This post focuses on the report of the researchers about the factors that influence an individual to pursue the world of entrepreneurship. These factors result from various theories and models as supported by literature on entrepreneurship. I intentionally removed the references aiming to present a simplified summary of the research. Any viewer who is interested to determine the source is advised to check its accuracy from the original pdf file attached in this post.
The present writer aims to share four things in this summary. These are:
1. Factors that influenced an individual to pursue entrepreneurship are things within.
2. Psychologists are the pioneers in the study of the phenomenon of entrepreneurship.
3. Planned Behavior Theory
4. Entrepreneurial Event Model
Things Within Us
It was reported that factors, which influenced individuals to pursue entrepreneurship originated within the people themselves. Self –Determination Theory and the book “Success Build to Last” supported this report.
It is claimed that the desire for entrepreneurship “originates from deep within the individual.” “It is part of a central core or essence where people have a profound sense of who they are, where they come from, and where they are going.” “It provides an enormous source of energy and direction that gives meaning to life.”
Self-Determination Theory teaches, “humans have a fundamental need to feel autonomous to choose their actions.” And when this “ autonomous need is satisfied, self-determined motivation toward an activity is enhanced.”
“On the other hand, non self-determined motivation implies engaging in an activity or behavior for controlled reasons.” Examples of controlled reasons are performing the entrepreneurial task with the expectation of either obtaining a monetary reward or avoiding an undesirable future.
The authors of the book “Success Built to Last” claim that “wealth, fame, and power were not the goals or accomplishments respondent entrepreneurs felt were important.” They affirm, “money and recognition were only byproducts of work.” They are “ ‘outcomes of passionately working often on an entirely different objective that is often a personal cause or calling.’ ”
Psychologists as Pioneers
The researchers report that psychologists are the pioneers in the study of entrepreneurial phenomenon. Researchers find that literature on the subject is divided into two kinds of study – study focusing on human traits and behaviors and study focusing on human intention.
Traits and Behaviors
The distinguishing feature of this type of study is that “an understanding of the entrepreneurship phenomenon could be realized by determining the personality traits and external contexts of entrepreneurs’ ideas and ventures.” Four dimensions are proposed related to this study. These are: individual, organizational, environmental and venture process.
Intention
It is claimed that study focusing on human traits and behaviors “improved the understanding of how one becomes an entrepreneur…” However, the study did not offer an explanation “why entrepreneurship would be chosen over organizational employment.” Thus, the advantage of study focusing on human intention is more preferred.
Literature shows that “entrepreneurship clearly represents planned, intentional behavior and thus seems amenable to research using formal models of intentions.” It is argued that “intentions are the best predictor of behavior, and they are both shaped and influenced by personal and situational variables.” This approach was appreciated for giving contribution for scholars “to take a wider, more holistic view of entrepreneurs.” “Instead of simply looking at characteristics and behaviors, other variables such as personal history, value systems, attitudes, and perceptions were examined.”
Planned Behavior Theory
Two schools of thought emerged from Intention Theory. These are the Planned Behavior Theory and Entrepreneurial Event Model.
Planned Behavior Theory “posits three antecedents to intention or planned behavior (1) “attitude toward the behavior,” (2) “subjective norm,” and (3) “perceived behavior control.” These “antecedents affect intention, which affects actual behavior.”
In PBT, both internal factors originating from within the person and external factors “influence intentions and ultimately actions.”
Entrepreneurial Event Model
An attempt was made to improve the “traditional definitions of entrepreneurship.” Instead of focusing on the person, a study was done to concentrate on the “entrepreneurial event.” This study shows that “individuals are persuaded toward ‘life path changes’ such as entrepreneurial actions by factors such as ‘job, family situation, inertia, and daily pushes and pulls.’ ” Two theories developed under this Entrepreneurial Event Model.
Push/Full Theory.
Push/Pull Theory is about factors that either push or pull an individual into the entrepreneurial world. Push factors are “negative situational issues, such as economic necessity, conflicts with employer or employment, joblessness, career setbacks, and limited alternative opportunities. On the other hand, pull factors are positive influence, which pull a person to pursue entrepreneurship. Examples of pull factors are “need for achievement, internal locus of control, belief in self-determination, higher propensity for risk-taking, identification of a market opportunity, and a strong sense of personal ability to perform.”
“Researchers have found both push and pull factors to be extremely influential.” In one study, it was “demonstrated that individuals are much more apt to form a company based on negative information rather than positive.” However, another study “found that pull entrepreneurs were more successful than push entrepreneurs in both personal income and sales per employee. It was “postulated that this was due to the fact that pull entrepreneurs are lured by the attractiveness of a personal business idea.”
Internal/External Theory
Internal/external theory is about both internal and external factors that influence an individual to take the journey of entrepreneurship. Internal factors “include attitude shifts such as age milestones or mid life crises.” Whereas, “external factors include ‘negative displacements’ such as refugee movements or job related changes (being fired, demoted, or transferred).”
This internal/external factors are related to the push/pull factors. Internal factors “are commonly linked to pull factors and consist of variables such as personal ability, skill set, feelings, experiences, and knowledge.” Furthermore, “external factors are generally in keeping with push factors and include attributes like the economy, consumers, investors, product demand, and competition.”
Conclusion
The mentioned theories “have contributed significantly to research by providing a foundation for understanding personal characteristics and situational factors that motivate entrepreneurship.” “Push/pull models revealed that entrepreneurship can result from both positive and negative factors, while the internal/external theory illustrated that the drive for entrepreneurship can come from within one’s self or from extraneous circumstances.”
However, the mentioned theories and entrepreneurial literature remain “silent on factors related to spirituality,” and its relationship why an individual would pursue entrepreneurship. This need provided the basis why the researchers conducted this study in the first place.
Christian Entrepreneur 