Module 7 – ENTREPRENEURIAL GOALS AND ASPIRATIONS

Overview:
- Most entrepreneurship researches measure the success of firms by observing firm’s history, such
as survival, exit, and growth of the firm
- Different entrepreneurs have different goals and aspirations when creating and operating their
business
- This review will correspond to the literature on personality
- Rather probable that the personality traits of entrepreneurs differ significantly by the goals and
aspirations that entrepreneurs bring to the business
- And future research can gain by bringing tighter alignment of these two literature strands
Objectives:
At the end of the module, students should be able to:
 Know and understand the varying goals and understand goals and aspirations of entrepreneur;
 Explain the stylized facts about entrepreneurship pertaining to economic growth;
 Evaluate empirical findings pertaining entrepreneurial reasons for the creation of business
enterprise; and
 Explain how size/ scale of business enterprise relates with entrepreneurial goals and aspirations.

Many times the words “aspiration” and “goal” are used interchangeably. An aspiration is a long-term
hope or ambition of achieving something in life, such as becoming a lawyer or a medical doctor. In
contrast, a goal can be a shorter-term individual step toward achieving a specific aspiration, such as
passing the SLSU entrance exam or getting admitted to medical school.

Defining a career aspiration is the first step toward marking out a path for the future that is possible to
achieve in short-term goals. Aspirations may be determined according to work dreamed about in
childhood, natural talents and abilities, or hobbies and favorite pursuits. The desired destination is the
aspiration. Writing down specific, achievable and measurable goals toward the desired destination helps
focus efforts to reach the career aspiration in small steps.

Goals must have time limits. If a person’s objective is to pass a chemistry course in a nursing program,
the written goal might be to obtain tutoring, spend five extra hours studying outside of each class and
pass the course at the end of three months with a high grade. Writing down aspirations and goals allows
assessment of progress toward the desired objectives and enables a person to make adjustments as
needed.

Reasons for Deciding to Start a Business:

- One key source of longitudinal data on entrepreneurial motivations is the Panel Survey of
Entrepreneurial Dynamics (PSED)
- (The Panel Study of Entrepreneurial Dynamics (PSED) research program is designed to enhance
the scientific understanding of how people start businesses. The projects provide valid and
reliable data on the process of business formation based on nationally-representative samples of
nascent entrepreneurs, those active in business creation. PSED I began with screening in 1998-
2000 to select a cohort of 830 with three follow-up interviews. A control group of those not
involved in firm creation is available for comparisons. PSED II began with screening in 2005-
2006, followed by six yearly interviews. The information obtained includes data on the nature of
those active as nascent entrepreneurs, the activities undertaken during the start-up process, and
the characteristics of start-up efforts that become new firms.)

- Five classes of Motivations (Hurst and Pugsley, 2011):

1. Non-monetary reasons (the most frequent factor in the creation of a new business)
(recognition, awards, perks and benefits, gifts, time off)
2. To generate income
3. To realize a good business idea
4. Lack of options
5. Others

- the huge majority of small commercial enterprises do not intend to innovate or expand their
operations, but are instead to stay at their current size and range
- classifications are not standardized as there are many motivation typologies in studies
- ex. Kuratko et al (1997) employed a four-factor structure of goal statements: extrinsic rewards,
independence/ autonomy, intrinsic rewards and family security
Entrepreneurial Goals:
 Goals are an important element when making decisions for a business or measuring progress. They
are especially important for entrepreneurs who are starting a business from the beginning. If you're
an entrepreneur, you may be looking for some ideas for the types of goals to set yourself.
 Entrepreneurship goals are goals set by someone who has started a business. These goals are
either for the business or for the entrepreneur. They give the entrepreneur something to work
toward, which helps them make decisions while they are creating their business. Specific goals also
help an entrepreneur track their progress.
 Entrepreneurs are driven by pecuniary (monetary) versus non-pecuniary benefits
 Hurst and Pugsley (2011), found that most entrepreneurs, being ridden by non-pecuniary
benefits, have little intention to innovate or expand their market share
 Bhide (2000), describe case studies of fast-growing firms that connect the actions and behaviors
of founders to their firm growth, some shifts in motivation with time and experience
 Hamilton (2000), found that entrepreneurs have both lower initial earnings and lower earnings
growth than in paid employment
 These influential studies underlie the conventional idea that entrepreneurs sacrifice their income to
become entrepreneurs, showing that non-monetary incentives need to be present as well
 Classified two major types of entrepreneurs: (1) growth-motivated entrepreneurs looking for
opportunities and innovation, and (2) necessity-driven entrepreneurs opening up new businesses
when options are thin
 Grudge (2010) described this partition in a critique of the entrepreneurship and development
literature
 Much research is being done in particular industries where non-monetary motivations define
entrepreneurial goals
 Bergevoet (2000) conducted interviews and learned that the objectives of subsistence
businesses are highly influenced by socio-cultural attributions
 Reijonen and Komppula (2007) showed in the craft and rural tourism industries how
entrepreneurs measure their performance by non-pecuniary criteria and find success
 Haber and Reichel (2005) the most important subjective performance measures include the
perceived customer satisfaction and the perceived profitability relative to competitors, while the
key objective performance measures are related to firm growth
 Some researches use gender in entrepreneurial goals
 Justo et al (2006) compared gender and parental status on intrinsic (more appreciated by
females) and independent measures of success (evaluated equally by men and women)
 Buttner and Moore (1997) differentiated between corporate climbers, who emphasize gaining
managerial experience, from intentional entrepreneurs who emphasize the importance of
technological competence

Summary:
- much work continues to be executed in this largely unexplored area, and a lot of the initial research
needs to concentrate on data collection via surveys and consultations
- policymakers have a great deal to gain by understanding the specific objectives of growth-oriented
entrepreneurs that disrupt and develop the economy
- most entrepreneurs have multiple non-pecuniary goals, and policy makers need to interpret and
sustain this important component of the economy as well
- attempts to bridge the literature on entrepreneurial personality and motivations may prove very fruitful
in the age to come