Business practices within South Asian family and non‐family firms:

Abstract

PurposeThe purpose of this paper is to investigate differences/similarities in business practices of second‐generation South Asian entrepreneurs within family‐owned firms, in comparison to their second‐generation counterparts managing and running their own business.Design/methodology/approachThe paper draws its theoretical underpinning via a number of concepts relevant to the South Asian business experience. To understand this, investigation was conducted within a phenomenological paradigm. In total, 48 semi‐structured interviews were carried out with three South Asian groups. Namely, first‐ and second‐ generation Sikh, Hindu and Pakistani Muslim entrepreneurs from both family and non‐family owned micro‐small businesses situated within the Greater London area. In addition, nine businesses from all three ethnic groups were selected to complete the multiple (comparative) case‐study stage of the research.FindingsSimilarities and differences between second‐generation entrepreneurs within family and non‐family businesses (NFBs) are evident. For instance, a majority of the respondents (from family and non‐family businesses) considered entrepreneurship as something to embrace, and not as a means of economic survival. A minority of the respondents within FBs were pushed into entrepreneurship, as such, this has had an impact on the father‐son relationship in a negative way. Second‐generation respondents from FBs, in comparison to their counterparts within NFBs, were more likely to have decision‐making pertaining to the business impeded by the father. Furthermore, respondents from FBs were moving back into the said business, whereas, respondents from NFBs were developing businesses more akin to their prior employment experience.Practical implicationsThe paper offers insights into the behaviour and business practices of second‐generation South Asian entrepreneurs from family and non‐family, so adding a further dimension to our understanding of this particular group.Originality/valueThe paper will be of value to policy makers, practitioners and researchers alike, is it sheds light on motives, prior experience and class resources the second‐generation bring to entrepreneurship.

South Asian ethnic minority small and medium enterprises in the UK: a review and research agenda

“…This is perhaps why scholars found more robust results for some communities, such as Indians, but could not discover generalizable results for others, such as Bangladeshis. In addition, while past research has showed that language and other skills are positively related to both employment opportunities and entrepreneurial success, there seems to be no generalizable results whether education is more related to paid employment or self employment among South Asians in the UK (McPherson, 2010;Jones et al, 2012). In other words, previous research suggests that more educated Indians in the UK prefer paid employment whereas more educated Pakistanis have traditionally focused on self employment, especially in case of family businesses.…”

“…However, the decrease in Asian self employment was not a result of failure of their businesses, it was rather a result of a shift from self employment to paid employment as well as from low value added enterprises to high yielding entrepreneurship (Jones and Ram, 2003). In other words, some of the British-born South Asian entrepreneurs switched from low-value generation businesses, such as corner shops and off-license newsagents, to highreturn businesses, such IT and insurance sectors (McPherson, 2010;Jones et al, 2012;Dhaliwal and Adcroft, 2005). In summary, it will be incorrect to conclude the quantitative decline of SAEM SMEs in the UK as a failure because many of these entrepreneurs switched to either better paid employment or higher-yielding entrepreneurship.…”

“…In short, while past research has found that ethnic minorities in the UK are discriminated in the job market as well as by banks and other financial institutions (Blanchflower, 2004;Basu, 1998;Jones and Ram, 2010) which leads some people to self employment, the vast majority of SAEM SMEs in the UK are not the results of discrimination (Basu, 1998;McPherson, 2010).…”

“…Others might be attracted towards entrepreneurship because of non-for-profit motives and self-esteem such as the desire for conquering new markets and or earning fame through business success in a new venture or filling a gap in the market which could be beneficial for consumers (Basu, 1998;Dana et al, 2009). Research shows that other reasons ethnic minority members become entrepreneurs, including South Asians in the UK, are to keep their family members together and in employment through a coordinated family strategy, to be successful in life and to gain social status in their community (McPherson, 2010;Dyer and Handler, 1994;Clark and Drinkwater, 2010;Hamilton et al, 2008;Pio and Dana, 2014).…”

“…For example, McPherson (2010) noted that second-generation entrepreneurs of Asian origin in the UK are considering protection of rights of employees and employee development as well as creating a more open boss-worker relationship as important issues for their small business success. Furthermore, he argues that second-generation entrepreneurs in family-owned businesses seem to be fully involved in developing infrastructure including firm-specific human capital through continuous in-house staff training as well as staff retention in order to meet changing demands of customers, minimize loss of trained staff and increase business efficiency.…”