Abstract
MSMEs play vital role in the economy by way of their robust contributions to GDP, National Income and Employment. Therefore, they get special focus from Government and witness larger public participation. However, in spite of their systematic importance and large scale presence, they face several hurdles for their existence. While many succumb to quick failures, some of them also proceed to attain phenomenal success. Most of the research curiosity in MSMEs comes from this fragility and uncertainty.
Researchers believe that, reason of success or failure can be better diagnosed by finding out the genesis—what at all motivated the entrepreneur to initiate the venture. With this objective, 396 samples comprising both successful and not-so-successful enterprises are studied together to understand role of entrepreneurial motivations in enterprise success. The study finds significant co-relation between motivation and enterprise success. Independent t-Test established significant difference between successful and unsuccessful ones in terms of entrepreneurial motivation. Through Principal Component Analysis, three underlying constructs were identified explaining cumulative variance of 62.37%. They measured Need Oriented Motivation, Inspiration Oriented Motivation and Ambition Oriented Motivation. Need Oriented Motivation is found to be basic and universal to both successful and not-so-successful ones. Need served as the necessary condition but not sufficient condition for success. Combining this with Inspiration and Ambition oriented motivation seemed to lead to better probability of success.
Introduction
Small businesses are important for every economy on account of their vital contributions to labour markets, exports, regional growth and national growth. They promote competition and market efficiency (Zeneli & Zaho, 2014). In India, MSMEs are considered drivers of economic growth for their robust contributions to income, employment and GDP. As per Government of India, MSMEs contribute about 45% of the total manufacturing output, 40% of the total exports and 8% of the country’s GDP. They are second largest employment generators next to agriculture providing employment to over 50 million people. With over 63 million in number, India’s MSME base is second largest in world after China. They account for nearly 90% of the industrial units. MSMEs are present in every industry segments; railways, automobiles, aerospace, textiles, engineering and pharmaceuticals etc. either as an ancillary to a large player or as an independent entity with a niche market.
However, in spite of their large presence and systematic importance, they are vulnerable to frequent shocks and quick failures. Burns (1996) studying small business in UK observed, every year millions of ventures originate. Most of them have very short life span; about 10% deregister in 1st year, half deregister within five years and two thirds degenerates within ten years. Beaver (2002) goes to the extent of saying, if anything is constant it is the very high rates of failures among the small and young firms.
On the other hand, many of them also survive and achieve phenomenal success. Beaver (2002) explains, every business start-up is a unique event. Success factors and the circumstances to success are intangible and vary from entrepreneur to entrepreneur. Motivation acts as a trigger for entrepreneurial action. Birley (1996) found, there are complementary trigger events, positive triggers exert positive influences to start something new and negative triggers forces one to act in such a way that a venture is conceptualised. Ambitions, aspirations and future prospects are positive triggers. Job loss, incapacities, unemployment or sudden demise of an earning member are negative triggers behind a business proposition.
Objectives
Motivations are the complementary triggers, as identified by Birley (1996). They are psychological forces behind every action (Bernard et al., 2005). Hence, it is pertinent to study the entrepreneurial motivations in order to better understand the enterprise success. In the past, researchers have either studied a set of successful enterprises to identify motivation as success factors or they studied a set of failed ones to identify factors responsible for failure. There are very few researches studying both successful and failed enterprises together and finding, how they fare in terms of entrepreneurial motivation. In the above background, this article aims at finding the following:
Is there any relationship between entrepreneurial motivation and enterprise success? What are the latent constructs within various items of motivation? Is there any difference between successful enterprises and not-so-successful ones in terms of entrepreneurial motivation? Does motivation as a success parameter has discriminating capability which can be used to profile enterprise characteristics? Does motivation as a success parameter hold predictive validity for enterprise success?
Literature Review and Conceptual Framework
Motivation
The Concept of motivation has its Latin root meaning ‘to move’. They are the psychological forces (Bernard et al., 2005), which moves people to act and behave in a certain way (Eccles et al., 1998) towards attainment of a goal. Motives are the reasons that can explain why humans or animals initiate certain actions or behave in a certain way (Kazdin, 2000). Motivation influences actions, decisions, choices and pursuits (Bernard et al., 2005). According to Cambridge dictionary, motivation is the enthusiasm for doing something.
Previous researchers have identified several motivation variables in their respective enterprise studies. Among all, income has always remained a prime motive. Achieving wealth is found to be the prime motive among many male entrepreneurs to choose an entrepreneurial career (Johan et al., 2013). Improving the financial position and betterment of the life is one of the motives for starting a new business (Hazudin et al., 2015). In Romania, income and job security were important motivators (Benzing & Chu, 2005). Similar motives have been identified from various studies in African Countries. In Uganda, entrepreneurs are attracted to business to ‘make money’ (Bewayo, 1995). In Kenya and Ghana, the strongest two motivators were ‘to increase income’ and ‘to provide employment to themselves’ (Chu et al., 2007). According to Roy and Wheeler (2006), microenterprise owners in West Africa are largely attracted for a desire to satisfy basic psychological needs—‘food and shelter’ and they start a business.
Family, job security and life balances are other aspects of motivation. In Turkey, entrepreneurs are largely driven by factors like family need and security and desire to increase income (Ozsoy et al., 2001). Zhu and Chu (2010) in their study of the female entrepreneurs in China found three factors: growth, family and income-job as important motivators. Women entrepreneurs, preferred to start a business instead of choosing a subordinate job, for their quest for a balanced life and striking a work–life balance (Cromie, 1987). Among entrepreneurs in Saudi Arabia, it was found, family need and support is key motivational factor to start a business (Welsh et al., 2014). Chu et al. (2011) in a study of the Chinese entrepreneurs found, to ensure that the future legacy is properly nurtured, entrepreneurs with growing children as successors strive hard to make it success. Chu (2000), in his study of the Chinese entrepreneurs found that type of motivations depends on the gender. While female entrepreneurs are motivated by family and security, male entrepreneurs are motivated by challenges, start-up of business, and so on. Stefanovic et al. (2011) in their study of the SME entrepreneurs in Serbia found four factors, business achievement, independence, intrinsic and job security factors.
Higher order aspects like challenge, achievement, independence and autonomy are also motivations to many entrepreneurs. Stewart and Roth (2007) found that achievement itself is a motivation. Entrepreneurs are strongly attracted by the achievement-motivation because they are likely to derive strong achievement satisfaction in entrepreneurial settings which provides challenges and growth. Blanchflower and Oswald (1998) in their study found that people who are self-employed have higher level of Job and life satisfaction than the others. Willingness to be free and remain independent are prime motivational factor for entering into entrepreneurship (Carter et al., 2003; Chu et al., 2011). Resilient interest and self-satisfaction in doing the business are some of the prime reason for many entrepreneurs in the business (Wilson et al., 2007).
Hughes (2006) tried to find out whether motivation is a matter of choice or it is a matter of circumstance. An entrepreneur is either pushed or pulled to entrepreneurship. He presented three groups of motivations: classic, forced and work–family. Classic Motivation is when an individual is pulled into entrepreneurship attracted by factors like independence, challenge and financial opportunity. Forced Motivation is one when the individual is compelled due to situations like job loss or difficulty of finding employment and then resorting to entrepreneurship. Work–family motivation is the desire of an individual to balance work and family. Hughes (2006) found it more prominent in case of women entrepreneurs.
Kuratko et al. (1997) and Robichaud et al. (2001) found, motivation of entrepreneurs falls into four distinct categories, extrinsic rewards, independence/autonomy, intrinsic rewards and family security.
The above literature review is perused to identify set of motivation variables for the present study. Details of this are given in subsequent paragraphs.
Micro Small and Medium Enterprises
Revised MSME Classification.
Success
Success is a multidimensional phenomenon, which largely relates to attainment of pre-decided goals and objectives (Chittithaworn et al., 2011). Depending on objectives, it can be one or combinations from profit, survival, sales growth, return on investment, return on assets, number of persons employed or intangibles like reputation, recognition, satisfaction (of the stakeholders) and happiness (Chittithaworn et al., 2011).
While some researchers have accepted only financial parameters others have accepted only qualitative parameters. However, Bayarçelik and Özşahin (2014) argued that organisations have grown complex in their structures. Thus measuring their success only through financial parameters like sales growth and profit are inadequate. They need multidimensional measurement system which includes both subjective and objective measures. Varadarajan and Ramanujam (1986) devised a two dimensional scheme to measure business performance. They included both financial and operational indicators. While financial measures are growth in sales, profit and eps, and so on, the operational measures are customer satisfaction, market share, quality and brand establishment, and more.
For the purpose of current study, Success is being measured as a combination of both financial and non-financial parameters. Financial parameters considered are growth in sales revenue, profitability, indebtedness, sales realisation/receivable realisation, conduct of meeting external obligations. Non-financial parameters include achievement in terms of Customer Satisfaction, Quality Standard, Brand Building, Employee Satisfaction and Self Satisfaction. Respondents are asked to evaluate their business enterprise on these parameters in Likert scale of 1 to 5 where 1 is the lowest and 5 is highest. Respondents scoring 25 and above are in successful group and those below 25 are in not-so-successful group.
Research Methodology
The present study is a descriptive research using primary data, collected through self-administered survey questionnaire followed by discussions. The subjects of study are MSME enterprises located in Assam. The region was selected for several reasons. North East is still considered to be a challenging region in terms of limited resource availability, low infrastructure, poor connectivity and multiple ethnic and cultural differences among states. Economic activities are low compared to other parts of the country. At the same time, the state serves as a gateway to all other North Eastern states and connects rest of India with North East and with other Eastern neighbouring countries like Nepal, Bhutan and Bangladesh. Because of the strategic position, of late, it has received substantial focus of Central Government in terms of developments in infrastructure, investment and general business growth. The pace of economic activities in the region is upbeat in last one decade. Thus, Assam presents a perfect balance of hardship and opportunities for entrepreneurship.
As per Annual Report of Ministry of MSME, Government of India for Financial Year 2019–2020, there are 63.388 million of MSME units in India, out of which, 1.214 million are in Assam (Annexure-I of MSME Annual Report 2019–2020). Hence, the universe of the study is all the 1.214 million MSME units in Assam. Sample data are obtained from this universe. To ensure adequate sample size, two online sample size calculators were used. Considering 95% confidence level and 5% margin of error, the Raosoft Sample Size Calculator gave minimum sample size 385. The calculator from creative research system gave the sample size, 384.
In terms of sample selection criteria, the intended sample has to be an MSME in manufacturing, trading or services. Survival or discontinuance of an MSME depends on how well it is meeting the outside obligation. A bank loan also makes the enterprise eligible for evaluation across various parameters like indebtedness, asset growth, conduct in repayment of obligation, and so on. Hence, one of the criteria kept was that the sample MSME should have availed a bank loan. Finally, 550 samples were surveyed with self-administered structured questionnaire. The data collection period was from 2018 to 2020. Out of this, responses were received from 435 respondents. However, 39 responses were either incomplete or valid response was not there. Hence, finally 396 valid responses were received which is 72% and considered good.
Identification of Motivation Variables
List of Items of Motivation.
Questionnaire Design and Reliability of the Instrument
The responses were obtained on a structured questionnaire. The questionnaire had three parts. Part A with 8 items measured demographic variables like name, age of business, educational qualification, experienced or new, and so on. Part B contained motivation items as given in Table 2. Part C measured Success level of the enterprise through 10 items. Out of this, 5 are financial items like revenue, profit, indebtedness, and sales/receivable realisations. Another 5 are non-financial subjective items like conduct of account, quality standard, brand building, level of customer satisfaction and self-satisfaction. Items are scored on Likert Scale of 1 to 5. Success Parameters had total peak score of 50. Enterprises which scored 25 and above are grouped as successful enterprise and those who scored below 25 are group as not-so-successful.
Reliability of the instrument was evaluated using the Cronbach’s Alpha (α) in SPSS. The alpha value measures internal consistency of the instruments by computing average of all possible spilt-half reliabilities for multiple item scale. Alpha value ranges between 0 and 1. Value between 0.70 and above is considered good reliability, value between 0.60 to 0.70 is called fair reliability and below 0.60, it is called poor reliability (Zikmund et al., 2017). Taking all 10 items in Part B, alpha value was low at 0.519. However, after excluding one item MF2—Motivation from Peers and Relatives and MF5—No Options, the Alpha value improved to 0.703 indicating good reliability and validity of the instrument. Both MF2 and MF5 were studied independently along with remaining. The 10 items of Part C measuring Success has alpha value of 0.970 which indicate very good reliability.
Data Analysis, Testing of Hypothesis and Discussion of Results
Relationship Between the Motivation and Enterprise Success
In order to understand co-relation between entrepreneur’s motivation and enterprise success, following hypothesis were tested with the help of Spearman’s rank co-relation.
Hypothesis:
Scores of all motivation variables and success variables respondent wise are added respectively to arrive at overall motivation score and success score. Spearman’s rank co-relation test is conducted with N = 396, alpha = 0.05 and 95% confidence.
Spearman’s Rank Correlations ‘Motivation and Enterprise Success’.
Is There Any Difference Between Successful Enterprises and Not-so-successful Ones in Terms of Entrepreneurial Motivation?
While the previous test confirmed significant co-relation between Motivation and Enterprise Success, it is important to understand if motivation is similar across all enterprises or there is any difference between the two groups. To find this, following hypothesis are tested with the help of independent Sample t-Test.
Hypothesis:
Motivation scores of each items are grouped together to arrive at total motivation score of a respondent. The t-test goes with assumption of homoscedasticity meaning that the two samples are drawn from normal distribution and variances between them are approximately same. This is established through the ‘Levene’s Test of Equality of Variances’, which should not be significant.
Levene’s Test for equality of variance is not significant, p = .946 > (α) 0.05, hence, assumption of homoscedasticity is met.
Group Statistics.
Independent Samples Test (Motivation).
Since, the test is significant (p < .05) we reject the null hypothesis and conclude, there is significant difference between the successful and not-so-successful ones in terms of Motivation.
To understand the extent of difference, Cohen’s D score on effect size was calculated. It is arrived at by calculating the mean difference between two groups, and then dividing the result by the pooled standard deviation Cohen’s d = (M2 – M1) ⁄ SD pooled, where, SDpooled = √((SD12 + SD22) ⁄ 2).
Cohen’s d score calculated on above gives d = 0.813 > 0.8 and suggests a large effect size (Score up to 0.02 is small, 0.05 is Medium and 0 > 0.8 is large).
From the given test, it is established that there is significant and large difference between the successful entrepreneurs and not-so-successful ones in terms of motivation. Successful group with mean = 33.10 compared to mean of 29.78 for not-so-successful further confirms that successful ones are strongly motivated than the not-successful ones. Since there is strong relationship between motivation and enterprise success and motivation influences actions, decisions, choices and pursuits (Bernard et al., 2005), it can be concluded that better motivation may support higher enterprise success.
In the subsequent discussions, further analysis on individual items of motivation is done to see their influence on enterprise success. However, in practical scenario in SME space, it is observed that entrepreneurs draw motivations from his desire for earning, by observing successful friends and relatives and most importantly from the family business orientation. During the interactions with MSME entrepreneurs and Bankers it has come up that second and third generation of a business family finds strong motivation from the elders in the family which also provides a strong platform for further growth and better business success. This is in line with the findings of the given test.
Identifying the Motivation Factors
While, variables in the motivation parameter are found to be significantly co-related with enterprise success, it is yet to be known if each of them influences independently or they measure certain underlying constructs. Exploratory Factor Analysis (EFA) was conducted to identify latent constructs within motivation variables. EFA searches for the structure among the set of variables in a situation when the researcher is uncertain about how many dimension (factor) could be there (Zikmund et al., 2017).
To justify the Factor Analysis, Keiser-Meyer-Olkin (KMO) measure of sampling adequacy (Kaiser, 1970; Kaiser, 1974) and Bartlett’s test of Sphericity (Bartlett, 1954) was perused. To establish factors, Principal Component Analysis and component matrix were used. A Principal Component Analysis is a process in which a set of possibly co-related variables are processed and converted into a set of un-correlated variables, which are called Component or Factor (Kothari & Garg, 2017).
To obtain factor loading, orthogonal rotation with Varimax option and Kaiser Normalization was accepted. The Orthogonal rotation satisfies two conditions: (a) It extract factors or component in such a way that factors are un-correlated with each other; and (b) The Principal Components are extracted in an order such that the first component explains the highest variance, the second component has next highest variance and so on (Kothari & Garg, 2017).
KMO and Bartlett’s Test (Motivation).
Total Variance Explained (Motivation).
The Rotated Component Matrix
Rotated Component Matrix (Motivation Variables).
However, two items, Peers Influence and No Option, are positively loaded whereas Family business orientation is negatively loaded. During the survey it was observed, entrepreneurs are influenced by either of them. Those who had a family business, largest source of motivation were their families. But for new business owners and 1st generation entrepreneurs, family was not an influence. They looked up to their friends and peers. Therefore, if family orientation was high, the other two were low and vice versa. Hence, even though they are loaded on one factor, they went in opposite directions. This was further validated in cluster analysis as below.
Pictorial Presentation of Factors.
Cluster Analysis: Enterprise Profiling in Terms of Motivation Sources
Cluster Analysis in Terms of Motivation Variable.
Distribution Across Clusters.
Cluster-1 represented a group of 222 enterprises out of which 170 (76%) were successful and 52 (24%) were not successful. This group displayed high mean score across four variables—Family Business Orientation, Social Respect, High Satisfaction and Personal Freedom. They belonged to Inspiration and Ambition Factor. However, 24% unsuccessful enterprises in Cluster-1 shows, merely having these motivation may not lead to success though it reduces the chance of being unsuccessful.
Cluster-2 consisted of 174 enterprises out of which 137 nos (79%) were failed and only 37 nos (21%) were successful. Members of this clusters scored higher than global mean in only in three items; MF2: Peer Influence, MF7: Higher standard of living and MF8: Higher Income. The first belonged to inspiration and other two belonged to need oriented motivation. High presence of these three items tends to suggest that these group of entrepreneurs, without assessing their own capabilities and market dynamics, became tempted towards the success of their peers and jumped to imitate their business success. This inclination was fuelled by their strong need orientation of earning higher income and better standard of living. High failure rates in the cluster shows that merely having desire for higher income or getting strongly influenced by peers’ success may not lead to success.
A notable thing in Table 9 is, ‘MF7—Higher Standard of Living’ and ‘MF8—Desire for higher income’ are strongly present in both the clusters. Both of them are Need Oriented Motivation.
This appears to indicate that the need of higher income and better standard of living are basic in nature and universal to all. Hence, they may be necessary condition for success but may not be sufficient condition for success.
Regression Analysis: Assessing Predictive Validity of Motivation on Enterprise Success
Model Summary. Regression Output from Motivation Variables.
Coefficients.
Model Summary. Regression Output from Motivation Factors.
Coefficients.
In the first model, with motivation variables as predictor and enterprise success as outcome, the R2 value was 0.479 which suggested that they could explain close to 48% of the enterprise success. High F value with significant F (p < .000) also reconfirms the effectiveness of regression model.
The coefficient table (Table 12) shows that out of 10 variables, eight of them were significant (p < .05). Two variables, MF7—Desire for higher standard of living and MF8—Desire for higher income were not significant. Both these variables themselves could not explain enterprise success significantly. This finding goes in line with the findings of cluster analysis and factor analysis. As seen above, 79% of enterprises in Cluster-2 were unsuccessful in spite of the fact that all of them scored higher for these two variables (MF7—Better Standard of living & MF8—Higher Income). In factor analysis, Need factor came as the lowest component.
Thus, regression finding further validates our earlier finding that Higher Income and Standard of Living may be a necessary condition but it is not a sufficient condition to lead to success.
In MSME space, this finding is also visible as a practical situation. During the survey of unsuccessful enterprises, we found, most of them discontinued their business and abandoned because they found an alternate source of livelihood in the form of a secured job. A vast majority of first time business owner, with intense desire for quick income, compromised on business values and resorted into illegal trades, adulteration, tax manipulations etc. which led to legal hassles and business suffered. Behind the intense desire for higher income lied insincerity and lack of seriousness towards the business. Crave for higher standard of living also proved to be the major source of fund diversion from the business to other unrelated activities. No sooner than the business shaped up and revenue was just starting to pick up, some of the owners were getting distracted and started pulling out investment in the form of profit withdrawal or booking non business expenses like buying expensive cars, real estates, properties or spending heavily on lavish lifestyle. In those cases business suffered and failed.
In this model, Beta of some of the individual items are negative. However, individually a single item’s contribution is low. A meaningful analysis can be made if their combined influence is analysed by regressing the motivation factors on enterprise success, which is as below.
Regression Analysis of Factor Scores
Regression analysis of factors score, as given in Tables 13 and 14, also conforms similar findings as that of the previous regression model. The model is significant, p = .000. In Table 14, Beta value of two factors ‘Need’ and ‘Inspiration’ is negative. Need is the least contributor and on its own, it is unlikely to lead to success. This has been established in Factor analysis, Cluster Analysis and previous regression model.
Percentage Wise Distribution of Responses Between Family Business Orientation and Peer Influence.
Discussion and Analysis
From the foregoing statistical tests and analysis of various aspects of motivation and enterprise success, following are the major findings:
Entrepreneur’s motivation has strong positive co-relation with enterprise success.
In terms of entrepreneurial motivations, there is significant and large difference between the successful enterprises and not-successful ones. With higher mean score, successful enterprises appeared to be better motivated than not successful ones.
Various items of motivation are measured in three distinct constructs. The basic one is Need Oriented motivation, the next one is Inspiration oriented motivation and the highest one is Ambition oriented motivation.
Need representing desire for higher income and better standard of living is the most basic in nature and universal to both successful and not successful ones.
Need may be a necessary condition to success but it does not form a sufficient condition. Both the successful and not-so-successful entrepreneurs displayed high desire for Need. But the successful ones, in addition to Need, also excelled in Inspiration and Ambition oriented motivations. The not-so-successful ones lacked in inspiration and ambition. Hence, Need combined with Inspiration and Ambition may lead to better success.
Considering that Need being universal in nature, it is important to both the groups. It is also a continuing one for all time. Even the highest successful enterprise also possess strong desire for Need like higher income and better living.
Thus, the three Factors of Motivation can be presented as a progressive stairs of motivation, as given in Figure 2, from Need to Ambition. Kenrick et al. (2010) stated, in hierarchical arrangement of need and motivation, some need takes precedence over other. When one lower need is completely addressed it goes to the next higher need. Progressive stairs also suggests as one basic Need is fulfilled entrepreneurs look for higher end motivation. However, the continuity in the stairs shows that even if one graduates to the second or third higher level of motivation, the desire for Need remains intact. That is why, even the highly successful entrepreneur does not forgo his desire for better income and better standard of living.
Progressive Stairs of Motivation.
These findings are also corroborated by two case studies from the sample considered for this research (names are changed to maintain confidentiality). Both the units were into automobile dealership. While one was run by third generation entrepreneur the other was started by a first generation entrepreneur.
Case 1.
M/s Subimal Auto
It is one of the leading auto dealers of Maruti Suzuki passenger car in North East having presence in various cities and state capitals. They happened to be the oldest automobile dealers. The first Maruti showroom was inaugurated in 1980s just a few years after Maruti launched its passenger car in India. For last four decades the business has run successfully. Now the third generation has joined business after completing education in engineering and management. On discussion during survey, it was revealed that upcoming generation are informally taught various aspects business in the family right from childhood days. Over the period, they observe family members operating the business and generating handsome surplus out of it. The business success of family elders is a constant motivation to younger generations to stay attached to family business, inherit and carry the legacy. This accumulated wealth also served as an assurance and a ready platform to go bigger scale. Profit and higher income continue to remain their core reason for business. However, successive generations focussed on higher goals like larger market shares, stronger brand, higher market reputation, better customer loyalty and higher social respects and goodwill. The given business enterprise continues to remain a successful enterprise.
Profit remains the underlying objectives but other motives are leading the growth.
Case 2.
M/s K. M. Automotives
This firm was promoted by one of the first generation entrepreneur after his engineering study. It started with a vehicle workshop and auto parts shop. Gradually, it grew into an automobile dealership of Force Motors. Since, 2015 onwards Force Motors is successful in India with wide demand for its successful public career model Travellers and small passenger vehicle Trax. The movement from an auto parts shop to an auto dealership was backed by strong desire for higher income, better standard of living and inspiration from friends and peers who seemed successful in similar business. He aspired to replicate similar success to his. However, the new business had its own dynamics and intricacies. As per the dealership obligations, the dealer has to maintain a minimum level of inventory of vehicles and lift assured number of new vehicles from Force Motors. This involved substantial working capital. With low own capital, he depended on bank borrowings. With limited market share and intense competition, often there was idle inventory. Under intense pressure to dispose of vehicles quickly it resorted to more and more credit sales. Debtors’ level increased and working capital further got stuck. With slow realisation from debtors, market borrowing and bank borrowing kept increasing. Cash generated from existing business fell short for serving the existing loan interest and principals. There being no prior family business orientation, the entrepreneur had little support from family. Gradually he started defaulting to the principal, bank and market. Ultimately business failed.
Only motive was higher income with limited other supports, which led to business failure.
Both the cases support the findings that motivation plays a significant role in entrepreneurial decisions. Basic motivation of need is inadequate to lead to long-term success.
Conclusion
The study provides adequate insights into the relationships between entrepreneurial motivations and enterprise success. It has also several implications.
The key implication is to the new entrepreneurs. Before initiating a business venture, he/she needs to reflect which motives are driving their actions. Proper identification of right motives will help formulating and implementing right strategy for success. Our studies shows, motivations beyond the Need will bring better sincerity and seriousness to business, which is critical for long term enterprise success.
The study has important implications to financial institutions like Banks who regularly evaluate business proposals of enterprises for extending loans. As on date, these evaluation processes are highly tilted towards financial analysis only. The study underscores that a holistic evaluation is incomplete without evaluation of intent and motives of the entrepreneur. Right motivations bring seriousness and deeper involvement in various aspects of business development . Some financial institutions like Axis Bank, ICICI Bank, HDFC Bank and Bandhan Bank have already started looking into evaluation of motives of the entrepreneurs. In their evaluation process, personal discussions (PD) with entrepreneur forms a mandatory requirement before giving a loan. They now spent considerable time in PD with entrepreneurs to understand his/her intent, motives, future plans and his seriousness and involvement in the business. This exercise should receive more attention in the lending process
It has also implications to academic research. While building curriculum, pedagogy and course contents for learners and trainees, importance for Need, Inspiration and Motivation should be made part of learning exercise. This can help the business graduate/learners to identify right motives in them and pursue it. From research perspective, scope can be made wider by adding more variables and more dimensions of enterprise success.
Limitations and Direction for Future Research
Like any other studies, it has also certain limitations. The study viewed success only through one parameter, that is, entrepreneurial motivation. However, Enterprise Success is a multidimensional phenomenon. Hence, it is impacted by several other parameters in addition to motivation. It is also uncertain whether motivation is contributing to enterprise success directly or through mediation of some other parameters. Thus decomposition of the contribution will give a better idea of its impact. A broader geographical area with bigger samples may further increase to the generalizability of the findings. The study was based on primary survey data. Availability of secondary data and published financial information is low in SME. A combination of primary and secondary data could provide better insights. Future research works may address them. Nonetheless, the overall study has established that entrepreneurial motivations have strong bearing on enterprise success.
