The main purpose of this research study is to discuss the entrepreneurial intention among final year students in MMU Malacca. Chapter 1 is composed of research background, problem statement, research objectives, and research questions, significance of the study, research scope, and definition of key terms.
1.2 Research Background
Entrepreneurship has been very important and decisive to all the country from the globalization time because of increasing of entrepreneurial activities will help in developing jobs for the community, thus will reduce the rate of unemployment (Abdullah Azhar, Annum Javaid, Mohsin Rehman & Asma Hyder, 2010). Nafukho and Helen Muyia (2010) proved that entrepreneurship is essential in developing and achieving a beneficial economy. Growth of entrepreneurship is related to a country’s economy which was supported by Dickson, Solomon and Mark Weaver (2008). Entrepreneurial plays a major role which helps to develop jobs for public out there and gives benefits towards an economy.
Based on the report done by Global Entrepreneurship Monitor (GEM) in 2009, the total entrepreneurial activity (TEA) in Malaysia is very low and below the average as compared to other countries (Xavier, Ahmad Zaki, Dewi Amat Sapuan, Leilanie Mohd Nor, Mohar Yusof, Ainon Jauhariah, Mohd Hanif, Hanita Sarah Saad ; Saad, 2009). The total entrepreneurial activity for Malaysia( TEA) has risen gradually from 4.4% in 2009 to 4.96% in 2010 (Xavier, Noorseha Ayob, Leilanie Mohd Nor ; Mohar Yusof, 2010).
There is a small increment in Malaysia’s total entrepreneurial activity (TEA), however, Malaysia still managed to be at the third lowest TEA rate. Deficient of TEA rate is not a good sign for Malaysia because it describes higher unemployment rate. The World Bank 1 found that unemployment rate of the total labor force of Malaysia increased from 3.2% in 2007 to 3.3% in 2008 and up to 3.7% in 2009 (Unemployment, total (% of total labor force), 2012). Part of the high unemployment rate came from unemployed graduates. During the first quarter of year 2011, there is an increase in number of unemployed graduates from 65,000 to 71,600 in Malaysia (The problem with fresh grads, 2011).
High unemployment rate will lead to a country?s incompetency and this is proven by an organization known as IMD. They found that Malaysia?s competitive ranking around the world has dropped from 10th place in 2010 to 16th place in 2011 (IMD announces the 2011 World Competitiveness Rankings and the result of the “Government Efficiency Gap”, 2011). To solve the high unemployment issues, Malaysian government has come out with Ninth Malaysia Plan 2006-2010 (2006) which played a crucial role in developing and encouraging entrepreneurs. Three organizations have been established in this plan, which are Ministry of Entrepreneur and Cooperative Development (MECD), Perbadanan Nasional Berhad (PNS) and the SME (Small and Medium Enterprises) Bank. MECD is responsible for coordinating and developing Bumiputera entrepreneurs (Ministry of Entrepreneur and Co-operative Development (MECD), n.d.) whereas PNS is an agency under the Ministry of Domestic Trade Cooperatives and Consumerism which develops the franchise industry by increasing the number of franchise entrepreneurs through its expertise in providing quality service and products (PNS Background, 2012). SME Bank supplies SMIs with capital and finance (Bank Negara SME Special Unit, n.d). The efforts of government tend to encourage unemployed graduates to be entrepreneurs, utilizing their knowledge and skills instead of continue being unemployed.
Moreover, entrepreneurial courses have been given in many public and private universities in Malaysia (Study Bachelor Degree Entrepreneurship in Malaysia, 2012). Based on certain studies, it has been said that the importance of entrepreneurship education can develop a successful entrepreneurs (Ooi, Selvarajah & Meyer, 2011; Lee, Chang & Lim, 2005; Tam, 2009; Gelard & Saleh, 2011). Entrepreneurship education has played an important role for all the students to be a successful person in future. It helps students to get know about entrepreneurship education well.
Hence, educational system that gives sufficient and enough knowledge and inspiration for entrepreneurship development might rise an individual’s entrepreneurial intention to fulfill the behavior (Abdul Kadir, Salim ; Kamarudin, 2011). Tailor-made programs and increase the entrepreneurial intention of undergraduate can make graduates likely to become entrepreneurs.
The study of Mohammad Ismail, Shaiful Annuar Khalid, Mohmod Othman, Hj.Kamaruzaman Jusoff, Norshimah Abdul Rahman, Kamsol Mohamed Kassim, Rozihana Shekh Zain (2009) said there is a high chances opportunities that young teenagers who take the entrepreneurial subjects have a strong inspiration to become entrepreneurs.
However, the Malaysian government’s plan and the increased entrepreneurial courses have met failure. The number of entrepreneurs is still lacking and is in a bad condition in Malaysia and the entrepreneurial intention is as low as 8.7% (Kelly, Singer & Herrington, 2011). Intention is the predictors of presenting a certain behavior (Ajzen, 1980). To understand an individual’s intention we need to forecast whether the behavior can be perform or not. Without the interest, an individual sure will not have the intention or thoughts to look attentively entrepreneurship as their career choice and they might just end up by being employed or unemployed. Students must have an interest towards the entrepreneurship to make sure they can succeed in future successfully. More information should be explored and discuss on the antecedents of entrepreneurial intention among undergraduates since intention is the precedents of increasing entrepreneurs.
1.3 Problem Statement
A major important issue has been talking and discusses by policy makers and academicians for the unemployment problems among graduates. To prevent this issue, graduates have the rights to decide to be self-employed or otherwise. Many fresh graduates do study entrepreneurship and get the knowledge and skill that are important for them to start-up their own business. After students graduating from university, only a small percentage of students who tend to be self-employed. It is because of the lack of confidence and encouragement and support from the people. There are certain students who have potential to be entrepreneurs but they are not aware of their career option that are available for them (Advising Entrepreneurial Students, n.d.). To be an entrepreneur it can be an option to be self-employed which has had prompted researchers to investigate on the influence of entrepreneurial characteristics and entrepreneurial intention among undergraduates
Entrepreneurship is not only the purpose that might be consequences of simple efforts. It needs an efficient and permanent attitude as part of a person’s personality. Khan, Ahmed, Nawaz and Ramzan (2011) had said that female student’s majority have less entrepreneurial interest and intention in the aspect of gender. There are equal inclinations towards the entrepreneurial attitude of a person or individual. Attitude can be form by education which is based on their personality and demographic characteristics (Ahmed, Nawaz, Ahmad, Shaukat, Usman, Rehman ; Ahmed, 2010).
Attitude towards entrepreneurship and self-efficacy plays an important factors influencing entrepreneurial intention which establish entrepreneurs’ success (De Noble, Jung & Ehlrich, 1999). Moreover, to measure an attitude only small intention is directed (Sharrif & Basir, 2009) and entrepreneurial efficacy among Malaysian students. It is a big challenging for entrepreneurship educators in designing courses and growing students’ innate entrepreneurial capabilities and intention.
Psychological characteristics of entrepreneurs have received a specific concentration to the worldwide. Entrepreneur psychological such as personality, attitudes, demography, and behavior is an important variable which measure in the real entrepreneur practices (McClelland, 1961). Personality traits have effect directly on many entrepreneurial tasks. For example, the intention to launch a new business, success in business, and enhance entrepreneurial set up (Shaver ; Scott, 1991). Hence, it is better to identify the entrepreneurial characteristics among students which can be affecting individual to be entrepreneurs (Taramisi Sama-Ae, 2009).
To realize the importance of entrepreneurship for social and economic development of Malaysia, entrepreneurship is an issue or matter that needs to seek attention from researchers. Tendency towards entrepreneurship is usually integrated with some personal characteristics (values and attitudes, personal goals, creativity, risk-taking propensity and locus of control) that can be expected to be affected by a formal program of education. Education also prepares entrepreneurs to create new venture, transferring of knowledge and skills that can increase the self-efficacy (Bandura, 1986) and effectiveness of the potential entrepreneur.
Educational programs can be affected by the positive entrepreneurial attributes which has a strong evidence and those programs are able to develop an awareness of entrepreneurship as a career choice and to encourage favorable attitudes toward the entrepreneurship (Gorman, Hanlon ; King, 1997).
Entrepreneurship education seems to be a serious issue but currently is not positively entrenched. There is relatively limited entrepreneurial activity in Malaysia and it is hard to explain because of the factors such as attitudes and aspirations. It is prove that successful entrepreneurs are yield a high status, but the lacking of successful entrepreneurs’ affect upon undergraduates’ attitude towards entrepreneurship (Xavier et al., 2009).
1.4 Research Objectives
The main purpose of the study is to investigate and explore factors that affect entrepreneurial intention among final year students based on the Theory of Reasoned Action (TRA). The objectives are to:
I. To determine the relationship between a feeling and way of thinking that affects a person’s behavior with entrepreneurial intention.
II. To investigate the relationship between subjective norm with entrepreneurial intention.
III. To identify the relationship between people’s perceptions of their ability to perform a given behavior with entrepreneurial intention
IV. To discover the impact of independent variables with entrepreneurial intention.
1.5 Research Questions
This study was conducted to classify the relationship of the independent variables which are the
a feeling or way of thinking that affects a person’s behavior, people’s perceptions of their ability to perform a given behavior and subjective norms with the dependent variable which is the entrepreneurial intention. The research questions for this research are:
I. To determine the influence of Theory of Reasoned Action (TRA) towards entrepreneurial intention among final year students
II. To examine the level of entrepreneurial intention among MMU Malacca students?
III. What are the antecedents of entrepreneurial intention among MMU Malacca students?
1.6 Significance of the study
We as a young Malaysian people have to contribute to the world to stimulate the growth of economic in the country and it also could help our country Malaysia to be a developed country by the year of 2020 which is proud for everyone. Those young Malaysian people is the want we can hope for and to help the nation to make the country as an advanced and prosperous economy. But, young Malaysian people do not like to be as self-employed because it is not the main career option amongst them (Rajendran, 2011). They don’t give interest on it.
Hence, this study is very important for the undergraduate’s students on their future life path.
By knowing and getting known their capability and what are their weaknesses as well as their intention, it can make them a successful person and also provides a good choice for their career development and success. They have the capability to find out their personal characteristics, attitudes and self-efficacy that will help them in figuring out their intention towards working for one as a freelance or the owner of a business rather than for an employer.
To implement policy on future development, entrepreneurial program is also significant and important for the undergraduates of the study. Undergraduate’s students who have a good interpretation on how entrepreneurial intention can affect the students, all the plans given by the country which has a high authority to them will be fully utilized. This
This research will provide understanding to the state of entrepreneurship education for policy makers in Malaysia to encourage entrepreneurial intention and also will increase the new business rate venture. During identifying the depth of entrepreneurial intention, practical information and data will be given as as policy makers can make better decisions in designing and creating the entrepreneurial course structure which helps in increasing the students’ involvement in business in out coming future (Ooi, 2008).
Last but not least, the community should understand and know their roles to develop the
undergraduates students about their intentions and providing them support and encouragement which can make them confidence in achieving it. To be an entrepreneur family background is one of the factors that affect an individual’s intention (Kolvereid, 1996a). Parents who have their own business and company should provide their children with experienced and knowledge or teach them all the business activities which can make them to be confident and they can be brace to be self-employed. When there more entrepreneurs in the country, people who don’t have jobs or has been finding jobs for longer period can be hired by them as well can reduce the rate of unemployment in the country. Our country will not have to think about the jobless issue. This can gives an advantage to the community by providing better living quality and life.
1.7 Research Scope
The scope of this research is to identify the factors that will impact the entrepreneurial intention among students. In this research, it will clarify on how does the subjective norm, attitude toward the behavior, and perceived behavioral control, entrepreneurship education and personality traits influence entrepreneurial intention among students. In addition, this research will only be conducted in Malaysia under the private university. Thus, the results will not be totally accurate and less reliable compared to those researches that respondents are from around the world. The factors that influence the entrepreneurial intention can be determined after this research is conducted.
1.8 Definitions of the key terms
Variables Definition source
Entrepreneurial Intention Leong (2008); Liñán and Chen (2009)
Subjective Norms Leroy, Maes, Sels and Debrulle (2009); Leong (2008); Gurbuz and Aykol (2008)
Attitude toward the Behavior Nishantha (2009); Sagiri and Appolloni (2009); Paço et al. (2011); Liñán and Chen (2009)
Perceived Behavioral Control Paço et al. (2011); Liñán and Chen (2009); Dohse and Walter (2010)
Entrepreneurship Education Lee et al. (2005); Ooi et al. (2011); Selvarajah and Meyer (2011)
Personality Traits Leong (2008); Lu¨ thje and Franke (2003); Gurbuz and Aykol (2008)
As a conclusion, chapter one is the introduction and foundation of a brief overview in the research. Therefore, this chapter will provide directions, insight and scope of the study in the following chapters.
This chapter reviews past studies and related literature on factors that influence entrepreneurial intention among students. In this chapter, the discussion covers areas that are directly related to the variables of interest. The areas are entrepreneurial intention, subjective norm, attitude toward the behavior, and perceived behavioral control, entrepreneurship education and personality traits. This chapter concludes with a summary of the discussion in the chapter.
2.1 Theory of Reasoned Action (TRA)
Many behaviors in our daily life may fall under discretionary control as people perform these behaviors easily if they have the desire to perform. Theory of Reasoned Action (TRA) (Fishbein ; Ajzen, 1975; Ajzen ; Fishbein, 1980) was used to predict the voluntary behaviors and aid or help others in identifying their own psychological factors. Based on the assumption and thought human like us normally is design by their behavior in a reasonable manner. They can know any information that happen in surrounding and their consequences of the actions that they are getting through.
Attitude toward the behavior and subjective norm are two key elements that play a role which has a purpose to an individual’s intention. Humans usually have a multiple primary beliefs towards their behavior. Each of the primary belief of a behavior has a connection between the valued outcome and the outcome that has a specific subjective value. Salient beliefs and evaluated outcome have a good relationship which merges to build a positive or negative attitude toward the behavior. Salient beliefs have a broad definition which mean when the individual perceived that the disadvantages out weight perceived advantages, they will insists to fulfill the behavior (Fishbein & Ajzen, 1975). Subjective norms of a belief can be underlying as a normative beliefs, which individuals are affected by their important for them to perform given behavior or not.
Model 2.1: Theory of Reasoned Action (TRA)
Source: Fishbein, M., & Ajzen, I. (1975). Belief, attitude, intention, and behavior: An introduction to theory and research. Reading, MA: Addison-Wesley.
Entrepreneurship is the action where an individual pursue new business opportunities regardless to the resources they are currently control (Stevenson & Jarrilo as cited in Barringer & Ireland, 2010). Fred Wilson said that that entrepreneurship is the art that can turn the ideas that an individual have into a profession of a business (Barringer & Ireland, 2010).
Entrepreneurship is basically come from the French word “Entrepreneur”. Entrepreneurs are also known as working for oneself as a freelance or the owner of a business rather than for an employer. There is no exact meaning for entrepreneurs because people from many source interpreted it in different ways and defined it differently.
For economist, they think that entrepreneurship means as an entrepreneur they are the one who makes the joining of resources that can make them valuable. Meanwhile, for a psychologist, they think that the entrepreneur have a certain force which they can obtain or get something to fulfill their targeted goals that they wants to achieve.
A businessman have a different way of thinking where they thinks that an entrepreneur may be a
strong competitor for them, provide jobs to others, act as someone who create wealth for others, utilize the resources and also a source of supply, and a customer. (Hisrich, Peters & Shepherd, 2005).
Some people believed entrepreneurs can’t be made but it exists in the world. However, based on many studies that has been research, entrepreneurs can be made and it is not inherited just like that (Barringer ; Ireland, 2010). Everyone have the chance to be entrepreneurs as long as they have studied properly and go through the educational process in a right way (Gelard ; Saleh, 2011; Ooi et al., 2011). Anyone can be an entrepreneurs if they really put an effort.
Becoming entrepreneurs, they are the boss for them because they have their own business and they can make decision by themselves which they don’t have to direct by people. They also will be the person in-charge to the company which they have the responsible for any matters and also
provides a greater possibility of achieving a significant financial rewards. They can achieve their personal professional goal and be a successful person in life (Principles of Entrepreneurship, n.d.).
It is not easy to be successful entrepreneurs because we need to work hard and aim for it with confidently. Long term, systematic planning and business expertise is needed such as creating
business model, putting together a new venture team, raising money for the company, establishing partnerships, managing finances, leading and motivating employees so that company’s performance do not get down and others. Individuals must be very careful and take it as serious things in determining whether they can do it as their own self or not. If they can, they should make the right decision by choosing the right path to be self-employed.(Kr. Baruah, n.d.).
Hence, a person should identify entrepreneurial intention before become entrepreneurs. It is important to get know because it can give a person a clear goal about what he wants to do to accomplish his/her goals and be a successful person in life and career development.
2.3 Entrepreneurial Intention
According to Ajzen (1991:439), intention is the instantaneous antecedent of behavior. He said that behavior can’t be performed or presented without thinking but follows reasonably and constantly from the behavior-relevant information and behavior established by rewarding events and weakened by pushing events. Individuals would prefer to be self-employed because they think entrepreneurship is a right one for them in their career path. (Davidsson, 1995) . They also can fulfill and accomplish their own personal goals, pursue their own ideas and realize financial rewards (Barringer & Ireland, 2010: 31).
Entrepreneurial intention describe as desire of individuals to perform entrepreneurial behavior, to get involve in entrepreneurial action, to be working for oneself as a freelance or the owner of a business rather than for an employer, or to establish a new business (Dell, 2008; Dhose & Walter, 2010). It is basically involves inner guts, dream, goal and the feelings to stand on their own position by themselves (Zain, Akram & Ghani, 2010). An individual or a person may have capability to be entrepreneur but not make any changing into entrepreneurship unless they have such intentions and purpose (Mohammad Ismail et al., 2009).
Birds (1988) suggested that entrepreneurial intention refers to individual’s states of mind and their belief and thought in aiming by creating new venture business, developing new business concept or creating new value within existing firms. It is an important factor in ease towards new venture establishment and has significant impact on the firms’ venture success, survival and growth. He proposed that intentional process usually begins from the entrepreneur’s personal needs. They also get to know what they wants to achieve, their values, behavior and the beliefs they have on them based on the process.
Entrepreneurial behavior as entrepreneurial fact or process of doing something always will fall into the category of intentional behavior because of the valid predictors where they can predict earlier in future which said by the scholars. If we study on the entrepreneurial intention, it will give people a valuable understanding for researchers. They can know the process of entrepreneurship and estimates the entrepreneurial activities in a good way through indicating entrepreneurial intention (Davidsson, 1995; Bird, 1998; Krueger et al., 2000; Peterman ; Kennedy, 2003; Liñán, 2004; Kolvereid ; Isaksen, 2006; Krueger, 2007; Dell, 2008; Mohammad Ismail et al., 2009).
Individuals usually do not start a business that easily but they will do it with intentionally instead of doing it inadvertently (Krueger et al., 2000; Krueger, 2007). According to Krueger (2007) entrepreneurial action and potential exogenous influence (traits, demographics, skills, social, cultural and financial support) have a good intention which serves as a reconciliation factor. Entrepreneurial intention also helps and determines the reasons why some undergraduate students like to start their own business before decide on what type of business they want to do and produce in order to make the business well developed. The entrepreneurs should know well about their own motives to start their own business and they should identify what factors make them to decide the decision they make to to pursue entrepreneurial career and how the venture becomes reality.
Some scholars proposed that entrepreneurship education should be included in entrepreneurial intention model. This is because entrepreneurship educational and training programs can train them well and they can know everything from there and applied on the business. It also can change individual’s attitude towards entrepreneurship, they will be more confident and brave in managing entrepreneurial career and their perception towards entrepreneurship which can affect
entrepreneurial intention (Peterman & Kennedy, 2003; Kolvereid & Isaksen, 2006; Dell, 2008;Tam, 2009).
2.4 Subjective Norms
Subjective norms have a broad definition which is the perception of an individual of the social pressure to conduct or not to conduct the select behavior (Ajzen, 1991; Francis et al., 2004). It can also be described as the individual’s perception of other people’s perspective and idea on the suggested behavior. It can be an influential role and put pressure on an individual to establish a certain behavior to become an entrepreneur. Subjective norms can be stated as a belief that a group of people will support a certain behavior of a person. Other perspectives like family members, friends, colleague, and the immediate supervisor can affect individual perception to become an entrepreneur (Brouwer et al., 2009; Vermeulen et al., 2011). Subjective norms can change a person behavior based on the other people’s view and idea. For example, a student have been who has been pressurized by family members may have the intention to become an entrepreneur after have been forced by them and change the student mind. Therefore, subjective
norms may have a bearing on individual’s behavioral intention.
2.5 Perceived Behavioral Control
Perceived behavioral control is defined as a person’s belief or confidence on his/her power of ability of showing certain behavior (Brouwer et al., 2009). Perceived behavioral control can make individuals the ability to control their own behavior and the level of confidence in performing a task or not (Francis et al 2004), Hence, an individual’s belief can influenced by the
Individual’s behavioral intention and make him/her to accomplish the specific behavior. Ajzen and Madden (1986) in Buchan (2005) defined perceived behavioral control as the person’s belief as to how hard and simple it is the performance of a behavior. Therefore, when a person has the opportunity to act morally this will make him /her he to be motivated to perform the
tasks or action.
In this context, perceived behavioral control may exert an impact on student’s intention to become an entrepreneur. As we see earlier, people’s behavioral intention is strongly influenced by their level of confidence in performing the actual behavior. For example, if a student doesn’t have interest to become an entrepreneur, they might ignore and leave it. However, if they are positive about becoming an entrepreneur and had been supported by the family members even though they don’t like it, they might have a spirit to try becoming a good entrepreneur and perform the specific tasks that needed to be done. We can say that the higher the individual believes that he can do anything to be a successful entrepreneur; the stronger is the entrepreneurial intention.
Other than that, Obschonka, Silbereisen and Schmitt-Rodermund (2010) stated that individual’s characteristics and their entrepreneurial personality can lead to higher entrepreneurial intention.
Those who have confident that they can achieve it, can be a successful person by having entrepreneurial personality patterns such as locus of control.
2.6 Attitude towards Behavior
According to Ajzen and Fishbein (2000:216), an attitude refers to individual’s feelings / emotions about the attitude object. For example: “I am scared of spiders”. It also involves a person’s belief / knowledge about an attitude object. If they belief that the object exists and always think of it, they will automatically develop the attitude toward the particular object.
They will link it the object to some features and individuals attitude towards the object or item function as an evaluation towards the features. Whenever Whenever individuals learn that the object is linked to a given attribute, their evaluations about the attribute becomes associated with the object. Attitudes are based on the total set of the individual’s primary beliefs and the evaluations related with those beliefs. Trevelyan (2009); Sagiri and Appolloni (2009) also proposed that behavior of a person is rely on their beliefs and attitudes on how they going to show it and it is a major role to identify the individual actions.
A person’s perception on capability to perform certain actions can improve their attitude and also their intention as well as subsequent behavior(Ajzen, 1991).An individual’s attitude towards behavior can be either a positive or negative attitude (Ajzen, 1991). Li (2007) defined it as an individual’s qualities and features towards being selfemployed in the present study. Xavier et al. (2009) referred to people conscious where they have a good chance for them to build a new business or the degree on their attachment towards high status of entrepreneurs.
Kolvereid and Tkachev (1999); Dohse and Walter (2009); Paço, Ferreira, Raposo, Rodrigues and Dinis (2011) found that the attitude toward the behavior has a positively directed on entrepreneurial intentions. Thus, education and training should change the undergraduate’s student’s personal attitudes rather than provide them with technical knowledge about business. This is because it is important to create new business and to overcome the perceived barriers to entrepreneurship (Paco et al., 2011; Dohse ; Walter (2009).
2.7 Entrepreneurial Education
Entrepreneurship education is the subjects that we learn in universities or college and also the curricular activities where it provides them with skills and knowledge in achieving their profession. (Clouse, 1990; Ekpoh ; Edet, 2011; Ooi, Selvarajah ; Meyer, 2011). Scholars have proved that entrepreneurship education can be an efficient to everyone in encouraging someone and being a role model to student’s interest towards their career path which also they will be brave enough to take any risks. (Fayolle & Gailly, 2004; Lee, Chang & Lim, 2005; Matlay, 2008; Izedonmi & Okafor, 2010; Ooi et al., 2011). Matlay (2008) have been said that during the 10 years period, only 64 graduates in the research sample had undergone entrepreneurship education. They have become an entrepreneur after gone through entrepreneurship education
In addition, Boyd and Vozikis (1994); Peterman and Kennedy, 2003; Izquierdo and Buelens (2008); Drost Ellen (2010) says that entrepreneurial self-efficacy has bring the link between entrepreneurship education and entrepreneurial intention. It is because of the courses that they take can develop students to be more confident in themselves and their confident level can make their talent to be entrepreneurs. Hence, students have the capabilities and strong enough to create and handle their own business and increase the entrepreneurial intention.
2.8 Personality Traits
Personality traits prove that it is one of the most important aspects that affect entrepreneurship. (Shaver & Scott, 1991). Personality traits are also called as trait theory because it is about individual personal characteristics and habits of an entrepreneur. Personality traits are divided into few categories:
2.8.1 Need for achievement (McClelland, 1961).
As what we can based on what Sagie and Elizur (1999) says that, McClelland’s need for achievement theory is the need for achievement which is the strongest psychological factors that influenced entrepreneurial behavior. Individuals with high need for achievement may have a good intention or feelings and have the strong potential to be great and successful entrepreneurs in their career.Individuals who have a strong need for achievement can easily solve their problems. They also can set a challenge goal which they can challenge by themselves in aiming the goals and strive to achieve it by their own effort and by pushing themselves to aim it ( McClelland, 1961). Individuals also who have the high need for achievement will engage and participate more towards entrepreneurial activity (Tong, Tong ; Loy, 2011). They can perform well in challenging the tasks that given to them well and get to know something innovative ways to develop their performance (Littunen, 2000). From the result of Tong et al. (2011), entrepreneurial intention.is the strongest predictor for need for achievement
2.8.2 Locus of control (Rotter, 1990).
Locus of control (Rotter, 1990) is a psychological characteristic that have link and connected with the talent of individuals to control the events in life or not. Individuals who are internal locus of control believe and trust themselves, think that they are able to control life’s events. Whereas individuals who are external locus of control believe that life’s events is the result of external factors, such as chance, luck or fate (Hay, Kash ; Carpenter, 1990; Millet, 2005). Those individuals with a higher internal locus of control are tending to be self-employed (Bönte ; Jarosch, 2011). Individuals have the desire and high motivation to produce something better in the efficiency of work (Göksel ; Aydintan, 2011). They have the capability and brave enough to control the environment by their movement and they are ready to take any risks that appear to them (Mueller ; Thomas, 2000). Gürol and Atsan (2006). Khan et al. (2011) have found that with internal locus of control, the undergraduates students will perform good and strong attitude towards entrepreneurial intention and they have the a high potential and capability to become an entrepreneur. We can say that the higher the internal locus of control of undergraduates, the higher the entrepreneurial intention.
2.8.3 Risk-taking (Nishantha, 2009).
Risk-taking propensity refers to individuals willing to take risky action in the hope of a desired result in uncertain contexts (Nishantha, 2009). According to Cantillion (1775), to differentiate entrepreneurs from employed workers was the uncertainty and risk taken by the former could be one of the major factors of entrepreneurial intention. Entrepreneurs usually prefer to take ordinary risks which are less extreme risky which they feel save by doing like that. Carland III, Carland Jr, Carland and Pearce (1995) said that entrepreneurs who have high education and study a lot have a higher risk propensity and they can tolerate well in uncertainty than non-entrepreneurs. Simon, Houghton and Gurney (1999) indicate that entrepreneurs like to take high-risk opportunities to utilize due to cognitive biases. They also could not recognize the risks engaged in a given entrepreneurial activity.Dohse and Walter (2010); L?thje and Franke (2004); Taramisi Sama-Ae (2009); Zali, Ebrahim, and Schøtt (n.d.) suggested proposed that risk-taking propensity have positively influenced and impact entrepreneurial intention. Because of family background, risk taking propensity is not significant toward entrepreneurial intention (Altinay, Madanoglu, Daniele and Lashley ,2012).
We can say that a person who has high level need for achievement, greater internal locus of control and high willingness to take risk can be an entrepreneur with high interest on it. Therefore, personality trait is an important determinant to entrepreneurship intention (Costa ; McCrae, 1984; Singh ; DeNoble, 2003; Zain et al., 2010).
This chapter discussed about each of the variables in the topic from the definition to the purpose that will affect the entrepreneurial intention. The variables which are subjective norm, attitude toward the behavior, and perceived behavioral control, entrepreneurship education and personality traits were all being explained in details in this chapter.
In the previous section, the topic studied has been covered. This section will mostly cover in research methodology which includes research design, research instruments, publication research, survey and other research skill such both present and historical information. The following section such as population, sample size, sampling method will be also included in this study. Hence, data analysis method which is included reliability analysis, Pearson correlations and multiple regressions will also be going to discuss in the last part.
3.1 Development of Research Framework
Independent variables Dependent Variables
Figure 1: Research Framework of the Factors That Influence Entrepreneurial Intention Based on Theory of Reasoned Action (TRA), perceived behavioral control, entrepreneurship education and personality traits.
According to the figure 3.1, this framework consists of five types of independent variable which are subjective norm, attitude toward the behavior, and perceived behavioral control, entrepreneurship education and personality traits. The dependent variable for this study is entrepreneurial intention. The five independent variables will effect on dependent variable which is the entrepreneurial intention based on Theory of Reasoned Action (TRA) perceived behavioral control, entrepreneurship education and personality traits. There are four hypotheses that were made in this research:
H1: There is significant relationship between subjective norms and entrepreneurial intention.
H2: There is significant relationship between attitude toward the behavior and entrepreneurial intention.
H3: There is significant relationship between perceived behavioral control and entrepreneurial intention.
H4: There is significant relationship between entrepreneurship education and entrepreneurial intention.
H5: There is significant relationship between personality traits and entrepreneurial intention.
3.2 Development of Hypotheses
The aim of these hypotheses is to determine the relationship between the dependent variable with the independent variable in a test. Thus, the five hypotheses of research were shown as below:
3.2.1 H1: There is significant relationship between subjective norms and entrepreneurial
Subjective norm is very important for an individual based on their view because it influenced them one another. According Wedayanti, N. P., and Giantari, I., (2016), subjective norms plays a major role in helping encourage them to perform a certain behaviors or not as well as the willingness to do something that is important or not. Subjective social norms also is an individual’s belief on how and what they think and view about people that are very important for them and from there they will follow their thoughts and behavior (Maulana, H.D., 2009: 58). Subjective norm is a norm which departed from the inner element or the human conscience (Sumaryono, E., 2012: 111).
Past research has shown results that there is a relationship between subjective norms with the intention of entrepreneurship. Subjective norm is the belief the individual to follow the direction or suggestion of what people said around to involve in entrepreneurial activity (Cruz et al., 2015).
3.2.2: There is significant relationship between attitude toward the behavior and entrepreneurial intention.
Attitude is a readiness to react to certain objects in the environment as an appreciation of the object (Efendi, F. and Makhfudli, 2009: 103). Attitude is the reaction of an individual to an object in the environment, in the study of these objects is entrepreneurship. Cruz et al, (2015),
Theory of Planned Behavior explains that there are three factors that influence a person’s intention to perform a behavior, one of which is an attitude. According to Cruz et al. (2015), the attitude is a tendency to react effectively in response to the risks that would be faced in a business.
Krueger et al. (2000) tested the attitude-intentions of students, finding a significant influence of the attitude toward the behavior on intention. Leong (2008) conducted the similar research in Open University Malaysia and showed that the more students value the entrepreneurial career path, the stronger their intentions to be entrepreneur. Training and skill development programs are important in fostering personal capabilities and interests among students to have positive attitudes towards entrepreneurship.
While the result obtained from undergraduates by Frazier and Niehm (2006) stressed that positive attitude toward self-employed and the confidence of the ability to create a new venture successfully appear to predict stronger levels of entrepreneurial intention. Elfving, Brännback and Carsrud (2009) revealed that if an individual holds positive attitude toward self-employed, considers entrepreneurship to be aligned with his overall goals in life and sees an opportunity to perform an entrepreneurial action, then most likely, he will form an entrepreneurial intention. According to Tam (2009); Byabashaija and Katono (2011), the result strongly evidenced the students who is exposed to entrepreneurship education, their entrepreneurial attitude and entrepreneurial intention will change accordingly. This is because entrepreneurship education can help to build confidence and promote self-efficacy of students.
Dell (2008) mentioned that desirability to be entrepreneur is the measure of individuals? attitude toward entrepreneurship. He suggested that attitude can be developed and strengthened through information cues from previous experience and role model. External information cues (availability of resources) and internal (individuals? perception on their capability and taskspecific knowledge) can enhance entrepreneurial self-efficacy and in turns, strengthen their attitude toward entrepreneurship.
It is also confirmed that entrepreneurial attitude is significantly related to entrepreneurial intention among the university students in Xi’an, China (Peng, Z., Lu, G. & Kang, H, 2012)
3.2.3: There is significant relationship between perceived behavioral control and entrepreneurial intention.
Ajzen (1988) defines behavioral control as follows: “this factor refresh to the perceived ease or difficulty performing the behavior and it assume to reflect past experience as well as anticipates impediment and obstacles”, which means that these factors reflect the perceptions would be difficult or not perform an action and assumed a reflection of past experience and anticipation of obstacles. Behavior control is specified in the form of self-efficacy is a condition where people believe that a behavior is easy or difficult to do, Cruzet al. (2015).
Behavior control is specified in the form of self-efficacy is a condition where people believe that a behavior is easy or difficult to do, Cruz et al. (2015). It is believed that one of the difficult easy a thing to do can be a barrier or challenge to entrepreneurship.
3.2.4: There is significant relationship between entrepreneurship education and entrepreneurial intention.
According to Gerba, D.T. (2012) entrepreneurship education is a conscious effort by individuals to increase knowledge about entrepreneurship. Educational entrepreneurship education is not marketing or sales that educate someone to be a merchant, but has a wider meaning than just being a seller (Nurseto, 2010). Entrepreneurship education is taught how to look at the opportunities and risks facing the business world. According to Kurniawan, R. (2013), entrepreneurship education is a discipline that studies on values, skills, and behavior in the face of life’s challenges to pursue opportunities with a wide range of risks that may be encountered.
The result of the research made by Gerba, D.T. (2012), suggests that the business management students who get more entrepreneurial education have entrepreneurial intentions than the engineering students who did not get entrepreneurship education. To hone in entrepreneurship intentions of course, can be reached through the educational process. One of the factors driving the growth of entrepreneurship of a country lies in the role of universities through the implementation of entrepreneurship education (Wedayanti, N. P. and Giantari, I. G., 2016).
3.2.5: There is significant relationship between personality traits and entrepreneurial intention.
According to Taramisi Sama-Ae (2009), characteristic of individuals and nature that owed by them together with demographic profile have been proven to have close relationship towards entrepreneurial intention.
Entrepreneurial characteristics are main attributes of entrepreneurs. As presented by (Taramisi Sama-Ae, 2009), internal factors (need for achievement, locus of control, risk taking and self-confidence) and external factors (market, financing, society and university) are major determinants for students? entrepreneurial intention. In this study, the result showed that there is high level of internal factors toward entrepreneurial intention. Need for achievement, locus of control and risk taking are adopted and categorized as personality traits (Nishantha, 2009; Altinay et al., 2012). The result also proved by Tong et al. (2011) and Zain et al. (2010) that it has positive and significant relationship towards entrepreneurial intention. However, selfconfidence is excluded as Entrepreneurial – Profile of an Entrepreneur (2003) defined it as individuals? ability to control what they are doing whereby it is similar to perceived behavioral control in TPB (Ajzen, 1991).
According to Taramisi Sama-Ae (2009), internal factors are main attributes and cues that drive students? entrepreneurial intention, thus, researchers do not include external factors in this study as this study is conducted among students.
3.3 Research Design
Quantitative method will be conducted in this study. This research will conduct a questionnaire because it can be used to obtain the data and get real information from the final year students who studying in MMU Malacca. The questionnaire will be design for around 30 questions and each question will be categorized into 5 choices which are strongly disagree, disagree, neutral, strongly agree and agree. The questionnaire will also be conducted by categorizing into two parts. The first part will be discussed based on the demographic information from respondent according to their age, gender, status, race, and what major they are in. Second part will be the questions which are related to the variables in this study that will be further discussed. This research will be using the primary data which are from the final year students in private sector by using the questionnaire that has been design. The main purpose of doing this research is to find out the relationship between the factors That Influence Entrepreneurial Intention Based on Theory of Reasoned Action (TRA) and entrepreneurship education in a private sector.
3.4 Research Instruments
This research uses different kind of approaches to design the research in order to gain effective and reliable result from the respondents. It is designed with four independent variables and one dependent variable in the questionnaire for this research. The criterion in this questionnaire is to determine the factors That Influence Entrepreneurial Intention Based on Theory of Reasoned Action (TRA), perceived behavioral control, entrepreneurship education and personality traits in a private sector. With this criterion, this research can obtain the effective and reliable results with the right targeting respondents and this can be used to generalize the findings in the future.
The questionnaire is divided into two parts. Firstly, demographic information of the respondents which plays an important role as the data is applicable to analyze out the frequency distribution of the questionnaire and also the difference of demographic variables towards the private sector. Second part of the questionnaire consists of both dependent variable and independent variable. The dependent variable consists of entrepreneurial intention and five questions which are needed to be answered by the students. The independent variable investigates the entrepreneurial intention which may influence the subjective norm, attitude toward the behavior, and perceived behavioral control, entrepreneurship education and personality traits. There are five questions that have been designed in the questionnaire for each independent variable. Respondents will be given an option of four choices to choose from which are 1= Strongly Disagree, 2 = Disagree, 3 = Neutral, 4 = Agree and 5 = Strongly Agree.
3.4.1. Dependent Variable (Entrepreneurial Intention)
1. I prefer to be an entrepreneur rather than to be an employee in a company (Leong, 2008)
2. My professional aim is to become an entrepreneur. ( Liñán and Chen 2009)
3. I’m determined to organize a firm in the future. ( Liñán and Chen 2009)
4. I will put every effort to manage my own firm. ( Liñán and Chen 2009)
5. I have a very serious thought in starting my own firm. ( Liñán and Chen 2009)
3.4.2. Independent Variable
I. Subjective Norm
1. My parents are positively oriented towards my future career as an
entrepreneur. ( Leroy et al. 2009)
2. My friends look entrepreneurship as a logical choice for me. ( Leroy et al. 2009)
3. In my University, students are actively encouraged to pursue their own
ideas. (Gurbuz and Aykol 2008)
4. There is a well-functioning support infrastructure in my University to
support the start-up of new firms (Gurbuz and Aykol 2008)
5. I believe that people, who are important to me, think that I should pursue
a career as an entrepreneur. (Leong,2008)
II. Attitudes towards person’s behavior
1. I’d rather be my own boss than have a secure job. (Nishantha, 2009)
2. A career as entrepreneur is attractive for me (Paço et al. 2011) and (Liñán and Chen,2009)
3. If I had the opportunity and resources, I’d like to start a
firm. (Paço et al. 2011) and (Liñán and Chen,2009)
4. Being an entrepreneur would entail greater satisfactions
for me. (Paço et al. 2011) and (Liñán and Chen,2009)
5. I believe that if I will start my business, I will certainly
succeed. (Sagiri and Appolloni, 2009)
III. Perceived Behavioral Control
1. To start a firm would be easy for me. (Gurbuz and Aykol ,2008)
2. To keep a firm working well would be easy for me. (Gurbuz and Aykol ,2008)
3. I know how to develop an entrepreneurial project. (Paço et al. 2011); ( Liñán and Chen,2009)
4. If I tried to start a firm, I would have a high probability
of succeeding. (Paço et al.2011); (Liñán and Chen, 2009)
5. If I want, I could become self-employed after my
studies. (Dohse and Walter,2011)
IV. Entrepreneurship Education
1. Entrepreneurial subject is very important. (Lee et al, 2005)
2. Entrepreneurship should be taught in University. (Gurbuz and Aykol, 2008)
3. Entrepreneurship course should be made compulsory in order to
stimulate entrepreneurial spirit in campus. (Ooi et al, 2011)
4. More entrepreneurial and business educational programmes on campus
would help students to start businesses. (Ooi et al, 2011)
5. My University course prepares people well for entrepreneurial careers. (Ooi et al, 2011)
V. Personality Traits
1. I like to try new things. (e.g. exotic food or going to new places) (Leong, 2008); (Lu¨ thje and Franke, 2003)
2. I will create my own business once an opportunity is detected. (Leong,2008)
3. I am confident of my skills and abilities to start a business. (Leong,2008)
4. I have leadership skills that are needed to be an entrepreneur. (Leong,2008)
5. I have mental maturity to be an entrepreneur. (Leong,2008)
3.5 Sampling Plan
The population for this sampling data will be 150 students from private sector in MMU Malacca Campus. The techniques that applied in this research project are probability sampling, stratified sampling which is more utilized with the random or systematic sampling and with point, line or area techniques. This sampling method advantages is if the proportions of the sub-sets are known, it can create results which is more illustrating of the entire population. Moreover, it is extremely adaptable and appropriate to many geographical correlations and comparisons can be made between sub-sets.
3.6 Data Collection Method
There is only one type of data collection from this research which is primary data.
3.6.1. Primary Data
Primary data is the data which is originally from the direct result of the study or known as the first data. The primary data had been collected for the first time and the data use is new. It has been developed by the researchers for the investigation of the research and to help the researchers for a better exploration. The results of the primary data were gain after the analysis of the questionnaire whereby it will focus more on the achievements of the objectives. The questionnaires are distributed by hardcopy and online which is through an online web survey called QuestionPro.
3.7 Data Analysis Method
This research will be conducted by using SPSS software which is to analyze the data that we had collected by using questionnaires. SPSS is meant by Statistical Package for the Social Sciences whereby most of the people will use it to perform analysis with simple instructions and providing highly complex data manipulation to the users. This research can use SPSS to entry the data which we had collected and draw tables and graphs for this research. The result will be achieved after using SPSS software with reliable and true data.
3.7.1. Descriptive Analysis
Descriptive analysis is regarding the description of the basis features in a study given with the stipulation of simple summary about the sample and the measures. The elements of the descriptive analysis to be used are mean, median, mode, variance and standard deviation. All variables will be tested for this analysis.
3.7.2. Reliability Analysis
Reliability analysis determined the consistency of a data model. A result of high reliability would create similar result under controlled conditions. Cronbach’s alpha is the common method used to test reliability in a research study. This is because there are many Likert questions used in a questionnaire that shape a scale to test the reliability of the scale. When the reliability coefficient is close to 1, the measurement is considered to be better. If the reliability value is less than 0.6, it is said to be poor ,whereas the value of 0.7 considered to be acceptable. The value is over 0.8 are considered as the good reliability. All variables will be tested for this analysis.
3.7.3. Pearson’s Correlation Coefficient
The Pearson Correlation Coefficient determined the correlation between sets of data is a computation of how they are related which is always used for hypothesis testing in research study. The results gained are between -1 and 1. The closer the value to the zero, the greater the variation of the data points. High correlation will be ranged from 0.5 to 1.0 or -0.5 to 1.0, whereas the medium correlation will be ranged from 0.3 to 0/5 or -0.3 to -0.5, and the low correlation will be ranged from 0.1 to 0.3 or -0.1 to -0.3. High correlation stipulates if there is significant positive relationship between variables and vice versa. Every independent variable will be tested on their relationship between variables with the dependent variable.
3.7.4. Multiple Regression Analysis
Multiple regression analysis is normally used for hypothesis testing to forecast the unidentified value of the dependent variable from the identified value of independent variables. This analysis is able to discover the model by using variance and the contribution of the independent variables to the overall total variance. All the variables are significant in interpreting the variance in confidence level.
Multiple linear regression equation shows the relationship as follow:
Y = a+ b1X1 + b2X2 + b3X3+…………….
For this research, the below equations show the relationship between independent variables that influencing entrepreneurial intention among students:
Entrepreneurial intention = a + b1 (attitude toward the behavior) + b2 (subjective norm) + b3 (perceived behavioral control) + b4 (entrepreneurship education) + b5 (personality traits)
This chapter briefly explains regarding research framework and explanation of the framework. Besides, this study had also made five hypotheses according to the research framework. This research framework had also included research design, research instrument and the sampling method. Hence, for the data analysis in this research, the method used is SPSS in order to analyze out the data.