Investigating the relationship between the level of entrepreneurship of the board of directors of cooperative companies and the level of profitability of the companies (case study: Isfahan city cooperative companies)

Dissertation for Master degree  (M.A)

Commercial Management - Marketing Orientation

Summer 2011

Abstract

According to the ever-increasing speed of changes and competition in the economic world, managers must have different capabilities in order to free their organization from the vortex of problems. One of these capabilities is their individual entrepreneurship. In fact, entrepreneurial managers can use their characteristics to find solutions to their problems and pave the way for advancing the organization's goals by making important and challenging decisions. The main purpose of this research is to examine the factors of individual entrepreneurship among the members of the board of directors and their impact on the profitability of the company according to the return on equity index.

The present research is practical according to the descriptive-survey method and the type of research based on the objective. The predictor variables of the research include balanced risk tolerance, internal locus of control, need for success, intellectual fluency, pragmatism, ambiguity tolerance, dreaming, and challenge-seeking, and the criterion variable is the return on equity. The statistical population of the research is the members of the board of directors of an active cooperative company in the city of Isfahan, and sampling was done using a random method. The data collection tool is a standardized questionnaire by Kurdnanij et al., consisting of 95 questions, using the   Cronbach's alpha reliability was determined to be 0.782. Kolmogorov-Smirnov test, Pearson's correlation coefficient, linear regression, one-sample t and analysis of variance were used for statistical analysis. The results of the research showed that among the 8 factors of individual entrepreneurship, the factors of internal control center, need for success, pragmatism, dreaming and seeking challenges have a significant relationship with increasing the return on equity. Using the single sample t-test, it was determined that at the 95% confidence level, all dimensions of entrepreneurship except the ambiguity tolerance dimension in the statistical population have an average above the average among the managers. Also, according to the results of the analysis of variance, the society has a significant difference among its members in terms of gender and education level in the dimension of seeking success and based on age in the dimension of ambiguity tolerance. Also, based on work experience, no significant difference was observed in any of the dimensions of entrepreneurship.

Key words: individual entrepreneurship, return on equity, cooperative company

Chapter 1

Research overview

1-1- Introduction

Today, entrepreneurship is the main driving force in economic development and one of the characteristics of a healthy economy (Drucker [1], 1995). Currently, entrepreneurship is the most effective way to communicate between science and the market (Faiz Bakhsh, 2014). Entrepreneurship is one of the most efficient methods of changing operations and management style, during which, moving from the operation of "Chairman" It becomes entrepreneurial attitude, culture and management. Entrepreneurial managers play a very important role in economic change and growth. However, bureaucrats cause economic stagnation and organizational decline; This issue is a universal and common reality (Maqimi, 2014).

In general, managers to  As the most important factors of industrial organizations, they have four main roles: production role, management role, consolidation role, entrepreneurial role. The role of entrepreneurship is mentioned as the engine of economic development. Entrepreneurship is actually the main factor of creating creativity and innovation. Most developed countries are transitioning from an administrative or bureaucratic state to an entrepreneurial state. Research shows that entrepreneurs play a key role, especially in creating small and medium-sized economic units that lead to high employment generation (Ahmedpour Dariani, 2016). Also, many experiences from developed countries show that a huge part of the achievements of economic development was due to the development of entrepreneurship, especially through the creation of small businesses with a group and cooperative nature (Ministry of Cooperatives, 2014).

Today's cooperative organizations need managers who are willing to challenge the existing norms and it is not acceptable for them to do things in the usual way. These managers must be people who accept responsibility for their actions.In fact, entrepreneurial managers of cooperatives react to environmental unrest and uncertainty and try to create a strong strategic position, even though they are temporary in nature; They also create environmental uncertainty in other organizations with their proactive initiatives and create new opportunities by changing and improving the existing situation. They seek new opportunities earlier than their competitors and are observant and vigilant against potential threats (Maqimi, 2014).

1-2- Description and expression of the research problem

It is not a long time that the words entrepreneur and entrepreneurship are repeated in different media and everyone uses it according to their taste to managers, successful people, capitalists, etc. attributes Although each of these people may be an entrepreneur, none of them are perfect examples of this concept. Who is an entrepreneur?

An entrepreneur is someone who undertakes to organize the risks of an economic activity (Ahmedpour Dariani, 2016). In the middle of the 20th century, the theory of the innovative entrepreneur was founded by Schumpeter[2], according to this theory:

"The task of the entrepreneur is to modify and transform the pattern of production by exploiting an invention or, more generally, an untested technical possibility to produce a new product, opening up new resources to access materials or a new market for products by reorganizing a new industry." (Hizerk and Peters[3], 2002, 120).

Entrepreneurship is a personality trait, and this personality trait, along with pragmatism, team spirit, and environmental facilities, creates a measurable behavioral factor called the level of entrepreneurship, and al-Qaida, when several entrepreneurs (according to the law of seven-person cooperatives) establish a cooperative company together, it is expected that the company's growth and product production and profit in that company will be high.

In this research, by measuring eight personality traits (Kordnaich et al., 2016) for the members of the board of directors of cooperative companies, they found out their level of entrepreneurship and for the entire board of directors, an entrepreneurship level was extracted and it will be used as a predictor variable. Measured with different factors. Profitability ratios deal with the overall evaluation of the company's performance and profitability. Among the profitability ratios, we can mention the return on investment and return on equity. Return on equity has been used as a criterion variable. Therefore, in this research, an attempt has been made to examine the level of entrepreneurship and profitability of each of the cooperative companies in the city of Isfahan, and finally, the correlation between these two variables has been tested. 1-3- Necessity and importance of the research. Development is trying to encourage and guide as many people as possible who have entrepreneurial characteristics to education in the direction of entrepreneurship and entrepreneurial activities with the maximum facilities and exploitation of research achievements. In the current situation of our country's economy, which is facing important problems and inadequacies such as brain drain, unemployment or underwork, especially among university graduates and specialized manpower, reduction of government investment, lack of mobility and sufficient economic growth, nurturing and training entrepreneurs is of double importance. One of the actions that managers and entrepreneurial planners should take to increase the ability to take risks and, as a result, improve the economic power of individuals and society, is to encourage people to enter cooperative companies, especially production and knowledge-based ones, which can help university graduates to implement and operationalize the theories they have in mind, and can also provide sustainable employment for the country's young generation, which is the main concern of the country. It seems to create suitable opportunities for small and medium businesses throughout the country. This sector has been placed in a position that can play an essential role in creating jobs and providing self-sufficiency platforms in the country through training and entrepreneurial skills, and on the other hand, entrepreneur cooperatives are more of a network structure and instead of vertical processes, horizontal processes run in it. With the reduction of hierarchies and removal of boundaries, relationships are formed more based on participation and mutual understanding. Therefore, employees gradually learn how to cooperate and participate in equal positions and lead this cooperation to a win-win situation.