MODULE 8.3

Modern Approaches to Work Motivation

Person-as-Intentional Approaches

VIE theory and equity theory may seem cumbersome because of their heavy reliance on the person-as-scientist model and, in particular, the concept of perfect rationality. But they share another characteristic as well. Both assume that individuals are intentional in their behavior. Other motivation theories arose at the same time as equity theory and VIE the- ory that placed less emphasis on the person as scientist and more emphasis on the notion of intentional behavior.

Goal-Setting Theory

The most representative of the person-as-intentional approach is goal-setting theory as proposed by Locke and his colleagues (Locke & Latham, 2002). Unlike need, equity, and VIE theories, goal-setting theory has endured and evolved into a mature and comprehen- sive approach to work motivation. Thus, even though it arose in the “classic” period for motivational theories, it has become a distinctly modern theory.

The notion of a goal as a motivational force has been well established (Locke, Shaw, Saari, & Latham, 1981; Ryan, 1970). Austin and Vancouver (1996) present a detailed history of the concept as well as a framework that suggests that, one way or another, any coherent description of motivated behavior must include goals. It has become a very popular motivational construct. Between 1950 and 1999, “goal setting” appeared in the title or abstract of approximately 1,800 psychological articles. Since 2000, it has appeared almost 1,500 times. Locke (1968) was one of the first to adapt the general con- cept of goals to work motivation, and one of the most comprehensive descriptions of the theory appears in a book by Locke and Latham (1990). In a subsequent paper, Locke and Latham (1996) pointed out that it does not require much investigation to establish the centrality of goals in everyday life. Without

prodding, people will readily express their actions in terms of a “purpose”: You take a course in order to prepare for a career; you take a job in order to explore an occupation; you go to the gym in order to improve your general fitness or a specific muscle group. These purposes can also be thought of as intentions or goals. It is this notion of purposefulness and intentionality that is unique to goal-setting theory.

FIGURE 8.2 A Diagram of Goal Theory

Person-as-intentional approach Motivational approach that assumes that individuals are intentional in their behavior.

Goal-setting theory Theory proposed by Locke and colleagues in which the general concept of a goal is adapted to work motivation. In this approach, a goal is seen as a motivational force, and individuals who set specific, difficult goals perform better than individuals who simply adopt a “do your best” goal or no goal at all.

A representation of goal-setting theory appears in Figure 8.2. Research on this basic the- ory has been supportive. Most studies show that specific, difficult goals lead to higher lev- els of performance, assuming that the individual has accepted the goals. For a student with a cumulative GPA of 3.0, a goal of achieving a GPA of 3.3 in the next semester would likely be a specific, difficult goal. This is true both within subjects (i.e., you will perform better if you set a more difficult goal than an easier one) and between subjects (individ- uals who set difficult goals perform better than individuals who set easy goals). There is also strong support for the notion that individuals who set specific, difficult goals perform better than individuals who simply adopt a “do your best” goal or no goal at all (Locke & Latham, 1990). Recent research (Wiese & Freund, 2005) demonstrates that goal diffi- culty is a critical ingredient to both performance and satisfaction. If a goal is not difficult, one will achieve lower levels of performance and be less satisfied with the fact of meeting that goal.

This model makes a distinction between goal acceptance and goal commitment. Goal acceptance implies that a goal has been assigned. Goal commitment is broader and can include not only assigned goals but self-set goals as well. In fact, as we will see shortly, when the individual is free to revise assigned and accepted goals, they can become self-set goals, thereby transforming what was acceptance into commitment. Most recent versions of goal-setting theory have concentrated on the concept of commitment (Mitchell, Thompson, & George-Falvy, 2000).

Goal-setting theory identifies the mechanisms, or intermediate states, by which goals affect performance. Locke and colleagues (1981) proposed that goals have the effect of “directing attention and action (direction), mobilizing energy expenditure or effort (effort), prolonging effort over time (persistence) and motivating the individual to develop relevant strategies for goal attainment (strategy)” (p. 145). Another important fac- tor is the feedback loop between knowledge of results and the intermediate states between goal commitment and performance. This feedback connection makes the theory much more dynamic by showing that as the individual evaluates his or her performance, intermedi- ate states may be changed. For example, if an individual falls short of a specific, difficult goal (e.g., to get an A on a term paper), he or she may concentrate harder on library research to the exclusion of other leisure activities (direction), increase the number of hours spent reading course material each week (effort), start the term paper sooner next time (persis- tence), or take advantage of the instructor’s office hours for guidance on the paper (strat- egy). If the individual does one or all of these things, then he or she is eventually more likely to meet the difficult goal of completing the term paper in time to polish it and make sure it qualifies for a high grade. Tuckey, Brewer, and Williamson (2002) presented evi- dence suggesting that not all people seek feedback equally. They found that individuals who might be classified as “defensive” and interested in projecting a positive self-image

Feedback loop Connection between knowledge of results and the intermediate states that occur between goal commitment and performance.

Control theory Theory based on the principle of a feedback loop that assumes that an individual compares a standard to actual outcome and adjusts behavior to bring the outcome into agreement with the standard.

are less likely to seek feedback. The notion of a feedback loop is both simple and power- ful: A feedback loop broadens goal-setting theory from a “snapshot” theory of a single action or sequence of actions into a richer consideration of not only present but also past and future actions.

This feedback loop is associated with what has come to be known as control

theory. Control theories assume that an individual compares a standard (in this case the goal) to actual outcome and adjusts behavior to bring the outcome into agreement with the stan- dard. Having accepted the contribution of goal-setting theory, Mitchell and colleagues (2000) identified a number of practical issues that still need to be addressed:

● Should goals be related to quantity or quality of performance? The answer seems to be that quantity and quality are related such that when high quantity goals are set, the quality of performance declines. In order to prevent such slippage, it seems best to set both quality and quantity goals rather than one or the other.

● Should goals be related to process or outcomes? Process goals refer to how work is done. Outcome goals are related to the actual level of production. The conclusion seems to be that process goals may be more appropriate for complex tasks, as these may require a great deal of learning. If the task is relatively simple, outcome goals will lead more quickly to higher performance.

● How should goals be set? The three major methods for setting goals are to assign them, to ask individuals who will receive the goals to participate in setting them, and to ask individuals to set their own goals. The emerging consensus seems to be that participative goal setting is most effective, although assigned goals can also be effective if they are “sold” rather than simply dictated. In Module 8.4, however, we will see that cultural issues may come into play as well.

● How many goals should be set? The answer to this question seems to be that mul- tiple goals are acceptable but that they should be examined closely to make sure they are compatible (e.g., a goal of increasing production by 10 percent would be incom- patible with a goal of decreasing overtime by 10 percent). It may also be wise to assign weights or priorities to multiple goals, since some are likely to be more important than others. Pritchard (1995) has developed a method for increasing motivation and performance (ProMES) that incorporates such a weighting scheme. We will examine ProMES in greater depth in the last module of this chapter.

● How difficult is a difficult goal? There is no good answer to this question. Difficulty can be determined by comparison to an individual’s typical performance or by com- parison to the performance of others. Generally, a difficult goal would be one that could be achieved by no more than 10 to 20 percent of the people attempting it or by an individual only 10 to 20 percent of the time that he or she attempts it. The critical issue here is that the individual needs to view a goal as possible; otherwise, he or she will not accept it.

● Should rewards be contingent on goal accomplishment? The conclusion seems to be that when goals are of medium difficulty, rewards are appropriate for goal accomplish- ment. If the goals are very difficult, the individual should be rewarded for partial goal attainment; otherwise, the goals themselves may become unattractive over time. It might also be appropriate to increase the bonus or reward as the individual gets closer to the difficult goal. It appears that if rewards are given on an all-or-nothing basis (i.e., no rewards unless complete goal accomplishment occurs), easy goals result in underper- formance and difficult goals result in quitting. The best result seems to come from incremental rewards linked to increments of achievement (much like piece-rate systems).

● When should individual goals be used and when should group goals be used? Mitchell and colleagues (2000) suggest that the answer depends on the nature of the

task. If the task requires interdependence and cooperation, then group goals might be appropriate, whereas if the work is independent and workers are sole contribu- tors, then individual goals may be more appropriate. Once again, however, we need to introduce the concept of culture. In collectivist cultures, it may be difficult to work within an individual goal-setting program; to do so may even be viewed as offensive.

Challenges for Goal-Setting Theory

The changing nature of work will present new challenges for the continuing development and relevance of goal-setting theory. Locke and Latham (2002) have depended heavily on laboratory and field research for the development of their theory. Historically, a great deal of that research involved single contributors working on relatively simple tasks, but because today’s workplace is increasingly complex and team-based, in order to adapt the theory to the new work environment, the research design needs to include more complex cognitive work. In addition, Locke (2001) acknowledges that research efforts should be directed toward integrating variables such as knowledge and skill into the model.

Some researchers have begun an ambitious program of looking at the effect of goal set- ting on complex cognitive tasks (Atkins, Wood, & Rutgers, 2002; Wood, George-Falvy, & Debowsky, 2001). These research designs include some very relevant cognitive tasks, such as conducting automated literature searches on the Internet and examining the effect of the form of feedback on decision making. This is exactly the type of research that can help goal-setting theory remain relevant.

Levels of Explanation in Goal Setting

When Locke introduced goal-setting theory, it was presented as a relatively simple

way to increase performance by recognizing a very human characteristic that seemed to be miss- ing in other theories: intention. But Locke and Latham (1996) wisely make the point that simply identifying a goal to which a person may be committed does not fully explain the individual’s behavior. They suggest that goal-setting theory is just a first-level explanation of behavior. Goals are seen as the most immediate antecedents to behavior. But the ques- tion of where goals come from remains. Locke and Latham hypothesize that goals may very well derive from higher-order concepts such as values or motives. These would be second-level explanations of goal-setting theory. They give the example of a person who has a goal to become CEO within 15 years of joining the company, a goal deriving from a motive of ambition. They also invoke the notion of the Type A personality. (We will see in Chapter 10 that a Type A personality, among other characteristics, seeks to accomplish more and more.) The Type A person is likely to set multiple and difficult goals, particu- larly when competing with others. Still a higher order, or third level, of explanation would investigate where motives or values originate. As you will recall, Maslow suggested that motives were inborn. All three of these levels describe an influence on action or behav- ior, but at increasingly higher levels. As you can see in Figure 8.3, needs influence motives, motives influence goals, and goals influence performance. As Locke and Latham (1996) point out, the closer the level of explanation is to the behavior in question, the stronger the connections. A recent meta-analysis (Payne, Youngcourt, & Beaubien, 2007) made an interesting discovery: Goal orientation predicted that a person would achieve work performance above and beyond what could be predicted from knowing the cognitive abil- ity or personality profile of the person.

The notion of levels of explanation leads us to examine other current theories of work motivation. As you will see, goals and goal setting play an important role in these theories. In some senses, the theories we will now consider are actually second-level explanations of behavior in the context of goals and goal setting. One way or another, they all include goals.

Control Theories and the Concept of Self-Regulation

Self-regulation Process by which individuals take in information about behavior and make adjustments or changes based on that information. These changes, in turn, affect subsequent behavior (e.g., strategies, goal commitment).

In the goal-setting model presented above, we pointed out the feedback loop between the actual results of behavior (i.e., performance and goal achievement) and the intermediate states. Control theory is based on the principle of a feed- back loop. A simple example of a feedback loop is the thermostat in your home. When the temperature increases, the thermometer reading rises, and when it reaches a set point, it signals the thermostat to turn the heating system off. When the temperature drops below a certain level, the thermostat once again signals the heating system to bring the heat back on until the set temperature is achieved. The essence of a thermostat, or any control system, is the feedback loop. The system revolves around discrepancies; in the case of the room tem- perature, the discrepancy is between the

actual temperature of the room and the thermostat setting. Figure 8.4 presents a simplified view of a control model.

The feedback loop in goal-setting theory deals with the discrepancy between actual goal accomplishment and the goal to which the individual is committed. Locke and Latham (1996) suggest that if the individual falls short of the goal, intermediate states will be influenced. It is also possible that an individual might replace the goal with an easier one (or negotiate with a supervisor or manager to make the goal easier). But this is just the tip of the iceberg with respect to work behavior in its richest form. Individuals have multiple goals, some assigned and some not assigned. In addition, the relative importance of these goals can change overnight based on shifting orga- nizational priorities. Individuals can make more progress on some goals than oth-

an interesting discovery: Goal orientation predicted that a person would achieve work performance above and beyond what could be predicted from knowing the cognitive abil- ity or personality profile of the person.

The notion of levels of explanation leads us to examine other current theories of work motivation. As you will see, goals and goal setting play an important role in these theories. In some senses, the theories we will now consider are actually second-level explanations of behavior in the context of goals and goal setting. One way or another, they all include goals.

ers, and they feel more or less confident about the likelihood of achieving some goals rather than others. All of these complications introduce another concept into the motivational mix: the concept of self-regulation. Vancouver (2005) has written an excellent historical review and critical analysis of control theories for the interested reader. Cervone, Shadel, Smith, and Fiori (2006) presented a detailed review of the relationship between personality and self-regulation.

Self-regulation is compatible with control theory. In its simplest form, self-regulation means that individuals take in information about behavior and make adjustments based on that information, just as the thermostat takes in information and makes adjustments. The only difference is that the thermostat doesn’t feel discouraged or depressed when the tempera- ture in the room drops. It never asks: “Is the temperature perhaps set too high? Should I adjust the setting?” It simply responds to whatever the setting is. But humans have bad days when they lose confidence in themselves and question the goals they have accepted or set for themselves. The complexity of the workplace suggests that, rather than a simple feed- back loop, there are actually many feedback loops that are arranged in hierarchies. The per- son receives information about performance, abilities, and organizational expectations and, as a result, makes changes in behavior, experiences differing emotions, and may even change his or her self-image (i.e., may become more or less confident in his or her abilities or the likelihood of accomplishing a

goal). These changes, in turn, affect subsequent behavior (e.g., strategies, goal commitment). Porath and Bateman (2006) suggest several specific self- regulatory tactics that one can use to improve performance. These include seeking feedback as a way of developing skills and task mastery as well as proactive behavior that seeks

constructive change rather than accepting the status quo. Thus, according to self-regulatory theory, one can increase both work motivation and work performance by engaging in strate- gies such as seeking feedback and engaging in constructive change. It is an active and dynamic process, not a passive or stoic one.

The Concept of Self-Efficacy in Modern Motivation Theory

You can probably recall occasions when you were not feeling very confident of accom- plishing a goal (e.g., getting a good grade on a midterm exam). This feeling of confidence (or lack thereof) has been labeled self-efficacy by Bandura (1986), and it is playing an increasingly important role in most modern theories of work motivation. Self-efficacy is defined as the belief in one’s capacity to perform a specific task or reach a specific goal (Bandura, 1997). This is different from the broader notion of self-esteem, which is the pride (or lack thereof) in who one is as a human being, often boosted by the satisfaction of having accomplished a difficult task. Self-esteem has a social aspect to it to the extent that we experience increased self-esteem when we gain the respect of others. Like moti- vation generally, and goal setting more specifically, the construct of efficacy and self- efficacy has been extremely popular with psychological researchers.

Recently, there has been a spirited debate in both the scientific and popular press about whether the pursuit of self-esteem is good ���or bad. Some see it as natural and essential ���for emotional well-being (DuBois & Flay, 2004; Pyszczynski, Greenberg, Solomon, Arndt, & Schimel, 2004), while others (Crocker & Park, 2004; Sheldon, 2004) see it as a potentially destructive force, partic- ularly when it is sought directly rather than enjoyed as a consequence of effective performance. As an example, seeking to enhance one’s self-esteem through the fail- ure of others (see our discussion of poker players [Harper, 2005] in a win–lose situ- ation in the next module) might be effec- tive in the short run, but ultimately may lead to depression because the individual may have so much of himself or herself invested in winning that the results of losing can be emotionally catastrophic (Crocker & Park, 2004).

According to efficacy theory, coming close to winning will motivate some people to try harder next time.

Self-efficacy relates more specifically to our confidence in our ability or in the likeli- hood that we will be able to successfully complete a difficult task. In a comparison of the effects of self-esteem versus self-efficacy, Chen, Gully, and Eden (2004) found that self- efficacy beliefs were more closely related to motivation and behavior, while self-esteem was more closely related to emotions.

Because self-efficacy is so central to goal-directed behavior and performance, it is rea- sonable to ask how it is developed and increased. Wood and Bandura (1989) suggest four separate avenues:

● Mastery experiences. Successful performance of challenging tasks strengthens beliefs in one’s capabilities, whereas failures decrease those beliefs.

Self-efficacy The belief in one’s capability to perform a specific task or reach a specific goal.

Action theory (Rubicon theory) Theory that includes broad consideration of the role of intention in motivated behavior as well as the connection between intention and action.

● Modeling. People have a tendency to compare their capabilities with those of oth- ers. When individuals see someone similar to themselves (in terms of abilities, knowl- edge, etc.) succeed at a difficult task, their own efficacy beliefs can be strengthened. If, on the other hand, this comparison person fails, then their efficacy beliefs will be reduced.

● Social persuasion. Individuals can be encouraged by others who express confidence in their ability to accomplish a difficult task.

● Physiological states. When people experience the symptoms of stress or fatigue, they tend to interpret this as an indication that the task exceeds their

capabilities, thus reducing their feelings of efficacy. Techniques that reduce the experience of stress or fatigue will increase one’s feelings of self-efficacy when completing a difficult task. ���How can we put these approaches to work in increasing our own self-efficacy or the self-efficacy of a friend or co-worker? Consider the following possibilities:

1. Provide guidance or technical or logistic support to the individual, increasing the likelihood that he or she will experience success on a challenging task (i.e., a mas- tery experience).

2. Provide successful role models, perhaps by pairing an individual with a fellow worker of similar experience who has mastered a difficult task.

3. Be a targeted “cheerleader,” emphasizing the individual’s knowledge and ability (as opposed to simply expressing confidence that he or she will succeed).

4. Take steps to reduce stress in the individual’s environment that is unrelated to the challenging task.

Action Theory

���Perhaps the broadest consideration of the role of intention in motivated behavior appears in the form of what has come to be known as action theory. This approach is most pop- ular among German applied psychologists (Frese & Zapf, 1994; Gollwitzer, 1999; Gollwitzer, Heckhausen, & Ratajczak, 1990) and is also known as the Rubicon theory, based on a famous incident involving Julius Caesar’s civil war on Rome and the Roman Senate. Prior to crossing the river Rubicon on his way to Rome, Caesar asked his advisors if this was a wise plan. Having concluded that it was a reasonable course of action, Caesar and his army did cross the river. One of his advisors then revisited the wisdom of the deci- sion to wage war in Rome. Caesar is reported to have said that, since the army had already crossed the Rubicon, he would not talk about whether to wage war but only about how to win it (Heckhausen, Gollwitzer, & Weinert, 1987). Caesar had moved on from the deci- sion to wage war to developing a plan to win the war. His advisors had not yet made that transition. Their minds were still on the other side of the Rubicon. An even more dire version of the Rubicon theory is set in China several thousand years earlier than the Rubicon crossing. After landing on a shore to prepare for an attack on an enemy, the commander ordered all of the boats burned so that there could be no turning back! ���Gollwitzer (1993) has written extensively on the connection between intention and action, distinguishing between goal intentions (“I intend to achieve X”) and implementation inten- tions (“I intend to initiate the goal-directed behavior X

when I encounter situation Y”). He is particularly interested in how people turn intention into action. He identifies four consecutive action phases in active goal pursuit:

1. Predecisional. Examining one’s desires in order to determine which desire is the strongest and most feasible to attain

2. Postdecisional. Planning and developing strategies for successful action 3. Actional. Actually expending effort to achieve the desired outcome 4. Evaluative. Comparing what was achieved with what was desired

Gollwitzer believes that intentions are particularly important for overcoming any obsta- cles that may arise in phases 1 or 2. He also believes that people are far more likely to accomplish goals when both goal intention and implementation intention are present.

When we have competing wishes and desires, we can remind ourselves of our inten- tions, and it is the intentions that help us establish priorities so that we can eliminate con- flicts among our wishes and desires. Raabe, Frese, and Beehr (2007) demonstrate that even with activities as broad as career self-management, intentional behavior regarding career building can lead to increased career satisfaction. This is closely related to Locke and Latham’s concept of commitment: Once an intention is formed as a result of establishing priori- ties, there is no longer any need to deliberate contrasting alternatives. Once Caesar crossed the Rubicon, it was no longer necessary or appropriate to debate the wisdom of that course of action. In addition, implementation intentions help us to articulate when, where, and how we intend to achieve our goals (Gollwitzer, 1993). You decide that you will complete your term paper by the middle of the semester. You buy some new soft- ware for your computer, set up a schedule for a period of research each week and post that schedule on your door, apply for a study carrel in the library, cancel plans for a trip with friends, and ask a professor if you can sit in on some lectures in another class that relate to your term paper. Because you have both a goal intention and an implementa- tion intention, the chances are greatly enhanced that you will have your term paper done by the middle of the semester.

Frese and Zapf (1994) have published the most accessible description of action theory. An action (e.g., performing a work task) has two elements: the action process and the action structure. The action process is displayed in Figure 8.5. An action starts with a goal (or choice among goals), proceeds to a consideration of events that may occur in the future, and then progresses to the development of several alternative plans, the ���selection of one of those alternative plans, the execution and monitoring ���of the chosen plan, and, finally, the processing of information resulting from ���the execution of the plan. The last step, feedback, then influences the goal ���development process once again.

Action process Process that starts with a goal, proceeds to a consideration of events that may occur in the future, and then progresses to the development of several alternative plans, the selection of a plan, the execution and monitoring of the chosen plan, and the processing of information resulting from the execution of the plan. The last step, feedback, then influences goal development once again.

Action structure Structure that includes the notion that (1) observable action is the result of a number of prior events and plans, hierarchically arranged, and (2) the feedback and resulting regulation of actions occur at different levels.

The action structure includes two aspects. The first is the notion that no observable action occurs in a vacuum. It is the result of a number of prior events and plans, hierarchically arranged. The second is that the feed- back and resulting regulation of actions occur at different levels. Some are at the conscious level (e.g., was my performance up to the standard I expected?) and others are at an unconscious or automatic level (e.g., adjust- ing the swing of a hammer to hit a nail more solidly).

In some senses, action theory is proposed as an alternative to motiva- tion theory. Hacker (1992) notes that often the highest performers in a job are those with the best understanding of the job rather than those who are most motivated. Action theorists are, by definition, more concerned with action than motivation. Nevertheless, this may ultimately be a semantic exercise. The goal-setting advocates would claim that there is little differ- ence between the various hierarchical levels of the action structure and the notion of goal specificity. Further, they would claim that the action pro- cess is virtually identical to the goal-setting and feedback model.

Common Themes in Modern Approaches

After examining the modern approaches to motivation theory, can we find any common themes? Yes, there are several. First, intention plays a key role in motivated behavior. The most common form of that intention is a goal. Any viable theory of motivated behavior will need to have a goal-like element. These goals will be associated with anticipated hap- piness or unhappiness. Second, the concept of feedback is critical if we are to consider any but the simplest act at one point in time. Third, the theory needs to include some element of the person as scientist. The person need not be a completely rational or accurate scien- tist but must be considered an information gatherer and analyst. Fourth, the theory should include some concept of self-assessment. It is clear that individuals commonly take stock of where they are compared to where they want to be. Finally, there will be some noncog- nitive element in the “ultimate” motivation theory. This element may be personality, or values, or even the feeling that arises from the self-efficacy belief. What is becoming clearer from motivational research is that individuals are not just primitive scientists, they are crit- ical scientists as well. They do not merely use information, they evaluate and judge it. As a result, the person-as-scientist metaphor is giving way to that of the person as judge.

From a practical standpoint, then, I-O psychologists know quite a lot about motivation, even without a complete and comprehensive theory. The challenge to motivation theory now is more theoretical and research based than practical. We have many of the pieces to the puzzle, and we just need to figure out how to assemble them. But another problem may emerge while we are assembling the puzzle. The nature of work will not stand still. It has changed radically and will continue to change. The real challenge will be to craft a theory that can deal with work as it exists in the 21st century: work that is team based, technological, multicultural, rapidly chang- ing, and performed for organizations with limited loyalty to their members.

A New Motivational Topic: The Entrepreneur

Entrepreneurial yearnings can appear very early in life. It is not clear if the successful lemon- ade stand owner will become a Steve Jobs or Bill Gates, but it is clear that successful entrepreneurs are a different breed. As an example, after successfully taking the Virgin group (e.g., Virgin Records, Virgin Atlantic Airways) public in 1986, Sir Richard Branson bought all the shares back and took it private

again because he disagreed with the direc- tions that shareholders wanted him to pursue, believing that the investors were much too short term in their thinking (Glaister, 2005).

Baron (2002) makes a strong case for introducing entrepreneurial activity as a topic in I-O psychology with the following points:

● In the 1990s, even though large corporations cut over 6 million jobs, unemploy- ment was at a record low because entrepreneurs were starting new companies.

● In 1998, more than 900,000 new start-up companies appeared in the United States.

● In 1998, more than 10 million U.S. workers were self-employed.

● The number of new businesses started by women and minorities has risen more ���dramatically than the number of those started by white males. ���Baron argues convincingly that entrepreneurship is now a stable part of the U.S. economy. Even closer to home, Baron (2003) observes that in the pre-21st-century environment, many if not most students planned to work for a large corporation and progress through manage- ment ranks. In contrast, over 50 percent of the students he now encounters expect to start their own business either right after graduation or shortly thereafter. This phenomenon is not peculiar to the United States. Frese and his colleagues documented the rise of entrepreneurial activities in former socialist and Warsaw Pact countries following the end of the Cold War (Utsch, Rauch, Rothfuss, & Frese, 1999). Entrepreneurial activity in the Far East, particularly China, experienced remarkable growth in the early years of the 21st century.

The research data on the precursors and correlates of entrepreneurial activity are relatively new and thus are still tentative at this point. Some models have been proposed and a great deal of speculative writing has appeared. As a result, no firm conclusions are possible—except that this line of research is likely to increase geometrically in the next decade as more and more workers move away from traditional work settings. Nevertheless, since the topic is intriguing, it is worth reviewing these preliminary find- ings and hypotheses. Compared to their less entrepreneurial colleagues, entrepreneurs:

● Recognize patterns of opportunity more easily and more quickly, both because of a deeper and broader knowledge of certain industries or markets (Baron, 2004) and because of well-developed cognitive abilities (Baron & Ensley, 2006)

● Regret business decisions that failed but not a career or occupational choice

(Baron, 2000a)

● Are more socially skilled (Baron, 2000b; Baron & Markman, 2000), a finding that has recently been extended to include Chinese entrepreneurs (Baron & Tang, 2009)

● Are higher on self-efficacy and perseverance/persistence (Markman, Baron, & ���Balkin, 2005)

● Are more likely to set goals related to starting a new business (Baum & Locke, 2004)

● Are higher on achievement motivation (Collins, Hanges, & Locke, 2004)

● Are higher on conscientiousness, emotional stability, extraversion, and openness to ���experience (Zhao, Seibert, Lumpkin, 2010)

● Are more passionate and tenacious in seeking entrepreneurial success (Baum & Locke, ���2004)

● Are willing to tolerate greater risk, particularly when their goal is venture growth ���rather than production of family income (Stewart & Roth, 2001)

● Are more likely to be prone to downward biases in evaluating risk (Hayward, Shepherd, ���& Griffin, 2006)

● Were often raised in the context of a family business and have higher levels of testos- ���terone than nonentrepreneurs (White, Thornhil, & Hampson, 2007).

���Hmieleski and Baron (2008) suggest an interesting finding with regard to the heightened self-efficacy noted in the above list. This self-efficacy, coupled with high levels of opti- mism, might just as easily lead to a business failure as a business success, particularly in unstable business environments. Entrepreneurs are more willing to bet the farm than they should be.

���Frese and his colleagues have been looking at entrepreneurial activity in small businesses in several different cultures, including southern Africa (Frese et al., 2007; Krause, Frese, Friedrich, & Unger, 2005) and Vietnam (Hiemstra, van der Kooy, & Frese, 2006). These initiatives are particularly salient for the concept of world poverty that was introduced in Chapter 1. The Vietnamese study was with street food vendors; the southern African small businesses included scrap metal merchants, grocery stalls, and tailors. Frese and his col- leagues suggest that teaching and reinforcing entrepreneurial behavior among small busi- ness owners may be one of the many steps that can be taken to

reduce world poverty. It is fascinating (and unusual) to see the application of theories of work motivation in such extremely small business settings. Frese and his colleagues (Krause et al., 2005; Rauch & Frese, 2007b) have proposed that a central personality characteristic underlying entrepreneurial behavior is entrepreneurial orientation (EO). Frese and Fay (2001) see EO as a combination of achievement orientation, risk-taking orientation, and personal initiative (PI). They define personal initiative as a work behavior characterized by its self-starting nature and its persistent approach that helps in overcoming difficulties that arise in pursuit of a goal. It appears that EO is a higher-order construct and possibly even what we have referred to earlier as a competency, particularly if there are cognitive overtones to the construct, as Frese and colleagues suggest (Fay & Frese, 2001). Rauch and Frese (2007a) make a strong case for considering personality traits as the building blocks for entrepreneurial activity and success. In particular, they identify need for achievement, self- efficacy, stress tolerance, proactive style, and need for autonomy as key traits.

Shane, Nicolaou, Cherkas, and Spector (2010) examined two samples of twins from the United Kingdom and the United States to determine whether genetic factors account for part of the relationship between the tendency to become an entrepreneur and the Big Five personality dimensions. They found that common genes influenced the correlations between the tendency to be an entrepreneur and both extraversion and openness to expe- rience. Although the correlations between the tendency to be an entrepreneur and the per- sonality characteristics were not large, the authors found evidence that genetic factors accounted for most of these correlations. Their findings are intriguing and suggest that genetic factors should be considered in discussions about why individuals become entrepreneurs.

As we indicated above, all of these ideas are relatively new, and the research is barely off the ground. As a result, it is much too early to demand an exact definition of this new construct. The simple fact is that some people exhibit entrepreneurial behavior (and not only in Western cultures) while others do not, and of those who do, some are more suc- cessful than others. It is clear that there is a strong motivational flavor to the behavior— words like “initiative,” “tenacious,” “achievement-oriented,” and “energetic” predominate in discussions of entrepreneurs. It is also clear that more and more people will move into entrepreneurial environments from more traditional work environments. We will be watching this emerging research domain carefully in the next few years.

BOX 8.4 ENTREPRENEURIAL ATTRIBUTES

Real-life entrepreneurs confirm many of the charac- teristics identified by the research we have reviewed. Consider four such entrepreneurs: Caitlin Adler, who started a small bakery and café; Jeff Takle, who founded an online property management company; Nicholas Khoo, who began an IT outsourcing com- pany; and Bart Knaggs, principal of an athlete and artist management firm. Each of these entrepreneurs’ sto- ries reveals similar elements.

As predicted by research findings, real-life entrepreneurs like to be in control rather than being controlled: As café owner Caitlin Adler says, “I could never work for somebody else.”

● They are all strongly achievement oriented. Nicholas Khoo puts it best: “It feels good to . . . go against the big boys and win.”

● They like to be in control rather than being controlled: As Caitlin Adler says, “I could never work for somebody else.”

● They all experienced failure early in the entrepreneurial effort yet persevered in spite of the lack of success. Bart Knaggs says, “Rejection . . . motivates me. I’m really offended when I get rejected, and I feel compelled to show whomever it is that he is wrong.”

● Even in the face of negative information about the success of their enterprises, they remain optimistic. For example, even though Jeff Takle’s property management company is close to going under, he says, “We’re still on track for building a self-sustaining, profitable company.”

In sum, entrepreneurs look at the world through very different lenses than do nonentrepreneurs.

SOURCE: Bowers (2008); EnterpriseOne (2006–7); Gunasegaran & Losefsky (2008).

© Jodi Hilton/The New York Times/Redux

MODULE 8.3 SUMMARY

The most representative of the person-as- intentional approach is goal-setting theory, which has evolved into a mature and comprehen- sive approach to work motivation. The notion of a goal as a motivational force is well established. Most studies indicate that specific, difficult goals lead to higher performance, assuming that the indi- vidual has accepted the goals.

Additional motivational theories use the con- cept of goals and goal setting. Control theory is based on the principle of a feedback loop, which deals with the discrepancy between the set goal and the actual goal. Control theory suggests that people are active self-regulators who depend on feedback for adjusting to changes in their environment.

Self-efficacy, which is playing an increasingly important role in most modern theories of work motivation, can be developed through mastery experiences, modeling, social persua- sion, or physiological states.