Academic journal article Academy of Entrepreneurship Journal

Key Psychological Factors as Predictors of Entrepreneurial Success: A Conceptual Framework

Academic journal article Academy of Entrepreneurship Journal

Key Psychological Factors as Predictors of Entrepreneurial Success: A Conceptual Framework

Article excerpt

1. INTRODUCTION

Entrepreneurship to an extent is an intentional process. It is a cognitive process and gives an insight view of psychology. The universal dogma of psychological theory of planned behavior (Ajzen, 1991) is that planned behavior is best envisaged by intention towards it. The intention towards entrepreneurship is considered antecedent to entrepreneurial activity (Bird, 1988; Kolvereid, 1996; Krueger and Brazeal, 1994). There are several drivers that stimulate an individual to become an entrepreneur.

Researches on psychological forefront has emphasized on personality traits of entrepreneurs. Two pertinent theories are of Schumpeter and Rotter. Schumpeter (1967) has claimed that innovation is an important characteristic of an entrepreneur. He visualized that by combining the factors of production, one can develop ideas into concepts through innovativeness. Along with him Rotter (1966) developed the concept of Locus of Control. He specified that people are of two types. Some believe on luck or factors that they cannot control so they have external locus of control. On the other hand, those who believe in their efforts and foresee future in their control said to have internal locus of control. According to his opinion those who are entrepreneurs have more internal locus of control. The motivations and behavior of individuals who have purposive intention to become entrepreneurs has always been a subject of interest of entrepreneurship research and has reaped continuous attention over the last decade (Birley and Westhead, 1994; Carter et al., 1996).

The concept of entrepreneurship is multifaceted and is referred in a varied context. Understanding the factors persuading an individual's wish to become an entrepreneur is a crucial facet of entrepreneurship study. Previous researches on entrepreneurial actions show that there are some psychological characteristics that motivate them to become entrepreneurs. Such characteristics can be studied to distinguish entrepreneurs from non entrepreneurs (Hornaday, 1982 cited in Davidsson, 1995).

Previously the study of entrepreneurship was focused on the "how" rather than "who" becomes an entrepreneur. However now, the impact of personal/ psychological characteristics is the principle theme of the study of entrepreneurial behavior and performance. The intrinsic nature of psychological theory is the difference in individual characteristics to become a successful entrepreneur.

According to Lachman et al. (1980) and Koh (1996), people who have the similar characteristics as entrepreneurs will have a higher chance to perform like entrepreneurs unlike people who lack such characteristics. Psychological characteristics form the underlying base for the transformation of an individual into a founder of an enterprise (Begley and Boyd, 1987). Through the years of research, many of these individual characteristics have been discarded, discredited, or have been measured ineffectively. Economic, social, demographic, cultural and other factors helps in decision making for new venture creation but none of these individually or together can create an enterprise. It is the individual, who makes it possible. He foresees innovation in a concept, he who has the motivation to accomplish the task.

Against this backdrop, the objective of the paper is to synthesize the findings of the earlier researches to understand the influence of psychological characteristics of an individual to undertake entrepreneurship as an important factor that influences entrepreneurial performance. The understanding of this dimension will lead into designing a framework to satisfy the purpose of the study.

The paper further deals in the following manner: Section two gives a backdrop of association between psychological dimension and entrepreneurship process. Section three reviews the related literatures essential for the study. Section four discusses the proposed conceptual framework based on the study of literatures followed by Section five finally concluding into findings, implications and limitations of the study. …

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