STUDY ON ENTREPRENEURIAL BEHAVIOUR OF FARMERS IN THONDAMUTHUR BLOCK OF COIMBATORE DISTRICT SEMINAR REPORT SUBMITTED BY SHABEERA SULTANA 11-601-008 DEPARTMENT OF AGRICULTURAL RURAL MANAGEMENT CENTRE FOR AGRICULTURAL RURAL DEVELOPMENT STUDIES AGRICULTURAL COLLEGE AND RESEARCH INSTITUTE TAMIL NADU AGRICULTURAL UNIVERSITY COIMBATORE CONTENTS Chapter Title No. I INTRODUCTION II LITERATURE REVIEW III DESIGN OF STUDY IV RESULT AND DISCUSSION V SUMMARY REFERENCES Chapter 1 INTRODUCTION The entrepreneur is part of a complex process of new venture creation’- (Gartner) It is now widely accepted that, apart from the start up phase, most firms are more concerned about survival rather than growth and relatively few are especially entrepreneurial (Gray 1998). Consequently, a lot of research in this field has focused on finding the characteristics that set entrepreneurs and their firms apart from others. Elizabeth Chell (1985, 1999), a social psychologist, has examined numerous psychological trait-based approaches and concluded that, whilst psychological aspects such as ‘entrepreneurial intention’ and the ‘ability to recognize opportunities’ are strongly linked to entrepreneurial behaviour, the context in which the entrepreneur operates is also very important. Entrepreneurship reflects complex interactions between the individual and the situation, which has to be dynamic because business situations are always changing. However, a commonly quoted empirical and desk research study of new venture start-ups, that has stood the test of time over the past quarter-century, was conducted through the Massachusetts Institute of Technology by Jeffrey Timmons and colleagues (Timmons et al. 1977). They identified 14 important entrepreneurial characteristics of successful enterprise owners which still frequently crop up in entrepreneurship research. Behavioural charcteristics of entrepreneurs • drive and energy • self-confidence • high initiative and personal responsibility • internal locus of control • tolerance of ambiguity • low fear of failure • moderate risk taking • long-term involvement • money as a measure not merely an end • use of feedback • continuous pragmatic problem solving • use of resources • self-imposed standards • clear goal setting. These characteristics appear consistently in other entrepreneurial research studies. For example, more than 20 years ago in a study of Irish entrepreneurs, Cromie and Johns (1983) identified achievement, persistence and self-confidence as general successful business characteristics as well as internal locus of control and commitment to the business, as the characteristics peculiar to entrepreneurs. Some of the qualities that people often find a bit obscure include tolerance of ambiguity (which basically refers to the ability to accept contradictory or unexpected evidence of something while keeping an open mind) and fear of failure (which can lead to pushy, goal- dominated behaviour but, in fact, is the opposite of need for achievement – nAch – mentioned in Section 1; the anxiety caused by the fear can sometimes be strong enough to cause the individual to deliberately bring about the failure that is feared). Low fear of failure means that the entrepreneur is prepared to risk things going wrong and can handle setbacks without being deterred (which is associated with but not quite the same thing as high nAch, where failure can lead to severe disappointment and loss of confidence). High achievement motivation is a great driving force but low fear of failure may be very useful in times of business chaos and uncertainty. There is a tendency for high nAch people to come from very supportive backgrounds and for them to be motivated to achieve in different areas. In contrast, high fear of failure people tend to come from disrupted or non-supportive backgrounds and focus more obsessively on areas where they are more likely to achieve their goals (Kets De Vries 1977) high fear of failure people would have comparatively low perceived capabilities and expectations whereas high nAch people may be a bit over-confident about their own capabilities and stretch their expectations by setting challenging targets). However, these tendencies are not set in stone and the actual experience of business can have a big effect in inducing either more caution or more confidence. Still, if you are uncertain of your own drive to succeed or your ability to persist, the wisest course of action is to consider pushing your idea as part of a team. Small groups not only provide support, they also have a wider range of abilities and skills and often come up with more considered decisions. Perhaps a little less familiar is the quality that successful small business owners are said to have – high internal locus of control. This means that they believe that their behaviour determines what happens to them and that they can control their own behaviour. This is linked to the need for autonomy and personal independence expressed by many entrepreneurs as their prime motivation for setting up their own firms (Gray 1998). Internal locus of control has featured fairly consistently in studies on the psychological characteristics of entrepreneurs. Essentially the concept implies three separate beliefs on the part of individuals that: 1. the outcome of events and situations are susceptible to intervention 2. individuals can intervene and influence the outcome of situations positively from their perspective 3. they themselves have the skills and capacity to intervene effectively in certain situations or to influence certain events. The self-confidence, energy flexibility and opportunism associated with entrepreneurial behaviour suggests that entrepreneurs are individuals who are accustomed to getting involved and that they expect positive results from their involvement. In other words, they are prepared to expend energy and mental effort because they expect and often receive appropriate or, in their terms, valuable rewards. Also, they are flexible and opportunistic because they believe they have the capacity to become involved across a broad range of situations. Internal locus of control beliefs are essential to the success of self-motivated behaviour and form a central core of the entrepreneur's self-concept. However, it is equally clear that entrepreneurs will not be the only people sharing these beliefs. Rural development is more than ever before linked to entrepreneurship. Institutions and individuals promoting rural development now see entrepreneurship as a strategic development intervention that could accelerate the rural development process. Further, more institutions and individuals seem to agree on the urgent need to promote rural enterprises; development agencies see rural entrepreneurship as an enormous employment potential; politicians see it as the key strategy to prevent rural unrest; farmers see it as an instrument for improving farm earnings; and women see it as an employment possibility near their homes which provides autonomy, independence and a reduced need for social support. To all these groups, however, entrepreneurship stands as a vehicle to improve the quality of life for individuals, families and communities and to sustain a healthy economy and environment (Petrin, 2000). Development of economy of any nation depends primarily on the important role played by entrepreneurs. The role played by such entrepreneurs is of vital importance in developing country like India, where there are ample opportunities for using innovations to exploit the available resources, particularly in the field of agriculture. Thus, in all economic development activities more and more focus is being centered on entrepreneurship of the people. Entrepreneurship has been now recognized as a concept, not only vital for starting industries but also in the development of agriculture. Further, in a heterogeneous and stratified society like India, it is not adequately realized that the characteristics which distinguish entrepreneurship may not be uniform for its different strata. In other words, characteristics identified for urban entrepreneurs may not apply equally well to rural entrepreneurs. Entrepreneurship relating to self-employment in small industries may vary from entrepreneurship related to agriculture. The entrepreneurs are key persons of any country for promoting economic growth and technological change. The development of entrepreneurship is directly related to the socio- economic development of the society. Eighty per cent of the population resides in the rural areas and seventy per cent of the work force depends on agriculture for their livelihood. Therefore role of farmers is very important in agricultural and socio-economic development of the nation. In this context, it was felt necessary to determine the level of entrepreneurial behaviour among the farmers. OBJECTIVES OF THE STUDY To determine the entrepreneurial behavior of farmers To assess the characteristic of farmers and to analyze their relationship with entrepreneurial behavior To identify factors which affect their entrepreneurship behavior SCOPE OF THE STUDY The importance of entrepreneurship in economic development is being recognized all over the world. A widely accepted view is the following : while personal characteristics as well as social aspects clearly play some role, entrepreneurship and entrepreneurs can also be developed through conscious action. Development of entrepreneurs and of entrepreneurship can be stimulated through a set of supporting institutions and through deliberate