Abstract
Purpose Enterprise success is driven by enterprise actions, which, in turn, is influenced by entrepreneurial behaviours. Behaviours are guided by traits. Hence, it is highly likely that personality traits of entrepreneur are critical to enterprise success. This paper aims at finding the relationship between entrepreneurial traits and enterprise success, identify underlying construct and examine how successful and unsuccessful entrepreneurs differ across traits. It also attempts enterprise profiling based on these traits and test predictive validity of entrepreneurial traits on enterprise success. Design/methodology/approach In this study, 396 micro, small and medium enterprises comprising both successful and unsuccessful ones are studied together across 11 personality traits. Data was analysed using various statistical techniques like co-relation, t-test, factor analysis, cluster analysis and regression to test hypothesis and arrive at given findings. Findings This study finds there is strong positive co-relations between traits and enterprise success. It establishes that successful and unsuccessful enterprises display distinct traits and significantly differ from each other. Entrepreneurial traits affect enterprise success, and the former has significant predictive value on the later (R-squared = 0.866). Practical implications The findings have implications to entrepreneurs in relation to enriching the existing traits and inculcating new ones. Financial institutions like banks can peruse the findings and include traits and behavioural aspects in borrower selection, credit appraisal, evaluation and credit decisioning, to make it more holistic. It also generates scope for further academic research. Originality/value This study contributes to existing literature and validates existing findings. It also finds that traits are contagious in nature, together of which can be grouped to build an entrepreneurs’ traits index which exerts strong influence on enterprise success.
Highlights
Enterprise studies have emerged interdisciplinary, encompassing diversified branches of social sciences like economics, commerce, management and sociology
Psychological approach to the discipline was lagging until 1990s. This was possibly because, researchers believed, personality structure has less to do with business motives of entrepreneur, which was otherwise perceived to be predominately identified as maximising profit
Majority of successful entrepreneurs (92%) are grouped under one cluster (Cluster 1) scoring high across all traits and the reverse in Cluster 2. This supports the findings of Beaver (2002) who argued that success factors and the circumstances to success vary from entrepreneur to entrepreneur. t-Test supported this
Summary
Enterprise studies have emerged interdisciplinary, encompassing diversified branches of social sciences like economics, commerce, management and sociology. Psychological approach to the discipline was lagging until 1990s. This was possibly because, researchers believed, personality structure has less to do with business motives of entrepreneur, which was otherwise perceived to be predominately identified as maximising profit. It was believed that economic theories are only capable of explaining enterprise position (Brandstätter, 1997). Another possible reason might have been that, personality studies of the time were inconclusive due to confusing personality variables, unknown reliability and lack of theoretical justifications (Chandler and Lyon, 2001; Gartner, 1988). Some of the researchers even argued to the extent of abandoning future researches using traits paradigm (Chell, 1985; Gartner, 1988; Robinson et al, 1991)
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