Thai Entrepreneurs: An Empirical Investigation of Individual Differences, Background and Scanning Behavior

Abstract

INTRODUCTION Thailand, a country of approximately 60 million people, is roughly the size of the state of Texas. It is properly classified as a newly industrialized country (NIC) with significant natural resources. Thailand's economy is dynamic with a Gross Domestic Product of $323 billion and a 7.8% growth rate in 1993. The trade and current account deficits have fallen and the bulk of recent imports has been capital equipment--suggesting an economy poised for further growth (National Trade Data Bank, 1994). The economic jewel in Thailand's crown is the capital city of Bangkok with a population of more than 6 million. Although traffic and air pollution problems abound and the government is still recovering from a military coup four years ago, Bangkok is home to a large and growing number of very successful entrepreneurs. This concentration of entrepreneurs is undoubtedly a factor in the recent rapid growth of the economy (Janssen, 1993; National Trade Data Bank, 1994). The purpose of this study, perhaps one of the first on-site studies of Thai entrepreneurs, was to attempt to understand how individual differences, background characteristics and scanning behaviors of the entrepreneurs might be related to the performance of their firms. The potential correlates of firm performance were those that have been found to be related to entrepreneurial firm performance in the United States and Canada (Box, Watts, & Hisrich, 1994; Blake and Box, 1994). BACKGROUND Need for Achievement (NACH) (McClelland, 1961) and Locus of Control (LoC) (Rotter, 1966) are both individual difference measures that have been frequently used in the studies of entrepreneurial activity (Vesper, 1990). McClelland (1961) found that successful entrepreneurs, in India, had higher NACH scores than less successful entrepreneurs. Box, White and Barr (1993) determined that NACH of the entrepreneur correlated positively, but not significantly, with firm performance. Miller and Droege (1986) found that a CEO's NACH was significantly related to various measures of firm structure, and thereby perhaps related indirectly to firm performance. Entrepreneurs' and CEOs' LOC has been shown to be related to firm performance (Box, White & Barr, 1993; Govindarajan, 1988; Miller & Toulouse, 1986; Miller, Kets de Vries & Toulouse, 1982). An individual with a LOC score is one who attributes personal success to his or her own efforts and performance. The low LOC individual is described by Rotter (1966) as an internal. On the other hand, an individual with a high LOC score is deemed to be an external. Externals are those individuals who attribute success and failure to extrinsic events and luck. Successful entrepreneurs tend to score low on the LOC instruments and are thus internals. Entrepreneurial backgrounds have been extensively studied. The essential thesis in most of this research is that successful entrepreneurs may have common backgrounds with regard to such things as previous start-ups, industry experience levels, experience as part of an entrepreneurial firm's top management team, age, and education. For example, Ronstadt (1988) discovered that entrepreneurs who had previous start-up experience were more satisfied and successful than those in their first venture. Box, Watts and Hisrich (1994) and Box, White and Barr (1993) found that the entrepreneur's years of prior experience in the industry was positively correlated with firm performance. Age and years of formal education have also been shown to correlate positively with entrepreneurial firm performance (Birley & Norburn, 1987; Hisrich & Brush, 1984; Hoad & Rosko, 1964). Finally, environmental scanning intensity has been found to positively correlate with firm performance (Daft, Sormunen & Park, 1988; Watts & Ormsby, 1990). The literature suggests that NACH and LOC (of the entrepreneur) may be related to firm performance. …