Chapter 4

ENTERPRENEURIAL
PERSONALITY
 There are two complementary factors that determine success or failure in a
entrepreneurship.
1. Environment; and
2. Personality of the entrepreneur.
The Environment as a Factor

An entrepreneurship will survive and grow in an environment that is friendly

or akin to it. Nature provides us with examples of what happens to entities living
in certain environments.
Economic environments may be classified as follows:
1. fully supportive of entrepreneurships;
2. moderately supportive of entrepreneurships; and
3. not supportive of entrepreneurships.
 Types of Economic The Entrepreneur’s Task
Environments

Those fully easy

supportive of
entrepreneurships

Those moderately
supportive of less easy
entrepreneurships

Those not
supportive of hard
entrepreneurships

Figure 6. Economic Environment and the Entrepreneur

The Entrepreneur’s Personality
What is Personality
Personality refers to the pattern of characteristics that
distinguishes one person from another. It includes the person’s
traits, values, motives, intelligence, and visible behavior patterns.
1. realistic type;
2. Investigative type;
3. Artistic type;
4. Social type;
5. Enterprising type; and
6. Conventional type.
Characteristics of Entrepreneurs

1. Drive; 6. Reasonable risk taker;

2. Thinking ability; 7. Self-confident;
3. Human relations ability; 8. Goal setter;
4. Ability to communicate; 9. Accountable; and
5. Technical knowledge; 10. Innovative
Drive

Success in entrepreneurship becomes possible

when the entrepreneur is self-motivated enough to
pursue his chosen course without relenting even in
the face of adversity.
Thinking Ability

The entrepreneur’s job involves solving problems

and making decisions. When he finds the correct
solutions to problems that confront him and then
makes decisions that are implemented, he comes
closer to realizing his goals.
Human Relations Ability

Three types of persons will determine the

survival and growth of business firms: (1) the
customer, (2) the employee, (3) the third party with
interest in the firm.
Ability to Communicate

Communication skill is a very important characteristic an

entrepreneur must have if success is expected. The ability to
understand and be understood makes it easier for the
entrepreneur to transact business with customers, bankers,
and government officials.
Technical Knowledge

Operating an entrepreneurship requires the performance

of major and minor tasks.
Reasonable Risk-taker

When a person starts a new venture, he has already

begun to assume the risk of business failure. Entrepreneurs,
however, normally do not assume unreasonable risks.

Types of Risk Taker Level of Risk Taken Expected Level of

Benefits

Salaried employee Low Low

Entrepreneur Moderate Moderate
Gambler high high
Self-confident

A person cannot achieve much unless he has sufficient

confidence in himself. In any undertaking, including
entrepreneurship, a person’s belief in his ability leads him to
actual performance and eventual success.
Goal Setter

Goals are very useful motivational tools, especially those

related to accomplishing the objectives of entrepreneurs. A
goal performs the following functions:
1. it directs one’s attention to a specific target;
2. it encourages one to exert effort toward achieving
something specific;
3. It encourages persistence; and
4. it fosters the creation of strategies and action plans.
Accountable

The success of an enterprise will defend much on

the willingness of subordinates to comply with the
wishes of the entrepreneur. Compliance can be
expected if the entrepreneur is accountable enough
to take responsibility for whatever happens to the
firm.
Innovative

A free enterprise economy like ours allows business

enterprises to flourish. This will depend, however, on how
well the public is convinced to patronize them.
Innovative may be the only way the entrepreneur can
achieve the following:
1. penetrate the market;
2. Improve employee turnover;
3. Reduce manufacturing cost; and
4. improve collection rate.
What Motivates People to Become
Entrepreneurs
1. desire to be one’s own boss;
2. desire for financial rewards;
3. desire to create one’s own job security; and
4. desire to improve one’s quality of life.
Desire to Be One’s Own Boss

There are times when an employee sees some good

opportunities for his employer’s business. When he
recommends action to be undertaken and is ignored, the
employee may just proceed to take the opportunity and
organize his own business.
Desire for Financial Rewards

Getting employed is the desire of most people. This is

understandable because many people want sure monthly
income. Some people, however, do not get satisfaction from
a fixed monthly income which, most often, is inadequate.
Some think that they deserve to be properly rewarded for
their skills. The means open to them is entrepreneurship.
Desire to Create One’s Own Job Security

Some employees feel that their jobs are not

secure. They think they could be fired for a variety
of reasons.
Desire to Improve One’s Quality of Life

Oftentimes, employees do not have control over

their work schedules. As a result they could not
fulfill some important family responsibilities.
The Entrepreneur and the Manager Distinguished

The terms “entrepreneur” and “manager” are sometimes

used interchangeably. Although both jobs are useful to the
economy, each performs distinct functions.
 Table 8. Activity Emphasis of New Venture

Enterprise Stage Factor Emphasis

I. Prestart-up Business idea human Full
resource capital None
None
Business idea
II. Star-up Human resource None
Capital Limited
Limited
Business idea
III. Early growth Human resource None
Capital Escalating
Escalating
Business idea
IV. Later growth Human resource None
Capital Full
Full
Business idea
V. Stable enterprise Human resource None
capital Full
full
 Table 9. The Entrepreneur’s Task vs. The Manager’s Task
Enterprise Stage Activity Entrepreneur’s Manager’s
Involvement Involvement
I. Prestart-up Feasibility of an idea, product,
and service, among others, is
scrutinized. Full None

I. Start-up Business is formed, necessary

capital is generated, facilities and
equipment are purchased,
prototype of products are built,
market is tested. Full None

I. Early growth With limited resources, selling is

undertaken in limited markets. Full None

I. Later growth Structured management, long-

term financing, and facilities
planning are established. Declining Partial

I. Stable enterprise With bigger resources, recurring

sales and profits, selling is
undertaken in bigger markets. none full