Entrepreneurship is one of the most important economic growth and development factors of countries. The mechanism of entrepreneurship and its effects on the performance of countries are less known (Thurik and Wennekers,
2004). Entrepreneurship creates new opportunities for entrepreneurs to increase their income and assets. In addition, by creation of new institutions and small and medium businesses, it improves living standards (Henley,
2005). Despite many studies, there is a debate on definition of entrepreneurship and entrepreneur (Davidsson et al.,
2001). In recent years, entrepreneurship has become a term that has been primarily focused by politicians and they refer to its importance, while the entrepreneurship quality and policies have been less focused (Ahmad and Hoffmann,
2008). Sometimes self-employed person by criterion of non-payment of wages by individuals or organizations is considered as entrepreneur and the entry rate of these companies as entrepreneurship (Gartner and Shane,
1995). Bird (
1988) considers entrepreneurship process by focus on the opportunity of a strategic process with the ability to make quick decisions in a changing or flexible environment (Bird,
1988). Ireland et al. (
2003) argue entrepreneurship process is linear and sequential that includes mind of the entrepreneur, management of resources to deal with the situation, creativity, innovation and competitive advantage. People may choose a business different from the one they were socialized into (Chakraborty et al.,
2016).
Review of literature
Many studies have been conducted on entrepreneurship of small businesses, whereas some issues have remained unknown still. Previous studies have provided evidences for distinguishing between self-employment, business ownership, new business creation and entrepreneurship (Urbano and Aparicio,
2016). However, it is just less studies to develop a special index for entrepreneurship of small business in general and particularly in small agricultural enterprises due to the literature. Hjorth and Holt (
2016) focused on social side of entrepreneurship and argue that entrepreneurship is different from enterprise, as the management is not leadership. Although there is an overlapping among definitions of entrepreneurship and creation of small businesses; small businesses are not always entrepreneurship companies and their owners are not always entrepreneurs (Carland et al.,
1984). Small firms are more frequent incubators of entrepreneurs due to less hierarchical. Hierarchy is less prevalent in small businesses and is associated with more frequent transitions of employees into self-employment and entrepreneurship (Tåg et al.,
2016). Reviewing previous studies, it is required to improve and develop the measurement methods of entrepreneurship and small businesses (Wang et al.,
2015), because there is no comprehensive framework regarding the entrepreneurship process components. Thus, more entrepreneurship studies require for theory development (Davidsson et al.,
2001). In any definition, entrepreneurship is a behavior and a dynamic phenomenon requires the provision of necessary conditions (Cheraghali,
2011). Therefore, it will be desirable to development an index, effective factors and obstacles for entrepreneurship in small businesses.
There is wide literature on small units providing different definitions on this concept worldwide. These definitions vary given the age, demographic, and cultural structures and level of development (Institute for Business Studies and Research,
2005). Since recognizing the importance of small businesses in the 1920s, no comprehensive and single definition has been provided (Talebi,
2007). During the Iran’s civil planning period, only two factors have been considered as the base for defining the small businesses including the number of employees and the small size of capital, as determining criteria for recognizing the size of small manufacturing workshops and distinction from medium-sized and large industries.
Based on the definition provided by Ministry of Cooperatives of Industries and Mines of Jihad Agriculture, small and medium-sized enterprises are industrial and service units with fewer than 50 workers (Unidro,
2003). The Ministry of Cooperatives also uses the definitions of the Ministry of Industries and Mines and Iran’s Statistics Center on these industries. The Iran’s Statistics Center classified businesses into four categories: businesses with 1 to 9 workers, businesses with 10 to 49 workers, businesses with 50 to 99 workers, and businesses more than 100 workers (Iran’s Statistics Center, 2005). In some countries, in order to define the small businesses, other indicators such as level of employees, volume of transactions and assets are used. However, according to the Iran’s Jihad Agriculture Organization, the most important indicator for defining the size of small and medium-sized enterprises (SMEs) is the number of employees (Ministry of Jihad Agriculture of Iran,
2018).
There is lack of evidence in definitions provided regarding the philosophy of small industries reflecting the quality importance of small ones in the Iran’s industrial development. However, specific definitions of small industry organizations vary from one organization to another and they are subject to different and sometimes contradictory rules and regulations when implementing a small nosiness unit (Sahraeian,
2001).
The Ministry of Agriculture Jihad considers the small agricultural businesses as agricultural activities in the fields of production, packaging and, in general, various agricultural activities, including livestock breeding, fish farming, etc., in which real and legal people, after completing steps and obtaining licenses, are allowed to carry out such activities within the limits specified by the organization itself. The license for establishment of Jihad agriculture is a prerequisite for obtaining a license for Agriculture Jihad exploitation. Some of these activities include the production and processing and protection of meat products, the processing and protection of the corruption of aquatic animals and aquatic products, the processing and protection of the corruption of fruits and vegetables, extracting the essential oils, dairy products, drying corn, powder of vegetables and fruits, processing rice, conversion industries related to various types of fruits, vegetables, tea and products derived from egg of birds and other animals, cleaning, grading and packaging of legumes, seeds and natural honey, production of prepared foods for animals without any concentrates and food supplements, fertilizers, different conversion industries of dates, types of plant essences and extracts (Ministry of Jihad Agriculture of Iran,
2018).
The entrepreneur and quick impact enterprises project in Iran with the aim of fair distribution of resources, increasing non-oil production and exports, and enhancing entrepreneurship, job creation and increasing new job opportunities was approved by Council of Ministers in the fall of 2005 and was implemented in the winter of the same year (Mostofi and Abbasi,
2010). Based on the report of the Islamic Consultative Assembly Research Center, this project and other similar ones have not been successful (Azhdari,
2012). Paying attention to creating more employments by establishing new enterprises rather than maintaining them, neglecting the withdrawal of enterprises from activity cycle has led to the loss of opportunities, so that studies show that most of the small businesses fail in the early years of their establishment (Feyzpour et al., 2011; Azar et al.,
2012; Parsa Pour et al.,
2012). Moreover, about 23% of small units fail in the first year and almost 42% of them fail at the end of the fifth year due to various reasons (Vahdat and Dadashi,
2010).
Small quick impact enterprises in the agricultural sector are often called as entrepreneur units. These questions are always asked: whether small agricultural businesses are entrepreneurs? Would they face these problems if these businesses are entrepreneurs? What is the criterion of entrepreneurship in these businesses? How can they be evaluated? Is the goal of their establishment only to create employment for most of villagers? If goals other than job creation are expected from these types of businesses and what are these goals? What are the factors affecting the development of entrepreneurship in these businesses? Entrepreneur businesses can be identified when we use an appropriate index, so that we can evaluate them based on these indicators as well as developing their entrepreneurship as much as possible. For strategic planning to facilitate agricultural entrepreneurship, paying attention to explain the components of entrepreneurship and structures related to agricultural businesses, such as a complex system, underlying variables and related dynamics is essential (Sharifzadeh et al.,
2009).
However, different studies proposed different factors for entrepreneurship of small businesses. Entrepreneurship personality characteristics, organizational characteristics, management strategies and the influence of external environment are affecting the creation of a successful business (Zaridis and Mousiolis,
2014). There is an agreement between entrepreneurship scholars about the role of individual differences in entrepreneurial process (Ardichvili and Cardozo,
2000; Davidsson and Honig,
2003; Arenius and Clercq,
2005). For example, risk-taking, innovation, independence, competitiveness, and being active include some affecting factors of small businesses performance (Hughes and Morgan,
2007). Based on some other studies, self-efficacy, creativity, commitment, willing to take risks and positive attitude are the main entrepreneurs` characteristics. They had the positive and significant effect on opportunity recognition in the various studies among different entrepreneurs (Kickul et al.,
2009; Wang and Fang,
2012; Hansen et al.,
2011; Gielnik et al.,
2012). The reason seems to be that variables such as personality traits are the vital component of entrepreneurship, not just a specific sector. Only a few of small businesses have been able to achieve sustainable growth in terms of their performance. It should be considered that personality traits are not enough for success and business performance due to the studies (Sidik,
2012). Another factor which has effect on entrepreneurial process is also associated with entrepreneurs’ interpretations about business environment (Tumasjan and Braun,
2012). The results of Wang and Fang (
2012) showed that perception about the industrial environment is the most important predictor of taking risk to create entrepreneurial small businesses. Lee and Wong (
2006) included that environmental factors are among the important determinants of entrepreneurial opportunity creation and development. It should be considered that various enterprises have different space, conditions, and environment. So, determining the environmental factors which are sector-specific would be a good guide for the newly founded enterprises. Considering the environmental factors are even more important in agricultural entrepreneurial enterprises due to the nature of agriculture. Agriculture sector encounter many risks and uncertainties making different condition. Therefore, entrepreneurial process would be affected under such conditions. Environmental uncertainty is a concept that seems to be appropriate for considering specific features of agriculture sector. Regarding to the findings of recent studies, the access of entrepreneurship enterprises to knowledge improves human, social, and organizational capitals (Simsek and Heavey,
2011). According to Arasti et al. (
2014) and Izadi and Rezaei-Moghaddam (
2017), inappropriate business environment and policies, poor management skills, inappropriate financing and pricing strategies are factors affecting failure of entrepreneurship enterprises. The results of Wiklund and Shepherd (
2005) in Australia indicated that the entrepreneurship orientation of the company, access to capital and the dynamics of the business environment are effective in performance of small businesses.
Bidokhti and Zargar concluded that more than 95% of the total manufacturing units in Iran are small and medium-sized enterprises, but they do not have significant contribution in gross national production and creation of value added and suffer from severe deficiencies. The barriers and problems of these enterprises activities consist the lack of adequate knowledge of their needed assistance, lack of financial resources and problems in receiving bank facilities, low specialized workforce and inadequate knowledge and skills of existing workforce. Old machinery, high interest rates of facilities, vagueness of some business and commercial rules, an increase in intermediaries, the wide smuggle of goods to the country, the large number of current foreign competitors in the market, the welcome of consumers from foreign products, the traditional activities in the field of industry and the lack of economic, financial and management knowledge, especially at the establishment time have been reported as problems in this regard (Bidokhti and Zargar,
2011).
Sharifzadeh et al. (
2009) described the development of agricultural businesses as a major strategy for promoting entrepreneurship in agriculture. They discuss that the major structures affecting the development of agricultural businesses are individual dimensions (motivation and economic, social, individual goals, and individual capabilities); business dimensions (production resources management, human resources development, communications and links, market management, business management and job functions in the business); skill learning in business area and supportive environment (institutional, family, and spiritual), business environment and infrastructure, economic, social and institutional macro environment. The results of a study conducted entitled “examining the extent of realization of the goals in quick impact enterprises project”, showed that those who created business through this project did not have acceptable performance in profitability, job creation and production, and the objectives of this project have not been realized (Mostofi and Abbasi,
2010). Based on the results of Sharifzadeh et al. (
2009) showed that many of the small and medium-sized enterprises created in different sectors do not have an adequate level of sustainability in the economic, social and environmental dimensions, and owing to facing various barriers and problems, their growth and survival have been questioned in many countries, including Iran. The study also emphasizes that the environmental, economic, and social values should be considered in the context of a community and system approach in order to have sustainable small businesses.
Studies conducted by Khodamipour and Shafiei (
2013) showed that although a business in the agricultural area may benefit from its business activities in the short run, criteria such as the social behavior of the business, ethical accountability, and the consideration of other stakeholders’ interests, ensure the survival of company (Khodamipour and Shafiei,
2013). In addition, the agricultural work experience of the managers of these businesses, the number of household members of manager, the amount of loans received to establish business, the manager’s education, the manager’s age, the number of workforce employed in the business, the distance from the business location to the city and the area under cultivation had a significant impact on the success of these businesses (Mollashahi et al.,
2014).
Rezaei and Safa (
2016b) realized that despite the importance of small and medium-sized enterprises, as one of the main tools to economic development, these enterprises especially in the agricultural sector of the country, have not been developed desirably and their success rate has been very low. They argue that the factors affecting the development and success of the activities of these types of businesses are the supportive policies, granting of facilities and credits, development of appropriate rules and removing administrative barriers, training the managers of enterprises, and the establishment of effective communication between enterprises.
This paper extends the entrepreneurship concepts by determining special index, effective factors and obstacles for development of entrepreneurship in small agricultural quick-impact enterprises. Small and Medium Enterprises (SMEs) has been raises in last two decades, worldwide. As development of SMEs has become the main economic policies of different countries (Yeh-Yun and Zhang,
2005). SMEs are defined as commercial-productive units which work at small scale (Rezaei and Safa,
2016a). These SMEs are formed based on the four indices of the number of enterprise personnel, whole net properties, sales level as well as enterprise investment (Amin Bidokhti and Zargar,
2012; Soltani et al.,
2012). The 44th principle of Iran constitution made the route easier for the entrepreneurs` activities. These enterprises constitute less than 50 workers and work in agriculture, industry and mine sectors. They should achieve to the production phase in 12 to 14 months, therefore they have named as quick-impact enterprises (Alsadat Aghili et al.,
2013). These enterprises would provide a place for the country development. Considering comprehensive definition of entrepreneurship, this study was conducted to identify the factors and obstacles to entrepreneurship development in quick-impact enterprises in Iran. Providing credible strategy as in order to develop the entrepreneurship process in small enterprises is the main aim of measuring the entrepreneurship components. The importance of index development as well as determining the factors and obstacles in entrepreneurship process are three main areas which have been emphasized in the studies: measuring entrepreneurship; improving the understanding of who is an entrepreneur (Tåg et al.,
2016); determining ideal condition to undertake an entrepreneurial business; presenting a comprehensive definition; identifying potential entrepreneurs (Coduras et al.,
2016); distinguishing between entrepreneurship and other modes of occupation (Crecente-Romero et al.,
2016). Thus, developing entrepreneurship activities index in agricultural quick-impact enterprises answers the question that “what is the goal of entrepreneur businesses.” It provides a framework for assessing and comparing the businesses with each other.