The relationship of emotional intelligence with both the business owners’ criteria for success and successfulness: an empirical analysis

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Master Thesis Business Administration – Small Business & Entrepreneurship

The relationship of emotional intelligence with

both the business owners’ criteria for success and

successfulness: an empirical analysis

By: Wouter Plantinga Student number: s2239477

July 1, 2013

University of Groningen Faculty of Economics & Business

Nettelbosje 2 9747 AE, Groningen

The Netherlands

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Abstract

Both the business owners’ criteria for success and business success have received increasing amounts of interest from research. It is, for that reason, striking that the business owners’ success has not been measured yet in those goals that they strive for. This research will actually measure success in the success criteria that are identified by this empirical research on 154 Dutch business owners. In addition, this new approach of measuring success and its criteria can make room for new theoretic explanations of success. As a consequence, emotions were identified as a possible predicting factor when measuring success and its criteria specific to the aspirations of the business owner. This research measures emotions based on the capabilities through a concept called Emotional Intelligence (EI). The results indicate that EI is an important factor in predicting both the business owners’ success and the relative importance of his or her success criteria.

The influence of five dimensions of EI is measured on six types of success criteria and seven types of success. Findings show that EI positively relates to the importance of all

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Acknowledgments

This thesis could not have been written without help. I would like to thank several people whom helped me with completing the process of writing this thesis:

My supervisor Dr. ir. H. Zhou for providing helpful support, feedback and assistance

The business owners that cooperated with the initial pilot-interviews and invested considerable time in helping me with the development of my questionnaire

All the business owners that participated in my research and provided me with the valuable quantitative data that was needed

My fellow students with whom the discussions and shared hints and ideas were very helpful

I hope you will enjoy reading this thesis, and that it will contribute to your knowledge and insight into the complexities of today’s business environment,

Wouter Plantinga

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1. Introduction

Judging SME success is very hard, and involves one big issue: what business success actually is. While large firms clearly have major financial obligations, like maximizing shareholder value (Harris & Raviv, 2010), smaller firms are often owned by the CEO. When the CEO owns the business as well, it implies that the personal goals of the owner reflect the goals of the company, and not those of shareholders only trying to maximize their return on

investment. Research provided some attention to the different success criteria, financial but also non-financial, that business owners can have for their business (Cooper & Artz, 1995; Walker & Brown, 2004; Ramana et al., 2008; Gorgievski, 2011). The importance of

including non-financial measures of success is increasingly recognized (Ramana et al., 2008). But, financial measures have dominated, in research as well, in order to decide who is

successful, and who is not (Gibb & Davies, 1992; Wang et al., 2004). This is striking, as success is defined as the accomplishment of an aim (Illustrated Oxford Dictionary, 1998). Hence, we cannot judge a business owners’ success without including successfulness

accomplishment of their non-financial aims. Although the suggestion has been made (Walker & Brown, 2004; Song et al., 2009; Gorgievski, 2011), research has not included non-financial measures when measuring and comparing business owners’ success until so far. This research will investigate how successful business owners with regard to their own goals.

Scientists developed many concepts and theories to explain financial performance differences between businesses (Porter, 1981;Barney, 1991; Wolff & Pett, 2006; Baker & Sincula, 2009). The new approach of judging success discussed above could dramatically change the

relevance of these approaches. Where financial, objective measures were used to determine one’s success, it are now the business owners’ own aspirations that are used for determining who is successful. This new approach leaves an opportunity to propose a factor that has not been linked the success of a business and its owner: emotions.

Emotions determine much of how we think and act (Greenberg, 2012), so they can have an important role in what we want to achieve and how successfully we act on those aspirations . This is supported by Delmar (1996), who states that “emotions are relatively proximal, some are stable over time and others are not, but they have a direct impact on goals, and actions”. Holt & Jones (2007) even propose that those actions instigated by emotions, play an

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As a result, this thesis introduces emotions to the field of empirical business research as a possible factor that influences both the success of a business owner and his or her goals. These emotions can be measured in the form of capabilities by the Emotional Intelligence (EI) concept (Salovey & Mayer, 1990; Schutte et al., 1998).

This leads us to the following research question:

“Does the emotional intelligence of the business owner influence the relative importance of criteria for success and how successful he or she is in achieving these goals, and if so, how?

Answering this research question will either approve or disapprove EI as a relevant concept in predicting and influencing both the goals and success of the business owner. In order to answer the research question, two propositions will be developed in the next section of this paper. When proven relevant, this could open up a whole range of possibilities for further research. If EI is found to influence business success, this research will not only increase theoretical understanding, but also provide opportunities to improve business success as EI can be developed by trainings and education (Smigla & Pastoria, 2002; Goleman, 2005; Lopes & Salovey, 2008). This can be achieved at firm-level, but also on a long-term, nationwide scale by including EI-development in the youth’s education.

This paper will start off with a discussion of the main concepts of this thesis: emotional intelligence, the business owners’ criteria for success and business success. The same section will proceed with the development of two propositions. The methodology section will discuss the process of data gathering and analysis. This is followed up by a chapter on results of the data-analysis. The paper proceed with a discussion in which the rightfulness of the

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2. Theoretic framework

This part will discuss the research topics in more detail in order to gain an understanding of what is already known on this research topic. The construct Emotional intelligence is

discussed first, followed by the description of both the success criteria of the business owner and the actual achieved success. After the three main subjects of this thesis are discussed, two propositions are formed, based on the possible relations of EI with both the importance of success criteria and actual success. This involves the combination of both business and psychological literature and research.

2.1 Emotional intelligence

What emotions actually are, is a question that almost cannot be answered although many scientists have made many attempts to grab the concept (Scherer, 2005). Scherer states that emotions come “ in response to the evaluation of external or internal stimulus event as relevant to major concerns of the organism” (p. 697). Hence, emotions are an internal response to any concern that people can have. In addition, he states that “emotions prepare adaptive action tendencies and their motivational underpinnings” (p. 702), so emotions influence or even determine how a person will react to a situation and how the individual is motivated to take certain action as well. Emotions also have a strong influence on

communication which can have consequences for social interaction (Scherer, 2005). In addition, Greenberg (2012) states that emotions have a major and continues influence on our lives, and they govern much of what we do and think. Salovey & Mayer (1990) are the first researchers to start with the development of a measure that captures the emotional abilities of an individual which they called emotional intelligence. With this concept, they try to develop a framework that captures the differential responses to, and caused by emotions, that can be measure and compared between individuals. They define emotional intelligence (p. 185) as:

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This concept is sometimes mistakenly called social intelligence. Social intelligence is actually part of EI (Goleman, 2005). Social intelligence is purely focused on the use of emotions in order to manipulate outcomes from interactions with other individuals. In contrary, emotional intelligence includes the use of all emotions, both internally and externally (Salovey & Mayer, 1990;Goleman, 2005; Rehman, 2011). EI gained wide recognition after Goleman developed this concept in 1995 (Lopez-Zafra, 2012). In order to increase the understanding of this concept, Goleman (2005) consequently developed five dimensions that were to make up emotional intelligence: self-awareness, self-regulation, empathy, motivation and social skills. Self-awareness is the most basic type of EI, it is about recognizing one’s own feelings as they happen. People with high self-awareness know better what the really want and will be more confident in making personal decisions (Goleman, 2005).

Self-regulation is the ability of handling your own emotions in an appropriate manner, which builds on self-awareness. Individuals good at this skill will be able to cope well and more quickly with major setbacks (Goleman, 2005).

Motivation is about “marshaling emotions in the service of a goal” (p. 43; Goleman, 2005), by being able to self-motivate, stifle impulsiveness and delay gratification. Hence, motivation is necessary in order to choose a long term perspective; to sacrifice short term incentives for long-term results.

Empathy is the first dimension focused on interpersonal use of emotions. Empathy builds on self-awareness and is about understanding the emotions that others feel. This is important for understanding subtle social signals that other people send about their wants and needs. According to Goleman (2005), this makes people better in professions like teaching, sales and management.

Handling relationships, or social skills, is the last dimension of EI and is about managing emotions in others. This ability undergirds popularity, leadership and interpersonal effectiveness (goleman, 2005).

2.2 Criteria for success held by business owners

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In order to evaluate whether a business is successful, financial measures like profitability and growth are among the most common measures recognized by researchers (Wang et al., 2004). But, when taking into account the definition of success: “the accomplishment of an aim; a favorable outcome” (Illustrated Oxford Dictionary, 1998, p. 831), it becomes clear that success is specific to the aims of the business owner. Hence, the success criteria that business owners use to evaluate their success reflect in how far they attained their aims with regard to their business. This is also recognized by researchers. Walker and Brown (2004) did

empirical research on the importance of both financial and non-financial aspects of success. They found that business owners regard non-financial aspects of success as more important than financial success. This was later confirmed in somewhat similar research by Gorgievski et al. (2011). They found that personal goals like a good life-work balance, having satisfied stakeholders and personal satisfaction were more important to business owners than other, business related goals like innovation, growth and profitability. This categorization seems more or less similar to Walker et al., as the criteria put under personal-oriented coincide with Walker’s non-financial success criteria. The same holds for the business related goals and financial criteria. These articles highlight the importance of including non-financial success measures when judging the success of a business owner. The following paragraph’s discuss both financial and non-financial criteria that business owners can have.

2.2.1 Financial success criteria

This type of measures is, in general, most popular in order to judge about the successfulness of a company. The main reason that these economic, hard measures are used because they are easily, and often already, administered (Gibb & Davies, 1992). Also, these hard measures make it easier to compare different companies. Financial measures are important, because every business has to be financially viable beyond a certain threshold, in order to remain in existence (Marlow & Strange, as cited in Walker & Brown, 2004). So, as financial success is a pre-condition for survival, financial success criteria are essential to every company that wants to ensure continuity.

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that they are hard and measurable, what corresponds with the description provided by Gibb & Davies (1992) earlier on.

2.2.2 Non-financial criteria

Less extensively used in order to evaluate business success are the soft non-financial

measures, which are personal and subjective and therefore more difficult to quantify (Walker & Brown, 2004). But, like stated before, in order to judge whether a business is successful, these criteria have to be taken into account as well, especially because business owners judge these types of goals as more important than financial goals (Gorgievski et al, 2011; Walker & Brown, 2004).

Examples of non-financial criteria are personal satisfaction and pride (Walker & Brown, 2004), which seem to correspond with more pull motivations for starting a business.

The increased importance of non-financial measures for success is also, although somewhat differently, recognized by large firms through increased adoption of Balanced Scorecards (BSC’s). The BSC was developed by Kaplan and Norton, in 1992, and was different from the performance measurement systems that were used until then. Frigo (2012, p.49) describes its revolutionary role as follows: “the BSC was originally introduced to improve corporate performance measurement by balancing lagging metrics of financial performance with non-financial metrics that drive future performance”. Kaplan and Norton introduced this

measurement system because the reliance on financial measures would not be able to ensure sustainable value creation, as it only measures past performance and encourages a focus on short term goals rather than long-term goals (Frigo, 2012).

When combining the dimensions for success criteria by both Walker & Brown (2004) and Gorgievski et al. (2011), it appears that criteria that are both non-financial and business related criteria like satisfying stakeholders, are actually measures can be used in the BSC. In contrast, non-financial but personal criteria like pride and personal recognition cannot be found in the BSC as criteria for success and are specific to business owners who are CEO as well. Six main types of non-financial success criteria are identified.

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Although it was found the be one of the least important measures of success for the current moments, business owners seem to rate it highly important as a future objective (Newby et al., 2003).

Having satisfied stakeholders has been identified as important criteria for by previous research, especially with regard to customers and employees (Adams & Sykes, 2003). This measure has also been included in the as a non-financial criteria for success in the BSC (Adams & Sykes, 2003).

Contributing to society, or social responsibility, is especially valued by the more people-oriented business owner (Gorgievski et al., 2011). Social responsibility focused on social welfare in a more general sense, including possible environmental concerns (Gorgievski et al., 2011). Where stakeholder satisfaction is purely focused on customers and clients, social responsibility includes the satisfaction of all other stakeholders in the business its

environment.

Autonomy is about being free to make one’s own decisions, and is another ‘pull’ factor that draws individuals toward starting their own business. Being autonomous is requires a feeling of personal freedom . (Buttner & Moore, 1996).

The final non-financial success criteria, pride, is about gaining recognition from other people about accomplishments. This can be another pull factor for starting a business when people do not get enough recognition for their previous job (Buttner & Moore, 1996).

2.3 The successfulness of the business owner

As success is the accomplishment of an aim (Illustrated Oxford Dictionary, 1998),

successfulness of the business owner should be measured in his or her own goals. This means that both financial and non-financial success need to be included. That non-financial criteria are gaining increased amounts of recognition by both small and large firms (Walker & Brown, 2004; Frigo, 2012), is also recognized by researchers (Gorgievski et al., 2011).

2.3.1 Financial success

Financial success has received some attention in SMEs literature. This section will discuss a number of different ways in which research has tried to explain financial success.

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39% of variance in SME performance (Lopèz, 2001). In short, Porter’s (1979) view is that the success of an organization is determined by the external organization consisting out of five forces, namely competitors, threat of substitutes, threat of new entrants, suppliers and customers. Contrasting to this view is the resource based view by Barney (1991). He states that firms are heterogeneous and that firm performance is determined by how the firm combines resources and capabilities, which should result in a competitive advantage for the firm, which results in superior company performance. These two approaches would capture the external (Porter’s five forces) and internal influences (Barney’s resources and

capabilities) on performance. Similar and more recent studies show a decreasing trend.

Spanos et al. managed to explain 21.7% of firm performance in 2004, and this decreased even further to 9,3% in 2008 (Galbreath & Galvin). These results show that while researchers claims to capture firm performance by capturing the firms internal (Barney’s RBV) and external environment (Porter’s forces), they only manage to find need a small and decreasing proportion of the variance in firm performance. This shows that there is major room for improvement and implies that researchers need to become more creative in order to increase the understanding of financial firm performance.

Other research focused on explaining firm profitability measures the orientations of business owners. Orientations involve “a person’s attitude or adjustment in relation to circumstance, esp. Politically or psychologically“ (Illustrated Oxford Dictionary, 1998; p. 577). Examples are the product and process improvement orientations (Wolff & Pett, 2006). These

orientations reflect whether the business seees product or process improvements as the primary strategic orientation. The product improvement orientation was found to be positively related to profitability. Another examples are the entrepreneurial orientation and market orientation (Baker & Sincula, 2009). The first, EO, was found to have an indirect influence on firm performance. The second, reflecting how customer driven the company is, influenced performance in a positive way. These orientations reflecting the preferences of the business owner. It explains what type of behavior can be more profitable.

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2.3.2 Non-financial success

Although research has begun to recognize non-financial success criteria as important part of what business owners want to achieve (Walker & Brown, 2004; Gorgievski et al., 2011), it still received limited attention. It is probably for that reason that actual success in achieving all these non-financial goals has not been included in research when measuring the business owners’ success. This section will discuss non-financial success, based on what literature has stated on the success criteria that are likely used by business owners’ for the self-evaluation of their success.

Personal satisfaction is an important criteria for success for business owners (Artz & Cooper, 1995). When the business owner is happy with the way he can run his business he is satisfied with his business. In other words, he is intrinsically rewarded by the positive feelings he gets from running a business (Gorgievski et al., 2011). One can only be personally satisfied when someone can live according to one’s own values (Gorgievski et al, 2011).

Flexibility involves adaptability and variability, for example working flexible hours (Illustrated Oxford Dictionary, 1998). With regard to flexibility, the business owner is successful when he has achieved a good life-work balance (Gorgievski al. 2011). This is an important aspect of success as it corresponds with two reasons for starting a business, identified by Birley & Westhead (1994). The first reason is being able to make one’s own choices with regard to personal and family life. The second reason for starting a business that they identified, is to be able to control one’s own time. These aspects are achieved by the successfully flexible business owner.

Successfully satisfying stakeholders reflects the how well customers and employees are satisfied with the firm (Adams & Sykes, 2003). This is a non-financial goal that business owners use in order to judge their own success. Stakeholder satisfaction is also included in the BSC (Adams & Sykes, 2003 in Gorgievski et al., 2011). It can therefore be related to financial performance, as the BSC is used for improving or sustaining long term financial performance (Frigo, 2012).

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Autonomy is defined as “the right of self-government” or “personal freedom” (Illustrated Oxford Dictionary, 1998; p. 61). Achieving autonomy seems to correspond with one of the major reasons for starting a business, identified by Birley & Westhead (1994); to have considerable freedom in adapting the one’s approach to his or her work. So, when a business owner does not feel restricted in making his own choices, he is successfully autonomous. Pride, the final non-financial aspect of success, is about gaining public recognition which involves have a good reputation and being viewed as a prizewinner (Gorgievski et al., 2011). Hence, a business owner is successful when he feels recognized for his accomplishments. Taken together, these six aspects are assumed to form the most important aspects non-financial success of the business owner.

2.4 Emotional intelligence and the importance of success criteria

This relation between the emotional intelligence of a business owner and success criteria he or she uses for judging whether the business is a success has received no direct attention from research yet. This section will develop a proposition by indirect argumentation based on what is currently know in literature.

As emotions govern much of what we do and how think (Holt & Jones, 2007; Greenberg, 2012), both the action of starting a business as the motivation for doing so can be influenced by emotional intelligence. This can influence the criteria that he or she will use for evaluating the success of the business, as the motivation for starting a business influences success the criteria held by the business owner (Hamilton, 1987). In addition, emotions are found to influence the perception of individuals (Phelps et al., 2006). This implies that emotions influence what we actually find important, and what not, which gives them the potential to manipulate the relative importance of different success criteria. Hence, it seems reasonable to assume a relation between EI and the success criteria held.

Some indications on what this influence could be are now discussed. The influence of EI can possible from its predicting influence on personality characteristics (Law et al., 2004;

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Non-financial criteria for success are soft and subjective (Walker & Brown, 2004). This implies that perception is important in order to judge its value. Hence, it can be expected that the emotions of a business owner will influence the rating of these measures of success. People who understand emotions better might value them more highly as well, so EI could be relevant in the perception of these subjective measures. Personal satisfaction for example, can only be experienced by the business owner himself. While others are unlikely to judge their success on such measures, it is one of the most important measures for business owners themselves (Artz & Cooper, 1995).

In contrast, financial measures like turnover and growth are hard and more objective (Walker & Brown, 2004), and can therefore be interpreted in a rational way. This could indicate that emotions play a more limited role in the valuation of financial criteria as they are not purely emotional measures and involve quantifiable success.

Distinguishing separate dimensions of EI can result in greater understanding of how the importance of different success criteria is influenced. As this relation has not been researched before, predictions on reasoning. The nature of the separate dimensions can provide some clues. Emotions can be differentiated based on the extent to which they are relevant to the business owner internally or externally. The internal emotions, awareness and self-regulation have no clear relation to other people. So, non-financial criteria that are mostly internally relevant, like the sense of flexibility and autonomy, might have a more clear relation with these internal dimensions of success.

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confident to do so can become reluctant to recognize the importance of these non-financial aspects.

As emotions influence how people think (Greenberg, 2012) as well as their perception (Phelps et al., 2006), it is well possible that they influence the business owners’ criteria for success.

Proposition 1 is therefore as follows:

“The emotional intelligence of the business owner influences the relative importance of different criteria used to evaluate his or her success”

2.5 Emotional intelligence and business success

Although there has not been research on relation between EI of the business owner and the success of the business owner, both constructs have received attention from several

perspectives. This section will start off with a four different lines of reasoning to validate the expectation of a relation. It will be finalized by a proposition that is based on indications that are found by combining different types of literature and research.

The first indication is that EI is already found to have many positive relations with personal success factors. Examples are career and school success, life satisfaction and health

(Goleman, 2005; Cartwright & Pappas, 2008). For example, with regard to high school performance, students are found to benefit strongly from emotional intelligence with regard to their GPA-scores: they are better in stress management and intrapersonal skills and have more adaptability scores (Parker et al., 2004). Holt & Jones (2007) state that the growing number of studies on EI implies that it may be important for the selection of employees and their development as well. As success in one’s (school) career suggests that a person has the ability to achieve one’s goals, EI can be argued to positively influence the abilities of the business owner to attain his or her goals as well.

A second stream of research that can be linked to business success, provided attention to the influence of EI on job performance. Where success is a more generic measure of

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mainly focused on the effect of intellectual capacities (IQ) in their research, they found that factors with emotional components like handling frustrations and emotions were the best predictors of future job performance. A possible explanation is provided by Goleman (2001). He argues that IQ is very important in clustering people in both professions and education, and that EI does not receive much attention in this differentiating process. The resultant is that EI is often determines who will become the star performers, as intellectual capabilities are similar within these groups and provide only a limited chance to differentiate oneself (Goleman, 2001). This is in line with research by Wang et al. (2004), they concluded that EI could be a good predictor of job performance. The influence of EI on job performance is found to be most substantially positive when personal commitment is needed (Holt & Jones, 2007) which implies a necessary combination of both IQ and EI. The same mechanism can be relevant for differences in a business owners’ (financial) success. Holt & Jones (2007) even suggest that EI could be more important than technical skills or cognitive abilities in a business setting. Improved job performance can be related to business success as job

performance is about carrying out specific tasks. Every action a business owner engages in is a specific task, and a higher ability to fulfill (a part of) these tasks could therefore contribute to the overall success of the business as well.

A third argument for the importance of EI is made by observing what is written on the effects of a high EI. As it increases social effectiveness (Goleman, 2005) and is associated with effective leadership (Cartwright & Pappas, 2008), it should improve the outcomes of these interactions from the business owners’ perspective. Managers of small growth-oriented business are found to spent 72% of their time communicating (O’Gorman, 2005). This

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responsibility and stakeholder satisfaction. In addition, better satisfied customers can increase turnover and profits, hence financial results as well. Financial success could also increase due to more happy employees as these are more productive (Taris & Schreurs, 2009). All in all, the effects that are contributed to EI, seem to make the business owner more able to get positive results from his interactions with all stakeholders of the business. This should increase his or her successfulness as well.

The fourth and final argument for an influence of EI on success is that EI can indirectly influence entrepreneurial success through personality characteristics (Owens et al, 2011). In science, personality and EI are closely related and these concepts are sometimes argued to overlap. Law et al (2004) describe that personality traits reflect tendencies in how humans think, feel and act. In contrast, EI measures competencies and abilities, which would make it a type of intelligence, thus different from personality (Law et al., 2004). Research confirms this line of reasoning. EI was found to predict personality characteristics and the concepts were found to differ (Law et al., 2004; Koydemir & Schütz, 2012).

Other research found that certain personality characteristics like goal-setting, social networking, emotional resilience and work drive, were found to predict up to 16% of entrepreneurial success (Owens et al, 2011). EI influences the personality characteristics of an individual, which in its turn influences entrepreneurial success. This makes assumable that EI plays an indirect role in this process of determining entrepreneurial success.

In addition, personality traits involve how people think and act (Law et al., 2004), so it is also likely to influence the allocation of the company’s resources (Barney, 1991). Resource allocation influences profitability (Lopèz, 2001; Spanos et al., 2004; Galbreath & Galvin. 2008 ), which makes a possible explanation of why EI influences financial success through its effect on personality. With regard to non-financial success, several personality

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This section discussed four streams of reasoning that involve other, more established, concepts. Although these concepts are outside the scope of this thesis, they made it reasonable to expect an influence of the business owners’ EI on his or her success.

Proposition 2 is therefore as follows:

“The emotional intelligence of the business owner positively influences his or her successfulness with regard to the business”

3. Methodology

This section discusses how this research has taken place. The development of the

questionnaire is discussed first. The procedure of data gathering is discussed afterwards, separated into a section on the initial pilot-interviews and the actual gathering of the

quantitative data. This section is finalized with the data-analysis in which the reliability of the constructs and their sub-dimensions is discussed.

3.1 Questionnaire

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achieving them. The questions on the final construct, Emotional Intelligence, were deliberately put in between so that the scores for all questions are less fresh in the

respondent’s memory. This could prevent that business owners adapt their successfulness to just rated importance of different types of success, to a certain extent. For the measurement of the constructs, a six point Likert-scale was used as Maatman (2011) did. This is done because business owners are now forced to choose between slightly positive or slightly negative, they have no comfortable, easy opportunity to score neutral. This should results in better usable data. The items range from 1) completely disagree to 6) completely agree.

The questions needed for measuring EI are based on a 33-item measure developed by Schutte et al. (1998). They developed a self-report measure that they tested, and after deleting about half of all questions, the list was validated on nine of the eight different measures it used. The questions in this list were listed in English, and translated into Dutch. After being translated, questions were categorized among the five different dimensions of EI distinguished by Goleman (2005). This was achieved by adding questions to one of the five dimensions of EI that fitted best according to Goleman’s definitions. The representation of the questions over these dimensions was unequal, especially motivation was underrepresented with only two questions. Motivation is very important for personal success of an individual (Goleman, 2005), influences the decision on whether to start a business (Hamilton, 1987) and the criteria that are consequently used to measure success (Buttner and Moore, 1996). Hence, a small literature review on motivation was held (Centre on Education Policy, 2012; Salovey & Mayer, 1990; Goleman, 2005). The dominant finding on motivation was that it is about wanting to do things that need to be done, even if there is no short term incentive. Based on this small literature review, three additional questions were added to the questionnaire.

3.2 Procedure

This research has been conducted in two steps. It started off with three initial pilot interviews. These were required in order to test the questionnaire and determine the scope of the rest of the research.

3.2.1 Pilot-interviews

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of a social enterprise simultaneously. The interviews were structured, a long list of questions had to be discussed. This structure was important due to the large number of sub-dimensions that are involved in this research topic. Although Likert-scales were used for rating these items, verbal discussion of the questions was at least as important for the understanding of both the interpretation of these questions as the possible interrelating results. These

interviews were used to evaluate whether qualitative or quantitative research would be more valuable. A second purpose of these interviews was to test the questionnaire for its practical applicability, especially as the questions on two of the three constructs we newly developed by the researcher.

The results of the first three interviews showed that the differences between the three

interviews, and four interviewees, were very hard to explain due to the large number of topics discussed. In addition, no expected relations were found. For example, the interviewee with least interest in stakeholder goals rated himself higher on emotional intelligence than the other two interviewees. Which was in contradiction to expectations.

Hence, it was decided that this research required a quantitative approach. This could reveal many different trends and relations. These separate relations could be explained later by more in-depth research.

3.2.2 Quantitative research approach

This paper uses a quantitative approach to identify whether EI is a relevant concept in determining both the business owners’ success criteria as his or her achieved success. The subjects of this research are business owners within the Netherlands. Their original size of the businesses in the mailing list was under 50 employees. As, by this time a substantial amount of businesses had grown larger it was decided to put no restriction on the size of the

businesses that the business owners owned. The results are controlled for size.

In order to gather the quantitative data necessary for this research, a mailing list was used that Maatman (2011) derived from Orbis. which contained around 4000 e-mail addresses. About 400 mail delivery failure reports were returned which makes the number of addressed

companies 3600. The finalized questionnaire can be viewed in Appendix A. It was put online in Qualtrics, a website specially developed for collecting data. The questionnaire was

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Maatman’s list had a maximum of 50 employees. The e-mail was addressed to owner/CEO of the company, but the most e-mail addresses were @info, which meant that we had to ask assistants to forward the e-mail to the Owner/CEO. This might have had a negative influence on the number of respondents. After the first mailing round 79 surveys were completed, with around 140 surveys that had been started. The data set was not sufficient after this first mailing round, and one and a half week later a reminder was sent to the businesses that had not left their e-mail address at the end of the questionnaire. This time, the number of respondents was larger. A total of 380 persons started the questionnaire when the

questionnaire was closed. This would be equal to a response rate of approximately 10,6%, which is low. After deleting partially filled in questionnaires, a sample of data collected from 167 business owners remains. Next, participants who failed to respond inconsequently to reversely stated questions (i.e. filled in contradicting answers when questions were negatively stated) were deleted as well. This resulted in a final dataset of 154 participants, Which is 4,2% of the original mailing list. The real response rate cannot be calculated as we don’t know how many business owners actually received our request the fill in the questionnaire. There can be several causes for the low response rate, firstly the size of the interview can be of influence, as the questionnaire contained around 150 questions and was estimated to last 20 minutes. This is pretty long, especially for a busy business owner/CEO. This was also reflected by responses at the end of the questionnaire as well as returned emails. Secondly, only the probably most busy person in the company, the business owner, was able to fill it in. As most email addresses were @info probably many assistants did not even forward the mail. Thirdly, many business owners started the questionnaire but did not finish it entirely due to several reasons like length, type of questions or not being able to answer some questions, which was the case for self-employers. Lastly, many delivery failure reports were returned, or emails were delivered while the business was not existent anymore.

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traders or were organizing recreational activities. Somewhat surprising to see was that

business owners with smaller companies had enjoyed more education on average than owners of larger companies.

3.3 Dependent variables

This research has two different groups of dependent variables. The first group of dependent variables are the success criteria that the business owner uses to evaluate his or her success. The criteria are split into financial and non-financial criteria. The second group of dependent variables is the perceived successfulness of the business owner, which is separated into financial and non-financial success dimensions as well.

Financial success criteria

These criteria reflect the financial goals that the business owner holds for his company. These criteria are ‘hard’ which means they are quantifiable. Financial success criteria have been the dominant measure for success for a long time, as they are often already administered and easy to use (Gibb & Davies, 1992). The criteria that Maatman used to make his questionnaire are profit, turnover, return on investment, number of employees and growth in the number of customers. It is important to note that although these measures are quantifiable, it is the perception of the business owner that determines how successful the business is in achieving its financial goals. These financial goals are consolidated into one item measuring financial success.

Table 1: financial aspects of success, table copied from Maatman (2011)

Measure Explanation

Profit Turnover minus expenses, before tax Turnover Total amount of sales in €

Return on investment

Revenue of the investment / the costs of the investment Number of

employees

Total amount of people working for the company measured in FTE and

people employed. Growth of customer

base

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Non-financial success criteria

In contrary to the financial measures, non-financial success criteria are personal and subjective, and for that reason hard to quantify (Walker & Brown, 2004). Measuring and comparing non-financial success is therefore more complicated, as the motives for running a business can differ between every single individual. This research distinguishes between six different types of non-financial criteria, based on Maatman (2011) who derived these types from papers by Birley and Westhead (1994), Volery et al. (1997), Gorgievski (2011) and Walker and Brown (2004): autonomy, recognition/pride, flexibility, social responsibility, personal satisfaction and stakeholder satisfaction. Due to reliability considerations, discussed in section 3.5, social responsibility and stakeholder satisfaction are merged. Although this is not ideal, they both reflect the satisfaction of different stakeholders and are thus closely related.

Table 2: constructs copied from Maatman (2011, p. 19)

Measure Explanation References

Autonomy To be your own boss, concerning work distribution

Volery et al., 1997 Recognition/Pride The image of a business owner,

determined by the society or the business owner himself

Walker & Brown, 2004; Volery et al., 1997 Flexibility Having freedom in the things you do,

concerning time distribution

Birley and Westhead, 1994 Social responsibility Goals related to further social and

environmental welfare beyond the direct economic, technical, and legal interest of the firm

Gorgievski et al., 2011

Personal satisfaction Personally oriented objectives of the business owner

Walker & Brown, 2004; Gorgievski et al., 2011 Stakeholder

satisfaction

The satisfaction of customers and employees

Gorgievski et al., 2011

Financial and non-financial success

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of success should give a good indication of the actual ‘success’ that a business owner

experiences in running his/her business. The constructs used for measuring success are equal to those used for to measure financial and non-financial success criteria, and are given in tables 1 and 2.

3.4 Independent variable

These variables can be categorized into two different groups. The real independent variable is emotional intelligence. The second group of independent variables are demographic factors which are used as control variables.

Emotional intelligence

Emotional intelligence is all about capabilities with regard to managing emotions in one’s self and others (Salovey & Mayer, 1990). As it is a process that happens automatically and inside people’s heads, EI is not easily measureable in an objective manner. That is why most tests that attempt to measure it are based on self-perceptions (Schutte et al, 1998). The same holds for this research, the EI of the business owner is rated on the perception of his or her emotional capabilities. The criteria that are used for this research are: awareness, Self-regulation, Motivation, Empathy and Social skills. According to Goleman (2005), these respective dimensions form the different layers of EI, explaniations of thes dimensions are provided in table 3.

Table 3: Dimensions of EI (Goleman, 2005)

Measure Explanation

Self-awareness An ongoing observation and understanding of one’s own internal states

Self-regulation Being able to regulate one’s emotions and restrain emotions in excess; temperance

Motivation Being able to marshal emotions of enthusiasm and confidence in order to pursue one’s goals relentlessly Empathy The capacity to know and understand how another feels Social skills The ability to manage relations with and influence

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Control variables

This research uses a broad scale of control variables. This will increase the reliability of the results. These factors are both person and business related. The measures, including an explanation and its sources are listed on the following page.

Table 4: Control variables

Measure Explanation References

Industry The type of business Storey & Greene, 2010 Number of

Employees

Measures company size Storey & Greene, 2010 Turnover Second measure of size Storey & Greene, 2010 Gender Gender of the business owner Bird and Sapp, 2004; Danes

et al., 2007; Chusmir, 1989 Age Age of the business owner Storey & Greene, 2010 Education The highest education the business owner

has finished

Storey & Greene, 2010; Calvo & Garcìa, 2010 Rural area Type of living environment Storey & Greene, 2010 Marital status The living situation of the business owner Storey & Greene, 2010 Children Whether the business owner has to feed a

family as well

Storey & Greene, 2010 Prior experience Experience of the manager as a manager,

business owner and in his/her current sector

Storey & Greene, 2010; Calvo & Garcìa, 2010 Family business If the business is perceived as a family

business

Storey & Greene, 2010 Small Business

Owners vs entrepreneur

Every owner of a small business can be regarded a small business owner, but not every business owner is an entrepreneur. An entrepreneur runs a business in order to grow it in size, and will have a strong propensity to innovate.

Carland et al., 1984

3.5 Data-analysis

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number that stands for the part of the questionnaire in which they were measured, followed by a ‘-‘ sign and the number of the question. These questions can be found in appendix A. Some dimensions required deleting one or more items, this is indicated in the third column. Some questions were reversely stated which means that they are negatively stated: ‘my customers are satisfied’ may become ‘we receive many complaints by customers’, for example. These codes of these questions are followed by a ‘*’ sign. Finally, it is argued that an alpha can only be used when three or more items are included in the test. Hence, an additional correlation analysis was conducted with items containing only two questions. Items with reasonable correlations were taken together to form the construct. These correlations can be derived from appendix B.

One of the control variable in this research is the difference between small business owners and entrepreneurs, which is measured by the entrepreneurial orientation discussed in section 3.3.2. Three items were developed to measure the extent to which the business owner is an entrepreneur, and the questions were found to be valid with α = ,606.

The success criteria held by the business owners, the first construct, was measured by 16 questions. All items were found reliable, except for social responsibility and stakeholders. It can be argued though, that these factors are fairly similar as they are both about taking responsibility for welfare of others. A factor analysis confirmed this. Taken together these items are found reliable at α = ,647. Hence, these two items were merged in order to ensure reliability.

Table 5: Personal success criteria of business owners criterium Items included Items

deleted Cronbach’s Alpha Correlation* Social responsibility (including stakeholders) II-1, 5, 15, 16 - ,647 - Flexibility II-2, 6, 12 - ,605 - Autonomy II-3, 7, 10 - ,737 -

Personal satisfaction II-8, 9 - ,767 ,623 (p < ,01)

Pride II-11, 13 - ,735 ,582 (p < ,01)

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As shown in table 6, all five dimensions on emotional intelligence are reliable. Two dimensions required one question to be deleted. Empathy required question III-6 to be deleted, as with α = ,589 the items would be unreliable. The original questions on motivation were not delivering reliable data with α = ,325, deleting question III-34* resulted in a

sufficient α = ,650. When combining all 5 dimensions, a valid measure of the total EI of the business owner appears with α = ,661. In the initial questionnaire there existed one additional question, which was deleted after the initial three interviews with entrepreneurs/business owners, as it was almost impossible to distinguish it from another question. A factor analysis on the 35 questions on EI was conducted. 9 factors were distinguished but did not result in different dimensions clearly. When limiting the number of factors to 5, more clear results occur. Questions on social responsibility and motivation were found be separate factors. Self-awareness, empathy and social skills show several interrelations. Due to the complexity, these are also shown in appendix C. First, questions on social skills and empathy are found to relate well. A possible explanation for their interrelation is that these are both about emotions used in relation with other people. Second, self-awareness and empathy also have

considerable ‘common ground’. These relate both to the recognition of emotions, which could explain this result. Self-awareness could also function as a separate dimension although two questions do not fit in: questions 18 and 19. This factor analysis confirms the complexity with regard to distinguishing separate EI dimensions.

Finally, the original list with questions developed by Schutte et al. (1998) was tested on measuring EI in total, except for one question that was deleted. This overall EI measure was found valid with α = ,853. After the first relation of the total EI construct is used to test the relationships, the same analysis is conducted for the separate dimensions.

Table 6: Questions on emotional intelligence

criterium Items included Items deleted Cronbach’s Alpha Self awareness III-15, 16, 17, 18, 19,

20, 21, 22, 23 - ,720 Self-regulation III-24, 25, 26, 27, 28, 29 - ,766 Motivation III-30, 31*, 32, 33, 34*, 35 - ,649 Empathy III-6*, 9, 10, 11, 12, 13, 14* - ,725

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Data on the third construct, successfulness was finally analyzed. Eight questions on financial success were used for the data gathering: questions IV-1 to IV-8. The Cronbach’s Alpha reliability test resulted in α = ,837 including all items. Hence, the construct financial success is proven very acceptable for analysis.

The remaining 23 questions were used to test multiple aspects of non-financial success, the results are shown in Table7.

Table 7: Measurement of non-financial success

criterium Items included Items deleted Cronbach’s alpha Correlation **

Autonomy IV-9 IV-10* - ,223 (before

deleting; p < ,01) Pride IV-11, 12, 13, 14* ,610 - Flexibility IV-15, 16, 17*, 18 ,699 -

Social responsibility IV-19, 20, 21, 22

- ,757 -

Personal satisfaction IV-23, 24 IV-25* ,654 ,458 (after deleting; p < ,01) Stakeholders IV-26, 27, 28*, 29, 30, 31 - ,678 - Stakeholders - customers

IV-26, 27 IV-28* ,608 ,439 (after

deleting; p < ,01)

Stakeholders - Employees

IV-29, 30, 31 - ,942 -

*) Reversely stated questions

**) Items are tested on correlation when only two items are left to measure a dimension As can be seen in table 7 successfulness with the attained autonomy was only measured by 2 items. Unfortunately, these items scored α = ,360, which means that using these questions would result in unreliable findings. Correlation analysis confirmed that the items showed a weak relationship, especially in comparison with the other items containing only two

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The measurement of personal satisfaction was intentionally measured by three questions but resulted in α = ,527, so question IV-25* was deleted. This involved a reversely stated

question, what means that although this criterion scores α = ,624, reliability is minimal. The correlation was near ,5 and it was decided to keep these two questions together.

The entire set of questions on stakeholder satisfaction was found to be reliable, but when splitting it into two separate items, customer and employee satisfaction, the items on customer satisfaction appear to be unreliable (α = ,482), hence question IV-28* had to be deleted in order to achieve a reliability of α = ,608. Correlation analysis showed an acceptable correlation between the items and hence the questions were kept together to measure the (perceived) satisfaction of customers. The items on employee satisfaction were very reliable which can be an indication that these questions were very similar.

3.5.1 Statistical tests

This section will discuss the tests that are used for the analysis, which are used to acquire the results shown in the next chaper. The main methods for analysis are correlation and simple and multiple regression, which are discussed below. Interpretation of the results is also discussed.

Correlation analysis is one of the most popular methods for analyzing quantitative data. This analysis can used for analyzing ordinal data from Likert scales with a minimum of 5

categories (Choi et al, 2010). It can be used for testing the relationship between two variables, and the strength of it.

The results will be discussed per proposition separately, the data used is all found in appendix B. As the entire correlation analysis was not included as the table is too large to fit on one page, the correlations with regard to the control variables are provided in two additional tables. When correlation is high (> ,5), it could also be an indication of the multicolinearity problem. This problem occurs when two different independent variables highly correlate. When one independent variable change, other will change as well in such a case. As a result it is unclear which variable actually cause the change (Keller, 2012). So, when

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The main methods of analysis are simple and multiple regression. Simple regression analysis includes only one predicting dimension in the analysis. In contrast, multiple regression includes other predictors. For example, all separate dimensions of EI are included to exclude interrelating effects from the results, this requires the multiple regression analysis.

Regression analysis, in contrast to the correlation analysis, tests for a linear relationship. It tests the relationship between a response or dependent variable and one or more predictors, also called independent variables (Chatterjee & Hadi, 2006).

In every regression analysis, all dimensions of the independent construct are included

together with all control variables shown in table 4. Results from the regression analysis with regards to the control variables are not mentioned. All items were also tested on the

multicolinearity problem, for which the ‘value inflation factor’ or VIF was measured. The cut off value for multicolinearity is often set at 5 or 10 (Craney & Surles, 2002). As no VIF value above 2,5 was found, the multicolinearity was not a relevant problem for the results of this research.

The tables with the results will both indicate the ‘B’ and ‘β’ (or Beta) values, although they are fairly similar, their function’s relevance differs. They both indicate the expected increase or decrease in standard deviations of a dependent variable when a single independent variable is changed with one standard deviation, holding the other independent variables equal

(Nathans et al., 2012). For the B-value, the scaled increase is termed in its original metric. The beta-value is scaled in terms of a standardized metric, which means that it is more comparative with the other independent variables (Nathans et al., 2012). This implies that when more than one independent items is found to have a significant influence, the beta-value indicates which of the independent variables is relatively more important in

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4. Results

This chapter will show the results following from the data analysis. The discriptives are discussed first. The second section contains the actual analysis of the results. Most of the results are grouped in tables and show significant results only due to the large amount of data.

4.1 Descriptives

This section contains the descriptives on the constructs used to answer to test the propositions and answer the research question. Descriptives on importance of success criteria are shown in table 8. Personal satisfaction was seen as most important criteria for success, directly

followed by autonomy. Results show that financial results are seen as least important criteria for success, which is in accordance with research by Walker & Brown (2004) and Gorgievski (2011). Business owners were most divided about the importance of pride in running their business, followed by financial considerations. Personal satisfaction was not only the most important success criteria, business owners were also least divided on the importance of this criterion. Success criteria that have close means can be too similar, which means that they are more or less the same. Paired-samples t-test was used to test whether items differ

significantly (two tailed). Social responsibility is found to differ from both flexibility (sig. = ,017) and pride (sig. = ,028). Pride did not significantly differ from the valuation financial criteria (sig. = ,333) with a correlation of ,192. Personal satisfaction and autonomy are not significantly different as well with a correlation of ,559 (sig. = ,101).

Table 8: descriptives on the importance of success criteria to business owners Success criteria N Mean SD Min Max 1 – 2

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The results on emotional intelligence are clear. About three quarters of the business owners shows confidence in emotional abilities when assuming that a score of 4 or higher would reflect this. Almost no business owners were dissatisfied with their emotional abilities. All abilities were rated closely to each other, being aware of the feelings that go on in oneself is perceived as most easily done, whereas perceiving and understanding emotions in others is perceived as hardest part of managing emotions. These items seem that scored pretty close with regard to their mean score, and are tested on whether they differ significantly from each other. Self-awareness is related to motivation (correlation = ,111, sig. = ,735) and social skills (correlation = ,408, sig. = ,565). Motivation does not differ from social skills (correlation = ,143, sig. = ,906). regulation is found to differ from empathy (sig. = ,023).

Self-awareness was similar to social skills as well (correlation = ,408, sig. = ,565).

Table 9: descriptives on Emotional intelligence EI dimension N Mea n SD Min Max 1 – 2 (%) 2.1 - 3 3.1 - 4 4.1 - 5 5.1-6 Self awareness 154 4,53 ,51 3,11 5,33 - - 20,8 66,2 13 Self-regulation 154 4,36 ,63 1,83 5,83 ,6 2,6 26,7 63 7,1 Motivation 154 4,50 ,57 3,17 6 - - 27,3 61,7 11 Empathy 154 4,21 ,58 3 6 - - 40,9 53,8 5,2 Social skills 154 4,49 ,54 1,57 5,86 ,6 - 20,8 66,3 12,3

The results on the success of the business owners show similarities with the relative

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to employee satisfaction was not significantly different from autonomy (correlation = ,087, sig. = ,379) and flexibility (correlation = -,089, sig. = ,119).

Table 10: descriptives on successfulness of the business owner Aspect of

successfulness

N Mean SD Min Max 1 – 2 (%) 2.1 - 3 3.1 - 4 4.1 - 5 5.1-6 Financial 154 3,57 ,80 1 6 3,3 24 44,7 26,7 1,3 Autonomy 154 4,55 ,63 1 6 6 10,7 26,7 38 18,7 Pride 154 4,50 ,63 2,25 6 - 3,3 21,4 63,3 12 Flexibility 154 4,23 ,75 2 6 - 6,7 36,6 50,7 6 Social responsibility 154 4,18 ,88 1 6 2 8,7 33,3 49,3 6,7 Personal satisfaction 154 4,72 ,74 1,5 6 ,7 2 22 56 19,3 Stakeholders 154 4,59 ,66 2 5,83 ,7 3,3 13,3 62,7 20 Stakeholders - clients 154 4,69 ,72 1 6 1,3 2 20,7 62,7 12,3 Stakeholders – Empl. 150 4,41 1,17 1 6 9,3 2,7 14 62,7 11,3

This research uses many different control variables, this makes the large amount of data gathered more reliable. Six different standard demographics are analyzed (age, gender, sector, employees, turnover, education) and these are complemented with additional demographics (children < 14, children >14, health status, managerial experience, sectorial experience, experience as CEO, family business or not) specifically applicable from small business literature (Storey & Greene, 2010). In Appendix B the results of a correlation analysis of all demographic factors in relation with other items is shown. The number of significant relationships is limited.

Now that correlations are established, a regression analysis was made. Few significant relations are found. Gender has a relation to the importance of the pride success criteria, women are found to value pride considerations significantly higher than their male

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4.2 Analysis of results

The goal of this thesis is to confirm of disconfirm the propositions. With the data collected, the three constructs that were included in the research questions have been measured. The analysis starts off with a correlation analysis of all three constructs and their sub-dimensions. Afterwards, regression analysis will be used in order to test for relationships.

To start off with, regression analysis was conducted with the control variables. A limit number of significant relations was discovered. Some of the most interesting findings are discussed below. On emotional intelligence, women score significantly higher on

self-regulation (β: ,188, sig. = ,023), empathy (β = ,181, sig. = ,027) and social skills (β: ,250, sig. = ,002). Emotional intelligence in total was significantly higher in women (β: ,232, p = ,004). Other demographics did not have significant relations with emotional intelligence.

With regards to the success criteria it was found older business owners value flexibility as less important (β: -,182, p = ,028). On the successfulness of the business owners, age showed a negative relation with financial satisfaction (β: -,088, p = ,047).

Women were found to be more proud of their business (β: ,223, p = ,005) as well as satisfied (β: ,202, p = ,012). Business owners that had previous experience with running a business were performed worse financially (β: -,191, p = ,025). Finally, it is interesting to note that education has a negative relation with the number of employees (β: -,174, p = ,041).

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Table 11: Simple regression analysis with emotional intelligence as independent variable

Dependent variable Coefficients Anova Variance

B Sig. F Sig. Adjusted R²

Success Criteria Social responsibility ,607 ,001 2,564 ,002 ,180 Flexibility ,730 ,000 2,083 ,013 ,132 Autonomy ,757 ,000 2,839 ,001 ,205 Personal satisfaction ,850 ,000 4,332 ,000 ,319 Pride ,604 ,020 1,279 ,221 ,038 Financial ,032 ,872 1,907 ,025 ,113 Success dimensions Social responsibility ,864 ,000 1,985 ,018 ,121 Flexibility ,112 ,509 1,777 ,041 ,098 Autonomy ,936 ,001 1,821 ,035 ,103 Personal satisfaction 1,179 ,000 5,112 ,000 ,364 Pride ,616 ,000 2,335 ,005 ,157 Stakeholders ,613 ,000 2,122 ,011 ,135 Stakeholders - customers ,720 ,000 2,573 ,000 ,180 Stakeholders - employees ,621 ,029 2,475 ,003 ,173 Financial ,432 ,022 2,623 ,001 ,184

Table 12 shows the results with regard to the first proposition : the effect of emotional intelligence on the criteria that business owners hold for success. Every dimension of emotional intelligence influences the importance of a certain criterion for success. The importance of flexibility and financial results is not being influenced by emotional

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Table 12: significant results from multiple regression analysis per success criterion Independent variable (EI dimension) Dependent variable (success criterion)

Coefficients Anova Variance

B β Sig. F Sig. Adjusted

R² Social skills Social

responsibility ,383 ,279 ,014 2,565 ,001 ,214 None Flexibility - - - 1,648 ,053 ,101 Self-awareness Autonomy ,281 ,209 ,042 2,226 ,004 ,175 Self-regulation Empathy Personal satisfaction ,315 ,225 ,302 ,204 ,002 ,049 3,569 ,000 ,308 Motivation Pride -,458 -,253 ,010 1,670 ,049 ,104 None Financial - - - 1,597 ,065 ,094

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Table 13: Significant results from multiple regression analysis on successfulness Independent variable (EI dimension) Dependent variable (successfulness)

Coefficients Anova Variance

B β Sig. F Sig. Adjusted

R² Social skills Social

responsibility

,439 ,274 ,022 1,837 0,24 ,126 Motivation Flexibility ,294 ,215 ,027 1,746 ,035 ,114 Social skills Autonomy ,610 ,301 ,013 1,699 ,043 ,107 Self-regulation Motivation Social skills Personal satisfaction ,294 ,288 ,611 ,237 ,210 ,449 ,006 ,006 ,000 5,710 ,000 ,448 Motivation Pride ,301 ,274 ,003 2,322 ,003 ,185 Social skills Stakeholders ,536 ,450 ,000 2,402 ,002 ,194 Social skills Stakeholders -

customers

,451 ,369 ,001 2,448 ,002 ,200 Social skills Stakeholders -

employees ,801 ,376 ,001 2,590 ,001 ,218 Motivation Empathy Social skills Financial ,406 -,382 ,318 ,280 ,275 ,221 ,001 ,008 ,035 3,831 ,000 ,328

Although the data on the different dimension provides deeper insight in how emotional intelligence can influence the importance of success criteria as well as the success in achieving these criteria, not all dimensions of EI were found to be significantly different as can be seen in the descriptives section.

5. Discussion

In this section, some general findings will be discussed, afterwards both propositions are discussed and are either confirmed or disconfirmed. Together, these propositions are necessary to answer the research question, which is discussed in the next chapter. The

findings will be related to literature when possible. This is kept at a minimum, because of the extensive reasoning, which would require almost a replication of what has been discussed in the theoretic framework. Some general findings on the descriptions will be discussed first. With regard to the importance of success criteria, business owners value their own

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explanation is that business owners think that freedom that comes with running one’s own business is that which is needed for personal satisfaction. When the business owner would not feel autonomous he will likely feel similar feelings he will have when working under a boos who dictates what to do.

Both financial and pride criteria for success were rated as least important to business owners. In addition, these types of criteria were found to do not differ statistically. This interrelation can be explained by the fact that financial success is an objective and hard measure (Gibb & Davies, 1992) and can thus be observed by other people. Pride is about gaining recognition from other people (Buttner & Moore, 1996). This requires other people to see results before they will recognize one’s success. This is most easily done by observing hard, and thus financial, measures. So, these business owners need financial results in order to get recognition, which is needed to feel proud.

The dimensions of EI are found to be quite similar, and several interrelations were found between these items. This is in accordance with Goleman (2005) who states that the dimensions of EI are interrelated. But as these items are so similar, future researchers will need to develop these dimensions in order to become totally separate from each other. With regard to success, non-financial dimensions clearly had more positive outcomes than financial success, from the business owners’ perspective. They were most positive about the satisfaction they derive from running their business. Now, in order to answer the research question, the propositions are discussed.

5.1 Proposition 1

The first proposition that was built based on the literature review was:

“The emotional intelligence of the business owner influences the relative importance of different criteria used to evaluate his or her success”

The relationship of emotional intelligence with both the business owners’ criteria for success and successfulness: an empirical analysis

Master Thesis Business Administration – Small Business & Entrepreneurship