Employee transition to entrepreneurship: the influences of families and firms Thesis uri icon

abstract

  • There is an emerging recognition that employees who transition from organization employment to become entrepreneurs may have identified valuable entrepreneurial opportunities and may subsequently have better entrepreneurial performance than other individuals. However, employees are usually reluctant to transition to entrepreneurship due to the risky income in entrepreneurship compared to a guaranteed income in organizational employment. This dissertation investigates how and why some employees and not others transition to entrepreneurship. It specifically focuses on how family influences may condition this transition decision. Existing studies in entrepreneurship have highlighted the positive influence arising from parental entrepreneurship activity on their offspring’s propensity to become entrepreneurs. This dissertation first, argues that such an influence is dependent on parental performance in entrepreneurship and secondly, provides empirical support for this argument in the context of self-employment using US data. The dissertation shows that, parental failure in self-employment has a negative influence on their offspring’s subsequent propensity to transition from organizational employment to self-employment. The dissertation also investigates the employee transition process which has been overlooked by previous studies. The results show that, employees seek to have an economic safety net and favourable labour market conditions to protect their families against negative economic consequence of possible failure in entrepreneurship. Also, employees may transition to entrepreneurship by joining new firm management teams. The identification of an entrepreneurial opportunity may not be a necessity for employee transition to occur. The insights gained from the dissertation indicate two ways in which societies may increase entrepreneurship activity, (i) encouraging employee transition to entrepreneurship, and (ii) encouraging flexible working time arrangements. In essence the dissertation raises the question of whether organization employment is incompatible with employee entrepreneurship activity outside the employer organization.

publication date

  • 2007

keywords

  • Business, Entrepreneurship, employee transition, employment

number of pages

  • 124