How Your Locus Of Control Impacts Business Success

Does your business success or failure depend on what you do, or what the world does to you?

How Your Locus Of Control Impacts Business Success


Does your business success or failure depend on what you do? Or what the world does to you?

Your answer will depend on what your own personal “locus of control” happens to be. Locus of control is a psychological term first coined by Julian B. Rotter in 1954 and it refers to how much individuals believe they can control events that affect them.  Psychologists believe it’s an essential element of all of our personalities.

Your locus (a Latin word meaning “place” or “location”) can be either internal or external. If you have an internal locus of control, you think you’re in charge of your life.  If you succeed, you take the credit and if you fail, you blame yourself. If you define yourself with an external locus of control, however, you believe other people, your environment or a higher power controls what happens – you’re helpless. That means it’s easy to point the finger at everyone but yourself. 

Obviously, most of us don’t operate with a locus that’s completely internal or external.  But generally, we’re more on the scale towards one or the other – and each have their own characteristics.  

If you have a primarily external locus of control, you’re more likely to:

* Believe luck, chance and/or fate decides what happens to you.


* Be negative and give up more easily when setbacks.

* Not reach out to create new relationships or try to repair old ones.

* Feel more helpless when faced with stress or illness

An internal locus of control, on the other hand, causes you to be:

* Think you’re responsible for your success and failure

* Less prone to anxiety and depression


* More independent and achievement-oriented

* More health-conscious

Read over those two sets of lists and answer this question: which locus of control is better for an entrepreneur to possess?

The answer seems fairly obvious; those who are in business for themselves generally need to have a strong internal locus of control. Entrepreneurs are usually motivated by the sense that they can make things happen themselves – and they certainly can’t survive if they fold under the pressure of outside setbacks. In fact, many studies have linked an internal locus of control to better work performance and higher career satisfaction for just those reasons.

So it would seem to follow that we don’t need an external locus of control at all to succeed.  But…the world is never that simple.  

If you lack any kind of external locus of control, you’ll ignore the real power of real events and not make necessary adjustments when needed.  You can’t stay dry in a monsoon and you shouldn’t invest everything in a market that’s in full-on crash mode.  You might try to do both of those things, however, if you completely lack an external locus.


So–what’s your locus?  Put yourself to the test here, and, if you don’t like the result, it will at least let you know who you’re likely to blame. 

[Image: Flickr user Rhett Maxwell]

About the author

Ethan Hale is Founder of E. F. Hale Enterprises, LLC and has been an entrepreneur most of his life.