Academic journal article Journal of Business and Entrepreneurship

Entrepreneurial Characteristics, Optimism, Pessimism, and Realism-Correlation or Collision?

Academic journal article Journal of Business and Entrepreneurship

Entrepreneurial Characteristics, Optimism, Pessimism, and Realism-Correlation or Collision?

Article excerpt

ABSTRACT

The study of entrepreneurs and entrepreneurship has resulted in a great deal of information about who entrepreneurs are and how who they are impacts their behavior. This article presents additional insight into who entrepreneurs are and how their characteristics relate, and how those relationships might impact their behavior. We have studied selected entrepreneurial characteristics and their relationship to optimism, realism, and pessimism. The study shows that some entrepreneurial characteristics are positively related to optimism and realism and negatively related to pessimism.

INTRODUCTION

There has been and is a discussion among researchers about entrepreneurial optimism, and if optimism relates to other characteristics of entrepreneurs. The purpose of this article is to explore and examine the relationships between entrepreneurial characteristics and optimism, realism, and pessimism. For many years, researchers have identified unique characteristics of entrepreneurs such as confidence, independence, being in control, risk taking, and creativity. The literature has also discussed optimism and its relationship to other entrepreneurial characteristics, how optimism impacts venture performance (success and failure) and decision making, and different levels of unrealistic optimism leading to various consequences in venture development (Liang & Dunn, 2008a; Liang & Dunn, 2008b; Schneider, 2005).

Looking at economic issues today, many people do not have a strong positive outlook for the future. However, the creation of new ventures during an economic downturn may help to stimulate the economy. Some research evidence shows that optimistic entrepreneurs seem to perform better and more competitively in certain environments and organizations (Manove, 2000). If results from previous literature are accurate, it would be reasonable to assume a strong positive relationship between entrepreneurs' decisions, their unique characteristics, and optimism. These factors can influence savings and investment rates, which might boost overall economic activity (Manove, 2000). This assumed relationship between entrepreneurial characteristics and optimism is the underpinning theory for this article.

Unrealistic optimism, identified as a common human trait, has appeared in psychology literature within the last twenty years. Psychologists' explanations of optimism and personal characteristics have often been gathered in case-specific experiments (Taylor, 1989; Weinstein, 1980, 1982). Most of the arguments presented in entrepreneurship and economics literature remain in the conceptual stage (Aidis, Mickiewicz, & Sauka, 2008). Even though optimism turns out to be common among entrepreneurs, it should not be inferred from this that realism and pessimism do not exist among entrepreneurs. Therefore many questions remain unresolved in the literature due to lack of empirical evidence. How closely does optimism relate to other entrepreneurial characteristics? If not all entrepreneurs are optimistic, are there relationships between entrepreneurs' characteristics and their perceptions of realism or pessimism?

There are a number of reasons why this is an important area for research. First, realism and pessimism have not been studied thoroughly in entrepreneurship and economics. There is a lack of understanding of what realism and pessimism mean and how they impact entrepreneurs (Liang & Dunn, 2008a; Liang & Dunn, 2008b). A second reason to examine the relationships between entrepreneurial characteristics and optimism, realism, and pessimism is the need to examine some questions presented in previous literature regarding who entrepreneurs are and their behaviors in decision making (Liang & Dunn, 2008a; Liang & Dunn, 2008b). Optimism is included in the set of entrepreneurial characteristics in many studies. However, not all entrepreneurs are optimistic all the time, especially given the volatile economic and financial situations we are dealing with today. …

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