What are the key personality factors and
to what extent can they influence the
successfulness of an entrepreneur?
Bachelor Thesis
Organization & Strategy
Year 2009-2010
Amar de Winter 312 103
Supervisor Dr. ir. J.S. Small
Word Count: 6028
1|Page
Table of Contents
1. Introduction
p. 3
1.1 Problem Indication
1.2 Problem Statement
1.3 Research Questions
1.4 Relevance
1.5 Research Design and Data Collection
1.6 Structure of the Thesis
p. 3
p. 3
p. 4
p. 4
p. 4
p. 5
2. Entrepreneurship
p. 6
2.1 Entrepreneurial Characteristics
2.2 Defining and Measuring Entrepreneurship
2.3 Different Perspectives on Entrepreneurship
2.4 Conclusion
p. 6
p. 7
p. 8
p. 10
3. Defining success at two stages
p. 12
3.1 Stage one: The intention to become entrepreneur
3.2 Stage two: Entrepreneurial firm performance
3.3 Conclusion
p. 12
p. 13
p. 13
4. Big Five personality model
p. 15
4.1 Personality traits in-depth
4.2 Risk propensity: the sixth dimension
4.3 The extent of the influence of personality
4.4 Conclusion
p. 15
p. 18
p. 19.
p. 20
5. Conclusion and recommendations
p. 21
5.1 Conclusion
5.2 Limitation
5.3 Recommendation
p. 21
p. 22
p. 22
References
p. 23
Appendix
p. 29
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Chapter 1: Introduction
1.1 Problem Indication
The success of the entrepreneur is determined by both predispositional and situational factors.
Zhao, Seibert and Lumpkin (2009) examined the relationship of personality to outcomes
associated with entrepreneurial intentions and entrepreneurial performance. From their research
we can conclude that personality is the primary factor to investigate when attempting to predict
the success of the entrepreneur.
Rauch and Frese, (2007) investigated the personality traits of the high-growth intention of
entrepreneurs and argue that the relationship between them is significant. This is in contrast with
previous research in which it is said that there is no such relationship. The recent meta-analysis
of Rauch and Frese on entrepreneurial personality traits among others ‘need for achievement’,
‘tenacity’ and ‘self-efficacy’ shows that personality can play quite a large role in the high-growth
intention of entrepreneurs. Personality traits can affect behavior only if situations are relevant
and not constrained to allow the expression of individual differences (Mischel, 1968). Thus,
potential moderators are environmental constraints (Dess & Beard, 1984; Herron & Robinson
1993), such as the recent economic situation, the demands of the specific industry, or the stage in
the business life cycle (Baron, 2007).
Another key success factor is success experience, which is the entrepreneur’s ability to have an
indication that growth is feasible and as a result perform a given behaviour (Davidsson, 1991).
The theory of Reasoned Action suggests that a person’s behavior is determined by his/her
intention to perform the behavior.
This thesis will investigate the relevance of the key personality factors and their influence on the
successfulness of the entrepreneur.
1.2 Problem Statement
The preceding section leads us to the following problem statement:
What are the key personality traits and to what extent can they influence the successfulness of an
entrepreneur?
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1.3 Research Questions
So entrepreneurship is influenced by personality, success experience and the intention to perform
a specific behavior, leading to the following research questions:
i. What is entrepreneurship?
ii. How has entrepreneurial success been defined?
iii. What are the key personality traits for an entrepreneur?
iv. To what extent can personality influence the successfulness of the entrepreneur?
1.4 Relevance
From an academic perspective, the thesis has specified the different factors that contribute to
successful entrepreneurship. Entrepreneurship plays an important role in a dynamic modern
economy. Failure as an entrepreneur can be costly to society in terms of missed opportunities and
lost resources. Therefore, providing clear insights of entrepreneurial processes and clarifying the
variables that are responsible for the successfulness of the entrepreneur is an important
undertaking.
From a managers perspective, we can in a way compare managers and entrepreneurs in their way
of doing business, as a manager performs entrepreneurial behavior within the organization. On
the other hand there are still many differences between managers and entrepreneurs, so this
Thesis has focused on entrepreneurs. Still there are many similarities between them that can be
interesting from the manager’s perspective.
1.5 Research Design and Data Collection
The goal of this thesis is to clarify the relation between the entrepreneur and the successfulness
of his/her entrepreneurship. This study is primarily a literature review and has used secondary
sources.
Publications are used from the Web of Science and other recommended databases such as for
example ABI/Inform. Keywords in relation with entrepreneurship like ‘success’, ‘personality’,
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‘entrepreneurial intentions’, ‘high growth intention’ and ‘performance’ have been used, to find
all relevant articles from these sources.
1.6 Structure of the Thesis
The structure of the thesis is as follows: in the next chapter some entrepreneurial characteristics
are described. Chapter 2 is also used to elaborate the theoretical framework of entrepreneurship,
which is used to situate the domain of interest in the broader picture. In chapter 3, a distinction is
made between entrepreneurial intention and performance to explain the concept of success. As
chapter 2 and 3 are dedicated to explain entrepreneurship and success in detail, chapter 4 will
discuss the personality traits by using the Big Five model. This chapter will also indicate to what
extent the personality dimensions influence the successfulness of an entrepreneur. In the final
chapter, the problem statement is answered to explain the effect of the personality traits on
entrepreneurial success. Chapter 5 will also discuss the limitations of this thesis and
recommendations for future research.
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Chapter 2: Entrepreneurship
2.1 Entrepreneurial characteristics
To explain the key personality factors that distinguish entrepreneurs from non-entrepreneur
groups, this first section of chapter 2 will discuss characteristics of a successful entrepreneur.
Empirical studies on the characteristics of entrepreneurs are numerous and both practitioners and
academic scholars agree that venture success is closely related to the individual characteristics.
Various important characteristics have been identified, with as three important: need for
achievement, locus of control and risk taking (Smith-Hunter, Kapp & Yonkers, 2003).
The need to achieve refers to the motive behind the individual to accomplish a certain goal and
to continuously improve their target. There is empirical support that entrepreneurs have a higher
‘need to achievement’ than non-entrepreneurs (Begley, 1995). Closely connected to this is the
internal locus of control, which can be defined as perceived control over the events in one’s life
(Mueller & Thomas, 2001). Since individuals who are confident to believe that they can manage
their environment in a positive sense, will have better future prospects as entrepreneurs. There
are also several studies that indicate that having a high locus of control improves the sense of
self-efficacy, improving the following up of intentions (Smith-Hunter et al., 2003). The
implementation of plans and strategies to improve the successfulness of the entrepreneur clearly
illustrates an individual’s attempt to control and manage the environment. Besides the literature
indicating that the locus of control positively affects entrepreneurship, Bouchikhi (1993) writes
about a negative influence: “The more the locus of control is high, the more the venture is likely
to be a failure” (Bouchikhi, 1993, p. 551). There are no arguments used in his research to prove
this.
The third dimension, risk taking, is a process that entrepreneurs face daily. This risk taking can
be financial, social or psychic and it is an important characteristic that distinguishes
entrepreneurs from non-entrepreneurs. The risk taking propensity is the perceived probability of
rewards associated with success in a situation and taking the consequences associated with
failure into consideration (Brockhaus, 1980). In section 4.4 risk propensity is described in more
detail by using the Big Five personality model.
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2.2 Defining and measuring entrepreneurship
According to Gartner (1989), entrepreneurs are not a well-defined occupational class of persons,
he claims that the behavior of entrepreneurs is more relevant. Also Schumpeter states, as
discussed by Wennekers and Thurik (1999), that being an entrepreneur is not a profession and as
a rule not a lasting condition. Entrepreneurs do not form a social class like for example
landowners or workmen do. By conceptualizing this behavior, a better understanding of the
influence of entrepreneurs on economic growth can be investigated. The behavior of
entrepreneurship has an input and an output side: where on the one hand entrepreneurial behavior
requires entrepreneurial skills and qualities which are discussed in detail in chapter 4,
entrepreneurship also implies the participation in the competitive process of the market.
Basically, entrepreneurship has to do with activities of individual persons and by linking
entrepreneurship to economic growth; it means linking the individual level to the aggregate
levels (Wennekers & Thurik, 1999).
Schumpeterian entrepreneurs, intrapreneurs and managerial business owners make the core of
entrepreneurship. Schumpeterian entrepreneurs or self-employed entrepreneurs are to be found
mostly in small firms that are innovative and that creatively destroy the existing market
structures. After realizing their goals Schumpeterian entrepreneurs often develop into managerial
business owners, but some may again start new ventures or new firms (Wennekers & Thurik,
1999). Intrapreneurs or entrepreneurial managers carry out commercial activities on behalf of
their employer and they are the embodiment of leadership resulting in entrepreneurial ventures in
larger firms. Sometimes these intrapreneurs spin-off and start their own enterprises and become
Schumpeterian entrepreneurs. Managerial business owners are the entrepreneurs in the formal
setting; they are to be found in the large majority of small firms. They belong to the economic
core and entrepreneurial ventures can grow out of them (Kirchoff, 1994). Wennekers and Thurik
argue that “While the managerial business owners fulfill many useful functions in the economy
like organization and coordination of the production and distribution, they cannot be viewed as
the engine of innovation and creative destruction. This is the major function of the
Schumpeterian entrepreneurs and intrapreneurs” (Wennekers & Thurik, 1999, p. 123).
However all three groups make their contribution to economic growth as is explained in the
following section.
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2.3 Different perspectives on entrepreneurship
To explain the different stages, we can distinguish entrepreneurship at three different levels; the
level of the individual entrepreneurs operating on their own or in teams and partnerships, the
firm level and the aggregate levels of industries, regions and national economies. These different
levels are called micro, meso and macro. Entrepreneurship is distinguished thus at one of the
three perspectives according to which factors of organizational growth are more emphasized;
external and internal factors or their interaction process.
Macro level perspective
The macro level perspective is based on external factors which can be translated among others to
environmentalism, which is characterized by studies based on viewpoints of organizational
lifecycle or organizational ecology. Quinn and Cameron (1983) studied the determinants of
organizational growth for the long term and their effects. Like Schumpeter and Kirzner the
general point of view taken by economists is the focus of what entrepreneurs can achieve in
terms of wealth creation. On the one hand there are several studies that attempt to identify
environmental factors that give rise to the large number of entrepreneurs and to identify various
cultural traits of specific locations or ethnic groups that encourage economic success. On the
other hand there are numerous studies that emphasize institutional factors such as labor markets.
Pennings (1982) statistically identified the direct relationship between the economic growth rate
of an urban area, the number of universities and the clustering phenomenon of start-up SME’s in
a specific field. Pennings noted that growing industrial agglomeration promotes entrepreneurial
activities and facilitates flows of technology and human resources. This macro perspective, based
on environmentalism, provides a better insight into the role of the entrepreneur in the economic
society.
Micro level perspective
This perspective is investigated extensively in the following chapters; with the focus on the
internal key factors of an entrepreneur that influence the successfulness of his/her
entrepreneurship. When we emphasize the internal factors, we consider the concept of the
entrepreneur from the psychological or sociological points of view at the micro level. The
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predispositional variable underlying a starting entrepreneur’s high-growth intention is
personality; since the expected positive relationship of personality to outcomes associated with
entrepreneurial performance. Kunkel (2001) claims that personality traits enable people to deal
with typical entrepreneurial environments and tasks like recognizing entrepreneurial
opportunities such that personality and firm growth were assumed to be positively related. Also
Rauch and Frese (2007) investigated the personality traits of the high-growth intention of
entrepreneurs and argue that the relationship between them is significant. They also state that
besides intention, another important variable is the need for achievement to determine the
successfulness of the entrepreneur. The psychological endowments influence the crucial
elements of entrepreneurship, like skills and attitudes that are important for performing the right
actions and the resulted firm performance. It is already clear that psychological abilities have a
large influence on the high-growth intention of the entrepreneur, which will be investigated
further in the upcoming chapters.
Meso level perspective
The focus on the organizational approach is here especially on the acquisition, accumulation and
the utilization of resources. Entrepreneurship within the company is determined by the resources
by which the firm can distinguish itself from competitors. If each firm possesses core
management resources as advantageous organizational assets, the resources enable the firm to
achieve great operational success if effectively used (Yamada, 2004). The presence of resources
in a certain domain also greatly influences the number of establishments of new firms which has
its effects at the macro level perspective (Chrisman, 1999). Firm-specific management resources
not only tend to determine the start-ups of a business, they also predict the early performance,
since scarce resources are more likely to obtain profits. Therefore, each new venture focuses on
accumulating specific management resources through unique business development, which can
be an important advantage over existing large firms (Yamada, 2004). Internal factors that drive
the long-term growth of a firm are assumed to be unutilized resources. Such resources originally
have various potential uses and can be turned into utilizable resources by directing them
according to the entrepreneur’s knowledge. (Penrose, 1959) By only focusing on the resourcebased growth theory, it devalues the human being behind a firm’s resources, since the resources
are depending on the interpretation and utilization of the entrepreneur. The high-growth
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intentions of an entrepreneurship are the combination of the available resources and the creator’s
knowledge in sorting out the available resources and reinterpreting them from new perspectives
to create value (Yamada, 2004).
Linking entrepreneurship to economic growth also means linking the individual level to the firm
and the macro level. As defined earlier, entrepreneurship is operational at the individual level
which has essentially to do with behavior. To be able to transform this behavior into the right
action, entrepreneurs need to operate from the firm level where their actions and ambitions can
be executed. Small firms provide such a vehicle to perform entrepreneurial actions whereas
larger firms often have a prescribed business culture where this entrepreneurial creativity is
minimized. Important feedback mechanisms are competition and selection which enables
individuals or firms to learn from their own and other’s successes and failures. These learning
processes increase the entrepreneurial skills and adapt their attitudes. As a consequence new
entrepreneurial actions will be executed which will continuously renew the organization of the
market. Also at the macro level there is a continuous competition of new ideas and initiatives,
leading to the selection of the most viable firms and industries (Wennekers & Thurik, 1999).
2.4 Conclusion
The need to achieve refers to the motive behind the individual to accomplish a certain goal and
to continuously improve their target. The locus of control is closely connected to this need to
achievement and is defined as the perceived control over the events in one’s life. A third
entrepreneurial characteristic, risk propensity, is the amount of risk an entrepreneur permits to
reach target. In chapter 4 these characteristics will be included in the Big Fiver personality model.
When defining entrepreneurship, it is important to understand that it differs and changes over
time, since it is a behavior that is continuously adapting to the context entrepreneurs are
operating in. Schumpeter divides entrepreneurs into three categories: the managerial business
owners are the entrepreneurs in the formal setting, they fulfill functions like organization and
coordination of the production and distribution. The Schumpeterian entrepreneurs and
intrapreneurs are responsible for the application of innovation and creative destruction to the
need and opportunities of the market. To investigate entrepreneurship in the economy as a whole,
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it is distinguished in three different perspectives according to which factors of organizational
growth are more emphasized. In the macro level perspective, environmental and institutional
factors are the main indicators for entrepreneurial activity in a certain region. Therefore, the
focus at the macroeconomic level is on these external factors. Entrepreneurs within the firm are
discussed in the meso level perspective; their utilization of the firm specific (management)
resources differentiates them from competitors. It is the combination of the available resources in
a certain domain and the personal strengths of the entrepreneur in how to use them to create
maximum value for the firm (Yamada, 2004). This thesis will investigate the internal key factors
of an entrepreneur in the micro level perspective and from several researches it can be concluded
that the influence of personality on the successfulness of entrepreneurs is significant. To be able
to investigate this, the following chapter will define first the concept of entrepreneurial success.
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Chapter 3: Defining success at two stages
In the literature success is sometimes defined by only measuring the performance. According to
Zhao, Seibert and Lumpkin (2009), success is divided into two stages: the entrepreneurial
intention and performance. To define success a complete overview is given, with the distinction
between these two stages.
3.1 Stage one: The intention to become entrepreneur
This first critical step in the process of becoming a successful entrepreneur is the ability to start
and manage one’s own business. Bird (1988) describes this entrepreneurial intention as the
expressed behavioral intention to become an entrepreneur. A distinction is made between the
intentions of small business owners and entrepreneurs, where small business owners are more
focused on low-growth intentions, entrepreneurs will focus on high-growth and innovation (De
Baets, 2006). Davidsson (1989) is explaining this intention by growth motivation; which is
determined by the perceived ability, need and opportunity for growth. According to Davidsson,
the entrepreneur’s perceptions for these determinants of growth intentions are of major
importance for explaining the influence of personality on the high-growth intention of
entrepreneurship.
An important consideration is that the statistical relationship between growth intention and the
subsequent realization tends to be rather weak. This can be caused by situational factors
influencing the high growth intention of the entrepreneur, like access to resources and
availability of opportunities (Zhao, Seibert & Lumpkin, 2009). Despite a possibly large influence
of situational factors, this thesis investigates only the predispostional factors that determine the
success of entrepreneurship. Grundy and Welsch (2001), as mentioned in the research from Zhao
and Seibert (2009), did extensive research from which can be concluded that entrepreneurs are
depicted as having a high-growth intention when they intent strategic growth and expansion
intentions, willing to offer the opportunity cost at the short term for the foreseeing opportunity
costs, perceive strategic success factors to be of greater importance to their organization, and
utilize a greater variety of financing resources at start-up and growth (Zhao et al., 2009). An
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entrepreneur is supposed to posses at least several of these characteristics in order to have highgrowth intention.
3.2 Stage two: Entrepreneurial firm performance
After having the entrepreneurial intention to become an entrepreneur, the second stage is about
the elaboration of this intention to a healthy entrepreneurship. Available explanations of the
entrepreneurial process outcome can be distinguished into 4 different stream. The first two are
the entrepreneur’s personality or strategy and the other 2 streams are the entrepreneur’s
performance related to the environment (either sociological or economical). Bouchikhi (1993)
named the first two, the endogenous explanation and the latter two the exogenous explanation.
Entrepreneurial performance is typically measured in economic or financial terms; in this view
performance is seen as a quantitative subject (Brush & VanderWerf, 1991). Within literature
there are also other views on entrepreneurial performance found that are more towards a
qualitative approach such as growth in relation to knowledge and sustainability. To explain the
factors that describe entrepreneurial performance as a quantitative subject, there are different
views on which variables should be calculated to measure firm performance. Smith (1999)
measures performance according to growth in employees, return on equity and productivity.
Other variables used to measure performance are survival, revenues/sales, income and
profitability (Srinivasan, Woo & Cooper, 1994; Lerner et al., 1997). Entrepreneurial firm
performance underlies the individual’s ability to continue as an entrepreneur, even though some
successful entrepreneurs may choose to no longer continue as the manager of their own business
(Zhao et al., 2009).
3.3 Conclusion
In the literature the emphasis is on performance, but Zhao et al. (2009), include the high-growth
intention as the first critical step in becoming a successful entrepreneur. As a result,
entrepreneurial success is defined by both the intention to become an entrepreneur and the
development of this intention to a sustainable firm (entrepreneurial performance). The statistical
relationship between growth intention and the subsequent realization of a successful
entrepreneurship tends to be rather weak due to situational and predispositional factors, where
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this thesis investigates the influence of predispositional factors on entrepreneurial success. In the
next chapter, the personality dimensions and their influence on entrepreneurship, is discussed.
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Chapter 4: Big five personality model
4.1 Personality traits in-depth
Several recent meta-analyses show that entrepreneurs do differ from other groups in terms of a
broad range of personality traits. Personality theorists agree that an individual’s personality
predicts his or her behavior (Funder, 1994; Ciavarella, Buchholtz, Riordan, Gatewood, & Stokes,
2004). As a consequence, personality traits may have important implications on performance as
the entrepreneur’s behavior is likely to influence success (Hunt & Adams, 1998). Entrepreneurs
with personalities that enhance their ability to perform should have a greater probability of
sustaining the operations for the long-term (Ciavarella et., 2004). To investigate the influence of
personality on success more in-depth, this thesis uses the Big Five personality model. Since the
mid-1980s, the Big Five factors has been found to be a robust indicator that captures the basic
structure of an individual’s personality (Ciavarella et., 2004). With the big five personality model
this thesis will investigate which personality factors (and to what extent) have an effect on the
successfulness of the entrepreneur.
Figure 2: Big Five Personality Model related to the high-growth intention of the entrepreneur.
Extraversion
Emotional Stability
Agreeableness
à
High-growth intention
Openness
Consciousness
(Risk propensity)
Extraversion is associated with people’s perception of the leadership role (Lord, De Vader &
Alliger, 1986). The match between traits of extraversion, such as energy, assertiveness,
gregarious and being sociable, and the attributes associated with leading a new venture lead us to
expect extraverts to be more attracted to entrepreneurship. This also supported by research in
which is shown that extraverted people are more likely to take on leadership roles (Judge,
Higgins, Thoresen & Barrick, 1999). The personal ‘leadership’ traits are characterized by the
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entrepreneur is his communication of vision and enthusiasm, building networks establishing
relationships among employees and partners, and negotiating deals with suppliers and customers
(Markman & Baron, 2003; Zhao et al., 2009). Researchers have taken an unanimous stand on the
explanation of this first dimension, but still there are some slight differences in understanding.
According to Hogan (1986) extraversion is interpreted as consisting of two components, namely
ambition and sociability.
Research by Holland (1984) shows that extraverts are more appealing to entrepreneurship, since
this career is expected to be more challenging and exciting than many traditional business
occupations. McCelland (1987) found in his study that assertiveness is the differentiator between
successful and average entrepreneurs. Meta-analytical results show that extraversion is positively
related to job performers that involve high levels of social interaction (Barrick, Mount & Judge,
2001). As a result, extraversion is to be the strongest personality predictor of leadership and as a
consequence entrepreneurship (Judge, Bono, Ilies & Gerhardt, 2002).
The second dimension is called emotional stability and together with extraversion they
represent the “Big Two” described by Psychologist Eysenck over 40 years ago. Common traits
associated with people low on emotional stability are being anxious, depressed, angry,
embarrassed, emotional worried and insecure (Barrick & Mount, 1991). These individuals are
prone to stress and obstacles as emotional volatility and worrying will negatively affect their
entrepreneurial behavior. In both the popular imagination and the academic literature,
entrepreneurs are typically described as hardy, optimistic, and steady in the face of social
pressure, stress, and uncertainty (Baron, 1999). Entrepreneurs take on physical and emotional
burdens and they press ahead where others might be discouraged by obstacles or self-doubt
(Zhao et al., 2009). Other individuals are not willing to take these personal responsibilities and
strains associated with new ventures and will choose for safer, traditional types of employment.
Therefore it’s necessary for an entrepreneur to dispose of a high level of emotional stability and
to take personal responsibility for the success or failure of their entrepreneurship. Entrepreneurs,
who are emotional stable, are more likely to cope with problems through positive thinking and
direct action (Costa & McCrae, 1992). They are able to stay calm and behave in a confident
manner in order to be able to focus on the necessary tasks and as a result they will increase their
potential in becoming a successful entrepreneur.
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Agreeableness is the dimension that assesses how much people concern for the needs of others.
People high on agreeableness are more likely to be courteous, forgiving and flexible in dealing
with others. This interpersonal factor focuses on the quality of relationships through cooperation
and trust (DeNeve & Cooper, 1998; Judge et al., 1999). There is some disagreement on this
dimension since there is the view that people high on agreeableness are more likely to be
occupied in social work, where they can work for the benefit of others, rather than business, that
is build around the entrepreneur’s own needs and interests (Singh & DeNoble, 2003). The
limited leeway for altruistic behavior and the self-focused relationships make that entrepreneurs
are not characterized as agreeable people. As a logical conclusion we expect less agreeable
individuals to be more successful entrepreneurs (Zhao et al., 2009).
On the other hand, there are researchers who conclude the opposite; a high level of agreeableness
is necessary to receive the required support e.g. to get a new venture started. Entrepreneurs who
establish trusting, flexible and courteous relationships with their customers should expect to reap
the profits of repeat business (Ciavarella et al., 2004). Besides, entrepreneurs who are trusting
and cooperative in their business relationships are more likely to develop alliances with larger
companies, resulting in new product development, shareholder wealth and venture survival
(Baron & Markman, 2000). Here agreeableness is explained as quality relationships with
suppliers and investors so there is a greater likelihood of receiving essential future support and
resources, which can support the performance over the long-term (Ciavarella et al., 2004).
Openness to experience, also known as intellect, describes someone who is intellectually
curious, imaginative and creative, related to opportunity recognition (Ciavarella et al., 2004).
The attributes of intelligence, broad-mindedness and originality are salient for starting and
maintaining a new venture. Creativity and proclivity bring about innovative change and
entrepreneurs are likely to rely on creativity to be able to maintain their business and protect the
firm from competitors (Bird, 1989). In the modern business environment, it is imperative that
entrepreneurs are ready to adapt quickly to changes in the market. The constancy of change
requires intelligence and curiosity to acquire new knowledge (e.g. of technological advances)
and innovative thinking to develop new strategies (Ciavarella, 2004). As a result, high levels of
openness will decrease the probability of failure of the entrepreneurship
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Conscientiousness is a personality dimension that describes an individual’s level of achievement,
work motivation, organization and planning, perseverance, and responsibility toward others
(Ciavarella et al., 2004; Roberts, Chernyshenko, Stark, & Goldberg, 2005; Zhao et al., 2009).
There is some disagreement in the literature regarding the essence of this dimension. According
to some writers, conscientiousness reflects dependability; that is, being careful, thorough,
responsible, organized and planful. Others have suggested that in addition to these traits, it
incorporates volitional variables, such as hardworking, achievement-oriented and persevering. In
1990, Digman’s study provides evidence that the volitional aspects should be included in
defining conscientiousness (Barrick & Mount, 1991).
The first two entrepreneurial characteristics, as described in chapter 2, can also be assigned to
conscientiousness: need to achieve, since individuals with high need for achievement will be
more attracted towards entrepreneurship as this achievement-oriented focus is not found in this
extent in other forms of employment (Zhao et al., 2009). Moreover, this dimension has also been
associated with both goal directed behavior (such as efficacy) and control related traits, like
internal locus of control (DeNeve & Cooper, 1998). Other traits in this dimension that are
expected to be positively related with entrepreneurial success are work goal orientation and
perseverance. Being persevering should result in higher sales productivity, while being wellorganized signifies increased efficiency and effectiveness (Ciavarella et al., 2004).
4.2 Risk propensity: the sixth dimension
There is a discussion in the literature on which of the five dimensions ‘risk propensity’ can be
assigned. Some scholars suggest that risk propensity is a compound personality trait reflecting a
specific combination of scores on all five dimensions of personality, namely high extraversion,
openness to experience, emotional stability, low agreeableness and low conscientiousness
(Nicholson, Fenton-O’Creevy, Soane, & Willman, 2005; Zhao et al., 2009). Others argue that
risk propensity forms a separate sixth dimension of personality (Paunonen & Jackson, 1996). In
table 2, risk propensity is given a separate place outside the model to explain this dimension
separately.
Risk propensity is the willingness to pursue decisions or courses of action where there is an
uncertainty regarding the success or failure of the outcomes (Jackson, 1994). Individual
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predispositions do influence behavior in situations involved with risk. An entrepreneur has
always been a person who is willing to bear more risk and people with a high risk propensity are
more attracted to entrepreneurship. Stewart and Roth (2001, 2007) found entrepreneurs to be
significantly higher in risk propensity than managers. Although, risk propensity may not be
beneficial for subsequent entrepreneurial firm performance, since persistent exploitation of the
known competitive advantage will be more beneficial than gambling the firm’s resources on new
strategies (Zhao et al., 2009). As a result, an entrepreneur should manage his risk propensity very
carefully.
4.3 The extent of the influence of personality
Now the influence of the personality dimensions on entrepreneurship is discussed, the following
step is to link this to entrepreneurial success (see chapter 5). This section is used to explain to
what extent the personality traits are contributing to success (entrepreneurial intention and
performance). In the meta-analysis by Zhao et al. (2009), they included 60 studies with 66
independent samples and a total sample size of 15,423 individuals. In table 1, a summary is
provided of their findings (see also appendix).
Trait
Intentions
Performance
Conscientiousness
0.18
0.19
Openness
0.22
0.21
Emotional Stability
0.14
0.09
Extraversion
0.11
0.05
(-)0.09
(-)0.06
Agreeableness
The Big Five estimates are standardized regression coefficients with p<0.01.
Table 1 presents the multiple regression results from the meta-analysis (Zhao et al., 2009, p. 394).
Openness to experience and consciousness appear to be the personality dimensions that have the
strongest effect on entrepreneurial success. As discussed earlier, according to Zhao et al. (2009),
agreeableness appears to be negatively related to success and unless its small results on the
entrepreneurial intention and performance, both results are statistically significant. The multiple
R between the five personality variables and entrepreneurial intentions was 0.36, whereas the
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multiple R with entrepreneurial performance was 0.31. This suggest that a relationship between
personality and entrepreneurial success holds, since such effect sizes can be viewed as
sufficient/large for psychologists (Meyer, Finn, Eyde, Kay, Moreland & Dies, 2001). This study
by Zhao et al. (2009), provides evidence to explain to positive relationship of personality on
entrepreneurial success which is elaborated in chapter 5.
4.4 Conclusion
To conclude, the influence of personality on entrepreneurship was rejected until the late 80s, but
nowadays there is enough evidence of a visible influence of personality traits on the
successfulness of the entrepreneur. The research published over the past 30 years helps us to
explain the influence of these personality traits and how each of them affects the success of a
new venture. In the meta-analytic study of Zhao et al. (2009) and Ciavarella et al. (2004), the
three entrepreneurial characteristics (from section 2.1) are also included; need to achievement
and locus of control are classified under consciousness. Risk propensity is a rather different
characteristic which can be spread over the five dimensions or taking separate. An entrepreneur
should be able to take the risks involved with setting up a new business (intention), but reduce
risk taking to a certain extent such that it will not negatively influence the firm’s performance.
From the Big Five personality model can also be concluded that entrepreneurs score higher on
openness to experience, conscientiousness, extraversion and emotional stability, and are lower on
agreeableness than non-entrepreneurial groups (Zhao & Seibert, 2009). This differs from the
research from Ciavarella et al. (2004) where the effect on the long-term survival is measured;
here entrepreneurs should also score high on agreeableness to increase entrepreneurial success.
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Chapter 5: Conclusion and recommendations
The previous chapters were constructed to discuss the different research questions; this chapter
will provide an answer to the problem statement: “What are the key personality factors and to
what extent can they influence the successfulness of an entrepreneur?” Besides, this chapter will
also indicate the limitations encountered during the literature review and recommendations for
future research.
5.1 Conclusion
Zhao et al. (2009) and Ciavarella et al. (2004), studied the influence of personality to outcomes
associated with entrepreneurial activity, from which can be concluded that not the environmental
factors (alone) determine the successfulness of an entrepreneur. To illustrate this with an
example: even with limited resources an entrepreneur can be very successful, since their creative
use of external networks they are still able to attain the resources needed. Unless the expected
positive influence of predispositional variables on success, the contribution of personality to the
successfulness of the entrepreneur has been rejected until the mid-1980s, since the lack of
evidence.
In the previous chapter, personality has been distinguished into Big Five factors: openness to
experience, conscientiousness, extraversion, emotional stability and agreeableness. To
investigate the influence of each personality trait separately on entrepreneurial success, their
effect on the entrepreneurial intention and performance needs to be discussed. Zhao et al. (2009),
formed the following conclusion: entrepreneurs score higher on openness to experience,
conscientiousness, extraversion and emotional stability, and are lower on agreeableness (on both
intention and performance) than non-entrepreneurial groups. They also took into account the
research from Ciavarella et al. (2004), which only differs on the interpretation of agreeableness,
which here increases entrepreneurial success.
When discussing risk propensity separately, as a ‘sixth dimension’, risk propensity is positively
related to the entrepreneurial intention, but negatively related to firm performance (Baron, 2007).
Because an entrepreneur should be able to take the risks involved with setting up a new business,
but reduce risk taking to a certain extent such that it will not negatively influence the
entrepreneurial performance. The extent of the influence of the Big Five factors on the
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successfulness of the entrepreneur was already given in the previous chapter (Table 1, p. 19),
which is based on the most recent study on this topic (Zhao et al., 2009). As a result, personality
has a large effect on the successfulness of the entrepreneur and is one of the main indicators of
entrepreneurial intention and performance.
5.2 Limitation
There were a number of limitations to this study. Firstly, the influence of only the
predispositional factors on entrepreneurial success are studied and not the contribution of
situational factors. As a consequence, the focus was more on the personality dimensions than
entrepreneurial success in general. Another limitation is that only secondary literature is used to
investigate the problem statement; there is no empirical evidence found with own research.
Another limitation is that not all the available research on this topic is used and as a result there
will be views from researchers that are not discussed, which decreases the overall validity.
5.3 Recommendation
Managerial Recommendations
There is a large influence of personality on successful entrepreneurship and now these
dimensions are identified, individuals, who want to become entrepreneur, should work on their
personality traits to maximize their abilities. Besides, active entrepreneurs can also be instructed
where they can improve their abilities to become even more successful. This has to be put into
perspective, since entrepreneurs conduct a specific behavior and ‘being entrepreneur’ is not a
lasting condition. As a result, potential entrepreneurs should focus on personality traits which
enables them to improve their entrepreneurial behavior.
Academic Recommendations
It would be also interesting to investigate how somebody’s personality changes due to
entrepreneurial behavior; e.g. entrepreneurs are expected to become more open to experience and
less agreeable over time. Another interesting topic is a complete study of all the factors that
influence the successfulness of the entrepreneur, since when the environmental factors are also
included, the mutual relationship between situational outcomes (exogenous dimension) and
predispositional factors (endogenous dimension) can be identified.
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Appendix
Table 1 in thesis presents the multiple regression results from the meta-analysis (Zhao et al., 2009, p.
394).
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