Self, agency, and the social
psychology of entrepreneurship
Kari Mikko Vesala
University of Helsinki
Background
• ”Social psychology of entrepreneurship”: A
research team at the Department of Social
Studies (University of Helsinki)
• Aim of the team: to analyse entrepreneurship as
a psychological, social and cultural phenomenon
from an agency and self –perspective
• Existing outlines of social psychology of
entrepreneurship are not satisfactory for our
purposes
Introduction
• Main points of the lecture:
-previously proposed cognitive approach can be
complemented with a social construction
approach
-self-related beliefs can be viewed as part of
social construction of entrepreneurship
-both qualitative and quantitative methods can
be utilised in such approach
Self, agency, and the social psychology of
entrepreneurship
1. Introduction
2. Outlines of the social psychology of entrepreneurship
3. Social construction approach in the entrepreneurship
research: contributions and challenges to social
psychology of entrepreneurship?
4. The construction of personal control in the rhetoric of
farmers involved in business diversification
5. Personal control beliefs among rural small business
owners and farmers
6. Conclusions
1. 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)
• Intrapersonal processes that ”guide the entrepreneur´s
venture-organizing activities (=business start-up and
persistence in it)”: social cognition, attitudes, self (e.g.
attributions of success, overconfidence, self-efficacy)
• Variable approach: explains overt behaviour by (internal)
cognitive factors; rejects qualitative methods
1. Outlines of the social psychology of entrepreneurship
• Carsrud & Johnson (1989) Entrepreneurship: A social
psychological perspective.
• Entrepreneurship as a role: pursuit of business
opportunities that takes place in a context of social
networks and transaction relations.
-> emphasis on the means and processes of social
influence viewed as interpersonal behaviour and
communication (contact creation, impression
management etc.)
No explicit stand on the methods
1. Outlines of the social psychology of entrepreneurship:
Conclusion
• Shaver focuses on intrapsychic (cognitive) factors that presumably
contribute to business start-up behavior and persistence in it. Such
cognitions are approached as separate antecedent entities that
affect business behavior
• C & J elaborate on the description of entrepreneurial behaviour: it is
viewed as a role/a set of behaviours (a process of pursuing business
opportunities in a social context). Thus, it involves, for example,
influencing other actors or gaining resources, as well as taking a
role of an entrepreneur ( = adapting ”entrepreneurial” selfdefinition or ´identity´).
• -> In both outlines, there are conceptual associations with the
self (self-efficacy and self-evaluation in Shaver, role in C & J). (e.g.
Baumeister: Self concept involves reflective, relational and agentic
aspects).
2. 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 like Harre, Gergen, or Potter &
Wetherell, narratologists like Bruner or Polkinghorne, not to mention
dramaturgical approach of Goffman.
• Topics: construction of business opportunities (Chiasson &
Saunders; Jack & Anderson Fletcher); entrepreneurial personality
(Chell); entrepreneur identity (Watson, Down & Warren, Downing );
entrepreneurial learning (incl.self-beliefs) (Rae & Carswell)
• 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)
2. 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 opportunites and construct him/herself as an
entrepeneur 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.
2. 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)
2. Social construction approach… Conclusion
•
•
•
•
Entrepreneurship is understood as a social construction
-of business opportunity (recognition and realisation)
-of entrepreneurial self.
Thus, the self is again at the focus (now esp. identity, agency), but
the interest is now in the construction of self
At the core of the multi-disciplinary study on entrepreneurship there
is an idea of special agency : Entrepreneur is an actor who ”makes
it happen
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
4. The construction of personal control in the rhetoric of farmers
involved in business diversification
• Control constructs (Skinner 1995): locus of control, selfefficacy, perceived behavioural control … -> personal
control
• P.C. as a criterion and a resource for the construction of
entrepreneurial self (identity, agency)
• Vesala & Peura 2005: how farm business owners
present themselves in terms of personal control in the
market arena?
4. The construction of personal control in the rhetoric of
farmers involved in business diversification
• 40 interviews with farmers engaged in diversified business activities
• 10 statements concerning customer and marketing related means
for enhancing the business (e.g. ”Salesmanship is crucial for success in
business”, “It is difficult to work things out with my clients by talking”)
• Free comments were requested; further accounts and justifications
were encouraged
• Stands and justifications were analysed in detail; the overall rhetoric
was interpreted from the perspective of self-presention regarding
personal control in the market arena
• The connection between self-presentations and the customer
structure of each case was checked and the cases were compared
to each other
Case1: Paavo (machine contracting)
• Paavo owns a crop farm, but earns over a half of his
living by working under contract for a large Europe-wide
forest industry group. Paavo’s machinery is capable of
doing all the different procedures from thinning to felling
of timber. He owns his firm with his wife and they have
one employee. The limited company was started 10
years ago, but Paavo has been engaged in forest
industry even longer.
• The interview was conducted with Paavo.
Case 2 Mika (tourism)
• Mika and his wife have been in the rural tourism business for 10
years. They have a small farm (7 hectares) on which they practice
berry and apple production and processing. The income from
agriculture has not been sufficient and the tourism business has
become more and more important for them. They have four cottages
to rent, and additional two apartments under construction. The
customers come mostly from Southern Finland but also from Central
Europe. Many of them come on regular basis. The interview was
conducted with Mika.
Case1: Paavo (machine contracting)
• Statement 1 It is worthwhile to invest in advertising. As
an immediate response to this statement, Paavo agrees
on a general level. However, thereafter he denies clearly
the usefulness of advertising in his own business. He
justifies his stand by saying that his firm has got one key
customer, and that the private forest owners do business
with this key customer (the Company). He gets his
contracts through the Company, and therefore – in his
case – advertising is totally useless.
Case 2 Mika (tourism)
• Statement 1 – It is worthwhile to invest in advertising. Mika starts to
comment the statement with a reservation that “it is possible to
invest in advertising any amount of money, and that’s the purpose of
advertising agencies”. After that, he takes a tentative stand for the
statement, referring particularly to his own business industry: ”In the
tourism industry you have to be visible, to some extent, every once
in a while.” In his argumentation Mika specifies different forms of
advertising and deliberates the pros and cons of them. He mentions
a short ad in a nationwide newspaper, contact information in
nationwide tourist guides, and the firm’s own website as such forms
of advertising that he has found worthwhile and profitable in his own
business. He justifies his comments plausibly with his own
experience. He also stresses the importance of timing and the fact
that advertising must be done in several languages. All in all, in spite
of the reservations, he agrees that advertising is, to a certain extent,
profitable for him.
Case1: Paavo (machine contracting)
• Statement 6 It is difficult to work things out with my clients by talking.
For Paavo, it is easy to agree with this statement. His immediate
response goes as follows:
1 Paavo: This is exactly how it is.
2 Interviewer: So this fits.
3 Paavo: It is right then (well), it is exactly, you couldn’t say it any better.
4 Interviewer: ((laughs))
5 Paavo: They are in the dominating market position and, well… they have
6 control over how much money you get from these ( ). When you can’t
7 really influence those… just like those rates, you can’t influence them in
8 any way, you just have to listen.
--12 Paavo: There is no, there is really no, yes these gentlemen well, they
call it negotiation but it is,
13 I think it is entirely a matter of dictation.
Case1: Paavo (machine contracting)
• Excerpt shows that Paavo takes a clear stand for the statement. He
justifies his view also quite credibly. His client is in the dominating
market position: the representatives of the Company name the
prices, and there is no way Paavo can affect the tariffs. According to
Paavo, in the negotiations with the client the role of the contractors
is to listen, and accept the decisions made. In the end the
interviewer asked if there are any issues open to debate with this
client. Paavo mentions some examples, but stresses that they are
only minor issues in his business.
Case 2 Mika (tourism)
• Statement 6 – It is difficult to work things out with my clients by
talking. Mika absolutely disagrees with the sixth statement. He
justifies his stand by giving examples of managing negative
feedback, which he – in his own words – rarely receives. He claims
that it is a fundamental thing to work things out by talking, and
emphasises the need to be flexible enough in order to prevent small
problems becoming bigger ones.
• In his further commenting he gives two examples of unsatisfied
customers, who have tried to get some of their money back
afterwards. Both incidents happened when the marketing company,
The Agency, was the intermediate reseller for him, and both
unsatisfied customers directed their feedback and claims to the
intermediate, not directly to our interviewee. Mika continues, that
there have been no such difficulties after he has done the business
directly with the end users, without the intermediate organization. In
other words, Mika views it quite beneficial that he has been able to
establish a direct channel to sell his services to the end users.
Case1: Paavo (machine contracting)
• Taken together, Paavo presents himself in his
argumentation as an actor who does not have much
personal control over his success, at least in terms of
marketing and customer related means. He has no use
for advertising and no need for salesmanship, he has not
been able to differentiate his service, and renewing the
business is difficult due to financial issues. A close
customer relationship could be beneficial, but he does
not mention of having any. He is not able to negotiate
with his client and for him it is not possible to be
selective with his customers or contracts. He is actually
able to mention only one thing, with which to affect the
customer. That is the quality and cost-effectiveness of
his production work.
Case 2 Mika (tourism)
• In all, Mika has lots of rhetorical resources to make a presentation of
an entrepreneur who has personal control in the market arena. He
argues for the usefulness of the various means of control that are
mentioned in the statements, and he is able to justify his comments
by referring to his own experiences and practices, and giving
illustrative examples, too. He also considers the limitations of the
different means and tells how he has learned to use them in the
course of time.
• Mika refers to vertical relations in his argumentation. Even though
disconnected from the marketing agency, he mentions it in many
occasions and emphasises that he keeps avoiding the situation in
which he would be dependent on the marketing agency or on too
few customers.
4. The construction of personal control in the rhetoric of farmers
involved in business diversification: conclusion
• Clear differences in self-presentations (The other 38 cases
fell somewhere in between these two extreme cases + extra variety
in rhetoric )
• Self-presentations were actively constructed by the
interviewees
• Construction was constrained/enabled by the availability
of rhetorical resources provided by the perceptions and
experiences of own activities and position in relation with
customers
• Personal control in the market arena appears as a
socially constructed belief, which is embedded in the
immediate social transaction context
5. Personal control beliefs among rural small
business owners and farmers
• Follow-up of Vesala & Peura 2003
• A postal questionnaire survey 2006
• Total sample 1093 (response rate 30%): Conventional
farmers (n= 235), farmers with business diversification
(n=663), non-farm rural small business owners (n=195)
• General purpose: to compare the level of
entrepreneurship in these groups on several dimensions
• Aim of this presentation: to show quantitative
differences in personal control belief between these
groups and point out the special relevance of personal
control in the study of entrepreneurial self and agency
5. Personal control beliefs among rural small
business owners and farmers
The items used in the measurement of personal control:
“To a great extent I can personally control the success of
my firm”,
“My personal chances to influence the successfulness of
my business are practically rather low” (inverted),
“I am able to affect the success of my firm through
decisions concerning products and through production”,
“I am able to affect the success of my firm through
marketing and customer connections”.
(Cronbach alfa for the sum variable .77)
Figure 1. Experience of personal control among the sample groups in year 2006.
The proportion of respondents who partly or strongly agree with the statements
general statement
Inverted general statement
in production area
in market arena
0
20
40
60
80
%
Conventional farmers
Diversified farmers
Non-farm entrepreneurs
100
Table 1. Correlations (Spearman) between personal control and some other
variables
Variable
Correlation
age
-.03
sex
-.04
education
.07
revenue year 2006
.16 ***
non-family employees
.26 ***
competitiveness
.39 ***
profitability
.19 ***
customer activeness
.39 ***
Table 2. Best predictors of personal control experience. Linear regression analysis
Dependent
variable
Predictors
Beta-value
std. Beta
t-value
Customer activeness
.32
.30
8.71 ***
Competitiveness
.36
.26
7.26 ***
Profitability
.09
.09
2.73 ***
Personal control
Model: R Square=.25; adjusted R Square=.24
Figure 2. Competitiveness and profitability among three sample groups.
Proportionate distributions.
able to compete by
prices
able to compete by
quality
able to compete by
expanding business
profitability has
improved
profitability will
improve
0
20
Conventional farmers
40
60
Diversified farmers
80
100
Non-farm entrepreneurs
Figure 3. Customer relationships and non-family employees among three sample
groups. Proportionate distributions.
number of customers ten or
more
engage in marketing “a lot”
conversation with customers
“a lot”
working time in sales and
marketing 20% or more
non-family employees (one
or more)
0
20
40
60
80
%
Conventional farmers
Diversified farmers
Non-farm entrepreneurs
100
5. Personal control beliefs among rural small business
owners and farmers: conclusion
• Results from 2006 conform to results from 2001
• Personal control in business: significant (.001) differences between
the three groups
• Differences in personal control beliefs were connected to differences
in business (esp. competitiveness & customer activeness)
• These results are understandable in the light of the qualitative
analysis of the construction of personal control belief in the selfpresentations of diversified farmers
• These results are statistical generalizations based on the responses
by farmers and small business owners. They do not falsify the
interpretation of personal control beliefs as social constructions.
However, they do not uncover the active role of the individual in the
construction process, nor do they uncover the variety and richness
of details at the level of individual cases
5. Personal control beliefs among rural small business
owners and farmers: afterword
• Entrepreneurial self and agency should be
understood as a multi-dimensional
construct:
• e.g. the differences between the three
group vary on different dimensions
Conventional farmers
Diversified farmers
Rural non-farm small business
0,6
0,4
0,2
0
-0,2
-0,4
-0,6
Risk-taking
Innovativeness
Growth
–orientation
Conservatism
(inverted)
Self-efficacy
Personal
control
Entrepreneur identity
F=28.3, p<.001; Pairwise comparison: Conventional farmers weaker
than other groups, no significant difference between the other two
groups.
Correlations between entrepreneur identity, personal control, selfefficacy, innovativeness, risk-taking, growth orientation and
conservatism.
Entr.
Identity
Risk
Inno
Growth
Conserv.
Risk
.197
Inno
.262
.460
Growth
.260
.273
.425
Conserv.
-.351
-.557
-.408
-.429
Selfefficacy
.428
.326
.331
.388
-.374
Personal
control
.400
.139
.442
.276
-.358
All correlations p<.001
Selfefficacy
.556
6. Final conclusions I
It seems possible and worthwhile to complement
the previously proposed cognitive approach in
the social psychology of entrepreneurship with a
social construction approach that analyses the
formation of entrepreneurial self in different
contexts
-the typical research questions differ (e.g. “what
intrapsychic factor contributes to business start-up
behavior”, “how do business owners construct their
identity”).
-therefore, the choice of approach must depend, of
course, on the particular contexts under study, and the
particular research interests
6. Final conclusions II
Self and agency –related concepts (such
as the control constructs) can be utilised
also in the social construction approach,
not only in the cognitive approach
-theoretical (ontological) assumptions connected to
these concepts must be discussed, however. (Cognitive)
constructivism is a relevant issue here.
6. Final conclusions III
• Both qualitative and quantitative methods can be
utilised in social construction approach
-although qualitative methods suit particularly for
uncovering the active role of the individual as well the
variation and detailed nature of the construction
processes, while quantitative suits for searching
generalizations on the base of already constructed
variables
Introduction
• Research on entrepreneurship is multidisciplinary:
economics, management studies, psychology, sociology
• Distinction between small business ownership and
entrepreneurship (Carland et al 1983) :
- dynamic process: start-up, growth, major change of the
venture;
- generic orientation or mode of action: innovation, risktaking, pro-activeness, pursuit of opportunities (not only
within small business!)
2. Social construction approach… Conclusion
• Social construction of entrepreneurial self? (comp. Baumeister)
-Reflection: Individual reflects upon her action and agency, on her
relations with others, (e.g. identity, self-efficacy)
-Relation: individual must relate to others and to the fact that others
perceive and define her (e.g. self-presentation, transaction)
-Agency: Individual regulates and governs herself, attempts to
influence and control her situation and environment (e.g. utilising
contacts and networks, managing impressions)
Case2: Paavo (machine contracting)
•
Paavo does not make a self-presentation of an entrepreneur with personal
control. Our interpretation is that there would not be much rhetorical
resources available for him to do so. Additional grounds for this
interpretation can be found in Paavo’s commenting during the third
statement:
25 Paavo: It is a little like, difficult because this is goddamn difficult to
26 interview, this forest machinery business well, these questions don’t kind
27 of don’t apply. It’s fucking difficult to answer them.
•
Paavo grows inpatient with the statements and expresses his feelings by
cursing. This kind of meta-level comment gives additional support to our
interpretation, that for Paavo the rhetorical resources based in his own
practical experience are lacking. Even though Paavo is able to view the
usefulness of the different means on a general level (statements 1, 2, and
5), he is unable to do that is his own case and unable to draw examples
from his own business activity. Anyhow, it became evident from his
comments that he wished he had more personal control.
Case21 Paavo (machine contracting)
• All in all, based on his argumentation on the market-related personal
control, Paavo fails to construct himself an entrepreneurial identity.
And as a matter of a fact, right after the tape-recorded interview,
Paavo doubted explicitly whether he should be regarded as an
entrepreneur at all because in his business he is lacking the space
to pursue and control his success. Mika, on the contrary, gave the
impression that he considers himself to be an entrepreneur (see
excerpt 3)
• The difficulty in constructing entrepreneurial identity in the case of
Paavo seems to be related to the vertical position, in which there is
only one buyer, and the relation between the farmer and the buyer is
asymmetrical and hierarchical, the latter being a large company and
the former running a small business.