Emotional Intelligence and Entrepreneurs' innovativeness towards Entrepreneurial Success: A Preliminary Study

Full text

American Journal of Economics 2015, 5(2): 285-290
DOI: 10.5923/c.economics.201501.37
Emotional Intelligence and Entrepreneurs’
innovativeness towards Entrepreneurial Success: A
Preliminary Study
Rohana Ngah*, Zarina Salleh
Malaysian Academy of Entrepreneurship and SME Development, Faculty of Business Management, Universiti Teknologi MARA
Abstract Entrepreneurs’ ability to be successful is dependent on their resilience and ability to be innovative. The role of
emotional intelligence in activating entrepreneurs’ innovativeness is yet to be explored in the entrepreneurial research. This
preliminary study investigates the emotional intelligence, innovativeness and entrepreneurial success of entrepreneurs in
Malaysia. The pilot study was carried out on 51 young entrepreneurs. The results indicate positive emotional intelligence can
increase innovativeness that may lead to entrepreneurial success. Only “regulation of emotion in others” seems to be the most
important dimension whereas other emotional intelligence elements seem to be less relevant to innovativeness and
entrepreneurial success. Furthermore, there is no difference between male and female entrepreneurs in emotional intelligence
and innovativeness but entrepreneurial success. This preliminary finding highlighted the importance of emotional
intelligence especially on other elements of emotional intelligence in promoting innovativeness among entrepreneurs.
Keywords Emotional intelligence, Entrepreneurs’ innovativeness, Entrepreneurial success
1. Introduction
Entrepreneurship is often redolent with the passion,
energy, and creativity by discovering, generating, and
stimulating opportunity [30]. Psychology is seldom been
highlighted in entrepreneurship study especially related to
the capability of an individual to analyze his emotions and
values [9]. According to Boren [30], emotional intelligence
has implications for entrepreneurial situations and social
interactions such as negotiation, obtaining and organizing
resources, identifying and exploiting opportunities,
managing stress, obtaining and maintaining customers, and
providing leadership. In addition, positive emotions
influence an entrepreneur’s ability to turn their past
experiences into present solutions through heuristic
processing and deal effectively with the persistent stress [30].
In their study on emotional intelligence of entrepreneurs,
Rhee and White [12] found that entrepreneurs demonstrated
high level of self-confidence, trustworthiness, achievement
orientation, service orientation, change catalyst, teamwork
and collaboration. It raises a question on how emotional
intelligence could trigger entrepreneurs’ innovativeness in
the entrepreneurs themselves. Entrepreneurs’ innovativeness
is important for the company to excel thus success in
* Corresponding author:
rohanangah@salam.uitm.edu.my (Rohana Ngah)
Published online at http://journal.sapub.org/economics
Copyright © 2015 Scientific & Academic Publishing. All Rights Reserved
entrepreneurship ventures especially in global uncertainty.
As innovation is a key success factor in entrepreneurship, it
is important to know on how emotional intelligence could
help entrepreneurs to be innovative by utilizing their emotion.
The challenging world of entrepreneurship demand a strong
emotion for entrepreneurs to embrace the challenges they are
facing every day from the stakeholders be their employees,
customers, suppliers, government, agencies and the list goes
on. Studies have shown that entrepreneurs with higher EI
tend to performance better. The entrepreneurship experience
is said to be an extreme experience with full of uncertainty,
ambiguity and stress [13], where only those with strong
entrepreneurial characteristics can survive and sustained.
Emotional intelligence has increasingly been argued to be
highly useful concept in career success [20], organizational
effectiveness [27], job satisfaction [17] [26], strategic
decision [28], leadership [25], [11], organizational
performance [25]. Recent times have seen researchers
focusing on personal qualities of the entrepreneur that
develops outstanding businesses. Sexton and Bowman [22]
had characterized entrepreneur as tend to be 1) tolerant of
ambiguous situations, 2) prefer autonomy (autonomy may be
described as self-reliance, dominance, and independence), 3)
resist conformity, 4) be interpersonally aloof yet socially
adroit, 5) enjoy risk-taking, 6) adapt readily to change, and 7)
have a low need for support. These factors cannot be easily
delegated and communicated to the down lines which lead to
intense stress or loneliness for the entrepreneur. Being stable

286 Rohana Ngah et al.: Emotional Intelligence and Entrepreneurs’ innovativeness
towards Entrepreneurial Success: A Preliminary Study
emotionally is very crucial for the entrepreneurs with stress
and loneliness. During the past few decades, there have been
tremendous efforts on measuring the impact of emotional
intelligence on the performance of entrepreneurs [25]; [20];
[21]; [1]. Innovation is a key aspect of entrepreneurship [24].
Entrepreneurs must be innovative besides being risk-taker
and proactive where entrepreneurial orientation represents
the policies and practices that provide a basis for
entrepreneurial decisions and actions. Innovativeness is the
predisposition to engage in creativity and experimentation
through the introduction of new products/services as well as
technological leadership via R&D in new processes [10].
Emotional Intelligence facilitates innovativeness and change
in the organization [2]. The stressful and demanding
environment requires a strong mental strength for
entrepreneurs to withstand the competition and remain
sustainable for a long time. Entrepreneurship is one of the
ambiguous area in the literature and the relationship of
emotional intelligence and entrepreneurial success has not
extensively been explored [4]; [9]. However, very few
studies of EI have been carried out in entrepreneurship as
entrepreneurship studies tend to focus on finances,
management, marketing etc. This study seeks to assess the
relevance of three constructs, emotional intelligence and
entrepreneurs’ innovativeness in entrepreneurial success.
This preliminary study on emotional intelligence,
innovativeness and entrepreneurial success would provide a
future direction on this issue.
2. Literature Review
2.1. Emotional Intelligence
EI can be defined as a set of individual social abilities or
skills to monitor, discriminate and use-self and other’s
emotions in order to regulate one’s thinking and action [23].
Previous studies suggested emotional intelligence can
improve one’s life through appropriate training and
education [5]. Emotional intelligence (EI) relate to the ability
to identify and express emotions, emotional adjustment and
using emotions as self-motivation and a means to motivate
others [23], [5]. Emotional intelligence abilities are
particularly salient to entrepreneurs because of their need to
manage social interactions with other individuals. Social
interactions include activities such as presenting to investors,
gaining and maintaining customers, negotiating, as well as
attracting, selecting, and handling employees, suppliers, and
partners.
Emotional intelligence is a combination of competencies.
These skills contribute to a person’s ability to manage and
monitor his or her own emotions, to correctly gauge the
emotional state of others and to influence opinions [40].
EI is divided into four main areas: self-awareness,
self-regulation, motivation, empathy and social skills [5]. It
involves managing emotions so as to avoid task interference,
delaying gratification to pursue goals, recovering from
emotional distress and being conscientious [7]. In Cross and
Tavaglione’s [4] study in Australia of high profile
entrepreneurs; they found that entrepreneurs showed
extremely high level in appraisal and expression of emotion;
regulations and utilization of emotion. With a greater ability
to identify, understand, and manage the emotional responses
of themselves, and others, entrepreneurs will obtain a
competitive advantage that sets their business performance
apart from their competitors. As emotional intelligence is
slowly being recognized, Wong and Law [15] has taken
further action to developed new four dimensions emotional
intelligence scale using Mayer and Salovey [23] model
which composed of self-emotional appraisal (SEA), others’
emotional appraisal (OEA), regulation of emotion (ROE)
and use of others’ emotion (UOE) which was reduced to 16
items. Table 1 shows the description of each dimension:
Table 1. Emotion Intelligence Dimensions
Dimensions Description
Self Emotional
Appraisal (SEA)
Individual’s ability to understand and
assessment of their deep emotions and be
able to express these emotions naturally.
Others’ Emotional
Appraisal (OEA)
Ability to perceive and understand the
emotions of others around them.
Regulation of Emotion
(ROE)
Peoples’ ability of people to regulate their
emotions, which will enable a more rapid
recovery from psychological distress.
Use of Emotion (UOE)
Ability of individuals to make use of their
emotions by directing them towards
constructive activities and personal
performance.
Source: Wong and Law (2002)
2.2. Emotional Intelligence and Entrepreneurs’
Innovativeness
Emotional intelligence competencies distinguished
outstanding performers where the role of self-management
and relationship-management of EI competencies showed a
higher innovative performance [16]. Gogal and Akilesh [6]
found that interplay of three different and interrelated
abilities termed as cognitive intelligence, emotional
intelligence and social capital increased the innovativeness
of individual and group. Meanwhile, Suliman and Al-Shaikh
[18] in their study in Middle East found that emotional
intelligence plays a strong role in promoting creativity and
innovativeness in the organization. In addition, Kamalian et
al. [19] in their study on emotional intelligence and corporate
entrepreneurship, found motivation and self-awareness are
most effective factors on innovation while self-regulation
has the most on risk-taking and them empathy has the most
effect on pro-activeness.
2.3. Emotional Intelligence and Entrepreneurial Success
Entrepreneurial success can be defined as the standard
used by entrepreneurs to judge the success of their business
[31]. Ahmedtouglu et al. [21] argue that entrepreneurship is

American Journal of Economics 2015, 5(2): 285-290 287
not solely about the creation of business but rather a set of
activities or behaviours of entrepreneurs themselves. It is
said that entrepreneurs with high EI are likely to hold
different performance expectations with their entrepreneurial
activities, and to rely on different priorities in conducting
such activities, as compared to those with lower EI level [32].
According to Bahadori [2], people with high emotional
intelligence can better solve problems more efficiently and to
control their emotions. He further emphasized that EI is a
conflict between what the person feels that it thinks.
Brandstätter [21] performed an investigation on a random
samples from two groups of people; first group comprised of
255 owners of small and medium sized businesses while the
second group was associated with 104 people interested in
setting up a private business. He discovered that owners who
were founders were also emotionally more stable and
independent than owners who had taken over their business
from parents, relatives, or by marriage. Business owners who
are emotionally stable and independent were more successful
[7]. However, Yitshaki and Rothsein [25] found in their
preliminary findings that entrepreneurs’ EI do not have a
direct influence on organizational performance but
managerial style does have direct influence.
2.4. Emotional Intelligence, Entrepreneurs’
Innovativeness and Entrepreneurial Success
Successful entrepreneurs require a blend of analytical,
creative and practical intelligence, which in combination
constitute successful intelligence [7]. Reference has very
often been made in the research literature to the role
entrepreneurs play in stimulating innovation [14] which
relate to the human personality but not to emotion.
Ahmetouglu et al. [20] further found that individual, which
has high EI tend to have higher effectiveness, informing
creative dispositions and thus facilitating innovation. How
the entrepreneur makes decisions and judgments in the
experiential mode (emotional) rather than a rational mode
imply the importance of emotional intelligence in
entrepreneurial success [13]. They further emphasized that
peak performance can be achieved when the entrepreneur is
experiencing peak experience relating to emotional and
spiritual. Positive moods have been shown to increase
memory of positive information, self-assurance, enthusiasm,
flexibility, creativity and inductive reasoning [4]. The feeling
of joy can serve as a motivational tool that encourages
entrepreneurs to push their performance to higher levels and
achieve subsequent contentment and success [8]. Emotional
intelligence is said to be a factor in superior performance [5]
where emotion is one of the important elements in helping
successful entrepreneurs in making a rational
decision-making process as well as innovation process [13].
Moreover, Baron [3] agrees that positive emotions may
enhance entrepreneurial creativity including opportunity
recognition. It is also suggested that emotionally intelligence
leaders behave in ways that promote the creativity of their
employees.
3. Research Methodology
To ensure the validity and reliability, this study employed
the scales adopted from various authors and revised to fit into
this study. The scales of emotional intelligence are taken
from Wong and Law [15], innovativeness items are adopted
from Rhee, Park and Lee [36]) and Calatone and Cavusgil
[37], meanwhile, entrepreneurial success was from Cooper
and Artz [35] and Hmieleski & Corbett [38]. The scale range
from 1(totally disagree) to 5 (totally agree).
The pilot test was done a group of young entrepreneurs
who attended various training of entrepreneurship. Survey
was conducted through online and face to face.
All analysis is performed using SPSS version 21 to
analyze this preliminary study.
3.1. Respondent Profile
Table 2 shows the profile of the respondents.
Table 2. Demographic profile
Frequency Percentage
Gender
• Male
• Female
26
25
51
49
Current Position
• Owner
• Co-owner
• Manager
• Others
36
8
5
1
71
16
10
3
Length of Position
• less than 2 years
• 2 – 4 years
• 5 – 7 years
• 8 – 10 years
• More than 10 years
32
11
2
2
3
64
22
4
4
6
Education Level
• SPM/STPM
• Certificat
• Diploma
• Degree
• Master
• Professional
4
0
4
39
4
8
0
8
77
8
In this sample, 51% of respondents are male and 71% of
them are owners. Majority of them had tertiary education at
degree level. In addition, 34% of respondents are
sole-proprietors with majority been in business less than 2
years (32%). Majority have employees less than 5 with
annual sales turnover of less than RM300,000 a year and
most of the businesses is in the range of RM300000.
Majority is operating business in service sector.
3.2. Reliability Test
Reliability test is an assessment of the degree of
consistency between multiple measurements of a variable.
The Cronbach alpha coefficient was used to measures
(Nunnally, 1978). Reliability estimates (coefficient alphas)

288 Rohana Ngah et al.: Emotional Intelligence and Entrepreneurs’ innovativeness
towards Entrepreneurial Success: A Preliminary Study
for the four dimensions of SEA, UOE, ROE,and OEA
were .83, .85, .84, and .82, respectively. This is similar to
study done by Wong and Law [15]. Table 3 presents the
alpha coefficients that were above the required level of 0.7 as
suggested by Malhotra et al. (1999).
Table 3. Reliability Test
Factors Items Cronbach’s Alpha
Emotional Intelligence 16 0.903
Innovativeness 11 0.905
Entrepreneurial Success 5 0.830
The result of reliability test showed that the items
measured are reliable.
3.3. Correlation Analysis
The relationship between EI, INV and ES was
investigated using Pearson correlation coefficient.
Preliminary analyses were performed to ensure no violation
of the assumptions of normality, linearity and
homoscedasticity. There was strong correlation between EI
and INV (r= 0.68, n=51, p<0.005), but moderate correlations
between ES and EI (r= 0.39 n=51, p<0.005) and ES and INV
(r=0.33 n=51, p<0.005). Table 4 shows the result of
correlations.
Table 4. Correlations of variables
Mean SD EI INV ES
EI 4.10 0.52 1
INV 4.13 0.65 0.682** 1
ES 3.85 0.71 0.392** 0.335** 1
** Correlation is significant at the 0.01 level (1-tailed)
Table 5 shows the relationship of EI dimensions to INV
and ES. While INV has strong and moderate correlations to
every dimensions of EI, however, ES has weak correlation
with SEA and OEA but strong correlation to UE (r= 0.42,
n=51, p<0.005) and RE r= 0.48, n=51, p<0.005).
3.4. Independent T-Te st
An independent t-test was carried out to compare the EI,
INV and ES scores for male and female entrepreneurs. There
was no significant difference in scores for males (M=4.14,
SD= 0.49) and females (M= 4.04, SD = 0.54; t=0.677,
p=0.675). The magnitude of the differences in the means was
very small (eta squared = 0.009). In testing INV, there was
also no significant difference in scores for males (M=4.32,
SD= 0.54) and females (M= 3.92, SD = 0.70; t=2.314,
p=0.181). The magnitude of the differences in the means was
very small (eta squared = 0.008). However, in testing ES,
there was a significant difference in scores for males
(M=4.04, SD= 0.53) and females (M= 3.65, SD = 0.811;
t=1.988, p=0.014). The magnitude of the differences in the
means was moderate (eta squared = 0.07).
4. Discussion
The entrepreneurship process is a very challenging
process therefore it requires a strong mental and stable
emotion for an entrepreneur to be able to face the
competition. EI is much more than having a pleasant
personality or good people skills, although that all forms part
of it [40]. In reality, EI affect every aspects of our lives;
relationships with others either personal or professional lives
[39]. How effective can entrepreneurs capitalize of diverse
relationships depends heavily on their internal EI. Unable to
fully utilize EI would dampen entrepreneurs’ opportunity to
innovation thus success. The finding shows that EI is
important for entrepreneurs to be innovative. This is similar
to Dincer et al. [25] finding that emotional intelligence is
positively related to innovative work behavior. Emotion has
placed strong role in innovation especially in understanding
consumer’s needs and wants [34]
Table 5. Correlations of all dimensions and variables
Construct Mean SD 1 2 3 4 5 6
SEA 4.36 0.59
OEA 3.94 0.72 0.518**
UE 4.22 0.63 0.602** 4.34**
RE 3.86 0.72 0.543** 0.200 0.556**
INV 4.13 0.65 0.550** 0.398** 0.765** 0.437** 0.682**
ES 3.85 0.71 0.200 0.118 0.422** 0.481** 0.335**
** Correlation is significant at the 0.01 level (1-tailed)

American Journal of Economics 2015, 5(2): 285-290 289
Regulation of others’ emotion has strong impact on
innovativeness and entrepreneurial success compared to
other emotional intelligence dimensions. This finding is
similar to Zhou et al. [31] where regulation of others’
emotion is dominant compared to other dimensions of
emotional intelligence. This is true because entrepreneurs
might be sensitive about stakeholders such as customers,
employees and community in general in order to survive and
sustain in the competition [38]. This is also suggested by
Fukuda [34], that innovation becomes true innovation when
it meets the expectations of customers and when they feel
they have new innovative products. It is because innovation
lies in the hearts of customers [34]. This study also found that
there are no differences in gender in term of emotional
intelligence and innovativeness for entrepreneurial success.
Male entrepreneurs’ perception of entrepreneurial success is
higher compared to female. This is because male and female
entrepreneurs tend to derive satisfaction from different
sources; whereas male entrepreneurs place greater emphasis
on status-based sources of business success, female
entrepreneurs place greater emphasis on socio-emotional
sources of business success such as building satisfying
relationships with employees [33].
5. Conclusions
This study is another contribution to the knowledge of
entrepreneurship. As Malaysia is investing heavily on
entrepreneurship efforts, EI should not be left out. As
emotional intelligence abilities can be learned and taught,
entrepreneurs who are able to exploit their emotional
intelligence would able be to create competitive in
negotiations, obtaining and maintaining customers as well as
providing leadership and maintain order which is vital to
entrepreneurial success [41]. Entrepreneurs should leverage
their emotional intelligence to increase creativity and
innovation in the organization by exploiting it for their
benefits. The power of emotion would help entrepreneurs to
be good leaders and thus able to inspire and motivate their
employees to be innovative and creative in their
organizations [39]. This study has a number of limitations.
First of all, the number of respondents is too small to derive
to any conclusion. Furthermore, most of participants are
young entrepreneurs who have just started their venture. The
findings from this preliminary study would allow a more
thorough means to examine the impact of entrepreneurs’ EI
on perceived innovativeness and entrepreneurial success on
bigger scale.
For future research, emotional intelligence should be
explored in other perspective as mentioned by Ho [27] where
single emotional intelligence might not adequate. Other
factors such as entrepreneurial culture, entrepreneurial
environment and entrepreneurial orientation should be
explored together with emotional intelligence.
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