Personality Traits of Successful Entrepreneurs

                                                                   

                                  THE PERSONALITY OF AN ENTREPRENEUR

General objectives:

Have an overview of the conceptual entrepreneur.

Specific objectives:

By the end of the topic the learner should be able to:

i)                     Explain the personality traits of entrepreneur.

ii)                  Contrast entrepreneur characteristics.

iii)                Understand Opportunity analysis in entrepreneurship

Introduction

As already noted, entrepreneurship is a concept which constitutes:

v  A set of personal characteristics

v  A set of behaviors

v  A combination of these.

    

  The questions still remain?

v  Is there a typical person who becomes a successful entrepreneur?

v  Can anyone become or does it require a certain type of person to make it in entrepreneurship?

v  It is necessary to identify the personality types who are more likely to give the business the necessary acumen for success.

To fully answer the above questions, it is important to review the following concepts:

a)   Personality Traits

Personality traits are characteristics used to explain the irregularities in people’s behaviour

They help to explain why different people react differently to the same situation.

Various personality traits have been identified as important influences in successful entrepreneurship.

Three personality characteristics have emerged as “classic” characteristics typically associated with entrepreneurial personality.

v  Locus of control

v  Need for achievement (n-Ach)

v  Risk taking.

a)       Locus of Control (Self determination): An attribute indicating the sense of control that a person has over life. Enables an entrepreneur to sustain the drive and energy required to overcome the inertia in forming and managing a new venture and ensuring its growth. An entrepreneur requires both internal and external locus of control. Knowledge of self is critical in developing the motivation to venture. How relevant is personal SWOT analysis? Use of the “Johari Windows” (Joseph Luft and Harrington Ingham).

Other Characteristics related to locus of control

a.       Self confidence

b.      Personal judgment

c.       Discipline

d.      Self starter

e.       Assertiveness

f.       resilience

Motivation to excel: These are the values which an entrepreneur imposes on themselves while seeking to succeed in their activities. They include,

v  Self-imposed standards

v  Challenging goals

v  Low need for status/power

v  High need for achievement

b)     Independence and need for achievement (n-Ach): Was championed by David McClelland (1962). He emphasized the need for being one’s own boss and  need for an individual to be recognized. He identified three characteristics present in entrepreneurs as:

        i.             Individual responsibility for solving problems, setting goals and reaching these goals   through own effort.

      ii.            Moderate risk taking as a function of skill

    iii.            Knowledge of results of decisions/tasks accomplished.

c)       Risk taking: Risk includes financial, psychological and social risks. It is part of entrepreneurial process. Relationship between risk taking and success in entrepreneurship has not been conclusive as to indicate the causal relationship.

Tolerance of Risk, Ambiguity and Uncertainty

This is enhanced through:

Ø  Limit risk by defining/strategizing ends

Ø  Limit risk by controlling/monitoring means

Ø  Maximize the positive effects of stress

Ø  Minimize the negative effects of stress

PERSONAL BACKGROUND AND ENTREPRENEURIAL CHARACTERISTICS

Major contributors to this background are:

i) Childhood family environment: The environment under which the entrepreneur was brought up in. Specific concerns include:

§  Birth order

§  Parent occupation

§  Social status

§  Relations with parents

ii) Education: Major concerns are;

v  No clear relationship has been established

v  Education is important for building self confidence

v  Education is a means of developing networks and confidence to deal with people.

iii) Personal values: They include,

o   Ethical behaviour

o   Leadership values

o   Opportunism

o   Individuality

o   Aggression

o   Creativity

iv) Age: Studies have shown that 22-45 age bracket has been found to be most entrepreneurial

Most people start enterprises within this age

v) Work history: Refers to past work experience.

Dissatisfaction with one’s work motivates launch of own enterprise

Managerial experience gained from past work becomes critical in growing the enterprise.

vi) Gender of the entrepreneur:

May differ in reasons for starting a business

Explains differences in start up financing

Nature of business started may differ

Women start businesses when a little older than men.

SUSTAINING ENTREPRENEURIAL MOTIVATION

i)                   Use of role models:

Are those individuals influencing an entrepreneur’s career choice and style

Provides support capacity as a mentor during launch and after

Provides information, advice and guidance

     Need for a close role model who is available as needed.

ii)                Moral support networks:

Gives psychological support

Could include spouse, children, friends or other relatives

iii)              Professional support networks:

Gives advice and counsel in business activities

Could include associates, trade associations, clubs, alumni associations

ENTREPRENEURSHIP AND CULTURE

Entrepreneurs are humans in a society which defines culture.

Culture is expressed in both values and judgments of individuals.

Cultural factors include:

v  Religion

v  Personal relations – collectivity, masculinity, etc.

v  Attitude towards risk

v  Networks

i)                    Religion:

Shapes culture

Leads to a view of the world

Consider “protestant ethics” vs. “Catholicism”

ii)                  Personal relations: Includes,

Power distance

Uncertainty avoidance

Collectivity

Masculinity

iii)                Attitude towards innovation:

Extent to which innovation is accepted as extra ordinary and rewardable thing

Belief that the future will be different from the present and that it will be created by us.

iv)                Networks:

Are a Framework of individuals and organizational relationships

Useful for accessing information, markets, etc

Appreciation of different cultures is important.

Review questions:

i)                    Discuss the role of culture in entrepreneurship

ii)                  Is religion important in new venture creation?

iii)                ‘Men start new ventures earlier than women’. Discuss.

List of References:

Jeffry A. Timmons, Stephen Spinelli (2003). New venture creation.
Jenkins, M., & Jenkins, G. (1997). Entrepreneurial intentions and outcomes: A comparative causal mapping study.
William B. Gartner (1985). A conceptual framework for describing the phenomenon of the new venture creation