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Linking Entrepreneurial Behaviour and Business Performance of Indigenous Agripreneurs in Sabah

Authors:
  • Jesselton University College
  • North Borneo University College

Abstract and Figures

In an entrepreneurial setting, an agripreneur’s decision to venture in entrepreneurial activity is influenced by his or her intention to be involved in entrepreneurship. As such, the entrepreneurial intention serves as an important prediction of involvement among agripreneurs in entrepreneurship. Entrepreneurial Behaviour was deemed as a multidimensional construct encompassing two dimensions, namely Entrepreneurial Attitudes and Entrepreneurial Skills. Quantitative approach and simple random sampling were employed in this study. The location of this study involved the area of Interior Division in the State of Sabah. The sample consisted of 106 responses among indigenous agripreneurs. The data analysis was carried out using Multiple Regressions Analysis and Hierarchical Regression Analysis techniques by applying the Statistical Package for the Social Sciences (SPSS) software. Based on the attributes of Entrepreneurial Behaviour consisting of Entrepreneurial Attitudes and Entrepreneurial Skills, the results did not statistically demonstrate their significant relationships with Business Performance. Furthermore, in reference to government assistance that plays an important role as the moderator, was proven significant in the relationship between Entrepreneurial Behaviour and Business Performance, whilst being influential in strengthening the relationships between Entrepreneurial Behaviour and dimensions and Business Performance. Through the findings of this study, it is hoped that this paper will become a guiding tool for more comprehensive research to unveil the relationship between Entrepreneurial Behaviour and Business Performance.
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Linking Entrepreneurial Behaviour and Business Performance of Indigenous Agripreneurs in Sabah
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Politeknik & Kolej Komuniti Journal of Social Sciences and Humanities, Vol. 4, No. 1, 2019
eISSN 0128-2875
Linking Entrepreneurial Behaviour and Business Performance
of Indigenous Agripreneurs in Sabah
Melvin Mojikon
Kolej Universiti Borneo Utara
mmojikon@gmail.com
Chin Yuk Fong
Kolej Universiti Borneo Utara
fred@nbuc.edu.my
Doretty R. Jiroh
Kolej Universiti Borneo Utara
doretty@nbuc.edu.my
Abstract
In an entrepreneurial setting, an agripreneur’s decision to venture in entrepreneurial activity
is influenced by his or her intention to be involved in entrepreneurship. As such, the
entrepreneurial intention serves as an important prediction of involvement among
agripreneurs in entrepreneurship. Entrepreneurial Behaviour was deemed as a
multidimensional construct encompassing two dimensions, namely Entrepreneurial
Attitudes and Entrepreneurial Skills. Quantitative approach and simple random
sampling were employed in this study. The location of this study involved the area of
Interior Division in the State of Sabah. The sample consisted of 106 responses among
indigenous agripreneurs. The data analysis was carried out using Multiple Regressions
Analysis and Hierarchical Regression Analysis techniques by applying the Statistical
Package for the Social Sciences (SPSS) software. Based on the attributes of Entrepreneurial
Behaviour consisting of Entrepreneurial Attitudes and Entrepreneurial Skills, the results did
not statistically demonstrate their significant relationships with Business Performance.
Furthermore, in reference to government assistance that plays an important role as the
moderator, was proven significant in the relationship between Entrepreneurial Behaviour
and Business Performance, whilst being influential in strengthening the relationships
between Entrepreneurial Behaviour and dimensions and Business Performance. Through
the findings of this study, it is hoped that this paper will become a guiding tool for more
comprehensive research to unveil the relationship between Entrepreneurial Behaviour and
Business Performance.
Keywords:
entrepreneurial behaviour, business performance,
government assistance
1.0 Introduction
Farmers, agricultural business, researchers and governments have
recognised the need for much entrepreneurial culture in the farming
business. Agri-entrepreneurship can be the answer towards increasing the
household income in Sabah. A huge portion of domestic revenue generated by
the communities in the rural area is highly dependent on the agriculture
sector, making agri-entrepreneurship the most suitable sector to develop
Sabah. In the long run, the people of Sabah especially those in the rural area
will be competent in generating their income independently through well-
planned agricultural systems that have high commercial values. With proper
guidance and correct agri-entrepreneurship exposure, the people in the rural
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part of Sabah, especially youths will be able to realise the expectation set upon
them.
There are growing opportunities for entrepreneurism around the world.
Indigenous groups nowadays suffer from chronic poverty, lower education
levels, and poor health. As a result, an often-stated dual objectives of
indigenous leaders are to rebuild their ‘nations’ and improve their socio-
economic circumstances (Harvey, 2006). Within this multi-objective mission,
many indigenous people see entrepreneurial activity as a central element in
supporting this endeavour.
The Federal Agricultural Marketing Authority (FAMA) Sabah will be
working with indigenous agripreneurs to counter the shortage of crops against
increasing demand for them in the State. The indigenous agripreneurs are
experienced in the traditional methods of growing crops, but will need modern
methods to produce sufficient amount of crops to meet market demand.
However, the indigenous agripreneurs in Sabah need help and assistance in
terms of modern technologies and effective marketing, which will raise their
income as well. Although the amount of crops produced with the agreement
will be insufficient, it is the first step towards meeting the State’s demand
(Daily Express News, 2018).
Based on the above explanation, it shows that the government’s
expectation of high involvement of indigenous agripreneurs in
entrepreneurship is not achievable yet. A gap exists between what is expected
by the government of the indigenous agripreneurs, and the actual scenario of
the lack of involvement among indigenous agripreneurs in entrepreneurship.
Here lies a gap that needs further investigation in explaining indigenous
agripreneurs and their behaviour towards entrepreneurship.
1.1 Problem statement
The Sabah State Government urged indigenous agripreneurs
specifically the local farmers to consider commercial planting and production
of crops that have a wide market potential. Local crop production is still
insufficient to meet the market demands as the needs of factories producing
crop-based products. Therefore, it is time for the District Farmers’
Organisations to deliberate on such consideration that will involve the
assistance and expertise of the Ministry of Agriculture and Agro-Based
Industry Malaysia towards embarking on commercial crop cultivation (Daily
Express News, 2018).
The majority of the indigenous agripreneurs specifically the local
farmers in Sabah are having issues in earning high income and yet crop
farming is the main source of their household income. They are also facing
low productivity of their crops and this affecting the farmers’ monthly income.
Due to low income and productivity, business performance of the indigenous
agripreneurs is inconsistent from year to year.
1.2 Research objectives
The general aim of this research is to examine the relationship between
Entrepreneurial Behaviour (Entrepreneurial Skills and Entrepreneurial
Attitudes) and Business Performance on indigenous agripreneurs in Sabah.
On the other hand, this study aims to examine whether the Government
Assistance has any moderating effects on the relationship between
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Entrepreneurial Behaviour (Entrepreneurial Skills and Entrepreneurial
Attitudes) and Business Performance.
1.3 Significance of the research
The results of this research have important implications on the Sabah
State Government, Federal Government, Government Agencies, Farmers,
Planters, Conservationists, Consumers, Researchers, Capital Providers,
Political Leaders, Agricultural Department and Policy Makers that share an
intense interest in the sustainability of agricultural production systems. This
also includes identifying the success factors for the indigenous agripreneurs
specifically the local farmers in Sabah. This research will help to improve their
development planning and increase the total of hectarage and crops
production in Sabah.
2.0 Literature review
Around the world, indigenous population groups suffer from chronic
poverty, lower education levels, and poor health. As a result, an often-stated
dual-objectives of indigenous leaders is to rebuild their ‘nations’ and improve
their socio-economic circumstances (Gartner, 2000). Within the overall multi-
objectives mission, many indigenous people see entrepreneurial activity as a
central element in supporting this endeavour (De Lauwere et al., 2002).
Agripreneur is defined as an entrepreneur whose main business is
agriculture-related farmer is defined as someone who is employed on a part
or full-time basis for a range of farming activities; they are primarily
dependent on the farm and agriculture in the practice of cultivating the soil,
growing crops and raising livestock as the main source of income (McElwee,
2005).
Business performance in general seems to be closely related to the
attitudes and skills of the entrepreneur (Henry et al., 2005). Hence, it is not
surprising that training interventions are adopted as a response to the
pressing need for supporting the viability and effectiveness of co-operatives
(Petrin, 2007).
Attitude is a core concept within motivation theories. An attitude is
defined as a valuation of an object, whether the object is good or bad (Wiklund
& Shepherd, 2003). Attitude has been viewed as a uni and multidimensional
construct. The behavioural component consists of intentions to behave in a
certain way towards the object (Robinson et al., 2001). According to Smilor
(2007), entrepreneurial skills can be established by mastering those activities
or practical know-hows that are needed to establish and successfully run a
business enterprise.
Business performance as “the ability of an object to produce results in
a dimension determined a priori, in relation to a target” (Laitinen, 2002). Thus,
it is not surprising that training interventions were adopted as a response to
the pressing need for supporting the viability and effectiveness of co-
operatives (Petrin, 2007; Roca, 2008). Although the duration and mode of
these training interventions can differ, their focus was two-fold:
a. The development of entrepreneurial attitudes; and
b. The reinforcement of entrepreneurial skills.
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This performance has been measured traditionally in financial terms
(De Toni & Tonchia, 2001). The most commonly used measures of
performance are efficiency (e.g. return on investment) growth (e.g. increase in
sales) and profit (Murphy et al., 2006). The importance of external support
services specifically on the role of government (Sydenham, 2001). They also
recommend that the government should expand and strengthen the rural
facilities and support that are presently inadequate. Priority is given to finance
the growth of annual crops and the farmers (Dominic, 2013). A key role for
the government has been set in the right direction for continuing the search
for optimum economic environment towards fostering industry development
and economic growth (Heidi, 2004).
3.0 Research methodology
3.1 Research design
a. Sampling design
The population of this research consisted of indigenous agripreneurs
specifically the local farmers in Sabah who commercialise their crop farming
business. The sample was selected only from those registered to the Ministry
of Agriculture and Agro-Based Industry Malaysia and 302 samples among
indigenous agripreneurs registered under this ministry were chosen. The
probability sampling method was used using simple random sampling
technique, as any elements of the population have an equal chance or equal
probability of being selected as a sample and the target population is
homogenous in terms of the interest for the research.
b. Instrumentation
The instrument used in this research was quantitative method that
utilised the self-administered questionnaire. The main purpose was to get
obtain quantitative profiles of indigenous agripreneurs specifically the local
farmer and to encourage them to express their views freely. Pilot test was
conducted to detect weaknesses in design and instrumentation and provide
proxy data for selections of probability sample. The questionnaire was
translated into Malay language so that it would be easier for the respondents
to understand the contents of the questionnaire.
c. Research framework
The research framework is the foundation on which the entire research
is based on the literature review in the previous chapter has characterised the
success factor for the indigenous agripreneurs and it is the intention in this
chapter to integrate such determinants into a model for better understanding
of success factors for the indigenous agripreneurs.
In the Research Framework in Figure 1, the main variable of interest to
research is the dependent variable that is the Business Performance. The two
independent variables for Entrepreneurial Behaviour that are correlated to
the dependent variable are Entrepreneurial Attitudes and Entrepreneurial
Skills. The moderating variable, which will have contingent effects on the
relationship between the independent variables and dependent variable, is the
Government Assistance. This research had been conducted in a way to
contribute to the improvement of Government’s Assistance as a moderator
(moderating variable) based on the relationship between Entrepreneurial
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Behaviour and Business Performance. In this study, the Government’s
Assistance was incorporated as the moderator in order to determine if this
construct played a significant role in strengthening the relationship of
Entrepreneurial Behaviour and Business Performance (Dahi, 2012).
Figure 1: Research framework
d. Research hypotheses
From the Research Framework of the research, 4 hypotheses were
developed. These 4 hypotheses are as follows:
Hypothesis1a: There is a positive relationship between Entrepreneurial
Attitudes and Business Performance.
Hypothesis1b: There is a positive relationship between Entrepreneurial
Skills and Business Performance.
Hypothesis2a: The relationship between Entrepreneurial Attitudes and
Business Performance will be moderated by Government
Assistance.
Hypothesis2b: The relationship between Entrepreneurial Skills and
Business Performance will be moderated by Government
Assistance.
e. Techniques of analysis
For data analysis purposes and text clarity data obtained were analysed
using the Statistical Package for the Social Sciences (SPSS) programme. The
Cronbach’s Alpha analysis was determined the reliability of measures. The
statistical methods for hypotheses testing are Multiple Regressions Analysis
and Hierarchical Regression Analysis.
4.0 Results and analysis
4.1 Questionnaire collection
A total of 302 sets of questionnaires was distributed to the indigenous
agripreneurs specifically the local farmers in Sabah. Out of the 302
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questionnaires, only 106 were managed to be collected because of the time
and budget constraints.
4.2 Reliability measurement
The data collected was subjected to reliability analysis to establish the
reliability of the measures. The variables are assessed for reliability using the
Cronbach’s Alpha in the questionnaires in this research. Table 1 provides
summary for all the variables in the analysis.
Table 1: Cronbach’s alpha value for variables
No.
Variables
Cronbach’s Alpha
1
Entrepreneurial Attitudes
0.62
2
Entrepreneurial Skills
0.86
3
Business Performance
0.63
4
Government Assistance
0.81
The analysis recorded reliability Crocbach’s Alpha that ranges from
0.62 to 0.86. All dimensions are very well within the acceptable range of 0.6
to 0.9. The variables showed acceptable Cronbach’s Alpha values of more than
0.6. The overall result is good with outputs indicating strong Cronbach’s
Alpha values.
4.3 Multiple regression for entrepreneurial behaviour and business
performance
Table 2: Multiple regression for entrepreneurial behaviour and business
performance
R
R2
F
Sig. F
Durbin-Watson
0.131
0.017
0.894
0.412
2.078
Variables
Beta
t
Sig.
VIF
(Constant)
4.731
0.000
Entrepreneurial Attitudes
0.132
0.832
0.407
1.833
Entrepreneurial Skills
-0.206
-1.300
0.196
1.635
Table 2 shows the statistical summary results of the Multiple
Regression of Entrepreneurial Behaviour and Business Performance.
a. Hypotheses Testing – Multiple Regression
Hypothesis1a: There is a positive relationship between Entrepreneurial
Attitudes and Business Performance
The results in Table 2 shows that there is no significant relationship
between Entrepreneurial Attitudes = 0.132, t = 0.832, p = 0.407) and
Business Performance. Therefore, it is concluded that Entrepreneurial
Attitudes is not a strong determinant of Business Performance. Thus, the
above hypothesis is rejected.
Hypothesis1b: There is a positive relationship between Entrepreneurial Skills
and Business Performance
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As indicated by Table 2 shows that there is no significant relationship
between Entrepreneurial Skills = -0.206, t = -1.300, p = 0.196) and
Business Performance. Therefore, it is concluded that Entrepreneurial Skills
is not a strong determinant of Business Performance. Thus, the above
hypothesis is rejected.
b. Hypothesis testing – hierarchical regression (Government assistance)
Table 3: The moderating effect of government assistance
Variables
Step 1
Step 2
Step 3
B
Sig.
B
Sig.
B
Sig.
Entrepreneurial
Attitudes
0.132
0.407
0.081
0.104
-
0.273
0.369
Entrepreneurial Skills
-0.206
0.196
-
0.001
0.981
1.08
0.000
*Government Assistance
0.957
0.000
1.75
0.000
Entrepreneurial
Attitudes *Government
Assistance
0.526
0.378
Entrepreneurial Skills
*Government Assistance
-1.50
0.000
R Square Changes
0.017
0.888
0.015
Sig. F Change
0.412
0.000
0.000
Hypothesis2a: The relationship between Entrepreneurial Attitudes
and Business Performance will be moderated by
Government Assistance
Hypothesis2b: The relationship between Entrepreneurial Skills and
Business Performance will be moderated by
Government Assistance
As illustrated in Table 3, the F changes for Step 2 and 3 regressions are
significant. Government Assistance is significant (Sig. = 0.000). Meanwhile
the interaction between Entrepreneurial Attitudes and Government
Assistance (Sig. = 0.378) is not significant and lastly interaction between
Entrepreneurial Skills and Government Assistance (Sig. = 0.000) is
significant. Therefore, overall it is concluded that Government Assistance has
moderating effect.
5.0 Discussion
5.1 Relationship between entrepreneurial attitudes and business
performance
The results of Multiple Regression Analysis showed that there was no
significant relationship between Entrepreneurial Attitudes and Business
Performance. This exhibits a stronger entrepreneurial attitude appear that
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will more likely change the way they organise their enterprise and tend to have
higher income growth (Nybakk & Hansen, 2008).
5.2 Relationship between entrepreneurial skills and business
performance
The results of Multiple Regression Analysis showed that there was no
significant relationship between Entrepreneurial Skills and Business
Performance. The degree of efficiency and reliability of the Entrepreneurial
Skills in dealing with matters pertaining to indigenous agripreneurs showed
no positive correlation to the Business Performance. The finding was
consistent with the finding of McElwee (2005) that skills are not all that is
required.
5.3 Moderating effect of government assistance
The results of the Hierarchical Regression Analysis in Table 3 indicated
that overall results of Government Assistance moderated the independent
variables and dependent variable. It can be explained that it was essential for
the indigenous agripreneurs specifically in the rural areas to receive support
from the government. Besides Ministry of Agriculture and Agro-Based
Industry Malaysia, other government departments such as Rural
Development Department and other association such as from politicians
could help the indigenous agripreneurs to generate income.
The results were supported by the findings of Sydenham (2001),
Dominic (2003) and Heidi (2004), where they also agreed on the importance
of external support services such as the government support. Therefore,
external support especially from the government is very important for the local
farmers to improve their standard of living. Support and services include
consultation, seeds, equipment and capital. Therefore, Government
Assistance was the moderator strongly associated with the Business
Performance of indigenous agripreneurs (Esham & Usami, 2007).
5.4 Implications of the research
Results from this research may help to shed light on various problems
experienced by the indigenous agripreneurs and their business. The
information generated may help to identify ways to improve the success
factors for the indigenous agripreneurs.
The Ministry of Agriculture and Agro-Based Industry Malaysia should
conduct regular training and courses to the indigenous agripreneurs to
identify the problems and to improve their skills and business performance.
It is important to note that business network can help the indigenous
agripreneurs to sustain their business, encourage them to get involved with
the activities and make use of that information for action plans and
improvement.
5.5 Limitations of the research
There were two limitations in this research, namely time and budget
constraints. Due to this, only 106 questionnaires were collected for this
research.
The second limitation was the sample size that was considered small. A
larger sample size would be able to represent more indigenous agripreneurs
and provide more accurate and conclusive results.
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5.6 Suggestions of future research
The results of 106 questionnaires suggested that successful indigenous
agripreneurs are entrepreneurial innovation projects are the result of a five-
stage process model. This entrepreneurial new service development process
model differs somewhat from the proposed process models, focusing on large
service corporations. Besides a more flexible and informal process for
entrepreneurial services, the development cost and the final market price are
strongly related to success.
Further research should be made to develop sustainable and replicable
models and tools to improve the success factors for the indigenous
agripreneurs.
6.0 Conclusion
The shift in mindset and practices will only be made possible through
the availability of accurate information on the importance and potential of this
agriculture sector. Building from this, the researcher hopes that information
regarding the agribusiness development can be dissimilated through this
research to various stakeholders and interested parties.
Nevertheless, the research in this area is not conclusive. Further
investigations should be carried out using more advance tools and larger
samples, in order to draw more definite conclusions.
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The purpose of this research was to explore the underlying meanings researchers and practitioners have about entrepreneurship and to outline some themes that characterize the major issues and concerns that constitute the debate about entrepreneurship as a field of study.The process used to identify the themes that characterize entrepreneurship took the form of a policy Delphi. This Delphi was constructed as a series of three questionnaires to elicit definitions of entrepreneurship that were then analyzed and evaluated. In the first phase, a one-page questionnaire asking for a definition of entrepreneurship was sent to leading academic researchers in entrepreneurship, to business leaders and to politicians. The first questionnaire asked individuals: What is your definition of entrepreneurship? We received 44 responses (36 from academics, 8 from business leaders and none from politicians) from the 280 individuals whom we invited to participate (a 16% response rate).In phase 2, all of the entrepreneurship definitions from the first questionnaire were typed and sent back with a second questionnaire to the 44 respondents. The second questionnaire was generated through a content analysis of the entrepreneurship definitions. Ninety attributes were identified from the entrepreneurship definitions. The second questionnaire asked participants: How important is each attribute to your definition of entrepreneurship? Participants ranked the attributes from very important to unimportant. Of the 44 participants in phase 2, 41 responded to the second questionnaire (93% response rate). The responses from the second questionnaire were then evaluated and factor analyzed. The factor analysis sought to cluster the 90 attributes into a smaller set of factors (themes). The eight-factor solution was selected. The debate about what constitutes the nature of entrepreneurship can be characterized by these eight themes.The Entrepreneur. The entrepreneur theme is the idea that entrepreneurship involves individuals with unique personality characteristics and abilities. Innovation. The innovation theme is characterized as doing something new as an idea, product, service, market, or technology in a new or established organization. Organization Creation. The organization creation theme described the behaviors involved in creating organizations. Creating Value. This theme articulated the idea that entrepreneurship creates value. Profit or Nonprofit. The profit/nonprofit theme is concerned with whether entrepreneurship involves profit-making organizations only. Growth. At issue in this theme is the importance of growth as a characteristic of entrepreneurship. Uniqueness. This theme suggested that entrepreneurship must involve uniqueness. The Owner-Manager. This theme suggested that entrepreneurship involves individuals who are owners and managers of their businesses.The third phase of the Delphi asked the 41 participants to evaluate and comment on the eight factors generated in the second phase. Of the 41 participants in phase 3, 34 responded to the third questionnaire (83% response rate). Since no one agreed-upon definition of entrepreneurship appeared to emerge from the Delphi process, the researcher undertook a cluster analysis of the responses to the third questionnaire to uncover whether any similarities in viewpoints existed among the participants. The data was cluster analyzed using both hierarchical (complete linkage and single linkage) and K-means clustering techniques. Results from these analyses revealed two distinct clusters. The majority (79%) of the participants were clustered in group 1. The focus of this group seems to be on the characteristics of entrepreneurship. Group 1 looked at what happened in the situation. This group indicated that a situation was entrepreneurial if they could answer “yes” to these questions: Is there an entrepreneur involved? Is there innovation? Is there growth? Is there uniqueness? The other group, group 2, focused on the outcomes of entrepreneurship. Group 2 saw a situation as entrepreneurial only if value was created or if someone gained.
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FAMA joins hands with Keningau ginger growers
Daily Express News. (2018, February 24). FAMA joins hands with Keningau ginger growers. Retrieved from http://www.dailyexpress.com.my.