Research Article: 2018 Vol: 22 Issue: 1
Marwan Al-Shammari, University of Texas at Arlington
Hussam Al Shammari, Indiana University of Pennsylvania
The field of entrepreneurship as a subject of interest has been drawing growing attention in the past 10 years at a faster pace than ever before. This attention has centred mostly on two dominant constructs: Entrepreneurs and entrepreneurial activities. The lack of consensus in research findings is attributed to many factors, among which individual differences are considered important. In this part of the “two-part review”, we use literatures on biculturalism and entrepreneurship to posit that individuals with bi-cultural skills and experiences are more likely than others to trigger opportunities and thus to develop entrepreneurial behaviour. We focus on introducing the notion of cultures and variations in personality traits related to entrepreneurial behaviour.
Entrepreneurial Orientation, Biculturalism, Opportunity Discovery, Evaluation and Implementation.
Entrepreneurship is a complex phenomenon that has been drawing increasing attention by business scholars in recent years. Yet, most research has focused on the activities and the outcomes that accrue after the opportunities have been discovered (Shane, 2000). Eckhardt & Shane (2003) asserted the importance of the process of entrepreneurship as a key in the future entrepreneurship research. Moreover, opportunity is understood as the fulcrum about which the potential of entrepreneurship research is constructed (Shane & Venkataraman, 2000). In fact, it has been argued that an improved understanding of the underlying mechanisms and characteristics through which individuals develop entrepreneurial skills, identify and exploit opportunities may provide the field with a distinctive realm that distinguishes it from strategic management and other social science-related disciplines (Corbett, 2005; Venkataraman, 1997). This notion explains why scholars in the entrepreneurship and management arena have largely emphasized the individual entrepreneur’s role in all entrepreneurial activities throughout the entrepreneurship journey, beginning from the identifying or “creating opportunities” until the end “failure” or “success” of the entrepreneurial project (Ardichvili, Cardozo & Ray, 2003; Crocker & Eckardt, 2014; Harvey, 2005; Vaghely & Julien, 2010).
Researchers in management and entrepreneurship fields have used the opportunity concept as the key to scrutinize how individual traits, institutional characteristics and resource configurations impact entrepreneurial process (Companys & McMullen, 2007). A key part of the entrepreneurship definition provided by Shane and Venkataraman (2000) is concerned with who discovers, evaluates and exploits. (Hitt, Ireland, Camp & Sexton, 2001) posited that the three entrepreneurial stages: Discovery, evaluation and exploitation of entrepreneurial opportunities is of strategic importance for entrepreneurship scholars. The field has wandered in a variety of arenas in the pursuit of well-developed understanding of these processes, through which the entrepreneurial idea is triggered first, evaluated and then converted into a venture (Companys & McMullen, 2007). Many scholars have acknowledged that the individual differences and their influence on the previous processes of entrepreneurship are still under research (Casson, 2005; Shepherd & DeTienne, 2005).
Shane (2000) argued that individual differences influence the abilities of individuals in spotting the odds (opportunities) that would result from technological breakthroughs. This view is well-established in the Austrian economic approach. It emphasizes the individuals’ differences effects on their interpretations of the environmental changes, problems and thus their abilities to realize, process and spot any odds that can be later converted into economic opportunities that would achieve some gains for third party and for them as well (Patzelt & Shepherd, 2011). In this paper, we adopt this viewpoint. We focus on differences between individual entrepreneurs and how these differences affect the extent to which they would spot opportunities, evaluate and exploit them.
To accomplish our purpose in this research, the remainder of paper is structured as follows: We first review literatures on entrepreneurship and biculturalism and integrate them to identify the gaps and contributions of combining them. Second, we discuss literature on the role of the entrepreneur as an individual in the entrepreneurial behaviour by identifying the most cited traits, characteristics and features of those individuals across cultures. We show that by having two cultural exposures, a bicultural individual will be greatly different in the host country than a mono-cultural entrepreneur. Third, we discuss literature on biculturalism and show that there is enough evidence that suggests significant differences between bicultural and mono-cultural in a variety of management literatures.
In recent years, more scholars have come to an agreement that opportunity recognition or identification is the most crucial feature in the entrepreneurial comportment (Opportunity identification and entrepreneurial behaviour 2004; Ardichvili et al., 2003; Gaglio & Katz, 2001; Patzelt & Shepherd, 2011; Vaghely & Julien, 2010). Yet, scholars have diverged on the way they define the skills, abilities and knowledge needed to spot odds, problems and thus process information to determine whether an entrepreneurial opportunity exists. Many have focused on prior experiences that individuals may have undergone. Shane and Venkataraman (2000) introduced a novel framework that depicts the entrepreneurial process in 3 stages: Discovery, evaluation and lastly the exploitation of the opportunities. (Baker, Gedajlovic & Lubatkin, 2005) criticized this framework as it leaves little room for the effect of cultural and societal variations, across and within nations. Ardichvili et al. (2003) for example have focused on personality traits, social networks and prior knowledge as antecedents of entrepreneurial alertness to business opportunities. (Renko, Shrader & Simon, 2012) have argued that prior research has largely considered the notion of entrepreneurial opportunities from either one of two standpoints: Opportunities are seen as objective phenomena in the entrepreneurs’’ environment and only those who are alert can spot these opportunities or opportunities are subjectively viewed or even created by the individual entrepreneurs themselves.
Other scholars however have asserted that such opportunities are in fact external to the entrepreneurs and they come to exist as a result of social change or technology disruption (Casson & Buckley, 2010; Kirzner, 1997; Renko et al., 2012; Schumpeter, 1942; Shane & Venkataraman, 2000). At the same time, these scholars have not denied that such opportunities, although exogenous, but if they were to be exploited, individual entrepreneurs are the ones who do so and thus opportunities identification depends greatly on the cognitive abilities of individuals as suggested by Cuervo, Ribeiro, Roig & SpringerLink (Online service) (2007); L. Edelman & Yli-Renko (2010). The connection between opportunities and individual entrepreneurs has been agreed upon, though no consensus has been provided regarding the temporal precedency or the characteristics of those entrepreneurs.
Bicultural individuals who happen to develop entrepreneurial behaviour has been completely ignored in pretty much most of the entrepreneurship research. Biculturalism as a well-established construct in management literatures has been greatly emphasized by many scholars in the human resource, international business (expatriates), diversity, sociology and other disciplines (Bell & Harrison, 1996; Chau, 1991; Dau, 2016; LaFromboise, Coleman & Gerton, 1993; LaFromboise, 2010; Nguyen & Benet-Martínez, 2013; Tadmor & Tetlock, 2006). Tadmor & Tetlock (2006) argued that exposure to new culture will increase individual’s scope of attention, which is closely related to awareness and alertness (Oken, Salinsky & Elsas, 2006). Bell and Harrison (1996) defined biculturalism as “the state in which individuals maintain their distinctive cultures, including values, attitudes, customs, beliefs and habits while simultaneously interacting with and learning from those of other cultures”. (P.49). Combining the biculturalism and entrepreneurship literatures could greatly improve our understanding of the underlying reasons as to why some individuals can spot opportunities more than others do, while they may fail to evaluate them properly; select the best way to exploit them and thus fail in the initiation and growth stages.
Biculturalism literature suggests that there are benefits and resources matchlessly accessible to bicultural individuals, particularly when they are interpersonally experienced in both of the cultures to which they belong (Bell & Harrison, 1996; Bell 1990; Garza et al., 1982; Valentine, 1971). These arguments have been widely used in the HR literature, organizational diversity, as well as international business literature building on the diversity literature. Parallel to these arguments, biculturalism can be seen as a potentially positive element in the entrepreneurial processes, especially for those bicultural individuals who have come to settle in advanced countries, mostly bicultural in the US. Such element qualifies those who possess it competently to have a diverse cultural backgrounds, diverse norms and value systems and different experiences that lead them to develop and possess cognitive, affective and behavioural abilities. Consistent with the latter literature; this introductory research note proposes that biculturalism is a potentially positive quality in today’s gradually heterogeneous and global organizations. Specifically, because of diversity in cultural backgrounds, value systems and expectations and especially the developmental processes that led to their acquisition, bicultural people already possess perceptive, emotional and interactive inventories that can be valuable for developing entrepreneurial behaviour. These inventories, however, cannot be acquired solely through exposure to different cultures for short-time, as perhaps the case for the host country individuals, nor can it be acquired through cross-cultural training (Bell & Harrison, 1996). The bicultural capabilities are often developed and accumulated over a lifetime and hence may be regarded as individual differences of the potential entrepreneurs in a host country.
Understanding how bicultural individuals can become and remain parsimoniously prosperous is of great importance, especially in the development of entrepreneurship research. As (Sullivan, 2007) put it “Given that entrepreneurship is often a "way forward" for many Americans, it is critical to know how minorities are faring in entrepreneurial activities”. Sullivan suggested that minority entrepreneurs have lower rates of success than white entrepreneurs in the US context. Further, he argued that studies in this regard have presented quiet few explanations for this phenomenon such as differences in education, age, social context, financial resources, work background, credit market discrimination and perceptual differences related to start-up decisions. However, the entrepreneurship literature has yet to address the differences between biculturals and monoculturals with regard to their skills and abilities in different entrepreneurial stages: Recognition, evaluation and exploitation.
Research on bicultural individuals suggests that they have bicultural competencies that mono-cultural individuals don’t (Bell & Harrison, 1996). For example, bicultural have general culture awareness of both cultures beliefs and values and they tend to exhibit positive attitudes towards both cultural groups. Second, they have bicultural efficacy that enables them to effectively and efficiently develop a confidence that one can live within two groups, which may, in turn, enhance their flexibility to experience different and new situations. Third, biculturals have dual fluency as they communicate with two groups and they have broader repertoire. Lastly, they have stable social networks in both cultures (Bell and Harrison, 1996; Lafromboise, 1993; Lafromboise, 2010).
It is therefore imperative to see whether those individuals with bicultural skills, abilities, knowledge and other experiences will have greater likelihood of developing entrepreneurial behaviour, specifically on the opportunity recognition, evaluation, selection and exploitation behaviours. By studying the role of bicultural skills, abilities, knowledge and experiences; the contributions of this paper are threefold: First, to our knowledge, this is the first paper that introduces the idea of biculturalism into the entrepreneurship filed. Second, this paper sheds light on important component of any society in today’s business environment, which is bicultural as entrepreneurs and how might they differ from host country entrepreneurs (local entrepreneurs). Third, this paper considers for the first time the possibility of one-on-one alliances between bicultural entrepreneurs and local entrepreneurs as a way of improving the likelihood of success for entrepreneurial projects.
Much of the debate within the field of entrepreneurship, namely the nexus of individual and opportunities has centred on two economic perspectives: Neoclassical economic and Austrian economic. The neoclassical economic perspective (Baumol, 1993) emphasizes the market equilibrium notion, according to which, all participants have perfect knowledge. Gaps (opportunities) that arise in the market will be filled constantly by participants and thus there are no entrepreneurial opportunities to be exploited by alert entrepreneurs (Knight, 1965). In contrast, Austrian economic advocates emphasize the important role of entrepreneurs in the disequilibrium state of an economy under which opportunities do exist and arise. It is, therefore, under this condition the role of the entrepreneur who is alert to spot these odds and tries to make profit out of such opportunities (Schumpeter, 1942; Shane, 2000; Kirzner, 1997).
It is important to provide the entrepreneurial definition of opportunity as used by scholars in the entrepreneurship arena. Shane (2003) defined opportunity as a situation in which a person can create a new means‐ends framework for recombining resources that (s) he believes will yield a profit. Additionally, most of the work done by the Austrian economic scholars imply somewhat that opportunities are the result of collective activities at the macro-level, which leads to disequilibrium state of the economy and then it is left to alert individuals who seek to capitalize on the arisen opportunities under such conditions (the entrepreneurs). An implicitly agreed upon assumption seems to be the fact that opportunities do exist, but they are not necessarily created by the entrepreneurs. This leads to lay out the prevailing two assumptions:
First assumption: Both neoclassical and Austrian economics perspectives do not deny the mechanisms through which opportunities arise.
Second assumption: Individuals, who can spot these odds, are the ones who can be labelled as entrepreneurs. Although neoclassical economists may not explicitly agree on this, but they don’t deny it either, at least no solid evidence nor supported arguments regarding this view have been universally accepted, yet. As put simply by Cason & Wadesson (2007), “Opportunities, therefore, are a natural consequence of economic volatility. At any given time some opportunities will be recognized and exploited and others will be overlooked” (Casson & Wadeson, 2007).
It is therefore essential to go beyond these theoretical arguments to show that if individuals are key players in the field of opportunities and entrepreneurial activities; scholars need to get more closely to those who actually trigger the opportunities, initiate the new ventures and see what differences influence their entrepreneurial behaviour (Shane and Vankataraman, 2000). These differences may include, but not limited to, the following features: Cognitive schemas, informational processing abilities, opportunity identification processes, personal traits, education and other related features that activate their opportunity-seeking behavior, opportunity identification and entrepreneurial actions (evaluation and exploitation of opportunities).
Much of the literature has focused on the personality traits that might be used as distinguishing factors of entrepreneurs (Ardichvili et al., 2003; Klotz & Neubaum, 2016b; Omorede et al., 2015). In fact, Casson (2005) in his book review of Shane’s general theory of entrepreneurship asserted that, individual and opportunity nexus is one of the most fruitful arenas for future research in the entrepreneurship paradigm. There are several notions that scholars have come to agree upon regarding the underlying psychological traits that entrepreneurs might have in common (Faust, Balota, Spieler & Ferraro, 1999; Klotz & Neubaum, 2016b; Thomas & Mueller, 2001; Thornton, 1999).
Kendall and Hammen (1995) defined personality traits as “stable and consistent structures of individuals, characterized by patterns of thoughts, feelings and behaviors”. Personality traits have been heavily emphasized in the entrepreneurship literature when studying entrepreneurs as individuals (Ardichvili et al., 2003; Brandstätter, 2011; Caliendo, Künn & Weißenberger, 2015; Klotz & Neubaum, 2016b; Schmitt-Rodermund, 2004). For example, Brandstatter (2011) looked at five meta-analytic reviews that studied the personality traits and aspects of entrepreneurs. These meta-analytic reviews found that personality traits make a difference when entrepreneurs are compared to managers. More importantly, the review found that such traits are significant predictors of entrepreneurial intention and entrepreneurs’ performance.
Some of the more frequently reported traits of entrepreneurial individuals are, e.g. readiness for innovation, proactive personality, generalized self-efficacy, stress tolerance, need for autonomy and locus of control. These traits were found to be significantly associated with business creation and business success (Brandstätter, 2011). Moreover, the study found that risk propensity facilitates and encourages business creation, but no significant correlation was found with business success. Lastly, the need for achievement is found to be positive both for business creation and business success. Another seminal work by (Zhao & Seibert, 2006) has shown that there is a significant difference between entrepreneurs and managers on major personality dimensions. They found that entrepreneurs scored higher on conscientiousness and openness to experience and lower on neuroticism and agreeableness. In sum, personality traits do matter and do offer additional insights and explanations of the differences between entrepreneurs themselves and between entrepreneurs and other non-entrepreneurial individuals.
An important study done by (Thomas & Mueller, 2001) found that particular entrepreneurs’ traits vary significantly across countries depending on the country’s culture. Namely, they found that locus of control and innovativeness, as the most two prevailing traits in international entrepreneurship research, varied significantly among entrepreneurs in nine different countries. The conclusion that can be extracted from these findings is that if entrepreneurial traits vary across countries based upon the culture, one would expect it vary for those who have bicultural skills, abilities, knowledge and experiences compared to those who don’t. Thomas and Mueller (2001) study gives insights on how entrepreneurs in different countries may have differing views when it comes to entrepreneurial behaviour. More importantly, when coupled with the view in the international expatriate’s literature; bicultural individuals have shown more success than those with mono-cultural KSAOs (Knowledge, skills, abilities and other bicultural experiences).
If entrepreneurs differ significantly from each other in their alertness to opportunities and differ in their informational processing, as well as other traits as suggested by research; then a question would arise about whether all entrepreneurs can be cognitively, psychologically and more importantly culturally the same. The disadvantaged minorities’ literature suggests that the exclusion of minorities from the labour market, education and social networks of the host country may push them to seek their livelihood in trade (Light, 1979). Bicultural in the United States are largely groups of minorities that have emigrated from their countries and settled in the United States seeking their future. Yet, little is known whether a difference exists between the host country nationals and those who have developed bicultural knowledge, skills, abilities and other experiences with regard to their entrepreneurial behaviours.
In fact, many studies have suggested that contextual settings such as culture and environment influence the entrepreneurial intentions and growth, as well as the entrepreneurial activities (Zhao & Seibert, 2006; Sung & Choi, 2009). Other studies suggested that there is a significant difference between countries regarding the entrepreneurial behaviours, especially in the individual locus of control and innovativeness (Thomas & Mueller, 2001). If that is the case, it is important to understand whether individuals who have more than one cultural background (bicultural individuals) would be more likely to have greater potential of becoming an entrepreneur? And whether they possess specific bicultural skills, abilities, knowledge and other experiences that would make them different entrepreneurs in the host countries (foreign countries where they reside now) than the local entrepreneurs? And if so, what are these characteristics that make them different? In what ways are they different from local entrepreneurs? And does that add to our understanding of the varying degrees of success and failures in new ventures established by either local entrepreneurs or bicultural entrepreneurs?
Several studies have focused on the potential differences in entrepreneurial behaviours across countries (Dyer, 1986; Hayton, George & Zahra, 2002; Runst, 2013; Thomas & Mueller, 2001). Hayton et al. (2002) in their review of literature found that most research on the relationships between culture and entrepreneurial traits have focused on two major inquiries: One is concerned with the notion that different cultures would be associated with different entrepreneurial characteristics and the other stream is concerned with entrepreneurs themselves across cultures and whether they would have different or similar traits and entrepreneurial behaviours. The findings of most of these studies asserted that there are significant variations across cultures with regard to motives and behaviours. Hessels, van Gelderen & Thurik, (2008) found that social security negatively affects a country's supply of ambitious entrepreneurship. Edelman, Brush, Manolova & Greene (2010) found significant differences between black and white entrepreneurs in both motivations to start and intentions to grow a new venture.
Estay, Durrieu & Akhter (2013) found that the need for personal independence is one of the most influential factors, especially at the beginning stages of entrepreneurial behaviours. Shane, Kolvereid & Westhead (1991) identified four factors: Need for independence, recognition, learning and roles, three of which were different across different countries. Thomas and Mueller (2000) tested whether entrepreneurial traits (innovativeness, locus of control, risk-taking propensity and energy level) would differ as the cultural distance from the United States increases. They found that internal locus of control, risk taking and energy levels decrease as the cultural distance of the entrepreneur’s country from the United States increases. The findings of these studies, among many others, along with the findings of Hayton et al. (2002) review, confirm that entrepreneurs vary significantly and systematically across cultures. However, there is very little known as to how bicultural entrepreneurs differ from mono-cultural entrepreneurs when both are in the same (host country)?
Bicultural individuals are assumed to possess some knowledge, skills, abilities and other experiences that would enable them to be culturally flexible and thus open to new thoughts, insights and more tolerant to incorporate different perspectives into their information processing (Bell and Harrison, 1996). According to the US Census (2002) reports, 25% (1 out of four) of those residing in the United States have lived in another country before moving to the United States and probably has assumed more than one culture (US Census, 2002). Several scholars have asserted that developing and internalizing two cultures, may not be negative and in fact may enhances one’s social and cognitive skills in problems identification, evaluation and solving (Bandura, 1977; LaFromboise & Rowe, 1983). Bandura's (1977) social learning theory emphasized the importance of observational learning as means of developing responses, standards for behaviors and sense of self-efficacy (the belief that one’s personal abilities and characteristics will help becoming successful).
The cognitive abilities determine, to a large extent, our responses to certain challenges, problems and situations. For instance, social learning theory argues that children admire powerful figures in their surroundings, over time; they develop competencies because of the accumulation of some traits learned through imitating other models. Those who expose themselves to diverse cultures and environments will have greater opportunities to acquire different traits and knowledge and thus develop unique characteristics over time. Furthermore, those who are exposed to different cultures and environments will experience different types of experiences in their social interactions and thus will accumulate rich knowledge that is diverse. They are, therefore, more likely to develop some advantages over the mono-cultural individuals in some respects, including the ability to develop entrepreneurial potential. This is not to state that mono-cultural individuals would not have entrepreneurial abilities. Rather it is an argument that those biculturals may have particular advantages regarding some entrepreneurial aspects while the mono-cultural entrepreneurs may have also some advantages in other aspects over the
bicultural entrepreneurs. The assumed context here is a host country where bicultural entrepreneurs are living along with those local entrepreneurs (mono-cultural). Based upon the evidence documented in biculturalism and entrepreneurship research, we argue that they do differ significantly. However, there is very little research in entrepreneurship literature as to how and in what aspects do either of these types of entrepreneurs have advantages over the other? And whether there is a possible combined advantage that might be achieved from combining both types to achieve an optimal level of entrepreneurial behavior in three regards: Opportunity recognition, evaluation and selection and finally the exploitation of these opportunities.
As we conclude our theoretical foundations for our research in this paper, it is important to briefly present the constructs that we employ in this part along with their definitions. Elaborate and detailed discussion of these constructs will a major component of our second part that we will present in our research note (B). As outlined earlier, this study focuses on the relationships between bicultural knowledge, skills, abilities and other experiences that a bicultural possess and their potential entrepreneurial behavior in the entrepreneurial process stages. Bicultural knowledge, skills, abilities and other experiences are defined in one construct. We follow the dominant definition in management literature introduced by Lafromboise and adopted later by several scholars, where this construct is defined as “the state in which individuals maintain their distinctive cultures, including values, attitudes, customs, beliefs and habits while simultaneously interacting with and learning from those of other cultures” (Bell & Harrison, 1996). It is also important that we clarify the context of the study as the US, as it is considered one of the largest attracting countries for ambitious individuals from other countries.
As for the entrepreneurial process, we use the prevailing definition of opportunity introduced by Shane (2003) and used in most of relative literature. Thus, opportunity is defined as a situation in which a person can create a new means‐ends framework for recombining resources that (s) he believes will yield a profit. Shane and Venkataraman’s (2000) study defined opportunity recognition from an entrepreneurial standpoint as a process in which individuals recognize, spot and discover potential opportunities to create and develop new business, ventures, markets and technology (Wang, Ellinger & Jim Wu, 2013). Opportunity evaluation refers to undertaken action by the entrepreneur to evaluate whether the identified opportunities represent feasible opportunities for entrepreneurial action (Autio, Dahlander & Frederiksen, 2013). Opportunity exploitation is defined as the ability to take executive actions that would initiate the start-up business, in other words it is the ability to convert the opportunity identified and selected into an actual business (Shane, 2000).
Entrepreneurship as a research subject has been drawing increasing attention from scholars in several fields of study in the recent years. More work is being done and is expected to continue in the future. The aim of this first part of our “two-part paper” was to shed lights on one under researched topic in the entrepreneurship literature; namely how bicultural life experiences and skills may help explain the differences among different entrepreneurs. We argue that bicultural differ from monocultures (host country entrepreneurs) at the three stages of the entrepreneurial processes (recognition, evaluation and exploitation of opportunities).
In this part, we focused on introducing the concept of biculturalism as an important construct of interest in the entrepreneurship field of study which has been unexplored by business scholars in the context of entrepreneurship. By shedding lights on biculturalism, we expand the view on entrepreneurial behaviours of individuals and the variations among them on the different stages of entrepreneurial activity, from discovery to implementation. We also highlight the importance of linking variations among individuals to the social and economic contexts in which they live and accumulate experiences, which addresses another important yet under researched area that concerns the home-country entrepreneurs and the bicultural entrepreneurs. This first part of the paper paves the road for our next part in which we try to link the variations among individuals in bicultural knowledge, skills, abilities and other experiences and their impact on developing and sustaining entrepreneurial behaviours, Specifically, we focus on entrepreneurial discovery skills, entrepreneurial evaluation skills and entrepreneurial implementation skills.
The second part of this “two-part research” which appears in a later volume of International Entrepreneurship Journal discusses in detail why bicultural may have some advantages over mono-cultural and the host country nationals. We also discuss that such advantages may need to be complemented with embeddedness and networks in the host country, so the bicultural could successfully exploit opportunities they have identified. Moreover, we develop several propositions that can be further explored and tested in future research in this area of inquiry.
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