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  1. 1. ENTR 207 Week 2 Theories of entrepreneurial Behaviour The personality perspective: Trait Theory Dr Luke Pittaway
  2. 2. What is the personality perspective? <ul><li>There is an underlying assumption that within the </li></ul><ul><li>‘ entrepreneur’ there resides an inherent, permanent and </li></ul><ul><li>relatively stable set of personality characteristics </li></ul><ul><li>A ‘personality characteristic’ is an enduring feature of a </li></ul><ul><li>person, an underlying trait that produces behavioural </li></ul><ul><li>consistency regardless of situation (Shaver, 1995) </li></ul><ul><li>The entrepreneur is assumed to be a particular personality </li></ul><ul><li>type, a fixed state of existence, a describable species, where </li></ul><ul><li>‘ once an entrepreneur, always an entrepreneur’ (Gartner, 1988; p12) </li></ul>
  3. 3. The personality perspective: Why focus on defining entrepreneurial traits? <ul><li>To distinguish entrepreneurs from the rest of society, </li></ul><ul><li>particularly successful from unsuccessful ones </li></ul><ul><li>To ‘pick winners’ - immense practical value in being able </li></ul><ul><li>to identify entrepreneurs </li></ul><ul><li>To develop an entrepreneurial profile that provides an </li></ul><ul><li>effective selection instrument for those parties with a </li></ul><ul><li>financial interest in entrepreneurship e.g. Venture </li></ul><ul><li>Capitalists, Banks, Government Agencies etc. </li></ul><ul><li>To enable the identification and encouragement of a </li></ul><ul><li>long term supply of a successful entrepreneurial class </li></ul>Key objectives:
  4. 4. Single trait approaches: Achievement Motivation (n-Ach) <ul><li>David McClelland in his pioneering 1961 book The Achieving </li></ul><ul><li>Society developed the concept of Achievement Motivation: </li></ul><ul><li>Defined as - A desire to do well for the sake of an inner feeling </li></ul><ul><li>of personal accomplishment. A desire to excel. To have </li></ul><ul><li>personal responsibility for solving problems. To achieve a goal </li></ul><ul><li>in relation to a set of standards. </li></ul><ul><li>Contradictory and inconclusive findings </li></ul><ul><li>Chell et al (1991) conclude that: </li></ul><ul><li>‘ despite the claim of empirical support, there are lingering </li></ul><ul><li>doubts as to the predictive power of the achievement </li></ul><ul><li>motive’ (p39). </li></ul>
  5. 5. Single trait approaches: Risk-Taking Propensity <ul><li>Entrepreneurs have been described as ‘moderate’ risk-takers; who </li></ul><ul><li>take ‘calculated risks’ (Timmons et al, 1985). Also argued that </li></ul><ul><li>successful entrepreneurs have ability to minimise the risks they take </li></ul><ul><li>Number of studies have found no significant differences between </li></ul><ul><li>entrepreneurs and managers or the general population (see </li></ul><ul><li>Brockhaus, 1980) </li></ul><ul><li>A complex issue, regards an individual’s perception of risk: </li></ul><ul><li>‘ Perhaps in some instances, as the entrepreneur becomes more </li></ul><ul><li>aware of his business environment, he realises that the venture has </li></ul><ul><li>been more risky than he originally thought’ (Brockhaus, 1980; p512) </li></ul><ul><li>Perceived context more important determinant of risk-taking than </li></ul><ul><li>personality </li></ul>
  6. 6. Single trait approaches: Locus of Control <ul><li>The psychologist Rotter (1966) developed personality measure of </li></ul><ul><li>‘ locus of control’ – which regards the degree to which people </li></ul><ul><li>believe they are in control of their own destinies: </li></ul><ul><li>High internal locus of control: Individuals have strong belief that they are </li></ul><ul><li>in charge of their own destiny. Events are contingent on their own behaviour </li></ul><ul><li>and their own relatively permanent characteristics – ‘I make things happen’ </li></ul><ul><li>High external locus of control: Individuals feel events are outside their </li></ul><ul><li>control and are the result of luck, chance, fate or powerful others – ‘things </li></ul><ul><li>happen to me’ (see Brockhaus, 1982). </li></ul><ul><li>Again, inconclusive and contradictory findings </li></ul><ul><li>Notion that these traits are not static, open to change and tempered </li></ul><ul><li>by experience </li></ul>
  7. 7. Multi-trait approaches <ul><li>Timmons et al (1985) proposed the most extensive list of </li></ul><ul><li>entrepreneurial traits: </li></ul><ul><li>Total commitment, determination and perseverance </li></ul><ul><li>Drive to achieve and grow </li></ul><ul><li>Orientation to goals and opportunities </li></ul><ul><li>Taking initiative and personal responsibility </li></ul><ul><li>Persistence in problem-solving </li></ul><ul><li>Veridical awareness and sense of humour </li></ul><ul><li>Seeking and using feedback </li></ul><ul><li>Internal locus of control </li></ul><ul><li>Tolerance of ambiguity, stress and uncertainty </li></ul><ul><li>Calculated risk-taking and risk-sharing </li></ul><ul><li>Low need for status and power </li></ul><ul><li>Integrity and reliability </li></ul><ul><li>Decisiveness, urgency and patience </li></ul><ul><li>Dealing (positively) with failure </li></ul><ul><li>Team builder and hero maker </li></ul><ul><li>Other commonly cited traits include independent, innovative, creative, </li></ul><ul><li>visionary, assertive, self confident, proactive and so on… </li></ul>
  8. 8. Methodological criticisms of trait theory <ul><li>Many different definitions of entrepreneur used - few studies employ </li></ul><ul><li>the same definition </li></ul><ul><li>Diverse samples – including new entrepreneurs, established </li></ul><ul><li>entrepreneurs, graduate students, students on entrepreneurship </li></ul><ul><li>courses </li></ul><ul><li>Nature of comparison groups – founders vs non-founders, </li></ul><ul><li>entrepreneurs vs managers, potential entrepreneurs vs unlikely </li></ul><ul><li>entrepreneurs, successful vs unsuccessful entrepreneurs </li></ul><ul><li>Startling number of traits associated with the entrepreneur. </li></ul><ul><li>Gartner (1988) concludes that: </li></ul><ul><li>‘ A “psychological profile” of the entrepreneur assembled from these </li></ul><ul><li>studies would portray someone larger than life, full of contradictions, </li></ul><ul><li>and conversely, someone so full of traits that (s)he would have to be a </li></ul><ul><li>sort of generic “Everyman”’ (p21). </li></ul>
  9. 9. Philosophical criticisms of trait theory <ul><li>Key problems with personality perspective result from the </li></ul><ul><li>following implicit assumptions: </li></ul><ul><li>Stability – Personality (and therefore behaviour) is relatively stable </li></ul><ul><li>across situations. Thus, assumes that contextual factors </li></ul><ul><li>have little impact on behaviour </li></ul><ul><li>Consistency – Personality is composed of permanent, enduring and </li></ul><ul><li>static traits that do not change over time </li></ul><ul><li>Internality – Personality is located within the individual, thus not </li></ul><ul><li>available to direct observation. However, trait theorists </li></ul><ul><li>are somehow able to gain access to it by observing and </li></ul><ul><li>measuring behaviours </li></ul>
  10. 10. The born versus made/ nature versus nurture debate INFLUENCES ON OWNER-MANAGERS AND ENTREPRENEURS Personal character traits Antecedent influences Situational factors Culture of society From: Burns, 2001
  11. 11. The contribution of the personality perspective <ul><li>Primarily, focused attention away from the entrepreneurial </li></ul><ul><li>function and emphasised an important message – that </li></ul><ul><li>entrepreneurship is made up of individuals – ‘impossible to </li></ul><ul><li>discern the dancer from the dance’ (Carland et al, 1988) </li></ul>‘ If more research is desired about small business ventures, then one must learn more about the individuals who create and manage them, because the two are inextricably bound’ (Carland et al, 1988; p34). <ul><li>Trait-based research has, unsuccessfully , tried to tackle </li></ul><ul><li>an important and highly complex issue – why entrepreneurs </li></ul><ul><li>behave in the way they do </li></ul>
  12. 12. Rethinking the personality perspective <ul><li>Static character of entrepreneurial traits precludes notion that </li></ul><ul><li>entrepreneurs can learn and develop as they manage their business </li></ul><ul><li>Trait based studies basically a ‘snapshot’ of entrepreneurs at a </li></ul><ul><li>certain point in time, within a certain business and context, </li></ul><ul><li>therefore making generalisation difficult </li></ul><ul><li>More useful to think of these traits as aspects of the entrepreneurial </li></ul><ul><li>character, whatever that may be, which individuals possess in </li></ul><ul><li>different degrees at different stages in their personal development </li></ul><ul><li>Better to conceptualise entrepreneurship as a dynamic, process-based </li></ul><ul><li>phenomenon where there exists a spectrum or continuum of </li></ul><ul><li>entrepreneurial behaviour and beliefs – some people more </li></ul><ul><li>entrepreneurial than others </li></ul>
  13. 13. The importance of learning and experience ‘ While there is an undeniable core of such inborn characteristics as energy and raw intelligence, which an entrepreneur either has or does not, it is becoming apparent that possession of these traits does not an entrepreneur make. There is also a good deal of evidence that entrepreneurs are born and made better and that certain attitudes and behaviours can be acquired, developed, practised and refined – through a combination of experience and study… … not all attitudes and behaviours can be acquired by everyone at the same pace and with the same proficiency…Painstaking effort may be required, and much will depend on the motivation of an individual to grow, but it seems people have an astounding capacity to change and learn if they are so motivated and committed to do so’. (Timmons, 1999; p219)
  14. 14. References <ul><li>Brockhaus, R. H. (1980), Risk taking propensity of the entrepreneur, Academy of Management Journal , 23(3), 509-520. </li></ul><ul><li>Brockhaus, R. H. (1982), The psychology of the entrepreneur, in Encyclopedia of Entrepreneurship , C. A. Kent, D. L. Sexton, and K. H. Vesper, eds., Englewood Cliffs, N.J.: Prentice Hall. </li></ul><ul><li>Burns, P. (2001), Entrepreneurship and Small Business, Basingstoke: Palgrave </li></ul><ul><li>Carland, J. W., Hoy, F., and Carland, J. C. (1988), &quot;Who is an entrepreneur? Is a question worth asking, American Journal of Small Business , 13(1), 33-39. </li></ul><ul><li>Chell, E., Haworth, J., and Birley, S. (1991), The Entrepreneurial Personality: Concepts, Cases and Categories , London: Routledge. </li></ul><ul><li>Gartner, W. B. (1988), Who is an entrepreneur? Is the wrong question, American Journal of Small Business , 13(1), 11-32. </li></ul><ul><li>Hornaday, J. A., and Aboud, J. (1971), Characteristics of successful entrepreneurs, Personnel Psychology , 24, 141-153. </li></ul><ul><li>Hull, D. L., Bosley, J. J., and Udell, G. G. (1980), Renewing the hunt for the heffalump: identifying potential entrepreneurs by personal characteristics, Journal of Small Business Management , 18(1). </li></ul><ul><li>McClelland, D. C. (1961), The Achieving Society , New York: Van Nostrand. </li></ul><ul><li>Rotter, J. B. (1966), Generalised expectancies for internal vs external control of reinforcement, Psychological Monographs , 80, 1-28. </li></ul><ul><li>Shaver, K. (1995), The entrepreneurial personality myth, Business and Economic Review , 41(2), 20-23. </li></ul><ul><li>Timmons, J. A. (1999), Entrepreneurship for the 21st Century , Boston: Irwin/McGraw-Hill. </li></ul><ul><li>Timmons, J. A., Smollen, L. E., and Dingee, A. L. M. (1985), New Venture Creation , Homewood, Illinois: Irwin. </li></ul>