the effects of self-regulatory mechanisms on business success in a randomized control group...

The Effect of Self-Regulatory Mechanisms on Business Success In

a Randomized Control GroupExperiment

Kim Marie BischoffDr. Michael Gielnik

Prof. Dr. Michael Frese

Leuphana University of Lüneburg

S T E PStudent Training for Entrepreneurial Promotion

2The effects of self-regulatory mechanisms on busin ess success in a randomized control group experimen tKim Marie Bischoff, Dr. Michael Gielnik, Prof. Dr. Michael Frese

The effect of self-regulatory mechanisms on business success in a randomized control groupexperiment

We study the effect of self-regulatory factors in the

relationship between an action-oriented

entrepreneurship training and entrepreneurial action

/ entrepreneurial success.

What is this study about?


Action Training and Entrepreneurship

• Action plays a major role in entrepreneurship. “(…) entrepreneurship implies that people act to change the world (…)” (Frese, 2009, p.436).

• Literature assumes that an action training approach leads to improvements in the field of entrepreneurship (Barr, Baker, & Markham, 2009; Fiet, 2001)

Promoting entrepreneurship by action training is useful.

Action is essential in the field of entrepreneurshi p


Self-regulation and Entrepreneurship

• Self-regulation has an important impact on performance (Lord, Diefendorff, Schmidt, & Hall, 2010)

• Entrepreneurs are able to affect the success of their businesses by means of self-regulatory mechanisms(Frese, 2009; Frese et al., 2007)

Self-regulatory mechanisms may have an impact on entrepreneurial action & success.

Self-regulation is essential for promoting entrepre neurship


Promoting entrepreneurship by action trainingand self-regulatory mechanisms

• We base our theoretical model on

� action regulation theory (Frese, 2009;

Frese & Zapf, 1994; Karoly, 1993)

� theory of planned behavior (Ajzen, 1991)



T1 T2 T3

Strength ofEntrepreneurial

Intentions

Entrepreneurial Self-Efficacy

Action Planning

ProceduralKnowledge

Action-Oriented

Entrepreneurship Training

Entrepreneurial Action

H1

H2

H4

H3

H5: Mediation


T2 T4

Business Owner

SubjectiveSuccess

Satisfaction withwork as business

owner



H6

H7Success (Sales,

Growth)

H8

H9


Action: The focal point of the STEP training

Knowledge / Skills Confidence / Self-efficacy

• Knowledge what to do• Skills how to do it

• Believing that “I can do it”

ActionUnsuccessful Entrepreneurship

Successful Entrepreneurship

1 2


STEP’s two general principles: Action Knowledge and Action Training

Knowledge / Skills

• The STEP training teaches knowledge what to do in a way that the trainees know how to do it.

1

• Principle I: Action Knowledge (Principles of Action )

Confidence / Self-fficacy

• The STEP training creates a mastery experience to strengthen trainees’ belief of “I can do it”.

2

• Principle II: Action Training


The STEP training is an Action Training

• The STEP training comprises 12 weeks, including 12 sessions (3 hours each).

• The trainees form start-up teams in the first session and engage in the start-up process of a real venture during the 12 weeks.

• They identify and evaluate new real-life business opportunities.

• They plan and prepare the start-up of a their venture.

• Making real money means getting real experience which is the basis for developing mastery and a belief of “I can do it”.

Trainees get real experience in starting and runnin g a venture; real experience is invaluable for future s tart-ups.


Teaching entrepreneurial skills requires an interdisciplinary approach

• Entrepreneurship is a multifaceted field .

• 12 modules cover three relevant domains: business administration, entrepreneurship, and psychology .

Business Entrepreneurship Psychology

• Finding Starting Capital

• Book-keeping

• Marketing

• Managing Finances

• Strategic Management

• Identifying Opportunities

• Writing a Business Plan

• Registering a Business

• Leadership

• Planning

• Overcoming Barriers

• Persuasion & Negotiation

• Networking


Method: Data Collection

T1Feb 2009

395 studentsInterview T1

T2Jun 2009


TrainingFeb-May 2009

T4Aug – Nov 2011


• Procedure: face-to-face interviews & questionnaires

T3Jan – Mar 2010



Method: Design and Sample

T1Feb 2009


T2Jun 2009


TrainingFeb-May 2009

T4Aug – Nov 2011


• Randomized control group design: 197 students in training group and 198 students in waiting control group

• Trainees: Non-business students of Makerere University and Uganda Christian University (Kampala, Uganda), who were in their last semester

T3Jan – Mar 2010



Results

T1 T2 T3

Strength ofEntrepreneurial

Intentions


Action Planning

ProceduralKnowledge

Action-Oriented

Entrepreneurship Training

Entrepreneurial Action

H1β=0.13*

H2 n.s.

H4β = 0.12 *

H5 sign. Mediator

H3n.s.

Note. n= 319, * p <. 05


T2 T4

Business Owner

SubjectiveSuccess

Satisfaction withwork as business

owner


Results

H6β=0.15*a

H7n.s.

Success (Sales, Growth)

H8β=0.34**b

H9β=0.26*b

Note. an=227. bn=90, * p <. 05, **


Conclusions

• Procedural knowledge geared towards action, mediates the relationship between the action oriented entrepreneurship training and entrepreneurial action. Thus, learning what to do and how to do it is essential for undertaking entrepreneurial actions.

• The interaction of strength of entrepreneurial intentions and action planning predict entrepreneurial action. Only in combination with action planning can entrepreneurial intentions lead to entrepreneurial action.

Action-oriented training in entrepreneurship affect s self-regulation and enhances entrepreneurial action.


Conclusions

• Self-efficacy predicts:

• the start-up of entrepreneurial businesses

• subjective success

• satisfaction with being and working as a business owner

Self-regulation affects entrepreneurial start-ups a nd success.

Entrepreneurship trainings should be action -oriented and train self-regulatory mechanisms


Acknowledgements

• Thanks to my colleagues at the Leuphana University of Lüneburg and National University of Singapore Business School• Prof. Dr. Michael Frese

• Dr. Michael Gielnik

• to the students, who supported us in data collectio n and rating:

• Melanie von der Lahr, Thorsten Dlugosch, Marie-Luise Lackhoff, Kristina Zyla, Eike Hedder, Andreas Heese, Diana Breé, SvenjaHaskamp, Mona Mensmann

• and to our cooperation partners at the Makerere University Business School (MUBS), Kampala, Uganda

Thank you very much for your attention
