Are sustainable entrepreneurs different people than traditional
entrepreneurs? An exploratory comparative analysis of personality
MSc Business Administration Entrepreneurship and Innovation track
Master thesis Author: Mariëlle de Jong 10700218 marielle.de.jong@live.nl Date: 24 June 2016 Supervisor:
2
Statement of originality
This document is written by student Mariëlle de Jong 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 of the University of Amsterdam is responsible solely for the supervision of completion of the work, not for the contents.
3 Table of contents List of tables 4 List of figures 5 Abstract 6 1. Introduction 7 2. Theoretical framework 9
2.1 Sustainable entrepreneurship as a means of sustainable development 9
2.2 Distinguishing sustainable entrepreneurship from other types of
entrepreneurship 10
2.3 Comparing sustainable and traditional entrepreneurs: the same or a
separate breed? 12
2.4 Entrepreneurship research and personality 14
2.4.1 The concept of personality traits 17
2.4.2 Entrepreneurship and risk-propensity 18
2.4.3 Entrepreneurship and achievement motivation 19
2.4.4 The Big Five 20
2.4.5 The Big Five and narrow constructs 22
2.4.6 The Big Five and entrepreneurship 22
2.5 The Big Five and sustainable entrepreneurship 24
3. Methodology 27 3.1 Sampling design 27 3.2 Measures 28 3.3 Measurement assessment 29 3.4 Data analysis 30 4. Results 30 4.1 Descriptive statistics 30 4.2 Hypothesis testing 31 5. Discussion 33
6. Limitations and future research 35
7. Conclusion 36
References 36
4
List of tables
Table I. Characterization of different kinds of sustainability oriented
entrepreneurship 12
Table II. The Big Five Factors, Definitions, Traits, and Components 21
Table III. Descriptive statistics 31
5
List of figures
Figure I. Conceptual framework 24
6
Are sustainable entrepreneurs different people than traditional entrepreneurs? An exploratory comparative analysis of personality
Abstract
The innovative potential of entrepreneurs is an important vehicle for betterment when it comes to sustainable development. Why sustainable entrepreneurs choose to pursue opportunities to sustain and develop rather than to maximize profits is however not well understood. Although it could be expected that sustainable entrepreneurs often possess certain distinct personality traits which define their entrepreneurial behaviour, this study is the first to empirically investigate the relationship between personality and sustainable entrepreneurship. As such, this study endeavours to investigate the influence of the Big Five personality trait dimensions (Openness, Conscientiousness, Extraversion, Agreeableness and Neuroticism) on the choice to become a sustainable entrepreneur rather than a traditional entrepreneur. Results indicate no differences on the Conscientiousness, Extraversion, Agreeableness and Neuroticism personality dimensions. A moderate effect of Openness on type of entrepreneurship (traditional vs. sustainable) is found for female entrepreneurs, with female sustainable entrepreneurs scoring higher on Openness than female traditional entrepreneurs. The paper provides possible explanations for its lack of significant findings. Future research on sustainable entrepreneurship should focus on the influence of contextual factors.
Keywords sustainable entrepreneurship sustainable development environmental degradation
entrepreneurial motivation traits Big Five FFM personality
1. Introduction
Few scientists today disagree with the idea that humans are severely damaging many of the earth’s ecosystems (Cohen & Winn, 2007). In addition to localized problems such as surface-water degradation and toxic wastes in groundwater, scientific discoveries have revealed global scale effects such as ozone depletion, climate change and the worldwide destruction of forests (World Resources Institute, 2004; Dean & McMullen, 2007). And while debate continues on the extent that human activities impact the environment (such as in the case of the United Nations Conference on Climate Change in Paris in 2015), industry is often viewed as one of the largest contributors to environmental degradation (Cohen & Winn, 2007). The sheer impact of the recent global financial
7
turmoil and scandals (such as in the case of the widespread use of cheat software in the automobile industry) has also demonstrated that traditional entrepreneurs who are let free to pursue short-term opportunities irrespective of the long-term consequences has led to a massive depreciation of the wealth of nations, social livelihood and environmental resources (Koe, Nga & Shamuganathan, 2010).
At the same time, industry also has the capacity to minimize its negative impact. In the last two decades in particular, large corporations have increasingly taken on the mandate from public pressure and policy makers to improve their environmental performance. While fruitful however, these developments are largely incremental in nature (Cohen & Winn, 2007)). Increasingly, it is argued that the real gains will be made by harnessing the innovative potential of entrepreneurs (e.g. Dean & McMullen, 2007). Examples of innovative entrepreneurs that aim to make the world more sustainable are Boyan Slat, the founder and CEO of the Ocean Cleanup (a firm that is developing the world’s first feasible method to rid the oceans of plastic) and Gert van Vught, one of the four founders and CEO of Sustainerhomes (a firm that is building homes that need no connection to the sewerage, power, water, or grass grid and are made only with recycled or recyclable materials). More often than not, these so-called sustainable entrepreneurs articulate that they are driven by the ambition to make environmental and social progress their core business. As such, they stand in sharp contrast with traditional entrepreneurs (also referred to as commercial entrepreneurs), who are widely regarded to be largely driven by profits (Knight, 1921; Schumpeter, 1934; Kirzner, 1973) and who’s performance is usually measured by financial returns (Austin, Stevenson & Wei-Skillern, 2006).
The idea that sustainable entrepreneurs are characterized by a different entrepreneurial motivation than traditional entrepreneurs is widely (although not universally) shared. In the general sense, motivation is often described as a theoretical construct that is utilized to explain behaviour. Motivation thus signifies the reason for people’s actions, desires and needs (Deci & Ryan, 2008). In light of this study, entrepreneurial motivation is understood as an individual’s reason to start a business. Traditionally, entrepreneurship research has had much to do with explaining why entrepreneurs start businesses and different theories have emerged. However, the literature on entrepreneurial motivation has not yet materialised and especially explaining why certain entrepreneurs start certain types of businesses has proven to be difficult (Carlsson et al., 2013). Specifically, entrepreneurship research has yet to explain why some entrepreneurs pursue sustainable business opportunities rather than pure commercial ones. Some argue that this gap in our knowledge has to do with the way in which entrepreneurship is often defined (Koe et al., 2010). Typically, entrepreneurship is described as “the opportunistic pursuit of economic wealth via creative initiatives of the individual operating within an uncertain environment constrained by
8
limited tangible resources” (Koe et al., 2010, p. 259; Austin et al., 2006; Mitchell et al., 2002). Koe et al. (2010) argue that since this conceptualization of entrepreneurship relies on the rationalistic model of man, it neglects the idiosyncratic human capabilities that promote the use of environmental and social discretion in bringing innovative solutions to the market (Koe et al., 2010). Some other researchers additionally emphasize that economic theory also ignores differences in human values and power of the human will (Loasby, 2007). In other words, these scholars argue that economic theory lacks the ability to, among other things, explain why certain entrepreneurs pursue certain business opportunities.
To date, only few studies have theorized on the differences in entrepreneurial motivation between traditional and sustainable entrepreneurs (e.g. Schaltegger & Wagner, 2011; Dixon & Clifford, 2007; Vega and Kidwell, 2007) and empirical evidence has yet to emerge. Some researchers have posited personality traits in explaining the behaviours/actions of sustainable entrepreneurs. For instance, Shepherd & Patzelt (2011) describe sustainable entrepreneurs by their intrinsic motivation to preserve nature, life-supporting natural resources and/or communities. However, the influence that personality traits play in defining sustainable entrepreneurs has remained under-researched. This study aims to examine whether personality traits influence an entrepreneur’s decision to act on an opportunity to sustain and develop rather than an opportunity to maximize profits.
As such, this article endeavours to investigate the influence of the Big Five personality trait dimensions (Openness, Conscientiousness, Extraversion, Agreeableness and Neuroticism) on the choice to become a sustainable entrepreneur rather than a traditional entrepreneur (here defined as those entrepreneurs that engage in activities outside the field of sustainability). Although the relationship between personality and sustainable entrepreneurship has never been empirically tested before, it is certainly not unusual to use the trait paradigm to examine entrepreneurial behaviour (Frese, Bausch, Schmidt, Rauch & Kabst, 2012). Among other things, the literature on entrepreneurship and personality has examined entrepreneurial cognition (Mitchell et al., 2002), the decision-making of entrepreneurs (Choi & Shepherd, 2004; Parker, 2006), entrepreneurial success (Rauch & Frese, 2007), and also a growing literature on entrepreneurial passion is materializing (e.g. Cardon, Zietsma, Saparito, Matherne & Davis, 2005). Despite earlier conclusions that there exists no identifiable relationship between personality and entrepreneurial behaviour (e.g. Gartner, 1988), it must now be concluded that research adopting the personality perspective have been rather successful. Recent meta-analyses show that personality traits have a substantial validity in predicting entrepreneurial behaviour (Frese et al., 2012). This success notwithstanding, entrepreneurship researchers have called for further research examining possible moderators of the relationship between personality and entrepreneurship, including type of entrepreneurship (Zhao &
9
Seibert, 2006). The present study is the first comparative analysis in the literature on sustainable entrepreneurship to empirically investigate the personalities of sustainable and traditional entrepreneurs.
The study at hand starts by reviewing the underpinning literature concerning the concepts of sustainable entrepreneurship and the entrepreneurial personality that together form the basis for the development of the conceptual framework and hypotheses. This is followed by a discussion of the methodology in chapter three. Chapter four presents the results. Chapter five provides a discussion of these results and highlights this study’s implications. Limitations and suggestions for future research are discussed in chapter six. The paper ends with a concluding chapter.
2. Theoretical framework
2.1 Sustainable entrepreneurship as a means of sustainable development
Although already coined at a United Nations Conference on the Human Environment in 1972, it was not until 1987 that the term “sustainable development” started gaining prominence by way of a report to the United Nations by the World Commission on Environment and Development (WCED, 1987). The definition that emerged from the so-called Brundtland Report “sustainable development is development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs” (WCED, 1987, p. 43), emphasizes that “all natural systems have limits and that human well-being requires living within those limits” (Hall, Daneke & Lenox, 2010, p. 440).
To many, sustainable development seeks to place environmental and social goals on equal footing with economic goals – the so-called “triple bottom line” (Hall et al., 2010). Heretofore, economy and environment were primarily thought of as separate and competing domains (Hall et al., 2010), with high-profile scholars speaking of trade-offs between the competing objectives of growth and resource degradation (e.g. McAllister, 1984). From this perception it was through the elaborate pricing of previously unpriced values via elaborate cost-benefit analyses or by strict governmental regulations that these two distinct domains could be reconciled (Hall et al., 2010; Schaltegger & Wagner, 2011). Sustainable development, on the other hand, implies “that societies could somehow have their cake and eat it too” (Hall et al., 2010, p. 441) and that opportunities for simultaneous development in all three domains (environmental, social and economic) are plentiful. However, the assumption that companies and nations could utilize resources in such a way as to promote abundance for current generations without sacrificing opportunities for future generations does not remain without criticism (Hall et al., 2010). Estimates show that given current resource use patterns, even a minimal level of development would demand the resources of at least one
10
additional planet Earth, even when technological advances proceeded apace (Hall et al., 2010; McDonald, 2015). Some argue that sustainable development is therefore really an oxymoron (Robinson, 2004) and that significant dampening, if not a devolution, of development is needed to achieve environmental sustainability (Balakrishnan, Duvall & Primeaux, 2003).
In response to this critique, many have put forward the possibility of reaching large-scale economic and societal transformation through innovation (Hall et al., 2010). On the one hand, eyes are on the established companies to provide leadership in innovating and delivering more sustainable products and services. Some even argue that business “has the potential reverse negative environmental trends by leading the world into the ‘next industrial revolution’” (Cohen & Winn, 2007, p. 30). In any case, what we see now is that large corporations increasingly aim to reduce their ecological footprint, be it because of public pressure, government policies, or an intrinsic motivation ‘to do good’. The resulting plethora of corporate sustainability initiatives, programs and management systems has, in turn, led to an increased academic interest in ‘corporate greening’ (Cohen & Winn, 2007). This multi-disciplinary research field investigates the institutional contexts, antecedents, processes, and economic and ecological consequences of companies’ environmental strategies (Dean & McMullen, 2007). While conducive however, results show that corporate greening efforts are largely incremental in nature (Cohen & Winn, 2007). And although incremental innovation in existing production and consumption systems may lead to further gradual improvements of sustainability performance, it frequently does not lead to a globally optimal system configuration in a multi-dimensional production and consumption system space (Boons, Montalvo, Quist & Wagner, 2013).
Increasingly, it is argued that a real difference can be made by harnessing the innovative potential of entrepreneurs to resolve environmental problems with innovative business ideas (e.g. Boons et al., 2013; Dean & McMullen, 2007; Cohen & Winn, 2007). Yet, despite the promise that entrepreneurship holds for fostering sustainable development, relatively few rigorous studies exploring the relationship have been published in mainstream entrepreneurship journals (Hall et al., 2010). As a result, there remains considerable uncertainty regarding the role of entrepreneurship in the area of sustainability. Specifically, a call for an expansion of extant research with regard to entrepreneurs’ motivation for sustainable innovation is articulated more and more (Schaltegger & Wagner, 2011).
2.2 Distinguishing sustainable entrepreneurship from other types of entrepreneurship
However, before discussing the different views on the motivation of entrepreneurs to pursue sustainable ventures rather than traditional ones, sustainable entrepreneurship needs to be defined and demarcated more clearly. What is sustainable entrepreneurship, and what is it not? In terms of
11
extant literature, Schaltegger and Wagner (2011) offer a descriptive account that states that most of the earlier authors focusing on entrepreneurship and sustainability have dealt exclusively with environmentally oriented entrepreneurship, often referred to as ‘ecopreneurship’ (Blue, 1990; Bennett, 1991; Berle, 1991; Anderson & Leal, 1997; Staber, 1997; Keogh & Polonsky, 1998; Lober, 1998; Pastakia, 1998; Isaak, 1999; Schaltegger, 2002; Cohen, 2006). Additionally, some other authors have focused exclusively on social entrepreneurship (Brinckerhoff, 2000; Borzaga & Solari, 2001; Prahalad & Hammond, 2002; Mair, Robinson & Hockerts, 2005; Desa & Kotha, 2006; Milstein, London & Hart, 2006; Nicolls, 2006; Ridley-Duff, 2008; Bull, 2008). More recently however, the notion of sustainable entrepreneurship has been raised to address the contribution of entrepreneurial activities to sustainable development in a more comprehensive way. This approach of entrepreneurship aims to not only contribute to sustainable development of the firm itself, but also to create an increasingly large contribution of the firm to sustainable development of the market and society as a whole (Schaltegger & Wagner, 2011).
Although the distinction between environmental, social and sustainable entrepreneurship is not followed in all existing literature, this study takes the position that making the boundary conditions explicit helps to understand the variety of possible relationships and the different character of sustainability issues (Schaltegger, Lüdeke-Freund & Hansen, 2012). With respect to the topic of this study, it is, for instance, conceivable that different strategic positions towards integrating the societal and environmental dimensions with business are the result of systematic differences in entrepreneurs’ personality traits. Possibly, social entrepreneurs are somewhat different people than sustainable entrepreneurs. However, distinguishing these different forms of sustainability-oriented entrepreneurship is not to say that the areas are separate from each other nor from the traditional domain of entrepreneurship. Although these areas of entrepreneurship research raise unique questions and highlight different types of phenomena, this study follows Thompson, Kiefer and York (2011) and recognizes that they are not their own fields of study, but rather promising contexts for studying key issues of the entrepreneurship field.
Building on the idea of the triple bottom line, Schaltegger and Wagner (2011) distinguish the
core motivations of ecopreneurs, social entrepreneurs and sustainable entrepreneurs. These authors furthermore discuss the main business goals, role of economic goals, role of non-market goals and organizational development challenges that stem from these different core motivations (see table I). The author of the present study finds that Schaltegger and Wagner (2011) provide the clearest framework to position the different types of entrepreneurship. It is, however, important to note that empirical tests of their actual relevance have not yet been conducted, nor have the differences in entrepreneurial motivation between traditional entrepreneurship and the different forms of sustainability-oriented entrepreneurship been examined.
12
Table I. Characterization of different kinds of sustainability oriented entrepreneurship
Traditional entrepreneurship Ecopreneurship Social entrepreneurship Sustainable entrepreneurship Core motivation Making a profit to for the benefit of the shareholders Contribute to solving environmental problem and create economic value Contribute to solving societal problem and create value for society Contribute to solving societal and environmental problems through the realization of a successful business
Main goals Earn money by
acting on (perceived) opportunities resulting from market inefficiencies Earn money by solving environmental problems Achieve societal goal and secure funding to achieve this Creating sustainable development through entrepreneurial corporate activities Role of economic goals
Ends Ends Means Means and ends
Role of non- market goals None Environmental issues as integrated core element Societal goals as ends Core element of integrated end to contribute to sustainable development Organizational development challenge From small profits to large profits From focus on environmental issues to integrating economic issues From focus on societal issues to integrating economic issues From small contribution to large contribution to sustainable development Note. Adapted from “Sustainable Entrepreneurship and Sustainability Innovation: Categories and Interactions”, by S. Schaltegger and M. Wagner, 2011, Business Strategy and the Environment, 20, p. 224. For the purpose of this study, a column describing traditional entrepreneurship has been added.
2.3 Comparing sustainable and traditional entrepreneurs: the same or a separate breed?
Reviewing the literature on sustainable entrepreneurship, it can be argued that there are two (implicit) views on what drives sustainable entrepreneurs and whether this is different from what drives traditional entrepreneurs. On the one hand, there are those researchers that maintain that sustainable entrepreneurs have a different entrepreneurial motivation than traditional entrepreneurs (e.g. Schaltegger & Wagner, 2011; Vega & Kidwell, 2007). In other words, these researchers maintain that sustainable entrepreneurs have different reasons to be in business than traditional entrepreneurs. Supporters of this view tend to use words like ‘goals’, ‘will’, ‘passion’, ‘tendencies’ and ‘motivational sources’ to differentiate these two types of entrepreneurs. The model by Schaltegger and Wagner (2011) as presented in the previous section is an example of this view. On the other hand, there are those researchers that do not claim that sustainable entrepreneurs are driven by a different entrepreneurial motivation. These authors tend to examine sustainable entrepreneurship through a neoclassical economic lens. Accordingly, they use words like ‘market
13
imperfections’, ‘externalities’, and ‘information asymmetries’ just in the same manner as when traditional entrepreneurship is discussed (Cohen & Winn, 2007; Dean & McMullen, 2007). As a result of these different views, sustainable entrepreneurship is defined in diverse ways. In accordance with their differentiated view on what motivates sustainable entrepreneurs, Schaltegger and Wagner (2011), define sustainable entrepreneurs as those entrepreneurs that are motivated by the will to make environmental progress their core business by generating new products, services, techniques and organizational models that substantially reduce environmental impacts and increase the quality of life. Schaltegger and Wagner (2011) thus discriminate sustainable entrepreneurs from traditional entrepreneurs in terms of entrepreneurial motivation, as they state that the entrepreneurial motivation of traditional entrepreneurs is (mainly) focused on making a profit. Likewise, yet discussing social entrepreneurs rather than sustainable entrepreneurs, Vega and Kidwell (2007) went a little further by suggesting that social entrepreneurs are different from traditional entrepreneurs in a number of ways (so not only in terms of entrepreneurial motivation). In their preliminary, qualitative study, Vega and Kidwell (2007) aimed to advance a conceptual typology delineating the differences and similarities between business- and social-sector new venture creators. Various characteristics of social entrepreneurs in a larger entrepreneurial context were considered. The authors classified 80 examples of new venture creators according to their conceptual 2x2 typology based on two dimensions: drive (passion versus business) and desired return (financial ROI versus social ROI). Their preliminary results revealed both similarities and differences between social and traditional entrepreneurs in terms of traits, goals, tendencies, and motivational sources. However, a clear characterization of the ways in which social entrepreneurs differ from traditional entrepreneurs on these four factors was not provided.
As opposed to those who support the differentiated view of entrepreneurial motivation, most recent efforts dealing with sustainable entrepreneurship do not emphasize motivational differences between sustainable and traditional entrepreneurs (e.g. Cohen & Winn, 2007; Dean & McMullen, 2007). Rather, these studies evoke Schumpeter’s (1942) concept of “creative destruction” (i.e. when something new kills something older) to argue that new sustainability pressures create various types of market failures, opening up opportunities for new business creators (Hall et al., 2010). These researchers follow a robust economics literature that promotes entrepreneurship as a means of resolving market failures and correcting negative externalities (Hall et al., 2010). Examples of such authors are Matos and Hall (2007) who applied Knight’s (1921) seminal work on risk to the strategic and entrepreneurial implications of sustainable development, where environmental and social parameters present greater uncertainties. Other examples are Hall, Matos and Langford (2008) and Potocan and Mulei (2003) who aligned Baumol’s (1990) framework of entrepreneurial typologies (productive, unproductive and destructive) with the social and environmental impacts of business.
14
In accordance with this market-based view on sustainable entrepreneurship, researchers put forward opportunity-focused definitions of sustainable entrepreneurship. Cohen and Winn (2007), for instance, adjusted Venkataraman’s (1997) definition of entrepreneurship by adding an environmental part: sustainable entrepreneurship is the “examination of how opportunities to bring into existence ‘future’ goods and services are discovered, created, and exploited, by whom, and with what economic, psychological, social, and environmental consequences” (p. 35). In a similar but clearer fashion, Dean and McMullen (2007) define sustainable entrepreneurship as “the process of discovering, evaluating, and exploiting economic opportunities that are present in market failures which detract from sustainability, including those that are environmentally relevant” (p. 58). However, while entrepreneurs have long been, and still are, recognized as a vehicle for exploiting emerging opportunities associated with environmental and societal need, there is little understanding of how and why entrepreneurs will discover and develop those opportunities that lie beyond the pull of existing markets. Thus, while the case for entrepreneurship as a solution for transitioning towards a more sustainable society is appealing, there remain major gaps in our understanding of whether and how this process will actually unfold (Hall et al., 2011).
This study takes the position that personality research can also be applied to explain individual differences in the type of business that entrepreneurs pursue. However, before hypothesizing on the differences in personality between traditional and sustainable entrepreneurs, the next section deals with past research on traditional entrepreneurship and personality. It specifically focuses on the literature investigating how entrepreneurs are different from non-entrepreneurs (often managers).
2.4 Entrepreneurship research and personality
Although the practice of entrepreneurship is, of course, as old as trading between tribes and villages (Austin et al., 2006), the field of entrepreneurship research as an accepted academic field has a relatively short history (Cornelius, Landström & Persson, 2006). The first to give the concept of entrepreneurship an economic meaning and the entrepreneur a role in economic development was Cantillon (1755, as described in Carlsson et al., 2013). Cantillon (1755) referred to entrepreneurs as those individuals that are alert to discrepancies between supply and demand as options for buying cheaply and selling at a higher price. He identified the entrepreneur’s role as purchasing inputs at a certain price and selling outputs at an uncertain price, bringing a market system towards stability. It was Cantillon’s (1755) ideas that set the stage for the later development of equilibrium models in classical economics, which for a long time dominated the intellectual development of economics and prevented the acknowledgement of the entrepreneurial function in the economy.
The first economists to lay focus on the role of the entrepreneur in economic development was Schumpeter (1934, 1942). Already briefly touched upon earlier, Schumpeter aimed to develop an
15
entirely new economic theory based on change – as opposed to equilibrium. He discussed the function of the entrepreneur as an individual who tends to break the equilibrium by introducing innovation (“new combinations”) into the system. He argued that creative destruction “is the essential fact about capitalism” (Schumpeter, 1942, p. 83) and that the entrepreneur is the prime agent of economic change (Carlsson et al., 2013).
Despite the efforts of Schumpeter and some of his contemporaries, entrepreneurship continued to be largely overlooked in economic science models so that it was left to behavioural science researchers to continue theoretical development in entrepreneurship research (Cornelius et al., 2006). As such, a second main research stream in the entrepreneurship literature arose. Next to a focus on the results of entrepreneurship, attention was now also given to the causes of entrepreneurship, that is to say, the entrepreneurs themselves (Austin et al., 2006).
The first to present empirical studies in the field of entrepreneurship based on behavioural science theory was psychologist McClelland (1961), who’s prime interest was in human motivation. By conducting a large number of experimentally constructed studies, McClelland (1961) concluded that entrepreneurs are people with a high need for achievement (nACH) combined with strong self-confidence and independent problem solving skills, and who prefer situations that are characterized by moderate risk, while accepting individual responsibility (Cornelius et al., 2006).
McClelland’s (1961) work generated a stream of research on the relationship between personality traits and entrepreneurial behaviour (Austin et al., 2006). However, despite the fact that personality assessment methods improved steadily, a deep rooted scepticism about the presence and the strength of this relationship prevailed (Rauch & Frese, 2007). In fact, inconsistent and contradictory results from empirical studies led narrative reviewers to conclude that there was no identifiable relationship between personality and entrepreneurial status (i.e. whether someone becomes an entrepreneur or not) or entrepreneurial success. Many argued that future research using the trait paradigm should therefore be abandoned (e.g. Brockhaus & Horwitz, 1986; Brockhaus & Nord, 1979; Chell, 1985; Gartner, 1988; Robinson, Stimpson, Huefner, & Hunt, 1991).
However, more recent insights have demonstrated that the narrative review (although widely used within the scientific field of entrepreneurship) has some serious problems that have led these researchers to draw conclusions that are clearly wrong (for a detailed analysis of the problems with narrative reviews as opposed to meta-analyses in entrepreneurship research see Frese et al., 2012). In their article on evidence-based entrepreneurship, Frese et al. (2012) point out that by using the better approach for collecting evidence, the meta-analysis, personality is found to have predictive validity that is comparable with validity values found in, for instance, medical meta-analyses. To invigorate this statement, Frese et al. (2012) point out that the correlation between generalized self-efficacy or need for achievement and business success is similar to the relationship of taking
16
sleeping pills and temporary relief of insomnia or the effectiveness of Viagra for the sexual functioning of men (Meyer et al., 2001).
Furthermore, Frese et al. (2012) explain how it was detrimental to the field of entrepreneurship research that a wrong conclusion, holding that the trait-paradigm was of no use, was drawn. Frese et al. (2012) substantiate that when the function of science is to support practice in becoming more effective and efficient, good methods to summarize current knowledge and to develop interventions are needed. In this light, it is problematic that scientists all too often believe that only one or a few good studies really explain everything important about an issue. In the case of entrepreneurship and personality research, drawing wrong conclusions from narrative reviews clearly had negative effects on research and practice (Frese et al., 2012). Because of the skewed and biased consensus that personality plays little role in entrepreneurship, governments invested into developing networks for entrepreneurs without testing the hypothesis that the effects of networks was dependent upon the entrepreneur’s personality (Klein, Lim, Saltz & Mayer, 2004; Frese et al., 2012). This while government help for networks would not increase entrepreneurial success if network effects are a spurious effect of personality. Moreover, the selection of entrepreneurs (e.g. for sparse starting capital by venture capitalists) was not aided by personality tests, but rather by rough indicators of human capital that clearly demonstrate much smaller correlations with success (Unger, Rauch, Frese & Rosenbusch, 2011) than personality (Frese et al., 2012).
But why have narrative reviews been so wrong? In addressing this question, Frese et al. (2012) point out that there was simply a lot of distracting “noise” in the data: some relationships were indeed very small, the empirical literature was messy, and many studies just threw all sorts of personality variables and all sorts of dependent variables into a correlation matrix with the result that all of these correlations appeared to be quite small. Additionally, many studies were based on small samples and there were large variations in the size of the reported relationships. Together, this made it difficult to detect the true relationships. Addressing these issues, Frese et al. (2012) emphasize that the meta-analysis can help us to decide how strong certain relationships are, how often a relationship consistently appears across studies, and how much we can trust the methodological rigor of the research.
The attractiveness of this approach notwithstanding, the area of entrepreneurship has to date produced few meta-analyses when compared to other areas of research, such as criminology, education, and work and organizational psychology (Frese et al., 2012). However, relatively many of the existing meta-analyses in entrepreneurship research have focused on entrepreneurship and personality (Stewart & Roth, 2001, 2004, 2007; Miner & Raju, 2004; Collins, Hanges & Locke; 2004; Zhao & Seibert, 2006; Rauch & Frese, 2007; Zhao, Seibert & Lumpkin, 2010), and even some articles reviewing these meta-analyses have appeared (e.g. Brandstätter, 2011).
17
2.4.1 The concept of personality traits
Before reviewing the empirical evidence on entrepreneurship and personality, the concepts of personality and personality traits need to be discussed in more detail. Brandstätter (2011), an emeritus professor that has studied economic behaviour that is not in line with rational economic models by means of the personality approach, states that the concept of personality is rather fuzzy, both in psychological research as in common sense understanding (Brandstätter, 2011). In his aim to provide some clarity, Brandstätter (2011) describes that in a broad sense, personality traits include abilities (like general and specific intelligence), motives (also called narrow traits), attitudes (including values), and characteristics of temperament as overarching style of a person’s experience and actions (also called dynamic traits and typically measured with the Big Five).
Brandstätter (2011) finds that there are two ways in which personality traits may be understood. First, traits may be conceptualized as descriptions of a person’s mean level of his/her states (of Agreeableness, Neuroticism, etc.) varying across circumstances and events, partly arbitrarily encountered, partly deliberately chosen or provoked by the person. In accordance with this view, we may, for instance, describe that people high on Conscientiousness are more successful with their recently founded business than people low on Conscientiousness. In this case, nothing is said about the mental and behavioural processes by which these traits influence entrepreneurial success. Brandstätter (2011) argues that this purely descriptive notion of personality traits is therefore of limited usefulness in personality research.
In contrast, Brandstätter (2011) and most other researchers, including the author of the present paper, have adopted a notion of personality traits that goes beyond description. In this view, personality traits are conceptualized as “complex, genetically co-determined psycho-physiological structures … which originate and regulate the individual ways of experience and action” (Brandstätter, 2011, p. 223). In this sense, personality traits are viewed as causes of mental and behavioural processes (John, Naumann & Soto, 2008). And although the measures of personality traits are typically based on descriptions of how people think, feel and act in a variety of situations, this theoretically richer notion of personality traits sees these descriptions as indicators of real internal causes interacting with the external causes of a person’s experiences and actions (Brandstätter, 2011). So when we use the previous example again, we would now define entrepreneurial success not as part of the definition of the trait Conscientiousness, but as an effect of this trait.
So while in the broad sense personality traits include four sub-concepts (abilities, narrow traits, attitudes and dynamic traits), entrepreneurship researchers have mostly focused on narrow and dynamic traits only (Brandstätter, 2011). The first type of personality traits are usually measured with trait specific measurement methods, such as the risk scale of the Kogan–Wallach Choice
18
Dilemma Questionnaire for risk propensity. The dynamic personality traits are usually measured with broader taxonomies such as the Big Five or the Myers–Briggs Type Indicator (MBTI). The next two sections discuss two narrow traits that have been extensively studied in entrepreneurship research, namely risk propensity and achievement motivation. Subsequently, a discussion on the relationship between entrepreneurial behaviour and dynamic traits is provided.
2.4.2 Entrepreneurship and risk propensity
The first meta-analyses in the field of entrepreneurship and personality have focused on the narrow trait risk propensity (Stewart & Roth, 2001). As is often the case in entrepreneurship and personality research, it was chosen to compare entrepreneurs with managers. As Brandstätter (2011) points out, it only makes sense to study these two groups if other conditions such as sex, professional experience, education level, type of industry, and number of employees reporting to the entrepreneur or manager are at least roughly kept equal. Prior research to the study conducted by Stewart and Roth (2001) on the relative risk-taking propensities of entrepreneurs and managers had produced conflicting findings and no consensus. For this reason, Stewart and Roth (2001) chose to mathematically cumulate this literature. Based on 14 independent samples of 12 studies with about
3000 participants, the effect size of risk propensity (corrected for reliability) was dc = 0.36,
indicating that risk propensity of entrepreneurs is somewhat greater than that of managers. Besides, Stewart and Roth (2001) looked at two possible moderators: types of measurement and growth aspirations. First, it was found that some measurement types yield higher effect sizes than other measurement types. Additionally, a much stronger relationship was found for entrepreneurs whose
primary goal was venture growth (dc = 0.84) – rather than producing family income (dc = 0.13). The
latter is especially relevant to the present study, as it suggests that entrepreneurial motivation is an important factor in analyses on personality traits and entrepreneurship.
However, herewith the matter on risk propensity and entrepreneurship was not finished. Opening up a meta-analytical dispute with Stewart and Roth (2001, 2004), Miner and Raju (2004) conducted a meta-analysis including more primary studies (N = 28). Based on their analysis it was concluded that entrepreneurs (including those with growth aspirations) are more risk avoidant than managers
(d= 0.12, ns). A possible moderator of the relationship that was put forward is the stage of the
entrepreneurial firm’s development (from start-ups to large bureaucratic companies).
In a response to Miner and Raju (2004), Stewart and Roth (2004) evaluated their initial conclusion by identifying and examining methodological problems like confusion of constructs and extraneous variance in outcome variables. Addressing these methodological issues, the results of their new meta-analysis (N = 18) indicated that entrepreneurs are somewhat higher on risk
19
findings of Miner and Raju (2004). Notably, objective measures of risk-taking behaviour
(self-report measures such as the Jackson Personality Inventory) produced positive effects (dc = 0.37),
while projective measures (personality tests designed to let a person respond to ambiguous stimuli as to reveal hidden emotions and internal conflicts) of risktaking produced negative effects (d = -0.35). However, were Miner and Raju (2004) believed that studies using projective measures (N = 5) were relevant for their research question, Stewart and Roth (2004) believed that their relevant base of data was too small and that they lacked reliability estimates to correct for attenuation (i.e. measurement error). Taking these considerations into account, Stewart and Roth (2004) concluded their article by stating that they remained optimistic about the potential for risk propensity to help clarify entrepreneurial behaviour.
2.4.3 Entrepreneurship and achievement motivation
Another narrow trait that has been extensively studied is achievement motivation. Collins et al. (2004) emphasized – in line with McClelland (1961) – the importance of understanding the motivational characteristics spurring people to become entrepreneurs and why some are more successful than others. To this end, the authors conducted a meta-analysis (N = 41) to investigate whether entrepreneurs differ from non-entrepreneurs (including managers) with respect to need for achievement (nACH). First, it was found that achievement motivation was significantly correlated
with choice of an entrepreneurial career (rc = 0.21). Moreover, the correlation between achievement
motivation and career choice was lower when only managers were included (r = 0.14) than when all other professions were included (r = 0.35). Because no significant differences in the mean correlations between the measurement types were found, it was concluded that both self-report and projective measures of achievement motivation are valid. Finally, it was found that known group studies (i.e. studies analysing two or more pre-existing groups of individuals like entrepreneurs and managers) yielded a higher validity coefficient (r = 0.46) than did individual difference studies (r = 0.19). Overall, the results of Collins et al. (2004) supported McClelland’s (1961) theory that achievement motivation is significantly related to both occupational choice and entrepreneurial performance.
Likewise, Stewart and Roth (2007) conducted a meta-analysis of studies dealing with achievement motivation (N = 17). In contrast with Collins et al. (2004), only entrepreneurs and managers were compared. Although the authors believed that the meta-analysis conducted by Collins et al. (2004) provided some important insights into the achievement motivation literature, they considered it necessary to address some of its limitations. In contrast to Collins et al. (2004), Stewart and Roth (2007) included the requirement of venture ownership, which is a common threshold for operationalizing the entrepreneur. Results indicated that entrepreneurs are moderately
20
higher in achievement motivation than are managers (dc = 0.35). Besides, some moderators of this
relationship were found. First, differences were larger when the entrepreneur had growth goals and when the entrepreneur was the founder of the enterprise. Second, stronger effects were found in studies comparing the achievement motivation between managers and entrepreneurs outside of the United States. The authors suggested that this may be the result of cultural and contextual factors such as varying levels of entrepreneurial barriers (the more barriers have to be overcome, the higher the level of achievement motivation). Last, although to a less clear extent, the instruments used to measure need for achievement (projective versus objective) were also found to moderate the relationship. To Stewart and Roth’s (2007) surprise, it was found that projective tests of achievement motivation were associated with slightly larger differences than were objective tests. It must be noted however that only five studies, of which four by the same authors, used projective measures.
Next to risk-propensity and achievement motivation, other narrow personality constructs rooted in specific theories (e.g. locus of control, action orientation, regulatory focus) have been applied now and then in entrepreneurship research (Brandstätter, 2011). However, no meta-analyses on these constructs have (yet) been conducted and results have often been mixed. For these reasons and because of their limited relevance for the present study, it was chosen not to discuss these studies in more detail.
2.4.4 The Big Five
In the early 1960s Tupes and Christal (1961, reprinted in 1992) found five recurrent factors of personality of which they write: “In many ways it seems remarkable that such stability should be found in an area which to date has granted anything but consistent results” (p. 12). Despite their work, it was only in the 1980s that the Big Five became the predominant taxonomy of personality traits (Costa & McCrae, 1992a; Digman, 1990; Goldberg, 1990; John et al., 2008). Each of the five personality dimensions of what is also called the Five Factor Model of Personality (FFM) describes a broad domain of psychological functioning that is composed from a set of more specific and narrow traits. Nowadays, the Big Five brings together over 50 years of research on the motivational, attitudinal, experiential, interpersonal and emotional style of an individual (Zhao & Seibert, 2006). Increasingly, research on the personality of entrepreneurs too, is based on dynamic traits as measured with the Big Five (Brandstätter, 2011). Table II provides the definitions of the five personality dimensions, and the traits and components.
The Big Five trait dimensions can be separated into two broad categories (Saucier & Goldberg, 2003). Personality researchers have found that Conscientiousness, Agreeableness and Neuroticism (also referred to as emotional stability) can be interpreted based on individuals’ desire to be (pro)-
21
Table II. The Big Five Factors, Definitions, Traits, and Components
Big Five Factor Definition of Big Five
Factor Traits Components Openness to experience (or intellect) vs. closedness to experience
the tendency to be open to new aesthetic, cultural, or intellectual experiences being imaginative, creative, cultured, curious, original, broadminded, intelligent, artistically sensitive intellect—imaginative, likes abstract ideas and concepts, analytical and introspective, enjoys philosophical debates open—cultured, likes to try new and different things, enjoys art, music, literature Conscientiousness vs. lack of direction the tendency to be organized, responsible, and hardworking responsible, well- organized, planful, hardworking, achievement-oriented, persevering dependability—thorough, careful industriousness—strives to do best, does more than planned, hardworking, persistent
efficiency—neat and orderly, plans in advance, rarely late for appointments
Extraversion vs. introversion
an orientation of one’s interests and energies toward the outer world of people and things rather than the inner world of subjective experience; characterized by positive affect and sociability sociable, gregarious, assertive, talkative, active ambition—initiative,
surgency, impetuous, likes to be in charge, seeks
leadership roles, persuasive sociability—talkative, gregarious, enjoys meeting people
individuality—shows off, enjoys taking chances and stirring up excitement Agreeableness
(likeability, friendliness) vs. antagonism
the tendency to act in a cooperative, unselfish manner
being courteous, flexible, trusting, good-natured, cooperative, forgiving, soft-hearted, tolerant
cooperative—likes to help others and does things for friends, trusting of others considerate—good- natured, cheerful, forgives others easily Neuroticism ( vs. emotional stability neuroticism is a chronic level of emotional instability and proneness to psychological distress. Emotional stability is predictability and consistency in emo- tional reactions, with absence of rapid mood changes calm, even-tempered, self-satisfied, comfortable, unemotional, hardy, stable, confident, effective steady—even- tempered, steady emotionally security—feels secure about self, not bothered by criticism
Note. Adapted from “The Big Five and venture survival: Is there a linkage?”, by M. A. Ciavarella, A. K. Buchholtz, C. M. Riordan, R. D. Gatewood & G. S. Stokes, Journal of Business Venturing, 19, p. 469. A column providing the definitions of the Big Five dimensions as described in the American Psychological Association Dictionary (2015) has been added.
social, including social propriety or getting-along tendencies, functional personality, respect for social conventions and impulse restraint (Chiaburu, Oh, Berry, Li & Gardner, 2011). According to Digman (1997) tendencies to value socialization, solidarity and communion indicate that these three
22
personality dimensions “could be viewed as a broad collection of traits that are socially desirable” (p. 1249). Conversely, the other two traits, extraversion and openness, are associated with individuals (pro)activity including dynamism or getting-ahead tendencies, desire for agency, power and seeking status, and inclinations toward growth and actualization (Chiaburu et al., 2011). Openness and extraversion thus reflect attributes associated with “positively valued dynamic qualities and individual ascendancy (Saucier & Goldberg, 2003, p. 8). The individual traits will be discussed in more detail in section 2.3 which deals with the Big Five and sustainable entrepreneurship.
2.4.5 The Big Five and motivational (narrow) constructs
Although there exists a widely shared consensus that the Big Five is the best available taxonomy of personality, it should be noted that not all personality aspects can be located in the Big Five. Paunonen and Jackson (2000), for example, argue that there is much important, non-random variance not accounted for by this reference system. Fortunately, however, research has shown that many of the personality constructs used in entrepreneurship research are weighted composites of the Big Five (Brandstätter, 2009). Bipp, Steinmayr and Spinath (2008) and Heggestad and Kanfer (2000) showed, for example, that various aspects of achievement motivation correlate with the facets and global scales of the Big Five just as one would expect. Brandstätter (2011) maintains that this justifies dealing with the Big Five and narrow traits in the same vein.
2.4.6 The Big Five and entrepreneurship
Zhao and Seibert (2006) categorized personality variables used in previous studies according to the Big Five. A study was selected for their meta-analysis only when the trait that was investigated correlated primarily and substantially with only one of the Big Five dimensions. Zhao and Seibert (2006) defined the entrepreneur “as someone who is the founder, owner and manager of a small business and whose principal purpose is growth” (p. 263). After a thorough screening 23 independent studies met the selection criteria for their meta-analysis. Results indicated that managers and entrepreneurs significantly differ on four personality dimensions. The average effect
sizes (entrepreneurs minus managers) corrected for reliabilities of the measures were dc = 0.36
(Openness to experience), dc = 0.45 (Conscientiousness), dc = 0.22 (Extraversion, n.s.), dc = -0.16
(Agreeableness) and dc = -0.37 (Neuroticism). This indicates that entrepreneurs scored higher on
Openness to Experience and Conscientiousness and lower on Agreeableness and Neuroticism than managers. Although the effect sizes for the individual personality dimensions were small, the multivariate relationship for the full set of personality variables was moderate (R = 0.37).
23
Zhao and Seibert (2006) also looked at two possible moderators of the relationship between personality and entrepreneurial status. First, countries were classified as low or high in performance orientation (i.e.‘‘the degree to which a society encourages and rewards performance improvement and high standards of excellence”, p. 262) and low or high in uncertainty avoidance (i.e. ‘‘the extent to which a society relies on norms, rules, and procedures to alleviate the stress associated with unpredictability in future events”, p. 262). These two culture dimensions were tested as possible moderators of the effects of Neuroticism and achievement motivation in distinguishing entrepreneurs from managers. The authors report effect size differences in the expected direction (national cultures characterized by high uncertainty avoidance showing larger differences in Neuroticism between entrepreneurs and managers), but these differences were not significant (p > 0.05). Second, the authors looked at the type of personality measure (projective versus questionnaire techniques) of achievement motivation and dependability (the two facets of Conscientiousness) as possible moderator of the personality effects. For achievement motivation both types of measures resulted in moderate effect sizes. For dependability only the projective measure resulted in a significant effect. Zhao and Seibert (2006) conclude from this that specific personality constructs may have some merits beyond those of the global, dynamic personality constructs in predicting entrepreneurial status.
The meta-analysis by Zhao and Seibert (2006) shows that some traits show rather sizeable correlations with entrepreneurship but that other correlations with personality are low. As Frese et al. (2012) point out, this seems to corroborate with the conclusion that it does not make sense to search for personality factors. However, personality theory (Tett & Guterman, 2000) suggests that a personality factor can only have a positive effect on entrepreneurial outcomes if the personality factor matches the tasks of the entrepreneur. The first to make this differentiation were Rauch and Frese (2007) and their results were eye-opening. Rauch and Frese (2007) asked entrepreneurship researchers which personality factors are matched to the tasks of entrepreneurs and which ones are not. For instance, experts rated generalized self-efficacy, need for achievement and proactive personality to be matched to the tasks of entrepreneurs, while traits such as dogmatism and shyness were not matched with entrepreneurship. Rauch and Frese (2007) used this matching to entrepreneurial tasks as a moderator in their meta-analysis. Their results indicated that traits matched to the task of running an enterprise produce higher effect sizes with business creation than
traits that were not matched to the task of running a business, rc = 0.247 and rc = 0.124 respectively.
Furthermore, traits matched to the task produced higher correlations with business success (rc =
.250) than traits not matched to the task of running an enterprise (rc = 0.028). The relationships with
the traits matched to entrepreneurship, like generalized self-efficacy and need for achievement were of moderate size in general. Based on these results, it should be concluded that those who called for
24
the end of doing research on personality traits for lack of important relationships with entrepreneurship were clearly wrong (Frese et al., 2012). However, high levels of heterogeneity in the primary studies suggest that future research should continue to analyse moderator variables, like type of entrepreneurship. Since many individuals match the requirement of being a business owner, there may still be a lot of variation in personality. It is, for instance, conceivable that cultural entrepreneurs working in the film industry are generally different people than traditional entrepreneurs working in the automobile industry. Likewise, it is conceivable that sustainable entrepreneurs are generally different people than traditional entrepreneurs. Section 2.3 provides hypotheses regarding the sustainable entrepreneurs and personality.
2.5 The Big Five and sustainable entrepreneurship
Figure I. Conceptual framework.
Openness
Individuals that score high on Openness are characterized as being intellectual, intelligent, and open to new ideas and experiences (Ciavarella, Buchholtz, Riordan, Gatewood, & Stokes, 2004). Individuals high on openness are not afraid of new challenges, they are versatile, imaginative and often display high degrees of creativity (Kim, 2007). However, they may appear to be impulsive, overly inquisitive and easily bored with status quo. They are therefore often misunderstood by others for their individualistic nature. Chiaburu et al. (2011) conducted a meta-analyses
PERSONA L IT Y T R A IT S Conscientiousness Openness Extraversion C HO IC E T O B E C OM E SUS T A INAB L E E N T R E PR E NE UR R AT HE R T HAN T R AD IT ION A L E N T R E PR E NE UR Agreeableness Neuroticism Type of entrepreneurship H1 H2 H3 H4 H5
25
investigating the relationship between the Big Five dimensions and different forms of citizenship, including change-oriented citizenship. Results showed that individuals that exhibit a high degree of change-oriented citizenship behaviour, which means that they challenge the status quo through suggestions of constructive changes in work methods, processes and policies (Choi, 2007), also score high on Openness to experience. As sustainable entrepreneurship is a relatively new field that may require entrepreneurial individuals to go against conventional economic and cultural wisdom to create sustainable value, the following hypothesis is posited:
H1: Sustainable entrepreneurs score higher on Openness to experience than traditional entrepreneurs
Conscientiousness
The three basic components of Conscientiousness are dependability, industriousness and efficiency. Those high in this factor tend to be persevering, hardworking and achievement-oriented (Ciavarelli, 2004). Moreover, individuals that score high on Conscientiousness have an internal locus of control, which means that they believe they can control events affecting them (DeNeve & Cooper, 1998). Sustainable entrepreneurs feel that they can substantially contribute to solving societal and environmental problems through the realization of a successful business. Rather than leaving sustainability issues to the help of others, they aim to make a change themselves. For this reason, the following hypothesis is articulated:
H2: Sustainable entrepreneurs score higher on conscientiousness than traditional entrepreneurs.
Extraversion
Extraversion is primarily associated with the intensity and quantity of relationships and, as such, is manifested in sociability, positive emotionality, excitement and higher energy levels (Ciavarella, 2004). Previous research has repeatedly shown that extraverted individuals are more likely to take on leadership roles (Ciavarella, 2004). As stated above, Zhao and Seibert (2006) meta-analysed 23 studies and found that entrepreneurs score higher on extraversion than do managers, but this relationship was not significant. Although sustainable entrepreneurs are expected to express extraversion as they have to be willing and able to communicate well with a myriad of stakeholders, they are not expected to exhibit extraversion more than traditional entrepreneurs. Hence, the following hypothesis is articulated:
H3: Sustainable entrepreneurs and traditional entrepreneurs do not differ in their levels of
26
Agreeableness
Agreeable individuals are exemplified by the ability to foster social consensus while upholding mutual understanding and trust. They are forgiving, caring, altruistic and gullible. The high end of agreeableness represents a person who has cooperative values and a preference for positive interpersonal relationships. An individual at the low end of this dimension can be characterized as manipulative, ruthless, self-centred and suspicious (Costa & McCrae, 1992). However, high levels of agreeableness may inhibit a person’s willingness to drive hard bargains, look out for one’s own self-interest and influence or manipulate others for one’s own advantage (Zhao & Seibert, 2006). Zhao and Seibert (2006) point out that the negative effects of agreeableness are particularly detrimental to entrepreneurs, as they have to work with limited resources which results in serious consequences from even small bargaining disadvantages. In accordance with this expectation, they found that entrepreneurs score significantly lower on agreeableness than managers. However, sustainable entrepreneurs make it their core business to sustain and develop rather than looking out for one’s own self-interest only. Therefore, they are expected to show higher levels of altruism and tender-mindedness, which are two facets of agreeableness. Hence, the following hypothesis is posited:
H4: Sustainable entrepreneurs score higher on agreeableness than traditional entrepreneurs.
Neuroticism
Neuroticism describes the extent to which individuals are emotionally stable. The high end of Neuroticism represents a person that tends to experience a number of negative emotions including anxiety, hostility, depression, self-consciousness, impulsiveness and vulnerability (Zhao & Seibert, 2006). On the other end, people who score low on Neuroticism can be characterized as calm, self-confident, even tempered and relaxed. Entrepreneurs generally score considerable lower on Neuroticism than managers. Zhao and Seibert (2006) explain this effect by the fact that entrepreneurs are willing to work in a relatively unstructured work environment, have a high workload, endure work-family conflicts due to having a high personal stake in the business, and the financial risk of starting and running a new business venture. These things will usually produce physical and psychological stress beyond that of typical managerial work. However, sustainable entrepreneurs are not expected to show even more self-confidence and resilience in the face of stress. For this reason, the following hypothesis is formulated:
H5: Sustainable entrepreneurs and traditional entrepreneurs do not differ in their level of
27
3. Methodology
This section describes the methodology used in this study which adopts the quantitative survey method as part of an initial empirical investigation to obtain the macro view concerning the relationship between personality and type of entrepreneurship (sustainable vs. traditional). Previous studies on traditional entrepreneurship and personality have also often adopted the quantitative methodology to test hypotheses triangulated from extant literature and/or previous qualitative study propositions (Koe et al., 2010).
3.1 Sampling design
As the purpose of this exploratory study is to examine the theoretical rather than population generalizability of the conceptual model, a purposive judgemental sampling design is used. The sample comprised Dutch, fulltime entrepreneurs that operated either in the sustainability sector, or in non-sustainability sectors. Other selection criteria were (partial) venture ownership, having lived most of one’s life in the Netherlands, and distinctness in terms of being a traditional or sustainable entrepreneur. In the latter respect, an entrepreneur was regarded to be a sustainable entrepreneur when he or she brings products and/or services to the market that (aim to) solve societal and environmental problems. In fact, as was stated in paragraph 2.2, sustainable entrepreneurship means that the entrepreneur not only contributes to sustainable development of the firm itself, but also to sustainable development of the market and society as a whole. To illustrate this, a bed and breakfast owner that served food products from her own vegetable garden was not regarded a sustainable entrepreneur, as the main product (accommodation) was not aimed at solving environmental or societal problems. Conversely, an owner of a firm that brings innovative, sustainable cleaning products to the market was regarded a sustainable entrepreneur, as this product is specifically aimed at reducing environmental degradation. Cases that were not found to be distinct, such as the case of the bed and breakfast owner, were not included in the analyses.
The entrepreneurs were approached in a number of ways: via e-mail, phone, or in person by going to entrepreneurship events and co-working spaces. In all cases, the survey was administered online. In total, 172 respondents returned/completed the questionnaire on time. After a thorough screening, 161 responses met the selection criteria and were used for data analysis. One response was disregarded because the respondent was not a fulltime entrepreneur, three responses because the entrepreneur was not a venture owner, one response because the respondent did not spend at least 2/3 of his/her life in the Netherlands, and six responses because the respondent was not distinctly a traditional or sustainable entrepreneur. Of the 161 valid responses, 63 came from traditional entrepreneurs and 98 from sustainable entrepreneurs. In total, 1181 entrepreneurs were
