Predicting multidimensional entrepreneurial success from personality

1. Predicting multidimensional entrepreneurial success from personality Leuven, 26 mei 2008 Vantilborgh Tim, Joly Jeroen, Pepermans Roland Work, organizational and personnel psychology

2. Entrepreneurship “The entrepreneur uses his personality and nothing but his personality” (Schumpeter, 1911, p417) Work, organizational and personnel psychology

3. Entrepreneurship: An Introduction • Entrepreneurs : drive behind economic growth • Increased research in entrepreneurship • Firm level : entrepreneurial orientation (EO) as a strategy • Individual level : personality traits & entrepreneurship • Need for a predictive instrument (individual level) What differentiates “successful” from “unsuccessful” entrepreneurs ? • Psychological aspect of entrepreneurship, based on traits Work, organizational and personnel psychology

4. Definitions • Who/what is an entrepreneur ? • Founder / owner societal “improver” • Operationally: venture number (VAT, TAV , BTW) • What is success ? • Objective factors: financial turnover & employment ranking within sector • Subjective factors (self-reported): satisfaction with several aspects • Entrepreneurship is more than just EO • EO at individual level • Number of traits associated with entrepreneurship (differentiating) Work, organizational and personnel psychology

5. Questionnaire Successfulentrepreneurship ? Work, organizational and personnel psychology

6. Method Work, organizational and personnel psychology

7. Item pool + Pilot Testing • Literature & Interviews • 9 existing questionnaires (99 items) • Expert judges (assessing item pool quality) • Interview entrepreneurs (N=9) • Pilot testing • Random sample (N=202) • Reliability & Item analysis • Alpha score, uni-dimensionality, distribution of items • Exploratory FA 52 Items Work, organizational and personnel psychology

8. Main Study • Samples • Entrepreneurs sample (N=218) • Control sample (N=600) • Measures • Independent variables: 9 personality factors + subfactors • Dependent variables • Objective success • Relative financial turnover rank within sector • Relative employment rank within sector • Subjective success (alpha=.82) • Satisfaction with finances, venture evolution, own evolution, contribution to society, work/family balance Work, organizational and personnel psychology

9. Results • Retesting measurement models: • Subdimensions found: • Risk-aversion & Risk-seeking • Social & Instrumental Self-Efficacy (SE) • Internal & External Locus of Control • All other measurement models proved stable Work, organizational and personnel psychology

10. Results (2) • Known-group validity: • Sign. differences found for 8 dimensions between entrepreneurs and non-entrepreneurs (p<.001) • No sign. difference for Competitive Aggressiveness and subdimension work-ethics (Need for Achievement) • Predictive Validity: • Internal Locus of Control, Self Efficacy & Competitive Aggressiveness together explain a significant amount of variance in subjective success (R²=.178) • Internal Locus of Control, Innovation, Risk-seeking squared & Risk-aversion together explain a significant amount of variance in turnover scores (R²=.125) • Internal Locus of Control, Innovation & Risk-seeking squared together explain a significant amount of variance in employment scores (R²=.090) Work, organizational and personnel psychology

11. Conclusion • All 9 dimensions of our questionnaire play a role in entrepreneurship: • Either by differentiating between entrepreneurs and non-entrepreneurs • Or by predicting objective and/or subjective success • Internal Locus of Control plays a major role in predicting objective as well as subjective success • Risk-seeking seems to have a curvilinear relation with objective success • Better prediction of subjective success then objective success Work, organizational and personnel psychology

12. Future Research • We are currently working on a smaller version of the questionnaire (24 items) able to predict almost as much variance as the full version Work, organizational and personnel psychology