Many theorists have labored hours into delineating entrepreneurship, but there can never be one single definition. Entrepreneurship is the risk-taking ability of a person to recognize and evaluate business opportunities, gather the necessary resources required for execution and initiate crucial processes to ensure success of the business whilst earning profits. It is often considered as a multidimensional notion that is looked at from various perspectives and hence it is often argued whether traits are considered as a biological or a sociological explanation of entrepreneurship. This essay will explore a range of aspects inclusive of single-trait and multi- trait theories whilst looking at the criticisms of the same. The argument will then proceed to how nurture also plays a dominant role to shape entrepreneurial behavior. The debate as to whether entrepreneurs are born or made will conclude with the underlying factors of the new venture creation model, showing that there is more than just one factor involved for the explanation of entrepreneurial behaviors.
Various research has provided an insight on how the upbringing of an offspring’s entrepreneurial objectives and motives depend on a combined influence of the family’s cultural roles and entrepreneurial situations. Genes can be said to influence entrepreneurial activity amongst people through four main ways. They could affect chemical mechanisms which results in altering the thought process of one’s mind. Individual differences that predispose them to engage in activity can be affected and some individuals may be more sensitive to environmental factors than others. This may also involve the switch to environments that are highly engaging with entrepreneurial stimuli. Gene-environment correlation could be a passive action as well. This would involve children inheriting genes from their biological parents, enhancing their behavior, yet also giving them the environmental conditions that would favor that behavior (Plomin et al., 1977; Carey, 2003)
Genetic contribution towards shaping one’s personality is said to be an approximate of 40% (Whybrow, 1999). White et al. (2006), delved into analyzing the relationship of entrepreneurship and the biological variable, only to find out that ‘T level’ – testosterone level was positively matched with an increasing probability of entrepreneurial experience. Theory states that biological characteristics such as testosterone tend to empirically linked with a psychological variable and can be a heritable biological trait – risk taking abilities to get involved with a new venture creation (Mazur&Booth, 1998). A study of identical twins being separated at birth took place at the University of Minnesota with researchers concluding that genetics played a larger role in relation to personality, in comparison to environment. Even after being separated for years, results showed that factors such as social attitudes, religiosity, postures and sexual orientations correlated with genetics, posed by both twins.
The personality perspective devised by Stokes et al. in 2010, had the aim of the research focused on identifying entrepreneurial traits. They felt that there was an enduring and underlying attribute which concluded with consistent behavior, no matter the situation an individual was in. Barrick and Mount in 1991, proposed that the personality trait, extraversion, is heritable and can incorporate attributes such as talkativeness, exhibitionism and how social an individual is. An example that supports this is a meta-analysis of 36 different studies involving monozygotic and dizygotic twins that were raised together proved that the inheritance of characteristics of extraversion were 0.58 (Eaves et al., 1989).
Character traits tend to be shared amongst most entrepreneurs, which shows that traits do define them. McClelland hypothesized that societies tended to lean towards the Need for Achievement, also known as ‘nAch’ which was considered as a ‘single-trait theory’. He stated that entrepreneurs would typically have a high need for achievement and this would differ from person to person. Another single-trait that can be pointed out is the degree of ‘locus of control.’ Those with a high internal locus of control tend to be owners or managers, and believe that they exercise control over their own destiny and whatever the outcome may be, is contingent on their own behavior rather than on fate, luck or others (Rotter, 1990). Lastly, another single attribute that could be noticed in entrepreneurs is the ability to live with uncertainty and have a high risk taking propensity. This also gave them the ability to be open minded with quick responses to change (Brockhaus, 1982)
Theorists in the late 1970’s were displeased with the incompetency of single trait theories to define entrepreneurship and so came up with the multiple-trait theory (Timmons, Smollen and Dinge, 1985). These involve characteristics such as being determined, committed, optimistic, creative, decisive, a team builder a hero maker and many more. They must take initiative as well as have the drive to achieve and grow. They believed that trait theories were proven to not be a viable alternate option in explaining entrepreneurial behavior, yet, various cognitive methods have been adopted to completely fully represent the same.
Every theory has an opposing opinion and so there were various methodological and philosophical criticisms of the trait theory, a few of which are explained below. Firstly, traits are thought to be stable but this is regarded as an assumption. A person’s characteristics will not remain consistent and instead will develop and change over time, after being under the influence of a variety of situational factors (Deakins, 1996). It is also argued whether trait theorists are the only ones who are able to measure one’s behavior. An individual’s personality affects behavior which can be directly observed as well.
Measures also tend to overlook crucial aspects such as environmental situations, which are known to influence and shape behavior. It can even differ between cultures as each family has a different way of upbringing their children. Drawing on an example from an interview with my entrepreneur, Nigel Soans, grew up in a family with no history of entrepreneurship, but situational factors such as the economic recession in 2008 led to a lack of job opportunities. This resulted in him partnering with a friend and starting up a dance institute. Soans claimed that determination, commitment, perseverance and high motivation levels were key attributes for a business to be successful.
Environmental factors play a crucial role to condition behavior and it is crucial for one’s success in any activity. Ecological population theory by Hannan and Freeman in 1977, shows that the environment is key in assuring the success of a business, much more than the characteristics one poses. Traits were considered to be prototypical divisions, making the descriptors of behaviors imprecise which led to individuals analyzing them in a variety of ways (Chell et al, 1991).
Another major criticism of trait theories is that the entire socialization process is overlooked. An individuals’ behavior adapts, grows and enhances as he/she engages with a social network or group (Gibb and Ritchie, 1981). The socialization process has the ability to change one’s attitude as major components involved include education and learning which is not considered when the side of nature or inheritance is analyzed. Behaviors can indeed be acquired, enhanced and rehearsed. It also ignores other key factors such as age, sex, race and social class which could be helpful in coming to conclusions as why certain people possess entrepreneurial behavior, whilst others don’t.
Kirzner articulates that any individual can be an entrepreneur, as long as they are aware about the opportunities available that can be taken advantage of. This although, is not considered enough and one must recognize the opportunity, seize it and further commercialize it before competitive threat arrives. Prior findings suggest that individuals with entrepreneurial role models have higher chances of being involved with some sort of entrepreneurial action (Carsrud, Olm & Eddy, 1987). Entrepreneurship is said to be argued as a discipline that can be learned and mastered by any individual and thus they are not just born, but are made better (Burns and Dewhurst, 1989; Kent 1984). It all tend to rely on the will power of an individual to make it work with the capacity, willingness and commitment to doing so (Timmons, 1999)
However, educators cannot make everyone into an entrepreneur. Entrepreneurship may start with grasping an opportunity from the external environment.
The next part of the essay will introduce the behavioural perspective which focuses on the crucial steps of starting up a new venture. Gartner (1988) defines entrepreneurship as a collection of operations that help creating new ventures possible. Entrepreneurship can be noted as a procedure of new venture creation (Gartner, The variables that lead to certain behavior amongst entrepreneurs will be scrutinized in order to come up with comparisons of how one venture started up due to different reasons than the others.