1042-2587

C 2015 Baylor University

V

Some Further Thoughts

on the Entrepreneurial
Personality
Angelo S. DeNisi

This article seeks to extend the discussion begun by Danny Miller (2015) in his editorial
entitled, “A Downside to Entrepreneurial Personality?”

R ecently, Miller (2015) wrote a paper discussing the dark side of the entrepreneur-
ial personality. In it, he correctly noted that many of the personality traits that are often
associated with entrepreneurship can, when taken to the extreme, have negative conse-
quences. For example, he notes that the positive characteristics of self-efficacy and self-
assurance can, in the extreme, become narcissism and hubris. He concludes with a call for
future research to focus on “the possible downsides of the entrepreneurial personality, if
only to distinguish those entrepreneurs who contribute to our economic and social well-
being from those whose contributions are negated by the harm they cause” (p. 5).
Of course, we do not know if individuals high on any of these traits will actually cause
harm, but, in any case, Miller’s (2015) arguments are quite reasonable. Nonetheless, his
paper also raises some additional issues that might also deserve attention and have the
potential for taking Miller’s contribution a bit further. Specifically, the present discussion
will focus on three issues for further consideration. The first is concerned with Miller’s
(2015) analysis of “downsides” of entrepreneurial personality as being Janus-faced, and
the general nature of personality. A second issue relates to which personality variables
have been studied relative to entrepreneurs, and what others offer some promise. A third
and final issue deals with how the broader studies of personality can contribute to the liter-
ature on entrepreneurship. Before discussing any of these issues, however, it is worth not-
ing that the term “entrepreneurial” is itself somewhat vague because it is used in many
contexts other than to refer to someone who starts a new business. Therefore, it is impor-
tant to first establish that I am focusing on those individuals who start a business venture
in this discussion.
Let us begin with the Janus-faced analysis. Miller (2015) suggests that the personality
types he discusses (such as optimism and self-efficacy) become problematic when they are
taken to extremes, and so these characteristics represent the Janus face of the entrepreneur-
ial personality. This is likely to be true but, elsewhere, this type of situation is discussed as
an inverted U-shaped relationship that we find with many potential predictors of success
or failure. One of the earliest discussions of this is the research that yielded what is known

Please send correspondence to: Angelo S. DeNisi, tel.: 504-865-5414; e-mail: adenisi@tulane.edu.

September, 2015 997

DOI: 10.1111/etap.12168
as the Yerkes Dodson Law (Yerkes & Dodson, 1908). This research empirically mapped
the relationship between arousal performance, and the law dictates that performance
increases with physiological or mental arousal, but only up to a point. When levels of
arousal become too high, performance decreases. The process is often illustrated graphi-
cally as a curvilinear, inverted U-shaped curve which increases and then decreases with
higher levels of arousal. Thus, Miller’s discussion of dark-side personality types, may sim-
ply be an example of the wider ranged phenomenon of the “inverted U.” Furthermore,
Baron and his associates have been especially effective at demonstrating this inverted U
relationship relative to entrepreneurs and positive affect (Baron, Hmieleski, & Henry,
2012) and optimism (Hmieleski & Baron, 2009), while other related recent research has
noted the same relationship regarding hubris and leader effectiveness (Grijalva, Harms,
Newman, Gaddis, & Fraley, 2015). I will return to this discussion later in differentiating
research on entrepreneurship and entrepreneurial success.
Miller’s (2015) labeling of the dark-side personality variables also raises issues about
the general nature of personality. Dealing with personality types is always about dealing
with labels to some degree, and these labels can themselves be confusing, and so we must
be careful about those labels. For example, terms such as social deviance, and obsessive
behavior border on descriptions of psychotic behavior which may not be what Miller has
in mind (cf. American Psychiatric Association, 2013). Labels such as hubris and narcis-
sism are less problematic since these generally refer to individuals who do not require
professional help, but may simply not be the most pleasant people to be around.
The next issue relates to additional personality traits which may deserve further atten-
tion in the future. One trait he does mention is need for achievement (NAch) (McClelland,
1961), and Miller (2015) suggests that this trait has been linked to entrepreneurship. It is
interesting to note, however, that although McClelland (1961) discusses the role of NAch
in the pursuit of entrepreneurial professions, his definition of entrepreneurial professions
is quite arbitrary and very broad, and illustrates the issue raised at the outset of this article
(McClelland, 1965). In any event, NAch is about a drive to be successful, and persons
who are high in NAch prefer situations where they have some control over outcomes and
where the probability of success is about .50. Therefore, the notion that persons high in
NAch should be more likely to start new businesses when the 5- and 10-year survival rates
are well below 50%, would seem counterintuitive. The broad definition that McClelland
uses for entrepreneurial professions may explain some of the apparent inconsistency, but
is more likely that NAch alone is not sufficient to predict who will pursue an entrepre-
neurial career. In fact, McClelland (1987) reported that successful entrepreneurs in three
countries tended to be high on proactivity, commitment to others, and achievement orien-
tation. Furthermore, as noted by Miller, there is also research to suggest that entrepreneurs
tend to be high on such traits as self-efficacy (e.g., Markman, Balkin, & Baron, 2002),
self-esteem (e.g., Arora, Haynie, & Laurence, 2011), among others. Thus, it is unlikely
that any one personality variable alone will explain either entrepreneurial behavior or
success.
In fact, while Miller (2015) focused on these particular traits because they were all
examples of traits where a person scoring “too high” on the trait could be a problem, there
are many other personality traits that have received attention in the literature. For exam-
ple, Zhao, Seibert, and Lumpkin (2010) conducted a meta-analysis of the relationship
between the Big Five personality dimensions (e.g., Barrick & Mount, 1991) and entrepre-
neurship. The five personality dimensions are conscientiousness, introversion/extraver-
sion, openness to experience, agreeableness, and neuroticism, although Zhao et al. added
a potential fifth dimension—risk propensity. They found all except agreeableness were
related to both intentions to become an entrepreneur and entrepreneurial performance,

998 ENTREPRENEURSHIP THEORY and PRACTICE

although the effects of introversion/extraversion were small. They also reported that risk
propensity was related to entrepreneurial intention but not to performance.
Also, Hmieleski and Baron (2008b) examine the role of regulatory focus on entre-
preneurial performance. Regulatory focus (Higgins, 1987, 1998), stated simply, sug-
gests that people seek to maximize positive outcomes in life (hardly a unique
perspective) but that there are two ways of doing this, and therefore two types of peo-
ple. Persons who have a “promotion focus” achieve overall positive outcomes by seek-
ing and attaining positive goals and experiences and focusing on aspirations.
Conversely, persons with a “prevention focus” tend to achieve overall positive out-
comes by avoiding negative experiences and focusing on responsibilities, obligations,
and safety and outcomes. Studies have found regulatory focus to be important for a
range of behaviors including consumer choice (Higgins, 2002) and reactions to feed-
back (Kluger & DeNisi, 1996), and Hmieleski and Baron examined its role relative to
entrepreneurial performance. They reported that entrepreneurs’ promotion focus was
positively related to performance, while prevention focus was negatively related to per-
formance in a dynamic environment. They found no relationships between the two
types in stable environments.
Both of these personality types deserve further research as well, but the variety of
personality traits that have been found to be related to entrepreneurial behavior sug-
gests that, as noted above, rather than any one personality trait, it is likely that there is
a constellation of traits that together predict entrepreneurial behavior (e.g., Arora et al.,
2011). Core self-evaluations (CSE) (Judge, Locke, & Durham, 1997) is one such
broad, integrative trait that may be useful in this regard. High CSE is indicated by high
self-esteem, internal locus of control, high generalized self-efficacy, and low neuroti-
cism (i.e., high emotional stability). While only a decade old, research on CSE sug-
gests that it explains much of the overlap among these trait measures, while also
predicting many work and other applied outcomes better than the individual traits.
Individuals with high levels of CSE perform better on their jobs, are more successful
in their careers, are more satisfied with their jobs and lives, report lower levels of stress
and conflict, cope more effectively with setbacks, and better capitalize on advantages
and opportunities (e.g., Judge & Bono, 2001).
Finally, it is important to note that Baron and Markman (2003), among others,
have argued that social skills may be even more important than personality traits in
predicting entrepreneurial success. They suggest that skills such as the ability to per-
suade others’ the ability to read others’ emotions, and the ability to adapt to different
situations may actually be more important for entrepreneurial success (also see Baum
& Locke, 2004). It may be that the presence of some of these social skills might ameli-
orate some of the negative aspects of certain personality types. Furthermore, as indi-
cated in a number of the studies reviewed, it is likely that other environmental factors
interact with personality to determine outcomes, and so future research might well con-
centrate on such interactions.
The final issue deals with the question of dependent variables. The meta-analysis by
Zhao et al. (2010) clearly distinguishes between entrepreneurial intentions and entrepre-
neurial performance. They argue that both outcomes are important because the process
must begin with someone’s intention to become an entrepreneur, and, while this is cer-
tainly true, there may be some differences in how important is research relating personal-
ity variables to these two outcomes. Of course, as management scholars we are interested
in understanding phenomena related to all aspects of management, and so an interest in
the role of personality in all aspects of entrepreneurship seems quite reasonable. But, in
other fields of management, such as human resource management, personality has been

September, 2015 999

studied as a potential predictor of success in order to inform selection decisions made by
organizations. That is, researchers seek to identify personality traits such that individuals
who possess more of such a trait would be more likely to be successful at some specific
job so that organizations can select applicants who are higher on those traits. For example,
based on research, an organization may want to select applicants who are higher on extra-
version when hiring insurance agents, all other factors equal.
But, whereas some of the research in this area has focused on predictions of perform-
ance and success, we do not generally hire entrepreneurs and we do not select entrepre-
neurs, so any information about the relationship between entrepreneurial behavior or
intentions and personality will not be useful in the same way. Clearly, studies that exam-
ine the relationship between personality and entrepreneurial success have a great deal of
practical importance and are similar to studies in other areas involving predictions of suc-
cess. But what is the practical usefulness of studying the role of personality in the choice
of pursuing an entrepreneurial career? For example, stating that entrepreneurs have
“unusually elevated needs for achievement, autonomy, and power” (Miller, 2015, p. 2),
simply informs us that persons possessing these traits are more likely to become entrepre-
neurs. We do not know if they are more likely to be successful as entrepreneurs or even
more likely to be satisfied as entrepreneurs.
In fact, when we compare studies of who is likely to engage in entrepreneurial activity
versus studies of who will be successful as an entrepreneur, we find some interesting
things. First, as noted by Zhao et al. (2010), different performance measures yield differ-
ent results, so that we must first determine the best way to operationalize entrepreneurial
performance from among the many that are available. For example, McClelland’s (1987)
study involved entrepreneurs in Malawi, India, and Ecuador, and the measure of success
was a judgment by a panel of experts, rather than some more objective measure. Several
other studies (Hmieleski & Baron, 2008a, 2008b, 2009) used both revenue and employ-
ment growth over time, while Lowe and Zeodonis (2006) measured success according to
how long it took for a company to be taken over and how much it was purchased for. The
definition of entrepreneurial success is interesting in light of Miller’s (2015) suggestion
that many of our most famous entrepreneurs such as Andrew Carnegie and John D. Rock-
efeller were quite ruthless (which they certainly were). But, were they considered suc-
cessful? The answer is almost certainly “yes,” using most measures of success.
Furthermore, one could argue that the country as a whole is better off because of their
entrepreneurial activity; but perhaps different measures of success would lead to different
conclusions.
Although Zhao et al. (2010) found that four of the Big Five predicted both entrepre-
neurial intention and performance, they also reported that risk propensity was related to
intentions but not to performance. Hmieleski and Baron (2009) reported a negative rela-
tionship between an entrepreneur’s optimism and the success of new ventures measured
by revenue growth, even though Miller (2015) includes optimism as an important trait for
entrepreneurs. But, Hmieleski and Baron (2009) provide an interesting explanation for
their findings. They suggest that they found this relationship because the entrepreneurs in
their sample were already at the high end of optimism for the population. Therefore, the
entrepreneurs who were higher in optimism might actually have been too optimistic, and
so divorced from reality that their ventures were less likely to succeed. These results
would suggest the possibility that optimism is positively related to the choice to become
an entrepreneur but negatively related to entrepreneurial success. Likewise, Hayward,
Shepherd, and Griffin (2006) argued that hubris is what leads individuals to start new
businesses in the face of high failure rates, but this same hubris also increases the likeli-
hood that they will ultimately fail. These findings make it clear that we must be careful to

1000 ENTREPRENEURSHIP THEORY and PRACTICE

separate entrepreneurial intentions and behavior from performance and success. Studying
determinants of entrepreneurial intentions may be important from an academic perspec-
tive and to help us understand the entire process of entrepreneurial growth, but it would
seem that the success or failure of those entrepreneurial efforts (regardless of how this is
defined) is a far more important and useful dependent variable.
Thus, we might extend Miller’s (2015) observations to suggest the possibility that
many of the same traits that lead people to become entrepreneurs, when taken to
extremes, can lead to their failure. That is, a person high on optimism may be more
likely to become an entrepreneur, but a person too high on optimism may be more
likely to fail. Therefore, rather than discuss the “dark-side” of these traits, it may make
more sense to think about “excessively high levels” of these traits as being predictors
of failure. This argument could be made for the various personality traits discussed by
Miller, as well as for constellations of traits such as core self-evaluations. Relying
upon the logic of all inverted U relationships (e.g., Grant & Schwartz, 2011), persons
too low on these traits will never venture out to become entrepreneurs but persons too
high will try and fail. There is an optimum level where the person will try, and be
likely to succeed.
In addition, as noted above, there are probably a number of other contextual varia-
bles that can contribute to the probability of success, and there are also other personal
characteristics such as motivation. Are these factor more (or less) important than per-
sonality traits, or do they somehow interact with personality to allow us to predict suc-
cess with more accuracy? For example, if these factors are positive (i.e., favor the
success of the new venture) can they compensate for extremely high levels of traits
such as optimism, or do they simply serve to move the inflection point for the
inverted-U relationship? Conversely, if these factors are negative (i.e., work against the
success of the new venture) can they overwhelm the positive effects of any of these
personality traits, do they exacerbate the negative effects of high levels or, again, do
they simply move the inflection point so that success requires higher (or lower) levels
of the trait in question?
These are all questions that future research might address. Miller’s (2015) paper
raises a number of interesting points about the role of personality traits in the formation
and success of entrepreneurial enterprises, but it also points toward other areas of
research. Hopefully, by extending and elaborating upon some of Miller’s points, the pres-
ent paper can help push research on personality and entrepreneurship a bit further by sug-
gesting some of those specific directions for future research.

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Angelo S. DeNisi is the Albert Cohen Chair in Business Administration at A.B. Freeman School of
Business, Tulane University.

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