Scholarly article on topic 'An Effectuation Measure of Entrepreneurial Intent'

An Effectuation Measure of Entrepreneurial Intent Academic research paper on "Economics and business"

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Abstract of research paper on Economics and business, author of scientific article — Dave Valliere

Abstract This article proposes a novel measure of entrepreneurial intent, the “Entrepreneuring Intent Scale”, to address shortcomings of existing measures. Previous scales have confounded intent with beliefs, attitudes, and expectations, contrary to the assumptions of the Theory of Planned Behaviour that underpins research in this area. Such confounding of measures can lead to significant errors in the interpretation of empirical insights into entrepreneurial intent. Secondly, they have treated entrepreneurship as an “all-or-nothing” decision, ignoring evidence that many prospective entrepreneurs employ effectual logics and formation of intent. This misspecification of the construct can lead to systematic bias in measurement of entrepreneurial intentions.

Academic research paper on topic "An Effectuation Measure of Entrepreneurial Intent"

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Procedía - Social and Behavioral Sciences 169 (2015) 131 - 142

The 6th Indonesia International Conference on Innovation, Entrepreneurship and Small Business,

12 - 14 August 2014

An Effectuation Measure of Entrepreneurial Intent

Dave Valliere*

Ted Rogers School of Management, Ryerson University, Toronto, Canada M5B 2K3

Abstract

This article proposes a novel measure of entrepreneurial intent, the "Entrepreneuring Intent Scale", to address shortcomings of existing measures. Previous scales have confounded intent with beliefs, attitudes, and expectations, contrary to the assumptions of the Theory of Planned Behaviour that underpins research in this area. Such confounding of measures can lead to significant errors in the interpretation of empirical insights into entrepreneurial intent. Secondly, they have treated entrepreneurship as an "all-or-nothing" decision, ignoring evidence that many prospective entrepreneurs employ effectual logics and formation of intent. This misspecification of the construct can lead to systematic bias in measurement of entrepreneurial intentions.

© 2015 PublishedbyElsevierLtd.Thisis anopenaccess article under the CC BY-NC-ND license (http://creativecommons.Org/licenses/by-nc-nd/4.0/).

Peer-review under responsibility of Center for Innovation, Entrepreneurship, and Leadership (CIEL), School of Business and Managements(SBM),InstitutTeknologiBandung (ITB).

Keywords: entrepreneurial intent; effectuation; theory of planned behaviour; methodology; entrepreneuring

1. Introduction

An essential motivation for better understanding the causes of entrepreneurial behaviours, such as having positive attitudes and entrepreneurial intent, has been a growing recognition of the important role that entrepreneurs play in social and economic growth and development. Entrepreneurship has been observed to be an important and beneficial activity at the level of firms, industries, regions, and nations (e.g., Audretsch 1995; Blanchflower, Oswald et al. 2001; Audretsch and Fritsch 2002; Carree, van Stel et al. 2002). Promoting entrepreneurship is therefore considered

* Corresponding author. E-mail address: valliere@ryerson.ca

1877-0428 © 2015 Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.Org/licenses/by-nc-nd/4.0/).

Peer-review under responsibility of Center for Innovation, Entrepreneurship, and Leadership (CIEL), School of Business and

Managements (SBM), Institut Teknologi Bandung (ITB).

doi:10.1016/j.sbspro.2015.01.294

to be a social good worthy of support from policy makers and academic researchers. For example, several researchers have attempted to investigate the effects of different educational policies on the development of entrepreneurial intent within targeted populations (e.g., Vesper and Gartner 1997; Dana 2001; Galloway and Brown 2002; Noel 2002; Peterman and Kennedy 2003; Ucbasaran, Westhead et al. 2003). But such research support requires insight into the precursors of entrepreneurial intent, which have been confounded by methodological issues with the interpretation of extant research. It is therefore the purpose of this research to develop a new measure of entrepreneurial intent that is free of these methodological issues and is a better indicator of actual entrepreneurial intent among individuals, and can thus become a more standardized measure for use in a wide range of future research efforts.

This article begins with an examination of the literature pertaining to the entrepreneurial intent construct and its measurement. From this review, specific methodological shortcomings will be identified that threaten the validity of empirical research that utilizes the entrepreneurial intent construct, and an alternative approach to operationalization will be proposed. This approach will then be employed to develop a novel alternative scale by following best practice in scale development methods. It will then be argued that this new scale provides improved construct validity and construct adequacy and therefore provides a basis for improved operationalization of future empirical research involving the entrepreneurial intent construct.

2. Literature Review

To set the stage for this project into developing an improved measure of entrepreneurial intent, the previous literature will be reviewed from two perspectives. First will be a brief review of the literature related to the entrepreneurial intent construct and its precursors, and the various measurement approaches that have been taken before. Second will be a review of the literature related to the process of "entrepreneuring", which emphasizes the step-wise and processual nature of nascent entrepreneurial activities. This review will consider both the traditional perspective of an a priori objectively defined process of new venture creation, and the more recent subjectivist perspective of an emergent and idiosyncratic entrepreneuring process based on ad hoc experimentation and learning (i.e., effectuation and bricolage).

To set the stage for this project into developing an improved measure of entrepreneurial intent, the previous literature will be reviewed from two perspectives. First will be a brief review of the literature related to the entrepreneurial intent construct and its precursors, and the various measurement approaches that have been taken before. Second will be a review of the literature related to the process of "entrepreneuring", which emphasizes the step-wise and processual nature of nascent entrepreneurial activities. This review will consider both the traditional perspective of an a priori objectively defined process of new venture creation, and the more recent subjectivist perspective of an emergent and idiosyncratic entrepreneuring process based on ad hoc experimentation and learning (i.e., effectuation and bricolage).

The process of entrepreneuring is considered to be those activities that an individual undertakes to find attractive opportunities (whether recognized, discovered, or created from nothing), develop plans to exploit the business potential of these opportunities, assemble the resources and stakeholders necessary to implement these plans, and begin to execute the plans. In this approach I am implicitly endorsing a definition of entrepreneurship that is closely aligned to Howard Stevenson's well-known view that entrepreneurship essentially involves the pursuit of opportunities without regard to resource limitations (Stevenson 1985) and to the views of Shane and Venkataraman that entrepreneurship is essentially about identifying and assessing opportunities and then exploiting them (Shane and Venkataraman 2000; Shane 2012), and thereby also implicitly rejecting perspectives that entrepreneurship necessarily involves new venture creation by individuals outside of the corporate employment context, requires radical innovation, or is equivalent to small-business management. The entrepreneurship literature is generally plagued by competing definitions that are sometimes contradictory and that often confound attempts to reconcile the results of diverse empirical research. For this reason I have deliberately adopted a definition that is very broad with respect to the formation of intent - I require only that prospective entrepreneurs intend to pursue their opportunities.

2.1. Precursors to entrepreneurial intent

Because the existence of entrepreneurs is considered so important to the growth and development of economies, and the question of why only some people are able to spot opportunities and are willing to act upon them is still so poorly understood, a considerable stream of research has emerged into the potential precursors of entrepreneurial intent in individuals. Brenner et al. (1991) suggested a simple expectations rationale for entrepreneurship, whereby individuals choose this career path based on their expectations of outcomes. They found support for eight specific outcomes to motivate entrepreneurial behaviour of individuals: freedom to work your own methods, feelings of accomplishment, intellectual stimulation, performing a wide variety of activities, being respected by others, having opportunity for advancement, being rewarded for performances, and working with congenial associates. These findings indicate a range of individual and social factors as supportive of entrepreneurial intent.

Theorists identified Ajzen's theory of reasoned action and theory of planned behaviour (Ajzen 1987; Ajzen 1991) as a useful explanatory mechanism for these results. According to this view, beliefs shape the formation of attitudes towards any prospective behaviour, these attitudes drive the formation of intent to perform the behaviour, and the intent causes the individual to act. Shapero (1982) applied this theoretical perspective to the specific question of entrepreneurial intent, arguing that it was created by the perceived desireability of entrepreneurship, the perceived feasibility of acting entrepreneurially, and some individual propensity to act - a perspective that was empirically validated by Krueger (1993). Davidson (1995) argued further that that connection between attitudes and intent was mediated by some sense of conviction, the instrumental belief that entrepreneurship is personally suitable for the individual in question.

Chen et al. (1998) expanded the conception of perceived feasibility by introducing the concept of entrepreneurial self-efficacy - belief in one's own abilities on dimensions relevant to entrepreneurial success (i.e., marketing, innovation, management, risk-taking, and financial control). Krueger et al. (2000) found good empirical support for an expanded model in which perceived desireability is driven by expectations of outcomes, and perceived feasibility is driven by perceived entrepreneurial self-efficacy. Further refinement to this model have included the effects of individual psychological traits and characteristics on attitudes (Luthje and Franke 2003; Shook, Priem et al. 2003), the moderating effects of situational variables like family context (Kennedy, Drennan et al. 2003), the effects that instrumental readiness (i.e., resources and family support) has on feasibility (Kristiansen and Indarti 2004), and the role of mentors on perceived desireability (Van Auken, Fry et al. 2006). Education and family experience have been found to be particularly influential on the emergence of positive attitudes towards entrepreneurship (Carr and Sequeira 2007; Souitaris, Zerbinati et al. 2007).

2.2. Measuring entrepreneurial intent

Despite this significant stream of research into entrepreneurial intent, it remains a loosely defined construct in the literature. As Thompson (2009) points out, it has been used to describe such varied perspectives as career orientation, vocational aspirations, outlook on self-employment, and the desire to own a business. The variety of operationalizations used in recent research reflects this conceptual looseness, particularly when framed in the context of the theory of planned behaviour that underlies our current best understanding of precursors to entrepreneurial intent (i.e., beliefs, attitudes, intentions, and actions). Recent studies have used measures of attitudes (assessing personal and social norms and desires), of behaviour (assessing performed actions), of future expectations (assessing likely outcomes without reference to personal agency), or even combinations of all three. These operationalizations represent a potentially serious methodological weakness, as theory suggests that these factors are antecedents or consequences of entrepreneurial intent, and therefore only partially correlated with it. Only a relative minority of studies have included direct measures of intention in their operationalizations. Table 1 provides a representative summary of the ways in which entrepreneurial intent has been operationalized in previous research, indicating the potential scope of the problem.

Dave Valliere / Procedia - Social and Behavioral Sciences 169 (2015) 131 - 142 Table 1. Review of entrepreneurial intention (EI) measurements.

Operationalization of EI

Autio, Keeley et al. 2001 Brenner, Pringle et al. 1991

Carr and Sequeira 2007 Chen, Greene et al. 1998

Davidsson 1995

Días-Garcia and Jiménez-Moreno 2010 Engle, Dimitriadi et al. 2010

Franke and Luthje 2004 Hmieleski and Corbett 200б

Kennedy, Drennan et al. 2003 Kolvereid and Moen 1997

Kristiansen and Indarti 2004

Krueger 1993 Krueger, Reilly et al. 2000 Lee and Wong 2004 Linän and Chen 2009

Luthje and Franke 2003

McMullen and Zahra 2009 Noel 2002

Shook and Bratianu 2010 Souitaris, Zerbinati et al. 2007

Expectation (4-item scale of likelihoods: 1 and 5 years out, full and part time, Likert)

Attitude (preferred choice of career, dichotomous)

Expectation (likely career choice, dichotomous)

Behaviour (index of 6 actions, dichotomous)

Attitude (interest in starting up, Likert)

Intention (try hard to start up, Likert)

Expectation (how soon will launch, Likert)

Behaviour (considered entrepreneurship, Likert)

Behaviour (extent of efforts, Likert)

Behaviour (planned for entrepreneurship, Likert)

Expectation (likelihoods: 1 and 5 years out, Likert)

Behaviour (considered entrepreneurship, dichotomous)

Behaviour (considered entrepreneurship, Likert)

Expectation (likelihood 5 years out)

Behaviour (considered entrepreneurship, Likert)

Behaviour (planned for entrepreneurship, Likert)

Intention (try to launch ever, dichotomous)

Expectation (likely to start business ever, Likert)

Attitude (interest in starting up, Likert) Intention (try hard to

start up, Likert) Expectation (how soon will launch, Likert)

Behaviour (considered entrepreneurship, Likert) Behaviour

(extent of efforts, Likert)

Behaviour (planned for entrepreneurship, Likert) Expectation (2 items, likelihoods 5 and 10 years out) Behaviour (considered entrepreneurship, Likert) Attitude (preference for self-employment, Likert) Expectation (likelihood of pursuing self-employment, probability) Expectation (likelihood of self-employed, probability) Attitude (preferred choice of career, Likert) Expectation (2 items, career in entrepreneurship, Likert) Expectation (will start ever, dichotomous) Expectation (likelihood 5 years out, probability) Intention (try to launch ever, dichotomous) Attitude (ready for anything, Likert) Intention (professional goal, Likert) Intention (try hard to start up, Likert) Intention (try to launch ever, Likert) Intention (start up ever, Likert) Behaviour (considered entrepreneurship, Likert) Expectation (self-employed ever, Likert) Behaviour (currently self-employed, dichotomous) Intention (scale: commit firm to 11 entrepreneurial actions, Likert) Expectation (open a business in 1, 2 or 5 years, Likert) Behaviour (currently own a business, dichotomous) Expectation (likelihood of start up ever, Likert) Behaviour (considered start up, dichotomous) Attitude (preference for self-employment, Likert) Expectation (likelihood of pursuing self-employment, probability)

Zampetakis, Kafetsios et al. 2009

Urbig, Weitzel et al. 2012 Van Auken, Fry et al. 2006 Veciana, Aponte et al. 2005 Wilson, Kickul et al. 2007

Thompson 2009

Turker and Selcuk 2009

Zhao, Seibert et al. 2005

Expectation (likelihood of self-employed, probability)

Intention (start a business, Likert)

Behaviour (search for opportunities, Likert)

Behaviour (saving for start-up capital, Likert)

Behaviour (study how to start up, Likert)

Behaviour (planned to launch, Likert)

Behaviour (read about how to start, Likert)

Intention (plan to start up, dichotomous)

Expectation (likelihood 5 years out, probability)

Attitude (desire to own a business ten years out, Likert)

Behaviour (considered entrepreneurship, Likert)

Attitude (interest in start up/ownership, dichotomized Likert)

Intention (start up soon, Likert)

Intention (work hard on start up, Likert)

Attitude (interest in start up, Likert)

Attitude (interest in acquisition of small business, Likert)

Attitude (interest in growing a new business, Likert)

Attitude (interest in growing an acquired business, Likert)

By using a similar review approach, Thompson (2009) attempted to define a better scale measure. His "Individual Entrepreneurial Intent Scale" (IEIS) features ten items that are a mix of direct measures of intention and measures of behaviours that strongly imply intentions, with no measures of beliefs or attitudes confounding the operationalization In this regard, it represents a significant improvement over previous operationalizations of entrepreneurial intent with superior construct validity. But despite this improvement, there remains one further flaw in how we measure entrepreneurial intent, which arises from the progressive and processual nature of entrepreneurship and new venture creation - entrepreneurship is not a single act or event, but rather a journey through a process of "entrepreneuring".

2.3. The entrepreneuring process

Early research in the entrepreneurship field was mostly of a descriptive nature, focusing on the individuals who acted as entrepreneurs and on the specific activities they were performing. Scholars who focused on the activities of entrepreneurs often gave particular attention to the process of new venture creation (e.g., Gartner 1989). As a result, there is a great deal known about the steps and activities involved in creating a new venture, although different researchers have applied slight differences in the categorization of these activities. For example, Bhave (1994) considered the key activities to be opportunity recognition, development of the business concept, production technology, organizational creation, and product technology. Shook et al. (2003) expanded opportunity recognition to comprise separate activities for search and for discovery, and added an explicit decision to "exploit" the opportunity. And Ardichvili et al. (2003) developed the exploitation phase by describing the assessment of market needs, development of the business concept, writing the business plan, forming the business entity, and starting operations. Lichtenstein et al. (2006) significantly expanded the conceptualization of the entrepreneurial process by highlighting how it operates in three parallel modes: development of vision, strategic decision-making, and tactical exploitation activities. The notable tactical exploitation activities include investing one's own resources into the venture, developing a prototype, defining the business opportunity, assembling the founder team, creating the legal entity, establishing the business contact information (telephone, website, email), purchasing major equipment, establishing a separate bank account for the venture, and seeking external sources of financi ng. Saraswathy added to this naming the new business entity, and explicitly designing for interim failures and learning (Sarasvathy 2004). And Chandler et al. (2011) added assessing the potential returns to the opportunity, implementing control processes, analyzing competitors, and experimenting with different business models. Finally, by adopting complementary perspectives based on effectuation and bricolage, Fisher (2012) suggested experimentation with novel combinations

of inputs (physical, labour, and skills) and markets, and refusal to enact the limitations of regulatory standards. Although none of these authors are prescriptive about the sequencing and timing of the individual activities, they all share a common perspective on the types of activities t hat are undertaken by individuals set on becoming an entrepreneur. The process of becoming an entrepreneur can follow many idiosyncratic paths that differ in the details, but all share the same essential activities and steps.

What this process perspective highlights is the processual and step-wise nature of nascent entrepreneurship, although the sequence may be highly variable or idiosyncratic (Shane 2012). The transformation from non-entrepreneur to entrepreneur is a gradual one involving many different steps and activities. Prospective entrepreneurs take one step at a time and, from the results and experience, gain valuable knowledge that informs their decisions of which steps to take next. A market study may confirm an intuition of an opportunity to be exploited, or may refute it and replace it with a better, yet previously unrealized alternative opportunity. And, in the extreme, a highly negative market assessment may completely dissuade the prospective entrepreneur from continuing on the path at all. Much as with real-options reasoning (McGrath 1999), the step-wise process of entrepreneuring permits individuals to move forward despite daunting levels of uncertainty and risk in the face of many unknowns, secure in the ability to take small steps, to learn new information, and to adjust plans and goals in light of that new information. Individuals considering becoming entrepreneurs examine their current state (who they are, what they know, what they have) and form the intention to take a step forward by performing one of the outstanding activities of the entrepreneuring process. This is essential a process of effectuation logic.

2.4. Effectuation in the entrepreneuring process

Effectuation refers to a logic that is complementary to traditional causation logics, and is more appropriate for dealing with situations of extreme uncertainty (Sarasvathy 2001). Rather than working a causal chain backwards from the desired final state (a successful venture) to some achievable initial step, the effectuator starts from the current state and projects forward a range of possible future states. Effectuation is therefore a theory of design, which responds to uncertainty, goal ambiguity, and social enactment of meaning in actions (Sarasvathy 2004). Some decision principle is then applied to select from the range of future possibilities. As with real-options reasoning, the expectation is that all future states will be accompanied by valuable new information, and that this will inform wiser decision-making in subsequent steps. In the case of a prospective entrepreneur, the individual identifies the entrepreneuring activities that can possibly be taken from their current state, selects one on the basis of affordable loss, performs that activity, and then re-evaluates the desire to persevere towards entrepreneurship (Sarasvathy 2001). Each step in the process is based on some level of trust in the likely outcome (Goel and Karri 2006; Karri and Goel 2008; Sarasvathy and Dew 2008), and a willingness of the entrepreneur to experiment and to bear some marginal and affordable risk of future loss (Chandler, DeTienne et al. 2011).

Given the inherently processual and potentially effectual nature of entrepreneurship, any measure of entrepreneurial intent should be likewise processual and effectual. And therefore I argue that individuals do not form a singular intention to proceed through all steps of the entrepreneuring process without adjustment. Rather, they form intent to simply take one step forward at a time, to learn from that, and to re-evaluate their goals and plans. As embarking upon entrepreneurship is clearly not an "all or nothing" decision, measures of the precursor intent should similarly not be all-or-nothing. At any specific point in the entrepreneuring process, entrepreneurial intent should be measured solely as the intention to take another single step forward. On this basis, I now suggest that a valid measure of entrepreneurial intent must reflect two key conditions:

• The measure must carefully discriminate from the closely related constructs of beliefs and attitudes towards

entrepreneurship (perceptions of desireability, self-efficacy, behavioural control, propensity to act, etc.).

• The measure must reflect the step-by-step process of entrepreneuring and not assume the existence of an "all or

nothing" intentionality that precludes learning and adapting along the way.

Such a measure would also correctly discriminate the following five cases: the individual who has not undertaken any entrepreneurial activities and has no intent to begin (not interested), the individual who has not undertaken any entrepreneurial activities but does have intent to do at least one in the future (not started), the individual who has undertaken one or more entrepreneurial activities but does not intend to continue the process (abandoned), the individual who has undertaken one or more entrepreneurial activities and intends to continue (in -

process), and the individual who has completed the entrepreneuring process and is now operating the new venture (manager). The remainder of this article is an attempt to address this methodological gap and establish such a measure by developing and validating a scale instrument that reflects these two criteria.

3. Methodology

The scale-development process used in this research is based on the methods and guidelines of Hinkin (1995) and DeVellis (2003). As a first step in this process, a working definition of entrepreneurial intent is proposed as follows: Entrepreneurial intent is a personal conviction of an individual to take one or more specific actions in the process of exploiting a new business opportunity. This definition is used in the generation of potential scale items and in the validation of these items with domain experts.

3.1. Item generation

The initial pool of potential scale items must be broad enough to fully capture the domain of interest, but not include extraneous content or closely related but distinct theoretical constructs (Schriesheim, Powers et al. 1993). For example, in the context of the entrepreneuring process, the items should include all actions of the opportunity exploitation process described above, but should exclude general small business management activities that are not directed towards exploitation (e.g., planning and control, managing working capital. directing staff). A top-down approach to item generation was employed, informed by theory and therefore encompassing perspectives of causation, effectuation, and bricolage.

On the design goal that the final scale would have ten or fewer items, the initial set of potential items contained questions to assess the respondent's intention to perform specific behavioural acts of the entrepreneuring process. To assist with later validation of the initial results, distractor items unrelated to the process of entrepreneuring were also added to the initial set of questions (e.g., applying for paid employment jobs) with the expectation that these items would not load onto the final scale factor. These distractor items were interspersed among the other items to mitigate the risk of consistency bias. Negative wording of items was not employed, despite the potential mitigating effect on pattern biases, because negative wording has been demonstrated to excessively reduce item response validity (Schriesheim and Hill 1981). Standard 5-point Likert scales (anchors "strongly agree" and "strongly disagree") were employed to provide for reasonable granularity of item responses without creating the undue respondent fatigue longer scales and the associated potential for acquiescence biases. A twelve-month forecast horizon was used for the question text, as a shorter horizon may be influenced by transient mood states and a longer horizon may begin to exhibit the all-or-nothing effects of previous measures.

3.2. Item validation

The initial set of 45 items was then judged for construct adequacy by a panel of six experts comprising practicing entrepreneurs and academic researchers experienced in the use of measures of entrepreneurial intent. Experts were invited to review prospective items for clarity, to suggest additional items that may capture aspects of the construct that may have been omitted, and to assess the relevance of items with reference to the working definition of the entrepreneurial intent construct. This content adequacy validation was performed using the modification of Tucker's (1966) method suggested by Schriesheim et al. (1993), whereby each expert rates the relevance of each item to the underlying construct, and these ratings are factor analyzed to produce a quantitative metric for the content adequacy of the proposed set of items. The results obtained show a single that accounts for 44.0% of the variance in the expert ratings, suggesting that the experts share a high degree of commonality in the relevance of most of the proposed measures to the underlying construct.

Based on these results, an initial questionnaire of the 38 items rated highest by the experts was prepared and administered to a sample group. This sample was selected to be representative of typical future populations for the use of this new instrument. The sample frame was obtained by random intercept at a major public space in Toronto.

A total sample of 111 valid and complete responses was collected (along with 6 invalid or incomplete responses). From this, a randomized selection of 56 responses was reserved for re-validation of the final questionnaire.

These sample data were used to examine the variance in each item scale. Items that exhibited very little variance in response (s2< 1, compared to overall item variance of stotal2= 1.86) were deemed ineffective measures, as were items that exhibited mean values very close to the scale anchor extremes (within s) indicating likely truncations. On this basis, ten items were dropped from further consideration.

3.3. Scale structure validation

Inter-item correlations for the full set of remaining items were then examined using factor analysis. Principal components analysis was employed using varimax rotation with Kaiser normalizations, which converged after eight iterations. Using a threshold of eigenvalues greater than unity, three orthogonal factors were extracted (KMO= 0.946, Barlett's sphericity < .001). The first factor appears to relate to the creation of value in the market ( Value). The second factor appears to relate to the practical startup and operation of an entrepreneurial venture (Ops). And the third factor appears to relate to innovative and creative thinking (Innov). Table 2 summarizes these results.

Table 2. Factor analysis results.

Panel A: factor loadings

Value Component Ops Innov

Q29 .831 .323 .220

Q30 .782 .417 .303

Q28 .779 .378 .176

Q31 .768 .327 .297

Q03 .753 .127 .418

Q27 .736 .429 .346

Q04 .664 .237 .369

Q32 .613 .348 .479

Q33 .565 .451 .495

Q37 .540 .394 .497

Q16 .521 .391 .511

Q17 .490 .446 .369

Q19 .266 .769 .239

Q21 .387 .768 .179

Q23 -.020 .723 .363

Q18 .536 .673 .187

Q10 .360 .671 .043

Q11 .507 .656 .235

Q22 .243 .637 .419

Q20 .420 .626 .274

Q08 .567 .616 .084

Q35 .431 .531 .508

Q38 .478 .503 .449

Q24 .103 .216 .827

Q25 .249 .117 .781

Q26 .416 .144 .660

Q34 .381 .334 .652

Q36 .520 .401 .532

Panel B: factor variance

Component Total Rotation Sums of Squared Loadings % of Variance Cumulative %

Value 8.077 28.846 28.846

Ops 6.717 23.989 52.836

Innov 5.277 18.848 71.683

The third factor was deemed to not be specific to the initiation of entrepreneurship, so all items loading on it (greater than 0.4) were dropped from the subsequent analysis. A further seven items were dropped due to excessive cross-loading (greater than 0.4). The final version of the scale uses the remaining eight items. This final scale was then re-validated using the 56 responses reserved from the original data set. Scale values were computed for each of these respondents, as were a range of measures of scale reliability and goodness of fit. Cronbach's alpha of the final scale is 0.913. Other computed measures of goodness of fit include %2 (21.882, p = 0.290), %2/df (1.152), GFI (0.951), Tucker-Lewis Index (0.991), and RMSEA (0.037) (Tucker and Lewis 1972; Steiger and Lind 1980; Hinkin 1995).

4. Discussion

The above scale development and validation effort has thus concluded with an eight-item processual measure. The scale features improved discriminant validity with respect to related constructs under the Theory of Planned Behaviour (i.e., beliefs, attitudes, and expectations), and reflects current theoretical perspectives on the step-wise nature of the entrepreneuring process.

It may be useful to now consider how this proposed scale would discriminate and function for each of the five use-cases mentioned at the start of this article. An individual who has no interest in entrepreneurship and has undertaken no activities in the entrepreneuring process (not interested) is likely to score at or near the minimum value for the scale, as is appropriate. The individual who is interested in entrepreneurship but has not yet undertaken any activities (not started) would score highly by indicating intent to undertake some of the early steps in the entrepreneuring process. The individual who had begun the entrepreneuring process but now has no intent to continue it (abandoned) would score at or near the minimum, despite the range of activities they may have completed in the past, because they do not intend to complete any subsequent activities in the future. The individual who has undertaken some activities and intends to complete more (in-process) would score highly by indicating intent to undertake some of the later steps in the entrepreneuring process. And the individual who has completed the entrepreneuring process and is now operating their venture (manager) would score a low value since there would be few (if any) activities remaining for them to complete. Thus it can be seen that the scale correctly discriminates between individuals with intent to move forward in the process of entrepreneuring from individuals who do not so intend, whether because they have no such desire or they have already completed the process; the scale registers only the intent to progressively advance in the process of entrepreneuring. Moreover, the scale is non-dichotomous and proportionate to the strength of this intention, regardless of the current stage of the individual in the process - individuals whose intention is weaker will be reflected in a lower score as they may intend only to take the immediate next step, while individuals whose intention is very strong will be reflected in a higher score as they have firm intention to complete very many of the remaining steps in the entrepreneuring process. In the boundary case of an individual very near the completion of the process, and with a firm intent to finish it, the scale will necessarily score low as they may have very few activities remaining to be done. This is the correct assessment of an individual in this situation because their strong intention applies to only a few outstanding activities - soon they will be business operators managing day-to-day tasks, and not actively occupied with the process of entrepreneuring.

4.1. Conclusions

This new scale can be referred to as the "Entrepreneuring Intent Scale" (EIS) to distinguish it from earlier measures of entrepreneurial intent and to emphasize its recognition of the processual nature of entrepreneuring. Table 3 provides a standardized presentation of the scale instrument, suitable for incorporation into future research projects.

Table 3. The entrepreneuring intent scale (EIS).

For each item below, please indicate the degree to which you agree with the statement:

Within the next 12 months I intend to... Strongly disagree Strongly agree

Conduct practical experiments to discover solutions to customer 1 2 3 4 5

problems

Develop a prototype of a product/service 1 2 3 4 5

Develop a value proposition 1 2 3 4 5

Test my value proposition in the market 1 2 3 4 5

Quit my current job, or substantially reduce hours so I can focus 1 2 3 4 5

on a new business

Invest my own resources into my business 1 2 3 4 5

Open a business bank account 1 2 3 4 5

Purchase major equipment 1 2 3 4 5

The purpose set out for this research has been to develop a new measure of entrepreneurial intent that is free of methodological issues and is a better indicator of actual entrepreneurial intent among individuals, and can thus become a more standardized measure for use in a wide range of future research efforts. It can be seen from the scale presented in table 3 that this goal has been achieved. The new EIS instrument provides a measure of entrepreneurial intent that is free of confounds from related concepts, such as attitudes and beliefs. It also reflects the processual nature of commitment to entrepreneurship, and that it is not a simple "all or nothing" decision.

It is hoped that the use of this EIS instrument will provided a basis for improved operationalization of future empirical research involving the entrepreneurial intent construct. Much of the recent research involving entrepreneurial intent has been confounded by methodological challenges to construct validity. But this may now be mitigated through the use of this new instrument, which may now provide better insights into entrepreneurial intent and its precursors. With this improved insight it may be possible to more effectively design policies and programs to increase entrepreneurial intent in target populations, and to thereby to enable the social benefits of higher entrepreneurship participation rates.

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