Abstract
The aim of this study is to highlight on the role of rural family leadership in the development of herbal entrepreneurship. Majority of the Malay entrepreneurs failed in the development due to lack of entrepreneurial leadership. This is a qualitative exploratory research using phenomenology approach as it gave an in-depth explanation on the issues regarding rural Malay family-based herbal entrepreneurship development. This study was conducted in Forest Research Institute Malaysia (FRIM) during a herbal products promotional exhibition at Putra World Trade Centre (PWTC) with eight rural Malay herbal entrepreneurs in different highly populated Malays state of northern peninsular Malaysia namely, Kelantan, Kedah, Pahang, Perlis and Trengganu. The result showed family leadership is the major factor for the development of rural Malay herbal entrepreneurship and also suggested that the herbal development planners, government authorized agents need to focus on issues such as education, training, financial resources for development of rural Malay family based herbal entrepreneurship.
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33.1 Introduction
Leadership is involved in every sector such as politics, large and small scale enterprises, institutions and other sectors. As a result the development of a country always depends on good leaders. Most of the developed and developing countries have changed their country economy through good leadership like Dr Mahathir (Malaysia), Nelsen Mandela (South Africa), Indira Gandhi (India). Therefore, the government of Malaysia is trying to increase the number of successful good leaders in every sector and approved more fund annually. Family leadership of rural entrepreneurship development is another economy growth engine in Malaysia. However, until today researchers have given little attention to this field (Afsaneh and Zaidatol 2010). Rural entrepreneurship development is a main national development strategy in many developed and developing countries in the world. Many scholars, academicians, researchers, government policy makers, economists believed that rural entrepreneurship is the main area for rural development and country economy growth. But previous study showed, only larger firms which contribute the country growth and quality of life. Now, it has been changed when many developing countries like Malaysia, China, Korea, Japan Taiwan and India have developed their economy through rural entrepreneurship development (Paul 2013). As a result, the government of Malaysia is increasing the annual budget for rural entrepreneurship development. So, general entrepreneurship is gradually developing but Malays contribution in this sector is very low relatively compared to other ethnic groups like Chinese (Hamidon 2009). Therefore, the government of Malaysia is trying to increase the number of successful Malays entrepreneurs and provide them full support as they need.
Herbal entrepreneurship is also another one of the economic growth engine for country development (Murray 2011). Third Natural Agriculture Policy in 1998–2010 has identified herbal products industry as new and future industry group. Malaysia herbal industry estimated market value is RM7.97 billion (Abu Kasim 2007). In 2003, Abdul Aziz mentioned that herbal products growth Malaysian has changed their life style emphasis on health and growing cost of the synthetic medicines.
Herbal entrepreneurship in rural area is managed mostly by Malay community for long ago as their family-based entrepreneurship. These all entrepreneurs operate it either in low-cost shop lots or in houses. Currently, 13 ministries and 52 government link companies are providing all facilities as their need such as training, education, financial support and sales promotion all the time. Excellent tropical climate, increase research and development activities tremendously increase herbal natural products demand and potential size of herbal based market (Ibrahim 2006; Jamai 2006). However, until today majority of rural Malays herbal entrepreneurs are facing numerous problems including shortage of raw materials, very limited large-scale cultivation activities, technology, skilled manpower and financial constraints (Hawa 2011; Viduriati et al. 2012; Nordin et al. 2008; Paul 2013) and lack of entrepreneurial family leadership. Despite all critical problems, there is lot of opportunities for development of herbal products in future (Ismail and Sulaiman 2007; Ellitan 2002). The research data showed there is a huge potential Malaysian herbal market but the involvement of Malay herbal entrepreneurs is still very low and at present performance of their entrepreneurship in its infancy stage relatively to Chinese and other ethnic groups in Malaysia.
33.2 Literature Review
Rural entrepreneurship plays a national development role in many countries like Korea, Japan, India, Malaysia and China. According to the Rural Poverty Report, 2001, 75 % population of the world in the poverty level and more than 1.3 billion people lived in poverty. In rural places, about 900 million peoples of the world are residing in rural village and these people are completely depended on agriculture and similar activities for their livelihoods. Rural entrepreneurship is a vital element of productivity and growth (Baumol 1993). Previous study showed that a strong positive relation between economic activity and performance (Zacharakis et al. 1999). Therefore, the present global world plays a number of critical roles for country economy development (Schumpeter 1934) of developed and developing countries through rural entrepreneurship. Rural entrepreneurship is inadequate infrastructure, low education, unskilled workers, very low income and culture not supportive for entrepreneurship development (Kulawczuk 1998). Fostering entrepreneurship create wealth and employment and the quality of life of rural populations (FAO Corporate Document Repository 1997).
The literature review indicates that rural entrepreneurship has received little research attention. Therefore, it is useful and timely to conduct studies on rural entrepreneurship development.
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Education and knowledge and training
Human capital in rural entrepreneurship is directly involved in knowledge, education and also training to the rural herbal entrepreneurs. The main contributors of the entrepreneurs is low education is low to the growth ratio of country economy between urban and rural regions. Education always developed quality human capital and it is important for every rural entrepreneur to develop their entrepreneurship (Florida 2002; Paul 2013). On the other hand, rural development through entrepreneurship depends on technically strong people with human capital knowledge (Malecki 1997; Petrin and Gannon 1997).
The training programs involve not only in rural herbal entrepreneurship development, agriculture or other fields. But training program on various strategies and agriculture technique promote to identify opportunities in rural regions (Lohmoller 1990).
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Social Network
The social network theory is recognized the entrepreneurial opportunities and entrepreneurial pursuits (Hills et al. 1999). The benefits of social networks for entrepreneurs of their entrepreneurship developments are information, customers, suppliers and others resources (Aldrich and Zimmer 1986). The development of rural Malay family-based herbal entrepreneurship is a necessity through social network (Dabson 2005).
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Family Entrepreneurial Behavior
Basically, family-based entrepreneurship is lacking of conceptual and theoretical definition (Vought et al. 2008). Most of research scholars are using social cognitive theory as conceptual frame work for entrepreneurship development (Hamidi et al. 2008; Kickul et al. 2008; Krueger et al. 2000). The main characteristics of this theory is a person behavior, environment and belief. As a result, researchers used the social efficacy theory to define entrepreneurial efficacy individual belief of their abilities to become successful entrepreneurs. Despite the numbers of literature related to entrepreneurship development but till now limited information on rural family-based entrepreneurship development (Afsaneh and Zaidatol 2010).
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Family leadership for Entrepreneurship Development
From the literature point of view many studies were conducted in entrepreneurship in different areas but only few researchers look into family based entrepreneurship (Aldrich and Cliff 2003). Based on entrepreneurship definition, the leadership of rural entrepreneurship is a challenge to become successful entrepreneurs. Generally, family based leadership for rural entrepreneurship is very important for entrepreneurship development because of limited information particular this area.
33.3 Methodology
The purpose of the qualitative phenomenology research study was to explore the individual’s personal experience of rural Malay family-based herbal entrepreneurship development. For the purpose of the study presented here, only rural Malay herbal entrepreneurs who had been in family-based entrepreneurship for minimum 8 years were included in the data analysis. A qualitative phenomenology approach was chosen for this study. According to Creswell (2005), qualitative is appropriate when ‘the problems of the research need to explored in a deeper understanding’. Qualitative is also most appropriate when the researcher does not have specific variables to explore but rather is seeking to explore why or how something occurs (Creswell 2005).
The specific method of data collection and analysis, phenomenology is a research method that helps the researcher to gain the fullest insight into a person’s lived individual experiences (Goulding 2005). Through the researcher interviewing respondents and ultimately transcribing and analyzing results, themes are uncovered. The research scholar, Goulding described through process of writing and rewriting the researcher gains additional perspective and insight into the research phenomenon. For this study, the researcher considered other qualitative research method approach like ethnography, grounded theory, and case study but the aim of phenomenology is uncover phenomenon through the exploration experiences, which is more applicable for understanding the lived experiences of rural Malay family-based herbal entrepreneurs (Priest 2002). The scholar described ‘peoples who have lived the reality of the subject being investigated provide only legitimate source of data through which the researcher can access this reality. The purposive sample of the rural Malay herbal entrepreneurs provided the research sample required for understanding characteristics identified as important to entrepreneurial success.
The eight informants selected for the research was Malay entrepreneurs who have started the herbal entrepreneurship for at least 8 years from five state of Penisular Malaysia namely Kelantan, Kedah, Pahang, Perlis and Trengganu. The informants were identified through a herbal promotional exhibition location in Peninsular Malaysia. The purposeful sample used allowed the researcher to’ intentionally select individuals and sites to learn or understand the central phenomenon (Creswell 2005). The selection of rural Malay herbal family-based herbal entrepreneurs who have been operating their entrepreneurship for at least 8 years yielded insight the theme of the characteristics shared by entrepreneurs. Sanders wrote in the year of 1982, ‘The person to be investigated are those who possess the characteristics under observation or those who can give reliable information on the phenomenon being researched’. Sanders mentioned that researchers using a phenomenological approach do not necessarily need large number of respondents lead to an improvement qualitative research. The scholar also suggested that a researcher conducting a phenomenological study should take in-depth interviews with a small number of respondents in order to keep the process effectively. The research focused on gaining interviews with eight rural Malay family-based herbal entrepreneurs and gradually analyzed the data. Interviewing of respondents continued until the achieved theoretical saturation point.
In a phenomenological study, the researcher need to ensure that respondents have life experiences that are reflective of data required for collected information from the respondents are reliable (Sanders 1982).
A researcher conducting a phenomenological study relies on data taken directly from the respondents through their self described views and experiences (Goulding 2005). For phenomenological research study need small number of respondents to get the potential data through in-depth interviews (Sanders 1982) and until reach the theoretical saturation point, no new themes emerged in the research process.
Phenomenology approach is used to collect data and understand a phenomenon based on a person’s everyday life experience (Priest 2002). According to (Byrne 2001), ‘as qualitative researchers, phenomenologist must follow an organized approach to answering their research question’. In general, most of the interviews for the study were tape recorded from starting to end by the researcher and transcribed the collected data within 48 h of the interview.
Sanders mentioned in the year of 1982, for phenomenology study interview transcriptions are critical relatively other qualitative research approach. Tape recording and transcribing the interviews ‘permits the interview probe systematically and in-depth without the distraction of note taking’. The phenomenological study researchers are concerned with probing selected issues at length, capture respondent precise words and finally experience for analysis the data. Interview for the study to the respondents on average an hour to half an hour as long as researcher decided data is saturated.
According to Priest (2002) that individual life experience respondents are fit phenomenological study. “So, respondents need to have lived the reality of the subject being investigated”.
The researcher’s role is to discovered the essence through interpretation of the rich, textual data provided by respondents describing the particular experience being studied’ (deMarrais and Tisdale 2002). The process of data analysis the researcher develops the deeper understanding of the phenomenon under this study. A transcendental phenomenological study in 1994 by Moustakas mentioned that the respondents lived experience related to the phenomenon for development of rural Malay family-based herbal entrepreneurship.
Any qualitative research need to understand meaning data from the respondents create interpretation. “Qualitative approach research data cannot be tested for ‘validity’ but using criteria based on objective of the study reality”. Analysis of the collected research data the researcher transcribed all data maximum 2 days time and reviewed the data for accuracy and consistency. At the end of data collection from the field asked the respondent to verify accuracy of their given interview data. From the direct check with the respondent which will add to the dependability of the study.
Validity and reliability of the study ensure that provides data meaningful information the data which is free from errors for analysis and collection (Creswell 2005). For any qualitative research studies validity and reliability depends on member checking technique after data analysis or triangulation (Creswell 2005). But the qualitative researcher, Priest (2002) suggested for validity and reliability in phenomenological research need to evaluation the result, acknowledge subjective judge and additional verification from respondents. On the other way to enhance validity to do audit trail, identify personal bias, and also carefully established the accuracy of all data (Priest 2002).
33.4 Result and Discussions
For analysis purpose of interview data, it was started with the coding process. The transcribed interviews were read all in order to locate the relevant segments. From the data identified the category as their similarities. The details of the eight respondents’ information are stated below.
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Respondent 1 (R1): Puan Haslinada is 45 years old, the owner of the Malay family-based small scale herbal manufacturer “A” in Kelantan. She got here primary education from here born place, in Kelantan. It is their family business started in 1960 with capital RM200 and now capital increased to RM500K. At present, the company is running with 15 workers producing 15 products. The main products are food supplementary and cosmetics. The product has been selling only locally and can’t go international market because of no GMP (Good Manufacturing Practice) facility at their manufacturing outlet. Monthly sales are around RM100K at present. They have no social network to sell directly to the different drug stores, through only online marketing and government support promotional sales in different locations. The owner of the company is hard working and has a strong experience to develop family business. For financial constraints, technical knowledge know how and new rules by the Ministry of Health to follow GMP guidelines they can’t develop the entrepreneurship.
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Respondent 2 (R2): The entrepreneur’s age is 47 and started it in 1989 by the name “B” of his home town Kelantan. This company is running by their all family members until now. They limited budget for the monthly expenditure because of limited capital to run this business. The owner has a strong leadership credibility to smoothly develop it. Therefore, they are sales gradually increased every month. For lack of education, lack of technical knowledge on product development and financial problem they need government support to become a successful rural Malay herbal entrepreneurs.
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Respondent 3 (R3): The herbal family enterprise was established in 1999 at Kedah in his village by the name of “C”. It is their family business and all are surviving from it income. At the age of 20 he took over this after his father passes away. They are sales only monthly RM50K with five products. “In our family now no family leader to run this and we need entrepreneurial leadership development skill through government training program and also want support finance, technical management immediately to development entrepreneurship. Other ways we have to closed down our family generation business permanently and look for job in near future”. Finally, we are not happy with the government new GMP guidelines for production because we all hand to mouth rural herbal entrepreneurs.
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Respondent 4 (R4): Mr ‘X’ hold his business degree in 1990 and from his family saving income to established this herbal business 15 years before in his village under the state of Kedah. They have four products and monthly sales around RM65K. All family members are involved in this family business. For their lack of social and marketing knowledge they are fully depend on on-line internet marketing and government supported promotional sales. He say “as professional I already make business development plan but we need badly strong support from our government such as financial facility, training on manufacturing knowledge. Then I can run my entrepreneurship as my development plan”.
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Respondent 5 (R5): He started his business since 1986 in Kedah by the name “F”. The owner is now very happy with his present business growth after long time struggle to develop it. With the help of government link company (GLC) this company last year received RM100K loan from bank. There sales now RM90K and total operation team five. They want to development their production l, business management and entrepreneurial leadership skill from governmental support.
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Respondents 6 (R6): In the year 1980, Mr ‘Y’ established entrepreneurship business in Perlis. All family members are involved in this family herbal business. In 2010, monthly sales RM60K but now increased to RM85–RM90 with three products namely food supplementary, diabetics and cosmetics. My father was a community leader in our village but never keep record business. As a result, we can’t check business performance. We have not enough capital to buy raw materials and others necessary items timely. Sometimes my father production made slow though our products was demand in our community. We try so many ways get financial support but no one help us. This year, took loan with interest from a friend and now bit growing our business. We need full support for our human capital development and entrepreneurial leadership immediately.
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Respondent 7 (R7): In 1983, Mr K was established this herbal enterprise at his village under the state of Trenganu with the capital of RM550.00 from family members saving money. Now capital increased to RM200,000.00 and total sales monthly from RM70 to RM90K. All family members are running this business since long time. They said “We are not following current GMP guidelines as small entrepreneurs and producing our products manually”. Until today, only few rural Malay herbal follow the GMP instruction and remaining all own plan operating it since long. But government also understand our problem because they can’t provide us financial resources and others critical technological barrier. We need full support at least certain year for our herbal entrepreneurship development, other ways will be reduced our total entrepreneurs day by day. Finally, lot of unnecessary guidelines from different organization so called GLC and government approved agents make us confused because we are rural entrepreneurs are lack of education.
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Respondent 8 (R8): Mr “L” was born in Trengganu and established his enterprise in 1978. It is one of the oldest Malay herbal entrepreneurs in respondent interview list. Entrepreneur told that 95 % peoples are Malay but only few successful entrepreneurs and most of the owner facing lot of problem since long time such as finance, technology, operation management. Our products can’t sale directly any drug store for lack of marketing knowledge and low standard product. Sometimes even we supplied but payment very late. That’s why we always depend on social media and government supported sales. It is our Malay community biggest barrier that we can’t do implementation anything for lack of finance. We want back up from government mainly finance and training at least certain years like Bangladesh.
Based on the respondent’s data the seven common factors were identified for the lack of entrepreneurship development; (1) Attitude and mindsets, (2) Lack of competitiveness of sustainability, (3) Lack of entrepreneurial culture, (4) Lack of cooperation and networking, (5) Lack of entrepreneurial leadership, (6) Lack of financial support, (7) Government policy.
33.5 Conclusions and Recommendation
In conclusion, the study integrated the causes for the development rural Malay herbal entrepreneurship. The finding of this study showed that internal and external factors contributed to the lack of development among rural Malay family-based herbal entrepreneurs. The internal factors are negative attitude and mindsets, lack of entrepreneurial culture and leadership among community, lack of social networking and non-cooperation among Malay and fear of failure. On the other hand, the external factors are lack of sustainability and competitiveness among Malay family-based entrepreneurship, lack of financial resources and finally government policy.
The findings identified that government of Malaysia and others government link companies, has made plans to promote the rural Malay herbal entrepreneurs in development but until today successful ratio is very low as majority population compared to other ethnic groups. It is understood the main cause for development is inadequate financial support, strictly guidelines to follow GMP for production and government policy. In addition of this study was also identified that if Malay herbal entrepreneurs do not change their psychological behavior as entrepreneurs then they will lagging behind gradually. Finally, the government needs to modify current rules to help direct rural Malay family-based herbal entrepreneurs. The above steps the government of Malaysia were taken then rural Malay herbal entrepreneurship will develop rapidly and gradually the increase the number of successful herbal entrepreneurs in future.
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Paul, K.C., Hamzah, A., Samah, B.A., Ismail, I.A., D’Silva, J.L. (2015). Family Leadership for Development of Rural Malay Herbal Entrepreneurship in Malaysia. In: Erçetin, Ş., Banerjee, S. (eds) Chaos, Complexity and Leadership 2013. Springer Proceedings in Complexity. Springer, Cham. https://doi.org/10.1007/978-3-319-09710-7_33
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