COURSE TITLE: ENTREPRENEURSHIP

CORSE CODE: GST 321

3RD YR 2ND SEMESTER

ENTERPRISE AND ENTREPRENEURSHIP

Introduction

Economists have never had a consistent definition of "entrepreneur" or

"entrepreneurship" (the word "entrepreneur" came from the French verb
entreprendre, meaning "to undertake").

Enterprise is a company, business, organization, or other purposeful endeavour

while entrepreneurship is the art or science of innovation and risk-taking for
profit in business. The process of setting up a business is known as
entrepreneurship. It is the quality of being an entrepreneur.

Enterprise (verb) is to undertake something hazardous or difficult. It is the

willingness to undertake new or risky projects; energy and initiative. It is also an
undertaking or project, especially a daring and courageous one.

A micro-enterprise is defined as a business having 5 or fewer employees and a low

seed capital.

Intrapreneurship is a system that allows an employee to act like an entrepreneur

within a company or other organization.

An entrepreneur is an individual who creates a new business, bearing most of the

risks and enjoying most of the rewards. The entrepreneur is commonly seen as an
innovator, a source of new ideas, goods, services, and business/or procedures.

Entrepreneurs play a key role in any economy, using the skills and initiative
necessary to anticipate needs and bringing good new ideas to market.
Entrepreneurship that proves to be successful in taking on the risks of creating a
startup is rewarded with profits, fame, and continued growth opportunities.
Entrepreneurship that fails results in losses and less prevalence in the markets for
those involved.
Entrepreneurs

Entrepreneurship

Entrepreneurship is one of the resources economists categorize as integral to

production, the other three being land/natural resources, labor, and capital. An
entrepreneur combines the first three of these to manufacture goods or provide
services. They typically create a business plan, hire labor, acquire resources and
financing, and provide leadership and management for the business.

Entrepreneurs commonly face many obstacles when building their companies. The
three most challenging are:

1. Overcoming bureaucracy
2. Hiring talent
3. Obtaining financing

Three thinkers were central to the inclusion of entrepreneurs: Joseph Schumpeter,

Frank Knight, and Israel Kirzner. Schumpeter suggested that entrepreneurs—not
just companies—were responsible for the creation of new things in the search for
profit. Knight focused on entrepreneurs as the bearers of uncertainty and believed
they were responsible for risk premiums in financial markets. Kirzner thought of
entrepreneurship as a process that led to the discovery.
Evolution of entrepreneurship development

Judi Sheppard Missett became an entrepreneur after retiring her professional

dancing shoes, by teaching a dance class to civilians in order to earn some extra
cash. But she soon learned that women who came to her studio were less interested
in learning precise steps than they were in losing weight and toning up. Sheppard
Missett then trained instructors to teach her routines to the masses, and Jazzercise
was born. A franchise deal followed. Today, the company has more than 8,300
locations worldwide.

Following an ice cream making correspondence course, two entrepreneurs, Jerry

Greenfield and Ben Cohen paired $8,000 in savings with a $4,000 loan, leased a
Burlington, Vt., gas station, and purchased equipment to create uniquely flavored
ice cream for the local market. Today, Ben & Jerry’s hauls in millions in annual
revenue.

Although the "self-made man" (or woman) has always been a popular figure in
American society, entrepreneurship has gotten greatly romanticized in the last few
decades. In the 21st century, the example of Internet companies like Alphabet, fka
Google (GOOG), and Facebook (FB), which have made their founders wildly
wealthy, have made people enamored with the idea of becoming entrepreneurs.

Unlike traditional professions, where there is often a defined path to follow, the
road to entrepreneurship is mystifying to most. What works for one entrepreneur
might not work for the next and vice versa.

General steps that most, if not all, successful entrepreneurs have followed:

1. Ensure Financial Stability

This first step is not a strict requirement but is definitely recommended. While
entrepreneurs have built successful businesses while being less than financially
flush (think of Facebook founder Mark Zuckerberg as a college student), starting
out with an adequate cash supply and ensuring ongoing funding can only help an
aspiring entrepreneur, increasing their personal runway and giving them more time
to work on building a successful business, rather than worrying about making
quick money.
 2. Build a Diverse Skill Set

Once a person has strong finances, it is important to build a diverse set of skills and
then apply those skills in the real world. The beauty of step two is that it can be
done concurrently with step one.

Building a skill set can be achieved through learning and trying new tasks in real-
world settings. For example, if an aspiring entrepreneur has a background in
finance, they can move into a sales role at their existing company to learn the soft
skills necessary to be successful. Once a diverse skill set is built, it gives an
entrepreneur a toolkit that they can rely on when they are faced with the
inevitability of tough situations.

Much has been discussed on if going to college is necessary to become a

successful entrepreneur. Many famous entrepreneurs are famous for having
dropped out of college: Steve Jobs, Mark Zuckerberg, and Larry Ellison, to name
but a few.

It is not true that majoring in entrepreneurship is necessary to start a business.

People that have built healthy businesses have majored in many different subjects
and doing so can open your eyes to a different way of thinking that can help you in
establishing your business.

3. Consume Content Across Multiple Channels

This content can be in the form of podcasts, books, articles, or lectures. The
important thing is that the content, no matter the channel, should be varied in what
it covers. An aspiring entrepreneur should always familiarize themselves with the
world around them so they can look at industries with a fresh perspective, giving
them the ability to build a business around a specific sector.

4. Identify a Problem to Solve

Through the consumption of content across multiple channels, an aspiring

entrepreneur is able to identify various problems to solve. One business adage
dictates that a company's product or service needs to solve a specific pain point;
either for another business or for a consumer group. Through the identification of a
problem, an aspiring entrepreneur is able to build a business around solving that
problem.
It is important to combine steps three and four so it is possible to identify a
problem to solve by looking at various industries as an outsider. This often
provides an aspiring entrepreneur with the ability to see problem others might not.

5. Solve That Problem

Successful startups solve a specific pain point for other companies or for the
public. This is known as "adding value within the problem." Only through adding
value to a specific problem or pain point does an entrepreneur become successful.

Say, for example, you identify the process for making a dentist appointment is
complicated for patients, and dentists are losing customers as a result. The value
could be to build an online appointment system that makes it easier to book
appointments.

6. Network Like Crazy

Most entrepreneurs can't do it alone. The business world is a cutthroat one and
getting any help you can will always help and reduce the time it takes to achieve a
successful business. Networking is critical for any new entrepreneur. Meeting the
right people that can introduce you to contacts in your industry, such as the right
suppliers, financiers, and even mentors can be the difference between success and
failure.

Attending conferences, emailing and calling people in the industry, speaking to

your cousin's friend's brother who is in a similar business, will help you get out
into the world and discover people that can guide you. Once you have your foot in
the door with the right people, conducting a business becomes a lot easier.

7. Lead by Example

Every entrepreneur needs to be a leader within their company. Simply doing the
day-to-day requirements will not lead to success. A leader needs to work hard,
motivate, and inspire their employees to reach their best potential, which will lead
to the success of the company.

Look at some of the greatest and most successful companies; all of them have had
great leaders. Apple and Steve Jobs, Bill Gates and Microsoft, Bob Iger and
Disney, and so on. Study these people and read their books to see how to be a great
leader and become the leader that your employees can follow by the example you
set.

Entrepreneurship Financing

Given the riskiness of a new venture, the acquisition of capital funding is

particularly challenging, and many entrepreneurs deal with it via bootstrapping:
financing a business using methods such as using their own money, providing
sweat equity to reduce labor costs, minimizing inventory, and factoring
receivables.

While some entrepreneurs are lone players struggling to get small businesses off
the ground on a shoestring, others take on partners armed with greater access to
capital and other resources. In these situations, new firms may acquire financing
from venture capitalists, angel investors, hedge funds, crowdfunding, or through
more traditional sources such as bank loans.

Resources for Entrepreneurs

1. Small business loans

There are a variety of financing resources for entrepreneurs starting their own
businesses. Obtaining a small business loan through the Small Business
Administration (SBA) can help entrepreneurs get the business off the ground with
affordable loans. SBA helps connect businesses to loan providers.

If entrepreneurs are willing to give up a piece of equity in their business, then they
may find financing in the form of angel investors and venture capitalists. These
types of investors also provide guidance, mentorship, and connections in addition
to just capital.

2. Crowdfunding

Crowdfunding has also become a popular way for entrepreneurs to raise capital,
particularly through Kickstarter. An entrepreneur creates a page for their product
and a monetary goal to reach while promising certain givebacks to those who
donate, such as products or experiences.
 3. Bootstrapping for Entrepreneurs

Bootstrapping refers to building a company solely from your savings as an

entrepreneur as well as from the initial sales made from your business. This is a
difficult process as all the financial risk is placed on the entrepreneur and there is
little room for error. If the business fails, the entrepreneur also may lose all of their
life savings.

The advantage of bootstrapping is that an entrepreneur can run the business with
their own vision and no outside interference or investors demanding quick profits.
However, sometimes having an outsider's assistance can help a business rather than
hurt it. Many companies have succeeded with the bootstrapping strategy, but it is a
difficult path.

7 Characteristics of Entrepreneurs

Entrepreneurial success stories invariably involve industrious people diving into

things they’re naturally passionate about.

Giving credence to the adage, “find a way to get paid for the job you’d do for
free,” passion is arguably the most important component startup business owners
must have, and every edge helps.

While the prospect of becoming your own boss and raking in a fortune is alluring
to entrepreneurial dreamers, the possible downside to hanging one’s own shingle is
vast. Income isn’t guaranteed, employer-sponsored benefits go by the wayside, and
when your business loses money, your personal assets can take a hit; not just a
corporation’s bottom line. But adhering to a few tried and true principles can go a
long way in diffusing risk. The following are a few characteristics required to be a
successful entrepreneur.

1. Versatile

When starting out, it’s essential to personally handle sales and other customer
interactions whenever possible. Direct client contact is the clearest path to
obtaining honest feedback about what the target market likes and what you could
be doing better. If it’s not always practical to be the sole customer interface,
entrepreneurs should train employees to invite customer comments as a matter of
course. Not only does this make customers feel empowered, but happier clients are
more likely to recommend businesses to others.
Personally answering phones is one of the most significant competitive edges
home-based entrepreneurs hold over their larger competitors. In a time of high-tech
backlash, where customers are frustrated with automated responses and touch-tone
menus, hearing a human voice is one surefire way to entice new customers and
make existing ones feel appreciated; an important fact, given that some 80% of all
business is generated from repeat customers.

Paradoxically, while customers value high-touch telephone access, they also expect
a highly polished website. Even if your business isn’t in a high-tech industry,
entrepreneurs still must exploit internet technology to get their message across. A
startup garage-based business can have a superior website than an established $100
million company. Just make sure a live human being is on the other end of the
phone number listed.

2. Flexible

Few successful business owners find perfect formulas straight out of the gate. On
the contrary: ideas must morph over time. Whether tweaking product design or
altering food items on a menu, finding the perfect sweet spot takes trial and error.

Former Starbucks Chairman and CEO Howard Schultz initially thought playing
Italian opera music over store speakers would accentuate the Italian coffeehouse
experience he was attempting to replicate. But customers saw things differently
and didn’t seem to like arias with their espressos. As a result, Schultz jettisoned the
opera and introduced comfortable chairs instead.

3. Money Savvy

Through the heart of any successful new business, venture beats the lifeblood of
steady cash flow; essential for purchasing inventory, paying rent, maintaining
equipment, and promoting the business. The key to staying in the black is rigorous
bookkeeping of income versus expenses. And since most new businesses don’t
make a profit within the first year, by setting money aside for this contingency,
entrepreneurs can help mitigate the risk of falling short of funds. Related to this,
it’s essential to keep personal and business costs separate, and never dip into
business funds to cover the costs of daily living.

Of course, it’s important to pay yourself a realistic salary that allows you to cover
essentials, but not much more; especially where investors are involved. Of course,
such sacrifices can strain relationships with loved ones who may need to adjust to
lower standards of living and endure worry over risking family assets. For this
reason, entrepreneurs should communicate these issues well ahead of time, and
make sure significant loved ones are spiritually on board.

4. Resilient

Running your own business is extremely difficult, especially getting one started
from scratch. It requires a lot of time, dedication, and failure. A successful
entrepreneur must show resilience to all the difficulties on the road ahead.
Whenever they meet with failure or rejection they must keep pushing forward.

Starting your business is a learning process and any learning process comes with a
learning curve, which can be frustrating, especially when money is on the line. It's
important never to give up through the difficult times if you want to succeed.

5. Focused

Similar to resilience, a successful entrepreneur must stay focused and eliminate the
noise and doubts that come with running a business. Becoming sidetracked, not
believing in your instincts and ideas, and losing sight of the end goal is a recipe for
failure. A successful entrepreneur must always remember why they started the
business and remain on course to see it through.

6. Business Smart

Knowing how to manage money and understanding financial statements are critical
for anyone running their own business. Knowing your revenues, your costs, and
how to increase or decrease them, respectively, is important. Making sure you don't
burn through cash will allow you to keep the business alive.

Implementing a sound business strategy, knowing your target market, your

competitors, your strengths and weaknesses, will allow you to maneuver the
difficult landscape of running your business.

7. Communicators

Successful communication is important in almost every facet of life, regardless of

what you do. It is also of the utmost importance in running a business. From
conveying your ideas and strategies to potential investors to sharing your business
plan with your employees to negotiating contracts with suppliers all require
successful communication.

Types of Entrepreneurs

Not every entrepreneur is the same and not all have the same goals. Here are a few
types of entrepreneurs:

1. Builder

Builders seek to create scalable businesses within a short time frame. Builders
typically pass $5 million in revenue in the first two to four years and continue to
build up until $100 million or beyond. These individuals seek to build out a strong
infrastructure by hiring the best talent and seeking the best investors. They have
temperamental personalities that are suited to the fast growth they desire but can
make personal and business relationships difficult.

2. Opportunist

Opportunistic entrepreneurs are optimistic individuals with the ability to pick out
financial opportunities, getting in at the right time, staying on board during the
time of growth, and exiting when a business hits its peak.

These types of entrepreneurs are concerned with profits and the wealth they will
build, so they are attracted to ideas where they can create residual or renewal
income. Because they are looking to find well-timed opportunities, opportunistic
entrepreneurs can be impulsive.

3. Innovator

Innovators are those rare individuals that come up with a great idea or product that
no one has thought of before. Think of Thomas Edison, Steve Jobs, and Mark
Zuckerberg. These individuals worked on what they loved and found business
opportunities through that.

Rather than focusing on money, innovators care more about the impact that their
products and services have on society. These individuals are not the best at running
a business as they are idea-generating individuals, so often they leave the day-to-
day operations to those more capable in that respect.
 4. Specialist

These individuals are analytical and risk-averse. They have a strong skillset in a
specific area obtained through education or apprenticeship. A specialist
entrepreneur will build out their business through networking and referrals,
resulting in slower growth than a builder entrepreneur.

Types of Entrepreneurship

As there are different types of entrepreneurs, there are also different types of
businesses they create. Below are the main different types of entrepreneurship.

1. Small Business Entrepreneurship

Small business entrepreneurship is the idea of opening a business without turning it

into a large conglomerate or opening many chains. A single-location restaurant,
one grocery shop, or a retail shop to sell your handmade goods would all be an
example of small business entrepreneurship.

These individuals usually invest their own money and succeed if their business
turns a profit, which they live off of. They don't have outside investors and will
only take a loan if it helps continue the business.

2. Scalable Startup

These are companies that start with a unique idea; think Silicon Valley. The hopes
are to innovate with a unique product or service and continue growing the
company, continuously scaling up as time moves on. These types of companies
often require investors and large amounts of capital to grow their idea and reach
multiple markets.

3. Large Company

Large company entrepreneurship is a new business division created within an

existing company. The existing company may be well placed to branch out into
other sectors or it may be well placed to become involved in new technology.

CEOs of these companies either foresee a new market for the company or
individuals within the company generate ideas that they bring to senior
management to start the process.
 4. Social Entrepreneurship

The goal of social entrepreneurship is to create a benefit to society and humankind.

They focus on helping communities or the environment through their products and
services. They are not driven by profits but rather by helping the world around
them.

Entrepreneurs and the Economy

In economist-speak, an entrepreneur acts as a coordinating agent in a capitalist

economy. This coordination takes the form of resources being diverted toward new
potential profit opportunities. The entrepreneur moves various resources, both
tangible and intangible, promoting capital formation.

In a market full of uncertainty, it is the entrepreneur who can actually help clear up
uncertainty, as they make judgments or assume the risk. To the extent that
capitalism is a dynamic profit-and-loss system, entrepreneurs drive efficient
discovery and consistently reveal knowledge.

Established firms face increased competition and challenges from entrepreneurs,

which often spurs them toward research and development efforts as well. In
technical economic terms, the entrepreneur disrupts course toward steady-state
equilibrium.

Positive impact of entrepreneurship

 Entrepreneurs create new businesses. They invent goods and services,

resulting in employment, and often create a ripple effect, resulting in more
and more development. For example, after a few information technology
companies began in India in the 1990s, businesses in associated industries,
like call center operations and hardware providers, began to develop too,
offering support services and products.
 Entrepreneurs add to the gross national income. Existing businesses may
remain confined to their markets and eventually hit an income ceiling. But
new products or technologies create new markets and new wealth. And
increased employment and higher earnings contribute to a nation’s tax base,
enabling greater government spending on public projects.
 Entrepreneurs create social change. They break tradition with unique
inventions that reduce dependence on existing methods and systems,
 sometimes rendering them obsolete. Smartphones and their apps, for
example, have revolutionized work and play across the globe.
 Entrepreneurs invest in community projects and help charities and other
non-profit organizations, supporting causes beyond their own. Bill Gates, for
example, has used his considerable wealth for education and public health
initiatives.
 Entrepreneurship is a critical driver of innovation and economic growth.
Therefore, fostering entrepreneurship is an important part of the economic
growth strategies of many local and national governments around the world.

Entrepreneurial Ecosystems

Research shows that high levels of self-employment can stall economic

development. Entrepreneurship, if not properly regulated, can lead to unfair market
practices and corruption, and too many entrepreneurs can create income
inequalities in society.

To this end, governments commonly assist in the development of entrepreneurial

ecosystems, which may include entrepreneurs themselves, government-sponsored
assistance programs, and venture capitalists. They may also include non-
government organizations, such as entrepreneurs' associations, business incubators,
and education programs.

For example, California's Silicon Valley is often cited as an example of a well-

functioning entrepreneurial ecosystem. The region has a well-developed venture
capital base, a large pool of well-educated talent, especially in technical fields, and
a wide range of government and non-government programs fostering new ventures
and providing information and support to entrepreneurs.

Social Entrepreneur Definition

A social entrepreneur is a person who pursues an innovative idea with the potential
to solve a community problem.

Franchise Definition

A franchise is a business whereby the owner licenses its operations—along with its
products, branding and knowledge—in exchange for a franchise fee.
15 Entrepreneurial Key Success Factors
The most critical and most important key success factors that can make
an entrepreneur become a successful entrepreneur are:

1. Willingness to take action. This is the first and most important

factor for “would be” and current entrepreneurs. All other
entrepreneurial key success factors, are not necessary if you are a
person who is afraid to take real action. Actions are something that
can lead you to the success. Without actions, you can’t expect to
become a successful business owner. Sorry, it is a fact!
2. Entrepreneurial knowledge. Entrepreneurs are persons who must
have superior knowledge about specific business issues for the
business that they have started. Your knowledge will increase your
business potential energy and in large part will contribute to the
success of your company.
3. Entrepreneurial creativity. You must be a creative person if you
want to be unique enough and with the power of continuous
improvement in your business. The creativity will increase your
business potential energy that will bring many possibilities for
your company.
4. Entrepreneurial skills. Each entrepreneur and each business will
need different entrepreneurial skills that in some cases can be
crucial to the success of their companies. If you have the
knowledge, but you don’t have skills that can be covered only
through implementation of what you have learned, you can’t
expect that you are close to the success. As you can see, you will
have skills if you take action, implementing what you have
learned.
5. Entrepreneurial intelligence. You must be intelligent to manage
all possible situations and solve the hardest problems that will be
the most consistent thing in your business life. Your intelligence
will additionally bring uniqueness to your company because it is
something that can’t be copied from others.
6. Patience. You must be patient and ready to continue even if you
lose the first battle. It is important because the war is still not
 finished. This is only the beginning of your journey as an
entrepreneur. You need to understand that your entrepreneurial
journey isn’t an easy journey.
7. Persistence. Persistence is simply a refusal to give up for
something, or ability to keep your actions against your personal
feelings that you’re not ready for these actions. Feelings and
motivation didn’t produce results. The action is something that will
provide the results you want to achieve. So, remove your feelings
that pulled you back, and with the whole power continue on your
journey.
8. The ability for teamwork. Nobody can achieve anything alone.
This is also true for you as an entrepreneur. You are not a
“Superman.” As an entrepreneur, you must be a team player for
your own and your business success.
9. Risk taking, but calculated risk. This is indeed one of the most
critical questions: Are entrepreneurs taking enough risk? Yes, each
business startup is at some level risky. However, more important is
how a successful entrepreneur takes a risk? The word calculated
risk is the most appropriate word for this characteristic. You need
to use risk management principles if you want to succeed.
10. The self-confidence. Self-confidence is a significant and key
success factor for entrepreneurs. I think that nobody will become
an entrepreneur if he doesn’t have self-confidence in himself,
primarily related to starting and managing his own business.
11. To have enough experience. Sometimes experience is in a
category not so required as a factor, but it is something that will
increase your business potential energy. As an entrepreneur, you
must employ all present and previous experience you have in the
business that you are building.
12. Great talent. Talent is something inborn in an entrepreneur.
But, sometimes talent is something that can be easily replaced with
knowledge and skills.
13. Honesty. Honesty is vital in every case. But sometimes
honesty, being real, can be the most significant enemy of an
entrepreneur in some complex conditions.
 14. Connections. More connection means more possibilities for
building a successful business.
15. Luck. Luck is a psychological factor. Some people can say
that they aren’t lucky persons. And indeed there are some “lucky
people” who just accidentally found the right place at the right
time with the right idea. However, it is a small percentage and
cannot be included as a serious factor for success.

Thematic Apperception Test

Thematic Apperception Test, or TAT, is a type of projective test that

involves describing ambiguous scenes. Popularly known as the "picture
interpretation technique," it was developed by American psychologists
Henry A. Murray and Christina D. Morgan at Harvard University in the
1930s.

To date, the TAT is one of the most widely researched and clinically
used personality tests.

Application of TAT

The TAT involves showing people a series of picture cards depicting a

variety of ambiguous characters (that may include men, women, and/or
children), scenes, and situations.

They are then asked to tell as dramatic a story as they can for each
picture presented, including:

 what has led up to the event shown

 what is happening in the scene
 the thoughts and feelings of characters
 the outcome of the story
The complete version of the TAT includes 31 cards. Murray originally
recommended using approximately 20 cards and selecting those that
depicted characters similar to the subject.

Today, many practitioners only utilize between 5 and 12 cards, often

selected because the examiner feels that the scene matches the client's
needs and situation.

Practitioners use their best judgment when selecting scenes in order to

determine which might be most likely to elicit useful information from
the respondent.

Why Is TAT Used

The TAT can be utilized by therapists in a number of different ways.

Some of these include:

 To learn more about a person. In this way, the test acts as

something of an icebreaker while providing useful information
about potential emotional conflicts the client may have.
 To help people express their feelings. The TAT is often used as a
therapeutic tool to allow clients to express feelings in a non-direct
way. A client may not yet be able to express a certain feeling
directly, but they might be able to identify the emotion when
viewed from an outside perspective.
 To explore themes related to the person's life experiences.
Clients dealing with problems such as job loss, divorce, or health
issues might interpret the ambiguous scenes and relating to their
unique circumstances, allowing deeper exploration over the course
of therapy.
 To assess someone for psychological conditions. The test is
sometimes used as a tool to assess personality or thought
disorders.   
  To evaluate crime suspects. Clinicians may administer the test to
criminals to assess the risk of recidivism or to determine if a
person matches the profile of a crime suspect.
 To screen job candidates. This is sometimes used to determine if
people are suited to particular roles, especially positions that
require coping with stress and evaluating vague situations such as
military leadership and law enforcement positions.

Criticisms

The TAT is often criticized for not being standardized, meaning there
are no rules of administration or formal scoring system. Clinicians often
vary in how they administer the test. Additionally, few practitioners use
Murray's complex scoring system and instead rely on their subjective
interpretation and clinical opinion.

For example, even if clinicians use the same scoring system, they may
use different cards or a different number of cards. This makes it
incredibly difficult to obtain estimates of reliability and validity, and
almost impossible to compare results.

How to Score the Thematic Apperception Test

The Thematic Apperception Test evaluates a person’s patterns of
thought, attitudes, observational capacity and emotional responses by
interpreting the person’s responses to pictorial images. The test is
administered by showing a person a set of cards that portray human
figures in a variety of settings and situations. The person is asked to
describe the event shown, what has led to the event, what the
character(s) are feeling and thinking and the outcome of the event.
 Identify the test-taker’s personal and cultural history. Ascertain the
test-taker’s age, sex, level of education, occupation, racial or ethnic
identification, first language and any other characteristics that may
impact her responses.
 Consider cultural, gender, class and other issues when determining
whether a specific response is “normal.” Contextualize the
subject’s response according to her cultural, religious or personal
traditions and beliefs, as well as according to other factors that
inform her identity. Acknowledge that different groups respond to
images differently. For instance, female subjects may read a card
showing a young woman seated with a man standing behind her as
implying aggression, danger or intrusiveness, while male subjects
do not react to the picture with unpleasant overtones. Researchers
consider gender differences such as these to be reflective of the
imbalance of power between males and females.
 Choose an approach to interpreting responses. The two basic
approaches are the nomothetic and idiographic responses. Measure
 the subject’s answers against the established norms for answers
from subjects in specific age, gender, racial or educational levels,
if the nomothetic approach is chosen. Evaluate the subject’s
answers by comparing them to rubrics for standard or “normal”
themes, patterns or trends in the groups (cultural, religious, sex) to
which the subject belongs. Identify the unique features of the
subject’s view of the world and of human relationships, if the
idiographic approach is chosen.
 Focus attention on the content of stories that the subject tells, the
feeling or tone of stories and the subject’s behaviors as he relates
the stories. Consider verbal remarks as well as nonverbal actions or
signs, such as blushing, stammering, fidgeting, avoiding eye
contact, laughing, coughing and body posture.
 Study details of the subject’s stories, feelings, tones and behaviors
to make sense of his attitudes, fantasies, wishes and inner conflicts.
Identify if there is an underlying optimism or pessimism to his
view of the world and of human relationships.
 Score stories on a one to seven-point scale, according to the
Defense Mechanism Manual. Assign scores for the following three
categories: denial, projection and identification.
 Score stories for denial, which is avoidance or changing the nature
of a theme, with the following point scale rubric:
1 – Omission;
2 – Misperception;
3 – Reversal;
4 – Statements of Negation;
5 – Denial of Reality;
6 – Overly Maximizing Positive, Minimizing Negative and
7 – Unexpected Goodness, Optimism.
For instance, assign a score of 1 (for omission), if the subject fails
to perceive salient stimuli that are perceived by nearly all of his
 peers. Assign a score of 3 (reversal) if the subject reverses terms of
the usual perception of the card, such as describing a submissive
character as having power.
 Score stories for projection, which is the subject’s projection of
feelings onto a character in the picture, using the following point
scale:
1- Attribution of Aggressive or Hostile Feelings to a Character;
2- Additions of Ominous People, Ghosts, Animals, Objects or
Qualities;
3- Magical or Circumstantial Thinking;
4- Concern for Protection from External Threat;
5- Apprehensiveness of Death, Injury, or Assault;
6- Themes of Pursuit, Entrapment, and Escape and
7- Bizarre or Very Unusual Story or Theme.
 Score stories for identification, using the following point scale:
1 – Emulation of Skills;
2 – Emulation of Characteristics;
3 – Regulation of Motives or Behavior;
4 – Self-esteem through Affiliation;
5 – Work: Delay of Gratification;
6 – Role Differentiation and
7 – Moralism.