Entrepreneurial characteristics - Essay Example

? Topic: Lecturer: Presentation: Introduction An entrepreneur according to Nagendra and V.S (2008: 148) is “a person who organizes and manages a business undertaking and assumes risk for the sake of profit.” For one to be an entrepreneur, there are certain characteristics and skills that he/she should possess although it depends on people perceptions. Some people would view some skills as necessary while others have a different set of skills which they consider essential for a successful entrepreneur. An entrepreneur is a self-starter who is able to see opportunities and by using creativity and innovation, be able to successfully start a unique business or develop new products. To do this, he/she needs to have a vision, marketing skills, good communication skills, financial skills, good time management skills, administrative skills and also leadership skills. The type of entrepreneur depends on the kind of characteristics, behavior or attributes that he/she possesses. These attributes play a great role in determining the kind of skills possessed by the entrepreneur. For example, a person who is self-confident, persuasive, a good listener, inspirational has the marketing skills required to sell the business and its products. There are various theories that try to explain the personality of individuals or entrepreneurs such as the leadership theories, self-efficiency theory, effectuation theory, behavioral and communication theories among others. The paper will discuss these theories in trying to explain the entrepreneurial characteristics and also the extent to which these characteristics are found within the range of skills that they should possess. The self-efficacy theory advanced by Albert Bandura is based on the belief in oneself. Robbins and Judge (2010) interpret self-efficacy as the belief that one has the capability to organize and execute courses of action that are required to achieve specified goals. Individuals have different perceptions of themselves; some high expectations of achieving a certain objective while others do not believe in themselves hence they fear to initiate anything rest they fail. Self-efficacy thus determines how the entrepreneur pursues goals, tasks and challenges (62). A successful entrepreneur should have self-confidence so as to be able to set and achieve goals and also to get other people to believe in what he/she is doing. The self-efficacy theory is also based on experience. Most people observe entrepreneurs starting up businesses and either succeeding or failing. Depending on what one observes, his perception may change. For example, if one has experience of observing someone start up a business and fail, he may fear engaging in such a venture. People with high self-efficacy have the drive and motivation to attain certain goals and continue even if the business is not prospering since they believe they can make it. On the other hand, those with low efficacy do not have the motivation to start a business but Robbins and Judge (2010) argue that this is needed to allow an entrepreneur to learn more about the business before venturing into it. The effectuation theory advanced by Saras Sarasvanthy is based on the belief that there exists a market which an entrepreneur should discover. The entrepreneur in this case has the knowledge, skills, and the resources needed to start a business but the question is, is he/she ready to take risks? An entrepreneur should therefore be able to take risks since he is venturing into a business with an unpredictable future. Instead of calculating the returns from the business undertaking, the individual can venture in any business and shape its destiny (Sarasvanthy, 2008). Contrary to self-efficacy theory, one is not influenced by observing others but takes own initiative into the unknown. The entrepreneur in this case possesses such characteristics as risk taker, creative, good in grasping opportunities, decisive, likes learning by doing, and is a team builder since his work involves building alliances with others. The entrepreneur is also the business manager hence is supposed to possess leadership qualities. There are three theories of leadership that depict an effective leader; the trait theory, behavioral theory, and the contingency theory. The trait theory is based on the principle that people possess different qualities since individuals are different (Nieuwenhuisen, 2008). The entrepreneur thus should be intelligent, initiative, decisive, risk takers, self-confident, self-actualization among others. The success of the entrepreneur thus depends on the traits one possesses which are inborn and not learnt as Bandura asserts in his self-efficacy theory. The problem with this theory is that there are many entrepreneurs who have been successful in their undertakings but do not possess these characteristics. Sometimes, one may have these characteristics but the situation may affect his performance (Nagendra & V.S, 2008). Contrary to the trait theory, the behavioral theory is based on the behavior of the person and not his traits. According to this theory, whatever an individual does determines his/her qualities hence leaders are seen as behaving in a manner different from non leaders (Nagendra & V.S, 2008). Just as the self-efficacy theory, the behavior of the leader can be learnt by observing others or through training. Some leaders are task oriented hence concentrate on getting tasks being done at all costs. They thus engage in job designing, designing work processes and maintaining close supervision as well as using their power to influence. Others are people oriented in that they are concerned with the welfare of employees and other stakeholders more than the job. Others prefer to give full responsibility to employees while others try to balance people and tasks. Some leaders emphasize team work hence are both people and task oriented and according to research, these are the most successful (Nieuwenhuisen, 2008). Two types of qualities emerge from this theory; autocratic and democratic leaders and those who are democratic are the most successful and possess qualities such as motivators, good interpersonal relationship, sensitivity, and are good listeners. The contingency theory is based on the belief that an effective leader is able to adapt to any situation. Different leadership style is required in different situations hence the leader should be able to decide on the appropriate style to use. Just as the efficacy theory, the entrepreneur should know the environment in which he is establishing for him to make sound decisions for successful business. A leader in this case possesses qualities such as; good negotiation skills, cultural sensitivity, integrity, personal drive, good interpersonal relationship qualities, good planner and a team player (Carsrud & Brannback, 2007). Good communication skills is one of the important characteristic required of an entrepreneur so as to be able to market the business, get customers, sell products and have a continued good relations with all stakeholders. Communication can be verbal or non verbal but effective communication determines the success of the business venture. Verbal communication entails written messages such as memos, business plans, news releases, adverts, journals among others. The entrepreneur should have good writing skills to be able to write business plans, make financial forecasts, prepare invoices and be able to deal with suppliers effectively (Carsrud & Brannback, 2007). Non-verbal communication entails use of sign language to communicate. According to Nieuwenhuisen (2008), the first impression of a person determines the quality associated with the person but it could be wrong. The facial expression, body language, silence, eye-contact, way of dressing tells a lot about a person. An effective entrepreneur should thus be able to discern the behavior of the persons he/she is dealing with by judging the total context and not just few signs. He should be able to read and interpret non-verbal cues so as not to judge people wrongly. Sensitivity is also required when dealing with non-verbal behavior hence the entrepreneur is one who is able to satisfy the needs of the people he is dealing with. Besides the trait, behavioral, and situational theories of leadership the charismatic theory also is essential in determining qualities of a good leader. The charismatic theory is based on the ability of people to charm or influence others (Nagendra & V.S, 2008). Charismatic leaders portray qualities such as self-confidence, sensitivity, risk taking, and great articulation. Contrary to the self-efficacy and behavioral theories that emphasize the role of learning in developing good qualities, charismatic leaders influence the behavior of others. All these characteristics are on a large extent found on the range of skills an entrepreneur should have in order to be effective. These skills include; sales and marketing skills, financial planning skills, motivational skills, administrative skills, leadership skills, communication skills among others. A good entrepreneur should be able to attract customers and market products (Robbins & Judge, 2010). This requires verbal as well as non-verbal communication to be able to make business plans, adverts and relate well with customers and suppliers. Good listening skills enable the entrepreneur to understand customers and take advice from those who matter. Sensitivity is required for an entrepreneur to able to satisfy the needs of the employees, customers and suppliers. Financial knowledge is essential for an entrepreneur to be able to make use of the available resources. The entrepreneur thus needs to be decisive so as to make firm decisions on how to invest capital (Nieuwenhuisen, 2008). Having good verbal and non-verbal skills to attract capital and make financial statements is also crucial. Risk taking attitude and persistence is vital to prevent one from giving up when things are not working. To make sound financial decisions, he/she should have good judgment and be a visionary. The motivational skills are required for success. One should therefore have an inner drive, self-confidence, ability to influence others, and a good team leader. The entrepreneur often works alone and therefore needs to have administrative skills. He thus requires such qualities as; good verbal and non-verbal communication, hard worker, able to adapt to situations, good planner, self-efficacy and charisma among others. Leadership skills determine the success of the business. Effective leaders are motivation, self-confident, can adapt in any situation, are sensitive to people’s needs, and are good team workers (Carsrud & Brannback, 2007). By exploring the characteristics and skills of entrepreneurs, I have a better understanding of what characteristics an entrepreneur should possess. He does not have to be a risk taker but must have confidence in himself and have good leadership qualities. Success is not dependent on any one of the leadership styles or theories but is dependent on the situation surrounding the entrepreneur hence he should be environmentally sensitive. The current set of skills has been improved in that more characteristics have been added to the set of skills such as being a team player, sensitivity, and multi-tasking behavior. References Carsrud, A., Brannback, M. 2007. Entrepreneurship. Westport, CT: Greenwood Press. Nagendra, S., V.S, Manjunath. 2008. Entrepreneurship and Management. Bangalore: Sanguine. Nieuwenhuisen, C. ed.2008. Entrepreneurial Skills. 2edn. Cape Town: Juta and Co Ltd. Robbins, S., Judge, T. 2010. Essentials of Organizational Behavior. 10edn. prentice hall. Sarasvathy, S. 2008. Effectuation: Elements of Entrepreneurial Expertise. UK: Edward Elgar. . Read More