Entrepreneurship Education And Its Impact On Intentions Business Essay

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Our education system has produced brilliant minds for the corporate and government sectors. They are coming from the institutions like IBA, LUMS, Lahore School of Economics, GIK and AKMC to name a few. The problem is that all these immensely talented individuals go to the market as job seekers and our economy does not have enough jobs for them. Therefore there is a need to introduce entrepreneurship as part of the curriculum in the formal education system from secondary/higher secondary levels to tertiary level. When we produce an entrepreneur he does not look for a job rather he sets up an entity that provides jobs. Our academic curriculum should induct entrepreneurship education from school level to university level.

An entrepreneur is one who creates a new business, taking risks and uncertainty in gaining profits, by identifying opportunities and marshalling the resources. Marshall in 1920 described entrepreneur as someone who "combines through vigorous activity the factors of production, labor and capital so as to produce an increased output of goods and services thereby increasing the total wealth or material welfare of the society". Economists consider entrepreneurs as drivers of the market economy. Now if we consider a country like Pakistan, where economy is down, poverty and unemployment is soaring and law and order situation is worsening, the concept of entrepreneurship brings solution of a lot of problems. People should be motivated for self employment; it will not only increase their wealth but also create some job opportunities.

Now the question arises that how can we motivate people to become entrepreneurs? Here comes the concept of entrepreneurship education. People should be taught about this concept and they should be encouraged to start their own ventures. There are certain traits associated with the entrepreneurs. In 1983 huge research was undertaken by a US based firm International Management System to determine the traits of entrepreneurs. The study suggested that there are a number of traits associated with success. There were three main clusters of these traits:

Achievement Cluster

Planning Cluster

Power Cluster

Opportunity seeking, persistence, commitment to work contract, demand for quality and efficiency and risk taking fall under Achievement cluster. Planning consists of goal setting, systematic planning and control and information seeking. Whereas, the Power cluster includes persuasion and networking and self confidence.

Allan Gibbs, out of Durham University Business School in the UK, challenged the validity of the assumption that only those with certain entrepreneurial characteristics can successfully be self employed or run independent owner managed business. In this view, we can say that entrepreneurial education can be a tool for developing these traits in individuals and motivating them to become entrepreneurs.

BACKGROUD PROBLEM OR RESEARCH INTEREST

As entrepreneurs are drivers of market economy. Keeping in view the economic growth and condition of Pakistan, the country needs such business ventures to keep up the economic growth and stabilize the market economy. Here our purpose is to find which what intentions of people are before they start a business venture and how these traits can be taught or built so that more and more people pursue entrepreneurship.

SIGNIFICANCE OF THE STUDY

This particular topic is of relevant importance as it is the need of the hour to promote entrepreneurship in this country. It will not only generate wealth, but also create job opportunities. There are two schools of thought regarding entrepreneurial potential. One is that it is quite natural for an individual to become an entrepreneur if he has certain traits like identifying the opportunity, taking risk and commitment to work etc. the other one is that these traits can be taught to the students through an effective curriculum of entrepreneurship.

STUDY OBJECTIVES

Following are the research objectives of this study:

To find which factors (external) are responsible that make an individual to start a business venture.

To find which traits(internal) are responsible that make an individual to start a business venture

Can entrepreneurship traits can be taught or they are inborn

What percentage of students after doing MBA pursues entrepreneurship in Lahore?

Research Question

What are the key factors (internal & external) involved in developing entrepreneurial intentions? And what role does entrepreneurship education play in forming the intentions of setting up a business entity?

CHAPTER 2

LITERATURE REVIEW

CHAPTER 3

METHODOLOGY

Research Type

This is primarily a qualitative research which depends majorly on the primary data but the quantitative aspect will also be incorporated. It will show the relationship of certain variables with the entrepreneurial intentions of MBA students. The data gathered through questionnaires will be explained and the conclusion will be drawn.

Target Population

The target population for this project is the MBA students of Lahore. That takes into account students of all universities of Lahore who are offering MBA degree. Sample will consist of both male and female students, so there will be no differentiation regarding gender.

Sampling Frame

The research project target population is MBA students of Lahore, but it is difficult to conduct research of whole population so in sampling frame five major universities of Lahore are taken. These five universities include Lahore School of Economics, Lahore University of Management Sciences, Forman Christian College, Punjab University and FAST.

Sampling Procedure

Questionnaires will be distributed in all the above mentioned universities, through which the required information will be gathered. The sampling frame consists of five universities and 10 questionnaires distributed in each university make sample size of 50 people in the research study. The sample will be chosen on the basis of probability sampling. This means that all the elements in the target sample population will have an equal chance of getting selected. It will help in keeping the research biased free and hence achieving the objectives successfully.

Theoretical Frame Work

Opportunity

Employment

Culture

Economic growth

Tendency to take risk

Work experience

Resources

Age

Entrepreneurial intentions

Law and order situation

Inborn traits

Land

Resources

Labor

Capital

Family

Social circle

Friends

Entrepreneurial education

Relevant Variables and their Definition

Entrepreneurship Education

Entrepreneurship education seeks to provide students with the knowledge, skills and motivation to encourage entrepreneurial success in a variety of settings

Family Background

A caste, race or religion in which a person is raised.

Culture

The set of shared attitudes, values, goals, and practices that characterizes an institution, organization or group

Technology

Technology is the usage and knowledge of tools, techniques, crafts, systems or methods of organization.

Work Experience

It is the experience that a person has been working, or worked in a specific field or occupation.

Creativity

Creativity refers to the phenomenon whereby something new is created which has some kind of value.

Inborn Traits

Characteristics, chief points, or personality qualities you are born with.

Resources

A resource is any physical or virtual entity of limited availability that needs to be consumed to obtain a benefit from it.

Tendency to Take Risk

Being optimistic rather than being a pessimist.

Opportunity

A possibility due to favorable combination of circumstances.

Unemployment

Unemployment as defined by the International Labor Organization occurs when people are without jobs and they have actively looked for work within the past four weeks.

Law & Order Situation

State of society where vast majority of population respects the rule of law, and where the law enforcement agencies observe laws that limit their powers.

Friends

Friends refer to the friends you have in your social circle

Land

Total amount of area one has within a certain geographical location

Labor

Total amount of human resource which is available for use

Capital

Total amount of money as well as machinery which one can use

Age: Age refers to which age group you belong to.

Economic growth

Economic growth refers to economic conditions of your country

Educational institute

This refers to which educational institute from where you belong.

Social circle

People who you interact with on regular bases are considered to be in your social circle

Independent and Dependant Variables

Independent Variables

Entrepreneurship Education

Resources

Tendency to take risk

Opportunity

Social circle

Dependent Variable

Entrepreneurial Intentions

Operational Definitions

Resources

Resources include all the factors of production. These include land which is total amount of land available for use, labor which refers to total human resource you have, capital which is the amount available for investment. The resources have a positive relation with the entrepreneurial intentions. The more the resources, the more will be intentions to be an entrepreneur because there are more chances of success.

Tendency to take risk

Tendency to take risk refers to capability of people to take risk. If the tendency to take risk is high there will be more chances that people will tend to be an entrepreneur. The risk taking ability is influenced by many factors for example law and order situation, culture, inborn traits, friends, family and work experience.

Opportunity

It is a favorable juncture of circumstances. It has a positive relation for example if there are lot of opportunities available, people will like to avail them which will promote the entrepreneurial intentions.

Unemployment

Unemployment mean people are not able to get jobs, if there is unemployment, people they have to do something in order to survive, then they will start their own business which might not be very big but still they are involved in entrepreneurial activity hence we can say that unemployment give a boost to entrepreneurial intensions.

Family background

Family background refers to whether if your family is involved in their own business or they are employed. Usually people join their inherited business and become an entrepreneur.

Entrepreneurial Education

Entrepreneurship education is preparing young people to be responsible enterprising individuals, entrepreneurial thinkers and contribute to economic development and sustainable communities. This has a positive relation as the people are told, taught and learn about entrepreneurship and its advantages over getting a job, more people will like to be entrepreneurs.

Hypothesis

H0 Entrepreneurship education can create entrepreneurial intentions in MBA students.

H1 Entrepreneurship education can NOT create entrepreneurial intentions in MBA students.

H0 Unemployment leads to entrepreneurial intentions and venture creation in MBA students.

H1 Unemployment does not lead to entrepreneurial intentions and venture creation in MBA students.

H0 It is the inborn traits that are the major predictor of the creation of entrepreneurial intentions among MBA students.

H1 It is not the inborn traits that are the major predictor of the creation of entrepreneurial intentions among MBA students.

Data Collection and Analysis

In this study, primary and secondary research are both incorporated. The reason for this is to be able to provide adequate discussion for the readers that will help them understand more about the issue and the different variables that are involved with it. The primary data for the study is represented by the survey results that will be acquired from the respondents. On the other hand, the literature review that has been presented in the second chapter of the study will represent the secondary data of the study. The secondary sources of data were published articles from business and entrepreneurship journals, research studies and related studies on entrepreneurial traits/intentions.

The nature of data that is collected will is both, quantitative as well as qualitative. For primary data, we used a combination of two different techniques, namely questionnaires and focus groups. Questionnaires were quantitative with several closed ended questions, making it easier for them to be tabulated during the latter part of the analysis. Focus groups were obviously qualitative, with in depth analysis of responses given by participants.

There were a total of 50 questionnaires floated in the university students. Collected data through the two methods was analyzed after all relevant data had been gathered from the respondents of the research. Due to dissimilar nature of the methods, quantitative/numerical analysis using statistical tools were used for the questionnaire. This included the use of charts, graphs and also cross tabulation analysis to confirm the validity of our hypotheses that we developed.

On the other hand, the interview and focus groups were analyzed qualitatively since they include in depth answers to the questions put forward to them.

CHAPTER 4

RESULTS AND ANALYSIS

RESULTS AND ANALYSIS

Cross Tabs:

Career as Entrepreneur * Career as Govt. Employee Cross tabulation

Count

Career as Govt. Employee

1.00

2.00

3.00

4.00

5.00

Career as Entrepreneur

1.00

0

2

8

5

5

2.00

1

0

1

0

0

3.00

2

3

1

5

1

4.00

0

1

3

0

3

5.00

2

1

5

0

1

Total

5

7

18

10

10

MBA students were asked about the probability of starting their careers as entrepreneurs, as government employees and as employees of some big MNC. 8 respondents were of the view that there is high probability that they will start their career as entrepreneurs but they were neutral about the chances of going to the government sector. A total of 5 respondents were of the view that they will prefer government sector. Most of the respondents were neutral about going to the government sector. Entrepreneurial intentions are quite evident from the results of the cross tabs.

Career as Entrepreneur * Career as an Employee of a big MNC Cross tabulation

Count

Career as an Employee of a big MNC

1.00

2.00

3.00

4.00

5.00

Career as Entrepreneur

1.00

0

3

13

1

3

2.00

1

0

0

0

1

3.00

9

0

1

1

1

4.00

7

0

0

0

0

5.00

7

0

2

0

0

Total

24

3

16

2

5

The cross tabs result of career as entrepreneur and career as an employee of a big MNC show that 13 respondents are neutral about the probability of going to an MNC, but they are quite determined to start their career as entrepreneurs. But when we look at the total, it is evident that MBA students are more interested in starting their careers as employees of some big MNC as compared to Entrepreneurship.

Lack of Employment Opportunities * Low Economic Growth Cross tabulation

Count

Low Economic Growth

2.00

3.00

4.00

5.00

Lack of Employment Opportunities

1.00

3

3

5

2

2.00

1

10

13

1

3.00

3

4

2

0

4.00

1

0

2

0

Total

8

17

22

3

H0 Unemployment leads to entrepreneurial intentions and venture creation in MBA students.

H1 Unemployment does not lead to entrepreneurial intentions and venture creation in MBA students.

When comparing the low economic growth and the lack of employment opportunities as influential factors in forming the entrepreneurial intentions, it was found that 13 respondents totally agreed to the fact that lack of employment opportunities play a positive role in developing entrepreneurial intentions of the individuals and 25 respondents simply agreed to this statement. So a total of 38 respondents out of 50 agreed to this statement. On the other hand, the low economic growth is considered as a discouraging factor by the respondents as a total of 25 respondents disagreed to the statement that low economic growth helps individual to start business ventures and 17 respondents were neutral about this statement. So as the results show, 76% of the respondents agree that lack of employment opportunities leads to entrepreneurial intentions, this means that the hypothesis H0 stands.

Previous Work Experience * Inborn Traits and Risk Taking Ability Cross tabulation

Count

Inborn Traits and Risk Taking Ability

1.00

2.00

3.00

4.00

Previous Work Experience

1.00

1

4

0

0

2.00

4

4

0

0

3.00

7

6

0

1

4.00

6

10

1

0

5.00

3

3

0

0

Total

21

27

1

1

H0 It is the inborn traits that are the major predictor of the creation of entrepreneurial intentions among MBA students.

H1 It is not the inborn traits that are the major predictor of the creation of entrepreneurial intentions among MBA students.

Risk taking ability is always considered as a vital factor in forming entrepreneurial intentions. This notion was reinforced when a total of 21 respondents totally agreed to this and a total of 27 simply agreed that inborn traits and risk taking ability is important in this regard. Most of the respondents who agreed with the risk taking ability as an important factor, disagreed with the notion that previous work experience is necessary for starting a business. MBA students seemed to be very clear in their minds while answering these questions related to the tendency to take risk that is why we find very few respondents with a neutral view point.

So the hypothesis H0 is proved here as the respondents consider inborn traits and risk taking ability as the major factors in the success of an entrepreneur.

Resources * Skilled Labor Cross tabulation

Count

Skilled Labor

1.00

2.00

3.00

4.00

5.00

Resources

1.00

1

3

1

1

1

2.00

0

5

6

11

0

3.00

0

2

2

2

0

4.00

0

2

2

10

0

5.00

0

0

0

1

0

Total

1

12

11

25

1

When asked about the major hurdles in the execution of the business plans, 11 respondents who agreed to the lack of (financial) resources as the biggest hurdle disagreed to the unavailability of skilled labor as a reason for not being able to start their business. But an interesting finding was that there were 10 people who disagreed to both these factors as hurdles in starting their career as entrepreneurs, so here comes the role of intentions. These respondents can be future entrepreneurs if they have the intentions to do so. If we see the total, it is evident that 54% of the respondents do not have any problems with the labor but on the other hand 58% of the respondents have some business plan in their minds but they cannot execute it because they do not have enough resources.

Family Support * Financial Support from Friends Cross tabulation

Count

Financial Support from Friends

1.00

2.00

3.00

4.00

Family Support

1.00

6

0

0

0

2.00

4

13

2

0

3.00

2

7

4

0

4.00

1

3

2

3

5.00

0

0

2

1

Total

13

23

10

4

Most of the times, family background plays a major role in forming entrepreneurial intentions. When respondents were asked whether they will be encouraged by their families if they start a business, 13 respondents agreed to it and they also agreed that their friends will support them financially (if required). 50% of the respondents agreed that they will be encouraged by their families whereas 72% had faith in their friends that they will support them in any possible way. 13 respondents were neutral about their family support and 12 disagreed to this statement. It shows that family influence is there and it is a significant influence.

Entrepreneurship as a Course * Awareness of Procedures Cross tabulation

Count

Awareness of Procedures

1.00

2.00

3.00

4.00

5.00

Entrepreneurship as a Course

1.00

2

20

17

10

1

Total

2

20

17

10

1

This is an interesting finding as 100% of the respondents have entrepreneurship as a compulsory course in their MBA 11 respondents who do not know the requirements of starting a business venture, 17 are neutral so they are not sure as well and 22 respondents agreed that they know all the procedures involved in starting a firm.

Entrepreneurship as a Course * Entrepreneurship Project Cross tabulation

Count

Entrepreneurship Project

Total

1.00

Entrepreneurship as a Course

1.00

50

Total

50

50

All the students who have studied entrepreneurship as a course in their MBA, have also done a practical demonstration of their knowledge with the help of a Class Project. This shows the rising trend of entrepreneurship education in Pakistan. The positive point is that its not only the theory which is being taught but the practical aspect is also involved through projects.

Entrepreneurship affecting Intentions * Masters Degree Cross tabulation

Count

Masters Degree

1.00

Entrepreneurship affecting Intentions

1.00

7

2.00

18

3.00

16

4.00

9

Total

50

H0 Entrepreneurship education can create entrepreneurial intentions in MBA students.

H1 Entrepreneurship education can NOT create entrepreneurial intentions in MBA students.

The respondents were asked about the impact of entrepreneurship course on their intentions to become entrepreneurs. 50% of the respondents agreed that after studying this course they are seriously considering to start their career as entrepreneurs. This seems to be a very healthy trend and this is a vital finding as far as this particular research work is concerned. It shows that entrepreneurship education has a very positive impact on the intentions of MBA students to start their business ventures. The other question was about introducing the Masters degree in entrepreneurship, 100% of the respondents agreed to this notion and they gave reasons for their answer, most of them want this to happen because this is an untapped area for research and development, some of them say that it will bring more educated businessmen in the market which will ultimately help Pakistan.

The hypothesis H0 stands as there are only 9 respondents who disagree that entrepreneurship course did not have any impact on their career choice but 50% of the respondents agree that after studying entrepreneurship they seriously considered to start a business venture. While 16 respondents (32%) remained neutral.

CONCLUSION

The survey was carried out to know the entrepreneurial intentions of the MBA students. The students were to respond to a questionnaire that was designed to know their preferences towards career choices and their views about entrepreneurship education and the impact it has on their intentions.

It was an interesting finding that 54% of the respondents wanted to start their careers as employees of some big Multi National Company. The second choice as the result of the survey show, is the career as an entrepreneur and the very minute part of the target population want to join the government sector.

In response to the questions about unemployment and economic growth as factors influencing entrepreneurial intentions, the respondents were very clear that unemployment leads to the formation of entrepreneurial intentions of the individuals. It can be seen that 76% of the respondents were in the category of totally agree and agree in response to the question regarding lack of employment opportunities. Whereas we see an agreement between the respondents on the point that low economic growth is a discouraging factor for the individuals who want to start a business venture.

MBA students were very clear in their minds about the importance of inborn traits and risk taking ability for becoming successful entrepreneurs. 96 % of the respondents fell in the category of totally agree and agree in response to the question regarding the importance of inborn traits and risk taking ability. Most of the respondents did not support the notion that previous work experience is a necessary pre-requisite to start a business venture.

Resources (land, labor and capital) are always required to actualize your business plans. The respondents were divided on this factor as a hurdle in their business plans' execution. Most of them (about 58%) have financial constraints in starting their own business venture. Some were of the view that lack of skilled labor is the biggest hurdle.

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