Description
During this such a detailed file in relation to a study among university students in business start ups in malaysia motivations.
International Journal of Business and Social Science Vol. 3 No. 19; October 2012
181
A Study among University Students in Business Start-Ups in Malaysia: Motivations
and Obstacles to Become Entrepreneurs
Yeng Keat, Ooi
Shuhymee Ahmad
School of Business Management
College of Business
Universiti Utara Malaysia
Malaysia
Abstract
While most of the universities in Malaysia offer entrepreneurship courses today, little is known about how and
why an individual starting up and sustaining a new venture. This study examines and determines the perceptions
on entrepreneurship, motivators as well as obstacles and challenges faced by among 153 Universiti Utara
Malaysia’s undergraduate students to start up their new ventures by building on Moy, et al.’s (2001) study. In
doing so, this study contributes to the understanding of whether the students have high perception, which in turn,
motivates them to become entrepreneurs. Besides that, the imminent possible obstacles and challenges faced by
the students and the government support in promoting entrepreneurship are also examined in this study. Findings
reveal that motivators such as extrinsic rewards and change management inspire them to start up a new venture
whilst government support/assistance plays a significant role in promoting entrepreneurship. By contrast,
obstacle and challenge such as endogenous factor (financial and operational problems) seemingly impedes their
effort to launch a new venture. It is also revealed that gender and birth order affect one’s entrepreneurial
intention significantly. However, surprisingly, no difference was found in working experiences with one’s
entrepreneurial intention. Recommendations and future research are made based on the findings of the study.
Keywords: business start-ups, entrepreneurs, motivator, obstacle and challenges, university students
Introduction
As Malaysia is transforming from a middle-income economy to a high-income economy in 2020,
entrepreneurship has been identified as the key ‘driver’ to help the country’s aspiration in achieving its Hercules
goal. As a result, much attention and concerns about entrepreneurship have been intensified by, amongst others,
the government’s allocation for fundings as well as incentives for small and medium enterprises in order to
promote entrepreneurship.
Hence, entrepreneurship has become the main agenda in the country with the introduction of entrepreneurial
programmes and mechanisms that cater for the development of entrepreneurship activity. Such programmes and
mechanisms hope would stimulate the country’s economic growth which in turn would create more job
employment opportunities. This effort is crucial especially to check the unemployment problems among graduates
in the country that purportedly around 80000 nationwide. This is aggravated by the study by Md Yusof, et . al.
(2009) reported that only 1.1% (n=41925) of first degree graduates were self-employed.
Although much effort have been initiated and done by the Malaysian Government to promote more people, in
particlar students at institutions of higher learning, to become entrepreneurs, however, the knowledge about
students’ motivation as well as obstacles faced when starting up a venture, especially at the level of postgraduate,
is still sketchy. Hence, in order to foster the growth of entrepreneurs in the country as well as to assist them to
face any imminent obctacles confidently, it is imperative to understand the whole process of establishing a
venture, namely why and how a venture was established and operated (Moy et. al., 2001).
© Centre for Promoting Ideas, USA www.ijbssnet.com
182
The main objective of this study is to examine the undergraduate students’ perceptions on entrepreneurship, on
the motivators, obstacles and challenges as well as well the government support behind starting up and sustaining
a new venture. The study also attempts to examine if there are any differences of gender, birth order and working
experience with one’s entrepreneurial intention.
Motivational factors
Much research has been focused on the characteristics and motivational aspects of the entrepreneurs (see Kao
(1995), Koh (1996), Kuratko and Hogetts (2007), Liang and Dunn (2007), Shane, et. al, (2003), Zhuplev, et. al.
(1998)). This is mainly due to most businesses are carried out individually and thus entrepreneurs believed in
what they are doing and injects personal core values into how they build a business. Proper motivation is
important for new business owners or future entrepreneurs to go into business. Understanding what's driving an
individual to start a business is an important component of assessing oneself and his/her business-readiness.
Understanding a person’s motivations as well as ‘drivers’ to start up business will help an individual makes a
better decision about starting a business and can also help him/her knows if this is the right time to start a
business.
Motivation, in this instance, can be categorised into intrinsic and extrinsic motivation. To be motivated means to
be moved to do something. Therefore, a person that has high desire and enthusiastic ‘towards an end is considered
motivated’ whilst a person that has ‘no impetus or inspiration to act is thus characterisrised as unmotivated’ (Ryan
and Deci, 2000, pg 54). Intrinsic motivation reflects the desire for someone to do something simply because
he/she enjoys doing it while extrinsic motivation reflects the desire to do something due to external rewards such
as money and awards. Hence an individual that is intrinsically motivated has much enjoyment and passion to start
a business compared to individual that is extrinsically motivated (Simola, 2011).
Moy et. al. (2001) in their studies on Thailand and Hong Kong university students’ motivations to start up new
ventures indicated that in general motivators such as extrinsic rewards, independence/autonomy, intrinsic rewards,
family security and change management have made an individual to decide to choose entrepreneurship as their
future career. The findings are corresponded with that of a study by Kuratko and Hodgetts (2007) on
entrepreneurs’ goals in sustaining their business development. A study of Zhuplev, et. al. (1998) targeted on
Russia and American business owners to start up a business illustrated essentially identical motivators of the
business owners to lauch new ventures, i.e. self-accomplishment, material wealth, and security.
Challenges or obstacles and of sustaining a new venture
Even though studies have been concentrated much on motivational factors in starting up and sustaining a
business, the darkside of operating and maintaining, in particular a novel business, is also critical to ensure its
survival. Sustantial research has been attempted to identify and explain challenges or obstacles encountered by
entrepreneurs while starting up their new ventures. Growing evidence suggests that it is a normal process for any
novel entrepreneurs to face the challenges or obstacles during the early stage of establishing new ventures.
Therefore, entrepreneurs should be ready in nature to take those challenges or obstacles with open mind. Young
and Welsch (1993) identified that entrepreneurs face several obstacles, such as lack of financial assistance, lack of
information on various aspects of business, excessive taxation, and high rate of inflation. On the ther hand, a
study by Kozan, et. al. (2006) concurred that ‘financing difficulties hindered technological improvement and
resource aggregation’ for many small business owners in Turkey.
A study by Moy, et. al. (2001) advocated that exogenous and endogenous factors are the main
challenges/obstacles faced when starting and sustaining new ventures among students. Among them are: high
labour cost, high interest rate, strict government regulation (exogenous factors) and lack of managerial
experience, lack of technical knowldege, excessive risk (endogenous factors). These obstacles are found to be
similar to that of the study by Zhuplev, et. al. (1998) on Russian and American small business owners’
motivations and obstacles which revealed high taxes, hatred for government regulations and start-up capital were
the main obstacles for both countries business owners.
In the same note, Fleming (1996) in her longitudinal study on Ireland university students’ attitudes towards
business ownership process argued that several obstacles that militate against entrepreneurship, such as lack of
experience, or lack of finance, which hinder the path towards university students preferred future career choice.
International Journal of Business and Social Science Vol. 3 No. 19; October 2012
183
Government’s support
SMEs play a considerable role in a country’s economic growth through the creation of new businesses as well as
expanding the current businesses to new markets. Statictics showed that this type of business has contributed
significantly (64%) to the United States’ gross domestics product (Astrachan and Shanker, 2003). Likewise, in
Malaysia, SMEs have been the backbone for the country’s economic growth that contributed 37% to the GDP in
2010 (Kumar, 2009). It is also expected that SMEs will contribute to the country’s GDP to 40% by 2020 (New
Sabah Times, 2011). In this regard, SMEs are widely seen as a critical tool to solve current economic issues such
as unemployment and industry stagnation (Fakhrul and Wan Norhayate, 2011).
Hence, the government supports for the development of SMEs is increasing and there are several types of
activities that have been introduced and supported by the Government, including the establishment of agencies to
encourage entrepreneurship. MARA (Council of Trust for the Indigenous or Bumiputera of Malaysia) was
established in 1966 with the main objectives, among others, to assist, guide and train the Bumputera in rural aeras
to actively participate in bsuiness and industrial sectors (Buang, 2002). For example, some RM600 million loans
were set aside to an estimated 108000 SMEs in helping and sustaining their bsuienesses (Omar, 2006).
Gnyawali and Fogel (1994) argued that government can boost entrepreneurship through the assistance
programmes such as offer tax and other incentives, keep rules and regulations at a minimum as well as to provide
a conducive entrepreneurial environment. This is supported by Fogel (2001) in his study on entrepreneurial
development in Hungary, concluded that government should offer tax incentives and other sprecial programmes
for small business in order to improve entrepreneurial process. Similarly, a study on Thailand and Hong Kong
university students’ perception to be an entrepreneurs by Moy, et. al. (2001) indicated that there are four
categories for government assistance: financial support, friendly bsuienss environment, technical support and
expand new market and education and tarining programme.
Therefore it is essential to create the right entrepreneurial environment that really promotes the entrepreneurial
activity. A comprehensive government approach and support such as loans, business facilities, rules and
regulations and etc would definitely a key condition for success in nurturing and promoting entrepreneurship
(Klapper, 2004).
Demographic variables
There have been strands of studies suggesting that gender differences do occur in inclination towards
entrepreneurship or entrepreneurial behaviours. In particular, much research has shown that males are more likely
to venture into business compared to females (e.g. Dunn, 2004, Sandhu, et al. (2011) and Veciana, et al. (2005)).
Crant’s study of 181 undergraduate and postgraduate students in the US (1996) also indicates that male students
exhibit significantly higher entrepreneurial intention compared to female students. Perhaps this is mainly due to
the fact that many female students do not choose entrepreneurship as a major study as remarked by Menzies and
Tatroff (2006).
Apart from gender, it is found that birth order also influnces one’s entrepreneurial behaviour. Robinson and Hunt
(1992) found that being first-born in the family is significantly related to entrepreneurial inclination. Their studies
were corroborated by Koh’s (1996) study on business students in Hong Kong. Othman et al. (2005), on the other
hand, conclude that there is no significant difference between Chinese and Malay entrepreneurs and birth order in
their comparison study of 80 Chinese and Malay entrepreneurs in Malaysia.
Another interesting variable that used to associate with one’s entrepreneurial behaviour is entrepreneurial past
experiences. Much research (e.g., Lena and Wong 2003; Mukhtar et al. 1999) has recognised that individuals’
previous working experience positively or negatively influences entrepreneurial performance. Successful
entrepreneurs may have acquired the necessary knowledge and skills to succeed in the ventures that they are
already familiar with, and so would be able to capitalise on their experience in new ventures. Mukhtar, et al.
(1999) conclude that individuals with previous working experience tend to have higher inclination towards small-
and medium-sized employment. However, in their study of entrepreneurial intention among university students,
Kristiansen and Indarti (2004) found no statistically significant differences among Indonesian and Norwegian
students with entrepreneurial intention in relation to whether or not they had work experience.
© Centre for Promoting Ideas, USA www.ijbssnet.com
184
Methodology
The methodologies used in this study are given as folows:
Sample and procedure
A self-administered questionnaire with a cover letter was employed to collect data for the study. Questionnaires
were distrubuted to the respondents during class meetings to students who were taking Entrepreneurship and
Seminar in Entrepreneurship courses at UUM. Studnets were informed to return the quetsionnaires by placing
them in a box at the reception desk located at the Dean Office of respective schools. This method was similiar to
that of the study conducted by Lee, et al. (2006) that yielded a higher response rate among students as a sample. A
total of 200 set of questionnaires were distributed and 153 completed and returned the questionnaires, yielding a
76.5% response rate.
A survey was conducted at classes at Universiti Utara Malaysia. Classes involved were from Entrepreneurship
and Seminar in Entrepreneurship courses. The questionnaires were distributed to these groups of students using a
random sample of classes during the normal lecture session (Semester I/II 2011/2012 session). The students
selected were those in final year students as they are deemed to have a better understanding regarding future
careers (Super, 1990). In other words, those students would be in a better position of firming their vocational
goals based on their interest (Ooi, 2008).
Instrumentation
A self-administrated questionnaire was adapted from the previous studies by Moy, et. al. (2001). The
questionnaire, based on the 5-point Likert scale, consisted of five sections relating to the following issues:
motivators for starting up a new business, obstacles they faced when starting up a new business, operating and
sustaining a new business as well as government supports to facilitate the development of entrepreneurship. Apart
from this, respondents’ personal details such as family business history, family order and previous working
experience and etc that related to respondent’s interest to become an entrepreneur were also included for the
study.
Data analysis
Data collected from the survey was analysed by the statistical software SPSS version 19.0. Descriptive statistics
such as frequency distribution, mean and stardard deviation was used in the analysis.
Results
Table 1 presents the profile of respondents. The majority of respondents were females (82.4%) compared to males
(only 17.6%). Similar to the scenario of population of Malaysian university students, the campus is mainly
monopolised by female students. Most of the respondents’ age ranged between 20-25 years (98.7%) and they are
the eldest (30.1%) in the family. On top of that, the majority of the respondents were hailed from rural area
(54.2%), were studying in business management (39.2%) and have some working experience in private sector
(69.16%) though it is less than a year (94.17%) (Based on 120 respodents who had previous working experience).
Asked to indicate father’s or mother’s or guardian’s occupation, the respondents reported that their
fathers/guardians were employed staff and mothers/guardians were unemployed (full time housewife), with
39.2% and 51% respectively. A total of 52.3% of the resposdents believed that their parents/guardians did not
influence their future career.
International Journal of Business and Social Science Vol. 3 No. 19; October 2012
185
Table 1: Respondent Background
Respondent Characteristics Frequency Percentage (%)
Gender
Male
Female
Age
20 – 25 years old
26 – 30 years old
41 years old and above
Birth Order in Family
Only child
Second child
Eldest
Youngest
None of the above
Place of origin
Rural area
Urban area
Other
Programme of study
Business Management
Human Resource
Entrepreneurship
Marketing
Other
Working Experience
Yes
No
Working Period (based on 120 respondents )
Less than 1 year
3 – 5 years
Work Place (based on 120 respondents )
Government sector
Private sector
Relatives business
Other
Father’s / Guardian’s Occupation
Employed
Self-employed
In between jobs
unemployed
retired
other
Mother’s / Guardian’s Occupation
Employed
Self-employed
In between jobs
unemployed
retired
other
Parents’ / Guardians’ Influenced Career
Yes
No
27
126
151
1
1
3
39
46
30
35
83
67
3
60
4
40
4
45
120
33
113
7
14
83
20
3
60
57
2
6
25
3
37
17
1
78
12
8
73
80
17.6
82.4
98.7
0.7
0.7
2.0
25.5
30.1
19.6
22.9
54.2
43.8
2.0
39.2
2.6
26.1
2.6
29.4
78.4
21.6
94.17
5.83
11.67
69.16
16.67
2.5
39.2
37.3
1.3
3.9
16.3
2.0
24.2
11.1
0.7
51.0
7.8
5.2
47.7
52.3
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186
Respondents were asked to rate their intention to become entrepreneurs. On a five-point Likert scale with 5 being
strongly agree and 1 being strongly disagree, Table 2 shows that the respondents, in general, possess high
intention to become entrepreneurs (M=3.84; SD 0.57). Among the two reasons are they ‘want to be my own boss
(M=4.21; SD= 0.66), closely followed by ‘if I had opportunity and resources, I would like to start a business
(M=4.14; SD 0.65).
Table 2: Mean of students’ intention to become an entrepreneur after graduation
Items Mean Std. Deviation
- Prefer to be an entrepreneur rather than an
employee in a company
- Professional goal is to become an
entrepreneur
- Have thought seriously to start own business
after completing study
- Determined to create a firm in the future
- Want to be my own boss
- Prepared to do anything to be an
entrepreneur
- If had opportunity and resources, like to start
a business
- Will start business in the next 5 years
- entrepreneurship as career choice
Average
3.80
3.79
3.63
3.93
4.21
3.73
4.14
3.73
3.59
3.84
0.899
0.808
0.856
0.770
0.655
0.786
0.653
0.837
0.970
0.567
On the respondents’ motivational factors to start up a business, factor analysis was performed by grouping the
items into fove categories: intrinsic rewards, extrinsic rewards, independence/autonomy, family security and
change management. Table 3 indicates that the main three motivational factors, among others, are extrinsic
rewards (M=4.32; SD=0.518), Change management (M=4.19; SD 0.449) and intrinsic rewards as well as
independent/autonomy (M=4.14; SD=0.417, M=4.14; SD 0.425 respectively).
International Journal of Business and Social Science Vol. 3 No. 19; October 2012
187
Table 3: Mean of Motivational Factors
Motivational Items Mean Std. Deviation
Intrinsic Rewards
- To enjoy the excitement
- To meet the challenge
- To prove I can do it
- To obtain personal growth
- To gain public recognition
- To be free from corporate bureaucracy
Average
4.10
4.15
4.23
4.22
4.34
3.78
4.14
0.657
0.657
0.601
0.573
0.475
0.837
0.417
Extrinsic Rewards
- To increase my personal income
- To increase my income opportunity
- To acquire personal wealth
Average
4.35
4.38
4.22
4.32
0.588
0.550
0.651
0.518
Independence/Autonomy
- To be my own boss
- To obtain self-employment
- To acquire personal security
- To allow for early retirement
- To maintain my personal freedom
- To control my own destiny
Average
4.26
4.22
4.30
3.69
4.27
4.12
4.14
0.676
0.595
0.460
0.899
0.610
0.652
0.425
Family Security
- To build a business to pass on
- To secure future for family members
- To take up family business
Average
4.32
4.22
3.61
4.05
0.466
0.648
0.933
0.466
Change Management
- To develop new ideas, innovations an
initiatives
- To respond to change
- To recognize and exploit opportunities
Average
4.11
4.32
4.13
4.19
0.644
0.468
0.625
0.449
Similarly, factor analysis was employed by grouping the obstacles/challenges items into three categories:
exogenous factors, exogenous factors (personal) and endogenous factors (financial and operational). Respondents
perceived the endogenous factors (such as lack of working capital/investment, high operating cost and fund) and
exogenous factors (such as strong competitors, high interest rate, high labour cost) would be obstacles/challenges
for them when starting up and sustaining new ventures. The results are presented in Table 4.
© Centre for Promoting Ideas, USA www.ijbssnet.com
188
Table 4: Mean of Obstacles/Challenges
Obstacles/Challenges items
Mean
Std. Deviation
Exogenous Factors
- High interest rate
- High labour cost
- Strict government regulations
- Tight labour market
- High taxes
- Lack of government support
- Strong competitor
Average
3.73
3.73
3.60
3.73
3.67
3.48
3.92
3.69
0.669
0.690
0.691
0.752
0.785
0.804
0.743
0.523
Exogenous Factors – Personal
- Stress
- Fear of failure
- Lack of business skill
- Lack of planning and long-sighted
- Excessive risk
Average
3.57
3.50
3.68
3.50
3.64
3.58
0.833
0.889
0.878
0.828
0.740
0.651
Endogenous Factors – Financial and
Operational
- High operating expenses
- Lack of working capital/ investment
- Fund
- Lack of good suppliers
Average
3.78
3.80
3.76
3.66
3.75
0.777
0.859
0.843
0.860
0.669
Respondents were also provided additional comments on what they thought the government could have done in
promoting entrepreneurship. On the whole, the respondents considered that the support from government is vital
in promoting entrepreneurship (M=3.90; SD=0.66), in terms of providing training and development programmes,
business guidance and expertise as well as financial assistance would be imperative and much needed by
entrepreneurs. The results are shown in Table 5.
Table 5: Mean of Government Supports/Assistance
Government Support/Assistance items
Mean
Std. Deviation
- Government support of innovation
- Provides training and development via
seminar/ workshop
- Provides guidance and expertise
- Provides financial assistance
- Deregulation in various sectors
- Tax incentives
Average
3.94
3.96
3.96
3.96
3.83
3.75
3.90
0.860
0.802
0.850
0.826
0.742
0.813
0.660
International Journal of Business and Social Science Vol. 3 No. 19; October 2012
189
T-Test and Anova
Several tests were conducted by employing t-test and ANOVA to examine if there is any difference in the major
variables of the study. Table 6 to 9 show the results of the analyses.
To assess gender and working experiences, an independent-sample t-test was conducted to compare the
entrepreneurial intention, motivational factors, and obstacles and challenges scores for males and females as well
as their working experiences.
Males students were found to be significantly higher entrepreneurial intention, motivational factors (intrinsic
rewards, extrinsic rewards, independence and autonomy, family security and change management) and obstacles
and challenges (endogenous factors, exogenous factors–personal and endogenous factors–financial and
operational) as compared to the female students. See Table 6.
Table 6: Differences in the major variables by gender
Variable
Mean
t-value Male Female
Entrepreneurial Intention
Motivational Factors
- Intrinsic rewards
- Extrinsic Rewards
- Independence/Autonomy
- Family security
- Change management
Obstacles/Challenges
- Exogenous factors
- Exogenous factors – personal
- Endogenous factors –
financial and operational
4.08
4.34
4.51
4.37
4.21
4.40
3.86
3.80
3.90
3.79
4.09
4.28
4.10
4.01
4.14
3.65
3.53
3.72
2.45*
2.87**
2.13*
3.14**
2.01*
2.70**
1.80
1.97*
1.26
* p
During this such a detailed file in relation to a study among university students in business start ups in malaysia motivations.
International Journal of Business and Social Science Vol. 3 No. 19; October 2012
181
A Study among University Students in Business Start-Ups in Malaysia: Motivations
and Obstacles to Become Entrepreneurs
Yeng Keat, Ooi
Shuhymee Ahmad
School of Business Management
College of Business
Universiti Utara Malaysia
Malaysia
Abstract
While most of the universities in Malaysia offer entrepreneurship courses today, little is known about how and
why an individual starting up and sustaining a new venture. This study examines and determines the perceptions
on entrepreneurship, motivators as well as obstacles and challenges faced by among 153 Universiti Utara
Malaysia’s undergraduate students to start up their new ventures by building on Moy, et al.’s (2001) study. In
doing so, this study contributes to the understanding of whether the students have high perception, which in turn,
motivates them to become entrepreneurs. Besides that, the imminent possible obstacles and challenges faced by
the students and the government support in promoting entrepreneurship are also examined in this study. Findings
reveal that motivators such as extrinsic rewards and change management inspire them to start up a new venture
whilst government support/assistance plays a significant role in promoting entrepreneurship. By contrast,
obstacle and challenge such as endogenous factor (financial and operational problems) seemingly impedes their
effort to launch a new venture. It is also revealed that gender and birth order affect one’s entrepreneurial
intention significantly. However, surprisingly, no difference was found in working experiences with one’s
entrepreneurial intention. Recommendations and future research are made based on the findings of the study.
Keywords: business start-ups, entrepreneurs, motivator, obstacle and challenges, university students
Introduction
As Malaysia is transforming from a middle-income economy to a high-income economy in 2020,
entrepreneurship has been identified as the key ‘driver’ to help the country’s aspiration in achieving its Hercules
goal. As a result, much attention and concerns about entrepreneurship have been intensified by, amongst others,
the government’s allocation for fundings as well as incentives for small and medium enterprises in order to
promote entrepreneurship.
Hence, entrepreneurship has become the main agenda in the country with the introduction of entrepreneurial
programmes and mechanisms that cater for the development of entrepreneurship activity. Such programmes and
mechanisms hope would stimulate the country’s economic growth which in turn would create more job
employment opportunities. This effort is crucial especially to check the unemployment problems among graduates
in the country that purportedly around 80000 nationwide. This is aggravated by the study by Md Yusof, et . al.
(2009) reported that only 1.1% (n=41925) of first degree graduates were self-employed.
Although much effort have been initiated and done by the Malaysian Government to promote more people, in
particlar students at institutions of higher learning, to become entrepreneurs, however, the knowledge about
students’ motivation as well as obstacles faced when starting up a venture, especially at the level of postgraduate,
is still sketchy. Hence, in order to foster the growth of entrepreneurs in the country as well as to assist them to
face any imminent obctacles confidently, it is imperative to understand the whole process of establishing a
venture, namely why and how a venture was established and operated (Moy et. al., 2001).
© Centre for Promoting Ideas, USA www.ijbssnet.com
182
The main objective of this study is to examine the undergraduate students’ perceptions on entrepreneurship, on
the motivators, obstacles and challenges as well as well the government support behind starting up and sustaining
a new venture. The study also attempts to examine if there are any differences of gender, birth order and working
experience with one’s entrepreneurial intention.
Motivational factors
Much research has been focused on the characteristics and motivational aspects of the entrepreneurs (see Kao
(1995), Koh (1996), Kuratko and Hogetts (2007), Liang and Dunn (2007), Shane, et. al, (2003), Zhuplev, et. al.
(1998)). This is mainly due to most businesses are carried out individually and thus entrepreneurs believed in
what they are doing and injects personal core values into how they build a business. Proper motivation is
important for new business owners or future entrepreneurs to go into business. Understanding what's driving an
individual to start a business is an important component of assessing oneself and his/her business-readiness.
Understanding a person’s motivations as well as ‘drivers’ to start up business will help an individual makes a
better decision about starting a business and can also help him/her knows if this is the right time to start a
business.
Motivation, in this instance, can be categorised into intrinsic and extrinsic motivation. To be motivated means to
be moved to do something. Therefore, a person that has high desire and enthusiastic ‘towards an end is considered
motivated’ whilst a person that has ‘no impetus or inspiration to act is thus characterisrised as unmotivated’ (Ryan
and Deci, 2000, pg 54). Intrinsic motivation reflects the desire for someone to do something simply because
he/she enjoys doing it while extrinsic motivation reflects the desire to do something due to external rewards such
as money and awards. Hence an individual that is intrinsically motivated has much enjoyment and passion to start
a business compared to individual that is extrinsically motivated (Simola, 2011).
Moy et. al. (2001) in their studies on Thailand and Hong Kong university students’ motivations to start up new
ventures indicated that in general motivators such as extrinsic rewards, independence/autonomy, intrinsic rewards,
family security and change management have made an individual to decide to choose entrepreneurship as their
future career. The findings are corresponded with that of a study by Kuratko and Hodgetts (2007) on
entrepreneurs’ goals in sustaining their business development. A study of Zhuplev, et. al. (1998) targeted on
Russia and American business owners to start up a business illustrated essentially identical motivators of the
business owners to lauch new ventures, i.e. self-accomplishment, material wealth, and security.
Challenges or obstacles and of sustaining a new venture
Even though studies have been concentrated much on motivational factors in starting up and sustaining a
business, the darkside of operating and maintaining, in particular a novel business, is also critical to ensure its
survival. Sustantial research has been attempted to identify and explain challenges or obstacles encountered by
entrepreneurs while starting up their new ventures. Growing evidence suggests that it is a normal process for any
novel entrepreneurs to face the challenges or obstacles during the early stage of establishing new ventures.
Therefore, entrepreneurs should be ready in nature to take those challenges or obstacles with open mind. Young
and Welsch (1993) identified that entrepreneurs face several obstacles, such as lack of financial assistance, lack of
information on various aspects of business, excessive taxation, and high rate of inflation. On the ther hand, a
study by Kozan, et. al. (2006) concurred that ‘financing difficulties hindered technological improvement and
resource aggregation’ for many small business owners in Turkey.
A study by Moy, et. al. (2001) advocated that exogenous and endogenous factors are the main
challenges/obstacles faced when starting and sustaining new ventures among students. Among them are: high
labour cost, high interest rate, strict government regulation (exogenous factors) and lack of managerial
experience, lack of technical knowldege, excessive risk (endogenous factors). These obstacles are found to be
similar to that of the study by Zhuplev, et. al. (1998) on Russian and American small business owners’
motivations and obstacles which revealed high taxes, hatred for government regulations and start-up capital were
the main obstacles for both countries business owners.
In the same note, Fleming (1996) in her longitudinal study on Ireland university students’ attitudes towards
business ownership process argued that several obstacles that militate against entrepreneurship, such as lack of
experience, or lack of finance, which hinder the path towards university students preferred future career choice.
International Journal of Business and Social Science Vol. 3 No. 19; October 2012
183
Government’s support
SMEs play a considerable role in a country’s economic growth through the creation of new businesses as well as
expanding the current businesses to new markets. Statictics showed that this type of business has contributed
significantly (64%) to the United States’ gross domestics product (Astrachan and Shanker, 2003). Likewise, in
Malaysia, SMEs have been the backbone for the country’s economic growth that contributed 37% to the GDP in
2010 (Kumar, 2009). It is also expected that SMEs will contribute to the country’s GDP to 40% by 2020 (New
Sabah Times, 2011). In this regard, SMEs are widely seen as a critical tool to solve current economic issues such
as unemployment and industry stagnation (Fakhrul and Wan Norhayate, 2011).
Hence, the government supports for the development of SMEs is increasing and there are several types of
activities that have been introduced and supported by the Government, including the establishment of agencies to
encourage entrepreneurship. MARA (Council of Trust for the Indigenous or Bumiputera of Malaysia) was
established in 1966 with the main objectives, among others, to assist, guide and train the Bumputera in rural aeras
to actively participate in bsuiness and industrial sectors (Buang, 2002). For example, some RM600 million loans
were set aside to an estimated 108000 SMEs in helping and sustaining their bsuienesses (Omar, 2006).
Gnyawali and Fogel (1994) argued that government can boost entrepreneurship through the assistance
programmes such as offer tax and other incentives, keep rules and regulations at a minimum as well as to provide
a conducive entrepreneurial environment. This is supported by Fogel (2001) in his study on entrepreneurial
development in Hungary, concluded that government should offer tax incentives and other sprecial programmes
for small business in order to improve entrepreneurial process. Similarly, a study on Thailand and Hong Kong
university students’ perception to be an entrepreneurs by Moy, et. al. (2001) indicated that there are four
categories for government assistance: financial support, friendly bsuienss environment, technical support and
expand new market and education and tarining programme.
Therefore it is essential to create the right entrepreneurial environment that really promotes the entrepreneurial
activity. A comprehensive government approach and support such as loans, business facilities, rules and
regulations and etc would definitely a key condition for success in nurturing and promoting entrepreneurship
(Klapper, 2004).
Demographic variables
There have been strands of studies suggesting that gender differences do occur in inclination towards
entrepreneurship or entrepreneurial behaviours. In particular, much research has shown that males are more likely
to venture into business compared to females (e.g. Dunn, 2004, Sandhu, et al. (2011) and Veciana, et al. (2005)).
Crant’s study of 181 undergraduate and postgraduate students in the US (1996) also indicates that male students
exhibit significantly higher entrepreneurial intention compared to female students. Perhaps this is mainly due to
the fact that many female students do not choose entrepreneurship as a major study as remarked by Menzies and
Tatroff (2006).
Apart from gender, it is found that birth order also influnces one’s entrepreneurial behaviour. Robinson and Hunt
(1992) found that being first-born in the family is significantly related to entrepreneurial inclination. Their studies
were corroborated by Koh’s (1996) study on business students in Hong Kong. Othman et al. (2005), on the other
hand, conclude that there is no significant difference between Chinese and Malay entrepreneurs and birth order in
their comparison study of 80 Chinese and Malay entrepreneurs in Malaysia.
Another interesting variable that used to associate with one’s entrepreneurial behaviour is entrepreneurial past
experiences. Much research (e.g., Lena and Wong 2003; Mukhtar et al. 1999) has recognised that individuals’
previous working experience positively or negatively influences entrepreneurial performance. Successful
entrepreneurs may have acquired the necessary knowledge and skills to succeed in the ventures that they are
already familiar with, and so would be able to capitalise on their experience in new ventures. Mukhtar, et al.
(1999) conclude that individuals with previous working experience tend to have higher inclination towards small-
and medium-sized employment. However, in their study of entrepreneurial intention among university students,
Kristiansen and Indarti (2004) found no statistically significant differences among Indonesian and Norwegian
students with entrepreneurial intention in relation to whether or not they had work experience.
© Centre for Promoting Ideas, USA www.ijbssnet.com
184
Methodology
The methodologies used in this study are given as folows:
Sample and procedure
A self-administered questionnaire with a cover letter was employed to collect data for the study. Questionnaires
were distrubuted to the respondents during class meetings to students who were taking Entrepreneurship and
Seminar in Entrepreneurship courses at UUM. Studnets were informed to return the quetsionnaires by placing
them in a box at the reception desk located at the Dean Office of respective schools. This method was similiar to
that of the study conducted by Lee, et al. (2006) that yielded a higher response rate among students as a sample. A
total of 200 set of questionnaires were distributed and 153 completed and returned the questionnaires, yielding a
76.5% response rate.
A survey was conducted at classes at Universiti Utara Malaysia. Classes involved were from Entrepreneurship
and Seminar in Entrepreneurship courses. The questionnaires were distributed to these groups of students using a
random sample of classes during the normal lecture session (Semester I/II 2011/2012 session). The students
selected were those in final year students as they are deemed to have a better understanding regarding future
careers (Super, 1990). In other words, those students would be in a better position of firming their vocational
goals based on their interest (Ooi, 2008).
Instrumentation
A self-administrated questionnaire was adapted from the previous studies by Moy, et. al. (2001). The
questionnaire, based on the 5-point Likert scale, consisted of five sections relating to the following issues:
motivators for starting up a new business, obstacles they faced when starting up a new business, operating and
sustaining a new business as well as government supports to facilitate the development of entrepreneurship. Apart
from this, respondents’ personal details such as family business history, family order and previous working
experience and etc that related to respondent’s interest to become an entrepreneur were also included for the
study.
Data analysis
Data collected from the survey was analysed by the statistical software SPSS version 19.0. Descriptive statistics
such as frequency distribution, mean and stardard deviation was used in the analysis.
Results
Table 1 presents the profile of respondents. The majority of respondents were females (82.4%) compared to males
(only 17.6%). Similar to the scenario of population of Malaysian university students, the campus is mainly
monopolised by female students. Most of the respondents’ age ranged between 20-25 years (98.7%) and they are
the eldest (30.1%) in the family. On top of that, the majority of the respondents were hailed from rural area
(54.2%), were studying in business management (39.2%) and have some working experience in private sector
(69.16%) though it is less than a year (94.17%) (Based on 120 respodents who had previous working experience).
Asked to indicate father’s or mother’s or guardian’s occupation, the respondents reported that their
fathers/guardians were employed staff and mothers/guardians were unemployed (full time housewife), with
39.2% and 51% respectively. A total of 52.3% of the resposdents believed that their parents/guardians did not
influence their future career.
International Journal of Business and Social Science Vol. 3 No. 19; October 2012
185
Table 1: Respondent Background
Respondent Characteristics Frequency Percentage (%)
Gender
Male
Female
Age
20 – 25 years old
26 – 30 years old
41 years old and above
Birth Order in Family
Only child
Second child
Eldest
Youngest
None of the above
Place of origin
Rural area
Urban area
Other
Programme of study
Business Management
Human Resource
Entrepreneurship
Marketing
Other
Working Experience
Yes
No
Working Period (based on 120 respondents )
Less than 1 year
3 – 5 years
Work Place (based on 120 respondents )
Government sector
Private sector
Relatives business
Other
Father’s / Guardian’s Occupation
Employed
Self-employed
In between jobs
unemployed
retired
other
Mother’s / Guardian’s Occupation
Employed
Self-employed
In between jobs
unemployed
retired
other
Parents’ / Guardians’ Influenced Career
Yes
No
27
126
151
1
1
3
39
46
30
35
83
67
3
60
4
40
4
45
120
33
113
7
14
83
20
3
60
57
2
6
25
3
37
17
1
78
12
8
73
80
17.6
82.4
98.7
0.7
0.7
2.0
25.5
30.1
19.6
22.9
54.2
43.8
2.0
39.2
2.6
26.1
2.6
29.4
78.4
21.6
94.17
5.83
11.67
69.16
16.67
2.5
39.2
37.3
1.3
3.9
16.3
2.0
24.2
11.1
0.7
51.0
7.8
5.2
47.7
52.3
© Centre for Promoting Ideas, USA www.ijbssnet.com
186
Respondents were asked to rate their intention to become entrepreneurs. On a five-point Likert scale with 5 being
strongly agree and 1 being strongly disagree, Table 2 shows that the respondents, in general, possess high
intention to become entrepreneurs (M=3.84; SD 0.57). Among the two reasons are they ‘want to be my own boss
(M=4.21; SD= 0.66), closely followed by ‘if I had opportunity and resources, I would like to start a business
(M=4.14; SD 0.65).
Table 2: Mean of students’ intention to become an entrepreneur after graduation
Items Mean Std. Deviation
- Prefer to be an entrepreneur rather than an
employee in a company
- Professional goal is to become an
entrepreneur
- Have thought seriously to start own business
after completing study
- Determined to create a firm in the future
- Want to be my own boss
- Prepared to do anything to be an
entrepreneur
- If had opportunity and resources, like to start
a business
- Will start business in the next 5 years
- entrepreneurship as career choice
Average
3.80
3.79
3.63
3.93
4.21
3.73
4.14
3.73
3.59
3.84
0.899
0.808
0.856
0.770
0.655
0.786
0.653
0.837
0.970
0.567
On the respondents’ motivational factors to start up a business, factor analysis was performed by grouping the
items into fove categories: intrinsic rewards, extrinsic rewards, independence/autonomy, family security and
change management. Table 3 indicates that the main three motivational factors, among others, are extrinsic
rewards (M=4.32; SD=0.518), Change management (M=4.19; SD 0.449) and intrinsic rewards as well as
independent/autonomy (M=4.14; SD=0.417, M=4.14; SD 0.425 respectively).
International Journal of Business and Social Science Vol. 3 No. 19; October 2012
187
Table 3: Mean of Motivational Factors
Motivational Items Mean Std. Deviation
Intrinsic Rewards
- To enjoy the excitement
- To meet the challenge
- To prove I can do it
- To obtain personal growth
- To gain public recognition
- To be free from corporate bureaucracy
Average
4.10
4.15
4.23
4.22
4.34
3.78
4.14
0.657
0.657
0.601
0.573
0.475
0.837
0.417
Extrinsic Rewards
- To increase my personal income
- To increase my income opportunity
- To acquire personal wealth
Average
4.35
4.38
4.22
4.32
0.588
0.550
0.651
0.518
Independence/Autonomy
- To be my own boss
- To obtain self-employment
- To acquire personal security
- To allow for early retirement
- To maintain my personal freedom
- To control my own destiny
Average
4.26
4.22
4.30
3.69
4.27
4.12
4.14
0.676
0.595
0.460
0.899
0.610
0.652
0.425
Family Security
- To build a business to pass on
- To secure future for family members
- To take up family business
Average
4.32
4.22
3.61
4.05
0.466
0.648
0.933
0.466
Change Management
- To develop new ideas, innovations an
initiatives
- To respond to change
- To recognize and exploit opportunities
Average
4.11
4.32
4.13
4.19
0.644
0.468
0.625
0.449
Similarly, factor analysis was employed by grouping the obstacles/challenges items into three categories:
exogenous factors, exogenous factors (personal) and endogenous factors (financial and operational). Respondents
perceived the endogenous factors (such as lack of working capital/investment, high operating cost and fund) and
exogenous factors (such as strong competitors, high interest rate, high labour cost) would be obstacles/challenges
for them when starting up and sustaining new ventures. The results are presented in Table 4.
© Centre for Promoting Ideas, USA www.ijbssnet.com
188
Table 4: Mean of Obstacles/Challenges
Obstacles/Challenges items
Mean
Std. Deviation
Exogenous Factors
- High interest rate
- High labour cost
- Strict government regulations
- Tight labour market
- High taxes
- Lack of government support
- Strong competitor
Average
3.73
3.73
3.60
3.73
3.67
3.48
3.92
3.69
0.669
0.690
0.691
0.752
0.785
0.804
0.743
0.523
Exogenous Factors – Personal
- Stress
- Fear of failure
- Lack of business skill
- Lack of planning and long-sighted
- Excessive risk
Average
3.57
3.50
3.68
3.50
3.64
3.58
0.833
0.889
0.878
0.828
0.740
0.651
Endogenous Factors – Financial and
Operational
- High operating expenses
- Lack of working capital/ investment
- Fund
- Lack of good suppliers
Average
3.78
3.80
3.76
3.66
3.75
0.777
0.859
0.843
0.860
0.669
Respondents were also provided additional comments on what they thought the government could have done in
promoting entrepreneurship. On the whole, the respondents considered that the support from government is vital
in promoting entrepreneurship (M=3.90; SD=0.66), in terms of providing training and development programmes,
business guidance and expertise as well as financial assistance would be imperative and much needed by
entrepreneurs. The results are shown in Table 5.
Table 5: Mean of Government Supports/Assistance
Government Support/Assistance items
Mean
Std. Deviation
- Government support of innovation
- Provides training and development via
seminar/ workshop
- Provides guidance and expertise
- Provides financial assistance
- Deregulation in various sectors
- Tax incentives
Average
3.94
3.96
3.96
3.96
3.83
3.75
3.90
0.860
0.802
0.850
0.826
0.742
0.813
0.660
International Journal of Business and Social Science Vol. 3 No. 19; October 2012
189
T-Test and Anova
Several tests were conducted by employing t-test and ANOVA to examine if there is any difference in the major
variables of the study. Table 6 to 9 show the results of the analyses.
To assess gender and working experiences, an independent-sample t-test was conducted to compare the
entrepreneurial intention, motivational factors, and obstacles and challenges scores for males and females as well
as their working experiences.
Males students were found to be significantly higher entrepreneurial intention, motivational factors (intrinsic
rewards, extrinsic rewards, independence and autonomy, family security and change management) and obstacles
and challenges (endogenous factors, exogenous factors–personal and endogenous factors–financial and
operational) as compared to the female students. See Table 6.
Table 6: Differences in the major variables by gender
Variable
Mean
t-value Male Female
Entrepreneurial Intention
Motivational Factors
- Intrinsic rewards
- Extrinsic Rewards
- Independence/Autonomy
- Family security
- Change management
Obstacles/Challenges
- Exogenous factors
- Exogenous factors – personal
- Endogenous factors –
financial and operational
4.08
4.34
4.51
4.37
4.21
4.40
3.86
3.80
3.90
3.79
4.09
4.28
4.10
4.01
4.14
3.65
3.53
3.72
2.45*
2.87**
2.13*
3.14**
2.01*
2.70**
1.80
1.97*
1.26
* p