MGMT 377/PSYC 349:  Psychology of Entrepreneurship
Fall Semester 2007
Dr. Kelly G. Shaver

Class Hours: 4:00 - 5:15 TR
Tate 304
Office Hours: 2:00-3:00 TR
305 BeattyCenter

Course Description

Entrepreneurial ventures begin when people recognize and act upon market opportunities.  From the time of an initial business idea to the time that a firm is organized, most of the critical processes involve the psychological characteristics and the actions of individuals.  This course examines those psychological processes in detail through lectures, discussion, and cases.

Prerequisites (in exceptional cases may be waived by permission of instructor)

a.     Psychology prerequisite:  Psychology 103.

b.     Statistical prerequisite:  One of: (MATH 104, PSYC 211, DSCI 232)


There is no textbook for this course.  Readings come from the professional literature in both Psychology and Entrepreneurship and will be posted on WebCT.  Readings are listed below and by number in the Course Outline; they should be done in advance of class in order to facilitate discussion.

1.    Brockhaus, R. H. (1980). Risk taking propensity of entrepreneurs.  Academy of Management Journal, 23, 509-520.
2.    Brockner, J., Higgins, E. T., & Low, M. B.  (2004).  Regulatory focus theory and the entrepreneurial process.  Journal of Business Venturing, 19, 203-220.
3.    Carter, N. M., Gartner, W. B., Shaver, K. G., & Gatewood, E. J., (2003).The career reasons of nascent entrepreneurs.  Journal of Business Venturing, 18, 13-39.
4.    Ciavarella, M. A., Buchholtz, A. K., Riordan, C. M., Gatewood, R. D., & Stokes, G. S. (2004).  The Big Five and venture survival:  Is there a linkage?  Journal of Business Venturing, 19, 465-483.
5.    Forbes, D. P. (2005). Are some entrepreneurs more overconfident than others?  Journal of Business Venturing, 20, 623-640.
6.    Gartner, W. B., & Shaver, K. G.  (2004).  Opportunities as attributions:  The enterprise-serving bias.  In J. Butler (Ed.)  Opportunity identification and entrepreneurial behavior (pp. 29-46).  San Francisco, CA:  Information Age Publishing.
7.    Gatewood, E. J., Shaver, K. G., Powers, J. B., & Gartner, W. B. (2002).  Entrepreneurial expectancy, task effort, and performance.  Entrepreneurship Theory & Practice, 27, 187-206.
8.    Hackman, J. R., & Porter, L. W. (1968),  Expectancy theory predictions of work effectiveness.  Organizational Behavior and Human Performance, 3, 417-426.
9.    Higgins, E. T.  (1998).  Promotion and prevention:  Regulatory focus as a motivational principle.  In M. P. Zanna (Ed.), Advances in experimental social psychology (Vol. 30, pp. 1-46).
10.    Janis, I. L., & Mann, L.  (1977).  Decision making.  Chapter 1 (pages 3-19), Chapter 2 (pages 21-41), and Chapter 3 (pages 45-80).
11.    Miller, D. T., Turnbull, W., & McFarland, C.  Counterfactual thinking and social perception:  Thinking about what might have been.  In M. P. Zanna (Ed.) Advances in experimental social psychology (Vol. 23, pp. 305-331).
12.    Mullins, J. W., & Forlani, D.  (2005).  Missing the boat or sinking the boat:  A study of new venture decision making.  Journal of Business Venturing, 20, 47-69.
13.   Shaver, K. G. (2007). C2D2: Psychological methods in entrepreneurship research.  In J. R. Baum, M. Frese, & R. A. Baron (Eds.), The psychology of entrepreneurship (pp. 335-346).  Mahwah, NJ: Lawrence Erlbaum Associates.
14.    Shaver, K. G., & Scott, L. R.  (1991).  Person, process, choice:  The psychology of new venture creation.  Entrepreneurship Theory & Practice, 16(2), 23-45.
15.    Shepherd, D. A., & Krueger, N. F. (2002).  An intentions-based model of entrepreneurial teams’ social cognition.  Entrepreneurship Theory & Practice, 27, 167-185.

Data and Experience

In recent years high-growth entrepreneurial firms have created a substantial proportion of the new jobs in the United States. This fact has permeated popular culture, with entrepreneurs celebrated in the national media. Not surprisingly, all of this attention has encouraged a number of myths about the people who create entrepreneurial organizations.  Fortunately, recently available data from the Panel Study of Entrepreneurial Dynamics (PSED) allow us to say some important things about who entrepreneurs really are, how they are similar to and different from other people.

It is one thing to read about factors that affect entrepreneurial behavior, but a more complete understanding can be reached by doing some of the things that entrepreneurs do.  No, you won’t be writing a business plan.  Or developing an idea for a product or service (unless you take other courses in Entrepreneurship).  On the other hand, you will be asked to form work teams, develop procedures for evaluating everyone’s performance, present your ideas in class, and obtain information from people (right, not just web sites) you don’t already know.  Each of these activities will be graded, and your performance on each will be part of your grade for the semester.

Requirements and Evaluation

Nine elements of your class performance will be graded, each worth the points shown below (more complete descriptions follow the table).

Captain’s choice article summary


Full article summary


Elevator pitch for a past course


Performance appraisal system


Howard Schultz profile


Your selection profile


Your selection presentation


Within-team ratings


Class participation


Grading scale:  90% = A; 80% = B, 70% = C,  60% = D .

             Article Summaries.  Journal articles written for professional audiences are typically much more difficult to understand (even for the professionals!) than are textbooks.  At the beginning of the course we'll talk about how an article should be read.  To reinforce this material there will be two article summaries during the first 5 weeks of the course.  The first of these summaries, due at the end of the third full week of class, is a "captain's choice":  Each of you will be asked to summarize only one section of an article, all summaries will be posted, the entire class will vote for the best summary of each section.  The "captain's choice" assignment is worth 20 points.  At the end of the 7th week of the semester, you must turn in a summary (not to exceed 2 double-spaced pages) of an entire article.  This article summary will be worth 40 points.

            Elevator Pitch.  Entrepreneurs need to be able to give a convincing explanation of their business ideas in a very limited time.  You find yourself in an elevator with a potential investor, and you have until the door opens to make your best case.  Hence the name.  None of you is expected to have a business idea, but the process is the same regardless of the content.  The elevator pitch (to be done without notes) is limited to 60 seconds, and the success of the pitch will be determined by the instructor.  The elevator pitch is worth 20 points; the number of points awarded will either be 20 or zero (no partial credit).

            Performance Appraisal System.  One of the things entrepreneurs do when creating companies is create a corporate culture for the company.  At the very minimum, a corporate culture is reflected in the way the company does its business, evaluates and rewards its employees.  The foundation for subsequent development of “company policies” is the set of guidelines that the members of the founding team use to assess each other’s performance.  Each team will need to develop its own performance appraisal system.  Initially, the comprehensiveness and sophistication of the team’s internal system will be worth 120 points.  At the end of the semester, team members will use the team’s system to conduct evaluations of each other, and these final evaluations will be worth 40 points.

            Schultz Profile.  Student teams (no fewer than 4 people per team, no more than 5) will create an "entrepreneurial profile" of Howard Schultz, the founder of Starbucks.  Each profile must have the following elements:  (a) a clear selection of at least five different dimensions on which the entrepreneur is to be evaluated, with a research-based justification for each dimension selected, (b) specific items developed to assess each dimension on the profile, (c) an explicit description of how the individual items are to be scored and combined together to assess the dimension, and (d) the team's "best guess" about how Howard Schultz would answer each item. This entrepreneur profile is worth a total of 80 points, 20 points per section.  Each team member receives the team score for the profile.

            Entrepreneur Profile.  The Schultz profile is intended to serve as a “proving ground” for each team’s profile of an entrepreneur they select on their own.  This profile must have (a) dimensions on which the entrepreneur is to be evaluated, (b) items created to assess each dimension, (c) the description of how the items are to be scored, and (d) the entrepreneur’s answers to each item.  The Schultz profile, as modified in response to my comments about it, should serve as the basis for this second profile.  Because of the added difficulty inherent in finding a willing entrepreneur and collecting the information, this second profile is worth 160 points.  In the last week of classes, teams will present their individual profiles in class, and this presentation will itself be graded (worth 60 points). 

            Attendance and Participation.  Myths about entrepreneurial behavior exist in part because of individual errors in cognitive processes.  These can be discovered and corrected only if students are present to hear the discussion, so attendance is required.  Every unexcused absence will result in a loss of 25 points.  Readings are to be done in advance of class and participation is expected. Across the semester, participation will be worth a total of 60 points.  (Please note that participation can "go negative": three absences will cost 75 points, thereby wiping out excellent participation during the remainder of the semester.)

Course Outline

Aug. 21
General introduction to the course
Aug. 23
Formation of project teams
Aug. 28
A psychological approach to entrepreneurial behavior
Aug. 30
Implications of the psychological approach
Sep. 4
Conceptualizing "risk" in social behavior
Sep. 6
Whose risk is it, anyway?
Sep. 11
Risk assessment and risk management
Sep. 13
Risk: Comparisons between nascent entrepreneurs and others
Sep. 18
Principles of decision making
Sep. 20
Multiattribute utility scaling as a means of decision support
Sep. 25
Personality characteristics and entrepreneurs
Sep. 27
Are you an "entrepreneurial personality?
Oct. 2
Entrepreneurial motivation
Oct. 4
Push, pull, goals, objectives
Oct. 9
Optimism among entrepreneurs
Oct. 11
Counterfactual thinking: imagining what might have been            ELEVATOR PITCHES IN CLASS
Oct. 16
Fall Break

Oct. 18
PSED meeting                                                                          EMAIL PERFORMANCE APPRAISALS
Oct. 23
Motivation and opportunity 9
Oct. 25
                                                                                                SCHULTZ PROFILE DUE
Oct. 30
Opportunity recognition as a process 2
Nov. 1
Expectancies for success                                                          ARTICLE SUMMARY DUE
Nov. 6
Expectancies and entrepreneurial behavior
Nov. 8
Basics of attribution theory
Nov. 13
Attributions for success and failure
Nov. 15
Negotiations                                                                             ENTREPRENEUR PROFILE DUE
Nov. 20
Entrepreneurial organizations
Nov. 22
Thanksgiving break
Nov. 27
Profile presentations I                                                               CORRECTED PROFILES PRESENTED
Nov. 29
Profile presentations II                                                              CORRECTED PROFILES PRESENTED ---