Cultural Diversity Of Entrepreneurship

Cultural Diversity of Entrepreneurship Cultural diversity encompasses a multitude of sub cultures or societies. It consists of elements such as religion, language, age, gender, family, sexual orientation, ethnicity and social status. In contemporary societies, the emerging trend of entrepreneurship is impacted upon by key issues in cultural diversity.

Ethnicity and Entrepreneurship Ethnicity refers to a particular group of people or social group with a common, distinguishing and shared culture. According to the American Heritage New Dictionary of Cultural Literacy, ethnicity refers to, ‘identity with or membership in a particular racial, national, or cultural group and observance of that group’s customs, beliefs and language’. Some research on ethnicity and entrepreneurship are highlighted:  Fratoe (1986) point out that ethnic enterprise »» can be considered a ‘group level phenomena’. He argues that this is because of the business’ dependence on group resources.  Other researchers contend that the organization’s business strategy should be aligned to the environment. When the environment entails group values for example ‘collectivism, duty, loyalty’ for instance, the business strategy alignment is influenced greatly by the ethnic group values. Enz et al (1990) contends that the alignment to group values influences the business operations more than it does in the mainstream national culture.  Landau (2007) argues that the role of the family as an agent of culture and cultural values. The family as a social structure is seen as integral to ‘understanding the management process of ethnic-family businesses than mainstream businesses’.

Gender and Entrepreneurship According to www.businessdictionary.com, gender can be defined as ‘culturally and socially constructed difference between men and women’. Some research on gender and entrepreneurship are highlighted:  Research on gender differences in the inclination of an individual to become an entrepreneur tends to show that males have a greater predisposition to start a venture. This, according to Cowling (2003) does not hold true for every society. He highlighted that in Finland, there is a greater inclination for females to start their own business.  Research by Marlow et al. (2008) argues that the pervasiveness of female entrepreneurship is strongly influenced by history and culture.  Other research on gender tends to focus on the aspect of discrimination. Moore (1983) and Sowell (1981) argue that female propensity to enter into entrepreneurship is as a result of labour market discrimination in the ‘formal waged sector’.

 Further research focus on the effect of the family on the propensity of females to enter into entrepreneurship. Moreover, women seek employment that complement/counterbalance with child care responsibilities.  While Verheul et al. (2006) found that both male and female entrepreneurs tend to be influenced by the same factors; Wagner (2007) showed that the ‘fear of failure’ discourages women from pursuing entrepreneurship.

Youth and Entrepreneurship According to UNESCO (www.unesco.org) the term youth is characterized as ‘a period of transition from the dependence of childhood to adulthood’s independence and awareness of our interdependence as members of a community’. UNESCO further describes ‘youth’ as a person ‘between the age where he/she may leave compulsory education, and the age at which he/she finds his/her first employment’. Some research on youth and entrepreneurship are highlighted:  Research conducted by the International Labour Organization (ILO) in a paper entitled, ‘How to build an enabling environment for youth entrepreneurship and sustainable enterprises’ highlighted challenges facing sustainable youth enterprise. These challenges include the global economic crisis and its impact on the labour market in developing countries. Also, environmental sustainability issues such as waste and greenhouse gases as well as, climate changes while they result in increased risk to the earth, they also provide opportunities for creativity and innovation for youth enterprise. Further, there is an ‘employment crisis’ for young persons.  The ILO research paper further points out that when a scarcity for jobs exists, young people are more vulnerable to unemployment. Research suggests that many youths are ‘pushed’ into entrepreneurship. The paper states that they become ‘entrepreneurs by necessity’ rather than ’entrepreneurs by choice’. Research underscores the point that some young people enter the ‘informal sector’ without acquiring the necessary entrepreneurial know how or funding to sustain a venture. Governments are becoming increasingly aware of the need to develop and promote youth entrepreneurship.  Research indicates that there are barriers to youth entrepreneurship: these include some countries lack of ‘enterprise culture’; unfavourable/adverse ‘legal policy and regulatory frameworks’ toward youth entrepreneurship; lack of ‘entrepreneurial education’; lack of ‘access to affordable financing and business development services’.  Consequently, the ILO research paper emphasizes that for policies on youth entrepreneurship to be effective they should be considered in the broader context of employment policies and programmes. Moreover, interventions should be designed to overcome the challenges of youth entrepreneurship. These interventions include the creation and promotion of a culture of youth entrepreneurship. This would include strategies such as campaigns promoting successful youth entrepreneurs; business idea and business plan competitions; youth business conferences and publicity. Another

intervention is the fostering of entrepreneurship education, training and development at all levels of the education system. This would include for example school based assessment at the secondary school level based on creating a business plan; training for school leavers in the elements of starting a venture. Interventions would also include improving the legal environment to facilitate youth entrepreneurs e.g. reducing the time and costs involved in registering a business. Further, access to financing and business development services should be made easier for young entrepreneurs e.g. access to venture capital, low interest loans, start-up training such as writing a business plan and financial recording.

Family and Entrepreneurship Andersen and Taylor (2009) and Newman (2009) refer to the family as a ‘social institution’. It is seen as having an organized system of behaviour and a specific purpose. The family is seen as serving various social functions. These include reproduction, caring for members, providing legal rights and preservation of cultural traditions. The family also has to adhere to legal and cultural obligations. In analysing the interrelationship between the family structure and entrepreneurship some research points are highlighted:  Aldrich and Cliff (2003) points out that ‘family and business dynamics’ are interrelated.  Researchers such as Aldrich and Waldinger (1990) as well as, Steier and Greenwood (2000) argue that the family is integral to a start- up business process as it is a source of financial resources to the entrepreneur. Other researchers contend that the family also provides human resources and at times a physical space to conduct the business venture.

Religion and Entrepreneurship The research highlighted seeks to introduce the student to some aspects of how religion impacts the entrepreneurial orientation. The following key issues were highlighted in research done by Audretsch, Boente and Tamvada in ‘Religion and Entrepreneurship’ (2007):  The paper was based on data collected from approximately 90 000 workers in India. The research concluded that religion shaped entrepreneurial decisions.  The researchers contend that religions such as Christianity and Islam were conducive to entrepreneurship. They found that Hinduism inhibited the development of entrepreneurship. The caste system influenced the ‘propensity’ of the individual to engage in entrepreneurial activity. Moreover, the lower caste exhibited a ‘lower propensity’ to entrepreneurship. Max Weber (1905) in his work, ‘The Protestant Ethic and the Spirit of Capitalism’ provided a study of the relationship between Protestantism (especially Calvinist) and capitalism. He pointed out the following:

 Religious ideals of groups such as the Calvinist influenced the development of capitalism.  Protestantism provided a favourable base for enterprise.

 The Protestant emphasis on individualism helps to facilitate capitalism.  The Calvinist valued material success and profit as demonstrating God’s favour.

Source: CAPE Fundamentals in Entrepreneurship Unit 1 (2015), N. Maharaj, B. Sanichar, N. Mootoo, P. Rajkumar, Genisis Books.