Ug S"co"d tnternatl

IN SEARCH OF INDONESIAN ENTREPRENEURS' VALUES:A PROPOSED STUDY

Sabrina O. Sihombingr

Universitas pelita Harapan, JakartaINDONESIA

Email: rsabrinasihornbing@gntail.com

ABSTRACT

Enlrepreneur'ship i't one mqin .signi/icctnt .factor thuttcontribtrle itt

enhctncing ecortorttic rrever.pment Jor mony counrries. specificrr1,,enlreprenellrs conlribute substanlioll,- to job creation, new venlurecreolion, protluct antl service innovqlion, antl mctny more. Thus, lhereis o 5;reol dectl of'resectrch inlerest in enlrepretteurship. Llthile exlensiveresearch on enlrepreneurshilt have beei conclucterJ to erplore undexamine vorious foclors lhcrl inl/ttence inlentiott qnd clicision tobecome ctn entrepreneur, less attenlion has been git:en to utttlerstandenlreprenettr personol values. On the other hctncl, ihe concept

'f vtrltrcis one inrportutl variable lo htrntcrn ly'b because vcrlnes inJtuince a1aspecls of human life. ll'toreover, values ctre knov,tt tts lhe mist ctefiningelement,s oJ' culture. Therefore, this current ,t,d1: ,r,ii

';ipi")ienrerpreneurs' vorttes. specy'icatty, this re,searcrt aims tg erprore andidenlifii in"glrumental ancl terminal vnlue.g of Inclortesitnt enrre,reneurs.Reseorch melhod x'ill be clesignecl ro crciclress stoges in ictentifiingctrn'enl instrumenlal and lerntittql vultte.s of lndonesic,,, entreprerer,rs.Dora ctnqrvsis wiil be c:onsistent with procedures.for creveroping rrnt",Keyrvords: varues, instrumental, tenninal, entrepreneur, rndonesia

INTRODUCTIONEntrepreneurship is one main significant factor that contribute in enhancing economicdevelopment fbr man,v countries. Specifically, they contribute substantially to job creation, newventlrre creation, product and service innovaiion, and many more (van praag & versloot, 2007).Thus' there is a great cleal of research interest in entrepreneurship. while extensive research onentrepreneurship have been conducted to explore and exarnine various fbctors that influenceintentiotl and decisiorl to become an entrepreneur, less attention has been given to understandentreprenellr personal values. value is defmed as a [,'pe oi u"ti.r that

-tuides selection orevaluation of behavior (Schwarlz, 1999). The concept of value is one important variable tohttman life because valttes influence all aspects of human life. In other r,vorcls, personal valuesplal' a critical role in detennining entrepre,eurial behavior (Lan et al., 2009; Fritzsche & oz,2007, Schrvafiz,2006; Rohan, 2000). >\ sr'r 'vvr) t ilrzrL

The Rokeach value Surve-v (RVS) is knorvn as one of value lneasurement. The RVS wasde'eloped b-v Rokeach (1913) in order to rneasirre tu,o kinds of values: instrLunentul andlenttinol' Tenninal values refer to desired end states of existence or ultimate modes of livingrvhich have been idealized. This typeof values rnay be self-centered or society-centered.

! i r,',\econtl I nl e rnrtl i ttnrtl Confbrenc:e o n ll nt reprengtr rs hi lt

\rrother t1.pe of talues, i.e., instrumental refers to modes of- behavior and consist of troral',rlrres and conrpetence valttes (Rokeaci't. 1913). Though the RVS has been evalllated

in nranl,.rrrpirical investigations ( e.g., Giacomirlo et al',20i3; Musil et al'.2009; Alien, 1994; Wang et:rl 1994), it is recogtlized that the RVS u'as developed by Rokeach in westem cotltext' On the,,1lrer hancl, dilferent cultures ref-iect values clifferently (Evans et al-, 2009). Morcover,li.keach's rvork is claimed as out-of--date because it rvas cleveloped in 1968-1973. Yet, society:rrrr[ people valttes ale changing gradually (Blackrvell et al.' 2007; Arnett,2002) as impacted by:,everal factors sucir as globalization (Srvadzba, 2011; Harvkins & Mothersbaugh. 2010),1'0litical change (Lee,2003), econornic development (Tibbs,2011), and technology (Srvadzba,.,0tty. Therefore. this research aims to cxplore and identily cllrrcnt instrumental and terminalr rrlues of Indonesian entrepreneurs.

I,ITERATURE REYIEWl'ulueslhcre are rr-rany deflnitions of values ([,an et a1.,2008; Lombaert,2003). Some peopie relate'.lues with nrarketing such as

the term ''values of money" and "consumer value" (Zetterberg,l99g). According to Rokeach (1973,p.5),a value is defined as an enduringbeiief that a specificrrrode of conduct or endstate of existence. Furthermore, Rokeach pointed out that values areprescriptiye beliels that they are ''abstract icleals" which represent a person's conception of thetlre desirable. In harmony with Rokeach's clef-rnition of value, McGregor (2000, p 94) delinesvalues as mental pictures of important needs and goals and affect hoiv one thinks about and seesoneself, what onc rvants out of tif. and rvhat one is u'illing to trade off to get something in5cturn. Researchers shgrvs that personal values are people beliels that are intrinsic and lasting inan indivitlual's lit-e (e.g., Fries et al.,2007; Lages & Fernandes,2005). There are five featuresof values are as follorvs. First, values are beliels. Second, those beliets lead to desirablebehnvior andior end states. Third, values go be1'ond specific situations. Fourth, values explainu,hy people select or evaluate events and behavior. Fifth, values are ordered by a ccrlainhieiarchiial importance (Gmnert & Scl-rerhom, 1990 cited b1" Wang et al., 1994)'

Instrumentul and Terninsl VsluesThe Rokeach Value Survey (RVS) is knor.vn as one value measurement in social science' It wasdeveloped by ILokeach 1ilOS, 1973) in order to measure trvo kinds of values: instrumental andterminal (Table l). Terminal values refer to desired end states of existence or ultin-rate modes ofliving rvhich have been idealized. This typeof values may be selt--centered or society-centered'Anoiher type of values, i.e., instrumental refers to modes of behavior and consist of moralvalues and competence values (Rokeach , lg13). To be able to understand respondents'instrumental and terminal values, they are asked to rank order each value as to its importance intheir daily life.

l: Table l. Instrumental and Terminal Values

A Comtbrtable Life (Prosperous Life)Equality (Brotherhood & Equal Opportunity)An Exciting Life (Stimulating, Active Life)Family Security (Taking care of lovcd ones)Freedom (lndependence and frcc choicc)Health (Physical and mental wcll-bcing)Inner Hamony (Freedom from inncr con{'lict)Mature Love (Sexual and spiritual irrtirnar:y)

Terminal values:lnstrumental values:Ambitious (Hardworking, Aspiring)Broad-minded (Open-minded)Capable (Competent; effective)Clean (Neat and tidY)Courageous (Standing up for your beliefs)Forgiving (Willing to pardon others)Helpful (Working for the rvelfare of others)Honest (Sincere and truthful)Imasinative (Daring and creativeNational Security (Pry1gglutt !i1)trI illtaIk

'AEF-1' '11'

The Seconcl I nternotional Llru!/i:rr.,lr t: 9n Entrepreneurfu

Pleasure (An enjoyable, leisureSalvation (Saved; eternal lif-e)Self-respectA Sense of Accornplishment (lastingcontribution)Social Reco_snition (Respect and admiration)True Friendship (CIose companionship)Wisdom (A rnature understanding of Life)A World at Peace (World liee of war andconflict)A World of Beauty (Beauty'of nature and thearts )Sotrrce: Rokeoch (1973)

-)

The RVS has been evaluated in many empirical investigations ( e.g., Iskra & Moskvicheva,2014:. Quyen et al.,2014; Giacomino et al., 2013 Wang et ai. 1994). In its original fonrat, rheRVS recluires subjects to rank each value in the list terrninal and instruntental values. Horvever.this procedttre results in one main limitation oFthe RVS., that is. respondents are forced to rankall values to its importance as their guiding principle of their life (Wang et a1., 1994). Toovercome that limitation, a modified interval Liken-type scale is frequently employed (e.g.,Giacomino et aI.,2013; Raboteg- Sarii et al., 1997; Wang et al.l994). With this modification,the surve,v is becorning easy to ernploy and requires less time to cornplete.

Va I u es er n rl enlreprene urs hipWhy sorle countries produce more entrepreneurs'/ Researchers have fbcused on cultural valuesin order to answer that question. Since values guide people to behave, thus personal valuesguide people in their decision to become entreprcneur or their entrpreneurship activities.Moreover, values that held b.v entrepreneurs have implications for the entrepreneur such as horvto start ne\\'ventues, how to create and manage the ventures. Researches have acknorvledged theinflrtences of personal values toward entrepreneurship (Jakubczak & Rakorvska, 20l1Anchorena & Ronconi, 2012; Halis et a1.,2007 Momis et al., 2002).

Value is knorvn as one core element of culture (Yuan & Dong, 2006). Therefore, differentcultures lvill provide different values (Evans et a1.,2009; YLran & Dong. 2006). For instance,Westem values tend to hold an independent vielv of the self rvhereas non-westerx values arenrore interdependent r.vhich stresses on connectedness and relationship (Evans et at.,2OO9')-Table 2 provides values differences for several countries.

In dependent (S e I t--rel i ant; sel f-suffi cient)Intellectual (lntelligent and reflective)Logical (Consistent; rational)Loving (Aflectionate and tender)Loyal (Faithfi"rl to friends or the group)Obedient (Dutiful; respectflrl)Polite (Courteous and rvell-mannered)Responsible (Dependable and reliable)S el f'-control led ( Restrained ; sel f-disciplin ed)

Table 2. Values differences in several countriesCountry ValuesAntericax

Australia* x

Achievement and success, Activity. Efficiency and practicality,Progress, Material cornfbrt, Individualism, Freedom, Externalconformitv, Humanitarianisnr, Youthflriness, Fitness and health.

Respect for democracy, A strong sense ofjustice, A sense of fairness,Tolerance, Care for others, A potverflll sense of egalitarianism, Aless selfish society, Freedom of self-deternrinatiorr

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('hina***

I'hailand***x

Malaysia** *x

lndonesia***xx

,\rntrces; *Schif/inan and Kanuk (2010), "*' Black-t;'ell et al. (2006), *** Faure & Fttng (2008),***xsian et ctt. (2007),x*** Komin (1995, in Rochmon, 2007),*****Sihontbittg (201-1)

ITESEARCH NTETHODSt'ttere will be l-ive stages in identifying current instrumental and terminal values of Indonesiancptrepreneurs. Data analysis rvill be consistent rvith procedures 1'or developing scales (e.g.,Sihombing & Pongtuluran,20ll;Verbekc,2007; Parasuraman et a1..2005: Adcock & Collier,2001; Churchill, 1 979).

,ltoge I - E-xplorutory Research and ltem GenerationIlased on literature revierv, an open-ended questionnaire will be developed tc'r erploreinstmmental a1d terminal of entrepreneurs'values. Furthennore, fiequently-mentioned valueswill be converted into items in order 1cl obtain the baseline pool of value items. Another sourcefbr item generation rvas instrumnetal and tenninal valrtes devcloped by Rokeach (1973). Itemgenerations in this stage can be stated as the rnost important part in developing measurement(Hinkin, 1995). A combination oldeductive and inductive approach rvill be applied to generateitems. Furthennore, expert judges lvill be used in this research in order to enhance tlre itemspool of value statemeni(Diamantopoulos, 2005). Expert judges that will be chosen should haveexpertise in the research area (i.e. expert knowledge of the topic). Expert judges rviil be askedrvhether items in the list of value items are representing frequently mentioned value statel-nents.When frequently-mentioned values are converted into items, several bias types such as double-barelled, ambiguous, leading, and other bias iterns r.vili be eliminated in initial screenin-e.Expert judges rvill also assess content validitv of all value items.

Stage 2 - Questionnsire design

Likert-type scale will be used in this research. Respondetns rvill be asked the degree to rvhichs(he) agrees with a statement: strongly agree, agree, neutral, disagree, or strongly disagree.General instructions rvill be locatecl at the top of the page. This research rvill also apply a pilotstudy prior to administering the questionnaire to a sample of respondents in order to establishcontent validity. In order words, a pilot study rvill ensure questionnaire clarity and qttestionrvording. A pilot study will involvc I0 rcspondents and invite then-r to comment on the questions

Guanxi, Importance ol'lhce, Thrift, Farnily and group orientation,Aversion to larv. Respect for etiquette, a-ee and hieriirchy, Long-tcrnrorientation, Traditional creeds.

Ego orientation, Grateful relationship orientation. Smooth interpersonalrelation orientation, Flexibility adjustment orientation, Religiosit-vorientation, Education competence orientation, Interdependenceorientation, Fun-leisure orientation, Achievement-task orientation.

Valuing time, Perseverance, Pleasure of rvorking, Dignity ol'sirlplicity,Character, Kinclness, Inf-luence ol examples' Obligation of duty,Wisdorn of econonty, Patiencc, Inlprovenrent of talent. Joy oloriginating.

mutual assistalce, detnocracy, religion, hanlony, hospitalitl', religiousfanaticism, and individualism.

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and wordings. The comments of these 10 individuals then will providc lilr rcvisions to thequestionnaire.

Stage 3 - Data collection und santpleData will be collected through closed-ended questionnaires. A samplc size of 500 rvill beestablisheit in this research. A purposive design sampling rvill be employed. Two main criteriasare: (1) respondents should have been at least one year in become an small or medium ventureentrepreneurs, and (2) respondents live in cities of Tangerang and Jakarta. Personal interviervsrvill be applied to enslrre the respondents can frll-in the questionnaires. This method is alsochosen since data collection through personal intervieu,s will yield higher response rates thanperson al l.v-administered questionnaire.

Item recluction rvill be performed by item-to-total corelations and principal componentsexploratory factor analysis. Iterns lvill be dropped rvhen item-to-total correlatiotts are less than0.50. Then, the remaining items rvill be factor analyzed. Exploratory factor analysis rvithvarimax rotation using the criterion of eigenvalues greater than one will be applied in order toperfbrm value items.

Stage 5 -

Scale validatiottA total of 500 respondenst r,vill be included to validate the scale. The fundarnental criteria ofgood measures (i.e., reliability, dimensionality, and validity) rvill be applied in this research.Reliability analysis rvill be first conducted. Specifically,examination of coefficient alpha anditem-to-total correlation will be conducted to delete itenrs rvhose elimination improvedrcliability coefficient alpha. Then, exploratory f'actor analysis (EFA) rvill be performed todctermine the number of underlying dimensions fiom a data (Hair et al., 2006). Moreover, allitems revealed by the analysis rvill be preceded through confirmatory fhctor analysis (CFA) as acon fi nnaton perspectivc.

CONCLUSIONThis research aims to identify current instrumental and terminal valttes of Indonesianentrepreneurs. From a theoretical point of view, the results of this study give contributions tothe understanrling of entrepreneur's values, specifically' instrumental and terminal values.Terminal values sholvs the objectives of the life of a person, that is, the ultirnate things theperson wants to achieve in life rvhereas instrumental values indicate the ntethods an individualwould like to adopt to obtain l-ris life's aim. Since not many studies focus on instrumental andterminal values of entrepreneurs, this research rvill give contribution in identiflring those valttes,especially in Indonesian context. From a practical point of vierv, the understanding oflndonesian entrepreneurs' personal values rviil contribute social science researchers andpractitiorrers to understand Indonesian entreprenurs beiie[s that guide them to desired end statesof and their beliefs as modes of behavior that consist of moral values and conlpetence values.T1-ris understanding will suppot-t Indonesian government in encouraging and developingentreprenettrs.

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