Difference in Practices of Ethnic Entrepreneurship - Essay Example

Difference in practices of Ethnic entrepreneur ship and its effects on their Businesses s introduction: Ethnic minorities business is now a well-known and growing feature of the modern-day Britain. The ethnic entrepreneurship is making a major contribution to the revival of the small business. According to the Global Entrepreneurship Monitor (GEM), US is one of the nations, which has a considerable increase in entrepreneurial activity. Ethnic minority-owned businesses in U.S are drastically contributing to the growth of the region's economy. There has been a growing interest in United Kingdom on the high rate of self-employment among ethnic minority groups. The ethnic minorities are entering into self employment, entrepreneurship and small business because of the various reasons such as the obstacles they face in labor markets these obstacles can be classified into two factors, push and pull (Clark and Drinkwater, 2000). The entrepreneurship is often associated with four of the most important symbolic attributes humans strive for: 1. Achievement and recognition 2. Status and respect 3. Freedom and control 4. Power On the other hand, entrepreneurship is put down to the way in which certain entrepreneurs behave. Behavior and characteristics of ethnic entrepreneurs has caused much debate, many academics have stamped their authority on the subject by declaring five, six or even more than ten key characteristics of an entrepreneur, in many cases this research contradicts one another and these characteristics differ across national boundaries. Different countries adopt entrepreneurship in different ways. This paper will help to identify key characteristics of an ethnic entrepreneur and to build a coherent argument in order to see the extent in which the ethnic entrepreneurs are motivated to start-up their own business. Aim The aim of this research is to find out the differences in the practices of ethnic entrepreneurs and their effects on businesses. Objectives Following are the aims of the study: To review the literature about this issue up till now. To improve the awareness about the differences in the practices of ethnic entrepreneurs. To analyze the advantages and disadvantages of different norms. Reasons for Choosing this topic The fundamental reason for choosing this topic is that having searched literature I found that very few works have been conducted concerning the impact of practices of ethnic entrepreneurs on their businesses. Since most of the studies have been focusing on the differences of performance levels of native and non-native entrepreneurs. Some of them have focused on the effects of the contributing factors in the difference of performance levels. This fact has encouraged me to do this piece of work in order to contribute to the existing knowledge about the subject by adding a new point of view to find out the effects of ethnic entrepreneurs' practices on their businesses. Another reason is that most of the researchers give least importance to entrepreneur's norms while undertaking the evaluation, of different businesses. The dissertation will also highlight the problems faced by the ethnic entrepreneurs while undertaking business in US. research design Philosophy Research is a fact finding activity (Dominowski, 1980). The aim of primary research is to make known something previously unknown to human beings and to advance human knowledge by making it more certain or better fitting; the aim is discovery (Elias, 1986). Kerlinger (1970) uses more technical language to define it as the systematic, controlled, empirical and critical investigation of hypothetical propositions about presumed relations among natural phenomena. The research philosophy depends on the way we think about the development of knowledge and this thinking affects the way we do search (Saunders 2000). Whilst undertaking the research, a clear understanding of research philosophy is essential. Easterby-Smith et al (1997) identify three reasons why the exploration of philosophy may be significant with particular reference to research methodology: Firstly, it can help the researcher to refine and specify the research methods to be used in a study, that is, to clarify the overall research strategy to be used. This would include the type of evidence gathered and its origin, the way in which such evidence is interpreted, and how it helps to answer the research questions posed. Secondly, knowledge of research philosophy will enable and assist the researcher to evaluate different methodologies and methods and avoid inappropriate use and unnecessary work by identifying the limitations of particular approaches at an early stage. Thirdly, it may help the researcher to be creative and innovative in either selection or adaptation of methods that were previously outside his or her experience. Two views about the research process dominate the literature: positivism and phenomenology which have an important part to play in educational research (Saunders, 2000). Positivism is founded on the belief that study of human behavior should be conducted in the same way that as studies conducted in the natural sciences. On the other hand phenomenology is concerned with the understanding human behavior from the participant's own frame of reference (Hussey and Collis, 2003). Positivistic paradigm Phenomenological paradigm Tends to produce quantitative data Tends to produce qualitative data Uses large samples Uses small samples Concerned with hypothesis testing Concerned with generating theories Data is highly specific and precise Data is rich and subjective The location is artificial The location is natural Reliability is high Reliability is low Validity is low Validity is high Generalizes from sample to population Generalizes from one setting to another Figure 1: Features of the two main paradigms (Hussey and Collis, 2003) As the research philosophy depends fundamentally on the research question (Saunders 2000), the phenomenological philosophy has been chosen in this paper. This choice originates from that researcher's topic/question that aimed to find out the practices of ethnic entrepreneur ship and their effects on their businesses. In this specific research, -related to the question- the author will collect data and develop a theory as a result of data analyses rather than developing a theory and test it afterwards. Methodology Qualitative techniques stand in contrast to quantitative techniques, the main difference being that quantitative techniques involve numerical data whereas qualitative techniques involve more abstract information. Data collected using qualitative techniques do not generally lend themselves to statistical analysis whereas quantitative techniques do (Veal, 1997). A mixed methodological approach will be used in this research, because mixing methods enables the insufficiencies of both qualitative and quantitative methodologies research design to be overcome and can assist with data collection and data analysis (Jennings, 2001). Interviewing An interview is a purposeful discussion between two or more people. It enables you to gather valid and reliable data that are relevant to tour research question and objectives. There are three types of interview; structured, semi-structured and unstructured interviews (Saunders et. al, 2000). A semi-structured interview model will be utilized as it: Is flexible, not standardized. Enables me to gain an analysis, explanation and description in relation to my research aim and objectives. Facilitates the exploratory nature of my research gives me an opportunity to discover issues I have not considered before. Interviews provide in-depth information about a particular research issue or question. They are designed to gather a broad range of information from a few units. They are the best method to get detailed answers about your questions. They are also the best method for pre-testing, where researcher is seeking individual interpretations and responses. The main disadvantage of interviews is that they are time consuming, and that the respondent may feel like 'a bug under a microscope' and be less willing to open up than in the relaxed atmosphere of a group (Research solutions 2005). Choosing interviews for this stage of this part of the research was in order to get as much information as possible from the few people that will be interviewed. Interview questions will be compiled from the existing literature and detailed in relation to the research topic, aim and objectives. Questionnaires In the questionnaires method of data collection the researcher can precisely obtain the information that he asks for and these information can be analyzed in an easier way than if choosing another method. In addition to that questionnaires are not an expensive method of data collection, and they don't take long time to fill in. On the other hand questionnaires have some disadvantages such as: they do not have a high response rate, the wording of the questions can cause bias to the client's responses, and the questions might not be designed correctly, which will result in collecting unneeded answers (McNamara, 1999). Choosing questionnaires for this step was due to the relatively large sample size that the researcher intends to include in his research, and for the cheap cost of this method comparing with other data collection methods. A sample of 10 non-native Entrepreneurs from different organizations will be involved in the questionnaire, because the larger the sample size is the more adequate the results will be and the more generalizations can be drawn from the research. DOCUMENTATION REVIEW: The aim of this method is to review how the program operates, without interrupting it, it can be performed through memos, review of applications, finances etc, the advantages to this method are, and comprehensive and historical information can be obtained. The disadvantages are the process is time consuming, there is not flexibility to collect the data, and the data may be incomplete. The review of different studies and journal articles will be undertaken in order to achieve deep knowledge regarding the topic. Analysis On there own, data are rarely used in their original form. Through the process of data analysis, value is added to the data to turn them into information. It is information rather than data which users especially policy and decision-makers are interested in (Uganda bureau of statistics, 2005). However this will be a very sensitive and critical stage in my research process as misinterpretation or over-interpretation is always a potential risk. The process of data analysis in this research will include the following steps: Indicate the date of the questionnaires. Who completed them, and the number of returns Categorize the data collected. Reading through the questionnaires and interviews carefully and coding them after the event in relation to the types of answers, themes and issues, and thencategorizing of response (keeping a note of what the codes refer to). Then by asking some questions like what are the answers that keep repeating, what are the deviations from these answers, and Are there themes emerging Contradictions Then it would be possible to draw some related generalization. literature review: Ethnic in this perspective is referred to as a group of individuals who share a common culture, have feeling of belonging and of a common ancestral origin. The immigrants will form an ethnic minority in their adopted land. For example West Indians in Netherlands, Greeks in USA, Vietnamese in Canada etc. (Dyer, 1997) The ethnic entrepreneurship can be divided into two major categories. In one category the economic and the market conditions affect the frequency of new business start-ups as well as the types of the business in which the entrepreneurs of various ethnicities are likely to become involved. They will be involving in the services, which serve the unique needs of their co-ethnics. In the second category is the interest in the characteristics of particular ethnic groups, which might encourage entrepreneurial activities. One of the characteristics such as blocked mobility. The immigrants limited knowledge of the culture, language, discrimination and securing jobs in the existing firms, a viable alternative in this inhospitable work environment in the adopted land strikes out ones own. The traits of risk taking and ambition are found to be more in immigrants than the norm. The decision of immigrating to a foreign land often stems from an acute desire to get ahead and tolerance for uncertainty and risk. (Dyer, 1997) Ethnic entrepreneurs are main force behind the rapid growth in the small scale business (SMEs) in US. These SMEs are contributing to a large extent to the American economy. The next section will discuss on the importance of ethnic entrepreneurship. Ethnic Entrepreneurs Characteristics The people who set up their own business are likely to have special characteristics; in other words they are unlikely to be drawn randomly from the population as a whole (Stanworth and Curran, 1973). To define the profile of entrepreneurs, one must first examine the characteristics that represent that persona there are many attributes that imply an intuitive basis for entrepreneurial behavior. Based on the entrepreneurial personality there are certain key characteristics which have been identified on abilities of an entrepreneur 1. Calculated risk taker 2. Innovative 3. Need for achievement 4. High internal locus of control 5. Ambiguity tolerance 6. Vision Innovation is identified as the frequent functional characteristic of entrepreneurs (McClelland, 1961; Hornaday & Aboud, 1971; Gartner, 1990). It is suggested that creativity and innovation were conditions inherent in the role of entrepreneurship. (Timmons, 1999) The Need for Achievement (NACH) (McClelland, 1961) is been an essential characteristics of an entrepreneur and Locus of Control (LoC) (Rotter, 1966) are both the individual difference measure which have been frequently used in the studies of entrepreneurial activity. Research suggests that entrepreneurs who had previous start-up experience were more satisfied and successful than those in their first venture were. (Box, Watts and Hisrich, 1994), (White and Barr, 1993) have found that the entrepreneur's years of prior experience in the industry were completely connected with firm performance. Age and years of formal education have also been shown to correlate positively with entrepreneurial firm performance. (Birley and Norburn, 1987) The decision to behave in an entrepreneurial way is based on more than personal characteristics and individual differences. The interaction of personal characteristics with other important perceptions of situational factors needs to be better understood. For example, (Reynolds, 1992) proposed three factors that may affect an individual's decision to start a new firm 1. The characteristics of the economic context 2. The characteristics of the individual's life or career context and 3. Underlying personal disposition Based upon this and other existing literature, five major categories of variables are believed to interactively influence an individual's decision to behave in an entrepreneurial way. Those variables are 1. Entrepreneur's personal characteristics 2. Individual's personal environment 3. Relevant business environment 4. Specific business ideas and 5. Goals of the entrepreneur (money/financial gain) In addition, it is hypothesized that the entrepreneurs considers both his and her ability to develop and implement an effective business strategy and whether or not the outcomes accruing from ownership would be equal to the desired or expected outcomes, financial status and levels of success would prove to be good measurements. To find or examine or to predict in some cases, entrepreneurial behavior, individual attributes such as attitudes and personality traits have been the core of many studies. Numerous researchers pursued the search for personality differences between entrepreneurs and non-entrepreneurs in the early 1980s, much of the research focused on traits such as the need for Achievement, Levels of control, and Risk-taking tendency. (Brockhaus, 1982) and (Brockhaus and Horwitz, 1986) there are Non-trait types of personal characteristics such as family status, gender, and growing up in an entrepreneurial family also influence an individual's decision to act in an entrepreneurial way. Possible limitations of the research Lack of literature of research done so far concerning the topic. Another limitation might be lack of time. The researcher will follow a hybrid approach in data collection, which will include interviews and questionnaires. Collecting data through these methods, analyzing and demonstrating them is time consuming and the researcher does not have much time. There might be challenges in convincing to gain access to the relevant information required within the educational institutions I intend to research. Confidentiality has been a barrier before researchers. It is required to reassure the business organizations that all data and information collected will be treated in the strictest confidence. expected end-product/expected outcome A research study which will result in shape of important and helping results to find out the differences in the practices of ethnic entrepreneurs and their effects on their businesses. budget time schedule The study will be undertaken according to the following Gantt Chart Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Introduction Literature Review Methodology Interviews Data Interpretation Results Compilation Results and Conclusion References: Birley, S. and Norburn, D. 1987. Owners and managers: The Venture 100 vs. the Fortune 500. Journal of Business Venturing, 2, 351-363. Box, T.M., Watts, L.R., and Hisrich, R.D. 1994. Manufacturing entrepreneurs: An empirical study of the correlates of employment growth in the Tulsa MSA and rural East Texas. 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