Tweet

13.0 The Entrepreneurial Firm The External Environment: Entrepreneurs and entrepreneurship in Africa

Guest post by: Journal of Development Entrepreneurship

Article Overview: The third category of factors accounting for the success or failure of entrepreneurship is the external environment within which both the entrepreneur and the firm exist and operate.

13.0 The Entrepreneurial Firm The External Environment: Entrepreneurs and entrepreneurship in Africa

(Journal of Developmental Entrepreneurship, Oct 2002 by Kiggundu, Moses N)

The third category of factors accounting for the success or failure of entrepreneurship is the external environment within which both the entrepreneur and the firm exist and operate. The external environment includes a number of sundry factors including local and national politics (Buame, 1996), the quality of public administration (Ng & Yeates, 2000; Svensson, 2000), personal and national security, militarism, family, society and culture (Dia, 1996; Sam, 1998). It also includes the market, technology, the physical environment, the regional and global economy and society (Kiggundu, 1989; Trulsson, 1997; Jorgensen, et al., 1986), and the prevailing industrial relations system. The individual and interactive effects of these factors on entrepreneurial success, varies across time and space. Drawing on the experiences of recent political and macro-economic reforms, it would appear that an enabling environment for entrepreneurial development is necessary, but not sufficient by itself, to sustain changes in entrepreneurial behavior and firm performance.

Government policies, attitudes, overall quality of public administration and service to entrepreneurship, or lack thereof, have long been blamed for entrepreneurial problems in Africa (Elkan, 1988; Kallon, 1990; Ng & Yeats, 2000; Svensson, 2000; Koop, et al., 2000; Rasheed & Luke, 1995). Ng and Yeats found that the African business climate is less favorable than other regions, which compete with Africa for trade and investment. Taxation, security of property rights, and the regulation of trade and other commercial activities are more restrictive in Africa than other globalizing regions. Koop et al observed that "the business environment in Uganda is tough" (2000, p. 64). Both Buame and Kallon reported that public attitudes and societal values in Ghana and Sierra Leone respectively are not supportive of the underlying values of capitalism in general and entrepreneurship in particular.

Kalabule (Ghana) and Magendo (Uganda) are two societal practices, which illustrate the challenges of African entrepreneurship. Kalabule and Magendo both refer to illicit, improper, or illegal business conduct. They are used to criminalize entrepreneurial activities in order to allow those in positions of control and influence to make quick and illegal money. According to Buame, Kalabule ruled in Ghana in the 1990s, and during that time, no commercial law, no banking law, no company law, and no laws of ethics were in force. Lawlessness and corruption inflicted people in different occupations including taxi drivers, managers, police officers, military personnel, teachers and public servants. In addition to undermining the legal framework and the national integrity and regulatory system, both Kalabule and Magendo undermine trust and confidence among the entrepreneurs, which form a critical part of the foundation for private enterprise (Langseth & Stapenhurst, 1997; Pope, 2001). Practically every African country has its own version of Kalabule and Magendo at great cost to the entrepreneurs, the general economy, public administration, and the wider society. Reforms aimed at eliminating Kalabule and Magendo are not only good for the small entrepreneur trying to survive in a tough business environment, they ultimately help to define and shape the future of the continent, and its place in the global economy and global society. Table 1 lists the correlates of entrepreneurial success relevant for the external environment.

Related Articles
  1.0 What is known and what needs to be done: Entrepreneurs and entrepreneurship in Africa
  14.0 What Needs to be Done - Producing Useable Knowledge: Entrepreneurs and entrepreneurship in Africa
  3.0 The African Entrepreneur Personal Traits: Entrepreneurs and entrepreneurship in Africa
  15.0 What Needs to be Done - Producing Better Research: Entrepreneurs and entrepreneurship in Africa
  SME's - still a strong component in the South African economy

Article Tags: Africa, Buame Kalabule, entrepreneur, entrepreneur, entrepreneurial success, entrepreneurs, entrepreneurship, environment, environment, external environment, public administration, public administration, Svensson



Related Forum Posts
Re: need advice - Africa is a pretty big place I think it is a question of where in Africa you would like to open a call centre. South Africa for example actually has plenty of call centres already operating, so it would very much depend on what part of Africa you are considering. MichelleJ
Fundraising for 3rd world Entrepreneurs - How great to learn that Evan is doing something for Entrepreneurs in Africa! It just makes me even more thankful to be part of this forum! After helping create a new charity for animals in my local community last year, I created a vision for a charity empowering Women Entrepreneurs. It won't happen for a while yet, but I know it is something I will do within the next few years. As we allow ourselves to think bigger, the opportunity to impact people becomes much bigger as well. Does anyone else have a desire to really make a difference in the world through this means?
My Favorite Entrepreneur – created by Armand Rousso - My favorite Entrepreneur.com is a very exciting intellectual adventure to which serial entrepreneur Armand Rousso invites all around the world enthusiastic people, who, are fervent believers in the virtues of entrepreneurship to contribute. People are asked to express their opinions and to share their views about those who are generally considered to be among the most successful entrepreneurs in the world, not only in the United States and in Europe, but also in Asia and Africa.
Re: Newbie from Africa - Hello Biiyke Welcome to the forum. Which part of Africa are you from it is quite a big continent? I live in South Africa. MichelleJ
Adventure travel to Africa. - Africa is a place where adventure is taking place. If you are a travel who loves adventure, nature, culture you should visit Africa. Safari Village operator is a .leading tour operator in Kenya who are offering marvelous tour packages to Africa. Saffari Villages Online is a trusted name for africa travel.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Living on The Edge of Chaos...

Why We MUST Reinvent The Wheel

African Technology Development

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.