2. Social psychology of
entrepreneurship 1.11.2010
Social psychology of entrepreneurship
• Research on entrepreneurship is multidisciplinary: economics, business management,
psychology, sociology, political sciences, …
• ”Social psychology of entrepreneurship”: A field
of research in the making
• Research team at the Department of Social
Studies (University of Helsinki): Kari Mikko Vesala;
Jarkko Pyysiäinen; Miira Niska; Soili Peltola (public defense of
a PhD thesis 5.11.: Kirsti Tonttila)
Approaches in social psychology of
entrepreneurship
• Social cognition
• Social context
• Social construction
(attention: a view to social psychology: from
mainsteam experimental-cognitive emphasis
to social and societal social psychology)
(applied field!)
Chell (2008, 247):
“Social psychology may provide the link with
the socio-economic context of entrepreneurial
behaviour and to the mental processes that
surround decision-making.”
Background
• McClelland 1961: The Achieving Society
– Weber: protestant work ethic and the spirit of
capitalism (diligence, frugality)
– Need for achievement (nAch): immediate and
precise feedback; challenging tasks; personal
responsibility; moderate risk-taking
– Running and owning a business enterprise ideal
for satisfying nAch (thus explaining career choice
and success)
Background,cont.
• Entrepreneurial personality: theory in
psychological e literature + cultural image
(next lecture focuses on the latter)
• Most popular traits: nAch, internal locus of
control, risk-taking propensity
• Ambiquous results, severe criticism
• E.g. causal explanation vs role expectation (->
a description of the role rather than the actor)
Social cognition
2. Outlines of the social psychology of entrepreneurship
• Shaver 2003: The Social Psychology of Entrepreneurial
Behaviour
• Differentiates s.p. from personality approaches which assume
traits as permanent cross-situational dispositions (e.g. nAch,
locus of control, risk-taking propensity)
• Emphasis on intrapersonal processes that ”guide the
entrepreneur´s venture-organizing activities” (=business startup and persistence in it): social cognition (e.g. attributions of
success, overconfidence), attitudes (e.g. planned behaviour),
self (e.g. self-evaluation, self-efficacy)
• Shaver focuses on cognitions as separate antecedent entities
that affect overt behaviour. He strongly promotes a
quantitative (pref. experimental) variable approach and
rejects qualitative methods
Shaver 2003
• Social psychology: ”study of personal and
situational factors that affect individual social
behaviour” (p.331); Socially meaningful actions?
• Entrepreneurship as meaningful action: ”venture
organizing (either by individual or team)? 331)
• ”opportunity seeking and recognition, innovation,
creation of value, assumption of risk, disregard
for resources controlled” (332)
• ”New entrants”, ”new companies created”
(”without entrepreneurial behaviour”) (331)
Shaver 2003
• Commitment to experimental methodology, and
realistic epistemology (p.333-335)
• Social cognition: categorization, internal
representations of the external world
(prototypes, schemata);
• Biases and heuristics: cognitive structures
activating; availability heuristics, illusory
correlation; overconfidence (Busenitz & Barney)
• Busenitz & Barney propose that the situation
of entrepreneurs differs from that of
managers, and thus explain difference in
overconfidence (start-up of a new venture vs
established organizational background)
• Critique of entrepreneurial personality –
theories: emphasis on situation + personsituation interaction (p.341-342)
Shaver 2003
• Does Shaver take into account situational
factors? What kind of factors?
• Attributions (internal-external, personsituation)
• Stable internal attributions of the cause of
action correlated with more time spent on
structuring the company
• Self-esteem (self-serving bias, Baron)
• Enterprise serving bias (optimism) (p.346)
• Attitudes: attitude-intention-behavior
(Fishbein & Ajzen)
• Self; self-evaluation (social comparison, selfefficacy)
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Mainstream cognitive approach,
Entity emphasis: individual, situation;
Elementarism: separate, measurable factors
General, universal patterns (in causal
connections)?
• Social context missing? (consequently,
contextual variation in ”entrepreneurship as
socially meaningul action” is missing)
Social context
• Immediate social context of the actions of small
business owner-manager (=trans-action context)
• Wider societal context: cultural and political
environment
• -> Variation in immediate context originating from
the variation of environment (organisation,
institution, culture system etc., e.g. arts, farming, )
• -> Variation originating from context and situation in
which entrepeneurship is used as a model
(metaphor) of action
Why context?
• Deeper understanding of activity and experience;
(and cognitions, attitudes, self)
• Insight into the functions of entpreneurship in
society
• Insight into how action and experience (and
cognitions, attitudes and self) are affected by
contextual factors
• And how they are defined and constructed through
the context (in the transactions between the
individual and other actors)
2. Outlines of the social psychology of entrepreneurship
• Carsrud & Johnson (1989) Entrepreneurship: A social
psychological perspective.
• C & J elaborate on the description of entrepreneurial
behaviour by viewing it as a role/a set of behaviours: pursuit
of business opportunities (incl. p. of resources) that takes
place in a context of social networks and transaction relations.
• emphasis on the means and processes of social influence (e.g.
”know-who instead of know-how”, impression management:
credible self, equity/fairness in exchange), as well as on taking
a role of an entrepreneur ( = adapting ”entrepreneurial” selfdefinition).
• no explicit stand on the methods
Emphasis on situation as a social context:
• Carsrud & Johnson; social networks (Aldrich & Zimmer;
johannisson); social embeddedness; Giddens
(structuration); social contracting (Star & McMillan)
• Entrepreneurial learning (small business as a learning
context)
• Vesala 2004 The social embeddedness of personal
control. A social psychological perspective to rural
entrepreneurship.
Social context: Vesala 2004
• What are the main points?
Social context: Vesala 2004
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What are the main points?
Definitions?
Personal control, control constructs
Relational thinking among small business
owner/managers (locus of control: either-or,
both-and)
• Threat and support; trust
2. Outlines of the social psychology of entrepreneurship:
Conclusion
• there are clear conceptual associations with the self
(Shaver: self-efficacy and self-evaluation, C & J: role,
self-presentation). (My analytical self concept here:
self is assumed to involve reflective, relational and
agentic aspects, see Baumeister 1999).
• Shaver promotes exclusive use of quantitative
variable approach, C & J do not question this
Social construction
• Active individual;
• interaction/transaction; communication world
(interaction, language, discourse, speechacts);
• social reality as constructed -> actors +
systems of action as constructed
3. Social construction approach in the entrepreneurship
research: contributions and challenges to social psychology of
entrepreneurship?
• During the latest decade, several researchers have utilised social
constructionist approach in the study of entrepreneurship
• They draw not only on sociologist such as Berger and Luckman, or
Giddens, but on social psychologist such as Harre, Gergen, or
Potter & Wetherell, narratologists such as Bruner or
Polkinghorne, not to mention dramaturgical approach of
Goffman.
• Topics: construction of business opportunities (Chiasson &
Saunders 2005;Jack & Anderson 2002; Fletcher 2006);
entrepreneurial personality (Chell 2008); entrepreneur identity
(Watson 2008, Down & Warren 2008, Downing 2005);
entrepreneurial learning (incl.self-beliefs) (Rae & Carswell 2000)
3. Social construction approach in the entrepreneurship
research: contributions and challenges to social psychology of
entrepreneurship?
• One background for the research on the construction of
entrepreneurial self: Debate on the creation of enterprising
self as a target of public policies (”enterprise culture”
programs)
• Some of these studies question a (simplistic) assumption that
governmental discourses, however dominant they would
appear, could in any straightforward or mechanical way
transform individuals into enterprising selves. Instead, the
role of individual subjectivity and activiness should be
examined.
3. Social construction approach in the entrepreneurship
research: contributions and challenges to social psychology of
entrepreneurship?
• Individual seen as intentional creature who takes action,
learns, and makes sense, and thus creates and exploits
business opportunities and construct him/herself as an
entrepreneur while engaged in social interaction that is
embedded in social contexts and situations
• In doing this, individual uses socially shared tools for thought
and communication (language etc.), which include criteria for
entrepreneurship (=entrepreneurship discourses,
representations of E etc.), and participates in controversies
and negotiations in transaction relations.
3. Social construction approach in the entrepreneurship research:
contributions and challenges to social psychology of entrepreneurship?
• Such a construction is obviously complicated and
multifaceted. Situational and contextual variety is expected in
the nature of the process and contents of the construct.
Therefore, thick qualitative analysis are favoured.
• Methodological focus on the analysis of communication and
use of language: narratives, discourses, metaphors, rhetoric,
self-presentations; (case-studies)
3. Social construction approach… Conclusion
• The self is again at the focus (e.g. identity) but now the
interest is in the construction of self. The approach puts
emphasis on viewing the individual as as active agent (in the
construction of self as well as in the construction of business
opportunity)
• This is understandable, because at the core of the multidisciplinary study on entrepreneurship as a whole there is an
idea of special agency: Entrepreneur is an actor who ”makes
it happen” (is proactive, innovative, risk-taking, and so on)
• For social psychology, this suggests that concepts associated
with the agentic aspect of the self, such as self-efficacy, are of
special relevance
• Such concepts can be approached also from a social
construction perspective
Coming back to Shaver
• Concept of e: start-up? Venture creation
• Reasons for this understanding:
– Carland et al: distinction between small b owner – e
proper
– Interest in new ventures, + growth
– ”Essence of action” /social meaning: driver of
economic growth; a model for action in general
(enterprise culture)
• Yet small business management is one (profound)
context for viewing entrepreneurship
• Unlike Shaver, no need to define social psychology
inside the cognitive processes of the individual, nor
within the business start-up process but in various
contexts
• Why? Because e discourses nowadays are used as a
model for developing and changing action in general
(citizenship, education, in working-life (wage work,
management, institutional and organizational behavior,
public policy, citizenship, education, health etc.); and
because small business is an influential phenomenon in
modern society in economic terms and in social terms
as well (untypical work: self-employment, freelancer,
practitioners of profession etc.; ) )
Examples
• Vesala & Peura 2003 + follow-up
• Vesala & Peura 2005
References 1
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Baumeister, R. F. (1999) The Nature And Structure Of The Self: An Overview. In
Baumeister, R. (Ed.) The Self in Social Psychology. Taylor and Francis, Philadelphia.
Berger, P. & Luckmann, T. (1967). The social construction of reality. London: The
Penguin Press.
Billig, M. (1996) Arguing & Thinking.
Bruner, J., 1986. Actual Minds, Possible Worlds. Harvard University Press,
Cambridge, MA.
Carsrud, A. L., & Johnson, R. W. (1989). Entrepreneurship: A social psychological
perspective. Entrepreneurship and Regional Development, 1(1), 21-31.
Chell, E. (2000) ‘Towards Researching the “Opportunistic Entrepreneur”: A Social
Constructionist Approach & Research Agenda’, European Journal of Work and
Organisational Psychology 9(1): 63–80.
Chell, E. (2008) The entrepreneurial personality. A social construction. London &
New york: Routledge
.
References 2
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Chiasson, M. & Saunders, C. (2005) Reconciling diverse approaches to opportunity
research using the structuration theory. Journal of Business Venturing 20 (2005)
747–767
Down, S. and Warren, L. (2008) Constructing Narratives Of Enterprise: Clichés And
Entrepreneurial Self-Identity. International Journal Of Entrepreneurial Behaviour
And Research 14(1), 4-23.
Downing, S. (2005) The Social Construction of Entrepreneurship: Narrative And
Dramatic Processes In The Coproduction of Organizations And Identities.
Entrepreneurship Theory And Practice 29(2), 185-204.
Fletcher, D. E. (2006) Entrepreneurial Processes and The Social Construction Of
Opportunity. Entrepreneurship And Regional Development 18(5), 421-440.
Gergen, K.J. (1995). Relational theory and the discourses of power. In D.M.
Hosking, H.P. Dachler, & K.J. Gergen (Eds.), Management and organisation:
Relational alternatives to individualism. Aldershot: Avebury, 29–50.
References 3
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Giddens, A. (1991), Modernity and Self-Identity: Self and Society in the Late
Modern Age, Polity Press, Cambridge.
Goffman, E. (1959), The Presentation of Self in Everyday Life, Pelican Books,
Harmondsworth.
Jack, S.L. & Anderson, A.R. (2002). The effects of embeddedness on the
entrepreneurial process. Journal of Business Venturing, 17, 467–487.
Laitalainen, E., Silvasti, T. & Vesala, K.M. (2008) Attributions and Emotional WellBeing: Giving up Farming in Finland. Rural Society 18 (1), 26-38.
Polkinghorne, D. (1991). Narrative and self-concept. Journal of Narrative and Life
History, 1(2–3),
135–153.
Rae, D. & Carswell, M. (2001). Towards a conceptual understanding of
entrepreneurial learning. Journal ofSmall Business and Enterprise Development,
8(2), 150–158.
References 4
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Pyysiäinen, J. and Anderson, A. and Mcelwee, G. and Vesala, K. M. (2006)
Developing the Entrepreneurial Skills Of Farmers: Some Myths Explored.
International Journal Of Entrepreneurship Behaviour and Research, 12(1), 21-39S
Radu, M. & Redien-Collot R. (2008) The Social Representation of Entrepreneurs in
the French Press: Desirable and Feasible Models?International Small Business
Journal 26; 259
Shaver, K. G. (2005). The social psychology of entrepreneurial behaviour. In Z. J.
Acs, & D. B. Audretsch (Eds.), Handbook of entrepreneurship research. An
interdisciplinary survey and introduction (pp. 331-357). New York: Springer.
Skinner, E. A. (1996). A Guide to Constructs of Control. Journal of Personality and
Social Psychology, 71, 549-570.
Vesala, K. & Peura, J. (2003) Portfolio Farmers, Entrepreneurship, and Social
Sustainability. In Persson, L.O., Sätre Åhlander, A.-M. & Westlund, H. (eds) Local
Responses to Global Changes. Economic and Social Development in Northern
Europe`s Countryside. Work Life in Transition 2003:11. Stockholm. 219-229.
References 5
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Vesala, K. M. and Peura, J. (2005) Presentation Of Personal Control In The Rhetoric
of Farm Families Engaged In Business Diversification In Finland. Journal of
Comparative Family Studies 36, 443-473.
Vesala, H. and Vesala K. M. (2010) Entrepreneurs and Producers: Identities Of
Finnish Farmers In 2001 And 2006. Journal of Rural Studies, 26, 21-30
Watson, T. (2009) Entrepreneurial Action, Identity Work and The Use Of Multiple
Discursive Resources: The Case Of A Rapidly Changing Family Business.
International Small Business Journal 27 (3), 251-274.