The impact of occupational preferences on the intent to pursue an entrepreneurial career.

Brice, Jeff, Jr. ; Nelson, Millicent

INTRODUCTION

A controversial issue in the research of entrepreneurs is what cognitive factor(s) significantly impact the decision to pursue the vocation of entrepreneurship over safer, more traditional, employment alternatives. The early study of entrepreneurs began with some reasonable assumptions about the psychological characteristics of entrepreneurs. However, due to the inconclusive results of these efforts, researchers searched for more definitive cognitive-oriented constructs to explain the entrepreneur phenomenon (Shaver & Scott, 1991). Although various psychological explanations have been discarded over time, there exists support for the investigation of the cognitive processes that contribute to the instigation of new ventures. In entrepreneurship, this approach attempts to understand how the perceptions (Cooper, Woo, &Dunkleberg, 1988), cognitive and decision-making styles (Kaish & Gilad, 1991), heuristics (Manimala, 1992), biases (Busenitz and Barney, 1997), and intentions (Bird, 1988) of prospective entrepreneurs affect their behavior.

In the current study, one such cognitive process--the preference for an entrepreneurial career (as explained by the valence model component of the expectancy theory of motivation)--is posited to be fundamental to the favorable intention to engage in entrepreneurial activities. This is important because intent is a dependable predictor of human behavior in an assortment of circumstances, including entrepreneurship, and has been deemed by many to represent the most successful forecaster of human action (Ajzen, 1991; Ajzen & Fishbein, 1980; Krueger, 1993; Krueger, 2000). Moreover, past research (Kim & Hunter, 1993) found that intentions explained sixty-seven percent of the variance in behavior and path analysis confirmed that the association between attitudes and behavior is fully explained by the attitude--intention and intention--behavior links (Krueger, 2000). Therefore, this study is an attempt to demonstrate a possible link between career expectancies and entrepreneurial behavior (as expressed through robust entrepreneurial intentions). The next section will review the literature on the expectancy theory of motivation and will detail its relevance for the study of entrepreneurs

LITERATURE REVIEW

The mere presence of appropriate personality traits that render an individual intrinsically suited for venturing does not guarantee entrepreneurial behavior (Shaver & Scott, 1991). Kirzner (1973) stressed that entrepreneurs are not only those that discover market opportunities, but also that they must act upon these prospects whenever possible. Accordingly, the purpose of cognitive process studies in entrepreneurship is to explain the mechanism of consideration that results in such action.

Based on Kirzner's rationale, it may be reasoned that a defining factor for prospective entrepreneurs is likely the willingness to pursue favorable opportunities once they are exposed. In this context, only those individuals who are motivated enough to pursue entrepreneurial careers, in deference to other possible choices (e.g., traditional employment), can be considered entrepreneurs. The problem, however, is that there exists no consistent explanation of the mechanism of motivation for the exploitation of these tenuous opportunities (Ripsas, 1998). Therefore, this study advances the idea that a likely explanation for entrepreneurial stimuli can be significantly linked to occupational preference for an entrepreneurial career as specified by the valence model component of the expectancy theory (Vroom, 1964).

Expectancy Theory and Occupational Preference

According to the expectancy theory of motivation, individuals are rational, they understand the possible consequences of their actions, and make selections among options based on a merger of the value of the outcomes and the probability that the outcomes will be achieved (Gatewood, 1993). It is proposed, in this study, that the cognitive process of forming occupational preferences, delineated by the valence model of Vroom's (1966) expectancy theory of motivation, closely identifies that which is practiced by entrepreneurs. Entrepreneurs make rational assessments, based on the satisfaction of their needs and potential outcomes (rewards) of their efforts, which result in a decision whether, or not, to initiate entrepreneurial behavior or to seek safer, more traditional, employment means.

Expectancy theory is divided into a multiplicative model containing four different constructs: 1.) Effort-performance expectancy, 2.) Performance-outcome expectancy, 3.) Valence, and 4.) Instrumentality (Campbell & Pritchard, 1976; Lawler, 1973; Nadler & Lawler, 1979). Effort-performance expectancy (EI) refers to the individual's perception of the amount of effort required for successful task completion. Performance-outcome expectancy (EII) refers to the belief that successful task completion will lead to desired outcomes. Instrumentality (I) is the belief that the attainment of outcomes will lead to other desired outcomes. Valence (V) refers to the value of the outcome(s) to the individual.

Expectancy theory and parts of the expectancy model have been used to explain generalized behavior in organizations as well as occupational preference (Campbell et al, 1970; Lawler & Suttle, 1973; Mitchell, 1974). As one of the two major initial expectancy model divisions presented by Vroom (1964), the valence model was described as being useful for the prediction of an individual's attraction (valence) for specified outcomes, which were identified as occupational preference and job satisfaction (Mitchell, 1974). As such, it is the part of the full expectancy model that revolves around a person's attractiveness for possible occupational outcomes and the perceived likelihood that one can attain these outcomes in the applicable occupation. As it relates to this study, preference for an entrepreneurial career is defined as the attractiveness of the possible rewards of entrepreneurship and the magnitude of one's belief that these rewards can be obtained (Vroom, 1964; Mitchell, 1974). Therefore, the valence model (Summation(VI)) is a multiplicative function of the valence of possible entrepreneurial outcomes (rewards) and the instrumentality that the occupational choice (entrepreneurship) will lead to these valuable outcomes.

The Valence Model of the Expectancy Theory

The first academician to apply expectancy theory to organizational behavior was Vroom (1964). He initially offered two models, the first for prediction of valences of outcomes (the valence model), and the second for prediction of force toward behavior (work-force model). Valence is defined as the value of the outcome(s) to the individual (Campbell & Pritchard, 1976) and is the focus of Vroom's (1964) valence model. The valence model suggested that the value of an outcome to an individual is a function of the algebraic sum of the products of the valences (of all other outcomes) and the person's thoughts regarding the specific outcome's instrumentality for attaining those other outcomes (Mitchell, 1974). Correspondingly, instrumentality was defined by Vroom (1964) as the degree to which an individual perceives a specific outcome as leading to the attainment of other outcomes. Instrumentality varies from negative one to positive one. A negative instrumentality indicates that the individual believes that the outcome in question never leads to other outcomes while a positive instrumentality denotes the opposite. The formula of the valence model is displayed symbolically as follows (Mitchell, 1974):

[MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII]

where

Vj = the valence of outcome j;

Ijk = the perceived instrumentality of outcome j for the attainment of outcome k;

Vk = valence of outcome k;

n = number of outcomes.

While it is assumed that the valence model is predictive of any outcome, it has most frequently been related to investigations of job satisfaction and occupational preferences (Mitchell, 1974).

Valence Studies

The results of valence studies (occupational preference or job satisfaction) that use the expectancy theory have been extensively reviewed in the literature. Mitchell (1974) found that almost every test of the valence model produced strong significant findings. This view hasn't changed much. The valence model was described by Vroom (1964) as being useful for the prediction of an individual's attraction (valence) for specified outcomes, which were identified as occupational preference and job satisfaction (Mitchell, 1974). As such, the first study using the valence model (Vroom, 1966) involved the prediction of occupational preferences of individuals that had to choose from fifteen different vocational alternatives. Each occupation was rated separately on a scale of one to eleven and Vroom (1966) showed clearly, based on calculated valence indexes, that those occupations that held the most attraction also were rated highest. This finding was significant because it showed that the valence model could accurately predict occupational preferences. A similar study by Wanous (1972) had test subjects rank-order occupations and then employed the use of a binomial test to measure the relation of the ranks to their valence scores. Reported findings were that the valence indexes were significantly related to the occupational rankings, which confirmed the usefulness of the valence model to predict occupational preferences. Thus, initial positive validity for the valence model was encouraging.

Bartol (1976) compared the occupational preference predictive power of Vroom's (1964) expectancy (valence) model to that of an alternative configuration. They were both utilized to test whether either could predict the occupational preferences of a sample of female business and psychology students. Subjects were surveyed through the use of written questionnaires that contained scales relating to occupational attitudes, future career plans, instrumentalities, and motivation. The data generally supported the validity of the expectancy theory and that of the competing model, since both were significantly able to predict occupational preferences. However, the correlation between Vroom's (1964) expectancy model and occupational preferences was stronger than the correlation obtained by the competing model.

In a study by Teas (1981), an investigation was carried that tested assumptions regarding the association between an individual's job valence and his or her perceptions of job preference and anticipated job satisfaction. A within-subject analysis was used to investigate the predictive validity of five alternative forms of a valence model. While strong support was found for the traditional Vroom (1964) valence model and several alternatives, no evidence was found to indicate that any of the alternative models were superior in the prediction of occupational preferences.

Wanous, Keon and Latack (1983) performed a meta-analysis on sixteen within-subjects studies (published between 1966 and 1981) to gauge if prior expectancy theory research accurately predicted how individuals chose occupations or organizations. Their investigation revealed that the average within-person correlation for valence indexes and measures of occupational and organizational attractiveness (preference) was strong (0.72). Also, the review dealt with actual, rather than hypothetical, occupational and organizational choices. To this end, the hit rate of actual occupational/organizational choice when compared to expressed preferences was reported at 63.4 percent. After the meta-analysis, the authors presented a method of weighting valence and instrumentality as a way to combine the variables in the valence model while avoiding the questionable procedure of multiplying non-ratio scale variables. Each subject in the study assessed the valence of fifteen outcomes by sorting them into three categories of five items each (low, medium, high). Instead of multiplying each valence measure with a corresponding instrumentality perception score, as is usually done, the item identifying number (e.g., 1 to 15) for each subject's high-medium-low valence category was recorded and corresponded with each subject's instrumentality response per item. This manipulation formed three scales of five instrumentalities each: (1) the five instrumentality perceptions those outcomes rated most important, (2) those five of medium importance, and (3) those five of least importance. While there was no multiplication of non-ratio numbers, a selection of instrumentality responses was accomplished by using the valence ratings. The proposed "implicit weighting" weighting method was used in a study of business graduates choosing an M.B.A. degree program, to measure if the modified expectancy model could accurately predict their preferences. The new weighting method was found to improve empirical support for the model without using the non-ratio scale variables and, thus, strengthened the validity of the multiplicative propositions of the expectancy theory.

Rynes and Lawler (1983) examined the effect of expectancies on the decision to pursue job alternatives. The researchers used two different methodological approaches, policy capturing and narrative self-reports, to examine how people merge information about work characteristics and the probability of getting job offers (expectancies) in their decision to pursue employment opportunities. Test subjects assessed twenty-four hypothetical job alternatives at several expectancy levels in terms of general attractiveness and whether, or not, they would apply for a job. An assortment of within-subject tests (logistic regression, ANOVA, cross-tabulation, graphical analysis, and the examination of narrative self-reports) were employed to deduce how the possibility of receiving a job offer affected the propensity to submit an application for a job. Study results showed that there was no standard mechanism in the way expectancies biased job seeking behavior because the small likelihood of receiving a job offer acted as a greater search impediment for some individuals than for others. Furthermore, whether or not low expectancies depressed search efforts seemed to depend on other factors, such as the cost of job search activity and the valence for the particular employment opportunity. Therefore, it was concluded that there might be many situation specific sources of individual disparity in expectancy usage that are not gauged by the expectancy model.

A more recent meta-analysis (Van Eerde & Thierry, 1996), which compared 77 independent expectancy studies examining a wide variety of occupations and job tasks, concluded that the criterion variables that relate more strongly to the traditional expectancy model and components appear to be attitudinal (intentions and preferences) rather than behavioral. In fact, it was observed that various components of the expectancy model predicted preference and behavior as well as the full model. For example, occupational preference, choice, and intent, are independently and significantly predicted by the valence model (Summation(VI)) and instrumentality (I), respectively. Therefore, it is possible to use relevant components of the model to predict specific attitudes and behavior (Van Eerde & Thierry, 1996) as opposed to the full model.

In summary, while the numbers of studies that employ variations of the expectancy theory valence model have dwindled in recent times, it is still considered a useful framework for predicting occupational preferences and job satisfaction.

Possible Relevance of the Expectancy Theory to Entrepreneurship

While it has been demonstrated that the expectancy theory is a useful tool to measure behavioral motivation and occupational preferences, it has rarely been used, empirically, to gauge the level of occupational preference (valence) of prospective entrepreneurs (Brice, 2006). This is curious considering the potential utility of the valence model for entrepreneurs. Olsen and Bosserman (1984) introduced the concept of expectancy theory to the field of entrepreneurship by stating that other approaches (hierarchy of needs and need for achievement theories) were too specific to be able to explain the motivating mechanisms for every entrepreneur. In their application of the expectancy theory, individuals were assumed to differ regarding needs and goals and people were expected to determine the course of their behavior based on satisfying those needs and desires. Since expected outcomes (rewards) are considered when weighing choices about alternative career plans, individuals will be inclined to expend effort on those behaviors that are expected to result in the attainment of need-satisfying outcomes. What can be assumed, in a general context, is that an individual, who is attracted to the perceived outcomes of an entrepreneurial career, will be motivated to initiate entrepreneurial behavior if such effort is reasonably expected to result in their acquiring these valuable second-order rewards.

There are three potential reward categories that are posited to influence individuals to pursue entrepreneurial careers--the rewards of profit, independence, and a satisfying way of life (Reynolds, P, 1988; Longenecker, Moore, & Petty, 2000). First, the reward of profit is the entrepreneur's expectation of earning a yield that will recompense them for the time and capital that they have devoted as well as for the risks and initiative they take in running the business. This reward is deemed the primary basis for initiating any profit-making enterprise. Without the hope of profit, there is no entrepreneurial opportunity (Kirzner, 1973). Second, the reward of independence is the expectation of freedom from supervision, rules, and bureaucracy (Reynolds, P, 1988; Longenecker, Moore, & Petty, 2000). This reward is symptomatic of an entrepreneur's desire to be one's own boss and experience the autonomy of pursuing whatever course holds personal interest. The reward of independence is attained and sustained as a result of profitable venturing. Lastly, the reward of a satisfying way of life is the expectation of freedom from routine, boring, and unchallenging jobs (Reynolds, P, 1988; Longenecker, Moore, & Petty, 2000). This expectation is characteristic of entrepreneurs who view their businesses as tools of pleasure instead of work. This is a common sentiment among entrepreneurs who use their businesses as an instrument for self-expression and self-actualization (Scarbourough & Zimmerer, 2000) by using profits and products to contribute to important societal causes while making a good living. It is proposed that these three categories of rewards are the active agents of expectancy theory (valence) cognitions within potential and actual entrepreneurs. In this conception, the expectancy theory (valence model) is posited to be general enough to apply to all entrepreneurs. It does not attempt to delineate all of the specific needs that influence behavior because of the differences of each individual. It does, however, identify universal categories of considerations (valences and instrumentalities) that are cognitively processed to determine individual behavior over the course of time.

In summary, there exists virtually no empirical expectancy theory research on actual or prospective entrepreneurs. While there have been a few theory driven proposals pertaining to the association of expectancies to the entrepreneurial decision-making process (Olsen & Bosserman, 1984; Gatewood, 1993), quantitative analyses need to undertaken to validate forecasted relationships.

Entrepreneurial Career Preference (Based on Intrinsic and Extrinsic Work-related Rewards) and Entrepreneurial Intentions

After examination of the three entrepreneurial occupation preference dimensions, it is apparent that preference for an entrepreneurial career may be further delineated as being based on the calculation of an individual's extrinsic and intrinsic entrepreneurship-related valence scores. Brief & Aldag (1977) identified the difference between extrinsic and intrinsic work-related outcomes, which form the basis of entrepreneurial career preferences. An intrinsic work-related reward is an object or event received or experienced by an individual during the performance of tasks related to the occupation. These are rewards that are internally generated and self-appreciated. Intrinsic work rewards do not require the involvement of sources external to the task-person situation to be produced. Conversely, an extrinsic work-related reward is an object or event received or experienced following the completion of tasks related to the occupation. The delivery of an extrinsic reward is reliant on sources outside of the task-person situation to take place. Based on these definitions, the three main rewards of an entrepreneurial career can be categorized thusly:

1. The Reward of Profit: This occupational reward may be considered extrinsic because profit is a tangible outcome of vocational performance, which is dependent on the involvement of a source external to the immediate task-person situation to take place.

2 & 3. The Rewards of Independence and a Satisfying Way of Life: These rewards may be considered intrinsic because personal feelings of independence, autonomy, challenge, and excitement may be realized during the performance of entrepreneurial tasks. Neither of these rewards is dependent on the involvement of external sources to be realized.

Entrepreneurial career preferences (based on the rewards of independence, a satisfying way of life, and profit) are expected to predict entrepreneurial intentions. The conceptual framework for this proposition is based on Vroom's (1966) expectancy theory. The expectancy theory of motivation suggests that individuals will make rational choices (intent) to initiate behavior after an assessment of the value of the outcomes of the behavior and the likelihood that the outcomes will be attained (Gatewood, 1993). Since expectations are considered when weighing choices about alternative occupational plans, individuals will be inclined to expend effort on those behaviors that are expected to result in the attainment of need-satisfying outcomes. What can be assumed, in a specific context, is that an individual will develop entrepreneurial intentions if such effort is expected to result in valuable occupation-related rewards. These occupation-related rewards may be categorized as being either intrinsic or extrinsic (Brief & Aldag, 1977). The relevant outcomes that drive the preference for an entrepreneurial career is based on the prospect that the attempt to start a new venture will result in profit (extrinsic), independence (intrinsic), or a satisfying way of life (intrinsic) (Reynolds, P, 1988; Longenecker, Moore, & Petty, 2000). It is, therefore, proposed that these three categories of rewards are the active agents of latent entrepreneurial intentions and are the driving forces behind entrepreneurial behaviors. Thus,

Hypothesis 1: The Preference for an Entrepreneurial Career based on occupational reward perceptions of (a) Independence, (b) a Satisfying Way of Life, and (c) Profit are positively related to the formation of Entrepreneurial Intentions.

The Possible Moderating Effect of the Extrinsic Reward of Profit on the Intrinsic Reward of a Satisfying Way of Life

The intrinsic reward of a satisfying way of life is an entrepreneurial incentive that may be specified as "freedom from routine, boring, and unchallenging jobs" (Longenecker, Moore, & Petty, 2000: page 6). As such, it is the least definitive of the three main rewards of entrepreneurship that may be identified as uniquely entrepreneurial. In comparison, the reward of profit represents freedom from the limits of regular financial payments (wages), including the possibility of attaining wealth, and the reward of independence is indicative of a being one's own boss, making decisions, taking risks, reaping the rewards, and having an opportunity to direct others (Longenecker, Moore, & Petty, 2000). Both of these rewards may easily be identified as being almost exclusively related to the vocation of entrepreneurship as opposed to other occupations. However, there exist many other occupations, besides entrepreneurship, that possess challenging and non-routine job characteristics (reward of a satisfying way of life). For example, the occupations of corporate manager, fire fighter, carpenter, and university professor are all examples of professions that may also deliver the reward of a satisfying way of life.

In this study, it is expected that the relationship of entrepreneurial career preference based on the intrinsic reward of a satisfying way of life and the formation of entrepreneurial intentions may be heightened significantly when moderated by entrepreneurial career preference based on the, uniquely entrepreneurial, extrinsic reward of profit. The vocation of entrepreneurship is unique because, in many instances, the sole mode of compensation is company profits. New venturing requires that entrepreneurs invest significant amounts of time, resources, and equity until profits are realized (Longenecker, Moore, & Petty, 2000). Therefore, in order for an individual to form stronger entrepreneurial intentions than others when he or she is attracted to occupations that are challenging, non-routine, and exciting (satisfying way of life), he or she should also possess a preference for reasonable, to possibly limitless, profits in favor of regular (limited) wages. Only then, it is estimated, is the occupational preference of the individual uniquely entrepreneurial. Therefore, it is posited that after the interaction of career preference based on these two rewards, the relationship of preference for an entrepreneurial career based on the intrinsic reward of a satisfying way of life and the formation of entrepreneurial intentions will be strengthened. Thus,

Hypothesis 2: The existence of positive perceptions about the extrinsic Reward of Profit will moderate the relationship between the Reward of a Satisfying Way of Life and Entrepreneurial Intentions. That is, this relationship will be strengthened significantly.

METHODOLOGY

Sample Description and Data Collection

There is disagreement among scholars as to what types of samples are most appropriate for studies of entrepreneurial intent and behavior. Gartner (1989) proposed that a common weakness of studies into the predictors of entrepreneurial intentions is the failure of investigators to choose samples that are (1) comprised solely of people who are serious about entrepreneurship and (2) who are in the process of making the decision to become involved in creating a new business. Most analyses contain samples of individuals who have already initiated a going concern or are comprised of graduating university students who may or may not be earnest about their desire to pursue an entrepreneurial career. The lack of a direct correspondence between individuals who have outwardly chosen entrepreneurship as a vocation and their entrepreneurial intentions is thought to weaken the robustness of study findings. More recently, however, academicians have formed a contradictory view. Krueger, Reilly and Carsrud (2000) find that studies comprising samples of upper-division college students can uncover occupational inclinations at a time when respondents are wrestling with important career decisions. Such samples undoubtedly include subjects with a wide range of intentions and attitudes toward entrepreneurship. Due to the sensitivity of intentional processes to initial conditions (Kim & Hunter, 1993), it is important for researchers to study the onset of entrepreneurial phenomena before they occur. More precisely, study samples should include individuals who have not yet made a conscious decision to initiate new ventures. The sampling of only successful, current, or openly prospective entrepreneurs (e.g., college students majoring in entrepreneurship) introduces biases that subjugate data unpredictably, especially for rare phenomena (Krueger, Reilly, & Carsrud, 2000). While the exact details of a business may have not yet come together in the minds of most general upper-class college students, global career intentions should have (Scherer, Adams, Carley, & Weibe, 1989). Therefore, it is acceptable and appropriate to investigate entrepreneurial intent utilizing a sample of upper-class college students. It is important to note that the population of interest in this study consists of individuals who perceive that they will become entrepreneurs and not necessarily only those who will actually become entrepreneurs. This distinction is important because while behavior has been demonstrated to be predicted by intentions (Kim & Hunter, 1993), the focus of the current investigation remains at the entrepreneurial intentions level of analysis.

The sample for this study consisted of undergraduate business students who were nearing graduation, graduate business students, and professional degree program students. When students contemplate graduation, they may also develop immediate career plans and long-range goals. The most relevant college students are those from the business disciplines because, based on their discipline interest, these students have already decided to pursue business-related careers. There are, however, students in other schools and departments within the university where generalized business intentions might reside. For example, students majoring in architecture, veterinary and human medicine, engineering, construction science, and others may harbor the intent to initiate entrepreneurial ventures that lie within their specialized fields of interest. It is possible that even those who do not foresee immediate entry into entrepreneurial careers within specialized fields might harbor long-range entrepreneurial career goals. For that reason, a diverse sampling of college students (including some not studying a business discipline) was included in this study.

The study sample consisted of 404 students from a large southeastern university who participated utilizing an online, self-report data collection methodology. Subjects consisted of upper-level business undergraduates and Master of Business Administration (MBA) students in the concentrations of marketing, management, and accounting and professional-degree students from the College of Veterinary Medicine (CVM).

Upper-level undergraduate students in business, along with those pursuing the MBA, were appropriate primarily because their academic concentration implied that they had serious interest in pursuing a business career. Also, they were likely to offer a more informed range of interest in terms of business careers than students majoring in the sciences, liberal arts, humanities, or education. Since the intent to become an entrepreneur is a business career-related decision process, these upper-level business students offered a sample that was currently involved in such a process.

Veterinary students were appropriate for this study because the nature of their intended profession lends itself easily to the practice of entrepreneurship. In fact, the norm for success in the field of veterinary medicine is the ownership of a private practice. A recent report compiled by the three major veterinary associations in the United States demonstrates that of the approximately 64,000 veterinarians employed in the year 1997, 82% worked in private practice (Brown & Silverman, 1999). Thus, the tendency for veterinarians to become independent business owners is well established.

Data was collected using an online survey methodology. The researcher contacted students directly via mass targeted e-mail messages originating from the office of their academic major department. A website was developed so that the students could complete the survey questionnaire online. Each questionnaire was designed to collect data on all of the proposed variables of interest.

After exclusion of subjects with duplicate submissions and those whose survey questionnaires were only partially completed, the final sample totaled 351 individuals. This sample was equally represented between the genders, consisting of 175 (49.8%) males and 176 (50.2%) females. Subjects were primarily graduating undergraduate business seniors (71.2%) and 21 to 23 years old (71.1%). In fact, there were more CVM students (16%) than MBA students (12.8%). The majority of subjects were Caucasian (White) (83.7%) with the next significant representation being Black (11.4%), which is in accordance with national population percentage demographics.

Measures

Preference for an Entrepreneurial Career

Preference for an entrepreneurial career is defined in this study as the attractiveness of the possible rewards of entrepreneurship and the magnitude of one's belief that these rewards can be obtained as an entrepreneur. As such, this multidimensional construct is represented by the extrinsic reward of profit, and the intrinsic rewards of independence and a satisfying way of life (Table 1). These perceptions are envisioned within the valence model of the expectancy theory (Vroom, 1964; Mitchell, 1974), which has been validated for use to discern occupational preferences. It is a multiplicative function of the valence of entrepreneurial outcomes and the instrumentality that the occupational choice (entrepreneurship) will lead to second-level outcomes.

[MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII]

where

[V.sub.j] = the valence of outcome j (occupation j is a first-level outcome);

[I.sub.jk] = the perceived instrumentality of outcome j for the attainment of second-level outcome k;

[V.sub.k] = valence of outcome k. This outcome, which is the result of obtaining first-level outcome j, is defined as a second-level outcome;

n = number of outcomes.

The three scales that represent the multidimensional construct were examined in a pilot study that was conducted prior to the main analysis. Since the scales were developed from new measures, there exist no historical reliability indices to report. However, the pilot study demonstrated that the Cronbach's alpha reliability estimates of .78, .76, and .83 were reported for the rewards of profit, independence, and a satisfying way of life, respectively, for an unrelated sample of 349 business school students.

Valence of Outcomes

Second-level outcome valence is defined as the strength of the individual's affective orientation (positive or negative) toward the outcome (Mitchell, 1974). Using scaling procedures adapted from Teas (1981) and Bartol (1976), eleven potential rewards (second-level outcomes) of an entrepreneurial career were measured on a 5-point Likert scale ranging from extremely undesirable (-2) to extremely desirable (+2). The list of potential second-level outcomes was adapted from previous research (Teas, 1981; Bartol, 1976) and theory (Longenecker, Moore, & Petty, 2000).

Instrumentality

Instrumentality pertains to the degree to which the occupational choice alternative is instrumental in leading to, or detracting from, a second-level outcome. According to Vroom (1964) this variable can range from fully negative to fully positive. Consequently, this variable was measured by eleven items on a 5-point Likert scale ranging from extremely unlikely (-2) to extremely likely (+2).

Entrepreneurial intention

Entrepreneurial intention is defined in this study as the aspiration to start a business as exemplified by the level of preparation to do so. This is consistent with Behave's (1994) proposition that starting a business is best indicated by behavior that shows commitment to its physical creation. Five questions adapted from Chen, Greene, and Crick (1998) was used to assess entrepreneurial intentions (Table 1). Responses were gathered on a 5-point Likert scale and total scale score was obtained by averaging the five questions. The original authors reported a Cronbach's alpha of .92 for this scale, which implies strong reliability.

Demographic and Background Information

Information pertaining to each respondent's age, gender, ethnicity, and class was obtained to use as control variables in the analysis. Each of these control variables was recorded as non-continuous, categorical predictors.

ANALYSIS AND RESULTS

Hierarchical regression was the principal technique of analysis used to assess the hypotheses in the investigation. All relevant variables were standardized prior to regression analyses. Cohen and Cohen (1983) suggest this method is most important when independent variables possess a theoretically based casual priority, as in this study.

The study was conducted in one phase (Table 2). A three-step series of regression equations were employed with entrepreneurial intentions as the dependent variable. First, demographic indicators were entered into the regression equation to remove their influence on the variables of interest. Next, the hypothesized positive relation between preference for an entrepreneurial career (based on the rewards of independence, a satisfying way of life, and profit) and the formation of entrepreneurial intentions [H1(a-c)] was tested. Last, an investigation into the proposed moderating effect of entrepreneurial career preference based on the extrinsic reward of profit on preference for an entrepreneurial career based on the intrinsic reward of a satisfying way of life (H2) was accomplished.

Basically, it was expected that those who perceived entrepreneurship as desirable (due to the autonomy, challenge and excitement, and profit potential of the vocation) would form stronger intentions to start a business than those who did not. In addition, it was further projected that the perceptions about the likelihood of earning reasonable, to potentially limitless, profits as an entrepreneur would make the prospect of entrepreneurship significantly more attractive to individuals seeking excitement and challenge, and, thus, enhance the relationship between preference for an entrepreneurial career based on the reward of a satisfying way of life and entrepreneurial intentions. Step one of the analyses included gender, race, educational classification, and age as independent variables and entrepreneurial intentions as the dependent variable. The results (Table 3) of this initial regression equation (F = 7.881, p < .001) indicated that gender (beta = -.278; p < .001) and educational classification (beta = .138; p < .05) were significantly related to entrepreneurial intentions. On closer inspection, these results may be interpreted as demonstrating that the women in the sample being significantly less likely, and those in higher educational classifications being significantly more likely, to form entrepreneurial intentions than others.

Preferences for an entrepreneurial career based on the rewards of independence, a satisfying way of life, and profit were added in step two. The results supported the proposed positive relationship between entrepreneurial career preferences, based on independence (beta = .280; p < .001) and profit (beta = .199; p < .001), and entrepreneurial intentions (change in R-squared =.127, p. < .001) [H1(a),(c)]. However, the expected positive relation between the preference for an entrepreneurial career based on the reward of a satisfying way of life and entrepreneurial intentions [H1(b)] was not affirmed (beta = .060; p > .05) (SEE Table 3).

In the final step, the interaction of entrepreneurial career preferences based on a satisfying way of life and profit was added. The results supported the proposed moderating effect of the reward of profit on the relationship between preference for an entrepreneurial career based on the reward of a satisfying way of life and the formation of entrepreneurial intentions (beta = .220; change in R2 =.220, p < .05)[H2].

The significant moderating effect that the reward of profit has on the relationship between entrepreneurial career preference (based on the reward of a satisfying way of life) and entrepreneurial intentions may be explained in that it may be observed that individuals who crave an exciting, non-routine (satisfying) lifestyle form stronger entrepreneurial intentions than others only when accompanied by the heightened preference for the reward of profit. Conversely, individuals who are attracted to entrepreneurship for the satisfying lifestyle, but, without corresponding high preferences for earning profits do not form strong entrepreneurial intentions than others. In fact, individuals with low profit motives decrease the incidence of entrepreneurial intent formation as they increase their attraction for satisfying lifestyles. Similarly, the interaction may be explained from the view of preference for an entrepreneurial career based on the reward of profit. It is demonstrated that individuals with little preference for profits, but high preference for satisfying lifestyles, do not form stronger entrepreneurial intentions than those who prefer to avoid challenge and excitement (unsatisfying lifestyles). However, as preference for the reward of profits rise, those with higher satisfying lifestyle desires form significantly stronger entrepreneurial intentions than others. Thus, the significance of the moderation effect of entrepreneurial career preferences based on the rewards of profit and a satisfying way of life is affirmed.

DISCUSSION

The results of the analysis supported the concept that those who perceive entrepreneurship as advantageous based on the independence of the vocation form stronger intentions to pursue entrepreneurial careers than others. The analysis also indicated that people who are attracted to entrepreneurship based on profit opportunities form stronger entrepreneurial intentions than others. On the other hand, the analysis did not support the idea that people who perceive entrepreneurship as advantageous based, solely, on the perceived challenge and excitement of entrepreneurial work form stronger intentions to start a business than others. The results did, however, corroborate the moderating effect of the reward of profit, which indicates that individuals who seek challenge and excitement in their occupational endeavors (a satisfying way of life) form stronger entrepreneurial intentions than others when they reasonably perceive that they have the opportunity to reap fair, and potentially limitless, financial rewards (profits).

Hypothesis 1(a-c) tested the positive relations of the three preferences for an entrepreneurial career dimensions to the formation of entrepreneurial intentions. It was expected that preference for an entrepreneurial career based on the rewards of (a) independence, (b) a satisfying way of life, and (c) profit would relate positively to the formation of entrepreneurial intentions. Since all of the preferences for entrepreneurial career considerations represent occupational attitudes (Vroom, 1966), past research has demonstrated that they should be predictive of occupational intentions (Kim & Hunter, 1993). The results of this study support the predicted relation of preference for an entrepreneurial career based on the rewards of independence [H1(a)] and profit [H1(c)] to entrepreneurial intentions but failed to demonstrate a significant relationship for entrepreneurial career preference based on the reward of a satisfying way of life [H1(b)].

Vroom (1966) theorized that individuals intend to initiate behavior after an assessment of the value of the outcomes of the behavior and the likelihood that the outcomes will be attained (Gatewood, 1993). In other words, individuals make plans to expend effort on behaviors that are expected to conclude in the fulfillment of desirable outcomes. Longenecker, Moore and Petty (2000) claimed that the rewards of independence and profit are several valuable rewards that serve to motivate individuals to pursue entrepreneurial careers. The findings of this study are consistent with this basic premise. Independence has been affirmed as a prime motivator for entrepreneurs in several recent studies. Knight (2001) compared the desire for autonomy between "solo" entrepreneurs (those with no corporate-level support) and franchise owners (those with corporate-level support) and found that solo entrepreneurs valued independence and were more highly motivated than franchise owners. In fact, it was further posited that solo entrepreneurs might value independence to the point where their businesses suffer, due to their unwillingness to seek or accept advice (Knight, 2001). Other recent evidence showing the influence of independence as a major initiator of entrepreneurial intentions can be found in a recent national poll of new business owners conducted by USA Today magazine (Longenecker, Moore, & Petty, 2000). Results of the survey found that 38% of the individuals who left corporate positions to start new ventures did so because they wanted to become their own boss. Both of these findings support the results of the current study.

Monetary compensation has been widely heralded as a primary motivating incentive for businesses seeking increased performance from their workforce (Stajkovic and Luthans, 2001). For entrepreneurs, this motivating potential is amplified because the business founder is traditionally in control of, and has the right to make use of, all firm profits (Longenecker, Moore, & Petty, 2000). The findings in this study are consistent with several recent investigations, which demonstrate that positive attitudes toward profit are strong motivators of individual intentions and behavior. Hill and Stevens (2001) analyzed the influence of profit over elevated regular wages in corporations and found that profit-sharing led to overall superior employee effort and performance. The study showed that merely the possession of a small number of profit shares (stock options) was enough to influence employee effort, attitudes, and motivation. Similarly, Fakhfakh and Perotin (2000) examined the effects of profit-sharing on enterprise performance in France and found that profit-sharing was significantly related to increased industrial productivity in large and small firms. When the profit-sharing incentive was threatened by increased internal controls, however, employee performance diminished. Reynolds (1988) surveyed business founders in two states and found that the reward of potential profit was a consistent factor that influenced the new venture decision. Taken together, past theory and empirical evidence support the finding in this study that the reward of profit is a strong influence on intentions and behavior.

The findings of this study did not support the theory that entrepreneurial career preference based on the reward of a satisfying way of life was predictive of the formation of entrepreneurial intentions. However, other research has confirmed that a positive relation between a satisfying lifestyle and new venture start-ups does exist. For example, Reynolds (1988) examined the emergence of new firms in Minnesota and Pennsylvania (from 1987-1988) and found that many business founders attributed their decision, in part, to start a new venture on the pursuit of a more interesting work lifestyle. To offer a possible rationalization of why the reward of a satisfying way of life was not significantly related to entrepreneurial intentions in this study, the concept of attitude should be explored. Fishbein and Ajzen (1975) define attitude as a learned tendency to react in an approving, or critical, manner toward some stimulus. In this case, entrepreneurial career preference based on a satisfying way of life (attitude) was posited to elicit favorable intentions to pursue entrepreneurship (stimulus). Additionally, Ajzen and Fishbein (1980) theorized that attitudes are a result of beliefs, which are developed by evaluating past experiences. Specifically, an individual who believes that a behavior will result in a positive outcome will hold a favorable attitude toward the behavior only after a finding that the outcome is desirable based on past experiences. It is posited that, without the pertinent experiences from which to base comparable outcomes, there may not be enough compelling evidence from which to form intentions. Since the reward of a satisfying way of life has, routinely, been shown to hold significance for active entrepreneurs (Longenecker, Moore, & Petty, 2000; Reynolds, 1988), it is possible that the sample used in this study (university students) may have not gained enough relevant life experience from which to draw upon to affirm the significance of a satisfying lifestyle to the formation of entrepreneurial intentions. Conversely, the results might also be suggestive of well-informed respondents who know how much work is involved in new venturing and do not perceive of the challenges of entrepreneurship as satisfying. In either case, the hypothesis would be deficient of support.

Hypothesis 2 predicted that entrepreneurial career preference based on the reward of profit would moderate the relationship between entrepreneurial intentions and preference for an entrepreneurial career based on a satisfying way of life. In short, the attractiveness of potential entrepreneurial profits would bolster the formation of entrepreneurial intentions within individuals who crave challenging and non-routine business lifestyles. The results of this study support the predicted relationship.

It was argued earlier that the reward of a satisfying way of life was a common characteristic in many occupations, unlike the uniquely entrepreneurial rewards of independence and profit, and may not offer a compelling consideration for individuals to develop stronger entrepreneurial intentions than others. Therefore, it was hypothesized that the, strongly entrepreneurial, reward of profit (Longenecker, Moore, & Petty, 2000) might logically interact with the reward of a satisfying way of life to strengthen the relationship. While this argument is highly intuitive, there exists theory that may help explain the observed positive results. Shapero and Sokol (1982: page 86) described the occurrence of the entrepreneurial event as "a necessary interaction between perceptions of desirability and perceptions of feasibility." Perceptions of desirability are social and cultural factors that are expressed through the formation of individual value systems. Generally, an individual within a social system that places value on challenge and excitement (a satisfying way of life) is likely to be influenced to seek a congruent professional lifestyle (Shapero & Sokol, 1982). As such, the result of the search for an occupation that provides challenge and excitement may lead to the formation of entrepreneurial intentions. However, if one perceives that the formation of a business is unfeasible, one may conclude that it is also undesirable (Shapero & Sokol, 1982). Perceived feasibility of a new venture may pertain to the availability of financial support (Shapero & Sokol, 1982), adequate skills and other resources (Krueger, 1993), or expected returns on the investments of time and effort in the form of business profits (Longenecker, Moore, & Petty, 2000). Therefore, positive assessments resulting in the formation of entrepreneurial intentions after the interaction of preferences for an entrepreneurial career based on the rewards of a satisfying way of life (perceived desirability) and profit (perceived feasibility) are consistent with Shapero and Sokol's (1982) thesis.

IMPLICATIONS

Overall, the results of the current study provide practitioners, such as entrepreneurs, vocational educators, and public policy administrators, a number of practical implications that may assist in the expansion of the entrepreneurship agenda. By discerning how entrepreneurial intentions are formed, policy makers may be able to take advantage of the robust intentions-behavior relationship to help promote new business creation initiatives.

One important factor that has the potential to affect intentions is an individual's perceptions of the rewards of an entrepreneurial career. The current study confirmed that the value that people designate to these potential rewards was shown to strongly influence the formation of entrepreneurial intentions through preference for an entrepreneurial career. Better education to enhance knowledge about the likelihood of realistically attaining these rewards should provide valuable perspective from which to form career-related judgments. Essentially, the more that people understand that entrepreneurial work requires long hours and dedicated effort (Chandler & Jansen, 1992) instead of focusing, solely, on potential rewards and accolades should help to decrease the notoriously high failure rates of new ventures (Cromie, 1994) that are initiated by unsuspecting entrepreneur novices. For example, the results suggest that people who are attracted to independence, profit, and challenges are good candidates to form the intentions to pursue entrepreneurship as a viable, realistic, career option. Therefore, any entrepreneurial training that they receive should include in-depth analyses about which rewards may reasonably be attained and in what timeframes for particular types of businesses. In this manner, prospective entrepreneurs can develop realistic business plans based on pragmatic working lifestyles and realistic compensation expectations.

A possible limitation of the current research was the sole use of students as respondents. It should also be noted, however, that one of the primary strengths of the current study is that all individuals in the study were in the process of making career-related choices. Consequently, the idea of starting a business was a realistic option for them. It has been demonstrated that even early career intentions are good predictors of eventual behavior (Krueger, Reilly, & Carsrud, 2000; Trice, 1991). However, this does not avoid the problem in previous entrepreneurial research of including individuals in the sample who are not engaged in making specific entrepreneurial decisions (Gartner, 1989). According to some researchers, this approach to sampling brings into question the soundness of the findings (Gartner, 1989). However, an attempt was made in this study to include groups of students that may have advanced, or predisposed, opinions about pursuing entrepreneurial careers. The study focused on graduating business students, MBA students, and veterinary students. Each of these sub-samples are comprised of individuals who possess sophisticated business knowledge, attitudes, and ambitions, when compared to others, and represent an appropriate sample from which to study entrepreneurial intentions (Krueger, Reilly, & Carsrud, 2000).

Only studies of a longitudinal nature will ultimately be able to offer a complete explanation concerning whether individuals who score highly for certain entrepreneurial career preferences actually pursue an entrepreneurial career. Entrepreneurial intentions hold little value as a research focus if they are not acted upon. Although Kim and Hunter (1993) found that attitudes predict intentions and that intentions are highly predictive of behaviors, future research should more fully investigate this relationship in entrepreneurial contexts. If a sample was utilized that included only individuals who were knowledgeable and committed about entrepreneurship, then these subjects could form the basis of a longitudinal investigation to discover whether they actually developed the businesses that they were projected to start. Although the effort and resources required to sustain a relationship with a large number of research subjects over an extended period of time is daunting, these types of studies need to be implemented in the academic pursuit of entrepreneurship research.

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Jeff Brice, Jr., Texas Southern University

Millicent Nelson, Middle Tennessee State University

Table 1: Scales Used in the Current Study

Preference for an Entrepreneurial Career

 (5-point Likert-type scales: (Valence x Instrumentality for each
 indicator))

Reward of Profit (PROF)

 (Valence: How much do you desire each of the following rewards,
 opportunities, and outcomes?--Extremely Undesirable to Extremely
 Desirable)

 (Instrumentality: Rate how likely it is that being an entrepreneur
 (independent business owner) can lead to someone attaining each
 listed reward, opportunity, or outcome?--Extremely Unlikely to
 Extremely Likely).

 1. Making enough money to meet my needs.
 2. Opportunity to get rich.
 3. Earning a profit that will justify investments of time, money,
 and risk.
 4. Opportunity to make as much money as I want.

Reward of Independence (IND)

 (Valence: How much do you desire each of the following rewards,
 opportunities, and outcomes?--Extremely Undesirable to Extremely
 Desirable)

 (Instrumentality: Rate how likely it is that being an entrepreneur
 (independent business owner) can lead to someone attaining each
 listed reward, opportunity, or outcome?--Extremely Unlikely to
 Extremely Likely).

 1. Freedom from supervision.
 2. Opportunity to direct others.
 3. Opportunity to be my own boss.

Reward of a Satisfying Way of Life (SAT)

 (Valence: How much do you desire each of the following rewards,
 opportunities, and outcomes?--Extremely Undesirable to Extremely
 Desirable)

 (Instrumentality: Rate how likely it is that being an entrepreneur
 (independent business owner) can lead to someone attaining each
 listed reward, opportunity, or outcome?--Extremely Unlikely to
 Extremely Likely).

 1. Exciting work.
 2. A challenging career.
 3. Freedom from a routine, repetitive job.
 4. Freedom from a boring job.

Entrepreneurial Intention (INTENT)

 (5-point Likert-type scales: adapted from Chen, Greene, and Crick,
 1998)

 1. I am interested in setting up my own business.
 2. I have considered setting up my own business.
 3. I am preparing myself to set up my own business.
 4. I am going to try hard to set up my own business.
 5. How soon are you likely to set up your own business?

Table 2: Outline of the Hierachical Regression Analysis

Regression Dependent Variable Independent Variables
 Entered
Phase 1 Step 1 Entrepreneurial Gender, Race,
 Intentions Class, Age
 Step 2 Entrepreneurial IND, SAT, PROF
 Intentions
 Step 3 Entrepreneurial (SATxPROF)
 Intentions

IND: Reward of Independence
SAT: Reward of a Satisfying Way of Life
PROF: Reward of Profit
(SATxPROF):Interaction of Rewards of a Satisfying Way of Life and
Profit

Table 3: Hierarchical Regression Analysis

Regression Dependent Independent Beta F
 Variable

Step 1 Entrepreneurial 7.881 ***
 Intentions
 Gender (.278) ***
 Race (.012)
 Class .0138 *
 Age 0.035

Step 2 Entrepreneurial 13.053 ***
 Intentions
 IND .280 ***
 SAT (.60)
 PROF .199 ***

Step 3 Entrepreneurial 12.06 ***
 Intentions (SAT x PROF) .220*

Regression [R.sup.2] [R.sup.2] Partial
 (Change) F

Step 1 .084 .084 7.88 ***

Step 2 .210 .127 18.3 ***

Step 3 (.220) .010 4.283 *

N = 351

* p < .05

** p < .01

*** p < .001

( ) Negative relationships

IND: Reward of Independence

(SATxPROF): Interaction of Rewards of a Satisfying Way of
Life and Profit

SAT: Reward of Satisfaction

PROF: Reward of Profit