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Business owners' action planning and its relationship to business success in three African countries
Michael Frese1, Stefanie I Krauss, Nina Keith
1Department of Work and Organizational Psychology, Interdisciplinary Research Unit on Evidence Based Management and Entrepreneurship, Justus-Liebig-University, Giessen, Germany. michael.frese@psychol.uni-giessen.de
Abstract:
A model of business success was developed with motivational resources (locus of control, self-efficacy, achievement motivation, and self-reported personal initiative) and cognitive resources (cognitive ability and human capital) as independent variables, business owners' elaborate and proactive planning as a mediator, and business size and growth as dependent variables. Three studies with a total of 408 African micro and small-scale business owners were conducted in South Africa, Zimbabwe, and Namibia. Structural equation analyses partially supported the hypotheses on the importance of psychological planning by the business owners. Elaborate and proactive planning was substantially related to business size and to an external evaluation of business success and was a (partial) mediator for the relationship between cognitive resources and business success. The model carries important implications for selection, training, and coaching of business owners.