Differences In Entrepreneurial Intention And Characteristics According To Demographics And Other Factors

Abstract

Entrepreneurship is a subject that has been emphasized especially over the last decades as the driving force of economic development and social prosperity. Majority of the research focused on personality traits and contingency factors. There are many more factors that are thoroughly investigated for their role in the orientation of people to entrepreneurial activities such as the environment, culture, role models, education and work experience. In this paper we compared variance in the entrepreneurial intention and entrepreneurial characteristics of innovativeness, need for achievement, need for autonomy and risk-taking propensity according to age, gender, attendance to entrepreneurship course and entrepreneurs in the family. The survey administrated to a sample of 607 university students and graduates showed the following results; it is found that males are more entrepreneurially intended than females; similarly people who had taken entrepreneurship course and people who have entrepreneurs in their family have higher entrepreneurial intention, married people have lower risk-taking propensity but higher need for achievement and risk-taking decreases with age. Research outcomes discussed for strategic management and managerial aspects.

Keywords: Entrepreneurial intentionentrepreneurial characteristicsinnovativenessentrepreneurs in the familyentrepreneurship education

Introduction

Market dynamism and chaos constitute a continuous challenge for the established firms and an opportunity for the newly established ventures. Benefits of successfully established and managed entrepreneurial ventures are tremendous for the society: with substantially increasing growth, employment and innovation these companies are seen as remarkable cures for recessed economies of our century. In general, most of the new ventures fails within a few years after their establishment. Therefore, in order to provide sustainable performance and growth, start-ups need to be managed by well-educated talented human capital. Accordingly, for successfully managing risks of penetration and survival in highly competitive markets, new firms need to develop brand new technologies, processes or services; so they try to innovate (e.g. Kilic, Ulusoy, Gunday, & Alpkan, 2015). By creating diversity in goods and services, they do not only strengthen their competitive position but also they stimulate economic performance of their countries (Valliere & Peterson, 2009). Furthermore, newly founded firms decrease unemployment with creating new opportunities for job seekers (Masuda, 2006). Then, the question arises, if entrepreneurship is such a valuable tool for economic welfare and if well-educated and talented people can sustain this welfare, how can we boost entrepreneurial tendencies of university students and graduates and encourage them to choose an entrepreneurial career? If well educated people do not choose to become entrepreneurs societal prosperity will be under question.

Analyzing individuals’ thought processes, differentiating entrepreneurial-minded people from others, recognizing personality characteristics of entrepreneurs should be initial steps in revealing latent entrepreneurs and promoting entrepreneurship. Factors that drive, motivate and enable people to become entrepreneurs are diverse; exposure to entrepreneurship either from personal experiences or media (Baron, 2004), cultural setting (George & Zahra, 2002), environmental factors e.g. availability of capital, personality characteristics, demographic factors and educational background; all can stimulate entrepreneurial thinking. In this research we measured presence of four entrepreneurial characteristics, namely; need for achievement, innovativeness, propensity to take risks, need for autonomy in addition to entrepreneurial intention of our sample which consists of people with different ages and gender. We also evaluated differences of people who have entrepreneurs in their family and who took entrepreneurship course earlier in their career to those do did not. Lastly, we discussed managerial implications and future research suggestions.

Literature Review and Theoretical Framework

In the recent literature there is an established support for the linkage of entrepreneurial intention to some entrepreneurial characteristics (e.g. Saral & Alpkan, 2017) however demographical and other possible factors behind them also need to be explored

Entrepreneurial Intention

Intention can be described as the plan or the imagination of things to be performed by the individual in the future. Intention is distinct from random imagination and thinking since it is prerequisite step for planned behaviour (Ajzen, 1991) and leads to action e.g. forming a company. Entrepreneurial intention is a well-known, popular and reliable construct frequently adopted in empirical studies in entrepreneurship research. It is a practical way to interpret why some decide to follow an entrepreneurial career while others do not. Approaches for resolving entrepreneurial intention most commonly assess contingency, environmental and/or personality factors. However various other variables like demographics, educational background, entrepreneurs in the family can also matter.

Entrepreneurial Characteristics

A long list of personality traits is associated with entrepreneurs. Some earlier researchers proposed to abandon studying entrepreneurial personality and traits due to inconsistent results (Brockhaus & Horwitz, 1986; Gartner, 1989). However, some other trait studies found significant differences between entrepreneurs and other groups for a shorter list of personality traits (Zhao, Seibert, & Lumpkin, 2010).

Need for achievement

McClelland’s (1961) Acquired Needs Theory suggested that need for achievement is one of the major drivers of human motivation. According to him it is a considerable factor for people to act entrepreneurially. Individuals with high need for achievement do not feel satisfied with completing ordinary tasks and having usual successes. They aim to be better and more recognized than their colleagues and peers. These people often set high personal targets for themselves and in case of failures they take responsibility. Entrepreneurs believed to possess high need for achievement and related studies and meta analyses found evidence about their difference from other professional groups e.g. managers (Collins, Hanges, & Locke, 2004; Stewart Jr & Roth, 2004; Alpkan, Keskin, & Zehir, 2002).

Innovativeness

Innovativeness is becoming more and more critical for survival of companies in these turbulent times. Compared to incumbent firms, newly founded firms’ entrance to a market requires competitive power which they obtain from more efficient, better functioning, superior outputs. For this reason, start-ups need to be associated with innovation. Researches about innovativeness found entrepreneurs and entrepreneurially inclined people show this specific characteristic more than others (Chye Koh, 1996; Johnson, 1990; Robinson, Stimpson, Huefner, & Hunt, 1991).

Need for Autonomy

People with high need for autonomy dislike requirements of getting approvals and/or orders from their superiors in the workplace. Their desire to avoid constraints and limits lead them to independence-favouring careers such as entrepreneurship. Several other authors linked need for autonomy with entrepreneurs. For example, according to Baum, Frese, and Baron (2014) an entrepreneurial-minded person may prefer to work harder independently in order not to be obliged to work under a boss. And BarNir, Watson, and Hutchins (2011) stated that possibility to act independent is one of the fundamental rewards in entrepreneurship.

Risk Taking Propensity

From the initial definitions to contemporary studies, risk taking has always been associated with entrepreneurship. Because choosing to start a company inherently includes unavoidable risks to individual’s finances, relationships, mental health etc. Unsurprisingly researchers (e.g. Nieß and Biemann, 2014) found that risk taking has a predictive value for self-employment. Studies comparing entrepreneurs and control groups stressed significant differences in their risk taking propensities (Herranz, Krasa, & Villamil, 2015; Kan & Tsai, 2006).

Demographics

Gender

Number of female entrepreneurs are continuously growing, and studies related to gender are increasingly relevant (Chowdhury & Endres, 2005; Fischer, Reuber, & Dyke, 1993). Nevertheless, entrepreneurship is still commonly seen as a male arena (Wilson, Kickul, & Marlino, 2007). Researchers found differences among males and females in their entrepreneurial intent and characteristics. (Endres, Chowdhury, & Alam, 2008; Gatewood, Shaver, Powers, & Gartner, 2002). So, our initial hypotheses are:

H1a: Men have higher entrepreneurial intention than women.

H1b: Men’s entrepreneurial characteristics are higher than women’s.

Marital Status

Marriage can have effects on people’s concerns, values and priorities. It is a decision for a way of life. Additionally, it also changes responsibilities and decisions especially pertaining to the financial aspects of one’s life. Due to risks associated with entrepreneurship e.g. possibility of losing all the savings, a married person may doubt to invest money to risky projects considering the future of his or her family. Single people may feel easier to assume such risks (Grable, 2000; Lazzarone, 1996; Sung & Hanna, 1996). Therefore, our second hypothesis is:

H2: Married people’s risk-taking propensity is lower than singles.

Age

As people get older they may cultivate different points of view about life and their career. People may think more conservatively about their capabilities and visions. As a result, they may become uninterested in taking substantial risks requiring extra time and energy to manage these risks and recover losses. Some earlier studies concluded that older people were more risk-averse than younger ones. (Kanodia, Bushman, & Dickhaut, 1989; Riley Jr & Chow, 1992; Vroom & Pahl, 1971) So our third hypothesis is:

H3: Older people’s risk-taking propensity is lower than younger people.

Education and Relatives

Entrepreneurship Course

Growing importance of entrepreneurship initiated and popularized entrepreneurship teaching programs across the globe. These programs can provide insight for latent or nascent entrepreneurs. According to Mueller (2011) questions about relations between having entrepreneurial training and having increased entrepreneurial intention already belong to the past where the relationship is already proven, consequently researches can focus on increasing effectiveness of the programs. Moreover the linkage training and characteristics need to be explored. Respectively our hypotheses are:

H4a: People who had already taken entrepreneurship course have higher entrepreneurial intention than others.

H4b: People who had already taken entrepreneurship course have higher entrepreneurial characteristics than others.

Entrepreneurial Relatives

Although most studies examined family and business as separate institutions, growing number of researches emphasized that they are interconnected (Aldrich & Cliff, 2003). Starting up a business can be seen as an individual decision however having an entrepreneur in the family may have an impact on the former’s thoughts, observations, and opportunity recognition where the entrepreneur can be seen as a role model. Therefore, our last hypothesis is:

H5: People who have entrepreneurs in their family have higher entrepreneurial intention than others.

Research Method

Measurement

For the measurement of entrepreneurial intentions, the scale developed by Linan and Chen (2009) is used. In order to measure risk propensities, scale used by Koh (1996) in his assessment of MBA students’ entrepreneurial characteristics is adopted. Remaining characteristics, namely; need for achievement, innovativeness and need for autonomy are evaluated with the scales developed by Özer (2017) in her PhD thesis.

Sample and Data Collection

For the reasons of accurate data collection, ease of delivery and creation; data is collected with an internet survey (Balch, 2010). It is distributed via email lists of numerous universities across Turkey with the help of contacts in associated universities. This allowed us to form a sample consisting of university students and university graduates with different backgrounds. Alumni networks are also included; hence our sample also covers graduates and differs in age.

Analyses and Results

Descriptive Statistics

Table 1 -
See Full Size >
Table 2 -
See Full Size >
Table 3 -
See Full Size >

Majority of the sample are single (68.7%) and males (82.2%). Only 32.6 % of the respondents appeared to have entrepreneurship course in their career. Again only 175 out of 607 participants reported that they have entrepreneurs in their core family. Sample mostly consists of people aged between 20-25 years (%57.5). In brief most (about two third) of our respondents seem to be young and single males which did not taken entrepreneurial courses and entrepreneur relatives in their family (as seen in Tables 1 , 2 , 3 ).

Correlation Analysis

Table 4 -
See Full Size >

Correlation analysis showed that all of the assessed entrepreneurial characteristics are positively related to each other and also to the entrepreneurial intention significantly (p<0.01). Risk propensity seems to be mostly correlated characteristic with the entrepreneurial intention, while need for achievement seems to be relatively the least correlated one with this intention. Again risk-taking propensity showed this time a negative correlation with age (r= -0,135) which is also significant at p<0.01 as hypothesized. This means that as age increases risk taking propensity decreases (H3 supported). Meanwhile another finding that has come out about age is its positive correlation with need for achievement at p<0.05. This means as age increases need for achievement increases too as a non-hypothesized relation (as seen in Table 4 ).

T-Tests

Gender

Table 5 shows, according to the t tests conducted to uncover differences between the mean scores of men and women, that entrepreneurial intentions are significantly different (p value of 0.001 and t-value of 3.479). Males reported higher entrepreneurial intention (mean= 3.54 out of 5) than females (mean= 3.13) (H1a supported). As for entrepreneurial characteristics, only need for autonomy indicated slightly significant difference between men (mean= 3.89) and women (mean= 3.73) in such a way that men’s need for autonomy is a bit higher (H1b partially supported). In brief men seem to be more inclined to pursue an entrepreneurial career path and need to feel more independent when compared to women. No significant difference was found about the other characteristics.

Table 5 -
See Full Size >

Marital Status

Table 6 depicts the results of the t-tests conducted to discover differences between single and married respondents, considering their mean scores in entrepreneurial intention and characteristics. This comparison showed that mean risk-taking scores of singles came out to be higher than married participants as expected with p<0.005 and t-value 2.791 (H2 supported). Moreover, as a non-hypothesised finding, need for achievement scores of married people appeared to be higher than single respondents with p<0.003 and t-value -2.962. No significant difference was found about the other entrepreneurial characteristics and about

the entrepreneurial intention.

Table 6 -
See Full Size >

Entrepreneurship Course

Table 7 -
See Full Size >

Table 7 exhibits the results of the t-tests conducted to discover differences between those respondents who have already taken any entrepreneurial course and those who did not, considering their mean scores in entrepreneurial intention and characteristics. As predicted, respondents who had enrolled previously in an entrepreneurship course showed higher entrepreneurial intention with p<0.001 and t-value of 3.415 (H4a supported). Additionally, these people displayed higher risk-taking propensity with p<0.001, t value of 4.651 and higher innovativeness with p<0.04, t value of 2.059 (H4b partially supported). No significant difference was found about the needs for achievement and autonomy.

ANOVA

Table 8 -
See Full Size >

We collected entrepreneur family member data in open ended form. Followingly, we categorized them and made the distinction between close family members (mother, father, brother, sister) and more distant ones (uncle, aunt etc.). Then we run ANOVA and found significant difference between three group means; namely, (1) people who do not have entrepreneurs in their entire family, (2) people who have entrepreneur(s) among their first-degree relatives, and (3) people who have entrepreneurs among their second-degree relatives.

Post-hoc test of Tukey HSD revealed that people who have entrepreneurs among their close family members have significantly more entrepreneurial intention than people who don’t have any entrepreneurs in their family.

Table 9 -
See Full Size >

Conclusion and Discussions

Summary of the findings

Our analysis emphasizes entrepreneurial intention and entrepreneurial characteristics can vary greatly according to demographic variables- age, gender and other variables like – exposure to entrepreneurial education and entrepreneur family members. Males displayed higher entrepreneurial intent than females. People who had entrepreneurial course during their careers also appeared to have higher entrepreneurial intention, risk-taking propensity and innovativeness than who hadn’t. Risk-taking propensity came out to decrease with age. Singles displayed higher risk-taking propensity than married. Beyond hypotheses, some other significant findings also came out in a such a way that specifically need for achievement increases with age and it is higher in married people. Following table summarises the findings and status of the proposed hypotheses.

Table 10 -
See Full Size >

Managerial implications

In today's global competitive environment, businesses face scarcity in talent. For this reason, managing human resources effectively is an undeniable necessity for sustaining competitive advantage. Managers should be conscious about their employees’ intentions and characteristics and assign them tasks accordingly. As for the managers in established private companies talent attraction and retention within the company is a must; intrapreneurs should be appreciated and compensated for their work to keep them motivated. As for the public policy makers responsible from developing entrepreneurship and start-ups, supporting those talented people who can initiate and run successful start-ups is another must. Particularly for start-ups where every member of the organization has a key role, employee turnover can hurt company’s strategies and outlook. In both cases researchers should provide indicators and drivers of individuals’ entrepreneurial intentions and characteristics.

Policies of retention of intrapreneurs within the company and policies of support for entrepreneurship & start-ups seem to be conflicting with each other in theory. However they share the same principles of discovering and developing entrepreneurial minded human capital in common; therefore uncovering drivers of entrepreneurial intention and entrepreneurial characteristics may help both policies. In this concern, based on our findings about differences, we can induce that promising candidates for entrepreneurship seem to be those people who are young and male candidates (since their risk propensity, need for autonomy and entrepreneurial intention are higher) who have entrepreneur relatives and have already taken entrepreneurship course. Specifically, for women (since their entrepreneurial intention is lower), married people (since their need for achievement is higher but risk taking propensity is lower) and elderly people (since their need for achievement is higher) intrapreneurship may be a better career path.

Future Research Implications and Conclusion

Miscellaneous factors can have an impact on people’s perception of and orientation to entrepreneurship. These factors (e.g. income level, gender, age, education, marital status, culture, size of the family, birth place etc.) can have numerous effects on people’s intent to become an entrepreneur. In some other cultural settings, other contingency variables may also intervene. Further researchers should count these aspects and consider longitudinal and cross-cultural studies or other methods for more direct and causal linkages.

As a conclusion, entrepreneurial characteristics which seem to be more supportive for starting a new business are need for autonomy and relatively higher propensity for risk taking, and those more convenient for intrapreneurship are need for achievement and relatively lower propensity for risk taking. As for the first category of characteristics, the talent pool should include primarily younger men who have taken entrepreneurship course(s) and who have entrepreneur relative(s). As for the second category of characteristics, the talent pool should include primarily older and married men or women who may work as if they are entrepreneurs within an already established workplace but without taking individual risks. For both cases innovativeness is a must.

References

  1. Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179-211.
  2. Aldrich, H. E., & Cliff, J. E. (2003). The pervasive effects of family on entrepreneurship: Toward a family embeddedness perspective. Journal of Business Venturing, 18(5), 573-596.
  3. Alpkan, L., Keskin, H., & Zehir, C. (2002). Girişimcilik Hisleriyle Girişimcilik Potansiyeli Arasındaki İlişki: Gebze ve Civarındaki Girişimciler Üzerine Bir Saha Araştırması. Yüzyılda KOBİ’ler: Sorunlar, Fırsatlar ve Çözüm Önerileri Sempozyumu.
  4. Balch, C. V. (2010). Internet survey methodology. Cambridge Scholars Publishing.
  5. BarNir, A., Watson, W. E., & Hutchins, H. M. (2011). Mediation and moderated mediation in the relationship among role models, self‐efficacy, entrepreneurial career intention, and gender. Journal of Applied Social Psychology, 41(2), 270-297.
  6. Baron, R. A. (2004). The cognitive perspective: a valuable tool for answering entrepreneurship's basic “why” questions. Journal of Business Venturing, 19(2), 221-239.
  7. Baum, J. R., Frese, M., & Baron, R. A. (2014). Born to be an entrepreneur? Revisiting the personality approach to entrepreneurship. In The psychology of entrepreneurship (pp. 73-98): Psychology Press.
  8. Brockhaus, R. H., & Horwitz, P. (1986). The psychology of the entrepreneur. Entrepreneurship: critical perspectives on business and management, 2, 260-283.
  9. Chowdhury, S., & Endres, M. (2005). Gender difference and the formation of entrepreneurial self-efficacy. Paper presented at the United States Association of Small Business (USASBE) Annual Conference, Indian Wells, CA.
  10. Chye Koh, H. (1996). Testing hypotheses of entrepreneurial characteristics: A study of Hong Kong MBA students. Journal of Managerial Psychology, 11(3), 12-25.
  11. Collins, C. J., Hanges, P. J., & Locke, E. A. (2004). The relationship of achievement motivation to entrepreneurial behavior: A meta-analysis. Human performance, 17(1), 95-117.
  12. Endres, M. L., Chowdhury, S. K., & Alam, I. (2008). Gender effects on bias in complex financial decisions. Journal of Managerial Issues, 238-254.
  13. Fischer, E. M., Reuber, A. R., & Dyke, L. S. (1993). A theoretical overview and extension of research on sex, gender, and entrepreneurship. Journal of Business Venturing, 8(2), 151-168.
  14. Gartner, W. B. (1989). Some suggestions for research on entrepreneurial traits and characteristics. Entrepreneurship Theory and Practice, 14(1), 27-38.
  15. Gatewood, E. J., Shaver, K. G., Powers, J. B., & Gartner, W. B. (2002). Entrepreneurial expectancy, task effort, and performance. Entrepreneurship Theory and Practice, 27(2), 187-206.
  16. George, G., & Zahra, S. A. (2002). Culture and its consequences for entrepreneurship. Entrepreneurship Theory and Practice, 26(4), 5-8.
  17. Grable, J. E. (2000). Financial risk tolerance and additional factors that affect risk taking in everyday money matters. Journal of Business and Psychology, 14(4), 625-630.
  18. Herranz, N., Krasa, S., & Villamil, A. P. (2015). Entrepreneurs, risk aversion, and dynamic firms. Journal of Political Economy, 123(5), 1133-1176.
  19. Johnson, B. R. (1990). Toward a multidimensional model of entrepreneurship: The case of achievement motivation and the entrepreneur. Entrepreneurship Theory and Practice, 14(3), 39-54.
  20. Kan, K., & Tsai, W.-D. (2006). Entrepreneurship and risk aversion. Small Business Economics, 26(5), 465-474.
  21. Kanodia, C., Bushman, R., & Dickhaut, J. (1989). Escalation errors and the sunk cost effect: An explanation based on reputation and information asymmetries. Journal of Accounting research, 59-77.
  22. Kilic, K., Ulusoy, G., Gunday, G., Alpkan, L. (2015). Innovativeness, operations priorities and corporate performance: An analysis based on a taxonomy of innovativeness. Journal of Engineering and Technology Management, 35, 115-133
  23. Lazzarone, B. G. (1996). The economic well-being of rural Nevada elders.
  24. Linan, F., & Chen, Y. W. (2009). Development and Cross-Cultural Application of a Specific Instrument to Measure Entrepreneurial Intentions. Entrepreneurship Theory and Practice, 33(3), 593-617. doi:10.1111/j.1540-6520.2009.00318.x
  25. Masuda, T. (2006). The determinants of latent entrepreneurship in Japan. Small Business Economics, 26(3), 227-240.
  26. McClelland, D. C. (1961). Achieving society (Vol. 92051): Simon and Schuster.
  27. Mueller, S. (2011). Increasing entrepreneurial intention: Effective entrepreneurship course characteristics. International Journal of Entrepreneurship and Small Business, 13(1), 55-74.
  28. Nieß, C., & Biemann, T. (2014). The role of risk propensity in predicting self-employment. Journal of Applied Psychology, 99(5), 1000.
  29. Özer, A. (2017). İç gi̇ri̇şi̇mci̇leri̇n örgütsel bağliliğini etkileyen faktörler:Giri̇şimci̇ Özelli̇kleri̇ ve İç gi̇ri̇şimci̇li̇k i̇kli̇mi̇. (Ph.D), Beykent University,
  30. Riley Jr, W. B., & Chow, K. V. (1992). Asset allocation and individual risk aversion. Financial Analysts Journal, 48(6), 32-37.
  31. Robinson, P. B., Stimpson, D. V., Huefner, J. C., & Hunt, H. K. (1991). An attitude approach to the prediction of entrepreneurship. Entrepreneurship Theory and Practice, 15(4), 13-32.
  32. Saral, H. C., & Alpkan, L. (2017). The Relationship Between Entrepreneurial Characteristics and Entrepreneurial Intention. Paper presented at the Ismc 2017: 13th International Strategic Management Conference.
  33. Stewart Jr, W. H., & Roth, P. L. (2004). Data quality affects meta-analytic conclusions: a response to Miner and Raju (2004) concerning entrepreneurial risk propensity.
  34. Sung, J., & Hanna, S. (1996). Factors related to risk tolerance. Journal of Financial Counseling and Planning, 7, 11.
  35. Valliere, D., & Peterson, R. (2009). Entrepreneurship and economic growth: Evidence from emerging and developed countries. Entrepreneurship & Regional Development, 21(5-6), 459-480.
  36. Vroom, V. H., & Pahl, B. (1971). Relationship between age and risk taking among managers. Journal of Applied Psychology, 55(5), 399.
  37. Wilson, F., Kickul, J., & Marlino, D. (2007). Gender, entrepreneurial self‐efficacy, and entrepreneurial career intentions: implications for entrepreneurship education. Entrepreneurship Theory and Practice, 31(3), 387-406.
  38. Zhao, H., Seibert, S. E., & Lumpkin, G. T. (2010). The relationship of personality to entrepreneurial intentions and performance: A meta-analytic review. Journal of Management, 36(2), 381-404.

Copyright information

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

About this article

Publication Date

18 December 2019

eBook ISBN

978-1-80296-053-2

Publisher

Future Academy

Volume

54

Print ISBN (optional)

-

Edition Number

1st Edition

Pages

1-884

Subjects

Business, Innovation, Strategic management, Leadership, Technology, Sustainability

Cite this article as:

Alpkan, L., & Saral*, H. C. (2019). Differences In Entrepreneurial Intention And Characteristics According To Demographics And Other Factors. In M. Özşahin, & T. Hıdırlar (Eds.), New Challenges in Leadership and Technology Management, vol 54. European Proceedings of Social and Behavioural Sciences (pp. 364-376). Future Academy. https://doi.org/10.15405/epsbs.2019.01.02.32