IUP Publications Online
Home About IUP Magazines Journals Books Archives
     
Recommend    |    Subscriber Services    |    Feedback    |     Subscribe Online
 
The IUP Journal of Entrepreneurship Development :
Risk Perception and Entrepreneurial Career Choice: A Comparative Analysis of First Generation Entrepreneursand Service Holders
:
:
:
:
:
:
:
:
:
 
 
 
 
 
 
 
 

The process of choosing one’s career such as whether to become an entrepreneur or otherwise, has been subject to a lot of research, especially in the area of decision making. The Theory of Planned Behavior (TPB) (Ajzen, 1991) has perhaps been the single most referred approach in understanding such decisions. However, there have been numerous cases where this does not hold good such as for the people who do not consciously intend to become an entrepreneur but find themselves becoming an ‘accidental entrepreneur’ (Fitzsimmons and Douglas, 2010). The current paper attempts to incorporate the idea of risk perception of a person as an explanation of such choices. The study introduced the DOSPERT scale (Weber et al., 2002) to a set of first generation entrepreneurs (test group) and service holder (control group), to understand if there is any significant difference between the two groups, based on which some out of sample cases can be identified. The results of the study confirm significant difference through logistic regression modeling and was able to identify 66% cases correctly based on only six generic risk perception variables and a few other demographic variables. Thus, it is established that generic risk perception may be added to the TPB model to significantly improve the model in accurately identifying entrepreneurial career choices.

 
 
 

Several studies on entrepreneurship have tried to relate various factors which precede the decision-making process, leading up to the choice to pursue an entrepreneurial venture. In other words, they have tried to answer the question—what results in entrepreneurship behavior, with the intention of modifying the input variable so as to get the desirable output. Entrepreneurship behavior is the act or the process of setting up and starting the operation of a newly established venture. Unlike certain individual actions, entrepreneurship behavior is not one single act, but is a series of actions taken by the entrepreneur in an active and coherent manner, such that each of the actions is a follow-up of its previous action. Based on the action phase model of Gollwitzer and Bargh (1996), Ilouga et al. (2014) refer to a pre-decisional phase, pre-action phase, action phase and post-action phase as components of entrepreneurial behavior. In fact, once the intention has been formulated the entrepreneur must undertake the final three phases for the behavior to take place. Against this backdrop, the present paper attempts to understand the risk perception of the first generation entrepreneurs vis-à-vis service holders.