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COMPETING MODELS OF

ENTREPRENEURIAL

INTENTIONS

NORRIS F. KRUEGER, JR.Boise State University, Boise, Idaho

MICHAEL D. REILLYMontana State University, Bozeman, Montana

ALAN L. CARSRUDUniversity of California Los Angeles,

Los Angeles, California

EXECUTIVESUMMARY

Why are intentions interesting to those who care about new venture forma-tion? Entrepreneurship is a way of thinking, a way of thinking that empha-sizes opportunities over threats. The opportunity identification process isclearly an intentional process, and, therefore, entrepreneurial intentionsclearly merit our attention. Equally important, they offer a means to betterexplain—and predict—entrepreneurship.

We don’t start a business as a reflex, do we? We may respond to the conditions around us, suchas an intriguing market niche, by starting a new venture. Yet, we think about it first; we process the cuesfrom the environment around us and set about constructing the perceived opportunity into a viable busi-ness proposition.

In the psychological literature, intentions have proven the best predictor of planned behavior, partic-ularly when that behavior is rare, hard to observe, or involves unpredictable time lags. New businessesemerge over time and involve considerable planning. Thus, entrepreneurship is exactly the type of plannedbehavior (Bird 1988; Katz and Gartner 1988) for which intention models are ideally suited. If intentionmodels prove useful in understanding business venture formation intentions, they offer a coherent, parsi-monious, highly-generalizable, and robust theoretical framework for understanding and prediction.

Empirically, we have learned that situational (for example, employment status or informationalcues) or individual (for example, demographic characteristics or personality traits) variables are poorpredictors. That is, predicting entrepreneurial activities by modeling only situational or personal factorsusually resulted in disappointingly small explanatory power and even smaller predictive validity. Inten-

Address correspondence to Norris F. Krueger, Boise State University, Boise, ID 83725. E-mail: [email protected]

The authors wish to thank all those who helped us refine these ideas. We cannot name you all, but weare especially grateful to Jerry Katz, Gayle Baugh, and Kelly Shaver, also the editor and anonymous reviewerswhose ideas proved invaluable. Remaining errors, of course, remain our responsiblity. We also wish to paytribute to the late Michael Scott, a great loss to the field and to us.

Journal of Business Venturing 15, 411–432 2000 Elsevier Science Inc. All rights reserved. 0883-9026/00/$–see front matter655 Avenue of the Americas, New York, NY 10010 PII S0883-9026(98)00033-0

412 N.F. KRUEGER, JR., M.D. REILLY, AND A.L. CARSRUD

tions models offer us a significant opportunity to increase our ability to understand and predict entrepre-neurial activity.

The current study compares two intention-based models in terms of their ability to predict entrepre-neurial intentions: Ajzen’s theory of planned behavior (TPB) and Shapero’s model of the entrepreneurialevent (SEE). Ajzen argues that intentions in general depend on perceptions of personal attractiveness,social norms, and feasibility. Shapero argues that entrepreneurial intentions depend on perceptions ofpersonal desirability, feasibility, and propensity to act. We employed a competing models approach, com-paring regression analyses results for the two models. We tested for overall statistical fit and how wellthe results supported each component of the models. The sample consisted of student subjects facingimminent career decisions. Results offered strong statistical support for both models.

(1) Intentions are the single best predictor of any planned behavior, including entrepreneurship.Understanding the antecedents of intentions increases our understanding of the intended behavior. Atti-tudes influence behavior by their impact on intentions. Intentions and attitudes depend on the situation andperson. Accordingly, intentions models will predict behavior better than either individual (for example,personality) or situational (for example, employment status) variables. Predictive power is critical to bet-ter post hoc explanations of entrepreneurial behavior; intentions models provide superior predictive va-lidity. (2) Personal and situational variables typically have an indirect influence on entrepreneurshipthrough influencing key attitudes and general motivation to act. For instance, role models will affect entre-preneurial intentions only if they change attitudes and beliefs such as perceived self-efficacy. Intention-based models describe how exogenous influences (for eample, perceptions of resource availability)change intentions and, ultimately, venture creation. (3) The versatility and robustness of intention modelssupport the broader use of comprehensive, theory-driven, testable process models in entrepreneurshipresearch (MacMillan and Katz 1992). Intentional behavior helps explain and model why many entrepre-neurs decide to start a business long before they scan for opportunities.

Understanding intentions helps researchers and theoreticians to understand related phenomena.These include: what triggers opportunity scanning, the sources of ideas for a business venture, and how theventure ultimately becomes a reality. Intention models can describe how entrepreneurial training moldsintentions in subsequent venture creation (for example, how does training in business plan writing changeattitudes and intentions?). Past research has extensively explored aspects of new venture plans once writ-ten. Intentionality argues instead that we study the planning process itself for determinants of venturingbehavior. We can apply intentions models to other strategic decisions such as the decision to grow orexit a business. Researchers can model the intentions of critical stakeholders in the venture, such as venturecapitalists’ intentions toward investing in a given company. Finally, management researchers can explorethe overlaps between venture formation intentions and venture opportunity identification.

Entrepreneurs themselves (and those who teach and train them) should benefit from a better under-standing of their own motives. The lens provided by intentions affords them the opportunity to understandwhy they made certain choices in their vision of the new venture.

Intentions-based models provide practical insight to any planned behavior. This allows us to betterencourage the identification of personally-viable, personally-credible opportunities. Teachers, consul-tants, advisors, and entrepreneurs should benefit from a better general understanding of how intentionsare formed, as well as a specific understanding of how founders’ beliefs, perceptions, and motives coalesceinto the intent to start a business. This understanding offers sizable diagnostic power, thus entrepreneur-ship educators can use this model to better understand the motivations and intentions of students andtrainees and to help students and trainees understand their own motivations and intentions.

Carefully targeted training becomes possible. For example, ethnic and gender differences in careerchoice are largely explained by self-efficacy differences. Applied work in psychology and sociology tellsus that we already know how to remediate self-efficacy differences. Raising entrepreneurial efficacies willraise perceptions of venture feasibility, thus increasing the perception of opportunity.

Economic and community development hinges not on chasing smokestacks, but on growing newbusinesses. To encourage economic development in the form of new enterprises we must first increaseperceptions of feasibility and desirability. Policy initiatives will increase business formations if those ini-tiatives positively influence attitudes and thus influence intentions. The growing trends of downsizing and

COMPETING MODELS OF ENTREPRENEURIAL INTENTIONS 413

outsourcing make this more than a sterile academic exercise. Even if we successfully increase the quantityand quality of potential entrepreneurs, we must also promote such perceptions among critical stakehold-ers including suppliers, financiers, neighbors, government officials, and the larger community.

The findings of this study argue that promoting entrepreneurial intentions by promoting public per-ceptions of feasibility and desirability is not just desirable; promoting entrepreneurial intentions is alsothoroughly feasible. 2000 Elsevier Science Inc.

INTRODUCTIONThe failure of situational and personality measures to significantly predict entrepreneur-ial activity suggests another approach. In this study, we compare the predictive abilityof two intentions models. One was developed and well validated in social psychology(Azjen’s 1991 Theory of Planned Behavior). The other was proposed, but not well testedfrom the domain of entrepreneurship research (Shapero’s 1982 model of the ‘Entrepre-neurial Event’). The comparison will examine the efficacy of these models as they tryto predict the intentions that a sample of soon-to-graduate undergraduate business stu-dents hold towards starting a new business.

Before we consider the past uses of intention models and describe their applicationin the current work, we begin with an examination of the issue of the degree to whichentrepreneurship is planned, and therefore, intentional behavior.

Entrepreneurship as Intentional, Planned BehaviorAlthough it is possible that some will argue otherwise, it seems evident that much ofwhat we consider ‘entrepreneurial’ activity is intentionally planned behavior. Witnessthe tremendous emphasis on the business plan in virtually every academic and practicaltreatment on starting a new business. Even in cases where a unique catalyzing eventlike being downsized may spur the individual to the entrepreneurial act, there are oftenindications of a long time interest and desire to be in business for one’s self.

As new organizations emerge over time, pre-organizational phenomena such asdeciding to initiate an entrepreneurial career are both important and interesting (Bird1988; Katz and Gartner 1988). We thus might conclude that intentionality is typical ofemerging organizations, although the timing of the launch of the new venture mightbe relatively unplanned, such as when a sudden new opportunity surfaces.

We best predict, rather than explain, any planned behavior by observing intentionstoward that behavior—not by attitudes, beliefs, personality, or mere demographics. In-tentions are the single best predictor of planned behavior (Bagozzi et al. 1989). Under-standing intentions thus proves particularly valuable where the focal phenomenon israre, obscure, or involves unpredictable time lags—a focal phenomenon such as entre-preneurship (MacMillan and Katz 1992).

In its simplest form, intentions predict behavior, while in turn, certain specific atti-tudes predict intention. Intentions thus serve as a conduit to better understanding theact itself (Ajzen 1987, 1991). As such, intentions serve as important mediating variablesbetween the act of starting a business venture and potential exogenous influences. Inten-tions toward behavior are absolutely critical to understanding other antecedents. Theseinclude situational role beliefs, subsequent moderators, including the perceived avail-ability of critical resources, and the final consequences, including the initiation of a newventure (or lack thereof).


Understand the consequences of intentions—particularly actions—requires thatwe understand the antecedents of intention. Much of entrepreneurship is intentional,and, therefore, the use of well thought-out and research-tested intention models shouldprovide a good means of examining the precursors to business start-up.

Implications of Entrepreneurial IntentionalityRecognizing that starting a business is an intentional act holds substantial implicationsfor research. If stimulus-response models cannot model intentional behaviors fully, thenwe need testable, theory-driven process models of entrepreneurial cognitions that focuson intentions and their perceptual bases (Bird 1988; Katz and Gartner 1988; Shaverand Scott 1992). When behavior is rare or difficult to observe (Ajzen 1991), intentionsoffer critical insights into underlying processes such as opportunity recognition. Empiri-cally, behavior is often only weakly predicted by attitudes alone or by exogenous factorsthat are either situational (for example, employment status or informational cues) orindividual (for example, demographic characteristics or personality traits). That is, asa result, predicting entrepreneurial activities by modeling only exogenous factors oftenresults in disappointingly small explanatory power. Remember, exogenous influencesusually affect intentions and behavior only indirectly, through attitude changes (Ajzen1991). Thus, intentions models offer an opportunity to increase our ability to explain—and predict—entrepreneurial activity.

Forces acting upon a potential behavior do so indirectly by influencing intentionsvia certain key attitudes. Exogenous variables influence attitudes and may also moder-ate the relationship between intentions and behavior. For example, exogenous factorsmay serve to inhibit one from realizing the intent to be an entrepreneur. Intentions andtheir underlying attitudes are perception-based, which should mean they are learned.Accordingly, they will vary across individuals and across situations. Exogenous personor situation variables have a more indirect influence and thus are only weakly predictiveof entrepreneurial activity.

The predictive power of intentions is even stronger for more molar behavior chains,capturing long-run tendencies by canceling variations in situations over time. For in-stance, the intent to attend church predicts annual attendance much better than intentpredicts attendance in any one week that may be affected by extreme situational factorslike fires, floods, or even a stalled car (Epstein 1979). Intentions are also an unbiasedpredictor of action (Bagozzi et al. 1989), even where time lags exist. Thus, a strong inten-tion to start a business should result in an eventual attempt, even if immediate circum-stances such as marriage, child bearing, finishing school, a lucrative or rewarding job,or earthquakes may dictate a long delay. Accordingly, the relatively molar domain ofentrepreneurship should be quite amenable to the successful use of intentions-basedmodels. Intentions may explain why it appears easier to identify chronic entrepreneurs,those who create several new ventures in a lifetime.

Evidence for Entrepreneurial Intentionality: Ring a Bell, Start a Business?In general, much of human behavior is planned; it is difficult to envision starting a busi-ness where the nascent firm is launched simply as a conditioned response to a stimulus.Specifically, it is equally difficult not to view starting a business as a career choice. Areasonable body of past research supports the contention that career decisions are


clearly planned in nature, not responses to stimuli, thus reflecting some degree of cogni-tive processing. If entrepreneurship does reflect planned, and therefore, intentional be-havior, we should see evidence from other research. Thus, we also examine role modelstudies as well as studies of nascent or beginning entrepreneurs.

Careers Research

Career choices and related phenomena have been demonstrated, both theoretically andempirically, to be cognitive in nature. That is, career-related decisions reflect a process inwhich beliefs, attitudes, and intentions evolve as we cognitively process our knowledge,beliefs, and experiences (Lent et al. 1994). Prior research suggests that entrepreneurialcareers fit this pattern (Davidsson 1991; Katz 1992).

Role Model Research

Evidence from entrepreneurial role models supports the potential of intentions modelsfor predicting new venture creation. Intentions explain conflicts in research findingssuch as the effects of role models and mentors on eliciting subsequent entrepreneurialbehaviors. Entrepreneurial role models only weakly predict future entrepreneurial ac-tivity (Carsrud et al. 1987; Scott and Twomey 1988). Instead, the subjective impact ofrole models is a stronger predictor. That is, role models affect entrepreneurial intentionsonly if they affect attitudes such as self-efficacy (Krueger 1993; Scherer et al. 1989).

Research into “Nascent” Entrepreneurs

Reynolds and associates are amid a large-scale, long-term project to identify and track“nascent” (newly initiated, but not fully launched) ventures and their founders. Al-though it is difficult to identify those who have taken some initial steps but have yetto surface in official records, it is believed that “nascent” entrepreneurs are surprisinglynumerous. Thus, there is much merit in finding out how to help nascent ventures toavoid being “stillborn” (Reynolds 1994).

Possible Limitations

These arguments strongly support testing intentionality-driven models of entrepreneur-ship, but few studies do so explicitly. However, not all agree that intentions are ideal. Forexample, Bagozzi’s work showed that intentions fully mediate the impact of attitudes onbehavior, yet he himself argues that understanding volition requires more complexity(1993). There is also a well-developed model of predicting entrepreneurship that em-ploys attitudes (Robinson et al. 1991b). This suggests that researchers exercise somecaution in applying intentions models.

INTENTIONS AND BEHAVIOR

Theory-Driven Models of IntentionsSocial psychology offers robust and parsimonious models of behavioral intentions withconsiderable proven predictive value for many behaviors. Such models offer sound the-


FIGURE 1 Ajzen’s Theory of Planned Behavior.

oretical frameworks that specifically map out the nature of processes underlying inten-tional behavior. Meta-analyses (Kim and Hunter 1993) empirically show that intentionssuccessfully predict behavior, and attitudes successfully predict intentions. Across awide range of studies relating to a wide variety of types of behaviors and the intentionsto engage in those behaviors, attitudes explain over 50% of the variance in intentions.Intentions explain 30% or more of the variance in behavior. Explaining 30% of thevariance in behavior compares favorably to the 10% typically explained directly by traitmeasures or attitudes (Ajzen 1987). More distal phenomena such as career choices willlikely result in a smaller effect size. Still, intention remains a significant, unbiased pre-dictor of career choice (Lent et al. 1994).

Entrepreneurship models have typically been based on less robust, less predictiveapproaches using personality traits, demographics, or attitudinal approaches (Kruegerand Carsrud 1993; Carsrud et al. 1993). Accordingly, it is appropriate to consider twospecific intention models.

AJZEN’S THEORY OF PLANNED BEHAVIOR (TPB)Social psychologists and marketing researchers have found great success using inten-tion-based models in practical applications and basic research. Such consistently robustand replicable paradigms have been widely applied in practical situations as career pref-erences, weight loss, and seatbelt and coupon use (Ajzen 1987; Kim and Hunter 1993).There have been a number of developmental intention models and constant advancesin modeling intention antecedents have resulted in the current state of the art—Ajzen’sTheory of Planned Behavior (TPB). Figure 1 presents TPB in its most robust andvalid form.

TPB identifies three attitudinal antecedents of intention. Two reflect the perceiveddesirability of performing the behavior: personal attitude toward outcomes of the be-havior and perceived social norms. The third, perceived behavioral control, reflects per-ceptions that the behavior is personally controllable. Perceived behavioral control re-flects the perceived feasibility of performing the behavior and is thus related toperceptions of situational competence (self-efficacy). TPB further specifies antecedentsof each of these attitudes.

Attitude Toward Performing the BehaviorThis construct (akin to expectancy) taps perceptions of the personal desirability of per-forming the behavior. As a check on construct validity, this attitude depends on expecta-


tions and beliefs about personal impacts of outcomes resulting from the behavior. Em-pirically, we solicit critical outcomes of behaviors from a focus group, experts, or holdoutsample. We then measure subjects’ outcome expectations and their perceived probabil-ity of occurring. A quick scan of prior work on entrepreneurial intentions found criticaltestable outcomes such as personal wealth, stress, autonomy, and community benefits(Shapero 1982).

Perceived Social NormsThe second major construct from the TPB taps perceptions of what important peoplein respondents’ lives think about performing a particular behavior. Included would bethe individual’s family expectations about the desirability of becoming a lawyer, doctor,or entrepreneur. These normative beliefs are weighted by the strength of the motivationto comply with them. To check construct validity, these subjective social norms shoulddepend on the expected support of significant others. Interestingly, social norms areless predictive of intentions for subjects with a highly internal locus of control (Ajzen1987) or a strong orientation toward taking action (Bagozzi et al. 1992). Empirically,we must identify the most important social influences (for example, parents, significant-other, friends) including any “role model” or “mentor.” Research into the personal net-works of entrepreneurs often focuses on flows of resources and information. Few studiesaddress social norms and values provided by network members (Shapero 1982).

Perceived Behavioral Control and Perceived Self-EfficacyA major advancement over more widely disseminated intention models is the additionof the third predictive component, perceived behavioral control. Perceived behavioralcontrol overlaps Bandura’s (1986) view of perceived self-efficacy, the perceived abilityto execute a target behavior (Ajzen 1987). As an attribution of personal control in agiven situation, self-efficacy connects conceptually and empirically to attribution theory,already successfully applied to new venture initiation (Meyer et al. 1993). The highlyself-efficacious attribute setbacks as “learning experiences,” not personal “failure” (Ban-dura 1986; Seligman 1990).

Bandura (1986) notes that the mechanisms for influencing efficacy judgments in-clude ‘enactive mastery’ (hands-on experience), vicarious learning, and physiological/emotional arousal.

Self-Efficacy and Managerial Behavior

Self-efficacy has been linked theoretically and empirically with many managerial andentrepreneurial phenomena. Feasibility perceptions consistently predict goal-directedbehavior where control is problematic (Ajzen 1991). Most important, feasibility percep-tions drive career-related choices, including self-employment as an entrepreneur. Forexample, gender and ethnic differences in career preferences seem to be fully mediatedby differences in self-efficacy (Hackett et al. 1993). Correlations between self-efficacyand career intent range from 0.3 to 0.6 (Bandura 1986; Lent et al. 1994). This correlationis better than most predictors used in entrepreneurship research, such as locus of control(Brockhaus and Horwitz 1986).


FIGURE 2 Shapero-Krueger Model.

Self-Efficacy and Entrepreneurial Behavior

Self-efficacy is linked to initiating and persisting at behavior under uncertainty, to set-ting higher goals, and reducing threat-rigidity and learned helplessness (Bandura 1986).This is important because opportunity recognition depends on situational perceptionsof controllability (Dutton 1993) and self-efficacy (Krueger and Dickson 1994).

Much as self-efficacy predicts opportunity recognition, self-efficacy perceptions arealso pivotal to self-employment intentions (Scherer et al. 1989). Self-reported compe-tencies are predictive of entrepreneurial performance (Chandler and Jansen 1992). En-trepreneurship researchers largely ignore the concept of self-efficacy despite its impor-tance and proven robustness at predicting both general and specific behaviors. Forinstance, role models affect entrepreneurial intentions only if they affect self-efficacy. Inaddition, self-efficacy has been associated with opportunity recognition and risk-taking(Krueger and Dickson 1994) as well as career choice (Bandura 1986).

SHAPERO’S MODEL OF THE ‘ENTREPRENEURIAL EVENT’ (SEE)Now that the first contender for the title of best predictor of the intention to start abusiness is fully explicated, we turn to the domain of entrepreneurial research to seeif there is anything already extant that would serve as an appropriate comparison. Uponmodest reflection, it is clear that Shapero’s (1982) model of the ‘Entrepreneurial Event’(SEE) is implicitly an intention model, specific to the domain of entrepreneurship. Inthe SEE, intentions to start a business derive from perceptions of desirability and feasi-bility and from a propensity to act upon opportunities.

Shapero’s model (Figure 2) assumes that inertia guides human behavior until some-thing interrupts or “displaces” that inertia. Displacement is often negative, such as jobloss or divorce, but it can easily be positive, such as getting an inheritance or winningthe lottery. Displacement precipitates a change in behavior where the decision makerseeks the best opportunity available from a set of alternatives (Katz 1992). The choiceof behavior depends on the relative “credibility” of alternative behaviors (in this situa-tion to this decision maker) plus some “propensity to act” (without which significantaction may not be taken). “Credibility” requires a behavior be seen as both desirableand feasible. Entrepreneurial events thus require the potential to start a business (credi-bility and propensity to act) to exist before the displacement and a propensity to actafterwards (Shapero 1982).

As with TPB, exogenous influences do not directly affect intentions or behavior.They operate through person-situation perceptions of desirability and feasibility. In arecent study perceived feasibility, perceived desirability, and the propensity to act ex-


plain well over half the variance in intentions toward entrepreneurship; feasibility per-ceptions explained the most variance (Krueger 1993). Shapero offers evidence of howperceptions are critical in this process. Significant life events (job loss, migration, etc.)can precipitate sizable increases in entrepreneurial activity. The founders have notchanged, only their perceptions of the “new” circumstances have. Their entrepreneurialpotential clearly existed, but the potential required displacement to surface. Shaperoalso offers examples of company foundings where only subjective circumstances hadchanged, such as approaching one’s fortieth birthday.

Perceived Desirability and Perceived FeasibilityShapero defined perceived desirability as the personal attractiveness of starting a busi-ness, including both intrapersonal and extrapersonal impacts. Perceived feasibility isthe degree to which one feels personally capable of starting a business. Empirically,Shapero proposed a testable eight-item inventory of questions aimed at different as-pects of perceived desirability and feasibility. Empirical measures of self-efficacy (ante-cedents of perceived feasibility) assess beliefs that one can personally execute a givenbehavior (“I can get 8 out of 10 calculus problems right”). Bandura (1986) argues forglobal measures summing self-efficacy at critical competencies as identified by experts,focus group, or a holdout sample.

Propensity to ActShapero conceptualized “propensity to act” as the personal disposition to act on one’sdecisions, thus reflecting volitional aspects of intentions (“I will do it”). It is hardto envision well-formed intentions without some propensity to act. Conceptually, pro-pensity to act on an opportunity depends on control perceptions: that is, the desire togain control by taking action. Empirically, we must identify a measure closely linkedto initiating and persisting at goal-directed behavior under uncertainty and adversity.Shapero suggested internal locus of control, although managers often score equally asinternal as entrepreneurs do. Another well-established conceptualization of this phe-nomenon is “learned optimism.” This highly valid, reliable measure consistently pre-dicts commitment to goal-directed behavior in many settings (Seligman 1990).

COMPARING AND CONTRASTING THE MODELSBoth TPB and SEE are largely homologous to one another. Both contain an elementconceptually associated with perceived self-efficacy (perceived behavioral control inTPB; perceived feasibility in SEE). TPB’s other two attitude measures correspond toSEE’s perceived desirability. Yet, one can have great potential for entrepreneurial ac-tivity without corresponding intentions. Thus, it would appear that appropriate attitudesmay not be enough. Many business founders had little intention of starting a businessonly a few years before (Katz 1992). Then, consider the many nascent entrepreneurswho never launch their intended businesses (Reynolds 1994). To account for these phe-nomena, SEE adds a volitional element to intentions: the propensity to act.

Finally, exploratory research on entrepreneurial intentions identified indepen-dently much the same antecedent attitudes as these models propose, suggesting furthersupport for the cognitive framework that underlies planned, intentional behavior (Da-vidsson 1991).


CONCEPTUAL AND EMPIRICAL ISSUES IN MODEL TESTINGBefore the test of the two models can be conducted, it is necessary to clear up a fewissues. Intentions refer to the target behavior of starting a business. By definition, thisbehavior is planned. Entrepreneurial intentions also reflect the founders’ vision of theemerging organization and subsequent corporate culture. If organizational emergenceis a process consisting of a series of purposeful, perception-driven decisions as Shapero(1982), Bird (1988), and Katz and Gartner (1988) suggest, then intentions channel thisdecision-making process. Conceptually and empirically, attitudes and intentions shouldrefer clearly to the same target behavior at the same level of specificity (Kim andHunter 1993).

Sampling IssuesMeta-analysis (Kim and Hunter 1993) suggests the sensitivity of intentional processesto initial conditions. This urges us to study entrepreneurial phenomena before they oc-cur and to include non-entrepreneurial intending subjects. Such purposive sampling isnecessary for proper theory testing (MacMillan and Katz 1992). Clinical studies of dis-ease identify subjects prior to the onset of illness, while geologists study volcanoes priorto eruption and include volcanoes in various stages of dormancy. Sensitivity to initialconditions in new venture initiation processes means that it is inherently nonlinear. Sam-pling only successful or current entrepreneurs introduces biases that censor data unpre-dictably, especially for rare phenomena. Samples of upper division students reveal voca-tional preferences at a time when they face important career decisions. Such samplesexplicitly include subjects with a broad spectrum of intentions and attitudes toward en-trepreneurship. Details of a business may not yet have coalesced in subjects’ minds, butglobal career intentions should have (Scherer et al. 1989).

RESEARCH DESIGNAssessing the relative ability of TPB and SEE in explaining entrepreneurial intentionsrequires comparing and contrasting them. Both models may reasonably fit the empiricaldata, yet neither model may be fully supported. On the other hand, both models mayprove equally weak. We thus use Chamberlin’s approach (1890/1965) of multiple work-ing hypotheses that we test against one another, rather than against an arbitrary stan-dard. As we test these models via regression analysis, the appropriate comparative diag-nostic is adjusted R. We must also consider whether data support each theory-basedcomponent of the models. This allows us to assess where overlapping models truly differ.In short, a competing models approach is vital to assess well-established models.

Differences in measuring perceived feasibility might dominate any global differ-ences between the models. We thus elected to use a common, theory-driven measureof perceived feasibility for both models (and the same intentions measure). As thesecomponents are common to both models, any differences in the models must derivefrom the other components. Differences might also derive from faulty measures. Tocheck construct validity, we tested key antecedents for each component. Perceived feasi-bility should be significantly linked to a measure of perceived self-efficacy. Attitudestoward the act should be linked to expected utilities from key outcomes. Subjectivenorms should be linked to normative beliefs weighted by motive to comply (Ajzen


TABLE 1a. Descriptive Statistics

Variable Mean Std Dev

Intentions 26.67 28.07Global Perceived Feasibility 46.30 34.70Global Perceived Desirability 58.50 34.01Attitude toward Act 56.64 32.01Subjective Norms 4.18 1.64Sum of Self-Efficacies 168.56 39.79Sum of Expectancies 114.16 46.04Sum of Normative Beliefs 24.26 12.91Sum of Perceived Desirabilities 21.25 4.14

1987). Perceived desirability should be linked to Shapero’s scale for perceived desirabil-ity. Statistical support lessens the risk of differences between models resulting fromflawed measures.

We tested the TPB model by regressing intentions on attitudes toward the act, sub-jective norms, and perceived feasibility. We tested the SEE model by regressing inten-tions on perceived desirability, perceived feasibility, and propensity to act.

DATA AND MEASURES

Sample and Statistical PowerThe sample comprised 97 senior university business students (40 female) currently fac-ing important career decisions. This lets us examine entrepreneurial processes prior toactual entrepreneurial activity. Note that these models hold for subjects of all ages. Evenamong adolescents, career intent significantly predicts eventual career choice (Trice1991). The sample provides subjects with broad ranges of experiences, intentions, atti-tudes toward entrepreneurship, and dispositions. This reduces risk of range restriction,though the sample did appear homogeneous in ethnicity. This sample will be used ina longitudinal follow-up. A one-tailed test with a50.10, expected effect size of 0.3 (afteradjusting for reliabilities), and sample size of 97 yields less than a 20% chance of a TypeII error. See Tables 1(a) and 1(b) for descriptive statistics.

Measures1

Measures Used in Both Models

Intentions: “Estimate the probability you’ll start your own business in thenext 5 years?”

Global Perceived Feasibility: “How practical is it for you to start your ownbusiness?” (scale: 0 to 100)

Perceived Self-Efficacy: This sums perceived self-efficacies at critical entre-preneurial tasks. [Reliability: Cronbach’s a was 0.83.]

1 Full instrument is available from the lead author.


TABLE 1b. Correlation Matrix

GPF GPD A_ACT SUBJNORM

INTENT — 0.517* 0.572* 0.553* 0.310GPF 0.701* 0.668* 0.308GPD — 0.718* 0.360A_ACT — 0.290

(*p , 0.001, otherwise, p , 0.01)

Measures Used Only in TPB

Attitude Toward the Act: “Is starting your own business an attractive ideato you?” (scale: 0 to 100)

Social Norms: “Would family and friends want you to start your own busi-ness?” (scale: 0 to 100)

Expected Utilities: Respondents rated the perceived value of five differentoutcomes (autonomy, stress, financial performance, personal satisfaction,personal quality of life) of starting a business and the likelihood of oc-curring. This measure is the sum of the values weighted by the expectedlikelihoods. (Each item used a 7-point Likert scale.)

Normative Beliefs and Motives to Comply: Respondents rated perceived re-actions of four different normative influences (friends, parents/family,mentor/role model, ‘significant other’) to the subject starting his/her ownbusiness and the perceived importance of their opinions. This measuresums the strength of the perceived reactions weighted by perceived im-portance.

Measures Used Only in SEE

Global Perceived Desirability: “On a scale from 0 to 100, how desirable isit for you to start your own business?”

Specific Perceived Desirabilities: Four items from Shapero measured on7-point scales. Cronbach’s a of 0.69.

1. “I would love doing it” (I’d love doing it—I’d hate doing it)2. “How tense would you be?” (very tense—not tense at all)3. “How enthusiastic would you be?” (very enthused—very unenthusiastic)4. “How overworked would you be?” (not at all overworked—extremely overworked)

Propensity to Act: Version of Seligman’s measure of learned optimism. [Re-liability: a of 0.79.]

RESULTS

Theory of Planned BehaviorFigure 3a shows significant, though not complete, support for the theory of plannedbehavior. Adjusted R2 for the regression of global perceived feasibility, attitude, andsocial norms upon intentions was 0.350 (p , 0.0001). However, the social norms compo-nent was non-significant, though the raw correlation between social norms and inten-


FIGURE 3a Results for Theory of Planned Behavior.

tions was significant (R2 5 0.31, p , 0.002). [Social norms correlated with attitude towardthe act (R2 5 0.29, p , 0.004) and perceived feasibility (R2 5 0.31, p , 0.002).] Intentionswere predicted significantly by global perceived feasibility (p , 0.005) and attitude to-ward the act (p , 0.05). As expected, perceived feasibility represented a stronger influ-ence on intentions. Every other relationship predicted by the theory of planned behav-ior was significant (p , 0.05 or better) in the expected direction. Each attitude measurewas associated significantly with theorized antecedents, including the relationship be-tween social norms and its predicted antecedent. Perceived feasibility was correlatedwith self-efficacy (R2 5 0.100, p , 0.002). Attitude toward the act was correlated withexpected utilities (R2 5 0.189). Social norms were correlated with normative beliefsweighted by motive to comply (R2 5 0.171, p , 0.008).

Shapero ModelFigure 3b shows full support for the Shapero model of the ‘Entrepreneurial Event’(SEE). The adjusted R2 for the regression of global perceived feasibility, global per-ceived desirability, and propensity to act upon intentions was 0.408 (p , 0.0001). Everyrelationship predicted by the model was significant (p , 0.05 or better) in the expecteddirection. Intentions were correlated significantly with global perceived feasibility (p ,0.004) and global perceived desirability (p , 0.005).

It is important to note the comparable impact in the TPB model. Intentions werealso predicted by propensity to act (p , 0.04). As above, each attitude measure wasassociated significantly with its theorized antecedents. As noted, global perceived feasi-bility was correlated with perceived self-efficacy (R2 5 0.111, p , 0.002). Global per-ceived desirability was correlated with specific perceived desirabilities (R2 5 0.231,p , 0.0001).

CONCLUSIONS AND DISCUSSION

Comparing and Contrasting the ModelsFigure 2 suggests the Shapero model offers a marginally higher adjusted R2. More im-portant, every component of the Shapero model was supported statistically at p , 0.05,while the variance explained uniquely by the social norms component of the Ajzen


FIGURE 3b Shapero-Krueger Model.

model was non-significant. Are there systematic problems in measuring social normsrelevant to entrepreneurial populations? Or, do social norms simply not predict entre-preneurial intentions in this sample? It is possible that social norms may only be impor-tant in ethnic groups who have strong traditions of entrepreneurship. Or, there may becultural differences in the importance of social norms in economic activity. For example,intentions research in Scandinavia finds a greater impact from social forces (Davidsson1991; Reitan 1997).

Alternately, perhaps the popular stereotype of entrepreneurs as iconoclastic indi-vidualists captures a tendency toward inner-directedness. Ajzen’s review (1987) and re-lated work by Bagozzi et al. (1992) notes that a highly internal locus of control reducedthe impact of social norms.

In addition, in the minds of subjects, social norms can be hopelessly confoundedwith other attitudes (recall that social norms were associated both with attitude towardthe act and with perceived feasibility). Reitan (1997) suggests that perceived socialnorms may instead serve to moderate or even mediate the impact of the other attitudeson intentions. Prior research is persuasive that social influences (such as personal net-works) are nonetheless present in entrepreneurial decision making (Dubini and Aldrich1991). Finally, social norms might prove a more useful predictor of intentions towardcorporate ventures, as the organizational setting is social in nature. More research onthis conundrum is definitely needed.

The Shapero model appears slightly superior for assessing entrepreneurial inten-tions, at least as the models are specified currently. However, the theory of plannedbehavior appears equally useful. Both of these two intention-based models offer re-searchers a valuable tool for understanding the process of organizational emergence.

Limitations of the StudyBefore reviewing the implications of this effort for research, practice, and public policy,it is appropriate to consider some of the limitations of this study. Specifically, one mightwant to be cautious about interpreting the results in light of the following factors:


Student Sample

The respondents in the study were students facing an immediate career choice, forwhom starting a business may be a realistic option. Also, even very early career intentis a good predictor (Trice 1991). Nonetheless, they are still students. Researchers andpractitioners may thus be skeptical, even if the sample is valid. For instance, we knowthat student entrepreneurs are unlike other students and unlike other entrepreneurs(Robinson et al. 1991a). On the other hand, students and managers respond similarlywhen queried about strategic decisions (Bateman and Zeithaml 1989).

Behavior

The study merely modeled the ability of these models to predict intentions. Ultimately,we are more interested in behavior. It remains to be seen that intending to start a busi-ness is as well predicted by intentions as other behaviors are by intentions, but we havethe opportunity to follow up on this sample in a few years.

Cross Sectional Study

Along the same lines, we will need to ultimately examine the relationship between en-trepreneurial attitudes, entrepreneurial intentions, and entrepreneurial behaviors overtime. The current study looks only at a snapshot to explore whether the static relation-ships among the first two of these factors are congruent with the predictions derivedfrom two competing models. However, cross-sectional models are widely used in inten-tions research without losing validity or robustness (Ajzen 1987).

Single-Item Measures

It would be equally valuable if future studies would employ multiple-item measures ofkey constructs to reduce measurement error. Although research into intentions and self-efficacy has often used single-item measures, multiple items would increase confidenceof researchers at little cost.2

IMPLICATIONSPast research shows the importance of intentions and the robustness of the known ante-cedents of intentions, especially where focal phenomena are relatively rare as with en-trepreneurship. These findings offer little, if any, contrary evidence. What can we thusconclude from explicit consideration of entrepreneurial intentionality?

General ImplicationsIntentions consistently and robustly predict planned behaviors. As entrepreneurshipis a planned behavior, we should find intentions models quite useful. Understandingthe antecedents of intentions implies understanding the behavior. Attitudes influencebehavior through effects on intentions. Intentions and attitudes depend on the situation

2 The authors thank the editor and reviewers for reminding us of this.


and person. Accordingly, intentions models predict behavior better than either individ-ual (for example, personality) or situational (for example, employment status) variables.Predictive power is critical to better post hoc explanations of entrepreneurial behavior.Intentions models provide superior predictive validity.

Personal and situational variables typically have an indirect influence on entrepre-neurship by influencing key attitudes and general motivation to act. For instance, rolemodels affect entrepreneurial intentions largely because they affect attitudes and beliefssuch as perceived self-efficacy. Intention-based models offer mechanisms to assess rela-tive impacts of exogenous influences (for example, perceptions of resource availability)on intentions and, ultimately, venture creation.

The versatility and robustness of intention models support the broader use of the-ory-driven, comprehensive, testable process models in entrepreneurship research (Mac-Millan and Katz 1992). For instance, understanding the nature of intentional behaviorhelps explain why many entrepreneurs decide to start a business long before they scanfor opportunities or decide exactly what type of business to start (Brockhaus andHorwitz 1986). The growing interest in entrepreneurs’ beliefs and decision-makingprocesses helps us to begin asking what kinds of factors contribute to the decision tobecome involved in entrepreneurial activity. Intention-based models appear mostpromising for research and for teaching and practice.

Research ImplicationsIntentions models offer great utility and considerable potential for entrepreneurshipresearchers in advancing theory. Using formal intentions models offers the researchera well-developed theory base used in multiple disciplines and also offers clear, testablehypotheses. Both increase the rigor of research without losing any relevance. This ap-proach and the significant findings add strong evidence for person 3 situation variables,as opposed to the more usual person variables or situational variables.

Cognitions are Important

The findings here add to existing theory and evidence that argues for the importanceof cognitive issues. This tells us that it would be most fruitful to open the cognitive ‘blackbox’ and try to understand the cognitive processes inside. For example, certain learnedattitudes such as self-efficacy are vital. Okay, how do we learn them? We know thatskills and skill sets are vital; how do we learn them? And how do we best teach them?For example, the impact of teaching entrepreneurial competencies on perceptions ofventure feasibility could be important for specific types of ventures. For example, wecan identify more specific task self-efficacies that influence perceptions of feasibility forhigh technology ventures.

Business Plans and Planning

Research has explored many aspects of new venture plans. Intentionality argues insteadthat we study the planning process itself. Understanding intentions helps us to betterunderstand where ideas for a business venture come from and how the venture becomesa reality. Research has explored many aspects of new venture plans. Intentionality ar-


gues instead for studies on the process of planning: how do new venture plans evolvefrom an idea to a well-developed business concept (Bird 1988; Katz and Gartner 1988)?

Extending the Domain

We can use intentions models to predict other strategic decisions (for example, the deci-sion to grow or exit a business). We can model the intentions of critical stakeholders inthe venture, such as venture capitalists’ intentions toward investing in a given company.Finally, management researchers can explore significant conceptual overlaps betweenintentions and opportunity identification. Intentions offer a useful vehicle for gainingnew insights into the processes by which we identify opportunities and how we formulateand implement resulting actions.

Addressing Past Criticisms

Methodologically, intentions models address several criticisms often leveled at entre-preneurship research. One significant criticism is emphasizing retrospective and posthoc research methods. Instead of the more prevalent ad hoc models and measures ofnew venture initiation, critics suggest careful testing of theory-driven models (Carsrudet al. 1993; MacMillan and Katz 1992).

Hindsight can be dangerously imperfect for understanding any intentional behav-ior. We too often accept a spurious relationship based on a biased recall measure oran inappropriately censored sample, then compound the problems by using the unpre-dictably biased results in an ad hoc model. For instance, we see models based on spuriousdemographic relationships (Carsrud et al. 1993). The net result is often irreproducibleconclusions about the emergence of new businesses.

Thus, if organizational emergence is an intentional process (Bird 1988; Katz andGartner 1988), why not use intentions models? Let us evaluate the entire emergenceprocess including not only successful and unsuccessful entrepreneurs, but also thosewho change their minds and those whose ventures fail (Reynolds 1992). We can usearchival databases to test psychosocial models longitudinally (Katz 1992).

Exogenous Influences

The rewards from using intentions models include a better understanding of how exoge-nous factors influence the emergence of new ventures. The literature (Shapero 1982)offers an interesting menu of exogenous factors that represent potential testable ante-cedents of attitudes (for example, traits, demographics, skills, and social, cultural, andfinancial support). We can test the impact of teaching critical managerial and entrepre-neurial competencies on perceptions of venture feasibility, including specific types ofventures. Will perceived self-efficacy at new product development tasks influence theperceived feasibility of high-tech ventures?

From Intent to Action

Katz (1992) and Reynolds (1994) both note the often-significant time lags from intentto action. This argues that studying entrepreneurs should prove useful to a better under-standing of how intentions are (or are not ) realized in strategic decision-making and


how intentions change. We can use intention-based models on corporate ventures orfor other strategic decisions such as the decision to exit or to grow a firm. An especiallyintriguing possibility is to model the intentions of critical stakeholders in the venture.For example, what are the intentions of venture capitalists toward investing in a givencompany? Do they perceive their most influential social norms to be within the venturecapital community? What specific self-efficacies influence perceptions of a potential in-vestment’s feasibility? What about other stakeholders such as bankers, suppliers, andemployees? Meyer et al. (1993) have already explored differences in causal attributionsbetween venture capital investors and investees.

Implications for Management ResearchersWe see how studying entrepreneurs could be more broadly useful to management re-search. Studying entrepreneurs already increases our understanding of intentions asShapero’s notions of “displacement” and “propensity to act” already add to our under-standing of intention-behavior relationships. Adding volition makes a useful contribu-tion of entrepreneurship research to the study of strategic decision making.

Equally important is the significant conceptual overlap between intentions and op-portunity identification. Intentions represent a useful vehicle for gaining new insightsinto the processes by which we identify opportunities and threats and how we formulateand implement resulting action. This extends the impact of intentions models beyondindependent new ventures to any arena where opportunity identification is important.

Finally, as entrepreneurs are highly visible exemplars of organizational enactment,it should be easier to track the cognitions of founders than to explore more complexorganizational mindsets (Guth et al. 1991).

Implications for TeachersEducators can invoke this model to better understand our students’ motivations andintentions, and thus provide better training. As noted earlier, gender and ethnic differ-ences in career choice derive from differences in perceived self-efficacy, differences thatwe already know how to remedy. For example, we still hear that women entrepreneursare more prone to open businesses in the retail sector than in manufacturing. This sug-gests that in our teaching or training we look for differences in perceived desirabilityand, more likely, perceived feasibility. If a critical deficit lies in perceived feasibility,we know how to increase self-efficacy perceptions. However, the intentions model iswhat gave us the diagnosis.

This diagnostic strength allows educators a different way of looking at most casestudies. Consider the case of Dorsey Trailers, a fascinating entrepreneurial buyout ofa truck trailer manufacturer (Lane 1995). Entrepreneur Marilyn Marks not only boot-strapped the buyout but has weathered (literally) both Hurricane Opal and a flood. Usu-ally, most attention is paid to her being a nontraditional entrepreneur (a young womanin the Southern U.S. building truck trailers?) or the recovery from two weather disasters.However, one can also examine Marks’s strategies through the lens of intentionality.That is, the specific innovative strategies chosen seem to clearly reflect courses of actionthat Marks deemed desirable and feasible—or that could be made feasible.


Implications for PractitionersIntentions-based models yield useful practical applications whenever behavior is inten-tional. Consultants, advisors, and the entrepreneurs themselves will all benefit from abetter understanding of how intentions are formed and how founders’ beliefs, percep-tions, and motives coalesce into the intent to start a business.

The entrepreneurs themselves should gain considerable value from a better under-standing of their own motives. The lens provided by intentions affords them the oppor-tunity to understand why they made certain choices in their vision of the new venture.It is useful to recognize how we differ across types of business in our perceptions ofdesirability and feasibility.

Implications for Public PolicyPolicy makers benefit from understanding that government initiatives will affect busi-ness formations only if these policies are perceived in a way that influences attitudesor intentions. Two growing societal trends make all this more than a sterile academicexercise. Downsizing and outsourcing currently dominate much of the U.S. corporatelandscape. Recognition is growing among policy-makers that economic and communitydevelopment hinges not on smokestack-chasing, but on growing your own businesses.If we seek to encourage economic and community development by promoting new en-terprises, we need a much better understanding of the process. Robust empirical supportfor both models argues that promoting entrepreneurial intentions requires promotingperceptions of both feasibility and desirability.

Even if we increase the quantity and quality of potential entrepreneurs, we mustalso increase the credibility of entrepreneurship among critical stakeholders in the com-munity. Government officials, politicians, suppliers, investors, bankers, friends andneighbors, and the larger community must also see entrepreneurial activity as desirableand feasible (Shapero 1982). We must also make certain that we include all strata ofsociety (Hood and Young 1993). Ethnic and gender differences in career choice mayderive from self-efficacy differences, but we know how to remediate such differences.Finally, this should all be done with an eye toward encouraging already-launched busi-nesses. Reynolds eloquently points out that “stillborn” ventures contribute little to alocal community, thus we must empower already-nascent entrepreneurs (Reynolds1994).

FUTURE RESEARCH NEEDS: EXTENDING MODELSPECIFICATION AND MEASURESWe must address the seeming non-impact of social norms on entrepreneurial intentionsin this sample. Given that research elsewhere into entrepreneurial intentions (Da-vidsson’s 1991 work with Swedish samples; Reitan 1997; Shepherd and Douglas 1997)finds a significant impact, we must consider specifying different measures (includingmultiple-item measures). Research on entrepreneurial networks suggests that the socialnorms of network members may have more significant impacts on intentions than opin-ions of family and friends. Measures of social capital may significantly affect a behavior’sperceived feasibility. Definitely, we should also test these models on samples of subjectsfacing career decisions who differ in age, experience, and ethnicity.


We could test alternate comprehensive processes. We have already noted that ex-ploratory studies of intent have independently surfaced antecedents of entrepreneurialintentions that parallel the Shapero/SEE framework, but have also added interestingrefinements (Davidsson 1991). The most recent research suggests that the model itselfcould be re-specified (Shepherd and Douglas 1997; Reitan 1997). For example, Reitan’swork argues that perceived social norms might prove as a better mediating or moderat-ing variable. Finally, one might construct a competing models test of intentions modelsversus alternate attitude models (Robinson et al. 1991b).

We can also examine refinements from the intentions literature, for example,, priorbehavior or experience may explain additional variance in intentions and behavior (Aj-zen 1987). For example, intentions models assume that target behaviors are salient inthe decision maker’s mind. Even with significant potential to act, there need not be anyintentions to do so. Salient change in the situation is necessary to precipitate intentionsand thus behavior. For example, an unexpected situation is one of the rare non-inten-tional predictors of behavior which are statistically significant (Cote et al. Reilly 1985).

Finally, we certainly need to explore how intention precipitates into behavior. Al-though this study focused on the antecedents of intentions to start a business, futureresearch must also explore relationships between intentions and behavior. Shapero(1982) proposed that some precipitating event triggers the process and offers a list ofprecipitating events worth testing. This includes a follow up of these subjects or otherlongitudinal design.

A variant on this is suggested by the case of Marilyn Marks and Dorsey Trailers(Lane 1995). If we see an actionable opportunity, we might focus on making it feasible(thus changing intent might be changing feasibility perceptions). Recall that self-efficacycan increase significantly from emotional arousal: I have to do this, therefore I can doit. This argues for exploring the possibility that the causal relationships might run inboth directions. If true, that would offer numerous opportunities to expand our under-standing of intentions.3

However, in conclusion, we must recognize that the intentional nature of entrepre-neurial activity has important ramifications, but it also offers sizable opportunities fora deeper, richer understanding of entrepreneurs and entrepreneurship.

If Hamel and Prahalad are correct in urging the planned, intentional pursuit of newopportunities, then we all need to better understand how we learn to perceivethose opportunities.

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