Examining the Impact of Culture on Entrepreneurial Propensity: An Empirical Study of Prospective American and Egyptian Entrepreneurs

Abstract

INTRODUCTION Over the past decade, the academic and popular literatures have experienced a resurgence in entrepreneurship-related issues. Researchers have begun to critically address the processes surrounding venture creation, small business development, innovation, creativity, and intrapreneurship--entrepreneurship within large organizations. Of particular interest to practitioners has been the means through which entrepreneurship is cultivated and its historically uneven distribution throughout demographic segments of society. Specifically, questions as to why some college-educated business professionals choose entrepreneurial careers and others do not remain largely unanswered. With recent gains by women and minorities in entrepreneurial ranks and the recognition that a growing number of new American jobs created in the next decade will be self-generated, academics have begun to emphasize the critical nature of America's entrepreneurial climate. In a similar vein, many leaders in developing countries in regions such as Eastern Europe, the Middle East, and Africa have begun to emphasize the type of social climate conducive to new venture creation. However, one's proclivity for an entrepreneurial career is not only a function of the economic environment, but also of personal (Johnson, 1990) and cultural factors (Brodsky, 1993). In an effort to identify cultural and other factors that impact the likelihood of entrepreneurial career selection, the present study compares and contrasts prospective entrepreneurs (i.e., upper division undergraduates) in American and Egyptian universities. This study employs a scale to measure entrepreneurial propensity--a prospective entrepreneur's proclivity for choosing an entrepreneurial career--utilizing the EP scale developed by Parnell, Crandall, and Carden (1995). Parnell, et al. identified three factors associated with EP: (1) one's perceived level of entrepreneurial education, knowledge and competence concerning new venture operation, (2) one's beliefs concerning entrepreneurial opportunities in the economy, and, (3) one's confidence in one's ability to access the available opportunities. It is believed that each of these three factors is associated with cultural influences to some extent. Following an overview of the relevant literature, the Egyptian business environment will be outlined. Scale development issues and research methodology will be presented. Findings, implications, and directions for future research will follow. BACKGROUND The literature is replete with differing perspectives on entrepreneurship. Rumelt (1987) defined the term as the creation of new businesses with some element of novelty. Mintzberg (1973) viewed the entrepreneur as one who seeks to improve the organization through change initiation. Vesper (1983) provided the economists' perspective; an entrepreneur is one who coordinates resources to create profits. Entrepreneurship has also been viewed as the identification of market opportunities and the recombination and allocation of resources to pursue them (Kirzner, 1973; Schumpeter, 1934; see also Chamberlin, 1933). Indeed, much of the present entrepreneurship literature has rested on the assumption that the entrepreneur is a risk-taker (Balkin & Logan, 1988; Corman, Perles, & Yancini, 1988; Dunphy, 1990; Flamholtz, 1986; Johnson, 1990). The economic importance of entrepreneurship is well established in the literature (Ireland & Van Auken, 1987; Krueger & Brazeal, 1994; Stumpf, 1992). According to government labor statistics, approximately 20 percent of all new jobs in the U.S. economy were created by individuals who put themselves to work. The rate of increase for this segment of new jobs is presently twice that of overall job growth (Malone & Jenster, 1991). Much of this growth in new venture creature may be due to middle management layoffs and a frustration with career plateaus. …

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