An Investigation on the Relationship between Emotional Intelligence and Entrepreneurship Tendency

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1 International Research Journal of Management Sciences. Vol., 3 (7), , 2015 Available online at ISSN X 2015 An Investigation on the Relationship between Emotional Intelligence and Entrepreneurship Tendency (A Case Study on the Management Alumni of University of Tehran (UT), Farabi Campus) Amir Hossein AmirKhani 1, Batool Chezani Sharahi 2* 1 Professor associate of Tehran PNU University, Iran 2 Msc in Public Administration, Transformation Trend, Payame Noor University, Tehran, Iran * Corresponding Author: Batool Chezani Sharahi ABSTRACT: Regarding the fact that entrepreneurship plays an important role in Iran s current economic condition, the aim of this study is to investigate the relationship between emotional intelligence and entrepreneurship tendency. Entrepreneurship tendency and emotional intelligence are the dependent and independent variable of the study, respectively. The term emotional intelligence (EI) has used as a form of social intelligence meaning the ability to control one's own and other people's emotions and feelings, to discriminate between different feelings, and to use emotional information to guide thinking and behavior. Due to the fact that EI is an acquirable skill, developing the society emotional quotient (EQ) through training plans is feasible. The primary hypothesis is that there is a significant relationship between entrepreneurship tendency and emotional intelligence. Secondary hypotheses are based on the significance of the relationship. The statistical sample size is composed of 50 management alumni of UT. The hypotheses were tested using Spearman correlation test. The results showed a direct, significant relationship between entrepreneurship tendency and emotional intelligence. Therefore, it can be argued that developing the EI of alumni by providing them EI-related training plans can increase their entrepreneurship skills. Consequently, it is expected that the unemployment rate among graduates decrease to some extent. Keywords: Emotional Intelligence (EI), Entrepreneurship, Personal Competence, Social Competence. Introduction INTRODUCTION Nowadays, it is well known that entrepreneurs are one of the core contributors in the economic growth of countries, and diminishing the unemployment issue. Over the last two decades, the process of training and preparing individuals for the job market has been affected by three major factors, including population increase, global and regional events, and rapid changes in technology.(mashayekh P, 2007 ) Consequently, the employment situation of academically educated persons in the world, including Iran s degree holders, has been significantly exacerbated. Studies conducted on degree holders of different grades reveal a key point stating that although they have acquired various skills and abilities, they have not learned how to take advantage of them. In fact, entrepreneurship tendency and learning how to be an entrepreneur are the same as learning how to use the skills. On the other hand, EI is an important and attainable skill, which can be developed by training, and it helps individuals to be prosperous in their life and career. Therefore, this research aims to find out the relationship between entrepreneurship and EI to demonstrate that providing EI development plans for students will indirectly increase the number of potential entrepreneurs among them. Theoretical basis Emotional Intelligence: In recent years, a large body of literature has focused on solving human problems, and it has attracted way more attention rather than technical and economic problems and the like. Emotional intelligence is 335

2 one of the tools suggested by humanities thinkers in order to solve human problems, so-called the conflict between what man feel and what he thinks. Like many other humanities concepts, EI concept has also various definitions. Reuven Bar-On defines EI as an array of non-cognitive capabilities, competencies, and skills that influence one s ability to succeed in coping with environmental demands and pressures. Researchers define EI as the ability to perceive emotions; to access and generate emotions so as to assist thought; to understand emotions and emotional knowledge; and to reflectively regulate emotions so as to promote emotional and intellectual growth (Lyons & Schneider, 2005). In general, EI can be defined as the ability to recognize one s own and others in order to communicate effectively to achieve the best results. Following their continuing research in EI measurement and assessment, they also pointed that the following skills are the determinants of an individual s EI (Kierestead,1999 ; Cherniss, 2000; Poon Teng Fatt, 2002): 1) Identifying emotions 2) Using emotions 3) Understanding emotions 4) Regulating emotions. It should be noted that among those who first used the term emotional intelligence, Daniel Goleman (1998) is the one whose name largely linked with the term. According to his opinion, at work environment, EI is a multidimensional construct including the five following components: (Goleman, 1998; Rahim & Minors, 2003) - Self-awareness, - Self-regulation, - Motivation, - Empathy, and - Social skills. In the aforementioned classification, the first three components, according to Goleman (1998), are associated with self-management skills, and the last two are linked with interpersonal communication skills. Based on the studies, EI (or EQ) is an important factor for an individual s success, but intelligence quotient (IQ) does not play a very critical role. This, of course, does not mean that EI and IQ are the opposite of each other; rather they are distinct from one another. All of us have a combination of intelligence and emotion. Those with high IQ and very low EQ (or low IQ and high EQ) are fairly rare. Goleman has analyzed the EI in two domains, each of which include some particular indices outlined in Table 1. The domains are: 1) Personal competence: how to manage ourselves. 2) Social competence: how to manage our communications. Table 1. EI components according to Goleman. (Kierestead,1998) Personal Competence Social competence Self-awareness Empathy Self-regulation (self-control) Social skills Motivation (self-motivated) - The aforementioned components are the basis of this study. Due to the important fact that EI is an acquirable skill and has the ability to grow and develop through education, the present work aims to measure the effect of EI on the entrepreneurship tendency. According to Daniel Goleman (1998), while the current knowledge states that genes are a key participant in the development of EI, it also notes that they can be transformed through emotional, social and feeling experiences.(goleman,2003) Therefore, it can be claimed that EI somehow comes from our life experiences, i.e. nurture. EI skills are not natural talents. They are acquirable skills and can grow through training. (Goleman, 1998) Goleman has also established an optimal process for developing emotional intelligence in organizations. Outlined in Figure 1, this process consists of four phases. 1- Preparation for change: involves assessing the competencies which are most critical for organizational and individual effectiveness while convincing the workforce that improving their emotional competencies will lead to desirable outcomes. Goleman points out motivational factors might be a particular issue in this step, as emotional learning and emotional intelligence are areas which are central to a person's identity, and thus many may be resistant to being told they must change themselves as people. (Nurivandi, Midrdamadi,2010) 2- Training phase: focuses on experiential learning with repeated practice, modeling, and corrective feedback. 3- Transfer and maintenance phase: is done through social support and a supportive work environment along with policies and procedures which support the development of emotional intelligence. 4- Evaluation: is conducted to determine individual satisfaction with the training as well as to establish if the training has produced meaningful changes in on-the-job behavior (Stys & Brown, 2004). Therefore, it can be concluded 336

3 that one part of EI is associated with a person s natural talents, and the other one is acquired during life experiences. The latter can be improved by training. Preparation phase Training Phase Transfer and maintenance phase Evaluation Phase Assess the Organizations Needs Foster Positive Relationships between Trainer and Learner Assess Personal Strength and Limitations Maximize Self- Directed Change Provide Feedback with Care Set Clear Goals s Encourage Use of Skills on the Job Maximize Learner Choice Motivations Break Goals into Manageable Steps Learning Provide an Organizational Culture that Supports Learning Evaluate Improved Performance Encourage Participation Maximize Opportunity for Practice Remove Situational Constraints Link Learning Goals to Personal Values Rely on Experimental Methods Adjust Expectation Enhance Insight Gauge Readiness Prevent Relapse Entrepreneurship Figure 1. Goleman s Model of Developing Emotional Intelligence. (Stys, Brown, 2004) Entrepreneurship, as an emerging phenomenon in economy, plays an important role in economy growth and development of countries. In this era, entrepreneurship is the key player in competitive and market economy. In other words, in a dynamic economy that ideas, products and services keep changing rapidly, an entrepreneur is able to keep along with the ever-changing market conditions (Nahid, 2009). In fact, it is not an overstatement to say that entrepreneurship, creativity, and risky businesses are driven elements of the modern economy (Moghimi, 2004). Therefore, if a country cares for its economy growth, entrepreneurship development will inevitably become important. This fact implies that training and teaching students to become entrepreneurs with the ability of driving the economy can help countries, including Iran, to improve their economic growth. As stated before, this study investigates the 337

4 relationship between EI and the entrepreneurship tendency of If the relationship is significant and positive, it can be indicated that EI development of students through training can potentially activate the entrepreneurship tendency among them. This is important because not only can entrepreneurship be the driven-motor of economy but also it is a promising element to solve the unemployment dilemma of Iran s graduate, which, over the recent years, has been a major economic, social, and cultural challenge, and it is considered as one the most important threats to national security and development (Ahmadzadeh et al., 2013). Today, students and graduates require skills and abilities that help them to make value-added products, services, and process, and to compete successfully in local and world market (Norfadhilah & Norasmah, 2012). These skills and abilities can be implemented in an entrepreneurial environment. Being an entrepreneur is a job that one can plan for it, and is a vision available for those who have visualized it, to which has been referred in early definitions of entrepreneurship concept. In Leibenstein s view, an entrepreneur has the ability to achieve prosperity by avoiding other people or organizations mistakes (Khani Jezani, 2009). He also highlights that, in real world, prosperity is an exception and failure is a rule. In his opinion, an entrepreneur: a) Has the special ability to connect different markets, b) Is a market gap-filler, c) Devotes time to making organizational and structure changes, and d) Provides all factors required for producing a product and its marketing (Dunphy, 1994). The common behavioral and motivational traits of entrepreneurs are as follow: 1) initial feelings and motivations 2) serving themselves and their organization 3) interpersonal relations 4) leadership skill 5) problem solving pattern 6) organizational skills 7) communications 8) failures and mistakes 9) the ability to risk 10) market assessment 11) Risky decisions ( Lyons & Schneider,2005). Research hypotheses The primary hypothesis: There is a significant relationship between EI and entrepreneurship tendency among Secondary hypotheses: 1. there is a significant relationship between self-awareness, a component of EI, and entrepreneurship tendency among 2. There is a significant relationship between self-control, a component of EI, and entrepreneurship tendency among 3. There is a significant relationship between self-motivation, a component of EI, and entrepreneurship tendency among 4. There is a significant relationship between empathy, a component of EI, and entrepreneurship tendency among 5. There is a significant relationship between social skill, a component of EI, and entrepreneurship tendency among METHODOLOGY This study is a practical one because its results are in accordance with the plans of Iranian universities and Iran s Ministry of Science for the development of EI and entrepreneurship tendency in the academic environment. The research method is descriptive, and in nature is a correlational study which identifies the relationship between EI, as an independent variable (including self-awareness, self-control, self-motivation, empathy, and social skills) and entrepreneurship tendency, as dependent variable. Statistical sample and population The population was composed of all management alumni from different programs of University of Tehran, Farabi campus. The sample size was determined by hypothesis test for proportion, which is valid because the population was unknown. The sample size was 50 students. Realm of Subject: The main interest of this research is in management and organizational behavior management with a special focus on EI and entrepreneurship. 338

5 Realm of place: Regarding the fact that the alumni of University of Tehran, Farabi campus come from different cities, it can be said that the realm of place is all around the country. Realm of time: The realm of time is from the mid-february 2015 to the mid-june 2015, during which the data was collected by questionnaire. Data analysis method First, the characteristics and features of the EI, its components, and entrepreneurship tendency of the population were analyzed by descriptive method. Second, by using the inferential method and Spearman correlation test, primary and secondary hypotheses were tested. In addition, SPSS 22 software package was used to measure the correlation. Characteristics of the respondents RESULTS A) Gender: Table 2 shows the frequency distribution of respondents according to their gender. Table 2. Frequency distribution of respondents according to their gender. No. Gender Frequency Percentage 1 Male 29 58% 2 Female 21 42% Total % B) Age: Table 3 gives the frequency distribution of respondents according to their age. Table 3. Frequency distribution of respondents according to their age No. Age Frequency Percentage (%) 1 < > Total C) Level of education: Table 4 indicates the frequency distribution of respondents by their level of education. Table 4. Frequency distribution of respondents by their level of education. No. Degree Frequency Percentage (%) 1 Bachelor Master Ph.D Total Statistical analysis and hypotheses investigation: The first secondary hypothesis: There is a significant relationship between self-awareness and entrepreneurship tendency. Table 5. Significant relationship between self-awareness and entrepreneurship tendency The null hypothesis H0 states that the correlation coefficient between two variables, i.e. EI and entrepreneurship tendency, is zero, but the alternative hypothesis H1 states that the correlation coefficient is non-zero. These hypotheses were tested with a significance level (α) of In this case, the Spearman correlation coefficient is 0.234, which is less than α. Thus, the null hypothesis H0 is rejected. In other words, the Spearman correlation coefficient (0.234) is an indicator of direct correlation between variables. This means that the alternative hypothesis H1 is verified, and it can be concluded that there is a significant relationship between self-awareness and entrepreneurship tendency. The second secondary hypothesis: There is a significant relationship between self-control and entrepreneurship tendency. 339

6 Table 6. Significant relationship between self-control and entrepreneurship tendency In this case, the Spearman correlation coefficient is 0.295, which is less than α. Thus, the null hypothesis H0 is rejected. In other words, the Spearman correlation coefficient (0.234) is an indicator of direct correlation between variables. This means that the alternative hypothesis H1 is verified. Thus, there is a significant relationship between self-control and entrepreneurship tendency. The third secondary hypothesis: There is a significant relationship between self-motivation and entrepreneurship tendency. Table 7. Significant relationship between self-motivation and entrepreneurship tendency In this case, the Spearman correlation coefficient is 0.269, which is less than α. Then, it can be concluded that there is a significant relationship between self-motivation and entrepreneurship tendency. The fourth secondary hypothesis: There is a significant relationship between empathy and entrepreneurship tendency. Table 8. Significant relationship between empathy and entrepreneurship tendency In this case, the Spearman correlation coefficient is 0.220, which is less than α. Hence, it can be concluded that there is a significant relationship between empathy and entrepreneurship tendency. The fifth secondary hypothesis: here is a significant relationship between social skills and entrepreneurship tendency. Table 9. Significant relationship between social skills and entrepreneurship tendency In this case, the Spearman correlation coefficient is 0.227, which is less than α. It can be concluded that there is a significant relationship between social skills and entrepreneurship tendency. CONCLUSION Regarding the statistical analysis and reasons presented in the previous sections, it can be argued that all the hypotheses were confirmed. Therefore, it can be said that there is a direct, significant correlation between EI and entrepreneurship tendency. Accordingly, in order to meet the requirement of resistive economy notified by Iran s supreme leader, providing EI development plans for students seems a must since there is a positive, direct relationship between EI and entrepreneurship tendency. REFERENCES Ahmadzadeh M, Salarzerehi H, Yaghoubi N, The Study and Analyzing Effectiveness of Entrepreneurship Education in the Field of Entrepreneurship by Using of Satisfaction Matrix Model. Quarterly Scientific-Research General Management Research. 22: Cherniss C, Emotional Intelligence: What it is And Why It Matters? Annual Meeting Of The Society For Industrial And Organizational Psychology,New Orland.LA. Dunphy S, Herbing P, Golden J, The relationship of entrepreneurial and innovation success, marketing intelligence & planning. 12(9): Goleman D, What makes a leader?. Harvard Business. 76(6): Goleman D, Emotional Intelligence. Danesh Publication, Tehran, Iran. 340

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