Sample 1 Research Report

FIELD RESEARCH REPORT

ENTREPRENEURIAL COMPETENCIES AND THEIR IMPACT ON THE PERFORMANCE OF SMALL AND MEDIUM –SIZED

ENTERPRESES IN VIETNAM TECHNICAL SERVICES

(2/2008-6/2008)

Student: Nguyen Thi Huong

Class: SEPT II - Hanoi

Supervisors: Asst. Prof. Dr. Utz Dornberger & Dr. Tran Van Binh

Hanoi, June 2008

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TABLE OF CONTENTS

LIST OF TABLES ............................................................................................................... 4 LIST OF FIGURES ............................................................................................................. 5 ABBREVIATIONS .............................................................................................................. 5 PREFACE ............................................................................................................................ 6 1. RESEARCH CONTEXT ................................................................................................ 7

1.1 Overview of SMEs in Vietnam technical services ...................................................... 7 1.2. Entrepreneurship in Vietnam ....................................................................................... 8

2. RESEARCH OBJECTIVES ........................................................................................... 9 3. THEORETICAL BACKGROUND ............................................................................. 10

3.1. Literature review ....................................................................................................... 10 3.1.1. Entrepreneurship and Entrepreneur ................................................................. 10 3.1.2. Entrepreneurial competencies and firm performance ....................................... 11

3.2. Theoretical model used in the research ..................................................................... 12 3.2.1. Theoretical model .............................................................................................. 12 3.2.2. Constructs of the model modified ...................................................................... 13 3.2.2.1. Entrepreneurial competencies ........................................................................ 13 3.2.2.2. SME performance ........................................................................................... 14

4. SHORT DESCRIPTION OF FIELD RESEARCH ................................................... 15 4.1. Place and time of research ........................................................................................ 15 4.2. Data collection method ............................................................................................. 16 4.3. Methods of data analysis ........................................................................................... 17 4.4. Partner institutions .................................................................................................... 17 4.5. Encountered problems .............................................................................................. 18 4.6. Changes made in research design ............................................................................. 18

5. RESULT ......................................................................................................................... 20 5.1. Sample profile ........................................................................................................... 20

5.1.1. Position of the respondents ............................................................................... 20 5.1.2. Age ..................................................................................................................... 21 5.1.3. Gender ............................................................................................................... 21 5.1.4. Education level .................................................................................................. 22 5.1.5. Training ............................................................................................................. 22 5.1.6. Experiences ........................................................................................................ 23 5.1.7. Age of enterprise ................................................................................................ 24 5.1.8. Number of employees ........................................................................................ 24 5.1.9. Type of ownership .............................................................................................. 25

5.2. Examination of the characteristics of dependent and independent variables ............ 25 5.2.1. Scale reliability .................................................................................................. 26 5.2.2. Competencies analysis ....................................................................................... 26

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5.2.3. Competencies and relevant work experience .................................................... 32 5.2.4. Competencies and entrepreneur’s age .............................................................. 33 5.2.5. Firm performance in term of investment efficiency ........................................... 35 5.2.6. Firm relative performance ................................................................................ 36 5.2.7. Comparison of firm performance by age of firm ............................................... 37

5.3. Hypothesis testing ..................................................................................................... 38 5.3.2. Kolmogorov-Smirnov Test ................................................................................. 38 5.3.2. Correlations among variables ........................................................................... 39 5.3.3. Relationships between entrepreneurial competencies and firm performance .. 40 5.3.4. Multiple regression ............................................................................................ 48 5.3.5. Summary of hypothesis testing .......................................................................... 50

6. CONCLUSION AND RECOMMENDATION ........................................................... 51 APPENDIX: QUESTIONNAIRE .................................................................................... 55 REFERENCES .................................................................................................................. 58

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LIST OF TABLES

Table 1: Entrepreneurial competencies .............................................................................................................. 13 Table 2: Firm performance measures ................................................................................................................. 14 Table 3: Time table ............................................................................................................................................. 16 Table 4: Respondent rate .................................................................................................................................... 16 Table 5: Summary of the statistical analyses ..................................................................................................... 17 Table 6: Hypotheses............................................................................................................................................ 19 Table 7: Scale reliability of variables ................................................................................................................. 26 Table 8: Opportunity competencies ................................................................................................................... 27 Table 9: Organizing competencies ..................................................................................................................... 27 Table 10: Mean of organizing competencies and groups of entrepreneurs receiving training prior to the

business start-up .................................................................................................................................................. 28 Table 11: Mean of organizing competencies and groups of entrepreneurs receiving training after the business

start-up................................................................................................................................................................. 28 Table 12: Relationship competencies ................................................................................................................. 29 Table 13: Strategic competencies ....................................................................................................................... 30 Table 14: Commitment competencies ................................................................................................................ 30 Table 15: Conceptual competencies ................................................................................................................... 31 Table 16: Competencies and relevant work experience .................................................................................... 32 Table 17: Competencies and entrepreneur’s age ............................................................................................... 33 Table 18: Self perceiving of entrepreneurs on firm performance ...................................................................... 35 Table 19: Degree of importance ......................................................................................................................... 36 Table 20: Relative performance to major competitors ...................................................................................... 36 Table 21: Investment efficiency and age of firm ............................................................................................... 37 Table 22: Firm relative performance and age of firm ........................................................................................ 37 Table 23: One-Sample Kolmogorov-Smirnov Test ........................................................................................... 38 Table 24: Pearson correlation coefficient ........................................................................................................... 39 Table 25: Regression for H1a ............................................................................................................................. 40 Table 26: Regression for H1b ............................................................................................................................. 41 Table 27: Regression for H2a ............................................................................................................................. 42 Table 28: Regression for H2b ............................................................................................................................. 42 Table 29: Regression for H3a ............................................................................................................................. 43 Table 30: Regression for H3b ............................................................................................................................. 43 Table 31: Regression for H4a ............................................................................................................................. 44 Table 32: Regression for H4b ............................................................................................................................. 45 Table 33: Regression for H5a ............................................................................................................................. 46 Table 34: Regression for H5b ............................................................................................................................. 46 Table 35: Regression for H6a ............................................................................................................................. 47 Table 36: Regression for H6b ............................................................................................................................. 48

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Table 37: Multiple regression with investment efficiency ................................................................................ 49 Table 38: Multiple regression with relative performance .................................................................................. 50 Table 39: Summary of hypothesis testing .......................................................................................................... 50

LIST OF FIGURES

Figure 1: The model of SME competitiveness (Source: Thomas Wing Yan MAN, 2001) .............................. 12 Figure 2: The model of relationship between entrepreneurial competencies and firm performance ............... 13 Figure 3: Position of the respondents ................................................................................................................. 20 Figure 4: Current age .......................................................................................................................................... 21 Figure 5: Starting business age ........................................................................................................................... 21 Figure 6: Gender ................................................................................................................................................. 22 Figure 7: Education level .................................................................................................................................... 22 Figure 8: Training before business start-up ....................................................................................................... 23 Figure 9: Training after business start-up .......................................................................................................... 23 Figure 10: Relevant work experience ................................................................................................................. 24 Figure 11: Business start-up experience ............................................................................................................. 24 Figure 12: Age of firm ........................................................................................................................................ 24 Figure 13: Number of Employees ...................................................................................................................... 25 Figure 14: Type of Ownership ........................................................................................................................... 25

ABBREVIATIONS

OECD: Organization for Economic Cooperation and Development

UNIDO: United Nations Industrial Development Organization

VCCI: Vietnam Chamber of Commerce and Industry

GSO: Vietnam General Statistics Office

SME: Small and Medium-sized Enterprises

S&T: Science and technology

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PREFACE

This research was implemented within the framework of a two-year Master program of Small and Medium Enterprise Promotion Training course (SEPT) of Leipzig University (2007-2008).

Since “Doi moi” (Renovation) policy (1986), Vietnam has exemplified a successful transitional economy, experiencing the productive capacities release of all kinds of firms. Private entrepreneurial activities have increasingly played an important role in investment, export and import, domestic trading and services, job creation and contribution to the state budget. The private sector has been formally recognized as a crucial component of the multi-sector market economy oriented to socialism in Vietnam. However, entrepreneurship in Vietnam is situated at the starting point of the race.

The technical services sector is very young and difficult to access for information in comparison with other sectors because of low level of development and the very young generation of entrepreneurs who have certain knowledge in science and technology, and dare to do business in this sector.

In Vietnam, with the short history of doing business and the spontaneous emergence of young entrepreneurs, the growth and survival of SMEs is not sustainable. Entrepreneurship has not existed much in the mind of owners or managers. The lack of SME and entrepreneurship research focusing on the technical services in Vietnam is also a reason of this unawareness.

Hence, the aim of the research is to determine the competencies that the entrepreneurs possesses and to investigate the relationship between the entrepreneurial characteristics and the performance of Small and Medium-sized Enterprises (SMEs) under the context of the technical services in Vietnam. Then, the overview on the SME entrepreneurship in this sector is dressed. I hope that the findings will serve their development and survival and contribute to the S&T management of Vietnam government. The results gained are going to be used for my Master thesis.

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1. RESEARCH CONTEXT

1.1 Overview of SMEs in Vietnam technical services

The development of small and medium-sized enterprises (SMEs) has been a means of promoting private sector growth. Experience in the early years of Vietnam’s transition has shown that private enterprises are more efficient in the allocation of scarce resources and are more effective in creating employment opportunities.

Decree No. 90/2001 ND-CP laying down regulations on development support for SMEs, defines SMEs as independent businesses and production establishments that have registered their business under the current legislation, with registered capital of less than 10 billion VND (equivalent to approximately US$ 0.7 million) or an average of fewer than 300 employees. According to the statistics of the Vietnam General Statistics Office (GSO) in 2006, 96% of enterprises are SMEs that operate almost as private enterprises and focus on services sectors because of rapid capital turn-round, easy operating procedure that doesn’t require much capital, high professional level, much land or real estate. SMEs aren’t allocated steadily and concentrated almost in the Red river delta, the Mekong Delta and the South-east of Vietnam. They contribute to about 26% of GDP, 31% of total industry capacity, 78% of total retail sell, 64% of total carry. Besides, they create 49% of non-agricultural jobs at country-sides, about 25-26% of total labor power in Vietnam. The expenditure for a job at SMEs is low, counting for 3-10% of this type of cost in a big firm.

The majority of technical service SMEs that signifies SMEs operating in the field of science and technology services (electricity, electronics and information technology) has been recently founded for less than 10 years except some state-owned manufacturing enterprises that haven’t attached importance to innovation and customization. They do mainly business in services sectors by importing machinery, equipments from the countries of OECD, then doing installation and coordinating the maintenance undertaken by foreign experts. Several SMEs can produce high technological products based on specifications ordered by customer but their products are not produced on large scale and they don’t own the brand name. The business activities include essentially providing technical services. The entrepreneurs of the SMEs in technical services that are mainly young and used to be staff of another firm find the opportunities in their working field in order to start up their own business. They usually haven’t officially trained in term of managerial skills and have not much experience in doing business. They have neither long-term development strategy for the firm or the policy to attract the attachment of staffs. The entrepreneurial competencies are in general at low level and need to be improved.

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1.2. Entrepreneurship in Vietnam

Vietnam’s history of central planning has created a very young entrepreneur class with inexperience in doing business in domestic as well as international markets. As a country transitioning from a controlled economy to a market-oriented economy, evidence suggests that many managers in Vietnam do not adequately possess the necessary skills and support to compete in the increasing competitive global market (Neupert et al., 2005; Steer, 2001).

Today, the business environment has seen great improvement and authorities at all levels have recognized the important role of entrepreneurs in national economic development. The government and related central and local authorities play more supportive role in the training and development of Vietnamese entrepreneurs. The Vietnam government supports investment in sectors where there is high growth potential and encourages joint ventures, business cooperation and enterprises with 100% foreign ownership. However, the entrepreneurship in Vietnam has to face many challenges, such as the lack of knowledge about market economics and western management came from their lack of experience with and need to trade with the west (Kozlova and Puffer, 1994) and their Marxist-Leninist education, focusing on production (versus demand) economics. Thus, vocabulary for concepts like business, customer service, or entrepreneurship is still poor.

Secondly, the business in Vietnam are limited in the networks emerged from a closed circle – people from their family, home villages, university classes, or work settings. Trusting those outside the network was dangerous and avoided. But in the 1990s, Vietnamese began to recognize traditional net working’s limitations. For example, to increase contact with international colleagues, they had to accept and use e-mail (about 1998), although at first they balked, preferring face-to-face relationships.

Before, Vietnamese managed through collectivism, rather than believing personal effort or initiative would matter. Transition demanded that Vietnamese take initiative, which was counter to their sense of learned helplessness, or belief that individuals lack control over their rewards and punishments.

Fourthly, knowledge-sharing atmosphere is a challenge for Vietnamese entrepreneurs because some managers have insisted they owned information; withholding it gave them power. This attitude will hinder the entrepreneurship.

Risk taking is not preferred by Vietnamese managers, especially in the state-owned enterprises. If they did and failed, they faced punishment, like loss of promotion or

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transfer to an outlying location for education or work. So, risk avoidance was common.

Now, the barriers for entrepreneurial activities have been removed gradually thanks to implementation of the New Enterprise Law adopted in 2005 in terms of abolishing unnecessary license restrictions to boost entrepreneurial activities in the coming years. Some others measures have been also applied such as further reform of the banking system in coordination with state-owned enterprises reform to ease access to capital for private enterprises; further tax reform to make the tax system more transparent and less complex; speeding up administrative reform that improves relations between governmental agencies and businesses; and finally, social recognition and moral encouragement to successful entrepreneurs to motivate the entrepreneurial spirit in the country.

2. RESEARCH OBJECTIVES

The focus of the study was on the various competencies of these entrepreneurs. Competency in this context was defined as the underlying character of an individual that is related to a person’s performance in a job or in a situation. It was assumed that an entrepreneur’s competencies have a major role in determining the success or failure of his/her enterprise.

In view of these theoretical and contextual research needs, the purpose of this study is to investigate the relationship between entrepreneurial characteristics and firm performance through the competency approach and a model of relationship between entrepreneurial competencies and firm performance, in the context of the Vietnam technical services.

The research answered two research questions given as follows:

RQ1: What are the competencies required by the SME entrepreneurs in Vietnam technical services?

RQ2: How do these entrepreneurial competencies impact on the performance of SMEs?

A number of research objectives have also been set with respect to these two research questions:

- To adapt the model which links entrepreneurial competencies with firm performance into Vietnam context of technical services sector;

- To identify the competencies for the Vietnam SMEs’s entrepreneurs in the technical services sector;

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- To develop an instrument for measuring entrepreneurial competencies and validate it statistically; and

- To investigate the relationship between different groups of entrepreneurial competencies and firm performance.

3. THEORETICAL BACKGROUND

3.1. Literature review

3.1.1. Entrepreneurship and Entrepreneur

This is the entrepreneurial age. Entrepreneurship will emerge as the defining trend of the business world in the next century. Entrepreneurs are viewed as the leading economic driver, and will be important to the domestic and global economies in the coming century.

The understanding of entrepreneurship owes much to the work of economist Joseph Schumpeter and the Austrian economists such as Ludwig von Mises and von Hayek. In Schumpeter (1934), an entrepreneur is a person who destroys the existing economic order by introducing new products and services, by creating new forms of organization, or by exploiting new raw materials. According to Schumpeter, that person is most likely to accomplish this destruction by founding a new business but may also do it with an existing one. For Frank H. Knight (1967) and Peter Drucker (1970) entrepreneurship is about taking risk. The behavior of the entrepreneur reflects a kind of person willing to put his or her career and financial security on the line and take risks in the name of an idea, spending much time as well as capital on an uncertain venture. Knight classified three types of uncertainty, including risk, which is measurable statistically; ambiguity, which is hard to measure statistically and true uncertainty or Knightian uncertainty, which is impossible to estimate or predict statistically.

In general, entrepreneurs are most commonly associated with the founders of business ventures. They have been regarded as bearers for the costs of uncertainty in business decisions (Knight, 1921), and innovators for new goods, new methods of production, new markets, and new types of industrial organization (Schumpter, 1934). They are also distinguished by their alertness of opportunities arouse form market disequilibrium (Kirzner, 1979). Nevertheless, in this study, an entrepreneur is defined as the owner/manager of an SME, in which he or she may or may not be the founder. This operational definition was used because the main focus of this study is on the competencies required for managing and developing a successful SME. The owner/manager can effectively play the entrepreneur’s role of bearing the uncertainty, innovating and capturing market opportunities when managing and developing the business but it is not necessary for him or her to be the founder of the business.

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3.1.2. Entrepreneurial competencies and firm performance

As entrepreneurship is considered to be central to determinants of SME performance, researchers have attempted to investigate which entrepreneurial characteristics and how they affect the SME performance. In prior studies, three types of entrepreneurial characteristics have been suggested and examined for their relationships with SME performance. They include the entrepreneur’s demographic characteristics like gender (Changanti and Parasuraman, 1996), age (Brockhaus, 1980), ethnic (Cooper, Dunkelberg and Woo, 1988) and parental background (Cooper and Dunkelberg, 1987).

The other categories are psychological and behavioral characteristics by making use of different approaches like motivation, personality attributes, values, goals and attitudes (Barkham, 1994; Begley and Boyd, 1987). These studies have highlighted the importance of individual characteristics like need for achievement motivation, internal locus of control, risk-taking propensity, and tolerance of ambiguity, creativity and innovativeness. These characteristics are found to have effects both on the decision to start up and on the successful performance of firm.

Human capital factors such as education level, work experience, start-up experience, start-up experience, training and skills (Barkham, 1994; Tan and Tay, 1995) are the third category. These characteristics determine whether an entrepreneur possesses the appropriate abilities, the possession of which in turn impacts on the decision to start up or to do business successfully.

The Ernst & Young Entrepreneurship Survey in 1998 summed up the necessary characteristics of an entrepreneur. These include ability to recognize and take advantages of opportunities, resourcefulness, creativity, independent thinking, risk-taking and hard working abilities, optimistic nature, innovativeness, visionary capabilities, and leadership qualities.

The studies of Lumpkin and Dess, 1996; Chandler and Hanks, 1994; Chaston, 1997 have suggested that firm performance is influenced not only by the entrepreneurial characteristics, but also by a number of firm characteristics, strategies and the external environment.

In general, there are too many factors outside the direct control of entrepreneur which impact on the SME performance. Roper (1998); Alan and Davies (1991) argued that the lack of formal structural frameworks has led to uncertainty in the mechanism by which different entrepreneurial characteristics affect SME performance. Hence, it is necessary to make use of a sound theoretical model for examining the relationship between entrepreneurial competencies and firm performance.

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3.2. Theoretical model used in the research

3.2.1. Theoretical model

This research used the study of Thomas Wing Yan MAN at the Hong Kong Polytechnic University, 2001 (Entrepreneurial competencies and the performance of small and medium enterprises in the Hong Kong services) as the theoretical framework to investigate the Entrepreneurial competencies and their impacts on SME performance in Vietnam Technical services.

Figure 1: The model of SME competitiveness (Source: Thomas Wing Yan MAN, 2001)

However, in the framework of the research of master course, this model was simplified within only the relationships between entrepreneurial competencies and firm performance. In order to ensure this long-term performance, the entrepreneur must perceive the business opportunities, organize different resources, build and maintain relationship networks. The entrepreneur must also set the direction of the whole company, to be visionary, strategic and goal focused. The entrepreneur needs to possess strong commitment competencies, which equip the entrepreneur with necessary drive and initiative towards the goal and to sustain his or her efforts. And at last but not at least, the entrepreneur should have conceptual competencies.

Competitive Scope

Entrepreneurial competencies

Opportunity competencies

Organising competencies

Relationship competencies

Strategic competencies

Commitment competencies

Conceptual competencies

Organisational capabilities

Firm

performance Supporting Cometencies

Learning

Adapting

Managing time

Evaluating oneself

Balancing life

Managing worries and

stress

Holding on to integrity

(Potential dimension – external)

(Potential dimension – internal)

(Performance dimension)

(Process dimension)

Task 1: Forming competitive scope

Task 2: Creating organisational

capabilities

Task 3: Setting a goal & taking

action

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Figure 2: The model of relationship between entrepreneurial competencies and firm performance

3.2.2. Constructs of the model modified

3.2.2.1. Entrepreneurial competencies

There are many definitions of competencies but in all cases, competencies are defined as characteristics of individuals, including one’s motives, traits, aspects of the person’s self-image or social roles, skills, or a body of knowledge, which lead to effective and/or superior job performance. In context of entrepreneurship and SMEs, competencies are particularly related to venture birth, survival and/or growth (Birth, 1995).

An entrepreneur who plays multiple roles of being manager, owner, and in some cases, professional within a firm should show high level of competencies in formulating strategies, leading and motivating others, as well as in grasping opportunities and changes, and in bearing risks. An entrepreneur should also possess managerial competencies as well as entrepreneurial competencies. In summarizing the prior studies, I found 6 competency areas grouped together in the following table:

Table 1: Entrepreneurial competencies


Behavioral focus Preliminary Elements

Opportunity competencies

Competencies related to recognizing market opportunities through various means

Opportunity recognition Opportunity development Opportunity seeking

Organizing competencies

Competencies related to the organization of different internal and external human, physical, financial and technological resources

Organizing Planning Controlling Leading and delegation

Relationship competencies

Competencies related to person-to person or individual–to-group-based interactions

Communication Relationship building


1. Opportunity competencies 2. Organising competencies 3. Relationship competencies 4. Strategic competencies 5. Commitment competencies 6. Conceptual competencies

Firm performance

1. Investment efficiency 2. Relative performance

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Networking Strategic competencies

Competencies related to setting, evaluating and implementing the strategies of the firm

Visioning Strategic thinking Goal setting

Commitment competencies

Competencies that drive the entrepreneur to move ahead with the business

Committing Having drive and taking initiative

Conceptual competencies

Competencies related to different conceptual abilities which are reflected in the behaviors of the entrepreneur

Analyzing Learning Problem solving and decision making Innovating Risk taking Managing time

3.2.2.2. SME performance

Firm performance is one of the dimensions of competitiveness. The firm performance measures in works by different authors were summarized in the following table:

Table 2: Firm performance measures

Measurement Target Author Market share Profit Growth Duration

Countries and entreprises World Competitiveness (1993)

Market share Dependency Growth Profitability

Export firms Buckley et al. (1988)

Market share Multinational enterprises Kravis & Lipsey (1992)

Sales per person Net outputs per persons Net profit on turnover (%)

Small manufacturing firms O’Farrell & Hitchens (1993)

Return on equity Earnings per share Payout ratio Dividend yield

Financial performance of firm Feurer & Chaharbaghi (1984)

Sales level Sales growth rate Cash flow

Competitiveness performance for SMEs

Covin and Slevin (1989)

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Return on shareholder equity Gross profit margin Net profit from operations Profit to sales ratio Return on investment (ROI) Ability to fund business growth from profits

Sales growth Return on sales Cash flow Return on investment Net profit Growth in market share

Relative performance for SMEs Chandler and Hanks (1993)

Return on shareholder equity Gross profit margin Net profit from operations Profit to sales ratio Return on investment (ROI)

Competitiveness performance for SMEs

Man (2001)

In general, the three following main variables reflect the concepts of firm performance:

− Investment efficiency: It is to measure a firm’s capabilities in maximizing resources allocation and profitability. It can be considered as an indicator of the controllability aspect of competitiveness

− Growth: It is to measure the present growth rate and the potential to growth. It can be considered as an indicator of the potential and dynamic aspect of competitiveness

− Relative performance: It is to measure the relativity aspect of competitiveness in comparison with the firm’s competitors.

Taking all the above considerations into account and with reference to the ideas of some entrepreneurs in the pilot-test, I chose the twoo variables including Investment growth and relative growth for firm performance measurement.

4. SHORT DESCRIPTION OF FIELD RESEARCH

4.1. Place and time of research

The research was conducted in Hanoi, the capital of Vietnam where business activities have been recently developing very fast. As for the milestones previewed, the field research was undertaken from the middle of January to the first week of June. The steps of field works were done as the following table:

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Table 3: Time table

Jan Feb Mar Apr May Jun

Consultancy for advices of professors and

economics experts

15-26

Questionnaire revision for the first time 20-24

Meeting the partners 25-28

Pilot survey and reliability 1-10

Questionnaire revision for the second time 11-12

Conducting survey (send email, telephone and

interview)

13-31

Data analysis 2-25

Writing research report 10 8

4.2. Data collection method

With the model of relationship between entrepreneurial competencies and firm performance, a questionnaire was designed based on the variables given. The questions was measured by a five-point Likert’s scale ranging from 1 to 5. The data collection was carried out in Vietnamese. The questionnaire is written in Vietnamese and in English.

In this study, a large sample e-mail and face to face survey was conducted on 156 enterprises randomly chosen from the list of more than 300 electric and electronic enterprises in the field of service for collecting data for statistical analysis. The questionnaires were sent to them by filling invitation email and follow-up email. As for the owners/managers that hadn’t had feedback, telephone call was used for having face to face appointment. A total of 60 properly filled questionnaires were received by email, fax and by telephone, face to face interview, reaching respondent rate of 38,46%.

Table 4: Respondent rate

Type of having back questionnaire Respondent amount Respondent rate

Email 35 22,44%

Fax 4 2,56%

Telephone 6 3,85%

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Face to face interview 15 9,62%

Total 60 38,46%

4.3. Methods of data analysis

SPSS for Windows version 13.0 was used as the main tool of data analysis. The excel software was applied in order to regroup items in one dimension and to get more beautiful chart. The following diagram illustrated the process of data analyzing:

1. Check questionnaire for completeness and interviewing quality 2. Edit questionnaire (screening questionnaires to identifying illegible,

incomplete, inconsistent, or ambiguous responses, then treating unsatisfactory responses)

3. Code the responses 4. Transcribe 5. Clean data 6. Statistically adjust the data 7. Select data analysis strategy

This following table described a summary of the statistical analyses made:

Table 5: Summary of the statistical analyses

Purpose Techniques of analysis

Examination of the sample characteristics - Frequency analysis - Descriptive analysis

Examination of the characteristics of dependent and independent variables → Overall picture of each tested variable

- Reliability analysis - Kolmogorov Smirov test - Correlation analysis - ANOVA

Hypothesis testing - Regression analysis

4.4. Partner institutions

The research was undertaken in cooperation with the following partners :

1. Owners/managers of small and medium sized enterprises in technical services sectors for interview;

2. Vietnam Chamber of commerce and industry (VCCI) for information on Vietnam SMEs;

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3. Vietnam General Statistics Office (GSO) for secondary data of Vietnam SMEs;

4. The Automation Association of Vietnam for the list of SMEs in technical services in Hanoi.

4.5. Encountered problems

Some difficulties were found in period of research, which could be precious experiences for other or further studies:

1. E-mail questionnaire survey has an advantage of being able to reach a large number of sample and the respondents can fill the questionnaire at their own convenience. However except the ones who were interviewed face to face by me, I am not sure whether they or their secretaries filled out the questionnaire.

2. The interviewees are the owners/managers, so I had difficulties in getting approach to them. After choosing the list of firms randomly, I had to ask my friend in the field of Electronics and Electricity if they know the owners/managers of these SMEs for introducing me to them. Fortunately, thank to the relationship, I could get close to them for survey. But when approaching them, it was still difficult to interview them because they were afraid of reveal the real business situation to others.

3. I had to encounter the fact that some owners/managers hadn’t much knowledge on economics terms such as gross profit margin, net profit from operations, … I had to explained to them. Even several entrepreneurs didn’t answer on the part of firm performance. So I had to contact them back for filling out the questionnaire.

4. The majority of SMEs in the list supplied by the Automation Association of Vietnam were lack of e-mail address but website address. So I had to collect email by entering the websites or calling their offices, which took me much time.

4.6. Changes made in research design

On searching for list of SMEs in the field of Technical services that had been initially aimed at Information technology, Electronics and Electricity, I found that population of IT was very broad in Hanoi and that the large survey could generate some difficulties in collecting data. So I narrowed the sample into only the field of Electronics and Electricity.

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During the pilot survey, I changed a little in the part of the questionnaire on conceptual competencies.

On encoding data and conducting data analysis, I found the necessary to distinguish the firm performance into the investment efficiency and the relative performance. So, 12 single hypotheses were proposed instead of 6 single hypotheses in the research design. The 2 multiple hypotheses (HA and HB) were also added for investigating the relationship between the 6 groups of competencies combined with the firm performance.

Table 6: Hypotheses

Hypothesis Description

H1a The opportunity competencies of the entrepreneur are positively related to the investment

efficiency in context of technical services sector in Vietnam.

H1b The opportunity competencies of the entrepreneur are positively related to the relative

performance in context of technical services sector in Vietnam.

H2a The organizing competencies of the entrepreneur are positively related to the investment


H2b The organizing competencies of the entrepreneur are positively related to the relative


H3a The relationship competencies of the entrepreneurs are positively related to the investment

efficiency in context of technical service sectors in Vietnam.

H3b The relationship competencies of the entrepreneurs are positively related to the relative

performance in context of technical service sectors in Vietnam.

H4a The strategic competencies of the entrepreneurs are positively related to the investment


H4b The strategic competencies of the entrepreneurs are positively related to the relative


H5a The commitment competencies of the entrepreneurs are positively related to the investment


H5b The commitment competencies of the entrepreneurs are positively related to the relative


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H6a The conceptual competencies of the entrepreneurs are positively related to the investment


H6b The conceptual competencies of the entrepreneurs are positively related to the relative


HA The 6 groups of competencies combined (opportunity, organizing, relationship, strategic,

commitment and conceptual competencies) of the entrepreneurs are positively related to the

investment efficiency in context of technical services sector in Vietnam.

HB The 6 groups of competencies combined (opportunity, organizing, relationship, strategic,

commitment and conceptual competencies) of the entrepreneurs are positively related to the

relative performance in context of technical services sector in Vietnam.

5. RESULT

5.1. Sample profile

This part gives an overview on the descriptive characteristics of the sample, so as to present understanding on the entrepreneurs and enterprises such as position, age, gender, level of education, experiences, training of people filled in questionnaire, number of employees, age of enterprises. The information comes from the questions in the part 1 of personal background information and part 2 of company information (Appendix 1).

5.1.1. Position of the respondents

Figure 3: Position of the respondents

The Figure Position presents the positions of the respondents in the surveyed organizations. Before the survey, the interviewees were defined as the owners or managers of SMEs. So the majority of questionnaires were sent to exact name of

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respondents. The majority of respondents (63,3%) were directors or chief executive officers (CEO) in the enterprises. 20,0% of them were vice-directors. Managers (heads of sales, marketing, technical or business department) counted for 15,0%. The rest (1,7%) held the position of representative in the joint-venture company.

5.1.2. Age

As shown in the Table, the current age of the majority (63,3%) of the respondents fell within the range from 31 to 40 years old and 18,3% of them were younger than 31 years old. There were 15% of respondents within the range from 41 to 50 years old. Only 3,3% of them were above 50 years old. This reflects the fact that in comparison with other ones in the Vietnam economy, the technical services are relatively new industry which might attract more young people to start their businesses in this industry.

According to the Figure 5: Starting business age, by chance the majority (63,3%) of the owner/managers went also into their business venturing in the most important stage of their careers (between 31 to 40 years old). Another big amount (30,0%) of them dared begin their entrepreneurial careers in the earlier stage of their careers (under 31 years old). Only 6,7% of them started business later in the age from 41 to 50 years old. In general, the owner/managers in the sample started their entrepreneurial careers in the very young age. This reflects that entrepreneurship is considered as a viable career choice among the young people in Vietnam and that young people may prefer venturing technical services than older ones.

Figure 4: Current age Figure 5: Starting business age

5.1.3. Gender

The Table has shown that the ratio of male to female among these owner/managers is 90% to 10% which reflected the big deviation among the two genders in engaging in entrepreneurial activities, especially in the field of technical services. In Vietnam,

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the ratio of male and female in the working population is similar. So this deviation in the results of survey reflected the different perceptions on career orientation on entrepreneurship between male and female.

Figure 6: Gender

5.1.4. Education level

The Table shows the education levels attained by the owner/managers in the survey. The majority of respondents attained higher level education: 68,3% hold Bachelor’s Degree, 21,7% Master’s Degree and 6,7% Doctor’s Degree. Only 3,3% of respondents hold Secondary Degree. The results have shown a higher level of education attainment than the general population in Vietnam. However, this study reveals that the owner/managers in the technical services are among the better educated group of the population.

Figure 7: Education level

5.1.5. Training

Entrepreneurial success is often considered to be related to training and experience

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apart from education (Cooper and Gascon, 1992). This survey investigated the managerial and professional training before and after business start-up.

The results gained in the survey reveal that the majority (51,7%) of the respondents have received the professional training prior to business start-up, 6,7% have received only managerial training and 28,3% have received both, while 13,3% have received neither of these training. This propensity may be explained by the difficulties of the technical services. Most of the entrepreneurs that had owned expertise in the electronics or electricity majors dared to start the career in the field of technical services.

After running the business, the owner/managers have different need in training. 36,7% of the sample have taken part in the managerial training, but only 20% have received professional training while 18,3% have received both. Such a pattern suggests that formal managerial training is necessary for carrying out the entrepreneurship. But the ratio of 25% receiving neither of these training may support that formal training may not the most adapted ways for some owner/managers to familiarize themselves with the business.

Figure 8: Training before business start-up Figure 9: Training after business start-up

5.1.6. Experiences

The results shown in the two above Figure reveal the experiences get by the owner/managers before business start-up. The majority (75%) of respondents had relevant work in one or more companies. While the working experience gained during several years was their base for them to start their owned career, approximately a half (43,3%) of them haven’t started up the company for the first time. This may be explained by the young age of the entrepreneurs. They keep on dedicating to make the venture work after the failure.

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Figure 10: Relevant work experience

Figure 11: Business start-up experience

5.1.7. Age of enterprise

On average, the enterprises in the sample has the age of 4,5 years old. 78% of them have history below 7 years. Their young age reflects the fact that the technical services are the new industry in Vietnam.

Figure 12: Age of firm

5.1.8. Number of employees

Figure shows that 100% of the enterprises were categorized as small and medium-sized companies with 300 employees or less than this amount. The average number of employees in a technical services enterprise is 55 with the smallest one having 4 employees and the largest one having 300 employees. But after recoding data, the results reveals that the majority (71,1%) of firms have less than 50 employees, which is related to the young age of these small firms. 15,3% of enterprises have 51-100 employees and only 13,6% have 101-300 employees.

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Figure 13: Number of Employees

5.1.9. Type of ownership

In terms of ownership, the majority of the sampled firms are organized in form of limited companies (40%) and joint-stock companies (41,67%), followed by private ones (6,67%). The state-owned firms are accounted for only 3,33% because most of state-owned firm in the field of electricity and electronics are manufacturing ones and they are on the process of equitization pursuant the Decree no. 64/2002/ND-CP dated on 19th June 2002 by the Government on SOE equitization. Joint venture and foreign –owned enterprises represented only 8,33% of the sample.

Figure 14: Type of Ownership

5.2. Examination of the characteristics of dependent and independent variables

The analyses on the characteristics of independent and dependent variables were done for purposes:

- To give an overview on the entrepreneurial competencies, firm performance;

- To prepare for further analysis in hypothesis testing;

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- To provide further evidence of reliability and validity on the competency instrument used in this study;

5.2.1. Scale reliability

Table 7: Scale reliability of variables

No. Variables Items Cronbach’s Alpha

1 Opportunity competencies q3.1-q3.4 0,798

2 Organizing competencies q3.5-q3.9 0,807

3 Relationship competencies q3.10-q3.14 0,836

4 Strategic competencies q3.15-q3.18 0,870

5 Commitment competencies q3.19-q3.21 0,716

6 Conceptual competencies q3.22-q3.30 0,859

7 Importance of Investment efficiency q4.1a-q4.1d 0,666

8 Performance of Investment efficiency q4.2a-q4.2d 0,893

9 Relative firm performance q4.3a-q4.3c 0,850

The results of reliability analysis in the Table shows the reported Cronbach’s Alpha ranged from 0.666 to 0,893 (only variable “Importance of Investment efficiency” was under 0,7) which coincided with the acceptable value of 0,7 suggested by Nunnally (1978). This result indicated a high level of reliability for the variables used.

5.2.2. Competencies analysis

This study used a five-point Likert scale to measure the entrepreneurial competencies. “Strongly disagree” was assigned to 1 point, which meant the very weak performance of competencies. 5 point was the highest score in measuring entrepreneurial competencies, meaning the very good performance of competencies. For each of items in 6 competencies, mean, standard deviation, frequencies were calculated to show the perceived performance of these activities. This study applied ranking to show how relatively well each group of competencies performed in technical service firms. The scores of 4 and 5 were corresponding respectively to good and very good performance.

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5.2.2.1. Opportunity competencies

Table 8: Opportunity competencies

Items N Mean (*) Std.

deviation

Good & very good

performance

Identifying goods or services people want 60 4,20 0,86 80%

Perceiving unmet consumer needs 60 4,17 0,83 81,7%

Actively looking for products that provide

real benefit to customers

60 4,05

1,00

75%

Seizing high-quality business opportunities 60 4,20 0,82 78,3%

(*) Highest score is 5

This group of competencies comprises of the entrepreneurial activities in spotting opportunities, actively seeking new opportunities, and developing the opportunities. They are one of the most distinguishing competencies for the entrepreneur. The overall means of all four items were ranked at high level, ranging from 4,05 to 4,20. This result indicates that owner/managers in the technical services pay much attention to these activities.

5.2.2.2. Organizing competencies

Table 9: Organizing competencies


deviation

Good & very good

performance

Organizing different resources 60 3,70 0,94 58,3%

Planning the operations of the business 60 3,98 0,97 71,7%

Keeping organization running smoothly 60 4,17 0,85 81,7%

Coordinating tasks 60 3,57 1,01 58,3%

Leading and delegating subordinates

effectively

60 4,10 0,95 78,3%


This second group of competencies is similar to the managerial competencies (Thomas Man, 2001). They call for the ability to lead, control, monitor, organize

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and develop the external and internal resources towards the firm’s capabilities through the entrepreneurial organizing competencies in different areas. The means of the items were not high, ranging from 3,57 to 4,17, which reveals that the entrepreneur in the sample don’t shows these competencies well, especially in organizing different resources and coordinating tasks (only 58,3% of respondents were good or very good). In the following part, the relations between this group of competencies and the training, experiences were investigated.

The ANOVA test was used to assess the statistical significance of the differences among 4 groups of entrepreneurs who received different types of training before and after business start-up in performing their organizing competencies. Hypothesis null (H0): Training before and after business start-up is not related to organizing competencies.

The result of differences is presented in the 2 below tables. But the entrepreneurs who had received the training in management haven’t been better in organizing competencies than other groups. The p value is much more than 0,05. So there is not significance level to deny H0.

Table 10: Mean of organizing competencies and groups of entrepreneurs receiving training prior to

the business start-up

Items* Management Professional Both None Sig.**

Organizing different resources 3,50 3,61 3,82 3,88 0,807

Planning the operations of the business 3,75 4,03 4,00 3,88 0,940

Keeping organization running smoothly 4,25 4,13 4,12 4,38 0,893

Coordinating tasks 3,25 3,35 3,82 4,00 0,234

Leading and delegating subordinates effectively 3,75 4,00 4,24 4,38 0,605

(*) Highest score is 5; (**) Significance at p<0.05

Table 11: Mean of organizing competencies and groups of entrepreneurs receiving training after the

business start-up

Items* Management Professional Both None Sig.**



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5.2.2.3. Relationship competencies

Table 12: Relationship competencies

Items N Mean

(*)

Std.

Deviation

Good & very good

performance

Developing long-term trusting

relationships with others

60 4,47 0,79 85%

Maintaining a personal network of work

contacts

60 3,93 0,86 73,3%

Communicating with others effectively 60 4,10 0,84 80%

Interacting with others (employees,

customers, suppliers, …)

60 4,03 0,82 83,3%

Negotiating with others (employees,

customers, suppliers, …)

60 3,87 1,00 70%


An entrepreneur is not working alone, nor does he/she only face employees. An entrepreneur must contact with suppliers and customers, especially in services firms. So he/she has to possess competencies in relationship building, communication, persuasive and interpersonal abilities (McClelland, 1987). In this study, this group of competencies were accounted for high score of means, ranging from 3,87 to 4,47 with high rate of good and very good performance (70% at least). This reveals that owners/managers pay much attention to these competencies but they are the ones of the most frequently occurred competencies among the entrepreneurs in technical services small firms in Vietnam. This result is consistent with similar findings of many authors, for example Thomas Man (2001).

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5.2.2.4. Strategic competencies

Table 13: Strategic competencies


Deviation

Good & very good

performance

Determining long-term issues, problems,

or opportunities

60 4,25 0,91 80%

Redesigning the organization to better

meet long-term objectives & changes

60 3,92 1,03 68,3%

Assessing & linking short-term tasks in

the context of long-term direction

60 4,02 0,98 73,3%

Determining strategic actions by

weighing cost and benefits

60 3,95 1,03 71,7%


The owners/managers need set the direction for the whole company. They have to possess abilities and skills from a broader and long-term perspective. The result indicated that the means of overall were ranked at a high level from 3,92 to 4,25. The majority (from 68,3% to 80%) of the owners/managers in the sample perceived themselves good in this group of strategic competencies.

5.2.2.5. Commitment competencies

Table 14: Commitment competencies


Deviation

Good & very good

performance

Dedicating to make the venture work whenever

possible

60 3,23 1,14 45%

Possessing an extremely strong internal drive 60 3,75 1,02 61,7%

Committing to long-term business goal 60 4,22 0,96 83,3%


Successful entrepreneurs are often characterized as diligent people who have a strong competency in totally commitment, determining and dedicating, as well as taking proactive actions towards their work. Only 45% of respondents said that they

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were good or very good in “dedicating to make the venture work whenever possible” (mean=3,23). It seems that Vietnamese entrepreneurs in technical services were not ready for venture work. The mean of competency “Possessing an extremely strong internal drive” was lower than the ones of the majority of other competencies. This result calls for the unimpressive performance of owners/managers in strategic competencies.

5.2.2.6. Conceptual competencies

Table 15: Conceptual competencies


Deviation

Good & very good

performance

Applying ideas, issues and observations to

alternative contexts

60 3,73 1,01 56,7%

Learning from a variety of means 60 4,27 0,86 81,7%

Keeping up to date in my field 60 4,28 0,92 78,3%

Applying learned skills and knowledge into

actual practices

60 4,10 0,93 80%

Taking reasonable job-related risks 60 3,18 1,11 45%

Looking at old problems in new ways 60 3,83 0,92 65%

Exploring new ideas 60 4,02 0,87 73,3%

Treating new problems as opportunities 60 3,97 0,90 71,7%

Managing time 60 4,05 0,87 75%


Among 9 items of conceptual competencies, it is easy to pick out the one having much lower score of mean which is “Taking reasonable job-related risks” (mean=3,18, rate of good and very good performance = 45%). This result is consistent with score of item “dedicating to make the venture work whenever possible” of Commitment competencies (mean =3,23) because they are related to readiness of entrepreneurs for venture work.

The means of other items are high, ranging from 3,73 to 4,28. The owners/managers perceived that they were good in these competencies, especially in “Learning from a

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variety of means” (mean=4,27, the rate of good and very good performance=81,7%), “Keeping up to date in their field” (mean=4,28, the rate of good and very good performance=78,3%) and “Applying learned skills and knowledge into actual practices” (mean=4,10, the rate of good and very good performance=80%). This study confirms that entrepreneurs in technical services in Vietnam are possessed of traditional fondness for learning.

5.2.3. Competencies and relevant work experience

Table 16: Competencies and relevant work experience

Items Yes No Sig.

Identifying goods or services people want 4,16 4,33 0,49

Perceiving unmet consumer needs 4,20 4,07 0,59

Actively looking for products that provide real benefit to

customers 4,00 4,20 0,51

Seizing high-quality business opportunities 4,22 4,13 0,72

Organizing different resources 3,73 3,60 0,64

Planning the operations of the business 4,04 3,80 0,40

Keeping organization running smoothly 4,18 4,13 0,86

Coordinating tasks 3,44 3,93 0,11

Leading and delegating subordinates effectively 4,13 4,00 0,64

Developing long-term trusting relationships with others 4,42 4,60 0,46

Maintaining a personal network of work contacts 3,93 3,93 1,00

Communicating with others effectively 4,16 3,93 0,38

Interacting with others (employees, customers, suppliers, …) 4,09 3,87 0,37

Negotiating with others (employees, customers, suppliers, …) 3,89 3,80 0,77

Determining long-term issues, problems, or opportunities 4,20 4,40 0,47

Redesigning the organization to better meet long-term objectives

& changes 3,89 4,00 0,72

Assessing & linking short-term tasks in the context of long-term

direction 4,02 4,00 0,94

Determining strategic actions by weighing cost and benefits 4,02 3,73 0,35

Dedicating to make the venture work whenever possible 3,20 3,33 0,70

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Possessing an extremely strong internal drive 3,80 3,60 0,51

Committing to long-term business goal 4,29 4,00 0,32

Applying ideas, issues and observations to alternative contexts 3,71 3,80 0,77

Learning from a variety of means 4,22 4,40 0,49

Keeping up to date in my field 4,24 4,40 0,58

Applying learned skills and knowledge into actual practices 4,13 4,00 0,64

Taking reasonable job-related risks 3,24 3,00 0,47

Looking at old problems in new ways 3,82 3,87 0,87

Exploring new ideas 4,07 3,87 0,45

Treating new problems as opportunities 3,93 4,07 0,62

Managing time 3,98 4,27 0,27


The ANOVA test was used to assess the statistical significance of the differences among 2 groups of entrepreneurs who had or had no any relevant work experience in performing their entrepreneurial competencies. The results indicated that respondents having relevant work experience have been better at 16 competencies but worse at 14 other competencies. The significance level was much more than 0,05, which means that the credibility of this ANOVA test was not assured enough to confirm the assumption that there were statistical significant differences between these 2 groups of owners/managers in showing entrepreneurial competences.

5.2.4. Competencies and entrepreneur’s age

Table 17: Competencies and entrepreneur’s age

Items 20-30 31-40 41-50 51-60 Sig.

Identifying goods or services people want 4,00 4,18 4,56 4,00 0,53

Perceiving unmet consumer needs 4,00 4,13 4,44 4,50 0,61

Actively looking for products that provide real

benefit to customers 4,09 4,00 4,33 3,50 0,71

Seizing high-quality business opportunities 4,09 4,13 4,56 4,50 0,50




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Developing long-term trusting relationships with

others 4,18 4,47 4,78 4,50 0,43

Maintaining a personal network of work contacts 3,64 4,13 3,67 3,00 0,08

Communicating with others effectively 3,82 4,11 4,44 4,00 0,43

Interacting with others (employees, customers,

suppliers, …) 3,73 4,08 4,11 4,50 0,51

Negotiating with others (employees, customers,

suppliers, …) 3,64 3,95 4,11 2,50 0,16

Determining long-term issues, problems, or

opportunities 4,18 4,16 4,67 4,50 0,49

Redesigning the organization to better meet long-

term objectives & changes 3,64 3,97 3,89 4,50 0,67

Assessing & linking short-term tasks in the context

of long-term direction 3,64 4,05 4,22 4,50 0,47

Determining strategic actions by weighing cost and benefits 3,18 4,00 4,56 4,50 0,02

Dedicating to make the venture work whenever

possible 3,18 3,32 3,00 3,00 0,88

Possessing an extremely strong internal drive 3,36 3,74 4,11 4,50 0,29

Committing to long-term business goal 3,64 4,24 4,78 4,50 0,06

Applying ideas, issues and observations to

alternative contexts 3,27 3,74 4,33 3,50 0,13

Learning from a variety of means 4,00 4,24 4,78 4,00 0,22

Keeping up to date in my field 4,09 4,21 4,78 4,50 0,34

Applying learned skills and knowledge into actual practices 3,73 4,05 4,78 4,00 0,08

Taking reasonable job-related risks 3,27 3,26 2,78 3,00 0,69

Looking at old problems in new ways 3,91 3,79 3,89 4,00 0,97

Exploring new ideas 4,00 3,95 4,22 4,50 0,73

Treating new problems as opportunities 3,82 3,95 4,33 3,50 0,51

Managing time 4,18 3,92 4,44 4,00 0,41


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The ANOVA test was used to assess the statistical significance of the differences among 4 groups of entrepreneurs who are aged of 20-30, 31-40, 41-50 and 51-60 years old in performing their entrepreneurial competencies. Only 2 competencies “Coordinating tasks” (item of organizing competencies) and “Determining strategic actions by weighing cost and benefits” (item of group of strategic competencies) had the significance level less than 0,05. The credibility of this ANOVA test for the 2 items was assured enough to confirm the assumption that there were statistical significant differences between these 4 groups of owners/managers in showing these 2 competences. There weren’t statistical differences between 4 different ages in performing 28 competencies remaining.

5.2.5. Firm performance in term of investment efficiency

The degree of satisfaction on investment efficiency of firm is presented in the below table. It is hard to evaluate the firm performance. So in this study, the opinions of entrepreneurs return on shareholder equity (ROE), gross profit margin, net profit from operations (EBIT) and return on investment (ROI) were used as relative estimation. The scale measured the satisfaction (1=Not at all satisfied, 3=Moderately satisfied, 5=Highly satisfied) and the score of range from 4 to 5 was considered as the good and very good performance. The result indicated that the investment efficiency was only ranked at average level, from 3,38 to 3,66. 51,7%, 46,6%, 43,1% and 48,3% of entrepreneurs sampled perceived satisfied or highly satisfied relatively with the ROE, gross profit margin, EBIT and ROI of their companies. The firm performance was not bad. This result revealed that the technical services in Vietnam have been developed well despite of their young age.

Table 18: Self perceiving of entrepreneurs on firm performance

return on shareholder

equity (ROE)

gross profit

margin

net profit from

operations (EBIT)

return on

investment (ROI)

N Valid 58 58 58 58

Missing 2 2 2 2

Mean 3,59 3,45 3,38 3,66

Std. Deviation 0,97 0,94 0,89 0,98

Good and very

good performance 51,70% 46,60% 43,10% 48,30%


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Before this survey, some owners/managers and expert in business administration had been asked for opinions on what indicators should be used to measure the investment efficiency. They recommended to use ROE, EBIT, ROI and several suggested the gross profit margin. But in fact during the field work, the interviewees often asked me to explain some business terms, especially “gross profit margin”. It seemed that the entrepreneurs in small technical services firms in Vietnam haven’t got good knowledge on economics and they didn’t care about the gross profit margin. The part sample profile indicated that only 35% of respondents had received training on management prior to business start-up, and 55% had trained on business management after beginning their career. The results on their perceiving the degree of importance of these indicators of investment efficiency showed that the owners/managers have put lowest weight to the gross profit margin (mean=3,64) among the 4 indicators. ROE and ROI were highly appreciated in presenting the firm performance.

Table 19: Degree of importance

return on shareholder

equity (ROE)

gross profit

margin

net profit from

operations (EBIT)

return on

investment (ROI)

N Valid 58 58 58 58

Missing 2 2 2 2

Mean 4,19 3,64 3,95 4,47

Std. Deviation 0,89 0,91 0,87 0,75

1=Of little important; 3=Moderately important; 5=Extremely important

5.2.6. Firm relative performance

Table 20: Relative performance to major competitors

Sales growth Net profits Growth in market share

N Valid 58 58 58

Missing 2 2 2

Mean 3,48 3,38 3,64

Std. Deviation 1,00 0,77 1,00

1=Significantly lower; 2= Moderately lower; 3=About the same; 4= Moderately higher; 5= Significantly higher

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In this part, the entrepreneurs were asked for the comparison between their firm and majors competitors. The means of sales growth, net profits and growth in market share were similar one to another, at the average level, ranked from 3,38 to 3,64 (a little higher than the major competitors). In fact, the enterprises in the sample are small sized. So the growth in market share was not significantly much enough to affect to the whole market.

5.2.7. Comparison of firm performance by age of firm

Another comparison of the independent and dependent variables was also made with the age of firm by using ANOVA procedure. The results have shown that there aren’t any significant differences in the variables within the Investment efficiency in different stage of firm development because the significant level at p value exceeded 0,05. If the sig. at p=0,07 is also acceptable, it is possible to affirm the statistical significant differences in firm relative performance (sales growth, net profits and growth in market share) in different stage of firm development. The highest ratings of firm relative performance in the firm age from 3,5 to 6,5 years old corresponds to the fact that this stage is dynamic and unstable when an industry is still evolving.

Table 21: Investment efficiency and age of firm

Items Mean

Sig. 1-3 years old 3,5-6,5 7-9,5 10-12

Return on shareholder equity (ROE) 3,48 3,82 3,20 4,00 0,31

Gross profit margin 3,39 3,50 3,40 3,67 0,96

Net profit from operations (EBIT) 3,35 3,50 3,10 3,67 0,65

Return on investment (ROI) 3,61 3,91 3,10 4,00 0,17


Table 22: Firm relative performance and age of firm

Items Mean

Sig. 1-3 years old 3,5-6,5 7-9,5 10-12

Sales growth 3,17 4,00 3,00 3,67 0,01

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Net profits 3,13 3,68 3,20 3,67 0,07

Growth in market share 3,43 4,05 3,10 4,00 0,04


5.3. Hypothesis testing

In this part, the second research question RQ2: “How do these entrepreneurial competencies impact on the performance of SMEs?” were answered by investigating the relationships between the 6 groups of competencies and firm performance. This answer supplied to managers with the overview picture of entrepreneurial competencies and their impacts on success of SMEs in technical services. These relationships would help them to find out the solutions related to competencies to affect actively to firm performance.

In this part, the variables of entrepreneurial competencies and firm performance were created by the ways of adding all the scores of items within a construct (weight of each = 1) then dividing the addition score by the number of items. The final result is the score of each variable. There are 8 new variables: opportunity competencies, organizing competencies, relationship competencies, strategic competencies commitment competencies and conceptual competencies, investment efficiency and relative performance.

5.3.2. Kolmogorov-Smirnov Test

Table 23: One-Sample Kolmogorov-Smirnov Test

Normal

Parametersa,b Most Extreme Differences Kolmogorov-

Smirnov Z

Asymp.

Sig. (2-

tailed) Mean Std.

Deviation Absolute Positive Negative

Opportunity competencies 4,15 0,69 0,11 0,11 -0,11 0,88 0,42

Organizing competencies 3,90 0,71 0,10 0,06 -0,10 0,81 0,53

Relationship competencies 4,08 0,67 0,16 0,09 -0,16 1,20 0,11

Strategic competencies 4,03 0,84 0,14 0,13 -0,14 1,05 0,22

Commitment competencies 3,73 0,83 0,13 0,08 -0,13 1,01 0,26

Conceptual competencies 3,94 0,64 0,10 0,06 -0,10 0,74 0,64

Investment efficiency 3,37 1,15 0,16 0,08 -0,16 1,23 0,10

Relative performance 3,35 1,14 0,13 0,10 -0,13 0,98 0,29 a: Test distribution is Normal

b: Calculated from data

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The Kolmogorov-Smirnov Test (often called the K-S test) was used as a goodness of fit test to compare the empirical distribution function with the cumulative distribution function specified by the null hypothesis (Ho) : The Population of these variables resembles the normal distribution.

The results revealed that the significance value for these variables exceeded 0,05 and Ho couldn’t be rejected. Thus Ho was accepted and the distribution of resembled a normal distribution. Procedures of further variables analysis would be employed.

5.3.2. Correlations among variables

Before carrying out the regression procedures, the correlations analysis between the independent (competencies) and dependent (firm performance) variables was carried out to provide the averages, standard deviation and bivariate correlations between variables which were shown in the following tables.

Table 24: Pearson correlation coefficient

1 2 3 4 5 6 7 8

1 Opportunity competencies 1

2 Organizing competencies 0,8** 1

3 Relationship competencies 0,61** 0,67** 1

4 Strategic competencies 0,78** 0,75** 0,52** 1

5 Commitment competencies 0,54** 0,65** 0,63** 0,53** 1

6 Conceptual competencies 0,76** 0,74** 0,59** 0,72** 0,65** 1

7 Investment efficiency 0,44** 0,39** 0,23 0,41** 0,3* 0,39** 1

8 Relative performance 0,23 0,22 0,09 0,28* 0,27* 0,31* 0,73** 1

** Correlation is significant at the 0.01 level (2-tailed).

* Correlation is significant at the 0.05 level (2-tailed).

The above correlation analysis using Pearson coefficient has shown that there are significance level of correlations among variables, especially among groups of competencies. A medium to high level of correlation ranked from 0,52 to 0,8 was found within competency area. This can be explained by the fact that different groups of competencies describe co-related behavioral characteristics of entrepreneurs.

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However, the significant correlations may create potential problems of multi-collinearity when using them as the dependents variables in hypothesis testing.

For correlation among firm performance and competencies, the Pearson coefficients were moderate and low (from 0,09 to 0,44). There is a positive association between variables.

5.3.3. Relationships between entrepreneurial competencies and firm performance

Single regression procedure with 6 new competencies variables as independent ones and the two firm performance variables including investment efficiency and relative performance as dependent ones were conducted. 12 models were run individually to test the relationship between entrepreneurial competencies and firm performance. After running single regression procedure, the results of the model R2, the two-tail p value for significance of beta (or the regression itself), the un-standardized and standardized slope (beta) estimates were shown in 12 following tables.

Hypothesis 1a (H1a): The opportunity competencies of the entrepreneur are positively related to the investment efficiency in context of technical services sector in Vietnam.

Table 25: Regression for H1a

Independent Variables

Dependent Variable: Y1- Investment efficiency

Unstandardized Coefficients Standardized Coefficients t Sig.

B Std. Error Beta

(Constant) 0,314 0,824 0,382 0,704

X1-Opportunity competencies 0,735 0,196 0,442 3,757 0,000

R=0,442; R2=0,196; Adjusted R2=0,182; F=14,114; Sig.=0,000

The opportunity competency (X1) is significantly correlated with Investment efficiency (Y1) at a significance level of p<0,05. The relationship is moderate with R=0,442. The value of R2 is 0,196 meaning that 19,6% of the variance in firm performance (investment efficiency) can be explained by opportunity competency and the model fits the collected data moderately. The value of F (the regression mean square (MSR) divided by the residual mean square (MSE)) =14,114 and its significance value is smaller than 0.05 (p=0,000) then the opportunity competency does a good job explaining the variation in the investment efficiency. Furthermore, the t value is 3,757 (well below -2 and above +2) and significant at 0,000, which

41

means that this independent variable is significantly contributing to the equation for predicting investment efficiency.

It is possible to conclude that there is a positive relationship between the opportunity competency and investment performance.

Hypothesis 1b (H1b): The opportunity competencies of the entrepreneur are positively related to the relative performance in context of technical services sector in Vietnam.

Table 26: Regression for H1b


Dependent Variable: Y2 - Relative performance


B Std. Error Beta

(Constant) 1,809 0,887 2,038 0,046

X1- Opportunity competencies 0,371 0,211 0,225 1,761 0,084


The opportunity competency (X1) is not significantly correlated with relative performance (Y2) because the significance level exceeds 0,05. The relationship between independent variable and dependent one is a bit weak with R=0,225. Only 5,1% of the variance in relative performance can be explained by opportunity competency (R2=0,051). Furthermore with a high value of significance (0,084), the predictive relationship between the opportunity competency and relative performance can be rejected. Or in another word there is no positive relationship between these two variables.

Hypothesis 2a (H2a): The organizing competencies of the entrepreneur are positively related to the investment efficiency in context of technical services sector in Vietnam.

The organising competency (X2) is significantly correlated with Investment efficiency (Y1) at a significance level of p=0,002 (smaller than 0,05). The relationship is moderate with R=0,388. The value of R2 is 0,15 meaning that 15% of the variance in investment efficiency can be explained by organizing competency. The value of F =10,258 and its significance value is smaller than 0,05 (p=0,002) then the opportunity competency does a good job explaining the variation in the investment efficiency. Furthermore, the t value is 3,203 (well below -2 and above

42

+2) and significant at 0,002, which means that this independent variable is significantly contributing to the equation for predicting investment efficiency.

It is possible to conclude that there is a positive relationship between the opportunity competency and investment performance.





B Std. Error Beta

(Constant) 0,914 0,778 1,174 0,245

X2 - Organizing competencies 0,628 0,196 0,388 3,203 0,002


Hypothesis 2b (H2b): The organizing competencies of the entrepreneur are positively related to the relative performance in context of technical services sector in Vietnam.



Dependent Variable: Y2 -Relative performance


B Std. Error Beta

(Constant) 1,980 0,817 2,424 0,019

X2 - Organizing competencies 0,351 0,206 0,218 1,704 0,094


Similarly to the hypothesis H1b, the hypothesis H2b was rejected with the significance level exceeding 0,05 (sig.=0,094). The relationship between independent variable and dependent one is a bit weak with R=0,225. Only 4,8% of the variance in relative performance can be explained by organizing competency (R2=0,048).

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Hypothesis 3a (H3a): The relationship competencies of the entrepreneur are positively related to the investment efficiency in context of technical service sectors in Vietnam.





B Std. Error Beta

(Constant) 1,792 0,907 1,976 0,053

X3 - Relationship

competencies 0,386 0,219 0,225 1,760 0,084


The result has shown that the significance level is 0,084 (>0,05). So the relationship competency (X3) is not significantly correlated with Investment efficiency (Y1). The relationship between them is a bit weak with R=0,225. Only 5,1% of the variance in investment efficiency can be explained by opportunity competency (R2=0,051). Furthermore with a high value of significance (0,084), the predictive relationship between the relationship competency and investment efficiency can be rejected. Or in another word there is no positive relationship between these two variables.

Hypothesis 3b (H3b): The relationship competencies of the entrepreneur are positively related to the relative performance in context of technical service sectors in Vietnam.





B Std. Error Beta

(Constant) 2,737 0,919 2,978 0,004

X3 - Relationship competencies 0,150 0,222 0,088 0,676 0,502

R=0,088; R2=0,008; Adjusted R2=-0,009; F=0,457; Sig.=0,502

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Similarly to the hypothesis on positive relationship between the relationship competency (X3) and Investment efficiency (Y1), the H3b was also rejected because of high significance level (sig.=0,502). So the relationship competency (X3) is not significantly correlated with relative performance (Y2). The relationship between them is very weak with R=0,088. Only 0,8% of the variance in relative performance can be explained by relationship competency (R2=0,008). Furthermore with a high value of significance (0,502), the predictive relationship between the relationship competency and relative performance can be rejected. Or in another word there is no positive relationship between these two variables.

Hypothesis 4a (H4a): The strategic competencies of the entrepreneur are positively related to the investment efficiency in context of technical services sector in Vietnam.





B Std. Error Beta

(Constant) 1,091 0,676 1,615 0,112

X4 - Strategic competencies 0,564 0,164 0,412 3,44 0,001


The strategic competency (X4) is significantly correlated with Investment efficiency (Y1) at a significance level of p<0,05. The correlation coefficient (R) is 0,412 showing a moderate relationship between strategic competency and Investment efficiency. The value of R2 is 0,169 meaning that 16,9% of the variance in firm performance (investment efficiency) can be predicted by strategic competency. The value of F =11,831 and its significance value =0,001 (<0,05) show that the strategic competency does a good job explaining the variation in the investment efficiency. Furthermore, the t value is 3,44 (well below -2 and above +2) and significant at 0,001, which means that this independent variable is significantly contributing to the equation for predicting investment efficiency.

We can conclude that there is a positive relationship between the strategic competency and investment performance.

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Hypothesis 4b (H4b): The strategic competencies of the entrepreneur are positively related to the relative performance in context of technical services sector in Vietnam.





B Std. Error Beta

(Constant) 1,828 0,706 2,588 0,012

X4 - Strategic competencies 0,377 0,171 0,278 2,201 0,032


The strategic competency (X4) is significantly correlated with relative performance (Y2) at a significance level of p<0,05. The correlation coefficient (R) is 0,278 showing a bit weak relationship between strategic competency and relative performance. The value of R2 is 0,077 meaning that only 7,7% of the variance in relative performance can be explained by strategic competency. However the value of F is 4,846 and its significance value is 0,032 (<0,05), which shows that the strategic competency does a good job explaining the variation in the relative performance. Furthermore, the t value is 2,201 (well below -2 and above +2) and significant at 0,032, which means that this independent variable is significantly contributing to the equation for predicting relative performance.

We can conclude that there is a positive relationship between the strategic competency and relative performance.

Hypothesis 5a (H5a): The commitment competencies of the entrepreneur are positively related to the investment efficiency in context of technical services sector in Vietnam.

The commitment competency (X5) is significantly correlated with Investment efficiency (Y1) at a significance level of p<0,05. The correlation coefficient (R) is 0,302 showing a moderate relationship between commitment competency and investment efficiency. The value of R2 is 0,091 meaning that 9,1% of the variance in firm performance (investment efficiency) can be predicted by commitment competency. The value of F =5,809 and its significance value =0,019 (<0,05) show that the commitment competency does a good job explaining the variation in the

46

investment efficiency. Furthermore, the t value is 2,41 (well below -2 and above +2) and significant at 0,019, which means that this independent variable is significantly contributing to the equation for predicting investment efficiency.

We can conclude that there is a positive relationship between the commitment competency and investment efficiency.





B Std. Error Beta

(Constant) 1,807 0,663 2,728 0,008

X5 - Commitment competencies 0,418 0,173 0,302 2,41 0,019


Hypothesis 5b (H5b): The commitment competencies of the entrepreneur are positively related to the relative performance in context of technical services sector in Vietnam.




Unstandardized Coefficients

Standardized Coefficients

t Sig.

B Std. Error Beta

(Constant) 1,972 0,664 2,971 0,004

X5 - Commitment competencies 0,369 0,174 0,269 2,126 0,038


The commitment competency (X5) is significantly correlated with relative performance (Y2) at a significance level of p<0,05. The correlation coefficient (R) is 0,269 showing a bit weak relationship between commitment competency and relative performance. The value of R2 is 0,072 meaning that only 7,2% of the

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variance in relative performance can be predicted by commitment competency. The value of F=4,521 and its significance value of 0,038 (<0,05) show that the commitment competency does a good job explaining the variation in the relative performance. Furthermore, the t value is > 2 (t=2,126) and significant at 0,038, which means that this independent variable is significantly contributing to the equation for predicting relative performance.

We can conclude that there is a positive relationship between the commitment competency and relative performance.

Hypothesis 6a (H6a): The conceptual competencies of the entrepreneur are positively related to the investment efficiency in context of technical services sector in Vietnam.





B Std. Error Beta

(Constant) 0,614 0,864 0,710 0,480

X6 - Conceptual competencies 0,699 0,217 0,390 3,226 0,002


The conceptual competency (X6) is significantly correlated with investment efficiency (Y1) at a significance level of p<0,05. The correlation coefficient (R) is 0,39 showing a moderate relationship between conceptual competency and investment efficiency. The value of R2 is 0,152 meaning that 15,2% of the variance in investment efficiency can be predicted by conceptual competency. The value of F=10,409 and its significance value of 0,002 (<0,05) show that the conceptual competency does a good job explaining the variation in the investment efficiency. Furthermore, the t value is > 2 (t=3,226) and significant at 0,002, which means that this independent variable is significantly contributing to the equation for predicting investment efficiency.

We can conclude that there is a positive relationship between the conceptual competency and investment efficiency.

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Hypothesis 6b (H6b): The conceptual competencies of the entrepreneur are positively related to the relative performance in context of technical services sector in Vietnam.





B Std. Error Beta

(Constant) 1,181 0,885 1,335 0,187

X6 - Conceptual competencies 0,551 0,222 0,310 2,482 0,016


The conceptual competency (X6) is significantly correlated with relative performance (Y2) at a significance level of p<0,05. The correlation coefficient (R) is 0,31 showing a moderate relationship between conceptual competency and relative performance. The value of R2 is 0,096 meaning that 9,6% of the variance in relative performance can be predicted by conceptual competency. The value of F=6,161 and its significance value of 0,016 (<0,05) show that the conceptual competency does a good job explaining the variation in the relative performance. Furthermore, the t value is > 2 (t=2,482) and significant at 0,016, which means that this independent variable is significantly contributing to the equation for predicting relative performance.

We can conclude that there is a positive relationship between the conceptual competency and relative performance.

5.3.4. Multiple regression

This part used multiple regression models to identify the impact of entrepreneurial competencies on investment efficiency and on relative performance by providing a means of objectively assessing the degree and character of the relationship between the dependent and independent variables (Hair et al., 1998).

Hypothesis A (HA): The 6 groups of competencies combined (opportunity, organizing, relationship, strategic, commitment and conceptual competencies) of the entrepreneurs are positively related to the investment efficiency in context of technical services sector in Vietnam.

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Table 37: Multiple regression with investment efficiency

Dependent

Variable Independent Variable

Unstandardized Coefficients

Standardized Coefficients t Sig.

Collinearity Statistics

B Std. Error Beta Tolerance VIF

In

vest

men

t eff

icie

ncy

(Constant) 0,42 0,98 0,43 0,67

X1-Opportunity competencies 0,50 0,40 0,30 1,24 0,22 0,25 3,95

X2-Organizing competencies 0,07 0,39 0,04 0,18 0,86 0,25 3,95

X3-Relationship competencies -0,26 0,30 -0,15 -0,87 0,39 0,47 2,12

X4-Strategic competencies 0,17 0,29 0,13 0,60 0,55 0,33 3,02

X5-Commitment competencies 0,14 0,25 0,10 0,55 0,59 0,45 2,20

X6-Conceptual competencies 0,12 0,39 0,07 0,31 0,76 0,31 3,21

R = 0,47 R2 = 0,22 Adjusted R2 = 0,13 F= 2,52 Sig.= 0,032

The result of multiple regression with investment efficiency is presented in Table 37. The high multiple correlation coefficient (R = 47%) indicates a strong relationships between the observed and predicted values of the dependent variable (investment efficiency). R2 is 0,22 meaning that 22% of the variance in investment efficiency can be predicted from opportunity, organizing, relationship, strategic, commitment and conceptual competencies combined. The F value is 2,52 and significant (p = 0,032 <0.05). This indicates that the combination of predictors significantly predict investment efficiency.

Although the correlation matrix above mentioned revealed that it was easy to exist collinearity (or multicollinearity) - the undesirable situation where the correlations among the independent variables are strong, the results in this table showed the denying on this prediction. Tolerance of variables which used to determine how much the independent variables are linearly related to one another was not low tolerance. VIF - the variance inflation factor that is the reciprocal of the tolerance didn’t exceed 10. Thus there was any indicator of multicollinearity.

However, the significant exceeded 0,05. Thus there was no evidence to reject Ho, then confirm the significant relationship between all of 6 groups of competencies combined and investment efficiency.

Hypothesis B (HB): The 6 groups of competencies combined (opportunity, organizing, relationship, strategic, commitment and conceptual competencies) of the entrepreneurs are positively related to the relative performance in context of technical services sector in Vietnam.

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Table 38: Multiple regression with relative performance

Dependent

Variable Independent Variable

Unstandardized

Coefficients

Standardized

Coefficients t Sig.

Collinearity

Statistics

B Std. Error Beta Tolerance VIF R

elat

ive

perf

orm

ance

(Constant) 1,71 1,03 1,67 0,10

Opportunity competencies -0,03 0,42 -0,02 -0,08 0,94 0,25 3,95

Organizing competencies -0,09 0,41 -0,06 -0,22 0,83 0,25 3,95

Relationship competencies -0,39 0,31 -0,23 -1,23 0,22 0,47 2,12

Strategic competencies 0,22 0,30 0,17 0,75 0,46 0,33 3,02

Commitment competencies 0,29 0,26 0,21 1,12 0,27 0,45 2,20

Conceptual competencies 0,43 0,41 0,24 1,07 0,29 0,31 3,21

R = 0,37 R2 = 0,14 Adjusted R2 = 0,045 F= 1,46 Sig.= 0,21

The result of multiple regression with relative performance shown in Table 38 were similar to the Table 37. The significant exceeded 0,05. Thus there was no evidence to reject Ho, then to confirm the significant relationship between all of 6 groups of competencies and relative performance.

5.3.5. Summary of hypothesis testing The result of hypothesis testing can be considered as supporting evidence for the theoretical model, which give emphasis to the critical role of entrepreneurs in long-term performance of an SME. As for hypothesis rejected, it could be explained by the others potential influent factors that haven’t been involved in this study.

Table 39: Summary of hypothesis testing

Hypothesis Description Results

H1a The opportunity competencies of the entrepreneur are positively related to the


Supported

H1b The opportunity competencies of the entrepreneur are positively related to the


Rejected

H2a The organizing competencies of the entrepreneur are positively related to the


Supported

H2b The organizing competencies of the entrepreneur are positively related to the


Rejected

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H3a The relationship competencies of the entrepreneurs are positively related to

the investment efficiency in context of technical service sectors in Vietnam.

Rejected

H3b The relationship competencies of the entrepreneurs are positively related to

the relative performance in context of technical service sectors in Vietnam.

Rejected

H4a The strategic competencies of the entrepreneurs are positively related to the


Supported

H4b The strategic competencies of the entrepreneurs are positively related to the


Supported

H5a The commitment competencies of the entrepreneurs are positively related to

the investment efficiency in context of technical services sector in Vietnam.

Supported

H5b The commitment competencies of the entrepreneurs are positively related to

the relative performance in context of technical services sector in Vietnam.

Supported

H6a The conceptual competencies of the entrepreneurs are positively related to the


Supported

H6b The conceptual competencies of the entrepreneurs are positively related to the


Supported

HA The 6 groups of competencies combined (opportunity, organizing,

relationship, strategic, commitment and conceptual competencies) of the

entrepreneurs are positively related to the investment efficiency in context of

technical services sector in Vietnam.

Rejected

HB The 6 groups of competencies combined (opportunity, organizing,

relationship, strategic, commitment and conceptual competencies) of the

entrepreneurs are positively related to the relative performance in context of

technical services sector in Vietnam.

Rejected

6. CONCLUSION AND RECOMMENDATION

6.1. Conclusion

This study provides the better understanding on the owners/managers in term of their profile and the competencies needed in carrying out their business in the field of technical services in Vietnam. The surveys indicated that the sampled

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entrepreneurs were characterize by the dominance of male over female gender, the dominance of young over old ones and the higher level of education in comparison with the general working population, which can be explained by the fact that the young generation of entrepreneurs must be more educated to adapt to the knowledge-based economy. The study also revealed that the majority of the respondents have received the professional training prior to business start-up but after business start-up they tend to take part in the managerial course, which means that they have propensity of entering their well-known major, then accomplishing the knowledge of management more needed for the business operation. The most of sampled entrepreneurs have possessed relevant work experiences before starting the current career and were ready to restart their business after their precedent failure.

The SMEs managed by theses entrepreneurs are almost rather small (71,1% of firms have less than 50 employees). The small size seems be more flexible and suitable to the young age of firm and the field of services. The majority of SMEs have operated in the form of joint-stock or limited companies which are more often founded in Vietnam.

As for the first research question (RQ1) that asked What are the competencies required by the SME entrepreneurs in Vietnam technical services?, the 6 groups of competencies including opportunity, organizing, relationship, strategic, commitment and conceptual competencies were distinguished based on theoretical studies and discussion with experts in economics. The results revealed that the owners/managers have perceived themselves able to present all the 6 groups of competencies at moderate or high level. In term of competencies related to venture work, they are not good.

With respect to the second research question (RQ2) which related to the impact of entrepreneurial competencies on firm performance, there is a little change in research design. The research proposal gave 6 hypotheses but in the field research, they have been developed into 14 hypotheses distinguishing firm performance by the investment efficiency and the relative performance. Among 12 single hypotheses, the results of this research supported 8 hypotheses and rejected 4 hypotheses. These results showed that the opportunity, organizing, strategic, commitment and conceptual competencies of the entrepreneurs were positively related to the investment efficiency of Vietnam SMEs in the field of technical services sector. The relative performance as compared with other rivals was affected significantly by the strategic, commitment and conceptual competencies. These findings gave the suggestion of focusing on these entrepreneurial competencies as one of the ways to improve the firm performance. As for multiple regression between all 6 groups of competencies combined and firm performance were rejected. This could be explained by the high correlation between these groups

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of entrepreneurial competencies. So it was very difficult to examine their impacts on the firm performance. It could be necessary to consider the other potential factors in the further study. This is also the main limitation of this study which hasn’t revealed to the influence level of all the 6 groups of entrepreneurial competencies combined on the firm performance.

The initial research design was aimed to SMEs in the some technical majors but on carrying out the field work, only SMEs in the field of electronic and electricity have been involved because of the limitation of time and scope of Master program study. Small sample size is the major limitation of the study. Future studies can advance this research by incorporating a larger sample size as well as focusing on more service sectors, since such an exercise gives more comparable results. Besides, it may be possible to compare between different groups of industries and compare gender differences in the competencies if a sufficiently large sample is taken from male and female entrepreneurs. The limitation of this research is also the geographical location of the sample.

6.2. Contribution and recommendation

The findings of the research contribute to the contextual understanding of the entrepreneurs and their SMEs in the Vietnam technical services sector, as well as to the theoretical explanation of the relationship between entrepreneurial competencies and SME performance. The results of 8 hypothesis testing have supported the model of relationship between entrepreneurial competencies and firm performance, which explain how entrepreneurial competencies affect SME performance. This study provided the evidence for the crucial role of entrepreneurs in determining the success of their firms.

In addition to the above findings, the study contributed to the development of a survey instrument for measuring entrepreneurial competencies based on the entrepreneurial behaviors. This instrument was content validated through a checking with economic expert; scale validated through reliability test with high level of Cronbach alpha coefficient. This instrument could be served well for measuring the entrepreneurial competencies and firm performance in further study within other majors, in other contexts.

In consideration of the limitations, as well as the contribution of the study, so some recommendations were suggested. It was necessary:

1. To seek for solutions to enhance the entrepreneurial competencies because there are positive relationships between most of them and firm performance. Although the study revealed that there was no relationship between training

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and competencies of owners/managers, I recommend still solutions in consideration of the suggestion that entrepreneurial competencies can be learned and trained in the studies of Bird, 1995, because the training they had received was neither efficient nor corresponding to their education level, their capabilities. Distinguishing the roles of different competencies on firm performance suggested a more focused approach in provide special training to entrepreneurs. This research was useful in assisting the determination of competencies for both practicing and potential entrepreneurs to meet their training and developing needs.

2. To carry out the further studies by covering larger sample in term of geographic, industry and firm size in order to depict a broader and detailed situation of Vietnam enterprises. The possible candidate for further comparison can be more fields in the high-tech and knowledge-based industries, more big cities such as Ho Chi Minh city, Da Nang, Hai Phong, …, which are the potential areas of development in economy of Vietnam.

3. To organize the training to supplying the entrepreneurs in Vietnam technical services with basic knowledge in economics, especially in management of SMEs. It is necessary to category different types of potential entrepreneurs for supply more specific training and support.

4. As for further study, it will be very interesting to involve in the theoretical model the SME’s competitiveness which should comprise the four major constructs relating to the firm’s internal factors, external environment, influences of the entrepreneur, and the firm’s long-term performance. It is imagined that the firm performance will be affected by other factors besides entrepreneurial competencies.

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APPENDIX: QUESTIONNAIRE

Control number Interviewer Date of interview

PART 1 PERSONAL BACKGROUND INFORMATION

1. Name of interviewee

2. Position

3. Your current age 20-30 31-40 41-50 51-60 61 or above

4. Your age when you started owning/managing this business

20-30 31-40 41-50 51-60 61 or above

5. Sex Male Female

6. Education level Primary Secondary High school

Bachelor’s Degree Master Degree Doctor Degree

7. Did you receive any formal management training and/or relevant professional training before starting up/owning this business?

Management Professional Both None

8. Did you receive any formal management training and/or relevant professional training after starting up/owning this business?

Management Professional Both None

9. Before starting up/owning this business, did you have any work experience relevant to it? Yes No

10. Do you have business startup experience prior to this business? Yes No

PART 2 COMPANY INFORMATION

1. Name of firm:

2. Address:

3. Tel: 4. Email:

4. Exact number of employees: 5. Years in business:

6. Type of ownership Private enterprise Co-operative Limited Company

Joint-stocks Foreign invested

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PART 3 ENTREPRENEURIAL COMPETENCIES

The following statements indicate how competent you are in the activities described. Please circle one number to indicate your agreement on each statement:

As the owner/manager of a firm, I am able to Strongly

disagree

Strongly

Agree

1- Identify goods or services people want 1 2 3 4 5

2- Perceive unmet consumer needs 1 2 3 4 5

3- Actively look for products that provide real benefit to customers 1 2 3 4 5

4- Seize high-quality business opportunities 1 2 3 4 5

5- Organize different resources 1 2 3 4 5

6- Plan the operations of the business 1 2 3 4 5

7- Keep organization running smoothly 1 2 3 4 5

8- Coordinate tasks 1 2 3 4 5

9- Lead and delegate subordinates effectively 1 2 3 4 5

10- Develop long-term trusting relationships with others 1 2 3 4 5

11- Maintain a personal network of work contacts 1 2 3 4 5

12- Communicate with others effectively 1 2 3 4 5

13- Interact with others (employees, customers, suppliers, …) 1 2 3 4 5

14- Negotiate with others (employees, customers, suppliers, …) 1 2 3 4 5

15- Determine long-term issues, problems, or opportunities 1 2 3 4 5

16- Redesign the organization to better meet long-term objectives & changes 1 2 3 4 5

17- Assess & link short-term tasks in the context of long-term direction 1 2 3 4 5

18- Determine strategic actions by weighing cost and benefits 1 2 3 4 5

19- Dedicating to make the venture work whenever possible 1 2 3 4 5

20- Possessing an extremely strong internal drive 1 2 3 4 5

21- Committing to long-term business goal 1 2 3 4 5

22- Apply ideas, issues and observations to alternative contexts 1 2 3 4 5

23- Learn from a variety of means 1 2 3 4 5

24- Keep up to date in my field 1 2 3 4 5

25- Apply learned skills and knowledge into actual practices 1 2 3 4 5

26- Take reasonable job-related risks 1 2 3 4 5

27- Look at old problems in new ways 1 2 3 4 5

28- Explore new ideas 1 2 3 4 5

29- Treat new problems as opportunities 1 2 3 4 5

30- Manage time 1 2 3 4 5

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PART 4 FIRM PERFORMANCE

With reference to the performance of your firm in the past 3 years (or since you became the owner/manager of this firm if you have involved with it for less than 3 years) …

1. Please indicate the degree of importance your firm attaches to each of the following performance criteria and the extent to which you are satisfied with them.

Degree of importance Of little

important Moderately

important Extremely

important a. Return on shareholder equity 1 2 3 4 5 b. Gross profit margin 1 2 3 4 5 c. Net profit from operations 1 2 3 4 5 d. Return on investment 1 2 3 4 5

Degree of Satisfaction Not at all

satisfied Moderately

satisfied Highly

satisfied a. Return on shareholder equity 1 2 3 4 5 b. Gross profit margin 1 2 3 4 5 c. Net profit from operations 1 2 3 4 5 d. Return on investment 1 2 3 4 5

2. Please indicate the growth of your firm relative to your major competitors according to the following criteria:

Significantly lower

Moderately lower

About the same

Moderately higher

Significantly higher

a. Sales growth 1 2 3 4 5 b. Net profits 1 2 3 4 5 c. Growth in market share 1 2 3 4 5

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Sample 1 Research Report

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Transcript of Sample 1 Research Report