In this chapter, the framework of the study is constructed according to the literature review of each variables. The first part, the reviews of career adaptability are presented and also illustrated their relationship with the entrepreneurial intention. Then, the supportive literature of risk aversion is illustrated. Lastly, the entrepreneurial intention is defined and illustrated through various studies that form the framework of the study.
Entrepreneurial Intention
Entrepreneurial Intention is an individual’s willingness to pursue the possibility of becoming an entrepreneur, self-employment, with the behavior to assess the external and internal context (Bird & Jelinek, 1988; Douglas & Shepherd, 2002; Krueger et al., 2000). In the past decades, plenty of researchers studied on the entrepreneurship and related activities topics. In previous studies, becoming an entrepreneur or self-employed consisted of several factors, such as opportunities, risk bearing, self-efficacy, cognitive abilities, and ambitions (Bird, 1988; Segal, Borgia, & Schoenfeld, 2005; Shane & Venkatarman, 2000) to achieve.
Intention is considered to be the planned behavior to start a business or to be self-employed (Krueger et al., 2000). Nevertheless, Bagozzi, Baumgartner, and Yi’s (1989) study has an argument on the influence of the intention toward the entrepreneurship. Despite of that, to understand the causal influence of becoming an entrepreneur, the scholars found out that the intention of entrepreneurship is the most powerful predictor for entrepreneurial behavior, which predict the behavior and attitude of entrepreneurship (Ajzen, 1991; Bagozzi et al., 1989;
Krueger et al., 2000). In the early decades, researchers were studying the factors of personality
and characteristics that cause an individual to be self-employed (Churchill & Lewis, 1986;
Shaver & Scott, 1992). Although the discussion on the trait were reticence for a period of time;
however, Zhao and the co-authors (2010) had conducted a meta-analysis to discuss about the personalities that influence the intention of entrepreneurship. Since entrepreneurial intention is influenced by several factors, the personality of an individual is a concern toward the intention, for until now, the published research on this topic is the second largest. The study stated that only Big Five Model to predict the entrepreneurial intention is not enough, as risk attitude plays a significant role that will affect the individual to pursue a self-employed career (Zhao et al., 2010). According to the result of the research, three out of the five factors are significantly influencing the intention of entrepreneurship, which are the conscientiousness, openness, and emotional stability. As the research of Zhao and the co-authors (2010) included risk propensity into the meta-analysis, they found that risk propensity is highly significant affecting the intention of the entrepreneurship.
After the study of the relationship on trait and entrepreneurial intention was published, some researchers studied on the procedures of becoming entrepreneurs to conclude the major causal effects (Bird, 1988; Krueger, et al., 2000). Two well-known models had been issued, the Theory of Planned Behavior (TPB; Ajzen, 1991) and the Shapero’s Model of the Entrepreneurial Event (SEE; Shapero & Sokol, 1982). Both models have three antecedents of the intention. For the TPB model, the author stated that subjective norm, perceived self-efficacy, and attitude toward the behavior are the antecedents to predict entrepreneurial intention, as shown in Figure 2.1. Subjective norm, is how you perceived the people or society thought toward the intention of self-employment. While the attitude toward entrepreneurship is the personal belief of entrepreneurship. Last, the individual controls the behaviors in the given
circumstances to pursue the target is consider to be a perceived self-efficacy (Ajzen, 1991;
Bandura, 1986; Segal et al., 2005; Shapero & Sokol, 1982). In a research about the motivation study of intention of being self-employed (Segal et al., 2005) declares that desire toward entrepreneurship and self-efficacy motives the intention to be entrepreneur. The author of this study believed that individual has desirability to entrepreneurship and planned behavior take great proportion in intention to entrepreneurship. Previous studies attribute self-efficacy and desire toward being an entrepreneur to career adaptability (Crant, 1996; McKenna, Zacher, Ardabili, & Mohebbi, 2016; Obschonka, Silbereisen, & Schmitt-Rodermund, 2010; Tolentino, et al., 2014; Zhao, Seibert, & Hills, 2005), as it is self-regulatory ability. Several research has shown the significant relation between career development, such as career adaptability, and entrepreneurial intention (Brown, Bimrose, Barnes, & Hughes, 2012; Drennan, Kennedy, &
Renfrow, 2005; McKenna et al., 2016; Obschonka et al., 2010; Tolentino et al., 2014; Van Gelderen et al., 2008). Previous literatures declared that individual desired to be entrepreneur has to have control behavior, self-efficacy, and the career adaptability to pursue toward the final career goal and self-regulatory. Thus, career adaptability is to be discussed next.
Figure 2.1. Theory of planned behavior. Adapted from “The theory of planned behavior.” by I. Ajzen, 1991, Organizational behavior and human decision processes, 50(2), 179-211.
Although SEE model (Shapero & Sokol, 1982) issued earlier, which declares that the attitude desired to be an entrepreneur and perceived self-efficacy are significant predictors toward entrepreneurial intention, one antecedent was differed from TPB model, propensity to act, which was by then evoke more researchers to study on the opportunity influence on the intention to be entrepreneur, see Figure 2.2. The propensity to act and risk propensity are deemed to be the factors while start a new entrepreneurial career (Shane & Venkatarman, 2000).
Scholars had addressed that the contextual and situational issues, such as the economy, work experience, reachable resources, governmental policies and sudden change in the job position, influence the intention to be an entrepreneur (Gorgievski & Stephan, 2016; Huang, Frideger,
& Pearce, 2013; Krueger et al., 2000; Moore & Cain, 2007; Urbanaviciute, Pociute, Kairys, &
Liniauskaite, 2016). According to the research, having opportunity is considered to influence the entrepreneurial intention, while spotted the possible method to be self-employed.
Attitude toward entrepreneurship
Subjective Norm
Self-efficacy
Entrepreneurial
Intention
Figure 2.2. Shapero’s model of entrepreneurial event. Adapted from “The social dimensions of entrepreneurship.” By A. Shapero & L. Sokol, 1982, Encyclopedia of
Entrepreneurship, Englewood Cliffs: Prentice-Hall, p. 72-90.
Attitude toward entrepreneurship
Propensity to act
Self-efficacy
Entrepreneurial
Intention
Career Adaptability
Career adaptability is debuted by Super and Knasel (1981) in the study of Life Span, Life Space Theory, which the term is defined as the ability of an individual who is ready to deal with changes during work, colleague, and environment of work. By then, Savickas (1997) and researchers defined this term in CCT as the level of readiness of an individual who has sufficient and useful resources to deal with current and future working and living status, such as the tasks from the job, transformation of job position, and also the trauma happened in their life (Savickas, 1997, 2005; Savickas & Porfeli, 2012). CCT (Savickas, 2002, 2005) is a model that explains the integration of their perception toward the role in the vocation. The term career adaptability was developed from the CCT, which combine vocational personality, career adaptability, and life themes and represent, which the why, what, and of the vocational behaviors (Savickas, 2005). On account of the fact that career adaptability is the ability in pursuing the career of an individual, this variable will affect the aspect of life and work.
Individuals with career adaptability are more likely to perform well on their work and life, and is likely to have more plans toward the future.
In the study of CCT, Savickas (2005, 2013) delineated the concept of the 4 stage for adaptation, which are adaptive readiness, adaptability resources, adapting responses, and adaptation result. Adaptive readiness expounds that an individual is flexible and willing to make changes in career (Hartung & Cadaret, 2017; Savickas, 2013), which also foresees the behavior of adapting responses and adaptation result (Hartung & Cadaret, 2017; Perera &
McIlveen, 2017; Savickas, 2013). Adaptation result is expressed as the product of adaptive readiness and adaptability resources (Hartung & Cadaret, 2017; Savickas, 2013). Career adaptability, in CCT, consisted of four dimensions, which denote the resources and methods to
adapt each circumstance occurs during constructing their personal career (Savickas, 2005);
thus, to be expected the individual has more concerns toward the career development. The four dimensions in career adaptability are concern, control, curiosity, and confidence. Each of them represents an aspect of career adaptability, which the explicit explanation of each dimension is elaborated as follows. Concern in career adaptability is the sense of an individual orient oneself to the future and plan for tomorrow. Control is the beliefs of the individuals in the preparation of heading toward their career and knowledge to shape the future career. Curiosity refers to an individual’s competency and ability to discover the environment of work and their role, which means to explore the opportunity to develop their career. Last, confidence, is the self-efficacy to deal with the obstacles that appear in the work of an individual, and successfully react to the situation when choosing and implementing the needed education and profession (Savickas, 2005; Savickas & Porfeli, 2012).
According to the definition of career adaptability and its dimensions, these resources are the aspect of career decision making which construct a person’s career. After the model is presented, several researchers studied the outcomes and antecedents of career adaptability.
Rudolph and his partners had a meta-analysis research of the associated variables related to career adaptability (Rudolph, Lavigne, & Zacher, 2017). There are studies associated to the topic of the aspect of commitment (Rudolph et al., 2017), satisfactions (Chan & Mai, 2015;
Maggiori, Rossier, & Savickas, 2017; Mckenna et al., 2016; Urbanaviciute et al., 2016), turnover intention (Chan & Mai, 2015), and entrepreneurship (Mckenna et al., 2016; Tolentino et al., 2014; Uy, Chan, Sam, Ho, & Chernyshenko, 2015). Scholars argued that the study of the individual possessing career adaptability to have the intention to leave the organization rather than to remain (Ito & Brotheridge. 2005). Since career adaptability improves the competence
of an individual, no matter in the organization or out of the organization, the employability is higher (Arthur, 1994; Ellig, 1998; Hall, 1996; Ito & Brotheridge, 2005; London, 1983, 1993;
Rudolph et al., 2017; Waterman Jr et al., 1994). However, the researchers stated that with the involvement of organizational support, the employees are expected to commit to the organization than to possess the regard of career transition or leave current career (Ito &
Brotheridge, 2005). At all, the individuals have the ability adjusting to the changes happened in the work and diverse working environment may navigate their career. In consequence, this has become relevant to the career development of an individual. With the possibility of career adaptability to transform the career, the concept has been considered relevant to boundaryless career, protean career, and entrepreneurship. Research on entrepreneurship had found a significant relationship with career adaptability (Rudolph et al., 2017). From the study of Uy et al. (2015), the curiosity dimension of the career adaptability is positively and strongly associated with the entrepreneurial intention. Career adaptability was also found to have a significant effect toward the decision-making of career status (Guan et al., 2013). Nonetheless, not much research has been done to link career adaptability to the topic of entrepreneurial related issues. Moreover, few research investigated the topic on Taiwanese workers; therefore, this research investigates this issue as the first Hypothesis:
Hypothesis 1: Career adaptability is positively related to entrepreneurial intention.
Risk Aversion
Risk aversion can be used to describe an individual who considers risk as a bad thing, something to avoid at all cost, and is less likely to take risk than an individual who has more risk propensity (Allen et al., 2005; Bell, 1995; Wiseman et al., 2000). As Tversky and
Kahneman (1992) mentioned that risk aversion happens when the economy is under ambiguity.
Since every option in each decision consists risks, starting up a firm or becoming self-employed consists a certain degree of risk. To become an entrepreneur, individual is more likely to have risk-tolerance than the individual who is risk averse while choosing a career (Ahmed, 1985;
Begley & Boyd, 1987; Carland, Carland Jr., Carland, & Pearce, 1995; Hull, Bosley, & Udell, 1980; Stewart, Watson, Carland, & Carland, 1999). Risk-averse individual tends to think of the negative consequences of decision making than the positive outcomes (Schneider & Lopes, 1986). Hence, the research done by Kanbur (1979), Kihlstrom and Laffont (1979), Cramer, Hartog, Jonker, and Van Praag (2002), and Kan & Tsai (2006) indicated that the intention to become an entrepreneur or decide to be an employer or self-employed, is negatively influenced by risk aversion. Despite there is study saying that the attitude toward risk is not the effect that dominate the intention of entrepreneurship (Tucker, 1988), more and more studies about entrepreneurship discovered that the propensity and tolerance of risk is an antecedent of entrepreneurial intention (Caliendo, Fossen, & Kritikos, 2009; Fairlie, 2002).
Nowadays, risk is considered to be a critical influence for individual to pursue an entrepreneurial career (Zhao et al., 2010). In Prospect Theory, Tversky and Kahneman (1992) revised that the risks happened while the desired choice was decided through gain and loss.
Since the individuals who dislike risk are considering risk to be having greater failure rather than having profit or success. Thus, such individuals seldom desire to become the entrepreneurs, who encounter more risky decisions. Moreover, going out of the comfort zone, such as working in an organization for a long period of time, without having a concrete outcome is definitely a risky behavior (Allen et al., 2005). Thus, the researcher hypothesizes that risk aversion may be
a negative moderating effect to the relationship between career adaptability and entrepreneurial intention. The second Hypothesis of the study is as follow:
Hypothesis 2: Risk aversion will weaken the relationship of career adaptability and entrepreneurial intention.
Entrepreneurial Opportunity
In Cambridge Dictionary, opportunity is defined as a situation that provides an individual with the possible resources or chances, while pursuing the goal or target they eager. Speaking of starting up a firm, the opportunity is defined to be a possibility for individuals to put an action toward entrepreneurship. Several researchers had discussed about the process and definition of entrepreneurial opportunity. Kirzner’s (1997) definition of entrepreneurial opportunity is the situation when an individual discovers opportunity in the environment and exploits it. However, another scholar, Schumpeter (1942), thinks that it is the situation that new good, new service, new resource and new means is recognized by the individual. In this study, the researcher explicates entrepreneurial opportunity as an opportunity for an individual to exploit the knowledge and to discover new services and new methods in engaging a startup idea (Casson, 1982; McMullen et al., 2007; Plummer et al., 2007; Shane & Venkataraman, 2000). Opportunity is derived or evoked from routine means and is a novel thought that derived from the individual’s knowledge (Baron, 2006; Eckhardt & Shane, 2003). Several scholars and researchers attempted to find a way and to develop models to assess opportunity; however, opportunity is the judgement through an individual’s knowledge and cognitive experience (Uygur, 2016). Entrepreneurial opportunity is also a perception through which an individual discovers opportunity in the social network and knowledge (Aldrich, Zimmer, & Jones, 1986;
Coviello & Munro, 1997; Loane & Bell, 2006; Meyer & Skak, 2002; Sharma & Blomstermo, 2003; Sullivan Mort & Weerawardena, 2006; Venkataraman, 1997). Thus, opportunity is considered a new thought or resource to develop the idea of entrepreneurship, which, as a result, can force an individual to become an entrepreneur suddenly without any structured plan (Krueger et al., 2000). In contrast, if an individual lacks opportunity, such as timing, resource and funds, or discovering means to startup, the individual may not have a strong intention to start up a firm or become self-employed (Ajzen, 1987; Boyd & Vozikis, 1994; Krueger, 1993;
Tubbs & Ekeberg, 1991). Having the opportunity, may enhance the possibility of a person with high career adaptability to pursue entrepreneurship.
Opportunity is an essential element in our daily life and is also a combination of routine-need throughout the business domain (Uygur, 2016). In a company, although an individual possesses the required qualification, getting a job promotion still requires opportunities.
McMullen et al. (2007) mention that opportunity is how an individual reacts to the benefit provided by the environmental context. Therefore, if the individual has all possible criteria but without the opportunity, the individual may not become an entrepreneur (Alvarez & Busenitz, 2001). Thus, entrepreneurial opportunity will make the individual who possesses career adaptability to have a stronger intention to become an entrepreneur, such as having the proper key to open the door toward a startup. Therefore, the researcher presents the third Hypothesis of this study as follow:
Hypothesis 3: Entrepreneurial opportunity will strengthen the relationship of career adaptability and entrepreneurial intention.