The Psychology of the Entrepreneur

This chapter surveys the psychological literature on entrepreneurs, published prior to 1982, including research on their personal characteristics and previous personal and business experiences. There is no well-defined population of entrepreneurs (due to lack of consensus on definition), so comparisons and generalizations are dangerous; however, there is some consistency in psychological characteristics. Three categories of research are discussed. (1) Psychological characteristics. A causal link between high need for achievement and small business ownership is not found; an internal locus-of-control belief does not distinguish entrepreneurs, but may identify successful ones; propensity for risk-taking may not be related to either entrepreneurship decision or success; personal values (need for achievement, independence, and effective leadership) may effectively distinguish successful entrepreneurs from the general population. (2) Effects of previous experience. Dissatisfaction with previous jobs (except pay) characterizes entrepreneurs; an unemployed person is more likely to start a business; and a large percentage of entrepreneurs had role models who were entrepreneurs. (3) Personal characteristics associated with entrepreneurs. Entrepreneurial decisions are most likely made between ages 25 and 40; entrepreneurs are better educated than the general population; and entrepreneurs are likely to remain in their home area. The research is synthesized into a tentative model of the entrepreneur. Future research subjects and methods are proposed. (TNM)