Characteristics of a
Sustainable Entrepreneur
Comparison via the Entrepreneur Scan
14-3-2012
Rijksuniversiteit Groningen
Characteristics of a Sustainable Entrepreneur
Comparison via the Entrepreneur Scan
Rijksuniversiteit Groningen
Faculty of Economics and Business
Master Small Business and Entrepreneurship
Author
Name
:
Michel van Spijker
Student number
:
S1931199
Address
:
Wolfkampstraat 24, Dalfsen
:
michel_van_spijker@hotmail.com
Supervisor
Name
:
prof. dr. P.S. Zwart
University
:
Rijksuniversiteit Groningen
Master coordinator
Name
:
dr. C. Lutz
Preface
The document in front of you consists of a first attempt to make clear what the exact characteristics of a sustainable entrepreneur are. This research is done as part of the study Business Administration and is a thesis for the Master Small Business & Entrepreneurship.
By making use of the Entrepreneur Scan (E-Scan), the characteristics of sustainable entrepreneurs are researched. The E-Scan is part of Entrepreneur Consultancy B.V., and is market leader in the entrepreneur tests market. The outcome of this research is compared with the average E-Scan profile to see whether there are differences between these outcomes. From this point I would like to thank Martijn Driessen for allowing me to make use of the E-Scan in order to realize my master thesis. Furthermore I would like to thank all the participants of the research; the sustainable entrepreneurs. And last, but not least I would like to thank prof. dr. Peter Zwart for his supervision of this research. With his effort, knowledge, and perfect guidance he made me able to write this paper.
Michel van Spijker,
Abstract
Sustainable entrepreneurship is a new type of entrepreneurship. Scientific literature about sustainable entrepreneurship is emerging fast. Sustainability means “the development that meets the need of the present without compromising the ability of future generations to meet their own needs” (UNCSD, 2001). This type of entrepreneurship is different from conventional entrepreneurship and partly overlaps social entrepreneurship. Where conventional entrepreneurship focusses on private benefits, social entrepreneurship want to create social value. Sustainable entrepreneurs also want to create value for others. Though, sustainable entrepreneurship is different from social entrepreneurship in that it wants to preserve nature, sources of life, and/or communities.
Since these types of entrepreneurship differ, a difference between these types of entrepreneurs seems to be logical. Known characteristics of conventional entrepreneurs are need for achievement, internal locus of control, risk taking propensity, need for autonomy, need for power, need for affiliation and endurance. Social entrepreneurs tend to be creative, innovative, and score high on tolerance of ambiguity and risk taking propensity. Furthermore they are persistent and score high on agreeableness and openness. Literature about the characteristics of the sustainable entrepreneur is lacking. Therefore Patzelt & Shepherd (2011) proposed to research these characteristics and make clear what the sustainable entrepreneur looks like and what the differences between sustainable entrepreneur and conventional entrepreneur are. This research made an attempt to analyse these characteristics of sustainable entrepreneurs.
To measure and compare the characteristics of the sustainable entrepreneur, the E-Scan of Entrepreneur Consultancy B.V. is used. This is an objective tool to measure the characteristics of an entrepreneur, based on scientific literature (Driessen & Zwart, 2006). Besides the characteristics of the conventional entrepreneur mentioned, the E-Scan analyses six capabilities and four styles of thinking. These outcomes are presented in this research as well in order to make some suggestions for further research, but they are not included in the literature review. However, one of the capabilities (creativity) is used as a characteristic in this research. Because of the overlap between the E-Scan explanation of creativity, the eighth characteristic is called tolerance of ambiguity/creativity. Tolerance of ambiguity and creativity are very much the same in this case, which makes a combination possible.
The outcome of this research is that the sustainable entrepreneur and conventional entrepreneur indeed differ in characteristics. The characteristics in which sustainable entrepreneurs differ significantly from conventional entrepreneurs are need for achievement, risk taking propensity, need for power and tolerance of ambiguity/creativity. There is no significant difference found between sustainable entrepreneurs and conventional entrepreneurs on internal locus of control, need for autonomy, need for affiliation and endurance.
Index
Preface ... 2
Abstract ... 3
1. Introduction ... 5
1.1 Research goal and sub-questions ... 6
1.2 Research design ... 6
2. Theoretical framework ... 7
2.1 Entrepreneurship ... 7
2.2 Social entrepreneurship... 8
2.3 Sustainable entrepreneurship ... 9
2.4 The Entrepreneur Scan... 11
2.5 Personality traits ... 14 2.6 Conceptual model ... 22 3. Method ... 23 3.1 Research method ... 23 3.2 Participant criteria ... 23 3.3 Data collection ... 23 3.4 Data analysis ... 24 4. Results ... 25
4.1 General information of sample ... 25
4.2 Personality traits ... 25
4.3 Capabilities ... 28
5. Discussion and conclusion ... 29
6. References ... 32
7. Limitations ... 32
8. Further research ... 33
Appendix I – Invitation E-mail to sustainable entrepreneurs ... 39
Appendix II – Reminder E-mail to sustainable entrepreneurs ... 40
Appendix III – Analysis data (SPSS) – Part I ... 41
1. Introduction
Scientific literature about entrepreneurship in general started in the 18th century by, among others, Richard Cantillon (Carter & Jones-Evans, 2006). Creating a conceptual framework was however difficult (Shane & Venkataraman, 2000). Entrepreneurship itself is often defined as the opportunistic pursuit of economic wealth via creative initiatives of individuals operating within an uncertain environment constrained by limited tangible resources (Austin et al., 2006). Venkataraman (1997) came up with a definition of the field that still holds: “the scholarly examination of how, by whom, and with what effects opportunities to create future goods and services are discovered, evaluated, and exploited (Shane & Venkataraman, 2000, 218)” As Shane & Venkataraman (2000) argue, this definition involves the sources of opportunities (discovery, evaluation, and exploitation) and the set of individuals who discover, evaluate, and exploit these opportunities. This research will focus on the individuals who discover, evaluate, and exploit opportunities: the entrepreneur.
Entrepreneurship research focused on entrepreneurs as a group of individuals that differ from non-entrepreneurs (Gartner, 1985; Low & MacMillan, 1988; Rauch, 2007), from an economic perspective. There is still no general agreement on a definition of the entrepreneur, but the Webster's Third New International Dictionary (1961) defines an entrepreneur as "the organizer of an economic venture, especially one who organizes, owns, manages, and assumes the risk of a business" (Brockhaus, 1980a). These entrepreneurs are known as the
conventional entrepreneurs. The economic perspective on entrepreneurs ignored human
values, capabilities and power of human will (Loasby, 2007). Since the free market system has failed in filling all the gaps in a lot of markets, and because of some major financial scandals like Enron and WorldCom in the beginning of the 21st century, more interest has been shown in a different type of entrepreneur, the so called social entrepreneur. Social entrepreneurship stems from the importance in addressing social problems and enriching communities and societies (Zahra et al, 2009). Where conventional entrepreneurs have certain characteristics, social entrepreneurs have their own. Some are identical, but there are also differences (Nga & Shamuganathan, 2010).
Sustainable entrepreneurship becomes more popular, not only in scientific research. Al Gore, the acknowledged former vice president of the United States, is one of the best known advocates of sustainability. He inspired me to write this paper with his words about the future of sustainability in entrepreneurship during his speech at the Faculty of Business and Economics at the University of Groningen. As he said “…in the end, sustainable products will outcompete not-sustainable products, simply because sustainable products are inexhaustible.” These words imply that, in the future, conventional entrepreneurship will be replaced by sustainable entrepreneurship, at least partly. This would make differences between these two types of entrepreneur even more important, because what will the future entrepreneur look like? The characteristics of the current (conventional) entrepreneur are known, but this research will make an attempt to make clear what the characteristics of a sustainable entrepreneur are.
1.1 Research goal and sub-questions
The goal of this research is: What are the characteristics of a sustainable entrepreneur and
what are the differences with the conventional entrepreneur?
The following sub-questions will complete the research.
Sub-questions:
§ What is conventional, social and sustainable entrepreneurship and in what way do they differ or not?
§ What are the most important personality traits of a conventional, social and sustainable entrepreneur according to the literature?
§ What are the scores of the sustainable entrepreneur on the different characteristics/ personality traits?
§ On which of the traits do sustainable entrepreneurs differ in scores from the E-Scan average profile?
1.2 Research design
2. Theoretical framework
In this theoretical framework all components important to the research are elaborated. First a brief explanation of entrepreneurship and the entrepreneur is provided. Further on, both concepts social and sustainable entrepreneurship, including the definitions of both types of entrepreneurs, are presented. After the more general explanation of these concepts, the literature review will focus on the subject of this research; personality traits. The Entrepreneurial Scan (E-Scan) will be introduced and the personality traits of this scan will be explained in depth. The history of the traits in both conventional and social entrepreneurship will be discussed. The explanation of every personality trait will be concluded with a hypothesis about sustainable entrepreneurs. The chapter ends with a conceptual model.
2.1 Entrepreneurship
As stated in the introduction, literature about entrepreneurship started in the 18th century by, among others, Richard Cantillon. One of the best known researchers about entrepreneurship is, however, Joseph Schumpeter (1853-1950). Schumpeter showed the positive relationship between entrepreneurial activity, economic growth, wealth creation and prosperity (Schumpeter, 1934). This is what made entrepreneurship very important in society and extremely interesting for scientific research.
According to Schumpeter (1934), entrepreneurship leads to “creative destruction” though innovation (Dees, 1998). Creative destruction means reforming or revolutionizing patterns of production to create disequilibrium in the market. Schumpeter argues that entrepreneurship arises in new firms and not in existing ones (Spencer, Kirchhoff & White, 2008). In contrast to the vision of Schumpeter, Kirzner (1973) argued that entrepreneurship moves the market from disequilibrium to an equilibrium state. Many years later, scientists came to the conclusion that these theories are complementary; one theory does not have meaning without the other (Cheah, 1990). Where Schumpeterian entrepreneurship moves the market from equilibrium to disequilibrium, Kirznerian entrepreneurship moves the market back to an equilibrium state.
More recent, Venkataraman (2000) defined entrepreneurship as “the scholarly examination of how, by whom, and with what effects opportunities to create future goods and services are discovered, evaluated, and exploited (Venkataraman, 1997, 218).” This definition is in line with Schumpeter (1934) and Drucker (1986) and is used in this research.
A term Schumpeter (1934) often used referring to entrepreneurs is “change agents” making the economy move forward. Drucker (1986) build upon the theory of Schumpeter. He argues that an entrepreneur is an individual who searches for change (causing change is not required) and responds to it in an innovative manner, exploiting it as an opportunity (Stokes, 2000). Opportunity is a term often used since the definition of Drucker (1986) and stands for the chance to meet a market need, interest or want through a creative combination of resources in order to deliver superior value (Schumpeter, 1934; Kirzner, 1973). This definition is in line with Venkataraman and is used in this research.
2.2 Social entrepreneurship
Where conventional entrepreneurship is focussed on economic gains, social entrepreneurship is committed to serve basic human needs. Social entrepreneurs aim to realize improvements in quality of life within society (Austin et al., 2006). Venkataraman (1997) argued that social wealth is a by-product in conventional entrepreneurship and that social value creation is the main focus of social entrepreneurship. This does, however, not mean that they do not take initiatives to earn an income (Mair & Marti, 2006). Several authors write about social entrepreneurship from a non-profit perspective (Hoogendoorn, 2010). However, Mair & Marti (2006) argue that social entrepreneurship can take place at a for-profit basis as well.
Although literature about social entrepreneurship is relatively young, there is written a lot about the subject. There are examples of entrepreneurs in the past (Robert Owen, Florence Nightingale, Gandhi), who would be seen as social entrepreneurs these days. The specific term social entrepreneurship is used since the late nineties by, for example, Leadbeater (1997). The definition of Dees (1998) is one of the most cited definitions of social entrepreneurship (Alvords, Brown & Letts, 2004). Innovation, social problems and social
transformation are the most important elements of social entrepreneurship (Dees, 1998;
Alvords, Brown & Letts, 2004). Based on the definition of Dees (1998), Alvords, Brown & Letts (2004) came up with the following definition: “social entrepreneurship creates innovative solutions to immediate social problems and mobilizes the ideas, capacities, resources, and social arrangements required for sustainable social transformations (Alvords, Brown & Letts, 2004, 262).”
Mair & Marti (2006) came up with a broad definition of the concept, but it points out the similarity and difference between conventional and social entrepreneurship very well. They see social entrepreneurship “…as a process involving the innovative use and combination of resources to pursue opportunities to catalyse social change and/or address social needs (Mair & Marti, 2006, 37).” Like conventional entrepreneurship, social entrepreneurship is about the innovative use and combination of resources to pursue opportunities. However, in contrast to conventional entrepreneurship, social entrepreneurship has social change and/or addressing of social needs as its main goal.
Recently, Bacq & Janssen (2011) did a research about social entrepreneurship, social entrepreneurs, and social entrepreneurship organizations. In their review they used over ten definitions of social entrepreneurship, including the definition of Alvords, Brown & Letts (2004) and Mair & Marti (2006). According to Bacq & Janssen (2011) the definition of social entrepreneurship is “the process of identifying, evaluating and exploiting opportunities aiming at social value creation by means of commercial, market-based activities and of the use of a wide range of resources (Bacq & Janssen, 2011, 376).”
Because of the similarities with the Drucker’s (1986) definition of conventional entrepreneurship in terms of opportunity, change, and innovation, the definition of Mair & Marti (2006) is used in this research.
limited by resources currently in hand, and exhibiting a heightened sense of accountability to the constituencies served and for the outcomes created (Dees, 1998, 4).”
Bacq & Janssen (2011) provided, besides the definition of social entrepreneurship, a definition of the social entrepreneur also. Despite the fact that they found a diversity of approaches reviewing seventeen definitions, they came up with the following definition of the social entrepreneur:
“The social entrepreneur is a visionary individual, whose main objective is to create social value, able at one and the same time to detect and exploit opportunities, to leverage resources
necessary to his/her social mission and to find innovative solutions to social problems of his/her community that are not properly met by the local system. This will make him/her adopt
an entrepreneurial behaviour (Bacq & Janssen, 2011, 388).”
Although the definition of Dees (1998) is acknowledged, this research uses the definition of Bacq & Janssen (2011). Bacq & Janssen (2011) used the definition of Dees (1998) to come to their own definition and furthermore the definition of Bacq & Janssen (2011) highlights three important aspects: innovation, opportunity, and social mission.
There is general agreement that entrepreneurs differ from non-entrepreneurs (Birley & Westhead, 1994). As explained above, there are some important differences between conventional and social entrepreneurship. This makes it likely that conventional and social entrepreneurs differ also. However, the empirical evidence is scarce (Hoogendoorn, 2010). Leadbeater (1997) argues that a lot of traits of successful social entrepreneurs are equal to those of a successful conventional entrepreneur. Despite the similarities, some researches also came up with differences between both types of entrepreneurs. The differences and similarities will be discussed in paragraph 2.5.
Although literature on social entrepreneurship is far from complete, a new and partially overlapping type of entrepreneurship found its way into literature; sustainable entrepreneurship. Sustainability is a prominent subject in today’s society and therefore very interesting for scientific research.
2.3 Sustainable entrepreneurship
Many scientists agree on the notion that humans severely damage the earth’s ecosystems (Cohen & Winn, 2007). Even world’s greatest leaders showed interest in the impact humans have on the environment in case of the Kyoto Accord, the global climate change project. Also business shows more responsibility in the prevention of negative effects on the environment. Acting in an entrepreneurial way to sustain the environment even created a new type of entrepreneurship: sustainable entrepreneurship. Because of the initial findings of recent empirical research, Schaper (2005) proposes “that sustainability entrepreneurship leads to a new organizational form that is uniquely suited to contribute to sustainable development in ways that other forms of entrepreneurship are not.”
and environmental consequences (Cohen & Winn, 2007, 35).” At the same time, Dean & McMullen (2007) researched the subject of environmental and sustainable entrepreneurship. They argue that environmental entrepreneurship is part of the broader concept of sustainable entrepreneurship. Dean & McMullen (2007) see sustainable entrepreneurship as the process of discovering, evaluating, and exploiting economic opportunities, where these opportunities exist because of market failures which detract from sustainability. In 2008 Schaltegger & Wagner defined sustainable entrepreneurship as “an innovative, market oriented and personality driven form of value creation by environmentally or socially beneficial innovations and products exceeding the start-up phase of a company (Schaltegger and Wagner, 2008, p. 6).”
More recent and also building on Venkataraman’s (1997) definition of entrepreneurship, Patzelt & Shepherd (2011a) came up with their definition of sustainable entrepreneurship:
“Sustainable entrepreneurship is focused on the preservation of nature, life support, and community in the pursuit of perceived opportunities to bring into existence future products,
processes, and services for gain, where gain is broadly construed to include economic and non-economic gains to individuals, the economy, and society (Patzelt & Shepherd, 2011a,
142)”
Patzelt & Shepherd (2011) further examine that sustainable entrepreneurship includes the discovery, creation, and exploitation of opportunities to create future goods.
There is a very clear link between sustainable and social entrepreneurship, both striving for the development of (non-economic) societal gains. However, there is one major difference. Patzelt & Shepherd (2011a, 143) explained this difference by stating that “…social entrepreneurship does not include the current states of nature, sources of life support, and community.” In this, nature refers to the physical world, which includes earth, biodiversity, and ecosystems. Sources of life refer to the environment as “a source of resources and services for the utilitarian life support of humankind” (Costanza et al., 1997). This includes the preservation of the environment, natural resources, and ecosystem services (Patzelt & Shepherd, 2011a). Communities refer to the “complex web of relationships between a set of individuals who share values, norms, meanings, history, and identity (Patzelt & Shepherd, 2011a, 139).” Culture, groups, and places are most important for the identity of a community.
In this research the sustainable entrepreneurship definition of Patzelt & Shepherd (2011) is used. The definition is in line with Venkataraman’s (1997) definition of conventional entrepreneurship, and holds the most important element of sustainable entrepreneurship; the preservation of nature, sources of life and/or communities. Furthermore there is an overlap between the chosen definitions of conventional and social entrepreneurship in the discovery, creation, and exploitation of opportunities.
2.4 The Entrepreneur Scan
From 1995 researchers Driessen & Zwart made an attempt to create an objective tool to measure the characteristics and capabilities necessary for successful entrepreneurship: The Entrepreneur Scan (E-scan). The E-scan is based on scientific literature and is used by lots of individuals and small organizations as well as some large banks in The Netherlands and even the Dutch Chamber of Commerce (Driessen & Zwart, 2006).
The E-scan measures the characteristics and capabilities necessary for success in entrepreneurship. According to Driessen & Zwart (2006), there are seven characteristics and six capabilities that are most important. The characteristics are need for achievement, internal locus of control, risk taking propensity, need for autonomy, need for power, need for affiliation and endurance. The capabilities are divided in two groups of three. The first group consists of creativity, flexibility and market awareness and is most important in the start-up phase of an enterprise. Planning, financial control and leadership form the second group and are more important after the start-up phase. This research focusses on the characteristics of an entrepreneur, since characteristics are enduring and have a high degree of stability across time (Roccas et al., 2002). Capabilities on the other hand are easier to develop by learning. However, since the capabilities will be measured by the E-Scan automatically as well, also the scores of the capabilities will be presented in the research. Besides the characteristics and capabilities, the E-Scan also describes the ‘style of thinking’ of an entrepreneur. There are four styles; pioneer, salesman, manager, and craftsman. Though it is not the purpose of this research to tests the differences between sustainable and conventional entrepreneurs in style of thinking, the outcomes will be presented as well.
Since there are variations in entrepreneurs, a few different E-Scan tests for different types of entrepreneurs are developed. The tests are generally the same, but focus on different aspects of entrepreneurship. This makes the outcome more valuable for the participant. These are:
§ E-Scan for starters;
§ E-Scan for self-employed; § E-Scan for entrepreneurs;
§ I-Scan for employees (intrapreneurship). Characteristics: Norm and average E-Scan profile
Figure 1: Norm profile (blue line) and example of a profile of an entrepreneur (orange web). Figure 1 shows the norm profile as Driessen & Zwart originally presented in their paper. This norm profile shows the perfect entrepreneur, according to Driessen & Zwart (2006). Recently, the norm profile is updated by Oosterling (2009) in his Master Thesis at the Rijksuniversiteit Groningen. Most of the differences between the original and updated profile are small. The only characteristic with a major difference is the need for power. This is not surprising, since the fact that literature about the perfect level of need for power is also not consistent (see paragraph 2.5).
A norm profile gives a good impression of what the perfect entrepreneur should look like, however, hardly any entrepreneur is perfect. This means that the norm profile is not a representative profile of the average Dutch entrepreneur. To give a good reflection of the average Dutch entrepreneur, the average outcome of all participants from January 2011 until February 2012 of the E-Scan for Entrepreneurs is used (N=1002). All participants were Dutch. The seven characteristics of the original, updated and average E-Scan profile are presented in Table 1. Characteristic Original norm profile Updated norm profile Average entrepreneur
Need for Achievement (Prestatiegerichtheid) 8.0 8.0 7.8
Need for Autonomy (Zelfstandigheid) 8.0 8.2 6.2
Need for Power (Dominantie) 7.0 5.1 5.9
Need for Affiliation (Sociale Oriëntatie) 8.1 7.7 7.3
Internal Locus of Control (Effectiviteit) 8.0 8.2 6.6
Endurance (Doorzettingsvermogen) 8.0 8.7 7.3
Risk-Taking Propensity (Risicobreidheid) 7.4 7.5 5.4
Table 1: E-Scan characteristics
aim of this research is to compare sustainable entrepreneurs with the conventional entrepreneur and therefore the average E-Scan profile will be used.
Capabilities and style of thinking
As explained before, the capabilities and styles of thinking of the E-Scan will be presented in this research also. However, since it is not the purpose of this research, no literature review will be done on capabilities and styles of thinking. Though, the outcomes may be interesting for further research. The capabilities of the norm, updated, and average E-Scan profile are listed in Table 2. Some scores are missing, because they are not available. The scores on the different capabilities of the average E-Scan profile will be used for the comparison of the sustainable and conventional entrepreneur.
Capability Original norm profile Updated norm profile Average entrepreneur Creativity (Creativiteit) 7.5 8.4 7.6 Flexibility (Flexibiliteit) 7.0 8.3 7.0
Market Awareness (Marktgerichtheid) 8.4 9.0 6.8
Planning (Plannen) - - 6.6
Financial control (Financieel beheren) - - 6.0
Leadership (Leidinggeven) - - 7.2
Table 2: E-Scan capabilities
The E-Scan argues that creativity is a capability and not a characteristic of an entrepreneur. According to the E-Scan, creativity means that successful entrepreneurs are open to changes in the environment and that they do not feel hindered by uncertain situations, but are challenged by the circumstances. They are willing to take risks to bring about change. Creative entrepreneurs spot chances in the market and are able to come up with innovative ideas to exploit these chances. There is substantial overlap between creativity of the E-Scan and the personality trait tolerance of ambiguity. Tolerance of ambiguity is the ability to deal effectively with situations or information that is vague, incomplete, uncertain, unstructured or unclear (Norton, 1975). Dealing with situations effectively is dealing with a situation without experiencing psychological discomfort or threat (Norton, 1975). Tolerance of ambiguity is seen as a characteristic (Oosterling, 2009), though not interesting enough to use in the E-Scan, but creativity not. In my opinion this is not right. Therefore I propose to use creativity as a characteristic. Creativity is not something that is easy to develop or learn. Some people are more able to deal with situations of change and are more creative and innovative in these situations, than others. Because of the overlap between creativity and tolerance of ambiguity and the substantial literature about tolerance of ambiguity, this research will make use of an eighth characteristic: Tolerance of Ambiguity/Creativity.
There are no norm scores of the styles of thinking. However, there is an average score available of the four styles. The average scores will be used to compare the sustainable with the conventional entrepreneur. The scores are presented in Table 3.
Style of thinking Average entrepreneur
Pioneer 0,24
Salesman 0,20
Manager 0,26
Craftsman 0,28
2.5 Personality traits
There are two streams of literature about entrepreneurs. The environmental approach and the trait approach (Brockhaus, 1980a). The characteristic or trait approach is based on psychology. This study is in line with this psychological characteristic approach. Caprana & Cervone (2000) came up with a definition of personality traits, which they called dispositions to exhibit a certain kind of response across various situations. These traits are enduring and have a high degree of stability across time (Roccas et al., 2002). Research indicates that there is a difference between the traits of successful and not successful entrepreneurs (McClelland, 1965; Gartner, 1985; Driessen & Zwart, 2006; Rauch, 2007). This review will start with the personality traits of entrepreneurs based on the E-Scan of Driessen & Zwart (2006), plus Tolerance of Ambiguity/Creativity. These traits are: (1) Need for Achievement, (2) Internal Locus of Control, (3) Risk Taking Propensity, (4) Need for Autonomy, (5) Need for Power, (6) Need for Affiliation, (7) Endurance, and (8) Tolerance of Ambiguity/Creativity (Driessen & Zwart, 2006). These traits are seen as the motivation and characteristics of an entrepreneur, where entrepreneurs will be more successful when they possess certain levels of these characteristics, as explained in paragraph 2.4.
Three of the before mentioned characteristics are most used and tested in scientific literature: Need for Achievement, Internal Locus of Control and Risk Taking Propensity. The others are tested by some of the studies. There is also some literature about the traits of social entrepreneurs, these are translated into the personality traits of E-Scan below. Literature about the traits of sustainable entrepreneurs is nil.
The elaboration of every personality trait of an entrepreneur will be concluded with a proposition. These propositions compare the sustainable entrepreneur with the conventional entrepreneur based on the average E-Scan profile.
1. Need for Achievement
Need for achievement is one of the most researched characteristic of entrepreneurs (Wainer & Rubin, 1969; Begley & Boyd, 1987; Lee & Tsang, 2001; Hansemark, 2003; Rauch & Frese, 2007; Wu, 2007). Individuals who are high achievers, set challenging goals and are continuously seeking to improve their performance (Begley & Boyd, 1987). In 1961 need for achievement was seen as the single factor that draws a man to the entrepreneurial role by McClelland (1961) in his book The Achieving Society (Schrage, 1965). Based on the work of McClelland (1961), Schrage (1965) concludes that most successful individuals are high in achievement motivation. This conclusion is also supported by Wainer & Rubin (1969), where the relationship between need for achievement and performance was tested. However, Wainer & Rubin (1969) state that the relationship is not linear across the entire range of need for achievement scores. Individuals who scored low on need for achievement did not perform significantly worse (Wainer & Rubin, 1969). Most important outcome at that time was the assumption that there is, in contrast to McClelland’s theory, more than one factors that draws a man to the entrepreneurial role.
relationship between personality traits and corporate performance (Begley & Boyd, 1987). This contradicting result compared to earlier research may be the result of several causes, but what might be interesting for entrepreneurial research is that need for achievement may be crucial for success in the early stage companies (Begley & Boyd, 1987).
More recent, Lee & Tsang (2001) tested a few personality traits on Chinese entrepreneurs in Singapore. They found a direct impact of need for achievement and internal locus of control on venture growth, with need for achievement having the greatest impact (Lee & Tsang, 2001). Lee & Tsang (2001) were not surprised since there is a low tolerance of failure in Singapore. Whether the same goes for other countries is therefore questionable. This is confirmed by the research of Hansemark (2003) in Sweden. This research concludes that there is no relation between need for achievement and entrepreneurial activity: starting a new business (Hansemark, 2003). Wu, Matthews & Dagher (2007) tested the relationship between need for achievement and entrepreneurial persistence, where persistence is one of most important factors contributing to the high start-up failure rates (Wu, Matthews & Dagher, 2007). The following statement makes the importance of persistence, and therefore need for achievement more clear: you cannot win a game if you do not stay to play (Shane, Locke & Collins, 2003). Most recent research showed that need for achievement is correlated with entrepreneurial behaviour, which is business creation and business success (Rauch & Frese, 2007).
Specific research on need for achievement of social entrepreneurs is not done yet, however there are some characteristics known that suggests a high need for achievement of social entrepreneur. For example, Bacq & Janssen (2011) argue that social entrepreneurs have a reputation of being very driven and opportunistic. Furthermore, social entrepreneurs are not wealth driven, but mission driven (Dees, 1998). They are willing to fill the gaps that the market is not able to fill, which is often difficult. However, the social entrepreneur is willing to make the difference.
There is no scientific research about the level of need for achievement of a sustainable entrepreneur. Though, realizing that the sustainable entrepreneur wants to create personal and societal gain and also wants to preserve nature, life support and community, a sustainable entrepreneur is expected to score higher on need for achievement than a conventional entrepreneur does. Therefore the first hypothesis is:
Proposition 1. The need for achievement of a sustainable entrepreneur is higher than the need for achievement of the average E-scan profile.
2. Internal Locus of Control
(Rotter, 1966). As Brockhaus (1975) presented, internal locus control is related to entrepreneurship. The explanation for this relation is that “individuals who attribute responsibility for their performance to themselves tend to assume that they can cause certain changes in their environment (they apply specific decision patterns), which in turn leads to an increase in their motivation” (Anderson, 1977, 446). Anderson (1977) came to the conclusion that internal locus of control is a prerequisite of success for entrepreneurs. Furthermore they concluded that internals perceive less stress than externals, internals are more task-oriented, and that internals perform better in organizations than externals (Anderson, 1977). Brockhaus (1980b) confirmed the importance of internal locus of control for entrepreneurs even more, showing that successful entrepreneurs were more internal than unsuccessful entrepreneurs.
Sexton & Bowman (1985) researched different personality traits of an entrepreneur vs. a manager. They argued that there is no general agreement about locus of control being a characteristics attributed to entrepreneurs more than mangers, referring also to their research one year before (Sexton & Bowman, 1984). However, Box, White & Barr (1993) did found a significant positive relation of locus of control with firm performance. Entrepreneurs with an internal locus of control have better performance (Box, White & Barr, 1993). Lee & Tsang (2001) presented their results of internal locus of control influencing venture growth. They argue that internal locus of control has a positive effect on venture growth, at least in China. A research about entrepreneurial activity related to internal locus of control was done by Hansemark (2003). The outcome was that internal locus of control does not have a predictive validity on entrepreneurial activity. Rauch & Frese (2007) concluded that locus of control seems to affect the performance of an entrepreneur, but that is may not be important to entrepreneurs only, but also to managers or politicians.
The internal locus of control of social entrepreneurs is not known yet. However, there is some research that indicates a high internal locus of control. The social entrepreneur is considered as an individual able to reform or revolutionize the production processes of social value creation to offer superior return for society, from a Schumpeterian perspective (Dees & Anderson, 2006). Reforming or revolutionizing implies a drive to change traditional ways of production, doing things different. The social entrepreneur has to convince the society that his endeavour is to bring about social change (Vasakarla, 2008). This makes a social entrepreneur need to have a high self-belief and self-confidence and therefore a high internal locus of control.
Since sustainable entrepreneurs aim at both economic and societal gain, while preserving nature, sources of life and communities, they have to have a strong belief in themselves. Especially since these goals are sometimes contradicting. To create sustainable products or services, they have to do things different from the non-sustainable entrepreneurs. Therefore the internal locus of control of a sustainable entrepreneur is suggested to be higher than the internal locus of control of a conventional entrepreneur. That leads to the following hypothesis:
Proposition 2. The internal locus of control of a sustainable entrepreneur is higher than the internal locus of control of the average E-scan profile.
3. Risk Taking Propensity
risk taking propensity often used is low, intermediate or moderate, and high (Brockhaus, 1980a). Brockhaus (1980a, 513) defined risk taking propensity as “the perceived probability of receiving the rewards associated with success of a proposed situation, which is required by an individual before he will subject himself to the consequences associated with failure, the alternative situation providing less reward as well as less severe consequences than the proposed situation.” In his research, Brockhaus (1980a) found no significant difference between the risk taking propensity of managers and entrepreneurs. This does, however, not mean that entrepreneurs do not have a moderate risk taking propensity. Actually, a comparison with another research showed that both managers and entrepreneurs are moderate risk takers (Brockhaus, 1980a). Sexton & Bowman (1983), who did research on students, found significant differences between entrepreneurship majors and other business students. Students of entrepreneurship scored significantly higher on risk taking propensity than other business students do.
A few years later Begley & Boyd (1987) compared the risk taking propensity of founders and non-founders and came up with the conclusion that founders score higher on risk taking propensity. Masters & Meier (1988) researched the risk taking propensity of both managers and entrepreneurs. Like some others, they concluded that both groups do not differ in terms of risk taking. The meta-analysis of Stewart & Roth (2001) suggests that there is a difference between managers and entrepreneurs in risk taking propensity. However, where Stewart & Roth (2001) argue that entrepreneurs score higher on risk taking propensity, Miner & Raju (2004) argue the opposite. That is why Stewart and Roth (2004) made a new attempt to research the risk taking propensity, concluding that they are “still optimistic about the potential for risk propensity to help clarify entrepreneurial behaviour (Stewart & Roth, 2004, 20).
In social entrepreneurship, the social entrepreneur is seen as a high risk taker. Weerawardena & Mort (2006) observed that the aspect of risk distinguishes social entrepreneurs and conventional entrepreneurs. It is much harder for social entrepreneurs to fund the enterprise compared to the conventional entrepreneurs (Weerawardena & Mort, 2006). Revenue of social enterprises comes from different sources, for example donations, sponsorships and government grants, which make the income very insecure and unstable. Furthermore, they cannot offer a return on investment. The high score on risk taking propensity is validated by Vasakarla (2008), who argues that the social entrepreneur does not mind to take risk for the sake of human values.
Sustainable enterprises are like social enterprise, with exception of the preservation of nature, sources of life and communities. The similarities imply that the risk a social entrepreneur takes is equal to the risk a social entrepreneur, at least in funding the enterprise. Furthermore, most of the sustainable product and services are, at least at this moment, more expensive than their not sustainable counterparts. This makes it hard to bring competitive products and services to the market. Only when the sustainable entrepreneur is able to use the sustainability aspect as a competitive advantage, they will be able to survive. All in all, the risk taking propensity of a sustainable entrepreneur is expected to be higher than the risk taking propensity of the conventional entrepreneur. This leads to the third hypothesis:
4. Need for Autonomy
The fourth personality trait of an entrepreneur is the need for autonomy. The concept of autonomy refers, according to Lumpkin & Dess (1996) to “the independent action of an individual or a team in bringing forth an idea or a vision and carrying it through to completion” (Limpkin & Dess, 1996, 140). As they argue, autonomy is an important element in the Entrepreneurial Orientation (EO), which is the practices, processes, and decision-making activities that lead to new entry (Lumpkin & Dess, 1996). Control is important for people high in need for autonomy. Because they avoid the restrictions of established organizations, they often choose to become an entrepreneur (Rauch & Frese, 2007).
Many years ago, Hornaday & Bunker (1970) already stated that there was a (positive) link between autonomy and entrepreneurs, where entrepreneurs scored higher on autonomy than the norm groups. Throughout the years, scientists seem to agree about the relationship of autonomy and entrepreneurship. Sexton & Bowman (1985) argued that potential entrepreneurs have high scores on need for autonomy, which indicates self-reliance and independence (Sexton & Bowman, 1985). According to Rauch & Frese (2007) need for autonomy is an important predictor of entrepreneurial behaviour.
Where high need for autonomy is sometimes a reason to become an entrepreneur, a social mission is most of the time the reason to become a social entrepreneur (Bacq & Jansen, 2011). Social entrepreneurship is based on a visionary and innovative approach (Dees, 1998). The social entrepreneur wants to solve a problem in society, and therefore the individual behaviours in an entrepreneurial way. Since autonomy seems not to be the drive behind this behaviour, the need for autonomy of a social entrepreneur is expected to be low.
Although literature about this characteristic of the sustainable entrepreneur is lacking, the need for autonomy is suggested to be low as well. As Patzelt & Shepherd (2011b) argue, sustainable entrepreneurship distinguishes itself from conventional entrepreneurship in that it focusses on gains for those other than the entrepreneur as well as personal gain. However, social entrepreneurs act in the name of their mission, while sustainable entrepreneurs are willing to create financial gain in a sustainable way. Therefore the need for autonomy is expected to be higher than the need for autonomy of a social entrepreneur, but still not as high as the conventional entrepreneur. This means that the following hypothesis is:
Proposition 4. The need for autonomy of a sustainable entrepreneur is lower than the need for autonomy of the average E-scan profile.
5. Need for Power
Before Wainer & Rubin came up with their findings, Schrage (1965) already researched the ‘power motive’ of R&D entrepreneurs. They linked power to leadership style also. According to them, low power motive individuals delegate and accept suggestions of others in and around the organization (Schrage, 1965). Delegation to well informed subordinates can be very successful, however, a wrong choice of subordinates could have major consequences. Individuals with high power motivation have generally tight (financial) control and therefore correct losses in an early stage. According to Schrage (1965), this makes it reasonable that they have small profits or losses. Schrage (1965) concludes with the statement that the most successful individual score low on need for power. Sexton & Bowman (1983) researched the difference between students majoring in entrepreneurship and other business students and concluded that students majoring in entrepreneurship scores significantly higher in dominance.
In line with the need for autonomy, the need for power of social entrepreneurs is expected to be low. Although there is no scientific literature about the need for power of sustainable entrepreneur, Nga & Shamuganathan (2010) argue that social entrepreneurs score high on agreeableness. Agreeableness is the opposite of need for power, because it is explained as the ability to foster social consensus (Nga & Shamuganathan, 2010). Empathy and promoting harmony are important in case of agreeableness. Since social entrepreneurs score high on agreeableness, the need for power of social entrepreneurs is expected to be low. Furthermore, the individual behind the social enterprise and private benefits are not the most important aspects of social entrepreneurship. The social impact is the gauge in social entrepreneurship (Dees, 1998). This is in contrast with the conventional entrepreneur.
The same goes for the sustainable entrepreneur. Sustainable entrepreneurs are not only focussed on private benefits, but also on benefits for others than the entrepreneur (Patzelt & Shepherd, 2011b). Agreeableness seems to be more important than the need for power. Therefore the need for power of sustainable entrepreneurs is expected to be lower than the need for power of the conventional entrepreneur. This leads to the following hypothesis:
Proposition 5. The need for power of a sustainable entrepreneur is lower than the need for power of the average E-scan profile.
6. Need for Affiliation
Need for affiliation is mentioned in some scientific papers, for example Rauch & Frese (2007) who studied many articles about the characteristics of an entrepreneur. However, Rauch & Frese (2007) do not discuss the subject of affiliation at all. This is common in other articles.
entrepreneurs and managers, which means that need for affiliation is also influenced by national culture (Daum et. al, 1993).
There is no literature about need for affiliation of social entrepreneurs. However, it is known that social entrepreneurs have a mission and want to create social value for others (Dees, 1998). Furthermore it is hard for a social entrepreneur to fund the enterprise in a ‘conventional’ way, which means that they have to find other sources. Therefore interaction and cooperation with others therefore seems to be important. This is also confirmed by Nga & Shamuganathan (2010), who concluded that social entrepreneurs are score high on agreeableness. All in all, the social entrepreneur needs other people to cooperate and acts entrepreneurial for the benefit of others. Therefore they seem to have a high need for affiliation.
The argumentation above also counts for sustainable entrepreneurs. The social dimension of sustainable entrepreneurship makes that it is suggested that sustainable entrepreneurs will score higher on need for affiliation than conventional entrepreneurs do. Therefore hypothesis 6 is:
Proposition 6. The need for affiliation of a sustainable entrepreneur is higher than the need for affiliation of the average E-scan profile.
7. Endurance
Rauch & Frese (2007) listed the characteristic endurance in their article as one of the characteristics researched in the past. However, an explanation or discussion of this characteristic is missing. This tends to be common in other scientific work.. It seems that scientists agree on the importance of endurance, but that it is seen as a logical characteristic.
One of the few sources of scientific research on endurance available is Mescon & Montanari (1981). They found that independent entrepreneurs score higher on endurance than franchise entrepreneurs (Mescon & Montanari, 1981). A lot of words have somewhat the same meaning as endurance, for example, persistence. Wu, Matthews & Dagher (2007) argue that persistence is very important in entrepreneurship. The statement of Shane, Locke & Collins (2003) makes the importance of endurance, like need for achievement, clear: you cannot win a game if you do not stay to play.
The literature of endurance in social entrepreneurship is also scarce. However, Dees (1998) argues that social entrepreneurs are very persistent. He states that “rather than giving up when an obstacle is encountered, entrepreneurs ask, “How can we surmount this obstacle? How can we make this work (Dees, 1998)?” Therefore social entrepreneurs seem to score high on endurance.
Sustainable entrepreneurs are very similar to social entrepreneurs in terms of endurance. They also have to surmount several obstacles in the complex environment. Therefore it is suggested that sustainable entrepreneurs will score higher on need endurance than the average E-Scan profile. Therefore hypothesis 7 is:
8. Tolerance of Ambiguity/Creativity
Literature about the relation between personality traits and ambiguity stems from almost hundred years ago, where McDougall (1926) wrote about the subject. Tolerance of ambiguity is a trait closely related to uncertainty. Though, psychologists argue that there is an important difference (Schere, 1982). Uncertainty is a state of mind resulting from ambiguity. While the term ambiguity is often used for the same state of mind, psychologists define tolerance of ambiguity as the ability to deal effectively with situations or information that is vague, incomplete, uncertain, unstructured or unclear (Norton, 1975). Dealing with situations effectively is dealing with a situation without experiencing psychological discomfort or threat (Norton, 1975). Since uncertainty-bearing is an important element in entrepreneurship, tolerance of ambiguity is seen as an important trait. To be able to deal with uncertain situations, an entrepreneur needs to be creative. Creative in a sense that an individual is not hindered by the situation, but is challenged by the circumstances. This is exactly what the E-Scan of Driessen & Zwart (2006) measures.
Schere (1982) researched the difference in tolerance of ambiguity between entrepreneurs and managers. He argues that entrepreneurs score higher on tolerance of ambiguity than managers do. Furthermore he concludes that the so called budding entrepreneurs form a mid-group between both managers and entrepreneurs. This makes sense, since budding entrepreneurs have not founded their own firm yet, but are convinced that they will be able to do so. Sexton and Bowman (1985) state that potential entrepreneurs and potential managers also differ in tolerance of ambiguity, derived from their research in 1984. Therefore they argue that tolerance of ambiguity seems to be a unique component of the personality of an entrepreneur (Sexton & Bowman, 1985). However, Begley (1995) did not found a difference in tolerance of ambiguity of entrepreneurs and small business owners. Wincent & Westerberg (2005) researched the tolerance of ambiguity of CEO’s related to the degree of entrepreneurial behaviour. They argue that there is no direct relation between tolerance of ambiguity and entrepreneurial behaviour, but that there is an indirect relationship through inter-firm networking. Ramana, Aryasri & Nagayya (2008) found a positive relation between tolerance of ambiguity and entrepreneurial success. The higher the score on tolerance of ambiguity, the greater the entrepreneurial success (Ramana, Aryasri & Nagayya, 2008). Wagener, Gorgievski & Rijsdijk (2010) did research on tolerance of ambiguity in the hospitality industry. They concluded that entrepreneurs score higher on tolerance of ambiguity than small business owners (Wagener, Gorgievski & Rijsdijk, 2010).
Social entrepreneurs need to be very creative and innovative because of the societal problems they want to solve. As Dees (1998) argues, they continuously have to explore, learn, and improve. This leads to uncertain situations, and makes that a social entrepreneur needs to have a high tolerance of ambiguity/creativity. Furthermore, Nga & Shamuganathan (2010) argue that social entrepreneurs score high on openness. Individuals who score high on openness are not afraid of new challenges and are often very creative (Nga & Shamuganathan, 2010). Therefore the social entrepreneur seems to have a high tolerance of ambiguity/creativity (Dees, 1998).
entrepreneur has to be very creative and that the sustainable entrepreneur is expected to have a high tolerance of ambiguity/creativity. This leads to the following hypotheses:
Proposition 8. The tolerance of ambiguity/creativity of a sustainable entrepreneur is higher than the tolerance of ambiguity/creativity of the average E-scan profile.
2.6 Conceptual model
The conceptual model is a descriptive model, representing the behaviour of the characteristics of an entrepreneur influenced by sustainable entrepreneurship.
Figure 1: Conceptual model − − + + + + + S us ta ina b le e nt re p re ne ur shi p
Need for Achievement
Internal Locus of Control
Risk-Taking Propensity
Need for Autonomy
Need for Power
Need for Affiliation
Endurance Difference between sustainable
and conventional entrepreneurs
3. Method
In this chapter the methodology of the research will be explained in four paragraphs; research method, research criteria, data collection, and data analysis. The methodology is based on Blumberg, Cooper & Schindler (2008). The goal of this methodology is to answer the question: What are the characteristics of a sustainable entrepreneur and what are the differences with the conventional entrepreneur?
3.1 Research method
This research is a descriptive, quantitative study based on the Entrepreneur Scan (E-Scan) of Entrepreneur Consultancy B.V. The E-Scan is a self-reflection test for (future) entrepreneurs and is used by well-established firms like Rabobank, a Dutch cooperative bank, and the Dutch Chamber of Commerce (KvK) to reflect on investment decisions. The E-scan is based on scientific literature (Driessen & Zwart, 2006).
The E-Scan is a fully structured online questionnaire, which contains over 100 questions enclosing the seven most important personality traits, the six most important capabilities and
four styles of thinking of an entrepreneur. The test is originally Dutch
(http://www.ondernemerstest.nl/), but is also available in English nowadays (http://www.entrepreneurscan.co.uk/).
For this research Dutch sustainable entrepreneurs are invited to do the E-Scan, which represents the sample of the study. The average E-Scan profile (N=1002) is used to make a comparison between the sustainable entrepreneurs and the conventional entrepreneur.
3.2 Participant criteria
For finding sustainable enterprises, the definition of Patzelt & Shepherd (2011) is used. This means that an enterprise is sustainable when:
§ The firm brings into existence products, processes or services.
§ The firm makes a statement in their mission that they contribute to the preservation of nature, life support or communities.
§ The development of non-economic goals (for both individual and society) is, together with economic gains, important to the enterprise.
Besides the criteria above, a quality mark for sustainability is preferred, but not obliged. The same goes for the use of the word ‘sustainability’ in the mission statement of a firm specifically. Where some research is focussed on a few specific industries, the industry these sustainable firms are in is not important. The research is about the sustainable entrepreneurs, not the enterprise they own.
The owner-manager of a sustainable enterprise is seen as a sustainable entrepreneur. Therefore only the owner-manager of a sustainable enterprise will be participating in this research. When a firm is owned by several people, all of them are allowed to participate.
3.3 Data collection
‘image’ suggests, it is not about being sustainable, but letting people think you are sustainable. For example, the production of an enterprise pollutes the soil around their factory. But to cover this pollution, they advertise with their projects to generate green energy with solar panels on the roof of the factory. These are definitely not sustainable enterprises. Therefore all the firms in this research are checked on the criteria explained in paragraph 3.2.
To check whether firms are sustainable or not, the internet site of 250 enterprises is researched in depth. This means that the mission statement and vision of the enterprises are checked on the criteria mentioned in paragraph 3.2. Those firms fitting the criteria are seen as sustainable and are used in this research, the others are dropped out. The sample is found by accidental/convenience sampling. Not every sustainable entrepreneur has an equal chance of selection, since only the internet site www.allesduurzaam.nl is used. This method is used because these enterprises are closest at hand and this research has to be completed in a relatively short time. Disadvantage is that the results are less representative for the whole population.
From the 250 enterprises researched, only 79 entrepreneurs were invited to participate to this research. The reason that 171 enterprises dropped out is that lots of enterprises with a ‘green’ label on the original list of enterprises are not sustainable according to the definition used in this research. To invite the 79 entrepreneurs to participate, an e-mail (Appendix I) was sent to the entrepreneurs. This e-mail was followed up by a reminder (Appendix II), four days later. The response rate was very low, only 5 entrepreneurs (6%) were willing to make the test.
Additional research of 50 enterprises on www.allesduurzaam.nl made it possible to add 16 firms to list of sustainable enterprises fitting the criteria. The entrepreneurs of these 16 firms were approached in a different way to create a higher response rate. No e-mail was sent, but they were all approached by telephone. After the first phone call a reminder followed by e-mail and some of the entrepreneurs who had promised to do the E-Scan were reminded by another e-mail as well as another phone call a few days before the deadline. From these 16 entrepreneurs, 8 were willing to complete the E-Scan (50%). Because of the high response rate compared to the e-mail approach, the remaining 74 of the 79 entrepreneurs of the original list were contacted by phone in the same way. It turned out to be very difficult to reach the owner-managers of large businesses. However, some sustainable entrepreneurs of small businesses were very enthusiastic about participating. The second attempt to approach the entrepreneurs from the original list of 79 enterprises resulted in 13 more respondents, which made a total of 26 out of 95 entrepreneurs (27%).
3.4 Data analysis
4. Results
In this chapter the results of the research will be presented. The outcomes are based on the results of the E-Scan for Entrepreneurs.
4.1 General information of the sample
The sex of the sample is to a large extent male. There are three females out of the 26 respondents, which represents a rate of 15,4%. This means that 84,6% is male. Over 50% of the sustainable entrepreneurs of this sample are aged between 31 and 50 years old. Two entrepreneurs aged between 21 and 30 years participated and one participant is over 60 years old (Appendix II).
4.2 Personality traits
The outcome of the analysis shows some differences and similarities in personality traits of sustainable entrepreneurs vs. the average E-Scan profile. In Table 4 an overview of the different characteristics is presented. The average E-Scan profile, the profile of the sustainable entrepreneur and the differences are shown. The differences of the characteristics Need for Achievement, Risk Taking Propensity, Need for Power and Tolerance of Ambiguity are significant (marked with: *). Further on, every trait will be addressed specifically, including the test of the hypothesis. The confidence level of the test is 95%. The print out of SPSS is presented in Appendix II.
Need for Achievement
The average score of the sustainable entrepreneur on need for achievement is 7,3. The score of the average E-Scan profile is 7,8. This difference is significant. Therefore hypothesis 1 is rejected. So, in contrast to the hypothesis, the need for achievement of sustainable entrepreneur is significantly lower than the need for achievement of the average E-Scan profile.
The significant difference is remarkable, because of the challenging goal(s) sustainable entrepreneurs aim for. The E-Scan norm of need for achievement is 8,0. This means that a successful entrepreneur should be goal-oriented, willing to battle against other to realize their goals and that they want to outshine. This may be the reason why sustainable entrepreneurs score lower on need for achievement, because they may not be the individual who wants to outshine others. The benefits for society are more important. Secondly, sustainability is about the long-term instead of short-term success. This may have influenced the outcome as well.
Characteristic Average
E-Scan profile
Sustainable entrepreneur
Differences
Need for Achievement* 7.8 7.3 − 0.5
Internal Locus of Control 6.6 6.4 − 0.2
Risk-Taking Propensity* 5.4 6.3 + 0.9
Need for Autonomy 6.2 6.2 -
Need for Power* 5.9 5.3 − 0.6
Need for Affiliation 7.3 7.5 + 0.2
Endurance 7.3 7.0 − 0.3
Internal Locus of Control
While hypothesis 2 suggests that the internal locus of control will be higher for sustainable entrepreneur compared to the average E-Scan profile, the opposite is true. With a score of 6,4 the sustainable entrepreneurs score 0,2 lower on internal locus of control than the average E-Scan profile does (score = 6,6). The difference is not significant.
Both types of entrepreneurs have to believe that they are able to be successful without depending on others. Otherwise success will be based on luck a faith, which is contradicting the purpose of entrepreneurship. Although the hypothesis suggested a significant difference, the absence of this difference it not an enormous surprise. It seems a characteristic that every type of entrepreneur needs to have.
Risk Taking Propensity
The risk taking propensity of sustainable entrepreneurs is 6,3 out of 10. This score is much higher than the score of the average E-Scan profile: 5,4. The difference is significant, and therefore hypothesis 3 is accepted. Sustainable entrepreneurs are more risk takers than the average E-Scan profile.
In today’s business, sustainability often means ‘more expensive’ since sustainable resources and processes are costly. Therefore competing with other enterprises is very hard. Like one of the participants said “I’m not sure whether I’m willing to participate in the research. We work very hard, every day for the last three years and still we are not sure whether we will be able to succeed. It is very hard to run a sustainable enterprise with the competition of not sustainable enterprises. Therefore my leisure time is scarce.” Starting a sustainable enterprise is associated with high risks, which exemplifies the high risk taking propensity.
Need for Autonomy
The average E-Scan profile score on need for autonomy is 6,2, rounded off upwards from 6,164. Hypothesis 4 suggests that the score of sustainable entrepreneurs will be lower. The analysis of the data makes clear that there is only a minor difference, and the sustainable entrepreneur scores slightly higher. The score of the sustainable entrepreneur is 6,197. Therefore the difference is not significant.
Although the result is slightly surprising, both the conventional and sustainable entrepreneur made the choice to start their own venture in order to pursue their goals. The need for autonomy is a (un)conscious need of an individual to become an entrepreneur, according to the E-Scan. The E-Scan argues that an entrepreneur wants to be able to make his own decisions, not depending on others. Since both types of entrepreneurs indeed made the decision to become an entrepreneur, the absence of a significant difference makes sense.
Need for Power
Hypothesis 5 suggests that the need for power of a sustainable entrepreneur will be significant lower than the need for power of the average E-Scan profile. The outcome of the analysis is a score of 5,3 of the sustainable entrepreneur, while the average E-Scan profile shows a score of 5,9. The difference is significant and therefore hypothesis 5 is accepted.
