Does Culture Impact on Entrepreneurial Activity?

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Abstract

Entrepreneurship can be defined as the activity of starting a business. Therefore an entrepreneur is a person who began and owns a business. Entrepreneurship is thus considered an economic activity. However, research indicates that there is a direct relationship between culture and entrepreneurship. This is the case as a result of various experimental studies conducted on people from different cultural groups. The results have indicated a cultural influence on the activities of entrepreneurship. One of the most intriguing parts of these findings is that certain cultures have been known to produce more entrepreneurs than others. Therefore efforts have been put forward to try and find out what makes certain cultures to be more successful in entrepreneurship than others.

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Therefore there has been growing acknowledgment of the role of culture in the activities of entrepreneurship. On top of that studies have also found out that entrepreneurial activities differ from culture to culture. Therefore different cultures approach entrepreneurship differently. It has therefore been concluded that culture influences entrepreneurship to a great extend. This is due to the fact that culture entails different parameters related to attitude and perception which also affect the economic aspects of reality. Several studies conducted on people e of similar cultural backgrounds have indicated a similarity in the manner in which they approach entrepreneurship and business. There is a uniform pattern through which people of the same culture engage in entrepreneurship. It is against this background that the role of culture in entrepreneurship cannot be underestimated.

Introduction

The impact of culture on entrepreneurial activities has become a source of debate. This has been the case due to the complications in measuring and defining culture. However, since entrepreneurship is all about the starting of new businesses there is a strong relationship between culture and entrepreneurship. The character traits involved in the process of entrepreneurship have a cultural connotation. For instance innovation, aggression and ambition are necessary for entrepreneurship. Under normal circumstances, the cultural and ethnic background has a lot of relevance to the development of skills, habits, and behavior. These behaviors have a lot of significance to entrepreneurship. Certain cultural backgrounds instill conservatism in people; others instill ambition and so forth. Therefore the cultural background of people has a lot of roles to play in their entrepreneurial activates.

It is against this background that culture has a lot of impact on entrepreneurship. This manifests in different entrepreneurial and business activities in different countries with different cultures. For instance, Chinese culture encourages innovation and conservatism. It, therefore, happens that most Chinese entrepreneurs are very innovative. However, they are conservative in their model of ding business. In the US liberalism and ambition are dominant qualities; no wonder entrepreneurship in the US is mostly guided by aggression and capitalism. In the Middle East complacency, Islamic concepts are dominant in their entrepreneurial psyche. As a result, entrepreneurs tend to be bossy and employ other people to the work for them. Therefore culture has a lot of impact on the entrepreneurial activities t any given time. This paper aims to take an analytical look at the aspect of culture and its impact on entrepreneurial activities. The paper will cite examples from china, the US, and the Middle East.

Impact of culture on entrepreneurial activity

The impact of culture on entrepreneurship has been subject to several studies. However, most studies have used the terms culture and nation to mean the same thing. Therefore to most scholars, culture, and nation have a similar impact on entrepreneurship. However, culture does not necessarily confine its impact to geographical boundaries. Therefore in studying the impact of culture on entrepreneurship care must be taken not to confuse culture for the nation. Culture can be defined as a way of life for a specific community. Under normal circumstances, culture involves norms, perceptions, and uniform manner of behavior (Thurik & Freytag, 2009). Therefore it can be said that culture has a role to play in the way individuals perceive reality and respond to the same. Business economy and entrepreneurship are not left behind.

It is in the same vein that every cultural group has t sow ways of earning income and also a distinct approach towards the whole aspect of the business. In one way or the other culture encourages certain kinds of economic behavior at the expense of others? It is therefore common to find similar economic and business decisions among people of the same cultural background. Therefore the role of culture in entrepreneurship is great. Culture affects how people make business decisions and how they pursue their economic decisions. A study conducted on people of Chinese origin in mainland China, Hong Kong, and America indicated that they held similar perceptions and approaches to business. This was against the fact that they resided in different geographical locations. The Chinese culture influenced how they make economic decisions in all aspects. Therefore culture goes beyond the nation ad is symbolized by a uniform perception and approach t particular aspects.

Certain cultures have more entrepreneurs than others. The reasons that might drive some cultures to be more entrepreneurial than others have been subject to many discussions. However, a simple answer can be found in the underlying cultural perception of entrepreneurship. Since culture affects they were a community perceives business and tends to dominate the decision-making part of business, it can be said that some cultures encourage entrepreneurship than others. As a result, those cultures which encourage entrepreneurship tend to produce more entrepreneurs than those that don’t. Therefore culture can have a negative approach to entrepreneurship thus producing less entrepreneurship (Bear & Ajami, 2007). At the same time, the value system of culture has an impact on entrepreneurship. In some cultures, business is valued to a great extend. Therefore the community tends to instill busies ethos among the members. In other cultures, the value system might be family or social life. Therefore in such culture entrepreneurship is not regarded as important.

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The cultural environment is another aspect that affects entrepreneurship. For a business to be done successfully an enabling environment is needed. Certain cultures cultivate entrepreneurship amongst the others. In these cultures, members are inspired to start businesses and engage in trade. In other words, it is rewarding to engage in business in certain cultures (Yang, 2007). Therefore the members of the cultural community are nurtured with business minds within them. Traits like aggression, ambition, and ownership are natural and therefore tend to be influenced by culture. In those cultures where such traits are cultivated in people, entrepreneurship is normally high.

Entrepreneurship

Entrepreneurship in China is different from that of other places like the west. Traditional Chinese practices have a lot of influence on business activities in China. As a result, China has a distinct economic culture. A perfect example of the influence of cultural differences on entrepreneurship is a story of a Chinese merchant and an American client who was supposed to meet at the hotel. The Chinese merchant arrived late for the deal only to find the American client very unhappy since he had other things to do. However it the reason why the Chinese merchant was let is that the address given to him was not correct. Therefore he spent a lot of time trying to find the exact location for the meeting. Since Chinese people are usually shy, they fear asking for direction. This was the reason for the delay. Therefore the cultural mannerism of the merchant almost cost him the deal (Dylan, 2009). It indicates how culture affects entrepreneurship. Therefore the Chinese culture has originally been a significant impediment in entrepreneurship. However several steps have been taken to ensure that the Chinese businesses are successful. For instance, the introduction of technology to enhance trade has been taken well in china. As a result, internet access has been given much focus in china. At the same time education has played a crucial role in preparing Chinese for business. Management and entrepreneurship training has been taking place in China for decades.

However, there are certain aspects of Chinese culture that have been instrumental in the success of its entrepreneurs. For instance, innovation and conservatism, two have been of much advantage and contribution to the success of Chinese entrepreneurship. As much as conservatism seems to be a negative trait, it has been of Chinese benefit. Due to conservatism, Chinese entrappers have relied upon conservative approaches to entrepreneurship which have been successful. For instance, communism as a political and economic ideology has been part of the Chinese for a long time. Through communism, the Chinese have been able to control wealth production and ownership ensuring success (Klemmer, 2009).

China has been inherently communist yet this achieved great economic success in the past. Innovation o the other hand has been the most significant attribute of Chinese entrepreneurship. Chinese entrepreneurship has been successful due to their tendency to be creative in designing new products and setting up new business. Normally creativity and innovation are considered the most important attributes for successful entrepreneurship. Therefore the Chinese entrepreneurs culturally had what it takes to be successful in the business. The Chinese culture has been of great advantages to the entrepreneurship. This is the main reason why china is a fast growing economy and its economic success has changed the perception of entrepreneurship world over. This is due o the fact that communism was considered as a negative form of economic system. However the Chinese have made this much progress under communism a lot of questions are being asked about the reason behind its success.

Business relationship in china is inherently social in nature. This is against the western model where the relationship is professional. Success in science entrepreneurships mostly based on personal relationship. Therefore in business circles people relate in a personal way and share virtually all kind of personal information. Success in this sector therefore depends on personal connections and interactions with other pole. The flip side of this kind pf approach is that much time is spent on things that are not of any business significance. At the same time the lack of professionalism might have a negative impact on the overall performance of the business.

In the US on the other hand entrepreneurship is normally perceived along individualist lines where both ownership and operations of business Is personal. It is as a result that you find few group owned business or government controlled businesses I the US. The US culture leans more on the liberal aspects in which people have the freedom of expression and are hence free to indulge in any activity as they feel. Therefore this explains why Americans are more aggressive and confident. These are necessary traits for entrepreneurship. At the same time it influences how Americans perceive and approach entrepreneurship. Capitalism is the economic system in the US and it stems from the American culture. Americans are free people and their culture makes them believe in the aspect of liberalism (Tiwari & Sanjay, 2007). This is the major plank of their approach in entrepreneurship. This is the reason why the most powerful country in the world both economically and politically. The status of the United States is culturally imbibed and is due to the cultural perspectives of business and other factors. Entrepreneurship in the United States is directly opposite that of china. In china they believe inn the collective ownership of factors f production as opposed to the individualistic perception in the united stases. In china communism is the system compared to the capitalism of America. Culture therefore has a lot of impact on entrepreneurship by all means.

Conclusion

Culture plays a very important role in influencing entrepreneurial activities. By all means the role of culture in entrepreneurial activities cannot be underestimated. Entrepreneurship involves the starting of new forms of businesses. Culture on the other hand refers to a way o living. Culture therefore defines how individuals in a particular cultural group behave. Perception of reality is to a great extend affected by the way different cultures chose to approach things. It is against this background that cultures an important role in entrepreneurial activities. Various studies have indicated the role of culture in entrepreneurship. The paper has taken an analytical journey through t the concept of culture and its influence on entrepreneurship. The discussion involved examples from three different cultural backgrounds. The Middle East, US and china have been cited as examples through which the influence of culture has been examined thoroughly.

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The various examples taken have indicated that great influence culture has in entrepreneurship. Of much focus has been the argument that entrepreneurship involves certain character traits like, innovativeness, ambition, aggression among others. Several studies in this area have indicated that these traits have a cultural basis. This is with regard that majority of people’s characters are imbibed within them by their respective cultures. It was against this background that it was founds that some cultures have more entrepreneurs than others. The main reason behind such a condition is the fact that some cultures encourage entrepreneurship than others. At the same time entrepreneurship is perceived differently by different cultures. As such cultural perception determines how people perceive and conduct entrepreneurship. The paper has thus been successful; in navigating through the aspect of culture and its influence on entrepreneurship.

References

Bear, M. & Ajami, R. 2007. The global enterprise: entrepreneurship and value creation. New York: Routledge.

Dylan, E. 2009. Entrepreneurship and growth in local, regional and national economies: frontiers in European entrepreneurship research. London: Edward Edgar Publishing.

Klemmer, P.2009. Linking national culture to domestic entrepreneurial activity: a review of current international comparative entrepreneurship research. Washington: Verlag.

Thurik, A. & Freytag, A. 2009. Entrepreneurship and culture. New York: Springer.

Tiwari, A. & Sanjay, T. 2007. Entrepreneurship development in India. Washington: Sarup & Sons.

Yang, K. 2007. Entrepreneurship in China. California: Ashgate.

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