Cultural Influences on Entrepreneurial Orientation: The Impact of National Culture on Risk Taking and Proactiveness in SMEs

Abstract

This study utilizes data from 1,048 firms in six countries to assess the impact of national culture and certain institutions that are representative of national culture on two key dimensions of entrepreneurial orientation: risk taking and proactiveness. Eight hypotheses are developed specifying the expected relationships between four cultural dimensions and levels of risk taking and proactiveness within SMEs. Additionally, two hypotheses are developed to explore between-country differences in the relationship between risk taking and proactiveness and a range of institutional variables. Uncertainty avoidance and power distance are both found to have a significant negative influence on risk taking; uncertainty avoidance, individualism, and power distance are found to negatively influence proactive firm behaviors. A number of institutional factors are also found to be significantly linked to between-country differences in both risk taking and proactive behaviors. This research contributes to existing theories of national culture by suggesting that the various dimensions of cultural values and several of the institutions that are representative of national culture impact the willingness of entrepreneurial firms to display risk taking and proactive behaviors.

Towards a new framework for SMEs success: a literature review

“…The sociocultural environment has a significant impact on the market SMEs operate in while it directly impacts upon business creation and entrepreneurial activity (Aggarwal and Goodel, 2014;Hardy and McGuire, 2008;Kalantaridis, 2007;Kreiser et al, 2010;Stephen et al, 2009;Thornton et al, 2011;Urbano, 2006). In fact, it has long been established that societies vary in their ability to create and sustain small business and entrepreneurial activity (Carter and Wilton, 2006;Chrisman et al, 2002).…”

Condições Estruturais Empreendedorasna Criação De Novos Negócios: A Visão De Especialistas

“…Por exemplo, em relação a esses últimos, os valores são atributos individuais influenciados culturalmente pelas instituições que estão presentes na vida do empreendedor ao longo das várias etapas, exercendo um efeito importante por meio do processo de socialização (Hofstede, 1991). Apesar de Hofstede (1991) não ter estudado a relação direta entre a cultura expressa nas quatro dimensões que propôs (individualismo/ coletivismo, redução da incerteza, masculinidade/feminidade, distância em relação ao poder) com a atividade empreendedora, essa ligação foi posteriormente estudada por outros autores (Kreiser et al, 2010;Mitchell, Smith, Seawright, & Morse, 2000).…”

Developing Risk Management as a Competitive Capability

“…Internal resistance (Gray, 2002), cultural imperatives (Kreiser et al, 2010) and misalignment of priorities as relates to innovation (Marshall and Ojiako, 2010) are just some of the identified challenges that SMEs face. Literature indicates that, to deal with the challenges of developing robust risk management capabilities, SMEs could consider a number of approaches which may include empowerment (Scott et al, 2012), training (Ekanem and Smallbone, 2007), enacting of appropriate human resources policies (Bacon and Hoque, 2005), the establishment of clear control frameworks (Das and Teng, 2001) and the articulation of firm values and a culture of trust (Welter and Smallbone, 2006).…”

“…Marshall and Ojiako (2010) had earlier linked innovation with risk taking; thus the related question sought to establish the extent to which employees were encouraged to take on calculated risks. Questions on individual responsibility and risk taking are linked to the superlative risk culture discussed by Kreiser et al (2010). Then, feedback from Question 6 was used to triangulate the information obtained via secondary data relating to the current risk management practices within the firm.…”

“…Aloulou and Fayolle, 2012;Covin and Wales, 2012) have shown that entrepreneurial orientation, which articulates consistent tendencies towards entrepreneurial behaviour, comprises three distinct behavioural components -innovativeness, risk-taking and proactiveness. Our interest in risk management is, however, driven by literature (Kreiser et al, 2010;Gao et al, 2012;Podoynitsyna et al, 2012), which suggests that risk management is a critical aspect of value creation in SMEs.…”