Entrepreneurial behaviour

1. The Entrepreneurial
Motivation
Mohd Rafi/ Ghazali Ahmad, Ph.D
©2009/10

2. Lecture Outline
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What is entrepreneurial motivation?
Sources of motivation
Models of entrepreneurial motivation
Triggers and barriers to
entrepreneurial motivation
Ways to enhance entrepreneurial
motivation
APT 2013
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3. What is EM?
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Entrepreneurial motivation refers to
the way in which urges, drives,
desires, striving, aspirations or needs
direct, control or explain the
entrepreneurial behavior of human
beings.
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4. Elements of EM
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Motive
Motive
Behavior
Goal
Goal
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Behavior
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5. Relationship between
Motive, Behavior & Goal
Help
(Assistance)
Effort
Goal
Barriers
(Internal)
Activity
Intention
(Motive)
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Barriers
(External)
Expectation
(+ve/-ve)
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Feelings
(+ve/-ve)
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6. Sources of Entrepreneurial
Motivation
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Internal/Intrinsic
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Personal goals
Need for achievement
Ambition
External/Extrinsic
–
–
–
–
–
Compulsion
Support
Successful entrepreneurs
Access to capital
Status
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7. Models of EM
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Needs-based entrepreneurial
motivation
A general model of entrepreneurial
motivation
Entrepreneurial intentions model
Enterprise formation model
Model of entrepreneurial motivation
and the entrepreneurial process
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8. David McClelland,
Psychologist
(1917-98)
Needs-based
Entrepreneurial
Motivation
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9. David McClelland's NeedsBased Motivational Model
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Need for achievement (n-ach)
– attainment of realistic but challenging goals, and
advancement in the job. Feedback as to
achievement and progress, and a sense of
accomplishment.
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Need for authority and power (npow)
– influential, effective and to make an impact
,personal status and prestige.
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Need for affiliation (n-aff)
– friendly relationships and interaction with other
people
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Need for security/safety (n-sec)
– Comfortable with secure employment and
unwillingness to take higher risk
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10. Behavior of
Achievement-Motivated
People
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A chievement is more important than material or
financial reward.
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A chieving the aim or task gives greater personal
satisfaction than receiving praise or recognition
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F inancial reward is regarded as a measurement of
success, not an end in itself.
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S ecurity is not prime motivator, nor is status.
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11. 
Behavior of
Achievement-Motivated
People
F eedback is essential, because it enables
measurement of success, not for reasons of
praise or recognition.
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A chievement-motivated people constantly
seek improvements and ways of doing things
better.
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A chievement-motivated people will logically
favor jobs and responsibilities that naturally
satisfy their needs, i.e. offer flexibility and
opportunity to set and achieve goals, e.g.,
sales and business management, and
entrepreneurial roles.
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12. 
Behavior of
Achievement-Motivated
People
C apacity to set high personal
but obtainable goals
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C oncern for personal
achievement rather than the
rewards of success
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T he desire for job-relevant
feedback (How well am I doing?)
rather than for attitudinal
feedback (How well do you like
me?)
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13. A Model of Entrepreneurial Motivation
Internal
PC PE PG
Source: Naffziger, Hornsby and Kuratko, (1994)
Expectation/
Outcome
Comparison
Decision
to behave
Entrepreneurially
Intrinsic/Extrinsic
Rewards
Entrepreneurial
Strategy
Entrepreneurial
Management
Firm
Outcomes
Implementation/
Outcome
Perception
BE IDEA
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Internal/External
PC = Personal Characteristics
PE = Personal Environment
PG = Personal Goals
BE = Business Environment
© 2009/10 Dr. Rafi/Dr. Ghazali
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14. Entrepreneurial
Intentions Model
Perceived net
desirability of
self-employment
(NDSE)
Tolerance for
risk (TR)
Self-employment
intentions
Perceived
feasibility (selfefficacy) of selfemployment (SE)
Source: Gerry Segal, Dan Borgia & Jerry Schoenfeld (2005)
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15. Factors Critical to Start-Up &
Reasons for Not Starting-Up
Source: Martyn Roberton et.al. (2003)
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16. A Model of Enterprise Formation
Source: Vollery, Mazzarol, Doss & Thein, 1997
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17. Triggers to start up
• Invest (need a job; way to personal savings, super,
redundancy; earn a better salary)
• Creativity (take advantage of own talents; have an
interesting job; create something new; realise a
dream)
• Autonomy (work own hours, own location; be one’s
own boss)
• Status (follow example of a person I admire;
increase status/prestige; maintain family tradition)
• Market Opportunity (saw one)
• Money (make more, keep more RM)
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18. Barriers to start up
• Lack of resources - lack of marketing skills,
lack of management/financial expertise, lack
of information, difficulty in obtaining finance
• Compliance costs - high taxes and fees,
compliance with government regulation,
problems finding suitable labour
• Hard reality - assessment that risks are
greater than expected, uncertainty and fear
of failure
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19. Entrepreneurial Motivation &
Entrepreneurship Process
Source: Shane, et.al. (2003)
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20. Entrepreneurial Behavior & Favorable
Business Outcome
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21. Pull Factors
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Religious Values
– A lot of bounties in business
– Follow the teachings of the
religion
– Duty to lead a prosperous life
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Psychological
– Doesn’t like to be controlled
– Want freedom
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22. Pull Factors
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Riches and Power
– Rich and famous
– Sophisticated life-style
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Service to the Society
– Corporate social responsibility
– Philanthropic activities
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Entrepreneurial Culture
– Entrepreneurial mindset
– Business succession
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23. Push Factors
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Frustration
–
–
–
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Limited job mobility
VSS and “retrenchment”
Dissatisfaction
Necessity
–
–
–
No jobs
Need to support family
Lack educational qualifications
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24. Barriers to
Entrepreneurship
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“Too much to lose”
– Terlalu memikirkan apa yang akan
berlaku kepada diri & keluarga sekiranya
gagal
– Sikap takut kepada kegagalan yang tinggi
– Sangsi dengan keupayaan diri sendiri
– Terlalu mementingkan faktor jaminan
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25. Barriers to
Entrepreneurship
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“Personal inadequacy”
– Saya terlalu tua atau terlalu muda atau
kurang pengalaman
– Terlalu membesarkan kekurangan dan
kelemahan diri sendiri.
– Menanggapi bahawa kegagalan
perniagaan membawa kesan yang terlalu
besar
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26. Barriers to
Entrepreneurship
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“Fear of Competition”
– Bagaimana saya boleh bersaing dengan
mereka yang telah lama berniaga
– Takut kepada bayang-bayang pesaing
dan dihantui perasaan bahawa produk
atau perkhidmatan yang ditawarkan lebih
“inferior” dari pesaing
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27. Barriers to
Entrepreneurship
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“Lack of Capital”
– Terlalu membesarkan kekurangan modal
untuk memulakan perniagaan
– Tidak ada modal, tak boleh berniaga
– Membesarkan kepayahan untuk
mendapatkan pembiayaan
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28. Barriers to
Entrepreneurship
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“Lack of Opportunity”
– Terlalu membesarkan masalah
mendapatkan peluang
– Peluang perlu dicari
– Masalah kepada orang lain mungkin
peluang kepada kita
– Guna “lubang” untuk cari lubang
(peluang)
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29. Factors in
Entrepreneurial Success
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Achievement Oriented Personality
Entrepreneurial Attitudes
Belief in Self and Ability
Social Context
Precipitation Event
Intention to Start a Venture
Opportunity Recognition
Controlling Resources
Timing
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30. Konosuke Matsushita (founder
of National Panasonic Ltd)
1894 -1989
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31. APT 2013
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