psychological interventions for effective entrepreneurial mindsets michael frese nus, business...

Psychological Interventions for Effective Entrepreneurial Mindsets

Michael Frese

NUS, Business School, Dept. of Management and Organization,

Singaporeand Leuphana, Univ. of Lueneburg,

Germany

World Bank: Impact Evaluation Workshop: Trade up and Compete,

Istanbul May, 2015

Outline1) Action perspective in entrepreneurship2) Training from an action perspective3) Training for entrepreneurial success 4)Training for non-entrepreneurs (BA students) to develop an entrepreneurial mindset and higher start-up rates

Action characteristics

•Personal initiative•Goals/visions•Search for opportunities•Information search•Planning•Feedback processing•Social networking•Develop niche•Develop resources•Deliberate practice

Entrepreneurial success•Phase I: opportunity identification•Phase II: refinement of business concept and resource acquisition – starting an organization•Phase III: survival and growth• Exit

Environment•Life cycle•Dynamism•Unpredictability•Hostility•Industry

Personality•Need for achievement•Locus of control•Autonomy•Generalized self-efficacy•Innovativeness•Stress tolerance•Risk taking

Motivational/affective antecedents

•Passion•Positive/negative affect•Self-efficacy•Entrepreneurial orientation

Intellectual Resoures•Education (school, occupational)•Mental abilities•Models in family or environment

Cognitive antecedents•General and specific knowledge•Tacit knowledge•Entrepreneurial orientation•Expertise (practical intelligence)•Heuristics/biases

National culture

The action-characteristics-model of entrepreneurship - modified The action-characteristics-model of entrepreneurship - modified Frese, M., & Gielnik, M. M. (2014). The psychology of entrepreneurship. Annual

Review of Industrial and Organizational Psychology, 1,

413–438.



Entrepreneurial success







National culture



413–438.

Actions in Entrepreneurship

Mindset:

Set the mind for action

At first sight trivial, when examined in some detail, quite interesting

Frese, M. (2009). Towards a psychology of entrepreneurship: An action theory perspective. Foundations and Trends in Entrepreneurship, 5, 435–494.

Active Mindset = Personal Initiative

• Self-starting• Pro-active (future oriented)• Overcoming barriers• Changing the environment

The Opposite of Personal Initiative Is the Reactive Approach:• Does what one is told• Is oriented towards now, not future• Stops when difficulties arise• Reacts to environment

Meaning of Self-Starting

• Self-starting is different from the “normal” or obvious approaches (social comparison approach) • Doing the obvious self-starting is low• If an entrepreneur takes up an innovation that is “in the air”, that they see others do or talk about, it is not self-starting

Meaning of Pro-Active

• Scanning for opportunities and problems that may appear in the future

• Preparing now for dealing with future problems and exploiting future opportunities

Meaning of Overcoming Barriers

• Protecting one’s goals and adapting one’s plans to overcome problems on the way towards the

goal • Actively dealing with problems instead of giving

up• Dealing with own anxieties and frustrations – self-regulation

Empirical Research: Personal Initiative has been shown to be related to better performance on

several levels:

1)Personal Initiative of Owner and Entrepreneurial Success

2)Personal intiative of the employees leads to higher employee performance

3)Personal intiative of the employees leads to higher firm success

Relationship Between Personal Initiative and Entrepreneurial Success in Uganda (Correlation)

r with Success

Initiative .42**

Replicated several times

(Koop, S., De Reu, T., & Frese, M. (2000). Sociodemographic factors, entrepreneurial orientation, personal initiative, and environmental problems in Uganda. In M. Frese (Ed.), Success and failure of microbusiness owners in Africa: A psychological approach (pp. 55-76). Westport, Ct.: Quorum.Replicated e.g., in Utsch, A., & Rauch, A. (2000). Innovativeness and initiative as mediators between achievement orientation and venture performance. European Journal of Work and Organizational Psychology, 9, 45-62.)

Relationship Between Employee Personal Initiative and Employee Performance (Meta-Analysis of 6-20

Studies; Corrected Correlation)

Correlation of Personal Initiative with Individual Performance

Corrected meta-analytic correlations: .20 ** to .26**

(Tornau, K., & Frese, M. (2013). Construct clean-up in proactivity research: A meta-analysis on the nomological net of work-related proactivity concepts and their incremental validities. Applied Psychology: An International Review, 62, 44–96.Performance measured by objective performance, e.g., sales or performance evaluation by supervisor)

Personal Initiative of Employees (as Organizational Culture/Climate) Causes Changes in

Entrepreneurial Success (small to mid-sized firms in Germany)

Baer, M. & Frese, M. (2003) Innovation is not enough: Climates for initiative and psychological safety,process innovations, and firm performance; Journal of Organizational Behavior, 24, 45-68

Company Level: Climate for Initiative Items

• People in our company actively attack problems.

• Whenever something goes wrong, people in our company search for a solution immediately.

• Whenever there is a chance to get actively involved, people in our company take it.

• People in our company take initiative immediately – more often than in other companies.

• People in our company use opportunities quickly in order to attain goals.

Climate for Initiative and Return on Assets of Medium-Sized

German Firms Holding constant Process Innovativeness, Size, and Industry codes, prior Return on Assets predicting future Return on Assets: R .30**

Baer, M. & Frese, M. (2003) Innovation is not enough: Climates for initiative and psychological safety, process innovations, and firm performance; Journal of Organizational Behavior, 24, 45-68

The Opposite of Personal Initiative: Reactive Action Strategy of Business

Owner- Little active preplanning - Low level of personal initiative- Low level of active search for opportunities- Strong amount of mimicking others- Often rather helpless: I do what others do as well

0

10

20

30

40

50

High Low

Reactive strategy

% o

f hi

ghly

suc

cess

ful

owne

rs

Reactive Strategy in South Africa

6%

39%

Reactive Approach and Entrepreneurial Failures: Vicious Cycle (Spiral)(Netherlands and Zimbabwe)

Reactive

Reactive NonSuccess

NonSuccess

Time

Van Gelderen, Frese, Thurik (2000) Strategies, uncertainty and Performance of small business startups. Small Business Economics, 15, 165-181. Zimbabwe data not yet published

Facets of Action Training (Action Regulation Theory)

1) Developing an action-oriented mental model - cognitive representation is based on ”rules of thumbs” (principles of actions)

2) Learning by doing: Active and exploratory approach to learning from action, BUT not blind and mindless action (science helps here to develop better mental models)

3) Cognitive apparatus is built for action; exercises have to be connected to principles of actions which can only be learnt, when connected to actions

4) Feedback: Both positive and negative feedback is provided by the trainer.

Facets of Action Training – 2 – 5) Negative feedback is given in contrast to

classical learning theory; negative feedback has a positive motivational and cognitive effect (understanding, how not to do certain things and being motivated that one still needs to improve skills)

6) Supporting transfer: Principles of actions can be adjusted to real life tasks. Connection to real life tasks is drawn continuously during the training (thinking about how principles can be used in everyday actions and by asking participants to say when they use the newly acquired skills; application contract

Facets of Action Training – 3 –

7) Necessity to routinize behavior: New skills developed during the training compete with old skills that have been routinized. Therefore, routinization of the new behavior needs to be encouraged both in the exercises and afterwards

Frese, M., Beimel, S., & Schoenborn, S. (2003). Action training for charismatic leadership: Two evaluation studies of a commercial training module on inspirational communication of a vision. Personnel Psychology, 56, 671-697

The Action Sequence

Goal

Information search

Planning

Monitoringof execution

Feedback

Frese, M., & Zapf, D. (1994). Action as the core of work psychology: A German approach. In H. C. Triandis, M. D. Dunnette, & L. M. Hough (Eds.), Handbook of industrial and organizational psychology (2 ed., Vol. 4, pp. 271-340). Palo Alto, CA: Consulting Psychologists Press

What does an active mindset mean for

-Setting goals-Information search

-Planning-Feedback development and processing

Identifying self-starting and reactive behavior in your daily routine

Part 1 – Instruction:

Work in teams of two. Please write down the business activities of your last working day (write down even small activities like cleaning up your shop/your desk). Tell your partner about your working day.

26

Exercise: Daily routine WS 3

27

Example: Daily routine of the owner of a small grocery store

Time Business activity

8.00 Open store and put up the usual advertisement outside the store.

Waiting for the first customer to come.

Phone call from supplier: he is not able to deliver fresh fruits today. This happens already for the third time within the last two weeks. Hope it will get better soon.

Serving the customers. Some leave the store without buying anything because they were only looking for fresh fruits. Sending these customers to competitor next street.

Not many customers today, thus calling some friends by phone to use the time for chatting.

Cleaning the outside-advertisement and the display.

Serving customers.

Closing the store.

Counting sales and calculating the turnover for today – not a good day…

- 8.45

9.00

9.30

11.00

13.00

14.30

- 20.20

20.00

Exercise: Daily routine

Identifying self-starting and reactive behavior in your daily routine

Part 2 – Instruction:

Look at your daily plan: What was not good? Where have you been passive and reactive? Where did you not act self-starting?

Write down alternative good and self-starting behavior you could have shown.

28

Exercise: Daily routine WS 3

Frese, M., & Fay, D. (2001). Personal Initiative (PI): A concept for work in the 21st century. Research in Organizational Behavior, 23, 133-188.

Action sequence

Goals / redefinition of tasks

Information collection and prognosis

Self-starting

-Active goal redefinition

-Active search, i.e. exploration, active scanning

Proactive

-Future problems and opportunitiesconverted into goals

-Consider future problem areas and opportunities

Overcome barriers

-Protect goals when frustrated or taxed by complexity

-Keep search up in spite of complexity and negative emotions

Facets of Active Performance

Action sequence

Plan and execution

Feedback

Self-starting

-Active plan

-Self-developed feedback and active search for feedback

Proactive

-Back-up plans (action plans for oppor-tunities ready)

-Develop pre- signals for potential problems and opportunities

Overcome barriers

-Overcome barriers Quick return to plan when disturbed

-Protect feedback search

Facets of Active Performance -2-

Action Principles, e.g., in the Area of Planning • Self-starting: your plan must imply that you can execute it without waiting for things to happen. Make an active plan!• Proactive: future thinking! What opportunities may occur in the future? Make a plan for future opportunities and problems! Develop a back-up plan.• Overcoming barriers: anticipate possible problems and return to plan quickly when disrupted • consider what you need to reach the goal • Write down actions • Weekly plans with next steps•While doing this, also practice the use of creativity techniques on own business problems (DeTienne & Chandler, 2004)•Participants develop the plans or practice the techniques on their own, before sharing it with a partner, and subsequently within the group.• Developing a 6 months plan to change something significantly in the business and start that change now

PI Training Results Before/1 Year After Training – Uganda

Measures M(before) M(after) d Sign.

Behavior Based Measures:

Personal Initiative TG -.22 .55 1.53 **

control group .19 -.48

Sales TG 2.67 M 3.39M (.30) ** control group lower with time

Number of employees TG 7.88 10.67 (.56) **control group 6.64 4.98

Personal Initiative proved to be a Mediator for success--------------------------------------------------------------------------TG= Training group, CG= Control Group, d= group differences after training; z-standardized scales

Glaub, M., Frese, M., Fischer, S., & Hoppe, M. (2014). Increasing personal initiative in small business managers/owners leads to entrepreneurial success: A theory-based controlled randomized field intervention for evidence based management. Academy of Management Learning & Education, 13, 354-379.

Personal Initiative, TG= Training Group CG= Control Group – Randomized Controlled

Experiment



Overall Business Success (TG= Training Group, CG= Control Group) – Randomized Controlled Experiment

The Mediation Steps of Baron and Kenny and Preacher

TrainingPersonal

Initiative T3Success

Step 1: Effect of Training on Post Training Overall Personal Initiative Scale (T3)

The Mediation Steps

TrainingPersonal Initiative

Success T4

Step 2: Effect of Training on the Post Training Overall Success Scale (T3/T4)

The Mediation Steps

TrainingPersonal

Initiative T3Success T4

Step 3: Effect of the Post Training Overall Personal Initiative Scale (T3/T4) on the Post Training Overall Success Scale (T3/T4)

The Mediation Steps

TrainingPersonal

Initiative T3Success T4

Step Analysis 4: Effect of Training on the Post-Training Overall Success Scale (T3/T4) when controlling for Post-Training Overall Personal Initiative Scale (T3/T4)

Success Cases1) One participant produced cheap aluminum saucepans of low quality - a highly competitive market in Kampala. Due to his participation in the training, he decided to switch to higher quality production to target a better paying customer group and to differentiate his business from his competition. He invested in testing his products at the National Bureau of Standard (NBS). Based on detailed feedback of quality deficiencies, he managed to improve the production process (e.g., by applying special tools) and finally was certified by the NBS. With the quality certificate, he approached a wholesaler for household articles and succeeded in securing a large order that was worth about 10 million Ugandan Schillings and that kept him and three cooperating firms busy for more than one year.

Success Cases2) A second participant produced and sold pastries in her small bakery located in a sparsely inhabited and relatively poor neighborhood about three kilometers outside of Kampala center. After taking part in the training program, she decided to extend her customer base outside her neighborhood in order to gain independence from the local market and to increase profit. She wanted to reach these goals by displaying her pastries in a big supermarket in the town center. She started out by checking the product range of various supermarkets and found one displaying only a few varieties of cakes. She baked cakes that differed by form, color, and ingredients from those offered by the supermarket and approached the manager with samples. She managed to convince him of the attractiveness of her cakes to potential customers and was permitted to display the cakes in the supermarket on a commission basis. Her plan worked out and both her turnover and profit increased.

Success Cases3) The third participant owned a successful, nationwide funeral service; she had already thought about expanding her services to neighboring countries before participating in the training program. What had kept her from realizing this idea were her worries about facing an uncontrollable business environment in these countries. Her participation in the PI training made her realize how important it is to shape the environment. This was the initial spark for exporting her products to Sudan and Kenya. This led, indeed, to a strong enhancement of success. In addition, one of the participants in the training group received an entrepreneurship award by the Uganda Investment Authority for this entrepreneur’s expansion of the business after participating in the training.

Training Study in South Africa

0.5 Mill

1 Mill

1.5 Mill

2 Mill

2.5 Mill

3 Mill

3.5 Mill3.56 Mill

2.13 Mill

0.61 Mill 0.56 Mill

Sales - Rand

Beforetraining

2 yearsafter training

Experimental

Control

(p<.10)

1 year after Training

(p<.05)

The STEP training concentrates on Action Knowledge (Principles of Action)

STEP= Student Training for Entrepreneurial Promotion

• Action Knowledge: Instructions for how-to-do things to be successful in entrepreneurship

• “Rules-of-thumb”, “heuristics”, or “know-how”

• Trainees are divided into groups to form start-up teams.

• In the start-up teams the trainees engage in the start-up process of a real venture.

• Teaching entrepreneurial skills requires an interdisciplinary approach from business science, entrepreneurship and psychology, including Personal Initiative

Entrepreneurial failure may happen but it can enhance future entrepreneurial success

– Ideas, projects, new products or whole businesses may fail – it’s good if they fail in a safe environment

– The STEP training deals with how to overcome negative emotions after failure

– Failure can lead to learning under certain circumstances – most important to reduce the negative emotions

– “What can be learned from failures?” and “What can be made better next time?”

The study design to evaluate the STEP training

T1Feb 2009

395 studentsInterview T1

T2Jun 2009


TrainingFeb-May 2009

T3Jan – Mar 2010


• Randomized control group design: 197 students in training group and 198 students in control group (no training)

• Gold standard for evaluation of intervention

• Increase in business owners with STEP training group: 219%.

• Compared to Control group: 45%.

“Are you currently the owner of a business?”

Business Owner

Bus

ine

ss o

wne

r (%

)

Control Group

STEP Training

51%

35%

16%24%

Repeated measures ANOVA: Interaction training * wave significant at p < .01; Eta2 = .04.

After STEP

Before STEP

The STEP training creates entrepreneurs

T1 T2 T3

Action-Oriented Entrepreneurship

Training

Entrepreneurial Action

Business Opportunity Identification

Action Knowledge

Business Owner

Entrepreneurial Action

Entrepreneurial Self-Efficacy

Entrepreneurial Goals

Action Planning

Figure 1. The theoretical modelFigure 1. The theoretical model

Effect Size

Measure BeforeTraining

AfterTraining

Inter-actioneffect

Groupeffectafter

training

N M SD M SD df F p Eta² d

Effect of the training at T2

Action knowledge T1-T2TGCG

184153

2.862.88

1.561.67

4.453.38

2.051.42

1 17.65 < .01 .05 0.61

Entrepreneurial self-efficacy T1-T2TGCG

178118

7.877.79

1.241.13

8.297.82

1.091.05

1 10.44 < .01 .03 0.44

Entrepreneurial goals T1-T2TGCG

178118

4.194.17

0.730.78

4.264.07

0.610.63

1 2.88 < .10 .01 0.31

Action planning T1-T2TGCG

184153

2.452.24

1.541.51

3.392.61

1.801.50 1 5.53 < .05 .02 0.47

Business opportunity identification T1-T2TGCG

184153

1.651.60

0.760.84

1.781.46

0.830.70 1 7.70 < .01 .02 0.42

Entrepreneurial actions T1-T2TGCG

184153

1.071.03

1.301.08

1.481.09

1.531.25 1 3.97 < .05 .01 0.28

Effect of the training at T3

Business owner T1-T3TGCG

162142

0.160.24

0.370.43

0.510.34

0.500.47 1 14.72 < .01 .05 0.35

Entrepreneurial action at T3

Model 1 Model 2 Model 3

UnstandardizedCoefficient

SE β UnstandardizedCoefficient

SE β UnstandardizedCoefficient

SE β

Intercept 1.65 0.14 0.19 0.86 0.14 0.86

University 0.20 0.26 0.04 0.25 0.26 0.05 0.21 0.26

Entrepreneurial action at T2 0.31** 0.07 0.26 0.30** 0.07 0.24 0.32** 0.07 0.26

Action knowledge 0.12* 0.06 0.13 0.12* 0.06 0.13

Entrepreneurial self-efficacy 0.12 0.10 0.08 0.12 0.10 0.08

Entrepreneurial goals 0.04 0.19 0.01 0.05 0.19 0.02

Action planning -0.07 0.07 -0.06 -0.07 0.07 -0.07

Entrepreneurial goals x Action planning

0.18* 0.09 0.12

R2 .07 .09 .11

F 10.33 4.73 4.66

Business Owner at T3

Model 1 Model 2

UnstandardizedCoefficient

SE UnstandardizedCoefficient

SE

Intercept -0.64 0.15 -1.54 0.33

University 0.22 0.32 0.20 0.33

Business owner at T2 1.45** 0.30 1.32** 0.31

Business opportunity identification at T2 0.35* 0.17

Entrepreneurial action at T2 0.27** 0.09

Nagelkerke’s R2 0.23 0.34

Hit rate 66% 69%

Deviance 367.33 352.33

Change in Deviance (χ2) 25.75 15.00

The STEP training has a positive impact on all three factors crucial

for venture creation• The STEP trainees identify 22% more opportunities to

create and pursue a business than non-trainees.

• The STEP training increases entrepreneurial confidence significantly; trainees move up into top 30% of most confident trainees.

• The STEP training causes a 37% increase in entrepreneurial activities to start-up a business.


Business Owner

Bus

ines

s ow

ner

(%)

16%

24%

Repeated measures ANOVA: Interaction training * wave significant at p < .01, Eta 2 = .04 (T3) and p < .01, Eta2 = .04 (T4).

The STEP training creates entrepreneurs

35%

51% 48%

63%

T3 T4T1

STEP

Control Group

“How many full- / part-time employees do you have?”

The STEP training creates job creators

Repeated measures ANOVA: Interaction training * wave significant at p < .05, Eta 2 = .02 (T3) and p < .05, Eta2 = .02 (T4).

STEP

Control Group

T3 T4T1 T2

0

1

2

3

Number employees (total)


Business Owner

Bus

ines

s ow

ner

(%)

Repeated measures ANOVA: Interaction training * wave significant at p < .05, Eta 2 = .03 (T3) and < .05, Eta2 = .04 (T4)

Results from Liberia: Effects are consistent and generalizable across countries

55%

71%

T3

17%23%

T1

STEP

Control Group

55%

77%

T4

Entrepreneurial Action at T4 (all participants)

Ent

repr

eneu

rial

act

ion

T-tests at T4: p < .10 (all students); p < .05 (only business owners)

Control Group (CG)

After 1 year, STEP trainees remain more entrepreneurially active; even as owners

2.78

2.28

CG STEP

Entrepreneurial Action at T4 (only business owners)

Ent

repr

eneu

rial

act

ion

2.60

1.90

CG STEP

STEP

Continued entrepreneurial activity leads to portfolio entrepreneurship and more value

Control Group STEP Training

• STEP trainees run more businesses at the same time (portfolio entrepreneurship)

• STEP trainees generate more revenue and jobs across all their active businesses

# of employees per business owner 1.18 1.98 sig.

Monthly revenue across businesses 242 USD 414 USD

Number of firms per entrepreneur 1.05 1.19 sig.

Margin.sig.

T-tests at T4: p < .10 (average monthly revenue); p < .05 (number of active businesses, number of employees)

Number of total businesses per person (T4)

Num

ber

of b

usin

esse

s

T-tests at T4: p < .01 (number of total businesses, number of total employees)

Control Group (CG)

After 1 year, STEP successfully boosts the total number of new ventures and new jobs

0.90

0.60

CG STEP

Number of total employees per person (T4)

Num

ber

of e

mpl

oyee

s

1.51

0.67

CG STEP

STEP

Key factors for start-up: confidence, identifying opportunities, action, planning

• What factors explain why some students start a business while others do not?

Entrepreneurial Action“So far, did you do anything to get the business up and running?”

Entrepreneurial Confidence“How confident are you that you can [different entrepreneurial tasks] well?”

Identifying Opportunities“How many opportunities for creating a business have you identified / pursued in the last three months?”

Entrepreneurial Planning“What are you planning to do to start the business?”

Number of Jobs Created as a Result of STEP Training (1 ½ years after training in Uganda)

• Per 100 STEP trainees 38 more jobs were created within 18 months than in 100 members of the control group

Countries for STEP Training • Uganda – about 4 different universities, one vocational trainings school

• Uganda high school (currently)

• Liberia

• Kenya

• Lesotho

• Tanzania

• Ruanda (currently)

• Philippines (currently)

You tube success stories• We also have some testimonials on the positive

impact of STEP from students who have participated in the STEP trainings:

• https://www.youtube.com/watch?v=AiyF-R20ywQ• https://

www.youtube.com/watch?v=t9FFZF7X7RM

https://www.youtube.com/watch?v=AiyF-R20ywQ

https://www.youtube.com/watch?v=t9FFZF7X7RM

https://www.youtube.com/watch?v=t9FFZF7X7RM

Potential Policy Implications•Integrate the training into the schools and universities•Integrate the training into other institutions•Offer training whenever entrepreneurs are to receive micro-credits•If there is government support for entrepreneurs (e.g., in Uganda for youth entrepreneurs), offer training as well•Our training may be useful in combination with pure business trainings•Check which investment has higher effects and utility: e.g., investments in developing entrepreurial networks•There is evidence that training reduces the effects of ideas that one does not have enough financial resources for starting a company. Thus, it would be useful to combine our training when providing financial support

Policy Implications•There is evidence that formal businesses only grow more than non-formal business, if the owners show a high degree of Personal initiative. Thus, it may pay off to offer training when entrepreneurs want to formalize their business (without making it mandatory because that would lead to more bureaucratic hurdles). •In the context of unemployment, it may be useful to provide training to enhance the entrepreneurial mindset.•Example of training in Germany: approx 2 Mill small and micro businesses; assume 10% participatation in 3-day course. Each participanting entrepreneur would employ approx 2-3 employees more: This would lead to approx 400,000 new employees at a training cost of approx. 500 to 1.000 Euro per participants (assuming no crowding out effects)

Literature

• Frese, M. (2009). Towards a psychology of entrepreneurship: An action theory perspective. Foundations and Trends in Entrepreneurship, 5, 435–494

• Glaub, M., Frese, M., Fischer, S., & Hoppe, M. (2014). Increasing personal initiative in small business managers/owners leads to entrepreneurial success: A theory-based controlled randomized field intervention for evidence based management. Academy of Management Learning & Education, 13, 354-379

• Gielnik, M. M., Frese, M., Kahara-Kawuki, A., Katono, I. W., Kyejjusa, S., Munene, J., et al. (2015). Action and action-regulation in entrepreneurship: Evaluating a student training for promoting entrepreneurship. Academy of Management Learning & Education, 14, 69–94.

Back-Up

Businesses started by STEP trainees after the training

• African wears, suits, shoes

• Eggs, beans, cassava

• Milk, butter, juice

• Timber, hardware, bricks

• Liquid soap

• Equipment / spare parts cars

• Soft drinks / airtime

• Radios, electronic devices, computers

• Stationery

• Snacks

• African jewelry

• Repairing and maintaining computers (companies / privat persons)

• Producing animal feeds

• Piggery / Poultry

• Training / consultancy in farming

• Producing oil

• Restaurant

• Hair saloon / cosmetic shop

• Supply big companies with seeds

• Company profile cd

• Secretarial bureau / services

• Customize cufflings

Janet and Martin: two STEP students of the first STEP training

NameJanet

Age24

SubjectComputer Science (last semester)

Family statusNot married, no kids

Relatives who are business ownersSister

Janet before the STEP training: a typical non-entrepreneurial student

• “I never thought of becoming a business owner before the STEP training. This has never been a real option for me.”

• “I was very shy and it was a big challenge for me approaching people. I thought I won’t be able to deal with all those challenges you are facing when you are an entrepreneur.”

• “I wasn’t sure whether I could get an employment.”

Typical BA student: suffers from bad job market conditions but entrepreneurship is not considered to be an option.

Janet and Martin: two STEP students of the first STEP training

NameMartin

Age25

SubjectUrban Planning (last semester)

Family statusNot married, no kids

Relatives who are business ownersUncle

Martin before the STEP training: inclined to entrepreneurship but not active yet

• “Over 17 years I spent in school and colleges, but I think I did not benefit from it so much. All the practical bit I got from the STEP training.”

• “I asked myself what do I want? Seeking my whole life to become the employee of the week or month?”

• “STEP was a turning point to my life. I learned how to plan and manage a business, rather than seeking a job.”

BA student inclined to entrepreneurship: interested in setting-up a business but lacking the practical skills

Janet attending the STEP training• Together with five other STEP

students, Janet started a “book-selling business” during the STEP training

• At the end of the STEP training, the team of entrepreneurs made 124,000 UGX profits (amount of starting capital: 200,000 UGX)

• ROI: 62%

Martin attending the STEP training

• Entrepreneurial team of six STEP students producing and selling fruit juice

• Profit of 70,000 UGX at the end of the training

• ROI: 35%

The most important learning experiences

“I learned how to overcome challenges. If your business collapses, you must start anew. Think what the problem was, what made the business collapse, then start anew.”

Developing a more persistent and positive attitude towards the risks and challenges of entrepreneurship

“I used to fear everything. STEP gave me determination and courage. If I fail, don’t give up, if you fail again, learn. There are still risks, but I don’t fear the risks any more.”

“I used to fear borrowing money. Now I have got the skills and knowledge. Now I know if I borrow money, I am able to pay back.”

The most important learning experiences

“You can use the people around you to get starting capital. You don’t have to go to banks, people can supply you. It was helpful that we learned how to approach people.”

Skills in raising starting capital and investing the money sensibly

Janet’s success story• 3 months after the STEP training:

started a poultry farm with 200 chicken in Eastern Uganda

• Supplies shops near the farm and hotels in Kampala with eggs

• Investment: 3,000,000 UGX (approx. 1,400 USD)

• Revenues: 360 – 680 USD per month

• Employs 5 people

• Currently sets-up a new business: fish firm

Janet’s success storyJanet was a typical non-entrepreneur.

The STEP training changed her attitude towards entrepreneurship.

She is now a successful portfolio entrepreneur.

Martin’s success story: stepwise to the ultimate business

• First business: restaurant in Nansana (Uganda)

• “Nansana is a busy town but we had to walk a long distance to have lunch. I got funds from my sister and some friends and opened-up a restaurant. I made good money that I could use to set-up second business.”


• Second business: restaurant in Kampala (Uganda)

• “I decided to go to Kyambogo University to open-up the second restaurant. Now I am the owner of ‘Super Restaurant’ and it is profitable. I make 20,000-30,000 per day.”


• Third business: selling construction materials

• “I want to use the money I make with my ‘Super Restaurant’ for opening-up a construction shop.”

• “I will supply bricks and other construction materials. I already looked for partnerships with factories and industry directors.”


Martin wanted to become an entrepreneur but he feared the challenges.

The STEP training provided him with skills and confidence.

He started from scratch and is now a successful serial entrepreneur.

He re-invests the profits to set-up new higher quality businesses.

Feedback by the Trainees of the first STEP Training

“The training really changed my perspective […] on business and success. Already, I am working on registering my foundation so that I can begin to partner with others.”

Turyatemba Alex, STEP student

“The training was much helpful even to those of us who thought we would never do business.”

“The practical bit of the training has introduced me to the world of entrepreneurs.”

Anonymous STEP students

The continuous identification of business opportunities

• Number of opportunities identified by STEP trainees and control group before and after the STEP training.

1.80

1.60

1.40Before STEP

Directly after STEP

6 months after STEP

Control group

STEP training

Micro businesses started during the STEP training

• Popcorn• Delicious Breakfast

Cookies• Liquid Soap• Local Brew• Selling Fruits / Fruit salad• Tema sausages• Juice• Airtime• Selling books

• Creating Greeting Cards

• Designing African Jewelry

• Consultancy at schools / drug prevention

• SPSS

• Recording prayers

• T-shirts

Businesses started by STEP trainees after

the training

• African wears, suits, shoes

• Eggs, beans, cassava

• Milk, butter, juice

• Timber, hardware, bricks

• Liquid soap

• Equipment / spare parts cars

• Soft drinks / airtime

• Radios, electronic devices, computers

• Stationery

• Snacks

• African jewelry

• Repairing and maintaining computers (companies / privat persons)

• Producing animal feeds

• Piggery / Poultry

• Training / consultancy in farming

• Producing oil

• Restaurant

• Hair saloon / cosmetic shop

• Supply big companies with seeds

• Company profile cd

• Secretarial bureau / services

• Customize cufflings

% Business owners

Control group

Training group

Before(T1)

After(T3)

Before(T1)

After(T3)

Results of action-oriented entrepreneurship training on long term Business

Start-up (1 year after Taining).

Results of action-oriented entrepreneurship training on long term Business

Start-up (1 year after Taining).

The training’s content and schedule

Ses-sion Module Steps in the Group Business Milestones

1 Introduction & Identifying Opportunities

Class:Coming-up with business ideas

Action Hour:Preparation and presentation of elevator talk

Organizing founding team (randomly)

Coming-up with business idea

2 Marketing I Action Hour: Discussion and

identification of needs in the market, business opportunities, and potential customers

Product description Customer analysis Competitor analysis

Product description

Customer analysis

Competitor analysis

The training’s content and scheduleSes-

sionModule Steps in the Group Business Milestones

3 Leadership & Strategic Management

Class:Develop Vision and Business Strategy for Paper Cup

Action Hour:Vision and Business Strategy for own business

Company Description

Industry Analysis Business Strategy

4 Planning and Implementing Plans

Class: Prepare an Operations Plan for

Paper Cup Factory Development Plan for own bus.Action Hour: Operations Plan for own business Set Milestones

Operations Plan Development plan Milestones for

starting the enterprise and plan for the necessary steps*


Ses-sion

Module Steps in the Group Business Milestones

5 Managing Finances

Class:Prepare budget for Paper Cup Factory

Action Hour:Budget for own businessInvestment Plan

Budget Investment Plan

6 Marketing II and Persuasion & Negotiation

Class: Key Marketing Decisions for

Paper Cup Factory Role Play: Persuade customerAction Hour: Marketing Strategy for own

business

Marketing Plan


Ses-sion


7 Finding Starting Capital

Class:Discussion: BootstrappingExercise: NPV, ROIRole Play: Persuade capital provider

Action Hour:Discuss Investment PlanDiscuss Sources of CapitalPrepare Starting Capital Plan

Starting Capital Plan

8 Overcoming barriers

Class: Discuss problems and setbacks Exercise: Emotion managementAction Hour: Discussion of Critical Risks

Critical Risks


Ses-sion


9 Book-Keeping I Class:Exercises: Debtors’ and creditors’ bookExercise: Income and expenditures

Action Hour:Prepare Financial Plan

10 Book-Keeping II Class: Calculate costs for the Paper Cup

Factory Profit and Loss Statement own

businessAction Hour: Finish Financial Plan

Financial Plan


Ses-

sionModule Steps in the Group Business Milestones

11 Writing the Business Plan

Class:The Management TeamExecutive Summary

Action Hour:Assembling exercises to the business planFinish full Business Plan

Full Business Plan

12 Registering the Business

Class: Presentation of group

businessesAction Hour: Organization of contact

information

Start operating

Action oriented teaching: Principles for Teachers

– Teach less theory but more principles of action!

– Explain why the content is useful for them!

– Show how the students can apply the action knowledge for their micro-business!

– Assign the trainees to work on the business plan exercise sheets! However, depending on the entrepreneurial phase trainees are in, let the trainees work on their current issues!

– Encourage the students to go ahead with their venture!

– Assign them to go out! (e.g., collect information, discuss idea with others, contact customers or capital providers)

Action oriented teaching: Principles for Teachers

• Feedback structure

– High degree of feedback necessary for learning

– Therefore: High trainer feedback in the beginning

– Phasing it out: Replaced by group feedback and self-feedback

During Action Hour: presentations by students of their current state & feedback and discussion in the class

How does the STEP training contribute to becoming a successful entrepreneur?

T1Feb 2009


T2Jun 2009


TrainingFeb-May 2009

T3Jan – Mar 2010


• Aim 1: Change the mind-set

• Identification of business opportunities

• Entrepreneurial confidence

• Entrepreneurial action

• Significant increase in opportunity identification

• STEP trainees identify 22% more opportunities

• Significant impact of STEP training on opportunity identification

“How many opportunities have you identified?”

Identification of opportunities

Num

ber

of

opp

ortu

nitie

s


After STEP

Before STEP

The STEP training has a positive impact on factors crucial for entrepreneurship

1.80

1.471.671.61

Control Group

STEP Training

• Significant increase in entrepreneurial confidence

• Trainees move up into the top 30% of the most confident

• Significant impact of STEP training on entrepreneurial confidence

“How confident are you that you can […] well?”Entrepreneurial confidence

Ent

rep

rene

uria

l con

fide

nce


After STEP

Before STEP

The STEP training has a positive impact on factors crucial for

entrepreneurship

8.30

7.83 7.887.80

Control Group

STEP Training

• Significant increase in entrepreneurial action

• 37% increase in entrepreneurial action

• Significant impact of STEP training on entrepreneurial action

“So far, what did you do to get the business up?”Entrepreneurial action

Num

ber

of

activ

itie

s


After STEP

Before STEP

The STEP training has a positive impact on factors crucial for

entrepreneurship

1.48

1.12 1.081.04

Control Group

STEP Training

STEP has a positive impact at all universities where it has been implemented

Institution

Students in TG / CG

Short-term effects on entrepreneurial mind-set (comparison TG vs. CG after training)

Long-term effects on business owners and employees (comparison TG vs. CG after training)

Makerere University & Uganda Christian University

197 / 200

entrepreneurial self-efficacy

opportunity identification

entrepreneurial planning

entrepreneurial action

6%

22%

30%

36%

T3 (1 year after T1; Feb 2010)

business owner

employees

T4 (1.5 years after T1; Sep 2010)

business owner

employees

50%

47%

31%

38%

University of Liberia

121 / 33





3%

25%

17%

18%

T3 (1 year after T1; Mar 2012)

business owner

employees

T4 (1.5 years after T1; Aug 2012)

business owner

employees

29%

31%

40%

57%

Uganda Martyrs University

133 / 49





13%

39%

16%

24%

Kenyatta University

175 / 126





12%

35%

7%

9%

University of Liberia

103 / --





2%

70%

13%

14%

Training Study in South Africa

0.5 Mill

1 Mill

1.5 Mill

2 Mill

2.5 Mill

3 Mill

3.5 Mill3.56 Mill

2.13 Mill

0.61 Mill 0.56 Mill

Sales - Rand

Beforetraining

2 yearsafter training

Experimental

Control

(p<.10)

Goosain, S., Frese, M., Friedrich, C., & Glaub, M. (2013). Can personal initiative training improve small business success? A longitudinal South African evaluation study. Entrepreneurship and Innovation, 141, 235- 248.

1 year after Training

(p<.05)

Frese, M., Hass, L., & Friedrich, C. (2014). Training business owners in personal initiative: Evaluation study in a developed country. NUS Business School and Lueneburg: submitted for publication.

Translating good evidence into practical support for action

First, establish a valid model based on meta-analysis and good evidence• Second, develop model that allows to deduce interventions• Third, translate theory and model into principles of actions• Fourth, translate principles of action into concrete change actions• Fifth, test with randomized controlled experiments• Provide examples of good actions• Provide examples of typical mistakes in these actions• Discuss potential context issues (possibly supported by moderator analysis in meta-analysis)• Provide a case study to explain how intervention can work concretely in a firm• Know that there is no recipe but only action principles

What do managers and policy makers do?

They use substitutes instead of best evidence:

-“obsolete knowledge (based on an education obtained many years ago)

-personal experience

-specialist skills (generalized to the situation)

-Hype (most recent book that everyone talked about)

-Dogma (there is no alternative)

-Mindless mimicry of top performers …” (such as benchmarking) (after Pfeffer & Sutton, 2007, p. 16).

Rynes et al. (2007) showed empirically: Managers often do not have the right knowledge (e.g., on HR)

Little understand and simply faddish use of the latest idea in the management market (David & Strang, 2006) – example of Total Quality Management

Evidence- Based Entrepreneurship

• For practitioners and policy makers•Beyond N=1 – beyond personal experience• Beyond N=2 – beyond benchmarking• Beyond k=1 – beyond the one (maybe even best) study• Beyond the biases of narrative reviews• For researchers: Develop consideration for use science: actionable knowledge

Science Based

• Psychologists – and charlatans• Top- down – from general science to practical knowledge• Bottom – up : from practical knowledge to scientific laws; from a phenomenon to science knowledge – example goal setting research• In each case – hard work to show that the new knowledge holds against legitimate alternative explanations

Action Principles

• Can be science based (Locke, 2004)• It function is to translate knowledge into action • Action regulation theory suggests to use the following aspects of how to make an idea actionable: action sequence, hierarchy of regulation• Hierarchy of regulation: Most important: learning how to use action principle requires action – connection between higher level and lower level processing• Action sequence: Only by knowing and acting on all aspects of the action sequence are we able to fully act – alignment of action sequence• Example: Personal Initiative (central for action regulation theory)

Combining Abstract Knowledge with Concrete Knowledge : abstract knowledge and muscle movement; abstract conceptual knowledge with routines

This does not come automatically, it must be carefully translated to overcome the knowledge doing gap in individuals

Action Principles, e.g., in the Area of Planning • Self-starting: your plan must imply that you can execute it without waiting for things to happen. Make an active plan!• Proactive: future thinking! What opportunities may occur in the future? Make a plan for future opportunities and problems! Develop a back-up plan.• Overcoming barriers: anticipate possible problems and return to plan quickly when disrupted • consider what you need to reach the goal • Write down actions • Weekly plans with next steps•While doing this, also practice the use of creativity techniques on own business problems (DeTienne & Chandler, 2004)•Participants develop the plans or practice the techniques on their own, before sharing it with a partner, and subsequently within the group.

Want to Achieve With This Talk:

1)Behavior: A critical evaluation of behavior research in entrepreneurship 2) Dynamics of entrepreneurship careers 3) Entrepreneurial environment 4) In-born entrepreneurial traits vs. change entrepreneurship through training. 5)Evidence based approaches to entrepreneurship

6)ADD-ON Methods

MethodsI said something in session with grad students and post-docs that was not quite right with re to qualitative work in I/O Psych. I do not want to belittle qualitative approaches.

In contrast: I wanted to suggest that EVERYONE uses qualitative approaches first, before doing quantitative studies.

I often use mixed methods approaches: Qualitative interviewing that is coded into numbers or a survey study and a qualitative study

Otherwise, I agree with Edmondson and McManus that qualitative approaches should be used when little knowledge and quantitative when testing HsEdmondson, A. C., & McManus, S. E. (2007). Methodological fit in management field research. Academy of Management Review, 32, 1155-1179.

Misunderstandings of an Active Performance Concept

• Equating to doing more, showing more physical activities (“being overactive”): the opposite for our concept of very efficient and effective worker/entrepreneur (higher efficiency)• Equating to proactive (often proactive behavior is used in the literature): proactive means that one is active now for future purpose (pro=before)• Equating behavior with personality – “proactive personality”: Personality is one factor contributing to active performance, but only one • Equate with motivation in general (or intrinsic motivation): Active performance may well be oriented towards achieving external rewards

Policy ImplicationsIn Germany approx 2 Mill business of the type studied in the German study

If 10% participate in this 3-day training course, the result might be that each participant would employ approx 2 employees more: This might lead to approx 400,000 new employeesThe costs of training should be approx. 500 to 1.000 Euro per participantsPublications can be received from:

[email protected]

http://www.frese.org/

PI Training Results Before/After Training (training/non-training, ANOVA; significance of interaction) – Uganda

Measures M(before) M(after) d Sign.

Behavior Based Measures:

Personal Initiative TG -.21 .57 1.82 **

CG -.21 -.53

Overall Success TG -.05 .20 .66 **

CG .04 -.25

Personal Initiative proved to be a Mediator for success--------------------------------------------------------------------------TG= Training group, CG= Control Group, d= group differences after training; z-standardized scales

Glaub, M., Fischer, S., Klemm, M., & Frese, M. (2011). Training personal initiative to business owners. NUS: submitted

Measuring Personal Initiative: Interview, Coded Answers

• Retrospective initiative and prompts• Overcoming barriers: Situational interview – performance measure within interview• Initiative in continuing education - now• Overall rating by interviewer (includes behavior during interview)

Fay, D., & Frese, M. (2001). The concept of personal initiative: An overview of validity studies. Human Performance, 14(1), 97-124.

Why Are People Active?•An ontological given (orientation reflex, curiosity, mastery motive)•Goal directed behavior is active because it produces new environments (goal refers to something that does not yet exist)•Active approach leads to:

•better learning •better handling of errors•to an action oriented mental model•better knowledge of the situation (exploration)•better survival (including sexual procreation and through active work)

Informal Planning of Business Owners- Business owners work in an unstructured

situation planning more necessary thanfor employees

- Recently scepticism towards planning; rather intuition, experimentation, improvisation

- Argument: planning takes too long and producesa certain amount of rigidity, environment too erratic (formal planning?)

- Counterargument: Not necessarily contradiction:intuition depends on stored, routinized plans(expertise research); explicit conscious planning may help in experimentation

Positive Functions of Informal Planning• Translates goals into actions and to mobilize extra effort

(Gollwitzer, 1996), • Amplifies persistence and decreases distraction (Diefendorff & Lord, 2004), • Helps to stay on track and ensures that the goal is not lost or forgotten (Locke & Latham, 1990)• Leads to focus on priorities (Tripoli, 1998), • Reduces load during actions because actions are planned

beforehand (actions run more smoothly), • Motivates owners to deal with problems, • Prepares owners to have Plan B if something goes wrong

Positive Functions of Proactive Planning• Prepares for future opportunities and problems now• Leads to earlier presence in important markets• Makes better use of scarce resources • Changes and influences the environment • Leads to original and often unusual solutions – not copies of others• Helps a person to receive more and better feedback than

when using a reactive or passive approach (Ashford & Tsui, 1991).

Measure of Elaborate and Proactive Planning

• In-depth structured interview (max 40 min)• First, rank order common business goals (e.g., increasing profits used as stimulus material)• Second, describe the two most important goal areas in detail to understand subgoals (e.g., buying a machine to expand production) – these subgoals loosely related to the stimulus material on cards • Third, asking owners to describe how they want to go about achieving their goals (2 goals) • Fourth, prompts, for example, What do you mean by ....? Can you

give me an example? What have you done so far to reach…? • Measures: substeps and number of issues thought about and how much thinking about future opportunities and threats and preparing for them now (high inter-rater reliability and Alphas)

Antecedents of Elaborate and Active Planning: Cognitive ability and Qualifications

• Working memory, • Acquisition of knowledge and skills,• Speeds up decision making (Ackerman & Humphreys, 1990), • Makes complex planning possible (elaborate and active conscious planning) (Kanfer & Ackerman, 1989).• Makes it possible to think of more relevant issues and about the relationships between these issues. • Qualification increases skills: ready-made routinized responses available (Frese & Zapf, 1994) • Qualifications reduce processing capacity (Kahneman, 1973). • Frees up cognitive resources which are available to develop elaborate and active plans to achieve goals.

Antecedents of Elaborate and Active Planning: Motivational Resources

• Feasibility (internal locus of control, self-efficacy) and desirability (achievement motivation and proactive personality) • Outcome and competency expectancies make it useful to

plan well, e.g. an internal locus of control leads to more elaborate and active planning because it makes sense to be active and to plan one’s actions (Skinner, 1997), and leads to higher entrepreneurial performance because entrepreneurship requires to be self-motivated and not to wait for others to tell what to do • Self-efficacy - belief to competently perform actions - makes it useful to develop elaborate and active plans which contributes to high performance.

Antecedents of Elaborate and Active Planning: Motivational Resources – 2 –

• Achievement motivation implies to want to have an impact and not to give up easily (McClelland & Winter, 1971); therefore, more develop active plans and guards from switching tasks. • Proactive Personality (subjective personal initiative) makes active and elaborate planning desirable

Personal initiative

Self-efficacy

Need for achievem.

External loc. control

Internal loc. control

Motivat.resources

Elab/proact planning

Size

Growth

.54*

.10

(.29)

(.95)

(.75)

Cognitiveresources

.09

.08

.37*

-.00

.19

.38*

Planning 2

Planning 1

Number employees

Equipmentvalue

Interviewer evaluation

.24 .18 .02

(.80)(.77)(.85)

(.86)(.92)(.60)

(.00)(.31)(.31)

.49 .45 .46

.31 .37 .56

1.0 .83 .83

(.40)(.94)(.81)

(.41)(.94)(.00)

(.36)(.88)(.85)

(.65)(.72)(.94)

(.64)(.87)(.99)

.78 .25 1.0

.77 .26 .43

.89 .34 .39

-.59 -.53 -.25

.60 .36 .10

Cognitiveability

Humancapital

(.61)(.67)(.64)

(.72)(.74)(.92)

.63 .58 .60

.53 .52 .28

.67* .50* .12

(.00)(.29)(.46)

1.0/.84/.73

.80/.81/.80(.37)(.34)(.35)

(a) Complete model; Model fit: 2(192, N1=215, N2=123, N3=70)= 266.12, p <.01; RMSEA=.054, CFI=.95; numbers in measurement models refer to samples from South Africa, Zimbabwe, and Namibia, respectively.

Elaborate & proactive planning as mediator: Results from Namibia, South Africa, and Zimbabwe

Motivat.resources

Elab/proactplanning

Size

Cognitiveresources

.00

.54 *

.37 *

.38 *

.19

Frese, M., Krauss, S., Keith, N., Escher, S., Grabarkiewicz, R., Unger, J., et al. (2006). Business Owners' Action Planning and Its Relationship to Business Success in Three African Countries. Giessen: Dept. of Psychology, submitted.

(b) Model for South Africa with expert evaluation; 2(30, N=117)=39.88, p=.11; RMSEA=.053, CFI=.97

Personal initiative

Self-efficacy

Need for achievem.

External loc. control

Internal loc. control

Motivat.resources

Elab/proact planning

Expertevaluation

.75

.78

.77

-.54

.57

(.43)

(.40)

(.41)

(.70)

(.67)

(.62)

(.69)

Cognitiveability

Humancapital

Cognitiveresources

.60

.48

(.64)

(.77)

.12

.48*

.06

.36*

.30

Planning 2 (.35)

.81

1.0

Planning 1 (.00)

.59*

Elaborate & proactive planning as mediator: Results from South Africa (dependent

variable expert evaluation)

Motivat.resources

Elab/proactplanning

Expert Evaluation

Cognitiveresources

. 06

.36 *

.30

.48*

.12

Unger, J. M., Zinsberger, P., Frese, M., & Rosenbusch, N. (2006). Social capital and entrepreneurial success: A meta-analytical review. Giessen: to be submitted for publication.

Contingency Viewpoint

-1

-0.5

0

0.5

low high

entreprenerial orientation-overall

siz

e s

uc

ce

ss

perceivedenvironmentaldiff iculty=highperceivedenvironmentaldiff iculty=low

Frese, M., Brantjes, A., & Hoorn, R. (2002). Psychological success factors of small scale businesses in Namibia: The roles of strategy process, entrepreneurial orientation and the environment. Journal of Developmental Entrepreneurship, 7, 259-282.

Disadvantages of Personal Initiative at Work

• Employees with high Personal Initiative may be difficult employees

• High Initiative employees may sometimes not be liked by their colleagues

• Personal Initiative implies that one goes beyond the task given, also beyond what managers expect – unwanted outcomes

• Under which condition can personal initiative turn against the company (e.g., repeated punishment for initiative, little commitment to company, etc.)

Disadvantages of Personal Initiative at Work -2-

• If wrong goal is taken

• If knowledge, skills (and maybe mental ability) are inadequate: negative effects of Personal Initiative

• Persistence (as part of Personal Initiative) has negative effects in non-achievement situations, e.g. relationships (there are situations where it is useful to give up, e.g., wisdom)

• Risk taking and Personal Initiative: Risks too high?

Summary• Personal Initiative: Reciprocal effects: change of the job conditions (job crafting and job change)• Planning has a positive effect on firm success – the most negative effect is from a reactive approach• Training Personal Initiative leads to positive effects (evidence-based management)• We can understand entrepreneurship better with the concept of personal initiative

Literature: Frese, M. (2009). Towards a psychology of entrepreneurship: An action theory perspective. Foundations and Trends in Entrepreneurship, 5, 435–494.Frese, M., Garst, H., & Fay, D. (2007). Making Things Happen: Reciprocal Relationships between Work Characteristics and Personal Initiative (PI) in a Four-Wave Longitudinal Structural Equation Model. Journal of Applied Psychology, 92, 1084-1102.

Misunderstandings of an Active Performance Concept

• Equating to doing more, showing more physical activities (“being overactive”): the opposite for best-worker (higher efficiency)• Equating to proactive (often proactive behavior is used in the literature): proactive means that one is active now for future purpose (pro=before)• Equating behavior with personality – “proactive personality”: Personality is one factor contributing to active performance, but only one • Equate with motivation in general (or intrinsic motivation): Active performance may well be oriented towards achieving external rewards

Characteristics of active behavior: • Personal initiative• Newness and self-starting nature: Entrepreneurial orientation• Active goals & visions• Active information search• Active and long-term action planning • Active social strategy for networking• Active feedback seeking • Active approach to learning (deliberate practice)

Success

Environment• Life cycle• Dynamism• Hostility• Industry

National Culture

Characteristics of active behavior and entrepreneurial success

Active personality

• Need for achievement; passion for work

• Energy

• Self-efficacy and internal control, need for autonomy

• Proactive personality

• Innovativeness

• Stress tolerance

• Risk taking

The following steps:• First: Hypothesis: An active approach to action characteristics (personal initiative) has a positive influence on success • Second: This hypothesis turns out to be empirically correct for the whole action process in entrepreneurship • Third: We can change the active nature of action characteristics with the help of an intervention via action principles derived from theory• Fourth: This change of the action characteristics leads to an increase of success in the long term.

Active Performance = Personal Initiative

• Self-starting• Pro-active (future oriented)• Overcoming barriers• Changing the environment

The Opposite of Personal Initiative Is the Reactive Approach:• Does what one is told• Is oriented towards now, not future• Stops when difficulties arise• Reacts to environment

Meaning of Self-Starting

• Self-starting is different from the “normal” or obvious approaches (social comparison approach) • Doing the obvious self-starting is low• If a high ranking manager takes up an innovation that is “in the air”, that other managers also talk about, it is not self-starting

Meaning of Pro-Active

• Scanning for opportunities and problems that may appear in the future

• Preparation now for dealing with these future problems and exploiting future opportunities

Meaning of Overcoming Barriers

• Protecting one’s goals and adapting one’s plans to overcome problems on the way towards the

goal • Active dealing with problems instead of giving up• Dealing with own anxieties and frustrations – self-regulation

Frese, M., & Fay, D. (2001). Personal Initiative (PI): A concept for work in the 21st century. Research in Organizational Behavior, 23, 133-188.

Action sequence

Goals / redefinition of tasks

Information collection and prognosis

Self-starting

-Active goal redefinition

-Active search, i.e. exploration, active scanning

Proactive

-Future problems and opportunitiesconverted into goals

-Consider future problem areas and opportunities

Overcome barriers

-Protect goals when frustrated or taxed by complexity

-Keep search up in spite of complexity and negative emotions

Facets of Active Performance

Action sequence

Plan and execution

Feedback

Self-starting

-Active plan

-Self-developed feedback and active search for feedback

Proactive

-Back-up plans (action plans for oppor-tunities ready)

-Develop pre- signals for potential problems and opportunities

Overcome barriers

-Overcome barriers Quick return to plan when disturbed

-Protect feedback search

Facets of Active Performance -2-

The following steps:

• First: Hypothesis: An active approach to action characteristics has a positive influence on success. • Second: This hypothesis turns out to be empirically correct for the whole action process in entrepreneurship • Third: We can change the active nature of action characteristics with the help of an intervention via action principles derived from theory• Fourth: This change of the action characteristics of leads to an increase of success in the long term.


Success


National Culture


Active personality


• Energy



• Innovativeness


• Risk taking

Relationship Between Personal Initiative and Entrepreneurial Success in Uganda (Correlation)

r with Success

Initiative .42**

Replicated several timesRelationship of initiative with individual entrepreneurial orientation

(DeReu, Koop, Frese, 1998)

Company Level: Climate for Initiative Items

• People in our company actively attack problems.

• Whenever something goes wrong, people in our company search for a solution immediately.

• Whenever there is a chance to get actively involved, people in our company take it.

• People in our company take initiative immediately – more often than in other companies.

• People in our company use opportunities quickly in order to attain goals.

Climate for Initiative and Return on Assets of Medium-Sized Firms

Holding constant Process Innovativeness, Size, and Industry codes, prior Return on Assets predicting future Return on Assets: R .30**

Baer, M. & Frese, M. (2003) Innovation is not enough: Climates for initiative and psychological safety,process innovations, and firm performance; Journal of Organizational Behavior, 24, 45-68

1. Business Process Reengineering (BPR)

2. Supply-Chain Partnering

3. Learning Culture

4. Just in time production

Definitions of Process InnovationsRedesign and slim down operations and production processes to eliminate unnecessary procedures. Characteristics: customer orientation, process-related teamwork, and the transition from highly specialized workers to teams (Hammer & Champy, 1993).

An informational network with other relevant companies for the purpose of overlapping company improvement in customer orientation and resource utilization (Handfield & Nichols, 1998). A continuously changing company with the goal of facilitating constant learning to its employees (Pedler, Burgoyne, & Boydell, 1991). Material and information flow to attain a customer demand-oriented delivery service. Characteristics: integrated information processing, manufacturing segmentation, production-synchronized supply, and reduction of storage costs (Womack, Jones & Roos, 1990).

Prof. Dr. M. Frese 13

Low Level of Innovation High

Gro

ss R

etu

r n o

n A

sse t

s

Baer & Frese (2003) Innovation is not enough: Climates for initiative and psychological safety, process innovations, and firm performance. Journal of Organizational Behavior, 24, 45-68

High pro-initiative climate

Low Level of Innovation

Gr o

s s R

e tu

rn o

n A

sse t

s

High

Low pro-initiative climate

Moderate pro-initiative climate

Pro-Initiative Climate Moderating the Relationship between Levels of Process Innovation and Economic

Performance of Company

Meta-Analysis for Individual Personal Initiative and Employee Performance

r (corr) = .28*

Tornau, K., & Frese, M. (2013). Construct clean-up in proactivity research: A meta-analysis

on the nomological net of work-related proactivity concepts and their incremental validities.

Applied Psychology: An International Review, 62, 44–96.


Success


National Culture


Active personality


• Energy



• Innovativeness


• Risk taking

Entrepreneurial Orientation

- Competitive Aggressivenes

- Autonomy

- Risk Taking

- Innovation

- Proactiveness or Personal Initiative

Entrepreneurial Orientation and SuccessCorrected Correlations – Meta-AnalysisEntrepreneurial Orientation general .192

- Risk Taking .110

- Innovation .154

- Proactiveness or Personal Initiative .140

- EO for high tech business .314

- EO for low tech business .183

- EO for Asia .320

- EO for USA .207Rauch, A., Wiklund, J., Lumpkin, G. T., & Frese, M. (2009). Entrepreneurial orientation and business performance: Cumulative empirical evidence. Entrepreneurship Theory and Practice, 33, 761-787.

K=53N=14259


Success


National Culture


Active personality


• Energy



• Innovativeness


• Risk taking

Goals

• Goals as anticipated results – motivator of action• The better visualized, the more motivation• The more active, the better the goal • The higher the goal, the higher performance, the higher entrepreurial success

Baum, Locke & Kirkpatrick, Journal of Applied Psychology, 1998

Active and Long-Term Goal Setting (Vision)


Success


National Culture


Active personality


• Energy



• Innovativeness


• Risk taking

.41**

Active Information Search• Path model (Lisrel 2.70)

Creativity

Active Information

Search

Opportunity Discovery

Innovativeness of Innovations

Venture Growth

Crea x AIS

Model SB-Chi2 RMSEA SRMR CFI

Final Model 16.88 .05 .05 .96

.40**

.54**

.25* .26*

Gielnik, M. M., Krämer, A.-C., Kappel, B., & Frese, M. (2013, in press). Antecedents of business opportunity identification and innovation: Investigating the interplay of information processing and information acquisition. Applied Psychology: An International Review;AIS= Active information search, Crea= creativity.

Moderating effect of Active Information Search on the relationship between Creativity and Opportunity Discovery


Creativity

Active Information Search high (**)

Active Information Search med (**)

Active Information Search low (ns)

Gielnik, M. M., Krämer, A.-C., Kappel, B., & Frese, M. (2013, in press). Antecedents of business opportunity identification and innovation: Investigating the interplay of information processing and information acquisition. Applied Psychology: An International Review.


Success


National Culture


Active personality


• Energy



• Innovativeness


• Risk taking

Everyday Informal Planning (not written business plans)

•Detailedness and proactiveness

• Detailedness: Means I think of many aspects of what I need to do, including back-up plans• Proactiveness: I think of long-term issues and prepare myself for future opportunities and problems (anticipation range)

Measure of Elaborate and Proactive Planning

• In-depth structured interview (max 40 min)• First, rank order common business goals (e.g., increasing profits used as stimulus material)• Second, describe the two most important goal areas in detail to understand subgoals (e.g., buying a machine to expand production) – these subgoals loosely related to the stimulus material on cards • Third, asking owners to describe how they want to go about achieving their goals (2 goals) • Fourth, prompts, for example, What do you mean by ....? Can you

give me an example? What have you done so far to reach…? • Measures: substeps and number of issues thought about and how much thinking about future opportunities and threats and preparing for them now (high inter-rater reliability and Alphas)

Elaborate & proactive planning: Theoretical mediational model

Motivat.resources

Elab/proactplanning

Success

Cognitiveresources


Motivat.resources

Elab/proactplanning

Size

Cognitiveresources

.00

.54 *

.37 *

.38 *

.19

Frese, M., Krauss, S., Keith, N., Escher, S., Grabarkiewicz, R., Luneng, S. T., et al. (2007). Business Owners' Action Planning and Its Relationship to Business Success in Three African Countries. Journal of Applied Psychology, 92, 1481-1498.

Economic

Success

(K=8-11, N=818 – 1049)

Interviewer

(K=6/ N=679)

N of employees

(K=6/ N=679)

Growth

(K=5/ N=629)

Size

(K=4/ N=590)

Success external

(K=3/ N=562)

Compreh. Planning

.327** .484** .359** .133** .360** .317**

Critical Point

.355** .302** .150** .177** .236** .277**

Opportu-nistic

.063* .047 .018 .121** -.015 .077*

Reactive -.484** -.498** -.285** -.232** -.342** -.362**

Meta-analytic Results of the Relationship of Action Characteristics and Various Measures of Success, All

Studies by Frese and Co-workers (8-11 Studies, Reliability-Adjusted r)

0

10

20

30

40

50

High Low

Reactive strategy

% o

f hi

ghly

suc

cess

ful

owne

rs


6%

39%

Strategies and Entrepreneurial Success – Longitudinal Study – Betas after Controlling for Prior Success (Zimbabwe)

Planning

Planning

Reactive

Reactive

Success

Success Non-Success

Non-Success

Time

Beneficial Cycle Vicious Cycle

.41*

.26*

-.19*

-.22§

Krauss, Frese, in prep.

Meta-Analysis for Planning and and Firm Performance

d (corr) = .20*

Brinckmann, J., Grichnik, D., & Kapsa, D. (2010). Should entrepreneurs plan or just storm

the castle? A meta-analysis on contextual factors impacting the business planning–

performance relationship in small firms. Journal of Business Venturing, 25, 24-40.


Success


National Culture


Active personality


• Energy



• Innovativeness


• Risk taking

Active Social Strategies - Guanxi

Comprehensive social competencySocial skillsProactive social strategiesRelational perseverance

Social Network Size:

Government Network size

Business

Success.40.47

Zhao, X.-Y., Frese, M., & Giardini, A. (2010). Business owners' network size and business growth in China: The role of comprehensive social competency. Entrepreneurship & Regional Development, 22, 675–705Slightly different analysis than article


Success


National Culture


Active personality


• Energy



• Innovativeness


• Risk taking

Active learning strategy – deliberative practice

• How do business owners improve their skills? And enhance their competency? • Walking through the store and trying to see things with the eyes of the customer• Trying things out whether they work or do not work • Mentally simulating • Asking customers for feedback• Professional reading

Why Are People Active -2-

•Active approach in learning: deliberate practice – boundary lines of your skills•New goal development reduces monotony and allows new use of conscious level of regulation

Education

Deliberatepractice

Entrepknowledge

Firm growth

Cognitive ability

.45**

.64** .28*

.20* .26**

Fit statistics: GFI=.99, RMSEA=.026, Unger, J. M., Keith, N., Hilling, C., Gielnik, M., & Frese, M. (2009).

Deliberate practice among South African small business owners: Relationships with education, cognitive ability, knowledge, and success.

Journal of Occupational and Organizational Psychology, 82, 21-44.)


Success


National Culture


Active personality


• Energy



• Innovativeness


• Risk taking

Contingency Viewpoint

-0.8

-0.6

-0.4

-0.2

0

0.2

low high

entrepreneurial orientation-overall

gro

wth

su

cc

es

s

perceivedenvironmentaldiff iculty=highperceivedenvironmentaldiff iculty=low

Frese, M., Brantjes, A., & Hoorn, R. (2002). Psychological success factors of small scale businesses in Namibia: The roles of strategy process, entrepreneurial orientation and the environment. Journal of Developmental Entrepreneurship, 7, 259-282.


Success


National Culture


Active personality


• Energy



• Innovativeness


• Risk taking

r=-.66

GLOBE: uncertainty avoidance “as is“ means

4.64.54.44.34.24.14.03.9

Co

rrel

atio

n:

reac

tive

wit

h b

usi

nes

s su

cces

s 0.0

-.1

-.2

-.3

-.4

-.5

-.6

-.7

Zimbabwe

South Africa

Namibia

Zambia

Thailand

Reactive (opposite of proactive planning)

The following steps:

• First: Hypothesis: An active approach to action characteristics has a positive influence on success. • Second: This hypothesis turns out to be empirically correct for the whole action process in entrepreneurship • Third: We can change the active nature of action characteristics with the help of an intervention via action principles derived from theory• Fourth: This change of the action characteristics leads to an increase of success in the long term.

Human and Social Capital Effects on Business Creation Effects on Business Performance

Human Capital rw=.12; K=6; N=6,706 (Martin et al. 2013) rc=.10; K=70; N=24,733 (Unger et al. 2011)

rc=.21; K=68; N=12,163 (Crook et al. 2011)3

rw=.17; K=9; N=5,790 (Martin et al. 2013)

Social Capital n/a rw=.16; K=61; N=13,263 (Stam et al., in press)

Strategy

Strategic Planning n/a rw=.15; K=29; N=9,066 (Boyd 1991)

r=.20; K=14; N=714 (Schwenk & Shrader

1993)

rw=.17; K=42; N=2,283 (Miller & Cardinal

1994)

Business Planning n/a rc=.10; K=51; N=11,046 (Brinckmann et al.

2010)

Entrepreneurial Orientation n/a rc=.24; K=53; N=14,259 (Rauch et al. 2009)

rc=.26; K=73; N=17,935 (Rosenbusch et al.

2013)4

Innovation n/a rw=.13; K=42; N=21,270 (Rosenbusch et al.

2011)

Action Structure: Action Regulation (cf. Anderson, Hacker, Rasmussen, Schneider &

Shiffrin, Kahneman)

Meta- cognitive templates and heuristics

Conscious level (knowledge based, declarative

knowledge, controlled, intellectual)

Flexible action patterns (rule based, knowledge compilation)

Skill level (automatic, procedural level)

Conscious/idea

Unconscious/physical

Conscious andautomatic

Frese, M. (2005). Grand theories and mid-range theories: Cultural effects on theorizing and the attempt to understand active approaches to work. In M. A. Hitt & K. G. Smith (Eds.), Great minds in management: The process of theory development (pp. 84 - 108). Oxford: Oxford University Press.



Entrepreneurial success•Phase I: opportunity identification•Phase II: refinement of business concept and resource acquisition – starting an organization•Phase III: survival and growth• Exit







National culture



413–438.



Entrepreneurial success







National culture



413–438.

Mapping the Environment: Information Search, Prognosis, and Signals

• Action is situated – we react to signals in the environment, we also establish and determine signals in the environment• Active information search: We determine the information we receive from the environment• In a social situation, the “others” are the situation in which we act• Unconscious, intuitive understanding of situation

Syracuse 2013

The more we use active strategies of information search, the better are is our opportunity perception and realization –

again a concept related to action regulation theory: use of active strategies instead of just noticing things in the sense of a more

passive alertness

Syracuse 2013

.41**

Active Information Search• Path model (Lisrel 2.70)

Creativity

Active Information

Search


Innovativeness of Innovations

Venture Growth

Crea x AIS

Model SB-Chi2 RMSEA SRMR CFI

Final Model 16.88 .05 .05 .96

.40**

.54**

.25* .26*

Gielnik, M. M., Krämer, A.-C., Kappel, B., & Frese, M. (in prep). Cognitive Capacities and Their Interplay with Active Information Search in the Opportunity Identification Process;AIS= Active information search, Crea= creativity.

Moderating effect of Active Information Search on the relationship between Creativity and Opportunity Discovery


Creativity

Active Information Search high (**)

Active Information Search med (**)

Active Information Search low (ns)

Gielnik, M. M., Krämer, A.-C., Kappel, B., & Frese, M. (in prep). Cognitive Capacities and Their Interplay with Active Information Search in the Opportunity Identification Process.Syracuse 2013

Plans

•Plan as mental simulation of an action (Probehandlung)•Plan: Bridge between thought and action (Miller, Galanter and Pribram, 1960)•Plan producing implementation intention (Gollwitzer & Heckhausen) •Detailedness (= specificity of goals in goal setting theory, setting subgoal may be planning, cf. Locke & Latham)•Costs of planning

Syracuse 2013

Entrepreneurial goal intentions

Low action planning

High action planning

Entrepreneur-ial action

Gielnik, M. M., Frese, M., Kahara-Kawuki, A., Katono, I. W., Kyejjusa, S., Munene, J., et al. (2015). Action and action-regulation in entrepreneurship: Evaluating a student training for promoting entrepreneurship. Academy of Management Learning & Education, 14, 69–94.

Informal Planning of Business Owners- Business owners work in an unstructured

situation planning more necessary thanfor employees

- Recently scepticism towards planning; rather intuition, experimentation, improvisation

- Argument: planning takes too long and producesa certain amount of rigidity, environment too erratic (formal planning?)

- Counterargument: Not necessarily contradiction:intuition depends on stored, routinized plans;planning may help in experimentation

Positive Functions of Informal Planning• Translates goals into actions and to mobilize extra effort

(Gollwitzer, 1996), • Amplifies persistence and decreases distraction (Diefendorff & Lord, 2004), • Helps to stay on track and ensures that the goal is not lost or forgotten (Locke & Latham, 1990)• Leads to focus on priorities (Tripoli, 1998), • Reduces load during actions because actions are planned

beforehand (actions run more smoothly), • Motivates owners to deal with problems, • Prepares owners to have Plan B if something goes wrong

Positive Functions of Proactive Planning• Prepares for future opportunities and problems now• Leads to earlier presence in important markets• Makes better use of scarce resources • Changes and influences the environment • Leads to original and often unusual solutions – not copies of others• Helps a person to receive more and better feedback than

when using a reactive or passive approach (Ashford & Tsui, 1991).


Motivat.resources

Elab/proactplanning

Size

Cognitiveresources

.00

.54 *

.37 *.38*

.19


Elaborate & proactive planning as mediator: Results from South Africa (dependent

variable expert evaluation)

Motivat.resources

Elab/proactplanning

Expert Evaluation

Cognitiveresources

. 06

.36 *

.30.48*

.12


0

10

20

30

40

50

High Low

Reactive strategy

% o

f hi

ghly

suc

cess

ful

owne

rs


6%

39%

Strategies and Entrepreneurial Success – Longitudinal Study – Betas after Controlling for Prior Success (Zimbabwe)

Planning

Planning

Reactive

Reactive

Success

Success Non-Success

Non-Success

Time

Beneficial Cycle Vicious Cycle

.41*

.26*

-.19*

-.22§

Krauss, Frese, in prep.

Time influences the strength of the joint effects of entrepreneur-ial goal intentions and action planning on new venture creation.Time influences the strength of the joint effects of entrepreneur-ial goal intentions and action planning on new venture creation.

Context: General intention to start a business

Time

New Venture Creation

Entrepreneurial Goal Intentions

ActionPlanning

x

Gielnik, M. M., Barabas, S., Frese, M., Namatovu-Dawa, R., Scholz, F. A., Metzger, J. R., et al. (2014). A temporal analysis of how entrepreneurial goal intentions, positive fantasies, and action planning affect starting a new venture and when the effects wear off. Journal of Business Venturing, 29, 755-772.

Gielnik, M. M., Barabas, S., Frese, M., Namatovu-Dawa, R., Scholz, F. A., Metzger, J. R., et al. (2014). A temporal analysis of how entrepreneurial goal intentions, positive fantasies, and action planning affect starting a new venture and when the effects wear off. Journal of Business Venturing, 29, 755-772.

Syracuse 2013

Entrepreneurial goal intentions Entrepreneurial goal intentions

New venture creation

New venture creation

Panel A: High action planningPanel A: High action planning

Panel B: Low action planningPanel B: Low action planning

Entrepreneurial goal intentions Entrepreneurial goal intentions

Relationship between intentions and actual start of a firm depends on action planning: Different spells from early (1= 1-6 mo) to late (5 = 25 – 30 mo)Relationship between intentions and actual start of a firm depends on action planning: Different spells from early (1= 1-6 mo) to late (5 = 25 – 30 mo)

Spell 1

Spell 5

Spell 1

Spell 5

Gielnik, M. M., Barabas, S.Frese, M., Namatovu-Dawa, R. Scholz, F. A., Metzger, J. R., et al. (2014). A temporal Analysis of how entrepreneurialgoal intentions, positive fantasies, and action planning affect starting a new ventureand when the effects wear off. Journal of Business Venturing, 29, 755-772.

Outline1)General overview of what we know about the psychology of entrepreneurship 2) Action perspective in entrepreneurship3) Training and action perspective4) Training for entrepreneurial success 5)Training for development of an entrepreneurial mindset and higher start-up rates

Facets of Action Training (Action Regulation Theory)

1) Developing an action-oriented mental model - cognitive representation is based on ”rules of thumbs” (principles of actions)

2) Learning by doing: Active and exploratory approach to learning from action

3) Cognitive apparatus is built for action; exercises have to be connected to principles of actions which can only be learnt, when connected to actions

4) Feedback: Both positive and negative feedback is provided by the trainer.

Facets of Action Training – 2 – 5) Negative feedback is given in contrast to

Skinner’s learning theory; negative feedback has a positive motivational and cognitive effect (understanding, how not to do certain things and being motivated that one still needs to improve skills); both aware and tacit learning

6) Supporting failure and errors in the sense of error management training

• Frese, M., Beimel, S., & Schoenborn, S. (2003). Action training for charismatic leadership: Two evaluation studies of a commercial training module on inspirational communication of a vision. Personnel Psychology, 56, 671-697

• Glaub, M., Frese, M., Fischer, S., & Hoppe, M. (2014). Increasing personal initiative in small business managers/owners leads to entrepreneurial success: A theory-based controlled randomized field intervention for evidence based management. Academy of Management Learning & Education, 13, 354-379.

• Keith, N., & Frese, M. (2008). Performance effects of error management training: A meta-analysis. Journal of Applied Psychology, 93, 59-69.

Facets of Action Training – 3 – 7) Necessity to routinize behavior: New skills

developed during the training compete with old skills that have been routinized. Therefore, routinization of the new behavior needs to be encouraged both in the exercises and afterwards

8) Supporting transfer: Principles of actions are adjusted to real life tasks. Connection to real life tasks is established throughout the training (thinking about how principles can be used in everyday actions and by asking participants whether they used the newly acquired skills); application contract

Positive Effects of Errors • Disrupts flow of action, maybe a negative surprise, but helps to recalibrate and rethink

•Stop automatic processing – renewed conscious thinking, deeper level processing, meta-cognition, reflexivity • The emotionality of errors can help to make one think again, but it can also lead to defensiveness and over-emotionality (internal dialogue, Ellis)

• Errors with major negative consequences may increase these positive effects of errors and lead to more learning

• Learning from errors may be more important than learning from positive events.

Error Management Instructions/Heuristics •I have made an error: Great

•There is always a way out of any error situation •The more errors you make, the more you learn •Errors are a natural part of the learning process! They inform you what you are still able to learn

Competence 5-point-training)difficult task

11.21.41.61.8

22.22.42.6

error managementtraining

error avoidance training

Frese, M., Brodbeck, F., Heinbokel, T., Mooser, C., Schleiffenbaum, E., & Thiemann, P. (1991). Errors in training computer skills: On the positive function of errors. Human-Computer Interaction, 6, 77-93.

Outline1)General overview of what we know about the psychology of entrepreneurship 2) Action perspective in entrepreneurship3) Training and action perspective4) Training for entrepreneurial success 5)Training for development of an entrepreneurial mindset and higher start-up rates

Intervention to Increase Initiative• Using the Facet Model of Personal Initiative• Teaching active, high, and long term goal setting (vision)• Teaching active information search • Teaching active and long term planning • Teaching active feedback seeking

All of this is done by: • Business project and planning/goal setting (4 – 6 mo project)• Check situations for how you can structure them (strategic focus)• Love it, leave it, or change it• Take responsibility for everything you do• Think of how you can do things differently• Proactively think of opportunities and problems and prepare today• You can do it (self-efficacy)• Don’t allow the negative emotions to dominate you, you should regulate them

psychological interventions for effective entrepreneurial mindsets michael frese nus, business...

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