54 ENTREPRENEURSHIP
comes. Thus, while locus of control may differentiate people who believe in astrology
from those who do not, it may not make a distinction between potential entrepreneurs
and potential managers, or just plain business students.Risk-Taking Propensity. Are people with a risk-taking propensity high entrepreneur-
ial achievers? Because the task of new venture creation is apparently fraught with risk,
and the financing of these ventures is often called risk capital,researchers have tried to
determine whether entrepreneurs take more risks than other businesspeople. This hy-
pothesis has been tested in a number of ways, but the work by Brockhaus has been most
incisive.
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In Brockhaus’ research, the risk-taking propensities of entrepreneurs were tested
objectively via a series of decision scenarios. The results obtained from the entrepreneurs
were compared with those obtained from a sample of managers. The study concluded
that a risk-taking propensity is not a distinguishing characteristic of entrepreneurs.Dispositional Optimism. Dispositional optimism refers to generalized outcome
expectancies that good things, rather than bad things, will happen; pessimism refers to
the tendency to expect negative outcomes in the future.^52 Researchers have found that
entrepreneurs are much more optimistic than nonentrepreneurs and the population at
large.^53 This optimism may be the best distinguishing trait of the entrepreneur.
However, further research on the subject is necessary.Limits of the Trait Approach
Overall, the trait approach has not been successful at providing the decisive criteria for
distinguishing entrepreneurs from others. What distinguishes entrepreneurs from non-
entrepreneurs is that entrepreneurs start new businesses and others do not.
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One researcher described the search for the entrepreneurial trait this way: “My own
personal experience was that for 10 years we ran a research center in entrepreneurial his-
tory, for 10 years we tried to define the entrepreneur. We never succeeded. Each of us
had some notion of it—what he thought was, for his purposes, a useful definition. And
I don’t think you’re going to get farther than that.”^55
The trait approach looks inside the entrepreneur for an answer. What it frequently
ignores is that many of these traits are also present in excellent managers, football coach-
es, and health-care professionals. The traits do not tell us who will be a successful entre-
preneur, but they do hint at what qualities might be required for success at any endeav-
or. Traits are more useful when they are viewed as precursors to behaviors.
Entrepreneurship is not a psychological tendency; it is the act of starting a business.
Therefore, it would be better to look at someone’s skills and actions rather than his or
her personality traits.
In a recent anthology of the psychology of the entrepreneur, the authors presented a
structural equation model displaying the relationships between traits and behaviors on
venture growth (the numerical values represent the relative contribution to venture
growth holding the other values constant).^56 Their findings suggest the following direct
effects on venture growth:- All psychological traits (together) are related by +.06 to new venture growth.