Elsevier

Journal of Business Venturing

Volume 15, Issues 5–6, September–November 2000, Pages 411-432
Journal of Business Venturing

Competing models of entrepreneurial intentions

https://doi.org/10.1016/S0883-9026(98)00033-0Get rights and content

Abstract

Why are intentions interesting to those who care about new venture formation? Entrepreneurship is a way of thinking, a way of thinking that emphasizes opportunities over threats. The opportunity identification process is clearly an intentional process, and, therefore, entrepreneurial intentions clearly merit our attention. Equally important, they offer a means to better explain—and predict—entrepreneurship.

We don't start a business as a reflex, do we? We may respond to the conditions around us, such as an intriguing market niche, by starting a new venture. Yet, we think about it first; we process the cues from the environment around us and set about constructing the perceived opportunity into a viable business proposition.

In the psychological literature, intentions have proven the best predictor of planned behavior, particularly when that behavior is rare, hard to observe, or involves unpredictable time lags. New businesses emerge over time and involve considerable planning. Thus, entrepreneurship is exactly the type of planned behavior Bird 1988, Katz and Gartner 1988 for which intention models are ideally suited. If intention models prove useful in understanding business venture formation intentions, they offer a coherent, parsimonious, highly-generalizable, and robust theoretical framework for understanding and prediction.

Empirically, we have learned that situational (for example, employment status or informational cues) or individual (for example, demographic characteristics or personality traits) variables are poor predictors. That is, predicting entrepreneurial activities by modeling only situational or personal factors usually resulted in disappointingly small explanatory power and even smaller predictive validity. Intentions models offer us a significant opportunity to increase our ability to understand and predict entrepreneurial activity.

The current study compares two intention-based models in terms of their ability to predict entrepreneurial intentions: Ajzen's theory of planned behavior (TPB) and Shapero's model of the entrepreneurial event (SEE). Ajzen argues that intentions in general depend on perceptions of personal attractiveness, social norms, and feasibility. Shapero argues that entrepreneurial intentions depend on perceptions of personal desirability, feasibility, and propensity to act. We employed a competing models approach, comparing regression analyses results for the two models. We tested for overall statistical fit and how well the results supported each component of the models. The sample consisted of student subjects facing imminent career decisions. Results offered strong statistical support for both models.

(1) Intentions are the single best predictor of any planned behavior, including entrepreneurship. Understanding the antecedents of intentions increases our understanding of the intended behavior. Attitudes influence behavior by their impact on intentions. Intentions and attitudes depend on the situation and person. Accordingly, intentions models will predict behavior better than either individual (for example, personality) or situational (for example, employment status) variables. Predictive power is critical to better post hoc explanations of entrepreneurial behavior; intentions models provide superior predictive validity. (2) Personal and situational variables typically have an indirect influence on entrepreneurship through influencing key attitudes and general motivation to act. For instance, role models will affect entrepreneurial intentions only if they change attitudes and beliefs such as perceived self-efficacy. Intention-based models describe how exogenous influences (for eample, perceptions of resource availability) change intentions and, ultimately, venture creation. (3) The versatility and robustness of intention models support the broader use of comprehensive, theory-driven, testable process models in entrepreneurship research (MacMillan and Katz 1992). Intentional behavior helps explain and model why many entrepreneurs decide to start a business long before they scan for opportunities.

Understanding intentions helps researchers and theoreticians to understand related phenomena. These include: what triggers opportunity scanning, the sources of ideas for a business venture, and how the venture ultimately becomes a reality. Intention models can describe how entrepreneurial training molds intentions in subsequent venture creation (for example, how does training in business plan writing change attitudes and intentions?). Past research has extensively explored aspects of new venture plans once written. Intentionality argues instead that we study the planning process itself for determinants of venturing behavior. We can apply intentions models to other strategic decisions such as the decision to grow or exit a business. Researchers can model the intentions of critical stakeholders in the venture, such as venture capitalists' intentions toward investing in a given company. Finally, management researchers can explore the overlaps between venture formation intentions and venture opportunity identification.

Entrepreneurs themselves (and those who teach and train them) should benefit from a better understanding of their own motives. The lens provided by intentions affords them the opportunity to understand why they made certain choices in their vision of the new venture.

Intentions-based models provide practical insight to any planned behavior. This allows us to better encourage the identification of personally-viable, personally-credible opportunities. Teachers, consultants, advisors, and entrepreneurs should benefit from a better general understanding of how intentions are formed, as well as a specific understanding of how founders' beliefs, perceptions, and motives coalesce into the intent to start a business. This understanding offers sizable diagnostic power, thus entrepreneurship educators can use this model to better understand the motivations and intentions of students and trainees and to help students and trainees understand their own motivations and intentions.

Carefully targeted training becomes possible. For example, ethnic and gender differences in career choice are largely explained by self-efficacy differences. Applied work in psychology and sociology tells us that we already know how to remediate self-efficacy differences. Raising entrepreneurial efficacies will raise perceptions of venture feasibility, thus increasing the perception of opportunity.

Economic and community development hinges not on chasing smokestacks, but on growing new businesses. To encourage economic development in the form of new enterprises we must first increase perceptions of feasibility and desirability. Policy initiatives will increase business formations if those initiatives positively influence attitudes and thus influence intentions. The growing trends of downsizing and outsourcing make this more than a sterile academic exercise. Even if we successfully increase the quantity and quality of potential entrepreneurs, we must also promote such perceptions among critical stakeholders including suppliers, financiers, neighbors, government officials, and the larger community.

The findings of this study argue that promoting entrepreneurial intentions by promoting public perceptions of feasibility and desirability is not just desirable; promoting entrepreneurial intentions is also thoroughly feasible.

Introduction

The failure of situational and personality measures to significantly predict entrepreneurial activity suggests another approach. In this study, we compare the predictive ability of two intentions models. One was developed and well validated in social psychology (Azjen's 1991 Theory of Planned Behavior). The other was proposed, but not well tested from the domain of entrepreneurship research (Shapero's 1982 model of the `Entrepreneurial Event'). The comparison will examine the efficacy of these models as they try to predict the intentions that a sample of soon-to-graduate undergraduate business students hold towards starting a new business.

Before we consider the past uses of intention models and describe their application in the current work, we begin with an examination of the issue of the degree to which entrepreneurship is planned, and therefore, intentional behavior.

Although it is possible that some will argue otherwise, it seems evident that much of what we consider `entrepreneurial' activity is intentionally planned behavior. Witness the tremendous emphasis on the business plan in virtually every academic and practical treatment on starting a new business. Even in cases where a unique catalyzing event like being downsized may spur the individual to the entrepreneurial act, there are often indications of a long time interest and desire to be in business for one's self.

As new organizations emerge over time, pre-organizational phenomena such as deciding to initiate an entrepreneurial career are both important and interesting Bird 1988, Katz and Gartner 1988. We thus might conclude that intentionality is typical of emerging organizations, although the timing of the launch of the new venture might be relatively unplanned, such as when a sudden new opportunity surfaces.

We best predict, rather than explain, any planned behavior by observing intentions toward that behavior—not by attitudes, beliefs, personality, or mere demographics. Intentions are the single best predictor of planned behavior (Bagozzi et al. 1989). Understanding intentions thus proves particularly valuable where the focal phenomenon is rare, obscure, or involves unpredictable time lags—a focal phenomenon such as entrepreneurship (MacMillan and Katz 1992).

In its simplest form, intentions predict behavior, while in turn, certain specific attitudes predict intention. Intentions thus serve as a conduit to better understanding the act itself Ajzen 1987, Ajzen 1991. As such, intentions serve as important mediating variables between the act of starting a business venture and potential exogenous influences. Intentions toward behavior are absolutely critical to understanding other antecedents. These include situational role beliefs, subsequent moderators, including the perceived availability of critical resources, and the final consequences, including the initiation of a new venture (or lack thereof).

Understand the consequences of intentions—particularly actions—requires that we understand the antecedents of intention. Much of entrepreneurship is intentional, and, therefore, the use of well thought-out and research-tested intention models should provide a good means of examining the precursors to business start-up.

Recognizing that starting a business is an intentional act holds substantial implications for research. If stimulus-response models cannot model intentional behaviors fully, then we need testable, theory-driven process models of entrepreneurial cognitions that focus on intentions and their perceptual bases Bird 1988, Katz and Gartner 1988, Shaver and Scott 1992. When behavior is rare or difficult to observe (Ajzen 1991), intentions offer critical insights into underlying processes such as opportunity recognition. Empirically, behavior is often only weakly predicted by attitudes alone or by exogenous factors that are either situational (for example, employment status or informational cues) or individual (for example, demographic characteristics or personality traits). That is, as a result, predicting entrepreneurial activities by modeling only exogenous factors often results in disappointingly small explanatory power. Remember, exogenous influences usually affect intentions and behavior only indirectly, through attitude changes (Ajzen 1991). Thus, intentions models offer an opportunity to increase our ability to explain—and predict—entrepreneurial activity.

Forces acting upon a potential behavior do so indirectly by influencing intentions via certain key attitudes. Exogenous variables influence attitudes and may also moderate the relationship between intentions and behavior. For example, exogenous factors may serve to inhibit one from realizing the intent to be an entrepreneur. Intentions and their underlying attitudes are perception-based, which should mean they are learned. Accordingly, they will vary across individuals and across situations. Exogenous person or situation variables have a more indirect influence and thus are only weakly predictive of entrepreneurial activity.

The predictive power of intentions is even stronger for more molar behavior chains, capturing long-run tendencies by canceling variations in situations over time. For instance, the intent to attend church predicts annual attendance much better than intent predicts attendance in any one week that may be affected by extreme situational factors like fires, floods, or even a stalled car (Epstein 1979). Intentions are also an unbiased predictor of action (Bagozzi et al. 1989), even where time lags exist. Thus, a strong intention to start a business should result in an eventual attempt, even if immediate circumstances such as marriage, child bearing, finishing school, a lucrative or rewarding job, or earthquakes may dictate a long delay. Accordingly, the relatively molar domain of entrepreneurship should be quite amenable to the successful use of intentions-based models. Intentions may explain why it appears easier to identify chronic entrepreneurs, those who create several new ventures in a lifetime.

In general, much of human behavior is planned; it is difficult to envision starting a business where the nascent firm is launched simply as a conditioned response to a stimulus. Specifically, it is equally difficult not to view starting a business as a career choice. A reasonable body of past research supports the contention that career decisions are clearly planned in nature, not responses to stimuli, thus reflecting some degree of cognitive processing. If entrepreneurship does reflect planned, and therefore, intentional behavior, we should see evidence from other research. Thus, we also examine role model studies as well as studies of nascent or beginning entrepreneurs.

Career choices and related phenomena have been demonstrated, both theoretically and empirically, to be cognitive in nature. That is, career-related decisions reflect a process in which beliefs, attitudes, and intentions evolve as we cognitively process our knowledge, beliefs, and experiences (Lent et al. 1994). Prior research suggests that entrepreneurial careers fit this pattern Davidsson 1991, Katz 1992.

Evidence from entrepreneurial role models supports the potential of intentions models for predicting new venture creation. Intentions explain conflicts in research findings such as the effects of role models and mentors on eliciting subsequent entrepreneurial behaviors. Entrepreneurial role models only weakly predict future entrepreneurial activity Carsrud et al. 1987, Scott and Twomey 1988. Instead, the subjective impact of role models is a stronger predictor. That is, role models affect entrepreneurial intentions only if they affect attitudes such as self-efficacy Krueger 1993, Scherer et al. 1989.

Reynolds and associates are amid a large-scale, long-term project to identify and track “nascent” (newly initiated, but not fully launched) ventures and their founders. Although it is difficult to identify those who have taken some initial steps but have yet to surface in official records, it is believed that “nascent” entrepreneurs are surprisingly numerous. Thus, there is much merit in finding out how to help nascent ventures to avoid being “stillborn” (Reynolds 1994).

These arguments strongly support testing intentionality-driven models of entrepreneurship, but few studies do so explicitly. However, not all agree that intentions are ideal. For example, Bagozzi's work showed that intentions fully mediate the impact of attitudes on behavior, yet he himself argues that understanding volition requires more complexity (1993). There is also a well-developed model of predicting entrepreneurship that employs attitudes (Robinson et al. 1991b). This suggests that researchers exercise some caution in applying intentions models.

Section snippets

Theory-Driven Models of Intentions

Social psychology offers robust and parsimonious models of behavioral intentions with considerable proven predictive value for many behaviors. Such models offer sound theoretical frameworks that specifically map out the nature of processes underlying intentional behavior. Meta-analyses (Kim and Hunter 1993) empirically show that intentions successfully predict behavior, and attitudes successfully predict intentions. Across a wide range of studies relating to a wide variety of types of behaviors

Ajzen's theory of planned behavior (tpb)

Social psychologists and marketing researchers have found great success using intention-based models in practical applications and basic research. Such consistently robust and replicable paradigms have been widely applied in practical situations as career preferences, weight loss, and seatbelt and coupon use Ajzen 1987, Kim and Hunter 1993. There have been a number of developmental intention models and constant advances in modeling intention antecedents have resulted in the current state of the

Shapero's model of the `entrepreneurial event' (see)

Now that the first contender for the title of best predictor of the intention to start a business is fully explicated, we turn to the domain of entrepreneurial research to see if there is anything already extant that would serve as an appropriate comparison. Upon modest reflection, it is clear that Shapero's (1982) model of the `Entrepreneurial Event' (SEE) is implicitly an intention model, specific to the domain of entrepreneurship. In the SEE, intentions to start a business derive from

Comparing and contrasting the models

Both TPB and SEE are largely homologous to one another. Both contain an element conceptually associated with perceived self-efficacy (perceived behavioral control in TPB; perceived feasibility in SEE). TPB's other two attitude measures correspond to SEE's perceived desirability. Yet, one can have great potential for entrepreneurial activity without corresponding intentions. Thus, it would appear that appropriate attitudes may not be enough. Many business founders had little intention of

Conceptual and empirical issues in model testing

Before the test of the two models can be conducted, it is necessary to clear up a few issues. Intentions refer to the target behavior of starting a business. By definition, this behavior is planned. Entrepreneurial intentions also reflect the founders' vision of the emerging organization and subsequent corporate culture. If organizational emergence is a process consisting of a series of purposeful, perception-driven decisions as Shapero (1982), Bird (1988), and Katz and Gartner (1988) suggest,

Research design

Assessing the relative ability of TPB and SEE in explaining entrepreneurial intentions requires comparing and contrasting them. Both models may reasonably fit the empirical data, yet neither model may be fully supported. On the other hand, both models may prove equally weak. We thus use Chamberlin's approach (1890/1965) of multiple working hypotheses that we test against one another, rather than against an arbitrary standard. As we test these models via regression analysis, the appropriate

Sample and Statistical Power

The sample comprised 97 senior university business students (40 female) currently facing important career decisions. This lets us examine entrepreneurial processes prior to actual entrepreneurial activity. Note that these models hold for subjects of all ages. Even among adolescents, career intent significantly predicts eventual career choice (Trice 1991). The sample provides subjects with broad ranges of experiences, intentions, attitudes toward entrepreneurship, and dispositions. This reduces

Theory of Planned Behavior

Figure 3a shows significant, though not complete, support for the theory of planned behavior. Adjusted R2 for the regression of global perceived feasibility, attitude, and social norms upon intentions was 0.350 (p < 0.0001). However, the social norms component was non-significant, though the raw correlation between social norms and intentions was significant (R2 = 0.31, p < 0.002). [Social norms correlated with attitude toward the act (R2 = 0.29, p < 0.004) and perceived feasibility (R2 = 0.31,

Comparing and Contrasting the Models

Figure 2 suggests the Shapero model offers a marginally higher adjusted R2. More important, every component of the Shapero model was supported statistically at p < 0.05, while the variance explained uniquely by the social norms component of the Ajzen model was non-significant. Are there systematic problems in measuring social norms relevant to entrepreneurial populations? Or, do social norms simply not predict entrepreneurial intentions in this sample? It is possible that social norms may only

Implications

Past research shows the importance of intentions and the robustness of the known antecedents of intentions, especially where focal phenomena are relatively rare as with entrepreneurship. These findings offer little, if any, contrary evidence. What can we thus conclude from explicit consideration of entrepreneurial intentionality?

Future research needs: extending model specification and measures

We must address the seeming non-impact of social norms on entrepreneurial intentions in this sample. Given that research elsewhere into entrepreneurial intentions (Davidsson's 1991 work with Swedish samples; Reitan 1997, Shepherd and Douglas 1997) finds a significant impact, we must consider specifying different measures (including multiple-item measures). Research on entrepreneurial networks suggests that the social norms of network members may have more significant impacts on intentions than

Acknowledgements

The authors wish to thank all those who helped us refine these ideas. We cannot name you all, but we are especially grateful to Jerry Katz, Gayle Baugh, and Kelly Shaver, also the editor and anonymous reviewers whose ideas proved invaluable. Remaining errors, of course, remain our responsiblity. We also wish to pay tribute to the late Michael Scott, a great loss to the field and to us.

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