014 085 4thICM2014 Proceeding p165

165
4th INTERNATIONAL CONFERENCE ON MANAGEMENT

(4th ICM 2014) PROCEEDING
16 - 17 JUNE 2014. THE KUTA BEACH HERITAGE HOTEL, BALI INDONESIA
ISBN: 978-967-5705-14-4. WEBSITE: www.internationalconference.com.my
CONTRIBUTING FACTORS TO ENTREPRENEURIAL INTENTIONS AMONG

UNIVERSITY STUDENTS
Sarah Sabir Ahmad1
Rosliza Md Zani2
Azfahanee Zakaria3
Prof Dr Maznah Wan Omar4
Mhd Azmin Mat Seman5
sarah342@kedah.uitm.edu.my 1, rosliza568@kedah.uitm.edu.my 2, azfa292@kedah.uitm.edu.my 3,
maznah199@kedah.uitm.edu.my 4
Faculty of Business Management
Universiti Teknologi Mara (UiTM)
mhdazmin_76@yahoo.com5
PhD Candidate
Ministry of Higher Education
ABSTRACT
The Economic Transformation Programme or ETP has been introduced by Malaysia Prime Minister
recently as a comprehensive effort that will transform Malaysia into a high income nation by 2020.
Small Medium Enterprises (SMEs) will play a more significant role across the economy. For instance,
in education, agriculture, and electronics and electrical, SME participation will be actively encouraged
through financial support, better access to research and technologies, and improving infrastructure.
Many people are motivated to start new firms, but motivation alone is not enough, it must be
coupled with good information, a solid business idea and effective execution to maximize chances for
success. Entrepreneurship is a very important agenda in most of the Malaysia Five Year Economic
Plans. However little effort has been done to identify the entrepreneurial intention and development
on university students. Entrepreneurs and the creation of small business entities is the number one
21st century economic driver in the world today. Thus, this research intends to identify the issue of
entrepreneurial intentions among university students. Three main factors namely personality,
creativity and locus of control leading to the interest in entrepreneurship will be analysed using self
administered questionnaire. The final outcome of this study is the formation of a generic theoretical
model which is applicable, at least, in developing countries. The factors modelled from the present
study will help the government and the policy makers to identify ways to encourage the development
of more young and energetic entrepreneurs by enhancing the skills and possibilities for the the
students to be an entrepreneur.
Field of Research: Entrepreneuship, Behavior, Business, Entrepreneurial intention
1
INTRODUCTION
Globalization has enhanced the rise in entrepreneurship nationally and internationally. Reviews of
reports suggest that this trend will continue to flourish in the future. Entrepreneurship is a
significant source of wealth creation. For the past 50 years, more people are aware of the benefits of
entrepreneurship and thus more wealth has been created. According to the World Wealth report of
166

2007, the number of high-net-worth individuals, identified as entrepreneurs, increased by 11.4% in

the United States (World Wealth Report, Merill Lynch & Cap Gemini, 2007).
According to few researches done in the past, it is said that over 50% of small businesses fail in the
first year and 95% failed in the first five years. Few main reasons for the failure are lack of planning,
lack of differentiation from competitors and lack of effective marketing strategy. Generally most
entrepreneurs create small businesses. Small businesses currently employ more than half of the
countrys workforce and account for more than half of the private sectors economic output (SBA,
2007). These statistics confirm that entrepreneurs and the small businesses they create contribute
significantly to economic viability. Thus entrepreneurship is a phenomenon that deserves broadbase systematic studies.
Many business and economic leaders believe that school curriculum should foster not only
excellence in science and mathematics, but also creativity and an entrepreneurial mindset among
students (Kauffman Foundation, 2007). For advocates of entrepreneurship, the central task for
educators and policymakers is not only to provide students with key skills such as reading, math,
science and technology, but to also cultivate creative and entrepreneurial skills.
At the college level, advocates believe that universities need to integrate entrepreneurship and
creativity more deeply into their curricula, for both students majoring in business and other courses
as well (KF, 2007). This is to ensure their interest in entrepreneurship is channel properly and they
obtain all the guidance and information to encourage them to be a business owner after graduating.
2
PROBLEM STATEMENT
It is well known that a career in entrepreneurship offers significant opportunities for individuals to
achieve financial independence and benefit the economy by contributing to job creation, innovation,
and economic growth. Todays students are tomorrows potential entrepreneurs, which may explain
why a growing number of US universities offer courses and programs in entrepreneurship. However,
there is little understanding of the factors that affect students intentions of becoming
entrepreneurs and the relationship between entrepreneurship education and students
entrepreneurial attitudes and intentions (Souitaris et al 2007).
This study is significant because it focuses on entrepreneurial intentions among the bachelor
degrees students. The entrepreneurial intentions focus is important because it provides educators
and researchers with data contributing on identifying prospective entrepreneurs. Besides this study
is viable as there is a need to know and understand the context that promotes entrepreneurial
activities so that the study of entrepreneurship could be expanded and less restrictive. This is to
promote entrepreneurial endeavors to other discipline as well and encourage students from other
discipline to be involved in entrepreneurship with knowledge and skills needed.
3
RESEARCH QUESTIONS
1. What is the main factor that leads to entrepreneurial intentions among students?
2. How strong is the relationship of the factors to entrepreneurial intentions among students?
RESEARCH OBJECTIVES
1. To identify the main factor that leads to entrepreneurial intention among students
167

2. To determine the relationship of the factors to entrepreneurial intentions among students

5
LITERATURE REVIEW
5.1
Entrepreneurial Education
Prior research suggests that individuals attitudes are determined by exogenous factors (Krueger
1993: 6) like prior experience. However, those factors are not adequately explored. Specifically, the
role of education in affecting attitudes, norms, perceptions of controllability, and behavior merits
further investigation. Previous research indicates that entrepreneurship education can enhance an
individuals level of self-efficacy (Bandura 1986; Hollenbeck and Hall 2004; Wilson et al 2007).
Dyer (1994) and Wilson et al (2007) argued that entrepreneurship education can also increase
students interest in entrepreneurship as a career. Souitaris et al (2007) found that entrepreneurship
programs significantly raised students subjective norms and intentions toward entrepreneurship by
inspiring them to choose entrepreneurial careers.
Previous results concerning the relationship between education and entrepreneurship are very
mixed (Davidsson, 1989; Storey, 1994). In Sweden the case seems to be that traditionally, business
founders had lower than average formal educational attainment, whereas in recent years the new
business founders have had above average education (Wrneryd, Davidsson & Wahlund, 1987;
Aronsson, 1991). Comprehensive data from the US indicate that groups with lower education show
less of an interest in an entrepreneurial career (Reynolds, 1995; Reynolds & Miller, 1990). On these
grounds, a positive influence of education on intention is hypothesized.
5.2
Personality
The Big Five personality traits serves an integrative function because it can represent the various and
diverse systems of personality description in a common framework. Norman (1963) five-factor
personality model were initially labeled as:
1.
2.
3.
4.
5.
(E) Extraversion talkative, assertive, energy

(A) Agreeableness good-natured, cooperative, trustful
(C) Conscientiousness orderly, responsible, dependable
(N) Neuroticism calm, not neurotic, not easily upset
(O) Originality intellectual, polished, independent-minded
These factors eventually became known as the Big Five personality traits (Goldberg, 1981). Each
dimension summarizes a large number of distinct, more specific personality characteristics.
Research has shown that extraverted people are more likely to take on leadership roles and
extraversion is a predictor of job performance of managers and salespeople (Vinchur et, al, 1998).
Individual high in agreeableness tend to be courteous, forgiving and flexible in dealing with others.
Entrepreneurs who establish trusting, flexible and courteous relationship with their customers
should expect to reap the profits of repeat business. Within the entrepreneurial matters, Cable and
Shane (1997) propose that cooperation is a key factor in the entrepreneurs ability to secure capital
and future support from venture capitalists, increasing the chance for long-term survival of the
venture.
Those high in conscientiousness tend to be hardworking, achievement-oriented and preserving. This
factor has been identified as a consistent predictor of job performance across occupations involving
168

managing other and sales performance (Hurtz & Denovan, 2000). For entrepreneurs, emotional
volatility and worrying are expected to be obstacles (Vesper, 1990) and individuals who are not up to
the task of maintaining optimism about the result of their effort will negatively affect the
performance of their venture.
The attributes of intelligent, broad-mindedness and originality have more chances to start new
businesses and better working relationships. Openness to new ideas and experiences will led to
discover innovative ways of protecting the firm from competition and may be the key factors in the
success of the venture (Bird, 1989).
5.3
Creativity
High creativity in running a business is a need for an entrepreneur. An entrepreneur should be ready
to keep thinking and finding new opportunity in coping with problems and expanding the business.
Scott (1999) in his study on 36 business start-ups found the importance of creativity in starting up a
business. Creative entrepreneurs can produce creative innovations (Riyanti, 2007) which help to
expand the business.
In a study, Khoo and Butler (2005) conducted with entrepreneurs in Hong Kong, creativity was
determine as a key link to entrepreneurial behavior. It was determine that part of the creative
process involves linking unassociated bits of information into new combinations. This new
knowledge can serve as potentially useful for training entrepreneurs and students to be more
creative in ways to make entrepreneurial behavior more likely.
5.4
Locus of Control
Locus of Control is about an individuals perceptions concerning his/her ability to influence events in
life. Locus of control can be divided into two: internal and external. Those with internal locus of
control believe that they are in control of their life. To them, the accomplishment of goal depends on
their own ability rather than on luck (Kuip and Verhaul, 2003). On the other hand, individuals with
external locus of control believe that the surroundings such as destiny and luck are in charge (Begley
and Boyd, 1987). They ascribe control of events to outside forces (Spector, 1997).
Muller and Thomson (2000) concluded that internal locus of control is an entrepreneurial
characteristic, and Utsch and Rauch (2000) supported this finding by showing the importance of
locus of control in venture performance. In fact, entrepreneurs tend to have higher internal locus of
control than non-entrepreneurs (Shapero, 1975; Diaz and Rodriguez, 2003).

169
6

THEORETICAL FRAMEWORK
Personality
Creativity
Independent
Locus variables
of
Control
Entrepreneurial
Intention
Dependent Variable
Figure 2.1
As a result of the literature review, a research model as illustrated in Figure 2.1 has been designed.
Past literature reveals that theoretical and empirical research has associated personality and
psychological characteristics such as locus of control and innovativeness (creativity) with
entrepreneurial intention. Thus, Figure 2.1 presents the model that will be explored in this research
where personality, creativity and locus of control are considered as variables to predict
entrepreneurial intention.
7
HYPOTHESES
In order to test the entrepreneurial model (Figure 2.1), a set of research hypotheses was formulated
as follows:
H1: There is a significant relationship between personality and entrepreneurial intention.
H2: There is a significant relationship between creativity and entrepreneurial intention.
H3: There is a significant relationship between locus of control and entrepreneurial intention.
H4a: Personality is the most dominant factor that leads to entrepreneurial intention.
H4b: Creativity is the most dominant factor that leads to entrepreneurial intention.
H4c: Locus of control is the most dominant factor that leads to entrepreneurial intention.
8
8.1
METHODOLOGY
Sample and Population
The population of this study were students in Universiti Teknologi Mara (UiTM) specifically the
Bachelor Degree students. The respondents which covers various demographic factors such as ages,
genders, marital status and courses was selected to provide better insight to the present study. A
sample size of 174 participants was generated from various courses in UiTM Kedah by using non
probability sampling technique in which units of the sample are selected on the basis of convenience
or personal judgment sampling. Using this sampling technique was to ensure every unit in the
population had an equal chance to be selected as the sample of this study. This method was also
170

used in order to obtain a large number of completed questionnaires quickly and economically, due
to time and budget constraints.
8.2
Data Collection Method
The instrument that was used to collect data for the present study was self-administered
questionnaire which contain 50 questions. The questionnaire was divided into five sections. The first
section had 4 questions. It contains five questions which were on respondents age, gender, marital
status and courses.
The second until the fifth section contains questions which included items of the independent
variables which are the factors leading to entrepreneurial intentions among students; locus of
control, creativity and personality respectively.
The final section included questions from the dependent variable which is entrepreneurial intention
among students. The questionnaire contains overall questions on the readiness of the respondents
to become an entrepreneur.
8.3
Data Analysis Procedure
The data analysis of the present study employed SPSS statistical software version 21.0. The statistical
tools adopted in this study were frequency analysis and correlation analysis and multiple regression
analysis.
9
9.1
FINDINGS
Respondents profile
From the 149 respondents received in this sample out of 150 questionnaires that was distributed, a
wide range of demographical characteristics was examined. On the issue of gender, the sample was
predominantly females with 70.53% compared to men 29.5%. This figure could be due to the
random distribution of the questionnaire and did not directly portray the true nature of the
population at large.
A look at the age factor showed the majority of the respondents were between 21-29 years of age
which is 98.7%, leaving only 1.3% for the respondents aged less than 21 years old. This was again
due to random distribution of the questionnaire which might not indicate the whole population.
The respondents marital status showed that a large number 98% were single, while it was followed
with only 2.0% were married respondents. There were no respondents in the divorced category.
Based on the cross tabulation of gender and marital status, we noticed that more single women
were the respondents of the present research.
9.2
Correlation Analysis
For the present study, Pearson correlation coefficient was used to measure the strength of
association among the variables used. As shown in Table 4.1, the paired variables recording
correlation with double star had the strongest relationship and produced significant results. For
example, the correlation between dependent variable (entrepreneurial intention) and the all the
independent variables were very significant. Besides that, it also showed that the interrelation
171

among the variables used. As such these variables showed significant relationships and had strong
possibility to support the hypotheses testing in the regression analysis.
Table 4.1
Pearson Correlation results
1
2
1 Entrepreneurial Intention
2 Locus of Control
0.49**
3 Creativity
0.64**
0.66**
4 Personality
0.68**
0.72**
**Correlation is significant at the 0.01 level (1-tailed)
9.3
0.71**
Resgression Analysis
From the result which is showed in Table 4.4, two variables were significantly associated with
entrepreneurial intention (p = 0.005). Therefore, these independent variables have significant
relationship with entrepreneurial intention among students and with this, hypotheses H1 and H2 are
accepted. The highest standardized beta value of 0.520 indicated that personality is the most
dominant factor that leads to entrepreneurial intention among students. Thus Hypothesis 4a is
accepted.
Table 4.2
Regression analysis
Variables
Independent variables:
Personality
Creativity
Locus of Control
R2
R2 Change
Adjusted R2
F Change
Sig- F
Notes: **p < 0.00, *p < 0.05
9.4
Beta
0.520**
0.275**
- 0.127**
0.557
0.557
0.542
35.98
0.00
Hypotheses Testing
Summary of hypotheses
H1
H2
H3
H4a
Hypotheses
There is a significant relationship between personality and
There is a significant relationship between creativity and
There is a significant relationship between locus of control and
Personality is the most dominant factor that leads to entrepreneurial
intention.
Result
Accepted
Accepted
Rejected
Accepted
172
H4b
H4c

Creativity is the most dominant factor that leads to entrepreneurial

intention.
Locus of control is the most dominant factor that leads to
Rejected
Rejected
10 CONCLUSION AND RECOMMENDATION

Entrepreneurial intention is a decision to form a new business venture that is planned rather than
being conditioned. An individual may have the potential of being entrepreneur because of own
competency and self-efficacy but may not make the transition into entrepreneurship because of a
lack of intention (Krueger et al, 2000). There were many studies conducted on entrepreneurial
intentions, among others Muller and Thomson (2000), Diaz and Rodriguez (2003), Ayodele (2013)
and many more.
Overall, the empirical evidence from the present study found that personality and creativity have
direct significant positive relationship to entrepreneurial intention, while curiosity is found to have a
negative relationship. Out of these three variables, personality is the most dominant factor that
leads to entrepreneurial intention among students with the highest standardized beta value of
0.520.
The result is not surprising as many previous studies have proven that those with high personality
traits (extraversion, agreeableness, conscientiousness, neuroticism and originality) are successful
entrepreneurs. This is because extraverted people are more likely to take on leadership roles. To be
an entrepreneur, one has to be a leader. An extraverted person is also being assertive, that is a form
of behavior characterized by a confident declaration or affirmation of a statement. An entrepreneur
must be confident to say what he thinks.
The study also revealed that creativity is having a positive relationship with entrepreneurial
intention. Someone who is creative can be a successful entrepreneur as they are able to generate
new ideas, concept or alternatives. Creativity is considered as the act of making something new,
different and original. Creative entrepreneurs can produce creative innovations (Riyanti, 2007) which
help to expand the business. Apart from that, entrepreneurial leaders and their teams need to be
creative to identify opportunities in market and to generate patents by implementing creative ideas
(Long, 1983).
There are some suggestions for the future researchers on similar topic. A thorough and in depth
study should be carried out by considering respondents from various background throughout
Malaysia. A present study is only focusing on undergraduate students of a local university in
Malaysia, which is not representing the whole situation. Thus, future research should take larger
samples with different background to get clear and concrete evidence.
Since the present study incorporated personality, creativity, locus of control, curiosity and risk taking
as the predictor variables, future research is suggested to consider other factors determining
behavioural intention. Future research may also look into some theories associated with behavioural
intention and apply them in the context of entrepreneurial intention. The most common theories
are the Theory of Reasoned Action (TRA) and the Theory of Planned Behaviour (TPB). This will enable
researchers to examine a wider scope of hypotheses and better understanding of predictor factors.
173

11 Reference
Ayodele, K.O. (2013). Demographics, entrepreneurial self-efficacy and locus of control as
determinants of adolescents entrepreneurial intention in Ogun State, Nigeria, Journal of Educational
Research and Studies, 1(2): 12-16.
Bandura, A. (1986). Principles of behavior modification. New York: holt, Reinhart and Winston.
Begley, T. M. and Boyd, D. (1987). Psychological characteristics associated with performance in
entrepreneurial firms and small businesses, Journal of Business Venturing, 2: 79-93.
Davidsson, P. (1989). Continued Entrepreneurship and Small Firm Business, Stockholm School of
Economics, Stockholm.
Diaz, F and Rodriguez, A. (2003). Locus of control, nAch and values of community entrepreneurs,
Social Behavior and Personality, 31(8): 739-749.
Goldberg, L. R. (1981). Language and individual differences: The search for universals in personality
lexicons. IN L. Wheeler (eds.), review of personality and social psychology, Baverly Hills, CA: Sage.
Kauffman Foundation (2007). Retrieved January 24, 2007, from Kauffman Foundation Website:
http://www.kauffman.org/items.cfm?itemID=704
Khoo, S. & Butler, J. (2005). Attitudes, intentions and participation: a longitudinal report of
Australian youth. The Australian Council for Educational Research, 2005.
Kuip, I. and Verhaul, I. (2003). Early development of entrepreneurial qualities: The role of initial
education, EIM Business and Policy Research, retrieved from www.entrepreneurship-sme.eu/pdfez/N200311.pdf
Mueller, S. L. and Thomsan, A. S. (2000). Culture and entrepreneurial potential: A nine country study
of locus of control and innovativeness, Journal of Business Venturing, 16: 51.75.
Riyanti, B. P. D. (2004). Factors influencing the success of small-scale entrepreneurs in Indonesia.
Ongoing Themes in Psychology and Culture.
Scott, D. (1999). Do you need to be creative to start a successful business? Management Research
News, 22: 26-42.
Spector, P. (1997). Job Satisfaction: Application, Assessment, Cause and Consequences, London: Sage
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Shapero, A. (1975). The displaced, uncomfortable entrepreneur, Psychology Today, 83-88.
Utsch, A. and Rauch, A. (2000). Innovativeness and initiative as mediators between achievement
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Vesper, K. H. (1990). A new direction or just a new lebel? In J.J. Kao & H. H. Stevenson (Eds.),
Entrepreneurship: What it is and how to teach it (pp. 62-76). Boston, MA: Havard Business School.
Willson, T. A.(2007). Assessment of the five-factor model of personality. Journal of Personality
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165

4th INTERNATIONAL CONFERENCE ON MANAGEMENT

CONTRIBUTING FACTORS TO ENTREPRENEURIAL INTENTIONS AMONG

4th INTERNATIONAL CONFERENCE ON MANAGEMENT

2007, the number of high-net-worth individuals, identified as entrepreneurs, increased by 11.4% in

4th INTERNATIONAL CONFERENCE ON MANAGEMENT

2. To determine the relationship of the factors to entrepreneurial intentions among students

(E) Extraversion talkative, assertive, energy

4th INTERNATIONAL CONFERENCE ON MANAGEMENT

4th INTERNATIONAL CONFERENCE ON MANAGEMENT

16 - 17 JUNE 2014. THE KUTA BEACH HERITAGE HOTEL, BALI INDONESIA

4th INTERNATIONAL CONFERENCE ON MANAGEMENT

Data Collection Method

Data Analysis Procedure

4th INTERNATIONAL CONFERENCE ON MANAGEMENT

4th INTERNATIONAL CONFERENCE ON MANAGEMENT

Creativity is the most dominant factor that leads to entrepreneurial

10 CONCLUSION AND RECOMMENDATION

4th INTERNATIONAL CONFERENCE ON MANAGEMENT

4th INTERNATIONAL CONFERENCE ON MANAGEMENT

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