The Impact of the Entrepreneur's Personality on the Strategy-Formation and Planning Process in SMEs.

Abstract

The objective of this study was to explore the impact of the entrepreneur's character on the development of strategy in small- to medium-sized firms. While researchers have looked at entrepreneurial traits in order to explain business start-up and growth, little attention has been paid to the possible interactions between entrepreneurial types and the strategic choices they make. This study identified two main types of entrepreneurs, the pragmatist and the charismatic entrepreneur, which resulted in different patterns of strategic behaviour. The research suggested that different types of entrepreneurs faced different problems, and that their responses to crises varied. The study suggests that the charismatic entrepreneurs were forced to review their propensity to take risk, share power and involve more people in the decision-making process and this resulted in a more rational, planned approach to the strategy-making process. Financial planning became a priority for both types of entrepreneur.

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