Andy Wynter (0921531)

Module: 6BU001 - Researching Business and Management Issues

Literature Review

1.

Political

Too many black people in Britain today are being denied the opportunity to start their own business and get on in life. (David Cameron 2010). Burns (1978, p.18) explains that leadership is excersised when persons.. mobolize.. institutional, political, psycological, and other resources so as to arouse, engage, and satisfy the motives of followers. Mobolization of organisations such as The Ethnic Minority Advisory Group (EMAG) could indeed promote the cause of more Afro-Caribbean leaders as they are the advisory body to the government and best placed to influence Government policy. Burns also recognises the importance of the political influence. Without the political will to promote leadership amongst the Afro-Caribbean community it could be more difficult to improve the level of entrepeneurs and leaders from this ethnic group.

The Ethnic Minority Advisory Group are an independent body formed in 2003 who advise the Government on issues faced by ethnic minority groups with particular emphasis on the employment disadvantages they may encounter. The EMAG have recently commissioned a number of task groups to examine ethnic minority issues including ethnic minority people and enterprise. (EMAG 2011) The question of how effective the EMAG has been in producing more successful Afro-Caribbean business leaders and entrepreneurs by lobbying the Government and influencing policy will be the research undertaken. In addition the research will analyse what development stratergies and frameworks the EMAG have undertaken and if the traditional leadership development programs would be benefical to the organisation or whether a new approach is required to address the issues of this particular minority group. Whilst there has been extensive research published on leadership development in general, there is less research that has specifically studied what bodies such as EMAG have done in this area and how effective they have been in improving the prospects of Afro-Caribbean entrepreneurs. There is a literature on black entrepenurial issues, however a large amount of the theory is based on experiences in the United States, which are not always relevent to the issues faced by ethnic minorities in the United Kingdom and in particular those of Afro-Caribbean decent. There is significant research on women and enterprise and it may be possible to employ some of the theories and methods when discussing Afro-Caribbeans and enterprise. The literature review will critically analyse what has been written and evaluate their strenghts and weakneses.

2.

Social

Price, A (2007) Quotes Antony Jay, who is ruputed to have said success is when preparation meets opportunity Price argues that preparation is dependant on the efforts of the individual, but opportunity is linked to other factors such as economic, social, education and other people. He goes on to suggest that it is society that determines who is given those opportunities through a process of discrimination. This argument

Andy Wynter (0921531)

Module: 6BU001 - Researching Business and Management Issues

may have some merit and raises the question of how to tackle the discrimination that may affect Afro-Caribbean entrepreneurs from succeeding. If a particular group has economical, social and educational disadvantages, does this mean that they cannot succeed or does society need to tackle these disadvantages to ensure a level playing field? However, it could be argued that many entrepreneurs of different ethnicity have succeeded dispite not having the advatages of a good education or being brought up in a good social and economical enviroment. Lord Alan Sugar, one of the United Kingdoms most successful entreprenuers came from a humble background in the East End of London, leaving school at 16. (BBC 2007). Duncan Bannatyne, another of the UKs successful and well know entreprenuers also came from a poor background and it is reported that this background was a driving factor in his determination to be successful. (BBC 2012). Society can be an important factor in the success of entrepreneurs. Organisations such as EMAG can assist in changing mindsets and influence Government in legislation that makes it easier for disadvantaged groups, nonetheless the individual must have the drive, ambition and tenacity to succeed. The staus quo, Price, A (2007), argues is constructed to benefit certain types of individuals from particular backgrounds. He believes that this denies opportunities to women and minority groups. This argument is strenghthened by the paper into ethnic discrimination in the UK Market for small business credit conducted by Fraser (2008). In his conclusion he suggests that Black Caribbean firms are more likely not to apply for loans and he cites their fear of rejection as a reason. Fraser suggests that ethnic minorities may need to address the lack of financial skills and overall financial management. He does not conclude that the lack of business loans was due to any evidence of discrimination, even though some from ethnic minorities may feel that is the reason. He concludes the report by suggesting addressing the cultural differences, one of the reasons for the delinquency of Black Ethnic firms is a more difficult propostion to overcome. In 2010 the Deputy Prime Minister, Nick Clegg ordered an investigation to this issue which has not been resolved since Frasers report. The investigation was ordered into the why black business entrepeneurs find it harder to obtain loans and when they do are often charged higher rates. The Deputy Prime Minister will raise fears that minority groups are not viewed evenly by lenders and argue that there is a moral and economic case to stamp out any prejudice they could encounter. (The Independent 2011). This issue, and the fact that it does not appear to have been addressed emphasizes the point made by Price with regard to the status quo. Some may argue that staus quo is far more fluid than is suggested such as the recent improvement in the number of Black Students attending University. In 2007-08, 16% of students from the UK studying for degrees were from a black, Asian or ethnic minority background. This is almost 2% higher than the 14.2% of the 18-24-year-old age group as a whole (BBC 2010). This increase may lead to greater opportunities for ethnic minorities to enter the business sector and develop their entrepreneurial skills. In his analysis of ethnicity and immigration, Burns (2011 p.45) suggests that one of the reasons for high selfemployment amongst British Asians in comparison to black Caribbeans appears to be family background and expectations. He provides little evidence for this statement other than a vague suggestion that traditionally Asian families value selfemployment. This appears to be a generalisation and does not add any weight to the question of why Afro-Caribbeans entrepreneurial levels are so low and how enabling organisations can assist them. It is not a fair argument to imply that black Caribbean families do not share the same entrepreneurial expectations as Asians or any other ethnic group.

Andy Wynter (0921531)

Module: 6BU001 - Researching Business and Management Issues

Lowe (2006 p.150) cites Barsu (1999) when identifying the push and pull factors that influence ethnic minority entrepreneurship. The pull factors he identifies are: independence; financial improvement; high social status; greater personal control; best use of expertise; identification of growth market opportunities and niche markets. These pull factors could be identified for most ethnic groups including white British entrepreneurs. The push factors are more specific to ethnic minorities and include: lack of salaried employment; underpaid work; discrimination in labour market and redundancy. However in the current economic climate a number of these push factors could also be attributed to white potential entrepreneurs. In addition it is unlikely that if these push factors were resolved that the low rate of black entrepreneurs would decrease any further. Lowe (2006 p.151) also addresses the issue of geographical locations of minority businesses. He explains that many of these businesses are often located in inner cities where deprivation is more prevalent and these businesses are constrained by the poor economy in these areas. He concludes this issue by suggesting more networking opportunities should be sought in the broader market. This argument has some merit and the coordination of organisations such as EMAG need to be addressing this issue with efforts to improve regional opportunities for ethnic business groups. It is a potential flaw in the EMAGs strategy that they are based in the capital and all their meetings are in London, even though many of their members operate outside of the capital.

3.

Leadership development

Leadership and leadership development has been extensively examined and written about by numerous authors. Yulk (2010, p.20 ) cited Stogdill (1974, p. 259) who suggested that there are almost as many definitions of leadership as there are persons who have attempted to define the concept. The different interpretations of leadership and how best to develop leaderships skills continue to be a challenge for individuals and organisations such as EMAG. The development of leadership skills by way of formal training, development activities and self help activities as outline by Yulk (2010 p. 423) are all effective methods in enhancing the skills of individuals. However, Yulk does later examine the question of whether leadership theories of one culture can be used in other cultural groups. Consideration has to be given to the problem of the perception that a particular group may be at a disadvantage in obtaining the initial selection for these development programs. Diversity training is one approach that is examined in fostering appreciation and tolerance of other cultures (Yulk 2010, p.472).

There is no one development process that appears to fit every groups needs, more over it could be argued that the traditional leadership frameworks such as Boldens intergrated framework (2006), can only work if the National Governments own agenda allows individuals and organisations to take that journey. Boldens map for intergrated framework for leadership development illustrates the journey for both the individual and the organisation in five main steps. The framework starts with direction setting moving onto structure and process, leadership development, learning transfer and finally evaluation and review. This road map or framework can be effective within organisations, who are in a position to take control and develop these types of stratergies for their individual employees and the organisation. Whether this framework could be adapted for the wider

Andy Wynter (0921531)

Module: 6BU001 - Researching Business and Management Issues

community, would need to be examined. One of the keys to its success is the context in which it operates. The organisation in this case could be the Government and advisory bodies such as the EMAG. The direction setting such as the values, ethics, principles and strategic priorities would be the foundation that the government could build on the other steps. The evaluation and review process in any project is an essential element that must be carefully considered. It could be argued that not enough evaluation of current stratergies has taken place and has indirectly led to the slow progression of Afro-Caribbean entrepreneur numbers. This should be a function role for independent bodies such as the EMAG. If stratergies are not proving successful then they should quickly be reviewed, adapted or changed and those recommendations need to be monitored against implimentation targets.

Leadership development, which can then lead to Afro-Caribbean business people moving onto their own enterpise means that current organisations recruitment of Afro-Caribbean workers is an important first step. Tate (2011) cites Chapman (1991) who suggested that leaders are more likely to recruit in their own image. This appears to have some validity in the United Kingdom and could be a credible argument in explaining the disparaty between Afro-Caribbean leaders and those from other ethnic groups. If there are a low number of Afro-Caribbean business leaders, then the likelihood of a considerable increase is questionable. Tate argues that this approach of recruiting in your own likeness could have a detremental effect on an organisation, as it could prevent a new and diverse compentency entering the organisation.

The question of whether organisations should use alternative selection procedures such as quotas requires further examination. Should organisations be forced to include at least one person from an black or ethnic background or even go further with all black shortlist if there is an exsiting disparity within the organisation. Positive discrimination as a tool to recruit more women and ethnic minoritiy MPs was reviewed by a cross party group who concluded that proposed mandatory quotas on political parties for the number of

women they put forward as parliamentary candidates if there is not a ' significant' increase in the number of female MPs in the forthcoming General Election. (Daily Mail 2010). If such a proposal was considered acceptable for parliament, then it could also be a reasonable argument for positive discrimination in the boardrooms of some of the UKs top companies, which may lead to greater numbers of ethnic minority recruiters recruiting potential black and Afro-Caribbean potential entrepreneurs. A similar proposal was also considered by the Players Football Association. When considering the lack of black football coaches, one of the suggestions put forward was to force football clubs to shortlist black candidates for management and coaching roles within their organization. (Daily Telegraph 2011) When referring to positive discrimination or affirmative action Yulk (2010 p.473) argues that these programs are far more encouraging to an organization, rather than imposing reverse discrimination. The environment for this type of regulation appears to have changed over recent years, where society is becoming more accepting of the need to use more radical methods in improving opportunities for black people.

Whilst any proposal to improve opportunities for Afro-Caribbean and black entrepreneurs should be encouraged there are some potential negative outcomes to positive discrimination. Would a black

Andy Wynter (0921531)

Module: 6BU001 - Researching Business and Management Issues

person recruited into a senior role to address the disparity in organizations be viewed as the best person for the job or simply as the person who got the job, because he or she was black? Moreover, would any black person want to accept a senior position under this type of recruitment criteria? How effective would a black business leader be under such circumstances? It may be that these initial disadvantages to positive discrimination would only be short term and would deteriorate once this person had established themselves and proved like any other senior manager their capabilities. A successful black business leader would be viewed in exactly the same way as a white successful business leader if both were running a profitable business. It would be unfair to assume an unsuccessful black business leader would be viewed as a failure, simply because he or she was black.

4.

Education

Matley H(2008) cites Hannon (2006) in arguing that education and entreprenuership are linked and can determine the capacity for success. Moreover, it is suggested that enterprise education has had a positive impact on students from Poland and France. The possession of information allows entrepreneurs to recognise opportunities that others do not (Kirzner 1973). If students of ethnic minority origin are performing at a lower level than their white conterparts, then it could be argued that they will be unable to recognise these opportunities. Although this argument has merit, it is too simplistic to suggest that a higher attainment by British Afro-Caribbean students would automatically lead to more Afro-Caribbean entrepreneurs. There are many other barriers that could hinder the progression of a well educated Afro-Caribbean student in the wider world of enterprise. Even so, the issue of education has to be addressed. Addressing the issues of equal opportunity, Yulk (2010. p.473) refers to the advantages of mentorship programmes that can offer the mentee guidance, advice and encouragement. This will be a key area in the authors research. The question of whether Afro-Caribbean business leaders are effectively being used in peer mentoring programmes has to be scrutinised. In his analysis Miller (2002) discusses the benefits of minority ethnic mentoring schemes. The premise of such schemes is that ethnic minorities face disadvantages and barriers in both their educational and employment opportunities including entreprenurial opprtunities. William Morris. Patron of the National Black Boys Can Association is quoted as saying The education system in the UK has been failing black boys for years. It has been recognized that a sound education offers benefits to young people that exceed financial prospects." (Theos Hodos 2004). The education of potential Afro-Caribbean entrepreneurs should be the foundation on which every other strategy is built upon. Tony Sewell, Chair of the London inquiry into schools and founder of the charity Generating Genius recently argued that there has been a long period of anti-racism education, but I am not convinced it's had much impact on black children. The fastest improving group is Nigerian girls; two groups standing still are black Caribbean boys and working-class white boys." (The Independent 2012). While black Caribbean boys continue to lag behind on the educational front it is

Andy Wynter (0921531)

Module: 6BU001 - Researching Business and Management Issues

difficult to comprehend how they will develop into successful entrepreneurs without some fundamental changes to educational strategies for this ethnic group. In Millers analysis, the issue of mentee for black students is researched. The issue of trust is one of the key benefits of any mentor scheme, mentees are more likely to trust a mentor who may have experience similar disadantages and have a greater understanding of the problems of the mentees. It could be argued that the role of Afro-Caribbean business leaders in advancing such schemes is important if the EMAG are to be succesful in their overall development stratergy. Students need to be aware of the opportunities that are available to them and the successful paths that other black and Afro-Caribbean entreprenuers have taken. As part of the EMAG recent task on education and skills, they are examining the entire educational experience of ethnic minority people (EMAG, 2011). The research will discuss whether as part of this examination role-modelling and same ethnicity mentoring for Afro-Caribbean students should form part of their educational experience. If any such scheme is to be undertaken, then it would have to be coordinated by organisations such as EMAG. In addition the ability to measure and analyse such a scheme would need to be formatted prior to any launch. There is however a potential problem to such a scheme, where Afro-Caribbean students have already fallen behind in the traditional academic subjects such as maths and English. It could be argued that early intervention is required, almost at primary school level and that a mentor should be allocated to a student and their family as early as year four in primary education. This type of early intervention would undoubtedly require the support of the government and additional government finance. The Governments Pupil Premium(Department of Education 2012) initiative could be used to fund mentor schemes in these deprived areas. At present there is no directive from the government on how this additional funding should be spent by Head Teachers. This is where the EMAG could and perhaps should exert their influence on government policy. The Government has already identified the benefits of a mentor scheme for potential black entrepreneurs. David Camerons proposal in March 2010 was to fund a national mentoring scheme for black entrepreneurs who wanted to start their own business. He explained It will provide would-be black entrepreneurs with the targeted support, advice and, crucially role models they need to access finance and work for themselves, (The Guardian 2010). Whilst this proposal is an important step in promoting the idea of more black and AfroCaribbean entrepreneurs, it does not address the educational barriers that are faced by this group; any effective mentoring program firstly needs to tackle the initial barriers of self-confidence, education and inclusion.
5. Further research

The literature addressing the issues of black entrepreneurs are inconsistent and in many cases based on evidence of experiences over 20 years ago. Even some of the most recent literature refers to research conducted over four years previously. All business is fast moving, the economy, social issues and political changes mean that relying on outdated literature to form opinion and base current research is not always credible. There is a need for coordinated, in-depth and detailed research into the current experiences of existing black and Afro-Caribbean businesses and the experience of the entrepreneurs starting and establishing these businesses. New statistical information on the birth and deaths of ethnic minority businesses against other businesses and the reasons for

Andy Wynter (0921531)

Module: 6BU001 - Researching Business and Management Issues

the failures need to be anaylisesd. The EMAG is well placed to commission these far reaching examinations and can influence the Government to be more specific in its own research and statistics. This research will only examine what the Ethnic Minority Advisory Groups is doing to improve the opportunities for potential Afro-Caribbean entrepreneurs and present recommendations for further research to be conducted in the advancement for organizations targeting this ethnic group.

Andy Wynter (0921531)

Module: 6BU001 - Researching Business and Management Issues

References:

BBC.(2012) Dragons Den Duncan Bannatyne[online]. [Accessed 3 January 2012] Available at:< http://www.bbc.co.uk/dragonsden/aps/duncan_bannatyne.shtml> BBC.(2007) Profile: Sir Alan Sugar[online]. [Accessed 3 January 2012] Available at:< http://news.bbc.co.uk/1/hi/business/6923678.stm> BBC.(2010) Rise in ethnic minority students at UK universities[online]. [Accessed 3 January 2012] Available at:< http://news.bbc.co.uk/1/hi/education/8493894.stm>

Bolden. R(2008) Leadership Development in Context [online]. [Accessed 20 December 2011] Available at: <http://www.leadershipsouthwest.com> Burns, P. (2011) Entrepreneurship and Small Business. Start-up, growth and maturity 3rd ed. Hampshire: Palgrave Macmillan. Cameron, D (2010) UK retailers in talks to join government's 'green deal' [online]. [Accessed 20 November 2011] Available at: http://www.guardian.co.uk/environment/2010/oct/06/green-deal-uk-retailers> Daily Mail(2010) Parliament to set quotas for women and minority MPs[online][Accessed 3 January 2012] Available at:< http://www.dailymail.co.uk/news/article-1242184/Parliament-set-quotas-women-minorityMPs.html#ixzz1ixMy59Ax> Daily Telegraph (2011) Football clubs may be forced to shortlist black managers[online]. [Accessed 3 January 2012] Available at:< http://www.telegraph.co.uk/sport/football/competitions/premier-league/8747629/Footballclubs-may-be-forced-to-shortlist-black-managers.html>

Department of Education(2012) Schools Funding Settlement 2011-2012 and Pupil Premium[online]. [Accessed 6 January 2012] Available at: <http://www.education.gov.uk/schools/adminandfinance/financialmanagement/schoolsrevenuefunding/settleme nt2012pupilpremium>

Ethnic Minority Advisory Group(EMAG)(2012) Who we are - DWP[online]. [Accessed 3 January 2012] Available at:< http://www.dwp.gov.uk/emag/who-we-are/> Fraser. S (2008) Is there ethnic discrimination in the UK market for Small Business credit [online]. [Accessed 20 December 2011] Available at: <http://www2.warwick.ac.uk/newsandevents/pressreleases/black_entrepreneurs_4/wp96.pdf> Jowit, J (2010) UK retailers in talks to join government's 'green deal' [online]. [Accessed 20 November 2011] Available at: <http://www.guardian.co.uk/environment/2010/oct/06/green-deal-uk-retailers>

Kirzner (1973) Competion and Entrepenuership London. The University of Chicago Press Ltd Lowe, R. and Marriott S. (2006) Enterprise: Entrepreneurship and Innovation. Concepts, Contexts and Commercialization 1st ed. Oxford, UK: Elsevier Ltd. Matlay, H (2008) "The impact of entrepreneurship education on entrepreneurial outcomes", Journal of Small Business and Enterprise Development[online][Accessed 20 December 2011] Available at:< http://www.emeraldinsight.com/journals.htm?articleid=1728120&show=pdf>

Andy Wynter (0921531)

Module: 6BU001 - Researching Business and Management Issues

Miller. A (2002) Mentoring Students and Young People[online]pp. 89-106 [Accessed 30 October 2011] Available at: <http://ebascohost.com> Price, A(2007) Human Resource Management in a Business Context,3rd ed.UK. Thomson Learning

The Independent( 2011) Banks face probe into 'racist' lending practices[Accessed 3 January 2012] Available at:< http://www.independent.co.uk/news/uk/politics/banks-face-probe-into-racist-lending-practices6267066.html?origin=internalSearch>

The Guardian (2010) David Cameron promises to support black entrepreneurs[online][Accessed January 2012] Available at:< http://www.guardian.co.uk/politics/2010/mar/17/david-cameron-support-black-entrepreneurs> Yukl, G (2010) Leadership in Organisations. 7th Global ed. New Jersey: Pearson. (1,2)