The relationship among Locus of Control, Independence, Risk taking & Entrepreneurship in Bangladesh

7/31/2019 The relationship among Locus of Control, Independence, Risk taking & Entrepreneurship in Bangladesh

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The relationship among Locus of Control, Independence, Risk taking & Entrepreneurship in Bangladesh

Contents

Introduction

Study Objectives

Research Methodology

Variables

Data Analysis and Findings

Recommendation

Conclusion

Reference

Appendix

IntroductionEntrepreneurship is the act of being an entrepreneur or "one who undertakes innovations, finance and business acumen in an effort to transform innovations intoeconomic goods". This may result in new organizations or may be part of revitalizing mature organizations in response to a perceived opportunity. The most obvious form of entrepreneurship is that of starting new businesses (referred as Startup Company); however, in recent years, the term has been extended to include social and political forms of entrepreneurial activity. When entrepreneurship is describing activities within a firm or large organization it is referred to as intra-preneurship and may include corporate venturing, when large entities spin-off organizations.The word entrepreneur originates from the French word, entreprendre, which means

"to undertake." In a business context, it means to start a business. The Merriam-Webster Dictionary presents the definition of an entrepreneur as one who organizes, manages, and assumes the risks of a business or enterprise.

Entrepreneurship is the capacity and willingness to undertake conception, organization, and management of a productive venture with all attendant risks, while seeking profit as a reward.

Study ObjectivesThe people of Bangladesh want to be an entrepreneur for personal ambition, creativity, a desire for independence-to be ones own boss, self-realization and an ambition to improve the quality of working conditions, to raise economic returns, and to develop a flexibility that caters for the combination of family responsibilities with gainful employment & to cope with the modern competitive world

The main purpose of the study is to analyze the relationship among Locus of Control, Independence, Risk taking, Entrepreneurship in Bangladesh.The study endeavored to identify the reasons why the entrepreneurs become motivated and are compelled to establish business enterprises. Money making for family, self-employment, gaining higher social status, use of personal knowledge and previous experience, family business tradition, and less complexity but more profitability nature of business as the pull factors while lack of higher formal education, curse of unemployment, dissatisfaction with previous occupation, and family hardship or pressure as the push factors.The objectives are to lead the development, progress and success of Entrepreneur


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s in the era of globalization of commerce, trade and industry.To motivate and guide people involved in entrepreneurial, commercial and industrial activities in order to upgrade the quality and quantity, standard and levelof their involvement in line with the vision of the country.To arrange cooperation with government for the achievement and implementation ofits policies; in relation to the development of women in the entrepreneurial, commercial, trade and industrial world.

Research Methodology

Data CollectionIn this research data were collected from primary and secondary sources. Primarysource data were collected from individuals through face to face (direct) interviews at Innovative IT Firm & Shariatpur Electric enterprise, using a structuredquestionnaire.

The respondents for the questionnaire were selected from the directly owned enterprises. Secondary sources and information (including from published books, journals, newspapers, articles, internet and concerned organizations) have been usedto develop this study further.

Data Analysis SystemThis exploratory research tries to explore the existing condition of the variables and relationship among them in a real world application of Bangladesh. Bothqualitative and quantitative research approaches and procedures have been applied to explore relevant information for this study

VariablesLocus of Cont Locus of control is a theory in personality psychology referring to the extent to which individuals believe that they can control events that affect them. Understanding of the concept was developed by Julian B. Rotter in 1954,and has since become an aspect of personality studies. Entrepreneurship research has identified a number of personal characteristics believed to be instrumenta

l in motivating entrepreneurial behavior. Two frequently cited personal traits associated with entrepreneurial potential are internal locus of control and innovativeness. Internal locus of control has been one of the most studied psychological traits in entrepreneurship research, while innovative activity is explicit in Schumpeter s description of the entrepreneur.

External Locus of ControlIndividual believes that his/her behavior is guided by fate, luck, or other external circumstancesInternal Locus of ControlIndividual believes that his/her behavior is guided by his/her personal decisions and efforts.Those with a high internal locus of control have better control of their behavio

r, tend to exhibit more political behaviors, and are more likely to attempt to influence other people than those with a high external (or low internal respectively) locus of control. Those with a high internal locus of control are more likely to assume that their efforts will be successful. They are more active in seeking information and knowledge concerning their situation.Locus of control has generated much research in a variety of areas in psychology. The construct is applicable to fields such as educational psychology, health psychology or clinical psychology. There will probably continue to be debate about whether specific or more global measures of locus of control will prove to bemore useful. Careful distinctions should also be made between locus of control (


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a concept linked with expectancies about the future) and attribution style (a concept linked with explanations for past outcomes), or between locus of control and concepts such as self-efficacy. The importance of locus of control as a topicin psychology is likely to remain quite central for many yearsLocus of control has also been included as one of four dimensions of core self-evaluations one s fundamental appraisal of oneself along with neuroticism, self-efficacy, and self-esteem. The concept of core self-evaluations was first examined by Judge, Locke, and Durham (1997), and since has proven to have the ability to predict several work outcomes, specifically, job satisfaction and job performance.

Independence

The state or quality of being independent is freedom from dependence; exemptionfrom reliance on, or control by, others; self-subsistence or maintenance; direction of one s own affairs without interference.For all entrepreneurs, starting a business is the route to life, liberty, and thepursuit of happiness, no matter how risky. Its the American dream that has been the goal of people in this country for over 230 years. If you are here in the U.S

., I hope you are all able to take some time off this holiday weekend, to contemplate what you do, and why you do it.According to an article and poll by Startups.co.uk, having the independence to make your own decisions is considered the key benefit of being an entrepreneur. Nearly 90% of respondents said decision-making independence was very important, closely followed by more flexibility for a better work/life balance. Job creationand innovation are the results, not the drivers.Personal satisfaction also ranked close behind, with 70% of respondents claimingit was a key advantage to running their own business. Contrary to popular belief, most business owners did not start a business just to earn more money. Only 32% of entrepreneurs cited money a key benefit of running their own firm. This indicates that lifestyle and satisfaction factors are often more important than financial ones.

As with everything in life, there are advantages and disadvantages to every choice we make. Choosing entrepreneurship is no exception.

Risk taking

Risk taking is indispensable in several fields such as creativity, entrepreneurship, etc. In spite of the fact that the consequences of risk taking can sometimes be catastrophic, humankind must continue to take calculated risks if it is toprogress.Niklas Luhmann (1996) seeks to explain this transition:

Risk-taking refers to the tendency to engage in behaviors that have the potential to be harmful or dangerous, yet at the same time provide the opportunity forsome kind of outcome that can be perceived as positive.The article begins with an introduction of the construct and then briefly discusses the role of risk taking in entrepreneurship and in decision making which isthe key to corporate success.It further provides a review of research on certain aspects of the construct such as the basic debate about whether risk taking is solely situation based or isa stable trait.


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Risk taking whether financial, social of psychological is part of the entrepreneurial process.

Finally, it gives some insight into internal factors such as intrinsic motivation and demographics as well as external factors including culture and group dynamics.EntrepreneurshipThe word entrepreneurship has been derived from a French root which means to undertake". It is also called by various names, e.g. adventurism, risk taking; thrill seeking, innovating, etc.

According to Higgins, " Entrepreneurship is meant the function of seeking investment and production opportunity, organizing an enterprise to undertake a new production process, raising capital, hiring labor, arranging the supply of raw materials, finding site, introducing a new technique and commodities, discovering new sources of raw materials and selecting top managers of day-to-day operations of the enterprise.

Jaffrey A. Timmons has defined entrepreneurship as "the ability to create and build something from practically nothing. Fundamentally, a human creative activity, it is finding personal energy by initiating, building and achieving an enterprise or organization rather than by watching, analyzing or describing one. It requires the ability to take calculated risk and to reduce the chance of failure.."

According to A.H.Cole "entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain or aggrandize profit by production or distribution of economic goods and services."

According to Harbison, Organization Building skill means the ability to multiplyoneself" by effectively delegating responsibility to others.Entrepreneurship is the act of being an entrepreneur or "one who undertakes innovations, finance and business acumen in an effort to transform innovations intoeconomic goods". This may result in new organizations or may be part of revitalizing mature organizations in response to a perceived opportunity. The most obvio

us form of entrepreneurship is that of starting new businesses (referred as Startup Company); however, in recent years, the term has been extended to include social and political forms of entrepreneurial activity. When entrepreneurship is describing activities within a firm or large organization it is referred to as intra-preneurship and may include corporate venturing, when large entities spin-off organizations.[1]

According to Paul Reynolds, entrepreneurship scholar and creator of the Global Entrepreneurship Monitor, "by the time they reach their retirement years, half ofall working men in the United States probably have a period of self-employmentof one or more years; one in four may have engaged in self-employment for six ormore years. Participating in a new business creation is a common activity amongU.S. workers over the course of their careers." [2] And in recent years has bee

n documented by scholars such as David Audretsch to be a major driver of economic growth in both the United States and Western Europe. "As well, entrepreneurship may be defined as the pursuit of opportunity without regard to resources currently controlled (Stevenson, 1983)".

Entrepreneurial activities are substantially different depending on the type oforganization and creativity involved. Entrepreneurship ranges in scale from soloprojects (even involving the entrepreneur only part-time) to major undertakingscreating many job opportunities. Many "high value" entrepreneurial ventures seek venture capital or angel funding (seed money) in order to raise capital to bui


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ld the business. Angel investors generally seek annualized returns of 20-30% andmore, as well as extensive involvement in the business.[4] Many kinds of organizations now exist to support would-be entrepreneurs including specialized government agencies, business incubators, science parks, and some NGOs. In more recenttimes, the term entrepreneurship has been extended to include elements not related necessarily to business formation activity such as conceptualizations of entrepreneurship as a specific mindset (see also entrepreneurial mindset) resultingin entrepreneurial initiatives e.g. in the form of social entrepreneurship, political entrepreneurship,

Locus of Control Independence Risk TakingInternal External Strong need Weak need Strong willingness Weak willingness40% 6o% 60% 40% 50% 50%Data Analysis and Findings

Internal Locus of Control

Answering yes to questions 1, 4, 8 and 1, 5, 6, 7, 10 indicates internal locus of control at the Innovative It Firm and the Shariatpur Electric Enterprise. Average internal locus of control =

3+52

=4o%

W e find that 40% of internal locus of control motivates to become an entrepreneur in the challenging business world.

External Locus of Control

Answering yes to questions 2, 3, 5, 6, 7, 9, 10 and 2, 3, 4, 8, 9 indicates external locus of control at the Innovative It Firm and the Shariatpur Electric Enterprise. Average external locus of control =

7+ 52

= 60%

W e find that 60% of external locus of control motivates to become an entreprene

ur in the challenging business world.

Answering yes to questions 2, 3, 4, 5, 6, 8, 9, and 2, 5, 6, 7, 8 indicates having strong need for independence at the Innovative It Firm and the Shariatpur Electric Enterprise. Average strong need for independence =

7+52

=60%


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W e have found that 60% of strong need for independence motivates to become an entrepreneur in the challenging business world.Answering yes to questions 1, 7, 10 and 1, 3, 4, 9, 10 indicates having weak need for independence at the Innovative It Firm and the Shariatpur Electric Enterprise. Average weak need for independence =

3+52

=40%We have found that 40% of weak need for independence motivates to become an entrepreneur in the challenging business world.

Answering yes to questions 1, 3, 6, 8, 9 and 1, 2, 6, 9, 10 indicates having strong willingness to take risks at the Innovative It Firm and the Shariatpur Electric Enterprise. Average strong willingness to take risk =

5+52

=50%

We have found that 50% of strong willingness to take risks motivates to become a

n entrepreneur in the challenging business world.

Answering yes to questions 2, 4, 5, 7, 10 and 3, 4, 5, 7, 8 indicates having weak willingness to take risks at the Innovative It Firm and the Shariatpur Electric Enterprise. Average weak willingness to take risk =5+5

2=50%

We have found that 50% of weak willingness to take risks motivates to become anentrepreneur in the challenging business world.

FindingsThe findings indicated that to the extent that the political stability and ruleof laws should be enforced, infrastructure facilities should be improved, and corruptions should be rooted out, education and training are imparted, and financial help are provided, new and energetic entrepreneurs

Recommendation

Establish an information center at the district level to facilitate has businesideas and information on markets, design, buyers, sources of finance and training.

The central bank should determine a target for each bank to provide loans for nw entrepreneur and form a monitoring team to monitor the implementation.

A number of institutions, including NGOs, should increase the amount of credit o that new entrepreneurs can develop themselves as entrepreneurs especially to business starters.

Banks can organize training on entrepreneurship development, which will enable hem to find more believable clients.


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The entrepreneurs of Innovative IT Firm & Shariatpur Electric enterprise shoulollow the strong need for independence and should increase strong willingness totake risk.

ConclusionThis study implies that a positive environment through encouragement and positive reinforcement of a stable socio-political climate for a sound market economy and specialized schools of entrepreneurs will foster a positive climate for the development of entrepreneurship in Bangladesh. The Government should take varioussteps for creating new entrepreneur for economic development of Bangladesh.Referencehttp://westaction.org/definitions/def_entrepreneurshiphttp://www.sciencedirect.com/science/article/pii/B9780123750389001898http: http://www.rieti.go.jp/en/papers/research-html//www.sciencedirect.com/science/article/pii/S0883902699000397http://www.jstor.org/action/showPublisher?publisherCode=apsa.

hthttp://en.wikipedia.org/wiki/Entrepreneurshiphttp://www.businessdictionary.com/definition/entrepreneurship.htmlhttp:/ http://www.alleydog.com/glossary/definition.php?term=Internal%20Locus%20of%20Control/www.quickmba.com/entre/definition/

Appendix:All appendixes has been shown the appendix file.

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The relationship among Locus of Control, Independence, Risk taking & Entrepreneurship in Bangladesh