Culture and entrepreneurship

Comparative Entrepreneurship

Renata Osowska
What?
Culture as a set of values, believes and expected
behaviours?

Culture as an element of entrepreneurial

environment

Entrepreneurial culture- one or more? – international

perspective
1. "the total way of life of people"
2. "the social legacy the individual acquires from his group"
3. "a way of thinking, feeling, and believing"
4. "an abstraction from behavior"
a theory on the part of the anthropologist about the way in which a
5.
group of people in fact behave
6. a "storehouse of pooled learning"
7. "a set of standardized orientations to recurrent problems"
8. "learned behavior"
9. a mechanism for the normative regulation of behavior
"a set of techniques for adjusting both to the external environment
10.
and to other men"
11. "a precipitate of history"
12. a behavioral map, sieve, or matrix
Clifford Geertz
Definition
A set of shared values, beliefs and expected behaviours
(e.g. Herbig 1994, Hofstede 1980, Hayton et al. 2002)

Values- more abstract and global/ general

Beliefs- more concrete/ about certain phenomena

Behaviours- response to both

 Origin of entrepreneurial
values:
Uhlaner and Turik (2007) claim that it is important to understand
the influence of cultural values, because they are ‘imbedded in
population and change more slowly than does economic policy and
may thus provide an explanation for differential effects of similar
economic policies across cultures’.
Family

Role models

Knowledge

Support
Religion

Max Webber and his protestant work ethics

Religion is the richest source of values?

‘Monk’ or entrepreneur?
Education
What people learn at school helps them to decide to
be an entrepreneur

Education helps introducing entrepreneurial culture

to the society

With necessary knowledge it is easier to start a

business and to grow it

The more educated the better???- inventions

Environment for individualism
Climate for liberty, to control own destiny

Trust the individual and believe in individual

Where there are no individuals, only people and

masses, development does not occur. What takes
place instead is either obedience or uprising. (Grondona
2000)
Entrepreneurial environment is a combination of factors
that play a role in the development of entrepreneurship
(Gnyawali et al., 1994)

Socio-cultural environment creates attitudes towards

entrepreneurial activities

Despite the presence of favourable environment,

national culture is needed which will support individuals
who are motivated by factors such as financial rewards,
achievement, social career, and individual fulfilment, to
cultivate them into entrepreneurship. Some societies
value entrepreneurship, others do not.
Culture influences the supportiveness of the
environment to make it more legitimate to form a
business, but also the motives, values and beliefs of
individuals

different cultures emphasize different motivational

needs (opportunity vs necessity),

to some point culture is manifested through

behaviour. GEM (South America rates), ‘ penny
capitalism’ of women from the third world (Berger)
GEM data 2008
How?
Culture could be measured at the national, regional,
societal level, but the majority of studies is
performed on the national level

It enables to examine various entrepreneurial

characteristics across countries comparing values,
motives and beliefs

Association between culture and entry mode into

new markets (transaction costs)
National culture is likely to influence rates of
entrepreneurship by creating a larger supply of
potential entrepreneurs

The interdependent nature of the relationships

between cultural values, individual values and
beliefs

Are entrepreneurs different from

nonentrepreneurs? (McGrath et al. 1992)
Hofstede
Hofstede’s (1980) cultural dimensions:
five variables: inequality, togetherness, gender roles,
dealing with the unknown and time orientation
(Hofstede 1998)
The criteria for comparison are values.
According to Hofstede values are the most general
and unspecific ‘mental programs’ usually acquired at
an early age.
These values that can be distinguished between
nations are components of national culture.
Etzioni
Social legitimation can determine the level of
entrepreneurship between countries, but also within
one society in different periods (Etzioni 1987).
Depending on legitimation entrepreneurship can be
regarded in a society as the prime activity, as
acceptable activity, an activity suitable only for
minority or highly tabooed activity.
Entrepreneurs are treated here as actors of change
to adapt to changing environment and
entrepreneurship as the way to smooth the inevitable
transition.
Dissatisfaction perspective
The dissatisfaction perspective assumes that when
looking from the macro perspective entrepreneurship
exists as the result of differences in values and
believes between society and prospective
entrepreneurs.

a clash of values may drive entrepreneurs to proceed

into entrepreneurship in usually non-entrepreneurial
culture (Uhlaner and Thurik 2007)
Why?
The role of culture

Policy

International relations?

Business etiquette?

Entry mode
Culture acts as the conductor and entrepreneur as
the catalyst to entrepreneurship
Complex relationship exists among cultural values,
social institutions (e.g. intellectual property rights),
industry characteristics (e.g. industrial
concentration), and behavioural outcomes such as
entrepreneurship (Hayton et al. 2002)
Culture shapes and reinforces social institutions,
which over time reinforce cultural values. (George G.,
Zahra S. A. 2002)
Societies, cultures and mentalities are in a continual
state of development and change.
Key features associated with culture

Source: Entrepreneurship what triggers it? (Morrison A., 2000)

The impact of culture on business
Variations in value orientations (Kluckhohn and
Strodtbeck 1961)

The solutions to three universally shared problems:

people’s relationship to time, nature and other
human beings distinguish one culture from another.

They depend on the cultural background.

 Beware of Western universalism

The Western view of culture:

Everyone is basically the same inside.

Culture is all about food, language, customs, dress.
There is one rational way to live and one path of
development.
Democracy, human rights, individualism, capitalism
are for everyone.
Most non-Western countries are “less developed.”
In every culture in the world such phenomena as
authority, bureaucracy, creativity, good fellowship,
verification and accountability are experienced in
different ways. Although using the same words
people are unaware of cultural biases.

Internationalisation and common worldwide culture?

McDonald’s or Coca-cola as a common product to

worldwide market?

But what they mean to the people in each culture?

Organisational Culture
Culture as ‘the way we do things around here’
A management instrument that is seen as the key
factor in unlocking commitment and enthusiasm of
employees
The difference between formal and informal culture
Organisational culture offers a shared system of
meanings, it fills the gaps between what is formally
announced and what actually takes place
Culture is not static
Culture characteristics/ Summary

Culture is a social concept

Any collection of people who differ in thinking and
behaviour from others may be assumed to have a
culture.
It influences behaviour of entrepreneurs/ culture
helps to recognise opportunities
Culture is the context in which things happen; out of
context, even legal matters lack significance.
Discussion
Can entrepreneurship be regarded as an instrument
for changing the culture?

Does it involve the devaluation of tradition and

heritage?
Bibliography
Berger B. (1991) The Culture of Modern Entrepreneurship in: Berger B. (edit.) The Culture of Entrepreneurship, ICS Press, San
Francisco, California
Etizioni A., (1987) Entrepreneurship, adaptation and legitimation Journal of Economic Behavior and Organization Volume: 8
Pages: 175-189
George G., Zahra S.A. (2002) Culture and its Consequences for Entrepreneurship Entrepreneurship Theory and Practice Summer,
Pages: 27-39
Gnyawali D., Fogel D., (1994) Environments for entrepreneurship development: Key Dimensions and Research Implications
Entrepreneurship Theory and Practice Volume: 18 Issue: 4, Pages: 43-62
Grondona M, (2000) A Cultural Typology of Economic Development in: Harrison L.E., Huntington S.P. (edit.) Culture matters:
how values shape human progress, Basic Books
Hayton J.C., George G.I., Zahra S.A. (2002) National Culture and Entrepreneurship: A Review of Behavioral Research
Entrepreneurship Theory and Practice Summer, Pages: 33-52
Herbig P., (1994) The innovation matrix: Culture and structure prerequisites to innovation. Westport, CT: Quorum
Hofstede G., (1980), Culture’s Consequences: International differences in work related values. Beverly Hills CA: Sage Publications
Hofstede G.; (1998), A case for comparing apples with oranges: international differences in values, International Journal of
Comparative Sociology Volume: 39   Issue: 1   Pages: 16-31
McGrath R.G., MacMillan I.C., Scheinberg S. (1992) Elitists, risk-takers, and rugged individuals? An exploratory analysis of cultural
differences between entrepreneurs and non-entrepreneurs Journal of Business Venturing Volume: 7 Pages: 115-135
Morrison A., (2000) Entrepreneurship what triggers it? International Journal of entrepreneurial Behaviour and Research Volume:
6 Issue: 2 Pages: 59-71
Mueller, SL; Thomas, AS; (2001) Culture and entrepreneurial potential: A nine country study of locus of control and
innovativeness Journal of Business Venturing   Volume: 16   Issue: 1 Pages: 51-75
Uhlaner L., Thurik R. (2007) Postmaterialism influencing total entrepreneurial activity across nations, Journal of Evolutionary
Economics   Volume: 17   Issue: 2   Pages: 161-185
Weber M. (1930) The Protestant ethic and the spirit of capitalism, London: Allen & Unwin
Trompenaars F., (1993) Riding the waves of culture Understanding Cultural Diversity in Business, London: Nicholas Brealey
Publishing