the influence of transformational leadership toward ...

THE INFLUENCE OF TRANSFORMATIONAL LEADERSHIP
TOWARD ENTREPRENEURSHIP CHARACTERISTICS, WITH
SELF-EFFICACY AS THE MODERATION VARIABLE
(A study of Restaurant Employees in Surakarta, Central Java,
Indonesia)
Anastasia Riani Suprapti *)
This study was conducted toward employees of a restaurant in Surakarta, Central
Java, Indonesia. The goal of this study is to examine whether there is a significant
influence among transformational leaderships, and whether self-efficacy moderates
the influences of transformational leaderships in entrepreneurship.
The data in this study were obtained by distributing questionnaires, which later
were used to examine the hypothesis by conducting T-test and hierarchical
regression. This study involves 85 respondents from restaurant employees. In
order to obtain samples, this study uses purposive random sampling technique.
The results obtained from this study are: 1. Transformational Leadership
significantly influences entrepreneurship. 2. Self-efficacy does not statistically
moderate the influence of Transformational Leadership in Entrepreneurship.
A. Introduction
Human resources factors have important influence in the life and progress of an
organization because the achievement of organizational goals highly depends on the
activities of the organization members. In other words, the efforts in developing human
resources are needed in order to achieve the objectives of an organization or institution
(Pullins et al., 2000).
The study of leadership, especially factors and leadership styles, has developed
more than thirty years. However, several issues, among others, about the constructions,
methodological issues and debates about the relationship between leadership and the
other variables still need to be discussed (Yukl, 2006). The development of leadership
issue can be seen from various studies in various fields, such as human resources,
organizational behavior, industrial relations and labor. Those studies are mostly about
testing and discussion of its antecedents and consequences, and debates about
leadership concept in its relationship with organizational effectiveness (Pfeffer, 1977).
However, abilities and leadership skills in organizing are important factors for
managers’ effectiveness. If an organization can identify the qualities which are
associated with leadership, that organization will be able to study various leadership
behaviors. Furthermore, that organization will be able to develop the effectiveness of its
human resources (Handoko, 1999).
So far, there are many studies on leadership which are associated with
entrepreneurship, especially on transformational leadership which is one of the
characteristics of leadership. It is based on the understanding that someone who has
high quality leadership will be able to encourage (influence) other people, make good
decision, take risks, and take strategic steps. All of those qualities support will the
*) Lecture of Departement of Management of Economic Faculty Sebelas Maret University Central Java
Indonesia. Email : rianis2004@yahoo.com

establishment of entrepreneurship (Wiratmo, 1996). A transformational leader will try to
create conducive environment for innovation and creativity development. This is in
accordance with entrepreneurship characteristics.
Previous studies and some existing literatures about the relationship between
leadership and entrepreneurship show varying results. Several studies show that there
are significant relationships between leadership and entrepreneurship. Soriano and
Martinez (2007) state that leadership, especially participative leadership, has significant
influences toward entrepreneurship establishment. Neck, Manz, and Godwin (1999)
also find that the application of effective leadership principals will increase the courage
to be an entrepreneur. Some other researches do not find any significant relationship
between those variables.
According to Peter F. Drucker (1996), leadership does not have direct influence
toward entrepreneurship characteristics (leadership influences entrepreneurship), but it
can be determined by moderation and mediation of particular variables. In order to
understand the contribution of leadership to entrepreneurship clearly, this research tries
to discover further the variables which can moderate the relationship between
leadership and entrepreneurship.
Meanwhile, many researches about entrepreneurship are related to self-efficacy.
It is based on findings of some researches which show that aspiration and
entrepreneurship of a person can be influenced by how that person rates his / her ability
in finishing his / her task (self-efficacy) (Neck, Manz, and Godwin, 1999). According to
Chen, Casper, and Cortina (2001), the ability of a person in influencing other people
(leadership), and the acknowledgement of other parties toward his / her ability will led to
self-efficacy increase.
From the presentation of various issues, debates, and findings of conducted
studies, it is needed to conduct a research about the influence of leadership toward
entrepreneurship and the role of self-efficacy as moderating variables in it. Briefly, the
problem formulation is as follow:
1. Does transformational leadership significantly influence entrepreneurship
2. Does self-efficacy moderate the influence of transformational leadership
toward entrepreneurship characteristics
B. Literature Reviews and Hypothesis Development
Leadership
Studies about leadership and its effectiveness have been conducted by previous
researchers (Pfeffer, 1977; Karmel, 1987; Thomas, 1998; Meindl, 1995 and Yukl, 2006).
Leadership has been defined in various ways by various researchers. According to
Stoner (in Handoko, 1999), managerial leadership can be defined as a directing and
influencing process for the activities of a group of members who have connected tasks.
This definition concerns three important implications.
First, leadership is related to other people, such as subordinates or followers.
Their willingness to accept directions from their leaders will determine the status /
position of their leader and make the a smooth leadership process. Without
subordinates, all qualities of a leader will be meaningless.

Second, leadership is related to unbalance authority distribution between leader
and group members. The leader has authority to direct various activities of his / her
group.
Third, a leader will give directions. Besides, a leader will also use his / her
influence. In other words, a leader can not only direct his / her subordinates, but also
influence his / her subordinates in implementing his / her commands.
Approaches in the Studies of Leadership
Research results and leadership theories can be classified as trait, behavior, and
contingency approach in the studies of leadership. The first approach sees that
leadership is a combination of many characteristics. The second approach is related to
the identification of people behaviors which are related to effective leadership. These
approaches assume that an individual, who has certain characteristics or shows certain
behavior, will emerge as a leader in any situation and any place. Recent thoughts and
researches are more based on the third approach. It is about situational approach on
leadership. This approach assumes that the condition which determines the
effectiveness of a leader is varied according to situations, conducted tasks, abilities,
subordinates’ expectations, organizational environment, etc. Later, this approach
generates contingency approach, which is intended to determine situational factors
which determine the effectiveness of certain leadership styles. Chronologically, those
approaches can be illustrated as follows:
Transformational Leadership
Transformational leadership is a leadership style where the leader can expand
and increase working interest of his / her subordinates. Besides, this leader can also
encourage his / her subordinates in order to be sensitive and accept company’s visions,
missions, and objectives. In transformational leadership system, the leader can explore
the potentials of each employee for the progress of the company (Bass, 1990). Bass
and Avolio (2003) divide transformational leadership in four dimensions:
1. Idealized Influence
2. Inspirational Motivation
3. Intellectual Stimulation
4. Individualized Consideration
According to Robbins (2001), transformational leadership is a leader who can inspire his
/ her employees in order to prioritize the progress of organization from personal interest.
This leader can also notice and encourage employees in order to learn new working
methods / ways.
Entrepreneurship
In a very competitive business environment, the successfulness of a person is
very determined by his / her entrepreneurship. According to Edvardson (in Ciptono,

1999), entrepreneurship is a behavior which is dynamic, risk taking, reactive and growth
oriented; entrepreneurship is a person who is willing to take action to pursue
opportunities in situations others view as problem or threats. The characteristics of an
entrepreneur according to Ciptono (1999) are as follows:
1. Internal locus of control
2. High energy level
3. High need for achievement
4. Tolerance for ambiguity
5. Self confidence
6. Action oriented
7.
General overview of an entrepreneur is a founder of a completely new business
who can develop it to be a widely successful company (Riani et al., 2005).
Entrepreneurship is not limited only for big companies, but also for small companies.
Someone who are willing to take risks to buy McDonalds’ franchise (local), open a
grocery shop, or open domestic industry can also be defined as an entrepreneur.
Generally, economic theories about entrepreneurship state that entrepreneur will
emerge and develop if there is an economic opportunity; for example, an uncertainty
about what will happen in the future is an economic opportunity. Increase or change of
demands for goods and service in the society are also opportunities to create new
product, market, production technique, etc. According to Schumpeter (in Riani et al,.
2005), an entrepreneur is someone who creates new way in organizing production
process. Therefore, an entrepreneur is an innovator of production.
The Relationship between Transformational Leadership and Entrepreneurship
Leadership is related to other people, subordinates, or followers. Their
willingness to accept directions from their leaders determines the status / position of the
leader and makes the leadership process run smoothly. A leader can not only give
directions, but also use his / her influence. In other words, a leader can not only give
commands to his / her subordinates, but also influence them in implementing his / her
commands. According to Soriano and Martinez (2007), leadership, especially
transformational leadership, significantly influences the establishment of
entrepreneurship because transformational entrepreneurship is a leadership style where
a leader can encourage working interest of his / her subordinates and create conducive
environment to develop innovation and creativity, which are in accordance with
entrepreneurship. Neck, Manz, and Godwin (1999) also find that the application of
effective leadership principals will increase the courage to be an entrepreneur.
The Relationship between Self-efficacy and Entrepreneurship
Self-efficacy is often described as an important construction and obtains big
attention in some researches. Since self-efficacy is a construction which is created by
social cognitive theory, it is related to performance and satisfaction (Bandura, 1977).
Social cognitive theory is a theory which shows triadic reciprocal relationship among

ehaviors, cognition, and environment. Self-efficacy has big role in motivating
individuals in order to increase their efforts and cognitive ability which lead to their
performance. The relationship between self-efficacy and entrepreneurship is based on
an understanding where someone who believe that he / she can finish his / her task /
job. It influences greatly him / her in taking decision, taking risks, having aspiration to
build personal business, and acting strategically (Latham, Winters, and Locke, 1994).
After that, aspiration and entrepreneurship of people can be influenced by how they
determine their abilities in finishing their task / work (self-efficacy) (Neck, Manz, and
Godwin, 1999).
As the key element in the study of Bandura (1977), self-efficacy is referred to
someone’s faith in his / her abilities in order to conduct specific task. Self-efficacy
emerge from the acknowledgement or repeated proof about someone’s ability in
cognitive, social, linguistic, or physic (Vancouver, Thompson, and Williams, 2001). So
far, there are three dimensions in the study of self-efficacy, such as:
a. Magnitude of Self-efficacy
It shows the level of task difficulties which is believed to be finished.
b. Strength of efficacy
It is referred to the question whether the magnitude is strong enough.
c. Generality
It is referred to the width of efficacy beliefs which are made by someone
(whether they are for specific task or cross task and cross situation).
Hypothesis Development
According to Soriano and Martinez (2007), a leadership, especially
transformational leadership, significantly influences the establishment of
entrepreneurship. Neck, Manz, and Godwin (1999) also find that the application of
effective leadership principles will be able to increase the courage to be an
entrepreneur. based on those findings, the proposed hypothesis:
H-1: Transformational Leadership significantly influences entrepreneurship
According to Peter F. Drucker (1996), leadership does not directly influence
entrepreneurship characteristics (leadership influences entrepreneurship), but it can be
determined by moderation and mediation effects of certain variables. Furthermore,
aspirations and entrepreneurship can be influenced by the way people determine his /
her ability in finishing tasks or jobs / self-efficacy (Neck, Manz, and Godwin, 1999).
Therefore, the proposed hypothesis is:
H-2: Self-efficacy moderates the influence of leadership toward entrepreneurship.

C. Methodology and Model
Type of Research
This type of research is a survey research, ie research technique in which the
information was taken from respondents using a questionnaire. Observations and data
collection performed in Cafeteria / Restaurant in Surakarta.
The population in this study were all employees of Restaurant / Cafeteria in
Surakarta. The sample number of 85 people drawn at random purposive sampling
representing the entire district is in Surakarta.
Operational Definition and Variable Measurement
Transformational leadership is leadership in which leaders are able to extend and
increase interest in work of subordinates, able to explore the potential of employees for
the company's progress and advancement of employees
Self-efficacy is the confidence level of employees to be able to complete the task
/ job. For example "I feel able to finish my job well".
Entrepreneurship is the properties of certain traits that lead to the formation of
entrepreneurial spirit, such as: high-spirited, high achievement motivation, can
understand the differences of opinion, has the attitude and determination and actionoriented.
Variable Measurement
Transformational leadership was measured with a 5-item scale, consisting of
seven question items developed by Bass and Avolio (1990). Self-efficacy was
measured with a 5-item scale, comprising five items a statement developed by Gareth
R. Jones (1986). Entrepreneurship properties measured with a 5-item scale, consisting
of six items developed by Wiratmo question (1996).
Hypothesis Testing
The data has been collected and analyzed with descriptive statistics, this is to
provide an overview of the characteristics of respondents and the respondents to the
variables studied. Then proceed with the method of regression testing to see the direct
influence of transformational leadership with entrepreneurial traits. Furthermore
Hierarchichal Regression methods are used to test whether self-efficacy moderate the
influence of transformational leadership on the nature of entrepreneurship.

The Model
In this study of leadership will be tested the effect of variables (independent
variables) against the spirit of entrepreneurship (dependent variable) with self-efficacy
as moderating variables. That is, how much influence factors of entrepreneurial
leadership is determined by one's self-efficacy.
D. Result
1. Leadership Variable
Leadership was measured with a 5-item scale, consisting of seven question
items developed by Bass and Avolio (1990). From the questionnaire data obtained
descriptions of respondents in each of the following questions:
Table 1
Respondents’ Response toward Leadership
Question Items
Category KT1 KT2 KT3 KT4 KT5 KT6 KT7
F % F % F % F % F % F % F %
STS 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0%
1 1
TS 4 5% 6 7% 3 4% 7 20% 0 12% 5 6% 5 6%
1 2 2 1 1 2
N 14 16% 9 22% 2 26% 9 34% 8 21% 8 21% 5 29%
S 37 44%
4
5 53%
4
6 54%
3
1 36%
4
7 55%
4
5 53%
4
3 51%
1 1
1 1 1
SS 13 15% 5 18% 4 16% 8 9% 0 12% 7 20% 2 14%
TOTAL 85
100
%
8
5
100
%
8
5
100
%
8
5
100
%
8
5
100
%
8
5
100
%
8
5
100
%

2. Self-efficacy variable
Efficacy was measured with a 5-scale-Itam, comprising five question items
developed by Gareth R. Jones (1986). From the questionnaire data obtained
descriptions of respondents in each of the following questions:
Table 2
Respondents’ Response toward Self-efficacy
Question Items
Category SE1 SE2 SE3 SE4 SE5
F % F % F % F % F %
STS 0 0% 0 0% 0 0% 0 0% 0 0%
TS 1 1% 0 0% 0 6% 0 0% 2 2%
N 0 0% 9 11% 5 67% 3 3547% 20 24%
S 50 59% 62 73% 57 27% 56 66212% 49 58%
SS 34 40% 14 16% 23 100% 26 30741% 14 16%
TOTAL 85 100% 85 100% 85 0% 85 100500% 85 100%
3. Entrepreneurship Variable
Entrepreneurship is measured with a 5-item scale, consisting of six items
developed by Masykur question Wiratmo (1996). From the questionnaire data obtained
descriptions of respondents in each of the following questions:
Table 3
Respondents’ Response toward Entrepreneurship
Question Item
Category KW1 KW2 KW3 KW4 KW5 KW6
F % F % F % F % F % F %
STS 0 0% 0 0% 0 0% 1 1% 0 0% 0 0%
TS 0 0% 0 0% 0 0% 1 1% 1 1% 1 1%
N 10 12% 2 2% 10 12% 8 9% 14 16% 11 13%
S 46 54% 57 67% 55 65% 50 59% 48 56% 47 55%
SS 29 34% 26 31% 20 24% 25 29% 22 26% 26 31%
100
TOTAL 85 100% 85 100% 85 100% 85 100% 85 100% 85 %
Hypothesis Testing
To test these hypotheses in this study used hierarchical regression with SPSS
17. First, an assumption of classical test for the analysis tool in this study is the linear

egression. Then proceed with the method of regression testing to see any direct
influence on entrepreneurial leadership. Furthermore Hierarchical Regression methods
are used to test whether self-efficacy moderating influence on entrepreneurial
leadership. More detail can be seen in the following table:
Model
Table 4
Result of Regression Analysis
The Influence of Leadership toward Entrepreneurship
Coefficients a
Unstandardized
Coefficients
Standardized
Coefficients
B Std. Error Beta
1 (Constant) 19.479 2.068 9.419 .000
Leadership .211 .078 .283 2.690 .009
a. Dependent Variable: Entrepreneurship
From the table above can be seen that significantly influence the entrepreneurial
leadership (p

no significant impact on entrepreneurship. Moderate variable is the interaction between
leadership and self-efficacy was not significant. So it can be concluded that the variable
self-efficacy did not moderate the influence of transformational leadership on the nature
of entrepreneurship.
E. Conclusion and Recommendation
Conclusion:
1. Based on the results of the calculation, the value of transformational leadership on
entrepreneurship β significant at p, 0.05, it can be concluded that hypothesis 1 which
aims to examine whether transformational leadership significantly influence
entrepreneurship supported. This means that statistically it can be shown that
transformational leadership has a positive and significant impact on entrepreneurship.
2. This hypothesis aims to test whether self-efficacy moderates the impact of leadership
on entrepreneurship. Based on the above calculation, the value of β leadership, selfefficacy
and the interaction between the two has a significance above 0005, then it
can be concluded that hypothesis 2, which aims to test whether self-efficacy
moderate the influence of transformational leadership on entrepreneurship is not
supported.
3. Generally it can be concluded that transformational leadership have a significant
effect on entrepreneurship, and the effects are not significantly different between
employees who self-efficacy was high or low temperatures.
Recommendation
The advice can be given with respect to the results of this study are:
In managerial practice, for the leadership to better motivate employees to further
develop the creativity and innovation as well as leaders must be able to encourage
employees to dare to try the task / new job is more challenging, because it will further
enhance the entrepreneurial spirit of employees.
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