Max Lee started his own consultancy company at the age of 24, after completing his graduation. His company dealt with people that needed help with of setting and launching of businesses, decoration etc. He was doing well initially, yet he had hoped for more returns from his own business, and so was looking for more lucrative avenues. He had an opportunity to start his own business from the initial returns of his consultancy company, and that’s what he did.
He ventured into whole-sale purchase and supply of branded jeans. His supplier was an old school friend who was giving him the best rates. The initial response was very good and he started shifting his product in large amounts. The deal he had with his old school friend Chan was that he would pay him for his supplies at the end of every 6 months. This was an ideal scenario for Lee as his investment into this business venture was minimal.
After the first six months, time for payment came, and in that time, Lee had made a large number of sales. However, Chan had deceived Lee, by charging him for almost twice the amount of each pair of jeans. Lee owed Chan for much more than he had made selling the branded jeans. Lee had been careless and put a lot of faith in his old school friend who had Lee signing invoices for an exaggerated sum of money in the whole 6 months of their business dealings.
Lee confronted Chan but on the threat of a lawsuit, Lee decided to pay for what he owned, the paper trail proved that. Lee was not left with much of a choice - he had a huge loss and was close to selling his consultancy company just to cover the amount he owed to Chan.
Lee’s mistake was to go into business with a friend, and for trusting him blindly. This was a blunder that cost him dearly. Also Lee realized that it was brought upon by his own haste to make a fortune. After making those mistakes, he realized that it is never a good idea to go into business with friends; relatives etc. and also been so careless as not to check the details of the business dealings was a fatal error, which he should not have made.
Lee’s first attempt to do business and get rich was enough to left him broke. However he did not give up, and continued his pursuit. He went back to concentrate on his consultancy company, and after 2 years he was again in a stable position. His next business idea was to open a Café. Providing consultancy for the set up and launch of businesses, he had little trouble in starting his own Cafe. He had decided to stick with what he was good at, rather than chase after ideas, and concepts that could only damage him.
According to Bandura (2001), self-efficacy is defined as one’s belief in one’s own ability in terms of dealing with different situations. Self-efficacy is a contributing factor in defining our goals and how we set about to attain them. He also states that the process by which self-efficacy is developed is through the past experiences of the individual’s life which include social encounters. This is the reason why the Bandura (2001) is of the view that personality development is reliant on the social experiences of an individual.
Self-efficacious people tend to recover from setbacks much quicker, and are able to achieve their goals. On the other hand, low self-efficacy can lead to a pessimistic behavior where one tends to undermine and devalue one’s own ability and so avoids challenges in life (Graham et. al 2011). According to the researcher Judge (2002), neuroticism and self- esteem are similar concepts to that of self-efficacy.
The main distinction between people with a powerful sense of self-efficacy is that they are not shy of taking on challenges, which also helps them to be more committed and recover from any possible setback.
Self-efficacy is closely linked to one’s optimistic beliefs regarding the handling of tough situations and challenges. It simply is a way of examining how well a person might do when confronted with problems.
Psychologist Bandura (1997) is of the view that self-efficacy creates an impact on the way one think and act. Keeping this in mind, low self-efficacy can be related to depression and helplessness. In this case, it is very easy for an individual to adopt a pessimistic approach to life. A person who sets himself ambitious goals, and persists withthem is said to have a higher sense of self efficacy. Such a person is more likely to achieve those said goals. At the same time, a person with low self-efficacy would avoid challenges and doesn’t know how to deal with setbacks.
In the recent past, general self-efficacy (GSE) has been developed which is considered to be an effective tool that can be utilized to determine the self-efficacy of an individual. GSE aims to determine the self-efficacy of an individual over a variety of different tasks and scenarios. Many researchers argue of the correctness of this technique, claiming that the accuracy of this method is to be doubted.