Influences on entrepreneurial awareness: internal vs. external motivations.

Mayo, Donna T. ; Helms, Marilyn H. ; Becherer, Rochard C. 等

ABSTRACT

Entrepreneurs have been examined in a variety of ways including profiling on a number of behavioral and demographic variables. Although there is little agreement regarding the personality traits, age, gender and motivational factors leading to self-employment, most scholars believe these to be noteworthy constructs for research. This study examines the relationships between externally and internally motivated entrepreneurs and entrepreneurial awareness. Our initial model suggests the antecedents of entrepreneurial awareness are social networks, perceived risk, illusion of control, flexibility, information asymmetry and prior knowledge, optimism, and creativity. In addition, research indicates entrepreneurial awareness of business owners differs based on the source of idea stimulation--external and internal. Social networks are more important for externally stimulated entrepreneurs, while perceived risk is more highly correlated with internally stimulated entrepreneurs. For both groups of business owners entrepreneurial awareness is significantly correlated with optimism, creativity, and illusion of control. Correlations between entrepreneurial awareness and both perceived risk and optimism are significantly different between the externally and internally motivated entrepreneurs. Discussion and ideas for further research are presented.

INTRODUCTION

How and why entrepreneurs formulate business ideas and choose their business ventures is a subject of continuing study. Although the establishment and development of a business opportunity is key in all self-employment ventures, the factors affecting opportunity recognition and motivation may vary among entrepreneurs. Based on a survey of recent small business owners, this paper examines the degree to which social networks, perceived risk, illusion of control, flexibility, information asymmetry and prior knowledge, optimism, and creativity are related to opportunity awareness, an antecedent to opportunity recognition. In addition, a comparison is made between those entrepreneurs who are internally motivated and those who are externally motivated to determine if differences exists between the two groups in the factors that are associated with entrepreneurial awareness. The study finds entrepreneurial awareness in both internally and externally motivated entrepreneurs to be significantly correlated with optimism, creativity, and illusion of control. Externally-motivated entrepreneurs are additionally affected by their social networks, while internally-motivated entrepreneurs are affected by perceived risk. These results provide insight into opportunity recognition behavior among both entrepreneurs and would-be entrepreneurs regarding idea generation as it relates to the formation of new business ventures.

LITERATURE REVIEW

A successful business venture is the result of the successful development of an opportunity. Much of the research in entrepreneurship has focused on opportunity development and how individuals establish and maintain their successful operations. However, before an opportunity is developed, it must be recognized--that is, someone must become aware opportunity exists. Opportunity recognition has been studied (see, for example, Hills, Lumpkin & Singh, 1997) as a precedent to business development and additional research has focused on the role of entrepreneurial awareness as a precedent to opportunity recognition. (Ardichvili, Cardozo & Ray, forthcoming)

Entrepreneurial Awareness

In their examination of opportunity recognition, Ardichvili, Cardozo, and Ray (forthcoming) suggest opportunity recognition is preceded by entrepreneurial awareness, a propensity to notice and be sensitive to information about objects, incidents, and patterns of behavior in the environment, with special sensitivity to maker and user problems, unmet needs and interests, and novel combinations of resources. As a precursor to opportunity recognition, entrepreneurial awareness is necessary to gather information and to make linkages between an individual's interests and expertise and issues within the environment. These macro environmental variables include social, legal, political, demographic, and psychographic issues. While the information is external, it may involve more than environmental issues alone. Other factors include those individuals after whom the entrepreneur patterns behavior and new product development variables. These "more aware" individuals tend to gather significant information to aid in later business formation. Therefore, those who are more introspective or unaware may miss significant market shifts and/or consumer preference changes that could lead to profitable new business ideas.

Based on the extending works of many researchers (Hills, Lumpkin & Singh 1997; Forlani & Mullins 2000; Simon, Houghton & Aquino, 1999; Shane, 2000; Ray & Cardozo, 1996), the current study examined factors hypothesized to be correlated with entrepreneurial awareness including:

 social networks,
 perceived risks,
 illusion of control,
 flexibility,
 information asymmetry and prior knowledge,
 optimism, and
 creativity.

Social Networks

A social network consists of the number and type of individuals with whom a person has contact. Interacting with others is a particularly important vehicle for staying attuned to the general climate of opportunities. Hills, Lumpkin, and Singh (1997) stress the importance of entrepreneurs' social networks when they note entrepreneurs who have extended networks identify significantly more opportunities than solo entrepreneurs.

In addition to identifying the importance of social networks to entrepreneurial awareness, De Koning (1999) identified the various groups of people who define one's social network. The author identified the set of people with whom an entrepreneur has long term, stable relationships, but are not partners in the venture (entrepreneur's inner circle); the people recruited by the entrepreneur to provide necessary resources for the opportunity (the action set); the start-up team members (partners); and the group of people used to gather general information (a weak-tie network). An entrepreneur's inner circle may include close friends and family as well as colleagues from previous employment or past business ventures. Other long-term, stable contacts can include members of professional and civic organizations, neighbors, religious group members, and contacts associated with daily activities (i.e., consumer transactions and service employment).

On the other hand, the action set may parallel the entrepreneur's inner circle to include advisors, members of boards of directors, bankers, lawyers, financial planners, and other professionals. Start-up team members may include formal partners with, or without an equity stake in the business, as well as informal partners who have a vested interest in the business. The group may even include family members. The weak-tie network is a loose amalgamation of contacts but is of no less importance. This group may include a number of individuals involved in formal acquisition of information such as those involved in marketing research, environmental scanning, analysis of consumer behavior, market trends, industry structure, supply chains, and political and regulatory shifts. Informally, the group can include customers, ad-hoc focus groups, and the general public.

Perceived Risk

Early studies of entrepreneurial risk-taking centered on the premise entrepreneurs are predisposed to take on risky ventures (d'Ambrose & Muldowney, 1988). However, Palich and Bagby (1995) challenged this theme using categorization theory to frame the decision process used by entrepreneurs. Categorization theory posits that decision-makers confronted with large amounts of information use cognitive heuristics. Heuristics or "rules of thumb" are mental shortcuts used to help store and process information efficiently. The authors proposed, rather than having a higher propensity for undertaking risky ventures, entrepreneurs may instead have a lower level of risk perception. The use of heuristics in assessing new ventures can lead to higher levels of optimism and lower levels of risk perception, thus predisposing the decision-maker towards entrepreneurial ventures. An empirical analysis (Palich & Bagby, 1995) indicated no significant difference in the risk propensity of entrepreneurs and non-entrepreneurs. However, using a SWOT analysis scenario, entrepreneurs did differ significantly across all categories in their assessment of a venture's strengths, weaknesses, opportunities and threats. The authors conclude lower risk perception, and not higher risk propensity, explains why some individuals will start new ventures that others choose not to pursue.

From a slightly different perspective, Forlani and Mullins (2000) studied the aspects of a decision-maker faced with a particular decision leading entrepreneurs to perceive varying levels of risk in a potential new venture. While they conclude both risk propensity and risk perception influence the new venture choices, their study is based upon a methodology that places CEO managers, rather than entrepreneurs, in hypothetical decision situations. While both the Simon, Houghton, and Aquino (2000) and the Forlani and Mullins (2000) research findings are interesting; their weakness is that their methodology does not focus on a true sample of entrepreneurs, but rather a convenience sample of managers and MBA students.

Illusion of Control

Simon, Houghton, and Aquino (2000) integrated the illusion of control variable in their study of entrepreneurs. Illusion of control occurs when an individual attributes greater influence to their skill rather than random chance in assessing the results of a previously uncertain outcome. Simon, Houghton, and Aquino (2000) tested their model using a decision-making simulation with MBA students as subjects. They concluded illusion of control is correlated with risk perception, which influences decision makers to start a new venture.

Entrepreneurs typically have confidence in their abilities to both start a business and make it a success. They often feel power over uncontrollable external variables and internal processes termed an "illusion of control." This illusion of control is important for the start-up process. Without some perception of power and ability to motivate others, as well as to sell an idea, secure funding, attract partners, and other investors during start-up, few entrepreneurs would begin the process. This illusion of control acts as a reinforcement and foundation upon which to build the business venture. Typically when entrepreneurs have an illusion of control, they feel they can make a business idea a success when others might fail. In addition, they feel a sense of expertise in forecasting results and even anticipating the actions of competitors. Without an illusion of control, the would-be entrepreneurs may doubt their skills and abilities and be less aware of potential entrepreneurial opportunities.

Flexibility

Like creativity, flexibility is seen as essential to entrepreneurial success. Flexibility is the ability to adapt to a changing environment. As entrepreneurs journey through the business formation process, flexibility is required at every step along the way--in the development of the business idea, the product or service development process, the search for partners and funding, the choice of a location, promotional opportunities, names, business logos, branding, and a myriad of other important decisions. Without flexibility, the would-be entrepreneur may see the inability to evolve as they projected as a barrier to further development and may exit the market or never develop the potential business.

In her study of successful entrepreneurs, Monk (2002), suggested flexibility as the key to uncovering unexpected opportunities during a recession. In a case-study approach of three companies, she found entrepreneurs did not always launch businesses when they wanted to, but rather when they were forced to start them, given externalities. The entrepreneurs felt they had to be flexible regarding change. For example, retailing is about testing and developing ideas and this requires constant development and evolution, which all require flexibility. This suggests the potential role of flexibility in being aware of entrepreneurial opportunities.

Prior Knowledge and Information Asymmetry

People tend to notice new information if it is related to information they already know (Von Hippel, 1994). Therefore, Shane (2000) postulated entrepreneurs would discover opportunities because prior knowledge triggers recognition of the value of the new information. His research tested and confirmed the following hypotheses: (1) Any given entrepreneurial opportunity is not obvious to all potential entrepreneurs; each person's idiosyncratic prior knowledge creates a "knowledge corridor" which allows them to recognize certain opportunities, but not others (Hayek, 1945); and (2) three major dimensions of prior knowledge are important to the process of entrepreneurial discovery--prior knowledge of markets, prior knowledge of ways to serve markets, and prior knowledge of customer problems.

Sigrist (1999) postulated two types of prior knowledge relevant to this process--a knowledge in an area or domain of special interest, or knowledge that can be described in terms of fascination and fun. Years of working in an areas result in knowledge that is primarily of special interest to that particular field.

Optimism

Individuals who see the world in a positive light seem better able to recognize entrepreneurial opportunities. Scholars have investigated the relationship between greater opportunity recognition and optimism and a positive relationship has been noted (Krueger & Brazael, 1994). Successful entrepreneurs are more likely to see problems as opportunities. Their optimism and positive outlook encourages them to search for solutions to problems. The solutions often result in a new entrepreneurial venture. Without optimism, many opportunities may be overlooked. Optimism may also encourage the risk-taking attitudes and abilities often noted in entrepreneurs (Krueger & Dixon, 1994). Pessimists are more likely to see problems as insurmountable, and consequently their attitude limits their ability to find solutions. Those optimistic about the chances of success may be more likely to continue a business despite challenges in operations. Many entrepreneurs are not first-time entrepreneurs and thus do not see failure in a prior business as a limiting factor to future success in a new venture.

Creativity

While the term creativity may represent artistic talents or cultural proficiency to many people, it has a particular and unique meaning in the world of entrepreneurs. Ray and Cardozo (1996) define entrepreneurial creativity as an ability to quickly recognize problems and their proposed resolution by identifying obscure or unique solutions and/or by using available resources in a non-obvious manner to solve dilemmas. In the case of the entrepreneur, creativity also implies solving problems within a time frame in advance of other market entrants. The entrepreneur not only defines the problem (or unmet market need) correctly but uses resources effectively and efficiently to develop the business. The entrepreneur is an early entrant into the evolution of a market. Developing a competitive advantage (Porter, 1980) is often the result of a creative mind.

Internally vs. Externally Motivated Entrepreneurs

The reasons individuals make decisions to begin new business ventures are numerous and varied. These reasons range from situational factors, such as losing a job or having a spouse die, to discovering a product or service to be marketed. The motivations for beginning a business venture have an effect on opportunity recognition. In an early study of entrepreneurial motivations, Cyert and Marsh (1963) suggested the process of recognizing an entrepreneurial opportunity could be the result of an "opportunistic search" or a "problematic search."

Bhave (1994) reclassified these terms as externally stimulated opportunity recognition and internally simulated opportunity recognition. In his study of entrepreneurial venture creation, Bhave suggests entrepreneurs are externally stimulated when the decision to start a venture precedes opportunity recognition. The decision to become involved in a business venture is influenced by the individual's personal and environmental situation. For example, a person may be laid off from their current job, or decide that they no longer enjoy their current job situation. According to Bhave, the majority (59%) of the decisions to begin a business are of this type. For the remainder (41%) of entrepreneurs the decision to start a venture follows opportunity recognition. These internally stimulated individuals discover a gap in the ability of the current marketers to successfully meet the needs of consumers and the result is the development of a business enterprise. Since the motivation of these two groups of entrepreneurs are different, it stands to reason there may be differences in the factors correlated with their degree of entrepreneurial awareness as it relates to ultimately recognizing entrepreneurial opportunity.

MODEL AND HYPOTHESES

Figure 1 defines the model of influences on entrepreneurial awareness based on the previously defined variables. The model consists of seven factors: social networks, perceived risk, illusion of control, flexibility, information asymmetry and prior knowledge, optimism, and creativity. The following hypotheses are postulated.

[FIGURE 1 OMITTED]

H1: Entrepreneurial awareness is associated with:

a. Social networks

b. Perceived risk

c. Illusion of control

d. Flexibility

e. Information asymmetry and prior knowledge

f. Optimism,

g. Creativity entrepreneurial awareness.

H2: The correlation of entrepreneurial awareness with the above factors will vary depending on the entrepreneur's external vs. internal stimulation.

DATA COLLECTION AND METHODOLOGY

To test the hypotheses and validate the model, data was collected using a questionnaire mailed to 3,574 persons identified as having applied for a new business license in a five-county metropolitan statistical area, which crosses political lines and is located at the border of three Southeastern states. These licenses are required of all new businesses, as well as those who change ownership or the form of their organization (e.g., partnership changed to an S-corporation). In addition, business licenses are valid for five years and must be renewed. Thus the original population contains both new and existing businesses in the sample area. The data collection procedure included a postcard alerting the respondents to the forthcoming survey and two subsequent mailings of the survey instrument.

Consistent with the research objective of focusing exclusively on the characteristics and attributes of recent entrepreneurs, acceptable respondents for the sample were limited to those who formed and began their business during the past four years. The four-year limitation was developed based on recency effects which includes the respondent's ability to accurately recall both their attitudes at formation as well as the external conditions of the economy and other macro-environmental forces. Using this criterion, the sample size was distilled from 468 total respondents to 204 recent entrepreneurs.

The data were analyzed using SPSS-X Statistical Package for the Social Sciences. The initial hypotheses of key variables influencing entrepreneurial awareness were tested using correlation analysis. The second hypothesis, testing the correlation of key variables and entrepreneurial awareness as they differ based on the source of motivation, i.e., internal versus external was tested by transforming correlations into z-scores and using Fisher z-scores to test for differences between independent correlations.

The sample was split into an "internal" and an "external" subset based on the respondent's primary reason for starting a new business or purchasing an existing business. The question on the source of motivation polled respondents as to the primary reason for starting their business including: being unemployed; not satisfied with their former work situation; an opportunity to develop new ideas; an opportunity to develop someone else's ideas; a desire to be one's own boss; a desire to make more money; and an open-ended, "other" category, asking respondents to list any other primary motivation(s).

External motivations were the opportunity to develop their own ideas and the opportunity to develop someone else's idea, while internal motivations were unemployment, dissatisfaction with prior jobs, desire to be one's own boss, and desire to make more money. The few responses to the "other" category were classified as "external" or "internal" based upon the expert opinion of a former entrepreneur, who grew a business through formation to the IPO stage, and two researchers in the area of entrepreneurship.

Once the sample was split into the two subsets, the data was subjected to initial correlation analysis to determine differences, if any, between the groups on the selected variables. Based on the results of the analysis, five of the seven variables were significantly correlated with entrepreneurial awareness.

Measures

The three items that measured entrepreneurial awareness evaluated the respondent's ability to spot solutions, perception of changes, and general awareness of the world measured entrepreneurial awareness. These items were developed based on the work of Ray and Cardozo (1996). As noted earlier, social networks consist of the number and type of individuals with whom a person has contacts. In this study an entrepreneur's social network was measured by using four Likert scale items that were based on the work of Forlani and Mullin (2000).

Two scales used were adaptations of measurement tools used by Hills, Lumpkin, and Singh (1997). A three-item seven-point response scale was used to measure perceived risk. As an example, respondents were asked to rate the risk associated with starting their business venture from "minimal" to "extreme". The other items used the same concept scale with anchors of "very risky/not risky" and "high/low." The respondent's perception of the importance of creativity in a business venture, as well as the respondent's self perception of their creative abilities were the focus of the 3-item scale used to measure creativity

The Illusion of Control, Optimism and Flexibility scales were based on the work of Simon, Houghton and Aquino (1999). The Illusion of Control scale consists of three items focused on measuring the respondent's ability to forecast results, to make a business successful, and to anticipate competitor's actions. Optimism, a three-item scale, measured the respondent's views regarding the likelihood of improvement in the economy and in the respondent's life. Flexibility was measured by a ten-item Likert response scale. These items sought to measure the respondent's likelihood of responding to change in a favorable manner, feelings toward uncertainty and operating standards. Information Asymmetry and Prior Knowledge was measured using three Likert-scaled items including: knowledge of the overall market for a chosen business, ways to serve the market for the business, and awareness of customer problems or issues in the market,

RESULTS

Basic descriptive statistics were run to determine the distribution of the demographic characteristics of the respondent sample. The results are shown in Table 1. While the five factors (variability in optimism, creativity, illusion of control, social network, and perceived risk) were significantly correlated with entrepreneurial awareness for both groups of entrepreneurs, perceived risk was correlated only with internally-stimulated entrepreneurs while social networks was correlated only with externally-stimulated entrepreneurs. (See Table 2)

Internally Stimulated Entrepreneurs

For the internally stimulated entrepreneurs, four variables were significantly correlated with entrepreneurial awareness at the 0.02 level of significance. The variables were: Optimism (0.00), Creativity (0.01), Perceived Risk (0.02), and Illusion of Control (0.00). Interestingly, social networks were not significantly correlated with entrepreneurial awareness for internally stimulated entrepreneurs. Initially this seemed to be an unexpected finding; however, upon further analysis, the explanation may be internally stimulated entrepreneurs do not actively seek a large social/business set of contacts, preferring to reach key decisions on their own or in very small groups.

Flexibility was not significantly correlated and could possibly be explained by the lack of contacts and social network of the internally stimulated entrepreneur, leading the entrepreneur to their idea. Without feedback and idea testing externally, the entrepreneur is likely set on their "one" idea and is not as flexible to change or new suggestions. Information Asymmetry and Prior Knowledge did not trigger recognition of business ideas as these individuals were more concerned with their own needs or their current work situation. This does not mean the market forces and ideas for product and service improvement are not important, but may be subordinated by the entrepreneur's desires to change their immediate situation or fulfill personal goals and objectives.

The defining factors for the internally stimulated entrepreneurs warrant further discussion. Optimism and creativity are personality factors and tend to appear in most entrepreneurs regardless of the source of their motivation. Because entrepreneurship or self-employment is seen as more risky (or with more potential for multiple failures) than is a corporate job, an individual needs confidence in their abilities to succeed in the long-term, as well as a way to define a new product or service to serve the unmet needs of the market or to identify a new market for an existing product or service.

Perceived risk relates to the perception of the amount of inherent risk in the business idea or venture itself. The internal subset's perceived risk was positively correlated, thus indicating the group did not ignore the possibility of risk in the venture, but did not let the fear of failure stop them from achieving their dream of changing their current situation.

Illusion of control also fits the entrepreneurial personality and profile. To move forward in an entrepreneurial pursuit, an individual must believe they can succeed. This control or illusion of control, where perception is reality, influences the formation of the new business. It is not necessary to determine whether the control comes from an understanding of the market or a feeling of a "sure thing" in a possible business idea (including the purchase of a going concern or a franchise opportunity). The important issue is a person's feeling of confidence in their ability to control the process if not the business environment. Because a large percentage of new ventures fail, this illusion of control gives the would-be entrepreneur confidence to start another business.

Externally Stimulated Entrepreneurs

For the externally stimulated entrepreneurs, four variables were significantly correlated with entrepreneurial awareness at the 0.07 level of significance. The variables were: Social Network (0.03), Optimism (0.07), Creativity (0.04), and Illusion of Control (0.00). Not significant were flexibility, perceived risk, information asymmetry and prior knowledge, and risk propensity.

As would be expected a priori, social networks are positively correlated with entrepreneurial awareness with the externally stimulated entrepreneurs. Large groups of individuals provide advice, confirmation, feedback, and constructive criticism to the would-be entrepreneur and are often the source of unique, innovative ideas for a business. Because their motivation for the venture is not to escape a current job or situation, they instead are seeking to develop their own idea or someone else's idea. Thus, they seek to discuss their ideas and are more likely to gather feedback from large social groups. Like the internally stimulated entrepreneurs they share the typical traits of optimism and creativity found in most all entrepreneurs. One need only read profiles of successful entrepreneurs in publications including Entrepreneur, Entrepreneur Magazine, Inc. Black Entrepreneur, or Minority Business Entrepreneur to confirm the importance of these two traits.

Illusion of control also fits the externally motivated entrepreneur's personality and profile. Again, to move forward with the small business idea, regardless of the source of the idea or motivation, the entrepreneur must believe in their own abilities to bring the idea to fruition or to grow the existing purchased business.

Non-significant traits correlated with entrepreneurial awareness among the externally stimulated entrepreneurs were flexibility, perceived risk, and information asymmetry and prior knowledge. Flexibility measures an individual's organization, truthfulness, and general level of changing their idea. While flexibility is often important for an entrepreneurs open to new ideas, this factor was not significant. A reason for the lack of significance might be the use of extensive social networks prior to arriving at the business idea. Thus the social networks serve as an earlier precursor of flexibility. Perhaps this group has more confidence than the internally stimulated group, thus the insignificance of the risk-related variables. Perhaps too, entrepreneurs with a greater risk propensity are willing to take on more risk, but did not necessarily perceive it in the business opportunity they chose. Figure 2 includes the major factors significantly correlated with entrepreneurial awareness for those externally stimulated. They are: social networks; illusion of control; optimism; and creativity. Figure 3 includes the major factors significantly correlated with entrepreneurial awareness for those internally stimulated entrepreneurs. They are: perceived risk; illusion of control; optimism; and creativity.

[FIGURES 2-3 OMITTED]

As noted earlier, to test for differences between the correlation scores of the internally and externally stimulated entrepreneurial groups, the correlation scores were transformed into Fisher z-scores following the procedure suggested for testing the difference between independent correlations (Wendorf, 2002). Z-scores were computed and compared to significance table values for each of the seven factors. Table 3 presents correlation scores and z-scores for each factor. The correlations of optimism and perceived risk with entrepreneurial awareness were both significantly different for internally and externally stimulated entrepreneurs. The correlations of the other five variables were not statistically different for the two groups.

As expected from the previous discussion of the correlations, perceived risk was correlated only with internally stimulated entrepreneurs. Thus, this finding supports the strong linkage as the variable was not a key explanatory factor for the externally stimulated group. Optimism also was a factor found to be correlated strongly with both groups--the internally stimulated and the externally stimulated entrepreneurs. Thus this difference was not expected. However, this finding does not imply a lack of optimism or a need for optimism to gain entrepreneurial awareness. In this case, both groups have a significant degree of optimism, although the amount of optimism for each group is different. In both situations, it is interesting to note the higher levels of correlation were with internally stimulated entrepreneurs.

The other five variables were not statistically significant in their correlations between the two groups. For illusion of control and creativity, both groups exhibit strong correlations with entrepreneurial awareness in these factors. So a lack of significant difference is not unexpected. However, social networks present an interesting situation. Social networks were significantly correlated with entrepreneurial awareness for externally stimulated entrepreneurs. A priori it is expected the differences would be significant between the two groups. Flexibility and information asymmetry exhibited lower correlations with both groups of entrepreneurs thus explaining the reasons for the lack of significant differences.

SUMMARY AND DISCUSSION

The literature on how and why entrepreneurs choose their business venture includes a wide variety of factors. The results of this survey add to the literature in identifying variables that both support and extend this new perspective on entrepreneurial decision-making. Specifically we have identified influences on entrepreneurial awareness as a precursor to entrepreneurial behavior among both internally and externally stimulated entrepreneurs.

Empirical results for the study hypothesis provide support for the idea that entrepreneurs, as a group, receive motivations in different ways. The literature supports the idea that internal and external motivation affects the variable set used by an entrepreneur.

The motivations of entrepreneurs and the variables that affect their decision processes are critical to understanding the continued growth of a capitalistic economy. The results of this research provide support for the idea that there are both similarities and differences in the correlates of entrepreneurial awareness as a precursor to recognition of entrepreneurial opportunity among those who are stimulated toward entrepreneurial behavior by internal factors and those motivated externally. Additional research is needed to further define and validate this research. Through better understanding of the entrepreneurial process, profiles can be developed as well as mechanisms used to better aid entrepreneurs in their venture formation process. In addition, organizations that facilitate the entrepreneurial process including the Small Business Administration (SBA), the National Association of Women Business Owners (NAWBO), as well as the Service Corps of Retired Executives (SCORE) can better aid entrepreneurs in the formation process, if the motivations and influences on entrepreneurial awareness are better understood.

REFERENCES

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Donna T. Mayo, Dalton State College

Marilyn M. Helms, Dalton State College

Richard C. Becherer, The University of Tennessee at Chattanooga

J. Howard Finch, Florida Gulf Coast University

Table 1: Respondent Characteristics

 Internally Externally
 Stimulated Stimulated Total
 Entrepreneurs Entrepreneurs

Gender
 Male 49 76 125
 Female 31 32 63
Previous Occupation
 Mgr./Supervisor 39 60 99
 Non-Supervisor 22 38 60
 Unemployed/Not 5 5 10
 Seeking work
 Self-Employed 21 8 29
 Unemployed/Seeking 2 2 4
Age
 18-29 13 22 35
 30-49 57 74 131
 50+ 20 16 36
Education
 Grade 2 0 2
 High 24 36 60
 College 41 66 107
 Post Bachelor 21 10 31

Table 2: Correlations Between Entrepreneurial Awareness and
Explanatory Variables Among Internally and Externally Stimulated
Recent Entrepreneurs

 Internally Externally
 Stimulated Stimulated
 Entrepreneurs Entrepreneurs
 N=91 N=113

Social Network .14(NS) .21(.03)
Optimism .34(.00) .17(.07)
Creativity .27(.01) .19(.04)
Flexibility .04(NS) .13(NS)
Perceived Risk .30(.02) .09(NS)
Information Asymmetry .02(NS) .06(NS)
Illusion of Control .38(.00) .29(.00)

Table 3: Differences in the Correlation Scores of Internally
Stimulated Entrepreneurs And Externally Stimulated Entrepreneurs

 Internally-Stimulated Externally-Stimulated
 Entrepreneurs Entrepreneurs
 N=91 N=113

Social Network .138 .212
Optimism .354 .172
Creativity .271 .193
Flexibility .044 .126
Perceived Risk .306 .085
Information Asymmetry .020 .060
Illusion of Control .405 .295

 z-score
 Difference (Significance)

Social Network -.084 .60(NS)
Optimism .182 1.30(.09)
Creativity .078 .56(NS)
Flexibility -.082 .59(NS)
Perceived Risk .220 1.57(.06)
Information Asymmetry -.040 .29(NS)
Illusion of Control .110 .79(NS)