With the passage of moment, many developed countries are facing
problem of unemployment and fresh graduates have faced serious problems to obtain
reasonable job due to inexperience’s. Most of academic institutions and
governments have shown there interests in entrepreneurship as it have the command
to create financial and public development, provide employment opportunities
and innovations in the countries. An entrepreneurial motivation is process to
run a new business and bring some modernization, creativity and innovativeness
in existing businesses. (Tanvee, Zafar, & Rizvi, 2013)
The motivations of students towards entrepreneurship has become an
interesting topic. Many studies have been conducted to find out major
motivations for gearing towards entrepreneurship and to examine how inclination
for self employment can be created. Today, universities are playing leading
role for the development of entrepreneurship culture, and nurture some
necessary entrepreneurial skills and behavior to take on business in upcoming
life. The aim of this study is to examine the motivational factors that
contribute for adoption of entrepreneurial career. Some of major motivational
factors for entrepreneurial intention are Sense of achievement, sense of
freedom, desire for wealth, risk taking, innovation, and sense of success (Nor &
Yufiza, 2004).
An entrepreneur is the person who tries
something new, organizes production, undertakes risk and handles economic
uncertainty. He is a potential and enterprising individual, endowed with
special ability to innovate, or imitate, interested in advancing technology and
willing to assume the risk involved in it. He is the man who knows the art of
changing the production function for using the economic potential of various
factors of production. Thus, under present day condition, entrepreneurship is
the purposeful activity of an individual or a group of associated persons
initiating, prompting and maintaining business activity for the production of
wealth and distribution of goods and services with a pecuniary motive or such
benefits in the given social and political conditions. The rate of economic
progress of a nation depends upon its rate of innovation which in turn depends
upon the distribution of entrepreneurial talent in the population. Technical
progress alone cannot lead to economic development, unless technological
breakthrough is put through economic use by entrepreneur (Krishna,
2013).
The
emergence and development of entrepreneurship is an important phenomenon in
contemporary economies. Entrepreneurship is strongly linked to small and medium
sized enterprises (SMEs), which are the main developing force of the developed
market economies. Several peoples have several views about the word motivation.
Motivation is the core of biological, cognitive, and social regulation. They
also stated that it involves the energy, direction, and persistence of
activation as well as intention. This indicates that goals and motives play a
role in predicting human behavior and that a link between intentions,
motivations, and behavior indeed exists (Ryan & Deci, 2000).
Humans
have an important role in the entrepreneurial process. Human behavior is the
result of motivational factors and cognitive factors that include the ability,
skill and intelligence. Although external factors determine the level of
success in the entrepreneurial process, but human motivation has an important
role in the development of the entrepreneurial process. Human Motivation
determines the success of entrepreneurial process. Strong motivation to succeed
has different weak motivations on entrepreneurial process. Research that
explores the motivation to undertake entrepreneurial process is still limited (Setiawan
& Nimran, 2013).
Entrepreneurship
involves human agency. The entrepreneurial process occurs because people act to
pursue opportunities. People differ in their willingness and abilities to act
on these opportunities because they are different from each other. We argue
that the variation among people in their willingness and ability to act has
important effects on the entrepreneurial process. Motivational differences also
influence the entrepreneurial process. For example, such things as variation
across people in their perceptions of risk and opportunity influence
entrepreneurial decisions (Shane et al., 2003).
(Herron
& Sapienza, 1992) stated that, “the motivation plays an important role in
the creation of new firms, products, organizations, theories of organizational
creation”.
(Herron
& Sapienza, 1992) these two authors stated that, “Because motivation plays
an important part in the creation of new organizations, theories of
organizational creation that fail to address this concept are incomplete”.
Entrepreneurial
Motivation is the drive of an entrepreneur to maintain an entrepreneurial
spirit in all their actions. Motivation implies an inner state that causes a
person to act towards the attainment of goals. It is an inspirational process
of steering an individual’s drives and actions towards goals. It causes a chain
reaction. Motivation is an internal psychological feeling which produces goal
directed behavior. It is an ongoing process because human needs are never
completely satisfied. Motivation is dynamic force setting a person into motion
or action. The word motivation is derived from motive which is defined as an
active form of a desire, craving or needs and desires effect of change the
behavior which becomes goal oriented (Krishna, 2013).
This
study guides the people who have motivation to become an entrepreneur about the
outcomes of successful entrepreneurs. It will help the people especially the
fresh business graduates to understand the factors which create barriers while
becoming an entrepreneur and he will analyze the factors which motivate common
people to become an entrepreneur. So he takes corrective action while becoming
an entrepreneur. The finding in this study can be used by other researchers
which they use in their literature.
Being
an entrepreneur is not a difficult task but there are some certain areas which
create problems to the people while becoming an entrepreneur. Risk, failure,
lack of capital and lack of information about the market problem are the
factors which affects the entrepreneurial motivation. If these problems are
unsolved the future of entrepreneur will be in danger.
A. To
determine the factors which motivate people to become an entrepreneurs?
B. To
determine the relationship between motivation and entrepreneurship.
A. What
are the factors which create motivation in the people to become an
entrepreneur?
B. What
are the relationship between motivation and entrepreneurship?
This
study is conducted in the Gilgit city but due to the time constraints the
researcher is going to limit his study to the students of the university. So
the area of this study is limited. If we expand our area of study by increasing
the number sample size (university student) to sole proprietor, this will makes
the study delimited. The variable in
this are limited. So it can be delimited if the variables are expended.
This chapter will start by discussing
entrepreneurship using the literature in the field. General motivation to
become an entrepreneur is discussed. The review looks at the literature on
motivations for entrepreneurship, looking at both empirical research and
theories developed under the topic of entrepreneurship motivation.
Entrepreneurs were people who recognized
opportunities and created new business organizations. Others have viewed
entrepreneurs as individuals who are critical to increasing a firm’s
productivity and help it recover from an economic slump. Entrepreneurship has
also been described as a main reason for innovation (Bygrave & Hofer,
1991).
Entrepreneurs like people who were
willing to take risks, and bear uncertainty to get a reward. Entrepreneurs like
people aware of opportunities that can generate (Deakins, 1999).
The term “entrepreneur” has been
associated with the start of the new business and sometimes also with
innovation as an additional criteria. The entrepreneur is the individual person
who creates the business, puts it to work and makes it survive.
Entrepreneur helps to investigate the
process of business creation (Veciana, 1988).
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 (Carsrud &
Brännback, 2011).
an entrepreneur is one who brings resources, labor, materials, and
other assets into combinations that make their value greater than before, and
also one who introduces changes, innovations, and a new order (Carsrud &
Brännback, 2011).
Entrepreneurs occupy a central position in a market economy. For
it's the entrepreneurs who serve as the spark plug in the economy's engine,
activating and stimulating all economic activity. The economic success of
nations worldwide is the result of encouraging and rewarding the
entrepreneurial instinct (Bygrave & Hofer, 1991).
A society is prosperous only to the degree to which it rewards and
encourages entrepreneurial activity because it is the entrepreneurs and their
activities that are the critical determinant of the level of success,
prosperity, growth and opportunity in any economy. The most dynamic societies
in the world are the ones that have the most entrepreneurs, plus the economic
and legal structure to encourage and motivate entrepreneurs to greater
activities (Campbell, 1992).
The role of the entrepreneur can be seen
from the perspective of two important theories: economic theory and empirical
theory (Rapaso, Do Paco & Ferreira, 2008). According to (Davidsson &
Wiklund, 1999) the roles of entrepreneurs according to the economics theory are
following:
·
the
person who undertakes risk associated with uncertainty
·
the
person who supplies the financial capital
·
innovator
·
decision
maker
·
industrial
leader
·
manager
·
organizer
of economic resources
·
business
owner
·
locator
of resources
According
to (McClelland, 1961) an entrepreneur has following roles:
·
original
and innovative
·
takes
individual responsibility
·
plans
on long term basis
There are numbers of motivational variables which develop the
intention of students to create his/her venture. These variables can be
categorized into demographic variables and psychographic variables.
The literature on entrepreneurial motivation is scare and fragmented.
Entrepreneurial motivations refer to the desire or tendency to organize,
manipulate and master organizations, human beings or ideas as quickly and
independently as possible (Johnson, 2005). Individuals with
high-entrepreneurial motivation are to be more likely to become entrepreneurs
(Shane et al., 2003).
Beliefs
which are related to perceived high-entrepreneurial motivation on a
country-wide level may promote individuals’ attitude towards entrepreneurship.
Beliefs related to the role of formal and informal institutional environments
may influence individuals’ attitudes towards entrepreneurship. If a person
believes that the outcome of his/her entrepreneurship activity in a given
environment will be desirable, they are likely to have a positive attitude
towards entrepreneurship (Lent et al, 2000). If a person perceives doing
business in a country as being difficult,
unattractive, risky, or bringing low benefits, his/her attitude towards
entrepreneurship might be negative (Bullvag et al, 2010).
(Benzing,
Chu & Kara, 2005) in their study of entrepreneurs in Turkey stated that,
among other things, presented a comparative results of numerous research on
entrepreneurs’ motivating factors in different countries. In Romania, income
and job security needs were stronger motivators than self-satisfaction and
personal needs. On the other hand, entrepreneurs in India were most strongly
motivated by the desire for autonomy and then to increase their income.
Ugandan
entrepreneurs are motivated by “making money” (Bewayo, 1995). A study of entrepreneurs
in Kenya and Ghana found that the strongest two motivators for the
entrepreneurship were to increase income and to provide employment to them
(Chu, Benzing, & McGee, 2007). The
research found that microenterprise owners in West Africa were motivated by a
desire to satisfy psychological needs – food and shelter (Roy and Wheeler,
2006).
Motivations are not the only things that influence these
transitions. Cognitive factors, knowledge, skills, and abilities (KSAs),
certainly matter. Allocation is the result of the combination or integration
motivation and cognition. First, the entrepreneurs need to have
some knowledge, especially of the industry and of any relevant technology that
is critical to success. The necessary skills will depend on the circumstances,
but they may include such factors as selling and bargaining, leadership,
planning, decision making, problem solving, team building, communication, and
conflict management. Third, the entrepreneur needs to have the requisite
abilities, including intelligence (Schmiemann, 2008).
According to (Roy and Wheeler, 2006) Environmental
conditions also matters. First, opportunities may interact in interesting ways
with the attributes of people. Second, the willingness to engage in
entrepreneurial activities depends on such things as the legal system of the
country in which the entrepreneur operates, the age of the industry, the
available capital in the economy, the condition of capital markets, and the
state of overall economy. We believe that these factors are important, but that
it might also interesting to know whether motivations of particular people lead
to different types of entrepreneurial action under different environmental
conditions.
According
to (Baum, 2004) profit is one the most leading reason which motivates people to
become an entrepreneur. But there are several other factors which motivate
people to become an entrepreneur in such as high profit maximization. These are
many other factors which effects motivation so more information is needed to be
known.
The
entrepreneurial motivations determine the entrepreneurial process. Although the
role of the environment and opportunities is important, the role of humans and
motivation not get much attention. Entrepreneurial motivations are classified
into two, namely: general and task-specific. Motivation general consists of;
need for achievement, locus of control, vision, desire for independence,
passion, drive. Meanwhile, specific task consists of; goal-setting, and
self-efficacy. Both types of motivation determine the understanding and
development opportunities so as to achieve success in the entrepreneurial
process. Motivation has an important role in predicting the desire to be an
entrepreneur. Entrepreneurship involves human role. The process of entrepreneurial
occurs because people act to pursue opportunities. Human motivation determines
the decision to become an entrepreneur and the entrepreneurial process. The
differences will affect the entrepreneurial motivation. The external
environment which consists of the business environment, socio-cultural factors,
and external conflict nations can encourage and motivate entrepreneurs (Shane
et al., 2003).
There are several
inter and external factors which motivate people to become entrepreneur. The
internal factor includes; Educational background, Occupational experience,
Desire to do something pioneering and innovative, Desire to be free and
independent and Family background. Internal factors constitute the personality
of the entrepreneur and thereby generate an inclination to adopt
entrepreneurial activity. Among the internal motivating factors, the desire to
do something creative is important. It means the desire to make a contribution
to the development of the state, to introduce an entirely new product in the
market, to place the home town on the country’s industrial map, to make full
use of technical skills, to provide employment to intelligent young men and
women in the community, etc (Krishna, 2013).
The factors which
externally increase the motivation of people to become entrepreneur include:
Assistance
from Government, financial assistance from institutions, availability of
technology and / or raw materials, encouragement from big business units and
heavy demand for product. Among the external factors, assistance from financial
and other Governmental institutions has been rated the strongest motivator.
Other factors include availability of surplus funds, sick units being available
at a cheap price, success stories of first generation entrepreneurs, support of
friends and relatives etc. in some cases there may be compelling reasons like
loss of job, death of the father, dissatisfaction with the job held, etc.,
prompting people to launch their own industries (Krishna, 2013).
Peoples
are motivated by the reward structure in the economy. This economic perspective
on new venture initiation focuses on the usefulness, utility, or desirability
of an entrepreneurial career. People would become entrepreneurs if the expected
rewards surpass the wages of employment. Because expected rewards depended on
assessments of individual ability and attitudes towards risk, perceptions of
entrepreneurial feasibility were included. People may be motivated to become entrepreneurs
if they believe self-employment is more likely than working for others to lead
to valued outcomes. It seemed to us that the motivation to become an
entrepreneur is driven by the difference between the desirability of
self-employment and the desirability of working for others (Schoenfeld,
Borgia, & Segal, 2005)
(Robichaud,
McGraw and Roger, 2001) have studied North American entrepreneurs and have
grouped motivational factors into four categories. Extrinsic rewards which are
source of motivation are for economic reasons and Independence/ autonomy.
Intrinsic rewards are source of motivation which includes: self-fulfillment and
growth and Family security.
(Wang,
Walker & Redmond, 2006) did a study on motivations of small business owners
in Western Australia, and pointed 17 motivational factors into four groups:
Personal development motivations, financial motivations, Motivations related to
work and family and Flexible lifestyle motivations.
(Kirkwood,
2009) did a similar study on entrepreneurs in New Zealand and mentions that
there are four key drivers of entrepreneurial motivation. The first is the
desire to be independent. This is cited as the number one motivating factor for
many people in becoming entrepreneur. The second is monetary gain. People are not always motivated by money but
it is found to be an important motivational factor for entrepreneurship. The
third relates to issues around work, issues such as unemployment, redundancy
and lack of job prospects. The fourth key driver involves family-related
factors such as a desire for work-family balance.
The
main factors which results in motivation towards entrepreneurship are discussed
in the following section. Six factors appear most frequently in the literature
regarding motivation for entrepreneurship. They are independence; money;
work-related factors; family-related factors; the need for challenge; and
opportunity. Factors like independence and money are straightforward, but for
other factors like family-related motivators and the need for challenge, the
differences between the various studies are pointed out.
2.2.1 Entrepreneurship
Education
Entrepreneurship education
refers to the scope of curricular
lectures or courses
that provides students with entrepreneurial competencies,
skills and knowledge in pursuing entrepreneurial career (Ekpoh
& Edet, 2011).
Entrepreneurship is confronted with uncertainties as
entrepreneurs always try new things and set challenging goals for themselves. Inadequate business knowledge
will lead to risk-averse behavior and reduce
entrepreneurial propensity.
Throughout adequate business
knowledge acquired
from entrepreneurship
education, the interest of students towards entrepreneurial career would
increase, because it has prepared potential
entrepreneurs in dealing complex decision makings, and minimizes the perceptions of barriers and risk of entrepreneurship (human
capital, financial capital,
discovering of opportunity, material acquisition and technology adaptation), help them to start enterprise better as
they know the entrepreneurial process and have foundation regarding business
management knowledge (Ahmed et al., 2010).
Personality traits have proven to be predictors of many aspects of
entrepreneurship. Personality
traits, known as trait
theory, it refers to personal characteristics of entrepreneurs. (Shaver & Scott, 1991)
In
order do any research the finding and identification of literature gap is very
important. So the making of this term paper I have found the literature gap
from the article “the journey to develop educated entrepreneurs: the prospects
and problems of Afghanistan businessman” which is written by (Muhammad, 2011).
In this research article the author gave his recommendation for doing further
research on “entrepreneurial motivation: motivation of people to become an
entrepreneur.
This
study used a correlation research design. The study used exploratory study
where change or effect on independent variables (willingness to become a boss,
to maintain personal freedom, to provide employment to people, to satisfy their
basic psychological needs, entrepreneurial opportunities, macroeconomic
environment, knowledge, skills, job security and personal satisfaction and
growth) result in change in dependent variable (motivation). Quantitative data
was considered for this study.
Unit
of analysis in this study were individuals students at whom the researcher want
to know their motivation to become an entrepreneur.
The
study population consists of three thousand students in the university.
For
the completion this research secondary data was obtained from published journal
articles from publishers like the emerald publishing group, books and magnizes
were also used.
The
dependent variable in the proposal is motivation of student to become an
entrepreneur.
The
independent variable in this proposal includes willingness to become a boss, to
maintain personal freedom, to provide employment to people, to satisfy their
basic psychological needs, entrepreneurial opportunities, macroeconomic
environment, knowledge, skills, job security and personal satisfaction and
growth.
The
data is analyzed by using SPPSS and the results will be interpreted through
frequency distribution tables and bar graphs.
3.8 Data collection instruments
Primary
data was collected using a self administered questionnaire. The questionnaire
was
designed
according to the objectives and study variables and responses were anchored on
a
five (5)
point Likert scale ranging from 5 – strongly agree to 1 - strongly disagree.
Part one of the questionnaires was used to gather biographic data of the
respondents and part two was to collect data on entrepreneurial education,
personality traits and entrepreneurial motivations.
