ENTREPRENEURIAL INTENT AMONG STUDENTS: ARE BUSINESS UNDERGRADUATES DIFFERENT?

Wolfgang Grassl, St. Norbert College Joseph Jones, St. Norbert College

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ABSTRACT

Entrepreneurial intent has been investigated based on representative and independent samples of all students and of business students at St. Norbert College. Intent is relatively weak among all students but significantly stronger among business students. Differences are due to motivational structures rather than situational variables.______________________________________________________________________________

INTRODUCTION

The literature examining motivations and perso-nality traits of entrepreneurs has become very exten-sive. Despite abundant studies, results are still mixed and largely inconclusive regarding personality traits, social influences, and motivational factors as explana-tory variables (Shaver and Scott, 1991; Liñán, Rodríguez-Cohard and Rueda-Cantuche, 2010). Cogni-tive approaches have attracted considerable interest, but the explanatory power of personality traits or de-mographic characteristics is still considered. Therefore, there is a need to clarify which elements play the most influential role in shaping the personal decision to start a firm.

Whereas a distinction between “push” and “pull” factors is widely accepted, the relative predominance of negative external forces or personal motivation is not entirely clear (Gilad and Levine, 1986; Amit and Mueller, 1996). Many studies verge towards “pull” fac-tors in explaining entrepreneurship, especially the need for achievement, an internal locus of control, and de-sire for profit (Orhan and Scott, 2001). But “push” fac-tors have equally found to be relevant, particularly job dissatisfaction, unemployment, career setbacks, satura-tion in the existing market, immigrant status, and low family income (Kumar, 2007). Other research explains entrepreneurial intention as a function of two imme-diate antecedents – desirability and perceived feasibili-ty (Shaver and Scott, 1991). There is no prospect yet of converging theories in entrepreneurship research.

Within this literature, a special stream has devel-oped that investigates the factors that predispose stu-dents to consider entrepreneurship or actually become entrepreneurs. These studies tend to differ from other research on entrepreneurship by also considering the influence of families and other reference groups and of institutional factors such as support by colleges and universities (Kennedy et al., 2003). The i of certain ex-

planatory variables such as sex and field of studies are nearly always measured whereas other attitudes and be-liefs are often ignored. Fields of study are often used as variables that are meant to explain differences in entre-preneurial inclinations (Autio et al., 2001; Liñán and Chen, 2006). One might assume that students of busi-ness administration have a higher propensity for entre-preneurship (Sexton and Bowman, 1986). Very little work, however, has been published to investigate this hypothesis, and there is also contrary evidence (Hos-tager and Decker 1999). Moreover, most studies in the United States have been undertaken on the campuses of state universities, with results that may not be valid for business students nationwide.

In order to close this gap in the research literature, a survey was developed at St. Norbert College, a small Catholic college in Wisconsin. Two identical question-naires collected data from a randomly selected sample of students of all disciplines and from business stu-dents. In order to measure not only differences between these groups but also to provide a better picture of the latter group, these students were given additional ques-tions.

ENTREPRENEURIAL INTENT

Explanatory Model

Entrepreneurial action falls clearly into the catego-ry of intentional behavior. The dominant paradigm in the study of intention is the theory of planned behavior (Ajzen and Fishbein, 1980; Ajzen, 1987; Ajzen, 1991; Krueger and Carsrud, 1993; Veciana, Aponte, and Ur-bano, 2005). It suggests three conceptually independent antecedents of intention. The first is the attitude toward the behavior. This refers to the degree to which a per-son has a favorable appraisal of the behavior in ques-tion. The second predictor of intention is the subjective norm, or the perceived social pressure to perform the

behavior. The third antecedent of intention is the de-gree of perceived behavioral control, which refers to the perceived ease of performing the behavior. Per-ceived behavioral control reflects past experience as well as anticipated impediments and obstacles. The more favorable the attitude and subjective norm with respect to the behavior, and the greater the perceived

behavioral control, the stronger the intention to per-form the behavior. A later version of the model starts with the subjective norm and represents the other two predictors as the perceived desirability and the per-ceived feasibility of what is intended, with situational variables influencing the transformation (Figure 1).

PERCEIVEDFEASIBILITY

Figure 1: Generic intentions model (Ajzen 1991)

Situational factors are highly important, because intent alone is a poor predictor of actual entrepreneur-ship behavior (Kennedy et al., 2003). One study has found that though 30% of those who claimed intent fol-lowed up during the subsequent four-year period, only 8.7% actually entered self-employment (Katz, 1988).

The theory of planned behavior has been used in practical applications as well as in basic research (Krueger and Carsrud, 1993). Attitudes have been shown to explain about 50% of the variance in inten-

tions, and intentions to explain about 30% of the va-riance in behavior. These results compare favorably with trait measures, which typically explain about 10% of behavioral variance (Ajzen, 1991). These studies suggest that the greater the degree to which the beha-vior can be controlled, the greater is the influence of in-tent on eventual behavior.

The generic intentions model was elaborated into an explanatory model on which the questionnaire was based (Figure 2):

Figure 2: Explanatory Model

SUBJECTIVE NORM

PERCEIVEDDESIRABILITY

ENTREPRE- NEURIAL

INTENTION SITUATIONAL

VARIABLES

PERCEIVED DESIRABILITY

Attractiveness (cognitive) Feeling (affective) Enthusiasm(affective)

PERCEIVED FEASIBILITY

Practicality (cognitive) Workload (cognitive) Knowledge(cognitive) Feeling (affective)

PERSONALITY TYPE

Proactive Innovativeness Achievement motivation Materialism / Idealism

ENTREPRENEURIAL INTENTION

Thinking (cognitive) Feeling (affective) Likelihood (behavioral)

SITUATIONAL VARIABLES

(Field of studies) Class rank Gender Entrepreneurial legacy in family Friends as entre-preneurs Religious affinity Employment Citizenship

QUESTIONS FOR BUSINESS STUDENTS

College support CourseworkAreas of business Major Concentration

Entrepreneurial Drive

In the model, background variables about perso-nality types (which stand for the subjective norm in the theory of planned behavior) are viewed as influencing the perceived feasibility and the perceived desirability of entrepreneurship. Since subjective social norms in the theory of planned behavior have consistently been shown to have weak explanatory power (Krueger, Reil-ly and Carsrud, 2000), substitution by personality traits in which social norms are at least partially reflected was expected to increase significance. Perceived desi-rability may be understood as being composed of the attitude towards entrepreneurship as supported by the relevant personality traits. Perceived feasibility ex-presses self-efficacy as the degree to which personality traits and other resources are perceived to match the requirements of building up and managing an organiza-tion. Together the two attitudes constitute the entrepre-neurial drive of individuals (Florin, Karri and Rossiter, 2007). Determination of the ratio between these va-riables will be crucial, since the relation between the desire for entrepreneurial careers and the perceived feasibility of such aspirations would indicate not only the presence or absence of a “can-do” attitude but also the level of perceived access to resources. Situational variables include general demographics and those that are specific to students, such as breadth of work expe-rience, class rank, and field of studies. For researching the intentions of business students, this model was augmented by a larger set of situational variables that can be manipulated through policy inter-vention, specifically about the perceived level of sup-port coming from the College and the degree to which courses prepare students for entrepreneurship. The question about fields of studies in the general survey was replaced by questions about which of three busi-ness majors (business administration, accounting, or in-ternational business) students were pursuing, which of five concentrations within business administration, and in which industry or activity they would most like to start a business.

Operationalization and Measurement

With the Entrepreneurial Intention Questionnaire (EIQ) (Liñán, Rodríguez-Cohard and Rueda-Cantuche, 2010), there exists at least one validated instrument for mea-suring intention. However, the underlying explanatory model is different from the one chosen for this study, and the instrument was therefore not used. Rather, most items were adapted from the Entrepreneurial Atti-tude Orientation (EAO) scale (Robinson and Hayes, 1991; Florin, Karri and Rossiter, 2007).

Personality type was operationalized through 12 items measuring both cognitive and affective dimen-sions – being proactive, innovative, motivated to achieve, and materialistic. The perceived desirability of

entrepreneurship was measured through three items, the perceived feasibility through six, in both cases re-ferring to both cognitive and affective dimensions.

The dependent variable “entrepreneurial inten-tions” was operationalized by its cognitive, affective, and behavioral dimensions, with one item each. The li-terature recommends this for the measurement of atti-tudes in order to determine which dimension predomi-nates. Items were built as 7-point Likert-type scales. The three items for intention use a 7-point itemized rat-ing scale (where the item measuring the behavioral di-mension only has the endpoints labeled).

Data Collection and Samples

Data were collected in two waves in the fourth week of March and the first week of April 2010 through self-administered questionnaires. Two samples were used: (1) ALL comprises students of all academic disciplines who were polled on paper; (2) BUS comprises students of business fields (accounting, business administration, and international business), who were polled by e-mail with a link to an augmented questionnaire online. Achieved sample size for ALL was 202 out of a popula-tion of 2,113 (or 9.56%), and sample size for BUS was 145 out of a population of 481 (or 30.1%). The struc-tures of both were fairly close to the distribution of the student body in terms of class ranks, sex, and religious affiliation (particularly the number of self-designated Catholics). Students of business administration and of education were somewhat overrepresented in ALL.Sample sizes may in both cases count as sufficient and as large in comparison with other studies at universi-ties. For purposes of comparison, data were also com-piled into a composite sample ALL+BUS.

RELIABILITY AND FACTOR ANALYSIS

Confirmatory factor analysis based on principal components was used for assessing the validity of em-pirical measures for the samples. The Varimax method revealed 6 components, which for ALL+BUS ac-counted for a variance of 64.61%. Factors can readily be identified with the main components of the explana-tory model. Reliability tests showed that the measures are internally consistent. Alpha for ALL+BUS was .799. Because of alpha = .904 in BUS, the three inde-pendent items may be treated as a unitary construct:

ALL BUSKMO Test of Sampling Adequacy .784 .794Bartlett’s Test of Sphericity: chi-square = 1,558.16 1,626.41

p < .000 .000Variance explained by components (%) 62.451 66.737Cronbach’s Alpha (all Likert-scale items) .787 .810Cronbach’s Alpha (dependent var. items) .770 .904

DESCRIPTIVES AND DIFFERENCES

Results were evaluated separately by the two sam-ples because ALL will certainly also include cases in-cluded in BUS, and double-counting must be avoided.

The frequency tables of the intention measures for the two samples show significant differences in means be-tween groups (Table 1). Chi-square values are 134.684, 26.601 and 58.101, with df = 6 and p < .000 in all cas-es. ANOVA confirmed these differences (Table 2):

Table 1: Descriptive Statistics

Table 2: Analysis of Variance

If the three highest points on the 7-point scale are cu-mulatively taken to express intention, 24.8% of all stu-dents have already thought about starting their own business, 68.4% are excited by this idea, but only 37.1% see a high chance that they will actually do it. However, a safer estimate for real intention will only take the two highest scale points into account. The share of students who have thought about starting a business is then only 12.9%, with 37.2% being excited by the idea, and 14.3% wanting to act on it. Among business students, the scores for the top-three points are 46.1%, 42.8%, and 32.4%, and for the highest two points they are 22.7%, 24.9%, and 15.2%. Although business students have thought about entrepreneurship much more frequently than all students, a much smaller share is actually excited about it. Looking at the top-

three scale points, business students express a lower in-clination to follow up on it, and only the combined an-swers for the top-two scale points show business stu-dents slightly more likely to become entrepreneurs – only by 15.2% compared to 14.3% for all students. These differences are interesting and require explana-tion. One hypothesis is that business students are con-fronted with issues of entrepreneurship in their courses and have considered this option but are less excited about it, maybe because they have a more realistic pic-ture. Knowledge may then drive out excitement and still lead to a higher behavioral intention. Business stu-dents hold more to the view that it is hard to start a business, and although they believe to have more of the required knowledge, they are less convinced that they would succeed (all differences at p < . 000).

The pool of potential entrepreneurs at the College must be regarded as rather small. Under the more con-servative measure, around 15% of the student body is likely to start a business. Men show significantly high-er mean values than women on thinking about entre-preneurship (4.13 and 3.08, F = 26.551, p < .000) and intent (4.56 and 3.32, F = 37.840, p < .000), only on the affective dimension the higher mean for males (5.23) is no longer different at the 95% confidence lev-el (F = .061, p < .061) from the mean for females (4.92). Class rank, religious affiliation, and citizenship had no effect on entrepreneurial intention. Surprisingly, having family members or friends who are entrepre-neurs did not increase intention.

The respective results for business students are dif-ferent. Although on the three dimensions of intention men recorded higher means than women, these are not

statistically significant: cognitive 4.51 and 4.19 (F = 2.023, p < .157), affective 4.44 and 4.12 (F = 1.652, p< .201), and conative 4.19 and 3.84 (F = 2.572, p < .111). It seems that business education is an equalizing factor here. Women also come close to men in self-assessed knowledge about starting a company (means = 4.45 and 4.00, F = 2.829, p < .095) whereas this differ-ence is more robust for all students (means = 3.86 and 2.86, F = . 20.033, p < .000).

RELATIONSHIPS AMONG COMPONENTS

Linear regression was chosen as an instrument for revealing the relative impact of model components on intention. Results for individual items are not reported here. The results for the model components for BUSare as follows (Table 3):

Items R R-squared Standardized Personality type 12 .641** .411 .612** Perceived feasibility 5 .591** .349 .408** Perceived desirability 3 .367* .135 .197* Situational variables 8 .252* .063 .191* Questions for BUS 5 .231* .053 .117

** p < .001, * p < .05, F = 144.238, p < .001

Table 3: Relationships among the elements of the model

CONCLUSION

Among business students, it is largely personality factors (and among these mainly a proactive attitude and achievement motivation) together with the per-ceived feasibility that determine intention. How stu-dents perceive the difficulty and chances of success outweighs desirability as a determinant of intention al-though the mean values for desirability are higher than for feasibility. Because of a high standard deviation on desirability, it contributes less to explaining intention, which speaks to the realism of students. Variables re-flecting personal and family situations make also only relatively weak contributions to explaining intention.

The pool of potential entrepreneurs at St. Norbert Col-lege has been estimated at around 15% of the student body, with a slightly higher tendency among business and a slightly lower tendency among other students, this result is subject to several limitations. Declared in-tentions are not necessarily a good predictor for actual behavior. The survey may reflect a systematic bias in favor of pull and against push motivations, the latter being more difficult to predict. And external validity may be low. The latter issue deserves most attention. The results may then be compared with a selection of those obtained for undergraduate students at other U.S. tertiary institutions regardless of differences in structure (Table 4):

Study Institution Year n Measured intention

All students/business students

Levenburg et al. (2006) Grand Valley State University 2003 728 59.1% Allquoted in Teixeira (2008) West Virginia University 1984 77 24.6% Businessquoted in Teixeira (2008) MIT 2002 148 49.6% Business

Table 4: Comparison of Entrepreneurship Intention in U.S. Undergraduate Institutions

The results for St. Norbert College obviously re-flect local and institutional particularities. Entrepre-neurship intention is low although a more significant comparison could only be made with other Catholic

undergraduate colleges. But the results may also dove-tail into a declining support for entrepreneurship among the younger generation. In 2007, the desire to be self-employed was 42% in the United States, with a

downward trend. About 25% of all Americans serious-ly thought about starting a business, and 10% were tak-ing steps towards that goal (Gallup Organization 2007). This is compatible with our findings about students. An even more important result, however, is that business students do in fact have a stronger inclination towards entrepreneurship, which contradicts some of the litera-ture which sees a stronger intent for students enrolled in entrepreneurship programs but not business students in general (Hostager and Decker 1999).

The data collected allow for analysis at much greater detail, particularly with regard to motivational structure, the relative importance of “push” and “pull” factors, and differences by major areas of study. It must be suppressed in this forum.

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