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Entrepreneurs’ Emotional Responses to a Bankruptcy
Jönköping University, Jönköping International Business School, JIBS, EMM (Entrepreneurship, Marketing, Management).
Jönköping University, Jönköping International Business School, JIBS, EMM (Entrepreneurship, Marketing, Management).
Jönköping University, Jönköping International Business School, JIBS, EMM (Entrepreneurship, Marketing, Management).
2007 (English)Independent thesis Basic level (degree of Bachelor), 10 points / 15 hpStudent thesis
Abstract [en]

Entrepreneurs are often perceived to be creative and risk taking (Kreuger, 2002). The purpose of this paper is to investigate entrepreneurs’ response to a failure namely a bankruptcy. People react differently to a bankruptcy and tend to blame different things as the cause. Some blame themselves while others blame things out of their control. These differences can have an impact on the learning process and how easy the entrepreneur moves on after the failure. These findings can be used for situations when dealing with failures and entrepreneurial activities.

There is no single theory already existing for this topic, therefore several theories have been looked at and used for the analysis. The theories can be divided into five main areas: entrepreneurship, failure, entrepreneurial response to failure, factors affecting responses to failure and learning. Entrepreneurship is treated as the creation of new economic activity (Davidsson, 2004) and entrepreneurial traits (Kreuger, 2002) are considered in the analysis. Locus of control is an important trait since it shows the ability of the entrepreneur to think that they are in control of the environment. (Rotter, 1966) In order to explain the cause of a bankruptcy people tend to use certain attributions. Locus of causality refers to whether a person blames internal or external causes and stability whether these causes are changeable in the future or not. (Martinko, 1995) Several factors will influence the response to a bank-ruptcy and in this thesis motivation for the start-up, culture and separation of the company are looked upon. After a failure an entrepreneur can learn false lessons (McGrath & Cardon, 1997) and stop any entrepreneurial activities. However failure can also be positive if something true has been learnt. (Wiklund, 2006)

This report is an exploratory type of study and a case study was conducted where five cases were used with entrepreneurs that have run companies that have gone bankrupt. A qualitative method was used and the empirical findings were gathered trough interviews which were then analysed with the support from the theoretical framework.

In the analysis new models were created that showed patterns we found comparing the in-terviews. It also includes discussion about how culture affects the blaming factors of fail-ure. The factors that an entrepreneur is blaming the failure on are much depending on to what degree they possess entrepreneurial traits. This paper also suggest that how personally an entrepreneur takes his/her failure depends mostly on how financially dependent they were on their company and also how experienced they were from failure. Another finding was also that all the participants agreed that it is not a supportive business culture in the Jönköping region. Another conclusion is that entrepreneurs that blame their failure on in-ternal factors learn more from it, but this learning can be less significant due to earlier ex-perience from failure.

Place, publisher, year, edition, pages
2007. , 53 p.
Keyword [en]
Entrepreneurship, entrepreneur, failure, attributions, bankruptcy, learning
Identifiers
URN: urn:nbn:se:hj:diva-742OAI: oai:DiVA.org:hj-742DiVA: diva2:4472
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Available from: 2007-03-15 Created: 2007-03-15

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