Environmental uncertainty and entrepreneurial orientation in collectivist and individualist cultures: evidence from Brazil and Belgium

Abstract

A fundamental premise of the information processing approach in entrepreneurship theory is that the distribution and processing of information is key to opportunity identification. We propose that collectivist-individualist cultural values influence the efficacy of information processing leading to different levels of entrepreneurial orientation (EO). Specifically, we submit that collectivism enhances shared information processing and goal setting in a dynamic environment, while individualism facilitates creativity and divergent thinking that can help EO if sufficient informational input is available. To empirically verify our theory, we study the relationships using survey and archival data from a sample of 487 firms in six industries in Brazil and Belgium, two countries that contrast in collectivism-individualism. Consistent with our predictions, we find higher EO in the collectivist culture of Brazil under high environmental dynamism and low information availability, and this difference is increased by strategic planning.

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