The Impact of Perceived Behaviour Control and Subjective Norms to Entrepreneurial Intention

ESSAY 2: ENTREPRENEURIAL INTENTION

The impact of perceived behaviour control and subjective norms to Entrepreneurial Intention

Alda Ndoci

Anxhela Kalluҫi

Ardë Dragjoshi

Ardit Vraniҫi

Renilda Baba

UNIVERSITY OF TIRANA

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February, 2016

Abstract

Purpose - The purpose of this research is to examine the impact of perceived behavioural control and subjective norms to entrepreneur intention. This helps us to explore the links between subjective norms, perceived behavioural control and intention for new venture creation.

Hypotheses

H1: Subjective norms positively influence perceived behavioural control.

H2: Perceived behavioural control positively influences entrepreneurial intention.

H3: Subjective norms positively influence entrepreneurial intention.    

Methodology - A model based on Ajzen’s Theory of Planned Behaviour is applied. In an exploratory study, the impact of perceived behavioural control and subjective norms is examined in a sample of 63 students (MSc Business Administration and Public administration) in Albania.

Findings –We investigate the relationship between perceived behavioral control and subjective norms with entrepreneurial intention. The results show that subjective norms have a positive impact on entrepreneurial intention and this relation is statistically significant. On the other hand, perceived behavioural control has a positive impact but this is not statistically significant. This can be explained by the fact that entrepreneurial intention is also explained by some other factors, such as: personal skills, environment barriers, entrepreneurial education etc.

 Research limitations / Implications - Sample selection obtained in the study represents a very small number and it is not randomly selected. The study was restricted to students of Faculty of Economy in Tirana. It generated conclusions and recommendations, but these may not be more widely generalizable.

Key words: Entrepreneur intention, perceived behaviour control, subjective norms, Albanian students.

Introduction

Entrepreneurs are people who start up new businesses and are important for new wealth creation and economic development.  People (more specifically, entrepreneurs) are central to entrepreneurship. The entrepreneurial intention has been considered as the key element to understand the new-firm creation process (Bird 1988). Several researchers have pointed out that the decision to become an entrepreneur is a complex one, and it is the result of intricate mental processes.

 In this sense, the Theory of Planned Behaviour (Ajzen 1991) has been frequently applied to explain this mental process leading to firm creation. According to the ‘‘career choice’’ perspective, an individual’s decision to become an entrepreneur is assumed to be dependent on their prior decisions. Since the decision to become an entrepreneur may be plausibly considered as voluntary and conscious(Krueger 2000) intensions are often the best predictor of entrepreneurial behaviours (Ajzen 1991). Therefore, it seems reasonable to analyse how that decision is made.

Entrepreneurship may be viewed as a process that occurs over time (Gartner, Shaver, Gatewood, & Katz, 1994; Kyrö & Carrier, 2005 cited by (Liñán 2008). In this sense, entrepreneurial intentions would be the first step in the evolving and, sometimes, long process of venture creation (Lee & Wong, 2004 cited by (Liñán 2009). According to (Ajzen 1991, Liñán 2004) Theory of Planned Behaviour there are three antecedents of entrepreneurial intention: the attitude toward behavioural outcomes, the subjective norms, and the perceived behavioural control.

This study follows the cognitive approach through the application of an entrepreneurial intention model. In particular, it is focused on two specific factors: subjective norms and perceived behavioural control. So, the objective of this study is to explore the links between subjective norms (SN) and perceived behavioural control (PBC) to entrepreneurial intention (EI).

Theory and Hypotheses

 Entrepreneurship is exactly the type of behaviour where intentions are necessary, useful for understanding and anticipating future development. Entrepreneurial intention is the first step in the entrepreneurial process (Liñán 2009). It identifies the link between ideas and action which is critical for understanding the entrepreneurial process and it is described as a conscious awareness and conviction by an individual that they intend to set up a new business venture and plan to do so in the future (Bird 1988).

According to (Ajzen 1991) intention captures the degree to which people  show their motivation and willingness to execute the desired behaviour. Intention has also been defined as a state of mind that directs a person’s attention (and therefore experience and actions) toward a specific object (goal) or path in order to achieve something (e.g. becoming an entrepreneur) (Bird 1988).

Some modern theorists describe intention as one variable within larger psychological models. It has been advocated that cognitive models, in particular, the TPB  approach provides greater predictive capacity in explaining entrepreneurial intention and behaviour (Krueger 2000). This model has been supported by many research studies (Liñán 2008, Liñán 2009, Fretschner 2013).

As a general rule, the more favourable the attitude and subjective norm with respect to behaviour, and the greater the perceived behavioural control, the stronger should be an individual’s intention to perform the behaviour under consideration. On the other hand, in most of the studies, the best predictor of intentions has been perceived behavioural control (Krueger 2000, Liñán 2004).

Attitude: Attitude toward start-up (personal attitude, PA) refers to the degree to which the individual holds a positive or negative personal valuation about being an entrepreneur (Ajzen 1991). It includes not only affective (I like it, it is attractive), but also evaluative considerations (it has advantages). The attitudes refer to the evaluation of the entrepreneurial idea, whether favorable or not, made by the actor  in question (Ajzen 2002).