ENTREPRENEURIAL JNTENTION AMONG FEB ... - ir.unimas.my intention among FEB... · keusahawanan di...

ENTREPRENEURIAL JNTENTION AMONG FEB UNDERGRADUATE STUDENTS IN UNIMAS

Nur Amni Batrisya Bihti Wadell

Corporate Master in Business Administration

2013

APPROVAL PAGE

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

acceptable standards of scho,larly presentation and is fully adequate, in scope and quality,

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

Dr. Harry Entebang

Supervisor

The research paper was summited to the Faculty of Economics and Business, UNIMAS

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

Master in Business Administration.

Dr Mohamad Affendy Arif

Dean, Faculty of Economics and Business

UNIMAS

DECLARATION AND COPYRIGHT

Name : Nur Amni Batrisya Binti Wadell

Matric Number : 12030004

I hereby declare that this research paper is to the best of the author's knowledge that of

the author except where due reference is made.

Signature: ___j._W\_~______

l" , if U>13Date:

© Copyright by Nur Amni Batrisya Bt WadeU and UNIMAS

11

,

ACKNOWLEDGEMENT

Alhamdulillah, by the will ofAllah, I am able to complete my Corporate Business Project

(CBP) within the required time. I would like foremost extend my sincere gratitude to all

those efforts, who facilitated the completion of this paper.

First and foremost I offer my sincerest gratitude to my supervisor, Dr. Harry

Entebang, who has supported me throughout my Corporate Business Project (CBP) with

his motivation, enthusiasm, and immense knowledge. His guidance helped me in all the

time of CBP work and writing the report by commenting on my views and helping me

understand and enrich my ideas. I am sure that CBP would have not been possible

without his help, support and patience. One simply could not wish for a better or

friendlier supervisor.

. Besides, I would like to express my gratitude to Dr. Muhd Kharique Muhd

Sadique and Dr. Abang Zainoren Abang Abdurahman for their generous supportive ideas

and assistance that made my CBP report a success. From the experience in preparing this

project paper, I had learned a lot of things and enjoy the process of investigating,

analysing, theoretical building that bringing meaningful to the CBP report.

Finally, 1 would like to thank everybody who important for me including my

family members and my friends that has been a constant source of love, concern, support

and strength all these years. Last but not the least important my fiance, Zaki Bin Johnny,

for his love, patience, encouragement and continuous support which have made it

possible for me to complete my CBP. To all those people, thank you so much.

iii

I'

,......

ABSTRACT

r Entrepreneurship becomes a buzz word nowadays as it has positive impacts towards

economic development. Most of the entrepreneurial studies are based in the developed

countries as compared with developing country like Malaysia, especially in Sarawak

regi0.y Therefore, this study is conducted to understand the factors that influence

entrepreneurial intention among FEB (Faculty of Economics and Business)

undergraduate's students at UNIMAS. Besides, this study also done to identify what are

the most important factors that may have influenced students to pursue entrepreneurship

as they career choice after graduation. Using survey questionnaire and convenience

sampling, two hundred and ninety two undergraduate's students were selected for this

study. The data collected were analysed using correlation and mUltiple regression

analysis. The results revealed that attitude, subjective norm, perceived behavioural

control, entrepreneurship education and family background positively influenced

entrepreneurial intention among FEB undergraduate students Out of these factors,

attitude emerged as the most important factor. Finally, some of recommendations were

suggested for future research.

Keywords: Attitude, Socia) Norm, Perceived Behavioral Control, Entrepreneurship

Education, Family Background, and Entrepreneurial Intention.

iv

ABSTRAK

Keusahawanan menjadi topik perbualan hangat sekarang ini kerana ianya mempunyai

kesan yang positij ke arah pembangunan ekonomi negara. Kebanyakan daripada kajian

keusahawanan di lakukan di negara maju membandingkan negara membangun seperti

Malaysia, terutama sekali dalam rantau Sarawak. Lantaran itu, kajian ini dijalankan

untuk memahami faktor-faktor yang mempengaruhi hasrat keusahawan di kalangan

pe/ajar mahasiswa FEB (Fakulti Ekonomi dan Perniagaan) di UNlMAS. Selain itu,

lcajian ini juga diadakan untuk mengenal pasti apakah faktor paling penting yang

mempengaruhi pelajar untuk memilih usahawan sebagai pilihan kerjaya mereka setelah

bergraduat nanti. Dengan mengunakan borang soal selidik dan persampelan mudah,

eramai dua ratus sembilan puluh dua orang pelajar telah dipilih untuk menyertai kajian

ini. Data yang dikumpul akan dianalisis mengunnakan analisis korelasi and regresi

berganda. Hasil kajian menunjukkan bahawa sikap, norma subjektif, kawalan tingkah

laku, pendidikan keusahawanan dan latar belakang keluarga secara positij

mempengaruhi niat keusahawanan antara pelajar mahasiswa FEB. Daripada faktor

faktor ini, sikap telah muncul sebagai faktor terpenting. Akhirnya, beberapa cadangan

untuk penyelidikan masa depan juga telah disarankan dalam kajian ini.

Eata kunci: Sikap, Norma Subjektif, Kawalan Tingkah Laku, Pendidikan Keusahawanan,

Latar Belakang Keluarga dan Hasrat Keusahawanan.

v

I

Pusat Khidmat Maklumat Akademik UNIVERSm MALAYSIA SARAWAK

TABLE OF CONTENTS

CONTENT PAGE

Approval Page

Declaration and Copyright ii

Acknowledgement III

Abstract IV

Abstrak v

Table of Contents VI

List of Tables XI

List of Figures xii

List of Abbreviations XIV

CHAPTER 1: INTRODUCTION

1.0 Chapter Introduction

1.1 Background of the Study

1.2 Problem Statement 4

1.3 Research Questions 5

1.4 Research Objectives 6

1.5 Scope of the Study 7

1.6 Significant Of the Study 7

1.6.1 Contribution to Knowledge 8

VI

,..

1.7 Definition of Key Terms 9

1.7.1 Entrepreneurial Intention 9

1.7.2 Altitude 9

1.7.3 Social Norms to

1.7.4 Perceived Behavioral Control 10

1.7.5 Entrepreneurship Education 11

1.7.6 Family Background 11

1.8 Organization of the Study 12

1.9 Chapter Conclusion 13

CHAPTER 2: LITERATURE REVIEW

2.0 Chapter Introduction 14

2.1 Entrepreneur and Entrepreneurship Definition 14

2.2 Entrepreneurship Revolution History 16

2.3 Entrepreneurs as Career Choice 17

2.4 Overview of Entrepreneurship Education 19

2.5 Entrepreneurial Intention Model 21

2.6 Theory of Planned Behaviour (TPB) 22

2.7 Factors Influencing Entrepreneurial Intention 25

2.7.1 Altitude 25

2.7.2 Subjective Norm 25



2.7.5 Family Background 28

VII

--

2.8 Relationship between Independent and Dependent Variables 30

2.B.1 Attitude and Entrepreneurial Intention 30

2.B.2 Subjective Norms and Entrepreneurial Intention 30

2.B.3 Perceived Behavioural Control and Entrepreneurial 31

Intention

2.B.4 Entrepreneurship Education and Entrepreneurial Intention 32

2.B.5 Family Background and Entrepreneurial Intention 33

2.9 Theoretical Framework 34

2.1 0 Chapter Conclusion 36

CHAPTER 3: RESEARCH METHODOLOGY


3.1 Study Design 37

3.2 Population and Sample 38

3.3 Sampling Method 38

3.4 Survey Instrument 39

3.5 Hypothesis Summary 41

3.6 Pilot Test 41

3.6.1 Reliability Test 42

3.6.2 Validity Test 43

3.7 Data Analysis 43

3.7.1 Descriptive Statistic 44

3.7.2 Inferential Statistics 45


VIII

l

I...

CHAPTER 4: FINDINGS OF THE STUDY


4.1 Response Rate 47

4.2 Respondent Background 48

4.2.1 Respondent Demographic Profile 48 i

4.2.2. Respondent General Information 50

4.3 Descriptive Statistics of Data Collection 52

4.3.1 Attitude 54

4.3.2 Subjective Norm 55 I'



II 4.3.5 Family Background 58

I 4.3.6 Entrepreneurship Intention 59 !

4.4 Validity Test and Reliability Test 60 (

4.4.1 Bartlett's Test ofSphericity and KMO 60

4.4.2 Factor Analysis 62

4.4.3 Reliability Analysis ofItems 65

4.5 Inferential Analysis 66 , I4.5.1 Correlation Analysis 66

4.5.2 Regression Analysis 68

4.5.3 Regression Analysis ofANOV1 Test 75


ix

CHAPTER 5: DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS


5.1 Discussion 77

5.2 Conclusion 79

5.3 Recommendations for Future Research 81

REFERENCES 82

APPENDIX 92

Appendix A: Questionnaire 92

x

LIST OF TABLES

Table Page

Table 3. 1: Summary of the Questionnaire Design 33

Table 3.2: Summary of the Hypotheses 35

Table 3.3: Reliability Statistic for the Pilot Test 36

Table 4.1 : Response Rate 40

Table 4.2: Respondent's Demographic Profile 42

Table 4.3: Career Intentions after Graduation 43

Table 4.4: Variables Influencing Intention to Become Entrepreneur 43

Table 4.5: Mean Categories 44

Table 4.6: Descriptive (Mean and Std. Deviation) Analysis of the Variables 45

Table 4.7: Means and Standard Deviation of Attitude Items 46 .

Table 4.8: Means and Standard Deviation of Subjective Nonn Items 47

Table 4.9: Means and Standard Deviation of Perceived Behavioral Control Items 48

Table 4. \0: Means and Standard Deviation of Entrepreneurship Education Items 49

Table 4. 11 : Means and Standard Deviation of Family Background Items 49

Table 4. 12: Means and Standard Deviation of Entrepreneurship Intention Items 50

Table 4. I 3: KMO Categories 51

Table 4. 14: KMO and Bartlett's Test 52

Table 4.15: Bartlett's Test of Sphericity and Kaiser-Meyer-Olkin (KMO) 52

Table 4.1 6: Rotated Component Matrix 53

Table 4. 17: Criterion for Acceptability 55

Table 4.18: Reliability Statistics 55

Table 4.19: Pearson's Correlation Scale 56

xi

Table 4.20: Correlation between Variables 67

Table 4.21: The Effect of Attitude on Entrepreneurial Intention 69

Table 4.22: The Effect of Subjective Norm on Entrepreneurial Intention 70

Table 4.23: The Effect of Perceived Behavioral Control on 71 Entrepreneurial Intention

Table 4.24: The Effect of Entrepreneurship Education on Entrepreneurial 72

Intention

Table 4.25: The Effect of Family Background on Entrepreneurial Intention 73

Table 4.26: Regression Analysis on Model Summary 74

Table 4.27: Regression Analysis of ANOVA Test 75

Table 4.28: Summary Result of Hypotheses Testing 76

xii

LIST OF FIGURES

Figure Page

Figure 2.1: Theory of Planned Behavior 24

Figure 2.2: Theoretical Framework of the Research 35

XIII

ATT

ANOVA

EE

EI

FEB

FB

REls

Ibid

KMO

PBC

SN

SPSS

TPB

LIST OF ABBREVIATIONS

Attitude

Analysis of Variance

Entrepreneurship Education

Entrepreneurial Intention

Faculty of Economics and Business

Family Background

Higher Educational Institutions

Ion Beam Induced Deposition

Kaiser-Mayer-Olkin Measure of Sampling Adequacy

Perceived Behavioral Control

Subjective Norm

Statistical Package for Social Science

Theory of Planned Behavior

xiv

CHAPTER ONE

INTRODUCTION

1.0 Chapter Introduction

This study explores the factors that influence entrepreneurial intention among FEB

undergraduates student. This chapter includes the background of the study, followed by

problem statement, research question, research objectives, scope of study, and

significance of the study, definitions of key terms and organization of the study.

1.1 Background of the Study

Entrepreneurship has become a buzzword in this new era. It gains a lot of attention by

many countries as it is act as a primary engine of economic growth (Abd Razak Ahmad

et at., 2012). The Global Entrepreneurship Monitor states that countries with higher

levels of entrepreneurial activity will enjoy strong economic growth (Henderson, 2006).

The importance of entrepreneurship roles in supporting the economic growth of nation

has also been recognized by entrepreneurship scholarS. Arguably, entrepreneurship can

transform the knowledge into new products, new jobs, and new firms (Henderson,

2006). For a developing country like Malaysia, entrepreneurial activities are seen as a

tool to improve the distribution of income, to stimulate economic growth, and to reshape

an economic structure. In fact, entrepreneurship is very crucial to the health of

1

• Malaysia's economy as Malaysia is moving forward to become a high-income economy

in 2020 (Abdullah, 1999).

By realizing the potentials of entrepreneurship in achieving the vision 2020, various

policies and plans such as the New Economic Policy (1971-1990), the National

Development Policy (1990-2000), Vision 2020 and the New Economic Model (NEM)

are carried out by the Malaysian government in the developing of entrepreneurship in

Malaysia (Norasmah Othman et aI., 2012). Besides, some funding and incentives also

allocated to spur small and medium enterprises (SMEs) (Ooi & Shuhymee Ahmad,

2012).

In particular, the Malaysian government also introduces entrepreneurship education and

training programmes in higher learning institutions since today's students are

tomorrow's potential entrepreneurs (Adnan Iqbal et aI., n. d). In fact, entrepreneurship

education and training programmes have been identified as an effective strategy to curb

the unemployment problem among graduates (Mazura Mansor & Norasmah Othman,

20 II ). This serious effort can been seen as more budget has been allocated for

entrepreneurship education in the Ninth Malaysia Plan as compared to the Eighth

Malaysia Plan (Md Nor Othman, Ezlika Ghazali & Yeoh, 2006).

Early research on entrepreneurship field and graduate career choice has highly

emphasized on personality traits and demographic factors (risk taking propensity,

internal locus of control and need for achievement, parents' occupation background, and

2

the role of family exposure to business) (Mubbsher Munawar Khan et aI., 20 II;

Muhammad AsifTanveer et aI, 2013; Basu & Virick, n. d).

Lately, many scholars are interested to investigate the entrepreneurial intention using

intention model such as theory of planned behaviour (Azjen, 1991), Shapero and

Sokol's (1982) theory of the entrepreneurial event, the model of implementing

entrepreneurial ideas (Bird, 1988) and the maximisation of expected utility model

(Douglas and Shepherd, 2002) (cited in Iakovleva et aI., 20 II). Among these theories,

the TPB has proven to be successfully and consistently in predicting entrepreneurial

intentions (Ad nan Iqbal et aI., n. d; Aizzat et aI., 2009; Arifatul et aI., 20 \0; Autio et aI.,

2001, Basu & Virick, n. d; Gurbuz & Aykol, 2008; Xue et aI., 2011).

Yet, there is little understanding of the factors that influence students' intentions to

become an entrepreneur particular among undergraduate students in Sarawak.

Therefore, this study tries to explore the factors such as entrepreneurship education,

family backgrounds, attitude, subjective norms, and perceived behavioral and their

relationship with entrepreneurial Intention (EI) among university students in Sarawak.

This study is adopting an entrepreneurial Intention (EI) model: the Theory of Planned

Behavior (TPB) by Ajzen (1991).

3

1.2 Problem Statement

The importance of entrepreneurs and entrepreneurship is long recognjzed by scholars

(Tung et aI., 20 II). It plays a vital role for new venture creation, existing venture

expansion, social, technological and economic development of the country. Presently,

the importance of entrepreneurship goes much further where it has become a priority for

the most modem policy makers in the world including Malaysia. According to Mason

and Marhaini Ibrahim (2012), the Malaysian Government already recognized the

contribution ofentrepreneurship towards the Malaysian economy.

On the other hand, the emphasis on entrepreneurship education in Malaysia higher

educational institutions (HEls) has started since 2003 as all local public universities

students are encouraged to pursue entrepreneurship as a career jobs since the job market

become more competitive nowadays (Norasmah Othman et aI., 2012). Moreover, the

number of unemployed Malaysia graduates has increased each year. It is estimated that

around 9,338 graduates are unemployed in early 1990s and then increased to 24,413 at

the end of 1990s.

The number keep on increasing to 162,722 in the year of 2005, in which more than half

(67 percent) of them were graduates from public u~iversities and others were private

graduates (Wai Ching, 2008). Therefore the implementation of entrepreneurship

education and training has been seen as the best strategies to curb the issues of

unemployment among the Malaysian graduates.

4

Pusat Kbidmnt MakJumat Akadcmik UNlVERSITI MALAYSIA SARAWAK

However, despite the strong encouragement from the government, yet entrepreneurship

as a career choice still rarely among graduates and the number of participating among

graduates remains low. They view entrepreneurship as a second or final choice when

selecting a career after their graduation. Mohd Salleh (2002) and Zolkafli et al. (2004)

has observed that less than 0.4% of Universiti Utara Malaysia graduates are joined with

entrepreneurship (Norasmah Othman & Salmah Ishak, 2009).

Similarly, in MARA, after 3 years of taking the business and entrepreneurship based

programmes, students' interests in pursuing self-employment seemed to dissipate

(Mumtaz, n. d). Therefore, there is need to conduct a study focusing on student's

entrepreneurial intention to understand the factors that influencing their decisions to

become an entrepreneur. This study also needs to investigate what the most important

factor influence student to pursue entrepreneurs as their career choice after they

graduation.

1.3 Research Questions

By conducting this study, researcher hopes can solve research questions as mentioned

below:

I. To what extend FEB undergraduates student wiH pursue entrepreneurship venture?

2. What are the main factors influencing their intentions to choose entrepreneurship as a

career?

5

1.4 Research Objectives

• Main Objective

The main concern of this study is to explore the factors that influence entrepreneurial

intention among FEB undergraduate students at UNIMAS, in Kota Samarahan,

Sarawak. This study seeks to understand factors such as Attitude, Social Norm,

Perceived Behavioral Control (Theory of Planned Behavior), Entrepreneurship

Education and Family Background on entrepreneurial intention among FEB

undergraduates students at UNIMAS.

The objectives of this study can be summarized as follows:

• Specific Objective

i. To identify factors that influence entrepreneurial intention among FEB

undergraduate students at UNIMAS.

11. To identify the most important factor that influence entrepreneurial intention

among FEB undergraduate students at UNIMAS.

6

1.5 Scope of the Study

The scope of this study looked at the context and the respondents that involved in this

study. The main target population is FEB (Faculty of Economics and Business)

undergraduate's students at UNIMAS (Universiti Malaysia Sarawak) that located at

Kota Samarahan, Sarawak. This faculty have five undergraduates' programmes namely

Finance, Business Management (Marketing), International Economics, Industrial

Economics and Accountancy.

1.6 Significant of the Study

First, the findings of this study will help the educators, administrators and Ministry of

Higher Education in Malaysia by providing valuable inputs to promote and plan the best

policy and curriculum in Entrepreneurship Course for university students. By enhancing

the Entrepreneurship Course, it will attract more students especially for non-business

student to become entrepreneurs.

Second, the results of the study also have the potential to provide important insights for

policy makers in preparing what kind of supports and incentives that are needed for

graduates to develop their entrepreneurial career. This is supported by Thompson (2004)

where he states that support programs for potential entrepreneurs need to be carefully

targeted around their needs.

7

1.6.1 Contribution to Knowledge

This study has several contributions to knowledge. First, the study helps to add to the

existing knowledge in entrepreneurial intention research area due to the limited

knowledge on entrepreneurship among university students especially in Sarawak.

Therefore, this study is useful to provide a profile or overview of entrepreneurial

intentions among students in Sarawak public university and contributes to theory

building.

Second, the result from this study provide a valuable input for universities in Malaysia

to understand the important of entrepreneurship education or programs in university as it

can encourage university student to become entrepreneurs one day. At the same time,

educators can enhance and improving the co-curriculum or activities from time to time

to make sure student are equipped with necessary skills and knowledge to become a

successful and knowledgeable entrepreneur.

8

1.7 Definition of Key Terms

Basically, this study concerns on entrepreneurial intention definition, list of the

independent variables and dependent variable. These concepts have specific defmition

that needs to be understood in order to develop the comprehension of this study. The

definitions of terms that will use in this study are as follows:

1.7.1 Entrepreneurial Intention

Generally, entrepreneurial intentions are a state of mind, which directs and guides the

actions of the individual toward the development and the implementation of new

business concepts (Bird, 1988). It can be viewed as the intention of a person to perform

new venture creation (Grundsten, 2004; Krueger, 1993).

1.7.2 Attitude

Attitude refers to the degree which a person has a favourable or unfavourable evaluation

or appraisal of the behaviour in question It refers to the degree to which the individual

holds a positive or negative personal valuation about being an entrepreneur. For

example, I like it, it makes me feel good, and it is pleasant, it is more profitable, has

more advantages (Ajzen, 1991).

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