CHAPTER TWO Identifying Entrepreneurial Characteristics Chapter outline n

CHAPTER TWO Identifying Entrepreneurial Characteristics

Chapter outline n Characteristics of Successful Entrepreneurs n Entrepreneur Self Assessment n The differences between Businessmen, Managers and Entrepreneurs Villa College 2

Characteristics of an Entrepreneur a view point ………. . n Ability to deal with a series of tough issues n Ability to create solutions and work to perfect them n Can handle many tasks simultaneously n Resiliency in the face of set-backs n Willingness to work hard and not expect easy solutions n Possess well-developed problem solving skills n Ability to learn and acquire the necessary skills for the tasks at hand Villa College 3

Characteristics …………. n 42 often attributed characteristics in the Encyclopedia of Entrepreneurs!!!!!!!! Villa College 4

Characteristics of an Entrepreneur…. . 1. Hard work 8. Information seeking 2. Self Starting 9. Eager to learn 3. Setting personal goals 10. Attuned to opportunities 4. Resilience 11. Receptive to change 5. Confidence 12. Commitment to others 6. Receptiveness to new ideas 13. Comfort with skills 7. Assertiveness Source: Philip A. Wickham, Strategic Entrepreneurship-3 rd Ed. Prentice Hall, 2007 Villa College 5

Common characteristics associated with entrepreneurs by John Kao 1. Total commitment, 6. Realism & a sense of humor determination & perseverance 2. Drive to achieve & grow 7. Seeking & using feedback 3. Opportunity & goal 8. Internal locus of control orientation 4. Taking initiatives & personal responsibility 5. Persistent problem solver 9. Calculated risk taking & risk seeking 10. Low need for status & power 11. Integrity & reliability Villa College 6

According to Kuratko & Hodgetts ……… 1. Commitment, determination & perseverance 10. Integrity & reliability 2. Drive to achieve & grow 11. Tolerance for failure 3. Opportunity orientation 12. High energy level 4. Initiative & responsibility 13. Creativity & innovativeness 5. Persistent problem solving 14. Vision 6. Seeking feedback 15. Self confidence & optimism 7. Internal locus of control 16. Independence 8. Tolerance of ambiguity 17. Teem builder 9. Calculated risk taker Source: Kuratko & Hodgetts (2001) Villa College 7

21 st Century characteristics of entrepreneurs 1. Recognize & take advantage 6. Hardworking of opportunities 2. Resourceful 7. Optimistic 3. Creative 8. Innovator 4. Visionary 9. Risk taker 5. Independent thinking 10. Leader Source: Soo Ji Min, ‘Made not born’, ENTREPRENEUR OF THE YEAR magazine, (Fall 1999) Villa College 8

A different classification The non-entrepreneurial attributes Desirable attributes Perfectionist Being ‘macho’ Core attributes Capacity to inspire Intelligence Knows it all Villa College • Commitment & determination • Leadership • Opportunity obsession • Tolerance of risk Values • Ambiguity & uncertainty • Creativity, self-reliance • Adaptability, motivation to excel Energy, health & Creativity & emotional innovation stability Counter / dependence 9

A Psychological approach n Various branches of psychology have attempted to find traits associated with successful entrepreneurs such as; • • • n Psychodynamic approaches – Freud Biological approaches (Nature) Evolutionary approaches Behavioral approaches Social cognitive approaches HOWEVER, no straight relationship has been found in relations to entrepreneurial traits Villa College 10

A final set of Entrepreneurial Characteristics ? ? n Page # 12 Villa College 11

Entrepreneurial Skills n What is a ‘skill’ ? ? ? ? - Knowledge which is demonstrated by action. - It is an ability to perform in a certain way Villa College 12

Entrepreneurial Skills n Some General management Skills Ø Strategy Skills Ø Planning Skills Ø Marketing Skills Ø Financial Skills Ø Project Management Skills Ø Time Management Skills Villa College 13

Entrepreneurial Skills n Some Human Relationship Skills v Leadership Skills v Motivation Skills v Delegation Skills v Communication Skills v Negotiation Skills Villa College 14

Entrepreneurial Skills General Management skills Individual Knowledge Entrepreneurial Performances Personal Motivation Human Relationship skills Villa College 15

Entrepreneurs, Businessman & Managers n Are these words synonyms? ? ? n Are they same or different in their traits? ? ? n Are they doing the same thing? ? ? n If not what are the differences? ? ? Villa College 16

Types of Businesses n Owner Manager n Entrepreneur n Manager Villa College 17

Entrepreneurs Vs. Small Businessman Entrepreneur Small Businessman Starts the venture, assumes leadership & expands the venture to fulfill personal goals & attains self-accomplishment Engages in business activities for the purpose of profit support his living & his family Moderate risk taker Low risk taker Takes calculated risks Follows others & invests in tested & proven markets Villa College 18

Entrepreneurs Vs. Managers Differences in character traits…………. Entrepreneur Manager • Opportunistic • Need for independence • Innovative • ‘Ability’ to live with uncertainty & take measured risks • Self confident • ‘Willingness’ to take greater risks & live with greater uncertainty Villa College 19

Entrepreneurial focus Vs. Administrative focus Admin point of view Entrepreneurial point of view What resources do I control? Where is the opportunity? What structure determines our organization’s relationships? How do I capitalize on opportunities? How can I minimize the impact of others on my ability to perform? What resources do I need? What opportunity is appropriate? How do I gain control over these? Source: Howard J. Stevenson & David E. Gumpert, 1995 Villa College 20

Entrepreneurial focus Vs. Administrative focus Admin point of view Entrepreneurial point of view Strategic orientation Driven by controlled resources Driven by perception of opportunities Commitment to Seize opportunities Evolutionary, with long duration Revolutionary, with short duration Control of resources Ownership or employment of resources Episodic use or rent of required resources Management structure Hierarchy Flat with multiple informal network Source: Howard J. Stevenson & David E. Gumpert, 1995 Villa College 21

Entrepreneurs Vs. Conventional Managers Entrepreneur Conventional Manager Views rules as guidelines only Very conscious of rules & taboos Concept of the future based on personal goals. Low threshold for frustration Sensitive to the future & willing to postpone rewards Ambivalent towards control, success, and responsibility. Can be manipulative & exploitative of others Has a powerful need for acceptance Impatient with discussions & theories. Is prone to action & seems impulsive Able to identify problems in any course of action. Makes detailed plans Source: Zimmer & Scarborough, Essentials of Entrepreneurship & small business management Villa College 22

Characteristic differences between Entrepreneur & Manager Characteristic Entrepreneur Manager Behavior Characterized by Desire for Control Delegation of Authority Management Style One-Man Show Management Team Driving Force Creativity - Innovation Establish and Preserve the Status Quo Organizational Growth Rapid Reaction Strategic Planning Organization Structure Informal, Flexible Organized Decision-Making Intuitive Collect Information and Seek Advice Definition of Aims In terms of "Vision" In Commercial Terms Attitude to Money A By-Product Measure of Success Attitude to Risk Calculated Risks Avoidance of Risks Organizational Culture "Entrepreneurial Culture" "Management Culture" Villa College 23

Types of Businesses n Owner Manager Often trade or craft based. May not grow to any larger size n Entrepreneur Pursuit of growth & personal wealth through value addition n Manager Villa College Manages a business belongs to someone else. Will build an organization putting in appropriate controls 24

Life Cycle of Organizations Hi-growth Starting Entrepreneurial Villa College Decline Survival Managerial 25

Entrepreneur Self-assessment n Key self-assessment instruments proposed by Robinson, Stimpson, Huefner and Hunt (1991) n Key idea is to check how much Entrepreneurial spirit is available inside individuals……. Villa College 26

Entrepreneur Self-assessment n Let’s take a self-assesment test!!!!!! Villa College 27