THE ENTREPRENEURIAL MIND
Sociologist Homan (1961)
Module 5 - Entrepreneurial Mindset
Measures Towards Opportunity
LESSON 1 – Historical Background of Entrepreneurial Motivation
Sigmund Freud (1915)
- The study of motivation can be traced to the
early works of Freud.
Deutsch and Krauss (1965)
- He uses of the term “instincts” operates a great
deal like “drives” and “motivations”.
- “instincts” were persistent pressures to change
an internal state by external activities, often via
“unconscious mental activity.”
Basic Form of Motivation
- Achieve success and prevent failure.
Most Basic Form of Motivation
- is the human drive to satisfy the body’s need
for survival. With it’s highest form reflected in
achievement motivation (Ach).
Achievement Motivation
- is a research stream initially fostered by
Atkinson ( 1964).
LESSON 2 – Motivation to Survive V.S Motivation to Grow
Survival Motivations – are driven by the basic need to
sustain oneself and ensure safety.
Survival-oriented Motivations – can be seen in the
“necessity entrepreneur” identified in the
Entrepreneurship Monitor (GEM)
Necessity Entrepreneurs – are individuals in developing
countries who start small enterprises out of necessity.
Ex.
- Street vendors/sellers
- Sari-sari store owner
- Karinderya owners
- Resellers
Opportunistic Entrepreneurship
– growth-oriented motivation, identified by the
Global Entrepreneurship Monitor (GEM) studies.
- Focused on the achievement of success through
exploiting an opportunity for some form of gain.
- Involves entrepreneurs seizing opportunities as
they arise, recognizing favorable circumstances.
Ex. (Netflix, Instagram, and Slack)
- proposed the motivational principles of
hedonism and the theory of “economic man"
Utilitarian
- emphasis on the role of “reward,” “drive
reduction,” “pleasure,” “reinforcement,” or
“satisfiers,” as proposed by psychological
theories of motivation in learning (Deutsch
and Krauss, 1965).
- summed up the role of motives, values,
and skills as those factors that determine
what people do in their lives McClelland
(1985).
LESSON 3 – Drive Theories and Incentives Theories
Motivation has been studied in order to answer
three kinds of questions:
1. What activates a person?
2. What makes him, or her, choose one
venture over another?
3. Why do different people respond differently
to the same stimuli?
These questions give rise to three important
aspects of motivation: activation, selection
direction, and preparedness of response (Perwin,
2003).
Drive Theories
Global
- suggests that there is an internal
stimulus, e.g., hunger or fear, driving the
person and that the individual seeks a way
to reduce the resulting tension. The need
for tension reduction thus represents the
motivation (Freud, 1924).
- characterized by the dominance of “push
factors”. These internal drives or needs pus
individuals to take action to alleviate the
tension or discomfort they experience.
Incentive theories
- emphasizes the motivational pull of
incentives, i.e., there is an end point in the
form of some kind of goal, which pulls the
person toward it, such as achievement
motivation in the entrepreneur (Carsrud et
al., 1989).
THE ENTREPRENEURIAL MIND
- incentives theories emphasize “pull
factors.” External incentives or goals act as
magnets, pulling individuals toward them
as they strive to attain those objectives.
Cognitive Approach
- within personally psychology has traditionally
aligned more with incentive theories.
- emphasizes the importance of external
incentives and the incentives nature of motives.
It focuses on how individuals are drawn towards
goals and rewards, shaping their behaviors and
decisions.
LESSON 4 – Diversity and Complexity of Motivational Theories
Diversity – the condition of having or being composed of
differing elements.
Complex – a whole made up of complicated or
interrelated parts.
Motivation Theory – study of understanding what drives
a person to work towards a particular goal or outcome.
Fisher (1930)
- Noted that there are fundamentally two schools
of motivational theories, one based in economics
and the other rooted psychology.
Steel and König (2006) and Wilson (1998)
- called for the use of consilience, which they
describe as the linking of facts and fact-
based0020theory across disciplines to create a
common framework between the two schools.
- Entrepreneurship could become indebted to
the recent work on motivation.
- They have brought together various theories of
motivation as applied in economics,
management, and psychology (with a time
dimension) into what they call temporal
motivational theory (TMT).
Locke and Latham (2002, 2004)
- have married task motivation and goal setting
in their recent commentaries. What is
interesting is that these two approaches to
motivation have yet to be adopted by
entrepreneurship researchers.
Goal-setting theory (Theory of Motivation)
- is an organizational psychology theory.
- According to this theory, goals that are clear,
specific, and challenging are more motivating
than easy goals.
The 5 Principles of Goal-Setting Theory
1. Clarity – around goal orientation is a must. The
more clarity there is when setting a goal with an
employee, the less of a chance there is for
miscommunication or misunderstanding.
2. Challenge – goal difficulty also ties to the
effectiveness of goal setting. When a goal
attainment presents a challenge, it leads to a
higher level of motivation – which, in turn, leads
to a higher chance of success.
3. Commitment – employees need a certain level of
buy in and goal commitment. If they’re
committed, they’re not going to have the follow-
through necessary to succeed.
4. Feedback – for employees to successfully hit
their goals, they need regular feedback. That
includes feedback on their process, what they’re
doing well, and where they can improve.
5. Task Complexity – if a goal feels too complex, it
can negatively affect motivation. Instead,
leaders should break down large goals into
smaller, more manageable tasks.
Temporal Motivation Theory
• Expectancy – refers to the belief that your
efforts will lead to successful tasks
completion. In order words, it assesses the
perceived likelihood of achieving a goal. If
you believe your efforts will likely result in
success, your motivation is higher.
• Value – represents the importance or
desirability of achieving a particular goal or
completing a task. Tasks that are seen as
more valuable or rewarding tend to have a
higher motivational pull.
• Time – is crucial component of (Temporal
Motivation Theory) TMT. It emphasizes the
role of deadlines and the temporal aspects
of tasks.
Time influences motivation in two ways:
• Delay Aversion – people tend to be
averse to delaying rewards or
experiencing delays in achieving their
goals. The longer the with, the less
motivated they are.
• Temporal Discounting – refers to the
phenomenon where people tend to
place less value on future rewards or
future outcomes. Means that tasks with
THE ENTREPRENEURIAL MIND
distant deadlines may be perceived as Ps - Probability of Success
less valuable and therefore less
Ms – Motivation of Success
motivating.
Ts – Tendency to Start
Motivation = Expectancy x Value/ (Impulsiveness x Delay)

• Expectancy and Value - the factors that increase
motivation.
• Impulsiveness – tendency to choose immediate
rewards.
• Delay – time until the reward or task completion
decreases motivation.
LESSON 5 – Motivation, Cognitive Dissonance and Risks.
WHAT IS MOTIVATION?
• Procedure that entrepreneurs utilize
boosting their morale to achieve their goals.
(101 Entrepreneurship).
• Services as the reasons, or reasons, that compel
someone to continue striving and working.
(Chrisos, 2023)
• Motivation boosts an entrepreneur’s confidence
to match their goals. (Shagun Chauhan).
• Can vary from positive to negative factors/
• Exhibited in cognitive dissonance and risk
avoidance.
Cognitive Dissonance
- Occurs when a person holds two related but
contradictory cognitions or thoughts. It create
discomfort. (Festinger 1957).
Therefore, a person with a strong tendency to start a
venture which is moderately risky will be the most
pronounced in entrepreneurs with a high motive for
success.
Equation That Can Be Used in Calculating
If = - (1 - Pf) If – Incentive to Avoid Failure
Pf – Probability of Failure
(Taf) = (F x Pf x If) Taf – Tendency to Avoid Failure
for
Pf – Probability of Failure
Lf – Incentive to Avoid Failure
F – Motive to Avoid Failure
The motive to avoid failure (F) is relatively stable (Deci,
1975) and the emotions of shame and embarrassment
accompanying failure as an entrepreneur are greater, the
easier the task: the greater the shame, the greater the
incentives to avoid failure.
Combining These Formula
We will get a tendency to avoid/approach entrepreneurial
venture (E) :
E = (Ms x Ps x Is) + (F x Pf x If)

Risk Avoidance LESSON 6 – Intrinsic and Extrinsic Motivations in Entrepreneurs

- Is the elimination of hazards, activities and Intrinsic Motivations

exposures that can negatively affect an
organization and its assets. (Pratt, 2023) - Refers to a personal interest in the task,
- Focusses on avoiding from engaging in activities achievement motivation intrinsic motivation
that may lead to potential harm, loss or adverse include a large proportion of self-development
outcomes. and self-actualization (Carsrud et al., 1989)

HOW ARE THEY CONNECTED? Extrinsic Motivation

- Research on cognitive dissonance and the need
to avoid failure (Cohen and Zimbardo, 1969) can
be used to explain why entrepreneurs will often
do anything to avoid failure in their venture. To
reduce dissonance, the entrepreneur would be
expected to either lower their
motivation or their motivation to avoid failure.
- Refers to an external reward that follows certain
behavior (Perwin, 2003; Nuttin, 1984)
NOTE, however, intrinsic and extrinsic motivations are
nor mutually exclusive; one can be motivated by both to
perform an act. (Nuttin, 1984; Elfving, 2008).
success
Ryan and Deci (2000)

Equation That Can Be Used in Calculating - They view motivation as the core of biological,
cognitive, and social regulation.
Is = 1 – Ps Is – Incentive Value
- Consider self-determination theory (SDT)
Ps – Probability of Success

Ts = Ms x Ps x Is Is - Incentive Value Self-Determination Theory (SDT)

THE ENTREPRENEURIAL MIND
- spotlights the importance of one’s inner evolved
resources for personality development and
behavioral self-regulation.
- Through this theory, Ryan and Deci empirically External Factors
identified three inherent psychological needs
that are necessary for self-motivation and - Sometimes, things like companies
personality integration. There is the need for reducing their workforce, economic
integrity, affinity, and freedom. If they have conditions, or other situations beyond
these, they will be more likely to complete the
their control can also push people to
task with intrinsic motivation. If they do not have
these, they will be more likely an extrinsic
become entrepreneurs because they
motivation. need to support themselves.

Internal factor – entrepreneurs may be motivated to Goals and Ambitions

succeed and accomplish a goal.
- People may leave secure jobs to
External factors -they may be motivated to be their own
become entrepreneurs because they
boss and obtain wealth.
want to achieve something important
Achievement Motivation (Ach) – is a special form of and inspiring. They're looking for a mix
intrinsic motivation (Deci, 1975)
of personal and external rewards.
Module 6 - Motivations: Goals and Goal Setting Success, Power, and Status

- We also want to explore how desires for

LESSON 1 - Life, Work, and Career Satisfaction as Motivators
success, power, status, and building
WHY PEOPLE SWITCH FROM BEING REGULAR EMPLOYEES TO
relationships motivate entrepreneurs.
ENTREPRENEURS?
However, if society doesn't value
Reasons: entrepreneurship, it's hard to imagine
1. Unhappiness at Work that entrepreneurs are primarily driven
2. Desire for Change by these ambitions.
3. External Factors
4. Goal and Ambitions Future Vision
5. Success, Power, and Status
- Even if their current work doesn't make
6. Future Vision
them happy or isn't very rewarding,
Happiness at Work
some entrepreneurs are inspired by the
- When someone isn't happy with their idea of future success and rewards.
current job, they might decide to Their motivations can make them see
become an entrepreneur. This means opportunities in different ways.
starting their own business.
Career Motivation - What Makes People Work Hard
Importantly, you don't have to lose your it can came from two sources:
job to do this because entrepreneurship
is considered important. 1. Inside Them: Some people are
motivated because they truly love
Desire for Change their work. They enjoy what they do,
so they work hard because it makes
- If the work environment doesn't meet
them happy.
their needs or makes them very
2. Outside Rewards: Others are
stressed and unhappy, it can motivate motivated by things like getting paid
them to look for new opportunities. This well or receiving recognition. They
motivation can lead them to come up work hard because they want these
with new ideas and start projects. external rewards.
THE ENTREPRENEURIAL MIND
Work motivation, Pinder (1998) innovative business behavior of the
entrepreneur is certainly a motivational
- to is all about the things that make
characteristic of any successful
people want to work and how they
individual: achievement motivation
behave at work. It's a mix of factors
(Ach).
from inside and outside a person that
push them to do their job. Thematic Apperception Test (TAT)

- A projective technique used by

LESSON 2 – Goal and Goal Setting McClelland (1965).

- are obviously part of any - It involves describing ambiguous scenes

entrepreneurial endeavor and also to learn more about a person's emotions,
serve as behavioral motivators. motivations, and personality.
The Dynamic Nature of Motivation
- Using this test, McClelland found
- The impact of goals in motivational research achievement motivation in men but not in
women.
- Adaptability to changing situations
Work and Family Orientation Inventory (WOFO)
The Significance of Goal Setting
- One such approach to a multi-
• Setting clear and specific goals dimensional measure of Ach. It
• Establishing measurable targets contains three sub-scales that may
• Creating a roadmap for success have particular resonance with the
• Enhancing focus and determination study of entrepreneurship that go
beyond the “lifestyle” concerns of the
LESSON 3 – Achievement Motivation (Ach)
more unidimensional scales of
McClelland (1965)
Mehrabian (1968) and Komives (1972).
- It is one motivational construct that
received considerable attention early in The three sub-scales are;
the process of understanding the
entrepreneur.
• “mastery needs,”
• “work orientation” (Protestant
Carland (1984)
work ethic),
- The small business owner sees their • and “interpersonal
business as an extension of their competitiveness".
personality, while the entrepreneur is
characterized by innovative business These dimensions of Ach are assessed
behavior. through questions such as “I like to work
hard” (work orientation), “I prefer to work
McClelland and Winter (1969)
in situations that require a high level of
- They did find that achievement skill” (mastery needs), and “I feel that
motivation was the differentiating winning is important in both work and
factor between small business games” (interpersonal competitiveness).
entrepreneurs and other 81 business
leaders. One thing that drives that
THE ENTREPRENEURIAL MIND
Lesson 4 – Personality Factors and Motivation Nuttin (1984)
Type A and Type B Personalities - defines motivation as “the dynamic and
Type A directional (i.e., selective, and
preferential) aspect of behavior.
- People with Type A personalities tend to be
extremely driven, focused, high-strung and goal-
oriented. Module 7 – The Role of Emotions and Cognitions in
- Price (1982) suggested that this is a learned set Entrepreneurial Decision - Making
of behaviors and is more likely in competitive
LESSON 1 – English and Cognitions
and open economies where success is a function
of individual effort and progress is seen in
Emotions
tangible forms.
- The term “emotion” can be traced back
Type B
to the Latin words e(x) (out/out of) and
- Individuals with Type B personalities are more
motion (movement/action/excitement),
laid back and easygoing.
thus indicating that some (inner)
Masculinity and Femininity movement or excitement is being
Masculinity transported out of an individual inner
state to the public (Cohen, 2005)
- Positive trait instrumentality – desire to make
things work and understand their operation. Phelps, 2006
- Negative trait hostility – the desire to dominate
through physical action in order to bring harm - Because neuroscience can now specify
to another. the physiological correlates of
Femininity emotional activities and is able to
explicitly connect them with decision-
- Positive trait expressivity – the desire to be
sensitive to others and their feelings and to be making.
sensitive to one’s own feelings have positive
Côté, 2005
implications for marketing.
- Negative trait verbal aggression – negative - emotions are increasingly integrated
aspect of femininity, involves being verbally
into research on decision-making
aggressive towards others. While both genders
can possess this trait, it is more frequently processes and behavior in business
observed in women. contexts.

Lesson 5 – The Impact of Motivation on Behavior Neuro-Economics

Three phases in every behavioral process - investigates research on emotions in

(Nuttin, 1984) decision-making by linking
neuroscience and economics and opens
(i) the construction of a behavioral
the “black box” of decision making
world
(Camerer et al., 2004).
(ii) processing of the person’s needs
into goals and plans Componential theories of emotion
(iii) carrying out the behavioral
- describe emotions’ main components
operations needed to reach the goal
and propose that emotions have the
or fulfill the plan.
following attributes in common (Meyer
et al., 2001):
- Emotions are current psychological
states of an individual and have a
THE ENTREPRENEURIAL MIND
certain quality (positive emotion, e.g., - The 16 emotions in the GEW – the upper
happiness, or negative emotion, e.g., limit of amount of basic emotions is
sadness), intensity (e.g., strong fear or often considered as 14 (Scherer, 2005)
weak fear), and duration (e.g., short- – are divided into four emotions per
term fear or long-term fear). quadrant.
• Emotions focus on certain targets and - Small circles, representing weak
usually an individual can name the intensity.
object why he/she is, for example, - Large circles, representing strong
happy or sad. intensity.
• Emotions are typically (consciously) - If an outcome is (not) congruent with
experienced by the individual the goals of an individual and the cause
(experience aspect). for that outcome was controlled by that
• Emotions reveal psychological individual, the individual will show (anxiety)
changes, e.g., flushing, increased pride about this outcome.
heartbeat frequency (psychological - If an outcome is (not) congruent with the goals
aspect), which are connected with of an individual and the cause for that outcome
was not ontrolled by that individual, the
certain behavior tendencies, e.g.,
individual will show (sadness) surprise about
running away with fear, showing your that outcome.
teeth because of anger (behavioral
Cognitions
aspect)
- The term “cognition” derives from the Latin
Discrete emotion theories (Scherer, 2005)
word conserve (to recognize/to discover).
- suggest a number of basic emotions - s in general are all processes by which sensory
input is transformed, reduced, elaborated,
such as joy, love, anger, fear, sadness,
Stored, Recovered, And Used (Neisser, 1967).
disgust, and surprise.
- proposes anger, fear, joy, and sadness Entrepreneurial Cognitions
as typical basic emotions that are - are the knowledge structures that people use
frequently experienced. to make assessments, judgments, or decisions
involving opportunity evaluation, venture
creation, and growth (Mitchell et al. 2002).

Two aspects of social cognition (Fiske and Taylor, 1984)

- one being the person in the situation.

- one being cognition and motivation.

Social Cognition (Baron et al. 2009)

- as the ways in which individuals interpret,

analyze, remember, and use information about
the social world.

Geneva Emotion Wheel

THE ENTREPRENEURIAL MIND
The Difference Between Emotion, Affect, Mood, and
Feeling

Mood and Affect

- describe a milder experience, do not

necessarily have a clear reason (i.e., stimulus)
and are longer lasting.
- Based on baron, defines “affect”, individuals
current moods and feelings

Feelings

- are the conscious subjective experience of

emotion and mood (Barsade and Gibson, 2007)