Final Project on PTCL and PAKNet

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.

Our research in personality ranges from analyses of individual aptitude, attitude, personal selection factors and studies of social, ethnic, and cultural bases of thought, feelings, and behavior of peoples in those organizations. Personality research includes studies of cognitive abilities, interpersonal styles, and emotional reactivity. Methods such as field studies and data reduction techniques such as factor analysis and principal components analysis, as well as structural modeling (using Questionnaire) are used during the research. Measurement issues of most importance are those of reliability and stability of individual differences.

While the development of Questionnaire, we consider the Personality as a dynamic and multi dimension concept which basically describe the growth and development of persons whole psychological system.

The Prelude of Personality Concept

The word Personality has derivation from the Latin words Persona which are translated as “to speak through”. The Latin term was used to donate the masks worn by actors in ancient Greece and Rome. Common uses of the word emphasize the role which the person displays to the public. The academic definitions are concerned more directly with the person than with the role played. Probably the most meaningful approach would be to include both the person and role.

Some personality theorist emphasizes the need to recognize the person-situation interactions, which are the social learning aspects of personality. Such a social learning interpretation may be the most comprehensive and meaningful to the overall study of organizational behavior.

Personality traits are more important to organizational behavior. In particular five personality traits are especially related to job performance. These five traits include extraversion (Sociable, talkative and assertive), Agreeableness (Good natured, Cooperative, and trusting), Conscientiousness (Responsible, Dependable, persistent, and achievement oriented), Emotional stability (viewed form a negative standpoint, tense and nervous) and openness to experience (imaginative and intellectual).

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 appears to be a result of heredity and/or environmental influences. In addition today there is another factor—the situation. Thus adults personality is now generally consider to be made up of both heredity and environmental factors moderated by situational conditions.

So in this way personality is the dynamic organization with in the individual of those Psycho-Physical systems that determine his unique adjustments to his environment.

The Quick Review of Personality Concept

The Research Papers

Hypothesis: Entrepreneurship has an effect on the personality characteristics of the entrepreneur.

Changes in the entrepreneur's relations with others were also observed to have an effect on the entrepreneur's personality characteristics.

This research paper examines the uniqueness and Individuality of the entrepreneurial personality and the effects of changes in the entrepreneur's personal relationships. The empirical findings results on this point that 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.

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 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. In studies using the trait model, the basic question is why certain individuals start firms and are successful as entrepreneurs. In these studies the personality traits of the successful entrepreneur are not looked at in the context of the prevailing situation. Personality characteristics are formed by the interplay between the individual and the environment. In this interplay life situation, experiences, and changes in the individual's life play a central role (e.g. Rotter, 1975, 1990). 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. 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. 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. 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. 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.

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). 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. 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 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. According to the findings, the external control expectations (control by other people) of the entrepreneurs had decreased significantly since the start-up phase.

By looking at the characteristics of the entrepreneur via changes in the level of co-operation between the firm and the personal interest network of the entrepreneur, it is possible to describe the relation between the success of the entrepreneur's business and other people in the changing environment.

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". Mastery had clearly increased in cases where the personal support networks improved during the study period. According to the fourth hypothesis, an increase in personal interest networks improves the entrepreneur's achievement motivation.

The subjects of the study were 123 entrepreneurs, who were interviewed five times during the period 1992-1996. 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. According to the second hypothesis, an increase in co-operation increases the entrepreneur's achievement motivation. To test the third hypothesis, control by powerful others was related to the degree of co-operation between entrepreneurs. For example, the work ethic and mastery had increased in the group "no changes in the entrepreneur's personal interest networks".

The Role of Personality Testing in Managerial Selection

Selection practices based on personality testing are not embedded in an explicit theory of performance.

This research Paper emphasize the selection methodology which is the Personality testing. Personality testing is widely being used for the selection of managers. Selection practices based on personality testing are not embedded in an explicit theory of performance. On the basis of results from a small survey in New Zealand by recruitment consultants to show that personality testing is extensively used in managerial selection, and that there is a tendency to overemphasize the importance of personality as a determinant of performance.

In this article, 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. Finally, it presents to make some suggestions for ways in which personality testing can be more effectively used in selection.

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.

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] indicated that the validities of personality tests were relatively low. A meta analysis of validity studies published between 1964 and 1982 showed continuing low validities of personality measures with average validities of 0.206.

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. Consequently, in the survey we attempted to discover the weight placed on personality testing relative to other selection criteria. 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.

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. 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.

Personality tests measure (like interest tests) the individual's preferences. Existing results suggest that ability is a much better predictor of performance than preference. Conversely, people with high levels of social skill may prefer not to exercise their ability. The resultant execution of some task is, in turn, constrained by:

Performance is determined by a range of factors, some individual, others contextual. Equally clearly, of the individual factors, personality (the motivation to behave consistently in particular ways) is only one of several, and quite possibly a minor factor.

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. This view has two implications for personality testing in managerial selection:

· 1 Personality tests should be grounded in context. 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.

It was argued that the users of these tests overstate the importance of personality as a determinant of performance. So

· 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.

Firms Analysis and Implications

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.

In 1991, GOP first announced its intention to privatize PTC. In 1994, the Government of Pakistan decided to test the appetite of the domestic and international capital markets for PTCL. Consequently, in the third quarter of 1994, the Government of Pakistan issued six million 'Vouchers' exchangeable into 600 million shares (with a par value of Rs. 10 per share) of the future PTCL in two separate placements. These Vouchers were converted into shares of PTCL in mid 1996. Following such conversion the Government of Pakistan own (88%) and private investors own (12%) shares in PTCL.

In 1995, a Presidential Ordinance called the Pakistan Telecommunication (Reorganization) Ordinance was promulgated which established the basis for the monopoly of PTCL in the provision of basic telephony services in the country as well as the new independent regulatory regime for the development of the sector. In October 1996, the new Pakistan Telecommunication (Re-Organization) Act ("Act") was passed by the Parliament, which contains essentially the same provisions, as did the Ordinance, but on a permanent basis.

PTCL owns and operates the public switched telephony network in Pakistan and various other telecommunication services. In addition it is the sole provider of all Core Infrastructure services including international Data and Voice services on an exclusive basis till end December 2002. Over the last ten years a capacity expansion program succeeded in increasing telephone penetration, reducing pending applications and considerably improving productivity, digitalization and quality of the network.

The network expansion has been accompanied by steady and phenomenal expansion in national long distance (NWD) and international traffic. 1998 and 1999 saw the beginning of PTCL's partnership with private sector enterprises for new projects such as pre-paid calling cards and wireless local loop. Currently PTCL is preparing for challenges of competition, which is likely to set early 2003. to be ready to face onslaught of competition PTCL has taken a number of proactive measures to outsource and contract out its rights under license granted by GOP/PTA.

	Exclusivity on Domestic & International Fixed Line Services until 31st December 2002
	Sole Provider of Backbone Transmission Network in Pakistan.
	25 years Renewable License (from April, 1996) effectively Gives PTCL a Continuing Operating life.
	PTCL Market Capitalization accounts for Approx.30% of Pakistan Stock Exchange Market Capitalization.
	4 Million digital lines installed.

1947	Posts & Telegraph Dept. established
1962	Pakistan Telegraph & Telephone Deptt.
1990-91	Pakistan Telecom Corporation ALIS: 850,000 Waiting list : 900,000 Expansion Program of 900,000 lines initiated (500,000 lines by Private Sector Participation 400,000 lines PTC/GOP own resources).
1995	About 5 % of PTC assets transferred to PTA,FAB & NTC.
1996	PTCL Formed listed on all Stock Exchanges of Pakistan
1998	Mobile & Internet subsidiaries established
2000	Telecom Policy Finalized

Pakistan Telecommunication Corporation limited (PTCL) is one of the big organization of Pakistan. Its Head office is in Islamabad and it is under the ministry of science and technology. It has currently more then 60000 employees. The nature of the organization is based on the 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)

PTCL organizational hierarchy has three main levels The Chairman presides the company who has Basic Pay Scale is 21-or above. Under the Chairman Authority seven departments which are: Administration, Finance, Public Services, Planning, Internal Communication, Technology Transfer and Research, and Operations. Two positions are also under the authority of Chairman these are the Chief Internal Auditor and the Media Advisor. The seven departments are lead by the Director Generals. And under the authority of each Director General there are more the 35 General Managers which are leading the various divisions. Under the authority of Director General also there are 10 CE’s of various divisions.

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.

The organization view the personality as each employee has a good mixture of Good Educational background, Technical skills and Interpersonal skills. The peoples of PTCL should capable, confident and has mastery of detail in his area of duties. They don’t believe that only on the personal appearance & attractiveness is the criteria of selection process, even the career development just only base on the seniority.

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).

The PTCL uses Personality-Test approach and conduct various types of personality tests to fulfill their criteria of choosing the appropriate employees as the Personality Job-Fit theory passion to analyze the set of following skills:

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.

Each of the three departments has their own standards of Personality regarding heredity factor. The Administration, Public Services, Internal Communication Department, and the Media Advisor employees has the following characteristics are: Normal Physical structure regarding weights and highs of employees of the employees, the facial attractiveness is reasonably found particularly marketing peoples and good facial attractive women’s are working and providing services regarding the marketing and routine administrative solutions. This is the department where there is significant number of women’s working, the employees have greater temperament of work and the employees are working 8 hours which is the standard daily. The muscle composition & reflexes and Biological rhythmus of this department are good and have both the genders of good temperament. The characteristics which are above mentioned consider only in reasonable weight-age but the main considerations are on Technical skill, experience and Seniority.

These peoples are sociable, talkative and assertive, so the overall dimension of their personality is Extraverts. The other dimension of the employees of this department is high 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, enthusiastic and confident. But they are not very imaginative, artistic sensitive, and intellectuals. So they are the people of less openness to experience.

The Planning, Technology Transfer & Research, Operation Department employees has the characteristics are: Normal Physical structure regarding weights and highs of employees, The facial attractiveness is reasonably found but it is not very much influence in the personality of employees who are working in the Planning, Technology Transfer & Research, Operation Department, Because their major concern with the system, networks and routers. These are the department where there is not significant number of women’s are working. The women’s are working as the Telephone Operators only., the employees have greater temperament of work and the employees are working 8 hours averagely daily. The muscle composition, reflexes and Biological rhythmus of this department are reasonable. This department requires high degree of specialization. The Finance Department employees have the characteristics are: Normal Physical structure regarding weights and highs of employees of the employees. The facial attractiveness is reasonably found. This department requires high degree of specialization regarding accounts.

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.

The PTCL employees characterize themselves as they are Sensing, Thinking and Judging but a mixture of Introverts and Extraverts. They are Master of their own fate Self-monitoring but not Risk Taking.

Paknet Limited a fully owned Subsidiary of Pakistan Telecommunication Company Limited (PTCL) was formed in March 1999 and started commercial operation in January 2000. It is now the biggest Internet Service Provider of the Country that independently offers their services.

Besides Internet Paknet also provides data communication services like Clear Channel data links, Frame Relay and Digital Circuits on Optical fiber cross connect systems etc.

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 Company commenced its business in January 2000 with a balance sheet size of over US $ 7.0 million. Currently it has a revenue base of approximately US $ 5.0 million per annum and is most likely to double in the next fiscal year keeping in view the market demand of Paknet products and expansion plans of the company.

Paknet limited network now approach to more then 220 stations (cities, towns and etc.). Its Head office is in Islamabad where the main server of the Paknet connects to Regional ISP’s of Singapore, Dubai and that goes further to connect with the World ISP which is situated in United States of America. The other regional offices of Paknet are in Karachi, Lahore, Multan, Faisalabad, Peshawar, Quetta, Hayderabad, and Gujranwala.

The Multan Regional office area of operation comprises into three districts which are Bahawalpur, D.G Khan, and R.Y Khan. The Paknet Multan also comprises three departments which are Administration & Customer service, Accounts, and Engineering. Currently 41 employees are working in different offices (Paknet Multan has two offices: Customer Service Center and the Server Room Office). The non-gusseted employees are 40 and gusseted are the only one who’s rank is the Director Paknet. Most of the employees are employed on the contract. In the Organization the total employees are more then 700.

The organization view the personality as each employee has mastery of detail in his area of duties and services in Inter-Friendly environment and reasonable social-able linkages with intra organizational and inter organizational contacts.

We emphasize our research right from the selection and recruitment process the organization very conscious about the recruiting the peoples as employees and find that the organization uses the Personality Job-fit Theory during employment. 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).

The Paknet uses Personality-Test approach and conduct various types of personality tests to fulfill their criteria of choosing the appropriate employees as the Personality Job-Fit theory passion to analyze the set of following skills: Technical Skills, Human 0r Interpersonal Skill, and Conceptual Skill.

The devices which are used during the assessment of employees are the Interviews, written tests and the Work Method.

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.

Each of the three departments has their own standards of Personality regarding heredity factor. The Administration & Customer Service Center Department employees has the characteristics are: Normal Physical structure regarding weights and highs of employees of the employees, The facial attractiveness is reasonably found particularly marketing peoples and good facial attractive women’s are working and providing services regarding the marketing and routine administrative solutions. This is the department where there is significant number of women’s working, the employees have greater temperament of work and the employees are working 10 to 14 hours averagely daily. The muscle composition & reflexes and Biological rhythmus of this department are good and have both the genders of good temperament.

The Engineering and Operation Department employees has the characteristics are: Normal Physical structure regarding weights and highs of employees, The facial attractiveness is reasonably found but it is not very much influence in the personality of employees who are working in Engineering and Operation Department, Because their major concern with the system, networks and routers. This is the department where there is not significant number of women’s are working, the employees have greater temperament of work and the employees are working 10 to 12 hours averagely daily and secondly some employees are also engaged in providing the services to customers of 24 hour Helpline which also require strong temperament and concentration, The muscle composition, reflexes and Biological rhythmus of this department are reasonable. This department requires high degree of specialization. The Account Department employees have the characteristics are: Normal Physical structure regarding weights and highs of employees of the employees. The facial attractiveness is reasonably found. This department requires high degree of specialization regarding accounts.

The Paknet employees characterize themselves as they are Sensing, Thinking and Judging but a mixture of Introverts and Extraverts. They are Master of their own fate Self-monitoring but not Risk Taking.

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.

The Personality also influences the Job Satisfaction because there is a correlation between them. Initially, persons with different personality types may choose different careers based upon their individual interests further related personality and job satisfaction in elements of self-direction, self-motivation, problem solving, and frustration-tolerant employees. The research shows that a strong relationship between personality interacting with job conditions and job satisfaction.

Entrepreneurship and the characteristics of the entrepreneurial personality

Hannu Littunen, University of Jyväskylä, School of Business and Economics Centre for Economic Research, Jyväskylä, Finland

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.

Content Indicators: Research Implications** Practice Implications* Originality** Readability***

International Journal of Entrepreneurial Behaviour & Research
Volume 6 Number 6 2000 pp. 295-310
Copyright © MCB University Press ISSN 1355-2554

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.

In studies of entrepreneurship it is possible to differentiate between two schools of thought: one based on the trait model and the other on contingency thinking. In studies using the trait model, the basic question is why certain individuals start firms and are successful as entrepreneurs. In these studies the personality traits of the successful entrepreneur are not looked at in the context of the prevailing situation. Following the models based on contingency thinking, the characteristics needed in entrepreneurship are bound up with the firms' environment and the prevailing situation (Gilad and Levine, 1986). Personality characteristics are formed by the interplay between the individual and the environment. In this interplay life situation, experiences, and changes in the individual's life play a central role (e.g. Rotter, 1975, 1990). Thus becoming an entrepreneur can amount to a change in one's life which is profound enough to have an effect on one's personality characteristics.

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.

Method and research strategy

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:

H1: Entrepreneurship has an effect on the personality characteristics of the entrepreneur.

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:

H2: An increase in co-operation between entrepreneurs improves the achievement motivation.

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 contingency theory emphasizes the importance of the environment in research on entrepreneurship (Gilad and Levine, 1986). In the environment the functioning of the entrepreneur takes place in relation to other people (Carsrud and Johnson, 1989). By looking at the characteristics of the entrepreneur via changes in the level of co-operation between the firm and the personal interest network of the entrepreneur, it is possible to describe the relation between the success of the entrepreneur's business and other people in the changing environment (Table III).

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).

The presence of abundance and versatility in an entrepreneur's personal interest networks increase the resources of entrepreneurship, because they fill possible gaps in the entrepreneur's training and experience (Johannisson and Spilling, 1986). Mastery had clearly increased in cases where the personal support networks improved during the study period. Further, differences in the "pursuit of excellence" points to the effect of the abundance of personal interest networks on the motivation to achieve. According to the fourth hypothesis, an increase in personal interest networks improves the entrepreneur's achievement motivation. The empirical results support this hypothesis, if one presumes that changes in the group "no changes in personal interest networks" can be explained by other factors in the environment, and as an effect of the entrepreneurs' learning process.

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)

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, 1989, Entrepreneurial Behavior, Scott, Foresman, Glenview, IL and London.

Brockhaus, R.H, 1976, "Locus of control and risk-taking propensity as entrepreneurial characteristics", unpublished doctoral dissertation, Washington University.

Brockhaus, R, Horwitz, P, 1986, "The psychology of entrepreneurship", Sexton, D.L, Smilor, R, The Art and Science of Entrepreneurship, Ballinger, Cambridge, MA.

Caird, S, 1988, "A review of methods of measuring enterprising attributes", University Business School, Durham.

The Role of Personality Testing in Managerial Selection

Stephen Dakin, Department of Management, University of Canterbury, Christchurch, New Zealand.

V. Nilakant, Department of Management, University of Canterbury, Christchurch, New Zealand.

Ross Jensen, Department of Management, University of Canterbury, Christchurch, New Zealand.

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.

Content Indicators: Research Implications* Practice Implications*** Originality* Readability**

Journal of Managerial Psychology
Volume 09 Number 5 1994 pp. 3-11
Copyright © MCB University Press ISSN 0268-3946

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.

In Australia, Vaughan and McLean's[4] survey of managerial selection practices in Victoria revealed little use of testing. However, Hicks[2] is of the opinion that Australian practice has followed that of the UK with the commercialization of testing and that, while no statistics are currently available, he believes that testing is now widespread and increasing in its use.

Personality Testing in New Zealand

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.

Validity of Personality Test

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.

Debate in the Literature

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.

Mitchell[32], for instance, presents a performance-model sequence describing links between arousal, motivation, behaviour, performance, and the evaluation situation, and the role of task, social, and organizational factors in determining these relationships. In this model, Mitchell notes that performance in organizations depends on a number of things:

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.

Quite clearly, performance is determined by a range of factors, some individual, others contextual. Equally clearly, of the individual factors, personality (the motivation to behave consistently in particular ways) is only one of several, and quite possibly a minor factor. Significantly, Mitchell argues that it is difficult to determine whether behaviour is caused primarily by motivation or ability without considering social, task, and situational factors. More significantly, Mitchell argues that the interdependence of tasks in organizational settings reduces the importance of individual factors such as motivation and ability in determining performance. This is because in such situations it may be difficult to specify and ascertain individual contributions to the joint performance of interdependent people.

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.

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.

Steps in Improving the Use of Such Tests in Managerial Selection

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:

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.

Summary and Conclusions

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

5, Hesketh, B., New Zealand Institute of Personnel Management Survey on Testing in Industry, New Zealand Institute of Personnel Management, Wellington, 1973.

· Entrepreneurship and the characteristics of the entrepreneurial personality by Hannu Littunen, annu Littunen, University of Jyväskylä, School of Business and Economics Centre for Economic Research, Jyväskylä, Finland

The Executive Summery

The Prelude of Personality Concept

The Quick Review of Personality Concept

The Research Papers

The Role of Personality Testing in Managerial Selection

Firms Analysis and Implications

Revenues of PTCL during Last Years

Entrepreneurship and the characteristics of the entrepreneurial personality

Introduction

Method and research strategy

Measures

Data

Findings

The characteristics of the entrepreneur and the environment

Conclusions

Note

References

The Role of Personality Testing in Managerial Selection

Introduction

Changing Patterns in the Use of Personality Testing

Personality Testing in New Zealand

Validity of Personality Test

Debate in the Literature

A Model of Performance

Steps in Improving the Use of Such Tests in Managerial Selection

Summary and Conclusions

References

· The Role of Personality Testing in Managerial Selection by Stephen Dakin, V. Nilakant, Ross Jensen ,Stephen Dakin, Department of Management, University of Canterbury, Christchurch, New Zealand., V. Nilakant, Department of Management, University of Canterbury, Christchurch, New Zealand

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