Women And The Economy: Conceptual Model Of Psychological Characteristics Of Successful Entrepreneurs

Abstract

From a broader perspective, women entrepreneurship has been recognized as a key element for current economy to remain survive competitively and attain its paradigm shift for the nation. The existing theoretical understanding that described women’s micro and small entrepreneurs (MSE) need to be expanded to better explain the uniqueness of women entrepreneurship. However, very few studies have been conducted to analyse these fundamental characteristics of women entrepreneurs especially among the micro and small businesses. Understanding their characteristics can be useful for developing successful women’s entrepreneurship policies at the national level. Based on the review of the existing literature, this study proposed four domains that must be analysed to better understand the characteristics of successful women entrepreneurs namely entrepreneur resilience, psychological women empowerment, innovative behaviour and social competence. In view of this, this paper will provide a coherent conceptual framework to analyse the psychological characteristics of successful women entrepreneurs and to analyse the different attributes of these successful women entrepreneurship. The discussion describes the necessary actions to be taken for women development goals to be realised and how women entrepreneur can survive in dealing with massive uncertainties that they will have to face especially in the Industrial Revolution 4.0. In so doing, the proposed conceptual framework acts as a theoretical underpinning that describe the underlying women entrepreneurship.

Keywords: Women entrepreneurial successpsychological characteristicsentrepreneur resiliencepsychological women empowermentinnovative behavioursocial competence

Introduction

The Fourth Industrial Revolution (IR 4.0) which is expected to bring about digitisation and technological disruptions has become one of the main concerns of policy makers. Its effect will transcend almost every business facet and arena especially in terms of the product and service changes that will be offered to the society. In fact, the processes that will be used to generate the products will be effected the most by this technological phenomenon. Consequently, this will sharpen the dynamic of employment, occupation as well as business ventures to survive in new system of global economy. This has been duly recognised by The World Economic Forum through its 2017 Human Capital Report which had identified skills for life as one of the skills that need by the society when the economy wave changes drastically (Berger, 2017). Entrepreneurship has been recognised as one of the important elements of this new economic system and will become the major source of job creation especially among the jobless, the unemployed graduate, and every single person searching for new side income.

Developing a new business endeavours is a very crucial decision taken by any individual. Likewise, it is not a simple task to develop a new start-up entity due to requirement of great effort and well prepared by entrepreneurs. This includes preparing convincing business proposal comprises pro forma financial statements, market studies, production strategy, manpower arrangement, and etc. This has become a major challenge especially for women entrepreneurs in small business. Therefore, in order to achieve the ultimate goal in business which is success, establish a towering personality is an important element to all person including women who involved in entrepreneurship world (Hmieleski, Carr, & Baron, 2015; Chatterjee & Das, 2015; Ayala & Manzano, 2014) especially in IR 4.0. In this enormous uncertainty situation, business survival become the prime concern instead of the greatest financial performance. Moreover, based on Business Information Tracking Series (BITS), half of new business owner unable to survive beyond four years. This figure indicated that something need be done to help the country in overcoming this issue.

The study of women entrepreneurship has received great attention from researchers for almost three decades. United Kingdom France, Iceland, Sweden and etc are among the countries that friendly with women entrepreneurs. Existing literatures suggests that women can play a remarkable role in the larger entrepreneurship environment and the economic development of a nation. The increasing number of a small businesses owned independently by women from all over the world have proved that their contribution cannot be neglected in the economy development. The issue regarding women’s economy involvement and entrepreneurship has been debated in The 1st ASEAN Forum on Fostering Women’s Entrepreneurship. Women has been recognized as one of the critical asset in economy development of Southeast Asia and realization of United Nations 2030 Agenda for Sustainable Development, and the ASEAN Economic Community Blueprint 2025. Thus, it is cannot be denied that women entrepreneur is an important contributor in current economy development. Women entrepreneurship phenomenon in Malaysia is no exception to this. This can be seen beginning from the 6th Malaysia Plan, government has been putting much effort to encourage and develop women entrepreneurship. Consequently, under National Key Result Areas (NKRA) producing women entrepreneur has been one of the focus by the Malaysian government to control the problem associated by Low Income Household (LIH) which is B40 group. A lot of schemes have been provided by government to support this particular group, however, the rate of successful business owned by women still at unsatisfactory level (Alam, Jani, & Omar, 2011). Thus, the study in this area is vital to reduce continuous dependence of government support and increase their business successful.

In this paper we shall provide an overview of the psychological characteristic’s theory, and the role it played in entrepreneur’s success. Within this context, the impact of psychological characteristics as critical construct of entrepreneurial success is discussed. Next, other constructs namely entrepreneur resilience, psychological women empowerment, innovative behaviour and social competence are derived from the literature and the link with women entrepreneurs’ success is explicated. Women entrepreneurs’ success is shown to be related to each of these four major constructs. It is shown that this is the outcome of the interrelations of entrepreneur resilience, psychological women empowerment, innovative behaviour and social competence. Finally, we also offer some suggestion for the development of women entrepreneur development programs based on a newly-defined conceptual model.

Problem Statement

Women entrepreneurships development is still not sufficient in Malaysia (Stillman, 2014). In spite of this, the evolution of entrepreneurs still need to put into consideration regarding the demographic background and psychological factors (Carlos Pinho & Sampaio de Sá, 2014; Olakitan & Ayobami, 2011). Kreiser, Pankaj, and James (2013) recognised that there are still need further investigation regarding characteristics or traits that influence an individual to become an entrepreneur. Women entrepreneurs are still considered as lack of success due to lower business growth among them, despite Shamsul Hana and Norashidah (2015) assertion that they have the potential to be the prime mover in many area of proficiency (Sajilan, Noor Ul, & Shehnaz, 2015). Moreover, Women Director Programme launched by Malaysian government in 2011 which shows that out of 1,093 women being trained between 2012 and 2015, only forty women had been appointed to be board of directors by 2016. Similarly, other study has also mentioned that although lot of funding and assistance provided by government, the rate of successful among women entrepreneurs are still dissapointed (Alam, Jani, & Omar, 2011). This observation is supported by Kallerberg and Leicht (2014) in their comparison study between men and women owned business which indicated that the rate of successful among women are low if compared to men.

Despite many studies have been conducted on entrepreneurship, the number of research regarding successful of women entrepreneurs are still insufficient (Kelley, Singer, & Herrington, 2012; Alam et al., 2011). With regard to Ranasinghe (2012), the attention should be given on factors that lead to the development of women entrepreneurs. In order to enhance knowledge on the subject and produce more successful women entrepreneurs in the future, the study in this area is very crucial. Due to lower successful of women entrepreneur in Malaysia and realising its momentousness to the economic country development, this study shall focus on establishing the traits of successful women entrepreneurs as suggested by previous studies (Stillman, 2014; Rieger, 2012; Ranasinghe, 2012; Alam et al, 2011; Ayala & Manzano, 2010). Furthermore, this study is going to establish the factors of psychological characteristics with regard to the need of renewal characteristics on this theory since there are no regeneration for thirty years (Kerr, Kerr, & Xu, 2017).

Research Questions

Research questions involve in this study are:

• 1.What are the psychological characteristics related to women entrepreneurial success?

• To what extent is the psychological characteristics contributed to women entrepreneurial success?

• What is the appropriate model to represent the factors of successful women entrepreneurs?

Purpose of the Study

The aim of this paper is to identify the theoretical foundation related to psychological characteristics of women entrepreneurial success and to develop a model that outlined women entrepreneurs’ success. In order to achieve this, the specific objectives of this study are as following:

Research Methods

This study performs a systematic literature review using Kitchenham’s (2004) framework. This method is a means of identifying, evaluating and interpreting all research that are available and relevant to particular research questions, topic area and circumstance of interest. The main reason for undertaking this systematic literature review because we can summarise the empirical evidence of the benefits and gaps of current research related to this study area. The information gathered may provide a framework or background in order to be appropriately position in new research activities.

In this section we describe how systematic review conducted in the study. The first phase involves the process to define the purpose and procedures for the review. Our motivation for examining these research questions was to provide evidence about the initial needs of women entrepreneur success. A better understanding of the need of successful women entrepreneur in the country and their constraints can lead the researchers to improve the approach for women entrepreneur development.

After completing and agreeing on the review protocol, the systematic review was conducted. This phase involves the initial search record, the list of selected publications, records of quality assessment and extracted data for each selected publication. A formal search strategy is used to find the relevant publications to the research questions of the study. For initial selection of publication, we read and considered the title and abstract of these publications. Those irrelevant publications were excluded from the study. In the final selection from among initial selection result, we also read and consider the body of the paper. When data has been extracted, the data synthesis was conducted by grouping and summarised the data to make it clear on research questions. During data extraction, it also become clear that the individual women entrepreneur success is different from men in terms of their psychological characteristics.

Findings

The proposed conceptual model is drawn after reviewing the literature regarding psychological characteristics of entrepreneur namely entrepreneur resilience, psychological women empowerment, innovative behaviour, social competence and entrepreneur success. The above literature has clearly indicated that there is positive relationship between psychological characteristics on entrepreneur success. The literature also highlighted that entrepreneur success as a dependent variable and psychological characteristics as independents variables. Therefore, based on the review of relevant literature, in this proposed conceptual model, entrepreneur resilience, psychological women empowerment, innovative behaviour and social competence have been used as independents variables that will influence women entrepreneur success which regarded as dependent variable. The proposed conceptual model is shown in figure 1 as below:

See Full Size >

Conclusion

Given the rise of women entrepreneurs and their importance in the global economy, a better understanding of the determinant to increase women entrepreneur success in the nation is very crucial especially among academic and practitioners. Moreover, the number of studies regarding women entrepreneurs is still very limited. As a result, this model is noteworthy in bringing the new knowledge to both the discipline of psychological and as well as entrepreneurship. The model presented in this paper embedded women entrepreneur within entrepreneurial characteristics to illustrate the role women can play in creating successful enterprise. As a women entrepreneur’s network (bridging social competence) and feeling the abilities to control their choices, decision and action (psychological women empowerment), it is anticipated that this will have a wider impact on entrepreneur success especially women due to the role in making decision around their family especially children, as such can improve their life for future generation. Additionally, their capability in implementing new idea and process in entrepreneurship activities (innovative behavior) and finally the ability to face the uncertain future with positive attitude (entrepreneur resilience) especially in Industry 4.0 able to increase their status in the community and improve outcomes for future. In these ways, this paper has responded to the suggestion by previous research for captivating more research on women entrepreneurship (Stillman, 2014; Kelley et al., 2012; Alam et al., 2011) and establishing the internal factors that lead to women entrepreneur’s success as suggested by Kerr et al. (2017) and Rieger (2012). As a result, the proposed conceptual model can be significant help in developing women entrepreneurs’ development. Likewise, the predicted finding from this study can be used in constructing and magnifying psychological characteristic of women entrepreneurs.

Acknowledgments

The authors thanks to editors and reviewers for their encouraging feedback and helpful guidelines provided in preparing this paper for publication.

References

• Alam, S., Jani, M., & Omar, N. (2011). An empirical study of success factors of women entrepreneurs in Southern region in Malaysia. International Journal of Economics and Finance, 3(2), 166-175.
• Al-Dajani, H., & Marlow, S. (2013). Empowerment and entrepreneurship: a theoretical framework. International Journal of Entrepreneurial Behaviour & Research, 19(5), 503-524.
• Ayala, J., & Manzano, G. (2014). The resilience of the entrepreneur. Influence on the success of the business. A longitudinal analysis. Journal of Economic Psychology, 42, 126–135.
• Ayala, J. C., & Manzano, G. (2010). Established business owners’ success: Influencing factors. Journal of Developmental Entrepreneurship, 15(3), 263–286.
• Berger, G. (2017). World Economic Forum. Retrieved on 11th October 2017 from https://www.weforum.org
• Brockhaus, R. H. (1980). Risk taking propensity of entrepreneurs. Academy of Management Journal, 23(3), 509-520.
• Burger, J. M. (2008). Personality (7th ed.). Thomson Wadsworth, Belmont.
• Bygrave, W. D. (1989). The entrepreneurship paradigm (I): A philosophical look at its research methodologies. Entrepreneurship: Theory and Practice, 14, 7-26.
• Carlos Pinho, J., & Sampaio de Sá, E. (2014). Personal characteristics, business relationships and entrepreneurial performance. Journal of Small Business and Enterprise Development, 21(2), 284-300.
• Carmeli, A., Meitar, R., & Weisberg, J. (2006). Self-leadership skill and innovative behavior at work. International Journal of Manpower, 27(1), 75-90
• Carr, E. (2003). Rethinking empowerment theory using a feminist lens: The importance of Process. AFFILIA, 18(1), 8-20.
• Casson, M. (2003). The Entrepreneur: An Economic Theory. Edward Elgar, Cheltenham.
• Chasbiansari, D. (2007). Kompetensi sosial dan kewirausahaan. Universitas Diponegoro, Semarang.
• Chatterjee, N., & Das, N. (2015). Key psychological factors as predictors of entrepreneurial success: A conceptual framework. Academy of Entrepreneurship Journal, 21(1), 102–115.
• Cliff, J. E. (1998). Does one size fit all? Exploring the relationship between attitudes towards growth, gender, and business size. Journal of Business Venturing, 13(6), 523-542.
• Danes, S. M., Lee, J., Amarapurkar, S., Stafford, K., Haynes, G., & Brewton, K. E. (2009). Determinants of family business resilience after a natural disaster by gender of business owner. Journal of Developmental Entrepreneurship, 14(4), 333-354.
• Danjuma, A., Kegudu, S., Malami, H. U., & Gatawa, N.M. (2011). Skill Acquisition, Capacity Building and Women Economic Empowerment: A Case Study of Women Education Center, Birnin Kebbi. Gender & Behaviour, 9(2), 3961-3978.
• Dinis, A., Paço, A., Ferreira, J., Raposo, M., & Rodrigues, R. G. (2013). Psychological Characteristics and Entrepreneurial Intentions Among Secondary Students. Education and Training, 55(89), 1–23.
• East, J. (2000). Empowerment through welfare-rights organizing: a feminist perspective”, AFFILIA, 15(2), 311-328.
• Entrialgo, M., Fernandez, E., & Vazquez, C. J. (2000). Psychological characteristics and process: The role of entrepreneurship in Spanish SMEs. European Journal of Innovation Management, 3(3), 137-149.
• Fisher, R., Maritz, A. & Lobo, A. (2014). Evaluating entrepreneurs’ perception of success: Development of a measurement scale, International Journal of Entrepreneurial Behaviour & Research, 20(5), 478-492.
• Francis, L. (2014). Memoir of a Corporate Refugee: The Resilient Entrepreneur Handbook. Fistpump Press.
• Fust, A. (2014). Innovative Behavior of Entrepreneurs – a Systematic Literature Review. Retrieved from https://www.alexandria.unisg.ch/publications/232637
• Hayward, M., Foster, W. R., Sarasvathy, S. D., & Fredrickson, S. (2010). Beyond hubris: How highly confident entrepreneurs rebound to venture again. Journal of Business Venturing, 25, 569-578.
• Headd, B. (2003). Redefining Business Success: Distinguishing Between Closure and Failure. Small Business Economics, 21, 25-61.
• Hmieleski, K. M., Carr, J. C., & Baron, R. A. (2015). Integrating discovery and creation perspectives of entrepreneurial action: The relative roles of founding CEO human capital, social capital, and psychological capital in contexts of risk versus uncertainty. Strategic Entrepreneurship Journal, 9, 289–312
• Kabeer, N. (2005). Gender equality and women’s empowerment: A critical analysis of the third millennium development goals. Gender and Development, 13(1), 13-24.
• Kallerberg, A., & Leicht, K. (2014). Gender and organizational performance: Determination of small busness survival and success. Academy of Management Journal, 34(1), 134-161.
• Kanter, R. M. (1983). The change masters: Innovation and entrepreneurship in the American corporation. Touchstone Book.
• Kelley, D. J., Singer, S., & Herrington, M. (2012). The Global Entrepreneurship Monitor. Babson College, Wellesley, MA.
• Kerr, S. P., Kerr, W., & Xu, T. (2017). Personality Traits of Entrepreneurs: A Review of Recent Literature. Foundations and Trends in Entrepreneurship, 14(3), 279-356. https://doi.org/10.1561/0300000080
• Kim, J. Y., Choi, D. S., Sung, C., & Park, J. Y. (2018). The role of problem solving ability on innovative behavior and opportunity recognition in university students. Journal of Open Innovation: Technology, Market, and Complexity, 4(4), 1-13.
• Kitchenham, B., (2004). Procedures for Performing Systematic Reviews. Technical Report TR/SE0401, Keele University, and Technical Report 0400011T.1, National ICT Australia
• Kreiser, P. M., Pankaj, C. P., & James, O. F. (2013). The Influence of Changes in Social Capital on Firm-Founding Activities. Entrepreneurship Theory and Practice, 37(3), 539–568.
• Markman, G. D., & Baron, R. A. (2016). Beyond Social Capital: The Role of Entrepreneurs’ Social Competence in Their Financial Success competence in their financial success. Journal of Business Venturing, 18(1), 41-60.
• Markman, G. D., Baron, R. A., & Balkin, D. B. (2005). Are perseverance and self-efficacy costless? Assessing entrepreneurs’ regretful thinking. Journal of Organizational Behavior, 26, 1–19.
• Mosedale, S. (2005). Assessing women’s empowerment: towards a conceptual framework. Journal of International Development, 17(2), 243-257.
• Mustapha, M., & Subramaniam, P. A. P. (2016). Challenges and success factors of female entrepreneurs: Evidence from a developing country. International Review of Management and Marketing, 6(4), 224–231.
• Olakitan, O. & Ayobami, A. (2011). An investigation of personality on Entrepreneurial success. Journal of Emerging Trends in Economic and Management Sciences, 2(2), 95-103.
• Oly Ndubisi, N. (2014). Entrepreneurship and service innovation. Journal of Business & Industrial Marketing, 29(6), 449–453.
• Rieger, K. (2012). Phenomenological exploration of characteristics of successful women entrepreneurs. Arizona: Northcentral University, ProQuest Dissertations Publishing.
• Ranasinghe, S. (2012). Factors contributing to the success of women entrepreneurs in Sri Lanka. Sri Lanka Journal of Advanced Social Studies, 1(2), 86-110.
• Sajilan, S., Noor Ul, H., & Shehnaz, T. (2015). Impact of Entrepreneur’s Demographic Characteristics and Personal Characteristics on Firm’s Performance under the Mediating Role of Entrepreneur Orientation. Review of Business & Economics Research, 4(2), 36–52.
• Scott, S. G., & Bruce, R. A. (1994). Determinants of innovative behavior: A path model of individual innovation in the workplace. Academy of Management Journal, 37(3), 580–607.
• Shamsul Hana, A.R., & Norashidah, H. (2015). Factors that influence women entrepreneurial success in Malaysia: A conceptual framework. Conference on Business Management Research, II, 35-41.
• Shi, J. (2012). Influence of passion on innovative behavior: An empirical examination in people Republic of China. African Journal of Business Management, 6(30), 8889-8896.
• Stam, W., & Elfring, T. (2014). Entrepreneurial orientation and new venture performance: The moderating role of intra- and extra industry social capital. Academy of Management Journal, 51, 97-111.
• Stillman. J. (2014). The Best (And Worst) Countries for Women Entrepreneurs. Retrieved from https://www.forbes., com/sites/jessicastillman/2014/06/05/the-best-and-worst-countries-for-women-entrepreneurs/#16f1dc2f1b00
• Somolu, O. (2007). Telling Our Own Stories: African Women Blogging for Social Change. Gender & Development, 15(3), 477-489.
• Thomas, J.W. (2003). Small Business Survival. Decision Analyst. Retrieved from http://decisionanalyst.com
• Thomas, K. W., & Velthouse, B. A. (1990). Cognitive elements of empowerment. Academy of Management Review, 15, 666-681.
• Windle, G., Bennert, K. M., & Noyes, J. (2011). A methodological review of resilience measurement scales. Health and Quality of Life Outcomes, 9(8). https://doi.org/10.1186/1477-7525-98
• Witt, P. (2004). Entrepreneurs’ networks and the success of start-ups. Entrepreneurship & Regional Development, 16, 391–412.