Asbe association for Small Business & Entrepreneurship




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Association for Small Business & Entrepreneurship 33rd Annual Conference





Austin, Texas

October 10-12, 2007







ASBE

Association for Small Business & Entrepreneurship


­­­­­­­­­­­­­­­­

Officers 2007



Greetings!


On behalf of the Association for Small Business and Entrepreneurship, I would like to welcome you to the Fall, 2007 annual meeting! I would also like to take this opportunity to recognize the work of Martin Bressler, Vice-President Programs, who has worked diligently to put together the program for this conference.


As demands on all of our time are many, I would also like to extend my sincere thanks to our membership who remain loyal to the organization. Our membership is our lifeblood and I know that we all appreciate the time and energy you continue to invest in ASBE.


Our organization continues to rise to the challenge of meeting separate from the Federation of Business Disciplines. We are currently being faced by other issues, including tightened academic travel budgets as well as an increase in the number of Fall academic meetings. The officer team will be seeking the input of the membership as we address these challenges. If you have input you would like to share, please bring it to the business meeting.


Enjoy the conference! Also, plan now to attend nest year’s ASBE conference!


Sincerely,


Leslie A. Toombs

President, ASBE


President

Leslie A. Toombs

School of Business

University of Texas of the

Permian Basin

4901 E. University

Odessa, TX 79762-0001

(432) 552-2203

432) 552-2174 (FAX)

toombs_l@utpb.edu


Vice President-Programs

Martin Bressler

Houston Baptist University

7502 Fondren Road

Houston, TX 77074

(281) 649-3448

(281) 649-3436 fax

mbressler@hbu.edu

Vice President-Membership

Kathleen Liang

University of Vermont,

103C Morrill Hall

Burlington, Vermont 05405

Phone (802) 656 0754

Fax (802) 656 1423

cliang@uvm.edu


Secretary/Treasurer

Raydel Tullous

University of Texas at San Antonio
(210) 458-5381

(210)458-6350
rtullous@utsa.edu


ASOCIATION FOR SMALL BUSINESS


& ENTREPRENEURSHIP


PAST PRESIDENTS


1975-76 Robert W. Smith, North Texas State University

1977 Ann Hughes, University of Texas, Arlington

1978 Don Altman, Abilene Christian University

1979 Paul Dunn, Northeast Louisiana University

1980 Charles Neil, Texas Tech University

1981 R. Dean Lewis, Sam Houston State University

1982 John Todd, University of Arkansas

1983 Robin Peterson, New Mexico State University

1984 Ray Robbins, University of Arkansas, Little Rock

1985 Gwen F. Fontenot, North Texas State University

1986 Jude Valdez, University of Texas, San Antonio

1987 Homer L. Saunders, University of Central Arkansas

1988 Clyde Spruell, University of Science & Arts of Oklahoma

1989 Don B. Bradley III, University of Central Arkansas

1990 Walter E. Greene, University of Texas, Pan American

1991 Geralyn M. Franklin, Stephen F. Austin State University

1992 Norton E. Marks, California State University, San Bernardino

1993 Herb Lawrence, Gateway Technical College

1994 Buddy Gaster, East Central University

1995 William T. Jackson, Stephen F. Austin State University

1996 Alicia B. Gresham, Stephan F. Austin State University

1997 Louis D. Ponthieu, University of North Texas

1998 Robert D. Gulbro, Athens State University

1999-2001 Don B. Bradley III, University of Central Arkansas

2002 William T. Jackson, University of Texas of the Permian Basin

2003 Patti L. Wilber, Northwestern Oklahoma State University

2004 Corbett F. Gaulden, University of Texas of the Permian Basin

2005 Kitty Campbell, Southeastern Oklahoma State University

2006 Leslie A. Toombs, University of Texas of the Permian Basin


Acknowledgements


It has been my privilege to serve as Program Chair this year for the 2007 ASBE Conference. There were many interesting papers submitted, which is a good sign that as researchers we are advancing our field and our profession by expanding the knowledge base for industry, our students, and for fellow faculty members. I could not have completed this task without the assistance of several key individuals. First, I would like to thank Dr. Leslie Toombs, ASBE President, for her help and guidance throughout this process. Kitty Campbell, Raydel Tullous, and Kathleen Liang, have also provided me with assistance throughout this year. In addition, my work study student Mary Dau has done a truly great job putting together all the papers and documents to produce excellent proceedings. Dr. Jane Licata and the editorial staff at the Journal of Business & Entrepreneurship evaluated the final papers to select the Best Paper Awards. Finally, I would like to thank the session chairs and reviewers listed below for their assistance in evaluating and selecting the papers for presentation.


Reviewers

Ed Cole, St. Mary’s University

Stephen Jones, Arkansas Technical University

Jon Pratt, Louisiana Technical University

Ken Lacho, University of New Orleans

R. Tucker Peterson, New Mexico State University

Dan Benco, Southeastern Oklahoma State University

Kitty Campbell, Southeastern Oklahoma State University

Jane Licata, Southeastern Oklahoma State University


Session Chairs

R. Tucker Peterson, New Mexico State University

William T. Jackson, University of South Florida at St. Petersburg

William Smith, Emporia State University

Kitty Campbell, Southeastern Oklahoma State University

Kathleen Liang, University of Vermont

Raydel Tullous, University of Texas at San Antonio

Leslie Toombs, University of Texas at Permian Basin


Thank you for the opportunity to serve as your Program Chair for the 33rd annual Association for Small Business & Entrepreneurship Conference. I look forward to seeing you all next year!


Sincerely,


Dr. Martin Bressler

Professor of Marketing & Entrepreneurship

Houston Baptist University


2006/2007 ASBE Officers


President:
Dr. Leslie A. Toombs
University of Texas of the Permian Basin


Vice President Programs:
Dr. Martin Bressler
Houston Baptist University


Vice President Membership:
Dr. Kathleen Liang
University of Vermont


Secretary/Treasurer:
Dr. Raydel Tullous
University of Texas at San Antonio


2007 ASBE Conference Session Chairs


Robin Peterson

New Mexico State University


William T. Jackson

University of South Florida St. Petersburg


William Smith

Emporia State University


Martin S. Bressler

Houston Baptist University


Kitty Campbell

Southeastern Oklahoma State University


Leslie Toombs

University of Texas at Permian Basin


Raydel Tullous

The University of Texas at San Antonio


Chyi-lyi (Kathleen) Liang

The University of Vermont

EXPLORING THE MYTHS OF OPTIMISM AND REALISM IN ENTREPRENEURSHIP RELATED TO EXPECTATIONS AND OUTCOMES


Chyi-lyi (Kathleen) Liang, University of Vermont

Paul Dunn, University of Louisiana at Monroe


Abstract


This article presents a novel approach to measure entrepreneurial optimism/realism and their relationship to expectations and outcomes of new venture creation. We have discovered that many entrepreneurs are optimistic or realistic. Further analysis shows that there is no significant relationship between optimism and entrepreneurs expectations that the new venture will improve personal and family well being. Being pessimistic or realistic, however, seems to relate to positive expectations among some entrepreneurs. After creating and running their own businesses, being optimistic or realistic does not have a significant relationship with positive outcomes.


The over-weening conceit which the greater part of men have of their own abilities, is an ancient evil remarked by the philosophers and moralists of all ages. Their absurd presumption in their own good fortune has been less taken notice of. It is, however, if possible still more universal. There is no man living who, when in tolerable health and spirits, has not some share of it. The chance of gain is by every man more or less over-values, and the change of loss is by most men under-values, and scarce by any man, who is in tolerable health and spirits, values more than it is worth.” Adam Smith, Wealth of Nation, Book I, Chapter X (p.107) http://geolib.com/smith.adam/won1-10.html


Introduction


The idea of entrepreneurial optimism appeared in economic literature early. Adam Smith described his view on how optimism related to personal assessment of values when considering abilities and economic activities. Optimism, one of the most common attributes studied in many psychological experiments, has become an entrepreneurial characteristic that often appears in entrepreneurship studies. Unfortunately entrepreneurship literature has not provided empirical evidence that proves whether or not entrepreneurs are optimistic, levels of optimism among different entrepreneurs, and how optimism relates to personal/family satisfaction in new venture creation. Are entrepreneurs really optimistic? Have we mixed the concept of optimism with “positive illusion” (Ottesen & Gronhug, 2005) which is a misperception of oneself and the environment that can lead to faulty investment and failure? Have we overly stated the effects of optimism on new venture creation without exploring different human natures?


More (1998) discussed the possibility that people are both optimistic and realistic – those of us who think of ourselves as rational, clear headed, may say, “I am neither an optimist nor a pessimist, I am a realist.” More (1998) believed that we intend to express a commitment to truth, sound judgment and rationality in making such a statement. More (1998) believed that the nature of the world meant that to be realistic we normally have to be optimistic. But how do we capture the essence of optimism or realism in entrepreneurship?

Some economic literature has challenged the missing components of entrepreneurship in economic theories, and has provided conceptual approaches to synthesize the relationship between entrepreneurial traits and new venture formation (Baumol, 1968; Cole, 1942). It is critical for researchers to recognize that entrepreneurs are the center of new venture creation, who capitalize intellectual and physical assets in the process of wealth creation by discovering and transforming unique opportunities into new ventures. While entrepreneurship researchers often conceptually describe optimism related to entrepreneurs and the consequences of new venture creation, there is little data to verify if entrepreneurs are optimistic and how optimism influences personal or family experiences in new venture creation. What is more important is that there has been no tool developed in either psychology or entrepreneurship to measure “realism.” We know that it is reasonable to say that unrealistic optimism would likely lead to disasters for new ventures. The question is – how do we measure optimism or realism before we can explore such notions “realistic optimism” or “unrealistic optimism”?


This article presents some of the first empirical evidence to explain (1) if entrepreneurs are really optimistic or realistic when they decide to create their own businesses, (2) different perceptions of optimism or realism among entrepreneurs, and (3) how optimism or realism relates to entrepreneurs’ assessment of personal and family satisfaction in the process of new venture creation. This study is among the first to (1) adopt the Life Oriented Test – Revised (a robust tool commonly applied in psychological research) to study entrepreneurial optimism; (2) create a new tool to capture the essence of realism, (3) create a bridge between conceptualized framework in entrepreneurship and clinical experimental approach in psychology to examine human nature; and (4) analyze the relationship, if one exists, between optimism and entrepreneurial outcomes expectations and their perceptions of satisfaction in new venture creation. Several assumptions of this study include – entrepreneurs participated in this study make rational and reasonable decisions and judgment, their behaviors do not change in the study time period, and the environment and economic situations (exogenous factors) stay constant during the study period.


This study is in preliminary stage and it is not the authors’ intention to generalize the results of this study. We realize that there has been a major gap in entrepreneurship theory to establish a systematic approach that could explain who entrepreneurs are and how their traits relate to new venture decisions. We also acknowledge that new venture creation is a dynamic process that will change significantly from time to time given political or economic changes. The long term goal of this study is to gather sufficient data to formulate a robust conceptual theoretical framework including testable hypotheses and using multivariate equilibrium approach to study entrepreneurial individuals.


Literature Review


Researchers in the entrepreneurship field often relate optimism to other entrepreneurial characteristics (self confidence, high expectations, willingness to accept risks, etc.) that could impact on certain entrepreneurial decisions in investment, new venture creation, work/life choices, or success/failure of entrepreneurial actions. Researchers in psychology usually investigate optimism (sometimes contrasted to pessimism) as an attribute that links to positive thinking, better outcomes, personal control, personal well-being, coping strategy, self-esteem, or interactions between individuals in different cultures and environments. Interestingly there is almost no research or experimental findings that directly examine realism. Realism is often linked to optimism given the terms realistic optimism or unrealistic optimism. There has been no discussion about how to synthesize the variations between optimism and realism in either psychology or entrepreneurship.

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