Does culture endure, or is it malleable? Issues for entrepreneurial economic development

Rita Gunther McGrath, Ian C. MacMillan, Elena Ai Yuan Yang, William Tsai

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193 Scopus citations

Abstract

This study explores the extent to which social interventions designed to encourage entrepreneurship need to take into account the culture of the target population. Those who carry out enormously expensive interventions to encourage entrepreneurship can thus begin to recognize where the "Western" model of entrepreneurship must be adapted to take into account enduring, intractable cultural values. The comparison of values among Mainland Chinese, Taiwanese and American entrepreneurs provides a special opportunity to explore this issue. For 50 years severe and unrelenting ideological pressures have been brought to bear on the base Chinese culture in these two countries. Therefore, we can start to uncover where culture predominates and where ideology predominates. Where culture predominates and endures: • Chinese and American entrepreneurs should show different patterns of response • Taiwanese responses should be similar to Chinese responses Where culture is eroded rapidly by ideological forces, and is thus relatively malleable: • Taiwanese and American entrepreneurs should show similar patterns of response • Taiwanese responses should be more similar to American responses. This study used survey data obtained from entrepreneurs in each of the three countries. Respondents were asked to indicate their degree of agreement to questions relating to 14 different cultural norms. These questions are related to cultural dimensions first identified by Geert Hofstede. These dimensions are: 1. Power Distance-management of inequality between people; 2. Individualism-the relationship between individuals and collectives; 3. Uncertainty Avoidance-stance toward the future; and 4. Materialism-the degree to which material rather than spiritual ends are pursued. Discriminant analysis was used to determine whether or not statistically significant predictions of group membership would emerge from the overall pattern of aggregated responses. In addition we ran three sets of simple t-tests on the top-twenty discriminating variables comparing each country pairwise. The results of the three-way discriminant analysis shows that all three groups were found to be sufficiently different to permit a high degree of accuracy in predicted group membership. Results indicate that along the individualism/collectivism dimension of culture, collectivist values are generally highly enduring. Fifty years of exposure to very different ideologies have done little to break down the traditional collectivist Chinese culture that is each groups' heritage. The results for power distance, in contrast, indicate that it is more malleable and can shift in the face of ideological pressures. Uncertainty avoidance does not appear to have moved in the direction of a Western model; rather, the Taiwanese have adapted ancient Confucian beliefs into a dynamic, future-oriented set of values that has been identified by other authors (Hofstede and Bond 1988) as highly conducive to entrepreneurship. Finally, the analysis suggests that a "work to live" attitude is not easily replaced by a "live to work" attitude. The results of the research suggest two areas in which caution should be exercised in adopting models developed for one culture to the economic development problems of another. Collectivist cultures. The United States paradigm for entrepreneurial activity is set in a culture that values independent action, taking personal chances and self-reliance. Interventions that do not recognize, and cater to, such collectivist values run a serious risk of failure. Development programs that assume that individualistic values can be infused into a collectivist culture could be seriously compromised by the intractability of collectivist values as signalled by our results. In collectivist cultures a non-American model may be essential for the widespread fostering of entrepreneurship. We speculate that such a model might include a mechanism for consensual acquisition of resources and proceeding toward innovation in smaller, linked steps, a pattern that is more akin to a Japanese model than an American one. Attitudes toward work. Another highly intractable set of values appears to revolve around attitudes to the role of work. Programs that attempt to encourage entrepreneurs to come forward via "live to work" appeals (and such appeals abound) will make little headway in "work to live" populaces. Even in the United States we see significant amounts of scarce resources being devoted to encouraging disadvantaged groups to pursue careers in entrepreneurship on the argument that it is "exciting" and "self-fulfilling." People who "work to live" would respond better to arguments that stress wealth creation and upward mobility-a fact that has not gone unnoticed among the recruiters for the underworld. On the other hand it appears that, given time and given a host government that is supportive, there is no need to assume that programs that require changes in attitudes to power distance and increased risk-taking should not eventually take hold the evidence from our research suggests that such values are tractable.

Original languageEnglish
Pages (from-to)441-458
Number of pages18
JournalJournal of Business Venturing
Volume7
Issue number6
DOIs
StatePublished - Nov 1992

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