The Effects Of Entrepreneurial Characteristics On Business Performance
THE EFFECT OF ENTREPRENEURIAL CHARACTERISTICS ON BUSINESS PERFORMANCE IN NIGERIA
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The Concept of Entrepreneurship
Throughout the theoretical history of entrepreneurship, scholars and researchers from multiple disciplines such as anthropology (steward, 1991), psychology (shaver and Scott, 1991), sociology (Reynolds, 1991), economic (Kirchhoff, 1991), management (Stevenson, 1985), and technology (Roberts, 1991), and (Litvak and Maule, 1999) cited in tonge (2002) have grappled with a diverse set of interpretations and definitions to conceptualize this abstract idea. A further search of the literature also reveals that researchers have been inconsistent in their definition of entrepreneurship. There are a minimum of a hundred definitions to explain the concept of entrepreneur and entrepreneurship. Their meanings depend on when they were devised and on the society in which the various researchers developed them (Di – masi, 1999). In the last century, many writers have identified entrepreneurship with the function of uncertainty and risk bearing and others with the coordination of productive resources, the introduction of innovation and the provision of technical know – how (Hoselitz, 1952) cited in Izurnet, (2000). During the sixteen century, people who organized and managed military and exploration expeditions in France were called”Entreprendre”. The word entrepreneur originates from the French verb “Entreprendre” and the German word “unternehmen” both of which means to undertake (Afonja, 1999). In the oxford dictionary, an entrepreneur is defined as one who organizes, manages and assumes the risks of a business enterprise.
The early 18 century French economist Richard cantillon (Circa, 1755) introduced the term entrepreneurship. In his writings, he formally defines entrepreneur as the agent who buys means of production at certain prices in other to combine them into a new product. He further defines entrepreneurship as self employment of any sort where the entrepreneur is the bearer of the uncertainty and risk. Shortly there after, the French economist jean Baptist sayed (1824) defines the entrepreneur as someone who shift economic resources out of an area of lower to an area of high productivity and greater yield. He added to cantillon definition by including the idea that an entrepreneur is one who brings other people together in order to build a single productive organization. But says definition, according to peter Drucker (1985), does not tell us who the entrepreneur is. And since they coined the term almost two hundred years ago, there have been lack of consensus over the definition of entrepreneur and entrepreneurship. In the 19th century, British economist such as Adam smith, David Ricardo and john Stuart mill defined the concept of entrepreneurship under the broad English term of business management (Burnett, 2000). However, schum peter (1947) argues that whereas the writing of smith and Ricardo suggest that the lively undervalued the import ants of entrepreneurship, mill actually stresses its significance for economic development and growth. He further claims that entrepreneurship requires “no ordinary skills” and laments the fact that there is no good English language equivalent wants to encompass the specific meaning of the French term entrepreneur. The necessity of entrepreneurship for production was also recognized by Alfred Marshall in 1890 when he asserted in his treatise of principle of economics that there are four factors of production i.e. land, labor, capital and organization. Entrepreneurship, both technical and commercial, is the driving element behind organization. He further argue that the skills associated particularly with technical entrepreneurship are rare and limited in supply and that the ability of entrepreneurs are so great and so numerous that very few people that exhibit them all in a very high degree. Another research carry out by Penrose (2006) posit that entrepreneurship, particularly technical entrepreneurial activity, involves identifying opportunities within the economics system, filling market deficiency through input – completing activities including the process of identifying, developing and bringing a vision to life. This vision may an innovative idea, an opportunity or a better way of doing something. The end result of this process is the creation of a new venture the expansion of an existing one carried out under condition of risks and considerable uncertainty (Meyer et.al, 1976). Therefore, in recognition of the considerable risk and uncertainty with entrepreneurship, Afonja (1999) made a clear distinction between technical entrepreneurship and commercial enterprenuship. The former involves product manufacture or the provision of technical service while the letter involves trading, buying and selling or provision of non – technical services. The prerequisites for success and risk factors involved differ significantly for the two types of entrepreneurship.
Therefore, the focus of this study is on the effect of technical entrepreneurial characteristics on the performance of small industry manufacturing operators in the food, textiles, and wood processing and fabricated metal products all of which are generally important in the industrialization of a developing economy such as Nigeria.
2.3 The Characteristic of an Entrepreneurship
Personality attributes have been studied extensively and a wide range of tests has been developed to identify and even measure them. Such testing, termed “psychometric testing” has become common place and is now standard part of the interview process with many enterprises. The psychometric testing revealed many varying characteristics from an entrepreneur to another. Any attempt to describe entrepreneur characteristics against only one dimension would be inadequate. To give a holistic view, the characteristics of entrepreneur as reported by scholars and researchers of different disciplines are discussed below (Egbe, 2006).
2.3.1 Need for Achievement
McClelland work on the need for achievement identified psychological characteristics present in entrepreneurs. He specified three attributes from his overall theory of need for achievement as characteristics of entrepreneur (a) individual responsibility for solving problems, settings goals and reaching these goals through their own efforts. (b) Moderate risk taking as a function of skill, not chance; and (c) knowledge of result of decision task accomplishment. Since he is result oriented means that he must always set clear and meseaurable goals. A result and action oriented entrepreneur must also, therefore, be goal oriented. He set goals that are high, challenging and difficult but realistic and attainable. After setting the goals and objectives, he then he determined to know the result of his efforts in achievement the set targets. Bearing in mind the goals set, he persists even in the face of adversity and difficulty to achieve these goals. He is preservers, determine and persistent to ensure that his objectives are met. (Obodoechi, 2007). The entrepreneur should define the goal he set for him self in terms of resources, time frame and measurement .for instance , for an entrepreneur to say, `I want to make a profit` this goal is not define in terms of resources, timeframe and not measurable as such. Making profit in any business I a relative term, that involve ambiguity. An entrepreneur should set a goal like this, `I want to make a profit of N10 million, at the end of financial year.