Jurnal Manajemen Bisnis Vol. 11 No.

2 (2020)

Article Type: Research Paper

The Influence of Personality Factors on

Entrepreneurial Intention
Isnanda Zainur Rohman1* and Miswanto1

Abstract: The aim of this paper is to examine the influence of personality factors
(internal locus of control, need for achievement, and self-efficacy) on students’
entrepreneurial intentions. The sample of this research was selected by using
purposive sampling. The data were collected by survey using questionnaires.
AFFILIATION: Respondents who filled the questionnaires were 200 university students, studying
1 Department of Management,
in Yogyakarta. The data were analyzed by using multiple regressions. The result
STIE YKPN YOGYAKARTA
showed that all of the personality factors in this study had positive effects on
*CORRESPONDENCE: students’ entrepreneurial intentions. In this study, it was found that the most
isnanda.zainur@stieykpn.ac.id significant variable to influence entrepreneurial intention was self-efficacy. The
implication of this research is that if the number of entrepreneurs wants to be
THIS ARTICLE IS AVALILABLE IN: boosted, more attention must be paid to the personality factors of people
http://journal.umy.ac.id/index.php/mb Keywords: Entrepreneurial Intention of Students; Personality Factors; Internal
Locus of Control; Need for Achievement; Self-Efficacy.
DOI: 10.18196/mb.11293

CITATION:
Rohman, I. Z., & Miswanto. (2020)
The Influence of Personality Introduction
Factors on Entrepreneurial
Intention. Jurnal Manajemen
Bisnis, 11(2), 135-142. The number of employers is believed to affect the prosperity of a country
(McClelland, 2013). Therefore, many things, which support the increasing
ARTICLE HISTORY number of employers, are essential. Entrepreneurial intention is a factor
Received: that is claimed to encourage the formation of employers (Sondari, 2014).
04 December 2019
Based on previous research, the entrepreneurial intention of students is
Reviewed: closely linked to the possibility of becoming entrepreneurs. Countries
31 December 2019 could be prosperous when the number of people who become
28 February 2020 entrepreneurs is at least 2% of the total population. Therefore, it is crucial
to improve the number of employers for a country’s prosperity (Veleva &
Revised:
03 January 2020 Bodkin, 2018).
03 March 2020
Entrepreneurs are people who can create new jobs for other people
Accepted: (Gartner & Gartner, 2016). Those people are employed by entrepreneurs.
04 March 2020
It is said that becoming an entrepreneur is a good choice because it can
provide employment. Entrepreneurs do not need to register themselves
to work for other people. If a country has many entrepreneurs, the
country will be wealthy. The other way around, if a country does not have
many entrepreneurs, the country will be poor (Shehu & Mahmood, 2014).

The role of entrepreneurs is pivotal in developed countries. It could be

proven in the history of civilization and human progress. The contribution
from entrepreneurs is great for economic development, and it happened
in the western countries and Japan (Indarti, 2015).
 Rohman & Miswanto
The Influence of Personality Factors on Entrepreneurial Intention

The self-employed workers are actively implementing changes to the environment,

which can encourage a new economic society, resulting in additional revenue or
increase productivity. It is recognized as the vital role of entrepreneurs in the
development of developing countries, and it encourages all parties to foster
entrepreneurial intention among the youth.

Some researchers have been focusing on entrepreneurial intention. Many studies have
been conducted to assess the entrepreneurial intention and behavior of students. In
their studies, the researchers raised the various factors affecting a people's intention to
become entrepreneurs. In this study, the researcher focuses on entrepreneurial
intention, which is influenced by personality factors.

Literature Review and Hypotheses Development

Entrepreneurial Intention

The word “entrepreneurship” comes from the French language (entreprende), meaning
to undertake, to do, to run, and to try. Entrepreneurship is an entrepreneurial spirit that
is built and aimed at bridging science and market capabilities. Entrepreneurship involves
forming a new company. Entrepreneurs are people who move the economy’s resources
from low productivity to higher productivity levels. They produce more or become more
productive people (Pogue, 2012). Entrepreneurial activities are also a managerial ability
needed by an entrepreneur.

Many experts define entrepreneurship and self-employment. An entrepreneur is a

person who has a creative and innovative effort at developing ideas and combining
resources to find opportunities (McKenzie, Ugbah, & Smothers, 2007). Entrepreneurs
are people who reform or revolutionize production pattern by using the invention or
newest technology to produce new commodities or produce old products in a new way
(Beckman, Eisenhardt, Kotha, Meyer, & Rajagopalan, 2012). Entrepreneurs are people
who move the low-productivity economy’s sources into sources of the high-productivity
economy (Shaw, 2017).

The intention is feeling interested in an activity without anyone asking (Sheeran &
Webb, 2016). Furthermore, the intention of a person can be expressed through a
statement and participation in an activity. The intention itself is a source of motivation
to encourage someone to do what he wants.

Entrepreneurial intention is something inside the heart, feeling attractive to start

running a business independently and to take risks (Obschonka, Silbereisen, & Schmitt-
Rodermund, 2010). Several studies have mentioned that students’ entrepreneurial
intention is a source for a new generation of entrepreneurs. In this study, the
entrepreneurial intention is defined as the intention of people to become
entrepreneurs.

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Internal Locus of Control

Locus of control is a construct describing a perception of people’s responsibility for

everything, which happens in their life (Ajzen, 2002). Locus of control is a psychological
construct that is used to identify a person's perception of affective self-control in terms
of the external environment and the level of personal responsibility for the outcome
(April, Dharani, & Peters, 2012). Locus of control has two types. There is an internal
locus of control and an external locus of control.

External locus of control is the extent to which a person expects and believes that the
existing results are influenced by chance, luck, destiny, and other things that are
uncertain and cannot be controlled. When a person is successful in his job, he will
assume that it is because some things out of control, such as luck or other factors.
Similarly, when he fails, he will assume that it is because of some things out of control.

Internal locus of control is the extent to which a person expects and believes that the
results of his effort depend on his effort or personal characteristics. Someone who has
an internal locus of control believes that he is responsible for the results. When he is
successful in his job, he will assume that he has good abilities and has worked hard.
Similarly, when he fails, he will assume that he does not do the best.

Need for Achievement

There are three kinds of theories of motivation needs. Those are the need for
achievement, the need for affiliation, and the need for power. The need for
achievement is a stable learning process, which will be obtained by struggling with
satisfaction and meeting the highest level to be able to become experts in a specific
subject (Schüler, Sheldon, & Fröhlich, 2010).

The need for achievement is a learning pattern in which satisfaction will be obtained
while working on a difficult task to achieve success (Sibin, Matthews, & Dagher, 2007).
The need for achievement is the desire to master the difficult challenges, compete with
others, meet high standards, and have the desire to be proficient in a specific field
(Winne & Nesbit, 2010).

Self-Efficacy

Self-efficacy is a self-assessment of the ability to organize and carry out the actions
necessary to achieve the specified performance. Efficacy itself provides the basis for
human motivation, well-being, and personal achievement (Bandura, 2006). Self-efficacy
is the confidence to know the ability to carry out a form of control over the benefits and
events in the surrounding environment. Self-efficacy is a person’s judgment about his
ability to run a particular behavior or achieve specific goals (Shedler, 2010).

Self-efficacy can be a critical success and execution of work (Flammer, 2015). Self-
efficacy also greatly affects the mindset, emotional reactions to making a decision. From

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some of these opinions, the researcher defines self-efficacy as the belief of in achieving
specific goals.

Hypotheses Development

Entrepreneurs are people who have an internal locus of control (Luca, Cazan, &
Tomulescu, 2012). Someone who has an internal locus of control will see that the world
is something that can be predicted, and individuals’ behavior plays a role in it. The
linkage between these two variables clearly shows that a person with an internal locus
of control has higher entrepreneurial intentions.

H1: Internal locus of control has a positive influence on entrepreneurial intention.

David McClelland developed research on people outside the campus who comprise
various professions, including doctors, lawyers, bankers, teachers, employers, and
others. The result is that employers have high scores of needs for achievement
compared to other professions (McClelland, 2013). David McClelland also conducted
research to determine the relationship between the economic development of a
country and the need for achievement. The result was that the higher the scores of the
need for achievement, the more country has entrepreneurs.

H2: The need for achievement has a positive influence on entrepreneurial intention.

Many researchers believe that self-efficacy is related to career development. Self-

efficacy will be a factor that describes a person's personal opinion related to career
adjustment (Flammer, 2015; St-Jean & Audet, 2012). Thus, a person’s self-efficacy can
be an essential factor in determining whether someone’s entrepreneurial intention has
been formed in the early stages of his career. Furthermore, the higher the level of self-
efficacy on entrepreneurship in the early days of a person’s career, the more powerful
his entrepreneurial intention.

H3: Self-efficacy has a positive influence on entrepreneurial intention.

Research Method
The Source of Data and Sampling

Primary data was used in this study. The samples of this research were the students of
STIE YKPN Yogyakarta. The method of sampling used was purposive sampling. This
method employed specific criteria. The criteria of respondents, who filled the
questioners in this research, were students who were studying in Yogyakarta.

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Analysis Methods

A validity test was the first step of the analysis in the research. The validity test was
done to demonstrate the ability of the questions in the questionnaire, whether it
resulted in something that would be measured by the questionnaire. Testing the validity
was carried out by using factor analysis in SPSS 26. Statement items in the questionnaire
will be valid if it reaches a loading factor of more than 0.5 (Hair, Black, Babin, &
Anderson, 2010). The second test was the test of reliability. A reliability test was utilized
to measure whether respondents answered consistently. If the respondents answered
consistently, then the data would be reliable. The score of Cronbach's alpha used was
higher than 0.6 (Hair et al., 2010). The higher the value of Cronbach's alpha, the better
the reliability of research instruments. The third test was the classical assumption test.
The classical assumption tests in this study were the normality test, multicollinearity
test, and heteroscedasticity test. The fourth test was that the hypotheses test. A statistic
tool utilized to test the hypotheses in this study was multiple regressions.

Result and Discussion

Based on the validity test results, all the item’s loading factor scores were more than
0.5. Thus, all the items on the statements of each variable were valid. In the reliability
test, the score of Cronbach's alpha for each variable was more than 0.6. Based on this
result, it can be concluded that all of the variables in this study were reliable. In the
classical assumption, it is indicated that the data were normal, with no multicollinearity
symptoms, and there was no heteroscedasticity. The last statistical test was multiple
regressions. This test would answer whether the hypotheses were accepted or not. The
table below shows the results of the three hypotheses.

Table 1 Hypotheses Results

Hypotheses β P-value Conclusions
H1: Internal locus of control has a positive influence 0,104 0,036 hypothesis was
on the entrepreneurial intention supported
H2: Need for achievement has a positive influence on 0,094 0,044 hypothesis was
entrepreneurial intention supported
H3: Self-efficacy has a positive influence on 0,774 0,001 hypothesis was
entrepreneurial intention supported

Discussion

The Influence of Internal Locus of Control on Entrepreneurial Intention

It is claimed that an internal locus of control affects entrepreneurial intention. It is

evidenced by recent studies, which found that the internal locus of control had a
positive influence on entrepreneurial intention (β = 0.104; p <5%). This finding supports
the previous research, which states that internal locus of control had a positive influence
on entrepreneurial intention (Fong, Lam, & Law, 2017; Karabulut, 2016; Luca et al.,

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The Influence of Personality Factors on Entrepreneurial Intention

2012). Those who had an internal locus of control tended to work hard. They assumed
that the result of the job was because of their hard work. It did not depend on luck.

The Influence of Need for Achievement on Entrepreneurial Intention

The need for achievement had a positive influence on entrepreneurial intention. It is

proved in this study that the need for achievement had a positive influence on
entrepreneurial intention (β = 0.094; p <5%). This finding supports the previous
research, which concludes that the need for achievement positively affected
entrepreneurial intention (Farouk, Ikram, & Sami, 2014; Kolvereid & Isaksen, 2012;
Moneta, 2011). The higher level of need for achievement, the bigger the entrepreneurial
intention. Those who had a high need for achievement tended to achieve something
difficult. Related to the notion, being an entrepreneur is a challenging job, and being an
entrepreneur is an achievement.

The Influence of Self-Efficacy on Entrepreneurial Intention

Self-Efficacy affected entrepreneurial intention. It is evidenced in this study that self-

efficacy positively affected entrepreneurial intention (β = 0.774; p <5%). This finding
supports the previous studies, which state that self-efficacy positively affected
entrepreneurial intention (Mortan, Ripoll, Carvalho, & Bernal, 2014; Pihie & Bagheri,
2013; Tsai, Chang, & Peng, 2016). People who had high self-efficacy tended to be more
optimistic about becoming entrepreneurs. They were energetic to pursue themselves to
be entrepreneurs. Self-efficacy was also the most influential variable in this study.
Comparing the numbers of β from all the dependent variables, the third variable had the
biggest number of β. Therefore, self-efficacy had the biggest influence on creating an
entrepreneurial intention.

Conclusion
This study contributes to the literature on the influence of personality on
entrepreneurial intention. The result of the first regression analysis showed that the first
hypothesis was proven to be supported in this study. Internal locus of control was
proven to have a positive influence on entrepreneurial intention. People who believed
that the things achieved were because of what they have done tended to have higher
entrepreneurial intentions. Based on the result of the second regression analysis,
hypothesis 2 was proven to be supported in this study. The need for achievement was
proven to have a positive influence on entrepreneurial intention. Those who had a high
need for achievement tended to have high entrepreneurial intentions. The third
regression analysis finding was that the self-efficacy variable had a positive influence on
entrepreneurial intention. Those who had a high level of confidence in the ability to be
self-employed tended to have high levels of entrepreneurial intention. The last
conclusion is about the most influential dependent variable. In this study, it was found
that self-efficacy was the most influential dependent variable. The number of β from the
third variable was the highest, among others.

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This study has some limitations that may affect the results of the overall study. The
sample of this research was university students. For the next research, it is much better
if the researcher involves the other levels of education, such as junior high school, senior
high school, and so on. This research only used three variables of personality factors. For
the next research, it is better to add other personality variables, such as the big-five
personality.

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