ENTREPRENEURIAL CHARACTERISTICS AND COMMITMENT IN THE HERITAGE INDUSTRY

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Heritage industry are a new approach for Malaysian government to establish in several sectors which are related to the needs of idea development in art composition through creativity, like craft, batek, songket, wood curving, furniture, music, and film. Most of creative entrepreneurs in a Malaysian heritage industry are categories under small and medium scale industry. As the heritage industry grows from the producing sector into more complexes in industrialization, entrepreneurship will draw more attention to the need for emphasizing on creative industry. Therefore, entrepreneurship becomes as a main factor to develop personality traits among creative entrepreneurs in their business commitment, in term of self-development based commitment and profit based commitment. Personality traits also become both fashionable and popular as an explanation of entrepreneurial characteristics and motivation toward the business commitment in heritage industry.

Previously, heritage industry become as a main sector in United kingdom which is contributed to the gross domestic product in an economy, where the growing rate is faster than any other economic sector in a year of 1997 to 2003 (Einarsson, 2002). In fact, it had expanded by an average of 6 percent per annum compared over the period of time that only 2 percent per annum (Carey, Naudin, 2006). Nowadays, Malaysia also gives a positive feedback toward the development of heritage industry as well as in UK (Hatta Azad Khan, 2006). Therefore, entrepreneurial characteristics play an important role to develop the commitment among creative entrepreneurs. The purpose of this study is to identify the relationship of entrepreneurial characteristic significantly affected to the commitment among creative entrepreneurs in Terengganu.

Malaysian Heritage Industry

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The successful entry of the heritage entrepreneurs into global markets for consumer goods such as music, textile, furniture and craft in early 2000s clearly evidenced that Terengganu heritage entrepreneurs could no longer depend on local market as the primary source of economic growth. The sector become potential for growth and its ability to enable innovation and improved productivity across other sectors within the economy. The heritage industry currently highly contributes to gross domestic products (GDP), and also growing at a faster rate in economy as a whole. In fact, heritage industry is identified as one of the keys to transform the Malaysian economy.

Therefore, creative entrepreneurs in heritage industry in Terengganu or even in Malaysia is considered as industry in transition to move from social activity into profit oriented, also highlighted an essential of entrepreneurship skill in heritage industry. Although numerous descriptive studies and some valuable empirical research have been undertaken in this regard, but there is a guarantee that are less in guidelines derived from the research which are contribute to the development of heritage industry in Malaysia.

One of the most exciting new developments towards the promotion and development of entrepreneurial-oriented competencies in heritage industry is the publication of a several policies which are dealing with the Ministry of Culture, Arts and Heritage, and Ministry of Entrepreneurial Development and Cooperation. A key issue emphasis by Ministries is the proper development of skills, as required by the market place, with specific reference to entrepreneurial skills and business skills.

Perbadanan Kemajuan Kraftangan Malaysia

Perbadanan Kemajuan Kraftangan Malaysia (Malaysian Crafts Development Agency) also known as "Kraftangan Malaysia" is an agency under Kementerian Perpaduan, Kebudayaan, Kesenian dan Warisan (Ministry of Unity, Culture and Heritage) has a mission to make Malaysia a leader in the heritage industry (Kraftangan Malaysia, 2008). It plays a vital and important role in the promotion of traditional skill and craftsmanship; development of the handicraft industry; assisting craftsmen towards the use of modern methods of production; and promotes the marketing and export of handicraft products. A variety of program has been introduced by Kraftangan Malaysia to develop and promote the local creative product into international market.

Kraftangan Malaysia has nine divisions to manage all the activities in the Malaysian heritage industry. However, only three divisions at Kraftangan Malaysia are responsible for the development of entrepreneurs in the heritage industry, which includes; the handicraft industry development division, the market and promotional development division and the research and development division. The handicraft industry development division is responsible in providing the facilities, technology, and training program to develop the technical expertise of the local creative entrepreneurs. The market and promotional development division is given the task to manage various marketing and promotion programs to encourage more creative entrepreneurs to participate in domestic or international promotional activities, such as in-store promotion, theme promotion or trade exhibition. The purpose of this planning is to introduce local craft producing into foreign market, to increase the level of craft producing in term of creative and innovative, and also get to know the consumer behaviors which are contribute to the market demand.

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Furthermore, the research and development department at Kraftangan Malaysia is very concern on the product development in the context of product design, packaging, craft inventory and interior design; technological study in productivity and quality; identifying the substitute material in craft production and to produce high quality craft products.

Creative Entrepreneurs in the Terengganu Heritage Industry

Terengganu is well known for its strength and riches in traditional culture heritage in Malaysia. Therefore, Terengganu state government has set their own policy planning regarding culture heritage toward the tourism industry based on their strengths and advantages in an industry. This policy will make the state government to anticipate global market and also to improve their performance in meeting the need of global standard. However, the number of creative entrepreneurs in Terengganu's heritage industry who understands and committed to their business and government policies remains unknown.

Furthermore, in order to help these entrepreneurs, the Terengganu State Government took the responsibility to ensure that the positive development of heritage industry in Terengganu becomes a reality to support the local tourism industry (Penggalakan Pelancongan Negeri Terengganu, 2004). Hatta Azad Khan (2006) suggested three main components have to highlight to develop creative entrepreneur in heritage industry in Malaysia, which include the knowledge of entrepreneurship, creativity and innovativeness in art and technology awareness. These three components are crucial in developing the character of entrepreneurship especially for those who are involved in the heritage and creative industry in Terengganu.

Literature Review

The most comprehensive studies in a concept of entrepreneurship are describe the significance of individual entrepreneurs toward the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities with its surrounding by a business challenging (Zimmerer et al, 2005). In studies the concept of entrepreneurship, it also possible to discriminate factors that influence entrepreneurial characteristics, these influence by individual factor, social factor, and environmental factors (Gurol & Atsan, 2006). Koh (1996) also agree with Gurol & Atsan (2006) where there highlighted that individual factors are widely known as the trait model focus on personality characteristics of entrepreneurs.

Nowadays, many factors have been proposed to study the characteristic frequently exhibited the concept of entrepreneurship. According to Gurol & Atsan (2006), six personality characteristic are used to conceptualized the entrepreneurship, there are; need for achievement, locus of control, risk taking propensity, tolerance for ambiguity, innovativeness, and self confidence, as well as highlighted in independent variables in this study. Meanwhile, Shane, Locke and Collins (2003) identified several factors of human motivations that influence the entrepreneurial process; there are need for achievement, risk taking, tolerance for ambiguity, and locus of control, self efficacy, and goal setting.

McKenna (2005) suggested that most small entrepreneurs in Singapore are involved in the management of their own business. According to him, the development and growth of small businesses is linked to the way entrepreneurs managed their business and their understanding of the degree of commitment such entrepreneurs felt towards their organization. Previous study has looked into the theory of commitment from different angles of business management, such as; an application of commitment in a relationship marketing (Young et al, 1995); a rigorous analysis of the facets of work commitment (Carmeli et al, 2006); the nature of managerial commitment to strategic change (Lamsa et al, 2000); an employee commitment in organizational policies (Foote, 2005); and organizational commitment in a small enterprise (McKenna, 2005). Hence, entrepreneurial characteristics become important to develop commitment in a business.

Government also becomes an important factor to construct the entrepreneurial characteristics among creative entrepreneurs toward their commitment in a business. In fact, government initiative is constantly seen as an effective way of providing entrepreneurs in small and medium enterprises with the supportive of entrepreneurial development program and financial aid in order to develop and grow. According to Ab. Aziz Yusof (2009), government initiative plays an important role in assisting entrepreneurs who plan to start a business or those who already involved in a business. This initiative includes assistant in areas such as; policies, education, training, research, financial, infrastructure, and consultation. The researchers argue that government initiatives to develop entrepreneurial personality will highly contribute to entrepreneurs' business commitment in the context of networking, ready to compete, an effective financial management, management skill, and entrepreneurial potential (Zimmerer et al, 2005).

Hypothesis and Theoretical Framework

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The first objective of this study is to determine which of the five entrepreneurial characteristic will significantly affect their commitment. Based on the discussion of the literature, the first research hypothesis is framed as follows;

H1: There is a significance and positive relationship between entrepreneurial characteristics and commitment.

This paper also investigates the role of government initiative as a supportive action to the entrepreneurial characteristics in creative industry toward their business commitment. Therefore, the second hypothesis is framed as follows;

H2: There is significance change between entrepreneurial characteristics and commitment when there is significance increase in government initiative.

Figure 1: Theoretical Framework on Entrepreneurial Characteristics toward Business Commitment

Need for Achievement

Locus of Control

Commitment

Entrepreneurial

Creativity

Characteristics H1

Innovative

H2

Utilising Market Opportunities

Government Initiative

Methodology

As this paper focus on the investigation of social phenomenon or behaviour among creative entrepreneurs in heritage industry, a descriptive research become as an approach to provide details about situation and social relationship. Through a descriptive research, a survey investigation was attempts to describe the perception of respondents toward their entrepreneurial characteristics which have associated with the business commitment.

This paper focuses on the creative entrepreneurs at Perbadanan Kemajuan Kraftangan Malaysia, Terengganu. According to the statistic produce by Kraftangan Malaysia (2008), 309 entrepreneurs from the whole of Terengganu are registered under this agency. Most of them are operated as a producer, distributor, agent, and retailer. Generally, the product that produced by Terengganu creative entrepreneurs are batik-based products, ceramics, wood carving, forest based fibre, "Songket" cloth, and silver. A total of 175 entrepreneurs are chosen for this paper, however only 105 entrepreneurs returned the questionnaires to the researcher.

In order to provide equal chance to the populations of sample at Kraftangan Malaysia, the researchers have chosen to use random sampling for this paper. The sample of entrepreneurs is divided into six groups based on the type of handicraft produced as defined by Kraftangan Malaysia. These types of handicraft are divided into batik, ceramics, wood curving, forest based, Songket (cloth woven with gold thread) and metal products. In using a random sampling in dividing the creative entrepreneurs into product based, researcher has used percentage to an equal chance to all the creative entrepreneurs. Table 2 shows the percentage of population and the sample based on product classification.

Table 2: The Total Number of Population and Sample Size

Type of Products

Population

Sample

Number

%

Batik

57

18.0

31

Ceramic

2

0.5

1

Wood curving

23

8.0

14

Forest based

141

45.0

79

"Songket"

78

25.5

45

Metal

8

3.0

5

Total

309

100.0

175

Data Analysis and Finding

In order to determine the association between the five "Entrepreneurial Characteristics" and the entrepreneur's business commitment as postulated in the first hypothesis, H1 the Bivariate Correlation is used. The Partial Correlation is used to determine the influence of "Government Incentives" on the relationship stated in H1, and consequently testing the second hypothesis, H2

A descriptive analysis is first conducted before the inferential analysis is executed in order to determine the significant of respondent's entrepreneurial profile and their business background with the factors in both entrepreneurial personality and business performance.

Reliability Analysis

Based on the reliability analysis, indicates that most of the variables that has been investigated in this study are found to be highly reliability as mention in a table 3. It means that the structure of questionnaire in this study is well consistence.

Table 3: Reliability Analysis of Variables

Section

(Variables)

Number of Item

Reliability Coefficients

(Cronbach Alpha)

Need for Achievement

3

0.650

Locus of Control

2

0.730

Creativity

4

0.756

Innovativeness

3

0.707

Utilising Market Opportunities

4

0.732

Commitment

5

0.724

Government Initiative

5

0.877

Descriptive Analysis

A frequency of respondents in each part of demographic profile is depicted in table 5. Most of creative entrepreneurs registered under Kraftangan Malaysia Terengganu are between the age between 40 and 60 (62%) years old followed by those in the 20 - 39 (25%)age bracket and the rest are below 20%. In term of gender, the majority of creative entrepreneurs are male (61%) and female (39%). Meanwhile, data collected shoed that is 78.1% of respondents are married, 12% are widowed and only 10.5% are bachelor. The majority of entrepreneurs operating in the creative business had their education business (58.1%), followed by those in arts (35.2%), and social science (4.8%). A few had their education in Science and Technology (1.9%).

In term of business profile, the result clearly shows that the majority of creative entrepreneurs who are registered with Kraftangan Malaysia Terengganu are those marketing their product in a district level (17%) and follow stated (44%), national (36%) and International level (3%). The majority of the entrepreneurs are producing Batek based product (31.4%), followed silver product (13.3%). Those producing wood carving, forest based fibre, Pewter and Songket products form the 3rd largest group at 12.4% respectively. The rest form less than 3%. As expected, the majority of the businesses are sole proprietorship (60%) followed by private enterprises (Sdn.Bhd) with 24.8% and only 15.2% are partnerships. In terms of financial sources, the majority of entrepreneurs uses their own resources (42.9%) followed by government loan (40%) and government aid (14.3%). Only 2.9% receive financial assistant from private financial institutions.

In this paper, entrepreneurial characteristic is considered the major independent variable which comprises of five elements that is postulated to have a significance relationship with the entrepreneur's business commitment. The five elements include; need for achievement, locus of control, creativity, innovative and utilising market opportunities. This is stated in the first hypothesis as follows:

H1: There is Positive and Significant Relationship between Entrepreneurial Characteristics and Commitment

A Bivariate correlation analysis is used to test the direction and strength of the relationship between the independent variables; entrepreneurial characteristics and business commitment.

Need for Achievement

Locus of Control

Creativeness

Innovativeness

Using Market Opportunities

Commitment

Need for Achievement

1

0.035

0.225*

0.361**

0.236*

0.313**

Locus of Control

0.035

1

0.072

-0.225*

0.024

0.058

Creativeness

0.225*

0.072

1

0.229*

0.457**

0.375**

Innovativeness

0.361**

-0.225*

0.229*

1

0.281*

0.457*

Using Market Opportunities

0.236*

0.024

0.457**

0.281*

1

0.551**

Commitment

0.313**

0.058

0.375**

0.407**

0.551*

1

Table 4: Correlation Analysis between Entrepreneurs Characteristics and Business Commitment.

*Correlation is significant at 0.05 level (2 tailed)

**Correlation is significant at 0.01 level (2 tailed)

Results of the Bivariate correlation analysis revealed that all the handicraft entrepreneurs' characteristics have a positive and significant association with their business commitment except for the construct "Locust of Control". Entrepreneurs' ability to use market opportunity showed the strongest association with the entrepreneurs' business commitment while need for achievement had the lowest relationship with their business commitment. High need for achievement is associated the other entrepreneurs' characteristics except Locust of Control. Interestingly, positive level of Locus of Control is associated with the negative level of Innovativeness among the entrepreneurs. Creativity of the entrepreneurs may be linked to all other character except Locust of Control with the strongest relationship with using and taking market opportunities. Innovativeness shown by the entrepreneurs is also associated with all other entrepreneur's characteristics. Using market opportunity and the level of commitment among the entrepreneurs are positively associated with other characteristics except for Locust of Control. All results are shown in table 4.

An application of government initiative as a moderating variable is suggested as an effective way in providing the small and medium creative entrepreneurs with the necessary support in terms of government policies, business aid, and also legal assistant. These types of supports are considered to be critical in the business expansion of the creative entrepreneurs and their business commitment. The impact of the government initiatives on the relationship between the creative entrepreneurs' entrepreneurial characteristics and their business commitment is stated in the second hypothesis as stated as follows:

H2: Government Initiative has a Moderating Effect on the Relationship Variable

The researcher conducted a partial Correlation analysis to determine the moderating effect of the variable "Government Initiatives" on the relationship between the entrepreneurs' characteristics and their business commitment. Result of the partial correlation analysis indicates that none of the entrepreneurs' entrepreneurial characteristics had any association with the entrepreneurs' business commitment.

These results indicate that the government initiative is not a significant influence in moderating the association between the entrepreneurs' entrepreneurial characteristics and their business commitment.

One interpretation of this phenomenon is that regardless of the level assistant and incentives provided by the government, the handicraft entrepreneur's business commitment is not affected by the government's decision to assist and supports the entrepreneurs' business activities. In addition the low correlation value revealed that there is lack of business commitment from the entrepreneurs and they remain committed only to their artistic purpose and objectives. Results of the Partial Correlation can be observed in table 4.

Table 4: Correlation Analysis between Entrepreneurs Characteristics and Business Commitment Controlling for Government Initiatives

Control for Government Initiatives

Need for Achievement

Locus of Control

Creativeness

Innovativeness

Utilising Market Opportunities

Commitment

Need for Achievement

1

-0.14

0.116

0.277*

0.038

0.146

Locus of Control

-0.14

1

-0.019

-0.281*

-0.080

-0.051

Creativeness

0.116

-0.019

1

0.151

0.351*

0.279

Innovativeness

0.277*

-0.281*

0.151

1

0.093

0.318

Utilising Market Opportunities

0.038

-0.080

0.351*

0.093

1

0.350

Commitment

0.146

-0.051

0.279*

0.318

0.350

1

*Significant Correlation

Discussion and Recommendation

Scholars have suggested that government initiative in the heritage industry has provided the platform for craft artists to develop their entrepreneurial personality which significantly influences their business commitment (Einnarson, 2002). Based on the result of the first hypothesis testing, the entrepreneurial characteristics of the craft entrepreneurs at Kraftangan Malaysia, Terengganu has a low to moderate level of association with their business commitment. The result highlighted the fact that private or public authorities need to create more innovative and creative ways to enhance entrepreneurial programs in terms of the five entrepreneurial characteristics discussed in this paper. Consequently, we would like to offer two changes in conducting programs to upgrade the level of personality among creative entrepreneur in Kraftangan Malaysia, Terengganu, there are;

Paradigm Shift

Based on the Pearson Correlation's result in testing the first hypothesis, entrepreneurial characteristics have been proven to have a positive and significant relation to the business commitment of the handicraft entrepreneurs. However, the association ranges from low to moderate. This result indicates that the handicraft (creative) entrepreneurs in Terengganu should enhance and improve their "entrepreneurial characteristics" as this would motivate them to increase their business commitment and subsequently help to develop their business into a viable and profitable venture.

These entrepreneurs should also take the initiative to develop their own personal character in terms of taking challenging task, solving problem, developing high self-confidence, ability to influence events, ability to study market environment and also creating new business strategy. This will help them create a business enterprise that is able to create a sustainable competitive advantage. Specifically, they have to change their attitude and business paradigm from being artistically committed into business-minded committed entrepreneurs as shown in table 5.

Table 5: Comparison between Artistic and Business Commitment

Artistic Commitment

Business Commitment

1. Dependent

1. Independent

2. Arts motivated

2. Business and art motivated

3. Self-appreciation

3. Consumer-appreciation

4. Creative

4. Creative &Innovative

5. Social oriented

5. Profit oriented

6. Product value depend on producer

6. Product value depend on customer

"Entrepreneurial Development Model" for Creative Entrepreneurs

As a government agency, Kraftangan Malaysia of Terengganu need to aggressively enhance and strengthen the traditional skill, craftsmanship and entrepreneurial characters of the creative entrepreneurs (usahawan kraf) who are registered under this agency. In fact, Kraftangan Malaysia Terengganu are also assisting craftsman in utilising modern methods of production, and promoting their handicraft products.

However, the government initiatives to aid and develop the creative entrepreneurs in Terengganu have not shown the desired results. Hence, government should revaluate their previous activities and programs, and rebuild new strategies to identify weaknesses in programs that were implemented to increase the entrepreneurs' entrepreneurial characteristics. Therefore, Kraftangan Malaysia, Terengganu should develop an entrepreneurial development model (training and motivation workshop, business incubator etc), as a guide to creative entrepreneurs to identify better personality traits which are necessary to develop their business commitment. The main content of this model is to assist the creative entrepreneurs in developing strong entrepreneurial characteristics such as the skill and ability to search better business improvement, locus of control, creative, innovative and also strategic to grab market opportunities in a competitive market.

Conclusion

Entrepreneurship research in the heritage industry is a new and under explored research in Malaysia. This is especially true in entrepreneurship research among the small and medium enterprise. We proposed that the development of entrepreneurial characteristics in the heritage industry is the right approach to build up the creative entrepreneurs' business commitment in their respective field. A good infrastructure becomes useless if the creative entrepreneurs lack the business management skill and desire to improve their business as discussed earlier. The findings of this study are applicable to a wide range of heritage industry in Terengaanu and provide the necessary knowledge to increase the level of activities in the artistic and heritage industry into a new dimension. Moreover, the Malaysian government may utilize this finding as the foundation to develop new strategic plans, policies and programs to help the creative entrepreneurs create sustainable competitive advantage in the Malaysian and foreign heritage market.