Divergence in the High-Tech and Low-Tech Sector on Stress Perception: an Entrepreneurial Perspective Master’s Thesis Anthony de Kroon S2704714 a.de.kroon.1@student.rug.nl University of Groningen Faculty of Economics and Business BA Small Business and Entrepreneurship
Supervisor: Dr. I. Singaram Co-assessor: Prof. Dr. P.S. Zwart
ABSTRACT
This master’s thesis determines whether there is a divergence between high-tech and low-tech entrepreneurs in the perception of stress. This research is framed by the effort-reward imbalance model (ERI Model). Although the ERI Model has been applied to a variety of psychological and behavioral outcomes, this is the first study that applies the ERI Model in an entrepreneurial context. There was an assumption of higher efforts among high-tech entrepreneurs due to a stronger attribution to cash-flows, sales growth, and R&D in the high-tech sector. This higher effort may lead to health issues such as stress. A multiple case study among seven high-tech (HT) entrepreneurs, and seven low-tech (LT) entrepreneurs has been done. There is no remarkable divergence between the effort of HT and LT entrepreneurs. However, entrepreneurs do face a certain level of stress, but they are able to cope with it by having a healthy work-life balance. Since they enjoy their work, they are tended to ignore the levels of stress; for each struggling, there is an exhilaration of having something achieved. Nevertheless, the results provide rich insight in the psyche of the entrepreneur: the reward system of entrepreneurs has more dimension than initially was proposed in the ERI Model. Entrepreneurs are tended to reward themselves intrinsically, rather than extrinsically. A modified ERI Model is proposed to apply this model in an entrepreneurial context.
ACKNOWLEDGEMENT
I would like to thank Dr. I. Singaram for the guidance and valuable input during the process of writing the master’s thesis. Further, I am thankful for the generosity from all the entrepreneurs who participated in this research. The subject of this research has a psychological approach, which was new for me; it has aroused my attention. I enjoyed gathering the data, to talk with real-life entrepreneurs, and writing the master’s thesis. It has a valuable contribution to my knowledge about entrepreneurs, firms, and business administration in general.
TABLE OF CONTENT
Abstract ... 2
Acknowledgement ... 3
1. Introduction ... 5
2. Literature Review ... 8
2.1 Effort-reward Imbalance Model (Siegrist, 1996) ... 9
2.2 Definition of Entrepreneurship ... 12
2.3 Motives for entrepreneurship ... 12
2.4 High-tech Entrepreneurs ... 13
2.5 Sources of stress ... 14
2.6 Effects of stress ... 15
2.7 Coping with stress ... 16
3. Methodology ... 17
3.1 Introduction ... 17
3.2 Reliability and Validity ... 17
3.3 Participants Profile ... 18
3.4 Qualitative Data Collection ... 19
3.5 Quantitative Data Collection ... 20
3.6 Data Analysis ... 21
4.1 Entrepreneurial Activity Grid ... 22 4.2 Work Characteristics ... 25 4.3 Motives ... 27 4.4 Effort ... 29 4.5 Overcommitment ... 29 4.6 Reward ... 30 4.7 Effort-Reward Balance ... 30 4.8 Coping ... 31 4.9 Outcomes (stress) ... 32 4.10 Burn-Out ... 33 5. Discussion ... 36
5.1 Entrepreneurial Activity Grid ... 36
5.2 Work Characteristics ... 37 5.3 Motives ... 37 5.4 Effort ... 37 5.5 Overcommitment ... 38 5.6 Reward ... 38 5.7 Effort-Reward Balance ... 39 5.8 Coping ... 40 5.9 Outcome (stress) ... 40 5.10 Burn-Out ... 41 6. Conclusion ... 43
7. Limitations and Recommendations ... 45
References ... 47
Appendices ... 53
Appendix 1 – Initial ERI Model (Siegrist, 1996) ... 53
Appendix 2 – Current ERI Model (Siegrist, 1999) ... 53
Appendix 3 – Interview Guide ... 54
1.INTRODUCTION
The establishment of new enterprises are the cornerstones of economic growth (Ritchie et al. 1982). Kirchhoff and Philips (1987) has made a linkage between entrepreneurship and economic growth. Steenhuis & Bruijn (2006) emphasizes the work of Ritchie et al. (1982) and Kirchhoff and Philips (1987) for the impact of high-technology (HT) by considering that HT is important for economic development. There was a belief that small firms and large firms in the same field have a higher level of innovation (Cooper, 1964). Due to this belief, a tremendous amount of interest in high-tech entrepreneurial firms was generated in the 1980s. While there are some doubts about this belief and the contribution of small firms to job creation, it is still an on-going subject with high interest for HT entrepreneurship. Due to the characteristics (i.e. short product life cycle, high expenditures on R&D, specialized and volatile markets, a strong international competition, and the potential for growth) of technology intensive entrepreneurial firms, it has been shown that they behave differently from other small businesses (Doutriaux, 1992). Nowadays, the economic growth is coupled with an increasing number of entrepreneurs, due to this increase there is a growing interest in the psychology of entrepreneurs. Despite to the growing interest in entrepreneurial behavior, empirical research for entrepreneurial psychology is still vague and superficial (Langan-Fox and Roth, 1995).
Somehow, the work of Boyd and Gumpert (1983), and Maslach (1982) states that a modest level of stress will enhance the performance of an entrepreneur, but the fierce stress associated with entrepreneurial opportunities may negatively influence the physical and mental health of the entrepreneur causing hypertension and arteriosclerosis, burnout, and ultimately the failure of the business.
To continue with the work of Boyd and Gumpert (1983), in contrast with popular belief, stress is not always associated with negative events. Stressful situations may trigger efficiency and may enhance performance. Akande (1994) states that stress is an adjunct to entrepreneurship, due to the weighing of long hours and personal efforts against the potential for sizable, but elusive financial benefits. The extremes in deprivation and satisfaction leads inevitably to stress.
The heavy workloads, which may cause job stress, are caused by the assumption of higher risks in their business, and by a higher need for achievement (Langan-Fox and Roth, 1995). This higher need for achievements may result in an imbalance between effort and reward.
The imbalance of effort and reward is considered to be stressful in occupational life and the mismatch between workload and low control over long-term rewards can be described as detrimental working situations which may cause stress with a burnout as a result (Siegrist et al., 1996). The work of Vollery & Pullich (2010) argues that multiple studies have emphasized the findings of Siegrist et al. (1990). They underscore stressful work situations, including high work demands and low control causing poor individual health and well-being (e.g. Lee & Ashforth, 1996). The imbalance of effort and reward is considered as an environmental influence that is an antecedent of stress and may result in cardiovascular diseases (McKinlay and Marceau, 1999).
2.Literature ReviEw
2.1 Effort-reward Imbalance Model (Siegrist, 1996)
The ERI Model proposed by Siegrist et al. (1996) has been inspired by the work of French et al. (1982) and Karasek (1982). French et al. (1982) developed the person-environment fit model and Karasek (1979) developed the demand-control model. Both, empirically successful conceptual approaches are answering theoretical questions about the difficulties that are inherent in the study of associations between work and health in general, and between psychosocial hazards at work and adverse health outcomes in particular (Siegrist, 1996). The conceptual approaches mentioned above are control focused. Siegrist (1996) shifted the focus of analysis from control to reward to study the health effects of the imbalance in effort-reward conditions in occupational life.
To understand the ERI Model (appendix 1) of Siegrist et al. (1996), it is necessary to explain that the role of work in adult life is a decisive link between self-regulatory functions (e.g. self-esteem), self-efficacy and the opportunity of an occupational status related with returning options of contributing and performing, being rewarded or esteemed, and belonging to a group. These potentially benefits are contingent on reciprocity (i.e. a basic prerequisite of exchange in social life).
been characterized by a motivational pattern of excessive work-related overcommitment (Van Vegchel et al., 2004).
ERI consists on the one hand of effort and on the other hand of reward. The ERI Model claims that when there is a lack of reciprocity between costs and gains (i.e. imbalance in effort and reward) it will cause a state of physical or mental illness, particular associated with stress. This imbalance translates into high effort and low reward. In other words, when an individual put great effort in work, and will be low rewarded, the individual will experience a strained feeling of stress.
In the original ERI Model Siegrist et al. (1996), effort is divided in extrinsic and intrinsic factors, whereas extrinsic factors are explained as demands of the job or obligations, and where intrinsic factors are explained as critical coping (e.g. need for control). Demands of the job are referred to the misfit between the ability of the individual and the demands of the job. Critical coping is referred as the demand of control by the individual (Siegrist, 1996). Entrepreneurs have a high level of decision authority due to they own their own business and have the control in how their business is organized and how resources are distributed in the business.
Overcommitment has been added in the current ERI Model (Siegrist et al., 1999). This ERI Model can be found in appendix 2. Overcommitment has been recognized as a personality characteristic that reflects an enormous amount of ambition with the need of being approved and esteemed (Hanson et al. 2000). In the ERI Model overcommitment can be defined as a person specific component, whereas efforts and rewards compromise the situation-specific component (Van Vegchel et al., 2004).
irritability, and inability to withdraw from work (Siegrist, 1996). Van Vegchel et al., (2005) argues that some empirical studies were able to replicate the concept of immersion, whereas other studies were not able to replicate this concept. However, these studies emphasized that the factor of inability to withdraw from work was essential for the ERI Model (Hanson et al., 2000; Niedhammer, Siegrist, Landre, Goldberg, & Leclerc, 2000).
On the other side of the ERI Model, reward is explained as money, esteem, and security and career opportunities. Siegrist (1999) has replaced the concept of status control by security/career opportunities, there is no reason found in the literature for this replacement (Van Vegchel et al., 2005). This master’s thesis is using reward as proposed in the original ERI Model (i.e. reward consists of money, esteem, and status control) because it is more in line with the characteristics of the entrepreneur. The lack of status control impends a person’s self-regulatory function, an individual’s sense of mastery, efficacy, and self-esteem by raising strong negative emotions of fear, anger, or irritation (Siegrist, 1996). Tremendous research has been done and the main findings were that entrepreneurs have high job control and high job demands (Stephan and Roesler, 2010). Malach-Pines et al., (2005) argues that - according to multiple studies - entrepreneurs have distinct traits such as need for control, self-esteem, autonomy, independence, and a high motivation for achievement. This suggests that entrepreneurs are having a high need for status control. The associated proposition is:
Proposition 1: Entrepreneurs show overcommitment due to high job control and high demands.
2.2 Definition of Entrepreneurship
Many authors have given a definition to entrepreneurship. Hébert and Link (1989) has synthesizes the term entrepreneurship and describe an entrepreneur as a person, not as a team, committee, or organization. The entrepreneur has a relative advantage in decision making, and particularly makes decisions based either on conventional wisdom, because the entrepreneur has better information, or the perception of events of opportunities differ. In that sense, an entrepreneur must have the courage to make the decisions and must face the consequences. Entrepreneurs differ significantly from other occupational categories (Harris et al., 1999). For instance, the study of Langan-Fox and Roth (1995) suggests that entrepreneurs have higher levels of stress associated with workload. The study of Volery and Pullich (2010) emphasizes the work of Langan-Fox and Roth (1995), this study emphasize that entrepreneurial work is characterized by a heavy workload with little free time for breaks, and that entrepreneurial jobs are characterized by brevity and fragmentation. The associated proposition is:
Proposition 2: The work of an entrepreneur is characterized by a heavy workload with little free times for breaks, brevity, and fragmentation.
The definition of entrepreneur may be clear now, however there are different motives to become an entrepreneur which will be discussed in the next subsection.
2.3 Motives for entrepreneurship
Storey and Greene (2010) mention is the wish to continue the business and pass it on to family, it may be a hobby of the owner, or other owners think there is a chance of getting rich. However, Storey and Greene argues that there is a variety of motives and aspirations, but it is unwise to assume that these are primarily monetary (Gimeno et al., 1997). Boyd and Gumpert (1983) argues that entrepreneurship can be lucrative (i.e. financial rewards). Small businesses may offer the opportunity to start a substantial and profitable financial business, and second, being an entrepreneur has important psychic returns (i.e. esteem and independence). They describe it as having independency and freedom in decision making. Corman et al. (1988) emphasizes the work of Boyd and Gumpert (1983), they have found several motives to become a high-tech entrepreneur. First, seeking for career alternatives and deterioration of job satisfaction (e.g. necessity). Second, the identification of a new opportunity, need or problem solution. Finally, the external encouragement to start a business (e.g. family). The associated proposition is:
Proposition 3: Entrepreneurs have a variety of motivation; however, these are primarily non-monetary.
The industry of operation is considered as HT or LT. The following section describes the HT entrepreneur.
2.4 High-tech Entrepreneurs
aircraft and spacecraft, pharmaceuticals, office, accounting and computing machinery, radio, tv and communications equipment, and medical, precision and optical instruments. According to Corman et al. (1988), money is not the primary motivator for high-tech entrepreneurial activity. Elemental personal needs (e.g. esteem) are seen as the primary motivation, whereas money is seen as a secondary motivation. Bartov et al. (2002) has explored the divergence between internet and non-internet firms. Internet firms (i.e. firms with a high level of technology) are attributed mostly to cash-flows, sales growth, and R&D. The researcher assumes that a high level of commitment (i.e. effort to reach certain cash-flows and sales growths) increases the level of effort. This requires a higher level of commitment, which will inevitably increase the level of effort, with an uncertain level of reward (Boyd and Gumpert, 1983). This may cause a disequilibrium in the effort-reward balance. The associated proposition is:
Proposition 4: Entrepreneurs in the HT sector face a higher level of commitment than entrepreneurs in the LT sector.
2.5 Sources of stress
and rewards. Boyd and Gumpert (1983) illustrates this by when an individual is unable to go on an exotic vacation because he cannot afford it is one thing. It is another when an individual may afford the trip, however he or she is feeling unable to take it due to the business does not allow the absence of the entrepreneur.
2.6 Effects of stress
Proposition 5: When facing stress due to the imbalance of effort and reward, entrepreneurs are experiencing a state of emotional exhaustion and reduced levels of professional efficacy, exhaustion in general, and are more cynical to their job which are the characteristics of developing a burn-out (Maslach, 2003).
2.7 Coping with stress
Boyd and Gumpert (1983) suggest multiple coping mechanism to deal with stress. When an entrepreneur experience stress he or she can start do something about it. One approach is to use stress reduction techniques (e.g. meditation, muscle relaxation), another approach is to clarify the causes of stress. They continue with the findings of their research and suggests networking, getting away from it all, communicating with subordinates, finding satisfaction outside the company, and delegating as mechanisms to cope with stress. The associated proposition is:
3.METHODOLOGY
3.1 Introduction
The aim of this master’s thesis is to determine whether there is a divergence between high-tech and low-high-tech entrepreneurs in stress perception. This master’s thesis uses a multiple case study to explain the relationship between sector (i.e. high-tech vs. low-tech), stress, and entrepreneurship. The multiple case study consists of a qualitative data collection, and a quantitative data collection. The qualitative data collection consists of an entrepreneurial activity grid, a storytelling exercise, and a semi-structured interview. The quantitative data collection is a questionnaire to identify the chance of burn-out, based on the Maslach Burn-out Inventory (Maslach, 1981).
The next sections describes the reliability and validity, the participants profile, and each (i.e. qualitative and quantitative) data collection more extensively.
3.2 Reliability and Validity
instruments has been used (i.e. triangulation). All interviews were conducted at the preferred location of the entrepreneur (i.e. at the office, in the store, or in a café), and was recorded using a smartphone with the permissions of the participants. The time-span of conducting the interviews was six weeks, each interview took approximately 45 minutes. The total amount of pages that has been analyzed is 60, with an average of four pages per participant. However, the recorded audio files are not publicly available, first to ensure anonymity of the participant, second, the participants required to keep the audio files safely secured.
3.3 Participants Profile
High-tech and low-tech entrepreneurs with three to five years of entrepreneurial experience and five to eight years of entrepreneurial experience are considered as participants in this master’s thesis. According to the study of Bartov et al, (2002), internet firms (i.e. firms with a high level of technology) are attributed mostly to cash-flows, sales growth, and R&D. A high level of commitment (i.e. effort to reach certain cash-flows and sales growths) increases the level of effort. Following Siegrist et al. (1999) the entrepreneur may experience overcommitment with high levels of effort, which may create a disequilibrium in the effort-reward balance.
varies from 26 years to 64 years in the low-tech sector with an average 44 years. The total sample has an average age of 42 years. There were seven males in the high-tech sector, four females, and three males in the low-tech sector. There are five participants with entrepreneurial experience between three and five years, and two participants with entrepreneurial experience between five and eight years in the high-tech sector. Whereas five participants with five to eight years of entrepreneurial experience, and two participants with three to five years of entrepreneurial experience in the low-tech sector. The number of employees varies from five to 110 in the high-tech sector with an average of 32 employees. In the low-tech sector the number of employees varies from one to 22 with an average of eight employees.
3.4 Qualitative Data Collection
The qualitative data collection complies with the wish of the researcher to give insights in how stress affects the entrepreneurs. The qualitative data collection will consist of an entrepreneurial activity grid, storytelling, and a semi-structured interview. The aim of the entrepreneurial activity grid is to narrow down the subject of the data collection. While narrowing down the subject, the participant’s propensity to talk about other subjects is less likely. The entrepreneurial activity grid (Gartner, 1985 and Carter et al., 1996) contains five subjects with each three or four activities which the entrepreneur may have to cope with in his or her work as an entrepreneur. The entrepreneur was asked to circle red the activities which requires the most effort (i.e. are most demanding), and to circle green the activities that the entrepreneur feels are the most rewarding ones (in terms of e.g. esteem, money). The entrepreneurial activity grid can be found in appendix 3.
alarm clock. Picture two shows an image of a person who is working on his laptop. Picture three shows an image of a person who is calling with a laptop in front. Picture four shows an image of a group of persons who are having a meeting. Picture five shows an image of a person who is presenting. Picture six shows an image of a card catalog with cards of taxes, receipts, an envelope from the Dutch tax office, and a logo from the Dutch Chamber of Commerce. Picture seven shows an image of a train station. The entrepreneur was asked to tell what happens in each of the pictures, and how the entrepreneur feels throughout the day. The storytelling exercise can be found in appendix 3.
The semi-structured interview contains ten questions to get a better impression of the way the entrepreneur perceives his or her work as an entrepreneur. The semi-structured interview is testing the following dependent variables: motives, overcommitment, effort, reward, outcome
(stress) and coping with stress. The semi-structured interview is framed by the ERI Model of
Siegrist (1999). Questions regarding the effort (i.e. extrinsic for demands of the job, and intrinsic for critical coping) and the reward (i.e. money, esteem, and status control) linked to the level of stress are included in the semi-structured interview.
3.5 Quantitative Data Collection
framework of the MBI (1981) in order to apply the framework in an entrepreneurial context. The customized framework has three dimensions (topics), i.e. Professional Efficacy, Exhaustion, and Cynicism. Using this instrument, it gives the opportunity to measure the dependent variable burn-out. The framework consists of 16 questions, and can be answered on how often the event appears from 0 to 6, whereas 0 is never, and 6 is every day. Each dimension gives a score of high, moderate, or low. An example question of the professional efficacy dimension is: The entrepreneur is able to solve his or her problems effectively. An example question of the exhaustion dimension is: The entrepreneur is feeling burned out from his or her work. An example question of the cynicism is: The entrepreneur is doubting the significance of his or her work. Unfortunately, due to very recent restrictions regarding the MBI (1981), the questionnaire used is not included in this master’s thesis.
3.6 Data Analysis
The qualitative data has been analyzed by starting to make a transcript of the interviews to increase the reliability of the data, followed by coding the data. According to Saldana (2009), coding is the transitional process between data collection and more extensive data analysis. The coding used for this master’s thesis can be found in appendix 4. The transcribed data is analyzed by comparing the consistency and influence of the dependent variables. At the end of the result section, a table with the main findings is presented.
4.RESULTS
The results section reviews all the results of the data collection for all instruments used (i.e. the entrepreneurial activity grid, the story telling exercise, the semi-structured interview, and the customized MBI). First the entrepreneurial activity grid will be discussed continued with the results of each dependent variable (i.e. work characteristics, motives, effort, overcommitment, reward, outcome (stress), coping with stress, and burn-out) in subsections 4.3 to 4.10. In contrast with the methodology section the researcher is talking about entrepreneurs instead of participants. When speaking about he, his, or himself, the researcher is not explicitly talking about a male entrepreneur.
4.1 Entrepreneurial Activity Grid
The entrepreneurial activity grid consists of five subjects with each three or four entrepreneurial activities.
plan or think it is a waste of time and energy. Two out of the 14 entrepreneurs (2 HT) think it has a certain level of effort to form a legal entity for their business.
The second subject is resource management. The entrepreneurial activities are finance (i.e. saved money to invest, asking for funding, invested own money), human (i.e. hiring employees, organizing start-up team), and building and equipment (i.e. bought facilities, looked for facilities, rent/lease). The majority (five HT, five LT) of the entrepreneurs find finance a rewarding activity. The same majority thinks that the human aspects of the business are a rewarding activity. Whereas 11 entrepreneurs (two HT, one LT) see buying facilities (i.e. building and equipment) as a rewarding activity.
The third subject is marketing. Within the marketing subject, social networking, customer outreach and establishing partnerships are the entrepreneurial activities. Six out of 14 entrepreneurs (one HT, five LT) see marketing as an activity with a certain level of effort. It seems that entrepreneurs in the LT are more inclined to put more effort in social networking than HT entrepreneurs do. The same is true for customer outreach, five entrepreneurs (one HT, four LT) see it as an effort consuming activity. There is no significant difference in establishing partnerships, four entrepreneurs (one HT, three LT) think it is an effort consuming activity.
The fourth subject is production. Building prototypes, development of models and services, and outsourcing/managing production process are activities of the production subject. Not all activities in the production subject applies to entrepreneurs in the LT sector. To the extent that the majority of the HT entrepreneurs (five out of seven) see building prototypes, and the development of models and services as a rewarding entrepreneurial activity. The majority of the HT entrepreneurs (six out of seven) see outsourcing or managing the production process as an effort consuming entrepreneurial activity.
entrepreneurial activities of the fifth subject. Patents and licensing is not applicable to all entrepreneurs in the LT sector. The majority of the HT entrepreneurs has considered patents and licensing as an effort consuming entrepreneurial activity. Some entrepreneurs in the HT sector mention this as a complex and unclear procedure. However, they noticed that patents and/or licenses are inevitable in the industry of operation. The majority of the entrepreneurs (seven HT, five LT) consider environmental impact and sustainability as a rewarding entrepreneurial activity, and all of the entrepreneurs, except for one in the LT sector sees dealing with competition as a rewarding entrepreneurial activity. An overview of the results is presented in figure 2.
Fig. 1 Entrepreneurial Activity Grid
7 21 6 21 3 18 10 11 4 17 5 23 5 16 9 12 5 5 6 15 E F F O R T R E W A R D E F F O R T R E W A R D E F F O R T R E W A R D E F F O R T R E W A R D E F F O R T R E W A R D O R G A N I Z A T I O N / V E N T U R E B U I L D I N G R E S O U R C E M A N A G E M E N T M A R K E T I N G P R O D U C T I O N R E S P O N D I N G T O G O V E R N M E N T A N D S O C I E T Y
4.2 Work Characteristics
The majority of the entrepreneurs noticed to wake-up early between 7:00 am and 08:30 am. Some entrepreneurs experience stress in the morning due to family circumstances. These family circumstances are mainly due to having kids; they have to be taken to school before the workday. One entrepreneur in the LT sector noticed working at home causes even more stress, and one entrepreneur in the HT sector has negative associations when waking-up. When the entrepreneurs are awake, they do different activities such as drinking coffee, reading the newspaper, or checking e-mail. None of the entrepreneurs mentioned waking-up as a cause of stress at all.
The majority of the entrepreneurs checks their e-mail after arriving at the office or store. One entrepreneur in the LT sector mentioned not doing this on a daily basis, this entrepreneur also noticed that this could be a moment of stress due the lack of interest in computers. Other entrepreneurs, both in HT and LT mentioned that checking their e-mail is part of their daily routine, complemented with reviewing their agenda for the day, and start calling clients or suppliers. None of the entrepreneurs, except for the entrepreneur in the LT sector mentioned this picture as a stressful moment.
Four entrepreneurs in the HT sector say to have meetings with clients, suppliers, or employees. These four entrepreneurs are not considering meetings as a stressful situation. Three entrepreneurs in the HT sector say not having meetings due to the flat organization or do not have meetings because the entrepreneur simply do not like it. The entrepreneur who do not like having meetings consider this activity as a stressful situation. Two out of the seven LT entrepreneurs say having meetings with customer or suppliers, however not with employees due to the flat organization of the business. Five out of seven LT entrepreneurs say not having meetings at all due to the flat organization of the business.
The majority of the entrepreneurs in the HT sector give presentations to clients and/or employees. Three out of the seven HT entrepreneurs give presentations to clients and/or employees, whereas one entrepreneur reported to give presentations to other entrepreneurs, and one entrepreneur is mentioning KPI’s as a reason to present for. In the LT sector, entrepreneurs are less prone to give presentations. Five out of the seven LT entrepreneurs say not giving presentations at all, whereas one LT entrepreneurs say giving presentations to clients, and one LT entrepreneur say giving presentations to other entrepreneurs and students at school.
entrepreneurial experience between three to five years are more tended to do the accounting themselves, whereas small businesses with more than 10 employees or entrepreneurs with entrepreneurial experience between five to eight years are more tended to outsource the accounting by a professional accountant.
All entrepreneurs associate picture seven with working at home in the evening. None of the entrepreneurs are actually working at home in the evening. Some entrepreneurs are replying to important e-mails, however generally they try to do something else in their leisure time. Three out of the seven HT entrepreneurs mentioning they sometimes have diners with business partners, employees or friends. One entrepreneur in the LT sector reported to start the working day at 09:00 am, and stops at 18:30 pm due to the entrepreneur’s age. Overall, entrepreneurs report not trying to work at home, but due to the demands of being an entrepreneur it is inevitable not to work at home.
4.3 Motives
previous job, I saw an opportunity to start a new business with a new concept which was not there yet. Three out of the 14 entrepreneurs (one HT, two LT) describe their motivation as an opportunity. Three out of 14 entrepreneurs (two HT, one LT) started their own business because they got inspired by their entrepreneurial family. The results are presented in figure 3.
4.4 Effort
Two out of the 14 entrepreneurs (two LT) reported the tasks where they put the most energy/focus in as intrinsic. These entrepreneurs feel intrinsically tended to put the most energy/focus in because they like to do it. The other entrepreneurs (seven HT, five LT) describe the tasks where they put the most energy/focus in as extrinsic: “I have to do this task, because it is a fundamental part of the business”. These tasks are mainly concerned with commercial activities. One entrepreneur in the LT sector describes an extrinsic task as a physical effort. Other entrepreneurs describe these extrinsic tasks as tasks with obligations.
4.4.1 Effort Extrinsic
Seven out of 14 entrepreneurs (three HT, four LT) report to experience stress caused by extrinsic demands. Other entrepreneurs with stress caused by extrinsic demands reports the situations that are no longer in control, or the situations with input from outside. Seven out of 14 entrepreneurs (four HT, 3 LT) report having stress from extrinsic obligations. Entrepreneurs report stress caused by obligations such as pressure from deadlines or keep the business running in hard times. Entrepreneurs, particularly in the HT sector report having stress from extrinsic obligations when they cannot meet the requirements of the client. Regarding finance, there is one entrepreneur in the HT sector that argues to experience more stress when the financial situation is not good.
4.5 Overcommitment
failures, having bad nights, when things are not going as planned, and particularly in the HT sector when clients are not satisfied due to product or service failures. These work situations should be characterized as extrinsic; however, the entrepreneurs seem to be personally involved in these work situations.
4.6 Reward
Five entrepreneurs in the HT sector, and three entrepreneurs in the LT sector indicate a successful day as a day when everything is going well. They all have the same argument: “I have a successful day when everything is going well and that my employees are happy and made some success”. Particularly in the HT sector, entrepreneurs have a successful day when their employees are happy and satisfied. Other entrepreneurs’ motivations for a successful day are a good sale day, contact with customers, and variety. Overall, entrepreneurs have the feeling of a successful day more often than the feeling of having an unsuccessful day.
Siegrist (1999) describes rewards as money, esteem, and/or security/career opportunities. The majority of the entrepreneurs (five HT, five LT) say they are rewarded when they feel a high level of esteem (i.e. the feeling of being appreciated). Three out of 14 entrepreneurs indicated to be rewarded when they have a certain level of esteem, combined with financial rewards. One entrepreneur in the HT sector was very clear about rewarding: “Making money with something I like is rewarding to me. I am not interested in the appreciation of others”.
4.7 Effort-Reward Balance
now. When I have to travel for a business trip, I will take my partner with me, or I will do it less. So I can be more with my partner. That is what I have learned about it”.
Three out of the 14 entrepreneurs (two HT, one LT) say that the work-life balance is an effort for them. They describe it as working a lot, and not having a natural balance between work and personal life. Two entrepreneurs in the HT sector say having an unnatural balance between work and life. Overall, situations of which the entrepreneur cannot achieve the balance are mostly situations with high levels of stress at work, they describe it as situations where they have deadlines and have to work overtime: “When having a busy day, I cannot achieve the work-life balance as I want; fortunately, it is not happening often.
4.8 Coping
Entrepreneurs may reward themselves intrinsically (i.e. rewards that are non-monetary, and motivates the behavior of the entrepreneur because of the associated pleasure (Schultz, 2015)) or extrinsically (i.e. rewards that are monetary related, but are not pleasurable (Schultz, 2015)). Entrepreneurs (five HT, three LT) are rewarding themselves intrinsically after accomplishing an entrepreneurial goal: “When I accomplish an entrepreneurial goal, I celebrate it with a diner with friends. However, it is not like when I accomplish this, I may buy me a new TV or something”. One entrepreneur in the LT sector mentioned the long-term monetary rewards when selling the company: “When selling the business (long term) and it will generate lots of money, that would be rewarding for me. A daily reward (short term) would be to have everything organized nicely and having fun in my work”. Other entrepreneurs indicate not rewarding themselves at all (two HT, four LT).
HT, one LT), collaborate with others (one LT) compromise with clients’ complaints (one HT), take some rest (one HT), or search for the cause, tries to solve it, or tries to accept it and live with it (one HT). Overall, the entrepreneurs emphasize that these examples of coping with stress are rare, and not experience stress on a structural basis.
Entrepreneurs’ advice to cope with stress is varied from being open to others, to make the right choice. However, all entrepreneurs emphasize that there is no such direct answer to this. Four out of 14 entrepreneurs give as advice to be open to others, such as sharing stress and telling others you have stress. Other entrepreneurs’ advice to have a good partner at home, or in your business, so you can share the stress with him or her. Making the right choice is also a common advice in the sense of being rational, or the right choice to be an entrepreneur. Other advices that were mentioned by the entrepreneurs is be yourself, make an appropriate planning, seek for pleasure (e.g. participate in a sport, or having a wellness day), and be realistic in making your plans.
4.9 Outcomes (stress) 4.7.1 Performance at Work
4.7.2 Financial / Operational Business Performance
Seven out of 14 entrepreneurs (one HT, six LT) indicate that their stress has a negative effect on their business performance. Overall, these entrepreneurs say that stress may cause the wrong decisions for the business, or may not be able to help the customers as they want. One entrepreneur in the LT sector states that stress may have an effect on the innovation processes of the firm. Other entrepreneurs (six HT, one LT) argue that stress has no negative effect on the business performance. Overall, entrepreneurs say that stress has only effect on operational business performance. However, they find it hard to say whether this also influence the financial performance.
4.7.3 Personal Life
Eight out of 14 entrepreneurs (four HT, four LT) argue that they share the stress at home. They tell their partner or friends when they experience stress, many entrepreneurs feel talking about stress as relieving. Another entrepreneur in LT states that the stress almost cost his or her relationship. Other motivations of stress affecting the entrepreneurs’ personal life are negative expression to family (HT), lack of fun (HT), broke with partner (HT), and searching for distraction (LT).
4.10 Burn-Out
On average, entrepreneurs do not have the feeling of being exhausted, however one entrepreneur in the HT sector has a moderate score on exhaustion. This entrepreneur says to feel used up at the end of the workday a few times a week. This may be explained by the fact that this entrepreneur is having working days till 00:00 at the office on a structural basis.
There are four out of 14 entrepreneurs who has a cynical view of the business. One entrepreneur scores high, the other three entrepreneurs score moderate. The high scoring entrepreneur want to just doing his or her job and does not want to be bothered. This may be explained by the nature of his or her job. Additionally, this entrepreneur says that he or she has become more cynical about whether his or her job has anything to contribute, the researcher has no explanations for this outcome. The three entrepreneurs (two HT, one LT) who score moderately say that he or she wants to do his or her job, and do not want to be bothered, also they have become less interested and less enthusiastic since they started their business. Additionally, some entrepreneurs in the HT sector argue that starting a business pursue the highest level of enthusiasm which lasts for a maximum of three years.
HT LT + - + - Effort 7 7 Overcommitment 7 1 6 Reward 7 7 Effort-Reward Balance 5 2 6 1 Coping 5 2 3 4 Outcome (stress) 2 5 1 6 Burn-Out 7 7
Table. 1 Summary results
5.DISCUSSION
The aim of this master’s thesis is to determine whether there is a divergence between high-tech and low-high-tech entrepreneurs on the effort–reward imbalance which may cause stress, which may ultimately lead to a burn-out. The effort-reward imbalance model (Siegrist, 1999) has been proven in employment, however this research is the first in applying this model to entrepreneurship. This section discusses the analyzed results and will answer the research question: is there a difference between the HT and LT sector on the perception of stress?
The definition of Hébert and Link (1989), an entrepreneur as a person, not as a team, committee, or organization, and the entrepreneur has a relative advantage in decision making fits with the entrepreneurs.
5.1 Entrepreneurial Activity Grid
task. In summary, entrepreneurs in the HT and LT sector perceive making a business plan as an effort requiring activity. Entrepreneurs in the LT sector perceive marketing as an effort requiring activity, whereas entrepreneurs in HT perceive outsourcing the production process as an effort requiring activity.
5.2 Work Characteristics
Volery and Pullich (2010) argue that the job as entrepreneur is characterized by a heavy workload with little free time for breaks, and that entrepreneurial jobs are characterized by brevity and fragmentation. In accordance with the results, an average day in the entrepreneur’s life is characterized by brevity and fragmentation; a variety of tasks during the day of an entrepreneur. However, proposition 2 is partially supported; the entrepreneurs did not explicitly mention the heavy workload with little free time for breaks. There are no noticeable differences between HT and LT sector entrepreneurs.
5.3 Motives
The motives to become an entrepreneur differs. Corman et al., (1988) describes three types of motivations (i.e. necessity, opportunity, and family). The majority of the entrepreneurs in the HT and LT sector has chosen to become an entrepreneur due to necessity. Opportunity and family were also motivations of entrepreneurs to start their own business. There is no difference between the HT and LT sector. Therefore, proposition 3 is accepted.
5.4 Effort
emotional exhaustion (intrinsic effort) when there is a high need for control. Siegrist et al. (1996) argue that this is the case when a person with high need for control spend high costs (i.e. effort in terms of energy and job involvement) with relatively low gain. The motivations for need for control are diverge between entrepreneurs.
5.5 Overcommitment
Overcommitment (i.e. intrinsic, in person (Siegrist, 1999)) can be described as a need for control and approval, whereas the entrepreneurs in the HT sector main motivations for having emotional exhaustion are not meeting the customer demands, system-failures, and financial health of the business. Whereas in the LT sector the motivations are product-failures, physical fatigue, and personnel issues. According to the results, proposition 1 is accepted. All entrepreneurs report to be personally involved in these issues. None of the entrepreneurs showed the inability of withdrawing from their work or mentioned competitiveness as factors of need for control (Van Vegchel et al., 2005). However, perfectionism, need for approval, and disproportionate irritability were mentioned as factors of need for control (Siegrist, 1996).
The assumption that HT firms are more attributed to cash-flows, sales growth, and R&D (Bartov et al., 2002) which may increase the level of commitment, and causes higher levels of effort is not supported. Only one entrepreneur in the HT sector mentioned the financial situation of the business as a cause of stress. Therefore, proposition 4 is not accepted.
5.6 Reward
good sale day. All entrepreneurs in both sectors emphasize that successful days are more common than unsuccessful days.
According to Corman et al. (1988), monetary rewards are not the primary motivator for HT entrepreneurs. Instead, elemental personal needs (e.g. esteem) are preferred as primary motivator for HT entrepreneurs. The results indicate that entrepreneurs in both sectors perceives elemental personal needs as the primary motivator. In this case, the results are in line with Corman et al. (1988), however entrepreneurs in the LT sector needs to be considered as perceiving elemental personal needs as motivation as well.
5.7 Effort-Reward Balance
The majority of the entrepreneurs, both in HT and LT sector perceive their work-life balance as positive. However, all entrepreneurs indicate work is life, and life is work. This is in line with Boyd and Gumpert (1983), they argue that entrepreneurs are confused of where their work-life ends, and where their personal-life begins. Remarkably, three entrepreneurs (two HT, one LT) experience their work-life balance as negative. These entrepreneurs indicate having an unbalanced work-life situation due to personal circumstances, addiction to work, and work till late.
are characterized by sobriety. However, this is not scientifically substantiated, and is the gut feeling of the researcher.
5.8 Coping
Entrepreneurs cope with stress in many ways. In the LT sector, entrepreneurs are more tended to seek for distraction or share their stress with others, while there is no such clear pattern for the HT sector. Other ways of coping with stress are delegating tasks, collaborate with colleagues, take some rest, and search for the causes of stress. These results are in line with the results of Boyd and Gumpert (1983), their findings are networking (e.g. sharing of stress), getting away from it all (e.g. take rest), communicating with subordinates (e.g. collaborate with colleagues), finding satisfaction outside the company (e.g. seeking for distraction), and delegating (e.g. delegate tasks to partner or employees).
The entrepreneurs’ advice to other entrepreneurs is mainly the sharing of stress: “Sharing stress is reducing stress”. This is line with Boyd and Gumpert (1983), they mention networking as a coping mechanism for stress. Networking has been defined as sharing experiences with others. Therefore, proposition 6 is accepted.
5.9 Outcome (stress)
Gumpert (1983), and Maslach (1982), they state that a modest level of stress will enhance the performance of an entrepreneur.
Entrepreneurs, particularly in the LT sector say that their stress is affecting the business performance. The explanation of this may be found in the nature of their work. These entrepreneurs have to deal with clients personally, instead of entrepreneurs in the HT sector where contact with clients is mainly by e-mail or phone. In this sense, LT entrepreneurs are more tended to show their stress to clients than HT entrepreneurs do, which may lead to lower business performance. However, this affects mainly the operational performance of the business, while the entrepreneur finds it hard to say any conclusions about the financial business performance.
Another remarkable result is the effect of stress on the entrepreneur’s personal life. Entrepreneurs in both sectors are open in sharing their stress at home. In that sense, entrepreneurs are able to talk about their stress with their partner, friends, or family. Some entrepreneurs say that they experience high levels of stress in the last years. However, they have learned from this experience and are able to leave the stress at work. One remarkable result is an entrepreneur in the HT sector. This entrepreneur has lost his or her pleasure during the build-up of the business. The entrepreneur wants to find the pleasure back in life in the coming years. The loss of pleasure can be confirmed with the work of Boyd and Gumpert (1983), loneliness is a source of stress which will isolate entrepreneurs from people who they trust (e.g. family or friends).
5.10 Burn-Out
6.CONCLUSION
The aim of this master’s thesis is to get an insight in the psyche of HT and LT entrepreneurs and how they perceive stress. There are no remarkable differences in the HT and LT sector on the perception of stress. However, the results go beyond answering the research question and gives rich insights in the psyche of entrepreneurs. The ERI Model proposed by Siegrist et al. (1986) has been applied to a variety of psychological and behavioral outcomes (Van Vegchel et al., 2004). This master’s thesis is applying the ERI Model to entrepreneurs in the HT and LT sector.
The study of Bartov et al. (2002) suggests that HT firms are more attributed to cash-flows, sales growth, and R&D. However, the assumption of high levels of commitment in the HT sector, which will inevitably increase the level of effort with an uncertain level of reward, may cause a disequilibrium is not true. However, only one entrepreneur in the HT sector mentioned the financial situation of the business as a cause of stress.
To summarize the results, entrepreneurs do face a certain level of stress. Overall, entrepreneurs are able to cope with this certain level of stress by having a healthy work-life balance. Since entrepreneurs are enjoying their work, they are tended to ignore their certain levels of stress. For every sleepless night or struggling, there is the exhilaration of having a good sale day or solving a complex problem. Entrepreneurs are capable of anticipating the challenges and successes of their work more than facing the stress-related difficulties (Boyd and Gumpert (1983).
perception of reward is more complicated than suggested by Siegrist (1999). The ERI Model consider reward as an extrinsic situation (i.e. money, esteem, and status control). However, the results indicate that the reward system of entrepreneurs has more dimensions than initially was thought. Recent work of Schultz (2015) stresses that rewards can be intrinsic (i.e. rewards that are non-monetary, and motivates the behavior of the entrepreneur because of the associated pleasure) and extrinsic (i.e. rewards that are monetary related, but are not pleasurable). While the applicability of the ERI Model has been proven in a variety of psychological and behavioral outcomes (Van Vegchel et al., 2004), the ERI Model needs to be modified for the applicability in an entrepreneurial context. The author of this master’s thesis suggests a modified ERI Model (figure 2) to make the ERI Model applicable in an entrepreneurial context. In the proposed model, reward consists of extrinsic rewards (i.e. situation) and intrinsic rewards (i.e. personal). Intrinsic (personal) rewards are labeled as gratification. The way entrepreneurs reward themselves can be best described as such.
7.LIMITATIONS AND RECOMMENDATIONS
This master’s thesis has its limitations. The first limitation is the limited sample size of 14 participants. However, the saturation of the data shows that for the purpose of this research the sample size is sufficient. The down-side of this limitation is the lack of generalizability. The number of participants need to be increased in order to generalize the results, whereas a quantitative research is more appropriate. The second limitation is the ignorance of gender in this study. The studies of Baum and Grunberg (1991) and Matud (2004) argues that women are more tended to report stress in family and health-related events, and where men are more tended to report stress in relationship, finance and work-related events. More recently, Heilbrunn’s (2004) has found that female entrepreneurs are characterized by structural constraints such as family responsibility and lacking relevant resources such as social capital. They found that female entrepreneurs are more prone to constraints and therefor experience more stress than men do, especially in the start-up stage of the business. The study of Losocco and Robinson (1991) argues that women have a lack of management and business skills, and that this has an important impact on business performance. A third limitation is the relatively broad segmentation of sectors. However, there is a distinction made for HT and LT; in further research this has to be narrowed down to crystallize the participants group even further. A fourth limitation is the ignorance of the firm size. Finally, qualitative research methods may be influenced by the interviewer (bias).
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APPENDICES
Appendix 1 – Initial ERI Model (Siegrist, 1996)
Fig. 4 Initial ERI Model (Siegrist, 1996)
Appendix 2 – Current ERI Model (Siegrist, 1999)
Appendix 4 – Coding Book
Question Coding
1. What attracted you to entrepreneurship/what motivated you to become an entrepreneur?
Necessity, opportunity, family 2. What are the work tasks that you put most of your energy/ focus
into? Why?
Effort (Extrinsic and Intrinsic) 3. How would you describe stress/a stressful situation in your work
as an entrepreneur?
Effort- Extrinsic – Demands, Obligations
4. In which work situations do you feel emotionally exhausted? Effort- Intrinsic – Need for
Control, Coping,
over-commitment?) 5. How does a successful day look like for you? What makes you
feel accomplished at the end of the work day? (How often does “feeling accomplished” happen?
Finish work, everything is going well, good sale day, contact with customers, variety,
6. What is rewarding to you in your position as an entrepreneur? Money, esteem, status control
7. What does work-life balance mean to you? What do you do to achieve it?/ In which situations/cases do you think you cannot achieve it?
Effort (Extrinsic: e.g. time pressure) (Negative)
Reward (Positive) 8. a) How do you reward yourself after accomplishing your
entrepreneurial goals?
8. b) How do you cope with stress at work?
Coping – Extrinsic, Intrinsic
None, Delegate tasks,
collaborate, sharing of stress, seek distraction, compromise, take rest, search for cause 9. a) When you feel stressed, how does this affect your performance
at work?
9. b) How does the stress you experience at work affect your business performance (financial metrics such as sales, turnover), operational (product/process innovation)? When?
9. c) How does stress within your work as an entrepreneur affect your personal life?
Outcome – none, works more efficiently, irritated, tiredness Yes, no
Takes work at home, tells when having stress, searching for distraction, not sharing stress, negative expression, lack of having fun, broke with partner 10. Given your experience as an entrepreneur, what advice would you
give to other entrepreneurs in terms of managing stress?
