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ABSTRACT. Motivational conflict toward the involvement of women

entrepreneur in SMEs is getting the capital but the inner psychological drive that

mobilized their energy to venture becoming more prominent. Thus this paper attempts to empirically discuss the effect of environmental, financial and psychological factors in encouraging women to be in business.

With the understanding that traditionally, women in Asia are not encouraged to work but the trend of their involvement becoming more serious and relevant. Is it due to rising cost of living? Is it due to the nature of industries requiring them to be in the business? Is it just to pass the leisure time? Despite the decision to start one’s own business has long been regarded as a high-risk decision to make but facts and figures indicates that, women nowadays are involving in business twice as fast as men.

Previous studies demonstrate various implications for motivation to be in business. The finding of the study technically demonstrate that psychological and environmental factors are very relevant, whereas the possibilities of financial factors may be very limited across the region.

While it is possible that the entrepreneurship venturing always relate to male but the impact of the women entrepreneur on the development and subsequent success in new venturing has been demonstrated in certain business sectors which reflects their strength, limitation, commitment and best practices Keywords: women entrepreneur, motivation, financial, situational, psychological Introduction The term entrepreneur has several prominent explanations, depending on the context of its role. The earliest definition viewed entrepreneurship as someone who specializes in bearing residual risk (Knight, 1921). While Alchian and Demsetz (1972) viewed entrepreneur as a monitor with the principal task of ensuring that all assembled factors of the firm provide the promised level of services. Another view as articulated by Kirzner (1984) describe it as a specialist in exploiting profit opportunities, including arbitraging price differentials and developing new products and organizations forms.

Associate Professor, Faculty of Business Management, Universiti Teknologi Mara Terengganu, Malaysia, e-mail: norudinm@tganu.uitm.edu.my


The estimation number of women in Malaysian labor market (employers and workers), as alluded by Intan Osman (I994) for the year1990 was 1.9 million.

Following the steady economic growth of the nation, the expected figure by the year 2020 may be reaching up to 4.0 million. An estimation based on the work of Zarina Salleh et.al (2004) believed that at least there were 36,000 women employers for the year 2001 and with the 12% increased yearly it can be projected there were roughly 50,000 registered women involved in business by the year

2004. As for the state of Terengganu alone, the estimated population by Norudin Mansor and Jamaludin Akbar (2004) reported that it is approximately 73,454 women are in the labor market. Out of the total workforce, about 25% of them are involved in their own business (registered and unregistered). The work of Wirtz and Lovelock (2001) clearly demonstrated that more women are entering into the labor market. However, the current technological development, somehow threatened the job market opportunities. As a result, most of these women choose to start their own business and become and entrepreneur.

Studies concerning women entrepreneurship began since 1970s and continued into the 1980s (Christmen et.al. 1990). Many of the studies until today focused on personality characteristics or factors affecting the start-up of businesses (Sexton and Bowman-Upton, 1990) and some others focusing the need for assistance, problems in marketing, business planning, securing financing (Aldrich, 1989). It could therefore be very interesting to focus this paper based on different variables such as psychology, environment, and financial resources as the determinants for motivating women to venture into business.

Materials and Method What motivate women to venture?

Motivation may be expressed in various ways such as the aspirations or behavioral intentions Davidson (1991). If the individual believes that growth led to the fulfillment of personal goals than motivation is enhanced and it stimulate the growth for the business activities and the decision to become an entrepreneur based on product of a number of circumstantial factors are established. Others reported that among factors that contribute directly to venture include choice of business, education and experience, collaboration, location, starting capital, external forces, greater career advancement, freedom and flexibility, and increased in economic reward (Morrison et.al, 1992).

Despite of threats and opportunities that the businesses are offering, still most women that ventured into business are believed to be handicapped in term of appropriate exposure especially with prior business related experiences in the areas that they involved (Watkins and Watkins, 1986). As the result, women entrepreneur are forced to only focus on limited scope of “traditionally” women sectors such as in the service industry.


Earlier evidence from some studies hypothesized that the most critical factor behind the involvement of women into entrepreneurship was due to dissatisfaction with the previous job (Stoner and Fry, 1982) since the need for corporate “rightsizing” tend to reduce opportunities for hierarchical advancement in a corporate sectors (Harvey and Evans, 1995). Reviewing on the finding by Carland et.al (1984), the principal goals of an entrepreneurial venture are growth, profit and innovative strategies. While Cooper (1983) suggested that among important elements that motivate someone to venture into business include the need to improve the quality of living, migrating from urban to rural, to continue day to day life activities within moderate economic climate and others which are non economic factors. Other reasons for involving in entrepreneurship is rather a strong motivational factor which seems to be quite complex and thus acts as obstacles before and turn around to serve as internal pushing factors (Watkins and Watkins, 1986) while others are triggered by positive opportunities offered in business ventures.

Financial resources: Assigning the relative importance of financial aspect often act as one of the key indicators that could either encourage or discourage someone to venture into the business. What enumerates among the problems of the small firm including the lack of adequate finance for the initial start-up and subsequent expansion, disincentives of tax system, inhibiting effects of red tape and regulations (Bannock, 1981) and the failure in implementation of the policy that discriminate in favor of small firms. Other investigation concluded that obtaining a high profit and ability to create a successful business organization would further inspire someone to be an entrepreneur (Woo et.al, 1991). While Harvey and Evans (1995) believed that the financially independent career juncture that provides the individual with the economic freedom hampered them to be an entrepreneur.

When addressing the issue of securing financial resources, Blanchflower and Oswald (1994) assume that one of those factors that prohibit individuals from involving in entrepreneurship is because of financial reason. Humphreys and McClung, (1981) explained the reason for lacking of previous experience in the financial arena, and also lack of self-confidence in presenting their business plans causes for the failure.

Acknowledging the transparency of credit facilities offering to the women entrepreneur, evidence of the recent research suggested that biases against women in lending no longer exist like in the United States (Olm et.al 1988; Hisrich and Brush, 1987).

As a whole it can be conclude that entrepreneurs require financial assistance for the purpose of diversifying or spread the start-up risk, to accumulate start-up capital, and to finance growth and expansion (Gnyawali and Fogel, 1994).

Environmental Factors: The work of Keeble and Walker (1994) viewed environmental factors based on the development of local setting that actually stimulate local market. In fact some other earlier research demonstrated the relationship between local and the local environment with the economic development within the area. Among the environmental indicators that usually


contribute towards the decision for business venturing may include factors such as venture capital availability, presence of experience entrepreneurs, technically skilled labor force, accessibility of suppliers, accessibility of customers or new markets, government influences, availability of land or facilities, accessibility of transportation, new technological developments, availability of supporting services and living condition (Ronstadt, 1984).

Morky (1988) proposed that local communities are very relevant towards developing an entrepreneurial environment. In fact as mentioned by Swanson and Webster (1992) with the development of social prejudice against business entities may result to small business become a victim of unhealthy social justice. Hence, among the societies and cultures that support the value of entrepreneurship will develop a societal system that will encourage business entities to progress (Vesper, 1983).

Considering several research papers on environmental variables, broadly, it can be viewed into two environmental perspectives. One is an environment as an outside set of conditions to which the organization must adapt (Aldrich and Pfeffer, 1976; Hannan and Freeman, 1977). While the other perspective analytically considers the environment as a strategic choice of the opportunities availability via the selectivity of their own perceptions (Gartner, 1985).

Psychological factors: One of the crucial requirements for venturing into business is much related to propensity to enterprise and the ability to enterprise (Gnyawali and Fogel, 1994, Vesper, 1983). Focusing their discussion on the characteristics of entrepreneurs in determining what characteristics that really distinguished whether someone could be entrepreneurs or non-entrepreneurs, dimensions such as risk-taking propensity, locus of control, need for achievement (Dunkelberg & Cooper, 1982; Brockhaus, 1980; Timmons, 1978), and capacity to innovate (Schumpeter, 1934), seemed to be regularly addressed in research discussion.

However, indicators considering psychological measurement are not supposed to be isolated with other economic factors (Hornaday, 1990) and also the importance of social factors (Carsrud and Johnson, 1989). It is always been expressed by writers not only Hornaday (1990), but other researcher that when reviewing the development of SME in general and women entrepreneurs specifically a matrix of factors that correlate with each other and thus provide the strength of its contribution toward the success or failure of the business. Birley et al. (1987) suggest that even they are willingly to be in the business, but they need other enabling devices such as attending training programs that may assist them to put their ideas into effect.

Methodology The empirical evidence presented in this paper reflect the increased recognition of the important of several dimensions such as source of business financing, social psychological determinants, and environmental context which provides avenue for the willingness of women to venture in entrepreneurship field


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Fig. 1. A Framework For Describing Willingness To Venture In Business Upon reviewing the literature of the past studies, no doubt that it is an out growth of hundreds of Small and Medium Enterprise studies conducted throughout the world but interestingly to be noted that not much investigation had been seriously carried out in Malaysia, specifically focusing at the state level. Thus through this descriptive study dimensions such as financial capital, psychological and environmental criteria which are believed to pursuit the likelihood of women to actively involved in motivating entrepreneurship spirit among women in the state of Terengganu.

Specific Hypotheses In undertaking the investigation and understanding the knowledge about the strength as well as the significance of relationship, five hypotheses were formulated. As numerous literature failed to provide an agreeable finding of the related studies, we therefore believed that there are several possibilities expected from the finding. Thus the specification of the hypotheses formulated for this study is non-directional in nature.

H1: There is a significant relationship between psychology variables and entrepreneurship venturing H2: There is a significant relationship between financial capitals and entrepreneurship venturing.

H3: There is a significant relationship between environmental variables and entrepreneurship venturing.

H4: There is a significant difference in types of business towards entrepreneurship venturing H5: There is a significant difference between respondent education level towards entrepreneurship venturing Sampling and Data Collection Data for the study were collected through a field survey based on the sample frame derived from a list of business organization registered members in four (4) out of seven (7) districts in the state of Terengganu which is approximately


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