Self-sabotaging behavior among poverty entrepreneurs: a transitions theory perspective

Abstract

The purpose of this conceptuabsl study is to explore a model linking systemic poverty conditions, the transition to becoming a business owner and entrepreneur, the tendency toward self-sabotage, and outcomes for both the venture and the entrepreneur’s well-being. Specifically, we introduce the concept of transition costs as a key driver of individual behavior. Using transition theory, we investigate the tendency toward self-sabotage when these costs are sufficiently high. By self-sabotage, we refer to intentional and unintentional actions and inactions by these entrepreneurs that undermine their ability to build a successful enterprise. A four-stage transition process is explored, over which degrees of change are likely to result. We argue that the liabilities associated with venture creation by the poor combined with the lack of a supportive institutional environment can serve to increase perceived transition costs and limit the extent to which low-income and disadvantaged individuals are willing or able to transition. Both the development of a venture and the perceived well-being of the entrepreneur are negatively impacted. An agenda for ongoing research is presented.