Do Entrepreneurs Have Traits of Cognitive Biases - Coursework Example

?Do Entrepreneurs have traits or cognitive biases that make them different from other individuals? Cognitive approach is increasingly being implemented as a means of study of the attitudes and behaviors of the entrepreneurs. “The cognitive approach is characterized by the study of certain types of cognitions that, among other aspects, could help to explain entrepreneurial behavior, success in business, the de?nition of entrepreneurs, and to distinguish them from other individuals” (Sanchez, Carballo, and Gutierrez, 2011, p. 433). This paper explores certain characteristics and personality traits that are typical of successful entrepreneurs. Different entrepreneurs generally display different types of personality traits. It is hard to specify a personality pattern for the entrepreneurs. Probably, the varieties of personality among the entrepreneurs are just as many as the number of entrepreneurs. However, there are certain characteristics that are common in most of the entrepreneurs. “[E]ntrepreneurs are business creators that are characterized by the following cognitive aspects: they have a creative and knowing cognitive style, use intuition to make decisions, develop expert scripts, are self-ef?cient in the perception and development of opportunities, create an innovative environment, cope with unexpected challenges, develop investor relations, de?ne business goals, develop human resources, and are prone to innovation and risk taking” (Sanchez, Carballo, and Gutierrez, 2011, p. 436). Research conducted by David McClelland revealed a distinct cluster of personality traits typical of the founders of companies that exhibited rapid growth. McClelland found a high need for achievement among these entrepreneurs. The growth-oriented entrepreneurs have a strong need to succeed and accomplish tough tasks. These entrepreneurs derive the desire for independence from the very desire for achievement. Their need for achievement makes the growth-oriented entrepreneurs to keeping moving from one firm to another. They need constant recognition. Growth-oriented entrepreneurs are very articulate in their manner. They have a low need to conform. This means that although they listen to others, yet they are able to do as they wish. They may go out of the way to do a thing if they consider it right. These entrepreneurs normally work for anywhere between a sixty to eighty hours per week in order to achieve their goals irrespective of the amount of stamina it requires. Growth-oriented entrepreneurs accept risks. The risk involved in the work is too little as compared to the courage and confidence, and the need for achievement of these entrepreneurs. These five personality traits i.e. high need for achievement, low need to comply, persistence, high level of energy and immense tendency to take risk can be condensed into four basic attitudes that are typical of the successful entrepreneurs. These four basic attitudes are optimism, commitment, focus, and drive. Entrepreneurs are generally very optimistic in their approach of thinking and are opportunists (Keh, Foo, and Lim, 2002). The very optimism helps them deal with failures in the rational way. They are confident about the rightness of their cause. Entrepreneurs generally have an external locus of control. “The concept of locus of control refers to a generalized belief that a person can or cannot control his or her own destiny and individuals are classified along a continuum from very internal to very external” (Oben et al., 2011. p. 112). Pessimists consider failure a consequence of their personal mistakes and think that it would last long whereas optimistic entrepreneurs consider that failure occurs from a cause that is beyond their control and that it is short-lived. One of the most fundamental personality traits that entrepreneurs require to succeed is commitment. A business is not made successful overnight. It might take years for a business to reach a level wherein the entrepreneur can become successful. In the time that is spent in between, the entrepreneur tries different combinations of price and product to arrive at one that attracts maximum customers. The early years of a new venture require a uniqueness of purpose which is marked by the term “focus”. Once, they have acquired sufficient capital, then they are able to evaluate their competence in new industries. Drive is the term that represents the high level of energy that is required to be successful as an entrepreneur. It is essentially the entrepreneurs’ ability to keep working uninterruptedly for many hours. It is an individual’s intrinsic motivation that lends him the drive to succeed. Entrepreneurs are so dedicated and involved in their work that many describe their businesses as their “babies” (Cardon et al., 2005). A lot of research has been done in the past to check if the entrepreneurs possess certain traits or cognitive biases that make them different from the ordinary people, but no objective differences have been identified. “While casual observation leads many of us to believe that people who start firms are inherently different from people who seek employment in large existing firms, studies of entrepreneurs have not yet offered a convincing profile of factors that clearly make entrepreneurs different from others” (Vecchio, 2003, p. 322). Conclusion Personality traits have very large continuums. Just like all human beings have the same features of the faced and yet every face looks so different from the other, all human beings carry similar personality traits but to different extents, which is what makes one person completely different from another. Although entrepreneurs are normal human beings carrying the same personality traits as ordinary people, yet literature review suggests that successful entrepreneurs normally exhibit a defined set of personality traits that are very specific of them. These personality traits make the entrepreneurs successful as well as different from the ordinary people. It is like the principles of management or leadership. There are hundreds of books about management and leadership that document the principles of management and leadership and dictate the ways in which an ordinary person can transform into a successful manager or a leader. There is a debate about whether a successful manager or leader is a born manager or leader or becomes one by adopting certain characteristics that are typical of successful managers and leaders. Some philosophers believe that the tendency to be successful as a manager or a leader is in-born and cannot be acquired since one has little control over one’s personality or nature. Other philosophers emphasize upon the tendency in humans to adjust or adapt their personality traits to the requirements of particular roles and responsibilities. Similarly, it cannot be said with utmost surety that a successful entrepreneur is a born entrepreneur or has developed as an entrepreneur with the course of time. However, research has revealed certain characteristics that are typical of successful entrepreneurs just like characteristics of successful managers and leaders have been documented. These personality traits owned by successful entrepreneurs include but are not limited to high need for achievement, low need to comply, persistence, high level of energy and immense tendency to take risk. The entrepreneurs find opportunities of realization and growth in the failures. Entrepreneurship requires commitment on the part of the entrepreneur since it is a very lengthy and energy-consuming process. Many entrepreneurs with huge potential for success don’t become successful simply because they give up in these lean years. Successful entrepreneurs intensely focus their work particularly in the initial stages of their ventures. Successful entrepreneurs generally create their own drive by first establishing a goal, then planning the way to achieve that and finally, making every possible effort to have the goal achieved. Growth-oriented entrepreneurs show a high degree of persistence. They are very hard working and keep looking for ways to make their business all the more profitable. Growth-oriented entrepreneurs make sustained effort, for which they need a very high energy level. While these personality traits are typical of successful and growth-oriented entrepreneurs, it is not necessary that these personality traits cannot be found in ordinary people who are not entrepreneurs. The characteristics of successful entrepreneurs discussed in this paper are not reserved for the success of only entrepreneurs. Indeed, if an individual belonging to any profession exhibits these characteristics, he/she is very likely to achieve success in his/her profession. In light of this discussion, it can be concluded that there are certain personality traits that enhance an individual’s tendency to be successful as a professional in general and as an entrepreneur in particular, and these personality traits can be found in both the entrepreneurs and ordinary people who are not entrepreneurs. Even some entrepreneurs might not have these characteristics as these characteristics belong to the category of entrepreneurs that are successful. Not all entrepreneurs are successful, and accordingly, it is not imperative that all entrepreneurs have these personality traits. Entrepreneurship is a field of work just like other professions. Although it is very different in nature as compared to the professions in which people are employed given an entrepreneur is the owner of his/her business and assumes more power than is generally assumed by the employees in their professions, yet it is not quite rational to consider entrepreneurship as something so different that people associated with this can be thought to be different from the people who are not entrepreneurs. To conclude, successful entrepreneurs have certain personality traits that make them different not necessarily from the non-entrepreneurs, but from the unsuccessful entrepreneurs. References: Cardon, MS, Zietsma, C, Saparito, P, Matherne, BP, and Davis, C 2005, Journal of Business Venturing, Vol. 20, Issue, 1, pp. 23-45. Keh, HT, Foo, MD, and Lim, BC 2002, Opportunity evaluation under risky conditions: the cognitive processes of entrepreneurs, Entrepreneurship: Theory and Practice, Vol. 27, Issue 2, pp. 125-148. Oben, F, Caliskan, SC, Atam, O, and Aksu, M 2011, How much entrepreneurial characteristics matter in strategic decision-making? Journal of Global Strategic Management, Vol. 9, pp. 109-133. Sanchez, JC, Carballo, T, and Gutierrez, A 2011, The entrepreneur from a cognitive approach, Psicothema, Vol. 23, No. 3, pp. 433-438. Vecchio, RP 2003, Entrepreneurship and leadership: common trends and common threads, Human Resource Management Review, Vol. 13, pp. 303-327. Read More