FINAL REPORT STUDENTS’ ATTITUDES TOWARDS ENTREPRENEURSHIP ….. Student number: ………….. Submission date: 16/10/2016 Word count: 2748 Applied Market Research Dr. Marthin Nanere Spring Semester 2016 Table of Contents 1. Methodology ....................................................................................................1 1.1 Research Design ........................................................................................1 1.2 Data Collection and Data Analysis.............................................................2 1.3 Sample and Sampling Process ...................................................................3 2. Results and findings ..........................................................................................3 2.1 Descriptive statistics..................................................................................3 2.2 Differences between groups .....................................................................7 2.3 Reliability Analysis .....................................................................................9 2.4 Regression Analysis .................................................................................12 3. Conclusions .....................................................................................................14 4. Recommendations ..........................................................................................15 5. References ......................................................................................................16 Appendix ................................................................................................................16 1 1. Methodology 1.1 Research Design The research project ‘students’ attitudes towards entrepreneurship’ is a quantitative research that measures students’ intentions of becoming an entrepreneur and the factors influencing the intention. The research objective was also to find out whether students’ intentions differ referring to demographic variables, such as type of studies, gender and status of student (domestic or international). After the data has been collected, statistical analysis will be applied to analyse the previously mentioned research questions. Exploratory and descriptive research designs have been used in the research project. The researchers have gained background information on the research topic by conducting a secondary data analysis, which is part of conducting an exploratory research (Burns & Bush 2014). With the help of secondary data analysis, the researchers were able to identify possible issues arising from the research and to define the research problem, research objectives and research hypotheses more effectively. Secondary data for this research project has been gathered from academic journals, which addressed students’ intentions to become an entrepreneur. The central theory used to measure entrepreneurial intentions is Ajzen’s theory of planned behaviour (TPB), which includes three motivational factors that shape the intention (Ajzen 1991). The first factor is the attitude towards the behaviour (positive or negative attitude towards starting an own business). The second factor is the subjective norm, indicating the perceived social pressure. The last factor is the perceived behavioural control, which measures the person’s perception of their ability to become an entrepreneur (Ajzen 1991). This theory served as a foundation to develop the questionnaire. The questionnaire consists of seven demographic questions and fourteen questions about the meaning and desirability of characteristics associated with 2 entrepreneurship (attitude factor). Subsequently, the subjective norm was added in order to evaluate if other people would approve the career path of an entrepreneur (three questions) and the likelihood that the respondent is willing to comply with given norms (three questions). Additionally, the questionnaire included the perceived behavioural control by asking if the respondents are able to perform eleven different tasks associated with entrepreneurship effectively. Finally, the questionnaire included nine questions that measure the affinity and intention to become an entrepreneur. Except for demographic questions, all questions are interval-scaled using a 7 point-scale that measures the extent of agreement and also includes a middle-of-the-road option. Additionally to the exploratory research, descriptive research will be used in order to describe the characteristics of the population. The research study is a cross- sectional study due to the time and cost constraints. Cross-sectional studies measure the sample units at one point at a time instead of conducting a study at several points (longitudinal study). The cross-sectional study measures the current intention to become an entrepreneur of the students being asked. 1.2 Data Collection and Data Analysis Semi-depth interviews have been used to collect the data of La Trobe students. Questionnaires have been distributed and collected among international and domestic, business and non-business La Trobe students mainly at Bundoora campus with the help of students from the master subject ‘Applied Market Research’. Every student has collected at least 10 respondents. The questionnaire was designed to be completed within ten minutes. Participation was voluntary and anonymous. The questionnaire was filled out by hand from the respondents. The data is analysed with the help of IBM’s SPSS tool. Before the data can be analysed, variable and value labels were assigned to the variables and the data has been checked for inconsistencies and wild codes. In the following, descriptive, difference and predictive analyses are performed (Burns & Bush 2014). 3 1.3 Sample and Sampling Process Due to the fact that the respondents have been chosen by students from the subject ‘Applied Market Research’ at La Trobe, a convenience sampling has been applied. The respondents were selected based on the convenience of the researchers, which is associated with a non-random sampling method, because the sampling units have not been selected with known probabilities (Burns & Bush 2014). That means that the respondents do not represent the whole population of La Trobe Students and their characteristics. However, the convenience sampling reduced time and effort to collect data and was convenient for the researchers. Thus, a large amount of cases could have been collected in a short time. 2. Results and findings 2.1 Descriptive statistics The sample consists of 467 students from La Trobe University in Bundoora. The amount of male and female respondents is quite evenly distributed by having 45% of men and 55% of women in the sample. The majority of students (80.9 %) are between 20-29 years old, which reflects the average age of students at universities. Approximately 9% of the respondents are under 20 years old and 8.6% between 30 and 39. 9.0% 80.9% 8.6% 1.3% 0.2% Age of the respondents Under 20 20-29 30-39 40-50 50+ 4 32.1% of all respondents work for a private company, 7.5% for a public institution and 4.3% for a non-profit organisation, whereas the majority of students (56.1%) does not work in these fields. The majority of the students has a business major (68.5%) and 31.5% have a non- business major. The respondents have mostly an international background, because 65.2% are international students and only 34.8% are domestic students. Concerning the level of studies, 62.9% are postgraduate students and only 37.1% are undergraduate students. The reason for this could be that postgraduate and mostly international students from the master’s subject ‘Applied Market Research’ distributed the questionnaire mostly likely in their study group. Creating a new company (being an entrepreneur) and developing a career in a private company is more interesting for the students at La Trobe University than working in a non-profit organization or as a civil servant for the government. Referring to the first two career options, students answered neutral (being neither interested nor uninterested), whereas the students indicated that the last two career options are interesting for them. 32.1% 7.5% 4.3% 56.1% Employment of the respondents a private company public institution non-profit organisation Rest 5 Within the question ‘indicate your intention to choose the following career options’, 23.1% are extremely interested to become an entrepreneur, 20.3% are very interested, 12.8% are interested and 19.5% are neutral. However, the average is 4.72 on the scale of 1 to 7 as indicated below. The respondents consider independence (to be my own boss), creativity and innovation, as well as facing new challenges as very probable when creating their own company. Comparing to the desirability of these factors, obtaining high 4.72 4.92 3.67 3.92 0.00 1.00 2.00 3.00 4.00 5.00 6.00 Creating a new company (being an entrepreneur). Developing your career in a private company Working as a civil servant for the government Working in a Non Profit Organization Indicate your intention to choose one of the following career options 6 incomes is strongly desirable (average 5.72), but students evaluate it slightly less probable (average 5.36) when becoming an entrepreneur. Economic uncertainty is also less desirable (average 3.99), but students evaluate it more probable (average 5.21) when becoming an entrepreneur. Concerning the perceived behavioural control (how effective the students would be in completing essential tasks concerning entrepreneurship), the average reported that they could complete the tasks effective or strongly effective. For instance, the average student would be strongly effective in defining the business idea and strategy of the company (average 4.66). 5.78 5.36 5.21 5.89 5.36 5.48 5.98 4.80 5.00 5.20 5.40 5.60 5.80 6.00 6.20 Facing new challenges Creating new jobs. Economic uncertainty (insure earnings). To be creative and innovative Obtaining high incomes Taking calculated risks To be my own boss (independence) Creating a new company or becoming an entrepreneur would mean for you ... 5.18 4.60 3.99 5.52 5.72 4.83 5.51 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 Facing new challenges. Creating new jobs. Economic uncertainty (insure earnings). To be creative and innovative. Obtaining high incomes Taking calculated risks. To be my own boss (independence) Please indicate how desirable are they for you in your everday life: 7 2.2 Differences between groups With the help of an Independent-samples t-test, the differences between the means of two unrelated groups of a nominal variable on the same dependent variable (interval or ratio scale) can be tested. In the following, the dependent variable is the question ‘With what probability do you consider to create your own business from present to five years time?’. Differences between the means for that independent variable will be tested for the groups gender (female or male), major (business or non-business), status of student (international or domestic) and study year (undergraduate or postgraduate). 4.66 4.51 4.19 4.50 4.29 4.53 4.61 4.07 4.37 4.46 4.41 3.70 3.80 3.90 4.00 4.10 4.20 4.30 4.40 4.50 4.60 4.70 Define your business idea and strategy of your company. Write your business plan (do a market research, financial analysis, etc.) Complete the necessary and administrative and bureaucratic work to create your own business Develop and maintain favorable relationships with potential investors and banks. Work productively under continuous stress, pressure and conflict. See new market opportunities for new products/services. Develop relationships with key people who are connected to capital sources. Tolerate unexpected changes in business Identify potential sources of funding. Design products or services that solve current problems. Persist in the face of adversity To what degree would you be able to complete the following tasks effectively? (On a scale from 0-6) 8 The probability to create an own business from present to five years differs between business and non-business students. The mean of business students is 4.71 (probable), whereas the mean of non-business students is 4.01 (somewhat probable). Firstly, it can be concluded that the means between business and non- business students differ. Secondly, it has to be checked whether this difference is statistically significant. Levene’s Test for Equality of Variances tests the equality in the variation between the two groups being studied. The p-value has to be smaller than 0.05 to assume no equality in the variation. The Levene’s Test is significant, because the p-value of .022 is lower than .05 (see Appendix). Consequently, equal variances are not assumed. That is why, the p-value of t-test for Equality of Means has to be checked in the second row. The test statistic t is bigger than 1.96 in absolute value (t= 3.955) and the p-value is lower than .05 (p-value= .000). The conclusion is that the group means differ significantly, in other words business students have a higher probability to create an own business from present to five years than non-business students. The probability to create an own business from present to five years also differs between men and women. The mean of men is 4.95 on a scale of 1 to 7, whereas the mean for women is 4.12. The Levene’s Test is significant and the p-value in the second row is .000. Thus, the p-value is lower than .05 and it can be concluded that the group means differ significantly. In conclusion, male students have a higher probability to create an own business from present to five years than female students. 9 Moreover, the probability to create an own business differs according to the status of the student. The average of international students to create an own business is 4.75, whereas the average for domestic students is 3.99. The Levene’s Test is significant and the p-value in the second row is .000 (lower than .05). In conclusion, the group means differ significantly and international students have a higher probability to create an own business than domestic students. In contrast, the probability to create an own business does not differ between postgraduate and undergraduate students. The p-value is .075 and thus bigger than .05. That means that there are no differences between undergraduate and postgraduate students concerning the creation of an own business. Several differences between business and non-students exist in the ability of performing tasks related to entrepreneurship effectively. Generally, business students report to be able to perform the tasks more effectively (see Appendix). 2.3 Reliability Analysis The theory of planned behaviour uses abstract constructs, such as ‘attitude’, ‘subjective norm’, ‘perceived behavioural control’ and ‘intention’. These constructs are multifaceted in nature and a multi-item scale is more appropriate in measuring constructs than single-item scales. When having a multi-item scale, the reliability of the scale plays an important role as it indicates if each item measures the same construct. Cronbach’s alpha measures the internal consistency of these scales and a value higher than 0.7 indicates a good fit of the items in the scale (Liñán & Chen 2009). The variables of A1-A7 measure one construct, namely the attitude towards entrepreneurship. A reliability analysis is performed to see whether the variables measure the same construct. Cronbach’s alpha is 0.829 and higher than 0.7. The Item-Total Statistics show than no item can be deleted to achieve a higher Cronbrach’s alpha. In conclusion, the items A1-A7 measure the same construct and the reliability of the multi-item scale is very high. 10 Concerning the reliability of the multi-item scale including the variables B1-B7 (how desirable the characteristics of entrepreneurship are in everyday life), it can be seen that the reliability of the scale would increase when dropping the item ‘economic uncertainty’ from the scale. Cronbach’s alpha would increase to 0.801, which indicates a high reliability among the different items of the scale. The reliability of the scale ‘subjective norm and motivation to comply’ is acceptable, as Cronbach’s alpha is 0.727 and higher than 0.7. No item can be deleted to improve the reliability of the scale. 11 The reliability of the scale ‘perceived behavioural control’ is very high and Cronbach’s alpha is 0.913. When dropping the item ‘work productively under continuous stress, pressure and conflict’, the reliability of the scale would increase to 0.915. 12 The reliability of the multi-item scale ‘intention’ is very high and Cronbach’s alpha is 0.852. No item can be deleted to improve the reliability of the scale. 2.4 Regression Analysis The regression analysis will be used to predict student’s entrepreneurial intentions. In the first step, reliability analyses were performed to measure the internal consistency of the constructs. Afterwards, a factor analysis was performed to create the four factors ‘attitude’, ‘subjective norm’, ‘perceived behavioural control’ and ‘intention’. Subsequently, a regression analysis was run by setting the variable ‘intention’ as the dependent variable and the other variables as independent variables. 𝐼𝑛𝑡𝑒𝑛𝑡𝑖𝑜𝑛 = 𝛽0 + 𝛽1𝐴𝑡𝑡𝑖𝑡𝑢𝑑𝑒 + 𝛽2𝑆𝑢𝑏𝑗𝑒𝑐𝑡𝑖𝑣𝑒 𝑁𝑜𝑟𝑚 + 𝛽3𝑃𝑒𝑟𝑐𝑒𝑖𝑣𝑒𝑑 𝐵𝑒ℎ𝑎𝑣𝑖𝑜𝑟𝑎𝑙 𝐶𝑜𝑛𝑡𝑟𝑜𝑙 + 𝜀 It is expected that all three independent variables have a significant positive effect on the dependent variable Intention. 13 The R-Square of the regression model is 35.4%, which means that the independent variables explains 35.4% of the variation in the dependent variable. Respectively, the residual error is 64.6%. The ANOVA table shows that the regression model is significant (p-value = .000, lower than .05). The coefficients table shows that all coefficients are significant (p-value is lower than .05). Thus, the three independent variables have a significant positive effect on the dependent variable ‘intention’. The perceived behavioural control has the largest effect on the intention, namely an increase of the behavioural control variable in one unit, the intention increases in .313 units. The second largest influence comes from the subjective norm and the attitude has the smallest influence on the dependent variable. 14 3. Conclusions The sample of 467 students of La Trobe has shown that creating a new company (being an entrepreneur) is a popular career choice. Even 23.1% of the respondents are extremely interested and 20.3% of the respondents are very interested in creating an own company. Most of the characteristics of being an entrepreneur are also desirable for students except for having economic uncertainty. On average, the students also report to be very effective in performing tasks related to entrepreneurship. Regarding the probability that students create an own business in the near future it could have been found out that there exist differences between men and women, between business and non-business students and between international and domestic students. However, it makes no difference whether the student is an undergraduate or postgraduate. All constructs used in the questionnaire have been proven to be reliable. The regression analysis revealed that all three factors, the attitude, subjective norm and perceived behavioural control have an influence on the entrepreneurial intention of students. The factor perceived behavioural control exerts the largest influence, followed by the subjective norm and the attitude. Nevertheless, the research has several limitations. First of all, the sample refers to students from La Trobe University and might not show similar patterns at other universities. Secondly, the sampling method chosen was convenience sampling, 15 whose drawback is that the sample is not an accurate representation of the entire population. Therefore, no results or predictions on the entire population can be made. Additionally, results can be biased due to the fact that most participants in the study were international business students being enrolled in a postgraduate program. The cause for this lies in the chosen sampling method. 4. Recommendations Entrepreneurship and innovation have been widely considered as essential contributors to economic and social development, including the creation of jobs and national wealth (European Commission 2010). In addition to that, entrepreneurship can be a highly satisfying career option for individuals (Moriano et al. 2012). Public universities and schools play an important role in promoting entrepreneurship and provide education related to entrepreneurship. Concerning the close connection of perceived behavioural control with intentions in our sample, universities and education programs should focus on delivering essential skills, abilities and techniques being needed in the entrepreneurial scene. By doing so, the perceived behavioural control (the perception of the ability to perform entrepreneurial tasks sufficiently) can be influenced, which in turn influences the intention and the behaviour. Additionally, public universities and schools also exert an influence on the attitudes of students towards entrepreneurship. That is why, special attention should be paid to positively influence student’s perceptions and attitudes towards entrepreneurship. Successful cases and role models may positively influence the attitude and perceived behavioural control. In the sample, women had a significant smaller probability to create an own company than men. That is why, women should be encouraged and trained so that their intention to become an entrepreneur can be increased. Special support programs, networks and prizes can facilitate women’s inclusion in the entrepreneurial scene. Furthermore, non-business students may face several challenges when performing tasks concerning entrepreneurship (see Appendix), which in turn effects their intention to become an entrepreneur. There should be 16 opportunities for advice and additional training programs for non-business students to enhance their abilities to create an own business. 5. References Ajzen, I 1991, 'The Theory of Planned Behavior', Organizational Behavior and Human Decision Processes, vol. 50, no. 2, pp. 179-211. Burns, AC & Bush, RF 2014, Marketing Research, Pearson, Edinburgh Gate. European Commission 2010, Entrepreneurship in the EU and beyond - Analytical Report, European Commission, viewed 20 August 2016, . Liñán, F & Chen, Y-W 2009, 'Development and Cross-Cultural Application of a Specific Instrument to Measure Entrepreneurial Intentions'. Moriano, JA, Gorgievski, M, Laguna, M, Stephan, U & Zarafshani, K 2012, 'A Cross-Cultural Approach to Understanding Entrepreneurial Intention', Journal of Career Development, vol. 39, no. 2, pp. 162-185. Appendix 1. Differences in the probability to create an own business 1.1 Difference between female and male students on the probability to create an own business 1.2 Difference between International and Domestic Students on the probability to create an own business 17 1.3 Difference between Business and Non-Business students on the probability to create an own business 1.4 Difference between female and male students on the probability to create an own business 18 2. Differences between business and non-business students in the ability to perform entrepreneurial tasks 2.1 Write a business plan Significant difference, business students report a higher ability to write a business plan effectively than non-business students. 2.2 Develop relationships with key people Significant difference, business students report a higher ability to develop relationships with key people than non-business students. 2.3 Identify potential sources of funding Significant difference, business students report a higher ability to identify potential sources of funding than non-business students. 19 2.4 See new market opportunities for new products/services Significant difference, business students report a higher ability to see market opportunities for new products/services than non-business students. 2.5 Tolerate unexpectated changes in business Significant difference, business students report a higher ability to tolerate unexpectated changes in business than non-business students.