Question

When trying to understand what makes a successful innovator or entrepreneur, many different types of individual factors given the label of ‘human capital’ are usually considered.

Ø Elaborate the factor of “personality” and explain the three specific personality traits that have been shown to be particularly related to behavior in work contexts .

Ø Assess the limitations of the “Individual /Characteristics based approach .

Answer 1

1. Personality

Aside from the interest in examining in depth the characteristics of certain high-profile successful entrepreneurs, most research on personality aims at identifying different dimensions or traits of personality and understanding their relationship to outcomes in terms of innovative behavior or entrepreneurial success. In some research, different aspects of personality are grouped together so that individuals can be assigned to a particular personality type. However, most research adopts a trait-based focus. The ‘Big Five’ personality ‘super’ traits are the culmination of much research in this area and are explored further below.

Since the 1980s, there has been a large degree of agreement amongst psychologists about the importance of five personality traits, commonly referred to as the ‘five-factor model’ (FFM) or simply the ‘Big Five’ (Goldberg, 1993; Wiggins, 1996). It is important to remember that these are not all the possible traits or dimensions to personality, rather attention is focused on these as they appear to help us understand the relationship between personality and behavior and, critically, how these vary between individuals.

Taking each of these factors in turn, you might expect a person who is at the ‘higher’ end of the scale to display the following typical dispositions, and someone who is at the ‘lower’ end to display the opposite:

1. Extraversion: tends to be outgoing, sociable, and optimistic.
2. Neuroticism: tends to be anxious, emotionally unstable, and prone to depression.
3. Agreeableness: is easy to get on with, widely liked by other people.
4. Conscientiousness: is hard-working, reliable, and conformist.
5. Openness to experience: adopts liberal, innovative approaches to problems.

Psychologists suggest that each of these broad dimensions of personality is made up of a number of narrower traits (e.g. ‘anxiety’ or ‘friendliness’), although their exact number and nature is still hotly debated. Personality traits are now generally seen as potential influences or tendencies which may (or may not) be realized in the lives of particular individuals (McCrae and Costa, 1996). For example, there is strong evidence to suggest that early childhood experiences have an important role to play in determining how particular tendencies are realized in the adult person. Though you might expect to inherit certain tendencies, these remain open to a variety of other influences during the course of your life. As a result, the Five Forces Model can only provide part of the explanation for human behavior (ibid.: 65). For example, aspects of an individual’s personality may be modified as a result of early childhood experiences. Furthermore, self-identity and behaviors remain open to a variety of influences over the course of a lifetime (Wille et al., 2010). For example, personal identity is shaped, at least in part, by the social roles an individual adopts (e.g. parent, teacher), while attitudes and behaviors are influenced by factors such as exposure to new people, events and ideas.

In other words, while the ‘Big Five’ factors may be influential, they are only one component in a more complex and dynamic process, which also involves interactions between the factors. Personality is only one factor amongst many that contribute to an individual’s entrepreneurial behavior.

1. The individual Factors’ approach.is still widely used by practitioners, teachers and researchers. In addition to the ‘Big Five’ other, more specific, personality traits that have been shown to be particularly related to behavior in work contexts. These include:

• Locus of control: an individual’s generalized belief about internal (self) control vs. external control (by the situation or others).
• Self-efficacy: an individual’s general belief that they are capable of meeting demands in a variety of contexts.
• Self-esteem: An individual’s general feeling of self-worth.

However, despite their considerable popularity, these approaches have become controversial, with methodologies and findings being challenged. In order to assess the value and relevance of these approaches, it is important to bear in mind three underlying assumptions: first, that some individuals possess psychological characteristics that can be associated with entrepreneurial behavior, either in the present or in the future (Carland et al., 1984). Second, the assumption that the characteristics are relatively stable (over time) and consistent (across different social settings). The third and last assumption that researchers are able to isolate the relevant characteristics from other aspects of an individual’s personality, and from the context in which they are operating.