Does money matter?: Wealth attainment as the motive for initiating growth-oriented technology ventures

The desire to attain personal wealth has long been regarded as the foremost motive for entrepreneurship. Other goals and values, however, may also contribute to entrepreneurial motivation. Thus, the extent to which money matters relative to other motives is an empirical question. In this study we examine the role of wealth as the motive for the decision to found new ventures. Three focal questions guide our research: 1) does money matter more relative to other decision dimensions in deciding to start a new high-technology venture? 2) does money matter more to entrepreneurs compared to non-entrepreneurs? and 3) does money matter in absolute terms, that is, does a decision model that focuses solely on the motive of wealth attainment parsimoniously predict entrepreneurs' start-up decisions?We conducted in-depth interviews with 51 entrepreneurs and a control group of 28 senior managers who decided not to start ventures (non-entrepreneurs) in the high-technology industry in British Columbia to address our research questions. The motives we examined are wealth attainment and an aggregate of other dimensions identified by entrepreneurs and managers. We considered three components of values: participants' ratings of the importance of various decision dimensions, their rating of the salience of these dimensions, and their satisfaction with prior levels of attainment on those decision dimensions. We assessed beliefs as participants' perceived probability of attaining their desired level of a particular decision dimension in each of three alternatives: the position held at the time the venture decision was made, the venture itself, and the next best career alternative at that time. The data were analyzed to compare entrepreneurs' values and beliefs regarding wealth with an aggregate of other decision dimensions (our relative hypotheses), and with those of non-entrepreneurs (our comparative hypotheses).Our findings do not support the common perception that money is the only, or even the most important, motive for entrepreneurs' decisions to start new ventures. Wealth attainment was significantly less important to entrepreneurs relative to an aggregate of 10 other decision dimensions, and entrepreneurs did not rate wealth as any more important than did non-entrepreneurs. Non-entrepreneurs rated wealth as no more important than other motives. Wealth attainment was also significantly less salient to entrepreneurs' decisions to venture than were other motives. Non-entrepreneurs reported that wealth was significantly more salient to their decision against founding a venture than other dimensions. In fact, non-entrepreneurs rated wealth attainment as significantly more salient to their decision against founding than entrepreneurs rated it for their decision to proceed with starting a high-technology business. A significant number of entrepreneurs started businesses even when they believed that doing so offered them a lower probability of obtaining their most desired level of wealth than did one of their other alternatives.Satisfaction ratings and stated beliefs also dispute classical predictions. Just prior to making the decision to venture, the entrepreneurs in our study were as satisfied with wealth as they were with other decision dimensions. The non-entrepreneurs were actually more satisfied with wealth attainment than with other dimensions. A comparison of the groups revealed no difference in satisfaction with wealth attainment levels. Entrepreneurs did believe that their chances of attaining their desired level of wealth were much greater through founding a new high-technology venture than through their other alternatives. This difference in beliefs, however, was not significantly greater than their optimistic beliefs about chances of attaining desired levels of other dimensions. It was significantly higher compared to the non-entrepreneurs' belief difference measures for wealth. In fact, the entrepreneurs' stated beliefs regarding the chances of attaining their desired levels of all dimensions were higher than those of the non-entrepreneurs, suggesting that entrepreneurs were simply more optimistic at the time of their decision than non-entrepreneurs.Salience findings suggest that these optimistic beliefs about wealth did not motivate the founding decision alone.We can distinguish those people who successfully started ventures by their regard for wealth as a less salient factor, and their beliefs in higher chances of a venture producing monetary and other returns. Other motives, such as innovation, vision, independence, and challenge were more important and much more salient to this sample of entrepreneurs.Our findings have implications for practice, teaching, and research. Venture capitalists who partially base their assessment of entrepreneurs on the extent to which they are motivated to make a great deal of money may benefit from reconsideration of this criterion. We have evidence of one group of high-technology entrepreneurs who achieved success without placing much decision weight on attainment of personal wealth. Nascent entrepreneurs and those who teach entrepreneurship can use this empirical finding to argue two main points: 1) not all entrepreneurs found a business for personal wealth reasons, and 2) one need not be motivated by personal wealth attainment to be a successful entrepreneur. Similarly, theoretical models that assume money is the primary motive for entrepreneurial activity require re-examination. Future research in entrepreneurship should focus less on wealth attainment and more on other motives for the venturing decision. A multiple-attribute decision model may be able to more fully explain venturing decisions.     

Ethics Through an Entrepreneurial Lens: Theory and Observation

Recent work in the fields of ethics and entrepreneurship has raised the possibility that entrepreneurs may differ from other individuals in the moral issues they face, in their moral judgements and behaviors concerning those issues, and even in their level of cognitive moral development. While this work has been exploratory and its conclusions tentative, the findings raise two interesting questions: do entrepreneurs actually differ from non-entrepreneurs in their ethical orientations and, if so, why? We propose a model of ethical decision making for small business entrepreneurs. We suggest some ways in which the ethical framework of entrepreneurs may differ systematically from that of other business people and propose some areas for future research.     

What is the value of entrepreneurship? A review of recent research

This article examines to what extent recent empirical evidence can collectively and systematically substantiate the claim that entrepreneurship has important economic value. Hence, a systematic review is provided that answers the question: What is the contribution of entrepreneurs to the economy in comparison to non-entrepreneurs? We study the relative contribution of entrepreneurs to the economy based on four measures that have most widely been studied empirically. Hence, we answer the question: What is the contribution of entrepreneurs to (i) employment generation and dynamics, (ii) innovation, and (iii) productivity and growth, relative to the contributions of the entrepreneurs’ counterparts, i.e., the ‘control group’? A fourth type of contribution studied is the role of entrepreneurship in increasing individuals’ utility levels. Based on 57 recent studies of high quality that contain 87 relevant separate analyses, we conclude that entrepreneurs have a very important—but specific—function in the economy. They engender relatively much employment creation, productivity growth and produce and commercialize high-quality innovations. They are more satisfied than employees. More importantly, recent studies show that entrepreneurial firms produce important spillovers that affect regional employment growth rates of all companies in the region in the long run. However, the counterparts cannot be missed either as they account for a relatively high value of GDP, a less volatile and more secure labor market, higher paid jobs and a greater number of innovations and they have a more active role in the adoption of innovations.     

Entrepreneurial Risk: Have We Been Asking the Wrong Question?

Entrepreneurs are often thought to engage in "risky" behaviors. Thus, they may be seen as more willing than average to take risks. We offer a dissenting view. Central to entrepreneurship is the alertness perspective which suggests that entrepreneurs may assess opportunities and threats differently than non-entrepreneurs. That differential assessment may be understood in terms of Bayesian probability. The Bayesian model argues that differing assessments of prospective outcomes may be attributable to differences in prior information. This perspective on risk assessment has implications for entrepreneurial decision making, whether to launch a new venture or adopt a growth strategy. The literature is reviewed, a synthesis is offered, a numerical example is developed, and a research agenda is proposed.     

Contagion Entrepreneurship: Institutional Support,Strategic Incoherence,and the Social Costs of Over‐Entry

Existing literature on the legitimizing role of institutions tilts toward a “more is better” perspective, proffering the notion that the liabilities of smallness and newness can be mitigated through institutional policies that foster acceptance, trust, and confidence. Although this may seem reasonable, even desirable, institutional munificence can trigger massive over‐entry, potentially causing unintended consequences and unwanted social costs. Using a data set of nearly six million transaction‐level decisions involving all 612 companies and 56,240 permitted projects from a complete industry history, I find that unforeseen costs arise when small, early‐stage firms substitute the legitimizing effects of institutional support for strategic coherence. The findings are surprising and significant. While institutional support for new markets does in fact generate a surge in firm formations, the ill effects of munificence are evidenced by indiscriminate, contagion‐style market entry by unfit firms that perform poorly, fail quickly, and leave a long trail of regulatory violations in their collective wake. The study offers opportunities for scholars, practitioners, and policymakers to reassess the core assumptions related to the benefits and costs of institutional support for new industries, firms, and entrepreneurs.     

An agentic perspective of resourcefulness: Self-reliant and joint resourcefulness behaviors within the entrepreneurship process

We integrate social cognitive theory, and its tenets of personal and collective agency, to develop an individual-level perspective on entrepreneurs' resourcefulness behaviors that illustrates how resourcefulness behaviors can be classified as ‘self-reliant behaviors’ or ‘joint resourcefulness behaviors’. Using this novel cognitive theoretical approach, we provide and test a framework that explains how dispositional, perceptual, and behavioral factors interact in the enactment of purposeful action with regards to entrepreneurs' resourceful behaviors. Consistent with our hypotheses, results from a quantitative study of entrepreneurs (N = 178), as well as a supplemental study involving qualitative interviews with entrepreneurs (N = 15), highlight that entrepreneurs higher in frugality tend to perceive higher levels of environmental hostility. This relationship, in turn, leads to higher amounts of self-reliant resourcefulness behaviors (i.e., customer-related and internal self-financing bootstrapping behaviors) but not joint resourcefulness behaviors. Multiple theoretical and practical contributions emerge from our findings as the extant literature does not yet account for human agency as a reason why some entrepreneurs may choose to engage in certain resourceful behaviors relative to other behaviors.     

The role of customization,brand trust,and privacy concerns in advergaming

This study investigates the effects of advergame customization features and trust in the brand advertised in the advergame on players’ brand attitude and personal information disclosure. Moreover, we examine to what extent players’ privacy concerns moderate these effects. Drawing on self-determination theory and uncertainty reduction theory, we developed and tested a game with varying levels of customization features and brand trust. Results show that customization possibilities and brand trust may have a positive influence on advergame persuasion outcomes, but this influence is strongly conditioned by consumers’ privacy concerns. When privacy concerns are low, a game containing customization features leads to a more positive brand attitude. However, when privacy concerns are high, the effect becomes negative. Additionally, we find that different levels of privacy concerns do not affect players’ responses toward high trust brands, but toward low trust brands. For low trust brands, players with high privacy concerns show more negative game responses than players with low concerns. These findings set the boundaries for several theoretical and practical implications regarding advergame effectiveness.     

Role of entrepreneur gender and management style in influencing perceptions and behaviors of new recruits: Evidence from the Islamic Republic of Iran

Entrepreneurs face considerable challenges in attracting prospective recruits and managing them in the absence of established norms and traditions. This research examines how gender and management styles of entrepreneurs impact new recruits’ attitudes including their cognitions, affect, and behaviors in new ventures. Results of two experimental studies conducted in the Islamic Republic of Iran demonstrate that women entrepreneurs are reacted to less negatively and considered more effective when they use directive management style. In addition, women entrepreneurs who employ directive style elicit superior performance from new recruits compared to those who rely on participative style. Management style does not appear to matter for attitudes towards men entrepreneurs. Implications and future research directions are discussed.     

Exploring start-up event sequences

This research analyzed new venture start-up activities undertaken by 71 nascent entrepreneurs. Nascent entrepreneurs are individuals who were identified as taking steps to found a new business but who had not yet succeeded in making the transition to new business ownership. Longitudinal data for the study comes from a secondary data analysis of two representative samples, one of 683 adult residents in Wisconsin (Reynolds and White 1993) and the other of 1016 adult residents of the United States (Curtin 1982). These surveys were conducted between 1992 and 1993, and the nascent entrepreneurs were reinterviewed six to 18 months after their initial interview.Three broad questions were addressed: (1) What activities do nascent entrepreneurs initiate in attempting to establish a new business? (2) How many activities do nascent entrepreneurs initiate during the gestation of the start-up? and (3) When are particular activities initiated or completed?Between the first and second interview, 48% of the nascent entrepreneurs reported they had set up a business in operation. Over 20% had given up and were no longer actively trying to establish a business. Almost a third of the respondents reported they were still trying to establish a firm.As a way to summarize the results and as a springboard toward some insights into the implications of this research for practice and future research, we developed the following activity profiles of the three types of nascent entrepreneurs studied. These profiles are offered as a combination of both fact and some intuition about the findings.STARTED A BUSINESS. Nascent entrepreneurs who were able to start a business were more aggressive in making their businesses real. They undertook activities that made their businesses tangible to others: they looked for facilities and equipment, sought and got financial support, formed a legal entity, organized a team, bought facilities and equipment, and devoted full time to the business. Individuals who started businesses seemed to act with a greater level of intensity. They undertook more activities than those individuals who did not start a business. The pattern of activities seem to indicate that individuals who started firms put themselves into the day-to-day process of running an ongoing business as quickly as they could and that these activities resulted in starting firms that generated sales (94% of the entrepreneurs) and positive cash flow (50% of the entrepreneurs). What is not known is how successful or profitable these new firms will be over time. For example, 50% of the firms that were started had not reached positive cash flow and these firms may have been started by individuals who were foolhardy and rushed into operation of a business that would not be sustainable.GAVE UP. The pattern of activities for the group of entrepreneurs who gave up seem to indicate that these entrepreneurs discovered that their initial idea for their businesses would not lead to success. The finding that the activity of developing a model or prototype differentiated individuals who gave up from those who were still trying would suggest that those who gave up had “tested” their ideas out and found that they would not work according to their expectations. Nascent entrepreneurs who gave up seemed to be similar in their activity patterns compared with those who started their firms, that is, individuals who gave up pursued the activities of creating a business in an aggressive manner at the beginning of the process. But as the business unfolded over time, these entrepreneurs decreased their activities and then ceased start-up activities. This group of individuals might be seen as either having the wisdom to test their ideas out before jumping into something that might lead to failure or lacking the flexibility to find more creative ways to solve the problems that they were confronted with.STILL TRYING. It would seem that those who are still trying are not putting enough effort into the start-up process in order to find out whether they should start the business or give up. Those still trying had undertaken fewer activities than individuals in the other two groups. The still trying entrepreneurs were devoting their short-term efforts toward activities internal to the start-up process (e.g., saving money and preparing a plan) and less effort toward activities that would make the business real to others. The still trying entrepreneurs may be all talk and little action. Or these still trying entrepreneurs might be involved in developing businesses that take longer for these particular opportunities to unfold. (It should be noted that there was no industry effect across the three groups.)Our advice to individuals considering business start-up is that the results seem to provide evidence that nascent entrepreneurs should aggressively pursue opportunities in the short-term, because they will quickly learn that these opportunities will either reveal themselves as worthy of start-up or as poor choices that should be abandoned. Individuals who do not devote the time and effort to undertaking the activities necessary for starting a business may find themselves perennially still trying, rather than succeeding or failing.What entrepreneurs do in their day-to-day activities matters. The kinds of activities that nascent entrepreneurs undertake, the number of activities, and the sequence of these activities have a significant influence on the ability of nascent entrepreneurs to successfully create new ventures. This study suggests that the behaviors of nascent entrepreneurs who have successfully started a new venture can be identified and differentiated from the behaviors of nascent entrepreneurs who failed. We believe that future studies will more precisely identify the kinds of behaviors appropriate for certain new venture conditions. If such contingency information can be generated, entrepreneurship research is likely to have significant benefits for entrepreneurship practice, education, and public policy.     

On Adaptive Emergence of Trust Behavior in the Game of Stag Hunt

We study the emergence of trust behavior at both the individual and the population levels. At the individual level, in contrast to prior research that views trust as fixed traits, we model the emergence of trust or cooperation as a result of trial and error learning by a computer algorithm borrowed from the field of artificial intelligence (Watkins 1989). We show that trust can indeed arise as a result of trial and error learning. Emergence of trust at the population level is modeled by a grid-world consisting of cells of individual agents, a technique known as spatialization in evolutionary game theory. We show that, under a wide range of assumptions, trusting individuals tend to take over the population and trust becomes a systematic property. At both individual and population levels, therefore, we argue that trust behaviors will often emerge as a result of learning.     

The Role of Trust in the Marketing Activities of Entrepreneurs Establishing New Ventures

The 'credibility gap' is not often cited as a problem by marketers; for this reason marketing texts pay little or no attention to it. Yet, for the entrepreneurial marketer it may well be the most fundamental marketing challenge. Addressing the credibility gap may not have received any previous research interest, but theoretical support for its relevance abounds. Risk and its corollary, making use of trust have been seen as quintessentially entrepreneurial activities. If they do epitomise entrepreneurship, then surely, studying how entrepreneurs use trust ought to provide valuable insights into what entrepreneurs do.

While there is increasing research into trust, particularly from an organisational behaviour perspective, there is none in an entrepreneurial context. This lack of research provides the reason for the exploratory nature of this investigation.

The search for trust in this investigation focuses on entrepreneurs' usage of elements of the marketing mix. Respondents are asked about what they have done, why they have taken that course of action and what the outcomes have been.

We find that there is a wide panoply of ways in which entrepreneurs use trust, for example 'enthusiasm' and 'shared values'. The latter two are particularly important because they can lead to trust in situations where there may not already be existing relationships (the most likely place for finding trust). We also identify the methods entrepreneurs use to build trust - which they can then use to mitigate customers' perception of risk.     

The good,the bad and the uncertain: Employers' perceptions of former entrepreneurs

Do employers perceive former entrepreneurs as suitable candidates for paid employment? We argue that (positive and negative) stereotypes and uncertainty drive employability perceptions regarding former entrepreneurs; these perceptions are contingent upon job type and the background of both the applicant and the person evaluating them. Two empirical studies yield broad support for our predictions. In Study 1 (a vignette study), we find lower employability perceptions regarding former entrepreneurs compared to other applicants, which are significantly mediated by positive and negative stereotypes as well as uncertainty perceptions. In Study 2 (conjoint experiments with two separate samples: recruiters and executives), we substantiate the results of Study 1, revealing that when former entrepreneurs apply for a job involving personnel responsibility or when there is evidence of a failure in their vita, they are less likely to face devaluations. Further, we find evidence for similarity effects; more specifically, entrepreneurs do not suffer from employability devaluation when the recruiter is a part-time entrepreneur or the executive is the business owner. We discuss the implications as part of the employability debate about former entrepreneurs.     

基于社会资本的企业家群体研究

本文基于社会网络理论,通过研究温州和宁波两地企业家集群产生的过程,分析社会资本如何促进大规模的企业家集群产生。研究表明:企业家个人的社会资本在区域文化、共同价值观和群体信任的发酵下结成社会网络,并促使更多企业家产生且形成企业家集群;温州企业家社会网络具有强联系、同质性和自组织的特点,创业倾向集体行动,依赖本地资源,产业升级代际锁定;宁波企业家社会网络具有弱联系、异质性和他组织的特点,外部资源掌控力强,容易引发产业升级。     

Leadership,Trustworthiness, and Ethical Stewardship

Leaders in today’s world face the challenge of earning the trust and commitment of organizational members if they expect to guide their companies to success in a highly competitive global context. In this article, we present empirical results indicating that when leadership behaviors are perceived as trustworthy through the observer’s mediating lens, trust increases and leaders are more likely to be viewed as ethical stewards who honor a higher level of duties. This article contributes to the growing body of literature about the importance of ethical stewardship in the trust relationship.     

Impact of cause-related marketing on consumer advocacy and cause participation: A causal model based on self-reports and eye-tracking measures

Cause-related marketing improves corporate image and consumer attitudes toward brands. An important research gap is how the visual attention paid to cause-related cues in social media affect consumer attitudes and behaviors. In the present study, we analyze the moderating role of the visual attention paid to Instagram-based, cause-related posts on the impact of consumer perceptions (i.e., corporate image), beliefs (trust), and attitudes (i.e., corporate social responsibility [CSR] support) on behavioral intentions (i.e., cause participation, consumer advocacy, and intention to share posts) for fast-food restaurants. Data for the study were collected in a between-subjects experiment with 123 participants. Visual attention was measured using eye-tracking technology, and consumer attitudes and behavioral intentions through an online survey. The results show that the greater the attention paid to images (amount and duration of fixations) and the more revisits made lead to more positive attitudes and behaviors toward the cause and the company. On the other hand, the more time spent looking at the company's responses to negative user-generated content weakens the relationship between trust and consumer advocacy toward the company. These results can help practitioners design appropriate cause-related marketing strategies in social media.     

Fragmented networks and transnational entrepreneurship: Building strategies to prosper in challenging surroundings

Transnational entrepreneurship studies highlight the importance of personal profiles, institutions, and networks in creating and succeeding in this type of entrepreneurship. Even so, less is known about migrants whose networks are fragmented and closed, facing challenging environments at home and abroad. This paper aims to study the attributes of transnational entrepreneurs with small and fragmented networks, from post-conflict environments, who can perform an important role in the socioeconomic development and internationalization level of their countries of origin due to the cross border mobilization of resources they encourage. For that reason, the specific case of Colombian transnational entrepreneurs who have been able to overcome those obstacles with their transnational business is analyzed with the intention of understanding how they manage those shortcomings when engaging in transnational entrepreneurship. In aiming to obtain a deeper understanding of their characteristics, similitudes, differences, and motivations, the research uses multiple case studies. The main findings suggest that transnational entrepreneurs form purposeful–strategic networks to compensate their lack of amalgamated social systems, and that they have special qualities that distinguish them from other Colombian migrants and transnational entrepreneurs. Moreover, Colombian transnational entrepreneurs focus their business in the international market, using strategically their knowledge of both the local and foreign environment, while their main interest to do so is not altruistic but business oriented. Governments from post-conflict countries should promote transnational entrepreneurship while facilitating network formation and institutional trust through diverse strategies. Finally, implications for further research are drawn.     

我国股市伦理缺失的行为分析

我国股市近年来呈现出暴涨暴跌的态势，这与股票市场参与者伦理缺失的行为有关。以2001～2010年中国证监会公布的行政违法行为处罚公告为样本，从行为的方式、主体、市场环节、载体等多个层面进行实证分析，并加以解释；再从伦理道德的角度分析股市中的各类参与者，包括筹资者、投资者、中介服务结构、金融监管者从事证券违法行为的内在原因，指出导致这些伦理缺失行为的人文根源在于理性经济人的贪婪本性和由此导致的伦理道德的沦丧。     

基本公共服务均等化如何促进了个人创业--来自医保改革的证据

在高质量发展目标下,推行基本公共服务均等化、促进大众创业是中国经济新常态下的工作重点。基于中国城镇职工基本医疗保险在创业者和非创业者之间可得性的外生差异,本文使用中国健康与营养调查(CHNS)的微观数据,研究社会保险这一基本公共服务在创业者和非创业者之间的相对可得性如何影响个人的创业决策。我们发现,如果城镇职工基本医疗保险对于非创业者更可得,将成为“创业枷锁”,降低个人选择创业的可能性;如果城镇职工基本医疗保险对于创业者更可得,将成为“创业催化剂”,提高个人选择创业的可能性。此外,我们发现,城镇职工基本医疗保险的“创业催化剂”作用对于来自中等收入家庭和小家庭的个人更为显著,而“创业枷锁”效应则更多地影响城镇职工基本医疗保险在薪酬体系中重要性更高的个体。本文认为中国的社会保险对于大众创业具有积极正面的影响。这对于我国社会保险制度的设计和促进经济高质量发展具有重要意义。     

The impact of habitual entrepreneurial experience on new firm closure outcomes

In this paper, we argue that it is difficult for habitual entrepreneurs to use their experiential knowledge to develop a more viable new firm than novice entrepreneurs. Hindered by the difficulty of disentangling how actions lead to outcomes in low predictive environments such as new firm settings; hampered by the novelty and uncertainty of new firm closure; and misguided by subjective beliefs about their ability, we contend that habitual entrepreneurs close their new firm just as quickly as novice entrepreneurs and are just as likely to go bankrupt. Using large-scale panel data that track new firm closure amongst 7400 new German firms, we find that the new firms run by habitual entrepreneurs close just as quickly as those run by novice entrepreneurs. We also find that habituals are just as likely as novices to see their new business go bankrupt.     

Entrepreneurs as Sophisticated Iconoclasts: Rational Rule‐Breaking in an Experimental Game

We analyzed the theoretical relationship between rule‐breaking by entrepreneurs and realized advantage. We tested the tenets of that relationship using an experiment where subjects, including entrepreneurs, compete in a business strategy game where rule‐breaking is possible (but does not directly correlate with benefits). We found that entrepreneurs break the rules more often and realize greater benefits because they break rules in a smarter way. The ability to be sophisticated in rule‐breaking behavior stems from breaking the rules earlier and responding more aggressively to positive feedback. Such actions can create new net value in the economy—reinforcing the idea of entrepreneurship as a social good.