The approach in this chapter

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The theory developed here is a preliminary step towards an account of why and how different cultures might promote a high degree of alertness and why significant cultural diversity can be expected to persist even among advanced capitalist societies. More specifically, and in contrast to the cornerstone and convergence hypotheses, the approach in this chapter explains why we can expect a subset of group-oriented cultures to be highly entrepreneurial and why we do not expect all market-based economies to converge on a single dominant pattern of individualist values. '[T]here is no inexorable convergence of countries towards greater individualism in values with the march of time and progress' (Smith and Bond 1993: 216). The approach acknowledges the possibility of 'multiple adaptive peaks' in evolutionary processes (Gould and Lewontin 1994: 84) — that is, it recognises that cultures can develop along different evolutionary paths to that of Western civilisation and still survive and prosper. In the language of Freeman (2000), the approach emphasises 'diversified' rather than 'single-peaked' capitalism. The underlying premise is that divergent cultures that we observe in the world today would not have survived to this point if they were absolutely lacking in entrepreneurship and adaptability to changes in economic condi-tions.5 'Casual empiricism reveals a wide degree of cultural variety consistent with the survival of a group in the modern world' (Vaughn 1984: 126).

The observation that economic development and modernisation may assume significantly different cultural forms raises the question: could it be that a society's path towards economic prosperity depends at least in part on entrepreneurs discovering and exploiting those aspects of its culture(s) that constitute its comparative cultural advantages (given the institutional and situational context)? Following Lavoie and Chamlee-Wright (2000: 64—67), this chapter takes the view that each society has cultural characteristics particular to its own circumstances that might influence how entrepreneurship is manifested and how markets are coordinated and that might therefore promote different patterns of economic development.6 Each society can prosper economically by taking advantage of its own cultural traditions and heritage. Just as two countries with a comparative advantage in two different products can trade those products to their mutual benefit, so too can each country benefit from focusing on those entrepreneurial activities in which its culture gives it relative strengths (Berger 1988: 11). 'Comparative advantage is a story of diversity; of gains that come from differing from one's neighbor, not from aping him' (Freeman 2000: 5; emphasis added).

Accordingly, the approach adopted here suggests that we need to reject the notion that individualism or communalism (i.e. group orientation, collectivism) per se is either categorically pro- or anti-entrepreneurship. That is, we need to acknowledge that the cornerstone hypothesis can lead us badly astray. Individualist and group-oriented cultures neither inherently promote nor inhibit processes of entrepreneurial discovery. The distinctive individualism generated in the West is neither a necessary nor a sufficient condition for the emergence of entrepreneurial alertness. More generally, there is no universal, contextually independent scale by which one can assess and rank the dominant culture of an entire nation in terms of its 'entrepreneurial content' or 'growth-friendliness', as do Casson (1990) and Harrison (1992): 'It is unscientific to try to draw up a universal list of positive and negative cultural values for economic development. What may be positive in some circumstances can be quite counterproductive under other conditions' (Pye 2000: 255). Lavoie and Chamlee-Wright (2000: 62) refer pejoratively to such exercises in scoring national cultures according to their entrepreneurial content as 'checklist ethnography'.

This chapter focuses upon just one, though crucial, aspect of the complex phenomenon of culture — namely, different construals of selfhood — and how they affect the supply of entrepreneurial alertness. The analysis distinguishes between two notions, the independent and interdependent self, and it examines the key differences between them. The independent self represents how people in an individualist cultural group typically define themselves. The interdependent self is the corresponding conception for group-oriented cultures. This distinction is considered to be one of the most important and deeply rooted sources of cultural variation. Cultural self-conceptions are culturally evolved rules that are of a very general and basic nature. The specifics of any particular culture's comparative advantages will depend, at least partially, upon the conception of self that is most prevalent in that culture.

The impact of cultural self-conceptions on psychological determinants of alertness

An important mechanism by which cultural self-conceptions influence entrepreneurial alertness is through their effects on people's cognitive processes. More specifically, how personhood is construed in a particular culture affects the structure, content and possibly the intensity of people's agency beliefs. Chapter 3 argued that personal agency beliefs are cognitive factors that can switch on and direct alertness. It explained how these beliefs are an amalgam of perceptions of locus of control (LOC) and self-efficacy. That is, one's subjective perceptions of personal agency ('What is my causal power over events?') combine two sets of expectations: (i) LOC beliefs about whether actions influence outcomes ('Are target events contingent upon doing x?'); and (ii) self-efficacy beliefs about whether one can produce the relevant actions ('Can I do x?'). The main proposition of Chapter 3 was that the degree of alertness of people is an increasing function of the strength of their agency beliefs.

This chapter investigates how the effects on alertness of alternative cultural self-construals are mediated by people's perceptions of agency. As mediator variables, personal agency beliefs represent a causal, generative mechanism through which culture influences entrepreneurship. Thus, culture causes personal agency beliefs, which in turn cause alertness.

The chapter considers in detail how different cultural notions of person-hood might affect various aspects of people's agency beliefs, the main cognitive drivers of entrepreneurial alertness. Indeed, how we conceive our selves might affect how we conceive of the very notions of 'agency', 'control' and 'efficacy' in the first place. For instance, what does 'personal agency' mean to people within different cultures? Cultural differences in self-conceptions might lead individuals in one group or society to think of agency as primarily about changing the environment to fit the self's needs, while people in another group or society might view agency as mainly about changing themselves to fit their environment.

In addition, the chapter examines how independent and interdependent self-conceptions affect the meaning and sources of internal control within a culture. Do people perceive internal control as stemming solely and directly from the inner self, or do they perceive internal control as extending to indirect sources, such as other in-group members who are extensions of themselves and over whom they have some control? Do self-conceptions affect the culturally dominant perception of the degree of contingency between actions and intended outcomes (i.e. people's LOC expectations)?

Another issue is how differences in cultural self-conceptions affect the meaning of efficacy within cultures. Does efficacy inhere in individuals and/or social groups? How does variation in cultural notions of personhood affect people's perceptions of their competency to produce relevant actions? Are there cultural differences in situational influences on efficacy beliefs, and thereby on alertness?

The impact of cultural self-conceptions upon the unit and character of alertness

As explained later, the two notions of selfhood also influence how entrepreneurship is manifested and the nature of the opportunities that entrepreneurs discover. They determine in part the different channels through which entrepreneurship is likely to proceed in different societies. In particular, they determine the most prevalent unit or locus of alertness within a cultural group: 'The typical entrepreneur will reflect the specific cultural context out of which he or she emerges' (Lavoie and Chamlee-Wright 2000: 70). The notion of selfhood dominant in a culture determines the definition, structure, boundaries and character of the entity that does the perceiving and discovering of profit opportunities in that culture. In an individualist culture, the most common unit of alertness is the independent, autonomous person. In contrast, the primary centres of alertness in a group-oriented culture are interdependent members of an in-group. These two units of alertness are different units of analysis: they are different entities, they behave according to different rules, and their 'mental models' differ.

Cultural construals of the self give form and direction to people's alertness and entrepreneurial potential:

Entrepreneurship is not only a matter of opening one's eyes, of switching on one's attentiveness; it requires directing one's gaze. ... And this raises the question of what gives a predirectedness to the entrepreneur's vision, of why he is apt to read some things and not others. I submit that the answer to this question is culture.

(Lavoie 1991: 46; emphasis added)

Cultural differences in the degree of people's autonomy and social embed-dedness affect the character of alertness to opportunities. In individualist cultural groups, independent selves are alert to opportunities that are relevant to direct, personal gain. Their alertness is solely self-referential. In addition, alertness is commonly manifested in individual entrepreneurship. Independent selves have a tendency to be more alert to entrepreneurial opportunities for litigation, opportunities for the application of new commitment devices that reduce principal—agent problems, and opportunities requiring a nexus of formal, legal arrangements or contracts.

In communalist cultural groups, the alertness of interdependent selves is multi-layered and multi-dimensional. Their alertness has both role-referential and group-referential aspects. Interdependent selves each exhibit alertness to opportunities relevant to the successful fulfilment of their own roles in the group ('micro-alertness'). They may also exhibit alertness to profitable opportunities for collective action by the in-group as a whole ('macro-alertness'). The alertness of interdependent selves is manifested in collective or corporate entrepreneurship. Group-oriented entrepreneurs are likely to be more alert to opportunities for leveraging resources through informal networks and to be more vigilant of opportunities requiring consensus decision-making and teamwork. They are likely to be more alert to opportunities for non-legal conflict resolution.

Table 6.3 (pp. 157—160) summarises the impact of different self-conceptions on various aspects of entrepreneurship, such as the primary locus of alertness, the scope for entrepreneurship, the nature of opportunities discovered, the dominant situational influences on alertness and entrepreneurial discovery, the entrepreneur's prior local knowledge, innovative activity, modes of conflict resolution, the speed of entrepreneurial decision-making, and entrepreneurial contracting and its enforcement.


The focus of this chapter is upon independent selves (i.e. individualists) and interdependent selves (i.e. communalists) and the cultural groups within a society that exemplify these categories of personhood. Where possible, we must try to avoid relying - as do some versions of the cornerstone and convergence hypotheses - upon a grossly aggregated, homogeneous notion of national culture that is employed in crude comparisons that, for example, describe the USA as 'individualist' and Japan as 'communalist' or 'collectivism. One estimate is that there are around 10,000 cultures in the world, compared with 192 independent countries (Triandis 1995: 3-4). Thus, many nations comprise many cultures and subcultures. Nations are 'systems of interacting cultures' rather than unified cultures (Lavoie and Chamlee-Wright 2000: 59). On occasion, however, this chapter unavoidably resorts to the nation-state as the unit of analysis, especially when reporting on the findings of others.

At the outset it is important to note that within societies and nations there might be significant cultural variation. In addition, there are people who hold interdependent values residing in individualist cultures, and people who hold independent beliefs living in group-oriented cultures, though the proportions of each in both cultures vary. Moreover, any particular person, whether in an individualist or a group-oriented culture, is likely to be a mix of independent and interdependent aspects. 'Self-conceptions embody both personal and collective facets, although their relative emphasis will vary depending on the type of culture in which people are raised' (Bandura 1997: 32).7 For instance, Indian culture and the Indian sense of self display a juxtaposition of individualist and communalist orientations. In considering the Indian culture and psyche, Sinha and Tripathi (1994: 134) write that 'individualism and collectivism often coexist in individuals' behavior, and . the cultural system reflects both these elements as well'. In particular, they found that group-oriented values are prominent in family contexts (namely, extended family and kinship ties) but that Hindu religion and ethics emphasise realisation of the self through individual-based discipline, self-control and meditation (pp. 130-132). Similarly, Ho and Chiu (1994) found that the form of communalism in Hong Kong contains strands of individualism in its endorsement of self-reliance (but not self-interest narrowly defined).

Another caveat is that the approach adopted in this chapter does not stress reciprocal causation. It construes culture as an antecedent condition that has an impact upon the cognitive processes of human agency and alertness. Consequently, the analysis does not take account of important feedback mechanisms by which personal agency beliefs, entrepreneurial behaviour and economic development can affect culture. For example, it does not explain how cultural change can be brought about by the successful imitation of 'maverick' entrepreneurs who profitably breach well-established moral codes (such as prohibitions against trading with members of a foreign culture)

when those moral rules no longer help people to adapt to economic changes. Reciprocal causation is discussed more fully in Chapter 8.

A final note of caution relates to terminology. The terms 'group orientation', 'communalism' and 'collectivism' are used interchangeably. In many respects it would be preferable to refrain from using the term 'collectivism', with its connotations of dictatorial political systems and central economic planning, but the term is now so well established in the cross-cultural literature (especially in analyses of the 'individualism-collectivism dimension') that to avoid using it proves difficult. In any case, 'collectivism' in this context does not refer to 'forced', state-imposed collectivism. It does not mean a planned economic system in which a centralised hierarchical body attempts to determine crucial economic processes and in which the state owns all the means of production and distribution.

Similarly, group orientation or collectivism should not be conflated with a high degree of hierarchy in human relations. Although collectivism is empirically correlated with power distance, collectivism as a construct does not necessarily involve hierarchical organisation, with its emphasis upon vertical (e.g. top-down) relationships and authority, an acceptance of asymmetry in social status and of the privileges of high rank. For instance, there are variants of communalism, such as Israeli kibbutzim, that are 'horizontal' in that they emphasise oneness with in-group members, discomfort with 'standing out', similarity of status, and unease with dominating other members of the in-group (Triandis 1995: 44-46).

Furthermore, individualist cultures are not necessarily horizontal in all domains. Within the class of individualist groups, some groups may exhibit relatively vertical relations in some situations, such as commerce, when compared with the typical individualist culture. However, it should be noted that even 'vertical' individualist cultures might be relatively horizontal when compared with most (but not necessarily all) group-oriented cultures.

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