Entrepreneurship: Self-Efficacy and Business Performance

Entrepreneurship 0
Entrepreneurship
Student’s Name
5/13/2019

Entrepreneurship 1
Entrepreneurship refers to the willingness and the ability to create and manage the business
venture. An entrepreneur analyses the opportunity in the dynamic environment and shapes it
into a high potential venture. The entrepreneurial spirit is characterized by innovation and
risk taking. The entrepreneur manages the activities and runs the business with limited
resources. The concept of entrepreneurship is evolving because it leads to the development of
the economy (Kirzner, 2015).In the further paragraphs, the essay will reflect upon the concept
of entrepreneurial self-efficacy and its relationship with business performance. It will also
reflect the difference between an entrepreneur and a small business owner
An entrepreneur is recognized as an innovator who analyses the opportunity in the business
environment and shapes it into a high potential venture. An entrepreneur manages the
activities of the business and assumes the risk associated with the business. The entrepreneurs
have the ability to balance personal and financial risk and effectively manage the
complexities of the business environment. They have the passion to convert an idea into a
potential business. An entrepreneur manages the resources and motivates the team to grow
the business into a profitable venture. The concept of entrepreneurship is evolving because it
leads to economic development and provides job opportunities to various sectors (Bujor and
Avasilcai, 2016).
According to Albert Bandura, the concept of self-efficacy is defined as the belief of an
individual in their personal capability to accomplish a job or specific set of task. It differs
from self-confidence and arrives from past accomplishments and experience of entrepreneurs.
The factors that influence self-efficacy includes the past mastery experience of the
entrepreneurs. It helps in analyzing the tolerance of the failure and is measured in terms of
past successful experiences. The psychological and social persuasions play a major role in
measuring the self-efficacy of an entrepreneur (Bandura, 2018).

Entrepreneurship 2
Entrepreneurial self-efficacy determines the belief of the individual in achieving
entrepreneurial outcomes. It is used as a characteristic and distinct feature of an entrepreneur.
The concept of self-efficacy plays a major role in determining entrepreneurial actions. The
feeling of personal efficiency determines the behaviour of the entrepreneur. Self –efficacy is
considered as the major tool in measuring the behaviour of the entrepreneurs. It helps in
influencing the behaviour of entrepreneurs. It affects the performance of the entrepreneurs by
influencing the perceptions, motivations and interest. It reduces the self-doubts and enables
an entrepreneur to perform better. An entrepreneur who possesses a high level of self-efficacy
has the ability to handle the fluctuations in the business environment and easily able to
recover from failures. They effectively perform and face the challenges in entrepreneurial
activities (McGee and Peterson, 2017).
The social cognitive theory of Albert Bandura considers people as the active agents who both
influence and get influenced by their environment. The main component of the theory is
observational learning. According to the author the entrepreneurs learn from the behaviour of
the models. They observe the behaviours and get influence from the environment.
Observational learning includes paying attention to the behaviour of the models and retaining
them in the memories of the entrepreneur. Further, the observed behaviour is implemented
into action to achieve the desired result and finally getting motivated by achieving the desired
result. It is analysed that self- efficacy plays a major role in analysing the behaviour of
entrepreneurs. It depends upon the belief of the entrepreneur to imitate the behaviour of the
models and achieve the desired result. Perceptions of self-efficacy influence the choices of
people and beliefs in themselves to achieve their goals. It motivates the entrepreneurs to take
actions and to implement change in personal and professional growth. The measurement of
the self-efficacy is analysed by the goals the entrepreneur chooses and the efforts undertaken
for the achievement of the desired result (Baron et al, 2016).