THE

ENTREPRENEURIAL
MOTIVATION
LECTURE OUTLINE

• What is entrepreneurial motivation?

• Sources of motivation
• Models of entrepreneurial motivation
• Triggers and barriers to entrepreneurial motivation
• Ways to enhance entrepreneurial motivation

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WHAT IS EM?

• Entrepreneurial motivation refers to the way in which urges, drives,

desires, striving, aspirations or needs direct, control or explain the
entrepreneurial behavior of human beings.

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ELEMENTS OF EM
• Motive
• Behavior
Motiv
• Goal
e

Beha
Goal
vior

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 RELATIONSHIP BETWEEN
MOTIVE, BEHAVIOR & GOAL
Help Goal
(Assistance)
Effort

Barriers
(Internal)
Activity

Barriers
(External) Feelings
Intention Expectation
(+ve/-ve)
(Motive) (+ve/-ve)

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SOURCES OF ENTREPRENEURIAL
MOTIVATION
• Internal/Intrinsic
– Personal goals
– Need for achievement
– Ambition

• External/Extrinsic
– Compulsion
– Support
– Successful entrepreneurs
– Access to capital
– Status

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MODELS OF EM

• Needs-based entrepreneurial motivation

• A general model of entrepreneurial motivation
• Entrepreneurial intentions model
• Enterprise formation model
• Model of entrepreneurial motivation and the entrepreneurial process

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David McClelland, Psychologist
(1917-98)

Needs-based
Entrepreneurial
Motivation

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 DAVID MCCLELLAND'S NEEDS-BASED
MOTIVATIONAL MODEL

• Need for achievement (n-ach)

– attainment of realistic but challenging goals, and
advancement in the job. Feedback as to achievement and
progress, and a sense of accomplishment.
• Need for authority and power (n-pow)
– influential, effective and to make an impact ,personal
status and prestige.
• Need for affiliation (n-aff)
– friendly relationships and interaction with other people
• Need for security/safety (n-sec)
– Comfortable with secure employment and unwillingness to
take higher risk

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 BEHAVIOR OF
ACHIEVEMENT-MOTIVATED
PEOPLE
•Achievement is more important than material or financial
reward.
•Achieving the aim or task gives greater personal
satisfaction than receiving praise or recognition
•Financial reward is regarded as a measurement of success,
not an end in itself.
•Security is not prime motivator, nor is status.

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 BEHAVIOR OF
ACHIEVEMENT-MOTIVATED
PEOPLE
•Feedback is essential, because it enables
measurement of success, not for reasons of praise or
recognition.
•Achievement-motivated people constantly seek
improvements and ways of doing things better.
•Achievement-motivated people will logically favor
jobs and responsibilities that naturally satisfy their
needs, i.e. offer flexibility and opportunity to set and
achieve goals, e.g., sales and business management, and
entrepreneurial roles.

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 BEHAVIOR OF
ACHIEVEMENT-MOTIVATED
PEOPLE
• Capacity to set high personal but obtainable
goals
• Concern for personal achievement rather
than the rewards of success
• The desire for job-relevant feedback (How
well am I doing?) rather than for attitudinal
feedback (How well do you like me?)

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 A Model of Entrepreneurial Motivation
Internal Source: Naffziger, Hornsby and Kuratko, (1994)
PC PE PG

Expectation/ Intrinsic/Extrinsi
Outcome c
Comparison Rewards

Decision
to behave Entrepreneurial Entrepreneurial Firm
Entrepreneuriall Strategy Management Outcomes
y

Implementation/
Outcome
Perception
PC = Personal Characteristics
PE = Personal Environment
PG = Personal Goals
BE IDEA Internal/External BE = Business Environment

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ENTREPRENEURIAL
INTENTIONS MODEL
Perceived net
desirability of
self-employment
(NDSE)

Tolerance for
risk (TR) Self-employment intentions

Perceived
feasibility
(self-efficacy) of
self-employment
(SE) Source: Gerry Segal, Dan Borgia & Jerry Schoenfeld (2005)

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FACTORS CRITICAL TO START-UP &
REASONS FOR NOT STARTING-UP

Source: Martyn Roberton et.al. (2003)

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A Model of Enterprise Formation
Source: Vollery, Mazzarol, Doss & Thein, 1997

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 Triggers to start up

• Invest (need a job; way to personal savings, super,

redundancy; earn a better salary)
• Creativity (take advantage of own talents; have an
interesting job; create something new; realise a dream)
• Autonomy (work own hours, own location; be one’s own
boss)
• Status (follow example of a person I admire; increase
status/prestige; maintain family tradition)
• Market Opportunity (saw one)
• Money (make more, keep more RM)

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 Barriers to start up
• Lack of resources - lack of marketing skills,
lack of management/financial expertise, lack
of information, difficulty in obtaining finance
• Compliance costs - high taxes and fees,
compliance with government regulation,
problems finding suitable labour
• Hard reality - assessment that risks are
greater than expected, uncertainty and fear
of failure
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 ENTREPRENEURIAL MOTIVATION &
ENTREPRENEURSHIP PROCESS

Source: Shane, et.al. (2003)

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 ENTREPRENEURIAL BEHAVIOR & FAVORABLE BUSINESS
OUTCOME

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 Pull Factors
■ Religious Values
– A lot of bounties in business
– Follow the teachings of the religion
– Duty to lead a prosperous life
■ Psychological
– Doesn’t like to be controlled
– Want freedom

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 Pull Factors
■ Riches and Power
– Rich and famous
– Sophisticated life-style
■ Service to the Society
– Corporate social responsibility
– Philanthropic activities
■ Entrepreneurial Culture
– Entrepreneurial mindset
– Business succession
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 Push Factors
■ Frustration
– Limited job mobility
– VSS and “retrenchment”
– Dissatisfaction
■ Necessity
– No jobs
– Need to support family
– Lack educational qualifications

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BARRIERS TO
ENTREPRENEURSHIP
• “Too much to lose”
– Terlalu memikirkan apa yang akan berlaku
kepada diri & keluarga sekiranya gagal
– Sikap takut kepada kegagalan yang tinggi
– Sangsi dengan keupayaan diri sendiri
– Terlalu mementingkan faktor jaminan

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BARRIERS TO
ENTREPRENEURSHIP
• “Personal inadequacy”
– Saya terlalu tua atau terlalu muda atau kurang
pengalaman
– Terlalu membesarkan kekurangan dan
kelemahan diri sendiri.
– Menanggapi bahawa kegagalan perniagaan
membawa kesan yang terlalu besar

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BARRIERS TO
ENTREPRENEURSHIP
• “Fear of Competition”
– Bagaimana saya boleh bersaing dengan mereka
yang telah lama berniaga
– Takut kepada bayang-bayang pesaing dan
dihantui perasaan bahawa produk atau
perkhidmatan yang ditawarkan lebih “inferior”
dari pesaing

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BARRIERS TO
ENTREPRENEURSHIP
• “Lack of Capital”
– Terlalu membesarkan kekurangan modal untuk
memulakan perniagaan
– Tidak ada modal, tak boleh berniaga
– Membesarkan kepayahan untuk mendapatkan
pembiayaan

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BARRIERS TO
ENTREPRENEURSHIP
• “Lack of Opportunity”
– Terlalu membesarkan masalah mendapatkan
peluang
– Peluang perlu dicari
– Masalah kepada orang lain mungkin peluang
kepada kita
– Guna “lubang” untuk cari lubang (peluang)

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FACTORS IN ENTREPRENEURIAL
SUCCESS
• Achievement Oriented Personality
• Entrepreneurial Attitudes
• Belief in Self and Ability
• Social Context
• Precipitation Event
• Intention to Start a Venture
• Opportunity Recognition
• Controlling Resources
• Timing

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 KONOSUKE MATSUSHITA (FOUNDER OF
NATIONAL PANASONIC LTD)
1894 -1989

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PANASONIC FACTORY - JAPAN

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CONCLUSION

Entrepreneurship motivation refers to

powerful factor that urge someone to behave
like entrepreneur. It related with three
interrelated things – goal, motive and
behaviour. Study of entrepreneurship
motivation helps someone to emulate
successful entrepreneurs because ones
know what drive them to be successful
person.

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