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1 WE DO WHAT WE ARE: ENTREPRENEURSHIP AS THE EXPRESSION OF VALUES AND IDENTITY MICHAEL CONGER University of Colorado, Boulder Leeds School of Business 995 Regent Drive, 419 UCB Boulder, CO, 80309 Tel: (303) 476-3657 e-mail: [email protected] JEFFREY G. YORK University of Colorado, Boulder Leeds School of Business 995 Regent Drive, 419 UCB Boulder, CO, 80309 Tel: (303) 492-3783 e-mail: [email protected] TYLER WRY University of Pennsylvania Wharton School of Business 2031 SHDH 3620 Locust Walk Philadelphia, PA, 19104 Tel: (215) 573-3399 Fax: (215) 898-0410 [email protected] Working Paper: Please do not cite or share without permission We gratefully acknowledge the support of the Robert H. and Beverly A. Deming Center for Entrepreneurship at the University of Colorado, Boulder for this research and the assistance of the Deming Center staff: Patty Graff, Paul Jerde, and Jody Reale.

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WE DO WHAT WE ARE: ENTREPRENEURSHIP AS THE EXPRESSION OF VALUES AND IDENTITY

MICHAEL CONGER University of Colorado, Boulder

Leeds School of Business 995 Regent Drive, 419 UCB

Boulder, CO, 80309 Tel: (303) 476-3657

e-mail: [email protected]

JEFFREY G. YORK University of Colorado, Boulder

Leeds School of Business 995 Regent Drive, 419 UCB

Boulder, CO, 80309 Tel: (303) 492-3783

e-mail: [email protected]

TYLER WRY University of Pennsylvania

Wharton School of Business 2031 SHDH

3620 Locust Walk Philadelphia, PA, 19104

Tel: (215) 573-3399 Fax: (215) 898-0410

[email protected]  

 

Working Paper: Please do not cite or share without permission

We gratefully acknowledge the support of the Robert H. and Beverly A. Deming Center for Entrepreneurship at the University of Colorado, Boulder for this research and the assistance of

the Deming Center staff: Patty Graff, Paul Jerde, and Jody Reale.

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WE DO WHAT WE ARE: ENTREPRENEURSHIP AS THE EXPRESSION OF VALUES AND IDENTITY

ABSTRACT

The creation of social and/or environmental benefits by entrepreneurs has emerged as an area of

scholarly interest, yet we have little understanding of why some entrepreneurs pursue these

goals. Building on a growing literature that uses theories of identity to study entrepreneurial

intention and action, we build and test a model of value-expressive person identities and social

and economic role identities. Our results suggest that value-expressive person identities affect

the kinds of goals entrepreneurs set for their ventures, both directly and indirectly, through the

alignment of important, complementary role identities in the entrepreneur’s self-concept. These

findings extend current understanding of the role of identity in entrepreneurship and provide a

more fine-grained explanation of why entrepreneurs pursue non-economic goals.

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WE DO WHAT WE ARE: ENTREPRENEURSHIP AS THE EXPRESSION OF VALUES AND IDENTITY

To know who you are is to be oriented in moral space, a space in which questions arise about what is good and bad, what is worth doing and what is not, what has meaning and importance for you and what is trivial and secondary.

- Taylor (1989: 27)

Entrepreneurship scholars have long focused on why some individuals become

entrepreneurs and others do not (Amit, Muller, & Cockburn, 1995; Baker & Nelson, 2005;

Baron, 2004; Busenitz, 1999; Cooper, Woo, & Dunkelberg, 1988; Evans & Leighton, 1989;

Herron & Sapienza, 1992; Kolvereid, 1996; Nicolaou, Shane, Cherkas, Hunkin, & Spector,

2008; Shane, 2000; Stewart & Roth, 2001). Only recently have scholars begun to focus on the

type of entrepreneurs individuals chose to become (Fauchart & Gruber, 2011) and to examine

social entrepreneurs who seek to utilize market mechanisms to address social problems (M. T.

Dacin, P. A. Dacin, & Tracey, 2011; Miller, Grimes, McMullen, & Vogus, 2012). However, we

have little theory, and even less empirical evidence, of why some entrepreneurs are content to

pursue economic profitability while others incorporate broader social or environmental concerns

into the fabric of their ventures (Miller et al., 2012; York & Venkataraman, 2010). In this study

we build on a growing literature that uses theories of identity to study entrepreneurial intention

and action. This literature examines the venturing process as a means through which

entrepreneurs seeks expression and confirmation of their self-concept (Cardon, Wincent, Singh,

& Drnovsek, 2009; Farmer, Yao, & Kung-Mcintyre, 2011; Fauchart & Gruber, 2011; Hoang &

Gimeno, 2010; Murnieks & Mosakowski, 2007; Murnieks, Mosakowski, & Cardon, 2012; Navis

& Glynn, 2011; Shepherd & Haynie, 2009). These formative works suggest that the

entrepreneur’s concept of who she is, as both an individual and a social actor, may have a

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profound effect on the entrepreneurial process.

However, entrepreneurship scholars have only scratched the surface of what identity theory

has to offer. Prior studies have focused almost exclusively on role identity, limiting their

examination to the founder role (But see Fauchart & Gruber, 2011). However, identity theorists

commonly recognize another important source of identity that has been ignored in prior studies.

Person identities are based on culturally recognized characteristics, internalized by the

individual, that make him or her a unique individual (Burke, 2004; Burke & Stets, 2009).

Examples include characteristics such as how sociable/likeable (Stets & Cast, 2007), moral

(Stets, Carter, Harrod, Cerven, & Abrutyn, 2008), or environmentally conscious (Stets & Biga,

2003) a person is, or the person’s personal values (Gecas, 2000; Hitlin, 2003, 2011). Also absent

in prior studies is a consideration of the multiple identities in the entrepreneur’s self-concept and

how the relationships among them affect emotions, behavior, and social interactions; prior work

has focused almost exclusively on the entrepreneur role however, identity theorists have long

recognized that the self is comprised of a myriad of identities (Burke, 2003, 2006; James, 1890).

These overlooked aspects of identity are critical because entrepreneurship makes significant

demands on the time, resources, attention, and emotions of the entrepreneur (J. W. Carland, Hoy,

Boulton, & J. A. C. Carland, 1984) both as a firm founder and across other aspects of their life.

In addition, key characteristics of entrepreneurs, including their values and beliefs about who

they are as an individual and as a social actor, are imprinted on the ventures they create (Bettis &

Prahalad, 1995; Boeker, 1989). In sum, who the entrepreneur is likely shapes what the venture

becomes; prior work that considers only the founder role identity is unlikely to capture important

personal and holistic aspects of the self that impact the entrepreneurial process.

In the present study, we suggest that the intersection of identity theory (Burke, 1980;

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Stryker, 1968, 1968) and values theory (Rokeach, 1973; Schwartz, 1992, 1994) enhances our

understanding of how entrepreneurs views of themselves as unique individuals, comprised of a

distinctive set of values-based person identities, shapes the goals they pursue through their

ventures. Person identities are particularly well suited for this purpose since they are thought to

form the essential core of the self (Burke, 2004) and are directly related to values (Gecas, 2000;

Hitlin, 2003). Person identities also serve as a guiding standard for other identity commitments

(Burke, 2004; Deaux, 1992; Reid & Deaux, 1996). Their verification, both through direct action

and through other identities, provides feelings of authenticity (Burke & Stets, 2009; Gecas,

2000). For this reason, person identities may help us to better understand how entrepreneurs

organize the multiple role identities they hold to reinforce their commitment to value-expressive

venture goals.

By examining the role of person identity in entrepreneurship, we contribute to the literature

on social entrepreneurship, as well as identity and entrepreneurship in several ways. First, we

seek to introduce the concept of person identity into the entrepreneurship context using an

established theoretical model of values (Schwartz, 1992, 1994). Second, we expand this model to

show the complimentary relationships between person identities and the role-based identities in

the entrepreneur’s self-concept. Third, our empirical results demonstrate: a) how entrepreneurs’

value-expressive person identities affect the balance of social and economic goals they set for

their ventures, and b) the mediating function of role identities in the relationship between person

identity and goals.

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THEORY & HYPOTHESES

Human beings are driven to find meaning in their actions and in their very existence. This

drive is fueled by the self-concept, which facilitates self-reflection, meaningful interaction with

one’s environment, and ultimately, survival (McCall & Simmons, 1978; Mead, 1934). The self is

comprised of multiple identities that represent the meanings of different aspects of the individual

(Burke, 1991; Burke & Stets, 2009; Thoits, 1983). Identity theorists commonly recognize three

important bases of identities: individualized characteristics, roles within society, and alignment

with social groups. Person identities are based on characteristics that individuals internalize and

use to define themselves as unique individuals (Burke, 2004; Stets, 1995; Stets & Burke, 1994).

For example, individual may see him or herself as a moral person, a powerful person, a creative

person, an engaging or pleasant person, a devout person, a socially conscious person, and an

independent person. Role identities are based on the various social positions that individuals hold

within the social structure (Burke, 1980; McCall & Simmons, 1978; Stryker, 1980; Thoits &

Virshup, 1997). For example, an individual may hold the identities of entrepreneur,

environmentalist, sister, mother, social activist, guitarist, and baseball fan, all based on roles she

occupies in the various social structures in which she interacts. Social identities are based on

individuals’ identification with various social groups (Abrams & Hogg, 1990; Hogg & Abrams,

1988). For example, individuals might form their social identities based on being members of

their genders, races or ethnicities, religions, nationalities, their families, the schools they

attended, the companies they work for, and civic organizations to which they belong.

Although they have different bases person, role, and social identities operate in a very

similar manner. Each of these identity types exist within a structure of symbolic interactionism

(Cooley, 1902; James, 1890; Mead, 1934; Stryker, 1968, 1980) and are subject to a system of

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perceptual control (Burke, 1980, 1991; Powers, 1973). The symbolic interactionist perspective

views the self and society as reflectively linked (James, 1890; Mead, 1934). Individuals hold

multiple identities with societally determined meanings and, in turn, contribute to those

meanings as they enact the identities (Stryker, 1980). As a result of this recursive process,

identities have meanings that are commonly understood by both the individual and by others

with whom she interacts and that can be used as identity standards within various social

interactions (Stryker, 1980).

Identity standards are central to the perceptual control system described by Burke’s Identity

Control Theory (Burke, 1991, 1996; Cast & Burke, 2002). In this system, identity standards are

used as a benchmark against which individuals compare their perceptions of the social

interactions in which they engage. Like a thermostat, constantly comparing a set temperature

standard to a temperature measurement, the individual takes action to reduce differences between

their identity standards and their perceptions. This often means adjusting their own behavior but

can also mean acting to alter their environment or the behavior of others (Burke, 1991). When

individuals successfully remove the discrepancies between standards and perceptions, their

identities are verified.

Confirmation or disconfirmation of the self-concept through identity management and

identity verifying behavior has a powerful effect on self-esteem and well-being (Cast & Burke,

2002; Cast, Stets, & Burke, 1999). Successful verification of one’s identities leads to increased

feelings of self-esteem, self-efficacy, and authenticity (Gecas, 2000). Conversely, failure to

verify leads to anxiety and even depression (Burke, 1991, 1996; Gecas, 2000; Kiecolt, 2000).

For these reasons, identities are believed to significantly affect the goals individuals set and

pursue.

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In this study, we examine the identity structures of entrepreneurs to explain the

heterogeneity in emphasis on economic and social goals they pursue through their ventures. We

offer and test a theoretical model in which we argue that entrepreneurs’ person identities affect

venture goals both directly and through the alignment of complimentary role identities. We

illustrate this model in Figure 1. We begin with a discussion of person identities.

--------------------------------------------------- Insert Figure 1 about here

--------------------------------------------------- Person Identities

Person identities are based on culturally recognized characteristics, that are internalized by

an individual, and make him/her unique (Burke & Stets, 2009). The simplest example of a person

identity is an individual’s name. This characteristic is uniquely held by the individual and is also

recognized and understood by others with whom the individual interacts. Despite their basis in

the characteristics of the individual, person identities differ from personality traits. Person

identities are not habitual predispositions to act in a particular way but are meaning standards by

which perceptions of self-confirmation are regulated and maintained (Burke, 2004; Hitlin, 2003).

For example, a person may have the trait of conscientiousness and the person identity of self-

disciplined person. Both the trait and identity may be complimentary and together contribute to

the person keeping a tidy desk or being punctual. However, the trait is a predisposition toward

paying attention to detail or acting dutifully (“I like order”) whereas the identity is a standard by

which the individual evaluates him or herself in a social interaction (“What does it mean to be a

self-disciplined person in this situation, and am I being one?”). The identity involves a meaning

standard relevant to a social situation and self-reflective comparison to that standard where the

trait does not.

Person identities share the essential structural and perceptual control functions of role and

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social identities. Person identities have meanings that are derived from symbolic interaction;

their verification relies on these meanings being recognized and understood by both the

individual and others with whom the individual interacts (Burke, 2004; Burke & Stets, 2009). In

this way, person identities provide structure for self-verification and social relationships. Person

identities are also subject to the perceptual control process; they comprise the individual’s

concept of him or herself as a unique and distinctive person and will be used as the standard to

which his or her perceptions of relevant events are compared (Burke, 1991).

Because of their basis in qualities or characteristics of the unique individual person

identities differ from role and social identities in several important ways. First, person identities

serve as standards of meaning that persist across varied situations and that the individual and

others can rely upon to understand who the individual is and who others are in relationship to

him or her (Burke, 2004; Burke & Stets, 2009). Since person identities are trans-situational, they

are always active and are constantly subject to verification.1 Verification is achieved through

identity-consistent action across situations and causes feelings of authenticity - that one is being

one’s true self. Second, person identities are presented more often, more consistently, and to

more people than role or social identities; consequently, they tend to be of high importance and

salience in the individual’s self-concept and will likely be favored over other identity types

(Burke, 2004).2 Finally, person identities may serve as master identities, setting a standard for

regulation of multiple identities through the alignment of role commitments and group

affiliations (Burke & Stets, 2009; Reid & Deaux, 1996; Stets, 1995).

Values As Person Identities

1 This view differs from that of Social Identity Theory in the psychology literature which suggests that, as group-based identities are activated, individuating personal identities are suppressed (Hogg, 2006; Hogg, Terry, & White, 1995). 2 The reverse may be true in more closed societies where individuals are less able to choose or change their roles and group memberships (Burke, 2004).

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Identity scholars have examined many individual characteristics that form the bases for

various person identities (Burke, 2004; Stets, 1995; Stets & Biga, 2003; Stets & Burke, 1994;

Stets & Carter, 2006; Stets et al., 2008; Stets & Cast, 2007) including the individual’s personal

values (Gecas, 2000; Hitlin, 2003, 2011). Prince-Gibson & Schwartz define values as “…trans

situational goals, varying in importance, that serve as guiding principles in the life of a person or

group” (1998: 49). Values, like identities, are active across situations, organized hierarchically

relative to one another and provide overarching standards for behavior (Rokeach, 1973). Similar

to identities, values are individually held and prioritized but their meanings are collectively

understood (Prince-Gibson & Schwartz, 1998; Schwartz, 1992, 1994, 1996). In other words,

individuals are heterogeneous in their prioritization of values, but homogeneous in their

understanding of what values mean and how values relate to one another.

Values are particularly promising as a means of studying identities and their effect on

entrepreneurial goals (Hemingway, 2005). Values can be identified and measured using

established scales (Hitlin, 2003; Schwartz, 1992, 1994). Although values are not strictly

identities, the way they are expressed in the self-concept, as guiding principles of the person’s

life, allows them to effectively function as person identities (Burke, 2004; Burke & Stets, 2009;

Gecas, 2000; Hitlin, 2003). For example, individuals who hold the value of forgiveness as a

fundamental guiding principle in their lives will also think of themselves as “a forgiving person”

and use this identity as a standard for self-evaluation in various social interactions.

Building on early scale development work by Rokeach (1973), Schwartz has developed a

widely accepted model for classifying and measuring values (Schwartz, 1992, 1994). Schwartz’s

model has been extensively tested and found to be valid across cultures and countries (Prince-

Gibson & Schwartz, 1998). In Schwart’s model, values with similar motivational goals are

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grouped together in compatible type groupings while those with dissimilar goals are grouped as

conflicting value types. For example, values with the goal of stimulation or excitement will be

relatively more compatible with values expressing self-direction and relatively less compatible

with values expressing security or tradition (Schwartz, 1992). The ten types Schwartz identifies

and their relationships are illustrated in Figure 2. In this format, the two higher-order dimensions

of value structure, conservation vs. openness to change and self-enhancement vs. self-

transcendence, can be easily seen. The self-enhancement vs. self-transcendence dimension is

defined as “…the extent to which [the values] motivate people to enhance their own personal

interests (even at the expense of others) versus the extent to which they motivate people to

transcend selfish concerns and promote the welfare of others, close and distant, and of nature”

(Schwartz, 1992: 43). Because we seek to examine entrepreneurs’ values as a type of person

identity that will affect the economic and social goals they set for their ventures, we focus on the

prioritization of value identities along this dimension of Schwartz’s model.

--------------------------------------------------- Insert Figure 2 about here

--------------------------------------------------- Self-enhancing values such as social power, pleasure, ambition, and wealth are

complementary and represent motivational goals to benefit only the entrepreneur. We theorize

that person identities expressing self-enhancing values will positively affect entrepreneurs’ focus

on economic and professional success, and that this focus will be reflected in a greater emphasis

on pursuing economic goals through their ventures. We view individuals for whom self-

enhancing identities are dominant as economically-oriented entrepreneurs, defined as

commercial entrepreneurs focused primarily on creating economic profit for themselves and their

investors.

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Hypothesis 1: The greater the importance of person identities in the entrepreneur’s self-concept that are based on self-enhancing values the greater the prominence of economic goals in the venture.

Self-transcending values such as social justice, equality, helpfulness, forgiveness, and

protecting the environment represent motivational goals to benefit entities beyond the

entrepreneur such as vulnerable or marginalized people, natural ecosystems, and society at large

(Miller et al., 2012). Because strong person identities expressing self-transcending values

increase the entrepreneur’s focus on the welfare of others and on the creation of societal and/or

environmental value, this focus should be reflected in a greater emphasis on pursuing social

goals through entrepreneurial action.

The growing literature on social and environmental entrepreneurship focuses on this

process, by examining entrepreneurs with a sustained commitment to addressing social and

environmental problems through the venturing process (Alvord, Brown, & Letts, 2004; Austin,

Stevenson, & Wei-Skillern, 2006; M. T. Dacin et al., 2011; P. A. Dacin, M. T. Dacin, & Matear,

2010; Hall, Daneke, & Lenox, 2010; Mair & Marti, 2009; Peredo & Chrisman, 2006; Short,

Ketchen, Shook, & Ireland, 2010; Zahra, Rawhouser, Bhawe, Neubaum, & Hayton, 2008).

According to prior studies, social and environmental entrepreneurs are not be content to start a

“traditional” business, opting instead to create a venture with an explicit mission to serve the

public good such as renewable energy (Meek, Pacheco, & York, 2010; Sine & B. H. Lee, 2009)

or microfinance (Battilana & Dorado, 2010). For such entrepreneurs, the goal of the business is

directly linked to social or environmental benefits. We view individuals for whom self-

transcending identities are dominant as socially-oriented entrepreneurs, defined as social

entrepreneurs with an emphasis on creating social value for a broad set of stakeholders beyond

investors and employees.

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Hypothesis 2: The greater the importance of person identities in the entrepreneur’s self-concept that are based on self-transcending values the greater the prominence of social goals in the venture.

While we expect that entrepreneurs’ consideration of economic and social goals will be

dependent upon values-indicative person identities, we also recognize that entrepreneurs can and

do pursue multiple goals simultaneously (Cyert & March, 1963). As scholarship in the area of

social entrepreneurship has grown, so has the concept of the hybrid or double/triple bottom line

venture wherein the focus of value creation is on generating “total wealth” (Zahra et al., 2008:

519) defined as the simultaneous pursuit of both economic and social/environmental goals.

According this perspective, it is not only the trade-off between social or economic goals that an

entrepreneur must consider but also the appropriate balance of the two that will allow the venture

to pursue both sustainably (M. T. Dacin et al., 2011). Because social entrepreneurs hope to make

a lasting impact and continue to address social and environmental problems over the long run,

they should be more likely to pursue balanced goals than the typical commercial entrepreneur.

This is because while a commercial enterprise can (arguably) persist over time without

incorporating explicitly social or environmental goals, entrepreneurs seeking to address social or

environmental issues through a new venture cannot survive without also pursuing economic

sustainability. Thus, entrepreneurs’ person identities expressing self-transcending values should

positively affect the balance between economic and social goals while those expressing self-

enhancing values should not.

Hypothesis 3: The greater the importance of person identities in the entrepreneur’s self-concept that are based on self-enhancing values the greater the balance of social and economic goals in the venture.

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The Mediating Function of Role Identities

Thus far we have argued that person identities have a direct effect on entrepreneurial goals.

Identity scholars have also shown a similar relationship between person identities and role

identities (Hitlin, 2003; Reid & Deaux, 1996; Stets, 1995). Drawing on this work, we now

examine the function of complimentary role identities in the entrepreneurial process.

Recall that both person and role identities operate within a system of perceptual control;

each identity type allows individuals to analyze how social interactions either confirm, or

disconfirm, to their unique being (person identity) or their social position (role identity). Within

this system, multiple identities may be activated and regulated simultaneously, organized around

common meaning structures (Burke & Stets, 2009; Stets, 1995). Individuals manage their

identities, and the social interactions in which identities are enacted, to minimize conflicts

between identity perceptions and meanings and to facilitate identity verification; this is true

across identity types (Hitlin, 2003; Reid & Deaux, 1996; Stets, 1995). When multiple person and

role identities an individual holds can be verified simultaneously, they reinforce each other and

strengthen the self-concept (Burke, 2004; Burke & Stets, 2009; Stets, 1995). The individual,

therefore, seeks to hold person and role identities that can be verified together and engages in

interactions and activities that will allow for optimal verification of them (Cast & Burke, 2002;

James, 1890).

As discussed above, person identities are more likely to achieve master status because they

are trans-situational and more frequently enacted, whereas role identities are generally aligned to

a specific social context. Therefore, individuals may enact important personal identities through

complementary role identities. For example, in a study of students’ role and person identities,

Hitlin (2003) found a significant relationship between students’ value-based person identities and

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their commitment to a “volunteer” role identity. These findings suggest that person identities

form a “core of the self” around which various roles are organized (Hitlin, 2003: 124). Person

identities, are stable and always present; their consistent influence is expressed through roles the

individual enacts in various social interactions.

Entrepreneurs are likely subject to these same processes. Specifically, entrepreneurs’ person

identities will serve as master identities that shape the goals of their ventures (H1-H3) but these

master identities will also form the basis for common identity meaning standards that may be

expressed through role identities.

Entrepreneurs, like all individuals, engage in role-appropriate behaviors in order to verify

their role identities and produce feelings of self-efficacy (Cardon et al., 2009). Person identities

are simultaneously active in role relationships, and the individual will regulate both person and

role identities simultaneously, bringing them into alignment based on common meanings. Thus,

entrepreneurs’ self-enhancing and self-transcending person identities will be related to socially-

oriented and economically-oriented role identities, just as they are to social and economic goals.

Furthermore, the effect of these person identities on goals will take place through entrepreneurs

enacting roles that confirm their person identity. For example, the entrepreneur with dominant

person identities based on self-enhancing values should place greater importance on role

identities such as “business person” or “professional person” which have meaning standards

linked to the pursuit of economic goals, while entrepreneurs with dominant self-transcending

values may place importance on roles such as “activist” or “citizen”. Therefore, role identities

will, at least partially, mediate the relationship between role identities and venture goals.

Hypothesis 4: Person identities in the entrepreneur’s self-concept will affect venture goals indirectly through the presence of complementary role identities in the entrepreneur’s self-concept.

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DATA AND METHODS

Sample and Data Collection

To test our hypotheses administered an online survey to 312 entrepreneurs associated with

an entrepreneurship center at a large, state-funded university. A personalized email invitation

was sent to 2,133 recipients of the center’s opt-in mailing list. This group includes entrepreneurs

nearby areas as well as well as other people formally or informally connected to the center.

Email tracking software showed that 420 recipients did not receive the email due to

unknown/undeliverable addresses, server-level blocking, or other errors. We estimate that as

many as 1,713 received at least one invitation to participate in the survey. In total, 440 fully or

partially completed surveys were received. Since our study is focused on the motivations and

perceptions of entrepreneurs, we removed all cases where the respondent indicated they had no

entrepreneurial experience, nor any intention to start a firm in the foreseeable future. This

resulted in a total usable sample size of 312 individual entrepreneurs and a response rate of just

over 21.5%. The entrepreneurship center staff estimates there are approximately 400 known

entrepreneurs connected to the center; therefore, we feel confident that our response adequately

represents the intended potential sampling frame.

Our respondents were nascent, active, or recently active entrepreneurs. Of these, 8% were

in the process of starting a venture, 41% had started one venture sometime in the last 10 years,

and 43% had started two or more ventures in that time. In terms of gender, 75% of respondents

were male. The majority, 82%, identified their race as white. Respondents self-identified as

African-American, Asian, and Hispanic at 3%, 6%, and 6%, respectively. The age range of

respondents varied; 19% were under the age of 35, 35% between 35 and 50, 33% between 51

and 65, and 9% over 65. Approximately 16% lived in a major city, 14% in a large suburban area,

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39% in a medium-sized city or adjoining suburbs, 20% in a small city, and 9% in a small town or

rural area.

The ventures the respondents founded were typically small in size. Of the ventures

reported, 36% had less than 10 employees, 34% between 10 and 49, 6% between 50 and 99.

Only 5% employed 100 or more people. In terms of firm scope, 42% of the firms operated

locally, 29% at the state level, 40% nationally, and 43% internationally. Several firms reported

operating across more than one of these geographic designations.

Measures

Unless otherwise noted, all multi-point, scales were presented to respondents using a

continuous drag-and-drop style slider control within the web-based survey. To help reduce the

possibility of common method variance due to item framing effects, display order of all items in

the survey was automatically randomized in real time as the survey was loaded for each

respondent.

Dependent Variables: Goals. These variables appear in this text and in tables as

SocialGoals and EconomicGoals. Respondents were given brief, precise definitions of “social

value” and “economic value”. They were then asked to independently rate the importance of

each to the central mission of the venture they founded on a five-point response scale with

responses ranging from 0 (not at all important) to 4 (extremely important). These values were

recoded to a 1-5 scale for analysis. We also constructed a variable representing the relative

balance of emphasis on social vs. economic goals. An absolute value of the difference between

SocialGoals and EconomicGoals was calculated and reversed so higher coefficients represent

more balance (i.e. more similar scores between social and economic goals.) This variable appears

in this text and in tables as GoalBalance.

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Independent Variables: Person Identities. Following Hitlin (2003), we determined the

prioritization of value-expressive person identities drawing from Schwartz’s (1992, 1994, 1996)

values scale. We included 17 items from Schwartz’s scale related to the self-enhancement vs.

self-transcendence dimension. Following Schwartz, we asked respondents to rate each value on

an eight point scale from -1, representing a value that is “against my principles,” to 7,

representing a value that is “a guiding principle in my life.” Each item was presented with an

accompanying descriptive statement to make clear the exact meaning of the value statement. The

individual items were a) broadmindedness, b) equality, c) forgiveness, d) helpfulness, e)

protecting the environment, f) social justice, g) world of beauty, h) world at peace, i) honesty, j)

wisdom, k) authority, l) social power, m) pleasure, n) enjoying life, o) ambition, p) success, and

q) wealth.

Again, following Hitlin (2003) we conducted a factor analysis with varimax rotation to

discover the loading of these items and inform the construction of latent values variables. We

also computed the interterm correlations for each of these factor groupings. The results of our

factor analysis and corresponding Cronbach alpha coefficients are reported in Table 1. We

observed four potential factors emerging from this analysis that conceptually support our

theorized values groupings. Although eigenvalues for factors 3 and 4 did not exceed unity and

alpha coefficients for factors 2 and 4 did not meet the 0.7 threshold, the pattern of item loadings

in all four factors did correspond with the category groupings in Schwartz’s schema (see Figure

2).

Because our goal was to analyze value-expressive person identities categorized according

to Schwartz’s model along the self-enhancement vs. self-transcendence dimension, we chose to

use our theorized groupings to construct our latent measures. We constructed two variables using

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averages of related values variables, based on our theorized groupings of self-transcending

values (items a-g above, loading on factor 1) and self-enhancing values (items k-p above,

combing factors 2-4). These variables appear in this text and in tables as Self-Transcending

(alpha=0.71) and Self-Enhancing (alpha=0.87). A few items (honesty, wisdom, and wealth) did

not load on any particular factor and were examined more closely as potentially important

measures in their own right. Honesty and wisdom, did not change the results in any of our models

and were excluded from our analysis. Wealth, on the other hand, was significant and

significantly affected the effects of both self-enhancing and self-transcending composite

measures in all of our models. While Wealth is theoretically related to self-enhancement it was

clear that, for our sample, it is a distinct dimension of value-expressive person identity. Given the

fact that all respondents in our sample were entrepreneurs, it is reasonable to assume that some

non-trivial portion of their livelihoods was tied to their ventures. It is therefore unsurprising that

the relative importance of wealth as a guiding principle for their lives (be it high or low) would

have a significant impact on the way they view themselves as individuals. Therefore, we

included Wealth in all of our models and conceptually treat the Self-Enhancing variable as a

measure of the importance of person identities expressing self-enhancing values above and

beyond these Wealth.

-------------------------------------------------------- Insert Table 1 about here

--------------------------------------------------------

Independent Variables: Role Identities. To our knowledge, no scales to measure multiple

economically or socially relevant role identities currently exist. Studies measuring role identities

tend to measure a particular identity in isolation, and the roles underlying these identities tend to

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be study specific.3 However, at least two studies in the identity literature do simultaneously

measure the relative importance or prominence of multiple role identities (Stets & Biga, 2003;

Stryker & Serpe, 1994). We follow these studies, presenting respondents with a list of role

identities and asking them to rate their relative importance. Since our aim was to measure the

relative importance of economically-oriented and socially-oriented role identities in order to

assess their relationships with person identities and entrepreneurial goals, we sought to identify

role definitions that broadly capture economic and social meanings. To accomplish this, we

drew from Thornton’s (2004) typology of society-level institutional logics and created survey

items that were related to economic or social logic and represented widely understood role

identity types to which many people might have commitments. The five role identity items

included in the instrument were: a) political activist/participant role, b) environmentalist role, c)

community member/citizen role, d) professional role, and e) business role.

These items were presented with an accompanying descriptive statement making clear their

meaning specifically as roles. We asked respondents to rate each role in terms of importance “to

the way I think about myself” using a 5 point scale from 0 (“not at all important”) to 4

(“extremely important”). The result is a profile of multiple role identity ratings measuring both

the importance of each identity, and a hierarchical relationship between identities. Our

measurement method complies with three key aspects of Burke’s widely cited standard for

assessing measures of role identities (Burke, 1980): 4 1) we recognize the relationships and

distances between identities by capturing their hierarchical arrangement and relative salience, 2)

we locate identities in semantic space defined by common meaning by grouping and positioning

3 Identity research in entrepreneurship is unique in that the entrepreneur or founder role identity has been specifically considered in multiple studies. 4 The other three standards Burke proposes relate to the identity “image” which is the real-time instantiation of identity in a given situation (Burke, 1980). Since our study does not involve direct observations of identity enactments as they happen, meeting these standards was not possible.

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them as economically-oriented or socially-oriented and, 3) we link internal identities with

external role performance via our hypotheses.

In order to inform the identification of the latent variables related to the items above, we

conducted a factor analysis with varimax rotation. The covariance of the resulting item groupings

was also analyzed and alpha coefficients determined. The results of our factor analysis and

corresponding Cronbach alpha coefficients are reported in Table 2. We observed two potential

factors emerging from this analysis that conceptually support our theorized values groupings.

-------------------------------------------------------- Insert Table 2 about here

-------------------------------------------------------- We expect that items a-c above should represent socially-oriented role identities while

items d and e should represent economically-oriented role identities. Our factor analysis

supported combining items a-c as a latent construct (alpha=0.71) and suggested the expected

relationship between items d and e. Accordingly we constructed a variable using the average of

the socially-oriented role identity items from factor 1 (items a-c). This variable appears in this

text and tables as Socially-Oriented. We also constructed a variable using the average of the

economically-oriented role identity items from factor 2 (items d and e). This variable appears in

this text and tables as Economically-Oriented. Given that only two items were included in this

measure, it is unsurprising that an acceptable alpha was not achieved (alpha=0.55). We tested

each of our models including these two items as separate variables and was no substantive

difference in the results. For the sake of greater clarity and brevity, the models presented below

use the composite variable.

Control variables. Control variables were collected relating to the individual entrepreneur

and the firm that were the focal point of each survey response. Entrepreneur-related variables

included gender and age. In addition we controlled for region (CitySize) and experience

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(EntrepreneurialExperience) through five binary values measuring whether the entrepreneur has

a particular level of experience. Firm-related control variables included the firm size (FirmSize)

and scope (FirmScope). Firm size was measured by number of employees and the scope of the

firm was measured as five binary values indicating whether the firm operates in a particular level

of market breadth (local, state-wide, national, and international). These items were dummy

coded.

Procedures

Hypotheses 1, 2, and 3 were tested using ordinary least squares (OLS) regression models.

Hypothesis 4 was tested with a series of indirect effects models wherein role identity is an

intervening variable in the relationship between person identity and goals. To avoid recently

identified limitations to indirect effects analysis (Preacher & Hayes, 2004; Zhao, Lynch, & Chen,

2010), we employed the statistical methods presented in Preacher and Hayes (2004) utilizing

bias-corrected, bootstrapped estimates of confidence intervals for the population values of

unstandardized indirect effects. Bootstrapping corrects for power limitations inherent in product

of coefficient tests recommended in traditional approaches (e.g. Sobel’s mediation test).

RESULTS

The means, standard deviations, and correlations for all variables in our study can be found

in Table 3. Results from our models testing Hypotheses 1, 2, and 3 are presented in Table 4. The

results of our three indirect effects models testing Hypothesis 4 are included in Table 5. Overall,

these correlations reflect the expected relationships between the variables and the correlations are

relatively small (typically below 0.3.) Given these results, we expect that multicollinearity was

not an issue in testing our models.

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-------------------------------------------------------- Insert Tables 3, 4, and 5 about here

--------------------------------------------------------

Hypothesis 1 proposed that the importance of person identities in the entrepreneur’s self-

concept that are based on self-enhancing values would be positively related to the prominence of

economic goals in her venture. As shown in Model 1 of Table 4, the relationship between Self-

Enhancing person identities and EconomicGoals was not significant. Hence, Hypothesis 1 is not

supported. The predictor representing Self-Transcending person identities was negative and

significant (p=0.067), and the predictor representing the Wealth person identity was positive and

significant (p<0.001).

Hypothesis 2 proposed that the importance of person identities in the entrepreneur’s self-

concept that are based on self-transcending values would be positively related to the prominence

of social goals in her venture. As shown in Model 2 of Table 4, the relationship between Self-

Transcending person identities and SocialGoals was positive and significant (p<0.001). These

results support Hypothesis 2. The Wealth person identity variable was also positive and

significant in this model (p=0.008).

Hypothesis 3 proposed that the importance of person identities in the entrepreneur’s self-

concept that are based on self-transcending values would be positively related to greater balance

of social and economic goals in her venture. As shown in Model 3 of Table 4, the relationship

between Self-Transcending person identities and GoalBalance was positive and significant

(p>0.001). These results support Hypothesis 3. The Wealth person identity variable was also

positive and significant in this model (p=0.047).

Hypothesis 4 suggested that the entrepreneur’s person identities described above would be

indirectly (positively) related to venture goals through important role identities in the

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entrepreneur’s self-concept. Table 5 shows the results of three tests of the hypothesized indirect

effects corresponding to the direct effects tested in Hypotheses 1-3. Since these models

simultaneously test direct and indirect effects, the bootstrapped unstandardized effect

coefficients, standard errors, z-scores, p values, and bias-corrected confidence intervals for both

are reported in the table. The first model shown in Table 5 tests the indirect effect of Self-

Enhancing person identities on EconomicGoals through Economically-Oriented role identities.

The indirect effect in this model is positive and significant (p=0.042), with a 95% bias-corrected

confidence interval of 0.009 to 0.091. Consistent with our results from testing Hypothesis 1, the

direct effect in this model was not significant (p=0.877). The second model shown in Table 5

tests the indirect effect of Self-Transcending person identities on SocialGoals through Socially-

Oriented role identities. The indirect effect in this model is positive and significant (p=0.001),

with a 95% bias-corrected confidence interval of 0.079 to 0.280. Consistent with our results from

testing Hypothesis 2, the direct effect in this model was also positive and significant (p=0.036).

The last model shown in Table 5 tests the indirect effect of Self-Transcending person identities

on GoalBalance through Socially-Oriented role identities. The indirect effect in this model is

positive and significant (p=0.009), with a 95% bias-corrected confidence interval of 0.041 to

0.234. Consistent with our results from testing Hypothesis 3, the direct effect in this model was

also positive and significant (p=0.029). Together these results support Hypothesis 4.

Common Method and Source Error

Several management scholars have recently argued that the detrimental effects common

method variance may be of considerably less concern than has been commonly believed

(Conway & Lance, 2010). Nevertheless, we took measures to address the possibility of inflated

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correlations between measures due to collecting our data from a common source. Following

Podsakoff et al. (2003), we addressed this issue through careful wording of question prompts to

increase clarity and spur cognitive engagement. In addition, we randomized question ordering

and direction, creating proximal and psychological distance between related questions through

spacing and order of question blocks to mitigate framing effects, and ensuring anonymity for

respondents. Also to introduce temporal distance between responses, we administered a follow-

up survey to 72 of our respondents approximately six months after the original survey asking

them the same goal and role identity questions. A comparison of individual responses from each

sample showed that, on average, individual item responses differed by 19% between samples.

We also tested the correlation of original survey goal and role identity items to the corresponding

follow-up items. All item pairs were significantly correlated (p < 0.001). The average the

correlation coefficient as 0.72, with a minimum of 0.61 and a maximum of 0.96. These results

suggest that respondents conception of the incorporation of economic and/or social goals into the

venture was stable across time, and not influenced by our survey questions.

DISCUSSION

Our findings suggest that entrepreneurs’ identities affect the kinds of goals they set for their

ventures. Person identities based on self-transcending values had a positive association with the

entrepreneur’s commitment to social goals. This effect occurred both directly (H2) and

indirectly through socially-oriented role identities (H4). Similarly, self-transcending person

identities were both a directly (H3) and indirectly positively associated (H4) with the

entrepreneur seeking balance between social and economic goals. In addition, person identities

based on self-enhancing values were positively associated with the prominence of economic

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goals. However, this relationship occurred only indirectly through economically-oriented role

identities. Interestingly, self-transcending person identities had a direct, negative association with

economic goals. Although not hypothesized, this finding supports the theory that economic

goals are generally less important to socially-oriented entrepreneurs than those with a stronger

economic orientation (M. T. Dacin et al., 2011; Miller et al., 2012). Taken together, our findings

support our theory that person identities are enacted through the alignment of complementary

role identities. It appears that, in the case of economic goals, entrepreneurs are able to effectively

use their role commitments to enact the value-expressive aspects of their self-concept. Social

goals, on the other hand, require direct enactment of entrepreneurs’ self-transcending person

identities.

Perhaps the meaning and relevance of economically-oriented roles are less ambiguous in

the context of entrepreneurship while the appropriateness of socially-oriented roles is less clear

and must be augmented by stronger person identities. Our findings also suggest that the relative

importance of person identities based on valuing wealth are quite important to the goal

commitments of entrepreneurs. In all of our models, the importance of wealth person identities

was positively related to the prominence of economic goals and negatively related to the

prominence of social goals. It appears that the wealth value identity tends to influence goals as

predicted for self-enhancing identities in general but it seems that this value may not be easily

combined with other self-enhancing or self-transcending values in the context of

entrepreneurship. Further clarifying the relationship between the wealth identity and the

entrepreneur’s other identities may be important for future studies.

One could argue that, even if value-expressive person identities and complementary role

identities do affect social and economic goals, that other characteristics of the entrepreneur or

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environment may explain our results. However, we have controlled for these other factors by

including several variables related to characteristics of the individual entrepreneur (e.g.

experience) and the venture (e.g. firm size). On the whole, these controls were not significant.

This simultaneously strengthens the case for our results and underscores the limitations of our

sample, which we discuss in greater detail below. Clearly replication of this study with additional

samples would strengthen our findings. We leave such replication to future studies.

The current study makes several important contributions to entrepreneurship research and

to the study of identity in the context of organizations. First, we broaden the theoretical

perspective on entrepreneurial motivation. The literature on entrepreneurship is largely

dominated by an emphasis on economic motivation (Aldrich & Ruef, 2006; Shane, Locke, &

Collins, 2003) with the default assumption that entrepreneurs are motivated by personal financial

gain (J. W. Carland et al., 1984). Moreover, psychological theories used to explain the

motivational constructs of entrepreneurs typically center on individual predispositions to action

such as the need for achievement, locus of control, tolerance for ambiguity, and a desire for

independence (Rindova, Barry, & Ketchen, 2009; Shane et al., 2003). This study suggests that

these theoretical perspectives as necessary, but not sufficient; our results suggest that self-

expression and identity verification are important factors in determining the nature of

opportunities that entrepreneurs pursue. This study illustrates the need for a richer

conceptualization of entrepreneurial goals, acknowledging their manifold, blended, and

heterogeneous nature and their underlying basis in the entrepreneur’s self-concept. The simple

view of the entrepreneur as one who pursues only economic goals is, at best, incomplete.

However, our findings suggest that considering social goals alone is equally myopic. Instead,

future research should recognize that entrepreneurs pursue many types of goals simultaneously

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through the opportunities they pursue and the ventures they create. Entrepreneurs blend and

balance their goals, guided by their personal values and self-concept. For this reason, the goals

that define an entrepreneurial venture are truly heterogeneous, not only in degree, but also in

kind and in terms of their relationship with each other. Future studies could focus on the

relationships between goals (e.g. H3) and on the effects of blended goals on other parts of the

venturing process such as opportunity recognition, stakeholder management, risk propensity,

persistence, choice of organizational form, funding and equity decisions, and exit decisions.

Our study also extends the application of identity as a key theoretical concept in

entrepreneurship research. Recent work in this area has demonstrated the potential of identity to

explain entrepreneurial passion (Cardon et al., 2009; Murnieks et al., 2012), the entrepreneur’s

well-being (Shepherd & Haynie, 2009), the likelihood of engaging in entrepreneurial action

(Farmer et al., 2011; Hoang & Gimeno, 2010), the perceptions investors have about the

entrepreneur (Navis & Glynn, 2011), and the strategic decisions entrepreneurs make regarding

markets, products, and resources (Fauchart & Gruber, 2011). Whereas these studies focus on the

entrepreneur role and its effect on the venturing process, our study is the first to introduce

person identities to the entrepreneurial context and the first to empirically test the relationships

between multiple identities in the entrepreneur’s self concept.

Person identities may provide a new theoretical perspective with which to examine the

unique characteristics of the individual entrepreneur. The identity perspective is unique in that it

considers the ways that entrepreneurs may actively manage their individuating attributes using

the perceptual control system and shape their behavior or environment to confirm them. Future

research should consider other characteristics, apart from values, that form the basis of

entrepreneurs’ person identities. For example, the environmental or eco-centric person identity

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has been empirically shown to affect pro-environmental behavior (Stets & Biga, 2003). The

ecocentric person identity might be particularly useful in explaining why some entrepreneurs

focus their efforts exclusively on environmentally-relevant opportunities while others do not.

Future studies should also consider person identities as dependent variables. A rich literature

exists on the topic of identity work, the ways in which individuals change their self-concept over

time (Creed, Dejordy, & Lok, 2010; Dutton, Roberts, & Bednar, 2010; Ibarra & Barbulescu,

2010; Kreiner, Hollensbe, & Sheep, 2006). It seems likely that the venturing process could

profoundly affect the way entrepreneurs think about themselves leading to significant identity

change.

Our use of value-expressive identities also demonstrates that person identities can be used

to empirically examine the entrepreneur’s beliefs or convictions and their relationship with

entrepreneurial intention and action. Person identities could provide an important bridge between

empirical work on entrepreneurial action and outcomes and more abstract concepts such as

ideologies, theology, and morality. For example, an entrepreneur’s commitment to particular

person identities may influence the way she prioritizes her commitments to various stakeholders.

Future researchers might consider an identity perspective to link theories of entrepreneurship and

social movements (Sine & B. H. Lee, 2009), collective action (Hargrave & Van de Ven, 2006),

stakeholder theory (Venkataraman, 2002), or other theoretical areas with prominent normative or

ideological emphases.

Empirical study of multiple identities in the entrepreneurial context may also allow identity

relationships to be used in answering a broader variety of research questions. Considering

multiple identities may be particularly profitable in studying situations where entrepreneurs face

complex decisions or conflicting objectives (e.g. Shepherd & Haynie, 2009). Future researchers

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should consider interactions between multiple complimentary and conflicting identities to see

how they affect entrepreneurial intentions and actions, and how the relationships between

identities may change over the course of the venturing process.

As with all empirical research, our study is not without limitations. First, our study is based

on cross-sectional data from a single, targeted sample of entrepreneurs concentrated in a

particular geographic area. This may limit the generalizability of our findings. Replication of this

study with different sample groups will help address this limitation. Second, our data was

collected exclusively via a survey instrument comprised of items with potentially limited scale

precision and construct validity. Other, parallel measures of our constructs from independent

sources would help address this limitation. Third, our survey was comprised entirely of self-

reported items. For this reason, bias due to common methods variance may affect the validity of

our findings. Non-trivial variance due to collecting multiple measures from a common source or

rater and using a single instrument can significantly inflate correlations between measures (Doty

& Glick, 1998; P. M. Podsakoff et al., 2003). As discussed above, we attempted to address this

potential limitation through instrument design and statistical testing following Podsakoff et al.

(2003).

Recently, some management scholars have argued that concerns about bias due to common

methods may be overestimated in many cases, especially when a strong theoretical argument can

be made that self-report measures are appropriate (Conway & Lance, 2010). Accordingly, we

argue that measures of self-concept, as expressed through identity, and personal goals are

uniquely understood by the individual who holds them and cannot be adequately captured

through third-party reporting or even direct observation. Forming and understanding the self-

concept is, by definition, an act of introspection. Still, it is clear that obtaining independent

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measures of our constructs, social and economic goals in particular, would help allay concerns

due to self-report biases and survey measurement reliability limitations (P. M. Podsakoff et al.,

2003).

Our findings have important practical implications for entrepreneurs and for those with

prominent non-economic goals in particular. The realization that multiple, blended goals exist in

any entrepreneurial opportunity and that the importance of different goals will vary based on the

individual’s self-concept may be important to the way the entrepreneur forms her venture. This is

especially critical in terms of her interaction with a diverse pool of stakeholders. Recognizing

that individual stakeholders’ goals are driven by their beliefs about themselves can profoundly

influence the entrepreneur’s ability to work effectively with those stakeholders. Likewise, the

entrepreneur may gain a greater appreciation for involving stakeholders with identities that

compliment the venture’s goals. This point is of particular importance for social entrepreneurs as

blended goals are inherent to the social venture (Hervieux, Gedajlovic, & Turcotte, 2010).

CONCLUSION

This study is a first step in understanding the linkages between values, identity and

entrepreneurial goals. Our model and results suggest that a much wider consideration of both the

values, and relevant important identities of entrepreneurs leads to an enhanced comprehension of

how and why entrepreneurs pursue specific types of opportunities. Only by understanding the

multi-faceted aspects of the entrepreneur’s identity can we understand the heterogeneous and

blended goals that emerge in the venturing process.

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TABLES & FIGURES

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Figure 1 - A Model of Identity and Venture Goals

Figure 2 – Schwartz’s Model of Relations Among Motivational Value Types

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