Successful entrepreneurs

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Successful entrepreneurs can be founded all over the world. They create new ventures, innovate unique products, initiate job opportunities for the others and make changes everywhere. There is a continuous growth of entrepreneurs and entrepreneurship (Wennekers, 2006) but not everyone can be an Entrepreneur. Entrepreneurs have different personality traits also; they come from different social backgrounds ( ). Many researchers and scholars agreed that personal traits and social background have a significant role in the success of the Entrepreneur. The next topic, will clarify the influence of the personal traits and social background in the success of the Entrepreneur.

An entrepreneur can be defined as "a person who habitually creates and innovates to build something of recognised value around perceived opportunities." (Bolton & Thompson, 2007). Entrepreneurship is a subject which cannot be learned, most of the entrepreneurs were born to do business and they do not care about the accretion of money and their aim is not getting the nameplate culture (Charyl ). Entrepreneurs can be divided into: survival and opportunity entrepreneurs and every one of them has its own characteristics and thoughts Joachim Wagner(2005). Reynolds et al.(2003) Opportunity entrepreneurs are those who create new ventures in order to chase a business opportunity and they are willing to start their new ventures. While survival entrepreneurs are those who start new ventures because of unemployment or being unsatisfied with their employment and they create new ventures reluctantly in order to survive. Because of that, opportunities entrepreneurs considered to be more confidence than survival entrepreneurs Reena Bhola and Ingrid Verheul(2006). According to Rauch & Frese (2000) there are several personal traits of the entrepreneur which play an important role in his/her success. They are mostly including: need for achievement, locus of control, independence, proactiveness, innovation and risk- propensity. Entrepreneurs' actions may be affected by the relationship between entrepreneurial traits, social environment and work environment (Busenitz et al. 2000).

Entrepreneurs with high need for achievement spend their time in doing things better because they are scared of losing good opportunities (Athinson, 1958). Innovativeness of the business can be resulted from people with the need for achievement. Entrepreneurs with high need for achievement always challenge themselves and they are innovating continuously in order to grasp opportunities (McClelland, 1961). Innovating new products or services are risky because of the uncertainty of the market; however entrepreneurs with high need for achievement always deal with these circumstances efficiently ( ). If personality traits of entrepreneurs are reflected in the entrepreneurial orientation of a company, it may be possible to observe higher levels of proactiveness in these companies.

Risk propensity is identified as a major trait that distinguishes entrepreneurs from non-entrepreneurs (Ahmed,1985; Shane, 1996; Miner et al., 1989).It may positively influence innovation, especially product innovation and that needs a high level of tolerance for taking risks, because innovation benefits from a willingness to take risks. Independent risk-takers entrepreneurs generally have better psychological excellence and prepare for doing a good job with a higher risk tolerance. When entrepreneurs have the ability to influence the procedures of the company with their personal decisions, personal traits may be reflected in the actions of the company and as a result it may be more risk taking (G. T. Lumpkin, Berrin Erdogan,2004)[5].

Locus of control can be internal or external. Internal locus of control (ILC) is connected to learning, so it inspires and encourages people to high effort; While the external locus of control may reduce learning and make people harmfully work. As a result, ILC is one of the most essential traits of entrepreneurs (Rotter,1966). Previous studies on entrepreneurship explained that entrepreneurs usually scored high on ILC and entrepreneurs who can control themselves powerfully prefer some conditions under which they can control what will go on (Meyer,Walker&Litwin,1963). Entrepreneurs with ILC make strategies for the future and prefer taking risk because they consider themselves masters of their own luck, and by the continuous efforts they will succeed. Entrepreneurs with ILC take the whole responsibility of failure rather than complaining outside environment, and they have more strong sense of risk taking.( ) So, from the relationships of all of the above entrepreneurial traits, it can be clearly seen how they are related to each other strongly in resulting a successful entrepreneur.

Contemporary researchers find out five main personal traits of the entrepreneur, and they are referred to as the 'five-factor model' or the ' big five' ( ). The five factors are: extraversion, openness to experience, agreeableness, conscientiousness and emotional stability (Barrick and Mount, 1991). The big five model give a wide structure in order to measure the effects of personal traits on the success of the entrepreneur. ( )

Extraversion is an aspect of personality that includes characteristics such as sociability, outgoing, optimism, and ambition (Barrick and Mount, 1991). It is an important trait for the entrepreneur because he/she needs to spend long hours in interacting with customers, employees, and, investors and have to sell them on the worth of the business (Shane, 2003). Empirical study points out that people who achieve a high score on extraversion are more likely to become entrepreneurs than others (Shane, 2003).

Openness to experience characterises someone who is open to experiences and thoughts and who is creative, innovative and reflective (McCrae, 1987; Costa and McCrae, 1992) also, tend to be liberal and solve problems in innovative ways ( ). These characteristics are essential for entrepreneurs as they need to explore new ideas and innovate in order to develop new products (Zhao and Seibert, 2006). Experimental research confirms the positive relationship between openness to experience and the probability of being an entrepreneur (Zhao and Seibert, 2006).

Agreeableness illustrates someone who is cooperative, trusting, sympathetic, tolerant, polite and pleasant (Barrick and Mount, 1991). Agreeableness people are more likely to start businesses because people with this trait are more likely to pursue their own self-interest, drive difficult bargains, or use themselves to achieve their objectives (Zhao and Siebert, 2006). Entrepreneurs with a high agreeable level are easy to get on with and they may be widely liked ( ).

Conscientiousness is considered to be the largest of the big five personal traits that differ between entrepreneurs and non- entrepreneurs. It is linked to dependability, hard work and perseverance (Barrick and Mount, 1991). Entrepreneurs need to be high on conscientiousness since they need to be well-organised and planned to achieve their goals. Empirical research shows the positive relation between conscientiousness and the chance to be an entrepreneur (Zhao and Siebert, 2006).

People who are emotionally stable are more likely to start their own businesses than people who are anxious (Barrick and Mount, 1991) because entrepreneurs need a high tolerance to stress to cope with the hard work, considerable risks, social isolation, pressure, insecurity, and financial difficulties that come from starting their own businesses (Rauch and Freese, 2007). Several studies show that people high on emotional stability are more likely than others to establish their own business (Zhao and Seibert, 2006).

The second main dimension which affects the success of the entrepreneur is the social background