Issues and constraints perceived by young entrepreneurs of Pakistan
| DOI | https://doi.org/10.1108/WJEMSD-03-2015-0015 |
| Pages | 50-65 |
| Published date | 14 March 2016 |
| Date | 14 March 2016 |
| Author | Saad Aslam,S.A.F. Hasnu |
| Subject Matter | Strategy,Business ethics,Sustainability |
Issues and constraints perceived
by young entrepreneurs
of Pakistan
Saad Aslam
Department of Management Sciences,
COMSATS Institute of Information Technology, Abbottabad, Pakistan and
Department of Management Sciences, Preston University, Islamabad, Pakistan, and
S.A.F. Hasnu
Department of Management Sciences,
COMSATS Institute of Information Technology, Abbottabad, Pakistan
Abstract
Purpose –The purposeof this paper is to find out intentions of businessgraduating students regarding
launching theirown business, and their perception regardingissues and constraints entrepreneur would
encounter after entering into entrepreneurial activities. In addition, it focusses to provide a general
understanding regarding entrepreneurship. The study also arguesunfriendly policies and environment
for entrepreneurship slows down poverty reduction and economic development.
Design/methodology/approach –For this research, data were collected through structured
questionnaire. Population of this study comprised of all the MBA final semester students of Pakistan.
Statistical techniques were used for analysis.
Findings –Research shows that most MBA graduating students actually plan to launch their own
business, but perception about different issues and constraints refrain them to enter into the
entrepreneurial field. The study also shows that policies of government and country’s environment
effect entrepreneurship which further effects poverty reduction and economic development.
Originality/value –Differentconstraints are highlighted in thestudy due to which businessgraduates
hesitateto become an entrepreneur, plusimportance levelof each constraint isalso calculated inthe study.
Keywords Business, Entrepreneurship, Business education and entrepreneurship,
Business students perception, Constraints in launching a business,
Financial and economical constraints for business launch
Paper type Research paper
Introduction
Education of entrepreneurship has increased enormously. Universities have introduced
programs and curricula of new venture creation and entrepreneurship. Number of
colleges and universities offering courses related to entrepreneurship has increased
from a handful to 1,600, from 1970s to 2005 and they are still increasing (Donald and
Kurtoko, 2005). Entrepreneurship education and entrepreneurial know-how is most
promising factor of economic development and it is most difficult to implement
(Mcmullan and Long, 1987). Business education has been promoted to enc ourage
entrepreneurial behavior (Shariff and Saud, 2009). But a big question arises why
business students are not going for entrepreneurship.
Developing countries face poverty, unbalanced development and unemployment,
among these problems unemployment is the most blazing problem (Dev and
Mahajan, 2003). To overcome these issues in Pakistan entrepreneurship is the best
solution (Haque, 2011). It is important to find out whether people are devoted to enter
into entrepreneurial world rather than employed in large-scale or government
World Journal of
Entrepreneurship, Management
and Sustainable Development
Vol. 12 No. 1, 2016
pp. 50-65
©Emerald Group Publishing Limited
2042-5961
DOI10.1108/WJEMSD-03-2015-0015
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2042-5961.htm
50
WJEMSD
12,1
organization and factors which frightens and seizes entrepreneurial graduates going
for a new venture launch (Audretsch and Thurik, 2001).
Young people should be analyzed in order to understand which factors affect their
intentions to startup a business. As Henderson and Robertson (2000) stated that the
future career selection will depend on the creativity and individuality of the young.
However, comparatively low information is known regarding view-point of
individuals regarding entrance into entrepreneurship (Neck and Greene, 2011).
Decision of becoming an entrepreneur made by individuals can be modeled as
utility maximizing career choice (Douglas and Shepherd, 2000). Individuals choose
to become entrepreneur if the total utility they expect to originate by means of
risk-taking ability, work effort and benefits associated with launching own business
is greater than the expected utility from their best option of employment. However
people are attracted toward entrepreneurship due to following reasons:
•Entrepreneurs are their own bosses. They make the decisions. They choose
with whom to do business and what work they will do. They decide what
hours to work, as well as what to pay and when to take vacations (Scott and
Twomey, 1988).
•Average earnings of entrepreneurs are significantly higher than those workers of
same qualification, expertise and experience in employment (Hasnu, 1994).
•Entrepreneurship presents the prestige of becoming the person in charge
(Veciana et al., 2005).
•Opportunity of building equity is always available for entrepreneurs, which can
be kept, passed on to next generation or sold when required.
•Entrepreneurship is very helpful in developing a countries economy, new
entrepreneurs help local economy, and among them some contributes to society
as a whole through innovation.
This research examines the proportion of business graduates willing to opt for
entrepreneurship, identify their problems and the reasons for preference of jobs instead
of setting up their own business.
Literature review
Entrepreneurship
Definition of entrepreneurship remained an immense topic of discussion since a long
time. In 1700 the concept of entrepreneurship emerged and since then its meaning kept
on developing. Some associate concept of entrepreneurship as launching one’s own new
business. Many others believe that individuals are willing to take risk for launchin g
new business in order to take a chance for profits as an entrepreneur. Others emphasize
on innovation (Bull and Gary, 1993).
Derived definition from previous concepts of entrepreneurship is innovation and
bearing risk holds the key to entrepreneurship. Innovation can be further explained
as bringing together factors of production in a new way for more profits; and
carrying out new combinations through the process of “creative destruction”old
being washed away by the new. Bearing risk can be further explained by readiness
to bear uncertainty; and taking risky decisions (Robinson et al.,1991;Gartner,2007;
Michael, 2012).
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Entrepreneurs
of Pakistan
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