*DIMENSION OF TRAITS AS DETERMINANT OF SUCCESS:
PERCEPTIONS OF MALAYSIAN ENTREPRENEURS.
Mohd Radzuan Rahid and Zafir Mohd Makhbul
Faculty of Economics and Business, UKM.
Fazilah Mohamad Hasun
Faculty of Management and Muamalah
Kolej Universiti Islam Antarabangsa Selangor
Arawati Agus
Graduate School of Business, UKM.
Abstract
A significant number of researches have conducted studies of the characteristics of entrepreneurs
in the past. Various relationship have been established between entrepreneurs’ characteristics
with, among others; business performance, entrepreneurial orientation and entrepreneur’s
personal relationships. Nevertheless, despite this high volume of studies on characteristics of
entrepreneurs, most of the findings and results are yet uniformed and conclusive. Thus, this
paper tries to identify the characteristics of entrepreneur in which Malaysian entrepreneurs
perceived crucial in contributing towards their success. Identifying the right traits is very
important, because successful entrepreneurs play significant roles in building a nation’s
economy. This paper is based on a preliminary stage of a research that tries to observe the
entrepreneurs’ traits dimensions and how it contributes towards the business success and
competitiveness. The questionnaires distributed measures some dimensions of entrepreneur’s
characteristics that frequently cited in previous studies. The respondents consist of successful
entrepreneurs which are based on a simple definition of success that is continued trading. The
respond from 26 entrepreneurs have been analyzed using the non-parametric test. Based on the
analyses conducted, it is found that four characters have been identified by the respondents as the
important traits that contribute to a success - internal motivation, willingness to take risks,
visionary and have access to various market information. The finding has reinstated the
importance of these traits especially risk taking and internal motivation, that had already
established to be the traits that distinguished between entrepreneurs and others.
Keywords: Entrepreneur, Characteristics, Traits, Success.
1
INTRODUCTION
Studies on entrepreneur can be traced back in the 1960’s where McClelland (1961) had argued
that a high need for achievement was a personality trait common to entrepreneurs. Since then,
high volume of research have been conducted in the field of entrepreneurship. Yet the interests
on the field never lose its momentum. Various studies had been conducted in order to understand
issues relating to entrepreneur. One of the topics that generated significant amount of interest is
related to character of entrepreneurs. A number of researches have been conducted to study the
characteristics of entrepreneurs in the past. Those studies on entrepreneurs have garnered a lot of
interest because of their contributions towards the economy of a nation. Entrepreneurs, who are
synonym with small and medium businesses, had been regarded as one of the main players in
economics activities in most countries all over the world.
In Malaysia for example, small and medium enterprises (SME) accounted for 99.2% of the total
business establishments. This sector has been recognized as the potential contributor towards
economics vibrancy. In realising its potential, Malaysian government has taken various actions
and incentives to ensure the development and sustainability of the sector. Among others,
government has set up the National SME Development Council (NSDC) that was established in
2004 to set strategic direction for government policies on SME development an to ensure
coordination and effectiveness of Government programmes.
Nevertheless, the definition of entrepreneur is not being confined to SME only, this is because,
some of the successful entrepreneur has moved out from the phase of SME and becoming a big
established company. Thus, this paper tries to identify the characteristics of entrepreneur in
which Malaysian entrepreneurs perceived crucial in contributing towards their success.
Identifying the right traits is very important, because successful entrepreneurs play a significant
role in building a nation’s economy.
LITERATURE REVIEW
Characteristics of Entrepreneur
Characteristics of entrepreneur have been extensively studied by many scholars. Numerous
aspects of entrepreneur’s traits have been identified and studied. Early studies like McClelland
(1961 and 1965) had described the characteristics needed in entrepreneurship and what
distinguished entrepreneurs with general population. The research which centred on the need to
achievement (nACH) theory suggested that individuals with a strong need to achieve often find
their way to entrepreneurship and succeed better than others as entrepreneurs. This research has
been cited and discussed in many subsequent studies. Another theory that commonly applied in
the field of entrepreneurship relating to characteristics of entrepreneur was a research by Rotter
(1966). Rotter (1966) had discussed about locus of control theory. In the study it was found that
an internal control expectation is usually associated with entrepreneurial characteristics.
Beside the two landmark researches on the subject matter, many other subsequent researches had
further discussed about the characteristics of entrepreneurs (Churchill and Lewis, 1986; Shaver
and Scott, 1991; Littunen, 2000). These studies have expanded the list of characteristics of
2
entrepreneurs, among others include ability to take risks, innovativeness, marketing skills, ability
to co-operate, ability to identify business opportunity, visionary and many more. Another
research that has given an exhaustive list of the traits of entrepreneur is Louw et al. (2003). In the
study, they have listed all the characters from previous literatures and group them in 16
categories. These include another group of traits that they classified as ‘business knowledge’.
Previous studies also have been looking at the relationships that being established between
entrepreneurs’ characteristics with, among others; business performance (Curran et al., 1986;
Beaver, 2002; Harada, 2002), entrepreneurial orientation (Entrialgo et al., 2000) and
entrepreneur’s personal relationships (Littunen, 2000). Nevertheless, despite these high volume
of studies on characteristics of entrepreneurs, most of the findings and results are yet uniformed
and conclusive (Heron and Sapienza, 1992; Shaver and Scott, 1991).
Characteristics and Successful Entrepreneur
The types of characteristic and other factors that make entrepreneur successful have been
thoroughly studied in the past. Curran et al. (1986) have found that successful entrepreneurs
were made of combination of knowledge and experiences and personality, and the way they are
affected by the outside influences of society and environment. Nandram (2002) on the other hand
concluded that successful entrepreneur must have a combination of attributes and skills including
being goal-oriented, decisive, pragmatic, resolute, flexible and self-confident.
Successful entrepreneur is measured by the performance of their business. However, definitive
definition of success for business has yet to be concluded. This is because, according to Watson
et al., (1998), there is lack of suitable methodological approach for defining success. Whereas for
small business, they have different characteristics, objectives and qualities and that these differ
between industries (Gadenne, 1998). As commented by Beaver (2002): “… there are very real
problems with the term “success” and its various interpretations and perceptions in the small
firm sector”.
Nevertheless, various attempts have been made to define success. In some studies, success has
been linked to the growth of the business and its profitability. But, as pointed out by Gray
(1990), some of the small business owners have the strong desire to maintain personal control
and business independence which has been identified as the key factor limiting the growth of
many potentially successful small enterprises. This finding echoed previous studies by Curran
(1986). In other instances, a more simplified definition has been used. Simple definition of
success is made equivalent to continued trading and failure equivalent to ceased trading (Watson
et al., 1998). However the assumptions of those who exit the business are considered failure
might not be true. According to Harada (2002), it is quite feasible that the decision whether to
stay or not in business is not due to profitability factor, but could be due to the characteristics of
the entrepreneur. In his study he measured success by looking at profitability, sales and income
of the company. In this study, we have opted to use the simple definition of success that is
continued trading.
3
THE STUDY
This paper is based on a preliminary stage of a research that tries to observe the entrepreneur
traits dimensions and how it contributes towards business success and competitiveness. This is
based on a model constructed to look at the relationship between these traits dimension and
success of a firm and its competitiveness. However, this paper only looks at the relation of the
trait dimensions and its determinant towards success.
METHODOLOGY
The questionnaires distributed measures some dimensions of entrepreneur’s characteristics that
frequently cited in the previous studies (Casson, 1982; Caird, 1998; Littunen, 2000; Gurol and
Atsan, 2006). Several questions have been constructed to measure each of the trait dimensions.
The respondents selected consist of successful entrepreneurs, which is based on a simple
definition of success that is continued trading (Watson et al., 1998). For this paper, a total of 40
questionnaires have been distributed to a random sample at a few locations in Klang Valley,
Selangor and Negeri Sembilan. The data from the returned questionnaires have been analysed
using the non-parametric test such as Kruskal Wallis and Mann Whitney tests. The results are as
follows.
FINDINGS
The data was collected via questionnaire distributions. 40 questionnaires were distributed to the
samples, who were randomly selected. From 30 questionnaires returned, only 26 could be used
for further analysis. Thus, the data has been analyzed by using non-parametric analysis. Firstly,
the reliability of the instrument has been analyzed. The overall Cronbach’s alpha value for the
instrument is 0.947. This value shows us that the instrument is very reliable. Table 1 shows the
Cronbach’s alpha values for the respective dimensions. From Table 1, we can note that two
variables are not reliable, i.e. social and support. These two variables were not included in the
correlation analyses.
Table 1: Cronbach Alpha for Respective Variables
Entrepreneur’s Dimensions
Cronbach’s Alpha
Creativity
0.823
Opportunity
0.820
Innovative
0.803
Motivation
0.868
Risk Taking
0.747
Willingness
0.960
Communication
0.892
Leadership
0.940
Sacrifice
0.851
Experience
0.765
Honesty
0.847
4
Politic
Social
Support
Information Access
Vision
0.870
0.681*
0.622*
0.810
0.850
Most of the respondents are Malay (70.4%), followed by Chinese (14.8%) and others (11.1%).
Out of 26 respondents, 70.4% are males and the rest are females. 51.8% of the businesses’
owners attended secondary school, either in SRP/ PRM or SPM level. 40.7% of them had
attended colleges and universities, gaining their diplomas, degrees, masters, or PhDs. The
business they run can be classified to sole proprietorship (44.4%), partnership (33.3%) and only
22.2% of them run private limited companies. More than half of the respondents have run the
business for more than 5 years. Even though they have been in the businesses for more than five
years, most of them (63%) reported that they gained less than RM500,000 sales revenue
annually. The detailed information on the respondents’ as well as their businesses background is
depicted in Table 2.
Table 2: Respondents’ Background Information
Background information
Percentage (%)
Gender
70.4
Male
29.6
Female
Race
70.4
Malay
14.8
Chinese
11.1
Others
Tenure of business
29.6
1 – 3 years
14.8
3 – 5 years
55.6
> 5 years
Education background
3.7
Primary level
51.8
Secondary level
40.7
Tertiary level
Types of business
44.4
Sole proprietor
33.3
Partnership
22.2
Private Limited
Annual Sales (RM)
63
< 500K
22.2
50K – 1M
3.7
1.5M – 2M
3.7
2.5M – 3M
3.7
> 3M
5
Next, the Mann-Whitney test is being run in order to understand the differences in the
entrepreneur’s dimensions between male and female respondents. At the significant level of
0.05, the Mann Whitney test clearly indicates that there is no difference between male and
female respondents in term of entrepreneur’s dimensions. Table 3 illustrates the Mann Whitney
test’s results.
Table 3: Comparisons of Entrepreneur’s Dimensions by Gender
Entrepreneur’s Dimensions
Mann Whitney Value
Sig Value
Creativity
66
0.977
Opportunity
66
0.977
Innovative
64
0.523
Motivation
58.5
0.340
Risk Taking
42
0.690
Willingness
42
0.630
Communication
69
0.709
Leadership
63.5
0.504
Sacrifice
21.5
0.477
Experience
24.5
0.701
Honesty
19
0.294
Politic
70.5
0.767
Information Access
46.5
0.247
Vision
59
0.808
To check whether or not there is differences in entrepreneur’s dimensions by races, the Kruskal
Wallis test is administered. The results are shown in Table 4. From Table 4, we can notice that
Malay, Chinese, and Others races are only differ in four dimensions – willingness, leadership,
experience and honesty.
Table 4: Comparisons of Entrepreneur’s Dimensions by Race
Entrepreneur’s
Group
Mean Rank Chi-Square
Dimensions
Value
Creativity
Malay
13.89
2.625
Chinese
7.63
Others
14.83
Opportunity
Malay
13.94
1.159
Chinese
11.25
Others
9.67
Innovative
Malay
15.18
3.585
Chinese
8
Others
10.17
Motivation
Malay
14.66
2.437
Chinese
8.25
Others
13.17
Sig Value
0.269
0.56
0.167
0.296
6
Risk Taking
Malay
Chinese
Others
Willingness
Malay
Chinese
Others
Communication
Malay
Chinese
Others
Leadership
Malay
Chinese
Others
Sacrifice
Malay
Chinese
Others
Experience
Malay
Chinese
Others
Honesty
Malay
Chinese
Others
Politic
Malay
Chinese
Others
Information Access
Malay
Chinese
Others
Vision
Malay
Chinese
Others
Success
Malay
Chinese
Others
**Significant at the 0.01 level (2-tailed)
*Significant at the 0.05 level (2-tailed)
14.26
8
16
15.84
4.13
11.17
15.53
6.75
9.67
15.87
5.38
9.33
11
4.63
6.75
10.5
3.75
11.25
11.36
3.25
7.5
12.55
16.38
15.67
14.72
9.88
6.83
14.56
6.25
12.67
13.83
11.13
10.5
2.626
0.269
8.497
0.014*
5.251
0.072
7.301
0.026*
5.517
0.63
6.135
0.047*
9.126
0.01**
1.133
0.567
3.831
0.147
4.202
0.122
0.8939
0.657
Table 5 shows the results of the Spearman’s correlations between the entrepreneur’s dimensions
with the success factors. The table shows that only four dimensions are correlated significantly
with the success factors. The dimensions are motivation, risk taking, information access and
vision. Table 5 also depicts the mean of entrepreneurs’ perceptions towards the traits they
perceive important and related significantly to their success. Based on Table 5, we can notice
that all dimensions, except for politic are perceived important by the samples.
7
0.9574
5.1923
5.5000
5.0800
5.3538
5.4352
5.4352
6.1728
5.8333
5.8472
5.2222
6.2917
2.4385
4.9440
5.7267
2 Opportunity
3 Innovative
4 Motivation
5 Risk Taking
6 Willingness
7 Communication
8 Leadership
9 Sacrifice
10 Experience
11 Honesty
12 Politic
13 Information
14 Vision
.448*
.407*
.183
.113
.106
.014
.264
.164
.254
.499**
.422*
.310
.246
.291
Success
.490*
.184
-.049
.442
.276
.237
.388
.509**
.467*
.352
.515**
.672**
.553**
1
1
.619**
.420*
.115
.233
-.019
.430
.330
.586**
.408*
.448*
.323
.767**
1
2
N = 26
**Correlation is significant at the 0.01 level (2-tailed)
*Correlation is significant at the 0.05 level (1-tailed)
0.8163
1.3071
1.3577
1.0405
1.3815
1.2780
0.9799
0.7986
1.0110
1.0110
0.8950
1.2097
1.1269
SD
Mean
Entrepreneur’s
Dimensions
1 Creative
.651**
.519**
.093
.295
.154
.343
.437*
.578**
.453*
.291
.507**
1
3
.661**
.519**
-.183
.673**
.292
.388
.517**
.635**
.709**
.318
1
4
.409*
.351
-.094
.354
.429
.290
.464*
.407*
.623**
1
5
.643**
.657**
-.279
.791**
.558*
.558*
.753**
.799**
1
6
.803**
.597**
-.155
.648**
.415
.658**
.847**
1
7
.552**
.507**
-.152
.572*
.579*
.505*
1
8
.607*
.419
-.345
.575*
.258
1
9
.302
.365
-.430
.432
1
10
.774**
.439
-.441
1
11
Table 5: Mean, Standard Deviation, Mean Success, and Spearman’s Correlation among Entrepreneur’s Dimensions
.027
.167
1
12
8
.590**
1
13
1
14
CONCLUSIONS
Based on the analyses conducted, it is found that four characters have been identified by the
respondents as the important traits that contribute to a success. The traits are; internal motivation,
willingness to take risks, visionary and have access to various market information. The finding
has reinstated the important of these traits especially risk taking and internal motivation, that had
already established to be the traits that distinguished between entrepreneurs and others (Stewart
et al., 1998). Besides identifying the traits that deemed important to respondents that lead to
success, this paper also try to observe other behaviour from the data collected. However, only
differences of trait dimensions being perceived by different races can be concluded, in which
willingness, leadership, experience and honesty are the traits dimensions that have different
degree of importance to the three different races. Nevertheless the underlying reason need to be
further explored.
LIMITATIONS
Our research has chosen to adopt simple definition of success in choosing the respondents. This
might affect the outcome of the finding if those who are discontinued from trading are not
because of failure (Harada, 2002). The respondents that involved in this preliminary stage of
study might not be representative of the whole Malaysian entrepreneurs, because they were from
only three different states. Nevertheless, this can be improved in the future as the ongoing
research covers almost every state in Malaysia.
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