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Entrepreneurial Personality

Dr. Noor Muhammad

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Models Of The Entrepreneurial Personality

FOUR MODELS OF ENTREPRENEURIAL

PERSONALITY IDENTIFIED IN THE LITERATURE:

– Need for Achievement

– (Internal) Locus of Control

– Risk-Taking

– Need for Autonomy

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NEED FOR ACHIEVEMENT (N-ach)

One of the first studies to identify an entrepreneurial trait was that carried out by McClelland (1961)

This identified "Need Achievement" (n-Ach) as the central force behind the entrepreneur.

This "n-Ach" can be defined simply as the “drive to excel, to achieve a goal in relation to a set of standards”.

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NEED FOR ACHIEVEMENT (N-ach)

McClelland shows that those individuals with high n-Ach have a strong desire to be successful and tend to have the following attributes:

preference for personal risks and willingness to work harder

a belief that one's personal efforts will be influential in the attainment of some goal and pleasure derived from this belief

a tendency to perceive the probability of success in attaining a goal as being relatively high

capacity to plan ahead and be particularly aware of the passage of time

an interest in excellence for its own sake.

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NEED FOR ACHIEVEMENT (N-ach)

While this trait has been shown to be associated with

successful entrepreneurs, it has also been shown to

be associated with successful individuals from other

walks of life,

While there would appear to be a link between

achievement motivation and success, it does not

always follow that there will be a link with

entrepreneurship

On its own achievement motivation is insufficient to

explain entrepreneurship, and it will need to be

looked at in conjunction with other factors.

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INTERNAL LOCUS OF CONTROL

Another single trait approach that has been the subject of

much discussion in entrepreneurship, and which is

closely related to the need for achievement, is the effect

of “locus of control” on the decision to become an

entrepreneur.

This theory suggests that individuals who cannot believe

in the ability to control the environment through their

actions would be reluctant to assume the risks that

starting a business entails.

The pioneering researcher in this field was Rotter (1966),

who defined two categories of locus of control,

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INTERNAL LOCUS OF CONTROL

"When a reinforcement is perceived by the subject as

following some action of his own but not being entirely

contingent upon his action, then in our culture, it is

typically perceived as the result of luck, chance, fate, as

under the control of others, or as unpredictable because

of the great complexity of the forces surrounding him.

When the event is interpreted in this way by an individual,

we have labelled this a belief in external control. If the

person perceives that the event is contingent upon his

own behaviour or his own relatively permanent

characteristics, we have termed this a belief in "internal

control"

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INTERNAL LOCUS OF CONTROL

A high internal locus of control tends to be found in people who believe that the outcome of an event or action is contingent on their behaviour rather than being the result of external forces

They tend to prefer to take responsibility for things and to believe that they can influence the outcome of events. As a result, they tend to be self-confident with a strong self-belief and often a high level of optimism.

A number of studies have suggested that locus of control is a characteristic that is linked more with success than entrepreneurship.

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RISK-TAKING

Cantillon (1755) first associated uncertainty and the entrepreneur

Mill (1848) / Knight (1921) the ability to bear risk is the distinguishing feature between entrepreneurs and managers reiterated this relationship

Hebert and Link (1982) concluded that practically all past economic theories of entrepreneurship have centred either on uncertainty, innovation, or some combination of the two, and that the characteristics of the entrepreneur should be a reflection of this.

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RISK-TAKING

Long (1983) identified three themes in economic

literature namely "creative opportunism", "uncertainty and

risk", and "complementary managerial competence", and

that these three themes are interwoven in various

combinations and permutations in virtually all formal

theories of entrepreneurship.

McClelland's (1961) study concluded that persons with

high n-Ach would also have moderate risk-taking

propensities. There seems to be an association between

entrepreneurship and risk-bearing in other disciplinary

areas other than economics.

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NEED FOR AUTONOMY

This relates to the general perception of

entrepreneurs as ‘loners’ and anti-authority figures

who are uncomfortable with structure and dislike

constraints on their freedom of action.

The pursuit of a single trait that would identify

entrepreneurs from other types of individuals has led

to the suggestion by a number of psychologists that

entrepreneurs are singularly different individuals

from the rest of society in all aspects of their

character.

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NEED FOR AUTONOMY

Endorsement of this concept of the entrepreneur as

a special individual who rejects society initially came

in the Bolton report (1971).

This suggested that the small firm can provide a

productive outlet for the energies of that large group

of enterprising and independent people who set

great store by economic independence and many of

whom are anti-pathetic or less suited to employment

in a large organisation.

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NEED FOR AUTONOMY

This need for autonomy, which leads to

entrepreneurial behaviour was presumed by certain

researchers to be directly related to early childhood

experiences.

According to Kets de Vries (1977), entrepreneurial

behaviour such as a sense of impulsivity and a

persistent sense of dissatisfaction and rejection,

were conditions of the entrepreneur's unhappy

formative years

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NEED FOR AUTONOMY

These characteristics lead to the individual's inability

to accept authority, resulting in a rejection of

employment in structured organisations.

S/he would search for an occupation in

entrepreneurship that would maximise the

individual's control over his/her destiny, and also

maximise independence.

This seems to be linked to Rotter's locus of control

model - Kets de Vries' deviant-entrepreneurs should

by definition have a high internal locus of control.

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NEED FOR AUTONOMY

In a further study he suggests that entrepreneurs seem to

be achievement oriented, like to take responsibility for

decisions, and dislike repetitive, routine work.

Creative entrepreneurs possess high levels of energy

and great degrees of perseverance and imagination,

which enable them to transform what often began as a

very simple, ill-defined idea into something concrete.

High N.Aut. is a key motivating factor for people setting

up on their own in business. It is not about having

"power" but having independence and the opportunity to

make your own decisions in your own way.