1. Tourism & Hospitality Management
MNG00427
Entrepreneurship in Tourism
and Hospitality
Written by: Nerilee Hing
Revised by: Roberta Querin
Study Guide Fourth edition

2. © 2011 Southern Cross University
Southern Cross University
Military Road
East Lismore NSW 2480
No part of this publication may be reproduced, stored in a retrieval system or
transmitted in any form or by means electronic, mechanical, photocopying, recording
or otherwise without the prior written permission of the publisher.
Copyright material indicated in this work has been copied under Part VB of the
Copyright Act 1968.
Fourth edition 2011

3. Contents
Introduction ................................................................................................................................... 5
Topic 1 Perspectives on entrepreneurship...................................................................... 7
Introduction .................................................................................................................... 7
Beyond the literal meaning of entrepreneurship ............................................................ 8
An economic perspective on entrepreneurship .............................................................. 9
A psychological perspective on entrepreneurship ........................................................ 12
A sociological perspective on entrepreneurship ........................................................... 14
A management perspective on entrepreneurship .......................................................... 15
Schools of thought on entrepreneurship ....................................................................... 18
A process approach to entrepreneurship....................................................................... 18
Conclusion .................................................................................................................... 21
Topic 2 Personal and sociological influences on entrepreneurship .................. 23
Introduction .................................................................................................................. 23
Psychological and personal influences on entrepreneurship ........................................ 24
Sociological influences on entrepreneurship ................................................................ 32
Female entrepreneurs ................................................................................................... 33
Ethnic entrepreneurs ..................................................................................................... 38
Typologies of entrepreneurs ......................................................................................... 42
Conclusion .................................................................................................................... 46
Topic 3 Environmental influences on entrepreneurship.......................................... 47
Introduction .................................................................................................................. 47
Types of environmental influences on new venture creation ....................................... 48
Government influences on new venture creation in Australia...................................... 50
Socio-economic influences on new venture creation in Australia................................ 52
The influence of entrepreneurial and business skills on new venture creation
in Australia ................................................................................................................... 54
The influence of financial assistance on new venture creation in Australia ................. 54
The influence of non-financial assistance on new venture creation in Australia.......... 55
Environmental influences on new venture creation in tourism and hospitality
industries ...................................................................................................................... 56
Conclusion .................................................................................................................... 58
i

4. ii MNG00427 – Entrepreneurship in Tourism and Hospitality
Topic 4 Opportunity recognition and evaluation......................................................... 61
Introduction .................................................................................................................. 61
Towards innovation ...................................................................................................... 62
From ideas to opportunities .......................................................................................... 63
Generating ideas ........................................................................................................... 64
Evaluating ideas and opportunities .............................................................................. 73
Screening opportunities ................................................................................................ 81
Conclusion .................................................................................................................... 81
Topic 5 Planning the new venture..................................................................................... 83
Introduction .................................................................................................................. 83
Use a business plan ...................................................................................................... 84
Outline of a business plan ............................................................................................ 85
Introductory page ......................................................................................................... 86
Executive summary ...................................................................................................... 87
Overview of the venture ............................................................................................... 87
Industry and market analysis ........................................................................................ 89
The production plan ..................................................................................................... 93
The marketing plan....................................................................................................... 94
The organisational plan ................................................................................................ 97
Schedule of operations ................................................................................................. 98
Critical risks and problems ........................................................................................... 99
The financial plan ......................................................................................................... 99
Appendices ................................................................................................................. 101
Conclusion .................................................................................................................. 102
Topic 6 Legal and financial issues during start-up .................................................. 103
Introduction ................................................................................................................ 103
Business structures ..................................................................................................... 104
Protecting your ideas .................................................................................................. 105
Insurance issues .......................................................................................................... 107
Planning issues ........................................................................................................... 108
Business premises leases ............................................................................................ 108
Employee issues at start-up ........................................................................................ 110
Other business relationships ....................................................................................... 112
Taxation ...................................................................................................................... 113
Financial issues .......................................................................................................... 113
Conclusion .................................................................................................................. 117

5. MNG00427 – Contents iii
Topic 7 Entry strategies for the new venture ............................................................. 119
Introduction ................................................................................................................ 119
Use of different business entry strategies ................................................................... 120
Establishing a new venture ......................................................................................... 121
Buying an existing business ....................................................................................... 124
Franchising a business ................................................................................................ 140
Conclusion .................................................................................................................. 143
Topic 8 General management in the entrepreneurial venture........................... 145
Introduction ................................................................................................................ 145
The nature of management ......................................................................................... 146
The study of management .......................................................................................... 146
The management of different size organisations ........................................................ 147
The process of management ....................................................................................... 148
What makes an effective manager? ............................................................................ 149
The nature of managerial work .................................................................................. 149
The manager’s role ..................................................................................................... 150
The relationship between entrepreneurship, management and the organisational
lifecycle ...................................................................................................................... 150
Success and failure of small business ........................................................................ 155
Conclusion .................................................................................................................. 159
References ................................................................................................................................ 161

6. iv MNG00427 – Entrepreneurship in Tourism and Hospitality

7. Introduction
Welcome to MNG00427 Entrepreneurship in Tourism and Hospitality. In the unit,
you will find eight topics. While not separated formally into separate modules, these
topics can be grouped according to the stage of entrepreneurship they relate to – inputs
to the entrepreneurial process, the process of new venture creation, and managing the
entrepreneurial venture. A brief overview of each topic follows.
Inputs to the entrepreneurial process:
Antecedents to the entrepreneurial process
After an introductory topic that provides some different perspectives on
entrepreneurship, Topics 2 and 3 focus on antecedents to the entrepreneurial
process. Topic 2 discusses personal and sociological influences on entrepreneurship,
including common personality traits and social factors that appear to underpin
the entrepreneurial drive. In this topic, we also examine female and ethnic
entrepreneurship to illustrate how contextual factors can contribute to a desire to
establish a new venture.
Topic 3 then examines environmental influences on new venture creation by reviewing
government policies and procedures, socio-economic factors, entrepreneurial business
skills, and financial and non-financial assistance that influence entrepreneurship in the
Australian context. We also look at the industry context for tourism and hospitality to
illustrate that, in addition to the general environment for business, opportunities for
entrepreneurship depend to a large extent on the competitive attractiveness of different
industries.
The entrepreneurial process:
Business planning and creation
Four topics focus on creating a new venture. Topic 4 is concerned with opportunity
recognition and evaluation, in recognition that every successful entrepreneurial
venture is underpinned by an attractive and well-defined opportunity that leads to
innovation. We tap into your creative potential here with many exercises designed to
generate and evaluate entrepreneurial ideas.
Topic 5 gets down to the ‘nuts and bolts’ of business planning. We provide a step-
by-step guide to developing a business plan, a requirement for any new business
which requires financing in the beginning. Also too, the business plan assists the
entrepreneur to know why, where and how their business will proceed. Legal and
financial issues of concern during the pre-start-up phase of venture creation are the
focus of Topic 6, while Topic 7 examines alternative entry strategies for entrepreneurs
– starting a business ‘from scratch’, buying an existing business, and purchasing a
franchised outlet.
Outputs of the entrepreneurial process:
Managing the entrepreneurial venture
Topic 8 completes the unit and focuses on the time period after new venture start-
up. This topic examines general management in the entrepreneurial venture and its
accompanying challenges and opportunities.
So, without further ado, let’s get started!
5

8. 6 MNG00427 – Entrepreneurship in Tourism and Hospitality

9. Topic 1
Perspectives on
entrepreneurship
Introduction
The purpose of this introductory topic is to provide some answers to the questions
‘who are entrepreneurs’ and ‘what is entrepreneurship’? While these questions may
seem fairly straightforward, you will soon discover that there are nearly as many
answers to them as there are practising entrepreneurs and scholars who write on the
topic. To some, entrepreneurs are people who found a new enterprise. Others restrict
use of the term to creative innovators who seek and apply new ways of doing things.
Still others view entrepreneurship as identification and exploitation of an opportunity,
or the process of developing a strategy to capitalise on some niche in the market.
Some definitions equate entrepreneurs to small business owner-managers, while others
argue that entrepreneurship also can occur in large corporations.
One reason for this diversity of definitions is that scholars have approached the
study of entrepreneurship from different disciplinary perspectives, including
economics, psychology, sociology and management. Thus, the economist might view
entrepreneurship as the process of creating and distributing wealth; the psychologist
sees the entrepreneur as distinguished by certain personal qualities like high need
for achievement and creativity; the sociologist is interested in contextual factors that
might encourage entrepreneurship such as its social value and acceptance, or the
presence of appropriate role models; meanwhile, management theorists usually are
most interested in how entrepreneurs establish, organise and manage a business and its
resources, and assume risks for the sake of profit.
One way of coming to terms with the many and varied views on entrepreneurship is
to group them into a smaller number of categories reflecting the various disciplinary
perspectives from which they emanate. While the disciplinary perspectives reviewed
in this topic are not exhaustive, they do draw on the most influential ones in the field
and their leading thinkers. An alternative, although complementary, categorisation is
offered by reviewing various ‘schools of thought’ on entrepreneurship. In this topic,
we look at one such categorisation.
Finally in this topic, we offer a framework of the entrepreneurial process on which the
remainder of this unit is structured. It follows a logical progression from focusing on
antecedents to entrepreneurship, through opportunity recognition, business planning
and creation, to managing the entrepreneurial venture at start-up and through growth.
It is hoped through our discussion in this topic that you gain both an historical
appreciation of the role of entrepreneurship over the last few centuries, and a firm
basis for understanding the entrepreneurial process in contemporary times.
7

10. 8 MNG00427 – Entrepreneurship in Tourism and Hospitality
Objectives
After completing this topic, you should be able to:
• explain the key focus of economic, psychological, sociological and management
perspectives on entrepreneurship
• compare how prominent scholars have defined entrepreneurs and entrepreneurship
• apply different schools of thought in entrepreneurship to case studies on the
entrepreneurial process in tourism and hospitality
• identify the key inputs, process and outputs of entrepreneurship.
Textbook
Schaper, M, Volery, T, Weber, P & Lewis, K 2011, Entrepreneurship and Small
Business, 3rd Asia-Pacific edn, John Wiley and Sons, Australia.
• Chapter 1, pp. 3–23.
Readings
1.1 Filion, J 1998, ‘From Entrepreneurship to Entreprenology: The Emergence of a
New Discipline’, Journal of Enterprising Culture, Vol. 6, No. 1, March, pp. 1–23.
1.2 Cunningham, JB & Lischeron, J 1991, ‘Defining Entrepreneurship’, Journal of
Small Business Management, Vol. 29, No. 1, January, pp. 45–61.
1.3 Sasser, WE & Klug, J 1988, ‘Benihana of Tokyo’ in CH Lovelock (ed.), Managing
Services: Marketing, Operations and Human Resources, 1st edn, Prentice-Hall
International Inc., New Jersey, pp. 44–57.
Beyond the literal meaning of entrepreneurship
The words entrepreneurship and entrepreneur are derived from the French
entreprendre, which literally means ‘to undertake’. When the word was first used
in 17th century France, the term entrepreneur applied specifically to people who
undertook to lead military expeditions (Cunningham & Lischeron, 1991, p. 50).
However, contemporary usage of the terms entrepreneurship and entrepreneur differs
substantially from their early derivation. Thus, some of this first topic is devoted to
reviewing how the meanings of entrepreneurship and entrepreneur have evolved since
then. This review has three broad purposes.
First, defining these key terms is important to clarify the main phenomena we are
going to study in this unit. If we are interested in who entrepreneurs are, why they
become entrepreneurs and their distinguishing characteristics, and if we are to succeed
in clarifying what the entrepreneurial process involves and how to do it well, then we
need first to distinguish entrepreneurs from non-entrepreneurs, and entrepreneurship
from other non-entrepreneurial activities.
The second broad reason for reviewing how these terms have evolved is to provide an
historical perspective on the role of entrepreneurs and entrepreneurship so we might
better understand their place in modern society and in contemporary tourism and
hospitality industries.
A third rationale for reviewing how the concepts of entrepreneur and entrepreneurship
have evolved is to draw your attention to the different disciplinary perspectives that
have influenced the field. Recall the fable of the blind men and the elephant, where
one man felt its trunk and described the elephant as a snake; another felt its knee and
thought it resembled a tree; yet another felt its side and compared it to a wall; while
another felt its tusk and described the elephant as a spear. The point is that usually

11. MNG00427 Topic 1 – Perspectives on entrepreneurship 9
we can only gain a complete understanding of a certain phenomena by understanding
the whole. And in our quest to understand the whole ‘elephant’ of entrepreneurship,
we need to understand its parts. That is, an elephant is more than a trunk, but we
can hardly attempt to understand an elephant without some reference to its trunk.
So it is in entrepreneurship. Various scholars have advanced theories and ideas that
explain various parts of the ‘elephant’ of entrepreneurship, yet an overarching theory
of its entirety does not exist. Still, we can learn from examining these parts in our
attempt to explain the whole. Towards this end, we’ll be examining entrepreneurs
and entrepreneurship from economic, psychological, sociological and management
perspectives. Each of these perspectives can contribute to our understanding of
entrepreneurship and of the key players in this process, the entrepreneurs.
Before we proceed however, try the first activity to help you focus your thoughts.
a Activity
How would you define an entrepreneur and entrepreneurship?
f Feedback
If we could all compare our answers, I’m sure there would be a great deal of variation.
For now, let’s proceed to see how economists, psychologists, sociologists and
management scholars have defined entrepreneurs and entrepreneurship. At the end
of our discussion, you will find it useful to revise your definitions.
An economic perspective on entrepreneurship
Much early interest in entrepreneurship stemmed from the field of economics.
Economic theory is concerned with two major questions about society – how does a
society create new wealth and how does a society distribute wealth (Kirchhoff 1997,
p. 445)? Economists have thus viewed entrepreneurship as a major mechanism for
ensuring both wealth creation and its distribution.
The French economist Richard Cantillon is generally credited with giving the concept
of entrepreneurship a central role in economics (Holt 1992, p. 3). He described an
entrepreneur as a person who pays a certain price for a product to then resell it at an
uncertain price, thereby making decisions about obtaining and using resources and
so assuming the risk of enterprise (Cantillon 1755, in Higgs 1931). A critical point in
Cantillon’s conception of entrepreneurs is that they consciously make decisions about
resource allocations, and so seek the best opportunities for using these resources to
yield the highest commercial benefit (Holt 1992, p. 3). Marco Polo can be considered
an example of Cantillon’s interpretation. In establishing trade routes to the Far East,
Marco Polo bought goods at a known price, to then resell them on his return in the
hope of making a profit. Thus, Marco Polo clearly identified a commercial opportunity,
obtained resources from financiers, allocated these and other resources to his journeys,
and bore the associated risks of these ventures (Hisrich & Peters 1989, pp. 6–7).
Cantillon’s view of the entrepreneur is illustrated by Thomas Cook’s development
of packaged tours from the mid-1800s. Identifying a commercial opportunity arising
from an expanding railway network and peoples’ growing desire to travel away for
holidays, Thomas Cook organised the various components or resources for each tour,
and then resold them as a package with the intention of making profits. Modern day
tour operators perform a similar function.
Some ten years after Cantillon’s writings and in a book credited with founding
classical capitalist economic theory, The Wealth of Nations (1776), Adam Smith
referred to the ‘enterpriser’ as an individual who undertook the formation of an

12. 10 MNG00427 – Entrepreneurship in Tourism and Hospitality
organisation for commercial purposes. He ascribed to the entrepreneur the role of
industrialist, but also viewed entrepreneurs as people with unusual foresight who
could recognise potential demand for goods and services. Thus, entrepreneurs
transformed market demand for goods and services into the supply of those goods and
services (Holt 1992, p. 3). Thomas Cook clearly possessed the foresight to recognise
latent demand for packaged tours, and so created a commercial enterprise to cater for
this demand.
e Think …
About Smith’s interpretation of an entrepreneur as reacting to market demand. Is
this the whole story? Might entrepreneurs also play a more proactive role by creating
market demand where none existed before? You might consider the Thomas Cook
example in this light.
Jean Baptiste Say was another early economist with an interest in entrepreneurship.
Writing in the early 1800s, he regarded economic development as the result of venture
creation (Filion 1998, p. 2). While he agreed with Cantillon that entrepreneurs are
influenced by societal forces to recognise needs and to meet those needs though astute
management of resources, Say also recognised that entrepreneurs ‘unite all means
of production’ (1816, p. 28) and so influence society by creating new ventures (Holt
1992, p. 4). He observed that an entrepreneur must possess:
… judgement, perseverance, and a knowledge of the world as well as of
business. He is called upon to estimate, with tolerable accuracy, the importance
of the specific product, the probable amount of the demand, and the means of its
production: … he must possess the art of superintendence and administration.
(Say 1803, p. 104)
Thus, Say’s entrepreneur was a manager-entrepreneur (O’Neile 1989, p. 39). However,
in identifying his entrepreneur, Say drew the important distinction between the
entrepreneur and the capitalist, and between their profits, viewing entrepreneurs as
innovators and agents of change (Filion 1998, p. 3). Bob Ansett’s establishment of
Budget Rent-a-Car in Australia in the late 1970s and early 1980s was influenced by
market demand for cheaper car rentals, but it also played a central role in shaping
the car rental industry through breaking Avis’ monopoly for car rentals at Australian
airports and through influencing the pricing structure of the car rental industry.
Thus, Ansett’s actions could be considered entrepreneurial, being an agent of change
driven by market opportunity. As hinted in the previous ‘think’ box, you might have
considered Thomas Cook’s actions in this light as well.
In 1848, John Stuart Mill elaborated on the necessity of entrepreneurship in private
enterprise, and the term entrepreneur subsequently became a common descriptor
for business founders (Holt 1992, p. 4). However, Mill’s view has been criticised
as failing to distinguish between entrepreneurs and business managers (Schumpeter
1949, p. 48), although Mill did stress the risk-bearing role of business founders.
However, under his definition, all founders of businesses in tourism and hospitality
industries bear certain risks and so could be considered entrepreneurs, from Richard
Branson who established Virgin Airlines (along with many other ventures) to the
person owning and operating a hotdog stand in your local shopping centre.
The rise of neoclassical economics at the turn of the century gave little attention
to the entrepreneur. It was assumed that capitalism equitably distributes income
within society through the operation of market forces, and it ignored the role of
entrepreneurs in creating ‘new demand’ (Kirchhoff 1997, pp. 448–449). However,
Joseph Schumpeter disagreed with neoclassical theory that the mechanism of wealth
distribution was driven by competitive markets functioning to achieve equilibrium
between supply and demand. Instead, he observed ‘chaotic markets’ driven by the

13. MNG00427 Topic 1 – Perspectives on entrepreneurship 11
regular appearance of entrepreneurs who enter the market bringing innovations that
challenge established suppliers. He called this process ‘creative destruction’, because
entrepreneurs create new wealth through the process of destroying existing market
structures (Kirchhoff 1997, p. 450).
Thus, Schumpeter viewed innovation as central to the role of entrepreneurs, and the
essence of entrepreneurship as ‘the perception and exploitation of new opportunities
in the realm of business’, using ‘new combinations’ of resources (in Filion 1998,
p. 3). Because these innovations create new demand when entrepreneurs bring new
innovations to the market, entrepreneurs are central to wealth creation and distribution
(Kirchhoff 1997, p. 451). Thus, more is required of Schumpeter’s entrepreneur than
previous perspectives of the entrepreneur as business founder or business manager.
A well-known example that illustrates Schumpeter’s view of the entrepreneur
was the McDonald brothers who revolutionised the hamburger industry, creating
additional demand for hamburgers through using a new combination of resources to
produce standardised, ready-to-eat, takeaway products. Capitalising on growing car
ownership and demand for fast and convenience foods, the McDonald brothers took
an innovative, productionline approach to hamburger preparation, and forever changed
the market and industry structures for fast food. And the rest, as they say, is history.
Later in the 20th century, a group of economists at Harvard University, under
the leadership of Arthur Cole, retained Schumpeter’s focus on innovation in
entrepreneurship, but extended this interpretation to include routine management
functions as a component of the entrepreneurial role, along with adjustments to
external circumstances (O’Neile 1989, pp. 15–16). Cole identified six ‘phases of
entrepreneurial activity’ where there is a ‘constant need for decisions’ and where there
is ‘opportunity for innovation, management, and the adjustment of external conditions’
(in O’Neile 1989, pp. 15–16):
1. determination of business objectives
2. development and maintenance of an organisation
3. securing of adequate financial resources
4. acquisition of efficient technological equipment
5. development of a market for the product
6. maintenance of good relations with public authorities.
Thus, Cole’s writings on entrepreneurship embodied some of the essential elements
which were subsequently extended and developed by numerous researchers in the
following decades (O’Neile 1989, p. 47). However, it was in the fields of psychology,
sociology and management, rather than economics, that much of this progress was
made, as we’ll proceed to review. While economists certainly retain an interest in
entrepreneurship, it has been observed that ‘the economics profession is now in a state
of theoretical turmoil as the dominant neoclassical theory is experiencing increasing
pressure to accommodate entrepreneurship … Much work is required to build a new
theory’ (Kirchhoff 1997, p. 456).
a Activity
For each of the economists discussed above (Adam Smith, Jean Baptiste Say, John
Stuart Mill, Joseph Schumpeter, Arthur Cole) jot down a few words that seem to
best encapsulate their views on the distinguishing functions of entrepreneurs. (One
example is given below.)
Richard Cantillon: opportunist, risk-taker, resource allocator.

14. 12 MNG00427 – Entrepreneurship in Tourism and Hospitality
a Activity
In the preceding discussion, we have identified five examples in tourism and
hospitality industries – Thomas Cook, Bob Ansett, Richard Branson, the owner-
operator of the hotdog stand and the McDonald brothers. Do you consider all these
ventures to be entrepreneurial? Justify your answer in light of the distinguishing
functions of entrepreneurs you identified in the preceding activity.
f Feedback
How did you go? I hope you thought about this before looking at the feedback!
Remember that the value of activities are in the process of thinking through possible
answers, rather than coming up with a ‘correct’ response.
Probably the example above that gave you most concern was the owner-operator of
the hotdog stand. While we might agree that the other examples indeed displayed
innovation, risk-taking, opportunism, astute allocation of resources, superior
management skills, adaptation to the external environment, and creation of new
market demand, this is not so clear for the hotdog operator. Perhaps you thought his/
her actions completely non-entrepreneurial, or perhaps you are starting to think that
there may be degrees of entrepreneurship. We take this up in a later topic when we
look at different types of ventures commonly studied in entrepreneurship.
a Activity
The goal of economic activity is assumed by economists to be the pursuit of profits.
Do you agree that entrepreneurs are driven primarily by profit? Justify your answer.
f Feedback
There is still debate in the literature over this question. Certainly many psychologists
would disagree, arguing that profit is important to entrepreneurs as a measure or
indicator of success, but that profit per se is not their primary motivation. For now,
let’s read on and examine the types of motivations and personal qualities that
psychologists have associated with entrepreneurs.
a Activity
The economic role of entrepreneurship is well illustrated in a history of the Gold
Coast, entitled A Sunny Place for Shady People (Jones, 1986). Jones describes how
entrepreneurs, Stanley Korman and Bruce Small, were largely responsible for sowing
the seeds that transformed the area from ‘merely a place where Brisbane families
could buy a cheap fibro or timber weekender’ in the 1950s to one of Australia’s
premier tourist destinations. Korman’s pioneering developments included Lennon’s
Broadbeach Hotel (opened in 1956), the Chevron Hotel (1957), and Chevron Island
(1960) and he suggested changing the area’s name from the South Coast to Surfers
Paradise. Small’s included numerous residential canal estates which attracted retirees
from the south, and the introduction of the Gold Coast’s famous meter maids.
Think about some other famous tourist destinations you are familiar with. What role
have entrepreneurs played in their economic development?
A psychological perspective on entrepreneurship
From the 1960s, attention turned away from an economic interpretation of
entrepreneurship to a psychological view that attempted to explain the personal
characteristics of entrepreneurs. The major focus of psychology is the behaviour
and mental processes of the individual. It is concerned with studying the actions,
responses, thoughts and emotions of individuals in order to explain their behaviour,

15. MNG00427 Topic 1 – Perspectives on entrepreneurship 13
so as to develop ways in which behaviour can be predicted, controlled or modified
to improve the quality of life in everyday situations (Simons, Irwin & Drinnin 1987,
p. 23).
Thus, from the 1960s, psychologists considered that entrepreneurial success could be
optimised if they could describe, explain and predict the behaviour of entrepreneurs by
identifying the underlying needs, drives, attitudes, beliefs and values that are assumed
to underpin behaviour. Psychologists assume that entrepreneurs project a particular
personality type and researchers have attempted to extract those traits which might be
considered uniquely entrepreneurial (Alizadeh 1999, p. 27).
David McClelland was a pioneer in entrepreneurial research in his attempts to
determine whether entrepreneurs hold a certain psychological set (Brockhaus 1982,
p. 41). He defined an entrepreneur as ‘someone who exercises control over production
that is not just for his personal consumption’ (McClelland 1971). Thus, by his own
admission, entrepreneurs could include not only business founders, but also ‘an
executive in a steel-producing unit in the USSR’ (1971). What was important to
McClelland was not so much the type of venture an entrepreneur operated within, but
his or her psychological traits. In this context, entrepreneurial qualities may or may
not be a prerequisite to business ownership and indeed, some entrepreneurs could
conceivably find a non-business outlet for these traits. One psychological characteristic
which McClelland contended is common amongst entrepreneurs is high need for
achievement, that is a preference to be personally responsible for solving problems, for
setting goals and for reaching these goals through personal effort. From the results of
three studies (1961, 1965, 1969), McClelland maintained that achievement motivation
was the single factor which drew an individual to the entrepreneurial role.
Many other personality factors have been proposed as distinguishing entrepreneurs
from managers, small business owners and the general population. As well as
high need for achievement, the factors most commonly considered to be typically
entrepreneurial include beliefs about locus of control, a propensity to take calculated
risks, a high tolerance of uncertainty and ambiguity, and a range of personal values
such as honesty, integrity, duty and responsibility (Alizadeh 1999, p. 28). Table 1.1
provides some examples of research into personality traits that have been associated
with entrepreneurs. We will be reviewing some of these more closely in a later topic.
Table 1.1 Some personal characteristics of entrepreneurs
• Recognise and take advantage of opportunities
• Resourceful
• Creative
• Visionary
• Independent thinker
• Hard worker
• Optimistic
• Innovator
• Risk taker
• Leader
Source: Kuratko & Hodgetts 2004
Despite numerous efforts between about 1960 and 1980 to identify a set of
psychological traits distinctive to entrepreneurs, a psychological model of
entrepreneurship has not been supported by research (Timmons 1990, p. 161). That

16. 14 MNG00427 – Entrepreneurship in Tourism and Hospitality
is, there is no established profile that allows us to identify potential entrepreneurs
with any certainty (Filion 1998, p. 7). While many entrepreneurs do seem to share
common personality traits, numerous studies have found these traits are not restricted
to entrepreneurs alone. However, while research has not uncovered a central definitive
model of personal characteristics unique to entrepreneurs, the traits identified above do
have some value in describing the ‘entrepreneurial mind’.
e Think …
… about an entrepreneur you have known for a reasonable period of time. Are the
characteristics in Table 1.1 a fair description of his or her personality?
a Activity
In a preceding activity, you were asked to consider whether profit is the main goal of
entrepreneurship. Has your answer changed now that you have read a little on the
psychological approach to the study of entrepreneurship?
f Feedback
While profit may be the main driving force for many entrepreneurs, the psychological
perspective suggests that other factors may be equally or even more important. It
seems that some entrepreneurs might be more driven by a need to achieve, to be in
control, to gain independence, or to meet a challenge. As noted earlier, we’ll examine
more closely the personal motivations and characteristics of entrepreneurs in a later
topic.
A sociological perspective on entrepreneurship
With the failure of psychologists to provide a complete explanation for
entrepreneurship, the concept began to attract the attention of sociologists from
the 1980s, attempting to answer the question – what contextual factors influence
entrepreneurship? Sociological perspectives on entrepreneurship are concerned
with the social context within which entrepreneurship occurs, particularly the social
stimulants to entrepreneurial activity (Alizadeh 1999, p. 29). These can be viewed
at two broad levels: (1) societal factors that affect the acceptance and value of
entrepreneurship and which hinder or facilitate entrepreneurial activity; and (2) social
factors that influence the decisions of individuals to pursue an entrepreneurial career. A
brief overview of these two perspectives is given here, with a more detailed treatment
provided in a later topic.
The first group of societal factors referred to above is concerned with historical,
regional and cultural factors that influence the emergence of entrepreneurship
(Shapero & Sokol 1982, p .73), through prevailing cultural values, role expectations
and social sanctions. Such a view helps to explain why some ethnic groups, such
as Jews, Lebanese and Chinese, tend to engage in entrepreneurial activity, while
for other groups, their social and cultural environments remain largely antipathetic
to entrepreneurship. Shapero and Sokol (1982, pp. 73–74) provide the example
of European Medieval society as one not conducive to entrepreneurship. Social
relationships were fixed, everyone identified with a particular group or class that
had established roles in society and relationships to other groups, advertising was
forbidden, innovation was prescribed by the guilds and social mobility was outlawed.
In such societies, entrepreneurial activity was, by default, left to groups that did not fit
into any of the established classes, such as Jews. These ‘outsiders’ could only survive
by performing new roles, those considered to be outside or beneath the domain of
established groups (Shapero & Sokol 1982, p. 74).

17. MNG00427 Topic 1 – Perspectives on entrepreneurship 15
Numerous other factors have been considered in this first sociological perspective on
entrepreneurship. While some will be explored in more detail in a later topic, these
include aspects of government policies, socio-economic conditions, the extent of
entrepreneurial and business skills, and the availability of financial and non-financial
assistance (Gnyawali & Fogel 1994). For example, entrepreneurial activity is likely to
be discouraged or impossible where most people are in a serf or slave type relationship
to larger economic organisations. Alternatively, economic wellbeing in regions
or countries has been associated with greater entrepreneurial activity or emphasis
(Reynolds 1991, pp. 56–57). Well-focused government policies in Italy and Japan
support and encourage the establishment of small firms (Reynolds 1991, p. 58), while
these would be absent in Communist countries. In countries where there are major
financial or legal impediments to establishing a new business, a significant black
market economy my be present, providing further avenues for entrepreneurial activity
(Reynolds 1991, p. 61). Communities of entrepreneurial firms, such as Silicon Valley
in the US, attract venture capitalists and help nurture a regional culture which further
encourages entrepreneurship.
The second broad set of sociological factors that has attracted research attention in
entrepreneurship relates to social influences on the career choices of individuals.
Again, these will be discussed in more detail later. Such factors include the influence
of negative displacements (such as migration or job retrenchment), job dissatisfaction
(as might be experienced by women who meet the ‘glass ceiling’), lack of career
alternatives (for example, where ethnic refugees or migrants find their skills are not
recognised in their new country or when they face language difficulties), and role
models provided by family, peers or mentors. Age, education and experience seem to
play a role in influencing an individual’s propensity to undertake the entrepreneurial
role.
An obvious example of the role of social factors in entrepreneurship in hospitality
industries can be found in the restaurant sector, where migrants from various ethnic
backgrounds have established their own businesses, often because of language
difficulties in their new country and lack of alternative employment prospects.
a Activity
Talk to some small business operators in your local area and find out what their
main reasons were for establishing their business. Can you identify any sociological
reasons amongst their answers?
f Feedback
Chances are that some of the small business operators you talked to mentioned
some sociological reasons underpinning their decision to start their business.
These sociological factors influencing the entrepreneurial career decision are often
categorised as push or pull factors. Push or negative displacement factors mentioned
by your respondents may have included sudden loss of a job and income, or growing
job dissatisfaction in their former employment. Pull or positive displacement factors
can comprise encouragement from family, friends or a mentor, or a financial windfall
for financing the venture.
A management perspective on entrepreneurship
About the same time that sociologists became interested in entrepreneurship, so too
did management scholars. They were concerned with what entrepreneurs do, or the
activities performed in entrepreneurship, particularly those involved in the process of
creating a new enterprise. In fact, Gartner (1989) argues that ‘who is an entrepreneur?’
is an unfruitful question, leading scholars to assume that entrepreneurs are some kind
of ‘special’ people, thus fuelling a search for their distinctive personal qualities. He

18. 16 MNG00427 – Entrepreneurship in Tourism and Hospitality
suggests a more productive approach is to examine ‘what individuals do to enable
organizations to come into existence?’ (Gartner 1989, p. 63). Thus, some relevant
questions that might be addressed from a management perspective on entrepreneurship
are:
• What is involved in perceiving opportunities effectively and efficiently?
• What are the key tasks in successfully establishing new organisations?
• How are these tasks different from those involved in successfully managing
ongoing organisations?
• What are the entrepreneur’s unique contributions to this process?
(Bygrave & Hofer 1991, p. 16)
Typical activities examined in management studies on entrepreneurship include
recognising a business opportunity, establishing the feasibility of a potential venture,
developing a business plan, gathering the necessary resources, and fulfilling legal
and administrative requirements for venture creation. Once the venture is launched,
management theorists might also be concerned with how the entrepreneur manages,
markets, staffs and operates the new business and nurtures it through growth.
Thus, a management perspective on entrepreneurship sees it as a process. For
example, Hisrich, Peters and Shepherd (2008, p. 9) describe this process as finding,
evaluating and developing opportunities by overcoming strong forces that resist the
creation of something new. They depict the process as comprising four distinct phases
with associated activities, as shown in Table 1.2.
Table 1.2 Aspects of the entrepreneurial process
Identify and evaluate Develop business Resources Manage the
the opportunity plan required enterprise
Creation & length of Characteristics & size Existing resources Management style
opportunity of market segment of entrepreneur & structure
Real & perceived Market plan Resource gaps & Key variables for
value of opportunity Production available supplies success
requirements
Risks & returns of Financial plan & Access to needed Identify problems
opportunity requirements resources & potential
problems
Opportunity vs Form of organisation Implement control
personal skills & goals systems
Competitive situation Positioning & strategy
for entry
Source: Hisrich, Peters & Shepherd 2008, p. 10
Similarly, Timmons (1990, p. 5) defines entrepreneurship as:
the process of creating or seizing an opportunity and pursuing it regardless of the
resources currently controlled. Entrepreneurship involves the definition, creation,
and distribution of value and benefits to individuals, groups, organizations, and
society. Entrepreneurship is very rarely a get-rich-quick proposition; rather, it is
one of building long-term value and durable cash flow streams.
William Bygrave (1997, p. 2) also sees entrepreneurship from a management
perspective in defining it as a process which ‘involves all the functions, activities, and
actions associated with perceiving opportunities and creating organizations to pursue
them’.

19. MNG00427 Topic 1 – Perspectives on entrepreneurship 17
Thus, management scholars view entrepreneurship as a purposeful activity, and one
whose chances of success can be enhanced through developing entrepreneurial and
management skills. For example, in order to identify entrepreneurial opportunities
(as noted in the above definitions by Hisrich, Peters & Shepherd, Timmons and
Bygrave), potential entrepreneurs should nurture contacts with appropriate individuals,
organisations and customers (Bird 1989). Similarly, competence in feasibility analysis,
business planning and resource identification and acquisition can be gained through
learning and practising. In this way, the chances of entrepreneurial success can be
enhanced.
A management perspective on entrepreneurship also allows greater attention to
entrepreneurial activities in existing firms. That is, many management theorists do not
view entrepreneurial activities as restricted to starting and managing a new venture.
A key focus is on the management of innovation and change, as reflected in Peter
Drucker’s (1986) views. He defined entrepreneurship as the effort to create purposeful,
focused change in a firm’s economic or social potential, plus the application of distinct
entrepreneurial strategies and entrepreneurial management. Entrepreneurship thus
involves being alert to opportunities that often arise under conditions of constant
change, and then acting on those particular opportunities likely to yield value. As
Casson (1982) has noted, entrepreneurs’ abilities to exploit opportunities and cope
with change depend on their ability to make decisions and judge the value of these
decisions (in Alizadeh 1999, p. 32). This view of entrepreneurship thus recognises
that entrepreneurial activities can occur within larger organisations and that business
ownership is not a prerequisite to entrepreneurship. The terms ‘intrapreneurship’ and
‘corporate entrepreneurship’ were coined to describe entrepreneurship outside the
owner-operated business. Intrapreneurship then is concerned with ways to enhance
opportunity recognition and innovation in existing firms by encouraging ‘bureaucratic
creativity’(Cunningham & Lischeron 1991, p. 54).
As we mentioned earlier, a management perspective on entrepreneurship sees it as a
process. There is a diversity of opinions, however, on when this process ends. When
viewed as a lifecycle, enterprises are created and may then proceed through stages
such as growth, maturity or decline. For some management scholars, such as Gartner
(1989), the entrepreneurial process is complete once the new enterprise is created.
For others, such as Hisrich, Peters and Shepherd (2008), entrepreneurship also is
involved in managing the new business and nurturing it through early growth. This is
often the perspective taken by those who study small business management. For those
who study intrapreneurship, their focus is usually on the mature organisation facing
or embracing change and its attendant opportunities. We’ll return to the notion of an
enterprise lifecycle later in this topic when we develop a framework on which the rest
of this unit is structured.
For now, turn to the first article in your Book of Readings. It provides a useful
summary of some of the disciplinary perspectives on entrepreneurship that we have
been discussing.
r Reading 1.1
Filion, LJ 1998, ‘From Entrepreneurship to Entreprenology: The Emergence of a New
Discipline’, Journal of Enterprising Culture, Vol. 6, No. 1, March, pp. 1–23.

20. 18 MNG00427 – Entrepreneurship in Tourism and Hospitality
Schools of thought on entrepreneurship
As noted in your first reading for this topic, the diverse perspectives on
entrepreneurship have yielded various attempts to categorise these into different
‘schools of thought’. Your next reading provides one such categorisation. Reading this
will help you fit together the various pieces in the ‘jigsaw’ of entrepreneurship.
r Reading 1.2
Cunningham, JB & Lischeron, J 1991, ‘Defining Entrepreneurship’, Journal of Small
Business Management, Vol. 29, No. 1, January, pp. 45–61.
The previous article described six schools of thought in entrepreneurship. Let’s now
examine another reading and complete an activity to show how each of these schools
might be useful in understanding the entrepreneurial process.
r Reading 1.3
Sasser, WE & Klug, J 1988, ‘Benihana of Tokyo’ in Lovelock, CH (ed.), Managing
Services: Marketing, Operations and Human Resources, 1st edn, Prentice-Hall
International Inc., New Jersey, pp. 44–57.
a Activity
Consider the Benihana case study in light of the six schools of thought in the
Cunningham and Lischeron reading. Which of these schools helped you most in
understanding the entrepreneurial success of Rocky Aoki in establishing and growing
Benihana restaurants?
f Feedback
You have probably found that most of the schools of thought enhanced your
understanding of contributors to Rocky’s success. He certainly had the intuition, vigour
and persistence associated with the ‘great person’ school and appeared to have those
qualities associated with the psychological school. The restaurant concept was also
clearly innovative and creative (the classical school), and the article refers to Rocky’s
attention to staffing and leading people (the leadership school). Perhaps the article
pays most attention to those qualities associated with the management school in
production planning, people organising, capitalisation and budgeting.
A process approach to entrepreneurship
Thus far in this topic we have presented numerous and often diverse perspectives on
entrepreneurs and entrepreneurship. You are probably feeling somewhat confused and
pondering how we might best make sense of this diversity. In this final section of this
topic, we present a framework that incorporates many aspects of entrepreneurship that
you have encountered so far. The purpose of this framework is both to help you fit the
pieces of the entrepreneurial ‘jigsaw’ together, and to provide a basic structure around
which the rest of this unit is organised. You should study this framework closely, and
refer to it periodically throughout your studies.
In developing this framework, we have taken into account some important
characteristics of entrepreneurship identified by Bygrave and Hofer (1991, p. 17).
These are that entrepreneurship:
• is initiated by an act of human volition
• occurs at the level of the individual firm
• involves a change of state
• involves discontinuity

21. MNG00427 Topic 1 – Perspectives on entrepreneurship 19
• is a holistic process
• is a dynamic process
• is unique
• involves numerous antecedent variables
• has outcomes that are extremely sensitive to the initial conditions of these
variables.
This list of characteristics recognises that entrepreneurship is a process with certain
inputs and outputs. The inputs are the entrepreneur and other antecedents to the
process of creating a new enterprise. This process then involves changing the
external environment to one without the venture to another with the venture. It thus
represents a basic discontinuity in the competitive structure of the industry involved.
Sometimes, it even involves the creation of a new industry. In addition, it is holistic;
that is, the creation of the venture and its probabilities of success can be described
and evaluated only as part of the total industry structure. It is also dynamic, since
both the venture and the industry evolve over time. It is also unique, since no other
venture or competitive situation will be identical. Finally, the entire process is very
sensitive to antecedents to the process, such as the number, strength and positioning of
competitors, the qualities and capabilities of the entrepreneur, and the needs of current
and future customers (Bygrave & Hofer 1991, p. 17). The output of the process is, of
course, the organisation created.
Thus, key variables in the process of entrepreneurship are:
• the entrepreneur
• the environment
• the process
• the organisation.
We have also based our framework loosely on one developed by Carol Moore
(1986), as shown in Figure 1.1. Moore’s model shows four phases comprising the
entrepreneurial process – innovation, triggering event, implementation and growth
– with numerous personal, environmental, sociological and organisational factors
influencing each stage.
Personal Personal Sociological Personal Organisational
Achievement Risk taking Networks Entrepreneur Team
Locus of control Job dissatisfaction Teams Leader Strategy
Ambiguity tolerance Job loss Parents Manager Structure
Risk taking Education Family Commitment Culture
Personal values Age Role models Vision Products
Education Commitment
Experience
Innovation Triggering event Implementation Growth
Environment Environment Environment
Opportunities Competition Competitors
Role models Resources Customers
Creativity Incubator Suppliers
Government policy Investors
Bankers
Lawyers
Resources
Government policy
Figure 1.1 Moore’s model of the entrepreneurial process
Source: Moore 1986, in Bygrave 1997, p. 3

22. 20 MNG00427 – Entrepreneurship in Tourism and Hospitality
Figure 1.2 presents our framework of the entrepreneurial process and the elements
each of the topics in this unit examines. The framework recognises that there is
no one ‘best’ perspective on entrepreneurship, but that much can be learnt through
considering multiple perspectives on the ‘elephant of entrepreneurship’ that we
referred to in the introduction to this topic.
Because this unit is part of a business degree, we focus a good deal on the process of
creating a new enterprise. However, we first recognise that this process does not occur
in isolation, but also has inputs and outputs. Thus, our framework is divided into three
phases which reflect a lifecycle model of organisational evolution, from pre-startup, to
venture creation, to growth and stability:
• Inputs. This first phase is concerned with antecedents to entrepreneurship,
comprising the personal characteristics of the individual entrepreneur, the social
stimulants he or she encounters, and the environment in which this occurs.
• Process. The second phase is the process of entrepreneurship itself. Here we focus
on opportunity recognition and the need to establish the feasibility of the proposed
venture, planning the new venture, legal and financial requirements, and the range
of entry strategies available.
• Outputs. The third phase in our framework is concerned with the time period after
venture creation. We examine management skills and competencies required in a
new small venture and strategies used to optimise its growth.
Personal & Sociological
In uences on Entrepreneurship
(Topic 2)
INPUTS Antecedents to Entrepreneurship
Environmental
In uences on Entrepreneurship
(Topic 3)
Opportunity Recognition and
Evaluation
(Topic 4)
Planning the New Venture
(Topic 5)
PROCESS Business Planning and Creation
Legal and Financial Issues
for the New Venture
(Topic 6)
Entry Strategies
for the New Venture
(Topic 7)
General Management in the
OUTPUTS Managing the Entrepreneurial Venture Entrepreneurial Venture
(Topic 8)
Source: Primary, developed for this unit
Figure 1.2 A framework for examining the entrepreneurial process

23. MNG00427 Topic 1 – Perspectives on entrepreneurship 21
Conclusion
In this first topic, we have provided an overview of economic, psychological,
sociological and management perspectives on entrepreneurship. This has helped
to define the terms ‘entrepreneur’ and ‘entrepreneurship’ and provided a brief
introduction to some of the elements that might influence the entrepreneurial process.
After reviewing these perspectives and some schools of thought on entrepreneurship,
we have concluded that entrepreneurship is most usefully viewed as a process,
with various inputs and outputs. The process was presented as a framework which
structures the remainder of this unit.
Our next topic focuses on the first element of this framework – personal and
sociological influences on entrepreneurship.
a Discussion questions
At the end of Chapter 1 from your textbook, answer the five discussion questions. I will
place feedback from these questions on MySCU under Unit Documents in Week 2 of
the study period.

24. 22 MNG00427 – Entrepreneurship in Tourism and Hospitality

25. Topic 2
Personal and sociological
influences on entrepreneurship
Introduction
Central to the entrepreneurial process is, of course, the entrepreneur. As we noted in
Topic 1, the psychology of entrepreneurs and their personal characteristics dominated
research in the field from the 1960s to the 1980s. While no predictive profile unique to
entrepreneurs has been discovered, there do seem to be some psychological, personal
and sociological factors commonly found amongst them. We can view these factors as
antecedents to the entrepreneurial process, as depicted in Figure 1.2 in Topic 1. That
is, to embark on entrepreneurial activity first requires a certain entrepreneurial drive or
spirit. In this topic, we explore what might underpin this entrepreneurial bent, firstly in
terms of psychological and personal factors, then sociological factors. We then devote
some attention to female and ethnic entrepreneurs to illustrate how contextual factors
can contribute to entrepreneurship. Finally, in recognition that entrepreneurs are not a
homogenous group, this topic reviews some typologies of entrepreneurs.
Objectives
After completing this topic, you should be able to:
• discuss the personal and psychological factors usually associated with
entrepreneurs
• discuss the range of sociological factors that are common antecedents to
entrepreneurship
• assess the role of sociological factors in female and ethnic entrepreneurship
• identify some different typologies of entrepreneurs
• provide examples of the above in tourism and hospitality industries.
Textbook
Schaper, M, Volery, T, Weber, P & Lewis, K 2011, Entrepreneurship and Small
Business, 3rd Asia-Pacific edn, John Wiley and Sons, Australia.
• Chapter 2, pp. 30–48.
Readings
2.1 Brockhaus, RH & Horwitz, PS 1986, ‘The Psychology of the Entrepreneur’,
in Sexton, DL & Smilor, RW (eds), The Art and Science of Entrepreneurship,
Ballinger Publishing, Cambridge MA, pp. 25–47.
2.2 Morrison, A, Rimmington, M & Williams, C 1999, Entrepreneurship in the
Hospitality, Tourism and Leisure Industries, Butterworth-Heinemann, Oxford,
pp. 35–52.
23

26. 24 MNG00427 – Entrepreneurship in Tourism and Hospitality
2.3 Shapero, A & Sokol, L 1982, ‘The Social Dimensions of Entrepreneurship’, in
Kent, C, Sexton, DL & Vesper, KH (eds), Encyclopedia of Entrepreneurship,
Prentice-Hall Inc., Englewood Cliffs, New Jersey, pp. 72–90.
2.4 Sykes, T 1994, The Bold Riders: Behind Australia’s Corporate Collapses, Allen
and Unwin, Sydney, pp. 186–210.
2.5 Greene, PG, Hart, MM, Gatewood, EJ, Brush CG & Carter, NM 2003, ‘Women
Entrepreneurs: Moving Front and Center: An Overview of Research and Theory’,
The Coleman White Paper Series, Coleman Foundation and US Association of
Small Business and Entrepreneurship, pp. 1–46.
2.6 Aldrich, HE & Waldinger, R 1990, ‘Ethnicity and Entrepreneurship’, Annual Review
of Sociology, Vol. 16, pp. 111–134.
Psychological and personal influences on
entrepreneurship
Rather than provide extensive content in this section, we will refer to you two readings
that summarise and provide some examples of the influence of psychological and
personal factors on entrepreneurship. We’ll then complete some activities to help your
comprehension of this material.
But first, read the following prologue from Bob Ansett’s autobiography (Ansett &
Pullan 1986, pp. 11–12). It gives us some preliminary insights into the entrepreneurial
mind.
The first time I visited my father in his office I read on a wall a framed quotation
from Calvin Coolidge, President of the United States from 1923 to 1929:
Nothing in the world can take the place of persistence. Talent will not;
nothing is more common than unsuccessful men with talent. Genius will
not; unrewarded genius is almost a proverb. Education will not; the world
is full of educated derelicts. Persistence and determination alone are
omnipotent. The slogan ‘press on’ has solved and always will solve the
problems of the human race.
Perhaps because I had just returned to Melbourne after 20 years in the
United States I was particularly receptive to advice from an American
President. I said to Reg Ansett: ‘That’s the best quotation I’ve ever seen.’
My father agreed, but he wasn’t interested in talking about it — in his early
pioneering years the quotation had the essence of the way R. M. Ansett
conducted his enterprises, but in the later years I think it had little meaning
for him. In 1965 I thought it perfectly encapsulated my own philosophy,
and 21 years later I still do. Persistence is the essence of success in business
or anything else. I think I’m a good example of what Coolidge was talking
about: I’m not an extraordinarily talented person, nor am I a genius. As for
education, I have not gone beyond high school, and while there I wasn’t top
of the class.
My father wasn’t either — the only two pieces of paper he ever had proving
he could do something were a knitting machine mechanic’s certificate and a
pilot’s licence. At that meeting my father told me there was no place for Bob
Ansett in his business empire, Ansett Transport Industries. The day I returned
to Melbourne, No JOB FOR BOB was the page one headline in the Melbourne
Herald. (The headline now adorns the stairwell in the Budget headquarters
building in North Melbourne.) When I came back to Melbourne and started
with Budget car rentals after my father’s rejection, I started with nothing. My
job experience was limited to pumping petrol and driving a milk truck in Los
Angeles and a bread truck in San Diego. I had three young children and a wife
to support. But I had three things to offer. The first was the strong competitive
sense I developed playing American football — in sport or in business I wanted
to beat the hell out of the other guy. The second was my confidence in myself —

27. MNG00427 Topic 2 – Personal and sociological influences on entrepreneurship 25
I’ve always believed I have a charmed life and no matter what I do it will work
out. The third was persistence, another lesson from football. I wasn’t a brilliant
footballer — there were lots of fast bigger guys, guys with safer hands, but I
discovered that I could start a game against a bigger, more talented opponent
who was on top in the first plays, but if I kept at the task, just kept grinding away,
I would get to him in the end. The Budget philosophy, which is the key to our
success, evolved from my experience on gridiron fields in California and Japan,
from my work on the gas pumps in Southern California, and from thousands of
hours on bread and milk delivery runs. But I’m getting ahead myself …
(Ansett & Pullan 1986, pp. 11–12)
As the previous excerpt highlights, persistence seems to be a trademark characteristic
of entrepreneurs. Consider the experiences of Walt Disney, who built his empire from
cartoon production to films to theme parks. He had four failed businesses before
success (Kuehl & Lambing 1990, pp. 633–637).
r Reading 2.1
Brockhaus, RH & Horwitz, PS 1986, ‘The Psychology of the Entrepreneur’, in Sexton,
DL & Smilor, RW (eds), The Art and Science of Entrepreneurship, Ballinger Publishing,
Cambridge MA, pp. 25–47.
r Reading 2.2
Morrison, A, Rimmington, M & Williams, C 1999, Entrepreneurship in the Hospitality,
Tourism and Leisure Industries, Butterworth-Heinemann, Oxford, pp. 35–52.
a Activity
Refer back to Reading 1.3, where a case study on Benihana’s was presented. In light
of Readings 2.1 and 2.2, what personal and psychological traits does Rocky Aoki
appear to have that may have influenced his decision to establish Benihana’s?
f Feedback
Rocky appears to demonstrate many of those psychological traits identified by
Brockhaus and Horwitz (1986). He moved to the United States because he felt
there were better opportunities there for him to achieve success (high need for
achievement). He clearly would not have put so much time and effort into his venture
unless he felt he could influence its potential performance (internal locus of control).
While he took risks in establishing his venture, his research and education were
attempts to calculate and minimise the risks. Faced with problems at start-up and later
with franchising, he sought to solve those problems.
a Activity
Do most small business founders you know in tourism and hospitality industries
appear to have the personal qualities identified in the previous two readings?
f Feedback
Perhaps you found that the personal qualities identified in the previous two readings
were more applicable to Rocky Aoki than to most small business owner-operators
you know. In fact, in a review of the rather limited research into characteristics of
owners of small tourism firms, Dewhurst and Horobin (1998) found that the majority
are not motivated by a desire to maximise economic gain, but by social factors such
as desire for semi-retirement and locational benefits. This suggests that pursuit of
growth and business expansion are not high priorities. These findings led to the
conclusion that the theoretical or conceptual qualities of entrepreneurship, including
innovation, responding to uncertainty and adjusting to disequilibrium, are precisely the

28. 26 MNG00427 – Entrepreneurship in Tourism and Hospitality
qualities that appear to be poorly developed among small tourism firms. From these
two activities, you may be beginning to appreciate that business founders are not a
homogenous group – an issue we’ll return to later in this topic.
Now, examine the following two excerpts. The first relates to Christopher Skase,
another ‘infamous’ Australian entrepreneur with interests in luxury tourism
accommodation, most notably the Mirage hotels on the Gold Coast and at Port
Douglas, north of Cairns. The second is about Len Ainsworth who founded Aristocrat
Leisure Industries, the $900 million company that Ainsworth transformed from a tiny
1950s Australian medical equipment manufacturer into the second largest maker of
gaming machines in the world (Guilliatt 1999). Both these excerpts provide some
insight into the personality traits of these two entrepreneurs.
Young man in a hurry
Who was this young man who had built an enormous empire from next to
nothing in little more than a decade? He was a phenomenally hard worker. He
reckoned that if he put 100 hours work into a week he could get through twenty
years work in ten. He was definitely a young man in a hurry. ‘You’ve got to give
it a go’ he would tell interviewers. ‘You’re only here once’. He had few outside
interests. His working day could be anything up to fourteen hours and in one way
or another he worked seven days a week. His only relaxation was swimming, but
sometimes he had to hit the pool as early as 4.30a.m. if he were flying interstate
that day.
The Skases were a striking and elegant couple. Christopher was slim, olive-
skinned and dark-haired, while the blonde Pixie could be both relaxed and
stylish. She was a rock of support to him in a marriage that would stand great
external stresses. Pixie was his business partner as well. She worked as his
secretary, discussed strategies and ideas with him and added many of the stylish
touches to the Mirage resorts. Pixie and Christopher were a dedicated couple,
travelling everywhere together and sometimes holding hands in public. He
treated her daughters as his own. Pixie’s unquenchable vivacity must have been a
tonic for the hard-working Christopher.
Skase was constantly moving from planes to hotels to office to chauffeured
limousines and back to planes. He read masses of material while in transit and
typically conducted several meetings a day. He almost certainly took too much
on board. His days tended to get out of hand. The later in the day he had an
appointment the more likely it was that he would be late. (I was once MC at a
Sydney lunch where Skase was to be the main speaker and present some awards.
At the time we started the lunch the Skases were just taking off from Brisbane.
They arrived about half an hour late, but the lunch nevertheless was a success.
Skase could be an inspirational speaker and the drama of his late arrival added to
the sense of occasion). Decisions that should have been made and implemented
in a day or two could stretch into weeks or months before he finally had time for
them. His top half-dozen executives worked almost equally hard. Skase insisted
that all homework be done and decisions taken within the group. No work was
ever farmed out to merchant bankers or corporate advisors, so security was tight
and executives were well informed. They all hoped to get rich on Qintex shares
and options.
One of his most perceptive interviewers noted several characteristics that made
Skase tick. One was total commitment, in that he had no outside interests unless
barracking for the Bears could be counted. Others were: having clear and concise
business objectives; emphasis on specialisation and pre-eminence in the chosen
field; use of long-term strategy, which he called ‘the Japanese factor’; avoiding
fad industries; and a devotion to demographics, which told him where people
were moving and how they were going to be spending their money. It was
demographics, broadly defined, that had persuaded him to move into resorts.

29. MNG00427 Topic 2 – Personal and sociological influences on entrepreneurship 27
At the Los Angeles Olympics in 1984 it first struck him that there was a trend
towards a larger proportion of adults in the populations, who increasingly wanted
information, entertainment, travel and leisure.
The hard-driving young entrepreneur had great style. He wore a blue pinstripe
suit well, usually with a pink shirt, white collar and a handkerchief spilling
from the breast pocket. As he became successful he developed a penchant for
big fat cigars, although they probably did his asthma no good. In Brisbane his
headquarters was a luxuriously decorated penthouse at the top of Comalco House
in Creek Street.
The décor was ice-blue. The foyer was littered with antiquities including an
Egyptian cartonage mask (circa 1300 BC), a Roman male torso and a Greek vase
(circa 320 BC). The entire office was paved with vivid blue and white variegated
quartzite mined in Brazil, polished in Italy and imported especially for Qintex.
A receptionist answered the phones at one of two solid quartzite desks while
at the other a tiny waterfall cascaded from the desktop in a soothing murmur.
Skase’s trappings oozed opulence, including a company yacht name Mirage
III. The yacht’s drawing room had a gilt-edged, 18th century Rapousse mirror
at one end and a blue banquet table and matching silk banquette with pewter
lamps from New York at the other. In one corner was a bridge table with Hermes
cards and Hermes ashtrays. Christopher and Pixie flew the world in a Falcon jet
formerly owned by King Hussein of Jordan. Yet beneath his exterior Skase was
a plain-living man whose idea of a good meal was a hamburger or Pixie’s home
cooking. There was no question that he enjoyed living and working in opulent
surroundings, but at least part of their purpose was to impress the world with
how far he had come and to impress financiers. A sumptuous office was almost a
prerequisite for borrowing in the 1980’s and none of the corporate cowboys had
a better sense of style than Skase.
Nearly all the cowboys knew how to enjoy themselves, but Skase must have
been the best party-giver of all. His philosophy was that he and his staff
worked hard all year (they were forbidden to indulge in lunches), so he was
justified in throwing a big bash at Christmas. After he moved to Queensland the
parties became lavish. For Christmas 1985 he pitched a marquee alongside the
Queensland Arts Centre and invited several hundred staff, associates and friends
to an all-night revel with top food, wine and entertainers. In the 37-degree
heat the marquee turned into a Turkish bath, but everyone enjoyed themselves
enormously and only party poopers left before 2 a.m. Guests, including spouses,
were flown in from Melbourne and Sydney on a chartered Boeing 727, equipped
with antimacassars adorned with the ‘Q’ of the Qintex logo. From Brisbane
Airport chauffeured limousines ferried guests to the Sheraton. Premier Joh
Bjelke-Petersen—triumphant at Qintex’s move to Queensland—was the guest of
honour.
For the official opening of the Mirage Hotels in 1988 some 200 guests were
taken by chartered jet and limousine to both the Gold Coast and Port Douglas
hotels. The party lasted three day, featuring everything from a fireworks display,
which came uncomfortably close to burning down the Gold Coast hotel, to scuba
diving on the Low Isles off Port Douglas. Normie Rowe and Johnny Farnham
sang at the dinners as those present drank unlimited supplies of 1984 St Henri.
Guests returned home stunned at Skase’s hospitality. His fortieth birthday party
at his Hamilton home was even more impressive. Guests were driven there in
limousines and offered Krug as they arrived. A marquee was pitched on the
tennis court and party-goers danced on a reflective floor (gentlemen spent a lot
of time looking downwards) until the early hours. The birthday toast to Skase
was proposed by Robert Holmes a Court. Guests included Sally Kellerman (the
original Hotlips Houlihan from M.A.S.H.) and George Hamilton (star of Love at
First Bite).