Psychological capital and entrepreneurial outcomes: the moderating role of social competences of owners of micro-enterprises in East Africa

Abstract

Business success arises out of the total investments in the venture. This is not limited to tangible inputs such as financial capital, but on intangible resources as well. Entrepreneurship is a highly stressing occupation involving undertaking risks and often demanding workloads; hence requiring mental inputs (psychological capital). Moreover, the entrepreneurial job also involves doing business with other people of different statuses including investors, partners, customers, and employees; hence requiring the entrepreneur to exhibit a great deal of social competence to relate with others. Using two independent studies, we assess the contribution of psychological capital and social competence, as well as their interaction to entrepreneurial outcomes including performance (Study 1), and entrepreneurs' wellbeing, satisfaction, and commitment to their entrepreneurial career role (Study 2). Study 1 uses a sample of 102 owner-managers or managers of small companies in Uganda. In this study, entrepreneurs' social competence is measured as the relationship between entrepreneurs and their employees. Study 2 uses a sample of 228 young self-employed individuals in Uganda and Kenya; and operationalizes social competence via social intelligence. The results were consistent with our assumptions, highlighting the relevance of both psychological capital and social competence to entrepreneurial outcomes. Yet their interaction also has substantial impact on all outcomes examined in these studies.

Caught Between Autonomy and Insecurity: A Work-Psychological View on Resources and Strain of Small Business Owners in Germany

“…In the group of solo self-employed of the BIBB/BAuA employment survey, the lowest value was given for agriculture workers in men (30.10) and cleaners in women (32.20) and the highest for doctors or pharmacists (191.30). Finally, there might be important differences regarding voluntariness of, and hence commitment to, the self-employed role ( Baluku et al, 2018a , b ). As there were no data available concerning the willingness to stay in solo self-employment, we used the unemployment quote by gender as a proxy to have an indicator of a range of difficult economic situations and thus higher or lower employment stability.…”

“…Work is essential for gratification of the basic psychological needs of autonomy, competence, and relatedness ( Van den Broeck et al, 2016 ) which in turn foster psychological growth and well-being ( Ryan and Deci, 2001 ; Deci and Ryan, 2008 ; Van den Broeck et al, 2016 ). In terms of self-employment, existing research indicates that entrepreneurs tend to be happier and report high levels of psychological well-being ( Binder and Coad, 2013 ; Baluku et al, 2018a ; Shir et al, 2018 ; Nikolaev et al, 2019 ). In contrast, individuals tend to experience serious mental health challenges such as low self-esteem, substance abuse, and severe mental health concerns when they are out of work ( Blustein, 2008 ; Otto and Dalbert, 2013 ).…”

Impact of personal cultural orientations and cultural intelligence on subjective success in self-employment in multi-ethnic societies

“…These cultural orientations are particularly relevant to entrepreneurship because of their relationship to social skills and behavior. Previous research has already demonstrated that social competencies such as the ability to have quality interactions are essential for entrepreneurial success (Baluku, Kikooma, Bantu, & Otto, 2018;Baron & Markman, 2000. In this direction, the present study examines whether cultural intelligence (a socio-cultural competence) mediates the relationship between personal cultural orientations and success in self-employment in a multiethnic context.…”

Positive psychological capital, market orientation, and business performance of family business in the culinary sector: A research study

“…According to some studies, itl has a direct positive relationship with business performance (Peterson et al, 2011;Sweetman et al, 2011), success (Culbertson et al, 2010;Baluku et al, 2018) as well as desired psychological outcomes (Avey et al, 2010). Therefore, it is appropriate to assume that a direct relationship exist between psychological capital and business performance, the hypothesis is stated as follows: H1 Positive Psychology Capital has a direct effect on business performance.…”

“…It is usually valued when challenges such as an increase in financial capital are substantially dependent on endurance capital (that is, a collection of personal resources used for family businesses). It is also a strategic resource that affects both economic and non-economic performances (Baluku et al, 2018).…”