Critically Evaluate the Role Psychological Theories Play in Our Understanding of Entrepreneurship

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Critically evaluate the role psychological theories play in our understanding of entrepreneurial study: Psychological theory has been used to better understand an individual’s willingness and ability to become a successful entrepreneur in society. It is widely recognised that entrepreneurs are a major source of economic growth and financial benefit for society; as such it is useful to understand the psychological traits and drivers behind a successful entrepreneur to encourage more people to become entrepreneurs for the benefit of society. There are two major psychological theories that are useful and also criticised in the understanding of entrepreneurship; these are the trait approach and the cognitive approach. The trait approach…show more content…
Entrepreneurs score highly in this trait; those that score high are far more likely to seek and exploit opportunities to create their own success. As such this principle contributes to the understanding of entrepreneurial behaviour; however in reality there is little supporting evidence that in practice there is a link between control and entrepreneurs. It is not enough to just have the belief of creating your own destiny, if you do not have the skills to exploit it. They need to have the innovative skills to be able to exploit them. Steve Jobs for example, was a successful entrepreneur because he was able to spot opportunities in the market, and with his technical skills and creative abilities he was able to produce a successful product to fill the gap. One personality driver of entrepreneurial behaviour is 'openness to experience'; this trait has been the focus of much research on entrepreneurs. Those that possess this trait have a curiosity for experiences, in which they can pursue their ideas creatively. Those individuals that score high in openness are motivated to seek new opportunities and engage heavily in self-examination, to encourage them to pursue ideas; these also tend to be more creative, as such would suit a role in entrepreneurship. This trait is believed to have a genetic component, therefore many believe that this proves some entrepreneurs are born, as opposed to made through socialisation. Richard Reed, Adam Balon and Jon

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