The Dark Side of Entrepreneurship

Posted: 17 Nov 2009

See all articles by Manfred F.R. Kets de Vries

Manfred F.R. Kets de Vries

INSEAD - Entrepreneurship and Family Enterprise

Date Written: 1985

Abstract

Many entrepreneurs have personality traits and behaviors that allow them to succeed in their businesses; however, these same traits can often prove detrimental in their roles as managers or co-workers. The energy necessary for achieving a business dream may have origins in desires and needs that can be dysfunctional in the business setting. This is the dark side of entrepreneurship. Report is based on observance and interviews of 38 entrepreneurs in a wide range of industries in the United States and Canada. Many entrepreneurs have a need for control and are suspicious about authority. Hence, they can find it difficult to work with others in structured situation where they are not in control (unless they created the structures and work is done on their own terms). Offering the deference needed of a subordinate is difficult. Obsessive concern with detail, for example, can stifle an organization, inhibit managers, and prevent accountability. They can be poor collaborators. Many entrepreneurs distrust the world around them and fear being a victim; they scan the environment anticipating the worst; they can lose sight of the reality of situations. Ill consequences can be augmented when joined with a need for control. Many entrepreneurs have an overriding need for applause and recognition. This drive can be jeopardize a company's financial position. Many entrepreneurial behaviors are a result of the psychological defenses people use: they idealize then vilify to extremes, project problems onto others, deny responsibility, or flee into action. Venture capitalists and corporate CEOs can adopt some strategies to avoid pitfalls in working with these entrepreneurs. They should respect the entrepreneur's need for independence, design control and information systems accordingly, and find ways to ensure the autonomy of acquired companies. In acquisitions attention should be paid to the quality of management that will come with the deal, and consider how the two company cultures will fit together. Instead of fighting the entrepreneur's idiosyncracies, managers should adapt to them and regard developing them as a challenge. (TNM)

Keywords: Firm performance, Management techniques, Management skills, Motivation, Autonomy, Behavior (individual), Psychological traits

Suggested Citation

Kets de Vries, Manfred F.R., The Dark Side of Entrepreneurship (1985). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1505242

Manfred F.R. Kets de Vries (Contact Author)

INSEAD - Entrepreneurship and Family Enterprise ( email )

Fontainebleau Cedex, F-77305
France

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