Dark Side of Business: The Impact of Business Activity on the Personal Wellbeing of Entrepreneurs

Time of realization: 2017 – 2018
Financing: IGA VŠE
Description: The aim of the project is to describe the impact of entrepreneurial activity on the personal well being of the entrepreneur. The study will be conducted on a set of IT start-ups in Prague.

Business psychology is still a relatively young field and there are many studies that reveal economic, social and personal pitfalls, and further research is still needed (Gorgievski & Stephan, 2016). The authors point out that the available meta-analyzes regarding the entrepreneurial personality are mostly cross-sectional and only in isolated cases the authors used the longitudinal research design (eg Korunka, Kessler, Frank, & Lueger, 2010; Nieß & Biemann, 2014).

The four-year longitudinal study by Cardon and Patel (2013) claims that higher levels of stress lead to higher financial incomes but also to more frequent complaints about health.

Even if entrepreneurs experience a seemingly greater burden in the form of risk, stress, hours worked, and so on, they benefit from the autonomy and self-determination that business allows for them (Benz & Frey, 2008). The personal well-being of self-employed persons is predominant even if they earn less on average than employees in employment (Åstebro, Chen, & Thompson, 2008). McEwen (1998) argues that excessive stimulation of the physiological system (due to workload) leads to physical and psychological disorders such as cardiovascular problems or depression. Taris et al. (2004) then point out that for entrepreneurs too much effort can result in a so-called downward spiral. A businessman who is not rested must make additional efforts the next day to be as efficient as the day before. Schonfeld & Mazzola (2015), among others, say that while business is closely related to stress, it is not entirely clear what the psychological consequences of stress caused by business are. Bakker et al. (2004) deal with chronic stress stemming from the workload of the entrepreneur, which subsequently leads to so-called burnout syndrome. However, due to the limited timeframe of this study, we will not deal with the burnout syndrome because it occurs in a longer period of time.

As part of this project, we will be monitoring the internet entrepreneur at an early stage of business start-up and the measurement will take place at least in three time points. From previous research (eg Gorgievski & Stephan, 2016), the area of ​​business psychology is still scarcely explored and, in particular, there is a lack of longitudinal studies to monitor the development of the entrepreneur over a limited timeframe. Taris & Kompier (2003) say that the longitudinal design of the study allows for clearer conclusions, especially in the field of work psychology. The authors point out that so-called “cross-sectional” studies (cross-sectional studies measuring the variable at one point in time) allow observations to be made in the form of correlations between variables, but causality remains unknown. However, they draw attention to the pitfalls of longitudinal studies. In particular, there may be a case where respondents lose interest in the study over time, or they begin to respond distorted because they do not want to communicate personal information about their health, for example.

Ayala & Manzano (2014) for a longitudinal study used a telephone interview of 650 entrepreneurs who received 534 usable questionnaires (82% success rate) in the first round of polling. Thus, it can be seen that even at the time of T1 it is not possible to always use the answers of all respondents. They may, for example, refuse to answer a sensitive question about their person.

For the purpose of this research, I plan to reach 1000 internet entrepreneurs in the early stages of the start. With this number of respondents, I count the usability of 300 respondents in the case of optimistic variants. Within the pessimistic variant, I estimate that 200 addressed respondents will be willing and able to cooperate, which is 20% of the choice. As a possible motivation from entrepreneurs, I see the fact that they will be able to contribute to broadening the area of ​​knowledge in the sphere of business psychology and will be able to compare their results with the results of similar entrepreneurs.

The target group of this project is internet entrepreneurs in the early stages of starting a business. The study should be monitored for 6 months during the early stages of business activity. This area is particularly interesting because new professions are being created in connection with the development of the Internet (Teichgraber, 2013) and Internet startups are dynamic and often very risky (Su et al., 2015). In addition, this field is still relatively young compared to traditional business spheres and has the potential to change the whole industry (Nobor, 2001). Taking into account the demandingness of such a business, it will undoubtedly be interesting to observe the early stages of the start-up of startups and possible effects on the personal well-being of the entrepreneur.

The project focuses on experiencing the negative effects of entrepreneurial activity. The theoretical contribution will be to find out what influences will be signed on the personal well-being of the entrepreneur and at the same time propose implications for further research.

For practice, such findings will be of particular importance in the field of prevention and elimination of possible undesirable effects on the personal well-being of the entrepreneur. Based on these findings, it will be possible to compile a set of recommendations for entrepreneurs to manage to avoid unnecessary stress, excessive workload, negative emotions in relation to the business, and the intention to end entrepreneurial activity.

Main coordinator: Ing. Jan Mareš
Other participants from the Department of Entrepreneurship: