ABSTRACT
This
seminar study is aimed at determining the personal characteristic influencing
performance and success of the entrepreneurs. The paper surveyed empirical
literature to identity the contributions of entrepreneurs the development of
the society. The study was looked at the followings classification of the
entrepreneurs/functions of entrepreneurs in business organization and
entrepreneurs in business organization and entrepreneurship and business
failure. The paper therefore summarized and recommended that conducive
environment, provision of loan facilities, good infrastructural development and
so on should be provided with entrepreneurs for effective and efficient performance.
CHAPTER ONE
1.0 INTRODUCTION
The overview of personal
characteristics influencing performance and success of the entrepreneur cannot
be over emphasis without reflecting our mind toward the concept of personal
characteristics. Personal refers to individual then characteristics refer to
attitude or behavior toward an issues or some thing. Therefore personal
characteristics is viewed according to McClelland as the qualities exhibit by
an individual such as technical competence, risk taking, High initiative, good
judgment, intelligence to analyze and solve problem areas, leadership
qualities, confidence, positive attitude, high level of energy, creativeness,
honesty, integrity, emotional stability and fairness. All these qualities
mentioned above define the personal characteristics and this however,
influences the performance and success of the entrepreneur.
Meanwhile, entrepreneur is a person
who sees opportunities where others can not; he is a visionary, a problem
solver, a creative genius, an innovator, wealth generator, an inventor, one who
produces jobs for others. According to Hisrich and Peters (1989) defines
entrepreneur as process of creating something different with value by devoting
the necessary time and effort by assuming the accompanying financial social,
psychological mental, spiritual, risks; and receiving the resulting rewards of
monetary and personal gratification.
Therefore, a personal characteristic
helps in either promoting or demoting the performance and success of the entrepreneur
in any business sector. In this seminar work we emphasized on the following
outline as the frame work thus; Success characteristics of individual
entrepreneur, classifications of entrepreneur, personal characteristics
influencing performance of entrepreneur; personal characteristics
influencing success of entrepreneur. Problems of an entrepreneur.
1.1 FUNCTION
OF THE ENTREPRENEUR
1. He provides the capital required for
investment.
2. He does the management. In a sole
proprietorship It is easy to see this business function but in large scale
business units e.g limited companies, he delegates this functions to paid
manager who coordinate the various activities.
3. He
often engages in speculation and by doing that avoids serious loss of profits
or sales.
4. He
does the planning. In doing so, he decides on what is to be produced what type
of productive unit to be adopted, how to produce the goods, where to site the
industry or firm and when to market the goods. This function is very important
because his profitability depends to a large extent on the decisions he takes.
5. He may
diversity activities so that losses in one area are paid off by gains in
others.
1.2 FUNCTIONS OF ENTREPRENEUR IN A BUSINESS
ORGANIZATION
According to D Kaiz and R. Kahn in the social
psychology of organization 2nd edition (New York) 1987 the following
four reasons were advanced.
Firstly incompleteness of organization design since
there is no perfect or ideal organization designed to take care of every member is activities at all times,
entrepreneurship is necessary to coordinate and direct behaviour toward goal
accomplishment.
Secondly, changing environmental conditions:
entrepreneurial leadership functions to maintain the stability of an
organization in a turbulent environments by allowing for rapid adjustment and
adaptation to changing environmental condition.
Thirdly internal Dynamics of organization
entrepreneurship leadership is very important as it can assist in the
coordination of activities in the various organization units. It can also act
as a buffer between conflicting parties.
Fourthly, Nature of Human membership in Organization:
there are different interest groups in the organization with different needs.
Entrepreneurship can play a major role in maintaining need satisfaction and
personal goal attainment
1.3 ENTREPRENEURSHIP
AND BUSINESS FAILURE
All over the world businesses are
failing every day. Recently in the USA, long established world businesses like
WORLDCOM, ENRON and the giant accounting firm, Anderson coorper and many others
like parmalat failed. In Nigeria, young and old enterprises of small, medium
and large scale dimensions fail per second. It is for example a business maxim
that 80% of small medium business registered at the Nigerian corporate affairs
commission fail and die in their first five years. Failure encompasses both
public sector (Nigeria airways Nigeria Railways, NITEL etc) and private sector
corporations such as CONCORD Newspapers, concord Airlines, Orient airlines,
Igbinedion Airlines, Kabo Airlines and so many others.
CAUSES OF BUSINESS FAILURE
There are many known and established causes of
business failure and success. In the Banking sector for example, the CAMEL test
has been applied to banks for centuries “C: refers to cash flow, ‘A” to
adequacy of Funds, ‘M” to suitability and appropriateness of management
structures, “E” to Efficiency and Effectiveness and ‘L” to Liquidity. At any
point in the life of a bank where Customers cannot withdraw their deposits that
bank shall be declared as Distressed”, Bankrupt” or “failed”.
Indeed, such tests apply to all known businesses the
world over as when a company can no longer supply its goods and services to its
own customers on demand, then there must be a death cast on the line some
where.
1.4 SUCCESS
CHARACTERISTIC OF INDIVIDUAL
ENTREPRENEUR
An entrepreneur should have the
first hand knowledge of the product, processes and end uses to bring inventive
abilities and sound judgment of the planned project. Flexibility, good social
behaviour, open mind and desire to take personal responsibilities will fill in
the qualities of a true entrepreneur.
The complimentary characteristics
that are necessary for success of an enterprise are:
1. Long
term involvement: The commitment from the entrepreneur for longer period
may be 5 to 10 years is necessary for conceptualization, building and running
an enterprise over night operator will not fit in building an enterprise.
2. Initiative: An entrepreneur must have
initiative to use the available resources and draw plan of action for all those
who are involved in an enterprise.
3. Goal setting: An entrepreneur must be
able to set realistic but challenging goals for him as well as for others in
the organization.
4. Takes risk: An entrepreneur is a
learner from his failures and risk at every stage of the growth of an
enterprise.
5. High energy level: Managing resources
and running an enterprise call for long hour of work for longer period of time
so an entrepreneur is a man of high energy level.
6. Problem solver: In the initial stage of
an enterprise, many problems do occur and an entrepreneur is a creative problem
solver to turn difficulties into advantages.
7. Team Boulder and Motivator: He builds
up team, educates them, keeps high level of motivation and also provide an
environment for creative and focused to work culture.
8. Mental Ability and Clarity in Objectives:
He is a man of high level of intelligence, creative, positive thinking and
decision maker with clear objective in mind.
9. Communication Skills: As a leader an
entrepreneur communicates effectively with all concerned such as financials,
employees, customers, suppliers and all who are concerned with the enterprise.
10. Good Human Relation: tactful and warm
human relation is an important factor which brings success to entrepreneur.
CHAPTER TWO
2.0 Personal characteristics influencing
success of the Entrepreneur
(a) Existence of a good business opportunity:
The objective of an entrepreneur is to make profit. Profit however can not be
made unless there exist a good business opportunity which the entrepreneur has
seen and want to exploit.
Part of the quality of good entrepreneur is the
ability to visualize a good business opportunity when others do not see it.
(b) Effective Communication: Is the process of exchanging information between one
person and the other or between one person and a group or between an enterprise
and the third parties or customers. Inside the enterprise, there is the need to
communicate with the workers so that management function will be accomplished.
Communication provide link between people in an organization. He should know
the hints to good human relation: He should address his workers by name; smile
at people; be warm to people; show interest to people and their problems; act
like a member of a team; be humble.
(c) Motivation: It is an important personal
characteristic to be possessed by an entrepreneur, since he works with
subordinates and therefore should know how to motivate them. Since motivation
is a process of inducing people to work willingly. In the literature people
have isolated money as a key motivator, but there are motivations such as: Good
working environment, appreciation for work well done job security, promotion on
time.
(d) Good Human Relation: Possession of
good human relation is one of the personal characteristic influencing
performance of the entrepreneur. Since entrepreneur is the factor that
organizes other factors of production; land is a non human factor of
production. So also is capital, but labour is a human factor of production. It
is the ability to manage this human factor of production that leads to
excellent business performance. Possessions of good human relations skill
ensures that the entrepreneur gets along well with the following:
The
employees, business associates, customers, supplies and government.
(e) Creativity: Here is defined as the
ability to process and arrange information that leads to new knowledge. The new
knowledge will now be deployed to invent new product, modify existing products
or provide better service to customers. Creative people are innovative people,
they have a lot of characteristics; they generate new idea in a short time;
they are motivated by challenges;
They convert problems to opportunities; they believe
in themselves; they value their mental independence; they experiment with new
ideas.
f. Another personal factor influencing
performance of an entrepreneur is technical competence. Technical
competence ordinarily refers to the ability of the entrepreneur to understand
the business in question and also posses the relevant knowledge and skills to
engage in the business e.g a photographer must understand the handling of
cameras, film and even film processing. A doctor that engaged in medical
services must know how to treat common sickness. Like malaria or else if he
fails repeatedly to do this, patients will desert his clinic. A hairdresser
that lacks the ability to do hairstyles will sooner or later lose valuable
customer which means that the first thing to do by entrepreneur is to have
skill of the business he wants to start up that is technical competence.
g. High mental ability: It refers to the capacity to
understand. It enabled the entrepreneur to think and develop strategies that
will lead to success in a highly competitive environment. They ability to think
enlarges entrepreneur vision and assist to generate ideas on how to see the
competition from a larger view. High mental ability enables the entrepreneur to
anticipate the move of the competitors in advance and then take necessary steps
to protect his business from invasion by competitors.
2.1 PERSONAL CHARACTERISTICS INFLUENCING
PERFORMANCE
OF THE
ENTREPRENEUR
The feature or qualities of an entrepreneur as an
individual are essential to influence performance of the entrepreneur.
McClelland stated the personal qualities or characteristics of a successful
entrepreneur as:
Technical competence: An entrepreneur before starting up a business must be
well trained in that field for him to be able to organize his business well and
also supervise his workers effectively. If he does not have the required skill
on the business in quote, he will be acting on ignorance unless he employs
another competent person to manage the business for him.
High level of energy: An entrepreneur should be a hard working person
knowing fully well that the business is his own and that the success and
failure is in his hand; If he is a lazy type, his workers will look up to him
and take their work for granted which will have serious effect on the business.
Team Builder and Motivator: An entrepreneur builds up his team and be friendly
with his workers and not to fill too big and neglect the services of his
employee which will go a long way to demoralize them. He should with his skill
educate his worker and motivate them materially and morally to increase
productivity.
Good human relation: He should be able to relate well with all those involved in the
production and distribution channel knowing fully well that an injury to one
customer is always an injury to many and that he has a lot of competitors that
will like to take advantage of his misbehavior or mismanagement.
He should know the difference between business money
and personal money and try not to be spending his business money without
appropriate record as it will seriously affect the business
2.2 Classifications
of Entrepreneurship
In the early phases of economic development
entrepreneurs will have initiative to start ventures and find innovative way to
start an enterprise. (Badi and Badi 2005), noted the following classifications
of entrepreneur.
a. Innovation Entrepreneur: He finds out
new products, and techniques and new market. The enterprising spirit in
innovative entrepreneur enables him to open new market and develop enterprise.
b. The imitative entrepreneur: The
imitative entrepreneur copy or adopt suitable innovations made by the
innovation entrepreneur. He brings industries to the poorer countries.
c. The Fabian entrepreneur: These
entrepreneurs by nature are shy and lazy. They follow set procedures, customs,
traditions and religious. The Fabian entrepreneur does not venture to take
risks.
d. Drone entrepreneur: He refuses to copy
or use opportunities that comes on his way. They are conventional in their
approach and stick to their set practices products, production method and
ideas; so the organization looses market and may be pushed out of the market.
CHAPTER THREE
3.0 SUMMARY
3.1 CONCLUSION/SUMMARY
Entrepreneurship is the willingness and ability of an
individual to seek out investment opportunities in an environment and be able
to established and run an enterprise successfully based on the identifiable
opportunities.
Entrepreneurship is a term used
broadly in connection with the innovative modern industrial business leader.
Personal characteristics that can influence the performance and success of the
entrepreneur is traced to the concept of personal characteristics. Personal
characteristics help is either promoting or demoting the performance and
success of the entrepreneur in any business sector. Also, personal
characteristics that can inference the success of the entrepreneur include
existence of a good business opportunity, Communication, motivation, good human
relation and creativity.
3.2 RECOMMENDATIONS
Based
on this seminar study I recommend that:
1. Conductive environment: Entrepreneurs
can effectively perform in the conducive environment unlike un-conducive
environment. That is to say good working environment should be provided with
the entrepreneurs by the management.
2. Provision
of loan facilities with low interest rate loan with low interest rate will
encourage the entrepreneurs to obtain credit facilities from commercial banks
for the purpose of business expansion.
3. Good
infrastructural development:
Government should provide good infrastructural
facilities such as good road, power supply clean water supply etc with
entrepreneurs for effective and efficient performance.
4. Embark
on specialized business
Entrepreneurs should go into the businesses they have
good knowledge for the purpose of acquiring higher productivity.
5. Regular
seminars/workshops
Regular seminars/workshops should be organized for the
entrepreneurs to enable them know the dos and don’ts of business rules and
regulations.
Problems of youth entrepreneurship
development in Nigeria
Onwubiko (2008) noted that
irrespective of the benefits associated with entrepreneurship, there are a lot
of barriers that have prevented youth from fully realizing their potentials and
assuming leadership position in the society:
1. Inadequate working
capital: the availability of capital is central to the establishment and
continued existence of any enterprise irrespective of the size, focus and
objective. It is known that for an entrepreneur to start up a business, he must
have adequate fund. In a situation where the working capital is inadequate or
unavailable, it becomes a problem.
2. Lack of adequate training: the absence
of adequate training for students on a particular skill to enable them meet the
future challenges of as leaders of business and change agents is another
problem that affect development of entrepreneur since it have been observed
that the educational curriculum in Nigeria focuses more on the theoretical
without a corresponding practical approach.
3. Low standard of education: the fact
that education is the key to knowledge and that it plays a strong role in
forming burgeoning entrepreneur. The word today is a global village and an
entrepreneur must be in tune with event around and about him.
4. Absence of infrastructural facilities:
it is a universal believe that certain infrastructural facilities aid the
development of the mind and body and assist productivity in any environment.
The facilities are good road, good water supply, and constant power, access to
information and communication technology.
5. Lack
of adequate security:
The inadequate security of lives and property and the
helplessness fostered on the citizens by the police that has most often than
not proved incapable of addressing the security challenges over the years.
6. Other
Economic, social and political factor:
Economic factors such as policy reversals, high and
double taxations, difficulty in procuring business approval, high inflation and
instable exchange rates are some of the areas of concern for the potential
entrepreneur.