Chapter 4
ENTERPRENEURIAL
PERSONALITY
There are two complementary factors that determine success or failure in a
entrepreneurship.
1. Environment; and
2. Personality of the entrepreneur.
The Environment as a Factor
An entrepreneurship will survive and grow in an environment that is friendly
or akin to it. Nature provides us with examples of what happens to entities living
in certain environments.
Economic environments may be classified as follows:
1. fully supportive of entrepreneurships;
2. moderately supportive of entrepreneurships; and
3. not supportive of entrepreneurships.
Types of Economic The Entrepreneur’s Task
Environments
Those fully easy
supportive of
entrepreneurships
Those moderately
supportive of less easy
entrepreneurships
Those not
supportive of hard
entrepreneurships
Figure 6. Economic Environment and the Entrepreneur
The Entrepreneur’s Personality
What is Personality
Personality refers to the pattern of characteristics that
distinguishes one person from another. It includes the person’s
traits, values, motives, intelligence, and visible behavior patterns.
1. realistic type;
2. Investigative type;
3. Artistic type;
4. Social type;
5. Enterprising type; and
6. Conventional type.
Characteristics of Entrepreneurs
1. Drive; 6. Reasonable risk taker;
2. Thinking ability; 7. Self-confident;
3. Human relations ability; 8. Goal setter;
4. Ability to communicate; 9. Accountable; and
5. Technical knowledge; 10. Innovative
Drive
Success in entrepreneurship becomes possible
when the entrepreneur is self-motivated enough to
pursue his chosen course without relenting even in
the face of adversity.
Thinking Ability
The entrepreneur’s job involves solving problems
and making decisions. When he finds the correct
solutions to problems that confront him and then
makes decisions that are implemented, he comes
closer to realizing his goals.
Human Relations Ability
Three types of persons will determine the
survival and growth of business firms: (1) the
customer, (2) the employee, (3) the third party with
interest in the firm.
Ability to Communicate
Communication skill is a very important characteristic an
entrepreneur must have if success is expected. The ability to
understand and be understood makes it easier for the
entrepreneur to transact business with customers, bankers,
and government officials.
Technical Knowledge
Operating an entrepreneurship requires the performance
of major and minor tasks.
Reasonable Risk-taker
When a person starts a new venture, he has already
begun to assume the risk of business failure. Entrepreneurs,
however, normally do not assume unreasonable risks.
Types of Risk Taker Level of Risk Taken Expected Level of
Benefits
Salaried employee Low Low
Entrepreneur Moderate Moderate
Gambler high high
Self-confident
A person cannot achieve much unless he has sufficient
confidence in himself. In any undertaking, including
entrepreneurship, a person’s belief in his ability leads him to
actual performance and eventual success.
Goal Setter
Goals are very useful motivational tools, especially those
related to accomplishing the objectives of entrepreneurs. A
goal performs the following functions:
1. it directs one’s attention to a specific target;
2. it encourages one to exert effort toward achieving
something specific;
3. It encourages persistence; and
4. it fosters the creation of strategies and action plans.
Accountable
The success of an enterprise will defend much on
the willingness of subordinates to comply with the
wishes of the entrepreneur. Compliance can be
expected if the entrepreneur is accountable enough
to take responsibility for whatever happens to the
firm.
Innovative
A free enterprise economy like ours allows business
enterprises to flourish. This will depend, however, on how
well the public is convinced to patronize them.
Innovative may be the only way the entrepreneur can
achieve the following:
1. penetrate the market;
2. Improve employee turnover;
3. Reduce manufacturing cost; and
4. improve collection rate.
What Motivates People to Become
Entrepreneurs
1. desire to be one’s own boss;
2. desire for financial rewards;
3. desire to create one’s own job security; and
4. desire to improve one’s quality of life.
Desire to Be One’s Own Boss
There are times when an employee sees some good
opportunities for his employer’s business. When he
recommends action to be undertaken and is ignored, the
employee may just proceed to take the opportunity and
organize his own business.
Desire for Financial Rewards
Getting employed is the desire of most people. This is
understandable because many people want sure monthly
income. Some people, however, do not get satisfaction from
a fixed monthly income which, most often, is inadequate.
Some think that they deserve to be properly rewarded for
their skills. The means open to them is entrepreneurship.
Desire to Create One’s Own Job Security
Some employees feel that their jobs are not
secure. They think they could be fired for a variety
of reasons.
Desire to Improve One’s Quality of Life
Oftentimes, employees do not have control over
their work schedules. As a result they could not
fulfill some important family responsibilities.
The Entrepreneur and the Manager Distinguished
The terms “entrepreneur” and “manager” are sometimes
used interchangeably. Although both jobs are useful to the
economy, each performs distinct functions.
Table 8. Activity Emphasis of New Venture
Enterprise Stage Factor Emphasis
I. Prestart-up Business idea human Full
resource capital None
None
Business idea
II. Star-up Human resource None
Capital Limited
Limited
Business idea
III. Early growth Human resource None
Capital Escalating
Escalating
Business idea
IV. Later growth Human resource None
Capital Full
Full
Business idea
V. Stable enterprise Human resource None
capital Full
full
Table 9. The Entrepreneur’s Task vs. The Manager’s Task
Enterprise Stage Activity Entrepreneur’s Manager’s
Involvement Involvement
I. Prestart-up Feasibility of an idea, product,
and service, among others, is
scrutinized. Full None
I. Start-up Business is formed, necessary
capital is generated, facilities and
equipment are purchased,
prototype of products are built,
market is tested. Full None
I. Early growth With limited resources, selling is
undertaken in limited markets. Full None
I. Later growth Structured management, long-
term financing, and facilities
planning are established. Declining Partial
I. Stable enterprise With bigger resources, recurring
sales and profits, selling is
undertaken in bigger markets. none full