Enterprise and Small Business Principles
The entrepreneurial personality
The personality of the entrepreneur is often perceived by students and practitioners as one of the most fascinating topics in the field of entrepreneurship. The reason for this is the human tendency to attribute great performances to a person’s individual characteristics rather than to situational constraints. That is, there is a general tendency to explain the behaviour of others as a consequence of their personalities rather than as consequences of what the situation has to offer. This is often referred to as the ‘fundamental attribution error’ which suggests that it is often believed that a successful entrepreneur is the result of a special set of personal abilities and characteristics, rather than the results of either being in a favourable situation or through pure chance.
As a natural consequence of this belief, the psychological perspective in entrepreneurship research has for a long time concentrated on discovering stable individual characteristics such as personality traits. It is, as pointed out earlier, an attractive explanation and of direct practical relevance as most parties having a financial interest in entrepreneurship would like to find an easy test that could identify potential successful entrepreneurs.
As will be explained, psychology cannot offer (at the present time) such a valid test, but enterprises are made of men and women and there is a need to understand how they behave. The entrepreneur (and his ideas) often represents the only available information that various stakeholders such as venture capitalists, bankers or policy makers have available to make a decision on whether or not to grant finance to that individual or to create an infrastructure promoting entrepreneurship. In order to do that, these parties need to have information about what characterises entrepreneurial behaviour and how it can be understood.
Personality traits cannot explain more than a minor share of entrepreneurial behaviour and differences in business performance. As will be seen, these disappointing results can be explained by theoretical as well as methodological problems characterising the perspective (Carsrud and Johnson, 1989; Chell et al., 1991; Delmar, 1996; Gartner, 1988; Herron and Robinson, 1993; Sexton and Bowman, 1985). The research field of entrepreneurial behaviour has instead turned its attention towards more sophisticated models where people’s cognition and motivations are the explanatory factors behind entrepreneurial behaviour instead of personality traits (Baron, 2004; Baum and Locke, 2004; Baum et al., 1998).
