Evaluation of Entrepreneurial Risk-Taking using Magnitude of Loss Scale:
TL;DR: The importance of risk-taking in business ventures has been emphasised by many as mentioned in this paper, and attempts to distinguish entrepreneurs on their risk taking propensity have produced conflicting results, and data on two...
Abstract: The importance of risk-taking in business ventures has been emphasised by many. Attempts to distinguish entrepreneurs on their risk-taking propensity have produced conflicting results. Data on two ...
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01 Jan 1961
TL;DR: The authors argued that cultural customs and motivations, especially the motivation for achievement, are the major catalysts of economic growth and proposed a plan to accelerate economic growth in developing countries by encouraging and supplementing their achievement motives through mobilizing the greater achievement resources of developed countries.
Abstract: Examines the motivation for achievement as a psychological factor that shapes economic development. Refuting arguments based on race, climate, or population growth, the book instead argues for cultural customs and motivations - especially the motivation for achievement - as the major catalysts of economic growth. Considering the Protestant Reformation, the rise of capitalism, parents' influences on sons, and folklore and children's stories as shaping cultural motivations for achievement, the book hypothesizes that a high level of achievement motivation precedes economic growth. This is supported through qualitative analysis of the achievement motive, as well as of other psychological factors - including entrepreneurial behavior and characteristics, and available sources of achievement in past and present highly achieving societies. It is the achievement motive - and not merely the profit motive or the desire for material gain - that has advanced societies economically. Consequently, individuals are not merely products of their environment, as many social scientists have asserted, but also creators of the environment, as they manipulate it in various ways in the search for achievement. Finally, a plan is hypothesized to accelerate economic growth in developing countries, by encouraging and supplementing their achievement motives through mobilizing the greater achievement resources of developed countries. The conclusion is not just that motivations shape economic progress, but that current influences on future people's motivations and values will determine economic growth in the long run. Thus, it is most beneficial for a society to concentrate its resources on creating an environment conducive to entrepreneurship and a strong ideological base for achievement. (CJC)
359 citations
TL;DR: In this article, a qualitative research study summarizes and analyzes interviews with 149 established entrepreneurs and small business owners regarding their perceptions on the advantages and disadvantages of their endeavors, and on providing advice to prospective new venture creators.
Abstract: Purpose – Guidance from successful individuals can be valuable to prospective and nascent entrepreneurs, as well as writers and instructors in the field. This paper seeks to confirm contemporary entrepreneurship concepts, examine current perceptions, and expand the knowledge base by exploring established entrepreneurship perceptions through first‐hand accounts of successful small business owners.Design/methodology/approach – This qualitative research study summarizes and analyzes interviews with 149 established entrepreneurs and small business owners regarding their perceptions on the advantages and disadvantages of their endeavors, and on providing advice to prospective new venture creators.Findings – The research revealed that entrepreneurs enjoy the independence, freedom, job satisfaction, and money, but believe the long hours, stress, responsibility, risk, and lack of company benefits are drawbacks of entrepreneurial activity. The findings largely support previous research in the field, while clarifyi...
124 citations
Cites background from "Evaluation of Entrepreneurial Risk-..."
...The risk-taking propensity of entrepreneurs has been fairly widely-studied over many years (Hull et al., 1980; Kamalanabhan et al., 2006; Knight, 1971; Palmer, 1971), but generally has resulted in conflicting findings and is not usually researched as a potentially negative factor of entrepreneurship as a career choice....
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TL;DR: In this article, the theme of "Why, when and how some people (entrepreneurs) and not others discover, evaluate and exploit entrepreneurial opportunities" is explored. But, despite numerous research studies the theme still needs intensive inq...
Abstract: Despite numerous research studies the theme of ‘Why, when and how some people (entrepreneurs) and not others discover, evaluate and exploit entrepreneurial opportunities?’ still needs intensive inq...
63 citations
TL;DR: In this paper, a country-moderated hypothesis including the relationship between the personal characteristics of entrepreneurs and their startup intentions and behaviors is proposed to predict the behavior of an entrepreneur.
Abstract: The personal characteristics of entrepreneurs can be importantly related to entrepreneurial startup intentions and behaviors. A country-moderated hypothesis including the relationship between an in...
40 citations
TL;DR: In this article, the authors compared the risk-taking tendency of college students, entrepreneurs, and criminals in hypothetical bet situations and found that college students' decisions are more influenced by probability factors than by the amount staked.
Abstract: Entrepreneurs’, college students’ and criminals’ risk-taking were compared in hypothetical bet situations. The level of uncertainty and the amount staked were varied in gain and loss situations. Potential profit motivates entrepreneurs to choose higher stakes, expected loss will prompt the avoidance of risk. In profit-making situations, college students’ strategies are different: Students’ decisions are more influenced by probability factors than by the amount staked. Risk-taking tendency of criminals is higher than that of the other two groups, without applying a consistent strategy in taking risk.
18 citations
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TL;DR: The authors found that most entrepreneurs are displaced persons who have been dislodged from a comfortable, safe situation, such as political refugees, but most common are people fired from their jobs, or deprived of an opportunity to advance in their jobs.
Abstract: Given that personal initiative and enterprise are taken for granted in the United States, it is surprising that - as of 1975 - only 350,000 to 500,000 individuals per year actually start a new company. This study discusses the conditions and the kinds of personalities associated with people who become entrepreneurs, in contrast to others with the same education and opportunities who do not. The research finds that most entrepreneurs are DPs, displaced persons, who have been dislodged from a comfortable, safe situation. Some are literal DPs, such as political refugees, but most common are people fired from their jobs, or deprived of an opportunity to advance in their jobs. Another factor impacting entrepreneurial behavior is the perception that the individual has no future, or does not want to do her or his current job for the rest of her or his life. This tends to occur when individuals near the age of 40 or 50. Two categories of people are identified, who differ in terms of locus of control, i.e. the degree to which people feel they can affect the world around them. Some people are "external" and believe that their success is mostly impacted by outside forces, while others are "internal" and believe in their own influence on the course of events, which tends to help in entrepreneurial success. Other entrepreneurial conditions and characteristics identified by the study are: a need for independence; being able to imagine oneself in the role of an entrepreneur; having examples around of others who resemble one and have started businesses; and coming from an ethnic group that has traditionally been associated with entrepreneurial success. Apart from all those, having the necessary resources such as labor, materials, and facilities, is a necessary element. The analysis concludes by listing certain tactics for creating more entrepreneurs -- e.g., acquiring knowledge of conditions that induce potential entrepreneurs to take action, and using this knowledge to make new towns and regions more entrepreneurially active; and demonstrating to individuals that they do have internal control. (AT)
675 citations
Book•
01 Jan 1974
667 citations
"Evaluation of Entrepreneurial Risk-..." refers background in this paper
...In addition, we also find theoretical support for entrepreneurs’ preference for options with a 50 per cent probability of success (Atkinson & Raynor, 1974)....
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...Atkinson and Raynor (1974) and McClelland (1961) have advanced the explanation that people high on achievement motivation, prefer moderately risky venutres....
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TL;DR: In this article, the authors identify an objective test to understand the psychological nature of the successful entrepreneur, based on the assumptions that an objective system of evaluation structured so non-psychologists could administer it was needed, and many other factors than need for achievement could be measured.
Abstract: This study attempts to identify an objective test to understand the psychological nature of the successful entrepreneur. Successful entrepreneurs are defined as those who started a business, where none before existed, established for at least five years with at least eight employees. Previous research into the personal characteristics that predict entrepreneurial success is claimed to be unsatisfactory because the projective tests have laborious procedures, require technical training to interpret, and focus on the individual's need for achievement. The present study is based on the assumptions that (1) an objective system of evaluation structured so non-psychologists could administer it was needed, and (2) many other factors than need for achievement could be measured. Five tests were identified that appeared to fit the need for an objective, valid test in a simple format with ease of administration and interpretation. The assessment program utilized these established tests and structured interviews. These were administered to sixty individuals, equally divided by race into blacks and whites, of which all but four were men. Five hypotheses are investigated. Found that racial differences for entrepreneurs were not evident, and that (compared to men in general) entrepreneurs score higher on need for achievement, independence, and effectiveness of leadership, and are low on scales reflecting need for support. Concludes that the Kuder Occupational Interest Survey, the Gordon Survey of Interpersonal Values and the Edwards Personal Preference Schedule successfully differentiated entrepreneurs from others, could therefore serve as objective indicators of entrepreneurship, and should be tested in further research studies. (TNM)
396 citations
TL;DR: In this paper, the author discusses the various definitions of an entrepreneur and the means of testing for roles which delineate entrepreneurial behavior, important in testing is achievement motivation and where it originates.
Abstract: The author discusses the various definitions of an entrepreneur and the means of testing for roles which delineate entrepreneurial behavior. Important in testing is achievement motivation and where it originates.
261 citations
"Evaluation of Entrepreneurial Risk-..." refers background in this paper
...Risk-taking is inherent in entrepreneurship (Dickson & Gigilierano, 1986; Knight, 1971; Palmer, 1971)....
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...Palmer (1971) has also emphasised the need to explore the risk-taking behaviour of entrepreneurs....
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...Discussion Risk-taking is inherent in entrepreneurship (Dickson & Gigilierano, 1986; Knight, 1971; Palmer, 1971)....
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...Risk-taking is inherent in entrepreneurship (Dickson & Gigilierano, 1986; Knight, 1971; Palmer, 1971). However, studies on the risk-taking propensity of entrepreneurs have indicated that entrepreneurs and managers do not differ significantly in this regard from managers (Brockhaus, 1980; Sunder & Kamalanabhan, 1996). Atkinson and Raynor (1974) and McClelland (1961) have advanced the explanation that people high on achievement motivation, prefer moderately risky venutres....
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TL;DR: A meta-analysis of Asian-disease-like studies is presented to identify the factors which determine risk preference, and it is shown that it is not probabilities or payoffs, but the framing condition, which explains most variance.
236 citations
"Evaluation of Entrepreneurial Risk-..." refers background in this paper
...Perhaps the most frequently examined phenomenon is a collection of processes and conditions referred to as framing (see metaanalyses by Kuhberger, 1998; Kuhberger et al., 1999)....
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