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THE IMPACT OF CULTURAL FACTORS ON ENTREPRENEURIAL PERFORMANCE IN SMALL AND MEDIUM SCALE BUSINESSES

CHAPTER ONE

INTRODUCTION

Background of the Study

Entrepreneurship practices exist in most countries of the world, including Nigeria. In Nigeria the development of entrepreneurship has gone a long way to achieve industrialization and economic development. Management scholars agree that although management theory and practices have universal applications, the individual and groups with which it must interact, and the external environment differs in some way. It is acknowledged by management scholars also that there are many deviations in management theory all over the world. The attempt to discover the determinants of managerial success of entrepreneurs has always been a heart-throb among researchers of various fields of studies. Biographies of successful entrepreneurs and business men for instance reflected the tendency of the subject of such studies to explain their success in terms of virtue of hand work, thrift and clean living (Baridam 1995:15). As an alternative to biographical models are these studies that, turn the man who manipulates the omnipotent touch (Gases 1983: 20). Culture is dynamic in nature but cannot be change mechanically rather could be modified to suit a given environment. Almost every perception and behavior is guided by the human invention we call culture. Each culture shapes perception and behaviors by paving relative attention to some details of reality and ignoring others or by permitting some actions and forbidding others.

Culture which forms parts of the complex education-sociological-cultural-political-legal-economic that interact and affect that performance of productive entrepreneurs is often the less treated and less emphasized amongst these foregoing factors by business people (terpstra et al 1991: 40); this notwithstanding the fact that it forms the bedrock on which the other factors operate. Speculations dealing with the supposed effects of cultural factors of an environment on the performance of productive enterprises in that environment are on the rife. However, empirical studies and a careful analysis of this situation in the context of entrepreneurship operating in developing countries remains to be exhaustively and satisfactorily treated. Though it can clearly be said that cultural factors have a substantial impact on managerial or entrepreneurial effectiveness and productivity measured in a given instance owing to the fact that sociological and cultural constraints are difficult to measure in quality. This is always a problem when one wishes to deal with human attitudes and values, it is often hard to distinguish popular misconceptions and myths from the realities of the situation (farmer et al 1965: 60) so, it therefore becomes patient to test a number of significant and operational hypotheses in order to explain and predict production efficiency with a high degree of accuracy and confidence in any given case.

The issue of culture as it affects the performance of cultural factors affecting the performances of entrepreneurs should take into consideration firstly, the salient cultural constrain that impinge upon the operations of entrepreneurs or enterprises in the understudied and secondly, it should be established how these salient cultural constraints meet in one way or the other in the performance of firms. In addition socio-cultural variables also have impact on planning and control as well as the various production functions of these firms’ enterprises. Such as; research development, production, marketing and finance. This study, will attempt to identify the various cultural factors that affect entrepreneurial operations in the understudied environment and also determine how these cultural factors affect the performance of entrepreneurs in the said environment.

Statement of the Problem

The fact that entrepreneurs contribute to the development of less developed countries is irrefutable (freeman 1981: 50). The issue that a nation culture and primary socializations produce several constraint which impinge upon the operation of productive entrepreneurs operating in developing countries like Nigeria ought to carryout in depth analysis on the socio-cultural factors inherent in the environment before they proceed with that venture. The firm once it’s established is constrained by various factors inherent in the environment. Although all constraint areas (educational, socio-culture, political, legal, economic etc.) are common major difficulty that lie in the social-cultural sector (farmeret al 1967: 70).

This case is very true, since the aspect of dealing with people oriented with strange custom and values usually present a problem. The above issue is reflective of the Nigeria situation, experts have posited that cultural constraint are the bottom line when considering the issue of in efficiency and poor performance of enterprises in Nigeria. This may not completely be true because whenever one is dealing with human attitudes and values, it is often hard to distinguish popular misconception from the realities of the situation. There arises therefore, a need to determine (empirically) whether the cultural constraint in Port Harcourt is significant enough to affect the performance of entrepreneurs operating therein.

Purpose of Study

The general objectives of this study is to identify the impact of cultural factors on entrepreneurs performance. However, the specific objective of the study includes;

To identify various cultural factors that imitate against the performance

of entrepreneurs and to what extent they affect them.

To identify the present effect of cultural factors on entrepreneurial performance.

To examine entrepreneurs reactions towards cultural changes and their coping strategies.

To examine other non-cultural factors and the extent to which they affect entrepreneurs.

Research Questions

The following research questions with the study;

To what extent does Norms relate with entrepreneurs performance of some selected private firms in Port Harcourt?

To what extent does belief system relate withentrepreneurs performance of some selected private firms in Port Harcourt?

To what extent does attitude relate with entrepreneurs performance of some selected private firms in Port Harcourt.

Research Hypothesis

The following research hypothesis will guide the study;

Ho1: There is no significant relationship between Norms and the productivity of some selected private firms in Port Harcourt.

Ho2: There is no significant relationship between belief system and the productivity of some selected private firms in Port Harcourt.

Ho3: There is no significant relationship between attitude and the productivity of some selected private firms in Port Harcourt.

Significance of the Study

This research study will be of great importance to the entrepreneurs interactiveness with the market and its customers. It will also be useful to the entrepreneur’s internal decision marketing process and will also influence the decisions to create new business. This finding of the research will improve or add to existing world of knowledge and will also create awareness of the Norms, belief system and attitude of Nigerians to foreigners who desire to create business in Nigeria.

Scope of the Study

This study was conducted and limited to target population, geographical boundary study variable and units of analysis. From the above statement, the target population will focus on selected private firms in Port Harcourt. The geographical boundary is Port Harcourt, the study variable will be divided into two: the independent variable represented as culture (having dimensions as; Norms belief system and attitude) and the dependent variable represented as entrepreneurial performance (having measures as; productivity). The unit of analysis is at the organizational level.

Definition of Terms

According to Cosuala, 1985: 80), definition of terms is the most important facet of the research report, since without a common understanding of essential terms; the value of the research very be lost through misinterpretation. These level been defined however to back up this work.

Entrepreneurs: Schumpeter (1934), entrepreneur, are innovators who use a process of shattering the status quo of the existing products and service to set up a new product and services.

Entrepreneurship: according to Meredith et al (1991), entrepreneurship is the process of organizational and coordinating the factors of production and taking necessary decision to establish a business enterprise and keep it in with the pattern of demand and market values.

Business: business is regarded as the process of creating, procuring or providing goods and services to customers or those who need them in proper quantities and qualities at suitable times and places at satisfactory process Nwaeke (2002).

Culture: Hofsted (1991) defined culture as the software of the mind and collective phenomena, shared with people who live in the same social environment.

Values: as a board tendency to prefer certain states of affairs over others.

Business Environment: according to Jones et al (2002), they are those factors or forces that have potential effect on the way business operate.