Jia Liu, Frida Thomas Pacho and Wang Xuhui
The purpose of this paper is to empirically explore the impact of culture (using individualism, power distance and uncertainty avoidance) on entrepreneurial risk taking behavior…
Abstract
Purpose
The purpose of this paper is to empirically explore the impact of culture (using individualism, power distance and uncertainty avoidance) on entrepreneurial risk taking behavior which leads to the opportunity exploitation decision. Moreover, it also uses risk taking behavior of entrepreneurial as the mediation variable between culture and opportunity exploitations decisions.
Design/methodology/approach
The study took place in Tanzania, which is allocated in East Africa and is one of under researched countries. In total, 140 entrepreneurs who own venture of 5-99 employees were able to be interviewed using a survey questionnaire. In this study, structural equation modeling (SEM) was used to examine the direct and indirect relationship of culture in entrepreneurial opportunity exploitation decisions.
Findings
After hypothesis testing, the empirical results showed that Tanzania’s culture has an impact on entrepreneurial risk taking behavior, which influences entrepreneurial opportunity exploitation decision. It also showed culture through individualism and uncertainty avoidance measurements affect entrepreneurial opportunity exploitation decisions. The empirical results on power distance were insignificant.
Research limitations/implications
This study is a wake-up call to policy makers and formal institutions such as government authorities, education institutions and religion institutions. Thus, culture has an ability to influence the behavior of entrepreneurs and so the performance of ventures if it is consistent and well structured. Therefore it should be not taken for granted. Data for our study are based on only two cities and therefore the results should not be generalized as the whole country’s inference. Generalizability is questioned because the data are from only two cities in Tanzania and therefore future research should include more cities to be able to validate the generalizability.
Practical implications
This study is a wake-up call to policymakers and formal institutions such as government authorities, education institutions and religion institutions. Thus culture has an ability to influence the behavior of entrepreneurs and so the performance of ventures if it is consistent and well structured. Therefore it should be not taken for granted. Data for our study are based on only two cities and therefore the results should not be generalized as the whole country’s inference.
Social implications
In the country which has well-structured culture, influence the behavior of entrepreneurs to exploit opportunities.
Originality/value
This is the first empirical study to use SEM for exploring the culture of individualism, power distance and uncertainty avoidance impact on entrepreneurial opportunity exploitation in Tanzania.
Details
Keywords
Frida Thomas Pacho and Hellena Mushi
This study aims to examine the effect of the effectuation set of means on new venture performance in the context of Tanzania’s emerging economy. To determine how new ventures…
Abstract
Purpose
This study aims to examine the effect of the effectuation set of means on new venture performance in the context of Tanzania’s emerging economy. To determine how new ventures, benefit from the effectuation set of means experienced entrepreneurs possess, this study examines the role of the flexibility principle of effectuation as a key mediator.
Design/methodology/approach
The research is quantitative in nature, and a survey questionnaire was used to get data from five cities of Tanzania. In total, 350 samples obtained for analysis. The hierarchical regression and structural equation modeling were used for testing the hypotheses.
Findings
The effectuation set of means is affirmed to have a positive effect on new venture performance. The flexibility principle plays a partial mediating role in the relationship between the effectuation set of means and new venture performance.
Originality/value
This empirical evidence contributes to the progress of the theory of effectuation and also provides managerial guidelines for entrepreneurs who operate their new ventures and face uncertain business environments.