Psychological and organizational factors in successful entrepreneurship: a small sample survey

Abstract

This study on 16 small industry entrepreneurs (9 successful + 7 unsuccessful) focused on identifying some personal background attitudinal, organizational and managerial variables that discriminate the successful group from the unsuccessful group. Success in entrepreneurship was identified through the records of a financing agency and were later confirmed at the end of the interviews that success was associated with survival of the enterprise and profit making and thereby repayment of loans. Of the background variables studied no clear patterns emerged differentiating the successful from the unsuccessful on age, education, urban exposure, father s education, and type of industry. There was a trend towards more successful entrepreneurs coming from families with business background and starting the industry during a period of industrial activity. An examination of career decision information given by the entrepreneurs was found to support the propositions made by Rao (1974). However, the sequential stages in the development of the entrepreneurs did not emerge clearly. The two groups did not differ significantly on attitudinal dimensions like internal locus of control, adoption propensity, attitude to workers, interpersonal trust, consultation in decision making and compromise of value system, although trends in certain directions were observed. In terms of their organizational characteristics, successful entrepreneurs were found to score better on operations management, production function and finance function. They also showed tendencies to score better on several other organizational dimensions. More research in these directions with well defined criteria of success are likely to help identify potential entrepreneurs and design entrepreneurial development programmes.