Description
Within this brief paper related to a competency based model for the success of an entrepreneurial start up.
A competency-based model for the success of an entrepreneurial start-up
WEI-WEN WU
Department of International Trade,
Ta Hwa Institute of Technology,
1. Ta Hwa Road, Chiung-Lin, Hsin-Chu 30704
TAIWAN
[email protected]
Abstract: - Many people envy entrepreneurs and want to emulate them as a road to wealth, fame, and freedom.
A large number of works have argued about what makes a person act entrepreneurially, and various traits and
characteristics of entrepreneurs have been enthusiastically discussed. This study focuses on one particular
point: how to facilitate a person’s efforts to become a small firm entrepreneur through competency assessment
and development. To this end, this study proposes an entrepreneur competency model and employs the rough
set theory (RST) and the best attribute-value (BAV) to investigate whether there are diverse competencies
between small firm entrepreneurs and large firm managers. The results of this study indicate that the small
firm entrepreneur generally excels in “building a mechanism for talent development”, while a large firm
manager is good at “knowing the different urgency of elements of a problem” or “making feasible solutions
for actions”. Thus, if a large firm manager wants to emulate a small firm entrepreneur, the suggestion is to
de-emphasize methodical thinking and paper work, and to undertake more human networking.
Keywords: - entrepreneur; competency model; rough set theory; best attribute-value
1. Introduction
Successful entrepreneurs are important to the
development of society because they contribute to
the creation of employment opportunities, and to the
advance of economic growth. Entrepreneurs are
often regarded as marvelous people who are capable
of devising new ideas, evaluating opportunities and
risks, or starting and running a business. Numerous
works in the literature have paid considerable
attention to the particular features or traits that make
a person act entrepreneurially, and a long list of
crucial traits and characteristics has been discussed.
For example, [30] conduct a comparison of
determinants for business start-up in the U.S. and
Korea. [32] show forty-two characteristics
descriptive of the entrepreneur. Especially, [25]
highlight several entrepreneurial traits associated
with successful entrepreneurs, as follows: high need
for achievement [35][21][37][3], high need for
independence [8][4][24], locus of control [5][41],
moderate risk-taking [14][40][37][24], tolerance for
ambiguity [55][37], and innovation [56][15][37].
Additionally, [39] examine the relation between
entrepreneurial orientation and growth orientation.
[64] emphasize that corporate entrepreneurship
performs a unique role of resource capital
configuration. [53] argue that nascent entrepreneurs
are pushed toward entrepreneurial career due to low
job satisfaction in their pre-entrepreneurial
employment. [13] perform studies regarding a past,
present, and future perspective on data analysis
techniques and competencies in entrepreneurship.
As to the definition of an entrepreneur, there are
several valuable suggestions in the literature, such
as the following: an entrepreneur is a person who
creates a new business as a founder [19]; the
entrepreneur is the person who discovers a business
idea for a venture [28], and enables the idea to
become a new business [63]; and, on the negative
side, anyone who inherits or buys an existing
enterprise or manages a turnaround as an employee
is not an entrepreneur [10]. This study adopts the
notion that an entrepreneur is a person who creates a
new business as a founder and possesses a certain
ownership, and does not act merely as an employed
manager [19][10]. Furthermore, [10]note that
various schools of thought provide different but
useful insights, and describe six schools of thought
about entrepreneurship activity, including: (1) the
“Great Person” school which deems that
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS Wei-Wen Wu
ISSN: 1109-9526 279 Issue 6, Volume 6, June 2009
entrepreneurs are endowed with certain traits
differentiating them from others; (2) the
“Psychological Characteristics” school accentuates
personality factors (distinctive values and attitudes)
that make entrepreneurs unique; (3) the “Classical”
school focuses on innovation and creativity for
entrepreneurs; (4) the “Management” school
stresses the business capability of an entrepreneur;
(5) the “Leadership” school emphasizes the
effectiveness of leadership style for an entrepreneur;
and (6) the “Intrapreneurship” school encourages
entrepreneurship in a teamwork context.
Entrepreneurship has developed from a
subdiscipline of management studies reliant on alien
terms and cognitive methods toward a separate field
[9]. Recently, several studies have argued that
previous writers on entrepreneurship tended to
exaggerate and romanticize the individual
characteristics of entrepreneurs when new firms are
successful, and that, in fact, entrepreneurs are social
creatures, not solo heroes. Moreover, these studies
argue, entrepreneurship is embedded in a social
context, is considered as a social process [18],
implies an ability to recognize, exploit, and take
risks in seizing entrepreneurial opportunities [63],
and is a social activity, involving personal contacts
in a social network. Based on social system theory,
[20] suggest that entrepreneurs use four types of
functions (goal attainment, pattern maintenance,
social networking and economic optimization) to
develop their business. [7] discuss the role of
networks in generating interpersonal and
inter-organizational trust. [2] argue key similarities
and differences between commercial and social
entrepreneurship. [12] emphasize that
entrepreneurial behavior is a result of the interplay
of social networks and certain cognitive biases in
entrepreneurs. Such works based on the social view
emphasize that entrepreneurs act largely as social
creatures in order to successfully collect necessary
resources and create favorable performance through
complex personal interactions using interpersonal
influence skills both on the outside and inside of an
organization.
Outstanding small firm entrepreneurs and large
firm managers are acting in dissimilar roles, but all
they make certain contributions to our society and
economic development. Both small firm
entrepreneurs and large firm managers are the same
in that they must face the reality that every sunrise
represents a new challenge to their ability to seek
opportunities for marketing new products to
consumers and to achieve excellent financial
performance. Entrepreneurs often enjoy a very
positive judgment in public estimation: they are
viewed as people who provide money for the people
who work as their employees. We may consider that
an employee contributes labor to feed his family,
while an entrepreneur contributes entrepreneurship
to feed his employees. Managers are seen more
neutrally: compared with entrepreneurs, managers
are generally supposed to be more methodical but
less inclined to risk-taking. Some studies in the
literature have examined the differences in features
between entrepreneurs and managers. [6] investigate
differences between entrepreneurs and managers in
large organizations, and report that entrepreneurs are
more susceptible to decision-making biases and
heuristics than are managers. [60], in their study,
report that entrepreneurs are higher in achievement
motivation, risk-taking propensity, and preference
for innovation than are both corporate managers and
small business owners. [62] examines characteristic
differences between managers of large state-owned
enterprises and entrepreneurs of small
privately-owned enterprises; the results of this study
indicate that managers are not as innovative and are
less willing to make risky decisions than
entrepreneurs. Moreover, [61] indicate that
entrepreneurs exhibit higher achievement
motivations than managers and that these
differences are influenced by the entrepreneur's
venture goals.
Because entrepreneurship has emerged as the
most potent economic force, growth and
development in the curricula and programs devoted
to entrepreneurship and new-venture creation have
been remarkable [27]. Entrepreneurship education is
constantly seen as an effective way of providing
small-medium size enterprises with the management
expertise they require in order to develop and grow
[25], and has had an impact on student propensity
and intentionality [50][49]. Many countries
therefore endeavor to foster the entrepreneurial
mindset and relevant skills for their people to
succeed in a complex world. Entrepreneurship
education at school is to develop entrepreneurial
capacities and mindsets [17]. However, the
conventional approach of entrepreneurship
education is apt to overemphasize the importance on
management expertise. In addition to the
management expertise, entrepreneur competency
approach is also helpful and essential to nurture the
entrepreneurial mindset and skills. Nowadays,
competency-based applications are utilized in all
major human resource fields, including recruitment,
selection, assessment, development, appraisal, and
rewards [54][57]. According to [31], the
competency approach has become an increasingly
popular means of studying entrepreneurial
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characteristics. The main advantage, they contend,
of using this approach is that it is particularly well
suited to the kind of investigation of
entrepreneurship which emphasizes long-lasting
individual characteristics leading to success, rather
than simply skills and abilities. In other words,
widely divergent schools of thought about essential
entrepreneurship activities or features can be
integrated into an entrepreneur competency model.
Hence, using the competency approach for the
discovery of the divergence of competencies
between small firm entrepreneurs and large firm
managers can be helpful to a large firm manager
who wishes to imitate, and finally emulate, a small
firm entrepreneur through competency development
based on such diverse competencies. In this spirit,
this study thus proposes an entrepreneur
competency model to investigate these differences
using the rough set theory (RST) and the best
attribute-value (BAV).
The remainder of this paper is organized as
follows. In the next section, the competency and the
entrepreneur competency model are described. In
the subsequent section, the research design and
results are presented. Finally, based upon the
findings, conclusions and suggestions are given.
2. Competency and entrepreneur
competency model
2.1 Competency
McClelland’s paper, “Testing for Competence
Rather Than Intelligence” [36], is credited with
starting the competency movement in 1970s.
Basically, competencies are the characteristics of
people that differentiate performance in a specific
job or role. Furthermore, competencies encompass
clusters of skills, knowledge, abilities, and
behaviors required for people to succeed [11].
According to [16], each competency usually has
from one to five behavioral indicators associated
with it; a behavioral indicator describes a behavior
that one would expect to observe when a
competency is being used in an appropriate manner
during work completion. Although the definition of
a competency has not reached unanimity over the
years [58][43], competencies are now commonly
conceptualized as measurable patterns of knowledge,
skills, abilities, behaviors, and other characteristics
(KSAOs) that differentiate high from average or
poor performance [42][1][51].
Using competencies as the basis for human
resource systems has become a worldwide trend.
But, in fact, if they are to be used effectively, it is
necessary to build the competency models up front,
when competencies are applied in practice. A
competency model is a set of competencies, often
organized into some clusters for a specific purpose.
According to [33], the competency model is a
detailed description of behaviors which employees
require in order to have the ability to be effective in
a job. Fundamentally, we may regard the
competency model as a set of success factors which
contribute to achieving high performance and
concrete results. The competency model is
important because it provides a road map for the
range of behaviors that produce excellent
performance [29].
2.2 Entrepreneur competency model
According to [31], entrepreneurial competencies
are a set of higher-level characteristics involving
personality traits, skills and knowledge. They can be
viewed as the total ability of the entrepreneur to
perform his role successfully. [23] emphasizes 12
competency areas that are required for small
business success, including: starting a business,
planning and budgeting, management,
marketing/selling, advertising and sale promotion,
merchandising, financing and accounting, personnel
relations, purchasing, production, facilities and
equipment, and controlling risk. Moreover, [26]
notes that entrepreneurial competency is the sum
total of the entrepreneur's requisite attributes for
successful and sustainable entrepreneurship,
including attitudes, values, beliefs, knowledge,
skills, abilities, personality, wisdom, expertise
(social, technical, managerial), mindset and
behavioral tendencies. Furthermore, [52] explore the
relationships among managerial competencies,
entrepreneurial style, and firm type. Additionally,
intelligence can be viewed as a specific competency.
[59] stresses the most important intelligence for an
entrepreneur to be successful is that which involves
a balance of analytical, creative, and practical
abilities.
[44] presents a three-layered concept of
entrepreneurship competencies, and notes that
proper entrepreneurial competencies are helpful
when undertaking to start an enterprise and to help it
survive or grow; furthermore, entrepreneurial
competency is the integrated ability to perform
entrepreneurial activities effectively. These
comprise mainly: the ability to recognize and
analyze market opportunities; the ability to
communicate, identify mentally, persuade and
discuss with all stakeholders in the business
environment; and the ability to establish networks
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linking with business persons and stakeholders for
mutual learning and collaborative undertaking.
There are many kinds of manager competency
models which have been developed in the world at
large, but entrepreneurial competency models are
relatively rare. Fortunately, some valuable
entrepreneurial competency models can be easily
accessed for study, such as: the Generic
Entrepreneur Competency Model developed by [34]
for the purpose of identifying potential successful
entrepreneurs; and the NRC Entrepreneurship
Model offered by the National Research Council of
Canada (NRC) for the purpose of supporting
employees in making a successful transition to
entrepreneurship in a technology or science-based
business venture. The Generic Entrepreneur
Competency Model is completely described in the
book Competence at Work: Models for Superior
Performance [58], while the NRC Entrepreneurship
Model is fully displayed on the website of the NRC.
The Generic Entrepreneur Competency Model
includes seven clusters (achievement, thinking and
problem solving, personal maturity, influence,
directing and controlling, orientation to others, and
additional competencies), and each cluster
comprises a number of separate competencies; in
total there are 22 competencies in this model. As for
the NRC Entrepreneurship Model, it is basically
divided into three clusters (achievement/results
orientation, interpersonal and team-building, and
business focus), in which every cluster involves
some varied competencies according to different
levels.
3. Research design and results
This study aims to develop an entrepreneur
competency model to investigate whether there are
differences between small firm entrepreneurs and
large firm managers. The data collection and
instrument, analysis methods, data analysis, and
discussions are described below.
3.1 Data collection and instrument
After reviewing related literature, the author
composed for this study an entrepreneur
competency list which largely derives from the
Generic Entrepreneur Competency Model [34] and
the NRC Entrepreneurship Model. Subsequently, the
preliminary model of 42 entrepreneur competencies
was modified through the expert interview method.
Six face-to-face interviews with experts were
conducted to discuss the concept of entrepreneur
competency and the suitability or sufficiency of the
preliminary model. These experts included three
manufacturing entrepreneurs (from a small firm, a
medium-sized firm, and a large firm), one owner of
a consulting firm, one college scholar who is
familiar with competency theory, and another one
who is the chairman of the Hsin-Chu Human
Resource Management Association. This study takes
these experts’ opinions into account and then
achieves a refined model.
The refined model comprises 23 competencies
(see Table 1), including: Analytical Thinking,
Business Acumen, Client Service Orientation,
Commitment to Learning, Communication,
Conceptual Thinking, Order and Quality,
Developing Others, Empathy, Expertise, Flexibility,
Influence, Information Seeking, Initiative,
Innovation, Organizational Awareness, Personal
Motivation, Relationship Building, Results
Orientation, Self-Confidence, Self-Control, Team
Leadership, Verbal and Written Communication.
Table 1 The 23 entrepreneur competencies
1. Analytical Thinking: the ability to analyze problems systematically.
2. Business Acumen: the ability to discover opportunities and transform resources into performance.
3. Client Service Orientation: the ability to meet the needs of both internal and external customers.
4. Commitment to Learning: the ability to actively pursue learning and develop competitiveness.
5. Communication: the ability to effectively receive and express information or feelings.
6. Conceptual Thinking: the ability to recognize patterns or trends in a problem.
7. Order and Quality: the ability to reduce uncertainty and to control quality.
8. Developing Others: the ability to help others make progress.
9. Empathy: the ability to understand and respond to the concerns of others.
10. Expertise: the ability to perform professional jobs.
11. Flexibility: the ability to effectively adapt to a variety of situations.
12. Influence: the ability to influence thoughts and actions of others.
13. Information Seeking: the ability to capture enough information to increase knowledge or find solutions.
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14. Initiative: the ability to be a self-starter and to meet the challenge of higher level objectives.
15. Innovation: the ability to make something new and to improve performance.
16. Organizational Awareness: the ability to recognize the power relationships in organizations.
17. Personal Motivation: the will to succeed and offer service.
18. Relationship Building: the ability to build and maintain personal networks.
19. Results Orientation: the ability to set performance objectives and measures.
20. Self-Confidence: the ability to express oneself in a hostile situation.
21. Self-Control: the ability to manage one’s emotions under pressure or temptation.
22. Team Leadership: the ability to create a favorable environment and mobilize people to succeed.
23. Verbal and Written Communication: the ability to speak and write satisfactorily.
Furthermore, each competency has five
behavioral indicators corresponding to different
required levels. For example, the “Analytical
Thinking” competency includes five behavioral
indicators: Level 1: Sees Causal Relationships of
problems; Level 2: Weighs the value of each
element of a problem; Level 3: Knows the different
urgency of elements of a problem; Level 4: Realizes
the process or procedure of implementing solutions
to problems; and Level 5: Makes feasible solutions
for actions. In this study, “Level 5” is viewed as the
best, that is, “Level 5” surpasses “Level 4”. For the
purpose of testing the refined model, this study
carried out personal interviews with two
entrepreneurs of small firms and five managers of
large firms, who were recommended by the
Hsin-Chu Human Resource Management
Association.
Entrepreneur A1 broke away from his family
business enterprise, and independently established
an apparel manufacturing firm in 1992. The
philosophy of this firm was that it must be proactive
rather than reactive in order to preserve its position
in the industry. Under a business policy based on the
niche and value-added strategy, the focus of this
firm was designing, doing research and
development, and manufacturing apparel parts for
the J apanese and European markets. This firm, with
an annual turnover of over NT$ 15 million, and
employing eight staff, always achieved a high level
of profit margin. Entrepreneur A2 had experience as
a manager in two large firms, and started up his
business in 2004. Presently, he runs a Chinese food
restaurant with three franchise branches, an annual
turnover of over NT$ 8 million, and six staff
members employed. Because of increasing
competition as well as high costs and low turnover
rate, the focus of this firm has been, provisionally,
only in the local market. Under the pressure of
limited resources and inflation, this firm has been
struggling to control quality and costs while, at the
same time, developing new products and services.
Manager B1 worked in the Unisys Taiwan
company, and won that company’s best manager
prize. At present, he works in a firm which, with
more than NT$ 2,700 million turnover and over
1,890 employees worldwide, is one of the world’s
leading manufacturers in the broadband wireless
networking business, offering various products and
packages covering a wide range, including wireless
ADSL, access point, wireless router, client adapter,
and build-in module. Manager B2 has worked in HP
Taiwan and UMC Taiwan. She is now working in a
firm with more than 2,150 employees in 18
countries with a turnover in excess of NT$ 4,670
million. As a top solution provider in the industrial
automation market, it offers more than 420 products
and solutions ranging from system-integration
hardware and software to customer-driven service.
Manager B3 is working in a firm with more than
NT$ 2,200 million turnover and over 1,550
employees, engaged in the design, manufacture, and
sale of electronic-grade wafers for the
semiconductor industry. It is outstanding as a
leading manufacturer of wafers, and operates a
state-of-the-art silicon wafer manufacturing facility.
The manager B4 has worked in Iwasaki J apan, and
he is now working in a firm with more than
NT$4,520 million turnover and over 3,240
employees, focused on developing and marketing
high brightness Light Emitting Diode (LED)
products. Manager B5 formerly was in a trading
firm, and she is currently working in a firm with
more than NT$ 6,220 million turnover and over
4,800 employees. It is the world's primary provider
of switching power supplies and brushless fans, as
well as a major source for power management
solutions, components, visual displays, industrial
automation, and so on.
Prior to conducting the personal interview, the
author sent all participants the necessary materials
related to the concept of competency and the
contents of the entrepreneur competency model.
When the interviews with them were conducted,
they were asked to designate the most important
behavioral indicator for each competency within the
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS Wei-Wen Wu
ISSN: 1109-9526 283 Issue 6, Volume 6, June 2009
questionnaire based on the proposed entrepreneur
competency model.
3.2 Analysis methods
For the data analysis, the RST and the BAV are
used here. Well known as a data mining technique,
the RST is a relatively new approach and very
effective at data reduction in qualitative analysis.
The RST was firstly introduced by [45], as a
valuable mathematical tool for dealing with
vagueness and uncertainty [46][47][48]. Unlike a
conventional data analysis which uses a statistical
inferential technique, the RST is based on special
data-mining techniques. An analysis based on the
RST has several unique abilities. Among these are:
finding the reducts of attributes, digging out the core
of attributes, and creating decision rules.
This study utilizes the so-called Covering Index
(CI). This index presents a covering ratio, i.e., the
ratio of A: how many objects with the same attribute
value there are in a class, to B: how many objects
belong to that same class [22]. For more details
regarding the CI, please refer to an explanation and
illustration presented by [22]. For the purpose of
using the RST to deal with the qualitative analysis
undertaken here, the contents of the entrepreneur
competency model were transformed into the
RST-based form as shown in the Appendix. Note
that 23 competencies are denoted as alphabetic
symbols from A to W; further, let “a” =Level 1, “b”
=Level 2, “c” =Level 3, “d” =Level 4, and “e” =
Level 5 for behavioral indicators. The “X” symbol
stands for whether or not status as an entrepreneur is
achieved: the answer is either 0 =No or 1 =Yes.
Each competency is viewed as an independent
attribute, and each includes five behavioral
indicators from “a” to “e”. Such a behavioral
indicator is regarded as an attribute-value of an
independent attribute. Thus, the “e” is the BAV.
Moreover, the “X” is called the dependent (class)
attribute, and has two attribute-values (0 =No, 1 =
Yes) in this study. The original dataset can be
presented in tabular form as shown in Table 2 where
each cell has an attribute-value pair.
Table 2 Dataset with attribute-value pairs
Object A B C D E F G H I J K L M N O P Q R S T U V W X
O1 Ab Ba Ce De Ec Fb Gb He Ic J b Kc Lc Me Nb Ob Pb Qb Rb Sb Te Ub Va Wc 1
O2 Ab Ba Ce De Ee Fe Ge He Ic J e Ke Lc Me Nc Oe Pe Qb Ra Se Te Ue Vd Wb 1
O3 Ae Bb Ce Dc Ea Fa Gb Ha Ib J c Ke Lb Mb Nc Ob Pb Qb Rd Sc Tc Ub Va Wa 0
O4 Ae Ba Ca Da Eb Fd Gd Hc Id J d Kc Le Me Nb Oe Pe Qe Ra Se Td Uc Ve We 0
O5 Ae Bd Cd De Ee Fe Ge Hd Id J c Kc Lc Md Nc Ob Pe Qb Rd Sb Te Ud Ve Wb 0
O6 Ae Be Ce De Ed Fe Gc Hd Id J c Ke Lc Me Ne Od Pe Qa Ra Se Td Ud Va Wb 0
O7 Ac Ba Ce De Ec Fb Gc Hd Id J b Kc Lc Mb Nc Od Pc Qb Rd Sb Tc Ue Vb Wb 0
3.3 Data analysis
Rule 1: {Ab} =>Entrepreneur =Yes; CI =100.00%.
Tasks of data analysis such as this can be
implemented with the help of the software ROSE
(Rough Sets Data Explorer). The ROSE is software
that implements basic elements of the rough set
theory and rule discovery techniques. From the data
analysis using the RST we can obtain two rules as
follows. Rule 1 is that the attribute-value “b”
(Weighs the value of each elements of a problem) of
competency A (Analytical Thinking) can identify
the “Entrepreneur” with the CI value of 100.00%.
Rule 2 is that the attribute-value “c” (Knows the
different urgency of elements of a problem) or “e”
(Makes feasible solutions for actions) of
competency A is a reliable indicator of the category
“Non-Entrepreneur” with the CI value of 100.00%.
Rule 2: {Ae, Ac} =>Entrepreneur =No; CI =
100.00%.
The result of analysis using the BAV displays a
surprising outcome. As shown in Table 3, in which
the “?” denotes BAV while the “?” signifies
non-BAV, the attribute-value “e” (Builds a
mechanism for talent development) of competency
H (Developing Others) can be said to definitively
distinguish the “Entrepreneur” from the “non-
Entrepreneur”.
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS Wei-Wen Wu
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Table 3 Analysis result using the BAV
Object A B C D E F G H I J K L M N O P Q R S T U V W X
O1 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 1
O2 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 1
O3 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 0
O4 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 0
O5 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 0
O6 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 0
O7 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 0
3.4 Discussion
Although both large firm managers and small
firm entrepreneurs are capable and make certain
contributions to our society and economic
development, many people envy small firm
entrepreneurs and want to emulate them as a road to
wealth, fame, and freedom. It is an interesting
question of what factors lead to large firm managers
and small firm entrepreneurs taking different paths.
With reference to this question, [10] note that each
of the various schools of thought offers special
insights that help us to understand the nature of
entrepreneurship activity or the variety of
entrepreneurial features such as: personal value
system, risk-taking propensity, need for
achievement, creativity or innovativeness,
management knowledge and skills, entrepreneurial
leadership, and so on. However, each school of
thought explains only a portion of the truth.
Entrepreneurship activities or entrepreneurial
features can be grouped into a number of categories,
among them the following: knowledge and skills,
attitudes, values, traits, and personal characteristics.
These categories can then be integrated into an
entrepreneur competency model. This is because the
competency model includes measurable elements,
including patterns of knowledge, skills, attitudes,
behaviors, and other characteristics. With this in
mind, this study adopts the competency approach
and builds an entrepreneur competency model for
exploring the difference between small firm
entrepreneurs and large firm managers.
In fact, the application of competency measures is
able to differentiate high performers from average
performers. Additionally, it turns out the
entrepreneur competency model can differentiate
small firm entrepreneurs from large firm managers.
In this empirical study, the results of analysis using
the RST reveal that the “Entrepreneur” can be fully
identified by the attribute-value “b” (Weighs the
value of each elements of a problem) of competency
A while the “Non-Entrepreneur” can be fully
identified by the attribute-value “c” (Knows the
different urgency of elements of a problem) or “e”
(Makes feasible solutions for actions) of
competency A. This is a most meaningful finding,
showing that (1) with the use of RST, we can utilize
only few attribute-values to effectively recognize
the “Entrepreneur” or the “Non-Entrepreneur”,
rather than the entirety of 115 attribute-values; (2)
both Rule 1 and Rule 2 are involving the
competency A (Analytical Thinking) which may
regarded as the key competency to distinguish
whether a given individual is an “Entrepreneur” or
not. More importantly, although we often consider
that entrepreneurs are smarter than managers, the
findings of this study indicate that this is actually
not so. Attribute value “c” (Knows the different
urgency of elements of a problem) or “e” (Makes
feasible solutions for actions) for large firm
managers is a higher level attribute than “b”
(Weighs the value of each elements of a problem)
for small firm entrepreneurs. The findings,
incidentally accord with a cautionary note by [58].
They emphasize that a behavioral indicator at higher
level does not mean that a behavior is necessarily
better; rather, each role or job has an optimal point
on each scale.
This study also employs the BAV for the purpose
of further exploration. The results arrived at using
the BAV show that the attribute-value “e” (Builds a
mechanism for talent development) of the
competency H (Developing Others) can infallibly
distinguish whether a given subject is an
“Entrepreneur” or not. The findings agree with the
notion that entrepreneurs are social creatures and are
more capable of utilizing the human resource than
are managers. This may explain why a person with
lower school marks tends to be a small firm
entrepreneur while another, with higher school
marks, will become a large firm manager. The
determinant is, apparently, the predominance of
social over analytical skills: the ability to construct
devices or systems which foster talents both outside
and inside the enterprise – a social skill which
enables one to maximize one’s interpersonal
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS Wei-Wen Wu
ISSN: 1109-9526 285 Issue 6, Volume 6, June 2009
influence and power.
From the above, some conclusions can be derived.
Firstly, we may conclude that the views of the
various schools of thought about the nature of
entrepreneurship activity or entrepreneurial features
can be incorporated into an entrepreneur
competency model. Next, through the use of a
combination of the RST and the BAV we can
uncover a deeper level of indicators for
decision-making. The findings of this study also
lead us to conclude that being a small firm
entrepreneur demands the ability to build a talent
pool, much more than the ability to think
analytically. It also suggests that a small firm needs
to be better at rapid and flexible response to the
changeable business world than does a large firm,
and that the success of a small firm is more
dependent on human networks and social relations.
Thus, if a large firm manager wants to become a
small firm entrepreneur, it appears he needs to place
less emphasis on methodical thinking and paper
work, and more on human networking.
4. Conclusions and suggestions
For the purpose of exploring the difference
between small firm entrepreneurs and large firm
managers, this study developed an entrepreneur
competency model based on a review of the
literature followed by systematically conducted
interviews with selected experts. This study is
presented as a test case for the extension of practical
applications of the RST and the BAV in the field of
entrepreneurship research, and it successfully
achieved the aim of finding out certain differences
between small firm entrepreneurs and large firm
managers.
Several studies have investigated the difference
between entrepreneurs and managers. [6] examine
differences in the decision-making processes
between entrepreneurs and managers in large
organizations. [60] conduct a comparison of
entrepreneurs, small business owners, and corporate
managers with special attention to the differences in
achievement motivation, risk-taking propensity, and
preference for innovation. [62] investigates the
different impact on innovation and risk-taking
between managers of large state-owned enterprises
and entrepreneurs of small privately-owned
enterprises. [61] perform a meta-analysis of
achievement motivation differences between
entrepreneurs and managers. This study differs
substantially from those mentioned above, not only
with regard to the research approach, but also with
regard to the research focus, objectives, and method
of analysis. The proposed competency model is a
synthesis of the views of varied schools of thought
about entrepreneurship activity or entrepreneurial
features, and this study use it, with the RST and
BAV methodologies, to explore the differences in
the range of competencies between small firm
entrepreneurs and large firm managers.
The findings of this study show that (1) using the
RST, the behavioral indicator “Weighs the value of
each elements of a problem” can be used to reliably
identify a small firm entrepreneur, while the
behavioral indicator “Knows the different urgency
of elements of a problem” or “Makes feasible
solutions for actions” can be used to identify a large
firm manager; (2) using the BAV, the behavioral
indicator “Builds a mechanism for talent
development” can definitively distinguish a small
firm entrepreneur from a large firm manager; (3) the
competency “Analytical Thinking” from the RST
and the competency “Developing Others” from the
BAV, are the key competencies which may be used
to determine whether a given individual is an
“Entrepreneur” or not; and (4) by using either the
RST or the BAV, we can effectively differentiate
whether a given subject is an “Entrepreneur” or not,
with reference to a very minimal number of
attribute-values (behavioral indicators).
Although each school of thought about
entrepreneurship activities or entrepreneurial
features has its own emphasis and unique point of
view, it is quite feasible, the author proposes, to
integrate them into an entrepreneur competency
model, with the possible goal of helping a person
learn to be an entrepreneur through the aid of
competency development. Using new
methodologies, such as the RST or the BAV, we
may blaze new trails in this endeavor. This study
clearly shows that, among 23 competencies, only
two of them – “Analytical Thinking” and
“Developing Others” are the essential determinants
when we wish to discriminate between a small firm
entrepreneur and a large firm manager. With regard
to the behavioral indicators, this study finds that the
small firm entrepreneur is excellent in “Builds a
mechanism for talent development” while a large
firm manager is good at “Knows the different
urgency of elements of a problem” or “Makes
feasible solutions for actions”. This reveals that if a
large firm manager wants to emulate a small firm
entrepreneur, the suggestion is to de-emphasize
methodical thinking and paper work, and to
undertake more human networking. The finding is
particularly valuable and important, because it
provides useful directions in terms of
entrepreneurship education and training for young
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS Wei-Wen Wu
ISSN: 1109-9526 286 Issue 6, Volume 6, June 2009
people, and offers insights that can help a large firm
manager to become a small firm entrepreneur or to
boost the probability of a start-up's success.
This pilot study reveals some meaningful facts,
but it must be admitted that the sample size is small
and is therefore of limited statistical significance.
However, the proposed model could be further
tested and extended. Additionally, based on the
study results, some propositions can be presented as
tentatively dependable such as: a large firm manager
is superior to a small firm entrepreneur in analytical
thinking; and a small firm entrepreneur is superior
to a large firm manager in developing others. As for
future research, possible directions are as follows:
refining the proposed model through more case
studies; improving the usefulness of the RST and
the BAV; and developing an entrepreneur
competency set that can effectively help a large firm
manager to become a small firm entrepreneur, given
that each role optimally requires its own
competency set.
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Appendix. Attributes and attribute values
A. Analytical Thinking:
a. Sees Causal Relationships of problems
b. Weighs the value of each element of a problem
c. Knows the different urgency of elements of a
problem
d. Realizes the process or procedure of
implementing problems
e. Makes feasible solutions for actions
B. Business Acumen:
a. Discovers business opportunities with initiative
b. Takes actions to practice business opportunities
c. Handles business analysis and management
d. Designs organization structures and systems
e. Innovates and implements business strategies
C. Client Service Orientation:
a. Understands the needs of external customers
b. Understands the needs of internal customers
c. Responds to the needs of external customers
d. Responds to the needs of internal customers
e. Gives satisfaction to both internal and external
customers
D. Commitment to Learning:
a. Pursues learning about business success by
oneself
b. Pursues learning about business success from
others
c. Pursues learning in single special field
d. Pursues learning in two special fields
e. Pursues learning in multiple special fields
E. Communication:
a. Expresses information or feelings properly
b. Recognizes intentions behind information or
feelings of counterparties
c. Employs communication skills or strategies
smoothly
d. Achieves two-way communications effectively
e. Achieves the purpose of communications
F. Conceptual Thinking:
a. Realizes the connections between elements of a
problem
b. Understands the key elements of a problem
c. Sees patterns or trends in a problem
d. Models the connections between elements of a
problem
e. Utilizes conceptual models to make performance
better
G. Order and Quality:
a. Shows concern for order in the surrounding
environment
b. Shows concern for clarity of roles
c. Checks process and accuracy of own work
d. Checks process and accuracy of others' work
e. Monitors own and others' work progress
M. Information Seeking:
a. Queries information initiatively
b. Seeks information enthusiastically
c. Investigates problems systematically
d. Discovers solutions to a problem
e. Continues research constantly
N. Initiative:
a. Meets only required performance
b. Takes actions to make performance better
c. Achieves extra performance
d. Accepts additional tasks
e. Accomplishes additional tasks
O. Innovation:
a. Makes thinking innovation
b. Makes technical innovation
c. Makes product innovation
d. Makes process innovation
e. Makes organization and culture innovation
P. Organizational Awareness:
a. Understands the value and strategy of an
organization
b. Understands formal rules of an organization
c. Realizes informal rules of an organization
d. Realizes non-written rules of an organization
e. Realizes the power relationships of an
organization
Q. Personal Motivation:
a. Pursue success for oneself
b. Pursue success for an organization
c. Services to a industry
d. Services to a country
e. Services to the world
R. Relationship Building:
a. Maintains pleasant working relationships
b. Makes non-working contact
c. Makes personal contact
d. Builds personal friendships
e. Achieves deep friendships
S. Results Orientation:
a. Works to meet performance standards
b. Sets challenge objectives
c. Achieves beyond expectation
d. Produces a little result
e. Produces a huge result
T. Self-Confidence:
a. Acts independently and boldly
b. Expresses oneself and criticizes others
c. Expresses oneself but does not criticize others
d. Expresses oneself and acts fiercely
e. Expresses oneself and acts moderately
U. Self-Control:
a. Maintains one’s self-control but suffers negative
influences
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS Wei-Wen Wu
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H. Developing Others:
a. Gives comfort and stimulation
b. Gives operational instructions
c. Gives theoretical instructions
d. Offers resource and support
e. Builds a mechanism for talent development
I. Empathy:
a. Listens to the concerns of others
b. Realizes the concerns of others
c. Responds to the concerns of others properly
d. Responds to the concerns of others and earns trust
e. Responds to the concerns of others and obtains
performance
J . Expertise:
a. Basic vocational abilities
b. Advanced vocational abilities
c. Excellent vocational abilities
d. Authoritative vocational abilities
e. Multiple vocational abilities
K. Flexibility:
a. Gets along with people objectively
b. Acts and talks moderately
c. Alters usual modes or procedures to fit a specific
situation
d. Adapts to changes rapidly
e. Adapts to changes rapidly and effectively
L. Influence:
a. Takes action once to influence others
b. Takes actions twice to influence others
c. Takes actions more than twice to influence others
d. Brings out a little impact and effect
e. Brings out great impact and effect
b. Maintains one’s self-control and keeps calm
c. Maintains one’s self-control and makes
counterattacks
d. Maintains one’s self-control and makes
constructive counterattacks
e. Maintains one’s self-control and comforts
others’ emotions
V. Team Leadership:
a. Knows merits and demerits of each team
member
b. Conducts meetings effectively
c. Builds a sensible performance system
d. Enhances morale of the team
e. Enhances achievement of the team
W. Verbal and Written Communication:
a. Makes oral stimulations
b. Makes touching persuasions
c. Makes affecting speeches
d. Writes something touchingly
e. Both speaks and writes satisfactorily
X. Whether is an entrepreneur or not?
0 =No,
1 =Yes.
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS Wei-Wen Wu
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doc_495295477.pdf
Within this brief paper related to a competency based model for the success of an entrepreneurial start up.
A competency-based model for the success of an entrepreneurial start-up
WEI-WEN WU
Department of International Trade,
Ta Hwa Institute of Technology,
1. Ta Hwa Road, Chiung-Lin, Hsin-Chu 30704
TAIWAN
[email protected]
Abstract: - Many people envy entrepreneurs and want to emulate them as a road to wealth, fame, and freedom.
A large number of works have argued about what makes a person act entrepreneurially, and various traits and
characteristics of entrepreneurs have been enthusiastically discussed. This study focuses on one particular
point: how to facilitate a person’s efforts to become a small firm entrepreneur through competency assessment
and development. To this end, this study proposes an entrepreneur competency model and employs the rough
set theory (RST) and the best attribute-value (BAV) to investigate whether there are diverse competencies
between small firm entrepreneurs and large firm managers. The results of this study indicate that the small
firm entrepreneur generally excels in “building a mechanism for talent development”, while a large firm
manager is good at “knowing the different urgency of elements of a problem” or “making feasible solutions
for actions”. Thus, if a large firm manager wants to emulate a small firm entrepreneur, the suggestion is to
de-emphasize methodical thinking and paper work, and to undertake more human networking.
Keywords: - entrepreneur; competency model; rough set theory; best attribute-value
1. Introduction
Successful entrepreneurs are important to the
development of society because they contribute to
the creation of employment opportunities, and to the
advance of economic growth. Entrepreneurs are
often regarded as marvelous people who are capable
of devising new ideas, evaluating opportunities and
risks, or starting and running a business. Numerous
works in the literature have paid considerable
attention to the particular features or traits that make
a person act entrepreneurially, and a long list of
crucial traits and characteristics has been discussed.
For example, [30] conduct a comparison of
determinants for business start-up in the U.S. and
Korea. [32] show forty-two characteristics
descriptive of the entrepreneur. Especially, [25]
highlight several entrepreneurial traits associated
with successful entrepreneurs, as follows: high need
for achievement [35][21][37][3], high need for
independence [8][4][24], locus of control [5][41],
moderate risk-taking [14][40][37][24], tolerance for
ambiguity [55][37], and innovation [56][15][37].
Additionally, [39] examine the relation between
entrepreneurial orientation and growth orientation.
[64] emphasize that corporate entrepreneurship
performs a unique role of resource capital
configuration. [53] argue that nascent entrepreneurs
are pushed toward entrepreneurial career due to low
job satisfaction in their pre-entrepreneurial
employment. [13] perform studies regarding a past,
present, and future perspective on data analysis
techniques and competencies in entrepreneurship.
As to the definition of an entrepreneur, there are
several valuable suggestions in the literature, such
as the following: an entrepreneur is a person who
creates a new business as a founder [19]; the
entrepreneur is the person who discovers a business
idea for a venture [28], and enables the idea to
become a new business [63]; and, on the negative
side, anyone who inherits or buys an existing
enterprise or manages a turnaround as an employee
is not an entrepreneur [10]. This study adopts the
notion that an entrepreneur is a person who creates a
new business as a founder and possesses a certain
ownership, and does not act merely as an employed
manager [19][10]. Furthermore, [10]note that
various schools of thought provide different but
useful insights, and describe six schools of thought
about entrepreneurship activity, including: (1) the
“Great Person” school which deems that
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS Wei-Wen Wu
ISSN: 1109-9526 279 Issue 6, Volume 6, June 2009
entrepreneurs are endowed with certain traits
differentiating them from others; (2) the
“Psychological Characteristics” school accentuates
personality factors (distinctive values and attitudes)
that make entrepreneurs unique; (3) the “Classical”
school focuses on innovation and creativity for
entrepreneurs; (4) the “Management” school
stresses the business capability of an entrepreneur;
(5) the “Leadership” school emphasizes the
effectiveness of leadership style for an entrepreneur;
and (6) the “Intrapreneurship” school encourages
entrepreneurship in a teamwork context.
Entrepreneurship has developed from a
subdiscipline of management studies reliant on alien
terms and cognitive methods toward a separate field
[9]. Recently, several studies have argued that
previous writers on entrepreneurship tended to
exaggerate and romanticize the individual
characteristics of entrepreneurs when new firms are
successful, and that, in fact, entrepreneurs are social
creatures, not solo heroes. Moreover, these studies
argue, entrepreneurship is embedded in a social
context, is considered as a social process [18],
implies an ability to recognize, exploit, and take
risks in seizing entrepreneurial opportunities [63],
and is a social activity, involving personal contacts
in a social network. Based on social system theory,
[20] suggest that entrepreneurs use four types of
functions (goal attainment, pattern maintenance,
social networking and economic optimization) to
develop their business. [7] discuss the role of
networks in generating interpersonal and
inter-organizational trust. [2] argue key similarities
and differences between commercial and social
entrepreneurship. [12] emphasize that
entrepreneurial behavior is a result of the interplay
of social networks and certain cognitive biases in
entrepreneurs. Such works based on the social view
emphasize that entrepreneurs act largely as social
creatures in order to successfully collect necessary
resources and create favorable performance through
complex personal interactions using interpersonal
influence skills both on the outside and inside of an
organization.
Outstanding small firm entrepreneurs and large
firm managers are acting in dissimilar roles, but all
they make certain contributions to our society and
economic development. Both small firm
entrepreneurs and large firm managers are the same
in that they must face the reality that every sunrise
represents a new challenge to their ability to seek
opportunities for marketing new products to
consumers and to achieve excellent financial
performance. Entrepreneurs often enjoy a very
positive judgment in public estimation: they are
viewed as people who provide money for the people
who work as their employees. We may consider that
an employee contributes labor to feed his family,
while an entrepreneur contributes entrepreneurship
to feed his employees. Managers are seen more
neutrally: compared with entrepreneurs, managers
are generally supposed to be more methodical but
less inclined to risk-taking. Some studies in the
literature have examined the differences in features
between entrepreneurs and managers. [6] investigate
differences between entrepreneurs and managers in
large organizations, and report that entrepreneurs are
more susceptible to decision-making biases and
heuristics than are managers. [60], in their study,
report that entrepreneurs are higher in achievement
motivation, risk-taking propensity, and preference
for innovation than are both corporate managers and
small business owners. [62] examines characteristic
differences between managers of large state-owned
enterprises and entrepreneurs of small
privately-owned enterprises; the results of this study
indicate that managers are not as innovative and are
less willing to make risky decisions than
entrepreneurs. Moreover, [61] indicate that
entrepreneurs exhibit higher achievement
motivations than managers and that these
differences are influenced by the entrepreneur's
venture goals.
Because entrepreneurship has emerged as the
most potent economic force, growth and
development in the curricula and programs devoted
to entrepreneurship and new-venture creation have
been remarkable [27]. Entrepreneurship education is
constantly seen as an effective way of providing
small-medium size enterprises with the management
expertise they require in order to develop and grow
[25], and has had an impact on student propensity
and intentionality [50][49]. Many countries
therefore endeavor to foster the entrepreneurial
mindset and relevant skills for their people to
succeed in a complex world. Entrepreneurship
education at school is to develop entrepreneurial
capacities and mindsets [17]. However, the
conventional approach of entrepreneurship
education is apt to overemphasize the importance on
management expertise. In addition to the
management expertise, entrepreneur competency
approach is also helpful and essential to nurture the
entrepreneurial mindset and skills. Nowadays,
competency-based applications are utilized in all
major human resource fields, including recruitment,
selection, assessment, development, appraisal, and
rewards [54][57]. According to [31], the
competency approach has become an increasingly
popular means of studying entrepreneurial
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characteristics. The main advantage, they contend,
of using this approach is that it is particularly well
suited to the kind of investigation of
entrepreneurship which emphasizes long-lasting
individual characteristics leading to success, rather
than simply skills and abilities. In other words,
widely divergent schools of thought about essential
entrepreneurship activities or features can be
integrated into an entrepreneur competency model.
Hence, using the competency approach for the
discovery of the divergence of competencies
between small firm entrepreneurs and large firm
managers can be helpful to a large firm manager
who wishes to imitate, and finally emulate, a small
firm entrepreneur through competency development
based on such diverse competencies. In this spirit,
this study thus proposes an entrepreneur
competency model to investigate these differences
using the rough set theory (RST) and the best
attribute-value (BAV).
The remainder of this paper is organized as
follows. In the next section, the competency and the
entrepreneur competency model are described. In
the subsequent section, the research design and
results are presented. Finally, based upon the
findings, conclusions and suggestions are given.
2. Competency and entrepreneur
competency model
2.1 Competency
McClelland’s paper, “Testing for Competence
Rather Than Intelligence” [36], is credited with
starting the competency movement in 1970s.
Basically, competencies are the characteristics of
people that differentiate performance in a specific
job or role. Furthermore, competencies encompass
clusters of skills, knowledge, abilities, and
behaviors required for people to succeed [11].
According to [16], each competency usually has
from one to five behavioral indicators associated
with it; a behavioral indicator describes a behavior
that one would expect to observe when a
competency is being used in an appropriate manner
during work completion. Although the definition of
a competency has not reached unanimity over the
years [58][43], competencies are now commonly
conceptualized as measurable patterns of knowledge,
skills, abilities, behaviors, and other characteristics
(KSAOs) that differentiate high from average or
poor performance [42][1][51].
Using competencies as the basis for human
resource systems has become a worldwide trend.
But, in fact, if they are to be used effectively, it is
necessary to build the competency models up front,
when competencies are applied in practice. A
competency model is a set of competencies, often
organized into some clusters for a specific purpose.
According to [33], the competency model is a
detailed description of behaviors which employees
require in order to have the ability to be effective in
a job. Fundamentally, we may regard the
competency model as a set of success factors which
contribute to achieving high performance and
concrete results. The competency model is
important because it provides a road map for the
range of behaviors that produce excellent
performance [29].
2.2 Entrepreneur competency model
According to [31], entrepreneurial competencies
are a set of higher-level characteristics involving
personality traits, skills and knowledge. They can be
viewed as the total ability of the entrepreneur to
perform his role successfully. [23] emphasizes 12
competency areas that are required for small
business success, including: starting a business,
planning and budgeting, management,
marketing/selling, advertising and sale promotion,
merchandising, financing and accounting, personnel
relations, purchasing, production, facilities and
equipment, and controlling risk. Moreover, [26]
notes that entrepreneurial competency is the sum
total of the entrepreneur's requisite attributes for
successful and sustainable entrepreneurship,
including attitudes, values, beliefs, knowledge,
skills, abilities, personality, wisdom, expertise
(social, technical, managerial), mindset and
behavioral tendencies. Furthermore, [52] explore the
relationships among managerial competencies,
entrepreneurial style, and firm type. Additionally,
intelligence can be viewed as a specific competency.
[59] stresses the most important intelligence for an
entrepreneur to be successful is that which involves
a balance of analytical, creative, and practical
abilities.
[44] presents a three-layered concept of
entrepreneurship competencies, and notes that
proper entrepreneurial competencies are helpful
when undertaking to start an enterprise and to help it
survive or grow; furthermore, entrepreneurial
competency is the integrated ability to perform
entrepreneurial activities effectively. These
comprise mainly: the ability to recognize and
analyze market opportunities; the ability to
communicate, identify mentally, persuade and
discuss with all stakeholders in the business
environment; and the ability to establish networks
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linking with business persons and stakeholders for
mutual learning and collaborative undertaking.
There are many kinds of manager competency
models which have been developed in the world at
large, but entrepreneurial competency models are
relatively rare. Fortunately, some valuable
entrepreneurial competency models can be easily
accessed for study, such as: the Generic
Entrepreneur Competency Model developed by [34]
for the purpose of identifying potential successful
entrepreneurs; and the NRC Entrepreneurship
Model offered by the National Research Council of
Canada (NRC) for the purpose of supporting
employees in making a successful transition to
entrepreneurship in a technology or science-based
business venture. The Generic Entrepreneur
Competency Model is completely described in the
book Competence at Work: Models for Superior
Performance [58], while the NRC Entrepreneurship
Model is fully displayed on the website of the NRC.
The Generic Entrepreneur Competency Model
includes seven clusters (achievement, thinking and
problem solving, personal maturity, influence,
directing and controlling, orientation to others, and
additional competencies), and each cluster
comprises a number of separate competencies; in
total there are 22 competencies in this model. As for
the NRC Entrepreneurship Model, it is basically
divided into three clusters (achievement/results
orientation, interpersonal and team-building, and
business focus), in which every cluster involves
some varied competencies according to different
levels.
3. Research design and results
This study aims to develop an entrepreneur
competency model to investigate whether there are
differences between small firm entrepreneurs and
large firm managers. The data collection and
instrument, analysis methods, data analysis, and
discussions are described below.
3.1 Data collection and instrument
After reviewing related literature, the author
composed for this study an entrepreneur
competency list which largely derives from the
Generic Entrepreneur Competency Model [34] and
the NRC Entrepreneurship Model. Subsequently, the
preliminary model of 42 entrepreneur competencies
was modified through the expert interview method.
Six face-to-face interviews with experts were
conducted to discuss the concept of entrepreneur
competency and the suitability or sufficiency of the
preliminary model. These experts included three
manufacturing entrepreneurs (from a small firm, a
medium-sized firm, and a large firm), one owner of
a consulting firm, one college scholar who is
familiar with competency theory, and another one
who is the chairman of the Hsin-Chu Human
Resource Management Association. This study takes
these experts’ opinions into account and then
achieves a refined model.
The refined model comprises 23 competencies
(see Table 1), including: Analytical Thinking,
Business Acumen, Client Service Orientation,
Commitment to Learning, Communication,
Conceptual Thinking, Order and Quality,
Developing Others, Empathy, Expertise, Flexibility,
Influence, Information Seeking, Initiative,
Innovation, Organizational Awareness, Personal
Motivation, Relationship Building, Results
Orientation, Self-Confidence, Self-Control, Team
Leadership, Verbal and Written Communication.
Table 1 The 23 entrepreneur competencies
1. Analytical Thinking: the ability to analyze problems systematically.
2. Business Acumen: the ability to discover opportunities and transform resources into performance.
3. Client Service Orientation: the ability to meet the needs of both internal and external customers.
4. Commitment to Learning: the ability to actively pursue learning and develop competitiveness.
5. Communication: the ability to effectively receive and express information or feelings.
6. Conceptual Thinking: the ability to recognize patterns or trends in a problem.
7. Order and Quality: the ability to reduce uncertainty and to control quality.
8. Developing Others: the ability to help others make progress.
9. Empathy: the ability to understand and respond to the concerns of others.
10. Expertise: the ability to perform professional jobs.
11. Flexibility: the ability to effectively adapt to a variety of situations.
12. Influence: the ability to influence thoughts and actions of others.
13. Information Seeking: the ability to capture enough information to increase knowledge or find solutions.
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14. Initiative: the ability to be a self-starter and to meet the challenge of higher level objectives.
15. Innovation: the ability to make something new and to improve performance.
16. Organizational Awareness: the ability to recognize the power relationships in organizations.
17. Personal Motivation: the will to succeed and offer service.
18. Relationship Building: the ability to build and maintain personal networks.
19. Results Orientation: the ability to set performance objectives and measures.
20. Self-Confidence: the ability to express oneself in a hostile situation.
21. Self-Control: the ability to manage one’s emotions under pressure or temptation.
22. Team Leadership: the ability to create a favorable environment and mobilize people to succeed.
23. Verbal and Written Communication: the ability to speak and write satisfactorily.
Furthermore, each competency has five
behavioral indicators corresponding to different
required levels. For example, the “Analytical
Thinking” competency includes five behavioral
indicators: Level 1: Sees Causal Relationships of
problems; Level 2: Weighs the value of each
element of a problem; Level 3: Knows the different
urgency of elements of a problem; Level 4: Realizes
the process or procedure of implementing solutions
to problems; and Level 5: Makes feasible solutions
for actions. In this study, “Level 5” is viewed as the
best, that is, “Level 5” surpasses “Level 4”. For the
purpose of testing the refined model, this study
carried out personal interviews with two
entrepreneurs of small firms and five managers of
large firms, who were recommended by the
Hsin-Chu Human Resource Management
Association.
Entrepreneur A1 broke away from his family
business enterprise, and independently established
an apparel manufacturing firm in 1992. The
philosophy of this firm was that it must be proactive
rather than reactive in order to preserve its position
in the industry. Under a business policy based on the
niche and value-added strategy, the focus of this
firm was designing, doing research and
development, and manufacturing apparel parts for
the J apanese and European markets. This firm, with
an annual turnover of over NT$ 15 million, and
employing eight staff, always achieved a high level
of profit margin. Entrepreneur A2 had experience as
a manager in two large firms, and started up his
business in 2004. Presently, he runs a Chinese food
restaurant with three franchise branches, an annual
turnover of over NT$ 8 million, and six staff
members employed. Because of increasing
competition as well as high costs and low turnover
rate, the focus of this firm has been, provisionally,
only in the local market. Under the pressure of
limited resources and inflation, this firm has been
struggling to control quality and costs while, at the
same time, developing new products and services.
Manager B1 worked in the Unisys Taiwan
company, and won that company’s best manager
prize. At present, he works in a firm which, with
more than NT$ 2,700 million turnover and over
1,890 employees worldwide, is one of the world’s
leading manufacturers in the broadband wireless
networking business, offering various products and
packages covering a wide range, including wireless
ADSL, access point, wireless router, client adapter,
and build-in module. Manager B2 has worked in HP
Taiwan and UMC Taiwan. She is now working in a
firm with more than 2,150 employees in 18
countries with a turnover in excess of NT$ 4,670
million. As a top solution provider in the industrial
automation market, it offers more than 420 products
and solutions ranging from system-integration
hardware and software to customer-driven service.
Manager B3 is working in a firm with more than
NT$ 2,200 million turnover and over 1,550
employees, engaged in the design, manufacture, and
sale of electronic-grade wafers for the
semiconductor industry. It is outstanding as a
leading manufacturer of wafers, and operates a
state-of-the-art silicon wafer manufacturing facility.
The manager B4 has worked in Iwasaki J apan, and
he is now working in a firm with more than
NT$4,520 million turnover and over 3,240
employees, focused on developing and marketing
high brightness Light Emitting Diode (LED)
products. Manager B5 formerly was in a trading
firm, and she is currently working in a firm with
more than NT$ 6,220 million turnover and over
4,800 employees. It is the world's primary provider
of switching power supplies and brushless fans, as
well as a major source for power management
solutions, components, visual displays, industrial
automation, and so on.
Prior to conducting the personal interview, the
author sent all participants the necessary materials
related to the concept of competency and the
contents of the entrepreneur competency model.
When the interviews with them were conducted,
they were asked to designate the most important
behavioral indicator for each competency within the
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questionnaire based on the proposed entrepreneur
competency model.
3.2 Analysis methods
For the data analysis, the RST and the BAV are
used here. Well known as a data mining technique,
the RST is a relatively new approach and very
effective at data reduction in qualitative analysis.
The RST was firstly introduced by [45], as a
valuable mathematical tool for dealing with
vagueness and uncertainty [46][47][48]. Unlike a
conventional data analysis which uses a statistical
inferential technique, the RST is based on special
data-mining techniques. An analysis based on the
RST has several unique abilities. Among these are:
finding the reducts of attributes, digging out the core
of attributes, and creating decision rules.
This study utilizes the so-called Covering Index
(CI). This index presents a covering ratio, i.e., the
ratio of A: how many objects with the same attribute
value there are in a class, to B: how many objects
belong to that same class [22]. For more details
regarding the CI, please refer to an explanation and
illustration presented by [22]. For the purpose of
using the RST to deal with the qualitative analysis
undertaken here, the contents of the entrepreneur
competency model were transformed into the
RST-based form as shown in the Appendix. Note
that 23 competencies are denoted as alphabetic
symbols from A to W; further, let “a” =Level 1, “b”
=Level 2, “c” =Level 3, “d” =Level 4, and “e” =
Level 5 for behavioral indicators. The “X” symbol
stands for whether or not status as an entrepreneur is
achieved: the answer is either 0 =No or 1 =Yes.
Each competency is viewed as an independent
attribute, and each includes five behavioral
indicators from “a” to “e”. Such a behavioral
indicator is regarded as an attribute-value of an
independent attribute. Thus, the “e” is the BAV.
Moreover, the “X” is called the dependent (class)
attribute, and has two attribute-values (0 =No, 1 =
Yes) in this study. The original dataset can be
presented in tabular form as shown in Table 2 where
each cell has an attribute-value pair.
Table 2 Dataset with attribute-value pairs
Object A B C D E F G H I J K L M N O P Q R S T U V W X
O1 Ab Ba Ce De Ec Fb Gb He Ic J b Kc Lc Me Nb Ob Pb Qb Rb Sb Te Ub Va Wc 1
O2 Ab Ba Ce De Ee Fe Ge He Ic J e Ke Lc Me Nc Oe Pe Qb Ra Se Te Ue Vd Wb 1
O3 Ae Bb Ce Dc Ea Fa Gb Ha Ib J c Ke Lb Mb Nc Ob Pb Qb Rd Sc Tc Ub Va Wa 0
O4 Ae Ba Ca Da Eb Fd Gd Hc Id J d Kc Le Me Nb Oe Pe Qe Ra Se Td Uc Ve We 0
O5 Ae Bd Cd De Ee Fe Ge Hd Id J c Kc Lc Md Nc Ob Pe Qb Rd Sb Te Ud Ve Wb 0
O6 Ae Be Ce De Ed Fe Gc Hd Id J c Ke Lc Me Ne Od Pe Qa Ra Se Td Ud Va Wb 0
O7 Ac Ba Ce De Ec Fb Gc Hd Id J b Kc Lc Mb Nc Od Pc Qb Rd Sb Tc Ue Vb Wb 0
3.3 Data analysis
Rule 1: {Ab} =>Entrepreneur =Yes; CI =100.00%.
Tasks of data analysis such as this can be
implemented with the help of the software ROSE
(Rough Sets Data Explorer). The ROSE is software
that implements basic elements of the rough set
theory and rule discovery techniques. From the data
analysis using the RST we can obtain two rules as
follows. Rule 1 is that the attribute-value “b”
(Weighs the value of each elements of a problem) of
competency A (Analytical Thinking) can identify
the “Entrepreneur” with the CI value of 100.00%.
Rule 2 is that the attribute-value “c” (Knows the
different urgency of elements of a problem) or “e”
(Makes feasible solutions for actions) of
competency A is a reliable indicator of the category
“Non-Entrepreneur” with the CI value of 100.00%.
Rule 2: {Ae, Ac} =>Entrepreneur =No; CI =
100.00%.
The result of analysis using the BAV displays a
surprising outcome. As shown in Table 3, in which
the “?” denotes BAV while the “?” signifies
non-BAV, the attribute-value “e” (Builds a
mechanism for talent development) of competency
H (Developing Others) can be said to definitively
distinguish the “Entrepreneur” from the “non-
Entrepreneur”.
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Table 3 Analysis result using the BAV
Object A B C D E F G H I J K L M N O P Q R S T U V W X
O1 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 1
O2 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 1
O3 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 0
O4 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 0
O5 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 0
O6 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 0
O7 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 0
3.4 Discussion
Although both large firm managers and small
firm entrepreneurs are capable and make certain
contributions to our society and economic
development, many people envy small firm
entrepreneurs and want to emulate them as a road to
wealth, fame, and freedom. It is an interesting
question of what factors lead to large firm managers
and small firm entrepreneurs taking different paths.
With reference to this question, [10] note that each
of the various schools of thought offers special
insights that help us to understand the nature of
entrepreneurship activity or the variety of
entrepreneurial features such as: personal value
system, risk-taking propensity, need for
achievement, creativity or innovativeness,
management knowledge and skills, entrepreneurial
leadership, and so on. However, each school of
thought explains only a portion of the truth.
Entrepreneurship activities or entrepreneurial
features can be grouped into a number of categories,
among them the following: knowledge and skills,
attitudes, values, traits, and personal characteristics.
These categories can then be integrated into an
entrepreneur competency model. This is because the
competency model includes measurable elements,
including patterns of knowledge, skills, attitudes,
behaviors, and other characteristics. With this in
mind, this study adopts the competency approach
and builds an entrepreneur competency model for
exploring the difference between small firm
entrepreneurs and large firm managers.
In fact, the application of competency measures is
able to differentiate high performers from average
performers. Additionally, it turns out the
entrepreneur competency model can differentiate
small firm entrepreneurs from large firm managers.
In this empirical study, the results of analysis using
the RST reveal that the “Entrepreneur” can be fully
identified by the attribute-value “b” (Weighs the
value of each elements of a problem) of competency
A while the “Non-Entrepreneur” can be fully
identified by the attribute-value “c” (Knows the
different urgency of elements of a problem) or “e”
(Makes feasible solutions for actions) of
competency A. This is a most meaningful finding,
showing that (1) with the use of RST, we can utilize
only few attribute-values to effectively recognize
the “Entrepreneur” or the “Non-Entrepreneur”,
rather than the entirety of 115 attribute-values; (2)
both Rule 1 and Rule 2 are involving the
competency A (Analytical Thinking) which may
regarded as the key competency to distinguish
whether a given individual is an “Entrepreneur” or
not. More importantly, although we often consider
that entrepreneurs are smarter than managers, the
findings of this study indicate that this is actually
not so. Attribute value “c” (Knows the different
urgency of elements of a problem) or “e” (Makes
feasible solutions for actions) for large firm
managers is a higher level attribute than “b”
(Weighs the value of each elements of a problem)
for small firm entrepreneurs. The findings,
incidentally accord with a cautionary note by [58].
They emphasize that a behavioral indicator at higher
level does not mean that a behavior is necessarily
better; rather, each role or job has an optimal point
on each scale.
This study also employs the BAV for the purpose
of further exploration. The results arrived at using
the BAV show that the attribute-value “e” (Builds a
mechanism for talent development) of the
competency H (Developing Others) can infallibly
distinguish whether a given subject is an
“Entrepreneur” or not. The findings agree with the
notion that entrepreneurs are social creatures and are
more capable of utilizing the human resource than
are managers. This may explain why a person with
lower school marks tends to be a small firm
entrepreneur while another, with higher school
marks, will become a large firm manager. The
determinant is, apparently, the predominance of
social over analytical skills: the ability to construct
devices or systems which foster talents both outside
and inside the enterprise – a social skill which
enables one to maximize one’s interpersonal
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influence and power.
From the above, some conclusions can be derived.
Firstly, we may conclude that the views of the
various schools of thought about the nature of
entrepreneurship activity or entrepreneurial features
can be incorporated into an entrepreneur
competency model. Next, through the use of a
combination of the RST and the BAV we can
uncover a deeper level of indicators for
decision-making. The findings of this study also
lead us to conclude that being a small firm
entrepreneur demands the ability to build a talent
pool, much more than the ability to think
analytically. It also suggests that a small firm needs
to be better at rapid and flexible response to the
changeable business world than does a large firm,
and that the success of a small firm is more
dependent on human networks and social relations.
Thus, if a large firm manager wants to become a
small firm entrepreneur, it appears he needs to place
less emphasis on methodical thinking and paper
work, and more on human networking.
4. Conclusions and suggestions
For the purpose of exploring the difference
between small firm entrepreneurs and large firm
managers, this study developed an entrepreneur
competency model based on a review of the
literature followed by systematically conducted
interviews with selected experts. This study is
presented as a test case for the extension of practical
applications of the RST and the BAV in the field of
entrepreneurship research, and it successfully
achieved the aim of finding out certain differences
between small firm entrepreneurs and large firm
managers.
Several studies have investigated the difference
between entrepreneurs and managers. [6] examine
differences in the decision-making processes
between entrepreneurs and managers in large
organizations. [60] conduct a comparison of
entrepreneurs, small business owners, and corporate
managers with special attention to the differences in
achievement motivation, risk-taking propensity, and
preference for innovation. [62] investigates the
different impact on innovation and risk-taking
between managers of large state-owned enterprises
and entrepreneurs of small privately-owned
enterprises. [61] perform a meta-analysis of
achievement motivation differences between
entrepreneurs and managers. This study differs
substantially from those mentioned above, not only
with regard to the research approach, but also with
regard to the research focus, objectives, and method
of analysis. The proposed competency model is a
synthesis of the views of varied schools of thought
about entrepreneurship activity or entrepreneurial
features, and this study use it, with the RST and
BAV methodologies, to explore the differences in
the range of competencies between small firm
entrepreneurs and large firm managers.
The findings of this study show that (1) using the
RST, the behavioral indicator “Weighs the value of
each elements of a problem” can be used to reliably
identify a small firm entrepreneur, while the
behavioral indicator “Knows the different urgency
of elements of a problem” or “Makes feasible
solutions for actions” can be used to identify a large
firm manager; (2) using the BAV, the behavioral
indicator “Builds a mechanism for talent
development” can definitively distinguish a small
firm entrepreneur from a large firm manager; (3) the
competency “Analytical Thinking” from the RST
and the competency “Developing Others” from the
BAV, are the key competencies which may be used
to determine whether a given individual is an
“Entrepreneur” or not; and (4) by using either the
RST or the BAV, we can effectively differentiate
whether a given subject is an “Entrepreneur” or not,
with reference to a very minimal number of
attribute-values (behavioral indicators).
Although each school of thought about
entrepreneurship activities or entrepreneurial
features has its own emphasis and unique point of
view, it is quite feasible, the author proposes, to
integrate them into an entrepreneur competency
model, with the possible goal of helping a person
learn to be an entrepreneur through the aid of
competency development. Using new
methodologies, such as the RST or the BAV, we
may blaze new trails in this endeavor. This study
clearly shows that, among 23 competencies, only
two of them – “Analytical Thinking” and
“Developing Others” are the essential determinants
when we wish to discriminate between a small firm
entrepreneur and a large firm manager. With regard
to the behavioral indicators, this study finds that the
small firm entrepreneur is excellent in “Builds a
mechanism for talent development” while a large
firm manager is good at “Knows the different
urgency of elements of a problem” or “Makes
feasible solutions for actions”. This reveals that if a
large firm manager wants to emulate a small firm
entrepreneur, the suggestion is to de-emphasize
methodical thinking and paper work, and to
undertake more human networking. The finding is
particularly valuable and important, because it
provides useful directions in terms of
entrepreneurship education and training for young
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS Wei-Wen Wu
ISSN: 1109-9526 286 Issue 6, Volume 6, June 2009
people, and offers insights that can help a large firm
manager to become a small firm entrepreneur or to
boost the probability of a start-up's success.
This pilot study reveals some meaningful facts,
but it must be admitted that the sample size is small
and is therefore of limited statistical significance.
However, the proposed model could be further
tested and extended. Additionally, based on the
study results, some propositions can be presented as
tentatively dependable such as: a large firm manager
is superior to a small firm entrepreneur in analytical
thinking; and a small firm entrepreneur is superior
to a large firm manager in developing others. As for
future research, possible directions are as follows:
refining the proposed model through more case
studies; improving the usefulness of the RST and
the BAV; and developing an entrepreneur
competency set that can effectively help a large firm
manager to become a small firm entrepreneur, given
that each role optimally requires its own
competency set.
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Appendix. Attributes and attribute values
A. Analytical Thinking:
a. Sees Causal Relationships of problems
b. Weighs the value of each element of a problem
c. Knows the different urgency of elements of a
problem
d. Realizes the process or procedure of
implementing problems
e. Makes feasible solutions for actions
B. Business Acumen:
a. Discovers business opportunities with initiative
b. Takes actions to practice business opportunities
c. Handles business analysis and management
d. Designs organization structures and systems
e. Innovates and implements business strategies
C. Client Service Orientation:
a. Understands the needs of external customers
b. Understands the needs of internal customers
c. Responds to the needs of external customers
d. Responds to the needs of internal customers
e. Gives satisfaction to both internal and external
customers
D. Commitment to Learning:
a. Pursues learning about business success by
oneself
b. Pursues learning about business success from
others
c. Pursues learning in single special field
d. Pursues learning in two special fields
e. Pursues learning in multiple special fields
E. Communication:
a. Expresses information or feelings properly
b. Recognizes intentions behind information or
feelings of counterparties
c. Employs communication skills or strategies
smoothly
d. Achieves two-way communications effectively
e. Achieves the purpose of communications
F. Conceptual Thinking:
a. Realizes the connections between elements of a
problem
b. Understands the key elements of a problem
c. Sees patterns or trends in a problem
d. Models the connections between elements of a
problem
e. Utilizes conceptual models to make performance
better
G. Order and Quality:
a. Shows concern for order in the surrounding
environment
b. Shows concern for clarity of roles
c. Checks process and accuracy of own work
d. Checks process and accuracy of others' work
e. Monitors own and others' work progress
M. Information Seeking:
a. Queries information initiatively
b. Seeks information enthusiastically
c. Investigates problems systematically
d. Discovers solutions to a problem
e. Continues research constantly
N. Initiative:
a. Meets only required performance
b. Takes actions to make performance better
c. Achieves extra performance
d. Accepts additional tasks
e. Accomplishes additional tasks
O. Innovation:
a. Makes thinking innovation
b. Makes technical innovation
c. Makes product innovation
d. Makes process innovation
e. Makes organization and culture innovation
P. Organizational Awareness:
a. Understands the value and strategy of an
organization
b. Understands formal rules of an organization
c. Realizes informal rules of an organization
d. Realizes non-written rules of an organization
e. Realizes the power relationships of an
organization
Q. Personal Motivation:
a. Pursue success for oneself
b. Pursue success for an organization
c. Services to a industry
d. Services to a country
e. Services to the world
R. Relationship Building:
a. Maintains pleasant working relationships
b. Makes non-working contact
c. Makes personal contact
d. Builds personal friendships
e. Achieves deep friendships
S. Results Orientation:
a. Works to meet performance standards
b. Sets challenge objectives
c. Achieves beyond expectation
d. Produces a little result
e. Produces a huge result
T. Self-Confidence:
a. Acts independently and boldly
b. Expresses oneself and criticizes others
c. Expresses oneself but does not criticize others
d. Expresses oneself and acts fiercely
e. Expresses oneself and acts moderately
U. Self-Control:
a. Maintains one’s self-control but suffers negative
influences
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS Wei-Wen Wu
ISSN: 1109-9526 290 Issue 6, Volume 6, June 2009
H. Developing Others:
a. Gives comfort and stimulation
b. Gives operational instructions
c. Gives theoretical instructions
d. Offers resource and support
e. Builds a mechanism for talent development
I. Empathy:
a. Listens to the concerns of others
b. Realizes the concerns of others
c. Responds to the concerns of others properly
d. Responds to the concerns of others and earns trust
e. Responds to the concerns of others and obtains
performance
J . Expertise:
a. Basic vocational abilities
b. Advanced vocational abilities
c. Excellent vocational abilities
d. Authoritative vocational abilities
e. Multiple vocational abilities
K. Flexibility:
a. Gets along with people objectively
b. Acts and talks moderately
c. Alters usual modes or procedures to fit a specific
situation
d. Adapts to changes rapidly
e. Adapts to changes rapidly and effectively
L. Influence:
a. Takes action once to influence others
b. Takes actions twice to influence others
c. Takes actions more than twice to influence others
d. Brings out a little impact and effect
e. Brings out great impact and effect
b. Maintains one’s self-control and keeps calm
c. Maintains one’s self-control and makes
counterattacks
d. Maintains one’s self-control and makes
constructive counterattacks
e. Maintains one’s self-control and comforts
others’ emotions
V. Team Leadership:
a. Knows merits and demerits of each team
member
b. Conducts meetings effectively
c. Builds a sensible performance system
d. Enhances morale of the team
e. Enhances achievement of the team
W. Verbal and Written Communication:
a. Makes oral stimulations
b. Makes touching persuasions
c. Makes affecting speeches
d. Writes something touchingly
e. Both speaks and writes satisfactorily
X. Whether is an entrepreneur or not?
0 =No,
1 =Yes.
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS Wei-Wen Wu
ISSN: 1109-9526 291 Issue 6, Volume 6, June 2009
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