Do you agree that personal traits influence the success of entrepreneurs

1544 words (6 pages) Essay in Business

5/12/16 Business Reference this

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I strongly agree that personal traits and social background influence the success of entrepreneurs. I think entrepreneurship is not only about passion, attitude or what people would like to do but also the people themselves and how they are going to handle their businesses. The word ‘entrepreneurs’ is defines as people who “… ‘carry out’ “new combination” by such things as introducing new products or processes, identifying new export markets or sources of supply, or creating new types of organisation.” (Schumpeter, 1934, cited by Stokes, Wilson & Mador, 2010, p. 8) Thus, there are, truly, many other factors to be considered especially personal traits and social background. I believe that these elements, if not wholly or directly, help assist and support the success of entrepreneurs in some ways.

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Stokes et al. (p. 30) cites Gibb (2005, p. 37) that behaviors, attributes and skills are all concerned with entrepreneurs. Wickham (2006, p. 14) mentions an influential study of David McClelland in the early 1960s which talked about a trait identified as “‘the fundamental driving trait’ in the personality of successful entrepreneurs”. This trait is also believed to be “…sufficiently stable and enduring to predispose…” individuals who possess it “…to entrepreneurial activity.” (Stokes et al., ibid.) The trait talking about is ‘a need for achievement’ (Wickham, ibid.) or ‘a high need for achievement (Stokes et al., ibid.). Lee and Tsang (2001, p. 586) state that “high achievers have a strong desire to be successful, setting challenging goals and standards for themselves.” These people are not simply pleased with what they have accomplished; they will always seek for the ways for improvement. Therefore, it could be expected that “…this need would drive them towards a high performance.” And it “…translates in practice into the creation of new businesses.” (Stokes et al., p. 161)

Another trait which is believed to be one of the most essential for successful entrepreneurs is risk taking. There are many articles and studies regards this trait. Shane (2010) has raised the issue of the difference in willingness to bear risks. The research of the comparison between the identical and fraternal twins has shown that as much as 55% of the difference between people in their willingness to take risks is genetic. Hence, it can be said that risk taking is personal. Entrepreneurs can be overconfident or underassess risk depending on the level of risk perceived by them. They will mostly take action only when they are certain that it is worth taking the risk or, in other word, that risk is acceptable or make sense for them. (Stokes et al., p.161; Wickham, p. 107) This trait is considered a vital one for entrepreneurs because it effects how individuals respond to opportunities to innovate within an existing business or to start new companies. (Shane, 2010) This is to say that individuals who are more tolerant of risk are more likely to be successful in starting company or develop new products with different approaches as they are more comfortable taking chances; individuals who are not are vice versa.

Another stand out trait is the locus of control. It refers to the perceiving of individuals towards themselves in control of the situation. (Stokes et al., p. 161; Lee and Tsang, 2001, p. 586-567) Lee and Tsang (ibid.) points out the internal locus of control in which individuals with it will be in control over the result of the situations through the efficacy of their own behavior. There are also many studies linked an idea of the internal control over the situations in one’s life to a tendency of individuals to involve in entrepreneurial activities. (Gartner, 1985; Perry, 1990: Shapero, 1975; Shaver and Scott, 1991, cited by Lee and Tsang, ibid.) Feeling of themselves being in control allows entrepreneurs to deal with and win over situations. (Stokes et al., ibid.) With their confidence of the ability to control the situation in their lives, they are more motivated to actively seek new business opportunities instead of waiting for them to come. (Lee and Tsang, ibid.)

Besides, there are many other traits which also play important role in supporting and pushing entrepreneurs to be successful in business. For instance, self-efficacy allows individuals to believe in their capacity to do and achieve things which leads them to do things differently and to set high challenging goals and continue their commitment to them. (Stokes et al., p. 99, 162) Creative tendency is believed to be one of the central and conceptual starting points for entrepreneurs. It involves generating new ideas which allow entrepreneurs to innovate or modify a product or service, or improve a process. (Stokes et al., p.31, 162) Other less important entrepreneurial behaviors are such as negotiation capacity, strategic thinking, intuitive decision-making with limited information, opportunity-seeking, initiative-taking, assertiveness, confidence, receptive to change, eager to learn, commitment to others and so on. (Stokes et al., p. 18-19; Wickham, 2006, p. 98-99)

Apart from personal traits, social background is another crucial element that influences the success of entrepreneurs greatly. According to Wickham (2006, p. 15), social refers to “…birth order, experiences in family life, social class, religion, previous job experience, level of education, socio-economic group and parental occupation, society and culture, economic condition, etc.” Individuals who are, for instance, born in business family, born in wealthy family or high and well educated tend to have more advantage over individuals who are not in many aspects. They are a lot of entrepreneurs in the world who the social background influences their success significantly such as Lorenzo Borghese and Donald Trump. Lorenzo Borghese, the pet cosmetic entrepreneur, followed his grandmother’s footstep in family business – cosmetic for pet. He continues his family business and also created his own products using natural ingredients in the family tradition which are now nearly 100 products ranging from shampoos and treats to beds and odor removers. Donald Trump, the billionaire real estate tycoon and host of the apprentice, has joined his father’s real estate business after he received his degree in economics. Hence, he has got his father to be his mentor teaching him in every aspect of the construction industry in his early business life which he gained lots of knowledge and experiences. Although he has been through hard times in his business later one when he shifted from his father’s business, he has passed through and now owns many businesses. (Allen, n.d.)

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Moreover, without good social background such as good financial, connection with people, business cannot be started. Certainly, individuals who have a good financial support will have more opportunities to experiment in many things to find the best way to make their businesses meet a success. Therefore, it is rather important if individuals, for instance, carry a lot of fund or are well-known or know other entrepreneurs who are well-known in the business circle they are about to invest. These provide a route for them to start doing business and it is also a conduit for information. (Wickham, p. 169)

It can then be said that with a good background support, entrepreneur will have a very high opportunity and more chances to succeed than the others who do not. This is the good advantage for them so that they do not have to start business from the first step. They might follow the family foot step or guidance and be successful entrepreneurs. If individuals have relatives who work in the same or similar business field, it would facilitate them an easy entry in which they may get into that particular field without being assaulting from other entrepreneurs in the same field. Besides, they can exchange working capital, experiences, job orders, and technical information among themselves. They probably have a great start which nearly reaches half way to be a leader while those successful entrepreneurs who do not have any supporters might have been accumulating experiences and knowledge from other entrepreneurs for years till they applied them to their businesses.

There is also an issue of religion. According to Vern Terpstra (2000, p.29), most of cultures in any society background rely on religion. It provides the philosophical foundation for beliefs and values. Religion is a major element of the cultural environment and mainspring of culture. Moreover, educational structures are also a factor. High levels of technical and business skills are a major element to increase the percentage of success in starting new ventures. (Vesper, 1990; Davidsson, 1991, cited by Morris, 1998) Some low educational entrepreneurs might have a lot of experiences but lack of knowledge in business structures and layouts when compared to high educational entrepreneurs. The latter have been trained and studied on entrepreneurship so that they might perform better in term of business structures and layouts which seem more professional.

In my opinion, personal traits and social background are the main elements that drive entrepreneurs to meet a success. Entrepreneurs’ behaviors are like a gift. They are special skills and consider very powerful. Without them, it will be a lot more difficult for entrepreneurs to be successful. They might need to put more efforts and push themselves harder. Moreover, social background is like luck for entrepreneurs are born with it; they cannot choose it. If entrepreneurs do have a great background, chances of success are at hand. Therefore, it is undeniable that both personal traits and social background does take parts in entrepreneurs’ success.

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