By Asst. Prof.

Syed M Fahim Akhter - IIEE

Chapter 4
Developing Entrepreneur

Characteristic Traits of Entrepreneur

Being an entrepreneur requires specific characteristics and skills that are often achieved through
education, hard work, and planning.
Opportunist
They seek opportunity to make money. Often entrepreneurs see opportunities where others see
problem.
Risk Taker
Businesses face risk. Entrepreneurs minimize risk through research, planning and skill development.
Innovative
The ability to spot opportunity and to innovate is the most important distinguishing feature of
entrepreneurs.
Curious
Entrepreneurs like to know how things work. They take the time and initiative to pursue the unknown.
Imaginative
Entrepreneurs are creative. They imagine solutions to problems that encourage them to create new
products and generate ideas.
Persistent
True entrepreneurs face bureaucracy, make mistakes, receive criticism, and deal with money, family, or
stress problems. But they still stick to their dreams of seeing the venture succeed.
Goal-setting
Entrepreneurs are motivated by the excitement of starting a new business. Once achieved, they seek
out new goals or ventures to try.
Hardworking
Entrepreneurs need a great deal of energy to see a venture start and succeed. Yet they are not deterred
by the long hours to achieve their goal.
Self-confident
Entrepreneurs believe in themselves. Their self-confidence takes care of any doubts they may have.
Flexible
Entrepreneurs must be flexible in order to adapt to changing trends, markets, technologies, rules, and
economic environments.
Independent
An entrepreneur’s desire for control and the ability to make decisions often makes it difficult for them to
work in a controlled environment.
By Asst. Prof. Syed M Fahim Akhter - IIEE

Factors Influencing Entrepreneurship

Sociocultural Factors: Culture and Society

The sociocultural environment which consists of the beliefs and attitudes of the members of society to
what are desirable and legitimate activities is an important factor affecting entrepreneurship (Shane,
2003). Entrepreneurship will not prosper if most members of the society view it with suspicion
(Zapalska, Perry & Dabb, 2003), as an individual’s behaviour is largely influenced by what others think,
especially when faced with ambiguities and uncertainties (Minniti, 2005).

These scholars argue that entrepreneurship will thrive in a society where entrepreneurs are highly
appreciated and viewed as cultural heroes (Malach Pines, Levy, Utasi & Hill, 2005). Socio-cultural
environment may influence the development of entrepreneurship through the ‘role theory’ which
emphasizes the influence of role models on entrepreneurial behaviour (Co, 2003).

It is argued that the presence of successful entrepreneurs will encourage others, as their presence will
convey a message that entrepreneurship is an attractive and viable career option. Family and close
friends may also serve as role models for aspiring entrepreneurs (Co, 2003).

Scholars believe that the desire to start a business can be significantly influenced by parental role
models and/or exposure to entrepreneurial activities at a younger age (Drennan, Kennedy & Renfrow,
2005). Similarly, a study by Singh and DeNoble (2003) reports that having a close self-employed relative
is one of the core antecedents of entrepreneurship.The literature also suggests that entrepreneurs often
came from families where the mothers or fathers were themselves entrepreneurs (Crant, 1996, Dyer,
1992, as cited in Drennan et. al, 2005).

The Importance of Networking

Entrepreneurial ventures are naturally constrained by human, informational and financial resources
(Jack, Dodd & Anderson, 2004). Networking has been identified as an important prerequisite for
starting a successful new venture (Reynolds, 1991).

It is argued that as a consequence of their newness and smallness, new ventures lack capability and
legitimacy to acquire the resources through the traditional market mechanism (Hite & Hesterly, 2001).

Accordingly they rely to a considerable extent upon their networking ties to provide both resources and
opportunities for their survival and success (Jarillo, 1989, as cited in Hite, 2005). In particular, the
network success hypothesis argues that business founders will be better able to gain access to resources
more cheaply through their network ties than through the normal market channels.

Their network ties will also give them access to those resources that would not otherwise be available
through normal market operations such as reputation and customer contacts. The theory of social
embeddedness argues that all economic activity is embedded in social relations and that relationship
can accordingly influence how a business is established and the way it is run (Uzzi, 1997).

It distinguishes between two relationships involved in business transactions, the ‘arm’s length’
relationship and the ‘embedded ties’ (Witt, 2004).
By Asst. Prof. Syed M Fahim Akhter - IIEE

While the former is the typical market transaction without personal attachment between the
transaction partners, the latter is based on more personal relationships and is generally governed by
informal market mechanisms such as trust (Hite, 2005).

Governmental Influence
Entrepreneurship has long been recognized as a prime mover for economic development (Schumpeter,
1934). It is believed that a vibrant entrepreneurial activity may help a country to revive its slow
economic growth and address social and economic injustice (Walburn, 2005).

Although scholars tend to agree on the important role of the government in facilitating and providing a
conducive environment for the growth of entrepreneurs and their enterprises (Dahles, 2005; Gilbert et
al., 2004). There is less agreement among scholars on the effective level of government influences (Low,
2006; Papanek, 2006; Li, 2002)