Entrepreneurs; Are They Born or Made?

By May 17, 2019Academic Papers

 Entrepreneurs; Are They Born or Made?

 

 

 

 

 

 

 

 

 

 

Introduction

An entrepreneur is an individual who opts for self-employment thereby pursuing a business venture or idea to achieve financial success or certain social ends. According to Chell (2008), unemployment has become a rampant problem that has resulted in governments encouraging their citizens to pursue entrepreneurship to create jobs and wealth in their countries. Businesspeople face many challenges including lack of resources and probable failure. Despite the said challenges, many individuals have been able to succeed in their ventures. This has generated significant curiosity on what it takes to become a successful entrepreneur. For this reason, psychologists over the years have conducted research on personality traits that contribute to the creation of successful entrepreneurs. This has resulted in two differing conclusions. The first is that individuals who pursue entrepreneurship possess certain innate characteristics that equip them for their ventures. The second holds that individuals can learn entrepreneurship and do not necessarily have to possess natural dispositions. This paper uses the personality trait theory to explore the two opposing arguments to determine whether entrepreneurs are born or made.

Characteristics of an Entrepreneur

There are many characteristics attributed to entrepreneurs. Naturally, they stem from successful and established entrepreneurs. These are important when it comes to determining whether individuals can learn and develop the said traits in their pursuit of entrepreneurship. The five prominent features that stand out are as follows:

Confidence

Confidence is the ability to possess and portray certainty in oneself. This is critical when pursuing a business, especially if others criticize it or actively make efforts to hinder its success. As previously mentioned, entrepreneurs face many challenges as they pursue their venture. Being confident greatly contributes to the ability of these businesspersons to persevere. Groenen et al.’s (2013) study illustrates that entrepreneurs are more confident compared to their non-entrepreneurial counterparts. This may explain the propensity of entrepreneurs to take risks.

Conscientiousness

Conscientiousness is the ability to be organized and efficient. Ciavarella et al.’s (2004) study shows that this trait plays a significant role in the survival of businesses in the long term. In the study, long-term survival denotes stability of the enterprise for more than eight years (Ciavarella et al., 2004).

Innovation

This is the ability to come up with pristine ideas, methods, and products. Stokes, Wilson, and Mador (2010) point out that to effect change in the business world through innovation; businesspersons require high levels of creativity.

Risk taking

When one ventures into a business of his own creation, many uncertainties come with the process. This calls on entrepreneurs to possess the willingness to take risks as they establish their business. Like confidence, the willingness to take risks is important in ensuring that the business perseveres in times of crisis (Kuratko, 2013).

Autonomy

Autonomy denotes the need for people to act independently of others. This is a vital trait in an entrepreneur because many fail to garner support for their venture during the start-up period (Stokes, Wilson and Mador, 2010). Therefore, they need to be independent of others to enable them to achieve their business objectives.

The above characteristics do not encapsulate the personality traits of all entrepreneurs. However, their identification, in a significant number of studies, makes them relevant to establishing whether they fall in the category of nature or nurture.

The Case for Born Entrepreneurs

This school of thought sees entrepreneurs as unique individuals that have innate personality traits that enable them to succeed in free enterprise. Because of the elucidated personality traits, it is easy to conclude that they are naturals and that entrepreneurs are born, and not made (Getz, 2013). There is mounting research that entrepreneurs, especially the successful ones, possess certain inherent attributes that predispose them to pursue the path of entrepreneurship. Shane’s (2010) study indicates that certain combinations of some individuals’ genes can result in traits that make it likely that they will start an enterprise. The resultant features are the personality traits that enable entrepreneurs to come up with and start their own business ventures. Specifically, the genes influence their ability to identify viable opportunities in the business industry (Shane, 2010).

From the personality traits explicated in the previous section, conscientiousness, confidence, and innovation stand out as attributes that are of particular interest in genetic entrepreneurship. Shane (2010) points out that certain gene combinations have an effect on conscientiousness levels in individuals. Therefore, it is consequential that they affect people’s tendency to start businesses (Shane, 2010). However, this linkage is indirect, as scientists have yet to established a direct link between the two. Since most entrepreneurs possess this characteristic, the possible role of genes in its development and establishment cautions its dismissal from the subject of genetic entrepreneurship.

Shane (2010) points out that one’s genes have control over 45% to 61% of variance with respect to the ability to innovate. Therefore, the level of the innovative trait in an entrepreneur, in part, stems from gene combinations. Innovation is an important aspect of entrepreneurship. Therefore, genetic influence on innovation, consequently affects one’s tendency to start a business of their own. The same goes for confidence, which is another essential trait in entrepreneurs. Genes take credit for the variance in the level of confidence in people: between 29% and 49%. Again, the evidence supporting this is indirect and requires further research to prove it undoubtedly.

Fisher and Koch’s (2008) study on 234 Chief Executive Officers (CEOs) both entrepreneurs and non-entrepreneurs, shows that some individuals are predisposed to become entrepreneurs compared to others. The study indicates that this variation is due to heredity, as did Shane’s (2010). The personality traits that the study identified as common among ‘born innovators’ include confidence, autonomy and risk taking (Fisher and Koch, 2008).

The proponents of this school of thought hold that this categorization of entrepreneurs has a significant bearing on the labour market. One of these is that it helps employers fit the right people into jobs that have an entrepreneurial requirement (Fisher and Koch, 2008). Examples include managers and product developers. This school of thought additionally helps individual decide if they are well suited to venture into entrepreneurship or not (Fisher and Koch, 2008). Its advantage is that it can encourage people to pursue business if they possess these features, thus facilitating economic growth (Fisher and Koch, 2008). On the other hand, the same criteria would discourage those who do not possess the attributes of an entrepreneur. Studies showing that most successful entrepreneurs possess these qualities are likely to make this school of thought more acceptable (Fisher and Koch, 2008).

The Case for Made Entrepreneurs

This school of thought holds that one need not possess certain inherent characteristics for them to become entrepreneurs. Instead, they submit that people can develop the traits of an entrepreneur if they take the time to do so (Shefsky, 2011). This disagrees with the alternate ideology that sets apart businesspersons as unique creatures hence barring others from becoming similar to them through learning and experience. The features of entrepreneurs are observable and in some cases measurable (Getz, 2013). For instance, research methods such as self-reporting and observation provides information on personality traits and reveals people’s strengths and weaknesses. Researchers use this to gain further insight into the influence of personality traits on entrepreneurship. Such studies go further to prove whether there is any truth to the notion that only specific individuals can become successful entrepreneurs.

Willingness to take risks may be harder to measure because only the financial risk that entrepreneurs take is quantifiable. Other gambles that pertain to their personal lives and health are impossible to measure currently (Chell, 2008). However, scientists are making efforts to determine how they can achieve this in order to provide more concise information on this aspect of entrepreneurship. By so doing, the extent of risk taking behaviour may be associated with the success of individuals as entrepreneurs. The mentioned development enables people to make sense of entrepreneurship and provides information to those looking to develop such attributes.

Schermerhorn (2010) asserts that when a person possesses talent, he/she needs to hone it in order to thrive as an entrepreneur. This means that individuals born with entrepreneurial characteristics that fail to engage in self-development activities such as training and education are not likely to prosper as businesspersons. Possessing innate skills and attributes, therefore, does not assure one of success. This explains the saying; ‘Hard work beats talent when talent decides to sleep’. However, with continued hard work, the individual possessing the said personality traits will undoubtedly excel in whatever venture they undertake. Alternatively, this indicates that a person who lacks the inherent entrepreneurial traits can develop them and perform even better than one who possesses them but fails to work hard. This allows for the assumption that the inclusion of hard work is imperative in the development of entrepreneurial behaviours, and skills such as conscientiousness, innovation, and human relations.

This school of thought has made efforts to develop entrepreneurship courses. Here, prosperous businesspeople share their experiences and knowledge with individuals interested in taking up entrepreneurial ventures. These courses are developed for a variety of audiences ranging from high school to university students along with people already in the employment sector. This is done in order to foster the spirit of entrepreneurship early on in interested individuals. Cultivating the necessary behaviours and skills when individuals are younger is much easier than when they get older (Testa, 2010). Shefsky (2011) acknowledges that lack of knowledge on entrepreneurship exposes several businesspeople to mistakes.  They would not have made these said mistakes had they received the requisite training in their field. This is because when a person wants to start their own business, they, in most cases, lack the prerequisite expertise, skills, and training to engage in this field productively. Therefore, they need successful entrepreneurs to advice them on what to do and avoid for their business to succeed (Testa, 2010). In so dong, they can learn to develop behaviours such as conscientiousness, risk taking, confidence, innovation, and autonomy (Shefsky, 2011). Potential businesspersons can learn and apply the knowledge and training they receive from their entrepreneurial mentors to form a new generation of successful executives. Therefore, these entrepreneurs would have an opportunity to succeed in their pursuits due to the courses and training that they had previously received.

This school of thought gives people the chance to become entrepreneurs indiscriminately. This would help reduce unemployment and create a breed of businesspeople likely to thrive. This is because successful entrepreneurs would impart essential skills and knowledge pertaining to free enterprise to the next generation of entrepreneurs. In addition to this, there will be a tremendous growth in the economy, which makes this ideology seem even more beneficial.

Conclusion

Most wealthy and successful entrepreneurs possess characteristics such as conscientiousness, confidence, innovation, willingness to take risks, and autonomy. These skills are, therefore important when it comes to gaining profitability in this field that has many challenges. The psychological trait theory holds that entrepreneurs possess the mentioned features innately (Getz, 2013). These set them apart as a unique class of individuals that succeeds in business compared to others that do not possess them. The rival school of thought holds that people can learn the skills and develop the abilities that successful entrepreneurs possess (Getz, 2013). This is through training in entrepreneurship courses and programmes for students in both high school and university as well as those in employment.

Of the two ideologies, the one that holds that entrepreneurship is a skill that people can learn and cultivate holds more weight than its counterpart. This is because flourishing entrepreneurs acknowledge that they would have had an easier time if they had received training on starting one’s own business beforehand (Shefsky, 2011). Further, the development of entrepreneurial courses and programmes, to impart knowledge on free enterprise to individuals shows that people can learn the art of entrepreneurship. This ensures that those interested in this field get the necessary training, and develop the skills and behaviours that would help them do well in it. Discouraging people from pursuing free enterprise because they lack certain innate traits is unfair as there is a chance that they may become successful entrepreneurs if they receive the requisite training and mentorship from thriving businesspersons. Therefore, entrepreneurs are not necessarily born they can be made.

 

 

 

 

 

 

 

 

 

 

References

Chell, E. (2008). The Entrepreneurial Personality: A Social Construction. 2nd ed. Routledge.

Ciavarella, M., Buchholtz, A., Riordan, C., Gatewood, R. and Stokes, G. (2004). The Big Five and venture survival: Is there a linkage?. Journal of Business Venturing, 19(4), pp.465-483.

Fisher, J. and Koch, J. (2008). Born, Not Made: The Entrepreneurial Personality. Praeger Publishers.

Getz, D. (2013). Event Studies. Routledge.

Groenen, P., Koellinger, P., Van der Loos, M. and Thurik, R. (2013). Living Forever: Entrepreneurial Overconfidence at Older Ages. ERIM Report Series Reference No. ERS-2013-012-STR. Erasmus University Rotterdam (EUR).

Kuratko, D. (2013). Entrepreneurship: Theory, Process and Practice. Cengage Learning.

Schermerhorn, J. (2010). Management. Hoboken, N.J.: John Wiley.

Shane, S. (2010). Born entrepreneurs, born leaders. New York: Oxford University Press.

Shefsky, L. (2011). Entrepreneurs Are Made Not Born. McGraw Hill Professional.

Stokes, D., Wilson, N. and Mador, M. (2010). Entrepreneurship. Australia: South-Western Cengage Learning.

Testa, S. (2010). Establishing entrepreneurship education with a bottom-up approach: insights from a longitudinal case study. IJESB, 10(2), p.241.

Originally posted 2017-10-08 00:05:10.

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