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Title: Self, agency, and the social psychology of entrepreneurship


1
Self, agency, and the social psychology of
entrepreneurship
  • Kari Mikko Vesala
  • University of Helsinki

2
Background
  • Social psychology of entrepreneurship A
    research team at the Department of Social Studies
    (University of Helsinki)
  • Aim of the team to analyse entrepreneurship as a
    psychological, social and cultural phenomenon
    from an agency and self perspective
  • Existing outlines of social psychology of
    entrepreneurship are not satisfactory for our
    purposes

3
Introduction
  • Main points of the lecture
  • -previously proposed cognitive approach can be
    complemented with a social construction approach
  • -self-related beliefs can be viewed as part of
    social construction of entrepreneurship
  • -both qualitative and quantitative methods can
    be utilised in such approach

4
Self, agency, and the social psychology of
entrepreneurship
  • 1. Introduction
  • 2. Outlines of the social psychology of
    entrepreneurship
  • 3. Social construction approach in the
    entrepreneurship research contributions and
    challenges to social psychology of
    entrepreneurship?
  • 4. The construction of personal control in the
    rhetoric of farmers involved in business
    diversification
  • 5. Personal control beliefs among rural small
    business owners and farmers
  • 6. Conclusions

5
1. Outlines of the social psychology of
entrepreneurship
  • Shaver 2003 The Social Psychology of
    Entrepreneurial Behaviour
  • Differentiates s.p. from personality approaches
    (which assume traits as permanent
    cross-situational dispositions)
  • Intrapersonal processes that guide the
    entrepreneurs venture-organizing activities
    (business start-up and persistence in it)
    social cognition, attitudes, self (e.g.
    attributions of success, overconfidence,
    self-efficacy)
  • Variable approach explains overt behaviour by
    (internal) cognitive factors rejects qualitative
    methods

6
1. Outlines of the social psychology of
entrepreneurship
  • Carsrud Johnson (1989) Entrepreneurship A
    social psychological perspective.
  • Entrepreneurship as a role pursuit of business
    opportunities that takes place in a context of
    social networks and transaction relations.
  • -gt emphasis on the means and processes of social
    influence viewed as interpersonal behaviour and
    communication (contact creation, impression
    management etc.)
  • No explicit stand on the methods

7
1. Outlines of the social psychology of
entrepreneurship Conclusion
  • Shaver focuses on intrapsychic (cognitive)
    factors that presumably contribute to business
    start-up behavior and persistence in it. Such
    cognitions are approached as separate antecedent
    entities that affect business behavior
  • C J elaborate on the description of
    entrepreneurial behaviour it is viewed as a
    role/a set of behaviours (a process of pursuing
    business opportunities in a social context).
    Thus, it involves, for example, influencing other
    actors or gaining resources, as well as taking a
    role of an entrepreneur ( adapting
    entrepreneurial self-definition or identity).
  • -gt In both outlines, there are conceptual
    associations with the self (self-efficacy and
    self-evaluation in Shaver, role in C J). (e.g.
    Baumeister Self concept involves reflective,
    relational and agentic aspects).

8
2. Social construction approach in the
entrepreneurship research contributions and
challenges to social psychology of
entrepreneurship?
  • During the latest decade, several researchers
    have utilised social constructionist approach in
    the study of entrepreneurship
  • They draw not only on sociologist such as Berger
    and Luckman, or Giddens, but on social
    psychologist like Harre, Gergen, or Potter
    Wetherell, narratologists like Bruner or
    Polkinghorne, not to mention dramaturgical
    approach of Goffman.
  • Topics construction of business opportunities
    (Chiasson Saunders Jack Anderson Fletcher)
    entrepreneurial personality (Chell) entrepreneur
    identity (Watson, Down Warren, Downing )
    entrepreneurial learning (incl.self-beliefs) (Rae
    Carswell)
  • One background for the research on the
    construction of entrepreneurial self Debate on
    the creation of enterprising self as a target of
    public policies (enterprise culture programs)

9
2. Social construction approach in the
entrepreneurship research contributions and
challenges to social psychology of
entrepreneurship?
  • Individual seen as intentional creature who takes
    action, learns, and makes sense, and thus creates
    and exploits business opportunites and construct
    him/herself as an entrepeneur while engaged in
    social interaction that is embedded in social
    contexts and situations
  • In doing this, individual uses socially shared
    tools for thought and communication (language
    etc.), which include criteria for
    entrepreneurship (entrepreneurship discourses,
    representations of E etc.), and participates in
    controversies and negotiations in transaction
    relations.

10
2. Social construction approach in the
entrepreneurship research contributions and
challenges to social psychology of
entrepreneurship?
  • Such a construction is obviously complicated and
    multifaceted. Situational and contextual variety
    is expected in the nature of the process and
    contents of the construct. Therefore, thick
    qualitative analysis are favoured.
  • Methodological focus on the analysis of
    communication and use of language narratives,
    discourses, metaphors, rhetoric,
    self-presentations (case-studies)

11
2. Social construction approach Conclusion
  • Entrepreneurship is understood as a social
    construction
  • -of business opportunity (recognition and
    realisation)
  • -of entrepreneurial self.
  • Thus, the self is again at the focus (now esp.
    identity, agency), but the interest is now in the
    construction of self
  • At the core of the multi-disciplinary study on
    entrepreneurship there is an idea of special
    agency Entrepreneur is an actor who makes it
    happen
  • For social psychology, this suggests that
    concepts associated with the agentic aspect of
    the self, such as self-efficacy, are of special
    relevance
  • Such concepts can be approached also from a
    social construction perspective

12
4. The construction of personal control in the
rhetoric of farmers involved in business
diversification
  • Control constructs (Skinner 1995) locus of
    control, self-efficacy, perceived behavioural
    control -gt personal control
  • P.C. as a criterion and a resource for the
    construction of entrepreneurial self (identity,
    agency)
  • Vesala Peura 2005 how farm business owners
    present themselves in terms of personal control
    in the market arena?

13
4. The construction of personal control in the
rhetoric of farmers involved in business
diversification
  • 40 interviews with farmers engaged in diversified
    business activities
  • 10 statements concerning customer and marketing
    related means for enhancing the business (e.g.
    Salesmanship is crucial for success in
    business, It is difficult to work things out
    with my clients by talking)
  • Free comments were requested further accounts
    and justifications were encouraged
  • Stands and justifications were analysed in
    detail the overall rhetoric was interpreted from
    the perspective of self-presention regarding
    personal control in the market arena
  • The connection between self-presentations and the
    customer structure of each case was checked and
    the cases were compared to each other

14
Case1 Paavo (machine contracting)
  • Paavo owns a crop farm, but earns over a half of
    his living by working under contract for a large
    Europe-wide forest industry group. Paavos
    machinery is capable of doing all the different
    procedures from thinning to felling of timber. He
    owns his firm with his wife and they have one
    employee. The limited company was started 10
    years ago, but Paavo has been engaged in forest
    industry even longer.
  • The interview was conducted with Paavo.

15
Case 2 Mika (tourism)
  • Mika and his wife have been in the rural tourism
    business for 10 years. They have a small farm (7
    hectares) on which they practice berry and apple
    production and processing. The income from
    agriculture has not been sufficient and the
    tourism business has become more and more
    important for them. They have four cottages to
    rent, and additional two apartments under
    construction. The customers come mostly from
    Southern Finland but also from Central Europe.
    Many of them come on regular basis. The interview
    was conducted with Mika.

16
Case1 Paavo (machine contracting)
  • Statement 1 It is worthwhile to invest in
    advertising. As an immediate response to this
    statement, Paavo agrees on a general level.
    However, thereafter he denies clearly the
    usefulness of advertising in his own business. He
    justifies his stand by saying that his firm has
    got one key customer, and that the private forest
    owners do business with this key customer (the
    Company). He gets his contracts through the
    Company, and therefore in his case
    advertising is totally useless.

17
Case 2 Mika (tourism)
  • Statement 1 It is worthwhile to invest in
    advertising. Mika starts to comment the statement
    with a reservation that it is possible to invest
    in advertising any amount of money, and thats
    the purpose of advertising agencies. After that,
    he takes a tentative stand for the statement,
    referring particularly to his own business
    industry In the tourism industry you have to be
    visible, to some extent, every once in a while.
    In his argumentation Mika specifies different
    forms of advertising and deliberates the pros and
    cons of them. He mentions a short ad in a
    nationwide newspaper, contact information in
    nationwide tourist guides, and the firms own
    website as such forms of advertising that he has
    found worthwhile and profitable in his own
    business. He justifies his comments plausibly
    with his own experience. He also stresses the
    importance of timing and the fact that
    advertising must be done in several languages.
    All in all, in spite of the reservations, he
    agrees that advertising is, to a certain extent,
    profitable for him.

18
Case1 Paavo (machine contracting)
  • Statement 6 It is difficult to work things out
    with my clients by talking. For Paavo, it is easy
    to agree with this statement. His immediate
    response goes as follows
  • 1 Paavo This is exactly how it is.
  • 2 Interviewer So this fits.
  • 3 Paavo It is right then (well), it is
    exactly, you couldnt say it any better.
  • 4 Interviewer ((laughs))
  • 5 Paavo They are in the dominating market
    position and, well they have 6 control over
    how much money you get from these ( ). When you
    cant
  • 7 really influence those just like those
    rates, you cant influence them in
  • 8 any way, you just have to listen.
  • ---
  • 12 Paavo There is no, there is really no, yes
    these gentlemen well, they call it negotiation
    but it is,
  • 13 I think it is entirely a matter of
    dictation.

19
Case1 Paavo (machine contracting)
  • Excerpt shows that Paavo takes a clear stand for
    the statement. He justifies his view also quite
    credibly. His client is in the dominating market
    position the representatives of the Company name
    the prices, and there is no way Paavo can affect
    the tariffs. According to Paavo, in the
    negotiations with the client the role of the
    contractors is to listen, and accept the
    decisions made. In the end the interviewer asked
    if there are any issues open to debate with this
    client. Paavo mentions some examples, but
    stresses that they are only minor issues in his
    business.

20
Case 2 Mika (tourism)
  • Statement 6 It is difficult to work things out
    with my clients by talking. Mika absolutely
    disagrees with the sixth statement. He justifies
    his stand by giving examples of managing negative
    feedback, which he in his own words rarely
    receives. He claims that it is a fundamental
    thing to work things out by talking, and
    emphasises the need to be flexible enough in
    order to prevent small problems becoming bigger
    ones.
  • In his further commenting he gives two examples
    of unsatisfied customers, who have tried to get
    some of their money back afterwards. Both
    incidents happened when the marketing company,
    The Agency, was the intermediate reseller for
    him, and both unsatisfied customers directed
    their feedback and claims to the intermediate,
    not directly to our interviewee. Mika continues,
    that there have been no such difficulties after
    he has done the business directly with the end
    users, without the intermediate organization. In
    other words, Mika views it quite beneficial that
    he has been able to establish a direct channel to
    sell his services to the end users.

21
Case1 Paavo (machine contracting)
  • Taken together, Paavo presents himself in his
    argumentation as an actor who does not have much
    personal control over his success, at least in
    terms of marketing and customer related means. He
    has no use for advertising and no need for
    salesmanship, he has not been able to
    differentiate his service, and renewing the
    business is difficult due to financial issues. A
    close customer relationship could be beneficial,
    but he does not mention of having any. He is not
    able to negotiate with his client and for him it
    is not possible to be selective with his
    customers or contracts. He is actually able to
    mention only one thing, with which to affect the
    customer. That is the quality and
    cost-effectiveness of his production work.

22
Case 2 Mika (tourism)
  • In all, Mika has lots of rhetorical resources to
    make a presentation of an entrepreneur who has
    personal control in the market arena. He argues
    for the usefulness of the various means of
    control that are mentioned in the statements, and
    he is able to justify his comments by referring
    to his own experiences and practices, and giving
    illustrative examples, too. He also considers the
    limitations of the different means and tells how
    he has learned to use them in the course of time.
  • Mika refers to vertical relations in his
    argumentation. Even though disconnected from the
    marketing agency, he mentions it in many
    occasions and emphasises that he keeps avoiding
    the situation in which he would be dependent on
    the marketing agency or on too few customers.

23
4. The construction of personal control in the
rhetoric of farmers involved in business
diversification conclusion
  • Clear differences in self-presentations (The
    other 38 cases fell somewhere in between these
    two extreme cases extra variety in rhetoric )
  • Self-presentations were actively constructed by
    the interviewees
  • Construction was constrained/enabled by the
    availability of rhetorical resources provided by
    the perceptions and experiences of own activities
    and position in relation with customers
  • Personal control in the market arena appears as a
    socially constructed belief, which is embedded in
    the immediate social transaction context

24
5. Personal control beliefs among rural small
business owners and farmers
  • Follow-up of Vesala Peura 2003
  • A postal questionnaire survey 2006
  • Total sample 1093 (response rate 30)
    Conventional farmers (n 235), farmers with
    business diversification (n663), non-farm rural
    small business owners (n195)
  • General purpose to compare the level of
    entrepreneurship in these groups on several
    dimensions
  • Aim of this presentation to show quantitative
    differences in personal control belief between
    these groups and point out the special relevance
    of personal control in the study of
    entrepreneurial self and agency

25
5. Personal control beliefs among rural small
business owners and farmers
  • The items used in the measurement of personal
    control
  • To a great extent I can personally control the
    success of my firm,
  • My personal chances to influence the
    successfulness of my business are practically
    rather low (inverted),
  • I am able to affect the success of my firm
    through decisions concerning products and through
    production,
  • I am able to affect the success of my firm
    through marketing and customer connections.
  • (Cronbach alfa for the sum variable .77)

26
Figure 1. Experience of personal control among
the sample groups in year 2006. The proportion
of respondents who partly or strongly agree with
the statements
27
Table 1. Correlations (Spearman) between personal
control and some other variables
Variable Correlation
age -.03
sex -.04
education .07
revenue year 2006 .16
non-family employees .26
competitiveness .39
profitability .19
customer activeness .39
28
Table 2. Best predictors of personal control
experience. Linear regression analysis
Dependent variable Predictors Beta-value std. Beta t-value
Personal control
Customer activeness .32 .30 8.71
Competitiveness .36 .26 7.26
Profitability .09 .09 2.73
Model R Square.25 adjusted R Square.24
29
Figure 2. Competitiveness and profitability among
three sample groups. Proportionate distributions.
30
Figure 3. Customer relationships and non-family
employees among three sample groups.
Proportionate distributions.
31
5. Personal control beliefs among rural small
business owners and farmers conclusion
  • Results from 2006 conform to results from 2001
  • Personal control in business significant (.001)
    differences between the three groups
  • Differences in personal control beliefs were
    connected to differences in business (esp.
    competitiveness customer activeness)
  • These results are understandable in the light of
    the qualitative analysis of the construction of
    personal control belief in the self-presentations
    of diversified farmers
  • These results are statistical generalizations
    based on the responses by farmers and small
    business owners. They do not falsify the
    interpretation of personal control beliefs as
    social constructions. However, they do not
    uncover the active role of the individual in the
    construction process, nor do they uncover the
    variety and richness of details at the level of
    individual cases

32
5. Personal control beliefs among rural small
business owners and farmers afterword
  • Entrepreneurial self and agency should be
    understood as a multi-dimensional construct
  • e.g. the differences between the three group vary
    on different dimensions

33
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34
Entrepreneur identity
F28.3, plt.001 Pairwise comparison Conventional
farmers weaker than other groups, no significant
difference between the other two groups.
35
Correlations between entrepreneur identity,
personal control, self-efficacy, innovativeness,
risk-taking, growth orientation and conservatism.

Entr. Identity Risk Inno Growth Conserv. Self-efficacy
Risk .197
Inno .262 .460
Growth .260 .273 .425
Conserv. -.351 -.557 -.408 -.429
Self-efficacy .428 .326 .331 .388 -.374
Personal control .400 .139 .442 .276 -.358 .556
All correlations plt.001
36
6. Final conclusions I
  • It seems possible and worthwhile to complement
    the previously proposed cognitive approach in the
    social psychology of entrepreneurship with a
    social construction approach that analyses the
    formation of entrepreneurial self in different
    contexts
  • -the typical research questions differ (e.g.
    what intrapsychic factor contributes to business
    start-up behavior, how do business owners
    construct their identity).
  • -therefore, the choice of approach must depend,
    of course, on the particular contexts under
    study, and the particular research interests

37
6. Final conclusions II
  • Self and agency related concepts (such as the
    control constructs) can be utilised also in the
    social construction approach, not only in the
    cognitive approach
  • -theoretical (ontological) assumptions connected
    to these concepts must be discussed, however.
    (Cognitive) constructivism is a relevant issue
    here.

38
6. Final conclusions III
  • Both qualitative and quantitative methods can be
    utilised in social construction approach
  • -although qualitative methods suit particularly
    for uncovering the active role of the individual
    as well the variation and detailed nature of the
    construction processes, while quantitative suits
    for searching generalizations on the base of
    already constructed variables

39
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40
Introduction
  • Research on entrepreneurship is
    multidisciplinary economics, management studies,
    psychology, sociology
  • Distinction between small business ownership and
    entrepreneurship (Carland et al 1983)
  • - dynamic process start-up, growth, major
    change of the venture
  • - generic orientation or mode of action
    innovation, risk-taking, pro-activeness, pursuit
    of opportunities (not only within small
    business!)

41
2. Social construction approach Conclusion
  • Social construction of entrepreneurial self?
    (comp. Baumeister)
  • -Reflection Individual reflects upon her action
    and agency, on her relations with others, (e.g.
    identity, self-efficacy)
  • -Relation individual must relate to others and
    to the fact that others perceive and define her
    (e.g. self-presentation, transaction)
  • -Agency Individual regulates and governs
    herself, attempts to influence and control her
    situation and environment (e.g. utilising
    contacts and networks, managing impressions)

42
Case2 Paavo (machine contracting)
  • Paavo does not make a self-presentation of an
    entrepreneur with personal control. Our
    interpretation is that there would not be much
    rhetorical resources available for him to do so.
    Additional grounds for this interpretation can be
    found in Paavos commenting during the third
    statement
  • 25 Paavo It is a little like, difficult
    because this is goddamn difficult to
  • 26 interview, this forest machinery business
    well, these questions dont kind
  • 27 of dont apply. Its fucking difficult to
    answer them.
  •  
  • Paavo grows inpatient with the statements and
    expresses his feelings by cursing. This kind of
    meta-level comment gives additional support to
    our interpretation, that for Paavo the rhetorical
    resources based in his own practical experience
    are lacking. Even though Paavo is able to view
    the usefulness of the different means on a
    general level (statements 1, 2, and 5), he is
    unable to do that is his own case and unable to
    draw examples from his own business activity.
    Anyhow, it became evident from his comments that
    he wished he had more personal control.

43
Case21 Paavo (machine contracting)
  • All in all, based on his argumentation on the
    market-related personal control, Paavo fails to
    construct himself an entrepreneurial identity.
    And as a matter of a fact, right after the
    tape-recorded interview, Paavo doubted explicitly
    whether he should be regarded as an entrepreneur
    at all because in his business he is lacking the
    space to pursue and control his success. Mika, on
    the contrary, gave the impression that he
    considers himself to be an entrepreneur (see
    excerpt 3)
  • The difficulty in constructing entrepreneurial
    identity in the case of Paavo seems to be related
    to the vertical position, in which there is only
    one buyer, and the relation between the farmer
    and the buyer is asymmetrical and hierarchical,
    the latter being a large company and the former
    running a small business.
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