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Business Communication ReportSubmitted To:
Mr. Sheikh Muhammad Irfan
Submitted By:
Muhammad Bilal Sohail - 14267
Muhammad Waqas Paracha - 14381
Anas Akhlaq - 14340
Muhammad Arsalan Khan - 14210
Dated: 15th December, 2012
[Why Do Business graduates in pakistan do not opt for doing their own business ]
LETTER OF ACKNOWLEDGEMENT
Date: 15th December 2012
Dear Readers:
We would first like to thank Allah the Almighty who has given us the opportunity; secondly we
are also thankful to our families for their support which enabled us to deliver this report.
We are also extremely thankful to our teacher “Mr. Irfan Sheikh” who provided us with such
opportunity to write a report on “Why do business graduates in Pakistan do not opt for doing
their own business?”.
We are also thankful to the students who gave us their feedback in conducting the research and
without them it could not have been possible. We will be looking forward for such assistance in
future as well.
Sincerely
Muhammad Bilal Sohail
Muhammad Waqas Paracha
Anas Akhlaq
Muhammad Arsalan Khan
MEMORANDUM OF TRANSMITTAL
Date: 15th December 2012
To: Mr. Irfan Sheikh
From: Muhammad Bilal Sohail
Muhammad Waqas Paracha
Anas Akhlaq
Muhammad Arsalan Khan
Subject:
Submission of our report entitled “Why do business graduates in Pakistan do not opt for doing
their own business? ” .
In Compliance with the deadline for submission of report on 10 th December 2012, here is the
term report on Entrepreneurship perspective of Pakistani business students.
The students of IOBM, IBA and SZABIST were served as our sample and we used
questionnaires for our research tool. This report briefly evaluates the perspective of business
school students no going towards the path of entrepreneurship. We evaluated the results based on
our survey and used them to test the hypotheses that we came up with.
During this report we have learned how to communicate with different people and how an
effective report can be prepared. It was a great learning experience for all of us.
We have made this report to find out the reasons due to which students do not opt for doing their
own business in Pakistan. Our report consists of 5 chapters on whole which are introduction,
literature review, methodology, analysis and conclusion.
We would like to thank all the students who have contributed in our report and passionately fill
the questionnaire. We are also thankful to our teacher Sir Sheikh Mohammad Irfan who has
given us this opportunity and supported us during the journey of preparing of this report.
To complete our research and reach an accurate conclusion, we have worked diligently so that
the findings and facts of the report remain unchanged. We hope that the readers find this report
very helpful and beneficial for their use. For any queries regarding the content of the report, feel
free to contact through email on [email protected].
Executive Summary:
Our objective was to analyze the main reasons why business students are not opting for their own
business in Pakistan. To do so we surveyed the leading business institutes of Karachi including
IoBM, IBA and SZABIST. Questionnaires distributed were designed in such a way that the
overall background of the student and his intellect for not opting for doing business was detected
in clear terms. All those factors were jolted down percentage wise and were analyzed separately
and finally the conclusions were drawn.
Top of the list was the current deteriorating political and economic situation in Pakistan. Recent
events related to the law and order situation in the country have deeply impacted the youth’s
mind creating a psychological barrier in taking risk of starting their own business. The global
economic condition has also created a great confusion in the minds of the students. Closure of
businesses and migration of businessmen to other countries has affected their minds negatively.
It is perceived by the youth that it is not the right time to put any investment or launch new
businesses.
The second widely acknowledged reason by business graduates for not starting their own
business is the lack of finance. Considering it in detail we came to conclusion that although
majority of the students comes from well off families, still many of them were not willing to take
risk because they perceive that the businesses are launched with a brand which requires a huge
investment, thus holding them back in spite of having the required capital.
We found out in our survey that a vast majority of students are not opting for business because
they are not properly groomed about entrepreneurship by the educational institutes. Our colleges
are creating quality managers rather than entrepreneurs, the course outline, perspective of
teaching and the environment is training the students such that once out of this institute these
students have to look for jobs rather than starting their own businesses. Although some
universities in Pakistan have recently started small programs to inculcate entrepreneurship
among students but it’s too early to decide if it would produce the required results.
Lack of exposure also played a role as it is quite understandable that universities are more
focused on theoretical business knowledge rather than preparing the students for the practical
business environment which forced students not to opt for business. Our findings indicate that
the students coming from job-oriented family background opted for doing jobs. Although there
were very few cases in which students with job oriented family background opted for doing
business. This shows that family also plays a vital role in encouraging business students for
doing their own business.
When we asked questions relating fear of failure as the reason for not starting business an
intermediate element came to light, since it was based on individuality, no one wants to show
weak points, it’s a contributor but not as common as the ones discussed previously.
Our findings also indicate that there are business graduates who like to remain in the comfort
zone, they believe that there are hardships in starting and running a business, these students
prefer doing tension free jobs and were satisfied with their monthly salary and don’t want to go
through interactive business process.
CONTENTS1. Introduction.........................................................................................................................................8
1.1 Background........................................................................................................................................8
1.2 Primary Research Question..............................................................................................................9
1.3 Other Research Questions...............................................................................................................9
1.4 Population........................................................................................................................................9
1.5 Sample.............................................................................................................................................9
1.6 Methodology.................................................................................................................................10
1.7 Scope.............................................................................................................................................10
1.8 Limitations.....................................................................................................................................10
1.9 Hypothesis.....................................................................................................................................10
1.10 Research Objectives.....................................................................................................................11
2. Literature Review..............................................................................................................................12
2.1 Fear of Failure..................................................................................................................................12
2.1.1 Introduction..............................................................................................................................12
2.1.2. Fear of failure..........................................................................................................................14
2.1.3 Reasons For Fear of Failure.......................................................................................................14
2.1.4 Indications of Fear of Failure....................................................................................................15
2.1.5 Fear of failure in Business.........................................................................................................16
2.1.6 Human nature: (Are you Ready to take risk?)...........................................................................17
2.1.7 Fear of being unable to tolerate the underlying emotions.......................................................17
2.1.8 Fear of making mistakes / Lack of Confidence..........................................................................18
2.1.9 Fearing Future market (uncertainties)......................................................................................18
2.1.10 Fearing Depression.................................................................................................................19
2.1.11 Fear of losing money...............................................................................................................20
2.1.12 Fear of losing reputation/ social status...................................................................................20
2.1.13 Fear of going astray................................................................................................................21
2.2 Lack of Exposure In business............................................................................................................21
2.3 Lack of Finance................................................................................................................................22
2.3.1 Lack of Start-Up Capital............................................................................................................22
2.3.2 Operating Costs........................................................................................................................23
2.3.3 Obtaining Financing Terms.......................................................................................................23
2.3.4 How Much Money Will Be Needed...........................................................................................23
2.4 Lack Of Encouragement By financial Institutions.............................................................................24
2.4.1 Role of Universities In Pakistan.................................................................................................25
2.4.2 Role of Institutes Around the World.........................................................................................27
2.5 Economic /Political uncertainty.......................................................................................................30
3. METHODOLOGY.................................................................................................................................32
3.1 Introduction.....................................................................................................................................32
3.2 Survey Tool......................................................................................................................................32
3.3 Scale................................................................................................................................................32
3.4 Target Population............................................................................................................................32
3.5 The Sample Size...............................................................................................................................32
4. Analysis..............................................................................................................................................33
4.1 Introduction.....................................................................................................................................33
4.2 Interpretation..................................................................................................................................33
5. Conclusion:........................................................................................................................................49
5.1 Recommendations...........................................................................................................................50
Appendix A................................................................................................................................................53
Survey Questionnaire............................................................................................................................53
Appendix B................................................................................................................................................54
Bibliography...........................................................................................................................................54
1. INTRODUCTION
1.1 BackgroundFinal year of graduation in a business student’s life is a year in which
student is planning to start making their resumes and send it in
multinational organizations or to start their own business.
Unfortunately, most of the students in Pakistan believe that
entrepreneurs are born, not made, which is a myth. Starting your own
business and turning it into a profitable enterprise is a fantastic way to
grow your wealth and build your life around the things you loves doing.
Starting a new business can be risky. For one thing, there are no
guarantees of success. Most of the time businesses fail every single
day, and entrepreneurs end up with nothing to show for months or
years of hard-fought effort. A student thinks about the idea of
sacrificing a steady salary for an uncertain, hoped-for payday also
tends to provoke anxiety.
As everyone is well aware of economic conditions of the country, many
entrepreneurs assume if the economy is in a lull, now must necessarily
be the wrong time to get started. This belief is reinforced by nay-
saying politicians and journalists who exaggerate even the very worst
economic news. Unlike a salaried job, business ownership provides no
immediate or guaranteed pay. By doing a job you know that whether
there is any outcome or not you will be paid at the end of month. At
9
the end of every month it is entirely legitimate to wonder if your
business will be capable of providing for you or your family.
We all love to hear stories of outrageous people who drag themselves
and made their fortune. Most business owners are regular people who
just want to work for themselves. Some are loud others are quiet,
some are good with money and others are good at selling they are all
entrepreneurs.
1.2 Primary Research Question Why do business graduates in Pakistan do not opt for doing their own
business?
1.3 Other Research Questions 1. Is fear of failure the reason why business graduates in Pakistan do
not go for doing their own business?
2. Is lack of exposure the reason why business graduates in Pakistan
do not go for doing their own business?
3. Is Lack of finance the reason why business graduates in Pakistan do
not go for doing their own business?
4. Is lack encouragement/motivation from educational institutions for
entrepreneurship the reason why business graduates in Pakistan do
not go for doing their own business?
5. Is political/economic instability the reason why business graduates
in Pakistan do not go for doing their own business?
10
1.4 PopulationOur target population is final year business students from IoBM, IBA
and SZABIST.
1.5 SampleWe have chosen to take 25 students from each of the universities
mentioned which means the total of 75 students are our sample.
1.6 MethodologyWe used questionnaires as an instrument and method of conducting
the research. Our questionnaire consists of twelve closed ended
questions and the result will be quantified and analyzed in tabular and
graphical form.
1.7 ScopeThis research will help us to know the main reason for which business
students in Pakistan do not opt for their own business. It will also help
educational institutes to make improvements in the educational
methods and techniques.
1.8 LimitationsThis research is done from the Business students of IoBM, IBA and
SZABIST. The response derived from this research is not the result of
all the business students in Pakistan. Students from these institutes
usually come from a particular socio-economic group which does not
cover students from all socio-economic groups.
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1.9 HypothesisPossible reasons may include:
1. Fear of unknown the reason why business graduates in Pakistan do
not go for doing their own business?
2. Lack of exposure the reason why business graduates in Pakistan do
not go for doing their own business?
3. Lack of finance the reason why business graduates in Pakistan do
not go for doing their own business?
4. Lack of proper platforms to encourage entrepreneurship the reason
why business graduates in Pakistan do not go for doing their own
business?
5. Political/economic instability the reason why business graduates in
Pakistan do not go for doing their own business?
1.10 Research ObjectivesObjective of our research is to find out that why do business graduates
in Pakistan do not opt for doing their own business?
12
2. LITERATURE REVIEW
2.1 Fear of Failure
2.1.1 Introduction
The ‘fear of failure’ is one of the biggest hindrance to success in a one’s life.
However, it is quite important to note that it’s not failure that leads one down,
rather it’s the fear of failure, the expectation of failure, just look in the past and
you realize that you have faced it a hundred times before, more than you can
count. Failure is an experience, an important one that teaches a person, not to fall
down, but to stand right up after one. If succumbed to it, it’ll destroy you and your
efforts will go in vain, the question is if you will let it do that, if you will hide
behind your fears, or man up brave enough to face them, know them, identify
them, analyze them and ultimately overcome them.
One faces failure in life, numerous times, it’s impossible to deny that. The ones,
who are well aware of it, live cautiously and stay low, eventually being engulfed
by it. Living in fear is like not living at all, being lifeless. The more interesting
fact is that it’s a matter of perspective how it appears to one.
Fear, as we take it, the end of the world, or how about just an excuse to our poor
state. However we can take it as a lesson, a learning experience, which it is as a
matter of fact. Failing teaches us the lesson we need to be taught, to not repeat the
mistakes that we make, to help us man up, grow up, and prevent such mistakes in
the future. Failures don’t stop us, it’s us who do.
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History is full of lessons. Great men rose from the pits of failure to ever shining
stars that illuminate the earth even now, as we speak. Some personalities are as
follows:
The idea of computer OS using graphics was rejected and scrapped but Bill gates
didn’t give hope, not only did he not face his fear, but he overcame them so
fiercely that he gave rise to a new company to prove he was right.
It is said that Thomas Edison failed 1000 times, but didn’t give up. His 1001th
try was the one in which he succeeded.
The renowned book-writer John Creasy was rejected more than 300 times after
which he finally got to publish his collection of over 500 hundred books.
Steve Jobs who was fired from his own company, returned to it 12 years later and
was the man who turned the company into what it is today, with outstanding
products that are being developed today even after he has passed.
Michael Jordan kept trying even after he was dropped out of the team.
We fall in life, stumble upon obstacles, and feel like all hope is lost, but we must
never give up. Imagine all those people, who are what they are today in this world,
successful, all of them had doors shut on their very faces, but they didn’t give up.
They stood up, fought it and faced it.
Failure teaches us what we couldn’t teach ourselves. Failure reveals your true-self to
you. Your inner strength, discover the truth about you and the ones around you, the
friends, the hidden motivation that drives you.
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2.1.2. Fear of failure
The fear of failure, you must have had it at least once in your life? Made you so
afraid that you didn’t even try what you desired? Or did you try to prevent a
greater failure, willing yet not fully exposed on the outer persona of yours?
Many of us have probably experienced this once or more in life. The fear can be
restraining to the mind – it halts us to take action, therefore retarding the progress
in life, stopping our steps forward, which might also cause the slipping of great
chances and opportunities from our grip.
2.1.3 Reasons For Fear of Failure
Fear of failure is when it stops us from taking actions to progress forward. We
have faced it in our life at some point at least. This behavior can be caused due to
a number of reasons.
For instance, one can be unfortunate to have unsupportive people in the
surroundings or ones who raised them. One who is raised without any exposure to
motivation will certainly be a closed and fearful person.
One can be like a perfectionist that wants nothing less than perfection on the first
attempt, failing at which seems like a dismal and insult and should not be allowed.
To succeed, we must be willing and able to fail. Weirdly, successful people may
be just as comfortable with failure because of their success.
They may have been exposed to perfectionism of others, harshly criticized by
relegating parents, teachers, friends, or colleagues, and they absorb it and later
emit similar behavior.
15
Failure to come to be seen as a statement about who they are as a person (rather
than what their approach to a particular trial was like).
They have been embarrassed by the actual or perceived failure and feel
traumatized by this to the extent that they are now afraid to try something new.
They may misunderstand confidence. The people who really do not fear are the
ones who know for sure they will be successful, those who know they are going to
handle the failure if it happens.
They may naively assume that success always happens without fail a lot along the
way (we've all seen the relative success of celebs, but we do not see the hidden
stories, such as knockbacks). They want success without risk or difficulty.
2.1.4 Indications of Fear of Failure
You might experience some of these symptoms if you have a fear of failure:
Reluctant to try new things or get involved in challenging projects.
Self-sabotage - for example, procrastination, excessive anxiety, or failure to
follow through with the goal.
Low self-esteem or self-confidence – Typically like "I'm not smart enough to get
a team that" or "I'll never be good enough to get that promotion.”
Perfectionism - A willingness to try only those things that you know you succeed
at.
You avoid doing something if you know you will not be able to do well
immediately.
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You can’t fail if you do not set goals, this thought stop you from setting goals.
You procrastinate on the things you really want to do because you do not believe
you can do it.
You live far below your potential.
You never step outside your comfort zone.
Your life seems simple and can get better, so why fix something that is not
broken?
You just try things you know you will be good at.
You sabotage yourself by procrastinating.
2.1.5 Fear of failure in Business
Statistics show that within the first four years about half of all small businesses
fail. With that in mind, many entrepreneurs have doubts about starting their own
business. Most of these failures occurring in the first year is the result of not
practicing smart business habits. If you honestly consider starting a business, it is
essential to identify the failure behavior in order to increase your own chances of
success.
There are several factors that can bring fear to any would-be entrepreneurs. Main
concern is the fear of failure and risk-taking, and frustration associated with this
failure or losing what you already have. It's scary to think that:
After all the effort, the business still failed
Loss of all savings
17
Loss of property due to loan mortgage.
Loss of time (years)
You learn that your idea is not a good one after all and never going to work
You end up with broken relationships due to failed business partnerships or
investments
You end up disappointing yourself, your family and friends
2.1.6 Human nature: (Are you Ready to take risk?)
Fear of failure is a kind of fear; it is an emotion of your subconscious mind to
protect you from trouble. Some people have got tolerant to the failure they
always suffer from fear of failure while others are not. The reason behind this
intolerance is usually one of the following factors:
Ask yourself these basic questions before starting a business of your own
Are you really ready to operate freely and be the one to make all decisions and
take all the responsibility?
Are you willing to work hard and make sacrifices involving commerce
commences?
Are you having the self-confidence and self-discipline that will allow you to
survive and build your new company to its glory?.
2.1.7 Fear of being unable to tolerate the underlying emotions
Some people are afraid to fail, not because of failure itself but because of the
induced emotions. These emotions can be a shame, guilt or any other emotion that
they experience. If you want to deal with fear of failure, You need to practice or
18
educate yourself to handle the emotions, tackling this issue might solve the whole
problem.
2.1.8 Fear of making mistakes / Lack of Confidence
Some people are afraid to make mistakes in front of others. If this is the case, then
your fear of failure may be caused by lack of self-confidence. This can be fixed
by building up self-confidence.
2.1.9 Fearing Future market (uncertainties)
In business, change in the environment is nothing new. In addition, changes create
opportunities, in which the firm manages to exploit the innovation and often
reinventing themselves. Entrepreneurial firms, however, is in the business of
creating themselves. In what is usually a very short window of opportunity,
enthusiastic founding team need to turn their financial assets, technology and
human resources to the organization that can deliver results. If they are to survive,
entrepreneurship initiation has to make their idea into a product and get products
to market. High-tech startup, in particular, entered the industry with a very short
technology and product life cycle where continuous innovation is a must. Thus,
when uncertainty hits, these entrepreneurs are engaged in a struggle that is quite
deep, both to establish their company and to survive.
Each new high technology joint struggle to answer the following questions: Will
our technology actually work as planned? Will It provide the desired benefits to
the consumer? Is time introduced too early or too late? Market would be big
enough and keep growing? Competitors will react with unexpected ways? Our
19
management team will have the skills to grow the company? Our investors will
stand behind the company?
2.1.10 Fearing Depression
It is quite easy to procrastinate if you're depressed or feeling sorry for yourself.
Build yourself up, reassure yourself of your strengths and capitalize on them.
You'll get more done when you believe you can do it. This is for those of you that
are or have suffered from depression – know that you’re not alone. There are
many more than you think that are suffering or have suffered too. Some
symptoms are:
Mood that is out of character
Increased irritability and frustration
Finding it hard to take minor personal criticisms
Spending less time with friends and family
Loss of interest in food, sex, exercise or other pleasurable activities
Being awake throughout the night
Increased alcohol and drug use
Staying home from work or school
Increased physical health complaints like fatigue or pain
Being reckless or taking unnecessary risks (e.g. driving fast or dangerously)
Slowing down of thoughts and actions.
2.1.11 Fear of losing money
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In my opinion the biggest fears that stop young entrepreneur is Bankruptcy. This
fear manifests itself in a person and if left unchecked can really destroy them and
their business. Many rich people have failed many times and to a great extent
much. Hardcore fear losing is what makes you keep doing it. Insecurity, failure,
losing everything, move back to the beginning included.
Investors fear the whole basis of their system, thought and style investing on the
negative thoughts or negative mental attitude
Really, the only 'right' time to act is when you are fully prepared, because that's
the only thing you can control. You cannot control the economy, or where it is
going next. Obstacles are not economic - it is himself.
Fear of losing money mask itself in all kinds of behavior, but mostly in
procrastination. We were so worried about making a mistake that we never
started. But there is something infinitely more soul-sapping from losing money if
you do not act - sorry.
Many investors fail in this world because they are afraid of losing money. Smart
people continue to fail at trading market for their emotions, not their intelligence
or their work ethic.
2.1.12 Fear of losing reputation/ social status
People can be such perfection that nothing less than perfection on the first attempt
seems like a dismal failure and insulting and should not be allowed. To succeed,
we must be willing and able to fail. Weirdly, successful people may be just as
comfortable with failure because of their success.
21
2.1.13 Fear of going astray
Fool yourself into thinking that nothing can go wrong and that everything will
turn out as you had planned it down to the last detail. Starting a business is all
about risk. As an entrepreneur, it is your responsibility to understand these risks
and find ways to overcome them. Risks sweep this under the carpet will not make
them disappear.
Think about the risks you face in jumpstarting your business. Ask "what ifs" and
start to look at the worst thing that can happen. Identify what the worst thing that
can happen if the business fails. Think through the worst things can help you get a
feel for the risks involved, and whether you can handle the risk if and when it
happens. Thinking about how you can overcome the worst case scenario.
Remember that there is always a way - you just have to find. Once you have been
dealing with the worst case scenario, then the process of starting a business to be
less intimidating.
2.2 Lack of Exposure In businessBusinesses operate in a varied way and all those trends can’t be visible without having a
good exposure to them. As an owner you are expected to have a good idea and exposure
about business and answer to all the questions regarding your business. Students find
business issues quite challenging but if they will acquire required knowledge from those
who have overcome these situations themselves will allow them to learn from their
experience.
Family background, one’s own urge for entrepreneurship and educational institutes
combined affect the thinking and exposure. Universities are more focused on business
22
knowledge based on theory rather than preparing students for practical business
environment that would force them to opt for entrepreneurship. In our analysis, we
concluded that the students who come from a background of family oriented towards
work choose to do the job. There are very few cases where students with employment-
oriented family background choose to do business. This suggests that family education
and orientation of other family members play an important role in encouraging business
students to run their own business.
2.3 Lack of FinanceLack of financial planning business beginning can have you out of business before you
open your door.
If you go into business for yourself or take the lead on new business start-up, ready to
experience the struggles and financial challenges that are unique to this scene. You may
feel that you have the best business idea and a great chance of accomplishment, but if you
are not aware of the challenges you will face, your business can not get a chance to be
successful.
2.3.1 Lack of Start-Up Capital
Businesses need financing to get off the ground - without it, businesses cannot
afford to hire employees, buy inventory or renting office space. Obtaining initial
funding might most difficult challenges new businesses face. Business owners
often explore savings, credit card or retirement funds to help pay for this critical
early stage. Investors and banks overseas are cautious to invest because of the
high failure rate among small businesses. Even if investors agree to invest funds,
it often is for a much lesser amount than requested. A business owner can spend
23
all his time trying to raise capital and if not successful, may not have the
opportunity to have an opening.
2.3.2 Operating Costs
New and established - All businesses have operating expenses. From electricity to
pay for marketing, the business owner can expect to have recurring financial
obligations. For new businesses, this cost can be irresistible, especially at first
when there may be small or no income coming in the door. In some cases, a new
start effort may be out of business before their marketing campaigns began to take
steps and produce customers. As a business owner, make sure you have a grasp on
not only your monthly recurring costs, but also on how much time it would take to
start generating sales to pay the bills.
2.3.3 Obtaining Financing Terms
Since new businesses have a high failure rate, vendors may hesitate to extend
credit terms. Well-known customers with good payment history can often defer
payment on the invoice for thirty or days. The terms of the bill maintain cash flow
and allow time for businesses to sell inventory and collect the results. New
business, however, often have to pay up front for these costs, leaving the start-up
with less available capital during the short term to invest in marketing programs.
2.3.4 How Much Money Will Be Needed
Service Provider or Product Development Business? Initially, the business
services will involve a reduced amount of cash because it will not have a high
material and equipment costs. If you plan to produce the product, you must
consider the type and sum of direct materials and equipment needed and expense.
24
Labor Cost? Do you plan to work yourself or you will hire employees to help
you? Contribute your own time for a business is one way to keep costs down.
Then, when your business is strong, you may want to hire an employee to take
more routine operations.
Investment? Investors want you to pay a portion of your money to the company.
This contribution of funds is called equity. There is no fixed percentage of the
capital contribution, but most lenders require at least 25 percent of the amount
required to start a business. Total capital required is also affected by other credit
factors, such as experience management, and the sufficiency of the security.
Personal Expenses? It is unusual that a company begins to show a profit in the
early years. You should plan to cover your living expenses for at least six months,
during your business started. If your business is already in operation, it may be
necessary to reduce your salary while you are trying to develop. Checking your
own funds means adjusted for personal expenses during this time, you have a cost
for which you require funding.
2.4 Lack Of Encouragement By financial InstitutionsThere are several universities in Pakistan, from which the number of
graduates pass out every year in all major disciplines of education. All
students perusing education they hope to get a good job in growing
the economy. Most students can get jobs of their choice and the
remaining students then think of other activities to get money. Other
activities can be a variety of business activities. The percentages of
these people are very low compared to those who give priority to paid
25
work / wage. The fundamental reason behind this is that our education
system which does not focus on the development of entrepreneurship.
A country's educational institutions contribute to entrepreneurship
both directly & indirectly. Entrepreneurial finding involves "re-mix" of
ideas and practices, entrepreneurship is influenced by education level
of the population and the diversity of their ideas can be entertaining.
Higher levels of general education make the most of the existing
population as entrepreneurs. Higher education institutions in particular
can put in more directly to entrepreneurship. Institutions in Pakistan
and other countries need to give confidence to students and
entrepreneurial approach instead of the current management
approach academics. Different universities around the world are
organizing seminars and making societies for this purpose.
2.4.1 Role of Universities In Pakistan
Role played by different Pakistani institutes towards entrepreneurship.
Institute of Business Administration (IBA)
Institute of business administration (IBA) started different societies by a group of
youthful, enthusiastic and would be entrepreneurs.
IBA Entrepreneurship Society (IBAES)
Its mission is to create opportunities and platforms stimulate and educate students
about entrepreneurship, ultimately providing them a launch pad to take off as
trained and prepared entrepreneurs.
26
Invent –The Entrepreneurial Challenge is a unique student
level business plan competition. It provides the participants to
come up with the idea relevant to the domains of
entrepreneurship. It is also an attempt to promote university and
industry linkage.
Institute of Business Management (IoBM)
IoBM Club For Entrepreneur (ICE) is the student society. ICE
is operated by the current students of IoBM and mission to
promote entrepreneurship in the IoBM students. ICE brings about
established entrepreneurs and potential entrepreneurs so that
students can become great entrepreneurs will come and help the
people who will come. ICE no doubt is a great way to network
with all the people who make it BIG.
ICE brings platform to let people know what '"Your Ideas". ICE believes in being
there for all IoBM students who have business intelligence and believe in giving
you the opportunity to become an entrepreneur. However at the same time ICE
realizes that being an entrepreneur is not only natural but in fact it is a quality that
can be learned and brings the opportunity for people to learn.
Shaheed Zulfiqar Ali Bhutto Institute of Science and Technology
(SZABIST)
27
SZABIST ENTREPRENEURIAL SOCIETY (SES) to provide
guidance and real entrepreneurial experience to emerging
entrepreneurs and assist them in setting up their businesses.
The objective is to provide real experience of entrepreneurship
and social environment through frequent market research and
entrepreneurial efforts
2.4.2 Role of Institutes Around the World
S.P Jain Institute of Management and Research providing
management education through academic businesses interface
and focus on the development of successful entrepreneurship
and family business programs. S.P Jain Institute of Management
and Research is collaborating with Institute of Business
Administration (IBA) to focus on different programs regarding
entrepreneurship.
Co-operative and Entrepreneurship Development
Institute, university Utara, Malaysia (CEDI) began
operations on 1 march 1990. Three years later on November
1993 it was upgraded to become an institution in conjunction
with development of entrepreneurial activities and needs of the
country. Its mission is to be pro-active and effective agents
support the government in developing entrepreneurs and
cooperatives. Its vision is to establish University Utara Malaysia
(UUM) as a main reference center in all aspects of 28
entrepreneurial development in Malaysia and worldwide. The
main objectives of CEDI are as the following:
To produce student entrepreneurs based on acquired
knowledge through student business programs known as
Siswaniaga.
To be a consultation and research center in entrepreneurship
and co-operatives.
To generate income to the university through consultations
and research programs.
To be an information center in entrepreneurship and co-
operative development.
To become a center of international relations and networks in
entrepreneurship and cooperative development.
Harvard Business School
About the history of fifty years of research and teaching in the
field of entrepreneurship, Harvard Business School allows
students to test their business ideas in a risk free
environment.
Students are free to follow their inspiration and imagination
while benefiting from in-depth collection of resources: faculty
29
advisor, access to technology and expertise of a variety of
their classmates
Entrepreneurial management is now part of the first-year
Required Curriculum, while over thirty faculty members teach
more than twenty courses offered in entrepreneurship in the
second-year Elective Curriculum.
Columbia University
The Eugene Lang Entrepreneurship Center at Columbia Business School
offers one of the most widespread and respected entrepreneurship
programs in the world.
The first emphasis is on the process of identifying, assessing and capturing
opportunities. These activities are essential in any organization, require the
use of business disciplines in a highly inclusive way.
The second is an emphasis on individual initiative in the context of
uncertainty and tight resources.
The Entrepreneurial Sounding Board provides opportunities for Columbia
MBA students and alumni to meet individually with faculty members and
practitioners affiliated with the Lang Center to discuss their
entrepreneurial ideas and potential business opportunities
Massachusetts Institute of Technology (MIT)
Establishment of MIT Entrepreneurship Center having mission to educate
& foster the leaders who can set up companies successful.
30
It launched Entrepreneurship Development program in 1999 & more than
1,400 students attend over 20 entrepreneurship courses each year.
Alumni of the program form a vibrant and dynamic worldwide support
network for the next generation of aspiring entrepreneurs.
University of Oxford
Oxford Centre for Entrepreneurship and Innovation brings together
innovations from around the world, from Silicon Valley and India, and
2,000 high-tech companies based around Oxford, which is part of the
innovation system focused on school.
Oxford is raising funds to build a new center - Oxford Centre for
Entrepreneurship and Innovation - which drew together academics and
practitioners, creating new knowledge to generate economic growth and
business knowledge to lead the new venture.
Oxford Business School is in a position that is truly unique to create new
knowledge in the field of entrepreneurship and innovation that support
knowledge base, creating leaders, and social and economic impact.
2.5 Economic /Political uncertaintyEconomic /Political uncertainty effects when starting your own business. If the economy
is in a lull, many entrepreneurs assume that now must be the wrong time to start. This
belief is reinforced by even saying politicians and journalists who amplify the very worst
economic news. Hard times are always a good time to start a new business.
31
It is obvious why it is wise to start in strong economic times. People have money and are
looking for ways to spend. But the launch in tough times or economic uncertainty can be
just as smart. If you do your homework, there may be a need to start your business.
Because many people are reluctant to launch in tough times, new business you have a
better chance of getting noticed. And, depending on your idea, in a sluggish economy
there is often equipment (or even the whole business!) for sale at low prices. Some
economists have jokingly defined a recession like this:
If your neighbor gets laid off, it is a recession. If you get laid off, it is depression.
Pakistan's economy has seen a consistent improvement over a period of ten years ago.
Although the populations of the country pose as a key challenge for economic growth,
Pakistan has managed to rake in a whopping growth rate of 8.45% annually. Political
instability in Pakistan has put militants in the tribal areas; violence in Karachi, one of the
largest cities in Pakistan, and the 2007 murder of former Prime Minister Benazir Bhutto.
Before the global economic downturn occurs, there is a large amount of investment in
Pakistan because it has a liberal investment policy. However, at present investment
scenario has changed drastically with Pakistan losing foreign attractions, as well as
domestic investors, due to the rising cost of doing business. There are several factors that
caused by any investors are hesitant to invest in Pakistan, the global recession to be one
of them. The main reasons consist of political instability, legal deteriorating and order
situation, high interest rates, and frequent power outages and gas. The recent increase in
power and gas tariffs is likely to put an additional burden on the country's industrial
sector and industry gross margin squeeze. Local manufacturers predict more job losses
over the next year.
32
Terrorism is another reason that caused huge losses to the industrial and commercial
sectors. Military attack militant stronghold northwest, which has responded with suicide
bombings in the cities and towns. Cost of doing business in Pakistan has increased due to
poor infrastructure. CNG and transport depends on oil; these two prices have been rising
recently to a higher level. Pakistan produces about 20 percent of its oil needs. But
because of failed efforts to find new reserves and luxury consumption, this percentage
seems to fall in the years to come.
33
3. METHODOLOGY
3.1 IntroductionWe used primary survey techniques to collect the data for our research; we also used
secondary techniques mainly for the literature review. Survey is a study of the opinions
of a group of people, based on a series of questions in form of a questionnaire. For our
research we distributed a total of 120 questionnaires among the final year students at
IoBM, IBA, SZABIST, thirty questionnaires respectively, out of which thirteen were
those who were already planning to start their business, and seven were those who had no
plan for their future. So, the data of total hundred students was selected for analysis. The
survey we conducted was self-administered, in which questionnaires were distributed to
different individuals. The questionnaires were filled by the population sample according
to their fondness.
3.2 Survey ToolFor this research we used a questionnaire as our survey tool which
includes 12 questions covering all the aspects of our research.
3.3 ScaleStrongly agree Agree Not sure Disagree Strongly disagree
3.4 Target PopulationThe target population for our research is last semester students of
BBA/MBA and MBA(executive) students from IoBM, IBA and SZABIST.
34
3.5 The Sample SizeSample size for this research is taken to be 100. Survey is carried from
students both male and female from all of the three universities.
35
4. ANALYSIS
4.1 IntroductionIn this chapter we will be analyzing the results derived from our
survey.
As defined earlier in methodology , 6 major reasons which were
possible barriers for business graduates for starting new ventures,
were transformed into questions , a couple of support questions were
added to validate those responses.
Following is the summary of responses in order of weightage, as given
by the students to the identified barriers:
Current Political/Economical situation of the country
Lack of capital
Lack of encouragement by institutes
Lack of exposure
Fear of failure in business
Don’t want to get out of the comfort zone
4.2 InterpretationFollowing is the list of questions that were used to have student’s
perspectives about the barriers in starting their own businesses.
In order to identify if Lack of exposure is the reason why business
graduates do not opt for doing their own business, question 2 and 12
were made part of the questionnaire, which are as follows:
36
37
Q 2 - I don’t plan to start my own business because I have no exposure to how actually business works
Q 12 - I might think of starting my own business only after gaining some good experience
and exposure
In order to identify if Lack of capital is the reason why business graduates do not opt for doing
their own business, question 4, 8 and 9 were made part of the questionnaire, which are as
follows:
Q 4- I can’t start my own business due to lack of capital
Q 8 - I am scared of starting my own business because I am not sure if I would be able to
attract the investment
Q 9 - I don’t have enough family support in terms of capital so I can’t start my business
In order to identify if “Lack of encouragement by institutes” is the reason why business
graduates do not opt for doing their own business, question 1 and 3 were made part of the
questionnaire, which are as follows:
Q 1 - I don’t plan to start my own business because I feel I still lack proper education
Q 3 - I am doing BBA/MBA to get a good job not to start my own business.
In order to identify if Fear of failure is the reason why business graduates do not opt for doing
their own business, question 5 and 6 were made part of the questionnaire, which are as follows:
38
Q 5 -I can’t start my own business because of lack of courage to take risk
Q 6- I have a fear if I start my business, it might not be a success
In order to identify if “Current political and economical situation” is the reason why business
graduates do not opt for doing their own business, question 10 and 11 were made part of the
questionnaire, which are as follows:
Q 10 - I don’t want to start my own business because of current law and order situation of
the Country
Q 11 - I don’t intend to start my own business because of current economic recession
In order to identify if “disturbance in comfort zone” is the reason why business graduates do not
opt for doing their own business, question 7 was made part of the questionnaire, which are as
follows:
Q 7 - I never thought to start my own business because I already got a very good job which
gives me financial stability
39
Following is the summary of responses to these questions in percentages:
Strongly
agree Agree
Not
sure
Disagre
e
Strongly
Disagree
1
I don’t plan to start my own business
because I feel I still lack proper
education 2 6 10 56 26
2
I don’t plan to start my own business
because I have no exposure to how
actually business works 12 41 16 18 13
3
I am doing BBA/MBA to get a good
job not to start my own business. 14 42 11 24 9
4
I can’t start my own business due to
lack of capital 31 38 5 14 12
5
I can’t start my own business because
of lack of courage to take risk 0 4 7 57 32
6
I have a fear if I start my business, it
might not be a success 13 23 34 19 11
7 I never thought to start my own
business because I already got a very
good job which gives me financial
18 32 2 28 20
40
stability
8
I am scared of starting my own
business because I am not sure if I
would be able to attract the investment 15 39 6 26 14
9
I don’t have enough family support in
terms of capital so I can’t start my
business 18 35 4 27 16
1
0
I don’t want to start my own business
because of current law and order
situation of the Country 74 12 2 7 5
1
1
I don’t intend to start my own business
because of current economic recession 54 14 4 19 9
1
2
I might think of starting my own
business only after gaining some good
experience and exposure 22 43 7 18 10
Q1. I don’t plan to start my own business because I feel I still lack proper education
41
Strongly Agree2% Agree
6%
Not Sure10%
Disagree56%
Strongly Disagree26%
Percent
Strongly agree Agree Not sure Disagree
Strongly
Disagree
2 6 10 56 26
This question was use to analyses is fear of failure and lack of encouragement by institutes the
reason why business grads do not opt for starting their own businesses
Initially the results were quite surprising, because the responses for the question were more
towards disagreeing or negating. The reason behind that kind of response was that students who
are acquiring business related education feels that they are well equipped with business
knowledge neglecting the fact that they are being taught with the set of mind that once a graduate
they have to fit in a multinational organization. We arrived to this conclusion only after
analyzing the response of question number four of our questionnaire.
42
3 I am doing BBA/MBA to get a good job not to start my own business.
Strongly Agree14%
Agree42%Not Sure
11%
Disagree24%
Strongly Disagree9%
Percent
Strongly agree Agree Not sure Disagree
Strongly
Disagree
14 42 11 24 9
The question was designed to validate the response of the previous question. The results were
more towards agreeing then negating the question, almost 62% of the population is pursuing a
business degree just to get a good job.
After analyzing the response to this question it can be concluded that the response to question
one were biased. The reason might be that most of the responders took the question personally
and answered the question emotionally rather than answering it spontaneously.
43
Q2. I don’t plan to start my own business because I have no exposure to how actually
business works
Strongly agree Agree Not sure Disagree
Strongly
Disagree
12 41 16 18 13
This question was use to analyse if lack of exposure the reason why business graduates do not
opt for starting their own businesses.
Majority of the population was agreed to the fact that they are not being exposed to the business
environment which is the reason why they do not prefer to start their own venture. Out of those
people who had a job oriented family background, majority had a less exposure to business
environment. Although there were a few cases which shows that people with job oriented family
background, didn’t not relate this issue as a barrier to start their own business.
44
Strongly Agree12%
Agree41%
Not Sure16%
Disagree18%
Strongly Disagree13%
Percent
Q4. I can’t start my own business due to lack of capital
Strongly Agree31%
Agree38%
Not Sure5%
Disagree14%
Strongly Disagree12%
Percent
Strongly agree Agree Not sure Disagree
Strongly
Disagree
31 38 5 14 12
The aim of this question was to analyze if lack of capital the reason why business graduated do
not opt for starting their own business.
As per our hypothesis, the results proved that lack of capital is assumed to be one of the major
barriers for career starting business graduates to enter into their own venture.
Similar responses of support question 9 further confirmed these results, where most of the
students attributed lack of capital to a barrier in not staring their own business.
45
Q8. I am scared of starting my own business because I am not sure if I would be able to
attract the investment
Strongly Agree15%
Agree39%
Not Sure6%
Disagree26%
Strongly Disagree14%
Percent
Strongly agree Agree Not sure Disagree
Strongly
Disagree
15 39 6 26 14
Most of the students but not all validated the response that lack of capital was one of the reason
why they are not planning for doing business.
This was just a validation question using different words to check whether lack of capital is the
cause.
46
Q9. I don’t have enough family support in terms of capital so I can’t start my business
Strongly Agree18%
Agree35%
Not Sure4%
Disagree27%
Strongly Disagree16%
Percent
Strongly agree Agree Not sure Disagree
Strongly
Disagree
18 35 4 27 16
The aim of this question was to analyze if lack of capital the reason why business graduated do
not opt for starting their own business.
As per our hypothesis, the results proved that lack of capital is assumed to be one of the major
barriers for career starting business graduates to enter into their own venture.
Similar responses of support questions 5 and 9 further confirmed these results, where most of the
students attributed lack of capital to a barrier in not staring their own business.
47
Q5. I can’t start my own business because of lack of courage to take risk
Agree4% Not Sure
7%
Disagree57%
Strongly Disagree32%
Percent
Strongly agree Agree Not sure Disagree
Strongly
Disagree
0 4 7 57 32
This question was made part of the questionnaire, to identify if fear of failure the reason why
people don’t opt for their own business.
Majority of the responders denied that they lack courage. On analysis of similar type of question
with different words, i.e. question 7, we concluded that the thought process behind answering
this question was emotional rather than radical. Most of the candidates took this question
personally and didn’t attribute this question to them that they lack courage.
48
49
Q6. I have a fear if I start my business, it might not be a success
Strongly Agree13%
Agree23%
Not Sure34%
Disagree19%
Strongly Disagree11%
Percent
Strongly agree Agree Not sure Disagree
Strongly
Disagree
13 23 34 19 11
This question was made part of the questionnaire, to identify if fear of failure the reason why
people don’t opt for their own business.
The highest percentage of response was that people were not sure if their business would be as
success. This indirectly shows that these people either lacked confidence of taking risk or had a
many unanswered questions in their mind which directed them toward the fear of failure.
50
Q7. I never thought to start my own business because I already have a very good job which
gives me financial stability
Strongly Agree18%
Agree32%
Not Sure2%
Disagree28%
Strongly Disagree20%
Percent
Strongly agree Agree Not sure Disagree
Strongly
Disagree
18 32 2 28 20
It was found that many students responded the above question in affirmative.
This shows that most of the people are happy whatever they are earning and they are not willing
to come out of their comfort region. Regardless of the fact that if they go for their own business
they might earn lot more than what they are earning.
51
Q11. I don’t intend to start my own business because of current economic recession
Strongly Agree54%
Agree14%
Not Sure4%
Disagree19%
Strongly Disagree9%
Percent
Strongly agree Agree Not sure Disagree
Strongly
Disagree
54 14 4 19 9
Unstable economy was the major barrier recognized by most of the students. Results show that
unstable economy is a major contributor.
52
Q10. I don’t want to start my own business because of current law and order situation of
the Country
Strongly Agree74%
Agree12%
Not Sure2%
Disagree7%
Strongly Disagree5%
Percent
Strongly agree Agree Not sure Disagree
Strongly
Disagree
74 12 2 7 5
Almost all of the students attributed current law and order situation with the reason behind not
starting their own business.
Statistics show that out of every 100 students 86 are reluctant to start their own business due to
law and order problems.
53
5. CONCLUSION: The survey which we conducted helped us analyze the main reasons why
business students are not opting for their own business. Top of the list
was the current deteriorating political and economic situation in Pakistan.
Recent events related to the law and order situation in the country have
impacted the youth’s mind creating a psychological barrier in taking risk
of starting their own business. The political situation has created doubts in
the minds of students which might be linked to the lack of interest taken
by the government.
Coming to the economic situation, the global economic condition has
created a great confusion in the minds of the students. Closure of main
stream banks and businesses, its hype created by the media portrayed it
negatively. It is perceived by the youth that it is not the right time to put
any investment or launch new ventures.
The second most widely acknowledged reason by business graduates for
not starting their own business is the unavailability of funds. From further
inquiry about lack of capital we came to conclusion that although majority
of the students comes from well off families, still many of them were not
willing to take a risk. The reason they gave is that they perceive that the
businesses are launched with a brand (like Coke or Olpers) which requires
a huge investment, thus holding the reigns of these students for starting a
business with the capital they already have.
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Educational institutions play a major role in developing the minds of the
youth and unfortunately in Pakistan there has been very less effort on
their part, as we found out in our survey that a vast majority of students
are not opting for business because they are not properly groomed by the
educational institutes. Our colleges are creating quality
managers rather than entrepreneurs, the course outline, perspective of
teaching and the environment is grooming the students such that once
out of this institute these students have to look for jobs rather than
starting their own businesses. Although some universities in Pakistan
have recently started small programs to inculcate entrepreneurship
among students but it’s too early to decide if it would produce the
required results.
Forth most common reason came out to be lack of exposure. It is quite understandable that
universities are more focused on theoretical business knowledge rather than preparing the
students for the practical business environment which forced students not to opt for business.
In our analysis we concluded that the students coming from job-oriented family background
opted for doing jobs. Although there were very few cases in which students with job oriented
family background opted for doing business. This shows that family upbringing, and
orientation other family members plays a vital role in encouraging business students for
doing their own business.
When asked about relating fear of failure to not starting business an intermediate element
came to light, since it was based on individuality, no one wants to show weak points, it’s a
contributor but not as common as above ones.
55
Many business graduates are in comfort zone, few believe that there are hardships in starting
and running a business, these students prefer doing tension free 9-5 jobs and were satisfied
with their monthly salary and yearly increments and don’t want to go through hardships of
business.
5.1 RecommendationsAfter analyzing the data and observing the trend we come to know that
people are quite hesitant to try new things especially when it comes to
your bread and butter. However, the global and domestic economic
conditions are not very feasible for service sector as well and people
are being mistreated by organizations in many ways. Still business
graduates prefer to opt for an easy way and prefer to serve someone
rather than cashing out their skills and abilities and become boss of
their own selves.
It is also been observed that the growth prospect is much higher in
running your own business rather than servicing someone. The
conventional apprehensions have been ruled out with technological
advancements.
Being trained and educated in business field, graduates should
come up with innovative ideas and turn them into marketable
products.
Students are young, energetic, have high excitement level, more
enthusiastic and are more passionate. They should direct their
56
energies towards creating their own empire rather than working for
someone else.
Government should stabilize the economy, and alter its economic
policy such that it should promote new ventures and encourage
young entrepreneurs to take risks.
Government should take all measures to ensure that stable law and
order situation exists in the country. And provide protection to
business men, so that more students will be encouraged.
Financial institution shall offer loans at lower interest rates for new
business ventures so that the country can have more number of
creative and energetic entrepreneurs.
Universities shall play their due role in creating entrepreneurs. They
should conduct special entrepreneurship programs to encourage
more students to go for businesses than opting for doing job.
Universities as well as other societies shall provide students with
platforms, from where students can launch their businesses.
In our opinion educational institutions are the most effective way to
groom students towards entrepreneurship. Nurturing them at this
level has the most effect and urges them to contribute towards the
growth of the economy , creating more jobs for the general
population
In order to overcome fear of failure, business graduates shall take
small risks. It’s all about creating an environment where people are
57
willing to take risk. If we can build this culture in our society, then
we can create more number of young entrepreneurs who can
benefit the country at large.
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APPENDIX A
Survey Questionnaire
This questioner is designed to find out that why business graduates/students do not opt for doing their own business. You are requested to kindly fill in the answers for the questions given below. The information you are going to provide will be kept confidential.
Gender: Male Female
Year of completion of business degree: 2010-2012 2007-2009 2004-
2006 What is the occupation of your earning family members?
Job/Service Business Both What type of employment are you looking for?
Business (self employed) job Further studies
Strongly Agree Agree Not
SureDisagre
e
Strongly
Disagree
1 I don’t plan to start my own business because I feel I still lack proper education
2 I don’t plan to start my own business because I have no exposure to how actually business works
3 I am doing BBA/MBA to get a good job not to start my own business.
4 I can’t start my own business due to lack of capital
5 I can’t start my own business because of lack of courage to take risk
6 I have a fear if I start my business, it might not be a success
7 I never thought to start my own business because I already have a good job which gives me financial stability
8 I am scared of starting my own business because I am not sure if I would be able to attract the investment
9 I don’t have enough family support in terms of capital so I can’t start my business
10 I don’t want to start my own business because of unstable economy of Country
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11 I don’t intend to start my own business because of current economic recession
12 I might think of starting my own business only after gaining some good experience and exposure
Thank You !
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APPENDIX B
Bibliographywww.wikipedia.org
www.wolframalpha.com
www.briantracy.com
www.businessguide.in
www.apastyle.org
General Reference Articles from numerous un-credited sources
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