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6.8. Differences Between an Entrepreneur and a Manager - The Psychology of Entrepreneurship

Lecture



The main differences between the entrepreneur and the manager according to their leading psychological qualities can be easily identified using the two-dimensional model of J.Ronen 43 , an illustration of which is shown in Fig.4. The model presents a continuum of decision making under uncertainty. At its lowest point (extremum) is a worker whose tasks are characterized by minimal uncertainty. At the other end is an innovative entrepreneur. Along the continuum, the most changing characteristic is novelty seeking. Another axis is the purposefulness (purposefulness) of the entrepreneur. Entrepreneurs and inventories occupied very close positions in the diagram. Sometimes these figures are represented in one person, but more often the inventory shows creativity, perseverance and perseverance in solving some of its innovative problems, and the entrepreneur in promoting it, in the practical realization of the discovery; he founds the case and, thus, brings the idea to the end. All this requires special activity and purposefulness of behavior.

As can be seen from fig. 8, both entrepreneurs and managers are characterized by a high purposefulness of activity, a developed achievement motive.

6.8.  Differences Between an Entrepreneur and a Manager - The Psychology of Entrepreneurship

Fig. 8. The two-dimensional model of entrepreneurship proposed by J. Ronen.

The differences between entrepreneurs and managers can be interpreted as follows: managers are more afraid of novelty, because their main goal is to preserve the organization, the team they manage, and the entrepreneurial activity that they undoubtedly manifest in many situations is aimed at campaign survival. The entrepreneur, on the contrary, is committed to change, development, risk. Over the life cycle, firms need both entrepreneurial activities.

The diagram becomes even closer to reality with the introduction by the author of such a parameter as risk taking (risk taking), which increases with an increase in the search for novelty and with an increase in purposefulness of activity.

The opinion that the entrepreneur is a kind of antithesis to the manager is consistent with the Ronen model, since the former works in an unstructured environment where rapid changes occur all the time. The second operates in an established management hierarchy, the laws of operation of which are comprehensively described in classical management.

According to literary data, the most striking differences in the psychological portraits of an entrepreneur and a manager concern leadership and the need for power. For example, H. Heckhausen 44 believes that both managers and entrepreneurs show marked leadership qualities, but the manager is the leader of the hierarchy, and the entrepreneur is the leader of ideas.

According to D. McCleland 45 , entrepreneurs who create firms rarely have leadership qualities, because they are dominated by the achievement motive, which is the “one man's game”, and it does not require the deep involvement of other people. Such an interpretation is consonant with the data of those authors who focus on the independence of the entrepreneur’s personality. For example, R. Hisrich identifies the desire for independence, freedom of action, creative work and creation of capital 46 as the leading motives of the entrepreneur. As can be seen from the table. 8, the manager has a different motivation.

Table 8 .

Comparison of personal and behavioral qualities of traditional managers, entrepreneurs and intrapreneurs

TRADITIONAL MANAGERS

ENTREPRENEURS

INTRAPRENERS

LEADING MOTIVES

The desire to get a promotion and have other signs of prestige in a corporation, such as your own office, staff, authority

The desire to have independence, freedom of action, work creatively, create capital

The desire for independence of action, the acquisition of positions in the corporation and the corresponding remuneration

PERSPECTIVE OF TIME PERSPECTIVE

Focus on short time horizons: weekly, monthly, quarterly and annual plans

Focusing on 5-10 year periods as milestones in growing your business

Orientation depends on the timing of the implementation of tasks in view of the timing of work in the corporation. Usually occupies a middle position between a "traditional manager" and an entrepreneur.

NATURE OF ACTIVITY

More delegates its powers to subordinates and controls the execution than directly involved in the case

Direct involvement in work

Doing more work himself than handing it over to someone

RISK TO RISK

Fearful

Reasonably taking risks

Reasonably taking risks

The end of the table. eight

RELATION TO STATUS

Concerned about symbols of their own status

No concern with status symbols.

Not concerned with traditional symbols of status in the corporation, only wants independence

ATTITUDE TO FAILURES AND ERRORS

Eager to avoid mistakes and surprises in general

Not afraid of mistakes, fixes them and overcomes failures.

He tries to hide risky projects from the environment until he is ready to substantiate them conclusively.

MAKING DECISIONS

Usually agrees with those above

Realizes his dream with his decisions.

Able to convince others to help in the realization of his dreams

TO WHOM SERVE

Serves others

Serves itself and the consumer

Serves itself, consumers and sponsors

CHARACTER OF A FAMILY FROM WHICH HAS STANDED

Older family members worked for large organizations.

From a family of small entrepreneurs, liberal trades or farmers

Same as entrepreneurs

RELATION TO OTHERS

Basically by the norms of hierarchical relations

Mostly business and contractual relationships

Based on an arrangement with a hierarchical structure

From the point of view of innovation management, an entrepreneur is a transformative leader in contrast to a leader of regulatory or administrative management.

Clear boundaries between entrepreneurs and managers sometimes do not exist. These two figures can be represented in one person in a small business. In addition, there is an intermediate figure - intraprener or “internal entrepreneur” - possessing the same complex of qualities (see Table 3), as an entrepreneur.

Test questions:

  1. What are the psychological prerequisites for the development of entrepreneurship?

  2. What is the hypothesis Schmelders?

  3. Give a description of the concept of "enterprise".

  4. What techniques are used in your organization to reduce the distance between the employer and the employee? Give examples.

  5. How do you understand paraenterprise?

  6. What are the differences in psychological portraits of an entrepreneur and a manager?

  7. To the typical portrait of which one is closer your portrait?


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Economic psychology

Terms: Economic psychology