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Personal Initiative Training for Business Owners in South Africa Matthias Glaub (University of Giessen), Michael Frese (University of Giessen) Kristina Gramberg (University of Giessen), Christian Friedrich (University of the

Western Cape), and Goosain Solomon (University of the Western Cape)

Acknowledgments: We gratefully acknowledge the partial funding of this research through the Deutsche Forschungsgemeinschaft (German Research Community, project no.: FR 638/13-1, title "Psychological success factors of small and micro businesses: The role of goals and strategies"). Corresponding author: Michael Frese at

Michael.frese@psychol.uni-giessen.de.

ABSTRACT

Business Schools grapple with the issue of including skill development, particularly of proactive skills. Research shows that personal initiative is important for small business owners’ success. As a theory-based interventions study, a 3-day personal initiative training program for small scale business owners was evaluated, that taught a proactive, self-starting approach to planning, innovation, time management and goal-setting and the ability to overcome barriers (using a pretest-posttest design with a non-equivalent control group). Personal initiative training produced positive changes with increased competencies of personal initiative and proactive goal-setting and planning, innovation and time management, and higher sales in comparison to a control group. Positive effects occurred on all four of Kirkpatrick’s (1967) evaluation levels: reaction, learning, behavior-based, and success measures.

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Personal Initiative Training for Business Owners in South Africa

Business schools have been interested in teaching entrepreneurship both to future business owners as well as to people who are currently owning business. Many scholars have suggested to concentrate more on skill and competency development in business schools (Boyatzis, Stubbs, & Taylor, 2002; Goshal, 2005; Honig, 2004; Mintzberg & Gosling, 2002; Pfeffer & Fong, 2002).

A set of competencies of particular importance for business owners is related to personal initiative. PI is behavior characterized by its self-starting nature, its proactive approach, and by being persistent in overcoming difficulties that arise in the pursuit of a goal (Frese, Kring, Soose, & Zempel, 1996). It is central for business owners to self-start because there are no supervisors who tell the business owner what to do. Moreover, business owners need to do things that are not done by others to get extra profit. Owners should set their goals actively to anticipate future opportunities and obstacles – this has been suggested to be the very essence of entrepreneurship (Shane & Venkataraman, 2000). They also have to be able to overcome difficulties, for example, start again after set-backs and motivate themselves on a day-to-day basis. Although owners may not necessarily know that they need such skills, such skills are useful for eventual success as a business owner because they are needed to deal with customers, suppliers, competitors, to increase the efficacy of making business related decisions and managing and motivating employees (Markman, in press). This paper explores whether changing personal initiative within a short (3-days) action training increases success in black small-scale business owners in Cape Town, South Africa.

Not only is personal initiative and an active approach important for business owners – of similar importance is that the approach to training must be similarly active

and activating. Therefore, this study focused on a business training that used both goals of activating the business owners as well as the processes to do so.

Finally, there is a general need to do long term studies on the efficacy of theory based interventions. There are relatively few systematic evaluations of such training programs (Harper & Finnegan, 1998; Katz, in press). This paper is looking at the long term effectiveness of such interventions.

PERSONAL INITIATIVE (PI) AND OWNERS’ SUCCESS

Personal Initiative (PI) is arguably at the core of what is demanded of successful business owners. PI is a behavior characterized self-starting, proactivity, and

overcoming difficulties (Frese et al., 1996).

Self-starting implies that owners are not just waiting to see what others do, but start an action without being told or without an explicit role model (Frese & Fay, 2001). Owners can only be ahead of their competitors, in terms of products, services, strategies to approach customers, getting information from customers, etc. if they pursue such self-set goals. A high degree of PI may be an important reason for first mover advantages (locally defined) (Lieberman & Montgomery, 1998). The second aspect of PI, proactivity, implies a long-term focus (Frese & Fay, 2001). A high degree of PI means to recognize and exploit future opportunities. Recognizing and exploiting opportunities have been described as the very essence of entrepreneurship (Shane & Venkataraman, 2000). The same applies for a proactive stance with regard to problems. Owners should prepare to deal with future problems now and should not wait until they have to deal with them. Overcoming barriers or persistence is usually necessary to reach one's goal. Particularly new goals do not always work, adjustments are necessary, and sometimes owners have to backtrack. Technical, bureaucratic, organizational, and customer related barriers may appear. In spite of these barriers, business owners should

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stay on track by persisting to pursue their goals. Case studies are full of examples of business owners who persist in spite of great difficulties or high resistance in the environment.

Empirically, PI was significantly related to economic success in various studies in Africa (Crant, 1995a; Koop, de Reu & Frese, 2000; Spencer & Spencer, 1993). Proactiveness (one component of PI) has been consistently linked to business performance in the literature on entrepreneurial orientation (Lumpkin & Dess, 1996; Krauss, Frese, Friedrich, & Unger, 2005; Rauch, Wiklund, Frese, & Lumpkin, 2005). Thus, it makes sense to put PI at the center of a psychological training for business owners.

TRAINING INTERVENTION

Figure 1 presents the training as a pedagogical intervention and how it is connected theoretically to the concept of PI. PI is related to innovativeness, proactive goal setting, proactive planning, time management, and emotion self-regulation. In the following we introduce the training components, their relevance for small and medium-scale business owners and how they were trained. The order in which they are described them is not the order in which they were presented to participants (cf. Appendix).

Innovation

Innovation is the introduction of products, processes or procedures that are new to the context (West & Farr, 1990). It consists of at least two components – a creative idea and the implementation of the idea (West, 2002). PI is intertwined with innovation because self-starting implies to do something new (at least locally) and overcoming barriers refers to an implement phase of new things (Frese & Fay, 2001).

High competition, limited resources and a changing business environment require innovations. Owners can reduce high competition by developing market niches;

niches are often new niches, at least locally. A changing business environment requires fast adoption and finding solutions to upcoming problems. But innovation is more than just reacting to changes. Through its proactive character it plays a key role in facing future markets (Hamel & Prahalad, 1994) and detecting and exploiting opportunities (Shane, 2003). Empirical evidence supports the importance for innovativeness for business success (Boshoff & Scholz, 1995; Frese, 2000b; Lumpkin & Dess, 1996). The training component ‘Innovation’ was intended to convince the participants to invest more time and effort into producing innovative solutions and to teach them methods and techniques to be more creative. Research has shown that generation of creative ideas can be affected by training (e.g., DeTienne & Chandler, 2004).

Proactive Goal Setting

Specific and challenging goals have been shown to increase performance in organizational settings (Locke & Latham, 1990a) by increasing persistence, directing attention, and mobilizing effort. Baum, Locke and Smith (2001) found significant causal relationships for goal setting and visions with venture growth. It follows, that owners who aim for high and specific goals and who are able to communicate these goals are more successful than owners with low and unspecific goals (Bird, 1989).

The concept of PI emphasizes the importance of self-starting goals, of long term goals and of thinking about long term problems and opportunities that need to be translated into goal setting (Frese & Fay, 2001). Combining this with the goal setting literature emphasis on specific and challenging goals (Locke & Latham, 1990b) makes sense and is useful. Moreover, both goal setting and PI theory posit that self-efficacy is one of the prerequisites of following challenging goals (Speier & Frese, 1997).

The training module of proactive goal setting focused on developing specific, concrete, measurable, time-bound, realistic and challenging short- and long-term goals.

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Using these principles of goal setting were supposed to increase the participants’ commitments to goals generated during training.

Proactive Planning

Planning should help the owners to be successful (Frese, Krauss, Keith, Escher, Grabarkiewicz, & Unger, 2005), because planning increases the chance that people get started to put their goal into action and mobilizes extra effort (Gollwitzer, 1996), amplifies persistence or decreases distraction (Diefendorff & Lord, 2004) and leads to better knowledge on contingency conditions and time allocation to tasks, and to a clearer focus on priorities (Tripoli, 1998). Planning also helps to deal with the inherent insecurities of being a business owner by making good use of scarce resources (Rauch & Frese, 2000). Planning in business owners implies a high degree of pro-activity because there is no superior who tells the owner what to plan for and how to plan. Studies show that proactive planning is highly effective for business owners, both in Africa and in Europe (Frese et al., 2005; Frese, Brantjes, & Hoorn, 2002; Van Gelderen, Frese, & Thurik, 2000).

Plans relate thoughts and actions and specify the steps to achieve a goal (Miller, Galanter, & Pribram, 1960). Planning is proactive when it relates to future problems and opportunities. Planning should not be overly detailed but detailed enough to think about important issues that need to be taken care of, as well as contingencies, potential problems and plan Bs to overcome such problems (Honig, 2004; Mumford, Schultz, & Osburn, 2002). Thus, back-up plans in case something goes wrong and a flexible use of planning are important.

The training module ‘Planning’ aimed to stress the importance of planning for business success, to provide knowledge about the different types of (non-) planning

strategies, and to help the participants to generate a plan for their own business in the sense of a personal project (Little, 1983) for the next 4 – 6 months. The training emphasized that planning should be done every day, that a plan can and should not be complete, and that it should not be confused with a one time plan in the sense of a business plan.

Time Management

Time management is one aspect of proactive planning – planning of time and coping with lack of time. Owners of small businesses have to deal with high time pressure. Using time management, owners actively identify important tasks, set priorities and plan their daily business according to the importance of tasks. Since time management emphasizes “important” issues over “urgent”, there is a proactive component in time management. The training component ‘Time Management’ followed the traditional treatment of time management, for example emphasizing prioritizing – which is also in line with the issue of self-started planning. Research on time management is still rare - the few studies about the relation between time management and its correlates show equivocal results (Bost, 1984; Britton & Tesser, 1991; Smith, 1992; Macan, 1996).

HYPOTHESIS The hypotheses of this study are straightforward:

H1: The pedagogical intervention (training) leads to high positive satisfaction (reaction variables), to increases in relevant knowledge (learning variables), to improved behaviors (behavior based variables), and to higher business success (success variables).

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H3: Insofar as training was effective in increasing personal initiative, it was also effective in producing improvements in learning, behavior based, and success variables.

ACTION TRAINING

The intervention applied an action training approach shown to be useful in enhancing various skills and competencies (Carroll, Mack, Lewis, Grischkowsky & Robertson, 1985; Ford, Kozlowski, Kraiger, Salas, & Teachout, 1997; Martocchio & Duhlebohn, 1994; Frese, Beimel, & Schoenborn, 2003, cf. Table 1). This training concept also included components of behavior modeling (Bandura, 1986; Latham & Saari, 1979) by giving examples of successful and less successful owners.

The components of action training (Frese, Beimel, & Schoenborn, 2003; Frese & Zapf, 1994; Semmer & Pfäfflin,1978) are to develop an action oriented mental model, to develop routines of the newly acquired behaviors, to learn by doing, to motivate by experiencing the difference between present state and future goals (‘experiental method’), to provide feedback in training, and to support transfer. Table 1 provides an overview of the action training approach. The training aims at activating people to work on issues immediately relevant for their business and to transfer training content to their everyday activities.

First, action training aims at developing an action oriented model. The better developed this model – the cognitive representation of action - the better is

performance. The cognitive model is organized by principles or “rules of thumb”, for example in the form of principles of good goal setting. Training has been shown to profit from such principles (Volpert, Frommann, & Munzert, 1984).

Second, a learning by doing approach is used via introducing practical exercises into the training. Thus, a common problem of teaching - the difficulty to connect the principles learnt to everyday concrete actions - is reduced.

Third, learning requires positive and negative feedback, particularly in the beginning of the training. Negative feedback informs the recipient about what the participant has not yet learned or fully understood and is especially informative when it is specific and includes information on how to improve actions (Semmer & Pfäfflin, 1978). Participants learn from errors and making errors is encouraged (Heimbeck, Frese, Sonnentag, & Keith, 2003). Positive feedback points to behavioral facets the trainee has learned. Giving feedback was more pronounced in the first phase of training than in later parts of the training. In the beginning, feedback was provided by the trainer with action principles serving as guidelines. Later, the participants became more active in giving each other feedback and judging their own performance. This training strategy is supposed to make feedback more and more a self-regulatory process.

Fourth, transfer is fundamental for the success of a training program (Baldwin & Ford, 1988). Therefore, the training concept incorporated task-orientation into the training in the following ways: (a) Normal work tasks were used; therefore, all exercises were directly related to the participants’ tasks. (b) The participants were asked to apply the training content to their normal work situation, e.g. writing down the goals for their business. (c) Application contracts were used to strengthen the commitment to goals developed in the training (Hesketh, 1997). As a sort of realistic preview of practice, the participants were asked to anticipate possible barriers and problems that they would be confronted with and how they would overcome such obstacles. (d) Another method to strengthen the commitment to transfer knowledge included choosing an

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“implementation partner”. (e) Transfer in action training was also enhanced by using the action-oriented principles.

Fifth, newly learnt behaviors compete with the old well-rehearsed routines (Frese & Zapf, 1994). Therefore, the training offered practical exercises that were supposed to routinize the newly learned behaviors.

METHOD Participants and Study Design

A non-randomized control group pre-test/post-test design was used to control for effects of maturation, history, and testing (Cook, Campbell, & Peracchio, 1990). Measurements were taken before (T1) and directly after the training (T2, only training participants), 5 – 7 months (T3), and 24 months after the training (T4).

The participants were recruited with the help of three organizations1 supporting small-, micro- and medium-size businesses in the Western Cape region and by a random walk through industrial areas and asking owners to participate. The organizations supplied us with random samples of members to contact by phone. The sample consisted of the following population: The owners 1) belonged to the group of formally disadvantaged black South Africans, 2) were currently owners of a business and responsible for managing the firm on a day-to-day basis, 3) had operated for at least one year, and 4) had at least one employee. A total of 84 small scale business owners of the Cape Town region participated in an interview conducted at their premises (T1 - before the training). All of owners were invited to participate in the training; of these, 27 business owners chose to participate (three of those missed half a day because of unexpected business problems). The cost for participating was 150 South African Rand (about US$ 20).

1 BON (Business Opportunities Network Western Cape), WECBOF (Western Cape Business

Opportunities Forum, and CLOTEX (Western Cape Clothing and Textile Service Center).

Those 57 business owners who did not participate in the training had not been willing to participate (N = 51) or they had wanted to participate but the timing had been bad for them (N = 6). Of these 57 business owners, 30 agreed to take part in the post trainingevaluation and thus, formed the control group. At T3, 5-7 months after the training, an interview was done at the business premises (12 of control and 11 of training group) or a questionnaire was returned (18 of control group and 16 of training group). The questionnaire contained the same questions as the interview. At T4, two years after the training, we evaluated long-term training effects with 16 training participants and 15 members of the control group.

There were no significant differences between training and control groups in sample characteristics. Average age of participants was 40 years (SD = 7.52) with a range from 25 to 49 years. Females were 19% in training and 18% in control group. Participants came from all lines of business, e.g. information technology, clothing manufacture, construction and installation, retail/trade, and consulting. The ethnicity of the owners was in the training group 15% “Black” and 85% “Coloured” (terms that are still used in South Africa, although they slowly become “politically incorrect” – Coloureds had suffered a somewhat lower degree of discrimination in the apartheid era than the Blacks) and in the control group 9% and 91% respectively. Fifty-seven per cent had finished 12 years of education or above in both samples. The business had been started on average 9 years ago (SD = 9) with a range from 1 to 19 years in the training group. The owners had an overall average of 8 employees (SD = 9.5) with a range from 1 to 48 employees in both groups.

Measures

We used measures from questionnaires and structured interviews (the latter generally show good validity, Wiesner & Cronshaw, 1988). The answers to the

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interview questions were written down in a protocol and later rated by the interviewer and a second rater. Ratings were done on a 5-point-Likert scale. Inter-rater agreements were calculated with the Two-Way Mixed Effect Model (People Effect Random, Measure Effect Fixed) of the Intraclass Correlation Coefficient (Shrout & Fleiss, 1979). Inter-rater agreements were generally good and ranged from r = .83 to 1.0. Thus, subsequent calculations were done with the mean of the two raters. Table 2 presents the measures with reliabilities, sample sizes, means, standard deviations, and interrater agreements. All scales were divided by the number of items.

Following suggestions by Kirkpatrick (1967) and Latham and Saari (1979) we used different evaluation levels to assess training effectiveness: 1) reaction measures, 2) behavior based measures, 3) learning measures and 4) success measures. Reaction measures ascertained satisfaction with the training and the transfer motivation of the participants (measured directly after the training, at T2). As learning measures we used knowledge tests (at T1 and T3). Behavior based measures were indirectly obtained through exercises during the pre-training interview (T1) and by means of an interview or a questionnaire at T3. Success measures were obtained at T3 and T4.

Reaction Measures

Training Satisfaction: A 4-item satisfaction scale on content, delivery, exercises, and overall satisfaction with the training was developed for this study (Kunin faces ranging form –3 to +3). Wanous, Reicher, and Hudy (1997) found the Kunin Scale (1955) to be the best measure of overall job satisfaction (α = .75). Would recommend training: To assess whether satisfaction with the training was stable over time, the item “To what degree would you recommend this training to your colleagues” was asked at T2 and at T3. Transfer Motivation: Directly after the training participants were asked how much they were motivated to transfer what they had learnt in the training (21 items

on a 5-point-Likert scale, not at all likely to very likely) The items covered the different training contents, e.g. „To what extent do you think you will feel more committed to your goals than you did before the training” (α = .94). Qualitative Statements: Directly At T2, training participants were asked for written comments. Statements on the training and the implementation of planned projects were also obtained during calls at T3.

Learning Measures

Knowledge tests were developed for proactive goal setting and time

management. A Goal Setting Knowledge test (6 items) determined whether participants acquired and retained knowledge disseminated in the training on goal setting (goals being specific, concrete, measurable, time-bound, realistic and challenging), e.g. “Which of the following is a concrete goal?” A. „Being well-known in the city“ B. „Improving the quality of service“ C. „Winning five new customers next month“ D. „Higher customer satisfaction.“ Because the knowledge test was constructed to measure heterogeneous aspects of scientific goal setting results, we did not compute a coefficient alpha. Time Management. Our scale consisted of 5 items (5-point answer scale) (Utsch & Frese, 1998), for example, “Before every working day I reserve some time to prepare and plan my work”, and “Every day I put down a priority list. I start working on the most important task first” (T1 α = .75, at T3 α = .70).

Behavior Based Measures

The implementation questionnaire asked the trainingparticipants at T3 how much they had applied training contents to their day-to-day work (5-point Likert scale). This questionnaire included 8 items measuring personal initiative implementation with its facets proactive (e.g. anticipating barriers), self-starting (e.g. actively approaching

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problems), and persistence when faced with obstacles, e.g. “To what extend have you carried out more changes after the training than you did before?”. (α = .88). Innovation implementation included 7 items, e.g., “To what extent have you used more innovative ways to produce your product or to offer your service after the training than you did before?”, and “To what extend have you used more creative solutions concerning business problems after the training than you did before?’. (α = .87). Goal setting and planning implementation included 4 items on goal setting and planning, e.g. “To what extend have you set more specific goals than you did before?” and “To what extend have you planned things out in more detail than you did before?”. (α = .67). Time management implementation was a 2-item measure: “To what extent have you prioritised your goals more after the training than you did before?” and “To what extent have you analysed your tasks more according to A-/B-/C-tasks after the training than you did before?”(r = .83, p < .01 between the items).

Personal Initiative was measured with the overcoming barriers method that has been shown to have good construct validity (Fay & Frese, 2001). We presented a difficult business situation, for example, “Pretend you are out of money for supplies, what would you do?”. The participants were asked to think of a way to overcome the difficulty. Each problem-solving answer was met by “Assume that this does not work, what else would you do?”. The number of barriers overcome was recorded. Eight questions were divided into two sets of questions which were counterbalanced across measurement waves. The responses during the overcoming barriers exercise were rated on a 5-point-Likert scale concerning proactivity (was an active approach taken or were the problems delegated away) and persistence (T1 α = .74, T3 α = .90).

Innovation: The measure of innovation was based on an exercise of fictitious business-situations, for example, having expansion-goals for the business (“Pretend you

have a business making clothes. You would like to have 20 more customers by the end of the year”). Participants had to think of ways how they could achieve this goal. We rated the number of ideas and the creativity of these ideas. Again, two sets of situations were developed and counterbalanced. The scale included both, the number of ideas and the rated creativity of ideas (at T1 α = .87 and at T3 α = .76).

Proactive Goal Setting and Planning. Proactive goal setting and planning used a measurement technique developed by (Frese, van Gelderen, & Ombach, 2000). At T1, goal-cards (each showing a business goal, e.g. “making new customers”) were offered as stimulus material and the participants were asked how they go about achieving their two most important goal cards. The answers were written down and coded by two raters (5-point Likert scale) on the dimensions proactiveness and reactiveness, amount of planning, goal specificity, detailedness, realism of goal, and comprehensive planning strategy. At T3, a written form of this exercise was used; the participants were asked to tick the most important goal, specify it and write down how they were going to achieve it (α = .91 at T1 and α = .93 at T3).

Success Measures

Short-term change in business success was measured by the reported change in sales at T3. The answer format included three choices of decreased (coded with ‘-1’), stayed the same (coded with ‘0’), and increased (coded with ‘+1’). To get a more objective measure and obtain long-term change in business success, we also asked for the sales level in Randat T1 and T4 (two years after the training). Since participants did not keep exact figures, we used a proxy adapted from McPherson (1998). The

participants were asked for the number of months with low, average, and high sales and the sales level in low, average, and high months - we then calculated their yearly sales level.

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Background Measures

Background data were used to compare the training and the control group and were used as controls where necessary. Variables included gender, age, ethnicity, type of industry, sector (formal vs. informal), age of business, number of employees, starting capital, experience, reception of vocational training prior to the personal initiative training, as well as years of education. Interpersonal difference variables were external and internal locus of control, and self-efficacy (Rauch & Frese, 2000). External and Internal Locus of Control were measured at T1 with 6-point Likert scales (Levenson, 1974). Reliability of the External Locus of Control was adequate (α = .80) but the alpha of the Internal Locus of Control was low. Hence, we selected two items of Internal Locus of Control (“When I make plans, I am almost certain to make them work” and “I am usually able to protect my personal interests) that showed a high correlation (r = . 55 , p < .01). Self-efficacy (in its general form) was ascertained with a 4-point Likert scale (Schwarzer, Bäßler, Kwiatek, Schröder & Zhang, 1997) (α = .86).

RESULTS

Table 3 shows the means, standard deviations, and intercorrelations. Since we had a non-random assignment of training and control group, we first calculated pre-training differences between the training (N = 27) and control group (N = 30) on a number of background variables. Because participation rate was lower over time, we also examined whether training (N = 16 at T3, N = 16 at T4) and control groups (N = 18 at T3 and N = 15 at T4) differed at later measurement points in their pre-training scores (using CHI² - tests for independent groups and analyses of variance (ANOVA)). We tested for gender, age, ethnicity, type of industry, sector (formal vs. informal), age of business, number of employees, starting capital, experience, reception of vocational

training prior to the personal initiative training, years of education, external and internal locus of control, and self-efficacy. The training and control groups differed at T1 only in two variables: the number of employees, F = 7.33, p < . 01, and External Locus of Control, F = 8.62, p < .01 . These differences were also replicated at T3 and T4. Therefore, external locus of control and number of employees were controlled as covariates in all further (multivariate) analyses of covariance (MANCOVA, ANCOVAs). Since the numbers of participants were different at T1, T3, and T4, we computed a MANCOVA (ANCOVAs) with repeated measures comparing T1 and T3 and a separate ANCOVA comparing sales at T1 and T4.

To test the overall effects of training, an overall MANCOVA was calculated for the following dependent variables measured at T1 and T3: goal setting knowledge, personal initiative, innovation, proactive goal setting and planning, and time management (with n=16 training participants and n=18 control group). Results revealed significant effects for group x time (training/non-training x repeated measures) (Hotelling’s t(.60) = 9.64, p < .01, η² = .37), for time (repeated measures)(Hotelling’s t(.36) = 5.82, p < .01, η² = .26), and for group (training/non-training) (Hotelling’s t(.71) = 11.43, p < .01, η² = .41). Thus, in accordance with hypothesis 1, training was overall effective in changing the experimental group more strongly than the control group (significant group x time effects).

Table 4 presents the results of the univariate ANCOVAs (again, these ANCOVAs should show significant interaction effects of group x time). There were significant interaction effects for the goal setting knowledge test, the behavior based measures of personal initiative, innovation, proactive goal setting and planning. Thus, goal setting knowledge, personal initiative, innovation, proactive planning and goal setting increased more strongly in the experimental than in the control group. There was no significant

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interaction effect for time management. Thus, the training did not prove effective to improve time management.

Success

Short-Term Success: Change in sales was measured at T3. An ANCOVA showed that the training group (M = .69) had a significant higher perceived increase in sales than the control group (M = -.06) (F = 3.06, p < .05, η² = .23) . This result indicates that training had a positive effect on perceived business success (data not shown in tables).

Long-Term-Success: Business success in terms of sales at T4 showed a marginally significant interaction indicating that training had a marginally significant effect on sales two years after the training (F = 3.02, p = .09, η² = .05).

Descriptive Results

Figure 2 shows the data on implementation. Self-reported implementation of the various training contents was generally very high (above 4.3 on a 5-point scale). Participants indicated that they transferred new knowledge and skills from training to their work places.

The satisfaction with the training was very high. Training satisfaction: The satisfaction with the different aspects of the training ranged from 2.85 to 2.93 with a mean of 2.89 (scale ranging from –3 to +3). Most participants said that they would recommend training to colleagues (M = 4.93, SD = .25, N = 27, at T2, with answer scaling from 1-5) and 5-7 months later (M = 4.92, SD = .26, N = 16) (data not shown in tables).

Transfer Motivation was very high for all aspects of the training ranging from 4.35 to 4.96 (scale ranging from 1-5). The mean of the transfer motivation scale was M = 4.83 (data not shown).

Qualitative Statements. Participants also indicated positive effects in their written comments; they ranged from “eye-opening experiences” during the course, e.g. “I can not believe that I knew so little about running a business” and “The training highlighted all my shortcomings as an entrepreneur” to a high degree of motivation after the training – in the words of one participant: “In a very short time so much has been brought to my attention. I certainly feel that this is the start of something better“. Another participant stated: “I was encouraged by your words, e.g. telling us to keep on trying. Now it is on us”. Some of the participants remarked that the training was quite a challenge for them, e.g. “After being out of school for more than 30 years it was a bit of a brainteaser”. One participant would have liked more practical experience by stating “The training should have more exercises to practice so that what was learned is not easily forgotten”. Another participant stated “Well reflected course, dealing with real life situations. Very practical”.

Anecdotal evidence also presents positive results. One of the training participants had successfully tendered for a government project worth three million Rand (about US$ 375.000). Another participant who owned a construction business stated on the phone four months after the training: “Thank you so much again, the training changed my whole life”. He was busy with orders and additionally won a tender to construct a school. The owner of an insurance company took part in a contest and won an award for being one of the best five Black businesses in the Western Cape region.

Table 4 shows that hypothesis 2 is supported as personal initiative was increased by training and this had the highest effect of the training (correlation of training with personal initiative at T3 was .81**).

To test for whether personal initiative was responsible for the effects of the training (H3), we compared the zero order correlation of training with the dependent variables at

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T3 or T4 with the respective partial correlations – the latter held personal initiative T3 constant (first number is the zero correlation of training with the dependent variable, the second number is the partial correlation, n.s.= nonsignificant): Goal setting knowledge T3 (.70, p<.01, .45 p<.01), time management knowledge T3 (.31, n.s. .25, n.s.), innovation T3 (.50, p<.01, .15, n.s.), proactive goal setting and planning T3 (.49 p<.01, .15, n.s.), and Changes in Sales t3 (.47 p<.01, .36, p<.05), and Sales T4 (.51 p<.01, .12, n.s.). With the exception of time management knowledge, all of the correlations of training with the dependent variables were significant. The partial correlations were mostly non-significant (exceptions changes in sales and goal setting knowledge), showing that personal initiative at t3 was responsible for most of the correlations of training with the dependent variables.

DISCUSSION

Hypothesis 1 was confirmed: Training owners to increase personal initiative has positive consequences. Reaction measures showed high satisfaction of the participants with the training. Knowledge increased in all measures except time management knowledge. The behavioral measures included measures of the perceived transfer of psychological skills from training to the job. Participants reported that they transferred knowledge and skills acquired during training. The second component of the behavioral measures - the behavior- based exercises - confirmed the positive effects of training on innovation, and proactive goal setting and planning. Training also had a positive impact on firm success. Sales were reported to have increased five to seven months after the training. In addition, participants who did not return the post training success measures at this measurement point (five to seven months after training) still reported in informal phone calls that their firm success had increased. Sales level two years after the training (the long term effect) increased from 2.13 Mill. Rand before the training to 3.52 Mill

Rand for the training participants. This constitutes an increase of 65%. The control group showed a slight decrease in their sales during this period. However, note that the SD is very large – therefore, this difference was, therefore, only marginally significant (Table 4). Four issues need to be taken into account when interpreting these results: First, there was already a difference at T1 between those who participated in training and those who did not (the control group started out with annual sales of 0.61 Mill Rand and the training group with 2.13 Mill. Rand). While this difference between training and control group was not significant, this could be a result of a self-selection effect: Maybe successful owners wanted to participate in a psychological training more than those who were not so successful. We tend to interpret the results to show true effects of the training for the following reasons: We were very careful to control for all those variables in the Analysis of Covariance that showed systematic differences between training participants and control group; as we controlled for the number of employees, we held size constant. Moreover, we also looked at the interaction effect of repeated measures and group. This implies that the relative enhancement of sales over time (not the absolute levels) was predicted by participating in the training. Second, the marginal significance of the sales effect needs to be interpreted against the fact that there was a directional hypothesis. An ANCOVA does not provide the option for a one-sided test but uses a form of two-sided testing (in a t-test, we could have run a one-sided test and would have interpreted a two-sided p-value of .09 as significant). Third, unfortunately, power was low for the analysis because 2 years after training only 16 participants of the training group and 18 of the control group provided data. Fourth, one more fact suggests that it was the training intervention influenced sales growth: We looked at the

development of business success during the two years before the training. The control group showed a higher increase in sales during this period of time. If the training group

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had consistently shown higher increases in sales, the training group should have shown the same success in the years before the training as in the years after the training. Since this was not the case, we think it is unlikely that a pure self-selection effect was responsible for the positive effects of the training. Given these circumstances and the fact that the increase of sales effects were also shown to be significant in the

measurement wave 5 – 7 months after the training, we interpret the findings to suggest an increase of sales as a result of the training.

Hypothesis 2 was also confirmed, as personal initiative was changed as a result of the training. It changes significantly from T1 to T3 in comparison to the control group (cf. Table 4 – significant interaction effect). Since personal initiative was measured with the help of a behavioral measure in the interview, we interpret this to imply that the training was highly effective in changing behaviors.

Hypothesis 3 implies that personal initiative proves to be a central variable. Personal initiative T3 was, indeed, highly related to both participating in the training and to the various dependent variables, including sales level T4 (cf. Table 3). Partial correlations confirmed that a all correlations between the training and various dependent variables were reduced (and most of them to being non-significant) when personal initiative at T3 was controlled.

Strengths and Limitations

The major methodological strength of this study is that a pedagogical intervention developed to increase personal initiative – a concept of great importance for

entrepreneurship – showed an effect. Moreover this effect could be shown on the four levels of training effectiveness (Kirkpatrick, 1967): Reaction, learning, behavioral and success measures. The use of a control group allowed us to control for possible effects of history and maturation (Cook, Campbell & Peracchio, 1990); thus general changes in

the business environment and the economy or the effects of longer experience of running a business were controlled with our design, as these effects would have influenced both the training and the control groups in the same way.

However, there are also some limitations. Unfortunately, it was not possible to randomize training and control group. We have tried to get a waiting control group by signing up owners who would be willing to wait for 1 1 /2 years for participating in a training. We did not succeed – apparently owners either wanted to participate in the training right away or not at all. A waiting control group does not seem to be feasible with business owners. Our design carries the disadvantage that it cannot rule out potential self-selection effects (and, indeed, we found the training group to be lower on external locus of control and higher in the number of employees). Therefore, we controlled for number of employees and locus of control as covariates in all analyses of covariance (MANCOVA, ANCOVAs) 2. As discussed above, we attempted a number of

additional plausibility checks to rule out pure self-selection effects. Thus, we think it is fair to conclude that the training was most likely instrumental for increasing knowledge, personal initiative, innovation and proactive goal setting and planning, as well as success in sales.

Another limitation concerns the issue of generalization. Would training be effective for other owners, both in South Africa and other countries? A study using a similar personal initiative training in Germany showed evidence for generalization across cultures (Frese, Friedrich & Hass, 2005).

Implications and Directions for Future Research

2 Fortunately, a study in Germany replicated the results of this paper showing a significant increase of the

number of employees in those firms whose owners participated in a very similar type of action training to enhance personal initiative (Frese, Friedrich & Hass, 2005); there was no evidence for the participants to be more successful than the control group before the training in this German study.

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Business schools, governments and donors (particularly in emerging markets) may want to increase personal initiative by implementing a training program. Given the increase in sales, such training programs should easily pay for themselves, both for owners as well as for governments and local councils. An increase in sales of around 50% would enhance taxes and would significantly contribute to the local economy.

Increasing personal initiative could be included as a psychological module in courses on business plan development and other hands-on courses in business schools. It would be interesting to evaluate the additional benefits of such an action training in comparison to courses without such a psychological module.

In general, it would be useful to separately evaluate modules of business courses: For example, one could pit general lecture courses, business plan courses, action training courses against each other. Possibly hands-on action training courses that are designed to increase competencies found to be important for success in business owners may be more effective than general lecture courses because the skills and knowledge taught are more directly useable in practice (cf. also a meta-analysis on training, Burke, 2004).

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Figure 1. Training Model

Training Content:

ƒ Innovation

ƒ Proactive Goal Setting

ƒ Proactive Planning ƒ Time Management FIRM SUCCESS Personal Initiative

Figure 2 Means of implementation scales on personal initiative, innovation, proactive planning/goal setting, and time management at T3 (5-7 months after training), 5-point Likert Scale (1 = Not very likely, 5= Very likely), only participants in training. 4 ,4 4 ,3 4 ,5 4 ,3 1 2 3 4 5 P e rs o n a l In itia tiv e In n o v a tio n P ro a c tiv e P la n n in g / G o a l S e ttin g T im e M a n a g e m e n t

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Appendix PI - Training

Time Day 1 Method/Tools

8.00 – 10.30 AM 11.00 – 12.30 AM 2.00 – 3.30 PM 4.00 – 5.30 PM Introduction GOAL SETTING Theory

Exercise: Working out action principles Self-rating: Goal setting

2 Exercises: Setting business goals INNOVATION Part I 2 Exercises : Creativity Theory: Innovation

Review of Contents, Feedback by participants

Introduction lecture Case studies, work sheet Self-assessment questionnaire Single and group work, discussion

Group work, brainwriting Lecture

Review of most important points

Time Day 2

8.00 – 10.30 AM

11.00 – 12.30 AM 2.00 – 3.30 PM

4.00 – 5.30 PM

Review: Contents day 1 INNOVATION Part II

2 Exercises: Innovation in own business 2 Exercises: Creativity

PROACTIVE PLANNING Theory: Action strategies

Exercise: Working out action principles Self-rating: Strategies

Exercise: Plan for own Business PERSONAL INITIATIVE Part I Exercise: Working out action principles Review of Contents, Feedback by participants

Lecture, questions by participants Work sheet, single and group work Work sheet, discussion Lecture

Case studies, discussion Self-assessment questionnaire Work sheet, single and group work Case Study, discussion Review of most important points

Time Day 3

8.00 – 10.30 AM

11.00 – 12.30 AM 2.00 – 3.30 PM

4.00 – 5.30 PM

Review: Contents day 2 PERSONAL INITIATIVE Part II Theory: Personal initiative Self-rating: Personal initiative 3 Exercise

Training Evaluation Part I

TIME MANAGEMENT Theory: Time management Presenting action principles Self-rating: time management 2 Exercises: Priority placement

Training Evaluation Part II

Exercise: first step of 4-6 months plan Summary of Contents

Application Contract Feedback by participants Official End

Lecture, questions by participants Presenting and discussing examples Self-assessment questionnaire Work sheets, single and group work, discussion

Work sheets and exercises Lecture

Lecture

Self-assessment questionnaire Work sheets, discussion Exercises and questionnaires Work sheet,

Choosing implementation-partner Lecture and pep talk

Work sheet

Table 1: Facets of Action Training (Frese, Beimel, & Schoenborn, 2003; Frese & Zapf, 1994; Hacker & Skell, 1993)

Developing an action-oriented mental model A mental model that is action oriented. This cognitive representation is based on ”rules of thumbs” (principles of actions)

Learning by doing active and exploratory approach to

learning from action3; cognitive apparatus is built for action; therefore, exercises have to be connected to principles of actions which can only be learnt, when connected to actions

Feedback Both positive and negative feedback is

provided by the trainer. Feedback needs to be provided in a functional way (“your use of emphasis has been good, however, you need to use more emotional words to describe your product to convey your message to the customer better”). Negative feedback is given in contrast to classical learning theory on the basis that this feedback has a positive motivational and cognitive effect (understanding, how not to do certain things and being motivated that one still needs to improve skills)

Supporting transfer The principles of actions also enhance

the chances of transfer because these principles can be adjusted to real life tasks. Connection to real life tasks is drawn continuously during the training, by thinking about how they can use the principles in their everyday actions and by asking them to think of dates when they would use the newly acquired skills. Also an application contract specifies when and how people will use the skills acquired in training

Necessity to routinize behavior Action theory (Frese & Zapf, 1994) argues that new skills developed during the training will compete with old skills that have been routinized. Therefore, routinization of the new behavior needs to be encouraged both in the exercises and afterwards

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Table 2 Measures, reliabilities or item intercorrelations, number of participants, items, means, standard deviations, and interrater reliabilities

Measure Time Internal consistency/ Number of participants Number of items M SD Interrater reliability Item

intercorrelation TG CG Total ICC Background Variables

Number of Employees T1 27 30 57 8.09 9.49

External Locus of Control T1 α = .80 27 30 57 7 2.45 1.16 Internal Locus of Control T1 r = .55** 27 30 57 2 5.96 .93

Self-Efficacy T1 α = .86 27 30 57 10 3.42 .47

Reaction Measures

Training Satisfaction T2 α = .75 27 27 4 2.90 .23

T2 27 27 1 4.93 .27

Would Recommend Training

Would Recommend Training T3 16 16 1 4.94 .25

Transfer Motivation T2 α = .94 27 27 8 4.83 .26

Learning Measures

Goal Setting Knowledge T1 27 30 57 6 7.91 1.84

Goal Setting Knowledge T3 27 30 57 6 8.56 1.82

Time Management T1 α = .75 27 30 57 4 3.57 .95

Time Management T3 α = .70 16 18 34 4 3.93 .85

Behavior Based Measures

Implementation Personal Initiative T3 α = .88 16 16 8 4.37 .62

Implementation Innovation T3 α = .85 16 16 7 4.32 .59

Implementation Goal Setting and Planning T3 α = .67 16 16 4 4.53 .46 Implementation Time Management T3 r = .83** 16 16 2 4.25 .88

Personal Initiative T1 α = .74 27 30 57 8 .29 .59 rtt = .83 - .1.00

Personal Initiative T3 α = .90 27 30 57 8 .08 .79 rtt = .89 - .1.00

Innovation T1 α = .87 27 30 57 4 2.07 .82 rtt = .91 - .94

Innovation T3 α = .76 27 30 57 4 2.37 .67 rtt = .89 - .93

Proactive Goal Setting & Planning T1 α = .91 27 30 57 14 2.54 .75 rtt = .92 - .97

Proactive Goal Setting & Planning T3 α = .93 16 18 34 7 3.04 .97 rtt = .91 - .98 Success Measures

Change in Sales T3 α = .81 16 18 34 4 .31 .57

Sales Level (in Mill Rand) T1 27 30 57 1 1.24 1.65

Sales Level (in Mill Rand) T4 16 15 40 1 2.08 2.97

Note. T1 = before training; T2 = directly after training; T3 = five to seven months after training; T4 = 2 years after training; TG = training group; CG = control group; M = mean; SD = standard deviation; ICC = Two-Way Mixed Effect Model of Intraclass Correlation Coefficient; ** Correlation is significant at the .01 level (2 tailed); * Correlation is significant at the .05 level (2 tailed)

TABLE 3 Number of participants, means, standard deviations, and intercorrelations of the main study variables

Variable Time N M SD 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

1. Training (1 = no, 2 =yes) T1 57 1.53 .50 1.00 2. Gender (1 =male, 2 = female) T1 57 1.12 .33 .07 1.00 3. Number of Employees T1 57 8.09 9.53 .25 .04 1.00 4. Internal Locus of Control T1 57 5.16 .93 -.05 -.14 .15 1.00 5. External Locus of Control T1 57 2.45 1.17 -.27 .05 .21 -.10 1.00 6. Sef-Efficacy T1 57 3.42 .47 .12 -.31 .21 .59** -.22 1.00 7. Training Satisfaction T2 27 2.90 .23 - .19 -.11 .43* .06 .28 1.00 8. Would Recommend Training T2 27 4.93 .27 - .12 .08 .43* .00 .34 .80** 1.00 9. Would Recommend Training T3 16 4.94 .25 - .07 .20 .57* -.02 .37 .84** 1.00** 1.00 10. Transfer Motivation T2 27 4.83 .26 - .25 -01 .30 .19 .13 .62** .71** .78** 1.00 11. Goal Setting Knowledge T1 57 7.91 1.84 .24 -.19 -.03 -.16 -.23 -.03 .00 -.08 .08 -.13 1.00 12. Goal Setting Knowledge T3 57 8.56 1.82 .70** .06 .08 -.14 -.31* -.03 -22 -.20 -.12 -.33 .57** 1.00 13. Time Management Knowledge T1 57 3.57 .95 .08 -.27* -.10 .46** .02 .56** .15 .11 -.22 .21 -.07 -.10 14. Time Management Knowledge T3 34 3.93 .85 .31 .01 .10 .23 .10 .17 -.02 .11 .11 .10 .24 .27 15. Implementation Personal Initiative T3 16 4.37 .62 - .22 .29 .43 .02 .33 .45 .48 .48 .26 -.40 -.39 16. Implementation Innovation T3 16 4.32 .59 - .24 .45 .43 .18 .16 .61* .67** .67** 44 -.16 -.38 17. Implementation Proac. Goal S. & Planning T3 16 4.53 .46 - .27 .30 .35 -.03 -.08 .27 .31 .31 .22 -.31 -.48 18. Implementation Time Management T3 16 4.25 .88 - .23 .15 -.05 .17 -.30 .12 .08 .08 -.01 .07 -.26 19. Personal Initiative T1 57 .29 .59 -.09 -.12 -.03 -.14 -.07 .08 .16 .10 .43 .13 .05 .07 20. Personal Initiative T3 57 .08 .79 .81** .05 .24 -.05 -.20 .07 -.08 .07 .18 .08 .03 .62** 21. Innovation T1 57 2.07 .82 .05 -11 .21 -.10 -.39** .06 -.29 -.07 -06 -.37 .25 .28* 22. Innovation T3 57 2.38 .67 .50** -.13 .18 -.10 -.32* .01 -.24 -.08 -.36 -.39* .20 .47** 23. Proactive Goal Setting & Planning T1 57 2.54 .75 .01 -.18 .29* .14 -.39** .23 -.15 .00 .01 -.07 -.00 .12 24. Proactive Goal Setting & Planning T3 34 3.04 .97 .49** -.14 .23 .02 -.39* .16 -.09 .23 .23 .24 .21 .57** 25. Change in Sales T3 34 2.29 .80 .47** .02 .07 .03 -.07 .31 .41 .38 .38 .35 .32 .35* 26. Sales Level (Mill Rand) T1 57 1243t 1647t .27* -.19 .73** .01 -.27* .08 -.19 .14 .20 .10 .07 .11 27. Sales Level (Mill Rand) T4 31 2080t 2967t .51** -.16 .64** -20 -.48** -.04 -.38 .05 .10 .04 .16 .26

(20)

TABLE 3

Variable Time 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27.

13. Time Management T1 1.00

14.Time Management T3 .36* 1.00

15. Implementation Personal Initiative T3 -.23 -.03 1.00

16. Implementation Innovation T3 -.37 .11 .82** 1.00 17. Implementation Proac. Goal S. & Planning T3 .03 .22 .72** .69** 1.00

18. Implementation Time Management T3 -.06 .50* .46 .48 .68** 1.00

19. Personal Initiative T1 .00 -.22 .25 .17 .06 -.09 1.00

20. Personal Initiative T3 .05 .21 .41 .41 .49 -.01 .22 1.00 21. Innovation T1 -.21 -.26 -.25 -.16 -.20 -.34 .40** .23 1.00 22. Innovation T3 .08 .04 -.29 -.22 -.05 .13 .17 .52** .45** 1.00 23. Proactive Goal Setting & Planning T1 .25 .05 -.01 .02 .30 -.02 .17 .19 .37** .25 1.00 24. Proactive Goal Setting & Planning T3 -.12 .03 .15 .18 .06 -.23 .05 .51** .49** .45** .35* 1.00

25. Change in Sales T3 .35* .67** .02 .11 .27 .12 -.01 .27 -.19 .24 .17 .17 1.00 26. Sales Level T1 -.12 .07 -.03 .15 .04 -.09 .06 .31* .34* .21 .30* .32 .10 1.00 27. Sales Level T4 -.20 .05 -.05 .12 .07 -.06 .06 .56** .50** .41* .37* .47* .22 .79** 1.00

Note. Only training group (N=27) and control group (N=30) included in the calculations; “-“ implies no data available because the control group did not respond to these measures; ** Correlation is significant at the .01 level (2 tailed); * Correlation is significant at the .05 level (2 tailed)

40

Table 4 Analysis of Covariance Analyses results (training/non-training x repeated measures interaction), means and standard deviations of training and control group

Before training After training

Measure Time Group N M SD M SD df F p Eta²

Learning Measures

Goal Setting Knowledge T1-T3 CG TG 27 30 8.37 7.50 2.22 1.33 9.89 7.37 1.58 1.03 1 8.00 <.01 .07

Time Management Knowledge T1-T3 CG TG 16 18 3.52 3.58 1.21 .58 4.20 3.68 .50 1.03 1 1.77 .19 .03

Behavior Based Measures

Personal Initiative T1-T3 CG TG 27 30 .23 .34 .60 .59 -.52 .75 .53 .41 1 45.84 <.01 .30

Innoavtion T1-T3 CG TG 27 30 2.11 2.07 .78 .86 2.72 2.07 .53 .62 1 5.01 <.01 .04

Proactive Goal Setting & Planning T1-T3 CG TG 16 18 2.57 2.48 .79 .87 3.54 2.60 .97 .74 1 4.91 <.05 .07

Success Measures

Sales Level (in Mill Rand) T1-T4 TG

CG 16 15 2.13 0.61 2.43 0.72 3.53 0.54 3.56 0.56 1 3.02 .09 .05

References

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