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International Journal of Business Management & Research (IJBMR) ISSN 2249-6920 Vol. 3, Issue 3, Aug 2013, 1-8 © TJPRC Pvt. Ltd.

THE IMPACT OF EMOTIONAL INTELLIGENCE ON THE GROWTH OF ENTREPRENEURSHIP NUZHATH KHATOON Assistant Professor, Padala Rama Reddi College of Commerce and Management, Hyderabad, Andhra Pradesh, India

ABSTRACT Emotional Intelligence improves an individual’s social effectiveness which is considered as one of the important element of the success of an entrepreneurship. Higher the emotional intelligence the better social network, which in turns lead to better business relations. The objectives of the study was, to find out the level of emotional intelligence of the entrepreneurs and the difference between the group, gender and age and to find out the percentage of growth of the entrepreneurs and how emotional intelligence has an impact on its growth. The sample for the study consisted of 50 entrepreneurs which are selected randomly from different locations of Hyderabad. These samples again sorted out based on the monthly turnover above Rs. 100,000.The study states that there is no significant difference between the scores of emotional intelligence regarding gender and age. It also states that there is a significant difference between the scores of emotional intelligence and growth percentage of the entrepreneurs. So, emotional intelligence has a greater impact on the growth of enterprises.

KEYWORDS: Emotional Intelligence, Entrepreneurial Performance INTRODUCTION Emotional Intelligence improves an individual’s social effectiveness which is considered as one of the important element of the success of an entrepreneurship. Higher the emotional intelligence the better social network, which in turns lead to better business relations. If emotional intelligence is high individuals can enhance their abilities to accurately recognize emotions Own and others), to put emotions for better use (Maximize their own performance and in various tasks) and to manage them effectively (intimate relationships, in problem solving, decision making, expressing appropriate, controlling emotions) [Grewal, Brackett & Salovey 2006]

REVIEW OF LITERATURE The ability to employ emotional information to guide one’s personal behavior and thought was the foundation of emotional intelligence [Salovey & Mayer 1990]. The father of Intelligence Quotient (IQ) test [E.L. Thondike1920], observed that intellectual abilities are bound in social setting and interactions. He distinguished social intelligence from other forms of intelligence. [Thorndike & Stein 1937] identified three different areas of social intelligence: 

An individual attitude towards society

A level of social knowledge

An individual’s degree of social adjustments

Each social intelligence area suggests skill beyond one’s IQ. Since, the IQ test, research and testing in the area of intelligence primarily focused on cognition.


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The concept of emotional intelligence emerged from the work of [Gardner 1980], theory states that the brain consist of multiple intelligence. Gardner theorized that human possess seven different intelligences, one of those intelligence was Personal intelligence. Personal intelligence is based on two aspects: intrapersonal intelligence and interpersonal intelligence. Intrapersonal intelligence pertains to an ability to know and access one’s feeling about life, range of emotions, discriminate emotions and to draw upon into emotions to guide behavior. Interpersonal intelligence pertains to one’s ability to work with others by accurately interpreting their emotions and using one’s own emotions to relate in effective relationships. Gardner’s theory of multiple intelligence, laid the foundation for the exploration of emotional intelligence. In [1998] Reuvan Bar-on coined the term emotional quotient (EQ) in his doctorial dissertation and identified EQ as a measurement of emotional intelligence. Bar-on acknowledges Gardner’s personal intelligence and developed an emotional intelligence model to measure emotional quotient (EQ). Br-on developed a self reporting instrument titled the Emotional Quotient Inventory (EQi) to measure EQ. Bar-on [2006] first defined social and emotional intelligence as “an array of emotional, personal and social abilities that affects one’s overall ability to cope effectively with daily demands and pressure; this ability is apparently based on the core capacity to be aware of understanding, control and express effectively” [373-374]. Table 1: Bar-on Model of Emotional Intelligence Bar-on Model of Emotional Intelligence EQ-360[2003] Self and other Reporting Components Sub Components Self regard Emotional self awareness Intrapersonal Assertiveness Independence Self actualization Empathy Interpersonal Social responsibility Interpersonal relationship Reality testing Adaptability Flexibility Problem solving Stress tolerance Stress Management Impulse Control Optimism General Mood Components Happiness Mayer, Salovey & Caruso [2002] recognized that social intelligence and emotional intelligence share the common components of reasoning about emotions in social interactions. [Mayer & Salovey 1997] identified three criteria to assess intelligence: 

Intelligence could be operationalized as a set of abilities.

Abilities should be inter-correlated and related to pre-existing intelligence

Abilities should develop with age and experience. From these three criteria [ Mayer, Caruso& Salovey 1999] developed the Multifactor Emotional Intelligence

Scale(MEIS) from MEIS [Mayer, Salovey & Caruso 2002 developed the Mayer-Salovey-Caruso Emotional Intelligence Test ( MSCEIT) and later MSCEIT V2-0 was modified[Mayer et al, 2003].


The Impact of Emotional Intelligence on the Growth of Entrepreneurship

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Table 2: MSCEIT Version 2.0 Scale MSCEIT V2.0[2003] Self Reporting Identifying emotions in faces, music and stories Relating emotions to other mental sensations such as Emotional Facilitation of thought taste and color Solving emotional problems, knowing which are Emotional Understanding similar or opposite and what relations they convey Understanding the implication of social acts on Emotional Management emotions, regulating emotion in self and others Emotional Perception

Expanding on the emotional intelligence research of Bar-on and Mayer, Salovey and Caruso, [Daniel Goleman 1995] viewed emotional intelligence as measurable emotional competencies. Goleman argued that one’s emotional intelligence could be evaluated by demonstrated emotional competence that emotional competence served as an antecedent to one’s performance. [Goleman1998] described emotional competence as “a learned capability based on emotional intelligence those results in outstanding performance at work”. Using the emotional competence frame of emotional intelligence, [Boyatzis& Goleman, in collaboration with Hay McBer Company 1999] developed the Emotional Competency Inventory which was later re-conceptualized as the Emotional & Social Competency Inventory (ESCI). ESCI incorporate twelve competencies with four domains. ESCI consist of seventy two survey questions using Likert Scale that ranges from (1-Never, 2-Rarely, 3-Sometimes, 4- Often, 5-Consistently) Table 3: Emotional & Social Competence Inventory (ESCI) ESCI (2007) Self and 360 Reporting Components Sub-Components Self Awareness Emotional self-awareness Achievement Orientation Adaptability Self Management Emotional Self-control Positive outlook Empathy Social Awareness Organizational Awareness Conflict Management Coach & Mentor Relationship Management Influence Inspirational Leadership Teamwork Attempt has been made to apply the concept of emotional intelligence to entrepreneurship [Rhee & White 2007] emotional quotient or the ability to appraise, regulate and use emotions for self and with others has been associated with leadership and workplace success [ Dulewiez & Higgs, 2000; Goleman 1998].[Cross and Travegliane 2003]found high level of overall emotional intelligence among a set of high profile entrepreneurs. They also note high scores on each of the subscales of the leading emotional quotient moods with score on the regulation of emotions sub-scale being the highest. [Akgun & Co workers, 2008] provide the evidence that the ability of early stage business to perceive, understand, track and utilize their members, emotions in its operations was positively associated with various measure of business performance, with their impact moderated by the level of environmental dynamism. Strong feeling of confidence are closely related to the positive behavior i.e. the tendency to experience such feelings and moods often confer benefits in many situation[ Fredrickson(1998, 2001], he briefly mentioned that positive affects expands the scope of individuals attentions, cognition


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and action. These three areas assists an individual in building a wide array of personal resources, both intellectually (Knowledge and intellectual complexity) and psychologically (enhanced resilience, optimism and creativity), which again contribute to their performance (Problem solving, decision making)[Fredrickson , Tugade, Waugh & Larkin 2003].

RESEARCH METHODOLOGY The research design of the study was correlation study between emotional intelligence and entrepreneurial activity, emotional intelligence & growth and educational background &emotional intelligence.

OBJECTIVES OF THE STUDY 

To find out the level of emotional intelligence of the entrepreneurs and the difference between the group, gender and age.

To find out the percentage of growth of the entrepreneurs and how emotional intelligence has an impact on its growth.

Sample The sample for the study consisted of 50 entrepreneurs which are selected randomly from different locations of Hyderabad. These samples again sorted out based on the monthly turnover above Rs. 100,000. Tools Scale of emotional intelligence developed and standardized by MSCEIT (The framework used for the assessment of Emotional Intelligence Based on Daniel Goleman’s Emotional Intelligence framework) was used. Emotional Intelligence test allows identifying the different competencies of Goleman model as it is developed based on behavioral indicators of his book “The practice of Emotional Intelligence”. Closed ended questionnaire was designed for the purpose of gathering information about the entrepreneurial activities, educational background and monthly and yearly turnover of the business for the past 5 years. Procedure Scale of emotional intelligence was administered to the entrepreneurs and the data collected was analyzed with the help of suitable statistical techniques manually and by using SPSS and EXCEL. Table 4 states the scores of emotional intelligence components and its sub components of the entrepreneurs, who are running their business since more than 5 years. The score shows that many of the entrepreneurs are scoring more points in self motivation, personal competence and self regulation. Table 4: Emotional Intelligence Scores of the Entrepreneurs

EI Components Personal Competence

Self Regulation

Self Motivation

Sub Components Emotional Self Awareness Self Assessment Self Confidence Emotional Self Control Trustworthiness Conscientiousness Adaptability Innovation Achievement

Scores 194 162 217 160 222 187 189 214 214

Average Score 191

194

211


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The Impact of Emotional Intelligence on the Growth of Entrepreneurship

Table 4 – Contd., Commitment Initiatives Optimism Social Competence Empathy Service Orientation Developing others Political Awareness Tolerance Influence Communication Leadership Change Management Conflict Management Building Bonds Collaboration &Cooperation Team Capabilities

1. Social Awareness

2. Social Skills

225 202 203 151 175 175 174 150 140 219 211 160 175 193 175 178

165

181

Table 5: Paired Sample Test of EI Score with Age

Pair 1

Total EI Score Age

Paired Samples Statistics Mean N Std. Deviation 91.3800 50 3.81132 35.28 50 5.707

Std. Error Mean .53900 .807

Table 6: Paired Sample Test of Total EI Score with Age of the Respondents Paired Samples Test Paired Differences 95% Confidence Interval of the Std. Std. Error Difference Deviation Mean Lower Upper

Mean Total EI Score Age

56.10000

7.17208

1.01429

54.06172

58.13828

t

df

Sig. (2Tailed)

55.310

49

.000

Table 7: Correlation of EI Score with age Correlations

Total EI Score

Age

Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N

Total EI Score 1 50 -.100 .491 50

Age -.100 .491 50 1 50

Table 8: ANOVA Test of EI Score and Age ANOVA Sum of Squares df Mean Square Regression 4.311 2 2.155 Residual 45.689 47 .972 Total 50.000 49 Dependent Variable: Total Emotional intelligence Score Predictors: Age

F 2.217

Sig. .120


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Nuzhath Khatoon

Table 5and 6 gives the detail information about the emotional intelligence mean and standard deviation with that of age and table 7 states that there is negative correlation between emotional intelligence and the age of the respondents, which indicates that the individual emotional intelligence is not at all concerned with the age of an individual. In table 8 “One way ANOVA” showed that means emotional intelligence differed significantly with age (F=2.2; d.f.=2,47; p=0.12) . Table 6: Descriptive Analysis of EI Score with Gender

Male Female Total

N

Mean

Std. Deviation

37 13 50

92.4595 88.3077 91.3800

3.09654 4.09033 3.81132

Descriptive Total EI Score 95% Confidence Interval for Mean Std. Error Lower Upper Bound Bound .50907 91.4270 93.4919 1.13445 85.8359 90.7795 .53900 90.2968 92.4632

Minimum

Maximum

87.00 83.00 83.00

98.00 97.00 98.00

Table 7: ANOVA Test of EI Score and Gender

Between Groups Within Groups Total

ANOVA Total EI Score Sum of Squares df Mean Square 165.822 1 165.822 545.958 48 11.374 711.780 49

F 14.579

Sig. .000

Table 8: Correlation between EI Score and Gender Correlations Total EI Score Pearson Correlation 1 Total EI Score Sig. (2-tailed) N 50 Pearson Correlation -.483** Sex Sig. (2-tailed) .000 N 50 **. Correlation is significant at the 0.01 level (2-tailed)

Sex -.483** .000 50 1 50

Table 9 and 10 shows the mean and standard deviation values of male and female in study and “One way ANOVA” showed that means emotional intelligence differed significantly with sex (F=14.57; d. f. =1, 48; p=0.001) .table 11 states the negative correlation between emotional intelligence with that of gender, that means there is no difference in the emotional intelligence of male and female. Table 9: Correlation between EI Score and Monthly Turnover Correlations Total EI Score Pearson Correlation 1 Total EI Score Sig. (2-tailed) N 50 Pearson Correlation .748** Monthly turnover Sig. (2-tailed) .000 N 50 **. Correlation is significant at the 0.01 level (2-tailed)

Monthly Turnover .748** .000 50 1 50


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The Impact of Emotional Intelligence on the Growth of Entrepreneurship

Table 12 shows that a moderate correlation exists between the emotional intelligence of the entrepreneurs and the monthly turnover i.e. +.748 which indicates correlation coefficients have positive values that means as the emotional intelligence increases the monthly or yearly turnover of the entrepreneurs increases. Table 10: Descriptive Analysis of Emotional Intelligence and Growth Percentage of the Entrepreneurs Descriptive Statistics Mean Std. Deviation Total EI Score 91.3800 3.81132 Growth Percentage 117.20 12.102

N 50 50

Table 11: Correlation between EI Score and Growth Percentage of the Entrepreneurs Correlations Total EI Score 1

Pearson Correlation Sig. (2-tailed) N 50 Pearson Correlation .594** Growth Percentage Sig. (2-tailed) .000 N 50 **. Correlation is significant at the 0.01 level (2-tailed). Total EI Score

Growth Percentage .594** .000 50 1 50

Table 12 states the means and standard deviation of the growth percentage of these entrepreneurs and table13 shows that there is a positive correlation i.e.( +.574) between emotional intelligence of the entrepreneur and the growth percentage of his/her business, which with emotional intelligence the growth of the enterprise also increases.

CONCLUSIONS Emotional Intelligence improves an individual’s social effectiveness which is considered as one of the important element of the success of an entrepreneurship. Higher the emotional intelligence the better social network, which in turns lead to better business relations. The importance of emotional intelligence has clearly demonstrated that it has the greatest effect on the performance of an individuals. In conclusion result of the study states that there is no significant difference between the scores of emotional intelligence regarding gender and age. The study indicates that is a significant difference between the scores of emotional intelligence and growth percentage of the entrepreneurs. So, emotional intelligence has a greater impact on the growth of enterprises.

REFERENCES 1.

Argun, A.E.H,Kesin & J.Byrne (2008). “The moderating role of environmental dynamism between firm emotional capability and performance”; Journal of organizational change Management 21: 230-252

2.

Bar On R (1999b) “The Emotional Quotient Inventory (EQ.i)”: Technical Manual; Toronto, Multi health System

3.

Bar On R (2000b) “Emotional and Social Intelligence”; The Handbook of Emotional Intelligence San Francisco; Jossey Bass

4.

Bar On. R (1988) “The development of an operational concept of psychology well-being”; unpublished doctoral dissertation, Rhodes University, South Africa

5.

Boyatzia R.E, Goleman & Hay group (1999) “The Emotional Competence Inventory” Boston Hay Group


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Nuzhath Khatoon

6.

Boyatzis (2001) “How and why individuals are able to develop emotional intelligence” in C. Chernis and D. Goleman (eds). The emotional intelligent workplace- San Francisco Jossey Bass; 209-233

7.

Cross B and A. Traveglione (2003) The untold story: “Is the entrepreneur of the 21st Century defined by Emotional Intelligence”; International Journal of Organizational Analysis. 11. 221-228

8.

Dulewiez V. & M.Higgs (2000) “Emotional Intelligence: a review and evaluation study”; Journal of Managerial Psychology, 15. 341-372

9.

Goleman D (1995) “Emotional Intelligence” New York Bantam Books

10. Goleman D (1998b) “Working with Emotional Intelligence” New York, Bantam Books 11. Goleman D. (1998) “Working with Emotional Intelligence”; London, Bloomsburry, publishing 12. Grewal D, Brackett M.A &Salovey (2006) “Emotional Skills as a protective factor for risky behavior among students” Unpublished manuscript 13. Mayer J.D.Salovey, P. Caruso, (2002) “Mayer-Salovey-Caruso Emotional Intelligence Test” (MSCEIT) TorontoMulti Health System 14. Rhee .K.S. & R.J White (2007) “The Emotional Intelligence of Entrepreneur”; Journal of Small Business and Entrepreneurship; 20; 409-426 15. Thorndike E.L. (1920) “Intelligence and its Uses”; Harper’s Magazine; 140, 227-335 16. Thorndike.R.L & Stern. S. (1937) “An Evaluation of the Attempts to measure social intelligence”; Psychology Bulletin-34; 275-284

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