Entrepreneur

Personal determinants of an Entrepreneur

Personal Characteristics of an Entrepreneur Submitted to: Mr. Manan Khan

Submitted by: Adnan Faisal

203

Wasif Rasheed

211

Junaid Khalid

219

Shoiab Channar

229

M. Zubair

238

MBA 3rd Evening G-2 Session 2008-10

Department of Management Sciences

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The Islamia University of Bahawalpur PREFACE Department of Management Sciences, The Islamia University of Bahawalpur has always been admirable in its efforts to equip the future executives with arms of creativity, flexibility and adaptability to meet the challenges offered by fast changing business environment. To achieve the above goals the department is providing both text and practical knowledge to its students with its available resources. Text knowledge is very well transferred to the students within the premises of the department; Practical knowledge requires the kind co-operation of various business organization of the country. Faculty members are always trying their best to ask the students to explore the market by assigning these different field activities and to conduct the “Business Research”.

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Acknowledgement We first thanks to ALLAH, The Almighty who bestowed knowledge, health, vigor, to complete this report. “Life is a learning experience”. We have learned the validity of this statement time and time again. Every time we think we know something, we look back a year later and realize how little we know and how much we have learned. This Research Report has convinced us again, not in the learning but also in terms of the vast team of talented people that take part in creating this report. We believe each person plays a piece of a puzzle to make the complete picture, some pieces are bigger then others, but without anyone piece the picture would not be completed. We feel great pleasure and honor to express our gratitude from the citadel of our hearts to the people whom we met, for their cooperation. Their sympathetic behavior has an ever-lasting impression on the pages of our memory. We also give honor to Mr. Manan Khan who provide us an opportunity to get practical experience in fieldwork and whose guidance remained with us during completing this report. We also wordless to pay our humble gratitude to our parents, who have supported us to reach the point where we stand now and have been a great and enormous source of inspiration for us throughout the life

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ABSTRACT Purpose of the study: The purpose of the study is to uncover the personnel determinants that contribute to the success of entrepreneur. Methodology: Questionnaire and Interview technique was used to determine the personnel determinants of success. A structured questionnaire was employed to gather data and test the model through stratified sampling method. Findings: The results of correlation analysis had shown direct positive relation of (Age, Education, Experience, Locus of control, Risk, Knowledge, Decision Making, Innovativeness and tolerance for ambiguity) with entrepreneur’s success. •

Limitations and Implications: The research was conducted in particular geographical area. The findings will help managers to put more focus on the mentioned two dimensions and their related variables (demographic, Psychographic variables) which affect these dimensions. Findings also tell the managers about the factors which are the true determinants of entrepreneurial success at personal level. As the Research was conducted in Bahawalpur, so the responses generated by the Entrepreneurs seems not realistic because of they do not have enough information about some variable of interest.

Key words: Personal determinants, success, Bahawalpur

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TABLE OF CONTENTS TABLE OF CONTENTS ...................................................................................................5

Introduction The state bank of Pakistan defines SME as (small and medium enterprises). These are entities that are not categorized as public limited companies. Development of small and medium businesses has been debated in detail at public and private forums in Pakistan, but until recently the stimulus behind these efforts was more socio-political than economic. The main focus of economic policies, budgetary measures and regulatory administration was large scale industry. As a result, structural imbalances were created in Pakistan's business environment, which got skewed unhealthily towards promoting small and medium scale industry. Development Authority (SMEDA) as the flagship organization meant to provide support to SMEs in Pakistan through: 1. The creation of a conducive and enabling regulatory environment. 2. Development of industrial clusters. 3. The provision of Business Development Services to SMEs in all areas of business management. There is no uniform definition of SME across the broad in Pakistan. Different organizations and departments define SMEs in their on way. They small and medium enterprises do not have employees more than 250 in manufacturing sector and not more than 50 if it is related to services sector. Further more according to criteria set up by state bank of Pakistan SME must abide the following captions. Department of Management Sciences

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a) SME if related to trading should have total assets at cost excluding land and building up to Rs 50 million. b) SME if related to manufacturing should have total assets excluding land and building up to Rs 100 million. c) Any concern (trading, manufacturing or services with net sales not exceeding Rs 300 million as per latest financial statements. Global Importance: Recently three of the world’s leading accounting bodies including CPA Australia, certified general accountant association of Canada, and ACCA (association of charted certified accountant) along with world renowned economist conducted a survey. Following the surveys they concluded that all the government around the globe must concentrate on developing the medium sized business or the economy will be at stake and the world will have to face recession. They gave certain recommendations to governments, bank and business. The accounting bodies have called for continued support for SMEs. Noting that unless this sector has the confidence to resume hiring and investing, the global recovery could prove delicate. The significance of SMEs can be determined of the fact that in the recommendation lighter regulatory laws, supportive policies, selected fiscal incentives, reasonable labor flexibility and loan support was recommended for them. SMEs contribute to the system in following dimensions a) Unemployment and poverty reduction b) GDP and per capita income growth c) Value addition d) Export earning Importance of SMEs in Pakistan: SMEs in Pakistan hold immense importance as Pakistan is the gigantic producer of agriculture related raw material. Although Pakistan government do not concentrate on this sector of business as it does on the big industries. Still this sector has developed very fastly by the self initiatives of people. This sector has contributed a lot in the removal of unemployment and poverty. It has added remarkable value to the products exported to the international market. As an example the Faisal Abad power loomers are the significant part of the main textile sector. People need employment on the local level and this opportunity is provided by the SMEs of Pakistan. In order to fulfill the domestic demands of the region SME do prove themselves most significant. SMEs are considered as a backbone of economic growth in both developed and developing countries. As they provide low cost employment since the unit cost of persons employed is lower for SMEs as compared to large units. They also

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 Help in local development as SMEs fastens rural industrialization by linking it with the more organized urban sector  Play a pivotal role in export revenues because of the low-cost labor.  Have a positive effect on the trade balance as SMEs generally use home grown raw materials.  Maintain a reasonable growth rate since being indigenous is the key to sustainability and self -sufficiency.

Significance of study: One of the defining characteristics of a prosperous and growing economy is a flourishing small and medium enterprise (SME) sector. SMEs contribute to economic development in multiple ways, creating employment for expanding rural and urban workforce and providing much needed flexibility and innovation in the economy as a whole, No doubt there is a lot of work has been done on this sector but still the SME sector in Pakistan is facing a very significant failure rate, round about 90-95 percent business fails in initial stages. The previous work of researcher is insufficient to uncover the reasons and suggests ways to improve.

The most common reason of failure is lack of managerial/entrepreneurial characteristics. In Pakistan there in no concept of training and education before starting business and it becomes a real cause of failure. This study is helpful to demolish this traditional concept and to present a synthesis model of entrepreneur characteristics which are helpful to reduce failure rate. Objectives: The purpose of the study was to identify the personal determinants of entrepreneur which area helpful for the success of the business, further the objective of the study was not only to highlight the determinant of entrepreneurial success but also to check the impact of each determinant on the success of business. The study was helpful for Government to develop educational & training programs. By developing such programs the probability of failure in SME’s sector should be reduced. Problem Statement: Due to the growing importance of SME’s and their significant contribution to economic development so there is a need to strengthen this area so in order to provide to this section Government must have to take actions. The main issues in SME are their lack of entrepreneurial expertise so there must be educational or training program to develop these expertises. Failure rate of SME in Pakistan is very high around about 90 – 95 percent business fails in their first year and the rest of the business are hardly survive for 3 to 4 years So this research is conducted to explore the synthesize model of characteristics of entrepreneur that is needed for success. Because if we want to survive in this global village than we must have to upgrade our SME sector. Findings of this research encourage and increase the probability of success of the person who want to start their business as well as the person who is still in the business. Department of Management Sciences

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Literature Review This study gives an overview of different researches conducted by different authors on personal determinants of entrepreneur. This study begins with the current problem faced by the SMEs and their consequences. In this study the personal determinants of an entrepreneur which are important for the success of a business are discussed. There is need to explore the personal characteristics of an entrepreneur and importance of SMEs in Pakistan. The study includes personal determinants of an entrepreneur which influence the success of a business and are classified in Demographic, Psychographic and other variables. These categories have comprises different variables which play a momentous role for the success of a business.

Demographic Age: Age is very controversial factor at which almost all researchers have different opinions like (Rose, 2006) relates age with business success positievely while (Niels, Mirjam, & Gerrit, june 2000) relates age positievely with knowledge rather than the business success.Amazingly (Roy & Isabel) Support both (Niels, Mirjam, & Gerrit, june 2000) and (Rose, 2006) that age has positive relation with knowledge and further he add that knowlegde leads the business toward success which he says in support of (Roy & Isabel). Mario, Arminda, & Joao, (2008) are with the opinion which they divide in two parts. 1) The peoples upto entrepreneur.

age 24 usually did not feel positive indicator to start as an

2) They argue that willingness decreases as the entrepreneur grow old but opportunities increase with the increasing age. Department of Management Sciences

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Bostjan, (2009) totally disagree with all of the above, according to him age is directly related with business success not to the age of person it is the age of firm which matters. Prof Tapan placed in a group who relates persons age with business success. Education: Education is an important personal factor that entrepreneur is required for making a business successful. Education is the factor at which almost all researchers nearly have same view with minor addition like (Niels, Mirjam, & Gerrit, june 2000) believes that to make business successful, entrepreneurs required education as a personal factor. Ajay, Archana, Arup, & Lucky, (2008) relates education with entrepreneurs success significantly. Rose,( 2006) has compared educated entrepreneurs with non educated entrepreneurs and gives opinion that educated entrepreneurs have great chance of success. Prof Tapan argues in detail that why education is helpful for successful business? According to him education helps in making decisions, adoption of new technology, and providing market knowledge. Guzman, (1994) found the positive relationship of education with intrinsic motivation factors. Ajay, Archana, Arup, & Lucky, (2008) gave with unique and auckward theory. He says that education has positive impact on profit and as usual (Michael & Pamela, 1995) argue in their unique style describe two types of education. He says that creative education leads entrepreneur to high level of success while the entrepreneurs with standarized educationa experiences have low level of entrepreneurship. Gender: Arnold & Kendall, (1995) are the only who believes that gender has no influence on expactations but on the other hand they believe also that female entrepreneurs have higher level of satisfaction. All the other researchers seems to be more realistic like (Roy & Isabel) believes that males can engage themselves in entrepreneurship in a better way. Mario, Arminda, & Joao, (2008) agrue in detail the psycology of women aged between 21-25. According to (Mario, Arminda, & Joao, 2008) they want personal and economic independence. Further they say that although women want independence but they are less confidence and are incapable to lead. Again (Reynold, Bygrave, Autio, Cox, & M, 2002) support the idea of (Roy & Isabel) that women are 50 % less likely to involve in entrepreneurship as compared to male. Ingrid, Andre, & Roy, (may, 2004) had focussed females in third world countries. According to them the situation in third world countries is totally opposite, there women are very keen to seem self employed because mostly in developing countries women labor force is at very low level. Women are also very keenS for best living standard of their families and they are struggling to become an entrepreneur. Experience: According to (Brockhaus, 1980) like education, experience also contribute much in business success. Cooper, (1985) regard experience as a motivational factor which leads towards entrepreneurial success. Rose, (2006) had explained experience in a very typical way by giving comparison of high experience persons with a low experience one, obviously person with high Department of Management Sciences

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experience is much successful entrepreneur than the person with a low experience. Niels, Mirjam, & Gerrit, (june, 2000) simply give a list of field in which one has to gain experience to become a successful entrepreneur. The entrepreneur must have experienced in the following fields •

Experience in the sector

•

Experience in the trade

•

Experience as an employee

•

Experience in self employment

•

Financial experience

•

Family experience

If a person has these experiences it will help him to become a successful entrepreneur (Niels, Mirjam, & Gerrit, june 2000). Last comes (Michael & Pamela, 1995) argue in their special way. According to them persons with good experience as an employee have low level of entrepreneurship while persons with bad experience as an employee are very keen to become self employed. This theory is much close to human nature and it seems that (Michael & Pamela, 1995) had deeply study the psychology of human behaviour, especially employees. Further they had also compared people having bold experience with the people having complacent experience. Their words are in favour of persons with bold experience. Overall we can conclude that experience contributes much in business success, but experience must be in relevant field. Family Background: Niels, Mirjam, & Gerrit, (june, 2000) collectievely states that many persons have become entrepreneurs because of their parents who were also self employed, so family background has a positive impact on entrepreneur’s success. Prof Tapan agrees with (Niels, Mirjam, & Gerrit, june 2000) believing that not only children are influenced to become entrepreneur but they gain lot of experiences in childhood which leads to business success. Like others (Raman, 2004) also relates family background with business success positively but in a condition that encouragment by the family shall be there to ignitiate the child. Michael & Pamela ( 1995) found the relation ship of family background with entrepreneurship in such a way •

The person who has been brought up in a luxurious life style has low level of entrepreneurship.

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•

On the other hand the person who had faced number of hardships in his early life could have high level of entrepreneurship.

Psychographic Locus of control: AU,( 2007) talked about the Psychology of successful entrepreneur that they alone can control environment of the firm because they are selfconfident about their skills and knowledge. Koh, (1996) is in ful support of the study given by (AU, 2007) with minor addition which includes handling of ambiguous situations. Chen, Greene, & Crick,( 1998) concluded the studies of other researchers and give their words in favor of entrepreneur with greater internal locus of control and regarded him as more successful. Abdolhamid, Kiumars, Malekeh, & Mahya, (2008) are also in favor of (Chen, Greene, & Crick, 1998) they said that internal locus of control has strong positive relation wit the success of a business. Risk Taking: Michael & Pamela, (1995) gave a very general definition of the word risk. According to him risk taking is completely one’s own personal decision in which he is ready to bear loss in form of resources as well in form of capital. Following the footstep (Michael & Pamela, 1995, Bashir & Mahmood, 2008) also appeared with a very general but incomplete definition of risk because he only argue about entrepreneurs own capital invested in the firm neglecting the chance of loss in any form. (Entirialgo, Fernandez, & Vazquez, 2000, Thomas & Muller, 2000) collectievely gave the idea of differential entrepreneurs with empolyers and manager which is risk taking. (Cromie, 2000, Teoh & and Foo, 1997) also support this idea in their studies individually. (Mill, 1984) is also in support of this idea recomendig this differential point as a key factor. All of above talked about risk and risk takers but (Robert, october 2007) moved one step forward argue about the relation of success with risk. According to him one who know well about risk and can measure reward associated with risk can be a successful entrepreneur. Prof Tapan could be seem as the supporter of (Robert, october 2007) theory to some extent because he only states the risk taking as a key factor of success neglecting the knowledge of risk and reward associated with it. (Bashir & Mahmood, 2008) again gave incomplete definition of success ( same as Bashir individually argued in case of risk). They states that success is measured by entrepreneur capital invested in the firm. They did not associate risk taking with success. Last comes (Davidsson, 1989) who argue uniquely and seems to be close with general human nature. As he says that small entrepreneur do not indulge themselves in risk taking decisions.He also implies same thing with family responsibilities. According to (Davidsson, 1989) if a person is in desperate condition and has no other choice but to take risk, will take risk till the time of his goals which are at very small scale are achieved and further more he will stop taking risk. It seems (Davidsson, 1989) has immense understanding and a fine grip on entrepreneur’s thinking with respect to human nature. (Mill, 1984) Support (Davidsson, 1989) last idea that entrepreneur only indulge in risk in only those areas where he has great control to maximize profit. Department of Management Sciences

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Decision maker: Entrepreneur should be a strong decision maker because right decision at the right time lead business toward success while on the other hand wrong decisions at wrong time even right decision at wrong time or wrong decisions at right time may leads total destruction of a business success so decision making should be strong, timely and applicable

Knowledge: Entrepreneurs should have many competencies of which one of the important competencies is knowledge of the market or market awareness. As one should have proper knowledge of ups and downs of market which can be directly or indirectly harm or boost the business (Martyn & Peter). Flexibility: Entrepreneurs should be flexible by nature because sometimes we have to move forward aggressively in business and sometimes we have to move slowly, so one should be enough flexible so that person could convert him/ her self in every situation (Martyn & Peter) Need For Achievement: Sajie & Elizur, (1999) had given a traditional definition of need for achievement as they believe that behind the person’s struggle for success and perfection, there are some forces giving ignition, while (Abdolhamid, Kiumars, Malekeh, & Mahya, 2008) believes that it has large influence on business success and they relates need for achievement with entrepreneurship success positively. McClelland theory suports the idea given by (Hansemark, 1998) and (Littiunen, 2000) about need for achievement in which it is suggested most significant relationship with entrepreneurship. One can see that both (Hansemark, 1998) and (Littiunen, 2000) along with (McClelland) had related need for achievement with entrepreneurship not with entrepreneur success which differ minor in general ,but in deep had a major difference what (Abdolhamid, Kiumars, Malekeh, & Mahya, 2008) talked about, which is entrepreneur’s success not entrepreneurship. Innovativeness: Michael & Pamela, (1995) states that introducing new technology in products as well as in services is innovation. Further they relates innovation with entrepreneur’s attitude and behavior, and also insist that success can also be measured by innovative abilities of entrepreneur.As both (Entirialgo, Fernandez, & Vazquez, 2000) and (Mill, 1984) suggests that risk taking as a differential point between entrepreneur and employee or manager, same here write (Stewart, Carland, Carland, Watson, & Sweo, 2003) insists that innovative personality is also a trait which differentiate entrepreneur from employee and manager. Mario, Arminda, & Joao, (2008) argue Department of Management Sciences

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in detail that in starting a business mostly entrepreneurs rely on their own abilities so they must be of innovative mind. Bostjan,( 2009) also states that small firms faces more innovativeness than that of large firms. Zacharakis,( 1997) neither argued about success nor innovativeness rather he talked about the nature of innovative entrepreneurs, suggesting that they are always looking for new ideas and opportunities. Overall we can conclude that people are naturally innovators and innovation is a key factor which leads entrepreneur toward success specially in small firms where opportunities often blinks and had to be captured. Self Confidence: Cromie, (2000) believes that self confidence is not a determinant of entrepreneurship but when one has become a successful entrepreneur than he feel self confident about himself but on the other hand (Koh, 1996) and (Robinson, Stimpson, Hunefner, & Hunt, 1991) argue about self esteem which they believe is very high in entrepreneurs than others. Here all support the theory of (Cromie, 2000) to some extent that persons become selfconfident after becoming entrepreneurs. Tolerance of Ambiguity: If the situation is ambiguous or uncertain it requires entrepreneur to respond positively .If limited data is available for any situation and entrepreneur has to take decision on the basis of these scare information and have trust on his decision under uncertainty then it is said that his tolerance for ambiguity is high. Sensing opportunities and mobilizing Resources: According to (Bashir & Mahmood, 2008) entrepreneur’s success can be measured by calculating the borrowed capital with in the business. Achievement Orientation: Achievement orientation is the process of reinvesting the profit into the business. According to (Bashir & Mahmood, 2008) if the person reinvest the largest part of profit in the business for future growth than he is considered to be a successful entrepreneur. Efficiency in managing enterprises and mobilizing resources: Calculating the return on investment if the return on investment (ROI) is good. Its mean he/she is managing his/her resources efficiently and generating good profit. If the return on investment is increasing, it’s mean that entrepreneur is successful (Niels, Mirjam, & Gerrit, june 2000). Ability to balance work and ability: If the entrepreneur has the ability to balance his/ her work and his/ her life equally then it is said that he/ she is a successful entrepreneur (Niels, Mirjam, & Gerrit, june 2000).

Others Department of Management Sciences

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Generate Employment: According to (Niels, Mirjam, & Gerrit, june 2000) only high profit generator entrepreneur could not larger be called a successful entrepreneur until he give consideration to society and his employees. Variable “Employee generation” measure the social success of an entrepreneur. Satisfaction of employee with their work and turnover all are included in this variable, even firm’s survival time is also considered as a part of success. Openness: Bostjan, (2009) states that openness is a personality trait which is a key factor leads firm toward success. Bostjan, (2009) also insists that openness is the factor which ignitiate entrepreneurs to drop convential ideas, switching forward to new ones in term of technology and innovative ideas. He also states that openness has a strong positive relation with the entrepreneur’s success. Willingness to start the same business: If the entrepreneur is willing to start the same business then it is said that he/she is a successful entrepreneur so there is direct relationship between willingness to start a new business and entrepreneurial success (Niels, Mirjam, & Gerrit, june 2000). Job satisfaction: Job dissatisfaction pushes entrepreneur towards the success. Also found that the great the job dissatisfaction more likely to be successful entrepreneur (Brockhaus, 1980). Customer satisfaction: Success is also measured through checking the satisfaction level of customers. If the customers are satisfied then the entrepreneur is successful so, there is strong positive relationship between customers satisfaction and entrepreneurs success (Niels, Mirjam, & Gerrit, june 2000).. Profit motivation: Mario, Arminda, & Joao, (2008) Collectievely believes that in start of business entrepreneurs are much profit oriented. Their main focus is on profit, neglecting other targets and sacrifising abilities of the business while in later stage there is deep change in entrepreneur’s nature and now they focus on other targets such as firm’s growth e.t.c.

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Model: Psychographic Variables Risk Taking Innovativeness Locus of control Need for achievement self confidence Decision making Tolerance for ambiguity Sensing opportunities and mobilizing resources Efficiency in managing resources Ability to balance work and Family Achievement oriented Flexibility Knowledge

Demographic Variables Age Gender Family Background Education Experience

Entrepreneurship Success

Other Variables Profit Motivation Job satisfaction Customer satisfaction Willingness to start the business Generate Employment Openness

This model was tested on 50 usable responses from the sample of 50 entrepreneur (98% of them were male and 2% of them were females). Data were collected via face to face interviews and by structured questionnaire from entrepreneurs in Bahawalpur. The typical entrepreneur in Department of Management Sciences

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the sample was 30-40 years old and having 5-10 years of experience. The following hypothesis was developed from the Model. Hypothesis Hypothesis 1: Risk Taking has strong positive relation with entrepreneurship success. Hypothesis 2: There is positive relationship between innovativeness and business success. Hypothesis 3: There is positive association between internal locus of control and business success. Hypothesis 4: Need for achievement has positive association with success. Hypothesis 5: Self confidence has strong positive relationship with success. Hypothesis 6: Tolerance for ambiguity has direct relationship with business success. Hypothesis 7: Achievement orientation has strong positive relation with entrepreneurship success. Hypothesis 8: Age has strong positive relationship with success of the business. Hypothesis 9: The persons with high education have greater chances of success. Hypothesis 10: Experience has positive relationship with entrepreneurship success. Hypothesis 11: There is positive relationship with between family background and profit of the firm.

Hypothesis 12:

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Males have direct relation with the business success as compare to females. Hypothesis 13: There is strong positive relationship between decision making and success of the business. Hypothesis 14: There is strong positive relationship between knowledge and business success. Hypothesis 15: Flexibility has also directly association with growth of a business. METHODOLOGY: The study is a descriptive correlation survey. The purpose of the study was to investigate the impact of characteristics of an entrepreneur on the success of a business, as we know SMEs contribute in the economic development of Pakistan data was not easily available to check the trend in SMEs financing due to un-documented economy and lack of information. Measurement items for assessing independent and dependent variables were previously tested and used in past studies. Data have been collected from primary as well as secondary sources. Survey approaches were used for research and questionnaire has been used as a research instrument Independent variables including the general personality elements – the big five personality factors – were measured by Saucier’s [50] Mini-Markers Inventory (also used and tested in entrepreneurship by Singh and De Noble [31]), so in the light of previous studies conducted by different researchers (Ajay, Archana, Arup, & Lucky, 2008), (Bostjan, 2009), (Brockhaus, 1980). (Cooper, 1985) etc, and interviews with the entrepreneurs three different types of personal characteristics of an entrepreneur were identified.  Demographic  Psychographic  Others

Population The aim of the study was to identify the characteristics of entrepreneur which leads small and medium enterprises toward success so, All small and medium enterprises of Pakistan are our target population but we have focused on Bahawalpur division. There are 427 small and medium enterprises in Bahawalpur which is our target population.

Sample size:

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As our target population is Bahawalpur so we have selected a sample of 50 small and medium enterprises from a population of 427 Small and medium enterprises on the basis of which the result will be generalized. Sampling Technique: Proportionate stratified technique was used to select a sample size. Firstly the population was divided into small strata’s and then the sample was selected from each stratum on the basis of their proportion. This sampling plan has been the primary source of gathering information Data collection: Data was collected by the structured questionnaire and interviews. The data was collected by the trained interviewers who interview the 50 entrepreneurs. Collected data has been presented in the form of tables and graphs, making it easier to understandable the pattern and the personal determinants that play a key role for the success of SMEs. Data was collected from primary as well as from secondary source. In primary source questionnaire was used as research instrument while secondary source includes Journals, Internet search, periodical and other supporting material from books related to SMEs. Sample consists of only manufacturing sector of SMEs in Bahawalpur which includes (cotton factories, Oil mills, Rice mills, Flour Mills, Food manufacturing industries and marble makers).All the data collected was then analyzed using statistical package for social sciences (SPSS)

Results: Department of Management Sciences

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In this section, the results of the research will be presented. The statistical treatment included the following processes. Correlation analysis was used to check the impact of independent variable upon dependent variable. Analysis was done by using SPSS. We define three dimenensions of dependent variable (Entrepreneur success) • Survival time • Sales • Profit And then check the relationship of each independent variable with all of the above dimensions. Following are the correlation results of the independent variables with dependent variables are as follows.

Age Gender Decision maker Self Confidence Ris_1 edu_1 fami_1 innov_1 EXP_6 TOL_SUC ACH_SUC LOC_SUCC KNO_SUC FLEX_SUC

profit 0.203 -0.077 0.074 -0.023 0.017 .308* -0.035 0.178 .339* -0.022 -0.022 -0.02 0.138 -0.231

survival .576** 0.089 0.244 0.145 0.158 0.093 -.317* -0.012 .454** 0.093 -0.01 0.168 0.006 -0.218

sales 0.24 -0.058 0.032 -0.248 -0.146 .298* -0.138 0.172 0.248 -0.036 -0.072 -0.071 -0.163 -0.239

Age: Hypothesis: Age has positive relationship with success of the business. Age is very controversial factor at which almost all researchers have different opinions like (Rose, 2006) relates age with business success positievely while (Niels, Mirjam, & Gerrit, june 2000) relates age positievely with knowledge rather than the business success.Amazingly (Roy & Isabel) Support both (Niels, Mirjam, & Gerrit, june 2000) and (Rose, 2006) that age has positive relation with knowledge and further he add that knowlegde leads the business toward success. We are also cheking the rekationship of age with the success. Age has direct relatioship with survival time (.576) sales increase(.240) and profit increase(.203). so we our hypothesis is accepted that age has positive relationship with success. Education: Department of Management Sciences

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Hypothesis: The persons with high education have greater chances of success. Education is the factor at which almost all researchers nearly have same view with minor addition like (Niels, Mirjam, & Gerrit, june 2000) believes that to make business successful, entrepreneurs required education as a personal factor. Ajay, Archana, Arup, & Lucky, (2008) relates education with entrepreneurs success significantly. Rose,( 2006) has compared educated entrepreneurs with non educated entrepreneurs and gives opinion that educated entrepreneurs have great chance of success. We have find that education has direct correlation with survival (.093), sales (.298) and profit (.308). So our hypothesis is accepted as our findings show that education has positive relationship with success and greater the entrepreneur has the education greater the chances of their success. Gender: Hypothesis: Males have direct relation with the business success as compare to females. Arnold & Kendall, (1995) are the only who believes that gender has no influence on expactations but on the other hand they believe also that female entrepreneurs have higher level of satisfaction. Gender's influence on expectations and satisfaction have been checked but not with the success so we have taken the relationship of gender with success. No one has checked the relationship of gender directly with the success almost all of the previous researchers has taken as an indirect variable that contribute to success but we have taken gender as the direct variable that contribute to success. Our results shows that male entrepreneur has positive relationship with survival time (.089), but negative relationship with both sales (-.058) and profit (-.077). so our results does not provide educate results to say that our this hypothesis is true but it has acceptability to some extent because male entrepreneur has positive correlation with survival time period and it is a very significant dimension of our dependent variable(success).

Experience: Hypothesis: Experience has positive relationship with entrepreneurship success.

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According to (Brockhaus, 1980) like education, experience also contribute much in business success. Cooper, (1985) regard experience as a motivational factor which leads towards entrepreneurial success. We have cheked the direct impact of experience on success. Our results showes that experince has strong direct relationship with success. Experince correlation with survival time is (.454), sales (.248) and with profit it has the correlation of (.339) that provide enough avidances to support our hypothesis. Family Background: Hypothesis: There is positive relationship with between family background and success of the firm Niels, Mirjam, & Gerrit, (june, 2000) collectievely states that many persons have become entrepreneurs because of their parents who were also self employed, so family background has a positive impact on entrepreneur’s success. Prof Tapan agrees with (Niels, Mirjam, & Gerrit, june 2000) believing that not only children are influenced to become entrepreneur but they gain lot of experiences in childhood which leads to business success. Like others (Raman, 2004) also relates family background with business success positively we are also checking this relation of family background with success in our envoirnment. Our results provide no support to the findigs of other researchers in our envoirnment this hypothesis is not accepted. Locus of control: Hypothesis: There is positive association between internal locus of control and business success. Chen, Greene, & Crick,( 1998) concluded the studies of other researchers and give their words in favor of entrepreneur with greater internal locus of control and regarded him as more successful. Abdolhamid, Kiumars, Malekeh, & Mahya, (2008) are also in favor of (Chen, Greene, & Crick, 1998) they said that internal locus of control has strong positive relation wit the success of a business. In the context of the bahawalpur it is also proved that entreprenure with high internal locus of control has greater chances of success as our results showes that LOC has a positive correlation with survival time (.168), negetive with profit and sales but if the average of the dimension of dependent variablea has been taken then it showes that overall it has positive correlation with success.

Risk: Hypothesis: Risk Taking has strong positive relation with entrepreneurship success.

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Tapan could be seem as the supporter of (Robert, october 2007) theory to some extent because he only states the risk taking as a key factor of success. (Bashir & Mahmood, 2008) also support that risk has direct relationship with success. In the context of our study it has also proved that risk has direct relationship with success as it has positive correlation with survival time (.158) and profit (.017).so our null hypothesis is accepted. Knowledge: Hypothesis: There is strong positive relationship between knowledge and business success. Entrepreneurs should have many competencies of which one of the important competencies is knowledge of the market or market awareness. As one should have proper knowledge of ups and downs of market which can be directly or indirectly harm or boost the business (Marty& Peter). There is no doubt in this fact that education has strong positive relationship with success as our results shows that it has positive correlation with survival time (.006) and with profit (.138) and negative relation with sales (-.163) so we conclude that our hypothesis is accepted. Decision maker: Hypothesis: There is strong positive relationship between decision making and success of the business. Entrepreneur should be a strong decision maker because right decision at the right time lead business toward success (Marty& Peter). Our findings support the previous findings of Marty and Peter as evident by our results (profit .074, sales .032, survival .244) so we accept the null hypothesis. Flexibility: Hypothesis: Flexibility has also directly association with growth of a business. Martyn & Peter find that flexible entrepreneur has greater chances of success. But our findings contradict the results of Martyn & Peter because in the context of our study the relationship of flexibility with success is negative. So our hypothesis is rejected. Flexibility has negative correlation with survival time (-.218), sales (-.239) and with profit (-.231). Need For Achievement: Hypothesis: Need for achievement has positive association with success.

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(Abdolhamid, Kiumars, Malekeh, & Mahya, 2008) believes that it has large influence on business success and they relates need for achievement with entrepreneurship success positively. McClelland theory suports the idea given by (Hansemark, 1998).and (Littiunen, 2000) about need for achievement in which it is suggested most significant relationship with entrepreneurship. Innovativeness: Hypothesis: There is positive relationship between innovativeness and business Michael & Pamela, (1995) relates innovation with entrepreneur’s attitude and behavior, and also insist that success can also be measured by innovative abilities of entrepreneur.As both (Entirialgo, Fernandez, & Vazquez, 2000) and (Mill, 1984) suggests that risk taking as a differential point between entrepreneur and employee or manager, same here write (Stewart, Carland, Carland, Watson, & Sweo, 2003) insists that innovative personality is also a trait which differentiate entrepreneur from employee and manager. We have taken innovation as the directly affecting personal determinant of success and our findings also suppport the findigs of other researchers. We accept this hypothesis becaouse innvation has direct relationship with success as avident by the survival time (-.012), sales (.172) and profit (.178). Self Confidence: Hypothesis: Self confidence has strong positive relationship with success. Cromie, (2000) believes that self confidence is not a determinant of entrepreneurship but when one has become a successful entrepreneur than he feel self confident about himself but on the other hand (Koh, 1996) and (Robinson, Stimpson, Hunefner, & Hunt, 1991) argue about self esteem which they believe is very high in entrepreneurs than others. Here all support the theory of (Cromie, 2000) to some extent that persons become selfconfident after becoming entrepreneurs.we are testing that either the self confident is the determinant of success? And our findings show that self confidence has indirect relationship with success as evident by the results (survival time .145, sales -.248 and profit -.023).so the null hypothesis is rejected.

Tolerance of Ambiguity:Hypothesis: Tolerance for ambiguity has direct relationship with business success. Littiunen,(2000) finds that the entreprenure with high tolerance of ambiguity has greater chances of success and that is also supported by (Stewart, Carland, Carland, Watson, & Sweo, Department of Management Sciences

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Personal determinants of an Entrepreneur

2003). Our study also support these researches that high tolerance for ambuguity has a direct relationship with success. Achievement Orientation: Hypothesis: Achievement orientation has strong positive relation with entrepreneurship success According to (Bashir & Mahmood, 2008) if the person reinvest the largest part of profit in the business for future growth than he is considered to be a successful entrepreneur. Our finding does not provide support to the findings of Bashir & Mehmood 2008 because in the context of Bahawalpur achievement orientation has a negative relationship with success so we reject this hypothesis.

Limitations: Different type of problems was faced by the researcher during collection of a data and choosing a sample size. The Research was conducted in Bahawalpur the city of Pakistan and following were the problems faced by the Researchers. •

• • •

The first and major limitation of the study was time constraint. As the Research was conducted by the researchers who were the students of management sciences of Islamia University Bahawalpur and student have limited time to conduct a thorough and suspicious research. So its a chance that some of the factors may be ignored or not discussed in detail. The data was collected through stratified and convenient sampling, because of easily availability of data and less expensive research it’s a chance that results may cause sampling errors which affect the generalizability of research. As the Research was conducted in Bahawalpur, so the responses generated by the Entrepreneurs seems not realistic because of they do not have any information about some variable of interest. The sample size selected was small so it may also affect the generalizability of a research

Conclusions: This study was done for exploring the personal determinants of an individual for becoming self-employed. To find the personal determinants was a difficult task to some extent, as almost every person has had different background and possesses different nature as well as norms and rituals. But we did not mean that there were never common factors leading towards entrepreneurial success. In our study we have got some factors which can be related positively with entrepreneurial success. Different studies and questionnaire we developed could be seen in favor of variables which we have found. Department of Management Sciences

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Personal determinants of an Entrepreneur

The variables include (Age, education, Locus of control, Risk, Knowledge, Decision making, Innovativeness, and tolerance for ambiguity). All the variables had shown direct relationship with entrepreneur success, as these variables increase in numeric terms the more chance of success is there.

Bibliography Abdolhamid, p., Kiumars, Z., Malekeh, T., & Mahya, P. (2008). Detrmining factors influencing rural entreprenure success: a case study of mahidashp township is in kermansha province of iraq. africaan journal of agricultural research , 3 no 9, 597-600. Ajay, T., Archana, T., Arup, G., & Lucky, P. J. (2008). Determinants of street Entrepreneurial success. journal of Nepalese business studies , 5 no 1. Arnold, C. C., & Kendall, W. A. (1995). Determinants of satisfaction for Entrepreneure. journal of business venturing , 10, 439-457. Department of Management Sciences

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AU, I. (2007). Pharmacists as Entrepreneurs or Employees: The. Journal of Pharmaceutical Research, , 6 No 3, 747-754. Bashir, A. B., & Mahmood, O. I. (2008). Entrepreneures'economic sucess index and its influencing factors: am emperical analysis. international review of business research paper , 4 No 2, 26-50. Bostjan, A. (2009). The entreprenurs genral personalities traits and technological development. world acadmy of science . Brockhaus, R. (1980). Psyclogical and environmental factors which distinguish the successful from the unsuccessful entrepreneurs. 368-372. C. Mirjam Van Praag, a. H. (1995). determinant of willingness ands opportunity to start as an entrepreneure. 48, 513-540. Chen, C., Greene, P., & Crick, A. (1998). Does Entrepreneurial self efficasy distinguish entrepreneurs from managers? . Journal of business venturing , 13 , 295-316. Cooper, A. C. (1985). The role of Incubator organization in funding of growt oriented Firms. journal of business venturing , 1 No 1. Cromie, S. (2000). Assesing entrepreneurial inclinations: some approach emperical evidence. European journal of work and orginzationa psychology , 9 No 1, 7-30. Davidsson, P. (1989). continued entrepreneurship and small firm business. Entirialgo, M., Fernandez, E., & Vazquez, C. (2000). Charecteristics of manager as determinants of Entrepreneurial orientation. Enterprise and innovation management studies , 1 No 2, 187-205. Gibbs, A. (1993). The Entrepreneurs culture and education:understanding entrepreneurs education and its links with small business,Entrepreneurship and wider eduaction goal. International small business journal , 3 No 11, 11-34. Guzman, J. (1994). Towards a taxonomy of entrepreneurial theory. International small business journal , 12 No 4, 77-88. Hansemark, O. C. (1998). The effects of an entrepreneurship programme on need for achievement and locus of control of reinforcement. International journal of entrepreneurial behavior and research , 4 No 1, 28-50. Helen, R., & Raija, K. (2007). Perception of success and its affect on small firm performance. journal of small business and small enterprises , 14 No 4, 689-701. Ingrid, V., Andre, v. S., & Roy, T. (may 2004). explainig female and male entrepreneurship across 29 countries. scientific analysis of entreprenurship and SME's . Department of Management Sciences

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Koh, H. C. (1996). Testing hypothesis of entrepreneurial charecteristics. Journal of managarial psycology , 11 No 3, 12-25. Littiunen, H. (2000). Entreprenureship and the characteristics of the entreprenurial personality. International journal of entreprenurial behavior and research , 6 No 6, 295-309. Loscocco, K. A., & J, R. (1991). Barriers to women’s small business success in the United States,Gender and Society. 5 No 4, 511-532. MAG, D., & TA, C. (2005). The effect of Entrepreneurial Quality on the success of small, Medium and micro Agri-business. 44 No 3. Mario, R., Arminda, D. P., & Joao, F. (2008). Entrepreneurs profile:a taxonomy of attrbutes and motivation of university students. small business and enterprise development , 15 No 2, 405418. Martyn, P. D., & Peter, S. Z. (n.d.). the role of entreprenure in small bussines success. McClelland, D. (n.d.). The achiving socity . Michael, H. M., & Pamela, S. L. (1995). The determinants of entrepreneural activity. European journal of marketing , 29 No 7, 31-48. Mill, J. S. (1984). Principles of political economy with some application to. Niels, B., Mirjam, V. P., & Gerrit, D. W. (june 2000). Determinants of successful entrepreneurship scales. Prof Tapan, K. P. (n.d.). Entrepreneurial success. Raman, R. (2004). Motivating factors of educatedself empolyed in Kerala: a case study of Mulanthuruthy Block Ernakulum. Reynold, P. D., Bygrave, W. D., Autio, E., Cox, L. W., & M, H. (2002). Global Entrepreneurship Monitor,2002 Executive Report,. Richard, L. O. (1995). The essence of entrepreneurial success. management desicion , 33 no 7, 4-9. Riipinen, M. (1994). Extrinsic occupational needs and the relationship between need for achievement and locus of control. Journal of psycology , 128 No 5, 577-588. Robert, W. M. (october 2007). John Willey and sons inc. Robinson, P. B., Stimpson, D. V., Hunefner, J. C., & Hunt, H. K. (1991). An attitude approach to the prediction of entrepreneur. entrepreneurship theory and practice , 15 No 4, 13-32.

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Rose, R. K. (2006). The Dynamic of entrepreneurs' success factors in infleuncing venture growt. the joournal of Asia Entrepreneurship and Sustainability . Roy, T., & Isabel, G. (n.d.). Determinants of entrepreneurial engagement levels. Sajday, S. H. (2006). Sajie, A., & Elizur, D. (1999). Achievement motives and entrepreneurial orientation:A structiural analysis. Journal of organizational behavior , 20 No 3, 357-387. scott, s., & s, v. (2000). the promise of entrepreneurship as a field of research. academy of management review , 25 No1, 217-226. Stewart, W. h., Carland, J. C., Carland, J. W., Watson, W. E., & Sweo, R. (2003). Entrepreneurial disposition and goals orientation: a comparitive exploration of united states and Russian entrepreneur. journal of small business management , 41 No 1, 27-46. Teoh, H., & and Foo, S. (1997). moderating effects of tolerence for ambiguity and risk taking propensity on the role conflict-percieved performance relationship. journal of business venturing , 12, 67-81. Thomas, A. S., & Muller, S. L. (2000). A case for comparitive entrepeneurship: assesing the relivance of culture. journal of international business studies , 31 No 2, 287-301. Verheul, I., & A, R. T. (2001). Start-up capital: does gender matter? Small Business Economics. 16, 329-345. Yonca, G., & Nuray, A. (2006). Entrepreneurial charecteristics among unoiversity students: some insights for Entrepreneurship education and training in Turkey. 48 No 1 (10-11-08). Zacharakis, A. (1997). Entrepreneurial entry Entrepreneurship: Theory and practice , 23-40.

in

to

foreign

markets.

Questionnaire for Entrepreneurs Introduction: We are the students of department of management sciences of Islamia University Bahawalpur. We are going to conduct a research to identify what are the personal characteristics of entrepreneurs which leads business toward success. The questionnaire is also the part of research. We need your cooperation in answering the following questions. All collected information will be treated with strict confidentially and will be used for study purpose only.  Age a) Below 25

b) 25-35

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c) 35-45

d) 45 and above Page 28

Personal determinants of an Entrepreneur

 Gender o

Male

o

Female

 Marital Status o

Single

o

Married

 Education a. Illiterate b. Under metric c. Metric d. Intermediates e. Masters f.

Others

 How you came to own the business? a. Started the business b. Purchased the business c. Inherited the business d. Other (please specify)  Which of the following intentions are held for this business over the next three years. a. Significantly increase in production level b. Maintain existing production level. c. Introduce goods and services d. Others  How many total year of personal business experience do you have? a. Below 5 years b. 6-10 years Department of Management Sciences

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c. 11-15 years d. Above 15 years  How long you have worked as an employee? a. None b. Below 5 years c. 6-10 years d. 11-15 e. Above 15  How many total year you have spent in this industry? a. Below 5 years b. b. 6-10 years c. 11-15 years d. Above 15 years  What type of business do you have? a. Sole proprietorship b. Partnership c. Corporate business Please express your degree of agreement with following statement (1= strongly disagree, 2= Disagree, 3= indifferent, 4= agree, 5= strongly agree) Strongly disagree 1 2 3

It is more fun to tackle a complicated problem than to solve a simple one. I like tasks where the end results are unpredictable. I use aggressive approach to undertake a task.

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Disagree Indifferent Agree

Strongly agree

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

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4

I like to give myself challenge when I take new projects.

5

I am less concerned with achievement than with my personal fulfillments I try to be the first or best in my area of competency

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

11 The result I get are the result of my own efforts, luck has little or nothing to do with it.

1

2

3

4

5

12 It takes much time to adopt the changes in environment.

1

2

3

4

5

6 7

A complex situation/task can only be solved if I consult someone for the solution. 8 By taking an active part in political and social affairs the people can control world’s events. 9 Many times I feel that I have little influence over the things that happen to me. 10 My future success depends mainly on circumstances I can’t control.

By circling the number that correspond to the level of importance you give to each item on the scale below, show the extent to which you consider each item listed to the important to your enterprise.

Not Important

Slightly important

Moderate important

Very important

Extremely important

Achievement

1

2

3

4

5

Development of new products and services

1

2

3

4

5

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Risk

1

2

3

4

5

Achievement of realistic goals

1

2

3

4

5

Self confidence

1

2

3

4

5

Knowledge about market

1

2

3

4

5

Experience

1

2

3

4

5

Profit motivation

1

2

3

4

5

High level of education

1

2

3

4

5

 Please mention the % change in your sales during the last three years. 2007______, 2008______, 2009______  Please mention the % change in your profits during the last three years. 2007______, 2008______, 2009______  How long have you been in this business? a. 2 years b. 3 years c. 5 years d. more than 5 years

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