Entrepreneurial Self-Efficacy Essay

Does entrepreneurial self-efficacy distinguish entrepreneurs from managers? Self-efficacy is an individual’s cognitive estimate of his or her â€Å"capabilities to mobilize the motivation, cognitive resources and courses of action needed to exercise control over events in their lives† (Wood & Bandura 1989). One important effect of self-efficacy is on the chice of behavior settings, where individuals tend to choose situations in which they anticipate high personal control but avoid situations in which they anticipate low control. Starting one’s own business is often described as purposive and intentional career choice. Although there can be a wide variety of contextual as well as individual factors that influence the entrepreneurial choice, the role of entrepreneurial self-efficacy has been emphasized as a key antecedent . Bandura (1977b. 1986) distinguished his social learning theory from many traditional psychological theories by emphasizing reciprocal causation among cognition, behavior and environment, where we found that the notion of reciprocal causation is important in understanding self-efficacy and its determinants and effects. One of the researches conducted on the effects of self-efficacy found that self-efficacy is the most effective predictor of performance. This study had shown that people with high self-efficacy have more intrinsic interest in the tasks, are more willing to expend their effort and show more persistence in the face of obstacles. As a result, they perform more effectively. Performance and performance accomplishments are also considered to be determinants of self-efficacy. And the self-efficacy affects performance through interest, motivation and perseverance, whereas performance provides feedback information on the basis of which self-efficacy is further evaluated and modified. Concerning the Expectancy theory and self-efficacy we find that self-efficacy is about the execution of action, not its outcome. It is about all the internal factors that bear influence on the execution of actions, where a low self-efficacy may mean a belief that one cannot execute the behavior because one does n ot have the required cognitive and emotional abilities to mobilize effort. Whereas self-efficacy is a broader concept than effort-performance expectancy, it is considered more specific than locus of control, belief-based personality variable. Self-efficacy can be affected by two important distinctions: First: locus of control measures not only behavioral but also outcome control, while sel-efficacy concerns only behavioral control. Secondly: internal versus external locus of control is generalized construct covering a variety of situations, while self-efficacy is task specific, examining the individual’s conviction that he or she can perform a specific task at a specific level of expertise. Bandaru (1982) maintained that although self-efficacy is task specific, it can also be generative, that is self-efficacy with respect to one task may be generalized to another task. Regardless of the specificity of the task domain, assessment of efficacy has to be at the specific task level to maintain its predictive power. According to Gist (1987 p.481), he reflected that â€Å"it would be more promising to generalize self-efficacy perceptions by aggregating across a number of related but domain specific measures than by attempting to devise a broad omnibus test†. One of the most important ways of measuring self-efficacy of a broader domain is to develop a conceptual framework of task requirements on the basis of which self-efficacy of a domain is aggregated from self-efficacy of various constituent sub domains. The self-efficacy perspective is highly appropriate for the study of the entrepreneur. Where the entrepreneur self-efficacy (ESE) refers to the strength of an individual’s beliefs that he or she is capable of successfully performing the roles and tasks of an entrepreneur. For its effect on behavior choice and performance, self-efficacy is widely claimed to have greater predictive power than constructs that lack task-specificity. This implies that ESE should distinguish entrepreneurs better than do global personality traits. According to several authors and researchers, there are six entrepreneurial roles were identified, which are: innovator, risk taker and bearer, executive manager, relation builder, risk reducer and goal achiever.