Theorists on the Subject of Entrepreneurial Characteristics Essay

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theorists on the subject of entrepreneurial characteristics and includes reflection on how my experience and personality reflect these particular characteristics.

Self-Efficacy Theory ( Bandura, 1986), otherwise called Social Cognitive Theory (SCT) believes that the two key determinants of behavior are perceived self-efficacy and outcome expectancies. In other words, the extent to which the person feels able to actualize / implement behavior, and the optimism with which he perceives the consequences (both negative and positive) of performing the behavior will motivate him to perform and likely he will succeed. The two together play a key role in imbuing confidence in the person, giving him courage -- which is what an entrepreneur needs -- and enabling him to take risks.

I am not much or a risk-taker myself, but the army was a great place to develop self-efficacy. Through reiteration of certain tasks, and the realization that I could do the tasks despite their seeming difficult at first, I was prompted to go ahead and perform similar tasks in the future.

Individuals who have a powerful sense of self-efficacy can change their circumstance even when impeded. It is this very sense of empowerment -- of feeling the ability to act and to change matters -- that propels them past inertia and causes them to persist despite challenges. This is a valuable quality for an entrepreneur to possess.

2. Rauch & Freese (2007)

Entrepreneurship is far more than a cognitive passive stance of perceiving and interpreting the world and offering one's services. Rather, it can be seen in a far more inspirational way as the entrepreneur perceiving a need in the world, and then changing the world by setting about to offer that opportunity. Action and detection are combined.

Rauch & Freese (2007) protest against the misconception that "entrepreneur' is a term that can only be applied to the successful business person. Rather, the term should not be reserved to outcome alone, since 'entrepreneur' is a process of thinking, detecting opportunities, and acting to make those opportunities come about.

Similarly, "entrepreneur' need not be applied to business organizations alone but can be more generally applied, too, to any startup organization including social institutions. "Entrepreneur' is the process of deciding and acting within the context of providing the world with a needed service or product.

I may be able to extend "entrepreneur" to the military by army having recognized the factor that I was needed for the army and I, therefore, signed up. My doing so involved the act of my realizing the need and my acting to fulfill that need. Whether the world profited by my conscription is another question

3. Zhao & Siebert (2006)

The authors believe that entrepreneurship may be an innate quality and that certain personality characteristics may help some individuals to be more successful than others as entrepreneurs. In their 2006 study, for instance, Zhao and Seibert used meta-analytical techniques to examine the relationship between personality and entrepreneurial qualities. Personality characteristics used in previous studies were categorized according to the Big Five model of personality. Results found that significant differences existed between managers and entrepreneurs when the 4 personality dimensions were employed with entrepreneurs receiving higher scores on the qualities of Conscientiousness and Openness to Experience but lower scores on Neuroticism and Agreeableness. No differnce was found in regards to Extraversion, possibly indicating that Extroversion is not a necessary quality for an entrepreneur.

In line with other studies, they also indicate that the personality construct with the strongest prognosis for entrepreneurship was Conscientiousness, in other words the quality most important for entrepreneurial success is achievement-orientation and motivation.

This may be of hope to myself, since I am not generally much of an extrovert, and certainly not a risk-taker. However, I am conscientious and therefore, according to Zhao & Siebert (2006) still stand a chance for being a successful entrepreneur.

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Costa and McCrae (1992)

Personality theorists have attempted to reduce personality to certain core characteristics. One of the most popular of all these categories is the Big Five factor model that reduces personality to five traits: extraversion, neuroticism, agreeableness, conscientiousness, and openness to experience. Costa and McCrae (1992) see each of these traits as possessing six domains of sub-categories. Individuals who are extroverts are, likewise, gregarious, assertive, warm, positive, active, and excitement seeking. Neuroticism extends to the 6 sub-units to which an individual exhibits anxiety, depression, hostility, self-consciousness, impulsivity, as well as experiencing vulnerability towards events and is unable to deal with difficult life challenges.

The authors further divided Agreeableness into six factors thusly: trust in other individuals, open and honest communication style, altruist and cooperative behavior, compliance, modesty and humility, tender and sympathetic attitude. Conscientiousness refers to: individuals competence, methodical -- the extent to which the individual prefers order and structure, dutiful, motivated to achieve goals, disciplined, and deliberate

Finally, openness to experience relates to the extent to which individuals are open to feelings, new ideas, art, as well as creativity, values, and innovation. Open individuals prefer novel, diverse, and complex experiences whilst closed individuals prefer the standardized, familiar tasks. Entrepreneurs belong in the former category, as well as displaying the 6 traits of conscientiousness.

As regards myself, I am not sure how much is innate and how much given to me from my experience. The Army (and other experiences) obviously taught me a lot, and, it seems to me, changed some of my innate traits. I may, for instance, not be naturally anxious or aggressive. Yet, instances in the Army certainly made me such, as well as not always rendering me Agreeable.

Penrose (1959)

Best known for her book "the theory of the growth of the firm," Penrose argued that it is qualities intrinsic to, rather than extrinsic to, the firm that propel its growth. With this argument, Penrose founded the resource-based view.

She believes that the firm has administrative responsibilities (i.e. strategic planning or management) and she sees the firm as a collection of resources (namely, a bundle of human resources, technologies, and other capabilities). It is choice of the application of these resources that determines the extent of the firm's entrepreneurial activity and success.

The resources that are in the firm are constantly changing with some of them, occasionally, not being employed, and some of them not always being used efficiently. Knowledge of this situation can best help managers use their resources in the most effective manner. Consequently, it is knowledge in combination with resources that represents growth and since each firm has different resources, each has its own style and model of growing.

All of us can grow. The sole factor that restrains growth is the human disability of managing a lot of change at one time.

Applying Penrose to myself is difficult. The only way I can do so, is by assenting with her last observation. Much change handicaps me. It has to be small, piecemeal and introduced in comfortable doses.

Kirzner & Schumpeter (1943)

Their classical theories of entrepreneurship have changed the field of entrepreneurial understanding.

Kirzner & Schumpeter (1943) propose five essential theoretical components of entrepreneurship: (1) that there is a differnce between entrepreneurial and rational decision-making processes (2) there is a differnce between entrepreneurship and leadership, management, and capitalism; (3) entrepreneurship exists in all human endeavors; (4) entrepreneurship possesses a causal functionality in that it leads to toehr effects which, in turn, lead to other results; (5) the actual process of the entrepreneurial activity is more important than the entrepreneur actually acting. He or she may sometimes become impatient or frustrated, but as long as he is treading the path that is more important.

As regards myself, I find most of the authors' observations encouraging: firstly, that I can.....

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