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The people differ from each other is obvious. How and why they differ
is less clear and is an important part of the study of personality.
Personality, psychology addresses the questions of shared human
nature, dimensions of individual differences and unique patterns of
individuals.
In summery, in this way personality will mean how people affect others
and how they understand and view them selves as well as their
pattern of inner and outer measurable traits, and the person situation
interaction . How people affect others depends primarily upon their
external appearance (Height, weights, facial features, color, and
other physical aspects) and traits.
Personality Determinants
Personality Traits
Primary Traits
Introvert-Extrovert
Sensing-Intuitive
Thinking-Feeling
Judging-Perceiving
Sixteen Temperaments
SENSING TYPES INTUITIVE TYPES
I I
“STJ
Trustee “Conservator INFJ
SFJ INTJ
” ” “Author” “Scientist”
INTROVERTS
I I
“STP
Artisan “SFP
Artist INFP INTP
” ” “Questor” “Architect”
E E
“STP
Promoter “SFP
Entertainer ENFP ENTP
” ” “Journalist” “Inventor”
EXTROVERTS
E E ENFJ
STJ
“Administrator “SFJ
Vendor ENTJ
” “Pedagogue”“Field Marshall”
”
• Extraversion
• Agreeableness
• Conscientiousness
• Emotional stability
• Openness to experience
Machiavellianism
Self-esteem
Self-monitoring
Risk taking
Type A personality
Clearly, cognitive and personality tests are the most frequently used.
The one firm which did not use personality tests cited cost as the main
reason. Respondents were then asked about the approximate numbers
of people tested by them during the preceding year using personality
tests.
In particular, the result of the survey says that nearly two-thirds (64.4
per cent) of organizations surveyed never used personality tests, while
only 4 per cent claimed to use personality tests for all managerial
appointments. Further, 37 per cent used personality tests to assess
half or more candidates in 1989, compared with 12 per cent in 1984.
For managerial recruitment, 86 per cent of major French recruiters
used personality testing at some stage, and 29 per cent always used
these tests. For managerial recruitment, 86 per cent of major French
recruiters used personality testing at some stage, and 29 per cent
always used these tests.
It was argued that the users of these tests overstate the importance of
personality as a determinant of performance. So
Introduction
Pakistan Telecommunication Corporation (PTC) was established in
December 1990 to take over operations and functions from the
Pakistan Telephone and Telegraph Department. Its operations were
governed by the Pakistan Telecommunication Corporation Act 1991. At
the same time the Government of Pakistan (GOP) began to introduce
private participation in the sector and licenses were awarded for
cellular, card-operated payphones, paging and more recently, for data
communications services in the country.
Exclusivity on Domestic & International Fixed Line Services until 31st December
2002
Major Events
The Multan Region office presides by the General Manager. The PTCL
Multan comprises near about one thousand employees which are
attached different divisions. The non-gusseted employees are
approximately forty-eight thousands and gusseted are twelve to
thirteen thousand their BPS ranges from 16 to 22. There are also
employees which are employed on the contract. PTCL is the profitable
organization the main reason behind its success is the organization is
pretty very conscious and caring about their employees.
Our research also deals the factors of overall personality which are
significantly be considers in selection and recruitment process. PTCL is
very much conscious about recruiting the peoples as employees and
uses the Personality Job-fit Theory during selection and
recruitment. The nature of the organization although has
Technologically Operational Oriented, so the overall personalities of the
employee of Paknet are highly influence through Engineering and
Communication Technologies, that’s why the weight-age of the
Technical skill influence more then Human and conceptual skills.
The reason behind this strategy is that the organization has
Bureaucratic Structure (organic structure: Highly routine operating
tasks, work specialization, formalized rules and regulations, centralized
authority, narrow span of control and decision making that follows the
chain of command).
• Technical Skills
• Human 0r Interpersonal Skill
• Conceptual Skill
The devices which are used during the assessment of employees are
the Interviews, written tests and the Work Method and the most
important is the experience.
A heredity factor in PTCL doesn’t consider much more but only the
Technical skills. Heredity refers to those factors that were determined
at conception. Physical structure, facial attractiveness, gender
temperament, muscle, composition and reflexes and Biological
rhythmus are generally considered during assessment process.
These peoples from the both the Engineering & Operation Department
and Account departments are not very sociable, talkative and
assertive, so the overall dimension of their personality is Introverts.
The other dimension of the employees of this department is the
significant degree of agreeableness because provide the services the
customer in a cooperative passion and with trustworthy. They are also
conscientiousness people because they are persistent and
achievement oriented. They are the Emotionally Stable peoples
because they are calm and enthusiastic in their work. And also they
are very imaginative, artistic sensitive, and intellectuals. So they are
the people of less openness to experience.
Paknet Pakistan
Introduction
PTCL was running its Internet Division through its region by the name
of Public Data Network (PDN). On December 1999 the PDN region was
dissolved and all the assets and Liabilities were transferred to Paknet
Limited. Paknet made a fresh start with an Internet customer base of
6000 as of January 2000 and successfully achieved the target of its
first year business plan of 50,000 Internet customers. Currently Paknet
has a customer base of more than 1,30,000.
The devices which are used during the assessment of employees are
the Interviews, written tests and the Work Method.
Conclusion
This research logic is to measure the personality of employees. We
consider the Multi-dimensional aspect of Personality and check and
test of each dimension of personality by viewing departmental pattern
and then the whole organization. It is found that personality and
nature of the organization has significant impact over the employees of
the organization. Secondly the Heredity factors the environment and
the situation paid influence over the personality. We use some models
which were actually measure and assess the personality of individual.
These models or concepts are Primary Traits, Myers-Briggs Type
Indicator, The Big 5 Model. The issues which are consider in
selection employees are: the appropriateness of linear selection
models; the problem of personality-related self-selection effects; the
multi-dimensionality of personality; bias associated with social
desirability, impression management, and faking in top-down selection
models; and the legal implications of personality assessment in
employment contexts. Recommends by the practitioners and
researchers be cognizant of these issues in the use of personality tests
in employment decisions.
Hannu Littunen
The Authors
Hannu Littunen, University of Jyväskylä, School of Business and Economics Centre for Economic
Research, Jyväskylä, Finland
Abstract
Examines the characteristics of the entrepreneurial personality and the effects of changes in the
entrepreneur's personal relationships. According to the empirical findings, becoming an
entrepreneur and acting as an entrepreneur are both aspects of the entrepreneur's learning
process, which in turn has an effect on the personality characteristics of the entrepreneur. The
entrepreneur's drive to solve problems (= mastery) had increased, and control by powerful others
decreased since the start-up phase. Changes in the entrepreneur's relations with others were
also observed to have an effect on the entrepreneur's personality characteristics. The empirical
findings also show that as the number of co-operative partners decreased, control by powerful
others also decreased, and that, since the start-up phase, entrepreneurs whose personal
relations had increased also showed a clear increase in mastery.
Introduction
Starting up a new firm is very much an individual decision, which is why the individual's qualities
as an entrepreneur are central in the investigation of entrepreneurship. During the start-up phase
of a firm, the important characteristics an entrepreneur must have include innovativeness and the
will to act (Tibbits, 1979; Bird, 1989). Innovativity means that the entrepreneur must have the
ability to produce solutions in new situations. This is presumably linked with the entrepreneur's
abilities, attained through training and experience. The will to act, besides being in part the
product of experience, is probably connected with the entrepreneur's training and the resources
under his/her control. These factors shape the values and attitudes of the entrepreneur. They can
also be seen as factors bringing the entrepreneur closer to what he/she expects from life, or
causing these expectations to disappear.
The characteristics typical of a successful entrepreneur are the ability to take risks,
innovativeness, knowledge of how the market functions, manufacturing know-how, marketing
skills, business management skills, and the ability to co-operate (Casson, 1982). Caird (1988)
mentions a good nose for business, the desire to take risks, the ability to identify business
opportunities, the ability to correct errors effectively, and the ability to grasp profitable
opportunities as characteristics of an entrepreneur. Bird (1989) divides risks into five types, four of
which are clearly relevant to any potential entrepreneur: economic risk, risks in social relations,
risks in career development, plus psychological and health risks. The findings of Brockhaus
(1982) show that the preference for a particular risk type does not differ as between professional
managers and the general population, nor as between successful and unsuccessful firms.
The theories most commonly applied in research on entrepreneurship are McClelland's (1961)
theory of the need to achieve, and Rotter's (1966) locus of control theory. According to
McClelland's theory, individuals who have a strong need to achieve are among those who want to
solve problems themselves, set targets, and strive for these targets through their own efforts. The
theory suggests that individuals with a strong need to achieve often find their way to
entrepreneurship and succeed better than others as entrepreneurs. According to Rotter (1966),
the locus of control of an individual can be seen as either internal or external. An internal control
expectation refers to control over one's own life, where the results of one's actions are considered
to be dependent either on one's own behavior or on one's permanent characteristics. An external
control expectation refers to the kind of attitude which focuses on the actions of other people, or
on fate, luck or chance. According to Rotter's (1966) theory, the internal control expectation is
related to learning, and thus motivates and supports active striving. The external control
expectation, on the other hand, impedes learning and encourages passivity. An internal control
expectation is usually associated with entrepreneurial characteristics.
In Rotter's (1966) theory the individual's locus of control varies along the internal/external divide.
However, several researchers have proposed that "internal" and "external" should be studied as
separate dimensions. This new conception of locus of control treats internal and external control
as two independent dimensions; therefore different kinds of relationships may exist between
these two dimensions. Overall, external control may be viewed as either positive or negative
control. Positive external control supports and co-operates with personal control, increasing the
expectancy of success. Negative external control hinders or limits personal control, decreasing
the expectancy of success (Wong and Sproule, 1984). In Levenson's (1981) application (= LASS)
locus of control has three dimensions; which measure respectively an individual's belief in internal
control, in control by others, or in control by chance, fate, etc. That is to say, for Levenson,
external control can be interpreted as two different dimensions. His argument for this is that
control by other people can be seen as more predictable than, for example, that by chance, since
a person has, at least, the potential to affect it. Although Vesala (1992) has criticized Rotter's
(1966) hypothesis, in his opinion Rotter captures something essential from the viewpoint of an
entrepreneur, namely the belief in one's own potentiality for influencing events. However, other
relevant aspects from the entrepreneurial viewpoint, i.e. the belief in the relation between one's
own and other people's ability to influence events, and the effect of this relation on one's own
achievements, remain outside the hypothesis.
The business activity of a new firm is often developed as a part of the entrepreneur's personal life
strategy, as a means of earning a living, and is to a large extent characterized by the
entrepreneur's personality characteristics. From the point of view of the trait theory, McClelland's
(1961, 1965) hypothesis can be seen as describing the characteristics needed in
entrepreneurship. Economic risk, the power to decide due to economic commitment, and the fact
that personal income is dependent on the profit of the firm are factors which demand the personal
characteristics of an achiever from the entrepreneur. The locus of control theory looks from
various angles at the individual's ways of making sense of the social environment and the
knowledge gained in different situations. According to findings in several studies, a strong need to
achieve is related to targets and the desire to reach these targets, while the locus of control is
related to turning these thoughts into actions.
Time is a fundamental dimension, when studying the lives of individuals and newly established
firms (Bird, 1992; Butler, 1995). The aim of this follow-up study is to compare the motivation to
achieve and locus of control in the different phases of entrepreneurship. A central theme in
studies dealing with entrepreneurship is that the decision to become an entrepreneur is not
coincidental. Differences can be found in the values and attitudes of entrepreneurs. This
approach is common in studies focusing on the motives of entrepreneurs (McClelland, 1961,
1985). Differences can be found also in the growth environment and the experiences of the
entrepreneur (Gibb and Ritchie, 1982). According to study by Gibb and Ritchie (1982),
entrepreneurship can be wholly understood in terms of the types of situation encountered and the
social groups to which individuals relate. Their model assumes that individuals change throughout
life and that it is the individual's transactions in specific social contexts and reference groups that
shape the person. According to study by Chell (1986), the model developed by Gibb and Ritchie
is important in that it systematically documents the environmental factors which affect the
behavior of the established entrepreneur and consequently the growth of his or her business, but
it remains an entirely "situational" model, that is, it would appear to lose sight of the individual by
describing behavior entirely as a function of social influences (Chell, 1986).
Locus of control occupies a central role in Rotter's social learning theory (Rotter et al., 1972). In
social learning theory, a distinction is made between situation-specific and generalized
expectancies. In the context of entrepreneurship, situation-specific expectancies are defined as:
the experience of entrepreneurs in that specific situation, i.e. becoming an entrepreneur.
Entrepreneurs also develop relatively stable expectancies which are the result of generalizing
lifetime experiences in specific behavior sequences (Rotter, 1975). The first aim of this study is to
investigate whether becoming an entrepreneur involves such a profound change in the
entrepreneurial individual's life that it affects her or his personality characteristics. Based on these
theoretical starting points, the first research hypothesis is framed as follows:
To test the first hypothesis, following Rotter's (1966) theory, changes in the personality
characteristics of the entrepreneur - what she/ he has learned, and the degree of her/his
independence - are investigated. Until now, most studies have concentrated on the relationship
between business practice and entrepreneurship. The know-how of an entrepreneur is
particularly highlighted in the entrepreneur's ability to recognize and react to the changes
constantly occurring in the competitive environment of a firm (Gartner, 1985). Training, especially
in combination with the relevant experience and the tacit knowledge it builds, seems to be a
general determinant of the success of firms (Vesper, 1992). The nature of entrepreneurs' training
explains the survival of new firms. As a rule, those entrepreneurs who had training in the start-up
phase of their firms remained in business. Dominance and mastery was emphasized among
entrepreneurs who had training when the firm was in the process of being established. These
results can also be interpreted to indicate that training increases the potential for entrepreneurs to
influence the factors prevailing in the firm's environment (Littunen, 1997). The development and
the nature of the networking by firms and entrepreneurs has attracted increasing attention in
recent studies of entrepreneurship. According to Low and MacMillan (1988), the network theories
are increasingly being applied to entrepreneurship research. Sweeney (1987) has underlined that
networking is especially important in technological venturing. Entrepreneurial networks can be
categorized into two types derived from differential sources: informal and formal networks (Birley,
1985; Johannisson, 1985). Informal entrepreneurial networks consist of personal relationships,
families, and business contacts. Formal networks consist of venture capitalists, banks,
accountants, creditors, lawyers, and trade associations (Das and Teng, 1997). There are many
methodological advantages when studying entrepreneurial networks in small firms (Johannisson,
1998). First, the entrepreneur must be explicit about her/his personal network in order to become
recognized and able to acquire further resources. Second the network of all direct and indirect
linkages gives her/him access to various segments of the environment (Johannisson, 1998). The
social network also has a wider cultural dimension. Culturally induced values, attitudes and
behaviors are of prime importance in explaining the nature of relationships (Johannisson and
Spilling, 1986; Szarka, 1990). An entrepreneur acts in interaction with the environment and when
personal networks decrease or increase markedly, it is possible that such changes may also
influence the motives, values, attitudes or personal characteristics of an entrepreneur. However,
the linkages are not clear. In testing the hypotheses concerning personal networks, changes in
the "microlevel" personality characteristics of the entrepreneur are related to "macrolevel"
changes in social relations (Carsrud and Johnson, 1989). Taking these theoretical considerations
into account, it is important to study how personal networks influence the characteristics of the
entrepreneurial personality. The hypotheses concerning the informal networks of the entrepreneur
are formulated in this study as follows:
H3: A decrease in co-operation between entrepreneurs decreases the control of powerful others.
H4: An increase in the number of the entrepreneur's personal interest networks improves the
achievement motivation.
In the test of the second hypothesis, the effects of the entrepreneur's professional support system
on her/his personality characteristics are investigated (Hisrich, 1990). In the third hypothesis, the
control of powerful others is explained in terms of social relationships (Wong and Sproule, 1984).
The importance of personal relationships in small firms lies particularly in the fact that they act as
an entrepreneur's safety net and resource bank (Johannisson and Spilling, 1986). Taking this
point of view, the fourth hypothesis is tested by investigating whether an increase in an
entrepreneur's personal interest network has an effect on her/his achievement motivation.
Measures
In this study, the entrepreneur's achievement motivation was measured by four different
dimensions, each of which consisted of four different items: the work ethic, the pursuit of
excellence, mastery and dominance (Cassidy and Lynn, 1989). The entrepreneur's locus of
control was measured by three different dimensions (Levenson, 1981): internal attributing,
chance attributing, and powerful others. In this study, the personality characteristics of the
entrepreneur were measured on the basis of interviews carried out during the start-up phase of
the firm in 1992. The measurement was repeated with the same items during the fifth phase of
the follow-up study in 1996. In addition, variables of the entrepreneur's personal network were
calculated in 1992 and in 1996. The entrepreneurial personality measures are explained in
Appendix, Table AI and the personal network variables are explained in Appendix, Table AII.
Below, the data used are described, and the differences between the entrepreneur's personality
measurements are compared by means of a t-test. Following this, the effects of changes in
personal networks on the entrepreneur's personality characteristics are investigated.
Data
The subjects were firms in the metal industry and business services which had started up in 1990
in Finland. The data of the follow-up study were collected through interviews, the basic material
consisting of 138 metal industry and 62 business services firms. The entrepreneurs were
interviewed on five occasions during the years 1992-1996. The present study concentrates on
123 functioning firms[1].
The firms under scrutiny were mainly small firms, heavily based on the contribution of the
entrepreneur himself and his/her family. This was of great importance for the implementation of
the study. The bond between such a firm and the entrepreneur is strong. For one thing, the
strategy of the firm has been chosen by the entrepreneur. The things in life which the
entrepreneur considers to be worth striving for are also readily reflected in the firm's activities.
About 60 per cent of the firms studied employed less than five persons, the rest were firms with
more than five employees. The emphasis in the interview material was on metal product and
engineering firms. Over 45 per cent of the entrepreneurs included in the study had no higher
basic education than elementary school. The majority of the entrepreneurs had their background
in small or medium-sized firms, which is reflected in the structure of the firm adopted in the new
firm's start-up process. The firms typically founded in Finland are of the traditional small type. The
entrepreneurs of small firms become increasingly aware of the need to operate their personal
networks more strategically, for example creating more diverse and weak ties in order to be able
to cope with a complex, globalized market (Johannisson, 1998).
Findings
Entrepreneurship has been defined in many different ways (e.g. Brockhaus, 1976; Casson, 1982;
Wärneryd, 1988). In this study, entrepreneurship means activities connected with owning and
managing a business firm (Brockhaus, 1976). Achievement motivation and the locus of control
are psychological factors which have been presumed to explain success as an entrepreneur, and
to differentiate between entrepreneurs and other people (Aldrich and Zimmer, 1986; Brockhaus
and Horwitz, 1986; Chell et al., 1991). To investigate the various dimensions of achievement
motivation and locus of control, a sum variable was formed from a number of different items
(Table I).
The investigation of the reliability coefficients of the sum variables showed that not all the scales
were totally internally consistent. In particular, the scale describing internal attribution was not as
consistent in the measurement of the fifth phase as during the interviews in the start-up phase. A
correlation study carried out together with the investigation of the reliability coefficients showed
that the entrepreneurs had different views during the second phase about the items "when I make
plans, I am almost certain to make them work", and "I can pretty much determine what will
happen in my life" if compared to their views in the interviews during the start-up phase. At the
start-up of a firm, the belief in one's own power to affect the execution of one's plans was stronger
than during the sixth year of functioning. The execution of plans was connected to the start-up
phase, which greatly changes the life situation. In the second measurement of personality
characteristics, the execution of plans was connected with other plans (e.g. the development
plans of the firm), which do not necessarily bear as strong a relation to the entrepreneur's control
on one's life as the decision to start a firm. The measure of internal attribution is excluded from
the following tests of the hypotheses because of its low reliability.
Emphasis on the drive to solve problems is important for the success of the start-up phase and
increases the firm's chances of surviving during the critical operational phase (Littunen et al.,
1998). The entrepreneurs in 1996 stressed mastery even more than at the start-up phase (Table
I). According to Rotter (1966), control expectation is connected to learning, so that an internal
control expectation motivates and supports active striving. An external control expectation, on the
other hand, hampers learning and encourages passivity. According to the findings, the external
control expectations (control by other people) of the entrepreneurs had decreased significantly
since the start-up phase. This can also be interpreted as an increase in the independence of the
entrepreneurs brought about by their entrepreneurship (Table I).
Mastery increased and attribution to other people decreased in the follow-up measurement
among the entrepreneurs who had had no previous experience. The decrease in attribution to
other people can be interpreted according to Rotter's (1966) theory as being caused by the
learning of the new entrepreneurs (Table II). Thus the results of this study support the view of the
contingency theory that a change in life (= entrepreneurship) shapes to some extent the
characteristics of the entrepreneur, and thus the empirical results support the acceptance of the
first hypothesis.
The characteristics of the entrepreneur and the environment
The entrepreneur's mastery had increased in cases where the co-operation between firms had
remained unchanged during the study period. The results of the empirical study support the
rejection of the second hypothesis, because there were no changes between the two
measurements in the personality characteristics of the group of entrepreneurs who had increased
their co-operation. Thus, changes in the amount of co-operation made no difference to the
entrepreneur's achievement motivation (Table III).
According to the third hypothesis, the control of powerful others is explained in connection with
social relationships (Wong and Sproule, 1984). At the same time it was hypothesized that
changes in the environment would cause changes in the level of co-operation between firms.
According to the empirical results, in the group of those who had decreased their co-operation,
the control of others had also decreased. The results support the acceptance of the third
hypothesis regarding decreased co-operation. However, at the same time there were no changes
in the group "increase in co-operation". This result could be explained by the personal networks,
which may have decreased at the same time in this group. Thus the level of control by powerful
others had not changed in the group "increase in co-operation" (Table IV).
Conclusions
In this study, the characteristics of the entrepreneur's personality were measured during different
phases of entrepreneurship, and the effects of changes in the entrepreneur's personal
relationships on the characteristics of the entrepreneur's personality were studied. The subjects of
the study were 123 entrepreneurs, who were interviewed five times during the period 1992-1996.
It was noted that the entrepreneur's initial activities during the start-up period, and her/his earliest
actions as an entrepreneur were part of the entrepreneurial learning process, which had effects
that also extended to the personal characteristics of the entrepreneur. In a changing action
environment, changes in the entrepreneur's interrelationships were also seen to affect the
entrepreneur's personality characteristics.
To test the first hypothesis, changes in the personality characteristics of the entrepreneur were
measured. According to the empirical results, mastery and powerful others increased during the
study period. A decrease in the external locus of control can be interpreted according to Rotter
(1966) as a result of the entrepreneur's learning and becoming more independent. According to
the second hypothesis, an increase in co-operation increases the entrepreneur's achievement
motivation. The empirical results did not support this, since the group of those who had increased
their co-operation showed no differences in their achievement motivation.
To test the third hypothesis, control by powerful others was related to the degree of co-operation
between entrepreneurs. According to a study by Wong and Sproule (1984), powerful others are
seen as co-operative partners. The empirical results showed that both the number of co-operative
partners and control by powerful others had decreased. The results thus support the acceptance
of the third hypothesis regarding a decreasing in co-operation. However, the level of powerful
others had not changed in the group "increase in co-operation", which could be explained by
changes in others' personal networks in this group.
The fourth hypothesis stated that greater versatility by the partners also decreased the degree of
control by powerful others. The fourth hypothesis stated that the versatility and abundance of the
entrepreneur's personal interest networks increases the resources of entrepreneurship because
they fill possible gaps in the entrepreneur's training and experience (Johannisson and Spilling,
1986). Here the resources of entrepreneurship were related to achievement motivation. According
to the empirical results, the mastery of those entrepreneurs whose interrelationships had
improved during the study period had also clearly improved.
The hypotheses dealing with social relations can be interpreted in another way via the importance
of causality. In this connection it is possible to ask, for example, if the decrease in control by
powerful others increased the independence of the entrepreneur and the entrepreneur's wish to
decrease the amount of co-operation between firms (Rotter, 1966). It is justified to ask questions
dealing with social relations because Rotter's (1966) theory is above all a theory focusing on
social learning, despite the fact that the locus of control is regarded as separate from social
relations. Rotter's (1966) theory does not offer any means of explaining the connection between
locus of control and social relations.
However, we need further information on these relationships between the personal networks and
personality characteristics of the entrepreneur before we can interpret all of these findings of this
study. For example, the work ethic and mastery had increased in the group "no changes in the
entrepreneur's personal interest networks". Correspondingly, chance and powerful others had
decreased at the same time. It is worth investigating what kind of environmental factors may have
influenced the personal characteristics of the entrepreneurs in this group. Moreover, as the
findings of this study point out, entrepreneurship and the personal characteristics cannot be
studied separately from the features of the environment. In the personal characteristics of the
entrepreneur, it was only dominance which showed no changes during the follow-up period.
Please also see Table AI and Table AII in the Appendix.
Note
1. A total of 43 of the firms in the follow-up material have closed down, and 34 firms
refused to give interviews during the various follow-up phases. Moreover, the analysis
does not include firms in which the entrepreneur has been replaced during the course of
the different research phases. The results have been weighted with the weight factors
calclulated from the basic data set and random samples of the study.
Table I. The differences between the dimensions describing achievement motivation and locus of
control during 1992 and 1996
Table II. Differences between those who had previously been entrepreneurs and those who had
no previous experience
Table III. Differences in achievement motivation and locus of control following changes in co-
operation between firms during the years 1992-1996 (means and the significance of t-test)
Table IV. Differences in achievement motivation and locus of control following changes in the
entrepreneur's personal interest networks during years 1992-1996 (means and the significance of
t-test)
Table AI. Personality sum variables used in this study
Table AII. Variables of personal interest networks
References
Aldrich, H, Zimmer, C, 1986, "Entrepreneurship through social networks", Sexton, D.L, Smilor,
R.W, The Art and Science of Entrepreneurship, Ballinger, Cambridge, MA.
Bird, B, 1992, "The operation of intentions in time: the emergence of new venture",
Entrepreneurship Theory and Practice, 17, 1, 11-20.
Birley, S, 1985, "The role of networks in the entrepreneurial process", Journal of Business
Venturing, 1, 107-17.
Brockhaus, R.H, 1982, "The psychology of the entrepreneur", Kent, C.A, Sexton, D.L, Vesper,
K.H, Encyclopedia of Entrepreneurship, Prentice-Hall, Englewood Cliffs, NJ, 39-56.
Butler, R., 1995, "Time in organizations: its experience, explanations, and effects", Organizational
Studies, 16, 6, 925-50.
Caird, S, 1988, "A review of methods of measuring enterprising attributes", University Business
School, Durham.
The Authors
Abstract
Despite widespread evidence of low predictive and construct validity, personality testing is
increasingly being used for the selection of managers. Notes that selection practices based on
personality testing are not embedded in an explicit theory of performance. Based on available
research evidence it is argued that personality is likely to play a relatively minor role as a
determinant of managerial performance. Presents results from a small survey of New Zealand
recruitment consultants to show that personality testing is widespread in managerial selection,
and that there is a tendency to overemphasize the importance of personality as a determinant of
performance. This may be one reason for the ascendancy of personality testing in selection.
Makes suggestions for improving the ways in which such tests should be used in selecting
managers.
Introduction
The late 1980s and early 1990s has witnessed an upsurge in the use of testing in occupational
selection and, more especially, the use of personality tests. In this article we document something
of the level of the use of personality tests in managerial selection, speculate on some of the
reasons for their popularity, and then place personality testing within the context of a theory of
performance in organizations. In this we argue that personality is only a relatively minor
determinant of managerial performance; that, even if we can successfully overcome the
measurement problems in personality testing, our ability to predict future performance from the
results of personality tests will be marginal at best. Finally, we make some suggestions for ways
in which personality testing can be more effectively used in selection.
Changing Patterns in the Use of Personality Testing
The available evidence suggests that occupational testing, in general, and personality testing, in
particular, are increasing in popularity[1,2]. In this article, we focus on the use of personality
testing in managerial selection. A study by Robertson and Makin[3] presented survey findings of
the techniques used for managerial selection in 108 organizations in Great Britain. The results
showed that, while large organizations were increasingly using assessment centre-type exercises
and biodata, very few were using psychological assessment. In particular, nearly two-thirds (64.4
per cent) of organizations surveyed never used personality tests, while only 4 per cent claimed to
use personality tests for all managerial appointments. Overall, 36 per cent of organizations used
personality tests only for managerial selection, and 12 per cent of the organizations used them
with half or more of the applicants assessed.
By contrast, five years later, Shackleton and Newell[1] found a sharp increase in the use of
personality testing as they compared the managerial selection patterns of British and French
firms. In 1989, only 36 per cent of firms claimed never to use personality tests, compared with 64
per cent of non-users in 1984. Further, 37 per cent used personality tests to assess half or more
candidates in 1989, compared with 12 per cent in 1984.
Both in 1984 and 1989 the use of personality tests was more prevalent among larger firms.
Companies recruiting over 100 managers per annum used personality tests over 70 per cent of
the time, while smaller firms (recruiting under ten managers per annum) used such tests only 35
per cent of the time[1].
Of interest in Shackleton and Newell's study are the comparisons between British and French
practices. For managerial recruitment, 86 per cent of major French recruiters used personality
testing at some stage, and 29 per cent always used these tests.
At present, there is little evidence for New Zealand regarding the use of personality testing in
managerial selection. In the 1970s, Hesketh[5] reported widespread use of the 16PF (16
Personality Factor) by management consultants and government agencies and, a year later,
Bull[6] cautioned against the use of the 16PF in selection.
In a small-scale survey conducted in 1986, Dakin and Armstrong[7] observed only limited use of
testing in New Zealand for personnel selection. Since then, however, informal observation
suggests that the use of testing has increased dramatically, both for selection of new employees,
for purposes of promotion, and, sadly, for retrenchment. The reasons for this growth are much the
same in New Zealand as those noted by Hicks[2] for Australia:
In order to explore the use of personality testing in managerial selection, a small-scale interview
study was conducted in Christchurch during August 1991. Our aim was not so much to identify if
the same usage trends exist in New Zealand as elsewhere, as to examine the reasons for, and
mode of, usage. The survey restricted itself to consulting firms engaging in managerial selection.
New Zealand is somewhat unusual in the Western world for the proportion of managerial
positions filled through search firms. Although many firms undertake their own managerial
selection, by concentrating on search firms we are capturing a sizeable proportion of all
managerial appointments made.
Of the 29 personnel or management consulting firms listed in the Christchurch Yellow Pages,
initial enquiries revealed that 12 undertook significant management recruiting. Eleven of the 12
firms reported that they employed qualified (but not necessarily registered) psychologists.
Accordingly, interviews were arranged with practising psychologists or consultants in each firm.
Respondents were first asked if they used testing in selection and, if so, the frequency with which
different types of tests were used. Table I shows the types of tests used.
Clearly, cognitive and personality tests are the most frequently used. The one firm which did not
use personality tests cited cost as the main reason. Because they were selecting only a few
managers each year, they felt that the costs of using a psychologist and test purchase could not
be justified.
A further question probed the particular types of cognitive and personality tests currently
employed. Table II shows the results.
In use by 50 per cent of the recruitment consultants, the ACER's BL/BQ was the single most
frequently used cognitive test. Of the personality inventories, usage is spread evenly across the
16PF, the OPQ and the CPI. We are aware of the occasional use of other cognitive, special
aptitude and interest tests by a number of consultants, but the focus of our attention lay with
personality testing.
Respondents were then asked about the approximate numbers of people tested by them during
the preceding year using personality tests. Table III presents the results.
Of interest in these results is the extent of testing in a relatively small urban centre; conservatively
some 2,000 incidents in 1991 with over 1,200 using the 16PF. Further, respondents reported that
nine (75 per cent) of the 12 firms used personality tests for all short-listed candidates.
Further questioning demonstrated that the use of these tests is partly client-driven. Ten of the
firms reported that clients sometimes requested the use of particular tests.
This growing usage requires explanation. One reason is that such tests are now marketed in a
much more active fashion by commercial test producers. The tests are treated as another
consumable, attractively presented and subjected to the same marketing ingenuity as other items
of mass consumption. In this we concur with Hicks's observations of Australian trends. Of lesser
importance in New Zealand is the impact of fair employment legislation. But, most importantly,
one would like to believe that the growing popularity of personality testing is predicated on new
insights about validity and predictive power. Have we, in the past decade, experienced a sudden
jump in the validity of these tests which would account for their popularity?
Disappointingly, the published research on the validity of personality testing for personnel
decision making gives little confidence about their predictive validity. The early reviews of Ghiselli
and Barthol[8] and Guion and Gottier[9] indicated that the validities of personality tests were
relatively low. Ghiselli and Barthol[8] reviewed 153 studies yielding a mean coefficient of only
0.14, a result replicated by Guion and Gottier[9], although Ghiselli[10] found an average
correlation of 0.21 between personality measures and ratings of managerial performance.
Ghiselli's conclusion was that personality tests are of only moderate value in predicting the level
of proficiency likely to be attained by professional managers.
A meta analysis of validity studies published between 1964 and 1982[11] showed continuing low
validities of personality measures with average validities of 0.206.
However, more recent research has examined the validity of personality tests more closely.
Barrick and Mount[12] suggest that, at the time of the earlier studies, no well-accepted taxonomy
existed for classifying personality traits. Consequently, they argue, it was not possible to
determine whether there were consistent, meaningful relationships between particular traits and
performance criteria in different occupations. By using an accepted taxonomy (the "big five"
personality dimensions - extroversion, emotional stability, agreeableness, conscientiousness and
openness to experience), they were able to show that there are differential relationships between
personality dimensions and performance criteria.
This finding was more important than the overall validity of personality measures which was found
to be relatively low. The result highlighted the limitations of trying to determine the overall validity
of personality tests as predictors. Furthermore, these results indicate that, given the need to align
personality traits with different occupational requirements, a likely reason for the low validity of
personality tests is that current test batteries measure the wrong things. Nevertheless, even in
Barrick and Mount's research, validities rarely rise above 0.20. For managers, as expected,
scales testing for overall sociability (extroversion) yielded the highest validities.
Similar conclusions were reached by Day and Silverman[13]. They suggest that personality
variables are useful predictors of job performance when carefully matched with occupation and
organization. They conclude that specific, job-relevant aspects of personality are significantly
related to ratings of job performance beyond levels which can be predicted by cognitive ability
alone. Through their incremental validity, personality tests can improve on the base rates of
cognitive selection strategies. To some extent, these results provide confirmation of Guion and
Gottier's claim that "in some situations, for some purposes, some personality measures can offer
helpful predictions"[9, p. 159].
Overall, this literature would exhort us that, if personality testing is to be helpful, it is incumbent on
the employer to identify first characteristics of the job which are important, then identify
personality traits which are relevant to those characteristics, and, finally, place greatest weight on
those scales (discounting others) when interpreting test results. Our experience is that this is
rarely done in practice, with personality profiles being interpreted as a whole, after the fact, and
with extreme results (on any scales) becoming the focus of attention in interpretation.
Further, there have been some developments in exploring the "fakeability" of personality tests,
with Furnham[14] reporting that standard personality profiles are not so susceptible to faking as
was previously thought.
Although some steps have been taken in personality assessment as a discipline - in differential
test use, rather than improvement of the instruments themselves - it seems to us that these
improvements are hardly sufficient to warrant such a dramatic upsurge in their use. At best, even
with differential analysis of test results, validities are rarely obtained which exceed 0.25,
accounting for about 6 per cent of variance in job performance. Nevertheless, if this 6 per cent is
incremental in nature (adding to the validity of other selection practices), then it provides
justification for personality testing. However, given these levels of validity, one would be surprised
if the weight assigned to personality test results was equivalent to the weight assigned to other
more valid predictors (cognitive testing, for example).
One of the central points made by defenders of personality testing[15] and by respondents to our
survey is that personality tests are used only as one of a number of selection devices.
Consequently, in the survey we attempted to discover the weight placed on personality testing
relative to other selection criteria. Respondents were asked whether personality tests were (1)
"much more important than"; (2) "more important than"; (3) "equal in importance to"; (4) "less
important than"; or (5) "much less important than" the criteria in Table IV.
A rating of 1 indicates that personality tests are much more important; a rating of 3 indicates
equal importance, and a rating of 5 indicates that personality tests are much less important. In
general, personality tests are seen as less important than all other criteria with the exception of
age.
Concomitant with the growth in the use of personality tests has been a growing and sometimes
acrimonious debate about the merits of these tests, mainly between those with vested
commercial interests in personality testing. Blinkhorn and Johnson[16,17] have argued that the
evidence for the predictive validity of personality tests is frequently overstated and incorrectly
assessed. Further, their research indicates little evidence of enduring relationships between
personality test scores and measures of success at work - even for the best personality tests.
They propose that the correlations offered by various researchers and publishers of tests are
"well within the bounds of what chance might throw up"[16, p. 672].
Central to this debate is concern about the relative merits of ipsative and normative
measurement. Because of faking problems, ipsative measurement has become increasingly
popular in personality testing. Critics of ipsative measurement argue that, although psychological
benefits are to be reaped from the use of ipsative questionnaires, they cannot be used for
comparing individuals across scales[18,19], and therefore they are inappropriate in selection[20].
Advocates of ipsative measurement suggest that this criticism lacks a degree of both balance and
realism[21]. They argue that ipsative questionnaires provide a useful alternative to norm-
referenced questionnaires and their inherent fakeability, and suggest that any scaling technique
has some inherent bias.
Other research comparing the reliability and validity of normative and ipsative approaches
indicates that there is little difference between the two[22].
1 At best, the validities of personality assessment are much lower than for other forms of
objective assessment (although, if they are uncorrelated with other more valid predictors,
their use may still be justified).
2 A significant weight placed on personality testing misses the extent to which personality
can contribute to performance.
A Model of Performance
Personnel selection is primarily concerned with the prediction of performance at work. Implicit in
the use of personality testing is the assumption that personality traits are important determinants
of performance; that variations in performance are related to variations in personality. Further, the
linkage between personality and performance is based on the premiss that there are relatively
stable differences in personality and that these differences determine how individuals will perform
in different situations. Referred to as the "trait position" in the personality psychology literature,
this view draws on the work of Bowers[23], Epstein[24], Hogan et al.[25] and Stagner[26].
However, the trait position has been questioned by other personality psychologists. A contrary
view, referred to as the "situationist position", contends that the situation and its stimulus
characteristics largely dictate behaviour. Mischel[27], for instance, notes that behaviour related to
a trait in one situation rarely correlates highly with other behaviour related to the same trait in
other settings, and that scores on trait measures correlate minimally with behaviour in specific
situations. An interactionist perspective which views behaviour as a joint function of the person
and the situation has attempted to resolve the trait-situation controversy[28] but, as Fiske[29] and
Schweder and D'Andrade[30] contend, even cross-situational consistency in behaviour is not
sufficient to warrant the use of broad trait measures in personality psychology.
While personality psychologists rooted in the trait position have overstated the importance of
personality as a determinant of performance, others outside the personality psychology literature
have adopted a distinctly interactionist perspective. Reviewing the literature on personnel
selection and placement, Hakel[31] notes that models of performance have moved beyond simple
assertions such as behaviour = f (person, environment) and performance = motivation x ability to
incorporate individual, organizational, and environmental factors.
In general then, at the individual level, performance may be driven by preferences for behaving in
particular ways and by the individual's ability to perform. Personality tests measure (like interest
tests) the individual's preferences. Existing results suggest that ability is a much better predictor
of performance than preference. Not surprisingly, one's preference for behaving in a particular
way does not necessarily predict one's eventual performance. Simply because I prefer to be
sociable does not necessarily mean that I will be able to act in a sociable fashion. Conversely,
people with high levels of social skill may prefer not to exercise their ability. On logical grounds it
is not surprising that personal style and preference are a less effective predictor than ability.
• Context. The resultant execution of some task is, in turn, constrained by:
o - the nature of the task;
o - social factors;
o - organizational factors;
o - evaluation: the way in which significant others evaluate and reward or punish
the resultant behaviour.
We sought to explore perceptions of this issue among the responding consultants by asking them
to estimate the extent to which, in their view, individual and contextual factors contributed to
performance. The question was posed as follows.
In your experience to what extent does work performance depend on context, and to what extent
on the person? Would you please allocate 100 points between:
While there is some variability between responses, the responses are remarkably consistent. The
consultants appeared to identify readily with the question, which sparked considerable
discussion. The interesting result here is that personal characteristics (personal style and ability)
were considered much more important than the influence of context. A person's performance was
thought to be approximately 70 per cent determined by their own characteristics, and only 30 per
cent by contextual factors.
This result contrasts with the growing consensus in the literature that contextual factors are as
important as, if not more important than, personal factors, as determinants of performance. This
is neatly summarized in the interactionist view of personality traits as conditional probabilities that
a particular action will be evoked by a particular environmental state[33]. The implication of this
for selection is that any selection procedure must specify contextual features of a job before
specifying individual traits and abilities for selection. In other words, personality-testing
procedures must be able to specify situational conditions of a job before choosing a set of
desirable personality traits.
This view has two implications for personality testing in managerial selection:
1 Personality tests should be grounded in context. Rather than asking people how they
prefer to behave in general, they should be asked how they prefer to behave in specific
contexts. A useful personality test may vary the nature of the contexts.
2 While it may be feasible to specify contexts for routine, non-managerial jobs, for most
managerial jobs, it is almost impossible to specify exactly the situational factors which a
potential incumbent is likely to encounter. A review of the managerial work literature
supports our view.
Hales[34] identified four themes which characterize managerial work: variation and contingency;
choice and negotiation; pressure and conflict; and reaction and non-reflection[35]. Research on
managerial work supports the view that managerial jobs are characterized by brevity and
fragmentation[36,37]. While much of the managerial work literature is based on the activities of
general managers[38] and chief executives[37], it has been argued that middle managerial work
roles may differ from these only in terms of emphasis given to selected activities. Mintzberg[37]
has argued that, at lower levels of the organization, work is more focused, more short-term in
outlook, and the characteristics of brevity and fragmentation are more pronounced. A study by
Martinko and Gardner[39] investigated the relationship between managerial behaviour,
performance, and environmental and demographic variables. Although their study supported
earlier conclusions regarding the brief, varied, fragmented and interpersonal nature of managerial
work, there was little support for the proposition that managerial behaviour is related to
performance. On the other hand, environmental and demographic variables were found to be
related to managerial behaviour.
There are two significant implications of the managerial work literature for managerial selection
practices. First, given that managerial work is brief, varied, fragmented and interpersonal in
nature, contextual features of a specific managerial job can be specified only in very general
terms. Second, since managerial jobs provide considerable choice to the role incumbent in terms
of managerial behaviour, detailed specification of the context has limited value. Taken together,
these imply that it is difficult to specify a set of desirable personality traits for managerial jobs
except in very general terms. Consequently, the role of personality in managerial selection is
open to question. Selection procedures using personality testing tend to overstate the importance
of personality as a key determinant of performance.
We hesitate to argue that personality tests have no place in managerial selection. However, given
the present state of the technology, it is advisable that they be accorded less weight than they
currently enjoy. The challenge for selection researchers is to seek to improve the validity of such
instruments by some of the following means:
• Seeking to measure the probability of success, given the environment or context. That is,
some contexts are probably more conducive to success than others. In order to
understand the true validities of particular selection methods, we need to have a better
understanding of the base rate of success. For example, one Christchurch firm went
through three highly-qualified general managers in one year, apparently because of the
inability of the owner to trust them. In that firm, the probability of a successful
appointment was low.
In this context it may also be wise to change our ideas about reliability in personality
measurement. Instead of assuming that personality is a fixed quantity which never changes (a
requirement of reliability measures), we should be more interested in "style flex and flux". Many
people's personal style is variable from context to context - it is not a given.
This article began with the observation that the use of personality testing in managerial selection
has grown over the last ten years. An informal survey of recruitment consultants in Christchurch
attests to this widespread usage of personality tests. It was argued that the users of these tests
overstate the importance of personality as a determinant of performance. We have drawn from
the personality, managerial work and performance literatures to argue that:
• unless contexts of behaviour are specified in advance, personality tests have limited
relevance in selection; and
• for most managerial jobs, contexts cannot be accurately predicted or specified.
Taken together, the implication for managerial selection is clear. Selection of people for
managerial jobs cannot be based largely on personality test results. The article concludes with
some ways in which personality testing can complement other selection procedures.
References
1, Shackleton, V., Newell, S., "Management Selection: A Comparative Survey of Methods Used in
Top British and French Companies", Journal of Occupational Psychology, 64, 1, 1991, 23-36.
2, Hicks, R.E., "Psychological Testing in Australia in the 1990s", Asia-Pacific Human Resource
Management, 29, 1, 1991, 94-101.
3, Robertson, I.T., Makin, P.J., "Management Selection in Britain: A Survey and Critique", Journal
of Occupational Psychology, 59, 1, 1986, 45-57.
4, Vaughan, E., McLean, J., "A Survey and Critique of Management Selection Practices in
Australian Business Firms", Asia-Pacific Human Resource Management, 27, 1, 1989, 20-33.
5, Hesketh, B., New Zealand Institute of Personnel Management Survey on Testing in Industry,
New Zealand Institute of Personnel Management, Wellington, 1973.
6, Bull, P.E., "Should the 16PF Be Used in Personnel Selection? ", The New Zealand
Psychologist, 3, 1, 1974, 11-15.
7, Dakin, S.R., Armstrong, J.S., "Predicting Job Performance: A Comparison of Expert Opinion
and Research Findings", International Journal of Forecasting, 5, 2, 1989, 187-94.
References
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