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This article was downloaded by: [TIB & Universitaetsbibliothek] On: 09 May 2014, At: 00:10 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Entrepreneurship & Regional Development: An International Journal Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/tepn20 The significance of personality in business start-up intentions, start-up realization and business success Hermann Frank a , Manfred Lueger b & Christian Korunka c a Institute for Small Business Management and Entrepreneurship , Vienna University of Economics and Business Administration , Augasse 2-6, A-1090, Vienna, Austria b Institute for Sociology and Social Research , Vienna University of Economics and Business Administration , Augasse 2-6, A-1090, Vienna, Austria c Department of Psychology , Vienna University, Universitätsstraße 7 , A-1010, Vienna, Austria Published online: 30 May 2007. To cite this article: Hermann Frank , Manfred Lueger & Christian Korunka (2007) The significance of personality in business start-up intentions, start-up realization and business success, Entrepreneurship & Regional Development: An International Journal, 19:3, 227-251, DOI: 10.1080/08985620701218387 To link to this article: http://dx.doi.org/10.1080/08985620701218387 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content.

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Page 1: The significance of personality in business start-up intentions, start-up realization and business success

This article was downloaded by: [TIB & Universitaetsbibliothek]On: 09 May 2014, At: 00:10Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registeredoffice: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

Entrepreneurship & RegionalDevelopment: An International JournalPublication details, including instructions for authors andsubscription information:http://www.tandfonline.com/loi/tepn20

The significance of personality inbusiness start-up intentions, start-uprealization and business successHermann Frank a , Manfred Lueger b & Christian Korunka ca Institute for Small Business Management and Entrepreneurship ,Vienna University of Economics and Business Administration ,Augasse 2-6, A-1090, Vienna, Austriab Institute for Sociology and Social Research , Vienna Universityof Economics and Business Administration , Augasse 2-6, A-1090,Vienna, Austriac Department of Psychology , Vienna University, Universitätsstraße7 , A-1010, Vienna, AustriaPublished online: 30 May 2007.

To cite this article: Hermann Frank , Manfred Lueger & Christian Korunka (2007) The significanceof personality in business start-up intentions, start-up realization and business success,Entrepreneurship & Regional Development: An International Journal, 19:3, 227-251, DOI:10.1080/08985620701218387

To link to this article: http://dx.doi.org/10.1080/08985620701218387

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the“Content”) contained in the publications on our platform. However, Taylor & Francis,our agents, and our licensors make no representations or warranties whatsoever as tothe accuracy, completeness, or suitability for any purpose of the Content. Any opinionsand views expressed in this publication are the opinions and views of the authors,and are not the views of or endorsed by Taylor & Francis. The accuracy of the Contentshould not be relied upon and should be independently verified with primary sourcesof information. Taylor and Francis shall not be liable for any losses, actions, claims,proceedings, demands, costs, expenses, damages, and other liabilities whatsoeveror howsoever caused arising directly or indirectly in connection with, in relation to orarising out of the use of the Content.

Page 2: The significance of personality in business start-up intentions, start-up realization and business success

This article may be used for research, teaching, and private study purposes. Anysubstantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,systematic supply, or distribution in any form to anyone is expressly forbidden. Terms &Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions

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ENTREPRENEURSHIP & REGIONAL DEVELOPMENT, 19, MAY (2007), 227–251

The significance of personality in business start-upintentions, start-up realization and business success

HERMANN FRANKy, MANFRED LUEGERz andCHRISTIAN KORUNKA§yInstitute for Small Business Management and Entrepreneurship,

Vienna University of Economics and Business Administration;

Augasse 2-6, A-1090 Vienna, Austria, email: [email protected]

zInstitute for Sociology and Social Research, Vienna University of Economics

and Business Administration, Augasse 2-6, A-1090 Vienna, Austria

§Department of Psychology, Vienna University, Universitatsstrabe 7,

A-1010 Vienna, Austria

Numerous studies with contradictory results have been published on the relationships ofpersonality factors with business start-up intentions and business success. Using a comparisonof four conceptually similar studies (Vienna Entrepreneurship Studies) as a basis, this paperanalyses the varying roles of personality factors in business start-up intentions, in start-upsuccess and in business success. It can be shown that the significance of personality traits among(potential) business founders decreases in the course of start-up/new business development –from initial start-up intentions, to the start-up process and realization, and on to business success(existence/growth). While up to 20% of the variance in the origins of entrepreneurial intentionscan be explained by personality traits, this proportion practically drops to zero in explainingbusiness success. The studies also enable one to assess the value of personality in relation to otherconfiguration fields. Overall, the data from the four studies confirms that a meaningfulassessment of the value of personality traits is only possible in conjunction with additionalinfluencing factors in the founder’s environment, resources and processes. The results suggestthat especially for the development of business start-up intentions it is necessary to take measuresto promote personality characteristics in schools and universities. It is not possible to predict thelong-term success of a business by evaluating the personality factors of the business founder inearly stages of the start-up process.

Keywords: personality traits; entrepreneurial intentions; start-up process; start-up realization;success of start-ups; configuration approach.

1. Introduction

The field of new business start-ups has been the subject of increasing interest. In thiscontext, many different expectations have been articulated which functionally aimfor the macroeconomic goal of growth: the primary concern is to increase the potentialnumber of people interested in starting new businesses (start-up intentions), tostimulate as many business start-ups as possible (start-up realization) and finally tosecure the survival and/or growth of these start-ups (business success).

The complexity of these sub-areas (intention, decision, success) and the interplay oftheir processes have been the topic of many research papers aiming to generate theory.These works have made a substantial contribution to re-orienting entrepreneurship andstart-up research, and they can be summarized in the phrase ‘from the entrepreneurial

Entrepreneurship and Regional Development ISSN 0898–5626 print/ISSN 1464–5114 online � 2007 Taylor & Francishttp://www.tandf.co.uk/journals

DOI: 10.1080/08985620701218387

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personality to the start-up process’ (Frank 1997). However, it is undisputed that aperson can make substantial contributions to the structuring of the start-up process inhis/her interactions with the environment and relevant stakeholders. In any case, thedevelopment of start-up intentions as well as the decision to start a business requires aperson. People possess certain personality traits, and the value of these characteristics indecisions related to the start-up processes is the focus of interest in this paper.

The genuinely psychological explanatory models employed for this purpose arethus based on the personality traits of new business founders and attempt to answerthe questions of (1) whether the founders can generally be described with certainpersonality traits, and (2) whether these characteristics can be placed in a causalrelationship with success (Rauch and Frese 2000).

First of all, it is necessary to note that the explanatory approach based on the start-up entrepreneur’s personality traits has to be regarded critically for several reasons.On the one hand, the question of the entrepreneurial personality is often backed bya simple characteristics theory which does not (or does not sufficiently) take thedynamics of the start-up process, general social circumstances and interactionsbetween personal and situational determinants into account, thus reducing thecomplexity of start-up activities too sharply and inappropriately. On the other hand,it is necessary to take a critical look at this approach from the perspective ofpersonality theory itself, in particular due to the question of stability in personalitytraits as well as the technical aspects of measuring these characteristics.

Personality traits are now generally regarded as the result of interaction betweennatural (‘psychogenetic’) and environmental (‘learning behaviour’) factors. Thenature versus environment/surroundings question has therefore been succeeded by thequestion of stability and mutability in personality traits. In addition, an interactionistposition which explains behaviour as a result of each newly configured interaction ofpersonal and situational factors is generally accepted. Therefore, when discussing the‘entrepreneurial personality’, a critical, reflexive position which takes the aforemen-tioned objections into account is most appropriate.

However, at the same time it is necessary to note that several characteristics havebeen confirmed repeatedly by empirical research in the relatively long academictradition of searching for an ‘entrepreneurial personality’: probably the best-knowncharacteristic in this context is that of a need for achievement, based on the work ofMcClelland (1967). In the relevant literature, a number of researchers have shownthat start-up entrepreneurs demonstrate stronger tendencies in this area than otherprofessionals (Begley and Boyd 1986, Green et al. 1996) and that there arerelationships between the strength of one’s need for achievement and business success,although such relationships are often admittedly weak (Klandt 1990, Langan-Fox andRoth 1995). On the other hand, research has also yielded decidedly critical discussionsof this particular issue (Scott Frey 1984). In addition to the need for achievement,another personality dimension which is examined especially often in the context oforganizational and work psychology is that of one’s locus of control. Current researchfindings confirm that people with a strong internal locus of control are more adept atdealing with the pressures of work situations, that they are more satisfied with theiractivities, and that they can cope with change more effectively. A strong internal locusof control also appears to be necessary in order to take on the risks of starting a newbusiness (Cromie and Johns 1983), while it is also plausible that such individuals alsoshow a stronger need for achievement (Brockhaus and Horwitz 1986). The thirdcharacteristic mentioned frequently in specific reference to entrepreneurs is the

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person’s risk inclination or risk propensity. Empirical findings show that entrepreneurscan be characterized in ideal terms by a medium level of risk propensity (Stewart1996, Gobel and Frese 1999), and that their characteristics in this respect are generallyhigher than those of managers (Stewart Jr and Roth 2001).

In addition to the three personality traits mentioned above, numerous othercharacteristics have also been examined. The use of broadly defined personalityquestionnaires to analyse the ‘entrepreneurial personality’ (Brandstatter 1988, Moran1998) is an approach which has to be judged critically. On the other hand, newerapproaches based on action theory are more promising (Frese 1998, 2000, 2001).

In all of the above-mentioned approaches to the ‘entrepreneurial personality’, onecan make the critical observation that the singular observation of traits is generally notsufficient to explain decisions to pursue an entrepreneurial career or to explain successin entrepreneurship. In addition, fundamental questions arise as to the stability ofpersonality traits and as to a suitable and accurate manner of implementation (Frank1997, Rauch and Frese 2000). Likewise, the relevant literature does not supplyinfluential opposing positions to the question of the entrepreneurial personality.For example, critics base their arguments on the high degree of heterogeneity amongsuccessful business founders (Gartner 1985) or the highly mutable nature ofpersonality traits in the course of business development (Shaver 1995), as thedemands made of the entrepreneur in the growth phase are quite different from thosearising in the start-up process (Chell et al. 1991). In addition, it has also been observedthat the question of personality is subject to fashionable trends similar to those whichprevail in management research (Naffziger 1995, Nicholson 1998) or even personalpsychology as a whole. From a historical perspective, we have seen the field of personalpsychology undergo a phase of overestimation, followed by an opposing critical phaseand then a comeback in recent years (Rauch and Frese 2000).

This paper tests the following hypothesis by means of a comparative analysis offour carefully designed and conceptually similar studies.

Hypothesis 1: Personality explains a higher proportion of variance in start-up intentionscompared to start-up realization and business success.

The relevant literature points to the varying status of personality traits in the start-upprocess (from initial thoughts about self-employment and the decision to found a newbusiness right up to business success). Naffziger (1995) distinguishes three phases ofenterprise development in which personality can have varying levels of significance:the decision to start a new business, behaviour in the start-up process, and businesssuccess. In their outstanding overview, Rauch and Frese (2000) differentiate studieson the emergence of entrepreneurship and on entrepreneurial success, using acomparison of correlation values in the relevant works to support the conclusion thatpersonality plays a somewhat larger role in the origins of entrepreneurship than it doesin business success. One possible explanatory approach to this difference can be foundin the differentiation of ‘weak’ and ‘strong’ situations (Mischel 1968, Adler 1996).Weak situations are characterized by a low degree of standardization, a high degreeof complexity and thus little orientation for structuring actions. In these situations,personality factors exercise a stronger influence on the structuring of actions than instrong situations, where personality factors carry less weight due to clear requirementsand clear general circumstances. Starting up businesses – especially preparing andrealizing the start-up – involves a large number of weak situations. Similar argumentshave been put forth by Begley and Boyd (1987) and Herron and Robinson (1993),

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as well as by Utsch et al. (1999). However, no research papers to date have enabled adirect empirical verification of this thesis beyond the comparison of professional groups(typically managers versus entrepreneurs).

With regard to the question of personality among new business founders andentrepreneurs, this is less a question of the explanatory value of individual dimensions(such as the need for achievement) than one of configurations. The configurationapproach takes a comprehensive or holistic perspective which is far more suitable forcapturing and depicting the complexity of starting a new business. In managementresearch, the configuration approach developed out of various strategy approaches.Highly significant examples include the work of Danny Miller, Peter Friesen andHenry Mintzberg (Mintzberg 1979, Miller and Friesen 1984, Miller 1987), who madesubstantial contributions to the development of this approach.

According to this approach, each enterprise is distinguished by its own individualconfiguration, which results from the specific interplay of variables in that businessorganization. One unique feature of the configuration approach is that it does notexclude variables at first; at the start of analysis, efforts should be focused on collectingas much information as possible and thus making it possible to generate acomprehensive depiction of reality. This is backed by theoretical claims (cf. thecomprehensive overview of the literature in German and English language byHienerth 2004), especially with regard to holistic observation, fit and simplicity:

1. Holistic observation lies at the core of the configuration approach. In this context,we assume that the parts of a social unit (such as an organization) gain theirsignificance from the overall unit and can not be understood in isolation fromone another (Meyer et al. 1993). At the same time, holistic analysis aims toinclude many variables in order to facilitate allocation to configuration typesand to minimize allocation errors (Ketchen et al. 1997). Selecting variables anddetermining the number of variables used thus play a decisive role, as thesesteps impact the model’s depiction of reality (Hienerth 2004).

2. The large number of effective individual factors which are relevant to successmakes it necessary to adapt the model. A high degree of fit implies that theorganization is in an optimum state. However, this postulate of consistencycannot be viewed as the one and only best way. ‘There is no one best set ofvariables that should be used to describe all sets of configurations’ (Miller andFriesen 1984).

3. Simplicity means that strategic and operational decisions refer to essentialinfluencing factors, thus reducing complexity. This is of interest in terms oftheory as well as practice.

For practical purposes, it is useful to merge the large number of variables into groupsor ‘imperatives’, thus lending (abstract) structure to the configuration analysis itself.This is advantageous in that it enables us to generate arguments with a small numberof (internal and external) areas of influence and configuration dimensions.

For the regression-based analytical procedure chosen below, this means that alldimensions within each individual imperative are included in the analysis (en bloc),while the significance of the imperatives for the issue in question is accounted for usingan appropriate stepwise procedure. With regard to fit, it is important to ensure thatthe significant predictors yield a picture that can be interpreted sensibly. For the sakeof simplicity, the large number of predictors is reduced to those which are statisticallysignificant.

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The configuration approach, which was originally developed for largeorganizations, was also adapted in several ways for small and medium-sizedcompanies (Gartner 1985, Covin and Slevin 1991, Snuif and Zwart 1994, Mugler1998). If we summarize the basic studies cited here, the following structure ofconfiguration dimensions (imperatives) results: the traits of the founder/entrepreneur(personality), resources/environment and process (as the set of management functionsplanning, organization, allocation of human resources, and review/monitoring).Thus, as compared to the work by Naffziger on the personality of the entrepreneur(in which the varying significance of personal characteristics for different stages ofentrepreneurial activity is likewise addressed; Naffziger 1995: 32) we use a differentapproach: the configuration approach also takes other imperatives into account astheoretically equivalent. In this way, the individual remains an appropriate partof analysis, but the focus on personality is sacrificed in the interest of a morecomprehensive view which integrates the start-up environment, resources and process.In empirical terms, this makes it possible to analyse the significance of personality inlight of the other imperatives.

In light of the conceptual comparability of our studies, the configuration fields of‘environment’ and ‘resources’ are presented and analysed together in this paper,as human capital (the most essential personnel resource) is not developed until theeducation stage and financial resources play a subordinate role among secondaryschool students. It is also necessary to consider the fact that, especially in the pre-organization stage of the start-up process, resources and the environment can not bestrictly separated, as the environment encompasses substantial resources such as theentrepreneurial climate.

The mutual relationships among these dimensions shape and modify anenterprise’s configuration over time, and the development of a (start-up) enterprisecan thus be seen as a sequence of configurations. In the field of start-up research, theconfiguration approach enables a comprehensive and integrative analysis of howbusiness start-ups develop, and it illuminates the changes in each dimension. Theconfiguration approach therefore enables us to judge the value of personality traits inthe start-up process. This possibility results from the integrative perspective inherentto the configuration approach.

2. The ‘Vienna entrepreneurship studies’

2.1 Study concept

The four ‘Vienna Entrepreneurship Studies’, which are only presented briefly in thispaper, were started in 1996 by an interdisciplinary group of researchers from theVienna University of Economics and Business Administration and the University ofVienna. The studies are conceptually based on a configuration-theory approach, thusthey are well-suited for comparative empirical analysis. The four studies cover theentire time frame of the business founder’s development, from the origins of initialstart-up intentions to the start-up process and realization right up to the success of thenew business. The fourth study is truly longitudinal and thus allows us to analysecause-and-effect relationships.

For each of the four studies, the sub-dimensions of the configuration dimensions‘personality’, ‘resources/environment’ and ‘process’ were defined and implemented,

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each according to the concrete questions addressed. In the configuration dimensionof ‘personality’, each study defined the three most important personality dimensionswhich are relevant to business start-ups (need for achievement, locus of control,risk propensity), and each of the three dimensions was implemented using publishedscales appropriate for the ages and samples encountered. The construct of personalentrepreneurial orientation used in the studies is personality-based and thuscategorically different from the organizational construct of ‘entrepreneurial orienta-tion’ as developed and applied by Covin and Slevin (1991) and Wiklund andShepherd (2005).

2.1.1 Study 1. Personal entrepreneurial orientation and start-up inclinations: an inventory of

students at general and vocational secondary schools in Austria (Frank et al. 2001)

This study had the objective of analysing entrepreneurial orientation and start-upintentions at relatively early stages, long before realistic start-up intentions or processesmanifest themselves. In this context, education has become a research topic ofincreasing interest (Brockhaus 1993, Vesper 1993). On the basis of configurationtheory, a questionnaire was developed and presented to students at various schooltypes (general, technical and vocational secondary schools). In putting together thesample, special attention was paid to covering a broad range of school types and tothe completeness of results from the classes selected. The questionnaires were used inthe 10th- and 12th-year classes (at general secondary schools) and the 13th year(at technical and business secondary schools).

The sub-dimensions used are based on an analysis of the relevant literature aswell as expert interviews conducted during a workshop; the configuration dimensionswere defined by the research team. The following sub-dimensions of the ‘environment/resources’ and ‘process’ configuration fields were defined and implemented for thisstudy.

1. Supportive upbringing: the extent of perceived support and encouragementfrom the respondents’ parents during their upbringing.

2. Entrepreneurs in the environment: this covers both social reproduction (i.e. self-employed parents) as well as role models in the microsocial environment.

3. Entrepreneurial orientation of the school: describes the school’s general orientationwith regard to self-employment and entrepreneurship.

4. Independent thought and criticism as values encouraged in instruction: describes thefundamental orientation of school values with regard to independent thinking,critical reflection and the creative discretion students are allowed.

5. Start-up-oriented instruction methods: this defines methods which have a directrelationship with starting a new business (e.g. business plan simulations) and/or can be characterized as activating (as opposed to passive/reproducing)instruction methods.

6. Team-based instruction methods: these are educational methods based onteamwork (e.g. projects).

7. Functions and network: describes the extent of networking with fellow studentswhich is relevant to self-employment.

8. Use of technology: this sub-dimension deals with the degree to which various(new) information technologies are used.

The dependent variable for this study is the degree of start-up intentions.The intention to start a new business consists of a general entrepreneurial orientation

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and an inclination toward founding a new business – with reference to fundamentalbusiness knowledge and start-up inclinations – which are understood to serve as ageneral estimate of the probability of later self-employment. Strong start-up intentionsare among the main prerequisites for later entry into the start-up process.

2.1.2 Study 2. Entrepreneurial spirit: personal entrepreneurial orientation and start-up

inclinations among university-level students (Frank et al. 2002)

In this study, students of subjects both closely and remotely related to start-ups werequestioned with regard to the origins of entrepreneurial attitudes, likewise on the basisof configuration theory. The sample consisted of students at Austrian universities andspecialized colleges. The students selected were close to completing their studies at theuniversities or in their final year at the specialized colleges.

The configuration dimensions employed in this study were similar to those used inthe first study. In some areas, the dimensions had to be adapted in order to ensure thatthe relevant fields were covered effectively for university-level students. Adaptationswere thus based on the age-specific inclusion of relevant influencing factors. For thisreason, the use of technology and supportive upbringing were removed, and the areas ofsocial independence (motives for the selection of location, residence abroad, etc.) andencouraging professional contacts (the social and networking-related aspects of possibleprofessional activities) were defined and implemented. The process dimensions wereadapted to suit university-level educational processes. ‘Start-up intentions’ are likewisedefined as personal entrepreneurial orientation, start-up suitability and start-upinclinations.

2.1.3 Study 3. Supporting and hindering factors in the start-up process (Frank et al. 1999a,b,

Lueger et al. 2000, Korunka et al. 2003)

The start-up process – from start-up intentions to the early stages of entrepreneurialdevelopment – was analysed on the basis of configuration theory in this comprehensiveempirical study. The data set, which is representative of the Austrian start-uplandscape in its essential indicative values (compared to the composition of theAustrian Chamber of Commerce, which all commercial enterprises are required tojoin and which is subdivided into the fields of Trades/Services, Industry, Tourism/Leisure, Transport and Banks/Insurance), consists of people in various stages of thestart-up process, from initial start-up ideas (contact with a relevant informationor advising centre) to the start-up stage itself and the launch of business operations(post-start-up phase).

The questionnaire was developed on the basis of an analysis of the relevantliterature and expert interviews; the configuration dimensions were defined by theresearch team.

In this study, the configuration dimensions were adapted to suit the start-upprocess as follows.

1. Role models are people in the budding entrepreneur’s micro- and macrosocialenvironment who create a positive image of start-ups and entrepreneurship.

2. Family restrictions: These are perceived restrictions on career activities in thefounders’ or entrepreneurs’ family surroundings.

3. A push motive for starting a new business is found in cases where the business isstarted out of necessity (typical example: a start-up due to unemployment).

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4. Support in the preparation phase: This dimension describes the perceived supportfrom various new businesses advising institutions or facilities.

5. Significance of networks: Estimates of the presence and value of networks whichcould be of significance for the start-up (customer acquisition through theprivate sphere, activities in associations, etc.).

6. Financial situation: Financial resources (income situation, collateral, etc.)7. Human capital consists of education and professional experience relevant to

starting a new business, relevant experience in the respective industry androle-related experience as well as knowledge of the law relevant to starting newbusinesses.

8. Organizational effort in the start-up process refers to the respondents’ estimates ofthe effort required in various areas relevant to the start-up (location searches,business plan creation, etc.).

9. The use of information consists of estimates of the value of start-up-relatedinformation resources (e.g. access to grants).

10. Failure considerations describe critical considerations in the course of the start-upprocess.

11. Start-up difficulties refer to the respondents’ assessment of problems in the generalconditions for starting a new business (e.g. access to external funds).

The dependent variable start-up probability covers estimates of the probability oflaunching actual business operations among founders who are still in the start-upprocess (but have not yet launched business operations).

2.1.4 Study 4. From business ideas to business success: an empirical analysis of development in

Austrian business start-ups (Frank et al. 2002)

This study analyses the realization of start-up decisions and business success aftera period of just over 3 years, as a follow-up investigation for Study 3. Of the 1169respondents in Study 3, 932 subjects gave their addresses. These respondents werecontacted in the follow-up phase and 757 of them responded. The number of caseswhich were included in our data analysis is only marginally lower (746); the differencecan be attributed to incomplete questionnaires. Owing to the study’s longitudinaldesign, it was possible to make causal statements on the relative value of personalcharacteristics and personality traits in start-up realization and business success usinga comprehensive, configuration theory-based approach.

The configuration dimensions from Study 3 were also used in this study. In thecase of new business founders, the dependent variable was start-up success, which isdefined as the realization of start-up plans (launch of business operations) in theprevious 3 years. In the case of entrepreneurs, defined here as the group of people wholaunched new businesses approximately 3 years earlier, the dependent variable wasthe continued existence of the business after 3 years (a weak success criterion). In thiscontext, another dependent variable – which is broadly acknowledged in the relevantliterature (Frank and Korunka 1996, Moser and Schuler 1999) – is growth in thenumber of employees over the observation period (a strong success criterion).

Figure 1 shows the time frame covered by the four studies with regard toentrepreneurial spirit as well as their relationships to the central hypothesis of thisstudy.

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2.2 Instruments

In Studies 1 to 3, a questionnaire was developed in several steps for each study: on thebasis of comprehensive research in the relevant literature and expert interviews, thedimensions to be covered by the configuration fields of ‘personality,’ ‘environment/resources’ and ‘process’ were defined. In the field of personality, previously publishedscales with satisfactory statistical values were used (table 1). In the individualdimensions of the ‘environment’ and ‘resources’ field as well as the ‘process’ field,scales and indices were developed and then tested and modified in preliminary studies.For statistical evaluations, tested scales and indices were available which (at least) didnot show strong deviations from normal distributions and which yielded satisfactorystatistical values. For a more detailed description of the development of theseinstruments, please refer to the published studies themselves. The predictors used inStudy 4 were the corresponding dimensions from the questionnaire in Study 3.

Table 1 summarizes the most important indicative values in the scales and indicesused in this comparative analysis. All of the dimensions have been transformed to auniform scale of 0 to 100.

3. Findings

In accordance with the objective of this paper, only those analysis steps in each studywhich were required for comparison purposes and for the assessment of the hypothesisare described. For this purpose, regression analyses were calculated separately for eachof the four studies. The dependent variables were the dimensions relevant to eachstudy (start-up intentions, start-up probability, start-up success, business success).

Main hypotheses: Decrease of importance of ‘Personality’

Time/age

15 20

Development of

‘Entrepreneuria

l Spirit

Internal and External Selection Processes

Study 1:Schools

Potential number of‘Entrepreneurial Persons’ ‘Potential number of

start-ups’

Study 2:Students

Study 3:Start-up process

Study 4:Start-up success

Figure 1. The four studies in relation to the development of Entrepreneurial Spirit

and the main hypothesis.

PERSONALITY FACTORS AND START-UP INTENTIONS 235

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Table

1.

Variablesin

regressionanalyses,indicativestatisticalvalues1.

Study

Dependent

variable(Source/

nitems,consistency)

Predictorsforthe‘person-

ality’configuration

field

(Source/nitems,

consistency)

Predictorsforthe‘environ-

ment/resources’configuration

field

(Source/nitems,

consistency)

Predictorsforthe‘process’

configuration

field

(Source/n

items,consistency)

n

(1)Start-up

intentions

among

18-year-olds

Integrated:Personal

Entrepreneurial

orientation

(Enterprise,AIST),

Start-upinclination

(2,Index),Start-up

suitability

(8,�¼0.80)

(20Item

s,�¼0.83,NV)

Needforachievem

ent

(F-D

UPTeens)

Internallocusof

control(F-D

UP

Teens)

Innovativeorientation*

(F-D

UPTeens)

Entrepreneurs

inthe

surroundings

(5,Index)

Use

oftechnology

(7,�¼0.74)

Supportiveupbringing

(6,�¼0.78)

Activefunctions/network

(14,Index)

Entrepreneurialorienta-

tionoftheschool

(7,�¼0.74)

Instruction:

Independence/critical

thought(7,�¼0.74)

Methods:Startups

(8,�¼0.76)

Methods:Teamwork

(4,�¼0.71)

Phase

2only

(n¼417)

(2)Start-up

intentions

among

university-

level

students

Integrated:Personal

Entrepreneurial

orientation

(Enterprise,AIST),

Startupinclination

(2,Index),Start-up

suitability

(5,�¼0.68)

(17Item

s,�¼0.78,NV)

Needforachievem

ent

(F-D

UP)

Internallocusofcontrol

(F-D

UP)

Riskpropensity

(F-D

UP)

Entrepreneurs

inthe

surroundings

(5,Index)

Encouragingprof.con-

tacts(4,Index)

Socialindependence

(6,Index)

Activefunctions/network

(8,Index)

Entrepreneurialorienta-

tionofeducation

(4,�¼0.75)

Instruction:

Independence/critical

thought(7,�¼0.73)

Methods:Start-ups

(4,�¼0.70)

Methods:Teamwork

(7,�¼0.66)

n¼777

236 HERMANN FRANK ET AL.

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(3)Start-up

probability

among

founders

Start-upprobability

(2,Index)

(Intervalscale,right-

shifteddistribution)

Needforachievem

ent

(Modick1977)

Internallocusofcontrol

(Krampen

1991)

Riskpropensity

(Frese

1998)

Role

models(5,Index),

Familyrestrictions

(6,Index),Push

motive(2,Index),

Support

inthepre-

parationphase

(21,Index),

Network

significance

(11,Index)

Financialsituation

(2,Index),Human

capital(23,Index)

Organizationaleff

ort

(14,Index)

Use

ofinform

ation

(17,Index)

Failure

considerations

(individualitem

)Start-updiffi

culties

(12,Index)

n¼314

(4a)Start-up

success

Founded:yes/no(nom-

inalscale)

Asin

3Asin

3Asin

3n¼290

159¼yes

(4b)Business

success–

existence

Existence:yes/no(nom-

inalscale)

Asin

3Asin

3Asin

3n¼456

396¼yes

(4c)

Business

success–

growth

Staffgrowth

(nominal

scale)

Asin

3Asin

3Asin

3n¼456

80¼yes

1Sources:(A

IST

(BergmannandEder

1999);

F-D

UP(Fragebogen-D

iagnostik

zurErfassungunternehmerischer

Potentiale¼InstrumentforEvaluationofentrepreneurial

potentials,Muller

2001);F-D

UPTeens(W

urthandKlein

2001);Index

....Totalscore

bycontentcriteria).

*Because

F-D

UPTeensdoes

notincluderisk

propensity,the‘InnovativeOrientation’Scale

–whichisnottoodissimilarin

concept–wasusedhere.

PERSONALITY FACTORS AND START-UP INTENTIONS 237

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In a step-by-step procedure, the predictor groups ‘personality’, ‘environment/resources’ and ‘process’ (in that sequence) were included en bloc in the analyses.Before the analyses were performed, the linear model was checked for potentialviolations.

3.1 Study 1. Start-up intentions among secondary school students

The sample consisted of 875 students from 14 schools located throughout Austria(6 general secondary schools, 4 commercial academies, 4 technical and vocationalsecondary schools). The survey was carried out during classes in the presence of aninstructor and a member of the research team. Participation in the survey wasvoluntary, and no pupils at all refused to fill out the questionnaire. At each of theschools, students in the 9th/10th and 12th/13th year were questioned.The questionnaires were filled out during class, and participation was anonymous.The schools themselves were selected with a view to maximizing distribution(especially with regard to start-up orientation, e.g. commercial academies areexpected to generate a higher start-up orientation of their students than generalsecondary schools).

In the ensuing analyses, only students in their final year were selected, as it couldbe assumed that they had already begun thinking about their future careers. Of the426 students in these graduating classes, we were able to include 417 fully completedquestionnaires in our analysis. The sample is almost equally distributed in terms ofgender (percentage of women: 49.3%).

Only a small group (5%) of students – with relatively large differences among theschools and school types – indicated that they were very likely to be self-employed.The three F-DUP Teens scales yielded the following values (maximum: 100): Need forachievement: x¼ 35.1, SD¼ 22.9; Internal locus of control: x¼ 55.4, SD¼ 21.8;Innovative orientation: x¼ 55.1, SD¼ 14.9. Table 2 summarizes the main results

Table 2. Main results of regression analysis; Study 1.

Analysis step (block)

Multiples R2

(Increase, total)

Significance

(in relation to R2 change)

Significant individual

predictors (beta) (p<0.05)

(1) Personality 0.197 0.000 Need for achievement (0.14)Innovative orientation (0.38)

(2) Environment/resources

0.140 (0.338) 0.000 Need for achievement (0.09)Innovative orientation (0.29)Entrepreneurs in the surroundings (0.13)Use of technology (0.22)Active functions/network (0.21)

(3) Process 0.054 (0.391) 0.000 Need for achievement (0.09)Innovative orientation (0.28)Entrepreneurs in the surroundings (0.14)Use of technology (0.20)Active functions/network (0.21)Entrepreneurial orientation of school (0.18)

Dependent variable: Start-up intentions (Entrepreneurial orientation, Start-up inclination, Start-upsuitability); x¼ 54.3, SD¼ 17.0; Normal distribution.

n¼ 417; Durbin–Watson¼ 1.71.

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of our step-by-step regression analysis (dependent variable: start-up intentions;predictors: personality, environment/resources and process dimensions).

One essential component in the variance of the dependent variable (R2¼ 0.20)

is explained by personality dimensions (need for achievement and innovativeorientation). The environment and resources dimensions make a somewhat smallercontribution to variance, with the strong use of technology, role models(entrepreneurs in the respondents’ surroundings) and an actively used networkappearing to play an especially significant role. In the ‘process’ configuration field,only the (perceived) entrepreneurial orientation of the school played a significantrole in start-up intentions

3.2 Study 2. Start-up intentions among university-level students

In this study, the sample consisted of 837 students at universities (at least in theirthird year) and specialized colleges (at least in their fourth semester). The surveywas carried out during university classes, and the rate of return was almost 100%among the students present. Incomplete questionnaires were excluded from thedata analysis. Due attention was paid to a broad distribution of students’ majors(psychology, sociology, computer science, business administration, forestry,technical/natural-science and technical/economic majors) and locations (9 uni-versities and 6 specialized colleges). The questionnaires were presented in seminarsat universities and during classes at specialized colleges. Participation wasvoluntary and anonymous. The respondents were predominantly between theages of 21 and 30 years old (universities: x¼ 25.2; specialized colleges: x¼ 24.0);the proportion of female students was 41.3%, with the individual subjects showinggender distributions as anticipated. We were able to use a total of 832 fullycompleted questionnaires in our statistical analyses.

The students’ estimates of the probability that they would be self-employed in theirlater careers were between 30% and 35% in the technical majors, depending on thetype of education and location, while this figure was between 45% and 60% amongbusiness and economics majors and significantly lower in the social sciences. The threeF-DUP scales yielded the following values (maximum: 100): Need for achievement:x¼ 64.7, SD¼ 23.1; Internal locus of control: x¼ 51.4, SD¼ 23.5; Risk propensity:x¼ 63.8, SD¼ 21.7. Table 3 gives an overview of the main results of our step-by-stepregression analysis (dependent variable: start-up intentions; predictors: personality,environment/resources and process dimensions).

In comparison to Study 1, the explanatory value of personality dimensions forstart-up intentions is somewhat lower, and all three individual dimensions make asignificant contribution. Likewise, the explanatory value of the ‘environment/resources’ dimensions also diminished slightly in this study, with role models(entrepreneurs in the subjects’ surroundings) and the social network as well as theextent of experienced independence again making a significant contribution. In thisstudy, the education process was again only responsible for a relatively slight portionof variance; the perceived entrepreneurial orientation of the educational institutionand the extent of team-based instruction methods also made a significant contribution(analogous to the previous study).

PERSONALITY FACTORS AND START-UP INTENTIONS 239

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3.3 Study 3. Start-up probability of potential business founders

The sample in this study consisted of 1169 people at various stages of the start-upprocess, from the first concrete start-up activities (founders) to the post-start-up phase(entrepreneurs). These stages incorporate various possibilities and restrictions withregard to continuing or aborting the start-up process, similar to Ronstadt’s ‘corridorprinciple’ (Ronstadt 1988).

A total of 5983 respondents were contacted through start-up assistanceorganizations (advice centres), financial support institutions and at relevant events(business start-up fairs). Questionnaires were filled out in person or returned by mail.Participation in the study was voluntary and anonymous; however, due to theintended longitudinal design of the study (Study 4), the respondents were asked togive their names and addresses on a voluntary basis (approximately 80% did so;see Study 4).

In the ensuing evaluations, only those 341 people were included who were in aphase of the start-up process (founders: from initial start-up activities to shortly beforethe launch of business operations). The statistical evaluations are based on 314complete data sets. The range of planned start ups covers a wide variety of businessenterprises, trades/crafts and commercial businesses. The majority of businesses werenew start-ups (90%). The age of the business founders was between 18 and 61 years(x¼ 34.9, SD¼ 8.0), the percentage of women totalled 30%. In its essential indicativevalues (industry distribution, start-up size, age of founder, gender of founder,education), the sample can be considered representative of the Austrian start-uplandscape (Frank et al. 1999a,b).

The three personality dimensions yielded the following results: Need forachievement (maximum: 100): x¼ 79.4, SD¼ 9.3; Internal locus of control:x¼ 81.2, SD¼ 9.4; Risk propensity: x¼ 55.1, SD¼ 12.2. Table 4 summarizes the

Table 3. Main results of regression analysis; Study 2.

Analysis step (block)

Multiples R2

(Increase, total)

Significance

(in relation to R2 change)

Significant individual

predictors (beta) (p<0.05)

(1) Personality 0.131 0.000 Need for achievement (0.21)Internal locus of control (0.12)Risk propensity (0.20)

(2) Environment/resources

0.115 (0.247) 0.000 Need for achievement (0.18)Internal locus of control (0.12)Risk propensity (0.15)Entrepreneurs in the surroundings (0.21)Social independence (0.15)Active functions/network (0.16)

(3) Process 0.057 (0.303) 0.000 Need for achievement (0.20)Internal locus of control (0.10)Risk propensity (0.14)Entrepreneurs in the surroundings (0.18)Social independence (0.14)Active functions/network (0.14)Innovative orientation of education (0.20)Team-based instruction methods (0.12)

Dependent variable: Integrated dependent variable (Entrepreneurial orientation, Start-up inclination,Start-up suitability); x¼ 52.1, SD¼ 15.5; Normal distribution.

n¼ 832; Durbin–Watson¼ 1.76.

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results of our step-by-step regression analysis (dependent variable: start-upprobability, the subjective probability of launching the planned business in the nearfuture).

Only a small portion of variance in start-up probability (5.6%) can be attributedto personality dimensions, and only risk propensity reached statistical significance asan individual predictor. Likewise, the configuration dimensions of the environment/resources field have only little explanatory value; the ‘support in the preparationphase’ dimension was the only one to reach statistical significance. The contributionof the ‘process’ configuration dimension was similar in size to Studies 1 and 2, thesignificant individual dimensions being failure considerations and the use ofinformation. Therefore, those founders in the start-up process who have a higherpropensity for risk and a lower inclination to think about failure, and who feelthat they receive adequate support in the preparation phase and use availableinformation as much as possible showed a higher subjective probability of realizingtheir start-up plans.

3.4 Study 4. Longitudinal start-up success and business success

Some 80% of the 1169 respondents to Study 3 gave their names and addressesvoluntarily. A high percentage of these respondents were interested in a summary ofthe results of the study. Those not giving their names and addresses may have not beeninterested in the results or in a future study of the research team. After 3 years, we wereable to contact just over 80% of those respondents by telephone in order to questionthem about start-up realization and business success. Those respondents who couldnot be contacted may have changed their location or their names (marriage), etc.The analyses of Study 4 are based on a data set of 754 cases, which likewisedemonstrated a representative distribution in its indicative values.

In the first step, the predictors of start-up success were analysed. For this purpose,we used the sub-sample of respondents who were in the start-up process or who hadat least started and then temporarily interrupted the start-up process in the previousstudy (Study 3). The data set thus covered a total of 290 respondents, 159 of whomhad launched their businesses (however, 15 of those 159 had failed in the meantime).That means that approximately 55% of the start-up phase respondents in Study 3’srepresentative sample had launched business operations after 3 years. If a realistic

Table 4. Main results of regression analysis; Study 3.

Analysis step (block)

Multiples R2

(Increase, total)

Significance

(in relation to R2 change)

Significant individual

predictors (beta) (p<0.05)

(1) Personality 0.056 0.000 Risk propensity (0.19)(2) Environment/

resources0.054 (0.110) 0.012 Risk propensity (0.18)

Support in the preparation phase (0.17)(3) Process 0.052 (0.162) 0.001 Risk propensity (0.17)

Use of information (0.16)Failure considerations (�0.15)

Dependent variable: Start-up probability; x¼ 77.8, SD¼ 24.0; right-shifted distribution.n¼ 314; Durbin–Watson¼ 2.00.

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estimate of start-up success among those respondents who could not be reached – andthe fact that 15 of them had failed in the meantime – is taken into account, this yieldsan estimated percentage of 40% after 3 years. With regard to the distribution of ageand gender, the sub-sample was similar to the sample in Study 3 in its essentialindicative values.

In the three personality dimensions, the sub-sample yielded the following valuesfor the respondents who demonstrated start-up success (¼Start-up realized): need forachievement (maximum: 100): x¼ 80.1, SD¼ 9.5; Internal locus of control: x¼ 80.5,SD¼ 9.8; Risk propensity: x¼ 54.9, SD¼ 10.9.

Table 5 summarizes the results of our regression analysis for start-up success.The dependent variable here was a nominal variable (start-up realization: yes/no),and the configuration dimensions from Study 3 were used as predictors.

The variance in the dependent variable which can be explained by means of theconfiguration dimensions decreased substantially. This was to be expected because thisstudy differed from the previous studies in that it was longitudinal, while the otherswere cross-section analyses and used an objective dependent variable (start-uprealization: yes/no). As this longitudinal study only measured the nominal change andnot the dimensions themselves, the reduction in explained variance is to be expected.

In the ‘personality’ configuration field, risk propensity remained a significantpredictor, and the field of ‘environment/resources’ did not show a higher explanatorycontribution. This implies that willingness to take risks plays a significant role in start-up realization. However, this risk propensity may have to be differentiated from therisk propensity of entrepreneurs who have already completed their start-up processes.The contribution of the ‘process’ field was approximately equal to that of Study 3.Therefore, it can be noted that start-up success (start-up realization) becomessomewhat more probable along with a higher propensity for risk and comprehensivepreparations in the start-up phase (increased organizational effort and use ofinformation). The higher risk propensity might also be attributed to learning effectswhich most probably arise in the course of the start-up process and which increase theability and willingness of the founder to handle risky situations. Owing to thelongitudinal design of the study, we can assume a causal relationship in this context.

In the next step, the predictors of business success were analysed. First, theexistence of the business after 3 years was analysed as a ‘soft’ criterion for success(survival rate). The sample consisted of 456 respondents who were already ‘newentrepreneurs’ at the time of Study 3 and could be contacted and questioned inStudy 4. Of those 456 respondents, 60 (13.2%) had failed in the meantime.

Table 5. Main results of regression analysis; Study 4 – Dependent variableStart-up success.

Analysis step (block)

Multiples R2

(Increase, total)

Significance

(in relation to R2 change)

Significant individual

predictors (beta) (p<0.05)

(1) Personality 0.037 0.012 Risk propensity (0.17)(2) Environment/resources 0.013 (0.051) 0.792 Risk propensity (0.16)(3) Process 0.043 (0.093) 0.013 Risk propensity (0.15)

Organizational effort (0.15)Use of information (0.17)

Dependent variable: Start-up success (start-up realized after 3 years: yes/no).n¼ 290 founders at time t1 (t2: no: 131/yes: 159); Durbin–Watson¼ 2.04.

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The survival rate after at least 3 years is thus 86.8%. When a realistic estimate of thesurvival rate among respondents who could not be reached in this study is taken intoaccount, this figure is reduced to 71% (this number is based on the consideration thatthe group of new entrepreneurs who could not be reached shows relatively highsimilarity in configuration analysis to the group of failed entrepreneurs. Based on theassumption that approximately 80% of the new entrepreneurs who could not bereached had already failed and that the other portion can be attributed to locationchanges, name changes, etc., the resulting survival rate is approximately 71%). Thisvalue corresponds to more recent (and comparable) studies in German-speakingcountries (Frank and Wanzenbock 1994, Bruderl et al. 1996, Wanzenbock 1996). Acomparatively lower survival rate was found in commercial businesses, and there wereno significant age or gender effects.

In the three personality dimensions, the following values resulted for the sub-sample of respondents who demonstrated business success (existence of the businessafter at least 3 years; maximum: 100): Need for achievement: x¼ 80.9, SD¼ 10.1;Internal locus of control: x¼ 80.6, SD¼ 9.1; Risk propensity: x¼ 56.2, SD¼ 11.6.

Table 6 gives an overview of our regression analysis for business success. Thedependent variable here was likewise a nominal variable (existence of the business:yes/no), with the configuration dimensions from Study 3 serving as predictors.

Again, the configuration dimensions’ contribution to explained variance in thedependent variable has decreased markedly. In the ‘personality’ configuration field,risk propensity remained a significant predictor, this time as a negative value.The ‘environment/resources’ configuration field allows an explanation of approxi-mately 5% of variance in the dependent variable, with resources contributingsignificantly to the explanation. The process dimension does not make a significantcontribution to explaining business success.

The survival of a company can thus only be predicted to a minimal extent by theconfiguration dimensions used. In this context, the significant individual predictorscan also be viewed as causal due to the longitudinal design of the study. The survivalof the company becomes somewhat more probable when risk propensity is slightlylower, a solid financial basis is provided and the availability of support is perceivedin the preparation phase. Only the negative value for the ‘human capital’ dimension is

Table 6. Main results of regression analysis; Study 4 – Dependent variable:Business success (Existence).

Analysis step (block)

Multiples R2

(Increase, total)

Significance

(in relation to R2 change)

Significant individual

predictors (beta) (p<0.05)

(1) Personality 0.023 0.014 Risk propensity (�0.14)(2) Environment/

resources0.054 (0.078) 0.001 Risk propensity (�0.12)

Human capital (�0.12)Financial situation (0.12)Support in the preparation phase (0.10)

(3) Process 0.005 (0.082) 0.699 Risk propensity (�0.11)Human capital (�0.12)Financial situation (0.10)

Dependent variable: Business success (Existence after 3 years: yes/no).n¼ 456 Entrepreneurs at time t1 (t 2: no: 60/yes: 396); Durbin–Watson¼ 2.04.

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unexpected in this context: a detailed analysis showed that the survival rate amongrespondents with academic degrees was responsible for this value (Frank et al. 2002).

In the final step, a ‘strong’ success criterion – growth in the number of employees –was used to analyse business success. In this context, businesses were defined assuccessful – in light of their effects on employment in society – if their staff had grownby more than 5 employees (or more than doubled) in the previous 3 years. Some 80 ofthe 456 businesses fulfilled this success criterion. The portion of businesses significantlydecreased for this criterion. A significant gender effect was also observed, althoughyoung female entrepreneurs (under 30 years) were represented in the sub-sample ofthe 80 very successful companies with a significantly higher frequency.

In the three personality dimensions, the following values resulted for the sub-sample of 80 respondents who had demonstrated business success (in the form ofsubstantial growth). Need for achievement (maximum: 100): x¼ 82.0, SD¼ 9.7;Internal locus of control: x¼ 81.8, SD¼ 9.0; Risk propensity: x¼ 56.9, SD¼ 13.2.

Table 7 summarizes the results of our regression analysis of business success(defined as substantial growth). Again, the dependent variable is a nominal variable(growth in the number of employees: yes/no), and the configuration dimensions fromStudy 3 were used as predictors.

The overall proportion of explained variance in the dependent variable was againreduced, and personality dimensions did not make a significant contribution. The‘environment/resources’ configuration fields again explained approximately 5% ofvariance, with an additional 2% contributed by the ‘process’ dimension. Therefore,those entrepreneurs who founded their businesses less out of necessity (push factors)than others, who had built a solid network around them and who themselves realizedthe start-up process carefully showed a slightly higher probability of substantial success.

3.5 Comparison of the four studies

In our comparison of the four studies presented, we assumed a certain degree ofcomparability. This is ensured by the use of identical configuration fields (personality,environment/resources, process) and the identical use of dimensions in the individualconfiguration fields. Start-up intentions as well as start-up success can be used as areference group, as these groups represent the starting and end points of thedevelopment sequence analysed.

Table 7. Main results of regression analysis; Study 4: Dependent variable –business success (strong growth).

Analysis step (block)

Multiples R2

(Increase, total)

Significance

(in relation to R2 change)

Significant individual

predictors (beta) (p<0.05)

(1) Personality 0.005 0.498 –(2) Environment/resources 0.051 (0.056) 0.001 Push factor (�0.13)

Network significance (0.12)(3) Process 0.022 (0.078) 0.035 Push factor (�0.13)

Network significance (0.11)Organizational effort (0.15)

Dependent variable: Business success (Existence after 3 years and staff growth (doubled or by more than5 employees): yes/no).

n¼ 456 Entrepreneurs at time t1 (t 2: no: 376/ yes: 80); Durbin–Watson¼ 2.08.

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A comparison of the results of the analogous regression analyses in the four studiesenables an estimate of the personality traits’ explanatory value in all stages of theprocess analysed, from start-up intentions to business success (figure 2).

In this context, the substantial decrease in the explanatory value of the threepersonality dimensions can be seen quite clearly over the entire course of start-up/newbusiness development from initial start-up intentions to business success. Theexplanatory value of the ‘environment/resources’ and ‘process’ fields likewise decreasesmarkedly, at least in the initial stages leading up to start-up realization. These fieldsthen show an increase in explanatory value for business success. In relation to theexplanatory value of personality, the configuration fields of ‘environment/resources’and ‘process’ increase markedly over the course of start-up/new business development.

4. Discussion

4.1 Main findings

In this paper, we have been able to use a comparison of four conceptually similarstudies on new business start-ups to show that the significance of personality traitsamong (potential) business founders decreases in the course of start-up/new businessdevelopment – from initial start-up intentions, to the start-up process and realization,and on to business success (existence/growth). While up to 20% of the variance in theorigins of entrepreneurial intentions can be explained by personality traits, thisproportion practically drops to zero in explaining business success. The studies, whichwere based on configuration approach, also enable us to assess the value of personalityin relation to other configuration fields.

PersonalityEnvironment/resources/process

Intentions

Intentions

Start-up probability

Start-up success

Existence

Growth

0

5

10

15

20

Explained variancefor the target value

Study 1 Study 2 Study 3 Study 4

Figure 2. Proportion of explained variance from start-up intentions to

business growth.

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4.2 Methodological considerations

Let us first turn to a number of methodological considerations: in effect, thecomparison of the four studies constitutes a cross-sectional study, thus one cannotclaim causality (in the narrow sense) in these findings. However, a high level ofmeaningfulness is ensured by the fact that the four studies at least generally fulfill therequirements of representative samples: in the two studies at educational institutions,due attention was paid to maintaining a high degree of heterogeneity among theinstitutions, and within the institutions the questionnaires were filled out by allstudents in a particular class or all students in a particular degree course or universityclass. This means that the results are representative with regard to educationalinstitutions, whereas a bias in relation to the structure of the Austrian start-uplandscape can be assumed especially in Study 2, as (for example) university studentswill generally not start-up businesses in skilled trades.

The composition of the sample in Studies 3 and 4 corresponds to that of theAustrian start-up landscape – defined as the structure of realized start-ups in termsof industries and sections in the Austrian Chamber of Commerce classification – in itsessential indicative figures, while start-up behaviour does not correspond to thecurrent structure of existing companies. For example, high growth rates were recordedin information technology and consulting (Frank et al. 1999a).

The respondents’ assessments of the ‘environment/resources’ and ‘process’configuration fields were surveyed in a manner analogous to that used for thepersonality dimensions. The dependent variables in Studies 1 to 3 were also based onrespondents’ estimates. Therefore, it is not entirely possible to rule out overestimatesof these dimensions due to a common artificial variance (response styles, etc.), but theeffects of such an error were kept to a minimum by wording the questions asobjectively as possible in the ‘environment/resources’ and ‘process’ fields as well as thedependent variables. Study 4’s dependent variables are objective facts analysed aftera period of 3 years. In this case, we can rather assume that the ‘true’ relationshipswere underestimated (Frese 1985). However, in light of the degree to which theserelationships changed over the period (figure 1), we can assume that the fundamentaldevelopment – a decrease in the importance of personality over time – remains valideven when the aforementioned distortions are taken into account. Verification of thispaper’s main thesis by means of a truly longitudinal study would be unrealistic due tothe long observation periods it would require.

Recently it has been acknowledged with increasing clarity that the roots of anentrepreneurial career can be attributed to early phases of a person’s socialization(Schmitt-Rodermund and Silbereisen 1999). The two studies carried out ateducational institutions are thus particularly topical in start-up research, althoughthe comparison of school pupils and university students with entrepreneurs might besubject to certain limitations due to the different worlds in which they operate(Robinson et al. 1991). On the basis of the corresponding findings of those two studies,start-up intentions appear to be generated by multiple causes and influenced bypersonality aspects as well as role models and networking experience. It is thus possibleto access entrepreneurial potential through educational institutions. The dataconfirms that the entrepreneurial orientation of the educational institution likewisehas a favourable effect on the development of start-up intentions, although the extentof this effect is markedly lower than those of personality, environment and resources.An improvement in the positive effects of the educational environment on the

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development of start-up intentions would be possible by means of the role modelsconveyed in education as well as activating instruction methods that promotenetworking, for example. These possibilities are conceivable in both secondary schoolsand universities/specialized colleges.

Initial start-up intentions do not constitute a decision to begin the start-up process.In effect, such intentions are attitudes closely related to personality. If we postulateat least a certain degree of mutability in the personality dimensions examined in thispaper, the role of education would primarily be one of encouraging and developingsuch personal traits.

Study 3 investigates the predictors of start-up probability among people who arealready in the process of starting a new business, which lasts at least several months(usually even longer). Personality traits only seem to have a slight influence on thisprocess; an increased propensity for risk, however, seems to accelerate the process.The relative values of the environment, resources and process configuration fields gainsignificance in this context. In particular, those dimensions which point to soundpreparation of the start-up appear to increase the probability of start-up realization.

A comparison of the absolute manifestations of these personality dimensions acrossthe studies is only possible to a certain extent, as it was necessary to adapt theirimplementation in the questionnaires due to the differing target groups, which couldreduce comparability to a certain extent. However, the markedly higher values –especially in the need for achievement and internal locus of control – in connectionwith a markedly lower distribution in Studies 3 and 4 suggests that highly effectiveself-selection and external selection processes influence the actual entry into the start-up process. The implementation of a business idea in a start-up process seems to befavoured by a specific personality disposition associated with stronger characteristics inthe dimensions relevant to starting a new business (self-selection). At the same time,strong external selection processes through the various stakeholders in the start-upprocess (advising, financing, incentives, etc.) can also be observed in this context: atthe very least, implicit personality assessments play a substantial role in the decisionsmade by these stakeholders.

The results of Study 4 are the most meaningful because it involved trulylongitudinal observation over 3 years, a period of time which is considered to beextremely relevant in start-up processes. This is because the phenomenon of theliability of newness or liability of adolescence roughly covers this period, in which therisk of failure is highest, thus the period attracts greater research interest (Bruderl andSchußler 1990) and because its dependent variables could be defined in objectiveterms. In this way, it is not surprising that the explained variance in the dependentvariables again decreased markedly in this study. At the same time, a pattern can berecognized: in effect, the meaning of personality traits can practically not be verifiedfor the true success criteria in new businesses (growth), while the ‘environment/resources’ and ‘process’ configuration fields gain in significance for business successin relation to personality (although their contribution to explaining variance alsodecreases).

The existence of a company after at least 3 years is a widely acknowledged successcriterion (Moser and Schuler 1999). Our findings show that it is hardly possible topredict the survival of a new business on the basis of entrepreneur estimates in theearliest stages of the business. For risk propensity, a comparison of the two sub-studiesyields a differentiated picture: a comparatively higher risk propensity is advantageousin the realization of start-up decisions, while the opposite can be observed for the

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continued existence of the business. This agrees with generally accepted indicationsthat entrepreneurs ideally have a medium propensity for risk (Rauch and Frese 2000).The risk appetite which is required to make the ‘jump’ into self-employment can thuseven prove harmful in later stages. Additional indications of a business’s chances ofsurvival can mainly be derived from the entrepreneur’s resource situation.

The personality traits of an entrepreneur have no significant bearing oneconomically relevant business success, which is defined as substantial growth in thenumber of employees in a business; this does not agree with McClelland’s findings butis basically confirmed by more recent meta-analyses which investigate this idea andonly find very weak connections (Rauch and Frese 2000). On the basis of the dataavailable, fast-growing businesses would appear to be those which are not founded outof necessity (i.e. not due to a push factor), rather those which are distinguished bycareful organization in the start-up process and in which the founder succeeds increating and maintaining sound networks ( Johannisson 1988).

4.3 Conclusions

Overall, the data from the four studies confirms that a meaningful assessment of thevalue of personality traits is only possible in conjunction with additional influencingfactors in the founder’s environment, resources and processes (Gartner 1985). Fromthe standpoint of action theory, actions can be regarded as mediators betweenpersonality traits and the objectives intended or achieved. In an interactionistinterpretation, actions can be predicted completely when both personality andsituational influences are completely known (Funder 2001). The ability to predictbusiness success is thus contradicted above all by the strong situational dynamics of theoverall development process, from the beginning of the start-up process to the initialstage of business development, the latter being subject to the additional influences ofcustomer and competitor behaviour.

Therefore, the early diagnosis of a start-up’s potential success by means ofpersonality assessment – which is desired by many stakeholders in the process – isuntenable on the basis of these findings. Such diagnoses should be replaced by (timely)measures in the field of secondary education which encourage the development ofautonomous and self-determined personalities and thus encourage students to pursuetheir career ideas more actively. In the future, personality-oriented start-up researchshould place more emphasis on the early development of entrepreneurial personalitiesin order to identify the determinants of emerging entrepreneurial personalities moreprecisely and thus to derive specific and substantiated measures for educationalofferings in secondary schools and universities.

Overall, these findings indicate that new businesses tend to emancipate themselvesfrom their initiators – and that the initiators lose significance (the founder occupies lessof the total psychological space of the organization (Katz and Kahn 1978) – in thecourse of the start-up process and in the early business development stage. However,this also implies that it is indeed possible to influence the potential number of peoplewilling to start new businesses on the basis of classic personality traits (amongfounders). In practice, this means that educational offerings have to be designed in sucha way that in addition to conveying knowledge of the start-up process they especiallyencourage the personality traits analysed in this paper, as these traits can be regardedas essential factors influencing the development and realization of start-up ideas.

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In this context, we can assume a positive connection with activating and action-oriented instruction methods. Other relevant characteristics which enable educationalinstitutions to exercise influence on this process include the entrepreneurial orientationof the school, college or university and the conveyance of role models. Both influencingfactors can be brought to bear by means of synergetic co-operation with successfulowner-run businesses. In this way, the environment and process dimensions can alsoplay a stronger role. This idea is worth noting because it is more difficult to simulaterelevant and real start-up environments and processes in educational institutions,which, depending on perceptions, could lead to personality traits gaining a higherstatus. For those who have actually begun the start-up process or are running a newbusiness, perceived environmental factors then gain considerable significance andconsequently explanatory value. However, this consideration does not in any waycontradict the conclusion that in order to increase the potential number of peoplewilling to start new businesses it is necessary to encourage the personality traits relevantto new business start-ups in the education process. The stronger these personalitydimensions become, the less likely it is that external and self-selective mechanisms willtake effect and – according to these findings – reduce this potential considerably. In thiscontext, it is also necessary to take into account that the additional effect derived fromconveying knowledge of the start-up process (which makes candidates more suitable forstarting a new business in addition to the start-up idea) was not discussed in this paper.This could give rise to an additional increase in the value of personality traits in thiscontext.

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