The Entrepreneurial

Motivation
Mohamed Dahlan Ibrahim, Ph.D
©2008
Lecture Outline

 What is entrepreneurial motivation?

 Sources of motivation
 Models of entrepreneurial motivation
 Triggers and barriers to
entrepreneurial motivation
 Ways to enhance entrepreneurial
motivation
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What is EM?

 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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Elements of EM

 Motive
Motive

 Behavior
 Goal
Goal Behavior

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 Relationship between
Motive, Behavior & Goal
Help Goal
(Assistance)
Effort

Barriers
(Internal)
Activity

Barriers
(External) Feelings
Intention Expectation
(+ve/-ve)
(Motive) (+ve/-ve)
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Sources of Entrepreneurial
Motivation
 Internal/Intrinsic
– Personal goals
– Need for achievement
– Ambition

 External/Extrinsic
– Compulsion
– Support
– Successful entrepreneurs
– Access to capital
– Status

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Models of EM
 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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David McClelland, Psychologist
(1917-98)

Needs-based
Entrepreneurial
Motivation

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 David McClelland's Needs-
Based Motivational Model

 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.
 Need for authority and power (n-pow)
– influential, effective and to make an impact ,personal
status and prestige.
 Need for affiliation (n-aff)
– friendly relationships and interaction with other
people
 Need for security/safety (n-sec)
– Comfortable with secure employment and
unwillingness to take higher risk

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 Behavior of Achievement-
Motivated People

 Achievement is more important than material or

financial reward.
 Achieving the aim or task gives greater personal
satisfaction than receiving praise or recognition
 Financial reward is regarded as a measurement of
success, not an end in itself.
 Security is not prime motivator, nor is status.

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 Behavior of Achievement-
Motivated People
 Feedback is essential, because it enables
measurement of success, not for reasons of
praise or recognition.
 Achievement-motivated people constantly
seek improvements and ways of doing things
better.
 Achievement-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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 Behavior of Achievement-
Motivated People
 Capacity to set high personal
but obtainable goals
 Concern for personal
achievement rather than the
rewards of success
 The 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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A Model of Entrepreneurial Motivation
PC PE PG Internal Source: Naffziger, Hornsby and Kuratko, (1994)

Expectation/ Intrinsic/Extrinsic
Outcome Rewards
Comparison

Decision
Entrepreneurial Entrepreneurial Firm
to behave
Strategy Management Outcomes
Entrepreneurially

Implementation/
Outcome
Perception
PC = Personal Characteristics
PE = Personal Environment
PG = Personal Goals
BE IDEA Internal/External BE = Business Environment

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Entrepreneurial
Intentions Model
Perceived net
desirability of
self-employment
(NDSE)

Tolerance for Self-employment

risk (TR) intentions

Perceived
feasibility (self-
efficacy) of self-
employment (SE)
Source: Gerry Segal, Dan Borgia & Jerry Schoenfeld (2005)

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Factors Critical to Start-Up &
Reasons for Not Starting-Up

Source: Martyn Roberton et.al. (2003)

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 A Model of Enterprise Formation

Source: Vollery, Mazzarol, Doss & Thein, 1997

PERSONAL BACKGROUND:
Age
Gender
Previous employment DECISION:
Family and ethnic group START (Triggers > Barriers)
Education

INTENTIONALITY
ENVIRONMENT:
Industry
Social DECISION:
Economic ABANDON (Triggers < Barriers)
Political
Infrastructure development

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 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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 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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Entrepreneurial Motivation &
Entrepreneurship Process

Source: Shane, et.al. (2003)

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Entrepreneurial Behavior & Favorable
Business Outcome

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 Pull Factors
 Religious Values
– A lot of bounties in business
– Follow the teachings of the
religion
– Duty to lead a prosperous life
 Psychological
– Doesn’t like to be controlled
– Want freedom

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 Pull Factors
 Riches and Power
– Rich and famous
– Sophisticated life-style
 Service to the Society
– Corporate social responsibility
– Philanthropic activities
 Entrepreneurial Culture
– Entrepreneurial mindset
– Business succession
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 Push Factors
 Frustration
– Limited job mobility
– VSS and “retrenchment”
– Dissatisfaction
 Necessity
– No jobs
– Need to support family
– Lack educational qualifications

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Barriers to
Entrepreneurship
 “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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Barriers to
Entrepreneurship
 “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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Barriers to
Entrepreneurship
 “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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Barriers to
Entrepreneurship
 “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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Barriers to
Entrepreneurship
 “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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Factors in Entrepreneurial
Success
 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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