The Entrepreneurial Upside of Being
a Narcissist
Master Thesis Business Administration - Entrepreneurship & Innovation
Date: June 22, 2017
Author: Nadine Kaan
Student Number: 10370609
Supervisor: dr. R.C.W van der Voort Second Supervisor: Prof dr. Tsvi Vinig
Statement of Originality
This document is written by Student Nadine Kaan, who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
Abstract
This study focuses on the relationship between narcissism and new venture creation. In addition, risk propensity and achievement motivation has been included as mediators in this relationship. Literature shows that narcissistic individuals more often choose the path of entrepreneurship and create their own venture. Literature also shows that narcissistic individuals show higher levels of risk propensity and achievement motivation, which in their turn are important predictors for new business creation according to literature. Therefore, the study expected a significant difference in the level of narcissism between entrepreneurs and managers. Results show that narcissism is indeed positively related to venture creation and that entrepreneurs show higher levels of narcissism. However, achievement motivation and risk propensity did not mediate this relationship. On the other hand, narcissism was positively related to risk propensity and achievement motivation. Achievement motivation was also positively related to new venture creation. The main goal of this study was to provide new insights in the entrepreneurial personality and to examine narcissism as a characterizing trait for new venture creation. This study has therefore contributed to the field of entrepreneurial research and provides practical and theoretical implications. Recommendations for future researched are also discussed.
Keywords: Narcissism – Entrepreneurial Personality – New Venture Creation – Achievement
Table of Contents
1.Introduction………..………….………....………..………….…..….4
2. Literature Review ……….….…...……….9
2.1 Narcissism ………..……….………9
2.1.1 Narcissism and Motivation……….…………..…………10
2.1.3 Narcissism and Risk Propensity………...…………13
2.1.4 Other literature on Narcissism ……….………14
2.2 New Venture Creation ……….……….………..15
2.3 The Entrepreneurial Personality………..……….16
2.3.1 Person-Entrepreneurship fit………..…………16
2.3.2 Entrepreneurial Motivation……….……..………18
2.3.4 Entrepreneurship and Risk Propensity…………..……..….………….20
2.4“The Narcissistic Entrepreneur”….………..……….22
3. Method ……….………....……….………….…..…..26 3.1 Sample……….…………..26 3.2 Measurement of Variables……….…..……….……28 4. Results ………...…………..….…..……31 4.1 Data Analysis ………..………...……..…...… 31 4.2 Descriptive Analysis ………..…….…….……33 4.3 Hypothesis testing ………...……..…...…34 5. Discussion ………..……..……..……40
5.1 Practical and Theoretical Implications ……….……..…….…….…40
5.2 Limitations and Future Research.……….………..……..44
6. Conclusion………...………46 Bibliography………...……….47 Appendix 1……….………....……….…..………..53 Appendix 2……….………....……….…..………..54 Appendix 3……….………....……….…..………..55 Appendix 4……….………....……….…..………..56 Appendix 5……….………....……….…..………..58 Appendix 6……….………....……….…..………..62
1.0 Introduction
It is without doubt that entrepreneurs have guts. To create your own venture and succeed with that business, an entrepreneur must often challenge uncertainty and has to be creative with the opportunities that he or she encounters and the resources that are available. It is therefore not surprising that not everybody is suited to be an entrepreneur or may also not be attracted to the many challenges that needs to be encountered to create your own venture.
However, according to the Central Bureau of Statistics (CBS) of the Netherlands, over the last 15 years, people choose significantly more often the path of entrepreneurship over working as an employee (CBS, 2015). The amount of start-ups and self-employed workers has increased tremendously and the number continues to grow. This development of increasing entrepreneurial activities in a country is a positive one, knowing that entrepreneurship stimulates economic growth (Acs & Szerb, 2007). In addition, the CBS also discovers that the amount of burn-outs are twice as high in employees compared with entrepreneurs and that entrepreneurs experience more variation and involvement in their work (CBS, 2016).
Overall, there seems a small shift in preference from the security of working in a firm to more often the option of experiencing freedom and adventure by creating your own venture. The development of entrepreneurial activities is often encouraged, and is considered as valuable for a country. Therefore, entrepreneurs often arise in a positive light due to their courage to develop something new and innovative.
Simultaneously with this positive trend, however, it is for the older generation common to complain about the “kids these days” to be more self-centered, arrogant, entitled or more self-involved. To find out if these allegations are objectively true or just a common phenomenon explained by the age difference between generations, Twenge et al. (2008) conducted a cross-temporal meta-analysis of the degree of narcissism between generations of
students between 1979 and 2006. In their meta-analysis, they found that the amount of narcissism has raised with 33%, concluding that the individuals have become indeed more narcissistic than in the past. Consistent with these findings, the CBS also reveals that the current generation is more hedonistic than in 1980 (CBS, 2012). Hedonism relates to the fixation to have an exciting life and a drift to consume. This increase of hedonism can turn into narcissism, indifference and the loss of feelings of solidarity and seems to confirm the thought that the current generation is becoming indeed more narcissistic.
With the one trend considered as a negative one and the other as positive, the increase of narcissism in the current generation and the growth of entrepreneurship are two interesting developments. Needless to say, it could be that the two are somehow related to each other, but of course it could be just two separate results from the changing society.
On the other hand, it would not be the first subject where narcissism is linked to a positive outcome. Somewhat similar to the topic of entrepreneurship, is narcissism and leadership already a well-researched topic and appears to be both an advantage and a risk in leaders. For example, Deluga (1997) assessed the amount narcissism in American presidents and found that narcissism in the leaders was positively associated with charisma and performance. On the other hand, others state that there is a mixed relationship between the positive or negative effects of narcissistic leadership, explained by the fact if there is short or long term relationship. For example, Campbell and Campbell (2009) explain this by showing that in short term relations, narcissistic leaders do extremely well, but in long term their pitfalls are shown and they tend to become manipulative and self-centered with sometimes damaging effects.
The personality traits of an entrepreneur have also been a popular research topic for years and many researchers have tried to explain why some individuals will become successful entrepreneurs and others will end up working in the office as employee.
Often, research describes the positive traits that enhance the possibility of successful entrepreneurship, such as emotional stability and the need for independence (Brandstatter, 1997). Personality traits are linked to several aspects of the entrepreneurial process, such as entrepreneurial intention, entrepreneurial success and opportunity recognition. For example, it appears that a high need for achievement enhances the chance of business creation (Rauch & Frese, 2007) and self-efficacy is an important predictor for entrepreneurship, for it predicts the confidence that an entrepreneur needs to take risks or recognize opportunities (Krueger & Dickson, 1994). In addition, it appears that risk-propensity is also related to business creation (Brandstätter, 2011).
But what if these positive traits are taking into extreme levels? Miller (2015) states that there is a Janus face of the positives of certain personality traits and that when these traits appear in the extreme, they will have a negative outcome. For example, the entrepreneurial related trait self-efficacy or self-assurance can change into narcissism or hubris when taken into extreme levels. This might have negative outcomes, such as impulsiveness or aggression and could have damaging effects in the success of their ventures, but it might also be that these negative traits paradoxically have a positive outcome in certain situations.
There are enough examples of successful entrepreneurs or leaders whose personality can be considered as narcissistic or manipulative. Narcissism in high amounts can have damaging effects for the individual itself, but mainly for the environment (Campbell & Baumeiser, 2006). However, it is possible that a moderate amount of narcissism could have a positive outcome in entrepreneurial activities. It is already known for example that the trait narcissism predicts the amount of self-efficacy and locus of control of a person, which seem to be important indicators for entrepreneurial intentions or activities (Mathieu & St-Jean, 2013).
Research confirms that narcissism is positively related to several entrepreneurial activities, but there are little explaining models why individuals with high levels of narcissism could be effective entrepreneurs in the process of new venture creation. Furthermore, researchers often attempt to define characterizing personality traits predicting entrepreneurship and many traits have been examined, such as achievement motivation or stress tolerance (Brandstätter, 2011). However, the negative trait narcissism as a predictor for new venture creation has yet to be examined and could deliver new insights in the entrepreneurial literature.
As explained above, there are several common traits that are characteristic for an entrepreneur, such as risk propensity and achievement motivation. Interesting is that narcissism results in high levels of these characteristics as well as will be explained later in the literature review, resulting in the following question that will be addressed in this research:
Is there a relationship between narcissism and new venture creation and can this
relationship be explained by achievement motivation and risk propensity on this
relationship?
As the research in narcissistic leadership already shows, is narcissism a trait with positive and negative effects. Therefore, it could be valuable to have insight in the level of narcissism in entrepreneurs. First, if it appears that highly narcissistic individuals are drawn to the creation of a new venture more than individuals low on narcissism and this could be insightful for the selection of promising startups in venture capitalists. Second, due to the “mixed blessing” that narcissism seems to be, having insight in the narcissistic nature of
entrepreneurs and its pitfalls and upsides, the knowledge could be used to inform new entrepreneurs or entrepreneurship students about possible risks or how to use their qualities.
In order to answer the proposed research question this study is divided into the following sections. First, a literature review will provide a theoretical background of the current literature on narcissism as a personality trait, the process of venture creation and the entrepreneurial personality. Second, the method section will explain how the research is conducted and which measures were used to examine the proposed research question and hypotheses. In the result section, the outcome of the study will be presented. The theoretical and practical implications of these results will be elaborated in the discussion section, together with the limitations of the study and recommendations for future research. Finally, a conclusion of the findings of the study will be provided.
2.0 Literature Review
This literature review addresses an overview of the key findings in the current academic literature on narcissism as a personality trait, the process of new venture creation, entrepreneurial personalities and the role of narcissism in that personality.
First, all the concepts will be defined and current findings on the subject will be discussed. Afterwards, the proposed relationships will be presented, along with the hypothesis and the conceptual framework.
2.1 Narcissism
The term narcissism derives from the Greek myth about a man Narcissus, who fell in love with his own reflection and died because he was not able to leave his own beauty. Narcissism was for the first time mentioned in the clinical psychology, used to describe a clinical disorder that was characterized by ‘perverse self-love’ (Campbell & Baumeister, 2006). The Narcissistic Personality Disorder (NPD) was later on further examined and individuals diagnosed with the personality disorder were described to have inflated self-views, a general sense of uniqueness, an extreme high self-esteem and a sense of entitlement (Campbell & Baumeister, 2006). Individuals with NPD might for example believe that they are smarter, more creative or more attractive than others. However, they do not see their selves as more caring or kind than others, but instead they want to be seen as individuals with high competence and status (Campbell & Baumeister, 2006). The Narcissistic Personality Disorder is recognized as an official personality disorder and is still a topic of interest in psychological research.
Later on, the concept was further developed and a distinction between narcissism as a personality trait and a personality disorder was made. In organizational psychology or in management research, the first term is often used. Narcissism as a personality trait is
described as an attribute that can be rated on a continuum and for this research, narcissism as a personality trait will also be used. An individual with a high level of narcissism can be characterized as charming in the beginning, very convincing and as someone that is often very present in the social environment. Although people with high levels of narcissism seem charming in short term relations, they can become very manipulative, aggressive, ruthless and egocentric (Morf & Rhodewalt, 2001). Narcissism has therefore been described as a “mixed blessing”, due to its interesting combination of both adaptive and non-adaptive features. The trait narcissism has been a popular research topic for many years, mainly researched in relationship to leadership or in other management research.
To get a clear understanding of how narcissism influences an individual, there will be several aspects addressed. First, how narcissists are motivated will be discussed. Second, their attitude towards risks will be discussed. Lastly, other literature on narcissism will be elaborated.
2.1.1 Narcissism and Motivation
Baumeister and Vohs (2001) argue that narcissistic individuals have such a high motivation to gain admiration from others, that it can be compared to an addiction. This comparison is made with the understanding of addiction that an individual acquaintances something that offers intense satisfaction or pleasure. As a result, craving for this satisfaction becomes strong and when not provided, it may result in a feeling of distress and may reduce rational behavior. Repeated administrations of the same “dose” of admiration can also create tolerance, diminishing the levels of satisfaction, resulting in a search for greater “dosages”. These cravings, withdrawal and tolerance are the hallmarks of addiction and can be recognized in a narcissist's’ addiction to admiration of others. According to Baumeister and Vohs, the craving of a narcissist is not explicitly the confirmation of others about his
superiority, but mostly the feeling of superiority itself. The admiration of others is in this case simply a means to create the desired satisfaction of feeling superior, not the end itself. Indulging by thinking that you are as an individual somewhat superior than others is actually what most people do, only individuals with high levels of narcissism have more extreme cravings to this satisfaction, consistent with the addiction analogy. Tolerance is also evident in the case of narcissism. Individuals with high levels of narcissism seem to be constantly looking for new and greater triumphs that bring glory. They yield to the temptation to raise their self-appraisal in every opportunity possible, giving them a short sense of satisfaction before they feel the urge to show their superiority at a higher level again, making them more motivated to achieve new goals and gain more admiration. Lastly, withdrawal is also apparent. When narcissists receive something other than the admiration or the sense of superiority that they crave, such as indifference or criticism, they experience considerable distress. This distress can turn into hostility and aggressiveness, showing a similarity to addicts who have been denied their fix. Similar with the motivation to gain a sense of superiority, highly narcissistic individuals do not base their expected future performance on their past performance, but on the expected performance that is in line with their positive self-image (Campbell, Goodie & Foster, 2004).
Another model that presents narcissism and its benefits and costs is the Self-Regulatory processing model (Morf & Rhodewalt, 2001). In line with the theory of Baumeister and Vohs, the self-regulatory processing model states that a person with a level of narcissism actively attempts to create a positive self-image and to maintain this. Through social interaction they try to achieve a certain identity goal. The discrepancy between the ideal self and the actual self is for an individual with a high level of narcissism a motivator to act. Because of this motivation, the individual is willing to act negatively and will manipulate or belittle to achieve their goal.
Narcissistic individuals are motivated to perform better if they experience the possibility to enhance their self-esteem and to show their superiority to others (Wallace & Baumeister, 2002). Highly narcissistic individuals are more motivated by ego goals, where competence is assessed relative to others, than with mastery goals. With the last, competence is self-referential, but narcissistic individuals their competence is measured by outperforming others. Narcissists not only experience more enjoyment when in a situation with the possibility of achieving an ego-goal, but they are also more motivated and therefore perform better.
Being mostly motivated by ego-goals, narcissistic individuals have a high approach motivation and a low avoidance motivation in their attempt to reach their goals (Foster & Trimm, 2008). An individual’s approach motivation describes how actively individuals will pursue their desired outcome. On the other hand, avoidance motivation indicates how motivated individuals are to avoid undesirable outcomes. Foster and Trimm (2008) found that individuals with high levels of narcissism have a high approach motivation and a low avoidance motivation, which means that they are eager to actively pursue their desired outcome and are weakly motivated to avoid undesirable outcomes. In addition, Foster and Trimm found that narcissists are sensitive for and strongly motivated by rewards.
Their high approach motivation seems to be the result of a narcissist’s high need for achievement or high achievement motivation (Elliot & Thrash, 2001). A high need for achievement represents the desire to attain competence and can be the desire to master challenges or the desire to outperform others. Narcissists are in this case mostly high in the competitiveness dimension of the need for achievement, which means that they value outperforming others over mastering new skills which corresponds to the earlier findings of Baumeister and Vohs that a narcissist desires to gain admiration of others. Confirming the findings that highly narcissistic individuals have a higher achievement motivation, Soyer,
Rovenpom and Kopelman (1999) examined the level of narcissism within salesman and found a relationship between the two. This means that individuals with a high level of narcissism have a high achievement motivation, following the next hypothesis:
H1: Narcissism is positively related to achievement motivation
From literature, we can conclude that narcissists have a high need for achievement, which is motivated to gain admiration of others and create a feeling of superiority. As described above, this motivation leads them to strive for their aimed goal. However, this sometimes leads to a willingness to manipulate others or potentially take more risks. Therefore, in the next section, narcissism and their willingness to take risks will be addressed.
2.1.2 Narcissism and Risk Propensity
As what we learned from highly narcissistic individuals is that they are willing to chase the goals they want to achieve, if they experience a self-enhancement opportunity. With their high achievement motivation, they are somewhat more impulsive in their actions than individuals with lower levels of narcissism (Miller et al., 2009). This can lead to aggressive behaviors and with their impulsiveness, narcissists also appear more willing to take risks than individuals low on narcissism (Foster, Shenesey, & Goff, 2009). In addition, Emmons (1981) has already found that narcissism is also positive related to sensation seeking. In addition, Campbell, Goodie and Foster (2004) researched the amount of risk that narcissistic individuals are willing to take in a bet and discovered that this was significantly higher than individuals low on narcissism.
Foster, Shenesy and Goff (2009) examined why narcissists are willing to take more risks. In their research, they measured an individuals’ perception of possible risks and the
perception of possible benefits. Consistent with the findings of the approach motivation of narcissists, their risk taking behavior can be explained not by a lower perception of possible negative outcomes, but by heightened perceptions of possible benefits from the behavior. This means that narcissistic individuals focus more on the potential positive outcomes of a situation, therefore enhancing their willingness to take risks.
According to the current literature on narcissism and risk propensity, there can be concluded that highly narcissistic individuals have a higher willingness to take risks. Therefore, the following hypothesis is proposed:
H2: Narcissism is positively related to risk propensity.
2.1.3. Other literature on narcissism
The previous sections affirm the earlier statement that narcissism seems to be a “mixed blessing”, with characteristics that can be advantageous in moderate levels, but devastating when they appear in the extreme. In conclusion, an individual who is narcissistic can be described with the positive traits of being outgoing, confident and having the confidence to perform well under pressure. On the other hand, the negative side is their impulsiveness, aggressiveness and the fact that they can be manipulative (Foster & Trimm, 2008). As mentioned in the introduction, leadership and narcissism is a well-researched topic. For example, Grivalja et al. (2015) examined the relationship between narcissism and leader emergence and leader effectiveness. Their research shows that narcissism is positively related to leader emergence, but not to leader effectiveness. The fact that narcissistic leaders emergence more often can be explained by their extraversion, but this research shows that there might be a curvilinear trend, where narcissistic individuals perform best in the emergent phase, but not in the long term performance.
similar outcomes as the research on narcissism in relation to leadership. However, before elaborating on the narcissistic entrepreneur, first the process of venture creation will be quickly discussed.
2.2 New Venture Creation
To get a clear understanding of characteristics of an individual that might be predictors to become an entrepreneur and create a new venture, it is important to shortly discuss the process of business creation.
Many researchers have attempted to organize the many variables that influences the process of entrepreneurs creating a new venture. Gartner (1985) states that the process of new venture creation is a multidimensional and complex phenomenon. Gartner describes a new business venture as “an independent entity whereby its founders must acquire expertise in products, process and markets or technology and results are expected beyond the year in which the investment is made”. Baron (2007) explains that the three key activities in the creation of a new venture are 1) the generation of ideas 2) the successful recognition of opportunities and 3) acquiring the essential resources. Opportunities can be defined as “situations in which new goods, raw materials, services, organizing methods and markets can be introduced through the formation of new means, ends, or means-ends relationships.” (Short, Ketchen, Shook, & Ireland, 2010).
Successfully acting on opportunities or successfully acquiring the necessary resources or generation of ideas are not possible without the necessary characteristics as an individual, such as social skills. Therefore, Baron (2007) states that the entrepreneurial process occurs because entrepreneurs pursue opportunities and in this sense, entrepreneurs are the truly active element in the creation of new venture. In the next section, the entrepreneurial personality and its predictors or important characteristics are discussed.
2.3 The Entrepreneurial Personality 2.3.1 Person-Entrepreneur Fit
Within the organizational psychology literature there is overwhelming evidence that personality trait scores differ across jobs, occupations and work environments (Zhao & Seibert, 2006). Personality traits are defined as dispositions to show a certain kind of response or reaction across various situations (Rauch & Frese, 2007). Personality traits show a high degree of stability across time and are enduring, but the exact concept remains also rather fuzzy (Brandstätter, 2011). In a broad sense, personality traits include abilities, motives, attitudes and characteristics of temperament.
The literature on person-environment fit supports that individuals search for jobs and work environments that match their personalities. Schneider’s (1987) attraction-selection-attrition (ASA) model explains this phenomenon and why there is a certain homogeneity of personality scores within jobs or careers. The ASA model can be applied to various jobs and of course, also to entrepreneurs. First, individuals with certain personality traits may be more attracted to the entrepreneurial form of employment than others. For example, some individuals might be attracted to the idea of not having to work for a boss and to have the freedom of creating your own venture and thus your own job. Second, selection by outside agents and the environment may favor individuals with certain personality traits over others and may see certain traits as more suitable for a successful entrepreneur. Individuals who come across as very confident and charismatic for example, might be evaluated by these agents as entrepreneurial material. Third, individuals with certain personality traits will find the entrepreneurial activities more satisfying than other and may therefore persist long enough to create a successful new venture and indeed become an entrepreneur. Important is in this case that the individual finds the satisfaction of creating something of their own so
important that they do not mind having to face uncertainty for example (Zhao & Seibert, 2006).
Similar to the ASA model, Markman and Baron (2003) state that there is a person-entrepreneurship fit and explain why some people are more successful as entrepreneur than others. Markman and Baron suggest that the closer the match between requirements of being an entrepreneur and an individual’s personality characteristics, the more successful they will be. The higher the person-entrepreneurship fit, the greater the magnitude and the likelihood of their success. Individual-difference dimensions that enhance this fit are according to Markman and Baron self-efficacy, personal perseverance, human and social capital, superior social skills and the ability to recognize opportunities.
The specific definition of entrepreneurship, however, is explained differently across researchers and there is still no consensus about the precise meaning. Eckhardt and Shane (2003) define entrepreneurship as the discovery, evaluation and the exploitation of future goods and services by creating or identifying new ends and means that are previously undetected or unutilized by market participants. Such a definition of entrepreneurship is complete but would make it difficult to objectively make a distinction between managers and entrepreneurs, therefore in this research, we will use the definition of Brandstätter (2010). In his meta-analysis, an entrepreneur is reported as a person who (a) is the founder of a small privately owned business and/or (b) runs this business successfully as owner in the startup stage of the venture.
To succeed in all the key activities in the process of new venture creation, several characteristics are necessary to become a successful entrepreneur. Busenitz and Lau (1996) state that for example the schemes of the entrepreneur are important. The entrepreneur will estimate the risks and the possible benefits of the start-up, the control he or she will have and the judgment of the opportunity that occurred. In addition to the schemes of the
entrepreneurs, the heuristic of the person also play a role in the decision of starting a new business. Important in this case is if the entrepreneur is confident about the idea and is motivated enough to make his or her idea a successful new business. All these factors influence the intention of the entrepreneur to start a new business and to undertake action. Therefore, two important personality traits and how they increase successful entrepreneurship are discussed.
2.3.2 The Entrepreneurial Motivation
There are many meta-analysis that examine the most important traits of an entrepreneur. In all these meta-analysis there is a characteristic that seems essential for an entrepreneur; achievement motivation. As mentioned earlier in the literature review is achievement motivation described as an individual’s desire to attain competence and can be the desire to master challenges or the desire to outperform others (Elliot & Thrash, 2001). Collins, Hanges and Locke (2004) examined in their meta-analysis the relationship between achievement motivation and entrepreneurial behavior and found that achievement motivation is not only related to the choice of entrepreneurial career, but also to entrepreneurial performance. In addition, Rauch and Frese (2007) found in their meta-analysis that achievement motivation was higher in entrepreneurs and that this was significantly correlated with business creation and business success.
To examine if there is a typical entrepreneurial personality, it is insightful to compare certain personality traits between managers and entrepreneurs. This is because comparing managers and entrepreneurs minimizes confounding factors due to the similar environment of both jobs. To illustrate, both managers and entrepreneurs will have some general business knowledge and will be exposed to business opportunities, reducing those as possibilities for explaining why an individual will become an entrepreneur (Zhao & Seibert, 2006).
Stewart and Roth (2007) addressed the question if there is a fundamental difference in achievement motivation between managers and entrepreneurs in their meta-analysis. In their comparison between the two, they found that entrepreneurs indeed have a higher achievement motivation than managers. They argue that an individual with a high desire to do well and attain the feeling of accomplishment influences someone to seek for the path of entrepreneurship and to create their own business, in order to produce more achievement satisfaction. They state that managers on the other hand have a higher need for power, but a lower need for achievement (Stewart & Roth, 2007).
In addition, Collins, Hanges and Locke (2004) stated a similar explanation for their findings. In their argumentation, they state that individuals high in achievement motivation are more likely to pursue occupations that creates more control over their pursued outcomes and provide more direct feedback on their performance (McCelland, 1961; Collins, Hanges, & Locke, 2004). In addition, because the creation of a new business provides more opportunities to take advantage of the individual characteristics that are associated with an individual’s personality with high achievement motivation, it is more attracted for these individuals to choose this path over an occupation as manager.
In conclusion, current literature shows that achievement motivation is an important predictor for new venture creation. Therefore the following hypothesis will be tested:
H3: Achievement motivation is positively related to new venture creation
In conclusion, it is expected that entrepreneurs will have a higher achievement motivation than managers. However, to successfully become an entrepreneur and concur the uncertainty of starting a new venture, the willingness to take risks and handle uncertainty plays a role as well. Therefore, the next section will focus on entrepreneurship and risk
propensity.
2.3.3 The Entrepreneur and Risk Propensity
Risk taking propensity is just like achievement motivation an often researched topic in the entrepreneurial literature. The findings however are somewhat contradictory, as some findings state that there is no significant difference in levels of risk propensity between managers and entrepreneurs (Miner & Raju, 2004). Other researchers do suggest there is indeed a significant difference in risk propensity between the two groups, as Stewart and Roth (2001) argue in their meta-analysis. They argue that both managers and entrepreneurs entail taking risks, but entrepreneurs are generally more willing to take risks due to the less structured and more uncertain set of possibilities. In addition, they bear the ultimate responsibility of the decisions they make. Rauch and Frese (2007) also mention that entrepreneurs risk losing their investments in contrast with managers who work for a firm and ultimately will not have to bear with the losses that is associated with the risks they take in their occupation. The meta-analysis of Rauch and Frese (2007) also support these statements and shows that risk taking propensity is indeed related to business creation. However, they found that risk propensity on the other hand is not related to business success on the long term.. The findings of Stewart and Roth (2001) are in line with this meta-analysis and show that there is a significant difference in levels of risk taking propensity between managers and entrepreneurs, showing that entrepreneurs are more willing to take risks than managers. Lastly, Brandstätter (2011) also supports these previous findings, but also concludes that risk propensity is assumed to be an important factor as well for new business foundation and creation, but on the other hand does not predict business success. These findings show that when looking at the process of venture creation, risk propensity seems an important predictor, but not for the business success of the venture. However, this paper focusses specifically on
business creation since it is a cross-sectional study.
In conclusion, the findings of the role of risk taking propensity and entrepreneurship are somewhat contradictory. However, the findings on the relationship between risk taking propensity and venture creation are somewhat consistent and this is the construct that this paper focusses on. Therefore, the following hypothesis will be tested:
H4: Risk propensity is positively related to new venture creation
To summarize, literature shows that both achievement motivation and risk propensity are important predictors for new venture creation. Simultaneously, literature on narcissism shows that narcissistic individuals also show a high achievement motivation and risk propensity due to their personality traits. In the next section, the narcissistic entrepreneur will be further discussed.
2.4 Narcissism and New Venture Creation
Although often the positive aspects of the entrepreneurial personality have been emphasized, the possible negative traits of the entrepreneurial personality have been examined as well.
Miller (2015) for example examined the negative side of the entrepreneurial personality and found that traits such as energy, self-confidence and need for achievement can evolve into narcissism, aggressiveness and ruthlessness when they are too present in an individual’s personality. In addition to the findings of Miller, Hmieleski and Lerner (2016) examined a possible relationship between the dark triad traits, which include psychopathy, narcissism and Machiavellianism, on entrepreneurial intentions and motives. They found that of these three dark traits, individuals with high levels of narcissism had more entrepreneurial intentions than others. It is interesting that a negative trait such as narcissism might be a
predictor for entrepreneurship, a career choice that is considered to be very positive. Consistent with the findings of Miller, Hmieleski and Lerner, Matthieu and St-Jean (2013) state that entrepreneurs and narcissist share many personality traits in the FFM model, because they are both high on extraversion and openness to experience and low on neuroticism and agreeableness. Matthieu and St-Jean (2013) also found that individuals with higher levels of narcissism had more entrepreneurial intentions, therefore making it possible to assume that narcissism could be an important predictor for new venture creation. Therefore, the following hypothesis will be tested:
H5: Individuals with high levels of narcissism will more often choose to create a new venture.
The goal of this research is not only to show that highly narcissistic individuals are more likely to create a venture, but also discover the mechanism why these individuals are more attracted or suited to become an entrepreneur.
Looking back at earlier mentioned theories, this phenomenon could be explained. According to the Attraction-Selection-Attrition model and de Person-Entrepreneurship fit explained in the Entrepreneurial Personality section, it may be expected that highly narcissistic individuals are more attracted to entrepreneurship than others. With their high desire to show their superiority and their difficulties of accepting authority of others, they will be more attracted to start their own venture and become their own boss. Second, because individuals with high levels of narcissism come across as charismatic, confident and convincing, they will be evaluated by outside agents such as possible clients or venture capitalists as suitable entrepreneurs. Third, when they recognize opportunities and act on it and start their own business, they will receive the confirmation of their superiority,
motivating these individuals to persist their entrepreneurial activities, resulting in a sense of satisfaction.
Similar to the ASA model, Markman and Baron (2003) state that with the person-entrepreneurship fit we can explain why some people are more successful as entrepreneur than others. Markman and Baron suggest that the closer the match between requirements of being an entrepreneur and an individual’s personality characteristics, the more successful they will be. When this is applied to narcissism and entrepreneurship, it appears that there is indeed a match between several important indicators for entrepreneurial success and the characteristics of a narcissistic individual.
In this case, looking back at the literature, important indicators for new venture creation are achievement motivation and risk propensity. Simultaneously, individuals with high levels of narcissism show due to their high need for superiority a high achievement motivation and risk propensity as well. Due to their nature, highly narcissistic individuals show the necessary characteristics to choose the path of entrepreneurship and create their own venture. Not only will they be attracted to creating their own business because it enables them to gain admiration and fulfill their high achievement motivation, but they are due to their high willingness to take risks also capable of handling the uncertainty that must be encountered when starting a new business. It is predicted that, not only will they be more attracted to this occupation, but they will gain more satisfaction from it.
Therefore, it is expected that narcissism is positively related to new venture creation and this relationship can be explained because highly narcissistic individuals have a higher achievement motivation and more risk taking propensity. The following hypothesis will therefore be tested:
H6: The positive relationship between narcissism and venture creation is mediated by achievement motivation and risk propensity.
Figure 1 shows the proposed conceptual model that was tested in the study and shows all the hypotheses that are proposed in the literature review. Next, in the method section, the measures that were used to measure the variables in the conceptual model will be discussed.
Figure 1. The expected positive relationship between narcissism and venture creation, mediated by achievement
3. Method
This study examines the relationship between narcissism and new venture creation. To examine if, as the literature predicts, entrepreneurs are more narcissistic than managers and therefore is related to new venture creation, the amount of narcissism will be compared between entrepreneurs and managers. This quantitative research will be executed using a cross-sectional survey design, which means that the research consists of a measure at only one point in time. An online questionnaire will be used as data collection instrument to measure the independent, dependent and mediating variables. The dependent variable new venture creation was measured by the occupation of the respondents, which is the occupation of manager of entrepreneur. Narcissism, risk propensity and achievement motivation was measured with the use of existing and validated questionnaires. The questionnaire will be available in English, due to the use of existing questionnaires. On beforehand, the participants had to sign an informed consent in which they agree to participate in the study (Appendix 3). The informed consent also explained that the data is collected anonymously.
3.1 Sample
The population of the research was Dutch managers and entrepreneurs, both male and female. As the population is large and the exact numbers are unknown, the research was be conducted with the use of a convenience sample, using the snowball technique. Via the network of the researcher and the network of friends and family, entrepreneurs and managers were approached and asked to participate in the research. To assure that the entrepreneurs meet the criteria of an entrepreneur, the criteria from the description of an entrepreneur according to the definition of Brandstätter (2010) was checked in the beginning of the questionnaire (Appendix 4). In his meta-analysis, an entrepreneur is reported as a person who
(a) is the founder of a small privately owned business and/or (b) runs this business successfully as owner in the startup stage of the venture. On basis of these answers, participants who did not meet the criteria were removed from the sample.
To make a clear distinction between managers and entrepreneurs and to measure new venture creation as the dependent variable, managers were asked to participate in the research as well. For managers , the definition of a manager from the research of Zhao and Seibert (2006) was used. This definition states that a manager is in charge of a certain group or task of a subset of a company. Managers of different ranks in the organization were included (Appendix 1) and to assure that participants meet the criteria, they will have to fill in several multiple choice questions as well (Appendix 4).
Channels that were used to reach the population were through the personal network of the researcher and through the social media platforms Facebook, LinkedIn were the online questionnaire was shared with contacts of the researcher and of friends of the researcher. Lastly a group of entrepreneurs working at a start-up hub in Amsterdam were approached. The questionnaire was also shared online in several Entrepreneurship Groups, such as “Amsterdam Startups” and “Amsterdam Entrepreneurs & Startup Forum” . Managers were also reached through the personal network and network of the roommates, parents and friends.
The data was collected in the period from May 11th till June 4th. Ninety-six individuals participated to the study. From these 96 individuals that participated, 19 did not complete the questionnaire completely or did not meet the necessary criteria and were therefore removed from the study. Of the 77 remaining participants, 68,4% was male and 29,1 % was female. From the 77 participants, 31 reported to be an entrepreneur (40,2 %) and 46 reported to be a manager (59,8%). The 46 managers that participated work in 18 different companies which are listed in Appendix 1. Two managers completed the questionnaire
anonymous, but did meet the criteria of a manager and were therefore included in the research. Examples of the companies are Guidion, PostNL, ITDS or Dimebox. With the broad variety of managers from different companies, measuring organization specific effects was avoided. In addition, the managers that participated work in companies that vary broadly in characteristics (corporates or scale-ups) and therefore the types of managers vary as well. From the 31 entrepreneurs that completed the questionnaire, 4 entrepreneurs participated anonymously as well, but were also included due to the fact that they met the criteria of an entrepreneur. Furthermore, the entrepreneurs are the founder or co-founder of 25 different ventures, which are listed in Appendix 2.
3.2 Measures Narcissism.
Narcissism was measured using the 16-item Narcissistic Personality Inventory (Raskin & Terry, 1988) (Appendix 5). The NPI-16 measures the amount of narcissism in an individual and shows adequate reliability and internal and construct validity (Raskin & Terry, 1988). The questionnaire also shows good predictive validity (Ames, Rose, & Anderson, 2006). The NPI-16 consists of paired statement, where one is in line with narcissism and the other is non-narcissistic. The NPI score can vary from 0-16, with zero being not narcissistic and 16 being extremely narcissistic. The score is calculated by the sum of narcissistic statements that are chosen. An example of two statement is: “I think I am a special person” or “I am no better or worse than most people”.
Risk propensity.
To measure risk propensity, the Brief Sensation Seeking Scale (BSSS) was used (Hoyle et al., 2002). The short of the BSSS examines the amount of risk that an individual is
willing to take and how much they feel the need to experience sensational activities. The BSSS is an often used scale for the measurement of risk propensity. The scale is based on 13 statements between which the participant will have to choose the statement most suitable to their personality. An example of these statements is: “I would like a job that requires a lot of travelling” or “I would prefer a job in location”. The score is defined by calculating the amount of statement that are chosen in line with sensation seeking. The Brief Sensation Seeking Scale shows strong reliability (α = .76). The statements of the BSSS is shown in Appendix 5. To prevent hypothesis guessing, the statements of the NPI-16 and the BSSS were randomly mixed.
Achievement Motivation
Achievement motivation wase measured by Steers and Braunstein's (1976) Manifest Needs Questionnaire (MNQ). The 22 item questionnaire contains statements which describes how an individual attempts to execute or executes work-related responsibilities. Respondents are asked to answer the questions with “true” or “not true”. Example of an item is: “Most people who know me say I am ambitious” and the score is calculated with the sum of answers that are in line with achievement motivation, where a score of 22 is a very high achievement motivation. Steers and Braunstein (1976) reported a test-retest reliability of .72 and an internal consistency reliability estimate of .66
New Venture Creation
The dependent variable new venture creation was measured by the occupation of the participant. New venture creation is defined as the entrepreneurial activity of being the owner of a start-up. As a control group, managers will be used to measure the relationship between the independent variable and new venture creation. Participants will be asked the
question: “How would you describe your job?” and the choice between “manager”, “entrepreneur”, or “other”. To assure that the participants meet the criteria of an entrepreneur as defined in this research, three control questions are proposed. For example, one control statement is: “I am the founder or co-founder of a (small) privately owned business”. These statements can be answered with “true” or “false”. To meet the criteria of an entrepreneur, the two statements must be answered with “true”.
4. Results
In this section, the results of the analysis are discussed. First, the preliminary analysis and the descriptive will be discussed and afterwards, the hypotheses tests will be analyzed.
4.1 Data Analysis
For the data analysis, the program IBM SPSS Statistics was used. In order to test the hypothesis, the raw data was first analyzed and adjusted. The Manifest Needs Questionnaire consists of nine contra indicative items and therefore, these had to be recoded. The other measures had no contra indicative items and did not have to be recoded. To calculate the score of the NPI-16 and the Brief Sensation Seeking Scale, the items had to be transformed into dummy coded variables. Afterwards, the reliability of all the scales were computed in order to examine if items had to be deleted from the measure due to low inter-item correlation or a big difference in scale if item deleted reliability.
Second, the missing values were addressed. All the respondent that did not complete the questionnaire completely, were deleted. Subsequently, all the respondents that did not meet the necessary criteria of an entrepreneur or manager, were also deleted from the data set. Furthermore, per scale the missing values were checked using the frequency analysis. The achievement motivation and self-esteem measure both had no missing values. The NPI-16 had on some items three missing values. As it is expected that these missing values will not have a significant influence on the outcome, the participant’s data was still included. The measure of the dependent variable new venture had from 79 respondents two missing values and those two cases where therefore excluded from the analysis, remaining 77 participants.
The reliability for all the scales was computed using Chronbach’s alpha. The NPI-16 had a moderate reliability (α = .69). The Brief Sensating Seeking Scale had a Chronbach Alpha of α = .64, which is a moderate reliability as well. However, the MNQ had a
moderately low reliability (α = .52). After analyzing the inter-item correlation, it appeared that six items had a very low correlation with the other items of the scale ( r < .3), so according to Field (2013) the items had to be removed from the scale. In addition, when looking at the content of the items, it was not surprising that they had low inter-item correlation due to statements that seem weird. Therefore, the six items were deleted from the scale and the reliability of the scale increased (α = .65)
Furthermore, the data was checked for normality. Based on the Kolmogorov-Smirnow test, normality can be assumed for the Achievement motivation measure, D(71) = .142, p = .001, and for the Sensation Seeking measure, D(74) = .177, p = .014. For the NPI-16 normality could not be assumed, D (72) = .101, p = .077. Skewness and Kurtosis was met for the Self-esteem measure and Sensation Seeking measure, but not for NPI-16. Skewness was met for the achievement motivation measure, but kurtosis not.
Lastly, the data was checked for multicollinearity. The output shows that the used independent variables have no exact linear relationship, due to a VIF lower than 10 and a tolerance greater than 0.1.
For the descriptive statistics, a correlation matrix was computed to analyze if the variables that were expected to have an influence on each other indeed correlate. To test the hypothesis, several regressions were conducted. For the first two hypothesis, a normal regression was used since the variables that were tested were continuous (Field, 2013). However, for hypothesis 3 and 4, a logistic regression was performed because the outcome variable venture creation was measured as categorical. Finally, to test the multiple mediator conceptual model, the PROCESS tool by Hayes was installed in SPSS and Model 4 was used to test the total and direct effect of the independent and mediating variables. Again, the dependent variable was categorical, so this asked for a different interpretation of the data.
4.2 Descriptive Statistics
In Table 1, all the means, standard deviations and correlations of the variables are described. The Chronbach’s alphas for all the measures are also again mentioned in the table. Unexpectedly, it appears that gender and narcissism are not correlated. This means, that there is no need to control for gender during the hypothesis testing and will not be included as a covariate during the analyses.
Looking at the hypotheses, it was expected to see a correlation between narcissism and achievement motivation. An initial observation from the Correlation Matrix is that there is indeed a significant correlation between the two (r = .504, p <.01). Second, a correlation between narcissism and risk propensity was expected and appeared also to be significant (r = .341, p < .01). Third, achievement motivation was expected to correlate with venture creation. As the Correlation Matrix shows, there is unfortunately no significant correlation between the two (r = .230). In addition, a correlation between risk propensity and new venture creation was also expected. However, these two variables did not seem to be significantly correlated (r = .159). According to hypothesis 5, narcissism and new venture creation were also expected to show a positive correlation and these two appear indeed to be significantly correlated (r = .320, p < .01). This indicates that the level of narcissism is related to the choice to become entrepreneur or manager.
4.3 Hypothesis Testing
Hypothesis 1 predicts that there is a positive relationship between narcissism and achievement motivation. To test the hypothesis, a linear regression was conducted using SPSS. In the first step of the linear regression, the predictor narcissism was entered. This model was statistically significant F(1, 64) = 21.82, p < .000, β = .442 and explained 25% of variance in achievement motivation (R2 = .254). These results show a significant relationship between narcissism and achievement motivation, where if an individual’s narcissism increases with one unit, their achievement motivation will increase for 0.50. Results are shown in Table 2.
Table 2. Linear Regression of Model of Achievement Motivation
R R2 R2 Change B SE β t
Constant 7.87 .68 0
Narcissism .5 .25 .24** .43 .09 .50** 4.67
** Measure is significant at the .001 level (2-tailed) Table 1. Means, Standard Deviations and Correlations
Variables M SD 1 2 3 4 5 6 1. Age 33.56 11.07 2. Gender 1.3 0.46 .201 3. Achievement 10.59 2.76 .022 -.192 (.65) 4. Venture Creation 0.4 0.49 .023 -.131 .230 5. Narcissism 6.71 3.16 .011 -.019 .504** .320** (.69) 6. Risk Propensity 7.27 2.65 -.183 -.213 .581** .159 .341** (.64) **. Correlation is significant at the 0.01 level (2-tailed).
Hypothesis 2 predicts that there is a positive relationship between narcissism and risk propensity. A linear regression was performed to investigate the ability of narcissism to predict the levels of risk propensity.
In the first step of the regression, narcissism was entered as a predictor. This model was statistically significant, F(1, 66) = 8.665, p = .004 and explained for 12 % of the variance in risk propensity (R2 = .12). Narcissism recorded a Beta value of β = .34, which means in other words that if a person’s narcissism increases with one unit, his/her risk propensity increases for 0.34. The findings show that there is indeed a positive relationship between narcissism and risk propensity. Results are shown in table 3.
Table 3. Linear Regression of Model of Risk Propensity
R R2 R2 Change B SE β t
Constant 5.62 .69 8.11
Narcissism .34 .12 .10* 0.28 2.94 .34* 2.94 * Measure is significant at the .05 level (2-tailed)
Hypothesis 3 predicts that there is a positive relationship between achievement motivation and new venture creation. A logistic regression was performed, since the dependent variable new venture creation is a nominal variable. As predictor, achievement motivation was entered. This model was statistically significant, chi square = 4.075, p < .05 with df = 1. Since a logistic regression was conducted, Nagelkerke R2 was used to get an indication of the amount of variance that is explained by achievement motivation (Field, 2013). This model explained 7,5% of the variance in new venture creation (Nagelkerke’s R2
= .075), which indicated a weak relationship between the two variables. This is also consistent with the descriptive statistics, where achievement motivation and new venture creation appeared not to be significantly correlated. However, the logistic regression shows that the model is indeed significant. Achievement motivation recorded a Beta Value of β = .19, meaning that if achievement motivation increases with one unit that new venture creation increases with 0.19. Results are shown in Table 4.
Table 4. Coefficients of the model predicting new venture creation by achievement motivation.
Hypothesis 4 predicts that there is a positive relationship between risk propensity and new venture creation. A logistic regression was performed, since the dependent variable new venture creation is a nominal variable. As a predictor, risk propensity was entered. This model was not statistically significant, (chi square = 1.910, p = .225 with df = 1). Again, Nagelkerke’s R2 was used to define the amount of variance explained by risk propensity. This model explained 3,5% of the variance in new venture creation (Nagelkerke’s R2 = .035), which indicated a very weak and non-significant relationship between the two variables. Risk propensity recorded a Beta Value of β = .12, meaning that if risk propensity increases with one unit that new venture creation increases with 0.12. Results are shown in Table 5.
Table 5. Coefficients of the model predicting new venture creation by risk propensity
Hypothesis 5 predicts that narcissism is positively related to new venture creation. Again, a logistic regression was performed, since the dependent variable new venture creation is a nominal variable. As a predictor, narcissism was entered. This model was statistically significant, (chi square = 7.306, p < .05 with df = 1). Again, Nagelkerke’s R2 was used to define the amount of variance explained by risk propensity. This model explained 13,8% of the variance in new venture creation (Nagelkerke’s R2 = .138), which indicated a small predicting value of narcissism on new venture creation. Narcissism recorded a Beta Value of β = .23, meaning that if narcissism increases with one unit that new venture creation increases with 0.23. Results are shown in Table 6.
Table 6. Coefficients of the model predicting new venture creation by narcissism
Hypothesis 6 predicts that the positive relationship between narcissism and venture creation is mediated by achievement motivation and risk propensity. To test the hypothesis, the PROCESS tool in SPSS was used. Achievement motivation and risk propensity were entered as mediators and Model 4 was used for the analysis.
The analysis shows that the model is not statistically significant. The direct effect of narcissism on new venture creation is positive and significant, coefficient = 0.151, t(65) = 4.613, p < .05. Among the individuals with the same levels of achievement motivation and risk propensity, the one that experiences one unit higher narcissism is estimated to score 0.15 higher in new venture creation.
The first indirect effect is the indirect effect of narcissism on new venture creation through risk propensity. This effect indicates that those with higher levels of narcissism, have a higher risk propensity and therefore positively influences new venture creation. This effect indicates that individual’s that experience higher narcissism, experience significantly increased risk propensity (coefficient = 0.30, p < .05), only this is not statistically significant associated with new venture creation (coefficient = 0.14, p = .32). Therefore, this indirect effect can be interpreted as not significant and the bootstrap confidence interval is also not entirely above zero (indirect effect = .042, SE = .133, CI: -0.063 to 0.207).
The second indirect effect is the indirect effect of narcissism on new venture creation through achievement motivation. This effect indicates that those with higher levels of narcissism, have a higher achievement motivation and therefore positively influences new venture creation. . This effect indicates that individual’s that experience higher narcissism, experience significantly increased achievement motivation (coefficient = 0.43, p < .05), only this is not statistically significant associated with new venture creation (coefficient = 0.18, p = .26). Therefore, this indirect effect can be interpreted as not significant and the bootstrap confidence interval is also not entirely above zero (indirect effect = .077, SE = .164, CI: -0.130 to 0.512). Results are shown in table 7 and table 8.
Table 7. Regression results of achievement motivation and risk propensity as a mediator of the
relationship between narcissism and new venture creation
5. Discussion
In the next section, the main findings of the study will be discussed. In addition, the practical and theoretical implications will be addressed. Afterwards, the limitations of the current research and suggestions for future research will be provided.
5.1 Practical and Theoretical Implications
Research about the personality trait narcissism shows that narcissism is a contradictory construct, with both positive and negative outcomes, not only for the individual itself, but also for the environment (Campbell & Campbell, 2009). Research about the relationship between narcissism and entrepreneurship shows the two constructs seem to be related, and shows that narcissism has an effect on entrepreneurial intentions (Matthieu & St. Jean, 2013). However, although many research is conducted in the comparison of several personality trait differences between managers and entrepreneurs in order to distinguish the entrepreneurial personality, narcissism as a predictor for venture creation had yet to be examined.
The primary aim of this study was to examine if narcissism is related to new venture creation and if there is a significant difference in levels of narcissism between managers and entrepreneurs. Furthermore, the aim of the study was not only to find out if there was a relationship between narcissism and new venture creation, but also to find an explanation why they are positively related. To answer this question, two mediating constructs were included in the study based on the current literature on narcissism and entrepreneurship. The two proposed mediators were achievement motivation and risk propensity and were included in the conceptual model.
This study expected to find a positive relationship between narcissism and new venture creation and based on the results, it can be concluded that the two are indeed
positively related. These findings suggest that there is a significant difference in levels of narcissism between managers and entrepreneurs, where entrepreneurs show to be more narcissistic than managers. Therefore, the findings confirm the expected paradoxical relationship between the narcissism and new venture creation. Narcissism is in this case often described as a negative traits, with many negative outcomes such as aggressiveness, impulsiveness and a tendency to manipulate other for their own benefit (Campbell & Campbell, 2009), but appears to have a positive influence on an outcome that is positively valued, namely the decision to create a new business as entrepreneur.
Second, this study attempted to reveal a possible explanatory mechanism for the paradoxical relationship between narcissism and entrepreneurship. Therefore, based on literature, achievement motivation and risk propensity were proposed as mediating constructs. However, this model appeared not to be significant, undermining the proposed conceptual model. Of the two mediators, risk propensity appeared not to be related to new venture creation, meaning that there were no significant differences between managers and entrepreneurs in levels of risk propensity. The findings of the lack of a significant relationship is unfortunate, but give valuable insight as well. Namely, in the literature review, the research on the relationship between risk propensity and entrepreneurship was already somewhat contradictory. Some researchers stated that the two were unrelated (Miner & Raju, 2004), but others argued that risk propensity was indeed related to business creation (Rauch & Frese, 2001), leading to the expected hypothesis. Including this mediator in the research brought additional insights in the contradictory previous literature and shows that it seems that risk propensity is in this research not related to entrepreneurship. Stewart and Roth (2001) mentioned in their research that both managers and entrepreneurs entail taking risks, but that it was expected that entrepreneurs are generally more willing to take risks. However, the findings of this research contradict this statement.
Although risk propensity did not mediate the relationship between narcissism and entrepreneurship, achievement motivation on the other hand seemed to be positively related to new venture creation. In addition, narcissism also positively influenced achievement motivation, meaning that individuals with higher levels of narcissism showed higher levels of achievement motivation. However, looking at the mediating analysis, achievement motivation appeared not to mediate the relationship between narcissism and new venture creation, therefore also undermining the proposed model.
Looking back on literature, it shows that narcissists have a great need to feel superior and to confirm the sense that they are extraordinary (Wallace & Baumeister, 2002). Their high need for admiration and sense of superiority seems to result in a high need for achievement and a high motivation to perform well over others (Rovenpom & Kopelman, 1999) and this is confirmed with the current research. In addition, individuals with a high need of achievement also have more the tendency to create their own venture, because when creating your own business, an individual must be motivated enough to perform well and to master new skills to overcome the uncertainties of entrepreneurship (Stewart & Roth, 2007).
In addition, although there was no mediating effect of risk propensity on the relationship between narcissism and entrepreneurship or a direct effect of risk propensity on entrepreneurship, the research does show a positive relationship between narcissism and risk propensity. From these findings. It appears that consistent with the literature, individuals with higher levels of narcissism show more risk propensity than low narcissistic individuals. This is consistent with the literature and shows that when an individual is narcissistic they tend to or are willing to take more risks.
This research contributes to the existing literature on narcissism and entrepreneurship. The study provides evidence that there is a significant difference in levels of narcissism between managers and entrepreneurs and it is therefore related to venture creation, however
proposed explaining mechanisms are undermined. In previous research, many traits have been researched to define predictive characteristics for entrepreneurship, but narcissism was only researched in entrepreneurial intention and not between managers and entrepreneurs or actual business creation. Furthermore, the finding that narcissists have a higher achievement motivation, are interesting because it shows a paradoxical relationship between the negatively viewed trait narcissism and a positive outcome such as achievement motivation.
In addition, the findings that achievement motivation and new venture creation are positively related support the person-entrepreneur fit theory, which states that the closer the match between requirements for the creation of a new business and an individual’s personality characteristics the more often they will choose this path and will retrieve more satisfaction from it (Markman & Baron, 2003).
In practice, these findings have important implications for not only the entrepreneurial eco system, but also for firms who want to achieve a more entrepreneurial style. Companies that want an entrepreneurial view in their firm can use this knowledge to select individuals based on these characteristics for more entrepreneurial roles such as new business or sales.
Second, venture capitalists could benefit from the insights of this research as well. In the selection of potential new entrepreneurs it is valuable to be able to recognize that individuals that come across as narcissistic might have a high achievement motivation and will therefore be extra motivated to perform well.
In conclusion, this research offers valuable insights in the entrepreneurial research. Many researchers have focused on the entrepreneurial topic and have tried to define specific characteristics that can predict several aspects of entrepreneurs, venture creation as one of them. Often, this research is conducted in the comparison between managers and entrepreneurs and many traits have been examined. However, narcissism as a characterizing
