Entrepreneurship and Differences in Locus of Control

Abstract

IntroductionFor several decades, researchers have attempted to identify individual differences that distinguish entrepreneurs from their less counterparts in the population so as to classify and understand the nature of the entrepreneurial personality. Constructs in the psychological and cognitive domains have been most often invoked in the quest to find correlates with behavior (Chen, Greene, & Crick, 1998; Gatewood, Shaver, & Gartner, 1995; Mitchell, Smith, Morse, & Seawright, 2002; Shaver, Gartner, Crosby, Bakalarova, & Gatewood, 2001). In addition, there has been an attempt to study other common characteristics of entrepreneurs such as certain demographic variables in pursuit of the idea that higher frequency of such variables among entrepreneurs might lead to identifying a profile of those most likely to engage in activity (Littunen, 2000; Reynolds, Carter, Gartner, Greene, & Cox, 2002). Demographic characteristics such as gender and ethnicity that might be more common among nascent entrepreneurs than what would be expected in the general population are examples of such characteristics that have been considered in the attempt to better understand propensity.Nevertheless, the notion seems intuitively evident that individuals should be distinguishable by virtue of certain psycho-social characteristics. Most notably, the locus of control construct is based on the presumption that a cognitive continuum exists such that some individuals have a strong belief in personal control of their own destiny (i.e. internal locus of control) while others tend to have greater belief in the power of luck or fate in impacting the events that shape their lives (Rotter, 1966).The purpose of this study is to provide greater insight with regard to the relevance to the locus of control construct in understanding individual differences in behavior. Due to disparities in the literature regarding locus of control, we reanalyzed the PSED dataset and offer an alternative view of the locus variable in order to determine whether domain specific beliefs about personal control of outcomes predicts behavior. If locus of control can explain some of the variance in behavior, it has value for the development of potential entrepreneurs with regards to their expectations about their personal ability to successfully exact outcomes and enables us to better understand one of the cognitive components of personality that impacts the tendency to engage in new ventures (i.e. Kickul, Gundry, Barbosa, & Whitcanack, 2009). Further this study considers other individual differences (i.e. gender and ethnicity) which may interact with locus of control in predicting behavior. If in fact gender differences and ethnicity differences in the importance of strong belief in personal control of outcomes is found among female and minority entrepreneurs, results might explain differences in activity among members of these groups as compared to males and non-minority entrepreneurs. Further, such results would indicate an even greater need to assist potential female and minority entrepreneurs in gaining a sense of self efficacy within the domain. Finally, the importance of locus construct within the field of entrepreneurship is valuable in that it may lend to a better understanding of the continuation of firms in early years of the start-up process when most nascent entrepreneurs face the biggest challenges. If an internal disposition toward outcomes is characteristic of successful entrepreneurs, the usefulness of the locus construct becomes all the more apparent.Locus of Control & EntrepreneursIn prior studies examining locus of control in the workplace, internal locus has been reported to be positively related to favorable work outcomes, such as positive task and social experiences, greater job motivation (Ng, Eby, & Sorensen, 2006), decision making (Hendricks, Vlek, & Calje, 1992; Kaplan, Reneau, & Whitecotton, 2001), satisfaction (Judge & Bono, 2001; Kimmons & Greenhaus, 1976), goaldifficulty and self-ratings of performance (Bigoness, Keef, & duBose, 1988), and to have a significant impact on venture growth rate (Lee & Tsang, 2001). …

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