The theory of self-efficacy was originally introduced by Bandura . Self-efficacy can be seen as a person’s ability to manage the actions needed and the personal competencies that can control certain situations. Self-efficacy affects what is thought, felt and done by a person . Self-efficacy is closely related to work-related performance. It can also serve as a driving force to face obstacles and limitations . Self-efficacy will increase if someone manages to achieve what they want, and will decrease if there is a failure. It will also increase with exposure to entrepreneurial education.
The construct of entrepreneurial self-efficacy was proposed by De Noble, Jung. This construct refers to an individual’s belief in his/her own abilities to perform various skills that are needed for starting up a new business. According to De Noble, Jung , ESE is related to a “can do” attitude in starting up a business venture. ESE focuses on a person’s belief that he/she is able to produce an entrepreneurial outcome , such as with building new businesses, first-time venture creators and completing entrepreneurial tasks.
What’s also very important to note is that high self-efficacy means the self-made millionaires strongly believe they can and will obtain their goals. As becoming wealthy, or wealthier is a pretty consistent goal of this cohort, they’re immensely confident in growing their personal fortunes.
Self-made millionaires generally understand that difficult, high-reward business situations are frequently challenges, which need to be mastered and can be mastered. Many times these situations prove personally draining and discouraging – sometimes even genuinely depressing. High self-efficacy results in persevering because they know, by not giving up, there’s an excellent chance they will end up successful. Many of the self-made millionaires believe it’s a given they’ll succeed resulting in them working manically if necessary to be successful.
High self-efficacy also results in a deeper, more intense interest in these difficult high-reward business situations. The self-made millionaires will oft times immerse themselves in critical aspects of the situations. This, then, enables them to develop a truly insightful understanding often resulting in clever and creative solutions to obstacles.
Another benefit of high self-efficacy is being able to relatively quickly bounce back from hindrances and more serious setbacks. The self-made millionaires deep down realize their strengths and weaknesses. When a business deal, for instance, is lost, and it played to their strengths, they grasp this can and will happen, but they don’t let it slow them down. They justifiably maintain their convictions in their capabilities and move onto the next opportunity.
By focusing on what you do well, provided it’s in the line of money, can result in becoming wealthy. You can have high self-efficacy, but unless your competencies are directly linked to making money, a personal fortune is unlikely even though there will likely be many other benefits.