Journal Article•
Entrepreneurial Orientation: An Empirical Study of the Risk-Propensity Dimension of Entrepreneurs
01 Jan 2012-Academy of Entrepreneurship Journal (The DreamCatchers Group, LLC)-Vol. 18, Iss: 1, pp 21
TL;DR: Gurol et al. as discussed by the authors analyzed the relationship that might exist between risk taking propensity and the entrepreneurial orientation of entrepreneurs and found that the relationship between risk propensity and entrepreneurial orientation is contingent to the set of entrepreneurs.
Abstract: The goal of this paper was to analyze the relationship that might exist between risk taking propensity and the entrepreneurial orientation of entrepreneurs. In order to test that relationship, a contingency approach was used by splitting a sample of entrepreneurs into three different sets based on the Carlands' trichotomy of entrepreneurs. A sample of 1003 entrepreneurs was used for the study, and 103 responses were used for analysis. The result of the study indicates that the relationship between risk propensity and the entrepreneurial orientation of entrepreneurs is contingent to the set of entrepreneurs. INTRODUCTION The entrepreneurial orientation construct in entrepreneurship has received considerable attention from researchers, even if there are some controversies in its dimensions (Josien, 2008; Gurol & Atsan, 2006; Lyon, Lumpkin, & Dess, 2000; Aragon-Correa, 1998; Barringer & Bluedorn, 1999; Zahra & Covin, 1995; Dess & Lumpkin, 1996). This high level of interest is stemming from the significant impact the entrepreneurial activity has on an economy. This economical impact can be seen through the number of jobs created by entrepreneurs. Entrepreneurial ventures, defined as small firms with fewer than 500 employees, accounted for 69% of the total employment growth for the 1992-1996 period. Small business ventures represented all of the employment growth in goods-producing industries, 59% of the growth in service, and 79% of the growth in information technology (U.S. Small Business Administration, 2000). A careful analysis of the results of the research mentioned above reveal that conflicting results have been found. For some researchers, entrepreneurial orientation is composed of three dimensions: innovativeness, proactiveness, and risk taking (Wiklund & Shepherd, 2005; Morris & Sexton, 1996). For some others, that same concept has five dimensions: autonomy, innovativeness, risk taking, proactiveness, and competitive aggressiveness (Dess & Lumpkin, 1996). There are also some researchers who use a different set of five dimensions: achievement, personal control, innovation, self-esteem, and opportunism (Robinson, 1987; Shanthakumar, 1992), and one researcher even included two more dimensions to the previous model: risk taking and independence (Solymossy, 1998). One of the more salient areas of conflicting results is within the risk taking dimension of entrepreneurs. Indeed, risk taking has always been a part of the early entrepreneurship literature, dating back to Cantillon (1734) who argued that the principal factor that separated entrepreneurs from hired employees was the uncertainty and risk of self-employment. Furthermore, the risk propensity dimension of entrepreneurs has yielded different outcomes: Palmer (1971) and Liles (1974) reported that entrepreneurial functions primarily involve risk taking. In addition calculated risk taking is reported to be a strategic behavior of entrepreneurs (Hoy & Carland, 1983). However, some other findings may indicate that entrepreneurs may be risk-averse due to their strategic behavior (Burns & Kippenberger, 1988). Similarly, chief executives with external control were found to be conservative in their decision-making, while chief executives with internal locus of control were more prepared to adopt riskier decisions (Miller & Friesen, 1982). Conversely, the need for achievement is associated with risk taking propensities (McClelland, 1961). Furthermore, Brockhaus (1980) has reported inconsistencies in the risk-taking propensity of entrepreneurs. Finally, Gurol and Atsan (2006) found a difference in risk taking propensity between entrepreneurial students versus non-entrepreneurial students based on 400 Turkish students. As we can see, the literature review shows without a doubt that there are conflicting results as far as the risk propensity dimension is concerned. Therefore, it might be fruitful to examine why some researchers have found antagonistic results about the risk dimension in the entrepreneurial orientation of entrepreneurs. …
Citations
More filters
Dissertation•
01 Jan 2017
TL;DR: In this paper, the authors present a table of Table of Table 1 : Table of the Table of contents of the table. [2] and Table 2 : Table 1].
Abstract: ..................................................................................................................... iv Table of
32 citations
31 Jan 2020
TL;DR: In this paper, the authors empirically test the relationship between internal locus of control and entrepreneurial intention on vocational high school students, and the results of data analysis showed a significant positive relationship with internal LOC with entrepreneurial intention, with a significance level (p) of 0.030.
Abstract: Internal locus of control is one of the factors related to vocational high school students’ entrepreneurial intention. This study aimed to empirically test the relationship between internal locus of control and entrepreneurial intention on vocational high school students. The population in this study was all students of class XII at Vocational High School 5 Yogyakarta as many as 392 students and research participants in total was 171 students. The sampling technique used was cluster random sampling. Data collection was conducted by using the scale of entrepreneurial intention and internal locus of control scale. Data analysis was done using product moment analysis technique. The results of data analysis showed a significant positive relationship between internal locus of control with entrepreneurial intention, with a significance level (p) of 0.030. Internal locus of control contributed 2.1 percent to entrepreneurial intention so that the remaining 97.9 percent was influenced by other variables. It could be concluded from this study that students’ internal locus of control can predict student’s entrepreneurship intention.
20 citations
Cites background from "Entrepreneurial Orientation: An Emp..."
...Factors influencing entrepreneurial intention include need for achievement [31-33], risk-taking behavior [29, 32, 34], creativity [28], social networking [33, 35] and tolerance for ambiguity [32]....
[...]
01 Jan 2012
TL;DR: In this article, the authors examined the impact of entrepreneurial orientation and its individual dimensions of innovativeness, risk-taking and proactiveness on the performance of small-to-medium sized enterprises (SMEs).
Abstract: This thesis examines the impact of entrepreneurial orientation (EO) and its individual dimensions of innovativeness, risk-taking and proactiveness on the performance of small-to-medium sized enterprises (SMEs). It does this in a cross-cultural setting by comparing EO and its dimensions and their performance implications between Finnish and German firms. The cultural comparison is based on Hofstede’s culture dimensions. There are three main objectives in this paper. The first one is to determine, if the levels of EO and its individual dimensions differ between the SMEs of the two countries of interest. Second, the paper aims to find out, if EO and especially its individual dimensions positively influence SME performance. Third, the paper aims to determine if there are differences between the Finnish and German SMEs in how EO and its dimensions impact performance. The cross-cultural comparisons of EO are scarce, and this study answers for the call of several researchers to increase understanding in this field. The literature review of the thesis combines the research of EO, its individual dimensions and their performance implications as well as culture. It also aims at creating an intersection of these different topics. Based the literature, a conceptual framework is created. This framework combines the concepts of culture, EO and its dimensions as well as firm performance. The examination of the relationships based on the conceptual framework is done by means of quantitative methods such as factor analysis, comparison of means, and hierarchical multiple regression. The findings of the thesis based on these methods suggest that the SMEs of both countries exhibit rather high levels of all dimensions of EO. However, the Finnish SMEs exhibit higher levels of innovativeness, proactiveness and EO than their German counterparts, whereas there is no significant difference in the levels of risk-taking. Additionally, innovativeness emerges as the most significant contributor to firm performance in the SMEs of both countries, even so that the impact of innovativeness alone is higher than that of the combined EO concept. Finally, no significant difference between the strength of the impact on performance with any of the dimensions can be found between the Finnish and German firms.
17 citations
TL;DR: In this paper, the authors analyzed the entrepreneurial process in the context of innovation, risk and market opportunities, which represent the three main approaches to entrepreneurship theories, focusing on the social service sector in Finland.
Abstract: Purpose – This paper aims to verify the positive impact of legislative changes aimed at decontrolling the market on the entrepreneurial process of new companies’ creation. The entrepreneurial process has been analysed in the context of innovation, risk and market opportunities, which represent the three main approaches to entrepreneurship theories. The analysis is focussed on the social service sector in Finland. Design/methodology/approach – The study is based on an ex post facto research design. The data are based on official statistics and the data bank of legislation. The case of Finland is used as an example for explaining the determinants of new company creation. Findings – Legislative changes aimed at decontrolling the market seem to have a positive impact on the entrepreneurial process of new company creation. This influence is manifested in the form of market opportunities, risk bearing and the introduction of innovation. Of these three factors influencing the start-up process, the opportunities ...
10 citations
Cites background or methods from "Entrepreneurial Orientation: An Emp..."
...Even though conventional wisdom indicates that more risk-averse individuals are less likely to become entrepreneurs (Josien, 2012), evidence indicates that this relationship depends on the previous activity of the individuals....
[...]
...In the model of Kihlstrom and Laffont (1979), it is assumed that individuals have a choice between running a business for risk-based profits and working as hired workers for a no-risk salary....
[...]