Description
In this particular brief explanation regarding planned behavior entrepreneurship and intention to create a new venture.
Abstract. This paper attempts to
investigate whether young gra-
duates possess the leadership style
that is pre-requisite to become
entrepreneur. The paper further
examines the role of higher educa-
tion towards the desire of new
venture creation among young
graduates in developing economies
specially. This study analyzed the
response of 225 final-semester
students at different universities in
Islamabad, Rawalpindi and
Lahore. A questionnaire based
survey instrument was used. Result
of the present study shows that
education and new venture crea-
tion are positively and significantly
correlated. The results further
indicate that all variables used in
this study are significantly
correlated with intention to create
a new venture. The limitation of
this study is that it includes
business and economics discipline
students only. Further studies may
investigate and examine the
possibilities of similar outcomes
among students of other discipli-
nes including science, engineering,
medicine, agriculture and law etc.
The present study will, however,
provide insight to future policy
makers and planners to consider
strategies for optimally utilizing
the expertise and potentials of the
young graduates. The academi-
cians, educators, and university
authorities have rethink what to
teach? How to teach? In order to
effectively prepare-young gene-
ration for the forthcoming
challenges.
Keywords: entrepreneurship,
leadership style, new venture
creation, planned behavior, young
graduates.
PLANNED BEHAVIOR
ENTREPRENEURSHIP
AND INTENTION TO CREATE
A NEW VENTURE AMONG YOUNG
GRADUATES
H. Ahmad MUSHTAQ
Bahria University Islamabad, Pakistan
Shangrila Road, Sector E-8, Islamabad,
Pakistan
e-mail: [email protected]
Ahmed Imran HUNJRA
IQRA University Islamabad, Pakistan
5, Khayaban-e-Johar, H-9 Islamabad,
Pakistan
e-mail: [email protected]
G. S. K. NIAZI
Quaid-i-Azam, School of Management
Sciences,
Quaid-i-Azam University Islamabad,
Pakistan
e-mail: [email protected]
Kashif-Ur-REHMAN
IQRA University Islamabad, Pakistan
5, Khayaban-e-Johar, H-9 Islamabad,
Pakistan
e-mail: [email protected]
Rauf I. AZAM
University Institute of Management Sciences
University of Arid Agriculture
Shamsabad, Muree Road,
Rawalpindi, Pakistan
e-mail: [email protected]
Management & Marketing
Challenges for the Knowledge Society
(2011) Vol. 6, No. 3, pp. 437-456
Management & Marketing
438
1. Introduction
Entrepreneurship has emerged over the last couple of decades as possibly the
strongest economic force that world has ever witnessed. Commonly verbalizing that
entrepreneurship denotes the new enterprise formation (Gartner, 1985). Timmons
(1999) established a fascinating model of entrepreneurial course, which embraces that
novel business formation, is an extremely vibrant sense of balance procedure. It has
been years long debate that leaders are born or can be created through education and
training. Like it was also in the heated debate that entrepreneurs are born or can be
made through education till the planned theory of behavior was enacted (Ajzen, 1991).
There are two schools of thoughts that prevail in the context of
entrepreneurship; the nascent entrepreneurship which believes in psychological
behavior (nascent entrepreneurship talks about the locus of control, propensity to risk,
need to achieve) and planned behavior entrepreneurship, (PBT talks about learning,
intention, and behavior) which believes in learning and grooming (Henry et al., 2003;
Nabi et al., 2006; Stam et al., 2008). The term nascent entrepreneurs cover individuals
who have merely shown interest in starting a firm but may not have yet reached a
relatively advanced stage at which concrete actions are being undertaken to effect the
reasonably imminent possible birth of a new firm, and such studies also use a range of
means to identify what they term nascent entrepreneurs (Gartner et al., 2004).
The theory of designed behavior is exploited in entrepreneurship ever since
the 1990s, and it has facilitated a new approach to the intention conception. In line
with the popularity of designed theory of entrepreneurship, a visible increase in the
field of entrepreneurship education and training has also taken place in recent years.
Planned behavior (Ajzen, 1991) has been defined as, one of the most common
psychological theories used to explain and predict human behavior, including
entrepreneurship (Carr & Sequeira 2007; Kolvereid, 1996; Krueger & Carsrud, 1993;
Tkachev & Kolvereid, 1999). Entrepreneurship scholars generally argue that
entrepreneurial behavior is intentional and so best predicted by the measure of
intentions of an individual (Bird, 1988). Ajzen (1991) defines intentions as
“indications of how hard individuals are willing to try, of how much of an effort they
are planning to exert, to perform the behavior”.
Individual entrepreneurial intention is an invaluable construct in new business
creation (Thompson, 2009). Entrepreneurial intention has proved to be an imperative
and ongoing construct in entrepreneurship theory and research (Carr & Sequeira,
2007; Hmieleski & Corbett, 2006; Wilson et al., 2007). Entrepreneurship is often a
difficult and challenging task, as majority of new businesses fail. There is enough
evidence that the output of the new entering businesses is superior to that of the older
businesses that they swap (Haltiwanger, 2000). Previous research advocates that
entrepreneurs require entrepreneurial as well as managerial capabilities, the
managerial abilities are specifically significant as the business becomes bigger and to
sustain this thriving business augmentation.
Planned behavior entrepreneurship and intention to create a new venture
439
The entrepreneurship generally and new venture creation specifically plays
vital role to create employment opportunities all over the world. The private sector has
to fulfill its obligation and social responsibility and they can discharge their duties
through entrepreneurship and new venture creation. Pakistan along with their coalition
partners, the US and ISAF forces, have been engaged in fighting against Taliban and
other terrorist forces in Afghanistan. The young graduates, despite having good
training, are finding themselves in a dark and close alley simply because of ongoing
war on terror. Pakistani people generally and youth particularly are paying heavy cost
for this unrest in the area both physically and financially. The international investment
has declined to almost zero and MNCs are in doldrums. New J obs and openings have
drastically dropped but the positive side of it is that entrepreneurship interest has
shown rising trend among young graduates.
There is a wide gap between the Muslim, Asian and the Western culture. In
Asian countries generally and sub-continent specifically parents commit themselves to
educate their children, and intelligent students continue their education without any
break till they graduate (attain Master degree) so that they can help their families
because no social security system exists, whereas in the west, majority of the students
get first degree and leave education to participate in the practical life as employee or
employer.
The impact of culture on the conduct of individuals and entrepreneurs has been
discussed since long (Hofstede, 1980). There is significant difference among researchers
as to the nature and scope, while studying cultural dissimilarities as an important
variable for cross-national comparative outcomes (Harrison & McKinnon, 1999). There
are some differences between Western and Asian cultures. The foremost is
individualism and collectivism dimension as described by Gudykunst (1994). In light of
the Greetz perception, therefore, Western people are I-oriented and the self is combining
a concept (Greetz, 1973). It offers a viewpoint in thoughts, a track for action, a cause of
inspiration, and a locus in decision-making (Stewart, 1972). Asians, on the other hand,
are We-orientated people. They acquire their personality from their position they
embrace in the group. In other words, Asians feel, in a way overwhelmed with their
position in a group, and do not tend to hold a strong individual identity. Pakistani being
Muslim and Asian country people enjoys the collectivism. Aljunied (2005) stated from
Surah Un-Nisa in Quraan that human beings have basic responsibility towards each
other. Able-bodied men are expected to take care of women and children. The family
bond is described as the strongest of human ties.
The religion plays significant role in common day life and entrepreneurial
activities. Durkheim (1976) described that the recognition of religious faith is an
attribution of the eventual supremacy of society over the substandard person.
Strengthening of this value takes place through shared religious congregations that
strengthen a society’s cohesiveness and has been recognized with greater community
belonging (Putnam, 2001). Britain’s leading religion is Protestant Christianity with
church turnout falling to just 1 million people a week out of 60 million total
populations (Rowland, 2000). In Christianity there is no such example that it is
Management & Marketing
440
religious duty to initiate and conduct business. In Islamic culture the Prophet
Mohammed (May peace be upon him) was involved himself in commerce and trade
that seems to be sufficient to render a religion-based explanation (Uygur, 2009). The
Muslims all over the world follow this as Sunnah of Prophet Muhammad. It generally
is believed by the Muslims that if you start a business and organize it to earn living
then it is beneficial both in this world and hereafter. These religious duties keep young
graduates motivated.
Western people are doing everything for this materialistic and mortal world.
They work hard to achieve their personal goals and objectives. The goals of Islam are
not materialistic do not revolve around the personal gains only, rather they are to lead
life with a combination of materialistic and spiritual practices in agreement with the
philosophy of Al-Quraan and Sunnah of the Prophet Muhammad Peace Be Upon Him
(Farooqi, 2006). The Islamic rules are based on Islamic concepts of human well-being
and good life which stresses brotherhood and socio-economic justice as well as requires
a balance of both the material and spiritual needs of all humans (Chapra, 1992).
Westerners, on the contrary, believe in what they see and observe it in their lives. The
previous research studies state that internal locus of control is the primary characteristic
of entrepreneurial activities (Boone et al., 1996; Begley & Boyd, 1986; Ward, 1993).
The Western people believe in materialistic and worldly resources and they get
motivated because of personal gains and achievements. Previous Studies conducted in
the United States, Australia, and Britain on locus of control has been found to
differentiate entrepreneurs from the general public and distinguish successful from
unsuccessful entrepreneurs (Brockhaus, 1980; Cromie & Johns, 1983; Gilad, 1982).
The Muslim entrepreneurs are motivated both by internal and external locus
of control because they believe after hard work it is the Lord (Allah) who will give
them success and reward. As regard to locus of control, a person with an external
locus of control believes in fate and or powerful others who control outcomes relevant
to them (Ward, 1993). The Muslims do whatever is needed but then leave up to Allah.
As Allah says in Quraan, Surah Hud, Verse No. 6, “And there is not a best in the earth
but the substance there of dependent on Allah. He knoweth its habitation and its
repository. Allah is duty bound to give livings to every living entity”. Allah says in
Surah Aljumah, Verse No. 9, O ye who believe! When the call is heard for the prayer
of the day of congregation, haste unto remembrance of Allah and leave your trading.
That is better for you if ye did but know. The Quraan further says in Surah Aljumuah,
Verse No. 11, “Allah is the best provider”.
For the Wes self is a unifying concept, it provides a perspective in thinking, a
direction for activity, a source of motivation, a locus in decision-making and a limit to
group involvement (Stewart, 1972). The mindset of Western culture is that the purpose
of life is to achieve, succeed, and enjoy. Every comfort and luxury that can be
acquired must be attained at all costs. Thus life revolves around making money.
Everything can be sacrificed like family, parents, children and even religion for the
sake of money making.
Planned behavior entrepreneurship and intention to create a new venture
441
As stated by Farooqi (2006) the goals of Muslims and Islam are to lead life
with a combination of materialism and spiritualism in accordance with the teachings
of Al-Quran and Sunnah of the Prophet Muhammd (peace be upon him). Prophet
Muhammad Peace Be upon Him advised Muslims to be moderate in all their affairs
and described Islam as the middle way. Therefore, a balance in human endeavors is
necessary to ensure social well-being and continued development of human potential
(Ahmad, 1982).
Family is the point of centre in Muslim Asian cultures. In Muslim and Asian
cultures high value is given to elder people of the family. They get more respect as
they are more experienced and who have given in their best for the well-being of their
young. All important issues and matters are discussed in family and they work
together to achieve its goals. If they initiate business, every family member is ready to
support that business without any demands and interest. In West family system does
not prevail rather they believe in individualism and self. The life revolves around self
and everything is considered by self. Everyone is busy doing his/her own betterment
and they don’t have time for family. All the goods and bad have to be pocketed by
oneself. The West people are generally, skeptical and feel uneasy. By virtue of their
culture they are not open and friendly. The western people like to interact only with
those whom they know well, as a result of that they tend to keep distance with
strangers. On the other hand, Muslims and Asians like to participate and communicate
with others. The Muslims and Asians are much open minded and friendly people.
They get in touch with friends of friends even and become part of bigger network. In
these circumstances the present study is going to explore how young graduates get
motivated to initiate their businesses after completing their studies and what are their
motivational aspects.
This paper focuses on to investigate whether young graduates have the
leadership skills that are required to become part of entrepreneurship and
entrepreneurs. The study will explore the role of culture to motivate young
entrepreneurs who are intending to initiate their business. The present study also
investigates the role of higher education and how it influences the attraction,
networking support, entrepreneurial capabilities, self-independence and self-reliance
in motivating the young students to initiate, their own, new businesses.
2. Literature Review
Prior research has shown that new venture creation is a planned and
consequently, intentional behavior (Shapero & Sokol, 1982; Bird, 1988; Autio et al.,
1997; Tkachev & Kolvereid, 1999). The intention conception presumed that new
business formation is a deliberate and designed behavior (Krueger & Carsrud, 1993).
The theory of designed behaviour (Ajzen, 1991), exploited in entrepreneurship ever
since the 1990s, has facilitated a new approach to the intention conception. Several
studies have shown the importance and effectiveness of university education in
anticipating and clarifying individual behaviors’ connected to the creation of a
Management & Marketing
442
company (Kolvereid, 1996; Krueger, 1993). Education and training in
entrepreneurship have an instant influence on the approach of students and their
behavioral intention (Kolvereid & Moen, 1997), which indicates that there should be a
considerable disparity among students who have pursued an entrepreneurship course
and those who did not.
In today’s environment education has an important role to play in promoting
both entrepreneurship and entrepreneurs. Entrepreneurial opportunities and
entrepreneurial intention leads to new enterprise formation and development in
Pakistan. For new venture creation entrepreneurs usually rely on network support,
social norms, perception of feasibility, and entrepreneurial experience. Almost every
university in Pakistan is offering management sciences and entrepreneurship course
both at bachelor and master level degree programs. It is the high time to set the minds
of young graduates towards entrepreneurship and allure them to become
entrepreneurs. Based on the modern theory and literature the study testifies:
H1: It is proposed that higher education is positively associated with intention
to create new venture among young graduates.
The rising demand of entrepreneurship learning both at undergraduate and
graduate echelons reveals the requirement for graduates to depart university prepared
with the understanding and expertise essential to carry on in modern day’s competitive
setting. After gaining the required entrepreneurial skills and abilities graduating
students attitude have changed and they were more attracted towards entrepreneurship.
It was observed that higher degree knowledge of diverse entrepreneurial
characteristics had unquestionably added extra practical insights regarding
entrepreneurial action among young graduates and thus in some way persuading
intentions (Ajzen, 2002). The importance of know-how and learning has broadly
drawn attention, specifically to the enhanced information the education is providing
(Cooper, 1985). The judgment to turn out to be an entrepreneur might be conceivably
well thought-out as intentional and careful mind set and this judgment is influenced by
education (Krueger et al., 2000). Based on this literature, the study testifies:
H2: The higher the education is, the greater the professional attraction
towards creating new ventures among young graduates will be.
There is a long history of research on networks in entrepreneurship literature.
In particular, all studies about entrepreneurial networks say that network ties of a
start-up exist on the interpersonal level of social contacts directly developed by its
entrepreneur (Gartner & Carter, 2003). At a general level, researchers sustain the idea
that previous entrepreneurial experience tends to enlarge the set of social networks
useful for the start-up’s growth as well as to increase their heterogeneity (Mosey &
Wright, 2007). Social capital can be a useful resource for the launch of a new venture
since it allows them to bridge new external social networks to provide necessary
entrepreneurial resources (Putnam, 2000; Adler & Known, 2002). The presence of a
serial entrepreneur has important reputational and signaling effects for the
Planned behavior entrepreneurship and intention to create a new venture
443
development of new social networks necessary to sustain the growth of a new venture
focused on global opportunities (Stuart et al., 1999; Lechner et al., 2006). Based on
the literature, the study asserts:
H3: The higher the education is, the greater the networking support among
young graduates will be.
Planned flexibility passes on to personal capability to act in response to
diverse claims from forceful atmosphere. Sanchez (1995) defined strategic capability
as capacity to take action to a variety of claims from energetic competitive settings. A
study pointed out that environment changes promptly than businesses, spending in
capability confer organizations the elasticity to act in response to ambiguity is
significantly invaluable (Kogut & Kulatilaka, 2001). Capabilities are described as
“multifaceted bunches of abilities and collected information that allow companies to
organize actions and put together all assets” (Day, 1990). Bingham & Eisenhardt
(2008) pointed out, distinctiveness arises if an individual or firm has access to sources
that is hard to acquire lawfully by competitors. A study described that capabilities are
regarding gaining, positioning, and influencing available sources to assist and figure
out a business (Pavlou & El Sawy, 2009). On the basis of literature, the study
proposed:
H4: The higher the education is, the greater the element of entrepreneurial
capabilities among young graduates will be.
The importance and awareness regarding the economic independence and the
desire for liberation from degrade patriarchal framework had marked the entry of
young graduates in the sphere of entrepreneurship and they are more willing to create
new ventures. The higher education carves various asset accumulation strategies
among young graduates for particular socioeconomic conditions (Shapiro & Wolff,
2001). It is stated that the renowned economic independence indicators to inquire
which factors of economic guiding principle and the institutional structure influence
the provision of entrepreneurs in modern day civilization (Gwartney & Lawson,
2005). Keeping in view the theory, the study claims:
H5: The higher the education is, the greater the element of self independence
among young graduates will be.
The self reliance has an affirmative middle of stuff, but academics and
intellectuals are duty bound to give it a particular definition, actually, that would be
the only independent means of defining the term "self-reliance". The requirements for
local substitutes and self-reliance have been heard in unambiguous expressions by
various scholars (Brett, 1988). The creativeness and modernization among young
graduates opted latest methods and knowledge to apply into local conditions (Acho-
chi, 1998). Self-reliant endeavor started against the milieu of economic reorganization
since the late 80s (Fonchingong & Fonjong, 2002). Self-reliance is defined as a
mindset that observes individuals mind and physical resources, as the basic reserve to
Management & Marketing
444
describe on in the search of one’s aims and goals, and discovers sentimental
accomplishment not only in attaining the objectives but encompassing them by means
of personal resources (Rahman, 1993). It is therefore, on the basis of literature the
study asserts:
H6: The higher the education is, the greater the element of self-reliance
among young graduates will be.
3. Methodology
3.1. Sample
In this research 300 questionnaires were distributed among those final
semester students at various universities in twin cities (Islamabad and Rawalpindi) and
Lahore Pakistan but 239 filled questionnaires were received. Out of those 239
questionnaires 14 were not properly filled and excluded from analysis and remaining
225 were processed in this study. The sample of this study was divided into two broad
categories consisting of male and female students, and this was further sub-divided
according to their specialized discipline and age groups.
3.2. Procedure and Measures
For data collection survey based questionnaires were distributed among three
hundred respondents comprising of last semester students of different university
located in Islamabad and Rawalpindi and Lahore. Before administering the
questionnaire all the questions were explained to the respondents, so that respondents
filled in the questionnaires easily and comfortably. One questionnaire was given to
each respondent. In the questionnaire the respondent was ask about their gender, age
and major, intention to venture creation, perceived desirability, support network,
social norms, and perception of feasibility.
The statistical package for social sciences program (SPSS) was used for
analyzing data. All the items were analyzed and then compare them with each other
and then categorize. After that all items were prioritized according to the factors asked
in the questionnaire. Different Scales were used to measure the variables that vary
from item to item in the questionnaire. In section one the nominal scale was used for
first three questions. The scale used to measure section two of the questionnaire that is
“Planned Behaviour Entrepreneurship and Intention to Create New Venture among
Young Graduates” was 5-Point Llikert scale and the scale used to measure new
venture creation (six items), professional attraction (four items), networking support
(three items), entrepreneurial capability (four items) were measured by using scale
(Linan et al., 2008), self-independence was measured by scale (Kolvereid, 1996), and
Planned behavior entrepreneurship and intention to create a new venture
445
self-reliance was measured (Triandis et al., 1985). The data collection was found to be
a tedious job generally and more difficult in developing economies like Pakistan.
Table 1
Reliability of Measurements (N=225)
Variables Items Cronbach alpha
Intention to venture creation 6 0.654
Professional attraction 4 0.601
Networking support 3 0.603
Entrepreneurial capability 4 0.650
Self-independence 4 0.609
Self-reliance 4 0.647
The results of the above table demonstrate the reliability of data, the intention
to venture creation with reliability of 65 percent and the professional attraction has
reliability of (60 percent), the Cronbach Alpha of Entrepreneurial capabilities is 0.650,
the Self Independency, the reliability is 0.609, Network Support has reliability of
0.603 and the reliability for self reliance Cronbach alpha is 0.650 for this variable.
4. Results and Discussions
To obtain the objective of the study various tests are performed for analysis
and the results are given below.
4.1. Results
In this study 70 percent respondents are male and 30 percent are female
participants. Out of 225 respondents 156 or 69.3% are male with age bracket 18-33
years and majority of the subjects have age bracket 22-27 years old. The potential
respondents are from different discipline and almost two third having economics and
finance as their major subjects.
Table 2
Group statistics with respect to all variables: (N=225)
Variables Mean Std. Deviation t-statistics p-value
Intention to venture creation 2.3741 0.72181 49.335 0.000
Professional attraction 2.4000 0.79127 45.496 0.000
Networking support 2.9585 0.94031 47.195 0.000
Entrepreneurial capability 2.7933 0.88234 47.487 0.000
Self-independence 2.6944 0.74043 54.585 0.000
Self-reliance 2.7622 0.81805 50.649 0.000
P value (p <.0001)
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446
The results of the Table 2 demonstrate the mean, standard deviation, t-value,
p-value and significance of all variables used in this study. The mean results of each
variable show that almost respondents are agreed because the mean value is near to
level of agreement (agree =2) and mostly students are in favor of start their own
business after completing their graduation and have given their response about all
variables positively. Whereas, further table depicts the level of significant of each
variable, thus all variables are highly significant because p-value is less than 0.05.
Table 3
Person correlation matrix for all variables: (N=225)
Variables 1 2 3 4 5 6
Intention to
venture creation
Pearson
Correlation
Sig. (2-
tailed)
N 225
Professional
attraction
Pearson
Correlation
.420(**)
Sig. (2-
tailed)
.000
N 225 225
Networking
support
Pearson
Correlation
.388(**) .473(**)
Sig. (2-
tailed)
.000 .000
N 225 225 225
Entrepreneurial
capability
Pearson
Correlation
.295(**) .402(**) .525(**)
Sig. (2-
tailed)
.000 .000 .000
N 225 225 225
Self-
independence
Pearson
Correlation
.151(*) .287(**) .288(**) .455(**)
Sig. (2-
tailed)
.024 .000 .000 .000
N 225 225 225 225 225
Self-reliance Pearson
Correlation
Sig. (2-
tailed)
N
.244(**)
.000
225
.381(**)
.000
225
.390(**)
.000
225
.757(**)
.000
225
.740(**)
.000
225
225
* Correlation is significant at the 0.05 level (2-tailed).
** Correlation is significant at the 0.01 level (2-tailed).
Planned behavior entrepreneurship and intention to create a new venture
447
The results of Table 3 reveal the correlation among all variables; it
summarizes the values of Pearson Coefficient of correlation and their significance. It
is quite evident from the results that intention to venture creation is positively
correlated with professional attraction as value of Pearson Correlation Coefficient
0.420 and the relation is significant at 95% confidence level (p < 0.05). The
relationship between intention to venture creation and support network is also positive
and significant as Pearson Correlation Coefficient is 0.388. Intention to venture
creation and entrepreneurial capability are positively correlated, as the value of
Pearson Correlation Coefficient is 0.295. The result further depicts that intention to
venture creation and self independency has positive and significant relationship and
having Pearson Correlation Coefficient is 0.151. Their relationship is significant as
well (p <0.05) and at the last there is a positive and significant relationship between
intention to venture creation and self reliance and have the 0.244 value of Pearson
Correlation Coefficient. So, all independent variables are positively and significantly
correlated with intention to venture creation. Students are more motivated to start
their own business. The intention to venture creation is no more attached only to self
independency it is also accompanied by entrepreneurial capability, networking
support, self reliance and professional attraction.
4.2. Discussions
The present research study findings illustrate that higher education regarding
entrepreneurship and intention to create new venture among young graduates has
positive and highly significant effect and therefore, are strongly co-related. The study
further indicates that higher education influencing the intention to create new venture
among young graduates. It is apparent that current outcome validates the important
function of education in the improvement of entrepreneurial intention. This research
findings agree with the previous studies that higher education support intention to
create new venture (Krueger, 1993; Steward & Knowles, 2003; Rae, 2002; and
McMullan & Vesper, 2000).
It has been stated that by acquiring a certain level of education or set of
“skills, knowledge and personal characteristics” an individual is more probable to be
employable (Rae, 2007). The present study shows that higher education paved way to
attract young graduates towards new venture creation as they have acquired the
needed skills. The findings of this study are similar to various previous studies
(Baruch et al., 2006; Birch & Clements, 2006; Rae, 2005).
Entrepreneurship is the method during which persons and firms generate
worth by putting simultaneously exclusive bundle of sources to utilize opportunities
around themselves. The entrepreneurs are getting educated concerning entrepreneurial
aptitude simply by forming a new business and examining their succeeding
performance (Stam et al., 2008). In addition, networking enable people to get right to
use information, shrink operational expenditures by permitting the organization of
Management & Marketing
448
actions, and make possible combined decision-making (Grootaert & van Bastelaer,
2001).
A past study described networking persuade on the arrangement of intentions
and, consequently, on the individual’s new business-formation capacity (Lin, 2003).
Discursive diffusion replicates individual’s capabilities to understand how aspects in
the environment may operate or respond. It is observed that capabilities in marketing
and information technology are also interrelated to business performance, and the
organization’s capacity to maintain competitive lead (Conant et al., 1990; J aworski &
Kohli, 1993; Day, 1994). Wade & Hulland (2004) stated that capabilities submit to
reiterated samples exploited to take advantage of assets. Organizational and individual
capabilities facilitate in attaining and supporting competitive advantage is an
elementary concern in planned management (Teece et al., 1997). The current study
findings demonstrate that higher education and entrepreneurial capabilities are
positively and significantly correlated and this will enable young graduates to access
new capabilities to form new business.
A study described that this mind set is changing not just accidental but it is
because of a distinctive consequence of entrepreneurial activity. The young graduates
who desire to join self-employment and with a high intention to create new venture
obviously face obstacles to starting and running a successful business. Growing
personal independence from others is such a primary skill that is needed to be taught
both at college and university to polish entrepreneurial intentions. Rapid technological
change likewise complicates career decision-making and diminishes the likelihood of
stable career progressions that yield higher earnings and benefits (Heinz, 2003). The
study at hand proves that higher education and self independence are positively and
significantly are correlated and will facilitate young graduates to make use of self
independence aspect for creating new ventures. It is stated that people like to be self-
sufficient (Niger-Thomas, 1997). Prior studies proved that support the idea of self-
sufficient (Monroe et al., 2007; Scott et al., 2007). The study confirms that higher the
education the greater will self reliance impact on intention to create new venture
among graduates.
5. Conclusions, Limitations and Implications
5.1. Conclusions
The main purpose of this study was to determine the entrepreneurial intention
among those young of students who attended course on management, entrepreneurship
and SME and the firmness of this intention for longer time. Ajzen’s intention model
was used in this study to achieve the objective. Entrepreneurial abilities consist of
mechanism that is extremely deep-seated in an individual’s surroundings (traits,
personality, attitudes, social role and self-image) and at the same time these skills,
knowledge and experience can also be obtained at work or by virtue of training and
education (Man & Lau, 2005). The present study proved that higher education grooms
Planned behavior entrepreneurship and intention to create a new venture
449
young graduates and prepared them for new venture creation. The current study
confirms that young graduates are more willing to form new businesses after gaining
the relevant business and entrepreneurship education.
The present study shows that networking and new venture creation are
positively and significantly correlated. The networking helps young graduates to
access information and other required assets to start their own business. The higher the
rate of networking among students the greater will be the chance of new venture
creation because they acquire whatever is necessary to start new business. The study
result shows that higher education and entrepreneurial self independence is positively
and significantly correlated.
Self-help initiatives enable the people to look inwards by rallying local
resources and efforts (Anyanwu, 1992). The current the economic crisis reduced
government funding for new projects and the government failed to create jobs the
people generally and educated young particularly resorted to self-reliance. The study
at hand proves that higher education and self-reliance is positive and significantly
correlated. This study explains that young graduates have sense of achievement and
they are capable of taking risk in this uncertainty environment. On the bases of results
this study concludes that all variables, included in the study, play a vital role in new
venturing and are significantly correlated to each other. Networking support,
entrepreneurial capability, self-independence and self-reliance are also positively and
significantly correlated with intention to venture creation. Therefore, based on the
findings the study concludes that young students are more motivated towards new
venture creation and start their own businesses.
5.2. Limitations
Similar to previous studies, the present study is not an exception and has some
notice able limitations. The first limitation of the study is the geographical range of the
sample for this study. The study included sample only the twin cities of (Islamabad
and Rawalpindi) and Lahore which may not give a true picture regarding the rest of
the population and the country. There is a chance that further investigation on the
basis of varied sample regarding entrepreneurial intentions will vary across local and
national changes.
The other limitation of the study is that it includes business and economics
discipline students only. In future a study is needed to investigate and examine to
include all files of students including science, engineering, medicine, and law
disciplines also. This would help to understand the thinking process of young
graduates irrespective of their field of study and this will enable to see how young and
educated class towards entrepreneurship generally and intentions to create new
venture particularly.
Management & Marketing
450
5.3. Implications
Entrepreneurship is becoming popular all over the world and all walks of life.
Same is the case with young graduates and they are not an exception. There are two
schools of thoughts when it comes to entrepreneurship; the nascent entrepreneurship
and planned entrepreneurship.
The present study will provide insight to future policy makers and planners to
think about this young generation to exploit their expertise and potential. They can
chart a policy which gives them a platform to maximize their innovative and creative
ideas. The competition is mounting day by day in all walks of life and same is the case
with employment. It is becoming almost impossible for the governments to create jobs
for intended workforce generally and young graduate specifically. This young
potential can be utilized only if there is a strong entrepreneurial policy is being
crafted. The entrepreneurship will be last resort in the face of unemployment and
young students will make use of this golden opportunity to be successful entrepreneur.
This study will help and enable colleges and universities to understand the
role of entrepreneurship in the times to come. The academicians, educators, and
university authorities have to think and rethink what is to be taught and how to teach
and to prepare younger generations for the forthcoming challenges. The study will
create room for further research to explore ways and means to promote and encourage
entrepreneurs generally and young students particularly.
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Annex 1
Questionnaire
Planned Behavior among Young Graduates and Intention to Create New Venture
Instructions
(1= strongly agree, 2= agree, 3= Neutral, 4= Disagree, 5= strongly disagree)
Intention to venture Creation: Below is situations on your intentions to
create a business.
Q# ITEMS 1 2 3 4 5
1 I’m ready to make anything to be an entrepreneur
2 My professional goal is becoming an entrepreneur
3 I will make every effort to start and run my own firm
4 I’m determined to create a firm in the future
5 I have very seriously thought in starting a firm
6 I’ve got the firm intention to start a firm some day
Professional Attraction: Below are statements on your professional attraction
(perception of desirability) that can influence you to develop intention to start a
business.
Q# ITEMS 1 2 3 4 5
1 A career as entrepreneur is attractive for me
2 If I had the opportunity and resources, I’d like to start a firm
3 Among various options, I’d rather be an entrepreneur
4 Being an entrepreneur implies more advantages than
disadvantages to me
Entrepreneurial Capability: Below are statements about Entrepreneurial
capability (perception on feasible) factors that can influence you to develop intention
to start a business.
Q# ITEMS 1 2 3 4 5
1 Start a firm and keep it working would be easy for me
2 I’m prepared to start a viable firm
3 I can control the creation process of a new firm
4 I know the necessary practical details to start a firm
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456
Networking Support: If you decided to create a firm, people in your close
environment would approve of that decision?
Q# ITEMS 1 2 3 4 5
15 Your close family
16 Your friends
17 Your colleagues
Self Independency: Below are statements related to authority and autonomy
in venture creation?
Q# ITEMS 1 2 3 4 5
1 I look for independence
2 I want decision-making power
3 I look for a position of authority
4 I would like to be my own boss
Self Reliance: Below are statements related to authority and autonomy in
venture creation?
Q# ITEMS 1 2 3 4 5
1 I usually struggle through a personal problem by myself
2 One should live one's life independently
3 What happens to me is my own doing
4 To be superior, a person must stand alone
doc_776422929.pdf
In this particular brief explanation regarding planned behavior entrepreneurship and intention to create a new venture.
Abstract. This paper attempts to
investigate whether young gra-
duates possess the leadership style
that is pre-requisite to become
entrepreneur. The paper further
examines the role of higher educa-
tion towards the desire of new
venture creation among young
graduates in developing economies
specially. This study analyzed the
response of 225 final-semester
students at different universities in
Islamabad, Rawalpindi and
Lahore. A questionnaire based
survey instrument was used. Result
of the present study shows that
education and new venture crea-
tion are positively and significantly
correlated. The results further
indicate that all variables used in
this study are significantly
correlated with intention to create
a new venture. The limitation of
this study is that it includes
business and economics discipline
students only. Further studies may
investigate and examine the
possibilities of similar outcomes
among students of other discipli-
nes including science, engineering,
medicine, agriculture and law etc.
The present study will, however,
provide insight to future policy
makers and planners to consider
strategies for optimally utilizing
the expertise and potentials of the
young graduates. The academi-
cians, educators, and university
authorities have rethink what to
teach? How to teach? In order to
effectively prepare-young gene-
ration for the forthcoming
challenges.
Keywords: entrepreneurship,
leadership style, new venture
creation, planned behavior, young
graduates.
PLANNED BEHAVIOR
ENTREPRENEURSHIP
AND INTENTION TO CREATE
A NEW VENTURE AMONG YOUNG
GRADUATES
H. Ahmad MUSHTAQ
Bahria University Islamabad, Pakistan
Shangrila Road, Sector E-8, Islamabad,
Pakistan
e-mail: [email protected]
Ahmed Imran HUNJRA
IQRA University Islamabad, Pakistan
5, Khayaban-e-Johar, H-9 Islamabad,
Pakistan
e-mail: [email protected]
G. S. K. NIAZI
Quaid-i-Azam, School of Management
Sciences,
Quaid-i-Azam University Islamabad,
Pakistan
e-mail: [email protected]
Kashif-Ur-REHMAN
IQRA University Islamabad, Pakistan
5, Khayaban-e-Johar, H-9 Islamabad,
Pakistan
e-mail: [email protected]
Rauf I. AZAM
University Institute of Management Sciences
University of Arid Agriculture
Shamsabad, Muree Road,
Rawalpindi, Pakistan
e-mail: [email protected]
Management & Marketing
Challenges for the Knowledge Society
(2011) Vol. 6, No. 3, pp. 437-456
Management & Marketing
438
1. Introduction
Entrepreneurship has emerged over the last couple of decades as possibly the
strongest economic force that world has ever witnessed. Commonly verbalizing that
entrepreneurship denotes the new enterprise formation (Gartner, 1985). Timmons
(1999) established a fascinating model of entrepreneurial course, which embraces that
novel business formation, is an extremely vibrant sense of balance procedure. It has
been years long debate that leaders are born or can be created through education and
training. Like it was also in the heated debate that entrepreneurs are born or can be
made through education till the planned theory of behavior was enacted (Ajzen, 1991).
There are two schools of thoughts that prevail in the context of
entrepreneurship; the nascent entrepreneurship which believes in psychological
behavior (nascent entrepreneurship talks about the locus of control, propensity to risk,
need to achieve) and planned behavior entrepreneurship, (PBT talks about learning,
intention, and behavior) which believes in learning and grooming (Henry et al., 2003;
Nabi et al., 2006; Stam et al., 2008). The term nascent entrepreneurs cover individuals
who have merely shown interest in starting a firm but may not have yet reached a
relatively advanced stage at which concrete actions are being undertaken to effect the
reasonably imminent possible birth of a new firm, and such studies also use a range of
means to identify what they term nascent entrepreneurs (Gartner et al., 2004).
The theory of designed behavior is exploited in entrepreneurship ever since
the 1990s, and it has facilitated a new approach to the intention conception. In line
with the popularity of designed theory of entrepreneurship, a visible increase in the
field of entrepreneurship education and training has also taken place in recent years.
Planned behavior (Ajzen, 1991) has been defined as, one of the most common
psychological theories used to explain and predict human behavior, including
entrepreneurship (Carr & Sequeira 2007; Kolvereid, 1996; Krueger & Carsrud, 1993;
Tkachev & Kolvereid, 1999). Entrepreneurship scholars generally argue that
entrepreneurial behavior is intentional and so best predicted by the measure of
intentions of an individual (Bird, 1988). Ajzen (1991) defines intentions as
“indications of how hard individuals are willing to try, of how much of an effort they
are planning to exert, to perform the behavior”.
Individual entrepreneurial intention is an invaluable construct in new business
creation (Thompson, 2009). Entrepreneurial intention has proved to be an imperative
and ongoing construct in entrepreneurship theory and research (Carr & Sequeira,
2007; Hmieleski & Corbett, 2006; Wilson et al., 2007). Entrepreneurship is often a
difficult and challenging task, as majority of new businesses fail. There is enough
evidence that the output of the new entering businesses is superior to that of the older
businesses that they swap (Haltiwanger, 2000). Previous research advocates that
entrepreneurs require entrepreneurial as well as managerial capabilities, the
managerial abilities are specifically significant as the business becomes bigger and to
sustain this thriving business augmentation.
Planned behavior entrepreneurship and intention to create a new venture
439
The entrepreneurship generally and new venture creation specifically plays
vital role to create employment opportunities all over the world. The private sector has
to fulfill its obligation and social responsibility and they can discharge their duties
through entrepreneurship and new venture creation. Pakistan along with their coalition
partners, the US and ISAF forces, have been engaged in fighting against Taliban and
other terrorist forces in Afghanistan. The young graduates, despite having good
training, are finding themselves in a dark and close alley simply because of ongoing
war on terror. Pakistani people generally and youth particularly are paying heavy cost
for this unrest in the area both physically and financially. The international investment
has declined to almost zero and MNCs are in doldrums. New J obs and openings have
drastically dropped but the positive side of it is that entrepreneurship interest has
shown rising trend among young graduates.
There is a wide gap between the Muslim, Asian and the Western culture. In
Asian countries generally and sub-continent specifically parents commit themselves to
educate their children, and intelligent students continue their education without any
break till they graduate (attain Master degree) so that they can help their families
because no social security system exists, whereas in the west, majority of the students
get first degree and leave education to participate in the practical life as employee or
employer.
The impact of culture on the conduct of individuals and entrepreneurs has been
discussed since long (Hofstede, 1980). There is significant difference among researchers
as to the nature and scope, while studying cultural dissimilarities as an important
variable for cross-national comparative outcomes (Harrison & McKinnon, 1999). There
are some differences between Western and Asian cultures. The foremost is
individualism and collectivism dimension as described by Gudykunst (1994). In light of
the Greetz perception, therefore, Western people are I-oriented and the self is combining
a concept (Greetz, 1973). It offers a viewpoint in thoughts, a track for action, a cause of
inspiration, and a locus in decision-making (Stewart, 1972). Asians, on the other hand,
are We-orientated people. They acquire their personality from their position they
embrace in the group. In other words, Asians feel, in a way overwhelmed with their
position in a group, and do not tend to hold a strong individual identity. Pakistani being
Muslim and Asian country people enjoys the collectivism. Aljunied (2005) stated from
Surah Un-Nisa in Quraan that human beings have basic responsibility towards each
other. Able-bodied men are expected to take care of women and children. The family
bond is described as the strongest of human ties.
The religion plays significant role in common day life and entrepreneurial
activities. Durkheim (1976) described that the recognition of religious faith is an
attribution of the eventual supremacy of society over the substandard person.
Strengthening of this value takes place through shared religious congregations that
strengthen a society’s cohesiveness and has been recognized with greater community
belonging (Putnam, 2001). Britain’s leading religion is Protestant Christianity with
church turnout falling to just 1 million people a week out of 60 million total
populations (Rowland, 2000). In Christianity there is no such example that it is
Management & Marketing
440
religious duty to initiate and conduct business. In Islamic culture the Prophet
Mohammed (May peace be upon him) was involved himself in commerce and trade
that seems to be sufficient to render a religion-based explanation (Uygur, 2009). The
Muslims all over the world follow this as Sunnah of Prophet Muhammad. It generally
is believed by the Muslims that if you start a business and organize it to earn living
then it is beneficial both in this world and hereafter. These religious duties keep young
graduates motivated.
Western people are doing everything for this materialistic and mortal world.
They work hard to achieve their personal goals and objectives. The goals of Islam are
not materialistic do not revolve around the personal gains only, rather they are to lead
life with a combination of materialistic and spiritual practices in agreement with the
philosophy of Al-Quraan and Sunnah of the Prophet Muhammad Peace Be Upon Him
(Farooqi, 2006). The Islamic rules are based on Islamic concepts of human well-being
and good life which stresses brotherhood and socio-economic justice as well as requires
a balance of both the material and spiritual needs of all humans (Chapra, 1992).
Westerners, on the contrary, believe in what they see and observe it in their lives. The
previous research studies state that internal locus of control is the primary characteristic
of entrepreneurial activities (Boone et al., 1996; Begley & Boyd, 1986; Ward, 1993).
The Western people believe in materialistic and worldly resources and they get
motivated because of personal gains and achievements. Previous Studies conducted in
the United States, Australia, and Britain on locus of control has been found to
differentiate entrepreneurs from the general public and distinguish successful from
unsuccessful entrepreneurs (Brockhaus, 1980; Cromie & Johns, 1983; Gilad, 1982).
The Muslim entrepreneurs are motivated both by internal and external locus
of control because they believe after hard work it is the Lord (Allah) who will give
them success and reward. As regard to locus of control, a person with an external
locus of control believes in fate and or powerful others who control outcomes relevant
to them (Ward, 1993). The Muslims do whatever is needed but then leave up to Allah.
As Allah says in Quraan, Surah Hud, Verse No. 6, “And there is not a best in the earth
but the substance there of dependent on Allah. He knoweth its habitation and its
repository. Allah is duty bound to give livings to every living entity”. Allah says in
Surah Aljumah, Verse No. 9, O ye who believe! When the call is heard for the prayer
of the day of congregation, haste unto remembrance of Allah and leave your trading.
That is better for you if ye did but know. The Quraan further says in Surah Aljumuah,
Verse No. 11, “Allah is the best provider”.
For the Wes self is a unifying concept, it provides a perspective in thinking, a
direction for activity, a source of motivation, a locus in decision-making and a limit to
group involvement (Stewart, 1972). The mindset of Western culture is that the purpose
of life is to achieve, succeed, and enjoy. Every comfort and luxury that can be
acquired must be attained at all costs. Thus life revolves around making money.
Everything can be sacrificed like family, parents, children and even religion for the
sake of money making.
Planned behavior entrepreneurship and intention to create a new venture
441
As stated by Farooqi (2006) the goals of Muslims and Islam are to lead life
with a combination of materialism and spiritualism in accordance with the teachings
of Al-Quran and Sunnah of the Prophet Muhammd (peace be upon him). Prophet
Muhammad Peace Be upon Him advised Muslims to be moderate in all their affairs
and described Islam as the middle way. Therefore, a balance in human endeavors is
necessary to ensure social well-being and continued development of human potential
(Ahmad, 1982).
Family is the point of centre in Muslim Asian cultures. In Muslim and Asian
cultures high value is given to elder people of the family. They get more respect as
they are more experienced and who have given in their best for the well-being of their
young. All important issues and matters are discussed in family and they work
together to achieve its goals. If they initiate business, every family member is ready to
support that business without any demands and interest. In West family system does
not prevail rather they believe in individualism and self. The life revolves around self
and everything is considered by self. Everyone is busy doing his/her own betterment
and they don’t have time for family. All the goods and bad have to be pocketed by
oneself. The West people are generally, skeptical and feel uneasy. By virtue of their
culture they are not open and friendly. The western people like to interact only with
those whom they know well, as a result of that they tend to keep distance with
strangers. On the other hand, Muslims and Asians like to participate and communicate
with others. The Muslims and Asians are much open minded and friendly people.
They get in touch with friends of friends even and become part of bigger network. In
these circumstances the present study is going to explore how young graduates get
motivated to initiate their businesses after completing their studies and what are their
motivational aspects.
This paper focuses on to investigate whether young graduates have the
leadership skills that are required to become part of entrepreneurship and
entrepreneurs. The study will explore the role of culture to motivate young
entrepreneurs who are intending to initiate their business. The present study also
investigates the role of higher education and how it influences the attraction,
networking support, entrepreneurial capabilities, self-independence and self-reliance
in motivating the young students to initiate, their own, new businesses.
2. Literature Review
Prior research has shown that new venture creation is a planned and
consequently, intentional behavior (Shapero & Sokol, 1982; Bird, 1988; Autio et al.,
1997; Tkachev & Kolvereid, 1999). The intention conception presumed that new
business formation is a deliberate and designed behavior (Krueger & Carsrud, 1993).
The theory of designed behaviour (Ajzen, 1991), exploited in entrepreneurship ever
since the 1990s, has facilitated a new approach to the intention conception. Several
studies have shown the importance and effectiveness of university education in
anticipating and clarifying individual behaviors’ connected to the creation of a
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442
company (Kolvereid, 1996; Krueger, 1993). Education and training in
entrepreneurship have an instant influence on the approach of students and their
behavioral intention (Kolvereid & Moen, 1997), which indicates that there should be a
considerable disparity among students who have pursued an entrepreneurship course
and those who did not.
In today’s environment education has an important role to play in promoting
both entrepreneurship and entrepreneurs. Entrepreneurial opportunities and
entrepreneurial intention leads to new enterprise formation and development in
Pakistan. For new venture creation entrepreneurs usually rely on network support,
social norms, perception of feasibility, and entrepreneurial experience. Almost every
university in Pakistan is offering management sciences and entrepreneurship course
both at bachelor and master level degree programs. It is the high time to set the minds
of young graduates towards entrepreneurship and allure them to become
entrepreneurs. Based on the modern theory and literature the study testifies:
H1: It is proposed that higher education is positively associated with intention
to create new venture among young graduates.
The rising demand of entrepreneurship learning both at undergraduate and
graduate echelons reveals the requirement for graduates to depart university prepared
with the understanding and expertise essential to carry on in modern day’s competitive
setting. After gaining the required entrepreneurial skills and abilities graduating
students attitude have changed and they were more attracted towards entrepreneurship.
It was observed that higher degree knowledge of diverse entrepreneurial
characteristics had unquestionably added extra practical insights regarding
entrepreneurial action among young graduates and thus in some way persuading
intentions (Ajzen, 2002). The importance of know-how and learning has broadly
drawn attention, specifically to the enhanced information the education is providing
(Cooper, 1985). The judgment to turn out to be an entrepreneur might be conceivably
well thought-out as intentional and careful mind set and this judgment is influenced by
education (Krueger et al., 2000). Based on this literature, the study testifies:
H2: The higher the education is, the greater the professional attraction
towards creating new ventures among young graduates will be.
There is a long history of research on networks in entrepreneurship literature.
In particular, all studies about entrepreneurial networks say that network ties of a
start-up exist on the interpersonal level of social contacts directly developed by its
entrepreneur (Gartner & Carter, 2003). At a general level, researchers sustain the idea
that previous entrepreneurial experience tends to enlarge the set of social networks
useful for the start-up’s growth as well as to increase their heterogeneity (Mosey &
Wright, 2007). Social capital can be a useful resource for the launch of a new venture
since it allows them to bridge new external social networks to provide necessary
entrepreneurial resources (Putnam, 2000; Adler & Known, 2002). The presence of a
serial entrepreneur has important reputational and signaling effects for the
Planned behavior entrepreneurship and intention to create a new venture
443
development of new social networks necessary to sustain the growth of a new venture
focused on global opportunities (Stuart et al., 1999; Lechner et al., 2006). Based on
the literature, the study asserts:
H3: The higher the education is, the greater the networking support among
young graduates will be.
Planned flexibility passes on to personal capability to act in response to
diverse claims from forceful atmosphere. Sanchez (1995) defined strategic capability
as capacity to take action to a variety of claims from energetic competitive settings. A
study pointed out that environment changes promptly than businesses, spending in
capability confer organizations the elasticity to act in response to ambiguity is
significantly invaluable (Kogut & Kulatilaka, 2001). Capabilities are described as
“multifaceted bunches of abilities and collected information that allow companies to
organize actions and put together all assets” (Day, 1990). Bingham & Eisenhardt
(2008) pointed out, distinctiveness arises if an individual or firm has access to sources
that is hard to acquire lawfully by competitors. A study described that capabilities are
regarding gaining, positioning, and influencing available sources to assist and figure
out a business (Pavlou & El Sawy, 2009). On the basis of literature, the study
proposed:
H4: The higher the education is, the greater the element of entrepreneurial
capabilities among young graduates will be.
The importance and awareness regarding the economic independence and the
desire for liberation from degrade patriarchal framework had marked the entry of
young graduates in the sphere of entrepreneurship and they are more willing to create
new ventures. The higher education carves various asset accumulation strategies
among young graduates for particular socioeconomic conditions (Shapiro & Wolff,
2001). It is stated that the renowned economic independence indicators to inquire
which factors of economic guiding principle and the institutional structure influence
the provision of entrepreneurs in modern day civilization (Gwartney & Lawson,
2005). Keeping in view the theory, the study claims:
H5: The higher the education is, the greater the element of self independence
among young graduates will be.
The self reliance has an affirmative middle of stuff, but academics and
intellectuals are duty bound to give it a particular definition, actually, that would be
the only independent means of defining the term "self-reliance". The requirements for
local substitutes and self-reliance have been heard in unambiguous expressions by
various scholars (Brett, 1988). The creativeness and modernization among young
graduates opted latest methods and knowledge to apply into local conditions (Acho-
chi, 1998). Self-reliant endeavor started against the milieu of economic reorganization
since the late 80s (Fonchingong & Fonjong, 2002). Self-reliance is defined as a
mindset that observes individuals mind and physical resources, as the basic reserve to
Management & Marketing
444
describe on in the search of one’s aims and goals, and discovers sentimental
accomplishment not only in attaining the objectives but encompassing them by means
of personal resources (Rahman, 1993). It is therefore, on the basis of literature the
study asserts:
H6: The higher the education is, the greater the element of self-reliance
among young graduates will be.
3. Methodology
3.1. Sample
In this research 300 questionnaires were distributed among those final
semester students at various universities in twin cities (Islamabad and Rawalpindi) and
Lahore Pakistan but 239 filled questionnaires were received. Out of those 239
questionnaires 14 were not properly filled and excluded from analysis and remaining
225 were processed in this study. The sample of this study was divided into two broad
categories consisting of male and female students, and this was further sub-divided
according to their specialized discipline and age groups.
3.2. Procedure and Measures
For data collection survey based questionnaires were distributed among three
hundred respondents comprising of last semester students of different university
located in Islamabad and Rawalpindi and Lahore. Before administering the
questionnaire all the questions were explained to the respondents, so that respondents
filled in the questionnaires easily and comfortably. One questionnaire was given to
each respondent. In the questionnaire the respondent was ask about their gender, age
and major, intention to venture creation, perceived desirability, support network,
social norms, and perception of feasibility.
The statistical package for social sciences program (SPSS) was used for
analyzing data. All the items were analyzed and then compare them with each other
and then categorize. After that all items were prioritized according to the factors asked
in the questionnaire. Different Scales were used to measure the variables that vary
from item to item in the questionnaire. In section one the nominal scale was used for
first three questions. The scale used to measure section two of the questionnaire that is
“Planned Behaviour Entrepreneurship and Intention to Create New Venture among
Young Graduates” was 5-Point Llikert scale and the scale used to measure new
venture creation (six items), professional attraction (four items), networking support
(three items), entrepreneurial capability (four items) were measured by using scale
(Linan et al., 2008), self-independence was measured by scale (Kolvereid, 1996), and
Planned behavior entrepreneurship and intention to create a new venture
445
self-reliance was measured (Triandis et al., 1985). The data collection was found to be
a tedious job generally and more difficult in developing economies like Pakistan.
Table 1
Reliability of Measurements (N=225)
Variables Items Cronbach alpha
Intention to venture creation 6 0.654
Professional attraction 4 0.601
Networking support 3 0.603
Entrepreneurial capability 4 0.650
Self-independence 4 0.609
Self-reliance 4 0.647
The results of the above table demonstrate the reliability of data, the intention
to venture creation with reliability of 65 percent and the professional attraction has
reliability of (60 percent), the Cronbach Alpha of Entrepreneurial capabilities is 0.650,
the Self Independency, the reliability is 0.609, Network Support has reliability of
0.603 and the reliability for self reliance Cronbach alpha is 0.650 for this variable.
4. Results and Discussions
To obtain the objective of the study various tests are performed for analysis
and the results are given below.
4.1. Results
In this study 70 percent respondents are male and 30 percent are female
participants. Out of 225 respondents 156 or 69.3% are male with age bracket 18-33
years and majority of the subjects have age bracket 22-27 years old. The potential
respondents are from different discipline and almost two third having economics and
finance as their major subjects.
Table 2
Group statistics with respect to all variables: (N=225)
Variables Mean Std. Deviation t-statistics p-value
Intention to venture creation 2.3741 0.72181 49.335 0.000
Professional attraction 2.4000 0.79127 45.496 0.000
Networking support 2.9585 0.94031 47.195 0.000
Entrepreneurial capability 2.7933 0.88234 47.487 0.000
Self-independence 2.6944 0.74043 54.585 0.000
Self-reliance 2.7622 0.81805 50.649 0.000
P value (p <.0001)
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446
The results of the Table 2 demonstrate the mean, standard deviation, t-value,
p-value and significance of all variables used in this study. The mean results of each
variable show that almost respondents are agreed because the mean value is near to
level of agreement (agree =2) and mostly students are in favor of start their own
business after completing their graduation and have given their response about all
variables positively. Whereas, further table depicts the level of significant of each
variable, thus all variables are highly significant because p-value is less than 0.05.
Table 3
Person correlation matrix for all variables: (N=225)
Variables 1 2 3 4 5 6
Intention to
venture creation
Pearson
Correlation
Sig. (2-
tailed)
N 225
Professional
attraction
Pearson
Correlation
.420(**)
Sig. (2-
tailed)
.000
N 225 225
Networking
support
Pearson
Correlation
.388(**) .473(**)
Sig. (2-
tailed)
.000 .000
N 225 225 225
Entrepreneurial
capability
Pearson
Correlation
.295(**) .402(**) .525(**)
Sig. (2-
tailed)
.000 .000 .000
N 225 225 225
Self-
independence
Pearson
Correlation
.151(*) .287(**) .288(**) .455(**)
Sig. (2-
tailed)
.024 .000 .000 .000
N 225 225 225 225 225
Self-reliance Pearson
Correlation
Sig. (2-
tailed)
N
.244(**)
.000
225
.381(**)
.000
225
.390(**)
.000
225
.757(**)
.000
225
.740(**)
.000
225
225
* Correlation is significant at the 0.05 level (2-tailed).
** Correlation is significant at the 0.01 level (2-tailed).
Planned behavior entrepreneurship and intention to create a new venture
447
The results of Table 3 reveal the correlation among all variables; it
summarizes the values of Pearson Coefficient of correlation and their significance. It
is quite evident from the results that intention to venture creation is positively
correlated with professional attraction as value of Pearson Correlation Coefficient
0.420 and the relation is significant at 95% confidence level (p < 0.05). The
relationship between intention to venture creation and support network is also positive
and significant as Pearson Correlation Coefficient is 0.388. Intention to venture
creation and entrepreneurial capability are positively correlated, as the value of
Pearson Correlation Coefficient is 0.295. The result further depicts that intention to
venture creation and self independency has positive and significant relationship and
having Pearson Correlation Coefficient is 0.151. Their relationship is significant as
well (p <0.05) and at the last there is a positive and significant relationship between
intention to venture creation and self reliance and have the 0.244 value of Pearson
Correlation Coefficient. So, all independent variables are positively and significantly
correlated with intention to venture creation. Students are more motivated to start
their own business. The intention to venture creation is no more attached only to self
independency it is also accompanied by entrepreneurial capability, networking
support, self reliance and professional attraction.
4.2. Discussions
The present research study findings illustrate that higher education regarding
entrepreneurship and intention to create new venture among young graduates has
positive and highly significant effect and therefore, are strongly co-related. The study
further indicates that higher education influencing the intention to create new venture
among young graduates. It is apparent that current outcome validates the important
function of education in the improvement of entrepreneurial intention. This research
findings agree with the previous studies that higher education support intention to
create new venture (Krueger, 1993; Steward & Knowles, 2003; Rae, 2002; and
McMullan & Vesper, 2000).
It has been stated that by acquiring a certain level of education or set of
“skills, knowledge and personal characteristics” an individual is more probable to be
employable (Rae, 2007). The present study shows that higher education paved way to
attract young graduates towards new venture creation as they have acquired the
needed skills. The findings of this study are similar to various previous studies
(Baruch et al., 2006; Birch & Clements, 2006; Rae, 2005).
Entrepreneurship is the method during which persons and firms generate
worth by putting simultaneously exclusive bundle of sources to utilize opportunities
around themselves. The entrepreneurs are getting educated concerning entrepreneurial
aptitude simply by forming a new business and examining their succeeding
performance (Stam et al., 2008). In addition, networking enable people to get right to
use information, shrink operational expenditures by permitting the organization of
Management & Marketing
448
actions, and make possible combined decision-making (Grootaert & van Bastelaer,
2001).
A past study described networking persuade on the arrangement of intentions
and, consequently, on the individual’s new business-formation capacity (Lin, 2003).
Discursive diffusion replicates individual’s capabilities to understand how aspects in
the environment may operate or respond. It is observed that capabilities in marketing
and information technology are also interrelated to business performance, and the
organization’s capacity to maintain competitive lead (Conant et al., 1990; J aworski &
Kohli, 1993; Day, 1994). Wade & Hulland (2004) stated that capabilities submit to
reiterated samples exploited to take advantage of assets. Organizational and individual
capabilities facilitate in attaining and supporting competitive advantage is an
elementary concern in planned management (Teece et al., 1997). The current study
findings demonstrate that higher education and entrepreneurial capabilities are
positively and significantly correlated and this will enable young graduates to access
new capabilities to form new business.
A study described that this mind set is changing not just accidental but it is
because of a distinctive consequence of entrepreneurial activity. The young graduates
who desire to join self-employment and with a high intention to create new venture
obviously face obstacles to starting and running a successful business. Growing
personal independence from others is such a primary skill that is needed to be taught
both at college and university to polish entrepreneurial intentions. Rapid technological
change likewise complicates career decision-making and diminishes the likelihood of
stable career progressions that yield higher earnings and benefits (Heinz, 2003). The
study at hand proves that higher education and self independence are positively and
significantly are correlated and will facilitate young graduates to make use of self
independence aspect for creating new ventures. It is stated that people like to be self-
sufficient (Niger-Thomas, 1997). Prior studies proved that support the idea of self-
sufficient (Monroe et al., 2007; Scott et al., 2007). The study confirms that higher the
education the greater will self reliance impact on intention to create new venture
among graduates.
5. Conclusions, Limitations and Implications
5.1. Conclusions
The main purpose of this study was to determine the entrepreneurial intention
among those young of students who attended course on management, entrepreneurship
and SME and the firmness of this intention for longer time. Ajzen’s intention model
was used in this study to achieve the objective. Entrepreneurial abilities consist of
mechanism that is extremely deep-seated in an individual’s surroundings (traits,
personality, attitudes, social role and self-image) and at the same time these skills,
knowledge and experience can also be obtained at work or by virtue of training and
education (Man & Lau, 2005). The present study proved that higher education grooms
Planned behavior entrepreneurship and intention to create a new venture
449
young graduates and prepared them for new venture creation. The current study
confirms that young graduates are more willing to form new businesses after gaining
the relevant business and entrepreneurship education.
The present study shows that networking and new venture creation are
positively and significantly correlated. The networking helps young graduates to
access information and other required assets to start their own business. The higher the
rate of networking among students the greater will be the chance of new venture
creation because they acquire whatever is necessary to start new business. The study
result shows that higher education and entrepreneurial self independence is positively
and significantly correlated.
Self-help initiatives enable the people to look inwards by rallying local
resources and efforts (Anyanwu, 1992). The current the economic crisis reduced
government funding for new projects and the government failed to create jobs the
people generally and educated young particularly resorted to self-reliance. The study
at hand proves that higher education and self-reliance is positive and significantly
correlated. This study explains that young graduates have sense of achievement and
they are capable of taking risk in this uncertainty environment. On the bases of results
this study concludes that all variables, included in the study, play a vital role in new
venturing and are significantly correlated to each other. Networking support,
entrepreneurial capability, self-independence and self-reliance are also positively and
significantly correlated with intention to venture creation. Therefore, based on the
findings the study concludes that young students are more motivated towards new
venture creation and start their own businesses.
5.2. Limitations
Similar to previous studies, the present study is not an exception and has some
notice able limitations. The first limitation of the study is the geographical range of the
sample for this study. The study included sample only the twin cities of (Islamabad
and Rawalpindi) and Lahore which may not give a true picture regarding the rest of
the population and the country. There is a chance that further investigation on the
basis of varied sample regarding entrepreneurial intentions will vary across local and
national changes.
The other limitation of the study is that it includes business and economics
discipline students only. In future a study is needed to investigate and examine to
include all files of students including science, engineering, medicine, and law
disciplines also. This would help to understand the thinking process of young
graduates irrespective of their field of study and this will enable to see how young and
educated class towards entrepreneurship generally and intentions to create new
venture particularly.
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450
5.3. Implications
Entrepreneurship is becoming popular all over the world and all walks of life.
Same is the case with young graduates and they are not an exception. There are two
schools of thoughts when it comes to entrepreneurship; the nascent entrepreneurship
and planned entrepreneurship.
The present study will provide insight to future policy makers and planners to
think about this young generation to exploit their expertise and potential. They can
chart a policy which gives them a platform to maximize their innovative and creative
ideas. The competition is mounting day by day in all walks of life and same is the case
with employment. It is becoming almost impossible for the governments to create jobs
for intended workforce generally and young graduate specifically. This young
potential can be utilized only if there is a strong entrepreneurial policy is being
crafted. The entrepreneurship will be last resort in the face of unemployment and
young students will make use of this golden opportunity to be successful entrepreneur.
This study will help and enable colleges and universities to understand the
role of entrepreneurship in the times to come. The academicians, educators, and
university authorities have to think and rethink what is to be taught and how to teach
and to prepare younger generations for the forthcoming challenges. The study will
create room for further research to explore ways and means to promote and encourage
entrepreneurs generally and young students particularly.
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Annex 1
Questionnaire
Planned Behavior among Young Graduates and Intention to Create New Venture
Instructions
(1= strongly agree, 2= agree, 3= Neutral, 4= Disagree, 5= strongly disagree)
Intention to venture Creation: Below is situations on your intentions to
create a business.
Q# ITEMS 1 2 3 4 5
1 I’m ready to make anything to be an entrepreneur
2 My professional goal is becoming an entrepreneur
3 I will make every effort to start and run my own firm
4 I’m determined to create a firm in the future
5 I have very seriously thought in starting a firm
6 I’ve got the firm intention to start a firm some day
Professional Attraction: Below are statements on your professional attraction
(perception of desirability) that can influence you to develop intention to start a
business.
Q# ITEMS 1 2 3 4 5
1 A career as entrepreneur is attractive for me
2 If I had the opportunity and resources, I’d like to start a firm
3 Among various options, I’d rather be an entrepreneur
4 Being an entrepreneur implies more advantages than
disadvantages to me
Entrepreneurial Capability: Below are statements about Entrepreneurial
capability (perception on feasible) factors that can influence you to develop intention
to start a business.
Q# ITEMS 1 2 3 4 5
1 Start a firm and keep it working would be easy for me
2 I’m prepared to start a viable firm
3 I can control the creation process of a new firm
4 I know the necessary practical details to start a firm
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Networking Support: If you decided to create a firm, people in your close
environment would approve of that decision?
Q# ITEMS 1 2 3 4 5
15 Your close family
16 Your friends
17 Your colleagues
Self Independency: Below are statements related to authority and autonomy
in venture creation?
Q# ITEMS 1 2 3 4 5
1 I look for independence
2 I want decision-making power
3 I look for a position of authority
4 I would like to be my own boss
Self Reliance: Below are statements related to authority and autonomy in
venture creation?
Q# ITEMS 1 2 3 4 5
1 I usually struggle through a personal problem by myself
2 One should live one's life independently
3 What happens to me is my own doing
4 To be superior, a person must stand alone
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