The rise of globalization in the current era has made the term ‘global entrepreneurship’ a very well known word. The term Global entrepreneurship is used for those entrepreneurs who operate on the global level and businesses around the world. It plays a very important role in today’s businesses, since many of the entrepreneurs seek for the multinational corporations in order to evaluate their skill of leadership. However, these global entrepreneurs face many challenges and opportunities. The entrepreneurs must understand the global nature of the business as well as the environment in which they are operating in order to stand successful in the coming days. Hence, the following research intends to discuss and critically evaluate the global nature of business and the environment for the entrepreneurs who look for global corporations to operate their business. By considering the outstanding impact and importance of entrepreneurship n the modern days as well as the behavior for individuals and contemporary economies, the most vital articles that are dedicated to the entrepreneurship were investigated in order to get a deeper insight view into the subject.
In the competitive ambience, globalization is a major challenge for the entrepreneurs. Viewing it from the perspective of culture, the intensity of the challenge is aggravated. As a matter of specification, in order to secure the market position, the companies and organizations compromise with the needs of the customers. In case of the entrepreneurs, this compromise adds vulnerability to the market position of the enterprises. Culture, here, relates with the failure of the enterprises to lure large number of customers through the appropriate exposure of the hospitality. The previous sentence indicates the issue of poor communication skills, which highlights the issue of language barriers. This research would peek into these challenges to assess the approach of the entrepreneurs, especially towards cultural challenges,
The aim of this research is to understand the cultural challenges and difficulties, which the entrepreneurs face during the process of globalizing their business.
This chapter considers various sources for enriching the knowledge of the readers regarding the correlation between the variables. Application of theories and models enlivens the challenges for the entrepreneurs in terms of overcoming the challenges. The conceptual framework acts as a summarization of the relationship between the two variables.
The entrepreneurship profile all over the world shows similar kind of features but still, there are some, who are under the influence of the culture. One of the most proper definitions of culture is that- Culture is something that shapes the perceptions and interpretations of people. The difference in between perceptions and interpretations leads to emergence of different behaviors. According to Spencer-Oatey and Franklin (2012), “Culture is that complex whole which includes knowledge, belief, art, law, morals, custom, and any other capabilities and habits acquired by man as a member of society”. It is said that entrepreneurs are one of the most dynamic segments of the society. They are immediately over piped by the cultural change and to survive, they must follow the current trends and events very closely. Variations in the entrepreneurial activities are lead by culture. These variations are that the cultural background has a conclusive importance on the exchange of information, beliefs, local culture, practices and understandings that are shared by the community. Also, the cultures that are regional-based, build a foundation for the economic activities by several factors like innovation.
Entrepreneurs are the ones, who have initiated their professional career. It is at this stage, when consciousness is of utmost importance. They differ in their education and experience and the most successful entrepreneurs are the ones who share certain personal attributes such as, determination, creativity, flexibility, dedication, leadership, self-confidence, passion and “SMARTS”. Each of the entrepreneurs has these qualities in them in different degrees. Moreover, conglomeration of culture with the workplace is a serious concern in terms of enhancing the efficiency. This is applicable also for the entrepreneurs. Adhering to the organization culture should be the sole vision of the entrepreneurs for achieving loyalty, trust and dependence from the customers. Typical examples of this is respecting the individual sentiments and purchasing power of the customers. Within this, personal values and beliefs of the entrepreneurs attain a second preference. Countering this, if the entrepreneurs respect their culture, values and customs, automatically they would be able to reflect this respect in their professional and corporate outputs (Cruz, Hamilton and Jack 2012). The critics are still confused about the place of culture within the workplace. Countering this confusion, it can be said that innovation within the performance of the entrepreneurs with due respect to the organizational culture enhances their professionalism.
There are many challenges that an entrepreneur faces. The most difficult are to balance the decisiveness with proper caution; to be ready for a chance by having done all the preliminary work that are possible in order to minimize the likelihood of the new endeavor and; to be an individual of action of actions, who do not delay before grabbing a chance or opportunity. Here, the critics are of the view that the most important challenge, which the entrepreneurs encounter, is the language barrier. This is in terms of the lack of understanding regarding the specific tastes and preferences of the customers in the foreign market. Moreover, the entrepreneurs are unfamiliar with the language of the foreign country. The third challenge is the threat of substitute, which compels the entrepreneurs to face depression in terms of setting and expanding their business.
Different studies have been carried out in order to identify the natural culture but in this research, the education system, family structure etc are considered to be effective within the extent of the culture. Hence, the popular GLOBE study were evaluated (House et al. 2013). It consists of nine cultural dimensions and that are power distance, institutional collectivism, uncertainty avoidance, gender egalitarianism, in-group collectivism, assertiveness, performance-orientation, future-orientation and humane-orientation (Kabasakal et al, 2012). The ‘power distance’ refers to “the general measure of the degree of interpersonal influence that those who hold power in a social structure can exert over those who lack power” (Sturm and Antonakis 2015). The Institutional collectivism measures the degree to which the society encourages collective action. The uncertainty avoidance dimension refers to the measure of degree to which the society members feel uncomfortable with ambiguity and uncertainty. The gender egalitarianism refers to the extent to which a society or a particular organization minimizes the gender role differences and the gender discrimination (Connell 2014). The in-group collectivism dimension measures the degree to which an individual express loyalty, pride and cohesiveness in his organizations as well as family (Vukonjanski et al. 2012). The assertiveness dimension refers to the degree to which the people in an organization are assertive or confrontational in their relationship with the others (Ozgen 2012). On the other hand, the future-orientation is the degree to which an individual in the organization or society engages in behaviors like future planning, investing, and gratification delaying. Lastly, according to Radziszewska (2014) the humane-orientation refers to the degree to which the society members are friendly, fair, altruistic, caring, kind and generous to others
TPB (Theory of Planned Behavior) has postulated three ideational independent determinants of the entrepreneurial intention (Fini et al. 2012). Entrepreneurial intention refers to the self-acknowledged belief by an individual that he intend to start a new business venture and intentionally plans to do the same at some point in his future. Here, behavioral science is crucial in terms of evaluating the intellect of the entrepreneurs (Iqbal et al. 2012). The second is the subjective norms that refer to the discerned opinions gathered from the social reference groups, such as friend and families. Moreover, the level of PBC or Perceived Behavioral Control is also applicable in this context. This is in terms of assessing the response of the entrepreneurs when place in a particular circumstance (Mohamed et al. 2012). It reflects the perceived potential to become a global entrepreneur. It is said that the person who perceives to become more able to conduct global entrepreneurship activities are more presumably to involve in them than in the other career paths. Other studies on this topic suggest that positive attitudes towards the entrepreneurship would increase the appeal of an individual towards self-employment (Moriano et al. 2012).
According to Autio, Pathak and Wennberg (2013), for the entrepreneurs, great opportunities are associated with greater risk. The greater complexity of the new businesses of the entrepreneurs increases the challenge of management faced by them while making the success more rewarding side by side. In order to deal with these complexities of the international operations, the cultural differences and the networks of the alliances requires a set of specialised skills with well-documented and complex skills of domestic entrepreneur. The small business only focus on the local markets but for a big firm, this trend means a continuous erosion of the market by the small and specialised firms that are well equipped global products and cheap production costs. The modern trends towards the market fragmentation would only be accelerated and the present large companies will require to have strategies in the place in order to meet these challenges.
Research methodology is the procedure that helps to conduct the entire research in a systematic and organized manner. It outlines a proper structure of the research. It can be described as a process for research, which is very organized and structured. It comprises of the various types of techniques that an individual may use while conducting the research. It describes different types of pertinent ideas and concepts that are appropriate with this specific research study. Furthermore, Madan and Mishra (2014), has stated that the “research methodology explains the chosen research methods”. This part includes the research philosophy, its purpose and the approach of research. In addition, the researcher in this chapter discusses the process of data collection, and the techniques of data analysis.
The researcher selects positivism philosophy in this research for shedding light on the scientific and objective facts related to the cultural challenges, which the entrepreneurs face in the process of globalization.
Exploratory approach has been selected by the researcher to explore the cultural challenges encountered by the entrepreneurs while venturing into the foreign markets for expanding the business.
In this research, the researcher follows both quantitative and qualitative data analysis method. In the primary data analysis method, 3 entrepreneurs have been surveyed on “What are the cultural challenges, which they face in the process of globalizing their business?” Apart from this, relevant themes have been developed for validating and enhancing the reliability of these challenges.
3 entrepreneurs have been selected as the collection of data in this research. Due to the absence of adequate time and financial resources, the researcher limits the sample size to 3.
The researcher abides by Data Protection Act (1998) to avert the commercialization of the answers provided by the entrepreneurs. Apart from this, the researcher adopts a liberal approach towards the entrepreneurs in terms of giving them liberty to withdraw the process as soon as they find uncomfortable. Apart from this, the researcher refrains from referring to the sources, which needs subscription. Moreover, acknowledging the external sources enhances the ethical nature of the researcher in terms of falling prey to instances such as plagiarism and collusion. This enhances the reliability and validity of the data collected.
This chapter provides an insight into the methodology, which the researcher follows for conducting a research on the challenges faced by entrepreneurs during the process of globalization. Specifically, the chapter uses positivism philosophy, exploratory approach, qualitative and quantitative data analysis method for analyzing the responses of the entrepreneurs selected.
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Activities |
Week 1 |
Week 2 |
Week 3 |
Week 4 |
Week 5 |
Week 6 |
Week 7 |
Week 8 |
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Gathering information on the topic |
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Developing aims, objectives and questions |
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Referring to various sources for data collection |
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Selecting samples |
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Interview, survey |
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Analyzing the collected data |
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Deducing conclusion and suggesting relevant recommendation |
Table: Action plan of the research
(Source: created by the author)
In this section, thematic analysis would be undertaken through the development of themes relevant to the challenges encountered by entrepreneurs while going global. Along with this, managers would be interviewed for gaining an insight into their viewpoints regarding the challenges encountered by the entrepreneurs during the process of globalization.
According to one of the publications of BBC, merely after two years of eBay’s set up in China, the personnel were compelled to shut down the access to the main website in China. Instead of breaking down, eBay indulged in partnership with one of their location partners. This alliance maintained continuity in online business (Bbc.com 2018). This was, however, was criticized by the critics, nullifying eBay’s success in China in terms of the possession of a strong brand image. Along with this, the critics also opined that eBay is not the only brand, which struggled to transfer their success overseas. Starbucks also underwent a similar fate as that of eBay. It had merely enjoyed 8 years of success, when almost three quarter of the outlets in Australia were forcibly shut down due to the failure in terms of maintaining the pace with the local brands in a competitive ambience. This order reflected the pressurization of the Chinese brands on eBay’s attempt to set up their business. This kind of pressurization adversely affects the morale of the eBay staffs regarding business expansion. The major drive behind this is the difficulty in adjusting with the trends of the brands, which have already created a strong market presence.
The challenges encountered by eBay and Starbucks can be aligned with the lack of oriental approach towards marketing. This lack seems meager in comparison to the unfamiliarity with the language, culture, customs and traditions of the foreign country, China. The immediate outcome of this is the following results from the field surveys:- 89.65% (364/406) of the entrepreneurs can be placed in this category. 10.34% (42/406) of the employees are an exception to this category, as they evaluate the steps taken towards marketing (Inflibnet.ac.in 2018). This evaluation exposes the entrepreneurs to fewer challenges. 59.3% (241/406) of the entrepreneurs encounter the issue of raw materials while setting their outlet in the foreign markets. The major drive behind this is the lack of repairing services. The residual 40.6% (165/406) of the entrepreneurs had stable relationships with the suppliers, which enabled them in averting the challenge of inadequate raw materials. In this category, the entrepreneurs encountering the issues of food processing, printing, publication and tailoring can be placed.
94.5% (384/406) enterprises encounter the problem of power. This is also the case with the entrepreneurs facing the food processing and metals. 45.8% of the entrepreneurs belong to the category of the issue of labor. 84.4% (343) enterprises face the issue of inadequate finance. This is a very serious issue, which stalls the economic growth. 39.1% (159/406) of the enterprises belong to the category, where the issue of poor quality management in the process of globalization (Inflibnet.ac.in 2018). Poor quality management degrades the personality of the managers in the minds of the employees. Herein, it is the question of self-respect, which the entrepreneurs need to protect for creating a positive image in the minds of the customers in the foreign countries.
According to an academic survey conducted by Kauffman Foundation, the challenges faced by the entrepreneurs can be divided into two types- general and governmental. 49% of the samples remained neutral regarding the general challenges. This is an escalation in the statistics of 37% in 2013 and 40% in 2012. Merely, 46% of the samples chose the issue of unpredictability of the business conditions as one of the greatest challenges, which the entrepreneurs face in the process of globalization. This unpredictability can be correlated with the challenge of maintaining the pace with the successful brands of the foreign countries. This challenge possesses flexibility to aggravate conflicts, discriminations and harassments between the enterprises and the startups in the foreign countries. These instances contradict the aspect of collaborative output in the workplace, nullifying the cultural concepts of unity and coordination between the employees and the managers.
In terms of governmental challenges, 41.71% of the samples exposed neutrality in response to the policy, which they think is the biggest barrier in terms of setting up business in the foreign countries. 17.71% of the samples responded that high tax rates pose as a threat for the enterprises in the process of globalization. 14.41% of the samples feel that licensing form and fees hamper the globalization of the entrepreneurs, stalling the growth process. 12.48% of the samples feel that harsh tax obligations aggravate the difficulties for entrepreneurs in the process of globalization (Kauffman.org 2018). 5.23% of the respondents are of the opinion that vulnerability in the lawsuits compels the entrepreneurs to fall prey to the illegal instances. Along with this, 3.22% of the respondents exposed agreement towards labor regulation hampering the entrepreneurs’ efforts to set up their business in the foreign markets. As a matter of specification, 83% of the respondents felt that they were fine with the governmental regulations in terms of globalizing the business. The major drive behind these responses is the harsh regulations imposed by the government on the enterprises in the foreign countries. Non-compliance to these legislations degrades the brand image of the enterprises. This is in terms of falling prey to the scandals and issues. Incapability of the entrepreneurs in modifying their business strategy aggravates the complexities of gaining trust, loyalty and dependence from the customers.
According to another survey, 41.49% of the samples feel that tax related issues are an obstruction to the business initiatives of the entrepreneurs. 30.63% of respondents feel that licensing is a greatest obstacle for entrepreneurs in terms of globalization. 9.08% of the samples indicate the issue of personal health and safety issues while travelling to the foreign countries. 8.59% of the sample respondents think that zonal restrictions regarding land use aggravates their difficulties in terms of setting up business in foreign countries (Scipress.com 2018). 7.94% belong to those who lays stress on the varying employment conditions being one of the major obstacles in the path to globalization of business. 2.27% feel that environment conditions of the foreign countries might pose as a threat to the business set up. Tax related issues collaborate with the challenge of mocking and taunts regarding the incapability of the entrepreneurs to serve the customers properly. This taunts adversely affects the psyche and morale of the staffs in terms of expanding their business.
One of the other studies reflects the challenges encountered by SME’s in Nigeria. According to the statistics, 50% are exposed to the issues regarding competitive advantage on the first five years of their set up in the year of 2003. 25% of the SME’s adopt the process of routing or coding the process clearing funds. Herein lays the appropriateness of the strategy in terms of managing the cash, which flows from the internal environment to the external environment. This bears resemblance with the accounting issues. Along with the strategy, lack of clarity regarding the marketing is also relevant in this issue (Iosrjournals.org 2018).
The figures represented in these aspects contradict the intensity of the challenges when the entrepreneurs go to the foreign countries for business expansion. However, the statistics failed to highlight the issue of language barriers, which is one of an important challenged encountered by the entrepreneurs while setting up their business in the foreign countries. This issue nullifies the other challenges. It is less likely that the natives of the other country would understand the language in which the entrepreneurs would speak. This difficulty would make the marketing complicated for the entrepreneurs, enhancing the aspect of competitive rivalry.
The statistical figures of the surveys bring Porter’s five forces and PESTLE analysis together. This is in terms of the aspects of threat of substitutes and harsh governmental regulations. Threat of substitutes intensifies the competition between the brands, making it difficult for the start-ups in the foreign countries to achieve loyalty, trust and dependence from the customers, through the provision of quality and original products. Adherence to competitive policies would alter the fate of entrepreneurs like eBay, Starbucks to establish their business in the threshold of foreign countries like China.
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First entrepreneur |
Second entrepreneur |
Third entrepreneur |
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“I think cash flow management is one of the greatest hurdles, which hampers our path towards globalization.” |
“Ah well, I think improper strategy is a matter of serious concern in terms of penetrating into the path to globalization.” |
I think clarity regarding the sale is an important aspect in terms of setting up business in the foreign markets. This is lacking in most of the entrepreneurs. |
The first entrepreneur thinks cash flow management is one of the greatest obstacles in the path towards globalization. Careless attitude towards keeping track of the cash flowing from the internal environment to the external ones results in financial instabilities. He is of the opinion that lack of knowledge in this direction is bound to encounter tough competition. He expressed concern regarding the addition of vulnerability to their market position, if rationalistic and strategic approach is not taken immediately.
The second entrepreneur continues the opinion of the first entrepreneur. This is because of the aspect of strategy. Absence of strategic approach enables the entrepreneurs to encounter negative results in terms of globalizing the business. His statements reflect that he is aware of the fact that this negativity would bore negative results if they are not modified on a priority basis.
The third entrepreneur highlights the importance of clarity, which is crucial for the entrepreneurs in the process of globalization. He is of the opinion that clarity regarding what to sell and how to sell would help them to become aware of the specific needs and demands of the customers.
Conclusion, recommendation and limitations
This research has attempted to provide a deeper insight into the cultural challenges, which the entrepreneurs face while adopting the process of expanding the business to the global markets. However, the research fails to delve deep into every cultural dimension, which hampers the aspirations of the entrepreneurs to expand their business. The major drive behind this is the availability of inadequate time and financial resources. In spite of these limitations, the researcher would undertake exploratory approach towards discovering the cultural challenges, which might demotivate the entrepreneurs in the process of achieving professional development.
Along with this, the researcher undertakes primary qualitative data for collecting relevant information on speculating the cultural challenges, which the entrepreneurs face while going global. Consideration of academic and journal articles contradicts the aspect of limitations. Along with this, referring to the websites broadens the perspectives of the research. Interviewing the entrepreneurs of the native country enlivens the knowledge and expertise of the aspiring entrepreneurs regarding the expansion of the business.
As a matter of specification, the research excavates that most of the entrepreneurs encounter the challenge of language barrier in the foreign countries. The challenge of financial instabilities, power and marketing attain the second preference. After this, comes the challenge of the tax regulations, which hampers the import and the export activities for the enterprises. In view of all these challenges, the recommendation of training, group discussion is proposed by the researcher, which would be dealt in depth in the following section.
Organizing group discussions between the entrepreneurs would reduce conflicts, discriminations and harassments. Involving the entrepreneurs from the foreign countries would play a major role in reducing racial discriminations. If these discussions are interactive, the managers would become aware of the viewpoints of the entrepreneurs. This information would act as an agent for the managers in terms of providing them with the platform for exposing their talents and skills. Adopting a rational approach in this direction would create a positive image about the managers in the minds of the entrepreneurs.
Presence of the board panel is necessary in the group discussions. This is in terms of handling the racial discriminations due to difference in opinion. Lack of oriental approach in this direction would reflect a negative example of the culture in case of the managers. This lacking attaches a negative connotation to the dimension of assertiveness in terms of power and authority. Adherence and compliance with the standards and protocols of Human Rights Act would make the entrepreneurs feel that their viewpoints is being respected and valued.
Plans regarding facing the challenges need to be constructed and evaluated. Herein lays the appropriateness of the problem solving cycle. Along with this, risk assessment exercise can also be brought into the discussion. This assessment would be beneficial for both the managers as well as the entrepreneurs in terms of achieving effective solutions for the potential challenges in the process of adopting globalization. Mere adoption of these methods is not enough. Evaluation of the methods would bring to the forefront the drawbacks in mitigating the challenges.
Apart from this, if Lewis model of culture is considered, the preconceived skills, knowledge and expertise would be enhanced. As a matter of specification, this model would expose the entrepreneurs to the different cultures in which the companies and organizations intend to invest. Awareness in this direction would help the entrepreneurs in making effective plans towards penetrating into the threshold of the global markets. Adoption of this model would enhance the linearity of structure and control exposed by the entrepreneurs.
Countering this, theories and models would be insignificant if the entrepreneurs envision sticking to the core values identified by the managers. Consciousness in this direction would enhance the personality of the entrepreneurs. Taking into consideration checklists and templates would make the entrepreneurs aware of the extent to which they have been successful in altering their current personality. Herein, setting short-term goals needs to be developed in terms of improving focus on the self-assessment exercise. These goals need to be realistic and achievable. These goals need consistent evaluation in terms of measuring the extent to which the entrepreneurs have emerged successful towards presenting themselves towards the foreign investors.
References and Bibliography
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