The Determinants of Entrepreneurial Intention of Employees in Turkey

Abstract

Entrepreneurship has gained an increasing popularity in Turkey. Entrepreneurial intention is increasing among young generations. Entrepreneurs, especially female entrepreneurs are supported by government and NGO’s. Also there is a change in society values on the continuum between traditional and modern. The increase in modern values is expected to increase entrepreneurship as well. The aim of this study was to explore the determinants entrepreneurial intention of employees in Turkey. Based on literature it is suggested that generation, gender and society values will have impact on the entrepreneurial intention. Data collected form a sample of 1363 working employees from Istanbul were analyzed and results indicated male and GenY employees have more entrepreneurial intentions as expected. When society values were analyzed, originally unidimensional scale, emerged into two factors as modern and traditional. All participants had both modern and traditional values however modern values were higher. Interestingly employees with high traditional values had more entrepreneurial intention than employees with modern values. Interactive effect of these variables and also some other demographical variables were also tested and showed significant results. We hope our results will provide useful implications for policy makers.

Keywords: Gendergenerationentrepreneurial intentionmodern-traditional values

Introduction

Entrepreneurship has been perceived as one of the main building blocks of economic growth for a long time and governments and NGOs have been supporting entrepreneurs by providing funds and training. Universities also have been involved in developing entrepreneurial mind-set through entrepreneurship courses, and centers. Entrepreneurship has a strategic effect on Turkish economy and Turkey’s performance is above the EU average on entrepreneurship (European Commission SBA Fact Sheet, 2017). According to Global Entrepreneurship Report (Bosna & Kelley, 2018) over 80 % of people think highly of entrepreneurship as a career in Turkey, and besides the United States, Turkey demonstrates high growth expectations among entrepreneurs and has the potential to contribute substantially to employment. Hence entrepreneurship has been for long a topic of interest for research around the world and Turkey (Arıkan, 2002; Brazeal & Herbert, 1999; Börü, 2006; Gartner, Shaver, Gatewood, & Katz, 1994).

The studies on entrepreneurship mostly focus on personality factors such as risk-taking propensity (Forlani & Mullins, 2000; Macko & Tyszka, 2009), self-efficacy (Chen, Greene, & Crick, 1998), need for autonomy (Douglas & Shepherd, 2002) and similar, and contextual factors such as structural support, the cultural and institutional environment (Davis, 2002; Kelley, Singer, & Herrington, 2012), relational support, the sentimental and monetary supports of family and friends (Liñán & Chen, 2009; Türker & Selçuk, 2009), and educational support (Franke & Lüthje, 2004; Moriano, Gorgievski, Laguna, Stephan, & Zarafshani, 2012). A cross-cultural approach to understanding entrepreneurial intention. Lately the studies concentrate more on demographic, cultural and generational differences as well (Ensari, 2017; Malach Pines, Lerner, & Schwartz, 2010; Shinnar, Giacomin, & Janssen, 2012).

The aim of present study was to identify the determinants of entrepreneurial intention of employees in Turkey. Mainly the effect of society values, and generations is investigated together with demographic variables, gender marital status and having children or not.

Literature Review and Theoretical Framework

Society Values

Entrepreneurs are seen as individuals with different and unusual characteristics (Chell, Haworth, & Breaeley, l99l). With this respect, many entrepreneurship researches are designed to reveal the characteristics of the entrepreneurial individual. Although the personality structure of the individual preserves its innate characteristics, it is shaped by the socio-cultural environment in which it lives (Ersoy, 2010). From this point of view, as well as the examination of the personality traits of entrepreneurial individuals, exploring the culture, tradition and value systems will help clarifying the subject. Therefore one should investigate family, groups and social environment and dynamics, the nature of social control, the power of state or collective structures to understand the nature of entrepreneurial individuals more deeply. The structural conditions of society, value and norm systems can directly affect the formation of any behavior. Individuals remain under the great influence of the social structure in which they are regulated. The socio-cultural environment forms people's thinking patterns in the formation of the thought and the world. Each social structure, a certain type of people, thinking and living style, how and how to behave in a stereotypical model offers and individual preferences do within these patterns. In this context, we can say that entrepreneurship also has a close relationship between social / cultural structures and the dominant forms of social relations in society are effective in determining openness or closeness to entrepreneurship (Aytaç, 2006).

Society directs or prepares people against a particular role. Society's value and role sets have binding implications for individuals. The dominant values ​​and norms in social structures direct human relations, life styles, and thinking and perception systems. Each social structure offers stereotyped models, a particular type of human, with certain thinking and lifestyle. In this way, the individual becomes a generally accepted personality by entering into approved situations. It can be said that the emergence of social action patterns is in close relation with the institutions within the social structure. The most influential among these institutions is the family. Particularly in patriarchal family structures, the effect of the family is much more decisive on parents' strict control and obedience culture behavior patterns (Jahoda, 1993). Patriarchal structures are generally closed to the outside, and due to the power of traditional control, family members establish relations based on familiar, known, similarity. In this structure, openness to innovation, targeting individual success, dynamic, productive, risk-taking, such as entrepreneurial values ​​are not encouraged (Yelken, l999).

Since decisions in such family structures are taken without consulting the father and other family members, there is no support for the courage and actions to reveal entrepreneurship, and the desire for success in individuals disappears (Güney & Çetin, 2003). Consequently, the traditional family order is a social unit that is open to the anti-entrepreneur types. In the literature, the impact of family Arıkan (2002), paternalism Aycan (2001) and centralized autocratic structure Arslan (2001) on entrepreneurship in Turkey have been considered.

On the other hand, it can be said that entrepreneurship is rooted in more individualistic / libertarian socio-cultural structures. As these structures are open to low social control and free enterprise culture, individuals have the chance to develop their personal potential by having the opportunity to express themselves freely (Aytaç, 2006). Contrary to the traditional family order, these structures are also defined by modernity. It is stated that modern attitudes and values ​​are related to industrialization and are functional to live in industrial society. For example, values ​​and attitudes such as openness to new experiences, independence from parental authority, interest in and participation in civic activities, and time relatedness are associated with modernity (Kağıtçıbaşı, 1988). Kağıtçıbaşı (2007) lists the characteristics related to traditional and modern society values in comparison to the family institution. According to her description the ones who have traditional society values will have mutual economic and psychological commitment, transfer of financial resources to parents, strong family lineage ties, low female status, high fertility and high expectancy of boys, the value of usefulness of the child (economic value; security of old age; material expectations from the child), authoritative parenting, rural / agricultural living conditions, and low welfare level.

Whereas according to Kağıtçıbaşı (2007) the ones who have modern society values will have mutual economic and psychological independence, transfer of financial resources to the child, strong core family ties, high female status, low fertility and low expectancy of boys, psychological value of the child, free, independent child upbringing, urban / industrialized / technological living conditions, and welfare society. Value and perception parameters related to modernity feed the personality structures to a great extent and produce efficiency and efficiency oriented attitude / behavioral measures. In this context, the entrepreneurial self is a representative configuration of modernity. In other words, entrepreneurship is seen as one of the defining figures of modernity (Ayata, l991).

​​ Wagner (1996) argues that modernity itself has built a self-identity within its own dynamics. According to Wagner (l996), rationality, competition, unlimited production, efficiency and efficiency ultimately produce an entrepreneurial self which plays an instrumental role in perceiving modernity. Wagner states that the entrepreneurial self, broadens the scope of self-realization by creating new opportunities and paves the way for structural changes in society. Entrepreneurial individuals naturally have to adapt themselves to the rhythm of the market, as they have to actively participate in determining their own lives and social positions in a social context that is constantly on the move. The entrepreneurial self takes shape in this constantly changing and flowing environment (Aytaç, 2006). Thus, based on literature we hypothesized

H1: The higher the traditional society values of an individual the less will be his/her entrepreneurial intentions.

H2: The higher the modern society values of an individual the less will be his/her entrepreneurial intentions.

Generations

In recent years, the generations are frequently discussed and studied. The generations have been on the agenda of the business literature for the first time since the period of the famous baby boomers after the Second World War. Considering the fact that there are seven different generations living together due to prolongation of life spans, the necessity of these discussions and studies can be understood.

Generations are cohort-groups who have similar values, ideas and attitudes with common experiences of living in the same timeframe. Although sources disagree on the specific dates separating the generations from each other, there is generally a consensus on approximate time lines and generation names as: G.I. Generation or the Greatest Generation born between 1901 and 1924, this generation experienced profound economic and social turmoil, World War I and eventually fought in World War II; the Silent Generation born between 1925 and 1945, experienced the Great Depression and lived through the world wars, in Turkey the Republic Generation; the Baby Boomers born between 1946 and1964, lived the cold war and the human rights movement, in Turkey lived revolution and the multiparty era; the Generation X or GenX born between 1965 to 1979, lived oil crisis in the world, the continuation of the Cold War, in Turkey lived through the left-right conflict; the Generation Y, GenY or sometimes called the millennials born between 1980 and 2000 lived during the Gulf War in Iraq, September 11, and Globalization, in Turkey lived during terrorism, and military coup period, lived both welfare and crisis; Generation Z, or GenZ born between 2001 and 2010, lived after terrorism, global recession, climate change, in Turkey experienced increase in conservatism and the last, Generation alpha born after 2010 and expected to born until 2025, these are the children of millennials (Adıgüzel, Batur, & Ekşili, 2014; Kelan, 2014; Lyons & Kuron, 2014). It is observed that countries, apart from intercultural differences have roughly similar generations. Especially in today's active business life, generations started to experience similar technological developments which separates cohorts from each other but impose resemblances within cohorts. Hence we can name the baby boomers, GenX, and GenY and the GenZ as radio, television, computer and Internet generations respectively.

When the generations are considered from organizations’ point of view, the baby boomers are seen as a generation with a high sense of loyalty and a long-lasting satisfaction and happiness at the same workplace. However, these people have been withdrawn or about to withdraw from business life as retirement ages are coming. The X generation contributes to good career opportunities, contributes to a business environment with a high level of motivation, respect for authority Again with the generation X, there was a rapid increase in women's labor force participation rates. (Dixon, Mercado, & Knowles, 2013; Sparks, 2012) The Y generation has quite different values ​​and expectations. Especially technology is a must for GenY employees. GenY people are individualist and entrepreneurs (Holt, Marques, & Way, 2012). It is known that this generation does not like to work, they like to enjoy fun and win, they consume fast, they have high expectations (but they do not want to pay the price). It is known that since GenY did not witness the times of economic crisis they believe “everything was always like this and will be like this” (Alexander & Sysko, 2013; Kuyucu, 2014; Yüksekbilgili, 2013). We do not yet have the opportunity to observe what will the Z generation do in business life.

There is not enough evidence in literature indicating differences in generations’ entrepreneurial intentions. However the limited studies conducted to compare Baby boomers, GenX and GenY generally showed Y Generation is more inclined towards entrepreneurship compared to former generations (Akdemir & Konankay, 2014; Keleş, 2013; Mihalcea, Mitan, & Vitelar, 2012; Oxygenz Report, 2010). When we analyze the characteristics of Gen Y employees, due to their need to express themselves creatively and independently and their higher tendency to take risk, their being more oriented to entrepreneurship seems significant. Hence, we hypothesized

H3: GenY employees will have higher entrepreneurial intentions compared to GenX employees.

Demographics

As previously stated entrepreneurship studies give attention to variances between demographics. Particularly, gender differences in entrepreneurial characteristics and performance has received considerable attention since 1980’s (Fischer, Reuber, & Dyke 1993; Hisrich & Brush, 1984). Males in general are found to have higher entrepreneurial intentions (Markussen & Roed, 2017; Navarro & Jimenez, 2016). Females found to have barriers that keep them from being entrepreneurs as some cultural and social archetypes. Males are given more chance to experiment with their careers, while females are restricted by family responsibilities. However some studies indicate in low income countries females’ entrepreneurial intentions increase as females have no other option for making a living even if female entrepreneurs are less compared to males (Crant, 1996; Malach-Pines, Lerner, & Schwartz, 2010). Based on previous findings we hypothesized

H4: Male employees will have higher entrepreneurial intentions compared to Female employees.

Other demographics as education, marital status are also studied in literature, though not as much as gender and the finding as are not consistent (Crant, 1996; Ensari, 2017; Kolvereid, 1996; Parker, 2008; Wong, 1986). Therefore we preferred to include education, marital status and having children or not (to see the effect of family responsibilities) as research question and not developed hypotheses.

Entrepreneurship and Entrepreneurial Intention

Shane and Venkataraman (2000) define the field of entrepreneurship as the study of "how, by whom, and with what effects opportunities to create future goods and services are discovered, evaluated, and exploited" (p.218). Entrepreneurial intentions are central to the entrepreneurship since entrepreneurship occurs over time, thus entrepreneurial intentions might be viewed as the first step in an evolving, long term process (Crant, 1996). Understanding of the determinants of entrepreneurial intention is important since entrepreneurial behavior is a result of intention. According to Ajzen (1991), intention refers to “the indication of how hard people are willing to try, of how much an effort they are planning to exert, in order to perform the behavior”. (p. 181). In the context of entrepreneurship, Ajzen’s theory of planned behavior (1991) has been frequently used and empirical studies generally supported the proposed theory for entrepreneurial intention and entrepreneurship relation (Bird, 1988; Douglas & Shepherd, 2002; Kolvereid, 1996; Krueger, Reilly, & Carsrud, 2000; Souitaris, Zerbinati, & Al-Laham, 2007). Since entrepreneurial behavior is intentional, and the stronger the intention, the more likely that a person will perform a particular behavior, many researchers agreed that it can be predicted by entrepreneurial intention. It is also practical to study intention because most of the time actual behavior is difficult to be measured (Krueger & Carsrud, 1993; Wu, 2010). Therefore in this study following the previous empirical studies entrepreneurial intention is measured and the determinants of entrepreneurial intention are investigated.

Research Method

Instrument

A multi-item questionnaire is used, where entrepreneurial intention is measured with Liñán and Chen’s (2009) ten item scale and society values are measured by Yurtkoru and Elber-Börü’s (2017) scale. All the items are measured on a five-point interval scale where “totally disagree” equals 1 and “totally agree” equals 5. In addition to these, to determine the generations of the respondents, their birth year is asked. Other demographic questions included in the questionnaire form were gender, education, marital status, and having children or not.

Sample

Data for this study are collected from 1363 working employees from Istanbul, Turkey. The sample consists of 685 females (50.3%) and 678 males (49.7%). 40.4% of females and 41.3% males are born between 1965 to 1980 and belong to generation X. Whereas 59.6% of females and 58.7% males are born between 1980 to 1998 and belong to generation Y. The education level of the respondents are highly educated with 43.3% university graduates and 10.1% with masters or PhD degrees. Only 14.1% are middle school graduates and 32.5% are high school graduates. The demographics of the sample are given in Table 1 .

Table 1 -
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Findings

Measurement validation

The reliability and validity of the measures are assessed first. Entrepreneurial intention scale confirmed the one factor original scale structure as a result of the confirmatory factor analysis (CFA). Only first item had to be trimmed as it indicated misspecification (Byrne, 2010). This finding is supported by a previous study conducted in Turkey using the same scale (Yurtkoru, Acar, & Samur-Teraman, 2014). Therefore it seems the item “I am ready to do anything to be an entrepreneur” is not working when employed Turkish culture. After eliminating this item fit indices indicated good fit (χ2(5, N=1363)=212.11, p=.00, CFI=0.96, NFI=.95, TLI=.91, SRMR=.05 and RMSEA=0.09). Since in a previous study by Yurtkoru and Elber-Börü (2017) the society values scale was found as two dimensional, contradictory to its original unidimensional construct, exploratory factor analysis (EFA) is conducted prior to confirmatory factor analysis (CFA). To avoid erroneously increasing the fit measures by using the same data set for establishing factor structures and also for confirming the structure, data is randomly divided into two data sets using Bernoulli distribution. Analysis data (N=660) is used for EFA and the holdout data (N=703) is used for CFA. As in the previous study (Yurtkoru & Elber-Börü, 2017) society values scale emerged into two factors as modern and traditional. CFA results confirmed the two dimensional model with higher fit values (χ2(19, N=709)=48.98, p=.00, CFI=0.98, NFI=.96, TLI=.97, SRMR=.04 and RMSEA=0.08). Results can be found in Table 2 .

Table 2 -
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Mean comparison tests

We conducted a series of mean comparison tests to examine the determinants of entrepreneurial intention. The independent samples t-tests results can be found in Table 3 . Results indicated males had more entrepreneurial intentions compared to females (M=3.50, M=3.21, t (1351)=-4.86) and so does GenY respondents had more entrepreneurial intentions compared to GenX respondents (M=3.47, M=3.20,(1086) = -4.26). We also performed independent samples t-tests to compare entrepreneurial intention with respect to marital status and having children or not. Both tests showed significant results, respondent who were single and had no children had higher entrepreneurial intentions (M=3.44, M=3.30,(1361) = -2.40; M=3.42, M=3.30,(1347) = -1.99 respectively)

Table 3 -
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Table 4 -
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Given that society values emerged into two factors as modern and traditional and all participants carried both values, we first divided these variables into two categories with respect to their median scores (3.50 and 2.50 for modern and traditional respectively). Distribution of respondents according to their high and low levels of society values are given in Table 4 . As can be seen from the Table 4 majority of the respondent are either high in modern and low in traditional or low in modern and high in traditional values. Then data is transformed to four categories based on these four quadrants.

Table 5 -
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The one-way ANOVA of entrepreneurial intention with respect to this four categories indicated significant results. According to Scheffe analysis, respondents with high modern + low traditional values had lower entrepreneurial intentions compared to respondents with high modern + high traditional and low modern + high traditional values (See Table 5 ). We also conducted one-way ANOVA test to find out the impact of education on entrepreneurial intention, however the result was not significant.

Figure 1: Society values, generations and gender interactions for entrepreneurial intention
Society values, generations and gender interactions for entrepreneurial intention
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Table 6 -
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To analyze more deeply, and we have investigated the interaction effect of the variables, and performed two-way ANOVA models. As can be seen from Table 6 , when analyzed together society values and generations indicated only main effects but no interaction effect. However when gender is included in the models results showed interaction effect of society values and gender and also generations and gender. The depiction of the mean results are given in Figure 1 and helps to evaluate findings more easily. Since marital status and having children or not have showed significant differences we have also tested the interaction effect of these two demographic variables as well. Results indicated significant main effect of having children and the interaction but not main effect of marital status. Lastly we analyzed these variables separately for females and males and found the results differed by gender. For males only marital status has effect on their entrepreneurial intention. However for females both marital status and children and also the interaction of these variables found to have impact on entrepreneurial intention. Figure 2 indicates the findings visually.

Table 7 -
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Figure 2: Marital status and having children interactions for entrepreneurial intention
Marital status and having children interactions for entrepreneurial intention
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Conclusion and Discussions

As a result of the analyses we found out the level of entrepreneurial intention as moderate. Differences in entrepreneurial intention with respect to demographical values indicated, males have higher entrepreneurial intention than females; GenY employees have higher entrepreneurial intention than GenX employees, single respondents have higher entrepreneurial intention than married respondents and respondents without children have higher entrepreneurial intention than respondents with children. Since entrepreneurship requires risk taking being married and having children makes employees less prone to risk in their lives.

A striking finding was that society values were two factors: modern and traditional. Respondents with higher traditional values had higher entrepreneurial intention and respondents with high modern and low traditional values had lowest entrepreneurial intention than other groups. Males’ entrepreneurial intention is less effected by society values, only High Modern + High Traditional has slightly more intention than other groups. However females are very effected by society values. High traditional ones whether low or high in modern values have significantly more entrepreneurial intentions. And High in modern and low in traditional females has significantly low entrepreneurial intentions. Gen Y males respondents have significantly high entrepreneurial intentions compared to Gen X male respondents. However the main difference is found between females. Gen X females has the lowest entrepreneurial intention compared to Gen Y females and both Gen Y and Gen X male employees. It was not our main questions however we found single mothers have the least entrepreneurial intention compared to other groups. And interestingly married women with children have very high entrepreneurial intentions therefore it looks the real reason of having less intention is not having children but being single mothers. Even though single women without children has the highest intention still married women also have quite high intentions to become entrepreneurs. When we look at male respondents we see males are relatively low compared to single ones.

In summary we can say our hypotheses were supported except the one ones related with society values. Since the scale merged into two factors instead of one, and traditional and modern values were not two opposites on a continuum, we may say the perception of modern and traditional values were different. The traditional values may represent the relational support which can be explained as sentimental and monetary supports of family and friends. The positive impact of relational support was found in previous studies (Liñán & Chen,2009; Türker & Selçuk; 2009; Yurtkoru, Kabadayı-Kuscu, & Doğanay, 2014). Naturally, further study is needed to confirm our results and to test if they are generalizable.

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30 October 2019

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978-1-80296-070-9

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Future Academy

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71

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Business, innovation, Strategic management, Leadership, Technology, Sustainability

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Börü, D. E., & Yurtkoru*, E. S. (2019). The Determinants of Entrepreneurial Intention of Employees in Turkey. In & M. Özşahin (Ed.), Strategic Management in an International Environment: The New Challenges for International Business and Logistics in the Age of Industry 4.0, vol 71. European Proceedings of Social and Behavioural Sciences (pp. 402-415). Future Academy. https://doi.org/10.15405/epsbs.2019.10.02.37