a b s t r a c t In this research were investigated the three most frequently studied characteristics of entrepreneursmotivation, self-efficacy, and risk attitudes. We divided the sample of entrepreneurs into two subgroups: opportunity-driven vs. necessity-driven. In agreement with findings of research performed in countries with developed market economies, we found that the need for independence and the need for achievement were of higher importance to the entrepreneurs than to the non-entrepreneurs. However, this was only true of the opportunity-driven subgroup of entrepreneurs, while not of those categorized as necessity-driven. In contrast, the most important motive in the group of non-entrepreneurs and as well as the necessity-driven subgroup of entrepreneurs was job security. In accordance with Knight&apos;s claim, we found that opportunity-driven (but not necessity-driven) entrepreneurs revealed higher levels of selfconfidence than the group of employees. We did not find support for the claim that entrepreneurs are more risk-prone than wage earners. On the other hand, entrepreneurs (both opportunity-and necessitydriven) reported more everyday risky investment activities than wage earners did. We interpret this observation in terms of the necessity of entrepreneurs for risk-taking, rather than personal preference and liking

Anna Macko

Artur Domurat

Jerzy Cieślik

Tadeusz Tyszka

CiteSeerX

The Journal of Socio-Economics 40 (2011) 124–131
Contents lists available at ScienceDirect
The Journal of Socio-Economics
journa l homepage: www.e lsev ier .com/ locate /soceco
Motivation, self-efficacy, and risk attitudes among entrepreneurs during
transition to a market economy
Tadeusz Tyszkaa,∗, Jerzy Cieślikb, Artur Domuratc, Anna Mackoa
a Faculty of Economic Psychology, Kozminski University, ul. Jagiellonska 59, 03-301 Warsaw, Poland
b Faculty of Management, Kozminski University, ul. Jagiellonska 59, 03-301 Warsaw, Poland
c Faculty of Psychology, University of Warsaw, ul. Stawki 5/7, 00-183 Warsaw, Poland
a r t i c l e i n f o
Article history:
Received 12 March 2010
Received in revised form 4 January 2011
Accepted 30 January 2011
JEL classification:
L26
Keywords:
Entrepreneurship
Entrepreneurial
Motivation
Self-efficacy
Risk attitudes
a b s t r a c t
In this research were investigated the three most frequently studied characteristics of entrepreneurs –
motivation, self-efficacy, and risk attitudes. We divided the sample of entrepreneurs into two subgroups:
opportunity-driven vs. necessity-driven. In agreement with findings of research performed in countries
with developed market economies, we found that the need for independence and the need for achieve-
ment were of higher importance to the entrepreneurs than to the non-entrepreneurs. However, this
was only true of the opportunity-driven subgroup of entrepreneurs, while not of those categorized as
necessity-driven. In contrast, the most important motive in the group of non-entrepreneurs and as well
as the necessity-driven subgroup of entrepreneurs was job security. In accordance with Knight’s claim,
we found that opportunity-driven (but not necessity-driven) entrepreneurs revealed higher levels of self-
confidence than the group of employees. We did not find support for the claim that entrepreneurs are
more risk-prone than wage earners. On the other hand, entrepreneurs (both opportunity- and necessity-
driven) reported more everyday risky investment activities than wage earners did. We interpret this
observation in terms of the necessity of entrepreneurs for risk-taking, rather than personal preference
and liking.
© 2011 Elsevier Inc. All rights reserved.
1. Introduction
There is a long history of research on the personal characteristics
(traits and motivation) of entrepreneurs (see, e.g., Brandstaetter,
1997). The general finding is that although some traits and
motives are related to both an individual’s decision to become an
entrepreneur (e.g., Wärneryd, 1988), as well as to venture per-
formance (Baum et al., 2001), these relationships are generally
weak. The most probable reason for this seems to be that the
entrepreneurs do not function in isolation from environmental fac-
tors.
The overall objective of the present study was to examine moti-
vation, self-efficacy, and risk attitude – the three most frequently
studied characteristics of entrepreneurs – in a specific environ-
ment. That environment being Poland in transition. When studying
entrepreneurs and entrepreneurship in Poland and other Central-
East European countries, one cannot avoid placing the whole
analysis in the context of a systemic change – of a radical socio-
economic and political transition from a Communist to a market
∗ Corresponding author. Tel.: +48 22 519 21 89.
E-mail address: ttyszka@wspiz.edu.pl (T. Tyszka).
economy. One reason for this is the relatively short time elapsed
since the dismantling of the Communist bloc in Central and Eastern
Europe. Such a period of approximately 20 years in most country
has been proven too brief to allow a full-degree of market maturity,
particularly in the shaping of the relevant environment of certain
institutions. As Osborn and Slomczynski (2005) state, the historical
developments that took place during the Communist era and dur-
ing the transition (particularly in its initial years), have profoundly
affected attitudes and perceptions as well as the pool of available
entrepreneurial skills.
How did these historic roots affect the performance and oper-
ating patterns of Polish entrepreneurs once the systemic transition
got underway in 1989? Most striking was the obsolete character
of specific operating skills embedded in the context of a com-
mand economy. Even despite substantial experience in the field,
the apparent lack of a proactive, customer-focused attitude among
the “old entrepreneurs” made them unable to cope with the new
reality and, all the more so, to compete with new entrepreneurial
start-ups. According to estimates, less than 10% of the 1.7 million
businesses currently active in Poland can trace their roots to the
pre-1989 period. Those which were able to survive had to entirely
re-engineer their businesses, as illustrated by the following state-
ment of an old-style entrepreneur:
1053-5357/$ – see front matter © 2011 Elsevier Inc. All rights reserved.
doi:10.1016/j.socec.2011.01.011
T. Tyszka et al. / The Journal of Socio-Economics 40 (2011) 124–131 125
In 1989 Poland changed to such an extent, that in order to con-
tinue my prosperous business I had to start de novo. The same
business, in a different environment, became a new kind of
activity (Osborn and Slomczynski, 2005, p. 88).
1.1. Entrepreneurial motivation and self-efficacy
It is commonly assumed – not without empirical support – that
individuals choose career roles matching their needs and values.
There is a long history of theoretical and empirical efforts to identify
the reasons driving individuals to become entrepreneurs. The main
results have been rather consistent. Scheinberg and MacMillan
(1988), who surveyed over 1400 business owners in 11 coun-
tries, identified 6 broad categories of reasons that entrepreneurs
offered for creating a business: the need for approval, the per-
ceived instrumentality of wealth, degree of communitarianism,
the need for personal development, the need for independence,
and the need for escape. Continuing this exploration, Birley and
Westhead (1994), surveyed 405 British business owners. They
identified seven factors that drove individuals to start up a busi-
ness: the need for approval, the need for independence, the need
for personal development, welfare considerations, the perceived
instrumentality of welfare, tax reduction, and the example of role
models. Interestingly enough, research by Smallbone and Welter
(2001) showed that in transition economies (e.g., Moldova, Belarus,
Ukraine) motives given for starting one’s own businesses were not
considerably different from those reported in market economies.
The need for independence, personal development (personal ful-
fillment) and personal wealth (to boost income) were also among
the most frequently declared motives in countries of transition
economy.
In summary, research into the motives directing individuals into
an entrepreneurial life path (Gatewood et al., 1995; Carter et al.,
2003) most frequently cites four motives: personal wealth (oppor-
tunities to earn more), the need for independence, the need for
personal development, and the need for approval. Additionally,
there are observations that entrepreneurs tend to put their families
in second place behind the interests of the enterprise (Wärneryd,
1988). Thus, compared to employees, entrepreneurs tend to accept
longer work hours (Eden, 1973; Hammermesh, 1990; Chay, 1993).
On the other hand, work security seems to be a factor of special
interest to wage earners (Kolvereid, 1996).
Motivation is a significant factor in directing an individual into
an entrepreneurial life path. Yet, in order to choose such a path,
one must believe that it will allow the attainment of one’s goals.
As van Praag (1999) points out, several economists (e.g., Schum-
peter, Knight, etc.) dealing with entrepreneurship have recognized
the role of uncertainty and self-confidence in entrepreneurship. For
example, Knight (1921) emphasized that people differ with respect
to self-confidence. He asserted that entrepreneurs must bear uncer-
tainty, which permits no objective calculation of the probability of
success. Thus he felt that self-confidence differentiates individuals,
and in particular it distinguishes entrepreneurs from others.
Knight’s concept of self-confidence is closely related to self-
efficacy, defined by Bandura (1994) as task-specific self-confidence.
Self-efficacy, according to Bandura, is based on past experience and
attainment. Achieving success helps build a sense of self-efficacy,
whereas failure, especially if it occurs before a sense of self-efficacy
has been established, undermines it. Thus, according to Bandura,
self-efficacy depends on personal experience. Another significant
source of one’s self-efficacy is vicarious experience – seeing others
similar to oneself succeeding in something.
In the light of Knight’s thesis, Chen et al. (1998) asked
entrepreneurs and managers to rate their confidence in dealing
with various types of tasks involved in running a business. It turned
out, that for some of these tasks entrepreneurs indeed had a higher
sense of self-efficacy than did non-entrepreneurs. Similarly, Macko
and Tyszka (2009) found that entrepreneurs showed a higher level
of self-efficacy than non-entrepreneurs.
In summary, the following picture of an entrepreneur emerges.
The choice of an entrepreneurial career is based above all on
motives related to independence, self-realization/achievement,
financial success, and perhaps social approval. These motives
should differentiate entrepreneurs from wage earners, for whom
motives related to job security and working time should be more
important. Moreover, entrepreneurs should reveal a higher level of
self-efficacy than wage earners.
1.2. How can radical systemic change in the economy affect the
motivation and beliefs of people with regard to engaging in
entrepreneurial activities?
To answer this question we followed the theoretical framework
of Shapero and Sokol (1982), according to which the individual’s
behavioral intention to start a business depends on two main fac-
tors: perceived feasibility and perceived desirability of starting a
business. Shapero and Sokol (1982) defined “perceived desirability”
as the personal attractiveness of starting a business, and “perceived
feasibility” as the perceived capability to create a new venture. With
regard to “perceived desirability,” Shapero and Sokol (1982) recog-
nize two main factors playing a role in prompting an individual
to consider entrepreneurship as a life-path option: “negative dis-
placement” and a “between-things” factor. We believe that both of
these factors were present during the period of systemic transfor-
mation in Poland. Together they resulted in a large number of new
businesses being undertaken by individuals.
“Negative displacements” concern externally imposed circum-
stances, which deflect individuals from their previous paths, who
thus have little or no choice but to start new businesses. This may be
the case with refugees or with employees who have been fired, but
also with managers who are bored with climbing up the corporate
career ladder. Shapero and Sokol (1982) quote numerous instances
of such cases. The radical systemic changes in Poland from 1989
onward affected hundreds of thousands of people, who lost their
jobs in state-owned enterprises, farms and institutions – jobs that
had brought less-than-satisfactory income, but were considered
secure. Many such individuals had no other choice but to start a
new business. We labelled them necessity-driven entrepreneurs. For
this group, job security became a motive of prime importance. For
people who lost jobs, opening a business of one’s own was often the
only chance to earn a living. They had no alternative if they wished
to attain an acceptable standard of living. It was crucial for them to
satisfy the needs that lie at the base of Maslow’s hierarchy.
Empirical studies, particularly those concentrating on the ini-
tial period of 1989–1993, have emphasized the importance of the
transition context for the decision to start one’s own business.
Indeed, this was the typical view of Polish entrepreneurs inter-
viewed by Osborn and Slomczynski (2005). They stressed the role
of “Wind of history”, meaning the magnitude and the irreversibility
of the social change taking place. Shapero and Sokol (1982) speak
also of a “between-things” factor, which manifests itself in a sit-
uation when a certain period of life comes to a natural end (e.g.,
end of school, end of military service), thus necessitating a deci-
sion as to the next phase. We think that in Poland, apart from
necessity-driven entrepreneurs, there were certainly others who
decided to start their own businesses based upon other motives,
such as the need for independence and/or self-reliance. In par-
ticular, middle-aged managers who had experienced working in
the highly bureaucratic state-owned firms, where they had been
unable to express their views nor put into action their initiatives,
were motivated to start their own businesses. Finding themselves
“between systems,” they could feel compelled to change their lives



Motivation, self-efficacy, and risk attitudes among entrepreneurs during transition to a market economy

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