1. education

Volume 25, No. 2
Spring 2014
Editorial Staff
Managing Editor
William T. Jackson
Editor
Mary Jo Jackson
Associate Editor
Daniel James Scott
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Table of Contents
Volume 25, No.2
Spring 2014
Does an Entrepreneurship Education Have Lasting Value? A Study of Careers of
3,775 Alumni
Julian Lange, Edward Marram, Ajay Solai Jawahar, Wei Yong, and William Bygrave ...... 1
A Look at the Corporate Entrepreneurship-Employee Commitment Relationship
Through the HR Architecture
Josh Bendickson and Eric Liguori .................................................................................... 33
How Instrumental and Emotional Support From Family Differs Between Vocational
Decisions to Become Self-Employed or Employed
Kim Klyver, Mark T. Schenkel, Mette Søgaard Nielsen, and Thomas Schøtt .................. 53
The Role of National Culture in the Transnational Entrepreneurship Process
A. Banu Goktan and Isaura B.Flores ................................................................................ 75
Social Represntations of Entrepreneurship
Joshua Maurer, Benjamin McLarty, Josh Bendickson, and Eric Liguori ......................... 97
--- Entrepreneurial Case --Mission, Ministry, & Margin: The Case of Restore Ministries and the YMCA
Grady S. York, Mark T. Schenkel, and Keith M. Smith ................................................... 133
--- Entrepreneur’s Perspective --Understanding Community Entrepreneurship Building: A Two-Year Reflection on
Tampa Bay 6/20
Brent Britton, William Jackson, John Morrow,
Marvin Scaff, Daniel James Scott and Rebecca White ...................................................... 169
----Advisory Board---Journal of Business and Entrepreneurship
Don B. Bradley III, University of Central Arkansas
Leslie Toombs, University of Texas of the Permian Basin
Martin Bressler, Houston Baptist University
Chyi-lyi (Kathleen) Liang, University of Vermont
William T. Jackson, University of South Florida St. Petersburg
----2013-2014 Officers---Association for Small Business & Entrepreneurship
Laurie Babin
President
Eugenie Goodwin
President Elect
Henry Cole
Vice President Programs
Daniel James Scott
Vice President Membership
Leslie Toombs
Secretary/Treasurer
Daniel Glaser-Segura
Immediate Past President
William T. Jackson
Executive Director
Dear JBE Readership:
Welcome to the spring 2014 issue of the Journal of Business and
Entrepreneurship. We are truly excited about the ever increasing quality of
submissions. We hope that you will enjoy the diverse topics being addressed
in this issue.
We wanted to take the opportunity to also announce two special issues that
will be published over the next several months. The first consists of the best
articles submitted to the Entrepreneurship Project (EEP) Conference held at
the University of Tampa this spring. The second (and we are so proud to
have this opportunity) will be the best articles presented at the
International Council of Small Business Conference in Dublin, Ireland. All
current subscribers will automatically receive both special issues. If you are
not currently a subscriber, please join the Association for Small Business
and Entrepreneurship www.asbe.us.
I would also like to encourage every subscriber to contact their university
library and ensure that they have a subscription for the journal.
William T. Jackson (Bill)
Managing Editor
Mary Jo Jackson
Editor
Daniel James Scott
Associate Editor
----Editorial Review Board---Joshua Abor
Paul Dunn
University of Stellenbosch
University of Louisiana ~ Monroe
Joe Ballenger
João J. M. Ferreira
Stephen F. Austin State University
University of Beira Interior
Jurgita Baltrusaityte-Axelson
Charles Fischer
Stockholm School of Economics
Pittsburg State University
Stephen S. Batory
Donald W. Garland
Bloomsburg University
New Mexico State University
James A. Bell
William C. Green
University of Central Arkansas
Sul Ross State University
Thomas M. Box
Walter E. Greene
Pittsburg State University
Greene and Associates
Susan Boyd
Marko Grünhagen
University of Tulsa
Eastern Illinois University
Steve Brown
Robert D. Gulbro
Eastern Kentucky University
Athens State University
Kent Byus
Stephen C. Harper
Texas A&M ~ Corpus Christi
University of North Carolina ~ Wilmington
Thomas M. Cooney
E. Alan Hartman
Dublin Institute of Technology
University of Wisconsin ~ Oshkosh
James A. DiGabriele
Marilyn M. Helms
DiGabriele, McNulty & Co. LL
Dalton State College
Colin Jones
Mark T. Schenkel
University of Tasmania
Belmont University
Minjoon Jun
Philip Siegel
New Mexico State University
Florida Atlantic University
M. Riaz Khan
Joseph F. Singer
University Massachusetts Lowell
University of Missouri Kansas City
Naresh Kumar
Harriet Stephenson
NESH Training and Consultancy
Seattle University
Vaidotas Lukosius
Tulus Tambunan
Tennessee State University
University of Trisakti
Keishiro Matsumoto
Leslie Toombs
University of the Virgin Islands
Texas A & M Commerce
Shaun McQuitty
Raydel Tullous
Athabasca University
University of Texas ~ San Antonio
Teresa V. Menzies
Jude Valdez
Brock University
University of Texas ~ San Antonio
Jay Nathan
Rebecca J. White
St. John’s University
University of Tampa
Barbara R. Oates
Densil Williams
Texas A&M ~ Kingsville
University of West Indies Mona
Linda Ann Riley
Phillip H. Wilson
Roger Williams University
Midwestern State University
Christopher M. Scalzo
Marilyn Young
Morrisville State College
University of Texas ~ Tyler
DOES AN ENTREPRENEURSHIP EDUCATION HAVE
LASTING VALUE? A STUDY OF CAREERS OF 3,775
ALUMNI
Julian Lange
Babson College
Ajay Solai Jawahar
Babson College
Edward Marram
Babson College
Wei Yong
Babson College
William Bygrave
Babson College
ABSTRACT
We studied the influence of entrepreneurship education on intentions to become
entrepreneurs and becoming full-time entrepreneurs with a sample of 3,775
Babson College alumni who graduated from 1985 to 2009. There was
overwhelming evidence that taking two or more core entrepreneurship elective
courses positively influenced the intention to become an entrepreneur and
becoming an actual entrepreneur both at the time of graduation and long
afterward. Writing a student business plan also had a significant influence, but
it is not as strong as taking two or more core courses.
INTRODUCTION
Does entrepreneurship education increase undergraduate and MBA
students’ intentions to be entrepreneurs? Do those intentions actually lead to the
founding of new ventures? And if so, do those ventures outperform ones started
by entrepreneurs without formal entrepreneurship education? This paper deals
with the first two issues: the influence of entrepreneurship education on
entrepreneurial intentions and on actually becoming an entrepreneur; a second
paper (Lange et al., 2012) deals with the effect of entrepreneurship education on
performance when starting up and operating a business. To answer these
questions we surveyed 3,775 alumni who graduated from Babson College during
a 25-year period, 1985-2009; 63% had taken one or more of three core
entrepreneurship courses and 37% had taken none.
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For a topic as important as this one, there are comparatively few prior
articles on the effect of entrepreneurship education. And those few are flawed by
one or more methodological shortcomings such as small sample size, lack of a
control group, sample bias, mingling part-time and full-time entrepreneurs,
merging elective courses with compulsory ones, and an extremely short time
span; all of which are addressed in our study. We believe that our results provide
new insights about the value of entrepreneurship courses in higher education.
Our findings are important not only for students and educators, but also for those
who support entrepreneurship education, including policy makers, foundations,
and benefactors.
Our paper makes the following contributions to entrepreneurship
research. It is an extensive, longitudinal study of the effect of entrepreneurship
education on the entrepreneurial intentions and realizations of a large sample of
alumni from a business school; it examines the effect of taking one, two, or three
or more core entrepreneurship elective courses; and it examines the effect of
writing a student business plan. In so doing, it addresses the pleas of policy
makers and others for more studies of the outcomes of an entrepreneurship
education.
LITERATURE SURVEY
When the teaching of entrepreneurship in higher education was beginning
to gain traction in the mid-1980s, Peter Drucker (1985)—one of the legendary
management philosophers of all time—wrote, “The entrepreneurial mystique?
It’s not magic, it’s not mysterious, and it has nothing to do with genes. It’s a
discipline. And like any discipline, it can be learned.” And if it can be learned,
it presumably can be taught. Twenty years later when entrepreneurship was
being taught at more than 1600 U.S. colleges and universities, Drucker’s
assertion was cited by Kuratko (2005) when he wrote, “It’s becoming clear that
entrepreneurship, or certain aspects of it, can [emphasis in the original] be
taught. Business educators and professionals have evolved beyond the myth that
entrepreneurs are born, not made.” Alas, Drucker offered no empirical evidence
to support his assertion.
Contrary to Drucker’s rejection of genetics in the making of an
entrepreneur, Nicolaou and Shane (2009) recently used elementary molecular
genetics to argue that a person’s entrepreneurial predisposition is determined at
conception by parental DNA; but they offered no direct empirical evidence to
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support their genetic theory. They suggest, however, that environmental factors
may also be important determinants of whether a fetus grows up to be an
entrepreneur; and one of their factors is education. So if Nicolaou and Shane’s
concept turns out to be true, entrepreneurs are born and can be made even better
by educators such as Kuratko (2003) who confidently declared, “The question of
whether entrepreneurship can be taught is obsolete.”
But surely the important question is not whether entrepreneurship can be
taught; rather it is whether such teaching produces entrepreneurs, and if so, are
they better entrepreneurs? Business schools are professional schools just as law
schools, medical schools, and engineering schools are and should be measured
by the success of the careers of their graduates. In the next section we will
summarize empirical evidence on whether or not entrepreneurship education is
effective.
Empirical Studies
Rather than citing and summarizing specific articles on the evaluation of
entrepreneurship education, we will look at comprehensive reviews of such
articles.
Gorman, Hanlon, and King, in a 1997 review of articles about teaching
entrepreneurship stated, “Not surprisingly most of the empirical studies surveyed
indicated that entrepreneurship can be taught, or at least encouraged, by
entrepreneurship education.” But Gorman et al. (1997) had considerable
reservations about the quality of the research evaluating the effectiveness of
entrepreneurship courses. Their misgivings included the following: some
samples were biased because students were not screened for their entrepreneurial
predisposition before enrolling in a course of entrepreneurship instruction; most
studies were cross-sectional; measurement of key variables was based largely on
self-reporting; few research designs incorporated both pre- and post-testing; and
almost none had an underlying conceptual framework from which hypotheses
were derived. Gorman et al. (1997) also found that descriptive statistics for
samples were often inadequate, and in some cases, it was impossible to
determine whether the course was delivered to undergraduate, MBA, or
continuing education students.
Ten years after Gorman et al. (1997) published their review, Pittaway and
Cope (2007) produced a systematic literature review (SLR)i of entrepreneurship
education articles. Pittaway and Cope “used entrepreneurship journal rankings to
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identify key journals in the field: in rank one there were four journals, in rank
two there were 10 journals, in rank three there were 47 journals. The citation
indexes of all 61 journals from 1980-2004 were systematically searched using
the root term ‘education’.” Then they extended their search to include articles in
other journals that had been cited in articles in all the rank one entrepreneurship
journals (Journal of Business Venturing, Entrepreneurship Theory and Practice,
Small Business Economics, Entrepreneurship and Regional Development) and
three of the rank two entrepreneurship journals (Journal of Small Business
Management, International Small Business Journal, and Enterprise and
Innovation Management Studies). Impact criteria were used to rank articles for
quality; also they were reviewed according to thematic focus and impact level.
The findings of their systematic literature review indicated that entrepreneurship
education had an impact on student propensity and intentionality; but what
remained unclear was the extent of its impact on graduate entrepreneurship
activity and whether or not it makes graduates more effective entrepreneurs.
They concluded that the careers of entrepreneurship education graduates should
be examined longitudinally and in more detail. They concurred with the
National Council for Graduate Entrepreneurship, NCGE, (2004) report, which
advocated research into the performance of entrepreneurship education graduates
in action as actual entrepreneurs.
Research papers released after the above reviews were made have not
unequivocally resolved whether or not entrepreneurship education is worthwhile.
Zhao, Siebert, and Hills (2005) investigated the role of self-efficacy on the
entrepreneurial intentions of 265 MBA students at five universities. They found
that the effect of formal learning in entrepreneurship-related courses was
positively related to self-efficacy, which in turn was positively related to
entrepreneurial intentions.
Weber, von Graevenitz, and Harhoff (2009) analyzed the effects of a
compulsory entrepreneurship course on 189 business students at a German
university. They found that students’ entrepreneurship propensity declined
somewhat despite good evaluations of the class; they concluded, however, that
the course was useful because it allowed students to assess whether
entrepreneurship was a suitable career for them. Their study makes an important
contribution because the course was compulsory for all students regardless of
their prior inclination toward or against a career as an entrepreneur. Thus it
avoided a major—sometimes fatal—flaw, which is the self-selection bias
inherent in most previous investigations of students who voluntarily enrolled in
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elective entrepreneurship courses, and who almost certainly chose the courses
because they had entrepreneurial inclinations beforehand. Without a control
group, the findings about self-selected students’ post-course entrepreneurial
intentions have dubious validity.
Souitaris, Zerbinati, and Al-Laham (2007) did, however, include a control
group when they studied the entrepreneurial intentions of 124 engineering and
science students who took compulsory or elective entrepreneurship modules at
London and Grenoble Universities over a five-month period and compared them
with the intentions of 126 cohorts who did not take the modules. They
concluded that the modules raised entrepreneurial attitudes and intention, but that
intention did not result in more nascent ventures—perhaps because of a time lag
from latent intention to nascent action. Interestingly, Souitaris et al. (2007)
reported that “inspiration (and not learning or resource-utilisation) was the
programme's benefit related to the increase of subjective norm and intention
towards self-employment. The implication for programme developers is that
whereas knowledge and resources might increase the likelihood of success for
those who are going to start a new venture, it is the inspiration that raises
attitudes and intention and increases the chances that students will actually
attempt an entrepreneurial career at some point in their lives.”
Oosterbeek, Praag, and Ijsselstein (2008) also included a control group in
their study of the impact of a compulsory entrepreneurship education course in
the Netherlands and found that it did not improve student’s self-assessed
entrepreneurial skills and actually decreased their entrepreneurial intentions.
Although Pittaway et al. (2003) included Peterman and Kennedy’s (2003) work
in their review of empirical articles on the effectiveness of entrepreneurship
programs, it deserves to be singled out because it too included a pre-test and
post-test control group. Peterman and Kennedy (2007) found that a sample of
112 Australian secondary school students completing an enterprise education
program reported significantly higher perceptions of both desirability and
feasibility of starting a business when compared with a control group of 112
cohorts.
As might be expected from the inconsistent and sometimes questionable
results of empirical studies, not all observers of entrepreneurship education are
convinced of its effectiveness. Cox, Mueller, and Moss (2002) wrote that much
of the empirical research has failed to verify that entrepreneurship and small
business management courses make students more likely to start a business.
They pointed out that it is difficult to confirm that entrepreneurship education
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enhances the founding of new businesses with “snapshot” cross-sectional
research methods. In similar vein, Matlay (2006) stressed the need for
longitudinal studies to investigate entrepreneurial activity of graduates. He
acknowledged that such studies are time consuming and expensive; but without
them policy makers will be left wondering whether their support for
entrepreneurship education is justified by the results.
In summary, empirical evidence tends to confirm that entrepreneurial
intentions can be positively influenced in the short term by entrepreneurship
courses; but there remains considerable doubt about whether there is any longterm effect. And what remains in total doubt for want of credible evidence is
whether those latent intentions turn into nascent activity followed by the
subsequent launching of new ventures. More than a quarter of century after he
made it, Drucker’s (1985) assertion has yet to be confirmed by valid and reliable
research.
Practitioners’ Opinion
Notwithstanding the frailty of the scholarly evidence demonstrating
whether or not entrepreneurship can be taught, plenty of entrepreneurs, including
many who have graduated from entrepreneurship programs, strongly believe that
aspects of entrepreneurship can be taught. Evidence of this can be found in the
abundance of teaching cases that feature graduates of such undergraduate and
MBA programs.
Gordon Moore is the legendary entrepreneur who was at the birth of
Silicon Valley as one of the first employees of Shockley Semiconductor, which
he left to co-found Fairchild Semiconductor, which in turn he left to co-found
Intel. He regrets that he did not have an opportunity to study entrepreneurship
when he was an undergraduate at Caltech. Listen to what he said as he reflected
on his long entrepreneurial career (Moore 1994):
“Like many other scientists and engineers who have ended up founding
companies, I didn’t leave Caltech as an entrepreneur. I had no training in
business; after my sophomore year of college, I didn’t take any courses outside
chemistry, math, and physics. My career as an entrepreneur happened quite by
accident. There is such a thing as a natural-born entrepreneur… But the
accidental entrepreneur like me has to fall into the opportunity or be pushed into
it. Most of what I learned as an entrepreneur was by trial and error, but I think a
lot of this really could have been learned more efficiently.”ii
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Encapsulated in Moore’s comment are some of the key concepts, such as
entrepreneurial intentions, self-efficacy, career planning, and genetics that are in
current theories of entrepreneurship education, which we will review in the next
section.
Theory Literature
In the last fifty years or thereabouts, theoreticians have incorporated
psychological concepts to explain entrepreneurial behavior. Initially they used
situational and personality measures most notably the need for achievement
(McClelland, 1961) and then the need for internal control (Brockhaus, 1982), but
they did not make much headway in predicting entrepreneurial activity until they
turned to self-efficacy, intention, and the theory of planned behavior (Krueger,
Reilly, and Carsrud, 2000).
When applied specifically to entrepreneurship education those concepts
predict that courses in entrepreneurship improve students’ self-efficacy, which
influences students’ career plans and increases their intention to be
entrepreneurs; or sometimes they learn that they are not suited for a career as an
entrepreneur and their intentions decrease. That is possibly why some empirical
researchers found that elective entrepreneurship courses had a positive effect of
students’ intentions, whereas others found that compulsory entrepreneurship
courses had a negative effect. Elective courses attract mainly students with
prior-inclination to become entrepreneurs, while compulsory courses must be
taken by all students regardless of their prior-inclination toward or against
entrepreneurship.
According to Krueger et al. (2000) intention models are ideal for
explaining entrepreneurial behavior because in psychology literature intention is
the best predictor of planned behavior, especially when the behavior is rare, hard
to observe, and has unpredictable time lags; which some entrepreneurship
theoreticians regard as an apt description of the process of becoming an
entrepreneur (e.g., Bird, 1988; Katz and Gartner, 1988; Krueger and Brazeal,
1994).
Intention-based theories of entrepreneurial behavior hinge on the belief
that the decision to take up a career as an entrepreneur is planned behavior,
which most academic researchers seem to take as a given or at least a reasonable
assumption (e.g., Davidsson, 1995; Autio, Keeley, Klofsten, and Ulfstedt, 1997;
Kolvereid, 1996; Krueger et al., 2000). Krueger at al., (2000) put it this way,
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“Although it is possible that some will argue otherwise, it seems evident that
much of what we consider ‘entrepreneurial’ activity is intentionally planned
behavior. Witness the tremendous emphasis on the business plan in virtually
every academic and practical treatment on starting a new business. Even in cases
where a unique catalyzing event like being downsized may spur the individual to
the entrepreneurial act, there are often indications of a long time interest and
desire to be in business for one’s self.”
Intention-based theories of entrepreneurship initially focused on an
individual’s nascent behavior before actually becoming a entrepreneur (e.g.,
Boyd and Vozikis, 1994; Krueger, 1993; 1994; Krueger and Brazael, 1994;
Matthews and Moser, 1995; Reynolds, 1995; Scherer, Brodzinsky and Wiebe,
1991; Scherer et al, 1989; Scott and Twomey, 1988). Then intention models
were extended to include the decision to become an entrepreneur as a career
choice (Krueger and Carsrud, 1993; Krueger, et al., 2000; Fayolle, Gailly, and
Lassas-Clerc, 2006) because there is a strong link between intention and actual
behavior (Ajzen, 1991; Ajzen, and Fishbein, 2000; Sheppard, Hartwick and
Warshaw, 1988).
The theory of planned behavior underpins several recent articles dealing
with the evaluation of the influence of entrepreneurship education on students’
entrepreneurial intentions (e.g.., Zhao, H., Seibert, S. E., and Hills, G. E.; 2005;
Fayolle, Gailly, and Lassas-Clerc, 2006; Wilson, Kickul, and Marlino; 2007).
We will rely on those articles in the next section as we develop a conceptual
framework and derive hypotheses.
THEORY
The object of this section is not to develop a general theory to explain
why individuals become entrepreneurs; instead it is to develop a special
conceptual framework to predict the effect of entrepreneurship education on
undergraduate and MBA students’ entrepreneurial intentions and their putting
those intentions into action and becoming entrepreneurs.
Conceptual Framework
Nicolaou and Shane (2009) posit that individuals are born with innate
entrepreneurial characteristics—some with more than others. Then as a child
develops, socialization and education enhance or inhibit those genetic
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endowments. Most socialization in childhood is parental. Van der Sluis, Praag
and Vijverberg (2008) state that according to common wisdom children with a
father who is self-employed are more likely to become entrepreneurs. Parents
who are entrepreneurs provide their children with day-to-day contact with the
world of business and they pick up entrepreneurial awareness (e.g., Aldrich,
Renzulli, and Langton, 1998; Dunn and Holtz-Eakin, 2000; Hout and Rosen,
2000). According to Fairlie and Robb (2007), adolescent work experience in the
family business is a major influence on entrepreneurial aspirations. And Lentz
and Laband (1990) suggest that in some instances the child develops the knowhow to run a business. Other socialization that may enhance an adolescent’s
proclivity for entrepreneurship is working for a small business, or actually
starting a small one while still in high school because prior self-employment
experience increases the probability of becoming an entrepreneur (Sluis, Pragg
and Vijverberg, 2008).
Falck, Heblich, and Luedemann (2010) found that having an
entrepreneurial peer group had a positive effect on the entrepreneurial intentions
of 15 year-olds but it was moderated by individualism. On the other hand,
Lerner and Malmendier (2007) in a study of a sample of Harvard Business
School students found that exposure to a higher share of peers with a prebusiness-school entrepreneurial background led to lower rates of
entrepreneurship. Part of the explanation of the difference between the two
findings is that peer group influence diminishes with age (Falck et al. 2010). We
did not specifically include peer influences as a separate variable in the models
that we tested, but we recognize that it was covertly included in other variables
such as whether or not a student wrote a business plan and whether or not an
alumnus worked in a small business (both will be explicated later in this section).
Students with entrepreneurial intentions who are contemplating a
future career as an entrepreneur may select a college or a university because of
the reputation of its entrepreneurship program so that they can increase their selfefficacy. The research reported in this paper evaluated the effect of core courses
in a prominent entrepreneurship education program.iii The courses are designed
to increase students’ self-efficacy and increase their entrepreneurial intentions;
however, they also provide students with the opportunity for self-evaluation, so
in some cases students’ intentions decline if their self-judgment tells them that
they do not measure up for a career as an entrepreneur.
According to Bandura (1986) an individual’s self-efficacy can be
influenced by role modeling and vicarious experience, enactive mastery, social
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persuasion, and judgments about one’s self (Zhao et al., 2005). The core courses
that we evaluated employ a variety of teaching methods encompassing Bandura’s
four components. The principal classroom pedagogy uses the case method with
plenty of class visits by entrepreneurs, many of whom are featured in the cases;
thereby it enables students to look vicariously at entrepreneurship. Other
vicarious opportunities include students’ interviewing entrepreneurs one-on-one
and writing an analysis of what they learned; examining issues in small
businesses and recommending solutions; and working on consulting projects.
Developing a business plan and in some instances starting an actual business
develops enactive mastery; likewise computer simulation of managing growing
businesses, field studies, and consulting. Social persuasion is provided by
mentors and advisors, who usually are practicing entrepreneurs, angel investors,
and others involved with entrepreneurship and small business; and it is also
provided by fellow students, alumni, administrators, and very importantly by
faculty, of whom 50% are present or former entrepreneurs. Throughout the
courses students continually have opportunities to judge their ability to handle
the stress, anxiety, and ambiguity that comes with starting and growing a
business or in some instances failing.
The core courses are holistic and comprise topics dealing with multiple
components of self-efficacy; perhaps the best example is the business plan.
Many entrepreneurship educators believe that writing a business plan affects
self-efficacy more than any other entrepreneurship pedagogy because it puts into
practice what students have learned in business school, especially in
entrepreneurship courses; students receive feedback on their plans from faculty,
peers, and others; and they usually write their plans with one, two, or three
fellow students, so in the process they get opportunities to compare their
entrepreneurial skills with those of their peers. Another aspect of a business plan
is creativity, which we believe is an important aspect of entrepreneurship. It is
not surprising that writing a business plan is the most frequently taught
entrepreneurship topic at most business schools (Hills, 1988; Honig, 2004).
Thus it is reasonable to propose that writing business plans as a student increases
entrepreneurial intentions and likelihood of actually starting a new business.
Other factors to be considered when evaluating entrepreneurial intention
are age and gender because numerous empirical studies show that both are
important factors in an individual’s propensity for entrepreneurship. For
example, the Global Entrepreneurship Monitor, GEM, which is the most
extensive worldwide study of nascent entrepreneurs, shows that nascent activity,
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which is the first step to put intention into action, peaks when would-be
entrepreneurs are in their early 30s and then steadily declines. GEM also
reported that in high income countries men are 33% more likely than women to
be active entrepreneurs (Minniti, Arenius, and Langowitz, 2005); and (Reynolds,
Carter, Gartner, Greene, and Cox, 2002) found that in the U.S. men are twice as
likely as women to be nascent entrepreneurs.
Some students with entrepreneurial intent start businesses before they
graduate and launch their careers as full-time entrepreneurs immediately after
graduation. While others with entrepreneurial intent begin their post-graduation
careers as employees, presumably delaying the decision to become an
entrepreneur until a future time. As they grow older, a number of factors affect
whether or not alumni actually leave their jobs as employees and start new
ventures; among those factors are opportunity costs, job dissatisfaction, and selfefficacy. Alumni who are earning good incomes and are satisfied with their jobs
are less likely to leave their employment than their counterparts who have low
incomes and are dissatisfied with their jobs. Another factor that may influence
employees is the effect of their work environment on their self-efficacy. It is
likely that entrepreneurial self-efficacy of alumni employed by small
businesses—especially if they are owner-managed—will increase more than that
of their cohorts in large companies because they will gain more skills relevant to
running a small business and will probably see more role models. Nanda and
Sørensen (2010), for example, investigated peer effects in the workplace and
found that having coworkers with entrepreneurial experiences increased an
individual’s likelihood of becoming an entrepreneur.
Undergraduates are younger than MBA students, so at the time of
graduation and for several years afterward they have lower opportunity costs for
becoming an entrepreneur compared with being an employee simply because
they are paid less than MBAs. Also, recent undergraduates generally have lower
personal living costs. What’s more they probably have less perceived career risk
because they are younger. Hence, although the core courses in the undergraduate
and MBA program are very similar, we differentiate bachelor’s degrees and
MBAs in our models.
We also differentiate part-time students from full-time students because
most part-time students, almost all of them MBAs, have full-time jobs, which we
reason might give some of them more entrepreneurial socialization and mastery,
hence increased self-efficacy. On the other hand Babson’s entrepreneurship
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efficacy; furthermore, full-time students get more socialization from their peers
and faculty members simply because they are with them on campus… what
else… full time.
HYPOTHESES
For those students who immediately embarked on careers as full-time
entrepreneurs upon graduation, we propose the following hypotheses:
H1a: Students who took one core entrepreneurship elective course were
more likely to become entrepreneurs immediately upon graduation than
students who took none.
H1b: The more core entrepreneurship elective courses that students took,
the more likely they were to become entrepreneurs immediately upon
graduation.
H1c: Students who wrote a business plan were more likely to be full-time
entrepreneurs immediately upon graduation than those who did not write
one.
For alumni who did not embark on entrepreneurial careers immediately
upon graduation, we propose the following hypotheses:
H2a: At graduation, students who took one core entrepreneurship
elective course were more likely to have intentions to become
entrepreneurs at some time in the future than students who took none.
H2b: At graduation, the more core entrepreneurship elective courses that
students took, the more likely they were to have intentions to be
entrepreneurs.
H2c: At graduation, students who wrote a student business plans were
more likely to have intentions to become entrepreneurs in the future than
students who did not.
12
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Journal of Business & Entrepreneurship
For alumni who became entrepreneurs at a future time instead of
immediately upon graduation, we propose the following hypotheses:
H3a: Alumni who took one core entrepreneurship elective course when
they were students were more likely to become entrepreneurs in the future
than alumni who took none.
H3b: The more core entrepreneurship elective courses that alumni took
when they were students, the more likely they were to become
entrepreneurs in the future.
H3c: Alumni who wrote a student business plans were more likely to
become entrepreneurs in the future than alumni who did not.
And finally, for alumni who were employees and had not yet embarked
on careers as entrepreneurs, we propose the following hypotheses:
H4a: Alumni were more likely to intend become entrepreneurs in the
future if they took one core entrepreneurship elective course when they
were students than those who took none.
H4b: The more core entrepreneurship elective courses that alumni took
when they were students, the more likely they were to intend to become
entrepreneurs in the future.
H4c: Alumni were more likely to intend become entrepreneurs in the
future if they wrote a student business plan than those who did not.
All hypotheses 1a through 4c are moderated by the following factors that
influence entrepreneurial intentions:



Whether or not a student started a full-time business before
enrolling at Babson College.
Whether or not one or both parents were entrepreneurs when a
student was growing up.
Whether the person was an undergraduate or MBA student.
Journal of Business & Entrepreneurship
Spring 2014
13

A student’s gender.
Hypotheses 4a, 4b, and 4c will also be moderated as follows:




Alumni who have higher income as employees are less likely to
intend to become entrepreneurs in the future.
Alumni who are dissatisfied with their jobs are more likely to
intend to become entrepreneurs in the future.
Entrepreneurial intentions to start a business will first increase
with age, reach a peak, and then decline as alumni grow older.
Alumni who are employed by small businesses are more likely to
intend to become entrepreneurs in the future.
The control variable is whether before enrolling at Babson a student
expected to be an entrepreneur in the future.
METHOD
Babson’s Core Entrepreneurship Courses
The core entrepreneurship courses at Babson College are
Entrepreneurship and New Ventures, Financing Entrepreneurial Ventures, and
Managing Growing Businesses. The original program was developed and
implemented by a faculty member who was also an experienced entrepreneur,
and it has subsequently been further enhanced by an expanded faculty with
substantial practical entrepreneurship experience. Experiential learning
continues to be a core principle of Babson’s entrepreneurship program.
Survey
A 55-question surveyiv was emailed to all 14,920 alumni with email
addresses on file, with two follow-up emails, resulting in a response rate of
27.4%. The analyses presented in this paper were restricted to 3,775 alumni who
graduated during the 25-year period, 1985 through 2009. Summary statistics for
the group are as follows: 41.8% had earned bachelor degrees and 58.2% masters
degrees—almost all with MBAs and a few with MS degrees; full-time students
equaled 72.3% of the total, with 27.7% being part-time students, almost all of
whom were MBA students; women students comprised 32.4% of the total and
14
Spring 2014
Journal of Business & Entrepreneurship
men students equaled 67.6%; average age was 37; and the percentage taking at
least one core entrepreneurship elective course was 67%, with 33% taking none.
Before they enrolled at Babson 7.1% had been full-time entrepreneurs, and
38.5% had expected to become an entrepreneur sometime in the future. When
they were growing up, 40.0% of them had one or both parents who were fulltime entrepreneurs.
Nine hundred and thirteen alumni (24.2%) who had founded or cofounded one or more businesses for which they worked full time were classified
as entrepreneurs.v On average, those businesses had $5.5 million of annual
revenue, 27 employees, and were 5.5 years old. These 913 alumni entrepreneurs
had started a total of 1,300 full-time businesses, with some starting more than
one.
RESULTS & DISCUSSION
Results
We used binary logistic regression analysis to test our 12 hypotheses; we
controlled for students’ prior-proclivity for a future career as an entrepreneur
before they enrolled at Babson. The summary of the results are presented in
Table 1, which looks at students at the time when they graduated, and Table 2,
which looks at alumni. Table 3 lists the significance tests of the 12 hypotheses
and also lists the significance of the control and moderating variables. Table 4 is
the bivariate correlation matrix.
Journal of Business & Entrepreneurship
Spring 2014
15
Table 1: Student Full-time Startups and Student Intentions at Time of
Graduation
Model 1
At graduation, students
became full-time
entrepreneurs (H1a,
H1b, H1c).
Expected to be a future entrepreneur
before enrolling at Babson
Founded full-time business before
coming to Babson
Model 2
At graduation, students
had intentions to start
business in the future
(H2a, H2b, H2c).
B
1.393
Wald
61.787
Sig.
.000
B
2.920
Wald
301.928
Sig.
.000
1.373
64.953
.000
.142
.275
.600
Parent entrepreneur
.102
.521
.470
.158
2.441
.118
Gender, Female = 0, Male =1
.493
7.005
.008
.459
23.224
.000
Babson degree: BS = 0, Masters=1
.279
2.986
.084
-.163
1.975
.160
Student status: Part-time = 0, Fulltime = 1
Total number of core entrepreneurship
courses taken, Dummy
.235
1.796
.180
.278
5.244
.022
29.415
.000
108.409
.000
1 core entrepreneurship courses
taken, Dummy (1)
.345
2.058
.151
.787
48.317
.000
2 core entrepreneurship courses
taken, Dummy (2)
.808
11.194
.001
1.288
71.734
.000
1.143
21.517
.000
1.586
55.702
.000
.672
10.779
.001
.517
25.974
.000
-5.269
258.743
.000
-1.423
77.026
.000
≥3 core entrepreneurship courses
taken, Dummy (3)
Wrote student business plan at
Babson
Constant
16
Number of observations =
3344
Number of full-time
entrepreneurs immediately at
graduation = 251
Number of observations =
3075
Number intending to start
business = 1942
-2 Log likelihood = 1538
-2 Log likelihood = 2859
Cox & Snell R-square =
0.113
Nagelkerke R-square =
0.254
Chi-square test:
P<0.000001
Cox & Snell R-square =
0.325
Nagelkerke R-square =
0.443
Chi-square test:
P<0.000001
Spring 2014
Journal of Business & Entrepreneurship
Table 2: Alumni Full-Time Startups and Alumni Intentions
Model 3
Alumni became fulltime entrepreneurs any
time after graduation
(H3a, H3b, H3c).
Expected to be a future entrepreneur
before enrolling at Babson
Founded full-time business before
coming to Babson
Model 4
Alumni still
intending to become
future entrepreneurs
(H4a, H4b, H4c).
B
1.196
Wald
88.615
Sig.
.000
B
1.527
3.512
201.385
.000
.115
Wald
152.64
1
.064
Sig.
.000
.800
Parent entrepreneur
.146
1.508
.220
.069
.451
.502
Gender, Female = 0, Male =1
.695
26.330
.000
.657
38.625
.000
Babson degree: BS = 0, Masters=1
-.159
1.398
.237
-.095
.405
.524
Student status: Part-time = 0, Full-time
=1
Graduated 2009-2005, Dummy
-.037
.061
.805
.462
11.255
.001
-2.180
121.191
.000
1.280
18.784
.000
Graduated 2000-2004, Dummy
-1.215
43.719
.000
.766
9.093
.003
Graduated 1995-1999, Dummy
-.693
14.732
.000
.338
2.233
.135
Graduated 1990-1994, Dummy
-.135
.565
.452
.027
.016
.900
.043
.680
.410
Age Squared
-.001
.652
.419
Personal Income
-.088
3.557
.059
.097
5.721
.017
-.063
.393
.531
32.083
.000
Age
Career Dissatisfaction
Employed by Small Business
Total number of core entrepreneurship
courses taken, Dummy
1 core entrepreneurship courses taken,
Dummy
2 core entrepreneurship courses taken,
Dummy
≥3 core entrepreneurship courses
taken, Dummy
Wrote student business plan at Babson
Constant
Journal of Business & Entrepreneurship
29.095
.000
.018
.013
.910
.369
9.335
.002
.502
8.057
.005
.560
13.148
.000
.867
19.776
.000
1.118
27.935
.000
-.048
.122
.727
.286
6.933
.008
-1.988
73.311
.000
-2.905
7.099
.008
Number of observations =
3067
Number started full-time
business any time after
graduation = 557
Number of observations =
2382
Number intending to start
business = 1254
-2 Log likelihood = 2165
-2 Log likelihood = 2655
Cox & Snell R-square
= 0.214
Nagelkerke R-square =
0.350
Chi-square test:
P<0.000001
Cox & Snell Rsquare = 0.236
Nagelkerke R-square
= 0.315
Chi-square test:
P<0.000001
Spring 2014
17
Effect of taking courses. Hypotheses 1b, 2a, 2b, 3b, 4a, and 4b are
supported; but 1a and 3a are not. It means that taking only one entrepreneurship
course was not correlated with becoming a full-time entrepreneur but it was
correlated with student and alumni intentions to become entrepreneurs. Taking
two core entrepreneurship elective courses correlated with becoming an
entrepreneur and intending to become one both for students at graduation and for
alumni; likewise, but at an even higher level of significance, taking three or more
courses. The coefficient, B, increased as the number of courses taken increased,
and the level of significance was high so it is clear that taking two or more core
entrepreneurship elective courses influenced both intending to become an
entrepreneur and actually becoming an entrepreneur.
Effect of writing business plans. Hypotheses 1c, 2c, and 4c are
supported; but 3c is not. It shows that writing a student business plan correlated
with both student and alumni intentions to become entrepreneurs and with
students becoming full-time entrepreneurs immediately upon graduation, but not
with alumni becoming entrepreneurs. We think that part of the explanation is
that when students became full-time entrepreneurs immediately upon graduation
they were probably implementing business plans that they wrote as students,
whereas when alumni started businesses some time after graduation their
businesses were unlikely to be related to the plans they wrote as students.
The coefficient, B, for writing a business plan was strikingly lower than
the coefficient for taking three or more courses in every model where the
coefficients were significant (Models 1, 2, and 4); and the coefficient, B, for
writing a business plan was also lower than the coefficient for taking two courses
in every model where the coefficients were significant, but the difference was not
as striking. It clearly shows that taking two or more core entrepreneurship
elective courses had greater influence than writing a student business plan on
both intending to become an entrepreneur and actually becoming an
entrepreneur. In Models 2 and 4, the influence of writing a business plan was
lower than taking just one core entrepreneurship elective course and higher in
Model 1. We think it was higher in Model 1 because most students were
implementing their business plan to start a new business.
However, here is a caveat: taking core entrepreneurship elective courses
was strongly correlated with writing a business plan (Pearson correlation
coefficient = 0.45, Table 4) because most students wrote a business plan in one
of the core entrepreneurship courses. But we think it is safe to say that taking
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Spring 2014
Journal of Business & Entrepreneurship
two or more courses had more influence than writing a student business plan.
We surmise that inspiration (Souitaris et al. 2007) has a hand—albeit invisible in
our study—in explaining the difference between the effect of taking courses and
the effect of writing a business plan, because students taking courses are exposed
to successful entrepreneurs who visit classes; hence, the more courses students
take, the more entrepreneurs they see.
Summary of the findings
Table 3: Summary of the significance of the B coefficients in the regressions
Variable
1 core entrepr'ship
course
≥3 core entrepr'ship
courses
Wrote student
business plan
Student at graduation
Alumni after graduation
Intention to
Intention to
Full-time
be an
Full-time
be an
entrepreneur entrepreneur entrepreneur entrepreneur
H1a
0.151 H2a
0.000 H3a
0.910 H4a
0.002
H1b
0.000 H2b
0.000 H3b
0.000 H4b
0.000
H1c
0.001 H2c
0.000 H3c
0.727 H4c
0.008
0.000
0.000
0.000
0.000
0.000
0.470
0.600
0.118
0.000
0.220
0.800
0.502
0.008
0.000
0.000
0.000
0.084
0.160
0.327
0.524
0.180
0.022
0.805
0.001
0.000
0.000
0.000
0.003
0.000
0.135
0.452
Career Dissatisfaction
0.900
0.410
0.419
0.059
0.017
Employed by Small
Business
0.531
Expected to be a future
entrepreneur before
enrolling at Babson
Founded full-time
business before coming to
Babson
Parent entrepreneur
Gender, Female = 0, Male
=1
Babson degree: BS = 0,
Masters=1
Student status: Part-time
= 0, Full-time = 1
Graduated 2009-2005,
Dummy
Graduated 2000-2004,
Dummy
Graduated 1995-1999,
Dummy
Graduated 1990-1994,
Dummy
Age
Age Squared
Personal Income
Journal of Business & Entrepreneurship
Spring 2014
19
Table 4: Bivariate correlations
Expect to Started
be entr B4 bus B4
Babson
Babson
Expect to Pearson
be entr B4 Sig. (2-tail)
Babson
N
Started
Pearson
bus B4
Correlation
Sig. (2-tail)
Babson
N
Entrepr'n'r Entrepr'n'r Started
intent'n at at
business
graduat'n graduat'n post grad
Alumni
Parent
Gender
intent'n to entrepr'n'r
be
entrepr'n'r
BS or
Masters
Part-time
Full-time
Age, years Years post Annual
graduat'n salary
Career
Employed Number of Wrote
dissatisf'n by small
entr'ship student
bus
courses
bus plan
.231
.000
3492
.269
.000
3508
.500
.000
3221
.177
.000
3508
.398
.000
2672
.281
.249
.000
3716
.088
.000
3419
.265
.000
3716
.030
.109
2833
.031
nc
.000
3431
-.215
.000
3753
.077
.000
2845
.071
.153
.000
3431
.664
.000
2815
.158
-.077
.000
2845
.091
.109
.000
3513
.193
.000
.061
3721
.099
.000
.000
3737
.113
.000
.000
3436
.178
.000
.000
3737
.110
.000
.000
2849
.148
.000
.031
.057
3463
.015
3668
.103
3683
.053
3393
.022
3683
-.004
2815
.009
3689
-.114
.084
.374
3517
.102
.000
.000
3727
.001
.940
.001
3742
.031
.059
.196
3443
.058
.001
.800
3742
.033
.043
.627
2853
.075
.000
.000
3747
.191
.000
.000
3694
-.030
.069
-.513
.000
N
Age, years Pearson
Correlation
Sig. (2-tail)
3518
-.127
3726
.075
3742
-.003
3442
-.152
3742
.176
2853
-.211
3746
-.104
3693
.099
3752
.442
.000
.000
.856
.000
.000
.000
.000
.000
.000
.000
N
Pearson
Sig. (2-tail)
N
Pearson
Correlation
Sig.
(2-tail)
N
Pearson
Correlation
Sig.
(2-tail)
N
Pearson
Sig. (2-tail)
N
Pearson
Sig. (2-tail)
N
Pearson
Sig. (2-tail)
3479
-.143
.000
3528
-.042
.015
3383
.007
.666
3506
.103
.000
2592
.385
.000
3528
.264
.000
3678
-.028
.082
3738
-.022
.193
3575
.022
.188
3710
.035
.063
2748
.115
.000
3738
.055
.001
3694
-.046
.004
3753
-.019
.252
3591
-.026
.111
3726
.107
.000
2758
.222
.000
3753
.140
.000
3400
-.196
.000
3453
-.040
.022
3308
.033
.051
3426
.072
.000
2730
.355
.000
3453
.288
.000
3694
.194
.000
3753
.007
.669
3591
-.041
.011
3726
-.107
.000
2758
.094
.000
3753
.034
.038
2819
-.265
.000
2862
-.080
.000
2764
.065
.001
2839
.040
.035
2775
.273
.000
2862
.208
.000
3699
.009
.602
3758
.000
.999
3594
-.002
.887
3730
.063
.001
2762
.111
.000
3758
.079
.000
3653
.019
.239
3705
.260
.000
3544
-.050
.002
3677
.008
.675
2730
.193
.000
3705
.110
.000
3704
-.099
.000
3764
.166
.000
3600
.015
.345
3736
-.034
.074
2766
.222
.000
3764
.053
.001
3703
.067
.000
3763
-.150
.000
3600
.011
.513
3735
.067
.000
2767
-.049
.003
3763
-.047
.004
.711
.000
3715
.348
.000
3563
-.031
.060
3689
-.035
.068
2733
-.007
.660
3715
-.085
.000
.297
.000
3611
-.051
.002
3747
-.016
.399
2775
-.143
.000
3775
-.135
.000
-.121
.000
3596
-.190
.000
2699
.039
.018
3611
-.035
.037
-.004
.850
2767
-.008
.646
3747
.022
.190
.038
.043
2775
.018
.335
.453
.000
3496
3704
3720
3425
3720
2839
3725
3671
3730
3730
3681
3741
3580
3713
2754
3741
Entrepr'n'r
intent'n at
graduat'n
Entrepr'n'r
at
graduat'n
Started
business
post grad
Alumni
intent'n to
be entre
Parent
entrepr'n'r
Pearson
Correlation
Sig.
(2-tail)
N
Pearson
Correlation
Sig.
(2-tail)
N
Pearson
Sig. (2-tail)
N
Pearson
Sig. (2-tail)
N
Pearson
Correlation
Sig. (2-tail)
Gender
N
Pearson
Sig. (2-tail)
BS or
Masters
N
Pearson
Correlation
Sig. (2-tail)
Part-time
Full-time
N
Pearson
Correlation
Sig. (2-tail)
Years post
graduat'n
Annual
salary
Career
dissatisf'n
Employed
by small
bus
Number of
entr'ship
courses
Wrote
student
bus plan N
-.368
nc: not computable
1. There is overwhelming evidence that taking two—or better yet three—
entrepreneurship courses influences intentions to become entrepreneurs
and to become actual entrepreneurs. Taking only one course does not
have nearly as strong an influence. We think it may be because some
students take one course and conclude that they don’t want to be
entrepreneurs.
2. There is powerful evidence that writing a business plan as a student
influences both students’ entrepreneurial intentions and their becoming
actual entrepreneurs; and it influences intentions of alumni to become
entrepreneurs but does not influence their actually becoming
entrepreneurs.
3. The proportion of alumni entrepreneurs increases with the years after
graduation; because although the values of the coefficients, B, for the 5year intervals post graduation are significant and decreasingly negative
from 2009 to 1995, the exponential values are increasingly positive.
20
Spring 2014
Journal of Business & Entrepreneurship
4. There is also strong evidence that the proportion of alumni with
entrepreneurial intentions steadily declines after graduation but
nonetheless endures for a long time. We controlled for students’
graduation date in 5 year intervals and found that the B coefficients for
intervals were significant but declining from 2009 to 2000 for alumni
intentions to become an entrepreneur. This is probably due to several
factors: the proportion of alumni realizing their intentions and actually
becoming entrepreneurs increases with time after graduation; intentions
decline as salaries increase; family commitment increases with years after
graduation, which deters some alumni from giving up a salaried jobs to
live life on the edge as neophyte entrepreneurs and risking their family’s
financial security; and of course it is likely that the memory of taking
entrepreneurship courses fades with time.
5. We found no significant effect due to having parents who were
entrepreneurs. This is contrary to the findings of some other researchers
that we cited earlier in this paper. Perhaps Nicolaou and Shane’s (2009)
genetic entrepreneurial endowments at conception are inhibited by
parental socialization effects when student are growing up; or maybe
Drucker (1985) was correct and entrepreneurship is not in the genes and
education trumps parental socialization effects. It is important to point
out that having a parent-entrepreneur is correlated with the control
variable, expecting to have a future career as an entrepreneur before
enrolling at Babson, (Pearson coefficient = 0.28, Table 4), and it is also
correlated, but less strongly, with a few moderator variables; hence, it
possible that the effect of parent-entrepreneur influence is masked by
other variables.
6. Males were more likely than females to intend to become entrepreneurs
and actually to become entrepreneurs. This is in agreement with almost
every study of gender effects with the notable exception on Charney and
Libecap’s 2002 study; more on gender in the next section.
7. There was no difference between undergraduates and MBAs in intentions
to become entrepreneurs and actually becoming entrepreneurs either
when they were students at graduation or later when they were alumni.
8. There was hint (p = 0.059) that the higher their income, the less likely
that alumni intend to become entrepreneurs.
9. The greater their job dissatisfaction, the more likely that alumni have
intentions to become entrepreneurs.
Journal of Business & Entrepreneurship
Spring 2014
21
10. Full-time students were more likely to have intentions to become
entrepreneurs at graduation and later as alumni, but they were not more
likely than part-time students to become actual entrepreneurs.
11. Founding a full-time business before enrolling at Babson is the strongest
influence on students becoming full-time entrepreneurs immediately at
graduation and alumni becoming entrepreneurs. For alumni
entrepreneurs, it overshadows all other influences. But it does not
influence student or alumni intentions to become entrepreneurs.
12. The control variable for students’ proclivity for entrepreneurship before
enrolling at Babson and their expectation to have entrepreneurial careers
afterward was highly significant in all four models.
Comparison with the University of Arizona Study
Charney and Libecap (2002) conducted a survey somewhat similar to
ours when they surveyed 406 non-entrepreneurship and 105 entrepreneurship
alumni who graduated from the Eller College of Management and Public Policy
at the University of Arizona during or after 1985. They compared alumni
entrepreneurs with alumni non-entrepreneurs. They studied alumni who were
entrepreneurs but not those with intentions to be entrepreneurs. Nor did they
study separately students who became entrepreneurs immediately upon
graduation. They did not separate out components of what entrepreneurship
alumni had studied (e.g., number of courses and writing a business plan). And
their dataset contained 7 times fewer alumni than ours. Our closest comparison
to their study is a combination of our Models 1 and 3. To make as direct a
comparison as possible with Charney and Libecap’s findings, we combined
students who became full-time entrepreneurs at graduation with alumni who
became entrepreneurs any time after graduation and did a regression analysis
using independent variables as close as possible to theirs (the regression, Model
5, is not shown in this article).
In general, Charney and Libecap’s findings are similar to ours: Eller
College entrepreneurship graduates were three times more likely to be selfemployed than non-entrepreneurship ones, compared with 2.4 times for the
Babson students; similar to Babson alumni, owning a business prior to entering
Eller College had a huge influence on whether or not alumni were entrepreneurs;
and they found that as alumni grew older they were more likely to be selfemployed, which was similar to our finding that the likelihood of alumni
22
Spring 2014
Journal of Business & Entrepreneurship
becoming an entrepreneur increased curvilinearly with age. However, our results
are very different from Charney and Libecap’s with respect to gender: They
found no gender effect, whereas we found that male alumni were more than
twice as likely as female alumni to be entrepreneurs, which is in line with gender
studies of entrepreneurs in the general population. Interestingly, having an
entrepreneurial parent was significant at the 0.05 level in the combined data sets
when we dropped some of our moderator variables and made our set of
independent variables as parallel as possible with Charney and Libecap’s. But
when we used the set of variables in Model 3 with the combined dataset, the
significance dropped to the 0.1 level.
Caveats
We acknowledge possible deficiencies in our research method. Two of
the principal ones are that the data are self-reported and the sample may be
biased by uneven response rates from non-entrepreneurs, would-be
entrepreneurs, and entrepreneurs. Memory fades with time so it is possible that
the responses to questions that required alumni retrospection were faulty;
however, as most of them were binary, yes or no, we think that errors were less
likely than if the alumni had been asked to recall specific numbers. What’s more
the questions dealt with major issues in a person’ life such as career plans and
choices, which are indelible memories for most professionals.
Our email asking alumni to complete the questionnaire was carefully
designed to be neutral with respect to the careers of alumni, and responses were
not anonymous (but respondents’ anonymity was guaranteed). We did not find
uneven response rates on specific questions with year of graduation, but the
number of respondents declined with the number of years since an alumnus
graduated. Our response rate (27.4%) was nearly identical with a survey of MIT
alumni who have founded businesses (27.1%) (Hsua, Roberts, and Eesley, 2007),
and somewhat higher than the University of Arizona survey (20.5%) discussed
above.
Another bias that is ever present in the social sciences but seldom talked
about is the predisposition of investigators. All we can say is that we embarked
on this research with open minds and with some trepidation as we had no idea
how it would turn out; we were pleasantly surprised by the results.
And of course, our results may not be generalizable, as we examined
alumni of just one school, Babson College.
Journal of Business & Entrepreneurship
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CONCLUSIONS
The evidence that entrepreneurship education influences entrepreneurial
intentions and leads to entrepreneurial careers of Babson College students is very
convincing. In some aspects, our findings are consistent with the University of
Arizona study. However, it does not mean that our findings are generalizable.
But as the Arizona and Babson programs are ranked very high, we think it is safe
to state that best-practice entrepreneurship education is definitely worthwhile.
Implications
Educators. Core entrepreneurship courses do influence entrepreneurial
intentions and the decision to embark on a career as an entrepreneur. Writing a
student business plan also has an influence but not as strong as taking courses. It
implies that educators should not stop teaching how to write business plans but
they should not overemphasize it. Unlike Souitaris et al. (2007) we have no
direct evidence of the role of inspiration in entrepreneurship education, but we
have a strong suspicion that an important facet of an entrepreneurship course is
to inspire students; it has important implications for what is taught, how it is
taught, and who teaches it.
Students. Taking one core entrepreneurship course helps students explore
entrepreneurship as a career; it might save some from a costly experience of
embarking on a career as an entrepreneur for which they are not suited. For
others with an aptitude for entrepreneurship, taking more than one course will
reinforce their intentions to be entrepreneurs and increase the likelihood that they
will actually become entrepreneurs; also they will have an opportunity to learn
skills that will help them be more effective and save them from costly on-the-job
mistakes if they become entrepreneurs.
Policy makers and supporters of entrepreneurship education. Entrepreneurship
education does influence students’ entrepreneurial intentions and in some cases
those intentions are translated into careers as full-time entrepreneurs, who add to
the economy by creating goods, services, and jobs. The 913 alumni in our
sample founded or co-founded companies that have created more than 25,000
jobs for an investment of $50,000 per job. No doubt about it, supporting
entrepreneurship education programs like the one examined in this paper is
worthwhile.
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Journal of Business & Entrepreneurship
Researchers. There is a need to see if the results described in this paper are
replicable at other institutions of higher education and to determine what may be
generalizable. There is also a need to see if some of the effects such as the lack
of parental influence on intentions hold up in other settings. For instance, we
found that parental influence was significant at the 0.1 level when we merged
students who became full-time entrepreneurs immediately upon graduation with
those who became entrepreneurs at any time afterward. The findings about
writing business plans are intriguing because they add fuel to the growing debate
about the value of teaching business plans (e.g., Honig, 2004).
College Administrators. Entrepreneurial experience and future career intentions
before enrolling in an entrepreneurial program are excellent predictors of
whether or not alumni become entrepreneurs; thus college admissions officers
should pay particular attention to those factors when selecting students whom
they hope will become alumni entrepreneurs.
Accrediting agencies. We would like to think that accrediting agencies
including the Association to Advance Collegiate Schools of Business (AACSB)
would take note of our findings and look at long-term rather than short-term
results when evaluating the effectiveness of entrepreneurship courses.
We conclude that Drucker (1985) was correct when he asserted that
entrepreneurship can be learned. We cannot confirm his claim that genes are not
involved. But we do know that entrepreneurship requires some degree of
creativity—in some instances exceptional creativity—and that investigations into
the role of genetics in the makeup of exceptionally creative individuals have
been around since the early days of the Darwinian revolution (Galton, 1869).
With the introduction of behavioral genetics, such studies have gathered
scientific validity in the last two decades, and it looks as if “the acquisition of
creative potential requires the simultaneous contribution of both nature and
nurture” (Simonton, 2000). Thus our current belief is that students have innate
endowments that are favorable for entrepreneurship and education can nurture
such students. Whether creativity per se—especially exceptional creativity—can
be taught is still an open question, but programs such as Babson’s are designed to
be conducive to creativity.
It’s time to cast off the prejudiced question “Why teach
entrepreneurship?” because we now have excellent empirical evidence that it
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25
makes a difference. We think that entrepreneurship should be taught not only for
the production and training of entrepreneurs but also to help students decide if
they have the right stuff to be entrepreneurs before they embark on careers for
which they may be ill-suited. At a more abstract level, we believe that
entrepreneurship should be taught to every business student because it is the very
origin of all businesses—after all, there would be no business schools if there
had never been any entrepreneurs! Aristotle is reported to have stated that we do
not understand a thing until we see it growing from its very beginning. That
alone is justification enough for why every business student should take a basic
entrepreneurship course.
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i
The systematic literature review (SLR) methodology has been discussed in detail elsewhere
(Denyer and Neely, 2004; Pittaway et al., 2004; Tranfield et al., 2003).
ii
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LVII, no. 4, California Institute of Technology, p.1, p8.
iii
Syllabi of core courses are available from the lead author.
iv
The complete questionnaire is available from the lead author.
v
We do not want to get embroiled in the debate about who is an entrepreneur. But because
career choice is a key component of our conceptual framework, our analyses included only fulltime entrepreneurs.
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A LOOK AT THE CORPORATE ENTREPRENEURSHIP –
EMPLOYEE COMMITMENT RELATIONSHIP THROUGH
THE HR ARCHITECTURE
Josh Bendickson
East Carolina University
Eric Liguori
University of Tampa
ABSTRACT
Corporate entrepreneurship is a growing field and has many implications
on organizations and individuals. To better understand how corporate
entrepreneurship affects the employee, we examine its impact on commitment.
More specifically, we posit that autonomy, risk-taking, mentorship, and
perceived organizational support moderate the corporate entrepreneurship –
employee commitment relationship. Practical implications on employee
recruitment, job design, and retention in entrepreneurially-focused organizations
are discussed.
INTRODUCTION
The world is quickly catching up to the advanced markets and many
suggest that knowledgeable employees (Grant, 1996) are the fundamental tool
for individuals, groups, organizations, and economies to succeed. Whether
organizations can facilitate successes and competitive advantage depends on
their entrepreneurial actions (Stevenson & Jarillo, 1990) and the extent that they
have knowledgeable employees who are committed to the organization (O’Brien,
1995). Two fundamental questions revolve around addressing this need for
committed employees working in entrepreneurial settings. First, is employee
commitment in corporate entrepreneurship a personality or environmental issue?
Second, how can management in entrepreneurial firms increase employee
commitment? Answers to these questions posit major implications for how
organizations recruit, manage, develop, and retain human capital.
To address these questions, we follow suit with Lepak and Snell’s (1999)
human resource (HR) architecture which combines transaction cost theory
(TCT), resource-based theory (RBT), and human capital theory emphasizing that
employees differ in the value and uniqueness of their knowledge. While the HR
architecture develops four quadrants explaining these varying levels (Lepak &
Snell, 1999), our focus more specifically relates to their quadrant one (Q1),
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regarding employees high in both value and uniqueness. Our emphasis is on Q1
because these employees are identified as strategically important and committed
(Lepak & Snell, 1999), and therefore dissecting and advancing this quadrant is
most relevant to organizational competitive advantage. The theoretical
integration of TCT, RBT, and human capital theory suggests that workers are a
core resource and provide extremely important knowledge, particularly to
organizations enhancing corporate entrepreneurship (Floyd & Wooldridge,
1999). Hence, there are a number of ways in which this study leads to furthering
the management literature. Framed in this fashion, we utilize Lepak and Snell’s
(1999) theoretical integration while also enhancing the depth of the high value,
highly unique employees (e.g., Q1) and extend on the commitment
configuration. In essence, while Lepak and Snell (1999) describe what type of
employee fits into Q1, we focus on keeping these Q1 employees committed as
pertaining to entrepreneurially minded organizations. While Lepak and Snell
(1999) primarily had the organization in mind, we extend the theoretical
integration to individual level outcomes. Additionally, as society moves toward
an era where knowledge matters most, grasping a better understanding as to
employing committed workers is crucial both to individual satisfaction and
organizational success. This position does not fully discount the less valuable or
less unique employees in the HR architecture, rather, advances its development
by placing greater weight on the highly valued, highly unique employees.
Understanding what management actions may help to better commit employees
while encouraging them to act in an entrepreneurial fashion enhances both the
literature and the practical relevance of management. Implications on the
recruitment and selection literature can also evolve through these characteristics
needed in the corporate entrepreneurship setting. Finally, as the literature in
international entrepreneurship continues to grow (Coviello, McDougall, &
Oviatt, 2011), importance is placed on bridging strategy and organizational
behavior perspectives in the field, which to our best effort, this manuscript
attempts to fulfill.
In making these contributions, we first briefly review the theoretical
framework (e.g. TCT, RBT, and human capital theory). Second, an overview of
both corporate entrepreneurship (CE) and employee commitment are developed.
The hypotheses generation follows which articulates components of autonomy,
risk-taking, mentorship, and perceived organizational support (POS) including
the rationale in which they fit into advancing the high value, highly unique
employee. Next, the methodology and results are presented. Finally, theoretical
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and practical implications are developed as well as limitations, future research,
and conclusions.
THEORETICAL FRAMEWORK
In the HR architecture model developed by Lepak and Snell (1999), three
theories are integrated as they pertain to the organization and the employee such
that the level of uniqueness and value of human capital will vary among
employment opportunities. More specifically, and of relation to the present
study, is Q1 which contains highly valued, highly unique employees who are
committed (Lepak & Snell, 1999). Combining the three perspectives (TCT, RBT,
and human capital theory), one sees why employees are near the core of
organizational success as organizations must either contract or train employees
(TCT), develop employees as a core resource (RBT), and maintain good returns
on their investments (human capital). Thus, various means to keep members of
the organization committed while pursuing organizational goals of CE is
complex because while an organization attempts to get the most of their
employees, they must not treat them too mechanically. Collectively these three
theories develop the relationship between CE and employment commitment as
each has an explanatory role in the forthcoming interactions.
To briefly address each theory, we first present an overview of TCT.
According to TCT, organizations have a choice between markets and hierarchies
as alternative governance structures (Coase, 1937). Therefore organizations
much make choices and will do so based on reducing transaction costs. Thus,
TCT views employees as members of the organization which need to be either
acquired from the market or developed from within (Coase, 1937; Williamson,
1975, 1985). That is, will firms recruit and hire the appropriately talented
employees, or will they reduce transactions by internally developing their
personnel for CE purposes. To this extent, TCT is used to draw out the individual
differences between employees such that organizations will desire to minimize
transaction costs by increasing individual commitments to the organization.
Second, RBT posits organizations gain competitive advantage through
valuable, rare, inimitable, and non-substitutable resources (Barney, 1991).
Included under the RBT umbrella is employee knowledge (Grant, 1996) which is
an important provider of competitive advantage. Employee knowledge comes in
different forms. While certain skills are considered necessary and provide value
(i.e., accounting), many point to the importance of tacit knowledge (e.g., Polyani,
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1966) which leads to uniqueness and competitive advantage. This knowledge is
housed in the unique abilities of these employees which increase the importance
of their commitment, specifically those who possess high value and highly
unique skills. .
Finally, human capital is “the collective set of performance-relevant
knowledge, skills, and attitudes within a workforce” (Aguinis & Kraiger, 2009,
453). As a theory, organizations invest (i.e., mentoring and coaching) in their
employees though with some hesitation as to protect themselves from too much
knowledge transferability. This is because an abundance of knowledge
transferability increases the risk of losing employees. From this perspective,
organizations seek to obtain a return on their investment while employees seek to
gain knowledge and skills (Shultz, 1961). With this collective theoretical
perspective (e.g., TCT, RBT, and human capital theory) in mind, the interactive
effects of this study may be further addressed. These theories each play a role in
explaining our forthcoming relationships while the relationships tested and
developed facilitate advancement of the high value, highly unique employee
(e.g., Q1) in the HR architecture.
CORPORATE ENTREPRENEURSHIP
Entrepreneurship within an organization is referred to with various terms
and in various contexts. For example, Antoncic and Hisrich (2001) define
intrapreneurship and suggest that this term in its broadest sense is
entrepreneurship within the firm. Others termed such a construct as corporate
venturing (MacMillan, 1986), intrapreneuring (Pinchot, 1985) internal corporate
entrepreneurship (Schollhammer, 1981), and corporate entrepreneurship
(Burgelman, 1983; Vesper 1984), and perhaps most recently, entrepreneurial
orientation (EO) (Dess & Lumpkin, 2005). Despite the varying terminology,
most of what these constructs and ideas are describing is in search of
recognizing, creating, and exploiting opportunities within the organization. These
activities are various forms of entrepreneurship within the firm. While firms vary
in their EO, that is, the strategy-making practices of corporate ventures (Dess &
Lumpkin, 2005), most firms have at least a minimum level of CE (Morris,
Kurako, & Covin, 2008), which leads to the definition of CE which we embrace,
that is, a concern with fostering innovation, risk-taking, and proactive behaviors
within the organization (Morris, van Vuuren, Cornwall, & Scheepers, 2009).
Such behaviors may lead to competitive advantage, higher performance, and
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great flexibility because organizations will be able to more readily create
opportunities and adapt to the environmental changes.
With these definitions and practices in mind, six distinct outcomes are
part of CE: new corporate strategies, new ventures, new business models, new
markets, new products/services, and new internal processes (Morris et al., 2009).
These outcomes are a result of various individual and group level efforts within
the organization. So, how does a firm promote such a setting in with which
entrepreneurs will bloom to their potential and facilitate such CE outcomes? Are
entrepreneurs selected or developed within the organization? While some
(Morris et al., 2009) argue that firms adopt a “one or the other” viewpoint as to
whether employees are selected or developed, we follow Lepak and Snell (1999)
who contest that it depends on the level of value or uniqueness such that
organizations will be more likely to develop uniqueness (i.e., internal
knowledge) but have the option to “buy” value (i.e., trained accountants). We
also argue that it is a blend of both selecting the most appropriate employees
while at the same time proceeding to develop their innate entrepreneurial
potential, that being, both the personality and the context will have different and
meaningful effects on the CE contributions by individuals and groups within the
firm. Accordingly, CE may impact individual outcome measures based on
various individual and environmental contextual factors.
EMPLOYEE COMMITMENT
Individual level organizational commitment encompasses many ideas. It
is the level of belonging, loyalty, dedication, identification, and beliefs one feels
toward an organization (Rhoades, Eisenberger, & Armeli, 2001). While many
antecedents may lead to commitment, these feelings lead to various actions
ranging from working more diligently to leaving the organization. Having
committed employees is an important individual level outcome for organizations,
particularly for the individuals high in value and uniqueness (Lepak & Snell,
1999). This commitment is needed because of individual knowledge (Grant,
1996) and human capital, both of which organizations seek to maximize
(Flamholtz & Lacy, 1981). Commitment falls under the beliefs, attitudes,
intentions, and behaviors framework (Fishbein & Ajzen, 1975), and has gone
through years of further conceptualization. In 1991, Meyer and Allen presented
the three-component conceptualization of organizational commitment which
gained great traction. The three distinctions include affective commitment
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(identification with the organization), continuance commitment (recognition of
the costs of leaving), and normative commitment (sense of obligation) (Allen &
Meyer, 1996). Others have also drawn on comparisons to related theories such as
social identity theory (Ashforth & Mael, 1989) to explain similar commitment
based ideas as related to organizations.
Because low levels of commitment have long been correlated with
turnover (Porter & Crampon, 1976), having committed employees retains human
capital which is important because this human capital drives CE within the
organization. On one hand, this increases the importance of hiring the
appropriate personnel up front. On the other side of the coin, commitment may
increase as certain events transpire during one’s tenure within an organization,
such as perceiving the management team as helpful mentors, experiencing just
processes during innovative attempts (Janssen, 2004), and so forth. For these
reasons, commitment may be influenced by both the person and the contextual
factors within the organization.
Although perhaps commitment is most saliently divided into various
subgroups (e.g., affective, continuance, and normative) to further dissect the
construct, the following more generally places emphasis on commitment as a
collective construct praising the vast findings in connection with job satisfaction
(e.g., Hacket, Bycio, & Hausdorf, 1994; Morrison, 1994), reduced turnover (Cole
& Bruch, 2004), and individual performance (Jaramillo, Mulki, & Marshall,
2005). Moving forward, commitment is positively framed in three ways. First,
based on this brief literature review, it appears that committed employees are
happier, more satisfied, and so forth. Second, organizations depend on
committed employees to stay on projects, develop new ideas based on tacit
knowledge, and grow the company in innovative ways in regards to CE. Finally,
commitment is desired in Lepak and Snell’s (1999) Q1 stating that organizations
should seek to keep employees with high value and high uniqueness.
FORMAL PROPOSITIONS
With the theory and fundamental constructs covered, we provide
rationale for hypotheses generation. CE is fundamental to long-term
sustainability in organizations. To accomplish CE, organizations must design a
climate tapping into employee potential (Morris et al., 2009). For these reasons,
we suggest that CE leads to employee commitment because employees will
recognize that an organization is designing itself for long-term sustainability
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Journal of Business & Entrepreneurship
which therefore makes commitment more foreseeable for employees. Secondly,
employees working in climates which allow them to reach their potential will
lead to more satisfied and more committed employees (Bilbrey & Jones, 2010).
Hence, we suggest hypothesis one.
Proposition 1: Corporate entrepreneurship leads to employee
commitment.
To further explore the relationship from CE to commitment, a number of
contextual and moderating factors are considered including autonomy, risktaking, mentoring, and perceived organization support (POS). An overview of
this exploration can be seen in Figure 1. These variables are selected in
conjunction with the theoretical integration in the HR architecture framework.
Autonomy is an important consideration as workers may need to take it upon
themselves to develop new skills and therefore “organizations may loosely
define jobs” (Lepak & Snell, 1999, 37). Risk-taking, in accordance with
venturing forward (Dess & Lumpkin, 2005) is necessary in such cases where
new designs must be made and allowing employees to take this risk and make
these decisions leads to greater commitment and performance (Lawler, Mohrman
& Ledford, 1995), both of which create competitive advantages from high value
high uniqueness employees. Because unique human capital must be internally
developed, programs such as mentoring are designed to help guide employees
and increase perceived organizational support. “To complement training,
organizations might sponsor career development and mentoring programs to
encourage employees to build idiosyncratic knowledge that is more valuable to
the firm than to competitors” (Lepak & Snell, 1999, 37). Thus, these variables
provide insight into the relationship between CE and commitment as it pertains
to organizations, managers, groups, and employees.
Journal of Business & Entrepreneurship
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39
FIGURE 1
Contextual interactions influencing the corporate entrepreneurship –
employee commitment relationship
Autonomy
Autonomy is one of the fundamental components of CE although it is an
overlooked measure in much of the testing on EO (Lumpkin, Cogliser, &
Schneider, 2009). This may be in part due to its absence from the original
measure of EO (Miller, 1983; Covin & Selvin, 1986). Yet testing such as
measure is critical to gaining perspective in CE because both individuals and
teams need to go beyond norms to identify new opportunities and better practices
(Kanter, North, Bernstein, & Williams, 1990; Lumpkin et al., 2009). Individuals
and teams must feel free to make decisions where necessary to progress CE
(Green, Brush, & Hart, 1999). Despite the need for self-directed work, this is not
a universal value held by all organizations and management (Dougherty &
Hardy, 1996). The strategic levels of autonomous thought are necessary for
individuals and teams to identify and solve problems (Lumpkin et al., 2009).
Autonomous work presents justification for the integration of TCT and
human capital theory such that organizations who demand highly autonomous
workers may need to “buy” this trait on the open market (e.g., hire individuals
outside of the organization), especially in the cases of extremely low employee
preferences for autonomy. In the same sense, when autonomy is needed, human
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Journal of Business & Entrepreneurship
capital theory suggests that organizations will have a more difficult time getting
a return on their investment with individuals whom do not desire autonomous
work. Put together, the decision to either hire or develop talented autonomous
employees ultimately leads to greater employee commitment because they will
find greater satisfaction in self-directed work.
Secondly, employees need to be made aware that CE is important to the
organization and that autonomy is a valued characteristic. This suggests that it is
not just an individuals’ level of autonomy that is important, but that the
organization will also play either a positive or negative role developing how
individuals perceive the value of autonomy within the organization. To the extent
that organizations encourage employees in self-directed ways differs from the
theoretical orientation presented above such that autonomous encouragement is
better framed in RBT from the perspective of developing their employee
knowledge and facilitating autonomous work. Collectively, these ideas suggest
that autonomy interacts with the CE - commitment relationship such that an
individual’s autonomy will have a positive influence on the CE – commitment
relationship.
Proposition 2: The relationship between corporate entrepreneurship and
commitment will be moderated by autonomy such that the association
will increase with greater autonomy and decrease with less autonomy.
Risk-taking
The second of the EO considerations as pertaining to CE is risk-taking
and is defined as “Making decisions and taking action without certain knowledge
of probable outcomes; some undertakings may also involve making substantial
resource commitments in the process of venturing forward.” (Dess & Lumpkin,
2005, 148). Risk-taking was one of the original dimensions of EO (Miller, 1983)
and has maintained a presence in the entrepreneurial literature as well as in
practice.
In this context, although risk-taking is a fundamentally different
characteristic, it resembles autonomy in a number of ways. For one, risk-taking is
a trait commonly referred to as individual propensity for risk (Sitkin & Weingart,
1995). Accordingly, it is expected that TCT and human capital theory have
explanatory power in a similar fashion such that if an individual does not possess
propensity for risk, it may be more economical to hire rather than train
Journal of Business & Entrepreneurship
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41
employees. This is such in order to get the greatest return on investment by
aligning individual risk with organization desire for risk.
Secondly, employees must understand how the organization values risktaking. Therefore the perceived value placed on risk-taking to facilitate CE will
impact employee commitment to the extent that perceived value, actual value,
and an individual’s propensity for risk are aligned. Managers can help express
the desired level of value placed on risk-taking to the employees and to the
extent that they do so can lead employees to greater achievement and
commitment. Accordingly, to the extent that management increases their
encouragement toward risk-taking, as will the relationship between CE and
commitment positively increase. Hence, in a similar fashion to autonomy, we
expect risk-taking to interact with the CE – commitment relationship and expect
to find support for the following hypothesis.
Proposition 3: The relationship between corporate entrepreneurship and
commitment will be moderated by risk-taking such that the association
will increase with greater risk-taking and decrease with less risk-taking.
Mentoring
While autonomy and risk-taking are important, other avenues also impact
the CE – commitment relationship. Mentoring began with the seminal work of
Kram (1985) and proceeded to many various topics throughout the past three
decades. This has led to various definitions. We adopt a more work focused
definition by Forret and de Janasz (2005, 484) stating that mentoring involves
“an influential individual in your work environment (typically a more senior
member of your organization or profession) who has advanced experience and
knowledge and who is committed to the enhancement and support of your
career.” This definition suits our purpose for three reasons. First, it is relatively
broad and suggests a more tenured employee is looking out for protégé interest.
Second, it is career orientated. Certain other definitions appear to embrace both
career and emotional components (Kirchmeyer, 1995). In this study, the
emphasis on support is presented in the following section and thus the mentoring
function is centered on a career focus. Third, it relates to the emphasis on
mentoring presented in the HR architecture model (Lepak & Snell, 1999).
To further discern what is meant by mentoring in the HR architecture
(Lepak & Snell, 1999), we focus on both the internal development and
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Journal of Business & Entrepreneurship
commitment as presented in Q1. As a premium is placed on keeping these
valuable employees, various mentoring and career developmental-type programs
arise. These programs seek to enhance employee capabilities and further their
internal knowledge while at the same focus on the individual’s career. In
essence, the dual role function of mentoring benefits both the organization and
the individual in Q1 of the HR architecture.
While mentoring fits well in the HR architecture and with the current
study, there is contrast between mentoring and the aforementioned dimensions of
EO: autonomous work and risk-taking. While the EO dimensions focus more on
the traits of individuals, mentoring focuses on the context, situational, and
managerial factors that may impact individual or group commitment based on the
organizational actions. Consistent with the resource-based theorizing,
organizations are expected to reap the benefits of having knowledgeable
employees as these employees are more likely to improve processes and
practices. Accordingly, under this framework, organizations should develop their
core competencies (e.g., employees) (Barney, 1991) in ways in which this
knowledge resource will be best designed for the organization. Coaching and
mentoring is one way to accomplish this goal to better develop a CE focus by
helping employees understand what they should do to succeed in an
entrepreneurial organization. Hence, in doing so, organizations strengthen one of
their greatest assets, human capital. Through this process of coaching and career
related mentoring, individuals feel more connected to an organization which
leads to greater commitment (Bozionelos, Bozionelos, Kostopoulos, &
Polychroniou, 2011). Recent reviews show that mentoring leads to other
important individual level outcomes such as increased job satisfaction, higher
pay, and more promotions (Allen, Eby, O’Brien, & Lentz, 2008; Underhill,
2006). Such that these outcomes of mentoring are beneficial to both
organizations (through advanced employee knowledge) and to individuals
(through career development) (Lepak & Snell, 1999), we suggest that
organizations will benefit from mentoring by attaining more entrepreneurial
focused employees who are more committed to the organization. Accordingly,
we suggest mentoring will positively moderate the focal relationship between CE
and commitment.
Proposition 4: The relationship between corporate entrepreneurship and
commitment will be moderated by mentoring such that the association
Journal of Business & Entrepreneurship
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43
will be higher with individuals/groups that receive additional mentoring
and lower for those who do not.
Perceived Organizational Support
Although mentoring is one means to increase POS, the POS construct
encompasses a much broader range (even with the adoption of a broad mentoring
definition) of ideas. We adopt Eisenberger and colleagues’ (1986) definition of
POS as willingness to praise or reward employees in order to ultimately develop
an organizational climate which ‘supports’ or cares for employees. (Eisenberger,
Huntington, Hutchison, & Sowa, 1986). Notably, prior and recent studies have
found a positive link between POS and commitment (Newman, Thanacoody, &
Hui, 2011) suggesting there is a direct link between the two in addition to the
forthcoming interaction effect.
As with mentoring, POS is best grounded in RBT such that the
development of core competencies is critical to organizational success (Barney,
1991). This also leads employees to believe that they are valued by the
organization. Thus, with CE, as employees are outside of their comfort zone and
standardized routines, encouragement must be fostered by the organization
(Morris et al., 2009) to facilitate entrepreneurial thinking. This can cause a host
of emotions such as stress and anxiety (Schein, 1993) which may mean they need
more support. Hence, when individuals perceive greater levels of support they
are more likely to act in entrepreneurial ways because these actions will be
relatively free from fear of rejection or humiliation. Accordingly, greater levels
of POS should increase the relationship between CE and commitment.
Proposition 5: The relationship between corporate entrepreneurship and
commitment will be moderated by perceived organization support such
that the association will be higher with individuals/groups that believe
the organization is more supportive and lower for those who do not.
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DISCUSSION
Practical Implications (“so what”)
A plethora of practical implications come as a result of this study and
relate to a diverse audience. First, entrepreneurial organizations, that being
through CE, seek to employ individuals who desire some sense of autonomy and
risk-taking, albeit at different levels across varying organizations. There are two
sides to this issue. Employees should seek organizations where their level of
autonomy and risk-taking are somewhat similar to the organizational
expectations. While on the other hand, and in accordance with TCT and human
capital theory, organizations choose to either hire or develop employees to get
the most from these investments by gaining committed employees. Once
employees are in the organization, managers have the ability to influence the
level of autonomy and risk-taking by encouraging these perspectives to the
appropriate level deemed necessary by the organization. To this extent, the
perceptions of the individuals will be better aligned with organizations and lead
to greater employee commitments.
Second, mentoring and POS represent the extent to which management
has their employees in mind. With the ever-growing importance of employee
knowledge (e.g., RBT), mentorship provides individuals with opportunity and a
chance to learn, and to grow through the coaching of a mentor. Managers who
continue to focus on this aspect of mentoring help to increase the level of
employee commitment. In the same vein, POS has implications on employee
commitment. Although this may come from higher organizational levels,
managers have some control of such perceptions by creating an atmosphere of
respect and by providing employees with a sense of appreciation and value.
Third, managers should be mindful as to the balance of their teams and
adjust them appropriately. For example, having a group high in autonomy and
risk-taking may help to “pick up” the individual employee who is lower in these
traits which could lead to greater commitment from that individual. This is
especially pertinent in the case that this employee might be of high value for
other reasons (outside of autonomy and risk-taking). Secondly, management
must be mindful as to the negative implications which could be created by
placing a “shining star” in a group with which autonomy and risk-taking are very
low. Intern, this may reduce commitment for the star employee. Finding this
balance may take time and will vary within organizations but is a feasible
Journal of Business & Entrepreneurship
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45
strategy for managers to consider when developing or changing team
composition.
Theoretical Implications
The HR architecture integration (Lepak & Snell, 1999) of TCT, RBT, and
human capital theory provide an applicable framework for the varying constructs
and applications that are present in this study. This framework includes the
integration of three theories more typically used in strategic management, yet
applicable in a quasi-organizational behavior setting. However, the application of
this framework is non-recursive in that the present study also incrementally
advances how the HR architecture may be viewed and utilized. Although the HR
architecture focused on four quadrants, we specifically focused on Q1. We note
the importance of advancing the quadrants collectively, but also draw attention to
advancing each individual quadrant which suggests that different constructs
apply to different quadrants in various ways. Additionally, we extend this
framework beyond the organizational level and apply it to individuals and
groups. The focus on keeping employees committed opens the possibilities of
this framework to additional theorizing on commitment as well as other
individual level outcomes.
Limitations and Future Research
A great deal of the commitment literature (e.g., Allen & Meyer, 1996)
specifically divides commitment into distinct categories. Rather than doing so,
this study looked more broadly at the commitment construct from a positive
perspective, that being; commitment is beneficial to both organizations and
individuals. In reality, this study likely consists of affective and normative
commitment which could have been further specified for each of the hypotheses.
Another limitation revolves around the disconnected nature of the
entrepreneurship literature as it pertains to macro and micro levels. The tone of
CE varies and while it at times seems to be more concerned with the macro level,
there are also many applications pertinent to the micro level. This difficulty may
lead to some confusion within the manuscript and although presented here as a
limitation, it may also be an area for future research in order to better distinguish
CE roles at the macro and at the micro level.
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Other future research may include further advancement of the HR
architecture (Lepak & Snell, 1999), or more broadly speaking, the integration of
theories across various levels. For example, although RBT is often used in the
macro level literature, its application to the employee and to employee
knowledge has important impacts on both organizations and individuals. Other
such integrations in TCT and human capital theory also leave room to explore
the growing importance of the knowledgeable employee and the interrelation
between CE and group or individual level outcomes.
Finally, as many individual level outcomes are correlated with
commitment, further studies might expand the major components of this study to
job satisfaction, individual performance, turnover, and so forth as a means to
advance knowledge of the individual outcomes. Different interactions might also
be considered in establishing how CE may be lead to commitment employees.
CONCLUSION
In sum, we looked at the growing literature stream on CE and its impact
on employee commitment. Autonomy, risk-taking, motivation, and POS were
identified as positive interaction effects. This research utilized the three theories
of the HR architecture framework (TCT, RBT, and human capital theory) while
also advancing the theoretical framework into new territory and suggesting some
directions for future research.
Keywords: Corporate Entrepreneurship, Commitment, Autonomy, Risk-taking,
Mentoring, Perceived Organizational Support
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HOW INSTRUMENTAL AND EMOTIONAL SUPPORT
FROM FAMILY DIFFERS BETWEEN VOCATIONAL
DECISIONS TO BECOME SELF-EMPLOYED OR
EMPLOYED
Kim Klyver
University of Southern Denmark
Mark T. Schenkel
Belmont University
Mette Søgaard Nielsen
University of Southern Denmark
Thomas Schøtt
University of Southern Denmark
ABSTRACT
This study integrates career choice and social network theory to investigate how
instrumental and emotional support from family differs between in the vocational
decision to become self-employed versus employed in an existing organization.
It also investigates whether this relationship depends on gender. Hypothesized
relationships are tested on two Danish samples of individuals actively making a
career change (N=602). We find that whereas nascent employees are more likely
to obtain instrumental support, nascent entrepreneurs and nascent employees
are equally like to receive emotional support. Further, we find that women are
more likely to obtain both instrumental and emotional support. Our results
suggest the importance of theoretical integration in career choice and social
network analysis in future research and provide new insights into the ongoing
discussion on social network disadvantages for women.
INTRODUCTION
A focus and ongoing scholarly debate on the importance of networks to
career development began in the 1970s (e.g. Stebbins, 1970). This focus and
debate has both reflected and induced practical attempts from public institutions,
private companies, and individuals alike to advance their own, or other people’s,
careers through social networks. In short, social networks have become a natural
tool individuals employ in the search for new career paths, as well as a critical
tool for public institutions and private companies attempting to assist individuals
with their careers.
This study investigates how instrumental and emotional support from
family differs between individuals making the vocational decision to become
Journal of Business & Entrepreneurship
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53
self-employed and individuals making the vocational decision to become
employed in an existing organization. Reviews of the literature show that despite
its being a dominant aspect of organizational life around the world today, the
notion of “family” has been a neglected variable on various topics in
entrepreneurship research (Dyer, 2003). Accordingly, this study makes three
original contributions to existing entrepreneurship theory.
First, it integrates nascent entrepreneurship research with career choice
theory. Most prior investigations into nascent entrepreneurship have studied
effects of certain factors comparing individuals in the process of starting a
business within the general population, including unemployed, senior citizens,
students, etcetera (e.g. Davidsson & Honig, 2003; Järlström, 2002: Sequiera &
Rasheed, 2006; Koellinger al., 2007; Zanakis et al., 2012). This form of sample
bias inherently limits the comparative value of the findings of these
investigations. In order to understand nascent entrepreneurship more precisely,
individuals considering self-employment as a vocational choice (often termed
nascent entrepreneurs) should be compared to individuals in equivalent situations
– that is, directly with those considering a different choice (employment). In this
study, therefore, we compare individuals engaged in career choices –
specifically, we compare those who are considering becoming self-employed
(nascent entrepreneurs) with those who are considering changing employers
(nascent employees). Thus, our study applies a more appropriate control group
than previous studies on nascent entrepreneurship and social networks (e.g.
Davidsson & Honig, 2003; De Clercq & Arenius 2006; Ramos-Rodríguez et al.,
2010).
Second, the impact of social networks is highly recognized in both career
choice theory (Seibert et al., 2001; Sauermann, 2005) and in studies investigating
individuals’ entry to self-employment (Hoang & Antoncic, 2003; Kim and
Aldrich, 2005). However, a bias prevails towards studying mainly instrumental
support in these studies. Instrumental support mainly covers the advice and
information that individuals obtain from their social networks. By contrast, the
emotional benefits that might also be obtained from social networks are often not
considered (Agneessens et al., 2006). As one of the few studies touching upon
emotional support, Baines and Wheelock (1998) show that in family businesses
spouses are often enthusiastic and committed. Given this scarcity and building
on social support theory, both instrumental support and emotional support are
investigated in this study.
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Third, debate continues in career choice theory, as well as in broader
entrepreneurship theory, as to whether or not women are disadvantaged as
employees and in self-employment (e.g. Bird & Brush, 2002; Brush, 1992).
Although the empirical evidence is mixed, it is often argued that women lack
suitable and effective networks (e.g. Klyver & Terjesen, 2007). We contribute to
this debate by investigating whether or not men and women are equally likely to
obtain instrumental and emotional support respectively.
THEORY
Career Choice Theory
There are a number of normative models in the extant literature
describing how individuals should make career decisions, as well as descriptive
models outlining how they actually do make them (see Sullivan & Baruch (2009)
for a recent review). Many of these normative models are influenced by a
psychological approach to career choice in which a connection between an
individual’s psychological characteristics and the type of jobs the individual
strives for has been considered and established (Tokar et al., 1998). Within this
body of work Holland’s theory – i.e., the ‘person-environment fit’ paradigm – is
among the most well-known (Holland, 1997).
Yet in recognizing that career decisions are complicated decision
processes, another paradigm has emerged more recently in which the focus is on
the decision as a behavioral process (e.g., Sauermann, 2005). In this behavioral
paradigm, decision theory is applied to understand how individuals make career
decisions. According to Sauermann (2005), a career decision is a function of
three aspects: 1) the information available to the decision maker, 2) the career
preferences generated partly during the decision process, and 3) the decision
strategy, or the way in which information and preferences are combined in order
to choose an alternative. Even though the behavioral paradigm acknowledges the
importance of the social context to the career decision, extant research within the
paradigm has focused primarily on the cognitive processes (Phillips et al., 2001)
with few exceptions (e.g. Seibert et al., 2001).
Phillips et al. (2001) find two primary social aspects in their study of the
social dimension of career decision. First, the individual’s network provides
access to information on job opportunities (including specific job alternatives).
They argue that the help received from the peers “… serves to expand the
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deciders’ options, to provide them with information or perspectives, and to
reassure them of the viability of their choices” (Phillips et al., 2001: 209).
Second, the individual’s network impacts the individual’s decisions in certain
directions. It is here that Phillips et al. (2001) argue that peers may to some
extent impose themselves on the decider. These findings suggest an instrumental
aspect in the shape of access to information and a more social adaption aspect
where the individual’s surroundings are integrated in the decision can be
identified. Similarly, Schultheiss et al. (2001) identify a number of functions
consistent with Phillips’ et al. (2001) social adaption function. Collectively, these
studies based in a behavioral paradigm suggest that the existing knowledge
already established within social network research has the potential to enhance
career decision research by providing a broader yet theoretically grounded focus
on the role of the social environment.
Social Network Theory: Instrumental and Emotional Support
Social network theory is derived from the sociological tradition
(Coleman, 1988; Scott, 2000; Wasserman and Faust, 1994). A social network is a
social structure consisting of actors of interest (labeled ‘egos’) and their mutual
relations (labeled ‘alters’). The focus of social network theory and career choice
research can be described as ego-centric in that it is about how these social
structures define and create possibilities and limitations for the central actors, or
egos, within the structure. We follow the ego-centric tradition focusing on the
relationships between individuals and their respective personal networks (e.g.
Marsden, 1987; Burt, 1984).
Over the past four decades, interest among sociologists has emerged with
respect to how aspects of individuals’ social networks influence their social
status (see Lin,1999, for a review of this literature). Three primary propositions
have developed from this body of research. First, social networks influence the
outcome of individuals’’ actions. Second, the type of resources which an
individual may access through the social network depends on the individual’s
position in the network. Third, the type of resources which an individual may
raise through the social network depends on the strength of various and specific
relations (Lin, 2001).
Traditionally, the focus of social network analysis is on how actors get
access to non-redundant resources through their position in the structure of the
network, and subsequently how the access to these resources influences their
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behavior and success (Burt, 1992; Granovetter, 1973). For instance, when social
network analysis is applied in organizational research, it relies heavily on a
resource-based perspective (Wernerfelt, 1984), involving foci and debate on how
individuals or organizations obtain resources from their environment through
their respective social networks (Borgatti & Foster, 2003).
Part of the extant social network literature focuses on social support as a
resource. Researchers with such focus make a distinction between instrumental
support and emotional support (Agneessens et al., 2006; Danes et al. 2008). In
the context of careers and career choice, instrumental support mostly exists in the
form of concrete and specific information about a job prospects or a business
opportunity. Emotional support, by contrast, is more value-based in nature, and is
typically characterized as taking the form of encouragement and moral support.
While it can be difficult to separate instrumental support from emotional support
in practice as individuals often receive both instrumental and emotional support
from the same person, prior research suggests that it is useful to separate these
factors conceptually in order to understand more fully their independent and
combined impact on career choice behavior (Agneessens et al., 2006). Up until
now, the entrepreneurship literature focusing on social network influences has
primarily focused on resources as instrumental support and tended to overlook
the role of emotional resources (e.g. Shane & Cable, 2002; Jenssen, 1999).
HYPOTHESIS DEVELOPMENT
Career decisions are not fully autonomous decisions in the sense that such
decisions only influence the life of the decision maker. Rather, individuals’
business spheres are closely connected and integrated with their social and
family spheres (Aldrich & Zimmer, 1986; Sharma, 2004). Therefore, when
individuals make career decisions, such decisions tend to involve a broader
crowd than just the person considering changing career as these decisions might
have consequences for other individuals that are important to them. This is likely
to be especially true when the close family is involved for three reasons (Aldrich
& Cliff, 2003; Dyer, 2003). First, an individual’s decision to change job might
have economic consequences for the family that could have significant positive
or adverse impact on its standard of living, both in the short and longer term.
Second, it might have social consequences in the sense that it might influence the
time available for the family and also the psychological surplus and focus that
might be left for family after work. Third, certain positions in the labor market
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are more risky than others and such risk is of course also a risk experienced by
the family. It is therefore expected that family members will influence
individuals’ career decisions through not only their instrumental support, but also
their emotional support, given both forms of support factor into the necessarily
subjective and relative assessment of the expected return of making an
entrepreneurial career choice (Minniti & Bygrave, 1999).
Different mechanisms influence the willingness with which individuals
are likely to provide their respective instrumental and emotional support.
Specifically, individuals’ willingness to provide instrumental support is mainly
determined by their knowledge and experience base. In other words, it is driven
by how much they know about the phenomenon. If they do not know much about
the phenomenon, individuals are less likely to ask them to provide instructions
and further they are probably less motivated themselves to provide instructions.
On the other hand, individuals’ tendency to provide emotional support is less
determined by the knowledge base but more by their values and feelings
associated with the phenomenon. Thus, regardless of how much they objectively
know about the phenomenon, their values and feelings associated with the
phenomenon determines whether emotional support is provided or not.
Most people in a society have knowledge and experience as employees.
For example, approximately 51 percent of the population in Denmark in 2006
was employed in traditional employment settings while only 3.5 percent was
self-employed (Statistikbanken.dk: Rasb1 2006 and Ras1 2006). Although
people may switch between employment and self-employment during the career,
most people are not expected to become self-employed during their career – i.e.,
it is well established that only a small proportion of the adult population actually
is trying to start a business (Kelley et al., 2012). It is therefore more likely that
individuals who consider a career change have family members who have
knowledge about employment rather than self-employment. Therefore, we argue
that individuals engaged in career change are more likely to obtain instrumental
support from family members if they consider employment rather than selfemployment.
Hypothesis 1: Individuals engaged in career decisions are more likely to
obtain instrumental support from family if they consider employment
compared to self-employment.
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People have different perceptions, values, and feelings associated with
various career choices. However, regardless of these individual variations there
are certain tendencies in how employment is perceived compared to selfemployment. In general, self-employment is seen as more risky career choice
that might result in bankruptcy and economic failure. For instance, in the mass
media it is a discourse that many start-ups do not survive the first five years.
Similarly, the U.S. Small Business Administration writes that less than 50
percent of all start-up survive after five years – a finding “which has been
replicated in hundreds of educational and consultancy websites, blog sites,
newspapers and magazine articles and books, not just in the United States, but
across the world” (Levie et al., 2011: 200). Although, Levie et al. (2011) show
that these figures do not necessarily represent failure in a discrete or complete
sense, they do still reflect how start-up tend to be perceived more widely or from
a cultural perspective. Moreover, even when successful, the discourse in the
mass media tends toward highlighting that starting a business is a time
consuming activity that requires the entrepreneurs’ full attention and focus.
Based on these broad discourses that self-employment is risky and time
consuming, it may be expected that family members are less likely to provide
emotional support to individuals considering self-employment compared to those
considering employment.
Hypothesis 2: Individuals engaged in career decisions are more likely to
obtain emotional support if they consider employment compared to selfemployment.
Scholarly debate continues as to whether females are disadvantaged as
employees and as self-employed compared to males. Part of this debate concerns
the question of whether females and males possess similar or different social
networks. Some observers argue that females lack suitable and effective social
networks compared to males (e.g. Menzies et al., 2004; Arthur et al., 2011), an
argument which is consistent with the idea that theory seeking to explain the
organizing processes based on evidence collected from men may not adequately
reflect those of women (Bird & Brush, 2002). For example, it is welldemonstrated that the gender composition in social networks distinguishes
networks of females and males as females tend to have more females in their
networks compared to males (Aldrich et al., 1997; Klyver, 2011). Other results
are emerging in support of the notion that gender difference exist as well though
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they are less well-documented. First, for example, it appears females rely more
heavily on kin relations and rely less on weak ties (Katz & Williams, 1997;
Greve & Salaff, 2003; Renzulli, 1998; Agneessens et al 2006). Second, whereas
prior research indicates that females, in general, are more likely to seek and
provide emotional support (Lieber & Sandefur, 2002; Plickert et al., 2007), males
are more likely to seek and provide instrumental support (Reevy & Maslach,
2001). However, in a career context this pattern has not been documented.
Menzies et al. (2004) found no differences in the level of emotional support
received from family, friends and others between females and males. Meanwhile,
based on data collected in 2003 Klyver (2011) found that females and males are
equally likely to receive emotional support while females are more likely to
provide emotional support. Following the idea that females rely more on kin
relations and seek emotional support when discussing personal matters
(Agneessens et al., 2006) and that men tend to have more weak ties and seek
instrumental support, we expect that females engaged in career decisions are less
likely to obtain instrumental support, but are more likely to obtain emotional
support compared to males engaged in career decisions.
Hypothesis 3: Females engaged in career decisions are less likely to
obtain instrumental support compared to males engaged in career
decisions.
Hypothesis 4: Females engaged in career decisions are more likely to
obtain emotional support compared to males engaged in career
decisions.
METHODOLOGY
Data and Sample
Two datasets were pooled to conduct empirical tests of the hypotheses
put forth. The first dataset comprised a representative sample of adults engaged
in changing employer or engaged in starting their own business. The respondents
were identified through the two following questions asked to a random
population sample: 1) Are you currently, on your own or together with others, in
the process of starting a new business? 2) Have you in the last year applied for a
new job? The sample from this first dataset consisted of 509 respondents (34
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nascent entrepreneurs; 475 nascent employees). Since the number of nascent
entrepreneurs was low compared to nascent employees, we then conducted an
over-sampling of nascent entrepreneurs. This is a normal procedure when
predicting something rare. Hence, it is a procedure regularly adapted in
entrepreneurship research. For instance, two large and well-known research
projects have followed this approach over the past decade: Panel Study of
Entrepreneurial Dynamic (PSED) (Gartner et al., 2004) and Comprehensive
Australian Study of Entrepreneurial Emergence (CAUSEE) (Davidsson et al.,
2011).
The second dataset comprised a random sample of business owners with
businesses not older than 1 year from a town in Denmark (Vejle) taken from a
public database of businesses. This sample consisted of 93 respondents. The
operationalization was not completely identical with the operationalization
applied for the first dataset. However, as argued by Kim and Aldrich (2011),
deciding exactly when a business is started is problematic and surrounded by
much discussion, debate, and variations in sampling approaches. Thus, the
distinction might be more theoretically than empirically clear in the extant
literature.
Pooling the two datasets resulted in 602 useable respondents, of which
127 were identified as nascent entrepreneurs or business owners with young
businesses and 475 were identified nascent employees. Admittedly, pooling data
from two various data collections that are not totally identical are risky since
results might be driven by variations in methodologies in the two data collections
rather than driven by empirical differences. In order to explore any differences in
the datasets that might drive results, we therefore tested for differences in our
datasets. Dataset 2 only contained a sample of nascent entrepreneurs for such
comparison. As shown in Table 1, no significant differences prevail across the
datasets indicating that it is unlikely the pooling of data is unduly influencing the
results.
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Table 1: Comparison of samples
Instrumental support
Emotional support
Gender (Female)
Education – no higher
Education – secondary
Education – less than 3
Education – higher 4
Age
Dataset 1
44.1 %
82.4 %
29.4 %
44.1 %
11.8 %
11.8 %
32.4 %
36
Dataset 2
46.2 %
74.2 %
32.3 %
46.2 %
17.2 %
17.2 %
19.4 %
39
Chi-Square test
N.S
N.S
N.S
N.S
N.S. (Anova test)
Variables and Operationalizations
All respondents in the two datasets were asked questions about the
instrumental and emotional support they have obtained from the family
members. Specifically, the two following questions were used to measure
respectively instrumental and emotional support for people considering selfemployment as their career choice: 1) Does your family provide you practical
support regarding your start-up? 2) Does your family provide you
encouragement regarding your start-up? Similarly, the two following questions
were asked those considering changing their job: 1) Does your family provide
you practical support regarding your application for a new job? 2) Does your
family provide you encouragement regarding your application for a new job?
These above dependent variables were coded 0 for No and 1 for Yes. The two
independent variables were operationalized as dummies: Gender was coded 1 for
men and 2 for women whereas ‘nature of career change’ was coded 1 for nascent
entrepreneur and 2 for nascent employee. We created dummies for respondents’
education level into three categories: higher education less than 3 years, higher
education between 3-4 years, and higher education more than 4 years, using ‘no
higher education’ as reference. Finally, age was coded as respondents’ exact age.
Analytical Strategy
In addition to descriptive statistics, we applied a hierarchical logistic
regression strategy for both instrumental support and emotional support to test
the hypothesized relationships. Specifically, we first ran a logistic regression
predicting instrumental support including only our control variables (higher
education and age) followed by a logistic regression including also the
independent variables (nature of career change and gender). These two steps
were then similarly completed for emotional support.
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FINDINGS
Table 2 presents the descriptive statistics. It reveals that individuals
engaged in career change towards employment are more likely to obtain
instrumental support compared to those individuals considering starting a new
business (p<0.001) but equally likely to obtain emotional support. There is no
significant differences in the higher education level obtain by those considering
starting a business and those considering changing to a new job. Males are
significantly more likely to engage in career change toward self-employment
while females are more likely to engage in career change towards employment
(p<0.001). Those considering self-employment are slightly older than those
considering changing job (p<0.001).
Table 2: Descriptive Statistics
Instrumental support Yes
No
Emotional support
Yes
No
Higher education
No
higher
education
Less than 3
years
Between
3-4
years
More than 4
years
Gender
Male
Female
Mean age
Nature of career change
Self-employment
Employment
46 %
64 %
54 %
35 %
76 %
82 %
24 %
18 %
46 %
43 %
16 %
13 %
16 %
22 %
23 %
22 %
69 %
31 %
38
50 %
50 %
35
Chi2
.00
.13
.46
.00
.01
(Anova test)
Table 3 shows the Spearman correlations. The highest correlation among
the variables is found between instrumental and emotional support, indicating
that those who obtain instrumental support from their family also are likely to
obtain emotional support. Thus, these results suggest instrumental and emotional
support often go hand-in-hand. All variables have correlations among them,
which is less than 0.8, indicating that multicollinearity does not pose a threat to
interpreting the results.
Table 3: Spearman Correlations
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1. Instrumental support
2. Emotional support
3. Higher education
4. Age
5. Nature of career change
6. Gender
Mean
.61
.81
1.21
36
1.79
1.46
S.D.
.49
.39
1.22
9.89
.41
.50
1
1
.339**
-.015
-.071
.158**
.149**
2
3
4
5
1
.078
1
-.140** .012
1
.062
.022
-.120** 1
.126** .130** .041
.154**
6
1
Table 4 shows the hierarchical logistic regressions results. Within these
results, Model 1 and Model 3 reveal no significant impact of the control
variables on respectively instrumental and emotional support. Consistent with
hypothesis 1, Model 2 shows that individuals engaged in career decisions are
more likely to report obtaining instrumental support if they consider employment
compared to self-employment (p<0.001). In fact, individuals considering
employment compared to self-employment are 88 % times more likely to obtain
instrumental support (calculated as (e0.632) – 1) providing support for Hypothesis
1. Meanwhile, Hypothesis 2 is not supported since the associated between nature
and career change and emotional support in Model 4 is insignificant. Thus,
individuals who consider changing employer are more likely to obtain
instrumental support while equally likely to obtain emotional support compared
to individuals considering becoming self-employed.
With regard to gender differences in the access to instrumental and
emotional support, empirical results do not support Hypothesis 3 but do support
Hypothesis 4. In contradiction to Hypothesis 3, Model 2 shows that females
considering career change are more likely to obtain instrumental support
compared to their male counterparts (p<0.001). In fact, women are 73 % more
likely to obtain instrumental support from family members. Finally, Model 4
shows that females engaged in career change are 93 % more likely to obtain
emotional support compared to their male counterparts (p<0.01), a finding which
is consistent with Hypothesis 4.
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Table 4: Hierarchical logistic regression
Instrumental support
Model 1
Model 2
Higher education (ref is no higher education
Less than 3 years
Between 3 and 4 years
More than 4 years
Age
Age2
Nature of change (nascent employment)
Gender
N respondent
Nagelkerke R square
Change in R square
-.127
.398
-.237
-.041
.000
-.181
.238
-.310
-.034
.000
.632***
.549***
602
.022
602
.071
.049
Emotional support
Model 3
Model 4
.500
.386
.452
-.045
.000
602
.046
.439
.227
.406
-.046
.000
.182
.657***
602
.072
.026
DISCUSSION AND CONCLUSION
In this study we investigated whether instrumental and emotional support
provided by family members is dependent on the nature of the career change and
gender. We investigated two distinguished types of career change – namely the
career decision to start a business and the decision to change employer. As
hypothesized, we found that nascent employees more likely to obtain
instrumental support. We argued that nascent employees are more likely to
obtain instrumental support because their family members are more likely to
possess the necessary knowledge base and experience needed to provide
instrumental support for changing employer. Many people have such personal
experiences or have been close to someone who has. In contrast to our
expectations, we found that nascent entrepreneurs and nascent employees are
equally like to receive emotional support. Originally, we argued that the
discourse in various media provides a picture of self-employment as a risky and
time consuming career, a picture which makes family members more likely to
prefer their close kin to choose employment over self-employment. However,
our results indicate that family members might provide an important source of
emotional support to their co-family members, a source that is more
unconditional and not influenced by the mass media discourses.
With regard to gender differences in access to instrumental and emotional
support, we found that women are, as expected, more likely to obtain emotional
support. Simultaneously, and inconsistent with our expectations, we found that
women are also more likely to obtain instrumental support. Thus, our empirical
results suggest that women do not necessarily lack sufficient social networks as
previously argued (e.g. Menzies et al., 2004; Arthur et al., 2011) – at least their
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family based social networks seem more sufficient compared to their male
counterparts.
The study makes three original contributions to existing entrepreneurship
theory. First, most previous entrepreneurship research investigating who
becomes nascent entrepreneurs compares nascent entrepreneurs with the general
population including students, unemployed, senior citizens, etcetera (e.g.
Davidsson & Honig, 2003; Järlström, 2002; Koellinger et al., 2007). From a
career choice perspective, such an approach provides only limited knowledge of
nascent entrepreneurs. In order to improve knowledge of nascent entrepreneurs
from a career choice perspective, the comparison nascent entrepreneurs with
someone in similar situations is necessary and employed here. By comparing
nascent entrepreneurs with nascent employees, this study therefore contributes to
nascent entrepreneurship research through integration of career choice theory.
We did find that the career choice towards self-employment is different from the
career choice to change employer. Therefore, our findings suggest it relevant to
study nascent entrepreneurship as distinct choice.
Second, this study builds on the social support theory and contributes to
nascent entrepreneurship research by expanding the type of support being
investigated. Previous research has focused almost exclusively on instrumental
support such as information, help, financial resources, advice, etcetera (e.g.
Shane & Cable, 2002; Jenssen, 1999). Although instrumental support is
undoubtedly essential to entrepreneurs, it is quite possible that emotional support
plays an important role as well. Starting a new business is often a complicated,
time consuming, risky and stressful process for many people. The entry decision
is therefore often perceived as a path-breaking to individuals. As a result, moral
support and encouragement from close family members might have significant
impact on the entry decision process. Social support theory shows that emotional
support plays a significant role within a range of areas within health care
(Krumholz et al., 1998) but emotional support also seems to play an important
role in career theory. Lawrence et al. (2007), for instance, have shown how
emotional support impacts work-related stress. This study is inspired by and
draws upon social support theory, and contributes to nascent entrepreneurship in
turn by investigating the influence of both instrumental and emotional support in
considering an entrepreneurial career choice. A key finding in this regard
suggests that whereas instrumental support is contingent on the nature of career
choice, emotional support in a career context seems to be more unconditional.
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Third, this study contributes the ongoing debate as to whether or not
women are disadvantaged as entrepreneurs due to lack of efficient social
networks (Bird & Brush 2002; Brush 1992). Drawing on the idea that women
lack sufficient and effective social networks, but tend to include more kin
relations than men (Menzies et al., 2004; Arthur et al., 2011; Agneessens et al.,
2006 ), we hypothesized that women are less likely to obtain instrumental
support compared to their counterparts, but more likely to obtain emotional
support compared to their male counterparts. However, inconsistent with the
expectation and our proposed hypothesis on instrumental support, we found that
women actually are more likely to obtain both instrumental and emotional
support. This might be due to the fact that we have investigated social support
obtained from family members and not from the broader social network since
women tend to rely more heavily on kin relations and less on weak ties (Greve &
Salaff, 2003; Katz & Williams, 1997; Renzulli, 1998). Accordingly, this study
contributes to the ongoing debate by lending support to the idea that women
might have more effective family networks compared to men. However, whether
this is also true for the broader and more weakly connected social network
remains unknown and warrants future inquiry.
The study has several implications for future research. First, for
entrepreneurship researchers this study implies that instrumental support
obtained through social networks needs to be investigated together with
emotional support. Second, it implies that future research should investigate how
instrumental and emotional support play together. The study suggests that
instrumental and emotional support often go hand-in-hand in the sense that those
obtaining instrumental support from family members also are likely to obtain
emotional support from family members. This suggests that studies investigating
whether instrumental support is a necessary condition for emotional support or,
in general, how they interact offer the potential to yield fruitful insights. Third,
the present findings imply that future research also needs to investigate how
instrumental and emotional support is mediated and moderated by individual
characteristics such as social skills, interpersonal skills, self-efficacy, and
etcetera.
Fourth, although this study shows the availability of emotional support to
nascent entrepreneurs, it does not provide any specific knowledge about the
nature of the impact of this support. Thus, future research needs to study how
emotional support compared to instrumental support impacts nascent
entrepreneurship. Fifth, this study only investigated the social support obtained
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from family members. In order to understand the full nature of social support, the
present influences within the context of individuals’ broader social networks
need to be investigated. Sixth, this study has been completed in a Danish context.
However, replication studies are need in other contexts as we know that social
networks vary across countries (Dodd et al., 2002). And finally, future studies on
silent or invisible emotional support are needed. Emotional support is often not
directly expressed but rather something that individuals feel. In other words, one
might feel an emotional support from certain relations even without a concrete
interaction.
The study suffers from at least three potential limitations. First, it applied
data from three datasets of which only two consisted of nascent entrepreneurs as
respondents. As a result, it remains possible that the various data collection
contexts may have unduly influenced the results in some unspecified way. We
did test whether there were any differences in the sample characteristics (Table
1) to address this possibility and no significant differences were found. We did
also perform an additional robustness test analyzing the results based solely on
the first dataset. That robustness test revealed identical results. Together, we
believe these findings suggest that the pooling of datasets did not adversely
impact the nature of the present findings. Second, the present study is based on a
cross-sectional design. Accordingly, the potential risk of reverse causality is
unavoidable and it is not possible to determine whether it is the independent
variables that influence the dependent variables or the other way around. Finally,
the measures of instrumental and emotional support employed are potentially
weak in the sense that they are based on single items and are dichotomous for
both instrumental and emotional support. Accordingly, further studies are needed
to replicate and validate the present findings and assess the potential of undue
measurement influence.
Key words: Career choice, social network, gender, social support, family
support
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THE ROLE OF NATIONAL CULTURE IN THE TRANSNATIOAL
ENTREPRENEURSHIP PROCESS
A. Banu Goktan
University of North Texas at Dallas
Isaura B. Flores
University of North Texas at Dallas
ABSTRACT
Transnational entrepreneurship (TE) is a relatively unexplored field of study.
Although researchers emphasize that TE is socially and culturally embedded,
research to date has not examined the role of national culture in the TE process.
This study builds on Hofstede’s (1980) framework of national culture and
proposes that power distance and collectivism dimensions of national culture
affect the TE process. We propose relationships between national culture and
resource availability, opportunity recognition, venture creation and business
growth in the TE process.
INTRODUCTION
Transnational entrepreneurship (TE) is a new phenomenon that has been
gaining attention in the last few years (Porters, Guarnizo & Landolt, 1999;
Sequeira, Carr, & Rasheed, 2006; Urbano, Toledano, Ribeiro-Soriano, 2011).
Increasing globalization, coupled with decreasing transportation and
communication costs, has contributed to the abilities of entrepreneurs to conduct
venture activities across national borders (Patel & Conklin, 2009). TE results
from different causes and has various consequences. Some Transnational
Entrepreneurs (TEs) are pushed out of their countries and into TE whereas others
see opportunities in another country and are pulled into those countries to pursue
opportunities. Some of them are highly skilled whereas others are not.
Regardless of their background, TEs are unique in the sense that they have
greater ability than entrepreneurs in discovering profitable international trade
opportunities because investment information is embedded in immigrants’
transnational networks. Researchers have argued that some of the benefits of TE
include reduction of poverty and economic growth in the developing world,
increase in bilateral trade, capital investment, and technology and know-how
transfer (Robinson, 2005).
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TEs are immigrants who take advantage of opportunities that cross
national borders and simultaneously operate businesses in their countries of
origin and host countries where they engage in cross-border business activities
(Portes, Guarnizo, & Haller 2002; Robinson, 2005). Dual embeddedness and
bifocality differentiates TEs from other entrepreneurs located in a single
geographical location. TEs are embedded in at least two different social and
economic arenas and they have been socialized both in their culture of origin and
the culture of the country they migrated to (Drori, Honig, & Wright, 2009;
Ireland & Webb, 2007; Sequeira, Carr, & Rasheed, 2009; Urbano, Toledano, &
Ribeiro-Soriano, 2011).
Context plays an important role in the emergence and success of TEs
(Corner & Pavlovich, 2007). Researchers have identified a number of macro
level factors that either encourage or inhibit TE. For example political
turbulence, violence, economic disruptions, and technological developments
such as high-speed jet travel, inexpensive long-distance communication have
been identified as factors that encourage TE (Castells, 1996; Levitt, 2001;
Roberts, Frank, & Lozano-Ascencio, 1999; Urbano, Toledano, & RibeiroSoriano, 2011; Vertovec, 1999). Although researchers recognize that TE process
is “culturally oriented, culturally derived, and reliant on the specific community
and relationships within which the immigrant is embedded” (Sequeira et al.,
2009, p. 1026), studies that relate national culture to the TE process are scarce.
This study will contribute to our understanding of the TE process by examining it
from a national cultural perspective. This framework will help us evaluate how
culture affects the resources available to the TEs, their opportunity recognition,
venture creation decision, and TEs’ venture growth, which are corner stones of
the entrepreneurial process. It will increase our understanding of environmental
factors that support transnational entrepreneurship, contribute to bilateral trade,
and knowledge transfer as well as make international markets more efficient
(Robinson, 2005).
THEORETICAL BACKGROUND
Entrepreneurs are not atomized decision-makers; rather they are
embedded in networks of social relations (Aldrich & Cliff, 2003). We expect
national culture in both where the TE is an immigrant and his or her home
country to have a significant effect on the TE process. The status of the TEs,
whether they have access to powerful networks or are entitled to privileges in the
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host country, as well as the home country, will affect the TE process. In this
conceptual paper, we explore and discuss the role national culture plays in the
TE process and draw from Entrepreneurship, TE and National Culture literatures
and develop propositions. We discuss practical implications and potential
directions for future research.
National Culture and Transnational Entrepreneurship
Various definitions of culture exist; however, Hofstede’s (1980)
conceptualization of culture, as ‘the collective programming of the mind which
distinguishes the members of one group or category of people from another’
(Hofstede 1997, p. 5), is the most commonly used national level definition
especially in the entrepreneurship literature (ex. Chrisman, Chua, & Steier, 2002;
Hayton, George, & Zahra, 2002; Kreiser, Marino, Dickson, & Weaver, 2010;
Mitchell, Smith, Seawright, & Morse, 2000; Mueller & Thomas, 2001). Culture
is a system off collective values and these values differ among societies
(Hofstede, 1980; Kreiser et al., 2010; Mueller & Thomas, 2001). National
cultural values “play an important role in shaping an individual's schema and
sense making, which subsequently act as powerful filters that shape
interpretation and perception’ (Chrisman et al., 2002, p. 114). Therefore, societal
members’ view of the world around them and interactions with each other are
shaped by the framework provided by the national culture (Geletkanycz, 1997).
National Culture has been linked to the entrepreneurial process and it has
been argued that entrepreneurship is a societal phenomenon rather than a purely
economic activity (Hayton et al. 2002; Hofstede et al. 2010; Urbano et al., 2011).
Research results show that entrepreneurial activity is greater in some societies
than others (GEM, 2011) and suggest that culture affects entrepreneurial activity
within societies (Kreiser, Marino, Dickson, & Weaver, 2010). Although culture
and TE have also been linked, they have not been examined together.
International entrepreneurship literature suggests that conditions in the home and
host country, and perceptions in the host society have critical impact on
propensity towards transnationalism (Landolt, Autler, & Baires, 1999). Several
studies support the idea that cultural attributes of different ethnic groups
influence entrepreneurial behavior (Basu & Altinay, 2002; Bouncken, 2004;
Dyer & Ross 2003, Greene 1997). Therefore, we expect national culture at home
and in the host country to affect the TE process.
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Dual embeddedness suggests that TEs’ success depends on two different
institutional settings; their home and host country ties and networks (Drori et al.,
2006; Patel & Conklin, 2009). Embedding is identified as the “mechanism
whereby an entrepreneur becomes part of the local structure. This enables
entrepreneurs to draw upon and use resources (Jack & Anderson, 2002, p. 467).
Networks of social relationships at home and in the host country are among the
most widely mentioned factors as facilitators of the TE process (Curran et al.,
1993; Kariv et al., 2009; Owusu, 2003; Renaud, 2002; Sequeira et al., 2009;
Urbano et al., 2011; Waters, 2003). Robinson (2005) defines the TE process as a
transnational-network process and multiple other studies in the field build on
Bourdieu’s theory and suggest that successful TE requires mobilization of social
networks (Drori et al., 2009; Portes et al., 2002; Sequeira et al., 2009; Urbano et
al., 2011).
Transnational social networks are the building blocks of the TE process
due to their trade-creating role (Dunlevy, 2003; Landolt, Autler & Baires, 1999).
Individualism versus collectivism and power distance dimensions of national
culture have the strongest relationship with social networks and the TE process
(Luczak, Mohan-Neill, & Hills, 2010). In this study, the effect of collectivism
and power distance on TEs resource access, opportunity recognition, venture
creation decision and aspirations for the business will be discussed and
relationships will be proposed.
Collectivism in the country of origin and the TE Process
Collectivism pertains to societies in which people from birth onward are
integrated into strong, cohesive in-groups. Individualistic cultures, on the other
hand, have norms, values, beliefs such as; being responsible for oneself,
individual achievement and emotional independence from organizations or
groups (Cullen 2002; Hofstede 1980). Individualism pertains to societies in
which the ties among members are loose (Cable & Judge 1994; Cullen 2002).
Groups in collectivist societies protect individuals throughout their lifetimes in
exchange for unquestioning loyalty to the group (Hostede, 1980; Hofstede and
Hofstede, 2005). In a collectivist society there is significant emphasis placed on
conformity and collective interest (Luczak et al., 2010).
“People in a collectivist society are more connected to their social
network from birth through adulthood”. Individuals have access to a group of
individuals that they can trust and rely on (Luczak et al., 2010, p. 3). Social
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network theory explains how social interactions among members in a network
result in flows of resources (Burt, 1992; Granovetter, 1973). Networks comprise
of connections between the transnational entrepreneur and friends, family,
business partners and anyone who can help create opportunities by combining
resources of their contacts (Burt, 1992; Patel & Conklin, 2009). Studies focusing
on transnational entrepreneurial behavior and motivation suggest that the success
of the TEs depend on the resources available to them (Light & Gold, 2000).
Cohesive networks and strong relational ties that exist in collectivist societies
help them acquire resources in the form of information, professional knowledge
and skill, cultural capital, opportunities and advice to TEs (Bratkovic &
Antoncic, 2009; Drori, Honig, & Wright, 2009; Portes, Guarnizo, &
Landolt,1999).
P1a Collectivist values at home are positively related to resources
available to TEs.
An opportunity is defined as a future situation that the decision makers
deem personally desirable and feasible (Keh, Foo, & Lim, 2002; Krueger 1993).
Entrepreneurs who see an opportunity, see a potential for gain and means to
resolve an issue (Jackson & Dutton 1988). Evaluation is the key to differentiate
an idea from an opportunity. Social ties and networks in collectivist societies
expand the TE’s cognitive boundaries of rationality (Simon, 1976) by creating
greater access to knowledge and information (Leung, Maddux, Galinsky, &
Chiu, 2008; Maddux, Leung, Chiu, & Galinsky, 2009). Increased rationality
helps TEs recognize and act upon opportunities (Granovetter, 1985; Uzzi, 1997).
Cohesive networks found in collectivist societies, which are based on trust and
reciprocity, further increase cognitive boundaries of rationality by aiding in the
transfer of tacit knowledge (Robinson, 2005).
P1b
Collectivist values at home are positively related to opportunity
recognition among TEs.
Entrepreneurs don’t just come up with ideas but also perceive
opportunities and act on them (Keh et al., 2002). The connection between
entrepreneurship and new venture formation has been relatively well established
in research (Aldrich & Cliff 2003; Lumpkin & Dess 1996). Many definitions of
entrepreneurship include some reference to venture or enterprise creations
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(Mueller & Thomas 2000). Therefore, entrepreneurs differ from nonentrepreneurs in terms of their desire and motivation to start a new business..
Research suggests that family and friendship networks (Shane, Kolvereid,
and Westhead, 1991) and resource leverage provided by the group (Tiessen
1997) are among factors that support venture creation decision. In addition trust,
which is embedded in cohesive local ties, helps mobilize resources towards
venture creation (Sorenson, 2003). Greater numbers of ties that exist in
collectivist societies enhance social capital through increased cohesion, loyalty,
and trust among members sharing ethnic characteristics (Portes & Bach, 1985).
Being a part of a loyal group, a network, provides resources, protection, support
and a safety net for TEs and reduce uncertainty and the risk associated with
creating a new venture. Resources provided by the network may also come in the
form of financial, intellectual or emotional support (Muzychenko, 2008).
Zhang and Dodgson’s (2007) case study of a Korean firm showed how
social networks help entrepreneurial firms establish and achieve legitimacy.
Another study by Urbano et al., (2011) found networks to be beneficial in the
case they studied from Morocco. Through network relationships, TEs were able
to recruit cheap personnel, up-to-date information and low-cost financing capital
for transnational activities. In collectivist societies people are integrated into
strong, cohesive ingroups and families which protect them throughout a lifetime
(Mueller & Thomas, 2000). The safety net, support and the resources provided to
entrepreneurs at home are likely to encourage venture creation decision.
Therefore:
P1c Collectivist values at home are positively related to transnational
venture creation.
Although networks available to TEs from collectivit societies give them
access to resources, expand their cognative capabilities and support venture
creation (Shane et al. 1991; Tiessen 1997), collectivist values at home may have
a negative impact on the size of transnational businesses. Collectivist values and
pressures to take care of others in the group may limit the growth of transnational
businesses. Sense of social obligation toward the place of origin affects
transnational behavior (Landolt, Autler, & Baires, 1999). According to
Robinson (2005) “Immigrant labor markets are the main locus of remittance
generation. They are also in part, the source of much of the variation in
remittance flows” (pg. 56), which suggests that TEs are very likely to share some
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of their earnings with their families and friends at home. This is likely to limit
investment opportunities to grow the business especially if the TE is from a
collectivist society. Similarly, the goals underlying the venture creation decision
and the aspirations of the TE from a collectivist culture may be different from
those in individualistic societies.
Individuals in collectivist societies are more likely to start a business to
generate family income rather than aim for building a corporation (Goktan &
Gunay, 2011). Research shows that even under weak economic conditions when
entrepreneurs reduced their workforce, they hired more relatives. Entrepreneurs
were motivated to take care of family members who had been laid off from other
companies, to take care of them and to provide a means to retain an income
stream (Marshack, 1994; Muske & Fitzgerald, 2006). Therefore, in collectivist
cultures, the entrepreneurs are likely to focus on generating family income to
take care of themselves and family members rather than be concerned about
individual economic achievement, profit and growth (Goktan & Gunay, 2011).
P1d Collectivist values at home are negatively related to transnational
business growth.
Collectivism in the host country and the TE process
In collectivist cultures people remain loyal to the group and put the group
interests above their own individual interests (Hofstede, 1980). It may be
difficult for immigrants to break into these cohesive networks and integrate
(Barrett , Jones, McEvoy, & McGoldrick, 2002). Research shows that in highly
cohesive and collectivist societies, venture capital investments from overseas
may be refused. Zhang and Dodgson’s (2007) case study revealed that high
levels of patriotism, which resulted from high levels of collectivism, manifested
itself as extreme forms of nationalism and became a liability for firms in Korea, a
collectivist society. In their case study, strong nationalism led to antagonistic
attitudes towards foreigners.
TEs will be successful as long as they are embedded in the host country
as well as in the home country. Embedding is identified as the “mechanism
whereby an entrepreneur becomes part of the local structure” (Jack & Anderson,
2002, p. 467). TEs advantage stems from their ability to see and recognize
opportunities that cross national borders (Portes, Escobar & Radford, 2007). The
duel embededness and bifocality expose TEs to more opportunties and their
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ability to encode information in multiple ways and make associations between
concepts increases opportunitiy identification among TEs. However, if TEs are
not integrated into the host country, they will not be able to take advantage of
dual embeddedness. Collectivist values may lead to under embeddedness.
Under embedded TEs will fail to exploit networks and translate them into and
economic advantage (Abu-Asbah, & Heilbrunn, 2011). Under embedded TEs,
who will be constrained by their minority status; will face limitations and
disadvantages such as lack of access to resources and local networks (Schnell,
Benenson & Sofer, 1999). Entrepreneurs rely upon local information and
resources in the process of business venturing (Romanelli & Schoonhoven,
2001). Therefore, in collectivist host societies, TEs will not have access to the
local network that is necessary to access resources, recognize opportunities, start
and grow a new venture.
P2a Collectivist values in the host country are negatively related to
resources available to TEs
P2b Collectivist values in the host country are negatively related to
transnational venture creation
P2c Collectivist values in the host country are negatively related to
opportunity recognition among TEs.
P2d There is a negative relationship between collectivist values in the
host country and TEs business growth.
Power distance in the country of origin and the TE process
Power distance dimension of national culture is another factor that may
influence the TE process (Honig, 1998). Similar to collectivism, power distance
affects TEs access to resources and networks (Robben, 1984). Power distance
concerns expectations regarding equality among people. In high power distance
cultures, the inequality among people is accepted as a fact of life. High power
distance cultures have norms, values and beliefs such as: everyone has a place,
some are high, some are low; the powerful are entitled to privileges; and the
powerful should not hide their power (Hofstede, 1980; Hoftede, 2010). Class,
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power and status of members of the society determine who has access to
resources (Luczak et al., 2010).
Disadvantaged positions in the social structure have a profound effect on
how entrepreneurs identify, shape and pursue their entrepreneurial undertaking
(Heilbrunn & Abu-Asbah, 2011). TEs may be constrained by their status in the
society and they may face limitations and disadvantages such as lack of capital
and mobility (Schnell et al., 1999). In high power distance societies individuals
considered lower class are alienated from upper class individuals which
eliminates benevolent intentions between different social networks (Luczak et al,
2010). Cultures with low power distance promote equality within societies and
suggest that resources and power are accessible to all members of society
(Hofstede, 1980; Robert, Probst, Martocchio, Drasgow & Lawler, 2000). Barriers
that exist in high power distance societies can prevent particular groups from
competing with others on an equal basis and may create inequalities in access to
resources (Zhou, 2004). Therefore, TEs who are considered lower class members
in a high power distance society will not have access to the resources that upper
class members will have.
P3a Class moderates the relationship between High power distance
values at home and resources available to TEs. There will be a negative
relationship between high power distance values and resource
availability for lower class individuals whereas there will be a positive
relationship between high power distance values and resource
availability for higher class individuals.
In their review of the history of entrepreneurship, Hunter and Wilson
(2007) found that historically successful businessmen were from the upperechelons of society. This may be due to a number of reasons. Lower class people
do not have access to the network and resources that are available to higher class
people (Chen & Tan, 2009; Drori et al., 2009; Patel & Conklin, 2009). People
considered lower class in high power distance societies are expected to obey and
keep the status quo (Smith & Hume, 2005) . TEs from lower echelons of society
may also exhibit lower levels of self-efficacy in entrepreneurship due to the
various initial negative experiences or setbacks that they may have experienced
(Sequeira et al., 2009). Lower self-efficacy leads to reduced perseverance and
unwillingness to engage in challenging activities (Bandura, 1997), as well as risk
aversion. These people are likely to be limited in terms of their aspirations and
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what they can achieve in their career. TEs from the lower class are likely to have
limited perception of opportunities, limited participation in the home community,
and the owners’ lower social status may hinder growth opportunities for the
business (Sequeira, Carr & Rasheed, 2009; Honig, 1998). They do not have
access to the educated, powerful network and resources that the upper class
people have access to (Leung et al, 2008; Maddux et al., 2009; Sequeira, Carr &
Rasheed, 2009).
P3b Class moderates the relationship between High power distance
values at home and opportunity recognition among TEs. There will be a
negative relationship between high power distance values and
opportunity recognition for lower class individuals whereas there will be
a positive relationship between high power distance values and
opportunity recognition for higher class individuals.
P3c Class moderates the relationship between high power distance
values at home and transnational business growth among TEs. There will
be a negative relationship between high power distance values and
transnational business growth for lower class individuals whereas there
will be a positive relationship between high power distance values and
transnational business growth for higher class individuals.
Power distance in the host country and the TE process
Research that focuses on environmental push factors that encourage
individuals to engage in entrepreneurial process suggests that some individuals
are pushed into entrepreneurship by negative factors such as dissatisfaction with
existing conditions (Robinson, 2005; Vinogradov & Kolvereid, 2007). “A
number of empirical studies support this view and characterize entrepreneurs as
misfits, rejects from society, or displaced individuals” (Mueller & Thomas, 2000,
p. 54). Research has shown that some individuals are motivated to start a
business in order to achieve a higher position, to have more influence and
prestige, and to increase their status in the society (Shane, Kolvereid &
Westhead, 1991).
Larger power distance among people in a society suggests less freedom to
improve conditions for lower class people (Dodor & Rana, 2007). Individuals in
high power distance societies, especially those from lower echelons of the
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society, may be encouraged to start a new venture in a low power distance
society. They can realize their dream of changing their place in society without
facing pressures not to disturb the status quo and not to disturb the power balance
among members of their home country. While high power distance is negatively
related to entrepreneurship in the home country (Goktan & Gunay, 2010), we
expect it to be positively related to TE especially among individuals who are
viewed as belonging to the lower class.
In many societies anti-immigrant feelings exist because they compete for
jobs and resources with the locals (Tiuriukanova & Ledeneva, 2006). In addition,
the social status of many immigrants are drastically reduced compared to what
they had back in their own countries because in some cases their knowledge and
skills are not transferable, not acknowledged, or they face language or cultural
barriers (Robinson, 2005). Such migrants very often find themselves in a
situation of social isolation, social rejection. Research shows that immigrant
adaptation is more successful when locals treat newcomers well (Tiuriukanova &
Ledeneva, 2006).
TEs are likely to find integration in low power distance societies easier
because in high power distance societies built in socio-economic structures are
protected and social movement is not welcomed (Hofstede, 2010).They are less
likely to face discrimination and be limited in social mobility. Wagner,
Camparo, Tsenkova, and Camparo’s (2008) did not find any stereotypic
representations of minority children in Denmark which has a “well-established
egalitarian social landscape” (p.313). However, even in this low power distance
society (Hofstede, 1980), they found strong in-group preference among majority
children. Research shows that in-group preference is higher especially among
high-status majority groups (Otten, Mummendey, & Blanz, 1996). Immigrants
are likely to have lower social status, experience social exclusion and live in less
favorable economic conditions than majority-group members especially in high
power distance societies (Kampmann & Nielsen, 2004; TED, 2003, Wagner et
al., 2008).
If TEs, as immigrants, are considered lower class citizens in the host
country, they will lack access to resources (financial and human capital) and,
therefore, they will target market segments where barriers to entry are lower in
terms of financial and human capital requirements. Their growth aspirations will
be limited due to limitations imposed by the socioeconomic structure. They will
not have access to the network and resources that upper class individuals have
access to in the host country. Therefore:
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85
P4a High power distance values in the host country are negatively
related to resources available to TEs.
P4b High power distance values in the host country are negatively
related to opportunity recognition among TEs.
P4c High power distance values in the host country are negatively
related to transnational venture creation
DISCUSSION
TE is a relatively new field of study. As globalization in business
increases, the TE process gains more importance. Due to dual embeddeddness
and bifocality, TEs are able to identify opportunities that cross national borders
contributing to global trade, market efficiencies, technology transfer and global
poverty reduction (Robinson, 2005). TEs are socially and culturally embedded
and this embeddeddness facilitates the TE process. In this study, we build on
Hofstede’s cultural framework and porpose that collectivism and power distance
in the society impact TE activity. Collectivist values in the home country that
place emphasis on the group members supporting each other are expected to
positely related to resource availability, opportunity recogntion, and venture
creation. However, we expect collectivist values to have a negative impact on
business growth because individuals in collectivist societies will be expected to
take care of family and friends and provide jobs and income to their family and
friends. This in turn will limit the resources available to grow the business.
Collectivist values in the host country, on the other hand, are negatively related
to TEs access to resources, opportunity recognition, venture creation and
business growth. Immigrants will have a difficult time integrating into a
collectivist society where socials bonds are strong and, therefore, their access to
resources and powerful networks will be limited.
When it comes to power distance, we expect high power distance values
at home to have a negative effect on TEs access to resources, opportunity
recognition and business growth if the TE is viewed as belonging to the lower
class and and a positive effect if the TE is viewed as belonging to the upper class.
Lower class individuals will not have access to the knowledge, resources and the
powerful network that is necessary for a successful business. Similarly we expect
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high power distance values in the host country to have a negative effect on TEs
access to resources, opportunity evaluation and venture creation. Immigrants,
especially in high power distance societies, will be viewed as lower class
individuals. This perception will limit their access to the upper class that has the
knowledge, resources and the network necessary.
Future studies should test these propositions to have a clear
understanding of national culture in the TE process. As the business world
continues to globalized, we are likely to see increased transnational activity
which in turn will contribute to global trade, knowledge transfer and econmic
advancement.
Keywords: Transnational entrepreneur, national culture, Hofstede, dual
embeddedness, bifocality.
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SOCIAL REPRESENTATIONS OF ENTREPRENEURSHIP
Joshua Maurer
Washington State University
Benjamin McLarty
Louisiana State University
Josh Bendickson
East Carolina University
Eric Liguori
The University of Tampa
ABSTRACT
Entrepreneurship is a topic of interest for both researchers and practitioners
alike due to its potential impact and economic significance. Although a growing
body of research exists on this topic, we argue that a collective understanding of
the meaning of entrepreneurship is still in question. Consequently, our purpose is
to understand how the social collective makes sense of and assigns meaning to
the concept of entrepreneurship. Through a qualitative approach, we address
differences between non-entrepreneurs and entrepreneurs and their
interpretations of entrepreneurship. Through this comparison, more robust
explanations valuable for theory, practice, and entrepreneurial education are
presented.
INTRODUCTION
“The planned, intentional nature of entrepreneurship means perceptions,
not objective facts, drive the beliefs and attitudes of potential entrepreneurs”
(Radu & Redien-Collot, 2008: 259). A qualitative lens allows researchers to
yield patterns and themes through inductive processes (Patton, 2005), and hence,
a qualitative study of shared representations aids in identifying collective sense
making about entrepreneurship and individuals’ corresponding perceptions.
Social representations are the commonsense knowledge pertaining to general
topics such as entrepreneurship which continually occur in everyday
conversation (Lorenzi-Cioldi & Clemence, 2001). Social representations theory
takes an interpretivist viewpoint arguing that reality is socially constructed
(Berger & Luckman, 1989). This focus helps create a better understanding of the
meanings that entrepreneurship has for the people being studied. While others
have made valuable headway on this issue (e.g., Anderson & Starnawska, 2008;
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entrepreneurship and that those perceptions are meaningful and evolving
components of the social world impacting beliefs, attitudes, intentions,
stereotypes and role schemas and that these theoretical implications are of
paramount importance in furthering understanding. Furthermore, we gain
knowledge about, and evidence for, such entrepreneurial viewpoints through our
empirical tests. Put simply, these perceptions are knowable and can provide
useful information for further research.
Researchers have developed varying definitions for entrepreneurship.
While our purpose is not to review the entire realm of published definitions, it is
imperative we demonstrate a variety of these, underpinning the construct of
entrepreneurship within the literature. Accordingly, some view entrepreneurship
as “the creation of new enterprise” (Low & MacMillan, 1988: 141) comprised
“not of a single task but rather a mix and sequence of tasks related to creating
and growing a new business venture” (Mueller & Goic, 2003: 619). It is a very
“pervasive and profoundly human process” (Shapero, 1984: 21) capturing the
“premier expression of resilience, creativity, and initiative taking” (Shapero,
1984: 39) which is essential to stimulate growth in a “growth-conscious world”
(Baumol, 1968: 71) becoming a critically important goal of American society
(Stevenson, Roberts, & Grousbeck, 1985). While seminal works (e.g., Shane and
Venkatraman, 2000) see entrepreneurship as the scholarly examination of goods
and services to be discovered, evaluated, and exploited, other prominent articles
(e.g., Krueger Reilly, & Carsrud, 2000) shed light in different ways, suggesting
“entrepreneurship is a way of thinking that emphasizes opportunities over
threats” (411). Despite these varied viewpoints on the subject, it is our belief that
practitioners, potential entrepreneurs and other individuals in the non-academic
world may also have important views of this concept that could hold relevant
influence and potentially different meanings for future research in the field. We
believe because this particular area of research has potential to explain
entrepreneurial actions at various levels, it is vital to maintain a strong
connection and understanding of these critical issues. These issues are not just
pertaining to entrepreneurs, but also for non-entrepreneurs and other stakeholders
(e.g., local governments) in relation to perceptions of entrepreneurship. While
societal views are of importance, this is not to say we believe entrepreneurs are
greatly influenced by these societal views, rather, we suggest the need to better
understand how these collective beliefs contribute to our field, and therefore fill
this gap in the literature by reconciling these differences between entrepreneurs
and non-entrepreneurs. While some scholars have also made non-empirical
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strides in this realm, trying to put definitional consideration to rest (e.g., Bull &
Willard, 1993), our study allows us to both empirically and theoretically unpack
these embedded societal perceptions. In order to gain a greater understanding of
the meaning of the concept of entrepreneurship in the minds of the layperson as
well as entrepreneurs themselves, performing a qualitative study to assess social
representations of the term is a meaningful technique. This will allow us to gain
further insight and to answer an important question, that is, do entrepreneurs and
non-entrepreneurs have different perceptions as to meaning of this term, field,
practice, actions, and so forth?
Our attempt in the following research is to explain how different groups
of individuals conceptually view ideas regarding entrepreneurship. In doing so,
we hope to gain a more complete understanding of what constitutes the mental
picture that people hold about entrepreneurship concepts. In this endeavor we
will also attempt to gain further understanding as to how entrepreneurship works
by asking questions about its meaning (i.e., are there social or cultural values
attached to entrepreneurship?). Only through direct attainment of information
from the minds of our research participants can we gain greater meaning about
how and why this concept operates according to their understanding. Once
further information about this process is obtained, it may be possible to develop
more robust explanations and better theory about the key notions of
entrepreneurship. Only by enhancing our evolving perceptions of what
entrepreneurship truly means for both practitioners and non-entrepreneurs can
organizational researchers move forward in exploring this concept from a
standpoint that will build both theory and provide practical application. Construct
clarity for the term entrepreneurship will help advance research in the field and
allow us to avoid the jingle/jangle fallacy (e.g., Marsh, 1994) when discussing
this term. We argue that different population groups could have substantially
different interpretations of what it means. This in turn could impact their
subsequent behavior. Therefore, it is valuable to establish if the term means
different things to different people and pursue future research efforts in a way
that follows the most beneficial path.
In order to explore the necessary domains of the ideas that surround
notions of entrepreneurship, we tap the minds of our research participants to gain
meaningful and productive responses. The research questions that we seek to
explore express and problematize our intellectual puzzle, are consistent, sensible,
coherent, and stimulate interesting answers or arguments. Therefore, we propose
the following as questions to explore: What does entrepreneurship mean for the
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average individual studied, that is, what is the general or non-academic definition
of entrepreneurship and what are the general perceptions of it? What ideas,
phrases, terminology and so forth tend to coalesce together around this word in
the minds of people when thinking about this idea? Do entrepreneurs answer
these questions differently than do non-entrepreneurs and if so, what are the
implications of these differences? While there are certainly similarities in these
two groups, we find fundamental differences between them. Not only does this
discovery fill a hole in our understanding as researchers, but it also has strong
implications on practice and education as we further explain throughout the
paper. We argue that our research helps contribute to a better understanding of
entrepreneurship by exploring how different social groups interpret this concept,
unpacking these perceptions, enhancing the nomological space as well as
providing practical and educational implications. In addressing these questions,
we begin with our theoretical underpinnings, followed by qualitative
methodology, findings, discussion and implications of our results.
SOCIAL REPRESENTATION THEORY, STEREOTYPES, ROLE
SCHEMAS, AND THEORY OF PLANNED BEHAVIOR
French social psychologist Serge Moscovici and his associates developed
the theory of social representations (Farr & Moscovici, 1984; Moscovici
1961/1976; 1981). Moscovici argued that people hold collective opinions that are
socially constructed which he called social representations. This theory seeks to
link macro-level social discourse with individual behavior, cognition, affect, and
symbolic understanding (Wagner, Valencia & Elejabarrieta, 1996). Moscovici
described it in this fashion, “The main aim of the theory of social representations
is clear. By focusing on everyday communication and thinking, it hopes to
determine the link between human psychology and modern social and cultural
trends” (Moscovici, 1988: 225). Rooted in earlier work by Durkhiem
(1912/1995), social representations theory seeks to understand the distinctions
between collective and individual representation. It seeks to establish a link
between the individual mind and society (Tateo & Iannaccone, 2012). Social
representations function dually at a cognitive and a behavioral level allowing
people to both mentally organize meaning around a concept and then orient
action in response to that meaning (Nicolini, 1999). This dual process enables
people to reach consensus about the acceptable meaning of symbols in a social
context while also helping them to collectively behave in response to those social
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understandings (Farr & Moscovici, 1984; Moscovici, 1981). Because social
representations create the basis for shared information among people, they form
the foundation for common sense theories that people hold about the social world
(Augoustinos & Walker, 1995). Consequently, these frameworks help to guide
our interpretation of existence and provide a meaningful direction in which to
pursue further action (Philogene & Deaux, 2001). Social representations are
generally formed through discursive practices and constitute the shared images
and concepts by which people organize the world around them in order to create
notions of common sense about a particular concept through the process of
communication (Berger & Luckman, 1989).
A foundational element of social representations theory revolves around
the structure of the representations themselves which are generally seen as being
composed of a central core and peripheral elements (Abric, 1976). The central
core consists of the attitudinal component and may be labeled as the primary
organizer of the representation providing meaning and value to the other
elements (Nicolini, 1999). The central core is the most resistant to change,
provides the greatest stability, and ensures the perennial nature of the
representation in changing contexts as it gives the other elements their meaning
and value through its “generating function” (Abric, 2001). Peripheral elements
are organized about the central core and provide a space for the acceptance of
new information which may lead to adaptation or transformation of the
surrounding environment. A primary function of the peripheral elements is to act
as a defense system to protect the central core of the representation by acting as a
shock absorber as the periphery may change without disturbing the central core
(Flament, 1994). Peripheral elements are malleable and can incorporate interindividual variations such as personal experiences into the representation and can
therefore adapt it to the changing realities of the moment (Guimelli, 1998;
Moliner, 1995). Transformation of a representation can only be possible if the
central core itself is questioned (Moliner, 1992). In this research effort, we
adopted the structural (core-periphery) approach to identifying and analyzing
social representations of entrepreneurship.
An example of how the structural view can be applied in research studies
is the comparison of core elements of social representations of different social
collectives (e.g., students, working adults, and self-identified entrepreneurs) to
identify commonalities and differences. We use core-periphery analysis in this
study to provide a view of the structure of the social representation of
entrepreneurship. While social representations theory helps us to develop our
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findings, notions regarding stereotypes, role schemas, and the theory of planned
behavior provide strong rationale for bridging the misalignment between these
different social collectives.
Stereotypes and the misalignment between groups can be identified and
understood using social representations theory. “Social representations are
knowledge structures comprised of beliefs” (Schaller & Latané, 1996: 64). In the
case of stereotypes, these beliefs are about the attributes of groups. Cultural
stereotypes and other social representations are consensually shared across large
numbers of people (Stangor & Schaller, 1996) and are kept together and
integrated by systems of communication (Schaller & Latané, 1996). Social
representations are the reconstructed reality for which individuals or groups
constitutes the reality itself (Abric, 2001). An individual’s reality is a
combination of their previous experiences, values, attitudes, norms and the
tangible characteristics. Representations are a “functional vision of the world
which allows individuals or groups to give meaning to their conduct, to
understand reality through their own system of references, and thus to adapt to it
and to define their place in it” (Abric, 2001: 42-43). Therefore, these stereotypes
are a specific type of role schema.
A schema is mental model of conceptually related elements representing
a prototypical abstraction of a complex concept that gradually develops from past
experience and acts as a roadmap for organizing new information (Beck, 1967;
Stein, 1992). A role schema is the cognitive structure that organizes one’s
knowledge pertaining to appropriate behaviors expected of a person in a
particular social position (i.e., entrepreneurs). For example, it is a framework to
delineate how an individual’s knowledge is organized around the set of behaviors
expected of an individual performing a certain job (Corbett & Hmieleski, 2007).
They function to influence people’s understanding of relevant information
carrying certain role-based expectations for behavior that are organized in an
individual’s mind. Stereotypes are a particular type of role schema that organizes
expectations about others who fall within a social category (Fiske & Taylor,
1991). People can use social stereotypes rather than traits (i.e., characteristics) to
make sense of individuals (Anderson & Klatzky, 1987). This is because there are
fewer ways to fulfill a concrete role schema (i.e., an entrepreneur) as opposed to
the many ways people can be creative (e.g., an artist). Stereotypes generate more
associations, are more distinctive, are better articulated and are superior in cuing
memory than are traits (Bond & Brocket, 1987). People tend to use role schemas
first, followed by traits that specify particular versions of that role. These
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associations help to encode information and provide knowledge about a concept,
including its attributes and the connecting relationships between those attributes
(Fiske & Taylor, 1991).
For example, a schema can exist regarding the meaning of
entrepreneurship and individuals hold differing primary manifestations of this
concept. Since individuals have differences in their cognitive structures, elements
can fit differently (more or less effectively) into varying individual’s schemas
(Rousseau, 2001). In addition, information presented early will cue the relevant
schemas, helping to organize subsequent information (Asch, 1946; Jones &
Goethals, 1972). The schematic effects are stronger when individuals start with
an organizing structure, influencing the amount and interpretation of information
taken in (Fiske & Taylor, 1991). Differences in individual schemas’ accessibility
spontaneously cause the use of stereotyping. Therefore, the word
entrepreneurship is likely to cue varying schema manifestations depending on
experience, role participation, organizing structure, and recently or widely used
schemas (Fiske & Taylor, 1991). Once formed, schemas tend to fossilize with
subsequent information being interpreted based on that pre-existing schema
(Horowitz, 1991).
Pre-entrepreneurial schemas are acquired through prior socialization
(e.g., societal, educational, and occupational activities). These acquired
entrepreneurial ideologies are typically in place prior to the decision to become
an entrepreneur. If an individual’s ideology and norms are not matched by their
environment, people tend to react negatively (Rousseau, 2001). If the role
schema of what an entrepreneur is and what they do is not matched by reality,
they are less likely to pursue entrepreneurial activity. This situation is similar to a
psychological contract that when unmet by an organization reduces worker
satisfaction and productivity and increases turnover (see Rousseau, 2001). More
importantly, an individual may have an undeveloped or skewed preentrepreneurial schema (stereotype) that precludes them from entrepreneurial
activity. A more developed schema could help demonstrate that an individual is
a good fit for such activity.
Thus, it is important to discover the common perception (of
entrepreneurship) and compare it to the perception of entrepreneurs. The
differences between role-member schemas (entrepreneurs) and preentrepreneurial schemas illustrate the misalignment that we believe exists. Wider
misalignment will lead to a greater likelihood of negative response, a
counterintuitive career choice, decreased aspiration levels, and reduced desire to
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continue entrepreneurial activity. Choosing self-employment as a career is
influenced by information cues and if the interpretation of informational cues is
skewed based on pre-entrepreneurial schemas, individuals may be less likely to
participate in entrepreneurial activity (Katz, 1992). Similarly, entrepreneurial
intentions are described as seeking information for the purpose and goal of
starting an organization (Katz, 1988). Hence, greater divergence between preentrepreneurial schemas and participant role schemas should cause an increased
likelihood of improper or inefficient information being obtained. It is important
to identify this misalignment if it exists and begin closing the gap through social,
educational and other mechanisms in order to increase the fit between perceived
entrepreneurial activity and actual entrepreneurship activity. This in turn will aid
in the effectiveness and survival rates of new business creation. By decreasing
the proposed misalignment, the diversity of entrepreneurs is also likely to
increase as creative individuals begin to view entrepreneurship as more than
simply a business activity done by business people. In other words, greater
differences between socially constructed stereotypical entrepreneurs and the
actuality of entrepreneurship lend itself to more counterintuitive entrepreneurial
career choices and difficulty in effectively and efficiently starting and
maintaining new ventures. Thus, it is crucial to understand the differences that
we believe exist between what potential entrepreneurs view as entrepreneurship
and what entrepreneurs view as entrepreneurship.
Representations or stereotypes are socially elaborated and shared with a
practical aim, harmonizing the common reality to a social whole (Jodelet, 1989).
This manifested and reconstructed reality or stereotype is both the process and
the product of a mental activity in which an individual is confronted with and
confers a specific meaning (Abric, 2001). This process determines an
individual’s practices and behaviors by functioning as a system for interpreting
reality that governs their relations with the social and physical environment.
Stereotypes and social representations are systems of pre-decoding reality to
determine a set of anticipations and expectations acting as a guide for action by
orientating actions and social relations (Abric, 2001). Accordingly, considering
action and behavior similarly, the final theoretical piece (i.e., the theory of
planned behavior; TPB) is added to our puzzle.
Social representations consist of beliefs, opinions, and attitudes about a
given intention (Abric, 2001). These are consistent with the antecedents leading
to intentions or behavior in common TPB models (Ajzen, 1991; Bird, 1988;
Boyd & Vozikis, 1994; Feather, 1982; Fishbein & Ajzen, 1975) and consistently
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argued as forerunners by others (Armitage & Conner, 2001; Kolvereid, 1996).
The expectancy-value model is the most prevalent conceptualization of attitude
(Ajzen, 2001) and argues that attitudes derived from multiple beliefs lead to
varying intentions that directly determine behaviors with respect to an object
(Fishbein & Ajzen, 1975). If however, the object itself is a behavior, normative
beliefs and subjective norms about that behavior influence the intention to
perform said behavior (Fishbein & Ajzen, 1975). Indeed, TPB (Ajzen, 1988;
1991) builds upon the expectancy-value model by adding perceived behavioral
control (Ajzen, 2001). TPB has become a staple in the entrepreneurship literature
(Kolvereid & Isaksen, 2006; Krueger & Reilly, 2000; Krueger, Reilly, &
Carsrud, 2000; Shook, Priem, & McGee, 2003). According to this theorizing,
individual beliefs and attitudes, as well as normative beliefs, subjective norms
and perceived behavioral control play an important role in determining
intentions.
Fishbein and Ajzen (1975) describe beliefs as the fundamental building
blocks to their model. They argue that through combinations of observation,
through inferences and information received from external sources, individuals
develop beliefs about behaviors or people. The totalities of these beliefs are
responsible for helping determine attitudes, intentions, and behaviors. Depending
on the beliefs or attributes associated with a given behavior or profession, an
individual will develop a favorable or unfavorable attitude contingent on the
attributes associated with it. Attitudes are responsible for a set of intentions
indicating the level of affect an individual may have for a profession or behavior.
In turn, each of these intentions is directly related to a specific behavior
paralleling the individual’s initial attitude (Fishbein & Ajzen, 1975). Therefore,
both intentions and behaviors are driven by beliefs and attitudes which are
initially determined by combinations of observation, inferences and information
received from external sources. By examining social representations we can
begin to examine the societal factors that influence the building blocks of
entrepreneurial behavior and therefore help establish another antecedent to
intentions and behaviors as argued by TPB. If we can establish that different
social representations exist between pre-entrepreneurial and entrepreneurial
individuals, TPB indicates that we should expect different behavioral intentions
and behaviors regarding entrepreneurs. Understanding these differences helps us
to explain why some individuals may or may not choose to pursue this activity.
Similarly, subjective norms are argued to be a key factor in determining
both intentions and behaviors. This is described as a function of salient
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normative beliefs (Armitage & Conner, 2001) and the perceived external social
pressures to participate (or not participate) in entrepreneurship (Ajzen, 1991). Put
differently, it is the perception that an individual has regarding others’ views
upon becoming an entrepreneur. While social representations may not directly
deal with the individualized perceptions, it provides insight as to how both nonentrepreneurs and entrepreneurs view the behavior or profession.
Through the use of social representations, stereotypes, role schemas, and
TPB we can begin to examine the foundations and fundamental building blocks
that lead to entrepreneurial intentions and ultimately entrepreneurial behavior.
By developing the social representations map and identifying differences
between entrepreneurs and non-entrepreneurs, we can also begin to encourage
new foundations and gain understanding by identifying the divergence of role
schemas, stereotypes, beliefs and attitudes. Our research can therefore contribute
to a greater overall knowledge of why entrepreneurs come into existence based
on the individual’s interpretation of their socially held collective understanding
of the concept. Social representations theory gives an alternative explanation for
why people will behave based on their understanding of the concept. We argue
that different population groups should possess different interpretations of what
entrepreneurship actually means. Because of this divergence, subsequent
intentions and behaviors will be altered that can have important economic
impacts on society in general. Our methods section further identifies elements of
the social representations of entrepreneurship and their relationships and also the
shared meanings of entrepreneurship that are part of the central organizing core.
Using these techniques, a greater understanding of the common sense meaning of
entrepreneurship can be obtained which will lead to the representations,
stereotypes and role schema comparisons.
METHOD
A great advantage of the use of social representations theory as a research
framework is the variety of methodological techniques that can be implemented
in the collection of data to test and advance the theory. Social representations are
composed of ideas, values, beliefs, practices, feelings, images, attitudes,
knowledge, understanding and explanations. They acquire meaning, structure
and image through verbal expression and communication and there are multiple
questions that can be pursued to investigate the nature of the social
representation including their function or development (Sotirakopoulou &
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Breakwell, 1992). Because of this complexity, it is very rare that any single
research tool will suffice in the development of answers to a pertinent research
question leading scholars to use multiple methodologies while studying social
representations.
There are two distinct issues important to any research project attempting
an analysis of social representations (Abric, 1994). In spite of the host of
empirical designs available in social representations research, the methodologies
used mainly consist of obtaining social representations from respondents and
analyzing the collected social representations, which consists primarily of
determining the central core (Abric, 1994). Tools used to obtain social
representations include the use of secondary sources such as newspapers,
magazines, and other written materials or can be more direct through a
communication process with respondents, requiring them to express their
thoughts and feelings toward the object of interest through free word association,
interviews, or questionnaires (Breakwell & Canter, 1993). Once acquired,
elicited representations are analyzed by diverse quantitative techniques such as
cluster analysis, multidimensional scaling, or correspondence analysis. However,
specific methods to explore the structure of social representations such as the
analysis of similarity method designed by Flament (1986) are also available and
which we employ in this study.
Our study focused on the structural (core-periphery) nature of social
representations (Abric, 2001), which allowed us to identify the set of concepts in
the representation of entrepreneurship that are more stable and “taken for
granted” by members of a social group (core) and the concepts in the
representation that are more adaptable to different settings (periphery). For this
purpose, social representations are elicited through free word association and
answers are coded to identify concepts. Following that process, the data are
analyzed to identify the structure of the representation based on Abric’s (2001)
theory of core and periphery elements. The analytic tools include Flament’s
(1986) analysis of similarity and Borgatti and Everett’s (1999) core/periphery
model to determine the core and periphery structure. Finally, Flament’s (1986)
notion of the maximum tree as a graphical representation indicating both the
level of co-occurrence between categories and their frequency is used to create
maps of the social representations. This technique is used because as described
by Nicolini, “When combining the two criteria and arranging the most frequently
occurring and most closely connected categories at the center, the social
representation nucleus becomes immediately apparent” (1999: 841).
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Eliciting social representations: free-word association
The respondents for our web survey include two groups. The first group
is comprised of 385 non-entrepreneurs consisting of undergraduate students at a
research university in the Southern region of the United States who were 49%
male with a mean age of 21 years. The second included 351 entrepreneurs who
were 60% male and averaging 11 years of entrepreneurship experience. Using
free word association, we gathered information from respondents by requesting
them to write down three words or phrases which come to mind when reading
the term “entrepreneurship” in a web survey environment. Words that illustrate a
concept can provide useful information explaining the semantic universe of
social representations of the object (Doise, Clemence & Lorenzi-Cioldi, 1993).
The semantic space has been explored using free-word association techniques in
multiple prior research efforts (Di Giacomo, 1980; Jung, Pawlowski & WileyPatton, 2009; Lorenzi-Cioldi, 1996). A clear advantage of this data collection
technique is the ease in which the information was obtained by the researchers
from the participants and the convenience afforded to the participants in the
study. Participation in a study design such as this may also be broader in terms of
number of participants and diversity of social groups because of the minimal
time required and easy access to the survey instrument. By asking our
participants for three words or phrases, we were able to garner the most relevant
terms they could generate and not cognitively exhaust them during the data
collection process. Our free-word association responses were digitally recorded
in the web environment which eliminated the need to transcribe data.
Content analysis
To begin the analysis of the elicited data from our non-entrepreneur
participants, a detailed coding process was undertaken by our research team
which involved organizing each word/phrase elicited from the respondents. In
this manner, key topics (concepts) could be identified for further analysis. One of
the researchers used an open coding procedure in which codes were developed
through an emerging process from scanning the 1,155 pieces of data in an
iterative fashion. This detailed work resulted in an initial population of 136 detail
codes, or subjects, present in the data (e.g. “Sole Owner”, “Individualism”,
“Variety”). For example, “being successful”, “personal success”, and
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“prosperity” were all grouped into a category labeled “Success”. Another
researcher acted as a second coder and independently recoded the data using the
same set of codes identified during the initial coding. The two raters were in
agreement on 1,075 of the 1,155 codes assigned (Cohen’s Kappa = 0.929) in our
non-entrepreneurship sample, and 926 of the 1,035 (Cohen’s Kappa = 0.895) in
our entrepreneur sample, indicating a high level of inter-rater reliability (Fleiss,
1981). Consensus was reached between the raters to reconcile disagreements
regarding the categorization of the codes. Further work between the researchers
allowed the codes to be grouped more specifically into related categories so that
relevant topics emerged, as shown in Table 1. For example, Topic T11 Creativity
is a grouping of two detail codes: “Creation” and “Creator”. Initial raw codes
that we could not categorize were eliminated from the data at this point due to
the inability of the research team to group them into useful categories. However,
as this constituted only 6.8% of the (non-entrepreneur) data collected, it is not
believed to represent a significant issue moving forward in the analysis.
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Table 1: Topics
Topic
1
Label:
Ideas
Topic Description/Sample Word or Phrase Evoked:
big idea/creative new idea/ idea
2
Courageous
bold/ brave/ boldness/ courage/ courageous/ adventurer
Leader/Boss
Boss / CEO/ Manager/ managing/ management/ in charge/Leader/
Leadership
business/ Company/ corporation/ operation/ organization/Office/ Chain
3
4
Business
5
Ownership
6
Finance
7*
Employment
8
Wealth
9
Intelligent
10
Start-up
business owner/own/self-business/self-owned/ having your own business
Capital / expensive/ investment/ Finance/funding/ Investors
Career/Job/work/ working/ employed/ possible job opportunity experience
cash/ making money/ rich /wealthy/millionaire/money/reward
crafty/ intelligence/ Intelligent/knowledge/ smart/ genius
creating a firm/ new business/ new company/ business start-up
11
Creativity
12
Determined/Motivated
determination/will not accept failure/self-made/motivated/ go getter
13
Freedom/Independent
freedom/ independence/ independent/ self-sufficient
14
15
Ambitious/GoalOriented
Effort
16*
Sole owner
individual owner/ Sole owner/single owner/ Alone
17
Innovative
innovation/invention/ patent/technology
18*
Sales
19
Opportunistic
20
Risk
21
Managing Yourself
22
Small Business
creative/creativity/ creativeness/ imagination/ thinking outside of the box
goal minded/ goal oriented/ self-improving/ future/ ambition/ ambitious
hard/ hard work/ hustle/lots of work/ lots of effort/ Strive / Struggle/initiative
marketing/sales/salesman/sell/selling
opportunity/ Finding opportunities
Risk/taking risks/Chance/ Luck/ lucky/Frequent Failure/fail quickly
self-employed/ your own boss/ running one’s own company/ control/Power
small business/ mom and pop operations
23
Success
24
Charismatic
success/ personal success/ Prosperity/ satisfaction/achievement
25
Multi-faceted
everything/hands in a lot of different things/ jack of all trades/Diversity
26
Professional
business man/ professional/suit and briefcase
charismatic / interpersonal/ outgoing/ persuasive
Capitalism
free market/capitalism/America/free enterprise
28**
Role Model
inspiration/community builder/looked up to
29**
Emotional Attachment
30**
Job Creation
27**
love/passion/desire/fun
employer/job creation/job makers/jobs/working/economic engine
*Appeared only with non-entrepreneurs
**Appeared only with entrepreneurs
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Analysis of the structure of the representation
The next step in our process of determining the structure of the social
representations of entrepreneurship in our participants required us to perform an
analysis of similarity. This process uncovers the underlying structure of social
representations by revealing the central core and peripheral elements of the
shared concept (Flament, 1986). The basic assumption of this quantitative
analysis (i.e., analysis of similarity) is that the relative position of elements
within a representation is reflected in the degree of agreement that members of a
group share with respect to the items included. Basically, the more often that
participants express the same items (themes) together, the closer the items will be
in the social representation and this agreement is operationalized as a cooccurrence of attributes (i.e., thematic codes) across sources (i.e., participants) in
the analysis (Pawlowski et al., 2007).
According to Abric (2001), there are three criteria for characterizing the
core elements of a social representation: symbolic value, expressive value, and
associative value. Symbolic value is grounded in the idea of the generating
function of the core and the notion that central elements cannot be questioned
without impacting the meaning of the entire representation. This principle has
been tested with multiple experimental and empirical methods to uncover the
elements that comprise the central nucleus of the representation (Flament, Abric,
& Doise, 1998). Expressive value holds to the assumption that because central
elements occupy the central space in representations, they will automatically
have more frequency in the discourse concerning the object of representations
than the peripheral elements might hold. Associative value is established through
the notion that central elements must be connected with a larger number of
elements than the peripheral ones. Because central elements provide meaning to
representations, they must be associated with a larger number of representation
components than the peripheral elements to transmit this meaning. Expressive
value is determined by calculating the parameter of salience, which is
determined by counting the number of times each topic appeared as a response
(Abric, 2001; Nicolini, 1999). The sum of similarity and coreness are the two
different methods employed to assess associative value. Sum of similarity is
calculated by first conducting an analysis of similarity which is a technique first
introduced by Flament (1986) and has been widely used to clarify relationships
among the elements of social representations (e.g., Nicolini, 1999; Pawlowski et
al., 2007). The basic procedure involved in the analysis is the creation of an
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inter-attribute similarity (IAS) matrix in which each cell contains a Jaccard’s
similarity coefficient, indicating the degree of co-occurrence (proximity) for a
given pair of attributes (Hammond, 1993). Sum of similarity is then calculated as
the sum of the similarities of each element (topic) to all other elements in the IAS
matrices. Using this technique, the higher sum of similarity that the element
(topic) has, the closer association the element has with the others. Therefore, the
greater the associate value of the element under scrutiny.
Associative value of elements is further clarified in the representation by
evaluating the last parameter of interest, coreness. A method to determine this
feature is developed using Borgatti and Everett’s (1999) core/periphery model.
Originally developed to analyze network structures, this procedure detects the
core and periphery components of elements in a dataset consisting of values
representing strengths of relationships among the items. Coreness is considered a
function of the closeness (measured either by correlation or Euclidean distance)
of an element to the center. The strength of the relationship between any two
elements depends completely on the extent to which each is associated with the
center (Borgatti & Everett, 1999). In order to spur further research in this arena,
Borgatti and his colleagues created an algorithm for determining a core and
periphery structure and developed the computer package UCINET, which
estimates the coreness value of each element and classifies elements into the core
or the periphery for further analysis.
We utilized the UCINET software to analyze our data. First, we
developed our co-occurrence matrices by inputting the data as MXN matrix
where we include both responses and topics. The output from this procedure is
an NXN matrix that shows the co-occurrence of our topics. Next, we used the
output of the co-occurrence matrices to develop the IAS matrices. UCINET has a
routine that performs this step as well. This matrix is again an NXN matrix that
gives the sum of similarity between topics (i.e. how close they are to each other).
Finally, we used the IAS matrices to perform the core/periphery analysis using
another UCINET routine. Sum of similarity, salience and coreness of each topic
are shown in Table 2. UCINET 6.382 was used to perform the analyses described
in order to assess membership of topics based on coreness. Based on the coreness
measure output obtained from the analysis, topics were classified into the core
and periphery of the social representations.
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Table 2 Core-Periphery Structure
Mapping the social representation
The last step in our analysis involved placing the elements into a
perceptual space or social representation maps. Significant relationships among
the elements (topics) of representations were identified by constructing the
maximum tree of the system based on the pair-wise similarity indexes from the
IAS matrices. Flament’s (1986) notion of the maximum tree is equivalent to the
minimum spanning tree concept that comes from graph theory (Doise et al.,
1993). In this process, minimum spanning trees search for the shortest path to
connect all nodes within a graph so that there is a single link between any two
nodes. In the context of the social representations theory, Flament’s maximum
tree has a similar aim. It seeks to single out those relationships among the
elements that maximize the overall similarity within representations. The
maximum tree can be constructed by using the nearest neighbor algorithm that
was determined from the IAS matrices. The absolute frequencies of a topic’s
appearance were used to break any ties that might have occurred in order to keep
the links between nodes singular (Kruskal, 1956). With this technique, concepts
are shown as nodes on the maps, with size of the node based on the frequency of
occurrence of the concept in the set of data sources (i.e. larger nodes for higher
frequency). Links between nodes show the relationships between the elements,
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occurrence (see the figures for determining the style key). Ultimately, Flament’s
maximum tree has the purpose of singling out those relationships among the
elements that maximize the overall similarity within the representation in a
visually informative way. Our final social representations maps can be seen in
Figures 1 and 2. The maps are not a literal representation of the elements of the
social representation; however, it does serve as an illustration of the pattern of
significant relationships among the themes that have shown through our analysis
to be important in the minds of our participants when it comes to the idea of
entrepreneurship.
Figure 1: Social representation map of entrepreneurship for nonentrepreneurs
Map Legend:
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Figure 2: Social representation map of entrepreneurship for entrepreneurs
Map Legend
RESULTS
To begin the examination of our results, we more broadly present a
comparison between Figures 1 (non-entrepreneurs) and 2 (entrepreneurs). The
map centers on the node of Business (T4) for non-entrepreneurs and on the node
of Creativity (T11) for actual entrepreneurs. While many core items overlap,
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their order and prominence display stark differences as seen in Table 2. There are
also a total of seven items which appear in one sample, but are absent from the
other. One of which, Job Creation (T30), is actually in the core for entrepreneurs
but absent from non-entrepreneurs. It is interesting that non-entrepreneurs did not
view this aspect as meaningful and it was subsequently not included in their
representation.
Based on Abric’s (2001: 44) statement, “…it is not the presence of an
important element which defines its centrality, but rather the signification it gives
to the representation,” Pawlowski et al. (2004) developed three classifications of
concepts (central, organizing, and peripheral concepts). Similarly, we define the
classifications as follows for our sample of non-entrepreneurs (i.e. Figure 1).
First, the central concepts are critical to understanding what entrepreneurship
means (e.g. Business (T4), Ownership (T5), Wealth (T8), Start-up (T10), and
Risk (T20) in Figure 1). Thus, by putting the five key terms into action, the
remaining concepts are characteristics, outcomes, or causes of the core concepts
or individuals acting on them. This implies that entrepreneurship is seen as an
action and contains characteristics, outcomes, and causes of both this action and
the individual committing the action. It appears to hold a dual meaning in the
social representation as it relates to both a process and an individual performing
the process.
Second, organizing concepts link a further grouping back to one of the
primary concepts. For example, in Figure 1, Freedom/Independence (T13)
appeared as an organizing concept in the representation, relating Small Business
(T22) and Goal Orientation (T14) back to the core concept of Business (T4).
Extending this small subsection out we see that Small Business (T22) is linked to
Success (T23) and the concept of being Multifaceted (T25). One explanation for
these relationships is the possibility that Freedom/Independence is associated
with smaller businesses or “mom and pop shops” rather than larger
organizations. Likewise, owning a small business and the freedom associated
with it may be seen as an intrinsic reward leading to its association with success.
Similarly, small business owners may be required to be multifaceted in order to
handle the demands and complexity associated with running the various
functions of an organization (e.g. keeping the books, managing employees,
making sales etc.).
Finally, peripheral concepts are reflective of new information and or the
transforming environment (e.g., Finance (T6) and Employment (T7) in Figure 1).
Peripheral concepts are reflective of new information and can also be indicative
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of a transformation occurring within the environment. In our non-entrepreneur
representation, examples of peripheral topics in Figure 1 include Finance (T6)
and Employment (T7). These concepts not only lend additional evidence to the
core concepts but seem reflective of the current environment. It is appropriate
that these two elements are associated with the risk and reward portions of our
non-entrepreneurial sample definition of entrepreneurship. Finance (T6) is
associated with Risk (T20), while employment is associated with Wealth (T8).
Given the current economic environment, both the problems associated with
achieving necessary levels of financing and the monetary value associated with
being employed are major issues to the public at large. We believe this is
indicative of a mindset that implies both a risk and reward attitude that is
associated with entrepreneurship among our non-entrepreneurs. While the
aforementioned were just a few examples from Figure 1, the three classifications
of concepts (central, organizing, and peripheral concepts) can be readily used
throughout Figure 1 as well as Figure 2 to fully address the mapping
connections.
Our sample of entrepreneurs can also be examined by viewing the results
presented in Figure 2. Once again, the three classifications of concepts (central,
organizing, and peripheral concepts) are useful for understanding how this group
views the subject. First, the central concepts are critical to understanding what
entrepreneurs as a collective body believe the concept entails (e.g., Creativity
(T11) and Risk (T20) in Figure 2). These two key terms serve as the organizing
central core, whereas the remaining concepts are characteristics, outcomes, or
causes of these core concepts. The map implies that in the social understanding
of practicing entrepreneurs, the idea of entrepreneurship is also seen as an action
and contains characteristics, outcomes, and causes (i.e., action and the individual
committing the action). However, it appears to hold a different central meaning
in the social representation as it relates to different characteristics of the process
and the individuals performing the process (i.e., risk and creativity) instead of an
emphasis on the ideas of businesses, start-ups, wealth, and ownership.
The organizing concepts provide a link back to one of the primary
concepts. For example, in Figure 2, Freedom/Independence (T13) appears as an
organizing concept in the representation, relating Opportunistic (T19) and Startup (T10) back to the core concept of Creativity (T11). Extending the portion of
the map related to Opportunistic (T19), we see connections to Wealth (T8) and
Business (T4). This may indicate that the social understanding of entrepreneurs
regarding these concepts places a strong emphasis on finding opportunities to
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create businesses and develop wealth. Freedom and independence may be
viewed as an important prerequisite to enacting opportunistic behavior which
results in the creation of a business and the development of wealth. As explained
before, peripheral concepts can be indicative of new information and the
transforming environment (e.g., Multi-faceted (T25) and Small Business (T22) in
Figure 2). Our entrepreneur representation demonstrates examples of these
peripheral notions. The concepts of Small Business and Multi-faceted help us
understand their importance in relation to the core notions of the representation.
Both are related to the idea of wealth and can be traced back to the core through
organizing ideas of being opportunistic and having freedom and independence.
For entrepreneurs, the notions of a small business and being multi-faceted are not
central ideas perhaps indicating that these issues may not be as vital to the
creation of new ventures. It is possible that entrepreneurs with experience believe
that opportunities afforded by their independence are more critical to their
success than developing small businesses or being concerned about multi-tasking
in their work. Yet again, these are just a few examples of how the representation
is organized in our entrepreneur sample and demonstrates that the two groups
have very different views as to the importance of different concepts and activities
related to the notion of entrepreneurship.
DISCUSSION
This structural approach allows each group to identify the key conceptual
elements in the sense making of entrepreneurship. This analysis and examination
of the themes and their corresponding relationships allows us to produce a
pattern as to what entrepreneurship means to non-entrepreneurs as compared to
actual entrepreneurs. Using social representations provides some potential
answers to our initial research questions. In this section we attempt to address the
questions that were proposed at the beginning our study based on the findings of
our research.
When we compare the inner cores of the two groups (entrepreneurs and
non-entrepreneurs) we find that, despite some overlap, the ordering and
prominence of the core organizing concepts are vastly different. The core
organizing concept for our entrepreneur sample is Creativity (T11), whereas it is
Business (T4) for non-entrepreneurs. Non-entrepreneurs view Business (T4) and
the other inner core elements [e.g., Wealth (T8), Startup (T10), Ownership (T5)
and Risk (T20)] as the centralizing organizing structure that influences the
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amount and interpretation of information taken in. These core elements are used
to organize the subsequent information individuals receive regarding
entrepreneurship. Differences in individual schemas’ accessibility spontaneously
cause the use of stereotyping. Therefore, non-entrepreneurial stereotypical views
of entrepreneurship are a wealthy risk-taker who started and owns his own
business. Conversely, according to our second sample, entrepreneurs have a
stereotypical view of entrepreneurship as creative risk-taking. Once formed,
stereotypes tend to fossilize with subsequent information being interpreted based
on that pre-existing schema (Horowitz, 1991). Therefore, non-entrepreneurs will
build and interpret information based on notions of businesses, business creation,
business ownership, risk, and wealth. This will lead to pursuing and interpreting
information pertaining to concepts of business, risk and gaining wealth instead of
creative risk taking. These divergent views could lead entrepreneurs and nonentrepreneurs down different informational avenues resulting in an ineffective
informational search that may deter venture initiation, venture sustainability and
motivation for continued operation.
Additionally, the inner cores are different in their organizing structure
indicating that the elements associated in each cognitive system are different. It
is the organization of the content that matters. If two representations have similar
content, they are radically different when the organization and the centrality of
certain elements are different (Abric, 1991). We find these differences to be the
case between entrepreneurs (i.e., creativity) and non-entrepreneurs (i.e.,
business) in our entrepreneurship maps. To help illustrate the differences,
definitions were developed based on the core components of each model. For
entrepreneurs the primary two components were creativity and risk (followed by
determined, effort, managing yourself, and freedom). For non-entrepreneurs, the
primary components were business, wealth, startup, ownership, and risk
(followed by creativity, leader/boss and innovative). Hence, the analysis of the
social representation maps and their components allowed for the development of
the following definitions from both perspectives. Non-entrepreneurs see
entrepreneurship as a business that is innovative, owned, and started, creating
risk and wealth based on leadership and creativity while entrepreneurs see
entrepreneurship as the creative and risky process of freely managing yourself
through determination and effort. We believe that these two definitions are
divergent and represent a fundamentally different understanding of the term by
the two participant groups. Non-entrepreneurs view the concept as a type of
business or entity, while practicing entrepreneurs view it as a process or activity.
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Therefore, the two groups we studied have meaningfully different interpretations
of what entrepreneurship means which can impact their activities moving
forward. Based on these varied comprehensions of the term, there are several
potential implications from both a theoretical and practical standpoint that can be
explored.
This identification of the key conceptual elements in sense making of
entrepreneurship for each group leads to very different meanings of what
entrepreneurship represents for the different collectives. Our first interpretation
of these results indicates a potential misalignment between entrepreneurs and
non-entrepreneurs. The largest misalignment that we discovered and may
currently exist is the view that entrepreneurship is a business as opposed to a
creative process. Florida (2002a; 2002b; 2002c) has extensively documented the
importance of creativity as a driving force in regional economic growth.
Similarly, determination and effort (hard work) take a secondary role in the nonentrepreneurial representation indicating another potential misalignment. These
two elements along with creativity represent the primary components of Getley’s
(1979) definition of entrepreneurial drive. Entrepreneurial drive is “the
combination of creativity, hard work and determination to succeed …without
entrepreneurial drive there can be no progress” (Getley, 1979: 20-21). With this
perspective, drive is necessary for the progress of new ideas, improved
organizational health, the growth of wealth, and the introduction of new
initiatives to industry and commerce. If determination and effort are brought to
the forefront of entrepreneurial schemas, a rise in entrepreneurial drive could
result.
Moving to the foundations of both stereotypes and schemas, we arrive at
beliefs and attitudes. Fishbein and Ajzen (1975) purport that beliefs and attitudes
ultimately lead to intentions and subsequent behaviors. Collectively, nonentrepreneurs’ beliefs of entrepreneurship consisted of Business (T4), Wealth
(T8), Start-up (T10), Ownership (T5), Risk (T20), Creativity (T11), Leader/Boss
(T3) and Innovative (T17). Thus, according to TPB, their attitudes, future
intentions and actual behavior are dependent on these initial beliefs. Individuals
who developed beliefs on false foundations or premises possess divergent
attitudes leading to ambiguous intentions and behaviors. For instance, if a
determined and hardworking individual, who is creative and willing to take risks
in exchange for the freedom to manage oneself, has beliefs that entrepreneurship
is primarily about business, gaining wealth, starting a company, and so forth,
they may ultimately choose a different career.
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Our final research question addressed the general perceptions of
entrepreneurship. By determining and examining the general perceptions of
entrepreneurship (i.e., the central and peripheral concepts on the map) we are
able to identify the social or cultural values attached to entrepreneurship. A quick
examination of Table 1 illustrates the positive tone and admiration individuals
have towards entrepreneurs and entrepreneurial organizations. For example,
terms such as Courageous (T2), Intelligent (T9), and Innovative (T17) are
generally viewed as being encouraging and indicate that perceptions of
entrepreneurship are good. This supports the idea that those studied in our
research hold entrepreneurs in high regard, further enhancing their social and
cultural acceptance. These types of community attitudes help to establish
perceptions of a prominent and positive entrepreneurial climate (Liguori, Maurer,
Bendickson & Weaver, 2012), encouraging new ventures (Krueger & Brazeal,
1994) and leading to a higher rate of new business creation and endurance, which
in turn leads to a healthier economy (Baumol, 1990; Davidsson & Wiklund,
1997).
We believe that we have contributed with our research in several important
ways. To begin with, we helped to establish that there are multiple legitimate
definitions in the social consciousness for the term entrepreneurship. We found
that non-entrepreneurs and practicing entrepreneurs as a collective are different
in their understanding of this concept that has received so much attention in the
organizational sciences. Construct clarity is vital for researchers as they move
forward with entrepreneurship study. If further research can replicate our results,
an argument can be made that organizational researchers must be more specific
with the terminology they use when exploring entrepreneurial concepts. Second,
this work contributes to ongoing entrepreneurial research beyond reengaging in a
definition based conversation. The perceptions of this term are deeply embedded
in society. Through our qualitative study, we have unpacked these perceptions.
While other studies have made advances in this regard (e.g., Gartner, 1990),
theory continues to build on the shoulders of the giants before us and addressing
these perceptions is a continuous and evolving process by which we have built
upon. A final contribution of our efforts includes the novel application of a
seldom used theoretical perspective in the understanding of entrepreneurial ideas.
By advancing research using social representations theory, we demonstrate that
social representations can be seen as important precursors to other theoretically
important concepts including schemas, stereotypes, and the norms and attitudes
vital in the theory of planned behavior. By demonstrating how social
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representations could serve as an antecedent to these constructs, we help to
enhance their nomological space and give other researchers a way of
understanding how these theories may influence important outcomes.
PRACTICAL IMPLICATIONS
As research should fuel practice (Abrahamson, 1996), our work as scholars in
this realm has a variety of practical implications. At this juncture, we note a
change in language from non-entrepreneur to potential entrepreneur in
addressing concerns as well as practical advancement in entrepreneurship. While
we acknowledge that people may adapt if their beliefs do not match the actual
behaviors seen in the field, as indicated, we believe these misalignments may
result in potential entrepreneurs choosing the wrong careers by either pursuing a
bad-fit or dismissing a good-fit. In the case of non-entrepreneurs who dismiss
good fit, increases in business diversity is lost diminishing self-renewing
communities (Shapero, 1981). Ineffective information searches result from these
misalignments which may have detrimental impacts on the longevity of
entrepreneurial activity. In addition, the misalignments between entrepreneurship
reality and stereotypical entrepreneurship may lead to decreased satisfaction,
decreased productivity, decreased venture longevity, or lower venture creation
rates.
Therefore, it is important to recognize this misalignment and begin closing it
through social, educational and other initiatives. This in turn will aid in
satisfaction, productivity, motivation, and survival rates of new business
creation, the progression of new ideas, improved organizational health, the
growth of wealth, and the introduction of new initiatives to industry and
commerce. Furthermore, by decreasing this misalignment, the diversity of
entrepreneurs is also likely to increase as creative individuals begin to view
entrepreneurship as more than simply a business activity done by business
people. If creativeness becomes the stereotypical element of entrepreneurs and
potential-entrepreneurs alike, it is likely to raise aspiration levels for creative
people with limited business experience or knowledge. The increase in diverse
and creative individuals is likely to transfer into a diverse base of small and new
firms across a variety of sectors making communities more resilient and
enhancing their capacities to adapt to economic dislocations and technological
changes. If we continue to align the sense making and stereotypical views of
both groups, and more creative people view entrepreneurship as creative risk
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taking rather than as an encapsulation of business behaviors, appropriate
attitudes, intentions, and behaviors will follow.
Given these differences, we believe this research takes a leap forward and are
hopeful future research will continue to do so. Accordingly, we can begin to
identify the most important elements of entrepreneurship and shape awareness of
creativity through education systems. For young people, emphasizing the
creativity aspect of entrepreneurship is vital. “As attitudes take shape at an early
age, school education can greatly contribute to fostering entrepreneurial
mindsets, starting from primary school to the university level” (Raposo & do
Paco, 2010: 143). Young people can be influenced by teachers, professors and
career counselors, but these individuals do not typically demonstrate sufficient
knowledge of entrepreneurship (Henderson & Robertson, 2000). Complicating
matters further, although today’s young adults are the potential entrepreneurs of
the future, relatively little is known about their views on entrepreneurship
(Henderson & Robertson, 2000; Turker & Selcuk, 2009). If educators emphasize
the importance of creativity and self-managing, it is likely to influence students’
aspirations and entrepreneurial career choice. Having highlighted the
aforementioned theoretical, practical and educational contributions, we now turn
to some concerns about our work and areas of future research.
LIMITATIONS AND FUTURE DIRECTIONS
Our study presents certain limitations. Fundamentally, we were able to
assess only expressive and associative value of the elicited concepts regarding
entrepreneurship, but not symbolic value. These two criteria are generally
considered necessary, but not sufficient for establishing coreness of
representations. Conversely, symbolic value is the only criterion that is both
necessary and sufficient to establish coreness. Because the objective of this study
was to make a first attempt at uncovering the structure of the representation, we
focus our attention primarily on assessing the two latter criteria of centrality.
Symbolic value of the items is not assessed in this study as it would have
necessitated performing multiple research projects. Our research does not allow
for an unambiguous definition of the core elements, but it does give sufficient
data to sketch out the basic elements of the maps. Similarly, the nature of our
data collection limits our ability to make stronger assertions regarding our
results. We were able to tap social representations of student non-entrepreneurs
and adult entrepreneurs through a free word association process. However, by
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limiting the number of words and phrases to three, we limited the depth of
information that may have been provided by our research participants. Using this
technique, an assumption was made the most relevant or important terminology
would be derived from the data collection. It is likely that asking for a greater
number of terms and phrases or performing in depth interviews with our
participants could have yielded a somewhat different and perhaps deeper level of
understanding of the social representations we were studying. Finally, while
we’ve interpreted the misalignment between these groups based on our results,
we realize the potential for other interpretations. For example, perhaps
entrepreneurs are self-esteem enhancing and prefer to think out themselves as
creative rather than day-to-day business operators.
Future research regarding a better understanding of the social
representations of entrepreneurship could include several courses of action. For
example, it may be possible study different subgroups of non-entrepreneurial and
entrepreneurial participants to determine if there are different clusters that have
similar and opposing views of the concept. Based on this work, a typology of
their understanding may be developed that helps to flesh out the full nature of the
social representation based on more specific population demographics. Another
valid route to advance research in this area could include developing a process
model where non-entrepreneurs are studied as they transition into
entrepreneurship activities. This should provide even more enlightening results.
As people make the change, their views of entrepreneurship likely are altered by
their experiences and the subsequent social representations they hold as a group
will adapt as well. It is possible that the periphery elements will impact and alter
the core representation of the socially collective notion. Finally, it may also be
useful to collect data on other entrepreneurship related topics such as opportunity
identification, evaluation and exploitation in order to assess how their social
representations are similar or different to entrepreneurship. This could enhance
our understanding of the interactions of different these varying collective
concepts on individuals as they decide whether or not to pursue entrepreneurial
activities.
CONCLUSION
Although we acknowledge some commonality in the core topics, by
comparing non-entrepreneur and entrepreneurial models we are able to identify
differences between the groups helping us to argue that different segments of the
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population may indeed hold differing beliefs about the notion of
entrepreneurship. With this progress in identifying the differences in views,
we’ve filled a gap in the research literature as well as enhanced practical and
educational aspects of the field. We believe it is important to continue facilitating
a shift from the dominant entrepreneurship stereotype of business people doing
business things, to creative people doing creative things.
Keywords: entrepreneurship; social representations; role schemas; stereotypes
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MISSION, MINISTRY, & MARGIN: THE CASE OF
RESTORE MINISTRIES AND THE YMCA
Grady S. York
Belmont University
Mark T. Schenkel
Belmont University
Keith M. Smith
Doctoral Candidate, University of Georgia
ABSTRACT
The Restore Ministries case presents the story of a social entrepreneur,
Scott Reall, who successfully created Restore, a behavioral healthcare venture,
within the YMCA. Despite the initial collaborative success, Restore was at a
crossroad. Growth following a “ministry mindset,” a mindset in which the goal
was to meet everyone’s needs regardless of their ability to pay, had produced an
inconsistent fee structure, confusion among stakeholders, and branding
questions. It also created concerns over business model scalability and
sustainability. A key question was whether Restore and the Y were adequately
prepared to undertake Reall’s vision to the next stage of growth?
INTRODUCTION
Scott Reall, Director of Restore Ministries, sat alone in the somewhat
dimly lit, cavernous community room of the Green Hills YMCA Youth Center in
Nashville, Tennessee. The building was relatively empty this early hour in the
morning. Projected onto the empty white wall was the current version of a
strategic plan that was being prepared for the board of Restore Ministries
(Restore), a sponsored program of the YMCA of Middle Tennessee, a member
organization of the national YMCA. Reall was joined a few moments later by
Rebecca and Charity who served as Head Counselor and Head of Group
respectively, and by Victor Enzork, an outside management consultant engaged
to guide the Restore team in their strategic planning. Reall approached Enzork
eight months earlier and was frustrated by the fact that Restore had previously
commissioned three previous strategic plans for growth and saw no benefit from
any. Both agreed that the previous attempts lacked clear definition with respect
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to goal alignment between Restore and the YMCA, and failed to develop an
actionable growth plan that Restore’s staff could understand and support.
Over the last eight months, Reall worked closely with his program team,
senior managers of the Greenhills YMCA, and key executive staff of the
corporate YMCA of Middle Tennessee. Under Enzork’s guidance, the goal was
to develop a strategic plan that would capture Reall’s vision of hope and healing
for those “whose aches and longings run much deeper than the physical”
(Newman, 2008). He felt strongly that the steps which helped him overcome his
own spiritual and emotional struggles would also benefit others and was very
consistent with the notion of “wholeness” reflected in the YMCA’s emphasis on
mind, body, and spirit. Of great importance to Reall, was the ability for Restore
to build strong operational capabilities. Reall’s underlying hope was that the plan
would enable Restore to scale its efforts within the operations of the YMCA of
Middle Tennessee. Moreover, he believed that the process he followed could be
first replicated throughout the Middle Tennessee YMCA. Next, he hoped to
make it widely available through the YMCA’s national network. Longer term, he
envisioned Restore services being offered outside the YMCA system.
Despite all the analysis and preparation work that had been done to that
point, Reall still had one major concern. Reall believed Restore’s relationship
with the YMCA had always been one of the greatest resources toward fostering
its growth. Yet the very program growth Reall envisioned was now creating
confusion and straining operations to a level he felt was simply too much for
himself, as one person, to bear. Simply put, his intuition was that the relationship
between Restore and the Y was at an important crossroad. Enzork shared Reall’s
concern. He felt Restore had the potential to be a critical component in the
delivery of the YMCA of Middle Tennessee’s mission, particularly given its
‘hope for life’ initiatives. For both Reall and Enzork, the real question was what
should Reall do to take his vision to the next stage of growth given his enduring
desire to build Restore through the YMCA?
History of the YMCA i
The YMCA was founded in 1844. Farmer-turned-department store clerk,
George Williams, was troubled by the living conditions and hazards young men
confronted on the streets as industrialization drew them to the city. He and his
friends organized the first Young Men’s Christian Association (YMCA) in
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London to address this compelling social need that crossed rigid lines separating
English social classes.
By 1851, the YMCA reached the United States and volunteers ran early
programs. The first “student YMCA” was started in 1856 at Cumberland
University in Lebanon, Tennessee, and focused on the leadership development of
college students. During the same year in Cincinnati, the nation’s first-known
English as a Second Language (ESL) class was held to welcomed and engage
German immigrants newcomers. With the goal of giving young men moving to
cities from rural areas safe and affordable lodging, YMCA housing began in the
1860s with hotel-like rooms. The first YMCA buildings constructed with
gymnasiums opened in 1869, and by 1881 the term “body building” was coined
and exercise classes developed as predecessors to today’s fitness workouts.
During the late 1800s, the Y branched out through a number of initiatives
including: partnering with railroads to provide lodging and meeting space for
railroad workers, serving the Asian and Native American populations as America
expanded westward, and by developing summer camps. The Y also sought to
promote Christian character through speech, sportsmanship, and scholastic
achievement through the development of the Hi-Y club for high-school boys in
1889. The Hi-Y club served youth of all ages and ultimately became the “four
fronts” program. From these clubs, the now well-known sports of volleyball,
basketball, and racquetball were born. Early YMCAs created many programs to
make vocational and higher education widely available, especially to workingclass Americans.
The early 1900s were marked by a campaign emphasizing teaching
“every man and boy in North America” to swim in order to help youth feel safe
around water, develop kids’ problem-solving abilities, and bolster their selfesteem. Throughout World War I, the YMCA provided welfare services and
morale for the military. Similarly, the YMCA, along with five other national
voluntary organizations, founded the United Service Organizations for National
Defense during World War II, today known as the USO. Between 1922 and
1945, YMCA accommodations continued to expand, and served as residences for
well-known journalists such as Andy Rooney and Dan Rather, civil rights leaders
Malcolm X and Dr. Martin Luther King, Jr., novelist Jack Kerouac, and U.S.
Ambassador Andrew Young.
From 1960 to 1990, the YMCA advanced the civil rights movement by
becoming meeting places and rallying points, and by banning racial
discrimination in all YMCAs in 1967. The YMCA continued its commitment to
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your recreational sports, partnering with the NBA Players Association to create
the Youth Basketball Association (YBA) throughout the 1970s, with a continued
commitment to skill development and teamwork over winning at any cost. In the
1990s the YMCA continued to focus its efforts to the healthy development of
youth, as exemplified by conducting the first national Healthy Kids Day in 1992,
the nation’s largest health day for kids and families. Citing a rich history in
character development, the YMCA put forth four core values – caring, honesty,
respect, and responsibility – that became the cornerstone for the Y’s family
programs in the 1990s.
In response to several world crises — Sept. 11 (2001), Pacific Rim
tsunami (2004), Hurricane Katrina (2005), and the earthquake in Haiti (2010) —
YMCA services sought “to rekindle hope in the affected communities,
particularly among children and young people.” Taking advantage of community
and corporate partnerships, the Activate America (AA) program was launched in
2004 to inspire families nationwide to make healthier lifestyle choices. With the
help of the Centers for Disease Control and Prevention (CDC) and corporate and
foundation donors, the national YMCA provided seed funding to 117 Ys across
America for the signature initiative of AA, Pioneering Healthier Communities
(PHC). The YMCA of Middle Tennessee joined the PHC initiative in 2008.
Recognizing the success of the AA program and the PHC initiative, First Lady
Michelle Obama selected the YMCA as the venue to launch her “Let’s Move”
campaign against childhood obesity in 2010.
By 2011, the Y served 45 million people in 124 countries. In the United
States, there were more than 2,600 YMCAs with approximately 20,000 fulltime
staff and 500,000 volunteers in 10,000 communities serving more than 9 million
youth and 12 million adults. Its primary objective is the development of values
and behaviors consistent with Christian principles and focuses on the “spirit,
mind and body”. Notwithstanding its name, membership is not limited to
Christians. Serving people of all ages, religions races and backgrounds, the
YMCA was one of the largest community service organizations in the United
States. The Y of Middle Tennessee, over 137 years, grew to serve more than
332,456 people (nearly 1/3 children) annually in 33 community Y facilities
throughout the region.
Revenue models and sources of financial support varied for each local Y.
But, in general revenue was derived from program fees, membership dues,
community chests, foundation grants, charitable contributions, sustaining
memberships, and corporate sponsors. According to the International Health,
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Racquet & Sportsclub Association (IHRSA), when examined on a national level,
the revenue model was very reliant on membership dues with approximately
78% of all revenue coming from this source (IHRSA, 2003). In the membership
model, the member was permitted to use a number of fitness activities as well as
selected other services for a predetermined monthly fee or dues. The Y of Middle
Tennessee employed a membership model that used an Income-based Rate Scale
(IBRS), which offered reduced membership rates to individuals and families with
a total household income below $75,000 (“The YMCA of Middle Tennessee
Rate Scale,” 2012). Unlike the national percentage for membership dues, in 2011
the Y of Middle Tennessee received 54.7% of its revenue from membership dues
as indicated in Table 1.
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Table 1: YMCA of Middle Tennesseeii
Prior Three Years Total Revenue and Expense Totals Chart
Fiscal Year
2011
2010
2009
Total Revenue
$88,359,626
$81,821,168
$82,434,224
Total Expenses
$82,738,467
$79,923,174
$78,017,613
Prior Three Years Revenue Sources Chart
Revenue By Revenue Source
Fiscal Year
2011
Foundation and Corporation Contributions
Government Contributions
2010
2009
$0
$0
$0
$2,594,656
$3,619,567
$2,931,871
$11,254,010
$5,723,937
$8,323,457
$39,746
$81,213
$93,268
Program Service Revenue
$23,691,027
$22,823,270
$22,676,417
Membership Dues
$48,360,875
$47,394,098
$46,816,793
$272,073
$308,049
($35,122)
Special Events
$1,214,758
$770,511
$704,514
Revenue In-Kind
$2,052,766
$0
$0
$932,481
$1,100,523
$923,026
All Other Contributions, Gifts & Grants
Indirect Public Support
Investment Income, Net of Losses
Other
Prior Three Years Expense Allocations Chart
Expense By Type
Fiscal Year
2011
Program Expense
2010
2009
$71,649,443
$68,322,806
$67,549,335
Administration Expense
$9,542,272
$10,121,534
$8,749,531
Fundraising Expense
$1,546,752
$1,478,834
$1,718,747
$0
$0
$0
Total Revenue/Total Expenses
1.07
1.02
1.06
Program Expense/Total Expenses
87%
85%
87%
Fundraising Expense/Contributed Revenue
12%
15%
14%
Payments to Affiliates
Prior Three Years Assets and Liabilities Chart
Assets and Liabilities
Fiscal Year
Total Assets
2011
2010
2009
$158,332,942
$158,788,947
$164,174,310
Current Assets
$21,562,641
$24,287,085
$31,084,697
Long-Term Liabilities
$55,582,848
$60,071,899
$67,428,203
$9,289,135
$10,005,856
$7,322,023
$93,460,959
$88,711,192
$89,424,084
Current Liabilities
Total Net Assets
YMCAs across America offered a range of core services reflecting the
Y’s aim to be “an inclusive organization of men, women and children joined
together by a shared commitment to nurturing the potential of kids, promoting
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healthy living and fostering a sense of social responsibility” (YMCA, 2012). Of
course, the Y became widely known for its “gym and swim” activities. In
addition, the Y offered the following array of services in youth development,
healthy living and social responsibility:
Youth Development
 Child Care
 Education &
Leadership
 Swim, Sports & Play
 Camp




Healthy Living
Healthy Kids Day®
Family Time
Health, Well-being &
Wellness
Group Interests





Social Responsibility
Summer Food Program
Social Services
Global Services
Volunteerism & Giving
Advocacy
From Vision to Mission
Restore originally grew out of Scott Reall’s vision to help others with
addictive issues by participating in healing and personal growth. That vision
grew, in part, out of his own difficult journey toward freedom from addiction.
Reall was not only an accomplished athlete but had also achieved academic
success. During his time at Otterbein College in Westerville, Ohio, he played
varsity football, varsity basketball, and varsity golf. In 1976, he earned a
Bachelor of Science degree in Health and Physical Education. After college,
Reall nonetheless eventually turned to a number of unhealthy behaviors to
manage his feelings of loneliness and powerlessness. He had essentially hit rock
bottom a number of times, including two divorces and many broken
relationships. Reall eventually sought out the 12-step philosophy championed by
Alcoholics Anonymous in order to find freedom from this unhealthy lifestyle.
Working through the 12-step program over a number of months and starting to
regain control his feelings of loneliness and powerlessness, Reall joined the Y as
a means to improve his physical fitness. Not only had this declined but was also
an important part of his identity during healthier times.
Reall was eventually offered the opportunity join the YMCA of Middle
Tennessee as a Wellness Director in 1988. One day in the 1990s, while directing
the personal training of a woman at the Green Hills Y who was struggling to lose
weight, it dawned on Reall that she faced problems beyond what a simple fitness
regimen alone could accomplish. Following the death of her husband, the woman
described to Reall how she turned to food to deal with the resultant grief and
loneliness. She had gained 60 pounds. In Reall’s heart, he believed that
addressing these issues would require an entirely different approach. “I knew the
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best workout, the best nutrition plan, wouldn’t get to ‘why’ she was using food
for comfort” (Newman, 2008). Relating this observation to his experience
working with other wellness clients, as well as recalling his own personal
struggles, Reall was increasingly convinced that to improve the body also
required fully engaging an individual’s mind and spirit.
By 1994, then as a Senior Wellness Director, Reall was leading a
recovery support group at the Green Hills Y in Nashville. As a lay clinician, he
observed that by teaching individuals to change limiting facets of their life he
could help them realize their full potential. He believed that everyone deserved a
lifetime of hope, health, and happiness. His vision was to develop a powerful
faith-based curriculum that would ignite a process of lasting change in people’s
lives by combining his personal recovery experience with the YMCA’s heritage
of faith. That vision led to the development of Restore’s founding mission
statement which was “to actively strengthen our community by providing hope
and healing of Jesus Christ to individuals and families who are experiencing
life’s difficulties” (“Restore Ministries: Mission and Values,” 2010). Both the
vision and mission statements were rooted Reall’s values of hope, health and
happiness, giving back what Christ has given, meeting people where they were
regardless of circumstances (either personal or socio-economic). Reall believed
that the mission was consistent with the value the YMCA placed on providing
community-based programs “…promoting healthy living and fostering a sense of
social responsibility” (YMCA, 2012).
With a vision and mission in mind, Reall began to build Restore around
the 12-step model originally proposed by Alcoholics Anonymous (AA) as a
method of recovery from alcoholism (Alcoholics Anonymous, 2001). His model
consisted of group and individual sessions that provided education, support and
coaching in an environment that stressed confidentiality and accountability.
Specific struggles of group members were diverse and included anxiety,
depression, marital difficulties, financial problems, divorce, loneliness, alcohol
and drug abuse, sexual and food addictions, as well as others.
Locally, both Reall and the senior management of the YMCA of Middle
Tennessee recognized that Restore’s services extended the Y’s programs with
respect to a more holistic focus on spirit, mind, and body. The Y’s vision was “to
offer hope for life to people of all ages, faiths, races, backgrounds, and abilities,
regardless of their socio-economic circumstances” (“About the Y,” 2010).
Although it served primarily Middle Tennessee and Southern Kentucky, its
stated mission was to be a “worldwide charitable fellowship united by a common
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loyalty to Jesus Christ for the purposes of helping persons grow in spirit, mind,
and body” (“About the Y,” 2010). Both the vision and mission reflected its core
character values of caring, honesty, respect, and responsibility. In short, they
realized that the services reflected in Reall’s program represented the potential
for added value to Y members not only in terms of addiction recovery, but also
as a potential means for addressing life’s challenges in other ways.
Restore Ministries: Launch, Growth and a “Ministry” Mindset
“…to help others intentionally choose to overcome the inevitable
array of internal struggles we all confront in life and represented
by the human condition.”--Scott Reall
Reall and the leadership of the YMCA of Middle Tennessee interpreted
the growing interest as a reflection of the value of Reall’s work, a potentially
significant underserved community need that could be addressed. Based on
further collaborative discussions, Restore Ministries was founded formally in
2000 and recognized as its own service program within the Green Hills location
of the YMCA of Middle Tennessee. The program was designed with a focus on
behavioral health, which assisted members with “the inevitable array of internal
struggles”. Restore’s program complemented the Y’s community service
outreach by offering traditional behavioral health services that extended its focus
on a more holistic approach of mind, body and spirit.
At the outset, Restore’ consisted of Reall and an administrative assistant.
It served a single Y center and approximately 100 people with a budget of
approximately $90,000. Growth from that point forward was largely need driven
and organic. Specifically, growth efforts reflected the desire to make an
identifiable contribution to health and healing in the community with the purpose
of helping more individuals. Because expansion was predominantly organic,
programs also quickly expanded beyond the original scope of addiction recovery
services.
By 2005, service requests were coming in from a diverse group of people.
Some individuals living below what they believed was their personal potential
simply desired to explore personal improvement. Others felt they would benefit
from group or educational interventions. Yet a third group, with significant life
challenges required clinical therapeutic counseling but were hesitant to seek it
out through traditional means. For example, on Monday a parent would bring
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their child to an exercise class to “burn off energy.” That same child, previously
diagnosed with attention deficit disorder (ADHD), and his or her parent were
now able to receive the needed family counseling as well. On the other hand,
struggling with weight and self-esteem issues, a 30-year old man that recently
relocated to Tennessee sought help with adjusting to different life circumstances,
beyond a core physical fitness regimen. As one Restore supporter noted,
“Programs were developed wherever a need was identified or a service requested
and it seemed that little research was conducted regarding the financial viability
of new service offerings.”
In response to the growth in number and range of requests, Restore hired
an individual responsible for group and educational intervention, a licensed
clinical therapist, and a part time administrative assistant to handle the increased
demand for services. Early success was measured in terms of the number of
people served by Restore counselors, group program leaders and volunteers,
measures which reflected what might be labeled a “ministry mindset.” This
mindset was one in which the goal was to meet everyone’s needs regardless of
their ability to pay and emphasized reaching the masses at large. By the end of
2005, Restore staff consisted of four individuals serving 4 different Y centers and
over 200 people, with a budget of $200,000.
Without a formal marketing plan and primarily by word-of-mouth, Reall
began receiving referrals that resulted in the growth of the Restore program
beyond the Green Hills Y. This expansion took a number of forms. First, Reall
received inquiries from other locations inside the YMCA of Middle Tennessee
system. Soon he found himself travelling between Y locations throughout the
Middle Tennessee region. Reall’s efforts also gained the attention and interest of
others outside the YMCA of Middle Tennessee. Churches and other civic
organizations became interested in the value the program could bring to their
organizations. For example, one local church asked him to start and conduct a
recovery group on their behalf based on Restore’s recovery program. Other civic
organizations asked Reall to speak about his model to their memberships,
intrigued by the prospects of how his model might benefit their communities.
Second, there were requests for program expansion, outside of Middle
Tennessee, by various YMCAs across the United States. For example, because a
Tacoma, Washington YMCA staff member heard Reall speak at another YMCA,
he received a call one day from the Tacoma YMCA asking him to present his
program to its management, specifically services that would complement their
weight loss program. This eventually led to requests from Y’s in Richmond,
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Houston, Dayton, Cincinnati, and Omaha. Additionally, Reall received requests
from abroad and travelled to the Ukraine and Belize to deliver his program and
train staff.
The rapid growth in demand for Restore services worried Reall. He was
beginning to realize that in addition to being genuinely complementary to
existing Y services in their own right, there was also a certain convenience by its
coexistence with the Y that led to greater demand for Restore services than he
originally anticipated. People appeared more inclined to take advantage of the
services at the Y than if they had to go elsewhere. He worried that the “ministry
mindset” was threatening to overwhelm the sustainability of Restore’s resources.
Much like the mandatory care provided by emergency rooms, the gap between
those paying for services and those who could not afford to pay was growing
resulting in a short fall of revenue. While Reall realized the impact of his belief
that “no one is ever turned down because of the inability to pay”, he struggled
with the idea of charging for something that “God gave me”. Reall was also
realizing that program efforts weren’t as readily scalable as he originally thought,
in part because of this growing gap in payment but also due to a need to adapt
Restore’s program based on the needs of each location.
By 2010, the Restore had grown considerably in terms of clients and
employees (see Figure 1). Its staff had grown to include seven full time
employees and a plethora of volunteers serving over 20 different Y centers and
over 1,000 people, with a budget of approximately $500,000. The Mission
Statement was updated to read: To intentionally encourage, support and
strengthen individuals, youth and families with the hope and healing of Jesus
Christ in their Journey through life’s challenges. Service offerings had evolved
and included:
Family & Marriage
Counseling
 Individual
 Marriage/Family
 Adolescent
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Recovery Services



Support Groups
Therapy Groups
Advocacy/Sponsorship
Spring 2014
Personal Growth & Education



Career Counseling
Educational Groups
Coaching
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Figure 1: Restore Client and Employee Growth
2000 – 2010
The Journey to Freedom Series
Paralleling his efforts to launch Restore, Reall also worked toward
formalizing his program in the form of a book. Based on his own journey
through addiction and life change Reall penned Journey to Freedom. He was
familiar with several books and articles that came close to his idea of how to
initiate change but, were not quite complete from Reall’s point of view. Reall
thought back on the book Addiction and Grace (May, 1991) he read earlier
during his own struggles with addiction and his efforts to find the life “he really
wanted”. He knew he must first decide he wanted to change but, how? In his
quest to answer “how”, Reall discovered the book Changing for Good
(Prochaska, Norcoss & DiClimente, 1995) that outlined six well-defined stages
of change chief among these stages was contemplation. In his book Reall
recounted, “All of us seek a happy life, but many of us don’t know how to begin
to find it.” Recognizing that contemplation, or being prepared to change, was a
prerequisite to actual change, Reall guided readers through a thirty-six day
course to discover how, when, what and where change needed to occur in their
lives.
The book served three purposes. First, it created awareness of the Restore
program and Reall’s vision that through faith and a clearly defined program of
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action lasting change could be achieved. Second, revenues from the sale of the
book could be used to assist with program start-up expenses. Third, the book
played a crucial role as a delivery platform. Through a well-established
publisher, Thomas Nelson, Reall was able to gain access to marketing and
distribution networks that he could not on his own. The impact of the book was
readily apparent. Additional requests for the book came in and resulted in
Thomas Nelson publishing a second printing, a Russian translated version, as
well as requests for additional topics resulting in the following new books:
Journey to Life of Significance, Journey to Healthy Living, Journey to a New
Beginning after Loss, and Journey to Living with Courage (see Appendix A for
content description of these books).
Shifts in the Marketplace
While Reall was busy crafting programs and responding to what seemed
like an ever-growing tidal wave of request for services, an important shift was
occurring in the broader healthcare market around him. By the mid-2000’s,
wellness had emerged as a widespread focus. Wellness programming was
essentially defined as:
“A set of organized activities and systematic interventions, offered
through corporations/worksites, managed care organizations, and
governmental/community agencies, whose primary purposes are to
provide health education, identify modifiable health risks, and
influence health behavior changes” (Mulvihill, 2003).
Wellness evolved from a number of broad influences that reflected the national
interest in concerns over healthy lifestyles, obesity, changing family structures
and dynamics, changing diversity and aging of the U.S. population, particularly
the pressures on social programs associated with the retirement of the baby boom
generation.
One aspect that shaped the consumption of wellness services was
changing attitudes and preferences towards wellness services. While Reall was
aware that historically there had been an undercurrent of stigma associated with
mental health services, he was also aware that attitudes were changing. He
believed there was mounting evidence the preference toward wellness reflected a
growing cultural acceptance of behavioral based services. For example, the
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increased complexity and pace of modern living had made people realize the
importance of managing wellness as opposed to treating illness. In short,
wellness services were behaviorally based and focus treatment on the
individual’s ability to recognize and change behaviors that improve overall wellbeing through a variety of self-initiated, individual activities.
As he observed the escalation of healthcare costs including increased
insurance premiums and erosion of benefits, Reall joined the call of legislators
and the public alike to help control these costs. He was convinced that focusing
on improving wellness over treating acute illnesses would not only improve
overall health but would also result in reduced insurance costs for business and
healthcare costs in general.
Other related concerns on Reall’s mind revolved around issues that could
impact Restore but were beyond his control. A string of prominent natural
disasters (e.g., hurricane Katrina) across a number of states had placed additional
pressure on the already strained national economy and healthcare system. One
result of this was that there was a growing governmental push at all levels toward
the reliance on local faith and community based service organizations. A
complicating factor in this process was a push towards an electronic health
record (EHR) coupled with privacy concerns (e.g., need for HIPAA compliance)
and the increased costs that go with it. Technologically, wellness service
providers had been relatively slow to adopt the current customer trends in
technology. There were a number of reasons for this. First, despite the common
desire to connect clinicians and clients to provide a better continuum of care,
there were differences in business and treatment models, which was typical in
community and faith based organizations. Second, the sensitivity of behavioral
records in comparison to traditional health records only intensified concerns over
security, privacy, and personal information and had spurred the national debate
on electronic health records. As the need for services grew, and economic
pressures continued to trickle down to local levels, budgetary pressures made it
increasingly difficult for small communities and local social-service
organizations to integrate technology solutions for behavioral health services
without developing partnerships. These pressures also led to the need for service
providers to develop more sophisticated scheduling and billing systems. In spite
of these concerns, a widespread and growing belief was that increased access to
health tools allowed consumers to make better informed decisions about their
own health services.
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Although Reall was not as technologically aware as some, he was very
aware of impact of the economic downturn that began in late 2007 had on a
number of consumers. In particular, he was concerned about the impact of
joblessness on families and individuals seeking counseling services as well as the
decrease in their ability to pay. At a broader level, Reall observed the crisis in the
housing marketing and its resultant decrease in property tax revenue, a primary
funding source of local government services. Many school counseling services
were curtailed or eliminated, resulting in an increased need for community and
faith based programs. Filling this service void, community and faith based
organizations had to increase their philanthropic efforts, often diverting funds
that would otherwise go to services.
In his travels to various Restore program locations, Reall witnessed the
disparate impact of the economic downturn firsthand. To Reall, some geographic
areas seemed to be more impacted than others. For example, the Restore program
in Tacoma, Washington had received a $500,000 charitable donation to fund its
efforts while other areas saw a decrease in charitable giving. Consumers had
become more selective in the organizations to which they gave, while the number
of volunteers decreased as individuals experienced personal economic hardships.
Charitable contributions had begun to favor organizations with a track record of
successful programmatic outcomes and a proven fund raising plan. In addition,
many donors increasingly required the organization to have a 501(c)(3)iii
designation of charitable organization so that they could maximize the combined
social and tax benefit of such contributions. Also, the economic downturn
spurred the migration of some population segments (e.g., immigrants) that had
been historically economically disadvantaged into communities already suffering
from severe budgetary shortfalls. At home, Reall was not only concerned that
Restore and the YMCA of Middle Tennessee were experiencing these effects but
that other similar organizations were as well.
A Changing Competitive Landscape
The Middle Tennessee market for behavioral health wellness and
recovery services was served by for-profit, not-for-profit, and government
agencies. While government entities, large multi-state organizations, and
organizations specializing in similar niche services provided similar services,
they rarely competed directly with Restore for customers. Similarly, employee
assistance programs with wellness components had emerged, largely in response
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to increased insurance costs and the national push toward wellness. Faith-based
programs represented another significant group within the industry, though not a
single specific church or denomination dominated the industry. Given Restore’s
history and mission, Reall believed that Restore was positioned well for growth
in the not-for-profit sector of the broader industry given its specific focus on
faith-based programs.
Reall discussed his perspective with the Restore management team.
Enzork asked Reall to consider, “Was Restore actually positioned well?” “Do
you know who your competition is?” “Is there another organization doing what
you are doing?” With Enzork’s assistance, the Restore team began to consider
what other not-for-profit behavioral health, wellness and recovery services
organizations were operating in Middle Tennessee. The team wanted to focus
only on organizations that were faith-based programs that were not sponsored by
a single specific church congregation and excluded government or quasigovernment entities, large multi-state organizations as well as those entities
offering only specialized services.
As Reall began to look over the data, he quickly realized many new
entrants had come to the Middle Tennessee market which, in turn, gave potential
clients a plethora of choices. These new entrants were offering many services
that were in Restore Ministries’ current portfolio, and clients had the opportunity
to choose from a range of prices for these services. Looking more closely, Reall
and his management team recognized that the variety of services offered and
amount of fees charged were key factors in determining Restore’s prospects for
growth.
Reall and the Restore management team identified six different
companies in the Middle Tennessee region they believed were focused on the
same mission and target clients. Reall was beginning to understand that to
remain competitive, and indeed to grow, Restore would have to develop a
market strategy that had these competitors in mind. He considered the list of
competitors carefully.
Griefshare offered specialized group services with a particular focus on
clients grieving from the loss of a loved one. It typically partnered with
churches, providing programs through their existing ministries to their
membership. The direct cost for programs to church members was typically
zero, instead funded through church budgets. Griefshare's program extended
nationally, an aspect which offered the potential for reaching a large number of
customers through partner churches.
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Celebrate Recovery also offered specialized group services, though it
only served clients grappling with addiction recovery. It also partnered with
churches and provided programs through their existing ministries to their
membership. Individual member costs were typically funded through church
budgets rather than out-of-pocket for clients. The reach of Celebrate Recovery
extended nationally and internationally, an aspect which offered a large potential
client base through partner churches. Reall was aware through his own
experience that Celebrate Recovery’s services were found in more churches than
Griefshare though the actual number of people served was comparable.
Agape was a not-for-profit organization that served Middle Tennessee by
offering behavioral health services tailored to women that confronted maternity
and adoption difficulties. Counseling service fees were based on the ability to
pay, an outcome which was assessed on a sliding scale. Typically, such fees
ranged from $10 to $120. Reall felt confident that the focus of Agape would
remain limited to the Middle Tennessee area.
By contrast, the Babb Center served Middle Tennessee by offering
behavioral health counseling services to a wider range of customers. The Babb
Center’s leadership had not limited it to a specific target market, but rather had
elected to limit its range of services to counseling only. The fee structure at the
Babb Center depended clients’ ability to pay. Similar to Agape, Reall was
confident that the reach of the Babb Center would continue to be limited to the
Nashville area.
Other not-for-profit service providers such as the Refuge Center offered a
wide range of behavioral health services, a range which could be characterized as
more of a continuum of care aimed at addressing various life issues and
challenges. The Refuge Center served Williamson County, an area comprised of
a number of southern Nashville suburbs. Like others, the fee structure at the
Refuge Center was based on market rates for the area, rates typically hovered
around $120 per hour. However, the cost to the clients varied based upon the
ability to pay, with many clients having no ability to pay or as little as $10 per
service. Reall did not anticipate that the services of the Refuge Center would
grow beyond the southern portion of the Middle Tennessee area.
Daystar was another not-for-profit that served Middle Tennessee. Like
the Refuge Center, it offered a wide range of individual and group counseling
services, though its youth focus also led to the offering of a summer camp
program as well. As with other programs, revenue from fees in conjunction with
clients’ ability to pay ranged from $10 to $120 for group and individual
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counseling sessions. In addition, individuals would pay up to $650 for a week
long summer camp program, a service which was also based on the ability to
pay. Daystar’s primary target market was youth the Middle Tennessee area.
Though Reall realized similarities between Daystar and the Y of Middle
Tennessee, he did not believe Daystar would compete beyond its current level of
operations.
In addition to these six companies, a number of churches provided inhouse programs directly to their membership for free or a nominal cost. Such
programs had the potential to compete with organizations like Restore at some
level. However, because they were not really counseling centers with licensed
professionals, the economics of providing such services meant that churches
could rarely afford to provide the same level of care as professional programs.
Licensure and complexity of program costs coupled with compliance on any
significant scale were simply beyond the means of these organizations.
Clinical practitioners were highly valued amongst most of these
organizations because there was a limited pool of qualified clinicians whose
preference was to also work in an organization that was strongly mission driven.
Organizations that could attract and retain licensed clinicians would be at a
distinct competitive advantage over others. The importance of licensure was
intensified by the fact that some clients held preconceived biases against
counseling, a bias which was particularly aggravated in faith-based organizations
where there was often a lack of professionally trained and licensed clinicians.
Growth and the Restore “Brand”?
Over its 160+ year history, the YMCA had clearly established its brand
as a premier nonprofit community service organization located throughout the
world. Reall recognized Restore was a long way from having the brand
recognition of the Y. He was quickly becoming aware that the rapid organic
expansion was in part attributable to the Y’s widespread reputation and also led
Restore beyond the original scope of addiction recovery services. Thinking on
this, Reall began to ponder a number of branding challenges.
Externally, Restore’s marketing efforts were limited beyond its
association with the Y. Reall was concerned that the lack of a strong external
message, independent of the Y, had led to the failure to communicate the
evolution of the Restore service continuum to prospective clients outside the
traditional Y membership. As a result, the public perception, albeit inaccurate,
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was that Restore’s services were limited to addiction recovery services. Reall felt
this needed to be addressed sooner rather than later.
Given Reall’s past experience with recovery services he was also
concerned with the public stigma associated with addiction recovery. Could
potential clients be put off by the name 'Restore' because it was connected with
negative connotations associated with addiction recovery, he wondered?
Furthermore, Restore’s brand was also heavily associated with Christianity given
its foundational teaching material. Despite the interest to appeal more broadly,
this association to Christianity might lead the non-Christian public to perceive its
mission as exclusionary, a stigma that could ultimately limited its widespread
adoption.
Branding internal to the Y, similar to branding outside the Y, was
confused in part by growth in client numbers and part by the evolution of the
Restore program into a broader range of services. Though Reall based the initial
services on an addiction recovery model, it served a small portion of the Y
membership. The growth in the continuum of care reflected expanded behavioral
services that meet the needs of a greater portion of the Y membership, a shift
which aligned more closely with the Y’s spirit, mind, and body mission. First,
while the services became more complimentary, locations, facilities, customer
contact settings and processes changed very little. These limited observable
changes in operations concerned Reall. He was concerned the change in
Restore’s services was unnoticed by Y staff and membership and would
ultimately hurt any efforts to position Restore’s brand.
For example, Restore's services represented a very different type of
offering to the Y customer in that it was based on a continuum of personalized
behavioral health care (e.g., an individual counseling session) as opposed to a set
of services (e.g., an aerobics class) more generally targeted to a broad
membership base. In describing Restore’s impact on the Y services, Reall
wanted the Y to be known as “more than a gym and swim”. Recognizing that
neither he nor other YMCA administrators had ever fully discussed this change
with YMCA staff that provided Restore with much of their administrative
support, Reall was concerned that the YMCA staff did not fully recognize the
difference in approach. He believed this resulted in a lack of customer focus
coupled with insufficiently coordinated functional support to manage Restore’s
growing operations.
Second, but equally important, Reall believed the differences between the
Y’s revenue model based on broad membership fees and Restore’s model heavily
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reliant on fee-for-service resulted in confusion regarding funding needs for
Restore. While Restore had a fee for service funding structure, it was outdated
and subject to “oversliding” resulting in insufficient revenue to cover service
costs. Y management established a budget line item based on membership fees
from other programs to cover Restore services offered through the Y. The
shortcoming of this approach was that it failed to take into account the
differential costs of the variety of the actual services offered. In addition, it led
to a variation in funding support for Restore services across YMCA centers in
Middle Tennessee. Furthermore, the confusion surrounding the Restore service
model inhibited the development and use of technology such as simple online
registration and scheduling systems that were needed along with additional staff
to monitor and manage increasing growth.
A third branding issue facing Restore within the Y organizational
structure was employee working relationships. For example, the fact that
internal marketing teams and membership representatives did not always
recognize the differences in services between Restore and the Y led to ineffective
marketing materials and poor communication with existing and prospective Y
members. Similarly, as a result of the distance that emerged in the working
relationships, Restore did not capitalize on the fundraising and management
expertise available in the Y of Middle Tennessee.
Together, these factors resulted in inefficiencies and contributed to an
increased sense of confusion among staff that resulted in occasional lapses in
work quality and the increased potential for staff burn out. Feeling his own level
of frustration growing, Reall believed he had to find a way to utilize the
resources of the YMCA while building the brand of Restore.
A Plan for Growth at Restore
Restore appeared to be on its way given the significant client growth over
the past several years. While Reall was excited about the growth, it also
frightened him. As he thought about growth, he thought about challenges. He
turned to Enzork and his team to help put into words his concerns and create a
plan for growth.
Over the past eight months Enzork had worked with Reall and a team of
key program staff at Restore to develop an implementable strategic plan for
growth. The overarching goal was to present an actionable plan to facilitate the
building of solid operational capabilities that, in turn, would enable Restore to
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replicate its success in other markets. The strategic direction and goals included
in the plan were derived from the Restore management team’s response to its
understanding of what its stakeholders valued the most about the organization,
and current opportunities and challenges for offering a high quality system of
support in the community and within the Y of Middle Tennessee. The plan was
organized around a Balanced Scorecard framework. This framework attempted
to focus action and provide performance perspective by defining goals that
concentrated on four areas: client, financial, internal abilities, and learning and
growing.
Clients
The Restore plan first focused on its client goals. Restore’s goals
included increasing client market share, product and service attributes, and client
satisfaction. Specifically, Restore sought to increase its market outreach by
ensuring that its programs were available in all Middle Tennessee YMCA
locations and by extension, develop the capabilities to expand to the entire state
and beyond. Reall knew the Restore program could be successful outside the
Middle Tennessee and southeastern region and often referred to the weight loss
program in Tacoma, Washington as evidence, a program that came about simply
through word-of-mouth referral. Restore also sought to establish the Restore
brand within the Middle Tennessee YMCA, and then expand the brand outside
the YMCA organization. Table 2 summarizes the client goals.
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Table 2: Client Strategic Goals & Objectives
Goal 1: To increase our market outreach by insuring that our programs, our ministry, and services are available in all
Middle Tennessee YMCAs, and by that experience develop the capabilities to expand to the entire state, and beyond.
Objective
#
1
Objective statement
A minimum of one Restore service in every YMCA center within 2 years.
3
Create and implement with the YMCA a service-function organizational structure demonstrating three
distinct client service programs:
1) Counseling (behavioral health),
2) Group programs (wellness),
3) Publications/Materials.
Increase clients served through existing services.
4
Develop Restore Youth Program by 2015.
5
Create Spanish version of JTF program.
2
6
Increase clients served through new services.
Goal 2: To first establish the Restore brand within the Middle Tennessee YMCA, and then expand the brand outside the
YMCA organization.
A Restore “one-sheet” for internal and external audiences published by November, 2010.
1
2
3
Internal marketing campaign beginning in November, 2010, and ending in 2012.
Create and implement a Journey to Freedom program included as part of the YMCA membership.
Financial
The Restore plan then expressed its financial goals, an expression which
included an emphasis on stakeholder value. Reall in his vision of “no one is ever
turned down because of the inability to pay” knew that there had to be a balance
between those who paid and those who could not. Specifically, Restore sought to
increase and diversify revenue sources that were sustainable, optimize growth
opportunities, and provide for a professional learning community. Table 3
summarizes the financial goals. Table 4 presents the 2010 actual operating
performance and the projected operating performance for 2011-2015.
Internal Abilities
Restore’s plan next expressed its goals for internal operational
management and key process objectives necessary to deliver on its stated client
objectives. Specifically, Restore sought to develop organizational structure,
processes, and routines, capture accumulated organizational knowledge and
actual work activities that supported current programs and future expansion.
Reall truly believed that “God gave me” the Restore service approach and he was
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charged with the responsibility of discovering the best ways expand the reach of
Restore (Table 5 summarizes the internal abilities goals.)
Table 3: Financial Strategic Goals & Objectives
Goal: To increase and diversify revenue sources that are sustainable, optimize growth opportunities and provide for a
professional learning community.
Objective
#
1
Objective statement
2
Create and implement a service-function organizational structure demonstrating four distinct revenue
lines:
1) Fee-for Service: Counseling (behavioral health) & Group programs (wellness)
2) YMCA membership-sponsored: Group programs (wellness)
3) Publications/Materials
4) Grants and Donations
Increase third party payors as revenue source.
3
Increase total revenue from existing services.
4
Increase revenue from new services.
5
Maintain a balanced or surplus operating budget each year, 2011-2015.
6
Create individual budget plans for the seven YMCA centers to support Restore services provided.
7
Secure YMCA grants funding for Restore services in 7 centers.
8
Produce a fund raising and donor plan for Restore each year in concurrence with the YMCA association.
9
Apply for a specified number of foundation grants each year in coordination with the YMCA association.
10
Revise fee schedule for all services, including sliding scale.
Table 4: Restore Ministries Projected Operating Performance
Table 4: Restore Ministries Projected Operating Performance
Year
2010
2011
2012
2013
2014
2015
Projected Revenue Summary
Counseling
Groups Programs
Publications/Materials
Training/Consulting
YMCA Center Grants/Fees
Operating Revenue
$
$
$
$
$
$
130,672
21,458
4,560
2,400
187,512
346,602
$
$
$
$
$
$
159,322
53,456
5,928
3,600
187,512
409,818
$
$
$
$
$
$
192,792
73,631
21,956
5,400
187,506
481,285
$
$
$
$
$
$
234,105
109,727
42,164
8,100
187,506
581,602
$
$
$
$
$
$
370,452
162,956
79,198
12,150
187,506
812,262
$ 562,680
$ 235,220
$ 124,185
$
18,225
$ 187,506
$ 1,127,816
Donations/Grants
$
133,372
$
146,709
$
186,380
$
231,725
$
380,156
$
Total Revenue
$
479,974
$
556,527
$
667,666
$
813,327
$ 1,192,419
$ 1,718,511
$
$
$
295,019
22,394
317,413
$
$
$
362,669
27,673
390,343
$
$
$
410,986
31,651
442,637
$
$
$
463,495
39,718
503,213
$
$
$
563,326
57,477
620,803
$
$
$
706,568
81,630
788,198
In-Direct Operating Personnel
In-Direct Operating Expenses
Total In-Direct Operating Expenses
$
$
$
81,281
108,481
189,761
$
$
$
99,919
143,193
243,112
$
$
$
113,231
189,882
303,113
$
$
$
127,698
150,161
277,858
$
$
$
155,202
218,621
373,823
$
$
$
194,667
296,287
490,954
Total Operating Expenses
$
507,174
$
633,455
$
745,749
$
781,071
$
994,626
$ 1,279,152
$
(27,200)
$
(76,928)
$
(78,084)
$
32,256
$
197,792
$
Projected Expense Summary
Direct Operating Personnel
Direct Operating Expenses
Total Direct Operating Expenses
Projected Profit/Loss
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590,696
439,360
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Table 5: Internal Abilities Goals & Objectives
Goal: To develop organizational structure, processes, and routines, capture accumulated
organizational knowledge and actual work activities that support current programs and future
expansion.
Objective
Objective statement
#
1
All marketing material to be developed with YMCA marketing department.
2
3
4
Create and implement with a service-function organizational structure
demonstrating three distinct client service departments:
1) Counseling (behavioral health),
2) Group programs (wellness), and
3) Publications/Materials
Improve quality and consistency of group process by standardizing procedure
through a requirements checklist for group management.
8
Increase operational management capabilities by adding 1 full-time-equivalent
position (FTE), operations manager.
Perform organizational gap analysis by comparing current resources/staff
capabilities to new service-function structure requirements to determine program
support needs.
Write Restore Operations Manual.
Perform Restore-specific service data and demographics information collection to
be compiled in service report.
Identify, recruit and train bilingual counselors and/or volunteers for services.
9
Improved volunteer coordination program ready for implementation.
5
6
7
Learning and Growing
Lastly, Restore’s plan expressed its goals to create the potential to drive
future value and growth objectives through human resources including
knowledge, skills, training, organizational culture, employee well-being and
leadership. Specifically, through professional development and training Restore
leaders sought to develop and improve the knowledge, skills and abilities and
provide for the emotional/spiritual wellness of Restore staff and volunteers.
“Our staff, counselors and volunteers are Restore!” Reall was ever mindful of
this and, while he knew that much was being given by the Restore team to others,
the Team also faced “the inevitable array of internal struggles…represented by
the human condition” and a deliberate plan to encourage and improve individual
team members was needed. (Table 6 summarizes the learning and growing
goals.)
As Reall sat in the anteroom adjacent to the Y boardroom where he and
the Restore team were about to present their plan, he thanked Enzork for the
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coaching he had provided to himself as director of Restore and the guidance he
had provided to the entire Restore team. The Restore team had worked diligently
over the past eight months to assess their situation, analyze data and prepare
reports necessary to formulate a working strategic plan. Now, looking up at the
clock on the wall, Reall knew it was time for him and his team to make the case
and present Restore’s plan to senior management of the YMCA of Middle
Tennessee. He thought back. From the beginning as a single service offered by
the Y, later as a program, and now as a service center, Restore’s relationship with
the Y had always been one of the greatest resources toward fostering its growth.
Restore was a critical component of the YMCA of Middle Tennessee’s mission
and sought to build upon this relationship. Yet Reall wondered, was Restore and
the Y adequately prepared to undertake the Restore vision to the next stage of
growth, particularly given his enduring desire to build Restore through the
YMCA?
Table 6: Learning and Growth Goals & Objectives
Goal: Develop and improve the Knowledge, Skills and Abilities and Provide for the Emotional/Spiritual Wellness
of Restore Staff & Volunteers
Objective
Objective statement
#
1
Revise Restore staff orientation to include all changes resulting from the new Strategic Plan.
2
Develop five-minute education video on Restore service to educate all YMCA employees.
3
Conduct staffing needs assessment to determine training/development needs.
4
Conduct training for counselors, volunteers, interns and staff for all new programs.
5
Develop web-based group facilitator training programs.
6
Have all Restore managers/supervisors attend one professional and one management training class
per year.
Sensing Reall’s anxiety, Enzork looked up through the steam rising from
his ever-present cup of coffee and nodded assuredly to acknowledge the effort
Reall and his team had put into developing the plan. Yet, Enzork was also aware
that “A strategic plan without implementation is nothing more than an idea”, a
tenet of which he had often reminded Reall. Undoubtedly, the presentation by
Reall and his team would evoke questions and elicit ideas from both the
YMCA’s board and Restore’s board that would have a tremendous impact on
Restore’s future. And, unquestionably some components of the plan would
change. But, in the end, if the plan is approved, Reall and his team would have to
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do it. Reall stood, shook Enzork’s hand, walked into the boardroom and up to the
podium. The future was now about to begin.
Keywords: Social entrepreneurship, opportunity, growth, sustainability, business
model
APPENDIX A
Journey to Freedom Series: Book Descriptions*
Journey to Freedom
Change the things in life that keep you from fulfilling your purpose. Do you long
for change? Are you tired of going through life feeling defeated and stuck? Do
you want to discover your potential and realize your purpose in life? If so then
Journey to Freedom is for you. This guide helps you to change the things in your
life that keep you from fulfilling your purpose. It offers tools along with an
inspiring, practical, and hope-filled vision for permanently changing your spirit,
mind, and body.
Journey to Life of Significance
Take an eight-week journey that will lead from crippling low self-esteem to
the freedom of hope. Based on the Journey to Freedom Manual, this study
guide is about learning to break free from physical and emotional issues that can
lead to depression and a myriad of addictions. Like the other study guides in the
Journey to Freedom series, this study will focus on enhancing people's selfesteem, while helping them change the things in their life that keep them from
fulfilling their purpose and living their life to its fullest potential.
Journey to Healthy Living
1)
Stop being controlled by food and physical appearance. Based on the
Journey to Freedom Manual, this study guide is about learning to deal with lifecontrolling food issues, no matter what they are-weight loss, eating disorders,
food addictions, or body image issues. Like the other study guides in the Journey
to Freedom series, this study will focus specifically on body issues, while
helping people change the things in their life that keep them from fulfilling their
purpose and living their life to its fullest potential.
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Journey to a New Beginning after Loss
2)
Find hope and light in the face of the deepest grief. Based on the
Journey to Freedom Manual, this study guide is about learning to face life after
loss, whether that grief is the result of death, divorce, or other types of
separation. Like the other study guides in the Journey to Freedom series, this
study will focus specifically on living anew after a loss, while helping people
change the things in their life that keep them from fulfilling their purpose and
living their life to its fullest potential.
Journey to Living with Courage
3)
Learn to overcome fear and face life with hope. Like the other study
guides in the Journey to Freedom series, this study will help people change the
things in their life that keep them from fulfilling their purpose and living their
life to its fullest potential.
*Description provided by the publisher, Thomas Nelson at
http://www.thomasnelson.com/journey-to-freedom.html.
REFERENCES
About the Y. Locations. Restore. (2010). Accessed July 1, 2010, from
http://www.ymcamidtn.org/about.
Alcoholics Anonymous (June 2001). Alcoholics Anonymous (4th ed.).
Alcoholics Anonymous World Services. ISBN 1-893007-16-2. OCLC 32014950
International Health, Racquet & Sportsclub Association (IHRSA). (2003). Fair
Competition Annual Report. Accessed October 1, 2012 from
http://download.ihrsa.org/gr/faircomp.pdf.
May, Gerald G. (1991). Addiction and Grace. San Francisco: Harper.
Mulvihill, Michael (2003). The Definition and Core Practices of Wellness.
Journal of Employee Assistance, 4: 13-15.
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Newman, P. F. (2008). Restore Ministries Offers Hope and Healing at the Y.
Faith and Fitness Magazine, Feb/Mar. Accessed May 22, 2012
from http://www.faithandfitness.net/node/155.
Prochaska, J.O., Norcoss, J.C. & DiClimente, C.C. (1995). Changing for Good.
New York: Avon Books.
Restore Ministries. (2012). Operations Manual. Nashville, TN.
Restore Ministries: Mission and Values. (2010). Accessed July 1, 2010, from
http://www.ymcamidtn.org/locations/restore/restore_missionandvalues.aspx.
YMCA of Middle Tennessee Income-Based Rate Scale. (2012). Accessed on
October 15, 2012. http://www.ymcamidtn.org/join/income-based-rate-scale.
YMCA. For Community. (2012). Accessed on May 30, 2012.
http://ymca.net/about-us/.
NOTE TO INSTRUCTORS
This case tells the story of Restore Ministries through the eyes and efforts
of Scott Reall, a social entrepreneur in the behavioral healthcare industry whose
successful efforts in building Restore within the context of the YMCA, had led to
a crossroad. Both Reall and the YMCA were interested in building solid
operational capabilities that would enable Restore to replicate and scale its
success in other markets. To that end, Reall engaged a strategic consultant,
Victor Enzork, for the purpose of developing an implementable strategic plan for
venture growth. Despite the success of the collaboration to that point, growth
had been largely organic and reflected a “ministry mindset”. This mindset
prevented Restore from turning away any individuals requesting service
regardless of the ability to pay. It had also resulted in an inconsistent fee
structure, confusion among internal stakeholders, and questions surrounding
Restore’s brand in the marketplace. The combination of these factors plus a
rapidly changing, increasingly complex, and competitive industry environment
were creating concerns for Reall over the scalability and sustainability of the
business model upon which these collaborative efforts were based. Although
Reall believed Restore’s relationship with the YMCA had always been one of the
greatest resources toward fostering its growth, he was concerned that growth was
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now creating confusion and the relationship was at an important crossroad. For
both Reall and Enzork, the real question was what should Reall do to take his
vision to the next stage of growth given his enduring desire to build Restore
through the YMCA?
Key Issues and Discussion Points
At the heart of the case is the question of how or should social
entrepreneurs in a broader and highly mission driven organization leverage the
relationship with and resources of that organization to foster scalability and
sustainability. The entrepreneur has to consider his or her vision, values, and
goals, the alignment of each with those of the collaborating organization, the
relationship between market change, opportunity, and distinctive capabilities of
each organization, and the impact of these on the business model.
To prepare for his presentation to the Board of Directors, Enzork
recommended to Reall that the impact of a number of factors needed to be
considered in order to make an effective decision about structuring the future
relationship between Restore and the Y. Specifically, he advocated that Reall
needed to consider the self-sufficiency of the business model, resource and
infrastructure needs, and the impact of greater independence from the Y on
Restore’s ability to scale its operations. He also needed to understand how the
leaders at the Y were likely to react to the prospects of the diverse range of new
potential opportunities that could eventually lead to Restore’s growth and
scalability outside of the YMCA.
In order to evaluate the situation, the following major teaching questionsiv should
be addressed:
1. How do the vision, mission, and values of Restore Ministries align with
the vision, mission, and values of the YMCA of Middle Tennessee?
2. What opportunities for growth is Reall considering? Given the mission,
vision and values, what challenges does he need to consider?
3. What are Restore Ministries’ organizational strengths? Given the
mission, vision and values, do these strengths facilitate scalability?
4. What is the basis of the Restore Ministries’ business model? What are its
financial strengths and what are the potential barriers to the expansion of
services?
5. Evaluate Reall’s options for fostering Restore’s future growth. What
recommendation would you make to Reall regarding his vision to take
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Restore to the next stage of growth through the YMCA? Justify your
answer.
Potential Audience and Uses

1.
2.
3.
4.
This case is intended for use in graduate and undergraduate courses in
entrepreneurship and strategic management, particularly those with a
focus on corporate entrepreneurship, social entrepreneurship, and venture
growth management. It could also be used in healthcare management
courses, as well as in community-based seminars designed to support
practicing entrepreneurs and healthcare leaders. Enzork’s story is
intended to illustrate and serve as a foundation for students to utilize as
they seek to learn about entrepreneurship through the analysis of several
fundamental issues critical to the entrepreneurial process, including:
Vision, mission, and wealth valuation in social venturing;
The role of entrepreneurial activity within the context of a socially-based
corporation;
Assessment of entrepreneurial opportunity, particularly within a sociallyfocused context;
How to overcome challenges to collaborative efforts across ventures to
foster continued venture growth through new sources of emerging
entrepreneurial opportunity.
Suggested Teaching Approach

162
Because the case is comprehensive and its content reflects the complexity
and management challenges introduced when new organizations and/or
new combinations are created in the context of existing organizations, it
offers flexibility in terms of when or how instructors may elect to use it in
a course. For example, one teaching approach that lends itself well to
using the Restore case is to illustrate and familiarize students with
overarching concepts such as corporate entrepreneurship and
“opportunity” in a new venture creation course. Similarly, it could be
used to acquaint and have students begin to understand the process of
assessing entrepreneurial opportunity, particularly within a sociallyfocused context, by having them explore the relationships between
concepts such as vision, mission, opportunity, and wealth valuation in
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
social venturing in a social entrepreneurship, corporate, or a strategic
management course. Instructors with such teaching objectives may wish
to assign or focus a class discussion on questions 1-2 noted above.
A second teaching approach that lends itself well to using the case is to
have students examine the more central question of how best to structure
the relationship between a growing social-entrepreneurial venture in a
broader, highly mission driven organization. This question requires
students to consider distinctive versus collaborative competence, a
rapidly changing, increasingly complex, and competitive industry
environment, and cultural confusion among internal stakeholders. These
issues are particularly well suited for upper level courses, or in late stages
of these courses, when students have developed a stronger understanding
of the fundamental characteristics and principles of the entrepreneurial
process. Instructors following this approach would be advised to assign
questions 1-4 to students to prepare in advance so that in-class discussion
may get right to the evaluation of options posed in question 5 and student
recommendations.
Instructors may also wish to adopt alternative teaching approaches that
explore a number of potential side issues reflected in the case. For instance,
some instructors may wish to engage in a PEST, SWOT or TOWS analysis to
examine the relationship between changing environmental factors and the
viability of a business model. Others may wish to engage in a discussion of the
relationship between passion, creativity, and market analysis, with the goal of
having students consider how the need for a healthy level of business practicality
is essential in implementing one’s career passion effectively.
Outside or Supplementary Readings
Brinckerhoff, P. C. (2000). Social Entrepreneurship: The Art of Mission-Based
Venture Development. New York, NY: John Wiley & Sons.
Brinckerhoff’s book lays forth essential steps for not-for-profit business
development in the mission-driven organization. He describes how a social
entrepreneur skilled in traditional business competencies such as marketing, cash
flow analysis, property management, and information technology can enhance a
charitable organization’s mission capability. Practical applications for innovation
and competition in the not-for-profit sector are discussed.
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Collins, J. C., & Porras, J. I. (1996). Building Your Company's Vision. Harvard
Business Review, 74(5), 65-77.
This article examines the vision of successful companies and how others
might build a strong core vision. It describes vision as the “guidance about what
core to preserve and what future to stimulate progress toward.” However, even
with this definition, vision is often over used and misunderstood. A conceptual
framework is presented that assists organizations in articulating a vision around
two major components of core ideology and envisioned future.
Corner, P., & Ho, M. (2010). How Opportunities Develop in Social
Entrepreneurship. Entrepreneurship: Theory & Practice, 34(4), 635-659.
The authors present the results of an exploratory study of multiple case
studies to assess the process of opportunity development in social entrepreneurial
ventures. Opportunity development is viewed as a process that grows and
advances an idea to create solutions that have an immediate social value to
societal problems. Within this process the authors describe the concept of
innovation in a social venture. Further discussion is given to explain how
innovative ideas are manifested, often thorough the interaction of multiple
individuals. The rational/economic and effectuation approaches to opportunity
development are discussed.
Dees, J.G. (1998). The meaning of “social entrepreneurship.” Comments and
suggestions contributed from the Social Entrepreneurship Founders Working
Group. Durham, NC: Center for the Advancement of Social Entrepreneurship,
Fuqua School of Business, Duke University.
This article offers an explanation for the meaning of social
entrepreneurship first by examining the historical development of the concept. It
presents a description of various theories that have contributed to social
entrepreneurship and distinguishes the difference between Business and Social
Entrepreneurs. The article concludes by defining the role social entrepreneurs
play as change agents in the social sector.
Flamholtz, E.G., & Kurland, S. (2005). Strategic organizational development,
infrastructure, and financial performance: An empirical investigation.
International Journal of Entrepreneurship Education, 3(2): 117-142.
This article presents an organizational development model and examines
the relationship between the model and financial performance. It assesses the
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relative importance of an organization’s “infrastructure” as a determinant of
financial performance, the extent to which the development of an organization’s
infrastructure is related to (causes) “organizational growing pains,” and the
extent to which organizational growing pains are related to financial
performance. Each of these areas is of particular concern to entrepreneurs and/or
entrepreneurial companies lacking well developed infrastructure and, as a
consequence, typically experience a variety of “growing pains” (see also
Flamholtz, E.G., & Randle, Y. (2007). Growing pains: Transitioning from an
entrepreneurship to a professionally managed firm. San Francisco, CA: John
Wiley & Sons, Inc.).
Kaplan, Robert S. and Norton, David P. (1996). The Balanced Scorecard:
Translating Strategy into Action. Boston, MA: Harvard Business Press.
This book examines strategic planning in a balanced framework to assist
organizations in moving from ideas to action and obtaining feedback about
strategy. The importance of aligning strategic initiatives with mission and vision,
linking strategic objectives to metrics and improving feedback and learning are
stressed. Four primary categories of measures are presented: financial
performance, customer perspective, internal business processes, and learning and
growth - a balanced approach.
Osterwalder, A. & Pigneur, Y. (2010). Business model generation: A handbook
for visionaries, game changers, and challengers. Self published.
This book provides insights into business model types and business
modeling as a dynamic process. It also describes a range of practical business
model innovation techniques.
http://www.ymca.int/who-we-are/history/
This website is the official site of the confederation of National Councils
of YMCAs around the world. For those seeking to know more about the YMCA
in general, this site provides a global view of the YMCA and its history.
http://www.ymca.net/about-us/
This is the official website of the YMCA in the U.S.; the Y is comprised
of YMCA of the USA to learn more about the more than 2,600 YMCAs with
approximately 20,000 fulltime staff and 500,000 volunteers in 10,000
communities across the country, site provides additional detail.
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http://www.ymcamidtn.org/about
Readers should visit this web site to discover more about the mission and
operations of the YMCA of Middle Tennessee.
http://www.ymcamidtn.org/locations/center.aspx?CenterId=27
This web site can be helpful toward familiarizing readers with both
Restore Ministries and the broader YMCA context in which it began and
operates.
Role of the Authors


166
Restore Ministries of the YMCA of Middle Tennessee first came to the
attention of the lead author through a conversation with the Dean of the
College of Business Administration (COBA) at Anonymous (for blind
review purposes) University in the spring of 2009. While discussing a
previous experience in which a graduate MBA strategic management
class was engaged in a planning project with a local enterprise, the Dean
informed the lead author that he had received a request from a board
member of the YMCA of Middle Tennessee to consider how the COBA
might assist one of the Y’s fastest growing programs, Restore Ministries,
in developing a strategic plan for future growth. After a series of
meetings between the Dean, members of the Y executive team and
Restore’s Director, Scott Reall, the Dean agreed to consider ways that the
COBA might provide a value-added service to Restore Ministries and
thereby to the YMCA of Middle Tennessee as they commenced a new
community initiative.
Accordingly, the Anonymous Graduate School of Business at
Anonymous University agreed to engage with Restore Ministries and the
YMCA of Middle Tennessee in a strategic planning initiative with
specific focus on actionable objectives and plan implementation with the
lead author as Project Director. Given the detailed nature of the plan and
the amount of market/industry research necessary, the project duration
exceeded the normal course schedule which necessitated that a project
team of graduate students be formed that would work on the project as an
out-of-class assignment. The final Restore Project Team consisted of five
members including the lead author, program assistant and three graduate
students. One of the graduate students, (Anonymous Author 2), is also a
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
co-author on this case. Two of the three graduate students that worked on
the project did so as an independent study and received graduate course
credit. The pseudonym “Enzork” is used throughout the case to represent
the lead author in his role as project director working with Reall to
develop the Restore Ministries strategic plan.
Both primary and secondary sources of data were utilized in the
development of the case. Following an eight month period of analysis
and research, a strategic plan was formulated. That plan served as the
basis for the case presented here. The case was also developed in part
from the historical information, descriptions, data and analyses
conducted. This process included market research, personal interviews
with key staff and board members, surveys of primary stakeholders, the
collection of data through public domain internet cites as well as
government statutory filings. Graduate student team members were
assigned specific research tasks. To capture additional historical
information and to provide a more personal description of the early days
of Restore, the lead author also conducted follow-up interviews with
Reall and several key members of his staff. The information collected
directly from Reall was then supplemented by information from broader
industry-related and regional secondary sources of information. In
compiling the final case story, the authors took steps to ensure the
accuracy of the historical account and establishment of the timeline for
key events in the case. These included having key members of the
Restore and Y team review and provide feedback on the case, as well as a
multiple source reconciliation effort (e.g., web site, IRS filings, State
Attorney General filings, etc.).
i
Adapted from http://www.ymca.net/history/.
ii
Adopted from http://givingmatters.guidestar.org/NonprofitProfile.aspx?OrgId=1811
iii
Organizations described in section 501(c)(3) of the IRS code are commonly referred to as charitable
organizations. For further information, readers are directed to
http://www.irs.gov/charities/charitable/article/0,,id=96099,00.html.
iv
A full written analysis of these questions is available to instructors upon request from the lead author.
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ENTREPRENEUR’S PERSPECTIVE
The Entrepreneur’s Perspective section of JBE will provide an opportunity for
current practice to meet current thought, providing insight into what stimulates
and drives successful ventures. We look to encourage and foster a free and
constant exchange between entrepreneurs, the general public, and those
researching and educating the next generation of entrepreneurs.
UNDERSTANDING COMMUNITY ENTREPRENEURSHIP
BUILDING: A TWO-YEAR REFLECTION ON
TAMPA BAY 6/20
Brent Britton, William Jackson, John Morrow,
Marvin Scaff, Daniel James Scott and Rebecca White
Founders of the Tampa Bay 6/20 initiative
TWO YEARS
Two years have passed since the Tampa Bay region first dedicated itself to
building a stronger entrepreneurial ecosystem. Two years of narrowing a
direction. Two years of focusing the community’s efforts. Two years of
advancements for our entrepreneurs.
We didn’t start from scratch, mind you, it just felt like it.
Fred Wilson of Union Square Ventures said “geographies matter, because at the
end of the day, building companies is about people, and you need a density of
people – and capital – to create startup hubs.”
Our geography has its plusses. Tampa Bay is top 20 in population and media
rankings, we have more students enrolled in higher education within a 2 hour
drive radius than half the states in the US, and our financial services cluster is
referred to as “Wall Street South” – the largest in the state of Florida and 20th in
the nation in terms of domestic employment.
Our geography also has its challenges. The Tampa Bay MSA is top 20 in
population and media rankings, yet is home to less than 50 homegrown private
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companies with revenues in excess of $100MM and only a dozen homegrown
public company headquarters.
And then there was the infighting.
“You can’t do that, we already do that (or were planning to).”
“I already own the [fill in the blank] space.”
“If you start something, you are now my competitor.”
And then there were the problems. With students graduating and leaving. With
limited access to capital. With information being owned and protected by just a
few sources.
Things simply had to change.
CHANGE AGENTS
Brad Feld, of Foundry Group and author of Startup Communities, says that
“building entrepreneurial community takes at least a half dozen entrepreneurs
that are committed to provide leadership over 20 years.”
Makes sense, assuming entrepreneurs are willing and able to dedicate themselves
to this leadership with consistency. However, we wanted entrepreneurs to step up
that have not only committed themselves to entrepreneurship by having started at
least one company, but have also committed themselves to the future of the
community by having demonstrated their dedication to supporting academia, as
well.
The later is important because this discussion started at the universities,
specifically in discussions between students at the University of Tampa and USF
St. Petersburg. They said that felt excluded from conversations regarding the
future of their community.
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Fortunately for them, there were already entrepreneurs readily available via the
entrepreneurship programs at these institutions, and they – we – took this as a
call to action.
We started as six.
1. Rebecca White, Entrepreneur & Entrepreneurship Center Director at the
University of Tampa
2. Daniel James Scott, Entrepreneur & Associate Director of the
Entrepreneurship Program at USF St. Petersburg
3. Marvin Scaff, Entrepreneur, Technologist & Advisor for the
Entrepreneurship Program at USF St. Petersburg
4. John Morrow, Entrepreneur & Entrepreneur-in-Residence for the
Entrepreneurship Program at USF St. Petersburg
5. William Jackson, Entrepreneur & Director of the Entrepreneurship
Program at USF St. Petersburg
6. Brent Britton, Entrepreneur, Technology Lawyer & Adjunct Professor for
the Center for Entrepreneurship at USF Tampa
On 20 June 2012, we launched a community initiative called Tampa Bay 6/20
with the support of 13 regional support organizations. Tampa Bay 6/20 was
named in part for Brad Feld’s challenge and in part for the launch date.
TAMPA BAY 6/20
The overarching goal of the Tampa Bay 6/20 initiative is to increase the number
of net new scalable startups in Tampa Bay by developing homegrown talent –
defined quantitatively as net new job creation – and capital – defined
quantitatively as net new equity investment.
To accomplish this goal, we determined that our community had to clarify a
vision and mission, highlight local success stories, facilitate discussion, provide
resources for companies to locate talent and capital, and band the players
together.
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How did we go about attempting to accomplish these tasks? In three ways:
1. Talking points
2. Leadership (clarity, time and buy in)
3. Resources
It is difficult enough to look out a quarter, let alone a year. Twenty years is
almost unfathomable.
Where would we find a vision that was audacious enough? How would we define
a plan that was reasonable enough?
These are difficult questions to answer, particularly when just starting. So, for
many, we punted the ball down the field. However, for mission, goals and values
we became laser focused.
Mission: Build a stronger startup ecosystem in Tampa Bay.
Goals: Increase net new job creation and net new equity investment.
Values: One, actually. Everyone is included.
With these defined, we were able to do the real work of leading the community
down the path to success. Much of this work was acquiring buy-in.
From organization to organization, person to person, we went and sold our
mission to whomever would listen. Most of the population doesn’t understand
entrepreneurship, nor do they understand what startups need from a community,
so this was no small task.
Last, and certainly not least, we went about “mapping the entrepreneurial
ecosystem.” We specifically decided not to literally map the geography, as that
would have excluded programs that traveled, or were not location specific. This
task was the first attempt of its kind in the region. We had to index everything,
develop a framework to categorize and display the information, and ensure that it
is always up to date and relevant.
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CHALLENGES
Roadmap: Brad Feld’s book is a great read, particularly as we began
compartmentalizing what needed to be done. However, it is not a roadmap. And
we needed a roadmap.
Buy-in: Active buy-in was and is still slow. Infighting still remains. Traditional
economic development still has a stronghold over the region.
Infrastructure: In 2013, the six-county Tampa Bay area was home to ~120,000
startups and another ~90,000 potential new businesses being explored at any
point during the year. In stark contrast, we averaged just 19 startup events per
month according to StartupDigest, our region’s Small Business Development
Center contributed to only 130 business starts, and our three incubators served
less than 100 clients total.
STEM education: On one hand, we have more students enrolled in higher
education within a two hour drive radius than are enrolled in more than half the
states in the union. However, for every opportunity for our students to get a
graduate degree in any of the STEM fields, there are six times the number of
programs to earn an MBA.
Investment capital: We are also woefully under-represented in
PWCMoneyTree’s Venture Capital report, in the Inc 5000 and on AngelList.
RESULTS
We’ve made it two years.
More importantly, what have we been able to accomplish, specifically?
Buy-in: 24 regional organizations and over 200 entrepreneurs have pledged their
support for the plan. Another 600 plus engage on a daily basis in our Facebook
group, actively discussing the area’s ecosystem.
Map: We’ve developed the broadest and accurate ecosystem map ever compiled,
including community events, resources, companies and organizations. We’ve
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also provided the first detailed index of capital and talent resources for the
region.
Leadership: The core team has facilitated discussions with groups and
organizations across the area, become central media contacts for a positive
message regarding the ecosystem, and help recruit talent and capital to the area.
EEP CONFERENCE
Just shy of our two-year anniversary into this journey, the organizers of the
Entrepreneurship Education Project Conference invited a panel to discuss the
entrepreneurial ecosystem, including moderator Daniel James Scott and panelist
Marvin Scaff (John Morrow and Rebecca White were also present in the
audience).
We had an opportunity to frankly discuss the issues and opportunities we have,
and get feedback from others around the country regarding their own
communities. It was an honest exchange.
Our assessment? Tampa Bay is behind where we should be based on other
regions, but moving in the right direction. General consensus is that we’ve
focused our community’s efforts effectively and quicker than might be expected.
That being said, if you are interested in learning more, we encourage you to visit
our website at http://tampabay620.com to learn more. We also encourage you to
copy our efforts for your community and provide us feedback about what is
working for you.
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