Entrepreneurship Theories

What is the expectancy theory of entrepreneurship? Expectancy theory was developed to explain work motivation and organizational behavior ( Kanfer, 1990 ). It has since been used to explain additional behaviors, including entry into entrepreneurship. Expectancy theory starts with the concept of motivational forces that Vroom (1964) expressed as an equation: MF = V x I x E, where V = valence, I = instrumentality, and E = expectancy. Valence refers to the value that an individual places on the outcome of their efforts—such as the importance of financial rewards. Instrumentality refers to the belief that if an individual meets performance expectations, that they will actually receive the reward. Expectancy is the belief or probability that an individual’s effort will result in the desired goal being achieved. Since the equation involves multiplication, it implies that if any one of the parts is zero then the motivational forces equal zero. Valance depends upon the individual’