Professional Documents
Culture Documents
Interrelated with this strange pattern of elation and despair, of successes and
failures, we also observe a kind of person who demonstrates a remarkable
resilience in the face of setbacks, with the ability to start all over again when
disappointments and hardships come his way.
The person we are describing, the entrepreneur or the ‘creative destructor’
to use Schumpeter’s3 terminology, is a highly complex individual, certainly
not the simpleton or automaton which many economists would like us to
believe he is. The entrepreneur is obviously not that ‘lightning calculator of
pleasures and pains’, as Veblen‘ once cynically described him and bears no
resemblance to that mythical creature of economic theory, the economic man.
O n the contrary, we are dealing with an individual often inconsistent and
confused about his motives, desires and wishes, a person under a lot of stress
who often upsets us by his seemingly ‘irrational’, impulsive activities.
Notwithstanding the multitude of articles written about entrepreneurship
and the entrepreneurial organization, the entrepreneur has remained an
enigma, his motivations and actions far from clear, a state of affairs aggravated
because of contradictory theoretical and research findings. Consequently, the
purpose of this article is a review of the concept of entrepreneurship and of
empirical studies of entrepreneurial behaviour patterns. Subsequently, social,
economic and psychodynamic forces influencing entrepreneurship will be
explored. A conceptualization of the entrepreneurial personality will be
presented largely based upon interviews and the life histories of a number of
entrepreneurs. Finally the implications of these entrepreneurial behaviour
patterns for entrepreneurial organizations will be discussed.
Entreprenewial Roles
Economists have always looked at entrepreneurs with a great deal of ambi-
valence. The often unpredictable, irrational actions of entrepreneurs do not
fit the economists’ rational, logical schemes; they tend to disturb the implicit
harmony of their models. Generally speaking their attitude toward entre-
preneurship has been one of ‘benign neglect’. Baumol’s exasperated statement
that ‘the theoretical firm is entrepreneurless - the Prince of Denmark has
been expunged from the discussion of Hamlety6is not far from the truth. But
some economists have shown interest in the entrepreneur. Beginning with
Cantillons and Say7 who stressed respectively the uncertainty bearing and
* Schumpeter, Joseph A., Tharie dcr WirtscbajWcbenEnmo&ng, ee Aufl., Munchen und Leibzig:
Dunckerund Humblat, 1931.
4 Veblen, Thorstein, ‘Why is Economics not an Evolutionary Science?’, TbeQuarter~]oMlalof
Economics, Vol. XII, No. 4, 1889, p. 389.
Baumol, William J., ‘Entrepreneurship in Economic Theory’, American Economic Review,
Vol. LVIII, No. 2, 1968, p. 66.
’ Cantillon, Richard, Ersay IW kr Natwe du Commerce en GMral,Londres et Paris: R. Gyles, I 756.
7 Say, Jean-Baptiste, Catechism of PoIitical Economy, London, I 816.
‘977 THE ENTREPRENEURIAL PERSONALITY 37
coordinating functions, the entrepreneur has been discussed by various
economists.
The term ‘entrepreneur’, derived from the French word entreprendre, to
undertake: has been defined and redefined by historians, economists and
sociologists. Forgetting conceptual niceties, students of entrepreneurship
usually define .the entrepreneur as that individual instrumental in the con-
ception of the idea of an enterprise and the implementation of these ideas.
In this process the entrepreneur fulfils a number of functions which can be
summarized as the innovation, the management-coordinating and the
risk-taking functions.
The innovationfutlcion particularly, has been stressed by Schumpetergwho
stated that ‘. . . entrepreneurship . . . essentially consists in doing things that
are not generally done in the ordinary course of business routine’. Schum-
peter’s entrepreneur is an ideas man and a man of action who possesses the
ability to inspire others, and who does not accept the boundaries of structured
situations. He is a catalyst of change, able ‘to carry out new combinations’,
instrumental in discovering new opportunities, which makes for the unique-
ness of the entrepreneurial function. We notice that when a later student of
entrepreneurship such as DruckerlO summarizes the tasks of the entrepreneur
as projection (forecasting the future), combination (of major new develop-
ments), innovation, and anticipation, he is actually doing nothing else than
restating Schumpeter’s original propositions.
Less spectacularbut essential is managing-coordinating which is often regarded
as a second function of entrepreneurship, but here the distinction between an
entrepreneur and a business executive becomes blurred.” Some may even
argue that the term manager and entrepreneur are actually mutually exclu-
sive.12It raises the question of at what stage of an organization’s development
the more ‘bureaucratically inclined’ manager is taking over.
As a third function of entrepreneurship risktaking is worth mentioning.
After Cantillon this notion has particularly been proposed and developed by
KnightI3 who views the entrepreneur as the taker of non-quantifiable
* Redlich, Fritz, ‘The Origin of the Concepts of Entrepreneur and Creative Entrepreneur’,
Expforationsin EntrepremwiafHistory, Vol. I, 1949,pp. 145-66.
0 Schumpeter, Joseph A., ‘Economic Theory and Entrepreneurial History’, in Aitken, Hugh,
G. J. (Ed.),Exphutions in Enterprise, Cambridge, Mass.: Harvard University Press, 1965, p. 51.
Diucker, Peter F., ‘Entrepreneurshipin Business Enterprise’,Journaf of Business Po&, Vol. I ,
NO.I, 1970.
l1 Hartman, Heinz, ‘Managers and Entrepreneurs: a Useful Distinction’, Ahinistrutive Science
Qmrtwb, Val. 3. No. 3, 195% PP. 429-71.
** Schumpeter states that ‘we maintain that someone is only then by definitionentrepreneur if he
“implements new combinations”- after which he loses this characteristic, when he then continues
to manage the founded enterprise systematically’. See Schumpeter, J. A., 1931, op. cit., p. 116
(own translation).
l a Knight, Frank H., Risk, Unccrtointy and Profit, 5th edition, Boston: Houghton-MifRin, 1940.
38 THE JOURNAL OF MANAGEMENT STUDIES FEBRUARY
uncertainties. But with the division of ownership and management, the use
of other than the entrepreneur’s persoral capital sources, the entrepreneur
can be considered more a creator of risk than a taker of it. However, although
the entrepreneur does not necessarily bear the financial risk of an operation,
he is exposed to a considerable degree of social and psychological risks.
More often than not a great decline in prestige and status income is a common
phenomenon in the initial phase of entrepreneurship. The ‘purgatory of
entrepreneurship’, i.e. the period preceding recognition of one’s entrepre-
neurial abilities, can be a time of extreme hardship during which considerable
sociopsychological sacrifices have to be endured. Naturally a certain tolerance
for economic risk is necessary but a tolerance for psychosocial risks might be
more important.
Testing Entrepreneurial Behaviow Patterns
After this brief description of entrepreneurial roles we will turn now to
empirical studies of the entrepreneurial personality. Unfortunately, most of
these studies have not excelled in conceptual clarity. Not only is there a
recurring confusion in definition of differences between entrepreneurs and
managers, but, in addition, many of these studies have focused exclusively
on specific entrepreneurial sub-groups such as the high technology entre-
preneur, or have concentrated on specific personality characteristics which
might contribute to successfulness in company performance. Furthermore,
the great diversity in test instruments has prevented or at least hampered the
possibility of making more general comparisons. But in spite of these seem-
ingly formidable handicaps we might be able to make some generalizations
after reviewing a number of these empirical studies.
The major contributor to the empirical study of entrepreneurship has been
McClelland as presented in his book The Achieving S0cie9.l~Using Thematic
Apperception Tests15 and specific games of skill he discovered that entre-
preneurs scored high on need for achievement (n Ach). He defined this need
as the desire to do well in competitive situations where the results of one’s
effort could be measured objectively. Not only did he find that entrepreneurs
are high on n Ach but they also ( I ) desire to take personal responsibility for
decisions, ( 2 ) prefer decisions involving a moderate degree of risk, ( 3 ) are
interested in concrete knowledge of the results of decisions, and (4) dislike
repetitive, routine work.
In his most recent study McClelland has shifted the emphasis from achieve-
ment to power.’6 He argues that for organizational effectiveness power
McClelland, David C., The Achieving Society, New York: Van Nostrand, 1961.
l4
Murray, Henry A., M a n d for the Thematic Apperception Test, Cambridge, Mass.: Harvard
l5
University Press, 1943.
McCIelIand, David C., Power: The Inner Expaicnce, New York: Irvington, 1971.
‘977 THE ENTREPRENEURIAL PERSONALITY 39
motivation is required. He concludes that high n Power combined with high
self-control (socialized power) as opposed to high n Power and low self-
control (personal power) makes for the greatest organizational effectiveness,
particularly if n Affiliation is also low. Personal power men (power greater
than affiliation, low self-control) characterized by a ‘conquistador motive
pattern’ resemble the entrepreneur and represent those individuals who are
difficult to organize in any kind of system. Their lack of inhibition or self-
control limits their effectiveness as large institution builders in spite of their
success in inspiring people in the initial stage of growth of the organization.
T.A.T.s were also used in a wider context (without the emphasis on n
Ach and n Power) in the Collins and Moore study The Enterprising ~I4an.l’
The major conclusions which Collins and Moore drew from the analysis of
T.A.T.s was that entrepreneurs (I) suffer from a lack of problem resolution
(to use their words: ‘It is as though he panics at the idea of success or too
much success,’18 ( 2 ) prefer to have patriarchical relationships with their
subordinates, (3) are uncomfortable with authority figures which explains
their great need for autonomy, and (4) possess a high degree of anxiety and
self-destructiveness.
Schrage19 was influenced by McClelland’s achievement study and the
Collins and Moore study when he was looking at the successful R and D
entrepreneur and the factors which contribute to successful company per-
formance. His view of the successful R and D entrepreneur was that of a
person high on n Ach, low in power motivation and high in awareness of
self, market, and employees.
Roberts20 and Waine and Rubin21 who were also interested in successful
R and D entrepreneurs and company performance, questioned Schrage’s
findings after discovering discrepancies when the same protocols of Schrage
were rescored by the Motivation Research Group at Harvard. They concluded
from their own study that the highest performing companies were led by
entrepreneurs high on n Ach and moderate on n Power. In addition, they
found that entrepreneurs who were high on n Ach and high on n Power
performed less well than the sub-groups who demonstrated a moderate level
of n Power. If n Ach is an ingredient for success, their findings give some
l7 Collins, Orvis F., Moore, David G. and Unwalla, Darab B., The Enterprising Man, East Lans-
ing: Bureau of Business and Economic Research, Graduate School of Business Administration,
Michigan State University, 1964.
Ibid., p. 61.
Is Schrage, Harry, ‘The R and D Entrepreneur: Profile of Success’, Harvard Business Review,
Vol. 43, No. 6, November/December 1961, pp. 56-69.
2o Roberts, Edward B., ‘A Basic Study of Innovators: How to Keep and Capitalize on Their
Talents’, ReIeurch Management, Vol. XI, No. 4, 1968.
Waine, Herbert A. and Rubin, Irwin A., ‘Motivation of Research and Development Entre-
preneurs: Determinants of Company Success’,J o m d of Applied Psychology, Vol. 53, No. 3, 1969,
pp. 178-84.
40 T I E JOURNAL OF MANAGEMENT STUDIES FEBRUARY
1975.
97 Rotter, Julian B., ‘External Control and Internal Control’, Psycbologv Today, June 1971.
42 THE JOURNAL OF MANAGEMENT STUDIES FEBRUARY
Smith, Norman R., The Entrepreneur and His Firm: the Relationship Between Type of Man and
Qpe of Company, East Lansing: Michigan State University, Graduate School of Business Adminis-
tration, 1967.
39 Roberts, Edward B. and Wainer, Herbert A., ‘Some Characteristics of Technical Entre-
preneurs’, Research Program on the Management o j Science and Technology, Massachusetts Institute of
Technology, 1966, pp. 147-66; Roberts, Edward B., 1968, op. cit.; Cooper, Arnold C., ‘Technical
Entrepreneurship: What Do We Know?’, Research and Development Management, Vol. 3 , Oxford:
Basil Blackwell, 1973, pp. 79-64.
‘977 THE ENTREPRENEURIAL PERSONALITY 43
questioned. Overlap in types is very likely and the question of other types
may be raised.
Naturally, the possibility exists that a new type of entrepreneur is emerging;
an individual who is better educated, not as impulsive, less concerned about
control and independence and more adaptive in his approach to the environ-
ment. If this is a trend in entrepreneurship, its impact on existing large
companies (as far as internal entrepreneurship is concerned, creation of new
product ventures and new technology divisions in existing companies) could
be enormous. Perhaps ‘internal’ entrepreneurship in large bureaucratic
organizations is the inevitable response to organizational decay and inertia.
Which organizational parameters are important to create a work environment
congenial to ‘internal’ entrepreneurshipis another issue worth exploring, but
will not be dealt with in this paper.
Patterns in Entreprenewsbi)
After this short interlude speculating about possible entrepreneurial types, we
will continue this article by reviewing some of the social and economic
factors which influence entrepreneurship. Many writers who have studied
demographicpatterns among entrepreneurs have indicated that entrepreneurs
frequently belong to ethnic or religious minority gr0ups.~0Max Weber’s
‘Protestant Ethic thesis’41can be viewed as the starting point in the introduc-
tion of hypotheses of this nature. The Santri Moslems of Java, the Jains,
Parsees, and Sikhs in India, Indians and Chinese in South-East Asia, Lebanese
in North Africa, Ibos in Nigeria and the Jews in various parts of the world
are only a few illustrations of the role minorities play.
The hypothesis is often put forth that the possession of, and belief in,
different value systems from that of the mainstream of society will contribute
to the development of unconventional patterns of behaviour-entrepreneur-
ship being one of them. Hagen4*postulates a cycle of events which culminates
in the emergence of the entrepreneurial personality. In a society characterized
by traditional values (as reflected in child-rearing practices) status deteriora-
tion of a particular segment of the population may cause a psychosocial
disequilibrium leading to a situation of withdrawal of status respect and
depletion of self-esteem. Anger, anxiety and suppression of traditional values
follows eventually, contributing to a state of retreatism for this particular
40 Roberts, Edward B. and Wainer, Herbert, A., ibid.; Hagen, Everett, On the Theoty of Social
Change, Homewood, 111.: Dorsey, 1962; Kasdan, Leonard, ‘Family Structure, Migration and the
Entrepreneur’, Comparative Studies in Sacit@ and Hirtory, Vol. VII, No. 4, 1965; Kets de Vries,
Manfred, F. R., Tbe Entreprenew as Catabst .fEconomic and C n h r a l Change, unpublished Doctoral
Dissertation, Harvard University, Graduate School of Business Administration, 1970.
4 1 Weber, Max, The Protestant Ethic and the Spirit o
f Capitalirm, translated by Talcott Parsons,
New York: Scribner, 1930.
4 8 Hagen, Everett, op. cit.
44 TlIE JOURNAL OF MANAGEMENT STUDIES FEBRUARY
keepsie, New- York’, Bw’tPzr History Review, Vol. 35, No. 4, 1961; Collins, 0. F., Moore, D. G.
and Unwalla, D. B., op. cit.; Roberts, Edward B., op. cit.; Litvok, I. A. and Maule, C. J., op. cit.;
Ket de Vrics, hl. F. R., op. cit.
‘977 THE ENTREPRENEURIAL PERSONALITY 41
originating from selected segments of society might have a greater disposition
for developing entrepreneurial characteristics. We are not describing a causal
relationship but probably only a part of a more complex phenomenon which
contributes to the emergence of entrepreneurship. Changes in institutional
patterns such as the legal system, infrastructure, technology, the political
situation and resource availability will be other important dimensions.
As we have pointed out, environmental turbulence appears to be one of
the dimensions responsible for the emergence of entrepreneurship. And this
relationship is not only applicable to society at large but has some validity for
individual industry segments. For example, Peterson and Berger46 drew
attention to the fact that in the popular music recording industry the emer-
gence of entrepreneurship has been directly associated with the degree of
turbulence in the industry. But, again we have to be careful not to arrive at
simple causal relationships. These various studies point at an environmental
turbulence-entrepreneurship loop, but the exact nature of these inter-
relationships is far from clear and extremely complex.
Entreprenezlrial Family DynamicP
In view of these frequently encountered general background factors of
entrepreneurs and the importance of turbulence in the environment it
follows that the childhood of many of them is portrayed as a very disturbing
experience. Discussions with entrepreneurs are more often than not filled with
images of endured hardships.*’ Desertion, death, neglect and poverty are
themes which continue to be brought up in conversations with entrepreneurs.
And in these conversations facts and fantasies about hardship intertwine and
become indistinguishable. This pattern seems to belong to entrepreneurial
mythology and the entrepreneurs usually oblige. It is worth realizing that as
far as personality dynamics are concerned, the difference between perceived
and real hardship is rather slim. For the impact on personality it is perception
that counts, even if distorted.
In these ‘memories of things past’ the father appears to be the main villain
in the life history of entrepreneurs. He is frequently blamed for deserting,
manipulating, or neglecting the family. Death may be interpreted by a child
as the ultimate form of desertion or rejection. What these conversations and
d5 Peterson, Richard A. and Berger, David G., ‘Entrepreneurshipin Organizations: Evidence from
the Popular Music Industry’,AnminirtrutiveScience~~~rtctly,Vol. 16, No. I, March 1971, pp. 97-106.
46 Forty entrepreneurs were interviewed by the author, individuals who were operating in a
wide range of industries. The interviews were of an open-ended nature to have maxiinurn co-
operation and a minimum of strain (no psychological tests were used). In addition, thirty life
histories of entrepreneurs were studied (autobiographies, biographies and selected articles).
Collins, Moore and Unwalla’s study The Enterpriring Man was also very influential in formulating
concepts for this article.
47 Collins, 0. F., Moore, D. G. and Unwalla, D. B., op. cit.; Collins, Orvis, F. and h.ioore,
David G., The OrguniTution Makerf, New York: Appleton-Century-Crofts, 1970.
46 THE JOURNAL OF MANAGEMENT STUDIES FEBRUARY
hostile wishes against parental figures or, more generally, all individuals in
a position of authority. Distrust and suspicion of everyone in a position of
authority forces the entrepreneur to search for non-structured situations
where he can assert his control and independence. He is also an individual
who tends to deny his hostile wishes and projects these on the outside world.
And it is extremely hard, if not impossible for individuals with an entre-
preneural disposition to integrate their personal needs with those of organi-
zations. To design one’s own organization, to create and structure organiza-
tions centred around themselves - often becomes the only alternative.
The ‘reactive mode’ which characterizes entrepreneurial behaviour makes
for an extremely unstable personality make-up. Since prestige, power, and
self-confidence are used as reassuring weapons to deal with low self-esteem,
inferiority and related feelings of anxiety, any perceived depletion of these
outward symbols may be the cause of a psychological disequilibrium and
trigger off impulsive reactions. If self-confidence is weak and inner hostility
provokes guilt feelings, punishment is expected unconsciously. Any sign of
failure means that expected punishment is at hand, any sign of success may be
interpreted as an achievement not really deserved, which again indicates that
punishment is not far off. Although the entrepreneur fears failure, the
‘irrational’ unconscious notion prevails that punishment is deserved, be it
only for hostile wishes against authority figures. Using the same kind of
logic, success only means that punishment will follow immediately and
therefore causes anxiety about future failures and punishments. Given the
existence at an unconscious level of fear of success and fear of failure, com-
bined with impulsivity of action and forgoing thorough deliberation and
judgement, it is not surprising that the careers of many entrepreneurs appear
to be a iemarkable succession of business successes and failures. Actually,
because of this psychological process the entrepreneur may feel at his best
when he has reached ‘rock bottom’. His feelings of guilt being ‘paid off’, he is
‘free’, unburdened, able to start all over again.
We notice how the entrepreneur emerges as a psychological risk taker
subjected to a high degree of psychosocial risks. Due to intrapsychic trans-
formations, original feelings of helplessness, dependency and rejection are
replaced by a proactive style in which power, control and autonomy become
predominant issues. What used to be an inclination toward submission and
passivity becomes an active impulsive mode of behaviour. The entrepreneur
may follow what is sometimes described as an ‘identificationwith the aggres-
sor’ pattern.53 The role of the passive, helpless victim is replaced by acting
the role of the one in control. We have indicated before that the often self-
employed father was frequently an undependable and terrifying influence to
m Freud, Anna, Tbe Ego and tbe Metbanisms of DeJeme, London: Hogarth Press and the Institute
of Psycho-Analysis, 1937.
I977 THE ENTREPRENEURIAL PERSONALITY I1
the entrepreneur in his youth. Now the roles have changed; after having been
continuously manipulated at an early age, the entrepreneur will do the
manipulation himself (identify with the agressor) in a compensatory fashion,
reliving these actions as a kind of ‘protective reaction’ against first his father
and later authority figures in general. We see that the inability to function in
structured situations makes it necessary for him to design his own organiza-
tion where he is in control and at the centre of action. His achievements in
setting up enterprises become important tangible symbols of prestige and
power and a way of bolstering an easily depleted, insecure sense of self-esteem.
But his achievements are not sufficient to ward off a persisting sense of
anxiety and other stress indicators. Rejection, dissatisfaction and a sense of
failure follow the entrepreneur like an inseparable shadow. (A summary of
the various psychological forces working upon the potential entrepreneur is
given in figure I.)
The Entrepreneurial Work Environment
The preparatory period of entrepreneurship, as we have seen, is accompanied
by authority conflicts, failures in organizational socialization, difficulties in
adapting to organizational structure and predictable job-hopping behaviour,
which has set the stage for the very unique relationship of the entrepreneur
with his enterprise. Expectedly, the enterprise becomes the new setting where
the entrepreneur’s problems in adaptation and conforming to structure are
accentuated and dramatized. Naturally, the enterprise itself becomes the
tangible symbol to the entrepreneur of his success in ‘overcoming odds’ and
assumes a much greater symbolic emotional significance than the reality of
the situation may warrant. The enterprise is much more than merely a vehicle
for profit maximization; it is not only the entrepreneur’s contact with reality
but, in addition, demonstrates his ability to create a new reality derived from
confused internal images centred around conflict and frustration with author-
ity figures. In a psychodynamic sense - using the defence reaction formation
- the enterprise symbolizes the capacity of the entrepreneur in solving and
compensating for endured childhood frustrations and hardships by creating
an environment where, for a change, he is in control, not dependent on the
whims and favours of undependable authority figures -a situation which
was so resented in the past. Unlike the manager’s relationship with organiza-
tions, the level at which an entrepreneur deals with his own organization is
therefore far more intense and conflict ridden; this pattern cannot be explained
merely by the higher financial risks at stake. While previously avoidance of
structure and organizations was his way of coping with life, his own organiza-
tion becomes the end of the road. For the entrepreneur there seems no other
place to go, a development which contributes to the emotional significance
of the enterprise.
THE JOURNAL OF MANAGEMENT STUDIES FEBRUARY
Environmental
turbulence
i I
I Percept* High perception I
I of rejection of control I
I I
I I
I I
I I
I
I I
I I
I I
I I
I I
I I
1 I
I Ent repreneuria I I
I personality I
I I
I I
1 1
I I
I I
1 I
I I
I I
I I
I I
I I
I I
I Anger, hostility Identity
I and guilt confusion I
I (identification with I
I
the aggressor) I
I I
I The 'reactive' mode
I
1 (guilt - ridden rebelliousness; I
1 impulsivity ; deviont behaviour; I
I inter-personal problems; I
I non- acceptance of structure; I
I difficulty with authority; denial, I
I projection, reaction formation 0s I
I defenses 1
I
* 977 THE ENTREPRENEURIAL PERSONALITY 13
But this very fact of complete psychological immersion of the entrepre-
neur - a factor which may have been a key ingredient for the initial success
of the enterprise - can lead to serious dysfunctional developments in the
future in the case of continued growth of the enterprise. What we frequently
encounter in an entrepreneurial organization is an organizational structure
and work environment completely dependent and dominated by the entre-
preneur. The enterprise is run in a very autocratic, directive way whereby all
the decision-making processes centre around the entrepreneur. We are also
faced with an individual who refuses to delegate, is impulsive, lacks any
interest in conscious, analytical forms of planning, and engages regularly in
bold, proactive moves. Bold and proactive moves make for the initial
successes and may contribute to the continued success of the enterprise, but
due to the absence of a conscious planning eEort also carry a high risk
component. The entrepreneur makes no distinction between operating,
day-to-day decision-making and more long-term strategic moves. The
impulsivity of his style, his lack of deliberation and judgement, the impor-
tance of ‘hunches’ also makes for a rather limited time horizon. The entre-
preneur has no sense of priorities and may spend equal time on the greatest
trivia as on major strategic decisions.
Within the organization power depends on the proximity to the entre-
preneur, is constantly changing and creates a highly uncertain organizational
environment. This state of affairs contributes to a highly politically charged
atmosphere where changing coalitions and collusions are the order of the day.
The suprastructure is poorly defined, a formal organization chart is outdated
by the time it is drawn, or non-existent. It basically resembles a ‘spider’s
web‘ with the entrepreneur in the centre, who is constantly changing loyalties
and keeping his subordinates in a state of confusion and dependence. The
organization has usually a poorly defined or poorly used control and infor-
mation system (no sharing of information); there is an absence of standard
procedures and rules and a lack of formalization. Instead, we notice the use
of subjective, personal criteria for the purpose of measurement and control.
Job descriptions and job responsibilities are poorly defined or non-existent.
This situation contributes to a high incidence of role conflict and role
ambiguity leading to low job satisfaction, low self-confidence, a high degree
of job-related tension, a high sense of futility and low confidence in the
organization.54 Withdrawal or avoidance behaviour and a reduction in
communication among employees also becomes symptomatic. Information
hoarding turns into a common practice and contributes to the general state
of disorganization. In addition, given the ‘spider’s web’ structure, the
number of people reporting to the entrepreneur will be large, adding to a
64 Kahn, Robert L., Wolfe, Donald M., Quinn, Robert P. and Snoek, G. Diedrick, Orgun+-
tioml Stress: Stdies in Role Conflict and Ambigrdry, New York: WiIey, 1964.
j4 THE JOURNAL OF MANAGEMENT STUDIES FEBRUARY
6s Danny Millei in his doctoral dissertation gives an elaborate description of these dimensions.
He uses these dimensions in the formulation of organizational archetypes and the description of
their strengths and weaknesses. (See Miller, Danny, StrufeB Making in Context: Ten Empirical
Archetypes, Doctoral Dissertation, McGill University, Faculty of Management, 1976.) For a
conceptualization of pathways to success and failure of organizational archetypes including
entrepreneurial variations see Miller, Danny, Friesen, Peter and Kets de Vries, Manfred F. R.,
The Strategic Audit: and Why Your Organization Mkht Need It, McGill University Working Paper,
1976.
56 THE JOURNAL OF hlANAGEMENT STUDIES FEBRUARY
5d Levinson, Harry, ‘Conflicts that Plague Family Businesses’, Hurvurd EurinGss &view, Vol. 49,
No. z, March-April 1971, pp. 90-8.
b’ Jardim, Anne, Tbe First Henty Ford: a Stdy in Persomlity and Buziness Lea&sb$, Cambridge,
Mass.: MIT Press, 1970.
'977 THE ENTREPRENEURIAL PERSONALITY 57
highly creative and imaginative but, on the other hand, highly rigid, unwilling
to change, incapable of confronting the issue of succession. firistensens*
after studying over a hundred companies, came to a similar conclusion struck
by the frequency in which he encountered a denial of the reality of the
succession issue among the entrepreneurs.
Succession becomes identified with loss and losing out and therefore takes
the meaning of a taboo. But the issue of succession is inevitable not only for
reasons of age but also because of increasing maturation and growth of the
company. The entrepreneur is no longer alone, other interest groups such as
employees, family members, bankers, customers, suppliers and the govern-
ment are getting involved. Depending on the strength of the entrepreneur's
position they can have some influence on the policies of the enterprise. But
change by this type of pressure is usually only of a modest character. A more
drastic type of change is needed for continued growth and success of the
enterprise apart from changes caused by old age or death. We imply here the
attainment of a sense of psychological maturity on the part of the entre-
preneur. This means a willingness to assess his personal strengths and
weaknesses to master his conflict-ridden behaviour and overcome and
surpass the problems of the past. But adaptation to present-day reality and
foregoing the legacies of his personal history requires a considerable basis of
self-awareness and insight. Important as this psychological state might be for
the continued survival of the enterprise for overcoming rigid behaviour and
greater ffexibility in operating modes, adaptation of this kind is rare and
hard to attain. More often than not, separation from the enterprise by the
entrepreneur in one form or another turns out to be the only alternative for
the purpose of survival. This development highlights the depressive facet of
the entrepreneurial dimension. While the entrepreneurial spirit is one of the
strong countervailing forces preventing decay and decline of the economy as
a whole, in the final deliberation, the entrepreneur pays an extremely high
price in an emotional sense in this process of economic growth.