Factors influencing entrepreneurial intention

Purpose- the purpose of this research is to investigate what the causes influenced among students in Universiti Teknologi Mara in Shah Alam branch in entrepreneurial intention and to make an evaluation for their entrepreneurship orientation by comparing them with non-entrepreneurially inclined students.

Design/methodology/approach-

Findings- the result of this test showed that

Research limitations/implications- the study comprises respondent 300 of students at all course fields in Universiti Teknologi Mara in Shah Alam branch and the percentage of students in the sample who wish to be entrepreneurs is

Practical implications – This study provides insight into entrepreneurship education, as to which entrepreneurial characteristics can be developed to raise good entrepreneurs.

Originality/value – This study contributes to understanding the differences between characteristics of entrepreneurially inclined and non-inclined students at the edge of graduation.

Nowadays entrepreneurship has captured their attention among people especially teenagers in all over the world. The main reason of this concern is the growing need for entrepreneurs who accelerate economic development through generating new ideas and converting them into money-making ventures. However, it has a more critical role for economies of developing countries since entrepreneurship is seen as an engine of economic progress, job creation and social adjustment. Thus, small business growth or new business formation is widely encouraged by national economic policies to stimulate economic growth and wealth creation. In parallel with developing interest in entrepreneurship throughout the world, Malaysia has also witnessed an increasing interest in entrepreneurship fields both among their academic scholars and amongst government policy makers and business leaders. Obviously, understanding perceptions of students at higher education level is a necessary step in this process. The purpose of the current study is to analyze the entrepreneurial intention of university students in Universiti Teknologi Mara Shah Alam .

Scope of study

The scope in this study is the students in Universiti Teknologi Mara Shah Alam. It comprises all the students in all field of study. The respondent involved 300 students and this amount is using for sample survey in this study.

Problem statement

The interest making money among the teenagers nowadays make intention in entrepreneurship is getting higher. But have a few of them have a desire to open the business but because of lack of entrepreneur knowledge.

Research objective

Objective in doing this research is to identify:

The factor that influenced student in university to do the business before they done their study.

The opinion from the students that already have their own business.

How they balance their study and business at the same time.

Those who have business experiences in their background

Research question’s

What the factors that influenced university student to do the business?

Who you prefer to borrow money to open the business?

Significance of study

The significant of this study is to analyze the entrepreneurial intention of university students. In this study, a model that mainly focuses on the impacts of some contextual factors was proposed and empirically tested on university students. Furthermore, the study contributes to the literature by theorizing and empirically testing how some factors affect entrepreneurial intention of university students. It is believed that the results of study may have some significant implications for the policy makers and educators.

INTRODUCTION

Entrepreneurship has captured the attention of both scholars and policy makers during

the last decades. The main reason of this concern is the growing need for entrepreneurs who accelerate economic development through generating new ideas and converting them into profitable ventures. Entrepreneurial activities are not only the incubators of technological innovation; they provide employment opportunity and increase competitiveness also (Reynolds, 1987; Zahra, 1999). Some scholars primarily focus on the effect of personality characteristics on decision making process (Bonnett and Furnham, 1991; Brockhaus, 1980; Johnson,1990). Although the results vary across the studies, they often indicate a link between entrepreneurial intention and some personality factors, such as self-confidence, risk-taking ability, need to achievement, and locus of control. However, a person is surrounded by an extended range of cultural, social, economical, political, demographical, and technological factors. Therefore, personality traits cannot be isolated from these contextual factors. In the literature, there are some studies that take into account the role of these factors also. For instance, according to Hisrich (1990), people can be pushed or pulled by the situational factors, which are related with their personal backgrounds and present lives. From a broader point of view, the cultural and institutional frameworks also affect entrepreneurship (Wennekers and Thurik, 1999). The review of literature on entrepreneurship shows that most of the scholars have focused on adult entrepreneurs. In these studies, adult entrepreneurs were examined after choosing their entrepreneurial careers. Since people are likely to start a business within the age range of 25 to 44 (Liles, 1974), it is also critical to focus on people who are younger than 25 and understand which factors affect their intentions to start-up a

business in the future. As Henderson and Robertson (2000) also stated “. . . the future working environment will depend on the creativity and individuality of the young. However, indeed relatively little is known about young adult views on entrepreneurship” (p.279). The purpose of the current study is to analyse the entrepreneurial intention of university students. In the study, a model that mainly focuses on the impacts of some contextual factors was proposed and empirically tested on university students. Therefore, the study contributes to the literature by theorizing and empirically testing how some factors affect entrepreneurial intention of university students. It is believed that the results of study may have some significant implications for the policy makers and educators.

VARIABLES

Dependent variable: Entrepreneur intentions among students.

Independent variables: Educational support, structural support and relational support

Educational support

The first dimension of model is educational support. It is obvious that professional education in universities is an efficient way of obtaining necessary knowledge about entrepreneurship. Although, in their study, Wang and Wong (2004, p. 170) mainly focused on personality characteristics of students, they also pointed out the fact that the entrepreneurial dreams of many students are hindered by inadequate preparation; “. . .their business knowledge is insufficient, and more importantly, they are not prepared to take risk to realize their dreams.”. In the literature, some studies analyse how these entrepreneurial interests of universities affect entrepreneurial inclination of students. The study of Gorman and Hanlon (1997) showed that entrepreneurial attributes can be positively influenced by educational programmes. It is clear that an effective education on entrepreneurship can be a factor to push people towards an entrepreneurial career (Henderson and Robertson, 2000).

Structural support

The second factor in the model is structural support which are we are social, cultural, economical, political and technological factors. The current context of entrepreneurship is mainly shaped by economical and political mechanisms, which are governed by the actors in the public, private, and non-governmental sectors. In such a system, there can be some opportunities or threats for entrepreneurs. For instance, if there are some barriers to entry into the market, people might show a lower tendency for entrepreneurship. However, if they find the given conditions adequate and favourable, it might be expected that they are more likely to start a business.

Relational support

The study of Henderson and Robertson (2000) showed that family was the second factor influencing career choice of respondents – after their personal experience. Therefore, the support of family and friends is likely to affect one’s career selection. In the current study, this relational support mainly indicates the sentimental and monetary supports of family and friends. If someone knows that there will be such type of support when s/he starts a business, she or he might be encouraged to choose an entrepreneurial career.

Moderating variable:

Self Confidence

The model also considers the impact of one personality trait, self-confidence, as moderator variable. However, the level of self-confidence that is generally defined as “believing in oneself”may influence one’s perception as well. Self-confidence is widely accepted as avaluable individual asset and a key to personal success. In their study, Be´nabou and Tirole(2002) explained why an optimistic self-view is seen as a good thing. According to them, self-confidence is valuable because “it makes people happier”, “it makes it easier to convince others (rightly or wrongly)” and improves “the individual’s motivation to undertake projects and persevere in the pursuit of his goals” (p.877). Based on this conceptualization, it might be expected that more self-confident people may perceive their environment more favourably than others and have more optimistic perspective about their future. Therefore, if a person has a high level of self-confidence, the strength of the proposed link between educational support, structural support, relational support and entrepreneurial intention may also increase.

THEORITICAL FRAMEWORK

Self-Confidence

Entrepreneur Interest

Structural Support

Relational Support

Educational Support

INDEPENDENT VARIABLES MODERATING DEPENDENT VARIABLE

VARIABLE

TABLE 1.1: THEORITICAL FRAMEWORK

RELATIONSHIP

Hypothesis 1: Entrepreneurial intention of university students positively relates with perceived educational support.

Hypothesis 2: Entrepreneurial intention relates with perceived structural support.

Hypothesis 3: The entrepreneurial intention positively relates to perceived relational support.

Moderating hypothesis: 1) The strength of the relationship between entrepreneurial intention and perceived educational support is affected by the level of self-confidence.

2)The strength of the relationship between entrepreneurial intention and perceived structural support is affected by the level of self-confidence.

3) The strength of the relationship between entrepreneurial intention and perceived relational support is affected by the level of self-confidence.

3.1 Research Design

3.1.1 Purpose of study

Fostering entrepreneurship needs a twofold policy that should focus on both the current

situation and future prospect of entrepreneurship. Although many scholars and policy makers devote their attention to the first foci of issue, it is equally important to map out the future context of entrepreneurship. The purpose of this paper is to fill this void by analyzing the impacts of some contextual factors on entrepreneurial intention of university students.

3.1.2 Type of investigation

The type if investigation for this research is correlation study. This is because the researchers want to identify the important of the factors or variables ‘associated with’ the problem. It is to determine whether relational support, structured support and educational support and the intention to become an entrepreneur among student is correlated. The researchers also want to know what are the significant amount of the independent variables in the intention to become an entrepreneur among student. If they are significant between these two variables, which among these three variables examined is the one that has the greatest association with it, which is the next and which is the third? It is to see if there is any relationship exist among the variables investigated. The answer to this correlational study will help to determine the extent of the intention to become an entrepreneur or to start a business among UiTM students are influenced by the relational support, structured support and educational support.

3.1.3 Extend of researcher interference with the study.

We have study the intention among students towards entrepreneur. In other words, we want to do a correlational study. Here, we will collect data among UiTM students to indicate how much factors of relational, educational and structural influence them to have intention to be an entrepreneur or start the business. By correlating three variables the answer being sought can be found. In this case, beyond administering a questionnaire to the student, we have not interfered with the students` normal activities. In other words, our interference has been at minimal because the variables are beyond our control. It is depends on each of respondents background.

3.1.4 Study setting

The study setting of our research is field study. We want to analyze the relationship between the relational, structural and educational support with the intention to become an entrepreneur. We try to correlate between dependent and independent variables by looking at whether the respondents have high level of education, received full support from family members and also the economic situation as the intention to be an entrepreneur increase. Therefore this is a field study. Research here is done in a non contrived setting with no interference with the five independent variables.

3.1.5 Unit of analysis

In this study, we want to know factors that influence intention among customers of Bank Islam. For this purpose, data will have to be collected from the sample which is 150 students and the units of analysis are individual.

3.1.6 Time frame

The time frame for our research is one-shot or cross-sectional studies. Date was collected from to students between September and October to study the factors that influence intention among UiTM students to participate in entrepreneurship. This is because we only need to gather our data just once that is over a period of weeks, in order to answer the research question. Data with respect to this research had not been collected before, nor will they be collected again for this research.

3.2 Sampling design/case

In our research, the sampling design that be used is non probability sampling which is convenience sampling. Convenience sampling refers to the collection of information from members of the population who are conveniently available to provide it. We used these types of sampling design because it is the best way of getting basic information quickly and efficiently and it is also less expensive. In addition, these types of sampling are the most easily accessible to our respondents as subject. These types of sampling are most often used during the exploratory phase of a research project. We do not have the knowledge or predetermine chance of respondents being selected as subject. In thousands of UiTM students, we do not know who the 300 respondents are.

3.3 Data Collection Method

3.2.1 Primary data

Primary data refer to information obtained first-hand by the researcher on the variables of interest for the specific purpose of the study. In this research the sources from our primary data is our respondents where we obtained the data through the administered questionnaire.

3.2.2 Secondary Data

Secondary data refer to information gathered from sources that already exist. Our secondary source of data is through the analysis of industry offered by the media in the internet which is in form of journal. This information gathered by someone other than the researcher. The advantages of seeking secondary data sources is savings time and costs of acquiring the information.

5.00 Conclusion and Recommendation

5.1 Conclusion

The results of survey revealed that only two subsets of proposed model were significant predictors of entrepreneurial intention. The first factor is educational support that indicates mainly a supportive university environment. According to the results, if a university provides adequate knowledge and inspiration for entrepreneurship, the possibility of choosing an entrepreneurial career might increase among young people. It is obvious that this result confirms the key role of education in the development of entrepreneurial intention. Therefore, in the light of the current study, it might be stated that entrepreneurship can be fostered as a result of a learning process. This result is not only interesting from the theoretical point of view, but it is also a challenge for the educators and policy-makers. Since entrepreneurial activities are becoming vital to the economic development of a country, both of these groups might focus on the design of more effective educational policies. Although there is no consensus on the content and structure of entrepreneurship education, the findings of current study showed that universities should, at least, “encourage the development of creative ideas for being an entrepreneur”, “provide the necessary knowledge about entrepreneurship”, and “develop the entrepreneurial skills”. However, the strength of the link between educational support and entrepreneurial intention was not affected by the level of self-confidence. Second factor, which also emerged significant in the survey, is structural support. It is obvious that fostering entrepreneurship requires a more comprehensive support including the collaboration of all sectors in the society. Despite its weak explanatory power, the analysis also showed that this type of structural support might affect entrepreneurial intention of university students. One of the interesting results in the study is the impact of moderating variable on the proposed link between perceived structural support and entrepreneurial intention. The hypothesis test confirmed that self-confident respondents perceive structural support more favorable than others. In this case, the level of self- confidence might affect one’s perception on external environment. Although the structural conditions are similar for everyone living in the same context, the perceptions, attitudes, and behaviors might vary. Therefore, the structural support for entrepreneurship is very significant to stimulate people to be an entrepreneur. Another interesting result of survey appears when comparing the explanatory powers of educational and structural supports; the former has slightly higher beta coefficient than the latter. In this case, educational support was perceived more important than structural support. The possible reason for this result might be the timing differences between these two support factors. It is clear that the main focus of structural support is existing entrepreneurs in the economy. Although students are currently aware of this support, they might think that this type of large scale supports will affect them in the future. On the other hand, educational support might be perceived as an immediate factor. Therefore, it is logical that the impact of educational support was higher than structural support.

5.2 Limitation of study

The current study is subject to some limitations. Firstly, similar to the previous studies in the literature, the study focuses on the intentionality. It is clear that intentions may not turn into actual behaviors in the future. Therefore, even if one respondent stated a high entrepreneurial intention in the survey, s/he might choose a completely different career path in the future. In fact, it has been a common problem for almost all study in the literature and currently there is no other accurate way to measure the tendency for entrepreneurship. Therefore, the statements of respondents about their entrepreneurial intention were taken as a reliable source of information. However, it might be more useful to measure this variable through multiple items in order to reduce measurement error in the further studies.Since the collected data was based on the perceptions of the students, a second limitation might appear on a possible difference between “perceptions” and “reality”.Obviously, there is always a risk that the perceptions of students on outside world might be different than the reality. The studies that aim to show such realities may indicate that, for instance, the universities are successful to stimulate entrepreneurship or financial system are supporting entrepreneurs sufficiently etc. These types of studies are highly valuable to take a picture of entrepreneurial environment. However, it is equally important to analyse how these given conditions are perceived by entrepreneurs or potential entrepreneurs – even if they have limited knowledge of outside world. The current study aims to understand the perceptions of students on the context.Another limitation is that some factors in the model were broadly defined and so broadly measured in the survey. For instance, educational support factor were measured through three broad statements, which assess the education support for stimulating “creative ideas”, providing “knowledge about entrepreneurship”, and developing “entrepreneurial skills and abilities”. The main reason of such broadness is to increase the generalizability of the model and make it available for the use of new studies in different contexts. When considering the variety of entrepreneurship education in all around the world, it might be more reasonable to analyse the general nature of entrepreneurship education, rather than focusing on a specific context. As it is mentioned previously, there is a great variety among universities on the entrepreneurial education – even in the same country (Gu¨ rol and Atsan, 2006, p. 27).