Indirect Effect of Entrepreneurs' Motives and Self-Set Goals on New Venture Performance

Abstract

There are numerous reasons why individuals choose to start their own company; and these motives vary in strength depending on the entrepreneur. These entrepreneurial motives influence the decision making and behavior of entrepreneurs. I draw upon extant research to examine the relationship of entrepreneurs' motives and self-set goals and their influence on the new venture performance. Specifically, we examine how the strength of entrepreneurs motives positively influences the frequency with which they evaluate goal progress relevant to these motives. Furthermore, I investigate the influence that entrepreneurs' evaluation of goal progress has on their positive state affect and authentic pride, and how these individual-level variables are related to new venture performance. Results support these relationships--that is, entrepreneurial motives are positively related to evaluations of goal progress, and perceived goal progress positively influences both positive affect and authentic pride. Furthermore, authentic pride was found to be positively related to new venture performance. This study helps us understand the relationships between important individual-level variables, such as goal setting and firm level performance. Such relationships are not direct and the present research helps identify some of the mediating variables. Given the substantial volume of research that underscores the importance of self-set goals in a wide range of situations, this study helps link goal setting theory more closely to entrepreneurship research.