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CHAPTER TWO
LITERATURE REVIEW
2.1 UNDERSTANDING ENTREPRENEURIAL INTENTION
The previous research has
investigated the various economic and psychological motivations of
individuals to seek self-employment (Banmol, 1990, Eisenhover, 1995,
Douglas and Shepherd, 2000). The motivation to engage in entrepreneurial
behaviour has generally been investigated in terms of entrepreneurial
intentions, with intention conceptualized as being a function of
beliefs that in turn can lead to subsequent behaviour. In general, the
greater the intention, the stronger is the motivation to engage in
entrepreneurial behaviour (Ajzen 1991).
Numbers of models have been proposed to explain the relationship
between an individual’s personal characteristics and subsequent
intention (for example, Shapero 1982, Ajzen 1987, Bird, 1988). Ajzen’s
theory of planned behaviour (1991) suggests three keys attitude that
predict intentions, these being attitudes towards the act, social norms
and perceived behavioural control. Krueger and Brazeal (1994) suggest
that the perceived behavioural control construct overlaps with the
self-efficacy construct of Bandura (1986) and outlined a model of
potential entrepreneurship that incorporated entrepreneurial
intentions, Basing their model on Ajzen’s theory of planned behaviour
and shapero’s model’s of entrepreneurial event (Shapero, 1982). Their
model included potential for both enterprise development and corporate
ventures and was compressed of three constructs beings :
- Perceived desirability
- Perceived feasibility
- Propensity to act.
The perceived desirability was seen to be related to intrinsic
rewards associated with entrepreneurship and includes the attitude
towards the act and social norms. (Kreuger and Brazeal (1994). Perceived
desirability is related to the motivational factors to engage in
entrepreneurial behaviour and can therefore be considered a function of
entrepreneurial attitude held by the individuals. Perceived feasibility
on the other hands, is related to individual perceptions of their
ability to implement the required behaviour Krueger (1993), cites
persuasive evidence, that perceived credibility, perceived
desirability and prosperity to act explain over half the variance in
intentions towards entrepreneurship, with feasibility perceptions being
the most influential’s.
An alternative model of entrepreneurial intentions was proposed by
Bird (1988). Based on established theory in cognitive psychology, the
model suggest that an individuals entrepreneurial intentions is based
on a combination of personal contextual factors, personal factors
includes prior experience as an entrepreneur, personal characteristics
and abilities while contextual factors consists of social, political
and economic variables.
An individual’s intention is further structured by both rational
and analytic thinking (goal-directed behaviour and intuitive or
holistic thinking (vision). Boyd and Vozikis (1994) expand on this
model to incorporate the perceived behaviourial control aspect of
Ajzen’s theory of planned behaviour through the inclusion of the
concept of self-efficacy.
Perceived behaviourial control describes the perceived ease or
difficulty of performing behaviour and as pointed out by Ajzen’s (1991)
is closely related to the concept of self-efficacy. They also proposed
self-efficacy as an important explanatory variable in determining the
strength entrepreneurial intentions and the likelihood that those
intentions will result in entrepreneurial actions.
The reversed model of Boyd and Vozikis (1994) based on Bird’s
(1998) model suggest that intentions are a function of self efficacy in
addition to attitudes and perceptions regarding the creation of a new
venture through rational and intuitive thought processes.
2.2 LOCUS OF CONTROL AND ENTREPRENEURIAL INTENTION
Locus of control is the degree in which the individual believes
that the reinforcements are dependent on his behaviour. This individual
believes that the accomplishment of goal or purpose depends on his own
ability and actions rather than luck or other people’s efforts (Kuip
and verheul, 2003).
The empirical evidence shows that small business entrepreneurs are
more oriented at the internal level than population in general (Ket
Vries, 1977, Begley and Boyd, 1987, Beverland and Lockshin 2001).
Brockhaus (1980) longitudinal study suggests the existence of a
positive correlation between orientation to locus of control and
entrepreneurial success.
In another study Brockhaus and Horwitz (1986) reinforce that locus
of control could distinguish entrepreneurs who are successful from
those who are unsuccessful. Robinson et al (1991) state that internal
control leads to a positive entrepreneurial attitude and most students
who receive entrepreneurial formation may develop a higher level of
control and self-efficiency.
2.3 RISK TAKING AND ENTREPRENEURIAL INTENTIONS
This variable refers to
risk acceptance when entering an activity, that is, it is related to
the probability of an activity having less than 100% success (Kuip and
Verheul, 2003). Even if risk-taking is often mentioned as a determinant
of entrepreneurial intention, several empirical studies suggest that
small business entrepreneurs do not have positive attitude towards risk
and they do not consider themselves as risk takers, (Baron, 1998) nor
do they seen to differ from other groups, in more objectives test on
risk taking (Brockhaus), (1980) . according to Mc Clelland (1961) and
Bellu (1988) Entrepreneurs seem slightly less attracted to take risks
in situations known as pure shift games.
Entrepreneur risk taking may be specific or monetary. Davidsson
(1989) asserts that if the aspirations are sufficient accomplished. The
Entrepreneurs may simply stop taking risks. However, risk taking and
acceptance of uncertainty is something that can be slowly modified if
desired.
Thus, it is still not clear in literature if there is a
relationship between risk-taking propensity and Entrepreneurial
intention neither the nature of such relationship.
2.4 SELF-CONFIDENCE AND ENTREPRENEURIAL INTENTION
The high level of self confidence has been suggested by many studies as an entrepreneur’s standard characteristic.
In reality, this characteristic emerges constantly in a
compilation of empirical studies states by Davidsson (1989). Ho and Kol
(1992) refers that self confidence is an entrepreneurial
characteristic and that it is relate to other psychological
characteristics, such as Locus of control, propensity to take risk and
Tolerance of ambignity. Robinson et al, (1991) have found entrepreneur
to have a higher degree to self-confidence relative to
non-entrepreneurs.