Self-Efficacy Theory

The concept of self-efficacy was developed by Bandura (1977), who has since become known as the father of self-efficacy. Bandura (1977) describes four key psychological processes through which self-efficacy affects human functioning. The four psychological processes are: (1) cognitive processes, (2) motivational processes, (3) affective processes and (4) selection processes.

4.6.1.1 Cognitive Processes

The effects of self-efficacy beliefs on cognitive processes take a variety of forms.

Most human behaviour, being purposive, is regulated by forethought embodying valued goals. Personal goal setting is regulated by self-efficacy in that the stronger the self-efficacy held by individuals, the higher the goal challenges people set for themselves and the firmer their commitment to them (Bandura, 1994).

Most courses of action are initially organized in thought (Schiffman and Kanuk, 2010). People’s beliefs about their level of efficacy shape the types of anticipatory scenarios they construct and rehearse (Feltz and Lirgg, 2001). Individuals with a high level of efficacy imagine successful scenarios, while those with low self-efficacy visualize failure scenarios (Feltz and Lirgg, 2001). It is difficult to achieve much while fighting self-doubt. It requires a strong sense of efficacy to remain task oriented in the face of pressing situational demands, failures and setbacks that have significant repercussions. Indeed, when people are faced with the tasks of managing difficult environmental demands under taxing circumstances, those who are beset by self-doubts about their efficacy become more and more erratic in their analytic thinking, lower their aspirations and as a result, the quality of their performance deteriorates (Bandura, 1997). In contrast, those who maintain a resilient sense of efficacy set themselves challenging goals and use good analytic thinking which pays off in performance accomplishments (Bandura, 1994).

4.6.1.2 Motivational Processes

Self-efficacy has a strong influence in the self-regulation of motivation. Most human motivation is cognitively generated (Schiffman and Kanuk, 2010). Individuals motivate themselves and guide their actions anticipatorily by the exercise of forethought (Schiffman and Kanuk, 2010). Three different forms of cognitive motivators exist around which different theories have been built: (1) attribution theory, (2) expectancy-value theory and (3) goal theory (Bandura, 1994). Self-efficacy beliefs operate in each of these types of cognitive motivation (Bandura, 1994).

4.6.1.3 Affective Processes

Individuals’ self-efficacy and their beliefs about their coping capabilities affect how much stress and depression they experience in threatening or difficult situations, as well as their level of motivation (Bandura, 1997). Perceived self-efficacy to exercise control over stressors has a central role in anxiety arousal (Feltz and Lirgg, 2001).

Individuals that believe they can exercise control over threats do not conjure up disturbing thought patterns; however, those who believe they cannot manage threats experience high anxiety arousal. Such individuals dwell on their coping deficiencies and view many aspects of their environment as fraught with danger (Bandura, 1994).

4.6.1.4 Selection Processes

Individuals are partly the product of their environment (Schiffman and Kanuk, 2010).

Thus, beliefs of personal efficacy can shape the course individuals’ lives take by influencing the types of activities and environments individuals select (Feltz and Lirgg, 2001). Individuals avoid activities and situations they believe exceed their coping capabilities and readily undertake challenging activities that they judge themselves capable of coping with (Bandura, 1977). The choices individuals make cultivate different competencies, interests and social networks that determine the course of their life (Bandura, 1994). Any factor that influences choice behaviour can profoundly affect the direction of personal development, as the social influences operating in selected environments continue to promote certain competencies, values, and interests long after the efficacy decisional determinant has rendered its inaugurating effect.

As can be seen through self-efficacy’s cognitive, motivational, affective and selection processes and the fact that banking is an innovative product for many Tanzanians, self-efficacy is likely to be a key contributor towards the high unbanked population in Tanzania. As the theory will be used in the study to determine the role of self-confidence in consumers’ decision in Tanzania to open a formal bank account, it is necessary to review the criticisms of the theory in order to avoid any pitfalls that have been identified as well as to ensure its credibility.

4.6.1.5 Criticism of Self-Efficacy Theory

Self-efficacy theory has been widely tested in varied disciplines and settings and has received support from a growing body of findings from diverse fields. Self-efficacy beliefs have been found to be related to clinical problems such as phobias (Bandura, 1983), addiction (Marlatt, Baer and Quigley, 1995), depression (Davis and Yates, 1982), social skills (Moe and Zeiss, 1982), to stress in a variety of contexts (Jerusalem and Mittag, 1995); to smoking behaviour (Garcia, Schmitz and Doerfler, 1990); to pain control (Manning and Wright, 1983); to health (O'Leary, 1985) and to athletic performance (Barling and Abel, 1983).

However, despite the success and academic support which self-efficacy theory has received, it is not without criticism. The most notable criticism of self-efficacy theory has come from Marzillier and Eastman (1984), who were critical of the model on a conceptual and methodological basis.

Marzillier and Eastman (1984) state that their biggest criticism of the concept of self-efficacy does not lie in its plausibility, but rather in the theoretical status of the construct as defined by Bandura (1977). Marzillier and Eastman (1984) suggest that there is a fundamental ambiguity in Bandura’s (1977) definition of self-efficacy and that it arises out of his attempt to define self-efficacy expectations independently of outcome expectations. Both self-efficacy and outcome considerations are seen as being equally important in determining change and Marzillier and Eastman (1984) argue that it is impossible to exclude considerations of outcome from any assessment of personal self-efficacy.

Marzillier and Eastman’s (1984) second line of criticism concerns the methodology used by Bandura (1977) and his colleagues in assessing self-efficacy expectations.

Marzillier and Eastman (1984) feel that the strong relationship between self-efficacy assessments and later behaviour change suggested by Bandura (1977) is made to appear more impressive than it is as a result of using a hierarchical rating scale.

Bandura has dismissed these criticisms of his theory as being unsubstantial and states that Marzillier and Eastman (1984) “need not fear that perceived self-efficacy

will usurp the lion’s share of the variance in human conduct”. Self-efficacy theory continues to remain one of the most influential theories of human behaviour and is accepted as being a valid theory by Ajzen (1985), which can be seen by the development of the construct perceived behavioural control based on Bandura’s (1977) work. For these reasons, despite the criticism of self-efficacy theory by Marzillier and Eastman (1984), self-efficacy theory will be used in the study to operationalize and measure perceived behavioural control.

4.6.1.6 Altering Self-Efficacy

Bandura (1990) has suggested a method of altering negative behaviour and increasing an individual’s self-efficacy when dealing with detrimental lifestyle practices. While the suggestions of Bandura (1990) pertain to detrimental lifestyle choices when dealing with HIV, the principles are relevant and can be applied to the population of Tanzania when considering the practice of not partaking in formal banking. The suggested method of change has three steps: (1) informational, (2) controlling self-efficacy and (3) skill enhancement and building resilient self-efficacy.

i. Informational

According to Bandura (1990), the preconditions for change are created by increasing individuals’ awareness and knowledge. Thus, if banks in Tanzania are to increase their customer base they need to increase the awareness of the population about the existence of products and services in the formal banking sector, as well as their knowledge about products and services (both of these points have been identified as barriers to becoming a client of the formal banking sector by Finscope (2007)).

The informational component of the model of self-directed change has two factors:

(1) the informational content of the message and (2) the mechanisms of social diffusion. Detailed factual information about products and services offered by the formal banking sector and their benefits must be imparted socially in an understandable, credible and persuasive manner. Once informational messages have been developed, they require dissemination in order to be effective.

Dissemination is likely to prove problematic in Tanzania as the majority of the

population live in rural areas and little mass media communication exists in the country. Banks will likely be required to travel to remote villages to hand out fliers or provide presentations as many of the individuals are illiterate.

ii. Controlling Self-Efficacy

Bandura (1990) states, that it is not merely sufficient to convince individuals that they should alter their behaviour. Most individuals will require guidance on how to translate their concerns into efficacious actions. In a study conducted by McKusick, Horstman and Coates (1986), it was found that individuals who possess knowledge, but have a low level of self-efficacy, were unable to act on their knowledge. Bandura (1990) states that social modelling should be used to build self-assurance, as well as convey rules on how to deal with a troublesome situation. The influence of modelling on beliefs about one’s capabilities relies on comparison with others. Individuals judge their own capabilities in part from how well individuals that are similar to themselves exercise control over situations. Individuals will develop stronger belief in their capabilities and more readily adopt modelled ways, if they see models similar to themselves solve problems successfully with the modelled strategies, than if they see models that are different from themselves (Bandura, 1986). To increase the impact of modelling, the characteristics of models such as age, sex and status, the type of problems with which they cope and the situation in which they apply their skills, should be made to appear similar to the individual’s own circumstances.

iii. Enhancement of Proficiency and Resiliency of Self-Efficacy

Proficiency requires extensive practice and once individuals gain knowledge of new skills, they need opportunities to perfect these skills. Initially, individuals practice in simulated situations where they need not fear making mistakes or appearing inadequate. Simulated situations can be achieved by role playing, in which individuals practice handling the types of situations they have to manage when becoming a client of the formal banking sector. During the role playing activity, individuals can receive information feedback on how they are doing and the corrective changes that need to be made. The simulated practice is to be continued until individuals perform the task proficiently and spontaneously.

While guided practice improves the skills of individuals, it also raises their efficacy. Experiences in exercising control over banking situations will act as self-efficacy builders for individuals. If individuals are not fully convinced of their personal efficacy, they undermine their efforts in situations that tax capabilities and readily abandon the skills they have been taught when they fail to get quick results or suffer reverses. The important matter is not that difficulties rouse self-doubts, which is a natural immediate reaction, but rather the degree and speed of recovery from setbacks. It is resiliency in perceived self-efficacy that counts in maintenance of changes in health habits.