Motivation, achievement and leadership in women entrepreneurs Dr. Marina Ranga

1. Motivation, achievement and leadership in women entrepreneurs Dr. Marina Ranga University of Warsaw Faculty of Management 5 June 2019

2. Outline • Motivation and achievement – traditional and modern approaches • Entrepreneurs vs. managers • Women entrepreneurs vs. male entrepreneurs • Women in leadership: characteristics for success

3. Why should we study personality traits of (women) entrepreneurs? • Personality/psychological traits of entrepreneurs are important for the study of entrepreneurship in many contexts: • examination of the determinants of occupational choice (entrepreneurship vs. paid employment) • predictors of entrepreneurial success • evaluation of the effects of entrepreneurship policies • design and assessment of different approaches to entrepreneurship education. • Personality/psychological traits of entrepreneurs have been addressed in many theories and empirical analyses, but the literature remains underdeveloped due to the heterogeneity of personality traits.

4. Motivation • Internal or external forces acting on a person that determine enthusiasm and persistence to pursue a certain course of action • Motivate workforce to “go the extra mile” to achieve or exceed job performance expectations • Motivate workforce for both short-term and long-term projects • Types of motivation: • Intrinsic – personal satisfaction that is obtained from the work itself when you perform well and complete goals • Extrinsic – rewards that are linked to job performance. It is given by another person, through pay or benefits (approx. 25-40% of an employee’s base salary)

5. Traditional approaches to motivation: 1. Frederick Taylor’s Scientific Theory of Management (classical management theory) 2. Elton Mayo’s Human Relations Approach 3. Human Resource Approach

6. Traditional approach to motivation – F. Taylor’s Scientific Theory of Management (Classical management theory) (end 19th century) • Study of the relationships between people and tasks for defining the “one best way” for a job to be done, • Redesign work flow processes for higher efficiency and labour productivity • "The principal object of management should be to secure the maximum prosperity for the employer, coupled with the maximum prosperity for each employee“ (Taylor) • Managers must follow four principles:1. Develop a science for each element of an individual’s work, which replaces the old rule of thumb method.2. Scientifically select, train, teach, and develop workers.3. Cooperate with the workers so as to ensure that all work is done according to the principles of the science that has been developed.4. Divide work and responsibility almost equally between management and workers. • Focus on extrinsic rewards (monetary)  Criticised for assuming that workers are satisfied by money alone • Quality assurance, quality control (1920s-30s) • Operations management (1940-50s) • TQM (1980s) • Reengineering (1990s) • Lean Manufacturing (2000s)

7. Four principles of Taylor's management theory (Taylorism) 1. Break down tasks into subtasks Rather than assigning an entire project to one individual and allowing them the proper time to complete it, managers break down larger tasks into subtasks that can make the process more organized and efficient, with multiple employees working on one assignment – each taking care of their own piece. 2. Delegate responsibilities and train workers Measure the most efficient way to do a given task, then delegate the subtasks only to employees with the proper skills and abilities. Those workers are then trained by management. 3. Monitor performance Supervisors ensure each worker’s efficiency. Productive practice is implemented by re-training the workers. Give incentives to motivate quality work ("a fair day's pay for a fair day's work“) 4. Allocate work between managers and employees Typically, the more experienced workers are more likely to get an executive position. Taylor believed in a similar hierarchy of three levels, with the most powerful workers on top. Each level is given exact responsibilities and detailed instructions specific to their role.

8. Human relations approach (Elton Mayo) (early 20 century) • Studies the behaviour of people in groups, particularly in workplace groups (industrial and organizational psychology). • Originated in the 1930s' Hawthorne studies effects of social relations, motivation and employee satisfaction on factory productivity. • Before it, employees’ productivity was considered to be a function only of physical conditions of work and money wages paid to them. For the first time it was realised that productivity depended largely upon the satisfaction of the employees in work situations. • Reaction against the mechanistic view of organizations (workers as “cogs in a machine”) and the money motivation of the traditional approach. • Focus on intrinsic rewards Workers as ‘social persons’ in terms of psychology and fit with companies, rather than as interchangeable parts

9. Relationshipsinfluence most productivity  Productivity increases when workers feel they are part of a supportive team that facilitates development and growth, not one that doesn’t recognize achievements(‘Hawthorne effect’) • Human Relations school of thought: the effectiveness of any organisation depends on the quality of relationships among the people working in the organi­sation. • Basic as­sumption of this school: the goals of the organisation are achieved through and with the people. • Managers must analyse the interaction of people with the organisation. • People are emotional rather than economic‐rational beings • Organizations are cooperative social systems, not mechanical ones • Organizations are composed of informal structures, rules and norms, as well as formal practices and procedures • Foundation of the discipline of human relations management (HRM).

10. Hawthorne experiments • 1. Illumination Experiments: • Productivity increased not only by improving the working environment, but also through in­formal social relations among the workers. • 2. Relay Assembly Test Room Experiment: • A small homogeneous working group was consti­tuted. • Several new elements introduced: shorter working hours, proper rest peri­ods, improved physical conditions, friendly supervision, free social interaction among the group members. • Productivity and morale increased, and were maintained even if the im­provements in the working conditions were withdrawn. • 3. Mass Interviewing Programme: • To know workers’ perceptions and orientation on the working life. • Importance of informal relation, social and psychological needs and their impact on the be­haviour of the workers • 4. Bank Wiring Observation Room Experiment: • A group of 14 workers was ob­served with regard to their work behaviour. • Informal production norms set by the workers, informal relations in the group.

11. Main features of Elton Mayo’s Human Relations Approach (a) Since management is getting things done through and with people, a manager must have a basic understanding of human behaviour in all respects—particularly in the context of work groups and organisations. (b) The managers must study the inter-personal relations among the people at work. (c) Larger production and higher motivation can be achieved only through good human relation. (d) The study of management must draw the concepts and principles of various behav­ioural sciences like Psychology and Sociology.

12. Human Resource Approach • Combines both the classical and human relations approach • Focus on the benefits brought by individual thoughts, ideas, and discussions to an organization. Employees are individuals with varying goals and needs, not mere business resources. Positive view of workers  virtually all wish to contribute to the enterprise productively, main obstacles are lack of knowledge, insufficient training, and failures of process. • Focus on functional activities: HR planning, job analysis, recruitment and selection, maintaining employee relations, performance appraisals, compensation management, training and development. • Focus on administrative activities: establishing policies, procedures, contracts and guidelines, to drive employee performance and achieve organizational goals

13. The managerial grid: Concern for People vs. Concern for Results

15. Modern approaches to motivation • Content (or need) theories of motivation: • Maslow's hierarchy of needs • Alderfer's ERG theory • Herzberg's motivator-hygiene theory • McClelland's learned needs (three-needs theory). • 2. Process (or cognitive) theories of motivation • Expectancy theory • Equity theory • Goal-setting theory • Reinforcement theory.

16. Two major schools of research on motivation • Content (or need) theories of motivation: • Focus on factors internal to the individual that energize and direct behaviour. • See motivation as the product of internal drives that compel an individual to act or move toward the satisfaction of individual needs. • Major content theories of motivation: • Maslow's hierarchy of needs • Alderfer's ERG theory • Herzberg's motivator-hygiene theory • McClelland's learned needs (three-needs theory). • 2. Process (or cognitive) theories of motivation • Focus on conscious human decision as an explanation of motivation. • Based on early cognitive theories, which see behavior as the result of conscious decision-making processes. • Major process theories of motivation: • Expectancy theory • Equity theory • Goal-setting theory • Reinforcement theory.

17. Maslow’s Hierarchy of Needs • Next level of needs cannot be achieved until lower level is satisfied  Providing for higher levels will not motivate unless the needs at the lower levels are met • Rewards for lower level needs will only motivate an employee to a limited extent • Personal growth and striving for self-actualization motivate an employee in long-term

18. Alderfer’s ERG Theory • Modification of Maslow’s theory  three groups of core needs: • Existence – relates to a person's physical needs for survival such as food, clothing, and shelter. • Relationship – desire for support, relationships and recognition • Growth – need for personal development, very similar to self-actualization • Not as rigid as Maslow’s theory  the rigid hierarchy does not have to be followed • If a higher order need is not met, the worker might demand more rewards to satisfy lower level needs

19. Herzberg’s Two-Factor Theory High Hygiene + High Motivation: employees highly motivated, have few complaints. High Hygiene + Low Motivation: employees have few complaints but are not highly motivated. Job is viewed as a paycheck. Low Hygiene + High Motivation: employees are motivated but have a lot of complaints. Job is exciting and challenging but salaries and work conditions are not up to par. Low Hygiene + Low Motivation: worst situation, employees are not motivated, have many complaints.

20. McClelland’s acquired-needs theory (1961) (the three needs theory, the learned needs theory) • Specific needs of every individual are acquired over time, but are also shaped by the experiences that each individual has, and by cultural background. • An individual’s motivation can result from three dominant needs. These can be changed through training, but one need remains dominant, subject to personality Institutional or personal

21. McClelland’s acquired-needs theory

23. Expectancy Theory (Vroom, 1964) • Focuses on outcomes, not on needs • Motivation is an outcome of how much an individual wants a reward (Valence), thelikelihood that the effort will lead to expected performance (Expectancy) and the belief that the performance will lead to reward (Instrumentality). • Effort  Performance: An individual must have the ability, experience, necessary equipment, and opportunity to perform • Performance  Reward (Outcome): Successful performance expected to receive an appropriate award • Managers can correlate the preferred outcomes to the desired performance levels • Managers must ensure that employees can achieve the desired performance levels • Deserving employees must be rewarded for their exceptional performance • The reward system must be fair and just in an organization • Organizations must design interesting, dynamic and challenging jobs

24. Equity Theory (Adams, 1963) • Explains the correlation between input and outcome of employee performance with his/her perception of equitable or inequitable behaviour from the employers. • Fairness based on comparisons with co-workers within the company, or others at a different company. • Fairness in the outcomes (pay, promotions, recognition) and in inputs (contributions, education, special skills) • Employees who feel they are inequitably treated may: • Cut back on their level of effort • Request a raise or better benefits • Try to inflate accomplishments, or decrease other’s accomplishments • Leave the company, sabotage • A salary increase or promotion will have no motivational effect if perceived as inequitable relative to other employees

25. Goal-setting essentially linked to task performance. • Goals: clear, challenging, measurable, attract commitment of employees. • Specific and clear goals + appropriate feedback lead to higher task performance. • Management By Objectives (MBO) approach • Very difficult to quantify and measure some important tasks

26. Motivation not in the worker, but in the company policies for behaviours and rewards  focus on behaviour instead of employee’s motives • An individual’s behaviour is a function of its consequences: positive reinforced behaviour tends to be repeated, while negative reinforced behaviourtends to be inhibited • Positive Reinforcement – pleasurable stimulus or reward following a desired behaviour • Negative Reinforcement –Employees learn to do the right thing by avoiding unpleasant situations, • Punishment – an adverse or unpleasant outcome following an undesired behaviour • Extinction – withdrawal of a positive reward following undesired behaviour

27. Entrepreneurs vs. managers

28. Entrepreneurs vs. managers: distinctions based on McClelland’s theory • High achievement motivation (high nAch) • Dominant characteristic for entrepreneurs (McClelland, 1987) • Weaker for high-level managers in complex organizations  they are personally involved in performing their organizational tasks, but reluctant to delegate authority  poor performance • Successful entrepreneurs may not be good managers, need to develop leadership competences • High nAch associated with innovation • High power motivation (high nPow) • Dominant characteristic for middle/high-level managers (although some managers may exercise power in an aggressive manner for self-aggrandizing purposes, to the detriment of their organizations) • High nPow predictive of leader effectiveness

29. Entrepreneurs vs. managers: key research studies • Langan-Fox, J. and S. Roth (1995), Achievement motivation and female entrepreneurs, Organizational Psychology68 (3): 209-218 • a 3-cluster typology of psychological traits of women entrepreneurs based on the psychological characteristics of 60 Australian women founders, within the traditional theoretical framework of David McClelland • Psychological profiles of women entrepreneurs were non‐existent, as most research had been conducted with men. • Explores variables influencing the motivations of entrepreneurs, usually attributed to managers: need for power and influence, ability to influence/have power, resistance to subordination, internal locus of control, job satisfaction, and achievement values. • Three psychological types of female entrepreneurs: • The need achiever entrepreneur:high nAch (25%) • The managerial entrepreneur: high nPower (56.6%) • The pragmatic entrepreneur: moderate on both motivations of achievement and power: medium nAch, nPower (18.3%)

30. Brodsky, M. A. (1993), Successful Female Corporate Managers and Entrepreneurs: Similarities and Differences, Group & Organization Management 18 (3): 366-378 • Compared personality, gender role and demographic profiles of high-achieving women entrepreneurs and managers based on in-depth interviews • Results demonstrate significant differences on measures of trust and level of control: • Female managers: • more trusting, require less control, view the corporate environment as safe and supportive; • more likely to adopt a masculine role. • Female entrepreneurs: • want autonomy and personal control, define own work parameters, found the corporate environment confining • more likely to adopt an androgynous role • This difference in adopted gender roles might be attributed to fewer constraints in entrepreneurship than in business organizations in regard to gender roles

31. Caron H. St. John (2003), "Attributes of Entrepreneurs: Personality Versus Perspective" in "Teaching Entrepreneurship to Engineering Students", E. Baum, C. Union, C. McHargue (Eds), ECI Symposium Series. • Successful entrepreneurs and successful managers do not differ in personality, but they do differ in perspective.

32. Hao Zao and Scott E. Seibert (2006), The Big Five Personality Dimensions and Entrepreneurial Status: A Meta-Analytical Review, Journal of Applied Psychology 91 (2): 259-271. • Develops the Five Factor Model (FFM) of personality (Big 5 model) using meta-analysis (research method that allows research studies to be combined in a way that yields overall trends) based on: • 1. Extraversion – how naturally outgoing we are, how much social interaction we need. • 2. Emotional Well Being (Neuroticism) – how self-confident we are, how readily we show emotions. • 3. Agreeableness – how easygoing and tolerant vs.how intense and potentially irritable we are • 4.Openness to Experience – whether we seek out new ideas and think creatively or we are more practical-minded, efficient and conservative • 5.Conscientiousness – our core “modus operandi”: at the one extreme, focused, organized, detail-oriented, perfectionistic, achievement-oriented, dependable, and compulsive. At the opposite end, flexible, spontaneous, tolerant of ambiguity, disorganized, and less achievement-oriented.

33. Entrepreneurs scored significantly higher than managers on the traits Openness to Experience and Conscientiousness. • Entrepreneurs are more creative, more innovative, and more likely to embrace new ideas than their manager counterparts. • Entrepreneurs have a higher achievement orientation as compared to managers. • Entrepreneurs and managers did not differ on other aspects of Conscientiousness such as dependability and organizational skills. • Entrepreneurs scored significantly lower than managers on Neuroticism and Agreeableness. • Entrepreneurs are more self-confident, resilient, and stress-tolerant than non-entrepreneurial managers. • Entrepreneurs are tougher, more demanding, and more prone to drive a hard bargain than managers (may explain how a successful entrepreneur is able to accomplish a great deal with few resources. • No significant differences found on Extraversion. • Entrepreneurs were no more or less outgoing than the managers.

34. Homework: Sari Pekkala Kerr, William R. Kerr, Tina Xu (2017), Personality Traits of Entrepreneurs: A Review of Recent Literature, Working paper 18-047, Harvard Business School. This is a review of the extensive literature since 2000 on the personality traits of entrepreneurs. Baseline personality traits like the Big-5 model, self-efficacy and innovativeness, locus of control, and the need for achievement are considered first, then risk attitudes and goals and aspirations of entrepreneurs. Within each area, there are separate studies by the type of entrepreneurial behaviour considered: entry into entrepreneurship, performance outcomes, and exit from entrepreneurship. This literature shows common results and many points of disagreement, reflective of the heterogeneous nature of entrepreneurship.

35. Female Managers vs. Male Managers

36. Female Managers vs. Male Managers: Trait Analysis • Female managers tend to have higher levels of both empathy and authority compared to men, striking a balance between these aspects. • Female managers are more likely to be nurturing, understanding and able to appreciate the perspectives of different team members, whilst still maintaining a high level of authority. • Female managers have lower levels of social confidence and assertiveness than men, which relate to authority. Female managers may display authority differently from a ‘traditional’ style of an authoritative person, e.g. are more likely to lead by example than male counterparts. • Female managers show a lower desire to seek power ‘for power’s sake’ compared to men. Rather than pursuing status and recognition, female managers are more inclined to lead with their conscience, focusing on providing support and treating all team members fairly.

37. Female managers are more likely to prioritize helping team members to work to their full potential, through regularly progress checks, providing helpful feedback and praising good performance. • Female managers tend to be more creative and open-minded, considering all aspects of any situation or decision to be made, including interpersonal and emotional factors that are sometimes overlooked or disregarded. This may be related to their higher levels of empathy. • Female managers are more dutiful and methodical in their approach to working, making them a bit more level-headed, generally open-minded, yet focused. • Despite all of these positive managerial characteristics, female managers are more prone to insecurity, low self-esteem, depression and anxiety than men. One factor likely to contribute to this is women’s greater concern over how they are perceived as managers compared to men.

38. Women in Leadership: Characteristics For Success

39. Women in Leadership: Characteristics For Success • Compassion: women more compassionate than men (Pew Research Center 2015). Organizations with an ethic of compassion rather than a culture of stress see a happier workplace. • Empathy: Female leaders understand that making the workplace feel safe is critical to success, and that empathy can influence their negotiation style also • Innovation and creativity: dominant traits, female leaders also encourage this in their teams. • Holistic thinking: Women are more prone to go beyond just the numbers and data to identify opportunities that would otherwise be overlooked. • Business and financial acumen, understanding the female customer: the most creative and productive groups include women; businesses with more women leaders reported higher financial results. Companies that target women consumers see their likelihood of success increase by 144% when women take an active role (Harvard Business Review). • Collaboration, inclusiveness, emotional sensitivity and communicative strengths, used by female leaders to bring teams together and facilitate an open exchange of ideas (Bloomberg, 2010)

40. What Makes a Good Leader, and Does Gender Matter? (Pew Research Center 2015) Men and women tend to agree that being honest, intelligent, decisive and organized are absolutely essential, although women place somewhat more importance on intelligence and honesty than do men. 66% of women - 47% of men 61% of women - 51% of men 57% of women - 48% of men (gender gap driven by younger women)

41. Millennials: 22-38 years old Gen X: 39-54 years old Baby Boomers: 55-73 years old Silent generation: 74-91 years old

43. Public Sees Few Gender Differences on “Essential Traits”

44. 7 Leadership Skills of Successful Women

47. Career paths of women entrepreneurs • Three broad patterns of career development (Moore, 2000): • Classic entrepreneurs: develop an entrepreneurial strategy aimed at business ownership early in life • Corporatepreneurs: take up entrepreneurship after having worked in an organization; initially do not think of themselves as entrepreneurial, but later can become venture owners if they acquire the right skills, in the right circumstances • Boundarypreneurs: follow a career without boundaries, readily cross back and forth between entrepreneurial and corporate ventures, wherever perceived opportunity takes them – go straight to business ownership, or take a zigzagged route.

48. Impact of organisational practices on women entrepreneurs • Negative experience with organisational life as key driver of women entrepreneurship • Autocratic systems, authoritarian structures, glass ceiling, conflict with traditional corporate cultures • Negative corporate experience different for women and men: • Women tend to structure their new business differently from the organisations they leave behind, minimise conflicts among employees • Men tend to create the same kind of structures and environments • More research needed on how women develop entrepreneurial careers. • Most research so far concentrated on small businesses, • Need to examine large firms, business behaviour, management practices, leadership, etc

49. THANK YOU! marina.ranga@gmail.com