Escolar Documentos
Profissional Documentos
Cultura Documentos
SELF-EFFICACY
DISTINGUISH
ENTREPRENEURS FROM
MANAGERS?
CHAO C. CHEN
Rutgers University
ANN CRICK
Rutgers University
Address correspondence to Dr. C.C. Chen, Rutgers University, Faculty of Management, 81 New Street, New-
ark, NJ 07102.
The authors thank Fred Dansereau and John Miner for comments on earlier versions of this article. Thanks
also to Hui-yuan Liao and Terrence Brown for assistance in the project. This research was supported in part by a
research grant from the Research Resources Committee of the Faculty of Management at Rutgers University.
the effect of ESE scores was significant, but the effect of locus of control was not. More specifically, it was
found that business founders had higher self-efficacy in innovation and risk-taking than did nonfounders.
The results of this study demonstrate the potential of entrepreneurial self-efficacy as a distinct char-
acteristic of the entrepreneur. From these results, some important implications can be drawn on entrepre-
neurial assessment, education, counseling, and community intervention. First, ESE can be used to identify
reasons for entrepreneurial avoidance. There may be many individuals who shun entrepreneurial activi-
ties not because they actually lack necessary skills but because they believe they do. This is especially
true for sectors of the population such as women or those minority groups who are perceived as lacking
entrepreneurial traditions. Communities and individuals could benefit from identifying sources of entre-
preneurial avoidance by targeting their efforts toward enhancing ESE of particular groups or individuals
for specific aspects of entrepreneurship.
An additional use of ESE is to identify areas of strength and weakness to assess the entrepreneurial
potential of both an individual and a community. Once entrepreneurial potential is identified, resources
can be channeled and more effectively used to promote entrepreneurship. Finally, diagnosis and treatment
of ESE can be performed on real entrepreneurs. The entrepreneur may be completely avoiding, or per-
forming less frequently, certain critical entrepreneurial activities because s/he lacks self-efficacy. For ex-
ample, the entrepreneur may be avoiding company growth for fear of losing control. Identification and
removal of self-doubt will enable the entrepreneur to be actively engaged in entrepreneurial tasks, more
persistent in the face of difficulty and setbacks, and more confident in meeting challenges.
Overall, ESE is a moderately stable belief and requires systematic and continuous efforts to be
changed. Two broad approaches can be taken toward desired change. One is the micro-approach that
directly focuses on peoples beliefs. In designing and conducting entrepreneurship courses, training insti-
tutions should not just train students in critical entrepreneurial skills and capabilities but also strengthen
their entrepreneurial self-efficacy. The current state of entrepreneurship courses in most management
schools may fall short in both respects. Courses focus on commonly identified management skills, but
often ignore entrepreneurial skills such as innovation and risk-taking. Furthermore, the teaching of entre-
preneurial skills tends to be technical, with insufficient attention paid to the cognition and belief systems
of the entrepreneur. Educators should take into account entrepreneurial attitudes and perceptions when
designing or assessing their course objectives. Conscious efforts could be made to enhance ESE by involv-
ing the students in real-life business design or community small business assistance, by inviting success-
ful entrepreneurs to lecture, and by verbal persuasion from the instructor and renowned entrepreneurs.
The second approach to enhancing ESE is to work on the environment of potential and actual
entrepreneurs. According to the reciprocal causation model, the environment may affect self-efficacy not
only directly but also indirectly through performance. An environment perceived to be more supportive
will increase entrepreneurial self-efficacy because individuals assess their entrepreneurial capacities in
reference to perceived resources, opportunities, and obstacles existing in the environment. Personal effi-
cacy is more likely to be developed and sustained in a supportive environment than in an adverse one.
A supportive environment is also more likely to breed entrepreneurial success, which in turn further en-
hances entrepreneurial self-efficacy. Communities can work toward creating an efficacy enhancing envi-
ronment by making resources both available and visible, publicizing entrepreneurial successes, increasing
the diversity of opportunities, and avoiding policies that create real or perceived obstacles. 1998 Else-
vier Science Inc.
INTRODUCTION
There is an increasing emphasis on the role of self-efficacy in the study of entrepreneur-
ship, including areas such as entrepreneurial career preferences, intentionality, and per-
formance (Boyd and Vozikis 1994; Chandler and Jansen 1992; Gartner 1989; Krueger
and Brazeal 1994; Scherer et al. 1989). Self-efficacy is an individuals cognitive estimate
of his or her capabilities to mobilize the motivation, cognitive resources, and courses
of action needed to exercise control over events in their lives (Wood and Bandura
SELF-EFFICACY AND ENTREPRENEURS VS. MANAGERS 297
1989). One important effect of self-efficacy is on the choice of behavior settings. Individ-
uals tend to choose situations in which they anticipate high personal control but avoid
situations in which they anticipate low control (Bandura 1977b, 1982; Bandura and
Schunk 1981; Wood and Bandura l989). Accordingly, to the extent that people plan
and choose their career paths, they assess their personal capabilities against the require-
ments of different occupations. This assessment of their personal capabilities therefore
directs people to prepare for and enter occupations in which they feel efficacious but
avoid occupations in which they feel a lack of competence (Betz and Hackett 1981, 1986;
Miura 1987; Scherer et al. 1989).
Starting ones own business or initiating a new venture is often described as a pur-
posive and intentional career choice (e.g., Bird 1988; Katz and Gartner 1988). Although
there can be a wide variety of contextual as well as individual factors that influence the
entrepreneurial choice, the role of entrepreneurial self-efficacy has been emphasized
as a key antecedent (Boyd and Vozikis 1994; Krueger and Brazeal 1994). Boyd and
Vozikis (1994) explicitly proposed that entrepreneurial self-efficacy affects entrepre-
neurial career choice and development. However, so far no empirical research has been
reported that tests this hypothesis. In the current research, we explored whether entre-
preneurial self-efficacy distinguishes those who pursue, or intend to pursue, a career
of owning and running their own businesses from those who do not. Specifically, we
conducted two surveys: one on students to examine whether entrepreneurial self-effi-
cacy affected entrepreneurial intentionality and the other on small business executives
to examine whether it distinguished entrepreneurs from managers.
Because the theoretical foundation of our research question lies in the self-efficacy
literature, we first review some of the pertinent conceptual and measurement issues
regarding self-efficacy. We then further develop the concept of entrepreneurial self-
efficacy and its relationship to the entrepreneurial decision based on authors from the
field of entrepreneurship. Finally, we report our study and discuss theoretical and practi-
cal implications.
FIGURE 1 Relations among behavior (B), cognition (C), and environment (E).
cognitive and other personal factors (C), and environment events (E) (Figure 1). Each
of the three factors affects and is affected by the other two. For example, on the one
hand, a persons action can change his or her environment as well as the way he or she
views self and environment; on the other hand, the environment and his or her percep-
tions of self and the environment can also change his or her behavior. At a particular
time, however, different sources of influences may have more or less of an effect, and
reciprocal influences do not occur simultaneously (Wood and Bandura 1989).
The notion of reciprocal causation is important in understanding self-efficacy and
its determinants and effects. For instance, research on the effects of self-efficacy (e.g.,
Bandura 1977b, 1982, 1986; Bandura and Schunk 1981; Wood and Bandura 1989) found
that self-efficacy is the most effective predictor of performance. People with high self-
efficacy have more intrinsic interest in the tasks, are more willing to expend their effort,
and show more persistence in the face of obstacles and setbacks. As a result, they per-
form more effectively. Performance and performance accomplishments are not just the
outcome of self-efficacy, they are also the determinants of self-efficacy. Performance
accomplishments are found to be the most influential in shaping and estimating ones
self-efficacy.1 Individuals monitor and assess their own performance to formulate and
adjust their own sense of self-efficacy. Performance and self-efficacy therefore form a
cycle of mutual reinforcement. Self-efficacy affects performance through interest, moti-
vation, and perseverance, whereas performance provides feedback information, on the
basis of which self-efficacy is further evaluated and modified.
It should be noted that research has consistently shown that even though there
is a positive correlation between self-efficacy and performance accomplishment, self-
efficacy is a better predictor than past performance/experience for future performance
(Bandura 1982, 1986). This is because, first, there are sources other than past perfor-
mance that affect the persons self-efficacy. Second, it is the attribution of performance
rather than the objective performance per se that affects peoples self-efficacy. Low self-
efficacy may persist at times of success if external attributions (e.g., chance) are made,
the same for high self-efficacy at times of failure. It is possible that even with objectively
similar abilities and experiences, people may still develop different levels of self-
efficacy.
1
The other three major sources of self-efficacy in the order of influence next to performance are vicari-
ous experience (learning through role models), verbal persuasions (e.g., being told one is good), and physio-
logical arousal (such as feeling fatigue).
SELF-EFFICACY AND ENTREPRENEURS VS. MANAGERS 299
Level of Specificity
Students of self-efficacy frequently view the specificity of the construct as an advantage
both conceptually and for predicting and influencing behavior (Bandura l982; Gist 1987;
Wood and Bandura 1989). However, we argue that it is the relative rather than the abso-
lute level of specificity that distinguishes self-efficacy from other constructs, and self-
efficacy of different types of tasks can vary in the levels of specificity. In the following,
we first compare specificity of self-efficacy with that of other similar constructs and then
discuss how specificity is relevant to the target of behavior domains.
Specificity-Generativeness of Self-Efficacy
Although self-efficacy is known to be task specific, the level of specificity can still vary
with the task domain. The most frequent definition of self-efficacy refers to perceived
capabilities to perform a specific task (e.g., Bandura 1982; Gist 1987). However,
Wood and Bandura (1989) also used the term event, which covers a range of specific-
300 C.C. CHEN ET AL.
ity levels from execution of specific tasks to the choice of a career. Obviously the control
over the event of a singular task is much more specific than the control over the event
of a career. One can imagine even more general events that cut across different voca-
tions. The question is how general can self-efficacy be without losing its specificity, which
is lauded as such an advantage over other related constructs.
Bandura (1982) maintained that although self-efficacy is task specific, it can also
be generative, that is, self-efficacy with respect to one task may be generalized to another
task. The notion of generativeness therefore allows a broader application of self-effi-
cacy, while at the same time it imposes a condition for such application. That is, the
tasks should be more or less interrelated (Gist 1987). The reason that self-efficacy can
be applied to career choice is presumably because an occupation contains a set of inter-
related tasks. To use self-efficacy beyond a well-defined task domain across unrelated
tasks and situations may offset the very task-specificity advantage of the construct. It
may even render self-efficacy indistinguishable from universal dispositional constructs
such as self-esteem or locus of control.
Measurement of Self-Efficacy
Self-efficacy can be applied to a variety of domains as long as the efficacy measure is
tailored to the specific tasks being assessed (Bandura l982). The predictive power will
be sacrificed as the measure becomes more general (Gist 1987). This is to say that regard-
less of the specificity of the task domain, assessment of efficacy has to be at the specific
task level to maintain its predictive power. This poses a dilemma for measuring self-
efficacy for a general domain. For instance, one can measure self-efficacy of running
ones own business by referring to self-employment in general or alternatively, one can
measure entrepreneurial self-efficacy by referring to specific tasks involved in running
ones own business. As much as one would like to increase the predictive power, it is
impractical to enumerate all possible tasks of entrepreneurship. A balance has to be
made between specificity and generality so as to adequately but parsimoniously define
a career domain.
Gist (1987 p. 481) offers the following advice: It would be more promising to gen-
eralize self-efficacy perceptions by aggregating across a number of related but domain-
specific measures (e.g., a cluster of specific competencies within verbal skills) than by
attempting to devise a broad omnibus test. An omnibus measure is likely to offer conve-
nience, but this probably will be at greater expense to predictive power. One way of
measuring self-efficacy of a broader domain, as we did in this study, is to develop a
conceptual framework of task requirements, on the basis of which self-efficacy of a do-
main is aggregated from self-efficacy of various constituent subdomains.
research (Brockhaus and Horwitz l986; Gartner 1989). Second, as a belief of ones voca-
tional capabilities, entrepreneurial self-efficacy is relatively more general than task self-
efficacy. It therefore should be fairly stable yet not immutable. This allows entrepre-
neurs to derive, modify, and enhance their self-efficacy in their continuous interaction
with their environment. Third, as self-efficacy is closest to action and action intentional-
ity (Bird 1988; Boyd and Vozikis 1994), it can be used to predict and study entrepre-
neurs behavior choice, persistence, and effectiveness. Finally, the relationship between
self-efficacy and behavior is best demonstrated in challenging situations of risk and un-
certainty, which are believed to typify entrepreneurship.
METHOD
Specifying the Domain of Entrepreneurship for Measuring ESE
As discussed earlier, the construct of self-efficacy is intricately related to its measure-
ment. The construct development of ESE dictates a specification of the domain of entre-
preneurship as well as its key constituent tasks. Inappropriate specification of the task
domain directly affects its conceptual distinctiveness and its predictive power on depen-
dent variables. The challenge to us was to identify specific entrepreneurial tasks that
together represent the entrepreneurial domain.2 For this purpose we turn to literature
that defines entrepreneurship in terms of the roles and tasks that the entrepreneur
performs.
2
So far there has been no scale that measures ESE at the level of specific entrepreneurial tasks. Sherer
et al.s (1982) general self-efficacy measurement is not career related. Betz and Hacketts (1981) self-efficacy
scale is career related but not tailored to entrepreneurship. Sherer et al.s (1989) entrepreneurial task self-
efficacy is closest to our need but is an omnibus scale that stops at major management functions of accounting,
production, marketing, human resources, and general organization without spelling out specific tasks within
each function.
SELF-EFFICACY AND ENTREPRENEURS VS. MANAGERS 303
Samples
Study 1
Approximately 140 students from a large northeastern university participated in study
1 on a voluntary basis. The classes included two MBA entrepreneurship electives (n 5
34), two MBA required organizational behavior classes (n 5 78), and one organizational
psychology elective for undergraduate seniors (n 5 29). Female students were close
to being equally represented in the psychology (47%) and the organizational behavior
(52%) classes but were much fewer (23%) in the entrepreneurship classes. Each partici-
pant attended only one of the three classes at the time of this study. Participants filled
out the questionnaires at the beginning of the semester.
Study 2
Participating in the second study were small business owners and executives from a
county chamber of commerce in a northeastern state. We applied a rather restricted
definition of entrepreneur (Robinson et al. 1991; Wortman 1986) to distinguish them
from managers. Executives who founded their current companies were considered en-
304 C.C. CHEN ET AL.
trepreneurs, whereas those who did not found their current companies were managers.
By using this criterion, we attempted a more rigorous test than the class criterion as used
in the student sample. The Chamber of Commerce membership sample was restricted to
eliminate executives involved with non-profit organizations and those who are currently
retired. In addition to measuring ESE, we also included a measure of locus of control
as developed by Levenson (1973).
Our original sample included 1533 potential respondents. Of these, 281 were elimi-
nated because the business address or the individual in the targeted position had
changed. Of the 1,252 remaining, we received 175 usable instruments for a response rate
of 14%. The average age of respondents was 45.4 years, the average level of education
achieved was a college degree, and 18% of the respondents were female. Fifty-nine per-
cent of the respondents reported being founders of their businesses.
The age of the businesses averaged 28 years and ranged from 1 year to 160 years,
with 20% less than 5 years old, 50% being less than 15 years old, 80% less than 50 years
old. The businesses represented all industrial sectors; however, 42.5% were services,
and an additional 13.8% were specifically financial in nature, whereas 12.7% were man-
ufacturing. As for the size of the businesses, the average number of employees was 135,
with 60% reporting less than 20 employees and 88% with 100 or fewer employees.
The response rate prompted a nonresponse bias test, conducted by calling 75 ran-
domly selected business owners who had not previously responded to the survey. Data
was gathered from 30 of the owners on a limited number of key variables, including
owner characteristics of age (mean 5 47.3), gender (13% female), education (a college
degree) and founder status (50% founders) and business characteristics of business age
(mean 5 30) and size as measured by number of employees (mean 5 160). T-tests of
the means were performed, and no significant differences were found between respon-
dents and nonrespondents on any of the key variables.
Measures
Entrepreneurial Self-Efficacy(ESE).
ESE was measured in reference to the 26 roles and tasks identified earlier. We asked
respondents to indicate their degree of certainty in performing each of the roles/tasks
on a 5-point scale ranging from 1 5 completely unsure to 5 5 completely sure. To reduce
social desirability in reporting ESE, the survey instructions emphasized the importance
of honesty for self-assessment and promised confidential and individual feedback of the
participants own score in comparison with the aggregate score of the total sample.
Principal component factor analysis with varimax rotation was performed on the
tasks based on the combined data of the two studies. A scree plot of the eigenvalues
showed clearly five factors all above the eigenvalue of 1.00, accounting for 56.6% of
the variance (Table 1). Twenty-two out of 26 items loaded on the five factors, all at or
above the level of 0.40. The five factors were marketing, innovation, management, risk-
taking, and financial control. We calculated the total score of ESE by averaging the 22
items; the five component ESE scores were calculated by averaging items within each
of the five factors. The Cronbach alpha reliability coefficients of the total and subscales
are in the diagonal positions of Table 2.
SELF-EFFICACY AND ENTREPRENEURS VS. MANAGERS 305
Marketing
Set and meet market share goals 0.86 0.10 0.14 0.03 0.10
Set and meet sales goals 0.85 0.08 0.06 0.10 0.03
Set and attain profit goals 0.76 0.08 0.06 0.10 0.03
Establish position in product market 0.65 0.35 0.09 0.06 0.05
Conduct market analysis 0.56 0.36 0.18 20.12 0.10
Expand business 0.46 0.32 0.02 0.35 0.08
Innovation
New venturing and new ideas 0.09 0.71 0.10 0.39 20.02
New products and services 0.17 0.71 0.01 0.28 20.03
New markets and geographic territories 0.36 0.61 0.04 20.06 0.00
New methods of production, marketing and 0.17 0.58 0.26 0.05 0.22
management
Management
Reduce risk and uncertainty 0.04 0.04 0.82 20.01 0.17
Strategic planning and develop information 0.15 0.07 0.70 0.06 0.32
system
Manage time by setting goals 0.33 0.07 0.50 20.02 0.14
Establish and achieve goals and objectives 0.44 0.16 0.50 0.13 20.07
Define organizational roles, responsibilities, 0.09 0.05 0.50 0.46 0.11
and policies
Risk-taking
Take calculated risks 0.05 0.25 0.09 0.75 0.03
Make decisions under uncertainty and risk 0.03 0.23 20.07 0.72 0.13
Take responsibility for ideas and decisions 0.15 0.01 0.10 0.46 0.32
Work under pressure and conflict 0.35 0.00 0.10 0.40 20.07
Financial control
Perform financial analysis 0.11 0.03 0.10 0.07 0.88
Develop financial system and internal 0.08 0.09 0.23 0.05 0.86
controls
Control cost 0.26 20.18 0.20 0.23 0.47
Eigenvalue 7.42 2.36 1.88 1.71 1.28
% of variance 27.6 9.1 7.2 6.6 5.0
Locus of Control
Levenson (1973) developed a triple-dimensional measurement of locus of control: inter-
nal control, control by powerful others, control by chance. For our study we focused
on the internal control and the chance control. Using principal component factor analy-
sis with varimax rotation, we found two factors that confirmed Levensons original con-
ception. As can be seen in Table 3, five internal control items loaded on one factor
(Cronbach alpha 5 0.77) and five chance control items loaded on the other (Cronbach
alpha 5 0.73).
Entrepreneurial Decision
We measured the entrepreneurial decision of the students on a 5-point scale, in terms
306 C.C. CHEN ET AL.
of their intention to start up a business. In five items, we asked the respondents how
interested they were in setting up their own business; to what extent they had considered
setting up their own business, to what extent they had been preparing to set up their
own business, how likely it was that they were going to try hard to set up their own
business, and how soon they were likely to set up their own business. The Cronbach
alpha for the scale is 0.92. For the sample of business executives, founder versus non-
founder, coded as one and zero respectively, was the criterion of entrepreneurial de-
cision.
Background Variables
The student respondents provided background information on their gender, the number
of management courses they had taken, and whether they had friends or relatives who
were or had been entrepreneurs. The business executive respondents were asked about
their gender, age, educational level, whether or not they had been involved in starting up
a company, whether or not parents or siblings had been entrepreneurs, and information
about the company, such as years of operation, number of employees, sales volume,
and the number of management levels of the company.
Study 2
To test H1 with the sample of real-world entrepreneurs, the total and the component
ESE scores were compared between founders and nonfounders (see Table 6). Table
2 presents a correlation matrix of major variables in the second study.
the total ESE (r 5 0.19, p , .05), self efficacy of marketing (r 5 0.22, p , .01) and
management (r 5 0.16, p , .05).
3
It is worth noting that this occurred even though the subscores of ESE correlated with each other
fairly highly.
SELF-EFFICACY AND ENTREPRENEURS VS. MANAGERS 311
because the surveys were administered at the beginning of the entrepreneurship course,
the potential of gaining self-efficacy in innovation and risk-taking may have not come
to fruition. Lastly, it may be the case that self-efficacy in innovation and risk-taking are
more likely to be developed through real-world experience, which the entrepreneurship
students were still lacking. In any case, these differences would not have been found
had we surveyed only students or had we only had an omnibus measurement of ESE.
Limitations
As an exploratory study, this research is not without limitations. First, it is very impor-
tant to extend studies of career choice beyond the more convenient sample of students.
Unfortunately, the solicitation of real-world entrepreneurs proved to be a challenge to
us. Our business executives were limited to the members of the chamber of commerce.
Furthermore, although our nonresponse bias test did not show significant differences
between the respondents and nonrespondents in a number of key background variables,
future studies should increase resources and adopt more creative methods to improve
the response rate so as to allow for increased validity and generalization of the results.
A second problem is the potential social desirability in reporting self-efficacy de-
spite the precautions taken. The high interfactor correlation of our ESE scores may be
in part due to social desirability, although positive correlations among the subscores
were expected because of the inherent interrelatedness among the entrepreneurial
tasks. Future research should think of ways to reduce possible social desirability. For
example, efficacy beliefs in terms of competencies can be supplemented with those of
potential obstacles (MacMillan, Block, and Narasimha 1986; Krueger and Brazeal
1994).
Finally, the cross-sectional design of the research does not allow us to test causal
relations between ESE and entrepreneurial choice. According to the reciprocal causal-
ity argument, the relationships we found between ESE and entrepreneurial decision
can be used to attribute causality to either of the two variables. For instance, one could
take ESE as the cause, reasoning that people with higher ESE are more likely to set
up their own businesses, or one can take founding experience as the cause, reasoning
that people who get involved in setting up a business will develop higher self-efficacy.
The same ambiguity can be applied to the students regarding choosing academic classes.
This study relied on the first rationale, assuming that business setup is a purposive
and intentional activity and that nonintentional entrepreneurial experience does not
necessarily lead to enhanced self-efficacy. We nevertheless emphasize that to truly de-
termine causality, longitudinal research design is necessary. For example, a study could
be designed in which MBA students ESE and entrepreneurial intentions are measured
prior to the selection of the relevant courses, and again after taking the courses, and their
real career choice after graduation can be documented to validate the entrepreneurial
intention. Wood and Bandura (1989) also suggested using business simulations to deter-
mine causal effects by manipulating and controlling for ESE.
Longitudinal studies can also be conducted with the cooperation of institutions
such as a small business development center. Potential clients can be tested on their
ESE at time one, and their actual venture creation and entrepreneurial persistence can
be documented at subsequent time periods so as to explore the relationships between
ESE and entrepreneurial entry and performance. Longitudinal studies of real-world
entrepreneurial decisions also have the advantage to consistently define and measure
312 C.C. CHEN ET AL.
Conceptual Implications
For a long time, entrepreneurship scholars have been searching for constructs of individ-
ual characteristics that are unique to entrepreneurs. This study provides encouraging
though preliminary evidence that entrepreneurial self-efficacy has the potential to be
such an individual construct. The traditional personality approach to the psychology
of the entrepreneur experiences a dilemma in that an individual characteristic has to,
on the one hand, transcend specific situations in order to be a stable trait and, on the
other hand, be unique to the domain of entrepreneurship. Against these dual standards,
general personality traits such as the need for achievement and the locus of control have
achieved only limited success in differentiating entrepreneurs from higher achievers and
internalizers in other spheres of life (Brockhaus and Horwitz 1986; Gasse 1986; Low
and MacMillan 1988). Entrepreneurship scholars have been attracted to self-efficacy
primarily for its promise of domain specificity. Because it refers to cognitive evaluations
of personal capabilities in reference to the specific tasks of entrepreneurship, ESE
achieves the entrepreneurial distinctiveness that is both individual and contextual.
Although the advantage of domain specificity seems to be obvious, is ESE a stable
enough construct to qualify as an individual difference variable? This is both a concep-
tual and an empirical question. Conceptually, as we have discussed in the literature re-
view section, self-efficacy can vary from very specific (e.g., individual tasks) to moder-
ately specific (e.g., an occupation with a well defined cluster of tasks). Although the
malleability of self-efficacy depends very much on the nature of the task and the charac-
teristic of the person, one can say that other things being equal, malleability goes up
(or stability goes down) as a task is more specific. Because vocational self-efficacy is
moderately specific, we argue it is moderately stable/malleable. In a broader spectrum,
vocational self-efficacy, including ESE, is more specific/malleable than general disposi-
tional constructs but more general/stable than self-efficacy of individual tasks. It is there-
fore neither completely fixed nor easily changeable. Although career choice scholars
suggested that career related self-efficacy can be used for selection purposes (e.g., Gist
1987), implying that it is an individual difference variable, we submit that it remains
to be validated with further empirical research. Studies and experiments can be con-
ducted to explicitly explore the malleability of ESE through purposeful interventions.
How do we interpret the lack of a relationship between ESE and the company per-
formance in terms of size (number of employees) and sales? To start with, self-efficacy
is used to predict performance at the individual level. But even if the entrepreneur is
personally responsible for his or her companys performance, the relationship between
ESE and entrepreneurial performance is still more complex than we initially expected.
Past research has shown that task-specific self-efficacy best predicts immediately subse-
quent performance; the more distal, the less the predictability (Gist 1987). Because vo-
SELF-EFFICACY AND ENTREPRENEURS VS. MANAGERS 313
cational self-efficacy is multidimensional and takes a longer time to exercise its influ-
ence, its predictability of career performance may be reduced. Furthermore, many
things other than ESE could intervene to affect the companys bottom line. Thirdly,
although higher self-efficacy definitely motivates entrepreneurial entry, it may not al-
ways positively affect performance. Overconfidence may be too detached from reality
just as self-doubt can be debilitating. Finally, even if we found a significant correlation
between ESE and the current sales volume we would still have difficulty interpreting
it. It could be either that good sales temporarily boost ones self-efficacy or that the
participants were merely being consistent in reporting the companys sales and their
own efficacy beliefs. The lack of a relationship at least ruled out that possibility. To
summarize, the effects of ESE on entrepreneurial performance may be less straightfor-
ward than on entrepreneurial entry. Further efforts should be made to build and test
research efficacy models for entrepreneurial performance.
Practical Implications
The findings of this study also have practical implications. First, ESE can be used to
identify reasons for entrepreneurial avoidance. Although a low ESE may reflect an ac-
curate assessment of ones actual capabilities, there are many who otherwise would be-
come entrepreneurs but for doubts of their entrepreneurial self-efficacy. This is espe-
cially true for sectors of the population such as women or certain minority members
who may possess necessary entrepreneurial competencies but were deterred by low
ESE from entering a particular type of business or an entrepreneurial career altogether.
Communities and individuals could benefit from identifying sources of entrepreneurial
avoidance by targeting their efforts of enhancing ESE at particular groups or individuals
for particular aspects of entrepreneurship.
An additional use of ESE is to assess the entrepreneurial potential of both an indi-
vidual and a community. Krueger and Brazeal (1994) argued that the prerequisite of
entrepreneurship is the existence of entrepreneurial potential, of which self-efficacy is
a key component. Once entrepreneurial potential is identified, resources can be chan-
neled and more effectively used to stimulate entrepreneurial entry.
Diagnosis and treatment of ESE can also be performed on current entrepreneurs.
Lack of ESE may lie behind the fear of growth, diversification, or performing critical
aspects of the business. Recognizing and pinpointing areas in which the entrepreneur
feels inefficacious is the first step toward addressing the problem. Strengthened self-
efficacy will enable the entrepreneur to be more active in expanding and performing
critical activities and more persistent in the face of difficulty and setbacks.
Because ESE is moderately stable, systematic and continuous efforts have to be
made to enhance and sustain ESE. Two broad approaches can be taken. One is the
micro-approach that directly focuses on peoples beliefs. In designing and conducting
entrepreneurship courses, training institutions should not just pay attention to training
students in critical entrepreneurial skills and capabilities but also to strengthening their
entrepreneurial self-efficacy. The current state of entrepreneurship courses in most
management schools may fall short in both respects. Courses primarily focus on comple-
mentary skills of management but not as much on entrepreneurial skills such as innova-
tion and risk-taking. Furthermore, teaching of entrepreneurial skills tends to be techni-
cal with insufficient attention paid to the cognition and the belief systems of the
entrepreneur. Entrepreneurship educators should take into account entrepreneurial at-
314 C.C. CHEN ET AL.
titudes and perceptions in both designing and assessing their course objectives. Con-
scious efforts can be made to enhance ESE by involving the students in business design
or community small business assistance, by inviting successful entrepreneurs to lecture,
and by verbal persuasion from the instructor and renowned entrepreneurs.
The second approach toward an enhancement of ESE is to work on the environ-
ment of potential and actual entrepreneurs. According to the triadic reciprocal causa-
tion model, the environment may affect self-efficacy not only directly but also indirectly
through performance. An environment perceived to be more supportive will increase
entrepreneurial self-efficacy because individuals assess their entrepreneurial capacities
in reference to perceived resources, opportunities, and obstacles in the environment.
Personal efficacy is more likely to be developed and sustained in a supportive environ-
ment than in an adverse one. A supportive environment is more likely to breed entrepre-
neurial success, which in turn enhances entrepreneurial self-efficacy. Consistent with
this argument about the environmental effect, Krueger and Brazeal (1994) posited that
creating a congenial environment facilitates the perception of feasibility for entrepre-
neurship. Toward that end, the authors recommended that communities should, among
other things, make resources both available and visible, publicize entrepreneurial suc-
cesses, increase the diversity of opportunities, and avoid policies that create real or per-
ceived obstacles.
Entrepreneurial self-efficacy is not a panacea but only one variable in the complex
process of entrepreneurial decision and action. However, it is an individual characteris-
tic that shows signs of being unique to the potential and actual entrepreneur. Incorporat-
ing this construct into models of research, education, counseling, and community inter-
vention may help us better understand entrepreneurial action and give us some
additional leverage to translate entrepreneurial potential into entrepreneurial reality.
REFERENCES
Bandura, A. 1977a. Social Learning Theory. Englewood Cliffs, NJ: Prentice Hall.
Bandura, A. 1977b. Self-efficacy: Toward a unifying theory of behavioral change. Psychological Re-
view 84:91215.
Bandura, A. 1982. Self-efficacy mechanism in human agency. American Psychologist 37:122147.
Bandura, A. 1984. Recycling misconceptions of perceived self-efficacy. Cognitive Therapy and Re-
search 8:231255.
Bandura, A. l986. Social Foundations of Thought and Action: A Social Cognitive Theory. Englewood
Cliffs, NJ: Prentice-Hall.
Bandura, A., and Schunk, D.H. 1981. Calculating competence, self-efficacy and intrinsic interest
through proximal self-motivation. Journal of Personality and Social Psychology 41:586598.
Betz, N.E., and Hackett, G. 1986. Applications of self-efficacy theory to understanding career choice
behavior. Journal of Social and Clinical Psychology 4:279289.
Betz, N.E., and Hackett, G. 1981. The relationship of career-related self-efficacy expectations to per-
ceived career options in college women and men. Journal of Counseling Psychology 28:399410.
Bird, B. l988. Implementing entrepreneurial ideas: The case for intention. Academy of Management
Review 13:442453.
Boyd, N.G., and Vozikis, G.S. 1994. The influence of self-efficacy on the development of entrepreneur-
ial intentions and actions. Entrepreneurship Theory and Practice 18:6390.
Brockhaus, R.H. 1980. Risk-taking propensity of entrepreneurs. Academy of Management Journal
23:509520.
Brockhaus, R.H., and Horwitz, P. 1986. The psychology of the entrepreneur. In D.L. Sexton and R.W.
SELF-EFFICACY AND ENTREPRENEURS VS. MANAGERS 315
Smilor, eds., The Art and Science of Entrepreneurship. Cambridge, MA: Ballinger Publishing
Company.
Chandler, G.N., and Jansen, E. 1992. The founders self-assessed competence and venture perfor-
mance. Journal of Business Venturing 7:223236.
Dyal, J.A. 1984. Cross-cultural research with the locus of control construct. In H.M. Lefcourt, ed., Re-
search with the Locus of Control Construct, Vol. 3. New York: Academic Press, pp. 209306.
Englehart, A.R. 1995. Traditional versus nontraditional industries: Exploring the effect of entrepre-
neurial efficacy on women business owners. Paper presented at the Annual Academy of Manage-
ment, Entrepreneurship Division, Vancouver, British Columbia, August 69.
Gartner, W.B. 1989. Some suggestions for research on entrepreneurial traits and characteristics. Entre-
preneurship Theory and Practice 14:2737.
Gasse, Y. 1986. The development of new entrepreneurs: A belief-based approach. In D.L. Sexton and
R.W. Smilor, eds., The Art and Science of Entrepreneurship. Cambridge, MA: Ballinger Publish-
ing Company.
Gist, M.E. 1987. Self-efficacy: Implications for organizational behavior and human resource manage-
ment. Academy of Management Journal 12:472485.
Hisrich, R.D., and Brush, C.G. 1986. The Women Entrepreneur. Lexington, MA: Lexington Books.
Katz, J., and Gartner, W. 1988. Properties of emerging organizations. Academy of Management Re-
view 13:429441.
Kazanjian, R.K. (1988). Relation of dominant problems to stages of growth in technology-based new
ventures. Academy of Management Journal 31:257279.
Krueger Jr., N.F., and Brazeal, D.V. 1994. Entrepreneurial potential and potential entrepreneurs. En-
trepreneurship Theory and Practice Spring: 91104.
Levenson, H. 1973. Multidimensional locus of control in psychiatric patients. Journal of Consulting
and Clinical Psychology 41:397404.
Long, W. 1983. The meaning of entrepreneurship. American Journal of Small Business 8:756.
Low, M.B. and MacMillan, I.C. 1988. Entrepreneurship: Past research and future challenges. Journal
of Management 14:139161.
MacMillan, I.C., Block, Z., and Narasimha, P.N. 1986. Corporate venturing: Alternatives, obstacles
encountered and experience effects. Journal of Business Venturing 1:177191.
McClelland, D.C. 1961. The Achieving Society. Princeton, NJ: Van Nostrand.
Miner, J.B. 1993. Role Motivation Theory. New York: Routledge.
Miner, J.B. 1990. Entrepreneurs, high-growth entrepreneurs, and managers: Contrasting and overlap-
ping motivational patterns. Journal of Business Venturing 5:221234.
Miura, I.T. 1987. The relationship of computer self-efficacy expectations to computer interest and
course enrollment in college. Sex Roles 16:303311.
Mokry, B.W. 1988. Entrepreneurship and Public Policy. New York: Quorum Books.
Raynor, J.O. l974. Future orientation in the study of achievement motivation. In J.W. Atkinson and
J.O. Raynor, eds., Motivation and Achievement. New York: Wiley, pp. 121154.
Robinson, P.B., Stimpson, D.V., Huefner, J.C., and Hunt, H.K. 1991. An attitude approach to the pre-
diction of entrepreneurship. Entrepreneurship Theory and Practice Summer:1331.
Rotter, J. 1966. Generalized experiences for internal versus external control of reinforcement. Psycho-
logical Monographs 80 (1, Whole No. 609).
Scherer, R.F., Maddux, J.E., Mercandante, B., Prentice-Dunn, S., Jacobs, E., and Rogers, R.W. 1982.
The self-efficacy scale: Construction and validation. Psychological Reports 51:663671.
Scherer, R.F., Adams, J.S., Carley, S.S., and Wiebe, F.A. 1989. Role model performance effects on
development of entrepreneurial careet preference. Entrepreneurship Theory and Practice
13:5371.
Sexton, D.L., and Smilor, R.W., eds. 1986. The Art and Science of Entrepreneurship. Cambridge, MA:
Ballinger Publishing Company.
Shapero, A, and Sokol, L. 1982. The social dimensions of entrepreneurship. In C. Kent, D. Sexton,
316 C.C. CHEN ET AL.
and K. Vesper, eds., Encyclopedia of Entrepreneurship. Englewood Cliffs, NJ: Prentice Hall.
pp. 7290.
Wood, R., and Bandura, A. 1989. Social cognitive theory of organizational management. Academy of
Management Review 14:361384.
Wortman, M.S., Jr. 1986. A unified framework, research typologies, and research prospectuses for the
interface between entrepreneurship and small business. In D. Sexton and R.W. Smilor, eds., The
Art and Science of Entrepreneurship. Cambridge, MA: Ballinger Publishing Company.