Personality Characteristics of Entrepreneurs and the Growth of Smes in Ghana

ABSTRACT

Why some entrepreneurs are more successful in business than others remains and influential question in small firm growth research. A common view held by most researchers is that firm growth is influenced by factors relating to the entrepreneur, specific firm characteristics and the business environment. Based on the concept of human capital and psychological theories, this study sought to test the influence of the personality characteristics of entrepreneurs on the growth of SMEs in Ghana. The main objectives of this study were; to identify the personality characteristics of entrepreneurs, determine the relationship between the personality characteristics of entrepreneurs and the growth of SMEs and to identify the personality characteristics of entrepreneurs that predict SMEs growth in Ghana. Consequently, the study adopted the personality characteristics of entrepreneurs proposed by Rauch and Frese (need for achievement, internal locus of control, self-efficacy, proactiveness and innovativeness), it was hypothesised that each of these personality characteristics of entrepreneurs positively influences the growth of SMEs. The study used a cross-sectional design and data was collected through the survey method. The approach was quantitative and purposive sampling was used to select 384 owner-managers of SMEs within the cities of Accra and Tema for the survey. Statistical techniques such as descriptive statistics, factor analysis and regression analysis were used to analyse the data. One –sample t-test was used to test the hypothesis. The study used sales as a measure of growth and was measured over a five year period. It was found that proactiveness, risk-taking and self-efficacy of entrepreneurs predict SMEs sales growth in Ghana. On the other hand, innovativeness, need for achievement and internal locus of control do not predict SMEs sales growth. To increase sales therefore, SMEs owner-managers must be proactiveness, take risk and be self-efficacious.