as preparing a business
plan. DeTienne and Chandler (2007) used the gender and human capital of the CEO of
young firms as predictors of a sequence of activities relating to start-up opportunity.
Research on family firms reveals that entrepreneurial behaviour is significantly
influenced by the characteristics of the family members, the CEO and the overall family
involvement in the firm (Kellermans et al. 2008). In other cases, belief cognitions and
intentions and individual differences were used as predictors of nascent behaviours
found in PSED or GEM projects (Langowitz & Minniti 2007). In this context, it is
useful to recall the popular theory of planned behaviour (TPB) postulated by Ajzen
(1991), which argues that behavioural intention is the best predictor of behaviour
because intention is “a person’s readiness to perform a given behaviour” (Ajzen 2011,
p.1122). A recent longitudinal study provides strong empirical evidence of how
intentions are linked to entrepreneurial behaviour when engaging in the entrepreneurial
process (Kautonen, van Gelderen & Tornikoksi 2013). Similarly, the study by Kautonen
and his colleagues (2013) on the impact of intention and predictive behaviour control on
business start-up behaviour also showed a positive causal relationship.
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Under the fourth grouping, Bird and Schjoedt (2009) discuss studies that explain
behaviour in the social theory context (Forbes et al. 2006; Lichtenstein, Dooley &
Lumpkin 2006). For example, Forbes and his colleagues (2006) use the theories of
attraction and resource dependence approach to explain the entrepreneurs’ behaviour of
hiring new team members. The authors suggest that the entrepreneurs would engage in
the activity of hiring a new team member if that member had close ties to the venture
capital community or shared a similar culture or values to the entrepreneur. Similarly,
Lichtenstein, Dooley and Lumpkin (2006) examined the activities of an entrepreneur
engaged in the organisation of a new firm. They observe three modes of organising:
organising the vision (expressing a strong vision and vocabulary about the venture
opportunity), strategic organisation (tangible events like formatting a book, deciding to
publish a book or through a web-page, committing personal funds, and coping with non-
venture responsibilities), and tactical organising (developing a product / service,
establishing credit with suppliers, filing tax returns, hiring employees, or investing own
money). As can be seen, many of these activities are behaviourally anchored.
While Bird and Schjoedt (2009) found that entrepreneurial behaviour has been
empirically studied as an independent, dependent and control variable, there are still
gaps in the body of knowledge. Poor measurement, self-reporting, studying students
rather than entrepreneurs, and not including time taken to complete the activity (i.e.
begin time, finish time, new behaviour start time) are some of the limitations. Scholars
have also found that many of these studies focus on vague behavioural constructs which
are difficult for objective observation and also lend themselves to varied interpretation
(Mueller, Volery & Siemens, 2012). There is a consensus among researchers that the
research in this area does not sufficiently address the nature of entrepreneurs’
behaviour, and more empirical data is required that focuses on what entrepreneurs
actually do (Bird & Schjoedt 2009; Bird, Schjoedt & Baum 2012; Gartner, Carter &
Reynolds 2010; Mueller, Volery & Von Siemens 2012).
There were also other studies in the 1990s relating to the observation of entrepreneurial
behaviour which were not covered in Bird and Schjoedt’s (2009) review. For example,
Luthans, Envick and Anderson (1995) examined the methods of research in
entrepreneurship and found that most studies were group-centred and the focus was on
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the measurement of data collected indirectly through surveys. However, entrepreneurs
are more individualistic than group-centered, and therefore need to be studied in their
naturalistic (organisational) settings. The authors suggest the use of an idiographic
approach to identify entrepreneurial behaviour from an insider’s perspective. The
idiographic method uses a direct behavioural observation of the events unfolding in the
given setting and interaction with the internal and external environments. For this
purpose, the authors have undertaken a four-stage process consisting of: (i) an
unstructured direct observation of entrepreneurs’ behaviour, (ii) post-log interviews to
ensure that behaviour was accurately observed, (iii) the use of Delphi technique for the
categorisation of the behaviours, and finally, (iv) the use of structured observation to
measure the frequency of identified behaviour. Accordingly, this method was used to
examine the behaviours of entrepreneurs (Envick & Luthans 1996), and gender
differences in the behaviour of entrepreneurs (Envick & Langford 1998). In Envick and
Luthans’s (1996) study, eight entrepreneurial behavioural categories were identified: i)
planning, ii) controlling, iii) internal communication, iv) human resources management,
v) work-related tasks, vi) customer service, vii) networking and viii) on-the job personal
time. Using the behavioural activities of entrepreneurs found by Envick and Luthans
(1996), Envick and Langford (1998) investigated gender differences in these
entrepreneurial activities. While entrepreneurs of both genders were engaged in the
eight behavioural activities, some significant differences were also found. Female
entrepreneurs engaged in controlling, communication, human resource management and
work-related tasks significantly more often than their male counterparts. On the other
hand, male entrepreneurs engaged in on-the-job personal time significantly more often
than females. There were also other differences, but they were not significant.
As seen above, the literature reveals that the construct of entrepreneurial behaviour has
originated from disciplines such as organisation and psychology. Attempts have been
made to identify entrepreneurs’ behaviours by various scholars (e.g., Brown & Hanlon
2004; Envick & Langford, 1998; Luthans & Ibrayeva 2006). A recent review by Bird,
Schjoedt and Baum (2012) found that studies so far have not addressed the nature of
entrepreneurs’ behaviour adequately, and therefore called for more empirical data to
understand what entrepreneurs actually do. This view is consistent with other
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researchers such as Mueller, Volery and Von Siemens (2012). The details of some of
these studies are discussed in the section below.
2.4.3 Identifying entrepreneurial behaviours
Brown and Hanlon’s (2004) study attempted to develop entrepreneurial behavioural
scales that can help in identifying training, coaching and developing of entrepreneurs.
The authors surveyed 34 entrepreneurs by conducting a critical incident job analysis.
Each entrepreneur was asked to report up to three examples of effective and ineffective
behaviours that they had observed other entrepreneurs perform. Using this procedure,
the authors were able to identify nine dimensions: relevant background, opportunity
identification, dedication to business, mobilising support and resources from others,
strategic business development and growth, financial management skills, employee
management, marketing/customer relations management and negotiation and risk-
taking.
In 2006, Luthans and Ibrayeva examined the role of self-efficacy among entrepreneurs
in transition economies in two parts / phases. In the first part, the authors found that
entrepreneurs’ self-efficacy had a direct and mediating effect on performance outcomes.
However, the authors believed that self-efficacy could be developed only if they knew
the specific behaviours of entrepreneurs i.e., what they actually did. To seek answers to
this question, the authors undertook a second study, with a sample of 239 from two
transition economies from Central Asia, to examine: (i) what entrepreneurs do in their
day-to-day work schedule and (ii) how frequently they do these activities. They
followed an idiographic approach (suggested by Luthans, Envick & Anderson 1995)
that consisted of different phases of data collection: an unstructured observation, a post-
log survey, Delphi analysis and a final structured observation. For this purpose, they
used a multi-behaviour (more than one behaviour observed) and multi-rater (with more
than one rater) method to focus on directly observable behaviours of entrepreneurs. The
results from this study identified nine categories of entrepreneurial behavioural
activities: planning, controlling, internal communication, human resources management,
work-related tasks, customer service, socialising, politicking, and on-the-job personal
time.
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In the immediate past, Mueller, Volery and Von Siemens (2012) used the sociological
method of structured observation to capture the behaviour of entrepreneurs, six of them
from the start-up stage and six of them in the growth phase. Instead of using the
traditional self-reporting method of data collection, Mueller and his colleagues observed
entrepreneurs in real-time and recorded them to understand the actions of the
entrepreneurs. The findings show that the actions of entrepreneurs in both start-up and
growth phases were characterised by brevity and fragmentation; they engaged in ‘short,
sporadic actions that change in an abrupt, sometimes unpredictable manner (p. 1004).
Both groups spent a considerable amount of time on communication with others. All the
growth phase entrepreneurs and a majority of the start-up entrepreneurs were heavily
involved in performing exploitation activities rather than exploration activities in order
to increase efficiency. They were equally involved in three main functions: (i) human
resources and employee relations, (ii) marketing, sales and public relations and (iii)
administration. Both the groups were also involved in the exchange of information and
opinions, and working analytically and conceptually; however, the two groups differed
significantly on the time spent in both these areas: the start-up entrepreneurs spent 36
per cent of their time on exchanging information and opinions and 28 per cent on
working analytically and conceptually, while the growth stage entrepreneurs spent 54
per cent of their time on exchanging information and opinions and only 12 per cent on
the analytical and conceptual work. Similarly, start-up entrepreneurs were more
involved in environmental monitoring, while growth stage entrepreneurs were more
involved in business development.
Based on their findings, Mueller, Volery and von Siemens (2012), presented a
taxonomy of entrepreneurs’ behaviour that is described by a continuum ranging from
the basic ‘atomic’ level to the superordinate ‘galactic’ level, with two other
intermediary levels: molecular and molar levels. At the ‘atomic’ level, an action
consists of discrete units of individual activities of entrepreneurs that are observed by an
audience (e.g., writing an email, visiting a client etc.). At the second ‘molecular’ level,
the activity captures what entrepreneurs are doing without the observer interpreting the
purpose of these actions (e.g., networking, exchanging information, directing and
controlling, consulting and selling etc.). At the ‘molar’ level, activities are differentiated
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by the functions within the organisational context (e.g., product development,
marketing, controlling and finance, human resources and employee relations etc.). The
fourth level is named the ‘galactic’ where the activities are divided into two
fundamental forms of organisational behavior: exploitation (e.g., increasing productivity
and resolving problems of the existing business) and exploration (e.g., developing a new
product line or internationalising activities).
Finally, Bird, Schjoedt and Baum (2012) summarise the literature in the area of
entrepreneurial behaviour and endorse the need for further research in this area. Even
while pointing out the existence of some good studies, they observe that the current
research is ad hoc, and, in some cases, examines only one behaviour rather than a range
of behaviours that explain ‘effective entrepreneurship’. They also make
recommendations for further research on a list of critical behaviours they believe are
considered important but are under-researched. The list includes activities such as
establishing operations, hiring employees, and marketing, and selling. Interestingly,
these authors suggest the re-use of published measures from previous studies. My study
uses the behavioural activities identified by Luthans and Ibrayeva (2006) as constructs
in my conceptual model for empirical measurement. As no empirical studies were
conducted in an emerging economy context, we are able to use the entrepreneurs’
behavioural activities identified in a transition economy for our study.
2.5 Entrepreneurial information overload (EIO)
Entrepreneurs face many challenges in their attempts to discover opportunity, create a
venture, and ultimately sustain it. While configuring and gathering resources is
necessary for the success of entrepreneurs’ efforts, a vital ingredient of this process is
information. Possessing or having access to the right amount of information and the
ability to use it optimally helps in effective decision-making relating to new venture
creation and management. However, some scholars have pointed out that when decision
makers face the challenge of dealing with too much information compared to their
ability to deal with it, this leads to a phenomenon known as information overload. I
believe that entrepreneurs, too, as decision makers, face the problem of information
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overload. This section explores the concept of information overload and how it impacts
on entrepreneurs adversely.
2.5.1 Concept of information overload
The literature reveals that information overload has been an issue for many years, but
has come under the spotlight more recently in the context of an increasing number of
technological gadgets, globalisation and the accessibility of information. Previously,
i.e. before the advent of information and communication technologies (ICT), business
managers suffered due to a lack of adequate information necessary for effective
decision-making. But with growing information technology and the ever-changing
environment, the previous paucity of information has changed with an increasing
amount of information available from diverse sources, so much so that the problem now
is not information shortage, but information overload (Speier, Valacich & Vessey,
1999).
The concept was first recognised and examined in the field of psychology (e.g., Miller,
1956). Here, Miller (1956) argued that humans have a fairly limited cognitive ability to
process information, and also that people have different levels of information
processing capability and capacity to store information. He also found that an
individual’s information processing performance increased with increased information
inputs up to a certain threshold point, after which the processing performance decreases
sharply. Interestingly, these views were expressed prior to the advent of modern ICT
technologies. Later, Milford and Perry (1977, p. 131) define information overload as
“the condition in which the amount of input [information] into a system exceeds the
processing capacity of that system”. It implies that information overload occurs when
inputs stream rapidly and where the respondent does not have enough time to sift and
process various inputs of information.
Alluding to the challenge of dealing with information, although not defining it as
information overload, the Noble Prize Laureate, Herbert Simon (1971, p. 40), observes:
“a wealth of information creates a poverty of attention”. He suggests that the
respondent’s ability to process and use the information and make decisions may be
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limited by his/her cognitive processing capability. In other words, when the respondents
receive much more information than they can handle, this leads to information overload.
Examining this concept, Schultze and Vandenbosch (1998) have referred to information
processing capacity as a U-shaped function, wherein too little information decreases the
cognitive ability, while too much information causes stress and thereby lowers the
processing capacity. However, Eppler and Mengis (2004) suggested that an increase in
information load can, up to a certain time, increase the processing capacity.
Various reasons have been advanced as causing information overload: the amount of
information (Farhoomand & Drury, 2002; Milford & Perry, 1977; O’Reilly, 1980), the
diversity of information (Iselin, 1988; 1993; Milford & Perry, 1977), time pressure
(Schick, Gordon & Haka, 1990) and processing factor (Baron, 1998; Farhoomand &
Drury, 2002; Van Zandt, 2004). Evaristo, Adams and Curley (1995) provided further
insights by explaining how the information characteristics (volume, uncertainty,
complexity and turbulence) and the task characteristics (time pressure, formalisation,
and complexities) could result in an individual’s information load. While the effect of
the ever increasing number of cues is seen as directly contributing to information
overload, Eppler and Mengis (2004) maintain that it is the combination of five factors:
information, in terms of its volume, frequency, intensity and quality; the receiver; the
tasks that need to be accomplished; the organisational design; as well as the information
technology which contribute to information overload at organisational and interpersonal
levels. In general, all the factors above influence an individual’s information
requirements and information processing capacity leading to information overload.
Recognising information overload as a major challenge, it was examined in various
disciplines such as accounting, marketing, organisational studies, and management.
Accountants are key information disseminators within an organisation, and decision
makers rely on their information to make good decisions. But accountants also suffer
from information overload because they work under extreme time pressure (Schick,
Gordon & Haka 1990; Swain & Haka, 2000). In sales management, the salespersons’
information overload was found to negatively affect their sales performance (Hunter
2004). Investigating the information overload from the customers’ perspective, Jacoby
(1984) found that available information could also overload consumers in their purchase
decision, but they were able to deal with it by being highly selective in the quantity and
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type of information they seek. Klausegger, Sinkovics and Zou (2007) found that
approximately 60 percent of managers’ work time in organisations was spent in reading
documents and processing information; however, these managers had collected too
much information which they could not use efficiently and this impacted negatively on
their task accomplishment. Examining the impact of information overload on decision
making, Speier, Valacich and Vessey (1999) argue that when individuals are subjected
to information overload, it reduces their ability to make good decisions. The authors
found that information overload not only increases the time required to make a decision,
but also decreases the quality of decisions. Decision-makers experiencing information
overload may ignore available information and become highly selective or even lose
control over information (Bawden 2001; Edmunds & Morris 2000), which could result
in less than optimal outcomes.
Organisations, also, like individuals, can face information overload when they face a
discrepancy in their information processing capabilities with regard to the amount of
information encountered (O’Reilly 1980). It is noted that each organisation has a
different structure, which also affects the information processing capacity of the unit
(Tushman & Nadler 1978). Further, it is also observed that information overload can
cause a reduction in output capacity (Driver & Mock 1975). When individuals within an
organisation perceive individual information overload, it could result in a reduction in
the overall effectiveness of the management operations (Allen & Wilson 2003). These
negative effects of information overload highlight the importance of this construct and
the need to understand its impact on individuals and organisations. I believe that this
construct is extremely important for entrepreneurs in the current world, as they too are
inundated with information from various sources, and they would not be immune from
this phenomenon.
2.5.2 Information-seeking behaviour in entrepreneurship
Following the discussion above, it is obvious that entrepreneurs, too, like managers,
would suffer from too much information, and therefore the concept of information
overload can be extended to the discipline of entrepreneurship. At the centre of the
entrepreneurship process is the individual who identifies the opportunity, gathers
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resources and brings new products to the market place. To do so effectively,
entrepreneurs need to have information that will enable them to make relevant and
timely decisions. Given the uncertain and dynamic nature of the environment in which
they operate, entrepreneurs need to keep abreast of changes in the environmental factors
in order to make good decisions. If any entrepreneur is bombarded with more
information than he or she can manage, this could impair their ability in to make better
decisions required at various stages of entrepreneurship, namely opportunity seeking,
venture creation and growth.
The literature indicates that entrepreneurs and small business owners / managers
constantly scan and monitor their operating environment in order to look for new
opportunities and also to strengthen their competitive position (Keh, Nguyen & Ng
2007; Welsch & Young 1982). In fact, they are referred to as ‘avid information
gatherers’ and search for information more than executives (Kaish & Gilad 1991, p.49).
The process of venture creation begins with recognising an opportunity, and they arise
from the entrepreneur’s ability to stay alert and be in sync with the changes that occur in
the market conditions (Kirzner 1973; Shane 2000). Scholars view the process of venture
formation as a process of learning where the entrepreneurs have to overcome the
liabilities of newness by using the information acquired by them (Cooper, Folta & Foo
1995). In a recent study, Mueller, Vollery and Von Siemens (2012) found that
entrepreneurs in the start-up stage spend approximately 36 percent of their time in
exchanging information and opinions, and the growth entrepreneurs spend 54 percent of
their time exchanging information and opinions. The dominance of this activity shows
the importance entrepreneurs are placing on environmental scanning. Information is a
critical resource that entrepreneurs use at various stages in the new venture creation and
growth. Thus, the success of a venture depends on the entrepreneur’s role, among
others, of being an information seeker, processor and assimilator.
Ikojo-Odongo and Ochollo (2004) identified three situations in which entrepreneurs
sought information: (i) major incidents: when entrepreneurs sought information
regarding training for new skills, marketing of products and inputs about sources or
supplies and their prices, (ii) minor incidents: when entrepreneurs sought information
on loans, pricing of products, environmental hazards, transport, competitors, record
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keeping, maintenance of equipment, government policies, current developments in trade
and in the country, improving quality and minimising overheads and other business
opportunities and employment, and (iii) business development: including how to
improve planning and management of businesses, to increase output and viability and
the ability to develop business ideas.
Scholars have also examined the entrepreneurs’ information needs in different
countries. A study in Singapore found that businesses considered information about
competitors, markets, business news, environment news – political, social, supplier
trends, regulatory, information technology, demographic trends and new management
methods (de Alwis & Higgins 2001). At the same time, a study of Aboriginal
entrepreneurs in Canada by Vodden, Miller and McBride (2001) reveal the most
important types of information include financing options, business planning, and
information about government programmes, markets, and marketing. A similar study of
ethnic Malaysian would-be entrepreneurs by Kassim (2010) shows that their
information needs commonly revolved around the preparation of business plans,
planning for cash-flow, borrowing capital, business opportunities and profit planning.
Stewart, May and Kalia (2008) compared the entrepreneurial information-seeking
behaviour of entrepreneurs in the US and India, and found that Indian entrepreneurs
scanned the environment more than their counterparts from the US. The authors
conclude that higher scanning frequency by Indian entrepreneurs is associated with
culture, in addition to operating circumstances. According to them, some cultures are
more disposed to greater information seeking.
Information seeking behaviour by entrepreneurs is not uniform, as entrepreneurs do not
have a single profile. Hence Welsch and Young (1982) pointed out that information
seeking behaviour depends on business complexities, cognitive orientation, and degree
of personal relationship between the entrepreneur and the source of information. These
authors have examined the role of personality factors in determining the entrepreneur’s
selection of information sources. They found that internal locus of control was
significantly related to professional, written, institutional and electronic sources of
information. Those with low self-esteem relied on professional sources (e.g, bankers,
accountants and lawyers), but those with high self-esteem did not seek much help and
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used written and institutional sources. Those with a high risk-taking propensity relied
more on trusted personal sources rather than impersonal or professional sources.
According to Cooper, Folta and Woo (1995), entrepreneurs sought information from
two major sources: professional (e.g., accountants, bankers, lawyers) and personal (e.g.,
friends or other personal networks). The authors also found that experienced
entrepreneurs were confident, and displayed less intensity in their information search
efforts compared to inexperienced entrepreneurs. Such behaviour did not change even
when they worked in a new field. Westhead et al. (2005) believed that seemingly low
search intensity by experienced entrepreneurs is because their search behaviour is
effective.
Many small businesses rely heavily on informal information sources such as word of
mouth, family and friends (Birley 1985; Smeltzer, van Hook & Hutt 1991). This is
similar to the findings of Ikoja-Odongo and Ocholla (2004), who studied informal
entrepreneurs’ use of information sources and found them to rely mostly on informal
sources; these include word of mouth, personal experience, and friends, family and
neighbours. This could perhaps be due to the cost associated with these sources. Other
scholars find the use of social networks (Baron, Byrne & Branscombe 2005) and social
capital (De Carolis & Saparito 2006) as sources of information. Social capital, in
particular, facilitates entrepreneurs by providing access to information through
appropriate timing, relevance and quality of information. Ozgen and Baron (2007)
identified three social sources of information that were useful in opportunity
recognition; these were: mentors, informal industry networks, and participation in
professional forums, with all three sources having a positive impact. Interestingly, these
authors also found that the impact of informal industry networks on entrepreneurs’
performance was mediated by their self-efficacy, which happens to be an important
variable of my study.
Casson (2005) believes that some entrepreneurs use information that is available both
publicly and privately and use their own judgement. He argues that differential access to
information generates radical differences in the entrepreneur’s perception of the
business environment and gains from efficient information management. For example,
an entrepreneur may be confident in taking a decision based on information that he or
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she alone is privy to or possesses; others who may not have access to this piece of
information will perceive such a decision to be risky. However, as Casson (2005)
reminds us, no information comes with a seal of endorsement about its truth, and
entrepreneurs make decisions, using this information, based on their perception of risk.
To aid with decision-making during these challenging times, entrepreneurs require
better quality and increased quantity of information (McEwen 2008). However, this
highlights the importance of not only getting the most relevant information, but also of
having the appropriate capability to assimilate the information while making a decision.
2.5.3 Entrepreneurial information overload and its impact
My discussion in the preceding sections shows that entrepreneurs, too, like other
business decision makers, use a lot of information from various sources. They need
information in each of the phases of entrepreneurship, starting from opportunity
recognition. It is the entrepreneur who is central to the firm and therefore plays the
crucial role of an information seeker, processor and assimilator. Information is
recognised as a key resource in decision-making processes (Schick, Gordon & Haka
1990) and entrepreneurs also need to scan the environment to get relevant information
to help them make the right decisions. While the term ‘information overload’ is not
new, it has never been used explicitly in entrepreneurship studies so far. Just as
information overload was customised to different disciplines, such as a salesperson’s
information overload (Hunter 2004; Hunter & Goebel 2008), and managerial
information overload (Farhoomand & Drury 2002), we could term the phenomenon of
information overload faced by entrepreneurs as entrepreneurial information overload
(EIO). Drawing on the literature on information overload from various disciplines, EIO
can be described as ‘a situation when the amount of venture-related information
exceeds the capacity of an entrepreneur to process, analyse and make an effective
decision’. Two major issues here, as in other disciplines, are the amount of information
available and the capacity of the entrepreneurs to use it for optimal outcomes.
Even before the explosion of information became an issue of concern in the last decade,
the study by Kaish and Gilad (1991) shows how entrepreneurs differ from corporate
managers in terms of exposing themselves to information, the sources they use to gather
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information from, and how they evaluate information cues. According to their study,
entrepreneurs in search of opportunities relied less on predictable sources and spent
more time thinking and scanning a broad landscape. Further, they found that
entrepreneurs exhibited more general alertness and were engaged in gathering
information even after hours, mostly through non-verbal scanning. In regard to
assessing and appraising the opportunity, the entrepreneurs relied more on their own
subjective impressions rather than on conventional economic analysis. This study
clearly emphasises the central role of information and information-seeking behaviour in
entrepreneurship.
To understand how we can apply information overload to entrepreneurs, we have to
understand the environment in which the entrepreneur is working. As Klausegger,
Sinkovics and Zou (2007) emphasise, living in an ‘information society’ means that
managers are bombarded with information, even if they are not actively seeking it.
Earlier studies have clearly shown two important conclusions that are relevant to
entrepreneurship: (i) individuals are faced with more information than he or she can
process at any given point in time (Gilbert et al. 1992), and (ii) our information
processing capacity is severely limited and can be readily exceeded (Baron 1998).
These two aspects are applicable to entrepreneurs who face an abundance of
information and find it difficult to sift the information to identify what is relevant and
useful.
A contributing factor to this overload is that there is a plethora of sources from which
information emanates and these sources are constantly growing. It is seen that the
‘information society’ is creating a large amount of information than we can consume,
but with the advent of new technologies, the situation of overload has further
compounded. Feather (2008, p.xviii) believes that “the technological developments of
the past 60 years have made more information more available to more people than at
any other time in human history”. This trend does not seem likely to diminish or stop.
The increase in the trend is visible with the introduction of social media and faster
internet access. As we have seen in the discussion early in this section, entrepreneurs
are avid information seekers and look for venture-related information at all stages of
their venture. They will definitely be faced with an overwhelming amount of
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information coming from various sources and much more than they can assimilate.
Many entrepreneurs, unlike the CEOs of large companies, are small and medium sized
owners and may not be well equipped with the tools to systematically glean sufficient
and relevant information. Baron (1998, p.275) observed that entrepreneurs “face
situations that tend to overload their information-processing capacity and are
characterized by high levels of uncertainty, novelty, emotion, and time pressure”. He
also finds that this pressure is felt more by entrepreneurs than other individuals, and due
to this the entrepreneurs who are impacted by information overload are susceptible to
cognitive biases such as counterfactual thinking, regret over missed opportunities, affect
infusion, self-serving bias, planning fallacy and self-justification (see Baron 1998,
p.279).
The aspect of the information processing ability of entrepreneurs is very important. It is
possible that some personality characteristics such as experience, culture, level of
confidence, and risk-taking propensity of entrepreneurs may impact on their information
seeking behaviour (Forbes 2005; Podoynitsyna, Van der Bij & Song 2011; Stewart,
May & Kalia 2008). These factors underpin how an entrepreneur will seek information,
select it and use it for decision making. However, at this stage, we are not clear how
such personality characteristics are related to the information overload being faced by
entrepreneurs. For example, while Hunter (2004) found that a perception of information
overload lowered self-efficacy (and indirectly affected performance), it was found to
play a positive role in performance outcome (Ozgen & Baron (2007). Obviously, further
investigation is required to understand these relationships between personality
characteristics that influence the information processing capability of entrepreneurs and
information overload faced by entrepreneurs.
To be successful, the entrepreneur needs to have self-efficacy in performing the tasks of
opportunity seeking, venture creation and growth. The key to success is making quality
decisions in all phases of the entrepreneurial process. The ability to perform well
throughout this process depends, among other things, on the entrepreneur’s ability to
identify and use relevant information. The right amount of information helps in coping
with uncertainty, as it reduces the level of uncertainty (Schick, Gordon & Haka 1990).
On the other hand, having an information overload reduces the effectiveness of decision
81
making (Miller 1972; Shick, Gordon & Haka 1990) while increasing information
anxiety (Bawden & Robinson 2009). Emotional arousal or physiological responses
resulting from anxiety, stress or fear can negatively impact on self-efficacy (Conger &
Kanungo 1988; Bandura 1977), and can, in turn, adversely impact on entrepreneurs’
behaviour. Therefore, these negative implications of information overload can also have
a detrimental impact on entrepreneurs’ decision-making and performance.
Therefore entrepreneurs can experience information overload when there are too many
sources of information, too much information, not enough time to processs it, frequent
interruptions, and no strategic information management tools to guide them. They may
also lack the capacity to process the information in time and this might increase the
negative effect of the overload. If entrepreneurs feel the effect of information overload,
they, too, like the individuals examined in other disciplines such as marketing, medicine
and psychology may feel stressed or overwhelmed, and see a decrease in self-efficacy
that can potentially result in poor performance. While the problem of information
overload is being studied thoroughly in other disciplines, no study has to date explicitly
examined its impact empirically in entrepreneurship studies. This study seeks to
examine the impact of the entrepreneur’s perception of information overload on his/her
self-efficacy and entrepreneurial behavioural activities.
2.6 Chapter summary
To sum up, this chapter reveals that the entrepreneur who is at the centre of the
entrepreneurship process has a distinctive personality, such as need for achievement,
internal locus of control and risk-taking propensity which not only differentiates
him/her from others, but also enables them to engage in entrepreneurial activities
through their behaviour. Another key antecedent of entrepreneurial behaviour is the
concept of entrepreneurial self-efficacy. It is clear that having confidence in their ability
to undertake entrepreneurial activities provides an impetus to perform them confidently.
While some recent authors have found the multi-dimensional nature of the construct of
entrepreneurial self-efficacy, these dimensions were not investigated separately.
Similarly, two other important aspects related to entrepreneurship have not received
adequate attention from researchers. They are entrepreneurial behaviours and
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information overload, and my review of the literature showed that they are critical to the
field of entrepreneurship. Based on the literature review, it can be seen that the four
entrepreneurship areas, namely the entrepeneur’s personality traits, entrepreneurial self-
efficacy, entrepreneurial behaviours and information overload could be related. I seek
to examine these relationships in the context of emerging economies. Therefore, the
next chapter highlights the key features of India, which is considered to be the second
largest emerging economy after China.
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CHAPTER 3
ENTREPRENEURSHIP ISSUES IN INDIA
This study examines some critical entrepreneurship issues in India, which is a large
emerging economy. According to Bruton, Ahlstrom and Obloj (2008), there has been a
growing focus on entrepreneurial research in emerging markets in the recent past. In
order to understand the context in which the study is undertaken, it is necessary to
examine the main features of the emerging markets, and the background of
entrepreneurship in India. For this purpose, I have structured this chapter as follows.
First, I discuss the concept of emerging markets. Second, I comment briefly on the
country overview. Third, I examine critical issues that relate to entrepreneurship in
India.
3.1 Emerging economies and their characteristics
In spite of popular usage of the term ‘emerging economies’ and interest in these
countries, there is a growing debate around the concept of emerging economies and as
to which countries constitute this category. Some scholars also use the term ‘emerging
markets’ synonymously with the term ‘emerging economies’. Several international
organisations use this term to group different countries. The term ‘emerging economies’
was first coined by Antoine van Agtmael, a former Investment Officer of the
International Finance Corporation (an agency of the World Bank Group) in 1981. For
many multinationals, which mainly operate in mature markets, emerging economies
have become attractive as they offer them the potential for immediate sales, and allow
them to capitalise on their globally recognised brands.
Different scholars (Hoskisson et al. 2000; Mody 2004) have attempted to identify
characteristics that are common to emerging economies. Hoskisson et al. (2000, p.249)
define emerging economies as countries that satisfy two criteria: (i) a rapid pace of
economic development, and (ii) where government policies favour economic
liberalisation and the adoption of a free-market system. Due to these reasons, these
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economies have not only received significant amounts of foreign direct investments
(FDI), but also contributed to a large amount of FDI outflows (UNCTAD, 2005).
Likewise, Mody (2004) also identified two essential features of emerging economies: a)
their high degree of volatility, and b) their transitional character. This idea was endorsed
by Gaur and Kumar (2009), who pointed out that emerging economies are characterised
by uncertain economic and political systems, and inadequate institutional support.
While significant socio-economic changes are a common trend in these countries, many
in the sector also undergo transitions in a variety of fields. For example, transition is
visible in demographic characteristics, such as in fertility rates, life expectancy and
educational status. Irrespective of the classification of emerging economies, these
economies display certain common features such as rapid industrialisation, growing use
of information technology, and bourgeoning consumer markets. Khanna and Palepu
(2010) highlighted the fact that emerging economies are “starting from a lower base and
rapidly catching up” (p.5). An important feature of emerging economies is the
development of private entrepreneurial firms, which are relatively new but have become
increasingly a salient phenomenon (Ahlstrom & Bruton 2002; Kshetri 2009). In general,
emerging economies have rates of social and business activity that place them on a path
of rapid growth and development.
Even over a decade ago, Hoskisson et al. (2000) cautioned researchers that there is no
standard list of countries that could be part of emerging economies. Using the World
Bank’s development indicators, Hoskisson et al. (2000) identified 64 emerging market
economies under four geographic regions, namely Asia, Europe, Latin America and the
Middle East/Africa. Countries even within the same geographic region are not
homogeneous either. To further compound this scenario, different lists of emerging
economies were proposed. For example, Morgan Stanley Capital International (2010)
identified 21 countries, while Dow Jones (2010) classified 35 countries as emerging
markets. A relatively recent report by PricewaterhouseCoopers (2008) predicted that a
group of emerging economies (the E7, consisting of China, India, Brazil, Mexico,
Russia, Indonesia and Turkey) will overtake the developed countries (the G7, consisting
of Canada, France, Germany, Italy, Japan, the UK and the US) by more than 50 percent
by 2050.
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Jim O’Neill, the chairman of Goldman Sachs Management, coined the acronym BRIC,
standing for Brazil, Russia, India and China. These nations form part of the emerging
economies category, but have received increased interest as many economists and
researchers believe that the BRIC countries are among the largest in terms of
demography and economies. Recently, South Africa was added to this list to make the
group BRICS. Country details of this group may be seen in Table 3.1.
Table 3.1 BRICS Countries Details (2012)
Country Gross Domestic Product (US$ Billions)
Current population (in millions)
Per Capita GDP
Literacy rates
Brazil 2254.2 198.66 11340 90.4 percent (2010 est)
Russia 2033.9 143.53 14037 93 percent (2011 est)
India 1875.2 1237 1489 62.8 per cent (2006 est)
China 8227.1 1350.7 6091 95.1 per cent (2010 est)
South Africa 384.31 51.19 7508 93 percent (2011 est)
Source: GDP per capita 2014; Principal Global indicator 2013; Population Total 2014; The World Factbook 2013a) Currently, these BRICS countries together are home to more than 40% of the world’s
population, cover more than a quarter of the world’s landmass, and account for about
25% of the global GDP (BRIC Countries – Background, Latest News, Statistics and
Original Articles, n.d.; Fawzy and Dworski 2010). They are predicted to become
economically powerful, not only in terms of current, but also future, growth, and to
outgrow the US soon.
3.2 Importance of emerging markets
These countries have already produced some of the top multinational firms in the world
like Oil and Natural Gas Corporation, Tata Consultancy Services, Infosys Inc, Wipro
Inc, Ranbaxy Pharma etc (India), Sinopec, State Grid Corporation, Industrial and
86
Commercial Bank of China, China Telecom (China), CVRD, Petrobras SA, Gerdau SA
(Brazil), Lukoil, Gazprom, Severstal (Russia), and SAB Miller, MTN Group, Naspers
(South Africa). Emerging economies that now include BRICS countries have gained a
prominent position in the world economy (Wright et al. 2005). The developed and
mature economies concentrate on the emerging economies for their future growth of
markets. This is evident from the increase in the amount of foreign direct investments
(FDI) in the emerging markets. Similarly, the FDI outflows from the emerging
economies are also increasing (Surge in foreign direct investment in developing
countries reverses global downturn, 2005; Singal & Jain 2012). Given the growing
importance of the emerging economies, it is critical to understand their economies and
business activities that take place in those countries. Among those countries, India is
only next to China in both population and GDP.
Since the sample for our study is drawn from India, it is necessary to understand the
context and business environment in India. Many scholars have already documented the
institutional factors facilitating or hindering new venture performance (Peng 2002;
Kiggundu 2002). Such factors will definitely influence entrepreneurial development in
India as it opens up its hitherto closed economy and moves towards a more liberalised
system.
3.3 Overview of India
To understand entrepreneurship in emerging markets such as India, it is important to
appreciate the combination of historical factors, cultural values, the religion followed
and social structures. After being ruled by the British for over 200 years, India attained
political independence in 1947. The Republic of India has a population of over one
billion, and is very multicultural, including representation from five major ethnic races
such as Australoid, Mongoloid, Europoid, Caucasian, and Negroid (Government of
India 2014) and religious groups such as Hindus, Christians, Muslims, Sikhs, Buddhists,
Jains, Parsis, and Jews among others. Hindus now constitute the majority of the
population, at about 80%. Table 3.2 shows the diversity of the country in terms of
religions followed and languages spoken.
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As seen in Table 3.1, India has a population of more than 1.2 billion and is growing at
an average rate of 8 per cent per annum. India is also a regional power and the world’s
largest democracy. Economically, it is only next to China as a large emerging economy.
In fact, due to its economic performance in recent decades, India is considered to be ‘the
next Asian Miracle’ (Huang 2008, p. 32).
Table 3.2 India at a glance
Size 3,287,263 sq km
7th largest country in the world
Shares borders
with
India has land borders with Pakistan (2,912km) to the north-west, China (3,380km), Nepal (1,690km) and Bhutan (605km) to the north, Bangladesh (4,053km) and Burma (1,463km) to the east.
Religion (as per the 2001 census) Percentage
Hindus 80.5
Muslims 13.4
Christians 2.3
Sikhs 1.9
Buddhists 0.8
Jains 0.4
Others 0.6
Religion not stated 0.1
Major Languages spoken (2001) Percentage
Hindi 41
Bengali 8.1
Telugu 7.2
Marathi 7
Tamil 5.9
Urdu 5
Gujarati 4.5
Kannada 3.2
Punjabi 2.8
Assamese 1.3
Maithili 1.2
Other 5.9
Source: The World FactBook 2013b; Nationmaster 2014; The Registrar General & Census Commissioner 2011.
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3.4 Entrepreneurship in India
Entrepreneurship is not new to India. Even in ancient times, Indian entrepreneurs and
business people were known for their unique goods and wealth creation. In fact, this is
one of the reasons why the British went to India as traders and eventually colonised it
and made it part of the British Empire. A review of articles by Misra (1992; 2000) give
an outline of the history of entrepreneurship during British rule. In this section, I will
examine entrepreneurship under three different categories, namely the socio-cultural,
the economic and the educational spheres.
3.4.1 Socio-cultural context of entrepreneurship in India
In an Indian context, religion and other socio-cultural factors play an important role (see
Table 3.2 for a list of religions followed in India). According to Lipset (2000), while
structural conditions make development possible, it is the cultural factors that determine
whether the possibility becomes an actuality (or not). But values are embedded in
culture, and so Phelps (2007) observes, ‘values and attitudes are as much part of the
economy as institutions and policies are. Some impede, others enable.’ Hinduism is the
dominant religion and it is strongly associated with the rigid caste system. Singer
(1966) finds that, in comparison to other religions, Hinduism does not offer much
encouragement or value for one to change their situation in terms of material wellbeing.
In ancient times, occupations largely stemmed from the caste system and traditions were
sanctified by religion (Medhora 1965). Based on the Hindu scriptures, society is
segmented into four main varnas (or castes), which were placed in a hierarchy with the
Brahmin (the priest) at the top. The other castes in the hierarchy after the Brahmin are
the Kshatriya (the warrior), the Vaisya (the trader, merchant, landowner) and the Shudra
(the artisan, the commoner, and the peasant). The ‘untouchables’ were placed below the
varna system. Occupational immobility was therefore sanctified by the caste system.
Indian people maintained the status quo by getting into occupations linked to their
cultural conditioning, which is manifested by the caste they were born into. Each
individual has a duty (dharma) specific to the caste of their birth. This is a kind of
sociological division of labour.
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In contrast to the Western cultures, where the entrepreneurial activity stemmed from the
drive to achieve (McClelland 1961), irrespective of their background, commercial
activities in India were largely monopolised by the Vaisya community during the
ancient and medieval periods of Indian history (Tripathi 1971). In fact, Indian society
chose to maintain the status quo by choosing occupations based on their cultural
traditions, and entrepreneurial activity was undertaken by the castes whose duty
(dharma) it was to do business, and not the other castes (Medhora 1965; Dana 2000).
According to Weber (1958), the caste system inhibits innovation in the Indian economic
system due to its rigidity. He observes, “We are now in a position to enquire into the
effects of the caste system on the economy. These effects were essentially negative ...”
(p.111). For these reasons, as Tripathi (1992) observes, the social base of
entrepreneurial growth has remained very limited. However, analysing the impact of the
caste system as a whole on Indian personality with reference to business, Tripathi
(1992) observes, “the result was that the Indian personality, by and large, remained
unentrepreneurial, if not anti-entrepreneurial” (p. 77). But as mentioned earlier, this was
limited to one social group/caste of people.
Researchers (Hozelitz 1960; Nafziger 1978) have noted that entrepreneurship can
develop only when cultural norms permit variability in the choice of paths of life, in
other words, where caste divisions were not rigidly observed. While some of these
social scientists blamed the Hindu value systems for inhibiting the entrepreneurial spirit,
some scholars believe that when the material environment changes, the non-business
classes also take up business ventures (e.g., Mehta & Joshi 2002). To elaborate further,
the authors suggest that apart from the business class (the Parsis, Jains and the Banias),
the Patel community, which is traditionally an agricultural community, has entered the
trading sector. Interestingly, members of the Patel community who migrated to various
parts of the world have carried with them the entrepreneurial culture that helped them to
successfully establish themselves as entrepreneurs in service industries such as hotels,
motels and petrol stations (Bal 2006; Kalnins & Chung 2006).
Recent studies on the rigidity of caste-occupation matching show some interesting
results (Sharma & Singh 1980; Audretsch, Boente & Tamvada 2007). For example,
Sharma and Singh’s (1980) extensive research in northern India (particularly in the state
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of Punjab) concluded that the businesses were dominated by the Vaisya community,
which is consistent with the age-old tradition. People of this community depended on
people of their own caste (familial relations) in identifying opportunities to start
businesses, raise capital, and gain technical know-how, and they were more likely to
start businesses if members of their family were already in business. Another study by
Audretsch, Boente and Tamvada (2007) shows that religion does affect the decision to
become an entrepreneur. They find Vaisyas to be more likely to be self-employed [as
entrepreneurs] and non-Vaisyas to be less likely to be self-employed. According to the
authors, this finding confirms that the class structures of Hinduism continue to influence
occupations, particularly with respect to becoming an entrepreneur.
In the recent past, there seem to be some significant changes in occupational mobility
which breaksthe traditional barriers. For example, Sharma and Singh (1980) found that
there was an increase in the number of lower-caste people emerging on the
entrepreneurial scene. Although the members of other castes have entered the
entrepreneurial field, Sana (1993) observes that there is a higher proportion of industrial
and commercial entrepreneurs who come from the traditional trading castes. For
instance, the Marwaris, a close-knit community of the trading caste, owned 27 of the 78
large corporations in India in 1991, the second being the Parsis, who owned 12. The
Reliance business group and the Tata group are examples of the first and the second
castes (or ethnic group) respectively. Their extraordinary success is attributed to their
caste solidarity. But Murty (2014) suggests that the cosmopolitan outlook that emerged
in the post-reform period has, in a sense, ruptured the link between castes and
professions. Some Dalit people, who were at the bottom of the social hierarchy, have
also become entrepreneurs. Some of them have received support from government
sponsored programmes, as part of affirmative action which supports lower-caste
businesspeople. It is interesting to note that these Dalit entrepreneurs have created their
own federation of commerce, known as the Dalit Indian Chamber of Commerce of India
(http://www.dicci.org) which is affiliated to the Confederation of Indian Industry (CII),
the leading chamber of commerce grouping in India. This provided an opportunity for
the lower caste people to gain significant social mobility through entrepreneurship.
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3.4.2 Economic development and entrepreneurship in India
Prior to gaining independence in 1947, the Indian economy was predominantly agrarian,
and industries were small-scale in nature. These were industries like handicrafts,
involved artisans, or were related to agrarian products. The economy as a whole was
controlled and exploited for colonial interests. The entrepreneurs were mainly in the
form of traditional artisans and home-based rural firms (cottage industries) and matched
their expected caste duties. While British colonial rule was detrimental to these rural-
based industries, many Indian entrepreneurs and businessmen took the lead in
establishing large-scale industries during this time (for details, see Mishra 1992 and
2000). Prominent among them was Jamsetji Tata (1842 - 1905), who was the founder of
India’s iron and steel and hydro-electric industries in the late 19th and early 20th
centuries. He was characterised by his willingness to take risks with capital to invest in
new technology amidst uncertainty. Other such industrialists were Birlas, Dalmia and
Sahu Jain, Shri Ram and J.K. Kasturbhai. Despite being industrialists, they were also
staunch supporters of the Indian independence movement.
To wean itself away from the colonial interests and to gain self-sufficiency, the newly
independent government in India in the 1950s decided to emphasise large-scale
industries, and the traditional small-scale industries were to be an adjunct to meet other
needs of the economy. Accordingly, Pandit Jawaharlal Nehru, the first prime minster of
independent India, and Prof. Mahalonabis, the architect of the economic planning
system, focussed on creating a large industrial sector dominated and controlled by the
government. It was felt that economic development requires huge industrial
infrastructure and that the private sector would not be interested in risky investments
which were unlikely to return profits in the short run. Therefore, it was felt that the
public sector, i.e., the government-owned economic sector, should occupy the
‘commanding heights’ of the economy to champion the developmental goals of the
economy.
As India was a British colony for almost 200 years, foreign direct investment was
viewed with understandable scepticism. Even in independent India, the economy was
known for controls, permits and licences, and quotas with an idealistic view of guiding
it towards national goals. Decision making was slow and quite bureaucratic in nature.
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While democracy has a number of benefits, pro-labour regulations that are a product of
a democratic environment, were found to hinder economic performance (Besley &
Burgess 2004). Therefore, the economic growth rate was stuck at the low rate of 3.5 per
cent, which was pejoratively dubbed the ‘Hindu rate of Growth’. In the late 1980s, the
governments were somewhat unstable and changed in relatively quick succession for
various reasons. Even during this time, India started to slowly recognise the need for
liberalising the economy and started to relax the industrial regulation regime in the
1970s; they followed this up with some significant deregulation in the 1980s
(Panagariya 2004). In 1991, the government that came to power faced a myriad of
economic challenges, including the threat of sovereign default when its foreign
exchange reserves ran extremely low. This situation obviously required a radical
approach to economic policy that significantly departed from previous policies.
However, the launch of bold economic reforms in 1991 was a watershed in the
economic history of India in modern times. The focus was on developing much stronger
infrastructure to support private enterprise. India’s banking sector, capital markets, and
legal system were strengthened significantly. The predominant features of this new
approach included: privatisation, deregulations, and an opening up of the economy for
foreign direct investment. Private investment was encouraged to take an active part in
the economic development of the country. Overall, its economic system shifted away
from the ‘quota-permit raj’ of bureaucratic controls to a market-oriented system. This
resulted in an unleashing of economic potential, and some of the globally recognised
firms and brands developed during this time. Some of them include software giants like
Infosys, Wipro and Tata Consultancy Services, and pharmaceutical firms like Ranbaxy
and Dr. Reddy’s Labs.
In recent times, the government of India is also proactively engaging with
entrepreneurs, particularly with those first generation entrepreneurs, and providing them
with training and development to inculcate an entrepreneurial culture (Government of
India 2014b). With this objective, the Ministry of Micro, Small & Medium Enterprises
has set up three autonomous national-level institutes, namely: the National Institute for
Micro, Small and Medium Enterprises (NI-MSME); the National Institute for
Entrepreneurship and Small Business Development (NIESBUD) and the Indian Institute
93
of Entrepreneurship (IIE). These institutes cater to the training and development needs
of potential and new entrepreneurs, as well as provide consultancy services to them.
This shows that there is now a conscious and deliberate attempt to support
entrepreneurship in India.
3.4.2.1 Small-scale sector in India
As mentioned earlier, in the initial decades after independence, the small-scale sector
was viewed as an adjunct to the public sector, which focused on large industries. These
small firms were expected to supply the consumer goods needed to support workers in
the large-scale sector or heavy industries. As the heavy industries were owned and
promoted by the government-owned public sector, only the small-scale sector was open
for private entrepreneurs and small business owners. However, the reforms in 1991
allowed the small-scale sector to grow rapidly. Table 3.3 shows the contribution of the
small-scale sector to the Indian economy from the time when epoch-making economic
reforms started in 1991.
Table 3.3 Contribution of small-scale industry to the Indian economy
Year No. of Units (in lakhs*) Total: Registered and unregistered
Fixed Investment (Rupees in Crores)
Production (in crores) Employment (in lakhs)
Export (Rupees in million)
Current
Price
Constant
Price
1990-91 67.87 93,555 63,518 68,295 158.34 96,640
1995-96 82.84 1,25,750 1,48,290 1,21,649 197.93 36,470
2000-01 101.10 1,47,348 2,61,289 1,84,428 239.09 69,797
2005-06 123.42 1,88,113 4,76,201 2,77,668 294.91 1,50,242
2010-11 311.52 7,73,487 10,95,758 NA 732.17 NA
Source: Government of India 2014a, 2014b, Ministry of Finance n.d. *Note: Lakh is equivalent one million
As seen from Table 3.3, the small-scale sector plays an important role in the Indian
economy. Between 2000-2001 and 2005-2006, and then 2010-2011, we can see a
dramatic increase in the average annual growth in the total number of small firms as
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well as employment provided. Further, there is also a steady increase in the annual
average growth in production (both at current and constant prices). It is known through
the Economic Census in 2005 that a large part of India’s workforce is engaged in the
informal economy. Even among the registered small businesses, the average
employment is only 2.4 employees (Misra, 2013). Around this time, the Indian
government introduced the ‘Small and Medium Enterprises Development Bill’, namely
the SMED Bill, 2005, so that they could further develop small enterprises, facilitate
their growth into medium enterprises, and also enhance their competitiveness (see
Economic Survey, 2005-2006 published by the Ministry of Finance, n.d.). It was
developed as a powerful instrument for achieving the twin goals of accelerating
industrial growth and creating employment opportunities. In the process, they produced
consumer goods and also addressed the problem of poverty by providing employment.
In fact, in some remote regions and rural areas where large industries cannot be
established, Srivastav and Syngkon (2008) found that these small businesses play an
important role in the economic development of such regions. A very recent government
report (Government of India 2014b) shows that 55.34 % of the micro-, small and
medium enterprises were located in the rural areas, compared to 44.66% in the urban
areas (See Table 3.4).
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Table 3.4: Indian micro-, small and medium enterprise sector (MSME) at a glance* Registered
Sector Unregistered Sector Total
Number of MSMEs (in lakh)
15.6 346.1 361.7 Manufacturing:115.0 Services: 246.8
Number of rural enterprises (in lakh)
7.1 193.1 200.2
Number of urban enterprises (in lakhs)
8.6 153.0 161.6
Number of women enterprises (in lakhs)
2.2 24.4 26.6
Employment provided to (in lakhs)
Total: 93.1 Male: 74.1 Female: 19.0
Total: 712 Male: 611 Female: 101.5
Total: 805.2 Male: 684.7 Female: 120.5
Ownership type (in lakh)
Proprietary: 14.09 Partnership: 0.63 Private Company:0.43 Co-operatives: 0.05 Others: 0.44 Not recorded:0
Proprietary: 327.45 Partnership: 3.65 Private Company: 0.65 Co-operatives: 1.16 Others: 7.65 Not recorded:6.15
Proprietary: 361.76 Partnership: 4.28 Private Company: 4.28 Co-operatives: 1.21 Others: 8.09 Not recorded:6.15
Source: Government of India 2014b, p.247 In the last decade, drastic changes were witnessed in the economy. To allow a greater
role to the private sector, the government of India has divested its investment in the
telecom industry and other hitherto public-sector industries, and significantly reduced
its regulatory involvement. This led to a fillip in the growth of the private sector, in
some cases, with the support of investment from abroad. As a result, many family-
owned firms like Tata, Birla, Ambani, DFL, and GMR have become household names
in India, and are involved in various large infrastructure ventures.
Overall, this improved the entrepreneurial climate in ways that were not thought of only
a few decades ago. Entrepreneurs, who were viewed with suspicion as profit-making
exploiters, are now acknowledged as achievers and heroes. In this changed economic
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environment, J.R.D Tata, who was a French-born Indian businessman and Chairman of
the Tata and Sons group, was conferred the highest civilian award, the Bharat Ratna
(when translated to English, it means ‘Jewel of India’). Similarly, Narayana Murthy, the
founder of software giant Infosys, is now compared to Bill Gates and revered for his
contribution to the Indian economy. Unsurprisingly, the GEM (Global Entrepreneurship
Monitor) report 2010 shows the Indian entrepreneurship climate in a very positive light
3.4.3 Education and entrepreneurship in India
In recent decades, India’s literacy rates have gone up (Kingdon 2007). To achieve
economic growth, India has also placed an emphasis on higher education, with many
universities and institutes of higher education being added every year. In 2012, there
were 567 universities in India. In addition, there are premier management and
technology institutes known as Indian Institutes of Management (IIMs), Indian
Institutes of Technology (IITs) and National Institutes of Technology (NITs). These are
owned by the central government and are spread across various states in the country. In
the last decade, higher education was opened up further to the private sector, and many
private universities were allowed to be established to meet the demand for higher
education. In the environment of economic reforms, not surprisingly, there has been an
increased emphasis on management and entrepreneurship programmes.
Management education in India is nearly 100 years old (Barman 2013). The first
tertiary-level college started in 1913 in Mumbai (then Bombay). A number of
universities started MBA programmes in the 1960s. During this time, on the
recommendation of Dean Robbins of the University of California, the first Indian
Institute of Management (IIM) was set up in 1961 in Calcutta by the government of
India. Later, other IIMs were established, which now number 13 and are located in
different parts of the country. These are the premier management educational institutes
of an international standard. Along with these management institutes, technical
institutions were also established. They were called Indian Institutes of Technology
(IITs), which also started offering management education. The economic reforms from
1991 and the privatisation of the economy that followed gave a fillip to management
education which resulted in the establishment of many private institutions and
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universities. Leading business houses like Infosys, Birlas, and Reliance etc. have started
their own business schools. Currently about 30,000 full-time MBAs and 10,000 part-
time MBAs are produced in the country. Additionally, a number of diplomas and
certificates in business-related areas are offered both by recognised and unrecognised
educational institutions. It should also be mentioned that India also hosts the world’s
largest university, namely the Indira Gandhi National Open University, which is a
distance university, with about four million students. There are many other regional
(state-level) universities that offer management education through distance or extra-
mural mode.
While many universities offer entrepreneurship education as part of the management
discipline, some specific institutions were established in India to promote
entrepreneurship. For example, the Entrepreneurship Development Institute of India
(EDII) was established in 1983 by government-owned banks and financial institutions.
Similarly, the National Science and Technology Entrepreneurship Development Board
(NSTEDB) was established in 1982 by the government of India to support
entrepreneurship in technical sectors. These institutions are supported and
complemented by the efforts of government departments and agencies in the form of
affirmative action and social empowerment programmes.
In addition, some universities have started university-based incubators to support
entrepreneurial ventures. For example, a leading premier business school in India, the
Indian Institute of Management, Ahmadabad, started the Centre for Innovation,
Incubation and Entrepreneurship (CIIE). The CIIE has successfully invested in and
incubated over 50 ventures (CIIE 2014). Likewise, many other educational institutions
such as the Birla Institute of Technology (BITS Pilani 2014) and the Indian Institute of
Technology Bombay (SINE 2013), to name but a few, are also involved in similar
initiatives, namely the Technology Business Incubator and the Society for Innovation
and Entrepreneurship (SINE). These incubators provide resources that are embedded
within the university to new venture creation on campus. Some of these resources are
highly technical and not easily available outside the university. In general, they support
innovation, provide employment and act as engines of economic development.
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Therefore, they play a crucial role in the overall economic development and wealth
creation in an emerging country like India and meet its strategic needs.
The above discussion shows that there is a large talent pool in India. While the top
graduates of the highly reputed management institutes take up professional careers in
the large firms, a very tiny proportion of them go on to establish their own businesses.
Interestingly, it is mainly those who are locally educated in regular universities that start
their business in India. Many of the small business owners and entrepreneurs are
relatively less educated and/or take up this career for want of employment. A significant
proportion of them have only school-level education or technical training at a basic
level. It is these people who establish and provide support to the economy at the ground
level.
3.5 Entrepreneurship research in India
For this study, I have examined the entrepreneurship research undertaken in India. To
my surprise, there had not been much academic research undertaken in this area. This
paucity of research relating to entrepreneurship in India was also commented upon by
Bruton, Ahlstrom and Obloj (2008), who highlighted the fact that there is only one
study from India for the period 1990-2006 that has been included in two popular
academic journals, Entrepreneurship Theory and Practice, and the Journal of Business
Venturing.
Having noted some renewed interest in newspapers and other anecdotal sources on the
role of entrepreneurship in India during the last few years, I further searched other
electronic databases. In these searches, I found a few more papers, but in general, the
research output was very limited and lacked academic rigour. The number of relevant
peer-reviewed articles found in my database searches is shown in Table 3.5.
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Table 3.5: Research on entrepreneurship in India
Journals/Database
Years Key Words relating to India
Total articles
Articles related to entrepreneurship in India)
Entrepreneurship & Regional Development (ERD)
1988-2013
Entrepreneur or Entrepreneurship
35 2
Entrepreneurship Theory and Practice
2007-2013
Entrepreneurship 7 7
EBSCO database 1979-2013
Personality and entrepreneurship
45 17
EBSCO database 1973-2013
Self-efficacy and entrepreneurship
12 2
Taylor & Francis Online
1973-2013
Entrepreneur and business
2 2
Taylor & Francis Online
1973-2013
Self-efficacy, personality and personality traits and entrepreneurs
0 0
Source: Compiled by the researcher using information from the various databases in November 2013
As mentioned earlier, my search for more research publications and similar outputs did
not prove to be much of a success and endorsed the view by taken by Bruton, Ahlstrom
and Obloj (2008) about a lack of adequate research on entrepreneurship in India. Many
of these studies were more about cultural aspects and other social institutions that
impacted on entrepreneurship in both the pre- and post-independence periods. For
example, Weber (1958) explored in-depth the social stratification and religious beliefs
of India, and the influence of the various castes and religions on trade and commerce.
Similarly, Misra (2000) examined the impact of caste and religions on entrepreneurship
in the pre-independence era. Other scholars (Tripathi 1971, 1981, Medhora 1965; Misra
2000) have delved into the values and beliefs of the various social castes and religions
and how these factors influenced the emergence of entrepreneurship in India in the post-
independence era. More current research explores various aspects such as
entrepreneurship education (Manimala 2008), family enterprises and partnerships
(Rutten 2001), industrial entrepreneurship (Koppel & Peterson 1975; van der Veen
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1976), development banks and entrepreneurship (Misra 1987), women entrepreneurship
(Bhardwaj 2014; Habib, Roni, & Haque 2005; Prasad et al. 2013), rural
entrepreneurship (Kanduja & Kaushik 2008), other development programmes and
entrepreneurship (Patel, 1987), and social entrepreneurship (Datta & Gailey 2012).
When my thesis was being finalised, I found quite a few interesting articles that had
been published in the last few months which indicated that researchers have started to
take an interest in this field (Krishnan 2013; Murty 2014; Ravi 2014; Williams &
Gurtoo 2013). The main findings of some selected articles are discussed below.
As seen earlier, entrepreneurship in India is rooted in a rich cultural context due to the
role of traditions and the caste system. Within these contextual limitations, Javillonar
and Peters (1973) examined whether entrepreneurship in India was influenced by a need
for achievement or by an extended family tradition. Their results suggest that Indian
entrepreneurship is positively linked to a particular type of ownership, namely the joint
or extended family. This is due to the fact that the joint family tradition in India is
characterised by three generations of family members living under one roof and sharing
the property and other resources. For an individual member, this joint family serves as a
self-sufficient unit and the centre of the universe and reference point. It is here that all
the major decisions on education, career, marriage etc. are taken. Hence the finding that
family ownership is a more prominent influencer than the individual personality factor
of need for achievement and is consistent with the joint family tradition of Indian
society.
Vasumathi et al. (2003) examined the impact of role stress on Indian entrepreneurs.
Following McClelland (1961), they categorised this role stress into three dimensions,
namely achievement-need related stress, power-need related stress, and affiliation-need
related stress. Their findings indicate that Indian entrepreneurs are affected by stress
caused by achievement and affiliation-need related stressors, but there is no evidence of
power-related stressors affecting them. They also find that entrepreneurs are able to
resort to silent, less expensive and tradition-bound stress reduction strategies. This may
be appropriate in a culturally rich society like India.
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Shivani, Mukherjee and Sharan (2006) looked at the socio-cultural influences on Indian
entrepreneurs. In particular, they examined a possible link between entrepreneurship
and socio-cultural factors like caste, religiosity and perceived family support. Their
study has revealed that caste and family support have a positive influence on
entrepreneurship. On the other hand, religiosity and the joint family system have no
influence. But given the cultural context of India, it also implies that they are not
hindering entrepreneurship in India. The fact that most of the entrepreneurs are from
upper castes provides evidence for the rigidity of caste-based occupations.
Interestingly, risk-propensity and innovativeness, which are critical for entrepreneurial
success in Western countries, were found to be low or moderate. These findings could
be explained due to existing structural factors relating to the society such as the caste
system and family orientation.
It is also gratifying to see a spurt in research articles in the last few months on
entrepreneurship in India. Krishnan (2013) examined how entrepreneurs’ personality
factors and entrepreneurial competences contributed to their venture success. Her
positive findings suggested that by making use of their competences, entrepreneurs can
create more opportunities for growth. In another interesting study, Williams and Gurtoo
(2013) surveyed 871 street entrepreneurs. The authors found that street entrepreneurs
are engaged in such entrepreneurial endeavours that are resilient, opportunity driven and
persistent. Bhardwaj (2014) examined the impact of education on women entrepreneurs
and found a positive influence. However, these women lacked time and resources,
which is understandable in the context of India, as they undertake the special
responsibilities of homemaking and motherhood. Ravi (2014) attempted to find the
factors that drive the development of MSME firms in different states in India. The main
findings suggest that the general improvements in physical and financial infrastructure
provided by government have contributed more to the growth of entrepreneurship. On
the other hand, there was no evidence that targeted policies such as financial subsidies
and the creation of special economic zones were of much help. It is possible that this
may be due to reverse causality of the government providing help to those firms that are
not doing well. On the whole, government support in the form of creating physical
infrastructure was found to be more effective in driving entrepreneurship.
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To sum up, entrepreneurship in India received a fillip due to government-initiated
economic reforms in the last two decades. Further, advancements in information
technology not only create new opportunities for entrepreneurs in the remote areas, but
could also hinder them through information overload. However, the presence of a high
context culture and the unique caste system underpin entrepreneurship in this country.
India, therefore, presents an ideal context to be able to test the application of
entrepreneurship theories developed in more mature economies. In particular, I would
like to test how the key entrepreneurship factors such as personality traits, self-efficacy,
and information overload can impact on entrpreneurship in the context of an emerging
economy.
3.6 Chapter summary
In this chapter, I have discussed the status of entrepreneurship in India. Since India is an
advanced emerging economy, I have described the characteristics of emerging
economies. Then I presented the details regarding entrepreneurship in India by focusing
on three areas, namely the socio-cultural background, the impact of entrepreneurship on
the economic development and how education is helping in developing
entrepreneurship culture. The discussion points out that the previous rigid social
structure is changing and that government is actively engaged in promoting
entrepreneurship.
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CHAPTER 4
CONCEPTUAL FRAMEWORK AND HYPOTHESES
In Chapter 2, I have reviewed the relevant literature relating to concepts such as
entrepreneurs’ personality characteristics, entrepreneurial self-efficacy, entrepreneurial
behaviour and information overload. Using these concepts, I propose a conceptual
framework that shows the linkages between the concepts mentioned. On the basis of
this conceptual framework, I also develop and propose a set of hypotheses which can be
empirically tested.
4.1 Conceptual framework and theoretical model
The chapter on the literature review has examined different concepts that impact on
entrepreneurship. Several personality factors have been discussed which were found to
influence entrepreneurs (McClelland 1961; Chell 2008). Also, the concept of
entrepreneurial self-efficacy was identified as being important for entrepreneurs, as it is
directly related to entrepreneurial intentions and behaviour (Krueger 2009; Rauch &
Frese 2000). Recently, some scholars have started examining entrepreneurial behaviour
i.e., they have tried to understand ‘what entrepreneurs actually do’. Finally, the concept
of entrepreneurial overload and its impact on entrepreneurship have become a major
concern in our current information-based society. I combine all these constructs, and
propose a theoretical framework in Figure 4.1. My conceptual model shows that
entrepreneurs’ personality factors are related to entrepreneurial self-efficacy. Both these
sets of constructs are in turn related to entrepreneurial behaviour. Accordingly, I have
developed a set of hypotheses that is proposed in this chapter.
Of the four major theoretical constructs that I have identified in this study
(entrepreneurs’ personality characteristics, entrepreneurial self-efficacy, entrepreneurial
behavioural activities and information overload), I examine them in pairs for their
relationships, and develop hypotheses on that basis. The hypotheses are used for
empirical testing as explained in Chapter 5 dealing with methodology.
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4.2 Personality characteristics and entrepreneurial self-efficacy
We know that individuals are at the centre of the entrepreneurship process. It is
therefore important to examine their personality characteristics and how these impact on
the entrepreneurship process. The literature shows that personality characteristics
significantly influence entrepreneurship (e.g., Brockhaus 1975; Caliendo, Fossen &
Kritikos 2014; McClelland 1961; Zhao & Seibert 2006). Researchers have identified
several personality characteristics of entrepreneurs, which are shown in Tables 2.2 and
2.3. As can be noted from these tables, the specific personality characteristics identified
are many. Of these, three personality characteristics were found to be very popular in
entrepreneurial research; these are need for achievement, internal locus of control and
risk-taking propensity (Sahin, Nijkamp & Rietdijik 2009; Tang & Tang 2007).
However, these studies were mostly conducted in developed countries. In my study, I
use them in the context of an emerging economy.
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Another personality attribute, which is different from personality characteristics, is
called entrepreneurial self-efficacy. According to Chen, Greene and Crick (1998), this
refers to the strength of a person’s belief that he or she is capable of successfully
performing various roles and tasks of entrepreneurship. The above authors believed that
entrepreneurial self-efficacy can be used to “predict and study entrepreneurs’ behaviour
choice, persistence, and effectiveness” (p. 301). Boyd and Vozikis (1994) proposed self-
efficacy as a critical antecedent of entrepreneurial intentions and actions. For this, Chen,
Greene and Crick (1998) provided empirical evidence that entrepreneurs’ self-efficacy
is positively related to their intentions to start businesses. Other scholars have examined
the relationship of specific dimensions that constitute the ESE construct to different
entrepreneurial tasks such as opportunity recognition, planning, marketing, risk-taking,
financial control, and coping with unexpected challenges. (Anna et al. 2000; DeNoble,
Jung & Ehrlich 1999; Hmieleski & Corbett 2008; Kolveried & Isaken 2006; Zhao,
Seibert & Hills 2005). Clearly, there are many dimensions in entrepreneurial self-
efficacy that are relevant to entrepreneurial tasks. However, most of the previous studies
have used a composite score to measure entrepreneurial self-efficacy and the impact of
the multiple underlying dimensions was not captured. Recently, McGee et al. (2009)
identified five different dimensions of entrepreneurial self-efficacy that are related to
the venture creation process model: a) searching, b) planning, c) marshalling, and d)
implementing. The final phase of implementing covers two different tasks relating to (d-
i) people and (d-ii) finances. I found another dimension that is related to entrepreneurial
self-efficacy. That is about e) coping with unexpected challenges in the context of
entrepreneurship as proposed by DeNoble, Jung and Ehrlich (1999). For an
entrepreneur, each of these dimensions of entrepreneurial self-efficacy is important, and
hence are included in my model for empirical investigation.
However, these two categories of dimensions of entrepreneurs (i.e. personality
characteristics and self-efficacy) do not exist in isolation, as personality characteristics
were found to affect self-efficacy (Bandura 1986). Past studies have shown that there is
some association between personality characteristics and self-efficacy (Phillips & Gully
1997; Zhao, Seibert & Hills 2005). Personality characteristics were also found to affect
an individual’s self-efficacy in job acceptance behaviour (Wooten 1991) and his/her
ability to engage in entrepreneurial activities (Rauch & Frese 2000). Explaining the
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linkage between personality traits and self-efficacy, Petrides (2011) observes,
“personality traits confer on the individual a propensity to perceive convergences and
divergences between their belief that they can attain goals and the importance that they
place on the goals” (pp.64-65). This implies that personality characteristics shape an
individual’s self-efficacy in achieving goals.
While the above discussion shows that the entrepreneurs’ personality characteristics and
their self-efficacy are related, the impact of each of these personality characteristics may
not be uniform on each dimension of entrepreneurial self-efficacy. Therefore, in the
following sections, I will examine the relationship between each personality
characteristic and the various dimensions of entrepreneurial self-efficacy, and propose a
set of hypotheses.
4.2.1 Personality characteristic of need for achievement and dimensions of entrepreneurial self-efficacy
Several scholars have identified the personality characteristic of the need for
achievement as an important construct of an individual’s personality (Collins, Hanges &
Locke 2004; Hornaday & Aboud 1971; McClelland 1961). McClelland’s (1961)
seminal work explains that individuals with a high need for achievement have a higher
drive to excel. Jackson (1974, p.6) describes this type of individual as one who
“maintains high standards” as well as one who “aspires to accomplish different tasks".
This characteristic influences an individual’s work behaviour to a great extent (Lumpkin
& Erdogan 2000). Such individuals are high achievers, and they like situations where
they take personal responsibility, particularly when they are faced with problems and/or
challenges. McClelland (1965) found that students with a higher need for achievement
were found to gravitate towards entrepreneurship and other business occupations.
According to Littunen (2000), McClelland’s theory suggests that individuals with a high
need for achievement will not only become entrepreneurs, but succeed better than
others. Empirical studies have shown that need for achievement is positively associated
with entrepreneurship (Caliendo, Fossen & Kritikos 2014; Davidsson 1989; Stewart et
al. 1999).
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Collins, Hanges and Locke’s (2004) meta-analytic study found that individuals with a
higher need for achievement were more attracted to entrepreneurship, as it offers them
an opportunity for a higher degree of control over outcomes and also allows them to
assume personal responsibility. This can be related to the concept of entrepreneurial
self-efficacy, which refers to an individual’s confidence in his/her ability to successfully
launch an entrepreneurial venture (McGee et. al. 2009) and perform entrepreneurial
roles (Chen, Greene & Crick 1998). Clearly, those who possess a higher degree of
entrepreneurial self-efficacy would also like to take personal responsibility in order to
control entrepreneurial outcomes. However, as McGee (2009) pointed out, there are
several dimensions that constitute the construct of entrepreneurial self-efficacy. In my
study, entrepreneurial self-efficacy consists of six different dimensions that were
identified from the literature; they are searching, planning, marshalling, implementing
people-related tasks, implementing finance-related tasks and ability to cope with
unexpected challenges. The first five dimensions were identified by McGee et al. (2009)
and the sixth dimension was taken from the study of DeNoble, Jung and Ehrlich (1999)
which relates to the level of confidence the entrepreneur has in his /her ability to stay
calm in the face of unexpected challenges. It is therefore necessary to examine the
relationship between the personality characteristic of the need for achievement and each
of the six dimensions of entrepreneurial self-efficacy. Accordingly, the following
hypotheses are proposed:
H1a-H1f - Personality characteristics of need for achievement and dimensions of entrepreneurial self-efficacy:
Hypothesis 1a: The personality characteristic of need for achievement is positively associated with the searching capability dimension of entrepreneurial self-efficacy.
Hypothesis 1b: The personality characteristic of need for achievement is positively associated with the planning capability dimension of entrepreneurial self-efficacy.
Hypothesis 1c: The personality characteristic of need for achievement is positively associated with the marshalling capability dimension of entrepreneurial self-efficacy.
Hypothesis 1d: The personality characteristic of need for achievement is positively associated with the implementing people-related capability dimension of entrepreneurial self-efficacy.
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Hypothesis 1e: The personality characteristic of need for achievement is positively associated with the implementing finance-related capability dimension of entrepreneurial self-efficacy.
Hypothesis 1f: The personality characteristic of need for achievement is positively associated with the coping with unexpected challenges capability dimension of entrepreneurial self-efficacy.
4.2.2 Personality characteristic of internal locus of control and dimensions of entrepreneurial self-efficacy
Locus of control is a personality trait that refers to a general expectancy across a range
of situations relating to whether or not an individual has control or power over what
happens to him or her. This construct has two dimensions of locus of control: internal
and external. According to Lefcourt (1966), internal locus of control reflects the degree
to which an individual perceives that an outcome of their behaviour is within their own
control, while the external locus of control reflects the perception of an individual that
the outcomes of their behaviour are determined by external factors and therefore not
within their own control. Hence the individuals with internal locus of control believe
that they can determine their future outcomes by their own actions. Past studies have
also shown that individuals who perceive they have control of the environment, in other
words people who have a high internal locus of control, show a relationship to greater
self-efficacy (Wood & Bandura 1989a; Phillips & Gully 1997). In entrepreneurship, we
expect that entrepreneurs are individuals who possess the personality characteristic of
internal locus of control, as they are self-motivated individuals who take the initiative in
entrepreneurial efforts and who take responsibility for achieving a venture’s set goals
(McClelland 1961; Mueller & Thomas 2001). Researchers have found that nascent
entrepreneurs who had entrepreneurial intentions had a higher degree of internal locus
of control than those who did not have such plans (Borland 1974; Brockhaus 1975).
Cromie and Johns (1993) found that practicing entrepreneurs possessed more internal
locus of control than managers. It is also suggested that a person with high internal
locus of control believes that he/she can use their skill and efforts in order to control the
events in his/her life (Boone, Brabander & Van Witteloostuijn 1996).
The above discussion points out that the ability to take the initiative and responsibility
could be associated with the personality characteristic of internal locus of control of
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entrepreneurs. This kind of psychological attitude forms the basis of entrepreneurial
self-efficacy, where the individual believes in his or her capacity to accomplish a certain
level of performance or achieve desired outcomes, which in turn influences the
individual’s behaviour (Bandura 1986). According to Markman, Balkin and Baron
(2002), individuals are motivated by their perceived self-efficacy rather than by an
objective ability; hence self-perception is very important. The perception of being able
to control an event is closely related to self-efficacy (Phillips & Gully 1997). However,
as discussed earlier, I have identified six different dimensions of entrepreneurial self-
efficacy i.e., searching, planning, marshalling, implementing people-related tasks,
implementing finance-related tasks and ability to cope with unexpected challenges. It
follows that those entrepreneurs who have a high internal locus of control will have also
have a high self-efficacy in activities pertaining to entrepreneurship such as planning,
risk-taking, and coping with the environment. At this stage, there is no empirical
evidence associating the construct of internal locus of control of entrepreneurs with each
of the six entrepreneurial self-efficacy dimensions separately. Therefore, I propose the
following hypotheses:
H2a-H2f – Personality characteristics of internal locus of control and entrepreneurial self-efficacy:
Hypothesis 2a: The personality characteristic of internal locus of control is positively associated with the searching capability dimension of entrepreneurial self-efficacy.
Hypothesis 2b: The personality characteristic of internal locus of control is positively associated with the planning capability dimension of entrepreneurial self-efficacy.
Hypothesis 2c: The personality characteristic of internal locus of control is positively associated with the marshalling capability dimension of entrepreneurial self-efficacy.
Hypothesis 2d: The personality characteristic of internal locus of control is positively associated with the implementing people-related capability dimension of entrepreneurial self-efficacy.
Hypothesis 2e: The personality characteristic of internal locus of control is positively associated with the implementing finance-related capability dimension of entrepreneurial self-efficacy.
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Hypothesis 2f: The personality characteristic of internal locus of control is positively associated with the coping with unexpected challenges capability dimension of entrepreneurial self-efficacy.
4.2.3 Personality characteristic of risk-taking propensity and dimensions of entrepreneurial self-efficacy
An important personality characteristic of entrepreneurs is risk taking. This refers to an
individual’s current tendency to take or avoid risk (Sitkin & Weingart 1995). Risk
taking is inherent in every decision an entrepreneur takes in the face of uncertain
situations, whether it is to become an entrepreneur or to make investment decisions,
particularly so because the outcomes of these decisions are unpredictable (Caliendo,
Fossen & Kritikos 2014). Therefore, the tendency of individuals to take risks has been
viewed as an important characteristic associated with entrepreneurship (Zhao, Seibert &
Lumpkin 2010). Several studies have found that individuals with higher risk-taking
propensity engage in entrepreneurial ventures, while those individuals who are risk
averse choose to work for others (Carland III et al. 1995; Stewart et al. 1999). In another
study, Hartog, Ferrer-i-Carbonell and Jonker (2002) found that entrepreneurs are less
risk averse than employed persons.
But not all studies provide categorical evidence to support a risk-taking propensity by
entrepreneurs. Brockhaus (1980b) could not differentiate between entrepreneurs and
non-entrepreneurs based on the risk-taking characteristic. In a meta-analytic study by
Stewart and Roth (2001), the authors found that entrepreneurs did have a higher risk
propensity compared to managers. But these findings were contested by Miner and Raju
(2004), who suggested that entrepreneurs are actually risk-avoidant, which in turn was
rebutted by Stewart and Roth (2004). Other scholars argue for the need to consider other
factors such as cognitive patterns (Palich & Bagby 1995) and distinct phases of
entrepreneurship (Markman, Baron & Balkin 2005). In a recent meta-analysis, Zhao,
Seibert and Lumpkin (2010) found risk is positively related to entrepreneurial intention,
but not necessarily to other measures of entrepreneurial performance. They also found
that the risk-taking characteristic is particularly important during the early stages of
entrepreneurship when the entrepreneurs seek out opportunities, network, and acquire
resources to embark on their new venture, but they are not sure if this was an asset or a
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liability afterwards. Hence, it cannot be concluded whether risk-taking is compulsory
for entrepreneurs.
Scholars such as Zhao, Seibert and Hills (2005) suggest that individuals who have a
high risk-taking propensity will be more likely to want to pursue entrepreneurial
activities because they may feel more confident in undertaking entrepreneurial roles and
tasks necessary to succeed. Such individuals will be expected to be positively associated
with entrepreneurial self-efficacy, which indicates belief in their confidence in pursuing
their goals (Markman, Balkin & Baron 2002). However, the entrepreneurial self-
efficacy construct in our study constitutes six different dimensions, namely searching,
planning, marshalling, implementing people-related tasks, implementing finance-related
tasks and ability to cope with unexpected challenges (DeNoble, Jung & Ehrlich 1999;
McGee et al. 2009). How this risk-taking propensity affects each of the dimensions of
entrepreneurial self-efficacy was not, however, examined before. Hence, I propose the
following set of hypotheses:
H3a-3f- Personality characteristics of risk-taking propensity and dimensions of entrepreneurial self-efficacy:
Hypothesis 3a: The personality characteristic of risk-taking propensity is positively associated with the searching capability dimension of entrepreneurial self-efficacy.
Hypothesis 3b: The personality characteristic of risk-taking propensity is positively associated with the planning capability dimension of entrepreneurial self-efficacy.
Hypothesis 3c: The personality characteristic of risk-taking propensity is positively associated with the marshalling capability dimension of entrepreneurial self-efficacy.
Hypothesis 3d: The personality characteristic of risk-taking propensity is positively associated with the implementing people-related capability dimension of entrepreneurial self-efficacy.
Hypothesis 3e: The personality characteristic of risk-taking propensity is positively associated with the implementing finance-related capability dimension of entrepreneurial self-efficacy.
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Hypothesis 3f: The personality characteristic of risk-taking propensity is positively associated with the coping with unexpected challenges capability dimension of entrepreneurial self-efficacy.
4.3 Entrepreneurial information overload and entrepreneurial self-efficacy
Previous research indicates that entrepreneurs who have high levels of entrepreneurial
self-efficacy are positively related to their entrepreneurial intentions and career (Chen,
Greene & Crick 1998, De Noble, Jung & Ehrlich 1999; McGee et al. 2009). Similarly, a
study by Forbes (2005) found a positive relationship between entrepreneurial self-
efficacy and new venture performance. A successful entrepreneur is expected to
perform the tasks of opportunity seeking, venture creation and growth. As De Noble,
Jung and Ehrlich (1999) point out, one of the key dimensions of entrepreneurial self-
efficacy is developing opportunities. This suggests that the key to succeed as an
entrepreneur is to make good decisions at various stages of entrepreneurship, namely
opportunity seeking, venture creation and growth. Understandably, successful
entrepreneurship requires, among others things, an ability to access information to make
relevant and timely decisions. The literature clearly shows that business owners and
managers constantly scan and monitor their operating environment in order to look for
new opportunities and strengthen their competitive position (Keh, Foo & Lim 2007;
Welsch & Young 1982).
In present times, a large amount of information is not only made available to
entrepreneurs, but is also made available sooner (Spira, 2011). Access to the right
amount of information helps in coping with uncertainty by reducing it (Schick, Gordon
& Haka 1990). Further, when information is organised into meaningful schemas, it can
contribute to entrepreneurs’ self-efficacy and performance (Ozgen & Baron 2007;
Markman, Balkin & Baron 2002). However, with the explosion of information
technology and gadgets in the modern world, business managers are subjected to
information overload, which reduces their ability to make good decisions (Speier,
Valacich & Vessey 1999). So now the problem is not just lack of access to information,
but an overload of information (Shapiro & Varian, 1999). This information overload
reduces the effectiveness of decision making (Miller, 1972; Schick, Gordon & Haka
1990) and increases information anxiety (Bawden & Robinson 2008). As mentioned
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earlier (Conger & Kanungo 1988; Bandura 1977), such emotional arousal, or
physiological responses resulting from anxiety, stress or fear, can negatively impact on
self-efficacy. In my study, the entrepreneurial self-efficacy construct has six
dimensions, as discussed earlier, and these are likely to be adversely affected by
information overload. This is because decision makers experiencing information
overload may ignore available information and become selective or even lose control
over information (Bawden 2001; Edmunds & Morris 2000). Based on these arguments,
I propose the following set of hypotheses.
H4a-4f- Entrepreneurial information overload and entrepreneurial self-efficacy dimensions
Hypothesis 4a: Entrepreneurial information overload is negatively associated with the searching capability dimension of entrepreneurial self-efficacy.
Hypothesis 4b: Entrepreneurial information overload is negatively associated with the planning capability dimension of entrepreneurial self-efficacy.
Hypothesis 4c: Entrepreneurial information overload is negatively associated with the marshalling capability dimension of entrepreneurial self-efficacy.
Hypothesis 4d: Entrepreneurial information overload is negatively associated with the implementing people-related capability dimension of entrepreneurial self-efficacy.
Hypothesis 4e: Entrepreneurial information overload is negatively associated with the implementing finance-related capability dimension of entrepreneurial self-efficacy.
Hypothesis 4f: Entrepreneurial information overload is negatively associated with the coping with unexpected challenges capability dimension of entrepreneurial self-efficacy.
4.4 Entrepreneurial information overload and entrepreneurial behavioural activities
The literature shows that with growing information technology and an ever-changing
environment, the state of information inadequacy has changed. Entrepreneurs
consciously engage in gathering information for entrepreneurial decisions and
implementation. But information is now available in abundance from multiple sources,
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leading to information overload. Eppler and Mengis (2004) maintain that a combination
of five factors causes information overload: (i) information in terms of its volume,
frequency, intensity, and quality; (ii) the receiver; (iii) the tasks that need to be
accomplished; (iv) the organisational design; and (v) the information technology. They
combine to overwhelm the information processing capacity of an individual, which
adversely affects decision making (Speier, Valacich & Vessey 1999).
According to Bird, Schjoedt and Baum (2012), entrepreneurial behaviour consists of the
observable actions (activities) of the individual and the responses that are evoked by
those activities. Some of the entrepreneurial behavioural activities identified are:
planning, business location, writing a business plan, human resources management,
seeking outside advice, and seeking external support for financial and advisory
assistance (Envick & Luthans 1996; Bird & Schjoedt 2009; Haber & Reichel 2007).
Others refer to behaviours such as gathering resources and networking (Tornikoski &
Newbert 2007). However, the range of behaviours identified is not unanimously
agreed, and scholars believe that the research has not sufficiently addressed the nature
of different entrepreneurial behavioural activities (Bird, Schjoedt & Baum 2012). Many
studies have restricted them to activities in starting a venture or exhibiting the intention
of starting one. In recent times, Luthans and Ibrayeva (2006) have tried to understand
the specific behaviours of practicing entrepreneurs i.e., what they actually do. They
have identified the following activities: planning, controlling, internal communication,
human resources management, work-related tasks, customer service, socialising,
politicking and on-job personal time. Since their study was done in the transition
economies of Kazakhastan and Kyrgyzstan, they can be easily applied to an emerging
economy as they share similar characteristics; therefore, they were used in my study.
However, it must be acknowledged that social psychologists suggest that the behaviours
are constrained by contextual factors. Past research has shown that an individual’s
behaviour can be impacted by information overload in many ways, including omission,
where the individual may fail to attend to all information, and error, where the
information may be assimilated incorrectly (Vickery & Vickery 1987). As mentioned
before, information overload makes individuals frequently suffer from cognitive strain
and stress (Schick, Gordon & Haka 1990) and results in their inability to make timely
decisions (Bawden 2001; Speier, Valacich & Vessey 1999). This can have a negative
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impact on the behavioural activities of entrepreneurs. For example, Klausegger,
Sinkovics and Zou (2007) pointed out that managers collected too much information
which they were unable to use efficiently, and this negatively impacted on their task
accomplishment. It follows that information overload can have a negative impact on the
behavioural activities of entrepreneurs. Hence, the following set of hypotheses is
proposed:
H5a-5h- Entrepreneurial information overload and entrepreneurial behavioural activities
Hypothesis 5a: Entrepreneurial information overload is negatively associated with the planning dimension of entrepreneurial behavioural activities.
Hypothesis 5b: Entrepreneurial information overload is negatively associated with the controlling dimension of entrepreneurial behavioural activities.
Hypothesis 5c: Entrepreneurial information overload is negatively associated with the internal communication dimension of entrepreneurial behavioural activities.
Hypothesis 5d: Entrepreneurial information overload is negatively associated with the human resources management dimension of entrepreneurial behavioural activities.
Hypothesis 5e: Entrepreneurial information overload is negatively associated with the work-related tasks dimension of entrepreneurial behavioural activities.
Hypothesis 5f: Entrepreneurial information overload is negatively associated with the customer service dimension of entrepreneurial behavioural activities.
Hypothesis 5g: Entrepreneurial information overload is negatively associated with the socialising dimension of entrepreneurial behavioural activities.
Hypothesis 5h: Entrepreneurial information overload is negatively associated with the politicking dimension of entrepreneurial behavioural activities.
4.5 Personality characteristics and entrepreneurial behavioural activities
Research indicates that entrepreneurs’ personality characteristics play a substantial role
in predicting behaviour (Bridge, O’Neill & Cromie 2003, Chell 2008; Rauch & Frese
2000). Personality traits in fact “provide the reasons for the person’s behaviour” (Mount
et al. 2005, p.448). These personality characteristics or traits are not merely the
psychological property of an individual, but something that manifests through behaviour
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(McCarthy 2000). Accordingly, these characteristics have been conceptualised as
having the propensity to act, and therefore predict entrepreneurial behaviour (Rauch &
Frese 2000). The literature reveals the existence of several personality characteristics as
being important to entrepreneurship, but only three of them have been identified as ‘the
big three’ (Chell 2008). These three personality characteristics are: need for
achievement, internal locus of control and risk-taking propensity. Further, Rauch and
Frese (2007a) point out that specific personality characteristics that match work
characteristics are more likely to predict entrepreneurial behaviour. Since ‘the big three’
personality characteristics were found to be important for entrepreneurship, the effect of
these characteristics on entrepreneurial behavioural activities is examined in this study.
In the past, what was construed as being entrepreneurial behavioural activities has been
largely confined to activities that engage in the intention to start a venture or actually
starting it. However, this limited understanding of entrepreneurial behaviour is not
practical, as entrepreneurship was seen to be an evolving process rather than a state of
being (Bygrave 1989). Few scholars have focused on the behavioural activities of
practicing entrepreneurs (Luthans, Envick & Anderson 1995; Luthans & Ibrayeva
2006). The entrepreneurial behavioural activities identified in these studies were related
to planning, controlling, internal communication, human resources management, work-
related tasks, customer service, socialising and politicking. I therefore examine the link
between ‘the big three’ personality characteristics and entrepreneurial behavioural
activities in my study.
4.5.1 Personality characteristic of need for achievement and entrepreneurial behavioural activities
As seen earlier, the need for achievement denotes an individual’s drive to excel in
accomplishing a goal (McClelland 1961). By achieving their targets, these individuals
feel a sense of accomplishment and satisfaction. This personality characteristic is found
to influence an individual’s work behaviour (Lumpkin & Erdogan 2000), and raise
his/her expectation of doing something better or faster than others, or even their own
personal accomplishments previously (Hansemark 2003). In the entrepreneurship field,
individuals with a higher need for achievement are more likely to engage in activities
that help them in succeeding in their entrepreneurial efforts (Collins, Hanges & Locke
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2004; McClelland 1965; Tang & Tang 2007). Begley and Boyd (1987) have found a
positive relationship between need for achievement and venture growth rates.
Similarly, Johnson (1990) found that the need for achievement can predict firm
founding, while Collins, Locke and Hanges (2000) showed it to be an effective tool to
differentiate between successful and unsuccessful business founders. Shane, Locke and
Collins (2003) endorse the importance of the need for achievement characteristic in
explaining entrepreneurial activities. In Utsch and Rauch’s (2000) study, achievement
orientation was examined for its effect on venture performance through two mediating
variables, namely innovative and initiative behaviours; the innovative behaviour was
found to have a significant impact. Similarly, Korunka et al. (2003) examined a
complex configuration that included not only entrepreneurs’ personality, but also other
constructs such as resources, environment, and organisational activities, whose effect
was found to exist moderately. Clearly, personality characteristics have an impact on the
entrepreneurs’ observable behavioural activities at varying levels. In my study, I have
included eight specific behavioural activities of entrepreneurs that were identified
recently (Luthans & Ibrayeva 2006), and I propose to examine how they are influenced
by the personality characteristic of need for achievement. Accordingly, the following set
of hypotheses is presented:
H6a-H6h - Need for achievement and entrepreneurial behavioural activities:
Hypothesis 6a: The personality characteristic of need for achievement is positively associated with the planning dimension of entrepreneurial behavioural activities.
Hypothesis 6b: The personality characteristic of need for achievement is positively associated with the controlling dimension of entrepreneurial behavioural activities.
Hypothesis 6c: The personality characteristic of need for achievement is positively associated with the internal communication dimension of entrepreneurial behavioural activities.
Hypothesis 6d: The personality characteristic of need for achievement is positively associated with the human resources management dimension of entrepreneurial behavioural activities.
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Hypothesis 6e: The personality characteristic of need for achievement is positively associated with the work-related tasks dimension of entrepreneurial behavioural activities.
Hypothesis 6f: The personality characteristic of need for achievement is positively associated with the customer service dimension of entrepreneurial behavioural activities.
Hypothesis 6g: The personality characteristic of need for achievement is positively associated with the socialising dimension of entrepreneurial behavioural activities.
Hypothesis 6h: The personality characteristic of need for achievement is positively associated with the politicking dimension of entrepreneurial behavioural activities.
4.5.2 Personality characteristic of internal locus of control and entrepreneurial behavioural activities
Another personality characteristic of entrepreneurs that can influence entrepreneurial
behavioural activities is internal locus of control. This characteristic is pertinent to
entrepreneurs who are self-motivated individuals who take the initiative and engage in
entrepreneurial efforts. They also take responsibility for their outcomes, rather than
depending on others. Prior research has found that individuals with a high degree of
internal locus of control believe that they determine the future outcomes of their actions
(Cromie & Johns 1983; Krueger 2009). Littunen (2000) points out that internal locus of
control is positively associated with entrepreneurial behaviour. Internal locus of control
is found to motivate entrepreneurial behaviour (Mueller & Thomas 2001). Individuals
with high internal locus of control may be frustrated if working for others, and set up
their own ventures (Bridge, O’Neill & Cromie 2003). Recently, Caliendo, Fossen and
Kritikos (2014) found that individuals who scored highly on internal locus of control
had a high probability of starting a business venture.
On the other hand, entrepreneurship does not stop with only intending to start, or
actually establishing, a business venture. Instead, they may be required to stabilise and
put the business on a growth path. Muller, Volery and Von Siemens (2012) observed
entrepreneurs of firms in the growth phase and found them, as practicing entrepreneurs,
to possess different types of behaviours. These are largely similar to the eight
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behaviours of entrepreneurs found by Luthans and Ibrayeva (2006) in transition
economies. I therefore expect the internal locus of control to impact on entrepreneurial
behavioural activities. Accordingly, the following set of hypotheses is proposed:
H7a-H7h - Internal locus of control and entrepreneurial behavioural activities:
Hypothesis 7a: The personality characteristic of locus of control is positively associated with the planning dimension of entrepreneurial behavioural activities.
Hypothesis 7b: The personality characteristic of locus of control is positively associated with the controlling dimension of entrepreneurial behavioural activities.
Hypothesis 7c: The personality characteristic of locus of control is positively associated with the internal communication dimension of entrepreneurial behavioural activities.
Hypothesis 7d: The personality characteristic of locus of control is positively associated with the human resources management dimension of entrepreneurial behavioural activities.
Hypothesis 7e: The personality characteristics of locus of control is positively associated with the work-related tasks dimension of entrepreneurial behavioural activities.
Hypothesis 7f: The personality characteristic of locus of control is positively associated with the customer service dimension of entrepreneurial behavioural activities.
Hypothesis 7g: The personality characteristic of locus of control is positively associated with the socialising dimension of entrepreneurial behavioural activities.
Hypothesis 7h: The personality characteristic of locus of control is positively associated with the politicking dimension of entrepreneurial behavioural activities.
4.5.3 Personality characteristic of risk-taking propensity and entrepreneurial behavioural activities
The risk-taking characteristic was found to be the distinguishing characteristic of
entrepreneurs which set them apart from non-entrepreneurs (Begley & Boyd 1987;
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Carland, Carland & Stewart 1999; Palich & Bagby 1995). It is viewed as being inherent
in every decision that entrepreneurs take, as the outcome of these decisions is
unpredictable (Caliendo Fossen & Kritikos 2014). Entrepreneurial activities do have
inherent risks associated with them, so only those individuals with a higher risk-taking
propensity will engage in these activities, while those with a low risk-taking propensity
will most likely work for others (Carland III et al. 1995; Stewart et al. 1999). However,
in other studies, risk-taking could not distinguish entrepreneurs from non-entrepreneurs
(Brockhaus 1980b; Carland III et al. 1995). Miner and Raju (2004) suggested that
entrepreneurs are actually risk-avoidant.
Otherwise, several studies which examine the impact of the risk-taking propensity focus
on its influence on an individual’s decision to become an entrepreneur, and very few
studies explore risk taking’s impact after the commitment to start a business has been
made (McCarthy 2000). Therefore, it is necessary to examine the entrepreneurs’ risk-
taking propensity across a venture’s life cycle, i.e., to go beyond the stage of starting a
business (Stewart & Roth 2001; Baron & Markman 2005). This will allow for
avoidance of survivor bias, if any. To this purpose, my study seeks to understand how a
risk-taking propensity is related to observable behavioural activities of entrepreneurs,
something which has been relatively under-researched (Bird, Schjoedt & Baum 2012).
Mueller, Volery and Von Siemens (2012) presented a taxonomy of entrepreneurs’
behaviours as a venture is established and grows. Luthans and Ibrayeva (2006)
identified eight entrepreneurial behavioural activities in transition economies. It is
therefore important to understand how the risk-taking propensity is related to the
entrepreneurial behavioural activities of practicing entrepreneurs. I propose a positive
relationship between them. Accordingly, the following set of hypotheses is presented:
H8a-H8h – Risk-taking propensity and entrepreneurial behavioural activities
Hypothesis 8a: The personality characteristic of risk-taking propensity is positively associated with the planning capability dimension of entrepreneurial behavioural activities.
Hypothesis 8b: The personality characteristic of risk-taking propensity is positively associated with the controlling dimension of entrepreneurial behavioural activities.
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Hypothesis 8c: The personality characteristic of risk-taking propensity is positively associated with the internal communication dimension of entrepreneurial behavioural activities.
Hypothesis 8d: The personality characteristic of risk-taking propensity is positively associated with the human resources management dimension of entrepreneurial behavioural activities.
Hypothesis 8e: The personality characteristic of risk-taking propensity is positively associated with the work-related tasks dimension of entrepreneurial behavioural activities.
Hypothesis 8f: The personality characteristic of risk-taking propensity is positively associated with the customer service dimension of entrepreneurial behavioural activities.
Hypothesis 8g: The personality characteristic of risk-taking propensity is positively associated with the socialising dimension of entrepreneurial behavioural activities.
Hypothesis 8h: The personality characteristic of risk-taking propensity is positively associated with the politicking capability dimension of entrepreneurial behavioural activities.
4.6 Entrepreneurial self-efficacy and entrepreneurial behavioural activities
In general, self-efficacy beliefs have been touted as being a very important variable in
understanding the behaviour of an individual because they cause individuals to reflect
on their capabilities and subsequently regulate their choices and efforts (Bandura 1982).
If the individual perceives a particular behaviour to be beyond his/her ability, then the
individual will not act in that direction, even if there is a perception of demand for such
behaviour (Boyd & Vozikis 1994). In fact, Shane, Locke and Collins (2003) have
singled out self-efficacy as being the best predictor of an individual’s performance in a
task, and they assert that individuals with high self-efficacy will “exert more effort for a
greater length of time, persist through setbacks, set and accept higher goals and develop
better plans and strategies for the task” (2003, p. 267). It is theorised that a sense of
entrepreneurial self-efficacy is essential to increase the probability of entrepreneurial
actions (Boyd & Vozikis 1994). They also suggest identifying key efficacy perceptions
in determining future performance (i.e. behaviour) levels of individuals. As Bridge,
O’Neill and Cromie (2003, p.90) assert, ‘perceived self-efficacy leads to intentions
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which ultimately lead to behaviour’, but behaviour, in turn, could influence self-
efficacy.
As discussed earlier in this chapter, this study is examining the entrepreneurial
behavioural activities of practicing entrepreneurs as identified by the studies done by
Luthans, Envick and Anderson (1995) and Luthans and Ibrayeva (2006). The
behavioural activities examined are activities in the areas of planning, controlling,
internal communication, work-related tasks, human resources management, customer
service, socialising and politicking. Thus it is proposed that there is positive association
between each specific entrepreneurial self-efficacy dimension and each dimension of
the entrepreneurial behavioural activities.
4.6.1 Dimensions of entrepreneurial self-efficacy and the planning dimension of entrepreneurial behavioural activities
While entrepreneurial self-efficacy was examined earlier in different studies (e.g., Chen,
Greene & Crick 1998; DeNoble, Jung & Ehrlich 1999; Hmieleski & Corbett 2008;
Zhao, Seibert & Hills 2005), the entrepreneurial self-efficacy construct of my study has
specific dimensions that were identified from the studies of McGee et al. (2009) and
DeNoble, Jung and Ehrlich (1999). These six dimensions are: searching, planning,
marshalling, implementing people-related tasks, implementing finance-related tasks,
and coping with unexpected challenges. However, none of these dimensions was
directly tested empirically with entrepreneurial behavioural activities, which provided
me with an opportunity to examine their relationship in this study. Studies have
examined the importance of early business planning and advocated its importance in
helping entrepreneurs achieve their goals and also make quick decisions (Delmar &
Shane, 2003). Therefore, practicing entrepreneurs are expected to continue planning
even after the venture is established and growing. Luthans and Ibrayeva (2006)
observed that entrepreneurs spent a good amount of their time in planning activities.
Hence, I propose the following set of hypotheses that shows a positive relationship
between different dimensions of entrepreneurial self-efficacy and the planning
dimension of entrepreneurial behavioural activities:
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Hypothesis 9a: The entrepreneurial self-efficacy dimension of searching is positively associated with the planning dimension of entrepreneurial behavioural activities.
Hypothesis 10a: The entrepreneurial self-efficacy dimension of planning is positively associated with the planning dimension of entrepreneurial behavioural activities.
Hypothesis 11a: The entrepreneurial self-efficacy dimension of marshalling is positively associated with the planning dimension of entrepreneurial behavioural activities.
Hypothesis 12a: The entrepreneurial self-efficacy dimension of implementing people-related capability is positively associated with the planning dimension of entrepreneurial behavioural activities.
Hypothesis 13a: The entrepreneurial self-efficacy dimension of implementing finance-related is positively associated with the planning dimension of entrepreneurial behavioural activities.
Hypothesis 14a: The entrepreneurial self-efficacy dimension of coping with unexpected challenges is positively associated with the planning dimension of entrepreneurial behavioural activities.
4.6.2 Dimensions of entrepreneurial self-efficacy and the controlling dimension of entrepreneurial behavioural activities
The entrepreneurial self-efficacy dimension used in my study consists of six
dimensions: searching, planning, marshalling, implementing people-related tasks,
implementing finance-related tasks, and coping with challenges. Though these
dimensions were drawn from the studies of McGee et al. (2009) and DeNoble, Jung and
Ehrlich (1999), they were not empirically tested against the actual behavioural activities
undertaken by entrepreneurs. In particular, we know that entrepreneurial self-efficacy
helps a person’s belief in their ability to successfully launch a venture. But such
activities need proper control of venture establishment and growth. These include
activities such as ensuring that work is done as per the plan, monitoring financial
performance, and inspecting equipment (Luthans & Ibrayeva 2006). Hence, I propose
the following set of hypotheses that shows a positive relationship between different
dimensions of entrepreneurial self-efficacy and the controlling dimension of
entrepreneurial behavioural activities:
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Hypothesis 9b: The entrepreneurial self-efficacy dimension of searching is positively associated with the controlling dimension of entrepreneurial behavioural activities.
Hypothesis 10b: The entrepreneurial self-efficacy dimension of planning is positively associated with the controlling dimension of entrepreneurial behavioural activities.
Hypothesis 11b: The entrepreneurial self-efficacy dimension of marshalling is positively associated with the controlling dimension of entrepreneurial behavioural activities.
Hypothesis 12b: The entrepreneurial self-efficacy dimension of implementing people-related capability is positively associated with the controlling dimension of entrepreneurial behavioural activities.
Hypothesis 13b: The entrepreneurial self-efficacy dimension of implementing finance-related capability is positively associated with the controlling dimension of entrepreneurial behavioural activities.
Hypothesis 14b: The entrepreneurial self-efficacy dimension of coping with unexpected challenges is positively associated with the controlling dimension of entrepreneurial behavioural activities.
4.6.3 Dimensions of entrepreneurial self-efficacy and the internal communication dimension of entrepreneurial behavioural activities
Prior empirical studies involving the entrepreneurial self-efficacy construct had only a
single score as a measure of the construct. However, my study has six dimensions
within entrepreneurial self-efficacy; these are searching, planning, marshalling,
implementing people-related tasks, implementing finance-related tasks, and coping with
unexpected challenges, which were adapted from DeNoble, Jung and Ehrlich (1999)
and McGee et al. (2009). These dimensions of entrepreneurial self-efficacy show an
individual’s belief in their ability to perform six different roles. On the other hand, an
important responsibility of entrepreneurs is internal communication. Entrepreneurship
researchers (Bird 1989; Baum, Locke & Kirkpatrick 1998) have underscored the
importance of communicating the entrepreneur’s vision to the management team and as
regards the venture as a whole. Further, entrepreneurs are required to regularly
communicate with their teams, suppliers, customers, employees and so on, in order to
realise venture goals and objectives. Therefore, having confidence in their
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entrepreneurial ability is expected to have a positive impact on the entrepreneurs’
communication responsibility towards the venture. Accordingly, I propose the following
set of hypotheses showing a positive link between all the six dimensions of
entrepreneurial self-efficacy and the internal communication dimension of
entrepreneurial behavioural activities:
Hypothesis 9c: The entrepreneurial self-efficacy dimension of searching is positively associated with the internal communication dimension of entrepreneurial behavioural activities.
Hypothesis 10c: The entrepreneurial self-efficacy dimension of planning is positively associated with the internal communication dimension of entrepreneurial behavioural activities.
Hypothesis 11c: The entrepreneurial self-efficacy dimension of marshalling is positively associated with the internal communication dimension of entrepreneurial behavioural activities.
Hypothesis 12c: The entrepreneurial self-efficacy dimension of implementing people-related capability is positively associated with the internal communication dimension of entrepreneurial behavioural activities.
Hypothesis 13c: The entrepreneurial self-efficacy dimension of implementing finance-related capability is positively associated with the internal communication dimension of entrepreneurial behavioural activities.
Hypothesis 14c: The entrepreneurial self-efficacy dimension of coping with unexpected challenges is positively associated with the internal communication dimension of entrepreneurial behavioural activities.
4.6.4 Dimensions of entrepreneurial self-efficacy and the human resources dimension of entrepreneurial behavioural activities
According to Chen, Greene and Crick (1998), entrepreneurial self-efficacy refers to an
individual’s confidence in his/her ability to successfully perform entrepreneurial roles
and tasks. They provide empirical evidence as to its positive relationship with
entrepreneurial intentions. Likewise, DeNoble, Jung and Ehrlich (1999) also found
similar evidence. Compared to the studies that took a unitary view of self-efficacy
(Sherer et al. 1982; Markman, Baron & Balkin 2005), others recognized entrepreneurial
self-efficacy to be a multidimentional construct (DeNoble, Jung & Ehrlich 1999;
McGee et al. 2009). In my study, I use six dimensions, namely searching, planning,
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marshalling, implementing people-related tasks, implementing finance-related tasks,
and coping with unexpected challenges. In this context, Sirmon and Hitt (2003) strongly
believe that human capital is a very important resource for a business venture, and
suggest that this resource be managed well to create value for the venture. Luthans and
Ibrayeva (2006) observe that practicing entrepreneurs undertake various human
resource activities like staffing, training and motivating their employees. It is expected
that confidence exhibited by individual entrepreneurs, as expressed by their level of
entrepreneurial self-efficacy, will have a positive impact on how they use human
resources. However, we do not know if the level of impact by these different
dimensions of entrepreneurial self-efficacy on the human resources dimension of
entrepreneurs’ behaviour is uniform or varies. To examine these relations further, I
propose the following set of hypotheses:
Hypothesis 9d: The entrepreneurial self-efficacy dimension of searching is positively associated with the human resources management dimension of entrepreneurial behavioural activities.
Hypothesis 10d: The entrepreneurial self-efficacy dimension of planning is positively associated with the human resources management dimension of entrepreneurial behavioural activities.
Hypothesis 11d: The entrepreneurial self-efficacy dimension of marshalling is positively associated with the human resources management dimension of entrepreneurial behavioural activities.
Hypothesis 12d: The entrepreneurial self-efficacy dimension of implementing people-related capability is positively associated with the human resources management dimension of entrepreneurial behavioural activities.
Hypothesis 13d: The entrepreneurial self-efficacy dimension of implementing finance-related capability is positively associated with the human resources management dimension of entrepreneurial behavioural activities.
Hypothesis 14d: The entrepreneurial self-efficacy dimension of coping with unexpected challenges is positively associated with the human resources management dimension of entrepreneurial behavioural activities.
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4.6.5 Dimensions of entrepreneurial self-efficacy and the work-related task dimension of entrepreneurial behavioural activities
As seen earlier, the dimensions of entrepreneurial self-efficacy indicate the level of
confidence by entrepreneurs in their ability to undertake specific tasks and roles related
to entrepreneurship. In fact, entrepreneurial self-efficacy scales used by Chen, Greene
and Crick (1998) identify 22 specific tasks and roles. Further, the confidence in
performing these tasks was used to differentiate between entrepreneurs and non-
entrepreneurs. Therefore, entrepreneurial self-efficacy was used as an important
antecedent to behaviour or actions that an entrepreneur will undertake (Ajzen 2002). At
the same time, studies have identified underlying multiple dimensions within the
construct of entrepreneurial self-efficacy (eg. DeNoble, Jung & Ehrlich 1999; McGee et
al. 2009). But Luthans and Ibrayeva (2006) have identified that entrepreneurs undertake
work-related operational activities such as filing invoices, organising the work area and
pricing the products. These activities are also very important for the business. In my
study, I have used six different dimensions of entrepreneurial self-efficacy and expect
them to have a positive impact on work-related dimensions of entrepreneurial
behavioural activities. Therefore, to examine these relationships empirically, I propose
the following set of hypotheses:
Hypothesis 9e: The entrepreneurial self-efficacy dimension of searching is positively associated with the work-related task dimension of entrepreneurial behavioural activities.
Hypothesis 10e: The entrepreneurial self-efficacy dimension of planning is positively associated with the work-related task dimension of entrepreneurial behavioural activities.
Hypothesis 11e: The entrepreneurial self-efficacy dimension of marshalling is positively associated with the work-related task dimension of entrepreneurial behavioural activities.
Hypothesis 12e: The entrepreneurial self-efficacy dimension of implementing people-related capability is positively associated with the work-related task dimension of entrepreneurial behavioural activities.
Hypothesis 13e: The entrepreneurial self-efficacy dimension of implementing finance-related capability is positively associated with the work-related task dimension of entrepreneurial behavioural activities.
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Hypothesis 14e: The entrepreneurial self-efficacy dimension of coping with unexpected challenges is positively associated with the work-related task dimension of entrepreneurial behavioural activities.
4.6.6 Dimensions of entrepreneurial self-efficacy and the customer service dimension of entrepreneurial behavioural activities
Boyd and Vozikis (1994) proposed that self-efficacy was a critical antecedent of
entrepreneurial intentions and actions. Chen, Greene and Crick (1998) provided
empirical evidence to support the assertion that entrepreneurial self-efficacy is
positively related to entrepreneurs’ intentions. As mentioned earlier, scholars such as
DeNoble, Jung and Ehrlich (1999) and McGee et al. (2009) have identified different
dimensions within the construct of entrepreneurial self-efficacy. In my study, the
construct of entrepreneurial self-efficacy has six dimensions, and I expect them to have
a positive impact on the customer service dimension of entrepreneurial behavioural
activities that was identified by Luthans and Ibrayeva (2006). In an earlier study,
Thompson (1999) argued that the success of any business is dependent on the ability of
the entrepreneur or entrepreneurial manager to find a valuable strategic fit where the
organisation’s resources and capabilities are utilised well to satisfy the expectations of
key stakeholders, including customers. Accordingly, I propose the following set of
hypotheses:
Hypothesis 9f: The entrepreneurial self-efficacy dimension of searching is positively associated with the customer service dimension of entrepreneurial behavioural activities.
Hypothesis 10f: The entrepreneurial self-efficacy dimension of planning is positively associated with the customer service dimension of entrepreneurial behavioural activities.
Hypothesis 11f: The entrepreneurial self-efficacy dimension of marshalling is positively associated with the customer service dimension of entrepreneurial behavioural activities.
Hypothesis 12f: The entrepreneurial self-efficacy dimension of implementing people-related capability is positively associated with the customer service dimension of entrepreneurial behavioural activities.
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Hypothesis 13f: The entrepreneurial self-efficacy dimension of implementing finance-related capability is positively associated with the customer service dimension of entrepreneurial behavioural activities.
Hypothesis 14f: The entrepreneurial self-efficacy dimension of coping with unexpected challenges is positively associated with the customer service dimension of entrepreneurial behavioural activities.
4.6.7 Dimensions of entrepreneurial self-efficacy and the socialising dimension of entrepreneurial behavioural activities
The defining feature of self-efficacy is an individual’s belief in his/her ability to
perform. In the context of entrepreneurial self-efficacy, this belief translates into
confidence to perform tasks relevant to entrepreneurship. A critical component for
entrepreneurship has been identified as networking and socialising (Manolova et al.
2007; Watson 2007). By networking and socialising, entrepreneurs gain access to
information, new contacts for business, and emotional support, all of which support
their entrepreneurial efforts. These socialising behaviours, in turn, add to the
entrepreneur’s self-efficacy. Therefore, it is reasonable to expect a positive relationship
between entrepreneurial self-efficacy and the socialising dimension of an entrepreneur’s
behaviour identified by Luthans and Ibrayeva (2006). However, such relationships were
not empirically tested in a situation where the entrepreneurial self-efficacy construct
consisted of multiple dimensions. Hence the following set of hypotheses is proposed:
Hypothesis 9g: The entrepreneurial self-efficacy dimension of searching is positively associated with the socialising dimension of entrepreneurial behavioural activities.
Hypothesis 10g: The entrepreneurial self-efficacy dimension of planning is positively associated with the socialising dimension of entrepreneurial behavioural activities.
Hypothesis 11g: The entrepreneurial self-efficacy dimension of marshalling is positively associated with the socialising dimension of entrepreneurial behavioural activities.
Hypothesis 12g: The entrepreneurial self-efficacy dimension of implementing people-related capability is positively associated with the socialising dimension of entrepreneurial behavioural activities.
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Hypothesis 13g: The entrepreneurial self-efficacy dimension of implementing finance-related capability is positively associated with the socialising dimension of entrepreneurial behavioural activities.
Hypothesis 14g: The entrepreneurial self-efficacy dimension of coping with unexpected challenges is positively associated with the socialising dimension of entrepreneurial behavioural activities.
4.6.8 Dimensions of entrepreneurial self-efficacy and the politicking dimension of entrepreneurial behavioural activities
Several studies have indicated the importance of politicking and lobbying for business
purposes (Elg, Schaumann & Ghauri 2012; Barron 2010; Lawton & Rajwani 2011;
Paris 2000). In developing economies, where institutions are weak, it is powerful
individuals that influence decision making in all areas of the society (see Kuncoro
2006). Therefore, entrepreneurs are expected to lobby politicians and other individuals
of influence to gain support for their entrepreneurial ventures and activities. In order to
undertake the activity of politicking, entrepreneurs need self-efficacy, a belief that they
can undertake this activity of politicking with confidence. Therefore, entrepreneurial
self-efficacy is important for entrepreneurs as they interact with politicians and other
influential people who wield enormous social and political power. Accordingly, I
propose the following set of hypotheses:
Hypothesis 9h: The entrepreneurial self-efficacy dimension of searching is positively associated with the politicking dimension of entrepreneurial behavioural activities.
Hypothesis 10h: The entrepreneurial self-efficacy dimension of planning is positively associated with the politicking dimension of entrepreneurial behavioural activities.
Hypothesis 11h: The entrepreneurial self-efficacy dimension of marshalling is positively associated with the politicking dimension of entrepreneurial behavioural activities.
Hypothesis 12h: The entrepreneurial self-efficacy dimension of implementing people-related capability is positively associated with the politicking dimension of entrepreneurial behavioural activities.
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Hypothesis 13h: The entrepreneurial self-efficacy dimension of implementing finance-related capability is positively associated with the politicking dimension of entrepreneurial behavioural activities.
Hypothesis 14h: The entrepreneurial self-efficacy dimension of coping with unexpected challenges is positively associated with the politicking dimension of entrepreneurial behavioural activities.
4.7 Chapter summary
The chapter puts forward a conceptual framework based on the variables identified in
the literature review. My conceptual framework proposes several associations: between
personality characteristics and various dimensions of entrepreneurial self-efficacy;
between personality characteristics and entrepreneurial behavioural activities; and
between entrepreneurial self-efficacy and entrepreneurial behavioural activities. It also
proposes that information overload will have an adverse impact on both entrepreneurial
self-efficacy and entrepreneurial behavioural activities. Based on the theory underlying
these relations, a number of hypotheses have been developed for empirical testing. The
methodology used to test these hypotheses is discussed in Chapter 5.
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CHAPTER 5
RESEARCH METHODOLOGY
In this chapter, the methodology used to test the proposed model and hypothesis
presented in Chapter Four is discussed. Specifically, this chapter covers the research
strategy and the methodology used in addressing the research problem. Further, this
chapter includes various aspects such as the operationalisation of each variable of the
proposed model, the rationale behind this, the development of the survey instrument,
validity and reliability analysis, sample selection, the data collection method, and a
description of the statistical analysis employed in this study.
5.1 Research approach and strategy
The research approach used will influence the nature and conduct of any research
undertaken as well as the interpretation of existing knowledge in the literature (Baker &
Foy 2008). This study employs a positivist approach using the deductive process of
theory testing. The decision to use this approach is because this research begins with a
theoretical perspective that has been drawn together from the review of extensive extant
literature. The concepts of this theoretical model have been operationalised to gain an
understanding of the relationships existing between the variables. The data that help us
to observe these concepts in the empirical world are sought using surveys from the field.
5.2 Measurement / operationalisation of variables
Gill, Johnson and Clark (2010, p. 50) define operationalisation “as the creation of rules
for using indicators of abstract concepts which tell us when instances of the concept
have empirically occurred”. The variables used in the study are abstract concepts
gathered from reviewing the literature. Gill, Johnson and Clark (2010) state that to
examine these variables, they have to be overtly linked to something that is observable
in such a way that the variation can be measured. In other words, the variables have to
be operationalised. Accordingly, the variables used in the study have been
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operationalised using observable indicators drawn from past studies. The variables
have been operationalised and tested for reliability and validity by various researchers in
earlier empirical studies. The development of each of the variables used in the study is
detailed below.
5.2.1 Personality characteristics
While many personality characteristics were examined in studies on entrepreneurship,
three personality traits have been widely discussed in the literature and have shown a
high level of validity. They are: (i) need for achievement, (ii) internal locus of control
and (iii) risk-taking propensity (Schaper, Volery, Weber & Lewis 2011, Gartner 1985,
Brockhaus 1982). In fact, they are termed ‘the big three’ (Chell 2008). This study, too,
examines these three personality traits as they have not been tested much in the context
of emerging economies.
5.2.1.1 Need for achievement
A popularly used scale was developed by Cassidy and Lynn (1989); it measures
achievement motivation using seven dimensions: the work ethic, the pursuit of
excellence, status aspiration, competitiveness, acquisitiveness for money and material
wealth, mastery, and dominance. Some scholars (Ward 1997; Hart, Stasson, Fulcher &
Mahoney 2008) have questioned the validity of this seven-factor scale on the grounds
that their corresponding factors explain less than half of their variance. Using the
approach taken by Cassidy and Lynn (1989), Littunen (2000) choose four-dimension
scales to test achievement motivation; these dimensions are: work ethic, pursuit of
excellence, mastery and dominance. Another study by Lee and Tsang (2001) used
measures prescribed by the Edwards (1959) EPPS manual. For my study, questions
were chosen from the Lee and Tsang (2001) study. The Alpha value is 0.81, and the
factor loadings range from 0.76-0.86 for the questions. The three questions chosen from
Lee and Tsang’s study were considered to be representative to test the need for
achievement.
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5.2.1.2 Internal locus of control
The construct of internal locus of control contributed by Rotter’s social learning theory
has been frequently used in entrepreneurship studies. It measures an individual’s belief
in his/her ability to control his/her life. Most studies using this construct use the Rotter’s
Internal–External scale (I-E scale). The I-E scale consists of internal and external loci
of control. The I-E scale has been proposed as a uni-dimensional scale, and this has
been mentioned as a fundamental weakness, since the construct of locus of control is
multi-dimensional (Furnham 1986). Therefore, some entrepreneurship scholars have
objected to this scale on the ground that not all the dimensions assessed by Rotter’s I-E
scale are equally plausible predictors of a specific setting of a new venture creation
and/or entrepreneurial behaviour (Gatewood, Shaver & Gartner 1995; Shaver & Scott
1991). Later on, other authors (e.g., Levenson 1981) used constructs with three
dimensions, one being internal attributing and the second, external locus of control, was
further divided into chance attributing, and powerful others. Littunen (2000) further
adopted these dimensions to capture an entrepreneur’s locus of control.
The current study focuses on ‘internal locus of control’ only. This is because of two
reasons: i) a majority of the entrepreneurship studies have found internal locus of
control to be a more valid predictor than external control for entrepreneurial behaviour
(Littunen 2000), and ii) in the Indian context of a caste-dominated social structure (see
Misra 2000), internal locus of control is expected to help overcome the mitigating
factors of a caste-based social system. To operationalise this variable, I have adapted
measures of internal locus of control from the study conducted by Littunen (2000).
5.2.1.3 Risk-taking propensity
The risk-taking propensity construct measures the entrepreneur’s risk perception and
risk propensity. In a significant study, Covin and Slevin (1989, p. 86; 1998, p.234)
measured top management’s risk-taking propensity, using three questions examining:
“i) proclivity for high risk projects with chances of very high returns or low risk projects with normal and certain rates of returns, ii) whether the top managers find it is best to explore the environment via cautious, incremental behaviour or
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by bold, wide-ranging acts which they believe are necessary to achieve the firm’s objectives, and iii) whether the manager adopts a cautious posture to minimise the probability of making costly decisions or a bold, aggressive posture in order to maximise the probability of exploiting potential opportunities”.
Building on Covin and Slevin’s measures, Naldi et al. (2007) framed three questions
covering three other items: (i) high risk projects, (ii) fearless and powerful measures and
(iii) fearless and aggressive position. Risk taking was examined in the context of family
firms and non-family firms. The alpha value for risk taking in family firms was 0.83 and
in non-family firms it was 0.76. Covin and Slevin’s (1989) study focuses more on a
respondent’s rating of the risk-taking propensity of his or her top managers, rather than
rating their proclivity to take or avoid personal risks. This study focuses on the
entrepreneur’s risk-taking propensity and its impact on the entrepreneur’s behaviour.
Therefore, only two questions from Naldi et al.’s (2007) study were taken. These
questions were further reworded to suit the current study.
Wagener, Gorgievski and Rijsdijk (2010) adopted three questions from Van den Brink,
et al. (2004). The questions have an alpha value of 0.80. For this study, only two
questions were used in the study. The third question (‘I am prepared to invest much of
my own capital to take a chance’) was not used because this study focuses on practising
entrepreneurs who are also owner-managers, rather than on those who intend to be
entrepreneurs (or potential entrepreneurs). This item was not relevant to our sample
respondents as they have already invested and are practicing entrepreneurs.
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Table 5.1 Operationalisation of entrepreneur’s personality characteristics Construct (Source)
Items
Need for achievement (Lee & Tsang 2001)
1. I will not be satisfied unless I have achieved the desired level of results.
2. Even though people tell me ‘that it cannot be done’, I will persist.
3. I look upon my work as simply a way to chieve my goals.
Internal locus of control
(Littunen 2000)
4. I am usually able to protect my personal interest. 5. My life is determined by my own actions. 6. I can pretty much determine what will happen in my life. 7. When I make plans, I am almost certain to make them
work.
Risk-taking propensity
(Naldi et al. 2007): Items 8-9.
(Wagener, Gorgievski
& Rijsdijk 2010): Items 10-11.
8. I can take fearless decisions to maximise the chance of exploiting all opportunities.
9. I regularly take calculated risks in order to obtain a potential advantage
10. If I get a chance, I take risks, even if the consequences
may be potentially unfavourable. 11. I take fearless decisions to achieve my venture
objectives, even in a turbulent business environment
Table 5.1 shows the dimensions used to measure personality characteristics of
entrepreneurs. Based on the requirements of this study, the personality scale created
consists of 11-items to measure the three important personality dimensions of
entrepreneurs: 1) need for achievement, 2) internal locus of control, and 3) risk-taking
propensity. A 7-point Likert scale ranging from 1= “Not at all” to 7 = “extremely well”
is used to examine the extent to which the statements best described the entrepreneur.
5.2.2 Entrepreneurial self-efficacy (ESE)
The concept of self-efficacy, which has its roots in social cognitive theory as postulated
by Bandura (1977), has been applied to entrepreneurship by various researchers (e.g.,
Chen, Greene & Crick 1998). The construct of ESE should capture “the degree to
which individuals believe that they are capable of performing the tasks associated with
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new-venture management” (Forbes 2005). To operationalise entrepreneurial self-
efficacy, a careful examination of existing literature and scales was undertaken.
While self-efficacy has been applied broadly across various research domains, Bandura
(1997, p.6) cautions researchers that “self-efficacy beliefs should be measured in terms
of particularised judgments of capability that may vary across realms of activity,
different levels of task demands within a given activity domain, and under different
situational circumstances”. He advises researchers to examine self-efficacy in specific
contexts and research domains. This caution has gone unheeded in different studies
where self-efficacy assessments have examined general attitudes about capabilities
rather than being tailored to specific activity domains as suggested by Bandura (Pajares
1997).
Unfortunately, some studies in entrepreneurship apply and measure general self-efficacy
in the area of entrepreneurship (e.g. see Baum and Locke 2004; Markman Baron &
Balkin 2005), although the concept of entrepreneurship has been recognised as a multi-
dimensional construct (e.g., Chen, Greene & Crick 1998; DeNoble, Jung & Ehrlich
1999). Due to a general application of the concept of self-efficacy to entrepreneurship,
such studies do not capture the level of self-efficacy in specific activities of the
entrepreneurship domain. McGee et al. (2009) note that those studies that use multi-
dimensional entrepreneurial self-efficacy measures dilute their construct by grouping
the scores of the multi-dimensional scale into one composite score (e.g., see Chen,
Greene & Crick 1998; DeNoble, Jung & Ehrlich 1999; Zhao, Seibert & Hills 2005).
Doing so does not allow for higher predictive power. In other words, it was difficult to
identify the specific areas, within the construct of self-efficacy, which were influenced
or which impacted on entrepreneurship as the case may be. To remedy this issue, the
scale developed for my study took into account suggestions made by researchers in
three ways: a) to use ESE scales that measured specific areas of the activity domain; b)
to use a multi-dimensional scale; and c) not to create one composite score for the whole
ESE construct.
To operationalise the entrepreneurial self-efficacy construct, it was first important to
identify the tasks that are associated with entrepreneurship. My study follows McGee et
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al.’s (2009) framework. Responding to the call of Forbes (2005) and Kolvereid and
Isaksen (2006) for refining the ESE construct, McGee and his associates (2009)
examined the then existing scales and took the shortcomings and suggestions into
consideration to develop their own five-factor scale that included dimensions of: (i)
searching, (ii) planning, (iii) marshalling, (iv) implementing-people, and (v)
implementing-finance. McGee et al.’s (2009) study focused mainly on nascent
entrepreneurs, that is, those who have never owned a business and who did not currently
own a business, but who, however, were actively involved in attempting to start a new
business (Reynolds, 1999). The Alpha values for each of the constructs were: searching
(0.84); planning (0.84); marshalling (0.80); implementing people (0.91); and
implementing-finance (0.84). Since the focus of this study is to examine practicing
owner-managers, another factor was added – i.e., coping with unexpected challenges, as
this was seen as being important in predicting entrepreneurial behaviour (see DeNoble,
Jung & Ehrlich 1999). The factor loading for the three questions adopted from DeNoble
et al. 1999) were 0.67, 0.79 and 0.78.
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Table: 5.2 Operationalisation of entrepreneurial self-efficacy
Construct (Source)
Item Measures
Searching (McGee et al. 2009)
1. Brainstroming a new idea for a product or service 2. Identifying the need for a new product or service 3. Designing a product or service that will satisfy customers
needs and wants Planning (McGee et al. 2009)
4. Estimating customer demand for a new product or service 5. Determining a competitive price for a new product or
service 6. Designing an effective marketing/advertising campaign for
a new product or service Marshalling (McGee et al. 2009)
7. Getting others to support your vision and plan for the new business
8. Networking with others-i.e., making contact with and exchanging information
9. Clearly and concisely explaining your business idea in everyday terms to relevant stakeholders/parties
Implementing people (McGee et al. 2009)
10. Supervising your subordinates 11. Recruiting suitable employees 12. Delegating tasks and responsibilities to your employees 13. Dealing effectively with day-to-day problems/crises
faced by your employees 14. Inspiring, encouraging, and motivating your employees 15. Training employees
Implementing finance (McGee et al. 2009)
16. Estimating the amount of start-up funds and working capital requirement for your business
17. Organising and maintaining the financial rewards of your business
18. Managing the financial assets of your business 19. Reading and interpreting financial statements
Coping with unexpected challenges (DeNoble, Jung & Ehrlich 1999)
20. Working productively under continuous stress, pressure and conflict
21. Tolerating unexpected changes in business conditions 22. Persisting in the face of adversity
On the whole, the scale measures the level of confidence the entrepreneurs have in their
ability to undertake entrepreneurial activities (see Table 5.3). This 22-item scale
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measures the entrepreneurial self-efficacy construct that incorporates the following
entrepreneurship dimensions: searching, planning, marshalling, implementing people,
implementing finance, and coping with unexpected challenges. Participants were asked
to rate themselves on a 7-point Likert scale (1= “not at all confident”, 7 = “highly
confident”).
5.2.3 Entrepreneurial behavioural activities
Unlike entrepreneurial intention or orientation, an entrepreneur’s behaviour is action-
based (Moruku 2013). According to Bird and Schjoedt (2009), behaviour includes
entrepreneurs’ activities and their responses. It is important to understand the
entrepreneurship process in order to appreciate the role played by an entrepreneur. This role can
be better understood if the entrepreneur’s activities can be investigated objectively. Baron
(2002) notes that there are three distinct phases involved in the creation of a new
venture, namely pre-launch, launch and post-launch. For each stage, Baron highlights
some of the activities to be undertaken. Since this study focuses on entrepreneurs who
have already launched their business, the activities engaged in by the entrepreneurs in
the post-launch stage are taken into consideration in the development of the construct.
They include activities in the areas of staffing, marketing, sales strategies,
communication with staff and stakeholders, and leadership (Baron & Markman 2000;
Baron 2002; Vecchio 2003).
In an attempt to define entrepreneurs’ behaviour, Bird, Schjoedt and Baum (2012)
examine the taxonomy (types of behaviour) and partonomy (parts of behaviour) of the
behavioural construct. Bird, Schjoedt and Baum (2012) find that most studies have
measured the construct by the use of single-item and summed binary measures, and in
some cases, only limited studies have used a multi-item interval scale. They also find
that most of these behaviours measured are self-reported, and with the exception of a
few studies, they find that the construct validity has not been comprehensively assessed.
Due to these limitations, it was difficult to operationalise the construct using previous
studies.
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However, a very exciting proposition was made by Luthans, Envick and Anderson
(1995), where the authors take an idiographic approach to researching behaviour due to
the limitations of the nomothetic approach that was commonly used in organisational
behaviour, management and entrepreneurship disciplines. The authors suggested a four-
step process to identify and measure entrepreneurs’ behaviour. First, they recommend
conducting an unstructured direct observation of entrepreneurs’ behaviour. Second,
they recommend following up the observations by post-log interviews to make sure that
the behaviours were accurately observed and represented the entrepreneurs’ activities.
Having made a list of behaviour activities, the authors suggest that the third step would
be to use the Delphi technique to categorise the behaviour, and fourth would be to use
structured observation to measure the frequency of the identified behaviour.
The behavioural activities chosen for the current study are mainly from Luthans and
Ibrayeva (2006). They used the four-step process suggested by Luthans, Envick and
Anderson (1995) and developed a list of observed behaviours. They employed
unstructured and structured observations of the entrepreneurs and identified
entrepreneurs’ behaviour by noting down the activities the successful entrepreneurs
engaged in. They also checked the relative frequency of these behaviours. By noting
down observed behaviours and their frequencies, Luthans and Ibrayeva (2006) did what
Bird and Schjoedt (2009) suggested later on in a different context when they observed,
“behaviours are best understood as discrete units of action that can be observed by
others, and which are “sized” to be meaningful.” Further, the observations by Luthans
and Ibrayeva (2006) were undertaken in a transition economy, and therefore were closer
to the context of my study, i.e., an emerging economy.
The dimensions identified in the Luthans and Ibrayeva (2006) study were used to create
the behavioural scale for the current study. These were 1) planning, 2) controlling, 3)
internal communication, 4) human resource management 5) work-related tasks, 6)
customer service, 7) socialising and 8) politicking. The behavioural activities that the
entrepreneur engaged in during working hours that were not central to the business
operations were not included in this study, activities such as talking with family and
friends, reading the newspaper and watching TV for pleasure. Luthans and Ibrayeva
(2006) had identified these as ‘on-job personal time’.
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The scale developed for my study took into account suggestions made by researchers
(Bird, Schjoedt & Baum 2012; Luthans, Envick & Anderson 1995; Bird & Schjoedt
2009) in three ways: a) to use behaviour activities that were observed and not just self-
reported, b) to use a multi-dimensional scale, and c) not to create one composite score
for the whole entrepreneurial behavioural activities construct.
Table 5.4 below shows the dimensions used to operationalise entrepreneurial
behavioural activities. A 7-point Likert scale is attached to these behavioural items to
test how effectively the respondent can carry out an activity. The exemplars of the
observed behaviours were converted into questions. For example, under the dimension
controlling, Luthans and Ibrayeva (2006) observed the activity “checking the work
done”. In my study, this activity was framed into “making sure the work is done as per
the plan”. Similarly, each item identified under the dimensions of planning, controlling,
and work-related tasks, was converted into activities. For internal communication, the
exemplar given was “talking with employees or a business partner”. This was divided
into two separate activities and given as “interaction with business partner/s” and
“interaction with key employees”. In human resource management, there were only
four activities mentioned in Luthans and Ibrayeva (2006). A fifth one was related to
“involvement in the selection of your employees”, and was added to the questionnaire
for this study.
For the dimension customer service, the items “explaining the product or service to
customers”, and “quoting prices to customers” were covered together under the item
“involvement in sales presentations”. For the dimension socialising, the activity “chit-
chatting about relevant social events” was not written separately since this activity is
inherent in the chosen four activities, namely “socialising with suppliers”, “socialising
with bankers”, “socialising with customers” and “socialising with other partners”.
These items do include all types of socialisation – it could include the sending or
receiving of information between the entrepreneur and the outside party with the aim of
getting to know each other and in this process their discussions could be business or
non-business related, so a separate item on chit-chatting about relevant social events
was not included.
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Table 5.3 Operationalisation of entrepreneurial behavioural activities
Construct (Source) Items
Planning (Luthans & Ibrayeva 2006)
1. Scheduling of appointments with prospective clients 2. Prioritisation of projects/activities 3. Involvement in strategy formalisation
Controlling (Luthans & Ibrayeva 2006)
4. Making sure that the work is done as per the plan 5. Monitoring of financial performance of the venture 6. Inspection of the state of the physical assets/equipment
Internal communication (Luthans & Ibrayeva 2006)
7. Interaction with your business partner/s (e.g. suppliers, distributors etc.)
8. Interaction with key employees 9. Interaction with key customers 10. Participation in venture-related meetings
HR management (Luthans & Ibrayeva 2006)
11. Involvement in the selection of your employees 12. Involvement in the training of your employees 13. Involvement in socialisation with your employees 14. Providing guidance to your employees 15. Inspiring employees to achieve higher goals
Work-related tasks (Luthans & Ibrayeva 2006)
16. Involvement in dealing with invoices 17. Involvement in pricing decisions for the key customers 18. Involvement in negotiations with your suppliers
Customer service (Luthans & Ibrayeva 2006)
19. Involvement in sales presentations (e.g. explaining the product or service to customers)
20. Involvement in the selling of your products/services 21. Handling customer complaints
Socialising (Luthans & Ibrayeva 2006)
22. Socialisation with suppliers 23. Socialisation with bankers 24. Socialisation with customers 25. Socialisation with other business partner/s
Politicking (Luthans & Ibrayeva 2006): Items 26, 28, 29. (Elg, Schaumann & Ghauri 2012): Item 27
26. Calling on government officials 27. Lobbying government officials 28. Lobbying elected officials 29. Discussing political issues related to business with
business associations/professional bodies
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For the final dimension politicking, another item was included which was not in the
Luthans and Ibrayeva study (2006). This item was “lobbying with government
officials”. In India, government departments are complex, and therefore liaising with
relevant government officials becomes necessary (Elg, Schaumann & Ghauri 2012).
Therefore, my study has also included the item “lobbying with government officials”
which is different from “lobbying with elected officials”.
The scale is made up of 29 items, and is used to examine the effectiveness of the
entrepreneur in engaging in each of the activity ranges from “not well at all = 1”, to
“extremely well = 10”, where the mid-point 4 = moderately well. The response scale
also includes “NA”, which the respondent can circle if any of the behaviours is not
applicable to them.
5.2.4 Entrepreneurial information overload (EIO)
To the best of the researcher’s knowledge, information overload (IO) has not been
examined in the entrepreneurship domain. Information overload implies that the
information processing demands more of the entrepreneur’s time and capacity than is
available for the entrepreneur to process the information. This construct has been
examined and applied in disciplines such as psychology (Miller 1956), organisation
science (see Galbraith 1974; Wetherbe 1991), marketing (Keller & Staelin 1987; Hunter
2004; Klausegger, Sinkovics & Zou 2007), accounting (Swain & Haka 2000) and
management information systems (Schultze & Vandenbosch 1998). To capture a clear
and comprehensive view of this issue and its effect on the entrepreneur, the construct
for this study was adapted from Hunter and Goebel (2008), who examined the impact of
information overload on sales performance. Their construct of information overload
consisted of questions relating to sales presentation, product information, sales
techniques and how the volume of this information overwhelmed or frustrated a
salesperson. Since Hunter and Goebel’s (2008) measures focus on the impact of IO for
salespeople, the items were reworded and made relevant for the context of the
entrepreneurship study in the form of EIO, which was operationalised in terms of 7
items. These items are shown below in table 5.4.
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Table 5.4 Operationalisation of entrepreneurial information overload
1. I feel overwhelmed due to the amount of information to be considered for making business decisions.
2. I am unable to handle the amount of information that I receive in a typical work week for making the best possible work-related decisions.
3. The amount of information that I process makes me feel stressed. 4. I feel stressed that I am losing control of the business operations because of the
volume of information that I have gathered. 5. The amount of information that I have to deal with in order to make decisions
for business growth is overwhelming. 6. The amount of available information delays my response to competitors’
actions in the market. 7. I often miss important deadlines due to the availability of an overwhelming
amount of information.
The construct of EIO measures the effects of information overload on the entrepreneur
and the activities he/she has to undertake. A sample item is “I feel overwhelmed due to
the amount of information to be considered for making business decisions”. The
response format used is a 7-point Likert scale where 1= “strongly agree” and 7=
“strongly disagree”. The EIO scale consists of 7 items designed to measure the effects
of information on the entrepreneur and the activities he/she undertakes.
5.2.5 Firm and entrepreneur related questions
There were three questions in this section. The first two questions were related to the
demographics of the firm. The third question was related to the profile of the
entrepreneur.
5.2.5.1 Firm demographics
In addition to the key variables under study, participants were asked to indicate the
number of employees in the firm at the time of filling out this survey and the industry.
The number of employees is considered a proxy for the size of the firm. The industry
categories were taken from the New Zealand Statistics website. Respondents had to
tick the appropriate box. To accommodate any business that is not in the listed
category, a separate option labelled ‘others, please specify’ was made available.
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5.2.5.2 Firm details
This question was designed to capture more firm details such as when the company was
founded, the industry/ies the firm operates in, international presence, total sales, and
assets owned.
5.2.5.3 Demographics
The next sets of questions were designed to gather the entrepreneur’s demographic
characteristics. There were a total of eleven items in this section. This included details
about the entrepreneur’s ownership of the business, experience, age and level of
education.
5.3 Developing and validating the survey instrument
Before finalising the survey instrument, I consulted academics and
practicing entrepreneurs both in New Zealand and in India. Their feedback was
gathered to confirm appropriate measures used in the questionnaire. To enhance the
validity of the survey instrument, the preliminary questionnaire was sent to the senior
academics with expertise in the field of entrepreneurship in New Zealand and in India
for their feedback on the questionnaire phraseology. They were asked to comment on
whether the questions were easy to understand (i.e. free of jargon, inappropriate
assumptions), whether the instructions were clear, whether the questions were biased or
leading and so on.
The questionnaire was finalised following advice and feedback received from the
academics and practicing entrepreneurs. On receiving feedback, two main things were
done. First, the wording of a number of ambiguous questions was changed. Second, the
question on academic qualification was designed to suit the Indian education system.
Once the questionnaire was ready, it was submitted to the Swinburne University of
Technology ethics committee. After receiving the ethics approval, it was distributed.
The questionnaire consists of parts relating to the key constructs of entrepreneurial self-
efficacy, entrepreneurial behavioural activities, entrepreneur’s personality, information
overload, and sample characteristics. Items in each part will be measured using Likert
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scales or closed-ended questions. Apart from these, demographic data about the
respondents were also included.
5.3.1 Time allocated to answer for each question
Table 5.5 shows the approximate time allocated for respondents to answer the questions
in each section. While the table indicates that the approximate time allocated to filling
the survey is 35 minutes, it would take the respondents another 10 minutes to read the
cover letter attached to the survey.
Table 5.5 Time allocated to answer for each section
Section Administration time Entrepreneurial self-efficacy 8 minutes Effectiveness of entrepreneurial behavioural activities
10 minutes
Personality characteristics 4 minutes Entrepreneurial information overload 3 minutes Firm performance 5 minutes Demographics 5 minutes Approximate time to answer the survey 35 minutes
5.4 Sample selection
The aim of this study was to empirically test the relationships among the
entrepreneurship-related variables identified in the literature review with the focus being
to generalise the results. The theoretical basis for this study, developed in Chapter 4,
shows the hypothesis to be tested. Accordingly, I sought to examine the relationships
between the entrepreneur’s personality characteristics, entrepreneurial self-efficacy, and
entrepreneurial behavioural activities in the context of entrepreneurial information
overload faced by these entrepreneurs.
For the purpose of this study, I have used the definition of an entrepreneur as proposed
by Carland et al. (1984) to guide sample selection. They describe an entrepreneur as
“an individual who establishes and manages a business for the principal purpose of
profit and growth” (p.358). The focus is on India, a large emerging market. India is a
very big country with a culturally diverse population and is home to many millions of
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entrepreneurs (Government of India 2014b). Therefore, sample selection and size are
major concerns in this study.
The sample was drawn from among practicing entrepreneurs based in India. I used a
broad definition of entrepreneurs as those who owned and also actively managed their
business ventures (Stewart & Roth 2001; Rauch & Frese 2007). The sample comprised
of owner–managers of firms in India. For this purpose, potential respondents were
selected from the list of entrepreneurs, who are members of business and social
organisations like the Confederation of Indian Industry (CII) and Rotary Clubs. Since I
am originally from India, I have personal contacts, which I used for this purpose. From
these sources, an initial sample of about 1100 owner-managers of businesses was
randomly selected.
I also had some preliminary discussions with academics of a few universities,
entrepreneurs and local business organisations in India during the months of December
2009 and January 2010 when I visited India to attend an international conference in
Delhi. In my discussions with the academics in the field of entrepreneurship, it also
became evident that my area of research had not been covered. They have a wide
network of entrepreneurs, small businesses and local business and trade organisations,
and have principally agreed to provide the necessary contacts and other support required
to facilitate the collection of data.
To get a good representation of this vast country, I ambitiously distributed the
questionnaires in all parts of India: West, East, South and North. The cities that were
included in the survey were New Delhi, Calcutta, Ahmadabad, Bangalore, Chennai, and
Coimbatore.
For this study, I have used the methods suggested by scholars to increase response rates:
a covering letter or pre-notification letter, follow-ups, reminder mails, and return
envelope with stamps (Fox, Crask & Kim 1988; Kanuk & Conrad 1975). Another
method suggested was drop-and-collect surveys (Brown 1987). The drop and collect
survey technique is a cheap and fast way of collecting responses (Brown 1987). I have
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used this approach in some cases where the entrepreneurs were busy and wanted some
time to complete their questionnaires.
A covering letter with the questionnaire was to introduce the purpose of the research
and request participation. The questionnaires were hand-delivered through friends,
business people, and academics. In some cases, hard copies were mailed to
academics/business friends in a particular city, who then helped out distributing the
surveys. Where respondents were unable to fill in the responses immediately, they
were asked whether they were happy to keep it ready for collection, or if they wished,
they could send it back by surface mail. In such cases, they were handed a postage-paid
return envelope. For the respondents who were happy to keep it ready for collection, the
people who distributed them earlier personally picked them up. So we used different
methods such as hand delivery and personal pick-up, hand delivery and postal return,
postal delivery and postal return, as well as postal delivery and personal pickup.
For the surveys where the respondents had chosen to return them by mail, the initial
distribution was followed after one month by a reminder which mailed another copy of
the questionnaire along with a general follow-up letter and a phone call. Previous
studies that used mail questionnaires reported a response rate ranging from 20%-100%
(Kanuk & Conrad 1975), and by using the drop and collect survey method, the response
rate was up to 70% (Brown 1987). Since in many cases the questionnaire was given out
by both friends and academics, there was a higher response rate. I received over 650
responses. However, after the initial screening of the questionnaires, I had only 403
usable responses. The details of the final sample selection may be seen in Table 5.6.
Table 5.6 Final response number Total number of surveys given out 1100
Returned filled out responses 650
Response rate for all returned surveys 59%
Total responses usable for data entry 403
Response rate for usable surveys 37%
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While screening the data collected, care was taken to identify any outliers. Osborne and
Overbay (2004) remind researchers of the importance to check for outliers and exclude
these since they have the potential to cause extreme scores in a data set. However, not
all outliers may be illegitimate contaminants of the data set (Barnett & Lewis 1994);
therefore I inspected each filled-in survey and used only 403 out of the 650 returned
surveys. While each survey was inspected, some of the surveys were not used because
they were insufficiently completed, as the respondents had not filled in some key
sections or in some cases they had put in multiple responses. In some cases, the
respondents appeared to not be serious about filling the form in and felt they just had to
fill it in, perhaps, because the form had been passed on to them from their friends.
Although care was taken with the wording, readability and understandability of the
questions, it seemed that some respondents had not understood what was required of
them. The surveys received from the rural areas mainly had these problems, which
could be due to low levels of education and literacy. Most of these respondents were
either not educated or educated in their local languages, while the surveys handed out
were in English only.
Outliers can also be caused due to data recording errors (Osborne & Overbay 2004). So
once the data were entered into SPSS, the records were checked a second time to ensure
that the data entry was correctly done. Care was also taken not to misrepresent any
data. Since Hayes’ (2013) procedure for the regression-based path analysis involves
boot strapping, it takes care of the potential problems that may arise due to non-normal
sample. Therefore a normality test was not required.
Table 5.7 shows a breakup of the responses received from the various cities taken in this study.
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Table 5.7 Geographical distribution of responses of the sample
Region covered
State/ Union Territory
City Number of responses
North Union Territory New Delhi 10
Punjab Chandigarh 7
West Gujarat Ahmadabad 39
Maharashtra Mumbai 2
East West Bengal Kolkata 95
South Tamil Nadu Chennai 28
Coimbatore 59
Karnataka Hosur 12
Bengaluru 127
Andhra Pradesh Hyderabad 24
Total 403
Baruch (1999) mentions the importance of reporting the response rate, since this
information helps clarify the validity of a study, and this includes taking into account
the difference between returned and usable questionnaires. He finds that in most cases,
the unusable questionnaires are due to missing data and usually the percentage of such
unusable questionnaires is negligible. However, he also acknowledges that the
difference can be significant in some cases, as seen in my current study. However, our
final sample of 403 meets the requirements of being just over 3 times the number of
items (128 items x 3 = 384 respondents) as mentioned by Cattell (1978) and Gorsuch
(1983). This sample of 403 is also above the range of 100 to 400 recommended by Hair
et al. (1995) for factor analytic studies. Further explanation regarding the sample is
given in 5.7.1.
5.5 Statistical analyses
The quantitative data collected were analysed statistically using SPSS which helps the
researcher complete calculations at the click of a button. The data collected were firstly
examined for completeness. Codes were given to each item on the questionnaire (see
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Table 5.8) and the data were defined and entered into SPSS. The next step was to
provide the logical dimensions of validity (content validity) by subjecting the data to an
exploratory factor analysis, and then its statistical dimension of reliability (construct
validity) was checked. In order to investigate our theoretical model and to examine the
relationships between variables, regression-based path analysis was used.
Table 5.8 Abbreviation used in coding
Abbreviation Definitions
PC Personality characteristics PCnAch Personality characteristic of need for achievement PCLoC Personality characteristic of internal locus of control PCRisk Personality characteristic of risk-taking propensity ESE Entrepreneurial self-efficacy Search Entrepreneurial self-efficacy dimension of searching Plg Entrepreneurial self-efficacy dimension of planning Mrsh Entrepreneurial self-efficacy dimension of marshalling Impple Entrepreneurial self-efficacy dimension of implementing people
related tasks Impfin Entrepreneurial self-efficacy dimension of implementing finance
related tasks Copch Entrepreneurial self-efficacy dimension of coping with unexpected
challenges EBA Entrepreneurial behavioural activities BhvPlg Entrepreneurial behavioural activity of planning BhvCon Entrepreneurial behavioural activity of controlling BhvCom Entrepreneurial behavioural activity of internal communication BhvHRM Entrepreneurial behavioural activity of human resources
management BhvTas Entrepreneurial behavioural activity of work-related tasks BhvSer Entrepreneurial behavioural activity of customer service BhvSoc Entrepreneurial behavioural activity of socialising BhvPol Entrepreneurial behavioural activity of politicking EIO Entrepreneurial information overload
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5.5.1 Review of sample size based on validity and reliability
An important issue of any quantitative study that affects the validity and reliability of
the instrument and determines the suitability of data for factor analyses depends on the
sample size. An adequate sample allows for findings to be generalised (Carmeli 2008).
MacCullum et al. (1999) and Fabrigar et al. (1999) argue that an adequate sample size
depends on factors such as type and number of variables and the overall structure of the
research. For instance, the properties of the variables should be taken into account when
deciding sample size (Fabrigar et al. 1999). They suggest that under good conditions
(communalities of .70 or higher), a sample of 100 might be enough, and under poor
conditions, no sample size may be sufficient to give accurate generalisation of the
population. However, the authors believe that a sample less than 400 will lead to
distorted results. Many scholars recommend that the ratio of sample size to the number
of variables should be at least three to six times the number of items, with five being the
most ideal (Cattell 1978; Gorsuch 1983). Gorsuch (1983) recommended that the sample
size should be at least 100, while others (Comrey & Lee 1992) urge researchers to
obtain a sample of at least 500 or more. A sample size in the range of 100 to 400 has
been considered as appropriate for factor analytic studies (Hair et al. 1995). In this
study, I have obtained an effective sample size of 403, and based on the
recommendations of scholars (MacCallum et al. 1999; Fabrigar et al. 1999; Hair et al.
1995), this could be considered sufficient. The indicators used to measure the
constructs have been evaluated using validity tests and reliability tests as discussed in
the next section.
5.5.1.1 Validity
Validity refers to “the degree to which a measure measures what it is supposed to be
measuring” (Webb 2000, p. 216). The validity test is done to ensure that the
variables/items have also measured the construct as was intended so that the study can
rely on the answers the respondents provide. Kidder and Judd (1986) recommend that
every survey instrument must pass face validity, either formally or informally. While
the measures used in my study were taken from previous studies that have used the
same scales, the conceptual framework of my study brings together the constructs in a
different context to be applied in a different scenario, and a face validity test was also
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done. Accordingly, in my study, the content or face validity is assessed by a group of
academics and practicing entrepreneurs in both countries, India and New Zealand.
Further, exploratory factor analysis (EFA) was used. EFA is used to identify a set of
latent constructs underlying a range of measured variables (Fabrigar et al. 1999). This
can be done without imposing a preconceived structure on the outcome (Child 1990).
Fabrigar et al. (1999) recommend the use of EFA when the communalities are low and
where there are modest numbers of measured variables per factor, since EFA produces
more accurate results. They also recommend using EFA when there is an insufficient
basis to specify an a priori model. Accordingly, in this case, EFA was carried out using
SPSS 20.0. EFA allows for determining an appropriate number of factors as well as the
pattern of factor loadings. For this purpose, the Maximum Likelihood (ML) method of
factor extraction is used. Using the ML estimation for EFA allows extracting a vast
array of goodness-of-fit information that can be further used to determine the
appropriate number of factors (Fabrigar et al. 1999).
Fabrigar et al. (1999) also suggest that factors be rotated in multidimensional space,
which will help explain the data well and arrive at a solution with the best simple
structure. In this study, oblique rotations have been used so as to estimate the
correlations among factors, thereby providing solutions with correlated factors. Oblique
rotations are shown to “provide a more accurate and realistic representation of how
constructs are likely to be related to one another” (Fabrigar et al. 1999). Gorsuch
(1983) advises using oblique over orthogonal rotation as a general approach to
achieving solutions with simple structure. The Promax method of oblique rotation
suggested by Hendrickson and White (1964) was used in my study.
5.5.1.2 Reliability
Scale reliability is concerned with the extent to which a measuring procedure
consistently yields the same results on repeated trials (i.e when the measure is used over
and over again) (Peters 2002; Webb 2000). When the survey instrument is free from
error, it will yield consistent results (Peterson 1994). One way to check this is to assess
the survey instrument by the test-retest method. This method was not practically
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feasible to use in this study. Therefore, to ensure reliability, the internal consistency test
could be used (Kerlinger 1986). Internal consistency of the scales used in the survey
may be assessed by item to total correlation and co-efficient alpha (Cronbach 1951).
The item to total correlation examines the coherencies of the responses of each item in
relation to the other items and the entire survey. For the scale to be reliable, all items
should correlate with the total. The acceptable value of an item to a total correlation
should be 0.3 and above. Where the item to total correlation is less than 0.3, this means
that the particular item in question does not correlate very well with the overall scale.
In this context, the item to correlation for each item should be examined along with the
new Cronbach’s alpha value if the item was deleted. Cronbach alpha is a popularly
used measure for internal consistency of a multi-item scale (Peterson 1994). The
threshold criteria for Cronbach alpha in most studies follow Nunnally’s (1978)
suggestion of .70 or higher for reliability. Nevertheless, Peterson (1994) observes that
Cronbach himself advocates that criteria of .50 and .30 are also acceptable. In this
study, I have applied a threshold value of .70, which meets the higher threshold
suggested by Nunnally (1978).
5.5.2 Data analysis
Initially, data are described with the aim of providing a summary picture of the sample
used. This has been done using descriptive statistics. Here, the sample has been
described in terms of their age, gender and qualifications to better understand the
entrepreneurs in the study. Regression-based path analysis was employed to investigate
the relationships between variables as proposed in the hypothesis, based on the
theoretical model discussed in Chapter 4. Here, multiple regressions are used because
this technique “allows additional factors to enter into the analysis separately so that the
effect of each can be estimated” (Sykes 1993, p. 8). Regression allows for estimating
the quantitative effect of the casual variable on the dependent variables, and the
statistical significance of the estimated relationships can also be assessed. The degree
of confidence noted enables the hypothesis to be tested.
Based on the literature review, path one examines the association between the
personality traits and entrepreneurial self-efficacy. Path two examines the association
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between entrepreneurial self-efficacy and entrepreneurial behaviour. Path three
examines the association between personality traits and entrepreneurial behaviour.
Paths four and five examine the association between entrepreneurial information
overload and dimensions of entrepreneurial self-efficacy and entrepreneurial
behavioural activities respectively.
5.6 Chapter summary
This chapter elucidates the research methods used in the current study. It explains the
sampling technique used, as well as the size and response rate. The face validity of the
survey instrument has been described. The reliability and validity analyses carried out
in the study are described. Finally, the statistical and analytical tools used in the study to
test and interpret the hypotheses are also elaborated on.
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CHAPTER 6
RESULTS AND DISCUSSION
This chapter discusses the relationships between various categories of variables relating
to entrepreneurs’ personality characteristics, entrepreneurial self-efficacy,
entrepreneurial behaviour and entrepreneurial information overload. The data were
collected by administering questionnaires between 8 February 2012 and 30 December
2012 in major cities in India. To analyse the data collected, the IBM SPSS 20.0
statistical computational package was used. The results and analysis are presented in
this chapter in four parts. First, the sample characteristics are collated and presented.
Second, a discussion on the measurement properties, which includes the reliability and
validity tests, is presented. Third, the results of regression analyses conducted for
hypothesis testing are reported. Fourth, the results have been analysed to gain insights
into the relationships between variables proposed in the conceptual framework.
6.1 Sample characteristics
As discussed in Chapter 5, a total of 650 responses was received, but only 403 were
found to be usable for data entry. The respondents were business owner-managers,
consisting of 63% of founder-owners, 29.3% of owners inheriting their business, 26%
who bought the business from others and 1.2 % who became owners of the business by
other means such as stock options. The demographic characteristics of the respondents
are presented in Table 6.1.
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Table 6 .1 Sample Demographics (n=403)
Characteristics Category Frequency Percent Gender (n=401) Male 355 88.5
Female 46 11.5 Age (n=402) 21-25 years 23 5.7
26-30 years 33 8.2 31-35 years 68 16.9 36-40 years 72 17.9 41-45 years 68 16.9 46-50 years 62 15.4 51-55 years 38 9.5 56-60 years 18 4.5 61-65 years 11 2.7 > 66 years 9 2.2
Education (n=401) No formal qualification
12 3
Secondary school qualification
24 6
Undergraduate diploma
16 4
Bachelor’s/Graduate diploma
164 40.9
Bachelor’s Honours/PG diploma
54 13.5
Master’s degree 125 31.2 Doctorate 6 1.5
6.1.1 Firm characteristics
Table 6.2 gives the breakup of the industry sector which the respondents’ businesses
belong to. Although there is a good representation from various industries, there is a
higher representation of firms in the service industry. For example, education and
training (16.4), wholesale/retail trade (12.9%) and IT (10.2 %) constituted the bulk of
the sample.
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Table 6 .2 Characteristics of the respondents’ firms (n=403) Firm details Industry sector the business belongs to Frequency Percent
Agriculture, Forestry & Fishing 19 4.7 Accommodation, cafes & restaurants 28 6.9 Transport and warehousing 32 7.9
Financial and insurance services 16 4
Administrative and support services 11 2.7 Arts and recreation services 15 3.7 Electricity, gas, water supply 24 6 Construction 33 8.2 Information,media and telecommunications 41 10.2 Property and real estate 40 9.9 Health care and social assistance 26 6.5 Mining and manufacturing 19 4.7 Wholesale/Retail trade 52 12.9 Education and training 66 16.4 Tourism and hospitality 21 5.2 Others 17 4.2
6.2 Measurement properties
Scholars attest that the ability to test the hypotheses and the quality of inferences
depend on the procedures that were used to develop the measures, the survey
instrument, and evidence that the measures are of good quality (see Churchill 1979;
Webb 2000; Peters 2002). While the survey questions were checked for the wording,
layout and applicability to the context of the study, the measurements used should also
be assessed for their reliability and validity. Churchill (1979) and Webb (2000) remind
us that the measurements should not only be tested for reliability, but also validity, since
a valid measure will always be reliable, but a reliable measure may not be valid.
Accordingly, once the data were collected, the measurement was subjected to both
validity and reliability tests.
To establish the psychometric properties of the measures used in our study, I conducted
reliability and validity analysis. For the purpose of reliability analysis, first I looked at
the correlations among all the items to see that they were highly correlated within the
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construct and differentiated from other constructs. After this, I calculated Cronbach’s
Alpha for each construct and checked for item-to-total correlation. The results of this
are presented in the following tables under the section reliability analysis.
6.2.1 Reliability analysis
Coefficient alpha is the most used and well established measure to examine the internal
consistency of a set of items (Churchill 1979; Nunnally 1978; Peters 1979). Churchill
(1979, p.68) suggests that “coefficient alpha absolutely should be the first measure one
calculates to assess the quality of the instrument”. A higher co-efficient alpha indicates
that the sample of items captures the construct it is intended to capture, and the items in
the pool share a common core. Churchill (1979) states that if the alpha is low, it means
that the sample of items is not successful in capturing the construct which motivated the
measure, and suggests that if the item pool is sufficiently large, the items that do not
share equally the common core should be eliminated. He recommends calculating the
correlation of each item with the total score and plotting these correlations in decreasing
order of magnitude, and eliminating any item with correlations near zero. Also he
suggests removing the items which cause a substantial or sudden drop in the item-to-
total correlations. I have followed this procedure, and present the results in the next
section.
6.2.1.1 Reliability test for Entrepreneurial Self-efficacy
Table 6.3 presents the correlation matrix for entrepreneurial self-efficacy, and Table 6.4
shows the reliability analysis results for measures of the entrepreneurial self-efficacy
construct.
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Table 6.4: Reliability Analysis Results for Measurement Scales in the Study of Entrepreneurial Self Efficacy
Scale Items Mean Std Deviation
Item to total correlation
Cronbach’s Alpha
Searching Search1 5.00 1.47 .68 Search2 5.28 1.32 .73 Search3 5.27 1.30 .63 .82 Planning Plg1 5.21 1.25 .61 Plg2 5.15 1.26 .62 Plg3 5.01 1.36 .56 .77 Marshalling Mrsh1 4.99 1.37 .59 Mrsh2 5.19 1.32 .60 Mrsh3 5.14 1.33 .57 .76 Implementing people-related tasks
ImP1 5.26 1.36 .61
ImP2 5.26 1.28 .72 ImP3 5.4 1.25 .69 ImP4 5.33 1.21 .63 ImP5 5.46 1.19 .68 ImP6 5.28 1.30 .62 .86 Implementing finance- related tasks
ImF1
5.19 1.30 .66
ImF2 5.23 1.30 .74 ImF3 5.18 1.36 .75 ImF4 5.13 1.31 .68 .86 Coping with unexpected challenges
Cop1 5.21 1.26 .63
Cop2 5.12 1.26 .76 Cop3 5.23 1.27 .65 .82
As can be seen from the information presented in the above tables, Cronbach’s Alpha
exceeded the minimum requirement of .70 for all constructs, and item to total
correlation exceeded .30 for all items. This meets the requirements suggested by
Nunnally (1978).
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6.2.1.2 Reliability test for entrepreneurial behavioural activities
Table 6.5 presents the correlation matrix for entrepreneurial behavioural activities, and
Table 6.6 shows the reliability analysis results for measurement scales for the
entrepreneurial self-efficacy construct.
164
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Table 6.6 Reliability Analysis Results for Measurement Scales in the Study of Entrepreneurial Behavioural Activities
Scale Items Mean Std Deviation
Item to total correlation
Cronbach’s Alpha
Planning BehPlg1 5.11 2.46 .33 BehPlg2 5.08 1.25 .52 BehPlg3 5.10 1.29 .44 .66 Controlling BehCon1 5.25 1.24 .59 BehCon2 5.08 1.32 .69 BehCon3 5.01 1.32 .66 .80 Internal Communication
BehCom1 5.32 1.28 .63
BehCom2 5.41 1.29 .72 BehCom3 5.47 1.22 .69 BehCom4 5.03 1.33 .55 .82 HR Management BehHRM1 5.13 1.36 .62 BehHRM2 5.14 1.28 .69 BehHRM3 4.94 1.40 .66 BehHRM4 5.26 1.26 .76 BehHRM5 5.26 1.27 .63 .86 Work-Related Tasks
BehTas1 4.98 1.40 .59
BehTas2 5.40 1.24 .70 BehTas3 5.30 1.30 .69 .81 Customer Service
BehSer1 5.30 1.32 .65
BehSer2 5.30 1.35 .72 BehSer3 5.23 1.32 .54 .79 Socialising BehSoc1 4.94 1.4 .68 BehSoc2 5.07 1.43 .77 BehSoc3 5.20 1.32 .73 BehSoc4 5.18 1.34 .66 .86 Politicking BehPol1 4.80 1.56 .74 BehPol2 4.63 1.76 .87 BehPol3 4.62 1.77 .86 BehPol4 4.67 1.69 .77 .92
As can be seen from the information presented in Table 6.6, Cronbach’s Alpha
exceeded the minimum requirement of .70 for all constructs except for planning. For
the construct of planning, the Cronbach’s Alpha value is .66. It is slightly less than the
cut-off value of .70. However, I decided to continue with this for further analysis
because the items for this scale were drawn from the existing literature (Luthans &
Ibrayeva 2006). Further, the item to total correlation exceeded .30 for all items.
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6.2.1.3 Reliability test for personality characteristics
Table 6.7 presents the correlation matrix for personality characteristics, and Table 6.8
shows the reliability analysis results.
Table 6.7 Correlations Matrix for Personality Characteristics
nAch1 nAch2 nAch3 LoC1 LoC2 LoC3 LoC4 Risk1 Risk2 Risk3 Risk4 nAch1 1 nAch2 .63*** 1 nAch3 .52*** .62*** 1 LoC1 .39*** .44*** .49*** 1 LoC2 .47*** .50*** .45*** .48*** 1 LoC3 .31*** .35*** .35*** .43*** .52*** 1 LoC4 .51*** .48*** .47*** .42*** .57*** .60*** 1 Risk1 .40*** .45*** .46*** .43*** .48*** .43*** .52*** 1 Risk2 .38*** .47*** .45*** .32*** .49*** .38*** .46*** .62*** 1 Risk3 .18*** .40*** .39*** .33*** .35*** .37*** .33*** .53*** .56*** 1 Risk4 .19*** .39*** .37*** .34*** .34*** .36*** .35*** .51*** .51*** .76*** 1
*** Correlation is significant at the .000 level
Table 6.8: Reliability Analysis Results for Measurement Scales in the Study of Personality Characteristics
Scale Items Mean Std Deviation
Item to total correlation
Cronbach’s Alpha
Need for Achievement
nAch1 5.24 1.41 .64
nAch2 5.10 1.36 .72 nAch3 5.10 1.37 .63 .82 Internal Locus of control
LoC1 4.84 1.28 .53
LoC2 5.27 1.29 .65 LoC3 4.89 1.40 .64 LoC4 5.10 1.28 .66 .83 Risk-taking Propensity
Risk1 4.85 1.45 .64
Risk2 4.82 1.42 .66 Risk3 4.54 1.52 .74 Risk4 4.64 1.53 .78 .85
As can be seen from the information presented in the above tables, Cronbach’s Alpha
exceeded the minimum requirement of .70 for all constructs of personality
characteristics, and item to total correlation exceeded .30 for all items. Therefore, all
the items were retained in the scale.
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6.3.1.4 Reliability test for entrepreneurial information overload
Table 6.9 Correlations Matrix for Entrepreneurial Information Overload
EIO1 EIO2 EIO3 EIO4 EIO5 EIO6 EIO7 EIO1 1 EIO2 .43*** 1 EIO3 .30*** .62*** 1 EIO4 .26*** .61*** .66*** 1 EIO5 .48*** .43*** .49*** .54*** 1 EIO6 .24*** .45*** .54*** .54*** .56*** 1 EIO7 .25*** .52*** .57*** .59*** .45*** .67*** 1 **. Correlation is significant at the 0.000 level (2-tailed).
Table 6.10: Reliability Analysis Results for Measurement Scales in the Study of
Entrepreneurial Information Overload (EIO) Scale Items Mean Std
Deviation Item to total correlation
Cronbach’s Alpha
Entrepreneurial Information Overload
EIO1 4.18 1.54 .32
EIO2 3.71 1.53 .52 EIO3 3.78 1.45 .56 EIO4 3.61 1.50 .58 EIO5 4.05 1.45 .50 EIO6 3.83 1.51 .55 EIO7 3.64 1.66 .55 .87
As can be seen from the information presented in Table 6.10, Cronbach’s Alpha
exceeded the minimum requirement of .70 for the construct of entrepreneurial
information overload, and item to total correlation exceeded .30 for all items.
6.2.2 Exploratory factor analysis (EFA)
To examine the validity of each measure, EFA was employed. EFA helps identify the
number of constructs and the underlying factor structure. The items were subjected to
Maximum Likelihood Estimation and Promax rotation to discover common factors and
assess the variance explained by the factors of each construct. Factors with an Eigen
value of 1 or more were selected for the purpose of further analysis. For each factor, the
factor loading of more than .5 within the factor and more than .25 between the factors
was considered for the purpose of selection of the factors. Exploratory factor analysis
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was repeated to include each item of all the measures and the findings are given in the
tables below.
6.2.2.1 Factor analysis for all the measures of entrepreneurial self-efficacy
6.2.2.1.1 Searching
As can be seen from Table 6.11 below, EFA results for the construct ‘searching’
showed that searching, as hypothesised, was a uni-dimensional factor. All the three
items were loaded on this factor, and factor loadings ranged from .70 to .86. The total
variance explained by three items of the searching construct is 61.33%.
Table 6.11 Factor Analysis for the Entrepreneurial Self-Efficacy construct of Searching (Search)
Item Correlation Eigen value
Factor Loading
Variance explained Search1 Search2 Search3
Search1 1 2.22 .78 61.33% Search2 .67 1 .86 Search3 .55 .60 1 .70
6.2.2.1.2 Planning
As can be seen from Table 6.12 below, EFA results for the construct ‘planning’ showed
that planning, as hypothesised, was a uni-dimensional factor. All the three items were
loaded on this factor, and the factor loadings ranged from .65 to .77. The total variance
explained by the three items of the planning construct is 52.68%.
Table 6.12 Factor Analysis for the Entrepreneurial Self-Efficacy construct of
Planning (Plg) Item Correlation Eigen
value Factor Loading
Variance explained Plg1 Plg2 Plg3
Plg1 1 2.05 .77 52.68% Plg2 .58 1 .75 Plg3 .49 .50 1 .65
6.2.2.1.3 Marshalling
As can be seen from Table 6.13 below, EFA results for the construct ‘marshalling’
showed that marshalling, as hypothesised, was a uni-dimensional factor. All the three
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items were loaded on this factor, and the factor loadings ranged from .69 to .74. The
total variance explained by the three items of the marshalling construct is 50.84%.
Table 6. 13 Factor Analysis for the Entrepreneurial Self-Efficacy construct of Marshalling (Mrsh)
Item Correlation Eigen value
Factor Loading
Variance explained Mrsh1 Mrsh2 Mrsh3
Mrsh1 1 2.02 .71 50.84% Mrsh2 .52 1 .74 Mrsh3 .49 .51 1 .69
6.2.2.1.4 Implementing people-related tasks
As can be seen from Table 6.14 below, EFA results for the construct ‘implementing
people’ showed that implementing people-related tasks, as hypothesised, was a uni-
dimensional factor. All the six items were loaded on this factor, and the factor loadings
ranged from .67 to .80. The total variance explained by the six items of the
‘implementing people’ construct is 51.73%.
Table 6. 14 Factor Analysis for the Entrepreneurial Self-Efficacy construct of
Implementing People-Related Tasks (ImP) Item Correlation Eigen
value Factor Loading
Variance explained ImP1 ImP2 ImP3 ImP4 ImP5 ImP6
ImP1 1 3.58 .67 51.73% ImP2 .57 1 .80 ImP3 .53 .69 1 .78 ImP4 .48 .48 .54 1 .67 ImP5 .43 .52 .51 .53 1 .71 ImP6 .41 .52 .43 .44 .65 1 .67
6.2.2.1.5 Implementing finance-related tasks
As can be seen from Table 6.15 below, EFA results for the construct ‘implementing
finance’ showed that implementing finance-related tasks, as hypothesised, was a uni-
dimensional factor. All the four items were loaded on this factor, and the factor
loadings ranged from .72 to .83. The total variance explained by the four items of the
‘implementing finance’ construct is 61.28%.
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Table 6. 15 Factor Analysis for the Entrepreneurial Self-Efficacy construct of Implementing Finance-Related Tasks (ImF)
Item Correlation Eigen value
Factor Loading
Variance explained ImF1 ImF2 ImF3 ImF4
ImF1 1 2.83 .72 61.22% ImF2 .60 1 .82 ImF3 .61 .69 1 .83 ImF4 .53 .62 .62 1 .74
6.2.2.1.6 Coping with unexpected challenges
As can be seen from Table 6.16 below, EFA results for the construct ‘coping with
unexpected challenges’ shows that the construct, as hypothesised, was a uni-
dimensional factor. All the three items were loaded on this factor, and the factor
loadings ranged from .70 to .92. The total variance explained by the three items of the
‘coping with unexpected challenges’ construct is 62 %.
Table 6.16 Factor Analysis for the Entrepreneurial Self-efficacy construct of
coping with unexpected challenges (Cop) Item Correlation Eigen
value Factor Loading
Variance explained Cop1 Cop2 Cop3
Cop1 1 2.21 .70 62.00% Cop2 .64 1 .92 Cop3 .51 .67 1 .72
6.2.2.2 Factor analysis for entrepreneurial behavioural activities
6.2.2.2.1 Planning
As can be seen from Table 6.17 below, EFA results for the construct ‘planning’ showed
that planning, as hypothesised, was a uni-dimensional factor. All the three items were
loaded on this factor, and the factor loadings ranged from .38 to .88. The total variance
explained by the three factors of the ‘planning’ construct is 45.34 %.
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Table 6.17 Factor Analysis for the Entrepreneurial Behavioural Activities construct of Planning (BehPlg)
Item Correlation Eigen value
Factor Loading
Variance explained BehPlg1 BehPlg2 BehPlg3
BehPlg1 1 1.803 .38 45.54% BehPlg2 .33 1 .88 BehPlg3 .25 .59 1 .67
6.2.2.2.2 Controlling
As can be seen from Table 6.18 below, EFA results for the construct ‘controlling’
showed that the construct, as hypothesised, was a uni-dimensional factor. All the three
items were loaded on this factor, and the factor loadings ranged from .67 to .84. The
total variance explained by the three items of the ‘controlling’ construct is 57.93%
Table 6.18 Factor Analysis for the Entrepreneurial Behavioural Activities
construct of Controlling (BehCon) Item Correlation Eigen
value Factor Loading
Variance explained BehCon1 BehCon2 BehCon3
BehCon1 1 2.15 .67 57.93%
BehCon2 .56 1 .84
BehCon3 .51 .64 1 .77
6.2.2.2.3 Internal communication
As can be seen from Table 6.19 below, EFA results for the construct ‘internal
communication’ showed that the construct, as hypothesised, was a uni-dimensional
factor. All the four items were loaded on this factor, and the factor loadings ranged
from .58 to .87. The total variance explained by the four items of the ‘internal
communication’ construct is 54.80%.
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Table 6.19 Factor Analysis for the Entrepreneurial Behavioural Activities construct of Internal Communication (BehCom)
Item Correlation Eigen value
Factor Loading
Variance explained Beh
Com1 Beh Com2
Beh Com3
Beh Com4
BehCom1 1 2.62 .69 54.80%
BehCom2 .62 1 .87
BehCom3 .49 .70 1 .80
BehCom4 .48 .44 .50 1 .58
6.2.2.2.4 Human resource management
As can be seen from Table 6.20 below, EFA results for the construct ‘HR management’
showed that the construct, as hypothesised, was a uni-dimensional factor. All the five
items were loaded on this factor, and the factor loadings ranged from .66 to .86. The
total variance explained by the five items of the ‘HR management’ construct is 54.99 %.
Table 6.20 Factor Analysis for the Entrepreneurial Behavioural Activities
construct of HR Management (BehHRM) Item Correlation Eigen
value Factor Loading
Variance explained Beh
HRM1 Beh HRM2
Beh HRM3
Beh HRM4
Beh HRM5
BehHRM1 1 3.19 .66 54.99% BehHRM2 .57 1 .72
BehHRM3 .53 .69 1 .73
BehHRM4 .48 .48 .54 1 .86
BehHRM5 .43 .52 .51 .53 1 .73
6.2.2.2.5 Work-related tasks
As can be seen from Table 6.21 below, EFA results for the construct ‘work-related
tasks’ showed that the construct, as hypothesised, was a uni-dimensional factor. All the
three items were loaded on this factor, and the factor loadings ranged from .66 to .83.
The total variance explained by the three items of the ‘work-related tasks’ construct is
59.54%
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Table 6.21 Factor Analysis for the Entrepreneurial Behavioural Activities construct of Work-related Tasks (BehTas)
Item Correlation Eigen value
Factor Loading
Variance explained BehTas1 BehTas2 BehTas3
BehTas1 1 2.18 .66 59.54%
BehTas2 .55 1 .83
BehTas3 .54 .68 1 .81
6.2.2.2.6 Customer service
As can be seen from Table 6.22 below, EFA results for the construct ‘customer service’
showed that the construct, as hypothesised, was a uni-dimensional factor. All the three
items were loaded on this factor, and the factor loadings ranged from.59 to .91. The
total variance explained by the three items of the factor is 58.61%.
Table 6.22 Factor Analysis for the Entrepreneurial Behavioural Activities construct of Customer Service (BehSer)
Item Correlation Eigen value
Factor Loading
Variance explained BehSer1 BehSer2 BehSer3
BehSer1 1 2.13 .76 58.61%
BehSer2 .69 1 .91
BehSer3 .45 .54 1 .59
6.2.2.2.7 Socialisation
As can be seen from Table 6.23 below, EFA results for the construct ‘socialisation’
showed that the construct, as hypothesised, was a uni-dimensional factor. All the four
items were loaded on this factor, and the factor loadings ranged from .72 to .85. The
total variance explained by the four items of the ‘socialisation’ construct is 61.23%.
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Table 6.23 Factor Analysis for the Entrepreneurial Behavioural Activities construct of Socialisation (BehSoc)
Item Correlation Eigen value
Factor Loading
Variance explained BehSoc1 BehSoc2 BehSoc3 BehSoc4
BehSoc1 1 2.83 .76 61.23%
BehSoc2 .69 1 .85
BehSoc3 .58 .65 1 .79
BehSoc4 .49 .60 .64 1 .72
6.2.2.2.8 Politicking
As can be seen from Table 6.24 below, EFA results for the construct ‘politicking’
showed that the construct, as hypothesised, was a uni-dimensional factor. All the four
items were loaded on this factor, and the factor loadings ranged from .78 to .92. The
total variance explained by the four items of the ‘politicking’ construct is 73.90%.
Table 6.24 Factor Analysis for the Entrepreneurial Behavioural Activities
construct of Politicking (BehPol) Item Correlation Eigen
value Factor Loading
Variance explained BehPol1 BehPol2 BehPol3 BehPol4
BehPol1 1 3.20 .78 73.90%
BehPol2 .74 1 .92
BehPol3 .71 .83 1 .91
BehPol4 .61 .74 .76 1 .82
6.2.2.3 Factor analysis for personality characteristics
6.2.2.3.1 Need for Achievement (nAch)
As can be seen from Table 6.25 below, EFA results for the construct ‘need for
achievement’ showed that the construct, as hypothesised, was a uni-dimensional factor.
All the three items were loaded on this factor, and the factor loadings ranged from .71 to
.87. The total variance explained by the three items of the need for achievement
construct is 59.76%.
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Table 6.25 Factor Analysis for the Personality Characteristic of Need for Achievement (nAch)
Item
Correlation Eigen value
Factor Loading
Variance explained nAch1 nAch2 nAch3
nAch1 1 2.18 .72 59.76% nAch2 .63 1 .87 nAch3 .52 .622 1 .71
6.2.2.3.2 Internal locus of control (LoC)
As can be seen from Table 6.26 below, EFA results for the construct ‘internal locus of
control’ showed that the construct, as hypothesised, was a uni-dimensional factor. All
the four items were loaded on this factor, and the factor loadings ranged from .59 to .78.
The total variance explained by the four items of the ‘internal locus of control’ construct
factor is 51.13%.
Table 6.26 Factor Analysis for the Personality Characteristic of Internal Locus of
Control (LoC) Item Correlation Eigen
value Factor Loading
Variance explained LoC1 LoC2 LoC3 LoC4
LoC1 1 2.52 .59 51.13% LoC2 .48 1 .74 LoC3 .43 .52 1 .74 LoC4 .42 .57 .60 1 .78
6.2.2.3.3 Risk-taking propensity
As can be seen from Table 6.27 below, EFA results for the construct ‘risk-taking
propensity’ showed that the construct, as hypothesised, was a uni-dimensional factor.
All the four items were loaded on this factor, and the factor loadings ranged from .65 to
.88. The total variance explained by the four items of the ‘risk-taking propensity’
construct is 58.34%.
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Table 6.27 Factor Analysis for the Personality Characteristic of Risk-taking Propensity (Risk)
Item Correlation Eigen value
Factor Loading
Variance explained Risk1 Risk2 Risk3 Risk4
Risk1 1 2.75 .65 58.34% Risk2 .62 1 .67 Risk3 .53 .56 1 .88 Risk4 .51 .51 .76 1 .84
6.2.2.4 Entrepreneurial information overload
As can be seen from Table 6.28 below, EFA results for the construct ‘entrepreneurial
information overload’ showed that the construct, as hypothesised, was a uni-
dimensional factor. All the seven items were loaded on this factor, and the factor
loadings ranged from .48 to .80. The total variance explained by the seven items of the
‘entrepreneurial information overload’ construct is 49.89%.
Table 6. 28 Factor Analysis for Entrepreneurial Information Overload (EIO)
Item Correlation Eigen value
Factor Loading
Variance explained
EIO1 EIO2 EIO3 EIO4 EIO5 EIO6 EIO7 EIO1 1 3.96 .42 49.89% EIO2 .43 1 .72 EIO3 .30 .62 1 .79 EIO4 .26 .61 .66 1 .80 EIO5 .48 .43 .49 .54 1 .67 EIO6 .24 .45 .54 .54 .56 1 .73 EIO7 .25 .52 .57 .59 .45 .67 1 .75
6.3 Composite variables
Composite measures for the dependent and independent variables were first developed
by averaging the items for each of the scales. By averaging the items, it is assumed that
all the items in that scale contribute equally to the construct. This is advised only for
established scales whose psychometric properties can be established in the given
sample. We have shown this to be the case in the reliability and validity section of this
chapter.
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For testing the hypotheses, items representing each dimension of entrepreneurial self-
efficacy, entrepreneurial behavioural activities, and personality characteristics were
averaged to provide a composite value for each construct. All the items under the
entrepreneurial information overload construct were also combined to form a composite
variable.
6.3.1 Correlation matrix for composite variables
Table 6.29 shows the mean, standard deviation and correlation among the composite
variables used for hypothesis testing.
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179
6.4 Common method bias Since there is a possibility that the characteristics of late respondents may be similar to
those of non-respondents, I formally tested for response bias using the procedure
suggested by Oppenheim (1966). Tests for nonresponse bias was done by comparing
responses received from the first and second rounds of mailing. The t-tests results
showed no significant difference between the first and second mailing.
6.5 Hypothesis testing
Most of the constructs proposed in the theoretical model, i.e. entrepreneurial self-
efficacy (ESE), personality characteristics (PC), and entrepreneurial behavioural
activities (EBA) had multiple factors. To test the hypotheses, regression-based path
analysis using Hayes (2013) PROCESS tool for SPSS was carried out, because such a
type of regression-based path analysis considers the various conditions in combination.
In Chapter 4, I presented the conceptual framework proposing relationships between
various variables, and also a corresponding set of hypotheses. The hypotheses were
tested for the proposed relationships between personality characteristics and
entrepreneurial self-efficacy (H1a - H1f, H2a - H2f, H3a - H3f), and the relationship
between entrepreneurial information overload and entrepreneurial self-efficacy (H4a-
H4f). Tables 6.30 to 6.35 present the results of the analysis for the relationship between
personality characteristics and entrepreneurial self-efficacy as well as the association of
EIO on each dimension of entrepreneurial self-efficacy. The hypotheses of the main
effects on relationships between entrepreneurial information overload on entrepreneurial
behavioural activities (H5a – H5h), personality characteristics on entrepreneurial
behavioural activities (H6a – H6h; H7a-H7h; H8a-H8h), and entrepreneurial self-
efficacy on entrepreneurial behavioural activities ( H9a-H9h; H10a-H10h; H11a-H11h;
H12a-H12h; H13a-H13h; H14a-H14h) were also tested. The results of these tests are
presented in Tables 6.36 - 6.43.
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6.5.1 Effects of personality characteristics and entrepreneurial information overload on the searching capability dimension of entrepreneurial self-efficacy (H1a, H2a, H3a, and H4a) Table 6.30 Testing of PC and EIO association with searching capability dimension
of ESE Dependent Variable: Searching (search) Model Summary: R2 = .32, F = 32.98, p <.001 Standardised beta
coefficient Standard error
t p
constant 2.40*** .34 7.03 .000 EIO -.10* .04 -2.50 .013 PCnAch .35*** .06 5.79 .000 PCLoC .11NS .07 1.43 .154 PCRisk .18** .06 3.17 .002 *** p≤.000. ** p≤.01. *p≤.05.
The results, as can be seen in Table 6.30, suggest that the need for achievement
dimension of personality characteristics (PCnAch: β=0.35, p ≤.000) and the risk-taking
dimension of personality characteristics (PCRisk: β=0.18, p ≤.01) are positively related
to the searching capability dimension of entrepreneurial self-efficacy. This evidence
suggests that entrepreneurs who have a high need for achievement and risk-taking
propensity also perceive their level of confidence in searching for market and product
information to be high. The results also show that there is no direct effect of the internal
locus of control dimension of personality characteristics on the searching dimension of
entrepreneurial self-efficacy (PCLoC: β=0.11, p =0.154). The results also show that, as
hypothesised, entrepreneurial information overload is negatively associated with the
searching capability of entrepreneurial self-efficacy (EIO: β=-0.10, p ≤ 0.05). It shows
that information overload reduces entrepreneurs’ confidence in their searching ability.
The relevant hypotheses and results are shown below:
H1a : Personality characteristics of need for achievement is positively associated with
the searching capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=0.35, p ≤ 0.000).
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H2a: Personality characteristics of locus of control is positively associated with the
searching capability dimension of entrepreneurial self efficacy.
This hypothesis was not supported (β=0.11, not significant [p=.154]).
H3a: Personality characteristics of risk-taking propensity is positively associated with
the searching capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=0.18, p ≤ 0.01 [p=.002]).
H4a: Entrepreneurial information overload is negatively associated with the searching
capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=-0.10, p ≤.05, [p=.013]).
6.5.2 Effects of personality characteristics and entrepreneurial information overload on the planning capability dimension of entrepreneurial self-efficacy (H1b, H2b, H3b, and H4b)
Table 6.31 Testing of PC and EIO association with planning dimension of ESE
Dependent Variable: Planning (Plg) Model Summary: R2 = .21, F=18.83, p < .001 Standardised beta
coefficient Standard error
t p
constant 2.97*** .33 9.02 .000 EIO -.05NS .05 -1.06 .290 PCnAch .16** .06 2.59 .010 PCLoC .10NS .08 1.35 .177 PCRisk .21*** .06 3.73 .000
*** p≤.000. ** p≤.01.
Entrepreneurial characteristics of need for achievement (PCnAch: β=0.16, p < 0.01) and
risk-taking (PCRisk: β=0.21, p < 0.000) dimensions of personality characteristics are
shown to have a positive relationship with the entrepreneur’s self-efficacy in planning.
There is, however, no relationship between the locus of control dimension of
personality characteristics and entrepreneurial self-efficacy dimension of planning. The
result also shows no association between entrepreneurial information overload and
planning, and therefore the hypothesis (H2b) is rejected. The relevant hypotheses and
results are shown below:
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H1b: Personality characteristics of need for achievement is positively associated with
the planning capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=0.16, p ≤ .010).
H2b: Personality characteristics of locus of control is positively associated with the
planning capability dimension of entrepreneurial self efficacy.
This hypothesis was not supported (β=0.10, not significant [p= .177]).
H3b: Personality characteristics of risk-taking propensity is positively associated with
the planning capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=0.21, p ≤ .000).
H4b: Entrepreneurial information overload is negatively associated with the planning
capability dimension of entrepreneurial self efficacy.
This hypothesis was not supported (β=-.05, not significant, [p= .290]).
6.5.3 Effects of personality characteristics and entrepreneurial information overload on the marshalling capability dimension of entrepreneurial self-efficacy (H1c, H2c, H3c, H4c)
Table 6.32 Testing of PC and EIO association with the marshalling capability dimension of ESE
Dependent Variable: Marshalling (Mrsh) Model Summary: R2 = .20, F= 16.74, p < .001 Standardised beta
coefficient Standard error
t p
constant 3.22*** .34 9.58 .000 EIO -.11* .05 -2.38 .018 PCnAch .14* .06 2.34 .020 PCLoC .12NS .07 1.47 .142 PCRisk .22*** .06 4.03 .000
*** p ≤.000. *p ≤.05
Two of the three entrepreneur personality characteristics dimensions, namely need for
achievement (PCnAch: β=.14, p < .05) and risk taking (PCRisk: β=.22, p ≤.000), are
shown to have a positive relationship with the entrepreneur’s self-efficacy in
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marshalling and organising resources for the firm. However, internal locus of control is
not associated with the marshalling dimension of entrepreneurial self-efficacy (PCLoC:
β=12, p =.142). As hypothesised, entrepreneurial information overload is negatively
associated with the marshalling dimension (EIO: β=-.11, p ≤ .05). It negatively impacts
on the entrepreneurs’ confidence in their ability to organise resources. The relevant
hypotheses and results are shown below:
H1c: Personality characteristics of need for achievement is positively associated with
the marshalling capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=0.14, p ≤ 0.05, [p=.020]).
H2c: Personality characteristics of locus of control is positively associated with the
marshalling capability dimension of entrepreneurial self efficacy.
This hypothesis was not supported (β=0.12, not significant [p = .142]).
H3c: Personality characteristics of risk-taking propensity is positively associated with
the marshalling capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=0.22, p ≤.000).
H4c: Entrepreneurial information overload is negatively associated with the
marshalling capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=-.11, p ≤.05, [p=.018]).
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6.5.4 Effects of personality characteristics and entrepreneurial information overload on the implementing people-related capability dimension of entrepreneurial self-efficacy (H1d, H2d, H3d, H4d)
Table 6.33 Testing of PC and EIO association with the implementing people-
related capability dimension of ESE Dependent Variable: Implementing people-related capability(Impple) Model Summary: R2 = .25, F = 20.94, p <.001 Standardised beta
coefficient Standard error
t p
constant 3.31*** .30 11.16 .000 EIO -.09* .04 -2.20 .029 PCnAch .21*** .06 3.86 .000 PCLoC .12* .06 2.01 .046 PCRisk .13** .05 2.63 .009
*** p ≤.000. ** p ≤.01. *p ≤.05
All the three characteristics, need for achievement (PCnAch: β=0.21, p ≤.000), locus of
control (PCLoC: β=0.12, p ≤ 0.05) and risk-taking propensity (PCRisk: β=0.13, p ≤.01))
have been shown to have a direct and positive relationship to the entrepreneur’s
confidence level in implementing people-related tasks (supervising staff and other
human resource activities). This is expected, because entrepreneurs who have a need to
achieve and a high internal locus of control will take control and have confidence in
their own ability to supervise and lead people. There is also, however, a negative
relationship between entrepreneurial information overload (EIO) and the implementing
people-related task dimension of entrepreneurial self efficacy (EIO: β=-.09, p ≤ 0.05) as
hypothesised. When entrepreneurs feel overloaded with information, they lack
confidence in their ability to supervise and undertake other human resource activities.
The relevant hypotheses and results are shown below:
H1d: Personality characteristics of need for achievement is positively associated with
the implementing people-related capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=0.21, p ≤ .000).
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H2d Personality characteristics of locus of control is positively associated with the
implementing people-related capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=0.12, p ≤ . 05, [p=. 046]).
H3d Personality characteristics of risk-taking propensity is positively associated with
the implementing people-related capability dimension of entrepreneurial self-efficacy.
This hypothesis was supported (β=0.13, p ≤ .01, [p=.009]).
H4d Entrepreneurial information overload is negatively associated with the
implementing people-related capability dimension of entrepreneurial self-efficacy.
This hypothesis was supported (β=-.09, p ≤ 0.05, [p=.029]).
6.5.5 Effects of personality characteristics and entrepreneurial information overload on the implementing finance capability dimension of entrepreneurial self-efficacy (H1e, H2e, H3e, H4e)
Table 6.34 Testing of PC and EIO association with the implementing finance-
related capability dimension of ESE Dependent Variable: Implementing finance-related capability (Impfin) Model Summary: R2 = .22, F = 19.34, p <.001 Standardised beta
coefficient Standard error
t p
constant 2.97*** .33 8.91 .000 EIO -.08NS .04 -1.91 .056 PCnAch .15* .07 2.22 .027 PCLoC .18* .07 2.50 .013 PCRisk .18** .06 2.98 .003
** p≤.01. *p≤.05. All the three personality characteristics, namely need for achievement (PCnAch:
β=0.15, p ≤ .05), locus of control (PCLoC: β=0.18, p ≤.05) and risk-taking propensity
(PCRisk: β=0.18, p ≤ .01) have been shown to have a direct and positive relationship to
the entrepreneur’s confidence level in implementing finance-related tasks (maintaining
financial records, understanding statements, and estimating financial requirements of
the firm). The results show that entrepreneurial information overload (EIO) does not
affect the implementing finance dimension of entrepreneurial self-efficacy. The
186
hypothesis (H4e) was therefore rejected. The relevant hypotheses and results are shown
below:
H1e Personality characteristics of need for achievement is positively associated with
the implementing finance-related capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=0.15, p ≤ .05, [p=.027]).
H2e Personality characteristics of locus of control is positively associated with the
implementing finance-related capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=0.18, p ≤.05; [p=.013]).
H3e Personality characteristics of risk-taking propensity is positively associated with
the implementing finance-related capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=0.18, p ≤ .01, [p=.003]).
H4e: Entrepreneurial information overload is negatively associated with the
implementing finance-related capability dimension of entrepreneurial self efficacy.
This hypothesis was not supported (β=-.08, not significant [p=.056]).
6.5.6 Effects of personality characteristics and entrepreneurial information overload on the coping with unexpected challenges capability dimension of entrepreneurial self-efficacy (H1f, H2f, H3f, H4f)
Table 6.35 Testing of PC and EIO association with the coping with unexpected
challenges capability dimension of ESE Dependent Variable: Coping with unexpected challenges (Copch) Model Summary: R2 = .23, F = 21.38, p < .001 Standardised beta
coefficient Standard error
t p
constant 3.19*** .31 10.16 .000 EIO -.13* .04 -3.28 .001 PCnAch .15** .06 2.54 .011 PCLoC .16** .07 2.25 .025 PCRisk .20*** .06 3.52 .000
*** p ≤.000. ** p ≤.01. *p ≤.05
187
All the three personality characteristics (need for achievement (PCnAch: β=0.15, p
≤.05), locus of control (PCLoC: β=0.16, p ≤ .05) and risk-taking propensity (PCRisk:
β=0.20, p ≤ .000)) have been shown to have a direct and positive relationship to the
entrepreneur’s confidence level in coping with challenges. When the entrepreneur has a
high need for achievement, high locus of control and a high risk-taking propensity, they
feel confident in their ability to cope with any challenge that comes their way. However,
we see that there is a strong negative relationship between EIO and the ESE dimension
of coping with challenges (EIO: β=-.13, p ≤ 0.01). This is expected, since the
entrepreneur does have to seek information when trying to cope with challenges and
therefore feels the negative impact of information overload on their self-efficacy in
coping with the challenges. The relevant hypotheses and results are shown below:
H1f: Personality characteristics of need for achievement is positively associated with
the coping with challenges capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=0.15, p ≤ .05, [p=.011]).
H2f: Personality characteristics of locus of control is positively associated with the
coping with challenges capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=0.16, p ≤ .05, [p=.025]).
H3f: Personality characteristics of risk-taking propensity is positively associated with
the coping with challenges capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=0.20, p ≤ .000).
H4f: Entrepreneurial information overload is negatively associated with the coping with challenges capability dimension of entrepreneurial self efficacy.
This hypothesis was supported (β=-0.13, p ≤.01, [p=.001]).
188
6.5.7 Effects of entrepreneurial self-efficacy, entrepreneurial information overload and personality characteristics on the planning dimension of entrepreneurial behavioural activities. (H5a, H6a, H7a, H8a, H9a, H10a, H11a, H12a, H13a, H14a)
Table 6.36 Relationship between ESE, EIO and PC and the planning dimension of EBA
Dependent Variable: Planning (BhvPlg) Model Summary : R2 = .24, F = 22.38, p < .001 Standardised beta
coefficient Standard error
T p
constant 1.77** 0.53 3.35 .001 Search 0.16NS 0.09 1.65 .100 Plg -0.02 NS 0.08 -0.24 .814 Mrsh 0.11 NS 0.08 1.34 .182 Impple 0.17 NS 0.09 1.83 .067 Impfin 0.14 NS 0.07 1.93 .054 Copch -0.01 NS 0.08 -0.15 .883 EIO -0.08 NS 0.05 -1.65 .100 PCnAch 0.15* 0.06 2.47 .014 PCLoC 0.08 NS 0.07 1.09 .275 PCRisk -0.09 NS 0.07 -1.34 .182
** p ≤.01. *p ≤.05.
The table above shows the results of testing the association of all six dimensions of
entrepreneurial self-efficacy, entrepreneurial information overload, and the three
dimensions of personality characteristics on the planning variable of entrepreneurial
behavioural activities. As can be seen from the table, surprisingly, none of the items of
the entrepreneurial self-efficacy construct are associated with the planning dimension of
entrepreneurial behavioural activities. It was expected that the entrepreneurs’ self-
efficacy in searching, planning, marshalling, implementing people-related tasks,
implementing finance-related tasks and coping with unexpected challenges would be
related to the behavioural activity of planning, where the entrepreneur would formulate
objectives and decide on what to do to achieve those objectives. As hypothesised,
entrepreneurial information overload is also not associated with the planning dimension.
With regard to the personality characteristics, only one of the dimensions, namely need
for achievement, shows association with this dimension (PCnAch: β=0.15, p ≤.05). The
relevant hypotheses and results are shown below:
189
H5a: Entrepreneurial information overload is negatively associated with the planning
dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β=-0.09, not significant, [p = .182]).
H6a: Personality characteristics of need for achievement is positively associated with
the planning dimension of entrepreneurial behavioural activities.
This hypothesis was supported (β=0.15, p ≤ .05, [p=.014]).
H7a: Personality characteristics of locus of control is positively associated with the
planning dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β=0.08, not significant [p = .275]).
H8a: Personality characteristics of risk-taking propensity is positively associated with
the planning capability dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= -0.09, not significant, [p =.182]).
H9a: The entrepreneurial self-efficacy dimension of searching is positively associated
with the planning dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.16, not significant, [p =.100]).
H10a: The entrepreneurial self-efficacy dimension of planning is positively associated
with the planning dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β=- 0.02, not significant, [p =.814]).
H11a: The entrepreneurial self-efficacy dimension of marshalling is positively
associated with the planning dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.11, not significant, [p =.182]).
H12a: The entrepreneurial self-efficacy dimension of implementing people-related
capability is positively associated with the planning dimension of entrepreneurial
behavioural activities.
This hypothesis was not supported (β= 0.11, not significant, [p =.182]).
190
H13a: The entrepreneurial self-efficacy dimension of implementing finance-related
capability is positively associated with the planning dimension of entrepreneurial
behavioural activities.
This hypothesis was not supported (β= 0.14, not significant, [p =.067]).
H14a: The entrepreneurial self-efficacy dimension of coping with challenges is
positively associated with the planning dimension of entrepreneurial behavioural
activities.
This hypothesis was not supported (β= -0.01, not significant, [p =.883]).
6.5.8 Effects of entrepreneurial self-efficacy, entrepreneurial information overload and personality characteristics on the controlling dimension of entrepreneurial behavioural activities. (H5b, H6b, H7b, H8b, H9b, H10b, H11b, H12b, H13b, H14b)
Table 6.37 Relationship between ESE, EIO and PC and the controlling dimension of EBA
Dependent Variable: Controlling (BhvCom) Model Summary : R2 = .38, F = 25.18, p <.001 Standardised beta
coefficient Standard error
T p
constant 1.17** .40 2.90 .004 Search .03NS .06 .43 .666 Plg .09 NS .06 1.46 .145 Mrsh .00 NS .06 .02 .986 Impple .13* .06 1.98 .049 Impfin .32*** .06 5.22 .000 Copch .02 NS .07 .27 .785 EIO -.04 NS .04 -.87 .383 PCnAch .07 NS .05 1.30 .195 PCLoC .15* .07 2.24 .026 PCRisk -.01 NS .05 -.14 .885
*** p ≤.000. ** p ≤.01. *p ≤.05.
The table above shows the results of testing the association of all six dimensions of
entrepreneurial self-efficacy, entrepreneurial information overload and the three
dimensions of personality characteristics on the controlling variable of entrepreneurial
191
behavioural activities. As can be seen from the table, within the entrepreneurial self-
efficacy construct, two dimensions, implementing people related tasks (Impple: β=0.13,
p ≤ 0.05) and implementing finance related tasks (Impfin: β=0.32, p ≤ 0.000), are
positively associated with the controlling dimension of entrepreneurial behavioural
activities. Controlling is the process of monitoring the actual situation as well as the
performance in the firm and then ensuring that the desired results are achieved (Luthans
& Ibrayeva 2006, p.106). If the entrepreneurs’ self-efficacy in the implementing people
and finance related tasks is high, they will be able to undertake the controlling activity
very efficiently. Clearly, the findings in this study support this theory.
Among the personality characteristics, only one of the dimensions, namely internal
locus of control, shows a positive relationship with this dimension (PCLoC: β=0.15, p ≤
.05). The finding suggests that entrepreneurs with a high internal locus of control will
engage in controlling activities well. This is expected, because successful entrepreneurs
do believe that they have significant control over the outcomes of the firm (Brockhaus
1980a). These findings support Krueger’s (1993) identification of a close link between
an individual’s desire for control and the initiating and maintaining of goal-directed
behaviours. However, entrepreneurial information overload is not associated with the
controlling dimension. The relevant hypotheses and results are shown below:
H5b: Entrepreneurial information overload is negatively associated with the controlling
dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= -0.04, not significant, [p =.383]).
H6b: Personality characteristics of need for achievement are positively associated with
the controlling dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.07, not significant, [p =.195]).
H7b: Personality characteristics of locus of control is positively associated with the
controlling dimension of entrepreneurial behavioural activities.
This hypothesis was supported (β= 0.15, p≤ 0.05, [p =.026]).
192
H8b: Personality characteristics of risk-taking propensity is positively associated with
the controlling dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= -0.01, not significant [p =.885).
H9b: The entrepreneurial self-efficacy dimension of searching is positively associated
with the controlling dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.03, not significant [p=.666]).
H10b: The entrepreneurial self-efficacy dimension of planning is positively associated
with the controlling dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.09, not significant, [p =.145]).
H11b: The entrepreneurial self-efficacy dimension of marshalling is positively
associated with the controlling dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.00, not significant, [p =.986]).
H12b: The entrepreneurial self-efficacy dimension of implementing people-related
capability is positively associated with the controlling dimension of entrepreneurial
behavioural activities.
This hypothesis was supported (β= 0.13, p≤0.05, [p =.049]).
H13b: The entrepreneurial self-efficacy dimension of implementing finance is positively
associated with the controlling dimension of entrepreneurial behavioural activities.
This hypothesis was supported (β= 0.32, p ≤.000).
H14b:The eEntrepreneurial self-efficacy dimension of coping with unexpected
challenges is positively associated with the controlling dimension of entrepreneurial
behavioural activities.
This hypothesis was not supported (β= 0.02, not significant, [p =.785]).
193
6.5.9 Effects of entrepreneurial self-efficacy, entrepreneurial information overload and personality characteristics on the internal communication dimension of entrepreneurial behavioural activities. (H5c, H6c, H7c, H8c, H9c, H10c, H11c, H12c, H13c, H14c)
Table 6.38 Relationship between ESE, EIO and PC and the internal communication dimension of EBA
Dependent Variable: Internal Communication (BhvCom) Model Summary: R2 = .38, F = 25.40, p < .001 Standardised beta
coefficient Standard error
T p
constant 1.62*** .38 4.21 .000 Search .04NS .05 .84 .403 Plg .07 NS .05 1.29 .200 Mrsh .03 NS .06 .58 .565 Impple .30*** .06 4.98 .000 Impfin .08 NS .06 1.39 .167 Copch .05 NS .06 .84 .403 EIO -.08* .04 -1.95 .050 PCnAch .04 NS .05 .79 .432 PCLoC .11 NS .07 1.62 .106 PCRisk .05 NS .05 1.02 .309
*** p ≤.000. *p ≤.05
Table 6.38 above shows the results of testing the association of all six dimensions of
entrepreneurial self-efficacy, entrepreneurial information overload and the three
personality characteristics dimensions on the internal communication dimension of
entrepreneurial behavioural activities. As can be seen from the table, in the
entrepreneurial self-efficacy construct, the dimension implementing people related tasks
(Impple: β=0.30, p ≤ .000) is positively associated with the communication dimension
of entrepreneurial behavioural activities. Communication includes sending and
receiving information, and if the entrepreneur has a high level of self-efficacy in his or
her ability to deal with people (implementing people related task dimension), it can be
expected that they also engage in activities related to internal communication
effectively.
194
The results also show that entrepreneurial information overload is negatively impacting
on the entrepreneur’s ability to engage in sending and receiving information (EIO: β=-
0.08, p ≤ .050). Among the personality characteristics, none of the dimensions showed
any association with the behavioural activity of internal communication. The relevant
hypotheses and results are shown below:
H5c: Entrepreneurial information overload is negatively associated with the internal
communication dimension of entrepreneurial behavioural activities.
This hypothesis was supported (β= -0.08, p ≤ .050).
H6c: Personality characteristics of need for achievement is positively associated with
the internal communication dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.04, not significant, [p =.432]).
H7c: Personality characteristics of locus of control is positively associated with the
internal communication dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.11, not significant, [p =.106]).
H8c: Personality characteristics of risk-taking propensity is positively associated with
the internal communication dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.05, not significant, [p =.309]).
H9c: The entrepreneurial self-efficacy dimension of searching is positively associated
with the internal communication dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.04, not significant, p =.403).
H10c: The entrepreneurial self-efficacy dimension of planning is positively associated
with the internal communication dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.07, not significant, [p =.200]).
H11c: The entrepreneurial self-efficacy dimension of marshalling is positively
associated with the internal communication dimension of entrepreneurial behavioural
activities.
195
This hypothesis was not supported (β= 0.03, not significant, [p =.565]).
H12c: The entrepreneurial self-efficacy dimension of implementing people-related
capability is positively associated with the internal communication dimension of
entrepreneurial behavioural activities.
This hypothesis was supported (β= 0.30, p ≤.000).
H13c: The entrepreneurial self-efficacy dimension implementing finance-related
capability is positively associated with the internal communication dimension of
entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.08, not significant, [p =.167]).
H14c: The entrepreneurial self-efficacy dimension of coping with unexpected
challenges is positively associated with the internal communication dimension of
entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.05, not significant, p =.403).
6.5.10 Effects of entrepreneurial self-efficacy, entrepreneurial information overload and personality characteristics on the human resources management dimension of entrepreneurial behavioural activities. (H5d, H6d, H7d, H8d, H9d, H10d, H11d, H12d, H13d, H14d)
Table 6.39 Relationship between ESE, EIO and PC and the human resources management dimension of EBA
Dependent Variable: Human Resources Management (BhvHRM) Model Summary : R2 = .41, F = 26.06, p <.001 Standardised beta
Coefficient Standard error
T p
constant 1.02 ** .37 2.76 .006 Search .07NS .06 1.23 .219 Plg .08 NS .06 1.42 .156 Mrsh -.10 NS .06 -1.73 .084 Impple .39*** .06 6.58 .000 Impfin .04 NS .06 .65 .517 Copch .14* .06 2.54 .012 EIO -.01 NS .04 -.35 .726 PCnAch .06 NS .05 1.16 .248 PCLoC .08 NS .06 1.39 .164 PCRisk .04 NS .04 .85 .397
196
*** p ≤.000. ** p ≤.01. *p ≤.05.
The association of all six dimensions of entrepreneurial self-efficacy, entrepreneurial
information overload and the three personality characteristics dimensions on the human
resources management dimension of entrepreneurial behavioural activities was also
tested. As can be seen from Table 6.39, in the entrepreneurial self-efficacy construct,
there is a significant positive association between the dimensions of implementing
people-related tasks (Impple: β=0.39, p ≤ 0.000) and coping with unexpected challenges
(Copch: β=0.14, p ≤ 0.05) with the human resources management dimension of
entrepreneurial behavioural activities. This is an expected outcome. Entrepreneurs who
have a high self-efficacy in their ability to recruit, supervise, inspire and train
employees, as well as deal with problems faced by employees, will obviously be able to
engage very well in the activities relating to human resources management.
However, the results show no association between entrepreneurial information overload
and the human resource management dimension. Personality characteristics such as
need for achievement, internal locus of control and risk-taking propensity are also not
related to the human resources management of entrepreneurial behavioural activities.
The relevant hypotheses and results are shown below:
H5d: Entrepreneurial information overload is negatively associated with the human
resources management dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= -0.01, not significant, [p =.726]).
H6d: Personality characteristics of need for achievement is positively associated with
the human resources management dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.06, not significant, [p =.248]).
H7d: Personality characteristics of locus of control is positively associated with the
human resources management dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.08, not significant, [p =.164]).
H8d: Personality characteristics of risk-taking propensity is positively associated with
the human resources management dimension of entrepreneurial behavioural activities.
197
This hypothesis was not supported (β= 0.04, not significant, [p =.397]).
H9d: The entrepreneurial self-efficacy dimension of searching is positively associated
with the human resources management dimension of entrepreneurial behavioural
activities.
This hypothesis was not supported (β= 0.07, not significant, [p =.219]).
H10d: The entrepreneurial self-efficacy dimension of planning is positively associated
with the human resources management dimension of entrepreneurial behavioural
activities.
This hypothesis was not supported (β= 0.08, not significant, [p =.156]).
H11d: The entrepreneurial self-efficacy dimension of marshalling is positively
associated with the human resources management dimension of entrepreneurial
behavioural activities.
This hypothesis was not supported (β= -0.10, not significant, [p =.084]).
H12d: The entrepreneurial self-efficacy dimension of implementing people-related
capability is positively associated with the human resources management dimension of
entrepreneurial behavioural activities.
This hypothesis was supported (β= 0.39, p ≤ .000).
H13d: The entrepreneurial self-efficacy dimension of implementing finance-related
capability is positively associated with the human resources management dimension of
entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.04, p not significant, [p =.517]).
H14d: The entrepreneurial self-efficacy dimension coping with unexpected challenges is
positively associated with the human resources management dimension of
entrepreneurial behavioural activities.
This hypothesis was supported (β= 0.14, p≤.05, [p =.012]).
198
6.5.11 Effects of entrepreneurial self-efficacy, entrepreneurial information overload and personality characteristics on the work-related tasks dimension of entrepreneurial behavioural activities. (H5e, H6e, H7e, H8e, H9e, H10e, H11e, H12e, H13e, H14e)
Table 6.40 Relationship between ESE, EIO and PC and the work-related tasks dimension of EBA
Dependent Variable: Work Related Tasks (BhvTas) Model Summary : R2 = .40, F = 27.72, p < .001 Standardised beta
Coefficient Standard error
T p
constant 1.68*** .38 4.42 .000 Search .12* .06 1.96 .050 Plg .01 NS .06 .12 .902 Mrsh .05 NS .06 .83 .408 Impple .18* .07 2.52 .012 Impfin .26*** .06 4.12 .000 Copch -.03 NS .07 -.37 .712 EIO -.11** .04 -2.76 .006 PCnAch .04 NS .05 .77 .444 PCLoC -.01 NS .06 -.16 .869 PCRisk .15** .05 2.94 .004
*** p ≤.000. ** p ≤.01. *p ≤.05
The association of all six dimensions of entrepreneurial self-efficacy, entrepreneurial
information overload and the three personality characteristics dimensions with the
entrepreneurs performing activities that are of central concern to the business itself
(work-related tasks) was tested. Table 6.40 presents the results of these tests.
As seen in Table 6.40, three dimensions of entrepreneurial self-efficacy, namely
searching (search: β=0.12, p ≤ .05), implementing people-related tasks(Impple: β=0.18,
p ≤ .05), and implementing finance-related tasks (Impfin: β=0.26, p ≤ .000) have a
positive association with work-related tasks. The personality characteristic of risk-
taking propensity is also positively related to work-related tasks. Entrepreneurial
information overload is negatively associated with work-related tasks ((EIO: β=-0.11, p
≤ 0.01). The entrepreneurial self-efficacy dimensions of planning, marshalling, coping
199
with unexpected challenges and the personality characteristics of need for achievement
and locus of control are not associated with the work-related tasks. The relevant
hypotheses and results are shown below:
H5e: Entrepreneurial information overload is negatively associated with the work-
related tasks dimension of entrepreneurial behavioural activities.
This hypothesis was supported (β= 0.39, p ≤.01, [p=.006]).
H6e: Personality characteristics of need for achievement is positively associated with
the work-related tasks dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.04, not significant, [p =.444]).
H7e: Personality characteristics of locus of control is positively associated with the
work-related tasks dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β=- 0.01, not significant, [p =.869]).
H8e: Personality characteristics of risk-taking propensity is positively associated with
the work-related tasks dimension of entrepreneurial behavioural activities.
This hypothesis was supported (β= 0.15, p ≤ .01, [p =.004]).
H9e: The entrepreneurial self-efficacy dimension of searching is positively associated
with the work-related task dimension of entrepreneurial behavioural activities.
This hypothesis was supported (β= 0.12, p≤.050).
H10e: The entrepreneurial self-efficacy dimension of planning is positively associated
with the work-related task dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.01, not significant [p =.902]).
H11e: The entrepreneurial self-efficacy dimension of marshalling is positively
associated with the work-related task dimension of entrepreneurial behavioural
activities.
This hypothesis was not supported (β= 0.05, not significant, [p =.408]).
200
H12e: The entrepreneurial self-efficacy dimension of implementing people-related
capability is positively associated with the work-related task dimension of
entrepreneurial behavioural activities.
This hypothesis was supported (β= 0.18, p≤.05).
H13e: The entrepreneurial self-efficacy dimension of implementing finance-related
capability is positively associaedn with the work-related task dimension of
entrepreneurial behavioural activities.
This hypothesis was supported (β= 0.26, p ≤ .000).
H14e: The entrepreneurial self-efficacy dimension of coping with unexpected
challenges is positively associated with the work-related task dimension of
entrepreneurial behavioural activities.
This hypothesis was not supported (β=- 0.03, not significant, [p =.712]).
6.5.12 Testing the effects of entrepreneurial self-efficacy, entrepreneurial information overload and personality characteristics on the customer service dimension of entrepreneurial behavioural activities. (H5f, H6f, H7f, H8f, H9f, H10f, H11f, H12f, H13f, H14f)
Table 6.41 Relationship between ESE, EIO and PC and the customer service dimension of EBA
Dependent Variable: Customer Service (BhvSer) Model Summary : R2 = .36, F = 26.66, p < .001 Standardised beta
Coefficient Standard error
T p
constant 1.39*** .40 3.52 .000 Search .05NS .06 .83 .410 Plg -.03 NS .07 -.41 .681 Mrsh .02 NS .06 .28 .776 Impple .35*** .08 4.60 .000 Impfin .14* .07 2.02 .044 Copch .01 NS .07 .19 .848 EIO -.05 NS .04 -1.12 .264 PCnAch .13* .06 2.11 .035 PCLoC .02 NS .07 .32 .750 PCRisk .09 NS .05 1.72 .086
*** p ≤.000. *p ≤.05.
201
The association of all six dimensions of entrepreneurial self-efficacy, entrepreneurial
information overload and the three personality characteristics dimensions with the
customer service dimension of entrepreneurial behavioural activity was tested. Table
6.41 presents the results of these tests.
Of the six dimensions of entrepreneurial self-efficacy, two dimensions, i.e.,
implementing people-related tasks (Impple: β= 0.35, p ≤.000) and implementing
finance-related tasks (Impfin: β= 0.14, p ≤.05), have a positive association with the
customer service dimension of entrepreneurial behavioural activities. The other
entrepreneurial self-efficacy dimensions such as searching, planning, marshalling and
coping with unexpected challenges do not show any association with the customer
service dimension. Entrepreneurial information overload is also not associated with
customer service. Among the personality characteristics, only need for achievement
(PCnAch: β= 0.13, p ≤ .05) is positively associated with customer service, while
internal locus of control and risk-taking propensity are not. The relevant hypotheses
and results are shown below:
H5f: Entrepreneurial information overload is negatively associated with the customer service dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= -0.05, not significant, [p =.264]).
H6f: Personality characteristics of need for achievement is positively associated with the customer service dimension of entrepreneurial behavioural activities.
This hypothesis was supported (β= 0.13, p≤ .05, [p =.035]).
H7f: Personality characteristics of locus of control is positively associated with the customer service dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.02, not significant, [p =.750]).
H8f: Personality characteristics of risk-taking propensity is positively associated with the customer service dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.09, not significant, [p =.086]).
202
H9f: The entrepreneurial self-efficacy dimension of searching is positively associated with the customer service dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.05, not significant, [p =.410]).
H10f: The entrepreneurial self-efficacy dimension of planning is positively associated with the customer service dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.05, not significant, [p =.681]).
H11f: The entrepreneurial self-efficacy dimension of marshalling is positively associated with the customer service dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.02, not significant, [p =.776]).
H12f: The entrepreneurial self-efficacy dimension of implementing people-related capability is positively associated with the customer service dimension of entrepreneurial behavioural activities.
This hypothesis was supported (β= 0.35, p ≤.000).
H13f: The entrepreneurial self-efficacy dimension implementing finance-related capability is positively associated with the customer service dimension of entrepreneurial behavioural activities.
This hypothesis was supported (β= 0.14, p ≤ .05, [p =.044]).
H14f: The entrepreneurial self-efficacy dimension of coping with unexxpected challenges is positively associated with the customer service dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.01, not significant, [p =.848]).
203
6.5.13 Testing the effects of entrepreneurial self-efficacy, entrepreneurial information overload and personality characteristics on the socialising dimension of entrepreneurial behavioural activities. (H5g, H6g, H7g, H8g, H9g, H10g, H11g, H12g, H13g, H14g)
Table 6.42 Relationship between ESE, EIO and PC and the socialising dimension of EBA Dependent Variable: Socialising (BhvSoc) Model Summary : R2 = .05, F = 13.27, p < .001 Standardised beta
Coefficient Standard error T p
constant 1.42** .42 3.35 .001 Search -.01NS .07 -.17 .868 Plg .07 NS .09 .80 .423 Mrsh .11 NS .09 1.31 .192 Impple .15 NS .09 1.71 .088 Impfin .10 NS .08 1.29 .198 Copch .06 NS .07 .89 .386 EIO -.01 NS .05 -.14 .891 PCnAch .03 NS .07 .44 .660 PCLoC .18* .08 2.24 .026 PCRisk .03 NS .07 .41 .681
** p ≤.01. *p ≤.05.
The association of entrepreneurial self-efficacy, personality characteristics and
entrepreneurial information overload with the socialising dimension of entrepreneurial
behavioural activities was tested. Socialising includes networking and communicating
with outside parties. Interestingly, none of the dimensions of entrepreneurial self-
efficacy had an impact on the entrepreneurial behavioural activity of socialising. The
results also show that entrepreneurial information overload likewise has no effect on the
socialising activity. Only one personality characteristic, internal locus of control, (β=
0.18, p ≤. 05) has a significant positive relationship to the socialising activity, while the
other two characteristics, need for achievement and risk-taking propensity, had no
relationship. The relevant hypotheses and results are shown below:
H5g: Entrepreneurial information overload is negatively associated with the socialising
dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β=- 0.01, not significant, [p =.891]).
204
H6g: Personality characteristic of need for achievement is positively associated with
the socialising dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.03, not significant, [p =.660]).
H7g: Personality characteristic of locus of control is positively associated with the
socialising dimension of entrepreneurial behavioural activities.
This hypothesis was supported (β= 0.18, p ≤ .05, [p=.026]).
H8g: Personality characteristic of risk-taking propensity is positively associated with
the socialising dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.03, not significant [p =.681]).
H9g: The entrepreneurial self-efficacy dimension of searching is positively associated
with the socialising dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= -0.01, not significant [p =.868]).
H10g: The entrepreneurial self-efficacy dimension of planning is positively associated
with the socialising dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.07, not significant [p =.423]).
H11g: The entrepreneurial self-efficacy dimension of marshalling is positively
associated with the socialising dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.11, not significant [p =.192]).
H12g: The entrepreneurial self-efficacy dimension of implementing people-related
capability is positively associated with the socialising dimension of entrepreneurial
behavioural activities.
This hypothesis was not supported (β= 0.15, not significant [p =.088]).
H13g: The entrepreneurial self-efficacy dimension of implementing finance-related
capability is positively associated with the socialising dimension of entrepreneurial
behavioural activities.
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This hypothesis was not supported (β= 0.10, not significant [p =.198]).
H14g: The entrepreneurial self-efficacy dimension of coping with unexpected
challenges is positively associated with the socialising dimension of entrepreneurial
behavioural activities.
This hypothesis was not supported (β= 0.10, not significant, p =.198).
6.5.14 Testing the effects of entrepreneurial self-efficacy, entrepreneurial information overload and personality characteristics on the politicking dimension of entrepreneurial behavioural activities. (H5h, H6h, H7h, H8h, H9h, H10h, H11h, H12h, H13h, H14h)
Table 6.43 Relationship between ESE, EIO and PC and the politicking dimension
of EBA Dependent Variable: Politicking (BhvPol) Model Summary : R2 = .19, F = 7.24, p < .001 Standardised beta
Coefficient Standard error
t p
constant .43NS .64 .67 .501 Search .08 NS .11 .72 .475 Plg .14 NS .11 1.20 .233 Mrsh .06 NS .11 .52 .602 Impple -.09 NS .14 -.62 .539 Impfin .20 NS .12 1.61 .108 Copch .09 NS .12 .79 .433 EIO .14 NS .07 1.96 .051 PCnAch -.23* .09 -2.57 .011 PCLoC .36** .13 2.82 .005 PCRisk .14 NS .10 1.37 .172
** p ≤.01. *p ≤.05
The association of all six dimensions of entrepreneurial self-efficacy, entrepreneurial
information overload and the three personality characteristics dimensions with the
entrepreneurial behavioural activity of politicking was tested. Table 6.43 presents the
results of these tests. None of the entrepreneurial self-efficacy dimensions had any
association with the politicking activities that the entrepreneur engages in. However,
contrary to the hypothesis, entrepreneurial information overload was positively related
to the politicking activities (EIO: β= 0.14, p=.051) and therefore the hypothesis was not
206
supported. Two of the personality characteristic dimensions were also found to be
associated with the politicking dimension. Interestingly, need for achievement
(PCnAch: β= -0.23, p ≤.05) was negatively associated and locus of control (PCLoC: β=
0.36, p ≤. 01) was positively associated. The relevant hypotheses and results are shown
below:
H5h: Entrepreneurial information overload is negatively associated with the politicking
dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.14, not significant, [p =.051]).
H6h: Personality characteristic of need for achievement is positively associated with
the politicking dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= -0.23., p ≤.050 [p=.011]). A significant and
negative beta value confirms the relationship in the opposite way.
H7h: Personality characteristic of locus of control is positively associated with the
politicking dimension of entrepreneurial behavioural activities.
This hypothesis was supported (β= 0.36, p≤.01, [p =.005]).
H8h: Personality characteristic of risk-taking propensity is positively associated with
the politicking dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.14, not significant, [p =.172]).
H9h: The entrepreneurial self-efficacy dimension of searching is positively associated
with the politicking dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.08, not significant, [p =.475]).
H10h: The entrepreneurial self-efficacy dimension of planning is positively associated
with the politicking dimension of entrepreneurial behavioural activities.
This hypothesis was not supported (β= 0.14, not significant, [p =.233]).
H11h: The entrepreneurial self-efficacy dimension of marshalling is positively
associated with the politicking dimension of entrepreneurial behavioural activities.
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This hypothesis was not supported (β= 0.06, not significant, [p =.602]).
H12h: The entrepreneurial self-efficacy dimension of implementing people-related
capability is positively associated with the politicking dimension of entrepreneurial
behavioural activities.
This hypothesis was not supported (β=-0.09, not significant, [p =.539]).
H13h: The entrepreneurial self-efficacy dimension of implementing finance-related
capability is positively associated with the politicking dimension of entrepreneurial
behavioural activities.
This hypothesis was not supported (β= 0.20, not significant, [p =.108]).
H14h: The entrepreneurial self-efficacy dimension of coping with unexpected
challenges is positively associated with the politicking dimension of entrepreneurial
behavioural activities.
This hypothesis was not supported (β= 0.09, not significant, [p =.433]).
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6.5.15 Summary of findings for hypotheses tested Table 6.44 Summary findings for dependent variable: Entrepreneurial self-efficacy Entrepreneurial self-efficacy (ESE dimensions) a=searching (Search); b=planning (Plg); c=marshalling (Mrsh); d=implementing people (Impple); e=implementing finance (Impfin); f=coping with unexpected challenges (Copch) Personality characteristics (PC) 1= need for achievement (PCnAch) 2=internal locus of control (PCLoC); 3=risk-taking propensity Entrepreneurial information overload (EIO) 4= entrepreneurial information overload (EIO) Hypothesis Relationship
tested between Standardised Beta Coefficient
Std. Error
p value Results
Relationship between PCnAch and ESE dimensions H1a PCnAch –
Search .35 .04 .000 Supported
H1b PCnAch – Plg .16 .06 .010 Supported H1c PCnAch – Mrsh .14 .06 .020 Supported H1d PCnAch –
Impple .21 .06 .000 Supported
H1e PCnAch – Impfin
.15 .07 .027 Supported
H1f PCnAch – Copch .15 .06 .011 Supported Relationship between PCLoC and ESE dimensions
H2a PCLoC – Search .11 .06 .154 Not supported H2b PCLoC – Plg .10 .08 .177 Not supported H2c PCLoC – Mrsh .12 .07 .142 Not supported H2d PCLoC – Impple .12 .06 .046 Supported H2e PCLoC – Impfin .18 .07 .013 Supported H2f PCLoC – Copch .16 .07 .025 Supported
Relationship between PCRisk and ESE dimensions H3a PCRisk – Search .18 .06 .002 Supported H3b PCRisk – Plg .21 .06 .000 Supported H3c PCRisk – Mrsh .22 .06 .000 Supported H3d PCRisk – Impple .13 .05 .009 Supported H3e PCRisk – Impfin .18 .06 .003 Supported H3f PCRisk – Copch .20 .06 .000 Supported
Relationship between EIO and ESE dimensions H4a EIO – Search -.10 .04 .013 Supported H4b EIO – Plg -.05 .05 .290 Not supported H4c EIO – Mrsh -.11 .05 .018 Supported H4d EIO – Impple -.09 .04 .029 Supported H4e EIO – Impfin -.08 .04 .056 Not supported H4f EIO – Copch -.13 .04 .001 Supported
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Table 6.45 Summary findings for dependent variable: Entrepreneurial behavioural activities (Part A)
Entrepreneurial self-efficacy (ESE dimensions) 9 = searching (Search); 10=planning (Plg); 11=marshalling (Mrsh); 12=implementing people (Impple); 13=implementing finance (Impfin); 14=coping with unexpected challenges (Copch) Personality characteristics (PC) 6= need for achievement (PCnAch); 7=internal locus of control (PCLoC); 8=risk-taking propensity Entrepreneurial information overload (EIO) 5= entrepreneurial information overload (EIO) Entrepreneurial behavioural activities (EBA) a=planning (BehPlg); b=controlling (BehCon); c=internal communication (BehCom); d=human resources management (BehHRM); e=work-related tasks (BehTas); f=customer services (BehSer); g=socialising (BehSoc); h=politicking (BehPol) Hypothesis Relationship tested
between Standardised Beta Coefficient
Std. Error
p value Results
Relationship between EIO and EBA H5a EIO – BehPlg -0.08 0.05 .100 Not supported H5b EIO – BehCon -0.04 0.04 .383 Not supported H5c EIO – BehCom -0.08 0.04 .050 Supported H5d EIO – BehHRM -0.01 0.04 .726 Not supported H5e EIO – BehTas -0.11 0.04 .006 Supported H5f EIO – BehSer -0.05 0.04 .264 Not supported H5g EIO – BehSoc -0.01 0.05 .891 Not supported H5h EIO – BehPol 0.14 .07 .051 Not Supported
Relationship between PCnAch and EBA H6a PCnAch - BehPlg 0.15 0.06 .014 Supported H6b PCnAch - BehCon 0.07 0.05 .195 Not supported H6c PCnAch - BehCom 0.04 0.05 .432 Not supported H6d PCnAch- BehHRM 0.06 0.05 .248 Not supported H6e PCnAch - BehTas 0.04 0.05 .444 Not supported H6f PCnAch - BehSer 0.13 0.06 .035 Supported H6g PCnAch - BehSoc 0.03 0.07 .660 Not supported H6h PCnAch - BehPol -0.23 0.09 .011 Not supported
Relationship between PCLoC and EBA H7a PCLoC - BehPlg 0.08 0.07 .275 Not supported H7b PCLoC - BehCon 0.15 0.07 .026 Supported H7c PCLoC - BehCom 0.11 0.07 .106 Not supported H7d PCLoC - BehHRM 0.08 0.06 .164 Not supported H7e PCLoC - BehTas -0.01 0.06 .869 Not supported H7f PCLoC - BehSer 0.02 0.07 .750 Not supported H7g PCLoC - BehSoc 0.18 0.08 .026 Supported H7h PCLoC - BehPol 0.36 0.13 .005 Supported
Relationship between PCRisk and EBA H8a PCRisk - BehPlg -0.09 0.07 .182 Not supported H8b PCRisk - BehCon -0.01 .05 .885 Not supported H8c PCRisk - BehCom 0.05 0.05 .309 Not supported H8d PCRisk - BehHRM 0.04 0.04 .397 Not supported H8e PCRisk - BehTas 0.15 0.05 .004 Supported H8f PCRisk - BehSer 0.09 0.05 .086 Not supported H8g PCRisk - BehSoc 0.03 0.07 .681 Not supported H8h PCRisk - BehPol 0.14 0.10 .172 Not supported
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Table 6.45 Summary findings for dependent variable: Entrepreneurial behavioural activities (Part B)
Entrepreneurial self-efficacy (ESE dimensions) 9 = searching (Search); 10=planning (Plg); 11=marshalling (Mrsh); 12=implementing people (Impple); 13=implementing finance (Impfin); 14=coping with unexpected challenges (Copch) Personality characteristics (PC) 6= need for achievement (PCnAch); 7=internal locus of control (PCLoC); 8=risk-taking propensity Entrepreneurial information overload (EIO) 5= entrepreneurial information overload (EIO) Entrepreneurial behavioural activities (EBA) a=planning (BehPlg); b=controlling (BehCon); c=internal communication (BehCom); d=human resources management (BehHRM); e=work-related tasks (BehTas); f=customer services (BehSer); g=socialising (BehSoc); h=politicking (BehPol) Hypothesis Relationship tested
between Standardised Beta Coefficient
Std. Error
p value Results
Relationship between searching dimension of ESE and EBA H9a Search – BehPlg 0.16 0.09 .100 Not supported H9b Search - BehCon 0.03 0.06 .666 Not supported H9c Search - BehCom 0.04 0.05 .403 Not supported H9d Search - BehHRM 0.07 0.06 .219 Not supported H9e Search - BehTas 0.12 0.06 .050 Supported H9f Search - BehSer 0.05 0.06 .410 Not supported H9g Search - BehSoc -0.01 0.07 .868 Not supported H9h Search - BehPol 0.08 0.11 .475 Not supported
Relationship between planning dimension of ESE and EBA H10a Plg – BehPlg -0.02 0.08 .814 Not supported H10b Plg – BehCon 0.09 0.06 .145 Not supported H10c Plg – BehCom 0.07 0.05 .200 Not supported H10d Plg – BehHRM 0.08 0.06 .156 Not supported H10e Plg – BehTas 0.01 0.06 .902 Not supported H10f Plg – BehSer -0.03 0.07 .681 Not supported H10g Plg – BehSoc 0.07 0.09 .423 Not supported H10h Plg – BehPol 0.14 0.11 .233 Not supported
Relationship between marshalling dimension of ESE and EBA H11a Mrsh – BehPlg 0.11 0.08 .182 Not supported H11b Mrsh – BehCon 0.00 0.06 .986 Not supported H11c Mrsh – BehCom 0.03 0.06 .565 Not supported H11d Mrsh - BehHRM -0.10 0.06 .084 Not supported H11e Mrsh – BehTas 0.05 0.06 .408 Not supported H11f Mrsh – BehSer 0.02 0.06 .776 Not supported H11g Mrsh – BehSoc 0.11 0.09 .088 Not supported H11h Mrsh – BehPol 0.06 0.11 .602 Not supported
Relationship between implementing people dimension of ESE and EBA H12a Impple - BehPlg 0.17 0.09 .067 Not supported H12b Impple - BehCon 0.13 0.06 .049 Supported H12c Impple - BehCom 0.30 0.06 .000 Supported H12d Impple - BehHRM 0.39 0.06 .000 Supported H12e Impple - BehTas 0.18 0.07 .012 Supported H12f Impple - BehSer 0.35 0.08 .000 Supported H12g Impple - BehSoc 0.15 0.09 .088 Not supported H12h Impple - BehPol -0.09 0.14 .539 Not supported
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Table 6.45 Summary findings for dependent variable: Entrepreneurial behavioural activities (Part C)
Entrepreneurial self-efficacy (ESE dimensions) 9 = searching (Search); 10=planning (Plg); 11=marshalling (Mrsh); 12=implementing people (Impple); 13=implementing finance (Impfin); 14=coping with unexpected challenges (Copch) Personality characteristics (PC) 6= need for achievement (PCnAch); 7=internal locus of control (PCLoC); 8=risk-taking propensity Entrepreneurial information overload (EIO) 5= entrepreneurial information overload (EIO) Entrepreneurial behavioural activities (EBA) a=planning (BehPlg); b=controlling (BehCon); c=internal communication (BehCom); d=human resources management (BehHRM); e=work-related tasks (BehTas); f=customer services (BehSer); g=socialising (BehSoc); h=politicking (BehPol)
Relationship between implementing finance dimension of ESE and EBA H13a Impfin - BehPlg 0.14 0.07 .054 Not supported H13b Impfin - BehCon 0.32 0.06 .000 Supported H13c Impfin - BehCom 0.08 0.06 .167 Not supported H13d Impfin - BehHRM 0.04 0.06 .517 Not supported H13e Impfin - BehTas 0.26 0.06 .000 Supported H13f Impfin - BehSer 0.14 0.07 .044 Supported H13g Impfin - BehSoc 0.10 0.08 .198 Not supported H13h Impfin - BehPol 0.20 0.12 .108 Not supported
Relationship between coping with unexpected challenges dimension of ESE and EBA H14a Copch - BehPlg -0.01 0.08 .883 Not supported H14b Copch - BehCon 0.02 0.07 .785 Not supported H14c Copch - BehCom 0.05 0.06 .403 Not supported H14d Copch - BehHRM 0.14 0.06 .012 Supported H14e Copch - BehTas -0.03 0.07 .712 Not supported H14f Copch - BehSer 0.01 0.07 .848 Not supported H14g Copch - BehSoc 0.06 0.07 .386 Not supported H14h Copch - BehPol 0.09 0.12 .433 Not supported
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6.6 Discussion
The present study offers new insights into the various associations between the
variables identified in the conceptual framework proposed in my study. These
relationships are between: (i) personality characteristics and the various dimensions of
entrepreneurial self-efficacy, (ii) personality characteristics and the various dimensions
of entrepreneurial behavioural activities, and (iii) dimensions of self-efficacy and
entrepreneurial behavioural activities. The study also examined the impact of
entrepreneurial information overload on the various dimensions of the entrepreneurs’
self-efficacy, as well as on the behavioural activities they undertake. While some of
these relationships have been mostly studied in the developed countries, relatively fewer
studies were conducted in emerging economies (e.g., Ahmad 2004). The sample for my
study was drawn from India, which is a large emerging economy. Even in India,
research is relatively limited, but it appears that this field is finally receiving some
serious attention by researchers, given the spurt in studies recently as explained in
Chapter 3. Having approximately 36 million micro-, small and medium enterprises
which provide employment for more than 80 million people (Government of India,
2013), India provides a unique context for studying entrepreneurship. According to
Stewart, May and Kalia (2008), Indian entrepreneurs operate in a challenging
environment which is a “complex combination of culture and operating circumstances”
(p. 7). In a recent piece of research, Krishnan’s (2013) study of entrepreneurs in India
shows that entrepreneurial success is impacted by their personality characteristics and
competencies. My study shows how personality factors are linked to entrepreneurial
self-efficacy dimensions and also other variables. In this section, I discuss the results
from my study.
6.6.1 Relationship between personality characteristics and entrepreneurial self-
efficacy
In relation to the impact of personality characteristics such as need for achievement,
internal locus of control and risk-taking propensity on entrepreneurial self-efficacy, it is
found that need for achievement and risk-taking have a positive relationship with every
dimension of entrepreneurial self-efficacy (searching, planning, marshalling,
implementing people-related tasks, implementing finance-related tasks and coping with
unexpected challenges). As mentioned earlier in Chapter 4, this is the first time ESE
213
was empirically tested for the effect of each dimension in the case of practicing
entrepreneurs. There was positive association between internal locus of control and
three dimensions of entrepreneurial self-efficacy, namely implementing-people-related
tasks, implementing-finance tasks and coping with unexpected challenges. These
results have demonstrated that overall, personality characteristics of Indian
entrepreneurs do have an impact on their entrepreneurial self-efficacy. This is in line
with previous studies done in other countries where personality characteristics have
been found to affect self-efficacy (Bandura 1986; Phillips & Gully 1997; Zhao, Seibert
& Hills 2005). In the Indian context, the results show that most of the entrepreneurs
possess these personality characteristics, and their importance is reiterated.
6.6.1.1 Personality characteristic of need for achievement and entrepreneurial self-
efficacy
In regard to the association of the need for achievement and entrepreneurial self-
efficacy, the results are as expected. For instance, Hansemark (2003) remarks that
individuals with a higher need for achievement feel that they should do something better
than others or even their own personal accomplishment. These individuals will
therefore take personal responsibility and find solutions to challenges and problems.
Their willingness to do so can be linked to their confidence in their ability to undertake
that responsibility. In previous studies, it is seen that there is a positive relationship
between achievement motivation and entrepreneurship (Johnson 1990), and more
entrepreneurs have a higher need for achievement than non-entrepreneurs (McClelland
1965; Langan-Fox & Roth 1995; Stewart & Roth 2007). It is also known that people
who have self-efficacy are the ones who will successfully perform the entrepreneurial
roles (Chen, Greene & Crick 1998). Building on these two lines of theory, we can infer
that individuals who are undertaking entrepreneurial roles are mainly the ones with a
higher need for achievement and a higher entrepreneurial self-efficacy. Thus it is not
surprising to note that the results from my study indicate a positive relationship between
entrepreneurs who had a higher need for achievement and all the dimensions of their
entrepreneurial self-efficacy.
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6.6.1.2 Personality characteristic of internal locus of control and entrepreneurial self-
efficacy dimensions
With regard to entrepreneurs who have a high internal locus of control, it is seen that
they have more confidence in their capabilities in three of the six dimensions of self-
efficacy. Past studies have shown a convergence between general self-efficacy and
internal-external locus of control (Sherer et al. 1982) and between specific self-efficacy
measures and general locus of control (Chen, Greene & Crick 1998). As also pointed
out by Phillips and Gully (1997), the perception of being able to control an event has a
positive effect on self-efficacy. However, locus of control is a generalised construct,
while self-efficacy refers to an individual’s conviction of his/her ability to perform a
more specific task in a given situation (Boyd & Voziki 1998; Gist 1987). Therefore,
Chen, Greene and Crick (1998) and Wilson, Kickul and Marlino (2007) believe that an
individual could have a strong internal locus of control covering a variety of situations,
but have low self-efficacy in undertaking certain tasks. In line with this argument, the
results of this study show that entrepreneurs who had a high internal locus of control
perceived a higher level of confidence in the entrepreneurial self-efficacy dimensions of
implementing people-related tasks, finance-related tasks and coping with unexpected
challenges. However, this characteristic did not show any influence on the dimensions
of searching, planning and marshalling. Perhaps the lack of relationships is because
undertaking these activities may require specific procedures and not dependent on an
entrepreneur’s internal locus of control.
While the results show that internal locus of control is not associated with all the
dimensions of self-efficacy, it is interesting to note that there is a positive association
between internal locus of control and the dimensions of implementing people-related
and implementing finance-related tasks. Believing in one’s capabilities to manage
investor relationships, and to attract, retain and manage personnel are important
dimensions of self-efficacy for growth-oriented entrepreneurs as identified by a number
of researchers (Eggers, Leahy & Churchill 1994; DeNoble, Jung & Ehrlich 1999;
McGee et al. 2009). Also in past studies, (see Boone, Brabander & van Witteloostuijn
1996) it has been suggested that individuals with high internal locus of control believe
that they can use their skills and efforts to control events. It is therefore reasonable to
expect that entrepreneurs who have a high internal locus of control would have a high
215
self-efficacy in carrying out people-related and finance-related responsibilities. My
study shows a positive association in these relationships.
Not surprisingly, the results also show a relationship between internal locus of control
and coping with unexpected challenges. DeNoble, Jung and Ehrlich (1999) found that
entrepreneurs who spent more time preparing their own business had a stronger
perception of their capability to cope with unexpected challenges. In this study, the
entrepreneurs are owner-mangers, so it is expected that they will have more confidence
in their ability to cope with unexpected challenges. This is necessary in countries like
India, where the business environment is very volatile. Similarly, it would be expected
that if they have a high internal locus of control, the entrepreneurs would be more likely
to have more confidence in their ability to cope with externalities, rather than leave it to
chance or others.
6.6.1.3 Personality characteristic of risk-taking propensity and entrepreneurial self-
efficacy dimensions
Scholars have proposed that entrepreneurs have to have a high risk-taking propensity to
start a business venture and undertake entrepreneurial functions (e.g., Schumpeter 1934;
Carland III et al. 1995). Further, it is also suggested that individuals who have a high
risk-taking propensity will be more likely to pursue entrepreneurial activities because
they believe they have more confidence to undertake these activities (Zhao, Seibert &
Hills 2005). Other authors (Markman, Balkin & Baron 2002) also reiterate that such
individuals will be positively associated with entrepreneurial self-efficacy. The results
of my study suggest that practicing entrepreneurs with a high risk-taking propensity also
have a high entrepreneurial self-efficacy, as we can see that the association of risk-
taking propensity was positive with all the dimensions of entrepreneurial self-efficacy
tested in the analysis. In an emerging economy like India, many entrepreneurs do not
have adequate market knowledge and they learn as they go. For them, the personality
characteristic of risk-taking propensity is extremely useful, as it strengthens their
entrepreneurial self-efficacy, which in turn is important in India in the context of caste
and conservatism. Interestingly, a recent study (Krishnan 2013) of Indian entrepreneurs
shows a positive relationship between risk and entrepreneurial success.
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6.6.2 Relationship between entrepreneurial self-efficacy and entrepreneurial behavioural activities
Self-efficacy has been linked to predicting an individual’s behaviour (Bandura 1982)
and it has been seen as an important variable to predict an individual’s performance in a
given task (Shane, Locke & Collins 2003). Therefore, the relationship between six
dimensions of an entrepreneur’s self-efficacy and eight dimensions of entrepreneurial
behavioural activities was tested.
The relationship between entrepreneurial self-efficacy and entrepreneurial behavioural
activities indicated that entrepreneurs who were confident in their ability to implement
people-related activities also engaged in activities such as controlling, internal
communication, human resources management, work-related tasks and customer service
very efficiently. All these activities (with the exception of controlling) are
entrepreneurial activities that are concerned with dealing with people (i.e. employees
and customers). Bridge, O’Neill and Cromie (2003) note that self-efficacy perceptions
are linked to intentions which in turn lead to behaviour. Therefore, it would be expected
that if the entrepreneur has a high self-efficacy in people-related activities, he/she would
also be able to undertake behavioural activities closely related to people as found in the
study.
As regards entrepreneurs who had a high self-efficacy in the implementing finance
dimension, they reported their ability to perform three behavioural activities efficiently:
controlling, work-related tasks and customer service, but not planning, internal
communication, human resources management, socialising and politicking behaviours.
It would be expected that having confidence in managing finance-related activities
would mean that the entrepreneur would focus on behaviours where there is a
possibility of impacting on finance, such as controlling, work-related tasks, as well as
customer service, since these three activities have a stronger link to higher earnings.
For example, engaging in customer service efficiently or controlling costs can have
financial implications for some firms (see Zeithaml 2000; Brinkmann, Salomo &
Gemuenden 2011). Of the relationships between finance-related entrepreneurial self-
efficacy and the dimensions of entrepreneurial behavioural activities that were not
found to be related, it appears that most of these behavioural activities (excepting
217
planning) are people-related. That could perhaps explain why the influence of finance-
related entrepreneurial self-efficacy did not manifest.
The results show that the entrepreneurs who had high self-efficacy in coping with
unexpected challenges were able to perform well in activities related to human
resources management. Previous studies in human resources management found that the
founder-managers use non-traditional methods of managing staff (Cardon and Stevens
2004). It is a challenge to attract employees, train and reward them well in a relatively
new and small business. Having the confidence to cope with unexpected challenges, as
found in my study, may mean that entrepreneurs are well positioned to allow their
ventures to grow into a large organisation by attracting professional talent. However,
this variable - coping with unexpected challenges - was not found to be related to other
dimensions of entrepreneurial behavioural activities namely, planning, controlling,
internal communication, work-related tasks, customer service, socialising and
politicking. Similarly, the searching capability was also not found to be related to the
behavioural dimensions excepting with work-related tasks. Perhaps further studies may
be required to examine these relationships.
Interestingly, no association was found between the planning and marshalling
dimensions of entrepreneurial self-efficacy and any of the eight entrepreneurial
behavioural activities. This is a quite unexpected result. One reason could be that they
may depend on professionals such as accountants and lawyers, or alternatively, it may
be related to contextual factors that require further investigation.
6.6.3 Relationship between personality characteristics and entrepreneurial
behavioural activities
Past research in the personality domain have observed that behaviour is inextricably
related to personality traits (Epstein & O’Brien 1985). Bird, Schjoedt and Baum (2012)
explain that entrepreneurs’ behaviour relates to the concrete and observable actions of
individuals. Because the focus is the individual, Bird, Schjoedt and Baum (2012) point
out that an entrepreneur’s behaviour is the “proximal outcome of traits, knowledge,
skills, abilities, cognition, ... motivation, and emotion” (p. 890). However, only
218
personality characteristics that match work characteristics have been touted as
predicting entrepreneurial behaviour (Rauch & Frese 2007a). The current study throws
light on some of the associations found between the three personality characteristics
studied and the various entrepreneurial behavioural activities. The three personality
characteristics examined were need for achievement, internal locus of control and risk-
taking propensity. The entrepreneurial behavioural activities taken into consideration
for testing were related to planning, controlling, internal communication, human
resources management, work-related tasks, customer service, socialising and
politicking. To the best of my knowledge, these associations have not been empirically
tested in any studies so far. The results show that there is a relationship between the
personality characteristics and some entrepreneurial behavioural activities.
6.6.3.1 Personality characteristic of need for achievement and entrepreneurial
behavioural activities
The tests examining the relationship between the need for achievement and
entrepreneurial behavioural activities found that there is a positive significant
relationship between need for achievement and two entrepreneurial behavioural
activities: planning and customer service. Consistent with the findings from a meta-
analysis conducted by Collins, Hanges and Locke (2004), need for achievement or
achievement motivation appears to be an important characteristic related to
entrepreneurial action because it affects an individual’s decisions and behaviour over
the lifetime of the individual. Collins, Hanges and Locke’s (2004) study prompted
additional exploration. The results of my study suggest that entrepreneurs who have a
high need for achievement engage more effectively in planning and customer services
activities. The literature also shows that entrepreneurs with a high need for achievement
will most likely engage in activities that help them to succeed in their entrepreneurial
efforts. The activities of planning and customer service are key to the success of any
entrepreneurial venture. In saying this, the other behavioural activities such as
controlling, internal communication, human resources management, work-related tasks,
socialising and politicking are also important behavioural activities that an entrepreneur
would be expected to engage effectively in, but the findings did not show any
association between an entrepreneur’s high need for achievement and these behavioural
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activities. This may need further probing to gain insights into these relationships,
particularly if there are any other additional mediating or moderating effects.
As seen in the results section, entrepreneurs who have a high need for achievement do
not undertake politicking behavioural activities well. This may be because they may
view politicking behaviour as not contributing to the target they wish to achieve. These
people by definition are achievement-oriented and therefore they do not want to waste
their time engaging in a behaviour which is not a beneficial use of their time. Another
explanation could be that they realise that as individuals, they are not able to achieve
any benefit by politicking/lobbying. A recent study by Elg, Schaumann and Ghauri
(2012) found that some small firms found it more productive to lobby in collaboration
with other organisations rather than individually because it gave them more strength to
negotiate with pubic decision-makers in India. Therefore, these individual
entrepreneurs may wait for an opportune time to come together for this purpose,
particularly so as the group provides them with the necessary power of influence in a
hierarchical society like India.
Overall, we see the entrepreneurs with a high need for achievement performing
activities such as planning and customer service that are necessary to entrepreneurial
success, which is consistent with previous findings (Collins, Hanges & Locke 2004;
Tang & Tang 2007).
6.6.3.2 Personality characteristic of internal locus of control and entrepreneurial
behavioural activities
Past studies have shown the concept of internal locus of control to encourage
entrepreneurial behaviour (Littunen 2000; Mueller & Thomas 2001). When empirically
tested with a range of entrepreneurial behavioural activities, the results show that there
is a positive significant relationship with three entrepreneurial behavioural activities:
controlling, socialising and politicking. It is expected that entrepreneurs with a high
internal locus of control have a higher perception of being in control (Boone, Brabander
& van Witteloostuijn 1996; Cromie & Johns 1983; Krueger 2009). This characteristic
clearly drives entrepreneurs to engage in entrepreneurial efforts and take responsibility
for their outcomes, rather than depending on others. Successful entrepreneurs are
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shown to believe that they have significant control over the outcomes of their firms
(Brockhaus 1980a). In this study, the findings show that entrepreneurs who have a high
internal locus of control are able to engage in controlling activities very efficiently.
Controlling activities entail activities that monitor the actual situation as well as the
performance in the firm, ensuring that the desired results are achieved (Luthans &
Ibrayeva 2006). This result also provides support for Krueger’s (1993) identification of
a close link between an individual’s desire for control and the initiating and maintaining
of goal-directed behaviour. This is an expected outcome, because it is typical for such
individuals to take responsibility for their actions, and for this purpose they must take
upon themselves those activities which can strongly determine the outcome.
The other behavioural activities that entrepreneurs with a high internal locus of control
engage effectively in are socialising and politicking. Socialising behavioural activity is
concerned with socialisation with outside entities such as suppliers, customers, bankers
and other business partners. Again, it seems that entrepreneurs who have a high internal
locus of control are engaging in activities where they would like to control the outcome.
With regard to politicking as well, these entrepreneurs have shown that they are
engaging in politicking activities effectively. The activities of socialisation and
politicking are not prescriptive or relevant in all situations. In some cases, they are
simply for relationship building. Therefore, these entrepreneurs are engaging in these
behaviours so that they have control of the outcome of these activities, rather than
leaving it to their employees or professional associations to manage.
Interestingly, the results show no association between internal locus of control and the
behavioural activities of planning, internal communication, human resources
management, work-related tasks and customer service. One explanation for this is based
on an educated guess that possibly these activities were considered to be mundane and
these entrepreneurs perhaps relied on their staff to carry out the functions, unlike
socialising and politicking as mentioned above.
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6.6.3.3 Personality characteristic of risk-taking propensity and entrepreneurial
behavioural activities
As mentioned in the hypothesis development chapter, this study focuses on the need to
study the relationship of risk-taking propensity and the behavioural activities of the
entrepreneur that occur beyond the stage of starting a business. Risk-taking propensity
had a positive significant relationship with only the work-related tasks dimension of the
entrepreneurial behavioural activities. These entrepreneurs are able to carry out work-
related tasks very efficiently. It should be noted that in the literature since the early
definitions of entrepreneurs (Cantillon 1755/1931; Mill 1848), risk bearing has been a
major characteristic describing an entrepreneur. Risk-taking propensity is also argued
to be an important characteristic that leads an entrepreneur to undertake entrepreneurial
activities, since such activities have inherent risks associated with them (Carland III et
al. 1995; Stewart et al. 1999). However, as we see in this study, high risk-taking
propensity was positively associated with only one of the entrepreneurial behavioural
activities, i.e. work-related activity. The reason for this could be that this activity
includes dealing with decision-making and negotiation, which could perhaps have an
element of risk involved.
On the other hand, it is very surprising that risk-taking propensity was not associated
with any of the other behavioural activities. It could be expected that high risk-taking
propensity would be positively associated with entrepreneurial behaviours such as
planning and politicking, where a greater deal of uncertainty lies. One clue may lie in
some previous studies that have found a strong association between risk-taking
propensity and business intention and initiation, but not the continued existence of the
business or entrepreneurial performance (Frank, Lueger & Korunka 2007; Zhao, Seibert
& Lumpkin 2010). Since the entrepreneurs chosen for my sample were practising
entrepreneurs, it may not be that important for them compared to nascent entrepreneurs.
As such, the stages in a venture’s life may become important to our understanding of
the entrepreneurship process.
The result that not all the characteristics have a direct effect on entrepreneurial
behavioural activities could also suggest that there may be an indirect effect of these
characteristics on the activities. In previous studies, it is also found that the relationship
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between personality traits and behaviour is stronger only in situations that do not
constrain the individual (Adler 1996). Perhaps there are other constraining or
moderating factors that have not been included in the model being examined.
6.6.4 Impact of entrepreneurial overload on entrepreneurial self-efficacy
The results from my study show that entrepreneurial information overload had a
negative significant relationship with the searching, marshalling, implementing people
related tasks and coping with unexpected challenges capabilities. However, there seems
to be no association between entrepreneurial information overload and the
entrepreneur’s self-efficacy in planning and implementing finance-related tasks.
The negative impact of information overload on most of the entrepreneurial self-
efficacy dimensions is an expected outcome. Information overload can cause the
entrepreneur to feel stressed and under pressure when undertaking these entrepreneurial
tasks. This can also lower their perception of their own ability to make decisions related
to these tasks such as searching, marshalling or in implementation tasks when faced
with information overload. They feel overwhelmed by the amount of information and
not in control, and may be prone to wasting time and/or making mistakes. Time
pressure and making mistakes can further reduce their self-efficacy. These findings are
similar to previous research which found that psychological variables such as anxiety or
stress (in this case caused by information overload) can lead to dysfunctional
consequences and poor decision quality (Eppler & Mengis 2004), as well as negatively
impact on self-efficacy (Conger & Kanungo 1988). We also see that there is a strong
negative relationship between entrepreneurial information overload and the
entrepreneurial self-efficacy dimension of coping with unexpected challenges. Coping
with unexpected challenges is a key issue for any business to thrive, and information is
necessary to reduce uncertainity (Schick, Gordon & Haka 1999). As expected,
entrepreneurs do have to seek information when trying to cope with new challenges, and
with the presence of entrepreneurial information overload, they will doubt their ability
to cope with the challenges of discharging entrepreneurship responsibilities.
With regard to planning and financing dimensions, there seems to be no negative impact
from entrepreneurial information overload. This is surprising because the planning and
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financing are considered to be much more complex tasks. One possible explanation is
that entrepreneurs realise their inability in these areas and seek help from external
professionals such as management consultants and accountants. In such a situation, it
could be inferred that entrepreneurial information overload faced by the entrepreneur is
less likely to have an impact on these dimensions if they are able to pass or delegate
these responsibility to others, including professionals or even employees.
Overall, the results show that entrepreneurial information overload does have a negative
impact on most of the dimensions of entrepreneurial self-efficacy. The results confirm
the findings of a study undertaken by Hunter (2004) showing a negative influence of
information overload on self-efficacy as expected. While Hunter’s (2004) study was
done in a sales context, the findings of my study provide evidence of a negative impact
of entrepreneurial information overload on entrepreneurial self-efficacy. These results
also place entrepreneurial information overload as an important antecedent to
entrepreneurial self-efficacy. If entrepreneurial information overload leads to lowering
of entrepreneurial self-efficacy, that will lead to such individuals harbouring images of
failure (Chen, Greene & Crick 1998). This, in turn, is likely to have an adverse impact
on the critical process of entrepreneurship consisting of intentions, behaviour and
venture performance.
6.6.5 Impact of entrepreneurial information overload on entrepreneurial
behavioural activities
The impact of entrepreneurial information overload on entrepreneurial behavioural
activities was also tested. The findings indicated that the relationship between
entrepreneurial information overload and the communication and work-related tasks
was negative and significant. This means that entrepreneurs who are impacted by
entrepreneurial information overload are not able to carry out internal communication
and work-related tasks effectively.
Internal communication is a key to success for any organisation, and scholars have
shown that there is a positive relationship between internal communication and
organisational effectiveness (Tkalac Verčič, Verčič & Sriramesh, 2012). This implies
that information transmission within the organisation is important. As van Zandt (2004,
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p.542) observes, “human communication is not merely the transmission of bits from one
computer to another; information must go from brain to brain”. Entrepreneurs are
information seekers and therefore they have to disseminate information they receive to
their employees. With entrepreneurs feeling overloaded with information, their ability
to undertake activities like internal communication can be severely affected. A possible
explanation could be that entrepreneurs are limited in their ability or lack sufficient
tools to process all the information they receive due to the sheer volume of information,
and in the process, they do not have the time to filter relevant information. Such
problems may have an impact on their ability to communicate.
Similarly, information overload can also impact on their ability to undertake work-
related tasks effectively, as can be seen from the results of this study. Past studies in
other areas such as consumer information processing have shown decision efficiency to
decrease when information overload is increased (Jacoby 1975). The work-related tasks
are concerned with how the entrepreneur participated in activities such as pricing
decisions for key customers, negotiating with suppliers, or dealing with invoices which
require decision making on the part of the entrepreneur. This is in line with past
research. For example, it was found that information overload impacted on a manager’s
task accomplishment negatively (Klausegger, Sinkovics & Zou 2007), reduced an
individual’s ability to make good decisions (Speier, Valacich & Vessey 1999), and
reduced the overall effectiveness of the management operations (Allen & Wilson 2003).
Interestingly, the hypothesis for the association of entrepreneurial information overload
to the politicking dimension of entrepreneurial behavioural activities was rejected. In
this situation, it could perhaps be attributed to the case where the entrepreneurs could be
stressed due to entrepreneurial information overload and they then resort to politicking
to rescue themselves. Further, contrary to my expectations, my results indicate that
entrepreneurial information overload has no influence on the other behavioural
dimensions such as planning, controlling, human resources management, customer
services and socialising. There could be two possible explanations for this. The
entrepreneurs may delegate their responsibilities to professionals or their own
employees. Alternatively, they may establish structured or robust decision systems to
mitigate the negative effects of entrepreneurial information overload. In a recent study,
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Stewart, May and Kalia (2008) observed that Indian entrepreneurs scan the environment
more frequently than their US counterparts. This could be an attempt to overcome the
‘institutional voids’ that were identified by Khanna and Palepu (1997). India, being one
of the leading economies in the area of information technology and the use of mobile
phones, provides a rich platform for further investigation of these issues.
6.7 Chapter summary
This chapter presented the sample characteristics, measurement properties, the results of
the path analysis used to test the hypotheses, and a discussion of the results. Each path
identified in the conceptual model has been tested using regression-based path analysis.
Path one examined the association between the personality traits and entrepreneurial
self-efficacy. Path two examined the association between entrepreneurial self-efficacy
and entrepreneurial behaviour. Path three examined the association between personality
traits and entrepreneurial behaviour. Paths four and five examined the association
between entrepreneurial information overload and dimensions of entrepreneurial self-
efficacy and entrepreneurial behavioural activities respectively. The results of each of
the paths are reported and analysed. The above results contribute to theoretical and
practical implications, which are discussed in the last section in the light of the existing
literature.
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CHAPTER 7
CONCLUSION
This chapter has five sections. First, I have summarised the purpose of the study, the
research context, the research methods employed and the main results of my research.
Second, I outline the theoretical contribution made by this study to entrepreneurship,
including the generalisibility of the conceptual model used in my study. Third, I have
highlighted the practical contributions that stem from the findings of the study. Fourth,
I point out the limitations of my study. Finally, I make recommendations for future
research in this field.
7.1 Summary of the study
7.1.1 Purpose of the study
Given that entrepreneurship is an integral part of the economic development for any
country, this domain has received, in recent decades, an increased amount of interest
from a variety of stakeholders such as entrepreneurs, business owners, government
agencies, and policy makers. Similarly, academic research relating to this domain has
also intensified as evidenced by the number of articles being published, and an increase
in the number of journals concentrating on entrepreneurship (32 journals as per the
ABDC Journal Quality List, 2013). Despite the growth of research in entrepreneurship,
some scholars (Bird, Schjoedt & Baum 2012; Davidsson, Low & Wright 2001) have
pointed out that there is still much to discover about the role of practicing entrepreneurs
and their behaviour. Based on a thorough literature review, I have identified some
important gaps that need researchers’ attention and which could lead to beneficial
theoretical developments in this field. These are as follows:
a) Previous studies have found ESE to be a reliable and important predictor of
entrepreneurial competence and behaviour. They also found that the construct of
ESE consisted of different dimensions. However, there were no studies that
empirically tested each of these dimensions separately for their effect on practicing
entrepreneurs who were managing real businesses in the field.
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b) Bird and Schjoedt (2009) pointed out that many studies have used students as
respondents for studies on ‘nascent entrepreneurs’ who may not have become actual
entrepreneurs. While this stream of research is useful to understand entrepreneurial
intention to some extent, it cannot be a substitute for the richness required in the
understanding of practicing entrepreneurs who confront real challenges and who
make entrepreneurial decisions that affect their venture’s performance.
c) An area that has not received much scholarly attention is entrepreneurial behaviour
(Bird, Schjoedt & Baum 2012; Gartner, Carter & Reynolds 2010). To understand
what entrepreneurs actually do, a few studies (e.g., Luthans & Ibrayeva 2006;
Mueller, Volery & Siemens 2012) have collated a list of entrepreneurial behavioural
activities by observing what practicing entrepreneurs do. However, none of these
studies have empirically examined entrepreneurial behavioural activities or linked
them with other entrepreneurship variables.
d) Most of the studies in the area of entrepreneurship have been undertaken in
developed countries, and entrepreneurship theory was developed based on such an
understanding. Therefore, Zahra (2007) recommends adapting existing
entrepreneurship theories to emerging economies. For example, India is a large
economy with a large number of micro- and small businesses, but the amount of
research done in the area of entrepreneurship does not fairly represent the
entrepreneurial activity (Bruton, Ahlstrom & Obloj 2008). Therefore, India, as an
example of an emerging economy, offers an important context to undertake this
entrepreneurship research.
e) Entrepreneurs have been referred to as ‘avid information gatherers’ (Kaish & Gilad
1991) and they seek information right from the start of seeking opportunities. While
gathering information and the importance of information for decision-making have
been examined, the problem of information overload caused by the recent explosion
of information and communication technologies has not been examined in the area
of entrepreneurship, although it has been examined in other areas.
My study sought to address the above mentioned gaps identified in the literature.
Specifically, the purpose of my study was to examine the relationship between various
factors such as an entrepreneur’s personality characteristics, entrepreneurial self-
efficacy, entrepreneurial behavioural activities and entrepreneurial information overload
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in the context of an emerging market. The exact relationships examined empirically
were as follows:
i) the impact of personality characteristics on entrepreneurial self-efficacy;
ii) the impact of entrepreneurial self-efficacy on entrepreneurial behavioural
activities;
iii) the impact of personality characteristics on entrepreneurial behavioural
activities;
iv) the impact of entrepreneurial information overload on entrepreneurial self-
efficacy; and
v) the impact of entrepreneurial information overload on entrepreneurial
behavioural activities.
7.1.2 Research context
Emerging economies are characterised by the rapid pace of economic development and
an environment where government policies lean towards economic liberalisation and the
adoption of a free-market system (Hoskisson et al. 2000, p. 249). These economies
have also been experiencing significant socio-economic changes, resulting in changes to
the demographic characteristics such as fertility rates and education status. More
importantly, there is a huge development in the business sector where private firms are
on the rise, showcasing entrepreneurial talent and positioning such countries as
important economies in the global scenario. But entrepreneurship research is relatively
limited and many areas are left unexplored in emerging economies. Due to their large
population and high growth rates of their economies, emerging economies are attractive
global markets. India is one such important emerging economy with a population of
nearly 1.3 billion and a growing economy consisting of numerous micro-, small and
medium enterprises, in addition to large corporations. My study allowed me to consider
the application of existing entrepreneurship theories developed in advanced economies
to an emerging economy like India. For this purpose, I have examined a conceptual
model that consisted of variables such as entrepreneurs’ personality characteristics, their
self-efficacy, behavioural activities and information overload.
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7.1.3 Research methods and results
This study used a positivist approach, using the deductive process of theory testing.
Based on the literature review, a conceptual model was developed and a set of
hypotheses was presented. The concepts identified in the conceptual model were
operationalised based on the past studies. The sample for the current study was drawn
from practicing entrepreneurs in India. Data were collected from these entrepreneurs
using surveys. The tests of reliability and validity of the measurement scale used in the
study established the psychometric rigour of the conceptual model put forward for
empirical testing. Each path identified in the conceptual model has been tested using
regression-based path analysis. The results of the hypotheses are summarised below:
1. I have examined the relationship between three personality characteristics of
entrepreneurs, namely the need for achievement, internal locus of control and risk-
taking propensity, and six dimensions of entrepreneurial self-efficacy. I found that
the need for achievement and risk-taking propensity have a positive relationship
with every dimension of entrepreneurial self-efficacy. With regard to the impact of
internal locus of control, I found that it is positively related to three dimensions of
entrepreneurial self-efficacy, namely implementing-people, implementing-finance
and coping with unexpected challenges, but not for the other three dimensions.
2. Next, I have examined the relationship between the entrepreneurs’ personality
characteristics and entrepreneurial behavioural activities. I found that there is a
positive relationship between the personality characteristic of need for achievement
and the entrepreneurial behavioural activities of planning and customer service
activities. With regards to the personality characteristic of internal locus of control,
I found a positive relationship with three entrepreneurial behavioural activities,
namely controlling, socialising and politicking. On the other hand, the personality
characteristic of risk-taking propensity had a positive relationship with only the
work-related tasks of entrepreneurial behaviour.
3. The relationship between entrepreneurial self-efficacy and entrepreneurial
behavioural activities was also examined. It is pertinent to note that there are six
dimensions in the construct of entrepreneurial self-efficacy and eight dimensions in
the construct of entrepreneurial behavioural activities. My examination of these
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relationships shows that not all dimensions of entrepreneurial self-efficacy and
activities of entrepreneurial behavioural activities are related significantly. The
entrepreneurial self-efficacy dimension of searching capability was positively
associated with entrepreneurial behaviours of the work-related tasks dimension.
The entrepreneurial self-efficacy dimensions of planning and marshalling were not
associated with any of the entrepreneurial behavioural activities. The entrepreneurial
self-efficacy dimension of implementing-people was positively associated with five
dimensions of entrepreneurial behavioural activities, namely controlling, internal
communication, human resources management, work-related tasks, and customer
services. The implementing-finance dimension of entrepreneurial self-efficacy was
positively related with three entrepreneurial behaviours, namely controlling, work-
related tasks and customer services. The entrepreneurial self-efficacy dimension of
coping with unexpected challenges was found to be positively associated with the
entrepreneurial behaviour activity of human resources management.
4. The results examining the impact of entrepreneurial information overload on six
dimensions of entrepreneurial self-efficacy revealed that it had a negatively
significant relationship with four dimensions of entrepreneurial self-efficacy,
namely searching, marshalling, implementing people and coping with unexpected
challenges capabilities. The two dimensions not found to be significantly related
were planning and implementing finances.
5. The impact of entrepreneurial information overload on eight entrepreneurial
behavioural activities was also tested. The results indicated that entrepreneurial
information overload was negatively related to two entrepreneurial behavioural
activities, namely the communication and the work-related tasks.
7.2 Contribution to theory
After a comprehensive literature review of key factors that affect entrepreneurship, a
conceptual model was developed which showed potential relationships between
personality characteristics of entrepreneurs, their self-efficacy and entrepreneurial
behaviour. It also included the impact of information overload, which, although
recognised as an issue, has not been empirically tested in the discipline of
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entrepreneurship. All of these key proposed relationships were empirically tested in my
study in an emerging economy context making a significant contribution to the
literature. The main contributions to theory are mentioned below:
1. Zahra (2007) suggested that existing theories developed in the West should be
tested in the emerging economies. Taking a cue from that suggestion, I was able to
develop a model and test that in an emerging economy. The results in the area of
personality traits and entrepreneurial self-efficacy were on the lines predicted based
on existing theory (Philips & Gully 1997; Zhao, Seibert & Hills 2005). With regard
to entrepreneurial behaviour, I was able to convert observed behaviour into
objective constructs and test the relationship with entrepreneurs’ personality
characteristics and entrepreneurial self-efficacy. The results indicated some positive
relationships. This provides a basis for further research.
2. By studying the Indian entrepreneurs, this research has added value to the
entrepreneurship studies undertaken in the emerging economies. While India has a
growing population of entrepreneurs, the quantity of published research in this area
is not a fair representation of the magnitude of the entrepreneurial activity. Thus
this study contributes to gaining a better understanding of practicing Indian
entrepreneurs.
3. While previous studies have recognised the multi-dimentionality of the concept of
entrepreneurial self-efficacy, they used a composite score to measure its effect and
thereby were not in a position to capture the effect of individual dimensions. One
prominent exception has been McGee et al. (2009), who identified five different
dimensions within entrepreneurial self-efficacy. I have used these five multi-
dimensions along wth another dimension of ‘coping with challenges’ identified by
DeNoble et al. (1999). The results from my study confirm the need to treat the self-
efficacy dimensions separately, even in an emerging economy.
4. Bird et al. (2012) called for more studies to test entrepreneurial behavioural
activities using well constructed multi-item measures. Following this call, I have
developed a scale to operationalise the entrepreneurial behaviours based on the
observed activities by Luthans and Ibreyeva (2006) in a transitional economy. The
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results from my study show how entrepreneurial behaviours are impacted by other
factors of entrepreneurship, and lay the ground for further research in this area.
5. The concept of information overload has been extensively applied in fields such as
psychology, organistion science, marketing, accounting and management
information system (Eppler & Mengis 2004). However, its application in the
entrepreneurship domain is not that visible. To the best of my knowledge, my study
is the first of its kind where the concept of information overload has been
empirically tested for its impact on entrepreneurship. Results indicate the negative
influence on some dimensions of self-efficacy and entrepreneurial behaviours, as
hypothesised, and confirm the relevance of information overload to entrepreneurship
literature.
7.3 Practical implication of the results
The results from this study have several implications for educators, practitioners and
policy makers. I discuss them below:
7.3.1 Implications for educators of entrepreneurship
i) My study shows that the theories of entrepreneurship developed in the mature
economies can be applied to emerging economy contexts as recommended by Zahra
(2007). However, these concepts have to be suitably modified and adapted after
thoroughly examining the local socio-economic environment.
ii) Entrepreneurial self-efficacy was identified as a multi-dimensional construct in
recent studies. My study considered six dimensions in entrepreneurial self-efficacy and
examined each of them empirically for their impact on other variables, for example on
personality characteristics and entrepreneurial behavioural activities. Educators can
now design entrepreneurship courses to train students in specific competences that can
help build their entrepreneurial self-efficacy and improve behavioural outcomes.
Furthermore, as careers and professions become more specialised, it will be useful to
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identify industry-specific entrepreneurial self-efficacy dimensions and match them with
the industry-specific tasks.
iii) Traditionally, the focus of educators was on developing entrepreneurship skills in
nascent or potential entrepreneurs to start a new venture, but my study identified and
tested specific entrepreneurial behavioural activities of practicing entrepreneurs who are
managing real businesses. This identification of entrepreneurial behavioural activities
can guide educators to also design curricula to train practicing entrepreneurs in
important behavioural activities that are relevant to an industry and / or region.
iv) By identifying and empirically examining the role of entrepreneurial information
overload in my study, I have brought this concept into the entrepreneurship domain.
My results showed that information overload has adversely impacted on some
dimensions of entrepreneurial self-efficacy and entrepreneurial behavioural activities.
Educators can bring this aspect of information overload into the mainstream of the
entrepreneurship curriculum and prepare students with appropriate tools to meet this
new environmental challenge.
7.3.2 Implications for entrepreneurship practitioners
i) Personality characteristics of entrepreneurs were found to impact on entrepreneurial
self-efficacy dimensions. Practicing entrepreneurs should recognise the importance of
the variables that are relevant to industry and gain competence in them.
ii) My study has empirically tested eight specific activities of entrepreneurial
behavioural activities for their relationship with three characteristics of personality and
six dimensions of entrepreneurial self-efficacy. Using this approach, practicing
entrepreneurs in emerging economies can identify important behaviours that help them
to perform effectively in their ventures. They can even prioritise these behaviours based
on the needs of their venture or local business environment.
iii) As a corollary to the above point, entrepreneurial behavioural activities were found
to have certain antecedents in the form of personality characteristics, entrepreneurial
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self-efficacy and entrepreneurial information overload. It will be useful for
entrepreneurs to introspect and assess their cognitive abilities and competences.
iv) Information overload was found to adversely impact on many dimensions of
entrepreneurial self-efficacy and some activities of entrepreneurial behavioural
activities. Hence, it becomes necessary, even in an emerging economy like India, to
reduce information overload by applying heuristics and other time management tools
and techniques.
7.3.3 Implications for policy makers
i) Many government agencies offer entrepreneurship training programmes. However,
they mainly focus on writing a business plan or starting a new venture. The results from
my study provide some practical input for designing programmes that focus not only on
how to start new ventures, but also how to manage them by learning behaviours
required in the field.
ii) Results from my study show that entrepreneurs in India possess competences
relevant for entrepreneurship. Using my study’s approach, governments and other non-
governmental bodies can identify the deficient competences among entrepreneurs and
train them by designing policies and establishing appropriate infrastructure.
iii) Since we know that a large part of India’s workforce is engaged in the informal
economy, and that the average number of employees, even in registered firms, is low (3
to 5 employees based on different studies), it is important for government to channel
efforts and resources to improve the productivity and scalability of the small business
entrepreneurs. Therefore, the creation of a supportive culture to improve entrepreneurs’
cognitive and behavioural capabilities through multiple government agencies is
necessary in order to leverage economic gains through entrepreneurship.
iv) Given the increased impact of information overload on the modern-day
entrepreneurs and business owners, it is necessary that they be provided with support
through appropriate institutions. For example, this could take the form of a one-stop
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centre where relevant and commonly required information is made available to
entrepreneurs or online resource and support centres could be developed.
7.4 Limitations of the study
Although my study has some significant contributions to make to the literature and
practicing entrepreneurs, I recognise that there are quite a few limitations to it.
First, the main limitation is the generalisability of the results, due to the fact that my
sample is drawn from India only. While India is an advanced and large emerging
economy which shares many common characteristics with other emerging economies,
the contextual factors vary across countries. Therefore, care should be taken before
these results are applied directly to another emerging economy, or even mature
economies, without further testing of this model in those countries.
Second, the sample was drawn from cities that are quite dispersed in India, and which
may not be homogenous in their characteristics. Hence the findings of this study may
not be generalisable to all the entrepreneurs in India, and particularly to those in the
rural areas.
Third, due to time and travel constraints, the questionnaires were self-administered.
There could have been some issues relating to language or conceptual clarity. A
significant proportion of responses (about 30 percent) had to be discarded for various
reasons, and some of them could be due to this factor.
Fourth, there could be a bias from self-reporting. Carr and Sequeira (2007) highlighted
the possibility that respondents may overstate their perceived ability. This bias may
have occurred in my study if some respondents overstated their perceived ability on
certain variables.
7.5 Directions for future research
The results from my study can lead to several research initiatives. I briefly discuss each
of them below:
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First, further research could be undertaken so as to determine the generalisability of the
results of this study. Since the multidimensionality of the entrepreneurial self-efficacy
was empirically tested and the results showed that each dimension had a different
influence, it is important to do more research both in developed and emerging
economies on each of these dimensions of entrepreneurial self-efficacy. Further, there
may be additional dimensions that could be identified.
Second, although the study was done in India as a whole, the sample did not cover all
areas to adequately represent the country fully. In a large country like India, there are
several regional variations based on cultural and religious practices. Hence, future
research could include replicating this study for the various regions in India to gain
insights into what is relevant to a localised context.
Third, this study provides insights into the impact of entrepreneurial information
overload on entrepreneurial self-efficacy and entrepreneurial behavioural activities.
Future research adopting the construct of entrepreneurial information overload should
employ a more extensive measure for this construct to ensure adequate domain
coverage. An exploration of the causes of entrepreneurial information overload will
help to better understand when and how entrepreneurs are impacted. It will also be
interesting to find out the impact of entrepreneurial information overload on the
different stages of the entrepreneurial venture i.e., opportunity identification, starting the
venture and growing the venture. Such a study would help understand the information
needs of entrepreneurs and how such information-seeking behaviour is impacted by
entrepreneurial information overload.
Fourth, my study in an emerging economy found an adverse impact of entrepreneurial
information overload on entrepreneurship. Given this finding, it is likely that
entrepreneurial information overload will impact on entrepreneurs in mature economies
even more. Therefore, similar studies could be undertaken in future in other emerging
economies as well as in developed countries. The findings of such research would be
helpful in offering important extensions to the entrepreneurial information overload
construct used in my study.
237
Fifth, the conceptual framework of my study has not included venture performance.
Future research, therefore, can examine how personality characteristics, entrepreneurial
self-efficacy and entrepreneurial behavioural activities can impact on the performance
of a venture in terms of both financial and non-financial measures.
Sixth, using my conceptual framework to examine entrepreneurs industry-wise may
reveal the competences and cognitive abilities that are industry-specific. For example,
fast growing service industries such as software and tourism may need a different set of
capabilities compared to those from traditional industries such as mining or handicrafts,
some of which are still large contributors to the rural economy.
Finally, entrepreneurship is generally recognised as a process that can be divided into
three stages: pre-launch (the period prior to starting a venture), launch (the start-up
phase) and the post-launch (the period of development beyond the start-up phase).
Perhaps a longitudinal study could be done to capture the impact of the constructs at
different points in the process of the venture. It would be interesting to compare the
four dimensions used in this study in the early stages of the venture development as
opposed to the more mature enterprise.
7.6 Concluding remarks
Overall, my study extends previous research in the area of personality characteristics,
entrepreneurial self-efficacy and entrepreneurial behavioural activities, and it created a
new conceptual model for empirical testing. It also included a new variable in the form
of entrepreneurial information overload. Although the importance of personality
characteristics, entrepreneurial self-efficacy and entrepreneurial behavioural activities
are widely acknowledged, there is still a dearth of such studies, particularly so in
emerging economies. The results suggest that the personality characteristics of need for
achievement, internal locus of control, and risk-taking propensity are positively related
to entrepreneurial self-efficacy, even in India, an emerging economy, which is similar to
the relationships found in previous studies conducted in mature economies. It is also
seen that entrepreneurs from emerging economies are adversely affected by information
overload. If that is the case in an emerging economy, it is very likely to have an adverse
238
impact on entrepreneurs in mature economies. Overall, my study takes an important
step towards understanding entrepreneurs in a large emerging economy such as India,
and also establishes a robust research platform for future research that can be used both
in emerging and mature economies.
239
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APPENDICES Appendix A.1
Ethics Approval from the Swinburne’s Human Research Ethics Committee (SUHREC), Swinburne University of Technology
SUHREC Project 2012/005 Ethics Clearance
From: Kaye Goldenberg <[email protected]> To: [email protected] Cc: Nadine White <[email protected]> Date: 2/7/2012 2:00 PM To: Dr Malcolm Abbott, FHEL/ Ms Manisha Karia [BC: Ms Manisha Karia] CC: Ms Nadine, White, Research Admin. Co-ordinator, FHEL Dear Dr Abbott, SUHREC Project 2012/005 Entrepreneurial self-efficacy and entrepreneurial performance: The moderating role of Information Overload Dr Malcolm Abbott, FHEL/ Ms Manisha Karia Approved Duration: 07/02/2012 To 07/02/2013 [Adjusted] I refer to the ethical review of the above project protocol undertaken on behalf of Swinburne's Human Research Ethics Committee (SUHREC) by SUHREC Subcommittee (SHESC4) at a meeting held on 20 January 2012. Your response to the review as e-mailed on 6 February 2012 was reviewed by a SHESC4 delegate. I am pleased to advise that, as submitted to date, the project has approval to proceed in line with standard on-going ethics clearance conditions here outlined. - All human research activity undertaken under Swinburne auspices must conform to Swinburne and external regulatory standards, including the National Statement on Ethical Conduct in Human Research and with respect to secure data use, retention and disposal. - The named Swinburne Chief Investigator/Supervisor remains responsible for any personnel appointed to or associated with the project being made aware of ethics clearance conditions, including research and consent procedures or instruments approved. Any change in chief investigator/supervisor requires timely notification and SUHREC endorsement.
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- The above project has been approved as submitted for ethical review by or on behalf of SUHREC. Amendments to approved procedures or instruments ordinarily require prior ethical appraisal/ clearance. SUHREC must be notified immediately or as soon as possible thereafter of (a) any serious or unexpected adverse effects on participants and any redress measures; (b) proposed changes in protocols; and (c) unforeseen events which might affect continued ethical acceptability of the project. - At a minimum, an annual report on the progress of the project is required as well as at the conclusion (or abandonment) of the project. - A duly authorised external or internal audit of the project may be undertaken at any time. Please contact me if you have any queries about on-going ethics clearance. The SUHREC project number should be quoted in communication. Chief Investigators/Supervisors and Student Researchers should retain a copy of this e-mail as part of project record-keeping. Best wishes for the project. Yours sincerely Kaye Goldenberg Secretary, SHESC4 ******************************************* Kaye Goldenberg Administrative Officer (Research Ethics) Swinburne Research (H68) Swinburne University of Technology P O Box 218 HAWTHORN VIC 3122 Tel +61 3 9214 8468
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Appendix A.2
SUHREC Project 2012/005 Final Report Acknowledgment
Keith Wilkins <[email protected]> Tue, Jul 22, 2014 at 4:39 PM
To: "[email protected]" <[email protected]> Cc: Malcolm Abbott <[email protected]>, Robyn Watson <[email protected]>, RES Ethics <[email protected]>, Anne Cain <[email protected]>
To: Ms Manisha Karia cc Assoc Prof Malcolm Abbott, FBE Dear Manisha SUHREC Project 2012/005 Entrepreneurial self-efficacy and entrepreneurial performance: The moderating role of Information Overload Revised Project Title: The Influence of Entrepreneur Personality and Self-Efficacy on Behavioural Activities in the Presence of Information Overload Dr Malcolm Abbott, FHEL/FBE; Ms Manisha Karia Approved Duration for Human Research Activity: 07/02/2012 To 07/02/2013 I confirm receipt of progress/final reports on the human research activity conducted for the above project in line with ethics clearance conditions issued. Best wishes for your higher degree submission. Yours sincerely Keith --------------------------------------------------------------------- Keith Wilkins Secretary, SUHREC & Research Ethics Officer Swinburne Research (H68) Swinburne University of Technology P O Box 218 HAWTHORN VIC 3122 Tel +61 3 9214 5218 Fax +61 3 9214 5267
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APPENDIX A.3 QUESTIONNAIRE PARTICIPANT CONSENT INFORMATION SHEET
FACULTY OF BUSINESS AND ENTERPRISE SWINBURNE UNIVERSITY OF TECHNOLOGY
Consent Information Statement
PROJECT TITLE: Entrepreneurial self-efficacy and entrepreneurial performance: The moderating role of Information Overload PRINCIPAL INVESTIGATOR(S): Ms.Manisha Karia, Doctoral student, Swinburne University of Technology, under the supervision of Associate Professor Malcolm Abbott, Associate Dean (Research), Swinburne University of Technology. WHAT IS THE STUDY ABOUT? The aim of the study is to identify how the performance of entrepreneurs is influenced by various factors such as personality characteristics, their self-confidence, and information availability. The study is particularly focused on entrepreneurs from emerging countries. You are invited to participate in this study by filling in the questionnaire enclosed with the consent information statement. WHY IS THE STUDY IMPORTANT? The current study focuses on entrepreneurial self-efficacy, entrepreneurial personality and will examine its relationship on entrepreneurial behavioural activities in the context of emerging markets. This study is important because: a) the focus is on understanding practicing entrepreneurs, b) theories developed in mature economies are examined for their relevance and application in emerging markets, and c) it helps in understanding the role of entrepreneurial information overload in the entrepreneur’s ability to perform their activities. WHAT IS THE RESEARCHER’S INTERESTS? This study is undertaken to wholly satisfy the requirements for my doctoral studies. In the process, I would share my findings through publication in journals and other forums relating to academic and professional bodies. WHAT DOES THE STUDY INVOLVE? Participation in the study involves filling in a questionnaire. This questionnaire has seven sections. For the most part, you will be required to tick or circle the options provided. Further, there is an opportunity, at the end of the questionnaire, to make any comment that you feel is relevant to the study. WHAT IS THE TIME COMMITMENT? Should you agree to participate, the completion of this questionnaire would take approximately 30 minutes of your time. There is no other commitment involved. WHAT ARE THE PARTICIPANT’S RIGHTS AND INTERESTS Your participation in this survey is voluntary. You are free to not answer any question that you feel uncomfortable about, and you may withdraw from the study at any time. Your
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identity will be kept confidential and anonymous. The data collected through this survey will be kept secure. You may seek clarification on any of the questions mentioned in the survey instrument. A summary of the research results will be made available to you, should you wish to see it. If you would like a copy of these findings, you can email me on [email protected]. By completing the questionnaire it will be deemed that you have given consent to participate in this research. WILL ALL DATA PROVIDED BE CONFIDENTIAL? You will not be required to give your name or identify yourself in the questionnaire. Data will be stored separately in a locked filing cabinet. No information about any individual will be given to Swinburne University of Technology, or to any other individual or organisation. All processed data will be stored electronically with password protection. Only the researcher Manisha Karia and her supervisors will have access to the data. The purpose of the study is to better understand entrepreneurs as a population and therefore you will not be identified individually. Data will be analysed and reported on an aggregate (group-level) basis only. Individual responses will not be analysed or reported, therefore individuals will not be identifiable. WHAT WILL BE THE RESEARCH OUTCOMES? This research is undertaken as part of the requirement for completion of the degree of PhD, hence will lead to publication of thesis. Findings from this project may also be shared with other academics through presentations in professional and academic bodies. They may also be published in academic journals. Your anonymity will be preserved and will not be identified in publications. HOW DO I TAKE PART IN THE STUDY? If you would like to participate in this research, please complete the questionnaire. Further information about the project – who to contact If you would like further information about the project, please do not hesitate to contact my supervisor: Dr Malcolm Abbott, Associate Dean (Research), Faculty of Higher Education Swinburne University of Technology, Lilydale Campus on 00 61 3 9215 7306 or at [email protected] Concerns/complaints about the project – who to contact: This project has been approved by or on behalf of Swinburne’s Human Research Ethics Committee (SUHREC) in line with the National Statement on Ethical Conduct in Human Research. If you have any concerns or complaints about the conduct of this project, you can contact:
Research Ethics Officer, Swinburne Research (H68), Swinburne University of Technology, P O Box 218, HAWTHORN VIC 3122.
Tel (03) 9214 5218 or +61 3 9214 5218 or [email protected] Please retain this sheet for your records.
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