1042-2587-94-183$1.

50
Copyright 1994 by
Baylor University

A Proposed Research
Model of Entrepreneurial
Motivation
Douglas W. Naffziger
Jeffrey S. Hornsby
Donald F. Kuratko

Drawing on the literature invoiving the venture start-up process, integrated with motiva-
tionai theory from the fieid of organizationai behavior, a model describing the factors that
affect firm start-up, strategic implementation, and the entrepreneur's decision to sustain
entrepreneurship is proposed. Several hypotheses for future research are suggested.

/arly research in the field of entrepreneurship sought to determine what person-

ality characteristics distinguished entrepreneurs from non-entrepreneurs, entrepreneurs
from managers in large firms, and successful entrepreneurs from unsuccessful entrepre-
neurs (Brockhaus, 1982; Brockhaus & Horwitz, 1986). The role of personal traits, such
as risk-taking propensity, locus of control, and need for achievement among others,
found their way into journals and models until Gartner (1988) commented that the
entrepreneur described by these research efforts had become larger than life and a sort
of "generic everyman"; some aspects of this description would fit almost anyone. In
Gartner's opinion, that line of reasoning had outlived its utility.
Carland, Hoy, and Cariand (1988) argued that to ignore the question of "who" was
analogous to separating the "dancer from the dance"; i.e., the dancer puts so much of
him/herself into the dance that the distinction between the two becomes unidentifiable.
Indeed, Shaver and Scott (1991, p. 39) concluded their research by stating:

The study of new venture creation began with some reasonable assumptions about
the psychological characteristics of "entrepreneurs." Through the years, more and
more of these personological characteristics have been discarded, debunked, or at
the very least, found to have been measured ineffectively. The result has been a
tendency to concentrate on almost anything except the individual. Economic cir-
cumstances are important; marketing is important; finance is important; even public
agency assistance is important. But none of these will, alone, create a new venture.
For that we need a person, in whose mind all of the possibilities come together, who
believes that innovation is possible, and who has the motivation to persist until the
job is done. Person, process, and choice; for these we need a truly psychological
perspective on new venture creation.

These arguments are consistent with the psychological argument defining behavior as a
function of the interaction between the individual and the environment (Endler, 1983).

Spring, 1994 29
Yet, Sexton and Bowman (1986) argued that empirical research had failed to agree on
which characteristics distinguished entrepreneurs from other business persons.
Gartner (1985) proposed a conceptual framework of new venture creation that por-
trayed the process as an interaction of the environment, the individual, the organization,
and entrepreneurial behavior. Gartner (1988) suggested that in entrepreneurship re-
search, the research questions should focus on the process of entrepreneurship instead of
who is the entrepreneur. His implication is that entrepreneurship is a multidimensional
process and that entrepreneurial traits are just one component of that process. Johnson
(1990, p. 48) noted that

few studies have explicitly addressed the question of how psychological predispo-
sition, individual behaviors, and firm-level outcomes are related. Entrepreneurship
is a multidimensional process that demands the utilization of multidimensional re-
search models if true understanding of the process is to be attained.

Thus, Gartner's (!989) call for studies that build on the previous literature and develop
theories for the study of the entrepreneurship process is even more important as the
research on entrepreneurship continues to evolve.
At about the time of the Gartner/Carland et al. debate, Greenberger and Sexton
(1988) proposed a model that incorporated individual characteristics and environmental
influences. Their model presented new venture creation as an interactive process in
which personal characteristics, including personality, interacted with an interpretation of
salient events in the environment to influence decisions concerning new venture cre-
ation. Greenberger and Sexton also included the concept of "vision," the entrepreneurs'
abstract image of the kind of business they intend to create which serves as a guide for
their own actions. The concepts of intentionality (Bird, 1988) and propensity (Mon-
tanari, Domicone, Oldenkamp, & Palich, 1990) have been suggested as key factors in
the venture creation process. Learned (1992) introduced a model that extended the
interaction of personality traits, intention, propensity, and the situation.
Answering questions about why people start businesses and how they differ from
those who do not (or those who start unsuccessful businesses) may be useful in under-
standing the "motivation" that entrepreneurs exhibit during start-up as a link to the
sustaining behavior exhibited later. Herron and Sapienza (1992, p. 49) stated, "because
motivation plays an important part in the creation of new organizations, theories of
organization creation that fail to address this notion are incomplete." Johnson (1990, p.
48) in his review of achievement motivation and the entrepreneur stated,

it remains worthwhile to carefully study the role of the individual, including his or
her psychological profile. Individuals are, after all, the energizers of the entrepre-
neurial process.

More importantly, Leamed (1992) proposed that the decision to found or to abandon the
attempt to found a business is triggered by the accumulation of confirming or discon-
firming evidence as perceived by the founder.
While the models proposed by Learned (1992) and Herron and Sapienza (1992)
concentrate on the interactive nature of variables leading up to the launch of a venture,
this paper attempts to extend existing researcb and theory into a model illustrating the
decision about sustaining entrepreneurship, i.e., remaining with a venture or starting
additional ventures, or abandoning entrepreneurship as a career choice. As Gartner,
Bird, and Starr (1992, p. 26) pointed out,

30 • ENTREPRENEURSHIP THEORY and PRACTICE

 entrepreneurship researchers need not "invent" any new theories in our quest for
developing theory about the nature of organizational emergence. There are countless
ideas and perspectives on the nature of organizations that are likely to be useful for
thinking about emerging organizations.

Therefore, the thrust of this paper does not argue with a behavioral-trait description
of entrepreneurship. In fact, this paper agrees with the portrayal of an interactive rela-
tionship. However, previous models imply that entrepreneurship ceases somewhere
during the operation of the ongoing venture. Individuals involved in the operation of
their own enterprises would undoubtedly dispute that view. Churchill (1992, p. 585)
summarized the anticipated research needs conceming the psychology of entrepreneurs
by stating,
r

we lack a generic definition of the psychology of the entrepreneur and the relation-
ship of psychological traits to both the initiation and growth of new enterprises . . .
it might be beneficial to concentrate our research efforts, not on the psychological
characteristics of entrepreneurs, but on determining why they succeed or fail.

Similarly, it is the contention of this paper that predicting who might be more likely to
start a business or what they do in the process of deciding to start a business is only a
partial view of the process of entrepreneurship. An expanded view of entrepreneurship
should include the entirety ofthe entrepreneurial experience, that is, behaviors necessary
in the operation of the firm, its performance, and the psychological and non-
psychological outcomes resulting from firm ownership.
The model developed in this paper also focuses on the role of firm performance in
the entrepreneurship process. Firm performance is an outcome that all firm owners must
address. Without an effective ongoing business unit, the entrepreneur is perhaps little
better off than had he/she not started the firm in the first place, except for the value of
the experience. Recent models of organizational performance have been developed by
Cragg and King (1988) and Keats and Bracker (1988) and have included the role of
individual characteristics as an influence on organizational performance. Keats and
Bracker hypothesized that organizational performance is a function of many variables,
one of which is "entrepreneurial intensity," a combination of traits and other personal
characteristics. Research by Cragg and King revealed that owner objectives influenced
the managerial practices employed and subsequent firm performance.
To develop a better understanding of the entirety of the entrepreneurial experience,
this paper proposes a model that integrates the interactive aspects of models proposed by
Gartner (1985), Greenberger and Sexton (1988), Leamed (1992), and Herron and Sa-
pienza (1992) with work done on small firm performance. Finally, based on the theo-
retical underpinnings of Porter and Lawler's (1968) integrative model of motivation and
Adams's (1965) ideas, tbe mode! of entrepreneurial motivation herein describes the
process by which entrepreneurs decide whether or not to engage in entrepreneurial
behavior. The model moves beyond the issue of firm start-up to deal with the process
that motivates an entrepreneur to stay with the entrepreneurship as a career choice.
Specifically, the motivational process of new venture creation and sustained own-
ership encompasses perceptions and comparisons similar to those suggested by Porter
and Lawler (1968) and Adams (1965). Similarities to the Porter and Lawler model
include:
(1) An Implementation-to-Outcome relationship similar to Porter and Lawler's Perfor-
mance-to-Outcome relationship.

Spring, 1994 31
(2) The impact of both intrinsic and extrinsic rewards on sustained behavior.
(3) The value of rewards and their impact upon sustained behavior.
(4) Both models are integrative in nature: the current model encompasses several as-
pects of venture start-up and continuance, while Porter and Lawler integrate the
roles of individual abilities and traits, role perceptions, and equity comparisons in
motivating sustained behavior.
The model extends existing models to integrate the start-up decision with issues of
strategy formulation and implementation and sustained entrepreneurial behavior. The
process described in the model identifies how a new firm takes shape, how it is managed,
and what leads the owner to sustain entrepreneurship. Figure 1 presents a graphic
representation of the model.
The following sections will now address the various components of the model and
present hypotheses for empirical testing.

THE DECISION TO BEHAVE ENTREPRENEURIALLY

The decision to behave entrepreneur ally is based on more than personal character-
istics and individual differences. The interaction of personal characteristics with other
important [perceptions of situational factors needs to be better understood. For example,
Reynolds (1992) proposed three factors that may affect an individual's decision to start
a new firm: (1) the characteristics of the economic context; (2) the characteristics of the
individual's life or career context; and (3) underlying personal disposition. Based upon
this and other existing literature, five major categories of variables are believed to
interactively influence an individual's decision to behave entrepreneurially. Those vari-
ables are: (1) an entrepreneur's personal characteristics; (2) the individual's personal
environment; (3) the relevant business environment; (4) the specific business idea; and
(5) the goals of the entrepreneur. A review of the literature suggests several variables in
each category, as is discussed in the following section. In addition, it is hypothesized
that the entrepreneur considers both his or her ability to develop and implement an
effective business strategy and whether or not the outcomes accruing from ownership
would be equal to the desired or expected outcomes.

Personal Characteristics
The search for personality differences between entrepreneurs and non-entrepreneurs
was pursued by numerous researchers in the early 1980s. Much of the research focused
on traits such as the need for achievement, locus of control, and risk-taking propensity.
Brockhaus (1982) and Brockhaus and Horwitz (1986) provide excellent reviews of the
literature in that area. Gartner's (1985) model of new venture creation included those
three variables, not necessarily to say that they differentiate entrepreneurs from non-
entrepreneurs, but to indicate that they are important in the process of starting a business.
Other findings of individual characteristics related to the venture creation process in-
clude energy level, confonnity, and need for autonomy (Sexton & Bowman-Upton,
1986), persistence and dominance (Neider, 1987), desire for personal control (Green-
berger & Sexton, 1988), and the desire to build something of one's own (Knight, 1987).
Greenberger and Sexton (1988) also hypothesized that one's attitude about one's self is
influential in the decision to start a business. Herron and Sapienza (1992) proposed the
importance of personality traits in affecting an entrepreneur's level of aspiration towards
a venture. (For additional key reviews of research on entrepreneurial characteristics see

32 ENTREPRENEURSHIP THEORY and PRACTICE

 y
c
"C in in
0)
UJ n c E
ti S c o
Intrlnsli
Re

To _
">- c
3 01
cQJ E*
Q. ni
01 C
i IB
LU
c E

11
• •

2 %
S CO

Ul

1
tat ion/
)tlon/

VI
rison

n
tlon

u
me

01 -C c
So*
11
O ID 0>
•" •£
u m S £ E
OJ O. 1 ^ g c
g-o S O O Ol 0) O 09
UJ U *" i » E
LU 51 oc
-
ii
<o "5 ™ in
C C C 0)
o O c
S
_ S 2 "5
<D Q> ft) 13
a. Q. a CO
(J UJ C Ul
Q. Q. D. m

Spring, 1994 33
Homaday, 1982; Brockhaus, 1982; Carland, Hoy, Boulton, & Carland, 1984; Brock-
haus & Horwitz, 1986.)

Personal Environment
Non-trait types of personal characteristics such as family status, sex, and growing up
in an entrepreneurial family also influence one's decision to act entrepreneurially. Mar-
tin (1984) indicated that individuals enter a free-choice period that results from the
interaction of five distinct elements: (1) partial social alienation; (2) psychological/
physical dispositions; (3) demonstration effects; (4) family factors; and (5) precipitating
events. Greenberger and Sexton (1988) critiqued Martin's work and hypothesized that
even when the idea exists and people have the "personality of an entrepreneur" they
may need the push from others to convince themselves to implement the idea. Therefore,
they added "social support" to their model as important in the entrepreneurial decision.
Shapero (1984) hypothesized that venture creation is the result of two decisions: (1)
to change from a given life path, and then, (2) to start a company. Changes in one's life
path usually come about after some form of displacement and the decision to start a
company is the result of the perception that such an idea is feasible. Shapero also
included the entrepreneur's peers, family, mentors, role models, teachers, respected
public figures, and writers as influential in shaping one's perception of the feasibility of
starting a business.
Cooper and Dunkelberg (1987) conducted a survey of 890 entrepreneurs and found
that 50% had at least one parent or guardian who was self-employed, 36% had at least
a college degree while 15% had a college degree plus some advanced study. They also
found that the median number of years per job of entrepreneurs was 8, indicating they
were not necessarily corporate misfits as they are often portrayed. Other factors in an
individual's personal environment that are important in the decision-making process are
the social and entrepreneurial networks that provide access to support and expertise
(Smeltzer & Fann, 1989; Carsmd & Johnson, 1987; Carsrud. Gaglio. & Olm, 1987;
Aldrich & Zimmer, 1986; Reynolds, 1992) as well as educational background (Ron-
stadt, 1985).

Personal Goals
Entrepreneurs have a set of goals they seek to accomplish when they decide to
initiate a new venture. These goals may vary for each entrepreneur. Some may seek to
rapidly grow a firm, cash out, and retire or move on while others may simply seek to be
their own boss (Knight, 1987). Still others may attempt to provide financial security for
current and future family generations. Bird (1988, p. 444) commented that "the
founder's intentions determine the form and direction of an organization at its inception.
Subsequent organizational success, development (including written plans), growth, and
change are based on these intentions, which are either modified, elaborated, embodied,
or transformed." Katz and Gartner (1988, p. 431) included "intentionality" in their
model of properties of emerging organizations. They stated "Organizational intention-
ality at the time of creation reflects the goals of the agents or founding entrepreneurs."
Greenberger and Sexton (1988) identify the entrepreneur's "vision" as a significant
guiding force in the development of the new venture. Furthermore, Leamed (1992)
included intentionality and propensity to found a venture as key variables in tbe entre-
preneurial process. Herron and Sapienza (1992) demonstrated the importance of the
entrepreneur's "level of aspirations" in their venture initiation model.

34 • ENTREPRENEURSHIP THEORY and PRACTICE

 Thus, the entrepreneur's goal set should be included in a model of the venture
creation process. However, it must be stated that each entrepreneur may have a set goal
unique to his or her particular business and molded by his or her individual situation. For
example, a middle level manager recently laid off by an employer of twenty years may
have employment and security in mind, whereas an electronic engineer may have the
creation of the next rapid growth high-tech venture as a goal, and a retiree may simply
want to keep busy and bring in a little money to supplement retirement. Regardless of
the goals, it is believed they will influence the decision and shape the eventual business.

Business Environment
An entrepreneur creates a firm to exist and compete in a business environment,
whether on a local, regional, or national basis. That being the case, an examination of
that relevant environment should be part of the decision-making process. A variety of
factors operate in the business environment that may influence one to undertake a new
venture. Shapero (1984) cited factors such as societal attitudes toward starting a busi-
ness, societal attitudes toward business in general, the economic climate of the market,
and the availability of accessible funds as important environmental influences in the
decision to start a firm. Several authors cite the importance of membership in an entre-
preneurship-supportive network (Carsrud & Johnson, 1987; Carsrud. Gaglio. & Olm,
1987; Aldrich & Zimmer, 1986; Reynolds. 1992). Leamed (1992) proposed that the
environment affects the situation, which in tum stimulates an entrepreneur's intention-
ality as well as the eventual decision to start a venture. In another vein. Fry (1987)
concluded that it may be too early to judge whether small business incubators were
influential in the decision to start a business; however, incubators are able to make
significant contributions to business success through emphasis on planning activities.

Business Idea
The final variable of the initial five categories, which seems to be assumed by
researchers, is the actual business idea that the prospective entrepreneur develops. Ob-
viously, no one will start a business without an idea; however, it must be recognized that
some ideas evolve into successful ventures while many ideas never reach the venture
creation stage. Thus, it is the contention of this paper that the existence of an idea and
the evaluation of that idea is an important part of the new venture decision-making
process.
Mitton (1989) spoke of entrepreneurs being able to spot unique opportunities where
others see nothing at all. Entrepreneurs are able to tum the commonplace into the unique
and the unexpected. Greenberger and Sexton (1988) identified "vision" as part of their
model. Olson (1985) stated that the first phase of the entrepreneurship process involves
the perception or awareness of an idea. Cooper and Dunkelberg (1987) found that 58%
of their sample left their previous employer because of the "pull" of their ideas for a
new venture.

Perceived Implementation-Outcome Relationship

It is hypothesized that perceptual interpretations made by the entrepreneur play a key
role in the total motivational process, as illustrated in the Porter and Lawler model. One
important perceived relationship is the strength of the relationship between the entre-
preneur's managerial strategies and firm outcomes. The entrepreneur must believe that

Spring, 1994 35
strategic and managerial actions that he or she initiates will lead to specific outcomes
achieved by the firm, such as increased sales, profit, or market share. The entrepreneur
will try to understand what actions lead to what outcomes as he or she attempts to guide
the firm through the marketplace. The proposed entrepreneurial motivation model hy-
pothesizes that the stronger this relationship is perceived to be, the stronger will be the
resulting motivation to continue to behave entrepreneurially, either in the form of con-
tinued pursuit of the current venture or initiation of further ventures. It is also hypoth-
esized that these perceptions will have a feedback effect on succeeding strategies,
strategy implementation, and management of the firm.

Perceived Expectation-Outcome Relationship

The final influencing factor is identified as the individual's perception that the
outcomes of the envisioned organization will meet or exceed expectations. It is proposed
that the entrepreneur enters the process with expectations of extrinsic and intrinsic
outcomes that will result from the inception and operation of the venture. The specific
expectations may vary for each individual. These expectations may evolve over time as
new opportunities present themselves or as the reality of operation and competition
emerges. As an example of varying goal sets dependent on the nature of the business and
the entrepreneur, Ronstadt (1984) identified "lifestyle ventures," "smaller profitable
ventures," and "high growth ventures" as a typology of differing businesses. The
corresponding outcome expectations are (1) independence, autonomy, and control; (2)
fmancial considerations; and (3) significant sales and profit growth, respectively. It is
hypothesized that the extent to which an entrepreneur believes that bis or her entrepre-
neurial expectations will be met or exceeded by the inception or continuance of a
venture, the stronger will be the motivation to engage in entrepreneurial behavior.
In summary, the decision to behave entrepreneurially is hypothesized to be the result
of the interaction of several factors. One set of factors includes the personal character-
istics of the individual, the individual's personal environment, the relevant business
environment, the individual's personal goal set, and the existence of a viable business
idea. In addition, individuals makes comparisons between their perception of the prob-
able outcomes and the personal expectations they have in mind. Finally, individuals look
at the relationship between the entrepreneurial behavior they would implement and the
expected outcomes that would result. Thus, it is contended that an individual's decision
to behave in an entrepreneurial fashion is clearly influenced by more than simply per-
sonal characteristics, as proposed in early entrepreneurial literature.
A "Go-No Go" decision will be made by individuals reaching this point. After
having evaluated the situation in its entirety, or at least as far as information will allow,
the individual will either choose to launch the venture, pursuing the strategy developed,
or decide to shelve the plans. It is proposed that a "No Go" decision will provide
feedback that will be incorporated into a new decision-making framework. This "re-
evaluation cycle" may show the individual that several options must be examined. For
example, different strategies may exist that could make the venture's prospects brighter,
the entrepreneur may need to adjust his or her expectations to make them somewhat
more realistic, or other such changes. Persons reaching a " G o " decision will then
proceed to the next stage of venture launch.

ENTREPRENEURIAL STRATEGIC MANAGEMENT

Individuals making the decision to act entrepreneurially must engage in a series of

36 ENTREPRENEURSHIP THEORY and PRACTICE

behaviors directed at getting the new venture started. Having accomplished that, they
must engage in the management of the emerging firm. As Anderson (1992, p. 57)
pointed out, "An entrepreneurial business has an infancy, an adolescence, and a ma-
turity. Entrepreneurs go through a similar kind of evolution, though the business and the
person seldom develop at the same pace and in harmony from newly hatched all the way
to adult." In the broadest sense all activities undertaken in an organization can be
considered to be part ofthe organization's strategy. The formulation and implementation
of a strategy aimed at achieving the firm's goals are the responsibilities of the entre-
preneur as is the evaluation of the firm's progress toward its strategic objectives.
The methods pursued for growth will affect the new venture's performance. The
entrepreneur, now owner-manager, must be able to effectively guide the firm through
the various stages of the organizational life cycle as discussed by Churchill and Lewis
(1983) and Scott and Bruce (1987). While this necessitates the adoption of new mana-
gerial behaviors in addition to those needed during tbe start-up phase, the activities the
entrepreneur engages in do lead to the performance outcomes of the firm. This trans-
formation in focus for the entrepreneur has been described as "probably the most
difficult to achieve and also perhaps the most important for organizational development''
(Hofer & Charan, 1984, p. 3). However, effective organizational management is de-
pendent on the development and implementation of strategies appropriate to the com-
petitive environment and the business acumen of the entrepreneur.

FIRM OUTCOMES
Outcomes will either be intrinsic or extrinsic (psychological or tangible) in nature.
Extrinsic outcomes will include financial or other tangible rewards made possible by the
financial performance ofthe firm. Intrinsic rewards, often cited by entrepreneurs, center
around the satisfaction of being one's own boss, being more in control of your own
destiny, and having ultimate responsibility for the success ofthe venture. All outcomes
will have some level of perceived value to the owner. Each owner will have his or her
own system of valuing outcomes. The actual outcomes accruing as a result of ownership
will then be compared with the individual's expectations in the manner discussed above.
The outcome of that comparison will then influence the individual's decision to sustain
entrepreneurial behavior.

SUSTAINED ENTREPRENEURSHIP
According to the model, tbe entrepreneur's expectations are then compared with the
actual or perceived outcomes ofthe firm, in a manner similar to that suggested by Adams
(1965) in his original development ofthe Equity Theory model of motivation. The model
proposes that future entrepreneurial behavior is based on the results of these compari-
sons. When outcomes meet or exceed expectations, the entrepreneurial behavior is
positively reinforced and the individual is motivated to continue to behave entrepreneur-
ially, either within the current venture or possibly through the initiation of additional
ventures, depending on the existing entrepreneurial goal set. When outcomes fail to meet
expectations the motivation of the entrepreneur will be lower and will have a corre-
sponding impact on the decision to continue to act entrepreneurially.
It is important to note that these expectations will likely change over time. They may
be modified as the venture evolves or as the entrepreneur enters succeeding individual
life-cycle stages. For example, self-employment or survival may be the overriding goals
in the early stages of tbe venture, while later on growth and success, market share, or

Spring 1994 37
family succession may take precedence. This shift must be taken into account when
trying to determine the strength of entrepreneurial motivation.
A new venture becomes the extension or embodiment ofthe entrepreneur (Osbome,
1987). The owner of the firm has fewer stakeholders to whom he or she is accountable
than do managers of large firms and therefore has a large degree of control over the goals
of the firm. As a result, the goals of the entrepreneur become the goals of the firm,
though they may be translated into some type of business-oriented terminology. Viewed
in this light, it is argued that when the achievements of the firm meet or exceed the
expectations of the owner, the owner is motivated to sustain entrepreneurship. This can
be accomplished either through continued association with the existing venture or
through the development of a new venture. Likewise, it can be argued that when the firm
ceases to achieve the goals of the entrepreneur to a satisfactory degree the owner will
terminate the organization by closing it down or terminate his or her association with it
by selling the firm.
Finally, it is hypothesized in the model that the entrepreneur studies the relationship
between the strategy that has been implemented and the outcomes that have resulted.
The decision to behave entrepreneurially is strengthened by the extent to which an
entrepreneur believes that his or her choice and implementation of a strategy was in-
strumental in bringing about the firm outcomes. When the entrepreneur sees a strong
relationship between these factors it reinforces the desire to sustain entrepreneurship.

THE INTEGRATIVE NATURE OF THE MODEL »^

The proposed model focuses on the entirety of the entrepreneurial process. This
process is not limited to venture launch activity. Entrepreneurship can take place in the
context of an existing organization as well as when an individual launches a firm.
Ventures require management, both strategic and operational. The entrepreneur becomes
the manager. As the venture evolves, outcomes accrue that are then evaluated by the
owner as to their value and importance. These evaluations influence the motivational
level of the owner regarding the desire to continue behaving entrepreneurially. If the
motivation is sufficient, the owner will continue to pursue entrepreneurship, either in the
current context or that of additional new ventures. As a result, it is felt that the model
proposed here is of a more integrative nature than existing models. It integrates previous
work (e.g. Gartner, 1985; Bird, 1988; Herron & Sapienza, 1992) with theoretical prop-
ositions from other disciplines (Porter & Lawler, 1968; Adams, 1965) and it also
integrates various stages of entrepreneurship to present a more complete understanding
of the entire process.

DISCUSSION AND RECOMMENDATIONS

Discussion of the concept of entrepreneurial motivation is rare in the literature,
except for the purpose of discussing why people start new firms. This paper proposes
that entrepreneurs are motivated to accomplish the goals that they set for themselves and
their firms and will define their entrepreneurial experience as effective to the extent of
the accomplishment of a goal or set of goals. Following the Porter and Lawler (1968)
theory, entrepreneurs will be motivated to continue to behave entrepreneurially as long
as they view that behavior as instrumental in leading to goal accomplishment, i.e. as
long as they view that behavior as being effective, or as long as they see entrepreneurship
as the altemative with the highest expected outcome.
Numerous studies have addressed firm performance (see Hofer & Sandberg, 1987

38 ENTREPRENEURSHIP THEORY and PRACTICE

 for a review of the literature on small firm performance) and models by Cragg and King
(1988) and Keats and Bracker (1988) attempt to describe those factors that influence firm
performance. Performance is often discussed in the context of financial or marketing
outcomes. However, entrepreneurial motivation and sustained entrepreneurship are
viewed as much broader and more important concepts, with different meanings to
different entrepreneurs. While firm performance may influence an entrepreneur's mo-
tivation, it is hypothesized to be only part of the picture.
If sustaining entrepreneurship is the goal of firm owners and entrepreneurs are
motivated to pursue goal accomplishment, how can the motivation to sustain entrepre-
neurial behavior be measured? This type of construct can only be measured on an
individual basis, in a manner similar to expectancy theory, taking into consideration the
specific goals of the entrepreneur. While certain portions of society may evaluate a
business as effective/ineffective based upon the firm's solvency, the only opinion or
judgment that really counts is that of the entrepreneur. In the eyes of the owner,
successful entrepreneurship takes place when the goals of the owner are equaled or
exceeded by the accomplishments of the firm. Therefore, it is contended that an owner
will be motivated to continue to operate the firm as long as he or she believes that the
goals are being sufficiently fulfilled and other more viable opportunities do not exist.
This does not mean that small firm performance need no longer be an issue of
research. Performance will always be linked to successful entrepreneurship because at
least some of an entrepreneur's goals will be performance-oriented. Thus, the search for
the determinants of performance and resulting models is important. However, it is the
contention of this paper that researchers should be aware that many owners will be
looking beyond traditional measures of performance when they evaluate the effective-
ness of their firms.
Several research propositions emerge from this model. Researchers are urged to
develop specific hypotheses for testing across a wide variety of samples. Suggested
hypotheses could include:
HI: Entrepreneurs enter new venture creation with a goal set relevant to them
personally. This goal set includes but is not limited to performance-oriented
goals.
H2: Actual and perceived outcomes of the firm are compared with the expectations
or goals set by the owner.
H3: Future entrepreneurial behavior is based on the result of the perceived outcomes
as compared to expectations. When expectations are met or exceeded the owner
is motivated to continue to pursue entrepreneurial behavior. When perceived or
actual outcomes fail to meet expectations, motivation to behave entrepreneur-
ially is diminished.
H4: Entrepreneurial expectations will change over time.
H5: Entrepreneurs will defme their expectations in broader terms than the current
traditional performance measures.

SUMMARY
The model presented in this paper integrates current conceptualizations concerning
the new venture creation process with models that have focused on determinants of small
firm performance. Both issues are important in and of themselves, however this paper
proposes a concem for both elements. As new ventures are created entrepreneurs should
be keeping an eye toward the future and developing them with effectiveness in mind. An
understanding of an entrepreneur's goals for business ownership is seen as important for
both researchers and owners.

Spring. 1994 39
 It is further suggested in this paper that researchers focusing on performance as an
end in and of itself will not understand the full depth of the entrepreneurial experience
for business owners. Thus, the concept of entrepreneurial motivation was introduced to
extend current thinking in the field.
This model needs to be tested, as it makes several propositions that will extend our
knowledge of the small firm ownership experience. Researchers are encouraged to
develop hypotheses and methodologies to test the various components of the model.

REFERENCES
Adams. J. S. (1965). Injustice in social exchange. In L. Berkowitz (Ed.), Advances in experimental social
psychology, vol. 2. New York: Academic Press.

Aldrich, H., & Zimmer, C. (1986). Entrepreneurship through social networks. In D. L. Sexton & R. W.
Smilor (Eds.), The art and science of entrepreneurship. pp. 3-23. Cambridge, MA: Ballinger.

Anderson, K. (1992). The purpose at the heart of management. Harvard Business Review, May-June.
52-62.

Bird, B. (1988). Implementing entrepreneurial ideas: The case for intention. Academy of Management
Review. /J(3). 442-453.

Brockhaus, R. H. (1982). The psychology of the entrepreneur. In C. Kent, D. Sexton. & K. H. Vesper
(Eds.), Encyclopedia of entrepreneurship. pp. 39-57. Englewood Cliffs, NJ: Prentice Hall.

Brockhaus, R. H.. Jr.. & Horwitz, P. S. (1986). The psychology of the entrepreneur. In D. L. Sexton &
R. W. Smilor (Eds.), The art and .science of entrepreneurship. pp. 25-48. Cambridge. MA: Ballinger.

Carland, J. W., Hoy, F.. Boulton. W. R., & Carland, J. (1984). Differentiating entrepreneurs from small
business owners: A conceptualizatio" Academy of Management Review, 9, 354-359.

Carland, J. W., Hoy, F.. & Carland, J. (1988). Who is an entrepreneur? is a question worth asking.
American Journal of Small Business, /2{4). 33-40.

Carsrud, A. L , & Johnson, R. W. (1987). Entrepreneurship: A social psychological perspective. Paper

presented at the 1st Annual Gateway Series of Entrepreneurial Research, St. Louis, Missouri.

Carsrud, A. L., Gaglio, C. M., & Olm, K. W. (1987). Entrepreneurs mentors, networks, and successful
venture development: An exploratory study. Entrepreneurship Theory and Practice. 12(2), 13-18.

Churchill, N. C. (1992). Research issues in entrepreneurship. In D. L. Sexton & J. D. Kasarda (Eds.), The
state of the art of entrepreneurship, pp. 579-590. Boston. MA: PWS-Kent Publishing.

Churchill, N. C . & Lewis, V. L. (1983). The five stages of small business growth. Harvard Business
Review. May-June. 30-50.

Cooper, A. C , & Dunkelberg. W. C. (1987). Entrepreneurial research: Old questions, new answers, and
methodological issues. American Journal of Small Business. 11(3), 11-23.

Cragg. P. B., & King, M. (1988). Organizational characteristics and small firms' perfonnance revisited.
Entrepreneurship Theory and Practice. 13(2), 49-64.

Endler, N. S. (1983). Interactionism: A personality model but not yet a theory. In M. M. Page & R.
Dienstbier (Eds.), Symposium on motivation, pp. 155-200. Lincoln: University of Nebraska Press.

Fombrun. C. J., & Wally. S. (1989). Structuring small firms for rapid growth. Journal of Business
Venturing, March, 123-133.

40 ENTREPRENEURSHIP THEORY a n d PRACTICE

Fry, F. L. (1987). The role of incubators in small business planning. American Journal of Small Business,
12(\). 11-26.

Gartner. W. B. (1985). A conceptual framework for describing the phenomenon of new venture creation.
Academy of Management Review, October, 696-706.

Gartner. W. B. (1988). Who is an entrepreneur? is the wrong question. American Journal of Small Busi-
ness. 72(4), 11-32.

Gartner. W. B. (1989). Some suggestions for research on entrepreneurial traits and characteristics. Entre-
preneurship Theory and Practice. 14(\), 27-38.

Gartner. W. B., Bird, B, J., & Starr, J. A. (1992). Acting as if: Differentiating entrepreneurial from
organizational behavior. Entrepreneurship Theory and Practice. 16(3), 13-31.

Greenberger. D. B., & Sexton, D. L. (1988). An interactive model of new venture creation. Journal of
Small Business Management, 26(3), 107.

Herron, L.. & Sapienza. H. J. (1992). The entrepreneur and the initiation of new venture launch activities.
Entrepreneurship Theory and Practice, /7(l), 49-55.

Hobson, E. L.. & Morrison, R. M. (1983). How do corporate start-up ventures fare? In J. A. Homaday,
J. A. Timmons, & K. H. Vesper (Eds.), Frontiers of entrepreneurship research. Wellesley, MA: Babson
College.

Hofer. C. W.. & Charan, R. (1984). The transition to professional management: Mission impossible?
American Journal of Small Business, Summer. 3.

Hofer, C. W., & Sandberg, W. R. (1987). Improving new venture perfomiance: Some guidelines for
success. American Journal of Smalt Business, Summer, 11-25.

Hornaday, J. A. (1982). Research about living entrepreneurs, ln C. A, Kent, D. L. Sexton, & K. H.

Vesper (Eds.), Encyclopedia of entrepreneur,ship. pp. 20-35, Englewood Cliffs, NJ: Prentice Hall.

Johnson, B. R. (1990). Toward a multidimensional model of entrepreneurship: The case of achievement

motivation and the entrepreneur. Entrepreneurship Theory and Practice. 14(3), 39-54.

Katz, J.. & Gartner. W. B. (1988). Properties of emerging organizations. Academy of Management Review,
/J(3), 429-441.

Keats. B. W.. & Bracker, J. S. (1988). Toward a theory of small firm performance: A conceptual model.
Entrepreneurship Theory and Practice. 12(4), 41-58.

Knight, R. M. (1987). Can business schools produce entrepreneurs? ln N. C. Churchill, J. A. Homaday,

B. A. Kirchhoff, O. J. Krasner, & K. H. Vesper (Eds.), Frontiers of entrepreneurship research, pp.
603-604. Wellesley. MA: Babson College.

Kuhn, R. L. (1982). Mid-sized firms: Success strategy and methodology. New York: Praeger.

Kuratko. D. F. (1988). Managing entrepreneurial growth. Entrepreneurship Development Review, Winter,

1-6.

Leamed. K. E. (1992). What happened before the organization? A model of orgatiization formation.
Entrepreneurship Theory and Practice, 17(1), 39-48.

Martin. M. J. C. (1984). Managing technological innovation and entrepreneurship. Reston, VA: Reston
Publishing.

Mitton, D. G. (1989). The compleat entrepreneur. Entrepreneurship Theory and Practice, 13(3), 9-19.

Montanari, J. R., Domicone, H. A., Oldenkamp. R. L., & Palich, L. E. (1990). The examination of a

Spring, 1994 41
development model for empirical firms: An empirical test. In L. R. Jauch & J. L. Wall (Eds.), Best paper
proceedings. 50th annual meeting of the Academy of Management. San Francisco, pp. 59-63.

Neider, L. (1987). A preliminary investigation of female entrepreneurs in Florida. yourna/o/5ma//Busmess

Management, 25(3), 22-29.

Osbome. R. L. (1987), Planning: The entrepreneurial ego at work. Business Horizons, January-February.
20-24.

Olson. P. D. (1985). Entrepreneurship: Process and abilities. American Journal of Small Business. IO(\),
25-31.

Porter. L, W.. & Lawler, E. E. (1968). Managerial attitudes and performance. Chicago: Irwin.

Reynolds. P. (1992). Predicting new firm births: Interactions of organizational and human populations. In
D. L. Sexton & J. D. Kasarda (Eds.). The state of the art of entrepreneurship. pp. 268-297, Boston:
PWS-Kcnt Publishing.

Ronstadt. R. C. (1984), Entrepreneurship. Dover, MA: Lord Publishing,

Ronstadt. R, C. (1985). The educated entrepreneurs: A new era of entrepreneurial education is beginning.
American Journal of Smalt Business. 70(1), 7-23.

Sandberg, W . R . (1986), New venture performance: The role of strategy and industry structure. Lexington.
MA: Lexington Books.

Scott, M.. & Bruce, R, (1987). Five stages of growth in small business. Long Range Planning, 20(3),
45^52.

Sexton, D. L.. & Bowman. N, B. (1986). Validation of a personality index: Comparative psychological
characteristics analysis of female entrepreneurs, managers, and entrepreneurship students and business
students. In R. Ronstadt, J. A. Homaday. R. Peterson, & K. H. Vesper (Eds.). Frontiers of entrepreneur-
.ship research, pp. 40-51. Wellesley. MA: Babson College.

Shapero, A. (1984). The entrepreneurial event. InC. A, Kent (Ed.). Environment for entrepreneurship. pp,
21-40. Lexington, MA: D.C, Heath,

Shaver, K, G,, & Scott, L, R, (1991), Person, process, choice: The psychology of new venture creation.
Entrepreneurship Theory and Practice, 16(2), 23-45.

Smeltzer. L. R,. & Fann, G. L. (1989). Gender differences in extemal networks of small business owner/
managers. Journal of Smalt Busine.ss Management. 27(2), 25-32.

Stevenson, H. H., & Gumpert, D. E. (1985). The heart of entrepreneurship. Harvard Business Review.
March-April, 85.

Douglas W, Naffziger is Assistant Professor and Director of the Small Business Institute at Ball State
University.

Jeffrey S. Homsby is Associate Professor and Director of the Human Resources Program at Ball State
University.

Donald F, Kuratko is The Stoops Distinguished Professor of Business at Ball State University.

A version of this paper was selected "Best Conceptual Paper" at the 1992 U.S. Association for Small
Business and Entrepreneurship National Conference.

42 ENTREPRENEURSHIP THEORY a n d PRACTICE