Journal of Small Business & Entrepreneurship

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The Emotional Intelligence of Entrepreneurs

Kenneth S. Rhee & Rebecca J. White

To cite this article: Kenneth S. Rhee & Rebecca J. White (2007) The Emotional Intelligence
of Entrepreneurs, Journal of Small Business & Entrepreneurship, 20:4, 409-425, DOI:
10.1080/08276331.2007.10593408

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The Emotional Intelligence of Entrepreneurs
Kenneth S. Rhee, Department of Management and Marketing,
Northern Kentucky University
Rebecca J. White, Department of Management and Marketing,
Northern Kentucky University
ABSTRACT. Entrepreneurship research has recognized the entrepreneur as catalyst to the new venture process.
A popular stream of research not yet applied to entrepreneurship has been the study of the emotional intelligence
of entrepreneurial venture leaders. This web-based exploratory study collected self-assessment data of emotion-
al competencies on successful young entrepreneurs. Participating entrepreneurs reported that they demonstrated
high levels of self-confidence, trustworthiness, achievement orientation, service orientation, change catalyst,
teamwork and collaboration. Trustworthiness, the ability to maintain standards of honesty and integrity, was
ranked highest among 18 emotional competencies measured. The importance of teamwork and collaboration in
the new venture process is also emphasized in the findings.
SOMMAIRE. La recherche portant sur l’entrepreneuriat a reconnu à l’entrepreneur un rôle de catalyste pour les
nouveaux projets. L’étude de l’intelligence émotionnelle des chefs d’entreprise représente un type de recherche
populaire non encore appliquée à l’enrepreneuriat. La présente étude exploratoire a recueilli par le biais du Web
des données d’auto-évaluation portant sur les compétences émotionnelles des jeunes entrepreneurs à succès. Les
participants ont déclaré démontrer un haut niveau de confiance en soi, de loyauté, de sens du service et de l’ac-
complissement, d’ouverture au changement, de travail d’équipe et de collaboration. La loyauté—la capacité de
conserver des normes d’honnêteté et d’intégrité—était première au classement des 18 compétences émotion-
nelles évaluées. Les résultats mettent également l’accent sur l’importance du travail d’équipe et de la collabora-
tion pour les nouveaux projets.

Introduction
Entrepreneurship has been shown to play an important role in creating jobs, increasing
production, and contributing to economic growth in general (Baumol, 1993; Birch, 1979;
Parker, 2005). Economists have traditionally viewed the entrepreneur as the creator of
new enterprises (Low and Macmillan, 1988; Rumelt, 1987; Schumpeter, 1934), and have
linked wealth creation directly to entrepreneurs and entrepreneurial processes
(Schumpeter, 1934, 1950). Significant attention has been given to the entrepreneurial
activities fueling the last major economic expansion period of the late twentieth century
(Birch, 1979; Birley, 1987; Norton, 2001; Reynolds, 1987; Schoonhoven and Romanelli,
2001) and to understanding, defining and describing entrepreneurs (Hyrsky, 2000; Low
and Macmillan, 1988; Stewart, Watson, Carland, and Carland, 1998).
There have been concerns about the disappointing results of previous research attempt-
ing to define general personal characteristics of entrepreneurs, entrepreneurial characteris-
tics and personality profiles (Cooper and Dunkelberg, 1987; Hornaday and Aboud, 1971;
McClelland, 1961; Sexton and Bowman-Upton, 1986, 1990). And, even though need for
achievement, tolerance for ambiguity (Schere, 1982; Sexton and Bowman, 1986), and need
for conformity (Begley and Boyd, 1987; Miner et al., 1989) have been shown to differen-
tiate entrepreneurs to a certain degree, individual psychological traits, including locus of
control and risk-taking, have been shown not to differentiate entrepreneurs and managers
(Begley and Boyd, 1987; Sexton and Bowman, 1984).

Journal of Small Business and Entrepreneurship 20, no. 4 (2007): pp. 409–426 409
410 RHEE AND WHITE

Some researchers (Smith, 1967; Stanworth and Curan, 1976) have used personality
traits to categorize different types of entrepreneurs; however, it is not clear whether clas-
sifying the type of entrepreneurs further contributes to a theory of entrepreneurship. In
fact, Low and Macmillan (1988: 141) concluded that “much of the earlier entrepreneur-
ship research either lacks clarity of purpose or the specified purpose was of little conse-
quence.” Overall, it seems efforts to isolate psychological or demographic characteristics
indigenous to all entrepreneurs have generally met with disappointing results due to weak
or nonsignificant results (Brockhaus and Horowitz, 1986; Sexton and Bowman-Upton,
1991; Shaver, 1995).
More recently, researchers have suggested that a focus on defining entrepreneurship in
terms of personal characteristics and behaviors of the entrepreneur has been a significant
obstacle to the development of a conceptual framework for the field of entrepreneurship
(Shane and Venkataraman, 2000; Venkataraman, 1997). Shane and Venkataraman (2000)
contend that the focus should be on the study of opportunity sources, the processes of dis-
covering and exploiting those opportunities, and the individuals who discover, evaluate
and exploit them (Shane and Venkataraman, 2000). In other words, they suggest entre-
preneurship should not be defined solely in terms of who the entrepreneur is and what he
or she does but rather as “a scholarly examination of how, by whom, and with what effects
opportunities to create future goods and services are discovered” (Shane and
Venkataraman, 2000: 218).
Addressing these concerns, researchers began to shift their attention to focusing on
cognitive models, which were considered more theoretically rigorous and empirically
testable, to explain individuals engaging in the entrepreneurial process (Mitchell et al.,
2002). Recent cognitive-based research theory development could be classified as either
focusing on the discovery or creative process of entrepreneurs (Alvarez and Barney,
2006). These two models consider both the entrepreneur and the opportunity discovery
process described by Shane and Venkataraman (2000). In the discovery process, entre-
preneurial opportunities exist to be discovered by alert entrepreneurs who can objective-
ly assess and evaluate the risk factors and exploit opportunities (Gaglio and Katz, 2001;
Shane and Venkataraman, 2000). In the creative process, opportunities emerge as individ-
uals explore ways to generate economic wealth (Gartner, 1985; Sarasvathy, 2001).
According to the discovery model, opportunities exist as objective phenomena, wait-
ing to be discovered by unusually alert people who, once they decide to exploit an oppor-
tunity, are called entrepreneurs (Gaglio and Katz, 2001; Kirzner, 1973). The central task
in this model is to discover and then exploit these opportunities. The theory suggests that
those who do this will find these opportunities through the systematic study of industry
and market structure. Since this process is objective, entrepreneurs can usually collect
much of the information they need to develop a plan. Entrepreneurs are defined by their
keen ability to perceive opportunities that are available to all, but only acted upon by a
few (Kirzner, 1973; Shane and Venkataraman, 2000).
These observations are leading to studies regarding the differential ability of individ-
uals to exploit objective opportunities. Busenitz and Barney (1997) showed that while
both entrepreneurs and non-entrepreneurs manifest certain like biases, some entrepreneurs
are systematically more biased in their decision making. Researchers have also reported
that entrepreneurs are more susceptible to overconfidence and representative heuristics
(Tversky and Kahneman, 1974). Baron (1988) also argued that due to the unique nature
of the entrepreneurial process, entrepreneurs are more susceptible to cognitive biases than
THE EMOTIONAL INTELLIGENCE OF ENTREPRENEURS 411

other people. These include counterfactual thinking, affect infusion, attributional style, the
planning fallacy, and self-justification. Moreover, McGrath (1999), and Simon, Houghton,
and Aquino (2000) provided analyses of how cognitive errors such as overconfidence,
illusion of control, and misguided belief in the law of small numbers shape such phe-
nomena as the creation of real options for entrepreneurs. Busenitz and colleagues (for
example, Alvarez and Busenitz, 2001; Wright et al., 2000) have utilized cognitive models
to explain how the heuristic-based logic that appears to be stronger in entrepreneurs helps
to explain how entrepreneurs think and make strategic decisions.
In research regarding the entrepreneurial decision-making process, Hoy and Carland
(1983) found entrepreneurs to be more perceptive and flexible while small business man-
agers were more logical and methodical in their decision making. Smith, Gannon, Grimm,
and Mitchell (1988) also found that managers used a more rational approach than did the
entrepreneurs. Brodzinski, Scherer, and Weibe (1990) found that entrepreneurs’ decision
style affected selection of boundary-spanning activities (that is, the number of contacts
sought and the way information was analyzed), and Dollinger (1984) found that entrepre-
neurs high on integrative complexity and tolerance for ambiguity spent significant time on
boundary-spanning activities and their decision style was positively related to financial
performance of their organizations.
The creation theory suggests that differences in the cognitive biases between entrepre-
neurs and non-entrepreneurs may exist, but these differences are likely to reflect the emer-
gent search process that entrepreneurs experience more than initial differences between
entrepreneurs and non-entrepreneurs (Hayward, Shepherd and Griffin, 2005; Sarasvarthy,
2001). In other words, not only do entrepreneurs create opportunities through an emergent
search process, but this process also creates the entrepreneur. Thus, the concept of emer-
gent opportunities incorporates theories of learning (Dodgson, 1993; Huber, 1991).
According to Bird (1988), the key distinction between entrepreneurial behavior and
managerial behavior is the entrepreneur’s intentionality toward the creative process. By
examining the intentions associated with their behaviors, researchers have begun to better
understand how entrepreneurs think and why they behave as they do. For example,
Gatewood, Shaver, and Gartner (1995) conducted a longitudinal study on cognitive fac-
tors influencing start-up behaviors and success of new venture creation and found that
ways of thinking such as personal attributions for venture creation were related to suc-
cessfully starting a business. Moreover, Busenitz and Lau (1996) concluded entrepreneurs
were found to have different cognitive schema than non-entrepreneurs with regard to
intentions to create new ventures.
The concept of an entrepreneurial mindset has been used to bridge the two domains of
discovery and creative entrepreneurial process (Busenitz and Lau, 1996; McGrath and
Macmillan, 2000; Wright, Hoskisson, Busenitz and Dial, 2000). According to McGrath
and Macmillan (2000), the entrepreneurial mindset includes passionately seeking new
opportunities, pursing opportunities with enormous discipline, a focus on execution, and
the ability to engage the energies of others toward a goal. However, the concepts discussed
within the entrepreneurial mindset have mostly been related to cognitive activities such as
environmental scanning, pattern recognition, coping with uncertainty and decision-mak-
ing (Busenitz and Lau, 1996).
In keeping with the entrepreneurial mindset perspective, we suggest that emotional
intelligence may also contribute to our understanding of the people who are able to suc-
cessfully discover, create and exploit opportunities. We believe the activities related to
412 RHEE AND WHITE

these processes may require demonstration of competencies such as self-management or

social management skills that are included in the emotional intelligence inventory.
Moreover, we agree with Baron (2004) that “a perspective that sheds new light on key
aspects of human behavior (for example decision-making, problem-solving, the self reg-
ulation of behavior) can contribute substantially to our understanding of the process
through which entrepreneurs recognize and develop new opportunities” (Shane and
Venkataraman, 2000: 169–70).
Emotional intelligence, defined by Salovey and Mayer (1989) as a form of social intel-
ligence, has been shown to contribute to a leader’s effectiveness through the demonstra-
tion of competencies in a stream of research in the current management literature
(Boyatzis, 1982; Spencer and Spencer, 1993; Goleman, 1998). According to Salovey and
Mayer (1989), emotional intelligence is the ability to monitor one’s own and others’ feel-
ings and emotions, to discriminate among them, and to use this information to guide one’s
thinking and action. In short, emotional intelligence helps us to recognize our own feel-
ings and those of others, to motivate ourselves, and to manage our own emotions and also
emotions in our relationships with others (Goleman, 1997). Goleman (1995) extended this
model to include emotional intelligence as the neurological underpinning of the integrat-
ed model of personality. In other words, emotional competencies that result in effective or
outstanding performance act as a conduit for emotional intelligence. According to
Goleman (1998: 25), an emotional competence is “a learned capability based on emo-
tional intelligence which results in outstanding performance.” In short, emotional intelli-
gence helps us to recognize our own feelings and those of others, to motivate ourselves,
and to manage our own emotions and also emotions in our relationships with others. In
short, the act of regulating or managing our own and others’ emotions contributes to our
overall effectiveness as a leader (Goleman, 1995).
Despite the number of scholars who have suggested the importance of examining dif-
ferences in behavior rather than examining psychological and personal/demographic dif-
ferences of entrepreneurs (Covin and Slevin, 1991; Gartner et al., 1991; Manimala, 1992;
Zahra, 1993), little attention has been given to the emotional intelligence of entrepreneurs.
Begley and Boyd (1987) did attempt to articulate the psychological characteristics of suc-
cessful entrepreneurs, yet only a few items that could be considered relating to emotional
intelligence such as need for achievement, tolerance for ambiguity, intuition, flexibility,
self-confidence, and adaptation were included. A number of researchers have investigat-
ed intuition in entrepreneurs, and found most entrepreneurs possessed an intuitive per-
sonality (Carland, 1982) and demonstrated intuition and creativity (Allison, Chell and
Hayes, 2000; Bird, 1988; Nickerson, Perkins and Smith, 1985). And, more recently
Ensley, Pearson, and Amason (2002) discovered that group cohesion when combined with
free and open interaction led to more effective teamwork and better performance.
In a recent study, Watson, Stewart, and BarNir (2003) examined the effects of human
capital, organizational demography, and interpersonal processes and discovered important
linkages to a firm’s growth and performance. These authors also claimed that “the inclu-
sion of interpersonal process in the venture viability equation is a very important area to
develop and should become a part of human capital core assets” (146). However, since
prior research on entrepreneurship has shown that entrepreneurs demonstrate different
characteristics than salaried or corporate managers (Busenitz and Barney, 1997; Buttner
and Gryskiewicz, 1993; Collins, Moore and Unwalla, 1964), it does not seem prudent to
translate prior emotional intelligence research on leadership to entrepreneurship directly.
THE EMOTIONAL INTELLIGENCE OF ENTREPRENEURS 413

Therefore, this research was conducted to explore the emotional intelligence patterns of
successful entrepreneurs.
Methods
A web-based survey on emotional intelligence of entrepreneurs was conducted to collect
the self-assessment data of emotional competencies. One of the challenges of research on
entrepreneurs has been to identify a sampling frame that includes entrepreneurs rather
than small-business owners. Hoy and Carland (1983) suggested that entrepreneurs run
companies that are posed for rapid and explosive growth whereas small-business owners
are building lifestyle companies that provide an income. In order to address this challenge
and increase the likelihood of obtaining leaders of entrepreneurial companies, members of
the Young Entrepreneurs’ Organization (YEO) were invited to participate in the
Emotional Competency Inventory (ECI) Web Survey (Boyatzis, Goleman and Rhee,
2000; Boyatzis and Sala, 2004). YEO is an international invitation-only membership
organization, and its members must be under 40 years of age and be founder, co-founder,
owner, or controlling shareholder of an operating business with annual gross sales exceed-
ing $1 million. Previous research on the differences between entrepreneurs and managers
has used independent ownership and active management (Stewart and Roth, 2001) and
founder (Busenitz, 1999 and Busenitz and Barney, 1997) as the definitional criteria for
entrepreneurs. Moreover, this sample of leaders tends to represent current definitions of
entrepreneurs since the YEO members are running companies that have reached a rea-
sonable size (exceeding $1 million in gross sales). In other words, the sample frame is not
likely to include a preponderance of small businesses in very early stages of development
but instead includes companies that are in growth stages. Furthermore, the goals of this
organization focus on offering opportunities for learning from peers and experts in an
effort to enhance entrepreneurship and the growth of the member companies and leaders.
Thus, YEO members, by choosing to become engaged in this group, indicate a growth
goal orientation—again consistent with entrepreneurial organizations rather than small
businesses. Thus, the criteria for membership in this organization minimized the risk of
including non-entrepreneurs in the study.
Table 1. Emotional Competency Clusters and Scales
Self-Awareness Self-Management
Emotional Self-Awareness Emotional Self-Control
Accurate Self-Awareness Trustworthiness
Self-Confidence Adaptability
Achievement Orientation
Initiative
Optimism
Social Awareness Social Skills
Organizational Awareness Developing Others
Service Orientation Inspirational Leadership
Empathy Influence
Change Catalysts
Conflict Management
Teamwork and Collaboration

The ECI (Boyatzis, Goleman, and Haygroup, 2001) is a validated questionnaire that
measures the demonstration of eighteen emotional competencies that belong to four major
emotional competency clusters. Goleman (1998) classified emotional intelligence into
four distinct sets of emotional competencies (see Table 1): self-awareness (awareness of
oneself); self-management (management of oneself); social awareness (awareness of oth-
ers); and social skills (management of one’s relationships with others).
414 RHEE AND WHITE

Table 2. Average Scores for Emotional Competency Scales and Clusters for Entrepreneurs
Mean SD Norm* Norm (SD)
Self-Awareness
Emotional Self-Awareness 3.9234 .67314 3.55 .49
Accurate Self-Awareness 3.9239 .51162 3.42 .48
Self-Confidence 4.1522 .48265 3.51 .53
Self-Management
Emotional Self-Control 3.6429 .55178 3.30 .56
Trustworthiness 4.4565 .47150 3.65 .44
Adaptability 3.7963 .47301 3.46 .45
Achievement Orientation 4.3245 .53608 3.53 .47
Initiative 4.0171 .52226 3.43 .49
Optimism 4.2252 .47861 3.70 .40
Social Awareness
Organizational Awareness 3.9922 .64676 3.49 .53
Service Orientation 4.2484 .54808 3.74 .49
Empathy 4.2143 .55047 3.61 .44
Social Skills
Developing Others 4.0901 .64442 3.48 .52
Inspirational Leadership 4.0280 .62998 3.29 .57
Influence 4.0621 .57216 3.42 .54
Change Catalysts 4.2075 .56253 3.42 .55
Conflict Management 3.7842 .55797 2.95 .48
Teamwork and Collaboration 4.2158 .51120 3.57 .45
* Self-rating from N = 332 from North American Database for ECI 2, revised questionnaire from ECI
Technical Manual, HayGroup. The original ECI questionnaire which the ECI 2 is based on had the overall
sample size of 5,360.

The ECI consists of 72 questionnaire items measuring eighteen emotional competen-

cy scales. The response scale for the questionnaire ascertains the degree to which the
assessed was observed demonstrating each behavior in the item. The scale is behavioral-
ly anchored from 1 to 5: 1 = Never; 2 = Rarely; 3 = Sometimes; 4 = Often; 5 =
Consistently. The average scale reliability for ECI is .815 (Boyatzis and Sala, 2004).
The web-based survey questionnaire consisted of the ECI, demographic information
such as age, gender, and the firm-specific questions such as the number of firms founded,
the number of years being an entrepreneur, the year the firm was founded, the type of firm
(self-employed, family business, etc.), revenue, and the industry type (biotechnology, edu-
cation, health care, etc.). Due to the sensitive nature of the firm’s revenue, a nominal scale
of 1 to 7 ranging from “less than $100,000” to “greater than $5 million” was used instead
of the interval scale.
Out of 1,902 members invited to participate, 508 were not reachable by their e-mail
addresses. The e-mail list was then updated with new information, and 1,818 members
were invited to participate for the second round; out of those, 62 e-mails were returned as
undeliverable. Overall, out of 1,856 potential respondents, 161 responded to the survey,
yielding an 8.7% response rate, which is consistent with other web-based survey return
rates (Bean and Roszkowski, 1995; Bickart and Schmittlein, 1999; Groves, Cialdini and
Cooper, 1992).
The scale score for each competency was calculated by averaging the questionnaire
items belonging to each competency. The cluster scores were calculated by averaging the
THE EMOTIONAL INTELLIGENCE OF ENTREPRENEURS 415

competency scores within each cluster (See Table 2). Since a few questionnaire items
were reversely worded, they were reverse coded before the average calculation.
Results
Survey Participants
The average age of the participating entrepreneurs was 38.46 years old (n = 155) and the
average number of years as an entrepreneur was 12.81 years (n = 158). The entrepreneurs
also started on average 2.58 firms (n = 157) and the average number of employees in their
current firm was 54.61 (n = 154). Most entrepreneurs ran privately owned but non-fami-
ly businesses (62.7%; n = 161), but there were also sizable groups of self-employed
(15.5%) and family business (14.9%). Overall, the majority of the survey entrepreneurs
(66.4%; n = 161) had company revenues of greater than $2.6 million, and 44.7% (n = 161)
had revenues of greater than $5 million. The greatest number of entrepreneurs identified
their firm as service or distribution-related business (25.5%), followed by high technolo-
gy (19.3%) and professional services (14.9%). Other industries include biotechnology,
education, healthcare, legal, manufacturing, and retail. In our sample, men (84.5%) out-
numbered women (15.5%) in numbers similar to data reported for the US population of
entrepreneurs (Ewing Marion Kauffman Foundation, 2005).
Emotional Intelligence Analysis
The self-assessment data revealed a number of interesting phenomena among entrepre-
neurs. The participating entrepreneurs reported that they demonstrated higher levels of
self-confidence, trustworthiness, achievement orientation, service orientation, empathy,
change catalyst, and teamwork and collaboration in comparison to other competencies in
the questionnaire. In addition, these competencies seemed qualitatively higher when com-
pared to the norm in the overall population (See Table 2). At the same time, our sample
reported that they demonstrated lower levels of emotional self-control, adaptability, and
conflict management, and with the exception of conflict management, their values, while
still slightly higher, were consistent with the norm in the overall population (Table 2). It
was interesting to note that trustworthiness was ranked the highest of all competencies and
scored much higher than the overall norm. This seems to suggest that trustworthiness
might be one of the key ingredients of successful entrepreneurs. Goleman (1998) defined
trustworthiness as the ability to maintain standards of honesty and integrity. A person who
demonstrates trustworthiness acts ethically, builds trust through their reliability and
authenticity, admits their own mistakes, and takes tough and principled positions despite
unpopularity (Goleman, 1998). It is then likely that without building and having trust,
entrepreneurs might have difficulty building the support network necessary to ensure the
success of their start-up business.
Emotional self-control was one of the lowest demonstrated competencies. A person
who demonstrates emotional self-control “manages their impulsive feelings and distressing
emotions well,” is able to “stay composed even in trying moments,” and is able to “think
clearly and stay focused under pressure” (Goleman, 1998: 82). Since we expected that this
would be one of the highest demonstrated competencies for successful entrepreneurs, we
examined the individual questionnaire items to see if one or two items contributed to the
current score. Of four items in the scale, two of the items were lower than others (Mean =
2.90 and 3.28). They were “resist impulse to act immediately,” and “get impatient and show
frustration.” The item analysis provided a clearer explanation. Taken together, these find-
ings may represent the entrepreneurial personality and behaviors associated with moving
416 RHEE AND WHITE

quickly to seize opportunities and becoming impatient and frustrated when these actions
do not produce desirable results immediately.
An unexpected finding was that both initiative and adaptability were also lower among
the survey respondents. A person who demonstrates initiative is “ready to seize opportu-
nities, pursue goals beyond what’s expected of them, cut through the red tape and bend
the rules, and mobilize others through unusual, enterprising efforts” (Goleman, 1998:
122). A person who demonstrates adaptability can “smoothly handle multiple demands
and shifting priorities, and adapt their responses to fit fluid circumstances” (Goleman,
1998: 95). As with emotional self-control, we examined the individual questionnaire items
to see if one or more items contributed to the current scores. For initiative, the items
included “seeks information in unusual way” and “hesitates to act in unfamiliar situa-
tions.” Finding lower levels of the second item offers an explanation for the findings.
While entrepreneurs are often forced to act in unfamiliar situations, the notion of “calcu-
lated risk taking” is based on the assumption that entrepreneurs seek information in order
to make decisions and, prior to moving forward, to exploit opportunities. Moreover, while
those decisions may appear risky to others, the entrepreneur has reduced his feelings of
risk and “unfamiliarity” associated with pursuing a particular opportunity or set of oppor-
tunities through these information and experience gathering activities. Similarly, for
adaptability, the item “uncomfortable with ambiguity” contributed greatly to its scale
score. Again, this may also fit with the concept of “calculated risk taking” and the infor-
mation and experience gathering associated with this perspective.
Relationship Between Demographics, Firm-specific Data, and Emotional Intelligence
Correlation coefficients were computed among demographic and firm-specific variables,
and 18 emotional competencies. In order to control for Type I error across the correlations,
a p-value of less than .01 was required for significance. The correlations between age and
years as entrepreneur, and age and trustworthiness, were significant (See Table 3). The
correlations between the variable years as entrepreneur, and the following variables, were
significant: number of firms founded, number of years since founding firm, initiative, and
conflict management. The correlations between the variable number of firms founded and
initiative and change catalyst were significant. The correlations between the variable num-
ber of employees and the following variables were significant: accurate self-assessment;
trustworthiness; achievement orientation, and conflict management. In other words, the
number of years as an entrepreneur was closely related to the entrepreneur’s age, number
of firms founded, number of years since the founding of the firm, initiative and conflict
management. The number of firms founded is closely related to initiative and change cat-
alyst, and finally the number of employees is closely related to trustworthiness, accurate
self-assessment, achievement orientation, and conflict management. Age was also close-
ly related to trustworthiness.
In order to determine which variable might contribute most to the differences observed
in the demographic variables, several multiple regression analyses using the stepwise
method were conducted using all 18 emotional competencies as predictors for a set of cri-
terion variables such as number of years being entrepreneur, number of firms started. The
multiple regression analysis has shown to be an effective tool for testing the validity of
each predictor’s contribution to the outcome measures.
For the variable number of years being entrepreneur, only initiative was significantly
related to the dependent variable, r2 = .077, adjusted r2 = .071, F (1, 156) = 13.05, p = .000.
For the variable the number of firms founded, only initiative once again was found to be
THE EMOTIONAL INTELLIGENCE OF ENTREPRENEURS 417

Table 3. Correlational Analysis of Demographic Variables with Emotional Competencies

Number of
Years being Number of Number of
Age years since
entrepreneur firms founded Employees
founding firm
Age .359** 0.007 .185 0.078
Years being entrepreneur .359** .496** .375** .162
Number of firms founded 0.007 .496** -0.013 .204
Number of years since
.185 .375** -0.013 0.09
founding firm
Number of Employees 0.078 .162 .204 0.09
Emotional Self-Awareness 0.027 0.033 0.025 -0.045 0.147
Accurate Self Assessment 0.078 -0.014 -0.042 -0.074 .211**
Self-Confidence 0.074 0.133 0.152 -0.072 0.111
Emotional Self-Control 0.052 -0.049 -0.027 -0.008 0.151
Trustworthiness .214** .158 0.124 -0.08 .209**
Adaptability -0.093 0.102 0.14 -0.134 0.089
Achievement Orientation 0.026 .167 0.133 -0.056 .244**
Initiative -0.002 .278** .288** -0.101 .168
Optimism -0.032 0.049 0.146 -.192 0.113
Organizational Awareness 0.113 -0.024 -0.066 -0.035 0.053
Service Orientation 0.078 0.031 0.014 0.036 0.003
Empathy 0.1 0.028 -0.04 0.001 .174
Developing Others 0.094 0.098 -0.018 -0.122 .177
Inspirational Leadership 0.135 0.122 0.098 -0.159 0.031
Influence 0.05 0.146 .174 -0.137 .188
Change Catalyst -0.006 .193 .225** -0.122 0.148
Conflict Management 0.106 .219** 0.081 -0.045 .254**
Teamwork and
0.015 -0.029 -0.019 -0.147 .195
Collaboration
** Correlation is significant at the 0.01 level 2-tailed).

significantly related, r2 = .083, adjusted r2 = .077, F(1,155)= 13.99, p = .000). For the vari-
able the number of years since founding the firm, only optimism was found to be signifi-
cantly related in the negative direction, r2 = .037, adjusted r2 = .031, F (1,149) = 5.727, p =
.018. For the variable the number of employees, conflict management was found to be sig-
nificantly related to the dependent variable, r2 = .065, adjusted r2 = .058, F (1, 152) = 10.5,
p = .001.
Ordinal Regression (PLUM) was conducted using all 18 emotional competencies as
predictors and revenue as the dependent variable. The overall analysis showed that the
dependent variable revenue is significantly related to the combination of emotional com-
petencies and the goodness-of-fit measure was not statistically significant (χ2 (942, N=
161) = 919.963, p = .690). In the regression equation, achievement and conflict manage-
ment positively contributed (p < .05) whereas service orientation negatively contributed
(p < .05).
A series of one-way analysis of variance was conducted to evaluate the relationship
between each of the emotional competencies and the dependent variables gender, type of
ownership, revenues, and type of industry. The ANOVA test has shown to be effective in
testing whether means on a dependent variable are significantly different among individ-
ual groups. For gender, the ANOVA was significant for emotional self-control, F (1, 159)
= 4.077, p = .045, and optimism, F (1,159) = 5.045, p = .026 (See Table 4).
418 RHEE AND WHITE

Table 4. Summary of gender comparison on two emotional competencies

Competency Gender N Mean SD
Male 136 3.68 .55
Emotional Self-control
Female 25 3.44 .53
Male 136 4.26 .46
Optimism
Female 25 4.03 .53

Given the sensitivity involving any gender differences observed in the study, individ-
ual items in each competency were examined to see if any one or two items in the ques-
tionnaire contributed most to the observed difference. An independent-sample t-test was
conducted on each individual questionnaire item within the competency to evaluate its
unique contribution. For emotional self-control, the item “behave calmly in stressful situ-
ations” was statistically significant, t (159) = -2.047, p = .042. Male entrepreneurs (M =
4.22, SD = .791) demonstrated this behavior more frequently than female counterparts (M
= 3.88, SD = .833). For optimism, the items “pessimistic about setbacks” and “sees oppor-
tunity rather than threats” were statistically significant, t (159) = -2.218, p = .028 and t
(159) = -2.38, p = .018 respectively. For the item “pessimistic about setbacks,” the scores
were reverse coded, and male entrepreneurs (M = 3.66, SD = .8) demonstrated this behav-
ior less frequently than female counterparts (M = 3.28, SD = .737). For the item “sees
opportunities rather than threats,” male entrepreneurs (M = 4.41, SD = .683) demonstrat-
ed this behavior more frequently than female counterparts (M = 4.04, SD = .889).
For the independent variable ownership, the ANOVA was significant for achievement
orientation, F (5, 155) = 2.694, p = .023, and conflict management, F (5, 155) = 3.166, p
= .009. Given the overall significance for these competencies, follow-up tests were con-
ducted to evaluate pairwise differences among the means. We conducted post hoc com-
parison using the Scheffe test and the results of these tests are reported in Table 5. There
was only one significant difference in the means between the family business group and
the privately owned non-family group for conflict management and none were significant
for achievement orientation.
Discussion
The current research was entirely based on the data collected via self-assessments of the
emotional intelligence of entrepreneurs. Self-assessment has not been known to be high-
ly reliable; however, research on self-reported instruments has shown that the low relia-
bility might be more of a myth than a reality (Fox and Dinur, 1988; Furnham and
Stringfield, 1994). Cheung (1999) found that self-ratings possessed accurate components
and had lower measurement errors than supervisor ratings on certain performance dimen-
sions. Other research has also shown that increased self-awareness helps reduce the gap
between self-reported instruments and actual behavior (Fazio and Zanna, 1976; Pryor et
al., 1977). In one such study, when the subjects were more self-aware, they were more
likely to reconcile self-reports with their prior behaviors and “to achieve a consistent rela-
tionship with actual behavior” (Pryor and et al., 1977: 526).
The accuracy of self-ratings and performance levels is also related to a personality
characteristic of the rater. For example, it has been argued that higher performers have
greater self-awareness than weaker performers (Atwater and Yammarino, 1992; Bass and
Yammarino, 1991; Carless et al., 1998). Since all study participants are highly successful
young entrepreneurs, it is possible that they possess a higher level of self-awareness than
typical entrepreneurs. Given recent research findings on the usefulness of self-assessment,
THE EMOTIONAL INTELLIGENCE OF ENTREPRENEURS 419

Table 5. Differences among ownership groups on emotional competency demonstration

Publicly owned
Self-employed

Private owned

Professional
Partnership
Ownership

Franchisee
Business
Family
Emotional
Competence M SD

Achievement Self-Employed (n = 25) 4.1 .55 NS NS NS NS NS NS

Orientation Family Business (n = 24) 4.19 .59 NS NS NS NS NS NS
Private owned (n = 101) 4.4 .48 NS NS NS NS NS NS
Franchisee (n = 3) 4.92 .14 NS NS NS NS NS NS
Publicly owned (n = 2) 4.38 .88 NS NS NS NS NS NS
Professional Partnership
4.13 .77 NS NS NS NS NS NS
(n = 6)
Conflict Self-Employed (n = 25) 3.6 .52 NS NS NS NS NS NS
Management Family Business (n = 24) 3.45 .53 NS NS * NS NS NS
Private owned (n = 101) 3.88 .54 NS NS NS NS NS NS
Franchisee (n = 3) 3.92 .80 NS NS NS NS NS NS
Publicly owned (n = 2) 4.25 .35 NS NS NS NS NS NS
Professional Partnership
3.83 .63 NS NS NS NS NS NS
(n = 6)
NS = statically non-significant at p = .05
* = statistically significant at p = .05

the results provided in the study might still be valuable as a first step in exploring the rela-
tionship between emotional intelligence and entrepreneurship. However, our findings
should be treated as preliminary, and further research, especially incorporating others’
feedback would be helpful in confirming our findings.
The results obtained in this study were somewhat consistent with previous studies
(Begley and Boyd, 1987; Drucker, 1985; McClelland, 1961; Spencer and Spencer, 1993).
Spencer and Spencer (1993) found that achievement traits (initiative, seeing and acting on
opportunities, persistence, concern for high-quality work), personal maturity (self-confi-
dence), controlling and directing (monitoring), and orientation to others (recognizing the
importance of business relationships) distinguished superior-performing entrepreneurs
from typical entrepreneurs. A higher level of demonstration for self-confidence, achieve-
ment orientation, change catalyst, and teamwork and collaboration were seen in both stud-
ies; however, while Spencer and Spencer (1993) found a high level of demonstration for
initiative, initiative was one of the low scoring competencies in our study. It was also sur-
prising that adaptability did not rank among the top competencies demonstrated by the
participating entrepreneurs. However, it should be noted that study participants scored
higher than the norm. Moreover, contrary to the popular myth of autonomous and indi-
vidualistic entrepreneurs (McClelland, 1961), our entrepreneurs reported a higher level of
demonstration of teamwork and collaboration compared to other competencies in the
study.
We were intrigued to find that trustworthiness ranked as the highest demonstrated
competency among participating entrepreneurs. It is possible that the recent corporate
scandals might have heightened sensitivity toward trustworthiness and tapped on the
increased social desirability of this competency among the respondents (Metzner and
Mann, 1952; Weiss and Dawis, 1960). Further research is needed in this area to assess the
importance of trustworthiness in the entrepreneurial process. In particular, assessments by
420 RHEE AND WHITE

others may provide a better measure of this competency since trustworthiness is ultimate-
ly an assessment others make of an individual.
Furthermore, we found the lower level of demonstration for initiative and adaptabili-
ty interesting. Despite explanations offered earlier associating these findings with the cal-
culated risk-taking of entrepreneurs, it could be that even successful entrepreneurs find it
difficult to deal with uncertainty and ambiguity. This finding may indicate the high impor-
tance of being able to deal with uncertainty and ambiguity in the entrepreneurial process
and may be an important argument in favor of entrepreneurship education and other pro-
grams that help prepare individuals for the challenge of opportunity recognition and
exploitation.
Interestingly, other studies on emotional competencies of outstanding managers or
professionals using the ECI have yielded results that are in some ways similar but in other
different from our study of entrepreneurs. For example, Cavallo and Brienza (2002), while
studying 358 managers across Johnson and Johnson Consumer and Personal Care group,
found that like our study participants, they demonstrated higher levels of self-confidence,
achievement orientation, and change catalyst. Yet, unlike our study participants, the man-
agers in this study also scored highest on initiative and inspirational leadership. Stagg and
Gunter (2002) found in their study of firefighers and officers that outstanding leaders
demonstrated higher levels of emotional self-awareness, self-confidence, achievement
orientation, organizational awareness, developing others, inspirational leadership, and
conflict management. Again, similar to our study participants in self-confidence, achieve-
ment orientation and conflict management, but unlike the entrepreneurs in this study,
these leaders also scored highest on emotional self-awareness, organizational awareness,
developing others and inspirational leadership.
In the correlational analysis, a number of variables emerged as significantly related to
success—longevity, and growth of entrepreneurial activity. One of the interesting findings
was that age is significantly correlated with the variables number of years as an entrepre-
neur and trustworthiness. Although the first relationship between age and number of years
being an entrepreneur seemed intuitive, the relationship between age and trustworthiness
was interesting and might call for additional research. The number of years one has been
an entrepreneur was also closely related to number of firms founded, number of years
since founding the first firm, initiative, and conflict management. Not surprisingly, con-
flict management also appeared prominently in the relationship with the number of
employees. Multiple regression analyses seemed consistent with the correlational analy-
ses—both initiative and conflict management appeared statistically significant to number
of years as an entrepreneur, number of firms founded, and number of employees.
Another interesting finding was the negative direction for optimism and number of
years since founding the firm. One might argue that entrepreneurs are most optimistic
when initiating a new venture and that optimism is likely to be tempered with a huge dose
of reality as the firm becomes more established and deals with the challenges of growing
and maintaining a business venture. Revenue was predicted by overall emotional compe-
tencies, but especially achievement and conflict management were dominant variables.
Interestingly, service orientation was negative in direction as it related to revenue. The
predictive variables achievement orientation and conflict management seemed consistent
with the earlier findings (Spencer and Spencer, 1993), but the negative relationship with
service orientation was unexpected. It seemed more logical that providing excellent serv-
ice to customers would reap benefits in terms of revenue growth. However, the results
THE EMOTIONAL INTELLIGENCE OF ENTREPRENEURS 421

might suggest that this relationship is more complex and further study of this finding is
warranted. For example, market characteristics and industry type are likely to confound
this finding.
Although variables such as initiative and achievement orientation—the traits often
associated with individualistic drive and achievement—were prominent in our analysis,
social skills such as change catalysts and conflict management also emerged as important.
This finding seemed to support the importance of social management skills in the oppor-
tunity recognition and exploitation processes.
The level of demonstration for emotional self-control and optimism were different
among male and female entrepreneurs. Among the survey respondents, males demon-
strated more emotional self-control and optimism. In other words, male entrepreneurs per-
ceive themselves as behaving more calmly in stressful situations, being less pessimistic
about setbacks, and seeing opportunities rather than threats. One explanation for this
might lie in the different ways men and women perceive themselves. In other words,
women might be harsher in their self-assessments. Assessment by employees, team mem-
bers and peers (360-degree feedback assessment) may lend insight into this finding.
Another explanation may be that female entrepreneurs may have more stress and be less
optimistic due to the differing expectations of them as mothers and women in our socie-
ty. For example, many women are still the primary caretakers of their children and there-
fore may have more stress from demands outside of their business (Thornton, 1999). The
survey also examined age and the number of years being entrepreneurs to see if the level
of experience between male and female entrepreneurs was different. The results of the
independent samples t-tests showed no statistical significance.
Implications
Despite the exploratory nature, this research is important to our understanding of entre-
preneurs and the entrepreneurial process. In particular, the findings may be of interest to
three groups: practicing entrepreneurs who wish to enhance their entrepreneurial skills in
an effort to growth their business ventures; entrepreneurship research scholars who strug-
gle with definitions of entrepreneurs; and entrepreneurship educators who are faced with
preparing prospective and nascent entrepreneurs.
Entrepreneurs
The participating entrepreneurs reported that they demonstrated higher levels of self-con-
fidence, trustworthiness, achievement orientation, service orientation, empathy, change
catalyst, and teamwork and collaboration in comparison to other competencies in the
questionnaire. In addition, these competencies seemed qualitatively higher when com-
pared to the norm in the overall population. These findings may be of interest to entre-
preneurs as they consider how to enhance their leadership skills.
Moreover, the importance associated in our findings with trustworthiness, teamwork
and collaboration is of significance. Trustworthiness is commonly thought of as a combi-
nation of character and competence. Teamwork and collaboration depend upon trustwor-
thiness and good communication skills. Fortunately, all of these aspects of entrepreneur-
ial leadership can be enhanced through focus and skill development and thus these find-
ings can prove useful to entrepreneurs.
Entrepreneurship Scholars
The findings of this study draw attention to a number of assumptions and beliefs that are
422 RHEE AND WHITE

associated with the entrepreneurial process. For example, our finding that even successful
entrepreneurs are concerned about the uncertain and ambiguous environments under
which the entrepreneurial process occurs may shed light on the risk orientations of entre-
preneurs. Entrepreneurs have been described as taking calculated risks, and this research
may support the importance of information gathering and preparation in the entrepre-
neurial process over a personal orientation toward or aversion for risk.
Additional research into the differences in the self-assessments of male and female
entrepreneurs regarding their abilities to effectively deal with stress may be of importance
given the preliminary findings of this study. Based on these preliminary findings, pro-
grams that could help women improve their ability to negotiate the stress of the entrepre-
neurial process could enhance the effectiveness of female business owners and improve
the chances of success among female owned companies.
Entrepreneurship Educators
The findings of this research also have implications for entrepreneurship educators. The
critical role entrepreneurs and the entrepreneurial process play in society have ignited
tremendous interest in management education, and in recent years the number of entre-
preneurship education programs has skyrocketed (Kuratko and Hodgetts, 2001). Yet, “few
empirical findings exist to assist in the pedagogical design of contemporary entrepreneur-
ship education” (Honig, 2004). In fact, there seems to be a limited focus on integrating
entrepreneurial theory into the classroom and also a lack of consensus for the content and
structure of entrepreneurship curriculum. For instance, Fiet (2001) analyzed the content
of 18 syllabi provided by participants at a retreat for entrepreneurship scholars and found
a wide divergence of themes covering 116 different topics in the syllabi just among those
few courses.
While follow-up research that builds on this exploratory study is required, we encour-
age entrepreneurship educators to think deeply about how the development of emotional
intelligence competencies can be incorporated into entrepreneurship education. For exam-
ple, given the perceived importance and high levels of demonstration of trustworthiness,
it is a reminder that entrepreneurship educators should examine whether integrity and
ethics are fully incorporated into the entrepreneurship curriculum. In addition, the ability
to deal with uncertainty and ambiguity seems to be a challenge that needs to be continu-
ally addressed by entrepreneurs and it may be important for entrepreneurship education
programs to help students learn methods of dealing more effectively with the uncertainly
and ambiguity present in the entrepreneurial process.
Contact Information
For further information on this article, contact
Kenneth S. Rhee, Department of Management and Marketing, Northern Kentucky University,
Highland Heights, KY 41099
Telephone: (859) 572-6310
E-mail: [email protected]
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