||Like it? PLEASE +1 it! Thanks!|
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 Articles1.0 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
18.0 Conclusion: Entrepreneurs and entrepreneurship in Africa
12.0 The Entrepreneurial Firm Corporate Governance: Entrepreneurs and entrepreneurship in Africa
Writing Phenom David S. Fick Talks with Benin Mwangi! Part Two
SMEs - South African SMEs and development capital
4.0 The African Entrepreneur Race/Ethnicity: Entrepreneurs and entrepreneurship in Africa
7.0 Conclusions: Gender Entrepreneurship and Competitiveness in Africa 2007
17.0 What Needs to be Done - Mainstreaming Entrepreneurship: Entrepreneurs and entrepreneurship in Africa
8.0 The Entrepreneurial Firm: Entrepreneurs and entrepreneurship in Africa
SME's - does protectionism help
6.0 The African Entrepreneur Behavioral Patterns: Entrepreneurs and entrepreneurship in Africa
California's Not a Big Entrepreneurship State
Crises Prevention and Development of Small and Medium Enterprises – SMEs - Summary of Implications and Recommendations - Part IV
6.0 The broader context: Gender Entrepreneurship and Competitiveness in Africa, 2007
Writing Phenom David S. Fick Talks with Benin Mwangi! Part One
SME's - collectivism yes or no
Home > African-Accounts > Journal of Development Entrepreneurship > 130 The Entrepreneurial Firm The External Environment Entrepreneurs and entrepreneurship in Africa > Google +
Free PDF Download
References: Constraints of growth-oriented enterprises in the southern and eastern African region
By Journal of Development Entrepreneurship
About the Author: Journal of Development Entrepreneurship
RSS for Journal of's articles - Visit Journal of's website
The Journal of Developmental Entrepreneurship (JDE) provides a forum for the dissemination of descriptive, empirical, and theoretical research that focuses on issues concerning microenterprise and small business development, especially under conditions of adversity.
Click here to visit Journal of's website.
More from Journal of Development Entrepreneurship
120 The Entrepreneurial Firm Corporate Governance Entrepreneurs and entrepreneurship in Africa
100 The Entrepreneurial Firm Networks Clusters and the Octopus Entrepreneurs and entrepreneurship in Africa
170 What Needs to be Done Mainstreaming Entrepreneurship Entrepreneurs and entrepreneurship in Africa
Information and Networks Constraints of growthoriented enterprises in the southern and eastern African region
References Constraints of growthoriented enterprises in the southern and eastern African region
Related Forum PostsRe: need advice
Fundraising for 3rd world Entrepreneurs
My Favorite Entrepreneur – created by Armand Rousso
Re: Newbie from Africa
Adventure travel to Africa.
Share this article. Fund someone's dream.
Share this post and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.
By: Evan Carmichael
By: Evan Carmichael
||Like this page? PLEASE +1 it!|