VALUES AND ENTREPRENEURIAL ATTITUDE AS PREDICTORS OF NASCENT ENTREPRENEUR INTENTIONS
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1 VALUES AND ENTREPRENEURIAL ATTITUDE AS PREDICTORS OF NASCENT ENTREPRENEUR INTENTIONS Noel J. Lindsay 1, Anton Jordaan, and Wendy A. Lindsay Centre for the Development of Entrepreneurs University of South Australia ABSTRACT This exploratory research examines the relationship between values, the entrepreneurial attitude of nascent entrepreneurs (individuals intending to establish new businesses), and their entrepreneurial intentions. This involved administering a questionnaire to 166 participants who were unemployed and who identified themselves as nascent entrepreneurs after a thorough screening process to ensure they intended starting businesses. Prior research has identified values/beliefs as influencing attitudes, attitudes as influencing intentions, and intentions ultimately influencing behavior. Surprisingly, in this research, only a weak relationship existed between the three List of Values dimensions (empathy, achievement, and hedonism) and entrepreneurial attitudes. Significant relationships, however, were identified between the dimensions underpinning entrepreneurial attitude orientation (EAO) and entrepreneurial intention. In addition, although a relationship existed between two of the values dimensions, empathy and hedonism, there was no significant relationship between the achievement values dimension and entrepreneurial intention. This was perplexing since it could be expected that there would be an achievement-entrepreneurial intention relationship for nascent entrepreneurs. Since attitudes are changeable and values are more likely to be stable over time, values may enhance the information provided by nascent entrepreneur EAO. INTRODUCTION This exploratory research examines the relationship between values, the entrepreneurial attitude of nascent entrepreneurs, and their intentions. An attitude is the predisposition to respond in a generally favorable or unfavorable manner with respect to the object of the attitude (Ajzen 1982; Rosenberg and Hovland 1960; Shaver 1987). Models based upon the theories of reasoned action (Fishbein and Ajzen 1975) and planned behavior (Ajzen 1985) use attitude as indirect behavior prerequisites, via intentions, to perform particular behaviors. Performance of a behavior is determined by the strength of the person s intention to perform that behavior. Intention is viewed as a function of the person s attitude toward performing the behavior (Ajzen 1985). Whereas attitudes are open to change - across time and situations, values are thought to be relatively stable (Rokeach, 1973; Schwartz, 1992); however, they can and do change (Kahle, 1983; Kahle, Poulos, and Sukdial, 1988; Rokeach and Ball-Rokeach, 1989). Values are enduring beliefs that a specific mode of conduct or end state of existence is personally or socially preferable to an opposite or converse mode of conduct or end state of existence. Values guide attitudes, intentions, and behaviors (Rokeach, 1973). As such, in order to appreciate entrepreneurial attitude, it is important to appreciate an entrepreneur s value system. In examining entrepreneurial attitude, a validated measurement scale has been developed (e.g., Robinson, Stimpson, Heufner, and, Hunt, 1991) though it does not incorporate values. This 1 Centre for the Development of Entrepreneurs, School of Management, City West Campus, North Terrace, University of South Australia, Adelaide SA 5001, Australia; noel.lindsay@unisa.edu.au;
2 research, therefore, makes a contribution by building upon prior entrepreneur attitude research to (1) extend it to nascent entrepreneurs and, as part of this, linking it to entrepreneurial intentions and (2) incorporate values as a means of better understanding entrepreneurial attitude, intentions, and behavior. Since attitudes are not enduring and values are, values may provide a more stable understanding of entrepreneurial intentions and entrepreneurial behavior. MODEL DEVELOPMENT Figure 1 provides an overview of the values-entrepreneurial attitude-intentions model. This demonstrates hypothesized relationships between the three constructs. Insert Figure 1 about here Values Values are enduring beliefs that a specific mode of conduct or end state of existence is personally or socially preferable to an opposite or converse mode of conduct or end state of existence (Rokeach, 1973, p.5). Values are considered to be shaped largely by pre-adult socialisation and have been viewed as situationally invariant (Schwartz, 1992); however, values can and do change with time and events (Kahle, 1983; Kahle, Poulos, and Sukdial, 1988; Rokeach and Ball-Rokeach, 1989). Various studies support the hierarchical primacy of values over attitudes and behaviors whereby values can influence attitudes and behaviors (e.g., Homer and Kahle, 1988). As such, values provide a stable and inner-oriented understanding of individuals more so than attitudes. The relative importance of different values to an individual has frequently been measured using the method developed by Rokeach (1973). A simplified alternative to Rokeach s (1973) method is the List of Values or LOV (Kahle, 1996; Kahle, Beatty, and Homer, 1986). LOV is used in this research. It consists of nine values: a sense of belonging, excitement, fun and enjoyment in life, warm relationships with others, self-fulfilment, being well-respected, a sense of accomplishment, security, and self-respect. Various studies have demonstrated that, through factor analysis, these nine values (usually) can be reduced to three dimensions (e.g., Homer and Kahle, 1988). Various names have been attributed to these three dimensions including empathy, achievement, and hedonism (Kamakura and Novak, 1992). In this research, the following hypotheses are generated H1: Nascent entrepreneurs will exhibit moderate levels of Empathy. H2: Nascent entrepreneurs will exhibit high levels of Achievement. H3: Nascent entrepreneurs will demonstrate moderate levels of Hedonism. Entrepreneurial Attitude Orientation (EAO) EAO is based upon both attitude theory and entrepreneurship theory. Robinson, Stimpson, Huefner, and Hunt (1991) use a tripartite model to measure attitude in terms of affect, behavior, and cognition (Rosenberg and Hovland, 1960; Shaver, 1987). In measuring entrepreneurial attitude, four additional entrepreneurship subscales are adopted. These are achievement, innovation, perceived personal control, and perceived self esteem. These
3 dimensions combine to provide a scale that has been used to correctly classify entrepreneurs from non-entrepreneurs (Robinson, Stimpson, Huefner, and Hunt, 1991). This research extends the use of this scale to nascent entrepreneurs. H4: Nascent entrepreneurs will demonstrate high levels of EAO. Entrepreneurial Intentions In this research, we define entrepreneurial intention as the commitment to starting a new business (Kruger, 1993). Individuals are predisposed toward entrepreneurial intentions based on a combination of personal and contextual factors. Individuals develop attitudes toward undertaking specific behaviors based on their values/beliefs. Intentions result from attitudes and become the immediate determinant of behavior (Fishbein and Ajzen, 1975). In other words, values drive attitudes which, in turn, drive intentions which ultimately drive behaviors. H5: There will be a relationship between values and entrepreneurial attitudes. H6: There will be a relationship between values (empathy, achievement, and hedonism) and intentions. H7: There will be a relationship between entrepreneurial attitudes and intentions. RESEARCH DESIGN Participants There were 166 participants in this study. These participants were unemployed but identified themselves as intending to start businesses. Newspaper advertisements were placed in leading newspapers asking for unemployed individuals wanting to start a business to apply. The advertisements also promoted a one year entrepreneurship training and mentor program. Participants were to be paid a small allowance by the government if accepted onto the program. Over 2,000 responses were received. Approximately 400 participants were identified as budding potential entrepreneurs. Of these, a random sample of 166 participants was selected for participation in this research. Table 1 provides participant demographics. Insert Table 1 about here Measures Entrepreneurial Attitude Orientation (EAO): Robinson, Stimpson, Huefner, and Hunt s (1991) instrument was used to measure EAO. The instrument uses a total of 75 questions using a 10 point Likert scale (1 = Strongly Disagree and 10 = Strongly Agree) to collect information about the 12 underlying EAO dimensions. Entrepreneurial Intentions: Participants were asked whether they intended to start a business and, using a 7-point Likert scale (1 = Unsuccessful and 7 = Successful), their intentions to achieve success across a range of areas including financial, personal achievement, family security, and community related. Values: The LOV instrument developed by Kahle (1983) was used to measure personal values. This comprises nine questions and uses a Likert scale (1 = Important to Me and 9 = Extremely Important to Me).
4 Results Table 2 provides the descriptive statistics, reliabilities, and correlations. Insert Table 2 about here There were seven hypotheses. H1 to H3 focused on personal value levels. These three hypotheses appear to be confirmed though statistical analysis was not possible. Since the research is exploratory, means and standard deviations were used. On the nine point value scale with 1 = Important to Me and 9 = Extremely Important to Me, the means (standard deviations) of the three value dimensions empathy, achievement, and hedonism were 5.8 (2.1), 7.8 (1.5), and 5.7 (2.2) respectively. Thus, in this sample, nascent entrepreneurs exhibited moderate levels of Empathy (H1 confirmed), high levels of achievement (H2 confirmed), and moderate levels of hedonism (H3 confirmed). H4 hypothesizes that nascent entrepreneurs will demonstrate high levels of EAO. Similarly, statistical analysis was not possible and means (standard deviations) were used instead. Questions used a 10 point Likert scale (1 = Strongly Disagree and 10 = Strongly Agree). H4 was only partially confirmed with only 10 of the 12 means tending toward the upper levels of the scale (with innovation-behavior (mean = 5.9 (s.d. = 1.2)) and self-esteem-affect (mean = 4.7 (s.d. = 1.8)). H5 hypothesizes that there will be a relationship between values and entrepreneurial attitudes. This hypothesis was only partially confirmed with nine out of the possible 36 values-eao relationships demonstrating significance. H6 hypothesizes that there will be a relationship between values and entrepreneurial intentions. This was only partially confirmed. There were significant relationships for empathy and hedonism but not achievement. H7 hypothesizes that there will be a relationship between entrepreneurial attitudes and intentions. This was partially confirmed with no significant relationship between self esteem-behavior and entrepreneurial intentions. DISCUSSION Values/beliefs influence attitudes. Yet, in this research there was only a very weak relationship identified between values and EAO. Examining the EAO results independently of the values results suggests that nascent entrepreneurs tend to demonstrate an entrepreneurial attitude toward the start-up intention and decision at least at the time when the data was collected. However, in terms of the three values dimensions (empathy, achievement, and hedonism); the dimension most expected to be associated with entrepreneurial intention achievement was not significantly related to intention (though relatively high levels of achievement were identified in participants). This is perplexing since one would expect entrepreneurs (whether existing or intending) to demonstrate a significant achievement-entrepreneurial intention relationship. One interpretation of this result is that values tend to be enduring and do not easily change over time. They are instilled in us from an early age. Attitudes, on the other hand, are susceptible to change over time and situations. They are dependent upon time and situational context. In
5 other words, measured at different points in time or in different given situations, they may vary. In this research, the entrepreneurial attitude of participants was measured. At that point in time, participants demonstrated high levels of EAO and a significant relationship between EAO and entrepreneurial intention. Yet, there was no significant relationship between personal achievement and intention. Despite that participants stated that they intended to start businesses and their attitudes supported this, the lack of a relationship between achievement and intention suggests that these participants may not carry out their intentions. A longitudinal study is necessary to support this explanation and this is currently being undertaken. To date, one year after the data in this research was collected, a significant number of the participants in the research have failed to develop business plans and assistance has been necessary to help participants identify business opportunities. The study is ongoing. In the past, EAO has been used successfully to discriminate between existing entrepreneurs and non-entrepreneurs (Robinson, Stimpson, Huefner, and Hunt, 1991). EAO has previously not been used with nascent entrepreneurs. It would seem that using the EAO instrument, by itself, for attempting to identify nascent entrepreneur long term intentions (and behavior) may be insufficient. Although measuring entrepreneurial attitudes are useful, values are more stable and therefore may provide a deeper understanding of nascent entrepreneur long term intentions and behavior. As such, EAO may be enhanced at least when investigating nascent entrepreneurs - by incorporating values as an integral part of the EAO model. Research Contributions This research is exploratory and raises a number of questions. However, from a theoretical perspective, the research extends the current body of knowledge to include nascent entrepreneurs with the aim of creating a more holistic EAO theory. From an applied perspective, the research provides insights into the selection of individuals who identify themselves as nascent entrepreneurs. Although stated intentions to start a business and having an entrepreneurial attitude may be useful in evaluating the potential for nascent entrepreneur to actually start a business, personal values may enhance the evaluation process. Research Limitations and Future Research Directions The research has a number of limitations. First, the sample was not selected randomly. Participants were pre-qualified as being potential nascent entrepreneurs. As such, extrapolation of the results to nascent entrepreneurs generally should be done with caution. Second, the research did not examine non-entrepreneurs. As such, comparisons of statistical significance could not be undertaken between nascent and non-entrepreneurs. Third, participants were unemployed. Further research needs to examine nascent entrepreneurs who are not unemployed. SUMMARY The purpose of this exploratory research was to contribute toward the development of an holistic theory of entrepreneurial attitude orientation that incorporates both existing and nascent entrepreneur perspectives. EAO has been successfully used to discriminate between existing entrepreneurs and non-entrepreneurs. This research attempted to extend its use to nascent entrepreneurs. In dealing with nascent entrepreneurs, it may be advantageous to also incorporate personal values into the model.
6 REFERENCES Ajzen, I. 1982, On behaving in accordance with one s attitudes. In Consistency in Social Behavior: The Ontario Symposium 2. Eds. M.P. Zanna, E.T. Higgins, and C.P. Herman. Hillsdale, NJ: Erlbaum, Ajzen, I. 1985, From intentions to actions: A theory of planned behavior. In Action-Control: From Cognition to Behavior. Eds. J. Kuhn and J. Beckman. Heidelberg: Springer. Fishbein, M. and I. Ajzen. 1975, Beliefs, Attitudes, Intentions, and Behavior: An Introduction to Theory and Research. Reading, MA: Addison-Wesley. Homer, P. M. and Kahle, L. R. (1988). A structural equation test of the value-attitude-behavior hierarchy. Journal of Personality and Social Psychology, 54, April, Kahle, L. R. (Ed.) (1983). Social Values and Social Change: Adaptation to Life in America. New York: Praeger. Kahle, L. R. (1996). Social values and consumer behavior: Research from the list of values. In C. Seligman, J.M. Olson, and M.P. Zanna (Eds). The Psychology of Values: The Ontario Symposium 8, Kahle, L. R., Beatty, S. E., and Homer, P. M. (1986). Alternative measurement approaches to consumer values: The list of values (LOV) and values and lifestyle (VALS). Journal of Consumer Research 13, December, Kahle, L.R., Poulos, B., and Sukhdial, A. (1988). Changes in social values in the United States during the past decade. Journal of Advertising Research, February/March, Kamakura, W. A. and Novak, T. P. (1992). Value-system segmentation: Exploring the meaning of LOV. Journal of Consumer Research 19, June, Kruger, N. (1993). The impact of prior entrepreneurial exposure on perceptions of new venture feasibility and desirability. Entrepreneurship Theory and Practice, Fall, Robinson, P.B., Stimpson, D.V., Huefner, J.C., and Hunt, H.K. 1991, An attitude approach to the prediction of entrepreneurship. Entrepreneurship Theory and Practice Summer: Rokeach, M. 1973, The Nature of Human Values. New York: Free Press. Rokeach, M. and Ball-Rokeach, S.J. (1989). Stability and change in American value priorities American Psychologist, May, Rosenberg, M.J. and Hovland, C.I. 1960, Cognitive, affective, and behavioral components of attitudes. In M.J. Rosenberg, C.I. Hovland, W.J. McGuire, R.P. Abelson, and J.W. Brehm (Eds). Attitude Organization and Change: An Analysis of Consistency among Attitude Components. New Haven, CT: Yale University. Schwartz, S.H. 1992, Universals in the content and structure of values: Theoretical advances and empirical tests in 20 countries. In M.P. Zanna (Ed.) Advances in Experimental Social Psychology 25:1-65. Orlando, FL: Academic. Shaver, K.G. 1987, Principles of Social Psychology, 3 rd Ed. Cambridge, MA: Winthrop.
7 Figure 1 Model Overview Values Entrepreneurial Intentions Entrepreneurial Attitude
8 Table 1 Respondent Demographics Details Frequency % Gender Male 67 40% Female 99 60% Age 20 years or less 5 4% 21 years to 25 years 80 47% 26 years to 30 years 60 36% 31 years to 40 years 21 13% Highest Education Achieved? Primary School 3 2% Secondary School 16 10% Technical Qualification 11 7% Cert. after High School 36 22% Dip. after High School 60 36% Undergraduate Degree 18 11% Postgraduate Degree 11 7% Other Qualification 11 7% In what area(s) do you have most work or business experience? Food 36 22% Hospitality 6 4% Tourism 3 2% Automotive 8 5% Other % How long have you been unemployed? Less than 1 month 19 11% 1 11 months 23 14% 1 5 years % 6 10 years 18 10% More than 10 years 1 1% Have you ever started your own business previously? Yes 52 31% No %
9 Table 2 Descriptive Statistics, Reliabilities, and Correlations Measure Means (s.d.) Values - Achievement 7.8 (1.5) Values - Empathy 5.8 (2.1).359** Values - Hedonism 5.7 (2.2).499**.686** Achievement-Affect 5. Achievement-Behavior 6. Achievement-Cognition 7. Innovation-Affect 8. Innovation- Behavior 9. Innovation- Cognition 10. Personal Control-Affect 11. Personal Control- Behavior 12. Personal Control- Cognition 13. Self Esteem-Affect 14. Self Esteem- Behavior 15. Self Esteem- Cognition 16. Entrepreneurial Intentions 8.2 (1.2) 7.9 (1.2) 8.3 (1.3) 7.8 (1.1) 5.9 (1.2) 7.3 (1.2) 8.2 (1.7) 7.1 (1.7) 7.6 (1.9) 4.7 (1.8) 6.8 (2.0) 8.3 (1.6) 5.7 (.76) ** **.554** *.721**.690**.616** * *.373**.440**.324**.352** *.223**.484**.563**.456**.561**.403** **.635**.496**.501**.293**.457** **.154*.404**.473**.418**.360**.405**.474**.348** **.504**.495**.458**.274**.358**.495**.361** * -.280** * ** -.222** * **.644**.508**.518**.361**.485**.556**.343**.455** * *.190*.435**.494**.342**.419**.272**.429**.326**.361**.317** -.166* **.89 Reliability coefficients (Cronbach alphas) are on the diagonal in italics * p <0.05; ** p < 0.01
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