Entrepreneurship as a personality trait
Vecchio (2003) sees entrepreneurship as a personality trait, and has identified five traits of an entrepreneur:
- The propensity to take risks;
- the need for achievement;
- the need for autonomy;
- self-efficacy; and
- an internal locus of control.
These traits combine with the concept of a person-system fit (Miner, 1990) where entrepreneurial people will seek out entrepreneurial roles. Vecchio also highlights the growing literature on cognitive framing and biases relevant to entrepreneurs, which includes overconfidence, hubris, escalation of commitment and counterfactual thinking (Vecchio, 2003).
This personal dimension to entrepreneurial behaviour has been well studied. Knight (1921) describes the entrepreneur as the one who undertakes uncertain investments - those investments for which the future returns and the associated probability distribution are unknown. Schumpeter claimed entrepreneurs are leaders and major contributors to the 'process of creative destruction'. Khilstron and Laffont's (1979) equilibrium model also focuses on behavioural traits of entrepreneurs, and posits that entrepreneurs are people who prefer uncertainty (Venkataraman & Shane, 1997).
The major theme that unites these descriptions is that entrepreneurs prefer higher levels of uncertainty and ambiguity than regular leaders (Amit et al., 1993). These scholars see entrepreneurship as personal behavioural qualities, and believe entrepreneurs have intrinsic traits that set them apart from others. Leadership theory also has a trait-based model known as the "better man/woman theory", and many trait theorists believe that leaders are born, not made (Klenke, 1996). In one popular literature review, a leader's traits were described as follows:
"A leader is characterised by a strong drive for responsibility and task completion, vigour and persistence in pursuit of goals, venturesomeness and originality in problem solving, a drive to exercise initiative in social situations, self-confidence and sense of personal identity, willingness to accept consequences of decision and action [...] ability to influence other persons' behaviour, and capacity to structure social interaction systems to the purpose at hand" (Stogdill, 1974).
A most important connection is that Stogdill's characterisation of a leader's traits maps closely to Vecchio's entrepreneurial traits, highlighting the close and interconnected nature between the two fields of study.
Read part three: Entrepreneurship as a leadership style
This is the part of a series of articles exploring the relationship between entrepreneurship and leadership, adapted from research I performed for my Master of Business.
The complete series is listed below:
- Is Entrepreneurship merely a special case of leadership?
- Entrepreneurship as a personality trait
- Entrepreneurship as a leadership style
- Entrepreneurship as an activity
- Entrepreneurship as a skill
- Entrepreneurship as corporate culture
- The rise of the Entrepreneurial Leader