Going Beyond Individual Differences: Exploring the Impact of Social Networks, Work Environment and Cross-Cultural Differences on Entrepreneurial Achievement

In academia and business, entrepreneurship has received considerable interest given its allure of autonomy, innovation and ability to produce considerable amounts of wealth and value (Hisrich, Langan-Fox & Grant, 2007). In essence, the start-up is the new ‘garage rock band’ with its promises of fame and fortune. Yet, this analogy is sobered by the fact that the majority of start-ups fail to grow and become sustainable businesses (Shane, 2008). In light of this, the question of which entrepreneurial ventures do go on to achieve success and grow, and in what contexts, becomes of primary interest. Given that entrepreneurship is a key driver of economic, technological and social progress, understanding the antecedents of entrepreneurial achievement has important theoretical and practical implications (Kuratko, 2007). Psychologists have conducted much research into the role of individual differences in the attainment of entrepreneurial achievements (e.g. organisational growth, innovation & value creation), alongside situational theorists who have identified the various ways in which contextual factors aid achievement. There remains however a significant lack of research that has attempted to integrate the two approaches. It is argued that doing so will extend both academic and practitioner understanding of how entrepreneurial talent is expressed, developed, and produces achievement. Using an interactionist approach (Tett & Burnett, 2003), this thesis sets forth the hypothesis that although an individual’s entrepreneurial talent is important, its relationship with achievement is influenced by relevant contextual factors that are expressed at the micro, meso and macro levels of the environment. Appreciating the wealth of situational entrepreneurship research, the current thesis explores this hypothesis across multiple levels of analysis. Particular attention is paid to the influences of social capital, organisational culture, and cross-cultural differences between developing economies. This thesis begins with a review of the psychological and contextual determinants of entrepreneurial achievement, and outlines key gaps in the literature. Based on this, a series of hypotheses were proposed that sought to explain how contextual factors influence the relationship between individual differences and entrepreneurial achievement. Together, this served as the theoretical foundation for subsequent empirical chapters. The first empirical chapter of this thesis integrated both personality and social capital theory (Burt, 2004), by using social network analysis to demonstrate the influence of social capital as a moderator in the relationship between personality traits and achievement. These results not only demonstrated the indirect effect individual differences holds with achievement, via social and relational factors, it also integrated two distinct research methodologies: psychometrics and social network analysis. There is much research that has explored what constitutes an organisation’s culture to be creative or innovative (Anderson, Potocnik & Zhou, 2014), yet, this is not the case when discussing entrepreneurship. Accordingly, the second empirical chapter describes the development and validation of such a psychometric measure. In particular, this measure assesses the extent to which an organisation’s culture supports and encourages entrepreneurial activity and achievement. This measure consists of four dimensions: Leadership Style, Employee Values, Empowerment & Team Behaviour. This Entrepreneurial Culture Inventory was found to hold concurrent and incremental validity in the prediction of entrepreneurial achievement, self-efficacy work engagement and employee’s intention to quit their jobs. Furthermore, it was found to positively moderate the relationship between entrepreneurial talent and achievement. These findings address a lack of understanding in how organisations can encourage entrepreneurial practices and achievements amongst their employees. The final empirical chapter sought to explore the stability of the entrepreneurial talent and achievement relationship across emerging market economies, and also whether differences in gender, socioeconomic and financial factors (e.g. macro contextual influences) mediated this relationship. Collecting data from a sample of over 18,000 microfinance loan applicants, across seven emerging market economies, a multi-group structural equation model revealed that the relationship between entrepreneurial talent and achievement is stable across a variety of countries. These analyses also found no gender differences in entrepreneurial talent between male and female entrepreneurs. In fact, it was found that the reason for gender differences in achievement is the result of external factors, namely, the type of business ventures males and females pursue, and the amount of funding each gender receives. These results demonstrated macro contextual factors to have a significant impact on achievement, irrespective of an individual’s level of entrepreneurial talent. These findings have implications for leaders and organisations that are responsible for growing a nation’s economy and promoting gender equality. Reviewing the discussed literature, and the results presented within each chapter, this thesis has successfully extended individual difference theories of entrepreneurship by integrating contextual factors. Specifically, the impact of context on this relationship was empirically demonstrated across micro, meso and macro levels of analysis. This suggests that although individual differences are important antecedents of entrepreneurial achievement, context plays a significant role in activating and enabling an individual’s entrepreneurial talent. More so, this research was carried out using a mixture of research methodologies and techniques, some of which are new to the study of individual differences and entrepreneurship. Together, it can be concluded that this thesis has addressed key gaps in current understanding, and contributed towards a growing body of psychological research. Recommendations for future research and practice are discussed.