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Do you have the intention to start a business?

A literature review on the role of the Big Five personality traits on entrepreneurial intentions

Bachelor thesis research by Fleur Schreurs

In June 2016, Fleur Schreurs graduated from the Tilburg School of Economics and Management at Tilburg University. She followed the BSc Business Economics and wrote her bachelor thesis in the area of entrepreneurship.

What does it take to be an entrepreneur? Does one have to be sociable, talkative, calm, flexible, broad-minded, curious, and organized in order to start a new venture? What is that entrepreneurs need to operate in today’s globalized world, where the startup market is rapidly growing and diversifying? The personality traits that an entrepreneur is born with, and how they may influence his/her business activity, has become the subject of entrepreneurship-related studies. Starting from the premise that entrepreneurs are born, not made (Kuratko, 2005), Schreurs’s thesis attempts to determine whether the Big Five personality traits, as a basic structure of human personality, have an effect on entrepreneurial intentions.

The main aim of the present thesis is to offer an outlook on different perspectives that place the Big Five model dimensions - Extraversion, Emotional Stability, Agreeableness, Openness to Experience, and Conscientiousness - as significant factors when it comes to the entrepreneurial intentions. Much of the previous literature on this topic has focused on either the personality constructs that make an entrepreneur successful or on the differences between entrepreneurship and managers. This paper attempts to determine, as emphasized by the problem statement, “To what extent do the Big Five personality traits have an effect on entrepreneurial intentions?”, where entrepreneurial intentions are seen as “the opportunistic pursuit of economic wealth via creative initiatives of the individual operating within an uncertain environment constrained by limited tangible resources” (Koe Hwee Nga & Shamuganathan, 2010, p. 259).

Having defined the problem statement, the question was addressed by conducting a literature review on the matter; including two empirical studies, based on two theoretical models: The contexts of intentionality is investigated by Bird (1988), where entrepreneurial intentions are established on a mix of personal and environmental elements, and Shapero’s model of the entrepreneurial event, which shows how external factors can influence the development of entrepreneurial intentions (Krueger & Brazeal, 1994).

Moving on to consider the outcomes of this paper, the findings show that the dimensions Extraversion, Emotional Stability and Openness to Experience are positively related to entrepreneurial intentions, whereas there is no clear evidence of a relationship between these intentions and the dimensions Agreeableness and Conscientiousness. As far as the extent of the influence of the dimensions is concerned, Openness to Experience has the highest correlation with entrepreneurial intentions, followed by Emotional Stability. The overall conclusion of the research points out that, in general, genetically determined personality traits do influence whether or not people become entrepreneurs. Nevertheless, due to differences between the empirical cases reviewed, the study shows that the Big Five personality traits constructs pose only a modest effect on the entrepreneurship intention. Since research has indicated that these five personality traits have a minor effect on someone’s intention of becoming an entrepreneur, the ways of identifying a potential new venture creator should indeed consider more than the Big Five personality traits.

Finally, studies suggest, though this is not uncontested, that the genetically influenced personality traits can represent key advantages for entrepreneurs, by exerting a strong effect on the pre-entrepreneurial intentions to start a new venture, where intentions successfully predict behaviours.

References:

Bird, B. (1988). Implementing entrepreneurial ideas: The case for intention. The academy of management review, 13(3), 442-453

Koe Hwee Nga, J., & Shamuganathan, G. (2010). The influence of personality traits and demographic factors on social entrepreneurship start up intentions. Journal of Business Ethics, 95, 259-282

Krueger, N. F., & Brazeal, D. V. (1994). Entrepreneurial potential and potential entrepreneurs. Entrepreneurship: Theory & practice, 18, 91-104

Kuratko, D. F. (2005). The emergence of entrepreneurship education: Development, trends, and challenges. Entrepreneurship: Theory & practice, 29(5), 577-597