Research Managemnt - Gem – Global Entrepreneurship Monitor

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5.1 UNEMPLOYMENT

Research conducted by Kauffman Foundation has shown that unemployment rate has a significant impact on the increasing number of individuals becoming entrepreneur or self- employed. It has been stated by (Benzing & Chu, 2009; Hessels, Van Gelderen, & Thurik, 2008), the reasons for individual to become business owner are due to the need for achievement, tendency for taking risk or for survival. The word ‘survival’ most likely refers to the impact of unemployment. Similarly, entrepreneurship often been considered as a solution for solving the country youth unemployment problem (Chigunta et al., 2005). Young people or in other word adults are encourages to become a ‘job creator’ and less on becoming ‘job seeker’ (Langevang & Gough, 2012). In this way not only it can solve the complication cause by unemployment, they are assumed to help build the economy further (Africa Commission, 2009; Chigunta et al., 2005; Garcia & Fares, 2008; Langevang, Namatovu, & Dawa 2012).

5.2 SELF-SATISFACTION

According to Dennis (1996), the report found that people will choose self-employment is because they want it, not because lack of other alternatives. Among the many empirical results from flourished literature, it has been noted that self-employed enjoy higher self-satisfaction than employees (Eden, 1975; Naughton, 1987; Blanchflower and Oswald 1998; Benz and Frey 2004).Economists imply that this utility advantage is mediated by the autonomy and procedural freedom that self-employment creates (Benz and Frey, 2008). Meanwhile, Dawson et al. (2009) indicate that the strong desire to become independence is the most important factor that affecting individual motivation for choosing self-employment. Self-employment entitle the individual to practise greater control over their work (Hughes, 2003), and greater self-satisfaction due to the increase of autonomy, the absence of hierarchy and the opportunity to dominant the working hours (Andersson, 2008). According to Blanchflower and Oswald (2007), employers’ job satisfaction and life satisfaction are all higher than workers with the identical personal characteristics.

5.3 PROFITABILITY

When there is a higher expectation of profitability, people will likely attract towards self-employed (Taylor, 1996). Simultaneously, Clark and Drinkwater (2000) posit that a powerful influence will be develop upon the employment decision when differences occurred between a person predicted earning in paid and self-employed. Baumol (1990) indicate that individuals choose to be entrepreneurs when or because they able to utilised theirs wealth, power, prestige by so doing. In addition, Baumol (1990) also claims that entrepreneurs who are ingenious and creative in finding ways to add their own wealth, power and prestige. A model of individuals chooses to be an entrepreneur if the expected net present value of profit from entrepreneurship is positive (Campbell, 1992). Gifford (1993) proclaim that entrepreneur is alert and responds to profit opportunities, and their career choice rely on the expected profit as an entrepreneur.

5.4 FAMILY BACKGROUND

According to Blanchflower and Oswald (2007), people rather to open their own business and self-employed rather than work with others. Family business as one in ownership and policymaking are dominated by members of an “emotional kinship group” (Carsrud, 1994). According to Miller and Rice (1967), researchers commonly agreed that family involvement in the business makes it distinct from the other business. Intihar and Pollack (2012) purposed that small family business may enjoyed the advantages in terms of market orientations in general and in the areas related to customer orientation, competitors orientation, as well as inter-functional coordination, specifically. Generally, family businesses are presented as a bounded entity and only restricted to those businesses directly involving family members.

The effect of social and economic factors on entrepreneurship may viewed as advantageous because their success are depends on many facets that related with each other. Although self-employment is often perceived to be a desperate effort of workers who have been laid off and experience high risks compared with other employees. However, self-employment provides not only tangibles profits – money and profits but also perceived benefit of being “one’s own boss’ that satisfied their desires to be creative and innovative.

Based on our review, seems that all of our expectations on which factors are influencing people to become self-employed does not contradict with the other researchers opinion. It has been prove that unemployment, self-satisfaction, profitability, and family background do influence people to become self-employed. However, researchers have also stated that self-employed can’t be look on from 1 point of view only instead it can be classified into 2 broad types. Which are those who voluntarily choose to become self-employed due to independence, job satisfaction, and anticipating in gaining higher incomes. As well as those who have been ‘pushed’ into self-employment because of negative external forces, for example layoff and lack of available paid-employment work in the market.

6.0 RESEARCH DESIGN

In this research we are using exploratory research design to conduct our research. Exploratory research is defined as the initial research into a hypothetical or theoretical idea. This is where a researcher has an idea or has observed something and seeks to understand more about it (Brown, 2006). Exploratory research often relies on secondary research.Secondary research makes use of information previously researched for other purposes and publicly available. We applied the initial research into hypothetical idea and conduct our research in Faculty of Business, Economics and Accountancy.

7.0 RESEARCH FRAMEWORK[pic 3][pic 4][pic 1][pic 2]

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- Unemployment

- When the labor demand in the market is decreasing and while the labor supply are increasing, this will lead to unemployment. At last, some of them will choose to be self- employed or become an entrepreneur rather than keep looking for job vacancy which the percentage to get the job is very low.

- Profitability

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