CHAPTER TWO

Identifying Entrepreneurial Characteristics

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Chapter outline

Characteristics of Successful Entrepreneurs

Entrepreneur Self Assessment

The differences between Businessmen, Managers and Entrepreneurs

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Characteristics of an Entrepreneur a view point ………..

Ability to deal with a series of tough issues

Ability to create solutions and work to perfect them

Can handle many tasks simultaneously

Resiliency in the face of set-backs

Willingness to work hard and not expect easy solutions

Possess well-developed problem solving skills

Ability to learn and acquire the necessary skills for the

tasks at hand

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Characteristics ………….

42 often attributed characteristics in the

Encyclopedia of Entrepreneurs!!!!!!!!!!!!!!!!

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Characteristics of an Entrepreneur… ..

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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-3rd Ed. Prentice Hall, 2007

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Common characteristics associated with entrepreneurs by John Kao

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1. Total commitment,

determination &

perseverance

6. Realism & a sense of humor

2. Drive to achieve & grow 7. Seeking & using feedback

3. Opportunity & goal

orientation

8. Internal locus of control

4. Taking initiatives & personal

responsibility

9. Calculated risk taking & risk

seeking

5. Persistent problem solver 10.Low need for status & power

11.Integrity & reliability

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According to Kuratko & Hodgetts ………

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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)

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21st Century characteristics of entrepreneurs

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1. Recognize & take advantage

of opportunities

6. Hardworking

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)

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A different classification

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Desirable attributes

Core attributes

• Commitment & determination• Leadership

• Opportunity obsession• Tolerance of risk

• Ambiguity & uncertainty• Creativity, self-reliance

•Adaptability, motivation toexcel

Capacity to inspire

Values

Energy, health &

emotional stability

Creativity & innovation

Intelligence

The non-entrepreneurial attributes

Perfectionist

Counter / dependence

Knows it all

Being ‘macho’

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A Psychological approach

Various branches of psychology have attempted to find traits associated with successful entrepreneurs such as;

• 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

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A final set of Entrepreneurial Characteristics ????

Page # 12

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Entrepreneurial Skills

What is a ‘skill’ ???????

- Knowledge which is demonstrated by action.

- It is an ability to perform in a certain way

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Entrepreneurial Skills

Some General management Skills

Strategy Skills

Planning Skills

Marketing Skills

Financial Skills

Project Management Skills

Time Management Skills

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Entrepreneurial Skills

Some Human Relationship Skills

Leadership Skills

Motivation Skills

Delegation Skills

Communication Skills

Negotiation Skills

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Entrepreneurial Skills

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Entrepreneurial Performances

General Management skills

Human Relationship skills

Individual Knowledge Personal Motivation

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Entrepreneurs, Businessman & Managers

Are these words synonyms???

Are they same or different in their traits?????

Are they doing the same thing?????

If not what are the differences?????

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Types of Businesses

Owner Manager

Entrepreneur

Manager

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Entrepreneurs Vs. Small Businessman

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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

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Entrepreneurs Vs. Managers

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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

Differences in character traits………….

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Entrepreneurial focus Vs. Administrative focus

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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

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Entrepreneurial focus Vs. Administrative focus

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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

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Entrepreneurs Vs. Conventional Managers

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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

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Characteristic differences between Entrepreneur & Manager

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Characteristic Entrepreneur Manager

Behavior Characterized by Desire for Control Delegation of Authority

Management Style One-Man Show Management Team

Driving Force Creativity - InnovationEstablish and Preserve the Status Quo

Organizational Growth Rapid Reaction Strategic Planning

Organization Structure Informal, Flexible Organized

Decision-Making IntuitiveCollect 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"

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Types of Businesses

Owner Manager

Entrepreneur

Manager

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Often trade or craft based. May not grow to any larger size

Pursuit of growth & personal wealth through value addition

Manages a business belongs to someone else. Will build an organization putting in appropriate controls

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Life Cycle of Organizations

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Starting

Hi-growthDecline

Survival

Entrepreneurial Managerial

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Entrepreneur Self-assessment

Key self-assessment instruments proposed by Robinson, Stimpson, Huefner and Hunt (1991)

Key idea is to check how much Entrepreneurial spirit is available inside individuals…….

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Entrepreneur Self-assessment

Let’s take a self-assesment test!!!!!!!!!!!

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