Entrepreneurs Are Born Not Made

Topics: Entrepreneurship, Entrepreneur, Locus of control Pages: 10 (3373 words) Published: April 21, 2015
“Entrepreneurs Are Born Not Made.” Critically Analyse This Statement with Reference to the Literature and to Your Experience of Entrepreneurship. “Entrepreneurs are born not made.” Critically analyse this statement with reference to the literature and to your experience of entrepreneurship. This essay aims to evaluate the various traits identified with entrepreneurs, and then establish whether entrepreneurs are born with these traits, or whether, they are shaped and developed through their life experiences. Put simply the purpose of this essay is to establish whether entrepreneurs are ‘born or made’. This essay focuses on two distinct schools of researchers in the field of entrepreneurship: The more traditional group of researchers has focused on the personality characteristics of the individual, the internal factors, whilst a second group of researchers have taken a social cognitive approach. They look at the relationship between an individual and his or her environment. The external factors include culture, role models, work experience, education, and environment. This essay looks at the early definitions of an entrepreneur, evaluates the literature which supports the theory that entrepreneurs are ‘born’, and also evaluates the proposal that there is a relationship between the individual entrepreneur and their social environment, that is, entrepreneurs are ‘made’. Cantillon (1756) defined the entrepreneur as engaging in business without an assurance of profits; thus the bearing of risk being the distinguishing feature of an entrepreneur. Jean Baptiste Say expanded on this by making the entrepreneur the pivot of the economy, and a catalyst for economic change and development. The entrepreneur was seen as someone willing to take the risk of bringing different factors of production together. The commonly held view of the entrepreneur as a calculated risk-taker is close to the view of Knight (1921) that the entrepreneur is prepared to undertake risk. Profit, according to Knight, is the return for bearing uncertainty, which is an uninsurable risk. Schumpeter (1931) emphasised the innovative nature of the entrepreneur, an individual experimenting with new combinations. Schumpeter credited J.S.Mill with introducing the term ‘entrepreneur’ among economists. Mill appeared to believe that the inclusion of risk bearing distinguished the term ‘entrepreneur’ from the term ‘manager’. In contrast to this view of high risk, McClelland (1961) has suggested that entrepreneurs actually have only a moderate level of risk propensity. The reason is that people with high need for achievement, such as entrepreneurs, would prefer to undertake tasks that are both challenging and achievable by employing their skills (McClelland, 1965). In this sense, people with moderate risk propensity are more likely to succeed in creating new businesses. McClelland’s view supports the approach that there are psychological characteristic of individuals who seek the types of challenges and rewards which characterise the lives of entrepreneurs. Another possible personality factor related to the characterisation of an entrepreneur is locus of control, developed by Rotter (1966). Locus of control refers to the amount of control one has over one s destiny A strong internal locus of control translates into the belief that one can control one s fate. Brockhaus (1982) suggests that an internal locus of control, even if it fails to distinguish entrepreneurs, may serve to distinguish the successful entrepreneur from the unsuccessful one: “Successful entrepreneurs were found to have a more internal locus of control, were less satisfied with their previous jobs, were more fearful of dismissal from their previous jobs, were younger, and more were married than unsuccessful entrepreneurs” Brockhaus refers to entrepreneurs as ‘moderate risk takers’, which further supports McClelland’s view of the entrepreneur. However, Ray (1993) argues that risk is related to strategy...

References: Aldrich, H.E. (1999). Organizations Evolving. London: Sage Publications.
Brockhaus, Robert H., (1975), I-E Locus of Control Scores as Predictors of Entrepreneurial Intentions: Academy of Management Proceedings, p433-435
Chell. E. Haworth. J. & Brearley. S. (1991), The Entrepreneurial Personality. Concepts, cases and categories. London: Routledge.
Deakins, D
Gatewood et al, (2002), Entrepreneurial Expectancy, Task Effort, and Performance: Entrepreneurship: Theory & Practice, Vol. 27, Issue 2
Grebel, T., Andreas P., Horst H
Herper, M. (2011) Born or Made? Forbes, 5/23/2011, Vol. 187 Issue 9, p77-77
http://mediacentre.02.co.uk/content/Detail.aspx?releaseID=482&NewsAreaID=2
Martinelli, A. (1994) Entrepreneurship and management. In: Smelser N J, Swedberg R (eds.) The Handbook of Economic Sociology. Princeton University Press, Princeton, NJ
McClelland, D
McClelland, D.C & Burnham D.H. (1975) Need for Power is a great motivator. Harvard Business Review, 117-126.
Pandey, J & Tewary, N.B (1979), Locus of Control and Achievement Values of Entrepreneurs.: Journal of Occupational Psychology, Vol
Ray, D (1993), Understanding the Entrepreneur: Entrepreneurial Attributes, Experience and Skills, Entrepreneurship and Regional Development, Vol 5, No 4, 345-57.
Reynolds, P.D
Reynolds, P., D. J. Storey & P. Westhead. (1994) Cross-National Comparisons of the Variation in New FirmFormation Rates. Regional Studies, 28( 4), 443-456.
Rotter, J
Schumpeter, J.A (1934), The Theory of Economic Development, Harvard University Press, Cambridge.
Shaver, K.G
Timmons, J.A. (1982), Trials and Rewards of the Entrepreneur, USA: Harvard Business Review
Verheul, I
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Entrepreneurs are born and made Essay
  • Are Entrepreneurs Born or Made? Essay
  • entrepreneurs born or made? Essay
  • Entrepreneurs Are Born and Made Essay
  • Are Entrepreneurs Born or Made Essay
  • Are Entrepreneur Born or Made Essay
  • Entrepreneurs Are Born Not Made
  • Are Entrepreneurs Born or Made Essay

Become a StudyMode Member

Sign Up - It's Free