Entrepreneurship: Comparing Theories and Entrepreneur's Personality

This report presents a comprehensive analysis of entrepreneurship by comparing established economic and psychological theories with the personality traits of a real-world entrepreneur, David Wilson, who runs a successful coffee shop in Sydney. The report begins with an overview of economic theories, emphasizing risk-taking, and psychological theories, focusing on achievement and innovation. It then delves into a detailed case study of David Wilson, highlighting his innovative thinking, resilience, and strong sense of control, aligning these traits with the theoretical frameworks. The analysis explores how Wilson's actions, such as his environmentally friendly café and his ability to adapt to challenges, reflect key entrepreneurial characteristics. The report also discusses the entrepreneur's capacity to influence external situations through social media and corporate social responsibility. The conclusion summarizes the interplay between theory and practice, underscoring the importance of risk-taking, perseverance, and the need for achievement in entrepreneurial success. The report provides recommendations for aspiring entrepreneurs to enhance their success.

Running head: ENTPRENEURSHIP
Entrepreneurship
Name of the Student
Name of the University
Author Note

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Executive Summary
Entrepreneurship is a diverse and dynamic activity that requires a person to be bold, adventurous,
innovative and driven in nature. All entrepreneurs around the world are known to have one trait
in common and that is the desire and the need to achieve and to be successful in whatever it is
that they do. Entrepreneurship as such is a unique activity, which not all people are capable of,
but only those who have the drive and the will to meet the challenges that accompany this
activity. This assignment compares the personality traits of an entrepreneur who was interviewed
for this assignment, with the economic and psychological theories of entrepreneurship. The
report concludes with a number of effective recommendations for better entrepreneurship.

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Table of Contents
Introduction......................................................................................................................................3
1. Economic and Psychological Theories of Entrepreneurship – A Brief Overview...................4
1.1. Economic Theories of Entrepreneurship...........................................................................4
1.2. Psychological Theories of Entrepreneurship....................................................................4
2. Comparing the Personality Traits of the Entrepreneur who was interviewed with Economic
and Psychological Theories of Entrepreneurship............................................................................5
Conclusions and Recommendations................................................................................................8
References......................................................................................................................................10
Appendix........................................................................................................................................12

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Introduction
Entrepreneurship refers to the process by which a new business, usually a small business,
is designed, launched and operated. It is often described as the willingness and capacity to
organize, develop and manage business ventures along with the risks that accompany such a
business venture for the purpose of making profit (Kuratoko 2016). Most definitions of
entrepreneurship are known to focus on launching and running business operations, but a broader
definition of the same is at times utilized in the domain of scholarship, particularly in fields of
study such as economic theory. The entrepreneur in the economic sense of the term is an
individual who has the capacity of locating and acting upon opportunities and resources for
translating technologies and inventions into services and products (Mckenny et al. 2017). This
assignment prepares a report that compares entrepreneurship theory with the personality traits of
a specific individual entrepreneur who was interviewed in detail for this assignment. Some of the
theories of entrepreneurship that are made use of for the purpose of comparison and analysis are
the economic theories of entrepreneurship and the psychological theories of entrepreneurship,
both of which are discussed in detailed prior to being compared and analyzed with the
personality traits of the entrepreneur interviewed.

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1. Economic and Psychological Theories of Entrepreneurship – A Brief
Overview
1.1. Economic Theories of Entrepreneurship
The economic theories of entrepreneurship are those that portray entrepreneurs as risk
takers, with the most well-known exponent of such theory being Richard Cantillon. It was
Cantillon who was the first scholar of economic theory and entrepreneurship theory in particular
to point out the risk taking capacity and willingness of entrepreneurs. According to the classical
and neo-classical schools of economic thought, entrepreneurship as a process is one that focuses
on prevailing economic conditions as well as the opportunities that are created by such economic
conditions (Horst, S.O. and Murschetz, P.C., 2019). However, the unique nature of
entrepreneurship is something that is largely ignored by the economic theories as are the
dynamic and diverse contexts and situations in which entrepreneurs are created (Burchardt et al.
2016).
1.2. Psychological Theories of Entrepreneurship
The psychological theories of entrepreneurship tend to focus on the emotional and mental
elements that drive individuals who are entrepreneurs. According to David McClelland, a
professor of psychology at Harvard University, what primarily drives the activity of an
entrepreneur is an overwhelming need for achievement. According to psychologist Julian Rotter,
entrepreneurs possess a strong sense of control and are capable greatly of influencing external
situations. According to psychological theories of entrepreneurship, the personality traits of an
entrepreneur are those that range from resilience and creativity to the optimism that drives
entrepreneurial behavior (Lortie, J. and Castogiovanni, G. 2015).

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2. Comparing the Personality Traits of the Entrepreneur who was
interviewed with Economic and Psychological Theories of
Entrepreneurship
The entrepreneur who was interviewed for this assignment is a person who runs a small but
thriving coffee shop on the outskirts of the city of Sydney. His name is David Wilson. He is
newly married and has two small children, who are twins and who are two years of age. David
Wilson agreed to being interviewed quite readily and was happy to answer to respond to the
questionnaire that was provided to him. From speaking to David and also from reading his
responses to the survey questionnaire given to him, it appears that it was the ability to think out
of the box and to innovate that got David to start a new coffee business in the location where the
business is currently set up at the moment. This was an area that lies in close proximity to
colleges and academic institutions and was frequented by young people but there appeared to be
no coffee shop or bistro in the area that would give them the opportunity to sit down and relax
and have a cup of coffee or two. It was David who came up with the idea that if he set up a
coffee business over here, it would have many takers and would do exceedingly well. And he
was not wrong about this. Today, though small in size, the coffee shop is a thriving one and it
attracts customers of all ages. David and his wife Emily set it up two years ago and are enjoying
their success. The ability of David to engage in innovative and out of the box thinking, is also
evident from the fact that the café is an environment friendly café, making use of solar lightning
and bamboo furniture and it is very well received by customers who have a concern for the
environment and who believe in preserving the natural environment through their day to day
activities. Such ability to engage in innovative and out of the box thinking on the part of
David the entrepreneur is one that coincides with the psychological theories of

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entrepreneurship which state that creativity or the capacity to be innovative is a major
personality trait of entrepreneurs (Venkatraman 2019).
From speaking to David and also from viewing his responses to the survey questionnaire it
became clear as to how resilient and determined David is as an individual. It appears that while
coffee shop is doing well today, it did not start off so well when it was initially launched about
two years ago. In the first few months of its operations, the coffee shop did not attract more than
three to four visitors in a day, in spite of the fact that David and his wife took care to serve
sumptuous and well-brewed coffee with cookies and snacks from nine in the morning to five in
the evening. The low visitor count in the first few months of the operation of this business caused
a lot of financial hardships for David, who had hired a few but dedicated employees to run the
coffee shop along with him and his wife, and who he found very difficult to remunerate and give
raises to, because of the low amount of business that was being generated by the business in the
initial days of its operation on the outskirts of the city of Sydney. The economic theories of
entrepreneurship point to the risk taking capacity and willingness of entrepreneurs while
the psychological theories of entrepreneurship state that what drives an entrepreneur to do
the work he does is the overwhelming need to achieve (Ramoglou, S. and Tsang, E.W., 2017).
Both are found to hold true when it comes to assessing the personality of David. David was
willing to take on financial risks in the early days of the business and was willing to withstand
financial hardship because he believed in the success of his new enterprise. He was determined
to see things through and was not bogged down by financial hardships and problems that he
experienced in the initial months of setting up the coffee enterprise. Also, the need to achieve
and see his coffee shop become a success is what motivated David to survive all odds and
continue to work in a way that his business finally became a success. Today his enterprise stands

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tall on the outskirts of the city of Sydney. While it is true that it is not a large establishment and it
is not capable of accommodating too many people in it at a time, it is still quite a thriving
destination and definitely has takers from customers of all ages.
According to psychological theories of entrepreneurship one of the key personality
traits of an entrepreneur is the strong sense of control that he has over his business
enterprise in addition to the quality of optimism which motivates him to keep going even
when times are rough (Burton et al. 2016). This is also something that is quite evident in the
personality of David as revealed through the questionnaire and through the discussion that was
had with him. David controls all aspects of his coffee shop business and does not leave anything
to anyone even his wife. While his wife Emily is constantly by his side, and works hard to make
sure that all aspects of running the business are well looked into, the primary job of running the
business is left to David. He is responsible for the handling and allocation of resources,
recruitment and selection process, and management of the inventory. He decides who is going to
hire, who is going to fire, where it is that he is going to buy the supplies of his coffee shop
business from, how much the budget of running business operations is going to be, everything.
He is in full control of his business operations and does not leave the running of his business to
anyone else. This does not mean that David does not trust the people who work for him. He is
seen to engage with his employees on a regular basis and enjoys a good working relationship
with them. He also takes care to run his enterprise in as legal and ethical a manner as possible in
order to keep his business from running into trouble with government authorities, specifically
with people who are in charge of income tax collection.
The capacity of an entrepreneur to influence external situations is also a key quality of
an entrepreneur as established by the psychological theories of entrepreneurship (Kreiser et

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al. 2019). David is an entrepreneur who happens to do just this. He makes regular use of social
media when advertising and promoting his business and participates in social events through his
business. Corporate social responsibility is something that is quite close to David’s heart. It is
seen from his responses that he believes in giving back to the society that he has received so
much from, and wants to play an active role in influencing external events like the elimination of
poverty and social ills like domestic violence through the running of his business. A part of the
money that David is able to raise through the running of his business is contributed to social
causes. This is one of the reasons why David is such a beloved personality in the locale where he
is running his business. He loves what he does and he makes it a point to give back as much as
possible, thus having an important role to play in influencing external situations or events in the
society in which he lives, and contributing to a better Australian society in the process.
Ruthlessness, perseverance and determination are the key qualities that have made David the
successful entrepreneur that he is today, over and above the willingness and the capacity to take
risks. All of these personalities and abilities are established by the economic and psychological
theories of entrepreneurship. All these theories point to such qualities and personality traits of
entrepreneurs and by speaking to David, by engaging with him on a one to one basis and by
looking at his responses to the questions asked, it is evident that ruthlessness, determination and
perseverance in addition to thinking out of the box and believing in himself, his business and his
employees have gotten David and his enterprise to the point where it is today.
Conclusions and Recommendations
In conclusion, it can be argued that the entrepreneur who was interviewed for this
assessment, David Wilson, is a successful entrepreneur, and that the economic and psychological

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theories of entrepreneurship apply very well to his personality and the manner by which he runs
his business. It is however recommended that the following considerations be made by David to
run his enterprise even better than what he is at the moment.
 David should expand his business slightly more given that it is so successful now. The
business should accommodate more guests that it is able to at present so that David can
make more profit as an entrepreneur (Campbell 2019).
 David should take less number of risks now and go with the flow as his business is doing
very well now and taking too many risks at this juncture can end up putting the business
in jeopardy which is not desirable. Risk taking is something that David should avoid as
an entrepreneur and should stick instead to what is staid, acceptable and conventional to
keep his running well enough (Rawhouser et al. 2019).

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References
Burchardt, J., Hommel, U., Kamuriwo, D.S. and Billitteri, C., 2016. Venture capital contracting
in theory and practice: implications for entrepreneurship research. Entrepreneurship Theory and
Practice, 40(1), pp.25-48.
Burton, M.D., Sørensen, J.B. and Dobrev, S.D., 2016. A careers perspective on
entrepreneurship. Entrepreneurship Theory and Practice, 40(2), pp.237-247.
Campbell, B., 2019. Practice Theory in Action: Empirical Studies of Interaction in Innovation
and Entrepreneurship. Routledge.
Horst, S.O. and Murschetz, P.C., 2019. Strategic Media Entrepreneurship: Theory development
and problematization. Journal of Media Management and Entrepreneurship (JMME), 1(1), pp.1-
26.
Kreiser, P.M., Kuratko, D.F., Covin, J.G., Ireland, R.D. and Hornsby, J.S., 2019. Corporate
entrepreneurship strategy: extending our knowledge boundaries through configuration
theory. Small Business Economics, pp.1-20.
Kuratko, D.F., 2016. Entrepreneurship: Theory, process, and practice. Cengage Learning.
Lortie, J. and Castogiovanni, G., 2015. The theory of planned behavior in entrepreneurship
research: what we know and future directions. International Entrepreneurship and Management
Journal, 11(4), pp.935-957

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McKenny, A.F., Allison, T.H., Ketchen Jr, D.J., Short, J.C. and Ireland, R.D., 2017. How should
crowdfunding research evolve? A survey of the entrepreneurship theory and practice editorial
board. Entrepreneurship Theory and Practice, 41(2), pp.291-304
Ramoglou, S. and Tsang, E.W., 2017. In defense of common sense in entrepreneurship theory:
Beyond philosophical extremities and linguistic abuses. Academy of Management Review, 42(4),
pp.736-744.
Rawhouser, H., Cummings, M. and Newbert, S.L., 2019. Social impact measurement: Current
approaches and future directions for social entrepreneurship research. Entrepreneurship Theory
and Practice, 43(1), pp.82-115.
Venkataraman, S., 2019. The distinctive domain of entrepreneurship research. In Seminal Ideas
for the Next Twenty-Five Years of Advances (pp. 5-20). Emerald Publishing Limited.