Assessment of Entrepreneurial Success perceptions at Umeå University - PDF

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Assessment of Entrepreneurial Success perceptions at Umeå University A quantitative study on student s perceptions of entrepreneurial success. Authors: David Laurent Bereket A. Sorato Supervisor: Alicia

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Assessment of Entrepreneurial Success perceptions at Umeå University A quantitative study on student s perceptions of entrepreneurial success. Authors: David Laurent Bereket A. Sorato Supervisor: Alicia Medina Student Umeå School of Business and Economics Spring Semester 2014 Bachelor thesis, 15 hp I Abstract This research focused on assessing the perception of student s at Umeå School of Business and Economics towards entrepreneurial success. Moreover this research focused on comparing student s perception and perception of importance of entrepreneurial success, which has been defined three dimensionally. The conceptual definition of entrepreneurial success has emerged from the existing literature and could be explained as follow: entrepreneurial success is a cluster of financial performance, operational performance and Satisfaction (which refers to the entrepreneur s satisfaction. We identified that the literature was remaining in some ways nebulous when it was to officially define the notion of entrepreneurial success. This notion has been somehow associated to the perception of entrepreneurial success, because of the approach or methods that have been used to assess it. Moreover, we have identified that some factors have been confirmed as influencing the perception of entrepreneurial success, however these results were not targeted students, but mainly entrepreneurs. We formulated the following research question: Which factors influence the perception and the perception of importance of entrepreneurial success, among Umea University s students? This research has been conducted by including all master program students and bachelor students in graduating class at Umeå School of Business and Economics, to examine their perception of entrepreneurial success generally and additionally compare their perception in order to determine whether some factors were influencing their perceptions. The conceptual model has been created in order to determine whether the selected variables: Gender, age, background and perception of entrepreneurship as a culture is influencing two aspects: the perception of entrepreneurial success and the perception of importance of the entrepreneurial success. These two aspects have been underlined by the two first questions of our questionnaire, and have been defined according the same dimensions: Financial performance, Operational performance and satisfaction These previous four variables have permitted to form groups in order to attest of potential differences of perceptions. From all the analysis that have been proceeded. It has been found that not all the components from the conceptual model were likely to be considered as influencing the perception of entrepreneurial success and the perception of importance of entrepreneurial success. II III Acknowledgment We would like to express our gratitude to our supervisor Alicia Medina for her unlimited effort in supporting and helping us during the thesis writing process. Her insights, guidance and important feedbacks in the subject were very crucial for us to accomplish our study in the right time. We are very thankful for Umeå University students who participated on this research by answer the questionnaire for this thesis. We would like also to extend our appreciation to Rebecca Arklöf, IBP coordinator. We would like to express our gratitude to Erwan Lamy, for his guidance and feedbacks to conduct our work. May 26, 2014 Umeå School of Business and Economics Umeå University David Laurent Bereket A. Sorato IV Table of contents 1. Introduction Choice of subject Theoretical background and knowledge gaps Research question Research purpose Scope of study Theoretical framework Evolution of the concept of entrepreneur and entrepreneurship The concept of success/entrepreneurial success and their linkage Organizational effectiveness, organizational performance: definition and distinction Measurement of success Objective approach Limitations of accounting measures Financial market measures Subjective approach Fully subjective Quasi-objective Objective vs Subjective approach Dimensions of Success Variable selection to attest of perceptions differences Education: background Age Gender Entrepreneurship s culture Model and hypotheses Methodology Pre-understanding Ontological assumptions Epistemological assumptions Research approach Methodological choice Choice of theoretical sources Research design Data collection technique Sampling Access to respondents and possible problems Data analysis Descriptive statistics Inferential statistics Preliminaries tests Basic tree decision tests Ethical issues Results Demographics Descriptive statistics V 5. Analysis Descriptive statistics Perceptions and importance of entrepreneurial success Inferential statistics Normality Homogeneity Test to compare means Discussion Perception of entrepreneurial success discussion Gender discussion Age discussion Background discussion Entrepreneurship s culture discussion Conclusion General conclusion, Limitations and future research Truth criteria Generalizability Validity Reliability List of References Appendix 1 Questionnaire List of Figures: Figure 1. Major trust of research Figure 2. Overview from of the different techniques used in articles to measure success in entrepreneurship Figure 3. Conceptual definition of Entrepreneurial Success Figure 3 a. Conceptual Model Figure 4. The process of deduction Figure 5. The Normal curve Figure 6. Basic tree decision to compare two means Figure 7. Gender s Repartition Figure 8. Age of respondents Figure 9. Entrepreneurship s background of respondent Figure 10. Perception of Entrepreneurial success as Financial Performance Figure 10 a. Perception of entrepreneurial success as operational performance Figure 10 b. Perception of entrepreneurial success as Human perspective: Satisfaction. Figure 11. Overall distribution of the perceptions of entrepreneurial success VI List of Tables: Table 1. Perspectives on the nature of entrepreneurship Table 2. Terms and their meanings Table 3. Summary of the approaches used in the literature to assess performance Table 4. Fundamental differences between qualitative and quantitative research methods Table 5a. Descriptive Statistics Table 5b. Descriptive Statistics Table 5c. Descriptive Statistics Table 6. Meaning of the data Table 7. Shapiro wilk test results Table 8. Meaning of the overall notations Table 9. Homogeneity of variances for the Gender variable Table 9a. Homogeneity of variances for the Age variable Table 9b. Homogeneity of variances for the BG variable Table 9c. Homogeneity of variances for the Ecul variable Table 10. Tests appropriated for the Gender variable Table 10 a. Means and standard deviations for the variable Gender with all factors Table 10 b. Tests performed to compare two means with the Gender variable Table 10 c. Tests performed to compare two means with the Gender variable Table 11. Tests appropriated for the Age variable Table 11 a. Means and standard deviations for the variable Age with all factors Table 11 b. Tests performed to compare two means with the Age variable Table 12. Tests appropriated for the Background variable Table 12 a. Means and standard deviations for the variable BG (background) with all factors Table 12 b. Tests performed to compare two means with the BG (background) variable Table 13. Tests appropriated for the Entrepreneurial culture variable Table 13 a. Means and standard deviations for the variable Ecul (entrepreneurial cutlure) with all factors Table 13 b. Tests performed to compare two means with the Ecul (entrepreneurial culture) variable Table 13 c. Tests performed to compare two means with the Ecul (entrepreneurial culture) variable Table 14. Summary of the results obtained Table 15. Data extracted from Table 10 a Table 15 a. Data extracted from Table 10 a. Table 16. Data extracted from Table 11 a. Table 17. Data extracted from Table 12 a. Table 17 a. Data extracted from table 12 a. Table 18. Data extracted from table 13 a. Table 18 a. Data extracted from table 13 a. Table 18 b. Data extracted from table 13 a. VII 1. Introduction This introductive section will outline and provide to the reader not only the reasons why the subject has been chosen but will also expose the theoretical background which will emphasize the knowledge gap. Furthermore, the problem background will be the key basis of the research and therefore will determine the research question. Moreover, purposes of the study will be explained. To conclude, this chapter will stress out the relevant concept s definitions. 1.1 Choice of subject Within the framework of the course entitled Bachelor Thesis, we have been asked to conduct a research study. As a binomial composed by one student enrolled in the international Business Program and the other as being an exchange student at Umeå University. It has been decided to write this Bachelor thesis on Entrepreneurship. This main field has been chosen according to the program in which we both were involved in and also due to personal interests. Several topics have been discussed within this Entrepreneurship field until narrowing down and specifying the thinking process, which led to consider the notion of Success. By reviewing articles on this subject, the subject of entrepreneurial success has been considered, and intimately linked to it the perception of entrepreneurial success. The thesis has been conducted about Entrepreneurial success within Umea university context and in relation to the Student s perceptions towards the subject. 1.2 Theoretical background and knowledge gaps What is success? This short interrogation might be the one which has been the most frequently addressed by the majority of people during their life. The word Success finds its origins in the Latin language, etymologically success simply echoes to the result, outcome, understood as what comes next to any types of situations or events (Online Etymology Dictionary, n.d.). With such a broad description of success, it is definitely not possible to take position on what success is in concrete. Even though there has been a gigantic focus on two concepts which are inter-correlated, respectively Success and failure. The study of success must be driven by a specific context (Orser et al., 2005, p. 3). The scope, understood as the dimension in which one is studying success is providing useful insights. The first conclusion that can be drawn is that success must be interpreted in a particular context. The context in which this thesis is written is therefore fundamental to understand the notion of success. As a consequence it is necessary to review what entrepreneurship is, as well as intimately linked to it what an entrepreneur is. Apparently the first use of the term entrepreneur was slightly different from the meaning one might have nowadays. Entrepreneur or so called entreprendeur back in the middle ages was used in order to define a certain type of people which were mainly architects (Hoselitz, 1960, p. 237). The changes occurring at that time resulting of a transition from feudalism to early capitalism has clearly impacted the notion of entrepreneur (Hebert & Link, 2009, p. 6). Originally corresponding to an individual enhancing multiple activities, the history has 1 divided these tasks into several activities. Entreprendeur is no longer associated with architectural design, engineering conception and economical supervision (Hebert & Link, 2009, p. 6). The evolution of the concept of entrepreneur from its original apparition in the dictionary in 1723 (Hebert & Link, 2009, p. 5), to its application in the economy by Cantillon (Thornton, 2010, p. 31), has raised among scholars divergences. Entrepreneurs have been defined over the time by executing or being in charge of several objectives which vary according to the different schools. Wennekers and Thurik (1999, p. 31) have reunited different roles attributed to the entrepreneur in the overall literature. These 13 roles, for instance: innovator, superintendent etc. provide determinant aspects which are useful to increase our knowledge about entrepreneur. The definition one will have about entrepreneurship will lead to affect the definition of entrepreneurial success in the way that the selected indicators might be different. As mentioned by Perez and Canino (2009, p. 991), the relevant indicators for new ventures might not be the same as the ones used at other stages of the business cycle. Having mentioned this observation, Success is seen from an entrepreneurial perspective which brings the question of what entrepreneurial success is. Nowadays the word success is overused by several entities, however this overuse does not especially signify that the entities using it, do define it the same way. As mentioned by Orser et al. (2005, p. 3), it often echoes to disparate outcomes. In this sense, the term success is a complex notion to grasp. The encountered issue with the notion of entrepreneurial success is that it has been largely studied by scholars who tried to map the factors leading to it without taking position on what it was (Resmi & Kamalanabhan, 2010, p. 379). However if we consider Murphy et al. (1996, p. 15) they have clearly emphasized that due to the nebulous nature of the concept of entrepreneurship, the concept of entrepreneurial success is also hard to define but is intimately linked to a third aspect which is the performance. By revising the existing literature, we have noticed that the nebulous aspect of the definition of entrepreneurships is therefore affecting the way success must be understood. However what is called success in entrepreneurship refers to the entrepreneurial success which is itself linked to the notion of performance. As a consequence by scrutinizing how performance has been interpreted, which means by focusing on the approaches that have been used, one might be able to define precisely what entrepreneurial success is. The literature on performance is firstly distinguishing two notions which are organizational effectiveness and organizational performance (Venkatraman & Ramanujam, 1986, p. 802). Having a closer scrutiny at the literature, organizational performance has been studied according to two dimensions, from an objective point of view and a subjective one. Three methods have been used: objective, subjective and quasi objective (Richard et al., 2009, p. 727) or also known as self-assessment (Pérez & Canino, 2009, p. 996) 2 The literature has not only tried to define entrepreneurial success but also considered several variables that might affect the perception of success of entrepreneurs: mainly the education, principally based on the Human capital theory, individual are providing two dimensions to the firm: Breadth and depth of experiences (Reuber & Fischer, 1995 cited in Orser et al., 2005, p. 12) which likely expose that their choices are seen as investment and might result in a different way of perceiving success. Secondly, the age where according to Duxbury et al., (2000, cited in Orser et al., 2005, p. 12) within a study of high-tech workers about their perceptions of career success, it has been found that 75 % of respondents who were over 40 years old considered personal satisfaction as well as respect as the most valuable. In contrast only 67 % of younger respondents valued the same notions. The third variable which is the gender is the most controversial as mentioned by Orser et al. (2005, p. 13), in spite of the fact that the gender difference in perceived success is overly addressed, results still remained inconsistent. To summarize, we have figured out that there is no common agreement on what entrepreneurship is. As a consequence the notion of success has been even harder to define since success must be defined according to a context (Orser et al., 2005, p. 3), and even within this context several approaches are used but are most of the times relying on only one of them (Richard et al., 2009, p. 727). It sounds as if there is a lack of clarity on what success is and how success is related to other aspects such as entrepreneurial success, performance. The existing gap resides firstly in the way each concept is linked to another: how success is linked to entrepreneurial success, how entrepreneurial success is linked to performance, and how performance is linked to organizational performance. Secondly, the gap resides in the dimensions used to define organizational performance and to the extent entrepreneurial success. Thirdly, the literature has considered organizational performance thanks to the quasi objective approach, which relies on the interpretation of objective data by the entrepreneur (Richard et al., 2009, p. 727). In other words, the study of success has been conducted from an entrepreneur s point of view (Pérez and Canino, 2009, p. 1000), meaning that reports have accessed about the entrepreneur s perception of success, and no one has considered testing the student s perceptions on a defined model of entrepreneurial success and if their perceptions were different according selected variables. Indeed few studies have considered testing whether the entrepreneur s perceptions were varying: the variables usually used are the education, the age and the gender (Orser et al., 2005, pp ). However some of these variables are inconsistent or have only been tested on special targets: entrepreneurs or different firm positions: executive, managers, etc (Duxbury et al., 2000, cited in Orser et al., 2005, p. 12) 1.3 Research question Within the entrepreneurship s field, researchers have been trying to map the attributes of entrepreneurial success. They intended to define it and have been measuring it according to several methods. No agreement has been made among scholars on the way to define entrepreneurial success. For this reason and based on the literature review, we decided to define it according three dimensions: financial performance, operational performance and 3 satisfaction This conceptual representation of entrepreneurial success is used in order to assess student s perceptions. The research question has been formulated as below: Which factors influence the perception and the perception of importance of entrepreneurial success, among Umea University s students? This research question is principally based on the two first questions of our questionnaire. We argue that someone may be able to perceive a dimension of entrepreneurial success but might not give the same importance. 1.4 Research purpose The main purpose of this study is to develop a model of entrepreneurial success that will be tested on Umea s university students. The purpose could be summarized as hereinafter: 1) Assess Student s perceptions of entrepreneurial success according to the model designed. 2) Compare their perceptions according four variables: background, age, gender, and their position on whether entrepreneurship is a culture. 1.5 Scope of study Our research has been made within USBE University in Umea. As we are currently students within this university, it has been decided to select this sample for convenience reasons; our sampling area is the current students. We have decided to send out the questionnaire to students in their first and second years of Master, as well as fourth year Bachelor students. Firstly, the reason why this sample has been selected is residing in the fact that they may already have a pre-understanding of the subject and a certain acquaintance in Entrepreneurship which will palliate misunderstandings on the topic and research question. Furthermore they are potential entrepreneurs which allow us to test their perceptions. The sample is comprised of Swedish students and International students. It is necessary to stress out that the scope of the study is one main aspect that underlined the existing theoretical gaps, most of the time, the perception of entrepreneurial success h
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