confidmce/drive; di^enge taker; moderate risk taker
X
1982 Dunkelberg & Cooper
Growth oriented; independence oriented; (raftsman oriented
X Source: Garland, Hoy, Boulton & Garland ( 1984, p.356)
Others have also made efforts to list entrepreneurial characteristics [for example. Nelson and Neck, 1981; Barrow, 1986 (cited by Bums, 1989); Hisrich, 1986; and Gibb, 1987; to mention just a few]. But they include all the items already listed in Table 6.1 and any new attempt would probably be mere replication of items already listed. Some of the
characteristics that have been reported in a relatively consistent manner in literature have been discussed by Brockhaus (1982) and Brockhaus and Horwitz (1986). They include need for achievement, internal locus of control, moderate risk taking propensity, problem solving style and innovativeness and value orientation.
One major concern on entrepreneurial characteristics is whether they are innate or can be nurtured through training. Various attempts have been made to describe how entrepreneurial attitudes and behaviours develop. The different propositions that have been put forward at different times can be reduced to three conceptual models (Chell, 1985): the psychodynamic model of Kets de Vries (1977); the social development model of Gibb and Ritchie (1982); and, the trait model closely associated with McClelland (1961). The psychodynamic model suggests that considerable early life experiences of family problems, hardships and other deprivations shape the adult's psychological attitudes and behaviours and lead to the creation of an enterprise as means of coping with the psychological tensions created by early life experiences. Thus some entrepreneurial characteristics, especially, need to assert control and independence, are a consequence of early life experiences.
The trait model exemplified by research by McClelland suggests that entrepreneurs possess some 'inborn' character traits that distinguish them from other individuals. Entrepreneurial characteristics such as need for achievement and to take personal responsibility, autonomy, risk taking, problem solving, innovation and creativity are said to be created at the early age and influenced especially by child-rearing practices and parents personality types.
The social development model opposes the above traditional models which attribute formation of entrepreneurial personality to solely in-bom character traits and inner driving force created by early life experiences, ignoring environmental influences in adult life. On the contrary, the social development model posits that individuals change throughout the course of life as a result of transactions with other individuals and groups in their on-going social life. Entrepreneurship can therefore be better understood in terms of the types of situation encountered and the social groups to which individuals encountered. That is,
"...entrepreneurship is seen as a social process... cl early open to influence at a number of levels: through parental and family aspiration and support; through primary and further education; through vocational training; through job and career development in and between companies; and generally
through presentation of opportunities in adult life." (Gibb and Ritchie, 1982, p. 41).
Furthermore, in the traditional models, the possibility for policy intervention is limited as the process of entrepreneurship is seen as so individualistic as to be largely outside the scope of external (governmental and industrial) intervention. But the social development model suggests the possibilities of influencing the creation of entrepreneurs by application of appropriate instruments at various social levels to stimulate an ’enterprise culture'.
Chell (1985) has carried further the situationist perspective of the Gibb and Ritchie's social development model by incorporating more recent development in psychological theories which stress the use of 'appropriate person variables' rather than traits to explain behavioural patterns. Appropriate person variables are described as a set of 'cognitive social learning variables' which are the products of the individual's life history and which regulate the impact of new experiences on the individual. It follows therefore that because 'appropriate person variables' differ between persons and situations, there will be differences between entrepreneurs, influenced by differences between business environment and circumstances. Furthermore, each individual is on a constant learning curve in relation to their economic involvements. Hence people do not have fixed entrepreneurial personalities but rather define and act in relation to succeeding experiences (Curran, 1988, p.20).
The models proposed by Chell (1985) and Gibb and Ritchie (1982) underline the potentials of external interventions to activate and develop entrepreneurial qualities at various stages of life. In addition, they underscore the relevance of continuing management training and education to facilitate development of appropriate entrepreneurial competencies necessary to adequately cope with the situations that will emerge as the business evolves. Gill (1985) confirmed that business owners who participated in start-up courses felt ill- prepared for the harsh realities of running a real business and many desired a continuing educational support. Thus according to Gibb (1987; 1990), though everyone possesses some degree of entrepreneurial attributes, more entrepreneurial behaviour can be developed by learning on- or off- the-job. This is necessary in order to meet the needs determined by the emerging nature and scale of business, the circumstances and environment within
which the business operates. Ibrahim and Goodwin (1986) have also concluded from their studies that learning, particularly through experiential exercises, may be the key to developing entrepreneurial behaviour.
Bums (1989) also noted that the entrepreneurial characteristics required to launch a business successfully are not often those required for growth and even more frequently not those required to manage it once it grows to any size. He similarly recognised the view earlier espoused by Chell ( 1985) that the role of the entrepreneur needs to change with the business, as the business develops and grows. However, he further noted that all too often, the entrepreneur is not able to make the transition. Consequently, because of the interaction of the personal characteristics of the entrepreneur with the managerial situation he faces, the business fails. Those personal characteristics that contribute to business failures have been earlier discussed in the previous chapter.
But of significance is the fact that personal problems such as unwillingness to delegate responsibility, excessive optimism, reluctance to seek help, inflexibility to change and exaggerated opinion of business competence based on knowledge of some skills have been identified (Larson & Clute, 1979) These weaknesses are mostly derived from the generally accepted primary entrepreneurial characteristics, that is, desire for independence, autonomy and self-confidence, need for achievement, power, control and personal responsibility. These personality characteristics will definitely inhibit external intervention. Churchill (1983) made a similar observation about how characteristics such as self- confidence, a sense of urgency, superior conceptual ability, a low need for status, and an objective approach to interpersonal relations could be detrimental as the business grows and succeeds. It is believed also that these factors might make it difficult for the entrepreneur to delegate responsibility and to engage in internal bargaining that becomes necessary when more individuals join the organisation and consensus is necessary. Tait (1987) has, in addition, confirmed that perceptions of and attitudes to educational assistance may be negatively influenced by the desire for independence on the part of the owner-manager. Thus personal characteristics of small business owner-managers would influence their responses to training and might also explain their general antipathetic responses in this respect.
Age
The age distribution of small business owners has been found to be mostly between the age interval of 25 and 54. This is confirmed by the age distribution of samples in the various studies compared by Cromie (1987) and the General Household Survey (OHS) cited by Goss (1991). However, the years between 25 and 40 have been frequently found to be the age when the entrepreneurial decision is most likely to be made (Brockaus, 1982). Liles (1974), described this age interval to be the 'free choice period' when an individual has obtained sufficient experience, competence, and self-confidence but has not yet incurred financial and family obligations or a position of prestige and responsibility in a large company. Though Goss recognised the existence of an 'age launch window', this seemed to him to be occurring between the early thirties and mid-forties. He argued that at this age period, life-cycle factors such as occupational experience, access to capital and stable domestic responsibilities appear to be in favour of the development of a small business career.
There is no conclusive evidence on the relationship between age of the small business owner and the firm's success or failure potentials. For instance, the findings of Plaschka (1990) contradicted that of Brockhaus (1980). However, it is indisputable that age is a critical factor in the process of learning and training. Ament (1990) has noted that it is well documented that by the time we reach adulthood, we have developed our own unique and well-established learning style. This definitely explains the well established dynamic field of adult education that is concerned with understanding the adult learning process. The age distribution of small business owner-managers indicates that they are generally above the average age of college/university students. Therefore, the traditional methods for teaching college-age students will not apply to the small business owner- managers if effective and meaningful learning is to take place. Unfortunately, there is the paucity of research in the area of adult education and its impact on educating the entrepreneur (Weinrauch, 1984). But it is well recognised that providing effective education for the adult entrepreneur will have profound implications on training content and delivery systems. Training characteristics and adult learning principles will be discussed in greater detail later.
Though experience is frequently regarded as a substitute to formal education, it has been noted that reliance on learning by experience can be slow, costly, even fatal to a small business (Tait, 1987). Deeks (1976) has also observed that managers do not learn by experience unless the experience is subjected to some form of scrutiny or analysis. In addition, he noted that the motivation to learn tends to decline with increasing age. This has been confirmed in the study by Keisner (1984) which showed that the older the owner- managers are, the less they seem to make use of training. Similarly, Bowser (1981) observed that it was the slightly younger ones among the minority entrepreneurs of United States that sought and received management assistance. It follows therefore that age will influence perception of the importance of management training as well as its uptake.
Level o f formal education
It is generally held that small business owner-managers have little formal education. There is a common belief that they are less educated than the general population (Brockhaus, 1982). Some studies have shown, on the contrary, that their educational attainment is no less than that of the population (Tait, 1987); it may also exceed that of the average person (Brockhaus & Horwitz, 1986); and it may be increasing (Douglas, 1976; Ritchie, Eversley & Gibb, 1982; Storey, 1982; and Cromie, 1987). Studies have also shown that the extent of formal education of small business owner-managers varies between countries. For example, Watkins (1982) noticed that the German owner-managers ceased full-time education significantly later than their British or French counterparts. In addition, a comparison of the samples of owner managers used in various entrepreneurial studies in Britain and United States of America indicated that a higher proportion of owner managers in the United States have higher academic qualifications, up to a university degree, while their British counterparts do not usually have more than university admission qualifications.
Though it is possible for totally unqualified and inexperienced people to start up in business, it has been generally noted that the more complex and technological oriented the enterprise, the more important high academic qualifications become. Storey (1982) observed in his study of some founders that those with a degree or a professional
qualification among them were concentrated in professional services. The largest concentration of unqualified firm founders were found in the 'other' sector where transport undertakings and hairdressers predominate. However, this study showed lack of association between educational qualifications and business success. This was in line with earlier findings by Douglas (1976) which have been confirmed more recently by Plaschka (1990). But on the contrary, Gudgin and Fothergill (1979) concluded that there is some evidence to suggest that possession of a degree (or equivalent) may lead to better business performance. Some studies of African entrepreneurs cited by Neck (1977) showed similar inconclusive evidence on the impact of educational qualifications on business performance despite the fact that many business owners were virtually illiterates. Akeredolu-Ale (1975) found that Nigerian entrepreneurs with higher education were not more successful than those with lower education. But he concluded, however, that a minimum level of formal education is required for effective participation in modem business. Similarly, Blake et al (1985) pointed out that high academic qualifications are necessary in some industries but never a sufficient condition for entrepreneurial success. Thus the impact of educational qualifications on business success is not conclusive.
Notwithstanding, Brockhaus (1982) has argued that education may have an influence on other crucial variables like open-mindedness, business ideology, information processing and general performance. Tait (1987) showed also that there is a significant relationship between the length of exposure to formal education and perception of the importance of formal management education. She found that those who stayed longer in the educational system were more receptive to improving their management skills through formal education provision. This confirmed similar findings by Bowser (1981); Kiesner (1984); and Reid (1987) that those with more years of formal education are more willing to participate in management training.
It is obvious that academic background will influence management development needs. Reid (1987) showed that a higher number of respondents with engineering and technical backgrounds are interested in participating in management training. Deeks (1976) reaffirmed the common belief that the level of education of owner/managers will determine their management training needs by emphasising that management training be geared to the educational levels and abilities of the owner-managers. Ironically, Nelson (1983) did not
find any significant difference in training courses requested by owner/managers despite differences in their educational level. This, however, may be as a result of weaknesses in owner/managers’ analytical ability (Gibb, 1983), hence their inability to perceive accurately their training needs. Though Reid (1987) recognised that owner-m anagers have idiosyncratic preferences for programme attributes such as training agent, programme schedule, programme fee and the method of communication; he failed to show how their preferences would be influenced by their level of educational qualifications.
Previous occupational/employment experience
The impact of previous occupational/employment experiences on a small business owner-manager has been given considerable attention in literature. It is held that these experiences influence their decision to start a business and also frequently affect their personality more deeply, extending into their everyday conduct of the business itself (Goss, 1991). These experiences have been grouped by Goss into two broad patterns of influence: formative and reactive.
"Formative influence refers to those situations where the work experience of an individual provides that person, as a matter of course, with the skills and abilities necessary to make starting a business appear a viable and attainable possibility. These skills and abilities may be of many kinds, either practical, managerial, financial, attitudinal or a combination of all.... If formative influence is exerted in a positive direction - by opening a 'window of opportunity' or by building business competence - reactive influence arises from negative experiences. It represents a rejection of, or escape from, a situation regarded as intolerable and/or unfulfilling. Small business ownership, in this case, represents a means of escape from unsatisfactory work experiences" (Goss, 1990, p. 55).
The impact of formative influence on small business creation and performances is however inconclusive. It is commonly held that the majority of owner-managers had occupational experiences in the small business sector prior to founding their own businesses in the same sector of the economy as their previous employment. However, while many studies (for example, Johnson and Cathcart 1979; Gudgin, Brunskill and Fothergill, 1979; Cooper, 1973; Cross, 1981; Storey, 1982) have confirmed these common assumptions, few (for example, Gibb & Ritchie, 1982; Cromie, 1987) did not support the common assumption that would-be entrepreneurs must come from a small business background. Furthermore, while many studies (for example, Johnson and
Cathcart, 1979; Cross, 1981; and Storey, 1982; to name a few) have shown that majority of entrepreneurs, especially in technically-based businesses, have prior experience in a business related to the type founded, Watkins (1982) and Cromie (1987) observed in their studies that the work experience of their samples did not prepare them adequately for founding and running their own businesses. Notwithstanding, evidence seem more in support of the notion of small businesses as better incubators of new small business founders rather than the larger business sector.
Studies have shown that businesses founded by those with managerial experience are more likely to show higher growth rates (Cross, 1981, Stuart & Abetti, 1990). But the extent of managerial skills and competencies acquired by owner-managers through their previous employment in small businesses is much in doubt. Deeks (1976) noted that managers do not learn by experience unless the experience is subjected to some form of scrutiny or analysis. It is also held that " a benefit of small-firm employment is that employees are unlikely to be over-specialised and should be able to understand all or a major part of the management process" Cromie (1987, p. 34). But many of the managerial functions may be unavailable to employees, being the sole prerogative of the owner (Goss, 1991). In addition. Storey (1982) observed that experience of all aspects of running the business are likely to be available to an employee provided he does not appear to threaten the power position of the owner-manager. This was confirmed in studies by Watkins (1982) and Gill (1985) which showed that owner-managers are reluctant to develop the technical and managerial competence of their staffs as a result of genuine fear that they might leave shortly to start a business in competition with their previous employers. But entrepreneurs who had prior managerial experience in larger firms would have had greater opportunities for management training and development since such fear would not exist. Tait (1987) had shown that larger firms are more likely to provide management training to their employees who usually constitute the next generation of potential small business owner-managers. Thus, though owner-managers with previous occupational experiences in small businesses might have developed adequate technical skills required for their nature of business, many of them would not have developed the managerial expertise necessary to run their own businesses effectively. That lack of management experience and competencies subsequently result in their business failures is well-documented.
It had been observed that lack of exposure to management training and development in previous employments will subsequently affect owner-managers' perception of the relative importance of formal training to their management development and their uptake of training (Deeks, 1976). Bowser (1981) has shown that minority entrepreneurs in the United States who have had more management experience are more interested in receiving management assistance. Thus previous work experience would affect interest in training