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Essay title - A critical investigation into the factors which support the development of entrepreneurship in the North West region of England

1.0 Introduction

According to Mazzarol, Volery, Doss and Thein (1999) “The driving force in the modern economy for the past ten years, and the foreseeable future, is entrepreneurship. Entrepreneurs are meeting our economic needs through the creation of thousands of new businesses each year”.

Entrepreneurs are and will be the main factor which reduces unemployment from the society and they also provide many other benefits to the economy and the society, hence entrepreneurship is a vital topic to study so we can understand what are the main factors which drive an individual to become an entrepreneur.

The aim of the module “Dissertation Proposal” is to give clear picture of the topic area chosen for the actual dissertation, and also to bring forward literature and the research process related to the chosen topic area. I have selected “Entrepreneurship” as the topic of my study due to the importance of the topic. The essence of this research is to investigate the factors (for example power, wealth, freedom etc) which support/motivate individuals to become entrepreneurs.

2.0 Aim

“A critical investigation into the factors which support the development of entrepreneurship in the North West region of England”

2.1 Objectives

  • What factors motivate individuals to become entrepreneur e.g power, wealth, freedom etc.
  • To understand if power and wealth is the only motivation for entrepreneurs
  • To understand the potential risk/benefits involved in entrepreneurship

3.0 Rational for the Study

“Of the many people who dream of working for themselves by starting their own businesses, few realize their dreams and even fewer survive over the long-term”. (Wu, Matthews, Dagher, 2007).

Starting own business is full of risk and uncertainties, entrepreneurs must understand the potential personal and social risks involved in entrepreneurship before they make any decision of creating new venture. It is very important to understand the reasons why only few people survive over the long-term in the journey of entrepreneurship so one can minimize the risks involved. The understanding of the characteristics of an individual involved with entrepreneurship and the motives that have forced him/her to start his/her own business play a major role in the long-term success of an individual in the field of entrepreneurship.

According to Mazzarol, Volery, Doss and Thein (1999) “A great deal is known about the characteristics of entrepreneurs and the motives that have urged them to set up a business venture”, still plenty more can be done to enhance our understanding towards the factors which support development of entrepreneurship in the North West region of England to bring benefits for the individuals working in this field. The reason of selecting North West England is the fact that the entrepreneurial activities in the region are at its highest, as according to The Northwest Regional Development Agency “In the Northwest, there was a net increase in entrepreneurial activity, from 4.6% to 4.9% between 2005 and 2006” even though there was a decline in overall entrepreneurial activities in all G8 countries. (NWDA, 2007)

Hence this study is an attempt to develop the understanding towards up-coming perception of entrepreneurs in this dynamic and rapid changing business environment in North West England, and to understand if individual motives to become entrepreneur have changed with the passage of time and also to explore the risks/benefits involved with entrepreneurship in the era of globalization.  

4.0 Literature Review

4.1 Entrepreneurial Overview

Economist and Psychologist view entrepreneurs in two different ways, according to Hisrich et al (2005) entrepreneurs are viewed differently by Economist and Psychologist, “To economist entrepreneurs are individuals who bring resources, labour, materials and other resources in order to combine them to increase their value and also entrepreneurs innovate and bring new ideas. To psychologist entrepreneurs are forced by the desire to achieve something or to experiment things so they can differentiate themselves from others”.

One way or the other entrepreneurs are bringing benefits to the society and should be considered as important assets of our society due to the fact that entrepreneurship is a way forward to our economic growth and stability, in recent years the impact and important of entrepreneurship in our society has increased rapidly.

From its beginning the topic of entrepreneurship has only been viewed in the light of economic theories which has its own limitations, hence there are moves towards the understanding of a broader view of the topic area (Rae, 2007, p.23). According to Hamilton, Harper (1994) “The Entrepreneur, in one form or another, has been around a long time in both economic theory and empirical studies of entry”, the study of entrepreneurship has been the interesting topic for researchers from a long time and still plenty of research is going on related to entrepreneur and entrepreneurship.

According to Murphy, Liao and Welsch, (2006) “From the fall of Rome (circa 474 CE) to the eighteenth century, there was virtually no increase in per capita wealth generation in the west, With the advent of entrepreneurship, however, per capita wealth generation and income in the West grew exponentially by 20 percent in the 1700s, 200 percent in the 1800s, and 740 percent in the 1900s”, this shows how entrepreneurship has developed over the period of time and has brought wealth for the economy and the society, hence due to the increasing competition and capitalization the risks involved in entrepreneurship have also increased with the passage of time”.

The essence of entrepreneurship has also changed dramatically from its early stages, according to Murphy, Liao and Welsch (2006) “Entrepreneurial thinking has changed rapidly throughout its history and has gone through many unpredictable turns and intense developments”, for example globalization has opened many new channels for entrepreneurship, changing the whole criteria of entrepreneur and entrepreneurship.

Commonly in every day life we regard entrepreneurs as dynamic and self-motivated individuals, who can identify, assess and seize opportunities to achieve successful outcome for their own benefits as they are self motivated individuals who only look for their own best interest. On the other hand Tropman and Morningstar (1989) argue that “Becoming an entrepreneur is not only about identifying the opportunities it is also a responsibility as many other people involved to accomplish the vision of an entrepreneur, academics also take in to account psychological perspectives to widen the material and to investigate such practice”, hence plenty of literature is available on entrepreneurs motivation/behaviour and entrepreneurship which will be helpful to conduct the research on this topic.

According to Segal, Borgia and Schoenfeld, (2005) “Motivation plays an important part in the creation of new organisations, being an entrepreneur one who is self-employed and who starts, organize, manages, and assumes responsibility for a business, offers a personal challenge that many individuals prefer over being an employee working for someone else”.

In the light of the above Sagal et al (2005) claim we can assume that personal motivation or interest in a particular sector can influence individual’s selection of career, it can also be assumed that those individuals take more risk and like to accept challenges are more likely to become entrepreneur as entrepreneurs are more risk taking and innovation friendly persons.

According to Rabey (2001) “The ingredients of motivation lie within us all. Circumstances and situations will determine the stimulus which will generate response + to drive forward, to withdraw or to wait for a further signal. Once the response is decided, the degree of general purpose enthusiasm evoked will control the momentum”.

Motivation helps to increase the desire of achieving best results; for entrepreneurs motivation play a vital role when an individual decide what he wants to do and why, if the motivation in not part of the decision of an individual the whole process can be fake and bias due to the fact that motivation bring the required amount of interest which lead to hard-work and dedication.

The study of motivation according to (Mullins, 2002) “is concerned, basically, with why people behave in a certain way. The basic underlying question is ‘why do people do what they do? Motivation enhances attraction towards a particular core of action in regard to another action”, this shows that motivation and behaviour of individuals play an important role when they choose their careers; the study of motivation and behaviour of individuals and also the motivational factors of an individual of becoming entrepreneur can help to understand the characteristics of entrepreneurs.

It is know that entrepreneurs look for opportunities in order to succeed; the main motivation for entrepreneurs is to seize good future opportunities such as power, wealth, freedom etc, though entrepreneurs must understand that all the opportunities present are not easy to grab, as many opportunities that are present in the business world are based on the customers satisfaction and due to the increased competition in the market place it is not very easy to grab each and every opportunity present, even with the presence of highest motivation in individuals to gain that particular opportunity.

According to Cooper (1981) “the usual practice among entrepreneurs to seize opportunities is by instinct and unofficially with out giving any consideration to the business environment”, hence the number of failure in the field of entrepreneurship is very high, the understanding of the literature related to the opportunity identification is essential for entrepreneurs to be successful, the opportunities for entrepreneurs are available in the social circles where they operate and seizing these opportunities depends on how these social networks are utilised by entrepreneurs and also depends on how well entrepreneurs are connected to the network.

The literature related to “Entrepreneurship” along with “Behaviour and “Motivation” theories will be very helpful to explore the topic area chosen for this research.

The research methodology of the study is explained in the next part of the report to give clear understanding on how this research will be performed.

5.0 Research Methodology and Design

In this research entrepreneurs will be looked at from a Psychologist view where “they forced by the desire to achieve something or to experiment things so they can differentiate themselves from others” (Hisrich et al) means they have some motives to become entrepreneur such as gain more power, wealth, freedom etc. For this reason, the researcher will adopt a research methodology that emphasises on feelings, behaviour and emotion i.e. qualitative approach, rather than just quantity or numbers. This research will adopt the interviewing research method in order to understand the motives of individuals in their development of entrepreneurship. Although the research will predominantly base on qualitative data however some form of quantitative data will be involved through both primary and secondary sources in order to verify the authenticity of the data collected through interview-based surveys and unstructured interviews.

“Interview-based surveys can be taken face-to-face or telephone-base with fixed set of questions with pre-specified and standardized wording, where responses to most of the questions have to be selected from a small list of alternatives” (Robson, 2002) this format of interview will be used to gather waste responses, hence the responses can be related and examined with the data gathered from unstructured interviews where the respondent have much more flexibility of response and can share his/her own feelings in response to the questions asked, as in “unstructured interviews the interviewer has a general area of interest and concern, but lets the conversation develop within this area, unstructured interviews are widely used in flexible, qualitative designs” (Robson, 2002, p. 270-271) hence in order to gather qualitative data unstructured in-depth interviews would be more appropriate.

According to Esterby-Smith et al (2002) “Philosophical matters help understanding the relationship between data and theory and this could affect the quality of the research”. Positivism approach support natural sciences and very much consider the reality, “Underlying positivism is the assumption that the researcher is independent of and neither affects nor is affected by the subject of the research” (Remenyi, Williams, Money, Swartz, 1998, p.33).

Where as interpretive approach describes that world is too complex to understand just by social laws and positivist approach ignores to understand this complexity of the world. Focuses on uncovering, “The researcher has to look beyond the details of the situation to understand the reality or perhaps a reality working behind them. The researcher constructs a meaning in terms of the situation being studied” (Remenyi, Williams, Money, Swartz, 1998, p.35)

According to Creswell (1998) “Before carrying out any research the considerations of ontological and epistemological factors have to be taken into account in order to make a decision”. This research aims to understand the factors which influence individuals to become entrepreneurs and their motivation factors hence the positivist and interpretive philosophical methods of research will be used. The positive aspect of using positivist approach is that it is reliable as compared to interpretive approach because in this approach data is gathered through primary sources and it is reliable but interpretive approach uses the secondary data which can’t be checked again to see reliability as compared to primary data but this research will use both methods due to the nature of the study.

In the light of the research philosophy, approach and method defined above, the researcher have decided to conduct primary research with the help of interview-based surveys and unstructured interviews with business students and entrepreneurs in order to facilitate the research with diverse data both in the form of quantitative and qualitative measures, also desk based research with the help of previous research done and literature available on the selected topic.

5.1 Advantages/Disadvantages of collecting data through questionnaires and interviews:

5.1.1 Questionnaires

According to Saunders et al (2007) “Questionnaires facilitates collecting both quantitative and qualitative data, the process can be well controlled and if structured carefully response is easy. As more or less same questions will be asked questionnaires provides an efficient way of collecting responses from a large sample in less time”. On the other hand questionnaires sent by mail have a low response rate and it’s a time consuming exercise therefore the researcher have decided to conduct face-to-face and telephone-base surveys using structured questionnaire.

5.1.2 Interviews

“The interview is a flexible and adaptable way of finding things out. Observing behaviour is clearly a useful enquiry technique, but asking people directly about what is going on is an obvious short cut in seeking answers to our research questions” (Robson, 2002, p.272) however it is not very easy to get the response which is totally reliable as bias in responses can not be rule out, it requires certain skills and professionalism to a conduct an interview where responses can be considered as reliable.

Interviews can also be time consuming as they require careful preparation and enough background knowledge of the topic area. According to Robson (2002) “The actual interview session itself will obviously vary in length. Anything under half an hour is unlikely to be valuable; anything going much over an hour may be making unreasonable demands on busy interviewees, and could have the effect of reducing the number of persons willing to participate, which may in turn lead to biases in the sample that you achieve”. To overcome these problems and to improve the quality and quantity of data it is important that interviewer must be well prepared in advance to avoid any delay, conflict and mismanagement of data, as often sample size is limited and the quality and quantity of the data mostly depends on the skills and professionalism of the interviewer. In order to gather qualitative data researcher will adopt the unstructured interview method of data collection.

6.0 Sample Size and Data Analysis

A sample is a group of people to whom researcher ask questions in order to reach to a decision on a particular topic or area of study, researcher assume the ‘sample’ as the representative of the whole population as they believe the population is homogeneous and can reflect view of a large number of people, hence I researcher will use a sample of business students and entrepreneurs to conduct this research.

The data gathered will be analysed with the help of different data analysis softwares especially SPSS which give graphs, tables and reports once we input the data, it will be easy for me to come up with a decision as the processed data will be much easier to interpret.

7.0 Limitations

Any sampling can have biased view due to the fact that people might not give true answers to the questions asked because it all depends on the nature of the questions, if the questions asked are more personal people might avoid giving answers to such questions.

Also being a student there is no financial support to conduct the primary research hence the quality and quantity of the research might be affected, also the study has a time constrain due to the fact that it has to finish on a particular date which is submission time of the dissertation.

8.0 Ethical Considerations

Due to the nature of the research there is no ethical consideration to look at.

9.0 Timetable for Study

TIMETABLE

Date W/C

15.01.08

15.02.08

15.03.08

15.04.08

15.05.08

15.06.08

15.07.08

15.08.08

Research Design Stage

Literature review

Prepare Questionnaire

Primary Research

Gather Sufficient data

Analyse finding

Interpretation

Interpret Results

Draft up report

Final report

10.0 References

Cooper, A. C. (1981). Strategic Management: New Ventures and Small Business. Long Range Planning

Easterby-smith, M. Thorpe, R. Lowe, A (2002) Management Reserach An Introduction. London: sage publications

Hamilton, R. Harper, D. (1994) 'The Entrepreneur in Theory and Practice' Journal of Economic Studies, vol 21, Part: 6: [online] Available at: <http://www.emeraldinsight.com.librouter.hud.ac.uk/Insight/viewPDF.jsp?Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0020210601.pdf> [Accessed 09-11-07]

Herzberg, F. (1957) Work and the Nature of Man. Cleveland: World Publishing

Mazzarol, T. Volery, T. Doss, N. Thein, V (1999) 'Factors Influencing Small Business Start-ups A Comparison with Previous Research' International Journal of Entrepreneurial Behaviour & Research, vol 5, Part: no.2: pp. 48-63 [online] Available at: <http://www.emeraldinsight.com.librouter.hud.ac.uk/Insight/viewPDF.jsp?Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/1600050202.pdf> [Accessed 09-11-2007]

Maslow, H. (1987) Motivation and Personality, 3rd edition. Harper Row: London

Mullins, L (2002) Management and Organisational Behaviour. 6th ed. Essex: Pearson Education Ltd

Murphy, P. Liao, J. Welsch, H (2006) 'A Conceptual History of Entrepreneurial Thought' Journal of Management History, vol 12, Part: 1: pp. 12-35 [online] Available at: <http://www.emeraldinsight.com.librouter.hud.ac.uk/Insight/viewPDF.jsp?Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/1580120102.pdf> [Accessed 19-11-2007]

NWDA (2007) 'NWDA Welcomes Global Entrepreneurship Monitor Findings' , p. 1 [online] Available at: <http://www.nwda.co.uk/news--events/press-releases/200701/nwda-welcomes-global-entrepren.aspx> [Accessed 22-04-08]

Pandc (no date) 'Maslow's Holistic Dynamic Needs Hierarchy' , [online] Available at: <http://pandc.ca/?cat=abraham_maslow&page=needs_hierarchy> [Accessed 26-12-2007]

Remenyi, D. Wiliams, B. Money, A. Swartz, E (1998) Doing Research in Business and Management An Introduction to Process and Method. London: sage publications

Rabey, P. (2001) 'Motivation Is Response' Industrial and Commercial Training, vol 33, Part: 1: pp. 26-28 [online] Available at: <http://www.emeraldinsight.com.librouter.hud.ac.uk/Insight/viewPDF.jsp?Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0370330104.pdf> [Accessed 06-12-2007]

Rae, D. (2007) Entrepreneurship From Opportunity to Action. Hampshire: Palgrave Macmillan

Robert, D. Michael, P. Dean, A. (2005) Entrepreneurship. 6th ed. Irwin: McGraw-Hill

Robson, C. (2002) Real World Research. 2nd ed. UK: Blackwell Publishing

Segal, G. Borgia, D. Schoenfeld, J. (2005) 'The Motivation to Become An Entrepreneur' International Journal of Entrepreneurial Behaviour & Research, vol 11, Part: 1: pp. 42-57 [online] Available at: <http://www.emeraldinsight.com.librouter.hud.ac.uk/Insight/viewPDF.jsp?Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/1600110103.pdf> [Accessed 28-11-2007]

Saunders, M. Lewis, P. Thornhill, A (2007) Reserach Methods For Business Students. fourth ed. England: pearson education limited

TROPMAN, J. MORNINGSTAR, G. (1989) Entrepreneurial Systems for the 1990s. USA: Quorum

Wu, S. Matthews, L. Dagher, G (2007) 'Need For Achievement, Business Goals, and Entrepreneurial Persistence' Management Research News, vol. 30, Part: no.12: pp. 928-941 [online] Available at: <http://www.emeraldinsight.com.librouter.hud.ac.uk/Insight/viewPDF.jsp?Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0210301204.pdf> [Accessed 28-12-2007]

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