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 arguesthat this is because of the business’ dependence on group resources.
Other researchers contend that the organization’s business strategy should be aligned to theenvironment. When the environment entails group values for example ‘collectivism, duty, loyalty’ forinstance, 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 itdoes in the mainstream national culture.
Landau (2007) argues that the role of the family as an agent of culture and cultural values. The familyas a social structure is seen as integral to ‘understanding the management process of ethnic-familybusinesses than mainstream businesses’.
Gender and Entrepreneurship
According to 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 tendsto 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 forfemales to start their own business.
Research by Marlow et al. (2008) argues that the pervasiveness of female entrepreneurship is stronglyinfluenced 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 marketdiscrimination in the ‘formal waged sector’.
Further research focus on the effect of the family on the propensity of females to enter intoentrepreneurship. Moreover, women seek employment that complement/counterbalance with childcare responsibilities.
While Verheul et al. (2006) found that both male and female entrepreneurs tend to be influenced bythe same factors; Wagner (2007) showed that the ‘fear of failure’ discourages women from pursuingentrepreneurship.
Youth and Entrepreneurship
According to UNESCO ( 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 anenabling environment for youth entrepreneurship and sustainable enterprises’ highlighted challengesfacing sustainable youth enterprise. These challenges include the global economic crisis and its impacton the labour market in developing countries. Also, environmental sustainability issues such as wasteand greenhouse gases as well as, climate changes while they result in increased risk to the earth, theyalso 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 morevulnerable 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 acquiringthe necessary entrepreneurial know how or funding to sustain a venture. Governments are becomingincreasingly aware of the need to develop and promote youth entrepreneurship.
Research indicates that there are barriers to youth entrepreneurship: these include some countrieslack of ‘enterprise culture’; unfavourable/adverse ‘legal policy and regulatory frameworks’ towardyouth entrepreneurship; lack of ‘entrepreneurial education’; lack of ‘access to affordable financingand business development services’.
Consequently, the ILO research paper emphasizes that for policies on youth entrepreneurship to beeffective 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. Thiswould include strategies such as campaigns promoting successful youth entrepreneurs; business ideaand business plan competitions; youth business conferences and publicity. Another intervention isthe fostering of entrepreneurship education, training and development at all levels of the educationsystem. This would include for example school based assessment at the secondary school levelbased 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 entrepreneurse.g. reducing the time and costs involved in registering a business. Further, access to financing andbusiness development services should be made easier for young entrepreneurs e.g. access to venturecapital, 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) arguethat the family is integral to a start- up business process as it is a source of financial resources to theentrepreneur. Other researchers contend that the family also provides human resources and at timesa 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 researchconcluded 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 influencedthe ‘propensity’ of the individual to engage in entrepreneurial activity. Moreover, the lower casteexhibited 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.