The International Conference on Entrepreneurship Iec 2014

THE INTERNATIONAL CONFERENCE ON ENTREPRENEURSHIP IEC 2014

CONFERENCE PROCEEDINGS

15 – 16 May, 2014 ISTANBUL THE INTERNATIONAL CONFERENCE ON ENTREPRENEURSHIP IEC 2014

Conference Chair Prof. Dr. Ahmet Metin GER

Conference Co-chair Prof. Dr. Alev KATRINLI

Comittee Members Asst. Prof. Zeynep ILTUZER Res. Asst. Alev Dilek AYDIN Res Asst. Burcin KAPLAN

Res. Asst.Cover Gonca Design Yılmaz ELBASI Nabi SARIBAS

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photocopying recording likewise. PRESIDENT

In recent decades, the importance of entrepreneurship has increased and seated in a significant position in business life. In this atmosphere, hosting an event that purposes to reach students with the academic studies in order to educate and teach them for establishing a successful business is an honor to our University.

From past till today, entrepreneurship has been emerging as an important concept that determines the level of economic prosperity of the countries. Entrepreneurs, who create new working environments for themselves, also serve for the whole country by providing benefits to every citizen. In countries where the level of entrepreneurship is high, employment, education level and welfare of the society also increase significantly. Therefore, entrepreneurship is a concept that governmental bodies and universities require to work in cooperation for the overall success of the whole country.

As Universities, our prior mission is to teach our students to review their usual life with different perspectives in order to realize opportunities in business lives. It should be remembered that it has been 115 years since the President of the U.S. Patent Office, Charles Duell said "Now there is nothing new. Everything that can be invented has been invented.” In the last 115 years, humanity experienced the most rapid and severe changes in technology. With today's rapidly evolving technology and improved living conditions, we will need more and more young brains to produce and invent. takeLastly, part. I would like to thank everyone who contributed to the organization of this conference, in which many reseachers from Turkey and from many different countries

Dr. Mustafa AYDIN President of Board of Trustees Istanbul Aydın University RECTOR

The changes experienced in the information and communication technologies as a result of the process of globalization have greatly impacted the universities. Higher education gained significant importance in the 21th century, as a consequence of the knowledge economy and the role it played in raising the educated people for the said new economy. Universities have gone through thre main stages since their establishments. Universities, which were mainly concentrated on the "education" at first, have later had the mission of "researcher" university in paralell with the the needs brought by the industrial societies. Today, universities have adopted in principle to directly contribute to the economical and social development. As a result of this process, the cooperation of university-Industry, which we consider as one of the most important tools of converting this know-how to production, has gained increasingly significant importance.

The entrepreneurial university in the context of university-industry cooperation provides the basis to the new formations such as company universities and gives rise to new types of partnerships among different higher education institutions. In this context, entreprenurial university constitutes one of the foundations of the concept of entrepreneurship, which is shaped on innovation, creativity and change. Entrrpreneurship is the ability of a person to transform his/her ideas into action. The most important aim of the entrepreneurial university is to develop the entrepreneurial talents and their way of thinking.

Today, it is obvious that the educational institutions of a country, particularly universities have an important role in the commercialization of ideas. For this reason, increase in the production of value-added products and a strong University-indsutry cooperation for the national and international development is crucial. Researchers, academical institutions, enterprises and industrial entrepreneurs should be promoted to meet on a common ground within the context of university-industry cooperation.

I would like to thank everyone, who has a role in the preparation of this conference that we realized with valuable speakers and participants from all around the world and present my best regards. Prof. Dr. Yadigâr IZMIRLI Rector Istanbul Aydin University PREFACE

In today’s world, economies worldwide are witnessing the emergence of new business models within entrepreneurial realms, new funding mechanisms and platforms, new international scopes of activities, new ways of organizing ventures, as well as greater varieties of venture types spanning both commercial and socially driven initiatives. Entrepreneurship in the 21st century has an important place in ensuring social welfare and balanced development between different regions. Entrepreneurs who have strong characteristics of decision-making, innovative, creative and risk-taking in uncertain environmental conditions are loaded on an important mission in the development of modern civilization.

In this very important and contemporary topic, International Conference on Entrepreneurship will include multiple tracks welcoming studies from a variety of business and management disciplines after double blind, peer review process. In the conference, the harmony of many topics including entrepreneurship and marketing, forwomen entrepreneurship, entrepreneurs, entrepreneurship social entrepreneurship, in health sector, entrepreneurial risk analysis in finance, entrepreneurship corporate entrepreneurship, entrepreneur leadership, strategies, business models and processes and entrepreneurship and the recent financial crisis will be presented. The conference also will host different perspectives from different countries such as Denmark, Albania, Lithuania, Russia, Poland, Indonesia, Algeria, India, Spain and Pakistan.

School.The opening keynote speech will be given by Prof. Dr. Daniel Hjorth, who is the Academic Director of Department of Management, Politics and Philosophy in Copenhagen Business

I hope that you have an enjoyable conference. Prof. Dr. Alev KATRINLI Dean Faculty of Economics and Administrative Science Istanbul Aydın University, Turkey May, 2014 KEYNOTE SPEAKER AND PANELISTS

Keynote Speaker

Prof. Dr. Daniel Hjorth - Copenhagen Business School, Academic Director, PanelistsDepartment of Management - Politics and Philosophy,

Prof. Dr. Erol Sayın – Rector of Alanya Hamdullah Emin Paşa (AHEP) University University Prof. Dr. Ahmet Metin Ger – Senior Advisor of Board of Trustees, Istanbul Aydin

Ahmet Mete Çakmakçı – General Secretary of Technology Development Foundation of Turkey (TTGV) University Prof. Dr. Hasan Saygın - Senior Advisor of Board of Trustees, Istanbul Aydin

Selahattin Kaya – President of KOSGEB İkitelli Center

Ufuk Batum – Vice President of ODTÜ Teknopark

Berkay Eskinazi – President of Creative Leaders and Contributors Association (LIYAKAT)

Gülçin Güloğlu – Vice President of Creative Leaders and Contributors Association (LIYAKAT)

Nilgün Dağgeçen – Vice President of Creative Leaders and Contributors Association (LIYAKAT)

Asst. Prof. Engin Deniz Eriş – Dokuz Eylul University, İzmir Vocational College – President of Project Commission of Creative Leaders and Contributors Association. (LIYAKAT) CONFERENCE SCHEDULE / 1. DAY 08:30 – 09:00 Registration 09:00 – 10:30 Opening Speeches:

Prof. Dr. Ahmet Metin Ger – Senior Advisor of Board of Trustees, Istanbul Aydin University Prof. Dr. Yadigar İzmirli – Rector; Istanbul Aydın University University Dr. Mustafa Aydın – President of the Board of Trustees, Istanbul Aydin Keynote Speeches: “Entrepreneurship, Organisations, and Creativity”

Business School Prof. Dr. Daniel Hjorth – Keynote Speaker / Academic Director of Copenhagen 10:30 – 10:45 Coffee Break 10:45 – 12:00 “The Role of Corporate Entrepreneurship in Business” Head of the Session:

Assoc. Prof. H. Sinem Ergun – Faculty Member, Faculty Presentations: of Business Administration, Marmara University 1. Entrepreneurship in E-commerce Supply Chain Management Mindaugas Samuolaitis, 2. Acehnese Immigrants’ Small Businesses in Malaysia: Constraints and Strategies for Survival Jullimursyida Ganto & Amru Usman & Mariyudi, 3. Corporate Entrepreneurship in Healthcare Institutions and the Impact to Performance Aysu Kurtuldu & Dilaver Tengilimoğlu, 4. White Collars and Pink Collars for Entrepreneurs: The Case of Turkish Banking Industry Ahmet Hakan Özkan, 12:00 – 13:00 Lunch 13:00 – 14:00 Panel: Entrepreneurship in Universities Panelists:

Prof. Dr. Erol Sayın – Rector; Alanya Hamdullah Emin Paşa (AHEP) University Prof. Dr. Ahmet Metin Ger – Senior Advisor of Board of Trustees, Istanbul Aydin University Ahmet Mete Çakmakçı – General Secretary of Technology Development Foundation of Turkey 14:00 – 14:15 Coffee Break 14:15 – 15:45 “Entrepreneurial Universities and Education” Head of the Session:

Assoc. Prof. Figen Yıldırım –Vice Dean of Faculty of Presentations: Commercial Sciences, İstanbul Commerce University, 1. Victoria Balieva, Multicultural Merging and Acquisition: Flagman of International Entrepreneurship and Education 2. Robertas Sunokas, Improvisation Method as Entrepreneurial Engine for Students 3. University Students and Their Sense of Entrepreneurship 4. Acehnese Students Mahmoudi Elhouari, Entrepreneurs: Problems and Determinant Factors of Students Amru Usman & Naufal Bachri & Iskandarsyah Madjid, 5. A Study of the The Relation Between Entrepreneurship Education and Students’ Future Entrepreneurial Inclination. Gizem Akıncı & Dinçer Atlı & Fırat Bayır, 15:45 – 16:00 Coffee Break 16:00 –17:15 “Social Entrepreneurship” Head of the Session:

Prof. Dr. Sevda Alankuş – Dean of Faculty of Presentations: Communications, Kadir Has University 1. Regional Development Centers –A Big Opportunity to Develop the Third Mission in Albanian Universities Eva Cipi & Iris Cekani, 2. Social Enterprises in a Developing Country Context: Analysis of Social Entrepreneurship Models in Duygu Türker & Gökay Özerim & Ayselin Yıldız, Turkey 3. The Responsible Company and The Social Enterprise: Differences and Similarities. Ivan Hilliard & Tiziana Priede & Cristina López-Cózar Navarro, 4. Social entrepreneurship: Rethinking the Relationship Between Corporations and the Society. An Indian Perspective Mouloud Madoun, CONFERENCE SCHEDULE / 2. DAY 08:30 – 09:00 Registration 09:00 – 10:00 Panel: Corporate Entrepreneurship and Innovation Panelists:

University Prof. Dr. Hasan Saygın - Senior Advisor of Board of Trustees, Istanbul Aydin

Selahattin Kaya – President of KOSGEB İkitelli Center 10:00 – 10:15 CoffeeUfuk Batum Break – Vice President of ODTÜ Teknopark 10:15 – 11:45 “Innovation Technology and Creativeness as part of Entrepreneurship” Head of the Session: University Prof. Dr. Kemal Kurtuluş – Faculty Member, Zirve Presentations: 1. Innovation and Techonology Development For Albania Sme-Ve Mimoza Zeneli & Almarin Frakulli, 2. Development of Entrepreneurship Culture; Great Challenge for Developing Countries, Experience from Nepal Bharat Chalise, 3. Social Enterprises in Albania as Instrument in Function of Social Welfare Julejda Gërxhi, 4. Aamar Ilyas, The Impact of Human, Social, Cultural And Financial Capital on Nascent Entrepreneurs’ in Pakistan 5. Collective Creativity Management Model for Creative Enterprises Jurate Cerneviciute & Rolandas Strazdas, 12:00 – 13:00 Lunch 13:00 – 14:00 Panel: Social Entrepreneurship Panelists:

Berkay Eskinazı – President of Creative Leaders and Contributors Association (LİYAKAT) Gülçin Güloğlu – Vice President of Creative Leaders and Contributors Association (LİYAKAT) Nilgün Dağgeçen – Vice President of Creative Leaders and Contributors Association (LİYAKAT) Ass. Prof. Engin Deniz Eriş – President of Project Commission of Creative Leaders and Contributors Association (LİYAKAT) & Dokuz Eylül University, İzmir Vocational Collage 14:00 – 14:15 Coffee Break 14:15 – 15:30 “Women Entrepreneurship and Entrepreneurship Among Disabled People” Head of the Session:

Prof. Dr. Celal Nazım Irem – Vice Dean of The Faculty of Presentations: Economics and Administrative Sciences, Istanbul Aydın University 1.

Manzoor Ali Isran, Problems for Women Entrepreneurs: Pakistan Needs 2. Pro-Women Entrepreneurial Public Policy 3. Boufeldja Ghıat, Women Entrepreneurship in Algeria Elda Dollıja & Manjola Çollaku, The Worldwide Gender Imbalance on 4. Corporate Boards Dorota Kobus-Ostrowska, Entrepreneurship Disabled People in Poland in 15:45 – 16:00 TimesCoffee of Break Economic Slowdown. Myth or Reality? 16:00 –17:00 “Entrepreneurship in Business Organizations” Head of the Session: Prof. Dr. Alev Katrinli – Dean of The Faculty of

Presentations: Economics and Administrative Sciences, Istanbul Aydın University 1. As a New International Entrepreneurship Pathway: Born-Global Content Burçin Kaplan & Gonca Yılmaz Elbaşı, 2. Gülay Bakar Tamer, Creativity in Entrepreneurship 3. Entrepreneurial Orientation as a Performance Promoter of Business Organizations Alba Kruja, TABLE OF CONTENTS Page No

Entrepreneurial Orientation as a Performance Promoter of Business 15 Organizations Alba Kruja

Entrepreneurship in E-commerce Supply Chain Management 29 Mindaugas Samuolaitis

As a New International Entrepreneurship Pathway: Born-Global Content 37 Burçin Kaplan & Gonca Yılmaz Elbaşı

A Study of the Relation Between Entrepreneurship Education and 53 Students’ Future Entrepreneurial Inclination Gizem Akıncı & Dinçer Atlı & Fırat Bayır

Multicultural Merging and Acquisition: Flagman of International 67 Entrepreneurship and Education Victoria Balieva

Improvisation Method as Entrepreneurial Engine for Students 77 Robertas Sunokas

University Students and Their Sense of Entrepreneurship 87 Mahmoudi Elhouari

Acehnese Students Entrepreneurs: Problems and Determinant Factors of 95 Students Amru Usman & Naufal Bachri & Iskandarsyah Madjid

Regional Development Centers –A Big Opportunity to Develop the Third 107 Mission in Albanian Universities Eva Cipi & Iris Cekani Social Enterprises in a Developing Country Context: Analysis of Social 117 Entrepreneurship Models in Turkey Duygu Türker & Gökay Özerim & Ayselin Yıldız

The Responsible Company and The Social Enterprise: Differences and 131 Similarities. Ivan Hilliard & Tiziana Priede & Cristina López-Cózar Navarro

Social Entrepreneurship: Rethinking the Relationship Between 145 Corporations and the Society. An Indian Perspective Mouloud Madoun

Innovation and Techonology Development For Albania Sme-Ve 167 Mimoza Zeneli & Almarin Frakulli

Acehnese Immigrants’ Small Businesses in Malaysia: Constraints and 175 Strategies for Survival Jullimursyida Ganto & Amru Usman & Mariyudi

Corporate Entrepreneurship in Healthcare Institutions and the Impact to 195 Performance Aysu Kurtuldu & Dilaver Tengilimoğlu

Development of Entrepreneurship Culture; Great Challenge for 209 Developing Countries, Experience from Nepal Bharat Chalise

Social Enterprises in Albania as Instrument in Function of Social Welfare 221 Julejda Gërxhi

The Impact of Human, Social, Cultural And Financial Capital on Nascent 231 Entrepreneurs’ in Pakistan Aamar Ilyas Problems for Women Entrepreneurs: Pakistan Needs Pro-Women 247 Entrepreneurial Public Policy Manzoor Ali Isran

Women Entrepreneurship in Algeria 261 Boufeldja Ghıat

The Worldwide Gender Imbalance on Corporate Boards 277 Elda Dollıja & Manjola Çollaku

Creativity in Entrepreneurship 289 Gülay Bakar Tamer

Entrepreneurship Disabled People in Poland in Times of Economic 305 Slowdown. Myth or Reality? Dorota Kobus-Ostrowska

Collective Creativity Management Model for Creative Enterprises 317 Jurate Cerneviciute & Rolandas Strazdas

White Collars and Pink Collars for Entrepreneurs: The Case of Turkish 327 Banking Industry Ahmet Hakan Özkan - 14 - International Conference on Entrepreneurship IEC 2014 ENTREPRENEURIAL ORIENTATION AS A PERFORMANCE PROMOTER OF BUSINESS ORGANIZATIONS Alba Kruja Department of Business Administration, Epoka University Km. 12, Rruga Rinas, 1039 Tirana, Albania Tel: +355 4 2232 086 E-mail: [email protected]

ABSTRACT

The first concept use of the term “entrepreneurship” relates to the seventeenth century in France, while the research on it has its beginnings with Schumpeter linking it with the innovativeness of business organizations. Entrepreneurial orientation as a concept is related with business organizations performing entrepreneurial actions and activities. Nowadays importance of entrepreneurial orientation research has increased due to its recognition as a critical success factor of business organizations. This study aimsmance to promoter. provide a literature review on the relations between entrepreneurial orientation and business organizations and the impact that this orientation has as a perfor- Keywords:

1. INTRODUCTION Entrepreneurial Orientation, Business Organizations, Performance

During the first half of the 20th century the main objective during the development of the entrepreneurship theory was to determine the role that entrepreneurship have on the country development (see Schumpeter, 1911/34; Marshall 1930; Burns & Stalker 1961; McClelland 1961). But the second half`s focus would be moved on identifying the factors that promote entrepreneurship and it will be only after the 1980s that the identification of Entrepreneurial Orientation dimensions from the research occur. The difference between entrepreneurial orientation and entrepreneurship lies on the fact that while entrepreneurship is focused on new entries entrepreneurial orientation is engaged on the way entrepreneurs implement entrepreneurship. New entry can be accomplished by entering new or established markets with new or existing goods or services (Lumpkin & Dess, 1996, p. 136). Entrepreneurial orientation has become a central concept in the domain of entrepreneurship that has received a substantial amount of theoretical and empirical attention (Covin, Green, & Slevin, 2006). The number of researches studying the relationship between EO and business organizations’ performance is increasing every year, leading to a wide acceptance and relevance of the concept. This paper has as objective to provide a literature review on the concept of EO, its dimensions and its impact on business performance. After the introduction part, chapter International Conference on Entrepreneurship IEC 2014 - 15 - 2 relates with the EO concept and its study models in the literature. Chapter 3 analyses in details the five dimensions of EO, while chapter 4 deepens on performance measures in business organizations. The discussion about the EO-performance relationship takes part in chapter 5 and next chapter emphasizes the role of moderators. The paper ends with2. theENTREPRENEURIAL conclusion part. ORIENTATION

Miller (1983) views the entrepreneurial orientation “as a characteristic of organizations, which can be measured by looking at top management`s entrepreneurial style, as evidenced by the firms` strategic decisions and operating management philosophy.

According to Covin & Slevin (1988), an organization`s EO is the summation of the extent to which top managers are inclined to take business related risks, to favor change and innovation in order to obtain a competitive advantage for their firm and to compete aggressively with other firms. The organizations performing in high levels of risk-taking, innovative and proactive activities would be entrepreneurially oriented, while those performing in low levels of those activities would be conservative oriented.

Lumpkin & Dess (1996) as well as Wiklund & Shepherd (2003) emphasize that EO refers to the strategy making processes that provide organizations with a basis for entrepreneurial decisions and actions.

Rauch, Johan, Lumpkin, & Frese (2009, p. 766) view EO as the entrepreneurial strategy-making processes that key decision makers use to enact their firm`s organizational purpose, sustain its vision and create competitive advantage(s).

Vij & Bedi (2012, p. 19) identified three types of study models have been undertaken such as: (i) the construct model, in which EO is the dependent variable and the researchers focus is on its antecedents; (ii) the EO-strategy model, which aligns the level of EO with different strategies; and (iii) the performance model, which explores the EO-performance linkage. In table 1 below is presented a short description of each study model and the main authors dealing with.

- 16 - International Conference on Entrepreneurship IEC 2014 Table 1. Study Models of the EO Literature

Study Model Model Description Authors Construct Model Dependent Variable: EO (Lachman 1980); (Miller & Toulouse 1986); Independent Variable: (Stevenson dhe Jaillo 1990); (Zahra 1991); EO Antecedents (Zahra, Jennings & Kuratko 1999); (Littunen 2000); (Poon, Ainuddin & Junit 2006); (Holt, Rutherford & Clohessy 2007).

EO-Strategy Model EO level is arranged in line with the (Mintzberg 1973); (Khandwalla 1977); strategies. (Miller & Friesen 1982); (Burgelman 1983); (Galbraith & Kazanjian 1986); (Covin & Slevin 1988); (Zahra 1993); (Covin, Slevin & Schultz 1994); (Lumpkin & Dess 1996); (Dess, Lumpkin & Covin 1997); (Frese, Brantjes & Hoorn 2002); (Ireland, Covin & Kuratko 2009).

Performance Model EO-Performance relation is studied, (Covin & Slevin 1989); (Zahra 1991); by considering also the moderating (Wiklund 1999); (Zahra & Garvis 2000); and mediating variables of the inter- (Lee, Lee & Pennings 2001); (Yusaf 2002); nal & external environment. (Dimitratos, Lioukas & Carter 2004); (Kraus, Harms & Schwarz 2005); (Wiklund & Shep- herd 2005); (Stam & Elfring 2008); (Ireland, Covin & Kuratko 2009); (Kreiser & Davis 2010); (Grande, Madsen & Borch 2011);

3. DIMENSIONS OF ENTREPRENEURIAL ORIENTATION

Beginning from 1983, Miller has identified three dimensions of EO to measure entrepreneurship such as: innovation; proaktiveness; and risk-taking. These three dimensions have been used from many researchers (Covin & Slevin, 1989; Lumpkin & Dess, 1996; Wiklund & Sheperd, 2005, etc.). Meanwhile Lumpkin & Dess (1996) determine EO dimensions as five, by adding two other dimension to the previous study of Miller (1983)3.1 Innovativeness as: autonomy; and competitive aggressiveness.

Schumpeter (1911/34) has classified the entrepreneur as someone who identifies and captures an option, offering a new product to market, improves the production process, or offers a new contribution to the economy. The event was called “innovation”, which leads1. to a new production function, such as: 2. 3. The introduction of a new good 4. The introduction of new method of production 5. The opening of a new market The conquest of a new source of supply of a raw material The carrying out of a new organization of an industry International Conference on Entrepreneurship IEC 2014 - 17 - According to the Oslo Manual definition innovation is defined as “... the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations (OECD, 2005, p. 45)”. sity to innovate the business. Miller & Friesen (1982) identified innovativeness of entrepreneurs as their propen-

Khandwalla (1977) viewed innovativeness as the willingness to try the ways which theirare different business. from the existing, the enthusiasm to adopt new ideas or new methods to do their business operation and the eagerness to implement the innovation strategy in

Drucker (1985) defines innovation as the specific tool of entrepreneurs, the means by which they exploit changes as an opportunity for a different business or service Lump- kin & Dess (1996) argues that innovativeness reflects a firm`s tendency to engage in and support new ideas, novelty, experimentation, and creative processes.

Lewrick, Omar, Raeside, & Saier (2010, p. 1) emphasize that innovation is the production, diffusion and use of new and economically useful knowledge, a key factor for competitiveness3.2 Risk-Taking and growth.

One of the earliest uses of the term “entrepreneur”, appears to have been introduced by Richard Cantillon, an Irish economist of French descent, in the 1700s. Cantillon (1755) viewed the entrepreneur is a specialist in taking risk. ship. Mill (1984) emphasized that risk taking is the paramount attribute of entrepreneur- 3.3 Proactiveness

Proactiveness is an indicator of a firm`s behavior against its competitors, willingness and desire to compete.

Lumpkin & Dess (2001) view proactiveness to suggest “a forward-looking perspective characteristic of a marketplace leader that has the foresight to act in anticipation of future demand and shape the environment” (p. 433).

Miller & Friesen (1978) define proactiveness as changing the environment by introducing new products and technologies. - 18 - International Conference on Entrepreneurship IEC 2014 3.4 Autonomy

Autonomy as a concept refers to the independent action of an individual or group working to develop an idea or vision. According to Lumpkin & Dess (1996) autonomy refers to the ability to work independently, make decisions, and take actions aimed at bringing forth a business concept or vision and carrying it through to completion. As a consequence of delegating authority to operating units in entrepreneurial organizations, the impetus for new initiatives stems from the lowest level of the hierarchy. Autonomy can be possessed by either individuals or groups and can exist from either lower-level employees or among more senior decision makers (Langfred, 2000).

Although Lumpkin & Dess (1996) refer to autonomy as one of the key dimensions of entrepreneurial orientation, there are few studies that have included it as such. (Lump- kin, Cogliser,i. & Schneider (2009, p. 48) believe that this lack of engagement has occurred for two reasons : ii. autonomy is not a dimension of “original” EO identified by Miller (1983) and developed by Covi and Slevin (1986 , 1989 ) - innovation , proactive , and risk taking . the adoption of the autonomy dimension has been impeded by the lack of a valid firm-level3.5 Competitive scale that measuresAggressiveness autonomy from the EO perspective.

Competitive aggressiveness refers to the intensity of the efforts of a firm to perform better than its rivals in the same industry. It is characterized by strong offensive posture directed at overcoming competitors and may also be quite reactive as when a firm defends its market position or aggressively enters a market that a rival has identified (Lumpkin3.6 Dependence & Dess, 2001, versus p. 433). Independence of EO Dimensions

Regarding the relations between dimensions, Miller (1983) along with Covin and Slevin (1989) have applied the OS as a multidimensional construct, combining in a single scale of three dimensions. While, Lumpkin and Dess (1996) together with Kreiser, Marino and Weaver (2002), claimed that the dimensions of the OS interact independently of each other. Other studies, Lumpkin & Dess (2001) as well as Covin, Green, & Slevin (2006), concluded that dimensions of EO may occur in different combinations. George (2006) argues that each dimension represents a different and independent aspect of the multidimensionality concept of EO. Stetz, Howell, Stewart, Blair, & Fottler (2000) em- phasize4. PERFORMANCE that the dimensions MEASURES of EO mayOF BUSINESS relate differently ORGANIZATIONS to firm performance.

Performance is a multidimensional concept and the relationship between EO and performance may depend upon the indicators used to assess performance (Lumpkin & International Conference on Entrepreneurship IEC 2014 - 19 - Dess, 1996). There exist many indicators that can be used to measure the performance of business organizations. Different researchers have used different performance measures such as objective or subjective and financial or non-financial measures.

Smith (1976) determines the non-financial measures to include goals such as satisfaction and global success ratings made by owners or business managers and financial measures to include assessments of factors such as sales growth and ROI. Covin & Slevin (1989) in their study have measured performance based on subjective perceptions of the respondents on the importance and satisfaction of various performance indicators.

The increase in sales is an indicator widely used in empirical analysis of entrepreneurial growth (Delmar, Davidsson and Gartner, 2003). This indicator also serves as one of the most important when it comes to small and medium enterprises (SMEs), which have less than 250 employees (Delmar, 1997). At the same time a good part of new busi- nessmance organizations in the market. in the market can operate in the early years with a small profit or loss, while increasing sales is the most suitable indicator of the development and perfor-

Return on invested capital (ROI) can be used to compare the performance of a business organization with another or to compare its performance over a period of time. When calculated over a period of a year, it is a convenient measure of the effectiveness of the5. LINKING organization’s ENTREPRENEURIAL leader. ORIENTATION WITH BUSINESS PERFORMANCE

Business organizations that have high OS willingness to present innovations, assuming risks, examination of new products and services and unsecured, and are more active than competitors against market opportunities (Covin & Slevin, 1991; Wiklund and Shepherd, 2005).

From the 1980s up to nowadays, the EO studies has increased and spread around the world. The research began with studies from North America and in 1990s studies from USA, Europe and Australia were conducted. After 2000s the studies will be also conducted in Asia, Africa and other developing countries. As EO research has continued spreading, so have the variants for measuring the construct (Rauch, Johan, Lumpkin, & Frese, 2009). The studies conducted in different regions revealed about the positive impact of EO on performance, independent of the EO construct used and independent of the measurement scale items. Table 2 provides main empirical studies on EO construct and their results.

- 20 - International Conference on Entrepreneurship IEC 2014 Table 2. Main Empirical Studies on EO Dimensions

Author and Study Firm Economic Statistical EO Sample Results Year Place Size Activity Analysis Dimensions Size

(Khandwalla Canada - Public - Risk taking 103 Entrepreneurial 1977) organization Flexibility organizations take Centralization more risks than other organizations

(Miller & Canada - Heteroge- Correlation Innovativeness 52 Entrepreneurial Friesen, 1982) neous analysis, Risk-taking firms will exhibit regression higher levels of analysis product innovation Testim than conservative firms

(D. Miller Canada - Heteroge- Hipoteze, Innovativeness 52 Determinants of 1983) neous Analiza të Proactiveness entrepreneurship Variancës Risk-taking are influenced by the type of organization.

(Miller & Canada/ USA - Heteroge- Correlation Innovativeness 86 Determinants of Friesen, 1983) neous analysis, Analysis entrepreneurship regress are influenced by analysis the type of organization.

(Covin & USA large Production & Moderated Innovativeness 80 Entrepreneurial Slevin, 1988) Services regression Proactiveness orientation and analysis Risk-taking structure of the organization interact to determine firm performance

(Covin & USA small Production Moderated Innovativeness 161 Performance de- Slevin 1989) regression Proactiveness pends on the adapt- analysis Risk-taking ability between EO, structure and environment.

(Lumpkin & USA medium Heteroge- - Innovativeness 131 EO dimensions Dess 1996) large neous Proactiveness may vary inde- Risk-taking pendently of each Autonomy other Competitive Agressiveness

International Conference on Entrepreneurship IEC 2014 - 21 - Author and Study Firm Economic Statistical EO Sample Results Year Place Size Activity Analysis Dimensions Size

(J. Wiklund, Sweden, medium Heteroge- Regression Innovativeness 132 Positive relation- 1999) Australia, large neous analysis Proactiveness ship between the Finland, Risk-taking EO and performance varies with time

(Kreiser, Ma- Mexico, SME Heteroge- Factorial Innovativeness 1437 Generalized the rino & Weaver Netherlands neous analysis Proactiveness validity of the EO 2002) Norway, Correlation Risk-taking measurement scale Sweden analysis developed by Covin and Slevin (1989).

Rauch, Johan, Lumpkin, & Frese (2009, p. 766) argued that the effect of EO on performance is likely dependent on moderator variables, such as type of industry, business size,6. and THE cross EFFECT national OF MODERATOR contexts. VARIABLES OF THE INTERNAL/EXTERNAL EN- VIRONMENT

Naman & Slevin (1993) viewed that research indicates that performance can be improved when key variables are correctly aligned. Miller & Toulouse (1986) argued that if the relationship between EO and performance varies across samples that differ on a given attribute, such findings suggest that the attribute may be a moderator.

Rauch, Johan, Lumpkin, & Frese (2009) investigated potential moderators of the relationship between EO and performance. From the meta-analysis study conducted, they identified1. Business and coded Size: some contextual moderators which were also theoretically justifi- able, such as: The smaller the organization the greater the direct influence to be exerted2. Industry: by top management. Smaller organizations are more flexible, allowing quickly changing and taking advantage of new opportunities appearing in the environment. initiatives. Businesses operating in dynamic industries where technology and/ or customer3. National preferences Culture: change rapidly are more likely to benefit from entrepreneurial across countries The differences in these effect sizes were not significant, suggesting that relationships with performance seem to be relatively similar in magnitude

However researchers like Knight (1997) as well as Thomas & Mueller (2000) have emphasized that EO or its certain dimensions may differ across countries. - 22 - International Conference on Entrepreneurship IEC 2014 7. CONCLUSIONS

EO has its roots in the strategy making process literature since 1970` and it is viewed as the strategy making processes that provide organizations with a basis for entrepreneurial decisions and actions. Beginning from 1980’ entrepreneurial orientation as a concept has received the main attention from the researchers of entrepreneurship in theoretical or empirical studies. As the number of researches studying the relationship between EO and business organizations’ performance has increased every year, leading to a wide acceptance and relevance of the concept. The studies conducted in different regions revealed about the positive impact of EO on performance, independent of the EO construct used and independent of the measurement scale items. The differences relying on the impact degree on performance show that the EO-performance relationship is dependent on moderator variables, such as type of industry, business size, and cross national contexts. EO dimensions may relate differently to firm performance and EO can be conceptualizedREFERENCES as a unique or multi dimensional construct. Burgelman, R. A. (1983). A Process Model of Internal Corporate Venturing in the Diversified Major Firm. Administrative Science Quarterly , 28, 223-244.

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- 28 - International Conference on Entrepreneurship IEC 2014 ENTREPRENEURSHIP IN E-COMMENCE SUPPLY CHAIN MANAGEMENT Mindaugas Samuolaitis

KaunoPramones kolegija/ pr. 20, University Kaunas LT-50468 of Applied Lithuania Sciences [email protected] of Management and Economy

ABSTRACT

In the article there are analysed the factors that lead to the formation of entrepreneurship of Lithuanian e-commerce enterprises. Too little attention is appointed to Entrepreneurship development, although this process is very important in nowadays, when changes take place in the economy and companies must respond quickly if they are willing to survive. The process of globalization and increasing competition in the company become a major factor in the development of perspective and the appropriate supply chain management.

Today business environment changes rapidly and companies that do not use entrepreneurial activity, reduce their chances of successful competition in the market. In order to develop entrepreneurial company it requires managers to do certain decisions and actions.

Entrepreneurship is related with innovations, ability to make, to bring and to sustain innovation from external factors. Entrepreneurship involves changes, taking the responsibility for own actions, setting goals, the implementation and success motivation. Seek- ing to survive in nowadays world the company has to become entrepreneurial.

As the result, in the article, it is discussed the concept of entrepreneurship and business value in Lithuania. It also analyzes Entrepreneurial supply chain and the applicability of e - commerce companies. It provides main information about research results of entrepreneurship steps in Lithuanian e-commerce companies of the supply chain management processes. Entrepreneurial supply chain management gives the company flexibilityKeywords: and greater opportunity in the market.

INTRODUCTION Entrepreneurship, supply chain management, innovation.

In now a day, the importance of e-commerce has been increased. Today’s businesses need information technology, because if a company wants to survive and establish them in the market they have to implement new technologies and to be entrepreneurial International Conference on Entrepreneurship IEC 2014 - 29 - or will fail. New technology allows connection and possibilities through internet to exchange information and collaborate while working in different geographical locations.

Internet connection not only allows you to change the information, but to use other services. This work is related to inter-organizational co-operation and accounting system in a virtual space, and occurs due to electronic business. This article analyzes the e-commerce and the development of a service or product purchase of virtual space and entrepreneurial solutions in order to remain competitive in the business.

E-commerce benefits consumers because it offers a wider range of products, creating price competition and of course - new markets. It also poses new challenges for consumers, business and consumer protection.

Businesses need to become involved in e-business, because it helps with innovation methods to get more profit. Most importantly, e-business can increase sales and reduce price for selling products and services. These criteria are easily measurable, but there must be immeasurable and criteria, such as user satisfaction or quality ( Schneider , 2007). E-business is becoming an integral part for traditional business. For the development of e- businesses companies can reach potential customers worldwide. It creates a competitive advantage over other companies ( Luqman , Abdullah , 2011).

The objective of this paper is to find best solutions how to improve e-business situation in Lithuania. To discuss what is e-business in theoretical aspects, what problems in this area are the most important and how to do changes and entrepreneur decisions in LithuanianI. E-Business e-business And Main market. Problematic In Theoretical Aspect

E- business - is a business which, in order to benefit themselves and customers using information management and business infrastructure , develop, distribute or facilitate the use of products and services , primarily through the electronic communication and other tools (Schneider G., 2007)

E- business describes the goods , services and information of purchases and sales , customer service, communication with partners , the transactions electronically and other business support networks, telecommunications (Luqman A. , Abdullah N. K., 2011)

The first definition of e-business is more oriented to the user, which in a virtual space through electronic communication and other tools is using products and services, while the second definition is presented in a broader sense , the emphasis is not only the user but also the same company that operates in cyberspace . Both the first and the second - 30 - International Conference on Entrepreneurship IEC 2014 definition are correct. For long time, consumer products have been distributed to retail stores in bulk, for that was used pallet loads and cases. Now, when e-commerce becoming more and more popular and there appliers many online orders, traditional supply chain is changing. Traditional logistic chain for traditional orders fulfillment encompassing receiving, put away/storage, picking, transport through the DC, sortation, packing and shipping is a poor option for handling the needs of e-commerce (William B. Lee, 2012). To compete in this virtual area, pick, pack and ship of single items and to bring small value orders to consumers is the main question in this business. Orders require delivery to customers, not weekly, but with increasing frequency and at least within 24 to 48 hours.

From the moment the online order is placed to when it is picked, packed and shipped, every step in the process must be handled efficiently, consistently and cost-effectively. In e-commerce, it is the distribution center that provides much of the customer experience. Simply delivering the goods is no longer an adequate mission for the fulfillment center.

One of the main thinks which must be decided in e-business area is to answer 3 questions: What? How? Where? If some business would like to growth in these days it is necessary to answer it, to get decisions and actions. Only then it will be possibility to do somethingFigure 1. entrepreneur E-business newand become growth one platform step ahead from others.

Source: William B. Lee, 2012,

International Conference on Entrepreneurship IEC 2014 - 31 - Customer satisfaction must become to be a critical priority. E-commerce consumer expects a wide selection of SKU offerings, a mobile site ordering capability, order accuracy and one of most important -fast and free delivery and free returns.

Understanding how online consumers shop and purchase across channels is critical to the success of online fulfillment. More and more consumers are browsing the Internet for features and selection, testing products, acquiring discounts through social media, and then purchasing the product online through the convenience of their mobile devices.

Some retailers, however, including those that also sell through catalogs, have been in the direct-to-consumer marketplace for some time. These companies have fulfillment facilities established and information technologies in place to manage orders with speed sourcesand efficiency, doing it well and profitably. But to many distribution executives, online fulfillment poses a significant challenge to their existing knowledge, experience and re- Table 1 : 10 trends which will affect e-business in the future

1. Collective Intelligence When a user comes to the site, his personality has been identified in several steps.

2. Integration in Social networking The “share” will share the contents of the social network.

3. Mobile Website Required to operate a mobile phone service.

4. The proposals, based on the location Exploited GPS capabilities will open new opportunities for the promotion of consumer era.

5. Experiential user interface In just ease of use of innovative corporate e. Business websites can be experiential and inclusive.

6. Contextual visualization Users will be able to see how the product will benefit them in life and style.

7. The dynamic development of the Use liquid layouts automatically user’s screen size. grid and liquid layouts

8. Minimize navigation systems Users of the site goes down to see the product, rather than sophisticated navigation systems.

9. Speed Instead, the page should reload every time a user clicks on something, technology will enable interaction in an instant.

10. Text The new font technologies, web designers palette is broad as never before.

Source: Balaraman, Kosalram, 2012,

- 32 - International Conference on Entrepreneurship IEC 2014 Various authors often talk about e-business quality. In summary, the most frequently mentioned criteria relating to e-business are the quality of customer orientation; information, data quality; creativity. As well it’s very important hot it will be done to improve speedII. E-business of production in Lithuaniadelivery in e-business area.

E-business is speeding up in Lithuania. According to the data of Lithuanian department of statistics, in 2008 only around 5,8 percent of Lithuanian enterprises used the e-commerce to buy products or services. In 6 years this number has increase till 25,5. Numbers of Lithuanian who are using internet connection in 6 years has changed from 50.9 to 65,9 percentage. E-business becomes more and more popular in Lithuania. Re- cent data shows that e-business getting the speed and becoming commonly used function among the enterprises. This can be explained by different reasons: the applications of e-business overcame the conservative attitudes because it is showing the real benefits, increased efficiency and profits; as well big place in it appears from social network. Effectiveness of performance is understood as the complex indicator meaning competitiveness,Figure efficiency, 2. E-business time and development labor force insavings, Lithuania etc. in 2008-2013, in percent out of total number of enterprises

Source: Lithuanian Department of Statistic, 2012,

International Conference on Entrepreneurship IEC 2014 - 33 - The main problem in Lithuania E-commerce area still appears problems that most of ale-shops market. can be used only for local market. About 70 percent e-business pages don’t have translations to another language and it became problem to sel something in internation-

Talking about e-business situation in Lithuania must be done steps to improve this area.III. The What best must solution be done? is not to stay in local but to go to global market.

For this paper was done small research. Questionnaire was sent to 50 Lithuanian companies which have own pages and it is possible to buy productions from them. 28 companiesFigure 3. gave E-business answers developmentand numbers will in Lithuania be given in problems percentage (Companies forms. vision)

Lithuanian companies mention 2 main problems in e-business. It is problems with electronically protection, because exactly companies are responsible for information and payment security.

Second most problematic area is logistic. How to improve it and to create delivery in 24 or 48 hours? Most of productions delivery now is from 3 days till 60 days. This problem easy solved by companies which has warehouses and own transport park.

Next questionnaire was send by social network to get answers from people who are buying products through internet. The main goal was to get answer where they buy - 34 - International Conference on Entrepreneurship IEC 2014 productsFigure or 4. services The most and popular why. How place it would to buy be production possible to use(customers for other vision)companies?

In figure 4 we can see that most popular way of buying productions in Lithuania is buying through group-shopping sites. The most reasons why it happening was mention: • Many different productions and services in one place; • More reliable; • easy to find goods at a discount; • Quicker delivery; • More popular and etc.

Recommendations what could do companies to improve selling through internet customer’s advice: to improve quality of pages, to show prices, to give better delivery time, to do pages in other languages, to use social network.

In summary it can be stated that with problems in e-business area facing both leaders in the field, and just starting e-business companies. If they want to stay in market they must do quick entrepreneur decisions and take action. One of the best ways to do it is to improveIV. CONCLUSIONS logistic system AND and RECOMMENDATIONS began to use other pages and social network services.

Analysis shows that e-business development in Lithuania has high potential and it is future for all business in Lithuania. The question is what can be done to facilitate the development? The recommendations can be grouped into the three categories: development of information infrastructure of e-business (quality of web pages, security of information and payment), increase investment in company logistic, cooperate with others web pages. Regarding development of the information infrastructure it is recommended International Conference on Entrepreneurship IEC 2014 - 35 - to improve web pages with better quality, to create other languages versions, to make sure information and payment security. Talking about logistic system it is necessary to give bigger investment to make sure that production will reach customer in minimum time. Cooperating with group-shopping sites will increase popularity of production and profit for company

The best way to be at least one step ahead in e-business market is not to be afraid and to tryREFERENCES different entrepreneur decisions. Schneider G. Electronic Commerce: Seventh Annual Edition. Thomson Course Technology, 2007.

Luqman A. , Abdullah N. K. E-business Adoption amongst SMEs: A Structural Equation Modeling Approach. Journal of Internet Banking and Commerce,2011, Vol. 16, No.2.

Balaraman P., Kosalram K. E-Commerce Evaluation and E Business Trends. Information Engineering and Electronic Business, 2012, Vol. 5.

William B. Lee Creating Entrepreneurial Supply Chain. ISBN-13:978-1-60427-062-4. J.Ross Publishing, 2012.

Waghmare G. T. E-commerce: A Business Review And Future Prospects In Indian Business. Indian streams research journal, 2012, Vol. 2, No. 4.

Lithuanian Department of Statistic, http://www.stat.gov.lt/lt/ , 2012,

- 36 - International Conference on Entrepreneurship IEC 2014 AS A NEW INTERNATIONAL ENTREPRENEURSHIP PATHWAY: BORN-GLOBAL CONTENT Burçin Kaplan

Department of Civil Aviation Management, Faculty of EconomicsIstanbul, and AdministrativeTurkey Sciences [email protected] Aydın University

Gonca Yılmaz Elbaşı

Department of Business Management in English, Faculty of EconomicsIstanbul, and AdministrativeTurkey Sciences [email protected] Aydın University

ABSTRACT

Major changes in the macro-environment and the advances in technology have led to exploit new internalization pathways in recent decades. Globalization and the internet revolution have resulted with more hungry consumers for the knowledge- intensive products/services. As an outcome of these major changes, a new content of internationalization have arisen; born-global which refers to the companies that within 3 years of their establishment enter international markets and %25 of total revenue of the company is originated from international marketing activities (Cavusgil et al., 2011). The purpose of this study is to research the characteristics of born-global companies andKeywords: analyze the circumstances of the emergence of this novel phenomenon.

Born-global, Internationalization, International Entrepreneurship, The Characteristics1. INTRODUCTION of Born-Global Companies.

In a few decades, globalization has been a new ascending trend of business that generates numerous novel phenomenons. As causes as well as consequences of the globalization, changes in technology are affecting the buying habits of the consumers. With the help of cheaper and wider communication channels including internet revolution, globalization leads bringing every product to the consumer’s sight. Movies and television series standing on a common life style, has led homogeneous consumer preferences. The exploitation of new global conditions and the reduction of trade barriers have made entrepreneurs see the world as an open market and attracted entrepreneurs to the in- International Conference on Entrepreneurship IEC 2014 - 37 - ternational untouched markets and businesses. The entrepreneurs’ desire of marketing unique products/services to the new markets cause exclusive internationalization pathways of companies which differ from traditional internationalizing companies as being not emergent or incremental, but rather initially intended (Dlugoborskyte & Petraite, 2013).

As a new pathway of internationalization, major changes in the world macro-environment have forced new researches to study and brought a new phenomenon known as “born-global” (Falay et al. 2007) or ‘‘International New Ventures’’. (Gleason & Wig- genhorn, 2007) Born-global companies successfully make market offerings on a global basis from the very inception of the company, despite the fact that resources and competences may be quite limited at that early stage. Recent technological innovations, globalization of consumer tastes and lower communication and transportation costs favour global marketing in an unprecedented way include the emergence and integration of ever larger trading blocs. Today, sustainable progress in macro-environment allows young small-medium size companies be oriented towards a high degree of internationalization in their offerings and markets more or less immediately after their establishment. So, the content of “born-global” refers to the companies that within 3 years of their establishment enter international markets and %25 of total revenue of the company is originated from international marketing activities (Cavusgil et al., 2011). Born-global companies are also known as the companies which cannot enter the domestic market with a competitive advantage and seek growth opportunity abroad with the advantage of open economies and the size of world market. According to the some researchers, the distinguishing feature of born-global companies is that their origins are international, as demonstrated by management’s global focus and the commitment of specific resources to international activities. (Knight & Cavusgil, 2004)

The major factor driving a born-global entrepreneurial company is linked to market opportunities, explored globally for unique research and development intensive solutions. Economic fluctuations in domestic market, sophisticated multinational customers against narrow size of domestic customers and the formation of niche markets have been suggested to be the core market based factors, influencing the formation of a born-global company. The changing demand of customers also changes the nature of competitive environment of the company and motivates the need to scale returns from international markets in order to remain competitive also in conventional markets. As an advantage of born globally, the internal structure of the company which encompass the product, management, knowledge, resource acquisition and management, and networking capabilities of the company, is designed to fit the international businesses. Unique and value added products with significant first mover advantages or network effects allows born-global companies to enter the international niche markets and gain competitive - 38 - International Conference on Entrepreneurship IEC 2014 advantage compared to its transportation and other logistics costs, and low global trade barriers (Dlugoborskyte & Petraite, 2013).

As an additional characteristic of a born global company, born-globals are newly emerged companies with shortage of tangible and intangible resources, including the crucial resource of experience (Falay et al. 2007). Furthermore, in their early phases, born-global companies have to face risks and uncertainties associated with the foreignness of their target markets with lacking of experience and resources needed for internationalization (Efrat & Shoham, 2012) On the other hand, some researchers suggest that earlier the company internationalizes, the better its performance in foreign markets. Because when the company gets older, the managerial institutions have been rooted. The new information and the new culture of the foreign country have become hard to adopt and might include some conflicts with the company’s heritage (Knight & Cavusgil,2. BORN-GLOBAL 2004). COMPANIES 2.1 Literature Review

Studies and discussions about factors that affect a company’s decision to export, have been ongoing for decades, theoretical and practical knowledge of exporting remains limited and offers few insights for managers who are responsible for internationalization decisions. (Yi & Wang, 2012) In global literature, a lot of different perspectives have been used to explain the behavior of companies in internationalization. The Uppsala Model which is quoted by Johanson & Vahlne in 1997 and Innovation Model which is quoted by Bilkey & Tesar in 1977 are two famous traditional schools of research that elaborate on internationalization as an incremental process. The Uppsala Model basically emphasized that a company starts international activities from geographically close markets, which have similarities in language, culture, policies and political systems. Additionally, the Uppsala Model of internationalization explains not only why and how companies internationalize in a gradual and linear fashion but also why companies export and the role of exporting in the internationalization process. (Yi & Wang, 2012) The Innovation Model which is similar to Uppsala Model emphasizes on gradual stages and the slow- ness of learning on acquisition of relevant knowledge, experience and resources. In both Uppsala and Innovation Models companies need to go through the incremental stages to gain market knowledge and commitment to go for internationalization. (Falahat et al., 2013) On the other hand, these two well-known models are insufficient to describe the growing number of companies that are providing goods and services globally from birth. (Kuivalainen et al., 2012)

The concept of global-born companies has emerged in 1993 with the study conducted in Australia by McKinsey & Company. The study stated that there were two types of International Conference on Entrepreneurship IEC 2014 - 39 - emerging exporters which are born-global and domestic-based. In the research, around 700 exporters which operate in a variety of industries in Australia were used to differentiate two types of internationalization. %25 of those exporters was referred to be global born that average two years after their establishment, they had started to export and approximately %76 of their total sales was coming from exportation. %75 of the exporters –the rest- consisted of domestic-based companies which started to export for the first time after on average twenty-seven years and exporting approximately 20% of total sales. The importance of the research conducted by McKinsey & Company is the first concept study about emerging born-global internalization which differentiates from traditional one and for the first time to be stated on the definition with characteristics. (Kalyoncuoglu & Uner, 2010)

The researches about born-global companies have up trended since 1990s. (Peters- en & Tobiassen, 2012) A new challenged appeared in the global literature on stream of research challenging conventional wisdom in international entrepreneurship and born-global companies by being primarily, but not only, focused on studying the early and accelerated internationalization process of some new or young and highly entrepreneurial small ventures (Rialp-Criado et al., 2010) which have conducted a global strategy from their inception that is not consistent with the traditional expectations. In 1996, Knight and Cavusgil have defined the content born-global companies as “the new phenomenon presents an important new challenge to traditional internationalization theory.” (Knight & Cavusgil, 1996) The findings of these researches have also contradict- ed the conventional view presented in knowledge-based internationalization process theory, which suggests that companies experience an incremental development in the internationalization modes used during their internationalization processes. Over the years, although the concept of born-global companies did not have been changed too much, they have been named as born-globals, global start-ups, high technology start- ups, infant multinationals, instant internationals and international new ventures by many different researchers interested about this subject. (Melen & Nordman, 2009)

According the study conducted by Cavusgil and Knight in 2004, born-global companies acquire a different character by reliance on advanced technology and found market advantage through product or process innovations. Born-global companies give little or no attention to their home market and operate in knowledge-intensive environments. Eventually, all resources are devoted to the international marketplace since building a sizable home market advantage is not a part of the company’s strategy. The company’s first aim and the biggest motivation is a globally committed management and their desire to serve small, dispersed niche markets; the development of more and more dispersed niche markets is expected to grow. The company’s pace of expansion and expansion patterns are both fast and multidirectional and commonly penetration of multiple - 40 - International Conference on Entrepreneurship IEC 2014 markets simultaneously occurs. (Persinger et al., 2007)

In global literature, there are a lot of studies conducted to understand the internationalization characteristics and decision making process of born-globals in near past. As- pelund & Moen have studied on the main characteristics of born-globals and differences in governance structures between different types of international companies (Aspelund & Moen, 2012) Furthermore, in 2012 Gonzalez Menorca et al. have stated the resources and capabilities of born-global companies with the evidence from the Spanish wine producing sector. The results have showed that the human-based capabilities and resources (personal development and sustainable learning process of individuals) of a born-global company have a significant importance, in comparison of traditional and born-global companies (Gonzalez Menorca et al., 2012). In 2014, Cannone & Ughetto have studied in which level of decision making process; born-global internationalization is accepted by examining the determinants of early internationalization in a cross-country context. The result has suggested that limited quantity of sale in small domestic markets and entrepreneur’s knowledge about foreign markets result in early internationalization. (Can- none & Ughetto, 2014) To mention just one more, in 2013, Sekliuckiene & Maciulskaite have reported that the external an internal conditions of the company, decision making of internalization, market research, selection of targeted market and company’s previous outcomes are major strategic decision steps of a born-global company (Sekliuckiene & Maciulskaite, 2013). In earlier studies, Hewerdine & Welch also have investigated the inception process of born-global companies and the international activities in this process. In the conclusion, their study initially suggests that once organizational emergence is factored in, a new perspective on company internalization can be gained. Additionally, Hewerdine & Welch also mentions that the pre-incorporation or gestational phase of born-global companies has to be involved into the study of emergence of born-globals. (Hewerdine & Welch, 2013)

To understand a born-global company’s success in internationalization, its’ life cycle has to be analyzed. A born-global company has different phases which provide propositions backed up by empirical evidence regarding the reasons for the life cycle. Progres- sion of a born-global company includes three phases. In phase 1, the introduction and initiation occurs. Despite the limited resources and an underdeveloped organizational structure, born-globals’ principal resources consist of the founder’s unique entrepreneurial skills in order to develop unique products with global market potential. In this phase, the initial important decisions like the financial institution and marketing chan- nel are made that determines the growth of the company. Phase 2 starts with growth and resource accumulation. A born-global company has to face the decisions of relevant marketing channels and network relationships (Gabrielsson et al., 2008). The obstacles associated to enter a new market can be handled relying routinely on network rela- International Conference on Entrepreneurship IEC 2014 - 41 - tionships. (Musteen et al., 2010) Some researchers also mentioned that the born-global needs to position itself in relevant channels in order to compensate for its resource shortfalls. The success in this phase hides behind a large extent on the product/services themselves and the ability of the born-global to place it on the market. Finally, in phase 3, the break-out happens which has significant importance because as the steps of the growth weak the born-global will plunge into a conventional slow-growing international entrepreneurial small-medium size enterprises. On the breaking point of phase 3, the company can elect to live through break-out onto a new path and/or new market. They also can adopt break-out strategy leverage on the organizational learning effort they have deployed and the experience accumulated from demanding global customers. This helps them to organize a global market positioning of their own, which can be totally or partially independent of the original key customers (Gabrielsson et al., 2008).

Born-global phenomenon is getting more and more important in internationalization, because some researchers support that born-global phenomenon first emerged in countries with small domestic markets, but is now appearing in markedly large numbers throughout the world and reports on the widespread emergence of born-globals in numerous nations (Knight & Cavusgil, 2004). As Knight and Cavusgil have mentioned in their study, born-globals are emerging substantial numbers worldwide, and likely reflect an emergent paradigm, with the potential to become a leading species in the ecosystem of international trade. Oviatt and McDougall also implied that in a near future, more and more non-manufacturing companies will fit the definition of born-global. Persinger et al. suggested that even in the emerging countries, the opportunities for born-global companies will grow in the next 10 or 15 years because the born-global phenomenon is encouraging and it implies the emergence of an international exchange system in which any company can be an active international business participant regardless of age, experience, and tangible resources. According to Persinger et. al, the most important emerging countries including Turkey, are expected to be poised to capture most of that growth because they have done the difficult and, at times controversial, economic structural changes and reforms in order to take advantage of the global marketplace (Persinger et al., 2.22007). Key Factors in Emergence of Born-Global Companies

The increasing number of born-globals may be identified by changing conditions of global market which many industries have been exposed to during the recent decades. Hence domestic market demand is too small even in large countries; companies have started to produce very specific materials and components which they can sell in the international marketplace. (Madsen & Servais, 1997) With the rise of the niche markets, the global and domestic changes in the economy, technology and socio-economy in human lives have brought a new phenomenon named born-global. (Falay et al. 2007) - 42 - International Conference on Entrepreneurship IEC 2014 Drivers for the rapid internationalization of ‘born-global’ companies are numerous. Re- searchers indicated different factors facilitating the born-global expansion. The increasing role of niche markets and greater demand for specialized or customized products are the leading factors of born-globally internalization. In today’s markets, a lot of product lines have shorter life cycles and this factor is causing born-global companies to adopt an international perspective regardless of their age and size. (Persinger et al., 2007) Knight and Cavusgil also reported that in macroeconomic environment, two key trends which have substantially reduced the transactions costs of foreign market expansion drive early adoption of internationalization. First trend is the globalization of markets that serves companies countless sourcing, production, marketing and numerous cross-border alliances for product development and distribution. Second trend is associated with the technology advances which have made widespread diffusion of e-mail, the Internet, and related communication technologies. (Knight & Cavusgil, 2004)

The key external and internal drivers of born-global companies can be explained as the topics below: • Advances in information and communications technologies have enabled SMEs in- expensive way to access information via telephone, fax, voice mail, e-mail, internet and computer technology. • The concept of globalization allows businesses to reach knowledge of the whole sectors and opportunities in all over the world. Additionally, companies have become able to access high technologies and tools in the overseas countries. national• With market the advantage appeal to. of being small-scale businesses SMEs can take faster decisions, respond customer requests and needs more easily and adapt the standards of the inter-

• Advances in production technologies in many industries have enabled SMEs to produce low-scale batches in a more economical way. The ability to produce in small amounts for each party has narrowed the market segments and almost started manufacturing personalized items. (Kalyoncuoglu & Uner, 2010) • Transportation channels have become cheaper with the advances in the technology and specialized product/service has become more profitable relative to its logistic costs. • As an effect of globalization trade barriers have become simplified and easy to handle. • Born-global companies have key managers who have experience in international markets (Cannone et al., 2012), international business vision and enough knowledge in order to get ability to recognize opportunities in foreign markets. Additionally, their personal characteristics are more likely to be more proactive, innovative and risk-tolerated. (Kalyoncuoglu & Uner, 2010) The entrepreneur’s desire to be involved in international markets also is a key driver of the exploitation of born-global companies. (Cavusgil & Knight, 2009) International Conference on Entrepreneurship IEC 2014 - 43 - • International marketing activities with buyers, sellers, foreign distributors, trading companies, strategic business partners, etc. has become easier to make with the growing importance of the global network connections. • The niche markets has enabled SMEs -which are doomed to have limited resources and capabilities- to offer personalized service and specialize in the specific product lines, in order to compete with the large-scale enterprises. (Kalyoncuoglu & Uner, 2010) • Customer tastes and needs have become international. With the rise of internet and other communication channels that follow internet revolution, the products/services have become more marketable in all over the world. • The major competitors of a company that operates in a domestic market have already internationalized or will be very soon. In order to involve in the competitions the conditions force companies to become internationalized (Kudina et al., 2008). • Human being is living in a technological era and technology companies producing cell phones, computers and other accessories are rising. Innovative products/services also are easy to be involved in multinational markets. Nowadays, consumers are looking for knowledge-intensive and high technology products and services (Cavusgil & Knight, 2009)

The studies about the factors driving born-global exploitation are conducted by many different researchers. In the study conducted by Laanti et al. (2007), the globalization process of B2B born global companies, the roles of founders and managers, the networks, the financial resources of the companies and the innovations behind the companies are discussed. Based on earlier researches that claim a narrow segment would bring out the relevant differences of globalization, a specified business segment –wireless technology- is used in order to generate a richer data. In this research, Laanti et al. uses multiple-case study methodology and interviews with four wireless technology born-global companies in Finland. In the conclusion of the study, Laanti et al. supports the earlier researches on born-globals. Resources and capabilities, complementarities of the experiences, skills of founding team, the role of domestic network partner and global network2.3 The are Characteristicsstated as important of Born-Global causes of global Companies expansion (Laanti et al. 2007)

Multinational companies are generally seen as big cooperation with a lot of financial and institutional advantages and experiences, but with the rise of technology era and the decrease of the transportation and communication activities has been lead small and medium size companies challenge in the global markets. Despite the born-global companies are much smaller in the cooperate size from the multinational companies, they are similar in targeting international markets and value added products/services. However, born-global companies have some specific characteristics that apart these two kind of multinational companies. First of all, bigger multinational companies have been - 44 - International Conference on Entrepreneurship IEC 2014 using traditional way of internationalization that requires a satisfying success in domestic market. (Ural & Kucukaslan, 2008) Traditional internationalization theories suggest that companies build a domestic market before gradually starting to export to neighboring or culturally close markets, thereby reducing risk and uncertainty. The exploitation of new global conditions, consequently, cause exclusive internationalization pathways of born-global companies which differ from traditional internationalizing companies as being not emergent or incremental, but rather initially intended. (Dlugoborskyte & Petraite, 2013) In the following growth steps, they start considering engagement in entrepreneurialmarkets that are perspective. culturally or/and geographically distant. Secondly, the born-globals are much younger in the terms of establishment and managerial teams and require an

Based on the study conducted by Ural and Kucukaslan, the characteristics of born-global companies can be classified as follows; • The managers of born-global companies see the world an open market, not a additional market to the domestic one. (Ural & Kucukaslan, 2008) • Generally, they start exportation in three years after their establishment. (Knight & Cavusgil, 2004) • The tangible resources -such as financial and human resources - of born-global companies are limited, but the expertise knowledge of the product/services leads them to reach success. (Sekliuckiene & Maciulskaite, 2013) • They are entrepreneurial. Company’s entrepreneurial orientation contributes to its ability to create processes, practices, and decision making activities that brings succes in the entrance into foreign markets • They produce a unique product/service with the help of high technology. • They sell value added products/services which differentiate high quality or special design. • They produce unique and complementary materials in medical, scientific and environmental sectors and computer units. (Ural & Kucukaslan, 2008) They reduce the competitive advantage of big multinational companies in niche markets and target a narrow customer segment which might be geographically distributed. Offering new and distinctive products to niche markets contributes to superior international performance of these born-globals. (Sekliuckiene & Maciulskaite, 2013) • They are known as learning companies. They get the information and implement very quickly in order to gain competitive advantage. • Theiri. organizational culture has 6 different dimensions. ii. They are market-oriented and closely look after the international advantages. They are open to the new information and learning-oriented. They gather information about international markets and seek advantages. (Ural & Kucukaslan, 2008) International Conference on Entrepreneurship IEC 2014 - 45 - Some researchers apply that the development of dynamic capabilities has been closely linked to the ability of a company to constantly adapt to changes via internal organizational processes. Organizational learning covers the processes involved in assimilating new knowledge into company’s knowledge base. Hence pursuing international opportunities involves learning about a range of conditions and phenomena, often not present in the domestic market. Competitive advantages here arise from the knowledge obtained fromiii. company’s exposure to a variety of conditions that exist abroad. (Dlugoborskyte & Petraite, 2013) iv. They are innovative. As a leading characteristic of an international entrepreneur they instantly follow the innovations. v. They can take risks and reserve a considerable amount of resources for international markets that they do not operate in. vi. They can merge with other institutions. According to past studies about born-globals, merging with local agents and multinational They reward their staffs who come with an advantageous and innovative idea. As a result, one of the most important dissimilarities of born-global companies is that they are much more global-oriented and take the risk of reserving their resources for the different international markets. (Ural & Kucukaslan, 2008) Another key dimension of born-global companies is that they do not have deeply rooted administrative heritage of long-established businesses. They easily adapt to the routines of the new market and the country. In opposition to born-global companies, long-established companies must live an unlearning process which is more difficult as firms get older, because new knowledge that leads to new routines tends to conflict with existing operations and management’s embedded3. ENTREPRENEURIAL mental models. (Knight ABILITIES & Cavusgil, FOR A SUCCESSFUL 2004) BORN-GLOBAL COMPANY

Abilities are important resources to born-global companies which are poor in tangible resources, because they deal with diverse environments across numerous foreign markets. The level of abilities helps companies to reduce their liabilities of foreignness and newness. Foreignness can lead the unfamiliarity and strangeness. Newness is a also a characteristic for a born-global company in terms of being a young/new company and entering of new markets. A born-global company has to bring out its’ abilities and consistently replicate them across numerous and varied markets produces value in order to reach3.1 success Opportunity with the Identification lack of tangible resources. (Knight & Cavusgil, 2004)

Opportunity identification for value creation lies at the center of entrepreneurship, because if an entrepreneur cannot add value for a particular product or create a new product with a measurable value to satisfy for a specific need, there won’t be any successful marketable product. Some researchers suggest that in order to identify opportu- - 46 - International Conference on Entrepreneurship IEC 2014 nities, an entrepreneur has three ways; active search, passive search and creativity and imagination. As an important part of entrepreneurship, international entrepreneurship and born-global companies are the using field of these three elements. First of all, active search refers using searching skill for gaps in the market. (Karra et al. 2008) Because some researchers applied that before a company can be global it must think global and global vision exists from the beginning that is easily communicated to others in the company. (Persinger et al., 2007)Secondly, passive search or fortuitous discovery means that finding an opportunity in the course of other activities, or by virtue of their particular experiences and existing stocks of knowledge. Finally, creativity and imagination lead entrepreneur to find an opportunity through a set of cognitive processes that allows a given entrepreneur to envision new resource combinations that could lead to the development of new products and services. Some researchers also suggest that sustaining the uniqueness of the product or service, usually through special knowledge or know- how, is important (Persinger et al., 2007). In real life, opportunity identification requires combination of these three factors, but the extent to which each is important will vary according to the entrepreneur and their environment. An entrepreneur has to know that international opportunity recognition which is a much more complicated activity differs from domestic opportunity recognition. In domestic area, opportunity recognition does not3.2 require Recognition a degree ofof Institutionalinternational awarenessDistance and understanding (Karra et al. 2008).

The second ability for a successful born-global company is the recognition of institutional distance which is based upon the differences in business environments that companies face moving from a home to a host country and the assumption that they encounter greater risk as the institutional arrangements of the two contexts become increasingly diverse. In order to reduce the effects of institutional distance, a born-global has to convert business concepts and opportunities between national contexts, and articulate and make them relevant to people in different countries.

Some researchers suggest that a successful translation of business concepts and opportunities between countries or continents is upon three components. First of all, an entrepreneur has to understand new customers by developing detailed social and cultural knowledge about the markets they wish to enter. Buying behavior of customers, local specialized needs, knowledge about cultural norms and legal and regulatory environment have to be learned and experienced. Additionally, top managers should have prior international experience and the ability of understanding of letters of credit, exchange rate risks and communication and cultural difficulties. (Persinger et al., 2007) Secondly, the development of networks of key actors in the entrepreneur’s target markets is a must in a successful international entrepreneurship activity. Born-global companies as international entrepreneurs operating in a foreign country or a continent are liable to International Conference on Entrepreneurship IEC 2014 - 47 - suffer from problems of credibility, and alliances with local actors can confer a degree of legitimacy. Finally, a born-global company may face to foster human capital in each country where they are active, although it is difficult to understand the host country’s institutional environment and adopt practices and ways of working that are consistent with local traditions. In such times, an international entrepreneur has to significantly alter their practices and/or business models to align their operations with host country conditions.3.3 Collaboration (Karra et al. with 2008) Local Agents

One of the important issues for a successful international business is to build complex cross-cultural social relationships with partners across different parts of the supply chain. For example, for positioning in a strong distribution network, instead of establishing new ventures in a foreign country, an international entrepreneur may choose to collaborate with cross-culturally. Additionally, an international entrepreneur has to be able to identify suitable partners, and to build and maintain relations with them. A successful collaboration across cultures involves two key components: the ability to identify and select competent partners. (Karra et al. 2008) Strong international business networks help to identify opportunities, give advices and assists in negotiations. (Persinger et al., 2007)4. THE ROLE OF KNOWLEDGE IN INTERNATIONALIZATION

Industries are becoming increasingly knowledge-intensive and high knowledge intensity is associated with high levels of internationalization. Some researchers imply that Multinational Enterprises (MNEs) are found in industries in which knowledge capital and knowledge-intensive production are important. Among the characteristics of MNEs are associated with high ratios of research and development relative to sales and tend to have high levels of intangible assets. Additionally, there are numerous studies to support the view that research and development intensity tends to be positively associated with the propensity to engage in foreign production. Furthermore, while there are high initial costs of research and development, subsequent products can be supplied at lowa) cost. b)Key characteristics of knowledge in internationalization; c) The knowledge about company’s market-specific is a must. d) Knowledge requires experience and is acquired in a learning-by-doing process. Knowledge is grown into the individuals. Market liability increases proportionally with acquisition of market knowledge.

The knowledge about international markets and the efficiency, by which the knowledge is learned, are important determinants of international growth for entrepreneurial companies. Some researchers have extensively suggested different aspects of interna- - 48 - International Conference on Entrepreneurship IEC 2014 tionalization knowledge accumulation—the effect of variation on knowledge accumulation in the internationalization process, experiential knowledge and cost in the internationalization process, the perceived usefulness of network experiential knowledge in the internationalizing company, and path dependence and knowledge development in thei. internationalization process. The defined three types of international knowledge as internationalfollows: operations. ii.Internationalization knowledge: a company’s capability and resources to engage in

Business knowledge: information about competitive situations in specific markets (Brennaniii. & Garvey, 2009), customers and market conditions in foreign market (Zhou, 2007) Institutional knowledge: information about foreign culture (Brennan & Garvey, 2009), institutions, legal processes and regulations.

A company’s interaction with these knowledge forms has to be a continuous, durable and ascending. As well as the number of countries, duration that a company operates in a foreign country can affect the knowledge accumulation of internalization. Research made by Zhou in 2007, the role of foreign market knowledge is quested. The main examination of the research is that whether or not foreign market knowledge may lead to early and rapid internalization. A large number of born-global companies in China are surveyed, because China companies have been expanding all over the world in the last years. As a result of the research, global literature about foreign market knowledge is approved and it is found that foreign market knowledge leads to early and rapid internalization. Furthermore, the results also indicate that entrepreneurial market knowledge is not a naturally learned process which can be affected by cultural diversity of the countriesREFERENCES that a company operates in (Zhou, 2007). Aspelund, Arild; Moen, Carina Flaam. International new ventures and governance structures—are international entrepreneurs strategic or entrepreneurial?. Journal of Management & Governance, 2012, 16.1: 125-146.

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- 52 - International Conference on Entrepreneurship IEC 2014 A STUDY OF THE THE RELATION BETWEEN ENTREPRENEURSHIP EDUCATION AND STUDENTS’ FUTURE ENTREPRENEURIAL INCLINATION Dr. Gizem AKINCI

[email protected] Faculty of Economics and Administrative Sciences, Istanbul Aydin University Dr. Dinçer ATLI

[email protected] Faculty of Communication, Uskudar University Dr. Fırat BAYIR

[email protected] Faculty of Economics and Administrative Sciences, Istanbul Aydin University

ABSTRACT

Entrepreneurial characteristics predispose entrepreneurs towards entrepreneurial activities and these characteristics make them different from non-entrepreneurs. The main aim of this study is to make a comparison between the students who are entrepreneurially inclined and those who are not on the basis of entrepreneurial characteristics. The personal characteristics and the entrepreneurial inclination of the students was examined before and after taking the entrepreneurship class. In this study, six traits, namely need for achievement, locus of control, risk taking propensity, tolerance for ambiguity, innovativeness and self-confidence, were used to define the entrepreneurial inclination of students. This study was conducted on a sample of 298 students motein İstanbul entrepreneurship. Aydın University. Findings from such a study will help universities and other institutions to develop suitable educational programs and policy implications to pro- Keywords:

INTRODUCTION Enterpreneurship, education, Turkey

The new venture formation has become an increasingly relevant and interesting area for research with the globalization of the business world. In developed and less developed countries increased entrepreneurial activity is seen as a means for economic growth. Furthermore, entrepreneurship, has been seen as a potential catalyst for technological progress in the Schumpeterian tradition. Ely (1912) was one of the first to explain the term, “entrepreneur”.(Carland and Carland, 1997).Cantillon also described an entrepreneur as a rational decision maker who bears the risk and manages the firm. (Carland and Carland, 1997) Schumpeter (1934) defined entrepreneurship as doing International Conference on Entrepreneurship IEC 2014 - 53 - things that are not generally done in the ordinary course of business routine. McClelland (1961)focused on the personal characteristics and cultural values of those who engage in entrepreneurial role. Drucker (1985) pointed to that the most important aspect of entrepreneurship is innovation in a business setting. According Kuratko and Hodgets (2004), entrepreneurship is a dynamic process of vision, change and creation. To Ku- ratko (2005), an entrepreneurial perspective can be developed in individuals. Drucker thought that the entrepreneurial was not mystique and had nothing to do with genes. He pointed that it was a discipline and, like any discipline it could be learned (Druck- er,1985).Although prior research has debated whether entrepreneurial characteristics are innate, recent findings support the idea that psychological attributes associated with entrepreneurship can be culturally and experientially acquired (Vesper, 1990; Gorman et al., 1997).

Besides the very rapid growth of entrepreneurship literature and entrepreneurial ventures worldwide, perhaps the most obvious evidence is the emergence of entrepreneurship education in university courses. Entrepreneurship education has positive effects both on the individual and the enterprises level and as well as on the macro level which is very important. Entrepreneurship education, provides a positive contribution to a career on entrepreneurship and healthy development of small businesses (Robert- son Henderson, 2000). Entrepreneurship plays an important role in the economic development of the countries, which is one of the priority policies of the European Union. According to the Global Entrepreneurship Monitor (2008) there is wide agreement on the importance of entrepreneurship for economic development. Entrepreneurs drive innovation, they speed up structural changes in the economy and force companies to shape up the old incumbent making an indirect contribution to productivity.

Due to the influence that education could have some effects on the attitudes of youth, there is a need to understand how to develop entrepreneurs. Some entrepreneurial characteristics (traits) are likely to shape their inclination to start their own businesses in the future. The main aim of this study is to make a comparison between the students who are entrepreneurially inclined and those who are not on the basis of entrepreneurial characteristics. In this study, six traits, namely need for achievement, locus of control, risk taking propensity, tolerance for ambiguity, innovativeness and self-confidence, are used to define the entrepreneurial inclination of students. Findings from such a study will help universities and other institutions to develop suitable educational programs and policy implications to promote entrepreneurship. In the first section of this paper, we propose a literature survey focusing on the entrepreneurial characteristics. The second section discusses the methodology. In the third section we present the results and finally, the fourth section we discuss and summarize the results.

- 54 - International Conference on Entrepreneurship IEC 2014 LITERATURE REVIEW

Beginning with McClelland (1961), the personal characteristics of the entrepreneur has become a popular research subject. McClelland offered a similar set of defining traits to explain entrepreneurial behavior. These traits were high need for achievement, risk-taking propensity, preference for energetic and/or novel activity, and assuming personal responsibility for successes or failure (McClelland 1961). Brockhaus also reviewed a number of trait studies and identified three consistent traits associated with entrepreneurial behavior: need for achievement, internal locus of control, and a risk-taking propensity (Brockhaus 1982). Begley and Boyd found that entrepreneurs (founders) scored significantly higher than small business managers (non-founders) in need for achievement, risk-taking propensity, and tolerance of ambiguity (Begley and Boyd 1987). By- grave (1989) presented a model that includes need for achievement, internal locus of control, tolerance for ambiguity and risk-taking propensity as vital components of entrepreneurial behavior. In addition, Robinson et al. (1991) listed achievement, innovativeness, control and self-confidence as entrepreneurial traits. According to Koh (1996) compared to non-entrepreneurs, entrepreneurs had greater need for achievement, more internal locus of control, higher propensity to take risk, greater tolerance of ambiguity, more self-confidence and greater innovativeness.

Rotter (1966) made a significant contribution to the development of “locus of control”. According to Rotter, those with a high internal score perceive that they are in control of their world and that luck and fate do not really determine what happens to them. They control their environment by the action they take. Brockhaus found that business students with entrepreneurial intentions tended to have a higher internal locus of control than those who did not have such intentions (Brockhaus 1975). Cromie, (1987) found significantly higher locus of control scores for entrepreneurs compared to experienced managers.

Classic economic theory suggests that entrepreneurs are risk-takers. Cromie and O’Donoghue (1992) reported that entrepreneurs are more likely to take calculated risks than managers, teachers, and civil servants and Chen et al. (1998) found that risk taking is a key determinant entrepreneurial self-efficacy. Koh (1996) found that entrepreneurially inclined individuals have significantly higher risk scores than the non-entrepreneurially inclined. However Brockhaus (1980) found no significant difference in the risk-taking propensity of new entrepreneurs. Risk and uncertainty are part of the entrepreneurial World. This lack of clarity creates ambiguity and Koh (1996) cited Schere (1982), Sexton and Bowman (1985) and Mitton (1989), in suggesting that entrepreneurs must have considerable tolerance for ambiguity.

International Conference on Entrepreneurship IEC 2014 - 55 - Koh (1996) also considered that self-confidence was a prerequisite for successful entrepreneurship. However, his research failed to confirm that the entrepreneurs were more self confident than others.

McClelland (1965) argued that a person with a high need for achievement “is more self-confident, enjoys taking carefully calculated risks, researches his environment actively, and is very much interested in concrete measures of how well he is doing”

Innovative activity is explicit in Schumpeter’s and Drucker’s description of the entrepreneur as mentioned before. Carland and Carland (1991) found that both male and female entrepreneurs have significantly higher levels of innovative preference than their managerial counterparts.

Previous literature also has suggested that entrepreneurial training will improve attitudes toward entrepreneurship. Various studies have examined the entrepreneurial tendencies and investigated the effects of entrepreneur training on the psychological attributes of undergraduate and graduate students and administrators. These findings suggest that entrepreneurship education and teaching programs are influencing student entrepreneurial intentions and behaviors.

Hansemark (1998) found that young adults participating in an entrepreneurship program developed a more internal locus of control had a significant increase in their need for achievement scores. Lüthje and Franke (2003) showed that engineering students’ personality traits have a strong impact on the attitude towards self-employment and their entrepreneurial intent is directly affected by perceived barriers and support factors in the entrepreneurship-related context. Berglund and Wennberg (2006) found that both engineering and business school students got high creativity scores on the personality test as a result of the entrepreneur educational programmes. In a research including Turkish university students, Gurol and Atsan (2006) found except for tolerance for ambiguity and self-confidence, all entrepreneurial traits were higher in entrepreneurially inclined students, as compared to entrepreneurially non-inclined students. These students were found to have higher risk taking propensity, internal locus of control,RESEARCH higher need DESIGN for achievement & DATA COLLECTION and higher innovativeness.

As mentioned before previous literature also has suggested that entrepreneurial training will improve attitudes toward entrepreneurship. The model suggests that certain entrepreneurial characteristics predispose entrepreneurs towards entrepreneurial activities and these characteristics make them different from non-entrepreneurs. The purpose of this study is to examine the personal characteristics and the entrepreneurial - 56 - International Conference on Entrepreneurship IEC 2014 inclination of the students before and after taking the Entrepreneurship class. The independent variables included in the study are the need for achievement, locus of control, propensity to take risk, tolerance for ambiguity, self-confidence and innovativeness. The dependent variable in the study is entrepreneurial inclination. Students were evaluated in twoSAMPLE groups: those who had and those who had not taken the Entrepreneurship class.

The study included 298 students in the Human Resources Management Program, Logistics Program, Customs Management Program, Real Estate & Estate Management Program, Jewellery & Jewellery Design Program, Computer Programming & Technolo- gy Program, Printing & Press Technologies Program, Marketing Program, Office Man- agement & Executive Assistantship Program, Health Institutions Management Program, Tourism & Hotel Management Program and Hospitality Service Program at Istanbul Aydin University’s Anadolu Bil Vocational College. This college provides a two-year program where the Entrepreneurship class is provided in the second year. The sample is including both first-year and second-year students in order to distinguish between those who have and have not taken the entrepreneurship class. A survey was utilized to collect data for this study. The survey was conducted at the end of the spring semester of the academic year 2011-2012. The number of students who participated in the survey was 172, indicating a participation rate of 57%.The research framework used in the study is adapted from the entrepreneurship model proposed by Koh. The surveyneed comprises for achieve two- mentmajor sections. The first sectionlocus measures of control demographic and personal variables propensity .The to takesec- riskond section measures the sixtolerance psychological of ambiguity characteristics which are self-confidence (containing six items),innovativeness (containing seven items), (containing six items), (containing six items), (containingLikert scale. six items), and (containing five items) .(Table 1) All opinions regarding these statements were collected in a manner consistent with the five-point LC = Locus of control, NAThe = legend for the psychological characteristics are as follows: PR = Propensity to take risk, TA = Need for achievement, SC = IN = InnovationTolerance of . ambiguity , Self-confidence,

International Conference on Entrepreneurship IEC 2014 - 57 - Table 1 Variables FINDINGS

V1. People’s misfortunes result from the mistakes they make. V7. Many of the unhappy things in people’s lives are partly due to bad luck. V13. I do not enjoy outcomes, no matter how favourable, if they do not stem from my own efforts. V19. I am willing to accept both positive and negative consequences of my decisions and actions. V25. It is I, not luck nor fate, which influence the outcome of events in my life. CONTROL VARIABLES V31. I cannot wait and watch things happen; I prefer to make things happen. V36. I believe success is a product of luck and fate rather than personal effort

V2. I take pleasure in responding to challenges,so competition makes me work harder. V8. I do not like a well-paid job if I cannot derive a sense of achievement and satisfaction from it. V14. I want to earn only as much as possible to attain a comfortable way of life. V20. I do not mind routine, unchallenging work if the pay is good V26. When I do something, I see to it that it does not only get done but is done with excellence. VARIABLES V32. I hire people on the basis of friendship and other relations (for their loyalty) rather than on the basis of competence. NEED FOR ACHIEVEMENT ACHIEVEMENT NEED FOR

V3. I do not care if the profit is small so long as it is assured and constant. V9. I am willing to take high risks for high returns. V15. I do not mind working under conditions of uncertainty as long as there is a reasonable probability of gains from it for me. V21. I do not fear investing my money on a venture whose dividends I have calculated. V27. I will consider a risk worth taking only if the probability for success is 60% or more. RISK VARIABLES RISK V33. I fear moving into a new undertaking I know nothing about. PROPENSITY TO TAKE TO TAKE PROPENSITY

V4. Job security is extremely important to me. V10. A good job is one with clear instructions as to what is to be done and how it is to be done. V16. I enjoy working in unstructured situations. V28. It bothers me when several people have over-lapping responsibilities. V35. In unclear situations, I like to make decisions and take the “lead”. VARIABLES AMBIGUITY V22. I have a work schedule which I try to follow very carefully.

V5. I accomplish most when I am alone, under no direct supervision of anyone. V11. I have confidence in my ability to achieve V17. I have weaknesses and fears that are far from being resolved. V23. I doubt my ability to cope under new, untested conditions. V29. I find difficulty in asserting myself against the opinion of majority. VARIABLES V34. Even if I am capable, hardworking and ambitious, if I do not have the money, I cannot start a

SELF CONFIDENCE CONFIDENCE SELF business.

- 58 - International Conference on Entrepreneurship IEC 2014 V6. I avoid changing the way things are done. V12. While others see nothing unusual in the surroundings, I am able to perceive in it opportunities for business. V18. I am able to beat around difficulties through strokes of ingenuity and resourcefulness

VARIABLES V24. I believe there are always new and beter ways of doing things. INNOVATION INNOVATION V30. I find it difficult to come up with new, wild or even crazy ideas.

To understand what kind of structure was formed by these statements, an exploratory factor analysis was first conducted. We were interested in how the statements in the survey were grouped in a statistically significant manner. Table 2 contains the reliability analysis results with each separate factor and the Cronbach-Alpha values for all of the variables. The Principal Component Analysis was used in the exploratory factor analysis. However, the reliability value of 8 variables (V1, V3, V4, V5, V9, V13, V22, V27) were unacceptablyTable 2 Reliability low. These Statistics variables were left out of the analysis.

Cronbach’s Alpha N of Items

738 36

Investigating the entrepreneurial characteristics more detailed in a multivariate setting, factor analysis method was applied. Before using factor analysis, the data adequacy was tested. Data adequacy is provided with KMO (Kaiser-Meyer-Olkin) and Bartlett’s Test of Sphericity as shown in Table 3. The Kaiser-Meyer-Olkin (KMO) test value in the analysisTable was 3 KMO 0.751. and Also Bartlett’s Bartlett‘s Test Test of Sphericity shows significance P<0.05.

,751 Kaiser-Meyer-Olkin Measure of Sampling Adequacy. of Sphericity Bartlett’s Test Approx. 1680,684 Chi-Square ,000 df 630 Sig.

International Conference on Entrepreneurship IEC 2014 - 59 - Six factors (IN, LC, NA, PR, SC, TA) accounted for 55.86% of the total variance. These six factors and their statements are given in Table 4. The correlations between factors areTable significant 4 Factors at 0,05. Determined by the Exploratory Factor Analysis

IN LC NA PR SC TA

IN 1.00

0.80 1.00 NA

0.81 0.87 1.00 PR

-0.63 -0.30 -0.76 1.00 SC

0.82 0.72 0.74 -0.99 1.00 TA

-0.81 -0.99 -0.73 -0.27 -0.37 1.00 Table 5 Rotated Component Matrix

Component Theoretic 1 2 3 4 5 6 Variables dimension IN v17 0,495 v18 IN 0,6020,486 SC v06v30 IN 0,646 v29v34 SC 0,608 0,712 TASC 0,673 v26v23 NASC 0,447 v28 NA -0,587 v02 NA 0,609 v12v08 IN 0,513 v24 IN 0,683 0,693

- 60 - International Conference on Entrepreneurship IEC 2014 Component Theoretic 1 2 3 4 5 6 Variables dimension v10 TA v16 TA TA -0,4950,665 v27 PR -0,419 0,416 v19v35 PR LC 0,482 v11v33 0,498 v13 LC 0,535 v21 PRSC 0,608 v15v31 PRLC 0,684 NA -0,458 v07 -0,4410,546 v32 0,6510,43 v25 LC v14v36 NALC v20 NALC 0,723 0,765 0,448

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 9 iterations.

As it is seen in Table 5 the variables are not scattered around the factors selected in the theory. In order to test the appropriateness of the variables to the factors selected, confirmatory factor analysis method was applied. To analyze the relations, the structural equation modeling (SEM) was used . In short, SEM is a method used to test and predict cause-effect relationships between variables and factors (variable groups). In this method, the relationships between variables and variable groups are first taken into account. Then, the relationships within the variable groups are addressed. (Schumacker & Lo- max, 2004). Figure 1 shows the model addressing the relationships of the six factors.

International Conference on Entrepreneurship IEC 2014 - 61 - Figure 1 The Research Model

- 62 - International Conference on Entrepreneurship IEC 2014 Table 6 Goodness of Fit Indices

Chi-Square (df=390, p=,062) 348,75

chi-square/df 0,0560,89

root-mean-squareerror of approximation RMSEA 0,92

Non-normed fit index (NNFI)

normed fit index NFI 0,910,89

Goodness of Fit Index GFI

Table 6 contains the goodness of fit indices that demonstrate how realistic the model is when it is based on the data. When viewed in light of the ideal values that are generally accepted, the goodness of fit indices appear to be realistic. To investigate if respondents who are entrepreneurially inclined and those who are not differ significantly on the six psychologicalself confidence characteristics t-tests were performed. At a 0.05 significance level, the need re- forsults achievement, in Table 7 showlocus ofthat control, those propensity who are entrepreneurially to take risk, tolerance inclined of ambiguity have significantly and inno- vativenesshigher ( p = 0.04). The remaining five psychological characteristics, need for achievement, tolerance of ambiguity, social confidence and aregenre not of significant. the studets. At a 0.05 significance level, the results in Table 8 show that there is a relation between Also there is a relation between need for achievement andTable the entrepreneurship 7 T-test results lesson taken out of the university.

Variable N p-value t-value

0,49 1,02

Need for achievement (H1) 173 0,19 0,79

Locus of control (H2) 173 0,90 0,65

Propensity to take risk (H3) 173

Tolerance of ambiguity (H4) 173 0,040,23 -0,140,29

Self-confidence (H5) 173 0,97

Innovativeness (H6) 173 1,37 International Conference on Entrepreneurship IEC 2014 - 63 - Table 8 T- test results

Levene’s Test for t-test forEquality of Means Equality of Variances Sig. Mean F Sig. t df (2-tailed) Difference

NA Genre 0,426 0,515 170 ,009* 0,2597

TA Genre 0,015 0,904 2,658 ,001*

Genre 0,009 0,925 -3,5362,122 150,442148,737 -0,25098

NASC TakLes 1,454 170 0,011*,036* 0,21989 out 0,23 -2,562 -0,30989 * p<0,05 The differences between thegroups are significant CONCLUSION

The study investigates if entrepreneurial inclination is significantly associated with the psychological characteristics of need for achievement, locus of control, propensity to take risk, tolerance of ambiguity, self-confidence and innovativeness. The personal characteristics and the entrepreneurial inclination of the students was examined before and after taking the entrepreneurship class. In order to test the appropriateness of the variables to the factors selected, confirmatory factor analysis method was applied which demonstrated how realistic the model is when it is based on the data. T-test results at a 0.05 level of significance indicate that those who are entrepreneurially inclined have greater self confidence as compared to those who are not entrepreneurially inclined. The other psychological characteristics are not significant at a 0.05 or 0.10 level of significance. The findings do not support the psychological characteristics school of Entrepreneurship. Future research can investigate the relationship between psychological characteristics and entrepreneurial inclination in a more complete research framework that is including other factors, such as family, culture, environmental and political clination.support. In accordance with these findings entrepreneurship education is regarded as an essential condition however is not sufficient in the emergence of entrepreneurial in- REFERENCES Begley, T.M., Boyd, D.P. (1986). Psychological characteristics associated with entrepreneurial performance, In R. Ronstadt, J.A. Hornaday, R. Peterson, & K.H. Vesper (Eds.), Frontiers ofentrepreneurship research(pp. 146–165). Wellesley, MA: Babson College.

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- 66 - International Conference on Entrepreneurship IEC 2014 MULTICULTURAL MERGING AND ACQUISITION: FLAGMAN OF INTERNATIONAL ENTREPRENEURSHIP AND EDUCATION Victoria BELIAEVA

Ural Federal University [email protected] Of International Protocol Office Mira Str., 19,Yekaterinburg, Russia

ABSTRACT

The given work is devoted to the most mysterious process – studying the process of national cultures merging and cultural adaptation to the new environment. This analysis is used to pose a set of research questions for future study and a set of practical recommendations for managing cultural integration in cross-border mergers. Author researches the influence of the negotiation styles, national culture types and main division between international mergers and acquisition. Modern world is characterized by the thousands of interconnected processes: integration, merging and acquisition. General trend to the consolidation of the business forms, governmental bodies and educational institutions is fully realized in the XXIst century. Organizations are getting together to achieve new strategic targets and find new directions. Uniting all the experience of companies, new innovative technologies and brilliant ideas could lead to the perfect results. But of course, having thousands of advantages, we always can face weaknesses or even threats. Speaking about multicultural acquisition we don’t pay a lot of attention to one of the most important problems of the process: when we taking into account the merging process we should firstly think about the crossing of intercultural and organizational cultural points. Furthermore, the success of the merger depends not only on the integration of operations at the center of the corporation where the national culture is roughly speaking the same, but also on the integration process in many locations around the world where the national cultures differ from that in the center. The successful entrepreneur of such company should have special set of the competences which would characterize him as a human and a specialist. Social, personal, economical, organizational, managerial, scientific and cross – cultural competences are theKey base words: permitting the specialists to orient in the internationalized labor market.

Multiculturalism, internationalization, international entrepreneurship, cross – cultural education

International Conference on Entrepreneurship IEC 2014 - 67 - Discussing the characteristics and the vector of international environment it is necessary to analyze in details one of the main features of modern society – cross cultural activities. Integration and internationalization of the economic and social processes in the modern society contribute to the emergence of special cross – cultural environment for business communication. Hence taking into account cross – cultural peculiarities is by all means the key factor of the effective market development, strategic management and entrepreneurship.

Yet another factor and argument in favor of the development of the business entities is integrative intellectual potential of all staff. Modern society requires absolutely new type of specialists, able to adapt to permanently dynamic environment, innovative behavior, application of the new technologies in the spheres of science, economy and production.

The given work is devoted to the studying the process of national cultures merging and cultural adaptation to the new environment, difference of organizational and national cultures and the phenomena of tolerance within educational society of future managers.

While studying the multicultural effect from merging and acquisition it is very important to start from the beginning and firstly notice the difference between national and organizational cultures in international organizations.

The organization gives the ability to identify through the assimilation of organizational norms, while the national culture shapes the national identity. Organizational culture creates the uniqueness of each organization with its own system of values, beliefs, attitudes and norms of conduct; it is studied by the new member of the organizing community and is capable of change.

Firstly, organizational culture is different from the national culture because the assimilation of values and norms in the latter occurs in early childhood by unconscious introjections, whereas organizational values are perceived and assimilated usually by consciously adult person.

E. Schein considers the impact of organizational culture on employees as strong as the influence of national culture on the lives of people (Schein, 1996). Lauren doubts that organizational culture can affect at such a deep level, pointing to the invincibility of the national culture in conflict with organizational culture (Laurent, 1986). Hofstede believes that the organization as a social system has a different nature than the nation, and the worker himself largely determines the degree of self-absorption in the organiza- - 68 - International Conference on Entrepreneurship IEC 2014 tional culture (Hofstede, 1991).

Researchers (Berry, Poortinga, Segal, Dasen 1992), having analyzed the works devoted to organizational and national cultures, concluded that in culturally homogeneous countries organizational cultures are not particularly different from each other.

A. Fujita [Fujita, 1990] described a “fusion” through which Japanese companies, acquiring foreign companies, create hybrid, problem -solving cultures. The fusion process can be slow and requires the participation and involvement of both sides. New culture does not reproduce the climate of the Japanese company and is not typical in the local national culture. According to observations by Fujita, a fusion of cultures is effectively used in automobile companies, high-tech business.

Crossing organizational and national cultures should very slow and accurate process because problems of cross-cultural communication in organizations are caused primarily by the fact that the sender and receiver of the message, who belong to different cultures, interpret the same text (verbal or nonverbal) differently, because they put it in a different context. When we speak about acquisition, top management of united company creates special set of rules, not to increase cultural misunderstandings inside the company and not to decrease company effectiveness.

Every culture has its own model of an ideal communication that is unconsciously or consciously performed by representatives of this culture in communication and is used as a framework for interpretation of messages from members of another culture. Thus, straightforwardness is characteristic for an American style of communication, which is not effective for all cultural contexts. In Japan, people often avoid direct statement of facts to enable people to avoid confrontation and “to save face.” Imai [Imai, 1975] noted the existence of 16 different ways to say “no” in Japan.

Indirect communication style is typical for high-context cultures and doesn’t cause any difficulties in understanding of other people, but is able to cause a mishap when dealing with people from low-context culture.

Choice of oral or written form for your messages is often determined by the culture. Some cultures tend to written forms, other are «oral». Thus, an English manager would prefer to use written communication by e-mail in the inter-organizational communication. Most Russian managers prefer to go to a neighboring department to talk to a partner personally, expecting a greater effect of a direct communication. Thai manager writes a report to his boss, but communicates with colleagues verbally, expressing their feelings – which is important to him. International Conference on Entrepreneurship IEC 2014 - 69 - Selection of specific words is important. A particular word may have different connotations in different cultures. For example, the word «eventuellement», means “probably not” in France and “obviously something’s going to happen eventually” in the English equivalent. Negotiator from England may seek for a compromise, since a “compromise” for him is a way to resolve the problem without sacrificing the basic interests and values. In Iran, to “compromise” is to betray the basic beliefs and values.

Different cultures value different types of politeness. However, the politeness itself is interpreted similarly: to be polite is not to cause unpleasant emotions in your partner, communicativeto express your effects.attitude not only with verbal, but also non-verbal signals. Nevertheless, the form of expression of politeness may be positive and negative, causing paradoxical

What else affects the moderation of international acquisition process? Now we would like to study the concept of tolerance, as well as examine the possibility of improving the content and organization of staff tolerance right after the merging process.

In the “Declaration of Principles of Tolerance” approved by resolution of the Gener- al Conference of UNESCO on 16 November 1995 the “tolerance” is defined as “respect, acceptance and appreciation of the rich diversity of our world’s cultures, our forms of expression and ways of being human, not concession, condescension or indulgence” but “ active attitude prompted by recognition of the universal human rights and fundamental freedoms”. Russian sources interpretation of the term tolerance is somewhat different. For example, in the “New Philosophical Encyclopedia” Tolerance is defined “as the quality that characterizes the relationship to another person as the equal person and expressed in the conscious suppression of feelings of rejection caused by all that marks the other (appearance, manner of speech, tastes, lifestyle, and beliefs). Tolerance implies mood for understanding and dialogue with others, recognition and respect for his right to be different”. In “Sociological Dictionary” there three formulations: “1. Tolerance to other’s way of life, behavior, customs, feelings, opinions, ideas, and beliefs. 2. Endurance to the adverse emotional factors. 3. Missing of responses to a negative factor by reducing the sensitivity to its effects”.

The opinion of Prof. Drobizheva (2000) should be noticed: the tolerance - is a way of philosophy, especially, respect for others, a value system that recognizes the diversity of the world, the willingness to cooperate.

In principle, the appearance in the Russian lexicon borrowed words suggests major changes in processes in the field of public relations. It is interesting to find out what does student mean by the term “tolerance” and how to build tolerance in the student society. - 70 - International Conference on Entrepreneurship IEC 2014 To evaluate the issues of tolerance the questioning of managers from Australia, Unit- ed Kingdom and Russia was held. About 510 people participated in the experiments. The resultsTable are 1 presented– The notion in Table “tolerance” 1.

The example of notion Index

Recognition, respect and promote the rights of people 503 2 of different ethnic, social, ethnic, and other features 407

Tolerance for different opinions, beliefs 221

43 Ability and willingness to engage in dialogue 69

5 Art of living next to the dissimilar

6 Desire to resolve conflicts without violence 2773

Kindness

In general, managers demonstrate an understanding that tolerance is formed and adjusted and express practical recognition and respect for beliefs and actions of others. At the same time, 30% of manager associate tolerance with the existence of an understanding of a different opinion and different beliefs. 17% of respondents are willing and eager to discuss the arguments problems.

Conscious manipulation of the concept of “tolerance” promotes positive interaction between staff of merged company and enrich the new generation of student a new and different cultural heritage, social experience. Speaking about new generation, we should notice that tolerance should be studied somehow at universities to prepare students to cross – cultural life. Before a research among international staff from Australia, Great Britain and Russia was made, we marked the main peculiarities of education and background of cross – cultural knowledge in these countries.

The Australian universities are one of the leaders of the volume of educational service export in the international market due to the certain balance between the approaches to the education as cooperation, on the one hand, and an entrepreneurship on the other. It helps to convert the international education into the profit industry of the national economy. The key element of the promotion and positioning of the Australian education programs on the international market includes not only variety of the educational ser-

International Conference on Entrepreneurship IEC 2014 - 71 - vices possibilities, but also the opportunity to get to know the cluster of the tourist and excursion industry of the country during the learning.

Among the factors of success that make possible for the Australian educational content to play a key role in the educational service promotion to the international customers, we can mention − high quality of the professional education, − wide range of the Programs in English, − personal trajectory of the studies (on the pre-university courses), − tutoring for the international students, − guarantee of the quality of the international Programs, − internationalization of plans of studies.

It is important to underline the activity of the International Education Association of Australia that supports the international standards of professionalism of the education on the national level. There are high demands, made by the state and the society, on the learning process organization and on the specific competences that the students should have obtained by the end of any of the supposed Program of studies. Thus, for example, the Sydney University declares, “Graduates of the university will be Global Citizens, who will aspire to contribute to society in a full and meaningful way through their roles as members of local, national and global communities”.

Key competences of the graduates is not only the result of the education, but also characterize the specification of the studies in each of the universities adding to the basic program. Modern profile of the graduates includes common for all universities background as well as “specific qualities, skills and capacities to understand the issues those a student should develop during the time of the learning within the walls of alma mater. Those specific skills are wider than the knowledge the student have obtained during traditional university learning. Those are qualities that help prepare the graduates as creators of public good and uncertain future”.

Growing interest in international students recruiting (the rate of the international students in Australia is more than 20 percent) lead to the rise of the number of affili- ates and different forms of cross-border education. Careful attention to the quality of the transnational education services and extensive usage of the best practice results in the need and opportunity to elaborate appropriate plans of studies for the international students. The internationalization of the plans of studies “includes the set of values such as openness, tolerance and culturally-based behavior, they are necessary to understand and examine the cultural differences”.

- 72 - International Conference on Entrepreneurship IEC 2014 The Great Britain following the Australian example build up the international education system as a business structure. After the reduction of the public funding for the universities, there were eliminated the grants for the international students and now they are paying in full for the education. Due to the examination of the Australian experience, the British universities start to formulate specific Programs and to internationalize the plans of studies. Nonetheless, the main contribution of the Great Britain to the development of the internationalization of the higher education is represented by the correlation established between the internationalization and cross-cultural communication. The novelty of the approach includes the understanding of the fact that “numbering of the variety of international and national students is not two different tasks, but the solid one”. The National Strategy for Education proclaims that “development and sustainability of the global educational system start from the understanding of the world where we live – the values and cultures of different nations, dimensions of the high mutual dependence, and ways by which we, global citizens, can influence and create conditions to change global economy, environment and society we are forming part of”.

The British Universities are guided by the principles of equality, pluralism and global citizenship. Increase of affordability of the higher education result in the opportunity to join the youth from different social groups, different confessions, races and political creeds in order to give them education. Exactly the variety of the students’ community determine the conditions for the correlation of the internationalization and cross-cultural approach. Such interpretation of the international education process is a competitive advantage of the British educational system. The government of the Great Britain is interested in the internationalization due to the new perspectives of the investment to develop the national system of the higher education according to the global trends and to train qualified innovative personnel for the future society and economy. Furthermore, the government finances specialized marketing agencies in order to satisfy the demand for the professionals in innovative spheres of industry, business and education.

In the curriculum of higher education institutions, students are introduced to this term in the courses of Russian history, culture and philosophy. Tolerance among young people is an active moral power, position, and willingness to be tolerant in the name of positive interaction with other cultures, ethnic groups, people of different nationalities and religious beliefs.

The literature notes the following fact: almost half of the students taking an active interest to the new “other” people. This figure represents a good basis for the development of tolerance, as it is manifestations of interest to others, with the curiosity of dissent begin understanding.

International Conference on Entrepreneurship IEC 2014 - 73 - Concerning peculiarities of Russian education, was made a survey among national and international students: how to develop tolerance skills among the students? It is important to point that national students in Russia are multinational commonwealth that is why the results of survey are united and present characteristic of international educationalTable 2 - society.Potential for tolerance among students

A method for forming Index

1 472

To form between students respect to the diversity alitiesof world cultures and civilizations, a willingness to understand and work with people of different nation- 2

actionTo promote the development of students’ standards 328 of tolerant behavior and skills of intercultural inter- 250

3 To help to constructive interaction of social groups with different values, religious and political orienta- 4 tion, reduce social tension 110 opinions in society To reflect the diversity of cultural values, ideas, and 5 140 various forms Discloses an anti-social nature of extremism in its

Prevalent problem in the resolution of the problem, according to the majority of students (60%) is the focus on the final result - to help students to respect the diversity of world cultures and civilizations through the development of cross-cultural communication standards. It should be noted, some of the students (20%) noted the importance of understanding the mechanism of achieving the goal of a tolerant education - to promote constructive interaction of social groups with different cultural values, thereby reducing the social tension among students.

This table is fully reflects the words of Federico Mayer, the general director (1987- 99gg) UNESCO: “Life in diversity is a source of serious problems for the communities in which our children are growing up. In a world where the interchange of cultures takes in magnitude, “living together” values and skills training has become a priority of education”. - 74 - International Conference on Entrepreneurship IEC 2014 Thus, we revealed special instruction how to deal with “after-merging, -acquisition crisis”: 1. The literature review allow to identify key factors that can potentially, positively or negatively, influence cross – cultural adaptation in new business environment. It is important, particularly on the initial stages of the process not to mix organizational and national cultures and better recognize main peculiarities of new united cultures. 2. Language and cultural integration play an important role in the positive relationships (business and social result oriented) of foreigners with communities. 3. Tolerance is one of the key factors to deal with cross –cultural crisis and this skills shouldREFERENCES be formed in university. Drobizheva L.M. Social dimensions of ethnic stability and strength// World of Russia. №2. 2000. P. 68 – 77

Fujita A. Creating new corporate culture through organizational fusion process in overseas operations// Review of Economics and business. 1990. N 18 (2). P. 65 – 88

Hofstede G. Cultures and organizations: software of the Mind. McGrow – Hill, 1991.

Laurent A. The cross –cultural Puzzle of International Human Resources management// Human Resources management. 1986. N 25(1). P. 91-102

Myasojedov S.P. The basis of cross – cultural management: how to deal with the representatives of different countries and cultures: Tutorial. – М.: Delo, 2003. – 256 p.

Shein E.H. Three cultures of management: the key to organizational learning// Sloan Man- agememt Review. 1996. N 38 (1)/ P. 9 – 20

New Philosophical encyclopedia //М.: Misl, 2000. – Т. 1-4. – 2659 p. – ISBN 5-244-00961-3 www.tolerance.ru - “Declaration of Principles of Tolerance” approved by resolution of the General Conference of UNESCO on 16 November 1995 www.sydney.edu.au

International Conference on Entrepreneurship IEC 2014 - 75 - - 76 - International Conference on Entrepreneurship IEC 2014 IMPROVISATION METHOD AS ENTREPRENEURIAL ENGINE FOR STUDENTS Robertas SUNOKAS

[email protected],Kauno Kolegija/University of Applied+370 612 Science 03443 Draugystes g. 3c-13, Kaunas, LT-51281 Lithuania,

ABSTRACT

Entrepreneurship nowadays is one of the primary skill or competence that every human should have in order to tune with civilized society. This is becouse of such called knowledge/information/ability society. Every young person on the other hand is forsed to act in several life roles. Profesion, family and leasure could be three places for these roles. While getting older and older (childhood to adolescence to adult) most of us get lots of provisions, convictions and beliefs. Some of them are usefull but some of them are useless. People are confused of variety of info, activities and life goals. Only small percentage of peole live and act in „just now and here“ situation. Most of us think what was in past and what could be in future.

Many lectors/authors talk about creativity, idea generation and entrepreneurship as most needed competences. Most of academic and non-academic institutions teaches these subjects and disciplines. But it could be risky because of convictions in our society. Every person should know himself better; he should pay attention not for outer side – society, but for inner side – inner voice. Then it will be real creativity and entrepreneurship. And method of Improvisation is very useful for getting people to situation “now and here” and to get everything that is inside of every different person. When person gets these real feeling, thoughts and ideas he can set goal, make plan and achieve objectives with satisfaction, fulfilment and pleasure of the achievement process.

In this article there will be presented: a) improvisation method as entrepreneurial engine for students; b) four basic elements which are needed to be “just here and now”; c) opinion that for getting new ideas, to be creative and entrepreneurial is needed very positive and comfortable environment. Such environment is based on team members which work together and provide feedback, physical conditions of the place and human healthINTRODUCTION condition.

Results of any activity (idea generation and entrepreneurship too) are not only influenced by human skills, but also strong enough by motivation. We can talk about rela- International Conference on Entrepreneurship IEC 2014 - 77 - tionship between mentor and mentee, educator and student, parent and child. Question is – how to motivate or create suitable environment and fulfill students’ needs. Some kind of promotion system should be used, which directs the real needs of students. For this process to be effective, teacher must first know your students know their dominant needs. When student finds a chance to meet their external and internal demands, it becomes substantiated, namely understand why he is doing what they’re doing, and his activity becomes meaningful, interesting, and he wants to do it himself.

In this article „Maslow’s hierarchy of needs“ theory (Maslow, 1943) is used as a basis to know basic needs of students. Viola Spolin, promoted the idea that children will learn with love and motivation, if learning activities be presented as a series of games, developed his royalties theatrical improvisation method (Bebb, 1988). Keith Johnstone, in order to attract more people to the theater, even those who would rather spend their time observing any live sports, joined theater and a team sports items (Johnstone, 1999). He created a hybrid, named the theater sports. Here sports and theater rules were applied in improvisational context (for competition between teams appointed judges points and audience applause).

About the game, meaning of improvisation learning process, wrote famous Lithua- nian educators Buožis Z. , Oleka-Zilinskas A., Ercmonienė R. All of them emphasize that improvisation theater lessons to avoid acting strange manners, and artificial intonations plays (Kievišas & Kievišas 2004). Lead them to be the result of children’s creative and not managers imposed interpretation, direction. Improvisation as a creativity, idea generation and entrepreneurship is very common in England, America, Canada, Scandina- vian countries, where more influenced by the already mentioned Spolin and Johnstone improvisation techniques. They are subject to the country’s secondary schools, universities; some of them even have their students’ improvisation troupe. They are also put in countless training programs pursuing teaching, adopting educational interest and quite unrelated to the theater arts, but educational research analyzing the methods on students’ learning motivation theater could not be found. Therefore, my work pose a scientific problem: adapting improvisation for students creativity, idea generation and entrepreneurship also stimulating motivation for creating and fulfilling entrepreneurial ideas.

Improvisation methods are widely explored in such sciences as sociodrama, psychodrama and sociometry (Petty, 2006). A sociodrama is a dramatic play in which several individuals act out assigned roles for the purpose of studying and remedying problems in group or collective relationships. Psychodrama is an action method, often used as a psychotherapy, in which clients use spontaneous dramatization, role playing and dramatic self-presentation to investigate and gain insight into their lives. Developed by Ja- - 78 - International Conference on Entrepreneurship IEC 2014 cob L. Moreno, M.D. (1889–1974) psychodrama includes elements of theater, often conducted on a stage where props can be used. By closely recreating real-life situations, and acting them out in the present, clients have the opportunity to evaluate their behavior and more deeply understand a particular situation in their lives. Sociometry is a quanti- tativeBasic method needs for to measuring be Creative social and relationships. Fulfill Entrepreneurial Ideas

Abraham Maslow proposed this theory in his 1943 paper “A Theory of Human Mo- tivation”. He subsequently extended the idea to include his observations of humans’ innate curiosity. His theories parallel many other theories of human developmental psychology, some of which focus on describing the stages of growth in humans. Maslow used the terms Physiological, Safety, Belongingness and Love, Esteem, Self-Actualization and Self-Transcendence needs to describe the pattern that human motivations generally move through (Wahba & Bridwell, 1976).

Hierarchy of Needs theory remains valid today for understanding human motivation, management training, and personal development. Indeed, Maslow’s ideas surrounding the Hierarchy of Needs concerning the responsibility of employers to provide a workplace environment that encourages and enables employees to fulfil their own unique potential (self-actualization) are today more relevant than ever.

Figure 1 :

“Maslow’s hierarchy of needs” (Cronburg, 2010)

International Conference on Entrepreneurship IEC 2014 - 79 - • Biological and Physiological needs - air, food, drink, shelter, warmth, sex, sleep, etc. • Safety needs - protection from elements, security, order, law, limits, stability, etc. • Belongingness and Love needs - work group, family, affection, relationships, etc. • Esteem needs - self-esteem, achievement, mastery, independence, status, domi- nance, prestige, managerial responsibility, etc. • Self-Actualization needs - realizing personal potential, self-fulfillment, seeking personal growth and peak experiences.

The Maslow’s Hierarchy of Needs five-stage model above (structure and terminology - not the precise pyramid diagram itself) is clearly and directly attributable to Maslow; later versions of the theory with added motivational stages are not so clearly attributable to Maslow. These extended models have instead been inferred by others from Maslow’s work. Specifically Maslow refers to the needs Cognitive, Aesthetic and Transcendence (subsequently shown as distinct needs levels in some interpretations of his theory) as additional aspects of motivation, but not as distinct levels in the Hierarchy of Needs.

Each of us is motivated by needs. Our most basic needs are inborn, having evolved over tens of thousands of years. Abraham Maslow’s Hierarchy of Needs helps to explain how these needs motivate us all. And with motivation we can do all the activities in our livesFactors and to influencingbe creative and Entrepreneurial fulfill entrepreneurial motivation ideas.

The most difficult task for teacher - inspire students to learn. If students do not want to learn, they do almost nothing and will not learn, and if you know how to motivate students, it can significantly elevate their level of learning. It provides seven reasons to promote the desire to learn and the way these motivational factors increase (Butkev- ičienė,1. Students 2002), (Argyle, want to 1994): learn, because it is useful.

Many teachers teach things that are of direct benefit to the student sees. Of course if he taught astronomy, which is eager to try the new telescope. Motivation will not be a problem. So, in order to promote learning motivation, the teacher should relate to the interests2. The of subject the learners’ that I ameducation. learning will be useful in the future.

Some students want to prepare for a career or further studies. It is their long-term goal, but his everyday learning motivation is not enough - even a small number of students who knows, what will be grown. Extremely difficult to arouse learners’ motivation to not see the point in learning things that are leaving education still does not bring them any benefits. Without a long-term goal, students lose interest in learning. The teacher - 80 - International Conference on Entrepreneurship IEC 2014 must be able to emphasize their subject relevance, indicate short-term and long-term goals, such as when learning the art of acting, students need to understand the long- term goal, such as to gain oratorical skills, they will be useful in other specialties, and so on.3.Understanding Teachers need to “sell” that Ihis am or learning her knowledge. good raises self-esteem/self-confidence.

This is the main motivation for many students. Each of our self-esteem is based on good learning results, because they suggest that something can. So sometimes students compete with each other and are interested in not only his colleagues but also the results. These competition engine - much of the fun beat. You do not want to engage in those activities that are lost. While receiving a task student gets the goal, as in the following cycle: Goal → Success → Encouragement → → New goal. And the faster moving this cycle, the greater the motivation. Once you succeed, you get immediate encouragement. It is4. the If youstrongest learn motivation.well, you will please the teacher and/or classmates. to haveIt is alsochump related role. to self-esteem. Even if the student does not like to learn, he is trying to keep up with classmates to be their teacher and family recognized. Few will be happy 5. Fear of - if you do not learn, you immediately get into trouble.

In this case study makes fear. For example, a teacher or a parent fears. If dovetail, or not,6. the Students teacher interested told you get in into what trouble they fromlearn a and teacher it meets or parent. their expectations.

In this case study encourages curiosity satisfied in different areas, and even generates interest in the world of learning. Like many people, students interesting fact is directly related to their routines or hobbies. So it is important content of the lesson closer to the students’7. It is lives. fun to learn.

Encourages learning teacher suggested learning activities where he teaches an innovative, cheerfully, with the remark, or encourages self-expression and creativity of students.

Regardless of the subject matter taught to better learning outcomes, teachers must be able to motivate the student. He has to create a system of incentives facing the real needs of students. To this process to be effective, a teacher must first know your students know their dominant needs. A. Maslow these needs as defined by addiction, respect and self-expression needs. When a student finds the school the opportunity to meet their International Conference on Entrepreneurship IEC 2014 - 81 - needs,Improvisation it becomes justified. Method as Entrepreneurial Engine

Students’ learning motivation is influenced by their needs, interests, aptitudes, provisions, and values as a whole. According to the scientific literature on the pedagogical students’ motivation, we can assume that many students fail to see the direct benefit of the educational process (Hickey, 2012). And as of the same literature we know, it is extremely difficult to arouse learners’ motivation to see the point in learning things that are not bringing any benefits.

The scientific literature suggests that learning motivation will encourage promoted only when the learning process will meet the needs of students. This means we have to find ways to link the learner’s interests and needs of the improvisational learning process. Ensure that the entrepreneurial education will meet the needs of students. A. Maslow distinguishes these needs, which satisfaction ensures learning motivation. These needs: reliance, respect, self-expression and cognitive or other interest. In his work A. Maslow suggested a functional security, i.e. activities such as games, entertainment, relaxation, stress and fold respite from urging the need, the need for enjoyment in life (Kenrick, Griskevicius, Neuberg & Schaller 2010). This activity gives positive emotions, i.e., jolly good mood, joy, and so on. A. Maslow defines this area as the human need for itself. So, to already listed needs we can add the following requirements: functional security and fun, games, entertainment, recreation needs, as one of the factors affecting the learning motivation.

In the beginning of improvisational education V. Spolin theater games and K. John- stone improvisation techniques were used to promote motivation. Precisely because of its potential to meet all the games, entertainment and relaxation needs. Later, having studied them in detail has been developed and the other above-mentioned needs, such as belonging, respect, freedom and opportunities to meet interest, as shown in Figure 2.

Figure 2:

“Improvisation methods fulfill basic needs” - 82 - International Conference on Entrepreneurship IEC 2014 Thus, according to V. Spolin and K. Johnstone improvisation techniques principles, there was the beginning of improvisation lessons. It involves promoting higher education theatrical grade students’ motivation, satisfaction of students belonging, respect, freedom, fun and functional interest needs. For the purposes of improvisation has been aban- doned, and the key K. Johnstone and V. Spolin methods purposes, such as spontaneous creativity, improvisational skills, fostering students’ imagination, creative self-expression of a student to promote and cherish, as shown in Figure 3. This is what has helped to meet other needs of the students mentioned above in an effort to foster educational theater motivation (Pressing, 1987). And improvisation environment makes students feel free to express creativity, idea generation and entrepreneurship. Students develop these most needed competences. This is why I call Improvisation Method as Entrepre- neurial Engine for Students.

Figure 3 :

Four Basic “Improvisation Elements method – Entrepreneurial engine”

As for every person needs to have competences, and entrepreneurship is one of the primary one, there is question how to develop this. Improvisation method is very good solution, but people should use it properly. Most of us have lots of provisions, convictions and beliefs (Holt, 1964). We have to relax and take it easy to improvise. Only small percentage of peole live and act in „just now and here“ situation. Most of us think what International Conference on Entrepreneurship IEC 2014 - 83 - was in past and what could be in future. Solution for getting most of improvisation method is - four basic elements which are needed to be “just here and now”. Actors and public speakers learn these four elements as a basis of their profession. Person should not only know these elemens but become aware of then and even feeland live like that: • People fail and learn; • Admit our fault; • Use Humor; • Stay in mood. This is a cycle (Figure 4)and in most life situations you can use these four basic elements. And for using improvisation methods this is necessity. To fail and learn from our fault is in geenes of every human. When you fail in public and others see this, don‘t be shy and admit your fault. And you can use this situation in advantage. Use humor and emotions.adopt every thing that happens just now and here and of course stay in same mood as you was before or even become better mood becouse of the humor and other people

Figure 4 :

Positive And “Four Comfortable basic elements Environment ”

When we talk about creativity, idea generation and entrepreneurship we always should hold in mind positive and comfortable environment. Most of academic and non-academic institutions teaches these subjects and disciplines, but it is sometimes hard for students to learn if there is no positive and comfortable environment. Every person can know himself betterand to develop creativity and entrepreneurship. Impro- - 84 - International Conference on Entrepreneurship IEC 2014 visation method is very useful to get everything that is inside of every different person. Such why very positive and comfortable environment is needed for „entrepreneurial engine“.

Environment is based on team members which work together and provide feedback, physical conditions of the place and human health condition. Here is presented only aspect of delivering feedback.

Positive Feedback has very big impact on feeling good, be ralaxed and fo learn in good mood (Sawyer, 1995). When improvisation methods are used we always use positive feedback delivering rules. Main rules are: a) begin with positive things that you lieked in presenters/improvisers actions b) say what can be improved (your opinion and exam- plesCONCLUSIONS how would you do) c) finalize with motivating frase about what presenter do best.

To be creative and fulfill entrepreneurial ideas is improtamt almost for everybody. For this basic needs should be satisfied. A. Maslow hierarchy of needs is used to describe all these needs.

There are seven factors that influence entrepreneurial motivation. They should be assessed to make students learn with passion.

Improvisation method as entrepreneurial engine for students was presented in this article. It fullfils all basic needs of students and helps to create positive environment to himself.learn and geerate ideas. Four basic elements are needed to be conserned while using improvisation methods. In such way person can be “just here and now” and express

Positive and comfortable environment is needed for getting new ideas, to be creative and entrepreneurial. How positive feedback helps peaple to learn and improve was researched with 60 student. 95% of students expressed positive opinion about better learningREFERENCES process. Argyle, M. (1994). The psychology of Interpersonal Behaviour. Harmondsworth: Penguin.

Bebb, B. (1988). Improv – where did you come from. [electronic version] www.Spolin.com.

Butkevičienė E. (2002). Mokymosi suaugusiųjų mokymo centruose veiksniai ir motyvai. Pedagogika 59, VPU leidybos centras, Vilnius, p. 156 – 162.

International Conference on Entrepreneurship IEC 2014 - 85 - Cronburg, T. (2010). Maslow 2.0 human hierarchy of needs. Image.

Hickey M. (2012) Can improvisation be ‘taught’?: A call for free improvisation in our schools. [electronic version] Arts and Humanities Citation Index.

Holt, J. (1964). How Children Fail. London: Penguin.

Johnstone, K. (1999). Impro for storytellers - Faber and Faber, London.

Kenrick, D. T., Griskevicius, V., Neuberg, S. L., & Schaller, M. (2010). Renovating the pyramid of needs: Contemporary extensions built upon ancient foundations. Perspectives on Psycho- logical Science, 5, 292.

Kievišas J. & Kievišas A.(2004). Meninis ugdymas kaip asmens dvasingumo veiksnys. Peda- gogika 59, VPU leidybos centras, Vilnius, p. 50 – 55.

Maslow, A.H. (1943). A theory of human motivation. Psychological Review, 50(4), 370–96.

Petty G. (2006). Šiuolaikinis mokymas. Tyto Alba, Vilnius.

Pressing J. (1987). Improvisation: methods and models. [electronic version] Oxford university press.

Sawyer, R. K. (1995). Improvised Dialogues: Emergence and Creativity in Conversation. Publications in Creativity Research.

Wahba, M. A., & Bridwell, L. G. (1976). Maslow reconsidered: A review of research on the need hierarchy theory. Organizational Behavior and Human Performance, 15(2), 212–240.

- 86 - International Conference on Entrepreneurship IEC 2014 UNIVERSITY STUDENTS AND THEIR SENSE OF ENTREPRENEURSHIP (Case study in Ecole Nationale Polytechnique d’Oran) Mahmoudi ELHOUARI

Teacher of psychologie du travail et des organisations EcoleEmail National : [email protected] Polytechnique d’Oran (Algerie) Département de Management

Without doubt that entrepreneurs are a special breed, they are passionate about their ideas and their business goals, they are also willing to work hard over extended periods of time, so that their dreams come true. Over time a big number of studies have been done on entrepreneurial minds. It’s an important subjects for academics and researches. Entrepreneurial spirit is a vital ingredients in the achievements of anyone who succeeds beyond his or her original means. The person who starts a small business has something in common with the seller who suggests a better procedure for appealing to customers. The engineer who develops a new technique for improving quality control in a manufacturing system, the doctor or lawyer who opens his or her practice, they all show to a greater or lesser degree the entrepreneurial spirit that drives them to create new processes, new products, new ventures from the challenges and opportunity they see and experience. Many people would ask where do new organizations, new products, new markets come from ?

The answer is entrepreneurship, then what are the characteristics to distinguish between people who have the spirit of entrepreneurship from those who do not? in other words what inspire people to be entrepreneurs ?

From this short introduction, we could take part, so that answering to the questions relatedThe tomain this studyhypothesis in some hypotheses. entrepreneurship. : There are individual differences between the students of ENPO about their tendency to be entrepreneurs or about their vision to the spirit of Hypothesis 2:

There is difference between the three specialisations (management, genieHypothesis mechanic 3:and genie civil) in spirit of entrepreneurship.

There is difference between male and female of students about their International Conference on Entrepreneurship IEC 2014 - 87 - vision to the spirit of entrepreneurship. naire to the sample which consisted of 80 students - In order to prove all these hypotheses a survey was conducted by giving a question- The statistical instrument in ENPO after measuring validity and reliability. - used in this study is central tendency (descriptive statistic),Definition analysis of of Entrepreneurship variances (ANOVA) :and T.test (deductive statistic)

The concept of entrepreneurship has a wide range of meaning, the word entrepreneur originates from the French word (entreprendre), which means to undertake. In a business context it means to start a business.

Entrepreneurship as Hisrish and Peters have define it “ is the process of creating something new of value by devoting the necessary time and effort, assuming the accom- panying financial, psychic and social risks and receiving the resulting reward of monetary and personal satisfaction and independence” (Davidson 2002 : 13).

Sharma (1990) said that entrepreneurship is the tendency of a person to organise the business of his own and run it profitably, using all the qualities of leadership, decision making. (Davidson 2002:14)

According to Cole “ Entrepreneurship is purposeful activity of an individual or group of associated individuals, undertaken to initiate, maintain or aggrandize profit by production or distribution of economic goods or services”. (Gartner 1985:696-706)

Most economic, psychological and sociological research points to the fact that entrepreneurship is a process and not a statistic phenomenon. Entrepreneurship is more thanOperational just a mechanical Definition factor. of Entrepreneurship:

Successfully synthesises the functional roles of entrepreneurs is that of Wennekers and Thurik (1990): “the manifest ability and willingness of individuals, on their own, in teams within and outside existing organizations, to perceive and create new economic opportunities (new products, new production methods, new organisational and new product-market combinations) and to introduce their ideas in the market, in the face of uncertainty and other obstacles, by making decisions on location form and the use of resourcesThe Spirit and ofinstitutions.” Entrepreneurship (Collins and Definition: Williams 1995:203)

It is what inspires people to leave behind certainly, be it material or immaterial, and - 88 - International Conference on Entrepreneurship IEC 2014 to engageApplied in Study: following a vision through venturing, no matter how intangible or ephem- eral1) it Pilotmay bestudy initially. (Collins and Williams 1995:205) sonalityAfter characteristic.reading some theories ideas about entrepreneurial spirit telling above, we have found that concept is composed by three factors which are: social, educational and per-

Then a survey was conducted by giving a questionnaire to the students of ENPO.

Before experimenting this questionnaire to the sample of principal study, we have taking part for measuring its validity and reliability, then some modifications have been made for its validity, and for its reliability we have used internal consistency method, then the survey was given to twenty five (25) students from research population, the result found was 0,76 in alpha crombach by using statistical package for social sciences (SPSS2) Principalversion 17.0) Study: , then the questionnaire is sure to be used in principal study. A) Questionnaire:

The survey was designed to extract information about respondent’s social factor, educational and personality characteristic. A1)The questionnaireSocial Factor: has thirteen (30) questions and it is composed by three categories:

The respondents were asked about: - their family background. - the financial status of the family. - the encouragement received to pursue an entrepreneurial career. A2)Through Educational the question Factor: number one, two, three, four and five.

- The educational level. - Working experience. - Learning courses. A3)Through Personality the questions Characteristic number six, Factor: seven, eight, ten, eleven, twelve and thirteen.

Creativity, leadership, motivation, optimist, opportunist, curiosity, self confidence, initiative, self efficacy and risk, were measured by the questions from fourteen to thirty.

International Conference on Entrepreneurship IEC 2014 - 89 - The survey is composed also by three (3) ranges of propositions: - Yes (3 points or degrees) - Sometimes (2 points) B)- StudyNo (1point) Context:

B1)This Geographicstudy has geographic, Context: physical and temporal limits.

Represented by Ecole National Polytechnique d’Oran (ENPO) situated in Es-Senia townB2) of Population Oran, Algeria. Context:

The research was effectuated on ninety (80) students of ENPO which is the sample of this study divided in three specializations showing in the following table

Results of any activity (idea generation and entrepreneurship too) are not only in- fluencedCharacteristic by human Of skills, The butSample: also strong enough by motivation. We can talk about rela

Specialization Number Percentage

Management 20 56%

GenieGenie Mechanic Civil 15 25%

19% Sex Number Percentage

Male 56

Female 24 70%

B3) Temporal Context: 30%

C) Results The study and was Discussion: effectuated during the period, from October to february.

- The main hypothesis: there are individual differences between students of ENPO - 90 - International Conference on Entrepreneurship IEC 2014 preneurship. about their tendency to be an entrepreneur or about their vision to the spirit of entre- Table (3): entrepreneurship. Mean Results66.19 of central tendency about the respondents vision to the spirit of

Median 68 Mode 68 theThe vision results to the shows spirit that of entrepreneurship. the mean, the median and the mode are proximate (66.19, 68, 68), so we can say that there are individual differences between the students concerning

Also we can measure the degree of spirit about entrepreneurship by: The average of the three degree (mean, median and mode) equals to 67.39= 66.19+68+68/3.

As we know that 30 is the lowest value: how many expressions in the questionnaire x the degree of proposition “no” (30 expressions x degree1).

60 is the average value: the number of the expressions x the degree of the proposition “sometimes” (30 expressions x degree2).

90 is the highest value: the number of the expressions x the degree of the proposition “yes” (30 x degree3). entrepreneurship. Since 67.39 > 60 (the average value) so the members of the sample have a spirit of

Through this result, we can say that the students of ENPO have the spirit of entrepreneurship which pushes them to be able to create their enterprises; and choosing to be student in ENPO shows us that these students have vision to become owner of their enterprises which are the clear target of their futures (I have deducted that by discussion with these students).

Also, in order to grow their spirit, these students participate to many formations which are organised by ENPO under conventions with other schools and establishments in the world and specially France (with FIE and CATI). Then these students are always helped and framed by teachers who have experiences in this domain.

International Conference on Entrepreneurship IEC 2014 - 91 - Hypothesis 2 :

There is difference between the three specializations (management, genieThe mechanic table (4): and genie civil) in spirit of entrepreneurship. trepreneurship. Results of analysis of variances (ANOVA) about differences between the three specializations (management, genie mechanic and genie civil) in spirit of en- Source of Sum of Degrees of Mean F variation squares freedom square

655.21 2

Between groups 77 327.60 4.81

WithinTotal groups 5239.53 79 68.04

5894.75 Specialization Mean Standard deviation

GenieManagement mechanic 68.33 8.89

Genie civil 65.1060.86 6.53

7.81

The results shows that there is difference between the three groups (management, genie mechanic and genie civil) because the result of (F) is 4.81 at the significance 0.05, and the group of management is higher than the two others because its mean is 68.33 with standard deviation 8.89, before genie civil which its mean is 65.10 with standard deviation 7.81, and the last one is genie mechanic with 60.86 of mean and 6.53 of standard deviation. Then we can say that this hypothesis is proved.

To explain this result, we could say that we must find differences between these groups, because of the characteristics of the specialities. So the speciality of management is favourite because they have modules related to entrepreneurship like theory of organisations, computability, methodology, psychopathology of organisation etc.....

The two other specialities (genie mechanic and genie civil) are more technical, which point to modules of their owner specialities.

- 92 - International Conference on Entrepreneurship IEC 2014 Hypothesis 3: vision to the spirit of entrepreneurship. There is difference between male and female of students about their The table (5):

Results of T test about difference between male and female of students in spirit of entrepreneurship. Sex Mean Standard T.test significance deviation

Male 8.52 3.89 0.01

Female 68.39 6.39

60.83

Observing the results in the table we can say that the hypothesis is proved, because the T.test shows that there is difference between the two groups (male and female) of students, and it’s result is 3.89 at 0.01 of significance, also the group of male with 68.39 of mean and 8.52 of standard deviation is higher than female who have 60.83 of mean and 6.39 of standard deviation in spirit of entrepreneurship.

The explanation telling to this result is, that the students ( male) are prepared and motivated to be entrepreneurs related to Algerian culture which favourites males to be owner and leader of any enterprise, although the capacities of females who are considered inferior in Algerian society and if the women take place of chief, she is looked like particular case and against the principles of religion in the minds of the people.

Then, because of these comportments, women don’t like to take part to be entrepreneurs and feel always inferior of men, but we could observe that the students female is goingBIBLIOGRAPHY to enter slowly in the domains of men. • Buzenitz, L and Barney, J. “ Differences between entrepreneurs and managers in large organizations”, journal of Business Venturing, vol 12, 1997. • Collins, James C, and William C. Lazier. “Beyond Entrepreneurship, Turning your Business into Enduring Great Company”. Prentice Hall, 1995. • Davidson, H. “Researching entrepreneurship”, Babson college, London 2002. • Gartner, W. “Framework for describing the phenomena of new venture creation”, Acade- my of management review, vol 10, n° 4, New York, 1985. • Patric, L. “L’entrepreneur”, Dunode, edi 6D, Belgique, 2003.

International Conference on Entrepreneurship IEC 2014 - 93 - - 94 - International Conference on Entrepreneurship IEC 2014 ACEHNESE STUDENT ENTREPRENEURS: PROBLEMS AND DETERMINANT FACTORS OF SUCCESS Amru USMAN

[email protected] University of Malikussaleh, Lhokseumawe – Aceh, Indonesia Naufal BACHRI

[email protected] University of Malikussaleh, Lhokseumawe – Aceh, Indonesia Iskandarsyah MADJID

[email protected] University of Syiah Kuala, Banda Aceh, Indonesia

ABSTRACT

Previous research found that a significant group of entrepreneurs in the economy is a fresh university graduates who are able to access education around the world. The fresh graduates not only face a wide selection of career-related decisions in government or private, but they also need to raise awareness of entrepreneurship and self-employment as an alternative to career. The main objective of this study was to identify factors that encourage students to be entrepreneurs, to investigate the constraints that faced the students to be entrepreneurs and the factors that contribute to the success of students’ entrepreneurs in Aceh, Indonesia. This research is a qualitative study using a grounded theory approach in order to determine the factors that influence the success of entrepreneurs among students.

In this study, the samples are the students who have been in business minimum of 3 years. Students who are selected are those who study in Syiah Kuala University and Uni- versity of Malikussaleh in Aceh, with consideration aspects is easy to be found, owner of the business and the known of a business carried on. Amount 15 students have successfully met and interviewed to answer the issues raised in this study.

The results of this study indicate that almost all respondents doing business differently at the moment with the type of business done at the first time once they start the business. The internal factors motivated the students being an entrepreneurs were to help their parents, family’s financial situation does not allow for the students to go to college to be a trigger factor for them to raise funds that can be used in order to go to college. The internal aspect of the students who did not want to work as an employee is also a major factor that motivates them to be entrepreneurs. While the external factors International Conference on Entrepreneurship IEC 2014 - 95 - motivated the student being an entrepreneur because of their friends who are already successful in business. The results show that the internal factor is more motivated student to be an entrepreneur than the external factors. The results of this study also found hard work, discipline and motivation to be the major factor of the success of a business carriedKey words:on by the students in Aceh province, Indonesia. ternal environment factors, internal environment factors. Student entrepreneurs, business success, entrepreneurial intention, ex- INTRODUCTION

At the time of economic downturn, concerns over employment or unemployment became a hot topic for discussion, especially in Indonesia, one of the countries that have the largest population in the world. Unemployment not only occur in an environment of low education, unemployment and even educated also become a major problem in Indo- nesia. Average universities in Indonesia, both domestic and private universities provide more than 100 thousand graduates per year. However, among these graduates, unemployment that occurred increased from 183.629 in 2006 to 409.890 in 2007. This is a big problem up to now.

Entrepreneurship is a breakthrough to overcome the educated unemployed. In the beginning of 2009, the supports of student activities provide entrepreneurship education to students who have the motivation to be entrepreneurship. The entrepreneurship education program in the list of contents of budgetary respective colleges, approximately 70% of the funds received by each college used to support students in conducting business (Kompas, 2011). Group of entrepreneurs who are economically significant is young university graduates who are able to access education around the world (Kovere- id & Isaksen, 2006; Prophet, Holden & Walmsley, 2006). These young graduates not only face a wide selection of career-related decisions in government or private, but they also need to raise awareness of entrepreneurship and self-employment as an alternative to a career (Morris, 2006; OECD, 2002; Wennekers, Sets & Thurik, 2005).

University graduates are qualified and if they are employed, they can turn their talents to have better results. University graduate/undergraduate in more developed countries consider to be an independent entrepreneur than work in public or private companies (Matlay, 2005; Prophet et al., 2006). In Indonesia, educated unemployment rate is quite high. Central Bureau of Statistics (BPS) said the number of scholars (undergraduate) in February 2007 amount 409,900 people. In February 2008, the number of educated unemployed increased 216,300 people or approximately 626,200 people. Whereas in 2008 there were high school graduates accounted for the greatest number approximately 3,369,959 million as unemployment followed 2,179 elementary school. 792 million - 96 - International Conference on Entrepreneurship IEC 2014 people, Senior high school 2,166,619 million, diploma / college life as much as 519 867. Similarly, the data in February 2009 there was an increase in unemployment, there were 9,258,964 million of the total workforce around 113,744,408 million, of the total 9,39 million people unemployed, there villages are mostly background when viewed from the bottom as much as elementary education 2,508,253 million, 2,094,378 million people as many junior high, high school as much as 2,341,592 million people, while the diploma to graduate as many as 891 638 people. In 2007 to 2010, there are more than 1 million unemployed educated, (Media Indonesia, March 22, 2010).

Student Entrepreneurs is become interesting for investigation in the research. The literature suggests that better access to education has created unemployment graduates every year, It has been create economic pressures to provide adequate employment (Matlay, 2005; Prophet et al., 2006). In a global market that fluctuates primarily due to the downsizing and restructuring of multinational corporations and strategy, causing many organizations or companies reduce employment. The result is high unemployment among university graduates (Matlay, 2005; Morris, 2006; Prophet et al., 2006; Wennekers et al, 2005).

In Malaysia, for example, nearly 99.2 percent, or 546 218 companies either small or medium that employs more than half (56.4%) of the workforce (SMIDEC, 2006). While public policy seen in the sector of small and medium enterprises (SMEs) as a viable source to provide new job opportunities for graduates of higher education (Nkongo- lo-Bakenda, Anderson & Ito, 2004), constraints often faced is that the majority of SMEs are micro enterprises may not be able to accommodate university graduates to work so it does not become an attractive career option for graduates (Morris, 2006; Prophet et al., 2006). Therefore, this study was conducted to identify factors that will make the students in turn choose to become entrepreneurs and what are a factor contribute for theLiterature success of theReview student entrepreneurs in the Aceh province. Entrepreneurship

Entrepreneurship is a strong emphasis in purposeful activity (Tarmudji, 1996). Ac- cording to Zimmerer and Scarborough (2002) entrepreneurship is a person who creates a new business with risk and uncertainty for achieve profit and growth by identifying opportunities further and gather existing resources. According Suryana (2000) entrepreneurship is essentially the nature, characteristics and nature of a person who has the will to realize innovative ideas into real world creatively. On the other hand, and subsides Hisrich (2002) entrepreneurship is defined as a process of creating something new with value offerings effort and time as well as the need to make a profit and be able to face the risk. While Meredith et al (2002) entrepreneurs are the ones who have the International Conference on Entrepreneurship IEC 2014 - 97 - ability to see and assess business opportunities, gather the resources needed to take advantageCharacteristics thereof and of Entrepreneurship take appropriate action to ensure success.

Scarborough and Zimmerer (1993) found eight entrepreneurial characteristics, which include: desire for responsibility, namely to have a sense of responsibility over those businesses to do. Someone who has a sense of responsibility will always introspec- tive. Preference for moderate risk, which prefers a moderate risk, meaning he always avoids the risk, either low or high. Confidence in their ability to success, that is confident in him to be success. Most of the entrepreneur desire for immediate result, which always requires immediate feedback, they have high level of energy, that passion and hard work to fulfill his desire for the sake of a better future. Entrepreneurs have future orientation, which is oriented to the future, perspective, and far-sighted, skill at organizing, which have skills in organizing resources to create value added, value of achievement of money, which is more respectful of the money feat. Explicitly, Stainhoff and Burgess (1993 ) suggested some of the characteristics necessary to be a successful entrepreneur , namely : Having a vision and a clear business purpose, willing to take a risk all the time and money, plan, organize, hard work in accordance with their importance, develop relationships withMotivation customers, to suppliers, be Entrepreneurs employees, and others, responsible for success and failure .

All human actions arise because of the encouragement of the (internal factors, push factors) and external stimuli (external factors, pull factors), but nothing happens if not interested. In general, interest is a tendency toward something (Noeng Muhadjir, 1992). Interest based on the opinion of some of the above is the feeling of pleasure or inclination to be someone who directs the individual to a particular choice to participate on activities that became the favorite object. Interests influence the process and outcomes of learning someone because if people learn something with interest, it can be expected the better results. In addition interest is “feeling interested or related to a case or activity without telling” (Tarmudji, 1991). Interest a person can be expressed by a statement showing an interest in an object over another. It can also be manifested through participation in an activity someone is interested in something specific objects tend to pay greater attention. Intention entrepreneurship (entrepreneurial intention) can be seen as an interest to create a new organization or as a risk taking behavior to start a new business (Katz & Gartner, 1988). Intention (intention) can be seen as the cause of an action and the higher is the implementing measures, the higher is the possibility of involving the action / actions ( Chandrashekaran , et . Al, 2000). Based on the description above, it is understood that the awareness of a person who is interested and happy in an effort to appear in activities to learn, understand, and dabbling in the business. Ac- tivity or activity that is based on interests are likely to be success, because it is doing by - 98 - International Conference on Entrepreneurship IEC 2014 joyful and without coercion. Such activities performed to achieve a certain goal which is to meet their needs. Someone who is interested in entrepreneurship will feel happy or likes to do a variety of actions related to entrepreneurship. Interest is personal, so individual interests among different from one another. Even an interest in a person can tobe bedifferent entrepreneurship. every time, because interest is its soul willingness to accept something from outside the individual, interest in to fulfill basic rules, including the interest of students Factors Affecting to be Entrepreneurs.

The experts suggested that a person has an interest in entrepreneurship because of certain motifs, ie motifs achievement (achievement motive). According Suhanda (in Suryana, 2003) achievement motive is a social value that emphasizes the desire to achieve the best in order to achieve personal satisfaction. Wirasasmita (1994) suggests several reasons why someone entrepreneurship, namely: 1). Financial reasons, namely to make a living, to be rich, to get for additional revenue, as a guarantee of financial stability. 2). Social reasons, namely to gain prestige / status, to be recognized and honored, to be an example for older people in the village, in order to meet with many people. 3). The reason of this service and to give employment to the people, to upgrade the community, to help the economy, for the sake of the future of children and families, to obtain loyalty husband / wife, to his parents happy. 4). Reasons for self-fulfillment, namely to become boss / self, to achieve something desirable, to avoid dependency on others, to become more productive, and to use the abilities themselves.

Begley and David (1980) identified five dimensions into psychological factors that affect entrepreneurship, namely: 1). The need for achievement: Here entrepreneurs have a need for achievement (need for achievement) is very high; 2). Location of control: which individuals control their own lives, not luck or fate; 3). Tolerance for risk: entrepreneurs who are willing to take the risk of obtaining greater results than those who do not want to take the risk; 4). Tolerance to doubt. Here there is no doubt in taking a stand; 5). Type a behavior: an ambitious, energetic. Meanwhile, Ramayah and Aaron (2005) suggests the factors that influence interest in entrepreneurship are: 1). Demographics and individual background factors ( individual and demographic background); 2). Factor Per- sonality Traits (personality traits) that consists of: a). Need for achievement (need for achievement); b). Locus of control (control points); c). Self-efficacy (self-confidence); 3). Factors contextual elements (including elements / dependent) consisting of: a). Instru- mentalResearch readiness Methods (preparedness); b).Subjective norms (the norms of relations).

The approach used for this study, both to answer the research questions, data collection, analysis and interpretation of the results is by using qualitative methods. Morse International Conference on Entrepreneurship IEC 2014 - 99 - and Richards (2002) identified three main methods of qualitative research; phenome- nology, ethnography and grounded theory. This study uses grounded theory as suggested by Merriam and Simpson (2000) stated that grounded theory is suitable to examine the phenomenon in which information about the little-known phenomenon. In addition, as shown by Strauss and Corbin (1994), grounded theory is also capable of generating newData ideas Collection and interesting of a subject that is investigated in depth.

The focus of data collection in this study was students enrolled in public universities in the provinces of Aceh, Indonesia and has been run their businesses at least 3 years. In qualitative research, researchers carefully select a sample of participants whose num- involveber between a relatively 5 and small25 (Creswell, number of1998; participants, Creswell, 10 2003; may Leedybe appropriate & Ormrod, for 2005) a relatively to be interviewed. Rudestam and Newton (2001) stated that “ a phenomenological study will long time, at least 2 hours “. In this study, 15 students enrolled in public universities in Aceh who have run their businesses selected as sample of the study. In the qualitative research, there are little bit used of random sampling. Instead, the emphasis of research purpose, or theoretical sampling, in which researchers look for informants who can provide the important data and the most complete on the subject in question (Patton, 2002; Siedman, 1991). Because the focus is on gathering detailed information on the depth, the number of respondents will be taken in small quantities. The main criteria for assessing the size of data is saturation of information. When researchers began to hear the same answer explained by respondents repeatedly, it is clear that the category saturated al- readyResults met (Glaser and Discussion and Strauss, 1967), and thus the data collection is complete. Characteristics of Respondents

In this study, a sample of the study was the students who are still enrolled in public universities in Aceh province, both from Syiah Kuala University, Banda Aceh as well as students from the University of Malikussaleh, Lhokseumawe, which the criteria have been doing business with at least 3 three years. A total of 15 students successfully met and interviewed, with the name and the type of business carried on is as follows :

- 100 - International Conference on Entrepreneurship IEC 2014 Table 1. Characteristics of respondents

No. Name Type of Business Universities

1. University of Syiah Kuala

2. Nazaruddin (M) Nazar Cell/Cling University of Syiah Kuala

Rico Syahputra (M) GloryDistro Tour Campus University of Syiah Kuala

4.3. Ridha Sahputra (M) University of Syiah Kuala

5. Ilham Maulana (M) Juztrue University of Syiah Kuala

6. Arie Budi Setiawan (M) Katring Kampus University of Syiah Kuala

7. Chandra Triadi (M) TokoBanda Buku Hammi University of Syiah Kuala

Dewi Pratiwi (F) Bakso Sahabat University of Syiah Kuala

9.8. Sahabat Berampuh (M) Fotocopy University of Syiah Kuala

10 Dedi Iskandar (M) University of Syiah Kuala

11. Hera Elisa (F) World Craft University of Syiah Kuala

12. Lely (F) BursaUseung Motor University of Syiah Kuala

Rizky Ananda (M) Ternak Ayam University of Syiah Kuala

14.13. Maya (F) University of Malikussaleh

15. Maskur (M) Kentang Goreng University of Malikussaleh

Fajar (M) Lucky Pizza

International Conference on Entrepreneurship IEC 2014 - 101 - From the results of the data collected can be drawn that the average respondent is a student who was studying in Syiah Kuala University, as many as 13 people and 2 others are from the University Malikussaleh. On average, respondents also a male and lectures at the faculty of Economics Unsyiah. For a period of time to start a business, the average respondent had started the business three years ago (in 2009). As said by Rico Syah- putra; “I have started business since 2008 with different types of businesses with what I run now “. Almost all respondents doing business differently at the moment with the typeDISCUSSION of business at the first time once they start to become an entrepreneur. 1 . Motives to be an Entrepreneurs

The results showed that the factors that motivate students to start to be an entrepreneurs is the encouragement within them self to get funding from the work itself to cover their college expenses. Fajar said: “I like to do the business because I want to increase revenue for the college needs”. Ari: “I started a business and going to school because I wanted to help the family finances, so I can handle the cost of the course itself, it was the main driven for me to have own business “.

Rizki, Lecturing student who is majoring in English also revealed the same thing: “I want to help my parents, I don’t want to make them worry of my cost at school, I also want to help my brothers in their school funding”. For students of the Faculty of Econom- ics Rico, the motivation to start business was; “I do not like being told, I am happy to do the work in accordance with the existing interest”. Then he continued: “I had no desire to become a civil servant, therefore start from the first semester I had started the business by selling top up for the cellular phone “. The same thing also expressed by Maya who are students of Technical Chemistry University of Syiah Kuala; “I do not want to depend on someone else, I would like to have my own money to pay for college” ..... I get the scholar- ship that I use as capital to try the chicken start the business, and although I’m a women, I’m not feel shy to become entrepreneurs in farm”, said Maya.

From the description given by the students can be concluded that their dominant motivation to become an entrepreneur is because of the encouragement to try (push factor) than the interest to try (full factor). Students strive to be able to get fund for their studies from the results of his labors without having to depend on funding from parents. The students are not coming from poor families, some of participant’s parents is work civil servants. As statement of Maya; “My father was a civil servant, my mother is a housewife, my father actually able fatherly my fund education, but I was determined not to charge them since I was in first semester “ . Dedi who has a printing business also reveals the same thing, “my parents were both civil servants , but I do not want to stay silent, I have tried myself to earn own income and become self-sufficient “ . As said by Nazar; “I aspire - 102 - International Conference on Entrepreneurship IEC 2014 to college, for that I have to have own income and that will I get from being an entrepreneurs”. Nazar added: “The results of my efforts now, I’ve been able to cover the costs of my education”. The results of this study support the theory by Wirasamita (1994), one of reason of become entrepreneurs is for financial reasons, such as fulfill the needs, to look for 2.additional Determinants revenue, of asSuccess well as a guarantee of financial stability.

According to Rico; “ to be success we have to work hard, do not give up easily” it is also expressed similar by Fajar; “ we were able to success because of hard work, trying to find a new recipe for the pizza , and always be friendly to the customers “. Nazar also said similar things; “do not give up if you want to succeed in business, the obstacles faced not serve as a barrier, if we stop then we will not get what we want.”

Good marketing strategy is also important for students to be successful, as said by Arie; “I offer food to friends and lecturers on campus by way of wooing them to take food from me if there was an event and workshop in my campus”. Marketing aspect is also seen as an opportunity by the student in running his business. This was disclosed by Fajar; “I see that now Pizza popular among the people, but the price of a pizza is sold can be categorized expensive, so it is an avenue for us to offer pizza and affordable by the general public with a taste that varies too “ ... “and we feel that our pizzas have been much-loved by the people”

Status as a student also felt his advantage by student entrepreneurs. According to Lely; “I used bookstore provides books that are widely used by students , since so many of students know which books are the requirements enumerated by the students “ . Hera also felt the same thing; “because I am a student and have a lot of acquaintances, so I made souvenirs can directly promote it to my friends” ...... “I know so many goods that were favored by the students, and it benefits us in designing souvenir we sell “.

From the results it can be concluded that the factor of hard work , never give up and know the market conditions become the main factor for students to be successful in running their business. They hope much from their business; it can be concluded that with high motivation so that businesses can be run continually. Most of the respondents also as students who have not received funding from their university for student entrepreneurs scheme because they failed the test, but according to them, they run a business that is very worthy to be helped .So, they expend their own capital to drive business at first time. The students also start business because they want to pay for tuition fee, want to assist parents in terms of the financial, do not want to be a civil servant, the narrowness of jobs that are available today, and they want to live independently. From the results of this study also suggested that entrepreneurship education can be given to International Conference on Entrepreneurship IEC 2014 - 103 - students in all faculties at all higher education institutions, both public and private. Since the introduction of entrepreneurship will be able to foster interest among students.

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International Conference on Entrepreneurship IEC 2014 - 105 - - 106 - International Conference on Entrepreneurship IEC 2014 REGIONAL DEVELOPMENT CENTERS – A BIG OPPORTUNITY TO DEVELOP THE THIRD MISSION IN ALBANIAN UNIVERSITIES Eva CIPI and Iris CEKANI

University Ismail Qemali of Vlora and Ministry of Justice

ABSTRACT

This work aims to bring a new experience on achieving the main objective on establishing a basic structure for developing several activities of third mission in the higher education institutions. We have called this structure Regional Development Centre according of its goal to become a main actor in the regional development in several areas. Creating this Centre is considered as a great opportunity in the region to support the human and other potential resource requirements of economy, society and community in general. Albanian Universities Regional Development Centers – a Big Opportunity to Develop the Third Mission in

Our research has been focused in three dimensions of third mission of universities including transfer technologies, continuous education and social engagement. For each of them, we have specified a detailed SWOT analysis that helps to organize the plan of activities in order to achieve the final objective.

We have discovered the potential human and physical resources of the university that can be used as a great support on the third mission of a higher education institution. As result, we have developed a business plan consider objectives, methodology, needs of support structures and needs of resources (financial, human and others).

Through the Regional Development Centre of Vlora University study case we bring an example that shows how the university can create bridges between the theoretical knowledge and practical skills as a benefit of collaboration.

This template is formatted according to APA Style guidelines, with one inch top, bottom, left, and right margins; Times New Roman font in 12 point; double-spaced; aligned flush left; and paragraphs indented 5-7 spaces. The page number appears one inch from the right edge on the first line of each page, excluding the Figures page.

International Conference on Entrepreneurship IEC 2014 - 107 - The New Strategy for HEIs

The Strategy for Higher Education(2008-2013) identified strategic initiatives which the Government will pursue. The first is for regional universities to develop themselves as Regional Development Centers with the intention that their teaching, research and development activities would be more oriented to active engagement with their local communities, local companies and other bodies. Each regional university should undertake applied research and Development for local businesses as well as focusing their teaching activities on local needs.

It is expected that regional HEIs should be in the forefront of the development of two year postsecondary programs and be the main providers of their diplomas. The orientation of regional HEIs towards vocational education training will strengthen their contribution to the social and economic development of the respective region. The strategy aims to encourage these HEIs to develop more as “Regional Development Centers”, with strong connections to the local community and special attention to the needs of this community. Undertaking such a role by regional HEIs will strengthen their identity; they will be much more specific and much more recognized than they currently are.

The role of HEIs to help the economic and social development implies that, apart from better focused teaching, they will also offer consultancy, applied scientific research and other services, thus also producing extra revenues for the HEI. The potential customers of these services will be the local communities and businesses, the local and central government bodies, and different donor organizations; all of these, especially the MinistriesWhat About and donors, Third Missionwill be encouraged of HEIs to use services offered by HEIs.

Universities have three missions: Teaching, Research, and what we have called Com- munities Engagement. We have used Communities to stress the various communities involved: not only business, but all communities - eg. artistic, religious, educational, sport- ing, charitable, indigenous, professional associations, local councils, families, etc. The starting point is the assimilation of fundamental research to codified knowledge and thus to information. This economic assimilation is critical since it tells that this good, once produced, is very difficult to appropriate.

The term “third mission” has attracted the attention of many researchers:

One of these opinions considers the third mission as the relationship between higher education and society beyond the first (education) and second (research) missions of universities. (Görason, Maharajh & Schmoch, 2009)

- 108 - International Conference on Entrepreneurship IEC 2014 Another definition of third mission typically considers it as a set of functions that are held to be distinct from the teaching and research roles of higher education. (Vorley & Nelles, 2008).

The third mission encompasses a wide range of activities involving the generation, use, application and exploitation of knowledge and other university capabilities outside academic environments. (Tuunainen, 2005).

In general, the concept of the third mission encapsulates many of the rising demands on the university to take a more visible role in stimulating and guiding the utilization of knowledge for social, cultural and economic development.

In the context of a network of regional developing centers project, the University of Vlora was going to develop a new strategy in order to have new position in social and economic framework of the region. Apart from the two classic missions of universities teaching and research, this project distinguished a third mission, encompassing the university’s relationships with the non-academic outside world: industry, public authori- tiesRegional and society. Development Center in Vlora University

It is a new structure of the university and its main objective is to support the modernization of university bringing a new structure that will implement the triangle knowledge – research- innovation meanwhile taking into account that the higher education system operates efficiently if it is based on different realities and at the same time on the actual traditions of the communities of the region. Some similarities can be found between different programmes in the higher education systems, but our objective is to discover that and to implement study programmes with own features and ambitions in order to be effective for the community.

The University is not only the place of knowledge production, but it has to acquire the definition that the economy and society would be the users of this knowledge. The University in general is therefore seen as playing an essential role in strengthening the economic competitiveness of the Vlora region. It is therefore important to promote the enhanced knowledge transfer continuously in years to the business world and society at large. The third mission activities have received substantial policy and academic attention.(Polt, Rammer, Gassler ,2001)

If the investments in higher education are made in the right and structured way, we can see also a lasting positive effect on the education and on the employability of the population of the region. Researchers continue to disscus the crucial point of formu- International Conference on Entrepreneurship IEC 2014 - 109 - la-based funding which may focus policy on a subset of third mission activities of an university (Hatakenaka, 2005)

Besides the development of human resources, a good education at the university programmes, updating old competencies and acquiring new skills, the results will be clear in an increased interest in investments by local as well as national companies and thus contributesThe Social to theand securing Economic and Situation the development of Vlora ofRegion economy and society.

The County of Vlora is one of the 12 counties of Albania. It consists of the districts theDelvine, Albanian Sarande Riviera. and Vlora and its capital is Vlora. As of January 1, 2010 the population of the Vlore District was estimated to be 211,773. The County forms the integral part of ECONOMY

City of Vlora remains a major seaport and commercial centre, with a significant fishing and industrial sector. Industrial activity in several directions needs new skills in the field of administration, management and finance. Nearly all are involved in such processes, therefore the university brings research programs in these special short courses.

Tourism has become a major industry in recent years, with many hotels, recreational centers, and beautyful beaches. There are no specialized people or centers that would culturalbe able toproperties support theor cultural needs for monuments, organized andevents, completed etc. activity in order to start and to promote a new strategy in tourism sector, including accommodation, transportation,

Services sector is very powerful in the region’s lifestyle. Actually, analyzing deeper the causes of failures, lower level of performance and services in several sector of economy and education, we list some requirements in order to overcome the bad situation, to be concrete and useful and to gain an important role as the intermediate institution that can create, manage, develop and validate human resources. New processes require young specialists who are capable for continuous self-assessment to be able to face the changes of development in the sectors where they work. The rapid development in terms of improvement and modernization are associated with the introduction of new technologies and information processing. To use and to maintain them, this requires permanent expertise. In addition to face the challenges of development, such institutions are looking for personnel in the sectors of management, organization, marketing and promotion with a contemporary vision.

Private services sector such as bars, shops, beauty centers, etc .is developed much - 110 - International Conference on Entrepreneurship IEC 2014 service quality. more than other sectors but it is obvious the necessity of improving the capacity and

The university can fill this gap with short professional programs of great interest for the community. Education is a very important sector, also priority for the entire community. In the pre-university institutions, we emphasize the role of standards on teaching methodsSOCIETY used by teachers and a new philosophy on education.

The population is mainly concentrated in the city. Main characteristic are the hospitality and friendship. People have a creative and artistic spirit. They want to learn and invest a lot in education and science. In addition, sport and arts are two important other areas of interest for the city. The university may organize various events having its theater and sports club to revitalize the city’s life. Organizing competitions for the identification of values in different fields has lost its role in the students’ life. That means the university can bring some changes for students and the community. Actually, there are some important needs: - Employment in sector of economy and industry - Education in schools - Entertainment and other activities - Research and innovation

The university has a visibly strong role in educating the citizens, which can be felt especially among the third year students. We note with satisfaction the change in the formation of a citizen, and look for that this can be passed on to influence other groups whoDeveloping have had previous Third Mission experience in Vlora in our University-Project classrooms. Objectives

The main objective of the project is to develop a new structure called Regional

Development Center in order to support the partnership of the university with other institutions in providing and developing necessary instruments and methodologies to strengthen knowledge transfer by different activities. The center will provide a new organizational concept for the communication and coordination of graduates or non-graduates that want to enter into the labor market. The center will facilitate this process through individual career counselling offers and enhanced partnerships with enterprises. Furthermore, based on these partnerships as institutionalized system, the center will set up and coordinate alumni activities leading to much closer relationships between the university and their alumni. International Conference on Entrepreneurship IEC 2014 - 111 - 1. 2.The project aims to achieve some specific objectives like 3. Ensuring LLL and on the job training for academics and the community at large. 4. Enhancing the employability of university graduates; sity. Fostering transfer and multiplication of academic knowledge to society; Setting up a continuous learning and quality improvement system for the univer-

In order to realize these specific objectives, the necessary structures and capacities are identified and developed through a self-assessment analysis and knowledge transfer in Vlora Region.

According to these results, RDC is established in order to support career services and employability,Project Methodology alumni activities in research and innovation

Analysis of higher education and society cooperation in a self-assessment process means that the university analyses the current situation of links between higher education and local society, while the university collects good practice examples at their home institutions. It is importat that a university develop policies that support and develop the third missison with some precise objectives

Further, the university can tests by policy groups the policy influence to institution- alise own values and objectives (Berg 2004).

Establishment of a Center as an instrument for implementing LLL programmes, career services and alumni activities is one of core activities setting up short programmes and defining their objectives and instruments to achieve them. This is done by activity of planning, financial forecasting, knowledge transfer through participation in meetings organized with groups of interest, and regular reporting about of the results.

Starting pilot projects in small groups of researchers is a good idea to establish LLL programme, career counseling and alumni support. The pilot projects aim to establish and strengthen the collaboration with external partners and create a network with public or non- public institutions, economy and society.

Promotion of project results through several printed and electronic promotion materials, websites, events, open days, networking activities and conferences to ensure raising awareness and optimal acceptance and usage of project products by academic and professional community, by students and the society in general.

- 112 - International Conference on Entrepreneurship IEC 2014 Developing Links With The Local Economy

The higher education plays a significant role in regional economy. We suggest that it is very important to develop projects which will be enhanced by university of Vlora with a big impact for the economy of the region. For strengthening the links between university structures and institutions, we work in these area: 1.Education, Research and Development 2.Development of Applied Study Programmes Education,3.Development Research of a humanand Development. resources database

a.We create a specialized center that can develop:

New Strategies that involves activities of an accurate analysis of the present situa- tionb. and planning of strategies for further action evaluating the capacities of university.

New services and instruments. For each particular need , these mini centers to address and identify the right solutions creating specialized standard of services that guarantee the success of central role of university in economy of region and in the other part the success of these centers for development and research. theirTo contribute reach these on objectives, area of problem. first, it was needed a platform that include laboratories and a network for each group of research where academic or experts can exchange and give •

University Centre of Health. (UCH) We have a Faculty of Nursing. It would be interesting for university and region economy if we have a centre of health that secure a laboratory for research, with modern instruments to provide services for community and involve in the construction process lot of enterprises , small and big companies and of course• the academic staff of university.

University Centre of Information Technology. (UCIT) Actually , we have developed four curricula in Information Technology Sciences. The knowledge about tools, methods and several solutions of information technology is a good benefit for everyone that studies in this field. We have a team that works to solve several problems in education, transport, management and administration which need informatics solutions. This centre takes place in RDC laboratories and can participate academics that contribute in training process of RDC office and attract excellent students, closing the triangle: Education-Re- search- Innovation. The centre involves economy and business, society, education institution of region or individuals because here they find fast and tested solutions software International Conference on Entrepreneurship IEC 2014 - 113 - for automation of processes, etc. applications, maintenance, administration of information systems, small applications Development of Applied Curricula.

The university needs to be update in order to serve better to community and to complete gaps of skills in the labor market. Using RDC Center, we are become a secure partner for the validitation of professional skills and a good human resource which supports the needs ideas, experts and professionalism for business and economy of the region:

RDC center can be closer to the real needs of the community and so can transfer requirements to academic level of study programmes to change or update or make others more attractive and effective. Through several courses for the continuous education, RDC Center can discover, choose and register the potential competencies of individuals creating information bridges to business. We think that the university should be the main institution that plays the most important role in the employment of students that community.are graduated in its auditors. But, how we play this role, or if not, how we can gain this role? This is the problem. We need to put basic standards that convince step by step the Development of a human resources database

The study programmes have been reviewed integrating hours of practical experiences from region business. This enforces the links between students as future employees and managers of business that can know the capacities of university to offer professional experts. Integrating the discussion between academics-students-businessmen , we can help students to find their field of interest and jobs, produce a chain of ideas for new business• reaching the probabilities of employment and success. We propose : in a partnerCreating company discussing business rooms where small projects of students will be started after a selection process for the best which will win the opportunity of implementation •

Creating an online database of offers –requests that will be managed by RDC office for the employment of students graduated or no in our university but their skills have been• evaluated by our structures. tution to solve several problems Creating Consulting Office into RDC Centre that should help individual person, insti-

- 114 - International Conference on Entrepreneurship IEC 2014 •

Creating a Call center online or guideline pages (better) online that help everyone without charge to start a business.

Financial aspects are not discussed in the proposals. Speaking above for a small group of researchers, we have found resources to become a RDC center in an enterprise that produces methods, tools, solutions and innovative ideasCONCLUSIONS for the community.

This work bring a good experience on establishment of third mission acctivities in Vlora university that can be used as a proces guideline for other institutions.

Lifelong education is a process that does not finish. After graduating, the education is focused on developing new competencies with regard to economic growth, competitiveness, social status, etc. LifeLong Learning can establish the communication between academic study programme and professional practice in the field through the continuous education. The reality is that actually this link is weak in many groups of people that work in institutions, organizations or other entities for several reasons. Both University and institutions operate separately and more or less independently from each other. It is very important that we can realize a new process in both directions to exchange opin- ionsREFERENCES for the enhancement and further development of effective learning in RDC. Berg, Kristine. (2004.) Implementing Chicago’s Plan to Transform Public Housing. Paper read at The Changing Face of Metropolitan Chicago. Conference on Chicago Research and Public Policy, 12 May, at Chicago.

Hatakenaka, Sachi. (2005). Development of third stream activity. Lessons from international experience. London: Higher Education Policy Institute.

Polt, W., C. Rammer, H. Gassler, A. Schibany, D. Schartinger.(2001). Benchmarking industry- science relations: the role of framework conditions. Science and Public Policy 28 (4):237- 255.

Tuunainen, J.(2005). Hybrid practices? Contributions to the Debate on the Mutation of Sci- ence and University. Higher Education, 50(2), 269-278.

UNESCO (2008-2013), Medium-Term Strategy, 24-31 Montesinos, P., Carot, J.M., Martínez, J.M. & Mora, F. (2008). Third Mission Ranking for World Class Universities: beyond teaching and research, Higher Education in Europe, 33(2/3), 259-271

International Conference on Entrepreneurship IEC 2014 - 115 - Vorley, T. & Nelles, J. (2008). (Re)Conceptualizing the Academy: Institutional Development of and beyond the Third Mission, Higher Education Management and Policy, 20 (3), 119- 135. www.u3m-al.org

- 116 - International Conference on Entrepreneurship IEC 2014 SOCIAL ENTERPRISES IN A DEVELOPING COUNTRY CONTEXT: ANALYSIS OF SOCIAL ENTREPRENEURSHIP MODELS IN TURKEY Duygu TÜRKER, Yaşar University

[email protected]; Yasar Kampusu, Universite Tel: +90 Caddesi, 232 4115333 Agacli Yol, No.35-37 Bornova / Izmir / Turkey 35100 Gökay ÖZERİM, Yaşar University

Selcuk Yasar Kampusu,[email protected] Universite Caddesi, Agacli Yol, No.35-37 Bornova / Izmir / Turkey 35100 Ayselin YILDIZ, Yaşar University

Selcuk Yasar Kampusu,[email protected] Universite Caddesi, Agacli Yol, No.35-37 Bornova / Izmir / Turkey 35100

ABSTRACT

The concept of social entrepreneurship provides a useful framework to cope with the economic, social, and environmental problems during the last decades. As the adoption of an entrepreneurial approach towards social problems, social entrepreneurship has been increasingly promoted by the intergovernmental organizations as well as the non-governmental organizations (NGOs). Since the concept is particularly important for the future of developing countries that fight against numerous problems with their limited budgets, creating a viable mechanism at the national level are important to support and encourage people to be a social entrepreneur. However, the context of developing countries, including its economic, legal, political, ecological, technological, and socio-cultural challenges provides a limited support for social entrepreneurs. Despite the lack of such structural support, some social enterprises can still survive with developing their own model against these contextual variables. In order to increase both quality and quantity of such enterprises, it might be important to understand the nature and structure of such organizations that builds and follows their own model in the face prospectiveof fierce environmental social entrepreneurs pressures. in TheTurkey. current study tries to address this issue with analyzing five social enterprises in order to provide a useful insight for the existing and Keywords: Ecosystem perspective, social entrepreneurship, social enterprises, Tur key -

International Conference on Entrepreneurship IEC 2014 - 117 - INTRODUCTION

Social entrepreneurship becomes one of the key phenomena during the last decades as an organizational response towards the increasing problems (Dacin et al., 2010). In his study, Swedberg (2006, p.33) finds Schumpeter’s perspective still relevant on the on-going debate of entrepreneurship and social change and defines social entrepreneurs as people who are “dynamic and do what is new” and social entrepreneurship as “a form of dynamic behavior in one of the non-economic areas of society”. Today, the match between supply (with the increasing income level, educated society, communication technology) and demand sides (through increasing environmental and health related crises, economic inequality, pressures of institutionalized civil society through non-governmental organizations (NGOs), and inadequacy of public services) results in a greater interest towards social entrepreneurship in the society (Nicholls, 2006). Since such enterprises can provide both employment opportunities for the disadvantaged people and innovative solutions with low cost advantage in the market, they become particularly important during the period of global or national economic turbulences (OECD, 2013). Following their financially viable and sustainable objectives (Laurence, 2013, p.2207), social entrepreneurs can contribute not only the economic welfare of a society, but also the social cohesion among its members (EC, 2014). However, there are relatively few studies on social entrepreneurship and majority of these studies solely focus on its conceptualization in Turkish literature. Social entrepreneurship should be more closely monitored and analyzed from the scholars to understand why and how they succeed or not to improve and encourage new social entrepreneurs.

The purpose of current study is to explore the nature and structure of social entrepreneurship in the Turkish business context. In the study, a list of social entrepreneurs in Turkey was identified through a web search and then the selected cases were analyzed to reveal their model. In doing so, the study try to provide how such organizations can develop their model against the challenges of executing a social entrepreneurship in a developing country context. The study tries to analyze this model considering three main questions of (1) why it exists to understand its social mission, (2) what is new in this model to reveal its innovative approach, and (3) which stakeholders are important for this organization. The study organized as follows: first social entrepreneurship is analyzed in terms of its nature and environment based on the ecosystem perspective of Volkmann et al. (2012) and the three important questions of a social entrepreneurship model is derived from the literature. Then, adopting this perspective, the context of Turkish social entrepreneurship is assessed from a scholarly and practitioners’ perspective. In the fourth section of study, the selected social enterprises in Turkey were analyzed in terms of the pre-specified categories and subcategories, which are based on the above-mentioned questions of a social entrepreneurship model. The study ends with the future implications for both scholars and more importantly practitioners working on - 118 - International Conference on Entrepreneurship IEC 2014 the1. field Social of social Entrepreneurship: entrepreneurship. An Ecosystem Perspective

As the entrepreneurial activity with a social purpose (Austin et al., 2006), social entrepreneurship (Laurence, 2013) and corporate social entrepreneurship (Hemingway, 2013) have taken considerable attention in parallel to the increasing economic, social, and environmental problems around the world. Dacin et al. (2010) embed social entrepreneurs into their typology and identify them as the actors who try to solve social problems with applying business principles to create social change and well-being. Accord- ing to Santos (2012), social entrepreneurship is “the pursuit of sustainable solutions to neglected problems with positive externalities” with considering the trade-off between value creation and value capture as well as the market and government failures. There- fore, earning profit and reinvesting it to enterprise is at the hearth of this system to increase its growth potential in order to build its solution-oriented capacity both quali- tatively and quantitatively. While the charitable activities can only provide a temporary relief for social and environmental problems, social entrepreneurs take a leading role “to uncover or create new opportunities through a process of exploration, innovation, futureexperimentation, of a society. and Therefore, resource the mobilization” commitment and of social “to complement entrepreneurship or supplant on innovation government efforts” (Dees, 2007). Therefore, social entrepreneurs are important to build the and growth – like a classical enterprise – differentiates it from the similar conceptions and ensure the sustainability and future of such activities.

In their study, Volkmann et al. (2012) analyze social entrepreneurship from an ecosystem perspective and provide a holistic view of such organizational form. Figure 1 presents that the model of social entrepreneurship, which has both social and market orientation and builds on innovation and opportunity. A study on some best practices of social businesses [e.g. Grameen Bank in Bangladesh, Sekem in Egypt, The Institute for OneWorld Health in United States of America (USA)] indicates that common feature of social businesses is that they all have a primary social mission and challenge the status quo and conventional thinking about what is feasible with seeing the opportunities to improving systems, creating solutions, and inventing new approaches (Seelos and Mair, 2005). In line with this study, a review of literature shows that social enterprises are characterized by their social mission, finding new opportunities, innovation, acting boldly, sense of accountability (Dees, 1998), innovate potential (Borins, 2000), ambitious leadership, creative resources usage, building long-term relationships with customers (Leadbeater (1997), their contributions to stakeholders (Smallbone et al., 2001) or their creativity, entrepreneurial spirit, agenda-setting behavior, ethical understanding (Shaw et al., 2002). Deriving from these extensive literature, a successful model of social enterprise should be built on at least three questions of why this organization International Conference on Entrepreneurship IEC 2014 - 119 - exists/ what it desires to achieve (its social mission), what actually this organization brings to the market (its innovative approach), and who will be affected from its existence (its stakeholders).

However, social enterprises are significantly influenced and shaped by the dynamic conditions in their environment (Weerawardena and Mort, 2006). According to Volk- mann et al. (2012), while social enterprises “reduces the structural disequilibrium, creates value, solves a social problem, assumes risks, deals with asymmetric information, al- locates resources, creates new jobs and generates tax revenues”, they are embedded into a dynamic relationship of stakeholders, such as society, media, investors, competitors, customers, NGOs, state etc. Therefore, the concept of social entrepreneurship should be analyzed with considering the impacts of the contextual variables as economic, ecological, technological, socio-cultural, and legal & political layers. In the next section, these variables for social entrepreneurs are examined in terms of the unique context of a developing country – Turkey.

Figure 1.

Social Entrepreneurial Ecosystem (Volkmann, Tokarski, and Ernst, 2012, 7) - 120 - International Conference on Entrepreneurship IEC 2014 2. Executing a Social Enterprise in a Developing Country

Although it is relatively a new concept, the current definitions of social entrepreneurship in Turkish literature (Denizalp, 2007; Güler, 2011; Işık, 2013; Kırılmaz, 2013; Kon- aklı and Gögüs, 2013) usually highlight how such organizations create social benefits from an innovative and entrepreneurial perspective. For instance, while Denizalp (2007) defines the concept as providing a transformational solutions and approaches for the problems in the community, Kırılmaz (2013) indicates that this organizational form provides solutions for social problems from the perspective of entrepreneurship. Although the perspective of Turkish literature on social entrepreneurship closely aligns with the views of global counterparts, social entrepreneurship is not fully captured in practice. Today, most organizations as well as individuals are confused about the link between social entrepreneurship and corporate social responsibility (CSR). For most, if something is socially beneficial, it can be labelled as social responsibility or vice versa. The problem on the conceptualization of social entrepreneurs appears when linking profit for a social purpose. A recent study on the social entrepreneurs in Turkey shows that although 51% of respondents agree such organization can make profit, 25% of them still disagree on this matter - even if it was reinvested for the social purpose of the company (Koenig, 2013). This result might be related with the contextual variables of social entrepreneurship in Turkey. In the light of above-mentioned model of Volkmann et al. (2012), social enterprisesEconomic, in a developingLegal & Political country Factors: context are evaluated as following: in Turkey.• In fact, these structural problemsThe affect lack notof structural only the socialsupport, entrepreneurs, including its economic and legal & political tenets, seems the main problems of social entrepreneurs but also all entrepreneurs in Turkish business context. The study of Turker and Selcuk (2009) reveal the importance of structural support, which is taken as a function of institutional support, opportunities provided by the economic system, financial support, and legal system to foster entrepreneurship in the society. Therefore, similar to other entrepreneurs, accessing finance in the capital markets (Koenig, 2013) or finding experts who want to work for a social enterprise in the labor market (Koenig, 2014) are among major challenges that delimit the operations of social enterprises in Turkey. Despite the existence of several financial sources and instruments such as donations, equity capital, non-repayable hybrid capital, debt capital etc. in modern economics (Spiess-Knafl and Achleitner, 2012), the access of Turkish social entrepreneurs to such funding mechanism are limited due to the availability of such financial products in Turkey or relatively weak financial position/ re-payment capacity of such enterprises. In terms of legal aspects, social businesses is not officially recognized by the legal system in Turkey and so social entrepreneurship is mainly implemented by other legal entities of NGOs, cooperatives, etc. (TÜSEV, 2012). Therefore, a legal framework is particularly important to decrease the level of uncertainties for current and prospective entrepreneurs. International Conference on Entrepreneurship IEC 2014 - 121 - Ecological:

• The ecological problems become diverse and complex in Turkey due to the adverse impacts of unplanned urbanization and industrialization movement. Despite the existence of a ministry on environment, municipalities, or local and national NGOs working on the issue, the environmental degradation can reach the irreversible levels in some parts of the country. The problems appear in line with the previous dimension of legal and political framework in Turkey and it seems that these problems cannot be solved without an integrated approach and collaborative efforts of all institutions in the system. Social entrepreneurs, with their innovative and socially-oriented approach, can make a significant difference in society to achieve the principles of sustainable development in Turkey. However, considering the size of such problems, they should be supported by a nation-wide strategy and, more importantly, a longstanding commitment to reach this strategy among the policy makers. As long as the policy makers allow the illegal settlement of migrant population in the cities or the release of industry-related pollution without any waste treatment operations, none of these social entrepreneurs can solve Technological: the increasing number of ecological problems in Turkey.

• After the first generation of social entrepreneurs such as Gençtur, Buğday, Çöp(m)adam etc., today most social entrepreneurs try to take the advantage of the advanced communication technology (Koenig, 2014). Using social networks through communication technology, social entrepreneurs can make an intense connection and interaction with a wider community in Turkey and it is essential to introduce and sell their brands or products to the interested parties in the market. The study of Marti- nez and Aldrich (2011) shows that strong ties are particularly helpful for entrepreneurs during the initial development stage of a new venture. Therefore, the technological tools shouldSocio-Cultural be wisely adopted and integrated into the models of social entrepreneurs.

• : According to Koenig (2014), Turkish social entrepreneurial context is still in the first phase of its evolution process and the problems mainly stems from the lack of entrepreneurial interest towards social and environmental problems among people. Today, social entrepreneurs can easily access information through the initiatives such as activities of the Third Sector Foundation of Turkey (TÜSEV), conferences or scientific interest. However, the overall awareness of society on the concept is rather weak when comparing the developing countries. Although media can be an appropriate tool to increase the level of awareness on social entrepreneurship, their interests are relatively weak – except Milliyet. While the frequency of news on this topic is 57 in Hurriyet, 29 in Zaman, and 19 in Cumhuriyet, it is around 350 in Millliyet in the same period of time (2000-2014). On the other hand, considering the role of education on entrepreneurial businessactivity in schools. Turkey (Ertuna and Gurel, 2011; Turker and Selcuk, 2009), there is a need for integrating the topic of social entrepreneurship particularly into the curriculum of

- 122 - International Conference on Entrepreneurship IEC 2014 The current study tries to reveal how social entrepreneurs can develop their model in Turkey3. METHODOLOGY against the above-mentioned challenges of Turkey as a developing country. 3.1. Survey Design, Sample Selection and Data Collection

In order to assess the model of a social enterprise in Turkey, three questions derived from the literature were taken into account as (1) why the organization exists/ what it desires to achieve (its social mission), (2) what actually it brings to the market (its innovative approach), and (3) who will be affected from its existence (its stakeholders). Since there is a limited knowledge on social enterprises in Turkey, the study follows an exploratory structure to reveal the model of social entrepreneurship in Turkey. Table 1 presents how these three dimensions were operationalized for the data collection process. While the first dimension was measured through the stated definition of organization and its mission, the second was assessed through the indicators of core activities and distinctive features. Third dimension was evaluated through identifying the beneficiaries, users, and partners of social enterprise.

The data was collected among the social enterprises operating in Turkey. The sample of study was identified though a web search; first, the organizations, which entitled as social enterprises were identified with analyzing the news of highly circulated news- papers of Turkey and social network platforms, and then five social enterprises were selected to reflect the cases in different field of areas. Then, a short questionnaire form with the open-ended questions was delivered to each of these organizations – but none of them were returned to this call for information request. Therefore, the web sites of 5 social enterprises were evaluated in terms of the pre-specified categories and sub-categories of each enterprise.

International Conference on Entrepreneurship IEC 2014 - 123 - Table 1. Categories, Sub-categories, and Explanation

Categories Sub-categories Explanation

Social mission

Definition The definition of organization in terms of its (Why) legal form, sector, or field of activity

Innovative Objective The mission/vision of organization approach DistinctiveCore activities feature The activities that will generate revenue market (What) The distinctive feature of organization in the

Stakeholders Beneficiary The stakeholders that the organization contrib- (Who) Users utes without any payment utes in receipt of a payment The stakeholders that the organization contrib- Partners

The stakeholders that the organization contributes without any payment 3.2. Findings

Table 2 presents the result of analysis based on the three dimensions. It can be noticed that while 3 of organizations clearly define their organization as a social enterprise, two of them mentioned it as an on-line platform or project/company. Among the companies, Mikado Consulting is clearly aware of the clear distinction between social enterprise and social responsibility. In terms of their objective, except Çöp(m)adam, all companies are operating in the service sector and they aims to strengthen organizational capabilities on CSR (1st case), to increase overall awareness on financial literacy (2nd case), to empower women though human resources activities (3rd case), to provide an on-line marketplace for social projects (4th case), and to produce fashion products with waste material with providing employment for women (5th case). As Table 2 shows that the enterprises are involved in diverse activities such as consultancy, raising awareness, matching related parties, and production. The analysis of activities in detail indicates that social businesses in Turkey take the advantage of communication technologies heavily when building their model and this result is in line with the related section in the literature review part. For instance, while ParaDurumu is disseminating financial advis- ing information though its on-line platforms, Yenidenbiz and Fongogo provide an on-line market for job seekers and fund seekers, respectively. It is clear that most companies are

- 124 - International Conference on Entrepreneurship IEC 2014 innovative in their context, when building their models – such as becoming an on-line platform for CSR projects and helping them to find financial resources or using recycled material for producing fashion products. In terms of their stakeholders, it is somewhat unclear who are benefited from the existence of these enterprises. For instance, while the activities of Mikado Consulting is beneficial for the society (since they help to increase the quality of sustainability and social responsibility activities of business organizations with their consultancy), they do not indicate any specific target beneficiaries, who receive any monetary/non-monetary support of this organization. Therefore, there is an uncertainly how this organization spends its profit (when it obtain money in receipt of its consultancy services for business organization); in its current form, there is no difference between the activities of this social enterprise and an ordinary consultancy firm. On the other hand, the organizations identify their users in a wider sense. They are not specific in terms of region/ sector/field of areas etc. Moreover, the organizations tend to use collaborative approach to buildCONCLUSION their model and use usually several partners when involving in their activities.

Social entrepreneurship is clearly one of the brand new organizational forms of the 21st century and possibly affects the future of societies to achieve the principles of sustainable development. Since they are quite important to provide solutions for social and environmental problems with creating an economic and social value for the market, they need to be scrutinized to reveal how they succeed under the strong pressures of environmental challenges. This study tries to address this question in a developing country context and identify the nature of doing social business in Turkey despite the lack of any structural support. The result of study reveals that although the activities of these enterprises are innovative in Turkey, when considering the global marketplace, they are mostly following some good practices of world business. Therefore, the concept of innovation in here should be used cautiously, since they are innovative in Turkish context, but can be very common particularly in developed countries. It can be noticed that none of these enterprises explain their monetary transactions when involving in such activities. Since they had to cover their fixed and variables cost (such as employee salaries, rent, etc.), they surely need financial resources, however, except the last case [Çöp(m)adam], there is no available information how their business models create finance for their activities. This finding might not only related with their transparency on their activities, but might be linked with their working principles, which seems heavily on a voluntarily basis. However, since the financial sustainability of such activities is critical for their survivability capabilities, they need to adopt a strategic management perspective to increase the effectiveness and efficiency of their business model. Considering the opportunities and drawbacks of executing such enterprises in Turkey, social entrepreneurs can adopt a social network perspective when starting their own business. International Conference on Entrepreneurship IEC 2014 - 125 - Table 2. Results of Analysis

Firm Year Social mission (Why)

Definition Objective

2007

1.Mikado a social enterprise (and a not-for- To serve sustainable development Consulting profit company) and re-invests its and to yield social impact through profit to projects that contribute crafting innovative models and to sustainable development solutions; a catalyst, strengthening organizations’ capacities and mobilizing their resources efficiently so that they can fulfil their responsibilities and contribute to sustainable development 2.ParaDurumu 2011 literacy a social enterprise on financial tionsTo increase in Turkey the overall awareness on individual monetary transac-

a social enterprise

3.Yenidenbiz N/A To empower and help the well-ed- marketucated and experienced women when returning to the labor

4.Fongogo N/A a social network platform To provide an on-line marketplace to increase awareness, introduce and access funding on social projects of individuals, businesses, and NGOs

5.Çöp(m)adam N/A Started as an experimental proj- To create high quality fashion ect/ Turkish company without the exploitation of workers and the environment that is too often present in our industry

- 126 - International Conference on Entrepreneurship IEC 2014 Innovative approach (What) Stakeholders (Who)

Core Activities Distinctive Feature Beneficiaries Users Partners

Business, 4

Consultancy/ to assist private sector Consultingmental issues on forso- N/A theircompanies capacities in developing to establish their sustainable corporate cial and environ- NGOs responsibility strategy; assist NGOs build organizations practices; develop innovative solutions to innovativesocial problems solutions through that socialserve entreprethe corpo- neurship projects; develop and introduce - rate responsibility agenda in partnership with our international solution partners 1

Raising awareness / to provide finan- initiativeTurkey’s first 3 projects Individuals, cial information to individuals through financial literacy for children organizations several media channels (TV, newspaper, web-page) on the issues of banking, saving, marriage, retirement etc.; to educate people (children) on financial issues; to provide consultancy services to business organization to develop social responsibility projects Business 9 human resourc Matching / to create a candidate pool esConsultancy mechanism and Women from the well-educated and experi- - organizations enced who are not working currently, to provide training, mentorship based on for specifically their needs, to match the candidate with women organizations Social Mainly Many business Matching/ to provide an on-line social Individuals,tions network platform to match the fund network organiza- seekers, who want to involve a social organizations projects, and fund raisers, who can be announced as the contributor/sponsor of project or obtain other benefits such as membership, using logo etc. 4

Production/ to utilize waste to produce inRecycling/re-us fashion - Women Individuals, a creative, aesthetically and unique ing waste material organizations products with providing employment for women

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International Conference on Entrepreneurship IEC 2014 - 129 - - 130 - International Conference on Entrepreneurship IEC 2014 THE RESPONSIBLE COMPANY AND THE SOCIAL ENTERPRISE: DIFFERENCES AND SIMILARITIES. Ivan HILLIARD

Universidad [email protected] de Madrid / Faculty of Social Sciences Villaviciosa de Odon, Madrid 28670, Spain Tiziana PRIEDE

Universidad [email protected] de Madrid / Faculty of Social Sciences Villaviciosa de Odon, Madrid 28670, Spain Cristina LÓPEZ - Cózar NAVARRO

Universidad Politécnica de [email protected] / Faculty of Economía and Ciencias Sociales Agrarias Campus Ciudad Universitaria, Madrid 28040

ABSTRACT

The social entrepreneur is a type of entrepreneur who seeks ways to resolve a social or environmental problem through a creative answer, proposing initiatives motivated by the aim of helping others and pursuing positive social change. A key aspect of social entrepreneurship is therefore the creation of social wealth.

Corporate social responsibility is the incorporation of environmental and social responsibilities into the business activity, in line with the economic responsibility that firms have traditionally focused on. Unlike social entrepreneurs, the objective of a responsible firm is not to solve social issues created by others, rather to understand and limit the social and environmental impacts of their profit-generating activities.

The field of CSR has grown considerably in recent decades, whereas social entrepreneurship only began to receive serious academic attention quite recently. Until now, few studies have tried to link and differentiate the two areas. Due to the increasing interest in both concepts, the need to clarify the similarities and differences between them is greaterKeywords: than ever, and is the principal aim of this work. creation. Social entrepreneurship, corporate social responsibility, social wealth

International Conference on Entrepreneurship IEC 2014 - 131 - INTRODUCTION

Corporate social responsibility (CSR) is the incorporation of environmental and social responsibilities into the business activity, and aims to balance them with the economic responsibility to run a firm effectively and produce a profit. The social entrepreneur is a type of entrepreneur who identifies an opportunity to tackle a social or environmental problem, characterized by innovative capabilities, a strong sense of responsibility, and commitment to the project. Their aim are helping others, and pursuing a positive social change. Thus, the objective of a responsible firm is to understand and limit the social and environmental impacts of their profit-generating activities, while the objective of social entrepreneurs is to reduce or solve social issues through the application of business models.

Both theoretical and empirical research in the field of CSR has grown considerably in recent decades, as has its implementation in organizations of different sizes and types. Interest in social entrepreneurship, on the other hand, is somewhat newer, growing strongly in recent years. While an extensive literature now exists for both fields, the number of studies analyzing the two concepts in relation to each other is limited (Cor- nelius et al., 2008; Cisan & Borza, 2012; Hiller, 2013).

The principal aim of this work is to compare and contrast the two concepts, thereby providing some clarity in understanding each one. Due to the growth of specific legal formats that recognize the particular characteristics of the social entrepreneur, the need to clarify these similarities and differences is greater than ever. The paper is structured as follows: in the initial sections the concepts of CSR and social enterprise (SE) are analyzed. This is followed by a comparison between both concepts as well as comments on their potential to achieve positive social change. It finishes with conclusions and recommendations.BIRTH AND EVOLUTION OF CORPORATE SOCIAL RESPONSIBILITY

A wide range of definitions have been suggested for CSR (e.g. Bowen 1953, Davis

1973), without any one being accepted as the standard.1 Yet the concept is becoming increasingly clear, and involves considering and assuming responsibility for the social and environmental impacts of a company’s actions . A sincere approach needs to consider the adoption of a Corporate Social Performance model (CSP) which emphasis the importance of not only identifying, evaluating, and balancing a company’s responsibilities, but also the level of responsiveness as they implement new policies and new operational processes, plus a consideration of the outcomes in terms of an organizations economic, social and environment impacts (Wartick & Cochran, 1985; Wood, 1991). Without such 1 CSR is not limited to companies, with many types of organizations potentially creating negative social and environmental impacts as they a holisticcarry out their vision, operations. companies However, for the maypurpose simplyof this article analyze we will focus and of for-profit define companies. changing responsibilities

- 132 - International Conference on Entrepreneurship IEC 2014 without taking appropriate action and measuring it, or may undertake a range of actions without considering the underlying motivations.

CSR has grown in importance (both academically and at corporate level) in the past three decades, principally due to a rapidly changing business environment. Examples of this include the explosion in global production chains, the rise of the informed and increasingly active concerned consumer, increased pressure on natural resources, the growth of activist groups, and changing regulations. CSR plays two key roles in all this: • It permits a better understand of these shifting social conditions, the impact they can have on the company, and the necessary conceptual and/or operational changes that should be made; • It provides a roadmap whereby companies taking CSR seriously can identify an increasingly wide range of competitive advantages.

A large number of initiatives and programs exist through which companies understand and manage these responsibilities, amongst the most well-known and widely-used being the Global Compact and AA1000 to orientate companies towards a more responsible management stance and better understanding of different stakeholder concerns; the ISO 14000, SA8000 and OHSAS 18001 for respectively environmental management, responsible labor conditions, and workplace health and safety; and the GRI framework for identifying, measuring, and reporting the consequent outcomes.

Since the only difference that really exists between a responsible and irresponsible company is that one considers the social and environmental impacts of its profit-generating activities, and the other doesn’t, no separate legal formats exist between the two. However, certain regulatory obligations are being to appear related to the management of CSR which may lead in the future to differentiating legal formats. For example the EU’s Committee of Permanent Representatives has just approved a new directive obliging most European companies with over 500 employees to produce a statement on their environmental, social and employee-related matters, including a description of the policies and outcomes, and a risk-analysis. Where a company does not pursue policies in relation to these matters, it will have to explain why not (comply or explain). However, relatively few companies produce reports on their social and environmental impacts, and those that do often cherry-pick the information they present, meaning that understanding and interpreting the overall impact of the organization’s activities is still difficult (Milne et al., BIRTH2008; Fonseca, AND EVOLUTION 2010; Levy OF et SOCIALal., 2010). ENTREPRENEURSHIP

In the late nineties, Dees (1998) was amongst the first to define academically social entrepreneurship, proposing a complex definition based on the role of the entrepreneur International Conference on Entrepreneurship IEC 2014 - 133 - as an agent of social change, and highlighting three main aspects: innovation, commitment and a strong sense of responsibility for the project. For Mair & Martí (2006), the social entrepreneur is the creator of an innovative business model, able to offer goods and services oriented towards developing effective and efficient solutions to social and environmental problems. Bornstein (2007) focused on a social entrepreneur’s character: including problem solving skills, an ethical nature, and a sense of commitment. Fi- nally, Light (2006) shows that social entrepreneurship is a popular but confusing term, which is used to describe different concepts, proposing that it is any individual, group, network, organization or alliance, seeking a sustainable and large-scale change, developed through innovative ideas on how to deal with social problems. Therefore, a key driver of social entrepreneurship is the motivation, vision, and capabilities of the social entrepreneur, who may seek to implement an idea and attain objective through a business format known as the social enterprise. 2 In order to develop a general framework to identify social enterprises in Europe, the European Research Network (EMES ) considers social enterprises to be those for which the social objective of common interest is the reason for the commercial activity, which often results in a high level of social innovation, whose profits are primarily reinvested in conducting this social objective, and whose modes of organization or ownership are based on democratic or participatory principals or social justice concepts (COM, 2011).

Although the definition dates from 2011, the social enterprise concept began to gain adherents in Europe in the early nineties. In particular, early support was provided in Italy in 1991, where social cooperatives (a new concept of the cooperative) were created with the aims of ensuring the general interest of the community, the promotion of people and the social integration of citizens. Following the Italian example, between 1998 and 2001, other European countries such as Portugal, Greece, Spain and France, also began to establish new legal cooperative forms to attend social needs (Defourny & Nyssens, 2008; Galera & Borzaga, 2009; Asián et al., 2013).

Around the same time, in 1997, Belgium created the possibility for companies to label themselves as a “company with a social purpose”. This was not a new legal form, rather a descriptive tag which could be acquired not only by cooperatives, but also by any other types of profit-seeking business, such as limited liability or public limited companies, as long as their principal objectives were social (Galera & Borzaga, 2009). Along the same line, and mainly because of the growth of cooperatives, Italy in 2006 introduced an important change in the legal framework for social enterprises, where a more open model was adopted. Thus, any private organization, including trading companies, could acquire 2 EMES is a network composed of university research centers and individual researchers, since 1996. Nowadays is constructed by fifteen theinstitutional qualification members, oflocated social in 11 company,different European as longcountries, as althoughtheir sinceprincipal 2013, EMES objectives has decided towere open itssocial. membership to researchers from around the world.

- 134 - International Conference on Entrepreneurship IEC 2014 However, the European country most advanced legislatively in such social initiatives is the United Kingdom. The British Government, in its efforts to support the creation and development of social enterprises, has tried to improve the fiscal and regulatory surrounding environment. Hence, in the year 2005 a new legal form for social enterprises was created. The Community Interest Company (CIC) is a limited company combining the flexibility of the limited liability company with a social purpose. CIC is a type of limited company designed specifically for those wishing to operate for the benefit of the community, instead of personal profit. With this format, the social entrepreneur can attract investment by issuing shares, but most of the profits are to be reinvested in the organization or in the community (Cooney, 2012).

Meanwhile, in the United States, due to an increased need to respond to the peculiarities of social entrepreneurs, and considering that development was stunted because of the limitations of an outdated legal system, the Low-profit Limited Liability Company (L3C) was created in 2008. As a variation of the Limited Liability Company (LLC), it is considered a hybrid structure between profit and nonprofit organizations, which can generate profits as long as their principal objectives were social (Battilana et al., 2012; Cooney, 2012). In 2011, looking to develop a better and clearer legal framework for social entrepreneurs, the Benefit Corporation was born, which provides a broad legal protection for both entrepreneurs and investors, thereby increasing funding opportunities for this type of business as long as they comply with certain criteria regarding social responsibilityCOMPARISON requirements BETWEEN and THE transparency TWO CONCEPTS levels.

To underline the specific characteristics of each concept, this section contains a comparative analysis between enterprises with strong and developed responsible management practices (CSRE’s), and social enterprises (SE’s) which prioritize the social impact of their actions, and relegate profit-making to a secondary role. Firstly, the similarities between the two concepts are identified and can be categorized under four broad headings.1. Perusal Of Social Change:

Both are concepts based on responding strongly to social change, or what is sometimes labelled social advocacy (London, 2010). The CSRE does so by understanding that traditional business practices need to change both for normative and profit-motive reasons. An increasingly important driver of CSR is the growth of business’s impact on society and the environment, and an understanding that as this impact grows, so do corresponding responsibilities to tackle these impacts, and also manage potential risks created as they seek to generate profit. The SE does so by filling a social function that may otherwise be left unattended. They are often reacting to changes in the social construct, either providing services that may have once been International Conference on Entrepreneurship IEC 2014 - 135 - provided by the community or family, or responding to new social needs that until now have2. notUse been of Business dealt with Models: effectively by government or other organizations.

Both operate using common management processes, aim to have revenue streams by producing goods or services, and should be profitable. Providing employment and participating in supplier and customer relationships, an ef- marketplace.ficient SE will use performance indicators such as employee evaluations or profitability indices in the same way that a CSRE does. In other words, both must compete in the 3. Being Responsible:

Both must embed a sense of responsibility into their organizational DNA. While this may sound somewhat contradictory, what is meant is that to become a successful CSRE requires a holistic organizational approach to CSR (Balmer et al., 2007). This is something which is incorporated into the very existence of the SE (Hiller, 2013). Despite this difference in form, both concepts share a similar concern regarding this sense of responsibility. If not correctly understood and implemented, there is a risk of incoherency, becoming a responsible organization in some operational areas and less so in others. Many companies implant CSR in an uneven manner which may create friction and cynicism (an example would reducing emissions in logistics operations while at the same time increasing production in countries where breaches of workers’ rights are common). In the case of SE’s, the fact that they are taking a responsible stance towards a particular issue (their reason for setting up initially), they may feel instinc- tively that they act responsibly in everything they do without actually analyzing whether that4. is Worldview: the case or not (Cornelius et al., 2008).

Both concepts are by nature voluntary, and the decision to enter into either is a choice freely taken (although it can be argued that there are certain moral and ethical motivations underlying both options). Both choose to go beyond the legal and societal requirements of their environment, and decide of their own free will to listen to, and consider the views of different stakeholders, incorporating ideas of social impact into their organizational value system.

However, a number of important differences between the two concepts also exist, requiring elaboration. In fact, the differences between the two concepts is somewhat greater1. Concept in number Development: than the similarities, and are grouped under a variety of headings.

Recent decades have been busy ones for those involved in the field of corporate social responsibility. A large number of implementation tools (e.g. SA8000, AA1000, ISO26000, OHSAS 18001) have been adopted, and communication of outcomes, as well as the format of that communication, has become common through - 136 - International Conference on Entrepreneurship IEC 2014 the use of the GRI (Levy et al, 2010). There is an active level of civil interest, demonstrated by a growing number of dedicated publishing firms, both government-led and private-sector observer organizations involved in analysis and promotion, and a wide range of academic and professional programs. Social entrepreneurship is a newer field, and for the moment lacks some of the research knowledge and practical application experience, although this is beginning to change2. Prioritization (Noruzi et al., and 2010; Assessment Hiller, 2013). of Objectives:

While both CSRE’s and SE’s need to balance the books, their principal aim differs. The progress of recent years has ampli- fied, rather than replaced Friedman’s point of view that a business only has obligations to its investors, suppliers,3 employees and customers, and its only responsibility is to make profits for the shareholders/investors and so participate in the creation of wealth (Friedman, 2007 ) . In other words, it aims to create shareholder wealth, although that needs to be balanced against other considerations. SE’s start from a different point of view, that the wealth they are creating need not be economic, and that while profitability is a helpful guide to planning and decision-making, it should not be prioritized. Its prin- cipal3. aimSocial is to Impact: create social wealth.

Due to their nature, each concept has a different type of impact on society. CSR, as mentioned above, is a result of changing social conditions that requires companies to consider the negative social and environmental impacts they create as part of their business activities. It requires a CSRE to reduce, and hopefully eliminate the harmful emissions that the company itself produces, as they create negative externalities for society as a whole. It starts from a position of indebtedness to society (every industrial process produces waste by-products), and aims to reach a neutral balance between its social and shareholder-wealth generating activities. On the other hand, an SE is not cleaning up its own mess. It starts from a neutral point, and each impact should have an accumulative positive impact on society, aiming to resolve problems created by others. Of course, this is true as long as it does not ignore its other impacts (an SE set up to offer microcredits to the homeless that ignores other responsibilities such as materials use or financial transparency is probably creating more negative impacts that it aims to resolve).4. Costs:

3 The original article For was a companypublished in the toNew adopt York Times CSR in 1971.concepts It was republished in a holistic in 2007. and serious manner (that

International Conference on Entrepreneurship IEC 2014 - 137 - is, become a CSRE) requires above all a change in mentality. It may also require changes in organizational structure, production and logistic processes, measurement systems, and communication methods. In other words, it implies an initial outlay in time, energy and economic resources. These will be recouped with time through improved competitive position, better reputation, reduced risk exposure and a range of other positive outcomes. A SE doesn’t’ face the same problem, as a sense of social mission is part of its birthright, and therefore a costly transition is not necessary. Some years ago a SE may have faced some lost opportunity costs due to the greater difficulties for example of raising finance, but with the emergence of legal formats such as the Community Interest Company (CIC) in the UK, or the Benefit Corporations (BC) in the USA, which allows for financing5. Communication: through share-issues, such inconveniences are gradually disappearing.

CSRE’s increasingly use non-financial reporting (NFR) as a key vehicle for stakeholder dialogue though which they explain their responsible management philosophy and inform on actions taken. The most widely used tool is the Global Reporting Initiative, which provides a template for producing reports. SE’s don’t necessarily need to communicate in the same way. As long as the social purpose of their existence is clear to actual and potential clients, and they are clearly positioned in the marketplace, much of their message regarding their social mission will be automatically transmitted6. Measuring whenever Success: they communicate on any aspect of their company activities.

Many stakeholders use the afore-mentioned non-financial information produced by a CSRE to analyze the accumulative effect of their actions, and answer a fundamental question: how responsible are they being? While containing a number of strengths, the non-financial reporting system also has weaknesses, with not enough work being done systematically analyzing either the information presented, or its cumulative effect (Brown et al., 2009). However, the growth of non-financial reporting does allow possibilities for better measuring CSRE output in the future. A CSRE may also use well-known reputational indices and rankings such as the Dow Jones Sustainability Index or the KLD Indices to complement their economic indicators, be they cash flow or revenue streams, ROE, or share value (to name but a few). However, the ket indicators of success remain financial, and a CSRE losing money could not be considered as successful. CSR means balancing different responsibilities (and incorporating new ones), but the economic responsibility to pay its debts and reward investors does not, nor should it, disappear. A SE measures success in the social impact it creates, yet due to the relative newness of growth the field and the difficulty of measuring the social impact generated by each distinct project, as yet a limited number of indicators exist to analyze this, one example being the guidelines for social return on investment (Lingane & Olsen, 2004).

- 138 - International Conference on Entrepreneurship IEC 2014 CONCLUSIONS

The current economic crisis has played its part in driving recent interest both in corporate social responsibility and social enterprises. This has led to the development of a wide range of managerial tools for understanding and implementing the former, and a boom in the creation of the latter. More specifically, in Europe (both at national and supra-national level), there is a growing focus on methods to promote and support both concepts. Increasing numbers of governments have published national CSR plans (for example Germany in 2010, Italy in 2013, and Spain due in 2014) and the European Com- mission has promoted a wide range of initiatives as well as publishing a first Green paper on the topic in 2001. While many social enterprises began life by adopting the structure of cooperatives, later a number of countries began creating specific legal format, with the UK leading the way with the Community Interest Companies. The interesting case of the Benefit Corporation in the United States also merits close study as a potential model for others to follow.

As a response to the growing interest in the two areas, and a corresponding level of confusion, this article aimed to clarify the concepts by outlining in some detail the principal similarities and differences between them. As can be seen throughout this analysis, the two concepts are related yet their underlying nature, reason to exist, and measurement of success are significantly different. Fundamentally, one is the application of new considerations (responsibilities) to existing business models within an existing profit-making paradigm, whereas the other consists of social entrepreneurs taking those business models and applies them to unresolved social problems, partly by redefining that same paradigm from shareholder wealth creation to social wealth creation.

In the analysis we have identified important similarities between the two concepts that have been categorized under four main ideas. Both concepts are based on the perusal of social change or advocacy, in both cases it is necessary to use a business model based on the market economy; and both concepts share a similar concern regarding this sense of responsibility. Finally, both concepts are voluntary and inclusive by nature.

We have identified a larger number of differences that are organized under six main ideas. In relation to the development of each concept, recent decades have been busy ones for those involved in the field of CSR while SE is a somewhat newer field. There is also an important difference in relation to the prioritization and assessment of objectives, with the CRSE aiming to create shareholder wealth within a new business-social relationship, while the SE aims to create social wealth for large numbers of stakeholders. Another important difference is based on the different type of impact each one may

International Conference on Entrepreneurship IEC 2014 - 139 - have. Realistically the most that can be hoped for from CSRE’s is that they reduce, and eliminate the negative footprint that they themselves have created. SE’s start from a neutral point, and contain the potential for each impact to have a positive social footprint. Additionally, they aim to resolve problems created by others. In relation to the costs, becoming a CSRE implies an initial outlay in time, energy and economic resources, while the SE includes the sense of social mission as part of its birthright and so avoids this. In communication terms CSRE’s need to explain their responsible management philosophy, actions taken, and the outcomes produced, whereas SE’s should be able to transmit an embedded social message to the marketplace. Finally, regarding the measure of success, while CSRE’s can use well-known indices and rankings, the financial data is paramount. For measurement of SE success, a limited number of indicators exist, and much research remains to be done in this area.

Thus, it can be said that while corporate social responsibility has demonstrated some usefulness for resolving problems created by the marketplace, it seems unlikely to provide a sufficient catalyst for fundamentally resolving the deep social and environmental fissures that have emerged in recent decades. Social entrepreneurship generally, and specifically the blend of a competitive business focus and social wealth creation offered by the social enterprise model, offers greater potential for progress towards a more eq- uitable and fair world. For this reason, social enterprises are beginning to catch on, and are attracting increasing attention from institutional, professional, business, and educational sectors. It is important to emphasize the key role the public administrations of different countries, as well as international bodies, must play in supporting continued forward momentum. A number of tools are available to them, such as legal, financial and fiscal frameworks, priority in accessing government contracts, and increased funding for research and training programs. Some of these tools are already in place for CS- RE’s (for example in Spain, the 2011 Sustainable Economy law promised to prioritize bids for public contracts from companies meeting the objective of having 2% of their workforce drawn from disadvantaged sections of society). Such support is all the more important given the less than satisfactory record of regulatory authorities generally in dealing with a pre-crisis financial system clearly in need of greater regulatory control, growing inequality within and between different states, and an ever-more serious global resource-depletion problems.

Under this premise, and taking into account that easy fixes are unlikely, both corporate social responsibility and social entrepreneurship concepts have much to offer, without forgetting the limitations each one might face. Both have the potential, in their own way, to reduce the worse aspects of human economic activity while supporting the positive ones, with the underlying aim being the promotion of human development and social progress both today and tomorrow. - 140 - International Conference on Entrepreneurship IEC 2014 REFERENCES Asián Chaves, R., Fernández Fernández, M. T., & Montes Pineda, Ó. (2013). Más allá de la RSC. hacia un nuevo paradigma de desarrollo a través de la innovación social. Revista Pris- ma Social, (10)

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International Conference on Entrepreneurship IEC 2014 - 143 - - 144 - International Conference on Entrepreneurship IEC 2014 SOCIAL ENTREPRENEURSHIP: RETHINKING THE RELATIONSHIP BETWEEN CORPORATIONS AND THE SOCIETY : AN INDIAN PERSPECTIVE Mouloud Madoun, Visiting Professor

Indian Institute of Management Trichy ( Tamil Nadu)

ABSTRACT

In this paper, we examine the current state of the social entrepreneurship (SE) literature asking the reasons of the rising interest in the topic and what is distinct from other related concepts specifically from entrepreneurship. From an evaluation of the literature and based on a field study from an Indian case, we conclude that research could benefit from examining diverse perspectives which highlight the cultural context in which entrepreneurs operate. We argue that fundamental deficiencies in the governance model and its underlying system of thinking, limit the effectiveness of any social entrepreneurshipINTRODUCTION and social enterprise.

Organizations and the society are facing a major crisis of purpose and meaning. The paper is based on a fundamental critic of the dominant theory which has been espoused and used by western corporations and literature which assumes that the market based economic system (market capitalism) will benefit all the society if no interference pre- vents it from functioning freely. Many approaches have been suggested to tackle the crisis and social entrepreneurship has grown as one of the major response.

After a review of the literature on social entrepreneurship, and based on field-case study from India, we show how social entrepreneurship can be sustainable if it inte- grates economic and social outcomes, on one hand, and if a new value-based governance model is designed on the other hand. In this model, different stakeholders are equally involved in the decision making process and benefit from the outcomes as they are part of the decision making which requires a redistribution of power between the different stakeholders.

Based on interviews with managers and members of stakeholders, participant observation and case study of AMUL in India, we conclude that significant contribution to reduce economic inequality can be achieved through a deep change in the relations between corporate and the society.

International Conference on Entrepreneurship IEC 2014 - 145 - The paper tries to understand the interest for Social Entrepreneurship, highlight the similarities and differences with traditional entrepreneurship, and then reviews the controversies around the definitions of the concept and casts a new perspective based on the Indian experience. We conclude that there is a need of new and holistic thinking of the relations between corporations and the society as a hole. clusive.We hope our paper will contribute both theoretically to the concept of SE and prac- tically in suggesting ways to make social entrepreneurship ventures sustainable and in- The Rise of Social Entrepreneurship: Issues and Controversies

Social entrepreneurship has become an important field of interest that crosses academic disciplines and challenges the traditional assumptions of economic and business development (DART 2007). The emergence of social entrepreneurship is a response to both traditional entrepreneurship and public policies which have failed to handle the growing social issues.

In early research, the dominating stream focused on social entrepreneurs as individuals with specific personality traits, values and vision (Bornstein, 2004). This approach is still popular and many cases of successful social entrepreneurs have been underlined. From this individual based perspective, the differences between traditional entrepre- neursConventional and social entrepreneurs Entrepreneurship: are not Strengths significantly and different, Weaknesses:

Conventional entrepreneurship had tremendously contributed to the wealth and value creation all over the world. Several examples can easily show the achievements in different areas of the economy; today several innovations in the new economy and information technology have not only produced wealth but also impacted the society and lives of many people. Literature on entrepreneurship and innovation are abundant and examples from diverse areas illustrate this reality in areas as diverse as computes, mobiles, internet, social medias…Heroic and leading innovators have been celebrated all over the world. (Bill gates, S. Jobs,)

Conventional entrepreneurship has been mostly individual oriented and most of the successful conventional entrepreneurship has been explained though individual skills, abilities and risk taking ( Venkataraman, 1997). Most of the characteristics of successful entrepreneurs are individually based: Creativity ( Drucker 1994), alertness to opportunities,Differentiating risk orientation, Traditional and passion and ( Social Baron, Entrepreneurs: 2005), Cardon , 2009)..

- 146 - International Conference on Entrepreneurship IEC 2014 At this individual level, recent research introduced compassion as the main differ- entiator between the two concepts. (Meyer 2012). In SE, emotion plays a great role and decision to start a social enterprise is motivated by emotions, empathy and openness to others. This approach has been very controversial and many scholars suggested an integrated perspective to understand Social entrepreneurship from different perspectives and shed light on antecedents and outcomes of social entrepreneurship as the key to differentiate the two concepts. Dacin (2011) suggested different avenues for theory building in emphasizing the relevance of social processes in the pursuit of social entrepreneurship venture. Going beyond the individual based approach, he included different dimensions such the sphere operation and the social needs targeted the processes and resources used and most importantly the mission.

Social entrepreneurship uses traditional entrepreneurship but scholars have highlighted the distinctive characteristics of social entrepreneurship. - Research suggests that entrepreneurs are not able to sustain because they lack management skills. Entrepreneurial passion has to be translated into organizations features. ( Johannisson, 2002). neurial- It is ventures. assumed that the purpose of any business is to create value and make profit. Social issues are not the explicit focus of entrepreneur, though stated in some entrepre-

- There is a general assumption that economic value pursued by entrepreneurs will benefit the society as a whole either directly through employment, tax.., or indirectly thoughSocial work Entrepreneurship experience, education.. As a Response to Entrepreneurship Limitations and Failure

Conventional entrepreneurship focuses on economic value and benefit primarily shareholder. Assumptions that maximizing profit will benefit the society as a whole are yet to be demonstrated: unemployment has increased in all countries; social inequalities and poverty have not been reduced significantly. This is one of the reasons why many developed countries have developed public policies to reduce the harmful consequences caused by the traditional model of development. There is no doubt that these policies have produced a relief and helped many left behind people survive; but the social problems have not been solved. Several indicators on employment, poverty, inequalities show that social conditions have worsened in many countries. The emerging of social entrepreneurship is viewed by many scholars and practitioners and politicians as the solution to the increasing social problems and the failure of traditional entrepreneurship.

Social entrepreneurship has emerged where market and conventional entrepreneurship have failed. Social entrepreneurship is the combination of economic and social val- International Conference on Entrepreneurship IEC 2014 - 147 - ue. SocialBut these Entrepreneurship: definitions remain The very Challenge broad and of aDefinition consensual definition of social entrepreneurship is still expected.

A central difference with conventional entrepreneurship is that social entrepreneurs are driven by the motivation to create value for the society. However many different definitions have been provided suggesting that no shared definition has been reached yet. For an extensive and comprehensive review of definitions, we can refer to Dacin (2007).

Dacin (2010) found 37 different definitions that he grouped in four categories: - Characteristics of social entrepreneur. - Operating sectors. - Process and resources used by social entrepreneurs. - Primary mission and outcomes of social entrepreneurship

One of the critical questions is what explains the success of social entrepreneurship? Are human actions guided by instrumental and emotions calculations or structured by economic, political and cultural forces? ( Mc Mullen 2007). Dacin (2010) suggested four dimensionsCharacteristics that help of understand Social Entrepreneurs what drives social entrepreneurs:

Several researchers had shown interest in the heroic aspect of SE and their abilities to identify opportunities. Why are particular individuals more likely to perceive opportunities for and pursue path breaking social entrepreneurship? The Grameen Bank founded by M. Yunus has been widely exemplified. In emerging countries, this case is not unique. In India and other developing countries, many cases of success stories have been highlighted ( aravind Eye Clinic, Akash, barefoot College). Our purposes to understand why are certain individuals more likely to utilize the necessary resources to exploit opportunities for the society interest? Millerand all... (2012) suggest that compassion is significantly linked to social entrepreneurship. Social entrepreneurs use both head and heartOperating as well in Sectors their venturing for others.

Regarding the operating sector and processes and resources used by social entrepreneurship, the focus is on the manner it is established. , the primary activities, the owner- shipPrimary and whether Mission social and or Outcomes: economic wealth is prioritized.

This is an important dimension of social entrepreneurship. It aims at creating social value by providing solutions to social problems. One of the most challenging for social entrepreneurship is to find the right balance and link between economic outcomes, prof- - 148 - International Conference on Entrepreneurship IEC 2014 it with social value. Creating social value is closely linked to economic outcomes that produce financial resources used to achieve social mission. Critical outcomes play an essential role in social entrepreneurship success and its sustainability Definition Conventional Social Entrepreneurship

or enacts business principles to Wealth distribution An agent who enables solveAn actor social who applies Problems. A vision based on new ideassuccessful in innovation Order to create

(Schumpeter, 1950)

Organization form Shareholder Shareholder and stakeholders

Objectives and motives EconomicProfit Non profit or profit

Product Social change and well-being Economic sustainability Tensions and conflicts Create/distribute con- vsPromote social missionsocial change sumer product

Greyston. Examples tourism..Growth vs survival Aravind Eye clinic, Software developers,

Source : Adapted from P.A Dacin, M. Tina Dacin & M Mateor, 2010).

Traditional and Social Entrepreneurship: Bridging the Gap

A stream of research attempts to combine the two concepts and find synergies to increase the outcomes of both approaches: entrepreneur and the market based approach on one hand and the social mission on the other hand (Mair and Marti, 2006). Social entrepreneurship is supposed to integrate the economic, social and environment dimensions at the same time. The dominant approach supposed to be a realistic approach assumes that economic and social outcomes are not conflicting and can be simultaneously achieved.

International Conference on Entrepreneurship IEC 2014 - 149 - Beyond the Dichotomy

F Santos (2012) suggests abandoning the dichotomy between social and traditional entrepreneurship and instead building a positive theory of social entrepreneurship by combining them in such a way that “any entrepreneurship action would produce social effects”. He argues that “economic value creation is inherently social in the sense that actions that create economic value also improve societal welfare through a better allocation of resources”. This approach is consistent with the concept of “shared value “as suggested by Porter in an interview with M. Driver (2012). Shared value is creating economic value and social and societal benefit simultaneously. The purpose is to show that profit seeking and social objective work together.

Porter called for a renewal of capitalism and argues that emerging demands for that renewal have already been recognized. To survive, capitalism should renew its approach in moving toward the creation of shared value. M Porter suggests that social entrepreneurship can be an “important transitional vehicle toward the creation of shared value and a capitalist system in which meeting social needs is not just a peripheral activity but a core aspect of any business”.

Positive social outcomes will be the key to success in an evolved capitalism. ; “it is not just a temporary response to a crisis of legitimacy of capitalism but a permanent shift toward the pursuit of higher profit which also must produce positive social change”. In this trend, a call for “more ethical and specially inclusive capitalism ( Dacin- Tracey 2011) is growing.

This call has not been heard yet (Porter, 2012) and instead corporations in the capi- talistic system are still producing damages on different stake holders including employees, customers and the society as a whole. We argue that the major reason is the conception of the relationship between corporations and the society. This conception goes beyond the cognitive gap (Response, 2006) and includes governance model and power distribution. The shared value approach is embedded in the cultural system that value profit seeking even at the cost of the stakeholders` expectations and interests.

An example of this failure is the rise of CSR activities which have been promoted by rationscorporations but peripheral as the evidence one. of their engagement for social mission. However, the outcomes have been very disappointing. CSR activities are not the core dimension of corpo-

CSR activities rarely include development issue and poverty reduction. This approach is grounded in the thinking that the primarily concern of corporation is to make profit and not meet social needs. The market alone is able to bring about development. - 150 - International Conference on Entrepreneurship IEC 2014 Frynas(98) studying oil industry came to the conclusion that “actual and potential profit remains the key reason for most of the corporations, particularly MNC`s. Idemudia (2009) analyzing the role of MNC in reducing poverty and conflicts in Nigeria concluded: CSR activities undertaken by Oil MNC have not contributed significantly to reduce economic inequality and did not advance the inclusive growth and development.” He observed that after years of implementing CSR activities, disappointing results were noticed.Towards a Holistic View of Social Entrepreneurship: Economically Sustainable Venture With Social Values

The classic and neo liberal model asserts that the purpose of corporations is to max- imize profit. Subsequently, this leads to social effects through employment, wealth creation. The assumption is that doing well financially can also mean doing good socially. For this link to happen government should not intervene and any regulation should be removed because it might harm business and its effects on social objectives. This western model has been dominating for a long time and has produced enormous negative consequences. The model is based on the rational thinking that focuses on the logic that in splitting things into parts is the best approach to understand and solve problems.

In this paper, we argue that social mission and the way it is achieved is the critical dimension of a social entrepreneurship venture and embedded in a cultural and philosophical system of thinking.. This means a reconfiguration of the power distribution between stakeholders. Our assumption is that this emerging new governance model is embedded in the Indian culture and philosophy that had been experienced and highlighted by many different scholars. Through the AMul case, we would like to show how social entrepreneurship has been sustained through the implementation of a new model of governance which is embedded in the indian philosophy.

This new emerging model is challenging traditional entrepreneurship and question- ingPublic the foundations Policies and of the Imperfections underlying principles: of Conventional Entrepreneurship

Public policies and welfare state were initiated to bring correction to the imbalanced development. In the west where the classic model is unchallenged, many initiatives have been introduced to help poor, unemployed, disabled people through social and welfare assistance. Outcomes are more or less positive and successful outcomes depend on how the model is implemented: Some positive impacts in Northern part of Europe and medi- ocre in US and other part of Europe.

The pursuit of profit which is a short term objective is not compatible with social International Conference on Entrepreneurship IEC 2014 - 151 - issue and development which are long term objectives. Researchers have shown that socialthis short entrepreneurship. term orientation to the exclusion of other goals will have adverse effects in the long run. Other important dimensions are more and more considered in order to shape Collective vs Individual Dimensions

Another stream of thinking which is emerging is the “collective Social Entrepre- neurship” (A.Wren Montgomery and Peter A Dacin and Tina Dacin). They argue that social entrepreneurship has been focusing mainly on individual entrepreneurship and over-emphasizing the heroic dimension and success stories. As social entrepreneurship is about social change, the collective dimension becomes critical. Particularly in the emerging and less developed countries, people and the society as a whole can change only through interaction and if they are involved in different steps of the SE: Foundation, management, resources and decision making. Collective social entrepreneurship has been defined as the collaboration amongst diverse stakeholders. Collective dimension is critical as it enables acquiring resources from diverse actors, build credibility and re- duceSocial cost, Justiceand facilitate and Human change Dignity: (Montgomery In Search …, 2010). of The Meaning

In their “in pursuit of Dignity and Social justice, Gram Vikas (2011) focused on inclusive development in the rural areas and changing lives of people. An innovative social values.entrepreneurship approach is suggested to achieve a sustainable development through water and sanitation program. Social entrepreneurship is both about development and

The different assumptions we have reviewed show that there is a growing need of rethinking the relations between organization, individuals and the society. The Amul experience and the new model of governance can help understand how social entrepreneurship can sustain the inclusive development through the active participation of stakeholdersWhy Indian to Experiencedecision making.

India and Indian corporations are abundant of examples of social concern actions and entrepreneurship.

The interest for social mission is embedded in Indian history, culture and philosophy and started a long time back: Tata, Birla and other corporations have developed and implemented a philanthropic strategy since their inception. Today, the majority of Indian firms have some social mission through foundation, or CSR activities.

- 152 - International Conference on Entrepreneurship IEC 2014 Indian experience: Reincorporating societal consequences in the organizations concern and strategy

There is a need of recognizing that there are fundamental differences in corporate-community views, perception of what social development should be focused on and which objectives should be targeted. These differences in the design and implementation of this value based social entrepreneurship process have not been yet considered in an integrated manner. “

In India, the cultural, historical and social conditions under which this shift might happen exist.

Indian businesses have a long history of operating in an environment where inequality was rampant. They managed to cope rather positively with the dual pressures of contributingA Cultural to and economic Historical growth Concern and reducing the high inequality in the society.

Contrary to the widely spread belief, India was not a poor country as it has become. Rather, before Islamic and European invasions, India was a developed country with an effective a competitive economy. Poverty developed and increased during foreign domination. The last hunger famine happened in 1928 during the British raj.

The philanthropic features of Indian business are embedded in the culture and philosophy of India which inspired Gandhi himself to frame the social dimension of economic development of independent India. This philanthropic values and activities have continued with most of the businesses created before and after the reforms of 1991. AMUL has been founded to implement principles and values which embedded in the IndianUnderstanding culture and philosophy. the Context

Amul has become the largest dairy in India and one of the most known Indian corporation. Starting with a single plant and two villages, Amul has evolved to a network of more 3,18 million milk producers organized in more than 16,0000 village societies which collected 4,66 billion liters of Milk in 2012/2013. To understand the factors which led to this outstanding success, it is useful to understand the context in which it wasThe launched Context and the values the governance model is embedded in.

India became independent on August 1947 after 200 years under the British impe- rialism. The indian freedom fighters, inspired by Gandhian principles, opposed nonvio- International Conference on Entrepreneurship IEC 2014 - 153 - lence to the British superpower and violence domination and exploitation. These princi- plesStarting inspired in many 1889, Indian JND Tata,corporations, The Founder public of and Tata private Group as Stated: well.

“In a free enterprise, the community is not just another stakeholder, but it is, in fact, the very purpose of its existence”. This philosophy was incorporated in most of the companies of Tata group.

The Kaira District Cooperative Milk producers ( Amul)was established on December 14, 1946 as a response to exploitation of marginal and small milk producers in the city of Anand ( Kaira District) by traders and agents of dairies. At that times milk was collected by the only one dairy, Polson.

Producers had to travel long distance to sell their small quantity of milk to the only one dairy, Polson at Anand. The dairy and agents decided the price and the quantity to buy from the farmers. The producers can be left with unsold milk or had no other choice than sell it at any lowest price. Patel, the then Home minister advised them to form a cooperative and sell their milk directly. The Kaira District Cooperative was established and started collecting and processing milk from the district. Gandhian principles and values of cooperation and solidarity have been n implemented. Milk collection was de- centralized so that marginal producers who deliver 2 or liters of milk can sell their mill at the villages itself without travelling long distance. The village level cooperative was established to organize small and marginal producers in each village. born. The first modern dairy of the Kaira district was established at Anand. AMuL was

The early capacity of the new plant was 300, 000 pasteurized pounds of milk per day. It manufactured 10,000 pounds butter per day, 12,500 pounds of milk powder per day.

Today Amul has become the largest milk producing in the country and the most recognized brand. It started in a single plant with two villages; the dairy has evolved into a network of 3 million milk producers organized in 10,411 villages.

The sustainability and robustness of the model was tested after India opened the marked to international competition in 1990.

Not only large companies but the majority of Indian companies found a way to conduct their business profitably while making investments aimed at providing greater opportunities back to the community. The relations between businesses and communities - 154 - International Conference on Entrepreneurship IEC 2014 haveMethodology improved constantly. Data Collection

At Amul, a more in depth data collection was undertaken at different levels of the organization:

Data was collected from cross sectional stakeholders, managers, employees, villagers and farmers. In the first step a target sampling consisting in identifying a small number of people supposed to be main actors in the governance process: Namely, CEO, HR managers, head of the village, then two farmers representing two groups of milk suppliers: up to 10 liters and above 10 liters. We also interviewed the milk collector center responsible and 5 farmers queuing to sell their milk and randomly selected on their willingness to participateQuestions inSuch a group As: discussion on their relations with Amul.

How long have you been selling your milk to Amul? Do you see any difference with before? What could you say the main differences are? We spent around one hour with 5 volunteers’ farmers in a group discussion with the help a trans- lator from Gujarati.

Initial interviews might lead to further interviews to complete information and to get more insights: For example: when a farmer owing 1 cow or buffalo comes to the office to sell his 10 litters of collected milk he got a feedback on the quality of milk and the amount of money he deserves. To the question: How do you improve the quality of milk? The farmer mentions some training program organized by the company. Therefore, I decided to add the training department responsible to give further information about the training program and the follow up that allow farmers to put into practice what they haveData learned. Analysis

A thematic analysis was used for analyzing the data (Braun 2006). This analysis involves search of pattern and themes that explained better CSR and governance. Themes have been developed through iterative/reflexive examination of the raw data (Rice 99). it. Confidentiality of the interviewees has been preserved though there was no need for

Amul Case is an attempt to go further in rethinking the relations between corporations and the society. From both its structural organization and decision making process, AMUL is a tight collaboration between organization and the community. I interviewed managers at the main headquarters at Anand in the Gujarat state, and then interviewed International Conference on Entrepreneurship IEC 2014 - 155 - villagersThe Business from ten Modelvillages in the district that provide milk for Amul.

Amul Business model is based on some basic promises: - Promise to farmers assured a guaranteed purchase of their milk at a prepared price to maintain their minimum living power. - Promise to customers to get the highest quality products at reasonable price.

These two promises which evolve to strategic objectives were critical to Amul because of its role in reducing social and economic inequality while meeting increasing customers’ expectations for high quality and lower prices.

The guiding principles of the business model worth being mentioned: - Making a strong business proposition out of serving a large movement of small and marginal suppliers. - Bring a change in the lives of farmers. - Interface of dairy with rural power structure. - Cooperation between stakeholders in an effective network. - Designing an indigenous technology.

These principles are the implementation of basic Gandhian philosophy: Building strong and sustainable links between different stakeholders and the environment in an ethical manner that is, producing positive effects on the society as a whole.

Amul had to reduce cost to customer while increasing the returns to the suppliers. Different dimensions are highlighted to reach these conflicting objectives and make them harmonious1- Transformation and that we Leadership: can consider as the key factors of success and sustainability

This is the most important dimension. Leaders should lead from the values as inspired from the Gandhian philosophy and inculcate them in each staff members and managers. From the beginning, the cooperative members had made to understand the guiding principles of behaviors: - Competition is vital with state own and private corporations. - Cooperative should understand the imperative to get away from bureaucracy to siveness.achieve its objectives - The power of cooperation internally and externally over competition and aggres-

- The rights for improvement of human conditions. - Imperative of using the best and latest of technology as a tool to enhance value - 156 - International Conference on Entrepreneurship IEC 2014 2- Strategic Objectives and Vision: based effectiveness.

The strategy should focus on the long term objectives and a few priorities are high- other.lighted: - Simultaneously develop supplier and customers and never one at the cost of the

- Train continuously farmers so that they become more and more effective in their participation to decision making. - Continuously search for new products to meet customers’ needs, new processes and technology to keep cost under control. - Make sure that farmers and their families are improving their conditions of life.

Managers who are professionals are hired basically on their technical skills but most importantly on their values. They understand the strategic objectives and are embedded with3- the Customerand guiding values Farmers of the organization.Centered Organization Structure.

A brief description of the structure shows that : Amul is organized in a three tier structure: ( Table 1):

Primary villages are formed by milk producers and farmers. Any producer can become a member by buying a share and committing to sell milk to the society. Each village has a milk collector center where members take milk every day. Milk is tested for the quality with payment counterpart. Milk producers control the procurement and the investment of profit.

The district Union is owned by the dairy cooperatives, buy the milk, process it and provideThe state different cooperative services to the villagers such as veterinary care, training.

is responsible for marketing milk and products.

Professional managers are hired to serve the villagers who might replace them. They report monthly to State cooperative Body.

Hierarchy and bureaucracy are kept at minimal level. The model ensures a democratic decision making to make sure that both customers interests and farmers rights are considered and valued. The following dimensions explain the effectiveness of this organization; - Democratic decision making. - Network to integrate the complex needs and requirements of millions of farmers. International Conference on Entrepreneurship IEC 2014 - 157 - - Technology: The latest tools and methods are used to listen to the voice of farmers, customers and the environment such as B2C, ERP, automated milk collection, Data bases to make information available at the village level. - Innovation and technology

Latest technology is introduced so that better and new products are produced to meet the more and more demanding customers and to face the growing and aggressive competition both nationally and internationally. As an example the process technology to use buffalo milk and produce a variety of new products and store powder milk was successfully introduced. This helps also ensure that any quantity of milk can be pur- chased from farmers. the entire cooperative. GCMMF Federation at State level: Production and marketing for

UNIONS 12 Districts Societies Villages 10,411 Villages level Milk collection Centers

IndividualTable 1 : Organization Milk producers structure (farmers) of AMUL 2,12 million Farmers.

At the first level, each village Society elects a chairperson and secretary from farmers to manage the administration of the village where milk is collected.

At the next level, Nine (9) of the chairpersons are elected to form the Board of Direc- tors of the Union which elects its Chairperson.

All the chairpersons of the unions form the Board of Directors of the Federation at the State level (GCMMF). The federation is in charge of the entire production, performance and marketing. At this level the voice of production (all the farmers’ representatives) meets the voice of customers represented by professional managers. It is interested to note that sophisticated TQM tools such as Hoshin Kanri and the QFD are used to align cognitively these two voices and bring about the consensus.

The cognitive alignment is made easy by values shared by all AMUL members, managers and farmers as well. This organization and process are based on two main principles: - Managers and farmers learn to work together. - 158 - International Conference on Entrepreneurship IEC 2014 - Ensuring that the interest of farmers is kept at the top of the agenda.

Each individual organization at the union and Federation level is run by professionals managers who report to the Chairperson and the Board.

It is worth noting that all members of the Boards are farmers who pour milk each day. Most of them are illiterate, but attend to systematic training programs in order to increase their ability to run democratically and profitably their organization. The training programs include transformation leadership; quality management . Different factors explain this successful story: - Democratic organization. - Value and spiritually based leadership. - Empowered people. - Farmers own the organization and therefore decide which dimensions should be given the priority. - The ultimate purpose is to ensure a democratic decision process and meet the farmers’Interlocking expectations. Control Mechanism:

The purpose of the organization is to empower people through a democratic organization. Sarvodaya principles ( Gandhian principles) areCooperation embedded in andthe organization:Self-Reliance:

Cooperation: It is a fundamental dimension of Sarvodaya which focuses on the need to cooperate for growth and for the benefit of the society as a whole. Competition should not develop as the expense of cooperation. Develop oneself through training and by im- bibing the spirit of unity and cooperation among members.

Self-reliance: To retain its independence and non-bureaucratic functioning, Amul focuses on self-reliance; growth is a result of hard work, commitment and cooperation.

Collective ownership: Each farmer feels and behaves as the owner of the organization. Farmers have the freedom to work, to sell any quantity of milk and participate to decisionThe Effectiveness making through Of Theelections Model of Committees and Chairmen.

The effectiveness of the model is measured through different criteria. The priorities and the relevance should be consistent with the values and principles:

Performance and Customers’ Satisfaction International Conference on Entrepreneurship IEC 2014 - 159 - Performance is designed and measured in support to different principles - A policy of self-sufficiency is sought in order to meet the increasing demand. It is interesting to understand the relations between the government and Amul managers from the beginning of its operations: Dr Kurien, one of the founders and the first managing director who made sure that amul independence was insured all the time. He challenged the government in its policy of self-sufficiency: “Cut the imports by 25%, he asked the minister!! Yes, I will without discussion, meeting or files. He did.

I am making more butter; can you cut the imports by 50%? Yes, even by 100%. But make sure that the nation faces no shortage of butter. ( Dr Kurien). - People centered development: The purpose of any development and effectiveness is to improve people lives. Farmers and villages should be the first beneficiaries of the growth. - Preferences to swadeshi (Indigenous goods): Amul development is based on Gand- hian principles and values and therefore should produce and promote products that are consistent with local taste, culture and traditions. This does not mean that Amul is self-centered and closed to any international dimensions. Today Amul is exporting to more than 30 countries. Amul effectiveness is measured through different dimensions - Sales Turnover and productivity. - Innovation. Sales- Community Turnover development.

Starting with a single shared plan at Anand and two villages for milk procurement, the dairy cooperative movement in the state of Gujarat has evolved into a network of 2,4 million milk producers who are organized in 11,000 milk collection independent cooperative ( villages societies). These villages supply milk to 13 independent dairies cooperatives (Unions). Amul is one such union.

The annual turnover in 2012/2013 was 2, 54 billion US $. Turnover Growth Turnover growth has been sustained in the last 30 years. Table 2: sales turnover (1995-2013). 1000 US $. 1994/95 355 4995/1996 400 1996/1997 450 1997/1998 493 1998/199 500 1999/200 500 - 160 - International Conference on Entrepreneurship IEC 2014 2000/2001 500 2001/2002 575 2002/2003 616 2003/2004 672 2004/2005 850 2005/2006 1050 2006/2007 1325 2007/2008 1504 2008/2009 1700 2009/2010 2172 2010/2011 2500 2011/2012 2500 INNOVATION2012/2013 2540

New products to meet customers: A variety of products have been launched to meet customers changing and demanding expectations and increasing competition.

New processes to keep cost low: networking is the most important organizational feature that help and facilitate interactions between different levels and members of the organizations. The use of quality tools has been widely spread.

New processes and technology to increase productivity and quality of milk: To buy any quantity of milk the farmers would like to sell, Amul has to design new storage facilities able to store milk powder from buffalo milk. A process of making baby food out of milkTable powder 3: Product has been innovations devised.

Rank Market share

Butter/Ghee 85% 1 Milk powder 40% 1 Cheese 50% 1 Ice cream 24% 2 Sweet 50% 1 Chocolate drink 90% 1 Chocolate 10% 3

AMUL has been innovating continuously to diversify its products and meet its various customers segments such as kids, women, youth, calories conscious and health con- International Conference on Entrepreneurship IEC 2014 - 161 - scious.

Process innovation: Several initiatives have been undertaken to improve productivity through different forms of technology: milk.B2C and ERP to introduce the voice of customers into the organization. Automated Milk collection to help farmers check the quantity, quality, price, fat of

Data bases at all villages have been introduced to make information available to farmers to make their decisions. Training programs are made available for farmers to improve their abilities to manage the village and improve performance and quality: Training for transformation leadership,Community applied Hoshin Development: Kanri principles, care for cattle are a few examples.

This is the raison d`etre of AMUL and its most important objective. Community development is focused on farmers and villages, then on national development. Amul assess- es this development through three main dimensions - Profit sharing: Profit is distributed on equal part and helps farmers fulfill their family demand in education, health and dowry. - Empowerment and increase level of literacy and education of farmers to make them participate more effectively to decision making and organizational performance. - Economic and social development of villages through infrastructure development and life conditions such as sanitation, electricity, cleanness, drinking water.

Farmers’ life conditions improved tremendously in different areas. Most importantly, farmers decide themselves which areas should be developed in priority. Decisions are made by a management committee elected by the farmers at the village level. This is an exampleTable of 4: contributions Contributions as decidedtowards by communityone village visited development at Kaira district. (2009). In indian Roupies. .

1 - Cattle health 130561 1- Education 98,306. 2- Milk product enhancement measures. 52449. 3- Children care ( school material). 36204. 4- Gram Panchayat ( village infrastructure). 19527. 5- Water work ( providing drinking water..). 14293. 6- Medical trust 5572 7- Hospital cleanness 5307. 8- Flood relief fund 4501. 9- Construction of cattle mangers 3920. - 162 - International Conference on Entrepreneurship IEC 2014 Every year, farmers and families are surveyed to suggest which areas should be focused on. The improvements are noticeable when comparing villages included in the cooperative and nearby villages. This is why the number of members has been increasing steadily these last ten years.

In the Amul case, the achievements are easier to assess by comparing the villages involved with Amul and the neighboring villages which are not: Infrastructure, cleanli- ness, organization of sanitation.

Farmers have increased their income and improved their social conditions and can voice their expectations and needs. Their skills for improving the quality of milk have developedConcluding so their Remarks income had.

We examined Social Entrepreneurship from an Indian case perspective. We have shown how SE can help solving social issues in an effective and sustainable manner. To be able to combine economic and social value, SE needs to design and implement a governance model in which different stakeholders are involved and participate actively society.in the decision making process. This model helps bridge the gap between diverse actors and most importantly changes radically the relations between the enterprise and the

The Amul case highlights that a new governance model that involve villagers and farmers is required to reduce inequality and social divide. Therefore one of the most important issues is that: “governance has less to do with how design and implement an effective business model and benefit to stakeholders than how impoverish community’s actors can voice their expectations and their rights”

The paper contributes to our understanding of social entrepreneurship from another perspective than the western approach which is dominating research and practices. So- cial entrepreneurship is not just a combination of economic and social value, or a shared value, per se, but another governance model which includes stakeholders in the decision making process .Based on the Indian experience, the paper shows that this model can be the transitional vehicle to a renewed approach of the relations between corporations and the society as a whole.

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- 166 - International Conference on Entrepreneurship IEC 2014 INOVATION AND TECHONOLOGY DEVELOPMENT FOR ALBANIAN SME-VE Mimoza ZENELİ, ( PhD Candidate )

[email protected] Ministry of Energy and Industry , Albania Almarin FRAKULLI ( PhD candidate) Albania University , Tirane , Albania [email protected]

ABSTRACT

Albania continues to lag behind other countries in terms of poor performance in innovation. The enterprises, still finance technological developments mainly by its resources, which are limited too. Also we have to emphasize that the lack of business incubator and clusters is clearly visible. Implementation of proactive policies to support increased capacity for technology companies, in particular for SMEs remains a challenge for the next period 2013-2020. Among the main methods used in Albania for innovation are: Acquisition of machinery and equipment and recruitment of qualified personnel.

Main factors that affect the capacity of firms to absorb new technology are: investment climate in which they operate and the level of skills and technological capacities of the firm.

In Albania, only 10% of all surveyed firms provide formal training of their employees, compared with 79% of Slovak firms included in the study in 2005 and 48% of firms in Serbia (World Bank, 2009).

Considering the importance of increasing the ability of Albanian businesses to develop, use, adapt and commercialize the technology, this paper will present the current state of innovation and the technology development in Albania

By analyzing the efficiency of structures and instruments supporting innovation and technology through practices of developed countries we will recommend tools and efficient structures that will enable the development of innovation and technology for Alba- nia SME-s highlighting that the improvement of innovation and technology will increase the competitiveness of SME-s. International Conference on Entrepreneurship IEC 2014 - 167 - Key words:

1 A General Inovation, View on Technology techonology, And SME, Innovation qualified personel.In Albania Report of the International Telecommunication Union, ITU, leaves Albania in the same position like a year ago, although IDI index, which measures the development of technologies, is improved. So Albania is the 80th in the world for the development and use of information and communication technologies. (Measuring the Information Soci- etyDespite 2011, 2012) numerous efforts in recent years, Albania remains in fact the last country in

Europe in terms of the development of communication and information technologies. While we have better positioning in the sub-index of people skills to use the technologies, where we rank the 57th in the world and leave behind some of the countries with similar level of economic development, such as Macedonia, Bosnia or Moldova. This shows that Albanians have good flair and skill in the use of technology, but the problem is mainly to the limited access to them. (Jahic,& Edin 2012)

Considering the possibility of increasing the capacity of Albanian businesses to develop, use, adapt and commercialize the technology, in this paper we present the current state of innovation and growth of technology in Albania. By analyzing the efficiency of structures and instruments supporting innovation and technology through practices of developing countries and other country (Josimovsky, &Sasho, 2012), would recommend efficient instruments and structures that will enable the development of innovation and technology for SMEs given that innovation and improvement of technology will increase the competitiveness of SMEs ‘s. (Oxford University Press, 2001).

Science, technology and innovation defined as fundamental factors to a knowledge-oriented economy are important in all stages of development, regardless of the format and its various ways. Capacity to develop basic research and applied research; to adopt and implement technologies in the economic structure, and to spread them in society, to creatively develop new products and services, using technology (innovation in products and services), as well as through changes in marketing, design and organization (technological innovation), are fundamental to national competitiveness.( Bengt- Åke Lundvall, 1992).

European Union (EU), which aspires to join Albania, has set clear objectives related to research and innovation as part of the “Lisbon Strategy to make the EU the most competitive economy in the world”. Albania, as well as other candidate countries and the West- ern Balkan associate, left behind in these developments because of the need to focus on finding “Foundation” for growth (education, legal frameworks, poverty alleviation, etc..) - 168 - International Conference on Entrepreneurship IEC 2014 ,( UNESCO ROSTE, 2005, )

However, the time has come to invest more in the creation, dissemination and application of knowledge, if Albania is to meet its long term goals of development. The need for a strategy of science, technology and innovation in Albania is already accepted by a wider group of decision-makers and is put on the agenda of the current policy through the process of developing this strategy.

At the present, it is difficult to make precise statements about the level of investment in favors of STI the performance of the public, academic or business organizations performing research or about the functioning of the ‘innovation’ system in general. R&D and innovation statistics are not collected currently to international (OECD, Eurostat or UNESCO) standards. (UNESCO-BRESCE, 2007)

Albania is a small country in terms of population, with relatively low levels of income even after two decades of rapid growth. While there is significant progress in restructuring the economy and increasing productivity, competitiveness is still low and based es.more on cost factors (work), rather than a high added value. Albania currently has about 430 large businesses, 1580 medium businesses and about 85 thousand small business-

Sector composition is heavily skewed towards low technology activities (employment in agriculture remains relatively high) and exports are low in absolute and relative terms. To facilitate structural adjustments towards more knowledge and added value is essential to effective SHTI policy, to complement other measures that support the mod- ernization2. Current of the Situation economy.( and Friedrich Development Ebert ,2012of SME ) Sector

The SME sector has a substantial contribution to economic growth and employment. SME contribution to GDP is more than 73% and more than 71% in the employment sector. Referring to INSTAT data a number of active enterprises in late 2011 was about 106,503. Compared with active enterprises in 2005 has increased by 65%. According to the structure of active enterprises in 2011 is observed that SMEs mostly dominated by micro-enterprises with 1 to 9 employees, who constitute about 95.2% of the total number of active enterprises. (INSTAT, 2013)

International Conference on Entrepreneurship IEC 2014 - 169 - Grafiku 3. SME-të sipas madhësisë Grafiku 4. SME-të sipas sektorëve

Distribution of active enterprises by economic sector is: trade 43.8%, 16.1% hotels & restaurants, transport & communications 10.2%, industry 9.8%, construction 4.3%, agriculture and fishing 1.8% while other services 14.1% occupied. It is worth mention- ing that trade, hotels, bars and restaurants are dominated by domestic enterprises with a slight shift in recent years towards international trade, especially during the summer as a result of increased tourism in the country. Over 50% of active enterprises operating in Tirana and Durres. In the prefecture of Elbasan, Korca and Dibra is noticed only a slight increase of enterpreneurship, leaving the situation in the almost same state as a year ago.Predominant in numbers are activities in the field of trade and hospitality sector - restaurants with 60%. 43.8% of the entrepreneurship are in the area of trade with a slight decrease of 0.6% compared to 2010. The producers account for only 16%. The dominanceGrafiku 5.of Shpërndarjaservice providers e SME-ve is a commonsipas rretheve phenomenon in all prefectures.

Compared to last year throughput for 2011 incresed by 8%. This increase of 32.3% came from enterprises in the construction field. Compared to 2010, manufacturers of goods increased by 6.3%, while service providers, compared with the same year in- - 170 - International Conference on Entrepreneurship IEC 2014 creased3. Innovation by 5.7%. (METE,and Technology 2007) for SME’s Development

Albania has registered a rapid growth in the number of entrepreneurship, a fact which indicates a high degree of desire for entrepreneurship in the country. The program for the development of innovation and technology transfer to SMEs is designed to support the IPA 2007 project “Supporting SMEs to become more competitive in the European market.” This program introduces a new policy in line with EU policy. To concretize the implementation of this program, DCM No. 104, dated 02.09.2011 was adopted Strategic Program for Innovation and Technology Development for SMEs. Among the main methods used in Bangladesh for innovation are: Purchase of machinery and equipment and recruitment of qualified personnel.

The main factors that influence the capacity of firms to absorb new technology are: the investment climate in which they operate and the level of skills and technological capacity in firms. In Bangladesh only 10% of all observed firms provide formal training to their employees, compared with 79% of Slovak firms included in the study in 2005 and3.1 48% Development of firms in Serbia of Innovation (World Bank, and 2009). Technology for SMEs

Albania continues to lag behind other countries in terms of the poor performance in innovation. Technological developments mainly finance enterprises from internal resources, which are limited. (Barros, J. 2011) Feels the lack of business incubators and clusters, Albania is making efforts to become part of the European Network of SMEs, EEN. The implementation of proactive policies to support the capacity of the technology to enterprises,4. Conclusions especially and recommendations SMEs remains a challenge for the next period 2013-2020.

• According to the poll, four main barriers to innovation are perceived to be: 1) inadequate government regulation, 2) high costs of innovation 3), the lack of of external financing, and 4) the lack of internal financing . On the other hand, participants in the focus groups highlighted access to finance, fiscal policy, weak institutional framework (including corruption) and education. Higher cost of innovation, which is perceived as a barrier by 58% can also be linked to lack of adequate resources to cover these costs

• Companies generally “devote scarce resources to the types of innovation that are most likely to bring benefits secured in a relatively short period of time. Also think that larger companies tend to have more knowledge and be more aware of the process of innovation and better access to resources.

International Conference on Entrepreneurship IEC 2014 - 171 - • Small businesses by being economically weak as well as are “eager” to immediate income approach towards innovation online viewing of dangerous and costly, are often discouraged innovations.

• Given their financial constraints, companies tend to use information sources that are free, or combined with other activities oriented on sale, such as fairs. Links to companies within the innovation system and their ability to access more complex knowledge resources are underdeveloped.

• Human resources are a key component in the innovation process. Educated and creative people are one of the most important prerequisites for the development of innovation. This suggests that the development of human resources will have to be a long-term priority in any strategy of innovation

• Raise awareness of SMEs on the benefits of innovation. Information and events to learn about the benefits of innovation, exchange of good practices in innovation management

• Removal of young and educated people is a major cause for concern that should be addressed through appropriate policy measures, some of which can be applied in the context of innovation policy, such as scientific diaspora networks and business.

• Companies mostly fail to see their internal weaknesses and barriers to innovation and financial constraints and government see as the main obstacles to innovation. Their innovation.investment in human resources is a potential force, which should enable the future development of innovation in companies. Encouraging private investment in research and REFERENCES • Lundvall, B-Å, (1992), Sistemet Kombëtare të Inovacionit: drejt një teorie të Inovacionit dhe mësimit interaktiv, Botimet Pinter, Londër.

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- 172 - International Conference on Entrepreneurship IEC 2014 • Oxford University Press (2001). The Globalising Learning Economy: Trendet kryesore So- cio-ekonomike dhe Politika Evropiane e Inovacioni.

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International Conference on Entrepreneurship IEC 2014 - 173 - - 174 - International Conference on Entrepreneurship IEC 2014 ACEHNESE IMMIGRANTS’ SMALL BUSINESSES IN MALAYSIA: CONSTRAINTS AND STRATEGIES FOR SURVIVAL Jullimursyida GANTO

[email protected] / +62811679833 University of Malikussaleh, Aceh – Indonesia Amru USMAN

[email protected] University of Malikussaleh, Aceh – Indonesia Mariyudi

[email protected] University of Malikussaleh, Aceh – Indonesia

ABSTRACT

Some immigrants possess high motivation and are self determined to dissolve economic disadvantages. There are also evidences that immigrants are trapped in the feeling of alienation and loneliness due to socioeconomic degradations. Migration entails set of engulfing life events (losses, change, conflict, and demand). There are over 500,000 contract workers from Indonesia in Malaysia, another half a million Indone- sians are estimated to be working in the country illegally. This study was conducted with the express attention of adding to the existing theory of entrepreneurship literature relating to immigrant entrepreneurship, especially Acehnese immigrant. It attempt to better understanding the motivation of Acehnese immigrant entrepreneurs to start business in Malaysia and the success factors contributing to their business by adopting the grounded theory approach. The specific objectives in this research are to investigate the constraints confronting Acehnese immigrant entrepreneurs in Malaysia, to find the laysia.strategies Acehnese immigrant entrepreneurs adopt to overcome the constraints they face and to indentified the success factors of Acehnese immigrant entrepreneurs in Ma-

The qualitative method was utilized to this study. The data get from the success Aceh- nese immigrant entrepreneurs in Malaysia. The focus of data collection in this study was Acehnese immigrants in Malaysia who have been operating their businesses for three or more years. In this study, 5 Acehnese immigrants who operate their businesses in Malaysia were selected from different parts of the city of Malaysia for the study. The interview was run for 1-2 hours for each participant. International Conference on Entrepreneurship IEC 2014 - 175 - This study found that past entrepreneurs experience in a related field has been instrumental in engendering the success of the business embarked by Acehnese immigrant entrepreneurs. Acehnese immigrant entrepreneurs can adapt local culture to build colonies. And due to similarity in culture, religion, and face, makes positive impact to Acehnese immigrant entrepreneurs. Motivation of the Acehnese immigrant entrepreneurs to do business in Malaysia due to economic depression, see the opportunity in the business, encouraged by friend, desire to generate more income and also inspired ofby businesses.friends’ success. Entrepreneurs’ success factors were work experience and personal characteristic, while enterprise successes are measured by survivability and expansion Key words :

immigrant entrepreneurs, small business, strategies for survival, grounded theory,INTRODUCTION motivation factors

Neufeldt (1988) defines an entrepreneur as ‘a person who organizes and manages a business undertaking, assuming the risk for the sake of the profit’. Bahaee and Prasad (1992) argued that not only an individual, but a small group, a medium sized institution of higher learning, a large commercial organization, a city-state, or even a nation-state such as the Republic of Ireland could be an entrepreneur. The essence of entrepreneurship, they posit, lies in taking an initiative to engage in an enterprise, be it business or charity or self-promotion.

The important role of small businesses play as the basic ingredients of employment creation, poverty reduction, innovation, diversification and growth of the economies of nations cannot be underestimated. Small businesses are so vital to the development of nations, especially the developing ones that when small businesses fail, they exert huge negative impact on the economies of nations (Okpara & Wynn, 2007). Researchers (Den- nis, Phillips & Starr, 1994; Tse & Soufani, 2003; Thurik & Wennekers, 2004; Gray, Foster & Howard, 2006; Edmiston, 2007) agree small businesses play a very important role in the development of every economy. However, whether small businesses are more innovative than large organizations is still debatable (Dennis, Phillips & Starr, 1994; Edmis- ton, 2007).

The importance of small and large businesses in job creation, income generation and economic growth cannot be underrated but entrepreneurs encounter some challenges as they operate their businesses. For instance, Coleman (2008) has asserted that individuals who operate successful businesses are generally wealthier than people who are employed by owners of businesses. Small businesses are very often associated with entrepreneurship and entrepreneurship creates economic growth in several ways (Coulter, - 176 - International Conference on Entrepreneurship IEC 2014 2003). Entrepreneurs may create and enter markets with new goods and services (Acs & Audretsch, 1990; Acs & Audretsch, 2003). Also, entrepreneurs may enter markets with new and better products. Introducing new and better products to markets by entrepreneurs may increase the choices that consumers can make and increase competition in the markets. Thus, entrepreneurship may reduce the costs of goods and services and increase the purchasing power of consumers. Therefore, entrepreneurs are regarded as “role models to be copied and admired for their innovation, business acumen, risk-taking and daring sense of purpose” (Beaver, 2002).

Blanchflower and Oswald (1998) and King, Barber, and Morgenthaler (2007) have asserted that entrepreneurs compare the incomes they can earn as self-employed individuals to the income they earn as employees, and decide whether or not they want to undertake their own business ventures. The decision of an individual to become an entrepreneur is positively influenced by the individual’s managerial skills and negatively influenced by the income an individual expects from an employer (Goedhuys & Sleuwaegen, 2000). Irrespective of the theoretical models which support the creation of new businesses, entrepreneurship is a noteworthy activity in job creation and economic growth in every country. For instance, Bednarzik (2000) has stated that in every country, entrepreneurs create new establishments and expand existing ones. However, as entrepreneurs establish new businesses and expand existing ones, some existing businesses dissolvePROBLEM operations. STATEMENT

According to Yusuf (2008), some immigrants possess high motivation and are self determined to dissolve economic disadvantages. There are also evidences that immigrants are trapped in the feeling of alienation and loneliness due to socioeconomic degradations. Migration entails set of engulfing life events (losses, change, conflict, and demand). Previous researches about occupational status of Indonesian immigrant demonstrate that they face desperate occupational conditions. However, few studies have been conducted on the nature of occupational among Indonesian immigrants in Malaysia.

There are over 500,000 contract workers from Indonesia in Malaysia, another half a million Indonesians are estimated to be working in the country illegally. The flow of Indonesian immigrants to Malaysia has been noticed since as early as 1960’s and 1970’s due to the open policy adopted by Malaysia to meet its acute shortage of labor force in its multi-sectoral developmental activities. However, in the mid 1980’s, it changes from a steady stream to a flood. The major cause for the change was the New Economic Policy (NEP) adopted by the Malaysian Parliament and rapid industrialization (Yusuf, 2008).

Acehnese comprise the largest caseload of asylum seekers and refugees in Malaysia. International Conference on Entrepreneurship IEC 2014 - 177 - An understanding of the ethnic and religious insurgency confronted by the Indonesian government since the founding of the independent state of Indonesia, particularly Aceh, is crucial in reviewing the plight of the Acehnese. Aceh lies on the northern tip of the island of Sumatra, just west of Malaysia across the Malacca Strait. In 1959 Aceh was given the status of a special territory, but this did not satisfy the Acehnese. For them, the Java- nese-dominated central government had replaced the Dutch as colonial rulers and had to be resisted. The war with Jakarta began in 1976 when Gerakan Aceh Merdeka-GAM (Free Aceh Movement) was established as an armed resistance group. Building on a history of trade and travel across the Malacca Strait, many Acehnese fled to Malaysia and GAM maintained an operational headquarters for a number of years beginning in the 1980s. Many more fled to Malaysia during the height of counter-insurgency operations in 1990-3 (Kaur, 2007).

Acehnese are now living through the mastery of luxury retail shops and hair scissors around niche, especially in housing estates and villages in Malaysia. Although initially only ride-owned local shops, they are adapt local culture to build colonies through the retail business and eventually forced local paper mats because it can not compete with immigrants. The existence of Acehnese, which was originally concentrated around the capital, is now existence in the whole country up to remote areas in the East Coast, North and South Peninsula. They are supported by earlier emigrated to Malaysia (Abdullah, 2009). Harian Metro reports most grocery stores of several areas in Gombak, especially in Sungai Tua, Kampung Changkat, Kamariah Park, Batu 5 Gombak and surrounding Administrator, Ampang and Kampung Cheras Baru, have dominated by the Acehnese community (Abdullah, 2009).

Acehnese entrepreneurs not only succeeded in widening the business empire in the great competition, but also provide great slap to the dealer from among Chinese and Indian. They proceeds sale between RM80 - RM100 thousand a month (Fudzail, 2009).

It is believed that Acehnese helps each other for their success. Shops that have small spaces given to small traders from Aceh and the results, the small traders grow in other areas. There are no supports from the government and banks. Results from the hard workRESEARCH and business QUESTION strategies can be as a guide to the Malay traders (Fudzail, 2009).

This study was designed to identify the motivation of Acehnese immigrant entrepreneurs to start business, and what they consider are the most important things they need to operate their businesses profitably. In order to accomplish this purpose, the following research questions were addressed in this study:

- 178 - International Conference on Entrepreneurship IEC 2014 − What are the motivation confronting Acehnese immigrant entrepreneurs in Malay- sia to start business? − What factors do Acehnese immigrant entrepreneurs regard as the most important for RESEARCHthe success OBJECTIVESof businesses in Malaysia?

MalaysiaThe objectives to start businesses. of this research are: 1. To investigate the motivation confronting Acehnese immigrants entrepreneurs in for the success of their business in Malaysia. 2. To investigate Acehnese immigrants’ entrepreneurs regard as the most important LITERATURE REVIEW SELF EMPLOYMENT

Researchers (Evans & Leighton, 1989; Borjas & Bronars, 1989; Fairlie & Meyer, 1996) have conducted many studies on self-employment. Ruiz-Vargas (2000) has noted that individuals who are self-employed have the wherewithal with which to establish their businesses. Also, Quinn (1997), and Borjas and Bronars (1989) have stated that individuals who have college education are more likely to establish their businesses than those who have no college education. Beaver (2002) has stated that describing small businesses is much easier than defining small businesses and that there is no generally accepted definition of small businesses. In every country, there are certain criteria, such as the “number of employees, sales volume, and value of assert” which are used to classify businesses (Longenecker, Moore, Petty & Palich, 2006) How businesses are classified in any country, however, is a reflection of “the nature and composition of that country’s economy” (Beaver, 2002). The definitions of small businesses also may reflect sectors of the economy in which the business operates. For instance, in the office machinery manufacturing industry in the United States, a firm is deemed a small enterprise when it employs less than 1000 people. However, in the confectionary wholesale industry, an enterprise that employs less than 100 people is regarded as a small business (Coulter, 2003). Irrespective of how small businesses are defined, they play a pivotal role in job creationIMMIGRANTS and economic AND developmentSMALL BUSINESSES in every country (Lawrence, 2008).

Beaver (2002) has stated that describing small businesses is much easier than defining small businesses and that there is no generally accepted definition of small businesses. In every country, there are certain criteria, such as the “number of employees, sales volume, and value of assert” which are used to classify businesses (Longenecker, Moore, Petty & Palich, 2006). How businesses are classified in any country, however, is a reflection of “the nature and composition of that country’s economy” (Beaver, 2002). International Conference on Entrepreneurship IEC 2014 - 179 - For example, the European Commission has defined small and medium businesses as follows: Micro-businesses are very small firms which employ less than 10 people. Small businesses employ between 10 and 99 people. Medium businesses employ between 100 and 499 (Beaver, 2002). Irrespective of how small businesses are defined, they play a pivotal role in job creation and economic development in every country (Lawrence, 2008). Copious research has been conducted on small businesses owned by immigrants in the United States (Abor & Adjasi, 2007; Ibrahim, Angelidis & Parsa, 2008) but much of the research is centered on businesses owned by immigrants from China, Korea, Ar- abic-speaking countries, and Spanish-speaking countries from central and southern America. Using phenomenological qualitative research methodology, Abrhiem (2005) for instance, studied Arab Americans’ entrepreneurial success in Michigan. He concluded that the factors that have led to the success of Arab American entrepreneurs include the motivation to achieve success, cordial customer services, social networking, and proper planning.

Amankwah (2004) has studied the creation and operation of Ghanaian immigrant small businesses in Columbus, Ohio. He concluded that Ghanaian immigrant small businesses in Columbus, Ohio, are embedded in neighborhoods where Ghanaian immigrants live (ethnic enclaves). Again, Amankwah (2004) noted that Ghanaian entrepreneurs in Columbus establish not only their businesses, but also social networks by joining various associations. Joining different associations enables Ghanaian entrepreneurs to create customer loyalty and gather information about the Ghanaian community which may not be reported by the media. Therefore, Amankwah (2004) concluded that embeddedness, social networking and acculturation are factors, which influence the success of Ghanaian immigrant entrepreneurship in Columbus, Ohio.

Asian-owned businesses have been studied by many researchers (Bates, 1999; Small- bone, Bertotti & Ekanem, 2005; Zhang & Yang, 2006; Li & Matlay, 2006). Bates (1999) for example, studied self-employed immigrants from Asia who were either pushed or pulled into operating small businesses in the United States. Bates (1999) concluded in his study “self-employment is often a form of underemployment among Asian immigrants” because the incomes made by small business owners are meager. All the same, some Asian immigrants take up small businesses because most of them have difficulty getting paid-jobs and therefore perceive self-employment as the only alternative to job- lessness. Bates (1999) has concluded that very often when Asians who have good education get jobs that suit their skills, they abandon their small businesses to take up those jobsENTREPRENEURSHIP for better remuneration. AND MOTIVATION

Literature on entrepreneurship has acknowledged the importance of motivation as - 180 - International Conference on Entrepreneurship IEC 2014 among the key factors for one to start his/her own business. Motivation refers to psychological traits. Entrepreneurs are said to be individuals who possess personal characteristics such as desire to seek achievements, ability to take risk, having certain leadership styles and have undergone a process of socialization related to business (Brockhaus & horowitz, 1986) although the degree in which these traits motivate entrepreneurs may vary from one society to another. Motivation also refers to “opportunity structure, an “objective” structure of economic opportunity and a structure of differential advantage in the capacity of the system’s participants to perceive and act upon such opportunities”(Glade, 1967:251 as cited in Thorton, 2009). This is turn points to the social context that turns one into an entrepreneur, such as the influence and roles of markets and firms on the individuals who become entrepreneurs (Thorton, 2009).

Gilad and Levine (1986) proposed two closely-related explanations of entrepreneurial motivation, the “push” theory and the “pull” theory. The “push” theory argues that individuals are pushed into entrepreneurship by negative external forces, such as job dissatisfaction, difficulty finding employment, insufficient salary, or inflexible work schedule. The “pull” theory contends that individuals are attracted into entrepreneurial activities seeking independence, self-fulfillment, wealth, and other desirable outcomes. Research (Keeble et al., 1992; Orhan and Scott, 2001) indicates that individuals become entrepreneursENTREPRENEURSHIP primarily due AND to “pull”CONSTRAINTS factors, rather than “push” factors.

Entrepreneurship entails enormous risks but the desire to be self-employed lures many individuals and groups of people in the United States into establishing their own businesses (Anetomang, 2009). The desire of people to take the risk to establish their own enterprises is buoyed by the vision of becoming their own boss, making more money and attaining social recognition (Kim, Aldrich & Keister, 2006). Hence, the constraints faced by entrepreneurs, however, often force them out of business or prevent them from realizing their dreams for establishing their businesses (Anetomang, 2009). Some of the constraints which nascent entrepreneurs face in the United States include lack of start- up capital, education and work experience (Kim, Aldrich & Keiser, 2006).

Kim, Aldrich and Keiser (2006) have emphasized that the availability of financial resources, the knowledge an individual has in the business he or she wants to invest in, and the level of education the individual has often determine the individual’s success or failure in a business venture. Fairlie (2004) has concluded that there has been a significant increase in the number of self-employed Asian-Americans, Hispanic and African Americans in the past 15 years. However, Levenson and Willard (2000), and Hurst and Lusardi (2004) have argued that lack of start-up capital is a factor that may prevent burgeoning entrepreneurs from starting their own businesses. But, in the United States, International Conference on Entrepreneurship IEC 2014 - 181 - start-up capital is not a deterrent to small business establishment. Most entrepreneurs who establish small businesses start with little initial capital and even those who do not have start-up capital can get loans from financial institutions. Therefore, in the United States,STRATEGIES wealth is notAND a majorSMALL constraint BUSINESSES in starting an enterprise (Hurt & Lusardi, 2004).

Thompson and Strickland (1998) have posited “A company’s strategy is the “game plan” management has for positioning the company in its chosen market arena, compet- ing successfully, pleasing customers, and achieving good business performance”. Thus, the strategy of any organization (small or large) consists of competitive measures and approaches, which business owners and managers employ to operate their enterprises. Furthermore, Robbins and Coulter (2004) have defined strategic management as “that set of managerial decisions and actions that determines the long-run performance of an organization”. How well organizations perform depends on their strategies and how effectively they implement those strategies. Moreover, Bateman and Snell (2004) have stated that strategic planning “involves making decisions about the organization’s long- term goals and strategies”. Hence, strategic planning involves looking far into the future to achieve specific goals for an organization. The literature reviewed shows that strategic management hinges on strategic planning. However, strategic management of businesses asis oftenit is to linked small businesses.to large and established organizations (Beaver, 2002; Certo, 2003). But knowing the direction at which a business is going is as important to large

In spite of the important roles small businesses play in every country in job creation, innovation and economic growth, the significance of strategic management has not yet been felt by many small business owners (Beaver, 2002; Meers & Robertson, 2007). Bea- ver (2002) has argued that small businesses sometimes fail because of inadequate accounting procedures and the inability of business owners to manage growth rate due to lack of proper management measures. He has emphasized that many small businesses fail because there: appears to be an overall lack of strategic management skills and abilities beginning with an inability to articulate a strategy to reach the customers(s) and ending with a failure to develop an adequate system of performance measurement and control. Strategic business planning has been associated with performance in small businesses in many dimensions (Gibson & Cassar, 2005; Meers & Robertson, 2007). For instance, Smith (1998) has determined that firms that use strategic planning tools will surely perform better than those which simply follow their cognitive directions. Busi- nesses, both small and large often face turbulent times owing to changes in taste, advancement in technology, emerging competitors and economic restructuring. However, some researchers argue that it is imperative for every business owner to make good use of planning tools (Al Ghamdi, 2005). - 182 - International Conference on Entrepreneurship IEC 2014 METHODOLOGY

The approach taken by this research is tailored to respond to the research questions, it utilizes a qualitative method of data collection, analysis and interpretation of a topic. Morse and Richards (2002) identified three key methods of qualitative research; phe- nomenology, ethnography and grounded theory. This study used grounded theory as suggested by Merriam and Simpson (2000) who referred to grounded theory as particularly suited to examine a phenomenon about which little is known. Moreover, as pointed out by Strauss and Corbin (1994), grounded theory is also capable of generating new and exciting ideas from an otherwise already exhaustively investigated subject. Ground- ed theory provides a useful tool to organize, manage and conceptualize data. Starting with the researcher’s vision and ideas of possible routes of inquiry, the techniques and proceduresFor the purpose provide theof this means study, of accomplishing. the following terms have these meanings: to the Malaysia. Acehnese Immigrants. Residents of the Malaysia born in Aceh but have immigrated

ration.Entrepreneurs. The founder or owner of profit oriented corporation who is actively involved in the organization, management, and decision making functions of the corpo- DATA COLLECTION

The focus of data collection in this study was Acehnese immigrants in Malaysia who have been operating their businesses for three or more years. In qualitative research, the researcher carefully selects a sample of participants whose number is between 5 and 25 (Creswell, 1998; Creswell, 2003; Leedy & Ormrod, 2005) to be interviewed. Rudestam and Newton (2001) have stated that “most phenomenological studies engage a relatively small number of participants, 10 might be appropriate for a relatively long time, at samplesleast 2 hours.” are of littleIn this use study, in a qualitative 7 Acehnese research. immigrants Rather, who the operate emphasis their in on businesses purposeful, in Malaysia were selected from different parts of the city of Malaysia for the study. Random or theoretical sampling, in which the researcher seeks out the informants that can provide the richest and most detailed data on the subject in question (Patton, 2002; Sied- man, 1991). Since the focus is on collecting detailed, in depth information, the number of respondents is kept small. The main criterion for judging sample size is that of saturation of information. When the researcher begins to hear the same theme being reported over and over again no longer learns anything new from participants, it is evident that a category is saturated (Glaser and Strauss, 1967), and thus data collection is complete.

The interviews represent the respondents’ opinions, ideas and perceptions of the fol- International Conference on Entrepreneurship IEC 2014 - 183 - lowing questions to answer the research questions in the study such as: 1. Motivations – why did they start? 2. Constraints - the constraints they face in operating and develop the businesses RESPONDENTS’3. Success factors PROFILE

The Acehnese’s entrepreneurs were approached directly by researcher to participate in in-depth face to face interviews. The respondents were chosen based on categorized as successful entrepreneurs in Malaysia. Seven semi structure in-depth interviews were successfully conducted between 50 minutes and, 1 hour and 15 minutes, at their own convenience. Also, interviews with participants were video-recorded. Participants did more of the talking, which was interjected occasionally with questions from the re- tablesearcher. 1. To ensure the privacy of the participants in this study, all recorded interviews were kept confidential. A code name was established for each respondent, as shown in No Name Code Name Start-up Year Type of Business 1. Retail shop 2. Retail shop H. Harun Ali Respondent 1 1989 Retail shop 4. H. Mansur Usman Respondent 2 1986 Retail shop 5.3. H. Mansur Kasim Respondent 3 19951987 Retail shop 6. H. Muhammad Isa Respondent 4 19901987 Retail shop 7. Musri Abdullah Respondent 5 Retail shop H. Said Iskandar Respondent 6 VALIDITYAnwar OF BinTHE Abdullah STUDY Respondent 7 1989

Creswell (2003) has concluded that validity is very important in qualitative research. To meet the test of credibility, Creswell (2003) has suggested eight ways in which researchers can check the accuracy of information provided by respondents such as tri- angulation and member-checking. The validity of this study was ensured by recording vivid descriptions of the information gathered from participants and by going back to the participants to show them the data they had given earlier (member-checking), after the data had been transcribed and summarized. And participants approved the authen- ticityRESULTS of the data AND collected DISCUSSION from them.

From the in-depth interview with seven Acehnese’s immigrant entrepreneurs, the three main sections will be discusses as motivation to do business, entrepreneurs’ factors, and enterprise success as below.

- 184 - International Conference on Entrepreneurship IEC 2014 MOTIVATION FACTORS

As the purpose of the study to find out of motivation of Acehnese immigrant entrepreneurs, thus the discussion of motivation to do business is need to be investigating from the interview. Respondents motivation to start business was due to unemployed economic depression, see the opportunity in the business, encouraged by a friend, desire to generate more income, and also inspired by friends’ success, supported by earlier immigratedExample to respondent Malaysia. 1:

“I went to Malaysia because the condition in Aceh was not support me to start new business. The condition was not conducive in the year of 80- in Aceh. First time in Ma- laysia, I was worked as a contract worker. Then, I had obsession to have own business because I see the opportunity in business in Penang. Then after 2 years and have some more saving, I were conducted own convenience store”.

Most of Acehnese immigrant entrepreneurs in Malaysia was motivated to come to Malaysia due to supported by earlier Acehnese immigrated in Malaysia (indicated as factorsRespondent mentioned 2: more by respondent, 7 of 7 respondent).

“First time in Malaysia, I stayed with my friend who had been in Ma- laysiaRespondent for many years… 5: Now, I have workers also from Aceh”.

“After graduated from high school in Lhokseumawe, Aceh, I went to Kuala Lumpur in 1988…. I chose KL because my uncle was permanent residence in KL. At that time, I worked as a worker at friends’ store. Then, I had a target to start own busi- nessRespondent someday. Alhamdulillah, 4: my target was come true in the year of 1990.”

“I choose Malaysia because it is near to Aceh and my friend is permanent resident in Malaysia”. Respondent 2: “First time in Malaysia, I stayed with my friend Muzakir Manaf, who is now Chief of Komite Peralihan Aceh (KPA)”. From the discussion above, it can be conclude that Acehnese helps each other to survive in Malaysia.

The motivation factors of business can be divided into pull factors and push factors. From the answer of respondent, the pull factors are: see the opportunity in the business, encouraged by a friend, desire to generate more income and inspired by friends’ success. WhileENTREPRENEUR push factors are FACTORS economic depression, and unemployed.

From the interview, entrepreneur factors can be devided in the form of work experience and personal characteristic. International Conference on Entrepreneurship IEC 2014 - 185 - 1. Work Experience

An earlier study by Litvak and Maule (1976) say that entrepreneurs are more likely to establish a business in which they have past working experience or in related industry that they are familiar. Past experiences of the entrepreneur have a strong bearing on business success (Baron and Markman, 2000). While Cooper et al. (1989) and Steiner and Solem (1988) study show that past entrepreneur experience in related business or industry has the potential of influencing favorably the performance of the current venture. In this study also found a strong connection between past experience and the kind of business adopted by the Acehnese immigrant entrepreneurs and work experience also the dominant factors (5 of 7 respondents) related to their business success. For example respondent 2,

“I went to Malaysia in 1985. First time I worked as an employer. In 1986, I was started with new business by selling cigarettes and fried bananas... Then in 1987 began the business of selling herbs. I had courage to sell herbal because of my past experience in sellingAccording cigarettes to respondentbefore”. 3,

“For me, it was better to start own business…. than as an employer… Past work experience is benefit to start business and it also contributes to business success …. As immigrant, we have to adapt the current stay culture. And it was not difficult because our face and culture is similar to Melayu”. The same statement also stated by respondent 4: “It have a good future to have own business than be a worker…. But to start a business we Respondentneed to have 3experience said in the same field”.

: “Past experience is very important having by somebody to start business. Even only have a small amount in fund, but he has experience it will help him to the solve problem in business”.

This study found that past entrepreneurs experience in a related field has been instrumental in engendering the success of the business embarked by Acehnese immigrant entrepreneurs. This finding is supported the early study which showed that the propensity of success is greater with enterprise owners that have previous experience than those who have not (Baron and Markman, 2000). An early study that dealt with the thesuccess business. of newly set-up businesses similarity supports the contention that past experience will enable the entrepreneur to make better and more informed decisions affecting 2. Personal Characteristics

Personal traits, another component of the entrepreneur factor, are also determinants - 186 - International Conference on Entrepreneurship IEC 2014 of business success. Important characteristics that are covered by this study to be rele- tributevant to tothe the Acehnese success ofimmigrant his business. entrepreneurs’ success are hard working, honest, humility, good borrower, patience. Respondent 4 said being hard worker and honest is con-

“ For me being hard worker is very important to be success beside being honest to costumer and also trusted person for others”.

The same statement also stated by respondent 7:

“I have to work hard to achieve all of these things…. I start open the store from 7Am to 11 PM… (laughing)… Being honest to client also important to get their trust…”

Recognizing that humility has helped to attract many customers to business, the respondent sought to encourage this attitude among his staff. “And then the customers like to come to our store (respondent 2). Respondent 6 said, “I had a target to have own business someday… I had worked hard to make it comes true.. Now I have my own beauty product to sell…” It is supported of Fudzail (2009) statement “results of hard work and business strategies can be as a guide to the Malay traders.

According to respondent 2: “Melayu and Acehnese have the similar face and culture… we can adapt local culture easily… when I open new store, I will invite my community include Melayu such as Imam, bilal…. And it will make us like as their family and it is positive to our business”. “It is important to be adapting the local culture, and because Acehnese have similar culture with Melayu it much help us in business”. It is show that entrepreneurs.Acehnese immigrant entrepreneurs can adapt local culture to build colonies. And due to similarity in culture, religion, and face, makes positive impact to Acehnese immigrant ENTERPRISE SUCCESS

Since the research question deals with the factors that contribute to the success of Acehnese immigrant entrepreneurs, it is to be expected a discussion during in-depth interviews would revolve around the definition of success. Reacting to open ended questions on this matter, the respondents gave many and diverse answers to what contribute to success from their respective viewpoints. In addition, various measures of success were also quoted. In this study, survivability and expansion of business are two factors much1. Survivability mentioned by them.

The ability to survive in the market place is the measurement used by Acehnese im- International Conference on Entrepreneurship IEC 2014 - 187 - migrant entrepreneurs as a business success. . Since the respondents, on average have been in business for more than 5 years, they feel that survivability is important. “I don’t hoping so much, but it is important to be a survival business. , (respondent 7). “After few years of business, the business still runs…. Every day we have costumers, even not much… it is because of work hard (respondent 5). According to respondent 1, a business that2. survives Expansion is one of thatBusiness can cover all its cost of operation that includes wages and rent.

Expansion of business plays a major role in spurring the entrepreneurs and is an important indicator of their success. Each Respondent had expanded their stores to one and 3 others store within Kuala Lumpur and others state. “Through effort, I am able to expand my business to Penang and Seremban”, (respondent 2). According to respondent 1: “After a few years, I have a new store with specified the revenue only for my family expenses…. While the others store’s revenue is for the business itself.”. “Now I can develop a new product from the profit of stores…..Even the product had went through the difficult situation… but Alhamdulillah.. now it makes profit”, (respondent 6).

According to respondent 4: “After in few years of business, I can open new shop in Pahang, Seremban and Malaka”. “I have business in few places like in Kuala lumpur and Shah Alam…the expansion of business because the previous store makes profit and I see the business opportunities in other places”.

It is believed that Acehnese immigrant help each other for their success. Even they are not having supports from the government and banks.

A business needs to succeed in order to survive. Like any other business, the success of small and medium sized enterprise (SMEs) therefore depends on measureable gains such as growth in sales, workforce, capital and profit (Nash, 1983). In this study found that expansion of business and survivability to be the dominant measures used by the Acehnese immigrant entrepreneurs. Similar to other studies involving SMEs, the use of both objectives as well as subjective measures have been found yield a much more wholesome assessment of business success. A robust measurement methodology such as this goes a long way to assess the achievements of business activities in all aspects (Schere, 1980; Galbraith and Schendel, 1983).

From the interviewed found that the entire respondent hopes to going back and doing business in Aceh someday. “I am really wanted to going back to Aceh, but if the condition is support to do businesses there”, (respondent 2). Respondent 1: “now I expand my business to Aceh, and I want to go back and spend my life there if the situation is better”. “I want to spend my retired life in Aceh”. It seems the respondents miss their hometown - 188 - International Conference on Entrepreneurship IEC 2014 andSUMMARY want to come back someday if the condition is good.

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International Conference on Entrepreneurship IEC 2014 - 193 - - 194 - International Conference on Entrepreneurship IEC 2014 CORPORATE ENTREPRENEURSHIP IN HEALTHCARE INSTITUTIONS AND THE IMPACT TO PERFORMANCE Aysu KURTULDU, PhD.

Trakya UniversityDilaver Vocational TENGİLİMOĞLU, School Of Health,Prof. Dr. Edirne, Turkey

Atılım University Faculty of Management, Ankara, Turkey

ABSTRACT

In this study, the dimensions of corporate entrepreneurship (innovation, risk taking, aggressive competition and proactivity), implementation to healthcare institutions, and their relationship with performance were investigated. The purpose of this study was to evaluate the hospital managers’ opinion about corporate entrepreneurship. The study was conducted by using a questionnaire modified from previous studies . All participants (n=203) who were in charge of hospital managing on behalf of goverment, or universities or private sector in Ankara completed the forms. We implemented our survey via e-mail and interviews. Descriptive statistics and correlation analysis were used for statistical analysis. Group means were compared by ANOVA and Chi-Square tests. Our results demonstrated that health care environment have complicated ( =3,50), stressful ( =2,33) and dynamic ( =3,50) structure. Additionally, team work was important ( =3,13) for health care institutions. This study also reflects, private hospitals show more aggressive competition behaviour than public and university hospitals ( =3,08; =2,90; =3,38; p=,017). We also compared public, private and university hospitals in terms of growth, profit, non-financial measures. The results of these comparisons showed that, there were significant diffrences among public, private and university hospitals. The most important part of this study is the relationship between the dimensions of corporate entrepreneurship and hospital performance measures. Dimensions between corporate entrepreneurship and hospital performance measures generally had weak and positive relationship. We think that the concept of corporate entrepreneurship is not known at sufficient levels, and it has little impact on the performance of healthcare institutions. In conclusion, in order to benefit from corporate entrepreneurship on the field of healthcare services, education programs on risk management, research and development and strategic management should be planned. Innovation attempts should be supported and encouraged. Awareness at each level of management must be created to improve service quality that meets client demands, and to create value in healthcare market that provides competition superiority.

International Conference on Entrepreneurship IEC 2014 - 195 - Key Words: porate Entrepreneurship, Performance. Healthcare Services, Hospital Management, Strategic Management, Cor- INTRODUCTION

Entrepreneurship is an emerging research ﬁeld that has received much attention over the last few decades. However, there is a lack of consensus on precisely what constitutes entrepreneurship and in many cases it has either been related to the ‘entrepreneurial individual’ or framed as the creation and running of one’s own ﬁrm (Landström et al, 2012). In economics, there are two broad and sometimes overlapping approaches towards defining entrepreneurship. One of these is behavioural describing what an entrepreneur does such as starting a new business, and the other is occupational, describing an entrepreneur as someone who resorts into some prior defined category such as self-employment or business ownership. Hart defines entrepreneurship as the ‘process of starting and continuing to expand new businesses’ (Gries, 2011).

Entrepreneurship is classify in different ways. These are technical entrepreneurship, corporate entrepreneurship, environmental entrepreneurship, and managerial entrepreneurship (Ercan et al., 2009).

New era, which defines our current economic era, leads to tight resources, rapid technological change, shortened product life cycles and intense global competition. Organi- zations need to change for this era. Because of weakness in the traditional methods of management, required changes, innovations and improvements in that marketplace for surviving, increase the importance of corporate entrepreneurship (Zehir et al., 2012).

The goal of corporate entrepreneurship is for large organizations to recreate the benefits of flexibility and innovation often associated with small firms, in a large firm setting. Corporate entrepreneurship involves teams within a firm, led by intrapreneurs or corporate champions who promote entrepreneurial behaviour inside large organisations, proactively engaging in risky projects that seek to create new, innovative, administrative procedures, products and services that facilitate organisational renewal and growth (Thomson, McNamara, 2001). In many companies, corporate entrepreneurship takes a cyclical path of enthusiastic support and investment, followed by diminished interest and program cuts. These cycles occur as internal and external shifts impact the organization, often with little predictability; for example, new leadership, a slowing in revenues, economic downturns or industry upheavals may be catalysts (Kelley,2011).

Corporate entrepreneurship refers to the pursuit of entrepreneurial actions and initiatives that transform the established organization through strategic renewal processes and/or extend to firm’s scope of operations into new domains, that is, new product-mar- - 196 - International Conference on Entrepreneurship IEC 2014 ket segments or technological arenas. Firms that exhibit corporate entrepreneurship are typically viewed as dynamic, flexible entities preparing, or prepared, to take advantage of the new business opportunities when they arise. Corporate entrepreneurship flour- ishes in established firms when individuals are free to pursue actions and initiatives that are novel to the firm. However, to be successful entrepreneurial activity must be integrated into the organization’s strategies. (Goodale et al., 2011)

When researchers analyze the concept of entrepreneurship, they see entrepreneurial institutions can take risk, think innovatively and also have high competitive capabilities. Innovation, risk taking, competitive aggressiveness and proactivity are total components of corporate entrepreneurship (Bulut et al., 2008).

Corporate entrepreneurship contains two fundamental components: (1) objectives focused on rejuvenating or purposefully redefining organizations, markets and industries to create or sustain a position of competitive superiority and (2) innovation as the premier mechanism for meeting these objectives. Innovation based corporate entrepreneurship leads to significant advances in features or performance compared to what was previously available in an industry or market (Kelley et. Al, 2009). oneRisk of the is most most commonly important conceived component as reflectingof corporate variation entrepreneurship. in the distribution Entrepreneurs of possible outcomes, their likelihoods, and their subjective values (March et al., 1987) and it’s may behave in various ways: Some grab opportunities, others get frightened at risks; some carry ﬂourishing businesses, others become bankrupt. The entrepreneurs found the situations more positive, noticed the strengths more than the weaknesses, saw more opportunities than threats, and discovered more progress than failure in these situations. However, no difference between the tendencies of risk-taking was found between the groups (Farago et al, 2008).

Miller and Friensen’s view of proactiveness as changing the enviroment by introducing new products and technologies, and with Venkatraman’s definition of proactiveness as ‘seeking new opportunities which may or may not be related to the present line of operations, introduction of new products and brands ahead of competition, strategically eliminating operations which are in the mature or declining stages of life cycle’. (Lump- kin et al., 2001).

Competitive aggressiveness is often characterized by an offensive combative posture or an aggressive response aimed at overcoming threats in a competitive marketplace. It includes the processes that companies engage into devise and enact strategies aimed at defending their market position or combating industry trends that threaten survival International Conference on Entrepreneurship IEC 2014 - 197 - (Short et.al, 2009). Being competitively aggressive is about firms’ vigilant and forceful defense of their current market position while seeking to undercut their rivals’ position. To do so, they carefully, continuously monitor and analyze their rivals, and are motivated to improve their performance by attacking those firms, and are ingenious in their de- ployment of firm resources to launch attacks (Stambaugh et. al., 2011)

In profit-making companies, following completed organisation activities, managers establish corporate structures. For improving competitive capabilities, evaluating opportunities and generating the strong sides of companies; managers have to determine different strategies and managerial politics. In recent years, companies prefer corporate entrepreneurship strategies because the concept of corporate entrepreneurship provide companies to increase their value and to improve their main features.

The aim of this study was to determine applicability of corporate enterpreneurship in healthcare institutions and to consider relationship between components of corporate entrepreneurshipMETHODS and hospital performance measurements. 1 Data Collection

The study was conducted by using a questionnare modified from previous studies (FİŞ, 2009). The questionnaire consist of four parts. In first part of survey we asked descriptive questions like age, gender, position etc, in second part five point Likert-type scale was used to assess opinion of hospital managers about components of corporate performanceentrepreneurship, measures. in third part we assesed opinion of hospital managers about growth, profitability, non-financial measures and the final part there were seven questions about

All participants who were in charge of hospital managing on behalf of government, private and university sector in Ankara completed the foms. We were implemented sur- vey2. via Analysis e-mail and interviews. This survey comprised of 203 hospital managers.

The validity and reliability levels of survey used in the research have been determined and the Cronbach’ Alpha coefficient was calculated as 0,925.

Data analyzed using SPSS version 19. Descriptive statistics, correlation analysis, Chi- Square tests were used for statistical analysis. Group means were compared by ANOVA and Chi-Square tests.

- 198 - International Conference on Entrepreneurship IEC 2014 Hypotheses

H1: There is a relationship between proactivity and hospital performance measures. measures.H2: There is a relationship between innovation and hospital performance measures. H3: There is a relationship between aggresive competitive and hospital performance

RESULTSH4: There is a relationship between risk taking and hospital performance measures.

The results of research shown, 43% of participants were in charge in public hospital. Managers who responsed survey were medical directors (21,2%), hospital managers (32,5%), head nurses (18,7%) and managers (27,6%) in different departments as human resources, quality management, financial management. 59,1% of managers have received education in health care management. Education levels were bachelor degree (31,7%), postgraduate (50,8%), doctorate (1,7%) and certification (15,8%). Because of complex structure of hospitals, rapid technological development and health politic structure, importance of healthcare management education is increased recent years. Trained managers contribute health care market with their knowledges, skills and ex- periencesTable 1: (Table General 1). Information

Variable Number % Variable Number % Public 21,2

Hospital Private 6288 43,3 Hospital Medical Director 6643 Statute Statute of partici- University 26,130,5 of partici- Hospital Manager 32,5 pants pants 53 Nurse Head 5638 27,618,7

Total 100,0 TotalOther* 100,0

203 203 Yes 120 59,1 Bachelor

38 31,7 Health No 40,9 61 Manage- Education Doctorate 2 1,7 ment 83 Level Postgraduate 50,8 Education 19

15,8 Total 100,0 TotalCertification 120 100,0

203

International Conference on Entrepreneurship IEC 2014 - 199 - • Managers in Human Resources department, Quality management department, Fi- nancial management department etc • We analyzed managers’ opinions about health services market. The results shown health services market was complex, ( = 3,43), dynamic ( =3,50) and stressful ( =2,33). On the other hand, hospital managers said that team work was important in hospitals ( =3,13), job descriptions were defined ( =3,08) but managers made decision making without consult with other workers ( =3,42). We also analyzed the core factor of corporate enterpreneurship in hospitals. The results shown, the concept of corporate entrepreneurship weren’t understood in health institutions throughly. For a better understanding of the concept and dissemination of corporate entrepreneurship activities, administration of relevant education in health institutions is thought to be helpful. (Ta- bleTable 2). 2: Managers’ opinion about enviroment, top management support and componenets of CE

Variable n s.s.

E1 Non stressful enviroment X 1,166

E12 203 2,33 1,156

E13 DynamicComplex enviroment 203 3,43 1,119

MS 4 203 3,50 1,120

MS 13 Description of responsibility is based on team. 203 3,13 1,172

MS 22 Job descriptions are defined. 203 3,08

Managers aren’t consult with workers to decision 203 3,42 1,185 P1 making. 1,177

P2 Leader institution to deliver renewals in market. 203 2,993,00 erally. Our institution follows other health institutions gen- 203 1,085 P3 1,026

Our institution follows other health institution to 203 3,22 AC4 delivery new services. 1,114

Our institution collobrates to other health institution. 203 3,22

- 200 - International Conference on Entrepreneurship IEC 2014 Variable n s.s.

AC5 X 1,172

AC6 Our institution don’t make effort to attract patients.. 203 3,11 share. Our institution don’t make effort to increase market 203 3,00 1,208 I8 1,124

I9 Our institution never deliver new services. 203 2,37 institution. R&D projects and innovation are important in our 203 3,10 1,148 RT20 1,117

RT21 Top managers adapt low-risky projects. 203 3,32 1,122

RT22 Top managers move on with small and slow attacks. 203 3,18 1,109

In uncertainty situations top managers apply ‘wait and 203 3,15 RT23 see’ policy. 2,46

Risk taking is positive feature in our instituiton. 203 1,073

• E: Enviroment, MS: Management Support, P: Proactivity, I: Innovation, RT: Risk Tak- ing

We analyzed relationship between innovation, risk taking, proactivity and aggressive competition and hospital status. Although public and university hospitals are non-profit organizations, core goals of private hospitals are both deliver quality health services and profitability. In recent days structures of health market is changing rapidly. Public hospitals also adapt different marketing strategies, create strategic plans and compete with other hospitals as is private hospitals. The results of analyses shown there isn’t significant correlation between proactivity, innovation, risk taking and hospital status (p>0,05). There is significant correlation between aggressive competition and hospital status (p<0,05). The results of the one-way repeated measure ANOVA showed (Post Hoc Tests) significant differences between university hospitals and private hospitals. (p<0,05) We said public hospitals more aggresive competitor than the other hospitals (Table 3).

International Conference on Entrepreneurship IEC 2014 - 201 - Table 3: Relations Between Hospital Statu and Components of CE (ANOVA)

Hospital Components Statute p of CE X Public Private ,446

University ,18011

Private Public -,30031 ,446,133

-,18011 Aggressive University ,013 Competition University Public -,48042*

Private ,30031 ,013,133

,48042*

We analyzed hospitals managers’ opinions about financial and non-financial measurements. There isn’t sufficient differences profitability (long term profitability, operating profitability and return on equity), growth (total sales, total sales growth, market share and provided employment) and non-financial performance (image, customer satisfaction, supplier satisfaction) (p>0,05). However, there is significant differences growth (market sales growth and provided employment growth) and non-financial performance (employment satisfaction) (p<0,05). The results of the one-way repeated measure ANOVA showed (Pst Hoc Tests) there is significant differences between university hospitals and private hospitals. (p<0,05) (Table 4).

- 202 - International Conference on Entrepreneurship IEC 2014 Table 4: Relationship Between Financial and Non-financial parameters and Hospital Statu (ANOVA)

Hospital p Variables Statute X Public Private ,126

University ,167-,352 ,652

Market Private Public ,126 Sales University ,519*,352 ,030 Growth University Public ,167 ,652

Private ,030

Public Public -,519* ,465

-,203 ,197

Private PublicÜniversity ,311 ,465 Employment Provided ,203 ,023 Growth University PublicÜniversity ,513* ,197

Private -,311 ,023

Public Private -,513* ,127

University -,371

Employment Private Public ,325 ,127,235 Satisfaction University ,697*,371 ,004

University Public

Private -,325 ,004,235

-,697*

International Conference on Entrepreneurship IEC 2014 - 203 - Results of correlation analysis shown, there is a weak-positive relationship between proactivity and new services; innovation and new services, bed occupancy rate and average lenght of stay; risk taking and new services. (Table 5). In accordance with these resultsTable H1, 5: H2 Relationship and H3 were Between objected. Component of CE and Performance Measures

Performance New Bed Average Inpatient Measurment Components Services Occupancy Lenght Of Rate of CE Rate Stay n Proactivity ,143*203 ,180**203 203 203

Correlation -,049 ,089 nCoefficient

203 203 203 203 Aggressive ,065 ,015 ,092 ,127 Competition Correlation nCoefficient

Innovation ,196**203 ,288**203 ,190*203 ,066203

Correlation nCoefficient Risk ,172*203 203 203 203

Taking Correlation ,137 -,062 ,038 Coefficient CONCLUSION

Due to lack of financial resources, as well as the impact of emerging technologies, the market for health services has been advancing with different strategies in terms of service delivery and management.

In order to eliminate the inequalities in service delivery and distribution of resources and so to improve the quality of health care services; especially public hospitals, private and university hospitals seem to be in a great transformation process. Businesses offer- cusesing health on the care availability are trying of to the reach concept their ofgoals corporate using different entrepreneurship methods and in the strategies institutions and to be the leader in the market where competition is intense. In this context, this study fo-

- 204 - International Conference on Entrepreneurship IEC 2014 providing health care services and its effect on the service performance.

The first step to the effective execution of corporate entrepreneurship activities is to define the external environment. Considering the result of the evaluation, health businesses are expected to identify the appropriate entrepreneurship strategy in a market with such a complex structure, to be sensitive to the environment and to put more effort in order to keep up with the changing structure. From the perspective of health enterprises, awareness on the environment and identifying its effects is important, because health care has a comprehensive and multivariate outer structure such as government policies, competitors, economic structures, changes in the social security system, patients’ expectations and their affordability and regulations in health law. Health businesses should evaluate this environment, which has a variable structure and is hard to be analyzed, effectively.

Health institutions, which have long and stressful working hours and have administrative and health personnel with different levels of training and specialization, achieve an appropriate task-sharing, support manager-employee cooperation and identify the effective strategies. At this point, the necessity for managers and administrative personnel that are visionary, trained in health management, capable of innovative thinking, emphasising on continous improvement, and which can use initiatives and take rational risks emerges.

The health services provided by public and university hospitals are not profit oriented. However, private hospitals and private university hospitals rely on the free-market conditions. From this perspective, while the structure of health services is expected to be variable in terms of profit-making, development and non-financial indicators, the vari- ability has partially emerged in the results of the study. This can be interpreted as a reflection of drastic changes in the administrative and service delivery structures in public hospitals realized with the Reform in Health Transformation. Today, public hospitals, as well as the private hospitals, are following the income-expenditure balance closely.

In the study, it is obtained that private hospitals adopt aggressive competitive strategies. Private hospitals, making large investments in health care and aiming to make profit as well as patient care, should not compromise the quality of service and should avoid suffering losses in terms of both financial and human resources while being in an aggressive competitive stance to be preferred.

Rapidly developing technology of health services, changes in methods of diagnosis and treatment, as well as the development of economic, legal and administrative approaches in the health care market, increase the importance of innovative studies. The International Conference on Entrepreneurship IEC 2014 - 205 - result of the study reveals that the innovation dimension of corporate entrepreneurship is related to the performances of private and university hospitals. In institutions offering health service, innovative studies increase the preferability of the institution and provide a competitive advantage. In order to improve the performance in health institutions, it is required to establish R & D units; if there is an existing R & D unit, they should be made functional in the technical sense. In addition, development of the vision of the institution by carrying out national and international projects will be beneficial. Health services should create an incentive and reward system and a supportive environment for the innovative thinking personnel in both medical treatment and management areas. However, the point to be taken into consideration is the allocation of scarce financial and non-financial resources

The last dimension of corporate entrepreneurship taking place in the study, risk-taking, represents innovative attitude of the institution despite the lack of any foresight. It is obtained that the risk-taking dimension is only to be associated with the public hospitals in all the institutions providing health services. When conditions are evaluated, it is expected that private hospitals, are in a more severe competitive environment compared to public and university hospitals and would have a greater tendency to take risks. Nevertheless, as mentioned in previous sections, under the influence of the reforms carried out in administrative and technical infrastructure, public hospitals tend to take risks, too. In particular, in the fields of testing of new surgical techniques (e.g. robotic surgery), the use of new devices (e.g. apparatuses for tomoterapy), and adoption of new management systems ( e.g. public-private partnerships and public hospital associations), public hospitals are going through drastic changes by taking risks under the leadership of the Ministry of Health. However, important points to be considered here are rational risk-taking, predicting the consequences of the risks taken by the institution and its positive and negative effects on the market, and planning alternative strategies when during the risk-taking process.

In today’s health care market, where health care institutions having autonomous structures in terms of service delivery and financing are planned, supportive, flexible and controlling policies of the Ministry of Health on the risk-taking point would be contributing. In order to support innovative studies, The Ministry of Health is required to exercise due diligence at macro level and the hospital management at micro level.

Because the primary objective in all of the services provided in the health field is individual and community health, health care institutions need to be careful, especially in aggressive competitive dimension where aggressive moves are set forth. The techniques and methods that would endanger the health of the individual and society, and using of scarce sources unconsciously should be avoided. - 206 - International Conference on Entrepreneurship IEC 2014 It is a fact that, in the health field, everyday a different managerial activity is adopted, income-expenditure relationship is aimed to be balanced, and service delivery is shaped by taking competitors into consideration. At this point, adoption of innovation and risk-taking dimensions of corporate entrepreneurship by health institutions would be contributing for both the quality and the performance of the services provided. Fi- nally, awareness should be raised by carrying out studies on different dimensions of the subjectREFERENCES in the health services literature. BULUT, Çağrı, Ahmet Murat FİŞ, Bora AKTAN, Senem YILMAZ, ‘Kurumsal Girişimcilik: Ka- vramsal Yapı Üzerine Bir Tartışma’, Journal of Yaşar University (3) 10, 2008: 1389-1416.

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- 208 - International Conference on Entrepreneurship IEC 2014 DEVELOPMENT OF ENTREPRENEURSHIP CULTURE; GREAT CHALLENGE FOR DEVELOPING COUNTRIES, EXPERIENCE FROM NEPAL Bharat CHALISE

[email protected] PhD (Marketing) Student, Anadolu University, Eskisehir, Turkey

ABSTRACT

Entrepreneurs create jobs, pay taxes, create demand for product which turn creates jobs for other businesses, introduce new technology in the market and stimulate the economy by instilling confidence in people. These are the common reason why entrepreneurship is important for any country. Sustainable economy is directly related to number of potential entrepreneurs country is producing in certain period of time. For developed economy it is quite easy to start start-ups because of accessibility to capital, advanced technology and accessibility of good information. But for developing countries there are lots of problems to start new venture or for innovation. Several factors are responsible behind this complexity. This perspective article explored some of the major challenges to developing countries government to make good entrepreneurial environment and also includes some experiences from Nepal. There are several studies done to identify factors affecting entrepreneurship. Some of them are economic, psychological, political, cultural and social factors (Brockhaus & Nord, 2013). But in developing countries there are an extra challenges to motivate people for innovation because lack of political stability, corrupted bureaucrats, injustice and lack of physical infrastructures and skilled resources and technology. In conclusion, Training, access to the capital through loans, security of investment, and realistic accessibility on market information, e-governance, regular supervision and entry stage tax subsidy are the major contribution government can do for entrepreneurship development. Proper implementation of those techniques is still challenge for developing countries and much more challenge for leastKeywords developed : countries.

INTRODUCTION Entrepreneurship, Start-ups, Motivation, Capital, Developing Countries

The role of entrepreneurship in society has changed drastically over the last half century. During the post-World War II era, the importance of entrepreneurship and small businesses seemed to be fading away (Audretsch & Keilbach, 2006). While alarm was expressed that small business needed to be preserved and protected for social and po- International Conference on Entrepreneurship IEC 2014 - 209 - litical reasons, few made the case on the grounds of economic efficiency. It has been increasingly recognized Entrepreneurship behind the successful economies. Entrepre- neurship has been accepted as one of the driving forces for market competitiveness and economic growth in the emerging economies. Entrepreneurship contributes to development, with a positive effect on society, expanding larger tax base and more consumer wellbeing. Entrepreneurial dynamism is the key to innovation and growth which drives economies these days. Entrepreneurs are individuals or group of individuals who invest capital, organize and direct business and industrial units. An entrepreneur assembles, coordinates and directs various factors of production namely land, labor, capital and other materials. An entrepreneur initiates ventures, employs workers, organizes production, develops markets and influences the development of managerial thoughts.

Entrepreneurs are a creative, driven individual who finds new combination of factors of production to develop new product, corner a new market, or design a new technology. An entrepreneur could be a trader, a technician, an educated unemployed or the like. However, in Nepal’s mainstream economics entrepreneurship has not played a central role in economic development for decades. The main focus of current donor depended national economy has been on allocation of resources and how it is achieved by markets or byROLE governments. OF ENTREPRENEURSHIP IN ECONOMY

An entrepreneur, who is also known as a risk-bearer, is the central figure in this modern era of business. Economic development of any country cannot be initiated without the pioneering efforts of entrepreneurs. Many economists including Joseph Schumpeter glorified the role of the entrepreneur and regarded him as the key figure in the process of economic development. He identified that the ultimate determining factor of the rate of economic growth is the availability of dynamic entrepreneurship in the country concerned. Rapid economic catch-up depends on countries’ entrepreneurs being able to absorb and creatively adapt international technological knowledge (Wim Naudé & Goedhuys, 2011).

Per capita income growth requires shifts from less productive to more productive techniques per worker, the creation or adoption of new commodities, new materials, new markets, new organizational forms, the creation of new skill, and the accumulation of new knowledge, the entrepreneur as gap filler and input-completer is probably the prime mover of the capacity creation part of these elements in the growth process (Ács & Virgill,LITERATURE 2009). REVIEW

The concept of entrepreneurship was first established in the 1700s, and the meaning - 210 - International Conference on Entrepreneurship IEC 2014 has evolved ever since. Many simply equate it with starting one’s own business. Most economists believe it is more than that. Entrepreneurship is the key driving force behind economic growth and innovation around the world (U.S. Department of State/Bureau of International Information Programs, 2008). Entrepreneurs have the ability to turn new ideas into breakthrough solutions while creating employment and spreading prosperity. It is entrepreneurs who will most likely create solutions to the world’s most important and complex challenges surrounding health, energy and human development. But entrepreneurs alone cannot make change happen, no matter how visionary and persistent, unless they operate in an environment that supports and rewards risk-taking. People choose entrepreneurial careers when they anticipate economic, psychological or social rewards that outweigh the risks relative to more traditional forms of employment. An improved understanding of the types of regulatory and cultural environments that foster entrepreneurships can help develop policies designed to advance continuous innovation and new business creation. What are the critical success factors and best practice models for the development of entrepreneurship? What are the barriers (World Economic Forum, 2010)?

To some economists, the entrepreneur is one who is willing to bear the risk of a new venture if there is a significant chance for profit. Others emphasize the entrepreneur’s role as an innovator who markets his innovation. Still other economists say that entrepreneurs develop new goods or processes that the market demands and are not currently being supplied. In the 20th century, economist Joseph Schumpeter (1883-1950) focused on how the entrepreneur’s drive for innovation and improvement creates upheaval and change. Schumpeter viewed entrepreneurship as a force of “creative destruction” (U.S. Department of State/Bureau of International Information Programs, 2008). The entrepreneur carries out “new combinations,” thereby helping render old industries obsolete. Established ways of doing business are destroyed by the creation of new and better ways to do them. Business expert Peter Drucker (1909-2005) took this idea further, describing the entrepreneur as someone who actually searches for change, responds to it, and exploits change as an opportunity (Drucker P. , 2014).

Most economists today agree that entrepreneurship is a necessary ingredient for stimulating economic growth and employment opportunities in all societies. In the developing world, successful small businesses are the primary engines of job creation, income growth, and poverty reduction. Therefore, government support for entrepreneurship is a crucial strategy for economic development. As the Business and Industry Advisory Committee to the Organization for Economic Cooperation and Development (OECD) said in 2003, “Policies to foster entrepreneurship are essential to job creation and economic growth.” Government officials can provide incentives that encourage entrepreneurs to risk attempting new ventures. Among these are laws to enforce property International Conference on Entrepreneurship IEC 2014 - 211 - rights and to encourage a competitive market system.

The culture of a community also may influence how much entrepreneurship there is within it. Different levels of entrepreneurship may stem from cultural differences that make entrepreneurship more or less rewarding personally. A community that accords the highest status to those at the top of hierarchical organizations or those with professional expertise may discourage entrepreneurship. A culture or policy that accords high status to the “self-made” individual is more likely to encourage entrepreneurship. Several studies have analyzed different aspects of entrepreneurship defined as the level of self-employment. They include (Stephena, Urbanob, & Hemmenb, 2005), who analyze the effect of entrepreneurship on economic growth and find that the former’s influence on the latter depends on the level of income. Thurik find that non-economic factors such as culture are important determinants of entrepreneurship (J. Hessels & Thurik, 2007). Entrepreneurship is about more than just starting new companies. It is about creating jobs; helping move the self-employed to those who can employ others also. It is about growing the economy in a sustainable way. It is about bringing new technologies and ideas to emerging markets. Importantly, entrepreneurship is also about empowering peopleENTREPRENEURSHIP: and equipping them CHALLENGE with dignity andFOR self-confidence. DEVELOPING COUNTRIES

As we know the management of capital is one of the fundamental requirements to be an entrepreneur. If we talk about the income of people from developing countries is increasing 20 to 40 percent in last decades in the same time Per Capita Income of Nepal has increased by almost 37% (The World Bank, 2013). But the entrepreneurial activities are not pleasingly increased.

One side of the story, Entrepreneurs have been facing so many barriers in the way of creation of new ventures and smooth operation of the existing ones in developing economy. Nepalese businessmen and entrepreneurs have viewed that their main barriers include limited access to capital, political instability, shortage of skilled manpower and technology, low return from industrial investment and low level of confidence and lack of favorable policy of the government. It is realized that with this slow pace of industrialization Nepal can’t stand in global competition. Due to complex, and frustrating political situation, intertwined with daily economic activities, Nepal’s economic health is deteriorated further. Thus, it is very appropriate time at present to review such activities and discourage unproductive investments through the private sector awareness. People innovativein Nepal need business. to understand entrepreneurship can be way to create job, grow international competitiveness in global market with new mandate to promote and/or create

- 212 - International Conference on Entrepreneurship IEC 2014 Next face of the Nepalese entrepreneurship environment is fundamental problem with knowledge and motivation. Basic need for startup the enterprises is capital management. In Nepal, most of the households obtaining remittance, that is simply sufficient to establish microenterprises or any other medium and large enterprises. They are very poor in capital management in comparison with similar developing countries like India and Bangladesh. This lack of efficiency is leading country more dependent on import. Sustainable development of a country can imagine after new ventures creation and development of entrepreneurship on its people. Now this became a great problem for developing countries like Nepal because very few people are motivated to invest on new SMEs due to lack of confident and many other factors which will discussed below.

Economic development cannot be initiated without the pioneering efforts of entrepreneurs. Entrepreneurs have key role to play in the process of industrial development in particular and economic development in general. But entrepreneurs in Nepal are very shy to invest capital in industrial sector (KC, 2004).Therefore, it is essential to induce entrepreneurs to mobilize their resources in industrial sector. Government should implement an appropriate policy to motivate the entrepreneurs and to develop industries in the country. Finally the attitude of the people to become rich overnight must be changed through effective policy reforms.

The evidence shows that almost one fourth of the GDP is contributed by the remittance in Nepal (The Kathmandu Post, 2010). Recent year’s balance of payment is positive due to remittance but the issue is the use of the money in unproductive sector. Study shows the economic panic in productive investment of those countries despite the rise in income of people (Chalise, 2014). Next chapter it will be answered the encounters facingANALYSIS by the emerging AND DISCUSSION countries to establish entrepreneurship atmosphere.

The first and perhaps most obvious factor affecting entrepreneurship in developing countries is the lack of capital and financial innovation. Many people in these countries have limited personal savings and lack the necessary capital to start their own business. Entrepreneurs must then turn to external financing where they are charged high interest rates due to the risky nature of new business projects. With underdeveloped financial markets and expensive borrowing rates, entrepreneurs in emerging economies often use informal sources of finance to start their businesses and generate income from multiple jobs or businesses. With that being said, this is where an advantage of developing countries comes into play. But this is a great challenge for developing countries to develop entrepreneurial mindset, motivations, behaviors, decision making process, risk uncertainty and stakeholder’s involvement (Green, 2014). From a psychological point of view, the intention to become an entrepreneur has been described as the single best pre- International Conference on Entrepreneurship IEC 2014 - 213 - dictor of actual behavior (Fransisco Linan, 2005). Before discussion on present scenario of entrepreneurship let us find some of the reasons that is affecting entrepreneurship.

Following figure shows the ease of doing business in different countries. All the top rankers in the chart are developed countries and developing countries are trying to make environment favorable. The major problem for developing country is to save domestic entrepreneurs in this competitive world. Once open for the international market level of competition increased and in this environment always giants in advantage. This is the great challenge to open domestic market to international entrepreneurs for developing countries. Economy Ease of Doing Economy Ease of Doing Business Business Rank Rank

1 1

Singapore 2 New Zealand 2

Hong Kong SAR, China Canada

New Zealand 43 AustraliaSingapore 43

DenmarkUnited States 5 5

Nepal 105 NepalHong Kong 97

179

India 134 India 74

TurkeyBangladesh 13069 TurkeyBangladesh

93 Figure 1: Source: World Bank doing business project Comparative Business Environment 1. Factors Affecting Entrepreneurship

There are many research and articles regarding factors affecting entrepreneurship which are generalized. But for every society some factors are unique and can’t generalized. According to Lorraine (2010) Cultural factor is leading factor to grow entrepreneurship but what I seeing is Cultural factor is not a top most factor for entrepreneurship development there are other factors which are equally important. Here are some of - 214 - International Conference on Entrepreneurship IEC 2014 theECONOMIC factors that FACTORSare affecting entrepreneurship.

To make a profit innovation require basic facilities like transportation, communication, power supply etc. they reduce the overall cost of business and lead towards the profit. Every innovation required some level of capital. Foreign exchange is also affects in developing countries. Avaibility of capital is another major factor. There is also some risk associated with developing countries. Economic policy, availability of reliable data and government interest also affects the business environment. Most of the developing countries are suffering with unavaibility of skill labours. They can easily import latest technology and machinary but it is hard to operate and maintain for the long run. Be- cause the can import technology from abroad but cannot afford foreign labour because of higherSOCIAL payment FACTORS for them.

A society that is rational in decision making would be favourable for decision-making. Education, research and training is given less importance in less developed countries therefore there is very little vertical mobility of labour. Religious, social and cultural factors also influence the individual taking upon entrepreneurial career, in some countries there is religious and cultural belief that high profit is unethical. This type of belief inhibits growth of entrepreneurship. In less developed countries the entrepreneur is looked upon with suspicion. Public opinion in the less developed nations sees in the entrepreneur only a profit maker and exploited. So a personality factor is a one of the motivation for entrepreneur. To be motivated lots of things play important role among them education background, occupational experience, Family background, financial availability, desire to work independently, Assistance from financial institution, Availability of technol- ogyCULTURAL and family ANDtradition RELIGIOUS are the major FACTORS motivators for entrepreneurship development.

Religious, social and cultural factors also influence the individual taking up an entrepreneurial career, in some countries there is religious and cultural belief that high profitsPSYCHOLOGICAL unethical. This FACTORS type of belief inhibits growth of entrepreneurship.

The psychological factors like high need for achievement, determination of unique ac- complishment, self-confidence, creativity, leadership promote entrepreneurship. On the other hand psychological factors like security, conformity and compliance, need for affiliation etc. restrict promotion of entrepreneurship.

International Conference on Entrepreneurship IEC 2014 - 215 - POLITICAL FACTORS

Political environment and political stability of country influence the growth of entrepreneurship. The political system, which promotes free market, individual freedom and privateECONOMIC enterprise, POLICIES will promote entrepreneurship.

The economic policies of the government and other financial institutions and the opportunities available in a society as a result of such policies play a crucial role in exerting direct influence on entrepreneurship. In view of the haphazard development of economic zones, Government is encouraging the entrepreneurs to establish their business in backward and tribal areas. This is primarily to arrest the migration of people from the villages to cities and to create employment opportunities locally. Government is promoting such development by giving incentives like tax holidays (both sales and income), subsidized power tariff, raw materials, transportation cost etc.

These are the important factors affecting entrepreneurship explored during study. Beside these there may be other factors like political environment, availability of funding, availability of market and technology also affects the business environment (Lor- raine Uhlaner, 2004). Now developing countries are facing their special problem apart from those common problems. Let us take an example of Business Environment of Nepal and Canada. It takes on an average 17 days to register a firm in Nepal and it costs almost 35% of per capita income but in Canada it will finish only in 5 days and it costs only 0.4 % of the income. Average number of days in OECD is 11.5 days and cost is around 12% of per capita income. In south Asia average days is 16 and cost is only 20% (Doing Business 2014, World Bank, 2013). This shows business environment in Nepal is time consuming than developed countries.

Most important but not first factor affecting business environment is behaviour and response from government officers. According to the Transparency International Nepal internal revenue and custom departments are the most corrupted in Nepal. This means you have to face a lot of problem while registering and updating the firm. Bribery is so organized and officers are handling it so systematically and disciplined way to escape forfrom entrepreneurs the government in Nepal. investigation. Even you start your business you have to face lots of hurdles to run it’s in a legal way. This is the major factor of frustration and demotivation

Government is allocating sufficient budget since 2000 for e-governance but still progress is like zero in Nepal. All the government employees are resisting change. They have great fear about their illegal income once the e-governance adopted their source of extra income will dry. All those are happening due to political instability. Nobody is account- - 216 - International Conference on Entrepreneurship IEC 2014 able with their duty and job and this situation making organization fail and lead to corruption. Finally what we can say is lack of good political vision and instability in politics making entrepreneurs demotivated and demoralized in developing countries.

In some cases entrepreneurs themselves are not so competent to compete with this world. Entrepreneurial education, training, management of organization are the major drawbacks of some entrepreneurs. Shortage of knowledge either finishes the business or resists grow. To improve entrepreneurship efficiency government should organize some workshops and training programs but in Nepal government is dedicated to collect tax but not interest to motivate people to be an entrepreneur.so what we can say is entrepreneurial education and knowledge is the major factor affecting entrepreneurship andCONCLUSION innovation. AND RECOMMENDATION

Entrepreneurship has certain economic value for the development of nation because it creates employment and innovation. It is equally important for developed and developing economy. In developed economy people are confident, high access to their capital and availability of information rate is high so people can easily start their ventures and also they don’t hesitate to invest on research and development. Contrary entrepreneurs from developing economy are suffering from different problems as mentioned above.

There is no shortage of entrepreneurship in developing countries. But the policy and institutional environment is an important determinant of innovative behaviour. Gov- ernment support for innovation is important. This can take many forms ranging from reform of the environment for doing business to providing venture capital, to tapping into migrant workers and diasporas, provision of technical and managerial education, infrastructure and more active state– private-sector partnerships (Wim Naude & Goed- huys, 2011). Talking about the countries like Nepal which is agriculture and remittance based economy continuously suffering from power cut problems. People are shying to invest on production and manufacturing sector because of power cut and political inse- curity. People income level is increasing because of remittance and same time number of dependent family members also increasing. Most of the remittance is either expending on general expenses or for luxury items. They don’t want to establish enterprises because of lack of knowledge, confidence and volatile market. Improper policies government motivation and social culture to be a migrant worker are the next important factor affecting their entrepreneurship.

Developing countries have their own problems and which are rigorously affecting entrepreneurship environment. Political, economic, social, cultural, psychological factors are the common factors for developing as well as developed countries. But there are International Conference on Entrepreneurship IEC 2014 - 217 - special factors for developing countries like lack of entrepreneurial education, political vandalism, long and complex process of registration, injustice, corruption, lack of skilled manpower, technology and power problems continuously affecting economic development of developing countries.

Most noticeable point to those who are starting their start-ups in developing countries doesn’t know how to grow. They start the enterprise but cannot expand their scope because they don’t know about the marketing, competitiveness, pricing policies and most important they can’t wait for long time. They need immediate change and profit but they don’t know how to grow and make profit. All the problems are somehow associated with their knowledge level and business environment. This scenario indicates that government has lots of stuffs to be done for the entrepreneurship development. Training, access to the capital through loans, security of investment, justice, e-governance and realistic accessibility on market information, regular supervision and entry stage tax subsidy are the major contribution government can do for entrepreneurship development.REFERENCES Ács, Z. J., & Virgill, N. (2009). Entrepreneurship in Developing Countries. Jena economic research papers, No. 2009,023.

Audretsch, D. B., & Keilbach, M. (2006). Entrepreneurship Capital – Determinants and Im- pact on Regional Economic Performance. Boston: American Economic Association.

Brockhaus, R. H., & Nord, W. R. (2013). An Exploration of Factors Affecting the Entrepre- neurial Decision: Personal Characteristic vs. Environmental Conditions. Academy of Man- agement, 1-10.

Chalise, B. (2014, 1 22). Blog. Retrieved from Bharat Chalise: www.bharatchalise.webs.com

Doing Business 2014, World Bank. (2013). Doing Business 2014 Understanding Regula- tions for Small and Medium-Size Enterprises. Washington DC: A World Bank Group Corpo- rate Flagship.

Drucker, P. (2014, 1 28). MBA in 1 Day. Retrieved from MBA in 1 Day: http://www.mbainone- day.com/gclid=CISjk8DR2rUCFYwa6wodwEoAvg

F.H.Stephena, D. U., & Hemmenb, S. (2005). The Impact of Institutions on Entrepreneural Activity. New York: Wiley Inter Science.

- 218 - International Conference on Entrepreneurship IEC 2014 Fransisco Linan, J. C.-C. (2005). Factors affecting entrepreneurial intention levels. 45th Congress of the European Regional Science Association (pp. 1-18). Amsterdam: European Regional Science Association.

Green, D. J. (2014, 1 22). Developing Innovative Ideas for New Companies: The First Step in Entrepreneurship. Retrieved from Coursera, University of Merryland: https://class.coursera.org/innovativeideas-005

Hessels, J., Gelderen, M. v., & Thurik, R. (2007). Entrepreneurial aspirations, motivations, and their drivers. Small Business Economics Forum.

J. Hessels, M. G., & Thurik, R. (2007). Entrepreneurial aspirations, motivations, and their drivers. Small Business Economics Forum., 5.

KC, D. F. (2004). ENTREPRENURES IN NEPAL : An Empirical Study. Kathmandu: Tribhuwan University Nepal.

Lorraine Uhlaner, R. T. (2004). Post-Materialism: A Cultural Factor Influencing Total En- trepreneurial Activity Across Nations. Entrepreneurship, Growth and Public Policy (p. 20). Geneva: Entrepreneurship, Growth and Public Policy.

Stephena, F. H., Urbanob, D., & Hemmenb, S. v. (2005). The Impact of Institutions on Entre- preneural Activity. Wiley Inter Science.

The Kathmandu Post. (2010, 11 10). Nepal Among Top 5 Countries. Business and Economy, p. 2.

The World Bank. (2013). GDP Per Capita (US$). World Bank.

U.S. Department of State/Bureau of International Information Programs. (2008). Principle of Entrepreneurship. Taipei: U.S. Department of State.

Wim Naude, A. S., & Goedhuys, M. (2011). Innovation and Entrepreneurship in Developing Countries. UNU-WIDER, 1-8.

World Economic Forum. (2010). Entrepreneurship. Summit on the Global Agenda. World Economic Forum.

International Conference on Entrepreneurship IEC 2014 - 219 - - 220 - International Conference on Entrepreneurship IEC 2014 SOCIAL ENTERPRISES IN ALBANIA AS INSTRUMENT IN FUNCTION OF SOCIAL WELFARE Phd.Julejda Gërxhi

Department of Law, “Pavaresia”University” Vlore, Albania

ABSTRACT

In Albania, the concept of social enterprise is still little known and the numbers of organizations that pursue a social purpose is limited currently, but are in the expansion trend.

On the definition of “social enterprise” in Albania, have discussions which vary according to context legal, organizational, economic and political, in which these operate.

In a general context, they broadly identify as independent private legal entity, which performs under the criteria productive entrepreneurial activities (continuity, consistency, quality, etc.), but the difference ordinary enterprises, aiming for a conclusion to the social order, which produces direct benefits in favor of a community or entities in need.

So, what define a social enterprise are not goods and services produced, but the objectives and modalities by which realized production.

Because of the contribution that these enterprises provide social welfare function, this paper aims to treat the advantages of enterprises in Albania, and support the de- velopmentKeywords: of a growing number of social enterprises in a legal and fiscal context clear.

INTRODUCTION social enterprises, law, social policy, entities in need, manufacture.

Social enterprises are organizations that follow trading strategies, but their goal is the maximization of social welfare and improvement of the social environment.

Social enterprises can be structured as profit organizations or non-profit, and may take the form of social cohesion, social business, or a charitable organization.

Social enterprises structured as commercial companies can consider yourself as a business with social objectives, but these objectives will make society towards strength- International Conference on Entrepreneurship IEC 2014 - 221 - ening financially attractive.

Social enterprises structured as non-profit organizations are not intended to provide benefits to their investors, but strengthening their capacity in order to meet their social goals. as (Venturi. P. Rago.S, 2012).

These structures have a mixed historical legacy between the United States and the United Kingdom, the European Union and Asia. In the U.S., companies have been set up under the slogan social “doing charity by doing trade”, as (Bruni. L., Zamagni. S., (by) (2009)) principles.In other countries, there is a much stronger emphasis on the structuring of social enterprises, focusing on community organizing, democratic control of capital and common

Even an increase in social business concept, which directly follow social responsibility, 1.or THE to raise CONCEPTION funds for charity OF SOCIAL projects. ENTERPRISES IN ALBANIA. pansion.In Albania, the concept of social enterprise is still little known and the number of organizations that pursue a social purpose is limited currently, but in trend in the ex-

Raising ideas for social enterprises in Albania are dizzying.

One idea is that a social enterprise can be treated as a business that trades for a particular purpose, that we clearly understand means “social mission”, so take this as the purpose of providing assistance for the poor, through sales goods or services to most or all of the revenue earnings they further the mission ‘social’ as (Zamagni.S, 2011a).

In a general context, they broadly identify as private independent legal entity, which conducts entrepreneurial manufacturing activities according to criteria (consistency, durability, quality, etc.), but unlike ordinary enterprises, aiming at an end to the social order, the which produces direct benefits in favor of a community or entities in need.

So what define a social enterprise is not goods and services produced, but the objectives and modalities by which realized production. Through the employment of persons belonging to vulnerable groups, as (Galera, G. Borzaga, C., 2009).

Creating social enterprises in Albania has its origins in 2012, with the implementa- - 222 - International Conference on Entrepreneurship IEC 2014 tion.tion of the project “Social Enterprise: self-reliance instrument Albanian population” cost 540 thousand euro, conducted with co-financing of the Italian Development Coopera-

This project aims to support the establishment of four social enterprises located in four cities in Albania and to be administered by an association each partner.  Enterprises are raised: a machine shop in Tirana with NGOs mechatronics “COL’OR Albania”, enterprise in Shkodra catering Women’s Center “Easy Steps” nursery seeds in Elbasan with NGO “Another Vision” laundry in Vlora with NGOs “Hearth.

Each of these enterprises, the development of activities, involving layers in need (of socialwomen activities victims inof favorviolence, of the women community. at risk / victims of trafficking, originating new contexts in need of long-term unemployed, etc.) and will reinvest a portion of revenue in

The main aim of this project was to create a desk, with a view to organizing and lob- bying support activities, favoring and promoting the adoption of a framework law ad hoc, which will favor the emergence and development of new social enterprises.

This combination of interventions will allow certain categories of people in need, to provide employment opportunities, thanks to the development of social enterprises, promoting local development processes in a perspective of supporting vulnerable social categories.

Currently in contrast to the rate of development of social entrepreneurship in Eu- rope, the concept of social enterprise in Albania remains relatively unknown except for a relatively small number of organizations that apply business practices to social goals during the performance of their mission.

These organizations, which operate mainly as non-profit organizations (NGO-s), in the most part are, or have been partners of foreign organizations operating in Albania, taking advantage of the financial support and technical assistance for a relatively long period of time for their activities non-profit organization.

These organizations (mainly Italian) have promoted the concept of social enterprises to their partners as part of the exit strategy, in order to ensure financial stability in the future after their withdrawal from Albania. International Conference on Entrepreneurship IEC 2014 - 223 - Albanian NGO-s for primary motivating principle for the adoption of social enterprise approach is to ensure long-term sustainability by diversifying the funding base of income from economic activity, as long as support from government grants and philanthropic support of initiatives have been and remain inadequate to meet the demands of civil society development.

In most cases, Albanian NGOs are in the early stages of adoption of approach to business, while another part of them are still in the planning stages of this approach. Chal- lenges they face and the traditions associated with the still fragile development of the third sector, the weakness of private sector development and ongoing institutional reforms being carried out in Albania for years.

All organizations that aspire to develop their social enterprise in Albania faced with maintaining the scale and structure of the activities they offer (especially with the cash flow), especially during the first phase of the development of their business concept. A theconsiderable community number they serve. of these organizations try and achieve economic activity in the areas of catering, crafts, cleaning, delivery of postal services, tourism services, offering

In this context the Government and civil society organizations in Albania, aware of the difficulties and socio-economic problems facing the country and the region in general, more important consider supporting and promoting social enterprises, as part of actions taken in the context of the reform of the single market and in line with the Eu- rope2. 2020PLANNING Strategy. AN EFFECTIVE POLICY ON SOCIAL ENTERPRISES IN ALBANIA.

According to the European Commission, should be considered as a social enterprise: “Businesses that provide social services and / or goods and / or services to persons in need (access to housing, health care, assistance for the elderly or disabled, the inclusion of vulnerable groups, child care, access to employment and training, dependency management, etc.), and / or businesses with a method of production of goods or services with a social objective”, as (Europea, COM 2010, 608)

Traditionally, social enterprises have proven an effective means to deliver policy objectives in two areas: social and economic, that social inclusion and providing services.

Social enterprises can facilitate social inclusion through workforce and labor market integration of marginalized individuals (egg long-term unemployed, disabled, national minorities, persons with disabilities, returned from emigration, ex-convicts, etc.) combining skills training and orientation towards the market through temporary employ- - 224 - International Conference on Entrepreneurship IEC 2014 ment and / or permanent to a business with a social objective that trades in the market, as (LippiAbout Bruni.their contribution M, 2012) to the provision of services, social enterprises often operate in the provision of welfare / social services for specific groups of individuals or within certain regions and communities.

Participatory nature of social enterprise presents unique advantages in relation to the engagement of stakeholders in the design and delivery of these services.

Their approach may offer advantages in terms of efficiency, customer satisfaction, the contribution of non-monetary resources from beneficiaries and other stakeholders, identify gaps in service delivery and piloting new services that contribute to social cohesion and achieve objectives other policy.

This explicit reference brings the impact of social enterprises in spatial development, at a time when social and territorial cohesion justify the legitimacy of the use of this instrument that can be summarized under the label of “local economic development”.

In the context of negotiations on EU accession process in Albania, policy instruments to support local economic development should be present in the negotiations about the chapter 11 (Agriculture and Rural Development) and Chapter 22 (Regional policy and coordination of structural instruments) to acquits, as (Europea, Iniziativa per l’imprenditoria sociale,, (2011))

Social enterprises are often networked and connected to the mainland where operating and generate positive externalities in terms of local social services.

Some of these services may be provided by other organizational forms (traditional enterprise and public sector), but often with higher costs or less effective ways due to contract and market imperfections. business.In this context, social enterprises are characterized by many institutional features that are simply efficient and cost effective in alleviating the grievances that offers public

He proposed method allows an analysis of the role and functions of social enterprises

Albania within two traditional dimensions of policy (social security / service delivery and social inclusion), but at the local level, which will also tote that most stakeholders International Conference on Entrepreneurship IEC 2014 - 225 - are located locally, so that social enterprises to better position to meet localized needs.

Building them locally brings an increase in social welfare at the local level through activities that promote the realization of income and employment for the community in need, promoting redistribution activities.

For these reasons, meeting the needs of localized and blocking of assets, makes the activities undertaken by the social enterprises are often relatively stationary.

For this reason they represent a source of permanent rooted and development, which are less at risk of delocalization compared with other traditional activities of business that2.1 are Specific more integrated challenges into in the Albania wider policiesproduction. regarding social enterprises. ment.Specific challenges facing Albania in policy areas that we have identified above are consistent with the assessment of the importance of social enterprise as a policy instru-

The main reference for the establishment of a benchmark is the Stabilization and As- sociation Agreement with Albania and the Commission Opinion on Albania’s application fortion membership for EU membership. in the European Union, and subsequent assessments that appear on progress reports (2011, 2012, and 2013). In 2009, Albania submitted its formal applica-

In its Opinion on Albania’s application (in 2010), the Commission considered that before that accession negotiations be opened be formally, Albania still had to achieve a necessary degree of compliance with the membership criteria and in particular to meet the 12 priorities key issues identified in the Opinion. ployment.In relation to social inclusion and service delivery, Commission Opinion noted that: • Gender equality is not fully guaranteed in practice, in particular in the field of em-

• Roma minority face very difficult conditions of living and limited access to employment education and social services. • The existence of agreements open to informal work continues to distort severe la- bor2.2 market Selection and unemployment of policy instruments remains high. on social enterprises.

Choosing social enterprise as an efficient instrument in Albania will depend on how specific challenges socio - economic policy objectives, targets and indicators are read by - 226 - International Conference on Entrepreneurship IEC 2014 policy makers.

Opinion of the European Commission and Progress Reports have placed a special emphasis on the extent of social enterprises from central to local level, and the specification of several target groups, social inclusion and employment, particularly in connection with programs active labor market .

In order to improve the impact on social and economic conditions of individuals ev- eryUnder social enterprisesthis aspect directlyrequired: or indirectly requires legal protection.

• First, an efficient legislative framework is necessary, social enterprises should have legitimacy, (proper legal status). • Second, social enterprises need a separate financial scheme, providing specific grants, appropriate differentiated by typology (by sector and / or dimension of enterprises or their localization); • Third, the adoption of fair and transparent rules of the market, r represents the necessity to ensure a fair competition between all social enterprises involved in manufacturing or services in the market • Finally, the government and public administration can play an important role through facilitating networks to supply technology transfer, as well as providing qualified administrative assistant with a low cost. terprises. The effectiveness of public intervention is essential for future productivity social en-

All these initiatives require serious political commitment, coordination, stamina and timeRECOMMENDATIONS: for normal functioning and efficiency of social enterprises. 

Entrepreneurship and social enterprises in Albania, although in the initial stages are development, are considered important forms in the fight against poverty, alleviating unemployment and labor market integration of disadvantaged groups and have considerable development potential.

Serious difficulties for domestic organizations that strive to develop social entrepreneurship is the lack of practical experience from their managers, executive directors capitaland members assets. of governing bodies. Operating with NGO status, they remain dependent on grants from foreign donors not dispose of accumulated financial resources and other

International Conference on Entrepreneurship IEC 2014 - 227 - 

Lack of a clear policy from the government not to recognize and support social enterprises, makes the status of their non-profit considered not suitable for generating income from these activities. This is because NGOs that carry out economic activity subject to the same tax obligations as well as business and any other productive enterprise, or business. The main problem is especially application of VAT to services provided, which is a not insignificant burden to low income they generate

Important remains also financial support from particular instruments as assistance and know-how type of public institutions responsible, through the operation of various financial instruments, access to public procurement, etc. Attention should also business.be made to the design and implementation of non-discriminatory rules of the market to ensure the normal operation of social enterprises in relation to other entities traditional 

As in any other field, the development of social enterprises is necessary to encourage and development of partnerships between public institutions at central and local levels, civil society organizations, business organizations, universities and educational enterprisesinstitutions, in and Albania. other interested stakeholders to strengthen capacities, identifying and developing innovative policies that enable the development and empowerment social 

Referred statements approved by the European institutions to support social enterprises, it is necessary that the ministries responsible for activities related to social enterprises, especially the Ministry of Social Welfare and Youth, should adopt partnership with NGOs and other stakeholders to stimulate activity perspective of these enterprises with the necessary supportive legal and social policies of thisIn sector this context, in Albania. review and submission to the Assembly for approval of bill proposed Social Enterprise Forum will constitute an important impetus to the development BIBLIOGRAPHY Bruni. L., Zamagni. S. ((by) (2009)). Dizionario di Economia Civile. Città Nuova, Roma.

Europea, C. ((2011)). Iniziativa per l’imprenditoria sociale,. COM (2011) 682.

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- 228 - International Conference on Entrepreneurship IEC 2014 Galera, G. Borzaga, C. (2009). Social enterprise: An International overview of its conceptual evolution and legal implementation, Social Enterprise Journal, 5 (3), pp 210-228.

Lippi Bruni. M, R. U. (2012). Il ruolo delle mutue sanitarie integrative. Le societa di mutuo soccrso nella costruzione del nuovo welfare di comunita. D.Mulino, Bologna.

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International Conference on Entrepreneurship IEC 2014 - 229 - - 230 - International Conference on Entrepreneurship IEC 2014 THE IMPACT OF HUMAN, SOCIAL, CULTURAL AND FINANCIAL CAPITAL ON NASCENT ENTREPRENEURS’ IN PAKISTAN AAMAR ILYAS

Lahore, Pakistan [email protected] of Central / # 0092-331 Punjab 434 425 3

ABSTRACT

The objective of this paper is to examine the significance of four different types of capitals – human, social, cultural and financial – to engage in informal entrepreneurship. The main research question in this study is that, are these types of capital having any impact on nascent entrepreneurs to engage in informal entrepreneurship? Data collected on empirical approach through face to face structured interviews from Lahore city to assess our hypothesis. Our sample consists of 1200 nascent entrepreneurs from mobile and computer retail enterprises which located in Lahore city. Snowball sampling technique is used in this paper to collect the information from those entrepreneurs who are willingness to engage in entrepreneurship. Findings depicts that different forms of capital has effect on people’s likelihood to informal entrepreneurship in Pakistan. This is first study in particular nature that attempts to investigate the influence of four types of capitalsKeywords: to engage informal entrepreneurship.

Research Paper Nascent entrepreneur, Informal entrepreneurship, Social capital, Cultural capital, Human capital, Entrepreneurial intention, Financial capital, Pakistan Paper type INTRODUCTION

Porter (1990) explains the entrepreneurship as it is ‘at the heart of national advantage’ (Porter, 1990). Recently, entrepreneurship has been considered as a main source of creating jobs and enhancement of the economic value. 50-60% of GDP of many countries is generated by small medium enterprises which is managed and owned by entrepreneurs. In many countries, this scenario has been extensively recognized that a large amount of economic activities is captured by the shadow economy and a sizeable part of particular such work is performed by persons who work as self-employed (ILO, 2002a, b). According to Schneider (2011) that 60 percent of work or 24.9 million people of Pakistani labour force are engaged in shadow economy. Now, informal economy is extensively considered as “hidden enterprise culture” (Smallbone and Welter, 2001; De Soto, 1989; Williams, 2006). International Conference on Entrepreneurship IEC 2014 - 231 - Resource-based theory of entrepreneurship explains that those people have more likelihood to become entrepreneurs who have more unique and valuable resources (Honing, 1998; Barney, 2001; Alvarez and Busenitz, 2001; Kim et al., 2006). Different types of resources as described in different studies are as human and social (Davids- son and Honing, 2003; Chiles et al., 2007), financial capital (Schweinbacher, 2007) and cultural capital (Kim et al., 2006). Previous empirical studies measure the influence of these capitals to enter into entrepreneurship and the entrepreneurial intention to formal entrepreneurship (Kim et al., 2006; Cetindamar et al., 2012). Existing studies do not measure the influence of such capitals on informal entrepreneurship. So, this study attempts to cover this gap with the following question; are these types of capitals have onany nascent impact entrepreneurs.on nascent entrepreneurs to work in informal entrepreneurship? This paper investigates significance of four types of capital - human, social, cultural and financial –

The rest of this study is broken down as go after: next section develops the theoretical model after examining the existing literature and develops the hypothesis with the help of literature. Section three will describe the research design and how to measure briefthe dependent conclusion. and independent variables such as human and social capital and the next section will cover the results and data analysis. Fifth section of paper represents the

Many scholars have faced difficulty to define entrepreneurship (Hull et al., 1980; Shaver and Scott, 1991; Jones and Spicer, 2005). Researchers define entrepreneurship in virtuous and positive mode as “economic heroes” (Cannon, 1991) and “super heroes” (Burns, 2001) in their studies but on the other hand few scholars find the entrepreneurs with shady characteristics (Collins et al. 1964; Burns, 2001; Armstrong, 2005). Colin William (2006, 2007, 2010) defined informal entrepreneurship in his different studies as “somebody actively engaged in starting a business or is the owner/manager of a business that is less than 42 months old who participates in the paid production and sale of goods and services that are legitimate in all respects besides the fact that they are unregistered by, or hidden from the state for tax and/ or benefit purposes” (Williams, 2006, 2007, 2010). The people who are trying to engage in creating new business are called nascent entrepreneurs (Simões J, 2012; Wagner J, 2004). Ideally, this paper typically concentrates on nascent entrepreneur, nascent entrepreneur are those people who are still trying to create and build the resources for a new firm (Reynolds and White, 1997). We define the nascent informal entrepreneurship in this paper as entrepreneurship which will start in near future or is in progress to initiate that having legitimacy in informalall respects, entrepreneurship besides this fact in thatthis entrepreneurshippaper. is unregistered or hidden from the state for any beneficial purpose or for tax avoidance. We use this definition of nascent

- 232 - International Conference on Entrepreneurship IEC 2014 THEORETICAL FRAMEWORK Human Capital

Tom Schuller (2001) indicated different growing types of capital such as to physical, financial and natural. In this study we focus only four types of capital: human, cultural, social and financial. Some definitions of these capitals are discussed first. This type of capital may be differentiated from social and financial forms of capital as the set of competences, knowledge, skills, and personality characteristics embodied in personal capability to execute economic value (OECD 1996, P. 9; Sullivan and Sheffrin, 2003). The notion of human capital conceived from the above definition is that, people take experience, own different skills and knowledge that become the source of economic productivity to their respective firms and themselves. Now extensively used the theory of human capital that was introduced in an article “Investment in Human Capital” by Schultz (1961) in his study and this concept has been extensively extended by Becker (1964) in his study. Schultz (2001) mentioned in his study that skill and knowledge both are the form of human capital and he compared the knowledge and skills which he acquires to get the means of production. These theorists argue that skills and knowledge boost the personal abilities to direct effective activities and more productivity (Schultz, 1959; Becker, 1964). Parnes (1984) discussed different elements of his definition of human in his book, first knowledge and skills are denoted as capital because these boost the economic productivity, ability by providing such knowledge and skills. Second element discussed by Parnes in his definition is that human capital is the result of purposeful investment which is known as cost acquired to gain skills and knowledge. Third and final, human capital can command a price because they are valuable in the production. Few researchers argue that this type of capital is critical resource because economic actors acquire knowledge and skill to enhance their economic productivity and create the value (Hitt et al, 2001; Schuller, 2001).

Normally two types have been discussed in literature of human capital, education and experience, used to analyses the labour force (Kim, Aldrich, and Keister, 2006). If any product gap or opportunity exists in the market, people who have higher human capital are more interested to pursue the opportunity than who have low human capital. Schuller (2001) mention in his study that education is the important element of this types of capital (Schuller, 2001) that foster the individual to join entrepreneurship because education plays a role to enhance the skills and knowledge (Hitt et al. 2001) and education also enhance the communication skills and effective decision making (Gupta and York, 2008). Human capital gives more awareness about documentation, legitimacy and classifies the people by their ambitions and objectives (Kim et al. 2006).

The relationship between formal education and entrepreneurship is considered amalgam (Davidsson and Honig, 2003) and traditional thinking suggests that higher ed- International Conference on Entrepreneurship IEC 2014 - 233 - ucation has positive impact on new entrepreneurs (Delmar and Davidson, 2000). Some researchers confirmed that education is a crucial instrument to enhance the standard of society in developing countries (Aycan, 2004; Kusku, Osbilgin and Ozkale, 2007). On the other hand, no direct relationship lies between formal education and entrepreneurship (Bates, 1997) because common technical and business skills can learn through training and specialized course, for example, vocational training and programs facilitate the people to gain knowledge of business skills or trade techniques rather than traditional school and college education (Kim et al. 2006). Recent studies of Cetindamar (2012) and Olawale (2011) investigate the human capital with a single education variable; they demonstrate positive relationship of education with entrepreneurship. The previous study measures the relationship of formal education and formal entrepreneurship. The existing literature doesn’t show any study on the association among informal entrepreneurship and education. In this study we analyze the impact of education on informal entrepreneurs’H1: intention to informal entrepreneurship. Thus, we hypothesize: ship in Pakistan. There is a positive relationship between education and informal entrepreneur-

In addition to human capital, previous studies mention that experience may be a vital module of human capital (Kim et al., 2006). Entrepreneurs face many difficulties to start entrepreneurship without work experience. We believe that informal entrepreneurs may be forced to pursue the opportunity to join entrepreneurship with different forms of experience. This study focus two type of experience: full time and part time workH2: experiences. Thus, we hypothesize: ship in Pakistan. There is a positive relationship between Experience and informal entrepreneur- Social Capital

According to Wu (2008) that there is no one perfectly defined social capital (Wu, 2008). But in the same year Acquaah (2008) published an article titled “Social capital of the benefits, potential cost and prospects” that divided social capital into two internal social capital, that deals with social networking connection between actors (that is, member of system) of organization, and external social capital, that entirely concentration on social networking connections (Schuller, 2001; Acquaah, 2008). According to Baker (1990) social capital refers as the ability to create some changs in the existing relationship within actors (Baker, 1990). We believe that networking will foster to infor- malH3: entrepreneurs to join entrepreneurship. We hypothesize:

There is a positive relationship between networks and informal entrepreneur- - 234 - International Conference on Entrepreneurship IEC 2014 ship in Pakistan.

Parcel (1993) defines family capital as another form of social capital that develops the relations within family (Parcel and Menaghan, 1993). This type of relation refers to family relations such as parents and children relation (Coleman, 1988). Many scholars believed that family capital had positive impact to start entrepreneurship than social capital (Birley, 1985; Bhagvatulah et al., 2008). Cetindamar et al. (2012) measure the relationship between family sizes with formal entrepreneurship, they didn’t touch informal entrepreneurship. But the existing literature doesn’t measure the relationship with family capital and informal entrepreneurship. So, we believe that family capital has a positiveH4: impact on informal entrepreneurship. So, we hypothesize: ship in Pakistan. There is a positive relationship between family size and informal entrepreneur- Cultural Capital

Those children are more interested to become an entrepreneur whose parents already engage in entrepreneurship (Western, 1994; Blau and Duncan, 1967). 32 percent of adults come to entrepreneurship form those families who are previously connected to business (Steinmetz and wright, 1989). Few scholars found that positive relationship among father’s self-employment and childrens’ self employment (Hout and Rosen, 2000; Butler and Herring, 1991). The cultural capital as pre-market work experience and informal training that enhance the interest level to start a new business (Lentz and Laband, 1990). We believe that cultural capital has a positive relationship with informal entrepreneurship.H5: Thus, we hypothesize: in Pakistan. There is a positive relationship between cultural and informal entrepreneurship Finance Capital

A number of researchers argue that the most important capital for entrepreneurship is financial capital (Kim, Aldrich and Keister, 2006; De Bettignies and Brander, 2007). Van (2003) divides financial capital in two categories i-e debt and equity (Van P, 2003). The rate of entrepreneurial activity in US is higher than others countries because in US availability of loans is very easy, venture capital also provide loans to entrepreneurs and angel funding (Gupta and York, 2008). Some evidence form empirical studies show that the association between entrepreneurial entry with financial capital is mixed. Financial capital, respondents were US entrepreneurs, was not well analyst of start-up (Kim et al., 2006). Some scholars proposed the reasons why not well predictor that US entrepreneurs have alternative sources to access the financial capital (Schweinbacher, 2007). In International Conference on Entrepreneurship IEC 2014 - 235 - small business majority of finance access through own resources rather than external funding (Acs, Carlsson, and Karlsson, 1999). Thus, in under developed and developing countries, we believe that there is a positive relationship among personal income and informal H6: entrepreneurship. We hypothesize: neurship in Pakistan. There is a positive relationship between financial capital and informal entrepre- Data and Method

We collected data on empirical approach through face to face structured interviews from Lahore city, which is provincial capital of Punjab, to assess our hypothesis. Our sample consisted of 1200 informal entrepreneurs from mobile and computer retail business which located in Lahore city. Lahore city is divided into ten areas for local administrative. We selected five towns and selected 200 respondents from each town for this study. These include Shalimar Town, Samanabad Town, Data Ganj Baksh Town, Ravi Town, Johar Town and Allama Iqbal Town. Why we select the retail enterprises than other? According to economic census of Pakistan held in 2005 that majority of startup are in retail businesses than other types of industries (Economic census, 2005). In this survey the interviewee was asked to respondent that he is currently engaged in starting a new informal business. Those respondents, who responded in positive, are believed to be nascent informal entrepreneurs and those who reply in negative are considered inas informalemployees, entrepreneurship. not nascent informal entrepreneurs. Snowball sampling technique was used in this paper to collect the information from those entrepreneurs who are engaged Variables

Dependent Variables: In this study we used engagement in informal entrepreneurship as dependent variable. We coded 1 to our dependent variable as if participant was informalgiving the entrepreneurship. response in yes to the following question: Are you trying to engage in informal entrepreneurship? So, we had 900 participants who had answered yes to engaging in

Independent Variables: We employed education and work experience to measure the significance of human capital. First independent variable is education; this variable is mainly to use the measurement of human capital. We developing five categories in this study to measure the education variable: (1) illiterate (2) primary (3) secondary and high school (4) matriculation (5) master and doctorate level. Previous studies provide evidence that we can also use work experience to measure the human capital. We coded work experience in six categories: (1) no experience (2) less than 1 year (3) less than 2 years (4) less than 3 years (5) less than 4 years (6) 5 or more than 5 years. We used - 236 - International Conference on Entrepreneurship IEC 2014 networking and family size as a measure of social capital. We developing two items for the measurement of networking variable: (1) have any contact with suppliers before your own business (2) have any contact with customers before your own business. Lit- erature suggests that you can use the family size to measure the social capital. Family size means total family member who living in house (Cetidamar et al. 2012). Partici- pants were assigned to four items to measurement the family size variable: (1) less than three persons live in house (2) three to four persons (3) five to six persons (4) seven or more than seven live in a house. Based on the earlier studies we include the cultural capital in this study because the many entrepreneurs motivate to start own business and learn through family business. Cultural capital variable measure the following items: (1) no family business (2) one family business (3) two family business (4) more than two family business. Personal income used for the measurement of financial capital. We used six indicator of income: (1) no income (2) less than 10,000 Pk rupees (3) less than 20,000 Pk rupees (4) less than 30,000 Pk rupees (5) less than 40,000 Pk rupees (6) more than 40,000 rupees. We used four items for the measurement of entrepreneurial intention that is a moderator variable: (1) formal employment (2) informal employment (3) formal entrepreneurship (4) informal entrepreneurship. In this study we used age and marital status as control variable. We use four categories to measure age: (1) 16-20 years (2) 21- 25 years (3) 26-30 years (4) 31-35 years (5) 36 -40 years (6) 41 years and over. We coded 1 if respondent is unmarried (single) or if married then coded 2. We used SPSS software in this study for statistical data analysis. Results

Descriptive statistics, means and standard deviations, are presented in Table I for the dependent and independent variables. The logit coefficients present in Table II for regression analysis. The results of this study report in two models. Model 1 presents the four forms of capital with control variables and Model 2 presents these form of capital with the effect of moderating variables. Entirely, analysis of the data which collected from Lahore young nascent entrepreneurs that shows the collective effect of these four forms of capital. 18 percent of the variance explained in dependent variable, willingness to informal entrepreneurship (p < 0.000).

Hypothesis 1 and 2 proposed that human capital, education and prior work experience, would be significant relation with likelihood to informal entrepreneurship. Table II shows that secondary and high school level had positive relation with willingness to informal entrepreneurship. Model 2 shows that entrepreneurs with secondary and high school level education were 1.739 times more willing to engage in informal entrepreneurship as compare to higher educator and those who have no or basic education. Sim- ilar hypothesis 2, work experience, is also positive associated with likelihood to informal International Conference on Entrepreneurship IEC 2014 - 237 - entrepreneurship. Table II shows that more work experience is more attractive to join informal sector than less work experience. For example Model 2 of Table II shows that people with 3 year experience were2.886 times interested to informal entrepreneur- entrepreneurship.ship. Finding of this study suggest that work experience have more impact on entrepreneurs than higher education, basic and higher education have no further contribution to Table I: Descriptive Statistics

Variables Mean SD Min Max

N= 900 Informal entrepreneurship 0 1 Dependent Variable

Independent Variable Education 2.87 0.926 1 5 Work experience 3.57 0.831 1 6 Family size 2.88 0.872 1 4 Networking 1.45 0.478 1 2 Family business 1.25 1.638 1 4 MaritalMonthly status income 1.272.12 0.4450.689 1 26 Age 3.33 0.817 1 5

Hypothesis 3 and 4 proposed that social capital would be positively associated to willing in informal entrepreneurship. The finding of this paper shows that family size and networking had positive relation with likelihood to informal entrepreneurship. People are more interested, when their family size is more than seven members including parents than less family members. Because family members help to operates the business activities. Hypothesis 4 related to networking, when networking with business entrepreneurship.community who already working such nature of work then peoples are more interested to join such businesses. So networking had positive association with interest to informal

Hypothesis 5 proposed that cultural capital, measured as family business, would enhance the interest of engaging in informal entrepreneurship. Study found that, people’s shows more interest who already one business or no family business to informal entrepreneurship. For instance, as shown in Table II, people with one family business were 1.986 times more likely to informal entrepreneurship than two or more family businesses already.

- 238 - International Conference on Entrepreneurship IEC 2014 Final hypothesis proposed that financial capital, measured as monthly income, would be positively associated to becoming informal entrepreneur. This study found that monthly income had a significant association with being an informal entrepreneur. Those peoples are more interested to become informal entrepreneur their monthly income level is around 30,000 to 40,000 rupees (Pakistan currency, around 300 to 400 US Dollar).Table Peoples II: Results their of income logistic level regression is very low, analysis they of being a nascent informal entrepreneur on four kinds of variables

Variables Model 1 Model 2

Human capital i) Education

Education 1 (based on primary level) 1.344** 1.458** Education 2 (secondary and high school level) 1.529** 1.739** Education 3 (matriculation level) 0.791** 0.699** Education 4 (masters or doctorate level) 0.524* 0.622*

ii) Prior work experience

Experience 1 (less than 1 year) 1.232** 1.336** Experience 2 (less than 2 years) 2.156*** 2.268** Experience 3 (less than 3 years) 2.568*** 2.886** Experience 4 (less than 4 years) 1.538*** 1.762** Social capitalExperience 5 (5 and more than 5 years) 0.968** 0.996**

i) Family size

Family size 1 (three to four persons) 1.121** 1.031** Family size 2 (five to six persons) 1.628*** 1.928*** Family size 3 (seven or more than seven persons) 2.239*** 1.975***

ii) Networking 2.113*** 1.835***

Cultural capital i) Family business

No family business 1.679*** 1.789*** Family business 1 (one family business) 1.878** 1.986** Family business 2 (two family business) 0.754*** 0.698*** Family business 3 (more than two family business) 0.641*** 0.673***

International Conference on Entrepreneurship IEC 2014 - 239 - Variables Model 1 Model 2 Financial capital

i) Monthly income income 1 ( less than 10,000 PK rupees) 0.993** 1.251** income 2 ( less than 20,000 PK rupees) 1.361*** 1.699*** income 3 ( less than 30,000 PK rupees) 3.221*** 3.231*** income 4 ( less than 40,000 PK rupees) 4.326*** 3.568** income 5 ( more than 40,000 PK rupees) 3.928*** 4.284***

Control variables i) Age Age 1 (21-25 years) 0.834*** 0.882** Age 2 (26-30 years) 2.321* 2.551* Age 3 (31-35 years) 2.356* 2.898* Age 4 (36-40 years) 0.935** 1.153* Age 5 (41 or over the 41 years) 0.531** 0.428** Number of observation 900 900 ii) Marital status 1.427*** 1.589***

Log likelihood 2875.55 2735.30 Prob > chi square 0.000*** 0.000*** Pseudo R2 0.15 0.18 Notes: The above values represent the odd ratio, which derived from logistic regression. Depen- dent variable is ‘becoming a nascent entrepreneur’; independent variables are ‘education’, ‘experience’, ‘family size’, ‘networking’, ‘family business’, and ‘monthly income’; control variables are ‘age’ and ‘marital status’. Significant level: * p < 0.1, **p < 0.05, ***p < 0.01

Have very low likelihood to become informal entrepreneur because they have not sufficient resources to start a new venture. For example, as shown above table, people with high monthly income were 5.368 times more likely to participate in informal entre- preneurshipDiscussion as andcompared Conclusion to low monthly income.

The purpose of this study is to inspect the relation between four different forms of capital – human, social, cultural and financial – and people’s likelihood in informal entrepreneurship in Lahore, Pakistan. Pakistan is a developing nation located in South Asian region. Finding of this study exposed that secondary and high school level education had a significant association with willing to participate in informal entrepreneurship but higher education is insignificant. Work experience related to human capital, study - 240 - International Conference on Entrepreneurship IEC 2014 found that more work experience had positive relationship with intention to become informal entrepreneur. After data analysis researcher found that social capital (family size attractiveand networking), implications cultural for (familyinformal business) entrepreneurship and financial area. capital were positively related to engagement of informal entrepreneurship. Researcher believe about his findings have

This study boosts the intellectual knowledge of different kinds of capital for willingness to informal entrepreneurship (Kim et al., 2006). Researcher found that in Lahore, secondary and high school level education, higher work experience, large family size, more income earner and already family business were significant associated with engagement in informal entrepreneurship. The finding of this study in support of Davids- son and Honing (2003) and Cetindamar et al. (2012), who suggest that knowledge helps to explore the business opportunity and improving the entrepreneurial skills. Finding of Pakistani society also consistent with the finding of Kim, Aldrich, and Keister (2006, p.16) that is ‘too much education discourages attempted entrepreneurship’. Prior work experience is also part of human capital that enhance the technical and practical business skills which doesn’t teach in education, so experience creates a bug in peoples mind to start new venture. Finding about family capital measured as size of family is in support of Cetindamar et al. (2012). They had also explored that large family size positive associated with engagement in entrepreneurship. When finding about cultural capital, researcher did not find or not aware about such study which examined the link of cultural capital and engagement in informal entrepreneurship. That is possible in developing nations like Pakistan, cultural capital, measured as family business, significant associated with likelihood to become entrepreneur. Kim et al. (2006) found that financial capital have no relationship with entry into entrepreneurship, but finding of this study contrary with kim’s results. This study shows that there is a positive association among tionfinancial to entrepreneurship. capital and engagement to informal entrepreneurship. Finally, this paper suggests that in emerging economies like Pakistan higher financial capital boosts the inten-

The data of researcher’s study mentioned important issues in informal entrepreneurship: which determinants influence people entry to informal entrepreneurship in emerging economies. Findings depicts that different forms of capital has effect on people’s likelihood to informal entrepreneurship in Pakistan. Researcher believes that four forms of capital may be boosts the likelihood to become an informal entrepreneur. This studyLimitations highlights the future gaps and further research on informal entrepreneurship.

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- 246 - International Conference on Entrepreneurship IEC 2014 PROBLEMS FOR WOMEN ENTREPRENEURS: PAKISTAN NEEDS PRO-WOMEN ENTREPRENEURIAL PUBLIC POLICY Dr. Manzoor Ali ISRAN

[email protected] Shaheed Zulfikar Ali Bhutto Institute of Science and Technology, Karachi, Pakistan

ABSTRACT

Pakistan is a poverty-stricken country having an ever-growing population of around 180 million with dismal socio-economic indicators. It is a country where almost half of the population comprises of females who, from all walks of life, encounter increasing discrimination including opportunities for entrepreneurship. On one hand, these women lack ease of access to credit facilities, technology and other sufficient resources and on the other hand, face cultural and religious taboos that limit them within the boundaries of their household. The lack of opportunities on an equal footing has led to the un- derutilization of women’s potential of creative destruction, which if made use of, could benefit society by lifting it out of the sea of poverty.

This predicament of women in Pakistan can be attributed to what Diane Elson (1995) refers to as the ‘gender blind’ public policy which largely marginalizes women’s participation in economic activity. Despite it presently being an entrepreneurial economic era having possibilities to create jobs and enhance growth, thus far the state of Pakistan has been unsuccessful in designing a pro-women entrepreneurial public policy to boost female participation in economic activity. Regional economies like India, China and even Bangladesh are becoming entrepreneurial societies. So keeping in consideration this regional economic trend, it is advisable for Pakistan to follow this model. Recently, it was encouraging to see the Government of Pakistan led by businessman Prime Minis- ter, Nawaz Sharif, announcing a loan scheme for young budding entrepreneurs to open small business ventures. Before the Nawaz Sharif administration, the regime of Benazir Bhutto in 1990s had too, taken strong measures to stimulate the participation of women in economic activity by offering them easy loans; in this regard the First Women Bank was found.

However, this paper intends to examine the entrepreneurial disempowerment and how public policy perforated with gender blindness in Pakistan has marginalized women from mainstream entrepreneurial activity where women are simply treated as chat- tels, without any economic and educational rights to be a part of the market.

The paper, therefore, uses the conceptual framework of the ‘Male Bias’ theory con- International Conference on Entrepreneurship IEC 2014 - 247 - structed by Diane Elson ( 1995), with quantitative and qualitative research methodology so as to determine the effects of a male-dominated public policy on the participation of womenKeywords in entrepreneurial : activity.

INTRODUCTION Women, Entrepreneurship, Male Bias, Public Policy, Pakistan

Globally women entrepreneurship is gaining significant importance due to the emergence of successful women entrepreneurs around the world. Though women in Third World have yet to emerge as leading economic builders, their role in the development of the economy is being recognized and stressed. Even early economists like Rosentan Rodan and Nurkse stressed that the state should play a role to create an entrepreneurial class, without which society cannot acquire the critical mass for the development to take off (Todaro & Smith, 2008).

Women in Pakistan constitute 50 per cent of the population but their share in economic activity is only 3 per cent (ILO, 2011). They face exclusion and discrimination in economic life, including opportunities for entrepreneurship. They do not have easy access to credit; technology and other productive assets on one hand and on the other hand they are facing cultural and religious taboos, restricting them within the four walls of the household. The denial of opportunities and entitlement to productive assets on an equal footing has deprived women of utilizing their potential of what Schumpeter called ‘creative destruction’. The denial of that entitlement to productive assets has deprived women of opportunities to unlock their creative potential for family and social welfare. Sen (1987), in his incisive work on the ‘Entitlement’ theory argues that striping women of their entitlement to productive assets such as education, health, jobs, fiancé, land and etc., would put women at disadvantage in bargaining over the division of fruits of cooperation if their fall-back position tends to be worse off; and majority of women have a very poor fall-back position in society.

However, the reality is that the imaginary Schumpeterian entrepreneur class of women is confronting the onslaught of discriminatory state policies resulting into the nomi- nal participation in the market activity. Women are not encouraged to initiate or participate in any business activity due to what Diane Elson (1995) calls ‘gender blind’ public policies. The ‘male bias’ thesis of Diane Elson is vindicated by the ILO study (2011), according to which “for various capacity reasons the Ministries often result in reproducing gender blind policies which unfortunately are not gender neutral in their impact ( p.20). While showing its alarm, the study notes that their effects can be profoundly negative on women’s businesses, their lives and on poverty (Ibid).

- 248 - International Conference on Entrepreneurship IEC 2014 FAULTY POLICIES

Basically the problem with Pakistan is that public policy is not made on a scientific basis. Pakistan has an SME policy but this policy lacks empirical analysis and further processes of this policy are not followed. Usually, policy making starts with problem identification and then a range of solutions are suggested in order to address the issue. If we objectively analyze the SME policy, it lacks that processing (problem identification, agenda setting, implementation and evaluation), due to which it is failing to a mainstream gender perspective. It is in this context, Diane Elson (1995) advocates the formulation of gender aware/conscious policies through focus on gender relations rather than only women. To her, gender relations refer to social relations that differentiate between male and female roles and these relations operate in favour of male as gender and against female as gender. Because of ‘male bias,’ icing on the SME policies, there has been no betterment for women as far as their problems as entrepreneurs are concerned.

They are facing the same flurry of problems such as discrimination, limited access to productive resources, high transaction cost, high taxes, high registration fees and complicated procedures and bureaucratic red-tapism that discourage women to start business (ILO, 2011). In addition to these problems, women also lack property rights, carry the ‘triple burden’ (enterprise, household and child rearing) and encounter conflict within household because men hardly accept the economic role of women. All these problems are hindering women to start business. Besides these hurdles, there are also some other significant cultural and religious barriers which discourage women to go out and work with men because of division of society into public and private spheres, being reinforced by the debates about ‘Islamisation’ of society since General Zia who took over power in the 1977 Coup against the democratically elected Prime Minister, Zulfikar Ali Bhutto, whose Government was liberal and adopted pro-women policies in order to integrate them into the social, economic, cultural and political fabric of the society. Zia-ul-Haq introduced discriminatory laws against women such as the set of Hudood Ordinances and the Qanun-e-Shahadat Order (Law of Evidence Order). He confined women to the private sphere and promoted purdah. He suspended all fundamental rights guaranteed in the Constitution that had been adopted in 1973 and proposed laws regarding Qisas and Diyat, Islamic penal laws governing retribution (qisas) and compensation (diyat) in crimes involving bodily injury. When the victim was a woman, the amount of diyat was halved (Jehangir, 1990).

In Pakistan female entrepreneurs do not have the same opportunities as male entrepreneurs enjoy due to number of strong discriminatory socio-cultural, cultural and religious values (Roomi and Parrot, 2008). Generally, society has an inherent perception that women are inferior to men and they are supposed to remain in the home and to perform their roles as wives and mothers. This creates a big problem and is a challenge International Conference on Entrepreneurship IEC 2014 - 249 - for women. According to the study of Roomi (2005) conducted from 256 female entrepreneurs in Peshawar, Quetta, Islamabad, Rawalpindi, Lahore and Karachi, the biggest challenges for women entrepreneurs are; • Acquiring finance • Inability to mobilize start-up capital • Credit guarantees • Acquiring capital to Invest • Discrimination specially from bankers

Further the same study suggests that “women also do not approach banks because of; • Having no collateral • Failing to come up formal business plans • Social restrictions on their dealing with male professionals

The ILO sponsored study conducted by Goheer (2003) is seminal work providing critical insights into the position of women in economic activity. According to the study, women entrepreneurship is more linked with social class. Women from the upper class are more capable of starting business than women from the middle or lower class (Ibid). While conducting a study of 150 women entrepreneurs, it was found that 39 per cent women engaged in small enterprises and 9 per cent in medium size enterprises. The study further revealed that 73 per cent of the women started their business form their personal saving and over 50 per cent belonged to an educated class and most of the business is in traditional sectors such as boutiques, parlors and bakeries, handicrafts and jeweler (Ibid).

According to Goheer (2003), only 4 per cent acquired funds through formal meanwhile 73 per cent of them brought startup capital from private savings into the business. Even those women who acquired funds through formal sources, for collateral, used their personal assets. 27 per cent used their personal belongings; 18 per cent used the guarantee of government officers; 18 per cent pledged their house; and 9 per cent used their immovable property and 9 per cent used their dollar account as security.

The other factor that causes lower participation of women in entrepreneurial activity is the gender gap in education. The plight of female is lower than male. The female youth (aged between 15-24 years) literacy rate in Pakistan is 61 per cent against 79 per cent for males (Razaq, 2012). These gender gaps in education are creating educational inequalities and finally these inequalities cause disparities in creativity and innovation leading women to be recipients rather than contributors in the process of development (Kabeer, 2003)

- 250 - International Conference on Entrepreneurship IEC 2014 Pakistan is a signatory of the Millennium Development Goal agreement under which it has to remove gender discrimination by 2015, promote gender equality and empower women, but the current data shows that Pakistan is lagging behind and women are facing multiplicity of discrimination in mainstream economic activity. Pakistan’s SME Policy (2007) stated that special attention would be paid to offer equal opportunities to women and their share in SME would be increased to 6 per cent. However in the data collected by the Economic Census of Pakistan, female entrepreneurship represents only 2.4 per cent of the total 3.2 million enterprises in Pakistan (FBS, 2006). Most of women’s business are small with turnover of less than Rs. 1 million and investment less than Rs. 0.5 million (ibid). Moreover, FBS data reveals that the majority of women entrepreneurship is concentrated in the household sector.

Income inequalities have also been highlighted by the UNDP Thematic Paper on MDG 3, according to which, between 2003 and 2005, in Pakistan, men’s income rose by 17 per cent,CHALLENGES whereas women’s FOR FEMALE income wentENTREPRENEURS up by less than one per cent (UNDP, 2010).

Research in the past has recognized the various challenges of women entrepreneurship in Pakistan, varying from finance and information to customs and practices and to lack of access to education ingrained in society (Shabbir 1995; Roomi 2005a, 2005b). Collectively, these factors usually hamper women’s ability to build leadership qualities and to own and manage their own businesses. For instance, the female literacy rate is terribly low, only 36 per cent. Adding to this, just 6.6 per cent of girls enroll at the high school level, shrinking further to 1.2 per cent at the university level. This reduces the chancesSOCIO-CULTURAL of females becoming STEREOTYPES entrepreneurs and senior executives in companies.

Studies have shown that the total economic potential of women in Pakistan is un- derutilized as a result of entrenched discriminatory socio-cultural traditions and values, nested particularly in institutional support systems (Roomi, 2005a). According to the United Nations Development Programme (UNDP, 1996), there exists a strong inside-outside dichotomy, in which women are confined to the ‘inside’ area of their homes and households. This ‘inside’ implication inhibits women from access to education, training opportunities, employment and social services and this dichotomy remains to exist in Pakistan. The ‘outside’ reference points to the labour market where low educational acquirement along with social norms of restrained mobility restrict females to a limited range of employment and training prospects and lower wages. Restrained mobility also weakens the ability of females to perform their roles in the labour market as entrepreneurs or as paid workers. Research suggests that female entrepreneurs in Pakistan regard gender-related matters as the most challenging in the start-up operation of a International Conference on Entrepreneurship IEC 2014 - 251 - business: 28 per cent of the challenges faced were related to marketing, 26 per cent were related to family and 16 per cent were related to the government (Syed, 2010).

Women are constrained by their role in the family and home, playing only a supporting role in economic activity, due to their stereotyped reproductive image (Roomi 2005a; Syed 2008). An excessively patriarchal view on female modesty in Islam confines women’s mobility, hinders social networks and obliges a check on their economic activity. Despite the number of women becoming part of the formal economic sectors, in the last two decades equal treatment in the workplace has been difficult to grasp and detect (Sajjad and Raza 2007, p.3). For instance, in a study by Sajjad and Raza, many female entrepreneurs highlighted the struggle between their roles as a family person and a business person. In their study, one female commented that “My family thinks that it is not safe for women to operate from outside the house. I need to market my product more aggressively but I can only go out if accompanied by my husband who has his own business to look after too” (Ibid, p.6). According to Goheer (2003), the business atmosphere for females in Pakistan depicts a complicated interaction of two groups of factors. The first group of factors comprise of tribal, religious and socio-cultural components. This facet of the environment is embedded in the patriarchal system and visibly demonstrated in the lower status of females. The second group of factors is drawn from the first isgroup, impartial. comprising of legal and constitutional structures, institutional mechanisms and regulatory arrangements. The latter group is contemporary instead of traditional so it

However, family pressures, economic needs and the desire to have a better life are changing the traditional roles of women and they are now entering into fields as diverse as health,INVISIBILITY IT, and textiles OF WOMEN (Khatoon, IN SMALL 2000) BUSINESS

Several studies show that most of the women in Pakistan work in the informal sector (Zaidi 2005; Haque, 2007). The State has taken no steps to get them into the formal sector of the economy. This situation is mostly attributed to economic policies which are traditionally biased towards the elite at a large scale (Haque, 2006). Historically, Paki- stan has favoured big businesses due to the influence of the elite class on the formation of economic policies. Majority of females work in the informal sector and around 40 per cent of business takes place in in this sector, yet development in the informal sector has either been cold shouldered or remained invisible on the Government’s radar. Instead of promoting industrialization for growth, various policy measures focus on matters such as tariff protection and import licensing that has adversity affected the prospect of entrepreneurship in the country (Hussain, 1999, Zaidi, 2005)

- 252 - International Conference on Entrepreneurship IEC 2014 ACCESS TO FINANCE

Access to finance is another issue women are facing. It is making it difficult for women to start business (UNDP, 2007). The reason for inaccessibility to finance for women is that women do not have collateral assets which are a prerequisite for loans in Pakistan. Since most of women lack collateral assets, they are not beneficiaries of commercial loans. To resolve this issue, personal savings and family support are the main source for women entrepreneurs (IFC, 20007). The study of Roomi (2005) endorses the IFC study tion.and suggests that the major problem women entrepreneurs face in the beginning is that of access to capital, lack of business management skills and strict bureaucratic regula-

According to a report prepared by The Association of Chartered Certified Accoun- tants, the marginalization of women from the formal financial market has compelled women to rely upon personal savings, income from sale of personal jewelry, or loans from family or relatives (Sajjad and Raza, 2007). Another factor behind the exclusion of women, according to report, is women’s reluctance to get loans because of the fear of default, high interest rates, past experiences of banks difficulties in raising collateral and guarantors, lack of awareness of financing schemes, high risk averseness and social barriers; other factors deterring women to gain finance are social and cultural problems (Ibid).

Another problem that has discouraged women with low income is the attitude of male bankers and companies who turn away most of aspirant women entrepreneurs because of their lack of collateral. How does a woman with a very good business, plan being something where substantial collateral is required? It is an egg-chicken situation (Asia money, 2005)

The other problem faced by women entrepreneurs is that of market accessibility. Many women enterprises are confined to the informal sector having low turnovers. Market expansion requires experience, professional skills and market oriented strategy (Syed, 2010). According to Gillani (2003), women tend to stay in the ‘comfort zone movement’ mostly doing business with clients they know. Such view is also supported by Goheer (2003); his study suggests that women are less risk takers and avoid going levels,venturing respectively. into unknown markets. Majority of them prefer to operate within the same market and only 7 to 11 per cent extend their business to national and international

Research over time has found that the social networking of business suffers from gender specific deficits; even in developed countries, the social mobility of women is better than in developing countries. In Pakistan this problem is more acute due to so- International Conference on Entrepreneurship IEC 2014 - 253 - cio-cultural and physical barriers to women’s mobility. Most of the SME networks are male dominated with less or no gender aware policy.

SMEDA, the premier public institution responsible for making pro women entrepreneurship programmes, has currently adopted progressive SME policy in order to get women into business activity; It has taken a range of measures such as pre-feasibility study, marketing and technical assistance, business plan development and industry-ac- ademia linkages. These are good steps but not sufficient to alleviate the problems women entrepreneurs face. However, the most important step the Government has taken is setting up Women’s Business Incubation Centers (WBIC) and the Women Entrepreneurs Information Network (WIN), with the objective of providing initiatives and easy access of information on public and private levels to promote women entrepreneurship in the country. Further, SMEDA now plans to establish the Women Development Center on the demand of women entrepreneurs (SMEDA, 2014). No doubt, these are positive steps in the right direction but are not enough to address the core issues of women entrepreneurship. Further, WBIC does not cater to rural women entrepreneurs. What the Gov- ernment should do in order to alleviate the sufferings of women entrepreneurs, is to adopt a policy to affiliate institutions like National Commission on the status of Women (NCSW)POLICY as withBIASES SME AGAINST supporting WOMEN institutions.

There is a wide body of the literature accusing government policies of discriminating against women, to the extent of not creating an environment conducive to the participation and free movement of women in the entrepreneurial world. In Pakistan, government policies only pay lip service to the issue of women economic empowerment. Though Pakistan is a signatory to the MDGs, to remove gender gap, no concrete steps from different Governments have been taken to provide equal opportunities to men and women. Article 25 of the Constitution of Pakistan (1973) clearly offers guarantees of equality of rights to all citizens of Pakistan irrespective of sex, race and class and also empowers the Government to take actions to protect and promote women’s rights. But actual practices discriminate against women as far as their role in activity as producers and providers of service is concerned (Goheer, 2003)

Regulatory processes that govern SMEs have inbuilt bias and are gender blind; they are complex and discriminate and discourage women entrepreneurs by creating problems for women instead of facilitating them in becoming a larger part of economic activity and contributing towards overall national development. Such gender blind policies result in the huge loss of vital human resources. Programmes focusing on women and the economy are even being acknowledged by the Ministry of Women’s Development and assistance from the UNDP is being sought for the capacity building of females by - 254 - International Conference on Entrepreneurship IEC 2014 organizing training and other programmes to help in women empowerment. The Min- istry of Industry and the Production and Special Initiative have a number of steps to get women integrated into the economy; In this regard, many of women-targeted financial programmes such as the Agricultural Development Bank, the First Women Bank Limited (FWBL), The Pakistan Poverty Alleviation Fund (PPAF), the SME Bank, First Micro Cred- it, the Khushhali Bank and other public private sector organization have been developed. The most noteworthy is the recent Loan scheme programme launched by Prime Minster offering business an opportunity to youth, but is not targeted towards women.

In addition to Government efforts in creating different economic institutions to facilitate women becoming part of entrepreneurial activity at every level of the society, there are private organizations and NGOs working for the uplift and integration of women in mainstream developmental activity. The prominent, amongst them, are Pakistan Asso- ciation for Women Entrepreneurs (established in 1985), The Women Chambers of Com- merce and Industry (which has offices in various major cities, including Karachi, Lahore and Rawalpindi-Islamabad).

Also there are a myriad of NGOs working in rural areas with the objectives of promoting women entrepreneurship and striving to enhance the capacity of women by offering them trading and microcredit: the National Rural Support Programmes Network (RSPN) provides support mechanism for women in rural areas and semi-urban marginalized areas of Pakistan. Also, the Aga Khan Rural Support Programme (AKRSP) has initiated microcredit programmes for women in Northern areas of Pakistan. Likewise, The Sar- had Rural Support Programme (SRSP) and Thardeep Rural Development Programme (TRDP) are in the forefront to support and encourage women to get involved in entrepreneurship through microcredit services and capacity building initiatives. Other NGOs such as KASHF Foundation, Asasah, Sungi, Hawwa and Behbood have been helpful in supporting women entrepreneurs mostly in rural and semi-urban areas.

Besides NGOs, there is international support available to women. The United States Agency for International Development (USAID) is very active in promoting social development in the country. For example, after 9/11, from 2003-07, USAID provided $66 million for SME development (IFC, 2007). Canadian International Development Agency (CIDA) is also active in providing microcredit loans to women for the same purpose. Fur- ther, the Agha Khan Development Network created the first Micro Finance Bank Limited (FMFB) with the sole objective of focusing on providing SME loans to women. Similarly, the World Bank in collaboration with the Government of Pakistan is working to promote, facilitate and create an environment so that women can easily access markets. Very importantly, the International Financial Corporation has undertaken research to identify the financial and non-financial policy initiative (IFC, 2007). This is a major step on part International Conference on Entrepreneurship IEC 2014 - 255 - of IFC and will assist the Government and NGOs to further effectively pursue policies with regard to the inclusion of women into market activity as ‘entrepreneurs’. As a matter of fact, entrepreneurship requires creativity, innovation and initiative. So, state policies need to be designed in such a way to promote creativity and innovation and thereby turn society into an entrepreneurial society as it vital for growth and jobs. As Baumol (2007) argues, entrepreneurial economies are more productive, the state needs to take steps to transform managerial/command economies into entrepreneurial economies by encouraging entrepreneurial activity. According to Zoltan (2009), the whole façade of entrepreneurship is based on five key characteristics: 1. Markets and individual firms are replacing bureaucracies 2. Knowledge is more important 5.3. EqualFirm structure opportunity is more for all dynamic 4. The nature and process of innovation is very different

Zoltan (2009) basically purports that wherever these conditions prevail, entrepreneurship tends to blossom but the conditions stipulated by Zoltan either do not exist here in Pakistan or no attempt has been made to create them. Overall the situation is very grim, especially for women. And this way Pakistan is losing very vital human resources that otherwise can better be utilized for the welfare of the society.

A recent study of ILO offers very important insight in to the marginalization of women from economic activity and depicts a very dismal scenario despite Government efforts to create hospitable environment for women to be a part market economy. According to the ILO (2011) study, “Women in Pakistan continue to face constraints due to the prevalent socio-cultural norms that deny them equal access to facilities and opportunities. Paki- stan still ranks 128 out of 182 on Human Development Index (2010), 124 out of 155 on Gender Development Index (2009) and 132 out of 134 on the Global Gender Gap Report 2009. Pakistan women have limited access to resources; restricted rights, limited mobility and somewhat muted voice in shaping decisions make them highly vulnerable” (p. 5).

The study (ILO, 2011) notes that women participate in the labor force but mostly their participation is confined to the informal sector of the economy where they are paid poorly, their jobs are not secure and in order to meet their needs, they have to work for long hours. This is not only posing threat to their reproductive health but consequently to the welfare of their families. “The female labour force participation rate is 19.6 per cent as compared to males at 69.5 per cent. Women continue to be under-represented and underutilised in the economy and the labour market tends to be predominated by unpaid family workers in agriculture, who hold low paid, low skill jobs at the lowest tiers of the industrial labour force in urban areas” (Ibid, p.5 ). - 256 - International Conference on Entrepreneurship IEC 2014 The ILO (2011) study, therefore, finds following gaps in the SME policy: 1. The absence of ‘a gender sensitive SME’ policy and gender audits in the key Govern- ment Ministries such as Planning, Finance and Trade 2. The absence of gender responsive budgeting and the due allocation of funds/resources to the Ministry of Women Development both at Federal and Provincial level 3. Curricula and education system in Pakistan

If we objectively analyse Pakistan’s SME policy in the light of Diane Elson’s path breaking study “Male Biases” that attributes exclusion of women from development activity to male biases seen against women in the attitudes, actions, decisions and policies, we shall find that male biases are working against women and denying women access to productive assets such as access to 1) formal finance, 2) marketing support and networks, 3) technology, 4) skills development, 5) international certification awareness and 6) regulatory procedures by the Government.

While defining ‘male bias’, Elson maintains that it is asymmetry in gender relationship that is ill-founded and unjustified, and male biases are found in today’s attitudes and public policies that distribute resources by denying women of adequate access to productive inputs. This lowers women’s productivity and reduces total output in comparison to what could be achieved if resource allocation were free of gender biased distribution. It goes without saying that this male bias has been seen by many policy makers as major bottleneck in the way of growth of output. And this is also true in the case of Pakistani women entrepreneurs who are confronted by the evil of male bias at every level. Elson (1995) argues “male bias in development is encouraged by male bias in every day attitudes and policies by male bias in analysis reinforced by bias in policies” (p. 11). To shun those biases against women, she suggests more gender aware conceptualization of development policies, process and analysis through a focus on gender relations rather thanRECOMMENDATION on women. AND CONCLUSION

The above discussion clearly shows that public policies in Pakistan are suffering from male biases against women, depriving them of the necessary opportunities to unlock their potential to emerge as important players in the bustling market activity in the global world of business. The public policy currently in operation has inbuilt gender faults working against the interests of women while treating them as mere recipients when the research (Boserup, 1970, Kabeer 2003, Sen (1985) has proved that women can contribute considerably, provided they have a level playing field. But sadly this has not happened. They are not only exploited and controlled but their labor is not counted in national books. The Government needs to take concrete measures to deinstitution- alize male biases from public policy structures, remove women’s economic deprivation International Conference on Entrepreneurship IEC 2014 - 257 - and strive to create atmosphere providing equality opportunities to them. However, to integrate women into the mainstream developmental activity, the following steps need to be taken: 1. While developing SME policies, policy process must be taken into consideration with empirical analysis focusing on the gender perspective of entrepreneurship. 2. SME policies must be made more gender aware without male biases against women. Current policies shunned of all male biases and gender blind policies be discouraged. 3. There should be more women representation in the parliament so that they can provide vital input into the policy legislation. 4. Policies must be made to fill all the gender gaps existing between male and female, especially in education and technology. It is education and technology that determines a woman’s creative and innovative role. Women who are educated have higher probabilities of getting into business than women who do not have education. 5. Development policies must be designed in way to promote gender egalitarianism, giving equal opportunities to both male and female without discrimination. 6 Efforts should be taken by the state to ensure women empowerment, ensuring women’s access to all productive assets such as credit, education, technology and land. 7. Women’s access to finance and credit should be made flexible and the condition of collateral either be removed or tailored in a way to address the needs of women. 8. Specific policies must be made for rural women entrepreneurship and mobile financial credit facilities be introduced. preneurs.9 For the development of rural entrepreneurship among rural women, the Govern- ment should launch awareness campaign and arrange training for rural women entre- REFERENCES Amjad, A. (2007), Role of WBIC in women entrepreneurship development, presentation by the Project Director, Women Business Incubation Center, SMEDA.

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- 260 - International Conference on Entrepreneurship IEC 2014 WOMEN ENTREPRENEURSHIP IN ALGERIA Pr. Boufeldja GHIAT

[email protected] Faculty Of Social Sciences Oran University – ALGERIA

ABSTRACT

Algerian society has undergone major social changes, which have accelerated during the last two decades of the 20th century. This is due to the education policy which has become a requirement for all Algerian children without discrimination.

The traditional positions of Algerian women are housewives, but with the beginning of this century, Algerian society begins to see women in positions of responsibility. Many of them chose to be entrepreneurs, which indicate that the country is experiencing pro- found social and cultural changes.

Despite the improvement of her economy, Algeria is experiencing a high rate of unemployment, including among academics. This prompted the state to follow a policy of tureyouth into employment, entrepreneurship by giving businesses. them different facilities and granting them loans in order to create their own businesses. These factors have encouraged women graduates to ven-

The current environment in Algeria promotes access to education and training of girls, but the socio-cultural environment remains a difficult obstacle to overcome.

A questionnaire was developed for the purpose of this study. The sample covered 22 women entrepreneurs from Oran - Algeria, 19 of them are married with children, and 14 of them have a university degree.

The results showed that women entrepreneurs have strong personalities, marked by a spirit of adventure and initiative. These qualities are necessary for the success of entrepreneurship. The majority of women entrepreneurs complain of socio-cultural con- ofstraints. their enterprises. The support they receive from their friends and family members is a valuable contribution that helps them to overcome the problems encountered during the running

International Conference on Entrepreneurship IEC 2014 - 261 - The objective of this paper is the study profiles of entrepreneurship in Algeria, with special attention to women entrepreneurs and their socio-cultural constraints. Strate- gies developed by women entrepreneurs to confront the constraints of a male society willKeywords be examined. :

Women entrepreneurship. Socio-cultural constraints. Social change. Al- geria.WOMEN ENTREPRENEURS IN ALGERIA INTRODUCTION:

Algerian society has undergone major social changes, which have accelerated since the eighties of the twentieth century. This is due to the education policy which has become a requirement for all Algerian children without discrimination.

Algerian legislation regarding education and work, does not discriminate between the sexes. As mentioned by Nouara Ja'far , former Associate Minister for the Family , "on the one hand , there is the law that puts men and women on an equal footing . May another, the disparity between the sexes is still raging on the ground. In fact, it's a problem of mentality "( Belkhiri , 2012).

Algerian women had a culture of staying at home, but with the beginning of this century, Algerian society begins to see women occupying positions of responsibility. Many of them chose to be entrepreneurs, which indicate that the country is experiencing pro- found social and cultural changes.

Women entrepreneurs can be defined as those "who are not employed under an employment contract but are active either in self-employment or as a shareholder of a corporation. These women carry alone or in partnership, all the risks and financial responsibilities, administrative and social issues related to the development of their activities" (Cornet and Constantinidis, 2004).

The entrepreneur function requires mental and psychological capabilities to manage all aspects of production, competition and the management of relationships with employees and subordinates, as well as the confrontation of a multitude of physical, financial,This bureaucratic is not an andeasy human task for resources. men to venture into entrepreneurial activity in an en

- vironment full of challenges and constraints. Before opening on the market economy, Algeria has experienced a period of socialism where entrepreneurship was the business of the state. It is a challenge for a woman to venture into an entrepreneurial activity in - 262 - International Conference on Entrepreneurship IEC 2014 this type of environment.

After the opening of the market economy in the late 20th century, the majority of entrepreneurs were males. But with the increasing number of female graduates Algerian entrepreneurialuniversities, and activity because in of a rampanthostile cultural unemployment, environment. the girls begin to move more and more towards the business entrepreneur. Il is a challenge for a woman to venture into

The literature review shows a great similarity regarding socio-cultural constraints of women entrepreneurs in the Maghreb countries (Morocco, Algeria and Tunisia), as result of the fact of belonging to the same Arab-Muslim culture. ment.Female entrepreneurship in Algeria is not studied enough, in particular its socio-cultural constraints, and management styles of women entrepreneurs in a male environ-

The majority of studies on women entrepreneurs hve been made by sociologists dealing with the subject as a sociological phenomenon, linked to social changes, or studied from an economic point of view. Few studies have been conducted on the psychosocial aspect, and the constraints of human management. A woman entrepreneur can be either self-employed working in her own business, or an employer with at least one employee (Rachdi, 2006).

This study focuses on companies with employees in order to study the behavior of women entrepreneurs in different managerial situations. It deals with the reality of women entrepreneurs in Algeria. Psychological requirements, human management practices and socio-cultural environmental constraints are also discussed. The material and moral supports given to women entrepreneurs from their relatives, in order to face different1. Psychological environmental characteristics obstacles are of pointed women out. entrepreneurs:

Being an entrepreneur requires a strong personality and capacity to manage the behaviors and attitudes of people in a complex and often hostile socio-cultural environment. Psychological qualities such as patience, perseverance, communication abilities, neurs.decision-making, confrontation of administrative, human, technical and material problems, as well as adaption to unforeseen changes are badly needed for women entrepre-

This may be contrary to the nature of women in Arab- Muslim environments. In Al- geria, women are known for their sentimental characteristics, are often influenced by International Conference on Entrepreneurship IEC 2014 - 263 - others, and find difficulties to confront difficulties which are usually left for men. The fact that women became entrepreneurs in the Algerian society, explain that there is a change in the personality of modern Algerian women.

The negative attitudes, cultures and the type of socialization affect the personality of Algerian women. As pointed out by Rachdi, "The socialization of girls does not help to develop their confidence, their autonomy, their sense of risk and taste of innovation: skills which are necessary in any individual who wants to develop and manage their own business " (Rachdi 2006 ).

Having women entrepreneurs, explain that fact a change in mentality, culture and behavior of modern Algerian woman, and explains the entry of women in various occu- pations,2. Management including entrepreneurship. practices for women entrepreneurs:

The style and management practices of women have aroused great interest among researchers (Mukhtar, 2002). The question is whether management styles between men and women are the same.

Algerian women occupy senior positions in the hierarchy of different technical and administrative services. They expressed their managerial capacities in public and private companies. They proved their qualities and managerial skills as women executives.

Although there are few women entrepreneurs who manage medium and large companies, there are several women executives and directors of public companies in senior positions. This demonstrates their capacity to manage, and are not less competent compared to men. of theirWomen careers. may have a lack of experience at the beginning, but that can be acquired over time. Support from friends and members of the family can fill the gaps at the beginning 3. Socio-cultural constraints of women entrepreneurs in Algeria:

Algerian culture was hostile to women working outside their homes. The historical past of Algeria (colonization, underdevelopment, illiteracy ... ) led to the spread of poverty, ignorance and backwardness that have affected the Algerian society in general and women in particular.

Algeria has experienced great cultural and economic changes following the spread of education, including higher education. The girls have become the majority of students - 264 - International Conference on Entrepreneurship IEC 2014 in Algerian universities, even in scientific fields of study, known as masculine, such as civil engineering, marine engineering, agronomy and mechanical engineering ... sectors.

Similar constraints are found in other Maghreb societies. A study of women entrepreneurs in Morocco by AMAPPE in 2004 and 2005, concluded the existence of "problems essentially cultural values and social rules, remain extremely important (people's mentality, difficulties as woman, etc.). "(Salman and al. 2012, p. 5 ).

The economic crisis and high rates of unemployment amongst youths, have encouraged women to try new professional activities, such as being "women entrepreneurs" and creating their own enterprises.

In the Arab-Muslim culture, several practices has become obsolete, such as considering that women cannot manage men and being on their heads. That is why many men have difficulties in working under the command of a woman, and receiving orders from them and being obliged to execute women’s orders. The culture of a male society is the source of several socio-cultural problems of women entrepreneurs in Algeria.

Familial duties of married women entrepreneurs are important and require considerable time. This is why women entrepreneurs often have problems with their husbands, and find it difficult to reconcile the demands of their professional duties with family needs. barriers. Despite the socio-economic changes, women still find constraints and socio-cultural 4. Support needs and strategies for adaptation:

Being an entrepreneur is hard work for men, in an environment with socio- economic constraints, as in the case of Algeria. Being a woman entrepreneur in an Arab- Muslim society is a challenge.

To overcome these constraints and to succeed in their tasks, in a male society, woman entrepreneurs need moral support from their friends and family members. Management obstacles.strategies tailored to their situations, are often developed by women entrepreneurs, in order to overcome their difficulties in managing their business, and to overcome their METHODOLOGY:

To study women entrepreneurs in Algeria, a questionnaire was developed and used for the investigation of their psychological characteristics, socio-cultural constraints and International Conference on Entrepreneurship IEC 2014 - 265 - managerial1. Problematic: skills.

The business entrepreneur requires qualities of personality, managerial knowledge and skills. To see women as entrepreneurs was inconceivable few years ago in a male and conservative society.

Despite the improvement of the Algerian economy, Algeria is experiencing a high rate of unemployment, including among academics. This prompted the state to adopt a pol- entrepreneurshipicy of young employment, business. granting them loans, and encouraging them to create their own businesses. These factors have encouraged women graduates to venture into the

The current environment in Algeria promotes access to education and training of girls, but the socio-cultural environment remains a difficult obstacle to overcome. ronment.The business of woman entrepreneurship is a new phenomenon in Algeria, and this requires clarification of the characters, skills and constraints they face in a male envi- 2. Hypotheses:

1. Women entrepreneurs have personality traits necessary for their success. 2. Women entrepreneurs master the basic knowledge management. 5. Women entrepreneurs face socio-cultural constraints. of their4. Married environment. women entrepreneurs receive support from their husbands. 5. Women entrepreneurs develop managerial strategies to overcome the constraints

3.A questionnaireQuestionnaire was and developed data collection to conduct procedures: this study and answer these questions.

1. A Personalquestionnaire information. "Indices of characteristics and managerial practices of women entrepreneurs"2. Information was developedabout the company. in order to collect data on the following aspects:

3. Psychological characteristics. 4. Management practices. 5. Socio-cultural difficulties. 6. Constraints of married women entrepreneurs. 7. Sources of support for women entrepreneurs. - 266 - International Conference on Entrepreneurship IEC 2014 The questionnaires were distributed directly to women entrepreneurs who had to choose between "Yes", "No" or "Sometimes". The percentages have been computed, the results4. Sample are shown of the in study:tables (5-8).

22 questionnaires were filled from a population of women entrepreneurs from the Oran4.1. region, Personal 12 of Information: them are married with children, and 14 of them have a college degree. Table 1 : Level of Instruction

College Secondary University Total

Level of Instruction 01 07 14 22

Percentage 4.54 % 31.81 % 63.00 % 100 %

Table 1 above showed that the majority of women entrepreneurs (63%) have a col- legeTable degree. 2 : Martial status and age of the study sample.

Marital Status

Age

04Single 02 Married Total06

20-30 04 44.44% 05 16.66% 09

31-40 01 44.44% 41.66% 04

41-50 00 11.11% 03 25% over 51 and 00 % 03 25% 03 Total 09 12 22

40.9 % 54.54%

The majority of the sample as listed in Table 2, are women between 20 and 40 years, and 54.54 % are married.

International Conference on Entrepreneurship IEC 2014 - 267 - 4.2. Business Information: Table 3 : Main motivation behind the choice of occupation :

Reason behind the choice of Craft Services Industry Public Total the business activity Works

Activity of a family member 02 04 02 00

01 01 01 0608

Personal tendencies 00 0403 00 01 05

Specialty study 00 00 01 01 02

Husband’s activity 00 00 01 00 01

TotalProfitability of the business 11 05 22

03 03

TableThe majority 4 : Years of firmsof activity in the : sample (Table 3) are in services, followed by industry.

Number of workers

Years of activity 2-9 10-19 20 – 29 Plus que 30 Total

05 05 01 00 11

5under -10 5 years 01 00 01 05

11-15 0103 00 01 00 02

over 15 years 00 00 01 04

Total 1203 06 02 02 22

The majority of businesses affected by the study are small, newly created (less than 5 years),RESULTS: and with a number of workers between (2 and 9).

The analysis of data from 22 questionnaires filled by women entrepreneurs, helped us to draw the following conclusions:

- 268 - International Conference on Entrepreneurship IEC 2014 1 . Psychological characteristics of women entrepreneurs : Table 5: Caractères psychologiques des femmes entrepreneurs :

Psychological characteristics Yes % No So. time %

1 19 00

2 Master negotiation with stakeholders 17 77.2786.36 00 0503 22.7213.63

InitiativeAbility to spirit.persuade clients and partners. 16 72.72 00 06 27.27

43 16 72.72 00 06 27.27 account their situations Sympathy with workers and taking into 5 59.09 04 05 22.72

6 Ease of decision making. 13 59.09 02 07

Capacity for innovation and creation of 13 31.81 7 Thenew controlworking of and time. production methods. 11 50.00 01 10 45.45

11 50.00 02 09 40.90

8 Manage to keep cool and avoid being 9 angry. 10 45.45 09 40.90

Absence of anxiety during labor. 03 essary for their businesses. Table 5 shows that women entrepreneurs have the psychological characteristics nec- 2. Management practices of women entrepreneurs: Table 6 : Les pratiques managériales :

Managerial practices of women Yes % No % Some- % entrepreneurs times

1 20 90.90 01 04.54 01 04.54

2 I follow the works in person 15 68.18 02 09.09 05 22.72

Preference of works in my way 14 63.63 02 09.09 06 27.27

3 Consultation with employees before making important decisions.

International Conference on Entrepreneurship IEC 2014 - 269 - Managerial practices of women Yes % No % Some- % entrepreneurs times

4 59.09 02 09.09 07 31.81

I ask for advice from others in the 13 5 management of my enterprise. 11 50.00 13.63 08 36.36 employees or collaborators. Delegation of responsibilities to certain 03 6 11 50.00 13.63 08 36.36

I manage my company with rigor to 03 7 show my strength. 10 45.45 13.63 09 40.90 instructions. My subordinates perform all my 03 10 45.45 05 22.72 07 31.81

8 I do not have communication difficulties 9 with my subordinates. 09 40.90 06 27.27 07 31.81

10 My job is easy I do it easily. 06 27.27 10 45.45 06 27.27 not bother me much. The confrontation difficult situations do

The results in Table 6 show that women entrepreneurs involved in the investigation, master3. Contraintes the basic skills socioculturelles needed to run des their femmes businesses. entrepreneurs en Algérie : Table 7 : Socio-cultural difficulties:

Socio-cultural difficulties Yes % No % Some- % times

1 My employees are receptive to my 16 72.72 02 09.09 04 18.18 instructions.

2 15 68.18 01 04.54 06 27.27

I have no difficulty communicating with my men subordinates. 15 68.18 04 18.18 13.63

3 My status has improved vis-à-vis the 03 4 society after creating my enterprise. 14 63.63 06 27.27 02 09.09

My success is not due to the fact that I am a woman

- 270 - International Conference on Entrepreneurship IEC 2014 Socio-cultural difficulties Yes % No % Some- % times

5 The success female entrepreneurship 12 54.54 07 31.81 13.63

03 6 requires a radical change of mentality. 12 54.54 04 18.18 06 27.27

My workers accept being controlled by 7 a women. 11 50.00 13.63 36.36 entrepreneurs. There is a competition between women 03 08 11 50.00 05 22.72 07 31.81 me. 8 The harassment of men does not bother 9 11 50.00 13.63 36.36 entrepreneurs. There a jealousy between women 03 08 10 11 50.00 07 31.81 04 18.18

11 My competitors are jealous of me. 10 45.45 04 18.18 36.36 pose any problems for my business. The fact that I am a woman does not 08 12 10 45.45 10 45.45 02 09.09

I have difficulties in communicating with my women subordinates. 09 40.90 06 27.27 07 31.81

13 The perception of men towards women 14 entrepreneurs is significantly negative. 09 40.90 07 31.81 06 27.27 entrepreneurs. There is a cooperation between women 15 36.36 07 31.81 07 31.81

Algerian society perceives positively the 08 16 position of the woman entrepreneur. 07 31.81 36.36 07 31.81 entrepreneurs. I prefer to deal with women 08

According to the responses of the sample (Table 7), women entrepreneurs face daily socio-cultural constraints.

International Conference on Entrepreneurship IEC 2014 - 271 - Table 8 : Constraints married women entrepreneurs.

Married women entrepreneurs Yes % No % Some- % times

1 07 58.33 02 16.66 25.00

2 My children support me. 06 50.50 25.00 03 25.00

I manage to balance my work responsi- 03 03 bilities with my family obligations. 06 50.50 04 33.33 02 16.66

3 I do not find difficulties in reconciling 4 work and family life . 05 41.66 04 33.33 25.00

5 My husband supports me in my work. 05 41.66 01 08.33 0603 50.50

I have no problems with my husband 6 because of the work I exercise. 04 33.33 04 33.33 04 33.33

properlyPregnancy and childbirth does not affect my ability to manage my business 7 04 33.33 06 50.50 02 16.66

My husband helps me with the house- work 04 33.33 05 41.66 25.00

8 My husband complained about the 03 9 nature of my work 04 33.33 07 58.33 01 08.33

My husband is jealous of my success at 10 work 02 16.66 06 50.50 04 33.33

My work with men causes me problems 11 with my husband. 01 08.33 05 41.66 06 50.50

My workload causes neglect of my family obligations.

Women entrepreneurs often encounter difficulties related to socio-cultural back- grounds, in their relationships with their husbands and families.

- 272 - International Conference on Entrepreneurship IEC 2014 5. Need of advice and moral support: Table 9 : Sources of support for women entrepreneurs

Support and advice for women Yes % No % Some- % entrepreneurs times

1 15 68.18 06 27.27 01 04.54

There is always someone to help in the 2 management of the company. 11 50.00 09 40.90 02 09.09

I would be faced with failure without the support and advice of my friends. support, in often a form of male representation is crucial for their success. Despite the importance of their roles, women entrepreneurs need advice and moral DISCUSSIONS:

Despite the growing number of women entrepreneurs in Algeria, there is a lack of practical research in the field. The following discussion presents the results in relation to the observations of everyday life, as well as responses from interviews with women entrepreneurs. This is compared with other researches in the Maghreb and the Arab and Muslim1. Psychological countries in general.characteristics of women entrepreneurs:

The results, as shown in Table 5, show that women entrepreneurs have strong personalities, marked by negotiating capacity ( 86.36 %), persuasions (77.27 %), spirit of initiative (72.72 %), sympathy with workers (72.72 %), capacity for innovation ( 59.09 ), ease of decision making ( 59.09 ), control of time management, and ability to keep cool deal with difficult situations (50.00%). These psychological attitudes demonstrate the abilities of women entrepreneurs, which facilitate the tasks of running their businesses.

This proves also that women have personal and professional skills, that allow them to overcome the toughest stains. They can even compete with men in fields used to be reserved2. Management for them exclusively. practices for women entrepreneurs:

According to the responses of the sample (Table 6), we find the following practices: monitoring the work in person (90.90 %), the work in their ways (68.18 %), consultation with employees before making important decisions (63.63 %), request for advice from others in the management of the company (59.09 %), the delegation of responsibilities to certain employees or collaborators (50.00%), to use tough methods in order to show the position of power (50.00 %). International Conference on Entrepreneurship IEC 2014 - 273 - These management practices demonstrate the ability of women entrepreneurs to manage3. Socio-cultural their businesses, constraints according of towomen scientific entrepreneur: standards.

The majority of women entrepreneurs face environmental and socio-cultural constraints. The major problems of women entrepreneurs come from the attitudes of employees within the enterprise and the culture of the social environments. These cultural issues are related to many aspects of daily business management, as showed in Table 7.

Regarding the perception of women entrepreneurs by the society, 15 women (68.18 %) stated that their status vis-à-vis the society has improved after the establishment of their businesses, and only 8 responses (36.36 %) have recognized that society views positively their positions as woman entrepreneur.

Among the socio-cultural issues, there is communication between genres. (15) responses mentioned, that they find no difficulty in communicating with their men subordinates ( 68.18 %). To another question, 10 entrepreneurs (45.45 %) responded that they have communication problems with their women subordinates

Regarding the fact of having men being controlled by a woman, 12 responses (54.54 %), have found that men employees accept to be controlled by women, and are receptive to the guidelines of women entrepreneurs (72.72). Among the cultural factors, we find competition, cooperation and jealousy. Half of the women entrepreneurs (50.00 %) found that there is competition between women entrepreneurs and, in another question, 50% of them find the jealousy between competitors. The same number of entrepreneurs (11) found that there is a jealousy between women entrepreneurs.

In response to the question concerning the cooperation between women entrepreneurs (49.90 %) responded that there is cooperation and (31.81 answered no to this question. And on a question if they prefer to deal with women entrepreneurs, 07 (31.81 %) answered yes, and (36.36 %) answered no.

Regarding cooperation between men and women entrepreneurs, 9 responses (40.90 %) found that the perception of male entrepreneurs to women entrepreneurs is significantly negative, and (50.00%) found that they are not disturbed by men’s harassment.

On a question, whether their success is due to the fact they were women, the majority of women entrepreneurs (63.63 %) responded that they do not think that the fact of being a woman has an impact on their professional accomplishments, and (45.45 %) responded that they do not see that the problems of their businesses are due to the fact - 274 - International Conference on Entrepreneurship IEC 2014 that they are women.

Finally 12 women (50.00 %) believe that the success of women entrepreneurs requires a radical change in the attitudes of people in the Algerian society. society.The different responses show that women entrepreneurs face socio-cultural constraints, due to the facts of the attitudes, behaviors and practices of people in a male 4. Constraints of married women entrepreneurs:

11 married women (50% of the sample) participated in this study (Table 8), 6 of them (50.50 %) responded that they were able to reconcile their work responsibilities and family obligations. Only 5 of them (41.66 %) receive support from their husbands, and 4 reported that their husbands complain about the nature of their work. 6 married women (50.50 %) responded that their husbands do not help in household chores. 4 of them (33.33 %) found it difficult to reconcile work and family life, and (33.33 %) responded that their husbands are jealous of their success.

Dealing with problems in their daily work and their responsibilities towards their families, married women entrepreneurs receive significant support from their children (58.33 %), and this gives them strength and encouragement.

More than half of married women entrepreneurs (50.50 %) have problems with their husbands because of their work. The same level, (50.50 %) believe that the workload causes them to neglect family obligations.

The results show that women entrepreneurs in Algeria, work inside and outside their homes. Despite that, they do not receive enough support from their husbands, and this is due to the socio-cultural environment, despite the changes experienced within the Algerian5. The society. women’s needs for moral support and advices:

To overcome the constraints of a male environment, women entrepreneurs often need moral and material support. Women entrepreneurs often need help, either by advice or by direct intervention in their favor with governments and friends.

As noted in Table 9, (16) women entrepreneurs (68.18 %) responded that a person helps in the management of their companies (11 of them (50%) said they would run to failure without the support and guidance of their friends.

International Conference on Entrepreneurship IEC 2014 - 275 - The support they receive from their friends and family members is a valuable contri- ones.bution that helps to overcome the problems. According to the interviews, women entrepreneurs experiencing success often receive support from their families and their loved

Women entrepreneurs develop management strategies to confront environmental, materialCONCLUSIONS: and socio-cultural constraints.

The reality of entrepreneurial business knows significant changes. Previously, these positions were exclusively reserved for men. A significant number of girls graduating from Algerian universities are involved in this business.

Algerian legislators give equal rights to women and men entrepreneurs, but work remains to be done at the end to change attitudes.

Results showed that women entrepreneurs have the psychological characteristics and master the managerial competences. They have proved themselves as business women, andBIBLIOGRAPHY the social and cultural attitudes of the male society are changing slowly but surely. BELKHIRI Faria, 115 000 sont gérées par des femmes, Quotidien Horizon, Alger, 18 juin 2012.

CORNET Annie et CONSTANTINIDIS Christina (2004) Entreprendre au féminin : une réalité multiple et des attentes différenciées, Revue française de gestion 4/ (no 151), p. 191-204.

GILLET Anne, Les femmes créatrices de petites et moyennes entreprises en Algérie: motivations, parcours socioprofessionnels et stratégies d’existence. http://www.ulb.ac.be/soco/ colloquerabat/papiers/articles_definitifs/ RS4_ Gillet. pdf

KILANI M., (1998) Islam et changement social, Paris, Payot.

MUKHTAR S. M. (2002), Differences in male and female management characteristics: a study of owner-manager business, Small business economics, vol. 18, n° 3, pp. 289-310.

RACHDI Fatimezzaahra (2006) L’entreprenariat féminin au Maroc : une étude explora- toire, 8e CIFEPME, 25 – 27 octobre, Haute Ecole de Gestion, Fribourg, Suisse.

SALMAN Noura, AL ABBOUDI Manal et HENDA Sana (2012) Les femmes chefs d’entreprises au Maroc, 11e CIFEPME, Brest, 24-26 octobre.

- 276 - International Conference on Entrepreneurship IEC 2014 THE WORLDWIDE GENDER IMBALANCE ON CORPORATE BOARDS Elda DOLLIJA PhD (c) [email protected] / ++355 67 21 999 21

Manjola ÇOLLAKU [email protected] / ++355 9 47 02 329

ABSTRACT

The underrepresentation of women on corporate boards remains an important challenge internationally. It constitutes an untapped potential of skilled human resources, as evidenced by the discrepancy between the increasing participation of women on workforce internationally, the high number of female graduates and their underrepresentation in top-level positions. As women still face numerous barriers on the way to the top, this discrepancy can be seen as a waste of much highly-qualified and needed human resources. This reveals that, in general, women have fewer opportunities than men to advance in their careers and women’s skills are not being used to their full potential. This represents a loss for the women themselves and for the wider economy. Empowering women to take leadership positions is important for economic growth and a competitive internal market. Companies — and societies — cannot afford to waste the full potential of half of their workforce and undermine their competitiveness. Rather, they need to capitalize upon the skills of women, valuing and encouraging women’s professional growth and development. Moreover, they must create a business culture that supports innovation and high performance, which requires many different people with diverse talents and thinking styles.

The aim of this study is to view the progress of women in high level and decision making positions internationally. Statistics of gender representation on corporate boards internationally shows that the proportion of women involved in top-level business decision-making remains very low, although there are small signs of progress. Gender diversity within senior management teams has become an increasingly topical issue for three related reasons. First, although the proportion of women at board level generally remains very low, it is changing (progressing). Second, government intervention in this area has increased. Third, the debate around the topic has shifted from an issue of fair- ness and equality to a question of superior performance. If gender diversity on the board implies a greater probability of corporate success, then it would make sense to pursue International Conference on Entrepreneurship IEC 2014 - 277 - suchKeywords: an objective, regardless of government directives.

Gender diversity; women; career progress; corporate success; decision making.INTRODUCTION

The story of women’s advancement toward true equality of opportunity in modern business continues to be impressive and remains a source of hope for women around the world. At no time in history have women been more visible in governmental poli- cymaking and in corporate boardrooms. However, even in today’s most progressive societies in this regard, the role of women is frequently unclear. Legitimate successes are frequently accompanied by ongoing struggles and painful backlash. The reality is that even the most enlightened countries have not achieved true equality in the boardrooms of their corporations. Every available statistical source, as well as anecdotal evidence, shows that women continue to be underrepresented in senior corporate management in every country, whatever its cultural tradition and current legislation. As reported in a recent study by Catalyst (2013), the independent research and advisory organization on inclusiveness, the representation of women in corporate leadership has stagnated for the past several years (Accenture, 2004).

“Glass Ceiling” symbolizes the invisible barriers blocking women from rising to the top of the corporate pile. Whether at work or in politics, this artificial barrier – an obstacle fashioned from attitudinal and organizational prejudices – remains in effect despite decades of social development and attempts at advancement in gender equity. The literature on the glass ceiling suggests that beliefs and attitudes held by organizational members as well as contextual aspects of the organization contribute to the barriers that impede women’s career advancement. Ragins et al (1998) cite corporate culture as the primary barrier to women’s advancement into upper management. The women they surveyed described inhospitable and exclusionary environments as barriers to their advancement and can influence their supervisors’ evaluations of their performance and potential. Davidson and Cooper (1992) discussed role stress as a factor with the multi- pleFACTS role demands AND FIGURES inherent in running a career, a home and a family.

A lot of studies and statistics show a large gap between women's participation in the workforce (women make up almost half of the workforce, internationally) university degree (women constitute the highest percentage of university students) and than their representation in senior managerial levels and decision making (EC, 2012). To get a clearer picture about this phenomenon, there are given the profiles of some countries and regions around the world. - 278 - International Conference on Entrepreneurship IEC 2014 European Union Countries (EU): women make up about 45 % of the employees in all countries of the European Union (Eurostat, 2011) and about 56 % of graduates with higher education (Eurostat, 2009). These figures show that women enter the labor market with better features than men, but their level of representation falls in senior managerial positions. This means that, in general, women are less likely than men to advance in their careers and women's skills are not being used to their full potential. This represents a loss for the women themselves and for the wider economy, as well. The data show that there is a big gap between the percentage of women employed and the percentage of their participation in boards of companies in all EU member states (Figure 1). Women occupy a quarter of the seats on the boards of large listed companies in Finland, Latvia and Sweden and slightly more than a fifth in France. However, up less than a tenth in Ireland, Greece, Estonia, Italy, Portugal, Luxembourg, Hungary, less than one-twentieth in Cyprus and about one thirtieth in Malta.

Source: “European Commission, database on women and men in decision making”, Jan- uary 2012.

International Conference on Entrepreneurship IEC 2014 - 279 - Figure 2, presents a summary percentage of women members in the boards of the greatest companies in the EU. As shown in the table, this percentage is increasing, but at a slow pace. From 2003 to 2012, the share of women in boards has increased from 8.5% to 13.7%, an increase of 5.2% in a little more than eight years. This represents a slow the speed of change which is in average about 0.6% per year.

England:

women make up 47% of the workforce in England (ONS, 2012), however they are much less represented in the boards of the greatest corporations. In 100 most powerful companies in England, estimated by the FTSE index (Female FSTE Report, 2012) despite the increasing participation of women in their boards, the percentage of their representation is still very low. Thus, only 12.5% of directors and 5.5% of chief executives of 100 companies listed by the FTSE index are women, 21% of the boards of these companies consist of only women (Table 1). The data on this table, illustrate very clearly the importance of this phenomenon where these companies have also made little progressTable over1: Female years. FTSE Report 2012 Female FTSE 100 2011-January 2012 2010 2009

Female held 163-(15 %) 135-(12.5 %) 131-(12.2 %) directorships

Female executive 20-(6.6 %) 18-(5.5 %) 17-(5.2 %t) Femaledirectorships

143-(22.4 %) 117-(15.6 %) 114-(15.2 %) non-executive directorships - 280 - International Conference on Entrepreneurship IEC 2014 Female FTSE 100 2011-January 2012 2010 2009

141 116

Women holding 113 FTSE directorships 17 16 15 female Companies with

executive directors 79 75 at least one Companies with 89

female director 50 multiple female Companies with 39 37

directors 11 21 25

Companies with no female directors Source: Cranfield School of Management Report, 2012

United States of America (USA):

women make up 46.9% of the workforce in USA According to the latest Catalyst (2013) survey, the percentage of women CEO's in 500 most powerful companies in the USA (FT500) has reached up to 4% in 2013 (Figure 3). On Figurethe other 4: Fortunehand, women 500 Womenhold 16.9% CEOs of (percent)the board seats of these companies.

Source: Catalyst, 2013

Figure 5: Fortune 500 Board Seats held by women (percent)

Source: Catalyst, 2013

International Conference on Entrepreneurship IEC 2014 - 281 - Canada:

women make up 49.6% of the labor force Canada (Statistics Canada, 2009). According to a survey of Catalyst (2009) in 500 largest companies in Canada (FP500) , rectors.as shown in figure 6, women constitute about 39% of managerial positions, 16.9% of corporate officer, 13% of board directors, 5.6% of top earners and 6% of executive di- Figure 6: Catalyst Pyramid, 2009

Source: Catalyst, 2009

Australia:

women make up 35.3% of the labor force in Australia (ABS, 2008). Table 2 shows the percentage of women managing directors and executive management in 200 and 500 most powerful companies in Australia, listed by ASX index , according to EOWA (2012).Table 3: Women holding directorships and executive positions in the most important companies in Australia

Percentage of Women holding Percentage of Women holding directorships positions executive positions

ASX200 9.7

ASX500 12.3 % 9.2

9.2 % Source: EOWA, Australian Census of Women in Leadership, 2012

China:

Women make up 45% of the labor force (CSY , 2008). Despite the lack of gen- uine studies regarding the participation of women in managerial levels in Chinese companies, according to the general statistical study of 2008, women constitute about 0.5% - 282 - International Conference on Entrepreneurship IEC 2014 of ChineseArgentina: company executives.

although women make up 41.1% of the labor force in Argentina, only 1-2% of CEOs Argentine companies are women (Ministry of-works Report, 2007).

Figure 77: below Catalyst’s shows graph the board - Board seats seats held held by women by women globally. globally

Source: Catalyst, Women on Boards (August, 2012)

International Conference on Entrepreneurship IEC 2014 - 283 - Does gender diversity affect the organization's performance?

There are a series of assumptions and studies regarding a possible impact of gender diversity on corporate performance. These studies try to answer the question whether ers.an organization which preserves gender diversity in senior managerial levels has a better performance compared to another one, where generally prevail male senior manag-

Lisa Fairfax (2006) comments, that having three or more women on the board en- hances corporate governance. The (TIAA-CREF) study found that women impact board governance in at least three ways, (1) by bringing different perspectives into boardroom discussions, including the perspectives of multiple stakeholders, (2) raising difficult issues - that is the study found that difficult problems are less likely to be ignored when women are in the board room, and (3) by altering the dynamics in the board room to create more open and collaborative discussions.

In August 2012, The Credit Suisse Research Institute released an intriguing study examining “gender diversity and corporate performance”. The key findings revealed that out of the 2,400 companies globally analyzed, “the companies with one or more women on the board have delivered higher average returns on equity, lower gearing, better average growth and higher price/book value multiples over the last six years”. The report confirms the increasing trend and support for gender diversity in the boardroom by ‘reducing volatility - manifested as enhanced stability in corporate performance and in share price returns’.

The Credit Suisse research also indicates that, ‘Blue-chip companies with at least one woman on the board have outperformed rivals with no women at the top table by 26% over the last six years. Companies with women on the board outperform on share price, generate a higher return on equity and have less debt and higher valuations, according to the study by the bank's research institute. Stefano Natella, a director of research and analysis in the Company securities Credit Suisse, commented: "gender diversity is a valuable additional element to be considered when assessing investments. Results of the analysis are irrefutable and for the first time provide a global view of this topic". Credit Suisse - reports that, during the past six years, the average return on equity was 16 % for companies with women on their boards of management and 12 % for those without women. In companies with women, revenues increased 14 % compared with 10 % for those who do not have women, and companies with women had higher prices of shares.

Based on the assumption that gender diversity has a positive impact on corporate performance, Catalyst conducted a thorough study in 2004, examining 353 US companies from FT500. To evaluate financial performance, two measures: ROE (Return On - 284 - International Conference on Entrepreneurship IEC 2014 Equity¬) and TRS (Total Return on Shareholders) were used. The study found that the companies with higher participation of women in senior managerial levels have higher financial performance than companies with the lowest participation of women. This result was confirmed for both financial meters included in the study: ROE is 35.1 % higher and TRS is 34 % higher. The study also assessed the financial performance of the industries and also showed that those industries that had a better participation of women in senior managerial levels had higher value of ROE and TRS.

In 2004, another study was conducted on 80 Dutch companies which also showed a positive correlation between the number of women in senior managerial levels and corporateCONCLUSIONS performance AND (VerboomRECOMMENDATIONS & Ranzijn, 2004).

Even though different nations in the world, are characterized by a lot of differences (cultural, economical, political, technological, etc.), they converge at a common issue: the low representation of women in senior management and other high decision making levels. International statistics and studies emphasize the importance of this phenome- terparts.non. It is widespread all over the world. Even though women represent nearly half of the population and the workforce globally, their career paths differ from their male coun-

The origin of this phenomenon is complex. There are three critical factors (barriers that impede women from reaching high level positions, also called “glass ceiling”) that make women less represented in senior managerial and decision making levels. The first factor is related to the career psychology of women (individual factor). The second factor is related to the social stereotypes that see women as responsible for family care and not suitable for being a leader. The third factor is related to the corporate climate and culture and the lack of role models. These three important factors, even though defer in different countries, are combined with each other and as a result women are underrepresented in high level decision making positions internationally.

So, as it is shown in figure 7, may be it could be expected that countries like Saudi Ara- bia, Qatar and United Arab Emirates have a few women in leading positions. But, when it comes to countries like United States, United Kingdom, France, Germany, Netherland, etc., it is hard to accept the discrimination of women. Anyway, gender equality is not only a social issue. It is an economical problem too. As women represent nearly half of the work force in the organizations, giving them the merited opportunities is not only the right thing to do. It means evaluating and profiting from their talent and all their other competences. Other studies support the hypotheses that gender diversity in corporate boards is positively correlated to the financial performance of the corporate. International Conference on Entrepreneurship IEC 2014 - 285 - BIBLIOGRAPHY Accenture (2004) The Anatomy of the Glass Ceiling Barriers to Women´s Professional Ad- vancement http://www.accenture.com/at-de/Documents/PDF/TheGlassCeiling.pdf

Argentina: Ministry of Work Report (2007) Percentages of Women According to Branch of Activity,ww.trabajo.gov.ar/.../estadisticas/.../Capitulo%203_%20Gestion%20producti- va%20y%20diferenciales%20en%20la%2, accessed 30 October, 2009.

Australian Bureau of Statistics (2008) Labour Force Characteristics of Aboriginal and Tor- res Strait Islander Australians, Estimates from the Labour Force Survey, 2007, Catalogue No. 6287.0 (Canberra: Australian Government Publishing Service).

Catalyst (2009) Canadian Women in Business, http://www.catalyst.org/publication/198/ canadian-women-in-business, accessed 23 April, 2009.

Catalyst Census, (2013) http://www.catalyst.org/knowledge/women-boards

Catalyst Census, (2013), Fortune 500 Women Board Directors

Catalyst, Women on Boards (August, 2012) .

China Statistical Yearbook (2008), http://www.stats.gov.cn/tjsj/ndsj/2008/indexeh.htm com/data/_product_documents/_shop/360145/csri_gender_diversity_and_corporate_ performance.pdf

Credit Suisse, Gender Diversity and Corporate Performance (August 2012)

Davidson, M. and Cooper, C. (1992), Shattering the Glass Ceiling, Paul Chapman, London.

EOWA (Equal Opportunity for Woman in Workplace in Australia), Australian Census of Women in Leadership, 2012 https://www.wgea.gov.au/sites/default/files/2012_CEN- SUS%20REPORT.pdf

Europian Commission, Women in economic decision-making in the EU: Progress report. A Europe 2020 initiative (2012). http://ec.europa.eu/justice/gender-equality/files/women- on-boards_en.pdf

Eurostat, Employment by sex, age groups and nationality [lfsq_egan], 3rd quarter of 2011.

- 286 - International Conference on Entrepreneurship IEC 2014 Eurostat, Tertiary students (ISCED 5-6) by field of education and sex [educ_enrl5], 2009

Fairfax L., (2006) “Is Corporate Governance Enhanced by Women Directors?” http://www. theconglomerate.org/2006/11/is_corporate_go.html http://www.catalyst.org/knowledge/2013-catalyst-census-fortune-500 http://www.catalyst.org/publication/433/ http://www.mckinsey.com/locations/swiss/news_publications/pdf/women_mat- ter_2010_4.pdf. http://www.statcan.gc.ca/pub/89-503-x/2010001/article/11387/tbl/tbl001-eng.htm

McKinsay & Co, ‘Women Matter: Gender Diversity, a Corporate Performance Driver 2007, 2008, 2009, 2010’

Ragins, B.R., Townsend, B. & Mattis, M., (1998), Gender gap in the executive suite: CEOs and female executives report on breaking the glass ceiling, Academy of Management Executive, Vol. 12 No. 1, pp. 28-42.

Statistics Canada, Employment trends of women and men aged 15 and over, 1976 to 2009

The Cranfield School of Management, “The Female FTSE Board Report 2012” http://www. som.cranfield.ac.uk/som/dinamic-content/research/documents/2012femalftse.pdf

UK, Labour Market Statistics, Office National Statistics (ONS), November 2012 http:// www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-222521

Verboom S., Ranzijn M., (2004) “Connecting Corporate Performance and gender diversity”, http://www.europeanpwn.net/files/connection_corporate_performance_and_gender_di- versity.pdf

International Conference on Entrepreneurship IEC 2014 - 287 - - 288 - International Conference on Entrepreneurship IEC 2014 CREATIVITY IN ENTREPRENEURSHIP Ph.D. Candidate Gülay Bakar Tamer

Tel: +905322968937 İstanbul Aydın University

ABSTRACT

Creative entrepreneurs, inside the horizontal thinking that draws, no-nonsense, who are reasonable, risk takers and who has more desire to get to know people. Creative process as a random happenstance, a recent innovation or idea or a problem of business in and outside of an information collection and assessment of information, the current definition of problem and solution alternatives, the problem should be resolved, the solutionKeywords: is related to.

Entrepreneurship, Creativity, creative Process, Creative Product, creative ideaINTRODUCTION

Entrepreneur, there is a Creative and innovative, new ideas for the development and enforcement inner entrepreneur ideas different from the others that are the most significant. Also instead of from a new and in some case it is completely unknown for all of those that are connected to resistance of traditional methods with must break. Entrepre- neurial, which has free thought and which is also flexible, creative, confident, robust and persistent. Advances in technology, consumption economy, living standards, and growth entrepreneurial developments in its way of thinking are factors that trigger.

As a stand-alone power and creativity and new ideas; the new commitment or the existing product and service offerings or installed new markets is a key to enter. Concept of creativity is one of the accepted of these descriptions of, for each field to generate new ideas and useful process. As a process a property may be marketed as having an idea or service, developed a manufacturing or distribution method or a new social services management.

Concept of creativity is the basis of Innovation of entrepreneurship therefore; it is one of the most important tools which are created by an entrepreneur innovation or International Conference on Entrepreneurship IEC 2014 - 289 - new ideas to succeed as it is in a competitive firm. In order to form new form of administration, the new ideas, new theories or the innovative applications this awareness of the requirements of the enterprise is essential to put in place. As a result, creative thoughts form1. innovationEntrepreneurship and a successful Tend to implementation.

Entrepreneurship: Risk takes on technological change, market structure and competition, public settings such as type should pay attention to. To keep up with others, the innovative idea of time, without losing any more vision than that bear responsibility for it, the necessary decisions, and take action is to avoid an unsightly excess. Entrepre- neurs have to be tight to increase market Competition, to produce high quality products efficiently and allows them to be consumer-way. Key factor is that differentiates it from enterprise manager dreamer viewpoint. Entrepreneurial planning is an essential element for a manager. Entrepreneurial thought structure generates opportunities external prints will be required. New developments in technology, consumer products and services are subject to pay and payment of desire for consumption economy that changes, the new styles that define standards of living and social values or needs, Performance criteria, and the Planning periods, Costs down, the price and retire from fall behind the curve in terms of quality initiatives, their Market to the risk of losing face. A competitive media production is an efficient way to provide it. Advocate of capital accumulation with providing you with an important function is also spread to the base of capital. People tend to be entrepreneurial in a new attempt to ignite the expression. For businesses, enterprises tend to be when dealing with upper tier budget management risk management, and innovate attitude indicates that behavior. This is why risk taking and being innovative in a proactive manner, are top management strategies for entrepreneurship. Entrepreneurship influences people who make decisions that affect factors; which can be expressed as: family support, financing, the state supports; education and training, psychological, social, and economic factors. Even the entrepreneurial spirit of that is investigating how to work; the work, religious history, maturation, race, religion, gender, education, and socio-biological factors of entrepreneurship are the factors which should be taken into consideration while being processed. In this respect, influences on entrepreneurship perspective are considered to be essential during undergraduate study in universities1.2. Entrepreneurship (Pipe, 2006, p.13). Disposition Items 1.2.1. Innovation:

Innovation refers to a new thinking which is marketed as having a value of recycled idea while maintaining the existing structure (Zahra, 1998). In literature, entrepreneurship often tends to be associated with innovativeness. Innovation firm's new product and service ideas that support aimed at developing new and creative processes to encourage describe as. Company develops new products and services and - 290 - International Conference on Entrepreneurship IEC 2014 go-to-market when it launched, it can provide competitive advantage. New product and service Innovation in order to bring new business to use technology is moving in direction of migration.pt of creativity is the basis of Innovation of entrepreneurship therefore; it is one of the most important tools which are created by an entrepreneur innovation or new ideas to succeed as it is in a competitive firm. In order to form new form of administration, the new ideas, new theories or the innovative applications this awareness of the requirements of the enterprise is essential to put in place. As a result, creative thoughts form1.2.2. innovation Proactivity: and a successful implementation. (Tough, 2011).

In organizational behavior and industrial/organizational psychology, proactivity or proactive behavior by individuals refers to anticipatory, change-oriented and self-initiated behavior in situations, particularly in the workplace. Proactive behavior involves acting in advance of a future situation, rather than just reacting. It means taking control and making things happen rather than just adjusting to a situation or waiting for something to happen. Proactive employees generally do not need to be asked to act, nor do they require detailed instructions.

Proactive behavior can be contrasted with other work-related behaviors, such as pro- ficiency, i.e. the fulfillment of predictable requirements of one’s job, or adaptation, the successful coping with and support of change initiated by others in the organization. In regard to the latter, whereas adaptation is about responding to change, proactivity is about1.2.3. initiating Aggressive change. Competition: (Kraus, 2013).

Business strategies can be categorized in many ways. One popular method is to assess strategies based on their degree of aggressiveness. Aggressiveness strategies are rated according to their marketing assertiveness, their risk propensity, financial leverage, product innovation, speed of decision making, amongst others. Most firms are analyzers. They are seldom a first mover in an industry, but are often second or third place entrants. They tend to expand into areas close to their existing core competency. Rather than develop wholly new products, they make incremental improvements in existing products. Rather than expanding into new markets, they gradually expand existing markets. They try to maintain a balanced portfolio of products with some stable income generators and some potential winners. They watch the developments in their industry closely, but don’t act until they are sure that the time is right.1.2.4 (Covin Risk- Entrepreneur:et Slevin, 1991).

entrepreneurship as a result of any results which can be achieved by using such a disappointment in life indicates that the play each other and do away with the entrepreneurial status. That is important and can be calculated from an acceptable level of risk. Of course for any entrepreneur is deemed to lose at some International Conference on Entrepreneurship IEC 2014 - 291 - point. That's a start. But to win, losing in that must be taken into account. Import entrepreneurs tend to be at risk; the company's results are unknown important resources to invest in industries and even firm may want to consider the way they encourage. (Chen et Hsu,1.2.5 2013). Independence:

Autonomy, it is the capacity of a rational individual to make an informed, un-coerced decision. In moral and political philosophy, autonomy is often used as the basis for determining moral responsibility and accountability for one's actions. A person with an autonomous thinking or vision put forward as a stand-alone application and can be moved. In General chasing opportunities self-routing means that concept of autonomy, the narrow sense, as part of a design business and the business of selecting1.2.6. methodsSelf-Competency: and the work program on the degree of self-control. (Kurt 2006)

Self-competency perception might be perceived as an explanatory factor for high-performance which has to be put forward during entrepreneurship processes. People who have self-fulfillment sense take role during challenging planning and they incline to aim for success even under most stressful conditions. Even if they fail they show fast recovery and higher levels of personal priority and they usually have more long-term plans than majority of people. In contrast, low self-competency perception people are a receive priority; personal, challenging situations tend to show an escape. This service has been successfully close personal relationship with the self-awareness, people entrepreneurship competency processes evaluated behavior is an important1.2.7. The roleWill as to a Win:feature people looks like. (Heckhausen et Schulz, 1995)

Entrepreneurship as an important factor affecting achievement needs to gain access to the personal success perform better that the request. There is high, the people more willing to succeed in their accessibility, their entrepreneurship trends it is higher. Therefore, high achievement needs to be found in an interventional contact to come and this activity as a result of recent successful work looking to find a need for achievement, success and to achieve perfection is pushing people to be competitive. As a result, the will to win encourages people to entrepreneurship with controlled orientation to take risks, developing problem solving skills and objectives are to be used to identify1.2.8 Focus them. Control: (İşcan et Kaygın, 2011).

The concept of locus of control by the scientists is classified as internal and external locus of control. According to this classification, good or bad happens to the people the causes of events are differentiated in terms of detection. Of people, of the events of what control his conviction that expresses and this concept, according to the person deal with the incident and the results themselves, not fate, luck and fortune as external and environmental events identify believe that if these percep- - 292 - International Conference on Entrepreneurship IEC 2014 tions external locus of control refers to.

In contrast, if the person to head the events and situations they perceive their behavior as a result, people have this belief that is specified as internal locus of control (Solmuş, 2004). Control-oriented people are more successful in the entrepreneurial process; external locus of control if it is determined that they could not achieve success. In the same way they do on the student, in a survey of internal locus of control in the entrepreneurialincrease of entrepreneurial orientation. orientation was revealed that a significant explanatory. Also it is denoted that there is a positive relationship between internal locus of control and 1.2.9 Creativity:

At the root of all creativity, innovation and invention are derived thoughts. However, as a result of the creativity of thought applicability in solving problems all the time can not constitute the ability to change the size of that product creativity (originality of the state) is increased can be mentioned. Because of changes in the existing set of values is tangent to the original problem and to solve existing problems supporting it eliminates the provisions of the basic assumptions. Wherein the product or its impact on the idea of the series of values modified by the present set of values of a set 2.of Conceptvalues can of beCreativity evaluated and anywhere. Creative (Satzinger, Process in 1999, Entrepreneurship p.145-146)

Creative processes are covered in five steps: 1. In determining the need; made some mistakes or coincidences or connotations in different fields with the invention is provided to meet any need. 2. Revising the present stage of knowledge, of people with different areas of expertise to the process, looking at the process from different angles of their work is to understand how it works. But the problem is not fully explained and opportunities. 3. At the stage of information to digest, problems in the group with their creativity ofand the imagination problem. as a great picture opportunity are (designed) and the available options for solving the problem by intuition thoroughly understood and tried to find the solution tation4. Cooperation, is not. different areas of expertise of people with different perspectives to the problem of combining certain point but not yet reached the stage in the implemen-

5. In the Evaluation of Emerging, solution to be implemented in order to understand what has taken place rather than scientific and analytical evaluation of the evaluations is done outweighs the artistic direction. The creativity of the product or idea, product or idea, originality, feasibility or suitability for use is related to. The current value of an idea or set of products or to change existing rate assumptions of the problem, then increase the size of the product or idea is creativity. A product that measures the creativity of ap- International Conference on Entrepreneurship IEC 2014 - 293 - proaches has also been developed from the perspective of the customer. ativity is an intellectual function. Not necessarily in the sense of creativity or to create Creativity concept with idea there is a relationship between the close and tight. Cre- from nothing, from the existing relations between concepts or ideas to produce new concepts are used in the form. Located in the center of creativity of thought, based on imagination and develops horizontally. Another thought of this idea is the logical analytical thinking. Analytical thinking, creative thinking through a lot, and vertically passing by examining the logical filtering occurs. The two are complementary way of thinking. Rules without recognizing creative thinking, analytical thinking is subject to rules. This aspect of creative thinking, analytical or logical thinking is about bringing different from the innovation and diversity.

Creativity is not done in all areas. Creativity, art, design, advertising and product development in areas outside of them may be used in the analysis and interpretation can be done as often there is a wrong understanding. Studies have shown that creativity can be demolished in all areas.

Creative ideas are valuable as long as they make sense. Even the way the logic of the movement can be found in creative thinking. However, this assumption is entirely wrong. Creative thinking comes after the appearance of logic.

Creative thinking, unusual conditions and consists of a combination of differences. In this case, the formation of such conditions for creative thinking must wait. Today, the emergence of creativity and designed specifically for use methods have become.

Creative thinking often occurs by coincidence and chance. This formation is also spontaneous. Creativity must expect them to do. This understanding has changed. Creativity without human intervention is not dependent on the presence of certain conditions.

Creativity frivolity, folly, unrealistic, illogical. Creativity is misunderstood by most people in this way is humiliated and ridiculed even when an effort is made for creative thinking. Today, this approach has begun to be understood that it is wrong now. Even concept2.1. Motivation: of serious creativity has been used for productive creativity in business.

Motivation is the first step of entrepreneurship. From the three components of creativity (expertise, creative thinking, motivation) if one is missing motivation, expertise and creative thinking creative act one cannot migrate. As is known extrinsic and intrinsic motivation are two and two motivations are different in effect on creativity. Intrinsic motivation is more effective than extrinsic motivation. Extrinsic - 294 - International Conference on Entrepreneurship IEC 2014 motivation comes from outside. Creative honors, such as the sacking of creative results are not. Creativity, passion, creativity is against the interests and desires of intrinsic motivation. Solutions that give him a sense of satisfaction and interest increases intrinsic motivation.2.2. Attitudes Expertise, and creativeBehaviors thinking in Individual and motivation Creativity can be influenced by managers. 2.2.1. Diversity;

creativity embraces divergent thinking. One of the features of modern society is its tolerance for diversity. Differences are seen as wealth. In fact, we are encouraged to be different. Some organizations have started implementing diversity creativity.management specifically. Managers in organizational creativity, the differences are rather homogeneous in teams to kill creativity. Then we need to get out being different in 2.2.2. Error and Risk: Trial requires risk. There is a possibility of error in risk. Errors or trial into success resulting from the application to be aware of, and learning from the results of many things you can try once more thrown request. Risk; damaged as a result of decisions and actions to be taken is the possibility. Thought; thoughts is the beginning of creativity. Creativity freely, pale and crazy ideas apply. One hopes that the results are not out. Such situations can be away from the creativity of the people most of the time. Ideas solve problems, which helps to facilitate the lives of the people and people is something that develops. Creativity can be carried out in the importance of the trial. Flexible to think there is a relationship with a significant degree of creativity. Creativity and humor in mind the concept of a value that is associated with. People of creativity, humor and2.2.3. more Create comfortable Concept: thinking that disclosure is often used humor.

New concepts in terms of entrepreneurship with the idea of using the operation can be established as a business, an established business may be added to the new concept and is still in use and changes may be made of the concepts (intra-entrepreneurship).2.3 Phases of Creativity 2.3.1. Preparation:

this phase of the subject, the problem of defining boundaries to be drawn, the determination of the size and characteristics of the studies containers. Incubation: this stage, subject or reproduction of creative thinking about the problem creativeis seen as results. the waiting time for. Emergence of Creative: for this stage of enlightenment, are used in such concepts as lightning. Issues and problems began to emerge about the 2.3.2. Creativity Techniques:

Brain Storming, criticism, making free throws, as many thought, makes connotations to different ideas. Therefore, improve, modify and International Conference on Entrepreneurship IEC 2014 - 295 - combine ideas. What has to be done? • Problems and issues of recognition of and focus on strengthening • Encouragement of foreign thought to be visual • Brainstorm a place where everyone can see the rules to hang • Classification of thoughts • Within an hour 100 thoughts tried to be produced • During the meeting, the team members of a friendly competition to occur • Warm currents creation • Hierarchy within team members to be included • Team member speak in turn • The team only in the field of experts to participate • Creating right environment for meetings (hotels, resorts, etc...) • Team members should take notes

Creative process in entrepreneurship is evaluated in five stages: (Bentley, 1999, p.76).

1) Determination of Needs 2) The available information passed to the eye 3) Information to be digested (interpretation or knowledge internalization) 4) The detection or recognition of original ideas 2.3.3.5) Evaluation Determination process of need First step:

Sometimes mistakes made or coincidence or connotations in different fieldsSecond are preparing Stage: a new environment that is conducive to the invention.

Errors such cases out of coincidence or business needs will determine theThird need orStage: problem noticing.

2.3.4. RevisionProblem of existing Solving information is introduced to the stage.

At this stage there is a problem well defined. Typically, the well-defined problem solving has many appropriate solutions. In each of these solutions are used to satisfy specific goals and objectives among which there is a competitive relationship. Creative the prerequisite for performance of different individuals to communicate with on a regular basis is required. "Group of the difference" "the value of the difference" respectively. As a result of differences in the groups of the group members, the event enables the look from a different perspective and develop creative problem solving ability was observed. - 296 - International Conference on Entrepreneurship IEC 2014 Differences knowledge, skills and perspectives within the group when it is in the areas of creativity from these differences are influenced in a positive way. In addition, these different groups are not clear (cloudy) should also be encouraged to think about alternatives. McLeod and colleagues at work brainstorming the different ethnic groups to generate ideas that have seen better quality. As a result of the differentiation of groups found in the solution of problems there are more alternatives, more solutions to be produced, both inside and outside the team also leads to increased communication and creativity is increasing as a result.

In order to gather data from diverse sources and compare different solution methods, managers support cooperative work of employees from different areas. In short, members of the team are encouraged to think differently. (Shalley et Gilson, 2004, p.43). In groups when people are happy and at peace with themselves, sometimes it is required to create a provocative environment to invoke brainstorming. With the participation of people from outside the group good management of creativity should encourage participants.2.3.5. (Sutton, Information 2001, p.96). to be Assimilated

People with different expertise areas should be funded from many communication channels in order to grasp a complete concept of process by looking at different aspects of information. Therefore at this stage, at the end of this stage, the information coming from different areas of expertise in the interaction solutions are seen as directed towards a specific point. (Basadur et Hausdorf, 1996, p.22, Haner, 2005, p.294). At this stage the information obtained in the previous step to digest such information "intuitive" Recognizing and focus on the information used to obtain new information is related to. All the information in the earlier stages of business by members of the team must be thoroughly grasped and understood. (Bentley, 1999, p.76, Haner, 2005, p.294). The information recovered by the person is synthesized. Thus, this information by persons who brought the original form suitable for re-coding can be made therefore, many creative ideas is obtained by how team members will collect existing information and changes them. (Palmon - Roni et Illies, 2004, p.61). Groups present ideas provoked in the way of thinking distort need to find new ways. Problems and opportunities should be clearly defined. This clarification of the previous step is related to the blur condition. Problems and opportunities in creativity is designed as a large picture and inner faces are identified and examined their relationship with one another are examined. Im- proved understanding of the available options for solving the problem is also required. In this step, of the different perspectives from different areas of expertise of the process to understand how it operates, with the definition of the problems and opportunities that they do. (Basadur et Hausdorf, 1996, p.22). A process of people from different perspectives to solving problems is to increase the number of ideas will produce. But at this International Conference on Entrepreneurship IEC 2014 - 297 - stage combination of different ideas obtained by different sources should be avoided. (Palmon-Roni2.3.6. Recognition and Illies,2004, of Brainwave p.66-67).

At this stage, the process which is related to the acquired knowledge of the study is summarized. The definition of the problem and benefit analysis of information, new ideas for the development, assessment and selection and is targeted to reach the most appropriate and practical solutions. Here the logical, systematic and orderly evaluated with analysis of the situation and the options from abstract ideas to practical ideas and plan conversion is provided. At this stage in the name of the optimization process can be a good solution at this point and has a well-defined problem. (Basadur et Gelade, 2003, p.27).

Association in this field covering many areas and people who managed to break down the walls of all requirements; composition is to have numerous concepts. The problem here is the intersection area of expertise in the areas of creative ideas about how is captured. At this stage; people with different areas of expertise at a certain point, combining the different perspectives of the problem not the solution reached is seen but not yet put into2.4 practice. Evaluation (Basadur Process et Hausdorf, 1996, p.22).

At this stage, whether or not in accordance with the intended purpose of the new idea must be questioned. The first activity to be done before a new idea is presented within the organization. On the idea of offering people the ability to have are different. Here, rather than only in the understanding of the idea shown in terms of the criteria must evaluate. However, in order to conform to the cultural structure of the organization, eval- uation3. Individual of customer Creativity feedback towards this new idea is required.

Creativity of individuals, products, processes and highly interactive environment, including dynamic events with each other has been built on. Creative people have always been extraordinary. Always trying new ways of uncertainty and turmoil going on inside the diamonds are people who dig. Humorous have a power, it does not take work seriously and do not meet the existing rules do not apply them bored with routine work-up, cut short the expenses and the change, and take pleasure in change. Imagination, intuition, hunches, by detecting their ability to grasp is very strong. Entrepreneurs do not follow the thought definitely a classic and often contradictory ways to present classical approaches are adopted. Also when solving problems in a flexible and adaptive manner thinkers. This feature also constitutes a part of their creative process. (Top, 2006, p.274). Individuals who have internal locus of control, reward and punishment in the life - 298 - International Conference on Entrepreneurship IEC 2014 events they have achieved that result from their own behavior and actions, and therefore are people who believe that they can control the events in which they live. These individuals react to stressful situations may give a more constructive and problem-solving. Creative thinking is the best characterized by Edward de Bone. Well-developed theory by de Bone distinguishes between horizontal and vertical is in the process of thinking. Vertical thinking is important in a pre-existing hole in the solution of the problem as much as possible to get to the bottom scratch. If thoughts are important in horizontal opening new holes as much as possible to solve the problem is to develop an alternative. Easily seen in the work of the creative person is not thinking vertical, they have horizontal thinking. Creative individuals do not feel worried about making mistakes and being criticized. When these people face with problems they use their own ideas and their techniques to find solutions. (Erdem, 2002, p.914).

Entrepreneur of the person carrying it is clear that different personality traits. These people are directing and mobilizing people. Entrepreneur of the "achievement orientation", "sense of competence" and "out of control avoidance" features are like. Proac- tive personality, in order to create an effect that will result in a change around acting to humans. In addition to proactive personality traits associated with entrepreneurship are also other individual variables. Age, gender, education and entrepreneurial parents have been shown to be effective on entrepreneurship figures. Men are more likely than women to entrepreneurship, entrepreneurship also increased with increasing education levels, as well as the mother or father of the children of entrepreneurs are found to be more entrepreneurial. However, the connection between entrepreneurship and proactive personality is stronger than all of them. We also examined the character traits of different systems of businessmen in search of something extraordinary although people are depicted as cautious. Entrepreneurship in the economy, contributing to the development and prosperity of the country is aware of the importance in today's world, entrepreneurship, innovation, manufacturing, risk taking, and see opportunities to application activity is defined as the general. Behavioral indicators of entrepreneurship to the market a new product / service to offer to develop a new method of production, the demand gap undiscovered catch and set up a new company in an industry are indicated in the form. Products to the country's economy, manufacturing, technology innovation, making or providing the continuity of the current situation, creating employment opportunities, and the capital base or as a result of all this is contributing by creating value.

Three Dimensions of Creativity in Entrepreneurship: People, Process and Product.

Products and services related to creativity in the accepted idea, creativity accordance with independent observations to explain the size is known. The only way to climb higher in the media that every business seemingly trivial, meaningless and boring to con- International Conference on Entrepreneurship IEC 2014 - 299 - centrate on details that have an intuitive grasp that now. The main features of the world of small business entrepreneurs really admire are surprisingly affecting. We also know a lot of successful entrepreneurs success rather be full of sated appetite to know more owe. (Gerber, 1996, p.7-9). In studies related to creativity brain left brain people (mostly left-brain) and right brain uses (mostly right brain) and divided into two uses research has been done on them. The human brain uses two different ways of thinking seen. The left brain analytical thinking in human redirects move right brain is the human ability to think creatively. Analytical thinking has logical process. Preferences and choices of people using this process minimize the only answer or are reduced to a small number of answers. Whereas the human imagination, creative thinking requires a lot of potential results or leads to different ideas. Initially, the two thinking like opposites together in people's decision-making process they use is seen. People looking at an issue or problem from different angles bring several solutions through creative thinking. The next stage is the implementation phase of the solution. (Yanık, 2007, p.44). Creative individuals show some resistance in the system does not comply with the rules, so they can be recognized as an anarchist in the existing system. Therefore, the behavior of managers complies with the rules on showing up on the pressure builds. Delimit them with reliable and tested methods. One of managerial workers in large companies both large as well as self is obliged to establish relationships with colleagues. Wherein the submis- sive role entrepreneurs play probably will not be easy. (Filis, 2000, p.10). Entrepreneurs have higher self-esteem, they have interpersonal relationships and they are more loyal to their own common sense therefore their value judgment is skewed. All of the studies have shown that the best feature of the entrepreneur is courage to take risks. As a result of the research, taking risks on the run is solving the problems of individuals, more specific results (high probability) of the solutions chosen. Organizations do not occur spontaneously in creativity. Creativity in the process of trial and error is the risk associated with the acquisition and error often occurs in conjunction with successfully. If employees or their jobs if they do not take the risk of domestic entrepreneurs the chance to make new and better use their potential in the direction they have not done. (Çelik et Akgemici, 1998, p.21; Shalley et Gilson,2004, p.37). Turkey has been on women's entrepreneurship in academic studies examined the positive on a table. (Çelebi et Sallan, 1994) has investigated the gender roles, women entrepreneurs and their equivalent values that they have detected changes in women's economic and social order, they adapt easily detected. (Bircan, 1998). Supporting women's entrepreneurship women would be effective in lowering the high unemployment rates in between. On the one hand, the new women's entrepreneurship and employment, according to Bircan, while increasing exports of the product, on the other hand, diversity, and will be able to help move the local resources. (Çelebi, 1997). Women entrepreneurs on the small businesses in the tourism sector in the different activities aimed at women's role in dealing with entrepreneurship research codes. Research results, however, a stronger-than-expected woman to equita- - 300 - International Conference on Entrepreneurship IEC 2014 ble attitude. (Özar, 2002)

Micro and small entrepreneurship of women in Turkey obstacles to their success with nine focus group discussions covered the city is investigating. In this study, women begin to venture their motivations, why they are turning to similar activities, cultural, social, environmental and economic barriers are analyzed. (Ufuk et Özgen, 2001) In An- kara, they do face to face interviews with 220 women; female entrepreneurs are aiming to profile. Since 2013 there are 9 slow cities in Turkey. The emphasis on local initiatives highlights women’s role in process. Therefore this women entrepreneurship encourages other women in the country. In accordance with the opportunity to develop themselves and take the women entrepreneurship training, entrepreneurial activities, come together with other women who wanted to force Union. Of communication and transportation facilities, especially given that women entrepreneurs developed products and services that will enhance the effect of their marketing is a cunningly clever stage facility more efficient.4. Creativity in Product

Product creativity in approach, focus on the results of the creative process or the results obtained is the things that make. Product or idea about creativity, there are many different opinions. These views of the originality of items or ideas, feasibility or is related to suitability for use. Creative product ideas or comments about the creativity of the size difference between them without scratching the gold should be classified. Different types in the same sense ideas although creativity is actually quite different concepts. If it does not change the current paradigm of idea or product, or if the current problems and stresses of assumptions, this means that they retain their current paradigm. Product or idea you are changing the current concepts, this paradigm also available here as a little bit CONCLUSIONof change means.

Creative entrepreneurs usually come up with innovative ideas or improve value of already existing value-added products. As a consequence, they create competitive advantage in marketing. Today's creative work; personal or Revealing inter-group creativity, the product innovation process, it includes creativity and creative environment. Four of these movements have a Creative factor in interaction with each other in such a way that it has been expanded. Creative people always get bored from routine jobs, they usually prefer taking a short cut, they find pleasure in being part of a dynamic range. Their vision and foresight are powerful. For creative people as well as the simulations also applies to entrepreneurs. Most Creative people are more horizontal vertical-thinking thought is no-nonsense, and that draws the right-hand section of brain more.

International Conference on Entrepreneurship IEC 2014 - 301 - Suggestions for allowing administrators to improve organization's creative internal entrepreneurs, employees, customers, and creative individuals are: • In order to encourage employees to take risks, administrators to should not punish them on behalf of their mistakes. Managers should make their employees feel that they are safe and secure in their work environment. • Administrators should be aware that creative individuals usually display resistance to regulations therefore; they should not be supervised with very strict rules. • In order to increase working efficiency, administrators should give creative problem-solving training to employees in organization. • Administrators can benefit from different views by forming teams by employees who work in different expertise areas. While different expertise areas of groups work together, they should support each other. During this period communication channels should be kept open to provide these groups with full access to information. • It has been experimentally proved that creative products have affected customer satisfaction and purchase decisions. This is why administrator should take into account thatREFERENCES creativity in product innovation is essential in marketing. Basadur, M. and Gelade, G. (2003). Using the Creative Problem Solving Profile (CPSP) for Diagnosing and Solving Real-World Problems. Emergence,5,(3): 22-47

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- 304 - International Conference on Entrepreneurship IEC 2014 ENTREPRENEURSHIP DISABLED PEOPLE IN POLAND IN TIMES OF ECONOMIC SLOWDOWN. MYTH OR REALITY? Dr Dorota Kobus-Ostrowska

Faculty of Economics and Sociology University of Lodz

ABSTRACT

The purpose of this article is to identify factors which determine entrepreneurship among disabled people in Poland and to identify the specific nature of activity in this group. The group under study is more exposed to long-term unemployment than the total of unemployed, unless they decide to run own business. Longer and longer periods of job search, or repeated unsuccessful attempts to find job result in a feeling of rejection nomicand later activity. of isolation in society and unwillingness to work at all. Polish examples shows that great solution for many people unemployed also disabled are getting funds for eco-

The achievement of this purpose was possible thanks for comparing activity the population of people with disabilities in Poland in years 2008- 2013, taking into account the selected criteria. The analysis was based on the Ministry of Labour and Social Policy reports MPiPS-01 and MPiPS-07. The study shows Entrepreneurship is widely regarded as the key to economic development. In spite of the economic slowdown is here, more and more companies are established. An important factor creating entrepreneurship in times of economic slowdown is the availability of funds for economic activity. Current- ly, people who want to start a business may apply for funds from one of the following sources. The success in business depends on the degree of determination, hard work and support of loved ones, meaning not only the financial support.

The aim of this article is the answer the question: does this difficult situation trigger an entrepreneurial spirit, effectively discourage us from taking on new challenges and make us more creative? An important factor creating entrepreneurship disabled people in Poland, in times of economic slowdown is the availability of funds for economic activity. The multitude of available resources and growing competition for their acquisition encourage creative people to create their own place in economic reality. International Conference on Entrepreneurship IEC 2014 - 305 - The choice of the place of the analysis is not accidental, because over the last three years in Poland dominated the number of disabled people who started own business. Paradoxically it is also a place with high unemployment rate relative to the long term unemployed.Keywords: ship, support. disability, professional activation, economically active, entrepreneur- INTRODUCTION

The purpose of this article is to identify factors which determine entrepreneurship among disabled people in Poland and to identify the specific nature of activity in this group. The group under study is more exposed to long-term unemployment than the total of unemployed, unless they decide to run own business. The aim of this article is the answer the question: does this difficult situation trigger an entrepreneurial spirit, effectively discourage us from taking on new challenges and make us more creative? An important factor creating entrepreneurship disabled people in Poland, in times of economic slowdown is the availability of funds for economic activity. The multitude of available resources and growing competition for their acquisition encourage creative people to create their own place in economic reality.

The work is for a man a condition for independence, it secures basic needs, and makes it easier to start a family. It is therefore an essential factor in the development of alsoan individual. serves as For a rehabilitation people with disabilities because it the improves work is those also an areas opportunity of life that for havethe imple been- mentation of activities in the occupational and social dimension. In addition, the work negatively affected (Karwat, Kalinowski, 2004, pp. 254-258). Finally, taking into account the theoretical perspective on work, it is thanks to work that the person with a disability should have the opportunity to create an environment consistent with their own vision of the world (Piasecki, Śliwak, 2008, p. 10). Unfortunately, in Poland, in the fourth quarter of 2013, the economically active people with disabilities accounted for only 27.6 per cent and their employment rate is only 22.4 percent. This confirms the thesis that the disabled in Poland rarely undertake work and rarely start own business. And though a number of factors contribute to this; certainly the professional inactivity of many people is determined by the difficulty in obtaining work, setting up business in times of economic slowdown the uncertainty of keeping it. The author puts forward a thesis that the economic activity of disabled people is low, although numerous support instruments are available in the market. The author discusses the major causes of this situation, stressing that a working person, whether fit or disabled, lives a more regular life and has higher aspirations and better prospects for promotion and personal development, as evidenced by the firms run by disabled people. The active ones feel independent financially and - 306 - International Conference on Entrepreneurship IEC 2014 personally and protected from marginalization in the community; they are also more willing to fulfil themselves in the society.

1. The scope and definition of disability and characteristics of changes in the economic activity of disabled people in Poland between 2006 and 2013

The literature uses a whole range of general and detailed definitions to describe a person with disabilities, which serve the statistical, occupational rehabilitation (as a basis for various benefits and privileges) or employment purposes .

According to T. Majewski, „a disabled person is one whose impaired health and limited bodily efficiency deteriorate, limit or inhibit the fulfilment of life and workplace tasks and of social roles, which are achievable taking into account the person’s age, gender, condition, as well as the environmental, social and cultural factors”. The s definition follows that presented by the World Health Organization (WHO, 2001). However, the latter views disability as having a broader dimension and affecting at least one of the areas below: • biological – e.g. impaired or disturbed functioning of the organism following an in- etc.,jury to its organs, • individual – limited activity and functioning in the basic spheres of personal life,

• social – reduced participation in community life.

Another pertinent definition was adopted by the International Labour Organization in 1983 for the purposes of occupational rehabilitation and employment of disabled persons. According to the definition, a disable person is „an individual whose prospects of securing, retaining and advancing in suitable employment are substantially reduced as a result of a duly recognised physical or mental impairment”.

Summing up, disabilities produce consequences that change the way people cope with everyday, occupational and social situations. They may hinder, limit or prevent their functioning at a level recognised as typical of individuals in the given the circumstances and considering their age, gender and skills.

The economically active disabled people may run their own firms, employ workers or be employed, in the same way as the non-disabled members of the population. Many of them fall under the category of unpaid family workers. Table 1. shows absolute changes in the number of the working-age disabled population who were employed between 2006 and 2013.

International Conference on Entrepreneurship IEC 2014 - 307 - Table 1 : The number of economically active disabled people of working age by employment status

In Poland, years 2006-2013

Employed disabled of working age

in which:

Specification Total On-account workers and employers unpaid hired employees family Total in which employers workers

Thousands

2006 416 17

2007 238277 130116 11 4846

439461 100 10 44

20082009 447 317 92 11 40

2010 450 311 94 12

2011 451 326 30

2012 454 329 8791 1315 35

456 331 90 14 32

Source:2013 Annual LFS data, years332 2006-2013 www.niepelnosprawni.gov.pl (1 April. 342014)

Analysis of the 2013 structure of the employed disabled population of working age shows that hired employees represented the largest share (72.8%), while those working on own-account and employers were the least frequent (19.7% in total, only 3.07% were employers); unpaid family workers were also few (7.4%). Comparing structure of the employed disabled population of working age in 2010 it shows that hired employees represented (72.6%), while those working on own-account and employers were the least frequent (20.9% in total, only 2.7% were employers); unpaid family workers were also only (6.6%). During the last eight years taken for analysis hired employees increased their share in the structure of employment of the disabled population.

Therefore, between 2009 and 2010 the share of hired employees in the employed disabled population of working age grew by 2.4 p. p, the 2009 and 2008 increases being 1.3 and 5.8 p.p., respectively. 2010 was the first year when the proportion of own-account workers and employers did not decrease as it had happened before; it even slightly grew

- 308 - International Conference on Entrepreneurship IEC 2014 in relation to 2009, by 0.1 p.p. This means that more disabled people chose to run their own firms. The change proves that despite the deteriorating business conditions, both employers in the period in question and disabled people in the last years were increasingly interested in using the available support measures, particularly when they could implement their own business concepts. While some of them viewed the measures as a chance to make their dreams come true, for others they provided means to cope more easily2. The with essence the harsh of andwork volatile in the business life of a conditionsdisabled person .

Work is a purposeful and organized action, during which certain material and spiritu- al goods are produced, in order to meet human needs. For people with disabilities work is a particular manifestation of their social integration. Work can be examined in many aspects (Szawłowski, 1998):

• Social aspect - resulting in improvement of the quality of human resources, professional work is one of the fundamental activities of human life; it creates favourable conditions for self-realization in this sphere. By contributing work a disabled person acquires a sense of one’s dignity, value, and independence; • Integration aspect - work is an effective way of professional activation, an expression of the strengthening of the policy of equal opportunities for people at risk of social exclusion or marginalization. What’s more, the circumstances of professional work are conducive to establishing and developing social relationships outside the family, and it is especially valuable for people with disabilities because it gives them a sense of acceptance and belonging to a group; • Rehabilitation aspect - work allows a disabled person to improve those functions of the body that have been impaired, which in many cases gives rise to the self-realization of people with disabilities (Karwat, Kalinowski, 2004, pp.254-258); • Economic aspect - means that the disabled are getting full, or at least increased independence thanks to salaries they earn. Consequently, it is an important relief for the social security systems and social care, and expenses incurred by people with disabilities who work, are often higher than those incurred solely from social benefits, and feed the state budget with indirect taxes.

Work is also a key form of rehabilitation for people with disabilities. This is the work that that accelerates the process of professional development and makes the disabled persons responsible for their decisions and actions.

Professional activity encourages action and motivates persons with disabilities to take and keep a job. Moreover, professional activity of a man is one of the conditions for self-reliance and independence. Finally, it also brings tangible benefits for the economy International Conference on Entrepreneurship IEC 2014 - 309 - in the form of higher government revenue from taxes and lower spending on social benefits.3. TheEntrepreneurship chance for disabled and isthe setting entrepreneur up own business. in theory

Entrepreneurship is a concept differently understood and defined. It may be considered as (Jonasz, 2004, pp.18-24): a) the set of characteristics / behaviours that enable the creation and implementation of projects designed to achieve the intended objective, ity.b) the process of creating something new, valuable, c) the type of human activity consisting in using opportunities emerging in the vicin-

According to J. Schumpeter entrepreneurship is expressed in constant search of new “combinations” of factors of production. J. Wiklund defines entrepreneurship as “taking advantage of opportunities by novel combinations of resources in ways that have impact on the market.” ( Winklund, 1998, p.13). Entrepreneurship is manifested in: • deciding on the resources used and methods of their involvement, • taking risks in business, • initiating and implementing new technologies.

Therefore, the entrepreneur is a person “sensitive” to new opportunities, who recognizes existing opportunities. It is a creative person and always willing to take risks, operative, able to quickly adapt to changing conditions (Małecka 2000, p. 15) An entrepreneur is an integral part of each entity, is also a person who not only believes that what he’s doing is right, but is also able to affect the environment, and is the organizer and coordinator of economic resources and the arbitrator who chooses alternative applications ( Bławat, 2001. 77). As the economy was developing new features were attributed and new functions were entrusted to entrepreneurs including the ability to: • acquire and motivate people • organize and run economic activity, • introduce new innovative solutions, • disrupt equilibrium and create market, • notice opportunities not perceived by others, • overcome difficulties which are insurmountable for others.

An entrepreneurial attitude is characterized by initiative, activity, independence and innovation both in personal and social life, and at work. Entrepreneurship is also independence, individual motivation, and ability to take risks. In many cases, it is an innate trait, but it can also be acquired or even learned. It turns out that self-employment is not only a way to make money. It is also developing of one’s own interests and passions. If - 310 - International Conference on Entrepreneurship IEC 2014 we are predisposed to run our own business, this will bring us more satisfaction than being a full-time employee. It is important to select an area which interests us. Then we will have a feeling that our work translates into financial results and it is not working full-time.

Entrepreneurship is widely regarded as “the key to economic development, but also as an impetus for new jobs” (Collins, Hanges, Locke, 2004, pp. 38-45).Why do so many people decide to conduct business? They may be motivated by their personal characteristics such as resourcefulness, independence or the need for recognition and self-realization. Following the Polish experience, we can distinguish the following reasons for conducting business: • favourable situation in the market, • unemployment and the need to find a job • a desire for greater independence, • an urge to increase their income, • an urge to get rich, • an urge to invest their own funds, • a desire to continue family traditions, • an inherited company.

Favourable situation in the market is one exterior motive, independent of man, for setting up a business. Unemployment is a counterweight, which in many cases is not a motivating factor, but a determining factor for the start-ups. Unemployment emerging in a local community has forced many young, creative and energetic people to find their “own place in the world,” understood as the creation of independent work place. It is followed by the desire for greater independence, but also by greater responsibility for their decisions. Two objectives can be identified in this motivation: the first is the need to test oneself in an unassisted action, and the second ability to free oneself from the sometimes rigid organizational structures. This independence and the ability to decide their fate translates into financial independence. For many entrepreneurs the driving force is the desire to increase their income and the desire to get rich (Gibb, Davis, 1990, pp.15-31). The continuation of family tradition or inheritance of a company is rarely mentioned as determinants of activity in business life.

“Being the first” in the industry is an important success factor followed by finding a niche market in a local or regional market. The one, who first finds a chance for himself and combines it with skills and predisposition to connect people, increases the likelihood of success. Still, these are the innovative ideas, and not the copied patterns, that are in great demand. Well, with the exception of new habits we have brought from abroad. If only these comebacks were followed by the money earned there, and language skills, International Conference on Entrepreneurship IEC 2014 - 311 - they would become a great opportunity to start and conduct business in the country. If in addition we could spot market niches, we would have a chance to lead the company to success. Thus, the entrepreneurship is a way of thinking and the process of designing and4 developing Availability business of funds thanks for economic to the ability activity to take risks.

An important factor creating entrepreneurship in times of crisis is the availability of funds for economic activity. Currently, people who want to start a business may apply for funds from one of the following sources: • the Labour Fund • the European Social Fund under the Human Capital Operational Programme • loan funds.

For example, a grant from the Labour Fund in the amount of PLN 19,000 is granted for: • unemployed people who lost their jobs due to redundancies, • unemployed people with disabilities, • unemployed registered in the Local Job Centres at least 3 months before the application, and those who: • have not conducted business in the past 12 months, • have not refused, without a justified reason, to accept a proposal for training, ap- theprenticeship, application and . vocational training in the workplace or to perform socially useful work, exercise intervention works and public works during the 12 months preceding Table 2 : The number of self-employed and amount of grants from the Labour Fund w Poland between 2008 and 2013.

Description 2008 2009 2010 2011 2012 2013 Amount of grants 699 567

Self – employed 69852 155 961 1 63093 964 888 1 77389 017 123 41921 108 864 68639 410 037 42765 in Self- employed disabled 116 289 310 398 367 359

Source: annual LABOUR FUNDS SURVEYS data, 2008-2013 www.mpips.gov.pl (5 March. 2014).

The Human Capital Operational Programme (HC OP) 2007-2013 - Measure 6.2 - Sup- port and promotion of employment provided the financial resources to start a business, assuming that the maximum value of the acquired funds is PLN 20, 000. Funding is available for people who want to start a business and who did not have a registered busi-

- 312 - International Conference on Entrepreneurship IEC 2014 ness over the 12 months prior to the project (does not apply to business outside Polish borders). In order to obtain funding for starting a business a participant in the project must pass a series of free trainings and make use advisory services. This is an excellent opportunity to gain knowledge and skills needed to set up and run a business, covering such topics as bookkeeping, marketing, and law and consulting in the diagnosis of training needs, development of an individual program for each participant in the project.

Particularly advantageous is bridge support paid within 6 months from the date of turnable.commencement of a business, amounting to the equivalent of the gross minimum wage in force at the date of disbursement of the grant and the fact that the grants are non-re- Table 3 : The number of self-employed The Human Capital Operational Pro- gramme (HC OP) 2007-2013 - Measure 6.2 and 6.3.1 non- disabled and disabled in Poland between 2008 and 2013.

Description 2008 2009 2010 2011 2012 2013 21 660

Non – disabled Measure 6.2 54 882 96 892 124 503 14826 455 603 152 137 Non – disabled Measure 6.2 3223 8058 13 674 21 314 29 856 peopleDisabled 15-24 Measure years 6.2 78 115 167 234 349 375 Disabled Measure 6.2 65 189 287 311 459 584 people 15-24 years

Source : Developed by the author based on Sprawozdanie roczne z wdrażania PO KL 2007-2013; The Human Capital Operational Programme (HC OP) 2007-2013 www.efs.gov. pl (28 February. 2014)

It is worth noting that the grant should be earmarked for capital expenditure, not for the costs of current activity, and therefore the funds may be used only for: • purchase of fixed assets (including means of transport apart from entities operating in the transport of goods), • purchase and acquisition of intangible assets, • purchase of current assets, • cost of repair and construction works.

In conclusion, the target groups, which can count on the support, include natural persons who: • work (excluding people who had a registered business in the period of 12 months prior to the application), • have remained unemployed for at least 12 months in the past two years,

International Conference on Entrepreneurship IEC 2014 - 313 - • are entering the labour market for the first time or coming back after an absence caused by giving birth to or raising a child, • are disabled with a determined degree of disability, • are residing in rural and rural communes and residents of cities with up to 25,000 residents.

Certainly, these actions helped by EU funds are an important element of “forward retreat” against the crisis. The multitude of available resources, variety of investments, and growing competition for their acquisition encourage creative people to create their own place in economic reality. I am of the opinion that economic growth in Poland, in 2009 and the following years, was in part a result of the effectively used funds. It has certainly generated more demand in many industries, especially in construction. It is expected that in subsequent years, the impact of European funds on the Polish economy will be even greater, assuming that the funds are efficiently used.

Let’s try to look at the economic slowdown through the prism of benefits. The time of economic slowdown is a great moment to attract highly skilled employees. What’s more, the growing unemployment in many regions helps employers attract workers with limited financial expectations. This creates not only an opportunity to reduce costs, but gives the possibility of providing high quality service, assuming that the entrepreneur is a strategist and in the given circumstances, seeks to gain advantage in the market.

Another very important argument is that suppliers more willingly negotiate the prices of goods or services they offer themselves. For many, it is almost a struggle for exis- tenceCONCLUSION which drives them to make concessions, deferred payments, etc.

To recapitulate, work is for a man a condition for independence, it secures basic needs, and makes it easier to start a family. It is therefore an essential factor in the development of an individual. It is the disabled safe- employment that is becoming an alternative from the viewpoint of a job-seeker and is the driving force of the economy in the macro-economic scale. Economic slowdown is a threat to unprepared entrepreneurs, driven in their decisions only by the current situation. For those who act in a thought- ful way and plan, especially disabled the crisis may actually stimulate growth, giving impetus to seek new market opportunities and reduce costs. Moreover, the entrepreneurship is extremely important from an economic perspective. Thus, economic activity brings economic and social benefits. Economic benefits due to new jobs, higher incomes and spending, and social benefits because economic activity allows finding a place in economic reality and encourages others to take creative initiatives. The question comes back: “Is the economic slowdown, therefore, a good time to set up one’s own business?” - 314 - International Conference on Entrepreneurship IEC 2014 It is always worth considering starting one’s own business. Especially in times of crisis, when companies announce layoffs and no one can guarantee permanent employment. In such situation setting up one’s own business might be a better option than waiting for vacancies. Certainly, owning your own business involves greater risk and threat of failure. And although one has to be careful, above all, one should be an optimist. It is also worth remembering that running your own business, especially at the beginning, means above all, a major personal contribution. The success in business depends on the degree of determination, hard work and support of loved ones, meaning not only the financial support. The aid funds are certainly helpful; many people have started or expanded their businesses thanks to these funds. Finally, the success in business is not just a matter of ideaREFERENCES and capital; it’s also the continuous development. Bławat, F. (2001). Pojęcie przedsiębiorcy w piśmiennictwie ekonomicznym. Gospodarka w Praktyce i Teorii, (8), p. 77.

Collins, C.J., Hanges, P., Locke, E.A. (2004). The relationship of need for achievement to entrepreneurship: A meta-analysis, Human Performance, 17, 38-45.

Gibb, A., Davis, L. (1990). In pursuit for development of growth models of small business, International Small Business Journal, 9 (1), 15-31.

Jonasz, W. (Ed.). (2004). Innowacje w okresie przedsiębiorczości w procesie transformacji. Warszawa: Difin Press.

Karwat, I.D., Kalinowski, P., Kierunki realizacji rehabilitacji zawodowej z uwzględnie- niem rodzajów niepełnosprawności L. Solecki (Ed.), Problemy ludzi starszych i niepełno- sprawnych w rolnictwie. (2004). Lublin: Instytut Medycyny Wsi.

Małecka, E. Przedsiębiorca a menadżer. Podobieństwa i różnice. Gospodarka w praktyce i teorii. 1(6), p. 15.

Piasecki, M., Śliwak, J. (2008). Wybrane zagadnienia z aktywizacji zawodowej osób niepełnosprawnych, Lublin: Fundacja Fuga Mundi, Norbertinum Press, p. 10 et seq.

Szawłowski, K.(Ed.). (1998). Rehabilitacja, podstawy diagnostyki funkcjonalnej, usprawni- ania leczniczego i reintegracji społecznej, Gdańsk: Medical Academy Press.

Wiklund, J., Small Firm Growth and Performance. (1998). Entrepreneurship and Beyond, Jonkoping International Business School, p. 13.

International Conference on Entrepreneurship IEC 2014 - 315 - - 316 - International Conference on Entrepreneurship IEC 2014 COLLECTIVE CREATIVITY MANAGEMENT MODEL FOR CREATIVE ENTERPRISES Jurate Cerneviciute, Rolandas Strazdas International Business School at Vilnius University Author Note This research was funded by a grant (No. MIP-092/2013) from the Research Council of Lithuania

ABSTRACT

The last two decades have witnessed an explosion of academic interest in the strategy, performance and organization of the creative industries, often emphasizing that their creative character requires a different form of management.

Competition within CI is based not on costs, but rather on the ability to generate experiences for consumers. To generate value for consumers, cultural products coordinate elements of aesthetics, design and narrative content to make complex combinations. A lot of them are aimed at mass audiences - music, films, games and books have limited market value, standard prices and a relatively short product lifecycle. Consumer tastes are so undefined that it is impossible to predict which one of them will be a success. This means that the CI sector needs continuous, fast product innovation that the consumer may easily recognize; that is innovation that has both a utilitarian and a symbolic value. The process of new product development often requires diverse knowledge and skills. The organizations are becoming increasingly ‘‘team’’ based. Working in teams, collective creativity skills are becoming more important than job-related knowledge.

There is no doubt that some groups and teams can excel in the production of creative ideas or products, despite this, much research in the area of group dynamics suggests that groups are often much less creative and productive than is often assumed. Some groups are more efficient than others i.e. produce more output with same or even less input. Study on group creativity as a multifaceted, multistage phenomenon revealed that creativity is a multistage a process. The article is focuses on the collective creativity process optimization.

The main goal of the research is to identify factors, which are relevant for the efficiency of collective creativity process. Based on the research a model for increasing efficien- International Conference on Entrepreneurship IEC 2014 - 317 - cy ofKeywords: collective creativity is developed and presented in the article.

creative enterprises, cultural products innovations, creativity management, collective creativity efficiency

INTRODUCTIONCollective Creativity Management Model for Creative Enterprises

Creative industries are settings characterized by variation in skills and talents, openness to novelty, and exchanges of ideas, supporting change and innovation, as is case media, film production, advertising and etc. While in many industries the paradigmatic approach to innovation draws on organizational rules and behavioral routines to pro- ativeduce actors. standardized goods, in creative industries products and services are often very unique and short lived. Their production is usually organized around networks of cre-

Creativity is a basic element in the production of an artistic good, providing a source of inspiration in science, and is also implicated in problem solving activity in management of organizations. Nowadays organizations and enterprises are more and more focused not on individual, but on collective creativity. Collective creativity occurs when ideas are shared by two or more people. Collective creativity can be very powerful and can lead to more culturally relevant results thank individual creativity does. This is what happens with really good collaboration based on teamwork. But few people are in the habit of using or expressing their creativity. Often, creativity is likely to be latent. There are some common facts: munity– First: members. during the creative phase, people need to freely exchange their new ideas within a new community. Thus, close and localized relations must exist among the com-

– Second: focus group and brainstorming situation enforce creative output. – Third: to be managed, creative groups need the right combination of freedom (emotion and passion) and constriction (rules). (Belussi, 2012:9-10)

Creativity is enacted differently in various settings. The project-based organization or the spontaneous networks built by artists represent the central organizational form in the artistic area; collaborative research networks are the locus of the inventive activity science; teamwork and communities of practices, characterize the settings of firms in manufacturing industries.

The success of a novel idea depends not only on the nature of the idea itself, but also on the selective power of market forces. Only those ideas – as contained in services and - 318 - International Conference on Entrepreneurship IEC 2014 products – are retained and diffused in the market place if they can be assigned some economic value. Creative products differ in their survival chances, depending on their market value but also in response to social and cultural conventions, such as contained in fads and fashions.

Systemic and social understanding of creativity has opened the notion of creativity increasingly to organizational and managerial inquiry. Factors in the work environment, such as influences from group interaction, incentive structures and failure-tolerant cultures, have been proposed as crucial antecedents of creativity (Amabile, 1996, 1998; Bilton, Leary, 2002; Ford, 1996). In organizational approach to creativity there is the view of creativity as a network phenomenon, involving networks of people and organizations leading to new understandings as well as networks of ideas, and beliefs, leading to routines, conventions, and novelty (Staber, 2008).

Network-based issues of creativity and the creative process have been discussed as a collective process, and views creativity as a form of situated knowledge (Jeffcutt, Pratt, 2002). Knowledge resides not only in the minds of individuals, and in externally codified forms, but also in situational contexts of spaces and places, organizations, networks and other systems of social interaction. Investigations into the specific role of network configurations in fostering creativity have reiterated the crucial importance of ‘weak ties’ and more peripheral network positions in facilitating creativity (Perry-Smith, 2006; Simonton, 1999)

To understand cultural industries, it is necessary to begin with their key distinguishing characteristic: the non-utilitarian nature of their goods. In most industries, it is utility that imparts definition to product features and use, utility allows for systematic comparison of different products, and by extension, it provides a basis for the emergence relatively stable standards of quality.

Cultural goods are experiential goods (Hirsch 1972, Holbrook and Hirschman 1982). They derive their value from subjective experiences that rely heavily on using symbols in order to manipulate perception and emotion. The unpredictability of a subjective experience makes it extremely difficult to identify and establish clear standards of quality (Holbrook, Hirschman, 1982). Even when there is widespread agreement about the high quality of cultural products, the consensus belies deep disagreements as to why this is the case. Basic notions of quality tend to remain contestable in cultural industries. Opinions about quality can diverge so strongly that producers find it hard to figure out why some products do well while others do not. Understanding why products succeed or fail is forever in the realm of educated conjecture. Taken as a whole, these contradictory interpretations produce ambiguity that impacts on the ability of managers to make International Conference on Entrepreneurship IEC 2014 - 319 - well-informed decisions. Managing creative personnel poses challenges because of tensions that arise based on the dual goals of commerce and art, often associated with exploitation for efficiency and profitability contrasted with exploration in which returns are both uncertain and not limited to economic ends.

Managers involved with the creation, production, marketing, and distribution of cultural goods must navigate tensions that arise from opposing imperatives that result from these industry characteristics. Polarities that are shaping organizational practices massin cultural entertainment. industries are those: 1. First, managers must reconcile expression of artistic values with the economics of

2. Second, they must seek novelty that differentiates their products without making them fundamentally different in nature from others in the same category. 3. Third, they must analyze and address existing demand while at the same time using their imagination to extend and transform the market. tion.4. Fourth, they must balance the advantages of vertically integrating diverse activities under one roof against the need to maintain creative vitality through flexible specializa-

5. Finally, they must build creative systems to support and market cultural products but not allow the system to suppress individual inspiration, which is ultimately at the root of creating value in cultural industries. (Lampel, Lant, Shamsie, 2000:265-268)

Managing creative resources is therefore one of the key challenges confronting organizations in cultural industries. To meet this challenge, organizations in the cultural industries have to recruit and motivate individuals who seem to possess the insight and intuitive understanding of how creative resources can be discovered and nourished. Their competitive advantage depends on finding these individuals, and also on developing structures which leverage creative resources without at the same time stifling them. …producers in the cultural industries are confronted with two problems: demand patterns that are highly unpredictable and production processes that are difficult to monitor and control.

The evolution of cultural industries is driven by attempts to deal with these problems by constant shifts in managerial practices and organizational forms. On the demand side, firms try to shape consumer preferences by expending large-scale resources on new methods of distribution, marketing, and promotion. However, shaping consumer tastes is always difficult, and in the case of the cultural industries it is made even more difficult by the fact that tastes are part of a wider social and cultural matrix over which firms have little or no control. On the supply side, firms seek to develop new ways of - 320 - International Conference on Entrepreneurship IEC 2014 uncovering and managing creative inputs. However, creativity comes from individuals whose talents and inputs can be organized and controlled only up to a point. The suc- mercialcessful management imperatives. of creative resources in the cultural industries depends on finding this point, on striking a balance between the imperatives of creative freedom and com-

Creative business quintessentially is project business - production of theatre plays, movies, video-games, music, advertising campaigns or software epitomizes the proto- typical features of temporary systems. Creative industries demonstrate the flexibility and ability of projects to generate new knowledge; however, they also reveal paradoxes and tensions of project organization (Sydow, Lindkvist, & DeFillippi, 2004). Whereas creativity calls for diverse teams and the introduction of newcomers, managerial practice favors homogenous and proven teams. The project is a temporary collaboration of different skill holders over a pre-determined time period for completing a pre-specified complex task. Organizing different skill holder temporarily and flexibly in a project is dynamic principle of organizing, likely to change in course of the project’s lifetime and for that has been used to deliver “change”. Projects are of particular relevance for product innovation in creative industries as they depend upon the continuous creation of products with new content or traits, or originals products. Most products original in CI contain no radically new functions; rather, they are created in order to fulfill demands in existing market. One of the way creating originals is product differentiation as a way of seeking competitiveness on consumer markets where competition is based on ability generate “experience” for consumers, but not on costs (Caves, 2000). This kind of products we can see in entertainment industries like film or computer game. To generate value for consumers, cultural products coordinate elements of aesthetics, design and narrative content to make complex combinations. A lot of them are aimed at mass audiences - music, films, games and books have limited market value, standard prices and a relatively short product lifecycle. Consumer tastes are so undefined that even though several products might enjoy worldwide demand, it is impossible to predict which one of them will be a success. This means that the CI sector needs continuous, fast product innovation that the consumer may easily recognise; that is innovation that has both a utilitarian and a symbolic value.

In CI one core issue of organization is how the skill holders who can provide content (i.e. “creative personnel) are coordinated with those who hold the “humdrum” skills – those of manufacturing, marketing and distributing products. At the heart of this problem are differing motivations of these skill holders, with archetypical artists often motivated intrinsically by a creative urge of communicating a message or a vision, and entrepreneurs or managers typically extrinsically motivated in terms of economic incentives. The skill holders needed for cultural products innovation project are very International Conference on Entrepreneurship IEC 2014 - 321 - diverse. Artist undertakes the first phase of innovation – invention of music, text and image. However the innovation does not stop there: it also entails production, marketing and sales of cultural product. This mean that the tasks involved in production and marketing of cultural products encompass many different activities and people holding different specialized skills only within only one or few of these tasks, and are characterized by differences between the motivations – why managers and other participants in CI face paradoxical challenges, whose resolutions require a balancing act between seemingly contradictory practices (Lampel, Lant, & Shamsie, 2000). Such paradoxes of managing creativity revolve around two key foci: (1) managing creative personnel and (2) managing creative processes. (DeFillippi, Grabher, Jones, 2007).

Creative process management model (CPMM) for CI enterprises The Creative process management model (CPMM) is aiming to solve the following questions which are related to the above identified paradoxes: – How to combine the diversity of a team, which is necessary for novelty/creativity and homogeneity of a team, which is necessary for good management and understanding ?; – How to get a balance between the imperatives of creative freedom of team members (product development/supply side) and commercial imperatives (product commercialization/demand side) ?. – How to generate new product/experience for a consumers and commercial success, which takes time with the relatively short product lifecycle of CI?

The central part of CPMM is well structured new product development team (see Fig. 1). It is recommended to divide the team into two parts: core team and extended team. The aim of core team is to ensure homogeneity of the management process. The aim for extended team is to ensure diversity, which is necessary for novelty and creativity of a new product.

Figure 1. Creative process management model (CPMM) for CI enterprises

- 322 - International Conference on Entrepreneurship IEC 2014 It is important that a core team will consists from the members of the team which well know each other, but from other hand the core team should have experience in new product development/supply side and new product commercialization/demand side. It is important to stress that new product development always have to be balanced. It means that activities of product development and product commercialization are equally important for the success of the product. In the CPMM model product development and commercialization tasks have to be accomplishing not linear (first product development than commercialization) but simultaneously (product development tasks are accomplishing in parallel with product commercialization tasks).

The extended team consists from diversity of new members which have to be recruit- ed based on the requirements of a product development project. Not only an individual persons could be invited in the extended team. A core team can invite even entire teams or companies in the extended team for accomplishing the required tasks. For the recruitment of extended team the high level of networking is very import. The networks of people and organizations are leading to new understandings as well as networks of ideas, and beliefs, leading to routines, conventions, and novelty (Staber, 2008). The novelty is very important for new CI product development. It is also very important to ensure that the extended team would consist not only from the members for the product development/supply side but also include members for the product commercialization/ demand side. A core team should ensure constant coordination and interaction between these two types of extended team members.

The management of the team could be based on the following principles and findings (Amabile, 2011): – Inner work life drives performance; – Progress drives inner work life; – Work must be meaningful; – “Small wins” matter; – Catalysts facilitate the work itself; – Managers make the biggest difference; – Seven key catalysts to which managers should pay special attention: setting clear goals; allowing autonomy; providing resources; giving enough time (but not too much); helping with the work; learning from problems and successes; allowing ideas to flow; – Four major nourishes to which managers should pay special attention: respect and recognition; encouragement; emotional support (empathy); affiliation.

In order to ensure good motivation and success of the product development process, clear goals to be set for whole team (core and extended) and individually for each team member. This is very important and difficult stage in the management process as the International Conference on Entrepreneurship IEC 2014 - 323 - goals should from one side be meaningful for the team members, from another side it should be relevant for the commercial success of the product. The extended team members have to be provided with the target characteristics related to new product development (target customer, target deadline, target product functional characteristics, target budget, target commercial characteristics and etc.). This is mainly a task of a core team. The emphasis has to be given toward explaining the process of task/problem decomposing and integration (see Fig. 2).

Figure 2. Process of task/problem decomposing and integration

This step is very important in order to avoid team productivity loss due to social loaﬁng (Diehl & Stroebe, 1987) and social inhibition (Camacho & Paulus, 1995). By splitting the task into smaller tasks and delegating them to the members of the team, we will avoid social loafing. The basic rule for this situation is that each member of the team has to have a role and responsibility of some smaller tasks. The task execution process has to be coordinated in such a way, so the results of each member of the team will be possible to integrate and to get a homogeneous and elegant solution.

The other very important challenge for creative process management is how to ensure the success of new products. It is even more difficult taking into account that consumer tastes of CI are so undefined that even though several products might enjoy worldwide demand, it is very difficult to predict the success of a new product developed. The CI sector needs continuous, fast product innovation that the consumer may easily recognise and will get new experience. For ensuring success of new product the CPMM model introduces a new stage in the creative process management – the product pattern identifications (see Fig. 1).

The aim of this stage is to try to identify the elements and model of a successful product. In this stage several successful products to be analysed. It is important to stress that for the commercial success of a product not only product characteristics but also marketing and commercialisation are relevant. For this a product of CI has to be seen as a system innovation. The system innovation is a newly developed system, the individual - 324 - International Conference on Entrepreneurship IEC 2014 elements of which might be not new but the novelty appears in the novel composition, integration and new relations between these elements (Strazdas et al., 2013).

Thorough and accurate identification of a product pattern would significantly increase the speed to the market and a success of newly developed product. In order to achieve high quality of a product pattern the continuous improvement process could analysis.be implementes. It means that the success and failures of new product to be analysed continuously and the product pattern continuously improved based on the result of the REFERENCES Amabile, T. M. & Kramer, S. J. (2011). The power of small wins. Harvard Business Review, 89 (5), 70-80

Amabile, T.M. (1996). Creativity in context: Update to social psychology of creativity. Boul- der, CO: Westview Press;

Amabile, T.M. (1999). How to kill creativity. Harvard Business Review, 9-10, P.77-87.

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Camacho, L. M., & Paulus, P. B. (1995). The role of social anxiousness in group brainstorming. .Journal of Personality and Social Psychology, 68, 1071–1080.

Caves, R.E. (2000). Creative Industries. Cambridge, MA: Harvard University press.

DeFillippi, R., Grabher, G., Jones, C. (2007). Introduction to paradoxes of creativity: Man- agerial and organizational challenges in the cultural economy. Journal of organizational Behavior, 28(5), P.511-521.

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International Conference on Entrepreneurship IEC 2014 - 325 - Hirsch, P. M. (1972). Processing fads and fashions: An organization-set analysis of cultural industry systems. American Journal of Sociology, 77, P. 639–659.

Hirsch, P. M. (2000). Cultural Industries Revisited. Organization Science. 11(3), P. 356-361.

Holbrook, M. B., E. C. Hirschman. 1982. The experiential aspects of consumption: Consumer fantasies, feelings, and fun. Journal of Consumer Research. 9(9, P. 132-140.

Jeffcutt, P., Pratt, A. (2002). Managing creativity in the cultural industries. Creativity and Innovation Management, 11(4), P.225-233.

Lampel, J., Land, T., & Shamsie, J. (2000). Balancing act: Learning from organizing practices in cultural industries. Organization Science, 11, P. 263–269.

Perry-Smith, J. E. (2006). Social yet creative: The role of social relationships in facilitating individual creativity. Academy of Management Journal, 49, P.85–101.

Simonton, D. K. (1999). Origins of genius. New York: Oxford University Press.

Staber, U. (2008). Network evolution in cultural industries. Industry and Innovation, 15, P.569-578.

Strazdas R., Cerneviciute J., Jancoras Z., Measuring of system innovation in the context of creative industry development / Rolandas Strazdas, Jūratė Černevičiūtė, Žilvinas Jančoras // The 6th ISPIM Innovation Symposium – Innovation in the Asian Century. 8-11 Decem- ber, 2013, Melbourn, Australia: symposium proceedings. Manchester : ISPIM, 2013. ISBN 9789522654236. p. [1-16].

Sydow, J., Linkvist, L., & DeFillippi, R. (2004). Project-based organizations, embeddedness and respositories of knowledge. Organization Studies, 25, P.1475–1490.

- 326 - International Conference on Entrepreneurship IEC 2014 WHITE COLLARS AND PINK COLLARS FOR ENTREPRENEURS: THE CASE OF TURKISH BANKING INDUSTRY Ahmet Hakan ÖZKAN

Department of Business Management in English, Faculty of [email protected] and Administrative Sciences, Istanbul Aydın University, Istanbul, Turkey,

ABSTRACT Purpose –

White collars and pink collars can be observed in the banking industry. The main aim of this study is measuring the quality of the working environment of the ofbanks entrepreneurs. by using three factors, which are knowledge, consistency and trust, and comparing the working environment of the agents to the managers to comprehend the approach Design/methodology/approach –

100 questionnaires are used to evaluate the quality of the working condition quality of the banks. Semi-structured interviews and snowballFindings sampling – is used to reach various departments of the banks.

Enterpreneurs provide better conditions to white collar workers comparing to pink collar workers. On the other hand, whşte collar workers are more affected by the entrepreneurs than the pink collar workers. The working condition quality of the managers are perceived to be better than the working condition quality of the agents. company.But there is no significant difference on the consistency of the conditions. Duration has a significant effect on the working conditions which create trust on the employees to the Originality/value –

This paper is a proof of that the managers are sometimes some- where between the white collars and pink collars. The managers can be disturbed by the otherKeywords: managers or the entreprenurs, which are above them. ers. Bank staff, entrepreneurs, working condition quality, agents and manag- INTRODUCTION

Staff motivation is an important key component of success on today’s competitive environment (Okorley and Boohene, 2012). Entrepreneurship cannot be explained with- International Conference on Entrepreneurship IEC 2014 - 327 - out an organization and motivation is the main need of every organization. It is also more important on the sectors where customer relationship management is important such as banking. Because the staff directly interacts with the customers at these sectors. The effect of customer relationship management on increasing the market share, is higher in these kind of sectors (Verhoef, 2003). The CRM agents are also known as pink collar workers.

The white collar workers are also very important for the organizations. Because their qualifications, such as education, leadership and experience, might be unique and their contribution to the organization is might be very high (Allen and Meyer, 1996). For this reason, enterpreneurs might be paying a special attention to the working conditions of the managers. The managers can also motivate the agents and when this event is truely managed, then the agents will be able to increase the profits of the company (Ryals, 2005).

Motivation is related with the quality of work (Armstrong, 2003). Entrepreneurs search the ways to increase the quality of the work of the employees. The culture of the organization will be formed according to the strategy of the entrepreneurs. If there is no certain strategy, then the culture may not appear. In an organization, if a common culture is not formed, then it is usual to see perceptional differences (Schein, 1990). It is difficult to make any quality researches in such organizations. To avoid this constraint, the banks are researched. The banks have stronger organization cultures, comparing to the other industries.

Motivation can be defined as a combination of external and internal factors that force the employees to work harder (Byars and Rue, 2002). The quality of working environment affects both external and internal factors (Berman, et al, 2010). Working environment with higher quality means better results (Bashaw and Grant, 1994). The working environment quality of the bank staff is elaborated with this study and it is tried to compare the environment of agents and managers to each other. The questions are prepared to eliminateLITERATURE the impacts REVIEW of the perception differences.

Banks have regular structures and standards in most countries, such as Turkey. Com- paring to the other countries, the working conditions of the banks are more consistent. Because the workplans are more certain and duties are determined with sharp lines. For this reason, to study on motivation, banks are preferred.

Shrivastava & Purang (2009) made a survey on 340 employees of both public and private sector banks to check their job satisfaction level and it is seen that private sector - 328 - International Conference on Entrepreneurship IEC 2014 bank employees perceive greater satisfaction with the financial compensations, social conditions, and expectations of job as compared to public sector bank employees. This study has proved that entrepreneurs of private sector is aware of the importance of the CRM and understands the contribution of the employees .

A research which is made in Saudi Arabia indicated that rewards have positive significance on motivation, motivation is positively related to the job satisfaction and rewards have a positive significant effect on job satisfaction (Jehanzeb et. al., 2012). Another study proved that motivation has positive impact on employee performance in the Ni- gerian banking industry (Isiaka, 2011). These studies are an evidence of that entrepreneurs can increase the performance of the employees by focusing on the motivation.

It is also possible to see some complicated studies which are about motivation and bank staff. Khan & Mufti (2012) researched the effect of different compensation components on the motivation level of the bank employees. Sangwan (2005) tried to determine the most important motivational factors, by observing some private and public sector companies together with some public sector banks, and the variables are chosen as salary, career prospects, organisational image, nature of job, organisation culture, job security, work environment, working hours, power and authority, freedom of work, staff welfare and fringe benefits, value addition and proximity to residence. With another study, the correlation between motivation factors and working environment in National Banks of India is observed, and top five factors appeared to be job satisfaction, promo- tions / expectations, recognition, financial compensations and styles of organization / managementMETHODOLOGY (Shrivastava and Bhatia, 2013).

Instead of the motivation factors, the factors of quality are taken. The motivation factors are already elaborated. That is why the quality perception is taken as a measure. The quality of the working environment, which is provided by entrepreneurs are evaluated by using SERVQUAL.

Total 100 interviews are used for this research. 50 of the participants are managers and the rest of the participants are agents. One employee and one manager from each company is interviewed. Semi-structured interviews are used and the snowball sampling is used. The participants are from 15 different participation bank branches, 15 different conventional bank branches, 10 participation bank departments and 10 conventional bank departments. Totally employees of 3 different participation banks and 3 different conventional banks participated this research.

SERVQUAL is used to measure working conditions quality (Parasuraman, Zeithaml International Conference on Entrepreneurship IEC 2014 - 329 - and Berry, 1991), the staff is taken instead of consumers and three components are determined as knowledge, consistency and trust (Parasuraman and Zeithaml, 1988). Knowledge is a combination of evaluations about the share of information, intelligence and knowledge of the managers. Consistency is a combination of evaluations about the meeting ability of the existing conditions with the offered conditions, meeting the expectations. Trust is a combination of evaluations about the proactivity of the managers, communication and the rest of the conditions.

Knowledge represents the ability of reaching the necessary information at the working environment. Consistency represents the ability of meeting the expectations of the employees. Trust represents the confidence of the employees on the company. These components are also the components of communication. Communication is another important factor of service quality, which comes before control (Zeithaml, Berry and Para- suraman, 1988).

The questionnaire has 39 questions. The 8 questions of the survey are used to form the variable of knowledge, 4 questions of the survey are used to form the variable of consistency and 26 questions are used to form the variable of trust. One question is taken out due to the results of factor analysis.

After the measurement, independet sample t-test is used to compare the managers to the other employees. On the other hand one way and two way ANOVA is used for evaluations. The hypothesis which are shown below are tested: H0 : There is no significant difference of the working condition quality perception for knowledge between the managers and the other employees. H1 : The working condition quality of the managers for knowledge are better than the working condition quality of the agents. H0 : There is no significant difference of the working condition quality perception for consistency between the managers and the other employees. H2 : The working condition quality of the managers for consistency are better than the working condition quality of the agents. H0 : There is no significant difference of the working condition quality perception for trust between the managers and the other employees. H3 : The working condition quality of the managers for trust are better than the working condition quality of the agents. H0 : There is no significant effect of gender on trust. H4 : There is a significant effect of gender on trust. H0 : There is no significant effect of duration on trust. H5 : There is a significant effect of duration on trust. H0 : There is no significant effect of gender and duration together on trust. - 330 - International Conference on Entrepreneurship IEC 2014 FINDINGSH6 : There is a significant effect of gender and duration together on trust.

The frequency table of our data is shown on table 1. The number of the female participants seem to be less than the male participants. The age is densed between 26-35 and the number of the people with bachelors’ degree or undergradute degree is the highest. TheTable duration 1. Frequency shows the Tableworking duration at the same company.

Frequency Percent

Gender male 79 79

female 21 21

10 10

18-25 Age 26-35 53 53

36-45 34 34

primary46-55 23 23

27 27

Education high school 7 7

college

bachelors'/ masterundergraduate 586 586

50 50

Duration 1-3 years 44 44

4-6 years 6 6

7-10 years

International Conference on Entrepreneurship IEC 2014 - 331 - The descriptive statistics of the data can be seen on table 2. The distribution of gender is be positively skewed, with a tail on the right, the distribution of age is negatively skewed, with a tail on the left, the distribution of education is negatively distributed, withTable a tail 2. on Descriptive the left, the Statistics duration is more near to normal distiribution than the others.

gender age education duration position

Mean 1,21 1,56 1,5

Median 1 2,32 3,394 1,5 1,5

Std. Deviation 0,50252

Skewness 0,409361,446 0,689020,095 1,01399 0,608360,59 0

Std. Error of Skewness 0,241 0,241 -0,6130,241 0,241 0,241

Percentiles 25 1 2 2 1 1

50 1 2 4 1,5 1,5

75 1 4 2 2

Cronbach-alpha is found as 0,9868. KMO measure of sampling adequacy is 0,679. Therefore the data is appropriate for factor analysis. Three factors together could explain the observed subject with a power of % 87,626.

- 332 - International Conference on Entrepreneurship IEC 2014 Table 3. Independent Sample t-test results

Levene's Test for Equality of t-test for Equality of Means Variances

F t Mean Dif ference Difference Sig. df Sig. - Std. Error Upper (2-tailed) Lower Equal variances 7,776 ,006 ,012 LEDG KNOW- -2,554 98 -,4050 ,15855 -,71963 -,09037 assumed Equal variances ,012

-2,554 86,848 -,4050 ,15855 -,72014 -,08986 not assumed Equal variances ,149 ,0250

CONSIST 1,423 ,236 98 ,882 ,16787 -,30813 ,35813 assumed Equal variances ,149 ,0250

86,705 ,882 ,16787 -,30867 ,35867 not assumed TRUST Equal variances ,000

5,807 ,018 -10,857 98 -1,4224 ,13102 -1,68240 -1,16240 assumed Equal variances ,000

-10,857 97,539 -1,4224 ,13102 -1,68242 -1,16238 not assumed

The results of independent sample t-test can be seen on table 3. With the results of independent sample t-test, according to the p value, which is 0,006, our first research hypothesis is supported and null hypothesis is rejected at the %1 significance level. Ac- cording to the p value, which is 0,441, our second research hypothesis is not supported and null hypothesis is accepted at the %5 significance level. According to the p value, which is 0,000, our third research hypothesis is supported and null hypothesis is rejected atTable the %54. Levene's significance Test level. of Equality of Error Variances

F df1 df2 Sig.

1,182 5 94 ,324

The Levene test of equality of error variances, which is on table 4, has shown that

International Conference on Entrepreneurship IEC 2014 - 333 - Table 5. Results of Two Way ANOVA

Source Type III Sum of df Mean F Sig. Squares Square 5 ,000

CorrectedIntercept Model 32,465(a) 1 6,493 10,143 ,000 GENDER 177,377,712 1 177,377,712 277,098 ,294 20,412 2 10,206 15,9441,113 ,000 DURATION ,046 2 ,964

GENDERError * DURATION 60,172 94 ,023,640 ,036

Total 100

688,778 99 Corrected Total 92,637

For the rest of our hypotheses, two way ANOVA is used. The results are on Table 5. Our fourth research hypothesis is rejected and null hypothesis is accepted at the %5 significance level. Our fifth research hypothesis is accepted and null hypothesis is rejected at the %5 significance level. Our sixth research hypothesis is rejected and null hypothesis Figureis accepted 1. Means at the Plot %5 significanceDiagram level.

The means plot diagram of gender and duration is on figure 1. The means plot diagram indicates that there is no interaction effect between gender and duration. But both variables have fundamental effects. It means that they have their own impacts themselves, not together.

- 334 - International Conference on Entrepreneurship IEC 2014 CONCLUSION AND FUTURE PLANS

The pink collar employees have perceived no direct relationship between their working conditions and the entrepreneurs. But 4 managers have announced that their job is required by the entrepreneurs. 1 of them mentioned that he witnessed some of his friends have lost their jobs during 2008 crisis. But after only some weeks, relatives of the entrepreneurs started to work instead of them.

During the semi-structured interviews, 11 of the managers explained that their managers or entrepreneurs were trying to provide them good conditions for success. But in time they were trying to deteriorate the conditions deliberately due to some reasons, such as cost. Three managers claimed that the effort of deteriorating the conditions is not related with their performance, costs or the situation of the business. It is sometimes related with mobbing. For this reason, they cannot get what they expect and they score consistency questions lower than the others.

It might be usual to see the quality perception of the agents finding the working condition quality lower than the managers. Because they might be having worst conditions, compared to the conditions of the managers. It is seen that managers have better technological opportunities (Clemons, Sashidhar and Row, 1993). Managers have higher qualifications and experience. But it is not usual to see the consistency of the conditions of the managers equal to the other employees.

29 of the agents claimed that there is no bottom-up approach in their organization. The monitoring is always done as a top-down operation which starts from the entrepreneurs. Hence the problems of the agents are not monitored by the head management and their problems can be solved if their managers pay attention. The managerial impacts on the service quality of an organization cannot be neglected (Kohli and Jaworski, 1990). Expanding and internationalizing banks have efficient managerial operations which also focuses on the problems of the agents, as it has been experienced in Japan (Qian and Delios, 2008).

It is argued that the gender has a significant effect on work motivation (Bergström and Ternehall, 2005). Competitive environment might have different impacts on males and females (Slater and Nerver, 1994). On the other hand our research could not find any significant effect of gender on working condition quality. But our data has shown that duration has a significant effect on the quality of working conditions.

It is planned to improve the collected data and compare the results of the participation bank employees to the conventional commercial banks. The working conditions of these two bank groups might be differing. Our next study will be surveying this differ- International Conference on Entrepreneurship IEC 2014 - 335 - ence. Because the staff of the participation banks have a significant increase. The staff of the participation banks, which was 13.454, increased with 1.471 people between september 2011 and september 2012 with a higher rate than the other commercial banks (BDDK,REFERENCES 2012). Allen, N.J. and Meyer, J.P. (1996). “Affective, continuance, and normative commitment to the organization: an examination of construct validity”. Journal of Vocational Behavior, 49(3), pp. 252-276.

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