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8.0 Culture and Small Business Success: Entrepreneurship and Small Business Enterprise Growth in Uganda
| Guest post by: Makerere University Business School |
Article Overview: It is possible that in the study of business, especially small business, there has been no attention to the subject of culture and its impact on business success. We appear to be taken for granted that the concept of business, which is a cultural pattern in different societies, is understood the same way everywhere. Discussing entrepreneurship we conclude that successful entrepreneurship entails certain behavioural patterns. That behaviour is shaped in a cultural setting. We also appear to take it for granted that the concept of profit, the end result of a business activity, as a common meaning in different cultures.
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Free Download - 9.0 Conclusions: Entrepreneurship and Small Business Enterprise Growth in Uganda By Makerere University Business School |
8.0 Culture and Small Business Success: Entrepreneurship and Small Business Enterprise Growth in Uganda
by
Waswa Balunywa
Director
Makerere University Business School
Kampala, Uganda
It is possible that in the study of business, especially small business, there has been no attention to the subject of culture and its impact on business success. We appear to be taken for granted that the concept of business, which is a cultural pattern in different societies, is understood the same way everywhere. Discussing entrepreneurship we conclude that successful entrepreneurship entails certain behavioural patterns. That behaviour is shaped in a cultural setting. We also appear to take it for granted that the concept of profit, the end result of a business activity, as a common meaning in different cultures.
Hofstede and other behavioural scientists have thrown some light on the understanding of culture and how it impacts on economic activity. In a major study, Hofstede (1992) describes the different cultures in different countries and comes up with what he calls cultural dimensions which give some explanation as to the behaviour of people in economic activities. Hofstede introduces four dimensions which he calls a number of phenomena in a society which occur in combination. These include power distance, individualism versus collectivism, masculinity versus femininity, and uncertainty avoidance.
The Different Cultural Dimensions
Hofstede argued that in society some people have more power than others and therefore can determine the behaviour of others. This phenomena he called power distance and argued that in different societies some people can openly disagree with their superiors while in others subordinates do not disagree with their superiors. The former is a low power distance and the latter is a higher power distance.
In conditions where the power distance is great and there is high respect for authority, Hofstedes studies concluded that in African and Asian countries, the power distance was high. Such situations are typicalised by over centralisation of authority and deep hierarchies. The result is slow decision making, lack of initiative and low creativity. This is against the tenets of entrepreneurship.
Another dimension is that of individualism versus collectivism. Individualism characterises societies where individuals look after themselves and are not dependent. In collectivist societies, people are integrated into strong cohesive groups. The concept of the extended family working for the common good tend to be prevalent in collectivist societies. Business works well under individualistic cultural patterns. African society and indeed Asian societies are collectivist. Entrepreneurship will work better in conditions where there is pursuit and desire by an individual to succeed.
In the femininity versus masculinity concept, the former pertains to societies where the gender roles are distant and men are regarded as assertive and tough while women are seen as modest and tender. In the feminist society the gender roles overlap. Western societies are said to be masculine and in the economic arena the best man wins. Managers are assertive and decisive. In the African and Asian societies, the work place is characterised by compromise and negotiation. The masculine society tends to agree with the entrepreneurial roles while the feminine society does not.
The uncertainty avoidance dimension is what Hofstede calls the extent by which people feel threatened by uncertain situations. While Hofstede does not define this as risk taking, it amount to attitudes to risk. In the African Societies there is a high degree of uncertainty avoidance while in the western and Asian societies there is a low degree of uncertainty avoidance. Entrepreneurship behaviour is associated with risk taking and consequently the African entrepreneur may not necessarily be a risk taker.
Another dimension introduced by Harris M. Bud which tends to emphasise the earlier points is that of long term versus short term orientation. Harris concludes that Asian societies are long term oriented than African societies and even western societies are short term oriented. Long term orientation tends to support economic growth.
The Play of the Cultural Dimensions
The various cultural dimensions tend to favour only western countries and yet in the 70's and 80's we witnessed the emergence of the Asian countries as economic power houses. It is only the uncertainty avoidance and long term orientation that tends to support the growth in the Asian societies. The African society tends to be disadvantaged under these dimensions.
In the definition of entrepreneurship, search for opportunity and exploiting it are important constraints. In the studies that have been undertaken (Sewannyana, 1997; Mutazindwa, 1997), this is identified amongst Ugandan entrepreneurs. But I have failed to get an explanation as to why generally the Ugandan peasant does not emerge from the grass thatched house and walking barefooted amidst the resources that there are in the country. The Japanese people with their natural calamities have a high survival instinct (Ouchi, 1981) and they have taken leadership in many business areas despite the absence of economic resources. Uganda and indeed her neighbouring sister countries, Kenya and Tanzania, have failed to modernise agriculture through irrigation despite the abundance of water resources. It is common to read of drought in these countries. What has happened to the initiative that our entrepreneurs should have. Do we expect the small business to succeed in those circumstances?
McClelland (1961) argues that successful entrepreneurs are unusually creative and have a high propensity of risk taking and a strong need for achievement. Is this characteristic of the African enterprise.
There is need to look at the impact of culture on entrepreneurship and on business. We cannot ignore culture as an environmental factor that plays a role in success of business especially small businesses which tend to be localised in nature.
1.0 Abstract: Entrepreneurship and Small Business Enterprise Growth in Uganda
3.0 The Growth of Small Enterprises - the Problem: Entrepreneurship and Small Business Enterprise Growth in Uganda
9.0 Conclusions: Entrepreneurship and Small Business Enterprise Growth in Uganda
6.0 Constraints to small business growth: Entrepreneurship and Small Business Enterprise Growth in Uganda
4.0 What are Small Scale Enterprises?: Entrepreneurship and Small Business Enterprise Growth in Uganda
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