English (pdf)
Article in xml format
Article references
Automatic translation
Send this article by e-mail
Cited by SciELO 
Cited by Google 
Similars in
SciELO 
Similars in Google 
Permalink
INTRODUCTION
Entrepreneurship has over the years been recognised as fundamental in the economic growth and development of nations, incubation of new ventures, re- alignment of existing ones and the redistribution of established infrastructure (Urban, 2007; Edoho, 2015). In both developed and developing economies, Small and Medium Enterprises (SMEs) are highly significant and these SMEs have attracted the interest of both academics and policy makers (Schulte, 2010). In both developed and emerging economies, the Small and Medium enterprises (SME) sector has been given prominence and pole position in development agendas (Mutalemwa, 2015). They are also actively involved in supplying goods and services to large corporations (Mahmood and Hanafi, 2013). Promoting the development of SMEs especially in Africa is critical as a way of promoting growth in economies, creating jobs and thereby alleviate poverty (Smit & Watkins, 2012). Because SMEs contribute significantly to the overall economic performance, it is imperative for researchers to investigate antecedents of SMEs performance (Wiklund, Davidsson, Audretsch and Karlsson, 2011). Regarding the definition of an SME, there hasn’t been a consensus or a universally acceptable definition, largely because economies are different (Okah-Efogo & Timba, 2015; Stamatović and Zakić, 2010). However, the definition by Margaretha and Supartika (2016) of an SMEs as an independent business entity characterised by a small market share and operated by part owners or owners suftces. Over the years, the SMEs sector has faced ever-increasing competition that has been propelled by globalisation, trade liberalisation and technological and innovation advances (Smit & Watkins, 2012). Typically, the SMEs sector in Zimbabwe faces growth and development hindrances including lack of financing, poor management, heavy taxation, and lack of proper markets for their products and services (Bomani, Fields and Derera, 2015).
BACKGROUND TO THE STUDY
One of the questions in the study of entrepreneurship, that has endured over the decades is how and to what extent culture affects entrepreneurship (McClelland, 1961; Weber, 1948; Schumpeter, 1931). This question has, in recent years, been revisited and is currently getting attention from researchers (Hayton and Cacciotti, 2013; Krueger et al., 2013). Culture is a multidimensional phenomenon, generally referring to a combination of preferences, principles, and opinions whether partially or wholly learned, that distinguish between members of different groups (Doepke & Zilibotti, 2013). Hofstede (1991) defines culture as the communal psychological orientation distinguishing individuals in different societies or groupings. Some scholars refer to culture as shared principles and predictable behaviours commonly found within a geographical or national setting (Hayton and Cacciotti, 2013). An appreciation of culture is important in explaining and analysing societal, organisational and management phenomena because culture molds people’s perceptions and responses to strategic challenges (Schneider and De Meyer, 1991). Kirkman, Lowe and Gibson (2006). In addition, national cultures affect the demand and consumption of goods and services (Chui and Kwok, 2008). The different cultural dimensions govern individuals’ propensity to entrepreneurship (Doepke & Zilibotti, 2013). Hence, there is a possibility that national and regional differences in culture are key to determining the influence that diversity has in individual behaviours, and most importantly the decision to startup a business rather than being employed (Mueller & Thomas, 2000). The notion of culture primarily emerged from the investigation of traditional and national differences in the various disciplines of social sciences (Acar and Acar, 2012). Although culture is generally considered as a determinant of entrepreneurship, there is a general lack of consensus regarding the impact culture dimensions have on entrepreneurial performance in emerging economies (Stephan and Uhlaner, 2010). This study engages Hofstede’s theory’s four culture dimensions namely; uncertainty avoidance, individualism, masculinity, and power distance (Hofstede, 1985) to show their influence on entrepreneurial performance of SMEs in Zimbabwe. Although Hofstede’s models have received extensive use in the study of national cultures and entrepreneurship, there are limited studies that have sought to apply these models in examining the impact of culture dimensions on entrepreneurial performance. By overlooking historical and social variables like national culture in the study of entrepreneurial behaviour, the literature promotes an inadequate understanding of entrepreneurship (Chasserio, Pailot and Poroli, 2014). To fill the gap in existing literature, this study is aimed at exploring the effects these cultural dimensions have on entrepreneurial performance. Over and above the four generic dimensions of culture, this study adds the mediating role of the propensity to act and perceived feasibility in an effort to fill the gap in literature. An understanding of the national and societal differences in cultural dimensions promotes the understanding and operationalisation of entrepreneurship differences.
LITERATURE REVIEW
Theoretical Grounding
This study on the interaction between culture dimensions and entrepreneurial performance is grounded on two theories; Hofstede’s theory on cultural dimension and Shapero and Sokol theory of entrepreneurial events. The variables employed in the study have been developed primarily from these two theories.
Hofstede’s Theory
Hofstede’s theory on cultural dimensions has extensively been used and confirmed in the study of culture and management (Singh, Kumar and Baack, 2005). Hofstede (1980) posited that there exist four main dimensions that separate one culture from another worldwide. These dimensions are ‘uncertainty avoidance’, ‘individualism’, ‘power distance’ and ‘masculinity’ (Hofstede, 1980). Time orientation came as an addition to this original theory on culture dimensions (Hofstede & Bond, 1988). Although the theory has been met with some criticisms primarily regarding the methodology and context, it has remained an effective model in detecting and analysing cultural differences (Bochner, 1994). According to Beugelsdijk, Maseland, Onrust, van Hoorn and Slangen (2015) Hofstede’s cultural dimensions framework maintains relevance in that it provides a set of common culture dimensions applicable to all societies, thereby allowing cross-cultural evaluations. This study adopts the culture dimensions suggested in the two propositions by Hofstede.
Shapero and Sokol Model of Entrepreneurial Events
The model by Shapero and Sokol on entrepreneurial events, suggests that perceived feasibility, perceived desirability, and propensity motivate entrepreneurs to act in starting a new venture (Shapero and Sokol, 1982). The model implies that people’s beliefs about their personal capabilities in accomplishing an activity has either positive or a negative effect on their future entrepreneurial behavior (Jimenez- Moreno and Ussman, 2013). Conclusion from this model is that entrepreneurial events, which are a result of interrelated circumstances and social-cultural factors, have an influence on the individuals’ entrepreneurial behaviour (Elfving, Brännback, and Carsrud, 2009). Although several factors are expected to impact an individual’s behaviour and intention, empirical studies seem to support Shapero and Sokol’s model (Krueger, 1993). From this model, this study adopts perceived feasibility and propensity to act as significant in influencing entrepreneurial performance.
Externally-Oriented Culture Dimensions (ECD)
Power distance
The power-distance construct defines the degree to which the less influential individuals in an institution usually expect and accept the unequal distribution of power (Hofstede, 1997). Power distance relates to the degree to which members are comfortable in approaching or challenging their superiors. Hence firms that are characterised by a large power-distance culture centralise power, and its employees work on instructions they are mostly expected to comply (Tavakoli, Keenan and Cranjak-Karanovi, 2003). In such firms, the less influential employees assume and admit to the unequal distribution of power and are submissive and respectful to higher power authorities and maintain bigger social distance (Farh, Hackett and Liang, 2007; Shi and Hoyt, 2016). On the contrary, low power distant people find it easy to approach and contradict their superiors (Ford and Kotzé, 2005). These low power distance individuals are often democratic and are less likely to succumb to authority (Lam, Schaubroeck and Aryee, 2002). In addition, low power distance employees are often not controlled by the supervisor-subordinate relationship and are more enthusiastic to try alternative social support systems, are more open-minded and may perceive more value from their informal mentors (Qian, Han, Wang, Li and Wang, 2014).
Uncertainty-avoidance
According to Tavakoli, et al., (2003) uncertainty avoidance is defined as the degree to which society members feel that there are threats from both unknown and uncertain situations. Hofstede (1997) states that individuals in uncertainty avoiding cultures have the tendency to evade unclear circumstances and look for more clear and easy ways to interpret and predict situations. This implies that members of a strong uncertainty avoidance culture find comfort “even ineffective rules satisfying people’s emotional need for formal structure” Hofstede (1997:121). In the business context, these members tend to display more brand loyalty and are suspicious of any new products (Baker and Carson, 2011). They generally view newly introduced products or services as less satisfactory but those with low uncertainty avoidance propensities tend prefer such products or services (Ann Lee, Garbarino and Lerman, 2007). Schneider and DeMeyer (1991) believe that managerial personnel in high uncertainty avoidance cultures tend to be proactive in adapting to dynamism in the environment. This is in line with Geletkanycz and Hambrick (1997) who states that high uncertainty avoidance business executives are always looking for strategic solutions in response to changes in the business environment.
Internally-Oriented Culture Dimensions (ICD)
Masculinity
As expressed by Itulua-Abumere (2013) masculinity entails the behaviors, languages, and practices, exhibited in a specific culture and organisational setups that are ordinarily associated with males. Hofstede (1980) refers to this cultural dimension as the fondness by individuals in a social order for accomplishment, heroism, confidence, and quantifiable rewards for success, while its equal, femininity relates to the fondness for collaboration, humility, care for frail members, and higher quality of life (Hofstede1980). It is often characterised by physical robustness, control, and antagonism thereby reflecting a more violent but glamourised representations (Katz, 2003). The expectation is that males are tough and engrossed with materialistic success while females are more diftdent, affectionate, and passionate about quality life (Hofstede, 1997). Members of a society that are more masculine in culture tend to value material based recognition and confidence and will always respond in a way that foster their personal desires (Wang, Peng, Sia, Tong and Ku, 2016).
Individualism
Compared to the other dimensions by Hofstede the individualism dimension is regarded as the most important in explaining the differences among cultures. Beugelsdijk, Maseland, and van Hoorn (2015) posit that individualistic cultures emphasise self-suftciency and eccentricity and hence are highly unlikely to conform to group representations. Individualism explores the extent to which individuals in a society or organisations are willing to integrate themselves into groups (Hofstede, 1980). This cultural dimension focuses primarily on the individual person and level of interaction with other members of the society (Hofstede, 1991). Cultures that are more individualist tend to have several in-groups like families and clubs within bigger groups, and the behaviour of individuals is primarily aimed at meeting the objectives of the in-groups (Darwish and Huber, 2003). On the contrary, collectivism entails that members of a society generally value their involvement in group activities more than their individual activities and by so doing there is greater loyalty to the group and more desire to safeguard the interests of group members (Wang et al., 2016). While individualism and collectivism have often been defined as direct opposites, it is considered more accurate to look at them as terms that refer to self-concept from different paradigms (LeFebvre and Franke, 2013).
Entrepreneurial Events (EE)
Perceived Feasibility
In the Shapero and Sokol (1982) model, perceived feasibility is defined as the degree of personal capability in starting business to success. Moghavvemi, Salleh and Abessi (2013) elaborate that the perceived feasibility variable centers around the discernment regarding an individual’s ability to undertake a specific task successfully. In entrepreneurship terms, perceived feasibility relates to the degree to which entrepreneurs consider themselves able to undertake an entrepreneurial activity (Ozaralli and Rivenburgh, 2016). Factors that influence perceived feasibility include availability of role models, financial capacity, social support, the level of education and general level of confidence in one’s ability to accomplish activities (Gasse and Tremblay, 2011). Although scholars have acknowledged the significance of factors like self-confidence in fostering perceived feasibility, self-eftcacy extensively has been identified a critical precursor to variable feasibility discernments (Krueger, Reilly and Carsrud, 2000). In line with the above, a study by Hallak, Brown and Lindsay (2012) also revealed that eftcacy is a significant predictor of entrepreneurial performance and that the higher the individual’s self-eftcacy the higher the performance.
Propensity to Act
Another important entrepreneurial event central to this study is propensity to act, which indicates a person’s tendency to act upon a decision (Shapero and Sokol, 1982). The model assumes a person’s readiness to act on his choices and in subsequent development of the model, this variable has been equated to risk taking propensity and ambiguity tolerance (Krueger, 1993; Shane, 2003). An entrepreneur’s propensity to act generally rests on his discernment of control and fondness to gain control (Krueger, Reilly and Carsrud, 2000). In the model on entrepreneurial events, propensity to act is hypothesised as a relatively constant typical behavior closely linked to the locus of control (Moghavvemi et al., 2013). In addition to the locus of control, ‘learned optimism’ is another critical conceptualisation to the propensity to act phenomenon (Krueger et al.,2000). The propensity to act variable exhibits the entrepreneur’s psychological element in entrepreneurial intentions (Yatribi, 2016).
Entrepreneurial Performance (EP)
Scholarly debate concerning the definition and measurement of entrepreneurial performance has, over the years, remained open (Leković and Marić, 2015). Performance in SMEs is relatively diftcult to measure because the parameters that are usually used to measure performance in large firms do not always apply to these SMEs, and measures of their performance are usually multi-dimensional (Chatterji, 2009; Simpson, Padmore and Newman, 2012). Fried and Tauer, (2015) argue that the diftculty in measurement has been worsened by the fact that no unanimous measure of entrepreneurial performance has surfaced. Hayton (2003) defines entrepreneurial performance in terms of the firm’s capability to innovate, manage risk, and exploit environmental opportunities. The term entrepreneurial performance refers to the financial or strategic growth of ventures and other organisations (Ng and Rieple, 2014). Growth, defined either by the net profit margins or the return on assets, has been used as a measure of entrepreneurial performance basing on the notion that it is an antecedent to long term competitive position and profitability (Markman, 2002; Fitzsimmons, Steffens and Douglas, 2005). Another recognised measure of entrepreneurial performance is profitability and it compliments growth in that no growth can be achieved without constant profits and retained earnings (Fitzsimmons et al., 2005). Entrepreneurial performance is measurable using a blend of financial and non-financial parameters that include sales growth, growth in profits, and market share growth among others (Chandrakumara, De Zoysa and Manawaduge, 2011; Alhyari, Alazab, Venkatraman and Alazab, 2013).
The notion of entrepreneurial performance has a reflection on the competence of the entrepreneur and can be useful to the entrepreneur for self-evaluation as entrepreneurs perceive their personal behavior as manifested in the venture and monitor their own performance (Baron and Henry, 2010). In addition to the above, entrepreneurial performance is demonstrated through developing new products, identification of new market opportunities and sound investor relationships (DeNoble, Jung and Ehrlich, 1999). Entrepreneurial performance, as a driver of market performance, is the essential point for the existence and the capacity to endure as an entrepreneur (Zahra and Covin, 1995; Zhao, Frese and Giardini, 2010). It is generally professed as deeply reliant on the recognition of market opportunities, vision, ingenuity, optimism, and self-eftcacy in the face of failures and hurdles (Bird and Baron, 2005). Entrepreneurial performance is measurable in two ways; subjectively and objectively. On one hand, objective performance is measured using quantitative data while on the other hand subjective performance is measured in using qualitative data obtained thorough soliciting for opinions and perceptions about performance (Sebikari, 2014). This study adopts a subjective approach to entrepreneurial performance measurement because although the method may provide a biased assessment performance (Sapienza, Smith & Gannon, 1988) gathering objective data may be diftcult mainly because owners and managers are largely reluctant to issue out company financial data to outsiders. Subjective responses were to both financial and non-financial questions, and were also used in order to echo the multi- dimensionality of the entrepreneurial performance variable.
Conceptual Model and Hypothesis Development
The cultural dimensions and preferences prevalent in a society has an impact on the members’ entrepreneurship proclivity (Doepke & Zilibotti, 2013). In addition, culture and its dimensions are cause for members of a society to behave in a different manner than from other cultures; hence different cultures have different product, brand preferences (Mueller and Thomas, 2001; Keller Parameswaran and Jacob, 2011). These arguments were extended by Hayton, George and Zahra (2002) who argued that individual and organisational culture impacts on entrepreneurial decisions and the intensity of entrepreneurial activity. With regards to managerial attitudes and behaviours, Geletkanycz (1997) argued the different opinions and expectations entrenched in a culture influence the way members of an organisation undertake their duties. Hofstede’s model on cultural dimensions which provides a reliable enumeration of the variances in culture between societies is essential in studying the influence of culture on the performance of entrepreneurial ventures (Hayton and Cacciotti, 2013). The relationship between culture and entrepreneurial performance implied in the arguments above lead to the proposition of the following hypothesis.
H1 There is a positive and significant relationship between externally-oriented culture dimensions and entrepreneurial performance.
H2 There is a positive and significant relationship between externally-oriented culture dimensions and entrepreneurial events.
H3 There is a positive and significant relationship between internally-oriented culture dimensions and entrepreneurial events.
H4 There is a positive and significant relationship between internally-oriented culture dimensions and entrepreneurial performance.
H5 There is a positive and significant relationship between entrepreneurial events and entrepreneurial performance.
The following model was conceptualised to illustrate the direct and indirect causal relationships between culture dimensions and entrepreneurial performance.
RESEARCH OBJECTIVES
Main Objective
The main objective of this study was to investigate the influence of culture on entrepreneurial performance
Secondary Objectives
To achieve the primary objectives of this study, the following secondary objectives were formulated
To determine the relationship between externally-oriented culture dimensions and entrepreneurial performance.
To investigate the relationship between externally-oriented culture dimensions and entrepreneurial events.
To ascertain the relationship between internally-oriented culture dimensions and entrepreneurial events.
To determine relationship between internally-oriented culture dimensions and entrepreneurial performance.
To establish the relationship between entrepreneurial events and entrepreneurial performance.
RESEARCH METHODOLOGY
To validate the hypothetical model empirically, a survey method was used on a sample obtained from the intersection of the Ministry of Small and Medium Enterprises and Cooperatives Development and the Small and Medium Enterprises Association of Zimbabwe databases. The population amounted to 987 firms and the sample firms were randomly drawn from the databases intersection with the aim of ensuring a broad size and age range coverage. The complete sample consisted of 250 SMEs. A combination of the drop and collect technique as advocated for by Ibeh, Brock, & Zhou (2004) and e-mail, which asked to participate in an online survey. This approach resulted in an 84.4% response rate equivalent to 211 responses. Owners and managers were the key informants in this study because they have a reliable view of the firm, hence can provide reliable information (Zahra and Covin 1993). The study employed a five point Likert ranging from strongly agree to strongly disagree. To measure entrepreneurial performance, this study used the operationalisation by Kropp, Lindsay and Shoham (2006), validated by Hallak, Brown and Lindsay (2012). Entrepreneurial events were operationalized by an adaptation of Krueger and Brazeal (1994) and Leppänen, Biermann, Sundberg and Tomson (2016) while cultural dimension measures were developed from Beugelsdijk, Maseland and Van Hoorn (2015). Structural equation modelling (SEM) was employed to analyse the data. This method was chosen because it provides a vigorous methodological technique to test the causal relationships (Kline, 2004). According to Byrne (2013) SEM has many advantages compared to other multivariate procedures, the main one being that it adopts a confirmatory as opposed to exploratory approach in analysing data, hence appropriate for inferential data analysis. The IBM SPSS AMOS 23 data analysis software package was used in data analysis.
DISCUSSION OF RESULTS
Model fit, Validity and Reliability of Measures
In SEM, model fit indices seek to determine the overall acceptability of the model and the common fit indexes are the comparative fit index (CFI), and the Root Mean Square Error of Approximation (RMSEA). The results from this model show that RMSEA = 0.039, CFI = 0.995 hence the model is fit because the CFI values are greater 0.90, and RMSEA is less than 0.08 (Hu and Bentler, 1999). To assess the reliability of the scale, the composite reliability (CR) index and the average variance extracted (AVE) were used. According to Fornell & Larcker (1981) the recommended minimum values for CR and AVE indicators are 0.7 and 0.5 respectively. The results show that both indicators were above the recommended values, with CR ranging from 0.93 to 0.96 and AVE ranging from 0.646 to 0.829, aftrming the reliability of the scale. Validity was measured by the square root of AVE and comparing the results with the inter construct correlations. The scale validity was obtained as diagonal square roots of AVE were larger than off-diagonal correlations.
Table 1 Results on descriptive statistics, ave, composite reliability, and correlations among major constructs
| CONSTRUCT | MEAN | AVE | CR | ECD | ICD | EE | EP |
| ECD | 4.14 | 0.721 | 0.94 | 0.849* | |||
| icd | 3.89 | 0.646 | 0.93 | 0.613 | 0.804* | ||
| ee | 3.78 | 0.802 | 0.95 | 0.634 | 0.567 | 0.896* | |
| ep | 4.00 | 0.829 | 0.96 | 0.722 | 0.632 | 0.732 | 0.910* |
Note: χ2 (df) =779.939 (211); RMSEA 0.039, CFI = 0.995; ***p<0.001.
*The bold elements are the square root of AVE. The off-diagonal elements are the correlations among the constructs. For discriminant validity, diagonal elements should be larger than off-diagonal; all the correla- tions are significant at the p < 0.01 level
Results of Structural Equation Model Analysis
Table 2 below shows the results of the structural equation modelling. Generally, the results from the structural equation model support the hypothesised relationships. Cultural dimensions influence entrepreneurial performance, even when mediated by entrepreneurial events in SMEs. In line with the proposition made in H1 and H2, there is a positive and significant relationship between externally-oriented culture dimensions and entrepreneurial performance and entrepreneurial events respectively. H3 and H4 are also supported in that there is a positive and significant relationship between internally-oriented culture dimensions and entrepreneurial events and entrepreneurial performance. The final hypothesis H5 is consistent with the results obtained in that there is a positive and significant relationship between externally-oriented culture dimensions and entrepreneurial performance.
CONCLUSIONS
The results from the study aftrmed that cultural dimensions have a positive influence on entrepreneurial performance in Zimbabwean SMEs. These findings support previous studies carried out by Urban and Ratsimanetrimanana (2015) in Madagascar, Doepke and Zilibotti (2013) in United States and Brettel, Chomik, and Christina (2015). Both externally-oriented and internally-oriented culture dimensions tend to positively affect financial and non-financial performance of the firm. It is imperative therefore that entrepreneurs, as members of a society, to value their cultural tendencies as they impact on their confidence and propensity to respond in a way that foster their firms’ development. An individual’s culture greatly affects their likelihood to undertake entrepreneurial activities. These findings are also useful to providers of entrepreneurial finance. In their determination of the bankability of an entrepreneurial activity, it is crucial that financiers evaluate an entrepreneur’s cultural dimensions as an added factor. The ability to sustain an entrepreneurial venture, as this study has revealed, is dependent partly upon an entrepreneur’s culture dimension. On the other head, it is important that policy makers appreciate the findings of this study. When formulating policies that are aimed at promoting the entrepreneurial performance of SMEs it is essential that policy makers take note of the variances in cultural dimensions between societies. For example, masculine communities tend to discard programs that have a biased towards women hence each policy must be culture sensitive. Given the scenario expressed in this study, business and government must attempt to develop circumstances that exhibit a greater focus on culture as an antecedent of both entrepreneurship and entrepreneurial performance and promote culture related values.
