innov manag_ProQuest_Diss16.pdf

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THE UNIVERSITY OF CALGARY

Home-based Entrepreneurs, Non-home-based Entrepreneurs and

White-collar, Non-management Workers:

A Comparative Study of Attitudes Toward Achievement, Personal Control,

Self-esteem, Innovation and Business Growth

by

Leslie Patricia Roberts, B.Comm., M.B.A.

A DISSERTATION

SUBMITTED TO THE FACULTY OF GRADUATE STUDIES

IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE


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THE UNIVERSITY OF CALGARY

FACULTY OF GRADUATE STUDIES

The undersigned certify that they have read and recommend to the Faculty of

Graduate Studies for acceptance, a dissertation entitled “Home-based

Entrepreneurs, Non-home-based Entrepreneurs and White-collar, Non-management

Workers: A Comparative Study of Attitudes Toward Achievement, Personal Control,

Self-esteem, Innovation and Business Growth” submitted by Leslie Patricia Roberts

in partial fulfilment of the requirements for the degree of Doctor of Philosophy:

Dr. Peter Robinson, Supervisor

Dr. Wynne Chin, committee Member

Dr. Nicole Coviello, Committee Member


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ABSTRACT

Home-based entrepreneurship, the operation of a business venture in or

from the business owner's place of principal residence, now involves nearly

fifteen percent of the US and Canadian workforces (Case, 1996; Orser & Foster,

1992). The purpose of this exploratory study was to investigate the association

between six attitudes toward entrepreneurship: 1) achievement in business, 2)

perceived personal control of business outcomes, 3) self-esteem in business, 4)

preference for innovation in business, 5) preference for business growth in

employment and 6) preference for business growth in revenue; and four types of

entrepreneurial behavior i) full-time home-based entrepreneurship, ii) part-time

home-based entrepreneurship, iii) non-home-based (commercial)

entrepreneurship, and iv) non-entrepreneurship (white-collar, non-management

employment). A series of hypotheses were developed to test the relationship

between entrepreneurial attitudes and types of entrepreneurial behavior between

groups. Individual and organizational level characteristics were also investigated.

A t ti d l f 2303 h b d d i l


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subscales); the Entrepreneurial Attitude Orientation (EAO) Scale (Robinson, et

al., 1991); and individual and organizational characteristic questions.

Hypotheses were tested with one-way analysis of variance (ANOVA).

Significant differences in entrepreneurial attitudes were found in three areas: 1)

between all groups on measures of perceived personal control of business

outcomes; 2) between full-time home-based entrepreneurs and white-collar

workers on measures of self-esteem in business; and 3) between full-time and

part-time home-based entrepreneurs on measures of preference for business

growth in revenue. No significant differences were found between groups on

measures of achievement in business, innovation in business or preference for

business growth in employment although homogenous subsets emerged.

Homogenous subset analysis using Student-Newman-Keuls (SNK) procedure

identified two consistent subsets: 1) full-time home-based entrepreneurs and

commercial entrepreneurs, and 2) part-time home-based entrepreneurs and

white-collar workers. LOGIT regression was used to determine the probability of

commercial business ownership and identified four significant predictors: 1) type


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ACKNOWLEDGEMENTS

My thoughts and sincere gratitude this day and always turn to the following

special individuals and organizations who assisted with this endeavor my

supervisor, Dr. Peter Robinson, whose work has contributed significantly to our

understanding of entrepreneurial attitudes and whose support, guidance and

patience never faltered; my committee members, Dr. Nicole Coviello and Dr.

Wynne Chin for thoughtful counsel; Dr. Alice Boberg, who endured membership

on three of my examining committees; external examiner Dr. Walter Good from

the University of Manitoba, who, along with Dr. Wayne Long, Dr. Barbara Orser

and Dr. Mary Foster, ignited my interest in home-based entrepreneurship; Dr. Tak

Fung, Academic Computing Services statistical consultant who compiled LOGIT

regression and LISREL structural model analyses and assisted with analysis and

interpretation; Betty Osing of Kensington Business Centres, who merged and

printed 2800 letters and envelopes; my extraordinary friend and B. Ed. student

Melanie Smerek, who entered over 110,000 pieces of data for this study - are we


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whose constant love, support and encouragement made this dream possible,

including husband Mike McGeough; sons Robin and Cameron; my parents Ed

and Kaye Roberts; my brother Craig; special friends Lisa Hamilton, Marion Webb,

Deb Mulcair, Scott Kirker, Michel Rod, the late Stew Fairbanks, Fiorenza Russel,

Penny Chalmers, Dr. Debi Andrus; and the Friday morning coffee gals, Betty

Michaud, Rina Romano, Rhonda Cheke, Mel Smerek and Dianne Rinaldi, who

know more about homoscedasticity than anyone ought to know, poor dears.


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DEDICATION

To Mom,

Kathlyn (Kaye) Mae Roberts (1921 - 1998)

with all my love.


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Comparative Studies of Psychological Characteristics

Of Entrepreneurs and White-Collar Workers . 8 1

Summary of Psychological Characteristics . 8 3

Individual and Organizational Characteristics . 8 5

Gender . . . . . . . . 89

Age . . . . . . . . . 89

Life-cycle Stage . . . . . . . 90

Education and Experience . . 9 1

Organizational Characteristics . 9 2

Summary of Individual and Organizational Characteristics 93

Attitude Theory . . . . . . . . 95

Definitions of Attitudes . . . . . . 95

Tripartite Model of Attitude . . . . 97

Attitude - Behavior Relationship . 1 0 1

Attitude Measurement . 1 0 8

Summary of Attitude Theory . 1 1 0

The Entrepreneurial Attitude Orientation (EAO) Scale . . 1 1 1

Home-based Entrepreneurship . 1 1 4

Origins of Home-based Entrepreneurship Literature . 1 1 5Characteristic Studies of Home-workers and

Home Businesses . 1 1 8


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Hypotheses . . . . . . . . . 134

Achievement in Business . . 134

Innovation in Business . 1 3 5

Perceived Personal Control of Business Outcomes . 137

Perceived Self-esteem in Business . 1 3 9

Preference for Business Growth in Revenue and in

Employment . . . 1 4 0

Summary . . . . . . . . . 142

IV: RESEARCH M E T H O D ......................................................................... 143

Subscale Development and Testing . 1 4 3

Scale Item Development . 1 4 5

Final Survey Development. . 1 4 8

Populations and Sampling . . 1 5 5Entrepreneur Subjects . 1 5 5

Control Group Subjects . 1 5 7

Sample Size . . 159

Procedures . . . . . . . . . 160

Measures . 1 6 2

Attitude Measures . . 162

Subscale Scoring Procedure . 1 6 3


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V : R E S U L T S ................................................................................................ 172

Analysis of the Samples . 1 7 2

Representativeness of the Samples . 1 8 2

Non-response Bias . . 1 8 2

Early versus Late Response Bias . . 183

Reliability . 1 8 4

Internal Consistency . 1 8 4

Validity . . . . . . . . . 186

Criterion-related Validity . 186

Hypothesis Tests . 1 9 0

Differences Between Full-time and Part-time Home-based

Entrepreneurs, Non-home-based Entrepreneurs and

White-collar Workers . 1 9 2

Probability of Commercial Business Start-up . 211Mediating Effect of Individual and Organizational Variables

on the Relationship Between Attitudes and Entrepreneurial

Behavior . 2 1 3

Chapter Summary . . . . . . . . 221

VI. EVALUATION AND DISCUSSION OF RESULTS . 2 2 3

Discussion of Results . . . . . . . 223


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Directions for Future Research . . . . . . 238

Directions for Research Methodology . . . . 239

Areas of Additional Research in Home-based

Entrepreneurship . . . . . . . 241

Chapter Summary . . . . . . . . 243

B I B L I O G R A P H Y ................................................................................................245

A P P E N D IC E S ................................................................................................274

Appendix 1. Cover letter, letter of support, and instrument . 274

Appendix 2. Diagnostic histograms, scatterplot matrix, and

normal Q-Q probability plots . . . . . 287


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LIST OF TABLES

Table 1.1 Summary of home-based work definitions and typologies 12

Table 2.1 Selected summary of studies of achievement motivation

and entrepreneurs . . . . . . . 43

Table 2.2 Selected summary of studies of personal control


Table 2.3 Selected summary of studies of self-esteem


Table 2.4 Selected summary of studies of preference for innovation


Table 2.5 Selected summary of studies of preference for business

growth in revenue and in employment . 7 7

Table 2.6 Selected summary comparison of demographic and

human capital characteristics of entrepreneurs and

home-based entrepreneurs . 8 6

Table 2.7 Ajzen’s (1989) classification of responses used to infer

attitudes . . . . . . . . 99

Table 2.8 Greenwald's LORh5System . 1 0 6Table 4.1 Overview of methods . 1 4 4

Table 4.2 Reliability analysis for Revenue Growth subscale . 149


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Table 5.5 Correlation matrix of component and subscale independent

variables . . . . . . .

Table 5.6 Summary of discriminant analysis results for EAO, RG and

EG subscales . . . . . .

Table 5.7 Summary of descriptive statistics for mean comparisons

Table 5.8 Post hoc multiple comparison tests of significance of

differences between full-time and part-time home-based

entrepreneurs, non-home-based entrepreneurs and

white-collar workers . . . . .

Table 5.9 Summary of tests of hypotheses . . . .

Table 5.10 Determinants of the operation of a non-home-based

business . . . . . .

Table 5.11 Structural equations for endogenous variables .

Table 5.12 List of variable names used in LISREL analysis .

. 188

. 191

. 193

. 196

. 203

. 212

. 217

. 219


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LIST OF FIGURES

Figure 2.1 Schematic conception of attitudes 98

Figure 2.2 Structural representation of a tripartite model of attitude . 102

Figure 3.1 Conceptual framework for the study . 133

Figure 4.1 Schematic of subscale items and summated scales . 152

Figure 5.1 Path diagram of causal relationships . 215

Figure 5.2 LISREL measurement model of causal relationships . 218


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CHAPTER I: INTRODUCTION

1

“We started our home business to just actually run a small business and see what it was all about, see whether we liked it or not; if we were cut out to manage ourselves or if we had to be told what to do or would we actually just do it ourselves. There is a difference... so with a small outlay [of cash] and now a real big plan we want to learn some of the ins and outs of running a small business before we quit our day jobs.”(Home business owner “B”, interview transcript, p. 4)

“I started consulting from home because I knew that at my age it would be absolutely impossible to find a job. Not just because of my age, but because of my highly specialized position as one of the only paleontologists working in the oil industry. Companies don’t hire people like me any more. I was an anomaly and I know

anomalies don’t last very long during periods of restructuring.”(Home business owner “H”, interview transcript, p. 3)(Roberts & Robinson, 1996)

Two home-based businesses, two apparently disparate approaches to

small business ownership. For one, the home business is a skill and experience

building exercise and the potential incubator (Wehrell, 1995) of a much higher


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2

Home-based entrepreneurship, or the operation of an independent

income-generating venture based in or from a business owner's place of principal

residence (Roberts, et al., 1995), is the small business ownership choice of over

12% of the US workforce, or over 25 million entrepreneurs. This represents an

increase in the number of home-based entrepreneurs in the US of 22.3%

between 1992 and 1995 (Case, 1996). In Canada, the number of home-based

businesses increased by 16.7% between 1991 and 1993, where a home business

is operating in nearly 1.5 million homes or in 14% of all Canadian households.

Interestingly, home-based business penetration is highest in the province of

Alberta (21% of households) and lowest in Quebec (8% of households)

(Canadian Manager, 1995, p. 18).

The growth of home-based entrepreneurship is supported by the growth in

the number of self-employed Canadians which has risen, on average, 5.9% per

year since 1991 (Gendron, 1996) and is precipitated by macro-environmental

factors such as: 1) changing societal values (Christensen, 1988; Allen, 1983;


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3

retail/wholesale trade, manufacturing (food, textile, arts, crafts), construction and

trades, finance, insurance and real estate businesses; and managing agricultural,

forestry, mining and fishing operations from their homes (Roberts, et al., 1995).

In Canada, studies also suggest that work being performed is more likely full

time, and that income generated by the home-based entrepreneur is most likely

the primary source of household income (Foster & Orser, 1993).

Not strictly a North American phenomenon, home-based entrepreneurship

is on the rise both in other industrialized nations, as well as in lesser developed

countries (LDC’s). For example, home businesses are operating in 8.5% of

households in industrialized nations such as Finland (Vanhalakka, 1991),

represent a significant and growing activity in Ireland (O’Connor, 1987) and are

being studied in the context of urban home production in emerging economies

such as Peru, Zimbabwe and Appalachia (Strassman, 1986,1987; Scott, 1995;

Miraftab, 1994; Oberhauser, 1995; Tipple, 1993; Lazerson, 1995). Although the

nature and extent of home-based production varies greatly between industrialized


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4

part to the recognition of the significance of small and medium-sized enterprises

to economic growth and development, and of the importance of innovation within

large, diversified North American firms facing a formidable competitive

environment (OECD, 1996). In academe, this interest can be measured by the

growth in the number of North American conferences related to entrepreneurship,

the establishment of the Entrepreneurship Division of the Academy of

Management (Wortman, 1987), an increase in the number of college and

university programs, courses and extension education programming numbering

over 300 schools in the United States in 1988 (Vesper & McMullan, 1988), and

the establishment of dedicated entrepreneurship journals such as the Journal of

Business Venturing, and Entrepreneurship: Theory and Practice, as well as

practitioner journals such as inc., and Venture. Thus, entrepreneurship is an

exciting domain of inquiry.

Despite increased public, government and academic interest in the

broader context of independent and corporate entrepreneurship over the last ten


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be a temporary phenomenon, one that will subside when more jobs are created

and North Americans “return to work”; and 3) home business owners are difficult

to identify, making empirical investigation problematic (Orser, 1991a). However,

the statistics presented above suggest home-based entrepreneurship is

significant, is not temporary, and should not be ignored due to the methodological

challenges presented.

The origin of home-based entrepreneurship literature can be traced to the

study of “remote-office” work in the early 1970's following the OPEC energy

crisis in 1973 and specifically to the work of Nilles (1977) who proposed that

office work could be done in home or in satellite offices located close to a

worker’s home in order to partially or completely eliminate the commute to a

centralized office site to conserve energy. Since 1980, extant home-based

entrepreneurship literature has focused primarily on one of three issues: 1)

implications of home-based work on work and family life (Olson, 1983; Pratt &

DeSanctis, 1984; Christensen, 1985; Rowe & Bentley, 1992; Beach, 1993); 2)


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6

that home-based businesses 1) create jobs, 2) generate income, 3) generate

taxation revenue, 4) provide an opportunity for improved quality of working life

and 5) are tools for small business development and local economic development

(Orser, 1991b; Orser, etal., 1993; Wehrell, 1995; Allen & Wolkowitz, 1987;

Roberts, etal., 1995; Dykeman, 1989).

In addition, three forces are generally recognized as promoting the growth

of the home business phenomenon: 1) advances in information technology, 2)

changing societal values, and 3) economic restructuring and corporate

downsizing. Literature in the areas of information and telecommunication

technology and organizational communication in the early 1980's predicted the

rise of a "new information age" which would ultimately produce new production

systems (Bell, 1974, 1980; Porat, 1977; Martin, 1981). It was also predicted that

these new production systems and accompanying technological advancements

and implementations would create the home as a new work site. The transition is

being made to what Bell (1974) termed "post-industrial society", one in which


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(Christensen, 1987, 1988; Priesnitz, 1989, 1991, 1993; Roberts, eta l., 1995).

Economic restructuring and corporate downsizing provide opportunities for

employees to become "contract employees" in an effort to reduce the overhead

burden earned by large organizations1(Bailyn, 1989), or alternatively, to withdraw

from corporate life, often with substantial monetary severance packages, to begin

new careers as home-based entrepreneurs.

Informative as these early studies have been, investigations of the person

at the heart of the home-based entrepreneurial process, the home-based

entrepreneur, have been neglected altogether. As the excerpts taken from

interviews with home-based business owners presented at the beginning of this

chapter illustrate, diverse attitudes toward and motivations for starting a home-

based business are present. Despite the apparent significance of home-based

entrepreneurship as an economic activity and its growing legitimacy as an area of

academic inquiry, theories and models of the home-based entrepreneur which

would distinguish home-based entrepreneurs from other types of entrepreneurs


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8

Nowhere is this lack of theoretical progression more evident than in the

fundamental lack of definitional consistency in entrepreneurship research

(Timmons, 1978; Carland, Hoy, Boulton & Carland, 1984; VanderWerf, 1989;

Low & MacMillan, 1988; Gartner, 1988, 1990; Bygrave & Hofer, 1991; Huefner&

Hunt, 1994; Steams, Carter, Reynolds & Williams, 1995). While the definitional

debate may be due in part to the complexity of the entrepreneurship phenomenon

and to diverse interdisciplinary perspectives in the field, the problem of making

distinctions among entrepreneurs, i.e., between home-based entrepreneurs and

entrepreneurs who have chosen to locate their businesses outside the home

(non-home-based entrepreneurs), or between entrepreneurs and employed

workers, is exacerbated by the lack of definitional consistency. Although large

volumes of research on entrepreneurs have been generated in the past three

decades, insufficient agreement exists on how entrepreneurs differ from one

another, from managers, and from members of the general population (Robinson,

et al., 1991; Baum, 1995; Begley & Boyd, 1987). Yet, entrepreneurs, and home-


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9

(Brockhaus, 1987; Low & MacMillan, 1988; Roberts & Chrisman, 1997), where

many and varied approaches to defining what is and what is not entrepreneurship

have emerged since the days of Richard Cantillon (1755), where the

entrepreneur is defined as a self-employed individual, someone who does not

work for wages, where the distinguishing characteristic between employeds and

self-employeds is the risk and uncertainty as well as the "entrepreneurial profit”

associated with entrepreneurship. Today, debate continues over various

approaches to defining the entrepreneur and entrepreneurship more precisely.2

One study worth mentioning here due to its unique methodology is Gartner’s

deiphi study (1990, p. 16) with entrepreneurship research academics, politicians

and business leaders to determine variously held definitions of entrepreneurship

and, using factor analysis, the identification of eight “themes” of entrepreneurship:

1. Entrepreneur theme: the idea that entrepreneurship involvesindividuals with unique personality characteristics and abilities.


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4. Creating value theme: articulates the idea that entrepreneurship creates value.

5. Profit-nonprofit theme: concerned with whether entrepreneurship involves profit-making firms only.

6. Growth theme: focusses on the importance of growth as a characteristic of entrepreneurship.

7. Uniqueness theme: suggests that entrepreneurship must involve uniqueness.

8. Owner-manager theme: suggests that entrepreneurship involves individuals who are owners and managers of their businesses.

Gartner further clustered these eight themes into two general viewpoints

on entrepreneurship: 1) the characteristics of entrepreneurship: entrepreneur,

organization creation, innovation, growth, and uniqueness themes, or 2) the

outcomes of entrepreneurship: creating value, for profit and owner-manager

themes. Gartner concludes that entrepreneurship is a very complex process and

that no one definition of entrepreneurship need emerge, but cautions researchers


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11

major bank who works from home as well as an entrepreneur who operates a

business from home would both be captured under inclusive definitions. Refined

definitions exclude home-based workers, including only full- and part-time home-

based entrepreneurs. Finally, exclusive definitions capture only those individuals

who are operating a business from home on a full-time, or 32 hour per week or

more basis. Part-time business owners and tele-workers are excluded from this

conceptualization of home-based work. In order for one to understand the

implication of the findings of previous home-based work studies, an

understanding of the operational definitions employed in the studies is paramount

to proper interpretation. Table 1.1 illustrates the three historical approaches to

defining the home-based worker inclusive, refined, and exclusive definitions and

highlights the inconsistencies in defining the home-based work phenomenon

(adapted from Roberts & Chrisman, 1997, pp. 21-22).

Roberts and Chrisman (1997) propose a classification of home-based

work based on intentionality of the home worker to grow his or her business

R e pr o d u c


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c e d

wi t h

p er mi s s i on

of

t h e

c o p y r i gh t

own er .

F ur t h er

r e pr o d u c t i on

pr oh i b i t e d

wi t h o u t

p

er mi s s i on.

12

TABLE 1.1: Summary of home-based work definitions and typologies

Author Definition, classification or typology DistinguishingCharacteristics

INCLUSIVE DEFINITIONS

Gritzmacher, 1992Heck, 1987, 1991, 1992Loker & Scanell, 1992a, 1992b

Masuo, et at., 1992Rowe, et al., 1992, 1993

In a series of studies conducted by the US Home-based Business ProjectCommittee on a longitudinal panel of 899 home-based workers, two types ofhome workers were studied simultaneously: home-based business owners,

operating a full-time or part-time business, and home-based workers, full-timeemployees who worked from home (telecommuters).

No transportation to worklocation

Kraut (1988) Two types of homeworkers: primary and supplementary who do not requiretransportation to or from a work location. Primary homeworker works fromhome whereas the supplementary homeworker works primarily at a traditionalwork location, but who brings "extra" work home to complete during "off-hours"

No transportation to worklocation

Horvath (1986) A home-based worker is an individual who works in the home more than 50percent of the amount of hours worked,

Amount of time spentworking in the home

Boris (1988) A home-based worker is anyone who is employed inside the home, Employed status of theworker

Orser& Foster (1992) Home-based work activity typology: 1) full-time or part-time, home-based, self-employed entrepreneur; 2) substituter (employed worker working from a homeoffice); and 3) supplementer (employed worker who brings "extra" work hometo complete)

Employed status of theworker

R e pr o d u c e


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e d

wi t h

p er mi s s i on

of

t h e

c o p y r i gh t

own er .

F ur t h er

r e

pr o d u c t i on

pr oh i b i t e d

wi t h o u t

p e

r mi s s i on.

13


v" Author Definition, Classification or typology DistinguishingCharacteristics

Olson (1985) Home-based work typology: 1) home-based worker is an individual who isemployed either full-time or part-time and who works in the home; 2) home-based business owner is an individual who is operating their own business

out of the home, This is the first typology to distinguish between employedand self-employed home workers,

Employed status of the

worker

REFINED DEFINITIONS

Priestnitz (1993) A home-based business owner is an individual who operates a full-time or

part-time, profit oriented business operated in or from an individual's place ofresidence or surrounding buildings,

For-profit motive.

Work performed in "orfrom" the home.

Pratt and Davis (1985) A home-based business owner is an individual who operates a profit

enterprise in the owner's residence which supplies a product or service in orfrom the home.

Self-employed status,

Roberts, et al., (1995) A home-based business owner is an individual who operates a full-time or

part-time profit oriented business in or from a business owner's place ofresidence,

Full-time or part-time

operation, for-profitmotive,

Wehrell (1995) A home-based business is one which is owned and/or operated by a self-

employed individual working in or from his or her home or from anotherbuilding on the property, which may or may not employ other people andwhich provides a service of product from that workplace.

Self-employed status,

potential job creationcomponent

R e pr o d u c e


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e d

wi t h

p er mi s s i on

of

t h e

c o p y r i gh t

own er .

F ur t h er

r e

pr o d u c t i on

pr oh i b i t e d

wi t h o u t

p er mi s s i on.

14


" 'Author Definition, Classification or typology DistinguishingCharacteristics

EXCLUSIVE DEFINITIONS

Winter & Fitzgerald, 1993 A home-based business owner is one who operates a full-time home-basedbusiness in which the majority of employees are family members

Full-time operation,family members asemployees

Christensen (1988) Typology of the contingent workforce: 1) independent contractors, 2) part-timeworkers, 3) temporary workers, 4) leased employees. Independentcontracting involves the externalization of the worker from the employee rolls,resulting in the worker being hired on a self-employed contracted basis for afinite amount of time,

Work location

Kraut and Grambsch (1988) A home-based business owner is an individual who is self-employed and whooperates a full-time business in or from the home.

Full-time operation, self-employed status,


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15

with the first three classifications of home-based entrepreneurs only. Thus, the

following general and specific terms are defined as utilized in this study:

1. Entrepreneur is defined as an individual who identifies an opportunity and creates an organization to capture that opportunity (Brockhaus, 1982).

2. Home-based business refers to any full-time or part-time profit-oriented

organization operated in or from the business owner’s principal place of residence (Roberts, et al., 1995).

3. Home-based entrepreneur is defined as an individual who owns and operates an independent, profit-oriented organization operated in or from the business owner’s principal place of residence.

4. Full-time home-based entrepreneur is defined as an individual who owns

and operates the equivalent of five or more days per week (32 hours or more) an independent, profit-oriented organization operated in or from the business owner’s principal place of residence.

5. Part-time home-based entrepreneur is defined as an individual who owns and operates the equivalent of four of less days per week (less than 32 hours) an independent, profit-oriented organization operated in or from the business owner’s principal place of residence.

6. Non-home-based entrepreneur is defined as an individual who owns and operates an independent, profit-oriented organization located on


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With functional definitions in place, attention is now turned to an

examination of the theoretical basis of the current study. In the following section,

alternative approaches to understanding individual differences in behavior are

considered, followed by a discussion of common approaches used to investigate

entrepreneurial behavior.

Theoretical Basis for the Research

The appropriate theoretical model for studying determinants of individual

behavior has been a point of controversy in psychology for over thirty years

(Brockhaus, 1987), although personality trait approaches have dominated studies

of the psychology of the entrepreneur. In order to provide a theoretical backdrop

for the current study, it is necessary to briefly review epistemological and

methodological features of traditional personality approaches to understanding

individual differences. Four models are summarized in this section: trait, psycho

analytical social-cognitive and humanist


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17

the individual and will influence people to behave relatively consistently across

similar situations. The assumption that persons display cross-situational

consistencies in behaviour has been persistently challenged.

The consistency issue was first addressed empirically 70 years ago, when

a series of studies explicitly set out to assess consistency across situations

(Hartshome & May, 1929). Utilizing responses collected from 11,000 US

elementary and high school students to a large number of behavioral tests

designed to measure traits of altruism, self-control and honesty in a number of

situations, the authors reported low correlations among behaviors in different

situations. In a review of accumulated findings since Hartshome & May’s inquiry,

Mischel (1968) reported low correlations between measures of the same trait in

two different situations, typically less than .30 and between trait measures on

personality tests and actual behavioral observations of the same traits in real

situations. Mischel cautioned that, to the extent behavior is situation specific,

demonstrated generalized consistencies are an impossibility (Mischel, 1968).


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represents a compromise between our wishes and our fears, where unconscious

processes play an important role. One of the main criticisms of this approach is

that the concepts are ambiguous and problematic to define and measure

objectively (Atkinson, et al„ 1996). In addition, empirical tests of psychoanalytic

theories have met with mixed results. Efforts to identify relevant character traits

in children appear to be related to similar character traits in the parents (Eagle,

1984), and adult character traits have not been linked successfully to

psychosexually relevant events in childhood (Maccoby & Jacklin, 1974).

Nonetheless, there is continuing effort in reformulating psychoanalytic theory in

more testable terms.

The social-cognitive model of behavioural determinants focuses on

environmental, or situational determinants of behavior, where behaviour is viewed

as the result of a continuous interaction between personal and environmental

variables. Environmental (situational) conditions shape behaviour through

learning and an individual’s behaviour influences the environment (situation). To


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Gordon Allport argued that the trait approach in which individuals are compared

with one another on a common set of traits failed to capture a person’s

individuality and that the focus instead should be on the unique configuration of

traits within the individual (Allport, 1937). Interactionism is based on the belief

that behavior is influenced by the confluence of personality, situation and their

interaction (Fazio, 1986). Behaviour is affected by situations, but an individual

selects situations and influences the nature of these situations (Endler &

Magnusson, 1979). Like the psychoanalytic approach, the social-cognitive

approach is highly deterministic, and has been criticized for overemphasizing the

importance of situational influences on individual behaviour (Carlson, 1971).

The final model reviewed here is the humanist approach to understanding

human action which places the individual’s subjective experiences at the centre,

where a concern for predicting behaviour is supplanted with a focus on the

individual’s phenomenology, their perceptions and interpretations of events and

situations. Early proponents of the humanistic approach include Carl Rogers and


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20

individual differences has taken place in the field of psychology for nearly fifty

years. Fifteen years ago, a debate of similar magnitude and consequence

commenced in the field of entrepreneurship and continues today. The debate

has centred around the relative superiorities of two approaches: 1) personality

trait and 2) personal characteristics of business owners, such as owner’s age at

business founding, levels of education and experience, birth order and so on.

Proponents of trait-based personality models have won the majority of journal

space dedicated to this topic, followed closely by characteristic approaches.

Each approach and its relative merits will now be discussed.

Models of Entrepreneurial Behavior

Within the domain of determinants of entrepreneurial behaviour, the trait-

based personality approach has formed the major line of inquiry led by David

McClelland (1961) (Robinson, 1987). This approach suggests entrepreneurs

possess a common personality type, and the focus has been to enumerate a set


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21

(Sexton, 1980); need to control, responsibility seeker, challenge taker, and

moderate risk taker (Welsh & White, 1983).

investigations of personal characteristics of small enterprise owners also

dominate research in entrepreneurship (Ratnatunga & Romano, 1997). Biodata

such as age, owner’s age at business founding, gender, race, ethnicity, levels of

education and experience, and prior exposure to entrepreneurship have been

investigated as potential predictors of entrepreneurial success with the

development of a profile of a typical successful entrepreneur (Brockhaus, 1980;

Homaday & Aboud, 1971).

Both personality trait and characteristic approaches suggest that by

identifying a configuration of personality traits or personal characteristics of

known successful entrepreneurs, prediction of entrepreneurship in unknown

populations will be possible because individuals who possess the same traits or

characteristics as successful entrepreneurs are assumed to possess the same

underlying stable characteristics (Robinson, eta l., 1991). However, personality


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In a review of trait-based approaches to studying entrepreneurship,

Robinson, et al. (1991) levy criticism at poor instrumentation, use of broad-

spectrum personality theories in a specific domain such as entrepreneurship, and

the static, fixed and deterministic nature of personality theories which do not

account for the dynamic nature of entrepreneurship. The authors argue instead

for interactive theories: models which are influenced by and influence the

environment such as attitude theory.

Gartner (1988) also attacked trait and characteristic research suggesting

that these lines of inquiry were leading “virtually nowhere,” and called instead for

redirected focus toward organization creation, the outcome of the entrepreneurial

process. Gartner's contention, that entrepreneurs be studied within the context

of what they do, not who they are, is grounded in the social-cognitive approach.

Carland, Hoy and Carland (1988) responded to Gartner, arguing that more

knowledge about the individuals who create small ventures will better enable us

to understand the ventures which are created by them.


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23

Mitchell and James (1989) posit that the view of the human in context has

evolved from a stable, reactive, slice-in-time perspective to a much more complex

perspective, where the new view of dispositional and situational causes of

behaviour stresses the important attributes of persons, their contexts, and their

interactions. According to Mitchell and James (1989) what emerges is:

a human who is active psychologically and behaviourally, interacting in a dynamic way with a changing environment. For the person, there is both stability and change, there is active and reactive behaviour, there are abilities and skills that emerge. Also, there is reciprocal causality, a very complex, but probably realistic, view of the process of human interaction.” (p. 401).

Thus, a fully-specified model of the entrepreneurial process must be dynamic and

must include the entrepreneur as an integral part of that process.

Clearly, personal, situational and environmental factors are critical

elements of the entrepreneurial process (Greenberger & Sexton, 1988; Herron &

Robinson, 1993b), but not all individuals will choose to become entrepreneurs

under similar demographic, situational or environmental conditions. According to


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Trait-based and characteristic approaches to the study of entrepreneurs

have not sufficiently advanced the field. Yet, that must mean there is an

opportunity for an alternative approach to inquiry; perhaps one which is dynamic

in nature, which holds more explanatory and predictive power and which can

measure primary forces of human volition. This study proposes a departure from

trait and characteristic models of entrepreneurial behavior to a model based on

attitudes. An exposition of the features of attitude theory and the model utilized in

this study is presented in Chapter two, however, a brief introduction is offered

here.

Attitudes as Determinants of Entrepreneurial Behavior

Spurred largely by interest in the relation between attitudes and behavior,

the attitude concept has moved back into the focus of research in social

psychology. Attitude theory rests on a substantial base of research in related

management areas such as the prediction of consumer purchase behavior in


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25

response to all objects and situations with which it is related (Allport, 1935). An

attitude, then, is a mental state that predisposes an individual to act in a given

manner. This definition of attitude is similar to the notion of personality traits

presented in the previous section. However, since the concepts are defined in

slightly different ways and have been measured differently, personality traits and

attitudes are assumed to have different origins, and are therefore, assumed to be

different concepts (Ajzen & Fishbein, 1977,1980). Nonetheless, those attitudes

formed early in life and most persistently held by the individual are often

considered to be personality constructs by those who study the concept of

personality (Robinson, 1987).

Attitudes are “organized through experience” and may be short lived or

deeply rooted enduring processes. Most contemporary social psychologists

agree that the characteristic attributes of attitude are its evaluative (pro-con,

positive-negative) dimension (Ajzen, 1989), and its essential feature as a

preparation or readiness for response (Allport, 1971). This view is strengthened


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comprised of statements relating to one’s feeling toward an attitude object. A

more complex view of attitude suggests that an attitude is comprised of three

distinct components: affective, cognitive and conative components which

manifest as thoughts, feelings and actions directed toward an attitude object.

This multi-dimensional view of attitude is represented by the tri-partite model of

attitude. It is believed that a multi-dimensional view of the attitude concept is

superior to a uni-dimensional view due to its ability to measure not only feelings

toward an attitude object, but also beliefs and intended actions or behaviors

toward the attitude object (Triandis, 1971; Ajzen & Fishbein, 1977).

Until fairly recently, instruments used to measure entrepreneurial

tendencies have been based on personality models which lack application to

entrepreneurship and which lack sufficient attitude-object specificity, referring to

the lack of restriction of interpretation of an attitude to the level or domain from

which the attitude is chosen and lessening the precision of the instrument. The

concept of attitude-object specificity is an important distinguishing characteristic


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based on personality measures purport to measure “general underlying

tendencies” and enable the personality characteristic to be applied to a broad

range of situations. This feature is the hallmark of personality theory. However,

this focus on “general underlying tendencies” means the domain is unspecific or

unspecified, and the accuracy of the measurement is reduced.

Contemporary views of attitude assume that: 1) attitudes drive behavior

either through a mental or neural state of readiness, (Allport, 1935), 2) attitudes

are either unidimensional or multidimensional (Rajecki, 1990), 3) several attitudes

form an attitude “constellation” toward an attitude object, and 4) attitudes are

dynamic in nature (Ajzen, 1989; McGuire, 1985). When the concept of attitudes

is applied to entrepreneurship, it is said there is a constellation of attitudes

exerting an influence on an individual’s response to business or organizational

cues, a constellation comprised of several distinct attitudes which converge to

form the attitude orientation of the individual. Research suggests a host of

characteristics which distinguish entrepreneurs from others (Gartner, 1990;


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management workers, toward innovation in business, personal control in

business, achievement in business, perceived self-esteem in business, and

preference for business growth in employment and in revenue. The study

combines the use of two new subscales developed by the researcher to measure

attitudes toward business growth in employment and in revenue, with the use of

an existing entrepreneurial attitude instrument, the Entrepreneurial Attitude

Orientation (EAO) scale (Robinson, et al., 1991), a 75 item instrument based on

the tripartite (multi-dimensional) model of attitude and developed to discriminate

between entrepreneurs and managers. Thus, the fundamental research question

this study addresses is:

Do attitudes, as evidenced by measures of attitude toward innovation in business, perceived personal control in business, achievement in business, perceived self-esteem in business, preference for business growth in employment and preference for business growth in revenue, distinguish full-time and part-time home-based entrepreneurs, non-home- based entrepreneurs and white-collar, non-management workers?

Subordinate research questions include:

1 D i di id l l l d hi d h it l h t i ti


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This study investigates six constructs identified in the body of research on

psychology and entrepreneurship which are commonly investigated in relation to

the entrepreneur achievement, innovation, personal control, self-esteem, and

preference for business growth in revenue and in employment. Although these

constructs are not meant to represent an exhaustive set of characteristics

associated with entrepreneurship, the first four are most habitually cited in

descriptions of the entrepreneur. Recent work has stressed the need for a more

comprehensive understanding of entrepreneur's growth intentions related to

revenue and to employment as a means of distinguishing types of entrepreneurs

(Wiklund, eta l., 1997; Lewis, etal., 1997; Gartner, etal., 1997). An investigation

of these six characteristics is not intended to override the significance of other

characteristics and the roles played in determining entrepreneurial behaviour, but

it provides a starting point. Each of the six constructs will be elaborated in

Chapter two. Thus, the six attitudes investigated in this study are:


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6. Preference for business growth in employment, referring to the individual’s perception of the importance of employment growth in their business.

Thus, this current study builds on the similarity between attitudes and

personality traits in the measurement of what has traditionally been seen as

personality concepts. Attitude theory is believed to be a superior approach in the

study of entrepreneurial behavior over personality approaches due to the concept

of specificity which can: 1) limit the domain of inquiry to entrepreneurship, not to

broad, general tendencies and measure those behaviors related specifically to

entrepreneurship and 2) increase the predictability of entrepreneurial behaviors.

Need for the Study

A considerable amount of interest in home-based entrepreneurship has

been expressed by governments, educators, social agencies and the Canadian

public. Although recent studies have attempted to quantify the extent of home

business activity at the national and municipal levels in Canada, little is known


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entrepreneurship, thus moving inquiry from the exploratory to the experimental; 2)

the study contributes conceptually, by applying current attitude theory, the

tripartite model of attitude involving a multi-dimensional concept of attitude to the

study of home-based and non-home-based entrepreneurs, and by delimiting

different types of small business owners alleviating definitional inconsistencies.

Also, the results of this study will contribute to an understanding of the

entrepreneurial attitudes of white-collar employees, and will be of particular

interest to academics and practitioners interested in fostering corporate

entrepreneurship within organizations; and 3) the study makes a methodological

contribution by testing an existing attitude instrument and by developing,

validating and testing two new attitude subscales designed to measure attitudes

toward business growth.

In addition to academic contributions, an understanding of the similarities

or differences in attitudes toward entrepreneurship among home-based

entrepreneurs and between home-based entrepreneurs, non-home-based


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Outline of the Dissertation

This dissertation is comprised of six chapters, including the introductory

chapter. While prior research and other references will be cited throughout the

dissertation, Chapter If presents an overview and examination of psychological

constructs, individual and organizational characteristics, attitude theory and

extant home-based entrepreneurship literature. Chapter III specifies the

variables depicting attitudes and characteristics associated with home-based and

non-home-based entrepreneurship, and develops the specific hypotheses to be

tested in this study. Chapter IV describes the subscale development and testing,

populations and sampling procedures, procedures, measures, data diagnostic

and data analysis techniques used in the study, followed by the presentation of

results in Chapter V. Chapter VI discusses the results and draws conclusions

regarding distinguishing features of home-based entrepreneurs, and considers

some extensions of these conclusions to the more general case of small business

ownership. Implications of this study, limitations and directions for future


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CHAPTER II: LITERATURE REVIEW

33

Entrepreneurship has been investigated from the perspectives of

disciplines including economics, sociology, history, psychology, anthropology and

political science, each of which uses its own concepts and operates within its own

terms of reference (Low & MacMillan, 1988). It is these sciences which describe

key variables underlying the venture creation process (Bygrave & Hofer, 1991).

Although entrepreneurship is fast emerging as a unique discipline in its own right,

its theoretical and methodological roots are found in these other areas, where

theories, methods and constructs are borrowed and applied from the broader

social science literatures.

An example of the interdisciplinary nature of entrepreneurship research

can be found in the recent proliferation of population-ecology papers. Population-

ecology is prominent in the biological literature as a theory of birth, survival, and

death within populations, or in the domain of entrepreneurship, within the

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entrepreneurs act, 2) how they act, and 3) what happens when they act

(Stevenson & Jarillo, 1990). Considerable debate in the field of entrepreneurship

has centred on the relative importance of the first two themes over the third,

perhaps a contemporary manifestation of the classic contention between

attitudinal and behavioral researchers who debate the relative importance of

cognitive perspective of thoughts, feelings, beliefs and attitudes over observed

behaviors. To elaborate on Gartner’s (1988) criticism of personality trait studies

introduced in the previous chapter, he argued that the study of the entrepreneur

was one step removed from organization creation, the primary phenomenon of

entrepreneurship in his opinion. Carland, Hoy and Carland (1988) delivered the

rejoinder to Gartner, contending that if more knowledge of small business venture

creation is the primary objective of entrepreneurship research, then more must be

learned about the individuals who create and manage them because the two are

inextricably bound. Further, they suggested research efforts directed to a part of

the whole are misguided because all of the parts and their interaction must be

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1. Is initiated by an act of human volition.

2. Occurs at the level of the individual firm.

3. Involves a change of state.

4. Is discontinuous.

5. Is a dynamic and holistic process.

6. Is unique.

7. Involves numerous antecedent variables.

8. Generates outcomes extremely sensitive to the initial conditions of those

variables.

Hofer & Bygrave’s call for a focus on person-situation interaction in

entrepreneurship research is echoed in the broader social science literatures

(Bull & Thomas, 1993). Yet, the selection of a model of entrepreneurship is

contingent upon the information which the researcher desires to emphasize by

selecting various aspects of the entrepreneurial process (Cunningham &

Lischeron, 1991). However, it is difficult to imagine a fully descriptive model of

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integral part of entrepreneurship research (Carland, etal., 1988; Baum, 1995;

Walsh, Kirchoff & Boyan, 1996). An understanding of attitudes toward home-

based and non-home-based entrepreneurship and antecedent factors may help

explain why entrepreneurial behavior differs under comparable situational,

organizational and environmental circumstances, thus contributing to a more

comprehensive model of the entrepreneur and the entrepreneurial process.

This chapter reviews relevant literature in four areas which inform the

present study: 1) psychological characteristics which form the basis of an attitude

constellation, 2) individual and organizational level characteristics, 3) attitude

theory and 4) home-based entrepreneurship as a subset of the broader

entrepreneurship domain.

Psychological Characteristics

Since the early efforts of Cole (1942) who examined motivating forces and

characteristics of entrepreneurs, the entrepreneur has been studied as the

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Evidence of the preponderance of literature investigating the entrepreneur

is given in a quantitative citation analysis of 725 journal articles published in the

Journal of Small Business Management; International Small Business Journal;

Entrepreneurship: Theory and Practice; Journal of Business Venturing; and Small

Business Economics during 1986-1992. Ratnatunga & Romano (1997) report

that the primary topic of entrepreneurship research during that period was

characteristics of entrepreneurs: personality traits and demographic

characteristics.

Although the present study is an investigation of psychological

characteristics of home-based entrepreneurs, non-home-based entrepreneurs

and white-collar, non-management workers, studies of the psychological

characteristics of home-based entrepreneurs are nonexistent. Extant literature

pertaining to home-based entrepreneurship is reviewed in a subsequent section

of this chapter. This section presents studies of psychological characteristics of

entrepreneurs which have been conducted exclusively with non-home-based

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The four most common psychological constructs are: 1) achievement

motivation, 2) innovation, 3) personal control and 4) self-esteem, which together

comprise the majority of research associating psychological characteristics with

entrepreneurial behavior (Begley & Boyd, 1987). The fifth and sixth

psychological constructs examined in this study, preference for business growth

in revenue and preference for business growth in employment, were suggested in

the emerging home-based entrepreneurship literature as a basis for

distinguishing higher potential, higher growth home-based venture owners, from

those owners seeking to operate lifestyle, or income replacement, home-based

ventures (Masuo, et al., 1992; Loker & Scannell, 1992a). Empirical research has

generally supported relationships between the four common psychological

constructs and the decision to become an entrepreneur (Gasse, 1982; Kets de

Vries & Miller, 1986; Moore, 1986; Sexton & Bowman, 1986; Shaver, et al.,

1996), and a recent series of studies suggests that preference for business

growth may explain entrepreneurial growth behavior (Wiklund, et al., 1997; Hills,


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administered in 1950 and 1951 reporting that males who were high in

achievement motivation sought entrepreneurial business occupations.

Despite McClelland’s and colleagues' (McClelland & Winter, 1969)

contribution to the body of knowledge of the psychology of the entrepreneur,

namely the development and modification of the Thematic Apperception Test for

testing achievement motive within the domain of entrepreneurship, their work has

been criticized on theoretical, empirical and methodological grounds (Homaday &

Aboud, 1971; Klinger, 1966; Kilby, 1971; Fineman, 1977; Frey, 1984). Frey

(1984) criticized McClelland’s thesis (1961), that need for achievement was linked

to the economic growth of nations, on three key issues: 1) empirical validity, 2)

theoretical adequacy and 3) policy implications. In addition, the TAT has been

criticized for low predictive validity (Klinger, 1966) and low test-retest reliability

(Miner, 1980).

Rneman’s (1977) review of 78 cases in which 22 questionnaire and

projective instruments were used to measure achievement motive including the

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The early work of McClelland and colleagues provided a foundation for a

closer examination of the psychological characteristics of the entrepreneur and

spawned a significant amount of research on achievement motivation. Table 2.1

presents selected summaries of studies of achievement motivation and

entrepreneurship. Of note, is the variation of sampling and instrumentation

employed in the research. Despite these variations, however, most researchers

since McClelland have demonstrated a positive relationship between the

presence of an achievement motive and the decision to become an entrepreneur,

suggesting that achievement motivation remains one of the best constructs in the

attempt to account for new venture creation (Shaver & Scott, 1991).

In response to criticism surrounding the Thematic Apperception Test,

namely that the TAT is projective in nature and can be administered and

interpreted only by highly trained psychologists, several studies were conducted

to develop and test objective (pen and paper) measures of need for achievement.

Homaday and Bunker (1970) sought to develop objective tests of higher validity

R

e pr o d u c e d

wi t h

p e


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er mi s s i on

of t h e

c o p y r i gh t

own er .

F ur t h er


pr oh i b i t e d

wi t h o u t

p er mi s s i on.

43

Table 2.1 Selected summary of studies of achievement motivation and entrepreneurs

■ ........ ACHIEVEMENT MOTIVATION AND ENTREPRENEURS

Author (year) Sample Instrumentation Key Findings

McClelland (1961) U.S., Italian, Polish and Turkish managers (n= 31,68,31,17, respectively) and staff-

specialists (n = 31,107 48,48, respectively)

McClelland'sThematic

Apperception Test

U.S., Italian and Polish managers exhibitedhigher need for achievement scores than did

staff-specialists.

Hornaday & Bunker

(1970)

Boston-area founders of new ventures which

employed at least eight people who had been

operating the business for at least five years

(n = 20).

Edward's PersonalPreference Scale

Founders scored higher than the general

population on need for achievement,initiative, energy level and self-reliance.

Hornaday & Aboud

(1971)

Boston-area founders of new ventures which

employed at least eight people who had been

operating the business for at least five years

(n = 34 white males, 22 black males, 2 white

females, 2 black females),

Edward’s Personal

Preference ScaleWhite founders reported higher nAch scores

than black founders and combined scores

were higher than the general population,

Gender-based results not reported.

Hines (1973) Entrepreneurs, accountants, engineers andmiddle-level managers in New Zealand (n =80, 68, 74, 93 respectively),

Lynn AchievementMotivationQuestionnaire

Entrepreneurs reported significantly highernAch scores than the other three samples,and engineers and accountants reported no

difference in nAch scores, although the

scores were significantly higher than those

reported for middle-level managers,

Borland (1975) University of Texas students who wereenrolled in business courses and who were

intending and not intending to create newventures (n = 219)

Lynn's

Achievement

MotivationQuestionnaire

Students who were intending to startbusinesses scored significantly higher on

need for achievement than those students notintending to start businesses,

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wi t h

p e


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rmi s s i on

of t h e

c o p y r i gh t

own er .

F ur t h er

r e pr o

d u c t i on

pr oh i b i t e d

wi t h o u t

p er m

i s s i on.

44


ACHIEVEMENT MOTIVATION AND ENTREPRENEURS


Hull, Bosley & Udell

(1980)

1970-1974 Graduates of University of OregonCollege of Business Administration (n = 307)categorized as having at least someownership in a new business or no ownershipin a new business

Lynn's

AchievementMotivationQuestionnaire

Significant difference in need for achievementwere detected at the ,10 level betweenowner/managers and employees.

Cromie& Johns (1983) Male founders or “intending" entrepreneurs (n= 42), part-time MBA students, who heldmiddle to senior managerial positions (n =

41)

Lynns’ Achievement

MotivationQuestionnaire andKahl's

AchievementValuesQuestionnaire

Entrepreneurs scored slightly higher than themanagement control although the differencewas insignificant,

Ahmed (1985) Entrepreneurs and non-entrepreneurs (n =71, 61 respectively) in Bangladeshi

immigrants living in London, UK

Lynn's

Achievement


Significant positive relationship betweenneed for achievement and entrepreneurship.

Perry, Macarthur,Meredith &Cunningham (1985)

Three Australian samples of new or intendingsmall business owners (71% were intending),

small business owners in the nursery industryand "super-entrepreneurs" (defined asowners of businesses generating $A10million in annual sales revenue), where n =118,165,18, respectively

Lynns'

Achievement


Aggregate mean scores indicate that superentrepreneurs exhibited highest nAch scores,

while new and intending small businessowners scored lowest.

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p er


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rmi s s i on

of t h e

c o p y r i gh t

own er .

F ur t h er

r e pr o

d u c t i on

pr oh i b i t e d

wi t h o u t

p er m

i s s i on.

45




Begley & Boyd (1987) Founder and non-founder members of theSmaller Business Association of NewEngland (n = 239)

Edward's PersonalPreferenceSchedule

Firm founders ranked higher than nonfounders on need for achievement scores(21.52, 20.84 respectively, with a maximumscore of 25).

Cromie (1987) Male (n = 35) and female (n = 34) would-be

or very early entrepreneurs in northern

Ireland

Lynn's

AchievementMotivation Scaleand Kahl's

Achievement

Motives Scale

Male and female subjects scored equally on

need for achievement and significantly higherthan scores reported for validation sample ofnaval officers,

Miner (1990) Comparative study of high-growthentrepreneurs, entrepreneurs and managersin New York (n = 65,135, 71, respectively

Miner Sentence

Completion ScaleHigh-growth entrepreneurs scored

significantly higher on need for achievementsubscale than managers, where normativeentrepreneurs did not differ s ignificantly from

managers on need for achievement.

Robinson, Stimpson,Huefner& Hunt (1991)

Comparative study of attitudes of foundersand non-founders (n = 54, 57 respectively)

Entrepreneurial Attitude OrientationScale

EAO correctly classified 77% of cases andentrepreneurs scored significantly higher onattitude toward achievement in business thannon-entrepreneurs (p


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rmi s s i on

of t h e

c o p y r i gh t

own er .

F ur t h er


pr oh i b i t e d

wi t h o u t

p er m

i s s i on.

46




Langan-Fox & Roth(1995)

Female business founders in Victoria, Australia (n = 60), who had a minimum 50%share of business ownership.

Lynn’s AchievementMotivationQuestionnaire and

Kahl's

AchievementValuesQuestionnaire

Cluster analysis produced three clusters:Need-Achiever (n=15), Pragmatist (n=34),Managerial (n=11) entrepreneurs.

Pavidsson & Wiklund

(1997)

Three matched pairs of Labour Market Areas

in Sweden (n = 1313 total responses)Davidsson (1993)Value Survey

No significant differences exist among

regional scores for achievement motive,

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The subjects were also asked to make suggestions of factors which they

considered important to entrepreneurship which were not listed. Although the

number of subjects precludes the use of statistical analysis, Hornaday and

Bunker report that entrepreneurs make considerably higher scores than norm

groups on need for achievement.

In a follow-up study (Hornaday & Aboud, 1971), 40 successful

entrepreneurs, where an entrepreneur was defined as “a man or woman who

started a business where there was none before, who had at least eight

employees, and who had been established for at least five years” (p. 143), were

interviewed and tested with the same instruments used in the pilot study. The

results indicate that entrepreneurs are significantly higher on need for

achievement scales than the general population. There were no significantly

different results by race and due to the small number of females in the study (n =

4), no meaningful gender comparative analyses were made.

Hines (1973) utilized a nonprojective measure of achievement motivation

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managers was highly significant, whereas the difference between the accountant

and middle manager groups yielded a significant difference.

Two studies have examined the relationship between achievement motive

and the intention to start a business among university students enrolled in

business and non-business programs. In a study of 219 University of Texas

business majors, Borland (1975) reports that students who were intending to start

businesses upon graduation scored significantly higher on need for achievement

than those students not intending to start businesses. Similarly, Hull, Bosley and

Udell (1980) report that graduates of a business administration program who

were business founders within five years of graduation, scored significantly higher

on need for achievement than those graduates who had not founded a new

business since graduation.

Much research on achievement motive and entrepreneurs has been

conducted with male subjects. In a review of literature, Watkins (1982) cites only

one study of motivations of female entrepreneurs, a study conducted by Schwartz

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multidimensional, reporting that a cluster analysis produced three significant

clusters based on high, medium and low levels of achievement motivation and

which were labelled: achievement, pragmatic and managerial entrepreneurs.

A number of studies have undertaken comparisons of entrepreneurs and

managers, and entrepreneurs and non-founders on achievement motivation.

Cromie and Johns (1983) compared the achievement motive scores of business

owners and middle and upper level managers in Ireland, reporting that although

entrepreneurs scored higher than managers on achievement motivation, the

difference was not significant. Miner (1990) also compares “high-growth”

entrepreneurs, normative entrepreneurs and managers, and reports that high

growth entrepreneurs score significantly higher on achievement than managers,

and concurring with Cromie (1987), that normative entrepreneurs do not differ

significantly from managers on achievement motive. Chay (1993) reports in a

study of entrepreneurs and employees in the UK, that a significant difference in

scores between the two groups was discovered, and that no significant difference

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actually start a business and thus, the achievement motive scores for this group

could be expected to be lower. Similarly, Begley and Boyd (1987) compared 69

New England founders and non-founders on need for achievement and report

that firm founders ranked significantly higher than non-founders.

In sum, the achievement motive has been the most widely utilized

psychological construct in entrepreneurship literature to explain why some

individuals initiate ventures while others, under comparable circumstances, do

not. Four observations about achievement motive of entrepreneurs and

approaches to measurement can be made: 1) an achievement motive is present,

and that a relationship exists between the achievement motive of an individual

and the creation of a new venture, suggested by the preponderance of evidence

reviewed here; 2) achievement motive is highly complex and perhaps multi

dimensional, contributing to an explanation of the variation of entrepreneurial

behavior, where the need for achievement appears to be strongest in high-growth

entrepreneurs/super entrepreneurs (Miner, 1990; Perry, etal., 1985; Langan-Fox

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line of research as suggested by Gartner (1988) but more careful attention to

operationalization, instrumentation and measurement issues.

Personal Control

Locus of control is another psychological construct that has received a

great deal of attention in the entrepreneurship literature dealing with the

psychology of the entrepreneur. Locus of control is a complex individual

phenomenon concerned with determining the effects of an individual’s perception

of personal control, where perceived internal locus of control, “internal”, is defined

as the personal belief that one has influence over outcomes through ability, effort,

or skills; whereas perceived external locus of control, “external”, is the belief that

external forces control outcomes. Stemming from Rotter’s (1954) theory of

social learning, locus of control has occupied a central position in personality

research for nearly forty years (Jennings & Zeithaml, 1983). Yet, locus of

control has only received attention in the entrepreneurship literature since the late

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locus of control scores (Borland, 1975; Brockhaus, 1980; Ahmed, 1985; Perry, et

aL, 1985). Table 2.2 presents a selected summary of personal control studies of

entrepreneurs.

Unlike investigations of achievement motive which utilize many and varied

approaches to measurement and instrumentation, locus of control and propensity

toward entrepreneurial activity have generally been measured by two scales:

Rotter’s (1966) l-E Scale and Levenson’s (1973) Locus of Control Scale. The

significant difference between the two approaches to measurement of locus of

control stems from two perspectives of dimensionality of the locus of control

construct. Locus of control was originally posited as a unidimensional construct,

i.e., internal vs. external locus of control. This conceptualization was

questioned by Lefcourt (1981), giving rise to more complex multidimensional

conceptualizations of locus of control, where internal orientation has remained

intact, however external orientation has been split into two dimensions: influence

of powerful others [P] and influence of chance [C] (Levenson, 1973). More

R e

pr o d u c e d

wi t h

p er mi s

53


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s s i on

of t h e

c o p y r i gh t

own er .

F ur t h er


pr oh i b i t e d

wi t h o u t

p er mi s s i on.

53

Table 2.2 Selected summary of studies of personal control and entrepreneurs

PERSONAL CONTROL AND ENTREPRENEURS


Borland (1975) University of Texas students who wereenrolled in business courses and who were

intending and not intending to create new

ventures (n = 219)

Levenson's Locusof Control Scales

Significant differences in internal locus ofcontrol were reported between students who

expected to start businesses and those who

did not and a relationship was found between

nAch and ILC.

Brockhaus(1980) Longitudinal study of 31 entrepreneurs, whoat the end of the three year study, were inbusiness, "successful" or who had ceasedoperations, “unsuccessful".

Rotter's l-E Scale Successful entrepreneurs were shown tohave significantly higher internal scores thanunsuccessful entrepreneurs.

Hull, Bosley & Udell(1980)

1970-1974 Graduates of University of OregonCollege of Business Administration (n = 307)categorized as having at least someownership in a new business or no ownership

in a new business

Levenson's Locusof Control Scales -Internal

No significant differences in locus of controlscores were detected betweenowner/managers and employees,

Cromie & Johns (1983) Male founders or "aspiring" entrepreneurs (n

= 42), part-time MBA students, who heldmiddle to senior managerial positions (n =

41)

Rotter l-E Scale Entrepreneurs reported significantly higher

internal locus of control scores thanmanagers and "aspiring" entrepreneurs

scored significantly higher on internal locus

of control than established entrepreneurs.

Sexton & Bowman(1984)

218 university students arranged in threegroups: 45 entrepreneurship majors, 75business majors, 98 non-business majors.,

Levenson's Locusof Control Scales -

Internal

Entrepreneurship majors scored significantlyhigher than non-business majors and higherthan business majors on internal locus ofcontrol,

R e

pr o d u c e d

wi t h

p er mi s

54


72/336

s s i on

of t h e

c o p y r i gh t own er .

F ur t h er

r e pr o

d u c t i on

pr oh i b i t e d

wi t h o u t

p er m

i s s i on.

54

Table 2.2 Selected summary of studies of personal control and entrepreneurs

PERSONAL CONTROL AND ENTREPRENEURS


Ahmed (1985) Entrepreneurs and non-entrepreneurs (n =71,61 respectively) in Bangladeshi

immigrants living in London, UK

Rotter l-E Scale Significant positive relationship betweeninternal locus of control and

entrepreneurship.

Perry, Macarthur,Meredith &

Cunningham (1985)

Three Australian samples of new or intendingsmall business owners (71% were intending),

small business owners in the nursery industryand “super-entrepreneurs” (defined asowners of businesses generating $A10million in annual sales revenue), where n =118,165,18, respectively

Levenson’s Locusof Control Scale:

Internal, Powerful-others, Chance

The results indicated than small businessowners have a lower POLC and CLC score

than new and intending entrepreneurs, andthe super-entrepreneurs have a lower CLCscore than small business owners.

Begley & Boyd (1987) Founder and non-founder members of theSmaller Business Association of NewEngland (n = 239)

Rotter l-E Scale No significant difference was reported amongfounders and non-founders on locus ofcontrol (7.78, 7.73 respectively, with a

maximum score of 10).

Cromie (1987) Male (n = 35) and female (n = 34) would-be

or very early entrepreneurs in northernIreland

Rotter's l-E Scale Male and female subjects scored equally on

locus of control and significantly higher thanscores reported for validation sample ofmanagers.

Greenberger & Sexton(1987a)

Undergraduate and graduate students

majoring in entrepreneurship, or functionalareas of business.

Rotter's l-E

Shortened ScaleSignificant relationship between locus ofcontrol and anticipation of new venture

initi

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