*FIVE PERSONALITY TRAIT MODEL: ITS SIGNIFICANCE ON
ENTREPRENEUR PERSONALITY IN SELANGOR
Abdul Rahim bin Zumrah,
[email protected]
Siti Hawa R. Ehsan,
[email protected]
Norziah Othman,
[email protected]
Muna Sulaiman
[email protected]
Faculty of Management Islamic University College
Bandar Sri Putra 43000 Bangi
Selangor Darul Ehsan
Abstract
There are mushrooming in SME industry especially in Selangor state which focusing on
Bumiputra involvement with guidance and facilitated by government agencies such MARA
and Ministry Entrepreneur and Corporate Development (MECD). The sum of all these
government bodies and agencies has helped to put SME entrepreneurs in Selangor the path
of rapid industrialization, in the process creating a higher standard of living for Selangor
state.
Thus to understand better and have a clearer view about the SME Entrepreneurs, we want to
identify the personality that influence their contribution to be become an entrepreneur. The
discussion will cover about the certain personality types associated with entrepreneur based
on the primary data and research done and result from the related study. Therefore, we try to
relate this study with the Five personality Trait Model developed by L.L. Thurstone,1933.
Is there are significant between these personality with the SME entrepreneur personality in
Selangor state.
Keywords: SME Entrepreneur, Five Personality Trait Model
1.0
Introduction
Entrepreneurship is increasingly understood as one of the main sources for wealth creation
and is credited for technological invention, the rise of corporate empires and directly linked
to economic development around the world. In Malaysia, the development of
entrepreneurship has also become one of the most important economic agendas. A special
ministry for entrepreneurship which is the Ministry of Entrepreneur and Co-operative
Development (MECD) has been established to encourage people to become entrepreneurs
and to support entrepreneurial activities. Beside that, there are also private institutions such as
banks, co operations and educational institutions which support the entrepreneurial activities.
However, today in Malaysia, the effort of developing the SMEs (small medium
entrepreneurs) has been given more attention since this may contribute to reduction of
poverty. National SME Development Council has been established. The main focus of the
programs held by the council was on enhancing the capacity and capability of SMEs, in
running their businesses.
In the process of educating the potential and existing entrepreneurs and specifically the
SMEs, it is essential to recognize what are factors which encourage person to become
entrepreneurs and what are the barriers. We need to figure out whether it is sufficient to
develop the entrepreneurs just through proper training, learning new knowledge and skills
from well structured courses offered in higher learning institutions or it is only certain people
with certain types of personalities who are prone to become entrepreneurs will become
entrepreneurs after undergone proper trainings.
If we know that certain type of personality is closely associated with entrepreneurship, the
effort of developing entrepreneurs in Malaysia may start from the development of
personality. And, the education process may begin; starting from their very young age. For
instance, pre-school, primary and secondary school education should stimulate young
people’s awareness of entrepreneurship as options for their future career and help them to
develop their personality; to be more creative as well as self-confident in whatever they
undertake.
In this paper we attempted to study on whether an entrepreneur is associated with certain type
of personality. And, the outcome of this study may contribute some ideas to relevant parties
in planning strategies to encourage entrepreneurial activities in Malaysia.
2.0
Entrepreneurship and the Landscape of SMEs
An Entrepreneur is defined as a person who create a new business in the face of risk and
uncertainty for the purpose of achieving profit and growth by identifying significant
opportunities and assembling the necessary resources to capitalize on them (Zimmeerer and
Scarborough 2005). Therefore, entrepreneurship is about planning and taking calculated risks
based upon knowledge of the market, the available resources and products, and a
predetermined measure of the potential for success. Whereas generally small medium
entrepreneurs (SMEs) are categorize into two broad cotogories:
20.1 Manufacturing, manufacturing-Related services and Agro-based industries
Small and medium enterprises in the manufacturing, manufacturing related services and agrobase industries are enterprises with full time employees not exceeding 150 or with annual sale
turnover not exceeding RM 25 mil
20.2 Services, Primary Agriculture and Information & Communication
Technology (ICT)
Small and medium enterprises in the services, primary agriculture and Information &
Communication technology (ICT) sectors are enterprises with full time employees not
exceeding 50 or with annual sales turn over not exceeding RM 5 mil.
As a part of the entrepreneurship acculturation process, a lot of scheme and incentives are
offered and being developed via government body and agency in order to implement the
SMEs objective. Through the development of Natioanal SME Development Council, the
Council has implementation and achievements of Government programmes to support SMEs.
A total of 213 key programmes were implemented, involving a total expenditure of RM7.8
billion. The main focus of the programmes was on enhancing the capacity and capability of
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2.2
SMEs, particularly in the areas of entrepreneurship development, marketing and promotion,
product development and technology enhancement.
The implementation of these programmes benefited more than 287,000 SMEs. Amongst the
outcomes of these programmes are:
About 128,000 SMEs, women entrepreneurs, graduates and students received
entrepreneurship and technical training;
About 34,000 SMEs received advisory services provided by various Government
agencies;
More than 5,100 SMEs were provided with industrial and business premises;
About 780 SMEs benefited from business matching and expansion programmes
such as the Industrial Linkage Programme; and
Additionally, 272 SMEs received grants and financial assistance to improve and
upgrade their technology and business processes through the Technology Acquisition Fund,
Grant for Certification and Quality Management System, and Grant for Product and Process
Improvement.
2.1
Strong Commitment by Financial Institutions to Provide Microfinance
In term of coordination The National SME Development Council provides the strategic
framework for more focused and coordinated inter-agency efforts on SME development.
Emphasis will be aligned towards strengthening the requisite financial and non-financial
infrastructure, including skill upgrading as well as enhancing access to financing.
The development and growth of SMEs are supported and back by the various financial
institutions through The National Small and Medium Enterprise Development Council. The
Council was briefed on the initiative to promote microfinancing. Several financial institutions
have committed to provide individuals and micro enterprises with fast, flexible and
convenient access to finance to support their businesses. One banking institution launched a
new microfinance product in December 2006, while several other financial institutions will
do so in the first Quarter of 2007.
Microfinance products offered by the financial institutions will have the following key
features:
small loan size ranging from RM500 to RM50,000;
flexible loan tenure ranging from 1 month to 5 years;
fast loan approvals that range between 5 to 11 working days; and
incentives to encourage good repayment practices by borrowers.
To create awareness on microfinance, the Council agreed that a common microfinance logo
will be developed. Financial institutions which offer microfinancing will display this logo at
their branches so that the public will know which financial institutions offer microfinancing.
Recipients or borrowers of microfinancing will also be encouraged to display this logo at
their business premises to indicate that they have successfully obtained financing from
financial institutions to grow their business.
Cohesive Strategies to Increase Domestic SMEs' Entry into Global Market
The Council endorsed the strategies and marketing initiatives formulated by the SME
Marketing Committee to further increase the penetration of domestic SMEs' products and
services in the global market. Comprehensive programmes will be implemented in 2007 by
various Ministries and Agencies to assist in capacity building, promotion, information
management and provision of financial support to facilitate our SMEs to market their
products and services overseas.
The capacity building strategy focus on promoting market awareness, enhancing export
readiness and encouraging consolidated marketing efforts amongst SMEs. The promotion
strategy is aimed at exhibiting SME products and services in targeted markets, intensifying
marketing collaboration efforts and ICT-based marketing strategies, optimising inbound and
outbound trade mission activities, and branding efforts. Under the information management
strategy, the SMEinfo Portal (www.smeinfo.com.my) will be enhanced and a dedicated SME
database will be created to include features such as online business matching, and business
and products directories. Financial support to SMEs across Ministries and Agencies will be
further streamlined and customised to meet the marketing needs of SMEs.
2.3
Training Programmed and Innovation – Driven SMEs
On- going entrepreneurship programmers including advisory and outreach services will be
expanded to equip SMEs, with new and improved management and business practices and
methods in production, quality improvement, marketing, and distribution in order to raise
productivity, efficiency and profit levels. New schemes, including increased automation
business coaching as well as provision coaching as well as provision of technical skills to
assist SMEs to develop, commercialise and market innovative ideas will also be
implemented.
Another strategy will be building a platform for enterprise start-up and incubation that will
create the pool and the new and innovation – driven entrepreneurs needed to sprout new
businesses and services. Towards this end, the Government will promote the setting up of
technology incubators for the purpose of nurturing new firms and entrepreneurs as well as
expanding capacity for innovations and related services.
2.4
Establishment of the SME Business Adviser Network (SME-NET)
The Council approved the establishment of the SME-NET, a one-stop web-based directory in
the SMEinfo Portal that contains the profiles and contact details of SME business advisers in
the various Government agencies, commercial banks and development financial institutions.
Through the SME-Net, these SME business advisers will be connected and thus, aware of the
various expertise available in other agencies and financial institutions, which can be utilised
to offer comprehensive business advisory services to the SMEs. The SMEs will, therefore,
benefit from high quality and better delivery of advisory services, in the following areas:
marketing; technology and operations management; human resource; financing; business
development; and product development.
3.0
Various View on Entrepreneur Personality
No single definition of personality is accepted universally. However, one key idea is that
personality represents personal characteristics that lead to consistent patterns of behavior
including physical and mental characteristics that reflect how a person looks, thinks, acts and
fells (Hellriegel, 2004). Psychologists define personality as a dynamic concept describing the
growth and development of a person’s whole psychological system. According to Allport
(1937), personality is the dynamic organization within the individual of those psychological
systems that determine his unique adjustments to his environments.
The early work in the structure of personality revolved around attempts to identify and label
enduring characteristics that describe an individual’s behavior. When the behavior exhibited
in a large number of situations, we called it personality traits. The more consistent the
characteristic and the more frequently it occurs in divers situations, the more important that
trait is in describing the individual. Researches have long believed that these traits could help
in employee selection, matching people to jobs, and in guiding career development decisions.
For instance, if certain personality types perform better on specific jobs, management could
use personality tests to screen job candidates and improve employee job performance.
4.0
Literature Review
What makes someone an entrepreneur is a question that has intrigued many scholars and
layman for many years. Although entrepreneurs are vital to the economy, as they create
wealth and jobs, it is difficult to determine precisely what drives people to become an
entrepreneur. Is it the factors which lead to self employment is simply a socially constructed
phenomenon? Chell, in her book, tries to show that the entrepreneurial personality is, on the
one hand, socially constructed, but on the other hand, presents consistency in behaviors, skills
and competencies. While it is hard to generalize about what it takes for a person to become an
entrepreneur, certain personality traits may become one of the factors which influence or lead
certain people to become entrepreneurs.
The role of personality has received substantial attention in entrepreneurship research,
particularly over the past few decades. As researchers have questioned why some people
choose entrepreneurial careers, they have focused empirical attention on various aspects of
personality and entrepreneurial choice (Gray, 2006). The result on the empirical research on
the relationship between personality and entrepreneurship is mixed (Gartner, 1988).
Brandstatter (1996) studied the linkage between entrepenuership and personality based on 16Personality-Adjective Scales (16PA) and he concluded that the observed personality
differences are supposed to be rather the causes than the effects of entrepreneurship. Singh
(2003) explored the relationship between early developmental views on self-employment and
personality and found that views on self employment are related to personality, gender and
having self employed relative. Mark, Buchholtz, Riordan, Gatewood and Stokesn(2004)
examines the relationship of the entrepreneur's personality to long-term venture survival
based on The “Big Five” personality and found that the entrepreneur's conscientiousness was
positively related to long-term venture survival. However,they found a negative relationship
between the entrepreneur's openness and long-term venture survival. And, extraversion,
emotional stability, and agreeableness were unrelated to long-term venture survival. A set of
studies carried out by McClelland (1987), Solomon & Winslow (1988), Dunkelberg &
Cooper (1982),and Hornaday & Aboud (1971) also indicate that entrepreneurial behaviors are
significantly related to personality
However, some findings from past studies deny the significant relationship between
entrprenuership and personality (Brockhaus & Horwitz, 1986; Carsrud, Olm & Eddy, 1986).
Deamer and Earle (2004) carried out a research which consider an individuals' leanings
towards entrepreneurship. The paper suggests that looking only for entrepreneurial traits is
doomed to fail yet cannot be entirely discounted.
In Malaysia, some of the studies carried out show different results on the relationship
between entrepreneurship and personality. Othman, Ghazali, and Sung (2007) attempts to
explore the relationship of the level of education (graduate and non-graduate) with
personality, family background and company background of entrepreneurs in urban Malaysia.
The findings of the study shows that both graduate and non-graduate entrepreneurs scored
high with respect to certain entrepreneurial personality characteristic such as the Pursuit of
Excellence; moderately high on Work Ethics; moderate on Dominance, Mastery and Internal
Attributing and moderately low on Powerful Others and Chance Attributing dimensions. The
study done by Che Rose, Salleh and Kumar (2007) found a significant relationship between
venture growth and entrepreneurs with high personal initiative, focused on specific
competency areas within operations, finance, marketing and human resources. Chong Siong
Choy, Kuppusamy, and Mazuki (2005) revealed that components of Theory of Planned
Behavior, which consists of subjective norm, attitude towards behavior and perceived
behavioral control, are factors that influence entrepreneurial career. The relationship between
personality and entrepreneurial inclination among students at UUM has been tested by
Fazilah, Ruzita, Zalinah, and Nur Syakiran (2007) using questionnaires adapted from the
Five- Factor personality inventory and the Entrepreneurship Attitude Orientation (EAO)
scale. And, the analysis revealed that demographic characteristics do not have a significant
impact, but all five personality dimensions positively correlate with entrepreneurial
inclination. All these studies support that personality somehow has a close relationship with
the drive to become entreprenuer or to be successfull entrepreneur.
5.0
Five Personality Trait Model
In psychology, the Big five personality traits are five broad factors or dimensions of
personality discovered through empirical research (Goldberg, L. R. (1993). The structure of
phenotypic personality traits. American Psychologist, 48, 26-34.). The five factors are
Openness, Conscientiousness, Extraversion, Agreeableness, and Neuroticism.
Openness is refer to appreciation for art, emotion, adventure, unusual ideas,
imagination, curiosity, and variety of experience. While conscientiousness is a tendency to
show self-discipline, act dutifully, and aim for achievement; planned rather than spontaneous
behaviour. Extraversion refer to energy, positive emotions, surgency, and the tendency to
seek stimulation and the company of others. Agreeableness is a tendency to be compassionate
and cooperative rather than suspicious and antagonistic towards others. and neuroticism is a
tendency to experience unpleasant emotions easily, such as anger, anxiety, depression, or
vulnerability; sometimes called emotional instability.
In recent years, an impressive body of research supports that five basic dimensions underlie
all others and encompass most of the significant variation in human personality.
6.0
6.1
Methodology
Scope & Methodology
To accomplish this paper, the study have attempted to discover whether certain type of
personality is one of the factors which drive a person to become an entrepreneur or certain
type of personality is associated with an inclination of a person to become entrepreneur. The
study is carried out by using a questionnaire adapted from the Big Five- Factor personality
factors inventory and the questionnaires are distributed to 43 respondents in Bandar Sri Putra
Bangi. The significant of the paper compared to the above studies is that the respondents in
this study have already become entrepreneurs and we are trying to have a descriptive analysis
on every single question asked to the respondent.
Upon gathering the data, the SPSS software was used to process the raw data and generate
information for analysis.
7.0
Finding
Figure I: Personality Agreeableness
No.
1
2
3
4
5
6
7
8
9
10
Questions
I am interested in people
I feel others’ emotions
I have a soft heart
I make people feel at ease
I sympathize with others
feelings
I take time out for others
I am not interested in other
people’s problems
I am not really interested in
others
I feel little concern for others
I insult people
Frequency
Percentage (%)
Agree Disagree Agree
Disagree
41
2
95.3
4.7
40
3
93.0
7.0
34
9
79.1
20.9
39
4
90.7
9.3
42
1
97.7
2.3
Mean
score
3.51
3.30
2.95
3.09
3.23
31
6
12
37
72.1
14.0
27.9
86.0
2.88
3.23
16
27
37.2
62.8
2.77
19
3
24
40
44.2
7.0
55.8
93.0
2.67
3.77
Based on figure I, we can conclude majority of the respondents have agreeableness attitude.
Most of them are sympathize with others feelings (97.7 percent), interested in people (95.3
percent), feel others’ emotions (93 percent), do not insult people (93 percent), make people
feel at ease (90.7 percent), interested in other people’s problems (86 percent), have a soft
heart (79 percent), take time out for others (72.1percent), really interested in others (62.8
percent) and concern for others (55.8 percent).
Figure II: Personality Conscientiousness
No.
1
2
3
4
5
6
7
8
9
12
Questions
I am always prepared
I am exacting in my work
I follow schedule
I get chores done right away
I like order
I pay attention to details
I leave my belonging
arounds
I make a mess of things
I often forget to put things
back in their proper place
I shirk my duties.
Percentage
Frequency
Agree Disagree Agree
Disagree
90.7
9.3
39.0
4.0
93.1
6.9
40.0
3.0
95.4
4.6
41.0
2.0
81.4
18.6
35.0
8.0
46.0
54.0
20.0
23.0
90.7
9.3
39.0
4.0
20.9
79.1
9.0
34.0
Mean
score
3.1
3.3
3.4
3.1
2.5
3.1
3.1
14.0
18.6
86.0
81.4
6.0
8.0
37.0
35.0
3.4
3.3
2.3
97.7
1.0
42.0
1.6
Based on figure II, about 90 percent of the respondents give high score to questions related to
conscientiousness which indicate that they agree that they are the type of people who are
always prepared, exacting in their work, follow schedule and normally pay attention to
details. Furthermore, 81.4 percent of the respondents admits that they get chores done right
away. However, only 46 percent from the respondents claim that they like order. Therefore,
the finding shows that conscientiousness is a personality trait which is considered closely
related entrepreneurs’ personality. The mean scores given by respondent for almost all the
questions are 1.3 (from score scale 1 to 3). The mean score seems low due to low score given
to statement that they like order.
Figure III: Personality Extraversion
No.
1
2
3
4
5
6
7
8
9
Questions
I am the life of the party
I don’t mind being the centre
of attention
I feel comfortable around
people
I start conversations.
I talk to a lot of different
people at parties.
I am quiet around strangers.
I don’t like to draw attention
to myself.
I do not talk a lot.
I have little to say.
Percentage
Agree Disagre
e
69.8
30.2
55.8
44.2
Frequency
Agree Disagree
Mean
score
30
24
13
19
2.91
2.42
76.7
23.3
33
10
2.95
69.8
86.1
30.2
13.9
30
37
13
6
2.88
3.26
46.5
60.5
53.5
39.5
20
26
23
17
2.56
2.35
53.5
44.1
46.5
55.9
23
19
20
24
2.49
3.44
Based on figure III, there is a quite clear indication that many respondents who involve in
entrepreneurship are people who are extrovert. 86 percent of them answer that they talk to a
lot of different people at parties. 77 percent of the respondents normally feel comfortable
around people. However, only 56 percent of them do not mind being the centre of attention.
The mean score given by respondents for all questions related to extraversion is 2 which
indicate that they can be considered fairly extrovert.
Figure IV: Personality Neuroticism
No.
1
2
3
4
5
6
7
8
9
10
Questions
I am easily disturbed
I change my mood a lot
I get irritated easily
I get stressed out easily
I get upset easily
I have frequent mood swings
I often feel blue
I worry about things
I am relaxed most of the
time
I seldom feel blue
Percentage
Frequency
Disagree
Agree Disagree Agree
42.9
58.2
18
25
39.6
60.4
17
26
27.9
72.1
12
31
21.0
76.8
9
33
16.3
83.7
7
38
27.9
72.1
12
31
9.3
90.7
4
39
46.5
53.5
20
23
37.3
72.8
16
27
75.5
25.0
32
11
Mean
score
2.30
2.14
1.98
2.16
1.72
2.02
1.63
2.40
2.26
2.12
Based on figure IV, most of the respondents have neuroticism personality but average. Most
of them are not often feeling blue (90.7 percent), not getting upset easily (83.7 percent) and
not getting stressed out easily (76.8 percent). Beside that, most of respondents seldom feel
blue (75.5 percent), will not relaxed most of the time (72.8 percent), have no frequent mood
swings (72.1 percent) and will not get irritated easily (72.1 percent). 60.4 percent of them will
not change their mood a lot, while 58.2 percent are not easily disturbed. Lastly, 53.5 percent
said they are not worry about things.
Figure V: Personality Openness
No.
1
2
3
Questions
I am full of ideas
I am quick to understand
things
I have a rich vocabulary
Percentage
Frequency
Agree Disagree Agree
Disagree
72.1
28.0
31
12
79.1
20.9
34
9
62.8
37.3
27
16
Mean
score
2.88
2.93
2.72
4
5
6
7
8
9
10
I have a vivid imagination
I have excellent ideas
I spend time reflecting on
things
I use difficult words
I am not interested in
abstract ideas
I do not have a good
imagination
I have difficulty
understanding abstract ideas
72.1
81.4
86.1
27.9
28.6
14.0
31
35
37
12
8
6
3.07
2.88
3.14
48.8
83.7
51.2
16.3
15
36
22
7
2.42
1.95
30.3
69.8
13
30
2.98
34.9
65.1
15
28
2.40
Based on figure V, most of respondents have spend time reflecting on things (86.1 percent),
not interested in abstract ideas (83.7 percent), have excellent ideas (81.4 percent), easy to
understand things (79.1 percent), full of ideas and have a vivid imagination (72.1 percent).
Beside that, 69.8 percent of the respondents have a good imagination and easy to understand
abstract ideas (65.1 percent). Majority of the respondents (62.8 percent) have a rich
vocabulary while 51.2 percent of them always use simple words in their life.
8.0
Conclusion
Based on the research, all the big five personalities can be associated to entrepreneurs’
personality but to different extent. It is found that ‘agreeableness’ shows the highest mean
score which is 2.1 which means that most of the entrepreneurs have the ‘agreeableness’
personality; those who can be described as considerate, friendly, helpful, willing to
compromise their interests with others and etc. ‘Extraversion’ has the second highest mean
score ( mean score: 1.72) followed by ‘Openness’ (mean score: 1.58) ‘Conscientiousness’
(mean score: 1.42) and ‘Neuroticism’ (mean score: 1.32) consecutively. The study shows
that ‘Neuroticism’ gives the least association with entrepreneurs’ personality. Therefore, it is
concluded that average entrepreneurs are not really easily upset and are less emotionally
reactive. They tend to be calm. Emotionally stable and free from persistent negative feelings.
Overall, the outcome of this study yield positive result which reveals that the Big Five
personalities is an important set of personalities related to entrepreneurship. Although there
have been many previous studies focusing on entrepreneurship and personality traits which
yielded mixed results, it is believed that efforts in this area should not be abandoned. The
different outcome may be due to different constraints such as time, sample size and etc.
However, the outcome of this study may become a platform for further research in this
specific area.
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SMIBD 2007
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