Entrepreneurial Challenge and New Venture Creation

The views in the past on the entrepreneur’s characteristics were formed upon a general agreement with regard to its economic importance society. The term entrepreneurship has received solid attention from economists, scientists and policy making body. Though entrepreneurship has several aspects, these aspects can be discovered in the literature and theories when trying to explore the views of the classical researchers to entrepreneurship aspects and also discussion upon the relevant formal and informal attributes that are mandatory for an individual to succeed as an entrepreneur in the real world, this add more desire to the entrepreneurial challenge and venture creation.

The intended goal of stimulating entrepreneurship in people is to figure whether what type of formal and informal attributes needs to be existent in a person to gauge whether he would likely to succeed after starting a businesses venture. Accomplished entrepreneurs are not restricted to one personality profile but rather arrive in varied ages, differing incomes, any gender, and particular race. They might even have different educational background and experience. However according to our classical researchers majority of the entrepreneurs who succeed in life tend to have similar personal attributes. These attributes may consist of innovation, creativity, determination, versatile, initiators and leadership traits.

Theoretical Review On The Entrepreneur Traits And Attributes

The opportunity to become independent and being you own boss along with making wealth and has motivated many young or middle aged individuals to try to become an entrepreneur. Evidence shows that this has been majorly reflected the research on the emergence of small and medium enterprises (SME) and more significantly, the direct and indirect attributes that are linked with the entrepreneurs who have successfully been able to make their company grow and prosper led. The overall study aspects discussed in the literature are likely to revolve around’ leadership skills of an entrepreneur, their orientation process, the level of management skills, personality indicators or traits and their circle or the network they belong to. (McClelland 1961) Emphasized that attributes which contributes the most towards becoming a successful entrepreneur is the need for achievement.

Where on the other hand (Begley and Boyd 1987) discovered that entrepreneurs or initiators may score relatively higher than managers of a small business who are non-initiators in need for achievement, taking risk, and have a low tolerance regarding ambiguity. Another researcher (Brockhaus, 1982) analysed a large number of characteristics related to psychology and concluded that the main indicators of entrepreneurship attributes are linked to the high achievement needs, high centre of control and a high risk taking.

While on the other hand, Brockhaus and Horwitz’s (1986) theories presented that entrepreneurs who inherit high centre of control strive for high achievements as well. It has also been suggested that the essential factor in differentiation between entrepreneurs from a manager is risk taking factor (Mill 1984). It could also be established that entrepreneurs may execute higher tolerance to risk especially in departments or areas where they have full control or even realization of the potential of making a profit in that area. Many studies have included risk taking as a primary entrepreneurial characteristic.

It was confirmed at a later stage that entrepreneurs readily undertake the uncertainty and unknowing situations; therefore the individuals who are more inclined towards becoming an entrepreneur are expected to depict comparatively greater tolerance of ambiguity (Mitton 1989). It has also been suggested that innovation is the most prominent factor that is essential for the characteristic of an entrepreneur. Existing literature on entrepreneurship indeed give a picture of entrepreneurs being relevantly more innovative than individuals who lack the potential to become an entrepreneur (Koh and Ho, 1992); personality traits of entrepreneurs have been defined to have a significant effect on organizational growth (Sexton and Robinson 1994).

Researches also discovered that personality attributes such as internal point of control and tolerance to ambiguity influences the success of business directly and the processes of the business in an indirect manner (Vazquez and Farnendez 2000). It was complimented with later variables related to demographics to study and investigate the entrepreneur’s traits that could have a direct impact on the success or failures of entrepreneurs residing in Africa. Even though researches on an entrepreneur’s traits have executed a crucial role in the contribution of the success of entrepreneurs all over the world, these traits have been constructively criticized grounds of theory and empirical outcomes in the studies of entrepreneur’s attributes Gartner (1988). One of the researchers in his article, clearly addresses to who is an entrepreneur and hence suggest that asking Who is the wrong sort of question when establishing characteristics of a successful the success of a business venture is mediating phenomena and cannot be related to entrepreneurs personality traits only Gartner 1988). There was a study conducted on a segment of employees done by two researchers which helped to reveal that those individuals who are initiators at work place tend to do better than others (Frese and Fay’s 2001).

Researches on self-initialisation focuses on the nature of entrepreneurs being self-starters and not waiting for others to instruct them: hence they manage to success due to their proactive nature, hence they know exactly how to seize and utilize an opportunity with their proactive attitude, they are the solution finders rather than hurdle makers(Tag and Fresse1997). Great initiative taking entrepreneurs are successful at staying ahead of their competing colleagues members, and therefore are considered as role models for their subordinates. Self initiators directed upon the achievement of their goal and oriented towards action (Frese et al., 1997) and therefore are in close alignment to their consistent strategy. There are similar drawn traits relating to the entrepreneurial challenge and venture creation.

It is one of the contingent variables behind which helps to predict whether an individual has the potential to become a successful entrepreneur. The majority proportion of studies executed on personal self initiation is in direct relation to performance of the employee and hence significantly limited number of studies has been published on personal and self initiation with respect to success as an entrepreneur.

Because of reduced functioning competencies of the initiators, they are generally replaced by experienced managers who possess the competency that are necessarily required to handle the company’s affairs when the situation begins to transform from a start up phase of business life cycle to a growth stage organization.

Some of the researcher was unsuccessful in finding any evidence regarding professional managers performing relatively better than initiators in companies with high than the original starters of the company. They were intending on observing that many company founders were good at managing growth in an effective manner. There for rejecting the assumption that an only professional managers need to be employed in order to manage high growth companies (Willard, Krueger, and Freeser, 1992). This research was able to challenge the traditional views upon wisdom is it was able to reveal the process through which accomplished entrepreneurs progress through and turn themselves into competent professional managers.

Accordingly some of the researchers found that founder members of the company are also eligible to have the same competency for performing as professional managers have, there are very limited studies on the similarity between a manager and a founder of a company who are required to perform when working in a growth focused company.

Some of the researchers also discovered that most of failure in business was contributed towards the lack of appropriate managing skills (O’Neill & Duker, 1986). It has been reviewed through the literature used for this report that there are approximately 10 failing high-tech companies and were able to conclude that there were three main contributors for this failure which were financial issues, problems with either the product or market and managerial issues.

Get Test For Testing Entrepreneurship

The explanation or predictors of a person good at enterprising could be established from the background that could be uncovered about the entrepreneur. The concept being that the person eligible for enterprising would likely to share similar entrepreneur’s traits. GET2 test helps to discover the different aspect of becoming an entrepreneur an entrepreneur is not some who just starts up a completely new venture, but some of the examples arise from within the organizations as well. Such people are referred to as entrepreneurs.

Then there are also volunteers who are eager to participate in new projects and introduce new ideas within the project voluntary in the community such volunteers could be referred to as volunpreneurs. However, the tendency to enterprise could be defined as the ability to initiating a new business and then managing that business successfully.

As the complimentary assessment of a tendency to enterprise the GET test was introduced at Business School of Durham University 1988 in order to help employers gauge the entrepreneurial tendency of the candidates, who apply at their firm for a position as well as to guide the individuals willing to become an entrepreneur about their probability of having entrepreneurial characteristics, and whether they would succeed if would take such a chance.

It hence was able to generate a lot of curiosity and interest amongst academic institutions, and other venture capitalists who work globally in the field of innovative projects that are started by aspiring entrepreneurs.

Get2 test could be used for research, hiring and sponsoring of a new project. Even though this test has been implemented in many organizations to gauge effectiveness of an entrepreneur it is still not free of criticism as it has been debated that the attributes that are investigated in this test may not ensure that an individual has the eagerness to become responsible for a completely new project, and may lack the determination to complete projects on time and also the other factors like financial issues, external environmental factors and other managerial skills may not be effectively be gauged by this tool of testing the tendency to become an entrepreneur and take up new ventures.

The research on the effectiveness of GET test as a tool for measuring tendencies was mostly emerged by work of McClleland and Atkinson’s in the early 1960 suggest contrary findings which opposes the traditional view of all entrepreneurs having the same skill sets.

Strengths and Weakness of the Test

The benefits of this test are that actually provides an edge or guidance to an individual looking to become an entrepreneur on what areas he may lack in order to succeed as an entrepreneur. Another strong point of this test is that it is a relatively inexpensive method for venture capitalists and employers to analyze their candidate’s tendency to enterprise. It is also very time efficient as it immediately informs on the person capability on becoming an entrepreneur.

However, there are some drawbacks of the test as the entire test consists dichotomous option for giving a response responses. Hence this is an issue as a person cannot be more expressive towards his response and might not be able to justify the reason for not following a certain practise mentioned in the analysis. Also, some of the personality traits associated to entrepreneurs might not be an accurate reflection of all owners of a business or entrepreneurs. Some of the characteristics that are discovered through this analysis could also be gender biased, and some of the questions may even be leading.
Conclusion Evaluation of the Get Test

The Get Test is a lengthy questionnaire with 54 closed ended questions with answers being limited to tendency to agreeing or disagreeing. The questions that I attempted in this test were quiet significant to what one would need to know in order to gauge whether he is fit to be an entrepreneur or not. The focus of the test is to assess whether you are of a person to work as an individual or are a team person. Also, the questions seemed to correctly focus on a potential candidate’s willingness to try new things. Considering the relevant personality traits that have been defined in the literature used for this report some of the most prominent trait of an entrepreneur are innovative, risk taking and initiator or leadership traits.

The questions that I answered have all the elements that would be relevant to gauging whether an individual has these traits or not. For e.g. the test assessed me to have a high need for autonomy or independence which I would completely agree with as I would rather get all the work done in a group than rely on others to finish their task before moving onto the next agenda.

The test was also successful at gauging thee innovative or risk taking nature of a person as some of the questions related to the test like if a person would buy a lottery ticket or enter a contest both options are risky in nature but if the person would rather enter a competition he would considered being open to risk taking as well as being open to challenges and innovation, whereas a lottery buyer would be open to risk but probably not a challenge.

However, the test cannot be said to be 100% effective in gauging the entrepreneurial skills of a person as the two options of agreeing on or disagreeing on can be ambiguous in nature a lot of candidates would prefer a third option where he could be neutral in the particular question.

Summary Of The Test Result

The test gave me a score of 70% which predicts that I am likely to have succeeded in possessing some of the enterprising characteristics. My need for achievement is high however I would prefer to enterprise with ideas that would fit in with my lifestyle. My need for autonomy is extremely high, and I have high leadership skills but lack in people management skill. My score on being innovative is medium which means I would rather start projects I am familiarized with than a completely out of the box idea. I am relatively a less risky person hence I would not take a risk alone but rather involve someone with me to share that risk. My locus of control is more than medium but not that high either which means I need to work on myself confidence in order to make a success of a venture that I would be willing to start.

References

Begley, T. M., & Boyd, D. B. (1987). Psychological characteristics associated with performance in entrepreneurial firms and small businesses. Journal of Business Venturing, 2, 79-93.

Brockhaus, R. H. Sr., & Horwitz, P. S. (1986). The psychology of the entrepreneur. In Sexton, D. L., and Smilor, R. W. (Eds.), The Art and Science of Entrepreneurship. Cambridge, MA: Ballinger, 25-48.

Frese, M., Fay, D., Hilburger, T., Leng, K., & Tag, A. (1997). The concept of personal initiative: Operationalization, reliability and validity in two German samples. Journal of Organizational and Occupational Psychology, 70, 139-161.

Gartner, W. B. (1988). Who is an entrepreneur? Is the wrong question. American Journal of Small Business, 12 (4), 11-32.

Krueger, N. (1993). The impact of prior entrepreneurial exposure on perceptions of new venture feasibility and desirability. Entrepreneurship: Theory and Practice, 18 (1), 5-21

McClelland, D. C. (1987). Characteristics of Successful Entrepreneurs*. The journal of creative behavior, 21(3), 219-233.

 Mitton, D. G. (1989). The complete entrepreneur. Entrepreneurship: Theory and Practice, 13, 9-19.

O’Neill, H.M., & J. Duker (1986).  Survival and Failure in Small Business. Journal of Small Business Management, 24 (1), 30.

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