Application of Theory of Planned Behavior for Assessing Entrepreneurial Behavior of Workers in the Unorganized Sector

P Venkateswarlu
Professor, IBS Hyderabad (Under IFHE – A Deemed to be University u/s 3 of the UGC Act, 1956), Hyderabad, Telangana, India; and is the corresponding author. E-mail: venkat@ibsindia.org

R R Reddy
Professor, IBS Hyderabad (Under IFHE – A Deemed to be University u/s 3 of the UGC Act, 1956), Hyderabad, Telangana, India. E-mail: rrreddy@ibsindia.org

Ajzen's Theory of Planned Behavior (TPB) was applied to study the entrepreneurial behavior of workers in the unorganized sector. Workers from the construction sector were considered for the study. The results indicate that all the three TPB variables, viz., attitude, subjective norm and perceived behavior control, have significant effect and are the strongest predictors of becoming entrepreneurs. It is evident that females have shown lesser attitude and perceived behavior control than males to become entrepreneurs. There is a need for the governments to recognize the unorganized construction sector and provide some basic education to strengthen their entrepreneurial skills and enhance their confidence to become better entrepreneurs.

Introduction

Entrepreneurship is always a priority when it comes to the socioeconomic agenda of the country. Entrepreneurship generates employment opportunities and bridges the gap between the poor and the rich. The word entrepreneurship depicts the challenges and the struggles of individuals who invest their time, money and efforts to bring a change in the lives of the people. Entrepreneurs create job opportunities and spend on innovation of new products and technology development, thus contributing to the economy of the country. People who are highly motivated towards business, their perseverance and willingness to take risk for making profits in their business become successful entrepreneurs.

The construction industry in India is the second-largest sector after agriculture. Building activity is highly labor-intensive and creates a lot of employment opportunities. It is also one of the engines for the economic development of the country. There are several big players in the market who undertake the activities and in turn subcontract to the petty contractors for completing the activity.

92% of the workforce in India is from the unorganized sector. The entire farm sector comes under the informal category. Workers from non-farm sector who are in the organized sector account for only one-fifth. As per information, the informal sector is declining in the non-farm sectors. The unorganized workforce in the agriculture sector remains flat.1 Several BPL families live in the villages of Andhra Pradesh and Telangana who have got skills. These families are poor, landless and marginal families. They work in the agricultural fields when there are opportunities. With natural calamities (drought which is a regular phenomenon and less water resources available in these villages), livelihood becomes very difficult for these families. As a result, they migrate to big cities to work as laborers in the construction activity. They leave their families in the villages. Some move away permanently leaving their little land they have as fallow.

It is a general practice that the contractors (known as Mastries) who are established will approach the parents in the villages for getting the boys/girls for the construction activity. They offer them a lump sum amount for a year contract and take them to cities. These boys/girls start their career at the age of 14 to 15 as helpers. These workers stay in the temporary tents, with tarpaulin as partition, at the working site at the cellar or the basement. There will be 5 to 6 members in each tent. One temporary toilet is provided for all the workers. Female workers face the problem of privacy. Security is another issue as these tents are temporary and do not have proper doors or safety. Unfortunately, in the unorganized sectors, minimum safety standards are not maintained or adhered to by the contractors, which results in frequent accidents at the construction site.

After working for a few years as helpers and attaining the skills, these helpers get upgraded to masonry workers. At this point of transformation, they start acquiring entrepreneurial skills. Once they have gained confidence and skills, they start developing the contacts with the society and slowly develop the business on their own. The masonry workers who started their career for livelihood as helpers take financial risk of starting their own activity for better living and earnings. These people possessing entrepreneurial intentions follow the same path as other contractors with whom they have started their career, i.e., going into villages and taking the boys or girls for their work.

The objective of this paper is to assess the entrepreneurial intentions in the masonry workers with the application of Ajzen's model of Theory of Planned Behavior (TPB). Ajzen (1991) conceptualized a model as shown in Figure 1 for determining the person's intentions towards entrepreneurship. Several models were developed by researchers for determining the factors which influence the intentions for the business. However, only two models became very popular and proved more efficient such as Ajzen's model of TPB and Shapero model of entrepreneurial event. Ajzen's theory focuses mainly on the person's attributes while Shapero's model focuses on the social and cultural attributes. For determining the entrepreneurial intentions of the masonry workers, Ajzen's theory is being used in the present paper. Ajzen opines that three variables, namely, Personal Attitude, Subjective Norm and Perceived Behavior Control, have significant impact on entrepreneurial intention.

Personal Attitude: The TPB assumes that every person will have the characteristics which may be positive or negative to become an entrepreneur. Personal attitude is the first predictor of TPB model, reflects the individual's behavior which may range from favorable to unfavorable. As per the TPB theory, if the appraisal of the behavior is higher then the entrepreneurial intentions are higher.

Subjective Norm: It depicts whether the individual can take the social pressure from the family members, friends and relatives, etc. for starting the venture. As per the TPB theory, the higher the expectation from the friends and family, the higher the pull towards the specific or given behavior.

Perceived Behavior Control: It is the perception of the individuals as to how he or she can start the business venture and refers to what extent an individual is able to perform the specific or given behavior. It is mostly dependent on the knowledge and experience the individual has. It also deals with the availability of opportunities. It is assumed that the more the opportunities and resources people believe to possess, the lesser the impediments or obstacles they expect and the higher their perceived control on the behavior.

Data and Methodology

Primary data was collected through a structured questionnaire (see Appendix) designed to meet the requirements of the present study using simple random sampling. The workers coming from the districts of the same state live at one place within reach. Field survey was conducted across several locations in and around the city of Hyderabad in Telangana State. A total of 359 questionnaires were collected.

Results and Discussion

Demographic profile of the respondents is given in Table 1. Out of 359 respondents, 88.3% (n = 317) were male workers and 11.7% (n = 42) were female workers. 35.4% of the workers were in the age group of 18 to 25 years. 7.5% were between 41 to 45 years of age and no one above 46 years of age. 51% (n = 183) were contractors, 14.5% were masons and 22.8% were helpers. 56% of the respondents were married and 44% were not married. A majority of the respondents, i.e., 77.7%, had not received formal education and the remaining had received primary or secondary school education.

Cronbach alpha coefficient was calculated to check the reliability and consistency of the data. The alpha coefficient for all the constructs of the model such as attitude, subjective norm and perceived behavior control and the intentions ranged from 0.69 to 0.86, indicating that the data was consistent and reliable.

The Pearson correlation coefficient was calculated to confirm the relationship and relevance of the variables with each other. As shown in Table 2, all the variables are significantly correlated to each other.

Multiple Linear Regression Analysis

The multiple linear regression analysis was carried out to determine the structure of the relationship between the dependent variable, i.e., entrepreneurial intention and the independent variables, i.e., attitude, subjective norm and perceived behavior control. From the results shown in Table 3, TPB variables were able to capture 64% of the variance in predicting the entrepreneurial intentions.

The results in Table 4 indicate that entrepreneurial intentions are positively associated with attitude towards entrepreneurship (b = 0.320); subject norm (b = 0.300) and perceived behavior control (b = 0.317). These results support that all three constructions of TPB have positive relation with the entrepreneurial intentions. These results are in agreement with Ajzen's opinion that there are three important variables that have great significant impact on entrepreneurial intentions, viz., attitude, subject norm and perceived behavior control (Linan, 2008; and Ahmed et al., 2010). However, results did not support the statement of Linan (2008) that subject norms do not play any role, and it is the weakest role and hence should not be considered as explanatory variable in determining the entrepreneurial intentions.

Gender Variance Towards TPB Variables

Analysis of variance was used to study the differences in gender among respondent's intentions for entrepreneurship. It can be seen from Table 5 that F-value pertaining to gender is statistically significant (p = 0.000) for all the TPB variables which indicates that there is difference between males and females.

From the above results, it is evident that there is a significant difference among males and females towards TPB constructs of subjective norm and perceived behavior control. However, both males and females have a positive attitude towards behaviors for business intentions.

The descriptive statistics in Table 6 for the gender response to the TPB variables indicate that males have high positive attitude towards entrepreneurship; females did not show positive attitude; they were not supported or encouraged by their family or friends. Females have less entrepreneurial intentions than males. Males have significant and high perceived behavioral control than females. It may be inferred that females understand the relevance and importance of being an entrepreneur, but they lack the initiative and intention to start a business. Females perceive that setting up a business entity is difficult and

they lack the entrepreneurial skills. It may not be the reason in the case of the current study pertaining to construction industry and workers. In the construction industry, a majority of the male members take initiative to become entrepreneurs.

Conclusion

Ajzen's model of TPB has been found to be very useful in explaining the entrepreneurial intentions among the construction workers. All the three variables, personal attitude, subjective norm and perceived behavior control, positively contributed and predicted the behavioral intent which is statistically significant at different levels. This has supported the research conducted earlier on TPB applied in different contexts (Schulze and Wittmann, 2003; and Armitage and Conner, 2001).

The model explained 64% of the variance in the entrepreneurial intention with TPB variables, attitude, subject norm and perceived behavior control, as independent variables for the complete dataset. But this is contrary to the earlier research studies like Krueger et al. (2000) wherein the TPB variables had explained 35% of the variances. The results indicated that all the TPB variables were the predictors and had effect on the entrepreneurial intentions as against the findings of the Greenwood (1971) where it was reported that only attitude and perceived behavior control were the main factors which had significant influence on the entrepreneurial intentions.

The study highlights that gender has a great impact on the entrepreneurial intentions significantly. Females have low attitude towards entrepreneurship; they are not supported or encouraged by their families and also the perceived behavior control is very low as compared to males. The results highlight that males show significantly high attitude and perceived behavior control than females. It is implied that in the unorganized construction sector, females do not come forward to take the risk of setting up a business as it involves a lot of movement and networking.

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