Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)

Research Article: 2021 Vol: 20 Issue: 6S

The Effect of Entrepreneurship Education and Family Environment with Passion as Mediation towards Students' Entrepreneurial Motivation

Jennifer Augusta Winoto, Universitas Ciputra Surabaya

Charly Hongdiyanto, Universitas Ciputra Surabaya*

Wendra Hartono, Universitas Ciputra Surabaya

Gracia Ongkowijoyo, Universitas Ciputra Surabaya

Keywords

Entrepreneurship Education, Family Environment, Passion, Entrepreneurial Motivation

Abstract

 The purpose of this research is to know how entrepreneurship education, family environment, and passion as mediation could affect the students’ entrepreneurial motivation. Quantitative research is being used in this research and SmartPLS will also be used to calculate the statistical data. The population of this research is the students of Universitas Ciputra batch 2017-2019. From those population, this research use simple random sampling method and find 148 students as the sample. The results of this research are first, entrepreneurship education affect students’ entrepreneurial motivation significantly. Second, entrepreneurship education also affects passion as mediation significantly. Third, family environment also effect passion as mediation significantly and fourth, family environment also affect students’ entrepreneurial motivation significantly. However, the fifth result shows that passion as mediation does not affect the students’ entrepreneurial motivation significantly. The findings of this study suggests that educational institute should focus more on the quality of the entrepreneurship education given towards the students and should focus on the different family backgrounds of each of the students instead on focusing on developing the students passion.

Introduction

Entrepreneurial career had become one of the tools that was and still being used by a country to increase its economical level. Based on the World’s Economic Forum’s latest annual survey on youth attitudes in Association of Southeast Asian Nations (ASEAN), Indonesia positioned as number one country among the other 5 countries of ASEAN with the highest entrepreneurial intention (Wood, 2019).

Based on the other survey conducted by World Economic Forum, becoming an entrepreneur also become the first choice for people in ASEAN when they were asked about where they wanted to work and right now, most of the occupations found on ASEAN youth are entrepreneur (Wood, 2019). However despite all of those demand about becoming an entrepreneur, Global Entrepreneurship Monitor (GME) survey stated that the entrepreneurial motivation in Indonesia was still low and below average (Global Entrepreneurship Research Association, London Business School, 2018; Hongdiyanto et al., 2020). Even though the existence of business created by entrepreneurs in the community certainly makes positive contributions to the environment, the number entrepreneurs are still limited (Hongdiyanto, 2021). In order to know what factors that influence students’ entrepreneurial motivation, researcher conducted a pre-survey to 22 students with entrepreneurial background or knowledge to know what were the most influencing factors that affect students’ entrepreneurial motivation. Based on the result of the pre-survey, the top 3 factors that influenced students’ entrepreneurial motivation were entrepreneurship education with 81.8% (18 students), family environment with 77.3% (17 students), and entrepreneurial passion with 90.9% (20 students).

Aside of those factors above, based on Hutagalung, et al., (2017) it is being stated that entrepreneurship education and family environment influence students’ entrepreneurial motivation. Based on Obschonka, et al., (2019) entrepreneurial behavior shown by individuals accompanied with strong passion will effect on the entrepreneurship behavior. According to Obschonk, et al., (2019) entrepreneurial passion could not stand on its own, passion is like the heart of entrepreneurship. There should be another factor before it with the entrepreneurial passion in within then it will result to the better entrepreneurial behavior. For example entrepreneurial activity such as entrepreneurship education without passion could somewhat be problematic. It was because passion is the mediating factors, which could increase the output result of the entrepreneurial behavior of an individual. So in this case, passion could be considered as an integrative part or moderation the entrepreneurship motivation. Based on the phenomena described previously, researcher decided to analyze the effect of entrepreneurship education and family environment with passion as mediation towards the students’ entrepreneurial motivation. The samples that will be observed are from Ciputra University students, since Ciputra University is a well-known entrepreneurship university which also holds these factors as important aspects in entrepreneurship. There are seven competences of entrepreneurship based on Ciputra University, which are moral integrity, high sense of achievement, lifelong learning, networking, opportunity creation, creativity and innovation, and calculated risk taking. This research was related to one of the entrepreneurship competencies that Ciputra University has, which is life-long learning. By observing these, researcher can know whether entrepreneurship education and family environment with passion as mediation affect the students’ entrepreneurial motivation in order to create lifelong learning competences from the students’ entrepreneurship motivation.

Literature Review and Hypotheses

Based on by Grave & Hofer (1991) the theory of entrepreneurship activity was defined as all of the things such as activities, functions, and actions related with achieving the opportunity and creations of the organization to pursue entrepreneurship. According to Syaifuddin (2016); Hutagalung, et al., (2017) entrepreneurship education is the process when students change their mindset and attitudes in selecting their career in entrepreneurship. Entrepreneurial education has a purpose to help students increase their chance of achieving business success, enlarge, and increase options towards the careers choice (Garavan & O’ Cinneide, 1994; Liñán, 2004; Nabi et al., 2017).

According Semiawan (2010) in Hutagalung, et al., (2017) family environment was the smallest group in the community, which consists of father, mother, child and other family members. Family environment in these case parents was the main factors, which could influence children behavior and development. Parents also played an important part for their children’s future, which means that parents could also affect the motivation of children in choosing their career, including when they chose to be an entrepreneur (Hutagalung et al., 2017). Supported with Zachary (2011); Zhu, et al., (2020), it was also being said that family plays an important part in supporting children to start their entrepreneurial activities.

The main factors that could affect someone to engage and persist through difficulties was the passion that they had within them, this indicates the relevance of looking at passions for specific work behaviors (Vallerand et al., 2003; Collewaert et al., 2016; Moeller et al., 2017); (Obschonka et al., 2019). According to Cardon, et al., (2013); Obschonka, et al., (2019) entrepreneurial passion not only create creativity and new insights of opportunities, but it also helped the social processes related with the entrepreneurial process. (e.g., convincing business partners or clients and workers). According to Cardon, et al., (2009); Campos (2017) entrepreneurial passion was defined as the strong positive feelings, which was made by the experienced encountered with activities or roles, which was important and meaningful to the entrepreneurs.

According to Hutagalung, et al., (2017) motivation explained why people behave as they did and motivation was the factor which push people in achieving their goals. Based on Atienza-Sahuquillo (2017) the motivational force could be describe as the amount of effort of a person when they wanted to achieved a specific goals. Motivation could let individual to do something, because they themselves does it (Wibowo, Yunal & Indriyani, 2013; Hutagalung et al., 2017). It is also being explained in Baum (2007) in Herdjiono, et al., (2017) directed motivation was one of the example in motivation in entrepreneurship. Directed motivation is the motivation to achieve the purpose of entrepreneurship itself. Some of those purposes were such as purpose to explore more about business opportunities or expanding business.

Based on the background described, the problem formulations of this research are:

1. Does entrepreneurship education have significant effect towards entrepreneurial motivation?

2. Does family environment have significant effect towards entrepreneurial motivation?

3. Does entrepreneurship education have significant effect towards passion as mediation?

4. Does family environment have significant effect towards passion as mediation?

5. Does passion as mediation have significant effect towards students’ entrepreneurial behavior?

Research Methods

The method being used in this research is the quantitative method. Primary data are being collected with questionnaires; the data gained will then be calculated in SmartPLS. According to (Stockemer, 2019) population was the whole group of subjects, which the researcher wanted to seek information from. In this research the populations were the total students of Universitas Ciputra from year 2017 - 2019 who got entrepreneurship education with total of 234 students. The sampling method that was being used in this research is the simple random sampling. According to (Stockemer, 2019) random sampling means that the sample that was being used in this research are being chosen randomly, which randomization help to balance the confounding effect of both the known and unknown factors. The researcher used the slovin method with 0.05 error tolerance to calculate the sample in this research. The sample used is 148 students from Universitas Ciputra batch 2017-2019.

This research is using the partial least square method. Based on Mateos-Apricio (2011) in Hair, et al., (2017) mixing between regression-based path analyses with structural equation model was used in PLS-SEM, which estimated the parameters of a set of equations in a model of structural equation. Outer loading and Average Variance Extracted (AVE) was being used to calculate the convergent validity. However in special cases, researcher can consider not to delete the indicators if the result of the outer loading is within 0.4 and 0.7. If the AVE is above 0.5 already, indicators with outer loading within the range of 0.4 until 0.7 won’t need to be deleted. To measure the divergent validity, cross loading and Fornell-Larcker is used. According to Hair, et al., (2017) there are two ways to measure discriminant validity, the first one is cross loading and the second is Fornell-Larcker. In cross loading, the value of the indicators outer loading with its own variable should be greater than the indicators outer loading with the other variable. In Fornell-Larcker, the amount within the variable with its own variable should not be smaller than that variable with the other variable. Composite reliability was used to know and assess about the internal consistency reliability. The composite reliability result must exceeds 0.70, but in exploratory research>0.60 was considered as acceptable already and the cronbach’s alpha must also exceed 0.7 (Hair et al., 2017).

R2 (R-squared) or coefficient of determination shows the amount of the variance in the dependent variable the independent variable(s) in the model indicates (Stockemer, 2019). R2 was a measure of the model’s predictive power. Squared correlation in the model’s actual and predicted values is calculated. 0-1 is the range of R2. If the value of R2 was 0 it shows the independent variable(s) did not describe the variance of the dependent variable. However, if the value is 1, it showed that the independent variable(s) describe variance in dependent variable (Stockemer, 2019). The higher the levels R2 it indicated the higher the predictive accuracy was.

For the mediation effect test, two methods were used path coefficient and t-statistic. Path coefficient is the method used to show the relationship between the variable, whether the variable had a positive or negative effect and usually fall in between -1 until +1 (Hair et al., 2017). T-statistic is the method used to measure the mediation variable, whether the mediation variable act as a partial mediation, full mediation, or no mediation at all. If the value of T-statistic is >1.96, then it can be considered as significant. The research model can be seen on Figure 1.

Figure 1: Research Model

Results and Discussions

The questionnaires were distributed online through Google forms and had gained answers from 148 students from batch 2017- 2019 of Ciputra University. The data gained are solely being used to fulfill the purpose of this research. SmartPLS is used to process the statistical data in this research. Respondent data indicates that the 148 respondents who fill the questionnaire are 59 people from batch 2017 with 39.86%, 44 people are from batch 2018 with 29.73%, and 45 people are from batch 2019 with 30.41%. The majority of the respondents are within the age of 20-21 years old, which are 94 people with 63.51%, and 17-19 years old which are 47 people with 31.76%, and 22 years old and above which are 7 people with 4.73% following consecutively.

According to Hair, et al., (2017) to be considered as valid, the outer loading of each of the indicators should be above 0.7 while the amount of AVE or average variance extracted must >0.5. If the outer loading is above 0.7 and the average variance extracted exceed 0.5 it can be considered as valid. If the amount of outer loading of the indicator is below 0.7 and the average variance extracted is below 0.5, then some indicators needed to be deleted in order to increase the value of the average variance extracted and to meet the criteria of the validation. However in special cases, researcher can consider not to delete the indicators if the result of the outer loading is within 0.4 and 0.7. If the AVE is above 0.5 already, indicators with outer loading within the range of 0.4 until 0.7 won’t need to be deleted.

Table 1
Outer Loading Value
  X1(Entrepreneurship Education) X2(Family Environment) Y(Entrepreneurial Motivation) Z(Passion)
EE1 0.671      
EE2 0.788      
EE5 0.717      
EE6 0.728      
EM2     0.865  
EM3     0.890  
FE2   0.738    
FE3   0.758    
FE4   0.764    
FE5   0.650    
FE6   0.741    
P1       0.809
P2       0.731
P3       0.673
P4       0.783
Table 2
Average Variance Extracted (AVE)
  Average Variance Extracted (AVE)
X1 (Entrepreneurship Education) 0.529
X2 (Family Environment) 0.535
Y (Entrepreneurial Motivation) 0.771
Z (Passion) 0.564

Table 1 and 2 shows that all the AVE of the variables exceed 0.5 which fulfills the criteria of the validation and in table there are some outer loading value below 0.7 which are still being used because the AVE of the variable had exceed 0.5, so the indicators in the outer loading can still be used. In variable X1 the items that are being deleted are EE3 “Field trips held by university help students’ master all skills needed by entrepreneurs” and EE4 “Knowledge of university lecturers’ help students’ master all skills needed by entrepreneurs”. For variable X2, there is one that is being deleted which is FE1 “Parents’ occupation in the family influences the decision on the children’s dream job”. In variable Y the items that are being deleted are EM1 “The ability to made decision on their own as an entrepreneur motivate students on becoming an entrepreneur”, EM4 “Profit gained from becoming an entrepreneur is one of the factors that motivate students to become an entrepreneur”, EM5 “The freedom of being an entrepreneur motivates students on becoming an entrepreneur”. In variable Z the items that are being deleted is P5 “People will produce a better result when doing things they have passion at”. All of these items are being deleted since it doesn’t support this research.

The method being used in discriminant validity is the cross loading and Fornell-Larcker method. According to Hair, et al., (2017) the cross loading of the indicator with the variable that the indicators measure should have bigger correlation than the correlation from that indicator with the other variable. While in Fornell-Larcker, the value of the correlation between variable and the same variable should be bigger than the correlation of the variable with the other variable.

Table 3
Cross Loading
  X1(Entrepreneurship Education) X2(Family Environment) Y(Entrepreneurial Motivation) Z(Passion)
EE1 0.671 0.119 0.187 0.175
EE2 0.788 0.144 0.337 0.332
EE5 0.717 0.202 0.227 0.144
EE6 0.728 0.244 0.259 0.278
EM2 0.412 0.337 0.865 0.325
EM3 0.233 0.501 0.890 0.367
FE2 0.263 0.738 0.409 0.330
FE3 0.141 0.758 0.298 0.425
FE4 0.147 0.764 0.327 0.312
FE5 0.046 0.650 0.262 0.297
FE6 0.263 0.741 0.452 0.187
P1 0.340 0.353 0.235 0.809
P2 0.184 0.340 0.331 0.731
P3 0.242 0.170 0.283 0.673
P4 0.261 0.384 0.337 0.783

From Table 3, all of the value of the correlation within the indicators and the variable that the indicators measure are all higher than the correlation within the indicators with the other variables that the indicators didn’t measure, this indicates that the cross loading has fulfill the criteria and can be considered as valid.

Table 4
Fornell-Larcker
  X1(Entrepreneurship Education) X2(Family Environment) Y(Entrepreneurial Motivation) Z(Passion)
X1(Entrepreneurship Education) 0.727      
X2(FamilyEnvironment) 0.242 0.731    
Y (Entrepreneurial Motivation) 0.362 0.482 0.878  
Z (Passion) 0.342 0.427 0.395 0.751

From Table 4, the results indicates that the value of the correlation between variable and the same variable are bigger than the correlation of the variable with the other variable, which shows that it fulfills the criteria of the validity and can be considered as valid. The methods being used in the reliability test in this research are composite reliability and cronbach’s alpha. According to Hair, et al., (2017) both the composite reliability and cronbach’s alpha can be considered as reliable if the value is >0.7. Table 3 and 4 shows the result of the composite reliability and cronbach’s alpha of this research.

Based on all the values of composite reliability and cronbach’s alpha of each of the variable are above 0.7, this indicates that it fulfills the criteria and can be considered as reliable. R2 (R-squared) or usually called coefficient of determination in this research was used to explain the mediation variable and the dependent variable (Y). Table 5 below shows the result of the R- Squared of this research.

Table 5
R-Square
  R-Square
Y (Entrepreneurial Motivation) 0.317
Z (Passion) 0.243

From the table above the value of R-square of variable entrepreneurial motivation (Y) is 0.317 and the value of R-square of passion (Z) is 0.243. It can be interpreted that variable entrepreneurial motivation can be explained by 0.317 (31.7%) with variable entrepreneurship education, family environment, and passion. While the rest 68.3% were being explained by other variables outside this research. Variable passion (Z) can be explained by 0.243 (24.3%) by entrepreneurship education and family environment, while the other 75.7% were being explained by other variables outside of this research. Path coefficient is the method used to show the relationship between the variable, whether the variable had a positive or negative effect and usually fall in between -1 until +1 (Hair et al., 2017). T- Statistic is the method used to measure the mediation variable, whether the mediation variable act as a partial mediation, full mediation, or no mediation at all. If the value of T-statistic is >1.96, then it can be considered as significant.

Table 6
Path Coefficient
  Original Sample Sample Mean Standard Deviation T-Statistic P-Value
X1 → Y 0.218 0.220 0.084 2.588 0.010
X1 → Z 0.253 0.261 0.091 2.800 0.005
X2 → Y 0.357 0.367 0.101 3.518 0.000
X2 → Z 0.366 0.369 0.100 3.673 0.000
Z → Y 0.168 0.166 0.123 1.365 0.173
Table 7T-Statistic
  Original Sample Sample Mean Standard Deviation T-Statistic P-Value
X1 → Z → Y 0.043 0.043 0.037 1.158 0.248
X2 → Z → Y 0.061 0.064 0.052 1.170 0.242

Both Table 6 and Table 7 show the result of the relationship between each variable. Variable X1 entrepreneurship education towards variable Y entrepreneurial motivation had a positive relation and the T-statistic value is above 1.96 (2.588) which shows that the relationship is significant. While Variable X1 entrepreneurship education towards variable Z passion also have a positive and significant relationship, with t-statistic 2.8. However, when variable X1 entrepreneurship education to variable Z passion to variable Y entrepreneurial motivation the relationship is still positive, but the t-statistic is <1.96 (1.158) which shows that it is not significant, this indicates that the mediation variable act as a no mediation. For variable X2 family environment towards variable Y entrepreneurial motivation had a positive and significant relationship with the t-statistic 3.518, which is >1.96. Variable X2 family environment also have a positive and significant relationship with variable Z passion with t-statistic of 3.673, which is >1.96. However, when variable X2 family environment through variable Z passion to variable Y entrepreneurial motivation it still had a positive relationship, but it’s not significant since the t-statistic is 1.170, which is <1.96. The relationship between variable Z passions towards variable Y family environment is positive but not significant because the t-statistic result is 1.365, which is below 1.96. It can be concluded that the mediation variable which is passion in this research acts as a no mediation. This means that passion had no influence or to increase the students’ entrepreneurial motivation.

Based on the result previously entrepreneurship education towards students’ entrepreneurial motivation had a positive and significant relationship. With this, it can be said that the first hypothesis is valid. This is being supported with the statement from Hutagalung, et al., (2017) that stated entrepreneurship education had positive relation towards the students’ entrepreneurial motivation. This means that with the help of entrepreneurship education given in universities, students can increase their entrepreneurial motivation. Some of the entrepreneurship education that can help increase the students’ motivation are the lessons provided, real life practices such as making students’ own start-up businesses, experience from the lecturers, and the learning facilities provided by the universities for the students.

The relationship between family environment and entrepreneurial motivation shows a positive relationship and a significant relationship. Hence, the second hypothesis is proofed to be valid. This indicates that the family environment of each student does affect the students’ entrepreneurial motivation. It is being supported by Hutagalung, et al., (2017) which stated family environment had a positive and significant impact towards the students’ entrepreneurial motivation. Another research done by Lindquist, et al., (2015); Fatoki (2015); Herdjiono, et al., (2017) also supported this result, it is stated that the willingness of individuals to do entrepreneurship was influence strongly by the family environment.

The relationship between entrepreneurship educations with passion as mediation is positive and significant. This shows that the third hypothesis is also valid. It can be stated that entrepreneurship education affects passion as mediation. With the entrepreneurship education given in the universities students can slowly develop and increase their passion in entrepreneurship. It is also being supported in Kim & Park (2019) which said that passion is one of the reasons students chose to participate in entrepreneurship programs. This showed the relationship between the entrepreneurship educations with passion as mediation.

The result indicates that the relationship between family environment with passion as mediation as positive and significant. This proof that the fourth hypothesis is true or valid. Students or individuals might come from different family backgrounds. Some might came from family with many business experiences, but some may not. Some individuals might receive family supports on becoming an entrepreneur and some might not. These differences of family background might affect the passion of each individual in pursuing their career as an entrepreneur. This is also being supported in Constantinidis, et al., (2019) it is being stated that with different backgrounds and family environments, individual’s entrepreneurship passion with another could differ.

The result of passion as mediation towards students’ entrepreneurial motivation is positive, however it is not significant. This shows that the fifth hypothesis can’t be approved or rejected. This indicates that passion alone didn’t affect the students’ entrepreneurial motivation. In the previous study Fisher, et al., (2018) stated that successful entrepreneurs usually are being driven by the passion they have within them to motivate them to become entrepreneurs. However, the result of this previous research is contradicted with the result of this research. The result of this research is also being supported by Bhansing, et al., (2017) which stated that entrepreneurial passion towards the motivation of starting a new business or becoming an entrepreneur doesn’t have a significant impact. The reason why passion as mediation didn’t affect students’ entrepreneurial motivation because passion might affect the persistence of an individual when they find problems in their business later on and when they had become an entrepreneur in the future, but not increase the motivation in choosing entrepreneurship as their career in the first place, which in this research the case is measuring the passion for choosing entrepreneurship as their career in the future. The other reason is there are several types of passion like being stated in Spehar (2016) that there are two different types of passion being measured, the first one is harmonious passion and the second one is obsessive passion. The obsessive passion had no significant impacts towards entrepreneurial motivation, where harmonious passion is when the works is in accordance with the other activities in life and obsessive passion is when the individuals have difficulties in controlling their desire to do their job. Most of the students might thought of passion as the obsessive passion, which influence the result of this research, which is why the result of this research is not significant.

Conclusions and Limitation

Conclusions gained in order to increase students’ entrepreneurial motivation for educational institute are educational institutions should focus more on giving the best entrepreneurship education by focusing more on the lessons provided, real life practices, experience from lecturers, and learning facilities which are being given towards the students. Educational institutions must also maintain the quality of the entrepreneurship education given to the students since it can influence on increasing students’ entrepreneurial motivation. Instead of focusing more on developing the students’ passion (since the result is not significant), educational institution should focus more on the differences of the family backgrounds which the students have. Since different family backgrounds might affect the rate of students’ entrepreneurial motivation, educational institutions can give motivational training or interactive lessons which can also increase the engagement and motivation of students which came from non-business family backgrounds, or students with lack of support from their families, etc. The limitation in this research is that the respondents that can be gathered is only students from batch 2017, 2018, 2019 since when this research take place the pandemic of corona virus is happening and it limit the ability of the researcher to reach a wider respondents.

This research can be used as a reference for finding the effect of entrepreneurship education and family environment with passion as mediation towards students’ entrepreneurial motivation. For researcher in the future, researcher can try to use other variables other than entrepreneurship education and family environment to measure the students’ entrepreneurial motivation. Mediation other than passion can also be used by the researcher in the future to find the mediation effect between the independent variable and the dependent variable.

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