Entrepreneurial processes in different cultures: a comparative study of entrepreneurial processes in the Netherlands and Australia

Hal, K.G. van (2012) Entrepreneurial processes in different cultures: a comparative study of entrepreneurial processes in the Netherlands and Australia.

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Abstract:This report sets out to investigate the following research question: Does national culture influence the entrepreneurial processes used by entrepreneurs? To answer this main research question a comparative study of student-entrepreneurs in the Netherlands and Australia will be done. The two entrepreneurial processes that are identified in literature are effectuation and causation. Sarasvathy (2001) identifies five elements of both entrepreneurial processes: (1) beginning with a given goal (causation) or a set of given means (effectuation); (2) focusing on expected returns (causation) or affordable loss (effectuation); (3) emphasizing competitive analysis (causation) or strategic alliances and precommitments (effectuation); (4) exploiting preexisting knowledge (causation) or leveraging environmental contingencies (effectuation); and (5) trying to predict a risky future (causation) or seeking to control an unpredictable future (effectuation). National culture is described as ‘a shared set of basic assumptions and values, with resultant behavioral norms, attitudes and beliefs which manifest themselves in systems and institutions as well as behavioral patterns and non-behavioral items.’ (Dahl n.y.p.) Hofstede (2001) identified 5 cultural dimensions, this study uses the dimension ‘masculinity’ (MAS), which refers to the distribution of emotional roles between the genders. In low-MAS societies there is a focus on a given set of means and there are higher levels of selfesteem. This leads to hypothesis 1: Entrepreneurs in the low-MAS society of the Netherlands will rely much more on the effectual element ‘a given set of means’ than entrepreneurs in the high-MAS society of Australia. In high-MAS societies there is a very strong sense of competition and a focus on decisiveness and clarity. This leads to hypothesis 2: Entrepreneurs in the high-MAS society of Australia will rely much more on competitive analysis and the analysis of data than entrepreneurs in the low-MAS society of the Netherlands. A strong focus on alliances and relationships was identified in low-MAS societies, this leads to hypothesis 3: Entrepreneurs in the low-MAS society of the Netherlands will rely much more on alliances or partnerships than entrepreneurs in the high-MAS society of Australia. To test the overall relationship between the two constructs ‘entrepreneurial processes’ and ‘culture’, hypothesis 4 states: Entrepreneurs in the low-MAS society of the Netherlands will rely much more on effectuation reasoning when creating a new venture than entrepreneurs in the high-MAS society of Australia. 20 student-entrepreneurs in Australia and 20 student-entrepreneurs in the Netherlands were asked to go through a case study consisting of 10 decision problems about creating a new venture, whilst talking out loud. The sessions were recorded, transcribed and coded. The dependent variables were 6 the percentages of specific element usage or overall percentage of effectual reasoning. The independent variable used were the country scores on the Masculinity Index. The results were controlled for gender, age and on a Chandler scale. The study found that Dutch entrepreneurs do not rely more on ‘use of a given set of means’ than their Australian counterparts, hypothesis 1 is not supported. Australian entrepreneurs do rely more on competitive analysis and emphasize the analysis of data more than Dutch entrepreneurs, hypothesis 2 was supported. Dutch entrepreneurs did not rely more on alliances or partnerships than Australian entrepreneurs, hypothesis 3 is not supported. In general, Dutch entrepreneurs do use effectual reasoning more than their Australian counterparts, hypothesis 4 was supported. An analysis of this relation per problem area revealed that this relation is statistically significant for 5 out of 10 problem areas. The control variables ‘age’ and ‘gender’ did not have a significant impact on the results. It was discovered however that subjects tend to use effectual reasoning more in their own businesses than in they did in the case study. The results found in this report suggest that national culture has an influence on the entrepreneurial processes used by entrepreneurs. The findings imply that the direction of the relation is that the lower a country scores on the Masculinity Index, the more its entrepreneurs use effectual reasoning when starting up a new venture. The implications of these results are that the way business schools arrange their curriculum could differ according to the score of their country on the Masculinity Index. It also alters the way entrepreneurs conduct their business, they can adapt to the entrepreneurial process used most in that society. Another implication is that the findings in this report suggest that national culture does not influence all elements of effectual and causal reasoning, this could change the way researchers conduct their research.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Industrial Engineering and Management BSc (56994)
Link to this item:http://purl.utwente.nl/essays/62178
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