Parental role models and the decision to become self-employed: The moderating effect of personality

Small Business Economics, Jan 2012

This paper uses social learning theory to examine the influence of parental role models in entrepreneurial families. We distinguish between paternal and maternal role models and investigate how their influence on offsprings’ decision to become self-employed is moderated by personality, specifically the offsprings’ openness. We use data on 461 alumni from eight German universities. Our results show not only that the presence of a parental role model increases the likelihood that individuals become self-employed, but that the influence of role models also depends on the individual’s openness. We discuss the implications of our findings for research on entrepreneurial families, role models, and the psychology of the entrepreneur.

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Parental role models and the decision to become self-employed: The moderating effect of personality

Simone Chlosta 0 1 2 3 Holger Patzelt 0 1 2 3 Sabine B. Klein 0 1 2 3 Christian Dormann 0 1 2 3 0 S. B. Klein WHU Otto Beisheim School of Management, INTES Institute of Family Business , Burgplatz 2, 56179 Vallendar, Germany 1 H. Patzelt Max-Planck-Institute of Economics , Kahlaische Strasse 10, 07745 Jena, Germany 2 S. Chlosta (&) European Business School, European Family Business Center , Rheingau Palais, Soehnleinstrasse 8/D, 65201 Wiesbaden, Germany 3 C. Dormann Department for Work , Organizational, and Economic Psychology, Johannes Gutenberg University Mainz , Wallstrasse 3, 55099 Mainz, Germany This paper uses social learning theory to examine the influence of parental role models in entrepreneurial families. We distinguish between paternal and maternal role models and investigate how their influence on offsprings' decision to become self-employed is moderated by personality, specifically the offsprings' openness. We use data on 461 alumni from eight German universities. Our results show not only that the presence of a parental role model increases the likelihood that individuals become self-employed, but that the influence of role models also depends on the individual's openness. We discuss the implications of our findings for research on entrepreneurial families, role models, and the psychology of the entrepreneur. 1 Introduction Why individuals become self-employed has been a central question of entrepreneurship research since the very beginning of the field. This interest is due to the relevance of entrepreneurial activities to nearly all economies around the globe, and it explains why entrepreneurial families have been an important topic of study for both entrepreneurship and family business scholars. We define entrepreneurial families as those with a heritage of entrepreneurship and business ownership. This includes at least one self-employed parent owning and managing a business within an entrepreneurial family. Growing up in an entrepreneurial family offers the opportunity to learn from the self-employed parent serving as a role model and getting a realistic job preview of self-employment. Two explanations from very different angles dominate the discussion on why an individual becomes self-employed: a personalitydriven explanation and a behavioral explanation. While the personality-driven explanation stresses that individuals with certain traits have a higher probability of becoming self-employed (Rauch and Frese 2007; Zhao and Seibert 2006; Barrick and Mount 1991), the behavioral explanation highlights the fact that individuals tend to learn from others who are role models for them (Mancuso 1974; Bandura 1986). Researchers have found that early exposure to parental role models in the family business will affect the childrens attitude towards becoming self-employed themselves (Dyer et al. 1994; Carr and Sequeira 2007) and that growing up in a family with self-employed family members may lead to a general probusiness attitude of the children (Dunn and Holtz-Eakin 2000). Finally, children in an entrepreneurial family can benefit from being mentored by their parents and by accessing the business networks of their parents (Kim et al. 2006; White et al. 2007). While the above-cited and other studies demonstrate that role models in entrepreneurial families are generally influential for the motivation of their offspring to become self-employed, this evidence has not always been unambiguous. For instance, some studies have found that parental role models do not stimulate individuals to become entrepreneurs (Kets de Vries 1977; Brenner et al. 1991; Kim et al. 2006; Ghazali et al. 1995), and in many entrepreneurial families children do not take over the businesses of their parents (Kepner 1983; Rodriguez et al. 1999). Thus, there appears to be considerable variance in the effect of parental role models on individuals decisions to enter self-employment. In this paper we provide an explanation, so far unexplored, for why parental role models in some entrepreneurial families stimulate self-employment among their offspring, while in other families they do not. We draw on social learning theory (Bandura 1986), which suggests that individuals learn by observing the actions of their parents and transferring these cues into internal codes. These internal codes form a part of the offsprings mental models and determine their decision policies (Bandura 1986; Rosenthal and Bandura 1978; Rotter et al. 1972; Bandura and Walters 1963), including their later occupational choice (Schulenberg et al. 1984; Scherer et al. 1989) and the decision to become self-employed (Schr oder and Schmitt-Rodermund 2006). However, we also know that personality plays a role in decision-making. In particular, openness appears to be a key personality trait in predicting self-employment decisions. Openness refers to the tendency to be creative, innovative, untraditional (Zhao and Seibert 2006), and free from conformity and securit (...truncated)


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Simone Chlosta, Holger Patzelt, Sabine B. Klein, Christian Dormann. Parental role models and the decision to become self-employed: The moderating effect of personality, Small Business Economics, 2012, pp. 121-138, Volume 38, Issue 1, DOI: 10.1007/s11187-010-9270-y