STRUCTURAL INTERVENTIONS FOR FAVOURABLE SOCIOCULTURAL INFLUENCES ON INDIAN ENTREPRENEURS

STRUCTURAL INTERVENTIONS FOR FAVOURABLE SOCIOCULTURAL INFLUENCES ON INDIAN ENTREPRENEURS Dr Shradha Shivani Lecturer, Department of Management, Birla Institute of Technology, Mesra, Ranchi, India Dr S K Mukherjee Vice Chancellor, Birla Institute of Technology, Mesra, Ranchi , India Dr Raka Sharan Professor (retd.), Indian Institute of Technology, Kanpur, India Abstract There is a general agreement among experts that socio-cultural influence on the personality and general behaviour of people in India is very strong However, experts have arrived at contradictory conclusions regarding whether these influences have been favourable or unfavourable for the growth of entrepreneurship in Indian society Empirical evidence regarding the role is also inadequate and therefore inconclusive as well It cannot be denied that there is a growing need in this country to create and maintain a sociocultural environment that would help in building a wider base of population capable of successful entrepreneurial behaviour and willing to accept it as their profession In the above background an empirical study was conducted using a sample of 200 small entrepreneurs of Ranchi, the capital city of Jharkhand, one of the lesser-developed states of India The study involved a comparative measurement of levels of salient entrepreneurial traits and entrepreneurial success achieved by male and female entrepreneurs, examining links between these variables and socio-cultural factors like Caste, Religiosity, Family structure and Family support The findings suggest that the socio-cultural factors definitely influence the entrepreneurial behaviour However, It is also observed that the nature of these factors and their influence is such that appropriate structural interventions can make all these sociocultural attributes play a favorable role for growth of entrepreneurship in the Indian society The authors have made some observations on the policy implications of the findings and they wish to share this information with the international community, such as the present forum for wider support STRUCTURAL INTERVENTIONS FOR FAVOURABLE SOCIOCULTURAL INFLUENCES ON INDIAN ENTREPRENEURS I INTRODUCTION Desirable rate of economic growth calls for rapid emergence of a multitude of enterprises in all walks of life This requires the creation and maintenance of an environment that is conducive to growth of existing enterprises and would help build up a wider base of population capable of successful entrepreneurial behaviour Lately the concept of culture of entrepreneurship has received prominence and social scientists have observed that an entrepreneur is a product of the socio–cultural milieu Many economists now discuss the role of non-economic factors in economic growth, including concepts developed in Sociology and Psychology (Lipset, 2000) In the above context, the views of Max Weber (1864-1920) are relevant A thesis suggested by Weber is that: Given the economic conditions for the emergence of a system of rational capital accumulation, whether or not such growth occurred in a systematic fashion would be determined by the values present Structural conditions make development possible, while cultural factors determine whether the possibility becomes an actuality (Lipset, 2000) This means that an appropriate socio-cultural environment is a prerequisite for industrial or economic growth The event of enterprise creation, the essential activity in entrepreneurship, can therefore be seen as a consequence of congruence between environmental conditions and the entrepreneurial behaviour of individuals determined by their socio-cultural background Inspired by Weber’s proposition that religion, norms and values, behavior, and economic development are all interconnected, a number of experts reported their views on this relationship Mclelland (Mclelland, 1961), Berna (Berna, 1960), and Richard Fox (Fox, 1969) have also related economic progress with culture They tried to explain the economic backwardness of India by linking it with the Indian culture Some of these scholars argued that the spirit of enterprise was inhibited among the indigenous population of India by the religious philosophy of resignation embodied in the doctrine of karma and by the rigid social organization of the caste system and the joint family For instance, it has been observed by some of them that the tradition bound Indian society offered little freedom of choice of profession to its population It is the caste that determined the occupation for its members, especially in the tradition bound families (Weber1958, Tripathi, 1992) Consequently, the social base of entrepreneurial growth has remained very limited in India Tripathi has reported that the Indian personality, by and large, remained ‘unentrepreneurial’, if not anti-entrepreneurial', (Tripathi, 1992) McClelland argued that Indians lacked Achievement Motivation due to the sociocultural influences on them (McClelland, 1969) On the contrary, a few other scholars like Satish Saberwal (Saberwal, 1976), G.K Chadha (Chadha, 1986), Streefkerk (Streefkerk, 1985) have rejected Weber’s thesis They were of the opinion that structural conditions and not the cultural conditions determine whether entrepreneurship will flourish in a society or not Therefore as presented in the above discussion different researchers have arrived at contradictory conclusions regarding the role of sociocultural factors in supporting and promoting entrepreneurship, particularly in India At the same time empirical evidence regarding the role and the scope for structural interventions for influencing the sociocultural factors for promotion of entrepreneurship is also inadequate and therefore inconclusive as well However, it cannot be denied that there is growing need in this country to create and maintain an appropriate environment that is conducive to growth of existing enterprises and would help build up a wider base of population capable of successful entrepreneurial behaviour It would be meaningful to empirically examine the possible links between growth of entrepreneurship and sociocultural factors like Caste, Religiosity & Perceived Family support and to identify the Structural interventions that can be designed to make the influencing sociocultural attributes play a favourable role for growth of entrepreneurship in India It is common knowledge that the proportion of women in the entrepreneur population of India is miniscule In this context it would be relevant to find out whether there are any differences between Indian male and female entrepreneurs with respect to the levels of success achieved by them In case if any differences are observed it would be interesting to find out whether these differences are due to sociocultural or structural reasons II OBJECTIVES AND METHODOLOGY In the above background an empirical study was conducted on the entrepreneurs of Ranchi, the capital city of Jharkhand, erstwhile a part of the state of Bihar in India The study involved a comparative measurement of levels of entrepreneurial traits and success achieved by male and female entrepreneurs, examining links between these variables and a few sociocultural factors like Caste, Religiosity, Family structure and Family support The scope for structural interventions for favourable influence of sociocultural factors was explored Several measurement scales were used in the study The design of the scales was based on review of relevant literature and consultation held with a group of five judges who were representatives of Government support agencies, officials of the Ranchi chamber of commerce and one expert academician in the subject The scales are described in the annexure A random sample of 200 entrepreneurs was selected from the directory of Small Scale Industries Association of Ranchi The sample consisted of 150 male entrepreneurs and 50 Female entrepreneurs Relevant information was collected from the respondents with the help of a semistructured Interview Schedule The findings reported in this paper are from a larger project carried out during 2002-04 III EMPIRICAL FINDINGS Success of the Entrepreneur Entrepreneurial success can be defined in many different ways Comparison of the levels of success achieved by entrepreneurs is a difficult task One may use some quantified performance indicators like financial performance, awards won or intangible measures like happiness, satisfaction etc that may be difficult to quantify On review of scales used for measurement of entrepreneurial success by various Indian researchers (Akhouri 1979, Rao1986, Kumar 1990), a set of key variables was selected for measurement of success of the respondents of this study These variables are, Net Profit (average of last 4-5 years), Turnover growth rate (average of last 4-5 years) and Diversification level of their enterprises Net Profit and Turnover growth were used in almost all the above-mentioned scales and these are variables that are a function of some of the other measures like labour productivity, raw material productivity, etc used in the scales referred above Diversification level was included along with the other two financial variables because measurement of entrepreneurial success would remain incomplete without a measurement of the amount of innovation and risk taking exhibited by the entrepreneur, as these are two important characteristic features of entrepreneurship This is as per a very widely accepted definition of the term ‘Entrepreneur’, given by Hisrich & Brush “Entrepreneur is a person who creates something different with value by devoting the necessary time and effort, assuming the accompanying financial, psychic and social risks, and receiving the resulting rewards of monetary and personal satisfaction” (Hisrich and Brush; 1978) Diversification decision of the entrepreneur is a suitable indicator of innovativeness and risk taking propensity of the entrepreneur The findings regarding comparative levels of Net Profit, Turnover Growth and Diversification level achieved by the respondents is presented in Figure 1, and Male respondents have managed to earn relatively higher levels of profit and Turnover Growth as compared to the female respondents There is no significant difference in the level of diversification achieved by the two groups As presented in Figure there is a striking difference between the male and female respondents regarding their extent of Success Male entrepreneurs have been found to be more successful among the respondents The chi square results agree to the significant difference between the two sets of respondents Hence one may conclude that entrepreneurial performance can be differentiated on the basis of gender The reasons for this difference may be due to differences in the Sociocultural attributes of the two sets of respondents, differences in their entrepreneurial traits or because of differences in access to infrastructure support for male and female respondents This will be explored later in this discussion Socio-cultural Attributes and Success Religiosity Religion is an integral part of a cultural system It is important because it promotes social solidarity and reinforces social norms and values Religion makes people share common beliefs and thus a common value system It is widely held by some western observers like Max Weber that India's spiritualism, philosophy of renunciation, fatalism and asceticism constitute insurmountable obstacles to material progress of the country (Singer; 1956) Following this analysis of Weber a few other researchers like Dwijendra Tripathi, have also argued that, because of the religious philosophy of resignation embodied in the doctrine of ‘Karma’ and the rigid social organization of the caste system the Indian personality remained largely unentrepreneurial if not anti – entrepreneurial (Tripathi, 1992) Similarly McClelland was of the opinion that the presence of a specific motivational structure, the desire to achieve purely for the sake of achievement i.e the `achievement motivation' is of critical importance to successful entrepreneurship and he said that Indian artisans lacked entrepreneurial values and motives, a conclusion he based on his experience with handloom weavers in Orissa and artisans in Kakinada in south India (Mclelland and Winter, 1969) But these assertions are contradicted at least on two counts First, not all Hindu scriptures teach doctrines of self-denial or the cessation of desire in order to achieve personal salvation Secondly, the secular doctrine abounds in works like Kautilya's, "Arthasastra", the "Rig-Veda and Bhagavat Gita" (Rao, 1986, p-18) Kunkel describes the reasoning of western observers who find the tenets of the Hindu religion as responsible for India's economic backwardness in the following words, “ The sacred literature of India contains values which are internalized by the people who then act in accordance with these values, and thus India is economically stagnant, and there is little hope of economic growth" (Kunkle, 1965) However, he also points out that the above reasoning is based on an assumption for which there is no objective evidence Contrary to the western view, H.W Singer (Singer, 1953), Srinivas (Srinivas, 1962) and others argue that Indian population by and large is as materialistic in its daily life as its western counterparts Singer states that, "The Indian world view encompasses both material and spiritual values, and these can be found in the behaviour of the ordinary Indian existing side by side and in functional interdependence Further he points out: A society dominated by a philosophy of renunciation need not be a society of ascetics In India, ascetics and holy-men have never constituted more than a tiny fraction of the population There have always been a sufficient number of householders willing and able to the world's work And while the ideals of asceticism may indirectly influence the general population, not all of these influences oppose social reform and economic development" (Singer; 1953,p-83) Milton Singer argued on the basis of an empirical study conducted by him in Madras that Hindu industrialists in Madras compartmentalize their religious lives and their business activities (Siger, 1972) Timberg (Timberg, 1978) and Saberwal (Saberwal, 1976) had altogether rejected Weber’s thesis that religion, norms and values, behavior and economic development are all interconnected They were of the view that India’s economic backwardness was due to certain structural conditions that were unsuitable for entrepreneurship and not because of social or cultural systems prevailing in the country While the above arguments have been forwarded, nothing conclusive has emerged The views of scholars regarding the influence of Indian religiosity on economic success are conflicting However, the fact remains that Indian economy remained stagnant for centuries for which historically various explanations have been suggested of which religion is only one Foreign rule extended over a long period is another Lack of modern educational facilities and other structural facilities for growth of entrepreneurship is one of the consequences of foreign rule Social and political institutions, which were not conducive to economic development, are the third and perhaps the most conclusive explanation (Rao; 1986, p-19) As presented in the previous section, many scholars consider religion as an important sociocultural attribute influencing economic development Although a cause – effect relation cannot be tested between the two variables; it would be appropriate to examine the relation between religiosity and success levels achieved by the respondents of this study in a descriptive manner The religiosity of each respondent was measured by seeking information on his religious habits It was measured on a three-point scale with categories of high, medium and low The measurement scale is explained in the annexure The Figure shows the respondents' religiosity and the extent of entrepreneurial success achieved by them Almost 90 percent respondents were found to have high religiosity or Medium Religiosity Only a small minority of 10 percent respondents was found to have low religiosity All the respondents said they had faith in the power of God There is no distinct relationship between religiosity and success level of the respondents The distribution of respondents in different levels of success for all religiosity categories is the same Although, statistically there is no significant relationship between religiosity and success but almost all the respondents agreed that their religious functions, norms, practices and God’s power helps them to be disciplined and gives them the confidence to overcome difficulties It may be concluded that religion is definitely not a barrier to entrepreneurial success in India; rather it is a source of strength for entrepreneurs This conclusion is valid for both Male as well as Female entrepreneurs Cross cultural research involving a comparative study of performance & success of entrepreneurs from two different cultures can throw more light on the relationship between religiosity or religion and entrepreneurial success Caste Among the social institutions that are held responsible for India's backwardness, the caste system is considered the most prominent one All other social factors that inhibited development are only offshoots of or closely related to the caste system Since caste is an important sociocultural attribute, therefore information regarding caste of the respondents and success achieved by them has been analyzed to see the influence of caste level on success achieved by the respondents The grouping of castes is explained in the annexure The caste composition and success level of respondents is presented in Figure 6.As per the Figure in the forward caste male category a clear majority of 53.57 % are in the very successful category Whereas, only 31.25 % and 15.18% belong to the successful and less successful categories On the other hand among the male respondents of the backward caste category, largest number of cases are in the successful category i.e 47 % and only 23.5% and 29.4% are in the Very successful and less successful categories respectively Among the females, majority of them belong to the forward caste and are equally distributed in all categories of success Only a small minority of respondents were of the SC category, out of whom the majority are in the successful or Very successful category In the ‘others’ category also most of the males are in the very successful category, i.e.46.15% The above figures suggest that the male and female respondents belonging to forward caste are found in all categories of levels of success There are few respondents from backward, scheduled and others caste group but most of them are placed in the very successful and successful category as per their performance Statistical results did not show any significant relationship between caste and success level for male or female entrepreneurs Although these figures not indicate any apparent relation between caste and success there are certain implications The data suggests that an overwhelming majority of respondents are from high caste while low caste respondents are very few in number In this context, it would be appropriate to point out one of the findings from general discussions with the respondents and also with some experts It was observed that high caste entrepreneurs are able to continue with their enterprise because of their caste orientation Even if they face failure at a certain stage they are able to overcome them because of the tacit support of caste groupings Whereas, the low caste entrepreneurs are unable to continue in such situations because of the lack of such caste support Hence their actual number is less The findings of this study suggest that caste does not influence the success level that can be achieved but it does influence the supply of entrepreneurs and the survival of the enterprise in difficult situations Therefore these findings not conclusively support or reject the views of Weber and other researchers who consider the Indian caste system as a hindrance to entrepreneurship This requires a systematic study of those individuals who had the desire to become an entrepreneur but could not so and an investigation of the reasons for the failure of entrepreneurs who could not survive when faced with difficult situations The findings of this study are consistent with the views of a few other researchers who have conducted their study in some other parts of the country and have presented evidences of individuals from lower castes emerging as successful entrepreneurs Holmström, observed that `In some cases artisan castes of Delhi set up manufacturing units for light engineering products like ball bearings and motor parts ' (Holmström, 1985) This transition from artisan to industrialist occurred in other parts of India as well Satish Saberwal described in detail how, after 1930, carpenters and blacksmiths in a city of Punjab worked their way up to become industrial entrepreneurs (Saberwal, 1976) To a large extent this is true for the state of Punjab as a whole, as is shown in the study by G.K Chadha, who described how artisans like blacksmiths, masons, and carpenters, turned into good engineers who played a vital role in the regeneration of the agro-industry in Punjab, setting up small industrial workshops, many of which in due course grew into full-fledged industrial enterprises (Chadha, 1986) In his study on small-scale industrialists in two small Gujarat towns, Hein Streefkerk also showed that artisan caste members, namely carpenters and blacksmiths, were the first to become actively involved in the transition to industrial production (Streefkerk, 1985) Based on the above discussion one can reject the argument that members of artisan castes were, and are, unable for cultural and socio-psychological reasons to make a contribution to industrial development However, it may be concluded that caste influences entrepreneurial growth and sustained entrepreneurial success and that there is need for designing appropriate structural interventions to deal with this influence Family Support A person imbibes certain norms and values and the way of life practiced in a religion or society through his upbringing in the family Many sociologists have regarded family as the corner stone of society "It forms the basic unit of social organization as in the society it's the responsibility of family as a social organization to internalise the society's culture and hence structuring of human personalities" (Haralambos, 1980) During the exploratory interviews with the respondents, a hypothesis that emerged was that the moral and financial support received by them from their family was valuable for them and it played a significant role in enabling them to carry out their entrepreneurial activities To test this hypothesis, the level of Family support (Financial and Moral) received by the respondents (as perceived by them) was measured and the link between level of perceived family support and levels of success achieved by the respondents was explored The scale used for the measurement is described in the Annexure Figure & present the level of family support and it’s relation with the level of entrepreneurial success achieved by the respondents Overall we find from figure that the largest proportion of respondents i.e 44.5 percent of them have received High level of family support for taking up entrepreneurship Some differences are observed between the male and female respondents with respect to family support Among the males a large proportion of them i.e 49.33 percent have said that they received high level of support from their families whereas the majority of the female respondents i.e 52 percent of them have said that they received only moderate support from their families According to the chi-square results this difference in the level of family support received by Male and Female respondents has been found to be statistically significant This difference could also be one of the reasons for lesser degree of success achieved by the Female respondents This can be confirmed by analysing the relation between Success and Perceived Family support as given in Figure It is obvious from figure that the majority of the respondents received a lot of family support morally as well as financially to carry on their entrepreneurial activity But, the more successful respondents were found to have received greater family support as compared to the less successful ones Both chi square results and correlation between the family support received by the respondents and their extent of success show positive significant relationship Another inference that can be drawn from the above information is that one of the reasons for less degree of success achieved by Female respondents could be because they received less degree of family support as compared to their male counterparts In the context of Family Support it would be pertinent to point out that the majority of the entrepreneurs who have received high support are from extended families These respondents probably benefited more from the family because of the family structure Joint families seem to have encouraged entrepreneurship in this region This is contrary to the views of researchers like Dwijendra Tripathi who came to the conclusion that ‘the joint family system of Indian society is an important factor in explaining India's retarded economic growth and the unentrepreneurial personality of Indians (Tripathi, 1992) On the other hand Milton Singer from his study of entrepreneurs of Madras concluded that the joint family organization plays a positive role in promoting industrial entrepreneurship (Singer, 1972) The findings of Singer suggested that joint family units provide financial, physical and social security to make entrepreneurial activity a success Most of the respondents belonged to the extended type of families and only a few were of nuclear types Many of these nuclear families had also recently branched out from extended families The respondents mentioned that they got all kinds of support from the members of their extended families Thus, one of the important factors influencing the success of an Indian entrepreneur is the support from his family and the type of family he belongs to This observation indicates the social roots of Indian entrepreneurship Education Along with the informal learning in a family, the child undergoes formal learning through his education Education is considered an important socio-cultural factor that influences the performance of an entrepreneur It is believed that education received in schools and college inculcates the value of achievement and the value of equality of opportunity and also enables people to acquire various types of technical skills These values and skills have an important function in this advanced industrial society, as it requires a highly motivated achievement oriented work force, equipped with the required skills Hisrich and Peters have observed that although formal education is not necessary for starting a new business, as is reflected in the success of many entrepreneurs who were high school drop outs, found through out the world, it does provide a good background particularly when it is related with the field of the venture (Hisrich and Peters, 1998) The Figure presents the extent of success in relation to the education level of the respondents of this study As presented in Figure the statistical results (chi square test) show a significant relationship between the educational level of the respondents and their level of success Respondents with Higher levels of education have been found to be more successful than those with lower levels of education IV CONCLUSIONS: SOCIOCULTURAL ATTRIBUTES AND SUCCESS The findings of this study suggest that there is a definite relation between sociocultural attributes of entrepreneurs and the level of success achieved by them It is observed that caste does not influence the success level that can be achieved but it does influence the supply of entrepreneurs and the survival of the enterprise in difficult situations The representation of the lower castes in the entrepreneur population is very low Therefore these findings not conclusively support or reject the views of Weber and other researchers who consider the Indian caste system as a hindrance to entrepreneurship Perceived Family support and Education level are two very important factors influencing the success of entrepreneurs The more successful respondents were found to have received greater family support as compared to the less successful ones An inference that can be drawn from the above findings is that one of the reasons for less degree of success achieved by Female respondents is because they received less degree of family support as compared to their male counterparts Almost all those who have received high support are from extended families It is indicated that the joint family system of India has not hindered the growth of entrepreneurship Highly educated respondents and respondents with professional qualification were found to be more successful than the lesser educated ones Religiosity doesn’t have significant correlation with success although all the entrepreneurs are found to have faith in God and religiosity was high among the entrepreneur population in general Indian religiosity is definitely not a barrier to entrepreneurial success; rather it is a source of strength for the entrepreneurs The above conclusions indicate that there are certain sociocultural attributes like Caste, Perceived Family support and Education that influence the growth of entrepreneurship whereas others like Indian religiosity and the Joint family system have no influence but they definitely not hinder entrepreneurial activities The implications of these findings for structural interventions will be presented in a later section of this paper V ENTREPRENEURIAL TRAITS Most experts have agreed that entrepreneurs possess certain distinctive qualities As reported by Joseph Schumpeter, John Stuart Mill claims that entrepreneurship requires "no ordinary skill," and he laments the fact that there is no good English equivalent word to encompass the specific meaning of the French term ‘Entrepreneur’ (Schumpeter, 1951) Alfred Marshall suggests that the skills associated with entrepreneurship are rare and limited in supply He claims that the abilities of the entrepreneur are "so great and so numerous that very few people can exhibit them all in a very high degree" Marshall, however, implies that people can be taught to acquire the abilities that are necessary to be an entrepreneur (Marshall, 1994) Various studies have been conducted to identify the important entrepreneurial traits There is a general agreement among writers that the four most important traits of an entrepreneur are his Risk taking propensity, Innovativeness, Achievement orientation and Managerial skills If one tries to analyze how people acquire these traits, literature suggests that both structural as well as sociocultural factors play a role For example, Max Weber (1958) suggested that: Given the economic conditions for the emergence of a system of rational capital accumulation, whether or not such growth occurred in a systematic fashion would be determined by the values present Structural conditions make development possible, while cultural factors determine whether the possibility becomes an actuality (Lipset, 2000) This means that an appropriate socio-cultural environment is a prerequisite for industrial and economic growth The event of enterprise creation, the essential activity for entrepreneurship, 10 The role of the District Industries Center (DIC) DIC in entrepreneurship development is: • Registering the Business Units • Subsequently acting as a liaison for various help that the business unit requires • Coordinating with banks in forwarding loan applications in PMRY (a govt sponsored scheme for encouraging self employment among youth) assistance, Coordinating with RIADA (Ranchi Industrial Area Development Authority) and other such agencies • Conducting training programs and seminars for the prospective and existing entrepreneurs either through tie-up with Institute of Entrepreneurship development, Small Industries Services Institute or on it’s own The officials of the DIC indicated that the trend regarding the participation of women and members of scheduled and backward castes and the proportion of participants of these workshops actually setting up a business was the same as that in the case of SISI programmes The number of loan applications received by the DIC and by the public sector banks, from female applicants and members of the scheduled and backward castes is negligible The Bankers say that they are not able to achieve their targets regarding financing of small entrepreneurs because the number of applications received by them is very low Majority of the applications are received from family members and close associates of existing entrepreneurs VIII Desired Structural Interventions On the basis of the above findings it will be appropriate to observe that suitable structural interventions can make the influencing sociocultural attributes play a favourable role for growth of entrepreneurship in India Measures need to be taken for widening the social base for entrepreneurship in India, assuring the potential and existing entrepreneurs, both male and female, of the required acceptance of their choice of career and support from their families The kin oriented nature of the Indian society has to be recognised while designing any measures for encouraging the growth of entrepreneurship It may be suggested, that the target for motivational campaigns for promotion of entrepreneurship should be the immediate family of the participant as well This is specially required for females because 95 % of the female respondents in this study said that they would not have opted for entrepreneurship if their family had not agreed with their idea of becoming an entrepreneur Amongst the males 55% had given this response A definite conclusion that emerges from the above discussions is that the promoter infrastructure can be effective only if the target for its efforts is the society at large and not only those few who are already favourably inclined toward entrepreneurship Specially designed campaigns need to be launched to educate the society as a whole regarding the merits of entrepreneurship as a profession and to make entrepreneurship a preferred choice of profession The respondents of this study who are practicing entrepreneurs were found to possess relatively low levels of Risk taking propensity It was also concluded in the discussions thereafter that this was largely due to unfavourable structural factors affecting them It can therefore be 19 recommended that the promoter organizations need to give special attention towards building and maintaining a favorable structural environment for entrepreneurship to flourish in the region The need for education cannot be overemphasized As observed in this study education is a social factor that is found to influence the ability to introduce entrepreneurial innovations and to achieve entrepreneurial success Another recommendation that can be made in this context is that the curriculum of schools at the primary and junior levels should be altered to incorporate theoretical content and exercises that would inculcate Risk Taking ability, Innovativeness and Achievement Orientation among the masses from the very childhood and to develop a positive attitude towards entrepreneurship as a profession Probably a change needs to be introduced in the overall school education system to promote the above traits in the population at large All the other sociocultural influences are not a barrier for entrepreneurial success but they definitely affect the supply of entrepreneurs, hence, there is need to build an environment where members from all castes and socio-economic strata, males and females, feel encouraged to opt for entrepreneurship as their profession and support the entrepreneurs among their family and acquaintances TABLES AND FIGURES Figure PROFIT Gender High %age Medium Males 78 52.00 40 Females 18 36.00 13 Total 96 48.00 53 Chi square- 6.09 α < 0.05 df = %age 26.67 26.00 26.50 Low 32 19 51 %age 21.33 38.00 25.50 N=200 Total 150 50 200 Figure TURNOVER GROWTH Gender High Percentage Medium Percentage Low Males 84 56.00 56 37.33 10 Females 20 40.00 16 32.00 14 Total 104 52.00 72 36.00 24 Chi square- 16.36 α < 0.01 df = N=200 Percentage Total 6.67 150 28.00 50 12.00 200 20 Figure DIVERSIFICATION LEVEL N=200 Gender High Percentage Medium Percentage Low Percentage Total Males 47 31.33 59 39.33 44 29.33 150 Females 10 20.00 19 38.00 21 42.00 50 Total 57 28.50 78 39.00 65 32.50 200 Chi square-3.56 α > 0.05 df = Figure GENDER SUCCESS N=200 %age Total Gender Very %age Successful %age Less Successful Successful Males 76 50.67 49 32.67 25 16.67 Females 16 32.00 19 38.00 15 30.00 Total 92 46.00 68 34.00 40 20.00 Chi square-6.49 α < 0.04 df = Total Females Males 16.6 15 00 50.6 32.6 150 50 200 20.0 16 00 34.0 19 00 Very Successful Successful Less Successful Very Successful Successful Less Successful Very Successful Successful Less Successful 46.0 Figure RELIGIOSITY AND SUCCESS N=200 High Religiosity Medium Low Success Level M %age F %age M %age F %age M %age F %age Very Successful 25 45.45 45.00 41 50.62 26.09 50.00 42.86 Successful 20 36.36 29 35.80 34.78 21.43 Less Successful Total 10 55 35.00 18.18 14 28.57 28.57 28.57 20 23 39.13 100 11 81 13.58 Chi Square-1.67 α > 0.05 100 20.00 100 100 100 100 df = 21 Figure CASTE AND SUCCESS N=200 Caste M Forward Backward SC Others %age F %age M %age F %age M %age F %age M %age F %age 60 53.57 17 34.69 35 31.25 15.18 17 34.69 30.61 15 Success Level Very Successful Successful Less Successful Total 17 112 49 100 100 23.53 37.50 47.06 29.41 17 100 50.00 12.50 100 46.15 100.00 38.46 15.38 13 100 0.00 0.00 100 Chi-Square-2.15 α > 0.05 df = Figure-7 FAMILY SUPPORT Gender High % age Moderate Males 74 49.33 62 Females 15 30.00 26 Total 89 44.50 88 chi square = 6.56 α < 0.05 df = % age Low % age 41.33 14 9.33 52.00 18.00 44.00 23 11.50 N=200 Total 150 50 200 Figure FAMILY SUPPORT AND SUCCESS N=200 Family Support Very Successful M %age F %age 43 58.90 10 High 24 32.88 Medium 8.22 Low 73 100 18 Total 9.00 %age 36.50 Chi-Square = 31.42 α < 0.01 55.56 27.78 16.67 100 M Successful %age F %age Less Successful M %age F %age Total %age 22 42.31 29.41 36.00 0.00 36.00 10 66.67 29 55.77 11 64.71 1.92 5.88 28.00 33.33 1 52 100 17 100 25 100 15 100 26.00 8.50 12.50 7.50 89 88 23 200 44.50 44.00 11.50 100 df = 22 Figure EDUCATION LEVEL AND SUCCESS N=200 Education High Medium Low Success Level M %age F %age M %age F %age M %age F %age Very Successful 33 84.62 90.00 36 39.56 26.67 20.00 10 Successful 12.82 10.00 39 42.86 12 40.00 40.00 40 Less Successful 2.56 0.00 16 17.58 10 33.33 40.00 50 Total Chi Square-50.67 39 100.00 91 100.00 30 100.00 20 100.00 10 100 α < 0.01 10 100.00 df = Figure 10 RISK TAKING PROPENSITY High Males 25 Females Total 33 Chi-square-3.37 %age Moderate 16.67 65 16.00 15 16.50 80 α > 0.05 df = M ales 40.0 54.0 Low High 43.5 30.0 Moderate Low Male 14 99 22 15 150 %age Female 9.33 6600 29 14.66 10.00 0.00 100.00 50 %age 18.00 58.00 18 6.00 0.00 100.00 16.5 40.0 High Low UNCERTAINTY IN THE ENVIRONMENT N= 200 Uncertainty Very high High Moderate Low Very Low Total N=200 Total 150 50 200 %age 40.00 54.00 43.50 Total 16.0 16.67 Moderate Low 60 27 87 Females 43.3 High %age 43.33 30.00 40.00 Moderate Figure 11 Total 23 128 31 18 200 %age 11.50 64.00 15.50 9.00 0.00 100.00 23 Chi-Square =3.76 α > 0.05 df = Figure 12 INNOVATIVENESS High %age Moderate Males 29 19.33 69 Females 18.00 20 Total 38 19.00 89 Chi square =0.89 α > 0.05 df = Males 42.00 Moderate Total 36.50 High Moderate 19.00 44.50 40.00 Low N=200 Total 150 50 200 %age 34.67 42.00 36.50 18.00 46.00 High Low 52 21 73 Females 19.33 34.67 %age 46.00 40.00 44.50 High Low Moderate Low Figure 13 ACHIEVEMENT ORIENTATION High %age Moderate Males 81 54.00 44 Females 18 36.00 26 Total 99 49.50 70 Chi Square-8.49 α < 0.02 df = Males %age 29.33 52.00 35.00 Low 25 31 %age 16.67 12.00 15.50 Females 16.67 12.00 Total 15.50 36.00 54.00 High 35.00 52.00 29.33 Moderate Low High Moderate N=200 Total 150 50 200 Low High 49.50 Moderate Low 24 Figure 14 FAMILY SUPPORT Gender High % age Moderate Males 74 49.33 62 Females 15 30.00 26 Total 89 44.50 88 chi square = 6.56 α < 0.05 df = % age Low % age 41.33 14 9.33 52.00 18.00 44.00 23 11.50 N=200 Total 150 50 200 Figure 15 MANAGERIAL SKILLS High %age Moderate Males 90 60.00 46 Females 13 26.00 23 Total 103 51.50 69 Chi square = 20.31 α < 0.01 df = Males Low 14 14 28 %age 9.33 28.00 14.00 Females 9.33 30.67 %age 30.67 46.00 34.50 28.00 N=200 Total 150 50 200 Total 26.00 14.00 60.00 34.50 51.50 46.00 High Moderate Low High Moderate Low High Moderate Low Figure 16 Correlation Between the Entrepreneurial Traits and Success of Respondents Entrepreneurial Traits Risk-taking Innovativeness Achievement Orientation Managerial Skills Success (r) 0.726 * 0.691 * 0.511 * 0.563* *Significant at 0.05 level of significance ANNEXURE 25 A group of five judges who were representatives of Government support agencies, officials of the Ranchi chambers of commerce and one expert academician in the subject were consulted for finalization of the measurement scales described below Measurement of Perceived Family Support A set of indicators was used to measure the Level of family Support received (as perceived by the respondents) Information was sought from the respondents with the help of the following questions: How you rate the level of support you have received from your family for carrying out your business? Very high / High / Low/ Very Low The responses would be given 0,1,2 and points respectively for the alternative answers Who/What inspired you to become an entrepreneur? i) A success story (Whose Please state) ii) Help from family, relatives and friends iii) Previous related experience iv) Technical training v) Government support vi) Other (specify) point would be given if choice ii) were answered I chose this career because: i) I knew I would get full family support for this choice of career ii)I desired to be self-employed iii) There was prestige in being called an entrepreneur iv) I had this idea that I would be able to make a lot of money in this profession v) I did not have any other alternative point would be given if choice i) were answered The scale that was used consisted of levels of Family Support The total scores were ranging from 0-5.Therefore the respondents were assigned to the three levels as follows: 4-5: High 2-3: Medium 0-1: Low Measurement of Success The scale for Measurement of success was based on a study of scales used by S Ashok Kumar (1990), Akhouri(1979) , and Lakshamana Rao (1986) For measurement of success three parameters were used: 26 (a) Average percentage of net Profit per annum achieved during the last three years (b) Rate of Growth of Turnover during the last three years (c) Level of Diversification (Diversification level was included along with the other two financial variables because entrepreneurial success is reflected by the amount of innovation and risk taking exhibited by the entrepreneur, as these are two important characteristic features of entrepreneurship The performance of the unit of each respondent was rated on each of these variables on a 3- point scale as described below A panel of judges was consulted for deciding the cut offs for the different levels in the scales a) Profit - Information regarding Average percentage of Net profit per annum achieved during the last years was obtained from each respondent Scores were assigned to each entrepreneur as follows: Above 25 % - High – points 15% - 25% - Medium – points Less than 15% - Low – point b) Turnover – Information regarding Average rate of growth of Turnover achieved during the last years was obtained through the Interview schedule Scores were assigned to each entrepreneur as follows: Above 15 % - High – points 5% - 15 % - Medium – points Less than 5% - Low – point c) Diversification - Information regarding No Of diversifications made during the last years, was obtained through the Interview schedule every year – High - points every years - Medium – points every years or more or no diversification at all - Low – point So the total scores were ranging from 3-9 Respondents were categorized as having Low, Medium & High level of success for scores ranging from 3-4, 5-7 8-9, respectively Measurement of Religiosity A set of indicators was used to measure Religiosity Information regarding the indicators were obtained from the respondents with the help of the following questions: Q Do you: Have faith in God? Have a place of worship in Office? Worship daily? Celebrate all important festivals? Visit the Temple/public place of worship regularly? Perform any other specific rituals? Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No The respondents were given point for each affirmative answer The scale that was used consisted of levels of Religiosity The scores were ranging from 0-6 Therefore the respondents were assigned to the three levels as follows: 27 0-2: High 3-4: Medium 5-6: Low Caste Categories The various castes have been divided into four major groups based on the census classifications (Census of the Government of India, 1991) They are (i) Higher/Forward caste (i.e Brahmins, Kayasthas, Kshatriyas, Vaishyas) (ii) Backward caste (iii) Scheduled caste or Scheduled tribe (iv) Others (comprised of Muslims, Christians, Sikhs, Jains etc.) Measurement of Risk Taking propensity For Measurement of Risk Taking propensity an instrument called Risk Attitude Inventory, designed by Gene Calvert (1993) was used Along with Kogan-Wallach CDQ this is another popular tool for measuring Risk Taking Propensity This tool consists of a set of statements as presented below: Answer Agree/Disagree Taking management risks makes good sense only in the absence of acceptable alternatives I generally prefer stimulation to security I have confidence on my ability to recover from my mistakes no matter how big I would promote someone with unlimited potential but limited experience to a key position over someone with limited potential but more experience Anything worth doing is worth doing less than perfectly I believe that opportunity generally knocks only once It is better to ask for permission than to ask for forgiveness Success in management is as much a matter of luck as ability I would choose a three thousand rupees annual raise over a ten thousand rupees bonus, when I had about a one-in-three chance of winning the bonus 10 I can handle big losses and disappointments with little difficulty 11 If forced to choose between them, I would take safety over achievement 12 Failure is the long road to management success 13 I tolerate ambiguity and unpredictability well 14 I would rather feel intense disappointment than intense regret 15 When facing a decision with uncertain consequences, my potential losses are my greatest concern Scoring: One point for each of the following questions on which the respondent agrees 2,3,4,5,10,13,14 One point for each of the following questions on which the respondent disagrees: 1,6,7,8,9,11,12,15 28 The scale that was used for measurement of Risk taking Propensity consisted of three levels, Low Medium and high The max Score is 15 The respondents were assigned to the three levels as follows: 0-5 – Low, 6-10 – Medium, 11-15 - High Measurement of Innovativeness A set of indicators was used to assess the level of innovativeness of the respondents Information on these indicators was obtained with the help of the following questions in the personally administered Interview Schedule: Question During the last 4-5 years……………………… Did you find new market/new buyers? Yes/No If Yes, Please give details………………… 2.Did you adopt any new ways to manage the enterprise? Yes/No If Yes, Please give details………………… 3.Did you locate any new sources for supply of raw materials? Yes/No If Yes, Please give details………………… Did you establish any new channels of distribution? Yes/No If Yes, Please give details………………… 5.Did you adopt any new technology method for manufacturing/ offering service/trading? Yes/No If Yes, Please give details………………… Did you launch/produce a new product or service for an existing market? If Yes, Please give details Each Yes answer to questions 1-6 was given point The scores were ranging from 1-6 Again a three level scale was used for measurement of Innovativeness The respondents were assigned to different levels depending upon their scores as follows: 1-2 – Low, 3-4 – Medium, 5-6 – High Measurement of Achievement Orientation To measure the achievement orientation of the respondents a scale was designed using statements based on the attributes of High achievers as proposed by McClelland in his book, “ The Achieving Society” McClelland differentiates ‘high achievers’ from ‘low achievers’ on the basis of certain characteristics According to him high achievers set moderately challenging goals for themselves – tasks of intermediate difficulty and those where the probability of success is 0-5.They are not gamblers and they dislike succeeding by chance High achievers also seek situations in which they can attain personal responsibility for the work performed by them They also want rapid feedback on their performance (McClelland, 1961) Three statements were presented to each respondent as given below: 1) In a situation where I know that Higher the Risk Higher the Return is applicable I shall opt for: i) Low risk ii) Medium risk 29 iii) High risk 2) I assume personal responsibility for my success / Failure i) Agree ii) Neither Agree nor Disagree iii) Disagree 3) I ask for feedback on my performance i) Always ii) Sometimes iii) Never 1,2 and points were assigned for the answers i), ii) and iii) respectively The total scores were ranging from 3-9 Respondents were categorized as having Low, Medium & High Achievement orientation for scores ranging from 3-5, 6-7 8-9, respectively Measurement of Managerial skills Measurement of managerial skills was based on the classification of Robert Katz Katz identified three essential management skills: Technical Skills, Human Skills and Conceptual Skills (Katz,1974) Technical skills encompass the ability to apply specialized knowledge or expertise Some entrepreneurs learn the special knowledge and practices of the field through extensive formal education, while others develop their technical skills on the job itself Our study takes into account three technical skills: i) Account keeping, ii) Capability to organize resources, iii) Knowledge of the job of the firm The respondent was rated on each of these skills on a 3-point scale (Low, Medium High) The information regarding these skills of the respondents was obtained with the help of one open ended and two closed ended questions as given below The interviewer based on his own interpretation classified the response to question no 1) 1) Please describe your method of Account Keeping………… Structured / Semi structured / Unstructured 2) How often you face a problem of inadequate stock position? Never / Sometimes / Often 3)) How proficient are you in the technical aspects of the jobs performed in your organization? Very proficient / somewhat proficient / Not at all proficient 1, and points were assigned for the first, second, and third options The total scores were ranging from to So scores from 3-4 were rated in the low Technical skills category, 5-7 was rated as Medium and 8-9 were rated as High Skills category The ability to interact effectively and work with, understand and motivate other people describes the human skills These were judged with the help of indicators; the entrepreneurs’ ability to handle grievances, encourage participation of employees and the ability to network The information on the above three indicators were obtained through the following questions in the interview schedule: 1) How you handle a crisis or a grievance in your firm? 30 a) You leave the matter to the parties b) You reprimand the parties c) You intervene and suggest solutions 2) I Involve my subordinates in my decision making process a Never b Sometimes Always 1,2 and points were assigned for the responses a), b) and c) respectively 3) a) Do you participate in Religious get -tog ethers? b) Are you a member of any professional association? c) Do you have friends among political or administrative authorities? point was assigned for every affirmative answer The total scores were ranging from 3-9 In this case the score categories were decided as, 3-4 Low, -7 Moderate, 8-9High The mental ability to see into the future and develop a vision is called conceptual skill It also encompasses the ability to analyze and diagnose complex situations The conceptual skills of the entrepreneurs were judged on the basis of the clarity in the future plans of their firm Information on clarity of the plans was obtained through question - what are your future plans for your firm? 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