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A Deconstruction of Factors That Affect Performance of Women Entrepreneurship in Saudi Arabia

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A Deconstruction of Factors That Affect Performance of Women Entrepreneurship in Saudi Arabia A Deconstruction of Factors that affect Performance of Women Entrepreneurship in Saudi Arabia By Merfat E. Shafii A dissertation submitted to The Graduate School in partial fulfillment of the requirement for the degree of DOCTOR OF PHILOSOPHY MANAGEMENT UNIVERSITY OF HULL, ENGLAND, UK 2015 Approved by: Dr. Haseeb Ahmed Shabbir (First Supervisor) __________________________________ Dr Sultanul Azam Choudhury (Second Supervisor) 1 Dedication This Thesis is dedicated to the memory of my mother, Fatma her prayers got me to where I am today. 2 Acknowledgements In the name of Allah, the most Generous and the most Merciful. All praise is due to Allah, for giving me motivation and enthusiasm along this journey. A number of people were highly instrumental in assisting me in bringing this project to fruition. My Husband Ismat, has always encouraged me to pursue my academic goals and objectives. I would like to thank my supervisor, Dr. Haseeb Shabbir. for his support, supervision and guidance during the research project and also throughout the writing of this thesis.I would like to express my thank you to Dr. Pervaiz Akhtar . for his useful comments to make this study more focused. Thanks to The Saudi Ministry of Higher Education for giving me the invaluable chance to pursuit my postgraduate studies . Finally, I would like to acknowledge the ongoing support of a wide host of friends and family members. All success is owed to these key individuals. 3 Abstract Female entrepreneurship in Western countries has received ample research interest over the last decade. Research about female entrepreneurs in the Middle East and North Africa Region (MENA) and particularly in Saudi Arabia is, however, still in its infancy. Little is known about the financial and business support resources available to these women, or whether or not the specific needs of female entrepreneurs in Saudi Arabia are effectively met by the available economic and financial infrastructure. The aim of the present research study is twofold. Firstly, the author attempts to assess the role of non-government and non-profit organisations in providing financial support and business development services (BDS) such as training, information and advice to female entrepreneurs in Saudi Arabia. Secondly, the author attempts to identify the specific needs of female entrepreneurs or women who wish to start a business. These aims are reached by surveying available financial programmes and business development programs (BDS) in Saudi Arabia. This part of the study relies on a thorough review of research literature and the evaluation of available financing and business programmes. Thirdly, primary data are collected from businesswomen in Saudi Arabia who run their own small or medium enterprise or who plan to start their own business in the foreseeable future and have already taken steps to start their own business. The 4 author conducted one-on-one interviews with 30 Saudi business women to identify their needs, personal experiences, and perceived barriers that hinder their ability to run or start a business in Saudi Arabia. The author uses a semi-structured interview format to collect data. The expected results of the research were twofold: (1) the analysis conducted as part of this study is expected to uncover the main difficulties that female entrepreneurs are facing in Saudi Arabia when running their own business; (2) the study’s results provide insights that allow the researcher to determine whether or not the assistance of non-profit organisations is actually helpful in this area. The study’s findings are also expected to have implications for policy makers trying to boost female entrepreneurship. The present study made several significant findings; specifically, female entrepreneurs desire access to better training not only to hone their entrepreneurial skills but also to take advantage of the affordances of modern communication technologies. Secondly, cultural norms and tribalism hold women back from reaching their full potential as entrepreneurs. This not only has negative effects on women’s access to financing, but also on their abilities to access education and other resources. Moreover, the financing options for women are very limited; except for one state- sponsored program women were not aware of other “official 5 channels” they could use to finance their businesses. Non- governmental organizations such as professional organizations for women are still lacking; participants expressed their wish that such organizations would expand their offerings to women. Female entrepreneurs highlighted the importance of social support networks, especially families and male relatives (fathers, husbands) in setting up their business and becoming successful. And lastly, women were motivated to become entrepreneurs out of a desire to become self-sufficient and make a positive contribution to their community. The findings of this study make significant contributions to the scant body of research on female entrepreneurs in Saudi Arabia in that they shed light on the specific barriers women encounter. Moreover, the study highlights the importance of social support networks in the population of female entrepreneurs in Saudi Arabia and demonstrates how cultural norms, tribalism, and conservative family values permeate Saudi Arabia’s bureaucracy and financial institutions and thus create barriers for women. The major limitation of the study is its qualitative research design. While the author expected to obtain rich qualitative data that helps gain a deeper understanding of female entrepreneurship in Saudi Arabia, findings of the study cannot be generalized to the entire population of Saudi female entrepreneurs. Moreover, this type of research is also prone 6 to self-report bias. Given the specific cultural context of the study, self-report bias may take on two forms. Women may either overstate or understate their business success or the barriers they experience. Secondly, participants may not be willing to freely speak their mind on the subject under consideration because of social and cultural conventions that prevent them from doing so. The author expects that some answers will have social desirability bias (Creswell, 2009). Building effective rapport and trust with participants will therefore be of paramount importance to obtain unbiased responses. Despite these limitations, the author hopes to make a valuable contribution on which other researchers and policy makers can build. The author provides a comprehensive list of recommendations arising from the findings from the study. The recommendations not only address gaps in research and suggestions for future research but also give practical advice to policy makers, the Saudi government and NGO stakeholders seeking to boost female entrepreneurship in Saudi Arabia. 7 Contents 1.0 Chapter One.............................................................................................................. 12 1.1Introduction.......................................................................................................... 12 1.2 Research Problem.............................................................................................. 26 1.3 Aims and Objectives ...................................................................................... 28 1.4 Research Methodology .................................................................................... 29 1.5 Theoretical Orientation ............................................................................. 30 1.6 Participants ....................................................................................................... 31 1.7 Sampling ................................................................................................................. 32 1.8 Research Ethics ................................................................................................ 33 2.0 Chapter Two: Literature Review ................................................................ 35 2.1 Research on Female Entrepreneurs ....................................................... 35 2.2 Women Entrepreneurship in MENA and Asian Context ................. 38 2.3. Women’s Entrepreneurship in Developing Islamic Societies .............................................................................................................................................. 49 2.3.1 Business Environment in Saudi Arabia ......................................... 51 2.4. Needs of WomenEntrepreneurs in Saudi Arabia .......................... 56 2.4.1. Introduction ............................................................................................ 56 2.4.2 Status of Women in Saudi Arabia. .............................................. 58 2.4.3. Education and Women in the Kingdom ....................................... 62 2.4.4 Entrepreneurship in Saudi Arabia .............................................. 78 2.5. Definitions of Entrepreneurship and Social Entrepreneurship ....................................................................................................... 80 2.6 Women’s Small Enterprise Development and Its Influences 90 2.6.1 Characteristics of Women’s Entrepreneurship .................... 90 2.6.2 Motivation for Women to Create Business Ventures ........ 92 8 2.6.3 Saudi Women’s Social Activism...................................................... 99 2.7Financing Options............................................................................................ 125 2.7.1 Equity Financing
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