Factors Motivating Tanzanian Women to Become Entrepreneurs
CERTIFICATION
The undersigned certifies that he has read and hereby recommend for acceptance by the Open University of Tanzania the Dissertation titled: “Factors Motivating Tanzanian Women to become Entrepreneurs: A case study of Mwenge Makonde Carving market and Kariakoo women owned clothing shops” submitted to the Open University of Tanzania for partial fulfillment of the requirements for the Master Degree in Business Administration.
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Dr. Felician Mutasa
SUPERVISOR
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DECLARATION
I, Fatma Hajji Shangazi, declare that this dissertation is my own original work and that it has not been presented and will not be presented to any other University for a similar or any other degree award.
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Fatma Hajji Shangazi
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ACKNOWLEDGEMENT
I would like to sincerely thank my supervisor Dr. Felician Mutasa, who provided me with constructive criticism, guidance, and technical assistance at all stages of this research. His moral courage and remarkable patience will always be appreciated. The success of this work was also contributed by John Haraba and Salim Makoko who assisted me during the field work,for this I wish to thank them. I also extend my thanks to my husband Abdul Mgheni and my daughters Atika and Yusra.All these tolerated the numerous times which I was supposed to give them full attention, but nevertheless they appreciated all to ensure that I complete my study. I also express my heartfelt appreciation to Mariam and Emmy on behalf the women entrepreneurs at Kariakoo and Mwenge Makonde carvings market who devoted their time to participate in this study.
ABSTRACT
Entrepreneurship in Tanzania is increasing exponentially as the country transitions from an agriculture-based economy to a market-based economy. Most of the growth is being spearheaded by young women selling agricultural and home-based goods such as catering and arts and crafts. The objective of this research was to examine the motivational factors for Tanzanian women to become entrepreneurs. It also sought to find out the link between motivational theories and practical examples. The research methodology employed was mainly qualitative. The methods used in data collection were interviews, questionnaires and in-depth interviews.
The study areas were Mwenge makonde carvings market and Kariakoo women owned clothing shops both in Dar es Salaam, respondents were selected using purposive sampling. The results revealed that a majority of women entrepreneurs in these two businesses fall in the 35 or below age brackets earn between Tsh.20-50 million per year, have primary or more education level. They are driven more by desire to do business, doing the job they liked, and supplementing the family income. Almost all issues are comparable to what has been studied in other countries. The study provides practical examples of the attitudes, view points and experiences of the two groups of women entrepreneurs both working in Dar es Salaam. Moreover, the research presents a clear insight into entrepreneurial values and the urge to work and continue as entrepreneurs.
The research is recommending that efforts should be made by the Ministry of Education to introduce curriculum changes to accommodate entrepreneurial studies from primary schools, and also as the policy recognizes that women have less access to productive resources due cultural barriers and pointed out that gender mainstreaming will be enhanced in all initiatives pertaining to SME development; this should not only be in papers but be in practice so that women entrepreneurship is promoted through training especially at starter up, easy access to financial facilities and reliable markets for their products locally and internationally.
ACRYONIMS AND ABBREVIATIONS
|BDS |Business Development Services |
|BET |Board of External Trade |
|BRELA |Business Registration and Licensing Authority |
|CAMARTEC |Centre for Agricultural Mechanization Rural Technology |
|CTI |Confederation of Tanzania Industries |
|EOTF |Equal opportunity for All Trust Fund |
|ESRF |Economic and Social Research Foundation |
|FAMOS |Female and male operated small enterprises |
|FAWETA |Federation of Association of Women Entrepreneurs in Tanzania |
|GDP |Gross Domestic Product |
|ILO |International Labour Organization |
|ISOs |Industrial Support Organizations |
|MITM |Ministry of Industry Trade and Marketing |
|MSEs |Micro and Small Enterprises |
|MSFs |Micro and Small Farms |
|MSMEs |Micro Small and Medium Enterprises |
|NACH |Need for Achievement |
|NGOs |Non- Governmental Organizations |
|NBS |National Bureau of Statistics |
|NDC |National Development Corporation |
|NEDF |National Entrepreneurship Development Fund |
|NIGP |National Income Generating Programme |
|NISS |National Informal Sector Survey |
|NMB |National Microfinance Bank |
|NSIC |National Small Industries Corporation |
|SELF |Small Entrepreneurs Loan Facility |
|SIDO |Small Industries Development organization |
|SIDP |Sustainable Industrial Development Policy |
|SMEs |Small and Medium Enterprises |
|TAFOPA |Tanzania Food Processors Association |
|TASISO |Tanzania Small Industries Support Organization |
|TBS |Tanzania Bureau of Standards |
|TCCIA |Tanzania Chamber of Commerce Industry and Agriculture |
|TDTC |Technology Development and Transfer Centre |
|TEMDO |Tanzania Engineering and Manufacturing Design Organization |
|TIRDO |Tanzania Industrial Research Development Organization |
|TNBC |Tanzania National Business Council |
|TPSF |Tanzania Private Sector Foundation |
|VETA |Vocational Education Training Authority |
|VIBINDO |Viwanda na Biashara Ndogondogo |
|WDF |Women Development Fund |
|YDF |Youth Development Fund |
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|List of Tables | |
|Table 1: Age Distribution of women Entrepreneurs-------------------------------- |pg 53 |
|Table 2: Educational Background of Women Entrepreneurs--------------------- |pg 54 |
|Table 3: Level of Income of Women Entrepreneurs------------------------------- |pg 55 |
|Table 4: Past work experience of women Entrepreneurs-------------------------- |Pg 56 |
|Table 5: Motivating factors for women to become entrepreneurs---------------- |pg 57 |
|Table 6: Reasons for women to continue Working as Entrepreneurs------------ |pg 58 |
|Table 7: Problems Faced by Women Entrepreneurs in Tanzania---------------- |pg 59 |
|Table 8: Attitudes of women Entrepreneurs---------------------------------------- |pg 60 |
|Table 9: Goals and dreams in relation to women Entrepreneurship------------- |pg 61 |
|Table 10: Support and help that would aspire for women Entrepreneurs------- |pg 62 |
Table of Contents
CERTIFICATION-------------------------------------------------------------------------------------i
DECLARATION---------------------------------------------------------------------------------------ii
ACKNOWLEDGEMENT----------------------------------------------------------------------------iii
ABSTRACT---------------------------------------------------------------------------------------------iv
ACRONYMS AND ABBREVIATIONS---------------------------------------------------------v-vi
LIST OF TABLES-------------------------------------------------------------------------------------vii
TABLE OF CONTENT--------------------------------------------------------------------------viii-ix
CHAPTER ONE 1
1.1 Introduction 1
1.2 Research Problem 2
1.3 Research Objectives 3
1.3.1 General Objective 3
1.3.2 Specific Objectives 3
1.4 Research Questions 3
1.5 Significance of the Study 4
1.6 Scope of the Study 4
1.7 Limitations of the Study 4
CHAPTER TWO 5
2.1 Literature Review 5
Introduction 5
2.2 Theoretical Literature 5
2.2.1 An entrepreneur 5
2.2.2 The Concept of Entrepreneurship 6
2.2.3 Theories of Entrepreneurship 8
2.2.4 Alternative Theories of the Entrepreneur 14
2.2.5 Motivation Theories 18
2.2.6 The Role of motivation in entrepreneurship 18
2.2.7 Motivation Theories and Entrepreneurship 20
McGregor’s Theory 31
McClelland‘s Needs Theory 31
2.3 Empirical Literature Review 32
2.4 Attractive Factors of Becoming an Entrepreneur 35
2.4.1 Independence 35
2.4.2 Self –fulfillment 36
2.4.3 Entrepreneurial Attributes 36
2.4.4 Income 36
2.5 Repulsive factors for women to become entrepreneurs 37
2.5.1 Inadequate Family Income 37
2.5.2 Dissatisfaction towards Salaried Job 37
2.5.3 Difficulty in getting a Job 37
2.5.4 An alternative for Unemployment 38
2.5.5 The Possibility for Time Management 38
2.6 Entrepreneurship Development in Tanzania 39
2.7 The role of Women entrepreneurs in Tanzania 43
2.8 SME Policy framework in Tanzania 44
CHAPTER THREE 48
3.1 Research Methodology 48
3.1.1 Research Design 48
3.1.2 Study Area 49
3.1.3 Sample and sampling procedure 49
3.2 Research Tools 49
3.3 Data Collection Methods, Procedures and instruments 50
3.3.3 Data Processing and analysis 51
CHAPTER FOUR 52
4.0 Results and Discussion 52
CHAPTER FIVE 65
5.0 Conclusion & Policy Implications 65
5.1 Recommendations 66
5.2 Areas for further Research 67
6.0 REFERENCES 68
7.0 APPENDICES 74
Appendix 1 74
7.1 INTERVIEW QUESTIONS 74
7.2 Focus Group Discussion Guide 79
CHAPTER ONE
1.1 Introduction
Tanzanian women’s entrance into self employment and small business ownership in recent years has been dramatic. In a relatively short time, they have established themselves as a formidable presence. According to National Informal Sector Survey (1991) women accounted for about 35 per cent of informal enterprises. By 1995, it was estimated that the proportion of women in the sector could have risen to 70 per cent of the informal sector labour force. In a study by Economic and Social Research Foundation (ESRF, 2000), 55 per cent of the enterprises in the sample were owned by women (as reported in (Mlingi, 2000, p. 89). Swiss contact (2003) estimated that women owned 43 per cent of MSEs.
A survey conducted in 2002, by ILO discovered that 128 women entrepreneurs have created 983 jobs, of which 952 are full time paid jobs (an average of 5.9% per enterprise), thus demonstrating that women entrepreneurs can be a significant force on employment creation, both for family members and others.These data reflect the women’s active role in the economic development of a nation.
If one uses the proxy of 43 per cent (Swiss Contact, 2003) as the proportion owned by women, then there would be about 731,000 women entrepreneurs in Tanzania. This again reflects the significance of women entrepreneurs in Tanzanian economy. However, despite the important role of women entrepreneurs in creating job opportunities for millions of people, very few information about women entrepreneurship is available.
In other words, research on women entrepreneurship has been inadequate, more so with reference to developing countries like Tanzania. Little research in entrepreneurship has explored only the female population of entrepreneurs (Brush & Edelman, 2000).
Though global research of female entrepreneurship has taken place for the last 25 years and knowledge has expanded; “there are still many questions unanswered” (Greene et al, 2003 p.26). It is against this background that the researcher seeks to highlight the factors motivating Tanzanian women to become entrepreneurs.
This paper presents findings on the question of what factors motivate Tanzanian women to become entrepreneurs. The analysis draws on the survey on women entrepreneurs in the Mwenge carving market and Kariakoo clothing shops involving 83 participants.
In order to contextualize the analysis, the paper begins by outlining entrepreneurship in general, entrepreneurship development in Tanzania. It then mirrors the existing studies on the motivations of women entrepreneurs. The subsequent sections discuss the data and findings .The conclusion considers implications for public policy.
1.2 Research Problem
Tanzanian women like any other women in most of the African societies have been denied the benefit of education. They have no opportunities to develop their natural capacities and therefore become helpless, illiterate, narrow-minded and peevish. Economically women became completely dependent upon men. Since time immemorial, women have been discussed, and written about mainly as decorative objects. But when they have stepped out of this niche, by and large, response has been one of cynicism and derision.
However economic compulsions have let more and more young girls to take up employment. It is out of work experience, exposure to education and urbanization that the potential source of women entrepreneurs has emerged.
Women entrepreneurs in Tanzania have to cope with various socio-economic problems.
Society’s attitude and support are the major determinants of women’s entrepreneurial success. The social and cultural roles played by women may place an additional burden on them. As a part of their social binding, women have to perform household duties with simultaneously operating as business owners. A woman entrepreneur is expected to perform the roles of wife, mother, daughter, daughter-in-law and businesswoman.
Women become entrepreneurs due to several factors which may be grouped as pull factors and push factors. Pull factors refer to the urge in women to undertake ventures with an inclination to start a business. Women entering business, driven by financial need due to family circumstances are said to be influenced by push factors. The study therefore aims at understanding the entrepreneurial development among women, highlights their existing status, and the factors encouraging the women to become entrepreneurs.
Dar es Salaam is the commercial city of Tanzania and the target type of the entrepreneurs located in one area operate in Dar es Salaam compared with other regions. Dar es Salaam region has also been endowed with several facilities for the conducive growth of women entrepreneurs when compared to other regions in Tanzania. So, it is felt that Dar es Salaam is ideally suited for a study on women entrepreneurship; as most of the business that women are engaged in are in Dar es Salaam.
1.3 Research Objectives
1.3.1 General Objective
To widen the understanding of the motivation of women entrepreneurship in Tanzania
1.3.2 Specific Objectives
i. To examine the demographic profile of women entrepreneurs in Tanzania. ii. To analyze the factors motivating Tanzania women entrepreneurs, their goals and dreams in relation to entrepreneurship iii. Examine the attitudes of Tanzanian women concerning entrepreneurship and ways in which their attitudes have been affected during their time of experience within their enterprises.
1.4 Research Questions
i. What are the factors motivating Tanzanian women to become and work as entrepreneurs?
ii. What motivates Tanzanian women to continue working as entrepreneurs? iii. In what ways have the women’s attitudes towards entrepreneurship been affected during their time of experience within their enterprises? iv. What are the goals and dreams in relation to women entrepreneurship? v. What are the problems facing women entrepreneurs in Tanzania?
1.5 Significance of the Study
There are several reasons, which serve to justify the importance of this study: Women’s participation in business can greatly break the vicious cycle of low entrepreneurship-low resources-poverty. It should essentially be one of primary policy concern if women’s poverty and hence societal poverty is to be alleviated because entrepreneurship represents the force for continuous innovation and change which makes possible an ever improving way of life.
Early economic theories suggest some correlation between economic growth and business formations. Palmer (1971) also appears to support this relationship. The study will investigate the attitudes and viewpoints of women entrepreneurs and the study will also present a deeper insight into entrepreneurial values of women; to work and progress as entrepreneurs.
The observed results will provide suggestions for improvements to support women entrepreneurs in a better way.
1.6 Scope of the Study
The study centers on women entrepreneurs particularly in the Makonde carvings at Mwenge and clothing business at Kariakoo. It specifically tries to investigate the factors motivating Tanzanian women to become entrepreneurs. The study was conducted in Dar es Salaam, the reason being that it is the commercial centre of Tanzania, hence enabled the researcher to get enough samples to represent the population of women working as entrepreneurs in the two businesses. In addition, the issue of time constraints, costs and accessibility of data has carefully been considered.
1.7 Limitations of the Study
The study covers only women entrepreneurs in the carving and clothing shops at Mwenge and Kariakoo respectively both in Dar es Salaam. Hence the findings of the study are entirely applicable to these sectors only. The study is based on the perceptions of the women entrepreneurs. Their attitudes may change with the change of times. Therefore, the responses reflect their contemporary views on the prevailing conditions.
CHAPTER TWO
2.1 Literature Review
Introduction
This chapter reviews the related literature to the concepts, theories and previous research findings pertaining to the research problem with the aim of establishing the theoretical and empirical base of the study.
2.2 Theoretical Literature
2.2.1 An entrepreneur
In common parlance, being an entrepreneur is associated with starting a business, but this is a very loose application of a term that has a rich history and a much more significant meaning.
In French, it means someone who undertakes, not an undertaker in the sense of a funeral director, but someone who undertakes a significant project or activity.
More specifically, the entrepreneur is a person who has enterprising quality, takes initiative and establishes an economic activity or enterprise.
In the 19th century, Say put it this way, “The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield, and Entrepreneurs create value”. In the 20th century, the economist most closely associated with the term was Joseph Schumpeter. He described entrepreneurs as the innovators who drive the creative-destructive process of capitalism.
In his words, the function of entrepreneurs is to reform or revolutionize the pattern of production. They can do this in many ways: by exploiting an invention or, more generally, an untried technological possibility for producing a new commodity or producing an old one in a new way, by opening up a new source of supply of materials or a new outlet for products, by reorganizing an industry and so on.
According to Schumpeter (1934) entrepreneurs are the change agents in the economy.
By serving new markets or creating new ways of doing things, they move the economy forward. It is true that many of the entrepreneurs that Say and Schumpeter have in mind serve their function by starting new profit-seeking business ventures, but starting a business is not the essence of entrepreneurship. Though other economists may have used the term with various subtle distinction, the Say-Schumpeter tradition that identifies two entrepreneurs as the catalysts and innovators behind economic progress has served as the foundation for the contemporary use of this concept.
2.2.2 The Concept of Entrepreneurship
Entrepreneurship is the creation of an innovative economic organization for the purpose of gain or growth under conditions of risk and uncertainty.
Entrepreneurship employs what Schumpeter (1942) called "the gale of creative destruction" to replace in whole or in part inferior innovations across markets and industries, simultaneously creating new products including new business models. In this way, creative destruction is largely responsible for the dynamism of industries and long-run economic growth. The supposition that entrepreneurship leads to economic growth is an interpretation of the residual in endogenous growth theory and as such is hotly debated in academic economics. For Schumpeter, entrepreneurship resulted in new industries but also in new combinations of currently existing inputs. Schumpeter 's initial example of this was the combination of a steam engine and then current wagon making technologies to produce the horseless carriage. In this case the innovation, the car, was transformational but did not require the development of a new technology, merely the application of existing technologies in a novel manner. It did not immediately replace the horse drawn carriage, but in time, incremental improvements which reduced the cost and improved the technology led to the complete practical replacement of beast drawn vehicles in modern transportation.
Despite Schumpeter 's early 20th-century contributions, traditional microeconomic theory did not formally consider the entrepreneur in its theoretical frameworks (instead assuming that resources would find each other through a price system). In this treatment the entrepreneur was an implied but unspecified actor, but it is consistent with the concept of the entrepreneur being the agent of x-efficiency. Different scholars have described entrepreneurs as, among other things, baring risk. For Schumpeter, the entrepreneur did not bare risk: the capitalist did.For Knight (1921) entrepreneurship is about profits from bearing uncertainty and taking risk. The behavior of the entrepreneur reflects a kind of person willing to put his or her career and financial security on the line and take risks in the name of an idea, spending much time as well as capital on an uncertain venture.
Knight classified three types of uncertainty. i. Risk, which is measurable statistically (such as the probability of drawing a red colour ball from a jar containing 5 red balls and 5 white balls). ii. Ambiguity, which is hard to measure statistically (such as the probability of drawing a red ball from a jar containing 5 red balls but with an unknown number of white balls). iii. True Uncertainty or Knightian Uncertainty, which is impossible to estimate or predict statistically (such as the probability of drawing a red ball from a jar whose number of red balls is unknown as well as the number of other coloured balls).
The act of entrepreneurship is often associated with true uncertainty, particularly when it involves bringing something really novel to the world, whose market never exists. However, even if a market already exists, there is no guarantee that a market exists for a particular new player in the cola category.
The place of the disharmony-creating and idiosyncratic entrepreneur in traditional economic theory (which describes many efficiency-based ratios assuming uniform outputs) presents theoretic quandaries. William Baumol has added greatly to this area of economic theory and was recently honored for it at the 2006 annual meeting of the American Economic Association.
2.2.3 Theories of Entrepreneurship
Entrepreneurship is an evolved discipline, with the advancement of science and technology it has undergone metamorphosis change and emerged as a critical input for socio-economic development. Various writers have developed various theories on entrepreneurship and popularized the concept among the common people.
The theories propounded by them can be categorized as Sociological theories Economic theories, Cultural theories, and Psychological theories.
Sociological Theories: The following theories explain how sociological factors accelerate the growth of entrepreneurs: i. Theory of religious beliefs ii. Theory of social change 1. Theory of religious beliefs:
Max Weber (1864-1920) has propounded the theory of religious belief. According to him, entrepreneurism is a function of religious beliefs and impact of religion shapes the entrepreneurial culture. He emphasized that entrepreneurial energies are exogenous supplied by means of religious beliefs. The important elements of Weber’s theory are discussed further:- Spirit of Capitalism- We all know that capitalism is an economic system in which economic freedom and private enterprise are glorified, so also the entrepreneurial culture. Adventurous Spirit- Weber also made a distinction between spirit of capitalism and adventurous spirit. According to him, the former is influenced by the strict discipline whereas the latter is affected by free force of impulse. Entrepreneurship culture is influenced by both these factors. Protestant ethic- according to Max Weber the spirit of capitalism can be grown only when the mental attitude in the society is favourable to capitalism. Inducement of profit- Weber introduced the new businessman into the picture of tranquil routine. The spirit of capitalism intertwined with the motive of profit resulted in creation of greater number of business enterprises. In fact, this theory suited the British rulers, who desired to encourage European entrepreneurship in India. This theory was vehemently criticized by many researchers because of the unrealistic assumptions. 2. Theory of Social Change: Everett E. Hagen(1967), in his theory of social change propounded how a traditional society becomes one in which continuing technical progress takes place. The theory exhorts the following feature which presumes the entrepreneur’s creativity as the key element of social transformation and economic growth. Presentation of general model of the society, the theory reveals a general model of the society which considers interrelationship among physical environment, social structure, personality and culture. Economic Growth: product of social change and political change, according to Hagen, most of the economic theories of underdevelopment are inadequate. Rejection of followers’ syndrome, Hagen rejected the idea that the solution to economic development lies in imitating western technology. So the followers’ syndrome on the part of the entrepreneur is discouraged. Historic shift as a factor of initiating change, Hagen in his book, How Economic Growth Begins, depicts historic shift as the crucial force which has brought about social change technological progress thereby leading to the emergence of entrepreneurial class from different castes and communities. Withdrawal of status respects as the mechanism for rigorous entrepreneurial activity closely consistent with the historic shift it is the social group that plunges into rigorous entrepreneurism which experiences the status withdrawal or withdrawal of status respects. Hence, Hagen’s creative personality is the admixture of Schumpeter’s innovation and McClelland’s high need for achievement. But Hagen’s analysis fails to give policy measures for backward countries which are striving for economic development as he identifies status withdrawal as the causal factor in the emergence of creative personality. Hagen’s thesis of disadvantaged minority groups has its own limitations. There are many disadvantaged minority groups in India which have not supplied a good number of entrepreneurs.
2.2.3.3 Economic Theories: Entrepreneurship and economic development are interdependent. Economic development takes place when a country 's real national income increases over a period of time wherein the role of entrepreneurs is an integral part. Schumpeter’s theory of entrepreneurship is a pioneering work of economic development. Development in his sense implies that carrying out of new combination of entrepreneurship is basically a creative activity. According to Schumpeter an entrepreneur is one who perceives the opportunities to innovate, that is to carry out new combinations or enterprise. In his views, the concept of new combination leading to innovation covers the following 5 cases: The introduction of new goods, that is the one with which consumers are not yet familiar, of a new quality, the introduction of new method of production, the opening of new market, the conquest of new source of supply of raw material and the carrying out of new organization. In view of the above, Schumpeterian theory of entrepreneurship has got the following features; Schumpeter makes a distinction between innovation and invention. Invention means creation of new things and innovation means application of new things onto practical use. Schumpeter has given emphasis on the role of entrepreneurial functions in economic development. In his views; development means basic transformation of the economy that is brought about by entrepreneurial functions. A dynamic phenomenon and a break from the routine or a circular flow or tendency towards equilibrium entrepreneurialism dream and the will to found a private kingdom- the motives of creating things and applying these things into practice inspire the entrepreneur to undertake innovation.
Critical evaluation: Schumpeter’s theory of innovation is criticized on the following grounds:- i. The theory has the scope of entrepreneurism in the sense that it has included the individual businessman along with the directors and managers of the company. ii. Schumpeter’s innovating entrepreneurs represents the enterprise with the R & D and innovative character. But developing countries lack these characters. iii. The theory emphasizes on innovation and excludes the risk taking and organizing aspects. iv. Schumpeter’s entrepreneurs are large scale businessmen who introduce new technology, method of production. v. Schumpeter remained silent about as to why some economics had more entrepreneurial talent than others. However, despite the above criticism, Schumpeterian theory is regarded as one f the best theories in the history of entrepreneurial development.
2.2.3.4 Cultural Theories: Advocates of cultural theories point out that entrepreneurship is the product of culture. Entrepreneurial talents come from cultural values and cultural system embedded into the cultural environment.
Hoselitz’s Theory: Hoselitz explains that the supply of entrepreneurship is governed by cultural factors, and culturally minority groups are the spark-plugs of entrepreneurial and economic development in many countries, entrepreneurs have emerged from a particular socio-economic class. He emphasized the role of culturally marginally groups like Jews and the Greeks in medieval Europe, the Chinese in South Africa and Indian in east Africa in promoting economic development.
2.2.3.5 Psychological Theories: Psychological theories centre 's around the psychological characteristics of the individual in a society. Psychological characteristics affect the supply of entrepreneurs in the society. Peter F. Drucker opined that “an entrepreneur is one who always searches for change, responds to it and exploits it as an opportunity.” he laid emphasis on two important factors; innovation and resource- that led to emergence of entrepreneurship.
According to him, innovation is the real hub of entrepreneurship which creates resource. Something is regarded as resource when its economic value is recognized. For example, mineral oil was considered worthless until the discovery of its use. Similarly, purchasing power was considered an important resource by an American innovative entrepreneur who invented installment buying.
According to Drucker, successful entrepreneurship involves the following things- Value and satisfaction obtained from resource by the consumer are increase.
New values are created, material is converted into a resource or exiting resources are combined in a new or more productive configuration Entrepreneurship is the practice which has a knowledge base. Entrepreneurship is not confined to big businesses and economic institutions; it is equally important to small business and non-economic institutions.
Entrepreneurship behavior rather than personality trait is more important to enhance entrepreneurship the foundation of entrepreneurship lies in concept and theory rather than in intuition. Thus, Drucker has given his views that “an entrepreneur need not be a capitalist or an owner. A banker who mobilizes other’s money and allocates it in areas of higher yield is very much an entrepreneur though he is not the owner of the money. In the early 1800s, economists Jean Baptiste Say and John Stuart Mill further popularized the academic usage of the word “entrepreneur.”
Say stressed the role of the entrepreneur in creating value by moving resources out of less productive areas and into more productive ones. Mill used the term “entrepreneur” in his popular 1848 book, Principles of Political Economy, to refer to a person who assumes both the risk and management of a business.
In this manner, Mill provided a clearer distinction than Cantillon between an entrepreneur and other business owners (such as shareholders of a corporation) who assume financial risk, but do not actively participate in the day-to-day operations or management of the firm.
Building on Cantillon and Mill, Frank Knight (1921) emphasized that entrepreneurs deal with uncertainty about the future, not with risk. Probabilities can be estimated for risky activities and thus are insurable. Entrepreneurs, however, are dealing with uncertainty about the profitability of their new combinations of resources. Since entrepreneurs cannot insure against the probability that new goods and services will not be liked, entrepreneurs bear the burden of the uncertainty associated with the market process.
While Knight makes some important points with respect to the bearing of uncertainty, his work has been overshadowed by the research of two other economists, Joseph Schumpeter and Israel Kirzner who greatly advanced our understanding of the role of the entrepreneur.
The introduction of the compact disc, and the corresponding disappearance of the vinyl record, is just one of many examples of this process. Cars, electricity, aircraft, and personal computers are others. Schumpeter viewed this disequilibration as a beneficial byproduct of innovation. Kirzner’s (1973) view of entrepreneurship stands in stark contrast to Schumpeter’s. Instead of focusing on the disequilibrating role of innovation, Kirzner views entrepreneurship as an equilibrating force in which entrepreneurs discover previously unnoticed profit opportunities and act on them. Thus Kirzner’s entrepreneur initiates changes that move markets towards equilibrium.
An example of such an entrepreneur would be someone in a college town who discovers that a profit opportunity has arisen in renovating houses and turning them into rental apartments because of a recent increase in college enrollment. Entrepreneurship encompasses all of these functions. Entrepreneurs take on risk, they innovate, but they also engage in ordinary activities such as arbitraging between areas of high and low demand. The thing that all entrepreneurs have in common is the desire to discover and exploit profit opportunities.
2.2.4 Alternative Theories of the Entrepreneur
Traditionally, the label theory of the entrepreneur has been used within the economics literature to denote the study of the relationship between entrepreneurship and economic activity. These theories frequently attribute the movement of the economy to a catalystic function fulfilled by the entrepreneur.Accordingly, the entrepreneur is conceptualized in terms of what he or she does, that is, innovates, and coordinates. This behavior is then thought to influence the system by moving it toward, or away from, some ideal state, such as equilibrium or efficiency.
Two assumptions are characteristic of most theories of the entrepreneur: i. Entrepreneurship is a “good” thing, with beneficial outcomes that accrue to the system in which it occurs. ii. Entrepreneurship is observable as a behaviour that can be attributed to some definitive theoretical attribute capable of differentiating entrepreneur (actor) from non-entrepreneur (non-actor).
The first assumption is important for understanding why scholars have devoted so much energy to the subject and why the study of entrepreneurial behaviour at the individual level is of value to organizational studies. The second assumption, however, is highly significant to our argument in that it helps to expose the manner in which uncertainty is conceptualized within these theories. It is suggested that many theoretical explanations of why prospective entrepreneurs choose to pursue a possible opportunity can be classified into two simple conceptualizations of the role that uncertainty plays in preventing action:
I. Entrepreneurial Action As the Outcome of Less Perceived Uncertainty:
While neoclassical economists were abolishing the need to consider individual differences by constructing theories with assumptions such as perfect information, “Austrian” economists were building their economic theories on such premises as the subjectivity of value (Menger,1950), imperfect knowledge (Hayek, 1945), asymmetric beliefs (Mises, 1949), and differences in entrepreneurial alertness (Kirzner, 1973, 1985). Austrian economists have typically considered an entrepreneur to be the engine of the economy (Kirzner, 1989; Mises, 1949; Pasour, 1989) and have attributed the stagnation of the economy to a lack of entrepreneurial action. This lack of entrepreneurial action, they believe, is often the consequence of unperceived opportunities (Kirzner, 1979), which arise from the various explanations mentioned above.Although Austrians are labeled subjectivists, this subjectivism traditionally has referred to the epistemological limitations suffered, to a greater or lesser extent, by the subjects of their theories. Thus, people who have acted entrepreneurially are seen to possess a more accurate picture of reality than those individuals who have not acted.
Moreover, an objective reality is thought to exist in which a market opportunity is there for the taking, but only for those who possess the qualities necessary both to discover and exploit it. Thus, entrepreneurial action is seen as something all would engage in if they knew what to do, but, owing to epistemological differences, only some people (the entrepreneurs) “know” what to do. Accordingly, entrepreneurs are thought to have taken action because they somehow escaped the ignorance and paralysis produced by uncertainty, whereas those who have not acted entrepreneurially are believed either to have fallen victim to doubt or to have been blinded to the need for forming a belief at all. II. Entrepreneurial Action as the Outcome of More Willingness to Bear Uncertainty
The theory of the entrepreneur is not the exclusive domain of the Austrian economist. Prominent non-Austrians, from Knight (1921) to Schumpeter (1934), also have recognized the role that uncertainty plays in preventing entrepreneurial action. However, these economic theorists conceptualize uncertainty’s action prohibitive role in a slightly different way.
They see entrepreneurial action not as the outcome of less perceived uncertainty but as more willingness to bear the uncertainty faced by all prospective actors.
For instance, Knight addresses uncertainty explicitly. He posits that profit is the reward for those willing to bear uncertainty because, unlike risk, uncertainty is inestimable and therefore uninsurable. Thus, entrepreneurs are distinguishable from non-entrepreneurs in their willingness to bear the uncertainty intrinsic to a possibly profitable course of action.
In contrast, the willingness to bear uncertainty is implicit in Schumpeter’s theory, where he argues that the entrepreneur’s function lies in the innovative act of creating new combinations. Believing that the potential for new combinations is abundant and at times obvious, Schumpeter delineates entrepreneurs from non-entrepreneurs not by differences in knowledge or perception but by the performance of the innovative act itself (1934: 88).
This elimination of perceptual differences forces Schumpeter to speculate reluctantly about motivational differences in an attempt to explain why some individuals and not others engage in entrepreneurial action (1934: 90). Schumpeter’s (1934) behavioral bent attracted psychologists, such as McClelland (1961), Hagen (1962), and Kunkel (1965), who exchanged the economic theorists’ descriptive orientation for a more prescriptive theoretical viewpoint.
Whereas economic theories of the entrepreneur focused on explaining what must occur (For example uncertainty bearing) for the economy to function, psychological theories sought to explain why entrepreneurs are more willing than their counterparts to bear this uncertainty.
Because these psychologists shared the economists’ belief that entrepreneurship produced economic growth, they tried to identify the motives underlying entrepreneurial activity in an effort to develop these motives in their subjects.
Unfortunately, this was thought to produce explanations that relied too heavily on unchangeable needs and values developed in childhood.
It should be noted that, unlike critics, these theorists did not see these motives as unchangeable elements of personality. For instance, much of McClelland’s empirical work was devoted to establishing that the need for achievement could be learned. In contrast, if an individual chooses a lax criterion he or she will pursue almost every possibility that comes along. Such a location of the criterion is representative of the profile of the Schumpeterian entrepreneur who is frequently conceptualized as an innovator, leader, and/or adventurer. It is also reflective of the Knightian entrepreneur who is explicitly conceptualized as a “bearer of uncertainty.” Psychologists like McClelland sought to explain the “laxity” of the criterion (such as the need for achievement) and promote it in an effort to encourage entrepreneurial activity. If the individual chooses a strict criterion, he or she will choose to pursue very few possibilities.
Given the uncertainty surrounding the decision, individuals are forced to expose themselves to the possibility of either committing an error of commission (taking action only to find their belief was unfounded) or committing an error of omission (not taking action only to regret it when time proves that their passed-over hunch was correct). Although only time proves prophecy, consideration of the possible payoffs associated with these various decisional outcomes shapes prospective actors’ decisions as they contemplate whether to commit to a particular course of action.
A simple amalgamation of the above arguments suggests that uncertainty prevents action by obfuscating i. The need or possibility for action, ii. The knowledge of what to do, and iii. Whether the potential reward of action is worth the potential cost.
2.2.5 Motivation Theories
Motivation
Motivation is defined as the process that initiates, guides and maintains goal-oriented behaviors. Motivation is what causes us to act, whether it is getting a glass of water to reduce thirst or reading a book to gain knowledge.It involves the biological, emotional, social and cognitive forces that activate behavior. In everyday usage, the term motivation is frequently used to describe why a person does something.
2.2.6 The Role of motivation in entrepreneurship
Motivation is central to the way an entrepreneur behaves in a business environment. Motivation is dependent upon the potencies of needs. Maslow identified a hierarchy of needs, which govern the pattern of motivation. These needs are physiological, safety, social, esteem and self-actualization. Porter and Lawler (1968) proposed need-expectancy theory for explaining the effort needed to fulfill an unfulfilled need. Motivational Model [pic] Adopted from: transtutors.com
A modified motivation model for entrepreneurship is shown above. The strength of an unfilled need of an entrepreneur and expectations of beneficial-outcomes motivate an entrepreneur for efforts in venture.
Combined with these, the individual capabilities of the entrepreneur govern his performance. The opportunities in business environment and risk due to future uncertainty affect the rewards, which are both intrinsic and extrinsic.
Intrinsic rewards are related to factors internal to the entrepreneur, such as self-satisfaction and pride. Extrinsic rewards are more towards material, wealth and growth.
Entrepreneurship depends on the decisions that people make about how to undertake that process. The argument is that the attributes of people making decisions about the entrepreneurial process influence the decisions that they make. Although previous researchers have rightly criticized much of the existing empirical research on the role of human motivation in entrepreneurship (Aldrich & Zimmer, 1986; Carroll & Mosakowski, 1987), the researcher is of the view that inadequate empirical work does not negate the importance of understanding the role of human motivation and women in particular in the entrepreneurial process.In fact, even sociologists who have argued strongly against the usefulness of trait-based research in entrepreneurship implicitly acknowledge that motivation must matter to this process. Aldrich and Zimmer (1986, p. 3), for example, wrote, entrepreneurial activity ‘‘can be conceptualized as a function of opportunity structures and motivated entrepreneurs with access to resources’’. Several human motivations that influence the entrepreneurial process have been identified in this study. Environmental factors being held constant; one can assume that, all human action is the result of both motivational and cognitive factors; the latter including ability, intelligence, and skills (Locke, 2000a).
Cromie (1987) found that in their motives whether or not to become an entrepreneur, women are less concerned with making money and often choose entrepreneurship as a result of career dissatisfaction. They also see entrepreneurship as a means of simultaneously satisfying their own career needs and those of their children and family. In addition the desire for greater flexibility, seeking challenges and escaping from organizational bureaucracy are also among the motivational factors that lead women to start up their own businesses (Lee & Rogoff, 1997). Innovativeness, risk taking propensity and perseverance are found to have significant influence on women entrepreneurs (Nelson and Cengiz, 2005). According to studies done by Schwartz (1976), Scott (1986) and Hisrich (1986), major motivations for women to start a business were the need to achieve, the desire to control and be independent, the need for job satisfaction and economic necessity.
Entrepreneurial activity arises from different circumstances and motives that drive the decision to start a business. The decision to become self-employed may stem from the push effect of (the threat of) unemployment, but also from pull effects induced by a thriving economy producing entrepreneurial opportunities.Opportunity-based entrepreneurship involves those who choose to start their own business by taking advantage of an entrepreneurial opportunity. Necessity-based entrepreneurship involves people who start a business because other employment options are either absent or unsatisfactory (Bhola et al., 2006). Generally, the opportunity entrepreneurs are more prevalent in high-income countries, while necessity entrepreneurs are more common in the low-income countries (Reynolds et al., 2002).
2.2.7 Motivation Theories and Entrepreneurship
Previous research has explored several motivations and their effects on entrepreneurship. Therefore, we discuss previous empirical research to illustrate the ways in which motivation can influence different aspects of the entrepreneurial process.
Need for achievement
Within the research domain of personality traits and entrepreneurship, the concept of need for achievement (nAch) has received much attention. McClelland (1961) argued that individuals who are high in nAch are more likely than those who are low in nAch to engage in activities or tasks that have a high degree of individual responsibility for outcomes, require individual skill and effort, have a moderate degree of risk, and include clear feedback on performance.
Further, McClelland argued that entrepreneurial roles are characterized as having a greater degree of these tasks attributes than other careers; thus, it is likely that people high in nAch will be more likely to pursue entrepreneurial jobs than other types of roles.
Johnson (1990) conducted a traditional review of 23 studies, which varied regarding samples, measurement of nAch, and definitions of entrepreneurship.
Based on this group of studies, Johnson concluded that there is a relationship between nAch and entrepreneurial activity in this case, nAch distinguished firm founders from other members of society.
In a similar review of 19 studies, Fineman (1977) concluded that both projective and questionnaire measures of nAch significantly predict firm founding. Collins, Locke, and Hanges (2000) conducted the first and only meta-analysis of nAch and entrepreneurship studies, examining 63 nAch and entrepreneurship studies.
The overall finding of the meta-analysis is that nAch is significantly related to founding a company.
The nAch both differentiated between entrepreneurs and others (mean r =.21) and predicted the performance of the founders’ firms (mean r =.28).
Moreover, Collins et al. (2000) found that the relationship between nAch and entrepreneurial activity was moderated by several factors.
First, nAch was a more robust predictor of group-level effects (e.g., mean differences between firm founders and another profession, mean differences between high-performing and low-performing founders) than individual level effects (e.g., predicting the performance of individuals). Second, they found that while nAch is a strong differentiator between firm founders and non managerial employees (mean r =.39), it is not a strong differentiator between firm founders and managers (mean r =.14).
Based on these results, Collins et al. (2000) concluded that nAch is an effective tool for differentiating between firm founders and the general population but less so for differentiating between firm founders and managers.
Further, they concluded that nAch might be particularly effective at differentiating between successful and unsuccessful groups of firm founders.Thus, nAch could play a very useful role in explaining entrepreneurial activity.
Risk taking
Risk-taking propensity is another motivation of interest, which emerged from McClelland’s (1961) original research on entrepreneurs. McClelland claimed that individuals with high achievement needs would have moderate propensities to take risk. This claim by McClelland is especially interesting for entrepreneurship research because the entrepreneurial process involves acting in the face of uncertainty. Liles (1974) argued that entrepreneurs often must accept uncertainty with respect to financial well-being, psychic well-being, career security, and family relations. Moreover, several theories of entrepreneurship view the entrepreneur as bearing residual uncertainty (Venkataraman, 1997).
Atkinson (1957) argues that individuals who have higher achievement motivation should prefer activities of intermediate risk because these types of activities will provide a challenge, yet appear to be attainable. On the other hand, individuals who score high on the motive to avoid failure will avoid intermediate risks.
Instead, they will prefer easy and safe under- takings (because there is a high chance of success) or extremely difficult and risky ones (because it will be easy to explain failure without accepting personal blame). Following the lead of Atkinson, risk-taking propensity has been defined in the entrepreneurship literature as the willingness to take moderate risks (Begley, 1995).
Despite these theoretical claims, previous research suggests that firm owners do not differ significantly from managers or even the general population in risk taking (Low & Macmillan, 1988). For example, Litzinger (1961) failed to find any difference between motel owners and motel managers on risk preference. Kogan and Wallach (1964) found that firm founders clustered around the mean risk-taking score of the general population. In comparisons of firm founders and managers, neither Babb and Babb (1992) nor Palich and Bagby (1995) found significant differences between the two groups in terms of risk-taking propensity. However, none of the above studies identified if firm founders were low, moderate, or high risk-takers.
Brockhaus (1980) tested for the actual level of risk taking, and he found that firm founders did prefer moderate risk but did not differ from managers in this regard. Only one study found a difference between firm founders and managers in this motivation.
In a study of 239 New England business executives, Begley (1995) found that risk-taking propensity was the only trait on which founders and non founders differed.As with the studies described above, Begley failed to identify whether the level of entrepreneurial risk taking was low, moderate, or high.
While these empirical findings suggest that risk taking may or may not be an entrepreneurial motivation, self-efficacy may be confounding the findings. Several recent evaluative studies using interviews and expert evaluations (e.g., Corman, Perles, & Vancini, 1998; Fry,1993) showed that firm founders objectively have a higher propensity for risk than do members of the general population, but that firm founders do not perceive their actions as risky.
Similarly, Sarasvathy, Simon, and Lave (1998) found that when expert firm founders were asked to evaluate the same entrepreneurial simulations as bankers, the firm founders saw opportunities in information that the bankers thought indicated risk. Thus, the measurement of risk-taking propensity may be confounded with high self-efficacy.
Locus of control
Another motivational trait that has received attention is locus of control—the belief in the extent to which individuals believe that their actions or personal characteristics affect outcomes.
Individuals who have an external locus of control believe that the outcome of an extent is out of their control, whereas individuals with an internal locus of control believe that their personal actions directly affect the outcome of an event (Rotter, 1966).
As McClelland (1961) discussed earlier, individuals who are high in nAch prefer situations in which they feel that they have direct control over outcomes or in which they feel that they can directly see how their effort affects outcomes of a given event. This point was extended by Rotter (1966) who argued that individuals with an internal locus of control would be likely to seek entrepreneurial roles because they desire positions in which their actions have a direct impact on results.
The research on locus of control suggests that firm founders differ from the general population in terms of locus of control. Shapero (1977) found that firm founders from Texas and Italy were more ‘‘internal’’ than other groups of professions reported by Rotter (1966).
This same pattern holds with female firm founders versus the general female population (Bowen & Hisrich, 1986) and with Black firm founders versus the general Black population (Durand, 1975).
While locus of control orientation differs between firm founders and the general public, most studies have not found a difference between firm founders and managers on locus of control, a result similar to the situation with studies on nAch. For example, Babb and Babb (1992) found no differences in locus of control between founders and managers in small businesses in Northern Florida.Similarly, Brockhaus (1982) found that managers and owners of new businesses did not differ on locus of control.In a longitudinal study of students, Hull, Bosley, and Udell (1980) found that locus of control did not differentiate between students who went on to work in managerial positions and those who started their own business.
Finally, in the studies of New England entrepreneurs, Begley (1995) and Begley and Boyd (1987) found that locus of control did not distinguish between founders and managers.
We suspect that one reason for the difference between firm founder and the general population, but not between founders and managers is the similarity between founding a company and managing. Defining entrepreneurial situations as starting a company rather than working for others might not capture the real differences between entrepreneurial and non entrepreneurial situations. For example, serving as a manager in a rapidly growing high-technology company might demand greater entrepreneurial motivations than starting a corner grocery store.
Self-efficacy
Self-efficacy is the belief in one’s ability to muster and implement the necessary personal resources, skills, and competencies to attain a certain level of achievement on a given task (Bandura, 1997). In other words, self-efficacy can be seen as task-specific self-confidence. Self-efficacy for a specific task has been shown to be a robust predictor of an individual’s performance in that task and helps to explain why people of equal ability can perform differently.
An individual with high self-efficacy for a given task will exert more effort for a greater length of time, persist through setbacks, set and accept higher goals, and develop better plans and strategies for the task. A person with high self-efficacy will also take negative feedback in a more positive manner and use that feedback to improve their performance.
These attributes of self-efficacy may be important to the entrepreneurial process because these situations are often ambiguous ones in which effort, persistence and planning are important.One study directly assessed the effect of self-efficacy on some dimension of the entrepreneurial process.
Baum (1994) assessed firm founders in the architectural woodworking industry on a number of variables including general traits and motives (such as tenacity and positive affectivity), specific skills and competencies (such as industry experience and technical skills), situation-specific motivation (such as goal setting and self-efficacy), vision, and strategic action (such as, quality and service emphasis).
In a LISREL model, Baum found that self-efficacy (measured as the self-efficacy to grow the company) had a strong positive relationship with realized growth.
In fact, it was the single best predictor in the entire array of variables.
Goal setting
Tracy, Locke, and Renard (1998) conducted a study of the owners of small printing firms.
Both concurrent and longitudinal measures of four aspects of performance were obtained: financial, performance, growth, and innovation. The quantitative goals the entrepreneurs had for each outcome were significantly related to their corresponding outcomes, both concurrently and longitudinally (nAch in this study was unrelated to performance).
Motivation and entrepreneurship: important motivational concepts from prior qualitative research
The section below is based largely on qualitative observations, including an inductive study based on secondary sources of 70 wealth creators by Locke (2000b).
Independence
Independence entails taking the responsibility to use one’s own judgment as opposed to blindly following the assertions of others. It also involves taking responsibility for one’s own life rather than living off the efforts of others.
Many investigators have observed that the entrepreneurial role necessitates independence.
First, the entrepreneur takes responsibility for pursuing an opportunity that did not exist before.Second, entrepreneurs are, in the end, responsible for results, whether achieved or not achieved.
Further, individuals may pursue entrepreneurial careers because they desire independence. For example, in interviews with U.S. female firm founders, Hisrich (1985) found that one of the prime motivations for starting a business was a desire for independence.
In addition, there is some existing empirical evidence which suggests that entrepreneurs may be higher in independence than other individuals.
Hornaday and Aboud (1973) surveyed 60 founders with several personality inventories and showed that these founders were significantly higher than the general population on measures of independence. Similarly, in a study with 63 founders, Aldridge (1997) found that firm founders scored significantly higher than the general population on personality measures of independence.
Drive
There is some relation between the term drive and that of nAch, but the term drive is somewhat used more broadly.
It is used basically to refer to the willingness to put forth effort; both the effort of thinking and the effort involved in bringing one’s ideas into reality. When entrepreneurs pursue opportunity, they must take action to make it real.
Drive can be differentiated in the following four aspects: ambition, goals, energy and stamina, and persistence.
Ambition influences the degree to which entrepreneurs seek to create something great, important, and significant when they pursue opportunities. The nature of the entrepreneurial ambition may include making money or the desire to create something new, from conception to actuality.Ambition translates into setting high goals for oneself and others. It is well known that high goals lead to better performance results than moderate or low goals (Locke & Latham, 1990). To achieve high goals requires enormous energy and stamina. When goal-directed energy is sustained over time, it is called persistence or tenacity. Pursuing an opportunity is never easy; failure at some point or in some respect is an inevitable part of the process.What sustains such effort over long periods? One factor is high self-efficacy or task specific confidence. The second factor is, strangely enough, love.
Egoistic passion
More precisely, it is a passionate, selfish love of the work. Some commentators like to pretend that businessmen’s core motive is to selflessly serve their employees and society. In contrast, the ego is a central motive.
The true or rational egoist passionately loves the work; they love the process of building an organization and making it profitable. They are motivated to do what is actually in their own interest, that is, to do everything necessary.Surprisingly, there have been virtually no quantitative studies of the role of passion in entrepreneurship. One exception is the study by Baum et al. (2001). Although not shown in that report, when Baum entered passion for the work as a separate variable along with 29 other variables from five domains (personality, situational motivation, skills, strategy, and environment), passion had a direct significant effect on firm growth.
The incentive theory of motivation
A reward, tangible or intangible, is presented after the occurrence of an action with the intent to cause the behavior to occur again. This is done by associating positive meaning to the behavior. Previous studies show that if the person receives the reward immediately, the effect would be greater, and decreases as duration lengthens. Repetitive action-reward combination can cause the action to become habit. Motivation comes from two sources: oneself, and other people. These two sources are called intrinsic motivation and extrinsic motivation, respectively.
Applying proper motivational techniques can be much harder than it seems. Steven Kerr notes that when creating a reward system, it can be easy to reward A, while hoping for B, and in the process, reap harmful effects that can jeopardize your goals.
Cognitive dissonance theory: Suggested by Leon Festinger, this occurs when an individual experiences some degree of discomfort resulting from an incompatibility between two cognitions. For example, a consumer may seek to reassure himself regarding a purchase, feeling, in retrospect, that another decision may have been preferable. Another example of cognitive dissonance is when a belief and a behavior are in conflict. A person may wish to be healthy, believes smoking is bad for one 's health, and yet continues to smoke.
Abraham Maslow 's theory is one of the most widely discussed theories of motivation.
In summary Maslow’s theory advocates that, human beings have wants and desires which influence their behavior. Only unsatisfied needs influence behavior, satisfied needs do not.
Since needs are many, they are arranged in order of importance, from the basic to the complex. The person advances to the next level of needs only after the lower level need is at least minimally satisfied. The further the progress up the hierarchy, the more individuality, humanness and psychological health a person will show.
Maslow’s Hierarchy of Needs Triangle
[pic]
Source: www.abraham-maslow.com/m_motivation/Hierarchy
The needs, listed from basic (lowest-earliest) to most complex (highest-latest) are Physiology: hunger, thirst, sleep.
Safety: Security, Shelter and Health
Social: Belongingness, Love and Friendship
Self-esteem, Recognition, and Achievement
Self actualization
Herzberg’s two-factor theory
Frederick Herzberg 's two-factor theory, also known as intrinsic/extrinsic motivation, concludes that certain factors in the workplace result in job satisfaction, but if absent, they don’t lead to dissatisfaction but no satisfaction.
He distinguished between:
Motivators; for example, challenging work, recognition, responsibility which give positive satisfaction, and Hygiene factors; such as, status, job security, salary and fringe benefits that do not motivate if present, but, if absent, result in demotivation. Two factor theory illuminates two dimensions for work, which are work itself and work’s external circumstances. An entrepreneur may be satisfied by the job and be dissatisfied with external circumstances i.e. hierarchical constructions.On the other hand a person might be happy with the environment and the ambience of the work place but job motivation and results may be discouraging (Peltonen 1985, 34).
Motivational factors that create satisfaction may be achievements, rewards, responsibility, progress and mental growth. Factors that cause dissatisfaction on the other hand are lack of control and guidance, status and safety. Based on this, it can be said that challenging, variable and interesting job effectively motivates the worker. (Kuusinen 1995, 69).
McGregor’s Theory
A theory of McGregor’s divides people in to two groups. McGregor’s x and Y theories are based on human concepts, in which people are originally highly lazy, or then they have a natural desire towards working and trying. Thus a person is willing to work only because he/she is forced or he lacks something, or on the other side his perceptions of working and motives derive from own positive desires to work and perform.
Peltonen et al (1987, 102) acknowledge that motives, expressive motives and mental growth motives. Entrepreneurs particularly, seem to have expressive motives (independence, individuality, job satisfaction) as dominant ones. In addition, mental growth motives, which are desires to improve one’s own ideas, innovation, creativity, are also attached to entrepreneurship.
McClelland‘s Needs Theory
Human needs are attached towards life’s concrete plans, such as work, education, and family. Plans and goals reflect values and when the results from certain actions or processes change the goals, the change pressures also target the values. Achievement motivation theory also emphasizes value complex which seems to have a direct contact on successful entrepreneurship.
According to McClelland, a high desire for high performance is a common characteristic of entrepreneurs. Its features include the desire for self-fulfillment, success and the will to take responsibility of one’s own actions. Risks are calculated and there is a need to have a straight and concrete response from any sorts of results.
2.3 Empirical Literature Review
Several indicators show that the number of women entrepreneurs is increasing due to the fact that the service(saloons, catering )and trade fields like boutiques(clothing shops, florist, carving, tie& dye and batik) are now women dominated areas. Small businesses are important to any country’s economy from a real development’s point of view.
In Tanzania however, it is not possible to measure the women entrepreneurship on statistical basis. Currently; there is no comprehensive data on the number of women in the Micro-Small-Medium Enterprises (MSME) sector, the size of their enterprises, or their distribution by sector. Most reports on the sector rely on data from the 1991 National Informal Sector Survey (NISS), which is outdated.
A survey conducted in 2002, by ILO discovered that 128 women entrepreneurs have created 983 jobs, of which 952 are full time paid jobs ( an average of 5.9% per enterprise), thus demonstrating that women entrepreneurs can be a significant force on employment creation, both for family members and others.
Research by ILO (2003) revealed that most of the women entrepreneurs are engaged in business as a way of creating employment for themselves. Other motives include supplementing income, security, enjoyment of the work they are doing, use of existing competencies, and doing business as a hobby. Others started with informal activities at home either as hobbies or means of meeting household needs, and later develop these into serious business activities.
Early socialization and role models play a big part in motivating women to start business. Factors helpful in starting and developing businesses include skills and competencies acquired prior to starting the business, non-financial and non-financial support from family and friends, and availability of capital, equipment and working tools.
Schwartz (1976) revealed on the study of twenty female entrepreneurs that their major motivations to start a business were the need to achieve, the desire to be independent, the need for job satisfaction and economic necessity.
Scott(1986) found that, apart from the, desire to control, need for achievement, to improve the financial situation, desire to be independent and the need for job satisfaction are also some notable motivating factors.
Lee and Rogoff (1997) pointed out desire for greater life flexibility, seeking challenges, fulfilling a long-felt desire or escaping from organizational glass ceiling as also among the motivation factors that lead women to start-up their own businesses.
In a study comparing the motivational factors among males and females, Hisrich (1986) found that disagreements with bosses, the drive to control own destiny were motivating factors for male entrepreneurs.
The reasons for women however were different, they were found to suffer job frustrations when they were not allowed to perform at the level they were capable of in their work. Hence, women were driven to entrepreneurship because of the independence and sense of achievement which entrepreneurship offers.
Sexton (1980) found that goals in business ownership were same in the need for achievement and independence but differ in terms of economic necessity and recognition than their male counterparts.
Further, women also rated better on dealing with people. Briley, Gross and Saunders (1986) commented that other studies on motivation have indicated that women may have similar motivations but need greater stimulations than their male counterparts
Nelson and Cengiz (2005) pointed that innovativeness, risk taking propensity, flexibility and perseverance are found to have significant influence on women entrepreneurs.
Bender (2000) concluded that, today the promise of flexibility or just being able to do things on their own way has become the ultimate motivation of women entrepreneurs.
The research findings in Finland (1998) show that, the importance of women entrepreneurs has increased during the last century as well as their significance. This is the situation for entrepreneurs within considerably small companies.
The total employment share of small businesses nowadays is nearly 60% compared to less than 50% 10 years ago. Small size companies provide jobs for nearly 780,000 people which is about 40% of all jobs in Finland.
The various working fields seem to indicate that the amount of women entrepreneurs has been increasing. Small companies tend to have an important factor in a development point of view.Research outcomes regarding women entrepreneurship reveal that the women’s motives arise mainly from personal growth. Other researches indicate that the scientists have accomplished a more or less shared understanding that the motives relating to entrepreneurial behavior of men and women differs from one another.
As for the reasons or motivations for women to become entrepreneurs, Scott (1986) found that they: wanted to be their own boss, wanted the challenge, or wanted to make more money.
Schwartz (1979) studied 20 female entrepreneurs and found that their major motivations for starting a business were: the need to achieve, a desire to be independent, the need for job satisfaction, or it was an economic necessity.
According to Chaganti (1986), some reasons for women setting-up businesses were job frustration, service needs, having an attractive business idea, a desire to be their own boss, a desire to make it on their own and build something of their own, and monetary success.
In another study, Hisrich and Brush (1986) found that achievement, opportunity and job satisfaction were the motivating factors most often cited by women entrepreneurs, while power and status were ranked and rated as the least motivating factor. Although the reasons for starting a business may be a driving force in motivating women to engage in business, women entrepreneurs will most certainly face challenges and problems in their working as entrepreneurs, at various stages of their business undertaking.
2.4 Attractive Factors of Becoming an Entrepreneur
2.4.1 Independence
Independence describes the woman’s ability to be her own leader, freedom to plan and use her own time, take responsibility and control her own life. According to Cromie (1996, 255) researches indicate independence as one of the main motives for women entrepreneurship. Researchers agree with the fact that there are no divisions for this motivational feature in sexes or cultures. Control of one’s own life reflects one’s own belief of choosing his /her way of life and control his/her own actions.
According to Duchénaut (1997.46) there are those who feel they control their lives internally, believe that life in general is controlled by their own actions, functions and abilities.
Another group of individuals are those who believe in faith, luck and chance and thus they feel they are controlled by some external force or more powerful person.
Independence is also attached to values; individual’s values affect attitudes and the world view in general and through this to behavior.
For Duchénaut (1997.46) and Muir (1999), the need for independence according to several motivation researches, is the most important reason for establishing own business.
Traditionally women were highly dependent on men, this led the women to be considered as just wives and mothers, and therefore had no chance to participate in decision making in their homes and the society in general. Independence is therefore the main motive for women to become entrepreneurs, so as to reduce dependency on their husband’s income.
A majority of women interviewed were married, and they indicated that, it is unwise to rely totally on their spouses’ income, because anything can happen to spouse leading the family to serious consequences. And supplementing family income has been ranked the third factor motivating Tanzanian women to become entrepreneurs.
2.4.2 Self –fulfillment
This derives from the assumption that, by becoming an entrepreneur, a woman can change her position in the society; the need to attain a particular goal has been noticed to be important factor among the successful male and female entrepreneurs. As McClelland’s theory assumed, the need to achieve or reach a desired point is a psychological factor. According to McClelland, a high desire for achievement is a typical characteristic of entrepreneurs. They are willing to succeed and take personal responsibility. According to Cromie (1986, 259) and Duchénaut (1997.46),this is also linked with the issue of high self confidence and optimism, for example self-homing mothers seem to perform better in business and they have also been noticed as coping better with stress and being more satisfied in their jobs.
2.4.3 Entrepreneurial Attributes
Many entrepreneurship theories mention entrepreneurial attributes as being leadership, positive self confidence, ability and willingness to take risks. Most researchers agree that these features are true for both women and men entrepreneurs. When an individual possesses leadership abilities he/she can encourage and ensure the others. An entrepreneur is having a positive self confidence and has the ability to study the situation and see opportunities and choices. Mostly entrepreneurs rely on their own abilities and cope with situation when they have a personal responsibility of the expected outcome. To be successful entrepreneurs need their self confidence and optimism; risk taking is also essential feature of an entrepreneur. Duchénaut (1997.47) and (Carland & Carland (1994, 69) believed that risk taking is encouraged because there are always sorts of risks related to entrepreneurial behavior.
2.4.4 Income
There are mainly two reasons for a woman to increase her income by becoming an entrepreneur; the first reason is to add and secure the family income in addition to that of a husband, this motivator can be repulsive action if the enterprise is the only source of finance for the household issues. The second reason is the woman’s desire for financial independence.
Duchénaut (1997.47) and Mallete&McGuinness (1999) pointed out that, nowadays the younger generation of women wants to indicate its independence and individuality by taking care of their financial matters by themselves.
2.5 Repulsive factors for women to become entrepreneurs
2.5.1 Inadequate Family Income
According to Duchénaut (1997.48), one key element or a pushing factor towards entrepreneurship may be a poor financial situation of the family. This motivational aspect might be an attractive element in the case where a woman wishes to achieve more income to the family for her own.
2.5.2 Dissatisfaction towards Salaried Job
Dissatisfaction towards wage work is also one of the motivational factors for women entrepreneurship.
According to Due Billing (1996, 157) and Loscocco (1997, 203), difficulties in getting a proper and satisfied job is especially for younger women one of the reasons for becoming an entrepreneur. Dissatisfaction derives from the fact that an entrepreneurship might be the solution depending of the current state of the work ambience. Should a woman lose the importance in her work, she may find her thinking and emotional life separated from her environment.
2.5.3 Difficulty in getting a Job
It seems that many times women need to strive for entrepreneurship due to different negative aspect. These are dissatisfaction towards their current jobs, frustration, and unemployment and non-progress.
According to Kovalainen (1993.78) and Duchénaut (1997.50), self employment has been seen to offer a better career possibility and a better income level as regular work under someone’s payroll. Leaving a housewife role after several years may bring together difficulties in finding a job, since after taking care of the children and the house specific professional skills might have been forgotten. Again, working fulltime might be difficult if the children are still young. This way entrepreneurship may be a good choice if a woman can combine home and work.
2.5.4 An alternative for Unemployment
Due to difficult financial situation, several women may be forced to self-employ with the aid of entrepreneurship. Starting a business seems to be the only way to make one’s family’s living. Unemployment both attracts and pushes women towards entrepreneurship.
2.5.5 The Possibility for Time Management
Kovalainen (1993, 76) and Duchénaut (1997.48) pointed out that, according to empirical studies this aforementioned reason is for women one of the most important motivational factor for entrepreneurship. For women entrepreneurs, family and working for own companies are more attached together than with women who are employed.
Again, working as this sort of “super woman” uses woman’s resources requires stamina, for female entrepreneurs this leads to lack of own time, which usually means there is no time for the family and most of all for her. This may be one of the reasons why so many women work as part time entrepreneurs. This option allows women to have more spare time for themselves and the family. Though important for them, but business does not worth sacrificing the family.According to Duche’naut (1997, 50),the society seems to demand women to take maternal role, and this again leads to dissatisfaction and frustration in working life, whereas men would seem to be the ones who bring money to the family.
It seems that the differences between men and women entrepreneurship derive from social factors, instead of natural characteristics of male and female.
2.6 Entrepreneurship Development in Tanzania
Entrepreneurship development in Tanzania can be traced to three broad periods, namely pre-colonial, colonial and post independence. The independence period is further sub-divided into two periods 1961-1985 characterized by the state led economy except a brief period from 19961-1966 and from 1986 to date characterized by a market driven economy.
Koda (1997:30-31) asserts that the pre-colonial era entrepreneurship development was characterized by different productive and reproductive activities carried out by artisans, craftsmen and traders to meet society’s needs. In the course of carrying out such activities, gender differentiation took place such that certain activities were considered male while others were considered female, a phenomenon that changed from one society to the other. She also pointed out that entrepreneurs; irrespective of their gender were normally given a higher status in the society.
The imposition of colonialism in the second half of the 19th century brutally interrupted the independent entrepreneurship development among the artisans, craftsmen, and traders, by introducing a colonial economy to suit the interest of the colonial power.
According to Rugumamu&Mutagwaba (1999:68), transnational companies or their subsidiaries forcibly replaced indigenous entrepreneurs. Similarly, colonial commercial banks stifled indigenous entrepreneurship development by operating discriminatively against African traders as directed by colonial governments. In this regard, Rweyemamu (1999:69) points out that Africans in Tanganyika could not apply for a bank loan without the government permission.
Koda (1997:34) pointed out that, the restriction was in accordance with a colonial legislation called The Credit to Native (Restriction) Ordinance of 1931, while these restrictions applied to all indigenous entrepreneurs, it is plausible to argue from a gender perspective as koda(1997:34) does the situation, female entrepreneurs were more disadvantaged due to extant patriarchal relations.
As (Rugumamu & Mutagwaba (1999:69) pointed out that, while Africans faced all sorts of restrictions, the situation was slightly different for Asian minority.
Asian entrepreneurs were allowed to dominate the internal commerce although they could not engage in international import and export trade and even their attempts to undertake industrial production were curtailed for some time.
The result of this situation was that by independence in 1961, only members of the Asian community had accumulated critical mass of confidence, managerial expertise and capital.
As far as Africans were concerned, Hawkins argues that atypical African entrepreneur was characterized by “a lack of skills, education and capital”.
According to Koda (1997:35), African female entrepreneurs were worse off due to combination of factors such as colonial education and training contributed to gender imbalance in entrepreneurship development as well as cultural practices that denied women the opportunity to inherit property including land.
Five years after independence, Tanzania enhanced the policy of Socialism and Self reliance in 1967 through the Arusha Declaration. Accordingly, the major means of production, distribution and exchange were nationalized. Public enterprises were established to run the nationalized entities as well as the new ones that were established.
At the same time, given the extremely low level of entrepreneurship development among Africans at independence, the government undertook some initiatives to promote entrepreneurship in the country. One such initiative was the establishment of the National Small Industries Corporation (NSIC) in 1967 as a subsidiary of the National Development Corporation (NDC). Its mission was to provide training to artisans in rural areas. In practice, it provided a few of such activities in a few regions. By the time of its abolition in 1974, it had no practical impact. The Small Industries Development Organization (SIDO) replaced it in the same year.
After years of operating in the difficult environment of a state controlled economy, today SIDO is very dynamic in promoting small and medium enterprises.
To overcome its weaknesses, SIDO’s future strategies include striving to satisfy its clientele and achieving sustainability. Policy changes after independence notwithstanding, with regard to female entrepreneurs, Koda (1997:35-37) noted that factors affecting women’s entrepreneurship development during the colonial period were also at work after independence.
For example, she points out that, while parastatals stifled the small private enterprise sector, women’s enterprises were more affected than men’s. Furthermore, due to gender factors women were also disadvantaged in accessing SIDO’s facilities and resources.
During the period of state control of the economy, a number of laws were passed in order to regulate practices considered unsocialist.
These included the leadership code of 1969, the Human Resources Deployment Act of 1983 and the Economic and Organized crimes control Act of 1984.
According to Rugumamu& Mutagwaba (1999:71), by the Leadership Code of 1969, leaders in the ruling party, government and public enterprises were “prohibited from holding shares or accepting directorship in private enterprises, owning rental property, employing wage labour or receiving more than one salary”. Obviously, the result of the code was to stifle entrepreneurship development among the affected category of Tanzanians.
According to Rugumamu& Mutagwaba(1999,71), The Human Resources Deployment Act of 1983 focused on emerging small entrepreneurs since people who were deemed to be in officially recognized types of employment were relocated to rural areas and given pieces of land to work on.
Nchimbi (2002:19) pointed out that, this move suppressed nascent entrepreneurs in the informal sector.
Nonetheless, some researchers on entrepreneurship in Tanzania have viewed the Human Resources Deployment Act as a positive attempt in promoting entrepreneurship in the country.
Rugumamu& Mutagwaba (1999:71) on the other hand pointed out that, the Economic and Organized Crime Act of 1984 focused on medium and large scale entrepreneurs. As the name suggests the offences covered by this Act included “bribery and corruption, hording of commodities, organized crime, hording money, fraudulent schemes and theft of public property”.
Entrepreneurs who managed to survive during this period faced problems, including a deficient legal environment, lack of access to finance, a cumbersome system of business licensing, complex tax system, and numerous laws on standards and a massive amount of red tape.
Kristiansen (1999:154) was the view that, the cumulative effect of these problems and two decades of state control of the economy and entrepreneurship development in the country was that the potential for emergence of entrepreneurial activities was immensely reduced.
Lydall (1992: vi) corroborates this by pointing out that the expansion of entrepreneurship in Africa is curtailed by legal, administrative, socio-economic and political factors rather than the individual characteristics of entrepreneurs. In the same vein, Dana (in Kristiansen, 1999:153) and Bonu (1999:98) posit that minimal government intervention stimulates entrepreneurship in a society, whereas excessive government intervention does not, due to several factors.
Rugumamu& Mutagwaba), 1999:78) pointed, these factors to include corruption which raises the cost of business transactions, branding business people as capitalist exploiters, lack of confidence in government intentions on the part of business people as well as curtailment of business opportunities for co operatives, small and medium enterprises by public monopolies.
From 1986, Tanzania started to liberalize the economy following her acceptance of IMF and World Bank SAPs. In this regard, the government has introduced many reforms in favour of private sector development.
Accordingly, today the government acknowledges that its role is to facilitate the private sector and other economic agents in order to bring about fast economic growth and development.
In order to create an enabling environment for private sector development, the government has liberalized the economy, amended and enacted several investment related laws and policies, undertaken financial reforms, liberalized the trading regime and put in place an attractive investment package (www. tanzania.go.tz).
In the same vein, the government has institutionalized a consultative process with private sector. Likewise, the private sector uses its umbrella Organizations to interact with the government. Such umbrella organizations include the Tanzania Chamber of Commerce Industry and Agriculture (TCCIA), the Confederation of Tanzania Industries (CTI), the Tanzania Private Sector Foundation (TPSF) and the Tanzania National Business Council (TNBC) (www.tanzania.go.tz).
TNBC, formed in 2001, provides the main forum for public/private sector consultations on strategic issues of economic growth and development (www.tanzania,go.tz).
Hand in hand with instituting reforms, government efforts to develop female entrepreneurs who were in employment are reported to have gone to business much earlier than those in developed countries Rutashobya&Nchimbi (1999:212).
Rutashobya & Nchimbi (1999:215) With regard to psychological constraints pointed the major ones facing female entrepreneurs as low confidence, low achievement motivation, low future orientation and passive orientation.
Rutashobya & Nchimbi (1999:215) also pointed out that, due to gender reasons, female entrepreneurs prefer to rely on own family savings to finance their business.
Consequently women’s multiple roles and restricted access to finance, especially with regard to labour used as well as growth and marketing strategies, shape their entrepreneurial behavior. Rutashobya & Nchimbi (1999:216) asserts that entrepreneurial traits are influenced by several factors, namely infrastructural, environmental turbulence, and life experience. Infrastructural factors refer to political, legal, financial, logistical, economic and social systems and structures. Environmental turbulence factors refer to rapid threatening change while life experience factors relate to school and work environment.
According to Rutashobya & Nchimbi (1999:216), the influence of gender on female entrepreneurship has been taken as an environmental factor. In this regard, socio-cultural and traditional values and prejudices are said to have seriously affected women’s entrepreneurial traits. For example, El-Namaki; Stevenson; Rutashobya & Nchimbi (1999:216) assert that, early conditioning has affected women’s level of self-confidence, achievement motivation and ability to take risks.
Rutashobya & Nchimbi (1999:216) further pointed out specifically that women have been conditioned from very early stage that they will be wives and mothers only, their place is in the kitchen and they are the second class people in relation to men. Kibera&Kibera (1999:238) were of the view that, due to these socio-cultural constraints, female entrepreneurs are said to give only secondary importance to entrepreneurship activity.
2.7 The role of Women entrepreneurs in Tanzania
Individually, self-belief and entrepreneurship are factors that can be associated to this century. Self-employment through entrepreneurship is one way to ease the unemployment rates. Women entrepreneurship has as well been brought into light in various ways.
Women just like men have been involved in economic activities since early years. Their involvement has been in addition to their participation in the domestic sector. However, their economic activities have focused primarily on meeting basic needs, yet lack of resources and control of resources has been common. Their contribution in micro- entrepreneurship has been equally unpaid, unrecognized and undervalued. By conducting studies, women’s role in the economy will be enhanced.
By empowering women, there will be a development in the human capital whereby a continuity of the enterprises can be ensured since the young generation will be attracted in to becoming entrepreneurs.
There is evidence that women’s projects have the potential to grow. Women also have the ability, and with proper guidance they can be successful. Micro Entrepreneurship makes significant contribution to the family, community and local economy.
2.8 SME Policy framework in Tanzania
Recognizing that women have less access to productive resources such as land, credit and education due to cultural barriers, and that they stand on uneven ground, the SME Development Policy specifies that gender mainstreaming will be enhanced in all initiatives pertaining to SME development, and outlines the need for specific measures that promote women’s entrepreneurship and they are stated as follows:
i. Facilitate SME service providers to design special programmes for women entrepreneurs and disadvantaged groups; and ii. Identify factors inhibiting women and disadvantaged groups from going into business and design programmes to address those factors.
Although by November 2003 specific strategies for addressing women’s enterprise development had not been drafted, the implementation plan will take a sectoral approach supported by the rationale, “if you want to grow the Tanzanian economy, you have to develop the food sector, and if you want to do that, then you have to develop women”.
To complement the Government’s focus on women entrepreneurs, the MITM-SME
Section is also the implementing partner for the ILO’s WEDGE Programme in
Tanzania.
Time is dedicated to leading projects to promote women’s entrepreneurship, building capacity in associations of women entrepreneurs, and implementing gender mainstreaming workshops for government officials, donor organizations and BDS providers.
One of the key outputs from the gender streaming initiative is the FAMOS (female and male operated small enterprises) Check, a gender audit tool that is being used in training workshops to sensitize organizations in dealing directly with SMEs, and to assist them in monitoring how specific interventions are reaching and impacting both women and men.
In their review of development partner and donor efforts, Olomi and Nchimbi
(2002) concluded that SME policies and programmes of the past have differed in the extent to which they addressed gender issues.
Some have shown the need to address women’s needs but fell short of specific strategies, while others did come up with specific strategies. UDEC later carried out a survey of donor-supported programmes on behalf of the Africa Project Development Facility (APDF), and in February 2003 released a directory of donor-supported SME and private sector programmes (Olomi, Baisi and Philemon, 2003). It does not appear that a large proportion of donor attention has been placed on the business development and growth needs of women entrepreneurs. However, it is noted that the Donor Advisory Committee (DAC) (now the Donors Partners Group) has occasionally established DAC sub-groups to focus on a particular sector or issue. A case in point is the Sub-group on Micro-finance.
It is suggested that a similar approach be adopted by donor groups interested in addressing some of the serious challenges that are impeding the further growth and development of women’s enterprises in Tanzania, particularly capacity building of women-owned MSEs and improving access to financing, training, and business development services.
In recognition of the importance of SME sector, the Government has continued to design and implement a number of policies and programmes supportive to the development of the sector.
The National Employment Policy recognises that the private sector including SMEs is the major source of employment in Tanzania and outlines policies that will contribute to the creation of an enabling environment for private sector development.Other policies with a bearing on the development of the SME sector include: National Trade Policy, Gender and Women Development Policy, Cooperative Development Policy and the Rural Development Strategy. Central to all these policies, is a creation of an enabling environment, building of a robust private sector and articulation of strategies that will create a sustainable growth.
A number of institutions, both public and private were established to implement and coordinate various programmes arising from these policies. Furthermore, the government has undertaken various measures aimed at creating an enabling environment to enhance enterprise development. These include, among others, maintaining macro-economic stability; review of tax regime; simplification of licensing procedures; implementing a programme on ‘Business Environment Strengthening for Tanzania- BEST’ and implementation of a ‘Competition Policy’.Apart from SIDO, various institutions have been established to support enterprise development in Tanzania. They include the Tanzania Industrial Research Development Organisation (TIRDO) which supports local raw materials utilisation; Centre for Agricultural Mechanization and Rural Technology (CAMARTEC) which is involved in promotion of appropriate technology for rural development; Tanzania Engineering and Manufacturing Design Organisation (TEMDO) responsible for machine design; Tanzania Bureau of Standards (TBS) mandated to promote and enforce standards; and the Board of External Trade (BET) which is instrumental in promotion of exports mainly through trade fairs.Government owned tertiary training institutions have also introduced a number of units which provide research, consultancy and training services in SME related issues. These include the University of Dar es Salaam Entrepreneurship Centre (UDEC) and the Technology Development and Transfer Centre (TDTC). Both are active in incubation initiatives.
The Ministry of Industry, Trade and Marketing (MITM) has developed a National Incubator Programme, which is a framework to guide all initiatives in this direction. This programme is supposed to co-ordinate incubation initiatives, including those led by SIDO, Technology development and Transfer Centre (TDTC) of UDSM and the UDSM Entrepreneurship Centre (UDEC), 2003.Despite all these and other completed and ongoing interventions, we are yet to see a real takeoff in terms of support, especially to women entrepreneurs; this is according to discussions with women entrepreneurs. They all stated to be in a stand-alone situation with no support from agencies.
CHAPTER THREE
3.1 Research Methodology
Introduction
The objective of the primary research was to understand the factors motivating Tanzanian women to become entrepreneurs. It went further to enhance the understanding of women entrepreneurship, what motivates them to undertake entrepreneurial activities, and examine their attitudes concerning entrepreneurship.
The primary research comprised a sample survey of 83 women in Dar es Salaam, Mwenge makonde carving market and women owned clothing shops at Kariakoo, followed by a focus group discussion which involved 4 women entrepreneurs from both businesses, the two businesses were selected have a good number of women.
3.1.1 Research Design
The study comprised a sample survey of 83 women entrepreneurs, followed by an in-depth study of a smaller group of 4 women, all drawn from the sample.
The study focused on women in two women dominated activities: makonde carvings business and clothing business at Mwenge and Kariakoo respectively both in Dar es Salaam chosen as the main commercial centre of Tanzania. Along with my interest on the factors motivating these women to become entrepreneurs, the study included women who had been in business for at least two years so that it can be easy to learn what motivates them to continue working as entrepreneurs.
3.1.2 Study Area
For the purpose of the study, Dar es Salaam has been selected since it has potential for growth of these two selected entrepreneurial activities and furthermore women entrepreneurs are easily accessible in these two business areas (Mwenge Makonde and Kariakoo) . Dar es Salaam has been endowed with several facilities for the conducive growth of women entrepreneurs when compared to other regions in Tanzania. So, it is researcher’s view that Dar es Salaam is ideally suited for a study on women entrepreneurship in the carving and clothing sectors.
3.1.3 Sample and sampling procedure
The total number of registered small businesses market run by women entrepreneurs at the Mwenge Makonde carvings 135 whereas those in Kariakoo clothing shops were 258 during the time of data collection. A total of 83 women entrepreneurs from the two businesses participated in the study, 44 (17%) women entrepreneurs from the clothing business were interviewed, and 39 (28%) women entrepreneurs from the carving business responded to questionnairs.The sample was selected by using purposive sampling method.
The reason for choosing these two businesses is that they have a good number of women entrepreneurs, and are allocated at areas that were convenient to the researcher. Furthermore, since the two types are quite different the researcher wanted to observe whether there would be any significant differences in factors motivated these women to become entrepreneurs.
3.2 Research Tools
Different types of data collection tools were applied in this study considering types of the respondents. Major data collection tools applied in this study were as follows:
1. Semi-Structured Interview Schedule
A semi-structured interview schedules was used to collect data from women entrepreneurs in the clothing business.
2. Semi-structured questionnaires were also used to collect data from women entrepreneurs in the carving business.
3. A Focus group discussion
The objectives of the focus group discussions were to get personal experiences of the women and their drives, successes and problems in becoming entrepreneurs.
During the survey, a total of 4 women entrepreneurs were selected (from the 83 who responded to the survey) for a further discussion to better understand their experiences in working as entrepreneurs.
The focus was on experiences and driving factors, as well as how they started their enterprises. The composition of the women studied was designed to make it possible to learn from the two types of businesses. That is, two from each business type.
3.3 Data Collection Methods, Procedures and instruments
The success of any research objective depends on how data and information are collected and practical applicability of quality research instruments.
3.3.1 Primary Data
Primary data were collected from the sample chosen and used for the purpose of this specific study. The researcher and assistants had to visit targeted Carvings shops to get the shop owners for filling the questionnaires. On the part of the clothing business the researcher and assistants conducted interview to the shop owners. All the respondents were able to fill the questionnaires and the interviewees devoted their time to respond to questions. Furthermore four women; two from each group participated in an in-depth discussion.
3.3.2 Secondary Data
Secondary data have been collected from books, journals, periodicals, reports, the internet, and published PhD and other levels theses.
3.3.3 Data Processing and analysis
The data from questionnaires were screened and coded for detailed analysis. SPSS spread sheet computer programme was used to generate both qualitative and descriptive statistics and tables were used for data presentation. The in-depth discussions with selected women entrepreneurs were also presented.
CHAPTER FOUR
4.0 Introduction
The chapter presents the discussion of the findings of the study. The presentation is organized according to the research objectives and questions. The chapter is organized as follows:
i. Demographic factors of women entrepreneurs
ii. Motivation for women entrepreneurship
iii. Reasons for continuing working as entrepreneurs
iv. Problems facing women entrepreneurship,
v. Their attitudes towards entrepreneurship
vi. Goals and dream in relation to women entrepreneurship and support or help that would aspire for women entrepreneurs in Tanzania.
4.1 Results and Discussion
Age Status: Most of the women entrepreneur (61.4%) belonged to the age of 35 years or below and 38.6% belonged to the age of 36-40 years (Table1). It appears generally that most of the women think of a business idea in their thirties. One more reason for this category turning to entrepreneurship could be that they viewed business as flexible and felt sure that they could manage both houses and business. Kim (1994) stated that generally enter into business after their thirties.
Table 1: Age distribution of women entrepreneurs (N=83)
|Age |Respondents |Percent |Valid Percent |
| | |51 |60.7 | |
| |35 years or below | | |61.4 |
| |Up to 40 years |32 |38.1 |38.6 |
| |Total |83 |98.8 |100.0 |
Source: Field Data 2009
Educational Background: The results (Table 2) indicate that most of the women entrepreneurs have reached the secondary education level(27.7%), diploma in business (22.9%), first degree/advanced diploma (16.9%),certificate in business (15.7%), primary education(12%) and master degree (MBA) (4.8%).A majority of women entrepreneurs in the two business groups have better education qualifications. The data reflects that educational status does not necessarily influence women seeking entrepreneurship (Rani 1992). Some women were less educated but they have their own system of accounting and they manage their small businesses.
Table 2: Educational Level of women entrepreneurs (N=83)
|Education Background |Respondents |Percent |Valid Percent |
| |Master Degree(MBA) |4 |4.8 |4.8 |
| |Degree/equivalent |14 |16.7 |16.9 |
| |(Business) | | | |
| |Diploma in Business Studies |19 |22.6 |22.9 |
| |Certificate |13 |15.5 |15.7 |
| |Secondary |23 |27.4 |27.7 |
| |Primary |10 |11.9 |12.0 |
| |Total |83 |98.8 |100.0 |
| | | | |
Source: Filed Data 2009
Income Level of women entrepreneurs: The income levels were set specific for this study. The results (Table3) indicate that most of the women entrepreneurs in the two businesses of this study were medium income earners (55.4%) as per income levels set specific for this study. Low income earners were (26.5%) and just (18.1%) were high income earners and a majority of these were from the carving business.
Table 3: Level of Income of women entrepreneurs (N=83)
|Level of Income |Frequency |Percent |Valid Percent |
| |Low (5-10m) |22 |26.2 |26.5 |
| |Medium(20-50m) |46 |54.8 |55.4 |
| |High(50-100) |15 |17.9 |18.1 |
| |Total |83 |98.8 |100.0 |
| | | | |
Source: Field Data 2009
Past work experience of women entrepreneurs: The results (Table 4) indicate that most of the women entrepreneurs in the category under the study are equipped with past work experience (54.2%) and some of the women (45.8%) did not work previously, this means they entered into the business just after school.
Table 4: Past work experience of women entrepreneurs
|Past Work Experience |Respondents |Percent |Valid Percent |
| |YES |45 |53.6 |54.2 |
| |NO |38 |45.2 |45.8 |
| |Total |83 |98.8 |100.0 |
| | | | |
Source: Field Data 2009
Motivation for Women Entrepreneurship
In order to find out the factors influencing the women to become entrepreneurs 6 attributes that can influence their decision were identified such as desire to do business, do the job they like, supplementing family income, similar previous job and out of retirement. These are attributes are as discussed below: Desire to do business: The most important motivating factor (Table 5) to start entrepreneurship venture was the desire to do business, 41% of women acted on their own idea in setting up their enterprises, which reflects independence in making decisions something that should be encouraged.
Do the job they like: 28.9 percent of women opined that business created an opportunity for them to do the job they liked, as opposed to being employed which sometimes is forced by necessity.
Supplement family income: To supplement family income appeared to be motivating factor to start entrepreneurship venture (24.1%); these women decided to enter into business as means of supplementing income for their families.
Schwartz (1979) expressed that ‘economic necessity’ was found to be one of the most prime motivations in emerging entrepreneurship.
It also reveals that there is a definite growing awareness in the society and women in particular that if the family has to maintain a reasonable standard of living women should supplement to family income with skills they have instead of relying on spouses income.
3.6 % of women had similar previous jobs in the category they are operating while 2.4% came out of retirement and decided to start their own business to support their families.
Table 5: Motivating factors for women entrepreneurs
|Factors |Respondents |Percent |Valid Percent |
| |Out of retirement |2 |2.4 |2.4 |
| |Similar previous job |3 |3.6 |3.6 |
| |Supplement family Income |20 |23.8 |24.1 |
| |Do the job they like |24 |28.6 |28.9 |
| |Desire to do Business |34 |40.5 |41.0 |
| |Total |83 |98.8 |100.0 |
| | | | |
Source: Field Data 2009
What are the reasons for continuing to work as an entrepreneur?:The results in (Table 6) reveal that Forty two respondents (50.6%) stated that the main reason for continuing to work as entrepreneurs is the success they have achieved in business. Eighteen respondents (21.7%) enjoy applying skills and competence acquired in business,12% enjoy doing the entrepreneurial job, another 12% of respondents devoted entrepreneurship as their primary job and 3.6% seen increased social networks as the reason.
Table 6: Reasons For women to continue working as entrepreneurs
|Reasons |Respondents |Percent |Valid Percent |
| |Increased social network |3 |3.6 |3.6 |
| |Business as a primary job |10 |11.9 |12.0 |
| |Use skills and competence |18 |21.4 |21.7 |
| |acquired | | | |
| |Enjoying the job |10 |11.9 |12.0 |
| |Success in Business |42 |50.0 |50.6 |
| |Total |83 |98.8 |100.0 |
| | | | | |
| | | | |
Source: Field Data 2009
What are the problems Facing Women Entrepreneurs? The results (Table7) revealed that the major problem faced by women entrepreneurs Twenty eight respondents or (33.7%) is identifying opportunities this causes most of the women to copy what others are doing just in the same way and in the same area. Seventeen respondents or 27.7% mentioned lack of business training at start up as their main problem.Sixteen respondents or 19.3% pointed out Lack of skilled labour force as a major problem especially to the women entrepreneurs in the carving businesses who deal a lot with foreign customers require labour force equipped with communication skills.On the other hand, although lack of business training is a major problem during start-up (27.7%) is perceived as a minor problem as the business progresses. This is a reasonable observation since the women entrepreneurs would normally have acquired some business skills as their business grew. Sixteen respondents or 19.3% pointed out Government procedures as being a problem in terms of taxation, importation and clearance procedures especially for women in the clothing business and those in the carving business are affected by government’s role to organize and manage export and import in the country. The mismatch between production structure and demand in the international markets results in declining competitiveness of domestic produced export products. Finally 7.2% of respondents were having problems in obtaining lines of credit. Table 7: Problems facing women Entrepreneurs in Tanzania
|Problems |Respondents |Percent |Valid Percent |
| |Obtaining lines of credit |6 |7.1 |7.2 |
| |Lack of skilled labour |17 |20.2 |20.5 |
| |Lack of business training at start |16 |19.0 |19.3 |
| |up | | | |
| |Government procedures |16 |19.0 |19.3 |
| |Identifying opportunities |28 |33.3 |33.7 |
| |Total |83 |98.8 |100.0 |
Source: Field Data 2009
Having worked as an entrepreneur has your attitude changed?
Results(Table 8) show that most of the women entrepreneurs (71 or 85.5%) have their attitudes change towards more positive as they continue work as entrepreneurs due to success they are getting out of business and they enjoy challenges they encounter as they get energized and look forward. Seven respondents or 8.4% have negative attitudes towards entrepreneurship due to the failure proved by their business performance while five respondents or 6% have not changed attitudes at all.
Table 8. In what ways does your attitude towards entrepreneurship have been affected during your experience in the enterprise?
|Attitude Change |Frequency |Percent |Valid Percent |
| |Not at all |7 |8.3 |8.4 |
| |Positive |71 |84.5 |85.5 |
| |Negative |5 |6.0 |6.0 |
| |Total |83 |98.8 |100.0 |
| | | | |
Source: Field Data 2009
What are your goals and dreams in relation to women entrepreneurship?
Results ( Table 9) show that most of the respondents (41%) aim at seeing gender equality and women empowerment, 24.1% enjoy contributing to society’s well being, 21.7% aim at eradicating extreme poverty, 8.4 % enjoyed extended social network while 4.8% felt prestige.
Table 9 Goals and dreams in relation to women entrepreneurship
|Goals and Dreams |Respondents |Percent |
| |Prestige |4 |4.8 |
| |Extended social network |7 |8.4 |
| |Eradicate extreme poverty |18 |21.7 |
| |Contribute to society 's well being |20 |24.1 |
| |Promote gender equality and empowerment |34 |41.0 |
| |Total |83 |100.0 |
| | | | |
Source: Field Data 2009
What kind of support or help would aspire for women entrepreneurs in Tanzania?
Results (Table 10) reveal that most of the women entrepreneurs (42.2%) needed education and training especially in business and management lessons, 28.9% wanted financial support, 24.1% wished to operate in a conducive policy and convenient legal environment, women entrepreneurs in the clothing business were the ones very much concerned with the policy issues as they just in books but in real practices there is no support and the operating environment is very difficult in terms of taxation and clearance, changes and 4.8% wanted to have access to the market, this was the case with women in the carving business.
Table 10 .Support or help that would aspire for Women Entrepreneurs in Tanzania
|Support required |Frequency |Percent |Valid Percent |
| |Access to the market |4 |4.8 |4.8 |
| |Good policy and legal infrastructure |20 |23.8 |24.1 |
| |Financial Support |24 |28.6 |28.9 |
| |Education and Training |35 |41.7 |42.2 |
| |Total |83 |98.8 |100.0 |
Source: Field Data 2009
The results above can be summarized that, the sample of women interviewed in this study is clearly not typical of the women entrepreneurs described in most of the reviewed literature. They are different, because the fieldwork for this study focused on women in formal rather than those in informal business. The literature generally shows that Tanzanian women entrepreneurs have low levels of education and very limited access to economic resources. This is not the case in this study as women entrepreneurs in this study are well educated, their businesses are formal , and they are successful the reason for continuing working as entrepreneurs; a good number of women have also past experience in various fields.
4.1 Profile of the Women Entrepreneurs participated in the Focus group discussion
Of the 4 women who participated in the in-depth study, one has small sized business, two have medium sized enterprises and one has a large enterprise as per definition of this particular study. They are all married, age-wise, of the 4 women; three are in thirty five or below age band and one is in up to forty age band. They came from different backgrounds. In terms of education, they all completed college.
All have had past experience in their work. Their experiences help them in business by providing network (their previous customers) and instilling confidence to deal with different types of people and situations. The women’s family backgrounds range from entrepreneurs in the same fields to peasants.
Two of the women enjoyed the business activity at an early age by seeing the people around them doing .They then familiarized with the business and they later turned into serious business activities from the skills acquired. Emmy whose father was making the carvings was inspired and started making the carvings at her young age and proceeded with the business after her secondary education.
Sabikha with, a successful boutique, started working in the family shop when she was in standard seven, she was the motivated to undertaking the same business when she completed college.
Rabia got the urge for business when she was working as an employee in the clothing shop at Kariakoo.She started by purchasing few jeans trousers on whole sale and retail them at bit higher price; now she can import a variety of clothing from different Asian countries and she is confident with what she is doing.
The reason for the women doing these two types of businesses was that they enjoy being in business they do, even if they get other things to do they will still keep their businesses.
This was the case for all participants from both groups, as they see business as important part of their lives not just as the mechanism for increasing income.
This is in harmony with Herzberg’s two factor theory, which pointed out that a person may be satisfied with the internal circumstances, in the case at hand women were satisfied by the job itself.
Another reason for women to choose entrepreneurship is that it enables them to combine their multiple roles, that is, business and family responsibilities. Entrepreneurship offers women with more flexibility as one Amina said she can prepare her children and takes them to school in the morning before she goes to open her clothing shop at Kariakoo, and can pick them in the afternoon conveniently compared to when she was working as an employee in a clothing shop.
An interview guide (Appendix 2) was used to guide data collection in the focus group discussions. However, during the discussions, follow-up questions were asked as and when necessary. Analysis was done by tracking common themes, drives for going into business, experiences, challenges, and future aspirations.
Such motivational factors like early socialization of activities and later on turning to serious businesses were also revealed on some women in research by ILO (2003)
CHAPTER FIVE
5.0 Conclusion & Policy Implications
This study draws a conclusion that, desire to do business, doing the job they liked, and supplementing family income play a crucial motivational role in women who own business at Mwenge carving market and Kariakoo clothing shops. It was designed to determine personal and business characteristics of entrepreneurial ventures owned by women, factors motivated them to enter into business, problems faced by women entering business, attitudes of women doing business, and reasons for women to continue work as entrepreneurs.
Most of the women entered into business because they had the desire to do business, they were the owners of the firms, and majority was equipped with past work experience. Personally they were better educated and 35 years old or below.
The major factors motivated women to start business were the desire to do business, do the job they like, supplementing family income, were doing similar job in the past and come out of retirement. The major business problems they faced in order of importance were identifying opportunities, lack of business training at start up, lack of skilled labour, government procedures and obtaining credit lines.
Despite of problems they faced, women entrepreneurs benefited through success in business, doing the job they liked, independence, financial and other benefits.
The specific findings of this study are as follows:-
It was also observed that Tanzanian women entrepreneurship suffers from lack of government support. Based on the results we can argue that different authorities in the country could have a more active role in supporting entrepreneurs both at starting points and at later stages during their progress. It is clearly stipulated in the policy but most of the issues are not put into practice yet. The support should focus on the needs arising from entrepreneurs themselves and especially those aspects which the entrepreneurs have no information about.
It has also been noticed that both entrepreneurs from the two groups gave an impression that they have been satisfied and do not regret about their lives as entrepreneurs, rather they feel that their personal attitudes have developed into a more positive during the last two years. This is evidenced both by their answers as well as the real situation during the interview process. It is for the policy makers to give a special attention on women entrepreneurship since it provides a considerable work force; areas of taxation, education and Training, export/import procedures, goods clearance procedures can further be improved so as to create conducive working environment for women entrepreneurs.
Though a few non-governmental organizations claim to support the creation of new business in form of financial support and guidance, the image of women entrepreneurship seemed to be challenging and long way to stand alone. The government and agencies should put more effort to change the image of women entrepreneurship to be an encouraging one since it helps reduce the problem of un- employment and further reduces crimes as many people are involved in legal businesses.
For further development suggestions, one possibility would be for licensing authorities to prohibit hotels from selling carvings and make the Mwenge market be the sole sellers of carvings so as to encourage women entrepreneurs with more guidance and support.
It was also found that no significant differences on the factors motivating women to become entrepreneurs from the two groups.
5.1 Recommendations
i. There should be a curriculum change along with proper career guidance for girls in educational institutions, which will shape them to become capable entrepreneurs in future. ii. Success stories of women entrepreneurs from varied backgrounds should be popularized through text books of schools and colleges. All possible media should be used to project these role models. iii. Women as a potential source of entrepreneurship should be targeted by government and other agencies. iv. Efforts should be made to locate entrepreneurial potentialities amongst women and opportunities should be provided to them. This is possible as entrepreneurship allows them to perform their multiple family roles as well.
The study revealed that if women are well educated as the women in this particular study they are a potential contributors to the national economy, therefore education among women should be given an upper hand by the society in general. The society has also to be convinced about the significance of women entrepreneurship then their attitude will change, their roles and expectations will change and they will provide moral support, necessary guidance and help as needed.
5.2 Areas for further Research
Due to time and financial constraints; the researcher selected two business types in Dar es Salaam therefore the sample size was limited. It is therefore suggested that future researchers establish a broader study on women entrepreneurship that will cover more regions in order to increase the validity of the results. Moreover another important study to support the study at hand would be to establish the total number of women entrepreneurs in Tanzania, their distribution by sector and the size of their enterprises.
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Appendix 1
7.1 INTERVIEW QUESTIONS
The way questions are formed and worded was the most crucial element in determining how the interviewee will respond. Primary data was collected using closed-ended questionnaires and in-depth interviews which were personally administered to a selected sample of women who own and work in their own enterprises. The questions were so set to allow easy data analysis which is unlike with open-ended questions.
THE OPEN UNIVERSITY OF TANZANIA
FACULTY OF BUSINESS MANAGEMENT
FACTORS MOTIVATING TANZANIAN WOMEN TO BECOME ENTREPRENEURS, A CASE OF CARVING BUSINESS AT MWENGE AND CLOTHING BUSINESS AT KARIAKOO
|Introduction |
|Any information you give in this questionnaire will ONLY be used for ACADEMIC PURPOSES and will be treated CONFIDENTIAL. |
|I will be glad if you can answer all questions |
SECTION I
There are 10 questions in this section. This section contains questions that are about various experiences you have in working as an entrepreneur. Please put a tick (√) in only one box for each question given which you think corresponds to your experiences on your current business
1. Why did you choose to become an entrepreneur? Please tick(√) one
( Desire to do Business
( Do the job they like
( Supplement family Income
( Similar previous jobs
( Come out of retirement
2.0 From your experience as an entrepreneur rate according to the level of importance, why you want to continue with entrepreneurship.
Rate your opinion on the five point Likert Scale:
5=extremely important, 4= very important, 3= important, 2=Not important, 1=strongly not important
□ Success in business □ Enjoy the job □ Use skills and competence acquired □ Increased social network □ Business as a primary job
| |
| |
| |
3.0 What Problems do you face as an Entrepreneur?
□ Identifying opportunities
□ Lack of business training at start up
□ Lack of skilled labour
□ Government procedures
□ Obtaining credit lines
4.0 Having worked as an entrepreneur Has your attitude changed towards a A. More positive B. Less positive C. Not changed at all; during the past two years
Please choose one
5.0 What kind of support or help would aspire for women entrepreneurs in Tanzania? Please tick (√)
□ Financial support
□ Education and Training
□ Good policy and legal infrastructure
□ Access to the market
6.0 What do you think motivates Tanzanian women the most become entrepreneurs? Please Rate your opinion on the five –point Likert Scale:
5=extremely important, 4= very important, 3= important, 2=Not important, 1=strongly not important
□ Job satisfaction □ Out of retirement
□ Achieving Social status
□ Increasing social network
□ I enjoy doing the work
7.0 What are your goals and dreams in relation to women entrepreneurship? Please tick (√) one
□ Eradicate extreme poverty within the society
□ Promote gender equality and women empowerment
□ Contribute to society’s well being
□ Promote entrepreneurship
8.0 (a) Mention at least two major problems which you have been experiencing with your business
(1) ------------------------------------------------------------------------------------------------------------
(2) ------------------------------------------------------------------------------------------------------------
(b)What do you recommend to the authorities as solutions to solve the problems you stated in 10 (a)?
(1) ------------------------------------------------------------------------------------------------------------
(2) -----------------------------------------------------------------------------------------------------------
SECTION II: PERSONAL PROFILE
There are 4 questions in this section.
INSTRUCTION: I will be grateful if you can fill in the following details about your personal profile. Responses given will be used for research purpose only.
1. What is the Size of your business? A. Small scale B. Medium scale C. Large scale
2. What is your highest education level? Tick only one A. Primary B. Secondary C. Certificate D. Diploma E. Degree/Advanced Diploma F. Master Degree 3. How old are you? ----------------------------- 4. Have been working before becoming an entrepreneur?
Note: The respondent must be the owner-manager (one who makes major decisions in the business)
Thank you for your co-operation and assistance in my study
Appendix 2
7.2 Focus Group Discussion Guide
1. Motivation to start business
i. What was the motive for starting the business? ii. Anything pushed you into starting the business? iii. Are the benefits derived from the business at the start changing as it grows?
2. Process of starting and developing business
i. How did your business start?
3. Progress
i. What are your future growth aspirations with your business?
4. Challenges
i. What Challenges does your business face? (Internal and external) ii. Did the challenges impact the business and the owners? iii. Are there any advantages in business from being a woman?
5. The Future
i. Expectations (opportunities, problems) how they match with the intentions and reasons for differences
6. Lessons from the woman’s experience
i. What can other women learn from her experience? ii.What can local government, central government do to help out women entrepreneurs in Tanzania?
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The undersigned certifies that he has read and hereby recommend for acceptance by the Open University of Tanzania the Dissertation titled: “Factors Motivating Tanzanian Women to become Entrepreneurs: A case study of Mwenge Makonde Carving market and Kariakoo women owned clothing shops” submitted to the Open University of Tanzania for partial fulfillment of the requirements for the Master Degree in Business Administration.
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Dr. Felician Mutasa
SUPERVISOR
Date -------------------------------
DECLARATION
I, Fatma Hajji Shangazi, declare that this dissertation is my own original work and that it has not been presented and will not be presented to any other University for a similar or any other degree award.
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Fatma Hajji Shangazi
Date----------------------------------
ACKNOWLEDGEMENT
I would like to sincerely thank my supervisor Dr. Felician Mutasa, who provided me with constructive criticism, guidance, and technical assistance at all stages of this research. His moral courage and remarkable patience will always be appreciated. The success of this work was also contributed by John Haraba and Salim Makoko who assisted me during the field work,for this I wish to thank them. I also extend my thanks to my husband Abdul Mgheni and my daughters Atika and Yusra.All these tolerated the numerous times which I was supposed to give them full attention, but nevertheless they appreciated all to ensure that I complete my study. I also express my heartfelt appreciation to Mariam and Emmy on behalf the women entrepreneurs at Kariakoo and Mwenge Makonde carvings market who devoted their time to participate in this study.
ABSTRACT
Entrepreneurship in Tanzania is increasing exponentially as the country transitions from an agriculture-based economy to a market-based economy. Most of the growth is being spearheaded by young women selling agricultural and home-based goods such as catering and arts and crafts. The objective of this research was to examine the motivational factors for Tanzanian women to become entrepreneurs. It also sought to find out the link between motivational theories and practical examples. The research methodology employed was mainly qualitative. The methods used in data collection were interviews, questionnaires and in-depth interviews.
The study areas were Mwenge makonde carvings market and Kariakoo women owned clothing shops both in Dar es Salaam, respondents were selected using purposive sampling. The results revealed that a majority of women entrepreneurs in these two businesses fall in the 35 or below age brackets earn between Tsh.20-50 million per year, have primary or more education level. They are driven more by desire to do business, doing the job they liked, and supplementing the family income. Almost all issues are comparable to what has been studied in other countries. The study provides practical examples of the attitudes, view points and experiences of the two groups of women entrepreneurs both working in Dar es Salaam. Moreover, the research presents a clear insight into entrepreneurial values and the urge to work and continue as entrepreneurs.
The research is recommending that efforts should be made by the Ministry of Education to introduce curriculum changes to accommodate entrepreneurial studies from primary schools, and also as the policy recognizes that women have less access to productive resources due cultural barriers and pointed out that gender mainstreaming will be enhanced in all initiatives pertaining to SME development; this should not only be in papers but be in practice so that women entrepreneurship is promoted through training especially at starter up, easy access to financial facilities and reliable markets for their products locally and internationally.
ACRYONIMS AND ABBREVIATIONS
|BDS |Business Development Services |
|BET |Board of External Trade |
|BRELA |Business Registration and Licensing Authority |
|CAMARTEC |Centre for Agricultural Mechanization Rural Technology |
|CTI |Confederation of Tanzania Industries |
|EOTF |Equal opportunity for All Trust Fund |
|ESRF |Economic and Social Research Foundation |
|FAMOS |Female and male operated small enterprises |
|FAWETA |Federation of Association of Women Entrepreneurs in Tanzania |
|GDP |Gross Domestic Product |
|ILO |International Labour Organization |
|ISOs |Industrial Support Organizations |
|MITM |Ministry of Industry Trade and Marketing |
|MSEs |Micro and Small Enterprises |
|MSFs |Micro and Small Farms |
|MSMEs |Micro Small and Medium Enterprises |
|NACH |Need for Achievement |
|NGOs |Non- Governmental Organizations |
|NBS |National Bureau of Statistics |
|NDC |National Development Corporation |
|NEDF |National Entrepreneurship Development Fund |
|NIGP |National Income Generating Programme |
|NISS |National Informal Sector Survey |
|NMB |National Microfinance Bank |
|NSIC |National Small Industries Corporation |
|SELF |Small Entrepreneurs Loan Facility |
|SIDO |Small Industries Development organization |
|SIDP |Sustainable Industrial Development Policy |
|SMEs |Small and Medium Enterprises |
|TAFOPA |Tanzania Food Processors Association |
|TASISO |Tanzania Small Industries Support Organization |
|TBS |Tanzania Bureau of Standards |
|TCCIA |Tanzania Chamber of Commerce Industry and Agriculture |
|TDTC |Technology Development and Transfer Centre |
|TEMDO |Tanzania Engineering and Manufacturing Design Organization |
|TIRDO |Tanzania Industrial Research Development Organization |
|TNBC |Tanzania National Business Council |
|TPSF |Tanzania Private Sector Foundation |
|VETA |Vocational Education Training Authority |
|VIBINDO |Viwanda na Biashara Ndogondogo |
|WDF |Women Development Fund |
|YDF |Youth Development Fund |
| | |
| | |
| | |
|List of Tables | |
|Table 1: Age Distribution of women Entrepreneurs-------------------------------- |pg 53 |
|Table 2: Educational Background of Women Entrepreneurs--------------------- |pg 54 |
|Table 3: Level of Income of Women Entrepreneurs------------------------------- |pg 55 |
|Table 4: Past work experience of women Entrepreneurs-------------------------- |Pg 56 |
|Table 5: Motivating factors for women to become entrepreneurs---------------- |pg 57 |
|Table 6: Reasons for women to continue Working as Entrepreneurs------------ |pg 58 |
|Table 7: Problems Faced by Women Entrepreneurs in Tanzania---------------- |pg 59 |
|Table 8: Attitudes of women Entrepreneurs---------------------------------------- |pg 60 |
|Table 9: Goals and dreams in relation to women Entrepreneurship------------- |pg 61 |
|Table 10: Support and help that would aspire for women Entrepreneurs------- |pg 62 |
Table of Contents
CERTIFICATION-------------------------------------------------------------------------------------i
DECLARATION---------------------------------------------------------------------------------------ii
ACKNOWLEDGEMENT----------------------------------------------------------------------------iii
ABSTRACT---------------------------------------------------------------------------------------------iv
ACRONYMS AND ABBREVIATIONS---------------------------------------------------------v-vi
LIST OF TABLES-------------------------------------------------------------------------------------vii
TABLE OF CONTENT--------------------------------------------------------------------------viii-ix
CHAPTER ONE 1
1.1 Introduction 1
1.2 Research Problem 2
1.3 Research Objectives 3
1.3.1 General Objective 3
1.3.2 Specific Objectives 3
1.4 Research Questions 3
1.5 Significance of the Study 4
1.6 Scope of the Study 4
1.7 Limitations of the Study 4
CHAPTER TWO 5
2.1 Literature Review 5
Introduction 5
2.2 Theoretical Literature 5
2.2.1 An entrepreneur 5
2.2.2 The Concept of Entrepreneurship 6
2.2.3 Theories of Entrepreneurship 8
2.2.4 Alternative Theories of the Entrepreneur 14
2.2.5 Motivation Theories 18
2.2.6 The Role of motivation in entrepreneurship 18
2.2.7 Motivation Theories and Entrepreneurship 20
McGregor’s Theory 31
McClelland‘s Needs Theory 31
2.3 Empirical Literature Review 32
2.4 Attractive Factors of Becoming an Entrepreneur 35
2.4.1 Independence 35
2.4.2 Self –fulfillment 36
2.4.3 Entrepreneurial Attributes 36
2.4.4 Income 36
2.5 Repulsive factors for women to become entrepreneurs 37
2.5.1 Inadequate Family Income 37
2.5.2 Dissatisfaction towards Salaried Job 37
2.5.3 Difficulty in getting a Job 37
2.5.4 An alternative for Unemployment 38
2.5.5 The Possibility for Time Management 38
2.6 Entrepreneurship Development in Tanzania 39
2.7 The role of Women entrepreneurs in Tanzania 43
2.8 SME Policy framework in Tanzania 44
CHAPTER THREE 48
3.1 Research Methodology 48
3.1.1 Research Design 48
3.1.2 Study Area 49
3.1.3 Sample and sampling procedure 49
3.2 Research Tools 49
3.3 Data Collection Methods, Procedures and instruments 50
3.3.3 Data Processing and analysis 51
CHAPTER FOUR 52
4.0 Results and Discussion 52
CHAPTER FIVE 65
5.0 Conclusion & Policy Implications 65
5.1 Recommendations 66
5.2 Areas for further Research 67
6.0 REFERENCES 68
7.0 APPENDICES 74
Appendix 1 74
7.1 INTERVIEW QUESTIONS 74
7.2 Focus Group Discussion Guide 79
CHAPTER ONE
1.1 Introduction
Tanzanian women’s entrance into self employment and small business ownership in recent years has been dramatic. In a relatively short time, they have established themselves as a formidable presence. According to National Informal Sector Survey (1991) women accounted for about 35 per cent of informal enterprises. By 1995, it was estimated that the proportion of women in the sector could have risen to 70 per cent of the informal sector labour force. In a study by Economic and Social Research Foundation (ESRF, 2000), 55 per cent of the enterprises in the sample were owned by women (as reported in (Mlingi, 2000, p. 89). Swiss contact (2003) estimated that women owned 43 per cent of MSEs.
A survey conducted in 2002, by ILO discovered that 128 women entrepreneurs have created 983 jobs, of which 952 are full time paid jobs (an average of 5.9% per enterprise), thus demonstrating that women entrepreneurs can be a significant force on employment creation, both for family members and others.These data reflect the women’s active role in the economic development of a nation.
If one uses the proxy of 43 per cent (Swiss Contact, 2003) as the proportion owned by women, then there would be about 731,000 women entrepreneurs in Tanzania. This again reflects the significance of women entrepreneurs in Tanzanian economy. However, despite the important role of women entrepreneurs in creating job opportunities for millions of people, very few information about women entrepreneurship is available.
In other words, research on women entrepreneurship has been inadequate, more so with reference to developing countries like Tanzania. Little research in entrepreneurship has explored only the female population of entrepreneurs (Brush & Edelman, 2000).
Though global research of female entrepreneurship has taken place for the last 25 years and knowledge has expanded; “there are still many questions unanswered” (Greene et al, 2003 p.26). It is against this background that the researcher seeks to highlight the factors motivating Tanzanian women to become entrepreneurs.
This paper presents findings on the question of what factors motivate Tanzanian women to become entrepreneurs. The analysis draws on the survey on women entrepreneurs in the Mwenge carving market and Kariakoo clothing shops involving 83 participants.
In order to contextualize the analysis, the paper begins by outlining entrepreneurship in general, entrepreneurship development in Tanzania. It then mirrors the existing studies on the motivations of women entrepreneurs. The subsequent sections discuss the data and findings .The conclusion considers implications for public policy.
1.2 Research Problem
Tanzanian women like any other women in most of the African societies have been denied the benefit of education. They have no opportunities to develop their natural capacities and therefore become helpless, illiterate, narrow-minded and peevish. Economically women became completely dependent upon men. Since time immemorial, women have been discussed, and written about mainly as decorative objects. But when they have stepped out of this niche, by and large, response has been one of cynicism and derision.
However economic compulsions have let more and more young girls to take up employment. It is out of work experience, exposure to education and urbanization that the potential source of women entrepreneurs has emerged.
Women entrepreneurs in Tanzania have to cope with various socio-economic problems.
Society’s attitude and support are the major determinants of women’s entrepreneurial success. The social and cultural roles played by women may place an additional burden on them. As a part of their social binding, women have to perform household duties with simultaneously operating as business owners. A woman entrepreneur is expected to perform the roles of wife, mother, daughter, daughter-in-law and businesswoman.
Women become entrepreneurs due to several factors which may be grouped as pull factors and push factors. Pull factors refer to the urge in women to undertake ventures with an inclination to start a business. Women entering business, driven by financial need due to family circumstances are said to be influenced by push factors. The study therefore aims at understanding the entrepreneurial development among women, highlights their existing status, and the factors encouraging the women to become entrepreneurs.
Dar es Salaam is the commercial city of Tanzania and the target type of the entrepreneurs located in one area operate in Dar es Salaam compared with other regions. Dar es Salaam region has also been endowed with several facilities for the conducive growth of women entrepreneurs when compared to other regions in Tanzania. So, it is felt that Dar es Salaam is ideally suited for a study on women entrepreneurship; as most of the business that women are engaged in are in Dar es Salaam.
1.3 Research Objectives
1.3.1 General Objective
To widen the understanding of the motivation of women entrepreneurship in Tanzania
1.3.2 Specific Objectives
i. To examine the demographic profile of women entrepreneurs in Tanzania. ii. To analyze the factors motivating Tanzania women entrepreneurs, their goals and dreams in relation to entrepreneurship iii. Examine the attitudes of Tanzanian women concerning entrepreneurship and ways in which their attitudes have been affected during their time of experience within their enterprises.
1.4 Research Questions
i. What are the factors motivating Tanzanian women to become and work as entrepreneurs?
ii. What motivates Tanzanian women to continue working as entrepreneurs? iii. In what ways have the women’s attitudes towards entrepreneurship been affected during their time of experience within their enterprises? iv. What are the goals and dreams in relation to women entrepreneurship? v. What are the problems facing women entrepreneurs in Tanzania?
1.5 Significance of the Study
There are several reasons, which serve to justify the importance of this study: Women’s participation in business can greatly break the vicious cycle of low entrepreneurship-low resources-poverty. It should essentially be one of primary policy concern if women’s poverty and hence societal poverty is to be alleviated because entrepreneurship represents the force for continuous innovation and change which makes possible an ever improving way of life.
Early economic theories suggest some correlation between economic growth and business formations. Palmer (1971) also appears to support this relationship. The study will investigate the attitudes and viewpoints of women entrepreneurs and the study will also present a deeper insight into entrepreneurial values of women; to work and progress as entrepreneurs.
The observed results will provide suggestions for improvements to support women entrepreneurs in a better way.
1.6 Scope of the Study
The study centers on women entrepreneurs particularly in the Makonde carvings at Mwenge and clothing business at Kariakoo. It specifically tries to investigate the factors motivating Tanzanian women to become entrepreneurs. The study was conducted in Dar es Salaam, the reason being that it is the commercial centre of Tanzania, hence enabled the researcher to get enough samples to represent the population of women working as entrepreneurs in the two businesses. In addition, the issue of time constraints, costs and accessibility of data has carefully been considered.
1.7 Limitations of the Study
The study covers only women entrepreneurs in the carving and clothing shops at Mwenge and Kariakoo respectively both in Dar es Salaam. Hence the findings of the study are entirely applicable to these sectors only. The study is based on the perceptions of the women entrepreneurs. Their attitudes may change with the change of times. Therefore, the responses reflect their contemporary views on the prevailing conditions.
CHAPTER TWO
2.1 Literature Review
Introduction
This chapter reviews the related literature to the concepts, theories and previous research findings pertaining to the research problem with the aim of establishing the theoretical and empirical base of the study.
2.2 Theoretical Literature
2.2.1 An entrepreneur
In common parlance, being an entrepreneur is associated with starting a business, but this is a very loose application of a term that has a rich history and a much more significant meaning.
In French, it means someone who undertakes, not an undertaker in the sense of a funeral director, but someone who undertakes a significant project or activity.
More specifically, the entrepreneur is a person who has enterprising quality, takes initiative and establishes an economic activity or enterprise.
In the 19th century, Say put it this way, “The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield, and Entrepreneurs create value”. In the 20th century, the economist most closely associated with the term was Joseph Schumpeter. He described entrepreneurs as the innovators who drive the creative-destructive process of capitalism.
In his words, the function of entrepreneurs is to reform or revolutionize the pattern of production. They can do this in many ways: by exploiting an invention or, more generally, an untried technological possibility for producing a new commodity or producing an old one in a new way, by opening up a new source of supply of materials or a new outlet for products, by reorganizing an industry and so on.
According to Schumpeter (1934) entrepreneurs are the change agents in the economy.
By serving new markets or creating new ways of doing things, they move the economy forward. It is true that many of the entrepreneurs that Say and Schumpeter have in mind serve their function by starting new profit-seeking business ventures, but starting a business is not the essence of entrepreneurship. Though other economists may have used the term with various subtle distinction, the Say-Schumpeter tradition that identifies two entrepreneurs as the catalysts and innovators behind economic progress has served as the foundation for the contemporary use of this concept.
2.2.2 The Concept of Entrepreneurship
Entrepreneurship is the creation of an innovative economic organization for the purpose of gain or growth under conditions of risk and uncertainty.
Entrepreneurship employs what Schumpeter (1942) called "the gale of creative destruction" to replace in whole or in part inferior innovations across markets and industries, simultaneously creating new products including new business models. In this way, creative destruction is largely responsible for the dynamism of industries and long-run economic growth. The supposition that entrepreneurship leads to economic growth is an interpretation of the residual in endogenous growth theory and as such is hotly debated in academic economics. For Schumpeter, entrepreneurship resulted in new industries but also in new combinations of currently existing inputs. Schumpeter 's initial example of this was the combination of a steam engine and then current wagon making technologies to produce the horseless carriage. In this case the innovation, the car, was transformational but did not require the development of a new technology, merely the application of existing technologies in a novel manner. It did not immediately replace the horse drawn carriage, but in time, incremental improvements which reduced the cost and improved the technology led to the complete practical replacement of beast drawn vehicles in modern transportation.
Despite Schumpeter 's early 20th-century contributions, traditional microeconomic theory did not formally consider the entrepreneur in its theoretical frameworks (instead assuming that resources would find each other through a price system). In this treatment the entrepreneur was an implied but unspecified actor, but it is consistent with the concept of the entrepreneur being the agent of x-efficiency. Different scholars have described entrepreneurs as, among other things, baring risk. For Schumpeter, the entrepreneur did not bare risk: the capitalist did.For Knight (1921) entrepreneurship is about profits from bearing uncertainty and taking risk. The behavior of the entrepreneur reflects a kind of person willing to put his or her career and financial security on the line and take risks in the name of an idea, spending much time as well as capital on an uncertain venture.
Knight classified three types of uncertainty. i. Risk, which is measurable statistically (such as the probability of drawing a red colour ball from a jar containing 5 red balls and 5 white balls). ii. Ambiguity, which is hard to measure statistically (such as the probability of drawing a red ball from a jar containing 5 red balls but with an unknown number of white balls). iii. True Uncertainty or Knightian Uncertainty, which is impossible to estimate or predict statistically (such as the probability of drawing a red ball from a jar whose number of red balls is unknown as well as the number of other coloured balls).
The act of entrepreneurship is often associated with true uncertainty, particularly when it involves bringing something really novel to the world, whose market never exists. However, even if a market already exists, there is no guarantee that a market exists for a particular new player in the cola category.
The place of the disharmony-creating and idiosyncratic entrepreneur in traditional economic theory (which describes many efficiency-based ratios assuming uniform outputs) presents theoretic quandaries. William Baumol has added greatly to this area of economic theory and was recently honored for it at the 2006 annual meeting of the American Economic Association.
2.2.3 Theories of Entrepreneurship
Entrepreneurship is an evolved discipline, with the advancement of science and technology it has undergone metamorphosis change and emerged as a critical input for socio-economic development. Various writers have developed various theories on entrepreneurship and popularized the concept among the common people.
The theories propounded by them can be categorized as Sociological theories Economic theories, Cultural theories, and Psychological theories.
Sociological Theories: The following theories explain how sociological factors accelerate the growth of entrepreneurs: i. Theory of religious beliefs ii. Theory of social change 1. Theory of religious beliefs:
Max Weber (1864-1920) has propounded the theory of religious belief. According to him, entrepreneurism is a function of religious beliefs and impact of religion shapes the entrepreneurial culture. He emphasized that entrepreneurial energies are exogenous supplied by means of religious beliefs. The important elements of Weber’s theory are discussed further:- Spirit of Capitalism- We all know that capitalism is an economic system in which economic freedom and private enterprise are glorified, so also the entrepreneurial culture. Adventurous Spirit- Weber also made a distinction between spirit of capitalism and adventurous spirit. According to him, the former is influenced by the strict discipline whereas the latter is affected by free force of impulse. Entrepreneurship culture is influenced by both these factors. Protestant ethic- according to Max Weber the spirit of capitalism can be grown only when the mental attitude in the society is favourable to capitalism. Inducement of profit- Weber introduced the new businessman into the picture of tranquil routine. The spirit of capitalism intertwined with the motive of profit resulted in creation of greater number of business enterprises. In fact, this theory suited the British rulers, who desired to encourage European entrepreneurship in India. This theory was vehemently criticized by many researchers because of the unrealistic assumptions. 2. Theory of Social Change: Everett E. Hagen(1967), in his theory of social change propounded how a traditional society becomes one in which continuing technical progress takes place. The theory exhorts the following feature which presumes the entrepreneur’s creativity as the key element of social transformation and economic growth. Presentation of general model of the society, the theory reveals a general model of the society which considers interrelationship among physical environment, social structure, personality and culture. Economic Growth: product of social change and political change, according to Hagen, most of the economic theories of underdevelopment are inadequate. Rejection of followers’ syndrome, Hagen rejected the idea that the solution to economic development lies in imitating western technology. So the followers’ syndrome on the part of the entrepreneur is discouraged. Historic shift as a factor of initiating change, Hagen in his book, How Economic Growth Begins, depicts historic shift as the crucial force which has brought about social change technological progress thereby leading to the emergence of entrepreneurial class from different castes and communities. Withdrawal of status respects as the mechanism for rigorous entrepreneurial activity closely consistent with the historic shift it is the social group that plunges into rigorous entrepreneurism which experiences the status withdrawal or withdrawal of status respects. Hence, Hagen’s creative personality is the admixture of Schumpeter’s innovation and McClelland’s high need for achievement. But Hagen’s analysis fails to give policy measures for backward countries which are striving for economic development as he identifies status withdrawal as the causal factor in the emergence of creative personality. Hagen’s thesis of disadvantaged minority groups has its own limitations. There are many disadvantaged minority groups in India which have not supplied a good number of entrepreneurs.
2.2.3.3 Economic Theories: Entrepreneurship and economic development are interdependent. Economic development takes place when a country 's real national income increases over a period of time wherein the role of entrepreneurs is an integral part. Schumpeter’s theory of entrepreneurship is a pioneering work of economic development. Development in his sense implies that carrying out of new combination of entrepreneurship is basically a creative activity. According to Schumpeter an entrepreneur is one who perceives the opportunities to innovate, that is to carry out new combinations or enterprise. In his views, the concept of new combination leading to innovation covers the following 5 cases: The introduction of new goods, that is the one with which consumers are not yet familiar, of a new quality, the introduction of new method of production, the opening of new market, the conquest of new source of supply of raw material and the carrying out of new organization. In view of the above, Schumpeterian theory of entrepreneurship has got the following features; Schumpeter makes a distinction between innovation and invention. Invention means creation of new things and innovation means application of new things onto practical use. Schumpeter has given emphasis on the role of entrepreneurial functions in economic development. In his views; development means basic transformation of the economy that is brought about by entrepreneurial functions. A dynamic phenomenon and a break from the routine or a circular flow or tendency towards equilibrium entrepreneurialism dream and the will to found a private kingdom- the motives of creating things and applying these things into practice inspire the entrepreneur to undertake innovation.
Critical evaluation: Schumpeter’s theory of innovation is criticized on the following grounds:- i. The theory has the scope of entrepreneurism in the sense that it has included the individual businessman along with the directors and managers of the company. ii. Schumpeter’s innovating entrepreneurs represents the enterprise with the R & D and innovative character. But developing countries lack these characters. iii. The theory emphasizes on innovation and excludes the risk taking and organizing aspects. iv. Schumpeter’s entrepreneurs are large scale businessmen who introduce new technology, method of production. v. Schumpeter remained silent about as to why some economics had more entrepreneurial talent than others. However, despite the above criticism, Schumpeterian theory is regarded as one f the best theories in the history of entrepreneurial development.
2.2.3.4 Cultural Theories: Advocates of cultural theories point out that entrepreneurship is the product of culture. Entrepreneurial talents come from cultural values and cultural system embedded into the cultural environment.
Hoselitz’s Theory: Hoselitz explains that the supply of entrepreneurship is governed by cultural factors, and culturally minority groups are the spark-plugs of entrepreneurial and economic development in many countries, entrepreneurs have emerged from a particular socio-economic class. He emphasized the role of culturally marginally groups like Jews and the Greeks in medieval Europe, the Chinese in South Africa and Indian in east Africa in promoting economic development.
2.2.3.5 Psychological Theories: Psychological theories centre 's around the psychological characteristics of the individual in a society. Psychological characteristics affect the supply of entrepreneurs in the society. Peter F. Drucker opined that “an entrepreneur is one who always searches for change, responds to it and exploits it as an opportunity.” he laid emphasis on two important factors; innovation and resource- that led to emergence of entrepreneurship.
According to him, innovation is the real hub of entrepreneurship which creates resource. Something is regarded as resource when its economic value is recognized. For example, mineral oil was considered worthless until the discovery of its use. Similarly, purchasing power was considered an important resource by an American innovative entrepreneur who invented installment buying.
According to Drucker, successful entrepreneurship involves the following things- Value and satisfaction obtained from resource by the consumer are increase.
New values are created, material is converted into a resource or exiting resources are combined in a new or more productive configuration Entrepreneurship is the practice which has a knowledge base. Entrepreneurship is not confined to big businesses and economic institutions; it is equally important to small business and non-economic institutions.
Entrepreneurship behavior rather than personality trait is more important to enhance entrepreneurship the foundation of entrepreneurship lies in concept and theory rather than in intuition. Thus, Drucker has given his views that “an entrepreneur need not be a capitalist or an owner. A banker who mobilizes other’s money and allocates it in areas of higher yield is very much an entrepreneur though he is not the owner of the money. In the early 1800s, economists Jean Baptiste Say and John Stuart Mill further popularized the academic usage of the word “entrepreneur.”
Say stressed the role of the entrepreneur in creating value by moving resources out of less productive areas and into more productive ones. Mill used the term “entrepreneur” in his popular 1848 book, Principles of Political Economy, to refer to a person who assumes both the risk and management of a business.
In this manner, Mill provided a clearer distinction than Cantillon between an entrepreneur and other business owners (such as shareholders of a corporation) who assume financial risk, but do not actively participate in the day-to-day operations or management of the firm.
Building on Cantillon and Mill, Frank Knight (1921) emphasized that entrepreneurs deal with uncertainty about the future, not with risk. Probabilities can be estimated for risky activities and thus are insurable. Entrepreneurs, however, are dealing with uncertainty about the profitability of their new combinations of resources. Since entrepreneurs cannot insure against the probability that new goods and services will not be liked, entrepreneurs bear the burden of the uncertainty associated with the market process.
While Knight makes some important points with respect to the bearing of uncertainty, his work has been overshadowed by the research of two other economists, Joseph Schumpeter and Israel Kirzner who greatly advanced our understanding of the role of the entrepreneur.
The introduction of the compact disc, and the corresponding disappearance of the vinyl record, is just one of many examples of this process. Cars, electricity, aircraft, and personal computers are others. Schumpeter viewed this disequilibration as a beneficial byproduct of innovation. Kirzner’s (1973) view of entrepreneurship stands in stark contrast to Schumpeter’s. Instead of focusing on the disequilibrating role of innovation, Kirzner views entrepreneurship as an equilibrating force in which entrepreneurs discover previously unnoticed profit opportunities and act on them. Thus Kirzner’s entrepreneur initiates changes that move markets towards equilibrium.
An example of such an entrepreneur would be someone in a college town who discovers that a profit opportunity has arisen in renovating houses and turning them into rental apartments because of a recent increase in college enrollment. Entrepreneurship encompasses all of these functions. Entrepreneurs take on risk, they innovate, but they also engage in ordinary activities such as arbitraging between areas of high and low demand. The thing that all entrepreneurs have in common is the desire to discover and exploit profit opportunities.
2.2.4 Alternative Theories of the Entrepreneur
Traditionally, the label theory of the entrepreneur has been used within the economics literature to denote the study of the relationship between entrepreneurship and economic activity. These theories frequently attribute the movement of the economy to a catalystic function fulfilled by the entrepreneur.Accordingly, the entrepreneur is conceptualized in terms of what he or she does, that is, innovates, and coordinates. This behavior is then thought to influence the system by moving it toward, or away from, some ideal state, such as equilibrium or efficiency.
Two assumptions are characteristic of most theories of the entrepreneur: i. Entrepreneurship is a “good” thing, with beneficial outcomes that accrue to the system in which it occurs. ii. Entrepreneurship is observable as a behaviour that can be attributed to some definitive theoretical attribute capable of differentiating entrepreneur (actor) from non-entrepreneur (non-actor).
The first assumption is important for understanding why scholars have devoted so much energy to the subject and why the study of entrepreneurial behaviour at the individual level is of value to organizational studies. The second assumption, however, is highly significant to our argument in that it helps to expose the manner in which uncertainty is conceptualized within these theories. It is suggested that many theoretical explanations of why prospective entrepreneurs choose to pursue a possible opportunity can be classified into two simple conceptualizations of the role that uncertainty plays in preventing action:
I. Entrepreneurial Action As the Outcome of Less Perceived Uncertainty:
While neoclassical economists were abolishing the need to consider individual differences by constructing theories with assumptions such as perfect information, “Austrian” economists were building their economic theories on such premises as the subjectivity of value (Menger,1950), imperfect knowledge (Hayek, 1945), asymmetric beliefs (Mises, 1949), and differences in entrepreneurial alertness (Kirzner, 1973, 1985). Austrian economists have typically considered an entrepreneur to be the engine of the economy (Kirzner, 1989; Mises, 1949; Pasour, 1989) and have attributed the stagnation of the economy to a lack of entrepreneurial action. This lack of entrepreneurial action, they believe, is often the consequence of unperceived opportunities (Kirzner, 1979), which arise from the various explanations mentioned above.Although Austrians are labeled subjectivists, this subjectivism traditionally has referred to the epistemological limitations suffered, to a greater or lesser extent, by the subjects of their theories. Thus, people who have acted entrepreneurially are seen to possess a more accurate picture of reality than those individuals who have not acted.
Moreover, an objective reality is thought to exist in which a market opportunity is there for the taking, but only for those who possess the qualities necessary both to discover and exploit it. Thus, entrepreneurial action is seen as something all would engage in if they knew what to do, but, owing to epistemological differences, only some people (the entrepreneurs) “know” what to do. Accordingly, entrepreneurs are thought to have taken action because they somehow escaped the ignorance and paralysis produced by uncertainty, whereas those who have not acted entrepreneurially are believed either to have fallen victim to doubt or to have been blinded to the need for forming a belief at all. II. Entrepreneurial Action as the Outcome of More Willingness to Bear Uncertainty
The theory of the entrepreneur is not the exclusive domain of the Austrian economist. Prominent non-Austrians, from Knight (1921) to Schumpeter (1934), also have recognized the role that uncertainty plays in preventing entrepreneurial action. However, these economic theorists conceptualize uncertainty’s action prohibitive role in a slightly different way.
They see entrepreneurial action not as the outcome of less perceived uncertainty but as more willingness to bear the uncertainty faced by all prospective actors.
For instance, Knight addresses uncertainty explicitly. He posits that profit is the reward for those willing to bear uncertainty because, unlike risk, uncertainty is inestimable and therefore uninsurable. Thus, entrepreneurs are distinguishable from non-entrepreneurs in their willingness to bear the uncertainty intrinsic to a possibly profitable course of action.
In contrast, the willingness to bear uncertainty is implicit in Schumpeter’s theory, where he argues that the entrepreneur’s function lies in the innovative act of creating new combinations. Believing that the potential for new combinations is abundant and at times obvious, Schumpeter delineates entrepreneurs from non-entrepreneurs not by differences in knowledge or perception but by the performance of the innovative act itself (1934: 88).
This elimination of perceptual differences forces Schumpeter to speculate reluctantly about motivational differences in an attempt to explain why some individuals and not others engage in entrepreneurial action (1934: 90). Schumpeter’s (1934) behavioral bent attracted psychologists, such as McClelland (1961), Hagen (1962), and Kunkel (1965), who exchanged the economic theorists’ descriptive orientation for a more prescriptive theoretical viewpoint.
Whereas economic theories of the entrepreneur focused on explaining what must occur (For example uncertainty bearing) for the economy to function, psychological theories sought to explain why entrepreneurs are more willing than their counterparts to bear this uncertainty.
Because these psychologists shared the economists’ belief that entrepreneurship produced economic growth, they tried to identify the motives underlying entrepreneurial activity in an effort to develop these motives in their subjects.
Unfortunately, this was thought to produce explanations that relied too heavily on unchangeable needs and values developed in childhood.
It should be noted that, unlike critics, these theorists did not see these motives as unchangeable elements of personality. For instance, much of McClelland’s empirical work was devoted to establishing that the need for achievement could be learned. In contrast, if an individual chooses a lax criterion he or she will pursue almost every possibility that comes along. Such a location of the criterion is representative of the profile of the Schumpeterian entrepreneur who is frequently conceptualized as an innovator, leader, and/or adventurer. It is also reflective of the Knightian entrepreneur who is explicitly conceptualized as a “bearer of uncertainty.” Psychologists like McClelland sought to explain the “laxity” of the criterion (such as the need for achievement) and promote it in an effort to encourage entrepreneurial activity. If the individual chooses a strict criterion, he or she will choose to pursue very few possibilities.
Given the uncertainty surrounding the decision, individuals are forced to expose themselves to the possibility of either committing an error of commission (taking action only to find their belief was unfounded) or committing an error of omission (not taking action only to regret it when time proves that their passed-over hunch was correct). Although only time proves prophecy, consideration of the possible payoffs associated with these various decisional outcomes shapes prospective actors’ decisions as they contemplate whether to commit to a particular course of action.
A simple amalgamation of the above arguments suggests that uncertainty prevents action by obfuscating i. The need or possibility for action, ii. The knowledge of what to do, and iii. Whether the potential reward of action is worth the potential cost.
2.2.5 Motivation Theories
Motivation
Motivation is defined as the process that initiates, guides and maintains goal-oriented behaviors. Motivation is what causes us to act, whether it is getting a glass of water to reduce thirst or reading a book to gain knowledge.It involves the biological, emotional, social and cognitive forces that activate behavior. In everyday usage, the term motivation is frequently used to describe why a person does something.
2.2.6 The Role of motivation in entrepreneurship
Motivation is central to the way an entrepreneur behaves in a business environment. Motivation is dependent upon the potencies of needs. Maslow identified a hierarchy of needs, which govern the pattern of motivation. These needs are physiological, safety, social, esteem and self-actualization. Porter and Lawler (1968) proposed need-expectancy theory for explaining the effort needed to fulfill an unfulfilled need. Motivational Model [pic] Adopted from: transtutors.com
A modified motivation model for entrepreneurship is shown above. The strength of an unfilled need of an entrepreneur and expectations of beneficial-outcomes motivate an entrepreneur for efforts in venture.
Combined with these, the individual capabilities of the entrepreneur govern his performance. The opportunities in business environment and risk due to future uncertainty affect the rewards, which are both intrinsic and extrinsic.
Intrinsic rewards are related to factors internal to the entrepreneur, such as self-satisfaction and pride. Extrinsic rewards are more towards material, wealth and growth.
Entrepreneurship depends on the decisions that people make about how to undertake that process. The argument is that the attributes of people making decisions about the entrepreneurial process influence the decisions that they make. Although previous researchers have rightly criticized much of the existing empirical research on the role of human motivation in entrepreneurship (Aldrich & Zimmer, 1986; Carroll & Mosakowski, 1987), the researcher is of the view that inadequate empirical work does not negate the importance of understanding the role of human motivation and women in particular in the entrepreneurial process.In fact, even sociologists who have argued strongly against the usefulness of trait-based research in entrepreneurship implicitly acknowledge that motivation must matter to this process. Aldrich and Zimmer (1986, p. 3), for example, wrote, entrepreneurial activity ‘‘can be conceptualized as a function of opportunity structures and motivated entrepreneurs with access to resources’’. Several human motivations that influence the entrepreneurial process have been identified in this study. Environmental factors being held constant; one can assume that, all human action is the result of both motivational and cognitive factors; the latter including ability, intelligence, and skills (Locke, 2000a).
Cromie (1987) found that in their motives whether or not to become an entrepreneur, women are less concerned with making money and often choose entrepreneurship as a result of career dissatisfaction. They also see entrepreneurship as a means of simultaneously satisfying their own career needs and those of their children and family. In addition the desire for greater flexibility, seeking challenges and escaping from organizational bureaucracy are also among the motivational factors that lead women to start up their own businesses (Lee & Rogoff, 1997). Innovativeness, risk taking propensity and perseverance are found to have significant influence on women entrepreneurs (Nelson and Cengiz, 2005). According to studies done by Schwartz (1976), Scott (1986) and Hisrich (1986), major motivations for women to start a business were the need to achieve, the desire to control and be independent, the need for job satisfaction and economic necessity.
Entrepreneurial activity arises from different circumstances and motives that drive the decision to start a business. The decision to become self-employed may stem from the push effect of (the threat of) unemployment, but also from pull effects induced by a thriving economy producing entrepreneurial opportunities.Opportunity-based entrepreneurship involves those who choose to start their own business by taking advantage of an entrepreneurial opportunity. Necessity-based entrepreneurship involves people who start a business because other employment options are either absent or unsatisfactory (Bhola et al., 2006). Generally, the opportunity entrepreneurs are more prevalent in high-income countries, while necessity entrepreneurs are more common in the low-income countries (Reynolds et al., 2002).
2.2.7 Motivation Theories and Entrepreneurship
Previous research has explored several motivations and their effects on entrepreneurship. Therefore, we discuss previous empirical research to illustrate the ways in which motivation can influence different aspects of the entrepreneurial process.
Need for achievement
Within the research domain of personality traits and entrepreneurship, the concept of need for achievement (nAch) has received much attention. McClelland (1961) argued that individuals who are high in nAch are more likely than those who are low in nAch to engage in activities or tasks that have a high degree of individual responsibility for outcomes, require individual skill and effort, have a moderate degree of risk, and include clear feedback on performance.
Further, McClelland argued that entrepreneurial roles are characterized as having a greater degree of these tasks attributes than other careers; thus, it is likely that people high in nAch will be more likely to pursue entrepreneurial jobs than other types of roles.
Johnson (1990) conducted a traditional review of 23 studies, which varied regarding samples, measurement of nAch, and definitions of entrepreneurship.
Based on this group of studies, Johnson concluded that there is a relationship between nAch and entrepreneurial activity in this case, nAch distinguished firm founders from other members of society.
In a similar review of 19 studies, Fineman (1977) concluded that both projective and questionnaire measures of nAch significantly predict firm founding. Collins, Locke, and Hanges (2000) conducted the first and only meta-analysis of nAch and entrepreneurship studies, examining 63 nAch and entrepreneurship studies.
The overall finding of the meta-analysis is that nAch is significantly related to founding a company.
The nAch both differentiated between entrepreneurs and others (mean r =.21) and predicted the performance of the founders’ firms (mean r =.28).
Moreover, Collins et al. (2000) found that the relationship between nAch and entrepreneurial activity was moderated by several factors.
First, nAch was a more robust predictor of group-level effects (e.g., mean differences between firm founders and another profession, mean differences between high-performing and low-performing founders) than individual level effects (e.g., predicting the performance of individuals). Second, they found that while nAch is a strong differentiator between firm founders and non managerial employees (mean r =.39), it is not a strong differentiator between firm founders and managers (mean r =.14).
Based on these results, Collins et al. (2000) concluded that nAch is an effective tool for differentiating between firm founders and the general population but less so for differentiating between firm founders and managers.
Further, they concluded that nAch might be particularly effective at differentiating between successful and unsuccessful groups of firm founders.Thus, nAch could play a very useful role in explaining entrepreneurial activity.
Risk taking
Risk-taking propensity is another motivation of interest, which emerged from McClelland’s (1961) original research on entrepreneurs. McClelland claimed that individuals with high achievement needs would have moderate propensities to take risk. This claim by McClelland is especially interesting for entrepreneurship research because the entrepreneurial process involves acting in the face of uncertainty. Liles (1974) argued that entrepreneurs often must accept uncertainty with respect to financial well-being, psychic well-being, career security, and family relations. Moreover, several theories of entrepreneurship view the entrepreneur as bearing residual uncertainty (Venkataraman, 1997).
Atkinson (1957) argues that individuals who have higher achievement motivation should prefer activities of intermediate risk because these types of activities will provide a challenge, yet appear to be attainable. On the other hand, individuals who score high on the motive to avoid failure will avoid intermediate risks.
Instead, they will prefer easy and safe under- takings (because there is a high chance of success) or extremely difficult and risky ones (because it will be easy to explain failure without accepting personal blame). Following the lead of Atkinson, risk-taking propensity has been defined in the entrepreneurship literature as the willingness to take moderate risks (Begley, 1995).
Despite these theoretical claims, previous research suggests that firm owners do not differ significantly from managers or even the general population in risk taking (Low & Macmillan, 1988). For example, Litzinger (1961) failed to find any difference between motel owners and motel managers on risk preference. Kogan and Wallach (1964) found that firm founders clustered around the mean risk-taking score of the general population. In comparisons of firm founders and managers, neither Babb and Babb (1992) nor Palich and Bagby (1995) found significant differences between the two groups in terms of risk-taking propensity. However, none of the above studies identified if firm founders were low, moderate, or high risk-takers.
Brockhaus (1980) tested for the actual level of risk taking, and he found that firm founders did prefer moderate risk but did not differ from managers in this regard. Only one study found a difference between firm founders and managers in this motivation.
In a study of 239 New England business executives, Begley (1995) found that risk-taking propensity was the only trait on which founders and non founders differed.As with the studies described above, Begley failed to identify whether the level of entrepreneurial risk taking was low, moderate, or high.
While these empirical findings suggest that risk taking may or may not be an entrepreneurial motivation, self-efficacy may be confounding the findings. Several recent evaluative studies using interviews and expert evaluations (e.g., Corman, Perles, & Vancini, 1998; Fry,1993) showed that firm founders objectively have a higher propensity for risk than do members of the general population, but that firm founders do not perceive their actions as risky.
Similarly, Sarasvathy, Simon, and Lave (1998) found that when expert firm founders were asked to evaluate the same entrepreneurial simulations as bankers, the firm founders saw opportunities in information that the bankers thought indicated risk. Thus, the measurement of risk-taking propensity may be confounded with high self-efficacy.
Locus of control
Another motivational trait that has received attention is locus of control—the belief in the extent to which individuals believe that their actions or personal characteristics affect outcomes.
Individuals who have an external locus of control believe that the outcome of an extent is out of their control, whereas individuals with an internal locus of control believe that their personal actions directly affect the outcome of an event (Rotter, 1966).
As McClelland (1961) discussed earlier, individuals who are high in nAch prefer situations in which they feel that they have direct control over outcomes or in which they feel that they can directly see how their effort affects outcomes of a given event. This point was extended by Rotter (1966) who argued that individuals with an internal locus of control would be likely to seek entrepreneurial roles because they desire positions in which their actions have a direct impact on results.
The research on locus of control suggests that firm founders differ from the general population in terms of locus of control. Shapero (1977) found that firm founders from Texas and Italy were more ‘‘internal’’ than other groups of professions reported by Rotter (1966).
This same pattern holds with female firm founders versus the general female population (Bowen & Hisrich, 1986) and with Black firm founders versus the general Black population (Durand, 1975).
While locus of control orientation differs between firm founders and the general public, most studies have not found a difference between firm founders and managers on locus of control, a result similar to the situation with studies on nAch. For example, Babb and Babb (1992) found no differences in locus of control between founders and managers in small businesses in Northern Florida.Similarly, Brockhaus (1982) found that managers and owners of new businesses did not differ on locus of control.In a longitudinal study of students, Hull, Bosley, and Udell (1980) found that locus of control did not differentiate between students who went on to work in managerial positions and those who started their own business.
Finally, in the studies of New England entrepreneurs, Begley (1995) and Begley and Boyd (1987) found that locus of control did not distinguish between founders and managers.
We suspect that one reason for the difference between firm founder and the general population, but not between founders and managers is the similarity between founding a company and managing. Defining entrepreneurial situations as starting a company rather than working for others might not capture the real differences between entrepreneurial and non entrepreneurial situations. For example, serving as a manager in a rapidly growing high-technology company might demand greater entrepreneurial motivations than starting a corner grocery store.
Self-efficacy
Self-efficacy is the belief in one’s ability to muster and implement the necessary personal resources, skills, and competencies to attain a certain level of achievement on a given task (Bandura, 1997). In other words, self-efficacy can be seen as task-specific self-confidence. Self-efficacy for a specific task has been shown to be a robust predictor of an individual’s performance in that task and helps to explain why people of equal ability can perform differently.
An individual with high self-efficacy for a given task will exert more effort for a greater length of time, persist through setbacks, set and accept higher goals, and develop better plans and strategies for the task. A person with high self-efficacy will also take negative feedback in a more positive manner and use that feedback to improve their performance.
These attributes of self-efficacy may be important to the entrepreneurial process because these situations are often ambiguous ones in which effort, persistence and planning are important.One study directly assessed the effect of self-efficacy on some dimension of the entrepreneurial process.
Baum (1994) assessed firm founders in the architectural woodworking industry on a number of variables including general traits and motives (such as tenacity and positive affectivity), specific skills and competencies (such as industry experience and technical skills), situation-specific motivation (such as goal setting and self-efficacy), vision, and strategic action (such as, quality and service emphasis).
In a LISREL model, Baum found that self-efficacy (measured as the self-efficacy to grow the company) had a strong positive relationship with realized growth.
In fact, it was the single best predictor in the entire array of variables.
Goal setting
Tracy, Locke, and Renard (1998) conducted a study of the owners of small printing firms.
Both concurrent and longitudinal measures of four aspects of performance were obtained: financial, performance, growth, and innovation. The quantitative goals the entrepreneurs had for each outcome were significantly related to their corresponding outcomes, both concurrently and longitudinally (nAch in this study was unrelated to performance).
Motivation and entrepreneurship: important motivational concepts from prior qualitative research
The section below is based largely on qualitative observations, including an inductive study based on secondary sources of 70 wealth creators by Locke (2000b).
Independence
Independence entails taking the responsibility to use one’s own judgment as opposed to blindly following the assertions of others. It also involves taking responsibility for one’s own life rather than living off the efforts of others.
Many investigators have observed that the entrepreneurial role necessitates independence.
First, the entrepreneur takes responsibility for pursuing an opportunity that did not exist before.Second, entrepreneurs are, in the end, responsible for results, whether achieved or not achieved.
Further, individuals may pursue entrepreneurial careers because they desire independence. For example, in interviews with U.S. female firm founders, Hisrich (1985) found that one of the prime motivations for starting a business was a desire for independence.
In addition, there is some existing empirical evidence which suggests that entrepreneurs may be higher in independence than other individuals.
Hornaday and Aboud (1973) surveyed 60 founders with several personality inventories and showed that these founders were significantly higher than the general population on measures of independence. Similarly, in a study with 63 founders, Aldridge (1997) found that firm founders scored significantly higher than the general population on personality measures of independence.
Drive
There is some relation between the term drive and that of nAch, but the term drive is somewhat used more broadly.
It is used basically to refer to the willingness to put forth effort; both the effort of thinking and the effort involved in bringing one’s ideas into reality. When entrepreneurs pursue opportunity, they must take action to make it real.
Drive can be differentiated in the following four aspects: ambition, goals, energy and stamina, and persistence.
Ambition influences the degree to which entrepreneurs seek to create something great, important, and significant when they pursue opportunities. The nature of the entrepreneurial ambition may include making money or the desire to create something new, from conception to actuality.Ambition translates into setting high goals for oneself and others. It is well known that high goals lead to better performance results than moderate or low goals (Locke & Latham, 1990). To achieve high goals requires enormous energy and stamina. When goal-directed energy is sustained over time, it is called persistence or tenacity. Pursuing an opportunity is never easy; failure at some point or in some respect is an inevitable part of the process.What sustains such effort over long periods? One factor is high self-efficacy or task specific confidence. The second factor is, strangely enough, love.
Egoistic passion
More precisely, it is a passionate, selfish love of the work. Some commentators like to pretend that businessmen’s core motive is to selflessly serve their employees and society. In contrast, the ego is a central motive.
The true or rational egoist passionately loves the work; they love the process of building an organization and making it profitable. They are motivated to do what is actually in their own interest, that is, to do everything necessary.Surprisingly, there have been virtually no quantitative studies of the role of passion in entrepreneurship. One exception is the study by Baum et al. (2001). Although not shown in that report, when Baum entered passion for the work as a separate variable along with 29 other variables from five domains (personality, situational motivation, skills, strategy, and environment), passion had a direct significant effect on firm growth.
The incentive theory of motivation
A reward, tangible or intangible, is presented after the occurrence of an action with the intent to cause the behavior to occur again. This is done by associating positive meaning to the behavior. Previous studies show that if the person receives the reward immediately, the effect would be greater, and decreases as duration lengthens. Repetitive action-reward combination can cause the action to become habit. Motivation comes from two sources: oneself, and other people. These two sources are called intrinsic motivation and extrinsic motivation, respectively.
Applying proper motivational techniques can be much harder than it seems. Steven Kerr notes that when creating a reward system, it can be easy to reward A, while hoping for B, and in the process, reap harmful effects that can jeopardize your goals.
Cognitive dissonance theory: Suggested by Leon Festinger, this occurs when an individual experiences some degree of discomfort resulting from an incompatibility between two cognitions. For example, a consumer may seek to reassure himself regarding a purchase, feeling, in retrospect, that another decision may have been preferable. Another example of cognitive dissonance is when a belief and a behavior are in conflict. A person may wish to be healthy, believes smoking is bad for one 's health, and yet continues to smoke.
Abraham Maslow 's theory is one of the most widely discussed theories of motivation.
In summary Maslow’s theory advocates that, human beings have wants and desires which influence their behavior. Only unsatisfied needs influence behavior, satisfied needs do not.
Since needs are many, they are arranged in order of importance, from the basic to the complex. The person advances to the next level of needs only after the lower level need is at least minimally satisfied. The further the progress up the hierarchy, the more individuality, humanness and psychological health a person will show.
Maslow’s Hierarchy of Needs Triangle
[pic]
Source: www.abraham-maslow.com/m_motivation/Hierarchy
The needs, listed from basic (lowest-earliest) to most complex (highest-latest) are Physiology: hunger, thirst, sleep.
Safety: Security, Shelter and Health
Social: Belongingness, Love and Friendship
Self-esteem, Recognition, and Achievement
Self actualization
Herzberg’s two-factor theory
Frederick Herzberg 's two-factor theory, also known as intrinsic/extrinsic motivation, concludes that certain factors in the workplace result in job satisfaction, but if absent, they don’t lead to dissatisfaction but no satisfaction.
He distinguished between:
Motivators; for example, challenging work, recognition, responsibility which give positive satisfaction, and Hygiene factors; such as, status, job security, salary and fringe benefits that do not motivate if present, but, if absent, result in demotivation. Two factor theory illuminates two dimensions for work, which are work itself and work’s external circumstances. An entrepreneur may be satisfied by the job and be dissatisfied with external circumstances i.e. hierarchical constructions.On the other hand a person might be happy with the environment and the ambience of the work place but job motivation and results may be discouraging (Peltonen 1985, 34).
Motivational factors that create satisfaction may be achievements, rewards, responsibility, progress and mental growth. Factors that cause dissatisfaction on the other hand are lack of control and guidance, status and safety. Based on this, it can be said that challenging, variable and interesting job effectively motivates the worker. (Kuusinen 1995, 69).
McGregor’s Theory
A theory of McGregor’s divides people in to two groups. McGregor’s x and Y theories are based on human concepts, in which people are originally highly lazy, or then they have a natural desire towards working and trying. Thus a person is willing to work only because he/she is forced or he lacks something, or on the other side his perceptions of working and motives derive from own positive desires to work and perform.
Peltonen et al (1987, 102) acknowledge that motives, expressive motives and mental growth motives. Entrepreneurs particularly, seem to have expressive motives (independence, individuality, job satisfaction) as dominant ones. In addition, mental growth motives, which are desires to improve one’s own ideas, innovation, creativity, are also attached to entrepreneurship.
McClelland‘s Needs Theory
Human needs are attached towards life’s concrete plans, such as work, education, and family. Plans and goals reflect values and when the results from certain actions or processes change the goals, the change pressures also target the values. Achievement motivation theory also emphasizes value complex which seems to have a direct contact on successful entrepreneurship.
According to McClelland, a high desire for high performance is a common characteristic of entrepreneurs. Its features include the desire for self-fulfillment, success and the will to take responsibility of one’s own actions. Risks are calculated and there is a need to have a straight and concrete response from any sorts of results.
2.3 Empirical Literature Review
Several indicators show that the number of women entrepreneurs is increasing due to the fact that the service(saloons, catering )and trade fields like boutiques(clothing shops, florist, carving, tie& dye and batik) are now women dominated areas. Small businesses are important to any country’s economy from a real development’s point of view.
In Tanzania however, it is not possible to measure the women entrepreneurship on statistical basis. Currently; there is no comprehensive data on the number of women in the Micro-Small-Medium Enterprises (MSME) sector, the size of their enterprises, or their distribution by sector. Most reports on the sector rely on data from the 1991 National Informal Sector Survey (NISS), which is outdated.
A survey conducted in 2002, by ILO discovered that 128 women entrepreneurs have created 983 jobs, of which 952 are full time paid jobs ( an average of 5.9% per enterprise), thus demonstrating that women entrepreneurs can be a significant force on employment creation, both for family members and others.
Research by ILO (2003) revealed that most of the women entrepreneurs are engaged in business as a way of creating employment for themselves. Other motives include supplementing income, security, enjoyment of the work they are doing, use of existing competencies, and doing business as a hobby. Others started with informal activities at home either as hobbies or means of meeting household needs, and later develop these into serious business activities.
Early socialization and role models play a big part in motivating women to start business. Factors helpful in starting and developing businesses include skills and competencies acquired prior to starting the business, non-financial and non-financial support from family and friends, and availability of capital, equipment and working tools.
Schwartz (1976) revealed on the study of twenty female entrepreneurs that their major motivations to start a business were the need to achieve, the desire to be independent, the need for job satisfaction and economic necessity.
Scott(1986) found that, apart from the, desire to control, need for achievement, to improve the financial situation, desire to be independent and the need for job satisfaction are also some notable motivating factors.
Lee and Rogoff (1997) pointed out desire for greater life flexibility, seeking challenges, fulfilling a long-felt desire or escaping from organizational glass ceiling as also among the motivation factors that lead women to start-up their own businesses.
In a study comparing the motivational factors among males and females, Hisrich (1986) found that disagreements with bosses, the drive to control own destiny were motivating factors for male entrepreneurs.
The reasons for women however were different, they were found to suffer job frustrations when they were not allowed to perform at the level they were capable of in their work. Hence, women were driven to entrepreneurship because of the independence and sense of achievement which entrepreneurship offers.
Sexton (1980) found that goals in business ownership were same in the need for achievement and independence but differ in terms of economic necessity and recognition than their male counterparts.
Further, women also rated better on dealing with people. Briley, Gross and Saunders (1986) commented that other studies on motivation have indicated that women may have similar motivations but need greater stimulations than their male counterparts
Nelson and Cengiz (2005) pointed that innovativeness, risk taking propensity, flexibility and perseverance are found to have significant influence on women entrepreneurs.
Bender (2000) concluded that, today the promise of flexibility or just being able to do things on their own way has become the ultimate motivation of women entrepreneurs.
The research findings in Finland (1998) show that, the importance of women entrepreneurs has increased during the last century as well as their significance. This is the situation for entrepreneurs within considerably small companies.
The total employment share of small businesses nowadays is nearly 60% compared to less than 50% 10 years ago. Small size companies provide jobs for nearly 780,000 people which is about 40% of all jobs in Finland.
The various working fields seem to indicate that the amount of women entrepreneurs has been increasing. Small companies tend to have an important factor in a development point of view.Research outcomes regarding women entrepreneurship reveal that the women’s motives arise mainly from personal growth. Other researches indicate that the scientists have accomplished a more or less shared understanding that the motives relating to entrepreneurial behavior of men and women differs from one another.
As for the reasons or motivations for women to become entrepreneurs, Scott (1986) found that they: wanted to be their own boss, wanted the challenge, or wanted to make more money.
Schwartz (1979) studied 20 female entrepreneurs and found that their major motivations for starting a business were: the need to achieve, a desire to be independent, the need for job satisfaction, or it was an economic necessity.
According to Chaganti (1986), some reasons for women setting-up businesses were job frustration, service needs, having an attractive business idea, a desire to be their own boss, a desire to make it on their own and build something of their own, and monetary success.
In another study, Hisrich and Brush (1986) found that achievement, opportunity and job satisfaction were the motivating factors most often cited by women entrepreneurs, while power and status were ranked and rated as the least motivating factor. Although the reasons for starting a business may be a driving force in motivating women to engage in business, women entrepreneurs will most certainly face challenges and problems in their working as entrepreneurs, at various stages of their business undertaking.
2.4 Attractive Factors of Becoming an Entrepreneur
2.4.1 Independence
Independence describes the woman’s ability to be her own leader, freedom to plan and use her own time, take responsibility and control her own life. According to Cromie (1996, 255) researches indicate independence as one of the main motives for women entrepreneurship. Researchers agree with the fact that there are no divisions for this motivational feature in sexes or cultures. Control of one’s own life reflects one’s own belief of choosing his /her way of life and control his/her own actions.
According to Duchénaut (1997.46) there are those who feel they control their lives internally, believe that life in general is controlled by their own actions, functions and abilities.
Another group of individuals are those who believe in faith, luck and chance and thus they feel they are controlled by some external force or more powerful person.
Independence is also attached to values; individual’s values affect attitudes and the world view in general and through this to behavior.
For Duchénaut (1997.46) and Muir (1999), the need for independence according to several motivation researches, is the most important reason for establishing own business.
Traditionally women were highly dependent on men, this led the women to be considered as just wives and mothers, and therefore had no chance to participate in decision making in their homes and the society in general. Independence is therefore the main motive for women to become entrepreneurs, so as to reduce dependency on their husband’s income.
A majority of women interviewed were married, and they indicated that, it is unwise to rely totally on their spouses’ income, because anything can happen to spouse leading the family to serious consequences. And supplementing family income has been ranked the third factor motivating Tanzanian women to become entrepreneurs.
2.4.2 Self –fulfillment
This derives from the assumption that, by becoming an entrepreneur, a woman can change her position in the society; the need to attain a particular goal has been noticed to be important factor among the successful male and female entrepreneurs. As McClelland’s theory assumed, the need to achieve or reach a desired point is a psychological factor. According to McClelland, a high desire for achievement is a typical characteristic of entrepreneurs. They are willing to succeed and take personal responsibility. According to Cromie (1986, 259) and Duchénaut (1997.46),this is also linked with the issue of high self confidence and optimism, for example self-homing mothers seem to perform better in business and they have also been noticed as coping better with stress and being more satisfied in their jobs.
2.4.3 Entrepreneurial Attributes
Many entrepreneurship theories mention entrepreneurial attributes as being leadership, positive self confidence, ability and willingness to take risks. Most researchers agree that these features are true for both women and men entrepreneurs. When an individual possesses leadership abilities he/she can encourage and ensure the others. An entrepreneur is having a positive self confidence and has the ability to study the situation and see opportunities and choices. Mostly entrepreneurs rely on their own abilities and cope with situation when they have a personal responsibility of the expected outcome. To be successful entrepreneurs need their self confidence and optimism; risk taking is also essential feature of an entrepreneur. Duchénaut (1997.47) and (Carland & Carland (1994, 69) believed that risk taking is encouraged because there are always sorts of risks related to entrepreneurial behavior.
2.4.4 Income
There are mainly two reasons for a woman to increase her income by becoming an entrepreneur; the first reason is to add and secure the family income in addition to that of a husband, this motivator can be repulsive action if the enterprise is the only source of finance for the household issues. The second reason is the woman’s desire for financial independence.
Duchénaut (1997.47) and Mallete&McGuinness (1999) pointed out that, nowadays the younger generation of women wants to indicate its independence and individuality by taking care of their financial matters by themselves.
2.5 Repulsive factors for women to become entrepreneurs
2.5.1 Inadequate Family Income
According to Duchénaut (1997.48), one key element or a pushing factor towards entrepreneurship may be a poor financial situation of the family. This motivational aspect might be an attractive element in the case where a woman wishes to achieve more income to the family for her own.
2.5.2 Dissatisfaction towards Salaried Job
Dissatisfaction towards wage work is also one of the motivational factors for women entrepreneurship.
According to Due Billing (1996, 157) and Loscocco (1997, 203), difficulties in getting a proper and satisfied job is especially for younger women one of the reasons for becoming an entrepreneur. Dissatisfaction derives from the fact that an entrepreneurship might be the solution depending of the current state of the work ambience. Should a woman lose the importance in her work, she may find her thinking and emotional life separated from her environment.
2.5.3 Difficulty in getting a Job
It seems that many times women need to strive for entrepreneurship due to different negative aspect. These are dissatisfaction towards their current jobs, frustration, and unemployment and non-progress.
According to Kovalainen (1993.78) and Duchénaut (1997.50), self employment has been seen to offer a better career possibility and a better income level as regular work under someone’s payroll. Leaving a housewife role after several years may bring together difficulties in finding a job, since after taking care of the children and the house specific professional skills might have been forgotten. Again, working fulltime might be difficult if the children are still young. This way entrepreneurship may be a good choice if a woman can combine home and work.
2.5.4 An alternative for Unemployment
Due to difficult financial situation, several women may be forced to self-employ with the aid of entrepreneurship. Starting a business seems to be the only way to make one’s family’s living. Unemployment both attracts and pushes women towards entrepreneurship.
2.5.5 The Possibility for Time Management
Kovalainen (1993, 76) and Duchénaut (1997.48) pointed out that, according to empirical studies this aforementioned reason is for women one of the most important motivational factor for entrepreneurship. For women entrepreneurs, family and working for own companies are more attached together than with women who are employed.
Again, working as this sort of “super woman” uses woman’s resources requires stamina, for female entrepreneurs this leads to lack of own time, which usually means there is no time for the family and most of all for her. This may be one of the reasons why so many women work as part time entrepreneurs. This option allows women to have more spare time for themselves and the family. Though important for them, but business does not worth sacrificing the family.According to Duche’naut (1997, 50),the society seems to demand women to take maternal role, and this again leads to dissatisfaction and frustration in working life, whereas men would seem to be the ones who bring money to the family.
It seems that the differences between men and women entrepreneurship derive from social factors, instead of natural characteristics of male and female.
2.6 Entrepreneurship Development in Tanzania
Entrepreneurship development in Tanzania can be traced to three broad periods, namely pre-colonial, colonial and post independence. The independence period is further sub-divided into two periods 1961-1985 characterized by the state led economy except a brief period from 19961-1966 and from 1986 to date characterized by a market driven economy.
Koda (1997:30-31) asserts that the pre-colonial era entrepreneurship development was characterized by different productive and reproductive activities carried out by artisans, craftsmen and traders to meet society’s needs. In the course of carrying out such activities, gender differentiation took place such that certain activities were considered male while others were considered female, a phenomenon that changed from one society to the other. She also pointed out that entrepreneurs; irrespective of their gender were normally given a higher status in the society.
The imposition of colonialism in the second half of the 19th century brutally interrupted the independent entrepreneurship development among the artisans, craftsmen, and traders, by introducing a colonial economy to suit the interest of the colonial power.
According to Rugumamu&Mutagwaba (1999:68), transnational companies or their subsidiaries forcibly replaced indigenous entrepreneurs. Similarly, colonial commercial banks stifled indigenous entrepreneurship development by operating discriminatively against African traders as directed by colonial governments. In this regard, Rweyemamu (1999:69) points out that Africans in Tanganyika could not apply for a bank loan without the government permission.
Koda (1997:34) pointed out that, the restriction was in accordance with a colonial legislation called The Credit to Native (Restriction) Ordinance of 1931, while these restrictions applied to all indigenous entrepreneurs, it is plausible to argue from a gender perspective as koda(1997:34) does the situation, female entrepreneurs were more disadvantaged due to extant patriarchal relations.
As (Rugumamu & Mutagwaba (1999:69) pointed out that, while Africans faced all sorts of restrictions, the situation was slightly different for Asian minority.
Asian entrepreneurs were allowed to dominate the internal commerce although they could not engage in international import and export trade and even their attempts to undertake industrial production were curtailed for some time.
The result of this situation was that by independence in 1961, only members of the Asian community had accumulated critical mass of confidence, managerial expertise and capital.
As far as Africans were concerned, Hawkins argues that atypical African entrepreneur was characterized by “a lack of skills, education and capital”.
According to Koda (1997:35), African female entrepreneurs were worse off due to combination of factors such as colonial education and training contributed to gender imbalance in entrepreneurship development as well as cultural practices that denied women the opportunity to inherit property including land.
Five years after independence, Tanzania enhanced the policy of Socialism and Self reliance in 1967 through the Arusha Declaration. Accordingly, the major means of production, distribution and exchange were nationalized. Public enterprises were established to run the nationalized entities as well as the new ones that were established.
At the same time, given the extremely low level of entrepreneurship development among Africans at independence, the government undertook some initiatives to promote entrepreneurship in the country. One such initiative was the establishment of the National Small Industries Corporation (NSIC) in 1967 as a subsidiary of the National Development Corporation (NDC). Its mission was to provide training to artisans in rural areas. In practice, it provided a few of such activities in a few regions. By the time of its abolition in 1974, it had no practical impact. The Small Industries Development Organization (SIDO) replaced it in the same year.
After years of operating in the difficult environment of a state controlled economy, today SIDO is very dynamic in promoting small and medium enterprises.
To overcome its weaknesses, SIDO’s future strategies include striving to satisfy its clientele and achieving sustainability. Policy changes after independence notwithstanding, with regard to female entrepreneurs, Koda (1997:35-37) noted that factors affecting women’s entrepreneurship development during the colonial period were also at work after independence.
For example, she points out that, while parastatals stifled the small private enterprise sector, women’s enterprises were more affected than men’s. Furthermore, due to gender factors women were also disadvantaged in accessing SIDO’s facilities and resources.
During the period of state control of the economy, a number of laws were passed in order to regulate practices considered unsocialist.
These included the leadership code of 1969, the Human Resources Deployment Act of 1983 and the Economic and Organized crimes control Act of 1984.
According to Rugumamu& Mutagwaba (1999:71), by the Leadership Code of 1969, leaders in the ruling party, government and public enterprises were “prohibited from holding shares or accepting directorship in private enterprises, owning rental property, employing wage labour or receiving more than one salary”. Obviously, the result of the code was to stifle entrepreneurship development among the affected category of Tanzanians.
According to Rugumamu& Mutagwaba(1999,71), The Human Resources Deployment Act of 1983 focused on emerging small entrepreneurs since people who were deemed to be in officially recognized types of employment were relocated to rural areas and given pieces of land to work on.
Nchimbi (2002:19) pointed out that, this move suppressed nascent entrepreneurs in the informal sector.
Nonetheless, some researchers on entrepreneurship in Tanzania have viewed the Human Resources Deployment Act as a positive attempt in promoting entrepreneurship in the country.
Rugumamu& Mutagwaba (1999:71) on the other hand pointed out that, the Economic and Organized Crime Act of 1984 focused on medium and large scale entrepreneurs. As the name suggests the offences covered by this Act included “bribery and corruption, hording of commodities, organized crime, hording money, fraudulent schemes and theft of public property”.
Entrepreneurs who managed to survive during this period faced problems, including a deficient legal environment, lack of access to finance, a cumbersome system of business licensing, complex tax system, and numerous laws on standards and a massive amount of red tape.
Kristiansen (1999:154) was the view that, the cumulative effect of these problems and two decades of state control of the economy and entrepreneurship development in the country was that the potential for emergence of entrepreneurial activities was immensely reduced.
Lydall (1992: vi) corroborates this by pointing out that the expansion of entrepreneurship in Africa is curtailed by legal, administrative, socio-economic and political factors rather than the individual characteristics of entrepreneurs. In the same vein, Dana (in Kristiansen, 1999:153) and Bonu (1999:98) posit that minimal government intervention stimulates entrepreneurship in a society, whereas excessive government intervention does not, due to several factors.
Rugumamu& Mutagwaba), 1999:78) pointed, these factors to include corruption which raises the cost of business transactions, branding business people as capitalist exploiters, lack of confidence in government intentions on the part of business people as well as curtailment of business opportunities for co operatives, small and medium enterprises by public monopolies.
From 1986, Tanzania started to liberalize the economy following her acceptance of IMF and World Bank SAPs. In this regard, the government has introduced many reforms in favour of private sector development.
Accordingly, today the government acknowledges that its role is to facilitate the private sector and other economic agents in order to bring about fast economic growth and development.
In order to create an enabling environment for private sector development, the government has liberalized the economy, amended and enacted several investment related laws and policies, undertaken financial reforms, liberalized the trading regime and put in place an attractive investment package (www. tanzania.go.tz).
In the same vein, the government has institutionalized a consultative process with private sector. Likewise, the private sector uses its umbrella Organizations to interact with the government. Such umbrella organizations include the Tanzania Chamber of Commerce Industry and Agriculture (TCCIA), the Confederation of Tanzania Industries (CTI), the Tanzania Private Sector Foundation (TPSF) and the Tanzania National Business Council (TNBC) (www.tanzania.go.tz).
TNBC, formed in 2001, provides the main forum for public/private sector consultations on strategic issues of economic growth and development (www.tanzania,go.tz).
Hand in hand with instituting reforms, government efforts to develop female entrepreneurs who were in employment are reported to have gone to business much earlier than those in developed countries Rutashobya&Nchimbi (1999:212).
Rutashobya & Nchimbi (1999:215) With regard to psychological constraints pointed the major ones facing female entrepreneurs as low confidence, low achievement motivation, low future orientation and passive orientation.
Rutashobya & Nchimbi (1999:215) also pointed out that, due to gender reasons, female entrepreneurs prefer to rely on own family savings to finance their business.
Consequently women’s multiple roles and restricted access to finance, especially with regard to labour used as well as growth and marketing strategies, shape their entrepreneurial behavior. Rutashobya & Nchimbi (1999:216) asserts that entrepreneurial traits are influenced by several factors, namely infrastructural, environmental turbulence, and life experience. Infrastructural factors refer to political, legal, financial, logistical, economic and social systems and structures. Environmental turbulence factors refer to rapid threatening change while life experience factors relate to school and work environment.
According to Rutashobya & Nchimbi (1999:216), the influence of gender on female entrepreneurship has been taken as an environmental factor. In this regard, socio-cultural and traditional values and prejudices are said to have seriously affected women’s entrepreneurial traits. For example, El-Namaki; Stevenson; Rutashobya & Nchimbi (1999:216) assert that, early conditioning has affected women’s level of self-confidence, achievement motivation and ability to take risks.
Rutashobya & Nchimbi (1999:216) further pointed out specifically that women have been conditioned from very early stage that they will be wives and mothers only, their place is in the kitchen and they are the second class people in relation to men. Kibera&Kibera (1999:238) were of the view that, due to these socio-cultural constraints, female entrepreneurs are said to give only secondary importance to entrepreneurship activity.
2.7 The role of Women entrepreneurs in Tanzania
Individually, self-belief and entrepreneurship are factors that can be associated to this century. Self-employment through entrepreneurship is one way to ease the unemployment rates. Women entrepreneurship has as well been brought into light in various ways.
Women just like men have been involved in economic activities since early years. Their involvement has been in addition to their participation in the domestic sector. However, their economic activities have focused primarily on meeting basic needs, yet lack of resources and control of resources has been common. Their contribution in micro- entrepreneurship has been equally unpaid, unrecognized and undervalued. By conducting studies, women’s role in the economy will be enhanced.
By empowering women, there will be a development in the human capital whereby a continuity of the enterprises can be ensured since the young generation will be attracted in to becoming entrepreneurs.
There is evidence that women’s projects have the potential to grow. Women also have the ability, and with proper guidance they can be successful. Micro Entrepreneurship makes significant contribution to the family, community and local economy.
2.8 SME Policy framework in Tanzania
Recognizing that women have less access to productive resources such as land, credit and education due to cultural barriers, and that they stand on uneven ground, the SME Development Policy specifies that gender mainstreaming will be enhanced in all initiatives pertaining to SME development, and outlines the need for specific measures that promote women’s entrepreneurship and they are stated as follows:
i. Facilitate SME service providers to design special programmes for women entrepreneurs and disadvantaged groups; and ii. Identify factors inhibiting women and disadvantaged groups from going into business and design programmes to address those factors.
Although by November 2003 specific strategies for addressing women’s enterprise development had not been drafted, the implementation plan will take a sectoral approach supported by the rationale, “if you want to grow the Tanzanian economy, you have to develop the food sector, and if you want to do that, then you have to develop women”.
To complement the Government’s focus on women entrepreneurs, the MITM-SME
Section is also the implementing partner for the ILO’s WEDGE Programme in
Tanzania.
Time is dedicated to leading projects to promote women’s entrepreneurship, building capacity in associations of women entrepreneurs, and implementing gender mainstreaming workshops for government officials, donor organizations and BDS providers.
One of the key outputs from the gender streaming initiative is the FAMOS (female and male operated small enterprises) Check, a gender audit tool that is being used in training workshops to sensitize organizations in dealing directly with SMEs, and to assist them in monitoring how specific interventions are reaching and impacting both women and men.
In their review of development partner and donor efforts, Olomi and Nchimbi
(2002) concluded that SME policies and programmes of the past have differed in the extent to which they addressed gender issues.
Some have shown the need to address women’s needs but fell short of specific strategies, while others did come up with specific strategies. UDEC later carried out a survey of donor-supported programmes on behalf of the Africa Project Development Facility (APDF), and in February 2003 released a directory of donor-supported SME and private sector programmes (Olomi, Baisi and Philemon, 2003). It does not appear that a large proportion of donor attention has been placed on the business development and growth needs of women entrepreneurs. However, it is noted that the Donor Advisory Committee (DAC) (now the Donors Partners Group) has occasionally established DAC sub-groups to focus on a particular sector or issue. A case in point is the Sub-group on Micro-finance.
It is suggested that a similar approach be adopted by donor groups interested in addressing some of the serious challenges that are impeding the further growth and development of women’s enterprises in Tanzania, particularly capacity building of women-owned MSEs and improving access to financing, training, and business development services.
In recognition of the importance of SME sector, the Government has continued to design and implement a number of policies and programmes supportive to the development of the sector.
The National Employment Policy recognises that the private sector including SMEs is the major source of employment in Tanzania and outlines policies that will contribute to the creation of an enabling environment for private sector development.Other policies with a bearing on the development of the SME sector include: National Trade Policy, Gender and Women Development Policy, Cooperative Development Policy and the Rural Development Strategy. Central to all these policies, is a creation of an enabling environment, building of a robust private sector and articulation of strategies that will create a sustainable growth.
A number of institutions, both public and private were established to implement and coordinate various programmes arising from these policies. Furthermore, the government has undertaken various measures aimed at creating an enabling environment to enhance enterprise development. These include, among others, maintaining macro-economic stability; review of tax regime; simplification of licensing procedures; implementing a programme on ‘Business Environment Strengthening for Tanzania- BEST’ and implementation of a ‘Competition Policy’.Apart from SIDO, various institutions have been established to support enterprise development in Tanzania. They include the Tanzania Industrial Research Development Organisation (TIRDO) which supports local raw materials utilisation; Centre for Agricultural Mechanization and Rural Technology (CAMARTEC) which is involved in promotion of appropriate technology for rural development; Tanzania Engineering and Manufacturing Design Organisation (TEMDO) responsible for machine design; Tanzania Bureau of Standards (TBS) mandated to promote and enforce standards; and the Board of External Trade (BET) which is instrumental in promotion of exports mainly through trade fairs.Government owned tertiary training institutions have also introduced a number of units which provide research, consultancy and training services in SME related issues. These include the University of Dar es Salaam Entrepreneurship Centre (UDEC) and the Technology Development and Transfer Centre (TDTC). Both are active in incubation initiatives.
The Ministry of Industry, Trade and Marketing (MITM) has developed a National Incubator Programme, which is a framework to guide all initiatives in this direction. This programme is supposed to co-ordinate incubation initiatives, including those led by SIDO, Technology development and Transfer Centre (TDTC) of UDSM and the UDSM Entrepreneurship Centre (UDEC), 2003.Despite all these and other completed and ongoing interventions, we are yet to see a real takeoff in terms of support, especially to women entrepreneurs; this is according to discussions with women entrepreneurs. They all stated to be in a stand-alone situation with no support from agencies.
CHAPTER THREE
3.1 Research Methodology
Introduction
The objective of the primary research was to understand the factors motivating Tanzanian women to become entrepreneurs. It went further to enhance the understanding of women entrepreneurship, what motivates them to undertake entrepreneurial activities, and examine their attitudes concerning entrepreneurship.
The primary research comprised a sample survey of 83 women in Dar es Salaam, Mwenge makonde carving market and women owned clothing shops at Kariakoo, followed by a focus group discussion which involved 4 women entrepreneurs from both businesses, the two businesses were selected have a good number of women.
3.1.1 Research Design
The study comprised a sample survey of 83 women entrepreneurs, followed by an in-depth study of a smaller group of 4 women, all drawn from the sample.
The study focused on women in two women dominated activities: makonde carvings business and clothing business at Mwenge and Kariakoo respectively both in Dar es Salaam chosen as the main commercial centre of Tanzania. Along with my interest on the factors motivating these women to become entrepreneurs, the study included women who had been in business for at least two years so that it can be easy to learn what motivates them to continue working as entrepreneurs.
3.1.2 Study Area
For the purpose of the study, Dar es Salaam has been selected since it has potential for growth of these two selected entrepreneurial activities and furthermore women entrepreneurs are easily accessible in these two business areas (Mwenge Makonde and Kariakoo) . Dar es Salaam has been endowed with several facilities for the conducive growth of women entrepreneurs when compared to other regions in Tanzania. So, it is researcher’s view that Dar es Salaam is ideally suited for a study on women entrepreneurship in the carving and clothing sectors.
3.1.3 Sample and sampling procedure
The total number of registered small businesses market run by women entrepreneurs at the Mwenge Makonde carvings 135 whereas those in Kariakoo clothing shops were 258 during the time of data collection. A total of 83 women entrepreneurs from the two businesses participated in the study, 44 (17%) women entrepreneurs from the clothing business were interviewed, and 39 (28%) women entrepreneurs from the carving business responded to questionnairs.The sample was selected by using purposive sampling method.
The reason for choosing these two businesses is that they have a good number of women entrepreneurs, and are allocated at areas that were convenient to the researcher. Furthermore, since the two types are quite different the researcher wanted to observe whether there would be any significant differences in factors motivated these women to become entrepreneurs.
3.2 Research Tools
Different types of data collection tools were applied in this study considering types of the respondents. Major data collection tools applied in this study were as follows:
1. Semi-Structured Interview Schedule
A semi-structured interview schedules was used to collect data from women entrepreneurs in the clothing business.
2. Semi-structured questionnaires were also used to collect data from women entrepreneurs in the carving business.
3. A Focus group discussion
The objectives of the focus group discussions were to get personal experiences of the women and their drives, successes and problems in becoming entrepreneurs.
During the survey, a total of 4 women entrepreneurs were selected (from the 83 who responded to the survey) for a further discussion to better understand their experiences in working as entrepreneurs.
The focus was on experiences and driving factors, as well as how they started their enterprises. The composition of the women studied was designed to make it possible to learn from the two types of businesses. That is, two from each business type.
3.3 Data Collection Methods, Procedures and instruments
The success of any research objective depends on how data and information are collected and practical applicability of quality research instruments.
3.3.1 Primary Data
Primary data were collected from the sample chosen and used for the purpose of this specific study. The researcher and assistants had to visit targeted Carvings shops to get the shop owners for filling the questionnaires. On the part of the clothing business the researcher and assistants conducted interview to the shop owners. All the respondents were able to fill the questionnaires and the interviewees devoted their time to respond to questions. Furthermore four women; two from each group participated in an in-depth discussion.
3.3.2 Secondary Data
Secondary data have been collected from books, journals, periodicals, reports, the internet, and published PhD and other levels theses.
3.3.3 Data Processing and analysis
The data from questionnaires were screened and coded for detailed analysis. SPSS spread sheet computer programme was used to generate both qualitative and descriptive statistics and tables were used for data presentation. The in-depth discussions with selected women entrepreneurs were also presented.
CHAPTER FOUR
4.0 Introduction
The chapter presents the discussion of the findings of the study. The presentation is organized according to the research objectives and questions. The chapter is organized as follows:
i. Demographic factors of women entrepreneurs
ii. Motivation for women entrepreneurship
iii. Reasons for continuing working as entrepreneurs
iv. Problems facing women entrepreneurship,
v. Their attitudes towards entrepreneurship
vi. Goals and dream in relation to women entrepreneurship and support or help that would aspire for women entrepreneurs in Tanzania.
4.1 Results and Discussion
Age Status: Most of the women entrepreneur (61.4%) belonged to the age of 35 years or below and 38.6% belonged to the age of 36-40 years (Table1). It appears generally that most of the women think of a business idea in their thirties. One more reason for this category turning to entrepreneurship could be that they viewed business as flexible and felt sure that they could manage both houses and business. Kim (1994) stated that generally enter into business after their thirties.
Table 1: Age distribution of women entrepreneurs (N=83)
|Age |Respondents |Percent |Valid Percent |
| | |51 |60.7 | |
| |35 years or below | | |61.4 |
| |Up to 40 years |32 |38.1 |38.6 |
| |Total |83 |98.8 |100.0 |
Source: Field Data 2009
Educational Background: The results (Table 2) indicate that most of the women entrepreneurs have reached the secondary education level(27.7%), diploma in business (22.9%), first degree/advanced diploma (16.9%),certificate in business (15.7%), primary education(12%) and master degree (MBA) (4.8%).A majority of women entrepreneurs in the two business groups have better education qualifications. The data reflects that educational status does not necessarily influence women seeking entrepreneurship (Rani 1992). Some women were less educated but they have their own system of accounting and they manage their small businesses.
Table 2: Educational Level of women entrepreneurs (N=83)
|Education Background |Respondents |Percent |Valid Percent |
| |Master Degree(MBA) |4 |4.8 |4.8 |
| |Degree/equivalent |14 |16.7 |16.9 |
| |(Business) | | | |
| |Diploma in Business Studies |19 |22.6 |22.9 |
| |Certificate |13 |15.5 |15.7 |
| |Secondary |23 |27.4 |27.7 |
| |Primary |10 |11.9 |12.0 |
| |Total |83 |98.8 |100.0 |
| | | | |
Source: Filed Data 2009
Income Level of women entrepreneurs: The income levels were set specific for this study. The results (Table3) indicate that most of the women entrepreneurs in the two businesses of this study were medium income earners (55.4%) as per income levels set specific for this study. Low income earners were (26.5%) and just (18.1%) were high income earners and a majority of these were from the carving business.
Table 3: Level of Income of women entrepreneurs (N=83)
|Level of Income |Frequency |Percent |Valid Percent |
| |Low (5-10m) |22 |26.2 |26.5 |
| |Medium(20-50m) |46 |54.8 |55.4 |
| |High(50-100) |15 |17.9 |18.1 |
| |Total |83 |98.8 |100.0 |
| | | | |
Source: Field Data 2009
Past work experience of women entrepreneurs: The results (Table 4) indicate that most of the women entrepreneurs in the category under the study are equipped with past work experience (54.2%) and some of the women (45.8%) did not work previously, this means they entered into the business just after school.
Table 4: Past work experience of women entrepreneurs
|Past Work Experience |Respondents |Percent |Valid Percent |
| |YES |45 |53.6 |54.2 |
| |NO |38 |45.2 |45.8 |
| |Total |83 |98.8 |100.0 |
| | | | |
Source: Field Data 2009
Motivation for Women Entrepreneurship
In order to find out the factors influencing the women to become entrepreneurs 6 attributes that can influence their decision were identified such as desire to do business, do the job they like, supplementing family income, similar previous job and out of retirement. These are attributes are as discussed below: Desire to do business: The most important motivating factor (Table 5) to start entrepreneurship venture was the desire to do business, 41% of women acted on their own idea in setting up their enterprises, which reflects independence in making decisions something that should be encouraged.
Do the job they like: 28.9 percent of women opined that business created an opportunity for them to do the job they liked, as opposed to being employed which sometimes is forced by necessity.
Supplement family income: To supplement family income appeared to be motivating factor to start entrepreneurship venture (24.1%); these women decided to enter into business as means of supplementing income for their families.
Schwartz (1979) expressed that ‘economic necessity’ was found to be one of the most prime motivations in emerging entrepreneurship.
It also reveals that there is a definite growing awareness in the society and women in particular that if the family has to maintain a reasonable standard of living women should supplement to family income with skills they have instead of relying on spouses income.
3.6 % of women had similar previous jobs in the category they are operating while 2.4% came out of retirement and decided to start their own business to support their families.
Table 5: Motivating factors for women entrepreneurs
|Factors |Respondents |Percent |Valid Percent |
| |Out of retirement |2 |2.4 |2.4 |
| |Similar previous job |3 |3.6 |3.6 |
| |Supplement family Income |20 |23.8 |24.1 |
| |Do the job they like |24 |28.6 |28.9 |
| |Desire to do Business |34 |40.5 |41.0 |
| |Total |83 |98.8 |100.0 |
| | | | |
Source: Field Data 2009
What are the reasons for continuing to work as an entrepreneur?:The results in (Table 6) reveal that Forty two respondents (50.6%) stated that the main reason for continuing to work as entrepreneurs is the success they have achieved in business. Eighteen respondents (21.7%) enjoy applying skills and competence acquired in business,12% enjoy doing the entrepreneurial job, another 12% of respondents devoted entrepreneurship as their primary job and 3.6% seen increased social networks as the reason.
Table 6: Reasons For women to continue working as entrepreneurs
|Reasons |Respondents |Percent |Valid Percent |
| |Increased social network |3 |3.6 |3.6 |
| |Business as a primary job |10 |11.9 |12.0 |
| |Use skills and competence |18 |21.4 |21.7 |
| |acquired | | | |
| |Enjoying the job |10 |11.9 |12.0 |
| |Success in Business |42 |50.0 |50.6 |
| |Total |83 |98.8 |100.0 |
| | | | | |
| | | | |
Source: Field Data 2009
What are the problems Facing Women Entrepreneurs? The results (Table7) revealed that the major problem faced by women entrepreneurs Twenty eight respondents or (33.7%) is identifying opportunities this causes most of the women to copy what others are doing just in the same way and in the same area. Seventeen respondents or 27.7% mentioned lack of business training at start up as their main problem.Sixteen respondents or 19.3% pointed out Lack of skilled labour force as a major problem especially to the women entrepreneurs in the carving businesses who deal a lot with foreign customers require labour force equipped with communication skills.On the other hand, although lack of business training is a major problem during start-up (27.7%) is perceived as a minor problem as the business progresses. This is a reasonable observation since the women entrepreneurs would normally have acquired some business skills as their business grew. Sixteen respondents or 19.3% pointed out Government procedures as being a problem in terms of taxation, importation and clearance procedures especially for women in the clothing business and those in the carving business are affected by government’s role to organize and manage export and import in the country. The mismatch between production structure and demand in the international markets results in declining competitiveness of domestic produced export products. Finally 7.2% of respondents were having problems in obtaining lines of credit. Table 7: Problems facing women Entrepreneurs in Tanzania
|Problems |Respondents |Percent |Valid Percent |
| |Obtaining lines of credit |6 |7.1 |7.2 |
| |Lack of skilled labour |17 |20.2 |20.5 |
| |Lack of business training at start |16 |19.0 |19.3 |
| |up | | | |
| |Government procedures |16 |19.0 |19.3 |
| |Identifying opportunities |28 |33.3 |33.7 |
| |Total |83 |98.8 |100.0 |
Source: Field Data 2009
Having worked as an entrepreneur has your attitude changed?
Results(Table 8) show that most of the women entrepreneurs (71 or 85.5%) have their attitudes change towards more positive as they continue work as entrepreneurs due to success they are getting out of business and they enjoy challenges they encounter as they get energized and look forward. Seven respondents or 8.4% have negative attitudes towards entrepreneurship due to the failure proved by their business performance while five respondents or 6% have not changed attitudes at all.
Table 8. In what ways does your attitude towards entrepreneurship have been affected during your experience in the enterprise?
|Attitude Change |Frequency |Percent |Valid Percent |
| |Not at all |7 |8.3 |8.4 |
| |Positive |71 |84.5 |85.5 |
| |Negative |5 |6.0 |6.0 |
| |Total |83 |98.8 |100.0 |
| | | | |
Source: Field Data 2009
What are your goals and dreams in relation to women entrepreneurship?
Results ( Table 9) show that most of the respondents (41%) aim at seeing gender equality and women empowerment, 24.1% enjoy contributing to society’s well being, 21.7% aim at eradicating extreme poverty, 8.4 % enjoyed extended social network while 4.8% felt prestige.
Table 9 Goals and dreams in relation to women entrepreneurship
|Goals and Dreams |Respondents |Percent |
| |Prestige |4 |4.8 |
| |Extended social network |7 |8.4 |
| |Eradicate extreme poverty |18 |21.7 |
| |Contribute to society 's well being |20 |24.1 |
| |Promote gender equality and empowerment |34 |41.0 |
| |Total |83 |100.0 |
| | | | |
Source: Field Data 2009
What kind of support or help would aspire for women entrepreneurs in Tanzania?
Results (Table 10) reveal that most of the women entrepreneurs (42.2%) needed education and training especially in business and management lessons, 28.9% wanted financial support, 24.1% wished to operate in a conducive policy and convenient legal environment, women entrepreneurs in the clothing business were the ones very much concerned with the policy issues as they just in books but in real practices there is no support and the operating environment is very difficult in terms of taxation and clearance, changes and 4.8% wanted to have access to the market, this was the case with women in the carving business.
Table 10 .Support or help that would aspire for Women Entrepreneurs in Tanzania
|Support required |Frequency |Percent |Valid Percent |
| |Access to the market |4 |4.8 |4.8 |
| |Good policy and legal infrastructure |20 |23.8 |24.1 |
| |Financial Support |24 |28.6 |28.9 |
| |Education and Training |35 |41.7 |42.2 |
| |Total |83 |98.8 |100.0 |
Source: Field Data 2009
The results above can be summarized that, the sample of women interviewed in this study is clearly not typical of the women entrepreneurs described in most of the reviewed literature. They are different, because the fieldwork for this study focused on women in formal rather than those in informal business. The literature generally shows that Tanzanian women entrepreneurs have low levels of education and very limited access to economic resources. This is not the case in this study as women entrepreneurs in this study are well educated, their businesses are formal , and they are successful the reason for continuing working as entrepreneurs; a good number of women have also past experience in various fields.
4.1 Profile of the Women Entrepreneurs participated in the Focus group discussion
Of the 4 women who participated in the in-depth study, one has small sized business, two have medium sized enterprises and one has a large enterprise as per definition of this particular study. They are all married, age-wise, of the 4 women; three are in thirty five or below age band and one is in up to forty age band. They came from different backgrounds. In terms of education, they all completed college.
All have had past experience in their work. Their experiences help them in business by providing network (their previous customers) and instilling confidence to deal with different types of people and situations. The women’s family backgrounds range from entrepreneurs in the same fields to peasants.
Two of the women enjoyed the business activity at an early age by seeing the people around them doing .They then familiarized with the business and they later turned into serious business activities from the skills acquired. Emmy whose father was making the carvings was inspired and started making the carvings at her young age and proceeded with the business after her secondary education.
Sabikha with, a successful boutique, started working in the family shop when she was in standard seven, she was the motivated to undertaking the same business when she completed college.
Rabia got the urge for business when she was working as an employee in the clothing shop at Kariakoo.She started by purchasing few jeans trousers on whole sale and retail them at bit higher price; now she can import a variety of clothing from different Asian countries and she is confident with what she is doing.
The reason for the women doing these two types of businesses was that they enjoy being in business they do, even if they get other things to do they will still keep their businesses.
This was the case for all participants from both groups, as they see business as important part of their lives not just as the mechanism for increasing income.
This is in harmony with Herzberg’s two factor theory, which pointed out that a person may be satisfied with the internal circumstances, in the case at hand women were satisfied by the job itself.
Another reason for women to choose entrepreneurship is that it enables them to combine their multiple roles, that is, business and family responsibilities. Entrepreneurship offers women with more flexibility as one Amina said she can prepare her children and takes them to school in the morning before she goes to open her clothing shop at Kariakoo, and can pick them in the afternoon conveniently compared to when she was working as an employee in a clothing shop.
An interview guide (Appendix 2) was used to guide data collection in the focus group discussions. However, during the discussions, follow-up questions were asked as and when necessary. Analysis was done by tracking common themes, drives for going into business, experiences, challenges, and future aspirations.
Such motivational factors like early socialization of activities and later on turning to serious businesses were also revealed on some women in research by ILO (2003)
CHAPTER FIVE
5.0 Conclusion & Policy Implications
This study draws a conclusion that, desire to do business, doing the job they liked, and supplementing family income play a crucial motivational role in women who own business at Mwenge carving market and Kariakoo clothing shops. It was designed to determine personal and business characteristics of entrepreneurial ventures owned by women, factors motivated them to enter into business, problems faced by women entering business, attitudes of women doing business, and reasons for women to continue work as entrepreneurs.
Most of the women entered into business because they had the desire to do business, they were the owners of the firms, and majority was equipped with past work experience. Personally they were better educated and 35 years old or below.
The major factors motivated women to start business were the desire to do business, do the job they like, supplementing family income, were doing similar job in the past and come out of retirement. The major business problems they faced in order of importance were identifying opportunities, lack of business training at start up, lack of skilled labour, government procedures and obtaining credit lines.
Despite of problems they faced, women entrepreneurs benefited through success in business, doing the job they liked, independence, financial and other benefits.
The specific findings of this study are as follows:-
It was also observed that Tanzanian women entrepreneurship suffers from lack of government support. Based on the results we can argue that different authorities in the country could have a more active role in supporting entrepreneurs both at starting points and at later stages during their progress. It is clearly stipulated in the policy but most of the issues are not put into practice yet. The support should focus on the needs arising from entrepreneurs themselves and especially those aspects which the entrepreneurs have no information about.
It has also been noticed that both entrepreneurs from the two groups gave an impression that they have been satisfied and do not regret about their lives as entrepreneurs, rather they feel that their personal attitudes have developed into a more positive during the last two years. This is evidenced both by their answers as well as the real situation during the interview process. It is for the policy makers to give a special attention on women entrepreneurship since it provides a considerable work force; areas of taxation, education and Training, export/import procedures, goods clearance procedures can further be improved so as to create conducive working environment for women entrepreneurs.
Though a few non-governmental organizations claim to support the creation of new business in form of financial support and guidance, the image of women entrepreneurship seemed to be challenging and long way to stand alone. The government and agencies should put more effort to change the image of women entrepreneurship to be an encouraging one since it helps reduce the problem of un- employment and further reduces crimes as many people are involved in legal businesses.
For further development suggestions, one possibility would be for licensing authorities to prohibit hotels from selling carvings and make the Mwenge market be the sole sellers of carvings so as to encourage women entrepreneurs with more guidance and support.
It was also found that no significant differences on the factors motivating women to become entrepreneurs from the two groups.
5.1 Recommendations
i. There should be a curriculum change along with proper career guidance for girls in educational institutions, which will shape them to become capable entrepreneurs in future. ii. Success stories of women entrepreneurs from varied backgrounds should be popularized through text books of schools and colleges. All possible media should be used to project these role models. iii. Women as a potential source of entrepreneurship should be targeted by government and other agencies. iv. Efforts should be made to locate entrepreneurial potentialities amongst women and opportunities should be provided to them. This is possible as entrepreneurship allows them to perform their multiple family roles as well.
The study revealed that if women are well educated as the women in this particular study they are a potential contributors to the national economy, therefore education among women should be given an upper hand by the society in general. The society has also to be convinced about the significance of women entrepreneurship then their attitude will change, their roles and expectations will change and they will provide moral support, necessary guidance and help as needed.
5.2 Areas for further Research
Due to time and financial constraints; the researcher selected two business types in Dar es Salaam therefore the sample size was limited. It is therefore suggested that future researchers establish a broader study on women entrepreneurship that will cover more regions in order to increase the validity of the results. Moreover another important study to support the study at hand would be to establish the total number of women entrepreneurs in Tanzania, their distribution by sector and the size of their enterprises.
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Appendix 1
7.1 INTERVIEW QUESTIONS
The way questions are formed and worded was the most crucial element in determining how the interviewee will respond. Primary data was collected using closed-ended questionnaires and in-depth interviews which were personally administered to a selected sample of women who own and work in their own enterprises. The questions were so set to allow easy data analysis which is unlike with open-ended questions.
THE OPEN UNIVERSITY OF TANZANIA
FACULTY OF BUSINESS MANAGEMENT
FACTORS MOTIVATING TANZANIAN WOMEN TO BECOME ENTREPRENEURS, A CASE OF CARVING BUSINESS AT MWENGE AND CLOTHING BUSINESS AT KARIAKOO
|Introduction |
|Any information you give in this questionnaire will ONLY be used for ACADEMIC PURPOSES and will be treated CONFIDENTIAL. |
|I will be glad if you can answer all questions |
SECTION I
There are 10 questions in this section. This section contains questions that are about various experiences you have in working as an entrepreneur. Please put a tick (√) in only one box for each question given which you think corresponds to your experiences on your current business
1. Why did you choose to become an entrepreneur? Please tick(√) one
( Desire to do Business
( Do the job they like
( Supplement family Income
( Similar previous jobs
( Come out of retirement
2.0 From your experience as an entrepreneur rate according to the level of importance, why you want to continue with entrepreneurship.
Rate your opinion on the five point Likert Scale:
5=extremely important, 4= very important, 3= important, 2=Not important, 1=strongly not important
□ Success in business □ Enjoy the job □ Use skills and competence acquired □ Increased social network □ Business as a primary job
| |
| |
| |
3.0 What Problems do you face as an Entrepreneur?
□ Identifying opportunities
□ Lack of business training at start up
□ Lack of skilled labour
□ Government procedures
□ Obtaining credit lines
4.0 Having worked as an entrepreneur Has your attitude changed towards a A. More positive B. Less positive C. Not changed at all; during the past two years
Please choose one
5.0 What kind of support or help would aspire for women entrepreneurs in Tanzania? Please tick (√)
□ Financial support
□ Education and Training
□ Good policy and legal infrastructure
□ Access to the market
6.0 What do you think motivates Tanzanian women the most become entrepreneurs? Please Rate your opinion on the five –point Likert Scale:
5=extremely important, 4= very important, 3= important, 2=Not important, 1=strongly not important
□ Job satisfaction □ Out of retirement
□ Achieving Social status
□ Increasing social network
□ I enjoy doing the work
7.0 What are your goals and dreams in relation to women entrepreneurship? Please tick (√) one
□ Eradicate extreme poverty within the society
□ Promote gender equality and women empowerment
□ Contribute to society’s well being
□ Promote entrepreneurship
8.0 (a) Mention at least two major problems which you have been experiencing with your business
(1) ------------------------------------------------------------------------------------------------------------
(2) ------------------------------------------------------------------------------------------------------------
(b)What do you recommend to the authorities as solutions to solve the problems you stated in 10 (a)?
(1) ------------------------------------------------------------------------------------------------------------
(2) -----------------------------------------------------------------------------------------------------------
SECTION II: PERSONAL PROFILE
There are 4 questions in this section.
INSTRUCTION: I will be grateful if you can fill in the following details about your personal profile. Responses given will be used for research purpose only.
1. What is the Size of your business? A. Small scale B. Medium scale C. Large scale
2. What is your highest education level? Tick only one A. Primary B. Secondary C. Certificate D. Diploma E. Degree/Advanced Diploma F. Master Degree 3. How old are you? ----------------------------- 4. Have been working before becoming an entrepreneur?
Note: The respondent must be the owner-manager (one who makes major decisions in the business)
Thank you for your co-operation and assistance in my study
Appendix 2
7.2 Focus Group Discussion Guide
1. Motivation to start business
i. What was the motive for starting the business? ii. Anything pushed you into starting the business? iii. Are the benefits derived from the business at the start changing as it grows?
2. Process of starting and developing business
i. How did your business start?
3. Progress
i. What are your future growth aspirations with your business?
4. Challenges
i. What Challenges does your business face? (Internal and external) ii. Did the challenges impact the business and the owners? iii. Are there any advantages in business from being a woman?
5. The Future
i. Expectations (opportunities, problems) how they match with the intentions and reasons for differences
6. Lessons from the woman’s experience
i. What can other women learn from her experience? ii.What can local government, central government do to help out women entrepreneurs in Tanzania?
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