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Career Patterns of the Setf-Etnployed:

Career Motivations and Career


Outcomes
by Daniel C. Feldman and Mark C. Bolino

Despite the rapid increase in the psychological well-being, skill utilization,


growth of self-employment in the U.S., and future career plans) are examined.
surprisingly little attention has been Quantitative data on individuals' job
given to what motivates individuals to histories and qualitative data from
start small business enterprises and the respondents on the advantages and dis-
extent to which self-employment fulfills advantages of self-employment are used
important career needs. The present study to identify differential patterns of career
utilizes the "career anchors" typology of outcomes among the self-employed. The
Schein (1978, 1990) to determine results suggest that individuals do vary
which "constellations" of career goals, greatly in their motivations to pursue
interests, and values attract individuals self-employment, that career anchors
into, and keep them attached to, self- do influence the goals individuals hope
employment Then, using data from a to achieve from, self-employment, and
national survey of the self-employed, that career anchors do influence indi-
the effects of career anchors on career viduals' satisfaction with their jobs,
outcomes (in terms of job satisfaction. careers, and lives in general.

For many individuals, a career in self- Opportunity to generate greater personal


employment, small business proprietor- wealth. At the simplest level, self-employ-
ships, and entrepreneurship represents ment entails working as an independent
both an escape from life in traditional consultant, contractor, or service provider.
organizational bureaucracies and an Small business proprietors manage local
or regional businesses with a limited
staff and with limited expansion goals. At
Dr. Feldman is professor of management and
the entrepreneur level, individuals invest
Distinguished Business Partnership Foundation their own capital and seek investments
Fellow at the University of South Carolina Darla from venture capitalists to build enter-
Moore School of Business in Columbia, South prises into major corporate pow^ers
Carolina. His research interests include downsiz- (Case 1992).
ing, early retirement incentives, contingent work- As Dennis (1996) points out, the actual
ers, and underemployment.
Mr. Bolino is completing his Ph.D. in manage-
level of self-employment in the U.S. is not
ment at the University of South Carolina Darla precisely known because there are no
Moore School of Business. His research interests systematic, widely-accepted annual mea-
include skill utilization, impression management, sures of it. Nevertheless, there are some
and expatriation. reasonable proxies for levels of self-

JULY 2000 53
employment, and these indicators high- five-year period, the number of women-
light the growth of this employment pat- owned sole proprietorships, partnerships,
tern in recent years. For example. Dun and smaU businesses has increased from
and Bradstreet reports that annual new 4,1 miUion to 5 9 million, an increase of
business incorporations in the U,S, have 43 percent (Mehta 1997), The predomi-
risen from 685,572 in 1987 to 789,126 in nance of males in smaU business has
1997, Over the past five years, the been frequently attributed to men earn-
amount of venture capital invested in en- ing higher incomes and hence having
trepreneurial start-up firms has increased greater initial capital to invest in such
from $4 bUUon to $10 bUHon (Alsop enterprises. However, as females become
1997), Across the board, then, entry into a greater percentage of the workforce,
the career path of self-employment has self-employment becomes more attractive
accelerated dramaticaUy over the past to them as a means of balancing work and
decade (Wiatrowski 1994), family demands (Stephens and Feldman
In examining the reasons for this growth 1997), Also, some women may enter
in self-employment, previous research self-employment to avoid discrimination
focused on two issues in particular. One in the workplace (Carr 1996),
research approach examined the macro- The influence of the owner's age has
economic and structural factors which also been a focus of smaU business research.
affect the pursuit of these kinds of jobs. Perhaps surprisingly, self-employment is
For example. Dyer (1994) suggests that more prevalent among older workers with
periods of economic growth give rise to less education, who may be particularly
greater new business creation, while vulnerable to age discrimination (Leana
Leana and Feldman (1992) suggest that and Feldman 1992), It appears that these
increases in downsizing have led more older workers view self-employment as a
laid-off workers to consider self-employ- means of improving their economic status
ment as a career option. Indeed, Dennis outside large corporations, in which
(1996) reports that unemployed w^orkers selection and promotion are typicaUy
are about twice as likely to start new based on formal education credentials
businesses as employed workers. (Carr 1996; Case 1992), However, wide-
The second stream of studies has exam- spread downsizing has made the climb
ined the role of personaUty traits and demo- up the corporate ladder less attractive to
graphic differences in the decision to ne'w business school graduates as weU, so
pursue self-employment (Brenner, Pringle, that more and more young adults are also
and Greenhaus 1991; Cooper and Dun- becoming entrepreneurs or starting smaU
kelberg 1981; Kolvereid 1996a; Shane, businesses (Feldman andTurnley 1995),
Kolvereid, and Westhead 1991), For To date, however, there has been rela-
example, research suggests that the per- tively Uttle research on the career moti-
sonality traits most commonly associated vations of individuals choosing self-employ-
with self-employment are the need for ment and on the outcomes associated with
achievement, the need for control, and such career paths (Dyer 1994; Katz 1994),
tolerance for ambiguity (Dyer 1994; The present study investigates these two
Kolvereid, 1996b), key career issues. Using empirical data
In terms of demographic differences, from a national sample of the self-
gender and education have received the employed, iadividuals' motivations for
most attention. Males currently constitute entering self-employment are examined.
the majority of owners of smaU businesses, The "career anchors" typology of Schein
but the percentage of women entering (1978,1990) is used to determine which
these independent employment career "consteUations" of career goals, interests,
paths is rising steadily. In fact, over a and values attract individuals into, and

54 JOURNAL OF SMALL BUSINESS MANAGEMENT


keep them attached to, careers in self- agement, an entrepreneurial career track
employment. Then, the career outcomes in new product development, an auto-
of the self-employed (in terms of job sat- nomous career track as a marketing con-
isfaction, psychological weU-being, skiU sultant, or a more secure career track as
utUization, and future career plans) are a marketing professor (Feldman and
examined. Quantitative data on individuals' BoUno 1997),
job history and quaUtative data from respon- Because the "technical/functional com-
dents on the advantages and disadvantages petence" and "managerial competence"
of self-employment are used to identify anchors pertain mainly to careers in large
differential patterns of career outcomes. organizations, the three career anchors
which are most relevant to self-employment
Theory are the entrepreneurial creativity, autonomy
Using Career Anchors to Understand and independence, and security and sta-
Entry into Self-Employment and bUity anchors, Schein's typology presents
Career Outcomes an interesting mechanism for Unking the
Schein (1978,1990) suggests a typology career motivations of the self-employed
of "career anchors" that can be used to to their career outcomes. For example,
understand career motivations, Schein's individuals w^ith autonomy and indepen-
work suggests that there are important dence career anchors might seek self-
differences between a person's initial employment because it provides them
choice of occupation and the subsequent with greater levels of freedom than they
formation of a career identity. While early could enjoy in traditional employment
career decisions are often based on inac- arrangements. In contrast, individuals
curate information about career paths, after with entrepreneurial creativity career
several years in the workforce individuals anchors may be draw^n to self-employ-
develop more accurate assessments of their ment because it provides them with
abUities, needs, and values, Schein labels opportunities to build businesses of
these stable consteUations of job prefer- their ow^n and provides them with an
ences as "career anchors," suggesting that outlet for their creative talents. In this
they set reasonably strong parameters research the role of career anchors in
w^ithin w^hich future career decisions wiU determining the underlying reasons
be made,According to the original concep- which lead individuals into self-employ-
tualization, Schein (1978) posits the exis- ment are examined.
tence offivecareer anchors: (1) technical/ In addition to helping understand the
functional competence; (2) managerial motives for choosing self-employment,
competence; (3) security and stabiUty; career anchors provide a useful framework
(4) autonomy and independence; and (5) for examining the outcomes of these career
entrepreneurial creativity, choices. As Jamal (1997) points out, there
WhUe research on initial occupational are relatively few empirical studies
choice (HoUand 1973) has focused on an examining the outcomes of choosing
individual's global preference for a general self-employment. That is, most research
functional area (for example, business or has relied mainly on anecdotal evidence
music), the research on career anchors in assessing individuals' satisfaction with
suggests there are widely different career self-employment, WhUe some researchers
paths w^ithin a given general occupation have examined the general attributes and
(Albertini 1982; Anderson and Sommer attitudes of entrepreneurs or compared
1980), For example, an individual in the the attitudes of self-employed workers
field of marketing could pursue a technical with those of non-self-employed workers,
career track in marketing research, a no empirical study has yet examined
managerial career track in brand man- how the career anchors of self-employed

JULY 2000 55
workers might affect their career out- issues affecting smaU businesses. The
comes. In the second part of this study, NASE currently represents over 300,000
then, differences in job outcomes are small business proprietors nationwide.
examined among individuals who have
all chosen careers in self-employment Sample
but nonetheless have different levels of MaU surveys, along with seU?-addressed
satisfaction, psychological well-being, stamped return envelopes, were sent to
and so forth. Differences in career 850 randomly selected members of the
anchors may contribute substantially to association. Respondents were promised
those differences in career outcomes. confidentiality and anonymity. One hun-
Specifically, data were coUected on dred and fifty-three (153) surveys ^were
self-employed workers' job satisfaction, returned, for a response rate of 18 per-
overaU life satisfaction, psychological cent. Although this figure is somewhat
well-being, degree of skiU utilization, and lower than those found in typical survey
intent to remain self-employed. Since one research studies, it compares favorably to
of the main motivations of those entering NASE's own survey of its membership in
self-employment is to have more positive 1996, which yielded a 10 percent
attitudes toward their work, job satisfac- response rate.
tion is an important outcome to consider The sample mirrors important attributes
(Jamal 1997), SimUarly, since many individ- of the NASE membership and the national
uals choose self-employment as a means population of smaU business proprietors.
of balancing work and famUy demands For example, 60 percent of aU NASE
(Carr 1996), measures of overall life sat- members have average annual business
isfaction and psychological weU-being incomes of under $100,000; in this sample,
should tap the success of self-employment 58 percent had an average income of under
at meeting those goals. For those individuals $100,000, In both the NASE membership
who enter self-employment for greater and in this sample, the vast majority of
opportunities to be creative or to better smaU-business proprietors (88 percent)
utUize their talents, a measure of skill uti- had fewer than five employees.
lization is also an appropriate and valu- In terms of demographic data, the pre-
able criterion. Last, a measure of intent to sent sample was 66 percent male,The age
remain self-employed may tap both satis- distribution of the sample was as foUows:
faction with self-employment and per- 21-29 years (four percent); 30-39 years (25
ceptions of self-employment as econom- percent); 40-49 years (36 percent); and 50
icaUy viable in the long run. or older (35 percent),This mirrors national
data, which suggest that self-employment
Method is predominantly a mid- or late-career phe-
Data Source nomenon, with roughly one-third of the
The data for this study came from the self-employed being 50 years or older.
membership Ust of the National Associ- The average respondent had been work-
ation for the Self-Employed (NASE), ing fuU-time for 23,5 years and had been
Founded in 1981, NASE is a non-profit self-employed for 10.3 years. Forty-eight
organization which provides its members percent of the respondents worked out of
with a variety of benefits: a toU-free smaU an office in their homes, and 52 percent
business hotUne, legislative advocacy at had an outside office or business location.
the federal and state levels, discounted The vast majority of the respondents
car and truck leases, office equipment (77,5 percent) served a local or regional
discounts, insurance services, and a market with their product or service.
bimonthly newsletter that highlights

56 JOURNAL OF SMALL BUSINESS MANAGEMENT


Career Motivations will feel successful in my career only if I
achieve complete autonomy and free-
of the Self-Employed dom," The alpha of the scale was ,67
In previous studies on the career paths (mean ='5.11; standard deviation=0,76),A
of self-employed workers, researchers sample item from the security and stabil-
have approached the issue of motivations ity anchor is: "I am most fulfiUed in my
to become self-employed by asking work when I have complete financial
respondents how important various job and employment security," The alpha of
characteristics and personal factors were the scale was ,78 (mean=3,29, standard
to their careers. As the first step in this deviation=,85).
study, the instrument developed by Following Schein's suggestion and
Cooper et al. (1990) was used to gather other subsequent research (for example,
data on these factors as welLThe items in Feldman and Bolino 1997), respondents
this instrument asked the respondents to were assigned a career anchor based on
indicate how^ important various job their highest mean score on these three
attributes and personal factors were to scales. The most frequent career anchor
them, using five-point Likert responses among the self-employed respondents in
ranging from l="Not important at aU"to the study was the autonomy and inde-
5="Very important," pendence anchor (46 percent). Below
As the results in Table 1 suggest, are some representative comments from
opportunities to gain greater control over those individuals with the strongest
their lives, to use their skiUs and abiUties, autonomy and independence anchors:
to live w^here/how they want to, and to "The biggest positive: autonomy
be creative were the primary motivations It (self-employment) fits my per-
for choosing self-employment for our re- sonality ..."
spondents. In contrast, the factors which
weighed least heavUy in respondents' "L, along with most entrepre-
decisions to enter self-employment w^ere neurs, never liked working for
retirement, avoidance of work place dis- someone else! My aggressive
crimination, and career plateauing. attitude and ideas made them
As the second step in this study, nervous."
respondents' career anchors were mea-
sured to determine whether their anchors "The biggest positives: being in
affected the career goals they sought to charge of your life ... being able
attain through self-employment,AU items to say 'no' to work, people, and
used to measure these anchors came situations that would negatively
from the Career Orientation Inventory impact your life."
(Schein 1990), The five-point Likert
scales each had three items which exam- "Lt (self-employment) is worth
ined how important various career goals the few 'snags' just for the inde-
were to the respondents. pendence ...I will never go back
A sample item from the entrepreneur- to what I label 'organized crime,'
ial creativity career anchor is: "I am most where some green-eared general
fulfiUed in my career w^hen I have been manager decides if you deserve
able to build something that is entirely a 4 percent or 7 percent raise
the result of my own ideas and efforts," each year.. "
The alpha of the scale was .74
(mean=3,4l, standard deviation=0,94), A The second most common career
sample item from the autonomy and anchor was entrepreneurial creativity.
independence career anchor scale is: "I For 33 percent of the sample, the oppor-

JULY 2000 57
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Illli.

58 JOURNAL OF SMALL BUSINESS MANAGEMENT


tunity to build a business of their own conducted (see Table 1). This analysis
and to have more creative opportunities examined whether individuals with differ-
was the major career motivation. Repre- ent anchors have significantly different
sentative comments from individuals motives for becoming self-employed.The
with strongest entrepreneurial creativity MANOVA was statistically significant
anchors illustrate this point: (Wilks' Lambda=.73; F=1.78;/;<.05); that
"The biggest positives are stimu- is, individuals with different career
lating challenges, creativity, never anchors differed significantly in their
a dull moment." motives for becoming self-employed.The
largest differences were between indi-
"I can give the best possible service viduals with entrepreneurial creativity as
now, because no one is placing their anchors and those with autonomy
rules and regulations on the busi- and independence. For those with entre-
ness. Also, I can be creative every preneurial creativity anchors, the most
day, whereas the corporate world important motives were: the chance to
can be restrictive on creativity." use their skills and be creative, the chal-
"The biggest positive: being able lenge involved, the potential to earn a lot
to do things at a high quality of money, the chance to gain more respect
standard." and recognition, and the opportunity to
capitalize on a good business idea. In
The career anchor for the remaining contrast, individuals with autonomy and
21 percent of the sample was security independence anchors were most driven
and stability. For these individuals, the by the desire to live as they would like.
ability to maintain a stable personal life Compared to the other career anchor
and a stable job were the most important groups, individuals with the security and
factors guiding their entry into, and stability anchor emphasized challenge
remaining with, self-employment. The the least and the ability to control their
comments representative of individuals lives the most.
with strong security and stability anchors
conveyed this sentiment:
"Due to personal circumstances Career Outcomes
(an invalid spouse), the employ- of the Self-Empioyed
ment demands of a traditional In this phase of the study,fiverelevant
company would be virtually career outcomes were examined.The five
impossible to accommodate.. " career outcomes assessed in this study
"I have been able to move to a were overall job satisfaction, overall life sat-
small town and contribute to isfaction, psychological well-being, degree
the community... This is an area of skill utilization, and intent to remain
where almost everyone knows self-employed.All data on these variables
each other.. " came from existing Likert-scale measures.
Overall job satisfaction was measured
"Being self-employed with a using three items from Hackman and
home office means your person- Oldham's (1980) scale (mean=4.25; stan-
al life is fully integrated with dard deviation=0.6l; alpha=.85).A sample
your work .. " item is: "Generally speaking, I am very
satisfied with this job." Life satisfaction
In order to examine the relationships was measured using four items from
between the motivations for self-employ- Diener et al.'s (1985) scale (mean=3.71;
ment with the career anchors, a multi- standard deviation=0.75; alpha=.85). A
variate analysis of variance (MANOVA) was sample item is: "I am satisfied with my life."

JULY 2000 59
Psychological well-being was measured among individuals' career outcomes with
using Warr's (1978) 17-item scale (mean= respect to their career anchors.
2.94; standard deviation=0.44; alpha=.82). Subsequently, a series of one-way
Respondents were asked to indicate the analyses of variance (ANOVAs) were con-
frequency w^ith which they experienced ducted to determine the specific ways in
feelings such as loneliness, depression, which different career anchors impacted
and apathy. Skill utilization w^as measured different career outcomes. The results of
using tw^o items taken from O'Brien these analyses appear in Table 2.
(1980). A sample item is: "My job gives As can be seen in Table 2, individuals
me the chance to do the things I do best" who are pursuing self-employment out
(mean=4.03; standard deviation=0.93; of a desire for entrepreneurial creativity
alpha=.77). Intent to remain self-employed have higher levels of job satisfaction and
was measured using four items based on psychological well-being, as well as high
Feldman and Thomas's (1992) scale levels of overall life satisfaction. Individuals
(mean=4.27; standard deviation=0.70; w^ho are pursuing self-employment out of
alpha=.80).A sample item is: "I am going a desire for autonomy and independence
to remain self-employed, no matter what report the highest levels of skill utiliza-
the problems are." tion, intent to remain self-employed, and
The first relationship examined was life satisfaction. In contrast, those entering
that between the career anchors and self-employment to maximize security
career outcomes. A multivariate analysis and stability systematically had the least
of variance (MANOVA) was performed with successful career outcomes.
career anchor as the independent variable ANOVAs were also conducted to test
and the five career outcomes as depen- for differences in outcomes due to
dent variables. The MANOVA revealed a demographic variables. The results on
statistically significant relationship the effects of the demographic variables
(Wilks' Lambda=.84;F=2.l6;p<.05); that were generally smaller in magnitude and
is, there were significant differences did not suggest systematic effects across

Table 2
Analysis of Variance:
Differences in Career Outcomes across Career Anchors^
Autonomy and Entrepreneurial Security and
Career Outcome Independence Creativity Stability
Job satisfaction*** 4.24 4.38 3.92
life satisfaction** 3.78 3.77 3.36
Psychological well-being** 2.97 3.01 2.76
Skill utilization* 4.20 4.08 3.70
Remain self-employed*** 4.40 4.28 3.87

values reported in this table are means.


*p<.10
*p<.05
*p<.01

60 JOURNAL OF SMALL BUSINFSS MANAGFMENT


career outcomes. Consistent with other In this section, qualitative data collected
organizational behavior research, the from respondents are used to discuss the
results of an ANOVA suggest that female tradeoffs self-employed workers make
self-employed workers have higher job and some potential solutions for dealing
satisfaction and life satisfaction than with the challenges they face.
their male counterparts (p<.05). There
w^ere no systematic differences across Balancing Job Autonomy
career outcomes for age and education; and Social Isolation
self-employed workers over age 40 and The most frequently mentioned chal-
with greater education were only mar- lenge of being self-employed was balancing
ginally more likely to have more positive the desired job autonomy with the loss of
job attitudes and to remain self-employed. social interaction which often accompanies
In addition, career outcomes and attitudes it. On the one hand, the self-employed
were not significantly affected by the clearly value the freedom which comes
number of years spent working full-time from working autonomously:
or by the number of years being "/ have my own life.' I make my
self-employed. own schedule. I don't have to
According to the ANOVA results, three report to an office."
job characteristics had consistent effects
on career outcomes. Using Case's (1992) "Self-employment requires you
typology, "job creators" (those who were to take responsibility for your
hoping to grow their businesses substan- own future in a very direct way.
tially over the next five years) had signif- It is great to be able to use my
icantly more positive job attitudes and skill and creativity to keep my
were significantly more likely to remain business exciting and vital."
self-employed (p<.05). In contrast, "tradi-
tionalist" self-employed workers (those On the other hand, the cost of job
who owned small restaurants or small retail autonomy is frequently the loss of social
stores) and "soloists" (those who were interaction:
consultants or free-lance professionals) had "/ definitely feel more isolated in
poorer job attitudes and were less likely self-employment and this is my
to remain self-employed. In addition, self- biggest source of dissatisfaction.
employed w^orkers with greater annual I came from an aerospace com-
salaries and gross business incomes w^ere pany where I was surrounded by
also more likely to have positive job atti- interesting, well-educated people
tudes and remain self-employed. ... the difference is immense."
"The loneliness of working out of
Qualitative Data: home and lack of social contact
Tradeoffs in at work is a major challenge.
Self-Employment Social isolation is a real problem."
As previous research suggests, the key "The thing I m-iss most is the 'cor-
reasons individuals pursue self-employ- porate family'we had.fust about
ment are to achieve greater autonomy, to all ourfriends and things we did
increase flexibility in their lives, to gen- were within that family. It's taken
erate personal wealth, and to escape a long time to replace that."
organizational bureaucracies. However,
as the data here suggest, not all self- To deal with this potential problem,
employed workers experience success or several respondents suggested •ways they
derive satisfaction from their career path. had successfully coped with this issue:

JULY 2000 61
(1) started a small business with a "My greatest difficulty is getting
spouse or fortner colleague or a "paired out of the office for family time..."
business" to avoid partnership problems;
(2) increased networking activity in pro- "It's more difficult taking time
fessional associations and local business off for my children's activities."
groups like the Chamber of Commerce; "The greatest difficulties: being
and (3) operated the business from a on call 24 hours a day, working
work office rather than from home. all the time and never having
Two other patterns emerged from time to catch a wave at the
respondents' comments on this issue. beach."
First, self-employed individuals in mar-
keting, sales, and customer-oriented busi- "There's no difference between
nesses found it easier to balance job Monday, Wednesday, or Sunday
autonomy and social isolation than did .. .you can't get away—eveif'
their colleagues in high-tech or comput- "The greatest difficulties: manag-
er-related businesses. This was largely ing my time and my workload
because these jobs require greater social ... having to work when others
interaction on a day-to-day basis. Second, don't (nights, weekends, holidays)."
self-employed individuals w^orking in
rural and semi-rural areas had more diffi- The participants in our study man-
culties balancing these tradeoffs since aged these tradeoffs in a variety of ways.
their daily lives generally involved sigtuf- For some, it was learning ho'w to say no
icantly less social contact. and not promising clients too much. As
one of our respondents noted:
Balancing Increased Scheduling "(Now) I don't overpromise and
Flexibility with Decreased not deliver, both of which create
Vacation and Time Off huge amounts of stress and
A second major issue faced by the lower others' expectations of me
self-employed is the tradeoff between and my work."
increased scheduling flexibility and the
lack of extended vacation time and real For others, it was having hard and fast
time off For many, the ability to work rules about time off from work:
when they want is a major attraction of "/ leave work every day by 4:30
self-employment: and always take off one after-
"Self-employment allows me the noon each week."
time and flexibility to focus on
relationships that mean the "Sunday is a day off. It is set
most to me: my family, in-laws, aside for family and friends. This
and friends of choice rather has not changed in 8 years, nor
than expediency." will it."

"The biggest positive: complete Balancing Opportunities to


control over my life: choosing Create Wealth with Greater Job
what, when, how, and with Insecurity and Financial Risk
whom I spend my time." For many respondents in our study,
particularly those with an entrepreneur-
Ironically, though, the freedom to ial career anchor, the attractiveness of
work on one's own schedule often self-employment was highly tied to mak-
means the self-employed have less time ing more money. Also, as some of the
off and vacation time: respondents' comments suggest, the job

62 JOURNAL OF SMALL BUSINESS MANAGEMENT


insecurity associated with self-employ- provide me with retirement, ben-
ment is preferable to the specter of efits, etc."
going through another major layoff or
downsizing: "In my business, I have to man-
"/ love the idea that I have age things to have security and
unlimited opportunities for that's work and not my favorite
income." kind. As an employee, I just did
my job and if I was standing
"Making a very good living there on pay day, I got a check
doing things that you enjoy and regularly ... Your cash flow fluc-
having control of your own des- tuates radically, whereas in (tra-
tiny should be enough to moti- ditional jobs) the cash flow is
vate anyone. They do me!" predictable."
"My wife and I were both in mid-
dle management for a Fortune Here, too, participants in the survey
100 company. Their downsizing had several suggestions for handling the
essentially forced us to either tradeoffs between opportunities for
take downgrades and transfer greater wealth and the potential for
all over the place (at our own financial losses. For some, the solution
expense) or leave the business. was starting out self-employment part-
We both left... Therefore, I don't time to grow the business before entering
believe I would go back to a self-employment full-time. For others,
large employerf' securing former employers or former
clients as major clients in the new busi-
"Self-employment leaves me with ness gave them some steady cash flow
greater feelings of job security right from the start. For still others, having
than traditional employment." a spouse who was working full-time in a job
with a steady income and fringe benefits
Many respondents in our survey, created a significant safety net for the
though, expressed considerable con- self-employed partnerAcross respondents,
cerns about thefinancialrisks associated however, it was clear that uncertain and
with self-employment. In part, those con- uneven cash flow^ was a major concern,
cerns stem from less job security; in part, and that either some significant capital at
they stem from fewer fringe benefits and the beginning of the venture or a steady
no health care insurance; in part, they cash flow in its early months were critical
stem from the greater vulnerability of to business survival.
small businesses to market shifts and
macroeconomic downturns: Balancing Freedom from
"My career is now somewhat Organizational Bureaucracies
unstable. Clients come and go..." with Developing New Staff
and New Markets
"The main difficulty in my busi- A major theme which ran through
ness is finding opportunities many of our respondents' comments w^as
that pay a regular, steady fee. the desire to escape life in traditional
Most opportunities pay a fee organizational bureaucracies—either to
only upon successful completion obtain greater job autonomy, to have
of a transaction." greater opportunities to be creative and
"I am less secure in some ways provide higher quality services, to gener-
because obviously there is no ate greater w^ealth for themselves and
large company behind me to their families, or to buffer themselves

JULY 2000 63
from successive threats of layoffs and was participation in training programs to
downsizings. Ironically, however, many of develop better personnel and financial
the newly self-employed discovered that management skills. For still others, it was
their biggest challenges were recruiting taking greater advantage of governmental
and developing their own employees, support services (such as Small Business
dealing with taxes, paperwork, and regu- Development Centers) and not-for-profit
lations, "cold calling" and developing a organization services (such as NASE) to
new cUent base, and dealing with angry obtain help in managing personnel and
or unpleasant customers: selling/marketing new services. For
"My greatest difficulty: wearing almost all the participants in our study,
too many hats! I am now TIRED though, there were some unexpected
of cold calls and getting work," surprises and challenges in staffing, mar-
"The negatives: constantly being keting, and managing new enterprises.
'on'—that is, selling yourself,
maintaining appearances—no Limitations
such thing as 'having a bad day' of the Research
excuse,,,"
While these results improve our under-
"It has taken me a while to finally standing of career issues in self-employ-
set up a solid management team ment, there are four reasons w^hy the
to release me from the daily findings should be viewed cautiously
grind of running the business," First, the data in this study were obtained
exclusively from self-employed members
"The biggest negatives: finding of NASE. While NASE represents a large
good people to work for you, number of small business people working
keeping good people working for m a wide array of businesses. Its member-
you, piles of paperwork and red ship Is not necessarily representative of
tape, hiring bad people and fir- the general population of self-employed
ing bad people," workers. For example, self-employed
"Managing the office is the hard- people who work "off the books" in
est part—insurance, worker's small cash businesses or self-employed
compensation, unemployment, individuals temporarily forced into this
local licensing, state regulations kind of work are not likely to be repre-
and taxes, federal taxes, job per- sented. Self-employed people who do
mits, county inspections, and not have or need the benefits offered by
many others ,,," NASE would be less likely to be part of
the organization as well (for example,
"The biggest negatives: not finding doctors, lawyers, architects, and others
young, educated, and motivated with professional affiliations). Thus, the
people,,, (Many) are lazy, unmo- results obtained here may not fully gen-
tivated, brain-dead products of eralize to all self-employed workers.
today's educational system," A second limitation of this research is
that since the data w^ere obtained via self-
Several respondents had developed report responses, common method vari-
some effective strategies for dealing with ance could have inflated the findings.
these problems. Eor some, the solution Research relying more upon archival and
was greater use of financial consultants, longitudinal data would allow^ greater
accountants, and employment agencies confidence in the conclusions.
to deal with the logistics of personnel Third, the present sample largely con-
hiring and bookkeeping. For others, it sists of self-employed workers who are

JOURNAL OF SMALL BUSINESS MANAGEMENT


"soloists" or small business proprietors. individuals' career anchors may also
Consequently, the results here may not directly influence whether individuals pur-
be as generalizable to entrepreneurs try- sue careers as professional consultants,
ing to grow their businesses through small family business owners, farmers,
venture capital investments. artists, independent tradespersons, and
Fourth, the present study only exam- so forth.
ined self-employed individuals in the Although there has been considerable
United States,The motivations for entering research exploring individuals' motiva-
self-employment and the career outcomes tions for entering self-employment, less
of self-employment may be different in research has examined the factors which
other cultures. affect individuals' success in these career
paths. As illustrated in this research, cer-
Conclusions tain individuals may be better suited for
This research used the career anchors self-employment than others. More
framework to examine individuals' moti- research is needed to better understand
vations for entering self-employment as this issue, A potentially useful starting
well as the resulting career outcomes. point for such research is to build upon
Whereas previous research focused more research in organizational behavior that
on the different motives that influence has examined the idea of person-job fit.
individuals' entry into self-employment, This research stream suggests that indi-
this research explored how^ individuals' viduals are more successful in their jobs
career anchors may explain their pursuit when their jobs are compatible with
of careers in self-employment,This study their interests, values, and abilities (Wilk,
suggests that individuals vary greatly in Desmarais, and Sackett 1995), It is likely
their motivations to pursue self-employ- that this framework could be fruitfully
ment, and that, indeed, career anchors used in future research on the career
influence the goals individuals hope to success of self-employed workers.
achieve from their self-employment. In The qualitativefindingshere highlight
addition, this study investigated the role how self-employment is often attended by
played by career anchors in determining surprises and ambivalence about the cho-
the career outcomes of self-employed sen career path. Although self-employed
workers. Again, the results indicate that workers typically have greater job auton-
career anchors do influence individuals' omy, many individuals become more
satisfaction with self-employment, their socially isolated. Likewise, although
overall life satisfaction, their psychologi- self-employed workers usually have
cal well-being, their skill utilization, and increased scheduling flexibility, at the
their intentions to remain self-employed. same time self-employment often means
While the present research demon- decreased amounts of real time off While
strates the potential usefulness of career self-employment can be potentially
anchors in examining self-employment, lucrative, it is also characterized by
it also suggests some additional avenues greater job insecurity and significant
for future research. For example, while fmancial risks. Self-employment can free
this study highlights how career anchors individuals from dealing w^ith organiza-
affect individuals' motives for entry into tional bureaucracies, yet it often burdens
self-employment, it did not examine how them with the demands of managing
career anchors affect the specific nature employees and sub-contractors. In future
of that self-employment. As Vanden- research, then, greater attention could be
Heuvel and Wooden (1997) point out, given to the explicit tradeoffs the
self-employed workers are not a homo- self-employed make in their transition
geneous group. It is possible, then, that from traditional jobs.

JULY 2000 65
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