ENTREPRENEURIAL

MOTIVATION
 Understanding the Theories of Motivation
 Understanding the 7 rules of motivation
 Defining the entrepreneurial motivation
 Understanding ‘A Model of
Entrepreneurial Motivation’

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The processes that account for an individual’s
intensity, direction, and persistence of effort
toward attaining a goal

Key Elements
1. Intensity: how hard a person tries
2. Direction: toward beneficial goal
3. Persistence: how long a person tries

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 Maslow’s Hierarchy of Needs Theory
 Herzberg’s Two-Factor Theory
 McGregor’s Theory X and Y
 Alderfer’s ERG Theory
 McClelland’s Needs of Achievement Theory
 Cognitive Evaluation Theory
 Locke’s Goal-Setting Theory
 Reinforcement Theory
 Equity Theory
 Expectancy Theory

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There is a hierarchy of five needs
— physiological, safety, social,
esteem, and self-actualization
As each need is satisfied, the next
need becomes dominant.

Self-Actualization
The drive to become what one is capable of becoming.
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 Lower-Order Needs Higher-Order Needs
Needs that are satisfied Needs that are satisfied
externally; physiological internally; social, esteem,
and safety needs. and self-actualization
needs.

Source: Motivation and Personality , 2nd ed,, by A.H. Maslow, 1970.

Reprinted by permission of Prentice Hall, Inc., Upper Saddle River, NJ.

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What is their level of
needs?

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What is their level of needs?
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Two-Factor (Motivation-Hygiene) Theory
Intrinsic factors are related to job satisfaction,
while extrinsic factors are associated with job
dissatisfaction.

Hygiene Factors
Factors—such as company policy and administration,
supervision, and salary—that, when adequate in a job,
will make the workers feel satisfied. When factors are
adequate, people will not complain and continue to be
in the organization.

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Theory X
Manager assumes that employees
dislike work, lack ambition, avoid
responsibility, and must be
directed and coerced to perform.

Theory Y
Manager assumes that
employees like work, seek
responsibility, are capable of
making decisions, and exercise
self-direction and self-control
when committed to a goal. No
need to coerced them to
perform
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There are three groups of core needs: existence,
relatedness, and growth.

Core Needs Concepts:

Existence: provision of More than one need can
basic material be operative at the same
requirements. time.
Relatedness: desire for If a higher-level need
relationships. cannot be fulfilled, the
Growth: desire for desire to satisfy a lower-
personal development. level need increases.

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 To ensure that the workers stay motivated, the
managers must ensure that the elements in ERG are
taken care of

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Need for Achievement Need for Affiliation
The drive to excel, to achieve The desire for friendly
in relation to a set of and close personal
standard, to strive for success. relationships.

Need for Power nPow

The need to make others
behave in a way that they
would not have behaved
otherwise.
nAch nAff

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The assumption that behavior is a function of its
consequences.

Concepts:
Behavior is environmentally induced
Behavior can be modified (reinforced) by
providing (controlling) consequences.
Reinforced behavior tends to be repeated.

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Individuals compare their job inputs and outcomes
with those of others and then respond to eliminate
any inequities – striking a balance

Referent Comparisons:
Self-inside
Self-outside
Other-inside
Other-outside

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Choices for dealing with inequity:
1. Change inputs (slack off)
2. Change outcomes (increase output)
3. Distort/change perceptions of self
4. Distort/change perceptions of others
5. Choose a different referent person
6. Leave the field (quit the job)

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Propositions relating to inequitable pay:
1. Overrewarded hourly employees produce
more than equitably rewarded employees.
2. Overrewarded piece-work employees
produce less, but do higher quality piece
work.
3. Underrewarded hourly employees produce
lower quality work.
4. Underrewarded employees produce larger
quantities of lower-quality piece work than
equitably rewarded employees

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Distributive Justice
Perceived fairness of the amount and allocation of
rewards among individuals.

Procedural Justice
The perceived fairness of the process to
determine the distribution of rewards.

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Expectancy Theory (Victor Vroom)
The strength of a tendency to act in a certain way
depends on the strength of an expectation that the act
will be followed by a given outcome and on the
attractiveness of that outcome to the individual.

E X H I B I T 6–8

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 Effort–Performance Relationship
› The probability that exerting a given amount of effort will lead to
performance.
 Performance–Reward Relationship
› The belief that performing at a particular level will lead to the
attainment of a desired outcome.
 Rewards–Personal Goals Relationship
› The degree to which organizational rewards satisfy an individual’s goals
or needs and the attractiveness of potential rewards for the individual.

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Source: Adapted from M. Blumberg and C.D. Pringle, “The Missing Opportunity in
Organizational Research: Some Implications for a Theory of Work Performance,”
Academy of Management Review, October 1982, p. 565.

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#1 Set a major goal, but follow a path.
The path has mini goals that go in many directions.
When you learn to succeed at mini goals, you will
be motivated to challenge grand goals.

#2 Finish what you start.

A half finished project is of no use to anyone.
Quitting is a habit. Develop the habit of finishing
self-motivated projects.

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#3 Socialize with others of similar interest.
Mutual support is motivating. We will develop the attitudes of
our five best friends. If they are losers, we will be a loser. If
they are winners, we will be a winner.

 #4 Learn how to learn.

Dependency on others for knowledge supports the habit of
procrastination. Man has the ability to learn without
instructors. In fact, when we learn the art of self-education
we will find, if not create, opportunity to find success
beyond our wildest dreams.

#5 Harmonize natural talent with interest that

motivates.
Natural talent creates motivation, motivation creates
persistence and persistence gets the job done.

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#6 Increase knowledge of subjects that inspires
The more we know about a subject, the more we want
to learn about it.

 #7 Take risk
Failure and bouncing back are elements of motivation.
Failure is a learning tool. No one has ever succeeded
at anything worthwhile without a string of failures.

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- Examining why people start business and how they differ from
those who do not.
- “ Because motivation plays an important part in the creation
of new organizations, theories of organization creation that
fail to address this notion are incomplete”
Herron, L., & Sapienza, H.J., (1992).

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Johnson, B.R. mentioned that:
“ It remains worthwhile to carefully study the role of the
individual, including his or her psychological profile.
Individuals are, after all the energizers of the entrepreneurial
process”

Entrepreneurial motivation – the willingness to sustain

the venture.

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 A MODEL OF ENTREPRENEURIAL
MOTIVATION
Expectation/ Intrinsic/
Outcome Extrinsic
Comparison Rewards

PC PE PG

Decision
to Behave Entrepreneurial Entrepreneurial Firm
Entrepre- Strategy Management Outcomes
neurially

BE Idea

PC = Personal Implementation/
Characteristics Outcome
PE = Personal Perception
Environment
PG = Personal Goals
BE = Business Environment 29
 PC, PE, PG, BE and IDEA directly affect the
decision to behave entrepreneurially.
 Entrepreneurial Strategy  The strategy that
entrepreneur in the initial stage and start-up stage of
the business.
 Entrepreneurial Management  Management style
and Firm outcomes
 Rewards intrinsic and extrinsic reward

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 Motivation is essential to drive a person to do
what they are doing

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