Academic journal article International Journal of Entrepreneurship

Dispositional Antecedents, Job Correlates and Performance Outcomes of Entrepreneurs' Risk Taking

Academic journal article International Journal of Entrepreneurship

Dispositional Antecedents, Job Correlates and Performance Outcomes of Entrepreneurs' Risk Taking

Article excerpt


Interest in entrepreneurship has never been higher than it is at the beginning of the 21st century (Zimmerer & Scarborough, 2001). Entrepreneurs are "the makers of new worlds" (Czarniawaka & Wolff, 1991), "innovators and a catalysts of change who continuously do things that have not been done before and do not fit established societal patterns" (Schumpeter 1934; 1965), who "identify, asses, evaluate, manage and transfer risk" (Deakins, 1999). Researchers the world over have turned their attention to the study of entrepreneurs, coming from different theoretical perspectives and using different methodologies. The result has been a fast growing body of research and an acknowledgement of the fact that entrepreneurship is a very complex and heterogeneous phenomenon (Cunningham & Lischeron, 1991).

There have been several attempts to categorize studies on entrepreneurs. Deakins (1999), for example, noted that most literature on entrepreneurs has stemmed from three main sources: a. an economic approach that stresses the role of entrepreneurs in economic development; b. a social-environment approach that stresses the influence of the social and cultural environment on entrepreneurs; c. a psychological approach that focuses on the personality traits of entrepreneurs. While the economic and social environment approaches focus, at the macro level, on economies and societies as units of analysis, the psychological approach focuses, at the micro level, on the individual as the unit of analysis (Korunka, Frank, Luegler & Mugler 2003) and on personality traits associated with entrepreneurship such as need for achievement, internal locus of control, confidence and risk taking (Begley & Boyd, 1987; Brockhaus & Horwitz, 1986; Bygrave, 1989). Carland, Carland and Stewart (1996) suggested that the entrepreneurial psyche is a gestalt of personality factors such as need for achievement, preference for innovation, and propensity for risk taking, with varying degrees of the traits combined in an individual entrepreneur. It is this gestalt which produces differences in entrepreneurial behavior (Lockwood, Teasley, Carland and Carland, 2006).

Based on Person-Job fit theory and on Trait Activation theory, this paper demonstrates the relationship between certain dispositional antecedents (personality dimensions), occupational correlates (novelty and technological uncertainty of ventures) and performance consequences (venture success measures) and high-tech entrepreneurs' risk taking tendencies.


Findings have been mixed regarding the psychology of entrepreneurs (Deakins, 1999; Gelderen, 2000; Watson, Ponthieu & Doster, 1995). So much so, in fact, that it has been argued that the trait approach has failed in the case of entrepreneurs (Gartner, 1988) and that the entrepreneurial personality is nothing but a myth (Shaver, 1995). However, in recent years research on the entrepreneurial personality has re-emerged as an important topic of investigation (Rauch & Frese, 2000) with a leading entrepreneurship scholar noting that a psychological approach is necessary to understand entrepreneurship (Frese, 2009).

One of the personality traits that generated the greatest research attention and controversy has been the risk taking propensity of entrepreneurs. Recently, the literature on entrepreneurs' risky decision-making has evolved dramatically (Brockman, Becherer, and Finch, 2006).

Risk-taking is defined as the perceived probability of receiving rewards associated with the success of a situation that is required by individuals before they will subject themselves to the consequences associated with failure (Brockhaus, 1980). Many studies of entrepreneurs' personality included risk-taking (e.g. Carland et al., 1996; Cromie, 2000; Cunningham & Lischeron, 1991; Ho & Koh, 1992; Kilby & Koh, 1996; Stewart & Roth, 2001), portraying entrepreneurs as risk-takers who expect profits as reward for this risk-bearing and whose risk-taking leads to better performance outcomes (Hai & See, 1997). …

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