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International Journal of Business

Management & Research (IJBMR)


ISSN 2249-6920
Vol. 3, Issue 3, Aug 2013, 1-8
TJPRC Pvt. Ltd.

THE IMPACT OF EMOTIONAL INTELLIGENCE ON THE GROWTH OF


ENTREPRENEURSHIP
NUZHATH KHATOON
Assistant Professor, Padala Rama Reddi College of Commerce and Management, Hyderabad, Andhra Pradesh, India

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

KEYWORDS: Emotional Intelligence, Entrepreneurial Performance


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

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

An individual attitude towards society

A level of social knowledge

An individuals degree of social adjustments

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

Nuzhath Khatoon

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

Intelligence could be operationalized as a set of abilities.

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

Abilities should develop with age and experience.


From these three criteria [ Mayer, Caruso& Salovey 1999] developed the Multifactor Emotional Intelligence

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

The Impact of Emotional Intelligence on the Growth of Entrepreneurship

Table 2: MSCEIT Version 2.0 Scale


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

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

Nuzhath Khatoon

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

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

OBJECTIVES OF THE STUDY

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

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

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

EI Components
Personal Competence

Self Regulation

Self Motivation

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

Scores
194
162
217
160
222
187
189
214
214

Average Score
191

194

211

The Impact of Emotional Intelligence on the Growth of Entrepreneurship

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

1. Social Awareness

2. Social Skills

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

165

181

Table 5: Paired Sample Test of EI Score with Age

Pair 1

Total EI Score
Age

Paired Samples Statistics


Mean
N
Std. Deviation
91.3800
50
3.81132
35.28
50
5.707

Std. Error Mean


.53900
.807

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

Mean
Total EI Score Age

56.10000

7.17208

1.01429

54.06172

58.13828

df

Sig. (2Tailed)

55.310

49

.000

Table 7: Correlation of EI Score with age


Correlations

Total EI Score

Age

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

Total EI Score
1
50
-.100
.491
50

Age
-.100
.491
50
1
50

Table 8: ANOVA Test of EI Score and Age


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

F
2.217

Sig.
.120

Nuzhath Khatoon

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

Male
Female
Total

Mean

Std.
Deviation

37
13
50

92.4595
88.3077
91.3800

3.09654
4.09033
3.81132

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

Minimum

Maximum

87.00
83.00
83.00

98.00
97.00
98.00

Table 7: ANOVA Test of EI Score and Gender

Between Groups
Within Groups
Total

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

F
14.579

Sig.
.000

Table 8: Correlation between EI Score and Gender


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

Sex
-.483**
.000
50
1
50

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

Monthly Turnover
.748**
.000
50
1
50

The Impact of Emotional Intelligence on the Growth of Entrepreneurship

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

N
50
50

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

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

Growth
Percentage
.594**
.000
50
1
50

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

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

REFERENCES
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Argun, A.E.H,Kesin & J.Byrne (2008). The moderating role of environmental dynamism between firm emotional
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2.

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3.

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

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

5.

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

Nuzhath Khatoon

6.

Boyatzis (2001) How and why individuals are able to develop emotional intelligence in C. Chernis and D.
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Cross B and A. Traveglione (2003) The untold story: Is the entrepreneur of the 21st Century defined by
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Dulewiez V. & M.Higgs (2000) Emotional Intelligence: a review and evaluation study; Journal of Managerial
Psychology, 15. 341-372

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Goleman D (1995) Emotional Intelligence New York Bantam Books

10. Goleman D (1998b) Working with Emotional Intelligence New York, Bantam Books
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12. Grewal D, Brackett M.A &Salovey (2006) Emotional Skills as a protective factor for risky behavior among
students Unpublished manuscript
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14. Rhee .K.S. & R.J White (2007) The Emotional Intelligence of Entrepreneur; Journal of Small Business and
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15. Thorndike E.L. (1920) Intelligence and its Uses; Harpers Magazine; 140, 227-335
16. Thorndike.R.L & Stern. S. (1937) An Evaluation of the Attempts to measure social intelligence; Psychology
Bulletin-34; 275-284

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