Abstract:

Despite the high failure rate and inherent risk involved in entrepreneurship, many entrepreneurs continue to pursue it. However, most entrepreneurs who experience entrepreneurial failure quit entrepreneurship and return to the labor market in search of a paid job. Job-seeking not only is a turning point for entrepreneurs who seek to start afresh as salaried workers and thus recover from entrepreneurial failure but also potentially avoids wastage of the entrepreneurial resources of society as a whole. Although the transition from entrepreneurship to employment is fairly common, the phenomenon has, surprisingly, not received sufficient attention from researchers of entrepreneurial failure.

Studies on entrepreneurial failure have largely viewed entrepreneurs’ failure management as a psychological process of self-healing. They have suggested that negative emotions hinder entrepreneurs’ recovery and learning from failure and further erode their confidence to embark on a new business. This line of studies has neglected the processes of social interaction in entrepreneurial failure management and given little consideration to the social motivation of entrepreneurs who quit entrepreneurship and return to the job market.

Research has shown that entrepreneurs often perform better than other employees in the workplace. However, the barrier to their entry into the job market is high. Recruiters appreciate entrepreneurs’ outstanding capabilities and innovative spirit but are concerned about their commitment and stability and the likelihood of their resignation. This reluctance among recruiters regarding entrepreneurs raises an important research question: how can entrepreneurs who have experienced failure tell their “failure stories” to open the door to finding jobs?

This study focused on the population of entrepreneurs who seek paid jobs after entrepreneurial failure. These entrepreneurs’ social motivation to manage entrepreneurial failure was explored, and the fundamental research question of how entrepreneurs can use impression management strategies to support their job-seeking after entrepreneurial failure was addressed. Based on impression management theory, the study constructed an integrated framework for the process leading from entrepreneurial failures to impression management strategies and subsequently to job-seeking outcomes. The framework examined how entrepreneurial failures affect entrepreneurs’ choice of impression management strategies and influence their subsequent job-seeking outcomes.

This research focused on three issues: (1) revealing the unique structure and purpose of the impression management strategies adopted by entrepreneurs after entrepreneurial failure, during which two core dimensions of impression management strategies—assertive and defensive strategies—were identified; (2) revealing how the nature of an entrepreneurial failure event affects impression management strategies; and (3) unraveling the mechanism by which impression management strategies influence job-seeking outcomes using signaling theory.

This study clarifies the hitherto opaque process that leads from entrepreneurial failure to success in job-seeking and extends the existing literature and theory in four ways. First, the study departs from the core theme of serial entrepreneurship in the field of entrepreneurial failure research, thus providing a new perspective on entrepreneurial failure management by exploring the future career decisions of entrepreneurs. Second, the study ascertains the definition and structure of the impression management strategies adopted after entrepreneurial failure, providing a measure for further extending research on the antecedents and consequences of entrepreneurs’ impression management strategies after entrepreneurial failure. Third, by utilizing event system theory, the study identifies the mechanisms that prompt entrepreneurs to adopt impression management strategies after entrepreneurial failure. Prior studies have assumed that entrepreneurial failure automatically prompts entrepreneurs to engage in impression management behaviors, and few have explored why different failure events lead to different motivations and behaviors with regard to impression management. Fourth, by utilizing signaling theory, this research reveals how entrepreneurs’ use of impression management strategies supports their subsequent job-seeking from the perspectives of both entrepreneurs and recruiters. In doing so, this study dynamically depicts the decision-making logic of recruiters when hiring entrepreneurs while also providing a new viewpoint from which to study motivations and strategies for the management of entrepreneurial failure.

Key words: entrepreneurial failure, entrepreneurs’ job-seeking, impression management, social motivation, signaling theory