Mobile App Marketing - Managing Human Capital and Entrepreneurship

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Attribution theory states that people with high sense of self-efficacy attribute their failure to insufficient efforts and not their lack of abilities.

Expectancy-value theory states that an individual’s perceived self-belief or self-efficacy makes him have some expectations about the outcomes of different behaviours which in turn motivate them to perform certain actions.

Goal theory states that goals are set by individuals by virtue of their self-efficacy and satisfaction is derived only when those goals are accomplished. Thus setting goals act as a sense of motivation.

The last two theories support the positive role played by self-efficacy in the motivation of an individual during business start-up which in turn motivates others.

Self-efficacy in producing change

A business start-up process requires interaction with the environment, identification of opportunities, developing an idea, modifying it and finally innovating (Korunka et al., 2003).

Various works has shown that self-efficacy played an important role in determining the intensity of entrepreneurial intentions which would lead to some entrepreneurial action (Boyd and Vozikis, 1994). An entrepreneur has to implement an idea that has not been patented before. Thus he or she brings about a change.

CRITICAL ANALYSIS

In the first part of the literature review it has been mentioned that individuals become self-efficacious about the goals that are to be set depending upon the perception of their capabilities and their field of interests which in turn help them mobilise the resources needed. However it may be argued that people with strong sense of self-efficacy may are very productive in gathering and utilising their cognitive and non-cognitive resources that may not be essentially in their area of interest. If it’s about combining different subjects and generating an idea then the mobilisation of resources would also be impacted by the intensity of self-efficacy belief that the individual has in general, irrespective of the domain of work (business start-up).

While talking about the motivational effects of self-efficacy in a business start-up, the theories put forward by many erudite, indicates the greater influence of self-efficacy in motivating an individual as compared to motivating others.

Analysing the effects of self-efficacy in producing changes, it can be strongly agreed that self-efficacy positively impacts the process of innovation. Implementing an idea that is absolutely new to the market and adding value to it involves a considerable amount of risk-taking and self-confidence or perceived self-belief. Individuals lacking self-efficacy may drop a brilliant idea thereby committing an ‘error of omission’.

Other traits of successful entrepreneurs

Apart from this, there are a number of important traits that many successful entrepreneurs have. These traits can be discussed under the following heads-

Need for achievement- According to McClelland (1961), the desire to accomplish something difficult and different from others leads to entrepreneurial intention. It is the need for achievement that acts as an impetus to undertake responsibilities properly and becoming successful (Sagie and Elizur, 1999). Thus need for achievement leads to engagement in entrepreneurial activities.

Need for autonomy- An entrepreneur generally has a strong urge for independence. An entrepreneur always tries to do things that stand out from what the majority does and to do so he or she likes to work in their own way. Since an entrepreneur has an opportunistic mindset, he or she has to think differently without someone else’s interference, which makes them seek more independence. This trait, although doesn’t have a firm relationship with entrepreneurial behaviour, can be considered to be the one common in many successful entrepreneurs.

Locus of control- This is an individual’s perception on how his or her destiny is controlled. For an entrepreneur, the locus of control is ‘internal’ as has been observed by scientists as they believe they can control the environment in which they function, in contrast to non-entrepreneurs. Others are said to have an ‘external’ locus of control which means that outside forces have a control on their lives. This perceived belief of entrepreneurs of controlling their fate is highly attributed to their success in venture start-ups.

Risk-taking propensity- This is one of the most notable characteristics of entrepreneurs. According to Mill (1848), it is the risk-bearing attitude of entrepreneurs that differentiates them from the term ‘managers’. Entrepreneurs in general have an instinctive feeling of associating future gains with taking certain amount of risk. According to de Vries (1985), as cited by Stokes and Wilson (2010), it is their desire to prove themselves over and over again that often drives them to having a risk-taking mindset. Entrepreneurs are said to be bigger risk-takers than managers and paid employees (Masters and Meier, 1988,31). One of the best examples of risk-takers is George Soros, one of the biggest names in currency trading, who sold about $10 billion in 1992, thereby earning huge profits from his trades.

Tolerance of ambiguity- One of the most essential qualities of a successful entrepreneur is his or her tolerance of ambiguity. Tolerance of ambiguity measures an entrepreneur’s ability to withstand and overcome the fear of uncertainty and failure. Fear of financial losses, uncertainty of success, bankruptcy, humiliation, failure etc. are some of the barriers which may put the implementation of an idea or taking forward a started-venture in crucial situations on the back-foot. Entrepreneurs with high tolerance of ambiguity shall overcome such mental barriers and move forward thereby becoming successful. Research has also shown that people who have a high ambiguity tolerance are more innovative (Carland et al., 1989).

Education- It has often been found out that more the education of an entrepreneur, more is the individual’s ability to lead or manage a group of people. Education, especially in small businesses positively impacts success in the current venture. Formal education and some experience in the domain of the current venture have been found out to be positively related to the odds of success in business start-ups (Vesper, 1980). Larry Page, the co-founder of Google one the biggest names in the digital era is an alumni of Michigan and Stanford university, USA who along with his partner had a plethora of knowledge in data-mining and other sections related to the