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 groups 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 organizations 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 adulthoods 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 Gods favour.

Source: CAPE Fundamentals in Entrepreneurship Unit 1 (2015), N. Maharaj, B. Sanichar, N.

Mootoo, P. Rajkumar, Genisis Books.