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Jour of Adv Research in Dynamical & Control Systems, May 2017

Special Issue on Recent Trends in Engineering and Managerial Excellence

Determinants of Micro Small and Medium


Enterprise Entrepreneur Sustainability
S. Jegadeshwari, Ph.D. Research Scholar, Management, Karpagam University, Karpagam Academy of Higher Education,
Coimbatore. E-mail:jagadha84@gmail.com
Dr.R. Velmurugan, Associate Professor, Department of Commerce, Karpagam University, Karpagam Academy of Higher
Education, Coimbatore, Tamilnadu, India. E-mail:drvelsngm@gmail.com
Abstract--- Business success today depends not only on corporate earnings, but also their ability to sustain for a
longer run. Sustainability is a process by which companies manage their financial, social and environmental risks,
obligations and opportunities. Business sustainability represents resiliency over time – business that can survive
shocks because they are intimately connected to healthy economic, social and environmental systems. These
businesses create economic value and contribute to healthy ecosystems and strong communities. Thus, in this study
an attempt has been made to ascertain sustainability traits of Micro Small and Medium Size Enterprise
Entrepreneurs of Coimbatore city. The collected data have been analyzed through Chi-square test. Result of study
indicate that sustainability of MSMEs is associated with Gender, Educational Qualification, Entrepreneurial
Experience, Area of Business, Managerial Self efficacy, Opportunity identification self efficacy, functional skills of
entrepreneurs, relationship self efficacy, tolerance self efficacy, entrepreneurs financial control ability, innovation
and risk taking ability of entrepreneurs, technical knowledge possessed by entrepreneurs.
Keywords--- Self Efficacy, Sustainability, Micro Small Medium Enterprises, Entrepreneurs.

I. Introduction
Micro, Small and Medium Enterprise entrepreneurs are important to the development of a country and their
contribution for the independence of the economy. Strong MSME sector highly facilitates the upward mobility of an
economy by absorbing the unemployment and promoting innovations. Their role is vital for developing the economies due
to their major contribution to GDP compared to the large-scale firms. The prospect of year-round orders, bigger client base
and payment security is making the bigger public sector units look more attractive for the small industry sector. Many
such industries are equipping themselves to participate and undertake government contracts. Even though government
initiates various measures for promotion of more number of entrepreneurs only a meager population is ready to establish
their own units. Moreover, all the business units established may not earn profit and sustain in the long run due to
inexperienced management, failure to understand the market by entrepreneurs, poor pricing policy, failure to face fierce
completion, inadequate cash reserves etc., Thus, success of MSME entrepreneurs depend not only on the support extended
by Central and State government, training programmes offered by various academic institutions but depends on their
entrepreneur confidence in successfully managing their firm, called as self-efficacy.
Self-efficacy is one’s confidence in performing a specific task is an important topic for entrepreneurship. Self-efficacy
helps develop both entrepreneurial intentions and actions. In addition, individual perception of business knowledge and
financial knowledge help build entrepreneurial self-confidence. Self-efficacy plays a significant role in entrepreneurship.
As self-efficacy is closely related to self-beliefs about personal capabilities, business education must focus on influencing
individuals ‘Self-belief, which is an important requirement for achieving entrepreneurship. Self-efficacy affects an
entrepreneur’s choice of activities, effort, and persistence. People who have low self-efficacy for accomplishing a specific
task may avoid it, while those who believe they are capable are more likely to participate. Moreover, entrepreneurs who
feel efficacious are hypothesized to expend more effort and persist longer in the face of difficulties than those who are
unsure of their capabilities. The tendency for efficacious people to ‘expend more effort and persist longer’ is of particular
importance because most personal success requires persistent effort. As such, low self-efficacy becomes a self-limiting
process. In order to succeed, then, entrepreneur’s need a strong sense of task-specific self-efficacy, tied together with
resilience to meet the unavoidable obstacles of life.
Entrepreneurial self-efficacy (ESE) is the degree to which people perceive themselves as having the ability to
successfully perform the various roles and tasks of entrepreneurship. Without minimal levels of entrepreneurial self-
efficacy, it is unlikely that potential entrepreneurs would be sufficiently motivated to engage in the innovative
venture creation process. Further, Entrepreneurial self-efficacy has generally focused on one’s belief in their ability
to take entrepreneurial actions based on their assessment of the managerial, functional (e.g., marketing, financial,

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Jour of Adv Research in Dynamical & Control Systems, May 2017
Special Issue on Recent Trends in Engineering and Managerial Excellence

accounting), and technical skills that they possess. Entrepreneurial self-efficacy (ESE) is, therefore, viewed as
having the capabilities that can modify a person’s belief in his other likelihood of completing the tasks required to
successfully initiate business venture. More specifically, entrepreneurial self-efficacy is defined as the degree to
which one believes that he or she is able to successfully run a business venture. Entrepreneurial self-efficacy may be
applied to determine the vocational inclinations of individuals. In fact, career self-efficacy was found to be the most
important predictor of males’ intentions to pursue careers in traditionally female occupations. In relation to
entrepreneurship, individuals with high levels of entrepreneurial self-efficacy may also have strong occupational
intentions for an entrepreneurial career. Thus, in this study an attempt has been made to identify the entrepreneurial
traits that determine self-efficacy level among entrepreneurs and to identify the outcome of self-efficacy on
entrepreneurs sustainability.

II. Review of Literature


Lawal, Fatai Alani, Worlu, Rowland E, and Ayoade, Omisade Ezekiel (2016) in their study finds that attitudinal,
perceptual factors, firm size, sector, ownership, innovative orientation, personality, management skills, motivation,
infrastructure, working capital management, and access to finance (amongst others) are critical to sustainable
entrepreneurship among SMEs. Edwige Kamitewoko and Brazzaville, Congo (2013) in their study observes that
education, experience in trade and finance experience play an important role to the success in their entrepreneurship.
Nasrul Quadir, Mohammad Saleh Jahur (2011) identified that relationship factor, sustainable factor, supply factor,
and product related factor leads to success of an entrepreneurs. Mary Kay Copeland (2010) in her article specifies
the qualities of a successful entrepreneurs are self confidence, risk taking capacity, discerning power,
inquisitiveness, tolerance of ambiguity and uncertainty, creativeness, resourcefulness, affinity for autonomy and
control, opportunism, optimism, action-orientedness, intuitiveness, persuasion, adaptation, resilience, tenacity and
courage. Kumaresan, R. (2009) in his book specified that following qualities are required for an entrepreneur to
succeed in their business. They qualities are capacity to take risk, capacity to work hard, above average intelligence
and wide knowledge, self motivation, vision and foresight, willingness to differ consumption, imagination, initiation
and emulation, inventive ability and sound judgement, flexibility and sociability, desire to take personal
responsibility, desire to seek and use feedback, persistence in the face of adversity, innovativeness and future
orientation, mobility and drive, creative thinking, strong need for achievement, ability to marshall resources, high
degree of ambition, will to conquer and impulse to fight and will to prove superior to others. Vasanth Desai (2008)
in his book mentioned that successful entrepreneur is one who initiates, establishes, maintains and expands a new
enterprise. He is basically an innovator, creator and accomplisher. Priti Krishnan (2007) in her study specifies that
risks taking and innovative, opportunistic, creative, flexible, dynamic and growth oriented are the characteristics of a
successful entrepreneur.

III. Statement of the Problem


The entrepreneur is a business leader looks for ideas and puts them into effect in fostering economic growth and
development. He plays a pivotal role not only in the development of industrial sector of a country but also in the
development of farm and service sector. Entrepreneurs employ their own as well as borrowed resources for setting
up their enterprises. Such type of entrepreneurial activities leads to value addition and creation of wealth, which is
very essential for the industrial and economic development of the country. By establishing more number of micro,
small and medium units numerous job opportunities are created to the unemployed which is a chronic problem of
underdeveloped nations. Further, establishment of micro, small and medium enterprise lead to more development of
backward regions and thereby promotes balanced regional development. It stimulates equitable redistribution of
wealth and income in the interest of the country to more people and geographic areas, thus giving benefit to larger
sections of the society.
MSME entrepreneurs are always try to explore and exploit opportunities, encourage effective resource
mobilisation of capital and skill, bring in new products and services and develops markets for growth of the
economy. In this way, they help increasing gross national product as well as per capita income of the people in a
country. MSME entrepreneurs play a key role in increasing the standard of living of the people by adopting latest
innovations in the production of wide variety of goods and services in large scale that too at a lower cost. MSME
entrepreneurs also help in promoting a country's export-trade, which is an important ingredient of economic
development. They produce goods and services in large scale for the purpose earning huge amount of foreign
exchange from export in order to combat the import dues requirement. Economic power is the natural outcome of
industrial and business activity. Industrial development normally leads to concentration of economic power in the

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Special Issue on Recent Trends in Engineering and Managerial Excellence

hands of a few individuals which results in the growth of monopolies. In order to redress this problem a large
number of entrepreneurs need to be developed, which will help reduce the concentration of economic power
amongst the population. The above point narrates the positive aspect of entrepreneurs towards country’s
development. But in reality many entrepreneurs are not in a position to sustain in their business due to lack of
planning, paucity of capital, lack of financial analysis, lack of expertise in their core area, incorrect choice of
business location, above all lack of confidence on their own ability. Thus, in this study an earnest attempt has been
made to ascertain: What are the traits an entrepreneur should posses to raise their self-efficacy level? and to identity
the impact of self-efficacy on entrepreneurs sustainability.

IV. Objective of the Study


To ascertain the factors influencing MSME entrepreneur’s sustainability

V. Research Methodology
The study is an analytical research. Primary data have been collected from MSME entrepreneurs of Coimbatore
city.
Data
Data required for the study is primary in nature. Thus, primary data is collected by making use of questionnaire.
Questions pertaining to personal and business profile of entrepreneurs, entrepreneurial self-efficacy and
sustainability are included in the questionnaire.
Sample Design
By adopting snowball sampling method, collecting data through referrals, questionnaire has been distributed to
450 MSME entrepreneurs at Coimbatore city. Of which, forty-five questionnaires have not been returned and 21
entrepreneurs have not disclosed information in detail. Hence, the final sample of study forms three hundred and
eighty four.
Tools Employed
The collected data have been analyzed by making use of Chi-square

VI. Significance of the Study


The present study is immensely useful to the Government, MSME, and entrepreneurs. The study assists
Government and MSME in understanding skills required by the entrepreneurs and the factors affecting
entrepreneur’s sustainability; accordingly Government and MSME may arrange Entrepreneurship Development
Programmes (EDP). Further, the study discloses the entrepreneurial traits required by an entrepreneur for their long-
term sustainability, which assist entrepreneurs to acquire the relevant skills for their sustainable development.

VII. Analysis and Interpretation


Level of Sustainability
Entrepreneur’s level of sustainability has been measured by assigning the scores to questions relating to
sustainability. Thirteen such questions are included in the questionnaire. Answers to the questions have been rated
on five-point scale. The scores allotted to the answers range from one to five. Thus, the maximum score an
entrepreneur would get is sixty five. Score obtained by each entrepreneur is divided by 65 and multiplied by 100 to
convert it into an index.
This index is termed as ‘Sustainability index’. The index ranges between 72.31 and 100.00 and the grand mean
of sustainability index is 88.25. Based on the sustainability index, the entrepreneurs have been divided into three
group as entrepreneurs with low, moderate and high level of sustainability.
In order to classify the entrepreneurs into three such groups, quartiles have been made use of. Accordingly,
entrepreneurs with sustainability index ranging up to 82.95 are termed as entrepreneurs with low level of
sustainability; those with sustainability index ranging between 82.95 and 93.54 are termed as entrepreneurs with
moderate level of sustainability and those entrepreneurs with sustainability index above 93.54 are termed as
entrepreneurs with high level of sustainability. Of the 384 entrepreneurs, 59 (15.40) entrepreneurs are with low

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Jour of Adv Research in Dynamical & Control Systems, May 2017
Special Issue on Recent Trends in Engineering and Managerial Excellence

level of sustainability; 261 (68.00) are with moderate level of sustainability and the rest 64 (16.70) entrepreneurs are
with high level of sustainability.
Variables Associated with Sustainability
Fifteen variables namely Age, Gender, Educational Qualification, First Generation Entrepreneur, Family
Business, Entrepreneurs Experience, Area of Business, Managerial Self Efficacy, Opportunity Identification Self
Efficacy, Functional Skills, Relationship Self Efficacy, Tolerance Self Efficacy, Financial Control, Innovation and
Risk Taking and Technical Knowledge have been selected in order to test whether there really exists any association
between each of the variables and level of sustainability. Chi-square test has been used to examine the association. Levels of
significance chosen for Chi-square tests are one and five per cent level.
Table 1: Determinants of Sustainability
Level of Sustainability
Variables Low Moderate (n=261) High Total Chi-square
(n=59) (n=64)
Age
Up to 35 4 (6.8) 43 (72.9) 12 (20.3) 59 (100.0) 6.153
36 to 45 43 (17.2) 171 (68.4) 36 (14.4) 250 (100.0)
Above 45 12 (16.0) 47 (62.7) 16 (21.3) 75 (100.0)
Gender
Male 55 (14.6) 257 (68.4) 64 (17.0) 376 (100.0) 8.129*
Female 4 (50.0) 4 (50.0) 0 (00.0) 8 (100.0)
Educational Qualification
No formal education 8 (09.4) 57 (67.1) 20 (23.5) 85 (100.0) 15.405*
Up to H.Sc., 20 (21.7) 60 (65.2) 12 (13.0) 92 (100.0)
Graduate 12 (10.0) 92 (76.7) 16 (13.3) 120 (100.0)
Technical Graduate 19 (21.8) 52 (59.8) 16 (18.4) 87 (100.0)
First Generation Entrepreneur
Yes 43 (13.5) 224 (70.2) 52 (16.3) 319 (100.0) 5.914
No 16 (24.6) 37 (56.9) 12 (18.5) 65 (100.0)
Family Business
Yes 16 (23.5) 40 (58.8) 12 (17.6) 68 (100.0) 4.650
No 43 (13.6) 221 (69.9) 52 (16.5) 316 (100.0)
Entrepreneurial Experience
Up to 1 27 (12.8) 156 (73.9) 28 (13.3) 211 (100.0) 24.443**
2 to 6 20 (14.2) 93 (66.0) 28 (19.9) 141 (100.0)
7 to 10 8 (50.0) 4 (25.0) 4 (25.0) 16 (100.0)
Area of Business
One 59 (15.5) 261 (68.7) 60 (15.8) 380 (100.0) 20.211**
More than One 0 (00.0) 0 (00.0) 4 (100.0) 4 (100.0)
Level of Managerial Self Efficacy
Low 20 (33.3) 40 (66.7) 0 (00.0) 60 (100.0) 38.565**
Moderate 32 (12.4) 167 (64.5) 60 (23.2) 259 (100.0)
High 7 (10.8) 54 (83.1) 4 (6.2) 65 (100.0)
Level of Opportunity Identification Self Efficacy
Low 12 (12.0) 68 (68.0) 20 (20.0) 100 (100.0) 51.649**
Moderate 36 (16.4) 168 (76.4) 16 (07.3) 220 (100.0)
High 11 (17.2) 25 (39.1) 28 (43.8) 64 (100.0)
Level of Functional Skills
Low 15 (33.3) 22 (48.9) 8 (17.8) 45 (100.0) 14.096**
Moderate 36 (12.4) 207 (71.1) 48 (16.5) 291 (100.0)
High 8 (16.7) 32 (66.7) 8 (16.7) 48 (100.0)
Level of Relationship Self Efficacy
Low 12 (42.9) 12 (42.9) 4 (14.3) 28 (100.0) 26.935**
Moderate 35 (13.1) 196 (73.4) 36 (13.5) 267 (100.0)
High 12 (13.5) 53 (59.6) 24 (27.0) 89 (100.0)
Level of Tolerance Self Efficacy
Low 20 (43.5) 22 (47.8) 4 (08.7) 46 (100.0) 36.038**
Moderate 35 (11.8) 213 (72.0) 48 (16.2) 296 (100.0)
High 4 (09.5) 26 (61.9) 12 (28.6) 42 (100.0)
Level of Financial Control
Low 15 (28.3) 30 (56.6) 8 (15.1) 53 (100.0) 20.848**
Moderate 44 (16.9) 176 (67.7) 40 (15.4) 260 (100.0)
High 0 (00.0) 55 (77.5) 16 (22.5) 71 (100.0)
Level of Innovation and Risk Taking
Low 20 (41.7) 20 (41.7) 8 (16.7) 48 (100.0) 83.779**
Moderate 27 (10.3) 210 (80.5) 24 (09.2) 261 (100.0)
High 12 (16.0) 31 (41.3) 32 (42.7) 75 (100.0)
Level of Technical Knowledge
Low 20 (29.0) 49 (71.0) 0 (00.0) 69 (100.0) 67.086**
Moderate 31 (12.7) 182 (74.3) 32 (13.1) 245 (100.0)
High 8 (11.4) 30 (42.9) 32 (45.7) 70 (100.0)

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Jour of Adv Research in Dynamical & Control Systems, May 2017
Special Issue on Recent Trends in Engineering and Managerial Excellence

• Sustainability is found high among male entrepreneurs and female entrepreneurs have low level of
sustainability.
• Entrepreneurs with no formal education have high level of sustainability. Entrepreneurs with technical
qualification have low level of sustainability.
• Entrepreneurs, whose entrepreneurial experience ranges between seven and ten years, have high level of
sustainability. Entrepreneurs, whose entrepreneurial experience also ranges from seven to ten years, have
low level of sustainability. Comparing the percentage, it is inferred that entrepreneurs, whose
entrepreneurial experience also ranges from seven to ten years have low level of sustainability.
• Entrepreneur’s who carryout their business in a single area has high level of sustainability. Similarly,
entrepreneur who carryout their business in a single area has low level of sustainability. Comparing the
percentage, it is inferred that entrepreneur, who carryout their business in a single area has high level of
sustainability.
• Entrepreneurs who are with moderate level of managerial self efficacy have high level of sustainability.
Entrepreneurs who are with low level of managerial self efficacy have low level of sustainability.
• Entrepreneurs with high level of opportunity identification self efficacy have high level of sustainability.
Entrepreneurs with high level of opportunity identification self efficacy also have low level of sustainability.
• Employees with low level of functional skills have high level of sustainability. Employees with low level of
functional skills also have low level of sustainability. Comparing the percentage, it is inferred that
employees with low level of functional skills have low level of sustainability.
• Entrepreneurs with high level of relationship self efficacy have high level of sustainability. Entrepreneurs
with low level of relationship self efficacy have low level of sustainability.
• Entrepreneurs with high level of tolerance self efficacy have high level of sustainability. Entrepreneurs with
low level of tolerance self efficacy have low level of sustainability.
• Entrepreneurs with high level of financial control trait have high level of sustainability. Entrepreneurs with
low level of financial control trait have low level of sustainability.
• Entrepreneurs with high level of innovation and risk taking trait have high level of sustainability.
Entrepreneurs with low level of innovating and risk taking trait have low level of sustainability.
• Entrepreneurs with high level of technical knowledge have high level of sustainability. Entrepreneurs with
low level of technical knowledge have low level of sustainability.

VIII. Suggestions
• Female entrepreneurs have low level of business sustainability. Hence, in order to increase the
sustainability skills among female entrepreneurs, both Central and State government have to offer special
Entrepreneurial training programmes. Similarly, educational institutions in association with Department of
Science and Technology, NIMAT may organize entrepreneurial awareness and training programme
exclusively for female entrepreneurs.
• Entrepreneurs with technical qualification have low level of sustainability skills. Hence, in order to survive
in the business, technically qualified entrepreneurs have to enhance managerial skills and functional skills.
Thus, in order to raise their management and functional skills, government not only offer training
programme on technical skills but also should arrange training programme for increasing managing ability
among entrepreneurs. Furthermore, academic institutions in and around Coimbatore should come forward
for training entrepreneurs in managerial and functional traits
• Entrepreneurs with low level of managerial self-efficacy have low level of sustainability. To raise the
managerial self efficacy, entrepreneurs should undergo management oriented training programmes
organized by well-renowned academic institutions. Further, entrepreneurs to increase their managerial self-
efficacy should develop adequate plan and schedule for implementation of new ideas, every step of action
of an entrepreneur focus on achievement of their organizations objectives, manage time by setting goals,
ability to identify strengths and weaknesses on his own and their employees etc.,
• Entrepreneurs with low level of functional skills have low level of sustainability. In order to enhance their
functional skills, entrepreneurs have to assist their employees in carrying out their work, make employees
involved in work, listen ideas, suggestions offered by employees with open mind, able to describe problems
clearly both orally and in writing and acts as a good example or role model for the community
• Entrepreneurs with low level of relationship self efficacy have low level of sustainability. In order to sustain
in the business for a longer period of time entrepreneurs have to maintain cordial relationship with their

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Special Issue on Recent Trends in Engineering and Managerial Excellence

employees. Relationship self efficacy may be raised by entrepreneurs by having trust on their employees,
try to maintain favorable relationship with potential investors, adopt personal policies which are supportive
to their employees, provide working environment pleasant where employees feel comfortable.
• Entrepreneurs with low level of tolerance self efficacy have low level of sustainability. As entrepreneurs
who are unable to manage stress, unable to manage employees conflict cannot withstand in the business.
Thus, in order to sustain in the business, entrepreneurs should follow suitable stress coping mechanisms and
try to resolve the problem among employees at the earliest
• Entrepreneurs with low level of finance control skills have low level of sustainability. Hence, in order to
sustain in the business, entrepreneurs have to increase their caliber to raise and manage money, perform
financial analysis at regular periodical intervals, maintain systematic structure in investment policies,
inculcate habit of recording business expenses in a systematic manner, carry out necessary investigation
before investing funds in new business
• Entrepreneurs with low level of innovation skills and risk taking have low level of sustainability. Hence, in
order to sustain in the business, the entrepreneurs have to develop new products in accordance with their
customers’ expectations, endlessly search for new technologies, processes, techniques and increase their
financial ability to bear the unforeseen business risk
• Entrepreneurs with low level of technical knowledge have low level of sustainability. Thus, entrepreneurs in
order to sustain in the business have to raise their technical knowledge by enrolling for higher studies,
attending workshops of technical in nature, participation in technical symposiums and the like. Further,
entrepreneurs may have basic knowledge on machineries, which is used in their business, entrepreneurs
must be in a position to communicate new techniques with his employees, entrepreneur may have a
capability to learn and adopt new techniques in the business.

IX. Conclusion
Economic development of any region is essentially dependent on effective utilization of locally available
resources. In order to generate more employment opportunities and to achieve equitable distribution of income and
wealth and improving the living standards of the public, resources should be used to the optimum extent. In order to
achieve the same, both Central and State Government have initiated necessary steps for establishment of more
number of Micro, Small and Medium Enterprises in every nook and corner of the country. Further, government also
offers numerous schemes and arranges necessary training programmes for the upliftment of entrepreneurs. Even
though, many of the MSME entrepreneurs have failed to sustain in their business due to lack of self-efficacy traits.
The result of the study portrays that entrepreneurs must possess managerial self efficacy, opportunity identification
self efficacy, Functional skills, Relationship self efficacy, Tolerance self efficacy, Financial control, Innovation and
Technical traits for their future survival.

References
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[2] Kamitewoko, E. Determinants of Entrepreneurship Success: An Examination of Chinese-Owned
Businesses in Congo Brazzaville. Chinese studies 2 (03) (2013) 113.
[3] Quadir, S.N. and Jahur, D.M.S. Determinants of Success and Failure of Entrepreneurs of SMEs in
Bangladesh-An Explorative Study. European Journal of Business and Management 3 (2) (2011).
[4] Mary Kay, C. Strategies for developing Entrepreneurship: Nature or Nurture?. MBA Review-Special edition
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