Influence of Parental Factors on the Entrepreneurial Attitude of B School Students

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International Journal of Research and Development - A Management Review (IJRDMR)

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ISSN (Print): 2319–5479, Volume-3, Issue–1, 2014 35

Influence of Parental Factors on the Entrepreneurial Attitude of B School Students

1Ajit Prabhu V., ²Anisha Thomas

1Joint Director & Head (SPMD), Kerala State Council for Science, Technology and Environment,

2Asst. Professor Dept of Business Administration, MIIT, Research Scholar, University of Kerala Email: ¹[email protected], ²[email protected]

Abstract: -The study was conducted among the management graduates who were randomly selected from a leading B School in Kerala. The study evaluates the influence of parental factors on the entrepreneurial attitude of B school students. The major findings of the study is that the interest in becoming an entrepreneur for B school students whose parents are entrepreneurs is significantly greater than that of those students whose parents are not entrepreneurs. The study concludes that B school students are influenced by the Parental factors such as parental role modelling, access to Business network of parents, entrepreneurial family culture, educational qualification of parents and family standard of living.

Key words: Entrepreneurship, Entrepreneurial Attitude, B schools, Parental factors

I. INTRODUCTION

The entrepreneurial spirit is an ongoing characteristic of India‟s history, particularly visible in a number of communities engaged primarily in trading. To quote the renowned economist, T.N. Srinivasan, „India has been an entrepreneurial society…we had the entrepreneurial skill but suppressed it for too long a time… and now it is thriving‟ (Tripathi, 1984). Traditionally, the Entrepreneurship of such communities is facilitated principally by the successful use of informal

„entrepreneurial ecosystems‟ and interdependent business networks. Further, there is also a rich tradition within the Indian Diasporas, spanning the past several hundred years, whose spirit of enterprise is legion.

India needs opportunity-driven competent entrepreneurs, who set up sustainable enterprises, create employment, and generate wealth. This can be achieved by encouraging the youth who have professional knowledge to come forth and develop a new business for sustainable development. Fishbein and Ajzen‟s theory of reasoned action says that behavior is directly influenced by one‟s intention to engage in that behavior, and that intention are influenced by attitudes towards the behavior. Ajzen‟s theory of planned behavior identifies the behavior‟s feasibility as an additional reason individuals form intentions to perform certain behaviors.

In this scenario the entrepreneurial behaviour of the B school students is directly influenced by the attitude

towards entrepreneurship and intention to become an entrepreneur.

A number of authors argue that the entrepreneurial process is a planned and purposive act. These conclusions are based on several models (Shaver et al, Krueger and Brazeal, Bird).

II. RATIONALE OF THE STUDY

It is notable that early researchers examining factors that influence individuals entrepreneurial activities found no substantiate differences between entrepreneurs and other individuals (Gartner, 1989). This research focused on personality traits that encompassed locus of control, risk taking propensity (Brockhaus, 1980), need for achievement (McClelland, 1961) and tolerance of ambiguity (Schere, 1982), which was followed by inclusion of personal background and situational factors (Moore, 1986). However these variables failed to explain satisfactorily why particular individuals are entrepreneurial. Hence researchers started focusing on entrepreneurial behaviour and attitude. IIM Ahamedabad, India‟s Premier business management institution and Tianjin University of Finance conducted a study (Bill Belew, 2006) and found that 63% of Indians see entrepreneurship as a favourable activity compared to 59% of Chinese. Fauzia et al.(2004) observed that entrepreneurship was often thought to be likely subject to business discipline students but not for technical students.

Being raised in a family that is entrepreneurial significantly impacts individuals‟ intentions tostart their own businesses (Crant, 1996; Matthews and Moser, 1995; Scherer, et al., 1989). This tends to be particularly true for males (Matthews and Moser, 1995). Having role models is a significant factor in wanting to start a business (Scheinberg and MacMillan,1988; Birley and Westhead,1994), and self employed parents tend to be especially relevant as mentors and guides for children starting their own businesses (Matthews and Moser, 1995; Scherer et al., 1989).

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The NKC Study found that for entrepreneurial ventures, established since the beginning of this decade, the ratio of MBAs and postgraduate entrepreneurs has steadily increased, while the number of undergraduate entrepreneurs has decreased. This indicates a growing importance of higher and professional education among the new generation of entrepreneurs. Further, since the year 2000, a larger proportion of entrepreneurs with MBA degrees were also found to have prior work experience, compared to the pre-2000 figures. (NKC, 2008).

Education is indispensable for skill development and fundamental to Entrepreneurship and innovation. The Banking system should therefore play s proactive role and provide necessary Venture capital to help such youngsters start their own enterprises (The Times of India, 2004). The increased rate of management students across developed and developing countries centred on the issue of self-employment or whether it is a choice or a necessity for a preparation of new venture (pietrobelli et al., 2004).

Figure :1 Source: (NKC study Report 2008, Entrepreneurship in India)

Therefore the NKC study forms the basis for selecting the B school students for the study. As it was enumerated that the growing importance of higher and professional education among the new generation of entrepreneurs. Further, since the year 2000, a larger proportion of entrepreneurs with MBA degrees were also found to have prior work experience, compared to the pre-2000 figures. (NKC, 2008)

Figure :2 Source: (NKC study Report 2008, Entrepreneurship in India)

The NKC study explores the degree of family support (a socio-cultural factor, particularly in India) that the entrepreneurs received at the time of starting their venture. Overall, as many as 74% of the entrepreneurs were supported by their families (as seen from the figure below, 51% were „very supportive‟ and 23% were

„supportive‟), which further underscores the importance

of social institutions for entrepreneurs in India.

Considering the socio-cultural background of the Indian B school student‟s parental factors plays a major role in becoming an entrepreneur. Thus it forms the foundation for analyzing the parental factors influencing the B school students because majority of the Indian entrepreneurs are supported by their family. Therefore the study was made to analyze the family support through studying the parental influence on the B school students to become an entrepreneur.

Considering the socio-cultural background of the Indian B school student‟s parental factors plays a major role in becoming an entrepreneur.

III. OBJECTIVES

The objective of this study is to determine the influence of parental factors on a B school student‟s intentions for becoming a potential entrepreneur, motivations and attitudes related to starting a new business. This study also investigates the parental factors that lead to entrepreneurial orientation among B school students.

Methodology

Data collected from a sample of 50 management graduates who was randomly selected from a leading management institute in Kerala, and respondents were served with a questionnaire consisting of 24 statements.

The statements were basically designed for measuring the influence of parental factors on the entrepreneurial attitude of the B school students.

IV. RESULTS AND ANALYSIS

Percentage Analysis:

From the study it was interpreted that majority of 34%

of students intend to become an employee of a private sector organization and 25% of the students intend to become entrepreneurs. It can be inferred that the entrepreneurial intentions of the students is in an average level. The study thus concentrates on the area of entrepreneurial intentions of B school students and the parental factors influencing it.

Mann-Whitney U Test 34%

20% 25%

10% 5% 6%

POST MBA PLANS (FIGURE 2.1) AN EMPLOYEE OF A PRIVATE SECTOR ORGANISATION SELF

EMPLOYED/

ENTREPRENEUR AN EMPLOYEE OF

GOVERNMENT SECTOR

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The test is also known as Wilcoxon Rank-sum Test because ranks are assigned to the scores in both groups.Hypothesis set for the analysis:

H0: The interest in becoming an entrepreneur for B school students whose parents are entrepreneurs is identical that of B school students whose parents are not entrepreneurs.

Ha: The interest in becoming an entrepreneur for B school students whose parents are entrepreneurs is significantly greater than that of B school students whose parents are not entrepreneurs.

Rank (Table 1) Parent‟s

Occupation

N Mean

Rank

Sum of Ranks Interested in

becoming an Entrepreneur

Business 22 20.91 460.00 Non

Business

28 29.11 815.00

Total 50

(Table2) Test Statistics

Interested in becoming an entrepreneur

Mann- Whitney U 207.000

Wilcoxon 460.000

Z -2.108

Asymo. Sig (2- tailed) .035 a. Grouping Variable :

Parents Occupation

The output indicates that the result, with correction for ties and Z score conversion was not significant as Z= - 2.108, with a significance (P value) equal to .035.

Therefore we reject the null hypothesis. It can be interpreted that the interest in becoming an entrepreneur for B school students whose parents are entrepreneurs is significantly greater than that of B school students whose parents are not entrepreneurs.

Factor Analysis:

The data collected was subjected to factor analysis.

Barlett‟s and KMO measures indicated support in terms of sample adequacy ( Table 2). From the table it is evident that 5 factors have Eigen values greater than one. However only the first five factors which account for a variance of 71.786 are considered for further analysis.

KMO and Bartlett's Test (Table 3)

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .506

Bartlett's Test of Sphericity

Approx. Chi-Square 74.722

Df 45

Sig. .004

Total Variance Explained (Table 4) Component Initial Eigen values Extraction Sums of Squared

Loadings

Rotation Sums of Squared Loadings Total % of

Variance

Cumulative

%

Total % of Variance

Cumulative

%

Total % of Variance

Cumulative

%

1 2.182 21.821 21.821 2.182 21.821 21.821 1.853 18.532 18.532

2 1.586 15.859 37.680 1.586 15.859 37.680 1.592 15.925 34.457

3 1.373 13.729 51.410 1.373 13.729 51.410 1.297 12.971 47.428

4 1.034 10.345 61.755 1.034 10.345 61.755 1.221 12.205 59.633

5 1.003 10.032 71.786 1.003 10.032 71.786 1.215 12.154 71.786

6 .810 8.097 79.883

7 .777 7.771 87.654

8 .588 5.883 93.537

9 .354 3.538 97.075

10 .292 2.925 100.000

Extraction Method: Principal Component Analysis.

The principal component analysis of the responses on the tested 10 statements provides a good insight into the parental factors which influences the entrepreneurial attitude of the B school students.

The 10 statements are segregated into five factors named as:

 Parental role modelling

 Access to Business network of parents

 Entrepreneurial family culture

 Educational qualification of parents

 Family standard of living

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( Table 5 )Rotated Component Matrix

STATEMENTS Component

1 2 3 4 5

Having a role model is a significant factor in starting a business .885 Parental Role Modelling influences B school students. .826 Parents owning a business enterprise and access to business network of parents .853 Success of parents business increase the intention of becoming an entrepreneur .851 Entrepreneurial family culture/ Inheritance of family business .825

Relatives entrepreneurial experience also influence -.726

Education qualifications of the parents -.831

Level of Family education influences in becoming an entrepreneur .589

Parents have slogged in their entire life to make a living influences the respondent to become an entrepreneur

-.910

To increase the family standard of living .559

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a) Parental Role Modelling: Having role models is a significant factor in wanting to start a business (Scheinberg and MacMillan,1988; Birley and Westhead,1994), and self employed parents tend to be especially relevant as mentors and guides for children starting their own businesses.

b) Access to business network of parents: The success or failures of the parents business and parents owning their own business have influence over the B school students in becoming entrepreneur.

c) Entrepreneurial Family culture: The entrepreneurial family culture also influences the attitude of the students. Entrepreneurs with entrepreneurial parents have their first stint as an entrepreneur in the same industry as their parents‟ last stint..

d) Educational qualification of the parents: It would be valuable to determine whether the importance children of entrepreneurs place on business plans and mentors reflects parental attitudes, parental behaviors, or the impact of negative or positive outcomes associated with using or failing to use these two elements.

e) Family standard of living: The respondent‟s standard of living plays a major role in influencing to become self employed. The family‟s financial background influences the students. This factor concentrates on the respondents interest in developing standard of living as it is a socio-cultural factor by becoming an entrepreneur.

V. CONCLUSION:

The major finding of the study enumerates that the parents occupation have a direct influence on interest of

the students in becoming an entrepreneur and parents owing a business encourage the children in becoming an entrepreneur. The principal component analysis of the responses on the tested 10 statements provides a good insight into the parental factors which influences the entrepreneurial attitude of the B school students. The 10 statements were segregated into five factors named as:

a) Parental Role Modelling, b) Access to parents business network, c) Entrepreneurial family culture, d) Educational qualification of parents, e) Family standard of living. These factors clearly influence the entrepreneurial attitude of the B school students.

Intriguing results from this study show that children of entrepreneurs are significantly more likely to see the value of a business plan for starting a business. These results raise some interesting issues regarding the influences of social factors such as family background on potential entrepreneurs. B schools are the major platforms for developing potential entrepreneurs.

REFERENCES:

[1] Ajzen, I.(1991)“The Theory of Planned Behavior.” Organizational and Human Decision Processes, 50, pp. 179-211.

[2] Bhandari N (2006). “Intention for Entrepreneurship among students in India”, Journal of Entrepreneurship, Vol 15, No.2.

[3] NKC (2008), “Entrepreneurship in India: A stuby by National Knowledge Commision” Govt. of India.

[4] Fishbein, M. and Ajzen, I. (1975). Belief, Attitude, Intention and Behavior: An Introduction to Theory and Research. Boston, MA: Addison Wesley. pp.15-20.

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