Analysis of the Position of Female Entrepreneurs in the Middle East - Essay Example

? Analysis of the Position of Female Entrepreneurs in the Middle East Introduction “As societies of the Arab Middle East and North Africa (MENA) confront the process of democratic change, no issue offers more formidable challenge than the unequal status of women” (Nazir and Tomppert, 2005 p1). Clearly the status of women in the Middle East and North Africa (MENA) is a major component that defines the people in the region. This is often presented in a negative and oppressive format in the Western media. As such, there is a wide disparity and a seemingly negative perspective about the way women are treated in the MENA Zone. In the West, most women compete on equal footing with men. This is because there are laws that are enshrined in the legal codes of most nations in North America and Europe that guarantee the rights of women. It must however, be pointed out that women were also oppressed in the West until the process of emancipation was initiated gradually in the early 21st Century (Stevenson, 2010). Also, the world order has sought to initiate changes and equalities in gender matters since the formation of the United Nations in 1945. However, this appears to be moving at a gradualist pace rather than in a revolutionary patter. In the Middle East though, Nazir and Tomppert identify that there is systematic discrimination that is entrenched and inherent in law, criminal justice, economy, heath care and education that keep women oppressed and limited in what they do (2005). It is identified that the communities in the MENA region maintain a strict patriarchal status (Moghadam, 2007). This is a system whereby a woman is seen as weak and as such, the society deems it a necessity for men to protect women from what they perceive to be against the honor of women. Typically, a girl is under the protection of her father. When she becomes a woman, she evolves to the care and protection of her husband. When she raises her children and they grow old, the male children have the duty of protecting their elderly mothers. As such, the progression of women is overshadowed by the fact that they have a unique and different role from men. Although this is often seen by most people in the Middle East and North Africa to be in the best interest of women, it stands in the way of gender equality and promotion of the interests of women and their ability to exercise their free will. Currently, globalization is forcing people in all parts of the world to make changes and harness equality and similar patterns in all aspects of life (Moghadam, 2007). This means that there is the need for women to be given equal rights and fairness. The king of Saudi Arabia, who by default requires to exercise the highest levels of Islamic purity [his title is the Custodian of the Two Holiest Sites of Islam: Mecca and Medina] has acknowledged that the kingdom's approach to issues like women's right need to change since the world around them is changing gradually (Ramady, 2010). However, for changes to occur meaningfully, there is the need for the financial emancipation of women in the Middle East (Keddie, 2007). This will require a degree of guaranteeing the rights of women to get an earning capacity (Keddie, 2007). Female entrepreneurship is therefore an important and crucial element that needs to be attained through the financial emancipation of women. This is one of the most important ways through which the women of the Middle East and North Africa can catch up with their male counterparts and hasten the move towards the emancipation and equality of women that has been proposed through the current reforms in Arab and Islamic nations. Based on this background, this research will examine important elements and aspects of female entrepreneurship in the Middle East. This will attempt to diagnose the status quo of female entrepreneurship in the Middle East and figure out the important aspects and elements that has led to these trends. The paper will also examine critical solutions to the issues that would be raised in the study. In attaining these ends, the following objectives will be addressed: 1. An assessment of the motivations for female entrepreneurship. 2. An analysis of current trends of female entrepreneurship in the Middle East. 3. Identification of challenges of female entrepreneurship in the Middle East. 4. Recommendations on how to reduce the challenges relating to female entrepreneurship in the Middle East. The research is conducted through a critical review of literature. This review would entail an analysis of journals which provides in-depth knowledge of recent studies and research on the subject at hand. Also, some books are critiqued to give a strong analysis of the current position of female entrepreneurship in the Middle East. Motivation for Female Entrepreneurship Female entrepreneurship has gained popularity in the world over the past four decades (Simpson, 2011). This is mainly due to the fact that there have been a growing trend of women starting and running businesses. Also, the promotion of feminist studies and other methods of empowering women has led to an inevitable desire to learn more about businesses that are owned and ran by women (Simpson, 2011). There are many reasons attributed to prompting women entrepreneurs into entering business. DeTienne and Chandler identify that female entrepreneurship revolves around four main things: 1. Opportunity recognition 2. Network 3. Financing and 4. Performance (2007). In other words, these four things are the main foundations through which women form or control businesses. Usually, women identify a brilliant opportunity that causes them to formulate a strategy and organization to exploit that opportunity (Carter and Brush, 2005). Thus for example, a woman identifies that there is the market for a given product or service. She then assesses herself and realizes that she has what it takes to form a sustainable entity that would exploit the opportunity in an optimal manner. This causes her to form and start a business. Also, some female businesses can be formed solely because of networking. This is because some women might get opportunities through referrals and other friends' suggestions. On the other hand, it is commonplace to find that networking becomes one of the tools through which most female businesses thrive, grow and expand. Financing has to do with raising capital and keeping a business going. This is because most businesses need capital. Financing is a major variable in female entrepreneurship because it is one of the main variables which is open to manipulation in places and areas where discrimination is rife and somewhat common. Another variable that tends to be very important is the situation of performance. If a woman enters a business venture that is competitive and not so friendly to females, her performance would justify whether the business would continue to exist into the future or not. This therefore implies that performance and the need to work hard and remain at the top of the industry or market is central to female entrepreneurship. As such, it is one of the main motivations of this branch of business. In an analysis of the views of some female university students in the United Arab Emirates Gallant et al (2010) took the views of young ladies between ages 18 and 21, the main motivations for female entrepreneurship that was identified included: 1. Female entrepreneurship contributes to job creation. As such, a woman might want to go into business to create more jobs. 2. Women often enter businesses because their actions assist in providing solutions to social problems. 3. Other respondents stated that women become entrepreneurs because it allows them to bring competition into the economy. 4. Some stated that women form businesses because it enable them to unravel their personal potentials. 5. Others stated that it contributes to an increase in wealth on the part of women (Gallant et al, 2010). Kedar identified that most of the factors that draw women into entrepreneurship in the most part of the world and Middle East can be categorized into push and pull factors (2009). The push factors include those factors that forces a woman to start her own business whilst the pull factors are those positive factors in owning her personal business. The main push factors include the drive for independence and the need to raise enough money to support her family (Moghadam, 2007). Typically, some women might want to do something to support the income at home. In other cases, a woman might have no other option but to work hard and earn enough money to survive (Jamali, 2009). This is common with the situation of a divorced woman in the Middle East who loses a lot of social benefits after being thrown out of her husband's house (Kedar, 2009). Such a woman would either have to work and make a living or starve. Pull factors on the other hand refer to the forces in the environment that encourages a woman to start a business. Typically a woman might have the resources, support or talents to set up a given type of business. This would keep this woman motivated and enable her to form the business and see it through. Women businesses tend to be small (Bruni et al, 2008). In other words, the businesses that women set up and run are less capitalized and have a lower turnover when compared to other male businesses. Bruni et al explain that this is as a result of the fact that women do not consider entrepreneurship to be a career in most situations (2008). As such, they only do what they need to do and often desist from aggressive expansion and growth drives that can guarantee an increase in the size of the business. Richardson et al also identify that women are often the sole owners of their businesses (2004). This is because many of them want a degree of independence that might not be possible in other forms of business structures. Sadi and Al-Ghazali (2010) examined a different dimension of the motivation of female entrepreneurs in Saudi Arabia. They studied how men view the motivation of female entrepreneurs and how women view it. It was discovered that most women identified that females found some attributes to be more important motivators than men. The women stated that they think that female entrepreneurship is growing because women seek to work independently, improve their social status and pursue the profit motive. Male respondents on the other hand identified that women went into entrepreneurship because there were limited job offers and they sought to get more control and freedom in their activities. This shows that women found female entrepreneurship to be steeped in the quest for independence and social status whilst men viewed it with some degree of pessimism. This is because men saw female entrepreneurship to be a necessity for the unemployed women and also a desire for freedom and control which they were denied in most Middle Eastern communities. Structures and Trends in Female Entrepreneurship In this section, various research works conducted by scholars on the elements and trends of female entrepreneurship are examined. This involves important elements of female entrepreneurship that defines the role of women business owners in the Middle East and North Africa in the world today. In a study at the United Arab Emirates, it was identified that most female entrepreneurs in the Middle East were first time business owners and they mainly controlled start ups (Hanifa et al, 2009). The study included an interview of 19 female entrepreneurs in UAE. Over 60% of the respondents started their businesses between 2000 and 2004 when the Emiratization of the country began. This process sought to improve Emirati business control and encourage women to take part in economic activities. However, it is noted that most of the respondents (Over 70%) stated that their businesses were in female-oriented jobs like beauty, trade in feminine products, education and human resource/legal consultancy works. Ahmed (2011a) studied important features and patterns in the lives of female business owners in Saudi Arabia. The study was meant to provide a general view of female entrepreneur in Saudi Arabia with the view of generalizing the findings of the study in the entire MENA region. This was to follow up a couple of studies and findings presented in a conference at Dubai in the view of increasing understanding of business and regulatory frameworks for female entrepreneurs. In the study, Ahmed examined 202 registered businesswomen, 62 unregistered businesswomen and 50 prospective businesswomen in four cities in Saudi Arabia. It involved face-to-face studies which was meant to collect information about business conditions. It was identified that female entrepreneurs operate in several fields that are often restricted and typical of females in the region this included education, consultancy, beauty services and child related services. It was discovered that most of the successful women in the Middle East were married women with children between ages 25 and 44. This implies that most of the women are often older because of the fact that they are required to take care of children. Ahmed (2011a) identified that the Saudi female entrepreneurs were well educated and very confident. This implies that they have the important skills and competency to succeed in business. He also confirmed that most of the women were sole proprietors rather than operating their businesses in any other format. In terms of employment, Ahmed made a significant finding. The study identified that most of the female entrepreneurs in Saudi Arabia employed an average of 6 to 19 workers. In other words, they employed just a few people. Also, most of their employees were female non-Saudi workers. Those who employed men had them as part-time workers who worked in very specialized roles. It was also identified that female entrepreneurs in Saudi Arabia operated in only one city. Most of them were also not involved in international trade. This shows that they are often geographically limited. Challenges of Female Entrepreneurship in the Middle East There are several challenges that are faced by female entrepreneurs throughout the Middle East and North Africa (MENA). These challenges seem to be quite common throughout the region and most writers seem to have a consensus on most of them. Ahmed (2011a) identifies that in Saudi Arabia, there are four main challenges that affect women, they include: 1. Unclear regulations and policies affecting women's businesses 2. Belief that most societal regulations are discriminatory. 3. Reliance on male relatives to complete registration process. 4. Endure extra female-specific challenges that male entrepreneurs do not face This implies that there are clear cut discrimination issues that need to be addressed on different levels. Ahmed also goes on to state that there is financial discrimination and cites that 82% of the women formed their businesses with their own personal savings and working capital from their families and friends (2011a). This is because there is limited formal finance available to women throughout the Middle East and North Africa. In his follow up to the studies, Ahmed identifies that there is gender bias and poor access to the markets amongst female entrepreneurs (2011b). Aside these issues, there is another issue with bureaucracy with government institutions. This is because most of the government institutions put in place rigid and stringent requirements that most female entrepreneurs cannot meet. Additionally, it is identified that the trust with bankers is not strong when it comes to female entrepreneurs. This is because most of them get small sized loans and the tenure for repayments are very short (Ahmed, 2011b). Also, there are restrictions on tertiary educated women. This is because these women are often restricted because top class entrepreneurial ventures are reserved for men in most instances. Additionally, Ahmed identifies that blending childcare and business was very challenging (2011b). Javadian and Singh (2012) identified some shocking challenges amongst women entrepreneurs in Iran and classified them under four dimensions. First of all, he states that there is a general lack of self confidence amongst women entrepreneurs because women are raised to abandon self belief. Secondly, the system requires female entrepreneurs to take more risks when compared with their male counterparts. Thirdly, there is pervasive gender stereotype which makes it difficult for women to succeed in business. There are also cultural and traditional issues steeped in Shiite thought which requires women to play a subservient role in society. Hossam et al (2009) confirms the social problems that women face. They state that in Bangladesh, there are issues with negative relative and friends' advice. There is religious bias which requires women to do things other than start and run their own businesses. Secondly, most women find themselves to be entrepreneurs basically because there is a requirement for them to work and survive, rather than work to add something to the world. As such, such jobs are more of survival based rather than expansion and growth based. There is a serious discrimination in marketing because female entrepreneurs have a limited networking system. Advocacy activities are also limited and women are often left on their own with limited collective voices to further their needs in the wider community. Jamali (2009) identifies that the problems of female entrepreneurs exists on three different dimensions: macro, micro and meso. In the micro level, there are opportunity identification problems which are due to lack of education and limited work experience. Also, the push motivation and other limited financing abilities creates further micro level problems for female entrepreneurs. On the macro level, there are issues with the legal environment which has oppressive laws, there are issues with the normative environment which includes conventions and other discriminatory practices that target female entrepreneurs. There are also economic issues which define the macro level which include exploitation and limitations. In the meso level, there are industrial challenges like excessive competition from male-ran businesses, prejudice on the markets and other inter-business issues. Recommendations on how to Reduce Challenges Most of the studies identified cogent solutions to the numerous challenges faced by female entrepreneurs in their bids to find suitable positions in the world of business. These solutions were mainly related to the wider society and/or the individual female entrepreneurs. Ahmed (2011a) identified that the solution to the problem relates to women's organizations and financial institutions. It is suggested that women's organizations should adopt programs to improve the view of women entrepreneurs as role models for up and coming girls in high schools and universities. This would inspire them and encourage them to break the cycle of male dominated societies. Ahmed (2011a) suggests that women's organizations should run courses that would encourage women to become more knowledgeable and efficient in their operations on the market. This would mean that women would be taught more about how to market and promote their products to the wider society. Also, it is desirable for women's groups to educate women about how to navigate the regulatory framework and encourage women to register their businesses and bypass the various barriers. Such organization should also encourage women entrepreneurs to build strong networks that would enable them to succeed in business. On the other hand, financial institutions need to be encouraged to view female entrepreneurship in a different light. They should be made to understand that female entrepreneurship does not really cause any harm to the society as a whole. Rather, they should be made to know that it would help them grow as institutions. They should be encouraged to conduct regular research about female entrepreneurs, change their financing options and ensure that there are incentives to attract female entrepreneurs (Ahmed, 2011b). On the personal level, Gallant et al (2010) identify that it is important for each female entrepreneur to get some competencies in order to succeed on the market. A female entrepreneur needs to get the following requirements right: 1. Create business plans and business concepts 2. Understand the business environment 3. Get a good knowledge of marketing 4. Get a good knowledge of the legal and financial framework. On the other hand, there are some important arrangements that a female entrepreneur might need to work out in order to gain some success in the Middle East. Hanifa et al (2009) identify in their research that proper time management, appropriate outsourcing and child care arrangements are important elements of success amongst female entrepreneurs. The Role of Governments Although the recommendations on an institutional and individual level is valid, there are some issues that cannot be changed unless the commitment of the governments of Arab and Islamic nations are sought. Since various governments, including the Monarchy of Saudi Arabia has show a great commitment towards changing the situation at hand, it is apparent that there is some room for change. Ahmed (2011b) states that nations like Saudi Arabia should set up a Ministry of Women's Affairs to implement decrees that are meant to eliminate the discrimination that female entrepreneurs go through. Also, it would be desirable for the governments to appoint females to top positions. This would provide the blueprints for further emancipation of women and encourage those with business ideas to carry them out. Also, laws that require women entrepreneurs to appoint male managers should be repealed and a public campaign to promote women's economic welfare should be put in place. It is also important that credit conditions and restrictions that are imposed by banks would be reviewed by government authorities. This will ensure that laws would be made to encourage banks and financial institutions to reduce the discrimination that they mete out to women. Another area that governments can have a direct control would be to limit bureaucratic processes relating to registering businesses in relation to female entrepreneurs. This is because the bureaucratic requirements are a lot for them. As such, it would be best if the government could intervene and encourage female entrepreneurs to register and go about their businesses in a much more flexible manner. Conclusions Female entrepreneurship is often based on push factors which forces women to go into entrepreneurship. As such, female entrepreneurial ventures in the Arab world are often small and are mainly sole proprietorships. Also, most female entrepreneurial ventures undertake trades that are commonly carried out by females in the Middle East. And typically, such businesses are carried out by women with older children, educated and confident. Most of their employees are female non-Saudi workers and they are often restricted geographically to one branch in only one city in the Arab world. Most of them have no international branches of their businesses. The main challenges that female entrepreneurs face in the Middle East and Islamic countries include unclear regulations affecting women's businesses, discriminatory practices, conventions and prejudiced mindsets. Female entrepreneurs are faced with bureaucratic systems that require more than what they require from male entrepreneurs. Also, financial institutions are reluctant to provide capital support. The social structures also mean that more women are faced with limited educational prospects and childcare. This is worsened by the social system which causes women to lack self confidence, exposure to higher risks, gender stereotyping and cultural and traditional biases. It is recommended that women's group should encourage networking, advocacy and training amongst female entrepreneurship. Also, financial institutions should be encouraged to be less stringent to women in business. Women should also draw personal balances in their lives to be able to discharge their social duties alongside their business activities. However, it is noted in the research that the governments of the Middle Eastern countries are indispensable parties in the quest for positive change. Governments might need to set up Ministries of Women's Affairs to carry out decrees that seek to emancipate female entrepreneurs. There should also be rules that reduce discrimination in various institutions in the business sectors. References Ahmad S. Z. (2011a) “Business Women in the Kingdom of Saudi Arabia: Characteristic Growth Patterns & Progression in a Regional Context” Equality, Diversity and Inclusion: An International Journal Vol 30 No 7 Ahmad, S. Z. 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