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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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1*1 National Library of CanadaAcquisitions and Bibliographic Services
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Ni la these ni des extraits substantiels
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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
and entrepreneurs . . . . . . . 53
Table 2.3 Selected summary of studies of self-esteem
and entrepreneurs . . . . . . . 61
Table 2.4 Selected summary of studies of preference for innovation
and entrepreneurs . . . . . . . 66
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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5
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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10
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
TABLE 1.1: Summary of home-based work definitions and typologies
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
TABLE 1.1: Summary of home-based work definitions and typologies
" '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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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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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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(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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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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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
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.
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,
R e pr o d u c e d
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
Table 2.1 Selected summary of studies of achievement motivation and entrepreneurs
ACHIEVEMENT MOTIVATION AND ENTREPRENEURS
Author (year) Sample Instrumentation Key Findings
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
MotivationQuestionnaire
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
MotivationQuestionnaire
Aggregate mean scores indicate that superentrepreneurs exhibited highest nAch scores,
while new and intending small businessowners scored lowest.
R e pr o d u c e d
wi t h
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
Table 2.1 Selected summary of studies of achievement motivation and entrepreneurs
ACHIEVEMENT MOTIVATION AND ENTREPRENEURS
Author (year) Sample Instrumentation Key Findings
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
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.
46
Table 2.1 Selected summary of studies of achievement motivation and entrepreneurs
ACHIEVEMENT MOTIVATION AND ENTREPRENEURS
Author (year) Sample Instrumentation Key Findings
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
50
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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
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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
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.
53
Table 2.2 Selected summary of studies of personal control and entrepreneurs
PERSONAL CONTROL AND ENTREPRENEURS
Author (year) Sample Instrumentation Key Findings
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
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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
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
Author (year) Sample Instrumentation Key Findings
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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