Personality Approach to Entrepreneurship

Entrepreneurship can be seen as one of the drivers of the economic development of many countries. Numerous approaches to entrepreneurship have been used in theory and practice.

The personality approach to entrepreneurship was widely utilized in the second part of the twentieth century. Based on this paradigm, a person’s psychological traits predict their engagement in entrepreneurial activities (Hisrich & Kearney, 2014; Obschonka Stuetzer, 2017). However, after the 1980s, this approach faced considerable criticism as it provided little insight into the role external factors played in the process (Mitra, 2020). It was argued that people had unique sets of traits, so it could hardly be possible to generalize the traits making entrepreneurs (Obschonka, Moeller, and Goethner, 2019). This trait-based approach does not explain why people start entrepreneurial activities at specific points in their lives (Zhou et al., 2019).

The case of Henry Ford can illustrate the limitations of the personality approach. Henry Ford unarguably possessed such entrepreneurial features as risk-taking and achievement needs (Farrukh et al., 2018). However, the ecological approach can provide more insights into the reasons for Ford’s success. The country was facing major technological shifts and the transformation in consumption patterns, which made Ford’s innovations popular and profitable in those days. This approach to entrepreneurship has been embraced due to its focus on external factors affecting entrepreneurs’ success, such as the social and political peculiarities of the region. However, it lacks the focus on people’s motivations to start a business.

Economic and cultural approaches can also be instrumental in analyzing the nature of entrepreneurship (Drucker, 2015). Jack Ma’s case is an example of the effectiveness of these approaches. The founder of Ali Baba, a Chinese version of Google, became the largest platform for Chinese factories selling their products to the rest of the world. The economic growth of the country and the focus on profit made the platform and the entrepreneur successful (Obschonka et al., 2019). Cultural norms and patterns are found to be more influential than personality traits in the Asian region (Obschonka et al., 2018; Molino et al., 2018). These paradigms are widely used due to their ability to explain the factors affecting the success of a business. However, these approaches still lack attention to individual features of entrepreneurs who are key figures in the process.

Reference List

Drucker, P. F. (2015) Innovation and entrepreneurship: practice and principles. Abingdon: Routledge.

Farrukh, M. et al. (2018) ‘Entrepreneurial intentions’, Asia Pacific Journal of Innovation and Entrepreneurship, 12(3), pp.399-414.

Hisrich, R. D. & Kearney, C. (2014) Managing innovation and entrepreneurship. London: Sage.

Mitra, J. (2020) Entrepreneurship, innovation and regional development. 2nd ed. Oxon: Routledge.

Molino, M. et al. (2018) ‘Personality and social support as determinants of entrepreneurial intention. Gender differences in Italy’, PLOS ONE, 13(6), pp. 1-19.

Obschonka, M. and Stuetzer, M. (2017) ‘Integrating psychological approaches to entrepreneurship: the Entrepreneurial Personality System (EPS)’, Small Business Economics, 49(1), pp. 203-231.

Obschonka, M. et al. (2018) ‘“Confucian” traits, entrepreneurial personality, and entrepreneurship in China: a regional analysis’, Small Business Economics, 53(4), pp. 961-979.

Obschonka, M. et al. (2019) ‘Big data methods, social media, and the psychology of entrepreneurial regions: capturing cross-county personality traits and their impact on entrepreneurship in the USA’, Small Business Economics, 55(3), pp. 567-588.

Obschonka, M., Moeller, J. and Goethner, M. (2019) ‘Entrepreneurial passion and personality: the case of academic entrepreneurship’, Frontiers in Psychology, 9, pp. 1-15.

Zhou, W. et al. (2019) ‘Pattern versus level: a new look at the personality-entrepreneurship relationship’, International Journal of Entrepreneurial Behavior & Research, 25(1), pp. 150-168.