Sunday, 29 December 2013

A Study on Entrepreneurial Sustainability on Edible Bird Nest Industry: Using Self-Efficacy Theory As an Approach.

A Study on Entrepreneurial Sustainability on Edible Bird Nest Industry: Using Self-Efficacy Theory As an Approach.

Wan Khairy bin Wan Ibrahim,
Dr Mohd Rafi  Yaacob

Faculty of Entrepreneurship and Business
University Malaysia Kelantan


This paper provides early insight into the entrepreneurship of edible bird’s nest industry in Malaysia.  Further explores issues related to characteristics and sustainability of the entrepreneurial environment.  This paper draws upon self-efficacy theory approach as a basis of study.  A number of relevant dimension are analyzed. Indeed, there is a clear and inherent need to distinguish between the business ideas especially when he or she is focusing on the development of business and becoming an entrepreneur. At the same time it is important to assess whether a directive or non-directive style is more appropriate. This is fundamentally a conceptual viewpoint paper and it contains both anecdotal evidence and opinion.  This paper offers a commentary and a framework dimension for entrepreneurs to be more effective and efficient and at the same time discusses the relevance depth and understanding of the said industry. 
Keywords: Entrepreneurs, sustainability, self-efficacy, edible bird’s nest industry,



Malaysia is one of the largest market exporters of edible bird nests, total volume of 100 tonnes 2010 and 20 tonnes 2011 (Ban, 2011). According to the Federation of Malaysia Bird Nest Association’s president Datuk Paduka Beh Heng Seong, with the strong collaboration along the Ministry of Agriculture & Agro Based Industry of Malaysia and the China General Administration of Quality Super­vision, Inspection and Quarantine (AQSIQ), a working committee on the procedural and administrative problems of the Malaysian swiflet industry will be established. The swift actions taken by both parties came immediately after the Prime Minister of Malaysia, Datuk Seri Najib Tun Razak highlighted the issue to Chinese Premier Wen  Jiabao on Oct 21, 2011 on the sidelines of the China-Asean Expo in Nanning, Guangxi Zhuang autonomous region. In the wake of the import ban by China, the Agriculture and Agro-Based Industry Ministry have directed industry players to implement the Good Animal Husbandry Practice and Good Manufacturing Practice standards under the guidelines for the development of the swiftlet industry (Ban, 2011). According to the Malaysia Statistical Department, in the year 2010 there were 41 associations have been established in edible bird nest industry which leads to gross income of RM 3 million and contributed to employment opportunity reaching up to RM 522,000 (Malaysia, 2012). Apart from Chinese entrepreneurs who dominate the industry, this golden opportunity gives a great advantage to indigenous Malay entrepreneurs to explore the edible bird nest industry with influencing self-efficacy factors that lead to it success and sustainability.

According to Jordan (2004), the edible bird nest industry in the Southeast Asia has centered in China, generating a sum amount of income. The author has done the extensive research on edible bird nest with Indonesian Statistical Centre in 2002 stated the contribution income of USD23 million from USD 53 million was generated from the edible bird nest industry in Kiasaran province, Indonesia. Hong Kong and the United States are the largest importers of these nests. In Hong Kong, a bowl of bird's nest soup would cost $30 USD to $100 USD. A kilogram of white nest can cost up to $2,000 USD, and a kilogram of red nests can cost up to $10,000 USD. The white nests are commonly treated with a red pigment, but methods have been developed to determine an adulterated nest. Natural red cave nests are often only found in limestone caves in a bird nest concession island in Thailand. The high cost and demand have attracted counterfeiters, leading to the halt of Malaysian nest exports to China; the Malaysian government has undertaken to employ RFID technology to thwart counterfeiting by micro-chipping nests with details about harvesting, packaging and transport.

Edible bird's nests are among the most expensive animal products consumed by humans. The nests have been used in Chinese cooking for over 400 years, most often as bird's nest soup. The most famous use of edible birds nest is bird's nest soup, a delicacy in Chinese cuisine. When dissolved in water, the birds' nests have a gelatinous texture used for soup. In addition to its use in soup, edible birds nest can be used as an ingredient in many other dishes, it can be cooked with rice to produce bird's nest congee or bird's nest boiled rice, or it can be added to egg tarts and other desserts. A bird's nest jelly can be made by placing the bird's nest in a ceramic container with minimal water and sugar (or salt) and double steamed. Ready to eat bird's nest jelly is available in jars as a commercial product. The most heavily harvested nests are from the Edible-nest Swiftlet or White-nest Swiftlet (Aerodramus fuciphagus) and the Black-nest Swiftlet (Aerodramus maximus). The white nests and the red nests are supposedly rich in nutrients, which are traditionally believed to provide health benefits, such as aiding digestion, raising libido, improving the voice, alleviating asthma, improving focus, and an overall benefits to the immune system. Most nests are built during the breeding seasons by the male swiftlets over a period of 35 days. They take the shape of a shallow cup stuck to the cave wall. The nests are composed of interwoven strands of salivary laminae cement. Both nests have high levels of calcium, iron, potassium, and magnesium ("Thailand: New method of swallow nests production introduced in Trat," 2010).

The nests were formerly harvested from caves, principally the enormous limestone caves at Gomantong and Niah in Borneo. With the escalation in demand these sources have been supplanted since the late 1990s by purpose-built nesting houses, usually reinforced concrete structures following the design of the Southeast Asian shop-house ("rumah toko"/"ruko") (Jordan, 2004). These nesting houses are normally found in urban areas near the sea, since the birds have a propensity to flock in such places. This has become an extraordinary industry, mainly based on a series of towns in the Indonesian Province of North Sumatra, which have been completely transformed by the activity. From there the nests are mostly exported to the markets in Hong Kong, which has become the centre of the world trade, though most of the final consumers are from mainland China. It has been estimated that the products now account for 0.5% of the Indonesian GDP, equivalent to about a quarter of the country's fishing industry (Jordan, 2004).



The edible bird nest industry in Malaysia has been commercialized by the late 1980s which pioneered by Chinese people. The awareness of turning this industry to the upscale competitive industry occured when the world market having an economic crisis during the year of 1986 – 1988. According to Muhammad Yusof Hashim as cited in  (Ismail, 2010), the history of edible bird nest in Malaysia has started since 1405 in Borneo Lahad Datu, Gua Madai in Sabah followed by the voyages across the seas by Cheng Ho in 1405.  Cheung and Wu (2012) stated from the research of Harrison and Harrison (1973), mentioning this industry possibly started in the early of the 15th century followed by Cheng Ho’s visit to Idahan territory in Sulu Island and Sabah before establishing a trade connection with Dinasti Ming in 1408.
The highly demand of edible bird nest from Chinese aristocrats made Borneo became the popular edible bird nest exporter in the world. The highly produced areas of edible bird nest located in Madai and Gua Gomantong in Sabah and Kalimantan ("Sandakan," 2013). This industry was initiated at a smaller scale with the price of black bird nest in September 1995 at RM 893.75 for a kilogram and white bird nest price for a kilogram amount to RM 4062.5  (Ali, 2010)
The clean bird nest with half cup shape used to achieve a price of RM 24,000 for a kilogram in the year 1980. Due to the expensive price and exotics factor of this edible bird nest industry, leading to the involvements of many local Chinese entrepreneurs. Furthermore, the production of edible bird nest limited to the cave area in Sabah and Indonesia where some area have been tightly guarded by monopolies group and tribes. A source from the tribes stated that they have been establishing mutual trade with China palace since the 14th century. The representative will be send to collect the bird nest directly from them before it turn out to be taken over by the black market in1900. Edible-nest swiftlets build their nests and lay their eggs high on the walls and ceilings of caves in Southeast Asia. For centuries, local people have collected the nests for bird's nest soup, considered a delicacy in China, and relaxation of economic controls has led to a surge in demand for the nests. (Lim Chan, 2000)
The idea to bring out its original habitat to the man made habitat which similar to its actual belonging was first initiated by Chinese Indonesian entrepreneurs in 1915. With extensive research and deep observation on the swiftlets original habitats, they started to build bird houses of swiftlets in a smaller scale. Their efforts turn out successful when the swiftlets could be harvested accordingly with easier, safer and more hygienic way. This found success was first being kept secret even though the house for edible bird nest located near their own houses.
            Cultivating bird nests is a passion in parts of Southeast Asia, considered as much luck as it is skill. Nobody knows why the swiftlets build their saliva nests in some places but spurn others. Indonesian farmers control about 85% of the global bird-nest market; go to great lengths to achieve an optimal blend of cave-like darkness, humidity and fences stench to lure the little birds to their multi-storey bird houses. Still, most of the Christian ethnic-Chinese farmers hedge their bets, burying a cow's head under their bird houses for good luck.
The idea of creating big, open buildings as bird houses came about decades ago, when swiftlets were found nesting in temples and deserted buildings in Southeast Asia. The style caught on mostly in Indonesia, the leading nest exporter opted to build housing for freeloading swiftlets, putting up blocky structure about 65 feet high, protected by a razor-wire-topped fence, to discourage thieves, in an open field. Thais are adapting their homes and office buildings to offer shelter to the lucrative birds, in some cases adding floors or hollowing out existing structures. In other cases, eager entrepreneurs are putting up entire condominium blocks strictly for the birds. Most of the interior walls will be demolished, the doors and windows will be sealed and covered so that the inside is darkened, and banks of pipes will be installed as air vents, with each set poking out five or six inches from the wall. The renovations are designed to attract a high-flying tenant: a swallow like bird known as the swiftlet, which builds a very profitable nest. Those entrepreneurs make innovations as adding double walls to protect the birds from heat, as well as avoiding strong-smelling paint and cement, which they dislike. But the real secret of a successful birdhouse lies in "the technique": the installation in the darkened, cavernous interior of imported sound systems and recorded swiftlet chatter.
Ethnic Chinese around the world have a seemingly insatiable appetite for the delicate nests, which are used in bird's nest soup and tonic and are believed to improve digestion, cure dysentery and rejuvenate the elderly. Potential investors seeking clues to the birdhouse business flock to the C.S. Pattani to watch an estimated 10,000 swiftlets dart and swoop through one small opening into the basement at dusk and emerge again at daybreak. Every three months, a hotel executive, fitted with a gas mask to protect him from the dust and stench, uses a paint scraper to harvest up to 10 pounds of top-quality nests a haul valued at some $10,000 locally. (Barry, 2003)
Against the above background, this paper will expand the ideas presented in the sustainable entrepreneurship model Young and Tilley (2006) by exploring the proposition that sustainable entrepreneurs in bird nest industry and at the same time capitalized the Theory of Self-efficacy by Albert Bandura 1977. Since the publication of the model the authors now prefer to use the term ‘sustainability-driven entrepreneurship’ (for the remainder of the paper it will be referred to as ‘sustainability entrepreneurship’) to reflect the motives of the entrepreneurs and to more strongly associate the meaning of the concept with the process of sustainable development as opposed to the process of sustaining anything.

Beginning with an exploration of what is meant in modern society by the term ‘wealth’, it describe how ecological modernization theory is used to argue how conventional entrepreneurship can reconcile the twin goals of sustainable development and wealth accumulation in bird nest industry.


Despite the modern enthusiasm for entrepreneurship, there is no universally accepted definition. The many guises an entrepreneur can take may be one explanation for this anomaly. The contribution entrepreneurs make to society has long been framed in neoclassical economic terms (Hébert & Link, 1989). Definitions have focused on the wealth creation and economic growth properties of entrepreneurship (Spencer et al) 2008; (Wennekers & Thurik, 1999). Examples of entrepreneurs can be found in literature going back hundreds, if not thousands, of years. The word ‘entrepreneur’ is attributed to Richard Cantillon, in the 18th century, who wrote about individuals who buy materials and means of production at prices enabling them to combine them into a new product (Hostager, Neil, Decker, & Lorentz, 1998). Three taxonomies of entrepreneurship have been identified by Herbert and Link (1989); each of them can be traced back to Cantillion’s definition. In brief, these can be referred to as the German Tradition associated with Schumpeter (1954); the Chicago Tradition associated with the work of Knight (1921); and the Austrian Tradition associated with the work of Kirzner (1985). This taxonomy serves to identify significant commonalities: for example, the entire traditions place the entrepreneur in the context of economic dynamics and within the equilibrium paradigm; and each characterises the entrepreneur in functional terms rather than focusing on personality characteristics often used in the popular media. Thus the link between entrepreneurship and economics has been made from the beginning.

Joseph Schumpeter (1954), regarded as the founder of modern entrepreneurial theory, portrayed entrepreneurs as innovators. He coined the phrase ‘creative destruction’ to describe the process by which entrepreneurs discover new opportunities and stimulate change in society. Entrepreneurship in this context is seen in revolutionary terms as the ability to bring about something new, whether this is a production method, technological development, product/service, distribution system or even a new organizational form. The second dominant view of entrepreneurship, based on the work of Knight (1921), viewed the entrepreneur as the person able to recognise opportunities by managing risk and uncertainty in order to create wealth. Finally, Kirzner (1985), who owes a debt to Knight’s work by emphasizing opportunity recognition, has developed a new theory of entrepreneurship taking it to mean having an alertness to profit opportunities (Spencer, Ryan, & Bernhard, 2008). In an attempt to synthesise all three traditions, Hebert and Link (1989) define an entrepreneur as ‘someone who specialises in taking responsibility for and making judgments decisions that affect the location, form, and the use of goods, resources and institutions’.

Albert Bandura (1975) have done extensive research on the Social Cognitive Theory emphasizes how cognitive, behavioral, personal, and environmental factors interact to determine motivation and behavior (Crothers, Hughes, & Morine, 2008). According to Bandura, human functioning is the result of the interaction among all three of these factors (Crothers et al., 2008), as embodied in his Triadic Reciprocal Determinism model  (Wood & Bandura, 1989). While it may seem that one factor is the majority, or lead reason, there are numerous factors that play a role in human behavior. Furthermore, the influencing factors are not of equal strength, nor do they all occur concurrently (Wood & Bandura, 1989). These reflect on entrepreneur’s sustainability in edible bird nest’s industry and their success. For example, employee performances (behavioral factors) are influenced by how the workers themselves are affected (cognitive factors) by organizational strategies (environmental factors). The Figure 1 below illustrates Triadic Reciprocal Determinism as portrayed by Wood and Bandura (1989). This model was fully developed and was known as Triadic Reciprocal Determinism model (Wood & Bandura, 1989). The Social Cognitive Theory is composed of four processes of goal realization: self-observation, self-evaluation, self-reaction and self-efficacy. These components are interrelated, each having an effect on motivation and goal attainment (Redmond, 2009), believed to be need by indigenous Malay entrepreneurs to achieve success in bird nest industry.
Self-observation– Observing oneself can inform and motivate. For example in bird nest industry it can be used to assess entrepreneurs’ progress toward goal attainment as well as motivate behavioural changes. There are two important factors with regards to self-observation: regularity and proximity.  Regularity means the behaviour should be continually observed, whereas proximity means the behaviour should be observed while it occurs, or shortly after. Alone, self-observation is insufficient because motivation depends on one’s expectations of outcomes and efficacy (Zimmerman & Schunk, 2001).
Self-evaluation– Self-evaluation compares an individual's current performance with a desired performance or goal. It is affected by the standards set by entrepreneurs in bird nest industry and the importance of the goals. In the bird nest industry, the entrepreneur’s ultimate goals are to have sustainable businesses which involved a minimum maintenance cost and achieve high harvested amount of bird’s nest with high grade and quality which lead to high prices. Goals must be specific and important; therefore, goals such as, "do your best" are vague and will not motivate. Schunk and Zimmerman (1994) state that "specific goals specify the amount of effort required for success and boost self-efficacy because progress is easy to gauge." If one has little regard for his goal he will not evaluate performance.  There are two types of self-evaluation standards: absolute and normative. For example, a grading scale would be an example of a fixed or absolute standard. A social comparison such as evaluating one’s behaviour or performance against other individuals is an example of a normative standard (Zimmerman & Schunk, 2001). People gain satisfaction when they achieve goals that they value. When individuals achieve these valued goals, they are more likely to continue to exert a high level of effort, since sub-standard performance will no longer provide satisfaction (Wood & Bandura, 1989).
Self-reaction– Reactions to one’s performance can be motivating. If the progress made is deemed acceptable, then one will have a feeling of self-efficacy with regard to continuing, and will be motivated towards the achievement of their goal. A negative self-evaluation might also be motivating in that one may desire to work harder provided that they consider the goal to be valuable. Self-reaction also allows a person to re-evaluate their goals in conjunction with their attainments (Bandura, 1989). If a person has achieved a goal, they are likely to re-evaluate and raise the standard (goal); whereas, if a person has not achieved the goal, they are likely to re-evaluate and lower the standard (goal) to an achievable goal.
Self-efficacy– One’s belief in the likelihood of goal completion can be motivating in itself  (Lenz & Shortridge-Baggett, 2002). "Self-efficacy refers to people's judgements about their capability to perform particular tasks. Task-related self-efficacy increases the effort and persistence towards challenging tasks; therefore, increasing the likelihood that they will be completed" (Barling & Beattie, 1983, as cited in (Axtell & Parker, 2003)
Regarding self-efficacy, (Albert Bandura, 1994) explains that it "refers to beliefs in one's capabilities to organize and execute the courses of action required to manage prospective situations". More simply, self-efficacy is what an individual believes he or she can accomplish using his or her skills under certain circumstances (Snyder, Lopez, Shorey, Rand, & Feldman, 2003). Self-efficacy has been thought to be a task-specific version of self-esteem (Lunenburg, 2011). The basic principle behind Self-Efficacy Theory is that individuals are more likely to engage in activities for which they have high self-efficacy and less likely to engage in those they do not (Van der Bijl & Shortridge-Baggett, 2002). According to Gecas (2004), people behave in the way that executes their initial beliefs; thus, self-efficacy functions as a self-fulfilling prophecy. Self-efficacy has influence over people's ability to learn, their motivation and their performance, as people will often attempt to learn and perform only those task for which they believe they will be successful (Lunenburg, 2011).
The basic idea behind the Self-Efficacy Theory is that performance and motivation are in part determined by how effective people believe they can be (Bandura, 1982; as cited in Redmond, 2010). This will definitely affect the ability of entrepreneurs to sustain in the bird nest industry. The theory is clearly illustrated in the following quote by Mahatma Gandhi:
"If I have the belief that I can do it, I shall surely acquire the capacity to do it even if I may not have it at the beginning" - Mahatma Gandhi  (Redmond, 2009)

Performance Outcomes– According to Bandura, performance outcomes, or past experiences, are the most important source of self-efficacy.  Positive and negative experiences can influence the ability of an individual to perform a given task. If one has performed well at a task previously, he or she is more likely to feel competent and perform well at a similarly associated task (A. Bandura, 1977). For example, if one performed well in a training workshop they are more likely to feel confident and have high self-efficacy in another training workshop. The individual’s self-efficacy will be high in that particular area, and since he or she has a high self-efficacy, he or she is more likely to try harder and complete the task with much better results. The opposite is also true. If an individual experiences a failure, self-efficacy is likely to be reduced. However, if these failures are later overcome by conviction, it can serve to increase self-motivated persistence when the situation is viewed as an achievable challenge (A. Bandura, 1977). 
 According to Bandura (1997), “People take action when they hold efficacy beliefs and outcome expectations that make the effort seem worthwhile.  They expect given actions to produce desired outcomes and believe that they can perform those actions."  To successfully achieve the desired outcome, individuals must possess the necessary skills as well as a buoyant self-belief that they are capable of controlling the specific situational factors (Bandura, 1989).  People with high self-efficacy are more likely to respond with renewed effort (expectancy) when feedback shows that they are not reaching their goals by developing more successful strategies (Orsega-Smith, Payne, Mowen, Ho, & Godbey, 2007).  However, individuals with low self-efficacy, given the same circumstances, may perform poorly because their low self-efficacy impairs their motivation and effort.  For example, an employee with high self-efficacy and ability for performing a job, but low self-efficacy for training a new employee will most likely be an inadequate trainer.  On the whole, perceived self-efficacy can be distinguished as being competence-based, prospective, and action-related as opposed to related ideas that only share some these elements (A. Bandura, 1977).
The figure 1 below is a diagram representing the difference between efficacy expectations and outcome expectations. (A. Bandura, 1977)         

By all means and conclusion on entrepreneurship sustainability theory is embedded in the language of economics, linking the entrepreneur of bird nest industry with wealth creation, economic development, innovation and jobs. In turn, this is translated into promoting and supporting the start-up of new ventures and of technological innovation all of which positions our understanding of entrepreneurs and entrepreneurship in a continuation of modernity. When it comes to understanding the role and contribution, entrepreneurs can play in a sustainable society. Exploring the link between entrepreneurship and edible bird nest industry is paramount important for the country. Self Efficacy theory proposed by Bandura (1977) helps researcher to understand the keys to becoming a successful entrepreneur in this industry.
As outlined by Bandura (1977) the four sources of information that individuals employ to judge their efficacy: performance outcomes (performance accomplishments), vicarious experiences, verbal persuasion, and physiological feedback (emotional arousal). These components help entrepreneurs  determine if they believe they have the capability to accomplish specific tasks to be able becoming successful entrepreneurs and sustain in this edible bird nest industry.

Bandura, A. (1994). Selfefficacy: Wiley Online Library.

Catatan : Artikel ini telah seperti dibentangkan di Seminar IICIES di ITB ( Institut Teknologi Bandung, Indonesia ) pada 20 Jun 2013.

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