Entrepreneurship as the nexus of opportunity and the enterprising individual

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CHAPTER 2 : THEORIES ON ENTREPRENEURIAL INTENT

INTRODUCTION

The previous chapter explained the scope of the study, the problem statement,objectives and hypotheses for the research. In this chapter, factors that influence entrepreneurial intent are discussed. The discussion begins with the definition of entrepreneurial intent followed by the different entrepreneurial intent models that form the foundation of entrepreneurial intent theory. The factors impacting on intent models are also highlighted. The chapter concludes with the factors that influence the decision to become an entrepreneur and the theories on entrepreneurial motivation are discussed linking them to the development of entrepreneurial intent.

DEFINING THE CONCEPT OF ENTREPRENEURIAL INTENT

The definition that is adopted in this study is that entrepreneurial intention refers to a person’s intention to start a new business at some point in the future. Table 2.1 provides definitions that have been given by other researchers in the field of entrepreneurship.

MODELS OF ENTREPRENEURIAL INTENT

Entrepreneurial intent is considered as the key element to understand a new venture creation process (Bird, 1988 in Liñán et al., 2007:2). This concept has been studied using various intention models. Entrepreneurial intention models can be applied to strategic decisions such as the decision to start, grow or exit a business (Krueger et al., 2000:412). These models provide a better understanding of the various antecedents of venture initiation and growth as well as the factors that influence these acts (Krueger et al., 2000:424). Entrepreneurial intention models can be used to test the impact of teaching entrepreneurial and managerial competencies on perceptions of venture feasibility (Krueger et al., 2000:427). They can also provide a sound grasp of the critical antecedents of opportunity perception (Krueger, 2000:17). Additionally, they can help in providing policymakers with a better understanding of how government initiatives can help to advance entrepreneurship by influencing attitudes or intentions (Krueger et al., 2000:429). Table 2.2 provides an overview of historical developments in the study of entrepreneurial intentions.
In this section, different entrepreneurial intent models are presented. Of these models, the two dominant and popular theory-driven entrepreneurial intention models used by researchers to study new venture creation and growth are Shapero and Sokol’s 1982 Model of Entrepreneurial Event and Ajzen’s 1991 Theory of Planned Behaviour (Brännback et al., 2007:3). These models are discussed in the next sections.

Shapero and Sokol’s model of entrepreneurial event (SEE)

Shapero and Sokol’s model of entrepreneurial event developed in 1982 was the first model of entrepreneurial intent (Guerrero et al., 2008:37)., According to Krueger et al. (2000:418) and Audet (2004:2), the SEE model is an intention model specific to the domain of entrepreneurship. According to the model, the intention to start a business derives from perceptions of desirability, feasibility and propensity to act upon opportunities (Shapero and Sokol, 1982 in Guerrero et al., 2008:37). The desirability of an action is influenced by the perception of feasibility. Perceptions of desirability and feasibility are determined by cultural and social environments (Shapero and Sokol,1982 in Fayolle, 2007:166). Close family, colleagues, relatives and ethnic groups are expected to influence perceived desirability whereas the availability of financial support and would-be partners influence perceived feasibility and propensity to act (Shapero and Sokol, 1982 in Fayolle, 2007:167). In order for new ventures to emerge, they should be perceived as credible or desirable and feasible. Figure 2.1 illustrates the SEE model.The SEE model proposes that the entrepreneurial event emerges from the interactions between situational, cultural and social variables. Shapero and Sokol (1982 in Perceived desirability Perceived feasibility Propensity to act Entrepreneurial intentions Entrepreneurial event Displacement event Krueger, Schulte and Stamp, 2008:1) view the entrepreneurial process as an event that is initiated by some sort of displacement event. The appearance (or acquisition) of a perceived facilitator or the removal (or avoidance) of a perceived inhibiting factor are some of the displacement events that could lead to the initiation of an entrepreneurial action. Krueger et al. (2008:2) posit that displacement events could be regarded as triggers to action or barriers to action. Displacement events could be internal or external and are indicated in Table 2.3.

The theory of planned behaviour

Fayolle (2004:8) reports that the theory of planned behaviour (TPB) owes its origin to the theory of reasoned action developed by Ajzen and Fishbein in 1980. The TPB was developed initially by Ajzen in 1991 and was reformulated in 2002. Ajzen (2002:665) and Ajzen and Cote (2008:301) regard the TPB as the most influential and popular framework for the prediction of human behaviour. Intentions are reported as good predictors of behaviour when the behaviour is under volitional control (Ajzen and Fishbein, 2005:196). The TPB suggests that the most important immediate determinant of action is a person’s intention to perform or not to perform that action (Ajzen, 2005:117; Ajzen, 2006:1). Figure 2.2 reflects the determinants of intentions in the TPB.

CHAPTER 1: INTRODUCTION AND BACKGROUND TO THE STUDY
1.1 Introduction
1.2 The context of the study
1.3 The scope of the study
1.3.1 The relationship between entrepreneurial intent and behaviour-Theory of planned behaviour
1.3.2 The role of social capital in entrepreneurship
1.3.3 The role of entrepreneurial support
1.3.4 The relationship between entrepreneurship education and entrepreneurial intent
1.4 Problem statement
1.5 Objectives of the research
1.5.1 The primary objective
1.5.2 The secondary objectives
1.5.3 Research hypotheses
1.6 Demarcation of the research study
1.7 Significance of research
1.8 Research methodology
1.8.1 Research design
1.8.2 Population and sampling procedures
1.8.3 Data collection
1.8.3.1 Designing the research instrument
1.8.3.2 Administration of the questionnaires
1.8.4 Data analysis
1.9 Organisation of the study
CHAPTER 2: THEORIES ON ENTREPRENEURIAL INTENT
2.1 Introduction
2.2 Defining the concept of entrepreneurial intent
2.3 Models of entrepreneurial intent
2.3.1 Shapero and Sokol’s model of entrepreneurial event (SEE)
2.3.2 The theory of planned behaviour (TPB)
2.3.2.1 Determinants of intention
2.3.2.2 Beliefs, attitudes, intention and behaviour linkage
2.3.2.3 Views and research in support of Ajzen’s model
2.3.2.4 The theory of planned behaviour applied to entrepreneurship
2.3.3 The model of entrepreneurial potential
2.3.4 Shapero-Krueger model of entrepreneurial intention
2.3.5 Empirical studies testing and applying the SEE and TPB
2.3.5.1 Perceived feasibility and perceived desirability as determinants of entrepreneurial intent
2.3.5.2 A model integrating the SEE model and the TPB
2.3.6 Summary
2.4 Factors impacting on entrepreneurial intent models
2.4.1 The relationship between personal and contextual factors and entrepreneurial intent
2.4.2 The relationship between self-efficacy and entrepreneurial intent
2.4.3 The relationship between gender and entrepreneurial intent
2.4.4 Role models and their effect on entrepreneurial intent
2.4.5 The influence of culture on entrepreneurial intent
2.4.6 Other factors on entrepreneurial intent and behaviour
2.4.7 The influence of opportunity recognition on entrepreneurial intent and behaviour
2.4.8 The role of improvisation in predicting entrepreneurial intent
2.4.9 Summary
2.5 Entrepreneurial motivation and the decision to behave entrepreneurially
2.5.1 Theories of entrepreneurial motivation
2.5.1.1 Model of the move to entrepreneurship
2.5.1.2 Model of entrepreneurial motivation
2.5.1.3 The utility-maximizing theory and the entrepreneurial decision
2.5.1.4 The interplay between motivation, skills, resources and the decision to start a business
2.5.1.5 Temporal motivation theory
2.5.1.6 The expectancy theory of motivation and the decision to become an entrepreneur
2.5.1.7 The role of outcome and ability expectancies in predicting the start-up decision
2.5.2 Forces that drive people to entrepreneurship–pull and push factors
2.5.3 Research findings on factors that motivate individuals to pursue entrepreneurship
2.5.3.1 Entrepreneurial motivation in Singapore
2.5.3.2 Factors that motivate entrepreneurs and non entrepreneurs in the United States
2.5.3.3 A multi-country study of entrepreneurial motivation
2.5.3.4 Entrepreneurial motivation in China
2.5.4 Disincentives to the implementation of entrepreneurial intent
2.6 Entrepreneurial motivation of South African entrepreneurs and the total entrepreneurial activity
2.7 Summary of entrepreneurial motivation
2.8 Conclusion
CHAPTER 3: ENTREPRENEURSHIP EDUCATION
3.1 Introduction
3.2 Research trends in entrepreneurship
3.2.1 Can entrepreneurship be taught?
3.2.2 The role of higher education institutions in improving entrepreneurial activity
3.2.3 Research on the effect of entrepreneurship education on entrepreneurial activity
3.3 Defining entrepreneurship education
3.4 The distinction between traditional business education, entrepreneurship education and small business management courses
3.5 Teaching entrepreneurship
3.5.1 Challenges in teaching entrepreneurship education
3.5.2 Objectives of entrepreneurship education
3.5.3 Types of entrepreneurship education
3.5.4 Key issues in the domain of entrepreneurship education
3.5.5 Learning approaches in entrepreneurship education
3.5.5.1 The traditional approach to entrepreneurship education
3.6.5.2 The constructivist approach to entrepreneurship education
3.5.6 Teaching methods in entrepreneurship education
3.5.7 Summary of teaching entrepreneurship
3.6 The contribution of entrepreneurship education to entrepreneurial intent,skills, competencies and self-efficacy
3.6.1 The impact of entrepreneurship education on entrepreneurial intent and start-up of new businesses
3.6.1.1 The relationship between entrepreneurship education and entrepreneurial intent in Australia
3.6.1.2 The relationship between entrepreneurship education and entrepreneurial intent in Ghana
3.6.1.3 The relationship between entrepreneurship education and entrepreneurial intent in Malaysia
3.6.1.4 The relationship between entrepreneurship education and entrepreneurial intent in Mexico
3.6.1.5 The relationship between entrepreneurship education and entrepreneurial intent in Europe
3.6.1.6 The relationship between entrepreneurship education and entrepreneurial intent in South Africa
3.6.1.7 The relationship between entrepreneurship education and entrepreneurial intent in Singapore
3.6.1.8 The relationship between entrepreneurship education and entrepreneurial intent in Sweden
3.6.1.9 The relationship between entrepreneurship education and entrepreneurial intent in China
3.6.1.10 The relationship between entrepreneurship education and entrepreneurial intent in the U.S. and Korea
3.6.2 Entrepreneurship education and its role in the development of entrepreneurial skills and competencies
3.6.2.1 The link between entrepreneurial skills and entrepreneurial intent
3.6.2.2 The link between entrepreneurial skills, entrepreneurship education and entrepreneurial activity
3.6.2.3 The types of skills to be developed through entrepreneurship education
3.6.3 The role of entrepreneurship education in the development of entrepreneurial self-efficacy
3.6.3.1 The link between entrepreneurial self-efficacy and entrepreneurial competencies
3.6.3.2 Determinants of entrepreneurial competence
3.6.3.3 Sources that contribute to the development of entrepreneurial selfefficacy and their implications for entrepreneurship education
3.6.3.4 Summary
3.7 Global perspectives on entrepreneurship education
3.7.1 Entrepreneurship education in the United States and Europe
3.7.2 Entrepreneurship education in Rwanda
3.7.3 Entrepreneurship education in South Africa
3.7.4 A comparison of entrepreneurship education at WSU and TUT
3.7.5 Entrepreneurship education in Malaysia
3.7.6 Entrepreneurship education in Finland
3.7.7 Entrepreneurship education in Singapore
3.7.8 Summary of global perspectives on entrepreneurship education
3.8 Models of entrepreneurship education
3.8.1 The application of entrepreneurial intent models in evaluating the impact of entrepreneurship education
3.8.2 Teaching model framework for entrepreneurship education
3.8.2.1 The ontological level
3.8.2.2 The educational level
3.8.2.3 The learning processes in entrepreneurship education and the associated key dimensions of the teaching model framework
3.8.3 Models of entrepreneurship education in South Africa
3.8.4 Models of entrepreneurship education in China
3.8.5 Summary of the models of entrepreneurship education
3.9 Conclusion
CHAPTER 4: ENTREPRENEURIAL SUPPORT
4.1 Introduction
4.2 Defining entrepreneurial support
4.3 Why the need for entrepreneurial support
4.3.1 Entrepreneurial support as a driver of the entrepreneurial process
4.3.2 An integrative approach to the entrepreneurial process
4.3.3 The process of new venture creation
4.3.4 The factors that drive entrepreneurial performance
4.3.5 Deficiencies in the human capital of an entrepreneur as a source of the need for entrepreneurial support
4.3.6 Failure rate of new businesses as a reason for entrepreneurial support
4.3.7 Uncertainty during the process of starting a business
4.3.8 The need for entrepreneurial support in South Africa
4.4 The conditions that contribute to entrepreneurial activity
4.5 The role of entrepreneurial support in the development of entrepreneurial intent and entrepreneurial activity
4.5.1 Perceived access to resources and the formation of entrepreneurial intent
4.5.2 The relationship between perceived market opportunity, outside assistance and entrepreneurial intent
4.5.3 The relationship between entrepreneurial support and entrepreneurial activity
4.5.4 The role of the media in creating awareness of entrepreneurial support
4.6 The types of support required by entrepreneurs
4.7 Entrepreneurial support by the government in South Africa
4.7.1 The introduction of entrepreneurial support in South Africa
4.7.2 Institutions that provide entrepreneurial support in South Africa
4.7.2.1 The Industrial Development Corporation
4.7.2.2 The National Empowerment Fund
4.7.2.3 The South African Micro Finance Apex Fund
4.7.2.4 Khula Enterprise Finance Limited
4.7.2.5 Companies Intellectual Property Registration Office
4.7.2.6 The Integrated Strategy on the Promotion of Entrepreneurship and Small Enterprises and the establishment of the Small Enterprise Development Agency
4.7.2.7 The National Youth Development Agency
4.7.2.8 Other programmes for SMMEs
4.7.3 Provincial entrepreneurial support agencies in the Limpopo and Eastern Cape
4.7.3.1 Limpopo Economic Development Enterprise
4.7.3.2 Limpopo Business Support Agency
4.7.3.3 Eastern Cape Development Corporation
4.8 Empirical studies on entrepreneurial support
4.8.1 Entrepreneurial support in Canada
4.8.2 Entrepreneurial support in Belgium
4.8.3 Entrepreneurial support in Europe
4.8.4 Entrepreneurial support in Québec
4.8.5 Entrepreneurial support in Thailand
4.8.6 Entrepreneurial support in Italy
4.8.7 The impact of entrepreneurial support on small business success in Tanzania
4.8.8 A study of entrepreneurial support for women in Kenya
4.8.9 The impact of entrepreneurial support in the UK
4.8.10 The impact of entrepreneurial support in Pennsylvania
4.8.11 A study of the usage of entrepreneurial support in Sweden
4.8.12 Entrepreneurial support in Britain
4.8.13 Factors influencing the use of entrepreneurial support in the United States
4.8.14 Entrepreneurial support in Ireland and the Netherlands
4.8.15 Research on entrepreneurial support in South Africa
4.8.15.1 General evaluation of entrepreneurial support programmes and measures to improve their effectiveness
4.8.15.2 Research on entrepreneurial support for the youth
4.8.15.3 A study of entrepreneurial support for rural SMMEs
4.8.15.4 Entrepreneurial support needs of informal businesses
4.8.15.5 An evaluation of micro-finance programmes
4.9 Factors that can contribute towards the development of rural entrepreneurship
4.9.1 Government policies targeted at promoting and supporting rural entrepreneurship and enterprises
4.9.2 A model of rural economic and enterprise development
4.10 Conclusion
CHAPTER 5: SOCIAL CAPITAL AND THE FORMATION OF ENTREPRENEURIAL INTENT
5.1 Introduction
5.2 Defining social capital
5.3 The relationship between social capital and social networks
5.4 The levels of social capital
5.5 The differences and similarities between social capital and other forms of capital
5.6 Dimensions of social capital
5.7 Social capital as an alternative to the resource-based view of the firm and its potential benefits for entrepreneurs
5.7.1 The benefits of social capital at the different stages of the business life-cycle of new ventures
5.7.2 Social networks as a means to access resources and to identify and exploit entrepreneurial opportunities
5.7.3 Social capital as a means of reducing environmental uncertainty
5.7.4 The types of networks and their benefits to entrepreneurs
5.8 The role of social skills/competencies in accessing the benefits and resources flowing from social networks
5.9 The relationship between social capital and entrepreneurial activity
5.9.1 The development and use of social capital in the early phases of establishing a new venture
5.9.2 The relationship between social capital, new venture start-up and survival
5.9.2.1 The relationship between social capital, new venture start-up and survival in Europe
5.9.2.2 The relationship between social capital, new venture start-up and survival in New Zealand
5.9.2.3 The relationship between social capital, new venture start-up and survival in Germany
5.9.2.4 The relationship between social capital, new venture start-up and survival in Spain
5.9.2.5 The relationship between social capital, new venture start-up and survival in the United States
5.9.2.6 The relationship between social capital, new venture start-up and survival in the United Kingdom
5.9.2.7 The relationship between social capital, new venture start-up and survival in Sweden
5.9.3 The role of family members in the stages of the entrepreneurial process
5.9.4 The relationship between social capital and new venture performance
5.10 The influence of social capital on entrepreneurial intent
5.10.1 Entrepreneurial role models as a source of social capital and their effect on entrepreneurial intent
5.10.2 The influence of social capital on entrepreneurial intent in Seville, Spain
5.10.3 The influence of social capital on entrepreneurial intent in Spain and Puerto Rico
5.10.4 The influence of social capital on entrepreneurial intent in the United States, Mexico, Spain and China
5.10.5 The relationship between social capital and entrepreneurial intent in Norway, Denmark and Finland
5.10.6 The influence of social capital on entrepreneurial intent in Kenya
5.10.7 The influence of social capital on entrepreneurial intent in Malaysia
5.10.8 The relationship between social capital and entrepreneurial intent in Indonesia and Norway
5.10.9 The influence of social capital on entrepreneurial intent in Yorkshire
5.10.10 The influence of social capital on entrepreneurial intent in New Zealand
5.10.11 The impact of social capital on renascent entrepreneurship in the Netherlands
5.10.12 The role of social capital in the pre-start up stage of the new venture
5.10.13 The negative effect of role models on entrepreneurial intent
5.10.14 A global study of the impact of human capital and social capital on export intentions
5.11 Conclusion
CHAPTER 6: THE LINK BETWEEN ENTREPRENEURSHIP AND THE ESTABLISHMENT OF SMALL, MEDIUM AND MICRO ENTERPRISES (SMMEs)
6.1 Introduction
6.2 Defining entrepreneurship
6.3 Entrepreneurship as the nexus of opportunity and the enterprising individual
6.4 The entrepreneurial process
6.5 The relationship between entrepreneurship and small business
6.6. Conclusion
CHAPTER 7: RESEARCH METHODOLOGY
7.1 Introduction
7.2 Steps in the research process
7.3 Validity and reliability of the research findings
7.4 Summary
CHAPTER 8: ANALYSIS AND INTERPRETATION OF THE RESEARCH FINDINGS
8.1 Introduction
8.2 Demographic characteristics
8.3 Work experience and entrepreneurial knowledge
8.4 Entrepreneurial intent
8.5 Attitude towards becoming an entrepreneur
8.6 Perceived behavioural control
8.7 Entrepreneurial support
8.8 Social capital
8.9 Entrepreneurial self-efficacy (ESE)
8.10 Entrepreneurial competencies
8.11 Summary and conclusion
CHAPTER 9 CONCLUSIONS, LIMITATIONS AND RECOMMENDATIONS
9.1 Introduction
9.2 Demographic profile of the respondents
9.3 Research objectives revisited
9.4 Limitations
9.5 Contributions to the body of knowledge
9.6 Recommendations and conclusions
9.7 Directions for future research
9.8 Conclusion