Women and Entrepreneurship

Female Durability, Persistence and Intuition at Work

Beatrice E. Avolio Alecchi, Mirjana Radović-Marković, Mirjana Radovi?-Markovi?

• Publisher: Routledge
• Year: 2016
• Print ISBN: 9781138247444
• eBook ISBN: 9781134771776
• Topic: Business
• Subtopic: Business General
• Index: Business

Women and Entrepreneurship comes from two authors with especially rich experience in this field of research. Embracing experience in a range of developed and developing countries and examining both dependent and independent roles, Beatrice Avolio and Mirjana Radovi-Markovi profile women entrepreneurs and consider their motivations, together with the obstacles and challenges that they face and often overcome. A focus on emerging forms of entrepreneurship leads to a concentration on what is happening in newly developing economies, with a major case study set in a South American context. The authors deal in particular with how rural entrepreneurship, virtual entrepreneurship, and project-based and home-based businesses particularly lend themselves to providing opportunities for women. The authors' findings reveal that increased participation of women in business leadership has brought about completely new ways of business communication; new business strategies and company development models; and is imposing a new behavioural style on businesses. What is particularly encouraging is the evidence that female kinds of durability, persistence and intuition are producing business advantage. This means that the authors can clearly identify success factors and propose guidelines for the benefit of female entrepreneurs, female-led businesses, and business in general. This book will serve the needs of an academic audience of researchers in the growing field of studies into entrepreneurship; as well as those teaching or studying business or women's studies topics. It will of course appeal particularly to women owning and running businesses, or aspiring to do so.

PART I
Female Entrepreneurship

Introduction

In the first part of the book we explore the characteristics, motives and profiles of women entrepreneurs. To begin with, we analyse the theoretical background of entrepreneurship examining a series of studies focused on the definition of entrepreneurship and current literature on women entrepreneurs and their enterprises. This is complemented with a case study to obtain information and knowledge on women entrepreneurs; identifying the factors that motivate women. As a result we have developed a conceptual framework to explain various factors that have stimulated women to choose entrepreneurial activities, which amount to a complex system of circumstances and motives.

The case study focuses on women entrepreneurs from a Latin American country. We decided to focus on an emerging country in Latin America as its political and economic context is similar to other emerging countries. Furthermore, women entrepreneurs face similar challenges regardless of the country they live in.

To complete this first part we explore and discuss different issues derived from female entrepreneurship. We analyse the new role of women as entrepreneurs and the obstacles they face as they have to balance work and family and deal with gender inequalities. We also examine the special topic of women in the labour market.

1
Female Entrepreneurship: Theoretical Background

Introduction

Entrepreneurship is an emerging research area among academics because it is acknowledged that fostering entrepreneurial activity is associated with greater economic growth (Weeks and Seiler, 2001). Specifically, the interest in understanding women’s entrepreneurial activity is a result of the importance they are gaining in the entrepreneurial sector as well as evidence that women encounter difficulties in starting and operating a business that are different from those faced by men (Neider, 1987).

The initial research on women entrepreneurs was focused on understanding their background and the organizational characteristics of their enterprises. The most recent studies take into consideration more extensive research studies on the problems they face, their administrative practices, the perceptions of women as entrepreneurs, their skills for success, gender differences, conflicts between their roles in their enterprises and their families, and the vision they have for their enterprises. Methodologically, most research studies were based on surveys and case studies. They are mainly descriptive and use convenience samples as there are no databases of women entrepreneurs. In addition, research is frequently not associated with any base theory. However, such studies have made it possible to obtain knowledge, with which theories on women’s entrepreneurial activity are developing.

This chapter presents the current literature on women entrepreneurs and their enterprises. The subject has been organized into general and specific aspects. Initially, the literature on entrepreneurship in general, the growth of women’s entrepreneurial activity and the main results of the international research studies are presented.

The term entrepreneurship is defined as: “The state of being an entrepreneur or the activities associated with being an entrepreneur” (HarperCollins, 2003). There is not an agreement on the translation of the term entrepreneurship to Spanish. Some studies use espíritu empresarial (HarperCollins, 2005), empresarialidad (Argentina) or emprendedorismo (Brazil and papers elaborated by the Inter-American Development Bank) (United States Agency of International Development (USAID), 2005).

The study of entrepreneurship has become one of the fastest growing fields of research in recent decades as a result of the recognition that it will increase local capabilities to bring economic growth and help to develop the market economy (Weeks and Seiler, 2001). There is evidence that promoting entrepreneurial activity, and in particular women’s entrepreneurial activity, is related to economic growth. According to the National Foundation of Women Business Owners (quoted by Weeks and Seiler, 2001, p. 5), there is a positive and important correlation between participation by women who are employers or self-employed and the growth of the Gross Domestic Product (GDP). According to Weeks and Seiler (2001), data from previous research may be imperfect, but:

Analysis of the relationship between women’s economic activity in general, their managerial status and entrepreneurial activity and national economic growth throughout Latin America and the Caribbean shows that support for entrepreneurial development efforts could have a significant impact on economic growth and prosperity in the region. (p. i)

According to Global Entrepreneurship Monitor: 2004 Report on Women and Entrepreneurship by Minniti et al. (2005), entrepreneurial activity plays a very important role in the creation of an active and dynamic economy, especially entrepreneurial activity by women, whose role is analysed in this study both in developed and developing economies. For both men and women, opportunity is the main motive to start enterprises; however, many women start their own enterprises as a result of a lack of opportunities in the workplace. In low-income countries, women who get involved in entrepreneurial activities are usually between 25 and 34 years old, while in high-income countries, they tend to be between 35 and 44 years old. The findings of the study concluded that the creation of governmental policies to support education, financial aid, networking and enterprise counselling permits women to be increasingly involved in the development of new enterprises.

What is an Entrepreneur?

The term entrepreneur is difficult to define as there is no accepted definition in either academic or in common language.

Entrepreneurship has been studied by several disciplines, including sociology, psychology and economics; resulting in different definitions in each. Some studies consider entrepreneurs to be: (a) only people who establish new enterprises (Bennett and Dann, 2000; Hisrich and Brush, 1986; Inman, 2000; Schwartz, 1976; Smith-Hunter, 2003), while others refer to enterprise owners without taking into account how they obtained ownership of them (Aidis, 2002; Izyumov and Razumnova, 2000); (b) only people who are employers (Hisrich and Fulop, 1994; Inman, 2000; Smith-Hunter, 2003) or self-employed (Aidis, 2002; Izyumov and Razumnova, 2000; Voeten, 2002a); (c) people who not only own, but also manage their enterprises (Aidis, 2002; Inman, 2000; Lee-Gosselin and Grisé, 1990), or who own but do not manage their business (Bennett and Dann, 2000); (d) only people who establish a business in order to obtain profits and growth (Bennett and Dann, 2000), excluding small business proprietors, who are defined as “… those who establish and administrate a business with the main objective of achieving personal goals; where the business is the main source of income and consumes most of their time and resources, and where the proprietor sees the business as an extension of their own personality and is related to their family needs” (Carland et al., 1984, p. 358).

Given the importance of the definition of entrepreneur, we will compile a variety of definitions used in previous studies in order to conceptualize different related aspects

DEFINITIONS OF ENTREPRENEUR

The term entrepreneur comes from the French verb entreprendre, which means “undertake”. The concept appeared for the first time in 1437 in the French Dictionnaire de la Langue Française and it was associated with the adventurers who travelled in search of opportunities or with men who undertook military expeditions (Landstrom, 1999).

At the basic level, an entrepreneur is defined as “someone who starts their own business, especially when this involves risks” (Cambridge University Press, 2008) and “a person who owns and runs a business – not necessarily a new, small, growing or successful business” (Oxford University Press, 1998). These definitions emphasize the entrepreneur as the proprietor of a business without making any distinction on the way such proprietorship was acquired, and not excluding self-employment from the concept of entrepreneur.

From an economic perspective, the entrepreneur is related with risk and defined as “a person who risks capital and other resources in the hope of substantial financial gain” (Oxford University Press, 1998). From a sociological perspective an entrepreneur is defined as an innovative individual: “… entrepreneurship, as defined, essentially, consists in doing things that are not generally done in ordinary course of business routine” (Schumpeter, 1934, p. 254).

DEFINITIONS USED IN RESEARCH

Schwartz (1976) defined an entrepreneur as “an innovative individual who creates and builds a business from nonexistence” (p. 47), which implies that an entrepreneur creates a new enterprise. Hisrich and Brush (1986) define an entrepreneur as a person who “creates something different and valuable, devoting the necessary time and effort, assuming financial, psychological and social risks, and receiving monetary remuneration and personal satisfaction” (p. 4). Aidis (2002) believes that the concept of entrepreneur is connected with innovative behaviour, a situation that may not be present in enterprises at a moment in time and that is difficult to prove. The term business proprietor was preferred in Aidis’s study, that is, individuals who have their own businesses and are actively involved in its operation. This definition does not take into account how proprietorship was obtained or distinguish between employer and self-employed (self-employment considers the owner as the only worker).

Lee-Gosselin and Grisé (1990) studied women entrepreneurs in Canada and operationalized the term women entrepreneur according to the following criteria: women who own at least 1 per cent of the enterprise’s property, are responsible for at least one managerial function (marketing, accounting, human resources or other) and work in the enterprise. Inman (2000) studied Afro-American women entrepreneurs in the United States and applied the following criteria: women should own more than 51 per cent of the business, have less than 500 employees, have founded the business (he excluded bought or inherited enterprises), administer their business, work full time in the enterprise and receive the majority of their income from the enterprise.

Bennett and Dann (2000) defined an entrepreneur as “a person who has established the enterprise as a new venture, where growth is intended, for the prime reasons of generating profit and achieving personal satisfaction” (p. 78). To operationalize this definition, the authors divided the term into three parts: create a new enterprise, guide it towards growth and motivation. According to Izyumov and Razumnova (2000), any business in Russia is an entrepreneurial adventure as a result of the lack of financial and legal infrastructure, and the associated personal risk. Therefore, these authors use without distinction the terms microenterprise, small business, self-employment and entrepreneur, given that in transitional economies such as Russia’s, the distinction between these terms is unclear.

An interesting approach is used in Vietnam as part of Phase 2 of the Training for Women in Micro and Small Enterprises project (Voeten, 2002a) in order to distinguish women entrepreneurs from those involved in commercial activities in order to survive. The document developed a set of criteria to classify women: if it is or not a women’s enterprise; if women were pushed or pulled into the enterprise; if women would leave the enterprise if they were offered a permanent job; whether the enterprise is formally established; whether they are willing to pay for training in administrative matters; whether they wish to expand their enterprises; whether they hire personnel; whether they take risks or reinvest in their enterprises; whether the enterprise’s and personal finances are separated; whether the business has some kind of accounting record. The study argues that, to be considered a entrepreneur, a woman should be pushed into the creation of the company, she should not leave her company if offered a permanent job elsewhere, her business should be formalized, she should be willing to pay for training in administrative activities, she should seek expansion of her businesses and hire labour, take risks and reinvest in her business, and the finances of the business must be separate from personal finances.

Smith-Hunter (2003) made the analysis according to the dimensions of the proprietor of a small business, and separated the concepts of entrepreneur, manager, self-employed and employee.

For Steinhoff and Burguess (1989, quoted in Smith-Hunter, 2003), an entrepreneur is a “person who organizes, runs and takes the risks involved in operating a business” (p. 14). For Stoner and Freeman (1992, quoted in Smith-Hunter, 2003) a manager is “someone who has formal authority to play a series of impersonal, informational and decision-making roles in a particular unit” (p. 13). An entrepreneur is associated with the creation of a new business, according to Smith-Hunter (2003), and they may or may not choose to manage it. If they chose not to manage it, the entrepreneur would only be an investor.

The self-employed are persons who work for themselves (“not working for an employer but finding work for oneself”) (Cambridge University Press, 2003). Under this concept, even when the proprietor of the business is regarded as self-employed, a self-employed individual is not necessarily the owner of a business. To be considered as the proprietor of a business, the business must be established as an enterprise, that is, an organization that pursues certain ends. Individuals who work for themselves and who have not constituted an enterprise are self-employed, but they are not proprietors of a business (Smith-Hunter, 2003).

The employee dimension is closely linked to the enterprise dimension. An employee is someone who for a salary or wage carries out domestic work or helps in a business (Real Academia Española, 2001). While the owners of some enterprises take their income from the profit of the business, others choose to assign themselves a salary for their job, also turning themselves into employees.

Taking these dimensions into account, Smith-Hunter (2003) considers that the proprietors of an enterprise run their business as administrators; they risk, invest and create businesses as entrepreneurs; they employ themselves, and they are also employees in their own business should they assign a salary for themselves. “This multi-dimensional view of the small business owner is extremely important because it allows a look at the complex nature of the various dimensions of the small business proprietor” (Smith-Hunter, 2003, p. 16).

Why Study Women Entrepreneurs?

Since the 1970s and 1980s, there has been a growing interest in studying women entrepreneurs, mainly in the United States and Canada, as a result of the high growth in the number of enterprises created by women and also because it was thought that women encounter difficulties in starting and operating businesses that are different from those faced by men (Neider, 1987).

Carter and Cannon (1992) criticized those who said that the results of studies on men entrepreneurs could be applied to the case of women entrepreneurs. Hisrich and Brush (1984) considered that most of the knowledge on entrepreneurial activity is ...

Table of contents

• Cover Page
• Half Title Page
• Dedication
• Title Page
• Copyright Page
• Table of Contents
• List of Figures and Tables
• Biography
• Foreword
• Preface
• Acknowledgements
• Part I Female Entrepreneurship
• Part II Special Topics on Entrepreneurship
• Index