A Study on the Influence of Emotional Intelligence on Entrepreneurship Intention

Volume 119 No. 12 2018, 14839-14851 ISSN: 1314-3395 (on-line version) url: http://www.ijpam.eu ijpam.eu A Study on the Influence of Emotional Intelligence on Entrepreneurship Intention 1 R.V. Archana and 2 K. Vasanthi Kumari 1 School of Management Studies, Vels Institute of Science Technology and Advanced studies, Chennai. 2 Government Thirumagal Mills College, Gudiyattam, Vellore District. Abstract The awareness toward importance of promoting entrepreneurship to the younger generation has tremendously increased in the recent years. Entrepreneurship is promoted by government as well as academic people as a means to promote employment and economic development. Several universities in India has started introducing entrepreneurship education in the curriculum for their students. However several factors are known to be responsible in the determination of individual s decision making process to tart his/her own venture. The study of factors influencing the individual s decision to opt for entrepreneurship has assumed significant importance. The aim of this empirical work is exploring the influence of non-rational factors like emotional intelligence on the entrepreneurship intention among students studying post graduate course in business management in selected colleges in Chennai, Tamil Nadu. The study used descriptive research method and a survey instrument was used to collect data from the student respondents. The results of the study indicate that majority of the dimensions of emotional intelligence have positively affect the entrepreneurial intention. The overall emotional intelligence level of the students has strong impact on the entrepreneurial intention. 14839

1. Introduction In the last decade emotional intelligence has been recognized as an important paradigm for managing the social relations and balancing mental and physical well-being of individuals (Mayer, Roberts, &Barsade, 2008). The research interest in emotional intelligence has been growing tremendously (Bar- On,2006). Emotional intelligence has been found as the strong predictor of job satisfaction andjob performance (O Boyle, Humphrey, Pollack, Hawver, & Story,2011). The published studies that have attempted to explore the link between the emotional intelligence and entrepreneurial acumen has been very limited (Ahmetoglu, Leutner, & Chamorro-Premuzic, 2011). In this context, the aim of the present study is to analyze the relationships between the dimensions of emotional intelligence like Self-Awareness (SAW), Empathy (EMP), Self-Motivation (SM), Emotional Stability (ES), Managing Relation (MR), Integrity (INTG), Self-Development (SD), Value Orientation (VO), Commitment (COMM) and Altruistic Behavior (AB)and entrepreneurial intention. Emotional Intelligence The concept of emotional intelligence (EI) was introduced by Salovey and Mayer, in 1990, and popularized by Goleman (1995). The most commonly used definition of emotional intelligence was given by Salovey and Mayer (1990) by defining emotional intelligence as atype of social and personal intelligence involving the ability tomonitor one s own and others feelings and emotions, to discriminate among them and to use this information to guide one s thinking and actions (Salovey&Mayer, 1990). Mayer and Salovey (1997) refined the original definition and included four interrelated dimensions namely perception, appraisal, and expression of emotions; emotion facilitation of thinking; understanding and analyzing emotional information, employing emotional knowledge and regulation of emotions. Entrepreneurship Chell (2007) defined entrepreneurship as the process of recognizing and pursuing opportunities with regard to alienable and inalienable resources currently controlled with a view to value creation (p. 18).Entrepreneurship has been recognized as the major source of generating employment, promotes economic growth and innovation, promotes quality products and service, and offers economic flexibility in today s society (Hisrich, Langan-Fox, & Grant, 2007). Emotional Intelligence and Entrepreneurship In the management literature, researchers have long explored the antecedents of entrepreneurial behavior and entrepreneurial potential. However, there has been 14840

very little work on the role of emotional intelligence and its dimensions on the entrepreneurial intention and behavior of people. Based on the review of literature, the following hypotheses are proposed. H1: A positive relationship exists between the dimensions of emotional intelligence and entrepreneurial intention of students of business studies. H2: A positive relationship exists between overall emotional intelligence and entrepreneurial intention of students of business studies. 2. Theoretical Framework The theoretical framework that governs the study is shown in Figure 1. Entrepreneurial intention has been used as the dependent variable, since intention is considered the single best predictor of behavior (Ajzen 1991).The scale developed and standardized by Liñán and Chen(2009) is used in this study to measure the entrepreneurial intention. The scale included six items which measures six dimensions of entrepreneurial intention viz. commitment, attitude, risk-taking, facility, desirability and motivation. The response options for measuring the scale includes strongly disagree, disagree, neutral, agree and strongly agree. Emotional intelligence scale developed by Hyde, Pethe and Dhar(2002) is used in this study. This scale followed Goleman s model of emotional intelligence and includes total 34 items with response options of strongly disagree, disagree, neutral, agree and strongly agree. It measures ten components of emotional intelligence: self-awareness, empathy, self-motivation, emotional stability, managing relations, integrity, self-development, value orientation, commitment and altruistic behavior. Self-Awareness Empathy Self-Motivation Emotional Stability Managing Relation Integrity Self-Development Value Orientation Altruistic Behavior Emotional Intelligence Entrepreneurship Intention Commitment Attitude Risk-taking Feasibility Desirability Motivation Figure 1: Theoretical Framework 14841

3. Related Works Salvador (2008) demonstrated that the main dimensions of emotional intelligence have a positive and significant relationship with entrepreneurial self-efficacy, which is a key antecedent of entrepreneurial intention (Lee et al., 2011; Pihie and Akmaliah, 2009).Zampetakis et al(2009b) have found that individuals with high emotional intelligence have a good awareness of their emotional self-efficacy and possesses lower level of risk aversion (Foo, 2011). Emotional characteristics can help individuals to persist in their intention to work toward attaining an objective even when unforeseen problems arise, these are often considered as important attitudes for start-up of a company, given the levels of risk that business activities demand (Zampetakis et al 2009).Mortan et al (2014) believed that people with high emotional intelligence have strong belief in their entrepreneurial skills and recognize themselves as individual with better opportunities to embark onthe entrepreneurial activities, as they acclimate better with the environment and their work conditions in a better manner under stressful situations and adapt to changes in an effective manner. Zampetakis et al(2009) affirmed that individual with high emotional efficacy show higher level of tolerance toward stress handling capacity and possess greater disposition to proactivity which in turn facilitates entrepreneurial behavior. Rhee and White (2007) affirm that successful entrepreneurs are often individuals with high level of emotional intelligence. Skudiene et al. (2011) affirmed that emotional intelligence is the one of top ten key capacities important for the next generation of entrepreneurial managers. They also stated that entrepreneur with greater emotional intelligence can easily anticipates and avoids emotional ruptures, handle conflicts effectively and weigh emotional information in making the best decisions, to create a positive work environment and a high morale in the team (Skudiene et al., 2011 ). 4. Methodology The present study is based on the descriptive quantitative survey design. The target population for the study consisted of is the students of post graduate course in management studies in Chennai. The data for the study was collected from the sample of selected students using a self-designed and self-administered questionnaire. The variables of the study were identified from the literature. The study adopted a mix of Non-probability based convenient sampling and snowball sampling technique for collecting data from the student respondents. In total, around 250 respondents have participated in the study. The researcher contacted the respondents individually and purpose of the study was explained clearly. The concurrence of the respondents were taken and agreement of the respondents were sought to take part in the study. 14842

Prior to data collection, an in-depth review of literature was conducted to identify variables that shape the current study. The variables, background concepts and theory helped in developing a theoretical framework which served as an important tool for the development of questionnaire in the study. The review in addition, provides the basis for discussions and support for many views that were presented in the study. It also, adds weight to the conclusions drawn, and recommendations made. The dependent variable in the study is entrepreneurship intention of the students. The independent variable of the study included emotional intelligence and the demographic variables are gender, age, family background. The questionnaire was organized into three sections. The first section measures the demographic variables, the second section measured the emotional intelligence of the participants and the final section measure the entrepreneurship intention of the participants of the study. The data obtained from the survey were analyzed using various statistical analysis techniques and the statistical analysis tool namely SPSS 21.0 was used. The statistical analyses like descriptive statistics like frequencies, percentages, mean, standard deviation were calculated and inferential statistical procedures like t-test, one way ANOVA, correlation and regression analysis was performed with SPSS. 5. Results and Discussion 5.1 The demographics of the sample The results of the analysis on demographic variables of the respondents of the study are presented in Table 1. A total of 188(62.7%) respondents are male and 112(37.3%) of respondents are females. The data on the nature of employment of the parents of respondents was also collected. The results shows that the majority of fathers of the respondents were employed in private sector (44.7%) followed by those who are employed in the public sector (34.3%) and only 21% of fathers of the respondents are selfemployed. Majority of mothers of respondents (46.7%) are employed in private concerns and 45% of mothers are employed in public sector concerns. Only, 8.3% of mothers of the respondents are self-employed. It is interesting to find 181(60.3%) of respondents have Urban background and 119 (39.7%) are coming from the rural background. Majority of the respondents of the study belong to family of small size with 192 (64%) and 108 (36%)of the respondents come from large size family. It is shown in the data that 122(40.7%) respondents have family income above Rs. 40000 per month, followed by respondents with family income Rs. 30000 Rs. 40000 who constituted 84 (28%). Only 8.3% of respondents have stated that their family income is less than Rs. 10000 per month. 14843

When respondents were asked of the sectors they will like to work in after graduation, majority (47.1%) said they will like to work in the public sector, followed by private sector (30.1%),with 19.9% willing to work as selfemployed. On the personality type of respondent, most (39%)belong to the openness personality group. The results are shown in the Table 1. Table 1: Demographic Characteristics S.No. Variable Frequency Percentage Gender 1. Male 188 62.7 Female 112 37.3 Total 300 100 Nature of Work - Father Private 134 44.7 2. Public 103 34.3 Self-Employed 63 21.0 Total 300 100 Nature of Work - Mother Private 140 46.7 3. Public 135 45.0 Self-Employed 25 8.3 Total 300 100 Location 4. Rural 119 39.7 Urban 181 60.3 Total 300 100 Family Size 5. Small 192 64.0 Large 108 36.0 Total 300 100 Family Income LessThan10000 25 8.3 10000-20000 34 11.3 6. 20000-30000 35 11.7 30000-40000 84 28.0 Above 40000 122 40.7 Total 300 100.0 5.2 Descriptive Statistics The descriptive statistics of the constructs of emotional intelligence scale and overall scale items in the entrepreneurial intention scale are shown in Table 2. The table shows the total number of items used to measure each of the variable, minimum and maximum values, mean and standard deviation and reliability coefficient using Cronbach's Alpha. It is clear that the reliability coefficient of the constructs and scale values are higher than the minimum cut-off value of 0.6 (Nunnally et al. 1967), hence the scale is reliable for statistical measurements and analyses. 14844

Table 2: Reliability Test using Cronbach'sAlpha S. No. No. of Variable Min. Max. MeanStd. Cronbach s Alpha Items Deviation 1 Self-Awareness (SAW) 4 1.00 5.00 3.54 1.23.783 2 Empathy (EMP) 5 1.00 5.00 3.18.70.803 3 Self-Motivation (SM) 6 1.33 4.83 3.45.74.824 4 Emotional Stability (ES) 4 1.00 5.00 3.71.88.779 5 Managing Relation (MR) 4 1.00 5.00 3.69 1.22.788 6 Integrity (INTG) 3 1.00 5.00 3.28.85.793 7 Self-Development (SD) 2 2.00 5.00 3.71.95.742 8 Value Orientation (VO) 2 1.00 5.00 3.63 1.27.753 9 Commitment (COMM) 2 1.00 5.00 3.47.94.766 10 Altruistic Behavior (AB) 2 1.00 5.00 2.76.94.791 11 Emotional Intelligence Scale 34 2.50 4.29 3.45.34.782 12 Entrepreneurship Intention (EI)6 1.67 5.00 3.82.67.807 5.3 Correlation Analysis Pearson bivariate correlation analysis was conducted to study the association between the predictor and outcome variables. It can be seen from the Table 3 that there is a significant correlation between the variables of the study namely Emotional Intelligence and Entrepreneurship Intention. The level of significance was 0.01 level. Variable Emotional Intelligence Scale Entrepreneurship Intention Table 3: Correlations Emotional Entrepreneurship Intelligence Intention Scale 1.325 **.325 ** 1 **. Correlation is significant at the 0.01 level (2-tailed). 5.4 Regression Analysis 5.4.1 Linear Regression between the constructs of emotional intelligence and entrepreneurial intention Multiple linear regression analysis was conducted to test the relationship between the dependent variable (Entrepreneurial Intention) and constructs of the predictor variable (Emotional Intelligence) like Altruistic Behavior, Integrity, Managing Relation, Emotional Stability, Self-Awareness, Commitment, Value Orientation, Self-Development, Empathy and Self-Motivation. The variable entry method chosen was Enter. The regression results show that the predictor variables accounted for 18.1% of variance in the dependent variable - Entrepreneurial Intention. The change in R 2 was 0.181 and it was highly significant (p<0.000). 14845

Table 4: Model Summary Std. Error Change Statistics R Adjusted R R of the R Square F Square Square Estimate Change Change df1 df2 Sig. F Change.425.181.152.62528.181 6.370 10 289.000 Predictors: (Constant), Altruistic Behavior, Integrity, Managing Relation, Emotional Stability, Self-Awareness, Commitment, Value Orientation, Self- Development, Empathy, Self-Motivation Table 5shows the results on ANOVA, which assesses the overall significance of the model. As the reported p < 0.05 is highly significant and the model is valid. Thus, it is clear that the model suggested by the study i.e. constructs of the Emotional Intelligence impacts the Entrepreneurship Intention has been validated. Table 5: ANOVA Model Sum of Mean Squares df Square F Sig. Regressio 24.903 10 2.490 n 6.370.000 Residual 112.990 289.391 Total 137.893 299 a. Predictors: (Constant), Altruistic Behavior, Integrity, Managing Relation, Emotional Stability, Self-Awareness, Commitment, Value Orientation, Self- Development, Empathy, Self-Motivation b. Dependent Variable: Entrepreneurship Intention The Standardized β Coefficients give a measure of the contribution of predictor variable on the model.the value of β as shown in Table 6 indicates that Value Orientation (β =.189) has higher impact on Entrepreneurial Intention followed by Self-Motivation (β =.141) and Emotional Stability (β =.139). The t and Significance (p) values give the strength of impact of the predictor variable on the outcome variable. A big absolute t value and small p value suggests that a predictor variable is having a great impact on the criterion variable. The values obtained in this study indicate that majority of the constructs of the Emotional Intelligence has a significant impact on Entrepreneurial Intention. The values of the analysis show that Value orientation (t-value = 3.321) has a larger impact on entrepreneurial intention when compared with other constructs like Emotional Stability (t-value = 2.456), Managing Relation (t-value = 2.383) and Self-Motivation (t-value = 2.299) and Self-Awareness (t-value = 2.161). In addition, the p-value for the constructs like Empathy,Integrity, Self- 14846

Development, Commitment and Altruistic Behavior are not significant (p>0.05). Model Table 6: Coefficients Unstandardiz Standardize ed d Coefficients Coefficients t B Std. Error Beta Sig. (Constant) 1.251.367 3.407.001 Self-Motivation.128.056.141 2.299.022* Self-Awareness.072.033.127 2.161.032* Emotional.112.046.139 2.456.015* Stability Empathy.084.058.087 1.438.152 Managing.072.030.130 2.383.018* Relation Integrity.081.047.102 1.727.085 Self-.071.042.099 1.684.093 Development Value Orientation.100.030.189 3.321.001** Commitment.023.043.032.538.591 Altruistic Behavior.036.039.050.934.351 a. Dependent Variable: Entrepreneurship Intention 5.4.2. Linear regression analysis between the emotional intelligence and entrepreneurial intention Linear regression analysis was conducted to test the relationship between the dependent variable (Entrepreneurial Intention) and predictor variable (Emotional Intelligence) of the study. The variable entry method chosen was Enter. The regression results shows that the predictor variable - Emotional Intelligence accounted for 10.2% of variance in the dependent variable - Entrepreneurial Intention. The change in R 2 was 0.105 and it was highly significant (p<0.000). R R Square Table 7Model Summary Change Statistics Std. Error Adjusted R R Sig. F of the F Square Square Estimate Change df1 df2 Chang Change e.325.105.102.64339.105 35.112 1 298.000 a. Predictors: (Constant), Emotional Intelligence Scale Table 8 shows the results on ANOVA, which assesses the overall significance of the model. As the reported p < 0.05 is highly significant and the model is 14847

valid. Thus, it is clear that the model suggested by the study i.e. Emotional Intelligence impacts the Entrepreneurship Intention has been validated. Table 8: ANOVA Model Sum of Mean Squares df Square F Sig. Regressio 14.535 1 14.535 n 35.112.000 Residual 123.358 298.414 Total 137.893 299 a. Predictors: (Constant), Emotional Intelligence Scale b. Dependent Variable: Entrepreneurship Intention The Standardized β Coefficients give a measure of the contribution of predictor variable on the model.the valueof β as shown in Table 9 indicates that Emotional Intelligence (β =.325) has higher impact on Entrepreneurial Intention. The t and Significance (p) values give the strength of impact of the predictor variable on the outcome variable. A big absolute t value and small p value suggests that a predictor variable is having a great impact on the criterion variable. The values obtained in this study indicate that Emotional Intelligence has a larger impact on Entrepreneurial Intention as the t-value obtained is 5.926 and the relationship is significant (p<0.01). Table 9: Coefficients Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta (Constant) 1.641.370 4.434.000 Emotional Intelligence Scale.632.107.325 5.926.000 a. Dependent Variable: Entrepreneurship Intention 6. Conclusions This work explores the influence of emotional intelligence on the entrepreneurial intention of business students. The results of the empirical analysis clearly show that emotional intelligence of the students has significant impact on their entrepreneurial intention. However, the study could not find significant difference among the categories of demographic variables on the study variables like emotional intelligence and entrepreneurial intention. Emotional intelligence abilities are shown as important predictor affecting the perceptions of being an effective entrepreneur. The individuals with dimensions of emotional intelligence shape in as well as the intention of undertaking an entrepreneurial path. It may also have relevant implications for those 14848

individuals that in today s environment, pushed by the impermeability of the labor market, choose to create new work by setting up a new business. Moreover, ESE could be used to promote entrepreneurial actions in those individuals that belief they do not have the necessary skills to undertake this path without trying or testing their skills. 7. Limitations and Future Research The main limitation of the study is related with the scope of empirical research which is limited to smaller region namely Chennai only. The focus of the study has been the post graduate management students only. Hence, the future research may include students from different courses and varied background. The study can be extended to include larger sample size and longitudinal studies may be conducted to ascertain the validity of the study. References [1] Salvador, CM (2008). Impact of perceived emotional intelligence on entrepreneurial self-efficacy. Psychology Bulletin, 92, 65-80. [2] Skudiene, V., Auruskeviciene, V., Reardon, J., and Stangej, O. (2011). The effect of emotional intelligence on project outcomes. Transformation in Business & Economics, 10, 1 (22), 125-137. [3] Rhee, KS, and White, RJ (2007). The Emotional Intelligence of Entrepreneurs. Journal of Small Business and Entrepreneurship, 20 (4), 409-426. [4] Zampetakis, LA, Kafetsios, K., Bouranta, N., Dewett, T., and Moustakis (2009). On the relationship between emotional intelligence and entrepreneurial attitudes and intentions. International Journal of Entrepreneurial Behavior S Research, 15 (6), 595-618. [5] Mortan, RA, Ripoll, P., Carvalho, C., and Bernal, MC (2014). Effects of emotional intelligence on entrepreneurial intention and self-efficacy. Journal of Psychology of Work and Organizations, 30 (3), 97-104. [6] Lee, L., Wong, PK, Der Foo, M., and Leung, A. (2011). Entrepreneurial intentions: The influence of organizational and individual factors. Journal of Business Venturing, 26 (1), 124-136. [7] Pihie, L., and Akmaliah, Z. (2009). Entrepreneurship as a career choice: An analysis of entrepreneurial self-efficacy and intention of university students. European Journal of Social Sciences, 9 (2), 338-349. 14849

[8] Foo, MD (2011). Emotions and entrepreneurial opportunity evaluation. Entrepreneurship Theory and Practice, 35 (2), 375-393. [9] Hyde, A., Pethe, S., &Dhar, U. (2002). Emotional intelligence scale (EIS). Lucknow: VedantPublications. [10] Mayer, J., Roberts, R., &Barsade, S. (2008). Human Abilities: Emotional Intelligence. Annual Review of Psychology, 59, 507-536. [11] Bar-On, R. (2006). The Bar-On model of emotional-social intelligence. Psicothema, 18, 13-25. [12] O Boyle, E. H., Humphrey, R. H., Pollack, J. M., Hawver, T. H., & Story, P. A. (2011). The relation between emotional intelligence and job performance: A meta-analysis. Journal of Organizational Behavior, 32, 788-818. [13] Ahmetoglu, G., Leutner, F., & Chamorro-Premuzic, T. (2011). EQ-nomics: Understanding the relationship between individual differences in Trait Emotional Intelligence and entrepreneurship. Personality and Individual Differences, 51, 1028-1033. [14] Chell, E. (2007). Social Enterpreise and Entrepreneurship: Towards a convergenttheory of the entrepreneurial process. International Small Buisiness Journal, 25, 5-23. [15] Hisrich, R., Langan-Fox, J., & Grant, S. (2007). Entrepreneurship research and practice.a call to action for psychology. American Psychologist, 62, 575-589. [16] Goleman, D. (1995). Emotional intelligence. New York: Bantam. [17] Salovey, P., & Mayer, J. (1990). Emotional intelligence. Imagination, Cognition, and Personality, 9, 185-211. [18] Mayer, J., &Salovey, P. (1997). What is emotional intelligence? In P. Salovey& D. Sluyter, Emotional Development and Emotional Intelligence: Implications for Educators (p. 3-31). New York: Basic Book. [19] Liñán, F., & Chen, Y. W. (2009). Development and cross-cultural application of a specific instrument to measure entrepreneurial intentions. Entrepreneurship Theory and Practice, 33(3), 593 617. 14850

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