IP Entrepreneurial success

Marjan Gorgievski
Lecture for the 5th INPERE IP in Psychology of Entrepreneurship,
Prague, July 18- July 31, 2011
1

Assignment
Complete the following sentence:
For me, a successful entrepreneur is / has ….
Give at least three answers
2

Contents
Entrepreneurial Success in the Entrepreneurship and
Small Business Literature
Business Owners’ Success Criteria (field study)
Universal Human Values
Success from a Human Values Perspective
Image theatre
3

Entrepreneurial success
Multidimensional approach to entrepreneurial success
• objective economic success criteria (e.g. profit, turnover,
employee growth, innovation, ) (e.g. Schenk, 1998,
Murphy, 1996; Chandler & Hanks, 1993)
• subjective success criteria (e.g. satisfaction,
achievement of personal goals and company goals) (e.g.
Schenk, 1998, Kurtko, 1997; Orser, 2005, 2006)
Subjective criteria may be better predictors of subsequent
entrepreneurial decisions and behaviors than objective
economic and business criteria (e.g. Cooper & Artz, 1995)
4

Entrepreneurial Success
In the business literature:
1. Profit
Sales growth
Significant profit margin
Return on capital employed
Return on shareholders’ funds
2. Growth
Number of locations expands
Increase in nr. employees
5

Entrepreneurial Success (2)
3. Innovation
Creates a new market niche
new products are created
4. Continuity and longevity
Firm survival
Transfer to the next generation
5. Social and environmental performance
Green entrepreneurship
6

Entrepreneurial Succes (3)
More personal criteria:
6. Allows balance between work and private life
7. Provides personal satisfaction
8. Satisfies clients and employees
9. Socially recognized
10. Provides useful products or services
7

Overview
Entrepreneurial Success in the Entrepreneurship and
Small Business Literature
Business Owners’ Success Criteria
Universal Human Values
Success from a Human Values Perspective
Image theatre
8

Entrepreneurial Success according to business owners
(Gorgievski, Ascalon and Stephan, 2010; JSBM)
Provides personal
satisfaction
Is profitable
Satisfies clients and
employees
Allows balance
between work and
private life
9

Ranking of Success Criteria
Provides personal satisfaction 226
Is profitable 133
Satisfies stakeholders 78
Allows work home balance 90
Innovative 64
Useful products or services 47
Continues, long life 43
Gives back to society 30
Expansion 18
Recognition 17
10

Demographics and Ranking of Success Criteria
The younger the business owner,
the more important profitability (Kendall’s
Tau B = -.14, p < .05).
No relationships with gender and education
The larger the business,
the more important continuity (Kendall’s
Tau B = .19, p < .01)
the more important business growth
(Kendall’s Tau B = .20, p < .01),
the less important a good work-life balance
(Kendall’s Tau B = -.15, p < .05).
11

Conceptualization of Entrepreneurial Success
(Dej, Gorgievski, Augustin, Wegge, 2009)
company succes
Rentability (e.g. profitable firm)
Growth (employee, revenue, profit)
Innovation
Being better compared with competition
.70
.62
social success
Contributing back to the society
Social responsibility for employees
Creating new working places
Professional reputation
Entrepreneurial
.78
success
Alpha
between .71
and .90
.83
.60
employee &
customer
relations
personal financial
success
Positive relations with clients
Employee satisfaction and loyalty
Positive & supportive working climate
Personal income enhancement
To afford a good life
Personal financial & family security
personal non
financial success
Work-life balance & time flexibility
Making decisions, challenge
Personal development
12

Do we now capture it all?
13

Overview
Introduction
Entrepreneurial Success in the Entrepreneurship and
Small Business Literature
Business Owners Success Criteria
Universal Human Values
Success from a Human Values Perspective
Image theatre
14

Universal Human Values
Values are concepts or beliefs about desirable endstates
or behaviors that transcend specific
situations, and guide selection or evaluation of
behaviors and events (Schwartz and Bilsky, 1987)
Before we go on, assess yourselves ...
15

10 Values and their relations
16

Universal Values
Achievement Personal success through demonstrating
competence according to social standards.
Hedonism
Pleasure and sensuous gratification for oneself
Stimulation Excitement, novelty, and challenge in life.
Self-direction Independent thought and action-choosing,
creating, exploring
Universalism Understanding, appreciation, tolerance and
protection for the welfare of all people and for
nature
17

Universal Values
Power
Security
Social status and prestige, control or dominance over
people and resources
Safety, harmony and stability of society, of relationships,
and of self
Conformity Restraint of actions, inclinations, and impulses likely to
upset or harm others and violate social expectations or
norms
Tradition
Respect, commitment and acceptance of the customs and
ideas that traditional culture or religion provide
Benevolence reservation and enhancement of the welfare of people
with whom one is in frequent personal contact
18

Function of Values
All value orientations serve an important purpose.
The first purpose is to promote and preserve
cooperative and supportive relationships between
people.
Values that serve this purpose include benevolence,
universalism, conformity, security, and tradition.
19

Cooperation and Support
20

Function of Values (2)
The second purpose is to motivate individuals to invest
time and effort in order to perform productively, solve
problems, and generate new ideas and technical
solutions.
Values serving this purpose in particular are selfdirection
and achievement.
21

10 Values and their relations
22

Function of Values (3)
The third purpose is to gratify self-oriented needs.
They include power, hedonism and stimulation.
Some value orientations do not just serve
requirements, but also harm them. For example,
power and achievement may disrupt and damage
social relations.
23

10 Values and their relations
24

Entrepreneurs’ Values
stimulation
selfdirection
universalism
6
5
4
3
2
1
0
benevolence
tradition
hedonism
conformity
achievement
security
Dutch Entrepreneurs
Cross national
power
25

Overview
Introduction
Entrepreneurial Success in the Entrepreneurship and
Small Business Literature
Business Owners Success Criteria
Universal Human Values
Success from a Human Values Perspective
Image theatre
26

Values and Success Criteria
Growth profit innovate Satisfact
ion
Balance green recogni
tion
Clients
Security .05 .00 -.13 -.19 .14 -.02 -.06 .07
Conformity -.07 .00 -.20 -.08 .01 -.02 .11 -.02
Tradition -.03 -.11 -.17 .03 .12 .12 .14 -.01
Benevolence -.13 -.10 -.10 .13 .09 .05 -.13 .13
Universalism -.15 -.13 -.01 .04 .02 .16 .08 .03
Self-direction .03 .09 .04 -.01 .04 -.08 -.12 .01
Stimulation .04 .03 .20 .07 -.14 .05 -.06 -.07
Hedonism .01 -.02 .02 .07 .08 -.03 .03 -.07
Achievement .13 .10 .08 -.03 -.10 -.16 .14 .00
Power .18 .25 .10 -.04 -.16 -.16 .01 -.07
27

Values and success criteria
1
Openess
Profitability
Continuance
Self enhancing
0,5
Growth
0
Personal satisfaction
Hedonism
Self Direction
Benevolence
Universalism
stimulation
Power
achievement
security
conformity
tradition
Innovation
Recognition
-0,5
Sustainability
Self transcending
Balance
Satisfied stakeholders
Utility
conservation
-1
-1,5 -1 -0,5 0 0,5 1 1,5
28

Conclusions and Discussion
Entrepreneurs define entrepreneurial success
using “softer” criteria, such as personal
satisfaction, satisfied employees and customers
than most researchers and politicians. Profit is the
only “hard” criterion.
Entrepreneurs score relatively high on selfdirection
and low on conformity, also compared to
cross-national samples of the general population.
29

Conclusions and Discussion
Correlations between values and success criteria make
sense. E.g. people who scored high on power ranked
growth and profit higher than people low on power.
Universalists ranked “giving back to society” higher.
30

So Now
You know all about defining success
You know what your own values profile is
After the break: Image Theatre, building organisations
31

Overview
Introduction
Entrepreneurial Success in the Entrepreneurship and
Small Business Literature
Business Owners Success Criteria
Universal Human Values
Success from a Human Values Perspective
Image theatre
32

Image Theater
Technique used in the Theatre of the Oppressed
First elaborated in 1960’s by the Brazilian theatre practitioner Augusto
Boal, initially in Brazil and later in Europe.
Goal: theatre as means of knowledge and transformation of reality in
the social and relational field.
In the Theatre of the Oppressed, the audience becomes active as
"spect-actors" who explore, show, analyze and transform the reality in
which they are living.
The technique was later also used for other purposes.
33

Image Theater Steps
Step 1: Build static images
How many actors?
What is their position?
Distance
direction
Angle towards another
Dynamisation 1: add movement
Dynamisation 2: add speach
“advisors” are invited to improve the image
34