ENTREPRENEURIA

L PERSONALITY
TRAITS
OVERVIEW
OVERVIEW
This module examines the empirical findings of
personality traits associated with entrepreneurial
actions from the meta-analysis of the literature.
These traits include the Big 5 personality traits
tested across the population. The multidimensional
Big-5 model comprises five dimensions: (1)
openness to experience, (2) conscientiousness, (3)
extraversion, (4) agreeableness, and (5)
neuroticism. These traits have been the principal
constructs of personality traits since the 1980s,
found to influence career choice and work
performance (e.g., Costa and McCrae, 1992;
Digman, 1990; Goldberg, 1990; John et al., 2008;
Rauch, 2014).
3
OVERVIEW
Each dimension is a spectrum of traits position
measured on a scale. However, research findings
showed no convincing evidence that the Big Five
model could predict entrepreneurial entry and
success. The Big-5 model has several limitations.
Foremost its framework is multidisciplinary
working on different personality dimensions and
second findings come from different research
paradigms. This module also incorporates other
traits such as self-efficacy, innovativeness, locus of
control, and need for achievement. These traits
may affect entrepreneurial performance or success,
along with other moderating environmental factors.

20XX Pitch Deck 4

OBJECTIVES
OBJECTIVES
Know and understand models of personality
1. traits that influence successful entrepreneurial
actions;

Develop hypotheses on the relationship between

2.
personality traits to entrepreneurial self-efficacy;

Gain clearer understanding of the specific traits

3. of entrepreneurs and their variation which may
help match potential entrepreneurs to favorable
settings; and
4. Identify common results and contradictions
indicating the heterogeneous nature of
entrepreneurship.
 PERSONALITY TRAITS

Research in the mid-20th century tried to integrate research

frameworks for entrepreneurial studies in the areas of economics
psychology, sociology, and business management. The aims
include defining an entrepreneur, their motivations, and
personality traits. Subsequent world work, however, encountered
conceptual difficulties and inappropriate measuring tools. The
empirical findings varied leading some researchers to conclude
that there was no correlation between personality and
entrepreneurship (e.g., Brockhaus and Horwitz, 1986; Gartner,
1988).
At the beginning of the 21st century the literature showed a
generally accepted theoretical framework on entrepreneurial
personality. The framework aims to answer whether certain
personality traits predict an individual's likelihood of becoming a
successful entrepreneur. Researchers investigated the prevalence of
personality characteristics of entrepreneurs set against other
population groups. They also analyzed the correlation of these
characteristics with entrepreneurial performance factors such as
business survival and growth (e.g., Baron, 2004). Later on, several
traits add into the Big-5 for entrepreneurial work other traits such
as need for achievement, self-efficacy, innovativeness, locus of
control, and risk attitudes.
20XX Pitch Deck 8
THE BIG FIVE
PERSONALITY
TRAITS
THE BIG FIVE
PERSONALITY TRAITS

Historically, the Big Five personality traits or the Five

Factors Model (FFM) have their early beginning from the
Hippocratic temperament sanguine, phlegmatic, choleric,
and melancholic. The sanguine type closely relates to
emotional stability and extraversion, the phlegmatic type is
stable but introverted, the choleric type is unstable and
extraverted, and the melancholic type is unstable and
introverted (Musek, 2017).
20XX Pitch Deck 10
Francis Galton (1884) first investigated the Hippocratic
temperament with the hope that a complete taxonomy will
define personality traits. Later, Gordon Allport in 1936
hypothesized that personality traits were observable and
relatively permanent traits. Subsequently, systematic
research of the Big 5 conducted from the 1940s ended
temporarily in the 1960s to 1970s. The Big-5 regained
acceptance in the early 1980s upon the works of Lewis
Goldberg, Naomi Takemoto-Chock, Andrew Comfrey, and
John Digman and by personality researchers in the 1980s.

11
While there is no generally agreed-upon definition of
personality (Sadock et al., 2017), this module mainly
concerned with Big Five as defined believed to be
generally stable in adulthood, and about half of the
variance appears to be attributable to a person's genetics
rather than the effects of one's environment (Lucas, et al.,
2004; Briley et al., 2014). In the 1980s, researchers used
the Big-5 to compare the traits of entrepreneurs to either
employed workers or the general population and identify
the traits that define entrepreneurship as a group.

12
Researchers measured openness, consciousness,
agreeableness, extraversion, and neuroticism (Kerr, S; Kerr,
W; and Xu, T, 2017). Openness to experience describes the
breadth, depth, originality, and complexity of an individual's
mental and experimental life. Conscientiousness describes
socially prescribed impulse control that facilitates task- and
goal-oriented behavior. Moreover, extraversion defines an
energetic approach toward the social and material world
and includes traits such as sociability, activity,
assertiveness, and positive emotionality.
20XX Pitch Deck 13
Agreeableness contrasts a pro-social and communal
orientation toward others with antagonism and includes
traits such as altruism, tender mindedness, trust, and
modesty. Neuroticism-contrasts emotional stability and
even-temperedness with negative emotionality's, such as
feeling anxious, nervous, sad, and tense.

20XX Pitch Deck 14

The Big Five personality
traits, also known as the
Five Factor Model (FFM),
are five broad dimensions
of personality that are used
to describe human
personality. These traits
are:

20XX Pitch Deck 15

1. Openness to
Experience: This trait
reflects a person's
willingness to try new
things, their creativity,
and their intellectual
curiosity.

20XX Pitch Deck 16

2. Conscientiousness:
This trait refers to a
person's level of
organization,
responsibility, and
dependability.

20XX Pitch Deck 17

3. Extraversion:
Extraversion involves
qualities such as
sociability,
assertiveness, and
energy level.

20XX Pitch Deck 18

4. Agreeableness: This trait
reflects a person's
tendency to be
compassionate,
cooperative, and trusting
rather than suspicious or
antagonistic towards
others.

20XX Pitch Deck 19

5. Neuroticism (sometimes
referred to as Emotional
Stability): Neuroticism
relates to a person's
emotional stability, their
tendency to experience
negative emotions such as
anxiety, depression, and
vulnerability to stress.
20XX Pitch Deck 20
 DIFFERENCES
BETWEEN
ENTREPRENEUR
S AND
MANAGERS
DIFFERENCES BETWEEN ENTREPRENEURS AND MANAGERS

Many studies compared the pervasiveness of Big 5 traits

between populations of entrepreneurs and managers.
Entrepreneurs and managers are comparable since both
groups direct workers and manage multiple tasks. In a
meta-analysis of 23 studies from 1970 to 2002 in a variety
of countries, Zhao and Seibert (2006) find entrepreneurs to
be more open to experience, more conscientious, similar
for extraversion, less agreeable, and less neurotic.
DIFFERENCES BETWEEN ENTREPRENEURS AND MANAGERS

Many individual studies show deviations from this pattern.

For example, a survey by Envick and Langford (2000) of
218 entrepreneurs and managers, find entrepreneurs to be
significantly less conscientious and agreeable than
managers and less extraverted, while the other patterns
were evident in the meta-study. These trait differences
between entrepreneurs and the average employed person
(managers included as an employee) referred to the
"attraction- selection-attrition model" (Schneider, 1987).
According to this model, workers wanted jobs whose
demands and opportunities match their talents, motives,
and personality traits. Employers then select applicants
whose aptitudes and motives meet their criteria, and
workers then stay in their occupational group when they
find their professional situation more rewarding than
other positions. Being more open to experience than
managers, researchers hypothesize that entrepreneurs are
comfortable with new challenges owed to constantly
changing environments.
24
On this account, they would prefer workers who thrive on
challenges and new environments, who can create new
solutions, business models. and products. In the meantime,
entrepreneurs hire managers for their ability to execute and
deliver high-quality results for a given set of directions rather
than seek out original solutions. Thus, researchers further
theorize that entrepreneurs hire individuals to meet the job
requirement in the face of a changing environment. In order for
openness to results in high levels of creativity, Zhao and Seibert
(2006) suggested that entrepreneurs must have a higher level of
conscientiousness as a composite of achievement.
25
 DIFFERENCES
ACROSS
ENTREPRENEURIA
L POPULATION
 DIFFERENCES ACROSS
ENTREPRENEURIAL POPULATION

It is worth noting that the variation across individual studies was due
to the small sample sizes (Envick and Langford, 2000; Antoncic et al.,
2015), therefore does not reflect the normal variation. But small
sample sizes are not the only issue as the patterns in meta-analyses like
(Zhao and Seibert, 2006; Zhao et al., 2010) overlap and also not fully
congruous. This limitation may in part reflect the influence of the
environment on each entrepreneurial population trait such that
generalizations across populations, industries, and culture are an
impossible task.
 DIFFERENCES ACROSS
ENTREPRENEURIAL POPULATION

On this account, whether necessity or opportunity-

driven entrepreneurs' personality trait manifestation
varies from one location to another. Perhaps as more
studies conducted in the future, reduction of the
deviations observed from samples would be a major
accomplishment. Another critique of the Big-5
framework is the general nature of personality traits
makes predicting the situation-specific behaviors of
entrepreneurs difficult.
 DIFFERENCES ACROSS
ENTREPRENEURIAL POPULATION

Also, an understanding of a person's Big-5 personality may not help

in understanding the specific mechanisms such as the Cognitive and
Affective Processing System or CAPS (Toward, 2004; Shoda, 2008),
through which personality impacts entrepreneurial attitudes and
actions (e.g. Kanfer, 1992; Rauch, 2014). Frustrated by these
limitations of the Big-5 framework to describe a coherent portrait of
the entrepreneur, researchers have shifted toward creating a
multidimensional personality framework that incorporates other
qualities like self-efficacy, innovativeness, locus of control, and need
for achievement.
RELATIONSHIP
BETWEEN BIG-5
AND SELF-
EFFICACY
 RELATIONSHIP BETWEEN BIG-5 AND SELF-
EFFICACY

A reading from the literature offers several

hypotheses. For example, openness to experience (O)
refers to the trait of being imaginative and
intellectually curious (McCrae and Costa, 1987), who
appreciates originality and explores new ways of
doing things, making them creative and innovative
(Schumpeter, 1934).
 RELATIONSHIP BETWEEN BIG-5 AND SELF-
EFFICACY

Barrick and Mount (1991) stressed that individuals

with high openness to experience may have positive
attitudes toward learning experiences. Zhao, Seibert,
and Lumpkin (2010) argued that "successful
entrepreneurial performance has a disposition
towards new or unusual ideas, values, and actions."
 RELATIONSHIP BETWEEN BIG-5 AND SELF-
EFFICACY

Hence, less open individuals would tend to be

conservative, preferring routines and status quo.
Hence, unfavorable to entrepreneurial activities."
Individuals with self-efficacy (SE) are creative,
ingenious, and have the capacity to discover
innovative things, therefore, openness to experience
may positively associate with SE (Ames and Runco,
2005). Express symbolically as OSE.
 RELATIONSHIP BETWEEN BIG-5 AND SELF-
EFFICACY

Agreeableness is the trait of being cooperative,

considerate, tender, trusting, accommodating, and
empathetic, whereas a disagreeable individual is
uncooperative, suspicious, egocentric, self-centered,
skeptical towards others' intentions, and manipulative
(Costa, McCrae, 1992). Previous studies have
reported varied results about the effect of
agreeableness on ES.
 RELATIONSHIP BETWEEN BIG-5 AND SELF-
EFFICACY

While high agreeableness can lessen entrepreneurial

failure rate (Cantner et al., 2011), "high levels of
agreeableness may impede one's willingness to drive
hard bargains, look out for one's own self-interest and
influence or manipulate others for one's own advantage"
(Zhao, Seibert, 2006). However, limited resources and
less access to legal protection may reinforce the
negative effect of agreeableness on ES.
 RELATIONSHIP BETWEEN BIG-5 AND SELF-
EFFICACY

Hence, a negative association between entrepreneurs

high in agreeableness and ES (A VSE).
Conscientiousness is a multidimensional personality
trait that integrates achievement orientation,
dependability, and orderliness. Conscientious persons
characterize organization and efficiency (McCrae and
Costa, 1997).
 BIG 5 AND
ENTREPRENEURIA
L INTENTION
 BIG 5 AND ENTREPRENEURIAL
INTENTION

The Big-5 traits may also determine

entrepreneurial intentions. Antoncic et al. (2015)
conducted 62 face-to-face interviews at firms
through 501 questionnaires at educational
institutions, classifying people into four groups:
 BIG 5 AND ENTREPRENEURIAL
INTENTION
1. practicing entrepreneurs who already own a firm (30.2% of
responses);
2. 2. potential entrepreneurs who intend to establish their own
firm in the following three years (9.9%);
3. maybe-entrepreneurs who might establish their own firm in
the future (46.7%); and
4. non-entrepreneurs who never intend to set up their own firm
(13.2%).
CORRELATES OF
SELF-EFFICACY
AND OTHER
TRAITS
 CORRELATES OF SELF-EFFICACY AND OTHER TRAITS

High self- efficacy (SE) correlates with work-related

performance (Stajkovic and Luthans, 1998), career choice
(Lent and Hackett, 1987), and small business growth (Baum
and Locke, 2004). Measured on two levels of specificity,
self-efficacy is either generalized or domain- specific the
latter constitutes entrepreneurial self-efficacy (ESE). It is
also a composite of five skills: innovation, risk-taking,
marketing, management, and financial control (Chen et al.,
1988).
 CORRELATES OF SELF-EFFICACY AND OTHER TRAITS

High self- efficacy (SE) correlates with work-related

performance (Stajkovic and Luthans, 1998), career choice
(Lent and Hackett, 1987), and small business growth (Baum
and Locke, 2004). Measured on two levels of specificity,
self-efficacy is either generalized or domain- specific the
latter constitutes entrepreneurial self-efficacy (ESE). It is
also a composite of five skills: innovation, risk-taking,
marketing, management, and financial control (Chen et al.,
1988).
 CORRELATES OF SELF-EFFICACY AND OTHER TRAITS

In a survey of students in three business study

programs, they find that entrepreneurship students
have a higher ESE average in marketing, management,
and financial control than did organizational
psychology and management students. Perhaps
entrepreneurship programs attracted students who feel
confident in many areas for the varied demands of
being an entrepreneur, or maybe the study of
 CORRELATES OF SELF-EFFICACY AND OTHER TRAITS

Chen et al. (1998) also find that business founders

have a higher ESE in innovation and risk-taking than
non-founders, even as the locus of control (belief of
having control over situations and experiences)
remains the same across the two populations. Utsch
and Rauch (2000) find innovativeness and initiative as
mediators of achievement orientation, which in this
case is a composite measure of self-efficacy, higher-
 CORRELATES OF SELF-EFFICACY AND OTHER TRAITS

Hence, the proposal for the concept of prospector

strategy. The concept means constantly seeking new
markets and opportunities and consists of three types:
1) a defender strategy concentrates on protecting
current
markets and maintaining stable growth;
 CORRELATES OF SELF-EFFICACY AND OTHER TRAITS

2) an analyzer strategy both try to maintain market

share and seek new market opportunities; and
3) reactor strategy who cannot anticipate or influence
events in the environment (Bandura, 1997; Forbes,
2005). Scholars were reluctant to pursue further
studies on prospector strategy possibly for limited
publication on this area.
 CORRELATES OF SELF-EFFICACY AND OTHER TRAITS

Moreover, Cassar and Friedman (2009) compared

nascent entrepreneurs in the start-up phase of new
ventures with a control group drawn from the general
working-age population. The Panel Study of
Entrepreneurial Dynamics (PSED) defines a nascent
entrepreneur as anyone who is currently trying to start
a new business, expects to be an owner or part-owner
of the firm, and active in doing so for the past 12
 CORRELATES OF SELF-EFFICACY AND OTHER TRAITS

Cassar and Friedman (2009) assert that their data,

drawn from the PSED and interview and survey
responses of 431 American nascent
entrepreneurs, present evidence that higher ESE
increases the likelihood of being a nascent
entrepreneur and the successful founding of a
business. Diagram 1 illustrates the correlates of
self-efficacy and other traits.
DIAGRAM 1. CORRELATES OF SELF-EFFICACY AND OTHER TRAITS

Self-efficacy Work related performance Career choice

Small business growth Student innovativeness in
Entrepreneurial marketing, management, and financial control
self-efficacy Innovativeness and risk-taking by business founders

Innovativeness Innovativeness and initiative (consists of a composite

measure of self-efficacy, need strength, need for
and
achievement, and internal LOC
productivity
Big five traits
Innovativeness: Entry of small firms
(Domain-
specific/general Probability of nascent entrepreneurs
Success of business founding
 CORRELATES OF
INTERNAL LOCUS
OF CONTROL
 CORRELATES OF INTERNAL LOCUS OF CONTROL

Caliendo et al. (2009) re-evaluate, along with

other researchers, that traits such as LOC may
affect directly with decision-making in the
professional field. In addition, on the assumption
that LOC is a culturally dependent trait
(Hofstede, 1980), Mueller and Thomas (2000)
find that countries with more individualistic
cultures (as opposed to collectivist cultures) show
 CORRELATES OF INTERNAL LOCUS OF CONTROL

Locus of Control (LOC) is an important feature

of entrepreneurship literature. People with
internal LOC have control of their own decisions.
They believe that their abilities, efforts, or skills
rather than external forces control their chance,
destiny, or the characteristics of the environment.
Past research linked belief in an internal locus of
control (ILOC) with the probability of engaging
CORRELATES OF
NEED FOR
ACHIEVEMENT
 CORRELATES OF INTERNAL LOCUS OF CONTROL

The need for achievement alludes to an individual's desire to accomplish

noteworthy and challenging business goal Researchers hypothesize that
entrepreneurs have a higher need for achievement since the creation of a
business enterprise need exceptional individual capacities to achieve the
goals. Like LOC the important role of the need for achievement is well-
documented in several areas. Need for Achievement (nAch) is a concept
based on the "Acquired Need Theory" (need gained through experiences
in life) of McClelland (1985) considered as the dominant needs that
influence individual actions in a work setting.
 CORRELATES OF INTERNAL LOCUS OF CONTROL

The concept was first introduced by Murray (1938), and later developed
and popularized by McClelland (1961, 1985). Many researchers found
that a high need for achievement predicts (+) entry into entrepreneurship,
although this finding meets opposition in specific situations (e.g socio-
economic characteristics; environmental and psycho-social factors). The
higher need for success is apparent in the studies of Austrian
entrepreneurs (Korunka et al., 2003) and Turkish students (Gürol and
Atsan, 2006), with exception of the study of Swedish entrepreneurship
students (Hansemark, 2003). Comparing four Austrian studies, Frank et
al. (2007) conclude that the need for achievement can select individuals
to enter entrepreneurship (+).
 CORRELATES OF INTERNAL LOCUS OF CONTROL

In a comparative analysis across countries, Stewart and Roth (2007)

concluded from 18 studies and 3,272 topics that entrepreneurs are more
motivated than executives, regardless of the country or type of
instrumentation. Other differences are also clear among subsets of
project founders. Mueller and Thomas (2000) find that Swiss
entrepreneurs have a higher demand for achievement than U.K.
entrepreneurs, suggesting that the trait varies across cultures and nations.
Some researchers have also linked the need for achievement to business
performance.
 CORRELATES OF INTERNAL LOCUS OF CONTROL

Such as the meta-analysis by Collins et al. (2004) concluded that both

positive-looking and self-reported performance measures predict
company intentions and performance. Rauch and Frese (2007) had a
similar result Frank et al. (2007) argue that the need for achievement,
along with other personality factors, is much less relevant than
environmental resources and many "process configurations" (such as the
set of management functions including planning, organization, and
human resource practices) in explaining entrepreneurial performance.
The Need for Achievement is a crucial component in
understanding the entrepreneurial mindset. Entrepreneurs
often exhibit a strong need for achievement, which drives
them to pursue innovative ideas, take calculated risks, and
strive for success in their ventures. Here are some key
correlates of the Need for Achievement in the context of the
entrepreneurial mind:
1. Risk-taking Propensity: Entrepreneurs with a high need
for achievement are more likely to take calculated risks.
They are willing to step outside their comfort zones to
pursue opportunities for growth and success, but they do so
with careful consideration of potential outcomes.
2. Goal Setting and Achievement Orientation: Individuals
with a high need for achievement are adept at setting
ambitious yet attainable goals for themselves and their
ventures. They are driven by the desire to succeed and
continually strive to surpass their own expectations.
3. Innovativeness and Creativity: The need for achievement
often correlates with innovativeness and creativity.
Entrepreneurs with a strong achievement orientation are
constantly seeking new ways to solve problems, improve
products or services, and stay ahead of the competition.
4. Persistence and Resilience: High achievers in
entrepreneurship exhibit persistence and resilience in the face
of challenges and setbacks. They view obstacles as
opportunities for learning and growth rather than
insurmountable barriers, and they persevere in their pursuit
of success.

20XX Pitch Deck 62

5. Autonomy and Independence: Entrepreneurs with a high
need for achievement value autonomy and independence in
their work. They are motivated by the freedom to pursue
their own ideas and make decisions independently, rather
than being constrained by traditional organizational
structures.

20XX Pitch Deck 63

6. Performance Orientation: Achievement-oriented
entrepreneurs are focused on performance and results. They
set high standards for themselves and their ventures,
constantly striving to outperform competitors and achieve
excellence in their chosen markets.

20XX Pitch Deck 64

7. Networking and Opportunity Seeking: Individuals with
a strong need for achievement are proactive in seeking out
opportunities and building networks. They leverage their
connections to gain valuable insights, resources, and support
for their ventures, recognizing the importance of
collaboration and strategic alliances.

20XX Pitch Deck 65

8. Adaptability and Flexibility: Successful entrepreneurs
with a high need for achievement demonstrate adaptability
and flexibility in response to changing market conditions and
customer needs. They are quick to pivot their strategies and
adjust their approach as circumstances evolve, ensuring
continued relevance and competitiveness.

20XX Pitch Deck 66

• Overall, the Need for Achievement is a key driver of
entrepreneurial behavior and success, influencing various
aspects of the entrepreneurial mindset including risk-taking,
goal orientation, creativity, persistence, autonomy,
performance orientation, networking, and adaptability.
Entrepreneurs who possess a strong need for achievement
are often driven to push the boundaries of innovation and
make a lasting impact in their industries.

20XX Pitch Deck 67

FIN.