UNIVERSITY OF MADRAS AND GOVERNMENT OF TAMIL NADU

National Conference On 'Entrepreneurship in India-Road Ahead' 20th March, 2013

Organized by Entrepreneurship-cum-Skill Development Center (ESDC) Department of Commerce University of Madras Chennai- 600 005

MEDIATING EFFECT OF PERSONALITY TRAITS ON ATTITUDE TOWARDS ENTREPRENEURSHIPDr.K. Manivannan, Professor, RMK Engineering College

Dr. T.N. Srikantha Dath, Professor, RMK Engineering College

Ms.S.D. Uma Mageswari, Associate Professor, RMK Engineering College

Abstract

Purpose: Entrepreneurship is becoming a very relevant instrument to promote economic growth and development in different economies. Entrepreneurs are considered without any doubt as pillars on which societies are built. To compete in the globalizing economy, developing countries like India have to tap the potential for entrepreneurial activity. The number of graduates from public and private higher educational institutions that join the job market also leads to greater unemployment. A paradigm shift among graduates from seeking jobs to providing jobs is needed, as their contributions to entrepreneurship would stimulate the countrys economic growth, and help it move towards becoming a developed nation by 2020. This paper attempts to probe into the attitudes of the Engineering and technology graduate students in Tamil Nadu towards Entrepreneurship as their career.

Research Methodology: This is a descriptive research. Primary Data were collected through questionnaire from Engineering and Technology students. Stratified random sampling was used.

Findings: The data were analysed using statistical tools such as correlation, regression, chi square tests. Views of Engineering and technology students towards entrepreneurs, entrepreneurship and their personal attitude en route for choosing entrepreneurship as their career choice are studied.

Research limitationsThere is a few limitations which may affect the scope of the study.

First, the study was conducted in only one District in Tamil Nadu. Hence, blanket generalization of the findings of the study to each and every district in Tamil Nadu should be done with caution. Second, the study focuses only on Engineering and Technology students and their attitude towards entrepreneurship.

Originality/value The main discussion of this paper brings together a large range of

Perspectives of Engineering and Technology students in Thiruvallur District towards Entrepreneurs.

Key words : Entrepreneur, Entrepreneurship, Attitude, Career1.0INTRODUCTION

Entrepreneurship is becoming a very relevant instrument to promote economic growth and development in different economies. Entrepreneurs are considered without any doubt as pillars on which societies are built. To compete in the globalizing economy, developing countries like India have to tap the potential for entrepreneurial activity. Entrepreneurial ventures in India are encouraged by systematic attempts at the removal of imposed structural and regulatory roadblocks. The growth of Bangalore, Hyderabad and Chennai as industrial hubs for IT and automobile business stand as evidence for Governments support.On the other hand, the number of graduates from public and private higher educational institutions that join the job market which leads to greater unemployment. An increasing number of tertiary education graduates are unable to secure suitable jobs and are facing unemployment or underemployment, which potentially poses a social challenge to the society. (Rucai 2004; ChinaCSR 2007). A paradigm shift among graduates from seeking jobs to providing jobs is needed, as their contributions to entrepreneurship would stimulate the countrys economic growth, and help it move towards becoming a developed nation by 2020.

1.1PROBLEM STATEMENT: Extensive attitudinal research has investigated this topic because attitude is assumed to be a better explanatory factor for entrepreneurial career choice than demographic and personality variables (Robinson et al. 1991). Several studies have also investigated the influence of attitude towards entrepreneurial aspiration (Krueger et al. 2000).

The influence of attitude towards entrepreneurship as the career choice among young graduate students in countries like USA, China, Malaysia, Pakistan etc. are studied. But such studies involving Indian students attitude appear to be very less from the extant literature.

Graduate entrepreneurship is portrayed as a solution to the youth unemployment crisis in many countries such as the United States and the European Union, and could provide one path for the Indian government to decrease the pressure of creating millions of suitable jobs for graduates by encouraging them to create their own jobs as well as employment for further employees of their venture.

Therefore this research is crucial as:

1. It is the study of students intentions towards entrepreneurship among students as a career choice.

2. Government of India takes many steps to foster entrepreneurship among college students through sponsored entrepreneurship. This research provides essential input to develop programs and support services that meet the needs of the students.

3. A study conducted in USA on students enrolled in Small Business Institute by Michael Harris et al. (USASBE, 2008) strongly supported the notion that entrepreneurial drive can be developed and entrepreneurship education developed positive attitudes.

4. Indias graduate employment gap needs to be filled through entrepreneurship and bold individuals creating ventures that provide employment to others. Therefore it is crucial to understand how Indian students can positively impact the stressed labor market by creating employment and economic impact.

5. In an article cited in Neytri.com on 10/03/2010 No IIM students for entrepreneurship this year - it is quoted that not even one student have opted out of the final placements process to start his own venture unlike in the previous years when seven students, had opted out of the placements to start their own ventures in 2009 and 10 students in 2008.

Tamil Nadu witnesses tremendous increase in the number of Engineering colleges, Arts & Science Colleges and B-Schools and hence the number of graduates entering the job market is increasing astronomically. This in turn results in unemployment problem. One way of tackling the problem is to nurture and foster entrepreneurship among the graduates. The present study intends to fill the void and addresses the need to encourage more graduates to participate in entrepreneurship, and also studies the relationship between attitude towards entrepreneurship and career choice among graduates in Tamil Nadu. As the nation is moving towards becoming a developed country by 2020, and is in need of more entrepreneurs to realise this goal. Therefore, graduate contribution and involvement in this field are very much needed to generate the countrys continuous economic development, as well as to assist the government in providing job opportunities. The research findings can also provide a guideline for increasing the number of graduate entrepreneurs.

2.0REVIEW OF LITERATURE

Theoretical Background:

Entrepreneurship is a purposeful activity includes in initiation, promotion and distribution of wealth and service. It is a risk taking activity and challenging tasks, needs utmost devotion, total commitment and greater sincerity with fullest involvement for his personal growth and personality. The entrepreneurial career takes time and needs hard work. Systematic planning and business acumen are the essential requirements of a successful entrepreneur. Therefore, before choosing this path one should be very careful in knowing about his own self.

(http://assamagribusiness.nic.in/agriclinics/entrepreneurship%20concept%20&%20definition.pdf, accessed on 20.07.2012)

Influences that affect career choice begin early in life; this study focuses on the next generation of entrepreneurs, and on their career motivations, attitudes and self-perceptions.Attitudes are evaluative statements or judgements concerning objects, people or events. They reflect how one feels about something. Attitudes have three components : Cognition, affect and behavior(Stephen Robbins, ).

Cognitive component : The opinion or belief segment of an attitude.

Affective component: The emotional segment of an attitude. Affect can lead to behavioral outcomes.

Behavioral component: An intention to behave in a certain way toward someone or something. Analysing attitudes is helpful in understanding their complexity and the potential relationship between attitudes and behavior.(Stephen Robbins,9Ed.)

Ajzen's theory of planned behavior (TPB) as given below, explains that intentions are the single best predictor of any planned behavior, including entrepreneurship. Attitudes influence behavior by their impact on intentions. Intentions and attitudes depend on the situation and person.

Extensive research is done in personality traits of an entrepreneur like risk taking, self control, self confidence, proactive, innovative, independence; achievement oriented and has an influence on the attitude. Similarly environmental factors like cultural, demographic, social factors and government policies affect the attitudinal level of the individual.

Research outside India:

Previous studies in the literature provide explanation to a question on why some people choose entrepreneurial career and others do not. Some scholars primarily focus on the effect of personality characteristics in the decision making process (Bonnet and Furnham, 1991). The results vary across the studies and reveal the existence of a link between entrepreneurial intention and some personality factors.

The attitude of individual to get involved in the field of entrepreneurship is driven by a five main factors such as personal elements/traits factor (need for achievement, internal control, taking risk), personal environmental factor (family status, gender and having business-owning family), personal objective factor (being the owner of business, financial guarantee and vision), business environment factor (competition, societal attitudes towards new businesses and the accessibility of loan) and business idea factor (Naffziger, Hornby & Kuratko, 1994).

Research conducted by Mazzarol, Doss & Thein (1999) found an attitude to set up an own business by a group of West Australian entrepreneurs based on demographic factors

such as age, educational level, ethnicity, gender, previous work experience, jobless rate, residing location, family business experience and self-employment. Meanwhile, Crant (1996) studied on a group of first year undergraduates and degree holders found that entrepreneurship attitude among the respondents had significantly higher relationships with gender, education, family with business interest and a personal proactive attitude.

Erich J. Schwarz et al. (2005) studied the effects of attitudes and perceived environment conditions on students entrepreneurial intent in an Austrian perspective and investigated determinants of entrepreneurial intent among students and revealed that attitudes, perception of environment conditions. Interestingly environmental factors pertaining to financial support and bureaucratic procedure related to opening a firm have no impact on entrepreneurial intention among students in Austria.

JOSE Ma VECIANA et al. (2005) studied the desirability, feasibility and intent to start a new business among University students in two countries. The study reported a positive

Perception of new venture desirability has increased in the past decades; Students with entrepreneurs in their families have thought more seriously to create a new venture; The prestige of the entrepreneurial activity as a profession compares relatively well with other professions.

Duygu Turker and Senem Sonmez Selcuk(2008) conducted a study o the factors affecting entrepreneurial intention of University students in Turkey concluded that entrepreneurial education provided by the University motivate the students to pursue entrepreneurial career.

Urve Venesaar et al., Students Attitudes and Intentions toward Entrepreneurship at Tallinn University of Technology , Estonia showed that despite the considerable share of respondents thinking about starting a business, most of them do not want to undertake entrepreneurial activity after graduation, but postpone this to a more distant future. Lot of research on the topic done in Malaysia revealed the importance of attitude, education, self-efficacy in determining the career of students. They are as given below:

1. Studies conducted in Malaysia on Entrepreneurship Intention among Malaysian Business students(Zaharia Mohd. Zain, 2010) proved the existence of significant relationship between personality trait and entrepreneurship intent. The authors stressed on the need for rigorous involvement of career cousellors and entrepreneurs association by way of providing assistance and advice.

2. Norasmah Hj Othman and Salmah(2009) in their research on Attitude towards choosing a career in entrepreneurship amongst graduates in Malaysia supported the previous findings that attitude is a significant determinant.

3. If students understand the necessity and need of having entrepreneurship education then their intention to become an entrepreneur increased. Developing effective entrepreneurship education to explain them the necessities and benefits of self-employment is crucial.(Entrepreneurship as a career choice: An analysis of entrepreneurial self-efficacy and intention of university students.(Zaidatol Akmaliah Lope Pihie (2009)

Factors enhancing entrepreneurial attitudes among post graduate students in Pakistani University (Akhthar Ali, Keith J. Topping, Riaz H. Tariq, 2010) revealed that the demographic variables such as gender, nature of subject and family back ground failed to yield significant effect; Middle class urban students indicated better entrepreneurial attributes than lower and upper middle class rural students.

Research in India:

A Cross-Cultural Comparison of India and China by Abhishek Goel et al. IIMA, Ahmedabad (2007) argues that social support is an important enabler in entrepreneurial activity in a country or a region. One untested assumption in policy making on entrepreneurship development has been that all regions are equally desirous of entrepreneurial activity and one policy could address issues in all regions. It was argued that societal attitudes towards entrepreneurs and entrepreneurship are important determinants for future entrepreneurial activity. These attitudes would be impacted by the family background of an individual and entrepreneurial development in the region an individual comes from.Several studies were conducted on entrepreneurship among students and reported that students traits and perceptions have an influence entrepreneurial attitude (Dr.J.P.Kumar (2012), Dr.Mohsin Shaikh (2012), Tarak Nath Shaw ( 2008). Eight factors were identified as crucial in determining the students perceptions towards entrepreneurial career include Personality, Cultural, Risk Taking Propensity, Perceived Desirability, Perceived Feasibility, Attitude Towards Entrepreneurship Education or Perception on University Environment, Subjective Norms, Market and Finance Conditions(Soumya Gaddam,2008).The traditional gender influences also emerge as male students are more likely start their business than female students. The age of the students also have an influence on their entrepreneurial intention as it was found that students in the age group 30-35 were more inclined towards entrepreneurship than the middle aged. The influence of educational qualification of the students towards the entrepreneurial attitude is significant. It was found that engineering students have a positive tendency towards entrepreneurship(Krishna Kumar Agarwal,2009) One disturbing aspect that was revealed in the studies was that as the level of education increases the likelihood of venturing into entrepreneurship decreasing.

3.0 OBJECTIVES:

Primary Objective:

To study the attitude of students towards entrepreneurship as their career choice and the factors influencing the attitude

Secondary Objectives:

1. To identify the key factors influencing the attitude of the graduates towards entrepreneurship

2. To study the attitude of undergraduate engineering students towards entrepreneurship

3. To ascertain the relationship between students attitude and their perceptions towards entreprenership4. To examine the mediating effect of personality traits on the perceptions and attitude.Research hypothesisH1 : There is a significant relationship between demographic factors such as gender, place of birth, family income on entrepreneurial attitude.

H2: There is a significant relationship between the family background such as parents in business or relatives in business on entrepreneurial attitude.

H3:Perception towards entrepreneurship has a significant effect on the entrepreneurial attitude

H4: Personality traits have a significant and moderating effect on the relationship between the perception and attitude.

3.1 RESEARCH METHODOLOGY

The descriptive research design employs questionnaire as the tool to collect primary data. A questionnaire consisting of questions under 7 items viz. Demogrphic details, perceptions, intentions, positive and negative attitude, influencers, government initiatives were prepared, which was reviewed for content validity by practicing entrepreneurs, academia and a few selected students. The questionnaire was modified by removing redundant items and by incorporating the suggestions made by the reviewers.

Data Collection: Data was collected from pre final year Engineering and Technology students across colleges in Thiruvallur District during the period August 2012 to November 2012.Sample size: 156 students of various engineering disciplines from three colleges, where the disciplines were accredited, are selected for the study. 4.0 ANALYSIS AND INTERPRETATION

4.1 DEMOGRAPHIC DETAILS OF THE RESPONDENTS:The respondents are engineering and technology students and the demographic details like gender, place of birth and family income are as given below:

The family background of the students based on parents in business and relatives in business are as given below:

4.2 FACTOR ANALYSISQuestionnaire was designed with 14 statements that probe on the perceptions of students on entrepreneurs. The individual statements were examined using factor analysis and are grouped into three categories and the reliability of the samples collected was tested for internal consistency of the grouping of the items.KMO measure of sampling adequacy is an index to examine the appropriateness of factor analysis. High values between 0.5 and 1.0 indicate factor analysis is appropriate. Kaiser Meyer Olkin measure of sampling adequacy index for this dataset is 0.592 and hence the factor analysis is appropriate for the given data set. Bartletts Test of Sphericity is used to examine the hypothesis that the variables are uncorrelated. A large value of the test statistic will favor the rejection of the null hypothesis. In turn this would indicate that factor analysis is appropriate. Bartletts test of Sphericity Chi-square statistics is 376.29, that shows the 14 statements are correlated and hence as inferred in KMO, factor analysis is appropriate for the given data set.

The next step in the process is to decide about the number of factors to be derived. The component matrix so formed is further rotated orthogonally using Varimax rotation algorithm which is the standard rotation method(Kaiser, 1958). All the statements are loaded on 3 factors. The three components arrived after factor analysis is named after their perceptions of entrepreneurs as self centered, service oriented and inspiring.

PerceptionStatementsFactor loadingsReliability

Self centred

destroy more jobs than they create0.703

0.639

just to make money0.632

do more harm than good0.424

selfish

0.746

Service oriented

provide goods and services that people need0.4010.549

help india to compete in the world0.734

India needs more entrepreneurs0.441

Inspiring

They spend little time with their family and friends0.4620.525

They inspire more people by their deeds and actions0.466

Plenty of opportunities for Indians to start successful businesses0.452

Starting a business is respectful0.575

friends would respect0.709

In India, wealthy people are admired0.512

Similarly, reliability analysis for internal consistency is done for personality traits and attitude are carried out and the values are as given below:

Reliability Statistics

AttitudeCronbach's AlphaN of ItemsPersonality traitsCronbach's AlphaN of Items

.632140.63512

4.3 REGRESSION ANALYSISLinear regression is used to model the value of a dependent variable based on its linear relationship to one or more predictors. Attitude of students towards entrepreneurship is influenced by variables such as gender, family income, place of birth, parents in business, relatives in business, perception towards entrepreneurship and personality traits. It was observed that there is a linear relationship between the dependent variable and the factors mentioned.

Regression analysis is done for the above model and the regression equation is as under:

Y = 0.069X1 + 0.851X2 -0.33X3 -0.021X4 + 0.025X5 + 0.086X6 + 0.119X7

Where Y = Attitude ; X1 = Perception; X2 = Personality trait; X3 = Gender; X4 = Place of birth; X5 = Family income; X6 = Parents in business; X7 = Relatives in business.

Hypothesis formulated for multiple regression:

Ha: There is no significant association between perception and attitude.

The analysis show the significance of 0.05 (p0.05) hence the null hypothesis is rejected. It can be concluded that there is an association between perception of students towards entrepreneurship and their entrepreneurial attitude.

Hb: There is no significant association between personality traits and attitude The significant value obtained is 0.000 i.e. p is less than 0.05, hence it can be concluded that there exists an association between personality traits of the respondents and their entrepreneurial attitude.

Hc: There is no significant association between gender and attitude

As the p value obtained is 0.336 which is above 0.05, null hypothesis is accepted.

Hd: There is no significant association between Place of birth and attitude

P value is 0.538 which is greater than 0.05 and hence can be concluded that place of birth of the respondents do not have an impact on the entrepreneurial attitude.He: There is no significant association between Family income and attitude

In this case also, p value is 0.478, and hence null hypothesis is accepted.Hf: There is no significant association between family background(parents in business and relatives in business) and entrepreneurial attitude.

Two factors are considered under family background. P values obtained are 0.016 and 0.001 respectively and are less than 0.05 suggesting that the family background has an significant influence on the respondents attitude towards entrepreneurship.R, the multiple correlation coefficient, is the correlation between the observed and predicted values of the dependent variable, and ranges from 0 to 1. Larger values of R indicate stronger relationships. The values of R2 range from 0 to 1. Small values indicate that the model does not fit the data well; R2 is the proportion of variation in the dependent variable explained by the regression model (Hair et al., 1998).

R value for this dataset is 0.927 and R square value is 0.860. The high values of R and R2 suggest a stronger relationships between the attitude and other independent variables.4.4 MEDIATION EFFECTS

PERSONALITY TRAITS, PERCEPTIONS AND ATTITUDEPerceptions refer to an individual's current appraisal of an object, or program, as experienced in the immediate situation. Attitude is the result of perceptions. People with different perceptions look at the same thing and thus think about it differently, and end up with different attitudes. Current research aims to study how the perceptions (negative and positive) influence attitude mediated by personality traits.

A variable may be considered a mediator to the extent to which it carries the influence of a given independent variable (IV) to a given dependent variable (DV). SOBEL TEST

Sobel test was used to study the mediating effect of personality traits on perception to attitude relationship. Firstly, regression analysis with perception predicting personality trait was done. From this the standard error and regression coefficients are taken for calculation. Similarly a regression analysis with perception and personality traits predicting attitude was done. These values are entered in program which calculated the critical ratio as a test of whether the indirect effect of the IV on the DV via the mediator is significantly different from zero.

InputTest statisticStd.errorp-value

a0.348Sobel2.247937580.05062240.02458017

b0.327Aroian test2.205055430.051606870.02745021

sa0.132Goodman test2.293422960.049618410.02182367

sb0.076

The reported p-values (rounded to 8 decimal places) are drawn from the unit normal distribution under the assumption of a two-tailed z-test of the hypothesis that the mediated effect equals zero in the population. +/- 1.96 are the critical values of the test ratio which contain the central 95% of the unit normal distribution. P-values