Motivation and emotion/Book/2019/Entrepreneurship motivation

Entrepreneurship and motivation:
What motivates entrepreneurship?

Multimedia presentation (3 min)

Overview

One of the most essential factors for successful entrepreneurship is developing a strong passion (Obschonka, Moeller & Goethner, 2019). The entrepreneurial process happens when people decide to pursue opportunities (Shane, Locke & Collins, 2003). Some studies have investigated entrepreneurial motivation on a single phase of business development process specifically venture initiation, growth or exit (Murnieks, Klotz & Shepherd, 2019). Entrepreneurship involves the aspects of personal and financial risks when deciding to create a business venture. Individuals determine engagement in entrepreneurial activity due to different motivations (Zwan, Thurik, Verheul & Hessels, 2016). These differences in motivation can be identified between positive 'pull' factors and negative 'push' factors that influence peoples' entrepreneurial behaviours (Zwan et al., 2016). Some 'pull' motivations may include the desire or need for achievement, independence goal and social development. Some 'push' motivations may include unemployment risks, pressure from family or peers and dissatisfaction with present situation (Zwan et al., 2016).

Figure 1. New business ventures/ideas can develop entrepreneurial behaviours.

Figure 2. Depression can cause lack of motivation

Despite the potential benefits of becoming an entrepreneur, it has been recognised as one of the most challenging of human mental activities consisting of higher orders of performance such as motivation, confidence, persistence, resilience, management, creativity and innovation (Louie, 2016). Entrepreneurs are often publicly viewed as successful and iconic individuals however, neglect of one's own mental health can impact business functioning and motivation (Louie, 2016). Previous studies have shown that the entrepreneur population have greater experiences of suicide, depression and anxiety which has been important in realising mental illness as a universal health concern (Louie, 2016). This chapter examines the motivations behind entrepreneurship by discussing relevant psychological theories and research to help identify effective strategies to prevent mental health challenges and enhance motivation.

Focus questions

• What types of motivation and theories can help explain entrepreneurship?
• How does motivation influence entrepreneurship?
• What are the psychological, social and motivational challenges?
• What strategies can be used to prevent mental health problems and improve motivation?

Types of motivation

What is motivation?

Motivation can be defined as a process that involves an individual’s intensity, direction or purpose and persistence in achieving a goal (Ncube & Zondo, 2018). Motivated individuals are more likely to endure with a task sufficiently to attain a desired outcome (Ncube & Zondo, 2018).

Intrinsic

Intrinsic motivation is defined as when an individual acts without external rewards (Zimmerman & Chu, 2013). Intrinsic motives may include performing activities or tasks to attain personal satisfaction or pleasure (Hennessey, 2010). This type of motivation occurs from a positive reaction towards a certain task such as passion, interest, curiosity or a challenge potentially delivering positive outcomes (Grant & Berry, 2011). Certain behaviours and attitudes are commonly established by internal motivations of the individual entrepreneur (Khan, Biswas & Ahmed, 2009).

Extrinsic

Extrinsic motivation is defined as performance of behaviour that is dependent on achieving an outcome that is separable from the action itself such as performing a particular task to receive a financial reward (Legault, 2016). Individual motives in business ventures are diverse and can contrast for different people. These can be situational or external factors ranging from job loss, death of family member, to developing an idea, product or service to be introduced to the market (Mayo, Helms, Becherer & Finch, 2002).

Push and pull motives

“Push” (intrinsic) motives are the elements of necessity in which entrepreneurs are pushed or forced to start new businesses in order to overcome negative external forces and “pull” (extrinsic) motives are attractive reasons as to why entrepreneurs decide to start businesses (Silva, 2010).

Case Study 1. A study investigated start-up and growth (intrinsic) motives of small and medium scale enterprise owner entrepreneurs. Interviews were conducted through a narrative analysis of "storytelling" approach. Findings reported that the entrepreneurs were motivated by a combination of "push" and "pull" motives during the start-up phase of their business while "pull" motives were prominent at growth stage. Based on evidence of growth, motives and business outcomes, three types of entrepreneurs were identified: Entrepreneur type I - Individual is motivated for achieving growth of venture for satisfaction of personal/family goals. Evidence revealed that low to average level of growth in entrepreneurs had a higher retirement preference sooner in business. Entrepreneur type II – Individual is motivated for achieving growth to enhance opportunities to engage in the type of the work or operational aspects of the business where the venture was highly dependent on technical competencies of the entrepreneur and focuses centrally on success of operational aspects. Low to average level of growth in this type were had higher preferences to remain in the enterprise long-term. Entrepreneur type III - Individual is motivated for achieving growth due to likeness towards doing business and accomplishing success of the business. Entrepreneurs achieved high level of growth and had higher preferences to remain in the business long-term due to likeness of doing business and success of the business however not revolved around operational aspects (Silva, 2010).

Case Study 2. A study conducted a survey with 255 participants with planned business start-ups. Three prominent factors were reported to motivate people in pursuing business activity: self-realisation and self-satisfaction, the possibility of higher earnings and independence in decision-making. Results demonstrated factors that hamper one's business start-up involved lack of experience, lack of capital and risk of failure. No dissimiliarities were reported between men and women regarding motives and barriers (Staniewski & Awruk, 2015).

Traits of an entrepreneur

Entrepreneurs tend to hold different character traits than managers or employees. The major character traits are:

• Opportunistic trait
• Innovative trait
• Self-confident trait
• Proactive and self-motivated trait
• Visionary with flair
• Willingness to take greater risks and live with even greater uncertainty

(Čížek, 2012)

Motivation Theories

Maslow's need theory

One of the early theory of motivation was created by a psychologist named Maslow. In his theory of needs, he states that the central motivation of people is to satisfy a diverse group of needs which can be categorised in hierarchy of importance (Čížek, 2012). Figure 4 highlights Maslow's need theory sorted in a pyramid structure corresponding to level of importance of each need category. There are five categories ranging from bottom (most basic needs) to the top (more complex needs): Physiological needs - basic physical requirements, Safety - security, health and resources, Love/Belonging - social and emotional relationships, Esteem - appreciation and respect, Self-actualization - personal growth, fulfillment of potential, exploitation of talents and capabilities, self-awareness. Individuals must usually satisfy lower needs to move up to fulfill more complex needs.

Figure 4. Maslow's Hierarchy of Needs

Entrepreneurs' drive and determination originates from high self-motivation and desire to achieve in economic goals (Burns as cited in Čížek, 2012).

Entrepreneurs tend to have stronger inner need for achievement of goals and tasks compared to regular managers or employees. The entrepreneurial journey can be described as lonely and without many people beside the individual for motivation and encouragement. Thus, self-motivation and determination is critical in the journey to success. Studies have suggested that maintaining or creating enjoyment or passion throughout entrepreneurship can enhance one's determination. Entrepreneurs often do what they enjoy, not usually due to the force or pressure coming from others and therefore one of the main motivator in Maslow's hierarchy of needs theory is self-actualization (Čížek, 2012).

McClelland's need for achievement theory

McClelland's need for achievement theory was formulated in the 1950s and he argued that high need achievers are more likely to engage in creative and innovative tasks requiring future planning and responsibility for task outcomes compared to low need achievers (Collins, Hange & Locke, 2004). McClelland also highlighted that high need achievers have greater preferences of incorporating skills and effort to perform tasks, clear feedback on performance and openness to moderate challenges or risk (Collins et al., 2004). McClelland asserted that entrepreneurial positions require these characteristics than other types of positions (Collins et al., 2004).

Self-Determination theory

Self-determination theory (SDT) is a theory of human motivation, development or growth and wellness (Al-Jubari, Liñán & Hassan, 2019). SDT posits that motivation is a fundamental factor that involves direction, energy and persistence of activation and intention (Deci & Ryan, as cited in Al-Jubari et al., 2019). SDT asserts that individuals have natural motivation to learn knowledge and develop new skills. SDT argues that there are three aspects of self-determination:

First aspect: Psychological needs - autonomy, competence and relatedness that are key components in optimal functioning and psychological growth.

Second aspect: The distinguishment between intrinsic and extrinsic motivation whereby intrinsic motives relate to personal interest and extrinsic motives relate to one's value system.

Third aspect: Social environment - can be identified as supportive or non-supportive environment. Social-contextual factors to satisfy the three basic psychological needs will enhance autonomous functioning, persistence, performance and wellness. Social-contextual factors that prevent satisfaction of these psychological needs can cause disruption to autonomy, poor performance, lack of persistence and poor wellbeing (Al-Jubari et al., 2019).

Vroom's Expectancy value theory

Expectancy theory (Vroom, 1964) outlines three antecedes that motivate people to apply effort to achieve goals and results (Hsu, Shinnar & Powell, 2014). These are expectancy, instrumentality, and valence.

Expectancy is an individual's belief that applying effort will result in high performance.

Instrumentality describes the belief that a particular performance is significant in reaching a goal or outcome.

Valence is the evaluation of goals and outcomes (positive, neutral or negative valence). For example, if the outcomes are positive or attractive, instrumental in accomplishing other goals, then the entrepreneur will be more motivated (Hsu, 2014).

Other theories

Incentive theory

Incentive theory explains that individuals are motivated to act due to the presence of external rewards. For example, entrepreneurs may be motivated by a combination of incentives such as flexibility, income, or prestige (Staniewski & Awruk, 2015).

Drive theory

Drive theory explains there is an internal need (for example, for achievement or autonomy) that creates the power to motivate an individual to start a new venture, which as a result lessens the resulting tension of planning and carrying out performance to achieve specific goals and tasks (Staniewski & Awruk, 2015).

Quiz time - Part A

Which of the following theory states that self-actualization is one of the main motivators for entrepreneurial behaviour?

	Incentive theory
	Self-Determination theory
	McClelland's need for achievement theory
	Maslow's hierarchy of needs theory

What type of motivation is described as occurring from positive reactions towards a task and brings about individual satisfaction or pleasure?

	Extrinsic motivation
	Achievement motivation
	Incentive motivation
	Attitude motivation
	Intrinsic motivation
	Competence and learning motivation

Psychological challenges

Figure 5. Mental Health and Well-Being matters.

Mental Health and Well-Being

Mental Well-Being (MWB) has been a significant field of research in entrepreneurship. The World Health Organization (WHO) defines MWB as both the absence of mental illness and the presence of well-being, living up to an individual's potential, positive coping and adaptation, productivity, and community engagement (Freeman, Staudenmaier, Zisser & Andresen, 2019).

Common mental health problems may arise during entrepreneurship including but not limited to:

• Bipolar Disorder
• ADHD
• Addiction
• Depression
• Anxiety

Case study 3. A self-report survey was used to examine five psychiatric conditions among 242 entrepreneurs and 93 comparison participants. Results found that mental health differences directly or indirectly affected 72% of the entrepreneurs in the sample, including 49% of participants with a personal mental health history and family mental health history among the 23% of asymptomatic entrepreneurs. Entrepreneurs reported higher occurrences of depression (30%), ADHD (29%), substance use (12%), and bipolar disorder (11%) than comparison participants. Thirty-two percent of entrepreneurs having two or more mental health problems and 18% three or more mental health problems (Freeman et al., 2019).

Social challenges

Social support/networks

Social support groups consist of primary support from family and secondary support from peer or reference groups, friends and colleagues (Sahban, Ramalu & Syahputra, 2016). Having social support is beneficial in assisting potential entrepreneurs in new business ventures or operational aspects of businesses. Support systems are the building blocks for social and psychological integration of entrepreneurs into society (Sahban et al., 2016). An individual's support network may determine potential and varying performance and outcomes.

Motivational challenges

What hinders motivation?

• Lack of knowledge
• Risk of failure
• Lack of confidence
• Lack of capital
• Complicated regulations e.g. registration and business activity
• Civil
• Commercial
• Economic
• Taxation legislation and financial reporting
• Accountability

(Staniewski & Awruk, 2015)

Strategies

How to enhance mental health and well-being

The following examples are suggestions to assist in improving mental health and well-being:

• Psychotherapies: Cognitive behavioural therapy (CBT) - It works to enhance emotions and functioning. CBT aims to identify and test maladaptive and dysfunctional imaginations and assumptions. Studies have reported CBT's effectiveness on alleviating anxiety and depression in different patient populations (Mohamadia, Bagheri, Hashemi & Sani, 2018).
• Mindfulness activities - Mindfulness meditation has been increasingly implemented into mental health interventions to treat depression and anxiety (Wielgosz, Goldberg, Kral, Dunne & Davidson, 2019).
• Physical activity - Incorporating regular physical activity and exercise can be very beneficial for health, physical and psychological well-being of an individual. Lack of motivation can cause struggles in maintaining exercise especially due to high demands of stress. Thus it is important to find time to keep active and healthy (Teixeira, Carraça, Markland, Silva & Ryan, 2012).
• Healthy diet - Nutrition has been implemented in behaviour, mood and the pathology and treatment of mental illness such as depression and anxiety (Owen & Corfe, 2017).

Increasing entrepreneurial motivation

• Goal setting - personal or professional goals, short or long term goals - realistic for achievement.
• Self-monitoring - regulating and monitoring behaviour, performance, outcomes and social factors
• Action planning - planning of actions to be taken to achieve a specific goal/s
• Implementation intentions - Create goal intentions to direct effective goal attainment, behaviour and performance

(Hardcastle et al., 2015)

Quiz time - Part B

Which of the following is a motivational challenge?

	Risk of failure
	Too much knowledge
	Plenty of capital

CBT has been beneficial for treating mental health issues such as depression and anxiety.

	True
	False

Conclusion

There are various motivational theories and evidence from research that have been used to explain the entrepreneurial processes and individual motivations behind many enterprise start-ups and ideas. Understanding the relationship between entrepreneurial behaviours and motivation and potential consequences that comes with entrepreneurship such as mental health and well-being will assist in further research and implementation of effective strategies and/or solutions to preventing this problem and enhancing mental health and motivation for entrepreneurs.

See also

Entrepreneurship (Wikipedia)

Depression and motivation (Book chapter, 2010)

Achievement motivation (Book chapter, 2011)

Passion and well-being (Book chapter, 2019)

High-risk business motivation (Book chapter, 2015)

Stress reduction (Book chapter, 2013)

Social support and achievement (Book chapter, 2011)

Work motivation and work satisfaction (Book chapter, 2011)

Theory of goal setting and task performance (Book chapter, 2014)

References

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External links

Support links:

Beyond Blue (Website)

Headspace (Website)

LifeLine support (Website)

Mental health foundation Australia

Other helpful links:

TED talk: The puzzle of motivation - Dan Pink

TED talk: Be The Warrior Not The Worrier: Fighting Anxiety & Fear - Angela Ceberano

TED talk: There's no shame in taking care of your mental health - Sangu Delle

TED talk: The psychology of self-motivation - Scott Geller

TED talk: The power of an entrepreneurial mindset - Bill Roche