ENT 101 Chapter 3 Entrepreneurial Characteristics and Competencies

ENTREPRENEURIAL
CHARACTERISTICS AND
COMPETENCIES
INTRODUCTION
A lot of research in the entrepreneurial field has focused

on finding the characteristics that set entrepreneurs and
their firms apart from others.
Entrepreneurship reflects complex interactions between

the individual and the situation, which has to be dynamic
because business situations are always changing
INTRODUCTION
Elizabeth Chell, a social psychologist, has examined

numerous psychological trait-based approaches and
concluded that, whilst psychological aspects such as
‘entrepreneurial intention’ and the ‘ability to recognize
opportunities’ are strongly linked to entrepreneurial
behavior, the context in which the entrepreneur operates
is also very important.
INTRODUCTION
Perceptions and judgment are, therefore, key elements in

this process.
‘Judgment’ is one of the qualities that distinguishes the

successful entrepreneur from the much larger group of
non-entrepreneurial SME owners. Business judgment can
reflect an innate ability but most frequently it directly
derives from experience (or, more accurately, learning from
experience).
INTRODUCTION
However, past experience can also filter out our ability to

spot new opportunities or threats. Cultural effects related
to family, locality and friends can help us interpret the
world but they can also color what we see. The same may
be true of the influences from various networks that
business owners often belong to.
And, of course, our own expectations and motivations of

what we hope for in life, at work and in terms of a career
will affect both judgment and business behavior.
BUSINESS JUDGMENTS
The Open University Business Schools (OUBS) has

conducted research in this area over the years.
Apart from the effects of the various influences that can

affect business judgments, the main points to note are:
1. Business situations consist of real challenges,

constraints and opportunities that directly impact on
the business performance of a firm.
BUSINESS JUDGMENTS
2. However, it is how entrepreneurs perceive these that

guide their judgments and actions (which is why accurate
market information, the ability to learn and experience are
so important).
3. Business perceptions are also influenced by personal

and business motivations, peer pressures and cultural
influences (it could be argued that entrepreneur’s
perceptions are more closely aligned with reality).
BUSINESS JUDGMENTS
4. Entrepreneurial behavior is guided by the

entrepreneur’s expectations rather than a rigid set of
strategic objectives (again, it may be that the
entrepreneur’s expectations are more realistic and,
maybe, more ambitious than those of other business
managers).
5. The process is not static but very dynamic with

feedback and signals from the market consciously and
indirectly affecting later decisions and actions.
BUSINESS JUDGMENTS
The influences and processes in the reality of

entrepreneurial business is complex.
According to the Massachusetts Institute of Technology

by Jeffrey Timmons and colleagues, there are 14
important entrepreneurial characteristics of successful
enterprise owners that should be noted:
BEHAVIORAL CHARACTERISTICS
OF ENTREPRENEURS
1. Drive and energy

2. Self-confidence
3. High-initiative and personal responsibility
4. Internal locus of control
5. Tolerance of ambiguity
6. Low fear of failure
7. Moderate risk-taking
OF ENTREPRENEURS
8. Long-term involvement
9. Money as a measure not merely an end
10. Use of feedback
11. Continuous pragmatic problem solving
12. Use of resources
13. Self-imposed standards
14. Clear goal setting
OF ENTREPRENEURS
1. Drive and energy
This is the urge to create things, the force that

sustains the momentum of progression in the
business venture.
OF ENTREPRENEURS
2. Self-confidence
This is the cornerstone of entrepreneurial success.

With unwavering self-belief, they can overcome
challenges, inspire others and navigate the ever-
changing landscape of entrepreneurship.
OF ENTREPRENEURS
3. High-initiative and personal responsibility
Initiative is all about taking charge. This shows a

willingness to get things done and take
responsibility.
OF ENTREPRENEURS
4. Internal locus of control
This means that a person believes that their

behavior determines what happens to them and
that they can control their own behavior.
OF ENTREPRENEURS
5. Tolerance of ambiguity
This pertains to how an individual is comfortable

with uncertainty, unpredictability, conflicting
directions, and multiple demands.
OF ENTREPRENEURS
6. Low fear of failure
Having courage that will prevent the person’s

chance to try taking risks.
OF ENTREPRENEURS
7. Moderate risk-taking
Willingness to engage in businesses and projects

that have a moderate level of risk involved and
where they believe that the odds and favors are in
equal probability.
OF ENTREPRENEURS
8. Long-term involvement
Being committed and involved in a much longer

time. Dedicating time and effort for achieving long
term goals
OF ENTREPRENEURS
9. Money as a measure not merely an end
The belief that money is a tool and not a goal. A

means to help the entrepreneur achieve what he or
she wants.
OF ENTREPRENEURS
10. Use of feedback
It is through feedback that an entrepreneur can

confirm whether their business goals are reaching
and satisfying their customers or not.
OF ENTREPRENEURS
11. Continuous pragmatic problem solving
The entrepreneur should learn solving problems in

a sensible way that suits the conditions that really
exist now, rather than obeying fixed theories, ideas
or rules.
OF ENTREPRENEURS
12. Use of resources
The goal is to use the best combination of

resources to satisfy requirements and to enable
projects and be able to deliver them within the
time and budget.
OF ENTREPRENEURS
13. Self-imposed standards
The ones the entrepreneur have made up for

himself to follow. A subjective measure that drives
behavior of a person that often starts with the
words, “I should” or “I must”.
OF ENTREPRENEURS
14. Clear goal setting
This is creating specific objectives for the future.

The entrepreneur should establish short- or long-
term objectives, define their business goals
especially before they get started.
OF ENTREPRENEURS
These characteristics appear consistently in other

entrepreneurial research studies.
Timmons admitted that few entrepreneurs would

possess all traits but felt that strengths in one might
compensate for weaknesses in others. Many of these
characteristics are self-explanatory and some appear
to be linked to each other.
ENTREPRENEURIAL
COMPETENCY
An entrepreneur is expected to interact with different
environmental forces which require him to be highly
Dani Martinez
Lorem ipsum dolor sit amet, consectetur
competent in different dimensions like intellectual,
adipiscing elit. Duis vulputate nulla at
ante rhoncus, vel efficitur felis
attitudinal, behavioral, technical and condimentum.

managerial Proin odio odio.
aspects.
Drew Feig
Entrepreneurs are therefore challenged to dolor
Lorem ipsum deploy a set
sit amet, consectetur
of competencies to succeed in their entrepreneurial
condimentum. Proin odio odio.
endeavors.
Definition
Dani Martinez
Entrepreneurial competencies can be defined as adipiscing elit. Duis vulputate nulla at
underlying characteristics such as generic and specific

knowledge, motives, traits, self-images, social roles

and skills that result in venture birth, survival and/or
Drew Feig
growth. (Bird 1995) Lorem ipsum dolor sit amet, consectetur
Types of Competencies
Dani Martinez
The competencies may be classified into 2 categories: adipiscing elit. Duis vulputate nulla at
1. Personal entrepreneurial competencies

2. Venture initiation and success competencies
Drew Feig
Enterprise launching competencies Lorem ipsum dolor sit amet, consectetur
Enterprise management competenciesante rhoncus, vel efficitur felis
Types of Competencies
Dani Martinez
The competencies may be classified into 2 categories: adipiscing elit. Duis vulputate nulla at
1. Personal entrepreneurial competencies

2. Venture initiation and success competencies
Drew Feig
Enterprise launching competencies Lorem ipsum dolor sit amet, consectetur
Enterprise management competenciesante rhoncus, vel efficitur felis
1.Personal Entrepreneurial Competencies
It is the personal characteristics of an individual to perform

tasks effectively and efficiently.
Initiative - Entrepreneur should be able to take actions that

go beyond their job requirement and to act faster. They do
things before being asked or compelled by the situation and
acts to extend business into new areas, products or services.
Sees and acts on opportunities - Entrepreneurs always

look for and take action on opportunities. They see and seize
those opportunities to obtain financing, equipmen,
workspace or assistance
Persistence - Entrepreneurs are able to make repeated
efforts or to take different actions to overcome an obstacle
that get in the way of reaching goals..
Information seeking - Entrepreneurs are able to take

actions on how to seek information to help achieve business
objectives or clarify business problems by asking questions
and by conducting personal research.
Concern for High Quality of Work - Entrepreneurs act to
do things that meet certain standards of excellence that
give them greater satisfaction.
Commitment to Work Contract - Entrepreneurs place

highest priority on getting a job completed, taking
extraordinary effort and making personal sacrifices for their
responsibilities to the firm and their customers.
Efficiency Orientation - Successful entrepreneurs always
find ways to do things faster or with fewer resources or at
less cost.
Systematic Planning - Entrepreneurs develop and uses

logical, step-by-step plans to reach goals. They plan by
breaing a large task into subtasks and anticipate obstacles
and evaluate alternatives
Problem Solving - Entrepreneurs generate new ideas or
innovative solutions to solve problems and they take
alternative strategies if necessary.
Self Confidence - Entrepreneurs with this competency will

have a strong belief in self and own abilities.
Assertiveness - Entrepreneurs confront problems and
issues with others directly.
Persuasion - They successfully pursue others to perform
activities effectively and efficiently. They have the ability to
influence others.
Use of Influence Strategies - Entrepreneurs are able to

make use of influential people (individuals/institutions) to
reach his business goals.
Monitoring - They normally monitor all activities of the
concern to ensure that the work is completed with good
quality.
Concern for Employee Welfare - They take action to
improve the welfare of employees and take positive
response of employee’s personal concerns.
2.Venture Initiation and Success Competencies
In addition to personal competencies, entrepreneurs must also

possess the competencies required to launch the enterprise
and for its growth and survival.
It is further divided into two categories of competencies:
i. Enterprise launching competencies

ii. Enterprise management competencies
Competency to understand the nature of business -

Being able to analyze the personal advantage, the personal
risks and to analyze how to maximize the opportunities and
minimize the risks of owning a business.
Competency to determine the potential as an

entrepreneur - To consider the personal qualification and
abilities needed, to evaluate own potentials for decision-
makin, problem-solving and creativity, planning and public
relations.
Competency to develop a business plan - To identify how

a business plan helps the entrepreneur, being able to
recognize how a business plan should be organized.
Competency to obtain technical assistance - To select

and work effectively with consultants.
Competency to choose the type of ownership - To analyze

the type of ownership of business, to follow the necessary
steps to file for ownership.
Competency to plan the market strategy - To develop and

modify marketing mixes for a business and to use decision
making tools and aid in evaluating marketing activities.
Competency to locate the business - To complete a

location feasibility study, prepare an occupancy contract
and determine the cost of renovating or improving a site for
the business.
Competency to finance the business - To determine the

finance necessary to start a new business and to prepare a
projected profit and loss statement and projected cash flow
statement.
Competency to deal with the business - To determine the

need for legal assistance, to evaluate contracts and to
determine the need for protection of ideas.
Competency to comply with government regulations - To

develop policies for the business to comply with the
government rules and regulations and to appraise effects of
various regulations on the business operations.
ii. Enterprise Management competencies
Competency to manage the business - To plan goals and

objectives for the business and to develop a diagram
showing the organizational structure for the business
Competency to manage human resources - To develop a

list of personnel for employees as well as their job
description in the business and to develop a training and
evaluation program for employees.
Competency to promote the business - To create a long-

term promotional plan, to analyze competitive activities and
promotional effectiveness.
Competency to manage sales efforts - To develop a sales

plan for the business, to develop procedures for serving
customers and to develop training for sales people.
Competency to keep business records - To identify types

of records that will be used in the business to record sales,
cash receipts, disbursement, inventory and others
Competency to manage the finances - To explain the

importance of cash flow management, analyze trouble spots
in financial management and to prepare a financial
statement.
Competency to manage customer credit and collection -

To develop a series of credit collection reminders and the
follow up activities and collection policies.
Competency to protect the business - To prepare policies

for the firm that will help minimize losses due to employee
theft, vendor theft, shoplifting and to determine the kinds,
amounts and costs of insurance needed by the firm.
BORCELLE

ENT 101 Chapter 3 Entrepreneurial Characteristics and Competencies

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

ENT 101 Chapter 3 Entrepreneurial Characteristics and Competencies

Uploaded by

Copyright:

Available Formats

ENTREPRENEURIAL

A lot of research in the entrepreneurial field has focused

Entrepreneurship reflects complex interactions between

Elizabeth Chell, a social psychologist, has examined

Perceptions and judgment are, therefore, key elements in

‘Judgment’ is one of the qualities that distinguishes the

However, past experience can also filter out our ability to

And, of course, our own expectations and motivations of

The Open University Business Schools (OUBS) has

Apart from the effects of the various influences that can

1. Business situations consist of real challenges,

2. However, it is how entrepreneurs perceive these that

3. Business perceptions are also influenced by personal

4. Entrepreneurial behavior is guided by the

5. The process is not static but very dynamic with

The influences and processes in the reality of

According to the Massachusetts Institute of Technology

1. Drive and energy

1. Drive and energy

This is the urge to create things, the force that

This is the cornerstone of entrepreneurial success.

3. High-initiative and personal responsibility

Initiative is all about taking charge. This shows a

4. Internal locus of control

This means that a person believes that their

This pertains to how an individual is comfortable

6. Low fear of failure

Having courage that will prevent the person’s

Willingness to engage in businesses and projects

Being committed and involved in a much longer

9. Money as a measure not merely an end

The belief that money is a tool and not a goal. A

10. Use of feedback

It is through feedback that an entrepreneur can

11. Continuous pragmatic problem solving

The entrepreneur should learn solving problems in

12. Use of resources

The goal is to use the best combination of

13. Self-imposed standards

The ones the entrepreneur have made up for

14. Clear goal setting

This is creating specific objectives for the future.

These characteristics appear consistently in other

Timmons admitted that few entrepreneurs would

attitudinal, behavioral, technical and condimentum.

underlying characteristics such as generic and specific

knowledge, motives, traits, self-images, social roles

1. Personal entrepreneurial competencies

1. Personal entrepreneurial competencies

It is the personal characteristics of an individual to perform

Initiative - Entrepreneur should be able to take actions that

Sees and acts on opportunities - Entrepreneurs always

Information seeking - Entrepreneurs are able to take

Commitment to Work Contract - Entrepreneurs place

Systematic Planning - Entrepreneurs develop and uses

Self Confidence - Entrepreneurs with this competency will

Use of Influence Strategies - Entrepreneurs are able to

In addition to personal competencies, entrepreneurs must also

It is further divided into two categories of competencies:

i. Enterprise launching competencies

i. Enterprise launching competencies

Competency to understand the nature of business -

i. Enterprise launching competencies