While many of us believe that we are in total control of our lives, the culture that we are predisposed to is a determining factor in shaping our personality and even the way we do business. Through culture, we are raised differently, have different languages and solve problems differently and needless to say conduct business differently.
Even the traits that are passed from generation to generation are largely dependent on culture. Also, through culture perpetuation, entrepreneurial concepts are passed from one generation to another and therefore different people in different parts of the world have different entrepreneurial practices (Timmons, Gillin, Burshtein & Spinelli 2010, pp. 40).
One may wonder why a certain people that are predisposed to a certain culture are always very entrepreneurial, well the answer lies in culture and Geert Hofstede also echoes this line of thought through his cultural dimensions. Bolton & Thompson, (2000, pp. 413), defines entrepreneurs as “people who, often habitually, create and innovate to build something of recognized value around perceived opportunities”.
An overall approach to the definition of an entrepreneur indicates an entrepreneur as a person who puts together economic resources to produce economic goods and in turn earn profit. Entrepreneur activities refer to all the activities carried out by the entrepreneur in an economy in light of producing economic goods. An entrepreneur facilitates economic development through carrying out economic activities that are geared towards earning income.
the other hand, culture refers to a people’s way of life with different societies having different cultures and different countries have different national cultures which play a key role in determining entrepreneurial activities carried out by people in different societies.
According to Geert Hofstede, there are five cultural dimensions namely; Power Distance Index (PDI), Individualism (IDV), Masculinity (MAS), Uncertainty Avoidance Index (UAI) and Long-Term Orientation (LTO) (Hostede n.d). The discussion therefore focuses on how the various cultures impact on entrepreneurial activities in Anglo – UK, East Europe – Russia and Asia China cultures.
Studying Asian – China closely, the behaviors of the people depict a society that has been predisposed to the Marxism way of life. The Chinese people’s culture emphasizes more on collectivism than individualism way of life and it is therefore not surprising that according to Geert Hofstede cultural profile, China has lower ranks on the individualism scale for the Chinese people lead a socialist way of life (Geert Hofstede).
Their rank in relation to the IDV cultural profile is rated as 20, which is relatively low. The Asian societies hold the family so dear and they are therefore able to source for free labor from family members for their businesses (Basu & Goswani 1999, pp. 252). This also explains why china ranks approximately 35 on the UAI index; Asia – China’s culture shows that the Chinese people do not believe in religion.
The people of china belong to the uncertainty accepting culture for they are able to tolerate different opinions from different individuals and still peacefully coexist with one another. In relation to entrepreneurial practices, the Asian culture is more tolerant of the uncertainties that face businesses and therefore they withstand and try to solve the risks associated with businesses other than quitting.
According to Lee & Chan (1998, pp.133 ), there is more success to entrepreneurs who are married emphasizing the importance of collectivism way of life and further seconding Geert Hofstede ideas that the Asian culture are committed to family businesses and loyalty exists among groups specifically in family businesses which are qualities that are needed to succeed in business. Lee & Chan (1998, pp.133 ), further supports this point by concluding that in the research, the findings indicated that most people who were interviewed when asked what motivated them to self employment, gave the answer of having family business backgrounds.
According to the research done by Lee & Chan (1998, pp.133), the findings indicated that most people in the Asian – China culture entrepreneurs are male. Why? Geert Hofstede explains that in the Chinese culture, women are less valued than men and though they engage in entrepreneurial activities, they face more difficulties than men and culture has also played an important role in shaping beliefs that men in the Asian community are more capable of handling business than women.
When women engage in business, they have to go past the hurdles of cultural bottlenecks and stereotypes. The Long Term Orientation in the Asian – China has the highest rank which further coincides with the research findings of Lee & Chan (1998, pp.133), that most people who are entrepreneurs in the Asian culture are driven by the desire to be independent and to gain some autonomy from the traditional businesses that are family oriented in the Asian cultures.
The Confucian heritage also play an important role in the way Asian cultures conduct business Lee & Chan (1998, pp.135) for the emphasis is placed on perseverance which is a common trait in Asian entrepreneurs.
However, cultural influences on entrepreneurial activities can impact on business negatively. As illustrated by (Basu & Goswani 1999, pp. 253), that the success of Asian businesses is largely dependent on their community and breaking free from the cultural bondages of the community will allow Asian communities to develop large businesses as opposed to the small businesses which are dependent on the community for their survival.
Economic theorists ascertain that while the cultural influences are keys factors influencing entrepreneurial practices success in the Asian culture, they loose focus with increasing economic assimilation in the modern world for the success of these entrepreneurial practices curved around the society’s culture is largely dependent on one’s own community rather than adopt a global perspective of doing business (Basu & Goswani 1999, pp. 253). In summary, more success in the Asia – China culture will befall all entrepreneurs who will be able to integrate the cultural influences in the success of their business for instance free labor, unity and loyalty created by their Marxist way of life in light of the global way of doing business.
Russia on the other hand does not have so coherent entrepreneurial practices that are typical of the Asian societies. Culture is not static and therefore can develop. Using Russia to illustrate, entrepreneurial activities started to be encouraged in 1986 when communism was coming to an end and the beginning of privatization in businesses.
This paved way for corruption to perpetuate in businesses in the Russian community. In Russia, pervasive corruption penetrates through the channels through which entrepreneurs are to pass through to acquire trading authorizations and certificates.
After the de – monopolization of the economy (Dmitri 1996, pp. 16), entrepreneurs have come to accept it as the norm that corruption is part of doing business in Russia where private owned business pay organized gangs to offer security and protection to their businesses. This national culture where corruption is accepted hinders the growth of entrepreneurial practices in the Russian economy Dmitri (1996, pp. 15).
In Russia, women are also discriminated just like in the Asian cultures and the reason why men are the ones who mostly operate and own the small businesses in the country. This therefore shows that Geert Hofstede cultural dimensions would place Russia on a high scale when on the Masculinity Index.
While the national culture of Russia comprised of a community where communism way of life thrived, entrepreneurs are finding it hard to manage their small businesses. Hisrich & Grachev (1995, pp. 5) claim that one of the problems that entrepreneurs who participated in the interview cited as influencing entrepreneurial practices was lack of training.
This is because the communist way of life did not entertain people to develop skills that could be used in running own business for after all businesses were communally owned. It is after the end of communism that entrepreneurs are finding it hard to manage their businesses for they do not have managerial skills that could encourage entrepreneurship.
Russia is typical of an individualistic society and therefore scores high on Hofstede scale of cultural dimension on IDV. Serving as evidence that individuals are individualistic is the high numbers of small businesses that are in Russia depicting that they do not like to associate with others so that they can form large organizations Hisrich & Grachev (1995, pp. 5).
Anglo societies are characterized by political stability and perhaps the reason as to why these societies are very individualistic. They are also known for their dogmatic practices of handling issues and tend to follow their traditional way of doing things.
With their individualist nature, Anglo societies have low levels of trust in their organizations, thus their organizations are characterized by rules and bureaucratic systems of doing things. Unlike the Asian societies where trust exists among members of a group or a family, Anglo societies do not have such levels of trust.
With these qualities, Anglo societies entrepreneurs are very decisive, the kind of entrepreneurs who purposes to accomplish something and does exactly that. Entrepreneurs have management skills unlike the Russian societies and therefore entrepreneur success is ubiquitous.
The entrepreneurs have a let’s get a hold it and accomplish it attitude and are therefore high achievers. The Anglo societies have a higher range on the IDV in Geert Hofstede cultural dimensions scale and among the highest in the world.
In societies with high power distance, individuals are most likely to shy away from engaging in entrepreneurial activities for the belief that those in power are most likely to be the one suitable to engage in such activities (Hostede n.d.). Individuals who are of high class might be more accepted in the society as entrepreneurs as opposed to individuals who are low class in the society.
Consequently, high class individuals will have a range of resources from which to pull from and engage in entrepreneurial activities and therefore engage in production of economic goods. Individuals who are of a lower class may be willing but may not have the necessary resources that an entrepreneur requires to perpetrate entrepreneurial activities.
An entrepreneur is known for he/she is a risk taker (Timmons, Gillin, Burshtein & Spinelli 2010, pp. 16). The entrepreneur ventures in areas of business where a person with no entrepreneurial qualities would not dare venture.
With regard to Geert Hofstede cultural dimensions, societies with high uncertainties avoidance tend to succeed more in entrepreneurship as opposed to societies with low uncertainty avoidance. High uncertainty avoidance societies already have the qualities of the entrepreneur as the risk taker and therefore likely to venture and preserve in businesses in light of risks associated with such businesses.
Individualism is a strong cultural dimension in regard to Geert Hofstede cultural dimensions. It is the cultural dimension that best summarizes the qualities on an entrepreneur as a go getter, passion driven and independent individual.
According to these cultural dimensions, the entrepreneur will go against the norm of the society and achieve his or her set objectives. Individualistic individuals are not scared to act on their instincts and the entrepreneur does not seek a second opinion in being an entrepreneur.
Therefore in regard to all of Hofstede cultural dimensions, individualism dimension stands out as the most admirable. A society that is full of go getters tends to have more entrepreneurs than a society that is full of collectivism people.
For instance in Russia, after communism ended, extent literature shows that entrepreneurial activities have been on the rise with many small business starting up as opposed to Asia – China societies where according to Basu & Goswani (1999, pp. 253), for entrepreneur activity to thrive, the society has to be disconnected or rather integrated community reliance of entrepreneurial activities success and adopt a global perspective.
National culture is an important aspect that influences entrepreneurial activities in a given country (Timmons, Gillin, Burshtein & Spinelli 2010, pp. 35). Geert Hofstede summarized the influence of culture in the five cultural dimensions.
It is obvious through the analysis of the three societies that national culture impact on how entrepreneurs do business in a particular country and why they adopt different attitudes to business Thompson (2002, pp. 420). It is also clear why in some societies, there are more successful entrepreneurs than in others, and the key lies in how we have learnt to adopt different attitudes towards business through the culture we have been predisposed to.
References
Basu, A. & Goswami, A. 1999. South Asian Entrepreneurship in Great Britain: Factors Influencing Growth. International Journal of Entrepreneurship Behavior & Research. Vol.5. MCB University.
Dmitri, S. 1996 Russian Culture at the Crossroads: Paradoxes of Post – Communist Consciousness. Colombia. West View Press. Ed.
Hisrich, R. & Grachev, M. 1995. The Russian Entrepreneur: Characteristics and Prescriptions for Success. Journal of Managerial Psychology. Vol. 10. Issue No. 2. MCB University. Hostede, G. n.d. Cultural Dimensions: retrieved from www.geert-hofstede.com/
Lee, J. & Chan, J. 1998. Chinese Entrepreneurship: A Study in Singapore. Journal of Management Development. Vol. 17. No.2. MCB University Press.
Thompson, J. 2002. The World of the Social Entrepreneur. The International Journal of Public Sector Management. Vol. 5. Issue No. 5.
Timmons, J., Gillin L., Burshtein S. and Spinelli S. 2010, New Venture Creation: Entrepreneurship for the 21st Century – A Pacific Rim Perspective. MacGraw Hill, Australia.