Thomas Molloy
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A research into the motivating factors of Irish entrepreneurs to start-up a
micro/small enterprise and their perception of the support provided by the Irish
Government.
Dissertation submitted in part fulfilment of the requirements for the degree of
Master of Business Administration
at Dublin Business School under the supervision of Eddie McConnon.
Thomas Molloy
Student Number: 1432742
Word Count: 22,819
Master of Business Administration 2016
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Declaration
I, Thomas Molloy, declare that the material, which is submitted in this assignment, is entirely
my own work and has not been submitted for any academic assessment other than as part
fulfilment of the assessment procedures for the program. In addition, I have referenced
correctly all literature and sources used in this work and this work is fully compliant with the
Dublin Business School’s academic honesty policy.
Signature of student: Thomas Molloy
Date: 22/08/2016
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Acknowledgements
First of all, I would like to thank my supervisor Eddie McConnon, who has provided support,
guidance, knowledge and patience, which has given me great confidence to complete the
dissertation.
I would like to extend my appreciation to all of the entrepreneurs and individuals who
participated in this study for their time and contribution.
I would also like to thank my parents for their love, support and encouragement to never give
up on pursuing my dreams and goals.
I dedicate this dissertation to my fiancée Rose, who inspires me everyday.
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Abstract
The Research sets out to examine the main motivational factors that influence entrepreneurs
to start-up micro/small enterprises and their perception of support from the Irish Government.
The researcher employed a mixed method aproach to the study by conducting 8 semi-
structured interviews with 5 entrepreneurs and 3 participants from the Department of
Enterprise, Innovation and Jobs (DJEI), the Economic Institute of Social Research (ESRI)
and the Central Bank of Ireland. A survey was conducted using a sample of 63 micro/small
business owners. Three follow-up interviews were then conducted with the entrepreneurs to
discuss the findings.
The research findings suggest that the entrepreneurs former place of employment is
inadvertinly creating entrepreneurs. The findings also suggest that self-efficacy and risk
taking is positively correlated to entrepreneurship, while simultaneously the fear of failure is
a factor for many Irish entrepreneurs. The need for achievement and observing successful
entrepreneurs were also prominent motivating factors for starting up a business. Having
exposure to mentors was negatively correlated to entrepreneruship and the findings in relation
to the economic environmnet being an influence on the entrepreneurs intention to start-up an
enterprise were inconclusive. Access to finace was important in the decision to start-up a
business for Irish entrepreneurs, however, the findings for Government support policies and
entrepreneurial education were inconclusive.
The findings of the study did not apply to all regions of Ireland, as the sample population was
primarily in the Dublin area. This research highlights the varying motivating factors that
influence entrepreneurs to engage in entrepreneurial activity while simultaneously exploring
the entrepreneurs’ perspective of Government support policies.
Keywords Entrepreneurs, Micro/Small Businesses, Intention, Mentors, Push and Pull factors,
Need for Achievement, Self-Efficacy, Government support policies, Entrepreneurial
Education, Access to Finance, Perception.
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Table of Contents:
Page No.
Cover Page ………………………………………………………………………………………………………… 1
Declaration
………………………………………………………………………………………………………… 2
Acknowledgements:
……………………………………………………………………………………………. 3
Abstract:
……………………………………………………………………………………………………………. 4
Table of Contents:
……………………………………………………………………………………………. 5-9
List of Figures:
…………………………………………………………………………………………………. 10
List of Tables: ………………………………………………………………………………………………….. 11
Glossary of Terms:
……………………………………………………………………………………………. 12
Chapter 1: Introduction ………………………………………………………………………………….. 13
1.0
Background
………………………………………………………………………………………. 13-15
1.1
Aim of the Research……………………………………………………………………………….. 15
1.2
Research questions and hypothesis
…………………………………………………………… 16
1.3
Rationale for the Research
………………………………………………………………………. 17
1.4
Contribution of the Study……………………………………………………………………. 17-18
1.5
Suitability of the Researcher
……………………………………………………………………. 18
1.6
Organisation of the dissertation
……………………………………………………………….. 19
Chapter 2: Literature Review
…………………………………………………………… ………….20
2.1 Introduction……..……………………………………………………………….20
2.2 Identifying an entrepreneur……………………………………………………….21
2.3 Identifying a micro/small enterprise…………………………………………….22
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2.4 Motivating factors of entrepreneurs to start-up an enterprise…………………….23
2.4.1 Intention……..………………………………………………………………23-24
2.4.2 Exposure to mentors………………………………………………………….24-25
2.4.3 Push and Pull factors…………………………………………………………25-27
2.4.4 Need for Achievement………………………………………………………27-28
2.4.5 Self-efficacy………………………………………………………………….28-29
2.5 Government policies towards micro/small enterprise owners in Ireland……….30
2.5.1 Government support and access to finance for entrepreneurs……………….30-31
2.5.2 Entrepreneurial education policies……….……………………………………31-32
2.6 Entrepreneurs perception of Government policy……………………………32-34
2.7 Conclusion……………………………………………………………………34-35
Chapter 3: Research Methodology
………………………………………………………. ………..36
3.0
Introduction………………………………………………………………………36
3.1
Research questions/hypothesis/objectives………………………………………36
3.2
Research Philosophy- Interpretivism and Subjectivism…………………………37
3.3
Research Approach- Inductive and Deductive………………..…………..…37-38
3.4
Research Strategy…………………………………………………………………………….. ..38-40
3.5
Time Horizon ………………………………………………………………………………………… 40
3.6
Population and Sample ………………………………………………………………………. 40-42
3.7
Data Collection, Editing, Coding and Analysis ………………………………………….. 42
3.7.1 Data Collection-Primary and Secondary data collection……………………….42
3.7.2 Qualitative Data Collection………………………………………………….42-43
3.7.3 Quantitative Data Collection…………………………………………………43-45
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3.7.4 Secondary Data Collection…………………………………………………..45-46
3.7.5
Editing …………………………………………………………………………………………………. 46
3.7.6 Coding and Analysis ………………………………………………………………………….. 46-48
3.8
Ethical Issues and Procedures
………………………………………………………………….. 48
Chapter 4: Data Analysis/Findings ………………………………………………………………. …49
4.1: Introduction
……………………………………………………………………………………………. …49
4.2: The Respondents (Qualitative) …………………………………………………………………. …50
4.3:The findings (Qualitative)
…………………………………………………………………………. …50
4.3.1: Intention theme ……………………………………………………………………………….. …50-51
4.3.2: Exposure to mentors theme……………………………………………………………….. …51-52
4.3.3: Push and Pull factor theme ……………………………………………………………………. …52
4.3.4: Need for Achievement theme ……………………………………………………………. …52-53
4.3.5: Self-efficacy theme ………………………………………………………………………….. …53-54
4.3.6: Government support and access to finance theme
………………………………… …54-56
4.4: The Respondents (Quantitative) ……………………………………………………………….. …57
4.5: The Findings (Quantitative)
……………………………………………………………………… …57
4.5.1: Respondents profile …………………………………………………………………………. …58-60
4.5.2: Intention theme ……………………………………………………………………………….. …61-62
4.5.3: Exposure to mentors theme……………………………………………………………………. …63
4.5.4: Push and Pull factor theme ……………………………………………………………….. …64-65
4.5.5: Need for Achievement theme ………………………………………………………………… …66
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4.5.6: Self-efficacy theme ………………………………………………………………………….. …67-69
4.5.7: Government support and access to finance theme
………………………………… …70-71
4.6: Follow-up Interviews (Qualitative) …………………………………………………………… …72
4.6.1: The Findings (Qualitative)
…………………………………………………………………….. …72
4.6.2: Intention theme ……………………………………………………………………………….. …72-73
4.6.3: Exposure to mentors theme……………………………………………………………………. …73
4.6.4: Push and Pull factor theme ……………………………………………………………….. …73-74
4.6.5: Need for Achievement theme ………………………………………………………………… …74
4.6.6: Self-efficacy theme ………………………………………………………………………………. …75
4.6.7: Government support and access to finance theme
………………………………… …75-77
Chapter 5: Discussion ………………………………………………………………………………….. …78
5.1: Introduction
……………………………………………………………………………………………. …78
5.2: Intention ……………………………………………………………………………………………. …78-79
5.3: Exposure to mentors ……………………………………………………………………………….. …80
5.4: Push and Pull factors…………………………………………………………………………… …80-82
5.5: Need for Acheivement ………………………………………………………………………… …82-83
5.6: Self-efficacy
………………………………………………………………………………………. …83-84
5.7: Government support and access to finance…………………………………………….. …84-86
5.8: Limitations ………………………………………………………………………………………… …86-87
Chapter 6: Conclusion/Recommendations ……………………………………………………. …88
6.1: Conclusion ……………………………………………………………………………………….. …88-93
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6.2: Recommendations
………………………………………………………………………………. …93-95
Chapter 7: Reflection
…………………………………………………………………………………… …96
7.1: Introduction
……………………………………………………………………………………………. …96
7.2: Self-reflection on learning style
……………………………………………………………. …96-97
7.3: Skills Development
…………………………………………………………………………………. …97
7.3.1: Research skills …………………………………………………………………………………….. …97
7.3.2: Problem solving skills
………………………………………………………………………. …97-98
7.3.3: Time management skills ……………………………………………………………………….. …98
7.3.4: Team working skills…………………………………………………………………………. …98-99
7.4: Future application of learning and skills development………………………………99
8.0 Bibliography………………………………………………………………….100-117
9.0 Appendices……………………………………………………………………118-142
Appendix 1 Learning style of the researcher……………………………………………118
Appendix 2 Details of the qualitative interview participants……………………….119-122
Appendix 3 Questions for the qualitative interviews………………………………123-125
Appendix 4 Consent forms for the qualitative participants…………………………126-134
Appendix 5 Questionnaire…………………………………………………………135-137
Appendix 6 Honey and Mumford learning style questionnaire……………………138-142
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List of Figures:
Page No.
Figure 1: Micro/Small enterprise criteria. ……………………………………………………..
22
Figure 2: Micro/Small enterprise statistics Ireland 2012.. ………………………………….
22
Figure 3: Exploratory Sequential Design Model ……………………………………………..
39
Figure 4: Elements/Units/Extent and Time…
…………………………………………………
41
Figure 5: Research questionnaire experiment participants
………………………………….
44
Figure 6: Questionnaire Design. …………………………………………………………………
45
Figure 7: Gender Demographic ………………………………………………………………….
58
Figure 8: Age Demographic ………………………………………………………………………
59
Figure 9: Company Size …………………………………………………………………………..
60
Figure 10: Intention theme findings …………………………………………………………….
61
Figure 11: Intention theme findings …………………………………………………………….
62
Figure 12: Exposure to mentors theme findings
………………………………………………
63
Figure 13: Push factor theme findings ………………………………………………………….
64
Figure 14: Pull factor theme findings …………………………………………………………..
65
Figure 15: Need for Achievement theme findings
……………………………………………
66
Figure 16: Self-efficacy theme findings
………………………………………………………..
67
Figure 17: Self-efficacy (Risk-taking) theme findings
………………………………………
68
Figure 18: Self-efficacy (Fear of Failure) theme findings ………………………………….
69
Figure 19: Government Support and access to finance theme findings …………………..
70
Figure 20: Government Support and access to finance theme findings …………………..
71
Figure 21: Honey and Mumford learning style model ………………………………………
96
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List of Tables:
Page No.
Table 1: Gender Demographic
…………………………………………………………………..
58
Table 2: Age Demographic ………………………………………………………………………..
59
Table 3: Company Size …………………………………………………………………………….
60
Table 4: Intention theme finding
………………………………………………………………….
61
Table 5: Intention theme finding
………………………………………………………………….
62
Table 6: Exposure to mentors theme finding …………………………………………………..
63
Table 7: Push factor theme finding ………………………………………………………………
64
Table 8: Pull factor theme finding
………………………………………………………………..
65
Table 9: Need for Achievement theme finding ………………………………………………..
66
Table 10: Self-efficacy theme finding …………………………………………………………..
67
Table 11: Self-efficacy (Risk-Taking) theme finding ………………………………………..
68
Table 12: Self-efficacy (Fear of Failure) theme finding
……………………………………..
69
Table 13: Governmnet support and access to finance theme finding ……………………..
70
Table 14: Governmnet support and access to finance theme finding ……………………..
71
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Glossary of Terms
CEO: Chief Executive Officer
COO: Chief Operating Officer
CSO: Central Statistics Office
DJEI: Department of Jobs, Enterprise and Innovation
ESRI: The Economic and Social Research Institute
EU: European Union
ISME: Irish Small and Medium Enterprise
GDP: Gross Domestic Product
GEM: Global Entrepreneur Monitor
LSQ: Learning Styles Questionnaire
OECD: Organisation for Economic Co-operation and Development
SFA: Small Firms Association
SME: Small and Medium-Sized Enterprises
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Yalcin and Kapu (2008, pp. 185-193) state that the motivations and challenges associated
with entrepreneurial activity are two key components that need to be considered when
investigating entrepreneurship. Motivation can be a permeating factor within an individual
that assists in overcoming impediments towards entrepreneurship (Fayolle and Linan, 2014,
pp. 684-685; Kim, 2012, p. 51). However, Kirkwood (210, pp. 207-208) infers that cognizing
the motivating factors that lead to entrepreneurship is an intricate progression.
De Pillis (2007, pp. 392-394) posits that the personality traits of an individual alone is not a
sufficient indicator to determining entrepreneurship motives which is contrary to Frese’s
(2009, pp, 438-439) contention that examining psychological traits can assist in cognizing the
entrepreneurial actions of individuals. These contentions propelled the researcher to focus on
the first part of the research study, which is an investigation into the main motivational
factors that influence individuals to start-up micro/small enterprises in Ireland.
A report by the Entrepreneurship Forum (2014) established by the Department of Jobs,
Enterprise and Innovation (DJEI) highlights how the rate of entrepreneurs starting-up new
enterprises has been declining in recent years. According to the Companies Registration
Office (CRO, 2012), new company registrations in Ireland decreased by 4.2% from 2011 to
2012. The Central Statistics Office (CSO, 2012) published figures that stated start-up
enterprises decreased from 16,700 in 2006 to 11,200 in 2010.
A report by the Global Entrepreneur Monitor (GEM, 2014) on entrepreneurship in Ireland
stated that 24,400 individuals started a new business in 2014. The report also stated that 77%
of nascent entrepreneurs are positively motivated to start-up a business as opposed to 23% of
nascent entrepreneurs who are motivated by necessity. The report also highlights how Ireland
has a supportive culture towards Entrepreneurship. These statistics and reports influenced the
researcher to focus the study towards the second part of the research, which investigates to
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what extent of an entrepreneur’s perception of Government support in Ireland influences their
motivation to start-up an enterprise.
Research conducted by Estay (2013, pp. 246-247) extrapolated that the entrepreneur’s
perception of the business environment significantly determines their level of motivation for
wanting to start up a business. This contention influenced the researcher’s decision to
amalgamate the first and second part of the research into an investigation of the motivating
factors of Irish Entrepreneur’s to start-up a Business and their perceptions of Government
support.
The topic of Motivation alone encompasses a wide range of research study, which ultimately
persuaded the researcher to narrow down the research to the main motivating factors that
influence entrepreneurs to start-up an enterprise and their perception of Government support.
Through researching numerous articles, journals and papers on the topic, the researcher
focused the first part of the study to the following motivating factors of entrepreneurial
intention (Malebana, 2014, pp. 709-714; Fayolle and Linan, 2014, pp. 663-665), exposure to
mentors (McKevitt, 2015, pp. 264-266), push and pull factors (Block, 2015, p. 38), need for
achievement (Taormina, 2007, pp. 202-209), and self- efficacy (Drnovsek, 2010, pp. 329-31).
The second part of the study focused on government/education policies and access to finance
(DJEI, 2014; Heinonen, 2010, p. 1166), and the entrepreneur’s perception of that
Government support (Taormina, 2007, pp. 204-216). Government support policies and
entrepreneurial education policies encompass Government branches and agencies like the
Department of Enterprise, Jobs and Innovation (DJEI), the Local Enterprise Office (LEO),
the small firm’s association (SFA), the Irish small and medium sized enterprises (ISME) and
Microfinance Ireland that offer training, support and funding to entrepreneurs who want to
start-up a business. Access to finance was amalgamated with Government support policies as
both topics of support and resources were interconnected when the researcher analysed the
secondary research as agencies like Microfinance Ireland and banking institutions are
monitored by the Irish Government to provide funding to entrepreneurs (The National Policy
Statement on Entrepreneurship in Ireland, 2014).
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The reasoning behind focusing on the aforementioned areas of inquiry was due to the
frequency of these motivating factors materialising throughout the research. This ultimately
emboldened and influenced the researcher to choose this course of study, which could assist
in identifying the main motivational factors that propel individual towards entrepreneurship
and to ascertain the extent to which an individual perception of Government support
influences their motivation towards entrepreneurship.
According to Eriksson & Kovalainen (2008, p. 37-39) the purpose of the research question is
to acquire and develop new information and knowledge from existing information on the
topic of study with the objective of formulating your findings to enable you to complete your
study of the topic. The purpose of this research is to identify the motivational factors that
ultimately persuade entrepreneurs to start-up micro/small enterprises (Van Gelderen and
Jansen, 2006, pp. 23-32). The aim of the research is to provide a better understanding of the
psychological characteristics that influence the decision for starting up a small firm and the
motivational drivers that facilitate that decision (Atherton, 2007, pp. 404-417).
The research objectives also investigated the perceptions of individuals to Government
support in starting up a micro/small enterprise in Ireland. Taormina and Kin-Mei Loa (2007,
p. 200-202) highlight that measuring the two different variables of personality traits and the
economic environment is difficult due to the variances of micro and macro levels. The
researcher adapted Taormina and Kin-Mei Loa’s (2007, pp. 200-221) proposal by evaluating
the economic environment by cognizing the entrepreneur’s perception of the economic
environment instead of the macro-economic factors. This allowed the researcher to narrow
down the research to entrepreneur’s perception of Government support made available to
them. This paper aims to identify and explore the motivations of Irish entrepreneurs for
starting up an enterprise and their perceptions of support from the Irish Government.
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The researcher focused on the following research questions and hypothesis:
Q1: What are the main Motivational factors that influence an individual to start-up a
micro/small firm in Ireland?
H1: The main motivating factors investigated are highly correlated with the decision
to start-up an enterprise. Hypothesis 1 adapted from (Atherton, 2007; Heinonen,
2010; Taormina, Kin-Mei Lao, 2007; Hessels, 2008; Van Gelderen, 2006; Kirkwood,
2009; Drnovsek, Wincent and Cardon, 2010)
Hair (2007, pp. 91-92) promotes the notion that the researcher should cogitate the outcome of
the investigation when considering the research objectives as an explicit and compelling
objective can exhibit credibility to the research topic. The research objective for Q1/H1 is to
identify the motivating factors that influence the decision of an individual to become an
entrepreneur.
Q2: To what extent do an entrepreneur’s perceptions of Government support policies and
access to finance influence his/her motivation to start-up a business?
H2: Government support policies and access to finance are positively correlated with
the decision to start-up a business. Hypothesis 2 adapted from (Taormina, Kin-Mei
Lao, 2007; Nabi & Linan, 2013)
The research objective for Q2/H2 is to narrow down the research by exploring the
perceptions of Irish Entrepreneurs to Government support policies and explore if these
perceptions have any influence on their motivation to start-up an enterprise.
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Burton (2016, pp. 239-240) advances that premise that entrepreneurship can offer individuals
an alternative career choice or act as a stopgap between career opportunities depending on
where the individual’s profession has progressed to at a specific point in time. Sorensen and
Sharkey (2014, pp. 328-349) posit that opportunity structures such as pay, mobility and
career advancement within the individuals’ workplace can influence the transition from paid
employment to entrepreneurship. The rationale for the research stemmed initially from the
researcher’s tentative contemplation of leaving a secure job to start up a micro/small
enterprise. The motive for doing so was consonant to Gomezelj’s (2013, p. 907) description
of entrepreneurship which offers an individual a viable career option after resigning from
one’s place of employment.
A study conducted by Sharma and Madan (2013, pp. 25-27) into student’s perceptions of
barriers to entrepreneurship found that the type of personality trait strongly influenced the
individual’s perceptions of barriers to entrepreneurship. From preliminary investigations into
the topic, the reasoning for the research digressed into a genuine interest into the
psychological traits that influence the decision of entrepreneurs to take the initial step from
pre start-up to the actual start-up phase of starting a business and their perceptions of
Government support.
The justification for conducting the research was to understand the motivations of
entrepreneurs to start-up a business and to determine the challenges that entrepreneurs face in
accessing support and funding to starting up an enterprise. By attempting to ascertain these
motivating factors and perceptions of government support from a wider population sample of
entrepreneurs could assist the researcher to understand his own motivations for wanting to
start-up a business and further illuminate the topic of study for the benefit of other potential
entrepreneurs and practitioners, students and academics.
Global economic ambiguity and employment insecurity underlines the need for individuals to
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create self-employment opportunities for the objective of sustaining growth and generating
job opportunities (Samujh, 2011, p. 24). In Ireland, micro/small enterprises account for
98.4% of total businesses (CSO, 2012). A report by the GEM (2014) stated that one in ten
individuals under the age of 35 in Ireland aspire to be an entrepreneur. Bird (2009, pp. 327-
328) denotes the importance of ascertaining entrepreneurial activities, which ultimately lead
to job creation, competition among existing firms and variety of choice for the end consumer.
The impact of entrepreneurship to Ireland’s economic growth and job creation has influenced
the researcher’s decision to investigate the motivational factors and perceptions that can
either expedite or impede the decision of a potential entrepreneur to pursue a path towards
entrepreneurial activity (Staniewski, 2015, p. 584).
The research will look to demonstrate or disprove the correlation of various motivational
attributes towards entrepreneurs starting up an enterprise. The relevance of the research can
be beneficial, as it will look to ascertain if Government support policies are supportive of
entrepreneurship in Ireland. The Researcher is attempting to establish if there are conflicting
views concerning Irish entrepreneur’s perceptions of Government support policies. The
Research can give simultaneous insight into motivational factors that propelled micro/small
firm owners/managers to take the step from pre start-up to actual start-up and their
perceptions of Government support (Nabi & Linan, 2013, pp. 633-655).
The researcher obtained a BA Honours degree in Business Management from Dublin
Business School in 2013, which was intended to be the catalyst for establishing a new
micro/small enterprise but it, was decided to study for an MBA with the objective of further
enhancing my ability to achieve my initial objectives. The Researcher has worked for over 12
years with different micro/small enterprises in Dublin port and has witnessed at first-hand
how these small firms had failed to continue to maintain viability due to financial constraints
and a lack of support that could have enabled innovation and expansion of their businesses
into sustainable entities. The researcher took a personal learning style test from Pearson Tutor
Services (2012) which indicated a tactile learning style, which equates to a preference for
interactive and activity based learning (See Appendix 1, p. 118 for Test results). The
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researcher will apply an inductive and a deductive research approach in a sequential manner,
as this will benefit the learning style of the researcher.
This section presents an outline of the chapters that will be covered in the dissertation.
Chapter 1: This Chapter provides an overview of the research problem and an outline of the
research objectives, rationale, contribution, suitability of the researcher to the research.
Chapter 2: This chapter critically examines the available information, literature and existing
theories related to the research topic. The literature review assisted the researcher in the
conceptualising of the research questions and hypothesises in addition to the formulation of
the questions for both the qualitative interviews and quantitative questionnaires.
Chapter 3: The main purpose of this chapter was to justify and explain the methodology
choices employed in gathering data for the research. It discusses the research philosophy,
approach, strategy, data collection techniques employed, sample population and ethics in
conducting this research.
Chapter 4: This chapter presents the findings of the research retrieved from the mixed
methods research. It explains the answers to the research questions.
Chapter 5: This chapter presents a detailed and comprehensive discussion of the findings of
the research question with an examination of the limitations, contribution and implications of
the researcher’s work.
Chapter 6: This chapter contains the conclusions drawn on the analysis and findings from
chapter 4. The chapter also provides recommendations that can be made from the research
topic.
Chapter 7: This chapter presents a self-reflective learning section encompassing the
researcher’s personal learning experiences and skills developed throughout the MBA module
course and dissertation process.
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The Literature review comprises of secondary data sourced for the dissertation with the aim
of ascertaining the main premises and theories under research. The main purpose of the
literature review is to both substantiate the research subject and to clarify and ensure that the
research question and hypothesis are corroborated in existing research and that there is
consistency between the literature review and the rest of the dissertation (Saunders, 2009, pp.
61-66). Sanchez (2012, pp. 132-134) argues that the decision to start-up an enterprise is based
on the individual’s internal motivations and their perspicacity to the environmental
conditions. The researcher elected to disseminate the theory of motivating factors for
entrepreneurial start-up under several headings in the literature review. The purpose of
utilising this approach was due to contrasting and differing motivational tendencies of
individuals towards entrepreneurship (Raposo, 2008, pp. 405-408).
Section 2.2 and 2.3 of the literature review characterises an entrepreneur and identifies the
criteria of micro/small Businesses in Ireland. Section 2.4 is disseminated into five sections of
intention, exposure to mentors, push and pull factors, need for achievement and self-efficacy,
which examine the varying motivating factors of entrepreneurs to start-up a micro/small
business. Section 2.5 discusses government support and access to finance for entrepreneurs
and education policies towards entrepreneurship. Section 2.6 examines the perceptions of
entrepreneurs to Government support. Section 2.7 concludes with a summary of the previous
sections.
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“the entrepreneur always searches for change, responds to it and exploits it as an
opportunity” (Peter Drucker, 1985)
According to Kraus (2011, p. 65) an entrepreneur strives to identify and exploit opportunities
in the market while implementing the vision, mission and strategic direction of the Business.
Carsrud (2011, p. 10) posits that personality traits can be explored to cognize entrepreneurial
behaviour within individuals. Various psychological attributes such as the need for autonomy
(Decker, 2012, p. 312), need for achievement (Marrazrol, 2009, p. 322), push and pull
factors, (Hessels, 2008, pp. 325-326), self-efficacy and a propensity for risk taking (Bryant,
2007, p. 735; Tanveer, 2013, p. 718), are linked to the motivation of potential entrepreneurs
to start-up a business.
Research conducted by Block (2015, p. 198) found that entrepreneurial activity is contingent
on the individual’s mind-set towards risk taking, which is analogous to Dalborg’s (2015, pp.
88-90) postulation that entrepreneurs differ in their attitude towards risk taking. Franco
(2014, pp. 270-271) argues that the attitude of the entrepreneur is orientated towards
innovation with a focus on long – term growth. Blackburn (2013, pp. 8-27) asserts that the
understanding of the entrepreneur’s characteristics will help cognise the potential for business
development and growth. Characteristics including age, gender and the attainment of a
higher-level education can correlate to successfully developing an enterprise.
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According to the European Commission (2003), Small and medium-sized enterprises (SMEs)
are defined as “enterprises which employ fewer than 250 persons and have an annual
turnover not exceeding EUR 50 million and/or an annual balance sheet total not exceeding
EUR 43 million”. The Researcher will focus on Micro and Small Enterprises, which are
defined by the following criteria seen below in Figure 1:
Micro and Small Enterprises account for 98.4% of the total enterprises in Ireland, which is
49% of the workforce and 29.3% of the annual turnover (The Central Statistics Office (CSO),
2012). See Micro/Small Enterprise Statistics in Ireland for 2012 below in Figure 2:
Blackburn (2013, pp. 8-27) states that innovative small firms are at an advantage compared to
larger firms in that they are more adaptable to finding new niches and opportunities in the
marketplace. McKevitt (2015, p. 264) argues that newly created small start-up firms are
susceptible to failure due to the difficulties in accessing funding and inadequate skills with
regards to financial and strategic planning. Integrating micro/small enterprises into the
0
50
100
Total
Enterprises
Workforce
Annual
Turnover
Irish Micro/Small Enterprise Statistics 2012 %
Thomas Molloy
Page 23
research topic was important due to their contribution to economic prosperity of nations
throughout the globe (Gill, 2012, p. 657; Daskalakis, 2013, pp. 80-82).
Ajzen’s (1991) theory of planned behaviour (TPB) advances the premise that an individual’s
intention towards instigating a certain behaviour is an indication of the level of exertion that
an individual is willing to apply in order to implement the action. The TPB model
encompasses three components of attitude, subjective norm and perceived behavioural
control (PBC), which are mediated by the individual’s intention towards performing a
specific behaviour (Ajzen’s, 1991, pp. 181-189). Findings from a study conducted by Karimi
(2014, p. 713) into the effects of role models on students’ entrepreneurial intentions found
that observing entrepreneurial role models can positively influence the TPB components of
attitude, subjective norms and PBC which enhances the entrepreneurial intention of the
student. However, Kautonen (2013, pp. 655-666) urges caution to this approach as he
suggests that the process of starting up an enterprise has many complexities attached to it and
merely intending to start-up a business may not be the actual initial reason for engaging in
entrepreneurial activity.
Atherton (2007, pp. 406-408) introduces the premise that a change in the personal attitude of
the potential entrepreneur progresses through a transitional phase of pre-start to a start-up
phase in which the individual evolves from a mind-set of no interest towards interest in,
engagement with and then actively committing to starting up an enterprise. A study
conducted by Kautonen (2011, pp. 697-707) into predicting entrepreneurial behaviour, found
a positive correlation between entrepreneurial intention and a favourable attitude towards
entrepreneurship. These findings are corroborated by Debrarliev’s (2015, pp. 147-158) study
on entrepreneurial intention, which found that the personal attitude of the potential
entrepreneur is positively correlated to entrepreneurial intentions.
The subjective norm component of the TPB model denotes an individual’s perception of
performing a certain behaviour and how this behaviour is perceived or approved by various
actors in the social environment such as family members, friends, colleagues and mentors
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(Malebana, 2014, p. 713; Auzolt, 2015, p. 316). Atherton (2007, pp. 405-406) states that the
personal experiences of an individual with regards to education, associations, relationships
and observations prior to engagement in starting up an enterprise can influence the likelihood
of that individual starting up a business. Various studies on entrepreneurial intentions among
students found that subjective norms were a pertinent factor on the student’s intention to
engage in entrepreneurial activity as support and encouragement from family, friend and
contemporaries played a key role in augmenting the student’s intention towards
entrepreneurship (Yang, 2013, pp. 371-373; Bagheri, 2015, pp. 23-25).
Higgins (2011, p. 358) argues that the potential entrepreneur needs to understand their own
preconceptions of entrepreneurship and establish if these beliefs are compatible to starting up
an enterprise. Ajzen (1991, pp. 183-189) describes PBC as the individual’s assessment of
how difficult or easy the enactment is of a specific behaviour. Kwong (2012, p. 77) posits
that PBC is a key attribute to determining the individual’s intention to start-up an enterprise.
Contrary to Kwong’s (2012, p. 77) assertion, various authors surmise that perceived
behavioural control is not always positively correlated with entrepreneurial intentions where
there are cultural anxieties concerning future opportunities (Agolli, 2015), and when the
behaviour is under complete volitional control (Armitage, 2001, p. 473; Kolvereid, 2005, p.
882).
Carsrud (2011, pp. 10-12) contends that a correlation exists between motivation, intentions
and actions of an entrepreneur. Malebana (2014, p. 710) infers that an individual’s perception
of the environment can influence their intention towards pursuing entrepreneurship. Krueger
and Brazeal (1994, p. 97) suggest that potential entrepreneurs who are focused in their
intention to start a business are inclined to have explored and examined all barriers associated
with starting a new venture. This contention coincides with Brandstatter’s (2010, p. 228)
concept that the intent to start-up an enterprise is contingent on the individual’s cognitive
abilities towards the perceived desirability and feasibility of the venture.
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Page 25
McDevitt (2015, pp. 264-266) describes mentoring as a process of transferring knowledge for
the objective of identifying the nascent entrepreneur’s own skills and abilities and to focus on
long-term goals. Summatavet (2015, p. 36) posits that the role of a mentor is to provide
support and give advice to the nascent entrepreneur for the objective of being able to sustain
the burgeoning enterprise through its initial stages. Tang (2008, p. 131) highlights that
exposure to an environment of experienced and successful entrepreneurial mentors can entice
the potential entrepreneur to start-up a business. Rigg (2012, p. 323) subscribes to this
contention as she posits that mentors play a crucial role in the support and development of
entrepreneurs. However, the mentoring process may not be compatible to every aspects of
entrepreneurship counselling, as the mentor’s experience may not coincide to the nascent
entrepreneurs needs (Thompson, 2007, pp. 553-554). St-Jean (2009, p. 150) advances the
notion that regardless of the mentor’s skills and abilities, the potential entrepreneur must be
amenable to the mentor and mentoring process in order for the scheme to be successful.
Research conducted by Smith and Paton (2011, pp. 107-109) focuses on how an individual
acquires knowledge of experiential learning from observations of mentors which can expedite
reflection and knowledge within the potential entrepreneur. A National Policy Statement on
Entrepreneurship in Ireland (2014) commissioned by the DJEI states that the Irish
Government is promoting entrepreneurial role models and mentors. The objective of this
policy is to cultivate an environment to potential entrepreneurs that is receptive to positive
attitudes towards risk taking with an emphasis on understanding business and financial
management. Various authors have supported these recommendations put forward by the
Irish Government, as they posit that having a close acquaintance with entrepreneurial mentors
and experiencing their practises up close can help develop and engage the nascent
entrepreneur into the start-up phase of entrepreneurship (Rigg (2012, pp. 324-325; St-Jean,
2011, pp. 38-45).
Culkin and Smith (2000) argue that the motivation to start-up an enterprise has complexity
attached to the decision, as there is an indissoluble link between the personal life of the
entrepreneur and the business. Hessels (2008, pp. 325-326) postulates the pull factor of
autonomy as a pertinent motive for staring up a new enterprise as it allows the potential
