DOES ENTREPRENEURIAL SELF-EFFICACY DISTINGUISH ENTREPRENEURS FROM MANAGERS?

CHAO C. CHEN
Rutgers University

PATRICIA GENE GREENE

Rutgers University

ANN CRICK
Rutgers University

Previous research on the psychology of entrepreneurs found that personality traits such as locus of control failed to distinguish entrepreneurs from managers. In search of an individual characteristic that is distinctively entrepreneurial, we proposed an entrepreneurial self-efcacy construct (ESE) to predict the likelihood of an individual being an entrepreneur. ESE refers to the strength of a persons belief that he or she is capable of successfully performing the various roles and tasks of entrepreneurship. It consists of ve factors: marketing, innovation, management, risk-taking, and nancial control. We conducted two studies, one on students and the other on small business executives. Study 1 found that the total ESE score differentiated entrepreneurship students from students of both management and organizational psychology, and that across the three types of students, ESE was positively related to the intention to set up ones own business. We also found the entrepreneurship students to have higher selfefcacy in marketing, management, and nancial control than the management and psychology students. In study 2, we simultaneously tested effects of ESE and locus of control on the criteria of founders vs. nonfounders of current businesses. After controlling for individual and company background variables,

EXECUTIVE SUMMARY

Address correspondence to Dr. C.C. Chen, Rutgers University, Faculty of Management, 81 New Street, Newark, NJ 07102. The authors thank Fred Dansereau and John Miner for comments on earlier versions of this article. Thanks also to Hui-yuan Liao and Terrence Brown for assistance in the project. This research was supported in part by a research grant from the Research Resources Committee of the Faculty of Management at Rutgers University.
Journal of Business Venturing 13, 295316 1998 Elsevier Science Inc. All rights reserved. 655 Avenue of the Americas, New York, NY 10010

0883-9026/98/$19.00 PII S0883-9026(97)00029-3

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the effect of ESE scores was signicant, but the effect of locus of control was not. More specically, it was found that business founders had higher self-efcacy in innovation and risk-taking than did nonfounders. The results of this study demonstrate the potential of entrepreneurial self-efcacy as a distinct characteristic of the entrepreneur. From these results, some important implications can be drawn on entrepreneurial assessment, education, counseling, and community intervention. First, ESE can be used to identify reasons for entrepreneurial avoidance. There may be many individuals who shun entrepreneurial activities not because they actually lack necessary skills but because they believe they do. This is especially true for sectors of the population such as women or those minority groups who are perceived as lacking entrepreneurial traditions. Communities and individuals could benet from identifying sources of entrepreneurial avoidance by targeting their efforts toward enhancing ESE of particular groups or individuals for specic aspects of entrepreneurship. An additional use of ESE is to identify areas of strength and weakness to assess the entrepreneurial potential of both an individual and a community. Once entrepreneurial potential is identied, resources can be channeled and more effectively used to promote entrepreneurship. Finally, diagnosis and treatment of ESE can be performed on real entrepreneurs. The entrepreneur may be completely avoiding, or performing less frequently, certain critical entrepreneurial activities because s/he lacks self-efcacy. For example, the entrepreneur may be avoiding company growth for fear of losing control. Identication and removal of self-doubt will enable the entrepreneur to be actively engaged in entrepreneurial tasks, more persistent in the face of difculty and setbacks, and more condent in meeting challenges. Overall, ESE is a moderately stable belief and requires systematic and continuous efforts to be changed. Two broad approaches can be taken toward desired change. One is the micro-approach that directly focuses on peoples beliefs. In designing and conducting entrepreneurship courses, training institutions should not just train students in critical entrepreneurial skills and capabilities but also strengthen their entrepreneurial self-efcacy. The current state of entrepreneurship courses in most management schools may fall short in both respects. Courses focus on commonly identied management skills, but often ignore entrepreneurial skills such as innovation and risk-taking. Furthermore, the teaching of entrepreneurial skills tends to be technical, with insufcient attention paid to the cognition and belief systems of the entrepreneur. Educators should take into account entrepreneurial attitudes and perceptions when designing or assessing their course objectives. Conscious efforts could be made to enhance ESE by involving the students in real-life business design or community small business assistance, by inviting successful entrepreneurs to lecture, and by verbal persuasion from the instructor and renowned entrepreneurs. The second approach to enhancing ESE is to work on the environment of potential and actual entrepreneurs. According to the reciprocal causation model, the environment may affect self-efcacy not only directly but also indirectly through performance. An environment perceived to be more supportive will increase entrepreneurial self-efcacy because individuals assess their entrepreneurial capacities in reference to perceived resources, opportunities, and obstacles existing in the environment. Personal efcacy is more likely to be developed and sustained in a supportive environment than in an adverse one. A supportive environment is also more likely to breed entrepreneurial success, which in turn further enhances entrepreneurial self-efcacy. Communities can work toward creating an efcacy enhancing environment by making resources both available and visible, publicizing entrepreneurial successes, increasing the diversity of opportunities, and avoiding policies that create real or perceived obstacles. 1998 Elsevier Science Inc.

INTRODUCTION
There is an increasing emphasis on the role of self-efcacy in the study of entrepreneurship, including areas such as entrepreneurial career preferences, intentionality, and performance (Boyd and Vozikis 1994; Chandler and Jansen 1992; Gartner 1989; Krueger and Brazeal 1994; Scherer et al. 1989). Self-efcacy is an individuals cognitive estimate of his or her capabilities to mobilize the motivation, cognitive resources, and courses of action needed to exercise control over events in their lives (Wood and Bandura

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1989). One important effect of self-efcacy is on the choice of behavior settings. Individuals tend to choose situations in which they anticipate high personal control but avoid situations in which they anticipate low control (Bandura 1977b, 1982; Bandura and Schunk 1981; Wood and Bandura l989). Accordingly, to the extent that people plan and choose their career paths, they assess their personal capabilities against the requirements of different occupations. This assessment of their personal capabilities therefore directs people to prepare for and enter occupations in which they feel efcacious but avoid occupations in which they feel a lack of competence (Betz and Hackett 1981, 1986; Miura 1987; Scherer et al. 1989). Starting ones own business or initiating a new venture is often described as a purposive and intentional career choice (e.g., Bird 1988; Katz and Gartner 1988). Although there can be a wide variety of contextual as well as individual factors that inuence the entrepreneurial choice, the role of entrepreneurial self-efcacy has been emphasized as a key antecedent (Boyd and Vozikis 1994; Krueger and Brazeal 1994). Boyd and Vozikis (1994) explicitly proposed that entrepreneurial self-efcacy affects entrepreneurial career choice and development. However, so far no empirical research has been reported that tests this hypothesis. In the current research, we explored whether entrepreneurial self-efcacy distinguishes those who pursue, or intend to pursue, a career of owning and running their own businesses from those who do not. Specically, we conducted two surveys: one on students to examine whether entrepreneurial self-efcacy affected entrepreneurial intentionality and the other on small business executives to examine whether it distinguished entrepreneurs from managers. Because the theoretical foundation of our research question lies in the self-efcacy literature, we rst review some of the pertinent conceptual and measurement issues regarding self-efcacy. We then further develop the concept of entrepreneurial selfefcacy and its relationship to the entrepreneurial decision based on authors from the eld of entrepreneurship. Finally, we report our study and discuss theoretical and practical implications.

SOME CONCEPTUAL AND MEASUREMENT ISSUES OF SELF-EFFICACY

Self-efcacy is a central construct in Banduras social learning theory (1977a, 1982; Wood and Bandura 1989). There have been extensive discussions of self-efcacy and its implications for management and entrepreneurship (e.g., Gist 1987; Boyd and Vozikis 1994; Wood and Bandura 1989). Although it is beyond the scope of this paper to systematically delineate the construct, we address some of the salient issues pertinent to our current research.

Reciprocal Causation of Self-efcacy and Performance

Bandura (1977b, 1986) distinguishes his social learning theory from many traditional psychological theories by emphasizing reciprocal causation among cognition, behavior, and environment. Whereas traditional unidirectional theories depict human behavior as caused either by environmental events or internal dispositions, social learning theories explain human behavior in terms of triadic reciprocal causation among behavior (B),

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FIGURE 1 Relations among behavior (B), cognition (C), and environment (E).

cognitive and other personal factors (C), and environment events (E) (Figure 1). Each of the three factors affects and is affected by the other two. For example, on the one hand, a persons action can change his or her environment as well as the way he or she views self and environment; on the other hand, the environment and his or her perceptions of self and the environment can also change his or her behavior. At a particular time, however, different sources of inuences may have more or less of an effect, and reciprocal inuences do not occur simultaneously (Wood and Bandura 1989). The notion of reciprocal causation is important in understanding self-efcacy and its determinants and effects. For instance, research on the effects of self-efcacy (e.g., Bandura 1977b, 1982, 1986; Bandura and Schunk 1981; Wood and Bandura 1989) found that self-efcacy is the most effective predictor of performance. People with high selfefcacy have more intrinsic interest in the tasks, are more willing to expend their effort, and show more persistence in the face of obstacles and setbacks. As a result, they perform more effectively. Performance and performance accomplishments are not just the outcome of self-efcacy, they are also the determinants of self-efcacy. Performance accomplishments are found to be the most inuential in shaping and estimating ones self-efcacy.1 Individuals monitor and assess their own performance to formulate and adjust their own sense of self-efcacy. Performance and self-efcacy therefore form a cycle of mutual reinforcement. Self-efcacy affects performance through interest, motivation, and perseverance, whereas performance provides feedback information, on the basis of which self-efcacy is further evaluated and modied. It should be noted that research has consistently shown that even though there is a positive correlation between self-efcacy and performance accomplishment, selfefcacy is a better predictor than past performance/experience for future performance (Bandura 1982, 1986). This is because, rst, there are sources other than past performance that affect the persons self-efcacy. Second, it is the attribution of performance rather than the objective performance per se that affects peoples self-efcacy. Low selfefcacy may persist at times of success if external attributions (e.g., chance) are made, the same for high self-efcacy at times of failure. It is possible that even with objectively similar abilities and experiences, people may still develop different levels of selfefcacy.

1 The other three major sources of self-efcacy in the order of inuence next to performance are vicarious experience (learning through role models), verbal persuasions (e.g., being told one is good), and physiological arousal (such as feeling fatigue).

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Level of Specicity
Students of self-efcacy frequently view the specicity of the construct as an advantage both conceptually and for predicting and inuencing behavior (Bandura l982; Gist 1987; Wood and Bandura 1989). However, we argue that it is the relative rather than the absolute level of specicity that distinguishes self-efcacy from other constructs, and selfefcacy of different types of tasks can vary in the levels of specicity. In the following, we rst compare specicity of self-efcacy with that of other similar constructs and then discuss how specicity is relevant to the target of behavior domains.

Expectancy Theory and Self-Efcacy

Self-efcacy is often compared with expectancy theory. Expectancy theory is also cognitive and is based on two estimates (expectations). One is of the probability that effort will lead to a performance level (E1); the other is the probability that performance will lead to an outcome (E2). Clearly, self-efcacy is concerned with the execution of an action, not its outcome (E2). However, there are apparent similarities between El and self-efcacy. Both are self-assessments of peoples own abilities and are concerned with performance. Yet, whereas E1 is exclusively about effort, self-efcacy is about all the internal factors that bear inuence on the execution of actions. Self-reection and assessment of personal efcacy may be greater in scope and depth. For instance, as pointed out by Bandura (1984), self-efcacy may involve assessing coping abilities under stress or even the very motivational state that El takes as given. A low E1 means a belief of low probability that effort will lead to successful performance. A low self-efcacy may mean a belief that one can not execute the behavior because one does not have the required cognitive and emotional abilities to mobilize effort.

Self-Efcacy and Locus of Control

Whereas self-efcacy is a broader concept than effort-performance expectancy, it is considered more specic than locus of control, a belief-based personality variable. There are obvious similarities. Both self-efcacy and locus of control are cognitive and are about control (Rotter 1966). Furthermore, just as self-efcacy can be affected by performance, locus of control can be affected by life experiences (Dyal 1984). However, there are two important distinctions. First, locus of control measures not only behavioral but also outcome control (Rotter 1966), whereas self-efcacy concerns only behavioral control. Secondly, internal versus external locus of control is a generalized construct covering a variety of situations, whereas self-efcacy is task specic, examining the individuals conviction that he or she can perform a specic task at a specic level of expertise (Gist 1987, p. 478). A person may therefore have a strong internal locus of control in general but have a low self-efcacy in performing specic tasks of an area.

Specicity-Generativeness of Self-Efcacy
Although self-efcacy is known to be task specic, the level of specicity can still vary with the task domain. The most frequent denition of self-efcacy refers to perceived capabilities to perform a specic task (e.g., Bandura 1982; Gist 1987). However, Wood and Bandura (1989) also used the term event, which covers a range of specic-

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ity levels from execution of specic tasks to the choice of a career. Obviously the control over the event of a singular task is much more specic than the control over the event of a career. One can imagine even more general events that cut across different vocations. The question is how general can self-efcacy be without losing its specicity, which is lauded as such an advantage over other related constructs. Bandura (1982) maintained that although self-efcacy is task specic, it can also be generative, that is, self-efcacy with respect to one task may be generalized to another task. The notion of generativeness therefore allows a broader application of self-efcacy, while at the same time it imposes a condition for such application. That is, the tasks should be more or less interrelated (Gist 1987). The reason that self-efcacy can be applied to career choice is presumably because an occupation contains a set of interrelated tasks. To use self-efcacy beyond a well-dened task domain across unrelated tasks and situations may offset the very task-specicity advantage of the construct. It may even render self-efcacy indistinguishable from universal dispositional constructs such as self-esteem or locus of control.

Measurement of Self-Efcacy
Self-efcacy can be applied to a variety of domains as long as the efcacy measure is tailored to the specic tasks being assessed (Bandura l982). The predictive power will be sacriced as the measure becomes more general (Gist 1987). This is to say that regardless of the specicity of the task domain, assessment of efcacy has to be at the specic task level to maintain its predictive power. This poses a dilemma for measuring selfefcacy for a general domain. For instance, one can measure self-efcacy of running ones own business by referring to self-employment in general or alternatively, one can measure entrepreneurial self-efcacy by referring to specic tasks involved in running ones own business. As much as one would like to increase the predictive power, it is impractical to enumerate all possible tasks of entrepreneurship. A balance has to be made between specicity and generality so as to adequately but parsimoniously dene a career domain. Gist (1987 p. 481) offers the following advice: It would be more promising to generalize self-efcacy perceptions by aggregating across a number of related but domainspecic measures (e.g., a cluster of specic competencies within verbal skills) than by attempting to devise a broad omnibus test. An omnibus measure is likely to offer convenience, but this probably will be at greater expense to predictive power. One way of measuring self-efcacy of a broader domain, as we did in this study, is to develop a conceptual framework of task requirements, on the basis of which self-efcacy of a domain is aggregated from self-efcacy of various constituent subdomains.

Self-Efcacy and the Study of Entrepreneurship

The concept of self-efcacy has been extensively researched in clinical and healthrelated areas. Only recently has it been extended to organization and management in general (Gist 1987; Wood and Bandura 1989) and entrepreneurship in particular (Boyd and Vozikis 1994, Englehart 1995; Krueger and Brazeal 1994; Scherer et al. 1989). The self-efcacy perspective is highly appropriate for the study of the entrepreneur. First, as a task specic construct rather than a global disposition, self-efcacy theory helps address the problem of lack of specicity in previous entrepreneurial personality

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research (Brockhaus and Horwitz l986; Gartner 1989). Second, as a belief of ones vocational capabilities, entrepreneurial self-efcacy is relatively more general than task selfefcacy. It therefore should be fairly stable yet not immutable. This allows entrepreneurs to derive, modify, and enhance their self-efcacy in their continuous interaction with their environment. Third, as self-efcacy is closest to action and action intentionality (Bird 1988; Boyd and Vozikis 1994), it can be used to predict and study entrepreneurs behavior choice, persistence, and effectiveness. Finally, the relationship between self-efcacy and behavior is best demonstrated in challenging situations of risk and uncertainty, which are believed to typify entrepreneurship.

Entrepreneurial Self-Efcacy and Entrepreneurial Decision

Entrepreneurial decision refers to the decision to create and manage ones own business. It is a complex process that is subject to the inuence of multiple factors. These determinant factors have been broadly classied into contextual and individual factors. Previous studies have focused either on contextual factors such as job displacement (e.g., Shapero and Sokol 1982) and prior work experience (e.g., Mokry 1988) or individual dispositional factors such as the need for achievement and locus of control (Brockhaus 1980). More recent models of entrepreneurial decision adopt a perspective in which the individual is an intentional decision-maker and actor, engaging in the rational appraisal of situational as well as personal factors (e.g., Krueger and Brazeal 1994). A key component of these intentional models is the concept of entrepreneurial self-efcacy (ESE). ESE refers to the strength of an individuals belief that he or she is capable of successfully performing the roles and tasks of an entrepreneur (Boyd and Vozikis 1994; Scherer et al. 1989). Consistent with previous research on career related self-efcacy, Boyd and Vozikis (1994, p. 66) proposed ESE as an important explanatory variable in determining both the strength of entrepreneurial intentions and the likelihood that those intentions will result in entrepreneurial actions. Krueger and Brazeal (1994) anchored self-efcacy in their model of entrepreneurial potential and proposed that ESE constitutes one of the key prerequisites of the potential entrepreneur. Scherer et al. (1989) empirically examined how parental role models affect students ESE, which was treated as an index of entrepreneurial career preferences. According to the above authors, the entrepreneurial decision may be inuenced by ESE for a number of reasons. First, the same entrepreneurial environment could be assessed as replete with opportunities by people with high ESE but fraught with costs and risks by people with low ESE. Secondly, even if people perceive an identical reality consisting of uncertainties, risks, and hardships, those with high ESE would feel more competent to deal with that reality than those with low ESE. Lastly, people with a high ESE anticipate different outcomes than people with low ESE. Brockhaus (1980) contended that because entrepreneurs have a very high belief in their ability to inuence the achievement of business goals, they perceive a very low possibility of failure. High ESE people are likely to associate challenging situations with rewards such as prot, community recognition, and psychological fulllment (Hisrich and Brush 1986), whereas low ESE people are likely to harbor images of failures, such as bankruptcy, disgrace, and psychological stress. For these reasons, individuals who consider themselves efcacious in performing entrepreneurial roles and tasks are more likely to enter the entrepreneurial environment than those who do not. This line of reasoning leads

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us to the following hypothesis,

H1: Individuals with high ESE are more likely to be entrepreneurs than those with low ESE.

For its effect on behavior choice and performance, self-efcacy is widely claimed to have greater predictive power than constructs that lack task-specicity (see our earlier discussion). This implies that ESE should distinguish entrepreneurs better than do global personality traits. Of the global constructs, locus of control has been widely researched in the eld of entrepreneurship (Brockhaus 1980; Brockhaus and Horwitz 1986). Yet, although Bandura (1977a) and others (e.g., Gist 1987; Scherer et al., 1982) have explicated similarities and distinctions between self-efcacy and locus of control, no empirical research has been conducted to test their arguments. We included locus of control in one of the surveys to, on the one hand, examine the convergent and discriminant validity of ESE and, on the other, to compare their relative effect on the criterion variable, the entrepreneurial decision. Given the similarities and differences of the two constructs, we expect that
H2: ESE will be positively related to internal locus of control but negatively related to external locus of control. H3: ESE will distinguish entrepreneurs from managers better than will locus of control.

METHOD Specifying the Domain of Entrepreneurship for Measuring ESE

As discussed earlier, the construct of self-efcacy is intricately related to its measurement. The construct development of ESE dictates a specication of the domain of entrepreneurship as well as its key constituent tasks. Inappropriate specication of the task domain directly affects its conceptual distinctiveness and its predictive power on dependent variables. The challenge to us was to identify specic entrepreneurial tasks that together represent the entrepreneurial domain.2 For this purpose we turn to literature that denes entrepreneurship in terms of the roles and tasks that the entrepreneur performs.

Roles and Tasks of the Entrepreneur

We found three sources of literature that take the role-task approach to entrepreneurship. The first is Longs (1983) The Meaning of Entrepreneurship, a comprehensive review of the denitions of entrepreneurship by theoretical economists since Richard Cantillon (circa 1730). Long denes entrepreneurship primarily as a process. He denes the entrepreneur in terms of competencies, capacities, and skills. Longs review reveals
2 So far there has been no scale that measures ESE at the level of specic entrepreneurial tasks. Sherer et al.s (1982) general self-efcacy measurement is not career related. Betz and Hacketts (1981) self-efcacy scale is career related but not tailored to entrepreneurship. Sherer et al.s (1989) entrepreneurial task selfefcacy is closest to our need but is an omnibus scale that stops at major management functions of accounting, production, marketing, human resources, and general organization without spelling out specic tasks within each function.

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three major themes of entrepreneurship and entrepreneurial capabilities: uncertainty and risk, complementary managerial competence, and creative opportunism. The second task-oriented author is Miner (1990, 1993), who uses the role framework to conceptualize and study motivation patterns of the entrepreneur in relation to the role requirements inherent in the task system of entrepreneurship. Miner identies ve role prescriptions that characterize the task system of the entrepreneur: selfachievement, avoiding risks, feedback of results, personal innovation, and planning for the future. Miners role requirement of avoiding risks is a departure from the earlier traditional view of entrepreneurs being calculated risk takers (McClelland 1961). Following Raynor (1974), Miner argues that entrepreneurs do everything possible to avoid and reduce risks because any immediate failure has the potential consequence of failure to achieve desired career goals due to the loss of the opportunity to continue the pursuit of those goals. Thirdly, Kazanjian(1988) had CEOs of technology-based new ventures identify dominant problems at different stages of growth. Kazanjian identies six clusters of tasks across the stages: organizational systems (e.g., the development of nancial systems and internal controls), sales/marketing (e.g, penetrating new geographic territories), people ( e.g., attracting capable personnel), production (e.g., producing in volumes adequate to meet demand), strategic positioning (e.g., developing a new product or technology application), and external relations (e.g., acquiring key outside advisors or board members). Drawing upon these sources and based upon interviews with ve local entrepreneurs, six entrepreneurial roles were identied. They were innovator, risk taker and bearer, executive manager, relation builder, risk reducer, and goal achiever. These entrepreneurial roles served as a framework, from which 30 tasks were identied. The 36 items were then rated by 30 graduate business students for their essentialness in entrepreneurship, using a 5-point scale ranging from 5 absolutely essential to 1 absolutely nonessential. Twenty-six items scored 4 points and higher and were therefore retained to represent the domain of entrepreneurship for the purpose of assessing ESE.

Samples Study 1
Approximately 140 students from a large northeastern university participated in study 1 on a voluntary basis. The classes included two MBA entrepreneurship electives (n 34), two MBA required organizational behavior classes (n 78), and one organizational psychology elective for undergraduate seniors (n 29). Female students were close to being equally represented in the psychology (47%) and the organizational behavior (52%) classes but were much fewer (23%) in the entrepreneurship classes. Each participant attended only one of the three classes at the time of this study. Participants lled out the questionnaires at the beginning of the semester.

Study 2
Participating in the second study were small business owners and executives from a county chamber of commerce in a northeastern state. We applied a rather restricted denition of entrepreneur (Robinson et al. 1991; Wortman 1986) to distinguish them from managers. Executives who founded their current companies were considered en-

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trepreneurs, whereas those who did not found their current companies were managers. By using this criterion, we attempted a more rigorous test than the class criterion as used in the student sample. The Chamber of Commerce membership sample was restricted to eliminate executives involved with non-prot organizations and those who are currently retired. In addition to measuring ESE, we also included a measure of locus of control as developed by Levenson (1973). Our original sample included 1533 potential respondents. Of these, 281 were eliminated because the business address or the individual in the targeted position had changed. Of the 1,252 remaining, we received 175 usable instruments for a response rate of 14%. The average age of respondents was 45.4 years, the average level of education achieved was a college degree, and 18% of the respondents were female. Fifty-nine percent of the respondents reported being founders of their businesses. The age of the businesses averaged 28 years and ranged from 1 year to 160 years, with 20% less than 5 years old, 50% being less than 15 years old, 80% less than 50 years old. The businesses represented all industrial sectors; however, 42.5% were services, and an additional 13.8% were specically nancial in nature, whereas 12.7% were manufacturing. As for the size of the businesses, the average number of employees was 135, with 60% reporting less than 20 employees and 88% with 100 or fewer employees. The response rate prompted a nonresponse bias test, conducted by calling 75 randomly selected business owners who had not previously responded to the survey. Data was gathered from 30 of the owners on a limited number of key variables, including owner characteristics of age (mean 47.3), gender (13% female), education (a college degree) and founder status (50% founders) and business characteristics of business age (mean 30) and size as measured by number of employees (mean 160). T-tests of the means were performed, and no signicant differences were found between respondents and nonrespondents on any of the key variables.

Measures Entrepreneurial Self-Efcacy(ESE).

ESE was measured in reference to the 26 roles and tasks identied earlier. We asked respondents to indicate their degree of certainty in performing each of the roles/tasks on a 5-point scale ranging from 1 completely unsure to 5 completely sure. To reduce social desirability in reporting ESE, the survey instructions emphasized the importance of honesty for self-assessment and promised condential and individual feedback of the participants own score in comparison with the aggregate score of the total sample. Principal component factor analysis with varimax rotation was performed on the tasks based on the combined data of the two studies. A scree plot of the eigenvalues showed clearly ve factors all above the eigenvalue of 1.00, accounting for 56.6% of the variance (Table 1). Twenty-two out of 26 items loaded on the ve factors, all at or above the level of 0.40. The ve factors were marketing, innovation, management, risktaking, and nancial control. We calculated the total score of ESE by averaging the 22 items; the ve component ESE scores were calculated by averaging items within each of the ve factors. The Cronbach alpha reliability coefcients of the total and subscales are in the diagonal positions of Table 2.

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TABLE 1
Items

Factor Loadings of Entrepreneurial Roles and Tasks

Factors 1 0.86 0.85 0.76 0.65 0.56 0.46 0.09 0.17 0.36 0.17 2 0.10 0.08 0.08 0.35 0.36 0.32 0.71 0.71 0.61 0.58 3 0.14 0.06 0.06 0.09 0.18 0.02 0.10 0.01 0.04 0.26 4 0.03 0.10 0.10 0.06 0.12 0.35 0.39 0.28 0.06 0.05 5 0.10 0.03 0.03 0.05 0.10 0.08 0.02 0.03 0.00 0.22

Marketing Set and meet market share goals Set and meet sales goals Set and attain prot goals Establish position in product market Conduct market analysis Expand business Innovation New venturing and new ideas New products and services New markets and geographic territories New methods of production, marketing and management Management Reduce risk and uncertainty Strategic planning and develop information system Manage time by setting goals Establish and achieve goals and objectives Dene organizational roles, responsibilities, and policies Risk-taking Take calculated risks Make decisions under uncertainty and risk Take responsibility for ideas and decisions Work under pressure and conict Financial control Perform nancial analysis Develop nancial system and internal controls Control cost Eigenvalue % of variance

0.04 0.15 0.33 0.44 0.09

0.04 0.07 0.07 0.16 0.05

0.82 0.70 0.50 0.50 0.50

0.01 0.06 0.02 0.13 0.46

0.17 0.32 0.14 0.07 0.11

0.05 0.03 0.15 0.35 0.11 0.08 0.26 7.42 27.6

0.25 0.23 0.01 0.00 0.03 0.09 0.18 2.36 9.1

0.09 0.07 0.10 0.10 0.10 0.23 0.20 1.88 7.2

0.75 0.72 0.46 0.40 0.07 0.05 0.23 1.71 6.6

0.03 0.13 0.32 0.07 0.88 0.86 0.47 1.28 5.0

Locus of Control
Levenson (1973) developed a triple-dimensional measurement of locus of control: internal control, control by powerful others, control by chance. For our study we focused on the internal control and the chance control. Using principal component factor analysis with varimax rotation, we found two factors that conrmed Levensons original conception. As can be seen in Table 3, ve internal control items loaded on one factor (Cronbach alpha 0.77) and ve chance control items loaded on the other (Cronbach alpha 0.73).

Entrepreneurial Decision
We measured the entrepreneurial decision of the students on a 5-point scale, in terms

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TABLE 2

Correlation Matrix of Study 2

# of Means SD Items 1 2 3 4 5 6 7 8 9 10

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Marketing Innovation Management Risk-Taking Finance Total ESE I control C control Founder Start-Up

3.57 3.87 3.83 4.25 3.69 3.89 5.06 2.02 0.59 0.73

0.79 0.74 0.75 0.56 0.73 0.49 0.71 0.77 0.49 0.45

6 4 5 4 3 22 5 5 1 1

(0.86) 0.55a (0.74) 0.56a 0.38a (0.75) 0.38a 0.52a 0.45a (0.65) 0.30b 0.22a 0.42a 0.27a (0.77) 0.78a 0.73a 0.77a 0.68a 0.64a (0.89) 0.23a 0.27a 0.19a 0.30a 0.13a 0.30a (0.77) 0.18b 0.18b 0.10 0.19a 0.21a 0.24a 0.30a (0.73) 0.02 0.22a 0.06 0.32a 0.07 0.18b 0.11 0.15b 0.07 0.21a 0.05 0.10 0.11 0.15b 0.05 0.13 0.05

Note: Numbers in the diagonal are Cronbach alphas. a p.01, b p.05.

of their intention to start up a business. In ve items, we asked the respondents how interested they were in setting up their own business; to what extent they had considered setting up their own business, to what extent they had been preparing to set up their own business, how likely it was that they were going to try hard to set up their own business, and how soon they were likely to set up their own business. The Cronbach alpha for the scale is 0.92. For the sample of business executives, founder versus nonfounder, coded as one and zero respectively, was the criterion of entrepreneurial decision.

Background Variables
The student respondents provided background information on their gender, the number of management courses they had taken, and whether they had friends or relatives who were or had been entrepreneurs. The business executive respondents were asked about their gender, age, educational level, whether or not they had been involved in starting up a company, whether or not parents or siblings had been entrepreneurs, and information
TABLE 3
Items I am usually able to protect my personal interests. My life is determined by my own actions. I can pretty much determine what will happen in my life. When I make plans, I am almost certain to make them work. When I get what I want, its usually becuase I worked hard for it. To a great extent my life is controlled by accidental happenings. Often there is no change of protecting my personal interests from bad happenings. When I get what I want, its usually because Im lucky. Its not always wise for me to plan too far ahead because many things turn out to be a matter of good or bad fortune. Whether or not I get to be leader depends on whether Im lucky enough to be in the right place at the right time. Eigenvalue % of variance

Factor Loadings of Internal versus Chance Control

Factor 1 0.69 0.81 0.74 0.63 0.71 0.10 0.07 0.10 0.15 0.08 3.32 33.3 Factor 2 0.14 0.12 0.13 0.25 0.04 0.62 0.67 0.62 0.77 0.72 1.76 17.7

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TABLE 4
1. 2. 3. 4. 5.

Correlation Matrix of Study 1

Means SD 0.93 0.48 0.82 1.36 0.50 1 2 0.50
a

3 0.25 0.12
a

4 0.22 0.30a 0.04

a

5 0.23a 0.18b 0.01 0.20a

Entrepreneurial decision ESE total Friends and relatives Managment courses Gender

3.13 3.81 1.32 3.10 0.57

a p .01, b p .05. Managment courses, none 0, 1 to 4 1, 5 to 8 2, 9 to 13 3, 14 and more 4. Gender: female 0, male 1.

about the company, such as years of operation, number of employees, sales volume, and the number of management levels of the company.

ANALYSIS AND RESULTS Study 1

Simple correlations (Table 4) showed that the total ESE score, the number of entrepreneurial friends and relatives, and the number of management courses were all positively related to entrepreneurial decision. Furthermore, male students expressed stronger intention toward becoming an entrepreneur than did female students. Among the independent variables, the number of management courses was positively related to ESE but having entrepreneur friends and relatives was not. In addition, male students had higher ESE than their female peers. When entrepreneurial decision was regressed on all the independent variables, the positive effect of ESE and of having entrepreneurial friends and relatives remained signicant, but the effect of gender became marginal, and management courses had no effect (Table 5). Whereas the above results were consistent with H1, we further examined whether ESE also differentiated the three academic classes, which may be a proxy criterion of the entrepreneurial decision. As an elective, the entrepreneurship course might have attracted students who felt more strongly efcacious in entrepreneurship than students in both the organizational behavior and the psychology classes. As an MBA course, the organizational behavior class was more related to entrepreneurial business than was the psychology class; the management students should therefore score higher in ESE than the psychology students. In summary, we expected that the entrepreneurship class would score the highest on ESE, whereas the psychology class would score the lowest. The results of ANOVA on the total ESE showed a signicant effect of class
TABLE 5 Results of Regression on Entrepreneurial Decision
0.44a 0.19b 0.05 0.14c 0.31 14.87a

Independent Variables ESE total Friends and relatives Management courses Gender R2 F
a

p .001, b p .01, c p .10.

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TABLE 6

ESE by Founding Status

Entrepreneurial Self-Efcacy Total Marketing 3.66 (.78) 3.56 (.76) NS Innovation 4.02 (.68) 3.70 (.72) 0.001 Management 3.85 (.70) 3.78 (.63) NS Risk-Taking 4.47 (.47) 4.15 (.56) 0.000 Financial Control 3.71 (.81) 3.51 (.86) NS

Founder (n 100) Nonfounder (n 58) Pa

a

3.94 (.52) 3.74 (.47) 0.01

Signicance values were those after controlling for individuals gender, age, and education, and the companies current age and size.

(F2,138 7.68; p .001). Specically, the entrepreneurship class (mean 4.00, SD 0.44) scored signicantly higher than both the organizational behavior class (mean 3.80, SD 0.48) (t 2.00, p .05) and the psychology class (mean 3.47; SD 0.46) (t 3.91; p .001). The organizational behavior class scored signicantly higher than the psychology class (t 2.83, p .01). MANOVA procedures using the ve component ESE scores as the dependent variables and academic class as the factor also showed signicance class differences (Wilks Lambda 0.84, F10,268 2.43, Sig. F .01). The univariate results showed that major class differences were in self-efcacy of marketing, management, and nancial control.

Study 2
To test H1 with the sample of real-world entrepreneurs, the total and the component ESE scores were compared between founders and nonfounders (see Table 6). Table 2 presents a correlation matrix of major variables in the second study.

Founders and Nonfounders

An ANCOVA procedure on the ESE total score, controlling for individuals gender, age, and education, and the companies current age and size, found a signicant main effect of the founding status (Mean Square 1.80; F1,154 7.07, Sig. F .008). A MANOVA was conducted with the component ESE scores as the dependent variables, the founding status as the between subject factor, controlling for individuals gender, age, and education, and the companies current age and size. Results showed signicant differences between the two groups of executives (Wilks Lambda 0.94; F5,147 4.57, Sig. F .001). The individual univariate statistics showed that founders had stronger selfefcacy in innovation (t 3.53, p .001), and risk-taking (t 3.96; p .000). These results provided additional support for H1, which predicts that people with high ESE will be more likely to be entrepreneurs than those with low ESE.

Relationship between ESE and Locus of Control

As can be seen from the correlation matrix (Table 2), the total and the component selfefcacy scores were generally positively related to internal control but negatively to chance control. This pattern of relations supported H2.

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TABLE 7
Variables

Results of Logistic Regression Analysis

Model 1 B 0.70 0.21 0.02 0.04 S.E. 0.81 0.40 0.02 0.15 Model 2 B 0.08 S.E. 1.35 Model 3 B 5.19
a

Model 4 B 4.78 0.49 0.01 0.02 0.04 0.31 0.34 0.53d 0.55 1.32b 0.10 166 195.88 27.22b
c

S.E. 1.54

S.E. 2.15 0.44 0.02 0.15 0.28 0.24 0.32 0.33 0.37 0.43 0.24

Constant Gender Age Degree I Control C Control Marketing Innovation Management Risk-taking Financial control n 2 log likelihood Model chi-square
a

0.20 0.37d

0.23 0.21 0.51 0.61c 0.26 1.33a 0.09 176 213.76 24.37a 0.31 0.31 0.33 0.40 0.22

169 225.18 2.61

176 232.93 5.21d

p .001, b p .01, c p .05, d p .10.

Comparing Effects of ESE and Locus of Control

Based on the simple correlation coefcients, internal locus of control had no effect on founding status but chance control had (r 0.15, p .05), suggesting that nonfounders believed more strongly than founders that life was controlled by chance. To compare the relative effect of ESE, locus of control, and other individual demographics we ran a series of logistic regression analyses of the founder versus nonfounder. We rst ran separate logistic regressions on individual backgrounds of gender, age, and education (model 1), internal and chance locus of control (model 2), and the ESE scores (model 3). We then ran a full model with all three groups of variables in the equation (model 4). As is indicated by the chi-square statistics in Table 7, model 1, which contained individual backgrounds was not signicant; model 2 of the locus of control was only marginally signicant; but model 3 of ESE was highly signicant. Within model 3, it was ESE of innovation and risk-taking that were signicant predictors. When all independent variables were entered (model 4), risk-taking self-efcacy remained highly signicant, whereas innovation self-efcacy was only marginally signicant. These ndings provide evidence in support of H3, which predicts that ESE will distinguish entrepreneurs from managers better than will locus of control.

Relations between ESE and Other Variables

Simple correlation coefcients showed that gender, age, and education of the business executives did not have signicant relations with ESE scores, except that age was positively related to self-efcacy of nancial control (r 0.17, p .05). Having a parent or sibling who was an entrepreneur did not seem to affect ESE. Having start-up experience was positively correlated with the total ESE (r 0.15, p .05) and self-efcacy of innovation (r 0.21, p .01). In general, company level variables were not correlated to ESE. However, the start-up sales volume was positively correlated to self-efcacy of marketing, and the management level of the company was positively correlated with

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the total ESE (r 0.19, p .05), self efcacy of marketing (r 0.22, p .01) and management (r 0.16, p .05).

CONCLUSIONS AND DISCUSSION Summary of Important Findings

There are a few important ndings from this research. First, the results from both students and business executives indicated a signicant and consistent positive effect of entrepreneurial self-efcacy on the likelihood of being an entrepreneur. Those students who reported stronger entrepreneurial self-efcacy also expressed a stronger intention to start a business of their own; business founding executives held stronger entrepreneurial self-efcacy than nonfounding executives. Previous research has found the effects of self-efcacy on broadly dened career options, such as traditional versus nontraditional careers (e.g., Betz and Hackett, 1981). Our research, however, conrmed the relationships proposed by Boyd and Vozikis (1994) between self-efcacy and career intention specic to entrepreneurship. Second, we found preliminary evidence showing convergent and discriminant validity of ESE with a related but more general construct, locus of control. As evidence of the convergent validity, ESE was related positively to internal control but negatively to chance control. Scherer et al. (1982) also found convergence between self-efcacy and internal-external locus of control, but their conception of self-efcacy transcends tasks and situations. That our study found a pattern of expected relationships between the specic component ESE measures and the general locus of control measures indicated that despite its specicity, ESE is a belief-based construct and is about personal control. Regarding the discriminant (criterion) validity, ESE predicts entrepreneurial career decision better than locus of control either when they were independent predictors or when controlling for the other. The third important nding was that the component ESE scores were related to various criterion variables differently.3 Although the summary ESE itself may be sufcient for predicting entrepreneurial choice, the component ESE measures allowed us to examine the relative potency of specic subdomains with regard to a particular choice criterion. It was the self-efcacy of innovation and risk-taking that differentiated entrepreneurs from managers as in the case of founders versus nonfounders. This nding is consistent with Long and many others who consider innovation and/or risk-taking as key primary entrepreneurial capabilities, and managerial competence as the complementary. However, what differentiated the entrepreneurship students from their management and psychology peers was not self-efcacy of innovation or risk-taking but selfefcacy in various managerial functions of marketing, management, and nancial control. There may be several reasons for the inconsistency between the students and the entrepreneurs. First, it may be the case that the MBA curriculum in general was heavily oriented toward technical management skills associated with bureaucratic rather than entrepreneurial rms. Students who felt they had a good mastery of these tools might also have felt that they were well equipped for starting their own businesses. Secondly,
3 It is worth noting that this occurred even though the subscores of ESE correlated with each other fairly highly.

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because the surveys were administered at the beginning of the entrepreneurship course, the potential of gaining self-efcacy in innovation and risk-taking may have not come to fruition. Lastly, it may be the case that self-efcacy in innovation and risk-taking are more likely to be developed through real-world experience, which the entrepreneurship students were still lacking. In any case, these differences would not have been found had we surveyed only students or had we only had an omnibus measurement of ESE.

Limitations
As an exploratory study, this research is not without limitations. First, it is very important to extend studies of career choice beyond the more convenient sample of students. Unfortunately, the solicitation of real-world entrepreneurs proved to be a challenge to us. Our business executives were limited to the members of the chamber of commerce. Furthermore, although our nonresponse bias test did not show signicant differences between the respondents and nonrespondents in a number of key background variables, future studies should increase resources and adopt more creative methods to improve the response rate so as to allow for increased validity and generalization of the results. A second problem is the potential social desirability in reporting self-efcacy despite the precautions taken. The high interfactor correlation of our ESE scores may be in part due to social desirability, although positive correlations among the subscores were expected because of the inherent interrelatedness among the entrepreneurial tasks. Future research should think of ways to reduce possible social desirability. For example, efcacy beliefs in terms of competencies can be supplemented with those of potential obstacles (MacMillan, Block, and Narasimha 1986; Krueger and Brazeal 1994). Finally, the cross-sectional design of the research does not allow us to test causal relations between ESE and entrepreneurial choice. According to the reciprocal causality argument, the relationships we found between ESE and entrepreneurial decision can be used to attribute causality to either of the two variables. For instance, one could take ESE as the cause, reasoning that people with higher ESE are more likely to set up their own businesses, or one can take founding experience as the cause, reasoning that people who get involved in setting up a business will develop higher self-efcacy. The same ambiguity can be applied to the students regarding choosing academic classes. This study relied on the rst rationale, assuming that business setup is a purposive and intentional activity and that nonintentional entrepreneurial experience does not necessarily lead to enhanced self-efcacy. We nevertheless emphasize that to truly determine causality, longitudinal research design is necessary. For example, a study could be designed in which MBA students ESE and entrepreneurial intentions are measured prior to the selection of the relevant courses, and again after taking the courses, and their real career choice after graduation can be documented to validate the entrepreneurial intention. Wood and Bandura (1989) also suggested using business simulations to determine causal effects by manipulating and controlling for ESE. Longitudinal studies can also be conducted with the cooperation of institutions such as a small business development center. Potential clients can be tested on their ESE at time one, and their actual venture creation and entrepreneurial persistence can be documented at subsequent time periods so as to explore the relationships between ESE and entrepreneurial entry and performance. Longitudinal studies of real-world entrepreneurial decisions also have the advantage to consistently dene and measure

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the construct of entrepreneur. For, although we applied a rather restricted criterion (founder versus nonfounder) in our second study, half of the businesses were founded 15 years ago; ndings about these past entrepreneurs may or may not generalize to potential or future entrepreneurs. Despite the limitations, this research has important research and practice implications. It raises conceptual issues regarding doing research on the psychology of the entrepreneur and it encourages the use of ESE as an assessment and intervention tool for promoting entrepreneurial choice.

Conceptual Implications
For a long time, entrepreneurship scholars have been searching for constructs of individual characteristics that are unique to entrepreneurs. This study provides encouraging though preliminary evidence that entrepreneurial self-efcacy has the potential to be such an individual construct. The traditional personality approach to the psychology of the entrepreneur experiences a dilemma in that an individual characteristic has to, on the one hand, transcend specic situations in order to be a stable trait and, on the other hand, be unique to the domain of entrepreneurship. Against these dual standards, general personality traits such as the need for achievement and the locus of control have achieved only limited success in differentiating entrepreneurs from higher achievers and internalizers in other spheres of life (Brockhaus and Horwitz 1986; Gasse 1986; Low and MacMillan 1988). Entrepreneurship scholars have been attracted to self-efcacy primarily for its promise of domain specicity. Because it refers to cognitive evaluations of personal capabilities in reference to the specic tasks of entrepreneurship, ESE achieves the entrepreneurial distinctiveness that is both individual and contextual. Although the advantage of domain specicity seems to be obvious, is ESE a stable enough construct to qualify as an individual difference variable? This is both a conceptual and an empirical question. Conceptually, as we have discussed in the literature review section, self-efcacy can vary from very specic (e.g., individual tasks) to moderately specic (e.g., an occupation with a well dened cluster of tasks). Although the malleability of self-efcacy depends very much on the nature of the task and the characteristic of the person, one can say that other things being equal, malleability goes up (or stability goes down) as a task is more specic. Because vocational self-efcacy is moderately specic, we argue it is moderately stable/malleable. In a broader spectrum, vocational self-efcacy, including ESE, is more specic/malleable than general dispositional constructs but more general/stable than self-efcacy of individual tasks. It is therefore neither completely xed nor easily changeable. Although career choice scholars suggested that career related self-efcacy can be used for selection purposes (e.g., Gist 1987), implying that it is an individual difference variable, we submit that it remains to be validated with further empirical research. Studies and experiments can be conducted to explicitly explore the malleability of ESE through purposeful interventions. How do we interpret the lack of a relationship between ESE and the company performance in terms of size (number of employees) and sales? To start with, self-efcacy is used to predict performance at the individual level. But even if the entrepreneur is personally responsible for his or her companys performance, the relationship between ESE and entrepreneurial performance is still more complex than we initially expected. Past research has shown that task-specic self-efcacy best predicts immediately subsequent performance; the more distal, the less the predictability (Gist 1987). Because vo-

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cational self-efcacy is multidimensional and takes a longer time to exercise its inuence, its predictability of career performance may be reduced. Furthermore, many things other than ESE could intervene to affect the companys bottom line. Thirdly, although higher self-efcacy denitely motivates entrepreneurial entry, it may not always positively affect performance. Overcondence may be too detached from reality just as self-doubt can be debilitating. Finally, even if we found a signicant correlation between ESE and the current sales volume we would still have difculty interpreting it. It could be either that good sales temporarily boost ones self-efcacy or that the participants were merely being consistent in reporting the companys sales and their own efcacy beliefs. The lack of a relationship at least ruled out that possibility. To summarize, the effects of ESE on entrepreneurial performance may be less straightforward than on entrepreneurial entry. Further efforts should be made to build and test research efcacy models for entrepreneurial performance.

Practical Implications
The ndings of this study also have practical implications. First, ESE can be used to identify reasons for entrepreneurial avoidance. Although a low ESE may reect an accurate assessment of ones actual capabilities, there are many who otherwise would become entrepreneurs but for doubts of their entrepreneurial self-efcacy. This is especially true for sectors of the population such as women or certain minority members who may possess necessary entrepreneurial competencies but were deterred by low ESE from entering a particular type of business or an entrepreneurial career altogether. Communities and individuals could benet from identifying sources of entrepreneurial avoidance by targeting their efforts of enhancing ESE at particular groups or individuals for particular aspects of entrepreneurship. An additional use of ESE is to assess the entrepreneurial potential of both an individual and a community. Krueger and Brazeal (1994) argued that the prerequisite of entrepreneurship is the existence of entrepreneurial potential, of which self-efcacy is a key component. Once entrepreneurial potential is identied, resources can be channeled and more effectively used to stimulate entrepreneurial entry. Diagnosis and treatment of ESE can also be performed on current entrepreneurs. Lack of ESE may lie behind the fear of growth, diversication, or performing critical aspects of the business. Recognizing and pinpointing areas in which the entrepreneur feels inefcacious is the rst step toward addressing the problem. Strengthened selfefcacy will enable the entrepreneur to be more active in expanding and performing critical activities and more persistent in the face of difculty and setbacks. Because ESE is moderately stable, systematic and continuous efforts have to be made to enhance and sustain ESE. Two broad approaches can be taken. One is the micro-approach that directly focuses on peoples beliefs. In designing and conducting entrepreneurship courses, training institutions should not just pay attention to training students in critical entrepreneurial skills and capabilities but also to strengthening their entrepreneurial self-efcacy. The current state of entrepreneurship courses in most management schools may fall short in both respects. Courses primarily focus on complementary skills of management but not as much on entrepreneurial skills such as innovation and risk-taking. Furthermore, teaching of entrepreneurial skills tends to be technical with insufcient attention paid to the cognition and the belief systems of the entrepreneur. Entrepreneurship educators should take into account entrepreneurial at-

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titudes and perceptions in both designing and assessing their course objectives. Conscious efforts can be made to enhance ESE by involving the students in business design or community small business assistance, by inviting successful entrepreneurs to lecture, and by verbal persuasion from the instructor and renowned entrepreneurs. The second approach toward an enhancement of ESE is to work on the environment of potential and actual entrepreneurs. According to the triadic reciprocal causation model, the environment may affect self-efcacy not only directly but also indirectly through performance. An environment perceived to be more supportive will increase entrepreneurial self-efcacy because individuals assess their entrepreneurial capacities in reference to perceived resources, opportunities, and obstacles in the environment. Personal efcacy is more likely to be developed and sustained in a supportive environment than in an adverse one. A supportive environment is more likely to breed entrepreneurial success, which in turn enhances entrepreneurial self-efcacy. Consistent with this argument about the environmental effect, Krueger and Brazeal (1994) posited that creating a congenial environment facilitates the perception of feasibility for entrepreneurship. Toward that end, the authors recommended that communities should, among other things, make resources both available and visible, publicize entrepreneurial successes, increase the diversity of opportunities, and avoid policies that create real or perceived obstacles. Entrepreneurial self-efcacy is not a panacea but only one variable in the complex process of entrepreneurial decision and action. However, it is an individual characteristic that shows signs of being unique to the potential and actual entrepreneur. Incorporating this construct into models of research, education, counseling, and community intervention may help us better understand entrepreneurial action and give us some additional leverage to translate entrepreneurial potential into entrepreneurial reality.

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