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Validity and Reliability of the Social Entrepreneurial Personality

Radin Siti Aishah Radin A Rahman, Zaidatol Akmaliah Lope Pihie,


Faculty of Educational Studies, Universiti Putra Malaysia, Serdang, Selangor, Malaysia
radin.upm@gmail.com
zalp@upm.edu.my

Abstract: Apart from business entrepreneurs, social entrepreneurs have the ability to significantly
mobilise economic development mechanism in many third world countries and sustain the living of
those who are marginalized. Most researchers discovered mutual traits between both business
entrepreneurs and social entrepreneurs (Martin & Osberg, 2007: 37; Ernst, 2012: 60). The gap
between the fixed goals from solely reaping maximum profit to being socially oriented has become the
measuring tool in research dynamic traits possessed by these social entrepreneurs. Hence, this
research seeks to determine the validity and reliability of social entrepreneurial personality among 784
Enactus students in 31 public and private institutions of higher learning in Malaysia. Enactus conducts
social entrepreneurial activities through community development projects in each of Malaysia’s higher
institution of education. Hence, the combination between entrepreneurial orientation and prosocial
results in social entrepreneurial personality (Ernst, 2012: 56) that is predominantly based on the
theory of planned behaviour (Ajzen, 1991: 182). Prosocial oriented personality is understood as being
conscientious and benefitting others. It encompasses the elements of empathy and social
responsibility. Instead, personality that is based on entrepreneurship combines the stable
entrepreneurial traits including pro-activeness, risk-taking propensity, and innovativeness.
Confirmatory factor analysis (CFA) was used to assess unidimensionality, validity, reliability and
fitness of social entrepreneurial model. The personality item reached the Cronbach’s alpha value
greater than 0.70 for the reliability of two sub-constructs. This item also obtained a consistent and
good internal validity, which was convergent and discriminant validity. The goodness-of-fit was
achieved with high construct validity. The findings have important implications for the new
development of social entrepreneurial personality instrument.

Keywords: Pro-activeness, risk-taking propensity, innovativeness, empathy, Malaysia, Enactus.

1. Introduction

Generally, the role of personality in the entrepreneurial process has been much discussed by
previous researchers including Krueger, Reilly and Carsrud, (2000: 412) and Bird (1998: 445). There
are diversity and inconsistency when it comes to personality study in entrepreneurship theory
(Cromie, 2000: 7). Personality traits can motivate someone to become a successful entrepreneur
(Ernst, 2012: 54). Much research on personality are based on the Big Five personality dimensions
that contribute in different effect on the dimension of business entrepreneurship (Frank, Lueger &
Korunka, 2007: 227; Schmidt, Kihm & Robie, 2000: 153) and social entrepreneurship (Prieto, 2011:
77-80; Nga & Shamuganathan, 2010: 274-275).

Business entrepreneurs set the goal of profitability, whereas social entrepreneurs are focused on
addressing specific social problems. Due to the differences of these goals, the combination of
personality and personality-oriented social entrepreneurship can shape the identity of social
entrepreneur.

Business goal of profitability gap and social orientation have prompted a survey study been which
was carried out to determine matching personality traits. These personality traits considered students’
perception based on their experience in the activity of rebuilding marginalized community. The
researcher had selected a group of students who have been the members of Enactus club as the
subject of this study across all Malaysian higher education institutions (HEIs).

Enactus (Entrepreneurial.act.us) is an international non-profit organization that brings together


student, academic and business leaders who are committed to using the power of entrepreneurial
action to improve the quality life and standard of living for people in need (Enactus Malaysia
Foundation, 2014). The club conducts marginalized community development projects and
environmental projects based on entrepreneurship by HEIs students in Malaysia since 2000. Now, the
population of Enactus has increased to 2,643 in 36 HEIs. Each year, competitions at both national
and international levels have been organized to evaluate high impact projects. In order to determine
the social entrepreneurial personality, the researcher had selected Enactus students based on their
experience in the community activities.

2. Research Objective

The purpose of this study is to examine social entrepreneurial personality instrument. More
specifically, the research objective is to test the reliability and construct validity of the social
entrepreneurial personality instrument among Enactus students in Malaysia. Confirmatory factor
analysis (CFA) tests the priori null hypothesis (Ho1) that there is no relationship between the social
entrepreneurial personality model and the data of two sub-constructs, namely entrepreneurial
orientation and prosocial orientation.

3. Social Entrepreneurial Personality

Literature has determined that there is lack of studies involving social entrepreneurial personality
(Spruijt, 2012: 2). Simms and Robinson (2005: 6) suggested that social entrepreneurs have two
personality dimensions among business and activist entrepreneurs. Additionally, based on the initial
survey by Ernst (2011: 204), the social entrepreneurial personality was measured by combining the
entrepreneurial and prosocial orientation traits. The personality is exhibited by a person’s behaviour.
The behaviour of a person who wants to become a social entrepreneur is also influenced by the
attitude and environment. Experience in community development projects by Enactus students will
affect their determination to become social entrepreneurs. A social entrepreneur will have the
business like thinking and actions of entrepreneurs, but they are different in their deep commitment to
a social cause (Ernst, 2012: 56). Therefore, the attitude and social norm elements in planned
behaviour theory (Ajzen, 1991: 182) affect the character of Enactus students as social entrepreneurs.
The initial selection of entrepreneurial and prosocial-oriented traits are made with regard to the often
of these traits appearing in the literature (Ernst, 2012: 60).

3.1 Entrepreneurial Orientation (EO)

Ernst (2012: 56) has identified the risk-taking propensity, innovativeness, needs for achievement,
need for independence and pro-activeness as the personality elements of social entrepreneurship.
Social entrepreneur is described as those who are proactive (Mort, Weerawardena, and Carnegie,
2003: 76-80). Meanwhile, Peredo and McLean (2006: 64) narrowed this proactive trait as taking the
advantage of opportunities in the surrounding. The tendency to take risks is defined by a high degree
of uncertainty (Ernst, 2012: 57). The kind of personality is commonly used in entrepreneurship
research. Dees (1998) confirmed that social entrepreneurs act boldly in facing challenges. Social
entrepreneurs also have continuous innovativeness (Peredo & McLean, 2006: 64; Mort et al., 2003:
76; Leadbeater, 1997: 8) as proven by Dees (1998: 4). Therefore, pro-activeness, risk-taking
propensity and innovativeness traits are included in this study as part of the entrepreneurial
personality for social entrepreneurs.

3.2 Prosocial Orientation (PO)

Prosocial personality consists of changing one's behaviour to act in a way benefiting others more than
oneself. These traits make a person acts when they see other people’s hardship (Penner, Dovodio,
Piliavin & Schroeder, 2005: 14.10-14.11). Empathy is part of personality (Stueber, 2008 in Nga &
Shamuganathan, 2010: 255) with a fundamental element of prosocial personality. These constructs
are derived from social psychology and described the ability of a person to put themselves in place of
others. The constructs are typically divided into affective and cognitive empathy. Affective empathy
means the real compassion emotion towards others. Meanwhile, cognitive empathy is the ability to
see other person's emotional state. Mair and Noboa (2006: 11) have observed that empathy supports
the development of the determination of social entrepreneurship. Meanwhile, the awareness of social
responsibility is a trait that causes a sense of responsibility to help those in need. This aspect
indicates that the person does a job voluntarily. Hustinx, Handy, Cnaan, Brudney, Pessi and
Yamauchi (2010: 350-351) found that the main motivation to help is because it is necessary to help
others. Thus, empathy and social responsibility are part of the prosocial personality (Table 1).
Table 1: Social Entrepreneurial Personality Dimension

Entrepreneurial Orientation Prosocial Orientation


 Pro-activeness  Empathy
 Risk-taking  Social responsibility
 Innovativeness

4. Structural Equation Modelling

Structural equation modelling (SEM) is a validation technique for analyzing data that is increasingly
gaining the attention of researchers (Hair, Black, Babin, Anderson & Tatham, 2010: 627). SEM is
implemented in two stages; the development measurement model and structural model. SEM
technique is also effective to test the validity of theoretical construct, to test hypotheses on
correlational and causal relationship, to test hypothesis on correlational and causal relationship, and
to conduct confirmatory factor analysis (CFA). In the context of this study, SEM technique was used
to test elements of attitudes and social norms in the theory of planned behaviour (Ajzen, 1991: 182) in
order to associate the personality variables with the social entrepreneurial personality, which was
divided into entrepreneurial orientations sub-construct and social orientations. The initial stage of the
measurement model requires the researcher to perform CFA (Hair et al., 2010: 694). CFA represents
the actual testing of hypotheses about structures underlying responses items on an instrument
(Froman, 2001: 8). Besides reducing the measurement error, CFA also functions by obtaining the
construct’s instrument validity (social entrepreneurial personality) and fitness of a measurement
model.

At the same time, the evaluation of the measurement model considers the compliance value of
unidimensionality, validity and reliability that needs to be achieved. Unidimensionality assessment
should be implemented first before assessing validity and reliability. This study needs to achieve the
unidimensionality with the loading factor for each item exceeding 0.60 as the instruments in this study
were derived from established scales to achieved AVE. Validity is associated with the ability of an
instrument to measure construct through the evaluation of convergent validity, construct validity and
discriminant validity. The best convergent validity is achieved when all items in the model are
significant. It is determined by the weighting factor of ≥ 0.60 (Bagozzi & Yi, 1988: 82) or ideally > 0.70
(Hair et al., 2010: 709) and the value of average variance extracted (AVE) > 0.50 (Fornell & Larcker,
1981: 47). Construct validity is achieved when the fitness indices exceed the requirement of GFI>
0.90 (Bentler, 1990), CFI> 0.90 (Bentler, 1990), RMSEA < 0:08 (Brown & Cudeck, 1993: 143) and
Chi-square or CMIN / df <5.0 (Marsh & Hocevar, 1985: 575). Meanwhile, the discriminant validity is
achieved when the value of AVE > r2, which is the comparison of AVE for two factors with squared of
the correlation (Fornell & Larcker, 1981: 47; Hair et al., 2010: 695). Reliability is a measure of how
reliable is the measurement model to measure the proposed latent construct. There are three
assessments required, namely internal reliability, construct reliability and AVE. Internal reliability is
achieved when the value of Cronbach's alpha> 0.70, good internal consistency when the value of
construct reliability> 0.70. AVE value ≥ 0.50 is required for an item in the construct.

Compatibility index (goodness of fit) is required to analyse the model and measurement functions to
match the survey data. Three criteria are required, which are the absolute fit (Chisq, RMSEA and
GFI), incremental fit (AGFI, CFI, TLI, and NFI) and parsimonious fit (CMIN / df). Three fit indexes from
each category are sufficient to determine good fit. This study used all indexes as the main
requirement for verifying the measurement model. Next, empirical analysis was performed to
determine the relationship between sub-construct namely, entrepreneurial orientation and prosocial
among Enactus students in Malaysia.

5. Research Methodology

The study aimed to examine the validity and reliability of the instrument. Respondents were selected
using proportionate stratified sampling encompassing 784 Enactus students that were categorized
according to educational status (students and alumni) throughout Malaysia. Permission to conduct
this survey was obtained from the Ministry of Education and Malaysia Enactus Foundation. The
Enactus presidents and faculty advisors from 31 universities at Malaysian higher education
institutions (HEIs) were contacted to fix the date of data collection with their members. Data were
collected by the researcher from each university. The same procedure was used for alumni Enactus
to fill up the form especially during the National Competition Enactus Malaysia Cup 2014 which was
held on May 2014.

The data were analysed based on Structural Equation Modelling (SEM) using AMOS software
(version 21). For this personality study, the questionnaire consisted of 27 items in two sub-constructs,
but after the analysis was conducted, only 9 items remained. Items measurement was based on a 5
point Likert scale, which are; 5 indicates 'strongly agree', 4 indicates 'agree', 3 indicates ’moderately
agree', 2 indicates 'disagree', and 1 indicates 'strongly disagree'. The questionnaire items were
adapted from Pro-activeness Personality Scale (Bateman & Crant, 1993: 112), Entrepreneurial Self-
assessment Scale (Koh, 1996), Individual Innovativeness Scale (Hurt, Joseph & Cook, 1977),
Empathy Quotient (Wakabayashi, Baron-Cohen, Wheelwright, Goldenfeld, Delaney, Fine, Smith &
Weil, 2006: 938), and Social Responsibility Scale (Berkowitz & Lutterman, 1968: 174-175).

6. Research Findings

Confirmatory factor analysis (CFA) using SEM technique is to measure the hypothesized model and
revised model on social entrepreneurial personality item. Specifically, hypothesized model shown the
model did not have a good fit. Nevertheless, after a few subsequent revisions, the model fitted and
rejected the null hypothesis. A total of 27 items were measured for validity and reliability of each sub-
construct personality (entrepreneurial orientation and prosocial). Table 2 shows the territory items
after remove.

Table 2: Result of unidimensionality procedure

Number of items Number of items Standard


Sub-construct Items Mean
before remove after remove deviation
Entrepreneurial 17 5 EO2 3.72 0.772
orientation EO3 3.83 0.812
(EO) EO5 3.81 0.792
EO6 3.75 0.755
EO15 3.71 0.718
Prosocial orientation 10 4 PO18 3.66 0.823
(PO) PO19 3.70 0.802
PO20 3.76 0.791
PO21 3.76 0.797

The unidimensionality was achieved, with the loading factor of more than 0.60 (Table 3). The lowest
loading items need to be removed one item at a time. The second step in this measurement model is
to evaluate the convergent validity, construct validity and discriminant validity. The results showed the
value of AVE was equal and more than 0.50 (EO=0.498, PO=0.544) and composite reliability was
more than 0.70 (EO=0.8263, PO=0.8270). Thus, the social entrepreneurial personality instruments for
9 items had good convergent validity, reliable, as well as internal consistency.

Table 3: Results of CFA for the measurement model

Convergent validity
Internal reliability
Construct Item Factor loading CRa AVEb
Cronbach alpha
(>0.70) (>0.60) (>0.70) (≥ 0.5)
Entrepreneurial orientation
EO2 0.729
(5 items)
EO3 0.824 0.727 0.8263 0.500
EO5 0.676 (0.498)
EO6 0.724
EO15 0.634
Prosocial orientation PO18 0.712
(4 items) PO19 0.826 0.765 0.8270 0.544
PO20 0.726
PO21 0.745
Note:
All t-values are significant at 0.001 level.
a
Composite reliability = (square of the summation of the factor loadings)/{(square of the summation of the factor loadings) +
(square of the summation of the error variances)}
b
Average variance extracted = (summation of the square of the factor loadings)/{(summation of the square of the factor
loadings) + (summation of the error variances)}

This study had achieved the fitness indexes level in terms of construct validity compliance. Construct
measurement of social entrepreneurial personality was obtained. The required criteria include the
value of GFI (0.967)> 0.9, CFI (0.966)> 0.9, RMSEA (0.067) <0.08 and the ratio of Chi-square/df
(4.548) <5.0. Discriminant validity was implemented to ensure that there was no redundant item in the
measurement model. Discriminant validity is confirmed when AVE value is more than r² (AVE> r²).
Table 4 shows that the value of AVE was greater than r² for entrepreneurial orientation 0.498 (0.500)
and prosocial orientation (0.545). This indicated that the social entrepreneurial personality instrument
had good discriminant validity. Besides, no multicollinearity existed because two latent exogenous
constructs which were correlated with r=0.64 were less than 0.85 (Figure 1).

Table 4: Discriminant validity of the construct

Construct EO PO
(1) Entrepreneurial orientation (EO) 0.500 (0.498)
(2) Prosocial orientation (PO) 0.410 0.545
Note: Diagonals represent the square root of the average variance
extracted, while the other entries represent the squared Correlations
2
Coefficients (r ).

To check the suitability (fit) of the measurement model, the analysis depended on the fitness index
and literature support that were referred to. Seven fitness index criteria should be fulfilled as shown in
Table 5. Finally, social entrepreneurial personality consisted of two sub-constructs with 9 items,
namely entrepreneurial orientation and prosocial orientation.

Table 5: Index Fit and Acceptance Level Criteria

Fit Index Current Acceptable Threshold Authors


Fit Levels
Indices
CMIN 118.236 Report if number of Tabachnik & Fidell
samples (2013)
are more than 100-200
CMIN/DF 4.548 < 5.0 Marsh & Hocevar
Report if the number of (1985: 575)
samples > 200
GFI 0.967 > 0.9 Bentler (1990)
(Goodness of fit index)
NFI 0.957 > 0.9 Chau (1997)
(Normed fit index)
CFI 0.966 > 0.9 Bentler (1990)
(comparative of Fit Index)
TLI (Tucker-Lewis Index) 0.952 > 0.9 Bentler & Bonett
(1980)
RMSEA (the root mean square error 0.067 < 0.08 Brown & Cudeck
of approximation) (1993: 143)

Figure 1 shows the results of the two-factor measurement model of social entrepreneurial personality.
Again, all fit indices types to be employed and acceptable by recommended values with GFI (0.967),
CFI (0.966), NFI (0.957), TLI (0.952) were more than 0.90, and RMSEA (0.067) was less than 0.08.
The chi-square of goodness-of-fit indexes value obtained was 118.236. However, the revised model
may be considered when it passed all the criteria values and indicated that the model fit the data.

Figure 1: Measurement model for entrepreneurial orientation and prosocial orientation

The inter-factor correlation was r=0.64, which substantiate the research hypothesis that the two sub-
constructs were distinct. Relationship exist between two sub-construct and could use in a structural
model of social entrepreneurial personality for further analysis. The loading range was between 0.63
and 0.77. The result above was achieved after considering the modification index (MI). The construct
validity for social entrepreneurial personality was supported. As a final result, only 9 items personality
fit the model and accomplished the psychometric value, especially the entrepreneurial personality
index on becoming a social entrepreneur among the young generation.

7. Discussion

The findings revealed that the personality item was characteristically unidimensional as social
entrepreneurial personality items were measured. Factor analysis showed that the 9 items were
loaded into two dimensions of social entrepreneurial personality after forced extraction. All the items
were very well fitted (more than 0.60).

Convergent validity had shown quite high weighting factor for two sub-constructs for personality
orientation are (higher than 0.60), but AVE value for entrepreneurial orientation was equalled to 0.50
compared to prosocial orientation (higher than 0.50), and CR value for each sub-construct was more
than 0.70, as all the evidences supported and met the level recommended by Hair et al., (2010: 709-
710).

This proved that the fit model formed the pro-activeness, risk-taking and innovativeness to measure
the dimension on entrepreneurial orientation. Meanwhile, empathy item measured the dimension of
prosocial orientation. The findings were paralleled to Hair et al., (2010: 661) with the sample size
exceeded 350, then the items required weighting factor of at least 0.5 or more than 0.70 to determine
the significance level at 0.05, which determined the strength of the correlation item of latent variable in
a CFA analysis.

Meanwhile, it was also found that the AVE for discriminant validity exceeded r² and met the criteria set
as recommended by Fornell and Larcker (1981: 47). All sub-constructs showed high construct validity
as the model showed good fit with all the criteria, namely RMSEA < 0:08 (Byrne, 2010: 80), CMIN / df
< 5.0 (Bentler, 1990), and CFI, NFI and GFI > 0.9 (Schumacker & Lomax, 2010; Chau, 1997) which
are acceptable to determine the validity of the constructs.

The finding confirmed that social entrepreneurial personality was shaped by entrepreneurial
orientation and prosocial orientation in each of the Enactus students (Figure 1). The findings also
verified that five items which represented pro-activeness, risk-taking propensity and innovativeness
traits contributed to the formation of entrepreneurial orientation. Meanwhile, only 4 prosocial items
represented by empathy trait contributed to the formation of prosocial orientation. The researcher did
not include this social responsibility as it did not achieve unidimensionality condition, in which the
value of factor loading of the item was less than <0.6. The finding was in contrast to the previous
studies by Ernst (2011: 204-206; 2012: 58-60), as prosocial orientation was characterized by a
combination of empathy and social responsibility among students in Germany. Similarly, a study by
Noorseha, Yap, Dewi & Abdul Rashid (2013: 264) finds that it is difficult to nurture empathy in
Malaysian students. Therefore, empathy items represented the dimensions of prosocial orientation,
and it was found to match the measurement model. This study had provided useful baseline
information on social entrepreneurial personality for future studies in this area.

8. Conclusion

The CFA was used to test the construct validity of social entrepreneurial personality items. The aim of
this test was to determine the convergent validity, and it was found that the factor loading value was
greater than 0.5, AVE was greater than 0.50 and CR was greater than 0.70. Meanwhile, the testing
for discriminant validity also found that the AVE was greater than r² (square of correlation between
two factors) and fulfilled all the proposed conditions. The analysis using CFA for personality items fit
to the data based on the fit index. This suggested that the personality orientation was described by
the two sub-constructs; entrepreneurial and prosocial orientations. A total of 9 items showed good
convergent validity and discriminant validity (good internal consistency). Social entrepreneurial
personality instrument was adopted to measure the level of personality among Enactus’ students in
Malaysia, where this study contributed strong evidence to support the validity of the instrument.

The social entrepreneurial personality items congruity in the measurement model can provide the
guidance for the existing entrepreneurial education curriculum policy maker in HEIs. They can use the
element of personality to develop an understanding of the process of sustainable social
entrepreneurship. In addition, this instrument is a reliable tool to determine personality traits of social
entrepreneurial education. Students are also able to develop the potential of social entrepreneurial
personality profile based on academic background. This study helps educators to develop curriculum
and instructional approaches to inculcate students to become social entrepreneurs. Social
entrepreneurial organization can use this instrument during the screening process of selecting team
members.
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