entrepreneurial orientation (eo) in small firms in

Samihah A & Sazali A.W

Entrepreneurial Orientation (EO) in Small Firms in Malaysia

ENTREPRENEURIAL ORIENTATION (EO) IN SMALL FIRMS IN MALAYSIA – VALUE-ATTITUDESBEHAVIOR APPROACH

i



ENTREPRENEURIAL ORIENTATION (EO) IN SMALL FIRMS IN MALAYSIA – VALUEATTITUDES-BEHAVIOR APPROACH

By

SAMIHAH AHMED SAZALI ABDUL WAHAB

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_________________________________

CONTENTS _________________________________

Contents

iii

List of Tables

vi

List of Figures

viii

List of Abbreviations

ix

List of Appendices

x

Preface

xi

Chapter I – Introduction and Background

1

1.1 Introduction

1

1.2 Background of Study

2

1.3 Significance of Study

6

1.4 Problem Statement

7

1.5 Research Objective

8

1.6 Research Questions

8

1.7 Hypothesis Development

9

1.8 Operational Definition

14

Chapter 2 - Literature Review

16

2.1 The Concept of Entrepreneurial Orientation (EO)

16

2.2 The Work Values and Entrepreneurial Orientation (EO)

18

2.3 Attitudes Toward Growth and Entrepreneurial Orientation (EO)

20

2.4 The Relationship Between Work Values and Entrepreneurial Orientation (EO)

22 iii


2.5


The Mediating Role of Attitudes Between Work Values and Entrepreneurial Orientation (EO)

23

Chapter 3 – Research Methodology and Design

25

3.1 Underpinning Theories

25

3.2 Conceptual Research Model

26

3.3 Scope of Research

26

3.4 Research Approach

27

3.5 Population and Unit of Analysis

27

3.6 Sampling Type

28

3.7 Sampling Procedures

28

3.8 Sample Size and Power Analysis

28

3.9 Questionnaire Design and Instrumentation

30

3.10 Reliability and Validity of Measures

33

3.11 Pilot Study

34

3.12 Data Collection Methods

35

3.13 Research Operational Framework

36

3.14 Data Analysis Procedures

38

3.14.1 Data Screening and Cleaning

38

3.14.2 Data Distribution

39

3.14.3 Descriptive Analysis

39

3.14.4 Correlation Analysis

40

3.14.5 Multiple Regression Analysis

41

Chapter 4 - Findings and Discussions

44

4.1 Result of Reliability and Validity Test

44

4.2 Results of Data Distribution

47

4.3 Results of Descriptive Analysis

48

4.4 Results of Correlation Analysis

53

4.5 Results of Multiple Regression Analysis

54 iv


Chapter 5 -


Conclusion

71

5.1 Summary of Findings and Conclusion

71

5.2 Contribution of Research

73

5.3 Limitations of Research

74

5.4 Recommendations for Future Research

75

Bibliography

76

Author’s Index

85

Appendix

87

v



LIST OF TABLE

1.1 Summary of Hypothesis Construct and Source of Literature

13

3.1 List of Variables and Total Questions

32

3.2 Research Operational Framework Activity

37

3.3 Size of Correlation Coefficient

41

3.4 Regression Equation Model for Testing Hypothesis

42

3.5 Step of Analysis for Mediation

42

4.1 Cronbach’s Alpha Reliability Coefficients

45

4.2 Factor Analysis Result for Work Values

45

4.3 Factor Analysis Result for EO Behaviour

46

4.4 Factor Analysis Result for Attitudes

47

4.5 Result for Kolmogorov-Smirnov and Shapiro-Wilk Normality Test, Skewness and Kurtosis Value

48

4.6 Results of Respondents’ Profile

49

4.7 Results of Background of Business

49

4.8 Distribution Score for Work Values Variables

51

4.9 Distribution Score for EO Behaviour Variables

52

4.10 Distribution Score for Attitudes Variables

52

4.11 Results of Spearman Rho Correlation Analysis between Work Values and EO Behaviour

53

4.12 Summary of Multiple Regression Results (By Sub-Dimensions)

55

4.13 Summary of Hypothesis Results H1a-H1d

57

4.14 Summary of Hypothesis Results H2a – H2b

57

4.15 Summary of Hypothesis Results H3a – H3d

58

4.16 Summary the Path Coefficient of Direct Effect of Intrinsic on EO Behaviour

61

4.17 Summary the Path Coefficient Indirect Effect of Intrinsic on EO Behaviour mediated by Attitudes Towards Firm’s Growth 4.18 Summary the Path Coefficient of Direct Effect of Status on EO Behaviour

61 63

4.19 Summary the Path Coefficient Indirect Effect of Status on EO Behaviour mediated by Attitudes Towards Firm’s Growth

63 vi



4.20 Summary the Path Coefficient of Direct Effect of Extrinsic on EO Behaviour

65

4.21 Summary the Path Coefficient Indirect Effect of Extrinsic on EO Behaviour mediated by Attitudes Towards Firm’s Survival 4.22 Summary the Path Coefficient of Direct Effect of Social on EO Behaviour

65 67

4.23 Summary the Path Coefficient Indirect Effect of Social on EO Behaviour mediated by Attitudes Towards Firm’s Survival 4.24 Summary of Hypothesis for All Hypothesis

68 69

vii



LIST OF FIGURES

3.1

Framework of Analysis

26

3.2

Research Operational Framework

36

3.3

Direct Part and Indirect Path for Mediator

43

4.1

Direct Part and Indirect Path of Intrinsic Analysis

62

4.2

Direct Part and Indirect Path of Status Analysis

64

4.3

Direct Part and Indirect Path of Extrinsic Analysis

66

4.4

Direct Part and Indirect Path of Social Analysis

68

viii



LIST OF ABBREVIATIONS EXT

Extrinsic

INT

Intrinsic

STA

Status

SOC

Social

EO

Entrepreneurial Orientation

INN

Innovativeness

PRO

Proactiveness

RIS

Risk Taking

GA

Growth Attitudes

SA

Survival Attitudes

SME

Small Medium Enterprise

DV

Dependent Variable

IV

Independent Variable

MV

Mediating Variable

ix



LIST OF APPENDICES A

Power Analysis

87

B

Work Values, EO Behaviour, Attitudes and Multi Items Construct/ Questionnaires

88

C

Questionnaires

90

D

Results of Reliability Test

95

E

Results of Factor Analysis for Construct Validity Test

106

F

Results of Data Normality Test

113

G

Results of Descriptive Analysis on Demographic Profiles and Background of the Business

122

H

Results of Descriptive Analysis on All Variables

125

I

Results of Correlation Coefficient Analysis

133

J

Results of All Multiple Linear Regression (By Sub-Dimensions)

137

K

Results of Multiple Linear Regression for Hypothesis

150

Preface x



Entrepreneurial Orientation (EO) is a strategic idea that created the whole concept of firms including the outcome of firms, strategic management implementation towards the growth of firms, beliefs and behaviours expected among the management of the firm. The dimension of the EO has been divided by three categories namely innovativeness, proactiveness, and risk taking. Taking into account the vital role of Small Medium Enterprises (SMEs) in economic development, it is crucial for firms to recognize the key work values needed by the owner managers or CEOs of firms to ensure the right focus and strategies implementation to drive their firms to growth and profit. In Malaysia, there are still lack of understanding about the work values and EO behaviour. Therefore, this research is conducted to examine the background of EO and also apply valuesattitudes-behaviour framework in the context of entrepreneurial behaviour within the scope of SMEs. Research model was developed based on the identified work values that includes extrinsic, intrinsic, status and social and EO behaviour that consist of innovativeness, proactiveness, and risk taking. Quantitative research approach was employed using the survey method by distributing questionnaires among owner managers or CEOs of SMEs in Malaysia to measure the extent of work values and EO behaviour. Data were analyzed using correlation analysis and multiple regressions analysis. It was found that Intrinsic, Extrinsic and Social are the key Work Values that associate with EO behaviour. Status shown the partial mediation between work values with EO behaviour mediated by attitudes. Other than that, growth attitudes also associate with EO behaviour. Therefore, this research suggests that the owner managers or CEOs in SMEs should have these three key work values to ensure they are capable to drive their firm to success.

Samihah Ahmed & Sazali Abdul Wahab Malaysian Graduate School of Entrepreneurship & Business Universiti Malaysia Kelantan MALAYSIA January 2017

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1 Entrepreneurial Orientation (EO): Defining the Concepts CHAPTER OUTLINE This section provides background information relating to EO behaviours from global view to the context of SMEs highlighting the personal value, attitudes and behaviour approach needed to explore the current levels of EO behaviours to get better understanding of the current approach relating to EO behaviours particularly for SMEs. Next, this chapter presents the significance of study, problem statement, research objectives and corresponding research questions, followed by the operational definitions of key terms.

1.0 INTRODUCTION This

study investigates the background of entrepreneurial orientation (EO) in Small Medium

Enterprises (SMEs) in Malaysia through the context of entrepreneur behaviour. In this research, We have applied the value-attitudes-behaviour as a framework of the study. This research was conducted based on previous researches on EO in small firms - value-attitudes- behaviour approach conducted in other countries as a baseline to study EO in small firms based on valueattitudes-behaviour approach within the context of SMEs in Malaysia. The output from this study has identified the work value and the result shall present that there is relationship between work values and EO behaviours. However, the output from the study also shown relationship between work values and EO behaviours mediated by attitudes. Other than that, growth attitudes also associate with EO behaviour. The findings of this study can be used as guidelines to enhance or increase understanding of EO in SMEs and important cognitive factors in predicting entrepreneur actions.

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This chapter introduces the study by providing related information on the importance of the understanding of entrepreneur behaviour in SMEs. As we know in SMEs, the owner managers or CEOs of companies play an important role to ensure their companies have the ability to succeed. Next, this chapter presents the significance of study, problem statement, research objective and corresponding research questions followed by operational definition of key terms. The result of this study is then presented at the end of this chapter.

1.2 BACKGROUND OF STUDY Many of previous researches in entrepreneurship attached more attention to entrepreneurs. They attempted to relate trails of entrepreneurs to new venture creation but they failed to demonstrate a definitive linkage. An entrepreneur is someone who starts a brand-new business or start up, taking on some degree of financial risk in order to get their company off the ground. According to Wikipedia, “Entrepreneurship is the process of starting a business or other organization. The entrepreneur develops a business model, acquires the human and other required resources, and is fully responsible for its success or failure”. In economics, entrepreneurship is the combination of all resources in firms such as assets, workers, the natural resources or raw materials and also the capital. The combination of all the resources can produce profit and competitive advantage to the firms. Entrepreneurial activities and small firms or formally known as Small Medium Enterprises (SMEs) are vital for the economic development and social well-being in Malaysia. To ensure SME companies’ success, there a few factors that need to be taken into consideration such as finance, key personnel/teamwork, technology, environment and sociological problem. Malaysia has established a classification of Small Medium Enterprise (SME) since 2005.

According to

SMECorp (2013), the size of firms is determined by two categories; manufacturing and services or other sectors. For the manufacturing sector, the sales turn over does not exceed RM50 million or the full time employees do not exceed 200 workers. For the services sector or other sectors, it does not exceed RM20 million or full time employees do not exceed 75 workers.

In SMEs, strategic orientations of business play a crucial role to ensure high performance and competitive advantage of the firms. Strategic orientation of business normally involved using new 2



technology, penetration of wide market, more targeted customers, increase in learning process among the workers and implementation of EO (Hakala, 2011). Many studies conducted showed that the strategic orientation whether alone or interactive with orientations provide high performance for firms. For the purpose of our research, we specifically focus on EO. In strategic management and entrepreneurship literature, EO is a main measurement for entrepreneurs’ behaviours. There are a few definitions of EO defined by the researchers. According to Covin et.al (2006), EO is defined as strategic ideas that create the whole concept of firms including the outcome of firms, management strategic implementation towards the growth of firms and beliefs and behaviours expressed among the management of the firm. However, this definition had been argued by Runyan et al., (2008). He explained that EO is noticeable indications in the entrepreneurial propensities towards innovativeness, proactiveness and risk taking. These three constructs had been tested in empirical studies and the results showed that these constructs are central to EO. (Miller 1983; Covin and Slevin 1989). Based on the studies, the dimension of the EO has been divided into three categories namely innovativeness, proactiveness, and risk taking. Innovativeness refers to the creativity process to develop new products or services and continue doing the Research and Development (R&D) to ensure they are the pioneer in new processes or services. Risk taking is defined when companies have decided to venture into the unknown to start their project or company by borrowing money and committing in unclear situations. Proactiveness is defined as a chance to pursue new opportunity, act before the competitors do and always introduce new products or services (Miller, 1983; Covin and Slevin 1989).

Previous research conducted on EO focused on the positive relationship between EO and firms’ performance (Cassia and Minola, 2012). The outcome from the studies showed different results such as positive relationship (Eggers et al., 2013; Kraus 2013; Soininen et al., 2012a) and important role of EO in firms’ survival during the economic crises (Kraus et al., 2012; Soininen et al., 2012b). More research has been conducted on the background or antecedents of EO. The studies emphases more on the factors that influence entrepreneur behaviours such as organization, environmental impact and export performance and implication of demographic background (Jalali 2012; Zahra 2013).

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Personal values of the management of start-up or small companies are very important to ensure success of the companies. Personal value is defined as people's internal conception of what is good, beneficial, important, useful, beautiful, desirable and constructive (Wikipedia). Several factors can influence the personal values of people such as culture, internal and external factors and tradition. Values will shape human behaviours in the situations they encounter. Values will also drive humans to be passionate about what they are doing such as being passionate about their jobs. The effect from that will result in high return of their firms, strong teamwork, more competitive, high satisfaction and synergy. According Uy (2011), personal values are a core of characteristic of behaviours in human and the decision and action that has been made by human is reflections of their values. Many studies have recognized the link between values, attitudes, and behaviours of entrepreneurs. Based on that, the study of the mechanisms thought values in entrepreneurs, which will affect strategic and the performance of the SMEs is clearly needed.

Even though personal characteristics of entrepreneurs or owner managers are very important especially in small firm, there are several studies that mentioned the investigations on personal characteristics is still lacking even though the personal characteristics of the owner managers or CEOs of firms is known as important (Miller 2011; Le Breton-Miller 2011). According to the study by Pines et al. (2012, p. 96) who mentioned that “in recent years, research on entrepreneurial personality has re-emerged as an important topic of investigation and leading entrepreneurship scholars have noted that a psychological approach is necessary to understand entrepreneurship.” Based on the study by Wiklund, (1999), he claimed that when applied to small or new start-up firms, EO might be the outcomes from individuals rather than firm. Therefore, more studies are needed to be conducted to investigate the owner managers or CEOs’ personality in clarifying EO.

Based on the Wiklund’s (1999) study, there is a possibility to get different results when EO is applied in small firms or new incorporated firms such as the result show more on the individual decisions rather than company decisions or outcomes. Thus, in order to explain EO, more research should be conducted focusing more on the individual entrepreneurs’ personality. Different people might have different character and personality, thus more study should be conducted to determine the personal values and motivation of entrepreneurs and other characteristics of entrepreneurs. The characteristics will differentiate between entrepreneurship and other types of careers (Chaganti et 4



al., 2002). Thus, more studies should be conducted to focus on psychological traits of entrepreneurs such as traits for achieving targeted results, ability to take risk in the business, selfefficacy, locus of self-control and type of personality of the managers in handling a business especially small firm (Poon et al., 2006; Begley and Boyd, 1987).

For this research, we focus more on the personality aspect called work value of the owner managers or CEOs of firms rather than characteristics or psychological traits. In this study, we regard an entrepreneur is an individual who has unique characters and they have different types of personal values. These personal values will influence their decision making process while doing business. However, we could not generalise the result shows the values in entrepreneurs are different from other careers. In this study we follow four dimensional personal work values structure based on the previous studies by Soinenen et al., 2013 and Lyons et al., (2006, 2010) such as intrinsic, extrinsic, status and social values. These four dimensions have been used in the associated literature example study conducted by Phan et al., (2002) to determine the entrepreneurial behaviours among students and their intention to become entrepreneurs. The other studies, which had used the same dimensions, are the study conducted by Hemingway (2005) as well as Wyk and Adonisi (2012) who emphasised on personal values and entrepreneurial behaviours in corporate social entrepreneurship and corporate sectors respectively.

More studies have been conducted to prove the connection between values and behaviours. However, there are no study using the same concept in entrepreneurship and small firm management. Various studies conducted to determine the values that give indirect impact on behaviours through attitudes. This framework had been tested and validated in various context such as studies on consumer behaviours conducted by Homer and Kahle (1988) as well as Shim and Estlick (1998), an environmental study conducted by Cottrell (2003) and a social psychology study conducted by Milfont et al., (2010). In Ajzen’s (1991) Theory of Planned Behaviour (TPB), the role of attitudes had been established in entrepreneurship research since it is widely used. According to this theory, the three elements such as attitudes towards behaviours, subjective norms, and perceived behaviour control will together shape to form of individuals’ behaviour intentions and from the intentions they will be translated indirectly to the actual behaviours.

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In the entrepreneurship theory, the framework showed connection between values, attitudes and behaviours has not far been verified and presented. However, in social psychology research, the framework linking values, attitudes and behaviours is most examined framework (Milfont et al. 2010). The results from the studies showed that values indirectly influence behaviours through attitudes (Defever et al., 2011; Uy 2011). Other study had been conducted using similar cognitive framework in the field of entrepreneurship. It emphasised the relationship between factor of social culture and entrepreneurial activity. It showed that individual values have significance relationship for supporting entrepreneurial behaviour. A study by Okhomina (2010) on EO and psychological traits using supportive environment as moderator found that psychological traits have positive relationship with EO. Other studies established by Gird and Bagraim (2008) and Linan et al. (2011) using the role of attitudes in the filed of entrepreneurship showed that behaviours of individuals will depend on the individuals’ attitudes to the charitable or voluntary behaviour. Personal attitudes of individuals is also the most pertinent factor in explaining the entrepreneurial behaviours. Similarly, the study by Soininen et al., (2013) showed the psychological factors such as values and attitudes have connection or relationship to the entrepreneurial behaviours.

Based on the previous studies discussed, it is proven that both values and attitudes are the main factors or predictors to entrepreneurial behaviours. Since entrepreneurship theory is still lacking for the study using values attitudes behaviour framework, we conducted the research to fill the gap. However, our study focus more on local context, Malaysia. We use attitudes as mediating variables between values and behaviours in the context of entrepreneurship.

1.3 SIGNIFICANCE OF STUDY Soinenen et al. (2013) in Finland have conducted the same study; based on the study they have suggested that the same study to be constructed in other country. Motivated from that we have conducted this study. Other than that, there is inadequate information within previous literature in Malaysia on EO in SMEs, especially those that focus on the value-attitudes-behaviour approach of entrepreneurs. The understanding of EO behaviours in SMEs in Malaysia is very important, as the role of owner managers or CEOs is a vital factor to ensure the success of firms. Due to the lack of research in Malaysia that can provide the right information on the personal work value and EO 6



behaviours in SMEs, the researchers are motivated to pursue the investigation in Malaysian context to develop understanding of EO behaviours from Malaysian perspective focusing on SMEs. We believe that it is important to conduct research from the local context or in the real environment in order to examine and identify key of value-attitudes-behaviour approach that are best suited with the local context.

This research should provide the reference to institutions, which provide funding to SMEs by putting the right focus on the key of value attitudes behaviour approach that has positive influence on EO behaviours. This research provides a baseline for relationship between the work values and EO behaviours mediated by attitudes of the owner managers or CEOs of SMEs. This research shall also provide important reference for funder organisations or SMEs specifically to understand EO behaviours and its relationship with value attitudes behaviour approach. At the same time, it is expected that this study will provide new updated data and information with respect to studies on EO in SMEs. It also provides empirical evidence for testing the concept of EO that was tested in other countries thus expending the test to local context.

1.4 PROBLEM STATEMENT In small companies, EO behaviours require work values as critical influencing factors to ensure the growth and survival of the companies. Although there is high percentage of companies, which are interested in committing to EO behaviours, they are still unsure about work values and attitudes that would facilitate EO behaviours thus causing non-effective EO behaviours. Focusing work value and attitudes within the local context and environment is important for effective EO behaviours. Proper assessment on work values is required for SMEs to ensure that the right focus and investment in terms of resources and time used. The present research shall address this problem by providing understanding on various work values from past researches through evaluation of the relationship between work values and EO behaviours mediated by attitudes as to identify the key work values based on EO behaviours in SMEs in Malaysia. A research model of work values that constitute these findings is developed to provide a single overview work values and its relationship with EO behaviours. Therefore, this research shall provide theory validation supported by real data 7



thus providing a reference for small firms or funding agencies to help formulate appropriate method to evaluate the owner manager of company to build competitive advantage. More research is required to focus on the owner managers’ or CEO’s personality in clarifying EO. Thus we have conducted the research on the owner managers’ or CEO’s personality in clarifying EO in SMEs in Malaysia.

1.5 RESEARCH OBJECTIVE Based on the previous discussion on the significance of research and problem statement, this study seeks and evaluates the relationship between EO and value attitudes behaviour approach in SMEs. In summary, the following are the research objectives developed for this research:

RO1: To increase the understanding of EO in SMEs which is an important factor in enhancing firms’ ability to succeed.

RO2: To determine the relationship between personal work values and EO behaviours.

RO3: To determine the relationship between personal work values and EO behaviours mediated by attitudes.

1.6 RESEARCH QUESTIONS Resulting from the significance of research, problem statement and research objectives, this research seeks to identify the relationship between personal work values, attitudes and EO behaviours in SMEs. In summary, the following are the research questions developed for this research:

RQ1: What are the EO behaviours in SMEs that are the important factors in enhancing firms’ ability to success? 8



RQ2: What are the relationship between personal work values and EO behaviours?

RQ3: What are the relationship between personal work values and EO behaviours mediated by attitudes?

In summary, this section develops the three research objectives and the three corresponding research questions that will form the basis for data collection and data analysis to address the research problem. Following are the discussion on the hypothesis developed for this research and the key operational terms used in this research.

1.7 HYPOTHESIS DEVELOPMENT In this research, directional hypotheses were developed for further evaluation. Following are the hypotheses for this research:

1.7.1 Work Values (Intrinsic, Extrinsic, Status and Social)

There are several typologies of work values; however, only two fundamental type of values has appeared to be consensus. First typology is intrinsic, cognitive, immaterial or expressive values related to the psychological pleasures or satisfaction such as the challenges that workers face in their work, motivation to the self-development, variety and multi-tasking in their work, high intellection simulation in themselves. The entrepreneurs that have intrinsic values doing the job because of their intuition and satisfaction may not be influenced by the external factor. Second, extrinsic, instrumental or material values related to the psychology such as better compensation or benefit that they can get from their job. The tendency is more on the security, comfort and assurance (Lyons et al., 2010; Vinken, 2007; Elizur, 1984). The other types of values are status, altruistic and social. Reputation is related to the status, influence, power and position in firms. Altruistic is referring to the willingness to help each other and give contribution to the society. The social values refer to the relationship among workers (Lyons et al., 2010).

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In classifying the entrepreneurs, work value dimensions like work expectations have been used. The most famous typology used is craftsman versus opportunistic (Smith, 1967). The craftsman is defined as low involvement and interaction socially. When starting the business, entrepreneurs desire for autonomy rather than good achievement and financial status (Katz, 1994). According to Getz and Petersen (2005), small family business is considered as craftsman entrepreneurs. This type of entrepreneur is risk averse, as they need to consider security of the family before making any decision venturing into opportunity to grow their business. In the perspective of family business, there is a previous study suggested that extrinsic and social are not significant with EO. The breadwinner sees the business as sources of the family income, reputation and platform carrier for their current and future generations. Thus, this type of identity is not significant with EO. Otherwise, the identity for entrepreneurs has been defined as growth oriented, innovative, proactive and risk taking. This concept suggests that intrinsic and work values are associated with EO behaviour.

On the other hand, the opportunistic entrepreneurs are more acceptable and tolerable with risks; profit oriented and have more intention to drive the firm towards growth. They are also capable to plan and implement a good strategy for their firms to ensure the firms have competitive advantages. To ensure their firms’ growth and expansion, they have proper planning towards the better future. Opportunistic entrepreneurs also desire better compensation and benefit and also status for their work (Lafaunte and Salas, 1989). Westhead and Wright (1998) suggested that an individual who has decided to choose entrepreneurship as a career and expected greater compensation or to get better status is more likely an opportunistic entrepreneur.

Thus, our hypothesis is as follows:

H1a - Intrinsic has positive effect on EO Behaviour H1b - Status has positive effect on EO Behaviour H1c – Extrinsic has negative effect on EO Behaviour H1d – Social has negative effect on EO Behaviour

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1.7.2 Altitudes (Growth and Survival)

For this hypothesis, we predicted the attitudes of the owner managers or CEOs of firm are associated with EO. In the early typology of small business owner-managers, the relationship between growth attitudes and EO behaviours has been recognised. The word “entrepreneur” has frequently been used to justify the ability of managers to ensure and achieve firm growth. According to Carland et al., (1984), the definition of “entrepreneur” is different from the “small business owners”. Entrepreneurs use the combination of innovation in their resources purposely to achieve more profit and growth. The small business owners venturing into business to generate more personal goal and additional family income.

A study to determine the psychological characteristics on both of these types showed that an entrepreneur has more motivation in achievement of the better result, more risk taking tendency and prefer to use innovation in their implementation process (Steward et al., 1998). Based on the study, it is natural to assume that there are relationship between growth attitudes and all dimensions of EO behaviours. However, there is a contrary effect for the survival attitudes to EO. The entrepreneurs who have survival attitudes are more conservative and are satisfied in their comfort zone, not willing to take any risk. These situations normally happen to more established firms. In terms of survival of the firms, the first three years is the critical time to them and small businesses have higher risk to failure compared to big firms (Davidsson and Dutia, 1991; Littunen, 2000; Storey and Wynarczyk, 1996). Thus, to ensure the established firms’ survival for the long term, the role of owner managers or CEOs who have good personality and values is the most important (Ciavarella et al., 2004). Therefore, our hypothesis is as follows: H2a – Attitudes towards firm’s growth has positive effect on EO Behaviour H2b - Attitudes towards firm’s survival has negative effect with EO Behaviour

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1.7.3 Values and EO mediated by Attitudes

Previous studies showed different results for the attitudes to growth and survival among entrepreneurs. For certain entrepreneurs, growth is not necessary for their firms, survival is often sufficient for them (Gundry and Welsch, 2001; Nummela et al., 2005; Wiklund et al., 2003). Based on that, there are differences of the levels of work values among entrepreneurs. The different levels of work values will affect the strategic implementation of firms. The owner managers or CEOs who have strong attitudes have the possibility to achieve more profit in the business. The profit will be used in the expansion and development of their firms. The manager who has these attitudes has been recognised as a successful manager. This behavior or value will give positive impact to the firm (Poutziouris et al., 1999). Thus, we expect intrinsic and status work values are associated to growth attitudes. For the entrepreneur who is more interested in survival can be expected to be more driven by social and extrinsic work value as they venture into business to provide adequate income for their own family (Getz and Petersen, 2005; Miller and Le Breton-Miller, 2011).

Thus, our hypotheses are as follow: H3a – Intrinsic has positive effect on the attitudes towards firm’s growth H3b – Status has positive effect on the attitudes towards firm’s growth H3c – Extrinsic has positive effect on the attitudes towards firm’s survival H3d – Social has positive effect on the attitudes towards firm’s survival H4a - Intrinsic has positive effect on EO mediated by attitudes towards firms’ growth. H4b – Status has positive effect on EO mediated by attitudes towards firms’ growth. H4c - Extrinsic has negative effect on EO mediated by attitudes towards firms’ survival. H4d - Social has negative effect on EO mediated by attitudes towards firms’ survival.

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Table 1.1 Summary of hypothesis constructs and sources of Literature Items

Hypotheses and constructs

Sources

Work Values

H1a - Intrinsic has positive effect on EO Behaviour

Lyons et al., 2010

EO Behaviour

H1b - Status has positive effect on EO Behaviour

H1a-H1d

H1c – Extrinsic has negative effect on EO Behaviour H1d – Social has negative effect on EO Behaviour

Attitudes

H2a – Attitudes towards firm’s growth has positive effect on Ciavarella et al.,

EO Behaviour

EO Behaviour

H2a-H2d

H2b - Attitudes towards firm’s survival has negative effect Steward with EO Behaviour

2004; et.

al.,

1998

Work Values

H3a – Intrinsic has positive effect on the attitudes towards Poutziouris et al.

Attitudes

firm’s growth

H3a-H3d

H3b – Status has positive effect on the attitudes towards

(1999),

firm’s growth H3c – Extrinsic has positive effect on the attitudes towards firm’s survival H3d – Social has positive effect on the attitudes towards firm’s survival

Work Values

H4a - Intrinsic has positive effect on EO Behaviour mediated Soininen

Attitudes

by attitudes towards firms’ growth.

EO

H4b – Status has positive effect on EO Behaviour mediated

H4a-H4d

by attitudes towards firms’ growth.

et.al.,

2013

H4c - Extrinsic has negative effect on EO Behaviour mediated by attitudes towards firms’ survival. H4d - Social has negative effect on EO Behaviour mediated by attitudes towards firms’ survival.

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1.8 OPERATIONAL DEFINITION The following definitions describe the key terms that are used in this study to further clarify the problem statement, research objective, research questions and scope of work. The definitions provide explanations and descriptions of the variables used in the context of this study that are specifically on work values and entrepreneurial behaviour.

1.8.1 Entrepreneurial Orientation (EO) EO is defined as a “strategic construct whose conceptual area includes outcome of the company, and management strategies and related preferences, beliefs, and behaviours as expressed among a management level of the firm” (Covin et al., 2006).

1.8.2 Behaviour

Behaviour is defined as a fundamental value conforming to attitudes in people (Connor and Becker, 2003).

1.8.3 Work Values The definition of work values is “generalized beliefs about the desirability of certain attributes of work and work-related outcomes” (Lyons et al., 2006, p. 607).

1.8.3 Intrinsic and Extrinsic The definition of intrinsic is “expressive values pertaining the characteristics of psychological satisfactions of work such as challenge, variety, self-development, or intellectual stimulation. Extrinsic is defined as the material values related such as compensation, benefits from job, job security and assurance, and comfort” (e.g. Lyons et al., 2010; Elizur, 1984; Vinken, 2007). 14



1.8.4 Status and Social

The definition of status is expressive of prestige values relating to position, inspiration, influence and power and social values relating to affective relations with other people (Lyons et al., 2010).

1.8.4 Attitudes

An attitude is "a relatively enduring organization of beliefs, feelings, and behavioural tendencies towards socially significant objects, groups, events or symbols" (Hogg, & Vaughan 2005, p. 150).

1.8.5 Growth Attitudes The growth attitude is defined as “the degree to which the entrepreneurs intended to engage in specific strategies to increase and expand their businesses”. The activities measured under growth attitudes included offering a new product or service, expanding operations to new customer target groups, and aiming at growth without risking or jeopardising profitability (Soininen, et.al., 2013). 1.8.6 Survival Attitudes The survival attitude is defined as “the degree to which entrepreneurs pursue stability. The items included satisfaction with the current size of the firm and the aim to keep the operation of the firm” (Soininen, et.al., 2013).

15



2 Literature Review CHAPTER OUTLINE This section presents the literature review on Entrepreneur Orientation (EO) behaviour that contributes to the success of SMEs. The first section covers literature review on the definition and concept of EO to understand the background theories related to EO and to discuss from the perspective of the benefits and the importance of EO in SMEs. Then in the second section, we shall look at the definition and concept of work values, which are the influencing factors that in the past literature have shown strong relationship with the success of EO behaviour. In the third section, the literature reviews shall touch about EO mediated by attitudes within the context of SMEs in Malaysia and how this research is significant to fill the gap of existing EO research in Malaysia.

2.1 THE CONCEPT OF ENTREPRENEURIAL ORIENTATION (EO) Many studies have been conducted to investigate the theory of “entrepreneurial orientation” (EO). Based on the study it is shown that the theory of EO has wide recognition of the theoretical significance and acceptable of the concept.

Miller conducted the first research of EO in 1983. The dimension of the EO has been divided by three categories namely innovativeness, proactiveness, and risk taking. Innovativeness refers to creativity process to develop new products or services and continue doing the Research and Development (R&D) to ensure they are technological leadership in new processes or services. Risk taking is when the company has decided to venture into the unknown, to start their project or company they borrow money and commit to unclear situations. Proactiveness is defined as a chance to pursue new opportunity, act before the competitors do and always introduce new products or services.

16



For risk taking, it is divided into three different types of strategic actions namely, the action taken by firms to invest or venture into the unknown, the action of borrowing the capital for the early start-ups of firms as well as the action of committing to the large portions of business properties in uncertain environments. Firms with strong EO always show high risk taking behaviour. They do not afraid to invest using their maximum resources to obtain high return. They position themselves by taking opportunities, which benefit their firms. The firms also carry heavy debts to ensure the firms have more resources. (Lumpkin and Dess, 1996). Proactiveness has been described as an opportunity-seeking, substituting in anticipation for future demand and looking forward to the perspective characterised by the introduction of new products or services ahead of the competition (Rauch et. al.,2009).

Besides the three dimensions that have been used, there are two other dimensions for EO namely competitive aggressiveness and autonomy. Both of the dimensions are silent components. Not many researchers use these two components in their research. For example, a study was conducted by Rauch et. al. (2009), showed that only one study had used all these five dimensions of EO and 29 studies had used the three dimensions. The definition of competitive aggressiveness is a strong action of firms to face their competitors. Normally they will act before competitors do and they have aggressive attitudes. Autonomy is defined as a normal or free action by entrepreneurs or workers to develop their business process. The business process will normally be created from the beginning until the end of the process (Lumpkin and Dess, 2001).

Even though there are five dimensions of EO, most EO studies used three dimensions suggesting that the scale developed by Colin and Slevin (1989). According to Andersen (2010) and Vora et al., (2012), this is the most common in EO literature. The examples of the studies that used the three dimensions of EO are Covin et al., 1990; Covin et al., 1994; Slater and Narver, 2000; Bhuian et al., 2005; Wiklund and Shepherd, 2005. For this research, we choose to use three dimensions of EO like the majority.

Even though, the researchers have agreed to the consensus of dimensional EO, there are controversies among them about the definitions of EO. For example, Covin and Lumpkin have highlighted that the definition of EO remains unclear whether it should be known as natural 17



character or behavioural phenomenon. In other studies, by Covin and Slevin (1991) as well as Wales et al., (2011), mentioned that behaviour is the important element in the entrepreneurship process. They also suggested that non-visible elements relating to firms’ disposition to entrepreneurship may be related to EO. Thus, those elements should not describe EO. In this research, we disposition the characteristics for as predictors of EO behaviours. The characteristics that we use such as personal work values, growth and survival attitudes.

2.2 THE WORK VALUES AND ENTREPRENEURIAL ORIENTATION (EO) The definition of work values is “generalized beliefs about the desirability of certain attributes of work and work-related outcomes” (Lyons et al., 2006, p. 607). In general, work values is also human values which is relatively enduring in humans and they are in individuals’ minds (Lyons et al., 2010) and acting as a criterion when individuals make important decisions especially relating to work. There are several typologies of work values; however, only two fundamental types of values had appeared to be consensus. The first typology is intrinsic, cognitive, immaterial or expressive values related to the psychological pleasures or satisfaction such as the challenges that they face in their work, motivation to the self-development, variety and multi-tasking in their work, high intellection simulation in themselves.

Entrepreneurs who have intrinsic values love doing their jobs because of their intuition and satisfaction are not influenced by the external factors. Secondly, extrinsic, instrumental or material values related to the psychology that the material values such as better compensation or benefit that they can get from their job. The tendency is more on the security, comfort and assurance (Lyons et al., 2010; Vinken, 2007; Elizur, 1984). The other type of values are status, altruistic and social. Reputation is related to the status, influence and power as well as position in the firm. Altruistic refers to the willingness to help each other and give contribution to the society. The social values refers to the relationship with people (Lyons et al., 2010).

Hemingway (2005) conducted a study to review the psychology through intentions and attitudes. Based on the study, she summarised that there are lot of universal themes emerging from literature, 18



which mentioned that value is the main driver influencing the behaviour of entrepreneurs through instrumental beliefs such as desires, attitudes or intentions. The impact to the values in entrepreneurs resulting in good strategies of firms to achieve growth performance. There are several studies that supported the crucial role of values in the attitude formation and following behaviour in entrepreneurs or business managers (England 1967; Meglino and Ravlin 1998; Oliver,1999). However, there are a lack of studies conducted to determine the relationship between values and EO.

Studies on work values is limited in the entrepreneurship and small business literature. In these studies, normally the scholars use work values as predictor in career choices. For example, a study conducted by Fagenson (1993) on the business owners and other careers showed that business owners show higher level of intrinsic values. Work values are not only mere factors influencing EO behaviours but also relating to strategic business implementations in firms such as performance and growth of firms (Singh, 1989), as well as the ability to adapt to changes and rigidity (Smith and Miner, 1983). Other than that, there are studies that found contradictory results with others (Olson and Currie, 1992).

In classifying the entrepreneurs, work value dimensions like work expectations have been used. The most famous typology used is craftsman versus opportunistic (Smith, 1967). The craftsmen have low involvement and social interaction. When starting the business, they desire for autonomy rather than good achievement and financial status (Katz, 1994). According to Getz and Petersen (2005), small family businesses are considered as craftsman entrepreneurs. This type of entrepreneur is risk averse as they need to consider security of the family before making any decisions venturing into opportunity to grow their business. In the perspective of family business, there are previous studies suggested that extrinsic and social are not significant with EO. The family breadwinner sees the business as sources of the family income, reputation and platform career for their current and future generations. Thus, this type of the identity is not significant with EO. Otherwise, the identity for the entrepreneurs is growth oriented, innovative, proactive and risk taking. This concept suggests that intrinsic and work values are associated with EO behaviours.

19



While, the opportunistic entrepreneur is more acceptable and tolerable to risk, profit oriented and have more intention to drive firms towards growth. They are also capable of planning and implementing a good strategy to the firm to ensure the firm has competitive advantage. To ensure their firms’ growth and expansion, they have proper planning towards to the better future. Opportunistic entrepreneur also desires the better compensation and benefit and also status for their work (Lafaunte and Salas, 1989). Westhead and Wright (1998) suggested that individual who’s decided to choose entrepreneurship as a career and expected greater compensation or to get better status is more likely an opportunistic entrepreneur.

2.3 ATTITUDES TO GROWTH AND ENTREPRENEURIAL ORIENTATION (EO) Values is defined as “abstract of ideas (Rekeach, 1973), whereas attitudes as dispositions towards certain objects and situations” (Connor and Becker, 2003). There are substantial studies in entrepreneurship research conducted for attitudes. Attitudes have been widely studied in entrepreneurship research and most particularly in studies applying the TPB (Ajzen, 1991). In Ajzen’s (1991) TPB, the role of the attitudes has been established in entrepreneurship research. According to this theory, the three elements such as attitude towards behaviour, subjective norms, and perceived behaviour control will together shape to form of individuals’ behaviour intentions and from the intentions it will be translated indirectly to the actual behaviours. Attitudes can also be defined as what people believe and feel about something or someone. In the entrepreneurship literature, the common of TPB application is to determine attitudes and intentions to choose entrepreneurship as a career compared to the other careers (Engle et al., 2010).

Other than that, it is also used as strategic orientations such as in marketing perspective (Guido et al., 2011). In small firms, all the entrepreneurial activities depend on the owner managers, who are usually informal in their business activities. Thus, we propose the intentions as a mediating variable between attitudes and EO to be examined (Fini et al., 2012). In SMEs, the role of the owner managers or CEOs is considered as important as the owner managers or CEOs need to decide the strategic implementations and business activities of their firm. In order to achieve survival and growth of firms in the long term, entrepreneurs must have behaviour instruments like 20



innovation, risk taking, and proactiveness. These instrumental behaviours can be considered as important factors in achieving the objective of firms. Thus, we propose entrepreneur attitudes towards survival or growth is one of the important factors to determine EO.

In the early typology of the small business owner-managers, the relationship between growth attitudes and EO behaviour has been recognised. The word “entrepreneur” had frequently been use to justify the ability of managers to ensure and achieve growth of the firm. According to Carland et al., (1984), the definition of “entrepreneur” is different from the “small business owners”. Entrepreneurs use the combination of innovation in their resources purposely to achieve more profit and growth. Small business owners venture into business to generate more personal goal and additional family income. A study to determine the psychological characteristics on both of these types showed that entrepreneurs have more motivation in achievement of the better result, more risk taking tendency and prefer to use innovation in their implementation process (Steward et al., 1998). Based on the previous study, it is natural to assume that there are relationships between growth attitudes and all dimensions of EO behaviour.

However, there is contrary effect for the survival attitudes towards EO. The entrepreneurs who have survival attitudes are more conservative and satisfied in their comfort zone as well as not willing to take any risk. These situations normally happen to more established firms. In terms of survival of firms, the first three years is the critical time to them and small businesses have higher risk to failure compared to big firms (Davidsson and Dutia, 1991; Littunen, 2000; Storey and Wynarczyk, 1996). Thus, to ensure the established firms to survive for the long term, the role of owner managers or CEOs who have good personality and values are most important (Ciavarella et al., 2004).

21


2.4

THE


RELATIONSHIP

BETWEEN

WORK

VALUES

AND

ENTREPRENEURIAL ORIENTATION (EO) A study was conducted by Soininen et.al. (2013) to investigate relationship between EO and work values. The focus of the study is to raise the understanding of EO behaviours for managers in small firms and the relationship between work values (extrinsic, intrinsic, and social and status) and EO mediated by attitudes. Based on the study, they found that work values and EO mediated by attitudes have positive relationship. The other study investigated the relationships between values and EO showed that the behaviours of owner managers depend on the personal attitudes. This factor will impact the actions and strategic planning of firms. Other than, the result showed that the owner managers’ attitudes are more towards volunteer behaviours (Ciavarella et. al., 2004). Thus, this study confirmed the important role of psychological factors such as values and attitudes as antecedents of entrepreneurial behaviours.

The previous studies conducted on EO normally investigated the relationship between EO and achievement or performance of firms. The results of the studies found the relationship have been positive. A study conducted by Fabian et al, (2013) to investigate the relationship between the implication of customer and EO for SME growth showed higher scoring on EO and less scoring of customer orientation towards to the growth of companies. There are also studies investigating the importance of EO in surviving through times during economic crisis. A lot of researches on EO have been conducted to study organizational, environmental, or demographic factor that foster entrepreneurial behaviours such as gender, level of academic qualification and age. However, less studies investigate the antecedents on EO (Morris et al., 2007; Zahra, 2013).

A study was conducted by Harry et al., (2010) on EO of public enterprises or Government-linked companies (GLCs) in Malaysia to find out which of these companies have demonstrated EO capabilities. Based on the study, they found that the GLCs have established certain grade of EO such as driving a strong weight on proven marketing strategies and also focusing more on the R&D initiatives. Other than that, they found low level of proactiveness and propensity to low risk projects with confidence of return. 22



2.5 THE MEDIATING ROLE OF ATTITUDES BETWEEN WORK VALUES AND ENTREPRENEURIAL ORIENTATION (EO) In the value-attitudes-behaviour context, behaviour is eventually the fundamental value conforming to attitudes in people (Connor and Becker, 2003). Dempsey (2009) explained that value is resulted from the attitudes that influence certain behaviours. In order to determine human behaviour, there are many studies have been conducted to focus on attitudes as a clarifying feature of human behaviour. These empirical studies have been tested in a diversity of area. For instant, in management study, a researcher had investigated the work related context between the salesman and faculty members. The results found that job related attitudes are associated with behaviours (Alexander, 1977). Another study conducted on the influence of personal values on career attitudes found that there are direct effects on people’s career with job related behaviour (Shim et. al., 1999) To determine the mediating role of attitudes between values and EO, the studies in consumer behavior have been conducted (Shim et. al., 1999). In this study, the researcher focused in two context of consumerism such as natural food shopping and online grocery purchase. Based on the study, the results found that the attitudes of consumers mediate the relationship between values and behaviours. According to a study by Shim and Eastlick (1998), real mediating factors like domain-specific attitudes only give indirect effect on behaviours. Moreover, the model has been tested in the environmental context and tested the cross culture strength and validity and provided realistic support for using this model across cultures (Dembkowski and Hanmer-Lloyd, 1994; Cottrell, 2003; Milfont et al., 2010).

Previous studies showed different results for the attitudes to growth and survival among entrepreneurs. For certain entrepreneur, growth is not necessary for their firms, survival is often sufficient for them (Gundry and Welsch, 2001; Nummela et al., 2005; Wiklund et al., 2003). Based on that, there are differences in the levels of work values among entrepreneurs. The different level of work values will affect the strategic implementation of firms. Owner managers or CEOs who have strong attitudes have the possibility to achieve more profit in the business. The profit will be used in the expansion and development of their firms. The managers with these attitudes have been recognised as successful managers. This behaviour or value will give positive impact to firms 23



(Poutziouris et al., 1999). Thus, we expect that intrinsic and status work values are associated with growth attitudes. For entrepreneurs who are more interested to survival can be expected to be more driven by social and extrinsic work value as they venture into business to provide adequate income for their own family (Getz and Petersen, 2005; Miller and Le Breton-Miller, 2011).

24



3 Research Methodology and Design CHAPTER OUTLINE This section defines the research framework and hypotheses development of this research. It commences with introduction and discussion on theories underpinning the framework and followed on with the hypotheses development. The primary interest of this research is the relationship between EO behaviours and work values that consist of intrinsic, extrinsic, status, and social as the independent variables with EO as dependent variables and attitudes as the mediator that consist growth and survival. The degree of values and attitudes influence on EO behaviours is examined within the research context. The conceptual framework is then illustrated to show the overall view of the relationship. This chapter identifies and describes the appropriate research methodology that has been designed for this research to achieve the research objective and to Analysis the answers to the research questions advanced in this research. This chapter also provides justification for the research paradigm and methods selected.

3.1 UNDERPINNING THEORY For this study we use the theory of planned bahavior (TPB). In physology, this theory explained the relations between beliefs and behaviour. This theory was proposed by Icek Ajzen (1991). This theory was created to improve on the predictive control of the theory reasoned action by comprising perceived behaviour control. This theory holds that, the three elements such as attitudes towards behaviours, subjective norms, and perceived behaviour control will together shape to form of individuals’ behaviour intentions and from the intentions they will be translated indirectly to the actual behaviours.

25



3.2 CONCEPTUAL RESEARCH MODEL Based on the theory selected and hypotheses developed, the conceptual research model for this research is developed as illustrated in Figure 3.1. The conceptual research model shows the relationship between the identified work values with EO behaviours.

Mediating Variable (MEV)

ATTITUDES - Growth - Survival H3

WORK VALUES - Intrinsic - Status - Extrinsic - Social

H2

H4

BEHAVIOR - EO

H1

Independent Variable (IV’s/X’s)

Dependent Variable (DY/Y)

Figure 3.1: Framework of Study

3.3 SCOPE OF RESEARCH Since research in EO has a broad focus, it needs to be constrained in terms of both its scope and extent due to time and cost constraints of this research. This section outlines three scopes related to this research including SMEs in Malaysia as respondents, work values and attitudes and EO behaviours.

26



3.4 RESEARCH APPROACH Since this research focuses on work values in the local context, it is necessary to have small firms as sources of data. The perspective of the research is to highlight the EO behaviours as an important matter in small firms’ ability to succeed. This research adopts the quantitative research method as the appropriate research approach due to the following reason: i.

The research questions of this research mainly focus on the ‘what’ question (Creswell, 2012)

ii.

From literature review, the variables for this research were identified by previous researchers and this research sets out to investigate it in Malaysian context (Soininen et. al., 2013).

iii.

The nature of the research process of this study can be described as focused since it is limited to the investigation of known variables which intend to be measured in terms of its magnitude (Creswell, 2012).

iv.

This research also focuses on contemporary events, which appears that an investigation of the present situation of work values and EO in SMEs in Malaysia is appropriately addressed by using survey as the tool for quantitative research (Creswell, 2012).

v.

Quantitative approach can eliminate the drawback of subjective judgments (Creswell, 2012).

vi.

Prior studies investigating work values in several SME contexts were reviewed and quantitative research was adopted (Soininen et. al., 2013).

vii. Survey consists of elements defining and specifiying the variable elements (Chauvel and Despres, 2002). viii. The results have been analysis using SPSS (Chauvel and Despres, 2002).

3.5 POPULATION AND UNIT OF ANALYSIS The unit of analysis for this research is the management of the SMEs specifically the shareholders, directors and Chief Executive Officer (CEO) of the companies selected.

27



3.6 SAMPLING TYPE Sampling frames for this research is the subset of SMEs in Malaysia, which was selected using convenience and snowball, sampling. Due to time and resource constraints, this research has generalized the scope of population of interest; in which SMEs as representative of the entire population and as common sampling frame. This is due to the common characteristics identified for the research (Creswell, 2012) which is the owner managers or CEOs of SMEs in Malaysia. We believe that this approach is most likely to represent the target population.

3.7 SAMPLING PROCEDURES The target of sample for this study is the owner managers or CEOs of SMEs in Malaysia. This is based on the understanding that owner managers or CEOs of companies can give the accuracy and assurance of the results. The sampling procedure chosen for this research is convenience sampling including snowballing approach; which was chosen based on its practicality to be used in the selected sampling frame.

For convenience sampling, the samples identified are the SMEs

companies in Malaysia that are relatively reachable and accessible by researchers. In addition to this, we sought the assistance of the identified samples to distribute the survey to other owner managers of SMEs as part of the chain-referral method for contacting respondents; which is using snowball sampling. Snowballing relies on the fact that the first sample or respondents is likely to know others from similar group that the author describe as the target respondents for the survey (Bernard C. B. and Maureen A.M., 2012). Utilizing this method is targeted to improve the speed for data collection and improved response rate.

3.8 SAMPLE SIZE AND POWER ANALYSIS The process of determining the correct sample size is crucial for the research and it is not easy to decide. The correct number ensures good sample for its adequacy and representativeness. Adequacy of sample is reflected in its ability to make accurate inferences and generalization from the sample statistics to the population under studied. The size of sample should be large to allow 28



researchers to predict the population parameters within acceptable limits. Studies with samples that are too large may place respondents at risk, waste their time, and misuse other resources, such as professional time and scarce research allocations. Accordingly, researchers should focus on determining the smallest necessary sample size (Dattalo P, 2009). Therefore, it is important to determine the ideal sample size that is representative sample of the population with the goal to design a high-quality study. The problem with the sample size is context-dependent and it is not always the main issue; however, it becomes issues usually when a lot of time required for collecting the sample size (Lenth R.V., 2001). Due to the cost of studying an entire population usually is prohibitive to both researchers and those being studied in terms of privacy, time, and money (Dattalo P, 2009), the researchers decided to take the approach of selecting a sample from the target population with the goal of collecting samples that provide a practical and economic mechanism to enable extrapolation from a sample to a population and using the size of a sample as an important element in determining the statistical precision which population values can be estimated (Dattalo P, 2009). Therefore, for this research the sample size is determine using power analysis.

Power analysis has been chosen as the statistical results are trustworthy when power is high (Maxwell S. E., 2008) (Maxwell S.E, Kelly K., and Raush J.R, 2008) and relationship between sample and accuracy may be clarified by the use of the concept of statistical power (Dattalo, 2009). The concept of power is relevant in the context of hypothesis testing, which is applicable for this research. It is one of the most popular approaches to sample size determination involves studying the power of a test of hypothesis ( (Dattalo, 2009); (Lenth, 2001). Definition of power is the probability of rejecting the null hypothesis when a particular alternative hypothesis is true. It is the likelihood that the study will accurately detect an effect and power is one of four possible outcomes that can occur when we conduct hypothesis testing (M., Bernard C. B. and Maureen A., 2012). Power analysis is influenced by the sample size, significance level, effect size, and error variance (M., Bernard C. B. and Maureen A., 2012). The significance level is by assigning the alpha at .05, which is the maximum allowed Type I error. The effect size indicates the size of the effect in the population and the error variance shows the amount of variation in the outcome

29



Based on study done by Patrick Dattalo (2009), he has evaluated software for sample size determination and has suggested G*Power software for researchers who prefer a comprehensive, free program for statistical power analysis. G*Power software created by Prof. Dr. Edgar Erdfelder from University of Mannheim provide a web based tool that is cost free with analytical capabilities especially for computing sample size. For this research, G*Power was used to determine the sample size based on “A priori” calculation to compute sample size based on given error probability (α), power (p) and effect size (f2) (Faul F., Erdfelder E., Lang A-G and Buchner A., 2007). For this research, the G*power calculation to determine the sample size shall use power value of 0.95 which is higher than 80% (which .8) that corresponds to large effect size 0.4 based on Cohen standardized effect sizes popularized by Cohen (Cohen, 1988). The significance level or probability (α) is set at the 5% (α = .05) (Prajapati B., Dunne M. and Armstrong, R., 2010). The sample size is calculated based on omnibus model with 17 predictors of the independent variables (refer to section 3.1 for details); in result, total sample size computed is 88 samples. Refer to Appendix A for the G*power calculation interface for sample size calculation.

3.9 QUESTIONNAIRE DESIGN AND INSTRUMENTATION The questionnaire includes of confirmed items mainly used in earlier studies. The population consisted of the owner managers or CEOs of SMEs. The data had been analysed in a various industry background, for greater generalisation. There were 500 firms recognized from various database of Government Link Companies (GLCs) in Malaysia and snowball sampling of 300 companies were drawn. The cover letter with the survey questionnaire will be mailed to owner managers or CEOs. We have targeted to get minimum feedback from 120 companies. If we do not achieve the minimum target, the remaining letters will be sent to owner managers or CEOs who had not replied within two weeks. We expected that the last answers received from 120 companies, results an acceptable effective response rate of 40 percent (120/300).

The first section of the questionnaires on demographic profiles, are closed ended questions with categorical and nominal scales, which answers are labelled by the items being measured. For section two and three of the survey, respondents are required to indicate his/her perceived

30



observation to particular statements given, by selecting a rating that is measured based on ordinal scale, 10-point Likert Scale from “Strongly Disagree” to “Strongly Agree”.

The questionnaire that was used as the main form of data collection consisted of questions relating to work values and EO behaviours. The questionnaire is divided into 3 sections as follows: a)

Section 1 contains the demographic information of the respondents or managers such as

age, gender, and qualifications. In total, there are 4 items of questions for this section. b)

Section 2 contains the background of the business such as the number of years the business

has been set-up, business cluster, designation in the company and average revenue of company within 3 years. In total, there are 4 items of questions for this section. Refer to Table 3.1 for the number breakdown based on variables.

c)

Section 3 measures the work values, EO behaviours mediated by attitudes in firms. The

measures of work values (extrinsic, intrinsic, status and social) EO behaviours (innovativeness, proactiveness and risk taking) and attitudes (growth and survival). In total, there are 31 items of questions for this section. (Refer to Table 3.1 for the number breakdown based on variables). For this research, the dependent variables are the EO behaviours such as innovativeness, risk taking and proactiveness. The independent variables are work values such as extrinsic, intrinsic, status and social that influence or affect an outcome or dependent variables (Soininen et.al, 2013). The mediating variable is attitude; consist of growth and survival. These mediating variables are the measured dependent variables in this research.

Table 3.1 shows the total questions in the survey in respect to the variables. The variables are differentiated from the independent variables, which are thought to be the cause and the dependent variable is the presumed to be the effect. (Refer to Appendix B for the survey questionnaire).

31



Table 3.1 List of Variables and Total Questions Variables

Total Questions

Categorical

Demographic Profile (total =4 items)

Scale type = nominal

Age

1

Source = develop by me

Gender

1

Qualifications

1

Year of business set-up

1

Cluster of business

1

Designation on company

1

Average sales within 3 years

1

Independent variables

Work Values

(total = 17 items)

Scale type = ordinal

Extrinsic (EXT)

5

Sources = Soininen et al (2013)

Intrinsic (INT)

5

Status (STA)

3

Social (SOC)

4

Dependent Variables

Entrepreneur Orientation (EO) behaviours (total = 9 items)


Innovativeness (INNO)

4

Source = Soininen et. al (2013)

Proactiveness (PRO)

2

Risk Taking (RISK)

3

Mediating Variables

Attitudes

(total = 5 items)


Growth A (GA)

3

Source = Soininen et..el (2013)

Survival A (SA)

2

For this research, the variables are measured in multi-item scales adapted from established study by Soininen et. al., (2013) that consists of work values, attitudes, EO behaviours, owner manager of SMEs as value attitudes behaviour approach and EO behaviours. Soininen et. al., (2013) used the three measurements of EO hypothesis by Miller (1983). Conceptualisations by Miller (1983) have been used by many researchers as a basis to study EO; which has provided conformance that this model is well accepted and validated in various contexts (past author on previous studies).

32



Therefore, the researchers are satisfied that the variables are deemed to be validated since this study fully adopts the well-known researches in the field of study.

All the multi item constructs for each of the Work Values and its multi items construct questionnaires is as per Appendix C.

3.10 RELIABILITY AND VALIDITY OF MEASURES The main issue concerning validity and reliability focuses on whether the measurement or scale used, measures the right concept and whether the scale is measuring what it is intended to measure consistently (Dennis H. and Duncan C., 2011). Since the instrumentation for this research is survey and it is a cross-sectional study, the reliability is measured using internal reliability to indicate how consistently all of the items in a scale measure the concept in question (Dennis H. and Duncan C., 2011). The reliability test is performed using Cronbach's alpha method as it is the most common measure of internal consistency for reliability and most commonly used in multiple Likert scale questions in survey/questionnaires (Mohsen T. and Reg D., 2011). For Cronbach alpha test, the result will determine if whether the instruments are reliable and consistent.

For this research, 38 questions have been developed to measure work values with each questions a scale of 10-point Likert item from "strongly disagree" to "strongly agree" are used. All these items were analysed to identify its good features and inadequacies for Cronbach’s alpha coefficient that is close to 1.0, which reflect greater internal consistency of the items in the scale (Gliem J.A. and Gliem R.R, 2003). For this research, a higher value of 0.7 Cronbach’s Alpha value on work values was used and for items with the total correlation, less than 0.4 were dropped (Barclayet al., 1995, Hulland, 1999). This is also supported by past studies in EO behaviours that use 0.7 value as a cut point for alpha value (Soininen et al., 2013); thus, the 0.7 level used in this research is an acceptable value.

For validity, two types of validity assessment were performed, which is content validity and convergent validity. For content validity, the researcher is attempting to validate the items of scale, if it covers the important EO behaviours in the context of work values (Dennis H. and Duncan C., 33



2011). For content validity, the items or variables were selected from research literature and established theory in EO, which reflect wide variety of the aspects of work values and EO behaviours being assessed in different contexts of researches. Using diverse means of extracting potential items for inclusion from a wide domain is important; hence enhancing the content validity of the measure (Dennis H. and Duncan C., 2011).

For convergent validation, construct validity was performed using factor analysis in SPSS to evaluate the construct validity of the scale. The varimax rotation factor analysis had been used to identify the factors for each variable and check for uni-dimensionality among items as each variable was measured by multi-item constructs. Uni-dimensionality refers to the measurement of one dimension of the construct; in this research is work values and EO behaviours that were measured by multi-item constructs.

3.11 PILOT STUDY The pilot test was conducted to pre-test the questionnaires. The pre-test of questionnaires is crucial to ensure that the respondents understand the questions, to avoid difficulties to complete the questionnaires and to ensure no problem exist in wordings or measurement (Dennis H. and Duncan C. (2011). The response from the pilot test enabled early rectification on the questionnaires before distributing to larger sample. Based on the population sample frame, 15 respondents were identified for the pilot test. The respondents were selected based on convenience sampling and were considered representing the true population of the sample frame. From the feedback gathered during the pilot test, the researchers received constructive feedback on the clarity of questions and some spelling errors in the questionnaires. Further clarification was made in the questionnaires and correction on the spelling errors was done to ensure that the questionnaires will be well understood to avoid miss-interpretation of the questions. As a result of the pilot test, a refined and improved questionnaires were developed.

34



3.12 DATA COLLECTION METHODS This research employs two methods of data collection, namely primary and secondary data collection. The primary data utilise the collected data from the questionnaires distributed to SMEs in Malaysia. For the secondary data, this research gathered data regarding work values and EO behaviours from academic journals, articles and books from various sources such as online databases of various journals and conference publications especially during initial research phase. From this phase the conceptual and theoretical framework were identified from past researches and a research design was planned according to the information collected from this secondary data collection.

The questionnaires can also be distributed through virtual platform, which involve no cost of transportation with wider distribution range. The primary data in this research were gathered from the structured questionnaires which were distributed to the identified respondents through electronic mail, social interfaces such as Facebook and LinkedIn and also through online communication platform such as WhatsApp Messenger. The respondents were chosen are the owner managers or CEOs of SMEs companies in Malaysia. However, there is problem with email questionnaires in which the response rate cannot usually be calculated accurately (Couper, 2000).

To overcome this, we had personally sent follow-up reminders to the identified respondents in order to obtain feedback. This effort helped to improve the response to the survey as some of the respondents had forgotten to respond or not able to respond at the time the first email or first message sent to them. For the snowballing effect, we had requested the respondents to forward the email to other owner managers or CEOs of SME firm in Malaysia. The total number of surveys that had been sent out based on the selected respondents that we had recognised as part of convenience sampling is 300. Out of 300 numbers of surveys sent to the identified respondents, 120 responses were received which is equivalent to 40 % response rates.

35



3.13 RESEARCH OPERATIONAL FRAMEWORK A research operational framework was developed for this research to provide basic guidelines on how the research will be conducted, planned and controlled. The research is divided into four phases starting from Phase 1 to Phase 4, and for each phase, the activity, objectives, methods and tools, and deliverables were identified. Figure 3.2 illustrates the Research Operational Framework flows of four phases and the details are described in Table 3.2.

Figure 3.2 Research Operational Framework (sources: Developed for this research)

36



Table 3.2 Summary of the details of the Operational Framework Activity for each of the Phase. (Sources: Developed for this research)

37



3.14 DATA ANALYSIS PROCEDURE The aim of data analysis procedures is to obtain the answers to the research questions and four hypotheses that have been developed for this research. The data analysis that will be performed includes 1) descriptive analysis on the demographic profiles of the respondents, 2) reliability and convergent analysis to determine goodness of measures, 3) correlation analysis to identify relationship between variables and 4) lastly multiple regression analysis to determine the size and significant effect of work values on EO behaviours. Correlation analysis was performed by evaluating the direction and the size of the value of correlation coefficient of the relationship between each item in work values and EO behaviours. Spearman Rho Test was use for nonparametric statistic test and for ordinal scale and non-linear distribution data (Chua Y.P., 2012). Multiple regression analysis was performed to test the hypothesis to identify the most influential enablers among the hypothesis tested. The squared correlation coefficient (R2) is a very important statistic to explain the strength of the relationship between two variables.

The squared correlation coefficient (R2) is the value between Y (independent variables) and a set of one or more predictor variables (value of X). All statistical analysis is conducted using statistical program called SPSS software since it is a frequently used professional analysis program (Creswell, 2012; David C.H., 2013). In the next section, data analysis procedure approach applied in this research is further discussed in details.

3.14.1 DATA SCREENING AND CLEANING Prior to performing data analysis using SPSS software, we had reviewed the data to check for any issue or error that could have exist in the data as final check although the answers that has been set on the questionnaire survey format are fixed and compulsory. The data were then inspected for values that are outside the accepted range by visually inspecting the data grid (Creswell, 2012). For this research, for any answer that the respondents who are not the owner managers or CEOs of the company will be removed from data analysis. This is to ensure all responses are coming from common respondents’ characteristic, which are from owner managers or CEOs of the SMEs 38



in order to generalise the results. The data was keyed-in SPSS software and carefully checked before analysis was conducted.

In this research, a few items or questions represented each of the variables. We computed these items in each variable to obtain the mean ratings that represent the variables and these mean ratings should be used in data analysis. The calculation was performed in SPSS using compute operation to obtain the mean ratings for variables that are formed by few items or components. (Chua Y.P., 2012).

3.14.2 DATA DISTRIBUTION We performed data distribution analysis to derive the probabilities of the samples that came from a normally distributed population. The most important distribution is normal distribution because many of the dependent variables are commonly assumed to be normally distributed in the population and if we were to obtain the whole population of observations, the resulting distribution would closely resemble the normal distribution (David C. H., 2013).

For this research, the normality test performed were Kolmogorov-Smirnov and Shapiro-Wilk test, Skewness and Kurtosis test. Values of scenes measure the symmetry of the distribution, and Kurtosis measures the peakedness of distribution, are generally interpreted together. The value for Skewness and Kurtosis distribution of (+/-) 1.96 shows normal distribution. For KolmogorovSmirnov and Shapiro-Wilk test, it shows normal distribution if both are of significant value > 0.5 (Chua Y.P., 2012). As a rule of thumb, if the significant value of the Kolmogorov-Smirnov statistic indicates p> 0.50 then the H0 (null hypothesis) is not rejected. Thus, when an insignificant result is obtained, the samples are assumed to have equal variances or normally distributed.

3.14.3 DESCRIPTIVE ANALYSIS Descriptive analysis was conducted on all the variables to understand and describe the variables characteristics. For the categorical variables with nominal data in demographic sections, namely 39



on age, gender, qualifications, the background of the business specifically when business was setup, cluster of the business, and average income of the company within 3 years, descriptive frequencies procedure was used. The result shall provide the overview of frequency distributions of the data to describe the sample characteristic. The differences between each of the variable were examined in order to identify the demographic profile of the respondents. The data were then displayed in a table to summarise the results.

For work values and EO behaviours with ordinal measurement type, the descriptive frequencies analysis was performed to obtain the frequencies distribution of the score for each of the variables by calculating the mode for the most common score (Creswell, 2012). Mean, variance, and standard deviation were not included as they have little meaning for this research. From the result of this descriptive analysis, it can provide in depth information about the response from data collection that can be used further in discussion of the findings.

3.14.4 CORRELATION ANALYSIS Correlation studies permit us to find relationships between variables. Correlation analysis was used in this research for statistical approach correlation to examine the relationship between independent (work values) and dependent variable (EO behaviours). This analysis was conducted to confirm the direction and strength of the relationship between work values and EO behaviours. The simplest correlation technique involves bivariate correlation was used to execute the Spearman Rho Test which is used for non-parametric statistic test, for ordinal scale and non-linear distribution data (Chua Y.P., 2012).

According to Dennis and Duncan (2011), the correlation analysis will be interpreted by considering the size, direction and significance of the correlation. A correlation coefficient ranges in value from 0 to 1.00 and it can be either positive or negative correlation direction. Perfect positive correlations have a value of +1.00 while perfect negative correlations have a value of 1.00. The size of correlation coefficient strength will be interpreted based on the table 3.3 below:

40



Table 3.3 Size of Correlation Coefficient (Source from Chua Y.P., 2012) Correlation coefficient (r)

Correlation Strength

0.91 to 1.00 or -0.91 to -1.00

Very Strong

0.71 to 0.90 or -0.71 to -0.90

Strong

0.51 to 0.70 or -0.51 to -0.70

Moderate

0.31 to 0.50 or -0.31 to -0.50

Weak

0.01 to 0.30 or -0.01 to -0.30

Very Weak

0.00

No correlation

3.14.5 MULTIPLE REGRESSION ANALYSIS From the conceptual framework in Chapter 3, an integrated model that describes linear relationship between work values and EO behaviours mediated by attitudes was proposed. Mediation were tested using a regression analysis from special SPSS Macros, PROCESS developed by Andrew F. Hayes (2015). Regression analysis was carried out to search the relationship among the variables, to test the hypothesis and to investigate the most influential work values (the predictors) on EO behaviours. The squared correlation coefficient (R2) is a very important statistic to explain the strength of the relationship between two variables. The squared correlation coefficient (R2) is the value between Y and a set of one or more predictor variables.

For this research, the testing of the hypothesis was done separately by running the test on each dependent variable based on regression equation model as shown in Table 3.4. A regression or prediction equation is based on the mathematical relationship between variables, and it can aid in prediction of events. The basic equation for multiple regressions is represented by the regression equation as follows; Ŷ = b1X1+ b2X2+ …+ b kXk+b0 Ŷ is the predicted value (dependent variables), X is simply the value of the predictor variable (independent variables), b is the regression coefficients, slope of the regression line (the amount 41



of difference in Y associated with a one-unit difference in X), b0 is the intercept (the predicted value of Y when X= 0), k represents the variables counts and X is a value represents by the mean ratings (total items value divided by number of items or questions). Refer to Table 3.4 for the Regression equations model for testing hypothesis.

Table 3.4 Regression Equations Model for Testing Hypothesis Dependent Variables (EO behaviours) Ŷ1 = INN, Ŷ2 = PRO, Ŷ3 = RIS Independent variables (WV) X1=EXT, X2=INT, X3=STA, X4=SOC, Mediating variables M1=GA, M2=SA Regression equations: Ŷ1 = b1X1+ b 2X2+ b3X3+ b4X4+ b0 Ŷ2 = b1X1+ b 2X2+ b3X3+ b4X4+b0 Ŷ3 = b1X1+ b 2X2+ b3X3+ b4X4+ b0

Baron and Kenny (1986) proposed a four-step approach in which several regression Analysis were conducted and the significance of the coefficients is examined at each step. Refer to Table 3.5 for step of analysis for mediation.

Table 3.5 Step of Analysis for Mediation Step Step 1

Analysis A sample regression analysis with X predicting Y to test for path c alone, Ŷ = b1X1+ b0

Step 2

A sample regression analysis with X predicting M to test for path a, M = b1X1 + b0

Step 3

A sample regression analysis with M predicting Y to test the significant of path b alone, Ŷ = b1M1+ b0

Step 4

Multiple regression analysis with X and M predicting Y Ŷ = b1X1+ b2M + b0

Mediation implies a situation where the effect of the independent variable on the dependent variable can best be explained using a third mediator variable which is caused by the independent 42



variable and is itself a cause for the dependent variable. That is to say instead of X causing Y directly, X is causing the mediator M, and M is in turn causing Y. The causal relationship between X and Y in this case is said to be indirect. The relationships between the independent, the mediator and the dependent variables can be depicted in form of a path diagram model. Refer to the Figure 3.3 for the direct and indirect path model of mediator. Direct Path WV (X)

EO (Y)

c

c = regression weight on X when predicting Y

Indirect Path ATT (M)

b

a

WV (X)

EO (Y)

c’ a = regression weight on X when predicting M b and c' are the regression weights on M and X, respectively, when both are used together to predict Y c = regression weight on X when predicting Y

Figure 3.3: Direct path and indirect path model of mediator

43



4 Findings and Discussions CHAPTER OUTLINE This section presents the results of the study as gathered from the results of data analysis conducted from the sample population of this research. The findings cover profile of the respondents, results of reliability and validity measures, data distribution analysis, correlation and multiple regression statistics results. Then followed by the discussion on the findings to explore it in light of the research objectives and problem statement, and evidence it with literature to support the findings. Finally, the overall hypothesis results were summarized at the end of this chapter.

4.1 RESULT OF RELIABILITY AND VALIDITY TEST 4.1.1 CRONBACH’S ALPHA RELIABILITY COEFFICIENTS TEST The

result from Cronbach’s Alpha Reliability Coefficients were calculated in SPSS tool for

variables used in this research. Cronbach Alpha analysis for variables Growth (GA), indicates unreliable value of 0.593. Therefore, item 1 from the Growth variables was dropped as the Cronbach Alpha value is slightly higher than 0.5. After item 1 was dropped from the analysis, the value improved to 0.916. Therefore, the Cronbach Alpha value lowers for Growth variables is calculated with only 2 items out of 3 in the beginning. Cronbach Alpha value for proactiveness is 0.695. This number is acceptable as 0.05 is close to the 0.7. Later, Overall Cronbach Alpha for Work Values is 0.898 for 15 items, Cronbach Alpha of 0.835 for EO behaviours for 9 items and, Cronbach Alpha of 0.749 for Attitudes for 4 items. Based on these results, the reliability coefficient was very good and the questionnaire is reliable with 29 items. Table 4.1 shows the breakdown value of Cronbach’s Alpha Reliability Coefficients for all the variables.

44



Table 4.1 Cronbach ‘s Alpha Reliability Coefficient Variables

No. of items

Cronbach ‘s Alpha

Work Values

Extrinsic (EXT)

5

0.878

Cronbach ‘s Alpha =

Intrinsic (INT)

5

0.908

0.898

Status (STA)

3

0.845

Social (SOC)

4

0.772

EO behaviours

Innovativeness (INNO)

4

0.804


Proactiveness (PRO)

2

0.695

0.835

Risk Taking (RISK)

3

0.701

Attitudes

Growth A (GA)

3

0.916


(item GA1 was dropped)

0.749 Survival A (SA)

2

0.757

4.1.2 CONSTRUCT VALIDITY TEST Factor analysis for Work Values were evaluated as appropriate for this research as the value of Kaiser-Meyer-Olkin indicates a value above 0.5 and Bartlett's Test of Sphercity with significant value as zero (refer to Table 4.2 for the factor analysis result for Work Values). All factors loading for varimax rotation were above 0.5, which confirm the validity of the scale.

Table 4.2 Factor Analysis Result for Work Values Variables

Extrinsic

Construct

Factor

EXT1

.719

EXT2

.727

EXT3

.590

Kaiser-Meyer-

Bartlett’s Test

Olkin

of Sphericity

0.702

0.000

45


Intrinsic

Status

Social


INT1

.713

INT2

.776

INT3

.740

INT4

.775

INT5

.613

STA1

.554

STA2

.563

STA3

.751

SOC1

.436

SOC2

.671

SOC3

.751

SOC4

.676

0.818

0.000

0.675

0.000

0.757

0.000

Factor analysis for EO behaviours were evaluated as appropriate for this research as the value of Kaiser-Meyer-Olkin indicate value above 0.5 and Bartlett's Test of Sphericity with. sig value as zero, refer to Table 4.3 for the factor analysis result for EO behaviours. All factors loading for varimax rotation are above 0.5, which confirm the validity of the scale.

Table 4.3 Factor Analysis Result for EO behaviours Variables

Innovativeness

Proactiveness

Risk Taking

Construct

Factor

INN1

.568

INN2

.531

INN3

.468

INN4

.567

PRO1

.576

PRO2

.566

RIS1

.551

RIS2

.458

RIS3

.588

Kaiser-

Bartlett’s Test

Meyer-Olkin

of Sphericity

0.782

0.000

0.500

0.000

0.654

0.000

46



Factor analysis for attitudes were evaluated as appropriate for this research as the value of KaiserMeyer-Olkin indicates value above 0.5 and Bartlett's Test of Sphericity with. sig value as zero; refer to Table 4.4 for the factor analysis result for knowledge creation process. All factors loading for varimax rotation are 0.5 and above, which confirm the validity of the scale.

Table 4.4 Factor Analysis Result for Attitudes Variables Construct Factor Kaiser-MeyerOlkin Growth GA1 .483 0.519 GA2 .647 GA3 .689 Survival SA1 .656 0.500 SA2 .655

Bartlett’s Sphericity 0.000

Test

of

0.000

4.2 RESULTS OF DATA DISTRIBUTION The results of the value for Kolmogorov-Smirnov and Shapiro-Wilk test, show normal distribution if the value are not significant (Chua Y.P., 2012). As a rule of thumb, if the significant value of Kolmogorov-Smirnov statistic indicates p> 0.50 then the H0 (null hypothesis) is not rejected. When an insignificant result is obtained (p 1.96 which reflects the peakedness of distribution. Therefore, based on these results, the researchers have observed that the data collected are normally distributed as all Kolmogorov-Smirnov and Shapiro-Wilk test are not significant (. sig > 0.05) and Skewness and Kurtosis distribution is within (+/-) 1.96. The result of normal distribution has met the assumptions for multiple regression analysis (refer to Table 4.5 for the summary of the value for Kolmogorov-Smirnov and Shapiro-Wilk Normality Test, Skewness and Kurtosis value).

47



Table 4.5 Results for Kolmogorov-Smirnov and Shapiro-Wilk Normality Test, Skewness and Kurtosis Value Variables

Test of Normality (. sig)

Skewness

Kurtosis

Statistic

Statistic

Kolmogorov-

Shapiro-Wilk

Smirnov test

test

Extrinsic

0.145

0.961

-0.693

0.718

Intrinsic

0.100

0.943

-0.636

0.312

Status

0.121

0.936

-0.839

0.694

Social

0.091

0.932

-1.045

3.145

Innovativeness

0.125

0.965

-0.625

1.254

Proactiveness

0.115

0.962

0.122

-0.273

Risk Taking

0.116

0.968

0.354

-0.080

Growth

0.142

0.968

-0.226

-0.440

Survival

0.132

0.937

0.006

-0.874

4.3 RESULTS OF DESCRIPTIVE ANALYSIS 4.3.1 Demographic Profile of Respondents A total of 120 owner managers or CEOs of SMEs had completed the questionnaires (refer to Appendix E for the detailed table on respondents’ profile and background). These respondents were generally a representation of shareholders, directors and CEOs of SME in Malaysia as described in terms of age, gender, qualification, years of business set-up, cluster of business, designation on company and average sales within 3 years. It was noted that the majority of responses come from male owner managers or CEOs with 84.2% while females had contributed 15.8% of responses. The qualifications of the owner managers or CEOs of SME are 19.2% of “post graduate”, 60% of “Bachelor Degree”, 18.3% of “Diploma/Certificate” and 1.7% of school level. Table 4.6 shows the summarised results of the respondents’ profile analysis.

48



Table 4.6 Results of Respondents Profile Demographic Profile (Total respondents, N = 120)

Percent (%)

Gender (GENDER)

Female

15.8

Male

84.2

Post Graduate

19.2

Bachelors degree

60.8

Diploma / Certificate

18.3

School Leaver

1.7

Qualification

4.3.2 Background of The Business Based on the years of set-up, higher response rate come from the SMEs that are “less than 5 years” of set-up with 47.5% response, followed by “6-10 years” of set-up that represents 25.8% response and lastly owner managers with “More than 10 years” of service contribute to 26.7% of response from the samples. From this sample, 8.3% of the feedback from “Agriculture” business, 18.3% from “Biotechnology” business, 46.7% from “Industrial”, 20% from “Information Communication Technology (ICT)” and 6.7% from “Waste to Wealth”. Designation of the owner managers or CEOs of SMEs represents 43.4% of “shareholders”, 30% of directors and 26.7% of “CEO”.

Average sales of the company within 3 years from the date of survey was conducted and 37.5% are “less than RM500,000, 16.6% are “more than RM500,000 and less than RM1 Million”, 35.8% are “more than RM1 Million and less then RM5 Million, 3.3% are “more than RM5 Million and less then RM10 Million and 6.7% are “more than RM10 Million and less then RM25 Million”. Table 4.7 shows the summarized results of the background of the business.

Table 4.7 Results of Background of the Business Demographic Profile (Total respondents, N = 120)

Percentage (%)

Year of business set-up

Less than 5 years

47.5

6-10years

25.8

More than 10 years

26.7

Agriculture

8.3

Cluster of business

49


Designation in company


Biotechnology

18.3

Industrial

46.7

ICT

20

Waste to wealth

6.7

Shareholder

43.3

Director

30

CEO

26.7

Average sales within 3 Less than RM500,000 years

37.5

More than RM500,000 and less than 16.7 RM1.0 million More than RM1.0 million and less than 35.8 RM5.0 million More than RM5.0 million and less than 3.3 RM10.0 million More than RM10.0 million and less 6.7 than RM25.0 million

4.3.3 Work Values Variables Scores Descriptive frequencies analysis was performed on work values, EO behaviours and attitudes which used ordinal measurement type to obtain the frequencies distribution of the score for each of the variable by calculating the mode for the most common score (Creswell, 2012). Mean, variance, and standard deviation were not included as they have little meaning for this research. From the result, it can provide in depth information about the response from data collection that can be used further in discussion of the findings.

Table 4.8 is the results from distribution score for work values variables. From this table, the results show that all scores are pointing to Very Satisfied scale and there are all variables that result in Very Satisfied. The top three highest score (>90%) was recorded for “INN4” with 97.5% had Very Satisfied on this statement, followed by “INT3” for with 96.7% very satisfied on this statement and “INT5” with 94.2% very satisfied on this statement. There were variables that respondents’ 50



feedbacks show close percentage, such as “SOC1” with 64.2% Very Satisfied and 20% satisfied, “EXT1” with 68.3% had Very Satisfied and 25% had Satisfied and “INT2” with 68.3% had responded Very Satisfied and 26.7% Satisfied. Table 4.8 Distribution Score for Work Values Variables Multi items construct

Mode/Highest score

EXT1

Very Satisfied (68.3%)

EXT2


EXT3


INT1


INT2


INT3


INT4


INT5


STA1


STA2

Very Satisfied (90%)

STA3


SOC1


SOC2


SOC3


SOC4


4.3.4 EO Behaviours Variables Scores Table 4.9 is the results from the distribution score for EO behaviours variables. From this table, the results show that all scores are pointing to Very Satisfied scale with scores in the range of 65% - 100% agreement on the constructs. Overall scores are below 65% and the top scores responded is for construct “RIS2” with 100% respondents had chosen Very Satisfied that bold action is necessary to achieve their companies’ objectives.

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Table 4.9 Distribution Score for EO behaviours Variables Multi item constructs

Mode/Highest score

INN1


INN2


INN3


INN4


PRO1


PRO2


RIS1


RIS2

Very Satisfied (100%)

RIS3


4.3.5 Mediating Attitudes Variable Score Table 4.10 is the results from the distribution score for attitudes variables. From this table, the results show that all scores are pointing to Very Satisfied scale with scores in the range of 85% 99% agreement on the constructs. Overall scores are above 85% and the top scores responded is for construct “GA3” with 99.2% respondents had chosen Very Satisfied that they are going to expend the products/services in their business.

Table 4.10 Distribution Score for Attitudes Variables Multi item constructs

Mode/Highest score

GA1


GA2


GA3


SA1


SA2


52



4.4 RESULTS OF CORRELATION ANALYSIS Correlation analysis was conducted to confirm the direction and strength of the relationship between work values and EO behaviours mediated by attitudes. All correlation values were assessed based on the size of correlation coefficient from Chua Y.P, 2012 (refer to table 3.3 in Chapter 3). The correlation result is summarized in Table 4.11. It shows that the overall work values and attitudes are moderately correlated to all the EO behaviours, which are intrinsic, status and social with all correlation values from 0.31 to 0.40. Other enablers report a mixture of moderate and weak correlation. For extrinsic, it is moderately correlated with innovativeness and proactiveness but shows a close to weaker correlation to risk taking. For growth, its relationship with innovativeness and risk taking is moderately correlated but shows a close to weaker correlation to proactiveness. Survival has shown the weakest correlation with all the EO behaviours with correlation value between 0.04- 0.05.

In terms of the direction of correlation, all work values such as extrinsic, intrinsic, status and social have positive correlations with all EO behaviours. All Attitudes such as Growth and Survival have positive correlations with all EO behaviours. The top five significant correlations can be seen between Social, Proactiveness with the highest correlation, followed by Intrinsic and Proactiveness, Social and Innovativeness, Extrinsic, Proactiveness, lastly Social, and Risk Taking. Overall, Social, Intrinsic and Status indicate the most significant correlation values as compared to other Work Values. For assessing the Attitudes that are not significant, the value and the direction of correlations are observed. Based on the result, it is found that Survival has the lowest correlation among all other relationships, as the correlation value is less than 0.1.

Table 4.11 Results of Spearman Rho Correlation Analysis between Work Values and EO behaviours N =120, p=0.01 level(1-tailed) as the direction of hypothesis is known Variables

EO behaviours Correlation coefficient value INN=Innovativeness, PRO=Proactiveness, RIS =Risk Taking 53


Work Values

Attitudes


INN

PRO

RIS

Extrinsic

.232**

.372**

.168

Intrinsic

.312**

.403**

.314**

Status

.278**

.341**

.213**

Social

.375**

.409**

.352**

Growth

.268**

.159

.345**

Survival

.051

.043.

.058

**. Correlation is significant at 0.01 level (1-tailed)

4.5 RESULTS OF MULTIPLE REGRESSION ANALYSIS 4.5.1 RESULT OF RELATIONSHIP BETWEEN WORK VALUE AND EO BEHAVIOURS (BY SUB-DIMENTIONS) Multiple regression analysis was carried out to test the hypothesis to investigate the most influential work values on EO behaviours. The squared correlation coefficient (R2) is a very important statistic to explain the strength of the relationship between two variables. From the results, each of the EO behaviour yields statistically significant work values influencing EO behaviours, refer to Table 4.12 on the summary of Multiple Regression Results. For Innovativeness behaviour, R2=0.182 suggests that 18.2% of the variance is explained by Social (β=0.264, t=2.45, p ≤ 0.05) and mediation Growth (β=0.289, t=3.074, p ≤ 0.05) as Work Values while the other values are not significant due to .Sig p≥ 0.05. For Proactiveness behaviour, R2=0.251 suggests that 25.1% of the variance is explained by Extrinsic (β=0.218, t=2.424, p ≤ 0.05), Intrinsic (β=0.224, t=2.074, p ≤ 0.05) and mediation Growth (β=0.212, t=2.210, p ≤ 0.05) as Work Values while the other values are not significant due to .Sig p≥ 0.05. For Risk Taking behaviour, R2=0.120 suggests that 12.0% of the variance is explained by Intrinsic (β=0.235, t=2.004, p ≤ 0.05), Social (β=0.228, t=2.042, p ≤ 0.05) and mediation Growth (β=0.349, t=3.770, p ≤ 0.05) support as Work Values while the other enablers are not significant due to .Sig p≥ 0.05. This confirms the correlations between Work Values and the EO behaviours and mediation Attitudes (Growth) are statistically significant. 54



For ANOVA (Analysis of Variance), all multiple regression (tests have shown the entry “Sig.” as smaller than p-value, 0.05 which is the probability to reject H0 (null hypothesis) and only one ANOVA for attitudes with proactiveness have shown the “Sig.” as close to statistically significant (p=0.07). Since all value are less than 0.005, and one close to statistical significant it is concluded that there is a significant relationship between Work Values and EO Behaviours and mediating Attitudes (Growth) and EO Behaviours. ANOVA in this case is used for testing the significance of the correlation coefficient.

Table 4.12 Summary of Multiple Regression Results (By Sub-Dimensions) Variable

Variable

(DV)

(IV) & MV

INN

β

t

p-value

Result