A COMPARATIVE STUDY ON ATTITUDE TOWARDS ENTREPRENEURSHIP AMONG MBA AND OTHER STUDENTS

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1 A COMPARATIVE STUDY ON ATTITUDE TOWARDS ENTREPRENEURSHIP AMONG MBA AND OTHER STUDENTS Shaik Karim 1, Dr. Ch.Venkataiah 2 1 Research Scholar, 2 Associate Professor, GITAM School of International Business, GITAM University, Visakhapatnam, (India) ABSTRACT Entrepreneurship contributes immensely to the economic growth and thereby plays a vital role in the development process. Business organizations and Governments across the world have hailed the importance of entrepreneurship and its contribution to socio-cultural and economic development. There is general agreement that attitude towards the entrepreneur, entrepreneurial activity, and its social function is determinant factors for university students to decide an entrepreneurial career? This paper aimed at assessing student s beliefs and attitudes toward new venture creation and the entrepreneur. It also attempted to determine any significant differences in the respondent s attitude when grouped by (a) gender (b) entrepreneurs among relatives and (c) course. The respondents were university students studying UG and PG courses in Chittoor District of Andhra Pradesh (India). The data were analyzed using MS Excel and SPSS package. Results reveal a positive entrepreneur s image and favorable perception of desirability of new venture creation, Keywords: Attitudes, Beliefs, Entrepreneurship, Perception, Students I. INTRODUCTION No country in the world can ignore the development of entrepreneurship as the economic development depends upon it. Entrepreneurship has been a buzzword especially among young people. Experts view entrepreneurship in various perspectives. Entrepreneurship is the activity of establishing and managing a business for profit and growth [1].Entrepreneurship is the professional application of knowledge, skills and competencies and/or of monetizing a new idea, by an individual or a set of people by launching an enterprise de novo or diversifying from an existing one (distinct from seeking self employment as in a profession or trade), thus to pursue growth while generating wealth, employment and social good [2]. Entrepreneurship contributes immensely to the economic growth and thereby plays a vital role in the development process. It sows the seeds of development and that, in turn, facilitates the growth, it is the policy goal of many governments to develop a culture of entrepreneurial thinking. In India, entrepreneurship was initially displayed in only certain communities. Faced with the problem of limited supply of entrepreneurship, Government of India has taken several positive measures during the plan periods not only to develop entrepreneurship but also to promote small scale enterprises. Despite the efforts of support organization and entrepreneurship development centers, it is felt that much is to be done to make entrepreneurship as an attractive 249 P a g e

2 career. In this regard, entrepreneurship education has gained importance and is drawing the attention of policy makers, academicians and researchers. Development of entrepreneurship is essentially dependent on the entrepreneurial attitude, that is to say a special frame of mind marked by an independent energetic spirit to assume risks and, of course, courage to undertake something new. The attitudes towards the entrepreneur, entrepreneurial activity, and its social function are determinant factors for students to decide an entrepreneurial career. This study aims at assessing the attitudes of students towards entrepreneurship and enterprise formation in Chittoor District of Andhra Pradesh. The study also examines if there is any difference in the attitudes of Management and Other Students. II. THEORETICAL FRAMEWORK The entrepreneurial model developed by Krueger and Brazeal have been used in our research. Their model takes a social psychology perspective and is a process-based, theory-driven micro model with macro consequences [3]. The model is based on Shapero s work on the entrepreneurial event and Ajzen s Theory of Planned Behavior. The Shapero s model of entrepreneurial event formation focuses on how the cultural and social environment affects the choice of an entrepreneurial path. He states that the intent to start a business derives from perceptions of both, desirability and feasibility and the Ajzen s Theory of Planned Behavior [4], designed to predict and explain human behavior, centers on the individual s intention to perform a given behavior. Perceived Desirability (Social norms, Attitude) Credibility Potential Intentions Perceived Feasibility (Selfefficacy) Propensity to Act Precipitating Event Source: Krueger and Brazeal1994:95 Figure 1. Model of entrepreneurial potential Therefore credibility requires that the behavior be seen both desirable and feasible. These antecedents affect the intentions toward the behavior or action of new venture creation. The model allows for the case that although the individual perceives the new venture creation desirable and feasible, and therefore credible, he/she has not the intention to realize the behavior because the precipitating event may be lacking. 2.1 Perceived Venture Desirability The Krueger and Brazeal s model state that this construct embraces the two attractiveness components of the Theory of Planned Behavior: attitude toward the act and social norms. From Theory of Planned Behavior, attitude toward the act refers to the degree to which a person has a favorable or unfavorable evaluation or appraisal of the behavior in question. Social norms, on the other hand, refer to the perceived social pressure to perform or not to perform the behavior. These are tied to our perceptions of what important people in our lives would think about our launching a venture. The theory of planned behavior, in its intent to explain human 250 P a g e

3 behavior deals also with the antecedents of attitudes toward the behavior and subjective norms. The theory of planned behavior postulates that behavior is a function of beliefs relevant to the behavior. It is these salient beliefs that are considered to be the prevailing determinants of a person s attitudes, intentions and behavior. Behavioral beliefs are assumed to influence attitudes toward the behavior. Each belief links the behavior to a certain outcome, which is already valued positively or negatively. Therefore, people automatically acquire an attitude toward the behavior. In this way, people form favorable attitudes toward behaviors believed to have desirable consequences and negative attitudes toward behaviors associated with undesirable consequences. In the case of subjective norms, normative beliefs constitute their underlying determinants. Normative beliefs are concerned with the likelihood that important referent individuals or groups approve or disapprove of performing a given behavior. On the other hand, Shapero[5] examines the concept of desirability using data on the family, peer groups, ethnic groups, educational and professional contexts of potential entrepreneurs. In the case of the family, he states that particularly the father or mother plays the most powerful role in establishing the desirability and credibility of the entrepreneurial action for an individual. In the same way, the larger the number and variety of entrepreneurs in a particular culture, the greater the probability that the individuals in that culture will form companies[6]. 2.2 Perceived Venture Feasibility As indicated above, in Krueger and Brazeal s model, perceived feasibility in Shapero s terminology, corresponds to perceived behavioral control in the theory of planned behavior. Perceived behavioral control plays an important part in the Theory of Planned Behavior. According to this theory, the resources and opportunities available to a person must to some extent dictate the likelihood of behavioral achievement. However, of greater psychological interest than the actual control is the perception of behavioral control and its impact on intentions and actions. Perceived behavioral control is defined in the Theory of Planned Behavior as the people s perception of the ease or difficulty of performing the behavior of interest. The antecedents of perceived behavioral control are the control beliefs. These beliefs deal with the presence or absence of requisite resources and opportunities. These control beliefs may be based in part on past experience with the behavior, but they will usually also be influenced by second hand information about the behavior, by the experiences of acquaintances and friends, and by other factors that increase or reduce the perceived difficulty of performing the behavior in question. Related to this construct, Shapero emphasizes the perception of the availability of financial support, although he mentions also the perception of the availability of other supports as advice, consultation and education that make the act of venture creation feasible to the potential entrepreneur. According to the Theory of Planned Behavior, the relative importance of attitude, subjective norm and perceived behavioral control in the prediction of intention is expected to vary across behaviors and situations. In the same way, Shapero states that in the new venture creation process, no single variable or factor can account for the outcome of the process. A number of outcomes are necessary but no one is sufficient. However, Krueger presents evidence that perceived credibility, perceived desirability and propensity to act explain well over half of the variance of the intentions toward entrepreneurship, with feasibility perceptions explaining the most[7]. 251 P a g e

4 Therefore Krueger and Brazeal state as their most important conclusion the primacy of perceived feasibility and the need to research what factors contribute the most to perceptions of feasibility. III. PROBLEM STATEMENT AND RESEARCH OBJECTIVES It is said that institutions are the rules of the game in a society or, more formally, are the humanly devised constraints that shape human interaction [8]. Therefore, the institutional context affects the performance of economies, particularly through the influence over the entrepreneur s behavior, and therefore should be explored and analyzed closely. The Institutional Economic Theory serves to analyze, in a holistic way, the contextual factors as determinants of entrepreneurship. It has been stated that this theory currently supplies the most consistent and appropriate conceptual framework to probe the influence of the environmental factors on entrepreneurship in a region or country. 3.1 Research Questions The following questions were formulated for this study Whether students consider desirable to start a new firm? Whether students have a positive or negative perception of new venture feasibility? Whether students have a serious intention to create their own firm? Which is the student s image of the entrepreneur? How do they evaluate the entrepreneur s social and economic role in society? How do students rank the prestige of the entrepreneur compared to other professions? Does there exist a relationship between gender and the variables of desirability, feasibility and intention to create a new firm? Does there exist a relationship between entrepreneurs among relatives and the variables of desirability, feasibility and intention to create a new firm? Does there exist a relationship between Course of Study and the variables of desirability, feasibility and intention to create a new firm? 3.2 Research hypotheses The hypotheses tested in this paper respond to the demographic variables extensively studied in the literature crossed with the principal aspects of Krueger and Brazeal s model. The variables of gender and entrepreneurs among relatives and course of study were crossed with desirability, feasibility and intention to create a new firm to test hypotheses. The Main Variables are The variable gender The variable entrepreneurs among relatives The variable Course of Study The variable gender Several studies have found that males have a higher preference for entrepreneurship behavior than females [9][10]. Studies found that males have a significantly higher preference for self-employment than females[11]. The authors came to conclusion that gender influence self employment intentions indirectly through their effect 252 P a g e

5 on attitude, subjective norm, and perceived behavioral control. Taking a cue from previous research following three hypotheses was developed in this research concerning the variable gender. Hypotheses: H1: There is a relationship between the student s gender and the perception of new venture desirability H2: There is a relationship between the student s gender and the perception of new venture feasibility H3: There is a relationship between the student s gender and the serious intention to create a new firm The variable entrepreneurs among relatives Previous studies on family background evidences a positive relationship between the presence of role models in the family and the emergence of entrepreneurs. Collins, Moore and Unwalla[12]were the first authors to verify through an empirical research that the influences over a new venture idea go back to the childhood and the family circumstances of the entrepreneur. Among more recent works treating this theme the following can be mentioned: Brockhaus and Horwitz [13], Scherer et al.[14] Matthews and Moser[15]. Advocates of demographic models have suggested and found empirical support for the hypothesis that family background is related to entrepreneurial intentions. Kolvereid, in its application of the Theory of Planned Behavior to predict employment status choice, also studied the role of family background. Taking into consideration previous empirical works presented, the following three hypotheses were developed in this research concerning the variable entrepreneurs among relatives. Hypotheses: H4: There is a relationship between entrepreneurs among relatives and the perception of new venture desirability H5: There is a relationship between entrepreneurs among relatives and the perception of new venture feasibility H6: There is a relationship between entrepreneurs among relatives and the serious intention to create a new firm. The variable course of study One may consider that students in different degree programmes have different perceptions of entrepreneurship. Some researchers have studied the perception and attitudes towards entrepreneurship based on course of study Michael L. Harris et al.[16] John Luiz et al. [17]. Therefore the study is also an attempt to find if there is any difference between MBA and OTHER Students Hypotheses: H7: There is a relationship between the Course of Study and the perception of new venture desirability H8: There is a relationship between the student s Course of Study and the perception of new venture feasibility H9: There is a relationship between the student s Course of Study r and the serious intention to create a new firm IV. METHODOLOGY 4.1 Participants and Instrumentation The samples in this study were UG and PG students studying in Chittoor district. The physical questionnaires were administered to students in their lectures. A total of 193 students completed the survey. After removing the incomplete responses the final sample of 176 were taken for analysis. The questionnaire used in the study was 253 P a g e

6 based on a survey carried out by Jose M Veciana et. al (2005). There were questions consisting of Demographic factor perception towards new venture creation intentions and Entrepreneurs image. 4.2 Data Analysis Procedures The data analysis for this study conducted through MS Excel and SPSS software. Statistical tools like independent sample t test and Chi Square test were used for analysis purpose. V. RESULTS AND DISCUSSION 5.1 Profiles of Respondents The demographic profile of participant s according to gender, age, and course of study is presented in Table 1. Table 1: Profiles of Respondents Variables Frequency(n) Percentage (%) Gender Female Male Age Mean age = Course MBA OTHER From the above 176 respondents in this study 106(60.2 %) are male and 70(39.8%) are females. The mean age of the respondents is years. 98(55.7 %) are management students and remaining 78(44.3%) are from other discipline. 5.2 New Venture desirability Table 2 shows the results of the answer to the question: Do you consider desirable to create a new firm? Table 2: New Venture Desirability Frequency(n) Percentage (%) Affirmative P a g e

7 Negative (62.5%) students answered affirmatively to this question and the remaining 66(37.5%) answered negatively. 5.3 New Venture Feasibility Table 3 shows the results of the answer to the question: Do you consider that it is easier or more difficult to create a new firm at present than in the past decades? Table 3: Perception of New Venture feasibility Frequency(n) Percentage (%) Easier More Difficult NA The majority of the students answered that it is more difficult to create a new firm at present than in the past decades 5.4 Students Intention to Create A New Firm Table shows the results of the answer to the question: Have you seriously thought about creating your own business? Table 4: Students intention to create a new firm Frequency(n) Percentage (%) No never No, but I plan to join a family business Yes may be Yes seriously Yes I have the firm intentions to create my own business The majority of the students 92(52.3%) have a vague intention to create a new firm. The percentage of students who have never seriously thought of creating a new firm is Entrepreneur's Image Desirability to become an entrepreneur depends on the image of the entrepreneur. Therefore it is important to know the image of the entrepreneurs in society. Table 5 and Table 6 represent the ranking of the entrepreneurs prestige compared to other professionals and the valuation of the attributes related to the image of the entrepreneurship. Table 5: Ranking of the prestige of 14 professions MBA Other Profession N Mean N Mean t- value Doctor Entrepreneur Teacher Executive of Large firm P a g e

8 Economist Journalist Psychologist Engineer Sociologist Lawyer Physicist Translator Chemist Publicist * Statistically significant difference at the 0.05 level of significance among MBA and Other students The MBA student have ranked second to entreneur profession after the Doctor. On the other hand the Students from other have ranked Doctor first and then Teacher the entrepreneur profession was given third position. Table 6:Image of the Entrepreneur MBA OTHER Image of Entrepreneur N Mean N Mean t- value Entrepreneurs are dynamic persons Entrepreneurs have good organizational skills Entrepreneurs have good financial and management skills Entrepreneurs are very innovative Entrepreneurs are professionally well prepared Entrepreneurs are able and willing to take risks Entrepreneurs have a good entrepreneurial vision Entrepreneurs invest Entrepreneurs create jobs Entrepreneurs help the economic development of the country Entrepreneurs earn a lot of money Entrepreneurs engage in a dialogue with the employees Entrepreneurs are honest and moral Entrepreneurs have a sense of social justice Statistically significant difference at 0.05 level of significance among MBA and OTHER Students. The MBA students have ranked the attributes Entrepreneur are able and willing to take risks and Entrepreneurs are dynamic persons in the first two positions. On the other hand the students from other discipline have ranked 256 P a g e

9 the following attributes in the first two positions Entrepreneurs have good organizational skills and Entrepreneurs are very innovative. 5.6 Hypotheses Testing H1: There is a relationship between the student s gender and the perception of new venture desirability Table 7: Gender distribution and desirability Perception MBA OTHER Negative Affirmative Negative Affirmative Female Male Total Chi-Square Value=6.112 * Chi-Square Value=23.930* *Statistically significant at 0.05 level of significance. Hypothesis 1 is confirmed for both MBA and Other discipline students. In the sample there seems to exist a positive relationship between gender and the perception. The male percentage of student who answered affirmatively is higher than the percentage of female. H2: There is a relationship between the student s gender and the perception of new venture feasibility Table 8: Gender distribution and feasibility Perception to create a new firm MBA OTHER Easier at present Difficult at present Easier at present Difficult at present Female Male Total Chi-Square Value=2.995 Chi-Square Value=1.304 Statistically not significant at 0.05 level of significance The result revealed that there is no statistical evidence at the 0.05 level of significance to confirm the hypothesis 2. H3: There is a relationship between the student s gender and the serious intention to create a new firm Table 9: Gender distribution and intention to create a new firm MBA No never No but I plan to Yes may be Yes seriously Yes I have the join a family firm intention business Female Male Total Chi-Square Value=3.439 Not Significant OTHER Female P a g e

10 Male Total Chi-Square Value= Significant For hypothesis 3 the result was mix f or MBA Students the result was found to be statistically not significant but in case of the students from other discipline the result was found to be statistically significant. H4: There is a relationship between entrepreneurs among relatives and the perception of new venture desirability Table 10 : Entrepreneurs among relatives and desirability Perception MBA OTHER Negative Affirmative Negative Affirmative Entrepreneurs among relatives Non Entrepreneurs among relatives Total Chi-Square Value=.710 Not significant Chi-Square Value=5.354 * 0.05 level Significant at Hypothesis 4 is confirmed only for students from other discipline. In case of MBA students the results shows that there is no statistical evidence at the 0.05 level of significance to confirm hypothesis 4. H5: There is a relationship between entrepreneurs among relatives and the perception of new venture feasibility Table 11 : Entrepreneurs among relatives and new venture feasibility MBA OTHER Easier at present Difficult at present Easier at present Difficult at present Entrepreneurs among relatives Non Entrepreneurs among relatives Total Chi-Square Value=7.733 Significant Chi-Square Value=.216 Not significant Hypothesis 5 is confirmed for the sample of MBA students only. In the sample there seems to exist a positive relationship between the Entrepreneurs among relative and the perception of new venture feasibility. In case of students from other discipline there is no statistical evidence to confirm the hypothesis. H6: There is a relationship between entrepreneurs among relatives and the serious intention to create a new firm 258 P a g e

11 Table 12 : Entrepreneurs among relatives and intention to create new firm MBA No never No but I plan to join a family business Yes may be Yes seriously Yes I have the firm intention Entrepreneurs among relatives Non Entrepreneurs among relatives Total Chi-Square Value= Significant OTHER Entrepreneurs among relatives Non Entrepreneurs among relatives Total Chi-Square Value= Significant Hypothesis 6 is confirmed for both MBA and Students from other discipline. There seems to exist a positive relationship between the variable entrepreneurs among relatives and the firm intention to create a new firm. H7: There is a relationship between the Course of Study and the perception of new venture desirability Table 13 : Course of study and desirability Perception Course Negative Affirmative MBA OTHER TOTAL Chi-Square Value=.153 Not Significant The result revealed that there is no statistical evidence at the 0.05 level of significance to confirm the hypothesis 7. H8: There is a relationship between the student s Course of Study and the perception of new venture feasibility Table 14 : Course of study and Perception of new venture feasibility Course Easier More Difficult MBA OTHER TOTAL Chi-Square Value=7.763 Significant 259 P a g e

12 Hypothesis 8 is confirmed. There seems to exist a relationship between the variable course of study and perception of new venture feasibility. H9: There is a relationship between the student s Course of Study r and the serious intention to create a new firm Table 15 : Course of study and intention to create new firm No never No but I plan to join a family business Yes may be Yes seriously Yes I have the firm intention MBA OTHER Total Chi-Square Value=4.861 Not Significant The result revealed that there is no statistical evidence at the 0.05 level of significance to confirm the hypothesis 9. VI. CONCLUSIONS The main conclusion of the research are the following: 1. The survey reveals that the university students have a positive perception of new venture desirability. The majority of the students 110(62.5%) answered that they consider desirable to create a new firm. 2. The questions regarding the perceptions of feasibility show that 62.5% of students consider that it is more difficult to create a firm at present than in the past decades. 3. A high percentage of the students in sample has vaguely (52.39%) considered to create a new firm as a career path, but only a small percentage has the firm intention (13.6%) do so. 4. There seems to exist a relationship between the student s gender and the perception of new venture desirability. 5. There seems to exist a relationship between the variable entrepreneurs among relatives and feasibility perception to create a new firm in the case of MBA students. 6. There seems to exist a relationship between the variable entrepreneurs among relatives and intention to create a firm. Students with entrepreneurs in their families have thought more seriously to create a new venture. 7. There seems to exist a relationship between the variable course of study and perception of new venture feasibility. 8. There exists a positive image of the entrepreneur among the students. 9. The prestige of the entrepreneurial activity as a profession compares relatively well with other professions. It is interesting to note that the profession of entrepreneur was ranked third by students from other discipline and second by MBA students. REFERENCES 260 P a g e

13 [1] Goel, A., Vohra, N., Zhang, L., & Arola, B.(2007). Attitudes of the Youth towards Entrepreneurs and Entrepreneurship: A cross cultural comparison of India and China, Journal of Asia Entrepreneurship and Sustainability,.Vol.3,No.1. [2] National Knowledge commission of India(NKC 2008) [3] Krueger, N. & Brazeal, D. (1994), Entrepreneurial potential and potential entrepreneurs. Entrepreneurship Theory and Practice, 18(3): [4] Ajzen, I. (1991), The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50: [5] Shapero, A. (1982), Social dimensions of entrepreneurship. In C. Kent et al. (Eds.), The encyclopedia of entrepreneurship: Englewood Cliffs, NJ: Prentice Hall. [6] Veciana, J., Aponte, M. & Urbano, D. (2005), Attitudes towards entrepreneurship: Two countries comparison, International Entrepreneurship and Management Journal 1, [7] Krueger, N. (1993), The impact of prior entrepreneurial exposure on perceptions. Entrepreneurship Theory and Practice, 18(1): [8] North, D. (1990), Institutions, institutional change and economic performance. Cambridge University Press. [9] Delmar, F. & Davidsson, P. (2000), Where do they come from? Prevalence and characteristics of nascent entrepreneurs. Entrepreneurship and Regional Development, 12: 1 23 [10] Kolvereid, L. (1996), Prediction of employment status choice intentions. Entrepreneurship Theory and Practice,21(1): [11] Ajay Singh et.al(2014) Engineering Education and Entrepreneurial Attitudes Among Students: Ascertaining the Efficacy of the Indian Education System, Prabandhan:Indian Journal of Management, Volume:7 pp7-20 [12] Collins, O.F., Moore, D.G. & Unwalla, D.B. (1964), The enterprising man.msu Business Studies. [13] Brockhaus, R.H. & Horwitz, P.S. (1986), The Psychology of the Entrepreneur. In D. Sexton & R. Smilor (Eds.),The art and science of entrepreneurship: Cambridge, MA: Ballinger. [14] Scherer, P. D., Adams, J., Carley, S. &Wiebe, F. (1989), Role model performance effects on development of entrepreneurial career preference. Entrepreneurship Theory and Practice, 13(3): [15] Matthews, C. H. & Moser, S. B. (1995), Family background and gender: Implications for interest in small firm ownership. Entrepreneurship and Regional Development, 7: [16] Michael L. Harris et. al.(2008), Examining the entrepreneurial attitudes of US business students Education + Training Vol.50 No.7 [17] John Luiz et.al(2011) ENTREPRENEURSHIP IN AN EMERGING AND CULTURALLY DIVERSE ECONOMY : A SOUTH AFRICAN SURVEY OF PERCEPTIONS SAJEMS NS14(2011) No P a g e