Self-efficacy and entrepreneurs' adoption of unattainable goals: The restraining effects of self-control

• Published in: Journal of business venturing 2016-01, Vol.31 (1), p.55-71
• Main Authors: Baron, Robert A., Mueller, Brandon A., Wolfe, Marcus T.
• Format: Article
• Language: English
• Subjects: Entrepreneurs; Financial performance; Goal setting; Self control; Studies
• ISSN: 0883-9026; 1873-2003
• DOI: 10.1016/j.jbusvent.2015.08.002

Goal setting theory suggests that difficult goals enhance performance on many tasks. When goals are so difficult as to be unattainable, however, they may generate discouragement and reduced motivation, with the result that performance, too, is decreased. Previous research indicates that entrepreneurs are high in self-efficacy and, as a result, may tend to set goals that are so difficult that they cannot realistically be achieved. We reason that self-control, one important aspect of self-regulation, may restrain this tendency and encourage entrepreneurs to set goals that, although difficult, are also attainable. Results offer support for this hypothesis. Goal setting theory also predicts a positive relationship between goal difficulty and performance. We suggest, and find, that this relationship is curvilinear: up to a point, increases in goal difficulty are positively related to firm performance, but beyond this point, further increases in difficulty are negatively related to firm performance. The findings of this study contribute to knowledge concerning the role of entrepreneurs' self-regulation in the performance of their companies. •Because entrepreneurs are high in self-efficacy the goals they set for their ventures are often highly ambitious.•While challenging goals are often beneficial, overly challenging goals may result in feelings of discouragement and, therefore, reduced performance.•Our findings indicate that entrepreneurs' tendency to set “unattainable” goals can be restrained by high self-control.•We also find that, overall, the relationship between goal difficulty and firm performance is curvilinear (inverted U-shape). [Display omitted]