A Comparison of the Personality of Social and Commercial Entrepreneurs

Table of Contents

1. Introduction
1.1 Goal of this Thesis
1.2 Relevance for Theory and Practice
1.3 Structure

2. Theoretical Background
2.1 Personality Trait Research in Entrepreneurship Research
2.2 Personality Traits of the Entrepreneur
2.3 Personality Traits of the Social Entrepreneur

3 Study
3.1 Aim of the Study
3.2 Independent Variables
3.3 Dependent Variables
3.5 Method

4 Results
4.1 Descriptive Results
4.2 Effects of Personality Traits
4.3 Comparison of Personality Compositions

5 Discussion
5.1 Discussion
5.2 Limitations and further Research

6 References

7 Figures

8 Tables

1. Introduction

1.1 Goal of this Thesis

Entrepreneurship has been a topic of scholarly interest for decades. In recent years, social entrepreneurship gained researcher’s attention (Martin & Osberg, 2007) “as an innovative approach for dealing with complex social needs. ” (Johnson, 2000, p. 1) Scholars agree that the social entrepreneur (SE) is driven by social goals as he aims “ to contribute to welfare or well being in a given human community ” (Peredo & McLean, 2006, p. 59). He is not concerned with maximizing his, or his shareholder’s profits primarily.

Naturally, researchers in social entrepreneurship exhibited a lot of interest in the depiction of the social entrepreneurial personality, but results have mostly taken the form of “idiosyncratic insights based on individuals identified as successful social entrepreneurs” (Dacin, et al., 2010, p. 38). While focusing on personality traits is an important area of entrepreneurship research with a long history (Zhao & Seibert, 2006; Rauch & Frese, 2007) and an extensive body of literature on the unique traits of the social entrepreneur has developed already, social entrepreneurship research generally lacks the application of quantitative data analysis and little attempts have been made to directly compare the social and traditional entrepreneurs (Smith, et al., 2014).

Therefore, the questions this thesis poses are:

1. What is the influence of personality on the decision to (potentially) become a social entrepreneur?
2. Do these influences differ from the decision to (potentially) become a traditional entrepreneur?
3. How do the personalities of the social and traditional entrepreneur differ? Answers to these questions could provide interesting implications for entrepreneurship research and practice.

1.2 Relevance for Theory and Practice

Due to the increased interest in social entrepreneurship in recent years, the question as to whether or not the field transcends the theory of entrepreneurship has come up, with researchers such as Mair & Marti (Mair & Marti, 2006), supporting the idea and others acknowledging differences, but keeping it within traditional theory (Dacin, et al., 2010). It is a question as to what researcher’s efforts should be focused on. By preemptively assuming that social entrepreneurship is a sub-category of entrepreneurship, one might overlook important differences, but efforts would be wasted if one just left the theory already created for traditional entrepreneurship behind.

With theories of career choice, person-environment fit and work performance in mind, one can conclude that the process of job-person matching occurs in the same way among entrepreneurs as it does in other professions (Zhao, et al., 2010). Indeed, a solid body of evidence exists on the influence of the entrepreneurial personality on other areas of entrepreneurship research (Zhao & Seibert, 2006). Hence, differences in personality traits between social and traditional entrepreneurs can be an indicator of the environment they work in and could therefore point to areas of entrepreneurship theory that might not be readily applicable to social entrepreneurship. Therefore, directly comparing their personality will help clarify this question.

While evidence for the difference in personality traits between social and traditional entrepreneur exists already (Smith, et al., 2014); measures such as the Five Factor Model (FFM) of Personality (Costa & McCrae, 1992) may be able to draw a broader picture (Leutner, et al., 2014) of the differences between social and traditional entrepreneurs by compressing a vast array of personality traits into a small set of factors, while still exhibiting an acceptable level of predictive power on entrepreneurial status (Zhao & Seibert, 2006). On the other hand, the predictive power of the FFM could be enhanced by distinguishing between different types of entrepreneurship since they involve different skills and knowledge and might therefore need different theoretical explanations (Zhao & Seibert, 2006).

Additionally, moving away from qualitative research and instead, applying quantitative methods using the five factor model of personality, a tool well tested and spread inside as well as outside of entrepreneurship research (Rauch, 2014), will ease further examinations of the social entrepreneur. This approach will also allow us to address the lack of quantitative data analysis techniques applied in social entrepreneurship research (Dacin, et al., 2011).

The relevance of the question as to how the two types of entrepreneurs differ is not limited to theory though. Should it be the case that individuals with the same personality composition become social and traditional entrepreneurs, one should investigate the question of what the deciding factors are for him to channel his entrepreneurial potential into a venture with primarily social goals or primarily monetary goals. This would be important to know for policy makers, as they will have to decide where and how they set incentives as to channel the total entrepreneurial potential towards social or conventional entrepreneurship. Since personality traits, even though stable over time, are still malleable to a certain degree, it could also mean gearing education, towards strengthening one or the other type of personality trait (the topic of personality trait development is highly debated by scholars, with some saying that personality is genetically predetermined (Ferrer-i-Carbonel & Frijters, 2004) and others saying that it is developed through experiences (Borghans, et al., 2008), while even others state that it is influenced by both elements (Whybrow, 1999)). This would be the case should the personality constructs differ.

1.3 Structure

The document is structured as follows. First, chapter 2 places personality research within entrepreneurship research and goes to introduce the theory already existent and relevant for the purpose of this thesis. Chapter 3 describes the aim and methodology of the study carried out and introduces the variables used in the subsequent analysis. Chapter 4 consists of an analysis of the data set created through the study. Here, linear regressions and means comparisons are carried out in order to find answers to the research questions. Last but not least, chapter 5 discusses the findings of the analysis carried out in chapter four.

2. Theoretical Background

2.1 Personality Trait Research in Entrepreneurship Research

While it can be said to be in a phase of maturing (Chell & Karatas-Özkan, 2014) entrepreneurship research still is a relatively young field, compared to other fields such as social sciences or economics, with it dealing with conceptual issues and developing a theoretical base. The biggest problem the field suffers from is the lack of a conceptual framework (Shane & Venkataraman, 2000), enhancing the difficulties of merging the different perspectives on the phenomenon. The discussion involves aspects such as whether or not an entrepreneur necessarily has to found a company himself (“entrepreneurship” vs. “intrapreneurship”) whether small shop owners are “entrepreneurial” and many more (for an overview on the topic see e.g. Shane and Venkataraman (Shane & Venkataraman, 2000)).

Early definitions of entrepreneurship stemmed from economics, defining entrepreneurship as a function creating (the Kirznerian entrepreneur) or destroying (the Schumpeterian entrepreneur) market equilibriums, and economists making first assumptions as to what these individuals causing/executing these functions could be like, mostly describing them as risk- takers and/or innovators. Economic theorists recognized the need to introduce psychological concepts in further analysis of the phenomenon (Chell, et al., 1991). Followed by this was a plethora of research on the entrepreneur as an individual aimed at finding what distinguishes them from “non-entrepreneurs” or managers, be it motivation, personality, demographic factors. Inconclusive, sometimes even contradictory, findings led to compelling arguments being made to move on from the individual as the unit of analysis. The attitude towards research on the personality of the entrepreneur is well summarized by Gartner’s statement “ I believe the attempt to answer the question “ Who is an entrepreneur? ” [ … ] will neither lead us to a definition of the entrepreneur nor help us to understand the phenomenon of entrepreneurship. [ … ] this view alone is inadequate to explain the phenomenon of entrepreneurship. ” (Gartner, 1988, p. 12).

This moves other areas, such as the opportunity or the entrepreneurial process into the focus of scholarly interest with scholars defining entrepreneurship as the discovery, evaluation and exploitation of future goods and services, thereby making “ the sources of opportunity, the process of discovery, evaluation and exploitation of opportunities; and the set of individuals who discover, evaluate and exploit them ” (Shane & Venkataraman, 2000, p. 218) the topic of research.

In conclusion, it can be said that the personality trait approach has been a highly debated topic in entrepreneurship research moving in and out of scholarly focus, yet remaining of interest. Its past being plagued by inconclusive results on the relationship between traits, business success and foundation with some scholars going as far as to state that the approach should be abandoned entirely (Gartner, 1988). Yet, recent meta-analyses and the emergence of new models, such as the five-factor model of personality (Costa & McCrae, 1992), provided evidence for not only the predictive power of the approach (Rauch & Frese, 2007) but also its relevance and usefulness (Rauch, 2014).

Research on social entrepreneurship, even when compared to entrepreneurship, is fairly new and therefore still in what might be described as an infancy or “preparadigmatic” state (Nicholls, 2010). This might suggest that it is a new phenomenon and yet it is deeply rooted in many economies but only gained attention from the states and media in light of the recent economic crisis and research started taking up speed since then (Phan, 2014).

As a young field, social entrepreneurship suffers from much of the same issues as entrepreneurship. There is a “ seemingly endless definitional debate amongst academics ” (Smith, et al., 2014, p. 201), with 42 different definitions to be found in the top 100 business journals indexed in the ISI Web of Knowledge Database. There are different opinions on this lack of conceptual clarity of social entrepreneurship. The first stance is a call for a narrow definition of the topic stating that current definitions are so broad that nearly all socially responsible activities fit. The second approach goes contrary to the first, stating that “premature terminological closure” might hurt the development of the field by potentially excluding important, still unknown, aspects of the phenomenon. The third view on the topic makes the point that the scholarly debate on a definition is just one voice in the matter and that practitioners definitions are just as important (Phan, 2014).

The existing research on social entrepreneurship can be clustered into three fields:

The antecedents of social entrepreneurship:

Analyses of the antecedents happen on the individual level, scrutinizing the motivations, skills and competencies etc. of the entrepreneur, or at the level of the individual as part of societal groups, at the organizational level, analysing what the traits of a successful social enterprise are, and last but not least, at an institutional level. Here, factors such as the economy, societal rules etc. are the subject of interest.

The social entrepreneurial process:

This approach scrutinizes the set of activities underlying social entrepreneurship, asking “how” social entrepreneurs act, rather than who they are (Mair & Marti, 2006). Here, social entrepreneurship is viewed as a process involving the innovative use and combination of resources to pursue opportunities and address social needs (Guclu, et al., 2002).

The outcomes:

This cluster of research on social entrepreneurship concerns itself with what its outcomes should be and how to measure them. Since the success or failure of a social venture depends on other variables than its economic success. Despite the normative and subjective dominance in the discussion regarding the measurement of the outcomes, different measurement systems emerged (Bruin, et al., 2014).

As part of the antecedents of social entrepreneurship, the field has already seen attempts at identifying characteristics, traits and skills that make a social entrepreneur (Mair & Marti, 2006) but the approach is already in danger of being dismissed as being of little use to theory, seemingly repeating traditional theory’s mistakes.

2.2 Personality Traits of the Entrepreneur

Focusing on the individual has a long tradition in entrepreneurship research (Gartner, 1988; Rauch, 2014). There are multiple ways for investigating the individual. One prominent way to do so is the demographic approach. It looks at the individual’s human, social and financial capital, as well as potential role models, their family situation, gender, ethnicity and links it to entrepreneurial activity. While it does give interesting insight into the reality of entrepreneurship, it can be said that it is little theory based and mostly summarizing empirical observations (Vandor, 2007).

Another individual-centric approach focuses more on the psychological and cognitive properties of the entrepreneur; the so-called personality traits approach. The idea being that individuals with a certain personality act similarly in different situations i.e. they become entrepreneurs and others do not. These traits that “make” the entrepreneur are considered to be relatively stable over time. Personality traits play an important role in influencing other areas of entrepreneurship; subsequently a substantial amount of research has been conducted on the topic, (Zhao & Seibert, 2006) with many different traits being conceptualised and tested against samples of entrepreneurs and nascent entrepreneurs mostly aimed at distinguishing them from managers. The most prominent traits in literature are the following:

Internal Locus of Control:

The locus of control describes to which extent an individual ascribes his success/failure to either himself or things outside of his control. Individuals with an internal locus of control believe that they have the ability to influence events in their lives (Rotter, 1966) and are expected to be attracted to entrepreneurship because it gives them better control over their working lives. The internal locus of control has been studied repeatedly and is positively connected to entrepreneurial behavior (Rauch & Frese, 2007).

Need for Indepedence:

Entrepreneurs find it hard to work within set rules and boundaries (Cromie, 2000), they exhibit a high need for independence. The concept is closely related to the internal locus of control and its importance as one of the main reasons for entrepreneurship has been supported (Rauch & Frese, 2000). Need for Achievement:

Need for achievement describes an individual’s achievement motivation. People with a high need for achievement stride to improve and take responsibility for their actions (Brockhaus & Horwitz, 1986). It was made popular by McLelland in 1961 who made the case that if a country’s individual’s achievement motivation could be increased,it would enjoy increased economic development (Chell, et al., 1991). Indeed this trait has enjoyed high popularity and researchers have shown that it is prevalent amongst practicing entrepreneurs (Vandor, 2007).

Risk-taking propensity:

Taking and managing risks is strongly tied to entrepreneurship and hence, an entrepreneur’s willingness to take those risks is a well-studied trait with many empirical studies finding positive influences of higher risk-taking propensity on entrepreneurial activity (Vandor, 2007).

Innovativeness:

Innovation is an integral part of entrepreneurship, driving competition and causing “creative destruction”. It is unsurprising that innovativeness as a trait has been studied by scholars. It is a well-researched characteristic that “ incorporates dimensions such as creativity, sensation-seeking and the capability to turn inventions into commercial value. ” (Vandor, 2007, p. 13).

As mentioned earlier, this list is by no means exhaustive, it is merely a selection of the most prominent traits. In fact, Rauch and Frese (Rauch & Frese, 2007) list more than 50 different traits describing the entrepreneur. Due to this multitude of concepts tested and the heterogeneity of definitions of the entrepreneur, the approach produced inconsistent results and received a lot of criticism. Zhao and Seibert aggregated different concepts into one, the five factor model of personality (also called the “Big Five”), in their meta-analytical review. They found that entrepreneurs scored higher on Conscientiousness, Openness to Experience whilst scoring lower on Neuroticism and Agreeableness than managers did. (Zhao & Seibert, 2006) In their analysis, considerable heterogeneity existed for all personality variables except Agreeableness which lead them to propose better differentiating the types of ventures entrepreneurs engage in to improve the model’s predictive power (Zhao & Seibert, 2006).

2.3 Personality Traits of the Social Entrepreneur

There is a natural interest in the person of the social entrepreneur as there is in the entrepreneur. Just as research on social entrepreneurship is younger than its traditional counterpart, so is research on the personality of its protagonist with literature being scarce (Mair & Noboa, 2006).

It is very surprising that, especially in the light of the field of psychology being the second largest contributor to entrepreneurship research, contributed only eight articles on social entrepreneurship in this domain - none of them featured in psychology journals (Short, et al., 2009). Investigations on the personality of social entrepreneurs mainly focused on qualitative studies and resulted in the development of new personality constructs, specific to the social setting (Mair & Marti, 2006).

The result are descriptions of the social entrepreneur ranging from “creative individuals with a ‘powerful new, system-change idea’” (Drayton, 2002, p. 123) to having a low self-focus and appreciating others strengths (Ratiu, et al., 2014), with traits such as passion, ethical fibre, leadership skills, creativity, “entrepreneurial quality” and many others used to paint a picture of the exemplified social entrepreneur.

While it is mostly agreed that all entrepreneurs generally share the same core traits such as Risk-taking propensity, innovativeness, need for achievement, need for independence, proactiveness (Ernst, 2012) self-efficacy, social support (Mair & Noboa, 2006), what distinguishes the social entrepreneur from his traditional counterpart according to Mair and Noboa are empathy and a strong moral judgement, or similarly to that, what Ernst describes as a “prosocial personality” consistent of empathy and a sense of social responsibility (Ernst, 2012).

Empathy:

Empathy is "the ability to put oneself in another's shoes" (Ernst, 2012, p. 59). Mair and Noboa define it as the ability to intellectually recognize and share the emotions or feelings of others. They state that a person who feels empathic will develop the desire to help and avoid somebody else's suffering. Not everybody who experiences empathy is a social entrepreneur, so they conclude that it is a necessary, but not sufficient condition (Mair & Noboa, 2006).

Sense of social responsibility:

Sense of social responsibility describes a sense of obligation to assist those in distress. This aspect shows itself when studying volunteers and seems to be an inherent assumption when studying the social entrepreneur with Bornstein et al underlining the selflessness of social entrepreneurs (Bornstein, 2004) and Drayton highlighting their "ethical fibre" (Drayton, 2002).

The application of quantitative methods (the median sample size in social entrepreneurship research is five (Short, et al., 2009)) and the use of well tested trait concepts are conspicuous by their absence in the young field of research on the personality of the social entrepreneur. The Five Factor Model of Personality has found little application with Nga and Shamuganathan’s study the influence of personality traits and demographic factors on social entrepreneurship start up intentions (Nga & Shamuganathan, 2010) being the sole exception. Even though a general similarity between social and traditional entrepreneur is assumed, Smith et al.’s quantitative analysis of the differences between social and traditional entrepreneur seems to be the only attempt to directly compare the two groups up to now (Smith, et al., 2014). While Nga and Shamuganathan found that Conscientiousness, Openness to Experience and Agreeableness positively influence social entrepreneurship, Smith et al. found evidence that social entrepreneurs exhibit higher levels of “Need for Autonomy/Independence”, “Moderate/Calculated Risk Taking” and “Creativity/Innovativeness” than traditional entrepreneurs (Smith, et al., 2014).

In light of the interest in differences between social and traditional entrepreneurs, the lack of quantitative studies comparing the two groups is surprising. With the questions posed in this thesis and the subsequent study designed to answer them, the author aims to contribute towards filling this gap by comparing traditional, social and non-entrepreneurs by means of the “Big Five” in a quantitative study.

3 Study

3.1 Aim of the Study

This study aims to contribute to the field of social entrepreneurship research by analyzing the personality of the social entrepreneur and comparing it to the traditional entrepreneur directly, shedding light on the possible differences between the two.

The study is done in an explorative manner, creating a sample of active and nascent traditional and social entrepreneurs and analyzing them with a broad personality trait construct, the Five Factor Model of Personality. To the best of the author’s knowledge this study is the first to directly compare the two groups using the Five-Factor-Model and the first to apply it to a sample other than students, with the only other application of the construct being applied to a group of Malaysian students by Nga and Shamuganathan (Nga & Shamuganathan, 2010). The ”Big Five” construct was chosen because it has been validated and applied in entrepreneurship research and many other contexts (Rauch, 2014) and a multitude of inventories have already been developed and tested for it. This widespread application of the FFM allows results to better be compared to other studies in and outside of entrepreneurship research.

3.2 Independent Variables

As mentioned earlier the independent variables are based on the Five Factor Model of Personality, developed by Costa & McCrae (Costa & McCrae, 1992).The construct consists of five key traits, which, together give a comprehensive picture of a person’s personality. These five key traits are¹:

Neuroticism (NEURO):

Neuroticism represents differences in emotional stability and adjustment. A person high on neuroticism tends to experience a number of negative emotions such as anxiety, hostility, depression, self-consciousness etc. while people with low neuroticism can be described as self-confident, calm, even tempered and relaxed (Costa & McCrae, 1992).

Extraversion (EXTRA):

Extraversion describes the extent to which individuals are assertive, dominant, energetic, active, talkative and enthusiastic. People high on Extraversion tend to be cheerful and sociable while those scoring low tend to be characterized as reserved, quiet and independent (Costa & McCrae, 1992).

Openness to Experience (OPEN):

Openness to Experience is characterized by individuals who are intellectually curious and tend to seek new experiences. People scoring high are generally creative, innovative, imaginative, reflective and untraditional while those scoring low are conventional, narrow in interests and unanalytical (McCrae, 1987). Agreeableness (AGREE):

Agreeableness describes one’s interpersonal orientation. Individuals scoring high have a preference for positive interpersonal relationships and have cooperative values while those scoring low can be characterized as manipulative, selfcentered, suspicious and ruthless (Costa & McCrae, 1992).

Conscientiousness (CONSC):

Conscientiousness describes an individual’s degree of organization, persistence, hard work and motivation in the pursuit of goal accomplishments (Barrick & Mount, 1991).

Zhao & Seibert have shown that the Five Factor Model as a broad trait construct remains with significant predictive power. As mentioned in 2.2, according to their meta-analytical review, entrepreneurs exhibit higher levels of Openness to Experience and Conscientiousness while exhibiting lower levels of Neuroticism and Agreeableness than managers. They suggest that distinguishing between different types of entrepreneurs could considerably improve predictive power (Zhao & Seibert, 2006). In social entrepreneurship literature on the other hand, Nga & Shamuganathan tested the influence of the “Big Five” on different aspects of social entrepreneurship. They found that Agreeableness, Openness to Experience and Conscientiousness exert a positive influence on social entrepreneurship dimensions (Nga & Shamuganathan, 2010).

A number of questionnaires have been developed to test for the “Big Five”. The one used in this study is the BFI-10, consisting of ten items. It was developed and validated in German as well as English by Rammstedt & John (Rammstedt & John, 2007). It is the shortest tool for measuring the “Big Five”, developed for applications outside of psychology, usually characterised by very limited assessment-time. They describe it as an “[…] extremely economical instrument for the reliable and valid capturing of the Big Five personality dimensions […]” (Rammstedt, et al., 2013, p. 244). Each of the five traits corresponds to two items in the questionnaire, one phrased positively and the other one negatively.

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Figure 1 - Questionnaire BFI-10

3.3 Dependent Variables

In order to distinguish between traditional, social and non-entrepreneur the participant’s actual behaviour as well as their entrepreneurial intent are measured for traditional as well as social entrepreneurial activities. Entrepreneurial intent is commonly used in entrepreneurship research and is understood as a “mental state that causally precedes behaviour and that can be elicited through questionnaires and interviews” (Manski, 1990). The strength of this causality is not undisputed but there is preliminary empirical evidence suggesting that entrepreneurial intent is a good indicator for new venture creation (Gird & Bagraim, 2008).

Actual behaviour is measured by how many organisations participants have founded in the past and how many of them primarily had a social or environmental purpose.

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Figure 2 - Questionnaire Entrepreneurial Behavior

Entrepreneurial intent is measured by their assessment of the likelihood of founding a company within the next 2 years and the likelihood of said enterprise to primarily have a social or environmental purpose.

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Figure 3 - Questionnaire Intent Foundation

3.5 Method

In order to apply quantitative methods, a sufficiently sized sample (N≥100) containing a high number of social entrepreneurs and people with high social entrepreneurial intent had to be created. The study was designed and created by the Wirtschaftsuniversität Wien’s Institute for Entrepreneurship and Innovation and expanded to fit the needs of this thesis, which was possible due to a big overlap in the targeted sample. It was executed by the author, and funded by the aforementioned Institute of Entrepreneurship and Innovation, which was conducting a study on the influence of intercultural experiences on opportunity recognition. Participants must have gathered at least six months of work experience and must have lived abroad for at least six months in order to be allowed to partake in the study. The specific nature of the sample made it necessary to compensate participants with 10-15 € each for their 45-60 minutes of time spent. Two co-working spaces in Vienna were chosen for the sourcing of participants. First, the Impact Hub Vienna, which is focused on social entrepreneurship. Second, Sektor 5, a space that is focused on tech-start-ups. Participants were contacted on-site and asked to refer further participants.

The study itself consisted of three questions participants were told to work on individually with a time limit, this was followed by an interview on how they went about answering the first part as well as a questionnaire. The first two parts are not relevant for the purpose of this thesis. It should however be noted that half of the participants were primed to think of their stay abroad while the other half was primed to think of Vienna. This should, however, not influence the answers given in the parts of the study relevant for this thesis. As mentioned in 3.2, the BFI-10 scale was used to measure participant’s personality (Rammstedt, et al., 2013).

Participants were split into three distinct groups in the analysis of the data-set created. First, the social entrepreneurially oriented, consisting of people who have founded a social enterprise in the past or have strong intentions to do so. Second, their conventional counterparts, and third, those without any entrepreneurial experience and intent. These three groups will be compared, looking into the question if and how their personality compositions differ. Clustering participants with high intent and those that actually engaged in entrepreneurial behaviour is possible because the same traits lead to the attraction to entrepreneurship as an occupational form as they lead one to be a successful entrepreneur (Zhao, et al., 2010).

4 Results

4.1 Descriptive Results

The sample consists of 102 completed questionnaires, of which 101 were usable for the purpose of this study. As shown in figure 4, there is no significant difference between the number of male and female respondents in the sample. The average age of respondents is 28,9 years old (with the median being 27) and more than 70 percent of them have graduated from university. The average respondent also gathered more than 7,4 years of work experience (median being 6 years) with internships and part-time jobs being included in their responses.

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Table 1 - Descriptive Results I Demographics

Due to the selection criteria, participants are highly internationally mobile, with the median time spent living abroad being 60 months.

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Table 2 - Descriptive Results II Months abroad

Taking a closer look at the entrepreneurial activity of the sample in figure 6, we see that more than 50% of respondents already founded at least one company, with more than 25% of the sample having founded two or more organisations already and 25% having founded one or more organisation with a social purpose primarily. Additionally, nearly 40% of the sample is actively engaged in one of the companies they created at the time of the survey.

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Table 3 - Descriptive Results III Entrepreneurial activity

Figure 7 shows us that, interestingly, with 38 out of 54, most of the founders in the sample consider it as more likely than not that they will found a new company within the next two years, surprisingly even the ones who are actively engaged in one of the companies they founded. Figure 7 also shows us that the majority of people who have not yet founded a company do not possess a high intent to do so.

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Table 4 - Descriptive Results IV Intent Foundation

From figure 7 we can also see that the respondents with high entrepreneurial intentions are mostly aiming to engage in a venture with a social purpose, with more than 70% perceiving this as the more probable option (> 50% likelihood). It is also interesting to see that more than half of the participants with low intentions would, if they founded a company, choose to aim for a social purpose with their (unlikely) venture.

To sum things up, one can state that the sample is highly entrepreneurial with 107 organisations founded in the past, of which 47 are socially oriented and more than half of the sample having high intentions to become entrepreneurially active in the near future and more than 70% of those aiming to follow a social mission/goal. The sample contains such a high number of social entrepreneurs due to the sampling in the Impact Hub Vienna, a co-working space and support organisation for social entrepreneurs in Vienna with about half of the participants being members of said co-working space (47,5 %). The other participants are either in or close to the Austrian start-up scene since they were approached in another coworking space and referred by participants of the study.

4.2 Effects of Personality Traits

As shown in the descriptive results, the sample contains individuals who are highly entrepreneurially active with more than half of them planning to follow social goals with their potential venture. This allows us to investigate the first question of this thesis: “What is the influence of personality on the decision to (potentially) become a social entrepreneur?”.

In order to answer this question, linear regressions were carried out, with the likelihood of participants to found a (social) venture in the next two years as its dependent variable and the big five personality constructs as the independent variables.

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Table 5 - Linear Regression Intent Foundation

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Table 6 - Linear Regression Intent social Foundation

The influence of personality variables alone are shown in figure 8 and 9, explaining 14,8% of responses for entrepreneurial intent and 9,1% for social entrepreneurial intent.

The only personality variable exerting significant influence on the intention for business foundation, be it social or traditional is Openness to Experience, albeit in the expected way. This is interesting because, as mentioned in chapter 2.2. Entrepreneurs were found to score lower on Neuroticism and Agreeableness and higher on Conscientiousness and Openness to Experience by Zhao and Seibert (Zhao & Seibert, 2006).

Nga and Shamuganathan (Nga & Shamuganathan, 2010) suggest that Agreeableness, Openness to Experience and Conscientiousness positively influence the different facets of social entrepreneurship. Yet, as with traditional entrepreneurship, except for one, none of expected effects are visible in this analysis. The fact that, except for Openness to Experience, these trait constructs do not significantly influence entrepreneurial intent could be explained by the nature of the sample which consists of internationally mobile people, who have been shown to exhibit personality traits similar to those of entrepreneurs by Vandor (Vandor, 2007).

With regards to questions one and two of this thesis, it can be said that openness to experience does influence the intent to found an organization with a social purpose and that it is influenced by the same personality variable as traditional entrepreneurship.

4.3 Comparison of Personality Compositions

Means average comparisons were carried out to answer the third question posed by the thesis, aiming to compare the traditional entrepreneurs, entrepreneurs and non-entrepreneurs in the sample. Participants were clustered into three distinct groups.

Social Entrepreneurs:

Participants who founded a social venture in the past and those who have a high intention to do so in the future were classified as social entrepreneurs. Participants who founded a social venture in the past but plan on founding a traditional organization within the next two years do not belong to this group, since they were regarded as “dropping out of social entrepreneurship”. Traditional Entrepreneurs:

The same principles apply to the classification as a traditional entrepreneur. Participants who founded traditional organizations in the past only and those who plan on doing so with a probability higher than 50% (and lower than 50% for it having a social purpose) are considered traditional entrepreneurs. Participants who founded traditional organizations and have a strong intention to found a social organization are considered social entrepreneurs.

Non-Entrepreneurs:

Those who not yet founded any organizations and do not have strong intentions to do so.

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Table 7 - Means Comparison Non-Entrepreneurs and Entrepreneurs

As we can see from figure 10 entrepreneurs and non-entrepreneurs differ significantly with respects to their mean level of Openness to each other. This goes to support the results from the regression analysis carried out earlier.

More interestingly, figure 11 shows us that, within the group of entrepreneurs, social entrepreneurs exhibit significantly higher levels of Openness to Experience than traditional entrepreneurs do.

As Openness to Experience includes, amongst others, traits such as creativity, innovation, readiness to change and tolerance for ambiguity (Zhao & Seibert, 2006) these results indicate that, even though internationally mobile people and entrepreneurs share similar trait compositions, entrepreneurs are more innovative and creative. Furthermore, the results depicted in figure 11 indicate that amongst entrepreneurs, the socially oriented are even more creative and innovative than the traditional entrepreneurs are. This notion is supported by Smith et al (Smith, et al., 2014) who found that social entrepreneurs score higher on “Creativity and Innovativeness” in the GET test. Hence, the answer to the third question of this thesis is that, compared to traditional entrepreneurs, social entrepreneurs exhibit significantly higher levels of Openness to Experience.

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Table 8 - Means Comparison Social and Traditional Entrepreneurs

5 Discussion

5.1 Discussion

In previous chapters we discussed the personality of entrepreneurs and social entrepreneurs and what the potential differences between them are. According to the work of Nga and Shamuganathan (Nga & Shamuganathan, 2010), Agreeableness, Openness to Experience and Conscientiousness positively influence social entrepreneurship. Additionally, Ernst (Ernst, 2012) highlights empathy and sense of social responsibility as traits setting the social entrepreneur apart. These two traits would be represented by a higher level of Agreeableness in the five factor model of personality, in line with the abovementioned study. Yet, this study shows that, when looking at an internationally mobile sample, Openness to Experience is the only variable that has a statistically significant influence on (social) entrepreneurial intent and the only variable that proves to be significant in a means comparison.

Firstly, this shows us that internationally mobile people are very close to entrepreneurial individuals in their personality composition with barely any of the effects present when comparing entrepreneurs to mangers showing. This has some interesting implications for practice. On the one hand, entrepreneurship education could be enhanced by increasing the number of students experiencing international mobility (assuming that personality is shaped by experience). On the other hand, policy makers could potentially increase entrepreneurial activity by attracting migrant entrepreneurs or by encouraging return migration. (Vandor, 2007).

Second, non-entrepreneurs differ from entrepreneurs in Openness to Experience. An explanation for this could be that entrepreneurs are higher on innovativeness and creativity (both part of Agreeableness (Zhao & Seibert, 2006)) than internationally mobile people because the implementation of an idea and the management of its subsequent growth into a company require a higher degree of innovativeness than mobility does (Vandor, 2007).

Third, the statistically significant difference between the means of Openness to Experience when comparing traditional and social entrepreneurs suggest a similar explanation. This seemingly confirms the result of the study by Smith et al. which showed that social entrepreneurs score higher on “Creativity and Innovativeness” on the GET test than their traditional counterparts. Social entrepreneurs also scored higher on “Moderate/Calculated Risk Taking” in their study (Smith, et al., 2014) which, with help of theories of career choice, person- environment fit and work performance, lets us draw the conclusion that the environment the socially oriented entrepreneurs work in requires them to be innovative and weary of the risks they take. Even more so than their traditional counterparts.

With social entrepreneurship being a fairly unconventional career choice, the untraditional nature of an individual scoring high on Openness to Experience might make him more likely to choose this occupation. This would suggest that, by making social entrepreneurship a more conventional occupational choice, practitioners could increase the entrepreneurial potential pursuing social goals.

Fourth, it poses the question as to why there is no statistically significant difference for Agreeableness between the two types of entrepreneurs. One possible explanation could be the fact that, while high levels of Agreeableness indicate higher levels of altruism and caring (Zhao & Seibert, 2006), it also inhibits one’s ability to drive hard bargains and look out for oneself, or rather, one’s social venture. These two effects could cancel each other out and leave Agreeableness without any statistically significant effect but surprisingly, Nga and Shamuganathan found no negative influence of Agreeableness on any of their social entrepreneurship variables (including financial return) (Nga & Shamuganathan, 2010). This leads me to conclude that, even though their level of Agreeableness might manifest in different forms, their overall level does not differ.

5.2 Limitations and further Research

The first noteworthy limitation of this study is based on the sampling criteria. The sample created consists of internationally mobile people only and is therefore not representative of the general, social entrepreneurial or traditional entrepreneurial population. While there is evidence for a strong similarity between internationally mobile people and entrepreneurs (Vandor, 2007) and it is generally agreed that social and traditional entrepreneurs share the same basic traits (Ernst, 2012), no comparison between social entrepreneurs and the internationally mobile exists up to now. This bias in the sample could potentially cancel out otherwise significant differences in the personality compositions of social and traditional entrepreneurs.

Second, even though it is an entrepreneurially active and mature sample, the size of it (N=101) might not be sufficient to uncover more subtle differences. This limitation is reinforced by the application of the BFI-10, the most economic, yet not the most accurate, tool for measuring the “Big Five”.

The results of this study pose some interesting questions for further research. As Smith et al. point out and this study seemingly confirms, social entrepreneurs exhibit higher levels of “Creativity and Innovativeness”. They went as far as to state that “ social entrepreneurs are inherently more entrepreneurial in academically conventional terms than their traditional counterparts ” (Smith, et al., 2014, p. 216). This could be due to social entrepreneurs arguably working within tighter parameters than their traditional counterparts or them balancing the interests of multiple groups of stakeholders (Smith, et al., 2014). Investigating the reasons for the need to be more entrepreneurial when pursuing social goals could prove invaluable for policy makers.

The fact that social entrepreneurs did not score higher on Agreeableness is surprising since altruism and caring are part of this construct and literature describes traits very close to these as the outstanding features of the social entrepreneur (see chapter 2.3). This could hint at different values for social and traditional entrepreneurs on the facets of Agreeableness. A study using a tool measuring all of said facets of the “Big-Five”, such as the NEO-PI-R (Costa & McCrae, 1992), could shed light on this potential difference.

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7 Figures

Figure 1 - Questionnaire BFI-10

Figure 2 - Questionnaire Entrepreneurial Behavior

Figure 3 - Questionnaire Intent Foundation

8 Tables

Table 1 - Descriptive Results I Demographics

Table 2 - Descriptive Results II Months abroad

Table 3 - Descriptive Results III Entrepreneurial activity

Table 4 - Descriptive Results IV Intent Foundation

Table 5 - Linear Regression Intent Foundation

Table 6 - Linear Regression Intent social Foundation

Table 7 - Means Comparison Non-Entrepreneurs and Entrepreneurs

Table 8 - Means Comparison Social and Traditional Entrepreneurs

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¹ See Zhao & Seiber for a detailed description (Zhao & Seibert, 2006)