Yu-Fen Chen Chihlee Institute of Technology, Banciao, Taiwan, ROC Ming-Chuan Lai Chienkuo Technology University, Taiwan, ROC
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1 SOCIAL BEHAVIOR AND PERSONALITY, 2010, 38(1), 1-12 Society for Personality Research (Inc.) DOI /sbp FACTORS INFLUENCING THE Entrepreneurial Attitude OF TAIWANESE TERTIARY-LEVEL Business Students Yu-Fen Chen Chihlee Institute of Technology, Banciao, Taiwan, ROC Ming-Chuan Lai Chienkuo Technology University, Taiwan, ROC A model of attitude toward entrepreneurship and the factors influencing this were tested with students in the business department at technological colleges and universities in Taiwan. Personality traits were adopted as the independent variable, environmental cognition as the intervening variable, and attitude toward entrepreneurship as the dependent variable. Survey questionnaires (1,085) were distributed to students of which 881 were returned, and 792 of these were valid. The responses were analyzed using stepwise regression and LISREL. Results indicated that student attitude toward entrepreneurship was affected by environmental cognition and personality traits, which indirectly affected attitude toward entrepreneurship. Keywords: attitude toward entrepreneurship, cognition of environment, personality traits. Entrepreneurship as an element of social change is in part evolutionary, and also part revolutionary, so that it is partly beneficial and partly detrimental to the well-being of society (Snyder, 2008). The younger generation of the 21st century is becoming the most entrepreneurial since the Industrial Revolution. An estimated 5.6 million Americans are actively trying to start their own businesses today. They are under the age of 34 and nearly 80% of would-be entrepreneurs are between the ages 18 and 34. These explosive numbers have come with similar increases in the field of entrepreneurship education (Kuratko, 2005). U.S. Small Yu-Fen Chen, PhD, Associate Professor, Department of Accounting and Information, Chihlee Institute of Technology, Taipei, Taiwan, ROC; Ming-Chuan Lai, PhD, Lecturer, Department of Applied Foreign Languages, Chienkuo Technology University, Changhua City, Taiwan, ROC. Appreciation is due to anonymous reviewers. Please address correspondence and reprint requests to: Yu-Fen Chen, Department of Accounting and Information, Chihlee Institute of Technology, 313, Sec. 1, Wunhua Rd., Banciao City, Taipei, Taiwan, ROC. Phone: ext. 1417; bephd@mail.chihlee.edu.tw
2 ENTREPRENEURIAL ATTITUDE Business Administration (2001) found that small businesses represent 99.7% of all employers firms in North America. The situation in the employment market of Taiwan is probably very similar to that of the USA. In Taiwan, colleges and universities offer courses to help students to prepare for the future, especially facing a period of economic downturn. The impact of education has been recognized as one of the crucial factors that help young people to understand and foster an attitude of entrepreneurship (Gorman, Hanlon, & King, 1997; Kourilsky & Walstad, 1998). Although this field of study has become increasing popular, most entrepreneurial education is limited to entrepreneurship courses (Shay & Terjensen, 2005). Attitudes about, and knowledge of, entrepreneurship are likely to shape students inclination to start their own business in the future (Wang & Wong, 2004). Therefore, it is important to understand how to develop and nurture potential entrepreneurs while they are still students in school. After reviewing past literature to construct the research framework, a sample of technological college and university students in Taiwan were surveyed to examine their attitudes toward entrepreneurship and the main factors affecting these attitudes. Various personality traits, cognitions, and social conditions affect an individual s choice to pursue entrepreneurial activities (Carter, Gartner, Shaver, & Gatewood, 2003). In this article we have focused on a specific set of environmental cognitions and personality traits, and examined the reasons given by students for their entrepreneurial attitudes. Attitude toward entrepreneurship Entrepreneurship is a part of the company management processes in which the focus is on investment into new ventures, creating a new venture, building new organization departments, and supplying new products and services. Entrepreneurial attitude can be described according to the following four statements (Carter et al., 2003): 1. Attitude is an individual s viewpoint about a specific thing and environment. It is a person s inclination toward persistence and consistency. In addition, this inclination can be inferred from the individual s behavior. However, the intention in an attitude is not discerned only through behavior. Attitude encompasses general knowledge and comprises the cognitive, emotions, and actions. 2. The attitude must have a target. The target of an attitude is a concrete person or thing and can also be an abstract idea or thought. 3. Attitude is analogous to inclination. When people hold a positive attitude toward a given target, they will hold the same positive attitude towards a similar target. 4. The person s cultural traditions, family environment, and educational environment are the environmental factors that affect the formation of attitude. In general, an attitude is a collection of personal traits that can be learned.
3 ENTREPRENEURIAL ATTITUDE In summary, attitude is a mentally prepared state for any known subject. It is a subjective consciousness that is affected by the environment. The attitude is a kind of lasting inclination. It can be an idiosyncrasy that could be shaped or changed via experience or study. Attitude toward entrepreneurship is an individual s concept about entrepreneurship, assessment, and inclination towards entrepreneurial behavior or self-employment. If the individual has a strong inclination to start a new venture, the relationship between attitude and behavior will be strong. Therefore, this individual has a strong inclination towards entrepreneurship. Factors influencing attitude toward entrepreneurship There are several reasons that entrepreneurs start enterprises: First, they would like to take a chance on, or challenge, the market. Secondly, they believe their managerial skills are better than those of other people. Thirdly, they believe that their specialty could be developed into an enterprise. Fourthly, they have already developed a product or service and believe there is a niche in the market. Fifth, this is the only way to start an enterprise and their other options are limited. Sixth, they are influenced by family, friends, or family tradition (Greenberger & Sexton, 1988). Carter, Gartner, Shaver, and Gatewood (2003) identified the main reasons that individuals have an inclination to start an enterprise as self-realization, financial success, perception of their own likely success in the role of a successful entrepreneur whom they choose to imitate, innovation, recognition, and independence. Gender, family experience with business, and educational level were found to be significant factors in entrepreneurial interests by Wang and Wong (2004) when they investigated the determinants of interest in entrepreneurship among university students in Singapore. Wei and Ismail (2008) found that personality traits were essential factors in discussing entrepreneurship issues, especially in studying smaller firms. To sum up, according to the findings of previous studies, the factors that influence entrepreneurs to start an enterprise are divided into two classes; the first involves the entrepreneur s own personal factors, including personality traits and conditions, while the second class involves external factors such as family, friends, and the external environment. Personality traits determine a person s words, deeds, and role in life. Moreover, individual actions and thinking are derived from personality traits (Zhao, 1989). Costa and McCrae (1992) found that personality traits determine the individual s degree of inclination towards and are a model of consistency in determining thought, emotion, and action. They found that personality traits are different in kind and degree for all persons. In other words, the kind of personality trait is not the only variable factor, but the degree to which each trait is individually manifested is also different.
4 ENTREPRENEURIAL ATTITUDE In 1946, Cattell used emerging computer technology to examine a hypothesis about personality traits, that individuals describe themselves and each other according to 16 different independent factors. With these 16 factors as a basis Cattell went on to construct the 16PF Personality Questionnaire, which is still used by universities and businesses for personnel selection. In 1963 Norman replicated Cattell s work and suggested that five factors would be sufficient (Big Five personality traits (2006)). The Big Five are five broad factors or personal trait dimensions: agreeableness, conscientiousness, extraversion, neuroticism, and openness to experience; which were identified through empirical research (Goldberg, 1993) and are, therefore, suitable for measuring individual personality traits. In past studies of personality traits and entrepreneurship researchers have identified entrepreneurial personality traits as the key component in creating a venture. The need for achievement, locus of control, risk-taking propensity, Type-A behavior, and tolerance for ambiguity are the kinds of personality traits necessary to entrepreneurs. As outlined by Carter et al. (2003), innovation, independence, self-realization, financial success, roles, and recognition were found to be the major reasons an entrepreneur chooses to start an enterprise. Littunen (2000) found that today there are more individuals than ever before with potential for entrepreneurship. The entrepreneur possesses some personality traits that makes him or her more likely than others to start an enterprise. For this reason, understanding the individual s personality traits could help us to identify the potential characteristics required for entrepreneurship. In this study the focus was on the individual s personality traits and environmental cognition, as the important variables that influence the attitudes of college and university students toward entrepreneurship in Taiwan. Table 1 is a comparative list of the Big Five dimensions of personality and entrepreneurial traits. According to the comparison, the Big Five characteristics are similar to the traits for an entrepreneur. Therefore, adopting the Big Five personality dimensions to compare with entrepreneurial personality traits is useful in examining entrepreneurial characteristics. The environment is a comprehensive factor in influencing entrepreneurs to start an enterprise and the individual s attitude toward entrepreneurship. This includes economic, social, cultural, and policy factors. The environment affects individual entrepreneurial will and ability (Gnyawali & Fogel, 1994). The entrepreneurial environment includes all of the training and advisory services, including government organizations, available to any person who creates a new business.
5 ENTREPRENEURIAL ATTITUDE Table 1 Comparison of Big Five Personality and Entrepreneur Traits Big Five type Characteristic(s) The entrepreneur trait dimensions of personality Agreeableness friendly, generous, helpful, Type-A behavior, paying decent, trustworthy attention to human relationships Conscientiousness control, regulate, acting spontaneously Goal-direction, responsibility Extraversion enjoy being with people, full of energy, Willingness to work hard positive emotions, action-oriented, knowing their strengths and enthusiastic weaknesses, seeking opportunities, not settling for second best, getting help when needed Neuroticism tendency to experience negative feeling Locus of control, risk-taking such as anxiety, anger or depression Openness to experience imaginative, creative, uninhibited, Innovation, independence more aware of art Table 2 Influential Factors in the Entrepreneurial Environment Study Influential factors in the entrepreneurial environmental Scott & Twomey (1988) 1. Predisposing factor: roles of parents. 2. Triggering factors: seeking jobs, unemployment and awareness of state of job market. 3. Innovative ideas. Bird (1988) Xu (1990) 1. Society, policy and economic changes. 2. Changes of the market. 3. Limitations (or regulation) abatement. 1. Microeconomic environment. 2. The social and political environment. Method Based on the results of the literature review, the main research hypothesis of the present study was that attitudes toward entrepreneurship (dependent variable) will be affected by personality traits (independent variable), and environmental cognition accounts for the intervening variable in the relationship between personality traits and attitudes toward entrepreneurship.
6 ENTREPRENEURIAL ATTITUDE Sample Questionnaires were distributed to 1,085 undergraduates in the business departments of technological colleges and universities in Taiwan during June A total of 881 completed questionnaires were returned, of which 792 were valid, representing a 73% response rate. Instrument The survey instrument was based on an academic review of the entrepreneurship studies. The methods used to derive and measure the variables are described below. Personality traits Personality traits were the independent variables. The personality traits scale was revised from the NEO-PI (Costa & McCrae, 1992). The personality traits scale was a paper and pencil measure based on a five-factor personality model including: (1) Human relationships; (2) Goal direction; (3) Need for achievement; (4) Locus of control; and (5) Creative thinking. Environmental cognition In this study, environmental cognition was used as both the independent variable and intervening variable. According to Bird (1988) influential factors upon action in starting an enterprise involve the social and political environment. Environmental cognition in this study was divided into the following four factors: (1) Family environment; (2) Educational environment; (3) Social environment; and (4) Economic environment. Attitude toward entrepreneurship Attitude toward entrepreneurship was the dependent variable in this study, measured according to the method proposed by Rosenberg and Hovland (1960). Attitude was divided into: (1) Cognition; (2) Emotion; (3) Motivation; (4) Behavioral intention. Procedure Participants were asked to respond to each item in the questionnaire on a 5- point scale ranging from 1 (strongly disagree) to 5 (strongly agree). We followed a two-step procedure using SPSS software to assess validity and reliability. An exploratory analysis was conducted to assess the underlying factor structure of the scale items. To do this, we removed items with factor loading less than.30. Remaining items were examined further by factor analysis, and results revealed all remaining factors had eigenvalues greater than 1.0. In the next step Cronbach s α was used to assess the reliability of the scale items (see Table 3). The personality traits were listed as 19 items, divided into five dimensions; environmental cognition consisted of 14 items, divided into four dimensions; and the attitude toward entrepreneurship consisted of 21 items, divided into four dimensions.
7 ENTREPRENEURIAL ATTITUDE Domain Table 3 Reliabilities of Domains of Instrument Cronbach s α Personality traits (total reliability Cronbach s α =.83) Human relationships.77 Goal direction.80 Need for achievement.73 Locus of control.58 Creative thinking.64 Environmental cognition (total reliability Cronbach s α =.85) Family environment.70 Education environment.82 Social environment.76 Economic environment.74 Attitude toward entrepreneurship (total reliability Cronbach s α =.94) Cognition.82 Emotion.88 Motivation.87 Behavior intention.89 Results The main techniques adopted for analysis were regression and structural equation modeling (SEM). Regression analysis was conducted to test the efficiency among the three variables and to estimate whether or not the environmental cognition and personality traits were predictors of attitude toward entrepreneurship. SEM was used to test the research model. The SEM is a general method for determining if the theoretical models fit the empirical data and was conducted to identify the relationship and influence among attitude toward entrepreneurship, environmental cognition, and personality traits. As shown in Table 4, the dependent variable in the regression analysis was the attitude toward entrepreneurship and the independent variables were environmental cognition and personality traits. It was found that environmental cognition and personality traits were significant predictors of attitude toward entrepreneurship and environmental cognition was an important predictor of attitude toward entrepreneurship. Based on adjusted R 2, environmental cognition could explain the attitude toward entrepreneurship better than could personality traits. The parameter estimates (based on the β value) showed that environmental cognition and personality traits were positively and significantly related to attitude toward entrepreneurship.
8 ENTREPRENEURIAL ATTITUDE Table 4 Regression Analysis on Attitude Toward Entrepreneurship Dependent variable Attitude toward entrepreneurship β SE R 2 Adjusted R 2 Independent variable Environmental cognition.552 *** **.304 * Environmental cognition personality traits.465 *** *** **.350 * * p <.05 (one-tailed test); ** p <.01 (one-tailed test); *** p <.001 (one-tailed test) 0.78 Family environment Human relationships Goal direction Need for achievement Locus of control Creative thinking Figure 1. Structural Equation Model Personality traits 0.13 Environmental cognition 0.60 Attitude toward entrepreneurship Education environment Social environment Economic environment Cognition Emotion Motivation Behavioral intention The structural equation model is illustrated in Figure 1 and results of the SEM analysis are shown in Table 5. The figure described the model and the table show its parameters. The SEM analysis was conducted using the LISREL program, based on the covariance matrix generated from this sample. All of the relationships entered into the model were significant, according to a maximum
9 ENTREPRENEURIAL ATTITUDE likelihood discrepancy function. This model was found to fit the data, χ 2 (n = 300) = , GFI = 0.89, RMSEA =.088, NFI = 0.92, RFI = 0.89, CFI = 0.94, and all parameters were found to be significant (p <.05). In contrast to the critical index values, the greater part of indices were fit for critical standards. The means of the result from the empirical data fit our research model. Both the relationship and the influence effects among the attitude of entrepreneurship, environmental cognition, and personality traits proposed in our research hypothesis were supported by the statistical results. Table 6 shows that personality traits did not directly or significantly affect the attitude toward entrepreneurship (γ = 0.13, t = 1.87, p >.05), but personality traits could affect environmental cognition directly and significantly (γ = 0.47, t = 4.99, p <.05). In addition, environmental cognition could directly affect the attitude toward entrepreneurship, and the coefficient was 0.60 (γ =.60, t = 5.7, p <.05). Fit indicators Indices Table 5 Structural Equation Model Analysis Critical index N = 300, df = < N < 500 χ 2 (chi-square) = p <.05 GFI = 0.89 > 0.9 RMSEA =.088 < 0.1 NFI = 0.92 > 0.9 RFI = 0.89 > 0.9 CFI = 0.94 > 0.9 Table 6 Influence Among the Variables Variables Direct/indirect effect Personality traits Attitude toward entrepreneurship Attitude toward Efficient value 0.13/0.28 entrepreneurship SE 0.07/0.06 t value 1.87/4.73 Total effect Efficient value 0.41 * SE 0.07 t value 5.47 Environmental cognition Efficient value 0.47 * 0.60 SE t value
10 10 ENTREPRENEURIAL ATTITUDE Results showed that only personality traits have indirect effects in this research model. They could affect the attitude toward entrepreneurship through environmental cognition. The indirect influence value was 0.28 ( ). According to the above research results personality traits were factors directly influential on the attitude toward entrepreneurship and environmental cognition. Environmental cognition was a factor having a direct influence on the attitude toward entrepreneurship and personality traits had an indirect influence on the attitude toward entrepreneurship ( = 0.41). Conclusion and Implications In this study the model of the influential factors on the attitude toward entrepreneurship was tested and was found to fit the data. It was also found that personality traits and environmental cognition were the important factors in entrepreneurship. In previous studies, researchers such as Carter et al. (2003) and Wang and Wong (2004) called for studies on entrepreneurs and students with similar factors that affected their entrepreneurial interest and actions. Although there are some differences in the results of the current study from those of previous research on personality traits, the results of this research were confirmed by those of Gnyawali and Fogel (1994), and could also be explained by Bandura s social learning theory. Bandura explains human behavior in terms of a continuous reciprocal interaction between cognitive, behavioral, and environmental determinants. Accordingly, environmental cognition could affect the individual attitude toward entrepreneurship. Personality traits could affect the attitude toward entrepreneurship through environmental cognition. In this study we found that the need for achievement, locus of control, and creative thinking were the most important characteristics for entrepreneurship. The family, society, education, and economic environment were also found to be important factors. Attitude toward entrepreneurship of students at technological colleges and universities could be enhanced through entrepreneurship education delivered by supplying entrepreneurial knowledge to students, promoting more entrepreneurial activities and fostering entrepreneurial personality traits. These objectives could be achieved by encouraging students to enter entrepreneurial competitions and join workshops on entrepreneurship. Students could, thus, get more information via the various programs or projects in school and work towards achievement and innovation. Government departments, enterprises, communities, and social organizations are suitable organizations where students may complete this kind of assignment. Relevant lectures and classes should be held to help students understand policies, resources, and the entrepreneurial environment and they should be
11 ENTREPRENEURIAL ATTITUDE 11 taught to analyze the direction and chances for entrepreneurship. This could increase student confidence about entrepreneurship. A positive employment attitude should be fostered in students in order to improve their environmental cognition and establish a foundation for entrepreneurship in the future. In this research, it was found that undergraduates attitude toward entrepreneurship is affected by the environment. If students have a more positive attitude about employment they will know about the occupations that are more important (key) than others in providing an insight into how to be entrepreneurial. Schools should require students to be responsible, conscientious, pay attention to learning achievement, and attend entrepreneurial oriented activities. When students possess a good attitude about employment, this will also improve their attitude toward entrepreneurship. The major limitation of the current study is that the results may be more applicable to the specific context of Taiwan where the research was conducted. However, only a small number of previous studies related to entrepreneurship or entrepreneurial education in Taiwan could be found. The number of people unable to find employment is increasing continuously throughout the world. It is still essential to discuss the topic of entrepreneurship because more and more people want to operate their own business and become entrepreneurs in the current economic recession. References Bandura, A. (1977). Social learning theory. NJ: Prentice-Hall. Big Five personality traits. (2006). Retrieved October 4, 2006, from Big_five_personality_traits Bird, B. (1988). Implementing entrepreneurial ideas: The case for intention. Academy of Management Review, 13(3), Carter, N. M., Gartner, W. B., Shaver K. G., & Gatewood E. J. (2003). The career reasons of nascent entrepreneurs. Journal of Business Venturing, 18(1), Cattell, R. B. (1946). Description and measurement of personality. Yonkers on Hudson, N.Y. World Book. Costa, P. T. Jr., & McCrae, R. R. (1992). Four ways five factors are basic. Personality and Individual Differences, 13, Gnyawali, D. R., & Fogel, D. (1994). Environments for entrepreneurship development: Key dimension and research implications. Entrepreneurship: Theory and Practice, 18(4), Goldberg, L. R. (1993). An alternative description of personality: The Big Five factor structure. Journal of Personality and Social Psychology, 59, Gorman, G., Hanlon, D., & King, W. (1997). Some research perspectives on entrepreneurship education, enterprise education and education for small business management: A ten-year literature review. International Small Business Journal, 15(3), Greenberger, D. B., & Sexton. D. L. (1988). An interactive model of new venture initiation. Journal of Small Business Management, 26(3), 1-7.
12 12 ENTREPRENEURIAL ATTITUDE Kourilsky, M. L., & Walstad, W. B. (1998). Entrepreneurship and female youth: Knowledge, attitude, gender differences, and educational practices. Journal of Business Venturing, 13(1), Kuratko, D. F. (2005). The emergence of entrepreneurship education: Development, trends, and challenges. Entrepreneurship Theory and Practice, 35, Littunen, H. (2000). Entrepreneurship and characteristics of the entrepreneurial personality. International Journal of Entrepreneurial Behavior and Research, 6(6), Norman, W. T. (1963). Toward an adequate taxonomy of personality attributes: Replicated factor structure in peer nomination personality ratings. The Journal of Abnormal and Social Psychology, 66(6), Rosenberg, C. I., & Hovland, M. C. (1960). In K. K. Hsu (1996, Ed.), Social psychology. Taipei: Wunan Publishing Co., Ltd. Scott, M., & Twomey, D. (1988). The long-term supply of entrepreneurs: Students career aspirations in relation to entrepreneurship. Journal of Small Business Management, 26(4), Shay, J., & Terjensen, S. (2005). Entrepreneurial aspirations and intentions of business students: A gendered perspective. Paper presented at the Babson Entrepreneurship Conference, Boston, MA. Snyder, L. W. (2008). Entrepreneurship as a social change. New England Journal of Entrepreneurship, 11(2), U.S. Small Business Administration. (2001). Quarterly indicators: The economy and small business. Retrieved August 5, 2005, from: Wang, C. K., & Wong, P. K. (2004). Entrepreneurial interest of university students in Singapore. Technovation, 24(2), Wei, O. J., & Ismail, H. B. (2008). Revisiting personality traits in entrepreneurship study from resource-based perspective. Business Renaissance Quarterly, 3(1), Ye, K. S., & Hu, G. C. (1994). Enhancing on-job practices for business management students. In C. Y. Liu (Ed.), The analysis of management education problems in Taiwan and China. Kaohsiung: Fuwen Publishing Co., Ltd. Zhao, Y. (1989). Personality. Taipei: Sanmin Publishing Co., Ltd.
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