INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous...

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INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF DAYAKYOUTH IN SARAWAK, MALAYSIA '-:-, - .. Ollince Anak Tateh ,r _. t , " l' Corporate Master in Business Administration 2013

Transcript of INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous...

Page 1: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

INDIGENOUS ENTREPRENEURSHIP ENTREPRENEURIAL INTENTIONS OF DAYAKYOUTH IN SARAWAK MALAYSIA

bull -- - ~ ~

Ollince Anak Tateh

r bull _

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Corporate Master in Business Administration 2013

Pusat Khidmat Maklumat Akadcl1ik UNJVERSm MALAYSIA SARAWAK

Indigenous Entrepreneurship Entrepreneurial Intentions ofDayak Youth in Sarawak Malaysia

PKHIOMAT MAKLUMAT AKAOEMIK

1IIIIIIIIIrliiilllllllili 1000246888

By

Ollince Anak Tate~ 11031918

A Research Paper Submitted in Partial Fulfillment of the Requirement for the Degree of

Corporate Master in Business Administration

Faculty of Economics and Business UNIVERSITY MALAYSIA SARAWAI

(2013) - - bull ~ ~~

~

I I

APPROVAL PAGE

I certified that I have supervised and read this study and in my opinion it conforms to

acceptable standards of scholarly presentation and is fully adequate in scope and quality

as a research paper for the degree of Corporate Master in Business Administration

Dr Hamrila Abdul Latip Supervisor

This research paper was submitted to the Faculty of Economics and Business UNlMAS

and is accepted as partial fulfillment of the requirements for the degree of Corporate

Master in Business Administration

~I bull bull l bull I

11 Dr Mohammad Affendy Arip Dean Faculty of Economics and Business UNIMAS

I bull

ii

I

STATEMENT OF ORIGINALITY

The work described in this Research Paper entitled

Indigenous Entrepreneurship Entrepreneurial Intentions of Dayak Youth in Sarawak Malaysia

is to the best of the authors knowledge that of the author except

where due reference is made

6th August 2013 Date Ollince Anak Tateh

11031918 shy

- _

III

F

ABSTRACT

Indigenous Entrepreneurship Entrepreneurial Intentions of Dayak

Youth in Sarawak Malaysia

By

OLLINCE ANAK TATER

([hiS study involves two aspects that have major influence to entrepreneurship as

commonly described in literature the personality traits and social variables The interest

of study was on Dayak group in Sarawak comprises of Iban Bidayuh and Orang Ulu

(Bisayah Kayan Kenyah Kelabit and Berawan The present study finds that despite

increasing attention on indigenous entrepreneurship there remains a lack of

multidimensional research on entrepreneurial intentions of non-Malay indigenous

communities in Malaysia With the use of quantitative methods for data collection and

analysis the impacts of personality traits and social variables of the respondents on

development of their entrepreneurial intentions were investigated The findings showed

that the respondents entrepreneurial intentions could be predicted using both their

personality traits (innovativeness) and social variables (knowledge and experience

family upbringing)

Keywords Entrepreneurial Intentions Personality Traits Social Variables Indigenous Dayak

bull t I

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xxx

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IV

ABSTRAK

Keusahawanan Peribumi Niat Keusahawanan di Kalangan Delia Dayak di Sarawak Malaysia

Oleh

OLLINCE ANAK rATEH

Kajian ini melibatkan dua aspek yang mempengaruhi keusahawanan iaitu sifat

keperibadian dan unsur-unsur sosial Kajian ini adalah cenderung kepada kumpulan

kaum Dayak di Sarawak yang terdiri daripada kaum ban Bidayuh dan Orang Ulu

Bisaya Kayan Kenyah Kelabit dan Berawan Kajian ini mendapati meskipun

perhatian terhadap bidang keusahawanan oleh kaum peribumi semakin meningkat

namun masih terdapat kekurangan kajian tentang niat keusahawanan dalam kalangan

kaum peribumi bukan Melayu di Malaysia yang meliputi pelbagai dimensi Dengan

menggunakan kaedah kuantitatif bagi proses pengumpulan data dan analisis kajian ini

mengkaji impak sifat keperibadian serta unsur-unsur sosial respondens terhadap

keinginan mereka untuk menceburi bidang keusahawanan Hasil kajian ini menunjukkan

bahawa niat keusahawanan para respondens boleh dijangka berdasarkan kedua-dua

aspek yang dikaji yakni sifat keperibadian (inovatif) dan unsur-unsur sosial

(pengetahuan serta pengalaman dan latarbelakang keluarga)

Kata kunci Niat Keusahawanan Sifat Keperibadian Perubahan Sosial Peribumi fir bull bull t-_~- _ bull ~ ~

Dayak ~ ~I bull bull middot

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ACKNOWLEDGEMENT

I would like to express my gratitude to all who supported and assisted me during this

CMBA journey especially my research supervisor Dr Hamrila A Latip for her guidance

my beloved family for their continuous supports and encouragement my colleagues for

their understanding which make it possible for me to finish this course and all my

CMBA friends who share an enthusiasm for learning and motivation

Special thank is also made to the Centre of Graduate Study (CGS) ofUniversity Malaysia

Sarawak (UNlMAS) for providing administration and assistance during my five

semesters with CMBA Sibu

I would also like to acknowledge the 161 respondents who completed my research

questionnaire and specific persons who helped me to reach the respondents from

different places (Kuching Betong Sibu Kanowit Bintulu and Miri) especially ZeJri

Rajaie Frederick SUI Baun Inu Puun Nicholas Guwang Priscelia Riip and Anniza Jack

I I bullbull I middotf bull [

VI

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Pusat Khidmat Maklumat Akademik UNIVERSm MALAYSIA SARAWAK

TABLE OF CONTENTS

Page

LIST OF TABLES IlX

LIST OF FIGURES x

CHAPTER 1 INTRODUCTION

10 Introduction 1

11 Theoretical Background 3

12 Significance of Study 3 middot

13 Research Objectives 5

14 Scope of Study 6

CHAPTER 2 LITERATURE REVIEW

20 Introduction 8

21 Malaysian Poverty Eradication Plan 8

22 The Dayak Natives in Sarawak 10

23 Entrepreneurship Concept and Variables 231 Content Variables Personality Traits 14

Risk Taking Propensity 15

Tolerance ofAmbiguity 17

Innovativeness 18

232 Process Variables Social Variables 19

Family Upbringing 20

Knowledge and Experience 21shy

24 Hypothesized Relationship between Vrui~k1sect ~~ 23 ~l bull bull I

CHAPTER 3 METHODOLOGY 30 Introduction 25

31 Research Design

311 Sample Size 26 I

312 Respondents t 26

VB

313 Research Instruments 28

32 Statistical Methods

321 Data Transformation 32

322 Descriptive Analysis 32

323 Principal Component Analysis 33

324 Pearson Correlation Analysis 34

325 Multiple Regression Analysis 34

CHAPTER 4 EMPIRICAL RESULTS

40 Introduction 36

41 Descriptive Statistic 36 42 Validity and Reliability 38

43 Correlation Matrix 43

44 MUltiple Regression Analysis 47

441 Multiple Regression Model 49

CHAPTER 5 DISCUSSION AND CONCLUSION

50 Introduction 55

51 Personality Traits and Social Variables 55

52 Limitations and Implications of Study 57

53 Conclusion 59

REFERENCES 61

APPENDIX I

APPENDIX II

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LIST OF TABLES

Page

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group 11 Table 31 Sample Characteristics 27

Table 32 Composite Variables of Entrepreneurial Intention 29

Table 33 Survey Items for Personality Traits 30

Table 34 Survey Items for Social Variables 31

Table 35 Assumptions for Multiple Regression Model 35

Table 4 1 Frequency of Dayak Youths Entrepreneurial Intentions 37

Table 42 Summary of Familys Background and Awareness on 37

Entrepreneurship

Table 43 Rotated Component Matrix of Personality Traits Items 40

Table 44 Item-Total Statistics of Factor 2 (Innovativeness) 41

Table 45 Rotated Component Matrix of Social Variables Items 42

Table 46 Pearson Correlation Matrix 43

Table 47 Model Summary of Personality Traits as Predictors 48

Table 48 Regression Coefficients ofPersonality Traits 48

Table 49 Model Summary of Social Variables as Predictors 48

Table 410 Regression Coefficients of Social Variables 49

Table 411 Summary ofAll Possible Models 51

Table 412 Summary of Model Y X2345 52

Table 413 Coefficients of Model Y X2bull345 52

Table 414 Summary of Model Y X245 53

Table 415 Coefficient of ModelY ~4bullbull _ ~bull~ 53 f ~i middotd

bull II _ bull

If I middotmiddot

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LIST OF FIGURES

Page

Figure 21 The Theory of Reasoned Action 24

Figure 22 Model of Intentions 24

Figure 41 Education Majoring 38

Tmiddot middot ~i bullbull bull t

f I I

x

lt -- ~

CHAPTERl

INTRODUCTION

10 Introduction

This thesis explores the potential of indigenous youth to involve in entrepreneurship by

investigating factors that contribute to their entrepreneurial intentions Within the context of a

quantitative design the present thesis explores two type~ of individuals assets personality

traits and social variables as predictors of entrepreneurial intentions possessed by Malaysian

indigenous communities grouped as Dayak

Entrepreneurship activities help develops a countrys economy and social wellness of one

particular society (Ahmad el al 2006) Despite an increasing interest in indigenous

entrepreneurship and its contribution to the living standard of the society (Doris el a 2012

Jaafar el a 2009) relatively little empirical evidence has been reported on other indigenous

communities in Malaysia apart from the Malay This motivates the current researcher to

explore the entrepreneurs potentials specifically in term of entrepreneurial intention among

Dayak native in Sarawak The study is concentrated on two possible aspects that could

influence individuals decision to start a new business Component variables on personality

traits and the communities social variables were taken into account

shy

Although massive entrepreneurship literatUre have d~tmmre8 middot~ue~es of personality bull I ~ i fo

traits (Deamer amp Earle 2004 Schmitt-Rodermund 2004 Gurol amp Atsan 2006 Pillis amp ~

Reardon 2007) and social variables (Morrison 2000 Schmitt-Rodermund 2004) on

entrepreneurship potential the present thesis explores these two factors within the context of

0 II I bull

1

entrepreneurship traits prior knowledge and as family upbringing in order to identify

entrepreneurial intentions among Dayak community

Furthennore Dayak youth are chosen for the present study as they are known as a countrys next generation ~ economic and social player It is a period when young people gradually

come to be recognized and to recognize themselves as adults It can also be a period of great

energy enthusiasm and creativity (Fussell 2006) Thus t is extremely essential to make sure

that they are well prepared for their futures as workers entrepreneurs parents citizens and

community leaders and to the course of poverty reduction and growth They begin to interact

independently with the broader community and establish their identity as individuals At this

stage they nonnally stand at one lifes turning points one at which they think about careers

(pruett et a 2009) and how to be successful

This becomes the underlying principle for the current researcher in choosing youth as her

respondents As younger generations are exposed to substantial economic political changes

and popular cultural trends measured by technological advances it is no doubt that they are

more exposed to foreign trends and ideas and more able to share their ideas (Hofstede

2(01) At the end of the Chapter 5 this thesis is expected to answer two research questions as

follow

1) What is the entrepreneurial intention level among Dayak youth in Sarawak

2) What are the factors that affect partfcipaiion Ofl)(ljialt you~~trPIi~WJ1rship

shy

t 2

11 Theoretical Background

Factors contributing to entrepreneurial intention have gained the attention of a number of

researchers (Segal el aI 2005 Pruett el aI 2009 Nabi amp Holden 2008) A number of researchers havt) debated the theoretical relevance of personality traits (Llewellyn amp Wilson

2003 Deamer amp Earle 2004 Shahhosseini el aI 2011) and influence of social variables

(Orhan amp Scott 2001 Roxas el aI 2008 Kirk~d 2009) to discover indigenous

entrepreneurship potential

The present study explores the entrepreneurship potential of unique native group in Sarawak

and examines the factors responsible for their participations in business sectors through

content and process variables Content variables focus on personality traits such as risk taking

propensity tolerance for ambiguity and innovativeness (Stewart amp Roth 2001 Wang amp

Zang 2005 Nicolaidis amp Katsaros 2011) while process variables consider knowledge and

experience attained as well as family upbringing which include family support financial

status and awareness (Morisson 2000 Schmitt-Rodermund 2004) The following section

provides the rationale of the present thesis identifying three significant reasons for

undertaking this research

12 Significance of Study t--1tbull ~bullbull bull

t

There are three reasons for investigating rel~t~onship J~etween personality traits social

variables and entrepreneurial intentions These reasons consider the urgent need to

empirically review the relationship between both indi~iduals aspects (personality traits and

social variables) and the intention of youth to involve in ~ntre~repeu~hip fh~ components of

3

personality traits for the present study are represented by three commonly described

entrepreneurship traits risk taking propensity innovativeness and tolerance of ambiguity

(Gurol amp Atsan 2006 Shahhosseini et aI 2011 Yildiz 2012) whereas the components of

social variables (Wyckham amp Wed ley 1990 Morrison 2000 Schmitt-Rodermund 2004 Bagheri amp PiHte 2011) are represented by attained knowledge and training or working

experiences as well as family upbringing

First research done on indigenous entrepreneurship in Malaysia (Jaafar et al 2009 Suhaila

amp Mohammad 2011 Fakrul amp Norhayate 2011 Doris et al 2012) targeted on specific

community mainly in West Malaysia whom are reported as more economically advanced

compared to other Bumiputeras in the country after the NEP and NDP eras (Government of

Malaysia 2005) By way of contrast the present study investigates the entrepreneurship

potential of indigenous communities in East Malaysia in particular Sarawak where higher

poverty rate is recorded Therefore in order to discover the potential of entrepreneurship

within Dayak community in Sarawak this project initiates the exploration of Dayaks

features and culture via their entrepreneurship traits and social setting as predictors to their

entrepreneurial intentions

Second researchers (Schumpeter 1934 Tamvada 2009 Marr amp Reynard 2010 Goel amp

Rishi 2012) also stressed out on the important role of entrepreneurship in economic growth

and poverty alleviation Tamvada (2009) afgUedll18tbttngmiddot ~f~emp~~yed improves a

persons welfare besides creates job opportunity as a povero-reduction tool At the same

time Marr and Reynard (2010) stated that the economic growth and transformation of four

rapidly emerging major economies (REMEs) countries they did survey on - Brazil China

India and Korea - are due to private enterprise and entrepreneurial acfiyities There is no bull [ Ii

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Pusat Khidmat Maklumat Akademik UNIVERSID MALAYSIA SARAWAK

doubt that the Malaysian Government has set different types of policies to foster indigenous

business participation Thus this research provides a better understanding of the Dayak

description for policy makers NGOs and business support organizations particularly in

planning or utilizing government-support entrepreneurship programmes

Finally this study enables the readers to understand the level of Dayaks awareness towards

the concept of entrepreneurship and its benefits to the community group which still holds a I

gap in the literature Knowledge and skills are vital to enhance persons ability in order to

meet their basic needs in life and enable them to influence their life direction in almost every

situation By obtaining business-related education from primary level awareness on benefits

of entrepreneurship could be implanted from early age besides developing entrepreneurial

skills creativity and intention as well (Schmitt-Rodermund 2003 Pittaway amp Cope 2007

Alpkan et aJ 2010)

Otherwise efforts taken by the Sarawak Gdvernment to develop entrepreneurship skills

among Dayak could possibly become a tough mission as it is fundamentally not just

involving education and trainings but also changing mindset and attitude towards becoming

entrepreneurial Thus a key purpose of the present thesis is to gain an in depth understanding

of the Dayak youths entrepreneurship potential in strengthening entrepreneurship in

Malaysia

13 Researcb Objectives bull t

bull 11 ~ _ bull

The objectives of this study are twofold First the current observer is investigating the

potential of entrepreneurship among Dayak youth in Sarawak based on their imention to start

a business Second the potential of entrepreneurshi~ is also irlv~stlg~ted ~mpirically via the

5

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

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CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

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Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 2: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

Pusat Khidmat Maklumat Akadcl1ik UNJVERSm MALAYSIA SARAWAK

Indigenous Entrepreneurship Entrepreneurial Intentions ofDayak Youth in Sarawak Malaysia

PKHIOMAT MAKLUMAT AKAOEMIK

1IIIIIIIIIrliiilllllllili 1000246888

By

Ollince Anak Tate~ 11031918

A Research Paper Submitted in Partial Fulfillment of the Requirement for the Degree of

Corporate Master in Business Administration

Faculty of Economics and Business UNIVERSITY MALAYSIA SARAWAI

(2013) - - bull ~ ~~

~

I I

APPROVAL PAGE

I certified that I have supervised and read this study and in my opinion it conforms to

acceptable standards of scholarly presentation and is fully adequate in scope and quality

as a research paper for the degree of Corporate Master in Business Administration

Dr Hamrila Abdul Latip Supervisor

This research paper was submitted to the Faculty of Economics and Business UNlMAS

and is accepted as partial fulfillment of the requirements for the degree of Corporate

Master in Business Administration

~I bull bull l bull I

11 Dr Mohammad Affendy Arip Dean Faculty of Economics and Business UNIMAS

I bull

ii

I

STATEMENT OF ORIGINALITY

The work described in this Research Paper entitled

Indigenous Entrepreneurship Entrepreneurial Intentions of Dayak Youth in Sarawak Malaysia

is to the best of the authors knowledge that of the author except

where due reference is made

6th August 2013 Date Ollince Anak Tateh

11031918 shy

- _

III

F

ABSTRACT

Indigenous Entrepreneurship Entrepreneurial Intentions of Dayak

Youth in Sarawak Malaysia

By

OLLINCE ANAK TATER

([hiS study involves two aspects that have major influence to entrepreneurship as

commonly described in literature the personality traits and social variables The interest

of study was on Dayak group in Sarawak comprises of Iban Bidayuh and Orang Ulu

(Bisayah Kayan Kenyah Kelabit and Berawan The present study finds that despite

increasing attention on indigenous entrepreneurship there remains a lack of

multidimensional research on entrepreneurial intentions of non-Malay indigenous

communities in Malaysia With the use of quantitative methods for data collection and

analysis the impacts of personality traits and social variables of the respondents on

development of their entrepreneurial intentions were investigated The findings showed

that the respondents entrepreneurial intentions could be predicted using both their

personality traits (innovativeness) and social variables (knowledge and experience

family upbringing)

Keywords Entrepreneurial Intentions Personality Traits Social Variables Indigenous Dayak

bull t I

bull i

~

xxx

J I bull I

~

IV

ABSTRAK

Keusahawanan Peribumi Niat Keusahawanan di Kalangan Delia Dayak di Sarawak Malaysia

Oleh

OLLINCE ANAK rATEH

Kajian ini melibatkan dua aspek yang mempengaruhi keusahawanan iaitu sifat

keperibadian dan unsur-unsur sosial Kajian ini adalah cenderung kepada kumpulan

kaum Dayak di Sarawak yang terdiri daripada kaum ban Bidayuh dan Orang Ulu

Bisaya Kayan Kenyah Kelabit dan Berawan Kajian ini mendapati meskipun

perhatian terhadap bidang keusahawanan oleh kaum peribumi semakin meningkat

namun masih terdapat kekurangan kajian tentang niat keusahawanan dalam kalangan

kaum peribumi bukan Melayu di Malaysia yang meliputi pelbagai dimensi Dengan

menggunakan kaedah kuantitatif bagi proses pengumpulan data dan analisis kajian ini

mengkaji impak sifat keperibadian serta unsur-unsur sosial respondens terhadap

keinginan mereka untuk menceburi bidang keusahawanan Hasil kajian ini menunjukkan

bahawa niat keusahawanan para respondens boleh dijangka berdasarkan kedua-dua

aspek yang dikaji yakni sifat keperibadian (inovatif) dan unsur-unsur sosial

(pengetahuan serta pengalaman dan latarbelakang keluarga)

Kata kunci Niat Keusahawanan Sifat Keperibadian Perubahan Sosial Peribumi fir bull bull t-_~- _ bull ~ ~

Dayak ~ ~I bull bull middot

I

v

ACKNOWLEDGEMENT

I would like to express my gratitude to all who supported and assisted me during this

CMBA journey especially my research supervisor Dr Hamrila A Latip for her guidance

my beloved family for their continuous supports and encouragement my colleagues for

their understanding which make it possible for me to finish this course and all my

CMBA friends who share an enthusiasm for learning and motivation

Special thank is also made to the Centre of Graduate Study (CGS) ofUniversity Malaysia

Sarawak (UNlMAS) for providing administration and assistance during my five

semesters with CMBA Sibu

I would also like to acknowledge the 161 respondents who completed my research

questionnaire and specific persons who helped me to reach the respondents from

different places (Kuching Betong Sibu Kanowit Bintulu and Miri) especially ZeJri

Rajaie Frederick SUI Baun Inu Puun Nicholas Guwang Priscelia Riip and Anniza Jack

I I bullbull I middotf bull [

VI

bull I

Pusat Khidmat Maklumat Akademik UNIVERSm MALAYSIA SARAWAK

TABLE OF CONTENTS

Page

LIST OF TABLES IlX

LIST OF FIGURES x

CHAPTER 1 INTRODUCTION

10 Introduction 1

11 Theoretical Background 3

12 Significance of Study 3 middot

13 Research Objectives 5

14 Scope of Study 6

CHAPTER 2 LITERATURE REVIEW

20 Introduction 8

21 Malaysian Poverty Eradication Plan 8

22 The Dayak Natives in Sarawak 10

23 Entrepreneurship Concept and Variables 231 Content Variables Personality Traits 14

Risk Taking Propensity 15

Tolerance ofAmbiguity 17

Innovativeness 18

232 Process Variables Social Variables 19

Family Upbringing 20

Knowledge and Experience 21shy

24 Hypothesized Relationship between Vrui~k1sect ~~ 23 ~l bull bull I

CHAPTER 3 METHODOLOGY 30 Introduction 25

31 Research Design

311 Sample Size 26 I

312 Respondents t 26

VB

313 Research Instruments 28

32 Statistical Methods

321 Data Transformation 32

322 Descriptive Analysis 32

323 Principal Component Analysis 33

324 Pearson Correlation Analysis 34

325 Multiple Regression Analysis 34

CHAPTER 4 EMPIRICAL RESULTS

40 Introduction 36

41 Descriptive Statistic 36 42 Validity and Reliability 38

43 Correlation Matrix 43

44 MUltiple Regression Analysis 47

441 Multiple Regression Model 49

CHAPTER 5 DISCUSSION AND CONCLUSION

50 Introduction 55

51 Personality Traits and Social Variables 55

52 Limitations and Implications of Study 57

53 Conclusion 59

REFERENCES 61

APPENDIX I

APPENDIX II

I bull I

Vlll

LIST OF TABLES

Page

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group 11 Table 31 Sample Characteristics 27

Table 32 Composite Variables of Entrepreneurial Intention 29

Table 33 Survey Items for Personality Traits 30

Table 34 Survey Items for Social Variables 31

Table 35 Assumptions for Multiple Regression Model 35

Table 4 1 Frequency of Dayak Youths Entrepreneurial Intentions 37

Table 42 Summary of Familys Background and Awareness on 37

Entrepreneurship

Table 43 Rotated Component Matrix of Personality Traits Items 40

Table 44 Item-Total Statistics of Factor 2 (Innovativeness) 41

Table 45 Rotated Component Matrix of Social Variables Items 42

Table 46 Pearson Correlation Matrix 43

Table 47 Model Summary of Personality Traits as Predictors 48

Table 48 Regression Coefficients ofPersonality Traits 48

Table 49 Model Summary of Social Variables as Predictors 48

Table 410 Regression Coefficients of Social Variables 49

Table 411 Summary ofAll Possible Models 51

Table 412 Summary of Model Y X2345 52

Table 413 Coefficients of Model Y X2bull345 52

Table 414 Summary of Model Y X245 53

Table 415 Coefficient of ModelY ~4bullbull _ ~bull~ 53 f ~i middotd

bull II _ bull

If I middotmiddot

IX

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I

LIST OF FIGURES

Page

Figure 21 The Theory of Reasoned Action 24

Figure 22 Model of Intentions 24

Figure 41 Education Majoring 38

Tmiddot middot ~i bullbull bull t

f I I

x

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CHAPTERl

INTRODUCTION

10 Introduction

This thesis explores the potential of indigenous youth to involve in entrepreneurship by

investigating factors that contribute to their entrepreneurial intentions Within the context of a

quantitative design the present thesis explores two type~ of individuals assets personality

traits and social variables as predictors of entrepreneurial intentions possessed by Malaysian

indigenous communities grouped as Dayak

Entrepreneurship activities help develops a countrys economy and social wellness of one

particular society (Ahmad el al 2006) Despite an increasing interest in indigenous

entrepreneurship and its contribution to the living standard of the society (Doris el a 2012

Jaafar el a 2009) relatively little empirical evidence has been reported on other indigenous

communities in Malaysia apart from the Malay This motivates the current researcher to

explore the entrepreneurs potentials specifically in term of entrepreneurial intention among

Dayak native in Sarawak The study is concentrated on two possible aspects that could

influence individuals decision to start a new business Component variables on personality

traits and the communities social variables were taken into account

shy

Although massive entrepreneurship literatUre have d~tmmre8 middot~ue~es of personality bull I ~ i fo

traits (Deamer amp Earle 2004 Schmitt-Rodermund 2004 Gurol amp Atsan 2006 Pillis amp ~

Reardon 2007) and social variables (Morrison 2000 Schmitt-Rodermund 2004) on

entrepreneurship potential the present thesis explores these two factors within the context of

0 II I bull

1

entrepreneurship traits prior knowledge and as family upbringing in order to identify

entrepreneurial intentions among Dayak community

Furthennore Dayak youth are chosen for the present study as they are known as a countrys next generation ~ economic and social player It is a period when young people gradually

come to be recognized and to recognize themselves as adults It can also be a period of great

energy enthusiasm and creativity (Fussell 2006) Thus t is extremely essential to make sure

that they are well prepared for their futures as workers entrepreneurs parents citizens and

community leaders and to the course of poverty reduction and growth They begin to interact

independently with the broader community and establish their identity as individuals At this

stage they nonnally stand at one lifes turning points one at which they think about careers

(pruett et a 2009) and how to be successful

This becomes the underlying principle for the current researcher in choosing youth as her

respondents As younger generations are exposed to substantial economic political changes

and popular cultural trends measured by technological advances it is no doubt that they are

more exposed to foreign trends and ideas and more able to share their ideas (Hofstede

2(01) At the end of the Chapter 5 this thesis is expected to answer two research questions as

follow

1) What is the entrepreneurial intention level among Dayak youth in Sarawak

2) What are the factors that affect partfcipaiion Ofl)(ljialt you~~trPIi~WJ1rship

shy

t 2

11 Theoretical Background

Factors contributing to entrepreneurial intention have gained the attention of a number of

researchers (Segal el aI 2005 Pruett el aI 2009 Nabi amp Holden 2008) A number of researchers havt) debated the theoretical relevance of personality traits (Llewellyn amp Wilson

2003 Deamer amp Earle 2004 Shahhosseini el aI 2011) and influence of social variables

(Orhan amp Scott 2001 Roxas el aI 2008 Kirk~d 2009) to discover indigenous

entrepreneurship potential

The present study explores the entrepreneurship potential of unique native group in Sarawak

and examines the factors responsible for their participations in business sectors through

content and process variables Content variables focus on personality traits such as risk taking

propensity tolerance for ambiguity and innovativeness (Stewart amp Roth 2001 Wang amp

Zang 2005 Nicolaidis amp Katsaros 2011) while process variables consider knowledge and

experience attained as well as family upbringing which include family support financial

status and awareness (Morisson 2000 Schmitt-Rodermund 2004) The following section

provides the rationale of the present thesis identifying three significant reasons for

undertaking this research

12 Significance of Study t--1tbull ~bullbull bull

t

There are three reasons for investigating rel~t~onship J~etween personality traits social

variables and entrepreneurial intentions These reasons consider the urgent need to

empirically review the relationship between both indi~iduals aspects (personality traits and

social variables) and the intention of youth to involve in ~ntre~repeu~hip fh~ components of

3

personality traits for the present study are represented by three commonly described

entrepreneurship traits risk taking propensity innovativeness and tolerance of ambiguity

(Gurol amp Atsan 2006 Shahhosseini et aI 2011 Yildiz 2012) whereas the components of

social variables (Wyckham amp Wed ley 1990 Morrison 2000 Schmitt-Rodermund 2004 Bagheri amp PiHte 2011) are represented by attained knowledge and training or working

experiences as well as family upbringing

First research done on indigenous entrepreneurship in Malaysia (Jaafar et al 2009 Suhaila

amp Mohammad 2011 Fakrul amp Norhayate 2011 Doris et al 2012) targeted on specific

community mainly in West Malaysia whom are reported as more economically advanced

compared to other Bumiputeras in the country after the NEP and NDP eras (Government of

Malaysia 2005) By way of contrast the present study investigates the entrepreneurship

potential of indigenous communities in East Malaysia in particular Sarawak where higher

poverty rate is recorded Therefore in order to discover the potential of entrepreneurship

within Dayak community in Sarawak this project initiates the exploration of Dayaks

features and culture via their entrepreneurship traits and social setting as predictors to their

entrepreneurial intentions

Second researchers (Schumpeter 1934 Tamvada 2009 Marr amp Reynard 2010 Goel amp

Rishi 2012) also stressed out on the important role of entrepreneurship in economic growth

and poverty alleviation Tamvada (2009) afgUedll18tbttngmiddot ~f~emp~~yed improves a

persons welfare besides creates job opportunity as a povero-reduction tool At the same

time Marr and Reynard (2010) stated that the economic growth and transformation of four

rapidly emerging major economies (REMEs) countries they did survey on - Brazil China

India and Korea - are due to private enterprise and entrepreneurial acfiyities There is no bull [ Ii

4

Pusat Khidmat Maklumat Akademik UNIVERSID MALAYSIA SARAWAK

doubt that the Malaysian Government has set different types of policies to foster indigenous

business participation Thus this research provides a better understanding of the Dayak

description for policy makers NGOs and business support organizations particularly in

planning or utilizing government-support entrepreneurship programmes

Finally this study enables the readers to understand the level of Dayaks awareness towards

the concept of entrepreneurship and its benefits to the community group which still holds a I

gap in the literature Knowledge and skills are vital to enhance persons ability in order to

meet their basic needs in life and enable them to influence their life direction in almost every

situation By obtaining business-related education from primary level awareness on benefits

of entrepreneurship could be implanted from early age besides developing entrepreneurial

skills creativity and intention as well (Schmitt-Rodermund 2003 Pittaway amp Cope 2007

Alpkan et aJ 2010)

Otherwise efforts taken by the Sarawak Gdvernment to develop entrepreneurship skills

among Dayak could possibly become a tough mission as it is fundamentally not just

involving education and trainings but also changing mindset and attitude towards becoming

entrepreneurial Thus a key purpose of the present thesis is to gain an in depth understanding

of the Dayak youths entrepreneurship potential in strengthening entrepreneurship in

Malaysia

13 Researcb Objectives bull t

bull 11 ~ _ bull

The objectives of this study are twofold First the current observer is investigating the

potential of entrepreneurship among Dayak youth in Sarawak based on their imention to start

a business Second the potential of entrepreneurshi~ is also irlv~stlg~ted ~mpirically via the

5

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

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1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 3: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

APPROVAL PAGE

I certified that I have supervised and read this study and in my opinion it conforms to

acceptable standards of scholarly presentation and is fully adequate in scope and quality

as a research paper for the degree of Corporate Master in Business Administration

Dr Hamrila Abdul Latip Supervisor

This research paper was submitted to the Faculty of Economics and Business UNlMAS

and is accepted as partial fulfillment of the requirements for the degree of Corporate

Master in Business Administration

~I bull bull l bull I

11 Dr Mohammad Affendy Arip Dean Faculty of Economics and Business UNIMAS

I bull

ii

I

STATEMENT OF ORIGINALITY

The work described in this Research Paper entitled

Indigenous Entrepreneurship Entrepreneurial Intentions of Dayak Youth in Sarawak Malaysia

is to the best of the authors knowledge that of the author except

where due reference is made

6th August 2013 Date Ollince Anak Tateh

11031918 shy

- _

III

F

ABSTRACT

Indigenous Entrepreneurship Entrepreneurial Intentions of Dayak

Youth in Sarawak Malaysia

By

OLLINCE ANAK TATER

([hiS study involves two aspects that have major influence to entrepreneurship as

commonly described in literature the personality traits and social variables The interest

of study was on Dayak group in Sarawak comprises of Iban Bidayuh and Orang Ulu

(Bisayah Kayan Kenyah Kelabit and Berawan The present study finds that despite

increasing attention on indigenous entrepreneurship there remains a lack of

multidimensional research on entrepreneurial intentions of non-Malay indigenous

communities in Malaysia With the use of quantitative methods for data collection and

analysis the impacts of personality traits and social variables of the respondents on

development of their entrepreneurial intentions were investigated The findings showed

that the respondents entrepreneurial intentions could be predicted using both their

personality traits (innovativeness) and social variables (knowledge and experience

family upbringing)

Keywords Entrepreneurial Intentions Personality Traits Social Variables Indigenous Dayak

bull t I

bull i

~

xxx

J I bull I

~

IV

ABSTRAK

Keusahawanan Peribumi Niat Keusahawanan di Kalangan Delia Dayak di Sarawak Malaysia

Oleh

OLLINCE ANAK rATEH

Kajian ini melibatkan dua aspek yang mempengaruhi keusahawanan iaitu sifat

keperibadian dan unsur-unsur sosial Kajian ini adalah cenderung kepada kumpulan

kaum Dayak di Sarawak yang terdiri daripada kaum ban Bidayuh dan Orang Ulu

Bisaya Kayan Kenyah Kelabit dan Berawan Kajian ini mendapati meskipun

perhatian terhadap bidang keusahawanan oleh kaum peribumi semakin meningkat

namun masih terdapat kekurangan kajian tentang niat keusahawanan dalam kalangan

kaum peribumi bukan Melayu di Malaysia yang meliputi pelbagai dimensi Dengan

menggunakan kaedah kuantitatif bagi proses pengumpulan data dan analisis kajian ini

mengkaji impak sifat keperibadian serta unsur-unsur sosial respondens terhadap

keinginan mereka untuk menceburi bidang keusahawanan Hasil kajian ini menunjukkan

bahawa niat keusahawanan para respondens boleh dijangka berdasarkan kedua-dua

aspek yang dikaji yakni sifat keperibadian (inovatif) dan unsur-unsur sosial

(pengetahuan serta pengalaman dan latarbelakang keluarga)

Kata kunci Niat Keusahawanan Sifat Keperibadian Perubahan Sosial Peribumi fir bull bull t-_~- _ bull ~ ~

Dayak ~ ~I bull bull middot

I

v

ACKNOWLEDGEMENT

I would like to express my gratitude to all who supported and assisted me during this

CMBA journey especially my research supervisor Dr Hamrila A Latip for her guidance

my beloved family for their continuous supports and encouragement my colleagues for

their understanding which make it possible for me to finish this course and all my

CMBA friends who share an enthusiasm for learning and motivation

Special thank is also made to the Centre of Graduate Study (CGS) ofUniversity Malaysia

Sarawak (UNlMAS) for providing administration and assistance during my five

semesters with CMBA Sibu

I would also like to acknowledge the 161 respondents who completed my research

questionnaire and specific persons who helped me to reach the respondents from

different places (Kuching Betong Sibu Kanowit Bintulu and Miri) especially ZeJri

Rajaie Frederick SUI Baun Inu Puun Nicholas Guwang Priscelia Riip and Anniza Jack

I I bullbull I middotf bull [

VI

bull I

Pusat Khidmat Maklumat Akademik UNIVERSm MALAYSIA SARAWAK

TABLE OF CONTENTS

Page

LIST OF TABLES IlX

LIST OF FIGURES x

CHAPTER 1 INTRODUCTION

10 Introduction 1

11 Theoretical Background 3

12 Significance of Study 3 middot

13 Research Objectives 5

14 Scope of Study 6

CHAPTER 2 LITERATURE REVIEW

20 Introduction 8

21 Malaysian Poverty Eradication Plan 8

22 The Dayak Natives in Sarawak 10

23 Entrepreneurship Concept and Variables 231 Content Variables Personality Traits 14

Risk Taking Propensity 15

Tolerance ofAmbiguity 17

Innovativeness 18

232 Process Variables Social Variables 19

Family Upbringing 20

Knowledge and Experience 21shy

24 Hypothesized Relationship between Vrui~k1sect ~~ 23 ~l bull bull I

CHAPTER 3 METHODOLOGY 30 Introduction 25

31 Research Design

311 Sample Size 26 I

312 Respondents t 26

VB

313 Research Instruments 28

32 Statistical Methods

321 Data Transformation 32

322 Descriptive Analysis 32

323 Principal Component Analysis 33

324 Pearson Correlation Analysis 34

325 Multiple Regression Analysis 34

CHAPTER 4 EMPIRICAL RESULTS

40 Introduction 36

41 Descriptive Statistic 36 42 Validity and Reliability 38

43 Correlation Matrix 43

44 MUltiple Regression Analysis 47

441 Multiple Regression Model 49

CHAPTER 5 DISCUSSION AND CONCLUSION

50 Introduction 55

51 Personality Traits and Social Variables 55

52 Limitations and Implications of Study 57

53 Conclusion 59

REFERENCES 61

APPENDIX I

APPENDIX II

I bull I

Vlll

LIST OF TABLES

Page

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group 11 Table 31 Sample Characteristics 27

Table 32 Composite Variables of Entrepreneurial Intention 29

Table 33 Survey Items for Personality Traits 30

Table 34 Survey Items for Social Variables 31

Table 35 Assumptions for Multiple Regression Model 35

Table 4 1 Frequency of Dayak Youths Entrepreneurial Intentions 37

Table 42 Summary of Familys Background and Awareness on 37

Entrepreneurship

Table 43 Rotated Component Matrix of Personality Traits Items 40

Table 44 Item-Total Statistics of Factor 2 (Innovativeness) 41

Table 45 Rotated Component Matrix of Social Variables Items 42

Table 46 Pearson Correlation Matrix 43

Table 47 Model Summary of Personality Traits as Predictors 48

Table 48 Regression Coefficients ofPersonality Traits 48

Table 49 Model Summary of Social Variables as Predictors 48

Table 410 Regression Coefficients of Social Variables 49

Table 411 Summary ofAll Possible Models 51

Table 412 Summary of Model Y X2345 52

Table 413 Coefficients of Model Y X2bull345 52

Table 414 Summary of Model Y X245 53

Table 415 Coefficient of ModelY ~4bullbull _ ~bull~ 53 f ~i middotd

bull II _ bull

If I middotmiddot

IX

-

I

LIST OF FIGURES

Page

Figure 21 The Theory of Reasoned Action 24

Figure 22 Model of Intentions 24

Figure 41 Education Majoring 38

Tmiddot middot ~i bullbull bull t

f I I

x

lt -- ~

CHAPTERl

INTRODUCTION

10 Introduction

This thesis explores the potential of indigenous youth to involve in entrepreneurship by

investigating factors that contribute to their entrepreneurial intentions Within the context of a

quantitative design the present thesis explores two type~ of individuals assets personality

traits and social variables as predictors of entrepreneurial intentions possessed by Malaysian

indigenous communities grouped as Dayak

Entrepreneurship activities help develops a countrys economy and social wellness of one

particular society (Ahmad el al 2006) Despite an increasing interest in indigenous

entrepreneurship and its contribution to the living standard of the society (Doris el a 2012

Jaafar el a 2009) relatively little empirical evidence has been reported on other indigenous

communities in Malaysia apart from the Malay This motivates the current researcher to

explore the entrepreneurs potentials specifically in term of entrepreneurial intention among

Dayak native in Sarawak The study is concentrated on two possible aspects that could

influence individuals decision to start a new business Component variables on personality

traits and the communities social variables were taken into account

shy

Although massive entrepreneurship literatUre have d~tmmre8 middot~ue~es of personality bull I ~ i fo

traits (Deamer amp Earle 2004 Schmitt-Rodermund 2004 Gurol amp Atsan 2006 Pillis amp ~

Reardon 2007) and social variables (Morrison 2000 Schmitt-Rodermund 2004) on

entrepreneurship potential the present thesis explores these two factors within the context of

0 II I bull

1

entrepreneurship traits prior knowledge and as family upbringing in order to identify

entrepreneurial intentions among Dayak community

Furthennore Dayak youth are chosen for the present study as they are known as a countrys next generation ~ economic and social player It is a period when young people gradually

come to be recognized and to recognize themselves as adults It can also be a period of great

energy enthusiasm and creativity (Fussell 2006) Thus t is extremely essential to make sure

that they are well prepared for their futures as workers entrepreneurs parents citizens and

community leaders and to the course of poverty reduction and growth They begin to interact

independently with the broader community and establish their identity as individuals At this

stage they nonnally stand at one lifes turning points one at which they think about careers

(pruett et a 2009) and how to be successful

This becomes the underlying principle for the current researcher in choosing youth as her

respondents As younger generations are exposed to substantial economic political changes

and popular cultural trends measured by technological advances it is no doubt that they are

more exposed to foreign trends and ideas and more able to share their ideas (Hofstede

2(01) At the end of the Chapter 5 this thesis is expected to answer two research questions as

follow

1) What is the entrepreneurial intention level among Dayak youth in Sarawak

2) What are the factors that affect partfcipaiion Ofl)(ljialt you~~trPIi~WJ1rship

shy

t 2

11 Theoretical Background

Factors contributing to entrepreneurial intention have gained the attention of a number of

researchers (Segal el aI 2005 Pruett el aI 2009 Nabi amp Holden 2008) A number of researchers havt) debated the theoretical relevance of personality traits (Llewellyn amp Wilson

2003 Deamer amp Earle 2004 Shahhosseini el aI 2011) and influence of social variables

(Orhan amp Scott 2001 Roxas el aI 2008 Kirk~d 2009) to discover indigenous

entrepreneurship potential

The present study explores the entrepreneurship potential of unique native group in Sarawak

and examines the factors responsible for their participations in business sectors through

content and process variables Content variables focus on personality traits such as risk taking

propensity tolerance for ambiguity and innovativeness (Stewart amp Roth 2001 Wang amp

Zang 2005 Nicolaidis amp Katsaros 2011) while process variables consider knowledge and

experience attained as well as family upbringing which include family support financial

status and awareness (Morisson 2000 Schmitt-Rodermund 2004) The following section

provides the rationale of the present thesis identifying three significant reasons for

undertaking this research

12 Significance of Study t--1tbull ~bullbull bull

t

There are three reasons for investigating rel~t~onship J~etween personality traits social

variables and entrepreneurial intentions These reasons consider the urgent need to

empirically review the relationship between both indi~iduals aspects (personality traits and

social variables) and the intention of youth to involve in ~ntre~repeu~hip fh~ components of

3

personality traits for the present study are represented by three commonly described

entrepreneurship traits risk taking propensity innovativeness and tolerance of ambiguity

(Gurol amp Atsan 2006 Shahhosseini et aI 2011 Yildiz 2012) whereas the components of

social variables (Wyckham amp Wed ley 1990 Morrison 2000 Schmitt-Rodermund 2004 Bagheri amp PiHte 2011) are represented by attained knowledge and training or working

experiences as well as family upbringing

First research done on indigenous entrepreneurship in Malaysia (Jaafar et al 2009 Suhaila

amp Mohammad 2011 Fakrul amp Norhayate 2011 Doris et al 2012) targeted on specific

community mainly in West Malaysia whom are reported as more economically advanced

compared to other Bumiputeras in the country after the NEP and NDP eras (Government of

Malaysia 2005) By way of contrast the present study investigates the entrepreneurship

potential of indigenous communities in East Malaysia in particular Sarawak where higher

poverty rate is recorded Therefore in order to discover the potential of entrepreneurship

within Dayak community in Sarawak this project initiates the exploration of Dayaks

features and culture via their entrepreneurship traits and social setting as predictors to their

entrepreneurial intentions

Second researchers (Schumpeter 1934 Tamvada 2009 Marr amp Reynard 2010 Goel amp

Rishi 2012) also stressed out on the important role of entrepreneurship in economic growth

and poverty alleviation Tamvada (2009) afgUedll18tbttngmiddot ~f~emp~~yed improves a

persons welfare besides creates job opportunity as a povero-reduction tool At the same

time Marr and Reynard (2010) stated that the economic growth and transformation of four

rapidly emerging major economies (REMEs) countries they did survey on - Brazil China

India and Korea - are due to private enterprise and entrepreneurial acfiyities There is no bull [ Ii

4

Pusat Khidmat Maklumat Akademik UNIVERSID MALAYSIA SARAWAK

doubt that the Malaysian Government has set different types of policies to foster indigenous

business participation Thus this research provides a better understanding of the Dayak

description for policy makers NGOs and business support organizations particularly in

planning or utilizing government-support entrepreneurship programmes

Finally this study enables the readers to understand the level of Dayaks awareness towards

the concept of entrepreneurship and its benefits to the community group which still holds a I

gap in the literature Knowledge and skills are vital to enhance persons ability in order to

meet their basic needs in life and enable them to influence their life direction in almost every

situation By obtaining business-related education from primary level awareness on benefits

of entrepreneurship could be implanted from early age besides developing entrepreneurial

skills creativity and intention as well (Schmitt-Rodermund 2003 Pittaway amp Cope 2007

Alpkan et aJ 2010)

Otherwise efforts taken by the Sarawak Gdvernment to develop entrepreneurship skills

among Dayak could possibly become a tough mission as it is fundamentally not just

involving education and trainings but also changing mindset and attitude towards becoming

entrepreneurial Thus a key purpose of the present thesis is to gain an in depth understanding

of the Dayak youths entrepreneurship potential in strengthening entrepreneurship in

Malaysia

13 Researcb Objectives bull t

bull 11 ~ _ bull

The objectives of this study are twofold First the current observer is investigating the

potential of entrepreneurship among Dayak youth in Sarawak based on their imention to start

a business Second the potential of entrepreneurshi~ is also irlv~stlg~ted ~mpirically via the

5

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

-

1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 4: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

STATEMENT OF ORIGINALITY

The work described in this Research Paper entitled

Indigenous Entrepreneurship Entrepreneurial Intentions of Dayak Youth in Sarawak Malaysia

is to the best of the authors knowledge that of the author except

where due reference is made

6th August 2013 Date Ollince Anak Tateh

11031918 shy

- _

III

F

ABSTRACT

Indigenous Entrepreneurship Entrepreneurial Intentions of Dayak

Youth in Sarawak Malaysia

By

OLLINCE ANAK TATER

([hiS study involves two aspects that have major influence to entrepreneurship as

commonly described in literature the personality traits and social variables The interest

of study was on Dayak group in Sarawak comprises of Iban Bidayuh and Orang Ulu

(Bisayah Kayan Kenyah Kelabit and Berawan The present study finds that despite

increasing attention on indigenous entrepreneurship there remains a lack of

multidimensional research on entrepreneurial intentions of non-Malay indigenous

communities in Malaysia With the use of quantitative methods for data collection and

analysis the impacts of personality traits and social variables of the respondents on

development of their entrepreneurial intentions were investigated The findings showed

that the respondents entrepreneurial intentions could be predicted using both their

personality traits (innovativeness) and social variables (knowledge and experience

family upbringing)

Keywords Entrepreneurial Intentions Personality Traits Social Variables Indigenous Dayak

bull t I

bull i

~

xxx

J I bull I

~

IV

ABSTRAK

Keusahawanan Peribumi Niat Keusahawanan di Kalangan Delia Dayak di Sarawak Malaysia

Oleh

OLLINCE ANAK rATEH

Kajian ini melibatkan dua aspek yang mempengaruhi keusahawanan iaitu sifat

keperibadian dan unsur-unsur sosial Kajian ini adalah cenderung kepada kumpulan

kaum Dayak di Sarawak yang terdiri daripada kaum ban Bidayuh dan Orang Ulu

Bisaya Kayan Kenyah Kelabit dan Berawan Kajian ini mendapati meskipun

perhatian terhadap bidang keusahawanan oleh kaum peribumi semakin meningkat

namun masih terdapat kekurangan kajian tentang niat keusahawanan dalam kalangan

kaum peribumi bukan Melayu di Malaysia yang meliputi pelbagai dimensi Dengan

menggunakan kaedah kuantitatif bagi proses pengumpulan data dan analisis kajian ini

mengkaji impak sifat keperibadian serta unsur-unsur sosial respondens terhadap

keinginan mereka untuk menceburi bidang keusahawanan Hasil kajian ini menunjukkan

bahawa niat keusahawanan para respondens boleh dijangka berdasarkan kedua-dua

aspek yang dikaji yakni sifat keperibadian (inovatif) dan unsur-unsur sosial

(pengetahuan serta pengalaman dan latarbelakang keluarga)

Kata kunci Niat Keusahawanan Sifat Keperibadian Perubahan Sosial Peribumi fir bull bull t-_~- _ bull ~ ~

Dayak ~ ~I bull bull middot

I

v

ACKNOWLEDGEMENT

I would like to express my gratitude to all who supported and assisted me during this

CMBA journey especially my research supervisor Dr Hamrila A Latip for her guidance

my beloved family for their continuous supports and encouragement my colleagues for

their understanding which make it possible for me to finish this course and all my

CMBA friends who share an enthusiasm for learning and motivation

Special thank is also made to the Centre of Graduate Study (CGS) ofUniversity Malaysia

Sarawak (UNlMAS) for providing administration and assistance during my five

semesters with CMBA Sibu

I would also like to acknowledge the 161 respondents who completed my research

questionnaire and specific persons who helped me to reach the respondents from

different places (Kuching Betong Sibu Kanowit Bintulu and Miri) especially ZeJri

Rajaie Frederick SUI Baun Inu Puun Nicholas Guwang Priscelia Riip and Anniza Jack

I I bullbull I middotf bull [

VI

bull I

Pusat Khidmat Maklumat Akademik UNIVERSm MALAYSIA SARAWAK

TABLE OF CONTENTS

Page

LIST OF TABLES IlX

LIST OF FIGURES x

CHAPTER 1 INTRODUCTION

10 Introduction 1

11 Theoretical Background 3

12 Significance of Study 3 middot

13 Research Objectives 5

14 Scope of Study 6

CHAPTER 2 LITERATURE REVIEW

20 Introduction 8

21 Malaysian Poverty Eradication Plan 8

22 The Dayak Natives in Sarawak 10

23 Entrepreneurship Concept and Variables 231 Content Variables Personality Traits 14

Risk Taking Propensity 15

Tolerance ofAmbiguity 17

Innovativeness 18

232 Process Variables Social Variables 19

Family Upbringing 20

Knowledge and Experience 21shy

24 Hypothesized Relationship between Vrui~k1sect ~~ 23 ~l bull bull I

CHAPTER 3 METHODOLOGY 30 Introduction 25

31 Research Design

311 Sample Size 26 I

312 Respondents t 26

VB

313 Research Instruments 28

32 Statistical Methods

321 Data Transformation 32

322 Descriptive Analysis 32

323 Principal Component Analysis 33

324 Pearson Correlation Analysis 34

325 Multiple Regression Analysis 34

CHAPTER 4 EMPIRICAL RESULTS

40 Introduction 36

41 Descriptive Statistic 36 42 Validity and Reliability 38

43 Correlation Matrix 43

44 MUltiple Regression Analysis 47

441 Multiple Regression Model 49

CHAPTER 5 DISCUSSION AND CONCLUSION

50 Introduction 55

51 Personality Traits and Social Variables 55

52 Limitations and Implications of Study 57

53 Conclusion 59

REFERENCES 61

APPENDIX I

APPENDIX II

I bull I

Vlll

LIST OF TABLES

Page

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group 11 Table 31 Sample Characteristics 27

Table 32 Composite Variables of Entrepreneurial Intention 29

Table 33 Survey Items for Personality Traits 30

Table 34 Survey Items for Social Variables 31

Table 35 Assumptions for Multiple Regression Model 35

Table 4 1 Frequency of Dayak Youths Entrepreneurial Intentions 37

Table 42 Summary of Familys Background and Awareness on 37

Entrepreneurship

Table 43 Rotated Component Matrix of Personality Traits Items 40

Table 44 Item-Total Statistics of Factor 2 (Innovativeness) 41

Table 45 Rotated Component Matrix of Social Variables Items 42

Table 46 Pearson Correlation Matrix 43

Table 47 Model Summary of Personality Traits as Predictors 48

Table 48 Regression Coefficients ofPersonality Traits 48

Table 49 Model Summary of Social Variables as Predictors 48

Table 410 Regression Coefficients of Social Variables 49

Table 411 Summary ofAll Possible Models 51

Table 412 Summary of Model Y X2345 52

Table 413 Coefficients of Model Y X2bull345 52

Table 414 Summary of Model Y X245 53

Table 415 Coefficient of ModelY ~4bullbull _ ~bull~ 53 f ~i middotd

bull II _ bull

If I middotmiddot

IX

-

I

LIST OF FIGURES

Page

Figure 21 The Theory of Reasoned Action 24

Figure 22 Model of Intentions 24

Figure 41 Education Majoring 38

Tmiddot middot ~i bullbull bull t

f I I

x

lt -- ~

CHAPTERl

INTRODUCTION

10 Introduction

This thesis explores the potential of indigenous youth to involve in entrepreneurship by

investigating factors that contribute to their entrepreneurial intentions Within the context of a

quantitative design the present thesis explores two type~ of individuals assets personality

traits and social variables as predictors of entrepreneurial intentions possessed by Malaysian

indigenous communities grouped as Dayak

Entrepreneurship activities help develops a countrys economy and social wellness of one

particular society (Ahmad el al 2006) Despite an increasing interest in indigenous

entrepreneurship and its contribution to the living standard of the society (Doris el a 2012

Jaafar el a 2009) relatively little empirical evidence has been reported on other indigenous

communities in Malaysia apart from the Malay This motivates the current researcher to

explore the entrepreneurs potentials specifically in term of entrepreneurial intention among

Dayak native in Sarawak The study is concentrated on two possible aspects that could

influence individuals decision to start a new business Component variables on personality

traits and the communities social variables were taken into account

shy

Although massive entrepreneurship literatUre have d~tmmre8 middot~ue~es of personality bull I ~ i fo

traits (Deamer amp Earle 2004 Schmitt-Rodermund 2004 Gurol amp Atsan 2006 Pillis amp ~

Reardon 2007) and social variables (Morrison 2000 Schmitt-Rodermund 2004) on

entrepreneurship potential the present thesis explores these two factors within the context of

0 II I bull

1

entrepreneurship traits prior knowledge and as family upbringing in order to identify

entrepreneurial intentions among Dayak community

Furthennore Dayak youth are chosen for the present study as they are known as a countrys next generation ~ economic and social player It is a period when young people gradually

come to be recognized and to recognize themselves as adults It can also be a period of great

energy enthusiasm and creativity (Fussell 2006) Thus t is extremely essential to make sure

that they are well prepared for their futures as workers entrepreneurs parents citizens and

community leaders and to the course of poverty reduction and growth They begin to interact

independently with the broader community and establish their identity as individuals At this

stage they nonnally stand at one lifes turning points one at which they think about careers

(pruett et a 2009) and how to be successful

This becomes the underlying principle for the current researcher in choosing youth as her

respondents As younger generations are exposed to substantial economic political changes

and popular cultural trends measured by technological advances it is no doubt that they are

more exposed to foreign trends and ideas and more able to share their ideas (Hofstede

2(01) At the end of the Chapter 5 this thesis is expected to answer two research questions as

follow

1) What is the entrepreneurial intention level among Dayak youth in Sarawak

2) What are the factors that affect partfcipaiion Ofl)(ljialt you~~trPIi~WJ1rship

shy

t 2

11 Theoretical Background

Factors contributing to entrepreneurial intention have gained the attention of a number of

researchers (Segal el aI 2005 Pruett el aI 2009 Nabi amp Holden 2008) A number of researchers havt) debated the theoretical relevance of personality traits (Llewellyn amp Wilson

2003 Deamer amp Earle 2004 Shahhosseini el aI 2011) and influence of social variables

(Orhan amp Scott 2001 Roxas el aI 2008 Kirk~d 2009) to discover indigenous

entrepreneurship potential

The present study explores the entrepreneurship potential of unique native group in Sarawak

and examines the factors responsible for their participations in business sectors through

content and process variables Content variables focus on personality traits such as risk taking

propensity tolerance for ambiguity and innovativeness (Stewart amp Roth 2001 Wang amp

Zang 2005 Nicolaidis amp Katsaros 2011) while process variables consider knowledge and

experience attained as well as family upbringing which include family support financial

status and awareness (Morisson 2000 Schmitt-Rodermund 2004) The following section

provides the rationale of the present thesis identifying three significant reasons for

undertaking this research

12 Significance of Study t--1tbull ~bullbull bull

t

There are three reasons for investigating rel~t~onship J~etween personality traits social

variables and entrepreneurial intentions These reasons consider the urgent need to

empirically review the relationship between both indi~iduals aspects (personality traits and

social variables) and the intention of youth to involve in ~ntre~repeu~hip fh~ components of

3

personality traits for the present study are represented by three commonly described

entrepreneurship traits risk taking propensity innovativeness and tolerance of ambiguity

(Gurol amp Atsan 2006 Shahhosseini et aI 2011 Yildiz 2012) whereas the components of

social variables (Wyckham amp Wed ley 1990 Morrison 2000 Schmitt-Rodermund 2004 Bagheri amp PiHte 2011) are represented by attained knowledge and training or working

experiences as well as family upbringing

First research done on indigenous entrepreneurship in Malaysia (Jaafar et al 2009 Suhaila

amp Mohammad 2011 Fakrul amp Norhayate 2011 Doris et al 2012) targeted on specific

community mainly in West Malaysia whom are reported as more economically advanced

compared to other Bumiputeras in the country after the NEP and NDP eras (Government of

Malaysia 2005) By way of contrast the present study investigates the entrepreneurship

potential of indigenous communities in East Malaysia in particular Sarawak where higher

poverty rate is recorded Therefore in order to discover the potential of entrepreneurship

within Dayak community in Sarawak this project initiates the exploration of Dayaks

features and culture via their entrepreneurship traits and social setting as predictors to their

entrepreneurial intentions

Second researchers (Schumpeter 1934 Tamvada 2009 Marr amp Reynard 2010 Goel amp

Rishi 2012) also stressed out on the important role of entrepreneurship in economic growth

and poverty alleviation Tamvada (2009) afgUedll18tbttngmiddot ~f~emp~~yed improves a

persons welfare besides creates job opportunity as a povero-reduction tool At the same

time Marr and Reynard (2010) stated that the economic growth and transformation of four

rapidly emerging major economies (REMEs) countries they did survey on - Brazil China

India and Korea - are due to private enterprise and entrepreneurial acfiyities There is no bull [ Ii

4

Pusat Khidmat Maklumat Akademik UNIVERSID MALAYSIA SARAWAK

doubt that the Malaysian Government has set different types of policies to foster indigenous

business participation Thus this research provides a better understanding of the Dayak

description for policy makers NGOs and business support organizations particularly in

planning or utilizing government-support entrepreneurship programmes

Finally this study enables the readers to understand the level of Dayaks awareness towards

the concept of entrepreneurship and its benefits to the community group which still holds a I

gap in the literature Knowledge and skills are vital to enhance persons ability in order to

meet their basic needs in life and enable them to influence their life direction in almost every

situation By obtaining business-related education from primary level awareness on benefits

of entrepreneurship could be implanted from early age besides developing entrepreneurial

skills creativity and intention as well (Schmitt-Rodermund 2003 Pittaway amp Cope 2007

Alpkan et aJ 2010)

Otherwise efforts taken by the Sarawak Gdvernment to develop entrepreneurship skills

among Dayak could possibly become a tough mission as it is fundamentally not just

involving education and trainings but also changing mindset and attitude towards becoming

entrepreneurial Thus a key purpose of the present thesis is to gain an in depth understanding

of the Dayak youths entrepreneurship potential in strengthening entrepreneurship in

Malaysia

13 Researcb Objectives bull t

bull 11 ~ _ bull

The objectives of this study are twofold First the current observer is investigating the

potential of entrepreneurship among Dayak youth in Sarawak based on their imention to start

a business Second the potential of entrepreneurshi~ is also irlv~stlg~ted ~mpirically via the

5

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

-

1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 5: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

ABSTRACT

Indigenous Entrepreneurship Entrepreneurial Intentions of Dayak

Youth in Sarawak Malaysia

By

OLLINCE ANAK TATER

([hiS study involves two aspects that have major influence to entrepreneurship as

commonly described in literature the personality traits and social variables The interest

of study was on Dayak group in Sarawak comprises of Iban Bidayuh and Orang Ulu

(Bisayah Kayan Kenyah Kelabit and Berawan The present study finds that despite

increasing attention on indigenous entrepreneurship there remains a lack of

multidimensional research on entrepreneurial intentions of non-Malay indigenous

communities in Malaysia With the use of quantitative methods for data collection and

analysis the impacts of personality traits and social variables of the respondents on

development of their entrepreneurial intentions were investigated The findings showed

that the respondents entrepreneurial intentions could be predicted using both their

personality traits (innovativeness) and social variables (knowledge and experience

family upbringing)

Keywords Entrepreneurial Intentions Personality Traits Social Variables Indigenous Dayak

bull t I

bull i

~

xxx

J I bull I

~

IV

ABSTRAK

Keusahawanan Peribumi Niat Keusahawanan di Kalangan Delia Dayak di Sarawak Malaysia

Oleh

OLLINCE ANAK rATEH

Kajian ini melibatkan dua aspek yang mempengaruhi keusahawanan iaitu sifat

keperibadian dan unsur-unsur sosial Kajian ini adalah cenderung kepada kumpulan

kaum Dayak di Sarawak yang terdiri daripada kaum ban Bidayuh dan Orang Ulu

Bisaya Kayan Kenyah Kelabit dan Berawan Kajian ini mendapati meskipun

perhatian terhadap bidang keusahawanan oleh kaum peribumi semakin meningkat

namun masih terdapat kekurangan kajian tentang niat keusahawanan dalam kalangan

kaum peribumi bukan Melayu di Malaysia yang meliputi pelbagai dimensi Dengan

menggunakan kaedah kuantitatif bagi proses pengumpulan data dan analisis kajian ini

mengkaji impak sifat keperibadian serta unsur-unsur sosial respondens terhadap

keinginan mereka untuk menceburi bidang keusahawanan Hasil kajian ini menunjukkan

bahawa niat keusahawanan para respondens boleh dijangka berdasarkan kedua-dua

aspek yang dikaji yakni sifat keperibadian (inovatif) dan unsur-unsur sosial

(pengetahuan serta pengalaman dan latarbelakang keluarga)

Kata kunci Niat Keusahawanan Sifat Keperibadian Perubahan Sosial Peribumi fir bull bull t-_~- _ bull ~ ~

Dayak ~ ~I bull bull middot

I

v

ACKNOWLEDGEMENT

I would like to express my gratitude to all who supported and assisted me during this

CMBA journey especially my research supervisor Dr Hamrila A Latip for her guidance

my beloved family for their continuous supports and encouragement my colleagues for

their understanding which make it possible for me to finish this course and all my

CMBA friends who share an enthusiasm for learning and motivation

Special thank is also made to the Centre of Graduate Study (CGS) ofUniversity Malaysia

Sarawak (UNlMAS) for providing administration and assistance during my five

semesters with CMBA Sibu

I would also like to acknowledge the 161 respondents who completed my research

questionnaire and specific persons who helped me to reach the respondents from

different places (Kuching Betong Sibu Kanowit Bintulu and Miri) especially ZeJri

Rajaie Frederick SUI Baun Inu Puun Nicholas Guwang Priscelia Riip and Anniza Jack

I I bullbull I middotf bull [

VI

bull I

Pusat Khidmat Maklumat Akademik UNIVERSm MALAYSIA SARAWAK

TABLE OF CONTENTS

Page

LIST OF TABLES IlX

LIST OF FIGURES x

CHAPTER 1 INTRODUCTION

10 Introduction 1

11 Theoretical Background 3

12 Significance of Study 3 middot

13 Research Objectives 5

14 Scope of Study 6

CHAPTER 2 LITERATURE REVIEW

20 Introduction 8

21 Malaysian Poverty Eradication Plan 8

22 The Dayak Natives in Sarawak 10

23 Entrepreneurship Concept and Variables 231 Content Variables Personality Traits 14

Risk Taking Propensity 15

Tolerance ofAmbiguity 17

Innovativeness 18

232 Process Variables Social Variables 19

Family Upbringing 20

Knowledge and Experience 21shy

24 Hypothesized Relationship between Vrui~k1sect ~~ 23 ~l bull bull I

CHAPTER 3 METHODOLOGY 30 Introduction 25

31 Research Design

311 Sample Size 26 I

312 Respondents t 26

VB

313 Research Instruments 28

32 Statistical Methods

321 Data Transformation 32

322 Descriptive Analysis 32

323 Principal Component Analysis 33

324 Pearson Correlation Analysis 34

325 Multiple Regression Analysis 34

CHAPTER 4 EMPIRICAL RESULTS

40 Introduction 36

41 Descriptive Statistic 36 42 Validity and Reliability 38

43 Correlation Matrix 43

44 MUltiple Regression Analysis 47

441 Multiple Regression Model 49

CHAPTER 5 DISCUSSION AND CONCLUSION

50 Introduction 55

51 Personality Traits and Social Variables 55

52 Limitations and Implications of Study 57

53 Conclusion 59

REFERENCES 61

APPENDIX I

APPENDIX II

I bull I

Vlll

LIST OF TABLES

Page

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group 11 Table 31 Sample Characteristics 27

Table 32 Composite Variables of Entrepreneurial Intention 29

Table 33 Survey Items for Personality Traits 30

Table 34 Survey Items for Social Variables 31

Table 35 Assumptions for Multiple Regression Model 35

Table 4 1 Frequency of Dayak Youths Entrepreneurial Intentions 37

Table 42 Summary of Familys Background and Awareness on 37

Entrepreneurship

Table 43 Rotated Component Matrix of Personality Traits Items 40

Table 44 Item-Total Statistics of Factor 2 (Innovativeness) 41

Table 45 Rotated Component Matrix of Social Variables Items 42

Table 46 Pearson Correlation Matrix 43

Table 47 Model Summary of Personality Traits as Predictors 48

Table 48 Regression Coefficients ofPersonality Traits 48

Table 49 Model Summary of Social Variables as Predictors 48

Table 410 Regression Coefficients of Social Variables 49

Table 411 Summary ofAll Possible Models 51

Table 412 Summary of Model Y X2345 52

Table 413 Coefficients of Model Y X2bull345 52

Table 414 Summary of Model Y X245 53

Table 415 Coefficient of ModelY ~4bullbull _ ~bull~ 53 f ~i middotd

bull II _ bull

If I middotmiddot

IX

-

I

LIST OF FIGURES

Page

Figure 21 The Theory of Reasoned Action 24

Figure 22 Model of Intentions 24

Figure 41 Education Majoring 38

Tmiddot middot ~i bullbull bull t

f I I

x

lt -- ~

CHAPTERl

INTRODUCTION

10 Introduction

This thesis explores the potential of indigenous youth to involve in entrepreneurship by

investigating factors that contribute to their entrepreneurial intentions Within the context of a

quantitative design the present thesis explores two type~ of individuals assets personality

traits and social variables as predictors of entrepreneurial intentions possessed by Malaysian

indigenous communities grouped as Dayak

Entrepreneurship activities help develops a countrys economy and social wellness of one

particular society (Ahmad el al 2006) Despite an increasing interest in indigenous

entrepreneurship and its contribution to the living standard of the society (Doris el a 2012

Jaafar el a 2009) relatively little empirical evidence has been reported on other indigenous

communities in Malaysia apart from the Malay This motivates the current researcher to

explore the entrepreneurs potentials specifically in term of entrepreneurial intention among

Dayak native in Sarawak The study is concentrated on two possible aspects that could

influence individuals decision to start a new business Component variables on personality

traits and the communities social variables were taken into account

shy

Although massive entrepreneurship literatUre have d~tmmre8 middot~ue~es of personality bull I ~ i fo

traits (Deamer amp Earle 2004 Schmitt-Rodermund 2004 Gurol amp Atsan 2006 Pillis amp ~

Reardon 2007) and social variables (Morrison 2000 Schmitt-Rodermund 2004) on

entrepreneurship potential the present thesis explores these two factors within the context of

0 II I bull

1

entrepreneurship traits prior knowledge and as family upbringing in order to identify

entrepreneurial intentions among Dayak community

Furthennore Dayak youth are chosen for the present study as they are known as a countrys next generation ~ economic and social player It is a period when young people gradually

come to be recognized and to recognize themselves as adults It can also be a period of great

energy enthusiasm and creativity (Fussell 2006) Thus t is extremely essential to make sure

that they are well prepared for their futures as workers entrepreneurs parents citizens and

community leaders and to the course of poverty reduction and growth They begin to interact

independently with the broader community and establish their identity as individuals At this

stage they nonnally stand at one lifes turning points one at which they think about careers

(pruett et a 2009) and how to be successful

This becomes the underlying principle for the current researcher in choosing youth as her

respondents As younger generations are exposed to substantial economic political changes

and popular cultural trends measured by technological advances it is no doubt that they are

more exposed to foreign trends and ideas and more able to share their ideas (Hofstede

2(01) At the end of the Chapter 5 this thesis is expected to answer two research questions as

follow

1) What is the entrepreneurial intention level among Dayak youth in Sarawak

2) What are the factors that affect partfcipaiion Ofl)(ljialt you~~trPIi~WJ1rship

shy

t 2

11 Theoretical Background

Factors contributing to entrepreneurial intention have gained the attention of a number of

researchers (Segal el aI 2005 Pruett el aI 2009 Nabi amp Holden 2008) A number of researchers havt) debated the theoretical relevance of personality traits (Llewellyn amp Wilson

2003 Deamer amp Earle 2004 Shahhosseini el aI 2011) and influence of social variables

(Orhan amp Scott 2001 Roxas el aI 2008 Kirk~d 2009) to discover indigenous

entrepreneurship potential

The present study explores the entrepreneurship potential of unique native group in Sarawak

and examines the factors responsible for their participations in business sectors through

content and process variables Content variables focus on personality traits such as risk taking

propensity tolerance for ambiguity and innovativeness (Stewart amp Roth 2001 Wang amp

Zang 2005 Nicolaidis amp Katsaros 2011) while process variables consider knowledge and

experience attained as well as family upbringing which include family support financial

status and awareness (Morisson 2000 Schmitt-Rodermund 2004) The following section

provides the rationale of the present thesis identifying three significant reasons for

undertaking this research

12 Significance of Study t--1tbull ~bullbull bull

t

There are three reasons for investigating rel~t~onship J~etween personality traits social

variables and entrepreneurial intentions These reasons consider the urgent need to

empirically review the relationship between both indi~iduals aspects (personality traits and

social variables) and the intention of youth to involve in ~ntre~repeu~hip fh~ components of

3

personality traits for the present study are represented by three commonly described

entrepreneurship traits risk taking propensity innovativeness and tolerance of ambiguity

(Gurol amp Atsan 2006 Shahhosseini et aI 2011 Yildiz 2012) whereas the components of

social variables (Wyckham amp Wed ley 1990 Morrison 2000 Schmitt-Rodermund 2004 Bagheri amp PiHte 2011) are represented by attained knowledge and training or working

experiences as well as family upbringing

First research done on indigenous entrepreneurship in Malaysia (Jaafar et al 2009 Suhaila

amp Mohammad 2011 Fakrul amp Norhayate 2011 Doris et al 2012) targeted on specific

community mainly in West Malaysia whom are reported as more economically advanced

compared to other Bumiputeras in the country after the NEP and NDP eras (Government of

Malaysia 2005) By way of contrast the present study investigates the entrepreneurship

potential of indigenous communities in East Malaysia in particular Sarawak where higher

poverty rate is recorded Therefore in order to discover the potential of entrepreneurship

within Dayak community in Sarawak this project initiates the exploration of Dayaks

features and culture via their entrepreneurship traits and social setting as predictors to their

entrepreneurial intentions

Second researchers (Schumpeter 1934 Tamvada 2009 Marr amp Reynard 2010 Goel amp

Rishi 2012) also stressed out on the important role of entrepreneurship in economic growth

and poverty alleviation Tamvada (2009) afgUedll18tbttngmiddot ~f~emp~~yed improves a

persons welfare besides creates job opportunity as a povero-reduction tool At the same

time Marr and Reynard (2010) stated that the economic growth and transformation of four

rapidly emerging major economies (REMEs) countries they did survey on - Brazil China

India and Korea - are due to private enterprise and entrepreneurial acfiyities There is no bull [ Ii

4

Pusat Khidmat Maklumat Akademik UNIVERSID MALAYSIA SARAWAK

doubt that the Malaysian Government has set different types of policies to foster indigenous

business participation Thus this research provides a better understanding of the Dayak

description for policy makers NGOs and business support organizations particularly in

planning or utilizing government-support entrepreneurship programmes

Finally this study enables the readers to understand the level of Dayaks awareness towards

the concept of entrepreneurship and its benefits to the community group which still holds a I

gap in the literature Knowledge and skills are vital to enhance persons ability in order to

meet their basic needs in life and enable them to influence their life direction in almost every

situation By obtaining business-related education from primary level awareness on benefits

of entrepreneurship could be implanted from early age besides developing entrepreneurial

skills creativity and intention as well (Schmitt-Rodermund 2003 Pittaway amp Cope 2007

Alpkan et aJ 2010)

Otherwise efforts taken by the Sarawak Gdvernment to develop entrepreneurship skills

among Dayak could possibly become a tough mission as it is fundamentally not just

involving education and trainings but also changing mindset and attitude towards becoming

entrepreneurial Thus a key purpose of the present thesis is to gain an in depth understanding

of the Dayak youths entrepreneurship potential in strengthening entrepreneurship in

Malaysia

13 Researcb Objectives bull t

bull 11 ~ _ bull

The objectives of this study are twofold First the current observer is investigating the

potential of entrepreneurship among Dayak youth in Sarawak based on their imention to start

a business Second the potential of entrepreneurshi~ is also irlv~stlg~ted ~mpirically via the

5

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

-

1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 6: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

ABSTRAK

Keusahawanan Peribumi Niat Keusahawanan di Kalangan Delia Dayak di Sarawak Malaysia

Oleh

OLLINCE ANAK rATEH

Kajian ini melibatkan dua aspek yang mempengaruhi keusahawanan iaitu sifat

keperibadian dan unsur-unsur sosial Kajian ini adalah cenderung kepada kumpulan

kaum Dayak di Sarawak yang terdiri daripada kaum ban Bidayuh dan Orang Ulu

Bisaya Kayan Kenyah Kelabit dan Berawan Kajian ini mendapati meskipun

perhatian terhadap bidang keusahawanan oleh kaum peribumi semakin meningkat

namun masih terdapat kekurangan kajian tentang niat keusahawanan dalam kalangan

kaum peribumi bukan Melayu di Malaysia yang meliputi pelbagai dimensi Dengan

menggunakan kaedah kuantitatif bagi proses pengumpulan data dan analisis kajian ini

mengkaji impak sifat keperibadian serta unsur-unsur sosial respondens terhadap

keinginan mereka untuk menceburi bidang keusahawanan Hasil kajian ini menunjukkan

bahawa niat keusahawanan para respondens boleh dijangka berdasarkan kedua-dua

aspek yang dikaji yakni sifat keperibadian (inovatif) dan unsur-unsur sosial

(pengetahuan serta pengalaman dan latarbelakang keluarga)

Kata kunci Niat Keusahawanan Sifat Keperibadian Perubahan Sosial Peribumi fir bull bull t-_~- _ bull ~ ~

Dayak ~ ~I bull bull middot

I

v

ACKNOWLEDGEMENT

I would like to express my gratitude to all who supported and assisted me during this

CMBA journey especially my research supervisor Dr Hamrila A Latip for her guidance

my beloved family for their continuous supports and encouragement my colleagues for

their understanding which make it possible for me to finish this course and all my

CMBA friends who share an enthusiasm for learning and motivation

Special thank is also made to the Centre of Graduate Study (CGS) ofUniversity Malaysia

Sarawak (UNlMAS) for providing administration and assistance during my five

semesters with CMBA Sibu

I would also like to acknowledge the 161 respondents who completed my research

questionnaire and specific persons who helped me to reach the respondents from

different places (Kuching Betong Sibu Kanowit Bintulu and Miri) especially ZeJri

Rajaie Frederick SUI Baun Inu Puun Nicholas Guwang Priscelia Riip and Anniza Jack

I I bullbull I middotf bull [

VI

bull I

Pusat Khidmat Maklumat Akademik UNIVERSm MALAYSIA SARAWAK

TABLE OF CONTENTS

Page

LIST OF TABLES IlX

LIST OF FIGURES x

CHAPTER 1 INTRODUCTION

10 Introduction 1

11 Theoretical Background 3

12 Significance of Study 3 middot

13 Research Objectives 5

14 Scope of Study 6

CHAPTER 2 LITERATURE REVIEW

20 Introduction 8

21 Malaysian Poverty Eradication Plan 8

22 The Dayak Natives in Sarawak 10

23 Entrepreneurship Concept and Variables 231 Content Variables Personality Traits 14

Risk Taking Propensity 15

Tolerance ofAmbiguity 17

Innovativeness 18

232 Process Variables Social Variables 19

Family Upbringing 20

Knowledge and Experience 21shy

24 Hypothesized Relationship between Vrui~k1sect ~~ 23 ~l bull bull I

CHAPTER 3 METHODOLOGY 30 Introduction 25

31 Research Design

311 Sample Size 26 I

312 Respondents t 26

VB

313 Research Instruments 28

32 Statistical Methods

321 Data Transformation 32

322 Descriptive Analysis 32

323 Principal Component Analysis 33

324 Pearson Correlation Analysis 34

325 Multiple Regression Analysis 34

CHAPTER 4 EMPIRICAL RESULTS

40 Introduction 36

41 Descriptive Statistic 36 42 Validity and Reliability 38

43 Correlation Matrix 43

44 MUltiple Regression Analysis 47

441 Multiple Regression Model 49

CHAPTER 5 DISCUSSION AND CONCLUSION

50 Introduction 55

51 Personality Traits and Social Variables 55

52 Limitations and Implications of Study 57

53 Conclusion 59

REFERENCES 61

APPENDIX I

APPENDIX II

I bull I

Vlll

LIST OF TABLES

Page

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group 11 Table 31 Sample Characteristics 27

Table 32 Composite Variables of Entrepreneurial Intention 29

Table 33 Survey Items for Personality Traits 30

Table 34 Survey Items for Social Variables 31

Table 35 Assumptions for Multiple Regression Model 35

Table 4 1 Frequency of Dayak Youths Entrepreneurial Intentions 37

Table 42 Summary of Familys Background and Awareness on 37

Entrepreneurship

Table 43 Rotated Component Matrix of Personality Traits Items 40

Table 44 Item-Total Statistics of Factor 2 (Innovativeness) 41

Table 45 Rotated Component Matrix of Social Variables Items 42

Table 46 Pearson Correlation Matrix 43

Table 47 Model Summary of Personality Traits as Predictors 48

Table 48 Regression Coefficients ofPersonality Traits 48

Table 49 Model Summary of Social Variables as Predictors 48

Table 410 Regression Coefficients of Social Variables 49

Table 411 Summary ofAll Possible Models 51

Table 412 Summary of Model Y X2345 52

Table 413 Coefficients of Model Y X2bull345 52

Table 414 Summary of Model Y X245 53

Table 415 Coefficient of ModelY ~4bullbull _ ~bull~ 53 f ~i middotd

bull II _ bull

If I middotmiddot

IX

-

I

LIST OF FIGURES

Page

Figure 21 The Theory of Reasoned Action 24

Figure 22 Model of Intentions 24

Figure 41 Education Majoring 38

Tmiddot middot ~i bullbull bull t

f I I

x

lt -- ~

CHAPTERl

INTRODUCTION

10 Introduction

This thesis explores the potential of indigenous youth to involve in entrepreneurship by

investigating factors that contribute to their entrepreneurial intentions Within the context of a

quantitative design the present thesis explores two type~ of individuals assets personality

traits and social variables as predictors of entrepreneurial intentions possessed by Malaysian

indigenous communities grouped as Dayak

Entrepreneurship activities help develops a countrys economy and social wellness of one

particular society (Ahmad el al 2006) Despite an increasing interest in indigenous

entrepreneurship and its contribution to the living standard of the society (Doris el a 2012

Jaafar el a 2009) relatively little empirical evidence has been reported on other indigenous

communities in Malaysia apart from the Malay This motivates the current researcher to

explore the entrepreneurs potentials specifically in term of entrepreneurial intention among

Dayak native in Sarawak The study is concentrated on two possible aspects that could

influence individuals decision to start a new business Component variables on personality

traits and the communities social variables were taken into account

shy

Although massive entrepreneurship literatUre have d~tmmre8 middot~ue~es of personality bull I ~ i fo

traits (Deamer amp Earle 2004 Schmitt-Rodermund 2004 Gurol amp Atsan 2006 Pillis amp ~

Reardon 2007) and social variables (Morrison 2000 Schmitt-Rodermund 2004) on

entrepreneurship potential the present thesis explores these two factors within the context of

0 II I bull

1

entrepreneurship traits prior knowledge and as family upbringing in order to identify

entrepreneurial intentions among Dayak community

Furthennore Dayak youth are chosen for the present study as they are known as a countrys next generation ~ economic and social player It is a period when young people gradually

come to be recognized and to recognize themselves as adults It can also be a period of great

energy enthusiasm and creativity (Fussell 2006) Thus t is extremely essential to make sure

that they are well prepared for their futures as workers entrepreneurs parents citizens and

community leaders and to the course of poverty reduction and growth They begin to interact

independently with the broader community and establish their identity as individuals At this

stage they nonnally stand at one lifes turning points one at which they think about careers

(pruett et a 2009) and how to be successful

This becomes the underlying principle for the current researcher in choosing youth as her

respondents As younger generations are exposed to substantial economic political changes

and popular cultural trends measured by technological advances it is no doubt that they are

more exposed to foreign trends and ideas and more able to share their ideas (Hofstede

2(01) At the end of the Chapter 5 this thesis is expected to answer two research questions as

follow

1) What is the entrepreneurial intention level among Dayak youth in Sarawak

2) What are the factors that affect partfcipaiion Ofl)(ljialt you~~trPIi~WJ1rship

shy

t 2

11 Theoretical Background

Factors contributing to entrepreneurial intention have gained the attention of a number of

researchers (Segal el aI 2005 Pruett el aI 2009 Nabi amp Holden 2008) A number of researchers havt) debated the theoretical relevance of personality traits (Llewellyn amp Wilson

2003 Deamer amp Earle 2004 Shahhosseini el aI 2011) and influence of social variables

(Orhan amp Scott 2001 Roxas el aI 2008 Kirk~d 2009) to discover indigenous

entrepreneurship potential

The present study explores the entrepreneurship potential of unique native group in Sarawak

and examines the factors responsible for their participations in business sectors through

content and process variables Content variables focus on personality traits such as risk taking

propensity tolerance for ambiguity and innovativeness (Stewart amp Roth 2001 Wang amp

Zang 2005 Nicolaidis amp Katsaros 2011) while process variables consider knowledge and

experience attained as well as family upbringing which include family support financial

status and awareness (Morisson 2000 Schmitt-Rodermund 2004) The following section

provides the rationale of the present thesis identifying three significant reasons for

undertaking this research

12 Significance of Study t--1tbull ~bullbull bull

t

There are three reasons for investigating rel~t~onship J~etween personality traits social

variables and entrepreneurial intentions These reasons consider the urgent need to

empirically review the relationship between both indi~iduals aspects (personality traits and

social variables) and the intention of youth to involve in ~ntre~repeu~hip fh~ components of

3

personality traits for the present study are represented by three commonly described

entrepreneurship traits risk taking propensity innovativeness and tolerance of ambiguity

(Gurol amp Atsan 2006 Shahhosseini et aI 2011 Yildiz 2012) whereas the components of

social variables (Wyckham amp Wed ley 1990 Morrison 2000 Schmitt-Rodermund 2004 Bagheri amp PiHte 2011) are represented by attained knowledge and training or working

experiences as well as family upbringing

First research done on indigenous entrepreneurship in Malaysia (Jaafar et al 2009 Suhaila

amp Mohammad 2011 Fakrul amp Norhayate 2011 Doris et al 2012) targeted on specific

community mainly in West Malaysia whom are reported as more economically advanced

compared to other Bumiputeras in the country after the NEP and NDP eras (Government of

Malaysia 2005) By way of contrast the present study investigates the entrepreneurship

potential of indigenous communities in East Malaysia in particular Sarawak where higher

poverty rate is recorded Therefore in order to discover the potential of entrepreneurship

within Dayak community in Sarawak this project initiates the exploration of Dayaks

features and culture via their entrepreneurship traits and social setting as predictors to their

entrepreneurial intentions

Second researchers (Schumpeter 1934 Tamvada 2009 Marr amp Reynard 2010 Goel amp

Rishi 2012) also stressed out on the important role of entrepreneurship in economic growth

and poverty alleviation Tamvada (2009) afgUedll18tbttngmiddot ~f~emp~~yed improves a

persons welfare besides creates job opportunity as a povero-reduction tool At the same

time Marr and Reynard (2010) stated that the economic growth and transformation of four

rapidly emerging major economies (REMEs) countries they did survey on - Brazil China

India and Korea - are due to private enterprise and entrepreneurial acfiyities There is no bull [ Ii

4

Pusat Khidmat Maklumat Akademik UNIVERSID MALAYSIA SARAWAK

doubt that the Malaysian Government has set different types of policies to foster indigenous

business participation Thus this research provides a better understanding of the Dayak

description for policy makers NGOs and business support organizations particularly in

planning or utilizing government-support entrepreneurship programmes

Finally this study enables the readers to understand the level of Dayaks awareness towards

the concept of entrepreneurship and its benefits to the community group which still holds a I

gap in the literature Knowledge and skills are vital to enhance persons ability in order to

meet their basic needs in life and enable them to influence their life direction in almost every

situation By obtaining business-related education from primary level awareness on benefits

of entrepreneurship could be implanted from early age besides developing entrepreneurial

skills creativity and intention as well (Schmitt-Rodermund 2003 Pittaway amp Cope 2007

Alpkan et aJ 2010)

Otherwise efforts taken by the Sarawak Gdvernment to develop entrepreneurship skills

among Dayak could possibly become a tough mission as it is fundamentally not just

involving education and trainings but also changing mindset and attitude towards becoming

entrepreneurial Thus a key purpose of the present thesis is to gain an in depth understanding

of the Dayak youths entrepreneurship potential in strengthening entrepreneurship in

Malaysia

13 Researcb Objectives bull t

bull 11 ~ _ bull

The objectives of this study are twofold First the current observer is investigating the

potential of entrepreneurship among Dayak youth in Sarawak based on their imention to start

a business Second the potential of entrepreneurshi~ is also irlv~stlg~ted ~mpirically via the

5

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

-

1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 7: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

ACKNOWLEDGEMENT

I would like to express my gratitude to all who supported and assisted me during this

CMBA journey especially my research supervisor Dr Hamrila A Latip for her guidance

my beloved family for their continuous supports and encouragement my colleagues for

their understanding which make it possible for me to finish this course and all my

CMBA friends who share an enthusiasm for learning and motivation

Special thank is also made to the Centre of Graduate Study (CGS) ofUniversity Malaysia

Sarawak (UNlMAS) for providing administration and assistance during my five

semesters with CMBA Sibu

I would also like to acknowledge the 161 respondents who completed my research

questionnaire and specific persons who helped me to reach the respondents from

different places (Kuching Betong Sibu Kanowit Bintulu and Miri) especially ZeJri

Rajaie Frederick SUI Baun Inu Puun Nicholas Guwang Priscelia Riip and Anniza Jack

I I bullbull I middotf bull [

VI

bull I

Pusat Khidmat Maklumat Akademik UNIVERSm MALAYSIA SARAWAK

TABLE OF CONTENTS

Page

LIST OF TABLES IlX

LIST OF FIGURES x

CHAPTER 1 INTRODUCTION

10 Introduction 1

11 Theoretical Background 3

12 Significance of Study 3 middot

13 Research Objectives 5

14 Scope of Study 6

CHAPTER 2 LITERATURE REVIEW

20 Introduction 8

21 Malaysian Poverty Eradication Plan 8

22 The Dayak Natives in Sarawak 10

23 Entrepreneurship Concept and Variables 231 Content Variables Personality Traits 14

Risk Taking Propensity 15

Tolerance ofAmbiguity 17

Innovativeness 18

232 Process Variables Social Variables 19

Family Upbringing 20

Knowledge and Experience 21shy

24 Hypothesized Relationship between Vrui~k1sect ~~ 23 ~l bull bull I

CHAPTER 3 METHODOLOGY 30 Introduction 25

31 Research Design

311 Sample Size 26 I

312 Respondents t 26

VB

313 Research Instruments 28

32 Statistical Methods

321 Data Transformation 32

322 Descriptive Analysis 32

323 Principal Component Analysis 33

324 Pearson Correlation Analysis 34

325 Multiple Regression Analysis 34

CHAPTER 4 EMPIRICAL RESULTS

40 Introduction 36

41 Descriptive Statistic 36 42 Validity and Reliability 38

43 Correlation Matrix 43

44 MUltiple Regression Analysis 47

441 Multiple Regression Model 49

CHAPTER 5 DISCUSSION AND CONCLUSION

50 Introduction 55

51 Personality Traits and Social Variables 55

52 Limitations and Implications of Study 57

53 Conclusion 59

REFERENCES 61

APPENDIX I

APPENDIX II

I bull I

Vlll

LIST OF TABLES

Page

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group 11 Table 31 Sample Characteristics 27

Table 32 Composite Variables of Entrepreneurial Intention 29

Table 33 Survey Items for Personality Traits 30

Table 34 Survey Items for Social Variables 31

Table 35 Assumptions for Multiple Regression Model 35

Table 4 1 Frequency of Dayak Youths Entrepreneurial Intentions 37

Table 42 Summary of Familys Background and Awareness on 37

Entrepreneurship

Table 43 Rotated Component Matrix of Personality Traits Items 40

Table 44 Item-Total Statistics of Factor 2 (Innovativeness) 41

Table 45 Rotated Component Matrix of Social Variables Items 42

Table 46 Pearson Correlation Matrix 43

Table 47 Model Summary of Personality Traits as Predictors 48

Table 48 Regression Coefficients ofPersonality Traits 48

Table 49 Model Summary of Social Variables as Predictors 48

Table 410 Regression Coefficients of Social Variables 49

Table 411 Summary ofAll Possible Models 51

Table 412 Summary of Model Y X2345 52

Table 413 Coefficients of Model Y X2bull345 52

Table 414 Summary of Model Y X245 53

Table 415 Coefficient of ModelY ~4bullbull _ ~bull~ 53 f ~i middotd

bull II _ bull

If I middotmiddot

IX

-

I

LIST OF FIGURES

Page

Figure 21 The Theory of Reasoned Action 24

Figure 22 Model of Intentions 24

Figure 41 Education Majoring 38

Tmiddot middot ~i bullbull bull t

f I I

x

lt -- ~

CHAPTERl

INTRODUCTION

10 Introduction

This thesis explores the potential of indigenous youth to involve in entrepreneurship by

investigating factors that contribute to their entrepreneurial intentions Within the context of a

quantitative design the present thesis explores two type~ of individuals assets personality

traits and social variables as predictors of entrepreneurial intentions possessed by Malaysian

indigenous communities grouped as Dayak

Entrepreneurship activities help develops a countrys economy and social wellness of one

particular society (Ahmad el al 2006) Despite an increasing interest in indigenous

entrepreneurship and its contribution to the living standard of the society (Doris el a 2012

Jaafar el a 2009) relatively little empirical evidence has been reported on other indigenous

communities in Malaysia apart from the Malay This motivates the current researcher to

explore the entrepreneurs potentials specifically in term of entrepreneurial intention among

Dayak native in Sarawak The study is concentrated on two possible aspects that could

influence individuals decision to start a new business Component variables on personality

traits and the communities social variables were taken into account

shy

Although massive entrepreneurship literatUre have d~tmmre8 middot~ue~es of personality bull I ~ i fo

traits (Deamer amp Earle 2004 Schmitt-Rodermund 2004 Gurol amp Atsan 2006 Pillis amp ~

Reardon 2007) and social variables (Morrison 2000 Schmitt-Rodermund 2004) on

entrepreneurship potential the present thesis explores these two factors within the context of

0 II I bull

1

entrepreneurship traits prior knowledge and as family upbringing in order to identify

entrepreneurial intentions among Dayak community

Furthennore Dayak youth are chosen for the present study as they are known as a countrys next generation ~ economic and social player It is a period when young people gradually

come to be recognized and to recognize themselves as adults It can also be a period of great

energy enthusiasm and creativity (Fussell 2006) Thus t is extremely essential to make sure

that they are well prepared for their futures as workers entrepreneurs parents citizens and

community leaders and to the course of poverty reduction and growth They begin to interact

independently with the broader community and establish their identity as individuals At this

stage they nonnally stand at one lifes turning points one at which they think about careers

(pruett et a 2009) and how to be successful

This becomes the underlying principle for the current researcher in choosing youth as her

respondents As younger generations are exposed to substantial economic political changes

and popular cultural trends measured by technological advances it is no doubt that they are

more exposed to foreign trends and ideas and more able to share their ideas (Hofstede

2(01) At the end of the Chapter 5 this thesis is expected to answer two research questions as

follow

1) What is the entrepreneurial intention level among Dayak youth in Sarawak

2) What are the factors that affect partfcipaiion Ofl)(ljialt you~~trPIi~WJ1rship

shy

t 2

11 Theoretical Background

Factors contributing to entrepreneurial intention have gained the attention of a number of

researchers (Segal el aI 2005 Pruett el aI 2009 Nabi amp Holden 2008) A number of researchers havt) debated the theoretical relevance of personality traits (Llewellyn amp Wilson

2003 Deamer amp Earle 2004 Shahhosseini el aI 2011) and influence of social variables

(Orhan amp Scott 2001 Roxas el aI 2008 Kirk~d 2009) to discover indigenous

entrepreneurship potential

The present study explores the entrepreneurship potential of unique native group in Sarawak

and examines the factors responsible for their participations in business sectors through

content and process variables Content variables focus on personality traits such as risk taking

propensity tolerance for ambiguity and innovativeness (Stewart amp Roth 2001 Wang amp

Zang 2005 Nicolaidis amp Katsaros 2011) while process variables consider knowledge and

experience attained as well as family upbringing which include family support financial

status and awareness (Morisson 2000 Schmitt-Rodermund 2004) The following section

provides the rationale of the present thesis identifying three significant reasons for

undertaking this research

12 Significance of Study t--1tbull ~bullbull bull

t

There are three reasons for investigating rel~t~onship J~etween personality traits social

variables and entrepreneurial intentions These reasons consider the urgent need to

empirically review the relationship between both indi~iduals aspects (personality traits and

social variables) and the intention of youth to involve in ~ntre~repeu~hip fh~ components of

3

personality traits for the present study are represented by three commonly described

entrepreneurship traits risk taking propensity innovativeness and tolerance of ambiguity

(Gurol amp Atsan 2006 Shahhosseini et aI 2011 Yildiz 2012) whereas the components of

social variables (Wyckham amp Wed ley 1990 Morrison 2000 Schmitt-Rodermund 2004 Bagheri amp PiHte 2011) are represented by attained knowledge and training or working

experiences as well as family upbringing

First research done on indigenous entrepreneurship in Malaysia (Jaafar et al 2009 Suhaila

amp Mohammad 2011 Fakrul amp Norhayate 2011 Doris et al 2012) targeted on specific

community mainly in West Malaysia whom are reported as more economically advanced

compared to other Bumiputeras in the country after the NEP and NDP eras (Government of

Malaysia 2005) By way of contrast the present study investigates the entrepreneurship

potential of indigenous communities in East Malaysia in particular Sarawak where higher

poverty rate is recorded Therefore in order to discover the potential of entrepreneurship

within Dayak community in Sarawak this project initiates the exploration of Dayaks

features and culture via their entrepreneurship traits and social setting as predictors to their

entrepreneurial intentions

Second researchers (Schumpeter 1934 Tamvada 2009 Marr amp Reynard 2010 Goel amp

Rishi 2012) also stressed out on the important role of entrepreneurship in economic growth

and poverty alleviation Tamvada (2009) afgUedll18tbttngmiddot ~f~emp~~yed improves a

persons welfare besides creates job opportunity as a povero-reduction tool At the same

time Marr and Reynard (2010) stated that the economic growth and transformation of four

rapidly emerging major economies (REMEs) countries they did survey on - Brazil China

India and Korea - are due to private enterprise and entrepreneurial acfiyities There is no bull [ Ii

4

Pusat Khidmat Maklumat Akademik UNIVERSID MALAYSIA SARAWAK

doubt that the Malaysian Government has set different types of policies to foster indigenous

business participation Thus this research provides a better understanding of the Dayak

description for policy makers NGOs and business support organizations particularly in

planning or utilizing government-support entrepreneurship programmes

Finally this study enables the readers to understand the level of Dayaks awareness towards

the concept of entrepreneurship and its benefits to the community group which still holds a I

gap in the literature Knowledge and skills are vital to enhance persons ability in order to

meet their basic needs in life and enable them to influence their life direction in almost every

situation By obtaining business-related education from primary level awareness on benefits

of entrepreneurship could be implanted from early age besides developing entrepreneurial

skills creativity and intention as well (Schmitt-Rodermund 2003 Pittaway amp Cope 2007

Alpkan et aJ 2010)

Otherwise efforts taken by the Sarawak Gdvernment to develop entrepreneurship skills

among Dayak could possibly become a tough mission as it is fundamentally not just

involving education and trainings but also changing mindset and attitude towards becoming

entrepreneurial Thus a key purpose of the present thesis is to gain an in depth understanding

of the Dayak youths entrepreneurship potential in strengthening entrepreneurship in

Malaysia

13 Researcb Objectives bull t

bull 11 ~ _ bull

The objectives of this study are twofold First the current observer is investigating the

potential of entrepreneurship among Dayak youth in Sarawak based on their imention to start

a business Second the potential of entrepreneurshi~ is also irlv~stlg~ted ~mpirically via the

5

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

-

1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 8: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

Pusat Khidmat Maklumat Akademik UNIVERSm MALAYSIA SARAWAK

TABLE OF CONTENTS

Page

LIST OF TABLES IlX

LIST OF FIGURES x

CHAPTER 1 INTRODUCTION

10 Introduction 1

11 Theoretical Background 3

12 Significance of Study 3 middot

13 Research Objectives 5

14 Scope of Study 6

CHAPTER 2 LITERATURE REVIEW

20 Introduction 8

21 Malaysian Poverty Eradication Plan 8

22 The Dayak Natives in Sarawak 10

23 Entrepreneurship Concept and Variables 231 Content Variables Personality Traits 14

Risk Taking Propensity 15

Tolerance ofAmbiguity 17

Innovativeness 18

232 Process Variables Social Variables 19

Family Upbringing 20

Knowledge and Experience 21shy

24 Hypothesized Relationship between Vrui~k1sect ~~ 23 ~l bull bull I

CHAPTER 3 METHODOLOGY 30 Introduction 25

31 Research Design

311 Sample Size 26 I

312 Respondents t 26

VB

313 Research Instruments 28

32 Statistical Methods

321 Data Transformation 32

322 Descriptive Analysis 32

323 Principal Component Analysis 33

324 Pearson Correlation Analysis 34

325 Multiple Regression Analysis 34

CHAPTER 4 EMPIRICAL RESULTS

40 Introduction 36

41 Descriptive Statistic 36 42 Validity and Reliability 38

43 Correlation Matrix 43

44 MUltiple Regression Analysis 47

441 Multiple Regression Model 49

CHAPTER 5 DISCUSSION AND CONCLUSION

50 Introduction 55

51 Personality Traits and Social Variables 55

52 Limitations and Implications of Study 57

53 Conclusion 59

REFERENCES 61

APPENDIX I

APPENDIX II

I bull I

Vlll

LIST OF TABLES

Page

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group 11 Table 31 Sample Characteristics 27

Table 32 Composite Variables of Entrepreneurial Intention 29

Table 33 Survey Items for Personality Traits 30

Table 34 Survey Items for Social Variables 31

Table 35 Assumptions for Multiple Regression Model 35

Table 4 1 Frequency of Dayak Youths Entrepreneurial Intentions 37

Table 42 Summary of Familys Background and Awareness on 37

Entrepreneurship

Table 43 Rotated Component Matrix of Personality Traits Items 40

Table 44 Item-Total Statistics of Factor 2 (Innovativeness) 41

Table 45 Rotated Component Matrix of Social Variables Items 42

Table 46 Pearson Correlation Matrix 43

Table 47 Model Summary of Personality Traits as Predictors 48

Table 48 Regression Coefficients ofPersonality Traits 48

Table 49 Model Summary of Social Variables as Predictors 48

Table 410 Regression Coefficients of Social Variables 49

Table 411 Summary ofAll Possible Models 51

Table 412 Summary of Model Y X2345 52

Table 413 Coefficients of Model Y X2bull345 52

Table 414 Summary of Model Y X245 53

Table 415 Coefficient of ModelY ~4bullbull _ ~bull~ 53 f ~i middotd

bull II _ bull

If I middotmiddot

IX

-

I

LIST OF FIGURES

Page

Figure 21 The Theory of Reasoned Action 24

Figure 22 Model of Intentions 24

Figure 41 Education Majoring 38

Tmiddot middot ~i bullbull bull t

f I I

x

lt -- ~

CHAPTERl

INTRODUCTION

10 Introduction

This thesis explores the potential of indigenous youth to involve in entrepreneurship by

investigating factors that contribute to their entrepreneurial intentions Within the context of a

quantitative design the present thesis explores two type~ of individuals assets personality

traits and social variables as predictors of entrepreneurial intentions possessed by Malaysian

indigenous communities grouped as Dayak

Entrepreneurship activities help develops a countrys economy and social wellness of one

particular society (Ahmad el al 2006) Despite an increasing interest in indigenous

entrepreneurship and its contribution to the living standard of the society (Doris el a 2012

Jaafar el a 2009) relatively little empirical evidence has been reported on other indigenous

communities in Malaysia apart from the Malay This motivates the current researcher to

explore the entrepreneurs potentials specifically in term of entrepreneurial intention among

Dayak native in Sarawak The study is concentrated on two possible aspects that could

influence individuals decision to start a new business Component variables on personality

traits and the communities social variables were taken into account

shy

Although massive entrepreneurship literatUre have d~tmmre8 middot~ue~es of personality bull I ~ i fo

traits (Deamer amp Earle 2004 Schmitt-Rodermund 2004 Gurol amp Atsan 2006 Pillis amp ~

Reardon 2007) and social variables (Morrison 2000 Schmitt-Rodermund 2004) on

entrepreneurship potential the present thesis explores these two factors within the context of

0 II I bull

1

entrepreneurship traits prior knowledge and as family upbringing in order to identify

entrepreneurial intentions among Dayak community

Furthennore Dayak youth are chosen for the present study as they are known as a countrys next generation ~ economic and social player It is a period when young people gradually

come to be recognized and to recognize themselves as adults It can also be a period of great

energy enthusiasm and creativity (Fussell 2006) Thus t is extremely essential to make sure

that they are well prepared for their futures as workers entrepreneurs parents citizens and

community leaders and to the course of poverty reduction and growth They begin to interact

independently with the broader community and establish their identity as individuals At this

stage they nonnally stand at one lifes turning points one at which they think about careers

(pruett et a 2009) and how to be successful

This becomes the underlying principle for the current researcher in choosing youth as her

respondents As younger generations are exposed to substantial economic political changes

and popular cultural trends measured by technological advances it is no doubt that they are

more exposed to foreign trends and ideas and more able to share their ideas (Hofstede

2(01) At the end of the Chapter 5 this thesis is expected to answer two research questions as

follow

1) What is the entrepreneurial intention level among Dayak youth in Sarawak

2) What are the factors that affect partfcipaiion Ofl)(ljialt you~~trPIi~WJ1rship

shy

t 2

11 Theoretical Background

Factors contributing to entrepreneurial intention have gained the attention of a number of

researchers (Segal el aI 2005 Pruett el aI 2009 Nabi amp Holden 2008) A number of researchers havt) debated the theoretical relevance of personality traits (Llewellyn amp Wilson

2003 Deamer amp Earle 2004 Shahhosseini el aI 2011) and influence of social variables

(Orhan amp Scott 2001 Roxas el aI 2008 Kirk~d 2009) to discover indigenous

entrepreneurship potential

The present study explores the entrepreneurship potential of unique native group in Sarawak

and examines the factors responsible for their participations in business sectors through

content and process variables Content variables focus on personality traits such as risk taking

propensity tolerance for ambiguity and innovativeness (Stewart amp Roth 2001 Wang amp

Zang 2005 Nicolaidis amp Katsaros 2011) while process variables consider knowledge and

experience attained as well as family upbringing which include family support financial

status and awareness (Morisson 2000 Schmitt-Rodermund 2004) The following section

provides the rationale of the present thesis identifying three significant reasons for

undertaking this research

12 Significance of Study t--1tbull ~bullbull bull

t

There are three reasons for investigating rel~t~onship J~etween personality traits social

variables and entrepreneurial intentions These reasons consider the urgent need to

empirically review the relationship between both indi~iduals aspects (personality traits and

social variables) and the intention of youth to involve in ~ntre~repeu~hip fh~ components of

3

personality traits for the present study are represented by three commonly described

entrepreneurship traits risk taking propensity innovativeness and tolerance of ambiguity

(Gurol amp Atsan 2006 Shahhosseini et aI 2011 Yildiz 2012) whereas the components of

social variables (Wyckham amp Wed ley 1990 Morrison 2000 Schmitt-Rodermund 2004 Bagheri amp PiHte 2011) are represented by attained knowledge and training or working

experiences as well as family upbringing

First research done on indigenous entrepreneurship in Malaysia (Jaafar et al 2009 Suhaila

amp Mohammad 2011 Fakrul amp Norhayate 2011 Doris et al 2012) targeted on specific

community mainly in West Malaysia whom are reported as more economically advanced

compared to other Bumiputeras in the country after the NEP and NDP eras (Government of

Malaysia 2005) By way of contrast the present study investigates the entrepreneurship

potential of indigenous communities in East Malaysia in particular Sarawak where higher

poverty rate is recorded Therefore in order to discover the potential of entrepreneurship

within Dayak community in Sarawak this project initiates the exploration of Dayaks

features and culture via their entrepreneurship traits and social setting as predictors to their

entrepreneurial intentions

Second researchers (Schumpeter 1934 Tamvada 2009 Marr amp Reynard 2010 Goel amp

Rishi 2012) also stressed out on the important role of entrepreneurship in economic growth

and poverty alleviation Tamvada (2009) afgUedll18tbttngmiddot ~f~emp~~yed improves a

persons welfare besides creates job opportunity as a povero-reduction tool At the same

time Marr and Reynard (2010) stated that the economic growth and transformation of four

rapidly emerging major economies (REMEs) countries they did survey on - Brazil China

India and Korea - are due to private enterprise and entrepreneurial acfiyities There is no bull [ Ii

4

Pusat Khidmat Maklumat Akademik UNIVERSID MALAYSIA SARAWAK

doubt that the Malaysian Government has set different types of policies to foster indigenous

business participation Thus this research provides a better understanding of the Dayak

description for policy makers NGOs and business support organizations particularly in

planning or utilizing government-support entrepreneurship programmes

Finally this study enables the readers to understand the level of Dayaks awareness towards

the concept of entrepreneurship and its benefits to the community group which still holds a I

gap in the literature Knowledge and skills are vital to enhance persons ability in order to

meet their basic needs in life and enable them to influence their life direction in almost every

situation By obtaining business-related education from primary level awareness on benefits

of entrepreneurship could be implanted from early age besides developing entrepreneurial

skills creativity and intention as well (Schmitt-Rodermund 2003 Pittaway amp Cope 2007

Alpkan et aJ 2010)

Otherwise efforts taken by the Sarawak Gdvernment to develop entrepreneurship skills

among Dayak could possibly become a tough mission as it is fundamentally not just

involving education and trainings but also changing mindset and attitude towards becoming

entrepreneurial Thus a key purpose of the present thesis is to gain an in depth understanding

of the Dayak youths entrepreneurship potential in strengthening entrepreneurship in

Malaysia

13 Researcb Objectives bull t

bull 11 ~ _ bull

The objectives of this study are twofold First the current observer is investigating the

potential of entrepreneurship among Dayak youth in Sarawak based on their imention to start

a business Second the potential of entrepreneurshi~ is also irlv~stlg~ted ~mpirically via the

5

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

-

1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 9: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

313 Research Instruments 28

32 Statistical Methods

321 Data Transformation 32

322 Descriptive Analysis 32

323 Principal Component Analysis 33

324 Pearson Correlation Analysis 34

325 Multiple Regression Analysis 34

CHAPTER 4 EMPIRICAL RESULTS

40 Introduction 36

41 Descriptive Statistic 36 42 Validity and Reliability 38

43 Correlation Matrix 43

44 MUltiple Regression Analysis 47

441 Multiple Regression Model 49

CHAPTER 5 DISCUSSION AND CONCLUSION

50 Introduction 55

51 Personality Traits and Social Variables 55

52 Limitations and Implications of Study 57

53 Conclusion 59

REFERENCES 61

APPENDIX I

APPENDIX II

I bull I

Vlll

LIST OF TABLES

Page

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group 11 Table 31 Sample Characteristics 27

Table 32 Composite Variables of Entrepreneurial Intention 29

Table 33 Survey Items for Personality Traits 30

Table 34 Survey Items for Social Variables 31

Table 35 Assumptions for Multiple Regression Model 35

Table 4 1 Frequency of Dayak Youths Entrepreneurial Intentions 37

Table 42 Summary of Familys Background and Awareness on 37

Entrepreneurship

Table 43 Rotated Component Matrix of Personality Traits Items 40

Table 44 Item-Total Statistics of Factor 2 (Innovativeness) 41

Table 45 Rotated Component Matrix of Social Variables Items 42

Table 46 Pearson Correlation Matrix 43

Table 47 Model Summary of Personality Traits as Predictors 48

Table 48 Regression Coefficients ofPersonality Traits 48

Table 49 Model Summary of Social Variables as Predictors 48

Table 410 Regression Coefficients of Social Variables 49

Table 411 Summary ofAll Possible Models 51

Table 412 Summary of Model Y X2345 52

Table 413 Coefficients of Model Y X2bull345 52

Table 414 Summary of Model Y X245 53

Table 415 Coefficient of ModelY ~4bullbull _ ~bull~ 53 f ~i middotd

bull II _ bull

If I middotmiddot

IX

-

I

LIST OF FIGURES

Page

Figure 21 The Theory of Reasoned Action 24

Figure 22 Model of Intentions 24

Figure 41 Education Majoring 38

Tmiddot middot ~i bullbull bull t

f I I

x

lt -- ~

CHAPTERl

INTRODUCTION

10 Introduction

This thesis explores the potential of indigenous youth to involve in entrepreneurship by

investigating factors that contribute to their entrepreneurial intentions Within the context of a

quantitative design the present thesis explores two type~ of individuals assets personality

traits and social variables as predictors of entrepreneurial intentions possessed by Malaysian

indigenous communities grouped as Dayak

Entrepreneurship activities help develops a countrys economy and social wellness of one

particular society (Ahmad el al 2006) Despite an increasing interest in indigenous

entrepreneurship and its contribution to the living standard of the society (Doris el a 2012

Jaafar el a 2009) relatively little empirical evidence has been reported on other indigenous

communities in Malaysia apart from the Malay This motivates the current researcher to

explore the entrepreneurs potentials specifically in term of entrepreneurial intention among

Dayak native in Sarawak The study is concentrated on two possible aspects that could

influence individuals decision to start a new business Component variables on personality

traits and the communities social variables were taken into account

shy

Although massive entrepreneurship literatUre have d~tmmre8 middot~ue~es of personality bull I ~ i fo

traits (Deamer amp Earle 2004 Schmitt-Rodermund 2004 Gurol amp Atsan 2006 Pillis amp ~

Reardon 2007) and social variables (Morrison 2000 Schmitt-Rodermund 2004) on

entrepreneurship potential the present thesis explores these two factors within the context of

0 II I bull

1

entrepreneurship traits prior knowledge and as family upbringing in order to identify

entrepreneurial intentions among Dayak community

Furthennore Dayak youth are chosen for the present study as they are known as a countrys next generation ~ economic and social player It is a period when young people gradually

come to be recognized and to recognize themselves as adults It can also be a period of great

energy enthusiasm and creativity (Fussell 2006) Thus t is extremely essential to make sure

that they are well prepared for their futures as workers entrepreneurs parents citizens and

community leaders and to the course of poverty reduction and growth They begin to interact

independently with the broader community and establish their identity as individuals At this

stage they nonnally stand at one lifes turning points one at which they think about careers

(pruett et a 2009) and how to be successful

This becomes the underlying principle for the current researcher in choosing youth as her

respondents As younger generations are exposed to substantial economic political changes

and popular cultural trends measured by technological advances it is no doubt that they are

more exposed to foreign trends and ideas and more able to share their ideas (Hofstede

2(01) At the end of the Chapter 5 this thesis is expected to answer two research questions as

follow

1) What is the entrepreneurial intention level among Dayak youth in Sarawak

2) What are the factors that affect partfcipaiion Ofl)(ljialt you~~trPIi~WJ1rship

shy

t 2

11 Theoretical Background

Factors contributing to entrepreneurial intention have gained the attention of a number of

researchers (Segal el aI 2005 Pruett el aI 2009 Nabi amp Holden 2008) A number of researchers havt) debated the theoretical relevance of personality traits (Llewellyn amp Wilson

2003 Deamer amp Earle 2004 Shahhosseini el aI 2011) and influence of social variables

(Orhan amp Scott 2001 Roxas el aI 2008 Kirk~d 2009) to discover indigenous

entrepreneurship potential

The present study explores the entrepreneurship potential of unique native group in Sarawak

and examines the factors responsible for their participations in business sectors through

content and process variables Content variables focus on personality traits such as risk taking

propensity tolerance for ambiguity and innovativeness (Stewart amp Roth 2001 Wang amp

Zang 2005 Nicolaidis amp Katsaros 2011) while process variables consider knowledge and

experience attained as well as family upbringing which include family support financial

status and awareness (Morisson 2000 Schmitt-Rodermund 2004) The following section

provides the rationale of the present thesis identifying three significant reasons for

undertaking this research

12 Significance of Study t--1tbull ~bullbull bull

t

There are three reasons for investigating rel~t~onship J~etween personality traits social

variables and entrepreneurial intentions These reasons consider the urgent need to

empirically review the relationship between both indi~iduals aspects (personality traits and

social variables) and the intention of youth to involve in ~ntre~repeu~hip fh~ components of

3

personality traits for the present study are represented by three commonly described

entrepreneurship traits risk taking propensity innovativeness and tolerance of ambiguity

(Gurol amp Atsan 2006 Shahhosseini et aI 2011 Yildiz 2012) whereas the components of

social variables (Wyckham amp Wed ley 1990 Morrison 2000 Schmitt-Rodermund 2004 Bagheri amp PiHte 2011) are represented by attained knowledge and training or working

experiences as well as family upbringing

First research done on indigenous entrepreneurship in Malaysia (Jaafar et al 2009 Suhaila

amp Mohammad 2011 Fakrul amp Norhayate 2011 Doris et al 2012) targeted on specific

community mainly in West Malaysia whom are reported as more economically advanced

compared to other Bumiputeras in the country after the NEP and NDP eras (Government of

Malaysia 2005) By way of contrast the present study investigates the entrepreneurship

potential of indigenous communities in East Malaysia in particular Sarawak where higher

poverty rate is recorded Therefore in order to discover the potential of entrepreneurship

within Dayak community in Sarawak this project initiates the exploration of Dayaks

features and culture via their entrepreneurship traits and social setting as predictors to their

entrepreneurial intentions

Second researchers (Schumpeter 1934 Tamvada 2009 Marr amp Reynard 2010 Goel amp

Rishi 2012) also stressed out on the important role of entrepreneurship in economic growth

and poverty alleviation Tamvada (2009) afgUedll18tbttngmiddot ~f~emp~~yed improves a

persons welfare besides creates job opportunity as a povero-reduction tool At the same

time Marr and Reynard (2010) stated that the economic growth and transformation of four

rapidly emerging major economies (REMEs) countries they did survey on - Brazil China

India and Korea - are due to private enterprise and entrepreneurial acfiyities There is no bull [ Ii

4

Pusat Khidmat Maklumat Akademik UNIVERSID MALAYSIA SARAWAK

doubt that the Malaysian Government has set different types of policies to foster indigenous

business participation Thus this research provides a better understanding of the Dayak

description for policy makers NGOs and business support organizations particularly in

planning or utilizing government-support entrepreneurship programmes

Finally this study enables the readers to understand the level of Dayaks awareness towards

the concept of entrepreneurship and its benefits to the community group which still holds a I

gap in the literature Knowledge and skills are vital to enhance persons ability in order to

meet their basic needs in life and enable them to influence their life direction in almost every

situation By obtaining business-related education from primary level awareness on benefits

of entrepreneurship could be implanted from early age besides developing entrepreneurial

skills creativity and intention as well (Schmitt-Rodermund 2003 Pittaway amp Cope 2007

Alpkan et aJ 2010)

Otherwise efforts taken by the Sarawak Gdvernment to develop entrepreneurship skills

among Dayak could possibly become a tough mission as it is fundamentally not just

involving education and trainings but also changing mindset and attitude towards becoming

entrepreneurial Thus a key purpose of the present thesis is to gain an in depth understanding

of the Dayak youths entrepreneurship potential in strengthening entrepreneurship in

Malaysia

13 Researcb Objectives bull t

bull 11 ~ _ bull

The objectives of this study are twofold First the current observer is investigating the

potential of entrepreneurship among Dayak youth in Sarawak based on their imention to start

a business Second the potential of entrepreneurshi~ is also irlv~stlg~ted ~mpirically via the

5

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

-

1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 10: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

LIST OF TABLES

Page

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group 11 Table 31 Sample Characteristics 27

Table 32 Composite Variables of Entrepreneurial Intention 29

Table 33 Survey Items for Personality Traits 30

Table 34 Survey Items for Social Variables 31

Table 35 Assumptions for Multiple Regression Model 35

Table 4 1 Frequency of Dayak Youths Entrepreneurial Intentions 37

Table 42 Summary of Familys Background and Awareness on 37

Entrepreneurship

Table 43 Rotated Component Matrix of Personality Traits Items 40

Table 44 Item-Total Statistics of Factor 2 (Innovativeness) 41

Table 45 Rotated Component Matrix of Social Variables Items 42

Table 46 Pearson Correlation Matrix 43

Table 47 Model Summary of Personality Traits as Predictors 48

Table 48 Regression Coefficients ofPersonality Traits 48

Table 49 Model Summary of Social Variables as Predictors 48

Table 410 Regression Coefficients of Social Variables 49

Table 411 Summary ofAll Possible Models 51

Table 412 Summary of Model Y X2345 52

Table 413 Coefficients of Model Y X2bull345 52

Table 414 Summary of Model Y X245 53

Table 415 Coefficient of ModelY ~4bullbull _ ~bull~ 53 f ~i middotd

bull II _ bull

If I middotmiddot

IX

-

I

LIST OF FIGURES

Page

Figure 21 The Theory of Reasoned Action 24

Figure 22 Model of Intentions 24

Figure 41 Education Majoring 38

Tmiddot middot ~i bullbull bull t

f I I

x

lt -- ~

CHAPTERl

INTRODUCTION

10 Introduction

This thesis explores the potential of indigenous youth to involve in entrepreneurship by

investigating factors that contribute to their entrepreneurial intentions Within the context of a

quantitative design the present thesis explores two type~ of individuals assets personality

traits and social variables as predictors of entrepreneurial intentions possessed by Malaysian

indigenous communities grouped as Dayak

Entrepreneurship activities help develops a countrys economy and social wellness of one

particular society (Ahmad el al 2006) Despite an increasing interest in indigenous

entrepreneurship and its contribution to the living standard of the society (Doris el a 2012

Jaafar el a 2009) relatively little empirical evidence has been reported on other indigenous

communities in Malaysia apart from the Malay This motivates the current researcher to

explore the entrepreneurs potentials specifically in term of entrepreneurial intention among

Dayak native in Sarawak The study is concentrated on two possible aspects that could

influence individuals decision to start a new business Component variables on personality

traits and the communities social variables were taken into account

shy

Although massive entrepreneurship literatUre have d~tmmre8 middot~ue~es of personality bull I ~ i fo

traits (Deamer amp Earle 2004 Schmitt-Rodermund 2004 Gurol amp Atsan 2006 Pillis amp ~

Reardon 2007) and social variables (Morrison 2000 Schmitt-Rodermund 2004) on

entrepreneurship potential the present thesis explores these two factors within the context of

0 II I bull

1

entrepreneurship traits prior knowledge and as family upbringing in order to identify

entrepreneurial intentions among Dayak community

Furthennore Dayak youth are chosen for the present study as they are known as a countrys next generation ~ economic and social player It is a period when young people gradually

come to be recognized and to recognize themselves as adults It can also be a period of great

energy enthusiasm and creativity (Fussell 2006) Thus t is extremely essential to make sure

that they are well prepared for their futures as workers entrepreneurs parents citizens and

community leaders and to the course of poverty reduction and growth They begin to interact

independently with the broader community and establish their identity as individuals At this

stage they nonnally stand at one lifes turning points one at which they think about careers

(pruett et a 2009) and how to be successful

This becomes the underlying principle for the current researcher in choosing youth as her

respondents As younger generations are exposed to substantial economic political changes

and popular cultural trends measured by technological advances it is no doubt that they are

more exposed to foreign trends and ideas and more able to share their ideas (Hofstede

2(01) At the end of the Chapter 5 this thesis is expected to answer two research questions as

follow

1) What is the entrepreneurial intention level among Dayak youth in Sarawak

2) What are the factors that affect partfcipaiion Ofl)(ljialt you~~trPIi~WJ1rship

shy

t 2

11 Theoretical Background

Factors contributing to entrepreneurial intention have gained the attention of a number of

researchers (Segal el aI 2005 Pruett el aI 2009 Nabi amp Holden 2008) A number of researchers havt) debated the theoretical relevance of personality traits (Llewellyn amp Wilson

2003 Deamer amp Earle 2004 Shahhosseini el aI 2011) and influence of social variables

(Orhan amp Scott 2001 Roxas el aI 2008 Kirk~d 2009) to discover indigenous

entrepreneurship potential

The present study explores the entrepreneurship potential of unique native group in Sarawak

and examines the factors responsible for their participations in business sectors through

content and process variables Content variables focus on personality traits such as risk taking

propensity tolerance for ambiguity and innovativeness (Stewart amp Roth 2001 Wang amp

Zang 2005 Nicolaidis amp Katsaros 2011) while process variables consider knowledge and

experience attained as well as family upbringing which include family support financial

status and awareness (Morisson 2000 Schmitt-Rodermund 2004) The following section

provides the rationale of the present thesis identifying three significant reasons for

undertaking this research

12 Significance of Study t--1tbull ~bullbull bull

t

There are three reasons for investigating rel~t~onship J~etween personality traits social

variables and entrepreneurial intentions These reasons consider the urgent need to

empirically review the relationship between both indi~iduals aspects (personality traits and

social variables) and the intention of youth to involve in ~ntre~repeu~hip fh~ components of

3

personality traits for the present study are represented by three commonly described

entrepreneurship traits risk taking propensity innovativeness and tolerance of ambiguity

(Gurol amp Atsan 2006 Shahhosseini et aI 2011 Yildiz 2012) whereas the components of

social variables (Wyckham amp Wed ley 1990 Morrison 2000 Schmitt-Rodermund 2004 Bagheri amp PiHte 2011) are represented by attained knowledge and training or working

experiences as well as family upbringing

First research done on indigenous entrepreneurship in Malaysia (Jaafar et al 2009 Suhaila

amp Mohammad 2011 Fakrul amp Norhayate 2011 Doris et al 2012) targeted on specific

community mainly in West Malaysia whom are reported as more economically advanced

compared to other Bumiputeras in the country after the NEP and NDP eras (Government of

Malaysia 2005) By way of contrast the present study investigates the entrepreneurship

potential of indigenous communities in East Malaysia in particular Sarawak where higher

poverty rate is recorded Therefore in order to discover the potential of entrepreneurship

within Dayak community in Sarawak this project initiates the exploration of Dayaks

features and culture via their entrepreneurship traits and social setting as predictors to their

entrepreneurial intentions

Second researchers (Schumpeter 1934 Tamvada 2009 Marr amp Reynard 2010 Goel amp

Rishi 2012) also stressed out on the important role of entrepreneurship in economic growth

and poverty alleviation Tamvada (2009) afgUedll18tbttngmiddot ~f~emp~~yed improves a

persons welfare besides creates job opportunity as a povero-reduction tool At the same

time Marr and Reynard (2010) stated that the economic growth and transformation of four

rapidly emerging major economies (REMEs) countries they did survey on - Brazil China

India and Korea - are due to private enterprise and entrepreneurial acfiyities There is no bull [ Ii

4

Pusat Khidmat Maklumat Akademik UNIVERSID MALAYSIA SARAWAK

doubt that the Malaysian Government has set different types of policies to foster indigenous

business participation Thus this research provides a better understanding of the Dayak

description for policy makers NGOs and business support organizations particularly in

planning or utilizing government-support entrepreneurship programmes

Finally this study enables the readers to understand the level of Dayaks awareness towards

the concept of entrepreneurship and its benefits to the community group which still holds a I

gap in the literature Knowledge and skills are vital to enhance persons ability in order to

meet their basic needs in life and enable them to influence their life direction in almost every

situation By obtaining business-related education from primary level awareness on benefits

of entrepreneurship could be implanted from early age besides developing entrepreneurial

skills creativity and intention as well (Schmitt-Rodermund 2003 Pittaway amp Cope 2007

Alpkan et aJ 2010)

Otherwise efforts taken by the Sarawak Gdvernment to develop entrepreneurship skills

among Dayak could possibly become a tough mission as it is fundamentally not just

involving education and trainings but also changing mindset and attitude towards becoming

entrepreneurial Thus a key purpose of the present thesis is to gain an in depth understanding

of the Dayak youths entrepreneurship potential in strengthening entrepreneurship in

Malaysia

13 Researcb Objectives bull t

bull 11 ~ _ bull

The objectives of this study are twofold First the current observer is investigating the

potential of entrepreneurship among Dayak youth in Sarawak based on their imention to start

a business Second the potential of entrepreneurshi~ is also irlv~stlg~ted ~mpirically via the

5

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

-

1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 11: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

-

I

LIST OF FIGURES

Page

Figure 21 The Theory of Reasoned Action 24

Figure 22 Model of Intentions 24

Figure 41 Education Majoring 38

Tmiddot middot ~i bullbull bull t

f I I

x

lt -- ~

CHAPTERl

INTRODUCTION

10 Introduction

This thesis explores the potential of indigenous youth to involve in entrepreneurship by

investigating factors that contribute to their entrepreneurial intentions Within the context of a

quantitative design the present thesis explores two type~ of individuals assets personality

traits and social variables as predictors of entrepreneurial intentions possessed by Malaysian

indigenous communities grouped as Dayak

Entrepreneurship activities help develops a countrys economy and social wellness of one

particular society (Ahmad el al 2006) Despite an increasing interest in indigenous

entrepreneurship and its contribution to the living standard of the society (Doris el a 2012

Jaafar el a 2009) relatively little empirical evidence has been reported on other indigenous

communities in Malaysia apart from the Malay This motivates the current researcher to

explore the entrepreneurs potentials specifically in term of entrepreneurial intention among

Dayak native in Sarawak The study is concentrated on two possible aspects that could

influence individuals decision to start a new business Component variables on personality

traits and the communities social variables were taken into account

shy

Although massive entrepreneurship literatUre have d~tmmre8 middot~ue~es of personality bull I ~ i fo

traits (Deamer amp Earle 2004 Schmitt-Rodermund 2004 Gurol amp Atsan 2006 Pillis amp ~

Reardon 2007) and social variables (Morrison 2000 Schmitt-Rodermund 2004) on

entrepreneurship potential the present thesis explores these two factors within the context of

0 II I bull

1

entrepreneurship traits prior knowledge and as family upbringing in order to identify

entrepreneurial intentions among Dayak community

Furthennore Dayak youth are chosen for the present study as they are known as a countrys next generation ~ economic and social player It is a period when young people gradually

come to be recognized and to recognize themselves as adults It can also be a period of great

energy enthusiasm and creativity (Fussell 2006) Thus t is extremely essential to make sure

that they are well prepared for their futures as workers entrepreneurs parents citizens and

community leaders and to the course of poverty reduction and growth They begin to interact

independently with the broader community and establish their identity as individuals At this

stage they nonnally stand at one lifes turning points one at which they think about careers

(pruett et a 2009) and how to be successful

This becomes the underlying principle for the current researcher in choosing youth as her

respondents As younger generations are exposed to substantial economic political changes

and popular cultural trends measured by technological advances it is no doubt that they are

more exposed to foreign trends and ideas and more able to share their ideas (Hofstede

2(01) At the end of the Chapter 5 this thesis is expected to answer two research questions as

follow

1) What is the entrepreneurial intention level among Dayak youth in Sarawak

2) What are the factors that affect partfcipaiion Ofl)(ljialt you~~trPIi~WJ1rship

shy

t 2

11 Theoretical Background

Factors contributing to entrepreneurial intention have gained the attention of a number of

researchers (Segal el aI 2005 Pruett el aI 2009 Nabi amp Holden 2008) A number of researchers havt) debated the theoretical relevance of personality traits (Llewellyn amp Wilson

2003 Deamer amp Earle 2004 Shahhosseini el aI 2011) and influence of social variables

(Orhan amp Scott 2001 Roxas el aI 2008 Kirk~d 2009) to discover indigenous

entrepreneurship potential

The present study explores the entrepreneurship potential of unique native group in Sarawak

and examines the factors responsible for their participations in business sectors through

content and process variables Content variables focus on personality traits such as risk taking

propensity tolerance for ambiguity and innovativeness (Stewart amp Roth 2001 Wang amp

Zang 2005 Nicolaidis amp Katsaros 2011) while process variables consider knowledge and

experience attained as well as family upbringing which include family support financial

status and awareness (Morisson 2000 Schmitt-Rodermund 2004) The following section

provides the rationale of the present thesis identifying three significant reasons for

undertaking this research

12 Significance of Study t--1tbull ~bullbull bull

t

There are three reasons for investigating rel~t~onship J~etween personality traits social

variables and entrepreneurial intentions These reasons consider the urgent need to

empirically review the relationship between both indi~iduals aspects (personality traits and

social variables) and the intention of youth to involve in ~ntre~repeu~hip fh~ components of

3

personality traits for the present study are represented by three commonly described

entrepreneurship traits risk taking propensity innovativeness and tolerance of ambiguity

(Gurol amp Atsan 2006 Shahhosseini et aI 2011 Yildiz 2012) whereas the components of

social variables (Wyckham amp Wed ley 1990 Morrison 2000 Schmitt-Rodermund 2004 Bagheri amp PiHte 2011) are represented by attained knowledge and training or working

experiences as well as family upbringing

First research done on indigenous entrepreneurship in Malaysia (Jaafar et al 2009 Suhaila

amp Mohammad 2011 Fakrul amp Norhayate 2011 Doris et al 2012) targeted on specific

community mainly in West Malaysia whom are reported as more economically advanced

compared to other Bumiputeras in the country after the NEP and NDP eras (Government of

Malaysia 2005) By way of contrast the present study investigates the entrepreneurship

potential of indigenous communities in East Malaysia in particular Sarawak where higher

poverty rate is recorded Therefore in order to discover the potential of entrepreneurship

within Dayak community in Sarawak this project initiates the exploration of Dayaks

features and culture via their entrepreneurship traits and social setting as predictors to their

entrepreneurial intentions

Second researchers (Schumpeter 1934 Tamvada 2009 Marr amp Reynard 2010 Goel amp

Rishi 2012) also stressed out on the important role of entrepreneurship in economic growth

and poverty alleviation Tamvada (2009) afgUedll18tbttngmiddot ~f~emp~~yed improves a

persons welfare besides creates job opportunity as a povero-reduction tool At the same

time Marr and Reynard (2010) stated that the economic growth and transformation of four

rapidly emerging major economies (REMEs) countries they did survey on - Brazil China

India and Korea - are due to private enterprise and entrepreneurial acfiyities There is no bull [ Ii

4

Pusat Khidmat Maklumat Akademik UNIVERSID MALAYSIA SARAWAK

doubt that the Malaysian Government has set different types of policies to foster indigenous

business participation Thus this research provides a better understanding of the Dayak

description for policy makers NGOs and business support organizations particularly in

planning or utilizing government-support entrepreneurship programmes

Finally this study enables the readers to understand the level of Dayaks awareness towards

the concept of entrepreneurship and its benefits to the community group which still holds a I

gap in the literature Knowledge and skills are vital to enhance persons ability in order to

meet their basic needs in life and enable them to influence their life direction in almost every

situation By obtaining business-related education from primary level awareness on benefits

of entrepreneurship could be implanted from early age besides developing entrepreneurial

skills creativity and intention as well (Schmitt-Rodermund 2003 Pittaway amp Cope 2007

Alpkan et aJ 2010)

Otherwise efforts taken by the Sarawak Gdvernment to develop entrepreneurship skills

among Dayak could possibly become a tough mission as it is fundamentally not just

involving education and trainings but also changing mindset and attitude towards becoming

entrepreneurial Thus a key purpose of the present thesis is to gain an in depth understanding

of the Dayak youths entrepreneurship potential in strengthening entrepreneurship in

Malaysia

13 Researcb Objectives bull t

bull 11 ~ _ bull

The objectives of this study are twofold First the current observer is investigating the

potential of entrepreneurship among Dayak youth in Sarawak based on their imention to start

a business Second the potential of entrepreneurshi~ is also irlv~stlg~ted ~mpirically via the

5

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

-

1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 12: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

CHAPTERl

INTRODUCTION

10 Introduction

This thesis explores the potential of indigenous youth to involve in entrepreneurship by

investigating factors that contribute to their entrepreneurial intentions Within the context of a

quantitative design the present thesis explores two type~ of individuals assets personality

traits and social variables as predictors of entrepreneurial intentions possessed by Malaysian

indigenous communities grouped as Dayak

Entrepreneurship activities help develops a countrys economy and social wellness of one

particular society (Ahmad el al 2006) Despite an increasing interest in indigenous

entrepreneurship and its contribution to the living standard of the society (Doris el a 2012

Jaafar el a 2009) relatively little empirical evidence has been reported on other indigenous

communities in Malaysia apart from the Malay This motivates the current researcher to

explore the entrepreneurs potentials specifically in term of entrepreneurial intention among

Dayak native in Sarawak The study is concentrated on two possible aspects that could

influence individuals decision to start a new business Component variables on personality

traits and the communities social variables were taken into account

shy

Although massive entrepreneurship literatUre have d~tmmre8 middot~ue~es of personality bull I ~ i fo

traits (Deamer amp Earle 2004 Schmitt-Rodermund 2004 Gurol amp Atsan 2006 Pillis amp ~

Reardon 2007) and social variables (Morrison 2000 Schmitt-Rodermund 2004) on

entrepreneurship potential the present thesis explores these two factors within the context of

0 II I bull

1

entrepreneurship traits prior knowledge and as family upbringing in order to identify

entrepreneurial intentions among Dayak community

Furthennore Dayak youth are chosen for the present study as they are known as a countrys next generation ~ economic and social player It is a period when young people gradually

come to be recognized and to recognize themselves as adults It can also be a period of great

energy enthusiasm and creativity (Fussell 2006) Thus t is extremely essential to make sure

that they are well prepared for their futures as workers entrepreneurs parents citizens and

community leaders and to the course of poverty reduction and growth They begin to interact

independently with the broader community and establish their identity as individuals At this

stage they nonnally stand at one lifes turning points one at which they think about careers

(pruett et a 2009) and how to be successful

This becomes the underlying principle for the current researcher in choosing youth as her

respondents As younger generations are exposed to substantial economic political changes

and popular cultural trends measured by technological advances it is no doubt that they are

more exposed to foreign trends and ideas and more able to share their ideas (Hofstede

2(01) At the end of the Chapter 5 this thesis is expected to answer two research questions as

follow

1) What is the entrepreneurial intention level among Dayak youth in Sarawak

2) What are the factors that affect partfcipaiion Ofl)(ljialt you~~trPIi~WJ1rship

shy

t 2

11 Theoretical Background

Factors contributing to entrepreneurial intention have gained the attention of a number of

researchers (Segal el aI 2005 Pruett el aI 2009 Nabi amp Holden 2008) A number of researchers havt) debated the theoretical relevance of personality traits (Llewellyn amp Wilson

2003 Deamer amp Earle 2004 Shahhosseini el aI 2011) and influence of social variables

(Orhan amp Scott 2001 Roxas el aI 2008 Kirk~d 2009) to discover indigenous

entrepreneurship potential

The present study explores the entrepreneurship potential of unique native group in Sarawak

and examines the factors responsible for their participations in business sectors through

content and process variables Content variables focus on personality traits such as risk taking

propensity tolerance for ambiguity and innovativeness (Stewart amp Roth 2001 Wang amp

Zang 2005 Nicolaidis amp Katsaros 2011) while process variables consider knowledge and

experience attained as well as family upbringing which include family support financial

status and awareness (Morisson 2000 Schmitt-Rodermund 2004) The following section

provides the rationale of the present thesis identifying three significant reasons for

undertaking this research

12 Significance of Study t--1tbull ~bullbull bull

t

There are three reasons for investigating rel~t~onship J~etween personality traits social

variables and entrepreneurial intentions These reasons consider the urgent need to

empirically review the relationship between both indi~iduals aspects (personality traits and

social variables) and the intention of youth to involve in ~ntre~repeu~hip fh~ components of

3

personality traits for the present study are represented by three commonly described

entrepreneurship traits risk taking propensity innovativeness and tolerance of ambiguity

(Gurol amp Atsan 2006 Shahhosseini et aI 2011 Yildiz 2012) whereas the components of

social variables (Wyckham amp Wed ley 1990 Morrison 2000 Schmitt-Rodermund 2004 Bagheri amp PiHte 2011) are represented by attained knowledge and training or working

experiences as well as family upbringing

First research done on indigenous entrepreneurship in Malaysia (Jaafar et al 2009 Suhaila

amp Mohammad 2011 Fakrul amp Norhayate 2011 Doris et al 2012) targeted on specific

community mainly in West Malaysia whom are reported as more economically advanced

compared to other Bumiputeras in the country after the NEP and NDP eras (Government of

Malaysia 2005) By way of contrast the present study investigates the entrepreneurship

potential of indigenous communities in East Malaysia in particular Sarawak where higher

poverty rate is recorded Therefore in order to discover the potential of entrepreneurship

within Dayak community in Sarawak this project initiates the exploration of Dayaks

features and culture via their entrepreneurship traits and social setting as predictors to their

entrepreneurial intentions

Second researchers (Schumpeter 1934 Tamvada 2009 Marr amp Reynard 2010 Goel amp

Rishi 2012) also stressed out on the important role of entrepreneurship in economic growth

and poverty alleviation Tamvada (2009) afgUedll18tbttngmiddot ~f~emp~~yed improves a

persons welfare besides creates job opportunity as a povero-reduction tool At the same

time Marr and Reynard (2010) stated that the economic growth and transformation of four

rapidly emerging major economies (REMEs) countries they did survey on - Brazil China

India and Korea - are due to private enterprise and entrepreneurial acfiyities There is no bull [ Ii

4

Pusat Khidmat Maklumat Akademik UNIVERSID MALAYSIA SARAWAK

doubt that the Malaysian Government has set different types of policies to foster indigenous

business participation Thus this research provides a better understanding of the Dayak

description for policy makers NGOs and business support organizations particularly in

planning or utilizing government-support entrepreneurship programmes

Finally this study enables the readers to understand the level of Dayaks awareness towards

the concept of entrepreneurship and its benefits to the community group which still holds a I

gap in the literature Knowledge and skills are vital to enhance persons ability in order to

meet their basic needs in life and enable them to influence their life direction in almost every

situation By obtaining business-related education from primary level awareness on benefits

of entrepreneurship could be implanted from early age besides developing entrepreneurial

skills creativity and intention as well (Schmitt-Rodermund 2003 Pittaway amp Cope 2007

Alpkan et aJ 2010)

Otherwise efforts taken by the Sarawak Gdvernment to develop entrepreneurship skills

among Dayak could possibly become a tough mission as it is fundamentally not just

involving education and trainings but also changing mindset and attitude towards becoming

entrepreneurial Thus a key purpose of the present thesis is to gain an in depth understanding

of the Dayak youths entrepreneurship potential in strengthening entrepreneurship in

Malaysia

13 Researcb Objectives bull t

bull 11 ~ _ bull

The objectives of this study are twofold First the current observer is investigating the

potential of entrepreneurship among Dayak youth in Sarawak based on their imention to start

a business Second the potential of entrepreneurshi~ is also irlv~stlg~ted ~mpirically via the

5

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

-

1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 13: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

entrepreneurship traits prior knowledge and as family upbringing in order to identify

entrepreneurial intentions among Dayak community

Furthennore Dayak youth are chosen for the present study as they are known as a countrys next generation ~ economic and social player It is a period when young people gradually

come to be recognized and to recognize themselves as adults It can also be a period of great

energy enthusiasm and creativity (Fussell 2006) Thus t is extremely essential to make sure

that they are well prepared for their futures as workers entrepreneurs parents citizens and

community leaders and to the course of poverty reduction and growth They begin to interact

independently with the broader community and establish their identity as individuals At this

stage they nonnally stand at one lifes turning points one at which they think about careers

(pruett et a 2009) and how to be successful

This becomes the underlying principle for the current researcher in choosing youth as her

respondents As younger generations are exposed to substantial economic political changes

and popular cultural trends measured by technological advances it is no doubt that they are

more exposed to foreign trends and ideas and more able to share their ideas (Hofstede

2(01) At the end of the Chapter 5 this thesis is expected to answer two research questions as

follow

1) What is the entrepreneurial intention level among Dayak youth in Sarawak

2) What are the factors that affect partfcipaiion Ofl)(ljialt you~~trPIi~WJ1rship

shy

t 2

11 Theoretical Background

Factors contributing to entrepreneurial intention have gained the attention of a number of

researchers (Segal el aI 2005 Pruett el aI 2009 Nabi amp Holden 2008) A number of researchers havt) debated the theoretical relevance of personality traits (Llewellyn amp Wilson

2003 Deamer amp Earle 2004 Shahhosseini el aI 2011) and influence of social variables

(Orhan amp Scott 2001 Roxas el aI 2008 Kirk~d 2009) to discover indigenous

entrepreneurship potential

The present study explores the entrepreneurship potential of unique native group in Sarawak

and examines the factors responsible for their participations in business sectors through

content and process variables Content variables focus on personality traits such as risk taking

propensity tolerance for ambiguity and innovativeness (Stewart amp Roth 2001 Wang amp

Zang 2005 Nicolaidis amp Katsaros 2011) while process variables consider knowledge and

experience attained as well as family upbringing which include family support financial

status and awareness (Morisson 2000 Schmitt-Rodermund 2004) The following section

provides the rationale of the present thesis identifying three significant reasons for

undertaking this research

12 Significance of Study t--1tbull ~bullbull bull

t

There are three reasons for investigating rel~t~onship J~etween personality traits social

variables and entrepreneurial intentions These reasons consider the urgent need to

empirically review the relationship between both indi~iduals aspects (personality traits and

social variables) and the intention of youth to involve in ~ntre~repeu~hip fh~ components of

3

personality traits for the present study are represented by three commonly described

entrepreneurship traits risk taking propensity innovativeness and tolerance of ambiguity

(Gurol amp Atsan 2006 Shahhosseini et aI 2011 Yildiz 2012) whereas the components of

social variables (Wyckham amp Wed ley 1990 Morrison 2000 Schmitt-Rodermund 2004 Bagheri amp PiHte 2011) are represented by attained knowledge and training or working

experiences as well as family upbringing

First research done on indigenous entrepreneurship in Malaysia (Jaafar et al 2009 Suhaila

amp Mohammad 2011 Fakrul amp Norhayate 2011 Doris et al 2012) targeted on specific

community mainly in West Malaysia whom are reported as more economically advanced

compared to other Bumiputeras in the country after the NEP and NDP eras (Government of

Malaysia 2005) By way of contrast the present study investigates the entrepreneurship

potential of indigenous communities in East Malaysia in particular Sarawak where higher

poverty rate is recorded Therefore in order to discover the potential of entrepreneurship

within Dayak community in Sarawak this project initiates the exploration of Dayaks

features and culture via their entrepreneurship traits and social setting as predictors to their

entrepreneurial intentions

Second researchers (Schumpeter 1934 Tamvada 2009 Marr amp Reynard 2010 Goel amp

Rishi 2012) also stressed out on the important role of entrepreneurship in economic growth

and poverty alleviation Tamvada (2009) afgUedll18tbttngmiddot ~f~emp~~yed improves a

persons welfare besides creates job opportunity as a povero-reduction tool At the same

time Marr and Reynard (2010) stated that the economic growth and transformation of four

rapidly emerging major economies (REMEs) countries they did survey on - Brazil China

India and Korea - are due to private enterprise and entrepreneurial acfiyities There is no bull [ Ii

4

Pusat Khidmat Maklumat Akademik UNIVERSID MALAYSIA SARAWAK

doubt that the Malaysian Government has set different types of policies to foster indigenous

business participation Thus this research provides a better understanding of the Dayak

description for policy makers NGOs and business support organizations particularly in

planning or utilizing government-support entrepreneurship programmes

Finally this study enables the readers to understand the level of Dayaks awareness towards

the concept of entrepreneurship and its benefits to the community group which still holds a I

gap in the literature Knowledge and skills are vital to enhance persons ability in order to

meet their basic needs in life and enable them to influence their life direction in almost every

situation By obtaining business-related education from primary level awareness on benefits

of entrepreneurship could be implanted from early age besides developing entrepreneurial

skills creativity and intention as well (Schmitt-Rodermund 2003 Pittaway amp Cope 2007

Alpkan et aJ 2010)

Otherwise efforts taken by the Sarawak Gdvernment to develop entrepreneurship skills

among Dayak could possibly become a tough mission as it is fundamentally not just

involving education and trainings but also changing mindset and attitude towards becoming

entrepreneurial Thus a key purpose of the present thesis is to gain an in depth understanding

of the Dayak youths entrepreneurship potential in strengthening entrepreneurship in

Malaysia

13 Researcb Objectives bull t

bull 11 ~ _ bull

The objectives of this study are twofold First the current observer is investigating the

potential of entrepreneurship among Dayak youth in Sarawak based on their imention to start

a business Second the potential of entrepreneurshi~ is also irlv~stlg~ted ~mpirically via the

5

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

-

1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 14: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

11 Theoretical Background

Factors contributing to entrepreneurial intention have gained the attention of a number of

researchers (Segal el aI 2005 Pruett el aI 2009 Nabi amp Holden 2008) A number of researchers havt) debated the theoretical relevance of personality traits (Llewellyn amp Wilson

2003 Deamer amp Earle 2004 Shahhosseini el aI 2011) and influence of social variables

(Orhan amp Scott 2001 Roxas el aI 2008 Kirk~d 2009) to discover indigenous

entrepreneurship potential

The present study explores the entrepreneurship potential of unique native group in Sarawak

and examines the factors responsible for their participations in business sectors through

content and process variables Content variables focus on personality traits such as risk taking

propensity tolerance for ambiguity and innovativeness (Stewart amp Roth 2001 Wang amp

Zang 2005 Nicolaidis amp Katsaros 2011) while process variables consider knowledge and

experience attained as well as family upbringing which include family support financial

status and awareness (Morisson 2000 Schmitt-Rodermund 2004) The following section

provides the rationale of the present thesis identifying three significant reasons for

undertaking this research

12 Significance of Study t--1tbull ~bullbull bull

t

There are three reasons for investigating rel~t~onship J~etween personality traits social

variables and entrepreneurial intentions These reasons consider the urgent need to

empirically review the relationship between both indi~iduals aspects (personality traits and

social variables) and the intention of youth to involve in ~ntre~repeu~hip fh~ components of

3

personality traits for the present study are represented by three commonly described

entrepreneurship traits risk taking propensity innovativeness and tolerance of ambiguity

(Gurol amp Atsan 2006 Shahhosseini et aI 2011 Yildiz 2012) whereas the components of

social variables (Wyckham amp Wed ley 1990 Morrison 2000 Schmitt-Rodermund 2004 Bagheri amp PiHte 2011) are represented by attained knowledge and training or working

experiences as well as family upbringing

First research done on indigenous entrepreneurship in Malaysia (Jaafar et al 2009 Suhaila

amp Mohammad 2011 Fakrul amp Norhayate 2011 Doris et al 2012) targeted on specific

community mainly in West Malaysia whom are reported as more economically advanced

compared to other Bumiputeras in the country after the NEP and NDP eras (Government of

Malaysia 2005) By way of contrast the present study investigates the entrepreneurship

potential of indigenous communities in East Malaysia in particular Sarawak where higher

poverty rate is recorded Therefore in order to discover the potential of entrepreneurship

within Dayak community in Sarawak this project initiates the exploration of Dayaks

features and culture via their entrepreneurship traits and social setting as predictors to their

entrepreneurial intentions

Second researchers (Schumpeter 1934 Tamvada 2009 Marr amp Reynard 2010 Goel amp

Rishi 2012) also stressed out on the important role of entrepreneurship in economic growth

and poverty alleviation Tamvada (2009) afgUedll18tbttngmiddot ~f~emp~~yed improves a

persons welfare besides creates job opportunity as a povero-reduction tool At the same

time Marr and Reynard (2010) stated that the economic growth and transformation of four

rapidly emerging major economies (REMEs) countries they did survey on - Brazil China

India and Korea - are due to private enterprise and entrepreneurial acfiyities There is no bull [ Ii

4

Pusat Khidmat Maklumat Akademik UNIVERSID MALAYSIA SARAWAK

doubt that the Malaysian Government has set different types of policies to foster indigenous

business participation Thus this research provides a better understanding of the Dayak

description for policy makers NGOs and business support organizations particularly in

planning or utilizing government-support entrepreneurship programmes

Finally this study enables the readers to understand the level of Dayaks awareness towards

the concept of entrepreneurship and its benefits to the community group which still holds a I

gap in the literature Knowledge and skills are vital to enhance persons ability in order to

meet their basic needs in life and enable them to influence their life direction in almost every

situation By obtaining business-related education from primary level awareness on benefits

of entrepreneurship could be implanted from early age besides developing entrepreneurial

skills creativity and intention as well (Schmitt-Rodermund 2003 Pittaway amp Cope 2007

Alpkan et aJ 2010)

Otherwise efforts taken by the Sarawak Gdvernment to develop entrepreneurship skills

among Dayak could possibly become a tough mission as it is fundamentally not just

involving education and trainings but also changing mindset and attitude towards becoming

entrepreneurial Thus a key purpose of the present thesis is to gain an in depth understanding

of the Dayak youths entrepreneurship potential in strengthening entrepreneurship in

Malaysia

13 Researcb Objectives bull t

bull 11 ~ _ bull

The objectives of this study are twofold First the current observer is investigating the

potential of entrepreneurship among Dayak youth in Sarawak based on their imention to start

a business Second the potential of entrepreneurshi~ is also irlv~stlg~ted ~mpirically via the

5

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

-

1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 15: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

personality traits for the present study are represented by three commonly described

entrepreneurship traits risk taking propensity innovativeness and tolerance of ambiguity

(Gurol amp Atsan 2006 Shahhosseini et aI 2011 Yildiz 2012) whereas the components of

social variables (Wyckham amp Wed ley 1990 Morrison 2000 Schmitt-Rodermund 2004 Bagheri amp PiHte 2011) are represented by attained knowledge and training or working

experiences as well as family upbringing

First research done on indigenous entrepreneurship in Malaysia (Jaafar et al 2009 Suhaila

amp Mohammad 2011 Fakrul amp Norhayate 2011 Doris et al 2012) targeted on specific

community mainly in West Malaysia whom are reported as more economically advanced

compared to other Bumiputeras in the country after the NEP and NDP eras (Government of

Malaysia 2005) By way of contrast the present study investigates the entrepreneurship

potential of indigenous communities in East Malaysia in particular Sarawak where higher

poverty rate is recorded Therefore in order to discover the potential of entrepreneurship

within Dayak community in Sarawak this project initiates the exploration of Dayaks

features and culture via their entrepreneurship traits and social setting as predictors to their

entrepreneurial intentions

Second researchers (Schumpeter 1934 Tamvada 2009 Marr amp Reynard 2010 Goel amp

Rishi 2012) also stressed out on the important role of entrepreneurship in economic growth

and poverty alleviation Tamvada (2009) afgUedll18tbttngmiddot ~f~emp~~yed improves a

persons welfare besides creates job opportunity as a povero-reduction tool At the same

time Marr and Reynard (2010) stated that the economic growth and transformation of four

rapidly emerging major economies (REMEs) countries they did survey on - Brazil China

India and Korea - are due to private enterprise and entrepreneurial acfiyities There is no bull [ Ii

4

Pusat Khidmat Maklumat Akademik UNIVERSID MALAYSIA SARAWAK

doubt that the Malaysian Government has set different types of policies to foster indigenous

business participation Thus this research provides a better understanding of the Dayak

description for policy makers NGOs and business support organizations particularly in

planning or utilizing government-support entrepreneurship programmes

Finally this study enables the readers to understand the level of Dayaks awareness towards

the concept of entrepreneurship and its benefits to the community group which still holds a I

gap in the literature Knowledge and skills are vital to enhance persons ability in order to

meet their basic needs in life and enable them to influence their life direction in almost every

situation By obtaining business-related education from primary level awareness on benefits

of entrepreneurship could be implanted from early age besides developing entrepreneurial

skills creativity and intention as well (Schmitt-Rodermund 2003 Pittaway amp Cope 2007

Alpkan et aJ 2010)

Otherwise efforts taken by the Sarawak Gdvernment to develop entrepreneurship skills

among Dayak could possibly become a tough mission as it is fundamentally not just

involving education and trainings but also changing mindset and attitude towards becoming

entrepreneurial Thus a key purpose of the present thesis is to gain an in depth understanding

of the Dayak youths entrepreneurship potential in strengthening entrepreneurship in

Malaysia

13 Researcb Objectives bull t

bull 11 ~ _ bull

The objectives of this study are twofold First the current observer is investigating the

potential of entrepreneurship among Dayak youth in Sarawak based on their imention to start

a business Second the potential of entrepreneurshi~ is also irlv~stlg~ted ~mpirically via the

5

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

-

1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 16: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

Pusat Khidmat Maklumat Akademik UNIVERSID MALAYSIA SARAWAK

doubt that the Malaysian Government has set different types of policies to foster indigenous

business participation Thus this research provides a better understanding of the Dayak

description for policy makers NGOs and business support organizations particularly in

planning or utilizing government-support entrepreneurship programmes

Finally this study enables the readers to understand the level of Dayaks awareness towards

the concept of entrepreneurship and its benefits to the community group which still holds a I

gap in the literature Knowledge and skills are vital to enhance persons ability in order to

meet their basic needs in life and enable them to influence their life direction in almost every

situation By obtaining business-related education from primary level awareness on benefits

of entrepreneurship could be implanted from early age besides developing entrepreneurial

skills creativity and intention as well (Schmitt-Rodermund 2003 Pittaway amp Cope 2007

Alpkan et aJ 2010)

Otherwise efforts taken by the Sarawak Gdvernment to develop entrepreneurship skills

among Dayak could possibly become a tough mission as it is fundamentally not just

involving education and trainings but also changing mindset and attitude towards becoming

entrepreneurial Thus a key purpose of the present thesis is to gain an in depth understanding

of the Dayak youths entrepreneurship potential in strengthening entrepreneurship in

Malaysia

13 Researcb Objectives bull t

bull 11 ~ _ bull

The objectives of this study are twofold First the current observer is investigating the

potential of entrepreneurship among Dayak youth in Sarawak based on their imention to start

a business Second the potential of entrepreneurshi~ is also irlv~stlg~ted ~mpirically via the

5

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

-

1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 17: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

relationship analysis between youth entrepreneurial intention and the components of their

personality traits (entrepreneurship traits) and social variables (knowledge and experience

family upbringing) that could either trigger or hinder the intentions of becoming

entrepreneurial Thus the present study aims 1 to identi~ the relationship between the factors of personality traits and

entrepreneurial intention (EI) ofDayak youth

2 to identify the relationship between the factors of ocial variables and entrepreneurial

intention (EI) ofDayak youth

3 to investigate the extent to which personality traits and social variables that best

predicted entrepreneurial intention (EI) of Dayak youth

14 Scope of Study

This section outlines the structures of this thesis Chapter 2 provides an extensive review of

the relevant literature leading to the development of a theoretical framework of individuals

assets An analysis individuals assets as sources of entrepreneurial intention is presented

with a discussion of variables comprising a proposed hypothesized theory involving

individuals personality traits and social variables This followed by the self-construct

theoretical framework of the study

Chapter 3 presents the research method and design apP1ietltfutgtl1gh~ ~~y Jllstification

is provided for the application of quantitative measures fol~wed by a description of

participants and data collection procedures Data computing and transformation processes are

described follow by the validity and reliability of research instruments and statistical

procedures to test hypotheses

II middot bull

6

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

-

1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 18: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

The Chapter 4 concludes empirical findings and analysis from distribution of questionnaires

to 161 respondents around Sarawak Results arising from Principal Component Analysis

(PCA) on underlying variables are presented after summarization of data via descriptive

analysis This chapter ends with a correlation analyses and discussion on relationship exists between the depeJildent and independent variables Finally Chapter 5 concludes together the

key findings from all analyses revealing the contribution ofthis research

shy

-

1 tmiddot I I

7

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 19: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

CHAPTER 2

LITERATURE REVIEW

20 Introduction

This section beginsectlwith a review on the Malaysian economic development with intervention

of the Government whose intention is to improve the quality of life for the Bumiputera

people This is followed by an introduction of the Dayak ~oup which makes up the majority

of native communities in Sarawak Malaysia has been successful in transforming itself into an

upper-middle income economy and aims to attain high-income status by 2020 through its

r New Economic Model launched in 2010 Historically in the 1970s Malaysia was merely a

producer of raw materials such as tin and rubber From then onwards its economic activities

began to diversify and the Malaysian economy grew on an average of 73 between 1985

and 1998 despite the Asian financial crisis from 1997-1998 The economic growth rates were

maintained until 2008 accompanied by a drastic reduction in poverty which decreased from

228 in 1990 to 57 in 2004 (Malaysia 2006)

21 The Malaysian Poverty Eradication Plan

Government intervention via the New Economic Policy (1971-1990) National Development

Policy (1991-2000) and National Vision Policy (2001-2010) was one of the Malaysian

governments major efforts in alleviating poverty 1he-~ai~o erA4~~te poverty

regardless of race and restructure society to el iminate the identifi~tion of race with eco~omic

function Its main purpose was to reduce interethnic resentment due to socioeconomic

disparities particularly between the Chinese and Malay the largest indigenous ethnic group

in Malaysia lomo 2004) As a result of restructuring society which involved increasing t I ill t 1

bull bull I

8

- --

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 20: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

Bumiputera participation in commerce and industry Bumiputera share of corporate

ownership rose from 24 in 1970 to 193 in 1990 (World Bank 2013)

As the NEP and the NDP eras have ended the Federal Government has recently introduced two major develolment programmes Economic Transformation Programme (ETP) and

Government Transformation Programme (GTP) ETP is focused on twelve National Key

Economic Areas (NKEAs) while GTP covers six Natio~al Key Results Areas (NKRAs)

NKEAs are complemented by six Strategic Reform Initiatives (SRIs) which include

Narrowing Disparity SRI in an attempt to uplift low-income households and develop more

~ Bumiputera SMEs Through this programme more Bumiputera SMEs are expected to be

created and upgraded by accelerating their growth and positioning them to be more

competitive in the open market on their own Furthermore NKRAs under the GTP were

identified to improve socioeconomic growth of Malaysians which include raising living

standards of low-income households improving student outcomes and improving rural

development (Malaysia Performance Management and Delivery Unit 2012)

Apart from the Malay community the programmes did not seem to really benefit other

Bumiputera groups including the Dayaks in Sarawak who are still lagging behind

economically educationally and socially this has resulted in their ranking as one of the top-

five communities with high poverty rate in the country (Shari amp Osman-Rani 1996

Government of Malaysia 2005 Doris et aI iOI2) TIie-M4kl~lD1ftlIRity ~~~ managed

to increase their living standard and quality of life after the introduction of the NEP and NDP

~

with many of them shifting jobs to become professionals and bureaucrats (Fakrul amp Wan

Norbayate 2011) This situation is a stark contrast to the statistics that illustrated a high

proportion of the Dayak community being involved in elementary ~occupati~r~such as jobs t 1

9

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 21: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

in services and sales work with many of them poorly paid and living below the official urban

poverty line in Malaysia

11 The Dayak Natives in Sarawak

Sarawak has a population of almost 25 million with the highest number of native population

Natives of Sarawak are made up of 26 different ethnic groups and they can be divided into

two broad groups the natives who inhabit coastal areas (Malay and Melanau) and the natives

living in inner parts of Sarawak (Dayak) The Dayaks make up approximately 420 of the

Sarawak population the Malays and Melanaus constitute 280 and 300 of the states

population are Chinese and others The Dayaks include the Iban Bidayuh Bisayah Kedayan

Kelabit Kayan Kenyah Berawan Lunbawang Penan and Punan people as stated in the

Malaysian Constitution the Ibans are the biggest ethnic group with 288 followed by the

Bidayuhs with 77 as reported in 2010 (Gaffin 2011)

Historically the Dayak community has traditionally lived in longhouses consisting of many

rooms with each family occupying a room In fact this lifestyle is still practised by certain

ethnics in certain parts of the state particularly the Iban and Bidayuh groups The longhouses

are built along riverbanks or streams as the community depends on waterways for daily

needs farming and even transportation Most Dayaks in Sarawak are involved in shifting

agriculture as their major economic actiVity due middot tOTheit1ldnmll~in W8~ipg the land and

forest They also carry out fishing and hunting activities as w~H as collect jungle produce for _

their livelihood In the 1970s the expansion of timber industry in Sarawak had opened up

more employment opportunities to the natives 480 out of 22490 jobs created were filled

by the local natives and the Dayaks (Hong 1987) 1 middot

10

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 22: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

In recent years services sector has shown the highest figure in age distribution of employed

persons by industry in Sarawak it accounted for 508 which includes electricity gas water

supply wholesale mechanic retail transport hotel restaurant financial intermediation rea

estate public admin education health and social work However agriculture hunting and forestry still recor1led high distribution of employed persons with 247 dominated by the

Dayaks (Sarawak 2011) The participation of the Dayaks in civil service is an area of

concern with only 46 out of 28220 applications being successful as recorded up to

September 2012 (Malaysia 2012) this has contributed to the high number of Dayaks

involved in the private sector In terms of business and SMEs another survey done in

Sarawak in 1999 on indigenous entrepreneurship showed that only 261 (Table 21) of non-

Malay Bumiputeras were involved in business while the rest were Malays and Melanaus

(Bumiputera Commerce amp Industrial Community 1999 Lian 2003)

Table 21 Number of Bumiputera Entrepreneurs by Ethnic Group in Sarawak

Ethnic Group Frequency Percentage

Malay 1688 604

Iban 453 162

Bidayub 132 47

Melanau 377 135

OrangUiu 57 19

Others 92 33

Source BCIC Master Plan Study ofSarawak l9~2(~QQ9)~bull~ ~

I

One of the root causes ofwidespread pOverty amongDayak in Sarawak is their low education

and lack of intellectual skills (Madel ine et al 2006 Doris et al 2012) A survey done

between 1992 and 1997 showed that almost 70000 students dropped out frQm schools in

Sarawak and 800 of them were Dayaks who came from pOo familie~ ii~middotrural areas of

11

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 23: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

Sarawak These poor families often faced financial difficulties in sending their children to

obtain higher education Sometimes these children had no choice but to start working at a

young age to help support their parents although they were likely to end up with poorly paid

jobs due to lack of qualifications and skills (Marshal) 2006) This is a vicious cycle causing

one generation ~er th_e next to be trapped in poverty In addition Shari and Osman-Rani

(1996) reaffirmed that poverty in Sarawak is caused by multiple factors including low

household incomes falling prices of agricultural produ~ts rural-urban migration of youths

lack of productive assets and credit facilities as well as lack of dynamic grass-roots

leadership

23 Entrepreneurship Concept and Variables

Africa and the United Kingdom are among many countries around the world that have

adopted entrepreneurship to improve their economic growth and eradicate poverty In order

to solve its problem of high unemployment the African government concentrated on

developing strong small medium and micro-enterprises to create job opportunities (Nieman

2001) Meanwhile the UK government aimed to increase levels of enterprise small business

and entrepreneurship in the country by developing its entrepreneurship education and

producing graduates with high capabilities in managing and applying knowledge in action

(Collins et al 2004) The UK government recognises small business as an important driver

of economic growth It is currently one of the ri11lirt ~J1ectsf~lit~~Ibull business and

management research (Beaver amp Carr 2002 Beaver amp Prince 2004) this is besides its role

_ in the supply chain its ability to bring in innovative products to the marketplace which

stimulates competition (Hewitt 2000) and its integration with modern economic and social

redevelopment (Stanworth amp Gray 1991) The vital role of entrepreneurs in economic and bull 1- bull I

12

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13

Page 24: INDIGENOUS ENTREPRENEURSHIP: ENTREPRENEURIAL INTENTIONS OF ... Entrepreneurship... · "Indigenous Entrepreneurship: Entrepreneurial Intentions of ... CHAPTER 2: LITERATURE REVIEW

social growth has been recognised by many economists and entrepreneurs are seen as the

catalysts for transformation and improvement in the economy (Apospori el aI 2005)

There are several definitions of entrepreneurship and the best definition of this concept has yet to be agreed ulon Nevertheless it is widely accepted that the concept of entrepreneurship

is about creating or starting a new venture (Reynolds el al 2005) The various definitions of

entrepreneurship state that it involves a process of g~tting new ideas and innovatively

converting them into products or services with value (Johnson 2001) this is achieved by

taking major risks and devoting necessary time and efforts (Hisrich el al 2005) to turn

creative ideas into revenue It is believed that entrepreneurship is also a process of

incrementing wealth as true entrepreneurs are able to identify opportunities and seize them to

create something valuable to the market which in turn brings wealth to themselves or others

The wealth is not necessarily in financial terms but it also can be cultural social and

environmental enrichment

Entrepreneurial activity is shaped by various aspects such as entrepreneurs experience and

environment socialisation process and other motivation factors In particular career

dissatisfaction or having a family background of entrepreneurs can be a strong motivator for

entrepreneurial activity (Cromie el al 1992) On the other hand McClelland believes that

societies with a socialisation process that creates a high need for achievement produce more

~ middotrentrepreneurs (McClelland 1961) I 0 bull

For the purpose of the present study entrepreneurship potential is defined as possibility to

start a business whereas entrepreneurial intention refers to the desire to start up a business

Personality traits and social variables in the context of entrepreneurship are two of the most bull i f (II bull

13