The entrepreneurial personality in the context of resources, environment, and the startup process--a configurational approach.

The goal of this interdisciplinary study is to analyze the entrepreneurial personality in the context of resources, environment, and the startup process based on a configurational approach. The study focuses on the startup process. A questionnaire was developed to measure the configuration areas of personality, personal resources, environment, and organizing activities. A representative sample of 1,169 nascent entrepreneurs and new business owner-managers was examined. Three startup configurations were found which reveal different patterns of personality characteristics. These patterns are interpreted in the context of aspects of the environment, the resources, and the startup process.

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The creation of a new venture is a complex and dynamic process covering numerous preparatory activities and decisions. These events can be described as person-environment interactions, which include the creation and refinement of the business idea. In our definition, the startup process begins with the first actions of the nascent entrepreneur (e.g., initial contact with a chamber of commerce or a bank) and ends with the first business activities of the new venture (e.g., launching a product/service).

This study is based on the configuration approach (Miller, 1987, 1990). When this approach is applied, the personality of nascent entrepreneurs forms one configuration area, in addition to personal resources, environment, and organizing activities.

While the importance of personality characteristics not only for startup decisions and entrepreneurial success but also for the management of the startup process for a new venture has been stressed by some authors, it has also been the subject of heavy criticism.

The objective of this study is to analyze the significance of personality characteristics in the context of resources, the environment, and startup process characteristics using the configuration approach.

Theory and Conceptual Framework

The State of Research on the "Entrepreneurial Personality" In the relevant research, the personality characteristics investigated include classic traits as well as dimensions of attitude and motive. Our study is based on this broad definition of personality (Brockhaus & Horwitz, 1986; Rauch & Frese, 2000). On this basis, the discussion below focuses on the personality characteristics, which are frequently identified as relevant to startup processes in the relevant literature.

The history of research on the relationship between personality and entrepreneurship shows noticeable parallels to the history of personality traits research in general and to the research on the relationship of personality traits to leadership (Naffziger, 1995). An earlier phase, characterized by some success in investigating personality traits in the field of entrepreneurship, was followed by a number of papers formulating a critical research perspective on the importance and measurement of personality. Newer research consists of refined theory development, the integration of research models, and, to some extent, a "comeback" of personality considerations (Rauch & Frese, 2000).

The first optimistic research phase was characterized by a somewhat successful identification of the personality characteristics of entrepreneurs. From a number of studies investigating the differences between entrepreneurs and non-entrepreneurs, as well as the potential predictors of entrepreneurial success, at least three relevant personality characteristics emerged (for an overview see Brockhaus, 1982): (1) high need for achievement (Begley & Boyd, 1986; Hornaday & Aboud, 1971; McClelland, Atkinson, Clark, & Lowell, 1953; Rauch & Frese, 2000); (2) internal locus of control (Brockhaus, 1982; Rotter, 1966); and (3) risk-taking propensity (Brockhaus & Horwitz, 1986; Hull, Bosley, & Udell, 1980; Timmons, Smollen, & Dingee, 1985).

Since the mid-1980s, a more critical perspective of the entrepreneurial personality has arisen in the literature (e.g., Carland, Hoy, Boulton, & Carland, 1984; Gartner, 1985). This covers topics that vary from describing the search for personality characteristics in the entrepreneurial context as too narrow to a general critique of McClelland's theory (e.g., Bowen & Hisrich, 1986; Brockhaus & Horwitz, 1986; Frey, 1984; Low & MacMillan, 1988). Various interaction models for new venture creation and new venture success have been presented (Gartner, 1985; Greenberger & Sexton, 1988; Herron & Sapienza, 1992; Learned, 1992), and an extension of the theoretical background has been suggested (Chandler & Hanks, 1994; Larson & Start, 1993).

A newer stream of studies again tries to confirm the importance of personality characteristics for entrepreneurial intentions and success. Some of these studies attempt to confirm the importance of personality characteristics simply by using broad measures of personality (Brandstatter, 1997) or by developing (weakly empirically confirmed) typologies of entrepreneurial success (Miner, 1997).

Newer, more promising approaches include the analysis of entrepreneurial intentions by applying the theory of planned behavior (Krueger, Jr. & Carsrud, 1993) and using action theory to explain successful entrepreneurial decisions (Frese, 2000). Further lines of research analyze the importance of previously less-observed dimensions such as proactivity, (Bateman & Crant, 1993; Becherer & Maurer, 1999) action control (Frank & Korunka, 1996), mental health (Korunka, Frank, & Becker, 1993), and personal initiative (Frese, 1998). Other studies analyze the importance of entrepreneurial motivations for entrepreneurial success (Buttner & Moore, 1997) and investigate the relationship of "entrepreneurial attitude orientation" (Robinson, Stimpson, Huefner, & Hunt, 1991), a broadly defined personal construct, and performance (Lumpkin & Dess, 1996). The latter construct clearly shows that the entrepreneurial personality could best be described as a specific pattern of more action-related characteristics. The unit of analysis in these newer approaches is the entrepreneurial personality, including action, choice, and process dimensions (see also Shaver & Scott, 1991).

The Configuration Approach

The results of research into the entrepreneurial personality underline its relevance in the process of new venture creation. However, the adoption of any isolated personality-focused theoretical basis for the understanding of the startup process seems to narrow the perspective to one factor among several others. On the other hand, organization-focused theories (which are usually derived from experiences with larger and older organizations) do not adequately consider the effects of the entrepreneur's personality on the nascent organization and its environment (e.g., Hoy, 1995). The environment can be seen as a (unidirectional) factor of the rather long-term influence on personality development and the rather short-term influence on organizing the startup process. The analysis of the entrepreneurial personality in the process of new venture creation should go beyond concepts of unidirectional causal relationships, which focus narrowly on one factor only.

A theoretical basis that promised to fulfill this requirement can be found in the configuration approach. "Configurations are inherently multidimensional entities in which key attributes are tightly interrelated and mutually reinforcing" (Dess, Newport, & Rasheed, 1993, p. 784). The configuration approach has been developed to overcome the shortcomings of contingency theory, which focused primarily on the unidirectional influences of (situational) diversified environments on organizations. Earlier configuration approaches emphasized the consistency and effectiveness of intraorganizational configurations (Mintzberg, 1979). Recent approaches emphasize patterns and interrelations within a broader set of configuration areas (Miller, 1987, 1990). Although originally developed for large organizations, the configuration approach has been adapted for smaller and entrepreneurial organizations (Covin & Slevin, 1991; Gartner, 1985; Mugler, 1998; Snuif & Zwart, 1994). These authors suggest the following structure of interrelated areas, which can be further separated into sets of aspects: characteristics of the (nascent) entrepreneurs, resources of the nascent entrepreneurs, environment, and organizing activities (management).

The mutual effects of variables form and modify the configuration of the individual enterprise over time. The development of an organization can thus be reconstructed as a chain of configurations. In principle, configurations are unique, but similarities may allow us to create typologies or taxonomies of configurations. Experience with certain types of configurations can help to identify the strategic position of a new venture and to evaluate its prospects for further development. It can also help to find interventions to foster successful venture development.

The important lesson of the configuration approach for the startup process is that it allows us to identify the configurations associated with successful and unsuccessful new ventures. The configuration approach thus allows a comprehensive and integrated analysis that provides a basis for effective interventions. In this context, personality is defined as a configuration area whose significance is always to be regarded in relation to the three other areas (resources, environment, and organizing activities).