PROBLEMS ENCOUNTERED BY THE FIRST GENERATION ENTREPRENEURS AN ANALYSIS

Transcription

1 CHAPTER V PROBLEMS ENCOUNTERED BY THE FIRST GENERATION ENTREPRENEURS AN ANALYSIS 5.1 INTRODUCTION This chapter focuses the analysis on the opinion of the first generation entrepreneurs on the various problems encountered by them while entering into the domain of entrepreneurship. It also covers the expectations of the first generation entrepreneurs to perform well in entrepreneurship by using the Chi Square Test and the Factor Analysis to test the hypotheses then and there. Percentage analysis is also used to explain the depth of variables playing the role for the development of the entrepreneurial culture values of the respondents. 5.2 OPINION ON THE PROBLEMS WITH REFERENCE TOCAPITAL The researcher brings to light problems encountered by the respondents in the area of capital first. It is the base to start the enterprise. Hence, the researcher had thrown several opinion statements through the questionnaire and brings them to light. Based on the five scale opinion statements the researcher had applied factor analysis method to find out the relativity significance between the given variables.

2 PROBLEM FACTORS ENCOUNTERED WITH REFERENCE TO ADEQUATE CAPITAL In this section, an attempt has been made to identify the factors which influenced the first generation entrepreneurs to identify their skills. For this, 12 statements relating to the need of adequate capital to strengthen the business still better by the first generation entrepreneurs have been selected to identify the significant dimensions of the factors, with the help of factor analytical technique. Analytical Framework to test the factors: The technique adopted to identify and analyse the factors influencing the first generation entrepreneurs performance is factor analysis. 1 The principal factor analysis method is mathematically satisfying because it yields a unique solution to a factor problem. Its major solution feature is the extraction of maximum amount of variation as each factor is calculated. In other words, the first extracts the most variance and so on. 2 Most of the analytical methods produce results in a form that is difficult or impossible to interpret. Thurston argued that it was necessary to rotate factor matrices if one wanted to interpret them adequately. 3

3 190 Thurston pointed out that original factor matrices are arbitrary in the sense that an infinite number of reference frames (axes) can be found to reproduce any given R Matrix. 4 There are several methods available for factor analysis. But the principal factor method with orthogonal variance rotation is mostly used and widely available in factor analysis computer programme. Further orthogonal rotations maintain the independence of factors that is, the angles between the axes are kept at 90 degrees. One of the final outcomes of a factor analysis is called rotated factor matrix, a table of coefficient that expresses the ratios between the variable and the factors that have been prepared. The sum of squares of the factor loading of variable is called communalities (h 2 ). The communality (h 2 ) of a factor is its common factor variance. The factors with factor loadings of 0.5 or greater are considered as significant factors. This limit is chosen because it had been judged that factors with less than 50 per cent common variation with the rotated factor pattern are too weak to report. In the present study, the principal factor analysis method with orthogonal varimax rotation is used to identify the factors influencing the overall skills and ability of the entrepreneurs in the study area.

4 191 Factor analysis was done with 12 variables (OPINION) Orthogonal Varimax Rotation for the opinion of the respondents (sample first generation entrepreneurs) towards the previous employment of the respondents have an impact on their behavioural attitudes in the study area. The rotated factor matrix for the variables relating to the adequate availability of capital and entrepreneurship attitude of the respondents in the study is given as follows.

5 192 Table 5.1 ROTATED FACTOR MATRIXES FOR THE ADEQUACY OF CAPITAL TO START ENTERPRISE Sl. No. Opinion Variables Rotated Factor Loadings F1 F2 F3 F4 F5 H 2 1. Inadequate Capital Complicated Bank procedures Shortterm loan repayment burden Financial Management Knowledge Hope to find funds for capital Effective use of Capital Feel to have adequate capital Loan formalities simple Have Capital Have Confidence Enough Capital Enough Strength Sources to borrow funds as capital Sufficient Own Capital Eigen values Percentage of variation Cumulative percentage

6 193 From Table 5.1, it is observed that the first factor is designed as CAPITAL CRISIS on the basis of the loaded variables. In the first factor four variables in this category are significant with high factor loading. It indicates that among the various performance scales, Inadequate Capital, Complicated Bank procedures. Shortterm loan repayment burden and Financial Management Lack of Knowledge are important attributes in this category. Thus, CAPITAL CRISIS is identified as an important factor to influence the entrepreneur to face problems in his enterprise in Madurai city. The second factor is narrated as FIND FUNDS on the basis of the loaded variables. Two variables in this category are important with high factor loading. It indicates that among the various performance scales, Hope to find funds for capital Effective use of Capital are important attributes in this category. Thus, it is indicating entrepreneurs to find adequate capital to run the enterprise will be a smooth one to the first generation entrepreneurs in the study area. The third factor is identified as SELFCONFIDENCE, on the basis of the loaded variables. Three variables in this category are important with high factor loading. It indicates that among the various performance scales, Feel to have adequate capital, Loan formalities simple and Have Capital Have Confidence are important attributes in this category. Thus, the

7 194 SELFCONFIDENCE influences the first generation entrepreneurs to prefer the entrepreneurial activities and it is identified by the researcher in the study area. The fourth factor is identified as CAPITAL ENERGY, on the basis of the loaded variables. Two variables in this category are playing significant role with high factor loading. It indicates that among the various performance scales, Enough Capital Enough Strength and Sources to borrow funds as capital, are the important attributes in this category. Thus, the attribute CAPITAL ENERGY influences the first generation entrepreneurs to start the enterprise in the study area. The fifth factor is identified as OWN FUND, on the basis of the loaded variables. Only one variable in this category is playing significant role with high factor loading. It indicates that among the various performance scales, Sufficient Own Capital is the important attribute in this category. Thus, the OWN FUND influence the first generation entrepreneurs to get into business and it is identified by the researcher in the study area.

8 195 It is concluded from the above factor analysis that the following factors are identified to influence the first generation entrepreneurs with reference to the adequacy of capital in the study area: 1. CAPITAL CRISIS 2. FIND FUNDS 3. SELFCONFIDENCE 4. CAPITAL ENERGY 5. OWN FUND 5.4 OPINION ON THE LOCATIONAL BARRIERS Table 5.2 depicts the barriers faced by the first generation entrepreneurs in the study area Madurai city. They are in a position to invest more on this aspect to avail the location advantages. Due to poor contribution they are not able to invest more and hence the barriers with reference to location is faced by them is explained in table 5.2.

9 196 Table 5.2 OPINION OF THE RESPONDENTS ON THE LOCATIONAL ADVANTAGES ACCORDING TO THE CLIMATE CATEGORIES Climate categories Nearness to Raw material Nearness to skilled labours Nearness to cheap land Nearness to Power District Headquarter Access to Highways Access to Railways Access to Airways Access to Seaways Nearness to Govt. offices Other Facilities Native Place All the above Percentage Manufacturing Industry Type of industry Trading industry Service Industry Total TOTAL Source: Primary Data It is inferred from Table 5.2 that 5.7 percent of the total respondents are benefited with the location nearness to raw material and encounter with all other problems and cost becomes more to come out such barriers. At the same time 3.7 percent of the respondents have enjoyed benefit of nearness to skilled labours only and met with problems with other factors, 15.3 percent of the respondents only

10 197 have availed the advantage of nearness to cheap land, another 15.3 percent of them are with nearness to power, 10.7 percent of them are with district headquarters, 4.7 percent of the respondents are with access to highways, 10.7 percent of them are with access to railways, 12.0 percent of the total sample respondents are with access to airways advantages. But only 10.3 percent of the respondents are benefited with the Locational advantages by seeing others. It shows that the remaining 89.7 percent of them are affected in either one or multivarious aspects as given in the above table and these become their problems. 5.5 PROBLEM FACTORS ENCOUNTERED WITH REFERENCE TO THE LOCATION In this section, an attempt has been made to identify the factors which influenced the first generation entrepreneurs to identify their skills. For this, 12 statements relating to the location for the success of the business of the first generation entrepreneurs have been selected to identify the significant dimensions of the factors, with the help of factor analytical technique.

11 198 In the present study, the principal factor analysis method with orthogonal varimax rotation is used to identify the factors influencing the overall skills and ability of the entrepreneurs in the study area. Factor analysis was done with 12 variables (OPINION) Orthogonal Varimax Rotation for the opinion of the respondents (sample first generation entrepreneurs) towards the location for the enterprise of the respondents have an impact on their behavioural attitudes in the study area. The rotated factor matrix for the variables relating to the Locational advantages and entrepreneurship attitude of the respondents in the study is given as follows.

12 199 Table 5.3 ROTATED FACTOR MATRIXES FOR THE LOCATIONAL ADVANTAGES TO START ENTERPRISE Sl. No. Opinion Variables Rotated Factor Loadings F1 F2 F3 F4 h 2 1. Location Raw Material access Location Prestige to owner Location Dumping of fund in waste Location Main factor Location next Quality First Location City access Location at cheap land Location brings apt labours Location Future Growth aspect Location No significance Location Control the costs Location business no relation Eigen values Percentage of variation Cumulative percentage From Table 5.3, it is observed that the first factor is designed as RAW MATERIAL CENTERED on the basis of the loaded variables. In the first

13 200 factor three variables in this category are significant with high factor loading. It indicates that among the various performance scales, Location Raw Material access, Location Prestige to owner and Location Dumping of fund in waste are important attributes in this category. Thus, RAW MATERIAL CENTERED is identified as an important factor to influence the entrepreneur to face problems in bringing the raw material in Madurai city. The second factor is narrated as COMPROMISE WITH QUALITY on the basis of the loaded variables. Two variables in this category are important with high factor loading. It indicates that among the various performance scales, Location Main factor, Location next Quality First and Location City accesses, are important attributes in this category. Thus, it is indicating entrepreneurs to maintain quality in the production or services rather than finding a location such things will protect the enterprise and the Locational advantages factors will not affect the first generation entrepreneurs in the study area. The third factor is identified as EXPANSION BASED, on the basis of the loaded variables. Three variables in this category are important with high factor loading. It indicates that among the various performance scales, Location at cheap land, Location brings apt labours, Location Future Growth aspect and Location No significance are important attributes in this category. Thus, the EXPANSION BASED influences the first generation entrepreneurs to

14 201 prefer the location to do entrepreneurial activities, is identified by the researcher in the study area. The fourth factor is identified as LOCATION LEAST FACTOR, on the basis of the loaded variables. Only one variable in this category is playing significant role with high factor loading. It indicates that among the various performance scales, Location Control the costs and Location business no relation are the important attribute in this category. Thus, the LOCATION LEAST FACTOR influences the first generation entrepreneurs to get into business and it is identified by the researcher in the study area. It is concluded from the above factor analysis that the following factors are identified to influence the first generation entrepreneurs with reference to the Locational advantages in the study area: 1. RAW MATERIAL CENTERED 2. COMPROMISE WITH QUALITY 3. EXPANSION BASED 4. LOCATION LEAST FACTOR

15 OPINION ON THE LABOUR PROBLEMS Table 5.4, 5.5, 5.6 and 5.7 show the problems encountered by the first generation entrepreneurs in the study area Madurai city with reference to various types of labour force available who are called skilled, semiskilled, unskilled, and management persons. They were in a position to depend on the labour force required for their enterprise as follows. Table 5.4 AVAILABILITY OF SKILLED LABOUR FORCE IN THE ENTERPRISES OF THE RESPONDENTS Number of Skilled Labours Manufact uring Industry Type of industry Trading industry Service Industry Total Percentage Below Labours Labours Labours Above 20 Labours Total Source: Primary Data Table 5.4 says that in all the respondents enterprises, the availability of skilled labour force is there and it does not cross a maximum of 34.0 percent

16 203 Table 5.5 AVAILABILITY OF SEMISKILLED LABOUR FORCE IN THE ENTERPRISES OF THE RESPONDENTS Number of Semiskilled Labours Manufact uring Industry Type of industry Trading industry Service Industry Total Percentage Below Labours Labours Labours Above 20 Labours Total Source: Primary Data Table 5.5 expresses that in all the enterprises of the first generation entrepreneurs the availability of semiskilled labour force is present but at the same time the force is limited to a maximum of 33.7 percent.

17 204 Table 5.6 AVAILABILITY OF UNSKILLED LABOUR FORCE IN THE ENTERPRISES OF THE RESPONDENTS Number of Unskilled Labours Manufac turing Industry Type of industry Trading industry Service Industry Total Percentage Below Labours Labours 1520 Labours Above 20 Labours Total Source: Primary Data The usage of unskilled labour force is prevalent in less numbers but 79 percentage of the force belongs to this category. Extracting the skills from this labour group is tough and hence the first generation entrepreneurs are encountered with labour problems in their enterprises.

18 205 Table 5.7 AVAILABILITY OF MANAGEMENT PERSONS IN THE ENTERPRISES OF THE RESPONDENTS Number of Management Persons Manufac turing Industry Type of industry Trading industry Service Industry Total Percentage Below Labours Labours 1520 Labours Above 20 Labours Total Source: Primary Data It is inferred from the above Tables from 5.4 to Table 5.7 underutilisation of the skilled and semiskilled labour force and overutilisation of unskilled and management persons are found. The researcher had identified that the availability of semiskilled and skilled labour force would have been increased rather than the input of the unskilled and management person in the small scale industries of the selected sample first generation entrepreneurs enterprises.

19 PROBLEMS (FACTORS) ENCOUNTERED BY THE FIRST GENERATION ENTREPRENEURS WITH REFERENCE TO LABOUR FORCE In this section, an attempt has been made to identify the factors which were influenced the first generation entrepreneurs to identify their skills. For this, 12 statements relating to the labour problems faced by the first generation entrepreneurs have been selected to identify the significant dimensions of the factors, with the help of factor analytical technique. In the present study, the principal factor analysis method with orthogonal varimax rotation is used to identify the factors influencing the overall skills and ability of the entrepreneurs in the study area. Factor analysis was done with 12 variables (OPINION) Orthogonal Varimax Rotation for the opinion of the respondents (sample first generation entrepreneurs) towards the labour problems faced by the first generation entrepreneurs, have an impact on their behavioural attitudes in the study area. The rotated factor matrix for the variables relating to the Labour problems and entrepreneurship attitude of the respondents in the study is given as follows.

20 207 Table 5.8 ROTATED FACTOR MATRIXES FOR THE LABOUR PROBLEMS FACED BY THE RESPONDENTS Sl. No. Opinion Variables Rotated Factor Loadings F1 F2 F3 F4 h 2 1. Labour Migration Nonavailability of skilled persons Lack of HRM Knowledge Nonavailability experienced labours Labour is not a problem Nonavailability of labour at low cost Noncooperation of labours Identifying the apt labour is a problem Inexperienced labours need training High Labour cost Unsolvable labour problems Nonloyal labours Eigen values Percentage of variation Cumulative percentage

21 208 From Table 5.8, it is observed that the first factor is designed as LABOUR FLOATING AND LACK OF KNOWLEDGE on the basis of the loaded variables. In the first factor three variables in this category are significant with high factor loading. It indicates that among the various performance scales, Labour Migration, Nonavailability of skilled persons and Lack of HRM Knowledge are important attributes in this category. Thus, LABOUR FLOATING AND LACK OF KNOWLEDGE is identified as an important factor that influences the entrepreneur to face problems in bringing the required labour to retain them for his success, in Madurai city. The second factor is narrated as NONAVAILABILITY OF APT LABOUR on the basis of the loaded variables. Two variables in this category are important with high factor loading. It indicates that among the various performance scales, Nonavailability experienced labours, Labour is not a problem, Nonavailability of labour at low cost and Noncooperation of labourers, are important attributes in this category. Thus, it is indicating entrepreneurs to maintain quality in the production or services with the help of the labourers, but he finds problem in search of such labour force with reasonable cost to his enterprise and the Labour problems influenced by the various factors affecting the first generation entrepreneurs in the study area are given.

22 209 The third factor is identified as HIGH COST LABOUR, on the basis of the loaded variables. Three variables in this category are important with high factor loading. It indicates that among the various performance scales, Identifying the apt labour is a problem, Inexperienced labours need training and High Labour cost are important attributes in this category. Thus, the HIGH COST LABOUR that influences the first generation entrepreneurs and it is identified by the researcher in the study area. The fourth factor is identified as UNSOLVABLE LABOUR PROBLEMS, on the basis of the loaded variables. Only two variables in this category is playing significant role with high factor loading. It indicates that among the various performance scales, Unsolvable labour problems and Nonloyal labours are the important attributes in this category. Thus, the researcher in the study area identifies the UNSOLVABLE LABOUR PROBLEMS that influences the first generation entrepreneurs to get into business and it. It is concluded from the above factor analysis that the following factors are identified to influence the first generation entrepreneurs with reference to the Locational advantages in the study area:

23 LABOUR FLOATING AND LACK OF KNOWLEDGE 2. NONAVAILABILITY OF APT LABOUR 3. HIGH COST LABOUR 4. UNSOLVABLE LABOUR PROBLEMS 5.8 PROBLEMS (FACTORS) ENCOUNTERED BY FIRST GENERATION ENTREPRENEURS WITH REFERENCE TO MARKETING In this section, an attempt has been made to identify the factors which influenced the first generation entrepreneurs to identify their skills. For this, 12 statements relating to the marketing problems faced by the first generation entrepreneurs have been selected to identify the significant dimensions of the factors, with the help of factor analytical technique. In the present study, the principal factor analysis method with orthogonal varimax rotation is used to identify the factors influencing the overall skills and ability of the entrepreneurs in the study area. Factor analysis was done with 12 variables (OPINION) Orthogonal Varimax Rotation for the opinion of the respondents (sample first generation entrepreneurs) towards the marketing problems faced by the first generation entrepreneurs, have an impact on their behavioural attitudes in the study area.

24 211 The rotated factor matrix for the variables relating to the Marketing problems and entrepreneurship attitude of the respondents in the study is given as follows. Sl. No. Table 5.9 ROTATED FACTOR MATRIXES FOR THE MARKETING PROBLEMS FACED BY THE RESPONDENTS Rotated Factor Loadings Opinion Variables F1 F2 F3 h 2 1. Problemless Marketing Transformation to idle due to poor marketing Marketing personnel problems Involves with high advertisement cost Tough competition with large, MNC Exclusive market for SMEs Lack of Marketing Management Knowledge Poor marketing strategy Lack of Govt. support to FGE Extra attraction is required to push Brand variety Retail/Rural marketing by large, MNCs Eigen values Percentage of variation Cumulative percentage

25 212 From Table 5.9, it is observed that the first factor is designed as EASY MARKETING on the basis of the loaded variables. In the first factor six variables in this category are significant with high factor loading. It indicates that among the various performance scales, Problemless Marketing, Transformation to idle due to poor marketing, Marketing personnel problems, Involves with high advertisement cost, Tough competition with large, MNC and Exclusive market for SMEs are important attributes in this category. Thus, EASY MARKETING is required as an important factor to influence the first generation entrepreneurs to face problems in marketing their commodities/services for their success, in Madurai city. The second factor is narrated as MARKETING KNOWLEDGE on the basis of the loaded variables. Four variables in this category are important with high factor loading. It indicates that among the various performance scales, Lack of Marketing Management Knowledge, Poor marketing strategy, Lack of Govt. support to FGE and Extra attraction to push are important attributes in this category. Thus, it is indicating that entrepreneur maintains quality in the production or service with the help of the labourers, but he finds problem in search of knowledge, to market his commodity which influences the first generation entrepreneurs in the study area.

26 213 The third factor is identified as MARKET COMPETENCY, on the basis of the loaded variables. Two variables in this category are important with high factor loading. It indicates that among the various performance scales, Brand variety and Retail/Rural marketing by large, MNCs are important attributes in this category. Thus, the MARKET COMPETENCY which influences the first generation entrepreneurs, is identified by the researcher in the study area. It is concluded from the above factor analysis that the following factors are identified to influence the first generation entrepreneurs with reference to the Locational advantages in the study area: 1. EASY MARKETING 2. MARKETING KNOWLEDGE 3. MARKET COMPETENCY 5.9 OWNERSHIP OF THE ENTERPRISES OF THE RESPONDENTS The researcher has thrown the light on the ownership factor because there is a possibility of facing problems at the time of registration of the enterprises as per the government norms. The first generation entrepreneurs are new to this domain and hence their opinion is sought regarding the methodologies and applications of formalities available in such processes. Before to that it is essential

27 214 to know the type of ownership according to that the registration formalities differ and the weightage of problems will vary according to the nature of ownership. Table 5.10 gives the details of ownership of the enterprises run by the respondents. Table 5.10 DETAILS OF TYPE OF OWNERSHIP OF THE RESPONDENTS ENTERPRISE Ownership Manufac turing Industry Type of industry Trading industry Service Industry Total Percentage Sole Proprietorship Partnership Joint Stock Company Total Source: Primary Data It is understood from Table 5.10, that 91.3 percent out of the total 300 respondents are operating the ownership under sole proprietorship and the remaining 08.7 percent respondents are running their enterprises under partnership type. But no one is coming under the joint stock company pattern among the selected respondents in the study area.

28 PROBLEMS (FACTORS) ENCOUNTERED WITH REFERENCE TO REGISTRATION FORMALITIES In this section, an attempt has been made to identify the factors which influenced the first generation entrepreneurs to identify their skills. For this, 12 statements relating to the registration formalities for the enterprises of the first generation entrepreneurs have been selected to identify the significant dimensions of the factors, with the help of factor analytical technique. In the present study, the principal factor analysis method with orthogonal varimax rotation is used to identify the factors influencing the overall skills and ability of the entrepreneurs in the study area. Factor analysis was done with 12 variables (OPINION) Orthogonal Varimax Rotation for the opinion of the respondents (sample first generation entrepreneurs) towards the enterprise registration formalities faced by the first generation entrepreneurs, have an impact on their behavioural attitudes in the study area. The rotated factor matrix for the variables relating to fulfill the registration formalities of the entrepreneurs enterprises and entrepreneurship attitude of the respondents in the study is given as follows.

29 216 Table 5.11 ROTATED FACTOR MATRIXES FOR THE ENTERPRISE REGISTRATION FORMALITIES FACED BY THE RESPONDENTS Sl. No. Opinion Variables Rotated Factor Loadings F1 F2 F3 h 2 1. Special attention to FGEs Control on interference of Govt. officials Avoidance of Red Tapism Good follow up measures Quick processing of legal formalities Removing Complicated formalities Flexibility of online registration Grievance Day / Special Day to FGE Relaxing the hard and fast rules Poor response in Govt. processes Appreciable Govt. support Appreciable support by DIC Eigen values Percentage of variation Cumulative percentage From Table 5.11, it is observed that the first factor is designed as GOVERNMENT SUPPORT on the basis of the loaded variables. In the first factor seven variables in this category are significant with high factor loading. It

30 217 indicates that among the various performance scales, Special attention to FGEs, Control on interference of Govt. officials, Avoidance of Red Tapism, Well follow up measures, Quick processing of legal formalities, Removing Complicated formalities, and Flexibility of online registration, are important attributes in this category. Thus, GOVERNMENT SUPPORT is required as an important factor to influence the first generation entrepreneurs to face problems in registration of enterprises, in Madurai city. The second factor is narrated as VOLUNTARY SUPPORT on the basis of the loaded variables. Three variables in this category are important with high factor loading. It indicates that among the various performance scales, Grievance Day / Special Day to FGE, Relaxing the hard and fast rules and Poor response in Govt. processes, are important attributes in this category. Thus, it indicates that entrepreneurs get the help from the government sector at the maximum voluntarily, but he finds problem in availing such services affecting the first generation entrepreneurs in the study area. The third factor is identified as LIFELONG SUPPORT, on the basis of the loaded variables. Two variables in this category are important with high factor loading. It indicates that among the various performance scales, Appreciable Govt. support and Appreciable support by DIC are important attributes in this category. Thus, the registration formalities influence variables

31 218 that the first generation entrepreneurs are identified by the researcher in the study area. It is concluded from the above factor analysis that the following factors are identified to influence the first generation entrepreneurs with reference to the Locational advantages in the study area: 1. GOVT. SUPPORT 2. VOLUNTARY SUPPORT 3. LIFELONG SUPPORT 5.11 PROFIT/LOSS POSITION OF ENTERPRISES The researcher made an attempt to find out whether any significant relationship between the profit/loss of the enterprises for a period of six years and the ability of the first generation entrepreneurs to run the enterprises with success or not. The researcher felt that the position of profit/loss of the enterprises would give motivation to the first generation entrepreneurs to continue further their enterprising activities in a cheerful way rather than closing of it. The profit/loss of the enterprise is also playing a significant role to run the organisation in a successful way and hence this factor has been included to know its impact on the ability of the first generation entrepreneurs and to measure the activities of them.

32 219 The following table will present the details of employment carried out by the family members of the first generation entrepreneurs. Table 5.12 STATEMENT SHOWING THE AVERAGE OF PROFIT/LOSS POSITION OF THE ENTERPRISES EARNED FROM 2004 TO 2009 Variable Respondents representing Manufact uring Industry Trading industry Service Industry Total Percentage Profit Loss Total Source: Primary Data HYPOTHESIS There is no significant relationship between the profit/loss of the enterprises for a period of six years and the ability of the first generation entrepreneurs to run the enterprises.

33 220 To find out whether there is any significant relationship between the profit/loss of the enterprises for a period of six years and the ability of the first generation entrepreneurs, the ChiSquare test has been applied. It is identified that the minimum expected frequency is RESULT Calculated Value of ChiSquare (χ 2 ) (O E) 2 = E = Degree of freedom (V) = (r 1) (c 1) = 2 The Table value for 2 Degree of freedom at 5% level significance = 5.99 The computed value of ChiSquare (χ 2 ) is much smaller than that of the Table value of ChiSquare (χ 2 ) Therefore the hypothesis profit/loss of the enterprises for a period of six years and the ability of the first generation entrepreneurs to run the enterprises do not have any impact on each other is an unbiased one and hence is accepted for 2 degree of freedom at 5% level of significance.

34 221 Thus it is inferred that there is no significant relationship between the profit/loss of the enterprises for a period of six years and the ability of the first generation entrepreneurs to run the enterprises. It is realized that there is no impact of profit/loss of the enterprises for a period of six years and the ability of the first generation entrepreneurs to run the enterprises FACTORS INFLUENCING THE OTHER GENERAL PROBLEMS ENCOUNTERED BY THE FIRST GENERATION ENTREPRENEURS In this section, an attempt has been made to identify the factors which influenced the first generation entrepreneurs to identify their skills. For this, 12 statements relating to the other general problems encountered by the first generation entrepreneurs have been selected to identify the significant dimensions of the factors, with the help of factor analytical technique. In the present study, the principal factor analysis method with orthogonal varimax rotation is used to identify the factors influencing the overall skills and ability of the entrepreneurs in the study area. Factor analysis was done with 12 variables (OPINION) Orthogonal Varimax Rotation for the opinion of the respondents (sample first generation entrepreneurs) towards the other general problems encountered by the first generation entrepreneurs, have an impact on their behavioural attitudes in the study area.

35 222 The rotated factor matrix for the variables relating to other problems encountered by the first generation entrepreneurs and entrepreneurship attitude of the respondents in the study is given as follows. Sl. No. Table 5.13 ROTATED FACTOR MATRIXES FOR THE OTHER GENERAL PROBLEMS ENCOUNTERED BY THE RESPONDENTS Opinion Variables Rotated Factor Loadings F1 F2 F3 h 2 1. EDP Activities improvement Total Govt. support Contribution of Financial Institutions timely Assistance Financial assistances against educational certificates Poor service by Banks Special consideration to FGEs All time support from Govt Active Trade Associations Cumbersome procedures Need of Education and experience to Entrepreneurship Poor subsidy support from Govt Learning out of experience affects Eigen values Percentage of variation Cumulative percentage

36 223 From Table 5.13, it is observed that the first factor is designed as GOVERNMENT NORMS/TRAINING/FINANCE on the basis of the loaded variables. In the first factor three variables in this category are significant with high factor loading. It indicates that among the various performance scales, EDP Activities improvement, Total Govt. support, and Contribution of Financial Institutions timely Assistance are important attributes in this category. Thus, GOVT. NORMS/TRAINING/FINANCE is required as an important factor to influence the first generation entrepreneurs in their walk of business life, in Madurai city. The second factor is narrated as FINANCE SUPPORT on the basis of the loaded variables. Five variables in this category are important with high factor loading. It indicates that among the various performance scales, Financial assistances against educational certificates, Poor service by Banks, Special consideration to FGEs, All time support from Govt., and Active Trade Associations, are important attributes in this category. Thus, it indicates entrepreneurs to get funds or financial assistance to run their enterprises, but he finds problem in availing such services affecting, them in the study area. The third factor is identified as PRACTICAL EXPOSURE, on the basis of the loaded variables. Two variables in this category are important with high factor loading. It indicates that among the various performance scales, Poor

37 224 subsidy support from Govt. and Learning out of experience affects attributes in this category. Thus, the PRACTICAL EXPOSURE which influences the first generation entrepreneurs, is identified by the researcher in the study area. It is concluded from the above factor analysis that the following factors are identified to influence the first generation entrepreneurs with reference to the advantages in the study area: 1. GOVT. NORMS/TRAINING/FINANCE 2. FINANCE SUPPORT 3. PRACTICAL EXPOSURE 5.13 FACTORS INFLUENCING MUCH, TO START ENTERPRISES BY THE FIRST GENERATION ENTREPRENEURS In this section, an attempt has been made to identify the factors which influenced the first generation entrepreneurs to identify their skills. For this, 12 statements relating to the much influencing factors for the commencement of enterprises by the first generation entrepreneurs have been selected to identify the significant dimensions of the factors, with the help of factor analytical technique. In the present study, the principal factor analysis method with orthogonal varimax rotation is used to identify the factors influencing the overall skills and ability of the entrepreneurs in the study area.

38 225 Factor analysis was done with 12 variables (OPINION) Orthogonal Varimax Rotation for the opinion of the respondents (sample first generation entrepreneurs) towards the much influencing factors to start enterprises by the first generation entrepreneurs, have an impact on their behavioural attitudes in the study area. The rotated factor matrix for the variables relating to the influencing factors to turn as entrepreneurs by the respondents in the study is given as follows.

39 226 Sl. No. Table 5.14 ROTATED FACTOR MATRIXES FOR THE MUCH INFLUENCING FACTORS TO BE A FIRST GENERATION ENTREPRENEUR Rotated Factor Loadings Opinion Variables F1 F2 F3 F4 h 2 1. Unemployment Enterprising Nature Diversification of employment Ambition/Goal in life Economic factors Success stories of entrepreneurs Courageous to face/take risk Threats available in previous employment To use idle funds ideally To attain social status To make use his own Knowledge For social development Property inherited/acquired Eigen values Percentage of variation Cumulative percentage From Table 5.14, it is observed that the first factor is designed as INTERNAL FACTORS on the basis of the loaded variables. In the first factor

40 227 four variables in this category are significant with high factor loading. It indicates that among the various performance scales, Unemployment, Enterprising Nature, Diversification of employment and Ambition/Goal in life, are important attributes in this category. Thus, PERSONAL CHARACTER is identified as an important factor to influence the respondent to take a new avatar as an entrepreneur and become as first of its kind in his family, in Madurai city. The second factor is narrated as EXTERNAL FACTORS on the basis of the loaded variables. Five variables in this category are important with high factor loading. It indicates that among the various performance scales, Economic factors, Success stories of entrepreneurs, Courageous to face/take risk, Threats available in previous employment, and To use idle funds ideally, are important attributes in this category. Thus, it is indicating respondents to get ready for a paradigm shift from individual to entrepreneur to overcome the problems which are influenced by various above factors, affecting the first generation entrepreneurs in the study area. The third factor is identified as SOCIAL FACTORS, on the basis of the loaded variables. Two variables in this category are important with high factor loading. It indicates that among the various performance scales, To attain social statuses and To make use his own Knowledge for social development are important attributes in this category. Thus the SOCIAL FACTORS also

41 228 influences the first generation entrepreneurs and it is identified by the researcher in the study area. The fourth factor is identified as FAMILY FACTOR, on the basis of the loaded variables. Only one variable in this category is playing significant role with high factor loading. It indicates that among the various performance scales, Property inherited/acquired is the important attribute in this category. Thus, the FAMILY FACTOR that influences the first generation entrepreneurs to get into business, is also identified by the researcher in the study area. It is concluded from the above factor analysis that the following factors are identified to influence the first generation entrepreneurs with reference to the Locational advantages in the study area: 1. INTERNAL FACTORS 2. EXTERNAL FACTORS 3. SOCIAL FACTORS 4. FAMILY FACTORS

42 SUMMARY The researcher has identified in this chapter that the development of entrepreneurial culture in the targeted group involves various stages as discussed above. Besides the imparting of such culture the entrepreneurs are still facing further problems continuously. In the small scale industries the entrepreneurs are already facing these problems and hence the small scale industries are becoming sick. In this situation the same problems are encountered by the new entrepreneurs or first generation entrepreneurs they will be dejected out of their own activities. As a result of it, the possibility of directing more youngsters into entrepreneurship arena will be affected. Hence, this attempt has been made by the researcher to bring out the hidden problems faced by the first generation entrepreneurs in the small scale industries in Madurai city. Although the entrepreneurs were motivated or influenced by various factors as discussed in the previous chapter, they are encountered with the problems in the angle of, Capital, Labour, Location, Marketing, Registration formalities and the like. Entrepreneurs will be affected more till the removable of these barriers which are prevalent in these aspects in the study area. From the analysis attempted in this chapter by the researcher it is understood that the above said all factors are from the environment; particularly the external environment which is dynamic. It keeps on changing and affects different organisations to a varying extent. The impact of environment on the first

43 230 generation entrepreneurs depends largely on the degree to which the entrepreneurs depend on the environment and organizational response to environmental changes. All the factors outside and inside (individuals, groups, funds, finance, procedures, rules policies and the like) an entrepreneur interact and affect the performance of the entrepreneurs. Entrepreneurship is environmentally determined. The most important essential for entrepreneurial growth is the presence of the favourable business environment. A healthy business environment requires active social and cultural behaviour of the people, efficient economic conditions, helpful and motivating Government policies and the like. When environment mitigates entrepreneurship it must be modified. Entrepreneurship is a question of behaviour, policies and practices rather than personality. In order to be a successful entrepreneur, what is needed is willingness to learn, to work hard persistently, and to exercise selfdiscipline, to adopt and apply the right policies and practices. An entrepreneurial project requires right relationship, right rewards and right staffing systems and this is the expectation of the first generation entrepreneurs of the study area.

44 231 END NOTES 1. Fred N. Kerlinger, Method of Factor Analysis, Foundation of Behavioural Research, Holt Rinchart Winston Inc., New York, 1973, pp Harry H. Harman, Modern Factor Analysis, The University of Chicago Press, Chicago, 1967, pp L. Thurston and E. Chava, The Measurement Attitude, University of Chicago Press, Chicago, 1929, pp L. Thurston and E. Chava, The Measurement Attitude, University of Chicago Press, Chicago, 1929, pp Fred N. Kerlinger, op. cit., p.470