STRUCTURAL INTERVENTIONS FOR FAVOURABLE SOCIOCULTURAL INFLUENCES ON INDIAN ENTREPRENEURS

Dr. Shradha Shivani Lecturer, Department of Management, Birla Institute of Technology, Mesra, Ranchi, India. Dr. S. K. Mukherjee Vice Chancellor, Birla Institute of Technology, Mesra, Ranchi , India. Dr. Raka Sharan Professor (retd.), Indian Institute of Technology, Kanpur, India.

Abstract
There is a general agreement among experts that socio-cultural influence on the personality and general behaviour of people in India is very strong. However, experts have arrived at contradictory conclusions regarding whether these influences have been favourable or unfavourable for the growth of entrepreneurship in Indian society. Empirical evidence regarding the role is also inadequate and therefore inconclusive as well. It cannot be denied that there is a growing need in this country to create and maintain a sociocultural environment that would help in building a wider base of population capable of successful entrepreneurial behaviour and willing to accept it as their profession. In the above background an empirical study was conducted using a sample of 200 small entrepreneurs of Ranchi, the capital city of Jharkhand, one of the lesser-developed states of India. The study involved a comparative measurement of levels of salient entrepreneurial traits and entrepreneurial success achieved by male and female entrepreneurs, examining links between these variables and socio-cultural factors like Caste, Religiosity, Family structure and Family support. The findings suggest that the socio-cultural factors definitely influence the entrepreneurial behaviour. However, It is also observed that the nature of these factors and their influence is such that appropriate structural interventions can make all these sociocultural attributes play a favorable role for growth of entrepreneurship in the Indian society. The authors have made some observations on the policy implications of the findings and they wish to share this information with the international community, such as the present forum for wider support.

STRUCTURAL INTERVENTIONS FOR FAVOURABLE SOCIOCULTURAL INFLUENCES ON INDIAN ENTREPRENEURS

I. INTRODUCTION Desirable rate of economic growth calls for rapid emergence of a multitude of enterprises in all walks of life. This requires the creation and maintenance of an environment that is conducive to growth of existing enterprises and would help build up a wider base of population capable of successful entrepreneurial behaviour. Lately the concept of culture of entrepreneurship has received prominence and social scientists have observed that an entrepreneur is a product of the sociocultural milieu Many economists now discuss the role of non-economic factors in economic growth, including concepts developed in Sociology and Psychology (Lipset, 2000). In the above context, the views of Max Weber (1864-1920) are relevant. A thesis suggested by Weber is that: Given the economic conditions for the emergence of a system of rational capital accumulation, whether or not such growth occurred in a systematic fashion would be determined by the values present. Structural conditions make development possible, while cultural factors determine whether the possibility becomes an actuality (Lipset, 2000). This means that an appropriate socio-cultural environment is a prerequisite for industrial or economic growth. The event of enterprise creation, the essential activity in entrepreneurship, can therefore be seen as a consequence of congruence between environmental conditions and the entrepreneurial behaviour of individuals determined by their socio-cultural background. Inspired by Webers proposition that religion, norms and values, behavior, and economic development are all interconnected, a number of experts reported their views on this relationship. Mclelland (Mclelland, 1961), Berna (Berna, 1960), and Richard Fox (Fox, 1969) have also related economic progress with culture. They tried to explain the economic backwardness of India by linking it with the Indian culture. Some of these scholars argued that the spirit of enterprise was inhibited among the indigenous population of India by the religious philosophy of resignation embodied in the doctrine of karma and by the rigid social organization of the caste system and the joint family. For instance, it has been observed by some of them that the tradition bound Indian society offered little freedom of choice of profession to its population. It is the caste that determined the occupation for its members, especially in the tradition bound families (Weber1958, Tripathi, 1992). Consequently, the social base of entrepreneurial growth has remained very limited in India Tripathi has reported that the Indian personality, by and large, remained unentrepreneurial, if not anti-entrepreneurial', (Tripathi, 1992). McClelland argued that Indians lacked Achievement Motivation due to the sociocultural influences on them. (McClelland, 1969). On the contrary, a few other scholars like Satish Saberwal (Saberwal, 1976), G.K. Chadha (Chadha, 1986), Streefkerk (Streefkerk, 1985) have rejected Webers thesis. They were of the opinion that structural conditions and not the cultural conditions determine whether entrepreneurship will flourish in a society or not. Therefore as presented in the above discussion different researchers have arrived at contradictory conclusions regarding the role of sociocultural factors in supporting and promoting entrepreneurship, particularly in India. At the same time empirical evidence

regarding the role and the scope for structural interventions for influencing the sociocultural factors for promotion of entrepreneurship is also inadequate and therefore inconclusive as well. However, it cannot be denied that there is growing need in this country to create and maintain an appropriate environment that is conducive to growth of existing enterprises and would help build up a wider base of population capable of successful entrepreneurial behaviour. It would be meaningful to empirically examine the possible links between growth of entrepreneurship and sociocultural factors like Caste, Religiosity & Perceived Family support and to identify the Structural interventions that can be designed to make the influencing sociocultural attributes play a favourable role for growth of entrepreneurship in India It is common knowledge that the proportion of women in the entrepreneur population of India is miniscule. In this context it would be relevant to find out whether there are any differences between Indian male and female entrepreneurs with respect to the levels of success achieved by them. In case if any differences are observed it would be interesting to find out whether these differences are due to sociocultural or structural reasons. II. OBJECTIVES AND METHODOLOGY In the above background an empirical study was conducted on the entrepreneurs of Ranchi, the capital city of Jharkhand, erstwhile a part of the state of Bihar in India. The study involved a comparative measurement of levels of entrepreneurial traits and success achieved by male and female entrepreneurs, examining links between these variables and a few sociocultural factors like Caste, Religiosity, Family structure and Family support. The scope for structural interventions for favourable influence of sociocultural factors was explored. Several measurement scales were used in the study. The design of the scales was based on review of relevant literature and consultation held with a group of five judges who were representatives of Government support agencies, officials of the Ranchi chamber of commerce and one expert academician in the subject. The scales are described in the annexure. A random sample of 200 entrepreneurs was selected from the directory of Small Scale Industries Association of Ranchi. The sample consisted of 150 male entrepreneurs and 50 Female entrepreneurs. Relevant information was collected from the respondents with the help of a semistructured Interview Schedule. The findings reported in this paper are from a larger project carried out during 2002-04. III. EMPIRICAL FINDINGS Success of the Entrepreneur Entrepreneurial success can be defined in many different ways. Comparison of the levels of success achieved by entrepreneurs is a difficult task. One may use some quantified performance indicators like financial performance, awards won or intangible measures like happiness, satisfaction etc. that may be difficult to quantify. On review of scales used for measurement of entrepreneurial success by various Indian researchers (Akhouri 1979, Rao1986, Kumar 1990), a set of 3 key variables was selected for measurement of success of the respondents of this study.

These variables are, Net Profit (average of last 4-5 years), Turnover growth rate (average of last 4-5 years) and Diversification level of their enterprises. Net Profit and Turnover growth were used in almost all the above-mentioned scales and these are variables that are a function of some of the other measures like labour productivity, raw material productivity, etc used in the scales referred above. Diversification level was included along with the other two financial variables because measurement of entrepreneurial success would remain incomplete without a measurement of the amount of innovation and risk taking exhibited by the entrepreneur, as these are two important characteristic features of entrepreneurship. This is as per a very widely accepted definition of the term Entrepreneur, given by Hisrich & Brush. Entrepreneur is a person who creates something different with value by devoting the necessary time and effort, assuming the accompanying financial, psychic and social risks, and receiving the resulting rewards of monetary and personal satisfaction (Hisrich and Brush; 1978). Diversification decision of the entrepreneur is a suitable indicator of innovativeness and risk taking propensity of the entrepreneur. The findings regarding comparative levels of Net Profit, Turnover Growth and Diversification level achieved by the respondents is presented in Figure 1, 2 and 3. Male respondents have managed to earn relatively higher levels of profit and Turnover Growth as compared to the female respondents. There is no significant difference in the level of diversification achieved by the two groups. As presented in Figure 4 there is a striking difference between the male and female respondents regarding their extent of Success. Male entrepreneurs have been found to be more successful among the respondents. The chi square results agree to the significant difference between the two sets of respondents. Hence one may conclude that entrepreneurial performance can be differentiated on the basis of gender. The reasons for this difference may be due to differences in the Sociocultural attributes of the two sets of respondents, differences in their entrepreneurial traits or because of differences in access to infrastructure support for male and female respondents. This will be explored later in this discussion.

Socio-cultural Attributes and Success

Religiosity Religion is an integral part of a cultural system. It is important because it promotes social solidarity and reinforces social norms and values. Religion makes people share common beliefs and thus a common value system It is widely held by some western observers like Max Weber that India's spiritualism, philosophy of renunciation, fatalism and asceticism constitute insurmountable obstacles to material progress of the country (Singer; 1956). Following this analysis of Weber a few other researchers like Dwijendra Tripathi, have also argued that, because of the religious philosophy of resignation embodied in the doctrine of Karma and the rigid social organization of the caste system the Indian personality remained largely unentrepreneurial if not anti entrepreneurial (Tripathi,

1992). Similarly. McClelland was of the opinion that the presence of a specific motivational structure, the desire to achieve purely for the sake of achievement -- i.e. the `achievement motivation' -- is of critical importance to successful entrepreneurship and he said that Indian artisans lacked entrepreneurial values and motives, a conclusion he based on his experience with handloom weavers in Orissa and artisans in Kakinada in south India (Mclelland and Winter, 1969) But these assertions are contradicted at least on two counts. First, not all Hindu scriptures teach doctrines of self-denial or the cessation of desire in order to achieve personal salvation. Secondly, the secular doctrine abounds in works like Kautilya's, "Arthasastra", the "Rig-Veda and Bhagavat Gita" (Rao, 1986, p-18). Kunkel describes the reasoning of western observers who find the tenets of the Hindu religion as responsible for India's economic backwardness in the following words, The sacred literature of India contains values which are internalized by the people who then act in accordance with these values, and thus India is economically stagnant, and there is little hope of economic growth" (Kunkle, 1965). However, he also points out that the above reasoning is based on an assumption for which there is no objective evidence. Contrary to the western view, H.W. Singer (Singer, 1953), Srinivas (Srinivas, 1962) and others argue that Indian population by and large is as materialistic in its daily life as its western counterparts. Singer states that, "The Indian world view encompasses both material and spiritual values, and these can be found in the behaviour of the ordinary Indian existing side by side and in functional interdependence. Further he points out: A society dominated by a philosophy of renunciation need not be a society of ascetics. In India, ascetics and holy-men have never constituted more than a tiny fraction of the population. There have always been a sufficient number of householders willing and able to do the world's work. And while the ideals of asceticism may indirectly influence the general population, not all of these influences oppose social reform and economic development" (Singer; 1953,p-83). Milton Singer argued on the basis of an empirical study conducted by him in Madras that Hindu industrialists in Madras compartmentalize their religious lives and their business activities (Siger, 1972). Timberg (Timberg, 1978) and Saberwal (Saberwal, 1976) had altogether rejected Webers thesis that religion, norms and values, behavior and economic development are all interconnected. They were of the view that Indias economic backwardness was due to certain structural conditions that were unsuitable for entrepreneurship and not because of social or cultural systems prevailing in the country. While the above arguments have been forwarded, nothing conclusive has emerged. The views of scholars regarding the influence of Indian religiosity on economic success are conflicting. However, the fact remains that Indian economy remained stagnant for centuries for which historically various explanations have been suggested of which religion is only one. Foreign rule extended over a long period is another. Lack of modern educational facilities and other structural facilities for growth of entrepreneurship is one of the consequences of foreign rule. Social and

political institutions, which were not conducive to economic development, are the third and perhaps the most conclusive explanation (Rao; 1986, p-19). As presented in the previous section, many scholars consider religion as an important sociocultural attribute influencing economic development. Although a cause effect relation cannot be tested between the two variables; it would be appropriate to examine the relation between religiosity and success levels achieved by the respondents of this study in a descriptive manner. The religiosity of each respondent was measured by seeking information on his religious habits. It was measured on a three-point scale with categories of high, medium and low. The measurement scale is explained in the annexure. The Figure 5 shows the respondents' religiosity and the extent of entrepreneurial success achieved by them. Almost 90 percent respondents were found to have high religiosity or Medium Religiosity. Only a small minority of 10 percent respondents was found to have low religiosity. All the respondents said they had faith in the power of God. There is no distinct relationship between religiosity and success level of the respondents. The distribution of respondents in different levels of success for all religiosity categories is the same. Although, statistically there is no significant relationship between religiosity and success but almost all the respondents agreed that their religious functions, norms, practices and Gods power helps them to be disciplined and gives them the confidence to overcome difficulties. It may be concluded that religion is definitely not a barrier to entrepreneurial success in India; rather it is a source of strength for entrepreneurs. This conclusion is valid for both Male as well as Female entrepreneurs. Cross cultural research involving a comparative study of performance & success of entrepreneurs from two different cultures can throw more light on the relationship between religiosity or religion and entrepreneurial success. Caste Among the social institutions that are held responsible for India's backwardness, the caste system is considered the most prominent one. All other social factors that inhibited development are only offshoots of or closely related to the caste system. Since caste is an important sociocultural attribute, therefore information regarding caste of the respondents and success achieved by them has been analyzed to see the influence of caste level on success achieved by the respondents. The grouping of castes is explained in the annexure. The caste composition and success level of respondents is presented in Figure 6.As per the Figure 6 in the forward caste male category a clear majority of 53.57 % are in the very successful category. Whereas, only 31.25 % and 15.18% belong to the successful and less successful categories. On the other hand among the male respondents of the backward caste category, largest number of cases are in the successful category i.e. 47 % and only 23.5% and 29.4% are in the Very successful and less successful categories respectively. Among the females, majority of them belong to the forward caste and are equally distributed in all categories of success. Only a small minority of 8 respondents were of

the SC category, out of whom the majority are in the successful or Very successful category. In the others category also most of the males are in the very successful category, i.e.46.15%. The above figures suggest that the male and female respondents belonging to forward caste are found in all categories of levels of success. There are few respondents from backward, scheduled and others caste group but most of them are placed in the very successful and successful category as per their performance. Statistical results did not show any significant relationship between caste and success level for male or female entrepreneurs. Although these figures do not indicate any apparent relation between caste and success there are certain implications. The data suggests that an overwhelming majority of respondents are from high caste while low caste respondents are very few in number. In this context, it would be appropriate to point out one of the findings from general discussions with the respondents and also with some experts. It was observed that high caste entrepreneurs are able to continue with their enterprise because of their caste orientation. Even if they face failure at a certain stage they are able to overcome them because of the tacit support of caste groupings. Whereas, the low caste entrepreneurs are unable to continue in such situations because of the lack of such caste support. Hence their actual number is less. The findings of this study suggest that caste does not influence the success level that can be achieved but it does influence the supply of entrepreneurs and the survival of the enterprise in difficult situations. Therefore these findings do not conclusively support or reject the views of Weber and other researchers who consider the Indian caste system as a hindrance to entrepreneurship. This requires a systematic study of those individuals who had the desire to become an entrepreneur but could not do so and an investigation of the reasons for the failure of entrepreneurs who could not survive when faced with difficult situations. The findings of this study are consistent with the views of a few other researchers who have conducted their study in some other parts of the country and have presented evidences of individuals from lower castes emerging as successful entrepreneurs. Holmstrm, observed that `In some cases artisan castes of Delhi set up manufacturing units for light engineering products like ball bearings and motor parts...' (Holmstrm, 1985). This transition from artisan to industrialist occurred in other parts of India as well. Satish Saberwal described in detail how, after 1930, carpenters and blacksmiths in a city of Punjab worked their way up to become industrial entrepreneurs (Saberwal, 1976). To a large extent this is true for the state of Punjab as a whole, as is shown in the study by G.K. Chadha, who described how artisans like blacksmiths, masons, and carpenters, turned into good engineers who played a vital role in the regeneration of the agro-industry in Punjab, setting up small industrial workshops, many of which in due course grew into full-fledged industrial enterprises (Chadha, 1986). In his study on small-scale industrialists in two small Gujarat towns, Hein Streefkerk also showed that artisan caste members, namely carpenters and blacksmiths, were the first to become actively involved in the transition to industrial production (Streefkerk, 1985). Based on the above discussion one can reject the argument that members of artisan castes were, and are, unable for cultural and socio-psychological reasons to make a contribution to industrial development. However, it may be concluded that caste influences entrepreneurial growth and

sustained entrepreneurial success and that there is need for designing appropriate structural interventions to deal with this influence. Family Support A person imbibes certain norms and values and the way of life practiced in a religion or society through his upbringing in the family. Many sociologists have regarded family as the corner stone of society. "It forms the basic unit of social organization as in the society it's the responsibility of family as a social organization to internalise the society's culture and hence structuring of human personalities" (Haralambos, 1980). During the exploratory interviews with the respondents, a hypothesis that emerged was that the moral and financial support received by them from their family was valuable for them and it played a significant role in enabling them to carry out their entrepreneurial activities. To test this hypothesis, the level of Family support (Financial and Moral) received by the respondents (as perceived by them) was measured and the link between level of perceived family support and levels of success achieved by the respondents was explored. The scale used for the measurement is described in the Annexure. Figure 7 & 8 present the level of family support and its relation with the level of entrepreneurial success achieved by the respondents. Overall we find from figure 7 that the largest proportion of respondents i.e. 44.5 percent of them have received High level of family support for taking up entrepreneurship. Some differences are observed between the male and female respondents with respect to family support. Among the males a large proportion of them i.e. 49.33 percent have said that they received high level of support from their families whereas the majority of the female respondents i.e. 52 percent of them have said that they received only moderate support from their families. According to the chi-square results this difference in the level of family support received by Male and Female respondents has been found to be statistically significant. This difference could also be one of the reasons for lesser degree of success achieved by the Female respondents. This can be confirmed by analysing the relation between Success and Perceived Family support as given in Figure 8. It is obvious from figure 8 that the majority of the respondents received a lot of family support morally as well as financially to carry on their entrepreneurial activity. But, the more successful respondents were found to have received greater family support as compared to the less successful ones. Both chi square results and correlation between the family support received by the respondents and their extent of success show positive significant relationship. Another inference that can be drawn from the above information is that one of the reasons for less degree of success achieved by Female respondents could be because they received less degree of family support as compared to their male counterparts. In the context of Family Support it would be pertinent to point out that the majority of the entrepreneurs who have received high support are from extended families. These respondents probably benefited more from the family because of the family structure. Joint families seem to have encouraged entrepreneurship in this region. This is contrary to the views of researchers like

Dwijendra Tripathi who came to the conclusion that the joint family system of Indian society is an important factor in explaining India's retarded economic growth and the unentrepreneurial personality of Indians (Tripathi, 1992). On the other hand Milton Singer from his study of entrepreneurs of Madras concluded that the joint family organization plays a positive role in promoting industrial entrepreneurship (Singer, 1972). The findings of Singer suggested that joint family units provide financial, physical and social security to make entrepreneurial activity a success. Most of the respondents belonged to the extended type of families and only a few were of nuclear types. Many of these nuclear families had also recently branched out from extended families. The respondents mentioned that they got all kinds of support from the members of their extended families. Thus, one of the important factors influencing the success of an Indian entrepreneur is the support from his family and the type of family he belongs to. This observation indicates the social roots of Indian entrepreneurship. Education Along with the informal learning in a family, the child undergoes formal learning through his education. Education is considered an important socio-cultural factor that influences the performance of an entrepreneur. It is believed that education received in schools and college inculcates the value of achievement and the value of equality of opportunity and also enables people to acquire various types of technical skills. These values and skills have an important function in this advanced industrial society, as it requires a highly motivated achievement oriented work force, equipped with the required skills. Hisrich and Peters have observed that although formal education is not necessary for starting a new business, as is reflected in the success of many entrepreneurs who were high school drop outs, found through out the world, it does provide a good background particularly when it is related with the field of the venture. (Hisrich and Peters, 1998) The Figure 9 presents the extent of success in relation to the education level of the respondents of this study. As presented in Figure 9 the statistical results (chi square test) show a significant relationship between the educational level of the respondents and their level of success. Respondents with Higher levels of education have been found to be more successful than those with lower levels of education. IV. CONCLUSIONS: SOCIOCULTURAL ATTRIBUTES AND SUCCESS The findings of this study suggest that there is a definite relation between sociocultural attributes of entrepreneurs and the level of success achieved by them. It is observed that caste does not influence the success level that can be achieved but it does influence the supply of entrepreneurs and the survival of the enterprise in difficult situations. The representation of the lower castes in the entrepreneur population is very low. Therefore these findings do not conclusively support or reject the views of Weber and other researchers who consider the Indian caste system as a hindrance to entrepreneurship.

Perceived Family support and Education level are two very important factors influencing the success of entrepreneurs. The more successful respondents were found to have received greater family support as compared to the less successful ones. An inference that can be drawn from the above findings is that one of the reasons for less degree of success achieved by Female respondents is because they received less degree of family support as compared to their male counterparts. Almost all those who have received high support are from extended families. It is indicated that the joint family system of India has not hindered the growth of entrepreneurship. Highly educated respondents and respondents with professional qualification were found to be more successful than the lesser educated ones. Religiosity doesnt have significant correlation with success although all the entrepreneurs are found to have faith in God and religiosity was high among the entrepreneur population in general. Indian religiosity is definitely not a barrier to entrepreneurial success; rather it is a source of strength for the entrepreneurs. The above conclusions indicate that there are certain sociocultural attributes like Caste, Perceived Family support and Education that influence the growth of entrepreneurship whereas others like Indian religiosity and the Joint family system have no influence but they definitely do not hinder entrepreneurial activities. The implications of these findings for structural interventions will be presented in a later section of this paper. V ENTREPRENEURIAL TRAITS Most experts have agreed that entrepreneurs possess certain distinctive qualities. As reported by Joseph Schumpeter, John Stuart Mill claims that entrepreneurship requires "no ordinary skill," and he laments the fact that there is no good English equivalent word to encompass the specific meaning of the French term Entrepreneur. (Schumpeter, 1951). Alfred Marshall suggests that the skills associated with entrepreneurship are rare and limited in supply. He claims that the abilities of the entrepreneur are "so great and so numerous that very few people can exhibit them all in a very high degree". Marshall, however, implies that people can be taught to acquire the abilities that are necessary to be an entrepreneur. (Marshall, 1994) Various studies have been conducted to identify the important entrepreneurial traits. There is a general agreement among writers that the four most important traits of an entrepreneur are his Risk taking propensity, Innovativeness, Achievement orientation and Managerial skills. If one tries to analyze how people acquire these traits, literature suggests that both structural as well as sociocultural factors play a role. For example, Max Weber (1958) suggested that: Given the economic conditions for the emergence of a system of rational capital accumulation, whether or not such growth occurred in a systematic fashion would be determined by the values present. Structural conditions make development possible, while cultural factors determine whether the possibility becomes an actuality. (Lipset, 2000) This means that an appropriate socio-cultural environment is a prerequisite for industrial and economic growth. The event of enterprise creation, the essential activity for entrepreneurship, 10

can be seen as the consequence of congruence between environmental conditions and the entrepreneurial behavior of individuals determined by his socio-cultural background (Robinson et al 1991). From the above discussion it can be inferred that an individual develops the above-mentioned entrepreneurial attributes through his upbringing as he undergoes the process of socialization in a given society and appropriate values and norms of social context support and promote entrepreneurship. Risk Taking Propensity: Taking decisions and acting on an uncertainty is understood as a risk-taking activity. Risk taking propensity is undoubtedly the most widely discussed entrepreneurial trait. Although it has not been empirically established that Risk taking is a distinguishing characteristic of entrepreneurs there is almost universal agreement on the fact that it is an essential trait found among entrepreneurs all over the world. (Hisrich & Peters, 1998.) Risk taking, whether financial, social, or psychological, is an integral part of the entrepreneurial process. All recent definitions of entrepreneurship mention a risk-taking component. Cantillon, who was the first to formally define the term Entrepreneur, explained that the entrepreneur is a specialist in taking on risk. He "insures" workers by buying their products (or their labor services) for resale before consumers have indicated how much they are willing to pay for them. The workers receive an assured income (in the short run, at least), while the entrepreneur bears the risk caused by price fluctuations in consumer markets. (Cantillon, 1755). The U.S. economist Frank H. Knight refined this idea. To Knight, entrepreneurs bear the responsibility and the consequences of making decisions under conditions of uncertainty, that is, where the uniqueness of the situation denies an objective, qualitatively determinate probability.(Knight, 1921) He distinguished between risk, which is insurable, and uncertainty, which is not. Risk relates to recurring events whose relative frequency is known from past experience, while uncertainty relates to unique events whose probability can only be subjectively estimated. Changes affecting the marketing of consumer products generally fall in the uncertainty category. Individual tastes, for example, are affected by group culture, which, in turn, depends on fashion trends that are essentially unique. Insurance companies exploit the law of large numbers to reduce the overall burden of risks by "pooling" them. For instance, no one knows whether any individual, fortyyear-old, will die in the very next year. But insurance companies do know with relative certainty how many forty-year-olds in a large group will die within a year. Armed with this knowledge, they know what price to charge for their life insurance, but they cannot do the same when it comes to uncertainties. Knight observed that while the entrepreneur can "lay off" risks much like insurance companies do, he is left to bear the uncertainties himself. He is content to do this because his profit compensates him for the psychological cost involved.

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To measure risk-taking propensity of respondents the Risk Attitudes Inventory designed by Gene Calvert, (1993) was used. (Ref. Annexure). Along with Kogan-Wallach CDQ and Jackson Personality Inventory (JPI) this is another popular tool for measuring Risk Taking Propensity. The max. Score was 15. The higher the total score the more is the Risk taking Propensity. Therefore all those who scored from 0-5 were categorized as having Low Risk taking propensity, those with scores between 6-10 as having moderate Risk taking Ability and those with 11-15 as High Risk Taking propensity. The Risk Taking Propensity of the Respondents is presented in the Figure 10. Overall we find that a substantial proportion of respondents (43%) have low level of Risk Taking propensity. The difference between the Male and Female respondents was not found to be significant. This suggests that people in this region do not like to take high levels of risks for their ventures. Probably, this is the reason why the entrepreneurial profession is not a very sought after one among people here, as suggested by the officials of support organizations located in the district. It was observed that 66.5% of the respondents are engaged in Non Manufacturing types of enterprises while only 33.5% own a manufacturing enterprise. One may conclude from the above that the preference of the respondents of this study for Non-Manufacturing types of enterprises is because of low level of risk Taking Propensity among them because non-manufacturing businesses are perceived to be less risky as they require lower initial outlay and have shorter breakeven period. In this context one needs to examine whether there are any social origins of such low levels of Risk taking propensity. The above observation regarding preference for Non Manufacturing businesses is consistent with the findings of a few other studies conducted in various other regions of the country. Some of these researchers have explained the reasons for this observation by linking it with the traditional approach of the Indian businessmen towards trade and commerce. A debate has ensued among researchers regarding the preference of Indian entrepreneurs for manufacturing or nonmanufacturing type of enterprises. For example, According to Mario Rutten, studies conducted on Indian entrepreneurs emphasized the specific commercial style of Indian traders, which was said to stand in their way of establishing modern businesses. These studies argued that Indian moneylenders and traders consider the production process to be something fixed and static and are not prepared to invest more than the absolute minimum amount of capital in installations and machines. This preference for rapid profits closely parallels the traditional Vaishya ethic. (Mario Rutten, 2001) James Berna, argued that Indian entrepreneurs with a background in trade are opportunistic businessmen with very short time horizons, interested only in fast turnover and quick profits, completely unconcerned with technology, unwilling to invest more than the bare minimum in fixed capital, and still preoccupied far more with trade than with industry (Berna 1960). This was also expressed by Leighton Hazlehurst , who concluded, on the basis of research among Banias in a Punjab town, that rural traders invested their capital in productive enterprises only very reluctantly (Hazlehurst, 1966). Again Richard Fox, who studied Banias in another small North Indian town, also argued that these businessmen were more willing to accept smaller

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profits as long as they covered essential expenses, rather than to invest in more profitable longterm enterprises in which they risked losing their investment (Fox, 1969). At the same time Rutten also states that some studies done in the 70s and 80s (For eg. Van der veen, 1976) argued that this short-term commercial orientation of Indian entrepreneurs does not have social origin. Rather, it was a response to structural factors such as imperfect markets or lack of an adequate institutional framework. These authors argued that, if the commercial climate is favorable -- that is, there is an availability of market incentives, governmental support, and sufficient banking and transport facilities -- industrial entrepreneurship is bound to develop. In this approach the development of entrepreneurship -- that is, the employment of capital and other productive means for industrial production -- was placed in a broader political and economic frame. There is evidence of Indians, both males and females, setting up a host of manufacturing enterprises wherever structural factors favored such businesses. To a large extent this is true for the states of Delhi, Punjab and Gujarat that are a few relatively more industrially advanced states of India. This is shown in the study by G.K. Chadha, who described how artisans comprising blacksmiths, masons, and carpenters turned into good engineers who played a vital role in the regeneration of the agro-industry in Punjab. They set up small industrial workshops, many of which in due course grew into full-fledged industrial enterprises (Chadha, 1986). In his study on small-scale industrialists in two small Gujarat towns, Hein Streefkerk also showed that artisan caste members, namely carpenters and blacksmiths, were the first to become actively involved in the transition to industrial production (Streefkerk, 1985). Satish Saberwal described in detail, how after 1930, carpenters and blacksmiths in a city of Punjab worked their way up to become industrial entrepreneurs (Saberwal, 1976). One may therefore conclude that it is not the sociocultural context that is the determinant of this trait but the whole structural environment that has probably made the people of this region less inclined towards risk taking in general. Risk Taking and Environment Uncertainty The above conclusion is further supported by the findings on the opinion of the respondents regarding the level of uncertainty in the general environment, i.e., the social, political, legal, and economic environment of this region. When asked to rate the level of uncertainty in the general environment as perceived by them, the responses obtained were as presented in Figure 11 A large majority, that is, 75.5 percent of respondents considered the uncertainty in the environment to be high or very high. The difference between male and female respondents is not found significant. Considering the premise that higher the levels of uncertainty in a situation lower the propensity to take risks, one may interpret from the above findings that the Risk taking propensity of the entrepreneurs is low because the level of uncertainty in the general environment in which they exist is high as perceived by them.

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Innovativeness The concept of innovation and newness is an integral part of entrepreneurship. It was Shcumpeter who associated innovativeness with entrepreneurship for the first time. According to him Innovativeness involves doing something new. The newness can consist of anything from a new product to a new distribution system to developing a new organizational structure. (Schumpeter, 1934) There is a lot of disagreement regarding the definition of innovation. Kirzner suggests that the process of innovation is actually that of spontaneous "undeliberate learning" (Kirzner, 1985). Thus, the necessary characteristic of an entrepreneur is alertness, and no intrinsic skills-other than that of recognizing opportunities, are necessary. Other economists of the innovation school claim that entrepreneurs have special skills that enables them to participate in the process of innovation. Leibenstein claims that the dominant, necessary characteristic of entrepreneurs is that they are gap-fillers: they have the ability to perceive where the market fails and to develop new goods or processes that the market demands but which are not currently being supplied. (Lieibenstein, 1966) Peter Drucker referred to the process of innovation as it occurs in developed countries as, "creative imitation of innovations made in the developed countries." The term appears initially paradoxical; however, it is quite descriptive of the process of innovation that actually occurs in the developing nations. Creative imitation takes place when the imitators better understand how an innovation can be applied, used, or sold in their particular market niche (namely their own countries) than do the people who actually created or discovered the original innovation. (Drucker, 1985) The innovativeness of the respondents was measured using a scale consisting of six indicators presented in detail in annexure. The innovativeness level was categorized as high, medium and low. Figure 12 presents the Gender wise distribution of the respondents in the 3 categories of innovativeness levels. From the Figure 12 one can observe that a very low 19 percent and 18 percent each of male and female respondents are highly innovative. It is interesting to note that the chi square results show that there is no significant difference in the innovative traits of male and female entrepreneurs. It was also observed that all those who are highly innovative have high level of education as well (having acquired 13 or more years of education). This probably means that education and training can help inculcate innovativeness also. Most of the respondents are showing their trait of innovativeness by locating new ways to market their products either by identifying a new market away from the state or by identifying new types of channels. Some of the respondents identified new sources of raw materials, new ways of motivating their employees and new ways of keeping records. Innovations in the form of developing new innovative products or new ways of manufacturing or offering new kind of service were very few.

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Achievement Orientation The need for achievement is also a very widely discussed characteristic of entrepreneurs. High achievers are individuals with high drive and high activity level, constantly struggling to achieve something, which one could call as their own accomplishment. They like to be different from others and strive to accomplish goals which are not otherwise very easy to achieve (Murthy; 1989) According to David C. McClelland and many other social scientists, entrepreneurs have been found to possess a relatively higher level of achievement orientation than other professionals. McClelland developed a theory of needs of which the need for achievement was one. He described this need as the drive to excel, to achieve in relation to a set of standards and to strive to succeed. He argued that the presence of a specific motivational structure, the desire to achieve, purely for the sake of achievement -- i.e. the `achievement motivation' -- is of critical importance to successful entrepreneurship (McClelland, 1962). McClelland differentiates high achievers from low achievers on the basis of certain characteristics. According to him high achievers set moderately challenging goals for themselves tasks of intermediate difficulty and those where the probability of success is 0-5.They are not gamblers and they dislike succeeding by chance. High achievers also seek situations in which they can attain personal responsibility for the work performed by them. They also want rapid feedback on their performance (McClelland, 1961). To measure the achievement orientation of the respondents a scale was designed using statements based on the above-mentioned attributes of High Achievers as proposed by McClelland in his book The Achieving Society The details of the scale are given in annexure. The findings regarding this trait are presented in the Figure 13. As presented in Figure 13 almost half of the respondents i.e. 49.5 percent of them have High level of Need for achievement and only a low 15.5 percent have low level of Achievement orientation. This means that the overall level of need for achievement is relatively high among the respondents. But there is a marked difference between the male and female respondents with respect to their level of this trait. Majority of the Male Respondents, i.e. 54 percent of them have high level of achievement orientation whereas the majority of female respondents have medium level of Achievement orientation.Thus there seems to be quite a lot of variation in the achievement orientation between the Male and Female respondents. This has also been statistically confirmed by the chi square results. The likely reason for this difference was explained by analysing the level of family support as presented in the following section. Achievement Orientation and Perceived Family support A person imbibes certain norms and values and the way of life practiced in a religion or society through his upbringing in the family. Many sociologists have regarded family as the corner stone of society. "It forms the basic unit of social organization as in the society it's the responsibility of

15

family as a social organization to internalize the society's culture and hence structuring of human personalities" (Haralambos, 1992,). Depth interviews conducted with a few female entrepreneurs during the preliminary investigation of the study had indicated that acceptance of their profession by the family seemed to be an important precondition for them to opt for entrepreneurship. At the same time it was also observed that the female entrepreneurs considered Moral and financial Support of the family as very important for them. In the later stages a measurement of the levels of Family support received by the male as well as female respondents (as perceived by them) was undertaken. The scale used for the measurement is described in the annexure. The findings are presented in figure 14. It was observed that the female entrepreneurs were found to have received lower level of family support and this difference between Male and Female respondents is statistically significant. It was also observed that Family support and acceptance of their profession by the family is particularly important for females as 80 percent of the female respondents said that they would not have opted for entrepreneurship if their family had not agreed with their idea of becoming an entrepreneur. Amongst the males only 55 percent had given this response. From the above discussions an indirect inference may be drawn regarding the reasons for relatively lower level of achievement orientation among female entrepreneurs. Females probably do not aspire for more and more professional success or achievement because they are not assured of getting the required support from the family. Managerial Skills Managerial skills are also a very important trait of entrepreneurs. Managerial skills are required for ensuring smooth operations of the firm, effective planning, successfully coping with competition and for long-term survival and growth of an enterprise. These skills of the respondents were measured with the help of a specially designed scale using Robert Katzs classification of various types of managerial Skills (Katz, 1974). According to Katz there are three types of managerial skills, technical, human and conceptual skills. The measurement is explained in the annexure. The skill level was categorized into three major categories as high, medium and low. The findings regarding the levels of managerial Skills is presented in Figure 15. As presented in Figure 15 in case of this important skill required of entrepreneurs one finds that more than half of the respondents i.e. 51.5 percent of them possess High level of Managerial skills. Once again we can observe marked differences between the male and female respondents with respect to the levels of these skills among them. Female respondents have been found to possess lower levels of this skill. The low level of managerial skills among Indian women, especially conceptual skills and technical skills like inventory management etc., may be attributed to lack of entrepreneurial training, and lack of awareness due to poor networking ability and staying indoors most of the time.

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Entrepreneurial Traits and Success There is almost universal agreement regarding the fact that all the four traits discussed above is essential traits of entrepreneurs. But, there is no conclusive causal relationship that has been determined to establish the significance of these traits for entrepreneurial success. An attempt was made to quantify the relationship between different levels of entrepreneurial traits and degrees of success. A correlation analysis between the score of each trait and the success score achieved by the entrepreneurs in the sample was carried out. The findings (r values) are presented in the Figure 16 It is observed that level of risk-taking; innovativeness, achievement-orientation and managerial skills show a positive significant correlation with the success level of the respondents. The highest correlation of success has been observed with Risk Taking Ability of the respondents. VI Conclusions: Entrepreneurial Traits. Overall, it is observed that the respondents possess moderate levels of achievement orientation and managerial skills. However they (both Males and Females) have low Risk Taking Propensity and Innovativeness. Low level of Risk taking propensity can be linked with structural factors. Success achieved by the entrepreneurs is positively correlated with their levels of entrepreneurial traits. It is also found that Female respondents have comparatively lower levels of Achievement Orientation and Managerial Skills as compared to the male respondents. The low level of Achievement orientation could be because of lower level of family support received by the female respondents. The low level of managerial skills among women, especially conceptual skills and technical skills like inventory management etc., may be attributed to lack of entrepreneurial training and lack of exposure due to poor networking ability and staying indoors. The overall conclusion that can be drawn is that the family and the social context do influence the levels of entrepreneurial traits that in turn affect the success levels achieved by entrepreneurs. However it is also true that these traits are further influenced by external factors like a conducive economic environment and sufficient amount of encouragement and support offered by the facilitator organizations etc. Hence, the roles of the structural factors and the social background are equally important and complementary in promoting entrepreneurial activities. VII: Overview of the role of facilitator organisations The findings presented in the above sections support Webers thesis (See Chapter 1) that; Given the economic conditions for the emergence of a system of rational capital accumulation, whether or not such growth occurred in a systematic fashion would be determined by the values present. Structural conditions make development possible, while cultural factors determine whether the possibility becomes an actuality. (Lipset, 2000). At the same time, the findings have also

17

indicated that the nature of the sociocultural factors and their influence is such that appropriate structural interventions can effectively deal with them. Over the last fifty years a large variety of programmes have been designed and launched by the govt. for promotion of entrepreneurship throughout the country. These programmes include measures ranging from setting up of an elaborate network of institutional support infrastructure, to offering financial incentives to small and micro entrepreneurs. The salient aspects of the role of the support organizations functioning in Jharkhand state were reviewed in order to identify the suitable structural measures for desirable growth of entrepreneurship in the state. The assistance provided by the support organizations can be categorized as, Non - Financial assistance (Technical and other consultancy assistance) and Financial Assistance (- Arranging access to finance). Salient agencies that offer the above-mentioned assistance were studied. They are: Small Industries Service Institute, Ranchi, District Industries center, Ranchi and the Public Sector Banks of Ranchi. The prescribed role of the Small Industries Service Institute is to offer the following nonfinancial assistance: Providing technical services, Preparation of project reports, Conducting Management Development Programmes and Entrepreneurship Development Programmes, and General Consultancy, Economic information Services, Export promotion services, Modernization assistance, marketing.

Statistics regarding the various types of training programmes like Skill development programmes, Entrepreneurship development programmes, Management Development programmes and Motivational campaigns conducted by SISI during the period 2000-2004, were studied. It was observed that efforts are indeed being made by the promoter organizations to offer the required technical assistance and motivational training to prospective and existing entrepreneurs. However, the participation of women and members of backward and scheduled castes has been very low in almost all such assistance programmes. Only 1 percent of the female respondents said that they had attended an MDP conducted by the SISI. This may be one of the reasons why the women respondents of this study were found to have very low managerial skills. The participation of male as well as female participants in the motivational campaigns has been satisfactory. However the officials of the Institute observed that the motivation level of the participants of these programmes does not sustain and most of them (more than 96%) do not actually take to entrepreneurship. This is often because of inadequate family support and sometimes due to inability or lack of courage in the participants to take risks or make an extra effort to succeed as an entrepreneur. They were of the opinion that these traits are acquired largely by ones upbringing in a particular society and the social background of the applicant does play a significant role.

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The role of the District Industries Center (DIC) DIC in entrepreneurship development is: Registering the Business Units Subsequently acting as a liaison for various help that the business unit requires Coordinating with banks in forwarding loan applications in PMRY (a govt. sponsored scheme for encouraging self employment among youth) assistance, Coordinating with RIADA (Ranchi Industrial Area Development Authority) and other such agencies. Conducting training programs and seminars for the prospective and existing entrepreneurs either through tie-up with Institute of Entrepreneurship development, Small Industries Services Institute or on its own. The officials of the DIC indicated that the trend regarding the participation of women and members of scheduled and backward castes and the proportion of participants of these workshops actually setting up a business was the same as that in the case of SISI programmes. The number of loan applications received by the DIC and by the public sector banks, from female applicants and members of the scheduled and backward castes is negligible. The Bankers say that they are not able to achieve their targets regarding financing of small entrepreneurs because the number of applications received by them is very low. Majority of the applications are received from family members and close associates of existing entrepreneurs. VIII Desired Structural Interventions On the basis of the above findings it will be appropriate to observe that suitable structural interventions can make the influencing sociocultural attributes play a favourable role for growth of entrepreneurship in India. Measures need to be taken for widening the social base for entrepreneurship in India, assuring the potential and existing entrepreneurs, both male and female, of the required acceptance of their choice of career and support from their families. The kin oriented nature of the Indian society has to be recognised while designing any measures for encouraging the growth of entrepreneurship. It may be suggested, that the target for motivational campaigns for promotion of entrepreneurship should be the immediate family of the participant as well. This is specially required for females because 95 % of the female respondents in this study said that they would not have opted for entrepreneurship if their family had not agreed with their idea of becoming an entrepreneur. Amongst the males 55% had given this response. A definite conclusion that emerges from the above discussions is that the promoter infrastructure can be effective only if the target for its efforts is the society at large and not only those few who are already favourably inclined toward entrepreneurship. Specially designed campaigns need to be launched to educate the society as a whole regarding the merits of entrepreneurship as a profession and to make entrepreneurship a preferred choice of profession. The respondents of this study who are practicing entrepreneurs were found to possess relatively low levels of Risk taking propensity. It was also concluded in the discussions thereafter that this was largely due to unfavourable structural factors affecting them. It can therefore be

19

recommended that the promoter organizations need to give special attention towards building and maintaining a favorable structural environment for entrepreneurship to flourish in the region. The need for education cannot be overemphasized. As observed in this study education is a social factor that is found to influence the ability to introduce entrepreneurial innovations and to achieve entrepreneurial success. Another recommendation that can be made in this context is that the curriculum of schools at the primary and junior levels should be altered to incorporate theoretical content and exercises that would inculcate Risk Taking ability, Innovativeness and Achievement Orientation among the masses from the very childhood and to develop a positive attitude towards entrepreneurship as a profession. Probably a change needs to be introduced in the overall school education system to promote the above traits in the population at large. All the other sociocultural influences are not a barrier for entrepreneurial success but they definitely affect the supply of entrepreneurs, hence, there is need to build an environment where members from all castes and socio-economic strata, males and females, feel encouraged to opt for entrepreneurship as their profession and support the entrepreneurs among their family and acquaintances. TABLES AND FIGURES
Figure 1 PROFIT Gender High %age Medium Males 78 52.00 40 Females 18 36.00 13 Total 96 48.00 53 Chi square- 6.09 < 0.05 df = 2 %age 26.67 26.00 26.50 Low 32 19 51 %age 21.33 38.00 25.50 N=200 Total 150 50 200

Figure 2 TURNOVER GROWTH Gender High Percentage Medium Percentage Low Males 84 56.00 56 37.33 10 Females 20 40.00 16 32.00 14 Total 104 52.00 72 36.00 24 Chi square- 16.36 < 0.01 df = 2 N=200 Percentage Total 6.67 150 28.00 50 12.00 200

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Figure 3 DIVERSIFICATION LEVEL N=200 Gender High Percentage Medium Percentage Low Percentage Total Males 47 31.33 59 39.33 44 29.33 150 Females 10 20.00 19 38.00 21 42.00 50 Total 57 28.50 78 39.00 65 32.50 200 Chi square-3.56 > 0.05 df = 2

Figure 4 GENDER SUCCESS Gender Very %age Successful %age Less Successful Successful Males 76 50.67 49 32.67 25 16.67 Females 16 32.00 19 38.00 15 30.00 Total 92 46.00 68 34.00 40 20.00 Chi square-6.49 < 0.04 df = 2
Males Females

N=200 %age Total 150 50 200

Total

16.6 7 32.6 7 50.6 7

15. 00 19. 00

16. 00

20.0 0 34.0 0

46.0 0

Very Successful Successful Less Successful

Very Successful Successful Less Successful

Very Successful Successful Less Successful

Figure 5 RELIGIOSITY AND SUCCESS N=200 Religiosity Success Level Very Successful Successful Less Successful Total Chi Square-1.67 M 25 20 10 55 High %age 45.45 36.36 18.18 100 F 9 7 4 20 %age 45.00 35.00 20.00 100 df = 4 M 41 29 11 81 Medium %age 50.62 35.80 13.58 100 F 6 8 9 23 %age 26.09 34.78 39.13 100 M 7 3 4 14 Low %age 50.00 21.43 28.57 100 F %age 3 42.86 2 28.57 2 28.57 7 100

> 0.05

21

Figure 6 CASTE AND SUCCESS N=200

Caste M Success Level Very Successful Successful Less Successful Total 60 35 17 112 53.57 31.25 15.18 100 17 34.69 4 8 23.53 0 3 4 1 8 37.50 0 50.00 0 12.50 0 100 0 6 5 46.15 1 100.00 0.00 0.00 100 Forward Backward SC Others %age F %age M %age F %age M %age F %age M %age F %age

17 34.69 30.61 15 49 100

47.06 0 29.41 5 0 17 100 0

38.46 0 15.38 2 0 13 100 1

Chi-Square-2.15 > 0.05 df = 2

Figure-7

FAMILY SUPPORT
Gender High % age Moderate Males 74 49.33 62 Females 15 30.00 26 Total 89 44.50 88 chi square = 6.56 < 0.05 df = 2 % age Low % age 41.33 14 9.33 52.00 9 18.00 44.00 23 11.50 N=200 Total 150 50 200

Figure 8 FAMILY SUPPORT AND SUCCESS N=200

Family Support Very Successful M %age F %age
55.56 27.78 16.67 100

Successful %age F %age

Less Successful M %age F %age Total %age

89 88 23 200 44.50 44.00 11.50 100

43 58.90 10 High 24 32.88 5 Medium 6 8.22 3 Low 73 100 18 Total 9.00 %age 36.50 Chi-Square = 31.42 < 0.01

22 42.31 5 29.41 36.00 0 0.00 9 36.00 10 66.67 29 55.77 11 64.71 9 1.92 5.88 28.00 5 33.33 1 1 7 52 100 17 100 25 100 15 100 26.00 8.50 12.50 7.50

df = 4

22

Figure 9 EDUCATION LEVEL AND SUCCESS N=200

Education Success Level Very Successful Successful Less Successful Total Chi Square-50.67 M 33 5 1 High %age 84.62 12.82 2.56 F 9 1 0 %age 90.00 10.00 0.00 df = 4 M 36 39 16 91 Medium %age 39.56 42.86 17.58 100.00 F 8 12 10 %age 26.67 40.00 33.33 M 4 8 8 Low %age 20.00 40.00 40.00 F %age 1 4 5 10 10 40 50 100

39 100.00 < 0.01

10 100.00

30 100.00 20 100.00

Figure 10 RISK TAKING PROPENSITY High Males 25 Females 8 Total 33 Chi-square-3.37

M ales

%age Moderate 16.67 65 16.00 15 16.50 80 > 0.05 df = 2

%age 43.33 30.00 40.00

Low 60 27 87

%age 40.00 54.00 43.50

N=200 Total 150 50 200

Females

Total
1 6.5 0

40.0 0

1 6.67 54.0 0

16.0 0

43.5 0 30.0 0

43.3 3

40.0 0

High

Moderate

Low

High

Moderate

Low

High Low

Moderate

UNCERTAINTY IN THE ENVIRONMENT N= 200 Uncertainty Very high High Moderate Low Very Low Total Male 14 99 22 15 0 150 %age Female 9.33 9 6600 29 14.66 9 10.00 3 0.00 0 100.00 50 %age 18.00 58.00 18 6.00 0.00 100.00 Total 23 128 31 18 0 200

Figure 11 %age 11.50 64.00 15.50 9.00 0.00 100.00

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Chi-Square =3.76

> 0.05 df = 2

Figure 12 INNOVATIVENESS High %age Moderate Males 29 19.33 69 Females 9 18.00 20 Total 38 19.00 89 Chi square =0.89 > 0.05 df = 2
Males
19.33 42.00 46.00

%age 46.00 40.00 44.50

Low 52 21 73

%age 34.67 42.00 36.50

N=200 Total 150 50 200

Females
18.00 40.00 36.50

Total
19.00 44.50

34.67

High

Moderate

Low

High

Moderate

Low

High

Moderate

Low

Figure 13 ACHIEVEMENT ORIENTATION High %age Moderate Males 81 54.00 44 Females 18 36.00 26 Total 99 49.50 70 Chi Square-8.49 < 0.02 df = 2
Males
16.67 54.00 29.33 52.00 35.00

%age 29.33 52.00 35.00

Low 25 6 31

%age 16.67 12.00 15.50

Total
15.50

N=200 Total 150 50 200

Females
12.00 36.00

49.50

High

Moderate

Low

High

Moderate

Low

High

Moderate

Low

24

Figure 14

FAMILY SUPPORT
Gender High % age Moderate Males 74 49.33 62 Females 15 30.00 26 Total 89 44.50 88 chi square = 6.56 < 0.05 df = 2 % age Low % age 41.33 14 9.33 52.00 9 18.00 44.00 23 11.50 N=200 Total 150 50 200

Figure 15 MANAGERIAL SKILLS High %age Moderate Males 90 60.00 46 Females 13 26.00 23 Total 103 51.50 69 Chi square = 20.31 < 0.01 df = 2
Males
9.33 30.67 60.00 34.50 46.00 28.00

%age 30.67 46.00 34.50

Low 14 14 28

%age 9.33 28.00 14.00

Total
14.00

N=200 Total 150 50 200

Females
26.00

51.50

High

Moderate

Low

High

Moderate

Low

High

Moderate

Low

Figure 16 Correlation Between the Entrepreneurial Traits and Success of Respondents Entrepreneurial Traits Risk-taking Innovativeness Achievement Orientation Managerial Skills *Significant at 0.05 level of significance ANNEXURE Success (r) 0.726 * 0.691 * 0.511 * 0.563*

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A group of five judges who were representatives of Government support agencies, officials of the Ranchi chambers of commerce and one expert academician in the subject were consulted for finalization of the measurement scales described below. Measurement of Perceived Family Support A set of 3 indicators was used to measure the Level of family Support received (as perceived by the respondents). Information was sought from the respondents with the help of the following questions: 1. How do you rate the level of support you have received from your family for carrying out your business? Very high / High / Low/ Very Low The responses would be given 0,1,2 and 3 points respectively for the 4 alternative answers. 2. Who/What inspired you to become an entrepreneur? i) A success story (Whose Please state) ii) Help from family, relatives and friends iii) Previous related experience iv) Technical training v) Government support vi) Other (specify) 1 point would be given if choice ii) were answered. 3. I chose this career because: 0 1 i) I knew I would get full family support for this choice of career. ii)I desired to be self-employed iii) There was prestige in being called an entrepreneur iv) I had this idea that I would be able to make a lot of money in this profession v) I did not have any other alternative.

1 point would be given if choice i) were answered.

The scale that was used consisted of 3 levels of Family Support. The total scores were ranging from 0-5.Therefore the respondents were assigned to the three levels as follows: 4-5: High 2-3: Medium 0-1: Low Measurement of Success The scale for Measurement of success was based on a study of scales used by S. Ashok Kumar (1990), Akhouri(1979) , and Lakshamana Rao (1986). For measurement of success three parameters were used:

26

(a) Average percentage of net Profit per annum achieved during the last three years
(b) Rate of Growth of Turnover during the last three years (c) Level of Diversification (Diversification level was included along with the other two financial variables because entrepreneurial success is reflected by the amount of innovation and risk taking exhibited by the entrepreneur, as these are two important characteristic features of entrepreneurship. The performance of the unit of each respondent was rated on each of these variables on a 3- point scale as described below. A panel of judges was consulted for deciding the cut offs for the different levels in the scales. a) Profit - Information regarding Average percentage of Net profit per annum achieved during the last 3 years was obtained from each respondent. Scores were assigned to each entrepreneur as follows: Above 25 % - High 3 points 15% - 25% - Medium 2 points Less than 15% - Low 1 point b) Turnover Information regarding Average rate of growth of Turnover achieved during the last 5 years was obtained through the Interview schedule. Scores were assigned to each entrepreneur as follows: Above 15 % - High 3 points 5% - 15 % - Medium 2 points Less than 5% - Low 1 point c) Diversification - Information regarding No. Of diversifications made during the last 5 years, was obtained through the Interview schedule 1 every year High - 3 points 1 every 2 years - Medium 2 points 1 every 3 years or more or no diversification at all - Low 1 point So the total scores were ranging from 3-9. Respondents were categorized as having Low, Medium & High level of success for scores ranging from 3-4, 5-7. 8-9, respectively. Measurement of Religiosity A set of 6 indicators was used to measure Religiosity. Information regarding the indicators were obtained from the respondents with the help of the following questions: Q. Do you: Have faith in God? Have a place of worship in Office? Worship daily? Celebrate all important festivals? Visit the Temple/public place of worship regularly? Perform any other specific rituals? Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No

The respondents were given 1 point for each affirmative answer. The scale that was used consisted of 3 levels of Religiosity The scores were ranging from 0-6. Therefore the respondents were assigned to the three levels as follows:

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0-2: High 3-4: Medium 5-6: Low Caste Categories The various castes have been divided into four major groups based on the census classifications (Census of the Government of India, 1991). They are (i) Higher/Forward caste (i.e. Brahmins, Kayasthas, Kshatriyas, Vaishyas) (ii) Backward caste (iii) Scheduled caste or Scheduled tribe (iv) Others (comprised of Muslims, Christians, Sikhs, Jains etc.).

Measurement of Risk Taking propensity For Measurement of Risk Taking propensity an instrument called Risk Attitude Inventory, designed by Gene Calvert (1993) was used. Along with Kogan-Wallach CDQ this is another popular tool for measuring Risk Taking Propensity. This tool consists of a set of statements as presented below: Answer Agree/Disagree 1. Taking management risks makes good sense only in the absence of acceptable alternatives. 2. I generally prefer stimulation to security. 3. I have confidence on my ability to recover from my mistakes no matter how big. 4. I would promote someone with unlimited potential but limited experience to a key position over someone with limited potential but more experience. 5. Anything worth doing is worth doing less than perfectly. 6. I believe that opportunity generally knocks only once. 7. It is better to ask for permission than to ask for forgiveness 8. Success in management is as much a matter of luck as ability 9. I would choose a three thousand rupees annual raise over a ten thousand rupees bonus, when I had about a one-in-three chance of winning the bonus. 10. I can handle big losses and disappointments with little difficulty. 11. If forced to choose between them, I would take safety over achievement. 12. Failure is the long road to management success. 13. I tolerate ambiguity and unpredictability well. 14. I would rather feel intense disappointment than intense regret. 15. When facing a decision with uncertain consequences, my potential losses are my greatest concern. Scoring: One point for each of the following questions on which the respondent agrees 2,3,4,5,10,13,14 One point for each of the following questions on which the respondent disagrees: 1,6,7,8,9,11,12,15

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The scale that was used for measurement of Risk taking Propensity consisted of three levels, Low Medium and high. The max. Score is 15. The respondents were assigned to the three levels as follows: 0-5 Low, 6-10 Medium, 11-15 - High Measurement of Innovativeness A set of 6 indicators was used to assess the level of innovativeness of the respondents. Information on these indicators was obtained with the help of the following questions in the personally administered Interview Schedule: Question During the last 4-5 years 1. Did you find new market/new buyers? Yes/No If Yes, Please give details.. 2.Did you adopt any new ways to manage the enterprise? Yes/No. If Yes, Please give details.. 3.Did you locate any new sources for supply of raw materials? Yes/No. If Yes, Please give details. 4. Did you establish any new channels of distribution? Yes/No If Yes, Please give details. 5.Did you adopt any new technology method for manufacturing/ offering service/trading? Yes/No. If Yes, Please give details.. 6. Did you launch/produce a new product or service for an existing market? If Yes, Please give details Each Yes answer to questions 1-6 was given 1 point. The scores were ranging from 1-6. Again a three level scale was used for measurement of Innovativeness. The respondents were assigned to different levels depending upon their scores as follows: 1-2 Low, 3-4 Medium, 5-6 High. Measurement of Achievement Orientation To measure the achievement orientation of the respondents a scale was designed using statements based on the 3 attributes of High achievers as proposed by McClelland in his book, The Achieving Society. McClelland differentiates high achievers from low achievers on the basis of certain characteristics. According to him high achievers set moderately challenging goals for themselves tasks of intermediate difficulty and those where the probability of success is 0-5.They are not gamblers and they dislike succeeding by chance. High achievers also seek situations in which they can attain personal responsibility for the work performed by them. They also want rapid feedback on their performance. (McClelland, 1961) Three statements were presented to each respondent as given below: 1) In a situation where I know that Higher the Risk Higher the Return is applicable I shall opt for: i) Low risk ii) Medium risk

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iii) High risk 2) I assume personal responsibility for my success / Failure. i) Agree ii) Neither Agree nor Disagree iii) Disagree 3) I ask for feedback on my performance. i) Always ii) Sometimes iii) Never 1,2 and 3 points were assigned for the answers i), ii) and iii) respectively. The total scores were ranging from 3-9. Respondents were categorized as having Low, Medium & High Achievement orientation for scores ranging from 3-5, 6-7. 8-9, respectively. Measurement of Managerial skills Measurement of managerial skills was based on the classification of Robert Katz. Katz identified three essential management skills: Technical Skills, Human Skills and Conceptual Skills. (Katz,1974) Technical skills encompass the ability to apply specialized knowledge or expertise. Some entrepreneurs learn the special knowledge and practices of the field through extensive formal education, while others develop their technical skills on the job itself. Our study takes into account three technical skills: i) Account keeping, ii) Capability to organize resources, iii) Knowledge of the job of the firm The respondent was rated on each of these skills on a 3-point scale (Low, Medium High). The information regarding these skills of the respondents was obtained with the help of one open ended and two closed ended questions as given below. The interviewer based on his own interpretation classified the response to question no. 1) 1) Please describe your method of Account Keeping. Structured / Semi structured / Unstructured 2) How often do you face a problem of inadequate stock position? Never / Sometimes / Often 3)) How proficient are you in the technical aspects of the jobs performed in your organization? Very proficient / somewhat proficient / Not at all proficient 1, 2 and 3 points were assigned for the first, second, and third options. The total scores were ranging from 3 to 9. So scores from 3-4 were rated in the low Technical skills category, 5-7 was rated as Medium and 8-9 were rated as High Skills category. The ability to interact effectively and work with, understand and motivate other people describes the human skills. These were judged with the help of 3 indicators; the entrepreneurs ability to handle grievances, encourage participation of employees and the ability to network. The information on the above three indicators were obtained through the following questions in the interview schedule: 1) How do you handle a crisis or a grievance in your firm?

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a) You leave the matter to the parties b) You reprimand the parties. c) You intervene and suggest solutions 2) I Involve my subordinates in my decision making process a. Never b. Sometimes Always 1,2 and 3 points were assigned for the responses a), b) and c) respectively. 3) a) Do you participate in Religious get -tog ethers? b) Are you a member of any professional association? c) Do you have friends among political or administrative authorities? 1 point was assigned for every affirmative answer. The total scores were ranging from 3-9. In this case the score categories were decided as, 3-4 Low, 5 -7 Moderate, 8-9High. The mental ability to see into the future and develop a vision is called conceptual skill. It also encompasses the ability to analyze and diagnose complex situations. The conceptual skills of the entrepreneurs were judged on the basis of the clarity in the future plans of their firm. Information on clarity of the plans was obtained through question - what are your future plans for your firm? Depending on the clarity of the plan the interviewer would assign1, 2 or 3 points, assigning a higher score for clearer plans. This skill was also categorized as Low Medium and high with scores 1,2 and 3. To give an overall measurement of Managerial skills the Low Medium and High categories of each of the above mentioned three skills were given scores of 1, 2 and 3. So the total scores were ranging from 3-9. Respondents were categorized as having Low, Medium & High Managerial skills for scores ranging from 3-4, 5-7. 8-9, respectively.

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