Entrepreneurial Intentions

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Business & Management Quarterly Review, 2(3), 33-38, 2011
ISSN 2180-2777


Chin Tee Suan
Multimedia University, Malaysia

Yeow Jian Ai
Multimedia University, Malaysia

Kavitha Raman
Multimedia University, Malaysia

Koe Wei Loon
Universiti Teknologi MARA Melaka, Malaysia

Joenathan Tanumihardja
Multimedia University, Malaysia


The purpose of this study is to examine the entrepreneurial intentions among university students. The
study examines the personality traits, family and individual background, education and experience and
also perceived desirability. A total of 200 university students took part in this study. It was found that
personality traits such as locus of control and the need for achievement had a stronger correlation in
comparison with other elements such as education. The background of the student plays an important
role as well. Where of the parents is involved in business, the student will be influence by it.
Keywords: Entrepreneurship, intentions, motivations, sustainability, business schools, personality traits

The perceived importance of entrepreneurship to the growth of Malaysia's economy is evidenced by the
sheer amount and variety of supporting mechanisms and policies that exist for entrepreneurs, including
funding, physical infrastructure and business advisory services. Despite knowing such importance of
entrepreneurship, a recent article reported Malaysia's level of entrepreneurship falls far behind Taiwan
Global Entrepreneurship Monitor (2008). The Malaysian government is encouraging graduates to create
and start-up small businesses with an aim to reduce the graduates unemployment rate. This will make
the graduates to create employment opportunity rather than seeking employment opportunity. However,
entrepreneurship is rarely considered to be a career option among the Malaysian graduates (Norashimah
and Salmah 2009). The number of graduates that enters the job market each year increases. Demand
exceeds the supply of jobs. Since academic qualifications do not guarantee a person to a job automatically
upon graduation, there is a need to look elsewhere. Entrepreneurship has been acknowledged to be a
solution to the rising unemployment (Kamariah et al 2004; Salmah 2006). In a study of undergraduate's
career preferences in Singapore, it was found that most undergraduates favour employment with the
multi national corporations rather than being self employed or opening their own businesses (Hee and
Teng, 1994). Hence, the purpose of this study is to examine the entrepreneurial intentions and
motivations among university students.

Entrepreneurship is the process of creating something new with value by devoting the necessary time
and effort, assuming the accompanying financial, psychic, and social risks, and receiving the resulting
rewards of monetary and personal satisfaction and independence (Hisrich and Drovensek, 2002).
Research on entrepreneurship has traditionally taken two different paths. The first approach which is
the traits approach examined the personal attributes of business founders to see what makes them
different from the general population (Gartner 1989). This "traits" approach found that some
psychological variables have a powerful effect on entrepreneurial intention. These include: need for
achievement, risk taking (Tan, 2001), ambition, desire for independence (Lee and Chan, 1998) and
responsibility. The second path focused on the external (environmental) conditions that seem to generate

Business & Management Quarterly Review, 2(3), 33-38, 2011
ISSN 2180-2777

variations in the number of business start-ups over time. Ecologists call this the "rates" approach
(Aldrich, 1990) in which governments keep rules and regulations at a minimum, offer tax reductions, and
provide consultants to increase the likelihood of new business start-ups. McClelland (1985) was the
pioneer in identifying the "need for achievement" motivation in the literature. The need for achievement
define a person's desire either for excellence or to succeed in competitive situations is a key personal
attribute of successful entrepreneurs he stated that people can obtain more achievement and therefore
become satisfied as they reach higher level of positions in organizations. Kuratko et al. (1997) concluded
that individuals establish business when they are motivated by personal goals. McClelland suggested
that individuals with a strong achievement motive often find their way to entrepreneurship and succeed
better than others at such endeavors. McClelland (1985) also argued that individuals who strive to
achieve gravitate toward situations in which they can attain results through their own efforts, pursue
moderately difficult goals, and receive prompt feedback on how they are doing. Research has shown that
the desire to achieve has been a powerful predictor of entrepreneurship (Collins et al., 2004).
Locus of control refers to the degree to which an individual perceives success and failure as being
contingent on his/her personal initiatives. Initiative and the skills of entrepreneurship is the passport for
an entrepreneur's success. They must have the ability to see, analyze a situation and take position action
against something for prevention. Besides that, they must also be able to accept uncertainty and risk.
According to Gatewood, Shaver and Gartner (1995), an internal locus of control is more congenial to
entrepreneurial venturing and success. If one does not feel competent to change the situation or the
environment, one will unlikely to embark on a project that requires changes to be made in both. Some
research on entrepreneurs indicates that certain demographic variables are related to entrepreneurship.
Scott and Twomey (1988) proposed that parental role models and experience led to the perception of
oneself as an entrepreneur. Self-perception, a triggering event, and a business idea led to an
entrepreneurial career preference. Students whose parents owned a business showed a significantly
higher preference for self-employment and lower preference for employment in a large or small firm. The
combination of psychological traits with background factors makes some individuals more likely
entrepreneurial candidates than others. There is evidence that business owners tend to have strong
supporters whereby the support from their family seems to be particular importance. Support from
family and friends are critical particularly in shaping the perceived desirability of a particular business
venture as well as providing financial assistance. In terms of perceived support, individuals might be
willing to engage in entrepreneurship activities if they perceive that the environment of business is
favourable. This is known as the trigger effect.
The idea of introducing entrepreneurship studies at a very young age is vital to the development
of the students' mindset toward entrepreneurship as a choice of career. Entrepreneurship education has
been reported as having a positive influence on entrepreneurial tendency (Henderson and Robertson,
1999.) It also positively affects the potential entrepreneur's perception of job security and attitudes
towards status, opportunity for financial gain, job satisfaction, and positive view of economic outlook and
awareness of the economic climate. When a student achieves at school in the educational setting it
assists to promote higher aspirations. However, Schoon and Parsons (2002) also found evidence of
students not doing so well at school but still developing high aspirations for the future. Entrepreneurial
experience refers to personal experience in a family business, family involvement in a business and/or
participation in startups (Ajzen and Fishbein, 1980). Experience could also be as a result of inertia that
would guide human behaviour Shapero and Sokol (1982) contend that for intentions to crystallize, it
may be first necessary for something to disrupt a person's inertia. Circumstances such as losing a job
may trigger previously unrecognized entrepreneurial abilities.
Significant progress has been made in understanding the impact of personal background factors
such as prior experience and family background on the development of perception of entrepreneurship
and intention to start a business (Krueger, 1993). Drennan, Kennedy, and Renfrow (2005) found that
those who reported a positive view of their family's business experience perceived starting a business as
both desirable and feasible. They found that other childhood experiences that involved facing adversity
or frequent relocation also had a positive effect on individuals' perceived autonomy and attitude toward
self-employment. At the same time, it can be argued prior exposure in the form of direct experience in
starting or attempting to start a new business would affect attitudes and perceptions about
entrepreneurship as a career. According to Brush et. al. (2003), Perceived desirability refers to a person's
will power, his or her personal preference, motivation traits and self-determination. It is the most
powerful force of human behavior. Will power manifests an absolute commitment to achieving his/her

Business & Management Quarterly Review, 2(3), 33-38, 2011
ISSN 2180-2777

goals. It is a deep personal attachment to an intention. Research has shown that perception desirability
has a positive effect on entrepreneurial intention (Mair and Naboa, 2005). Shapero and Sokol (1982)
hypothesize that perceptions of the desirability of starting a business are influenced in part by culture,
but also by family, peers and colleagues who provide role models and mentors offering encouragement.

This research is designed chiefly to explore the relationships between Entrepreneurial Intentions that
are derived from Perceived Desirability, personality traits, family background and education and
experiences that affect the behavior of the entrepreneur. The focus of this research is on university
students and the factors that motivate them to be an entrepreneur. Students were randomly identified
based on the different field of studies ranging from Engineering to Business. A total of 200 students
participated in this study. The tool used to collect the data is the questionnaire. The questionnaire
consisted of 39 questions: Demographic questions (5 items), Personality (Need of Achievement) (5 items),
Personality (Locus of Control) (5 items), Family and individual background (5 items), Education (5
items), Experience (5 items), perceived desirability (5 items), and entrepreneurial intention (4 items).
The test of reliability was done using Cronbach Alpha.

Table 1: Reliability Test

Cronbach Alpha

Personality ( Need of Achievement )

Personality (Locus of Control )

Family & Individual Background



Perceived Desirability

All variables
According to Bowling (1997), an alpha above 0.5 is considered to be good in term of internal
consistency, whereas an alpha of 0.7 and above is considered as satisfactory by Sekaran (2003). In this
research the overall Cronbach alpha is 0.839, which is considered to be good (see table 1).

Table 2: Descriptive Analysis (n=200)

Less than 20
More than 26
South East Asia
Country of origin
Middle East
Business and Law
Info. Sys. and Technology

As seen in table 2, a majority of the respondents were males and they are aged between 21 to 25
years old. They are studying the courses offered in the Business and Law faculty. A majority of the
students are from South East Asia which includes Malaysia, Indonesia and Thailand. As seen in table 3,
it was found that Age and Faculty had significant relationships with the Entrepreneurial Intentions of
an individual. Respondents from the Business and Law faculty have significant relationships as they
study many business related subjects while those from the non business faculties, they have less
business related subjects. Their p values are less than 0.05; 0.049 and 0.017 respectively. Gender and
Country of Origin had no significant relationships with the Entrepreneurial Intentions of an individual.


Business & Management Quarterly Review, 2(3), 33-38, 2011
ISSN 2180-2777

Table 3: Total Entrepreneurial Intention against Demographic variable

Std. Deviation Std. Error Mean


Less than 20
Between 21 to 25
More than 25

Business and Law
Information Systems and Technology
Country of Origin

South East Asia
Middle East

As per table 4, Personality (Need of Achievement) was found to have a positive relationship towards the
entrepreneurial intention, r = 0.359 and p = 0.000. This indicates that the higher the motivation for
achievement, the higher the intention to be an entrepreneur. The findings support studies conducted by
Johnson (1990). McClelland (1985) argued that individuals who strive to achieve, gravitate toward
situations in which they can attain results through their own efforts, pursue moderately difficult goals,
and receive prompt feedback on how they are doing. Research has shown that the desire to achieve has
been a powerful predictor of entrepreneurship (Collins et al., 2004).The positive correlation (r = 0.359)
reaffirms the studies.
Table 4: Correlation Analysis

Total of
Pearson Correlation

Total of Personality
Sig. (1-tailed)
(Need of Achievement)

Total of Personality
Pearson Correlation

Sig. (1-tailed)
Of Control )

Pearson Correlation

Total of Family and
Sig. (1-tailed)
Individual Background N

Pearson Correlation

Total Experience
Sig. (1-tailed)

Pearson Correlation

Total of Perceived
Sig. (1-tailed)

In terms for Personality (Locus of Control), results (r = 0.356) shows that there exists a positive
relationship between Locus of Control and the Entrepreneurial Intentions. Locus of control determines
the success of an entrepreneur. Initiative and the entrepreneurship skills are the passport to success. By
having the ability to analyze situations, handling uncertainty, and controlling oneself as well as the
environment surrounds them does give the person the confidence to venture into a business and nail the
market. The finding of the analysis shows that family and individual background has a positive

Business & Management Quarterly Review, 2(3), 33-38, 2011
ISSN 2180-2777

relationship with the entrepreneurial intention. This finding is supported by Tkachev and Kolvereld
(1999). This implies that the role of close support that should not be neglected in nurturing the
emergence of entrepreneurs. The impact of support from family and friends on entrepreneurship
tendency is more obvious in a collectivist culture like Malaysia that emphasizes on cohesiveness. Support
from family and friends are important because graduates startup a business based on family resources
and they are unable to use bank loans (Vasiliadis and Poulios, 2007). Experience does have a significant
positive relationship with the entrepreneurial intention. The finding implies that prior exposure to
entrepreneurship in practice, both directly or indirectly in business, it is significantly linked to their
attitudes, norms, and perceived behavioral control regarding entrepreneurship, causing the individual to
have a higher intention to be an entrepreneur. It also suggests that the experience that person gain from
the practice increases the individuals' confidence. This finding is fully supported by Anuradha Basu and
Meghna Virick (2008). It was found that perceived desirability as a motivational factor has a positive
relationship toward entrepreneurial intention. Perceived desirability refers to a person's will power, his
or her personal preference, motivation traits and self-determination, and can be identified in an
individual when one manifests an absolute commitment to achieving his/her goals, and in this case, the
entrepreneurial intention. This result is supported by Mair and Naboa (2005).

The findings demonstrated the important factors that can motivate and influence the persons' intention
toward entrepreneurship. The existence of significant positive relationship between all components of
affective factors and entrepreneurial intention, provide evidence that Personality (Need of Achievement,
Locus of Control), Education, Experience, Family and Individual Background, and Perceived Desirability
were able to influence a person's motivation to be an entrepreneur. The positive impact of the social
environment highlights the importance of developing the appropriate national policies, for example,
design programs that would help to promote a more positive image of entrepreneurship in the minds of
the targeted group. In such programs, successful entrepreneurs should be called upon to act as role
models to share their experience and knowledge. For future research purposes, it is suggested that a
more in depth composition of larger samples be used to improve the analysis in terms of the accuracy.
The samples that were used in this research are limited to a single point in time. Future research in
entrepreneurship needs to take into account the changes of attitude toward entrepreneurship. Malaysian
perception toward entrepreneurship as reflected from the mass media appears to be changing.

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