The Factors Effecting The Fear Of Entrepreneurship

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The Factors Effecting The Fear Of Entrepreneurship

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Table of Contents

1.0 Introduction…………………………………………………………………………3

2.0 Literature review…………………………………………………………………….5

3.0 Methodology………………………………………………………………………..9

4.0Results of analysis…………………………………………………………………..10

5.0 Conclusion and Recommendations…………………………………………………17

6.0 References………………………………………………………………………….21

IntroductionThe effects of culture have always fascinated the business and entrepreneurial society. Cultural aspects of society have so much sway over the entrepreneurial success that models have come up as a way of understanding the effects of the seemingly benign aspect of human existence on such an important factor in economic development (Verbeke, Lehmann & Van Tulder, 2011). While the majority of research into these conditions reveals that differences in culture do not affect the entrepreneurial process and growth, their effects on the fear of the same from a different school of thought. The main perspectives from which we shall investigate the fear of entrepreneurship are culture and business environment.The fear of entrepreneurship depends mostly on success rather than performance. How fear affects, the prospective investor from an exciting body of research since the business community seems to understand little about the condition’s impact relative to the complexity of entrepreneurship. However, the recent efforts to understand more of such influences as a way of optimizing the process of economic development seems to be successful given the rate of success (Hisrich & Peters, 2002). This paper shall investigate the effects of culture and one’s environment on their fear of entrepreneurship and the process of enterprising for profit. The effects of these factors will be analyzed from both a hypothetical perspective and a topic-based one in order to come up with comprehensive conclusions on the matter.The fear of entrepreneurship is an innate concern that a venture’s stakeholder or shareholder bears regarding the ability of their investment. The fear mostly revolves around the venture’s capability for success and its ability to emerge as a success based on the initial plan and the performance process. The entrepreneur is concerned about the enterprise collapsing after he/he starts operations due to unforeseen circumstances or poor planning. An entrepreneurship is also concerned that other factors such inadequate facilitation and external influences could lead to the collapse of their venture, and, therefore, spends a considerable time agonizing over the possible influences that could affect the investment negatively.However, most of these individuals do not adequately consider the role and consequences of their culture to the venture. Due to the subjective nature of human beings, they fail to adequately factor in the effects of culture on business ventures choosing instead to concentrate on the external and apparent internal factors. However, a shrewd businessperson considers how something as personal as the culture will affect their performance due to the potential some cultural practices have on the busines (Carsrud & Brännback, 2007) s. Some communities observe some cultural practices that could have an adverse effect on the market thus generating fear during the process of starting and running the business.Another factor that has a direct impact on the fear of entrepreneurship is the investor’s environment. The business environment is one of the most influential factors that investors consider when planning on opening up shop. However, the mainstay of this paper is the entrepreneur’s fear hence the effects of the business environment on the same. However much research goes into the factors that influence the business environment and the chances of organizational success or failure, the bottom line is that not as much has gone into a better understanding of the effects of the same on the investor’s fear. The paper shall again seek to investigate this issue using an extensive literature review. After setting up the context for a comprehensive literature review, the paper will utilize appropriate research methodology in order to draw useful and comprehensive conclusion for our topic. Therefore, this paper shall seek to find merit in and investigate the hypothesis to the effect that an individual’s culture and environment are the primary factors that affect the fear of entrepreneurship.Literature reviewIn 1980, Hofstede forwarded some concepts regarding the cultural aspects of business organizations. The dimensional elements he came up with have continued not only to define the cultural aspects of business, but also the cultural conditions of entire countries in a business and enterprise sense (Freytag & Thurik, 2010). The dimensions include individualism-collectivism; power distance; uncertainty avoidance and masculinity –feminism has a direct effect on the choice of an individual or organization in establishing a business organization in an area.In the cultural terms and how they affect the fear of entrepreneurship, the power distance dimension is an important factor. The dimension refers to the degree of inequality among people with power in cultural terms (Fayolle, Kyrö & Liñán, 2015). In addition to the disparity, the dimension also has a special score that is interpreted in relations to the society’s distribution of power (Ulijn, Drillon & Lasch, 2007). When the score is high, the society suffers a great disparity in terms of the empowerment of people and the members of the society know their place in the community. Interestingly, this dimension has a direct influence on the society’s fear concerning entrepreneurship as those that find themselves in a disadvantaged position exhibit fear for entrepreneurial activity due to their low level of empowerment in the society.In terms of performance, the power distance scores also have some impact on the fear factor that affects entrepreneurship (Freytag & Thurik, 2010). Interestingly, the countries or regions that exhibit a high PD score indicate that there is a high degree of disparity between different members of the entrepreneurial community. Malaysia, for example, scores 104 in this dimension making it a good example of the different levels of empowerment in the business and entrepreneurial world, therefore scaring away potential investors (Kshetri, n.d.). On the other hand, countries like the US that have a comparatively low PD score exhibit a high degree of equality in the business and entrepreneurship industry making them quite attractive to the enterprising among society due to equilibrium of empowerment.The second dimension that Hofstede used to gauge the cultural and business environment of different regions and countries is the Individualism-Collectivism Index. The index is a measure of the degree of interaction between one member of society and the rest of the group (Hisrich & Peters, 2002). The measure of individualism and collectivism in a society has a direct bearing on a potential investors fear of entrepreneur because investment is an activity that heavily relies on the establishment and maintenance of a healthy relationship (Mitteness, 2009). In societies that exhibit a high degree of individualism as demonstrated by a high Individualism – Collectivism Index, the level of cooperation is low and investment opportunities get ignored due to the entrepreneur’s lack of confidence in the interpersonal ability of the community. On the other hand, countries such as Panama and some South American countries that score highly in this dimension could reduce fear of entrepreneurship in potential investors since the score indicates high levels of interaction and coordination in the society as part of the culture.The third dimension according to Hofstede was uncertainty avoidance. Uncertainty avoidance implies the fear that investors or business people have for the future whose certainty and events they cannot decipher or anticipate in ways that make sense from a strategic perspective. In making financial and strategic decision, business people and entrepreneurs need a good deal of certainty concerning the core factors that might affect their investment and avoid all situation of uncertainty as a culture (Fayolle, Kyrö & Liñán, 2015). Countries or regions that score highly in this dimension exhibit societies that avoid highly ambiguous situations as far as business and entrepreneurship is involved. Such countries are usually unstable in some sense that affects the general confidence of the business community so that they feel unsure. The inability to cultivate enough confidence in a business environment due to uncertainty is one of the causes of fear of investment and entrepreneurship thus making potential investors unable to make blind commitments (Wilton & Toh, 2012). Countries that score lowly in this dimension exhibit a high degree of confidence in the futuristic aspects of their business environments thus encouraging investment and reducing any fear of entrepreneurship the potential investor might harbor.The fourth dimension Hofstede proposed as a means of analyzing the business environment of a country or region from a cultural perspective was the masculinity-feminine index. The index indicates the degree to which the players in the business environment align themselves to traditional masculine or feminine cultural and social roles (Valdez & Richardson, 2013). The impact such an index or dimension would have the fear of entrepreneurship depends on the gender of the entrepreneur himself or herself. If the country or region scores highly in this dimension, the high index implies a highly masculine society and probably male business and entrepreneurial culture. One of the best examples of a country that scores highly in this index is Japan with a score of 95. The main effect this index would have on the feminine demographic with intentions of entrepreneurial activity is detrimental, as they would fear the effects of gender bias. Along the same line, male entrepreneurs would not consider the gender bias in their favor as a threat to entrepreneurial ambitions and would consider investment opportunities ceteris paribus. On the other hand, a country that score low on this index, such a Sweden with 5, implies a more feminine-influenced society with more gender equality in the business and entrepreneurship society (Llussa, n.d.). Therefore, female entrepreneurs would find this kind of business environment more conducive to investment since the cultural aspects favor them through an absence of one factor that cultivates the fear of entrepreneurship for them. One good example of this scenario is the 2012 report by the Global Entrepreneurship Monitor that stipulated the existence of 126 million female entrepreneurs in more than 65 countries (GEM, 2013).The level of independence the society attaches to the potential entrepreneur also influences the level of fear that these potential investors possess in terms of the desire to involve themselves in the business. In organizations that allow a healthy degree of individual freedom and independence, the members can pursue their dreams in the conducive environment. Some regions allow for such freedom that provides a healthy environment for these motivated individuals to conquer their fear of entrepreneurship and start a venture that eventually succeed. The Western countries such as those in the American continent and Eastern Europe allow their citizens a healthy degree of independence that encourages them to pursue their business motivations. On the other hand, those in parts of Asian, Africa, and South America do not enjoy as much freedom as their counterparts. Therefore, they are unable to conquer their fear of entrepreneurship.Concerning the effects of the environment on the fear of entrepreneurship, the primary factors to consider include the political environment, the economic one, and the technocratic environment as well. The political environment is a major factor to consider when investigating the phenomena of fear of entrepreneurship. Political upheavals and instability threaten the ability of businesses to succeed (Cuervo, 2005). Therefore, potential businesspersons and investors do not want to see their entrepreneurial resources go to places where success is not guaranteed due to political and bureaucratic problems. Therefore, political instability also affects the fear factor of entrepreneurship since the ability to business resources to bring back returns is compromised.The culture of materialism also affects the fear of entrepreneurship since the need for more materials, and goods or services affect the need for one to conquer their fear of entrepreneurship. The people usually desire more than the usual batch of goods supplied by the resources affordable on a standard salary and take on more in the form of investment (Cuervo, 2005). The fear of entrepreneurship forces one to take a logical step in the way of adding to their income streams.MethodologyWith the complexities of collecting and analyzing data to establish the effects of fear on the entrepreneurship facing us, the importance of using a proper method are critical for the sake of the hypothesis and its proof. The methodology we chose for that process was a use of surveys from both ends of the hypothesis. The first side consists of individuals with intentions of going into entrepreneurship while the second consists of successful entrepreneurs who have successfully set up ventures in different regions. Due to the disparity in the methodology’s sample size, the best method of collecting such data would be an online survey.The first groups of respondents, those with interests in gaining entry into the entrepreneurial world would answer a group of specially formulated questions in an online questionnaire. These questions would seek to a number of issues ranging from the existence of fear of entrepreneurship, its motivation, and the effects the respondents feels that fear has on their decision-making processes in terms of enterprise. The questions would have to be unbiased and user-friendly so that the process rid itself of any prejudice and obtained the highest degree of accuracy possible.The second group of respondents, those already in the entrepreneurship industry, would answer a set of individual questions. Their questions would be slightly different from those of the group that the other group responded in terms of the range of issues and objectives. As opposed to the other group, this group would be asked about the extent of impact that their culture and environment has affected their businesses and enterprises. In addition, they would also be asked what else affects their entrepreneurial spirit in order to pave the way for further research into the matter.The methodology has to consider some issues in the course of developing the research data for analysis. One of the most important issues in this stage is privacy. By ensuring the process is not revealing, the two groups, especially the second one consisting of successful entrepreneurs, would feel more encouraged and confident enough to participate in the personal questionnaire and survey process. One possible risk mitigation process that could be used to protect the integrity of the privacy is a lack of names in the questionnaires and surveys. In addition, the research material would be destroyed immediately the analysis was completed.Results of analysisThe entrepreneurial community prides itself as the modern epitome of development. Its transition between governments is seamless. The checks and balances protected by the constitution evoke envy and admiration from its contemporaries. Its longevity and tenacity even in the face of adversity swells hearts with joy and hope. Countless nations have mimicked their constitutions upon the U.S’s enterprise environment (Convention, 2012). A major pillar of the global economic environment is its protection of entrepreneurship in its entirety.One conclusive definition of an enterprise the conglomeration of skills, motivation, resources, and business ideas into a successful entity. Further, the support of democracy should demonstrate; equality in voting, effective participation, high levels of understanding, control of the agenda by the citizenry, and none- biased inclusivity (Pearcy). Many modern democracies have fallen to base temptations to betray the ideals and beliefs of their respective nations. The Athenian model of direct democracy, where all present democracies draw their powers premised upon equality. The equality principle received protection and insurance through a justice system. It aspired to free all from any imaginable form of an inequality by adjusting the pedestals occupied by the ruled and the rulers. It purported to do this by enabling the citizenry to vote on every issue. The U.S fitted the Athenian model to create a representative democracy. Within a representative democracy, all eligible citizens willingly vote to pass laws for them (Pearcy). The principal goal of this paper is to examine how the two-party system of representative democracy affects decision- making and legislation.Unique tenets, norms, and practices are the characteristics of entrepreneurship. For starters, entrepreneurship demands a genuine, open, and fair playground for competition (Fotopoulos, 2005). The perception of rigged or predetermined processes does not augur well with the government and the general populace. Secondly, free communication with the people and the press deserves guarantee without coercion, threats, or intimidation.Thirdly, the competitors have to exhibit pertinent differences in ideology and policy. Therefore, the business environment expects a perfect outcome since there exists complete information. The three intertwine to form a basis on which every representative entrepreneurial environment establishes its efficiency.Representative enterprises embrace commercial politics as the driver of Politico issues (Fotopoulos, 2005). Critical in the analysis of the effects of cultural aspects and their dominance in the future whose possibilities lie in the definition of the concepts. It insinuates that the commercial environment is more susceptible to the forces of culture as suggested by Hofstede’s research results and their impact on the fear of entrepreneurship (Kinicki & Williams, 2008). The most significant invented method for fair representation of these effects was his rank system. The use of different parties and countries precedes recent times and is a longstanding and widely used practice. These considerations fit the definition of a social group that pursues to take over the economic steering activities through entrepreneurship.An analysis of the data obtained in the methodology and data collection exercise corresponds to the situation on the ground. Interestingly, the fears of the first group in the exercise were founded on environmental issues they faced in their respective regions. These environmental conditions included some cultural aspects of their environments therefore proposing the emergence of a situation where the cultural aspects became part of the environment.The Republican Party and the Democratic Party are the dominant parties in the U.S political system. They divergently differ in values, beliefs, goals, and modus operandi. The Republican Party prides itself as the party of maximum economic freedom supplemented by the prosperity that freedom brings. The party postulates that prosperity is the obvious result of self-discipline, work, savings, and investments by dedicated and hardworking Americans. However, a disclaimer arises; that prosperity is not an end in itself. Rather, it is a means to self-reliance (Pearcy). It equips the masses with independence from the government. It offers them freedom of choice in religion and parenting concerns. Moreover, cumulated individual prosperity fuels the national government in asserting its global leadership through military strength.The Republican Party embraces a free enterprise system (Convention, 2012). The party abhors bailout and guarantees. They argue that such economic policies only succeed in enslaving the masses. They offer an alternative where free working people utilize their innate talents, combining them with virtues. The complimentary relationship between talent, hard work, ethical practices, and relentless pursuit is a sure way to individual prosperity and abundance. Finally, Republicans fully embrace the Great American Dream, with its inclusive economics: everyone has a chance to construct, invest, and prosper.Democrats differ with the Republicans on their beliefs, goals, aspirations, and methods of attaining them. Despite the homogenous desire for a prosperous America, the methods applied contrast significantly. Democrats embrace a spirit of unity. They preach with panache the oneness of every American (Convention, 2012). They believe that America becomes a greater nation through teamwork. The success of this country only sees daylight when everyone gets a fair and equal shot. The above- stated requests implementation. Democrats contemplate a society where everyone plays by the same rules. The Democrats perceive such efforts as the only plausible route towards a long lasting economy.Due to the above-stated differences, decision-making and legislation on pertinent issues sway towards the party in power. It is, however, subject to the numbers held in the legislative houses. Stance on economic issues, policies, and their implementation may differ as illustrated below and republicans believe that the surest way to achieve job creation is through economic growth. The best way to achieve this is through free market policies. The Republicans believe in a simplified tax system. Further, they seek the global competitiveness of American industries. Such systems would enhance growth of the US economic development as demonstrated by the 2015 US cenus bureau on investment. The report stated that the amount of exports were US $ 186.2B , an increase from the previous year’s April volumes (US CENSUS BUREAU, 2015). They desire to implement aggressive marketing policies for American products in the global market. Further, they seek to implement the tangible mega infrastructure. In recent times, the Republicans have criticized the Democrat- backed Obama administration. The cause of disagreement has been allegations of neglecting the crucial water supply systems.Democrats also embrace the clarion call for economic growth. However, their approach differs from their Republican counterparts. They seek to end tax loopholes for corporations. Moreover, they propose abolishing taxes to small businesses (Milkis, 2012). They find a clean energy economy. In addition, they recommend thorough efforts in rebuilding the infrastructure. A case in point is President’s Obama initiation of a massive investment in green infrastructure. The execution happens through the conduit of investing in solar panels. The cost of solar panels depreciation forecasted is 60%.An increment in the solar installations result. Jobs in the solar industry increase by 20%.Democrats and Republicans alike concur on the urgent need for a comprehensive immigration reform policy. The present age characteristic is a ballooning international trade. Many unscrupulous entities have been piggybacking on the United States’ technological and knowledge prowess.Republicans in their pursuit, propose strategic and stringent immigration rules. They suggest awarding of visas to holders of advanced degrees from other nations. Key among them includes mathematics, engineering, technology, and science. The end game in such move is retaining highly skilled and English speaking persons. They pose a great asset towards the actualization of the Great American dream. Republicans support wooing of innovators to make the United States their places of residence. The proposition cuts across a wide array of fields.However, they caution that the immigration system remains porous to malicious infiltrations. Threats of intellectual theft and espionage abound. Democrats’ policy calls for responsibility towards the issue. The government of the day should bear the full cost of protecting the country’s borders. Employers should also bear their equal burden. They should fairly transact with their laborers. Exploitation of workers in any way degrades the American workforce. Illegal residents of the U.S should take the requisite steps to solve their conundrum. They must assume full responsibilities, pay taxes, face the law, and learn English.Energy independence remains the single most important goal for any self- respecting country. Every country desires the ability to provide adequate energy for home consumption, industrial requirement and any other need that may arise(Poole, 2014) A vibrant energy sector majorly catalyzes economic growth. It is a job generator in energy intensive industries and their secondary markets.

The Republican Party remains alive to pertinent issues concerning energy provision. Examples set forth by our past entrepreneurial gurus e.g. Ford and The Wright Brothers demand the intensive use of energy in mass production. The party admits of vast resources endowed to this nation. To maximize output, they propose a free market system in the market. Subject to the law of demand and cushioned by individual preferences the best firms will prosper. Republicans advocate the full employment of the available energy resources (Convention, 2012). A revitalized energy has the potential to catapult the economy to unprecedented heights. The Republican Party encourages diversified energy sources to an extent that is economically viable.The Democrats piously acknowledge the importance of energy security. However, they are adamant that energy prospects remain implausible in hurried exploration venture. To that regard, Democrats advise the pursuit of developing all America’s natural resources. Oil, gas, wind- based energy, solar and bio-fuels promise of an energy sufficient America. Presently, domestic oil production is at an unparalleled high. Petroleum imports daily decrease by a substantial figure. Investment in solar, geothermal and wind energy also has peaked. Obama’s administration struck a deal with automakers to increase fuel efficiency. Reduced fuel consumption has been the positive result.Education in its entirety supersedes going to school. It entails the entire buffet of activities, through which families and communities impact younger generations. Education far exceeds the boundaries of knowledge and skills. It leaks to ethical, behavioral norms and traditions (Convention, 2012). Education remains a tightly contested social sphere. Many forces seek to remake America by remaking its education.The Republicans hold the school issue at heart. They rightly castigate the recurrent over expenditure towards education. They propose embracing excellent education systems. Such bear the characteristic of high levels of accountability. Republicans reject the rumors and innuendos of academic mediocrity (Convention, 2012). They purport to protect the state and local control of schools. Possible solutions to the education question, as put forth by the Republicans, include various aspects. Greater emphasis on financial and virtue literacy, high levels of academic standards, reinvigorated focus on the study of the Constitution, continuous assessments of the fundamentals, transparency and a fervent introduction to American history (Fotopoulos). Republican governors, to the best of their abilities, have pushed the above- stated agenda.Democrats endure the daily prayer of every parent, success, and happiness for their children lives (www.democrats.org). The happenstance of this demands concrete and sound education. In 2010, President Obama signed into law student loan reform enabling access to college education for millions of Americans. Further, the party advocates for innovativeness and creativity in the provision of education. The leeway has allowed several states to implement revolutionary training programs.The comparative assertions stated above arise due to a fundamental difference in ideology. Consequently, the variations have affected legislation and decision-making. Particularly so, since, no third party offers a voice of reason to rival the Democratic and Republican Parties.In present times, the situation demands attention. Efforts aimed at reducing pollution have been a success. The Republicans pertinently believe in a better environment. Conservation is an indigenous ideal of the Republican Party (Convention, 2012). Republicans hope to implement the scientific knowledge into energy conservation. Further, they advance the argument that environmental cleanliness through privatization of such ventures.The Democrats similarly acknowledge the pivotal role of a clean environment to a vibrant economy. They take a suave move against environmental degradation by protecting species on the brink of extension. In addition, the Obama administration has ventured in restoring ecosystems. By addressing such anomalies, the problem of environmental destruction collapses to its knees (Poole 2014).Conclusion and RecommendationsWhy are cultural and environmental factors relevant to the course of analyzing the fear of entrepreneurship? In the absence of all other factors, the process of enterprise development is unstable. An economic system aggregates interests in the supply and demand of resources necessary for the population. Apart from that, it approximates the masses to the government. The powers wielded by other economic parties may turn them into enemies of development. However, if used constructively, decision-making and legislation are positively impacted. The two- party dominance positively influences legislation.During elections, voters sway along the two- party dominance. Party candidate takes advantage of their party’s brand name for purposes of minimizing costs. Due to the overwhelming dominance of the two –parties, freedom of choice becomes redundant (Cakmak). Independent candidates are stifled and denied any chance. The electorate is risked averse to wasting of votes. The feeble efforts to integrate a third party have yielded minute success. Subsequently, voters are compelled to vote for parties, rather than individuals.The two- party dominance has established a rhythm and consistency in the U.S political terrain. For years, America has voted along a two party system. The system allows for the perfection of party ideas and values (Tsebelis). Despite their imperfection, political parties remain the most crucial tool for delegation. The two – party dominances implies that democracy is futile devoid of parties. The government of the day requires constant checks and balances. The most important role of any political party is to govern when in power and to check the government when in opposition (Mainwaring). The two- party dominance quietly addresses this. A case in point can be the fierce rebuttal to Obamacare. Republicans gallantly offered their alternative voices to the matter.Political parties are the de facto carriers of a nation’s moral and social soul. They set the agenda on the adoption or elimination of societal tenets, values, and norms. Questions such as same-sex marriage and abortion receive a sufficient address from the two parties (Cakmak). They help surmount collective handicaps through joint efforts and agenda.Over the years, political parties have evolved to become protectors of cronyism. The candidate selection process is porous. It depends upon name recognition and emotional symbolism. Thus, a gap arises for the power elite to push forth their puppets, sycophants, and wheeler-dealers (Mainwaring). Support by the power elite who control large estates catapults any contender to a nearly assured win. The result outcome becomes cahoots of issueless elected officials. It is beyond reasonable d

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