Business : entrepreneurs born or made?

final yr


Potential exam q's:

Q1)- Are entrepreneurs born or made? 

• Entrepreneurs are born - inherent internal characteristics. Focus on individual attributes -  personality traits, entrepreneurial cognition and intentions, and entrepreneurial learning. Understanding how individual characteristics interact to shape  entrepreneurship decisions. • Certain amount of ‘making’ is possible - external influences such as family environment, education, social class, gender, age etc.

• Different approaches – economic, personality based, sociological, behavioural, and integrated – try to explain why some individuals are more entrepreneurial than others.  

- Better students will be able to start by exploring and examining trait theories, their criticisms and will make the case for processual perspectives on entrepreneurship, the role of knowledge and learning in the entrepreneurship process and the influence of the external environment.

- Weaker students will fail to give a rounded evaluation of this evidence and provide poor unsubstantiated conclusions.

- Make argument for and against all perspectives. 

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The different perspectives

- Many theorists associate entrepreneurism with starting up a business but you dont have to start a business to be entrepreneruial and starting a business may just be a contingent outcome of entrepreneurship. Focus is often on writing business plans rather than discovery, evaluations and exploitation of opportunities. Opportunity identification =emergence/resources/decision making/innovation=realising value. There are a number of dominant perspectives on entrepreneurship that give rise to huge debate in light of their ambigious and confusing natures. 

1. The Functional Perspective: early theories of entrepreneruship originate in the field of economics. Primary objective = define the entrepreneurial function in order to encapsulate activities and behaviours that are characteristic of entrepreneruship (Casson 1982). The functional aspect leads with a conceptualisation of the entrepreneurs interaction with his environment i.e. what the entrepreneur actually does. Nolan Bushnell: 'the critical ingredient is getting off your but and doing something. It's as simple as that. Many have ideas, but there are few who decide to do something about them now. The true entrepreneur is a doer, not a dreamer.' (a preference for action?)

2. Dyanimic Learning Perspective: Goes beyond start up stage of a business to consider the complex ways in which entrepreneurs learn to adapt as the company grows. This perspective has important implications for the role of entrepreneurship in established/larger firms. 

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The different perspectives 2

3. The Personality Perspective: certain individuals possess a distinctive range of personality characteristics which are stable and enduring to predispose them to entrepreneruial activity. Such charactertistics include: need for achievement, internal locus of control, risk taking and self-efficacy. Heavy criticism on this trait basis in light of the static nature of this approach with little or no room for those concerned to develop, learn and change (Gartner 1988). 'There is such thing as the entreprenerial personality which is both socially constructed and reliant on a set of consistent behaviours, skills and competencies (Chell, 2008)

-   Alan Gibb 2005 'Towards the Entrepreneurial University' replaces the dominant model of the entrepreneur 'Frankenstein' born out of corporate business concerns with an alternate model with entreprenuerial values at its heart which are associated with the ways of doing things, organising things, feeling things, communicating things, understanding and thinking things and learning things. Including a strong sense of independence, ownership, belief that rewards come with such effort and belief in being able to make things happen!

Low and Macmillian in 1988 said identifying an entrepreneurial personality is an inherently futile task and has given way to seeing personality characteriscs being ancilliary to behaviour (Cope 2005). 

- Doesnt explain why some engage/some dont. Static! (Aldrich 1999 'trait=empircal dead end')

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The different perspectives 3

4.  The Behavioural Perspective: in response to the trait theory criticism, a more comprehensive model has been developed that is focused on a process-based view of new venture creation (Gartner 1995). Behavioural has advantage of joining up behaviour with influences from the environment. Personality characteristics are ancillary to behaviour (Cope 2005). Focus on this perspective is on what entrepreneurs DO rather than WHO they are (Gartner 1998). The aim = explain the 'functions, activities and actions associated with perceiving opportunities and the creation of organizations to pursue them (Bygrave and Hofer 1991). Focus on behaviour when training and educating is the focal point. Endorses view of peoplism and also resonates the risk-taking image. Failure fear=largest barrier to entrepreneurship in UK (Harding 2005) which suggests non-entrepreneurs=more passive and risk adverse. 

- Gibbs entrepreneurial behaviours: opportunity seeking, initiative taking, ownership of development, commitment, autonomy, achievement orientation, risk taking. 

-   Critique: Fails to take into account the ability of entrepreneurs to learn and adapt once the business is established (Cope, 2005)

5. External influences: age, gender, education, family, wealth etc. impact on 'making it possible' and impact on whether someone may choose entreprenuerism. 

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