Entrepreneurial Personality

Dr. Noor Muhammad

Models Of The Entrepreneurial

Personality
FOUR MODELS OF ENTREPRENEURIAL
PERSONALITY IDENTIFIED IN THE LITERATURE:

Need for Achievement

(Internal) Locus of Control
Risk-Taking
Need for Autonomy

NEED FOR ACHIEVEMENT

(N-ach)

One of the first studies to identify an

entrepreneurial trait was that carried out by
McClelland (1961)
This identified "Need Achievement" (n-Ach) as the
central force behind the entrepreneur.
This "n-Ach" can be defined simply as the drive
to excel, to achieve a goal in relation to a set of
standards.

NEED FOR ACHIEVEMENT

(N-ach)

McClelland shows that those individuals with high n-Ach

have a strong desire to be successful and tend to have
the following attributes:

preference for personal risks and willingness to work harder

a belief that one's personal efforts will be influential in the
attainment of some goal and pleasure derived from this belief
a tendency to perceive the probability of success in attaining a
goal as being relatively high
capacity to plan ahead and be particularly aware of the
passage of time
an interest in excellence for its own sake.

NEED FOR ACHIEVEMENT

(N-ach)

While this trait has been shown to be associated with

successful entrepreneurs, it has also been shown to
be associated with successful individuals from other
walks of life,
While there would appear to be a link between
achievement motivation and success, it does not
always follow that there will be a link with
entrepreneurship
On its own achievement motivation is insufficient to
explain entrepreneurship, and it will need to be
looked at in conjunction with other factors.

INTERNAL LOCUS OF CONTROL

Another single trait approach that has been the subject of

much discussion in entrepreneurship, and which is
closely related to the need for achievement, is the effect
of locus of control on the decision to become an
entrepreneur.
This theory suggests that individuals who cannot believe
in the ability to control the environment through their
actions would be reluctant to assume the risks that
starting a business entails.
The pioneering researcher in this field was Rotter (1966),
who defined two categories of locus of control,

INTERNAL LOCUS OF CONTROL

"When a reinforcement is perceived by the subject as

following some action of his own but not being entirely

contingent upon his action, then in our culture, it is
typically perceived as the result of luck, chance, fate, as
under the control of others, or as unpredictable because
of the great complexity of the forces surrounding him.
When the event is interpreted in this way by an individual,
we have labelled this a belief in external control. If the
person perceives that the event is contingent upon his
own behaviour or his own relatively permanent
characteristics, we have termed this a belief in "internal
control"

INTERNAL LOCUS OF CONTROL

A high internal locus of control tends to be found in

people who believe that the outcome of an event or
action is contingent on their behaviour rather than being
the result of external forces
They tend to prefer to take responsibility for things and to
believe that they can influence the outcome of events. As
a result, they tend to be self-confident with a strong selfbelief and often a high level of optimism.
A number of studies have suggested that locus of control
is a characteristic that is linked more with success than
entrepreneurship.

RISK-TAKING

Cantillon (1755) first associated uncertainty and the

entrepreneur
Mill (1848) / Knight (1921) the ability to bear risk is
the distinguishing feature between entrepreneurs
and managers reiterated this relationship
Hebert and Link (1982) concluded that practically all
past economic theories of entrepreneurship have
centred either on uncertainty, innovation, or some
combination of the two, and that the characteristics
of the entrepreneur should be a reflection of this.

RISK-TAKING

10

Long (1983) identified three themes in economic

literature namely "creative opportunism", "uncertainty and
risk", and "complementary managerial competence", and
that these three themes are interwoven in various
combinations and permutations in virtually all formal
theories of entrepreneurship.
McClelland's (1961) study concluded that persons with
high n-Ach would also have moderate risk-taking
propensities. There seems to be an association between
entrepreneurship and risk-bearing in other disciplinary
areas other than economics.

NEED FOR AUTONOMY

11

This relates to the general perception of

entrepreneurs as loners and anti-authority figures
who are uncomfortable with structure and dislike
constraints on their freedom of action.
The pursuit of a single trait that would identify
entrepreneurs from other types of individuals has led
to the suggestion by a number of psychologists that
entrepreneurs are singularly different individuals
from the rest of society in all aspects of their
character.

NEED FOR AUTONOMY

12

Endorsement of this concept of the entrepreneur as

a special individual who rejects society initially came
in the Bolton report (1971).
This suggested that the small firm can provide a
productive outlet for the energies of that large group
of enterprising and independent people who set
great store by economic independence and many of
whom are anti-pathetic or less suited to employment
in a large organisation.

NEED FOR AUTONOMY

13

This need for autonomy, which leads to

entrepreneurial behaviour was presumed by certain
researchers to be directly related to early childhood
experiences.
According to Kets de Vries (1977), entrepreneurial
behaviour such as a sense of impulsivity and a
persistent sense of dissatisfaction and rejection,
were conditions of the entrepreneur's unhappy
formative years

NEED FOR AUTONOMY

14

These characteristics lead to the individual's inability

to accept authority, resulting in a rejection of
employment in structured organisations.
S/he would search for an occupation in
entrepreneurship that would maximise the
individual's control over his/her destiny, and also
maximise independence.
This seems to be linked to Rotter's locus of control
model - Kets de Vries' deviant-entrepreneurs should
by definition have a high internal locus of control.

NEED FOR AUTONOMY

15

In a further study he suggests that entrepreneurs seem to

be achievement oriented, like to take responsibility for
decisions, and dislike repetitive, routine work.
Creative entrepreneurs possess high levels of energy
and great degrees of perseverance and imagination,
which enable them to transform what often began as a
very simple, ill-defined idea into something concrete.
High N.Aut. is a key motivating factor for people setting
up on their own in business. It is not about having
"power" but having independence and the opportunity to
make your own decisions in your own way.