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The inuence of an entrepreneurs socio-cultural characteristics on the entrepreneurial orientation of small rms
Levent Altinay
The Business School, Oxford Brookes University, Oxford, UK, and

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Catherine L. Wang
School of Management, Royal Holloway, University of London, Egham, UK
Abstract
Purpose This paper seeks to examine the relationship between Turkish ethnic entrepreneurs socio-cultural characteristics (namely education, experience and religion) and the entrepreneurial orientation of their rms. Design/methodology/approach The study collected data through 139 face-to-face structured interviews with Turkish ethnic entrepreneurs in London, UK. Findings The study illustrates that educational attainment of an entrepreneur makes a positive impact on a rms entrepreneurial orientation. Educational attainment equips business owners with the skills and reective mindsets of understanding customers and responding to their needs. Previous business experience of the entrepreneur also impacts positively upon a rms entrepreneurial orientation, while religion of the entrepreneur does not have a signicant impact on the rms entrepreneurial orientation. Research limitations/implications This paper reports ndings based on Turkish ethnic entrepreneurs in London. Therefore, care should be taken in making generalisations from the sample. Practical implications This paper identies those socio-cultural attributes that entrepreneurs can capitalise on in order to enhance the entrepreneurial orientation of their rms. Originality/value The paper lls in a glaring gap by providing empirical evidence about the relationship between socio-cultural characteristics of entrepreneurs and their small rms entrepreneurial orientation. Keywords Socio-cultural characteristics, Entrepreneurial orientation, Entrepreneurs, United Kingdom, Turkey, Ethnography Paper type Research paper

Introduction Entrepreneurial orientation (EO) is crucial in improving a rms competitive advantage and performance (Zahra, 1991; Zahra and Covin, 1995; Wiklund, 1999). An entrepreneurial rm engages in product innovation, undertakes somewhat risky ventures and acts proactively by being the rst to come up with new products,
The authors would like to acknowledge the support of the ESRC for the project Socio-cultural factors, ethnic minority entrepreneurial orientation and a rms growth: a comparative study of Turkish and Chinese small rms in the UK (Project Reference: RES-061-23-0051).

Journal of Small Business and Enterprise Development Vol. 18 No. 4, 2011 pp. 673-694 q Emerald Group Publishing Limited 1462-6004 DOI 10.1108/14626001111179749

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technologies and administrative techniques (Lumpkin and Dess, 1996; Miller, 1983). By searching for product/service-market prospects, entrepreneurial rms tend to concentrate on customer needs and competitors offerings, thereby becoming market oriented (Miles and Arnold, 1991; Morris and Paul, 1987). Internally, EO contributes to organisational transformation and strategic renewal through creation and combination of organisational resources and competences (Dess et al., 1999; Zahra et al., 1999). Scholars have also examined various contingency factors, such as the external environment (Covin and Slevin, 1989), that inuence the effect of EO on performance (Zahra and Covin, 1995). However, the question as to how characteristics internal to the rm inuence its EO remains under-researched, as rightly pointed out by Lumpkin and Dess (1996). Covin et al. (2006) renew the call for EO research to focus on attributes related to internal management that are conducive to EO of a rm. In particular, recognising the critical role that socio-cultural characteristics play in determining the entrepreneurial behaviour of a rm, several scholars have called for future research addressing the impact of an entrepreneurs culture on rm-level entrepreneurship (Hayton et al., 2002). In a small rm, EO is grounded in the values, intentions and actions of the individual who is in charge; the values of a small rm are simply an extension of the values of the individual entrepreneur, and therefore inuenced by the inherent characteristics of the entrepreneur (Carson and Gilmore, 2000; Lumpkin and Dess, 1996). However, in empirical terms, the relationships between the socio-cultural characteristics of an entrepreneur and rm-level entrepreneurship, still need to be investigated. This paper therefore aims to ll this gap by investigating the relationship between socio-cultural characteristics of Turkish ethnic entrepreneurs and their rms EO. Theoretical framework Culture is considered to have an inuence on managerial practices and serves as a mediator that can guide and shape behaviour (Smircich, 1983). What is considered appropriate behaviour at work will heavily depend on culture (Hofstede, 1980). Although there are many other levels of culture, values are held to be a critical feature of culture and cultural distinctiveness (Kluckhohn and Strodbeck, 1961; England, 1976; Hofstede, 1980). Values can be considered to be the core of culture and the basic motive behind human behaviour. As stated by Deresky (1997), many people in the world understand and relate to others only in terms of their own cultural values. Interpretation of things, establishment of priorities, the making of choices and reaching decisions are the issues which are given shape by values before the outcome of these is reected in behaviour (Rokeach, 1979). Among various socio-cultural characteristics, the prior experience, education and religion of entrepreneurs have been highlighted as key factors that inuence entrepreneurs cultural values and thus the level of entrepreneurship (Hayton et al., 2002; Morrison, 2000). For example, the manner in which the young people are educated from an early age and the transferable skills that people develop during their higher education play a signicant role in the initiation of characteristics generally associated with entrepreneurial behaviour (Casson, 1982; Gibb, 1996; Ronstadt, 1985). In addition, the entrepreneurs previous related work experience prior to opening a new venture is an important factor that inuences how the entrepreneur handles the start-up and the growth of the business (Hatch and Dyer, 2004). Previous experience in particular creates a cognitive framework that facilitates pattern recognition and

contributes to the management of risks associated with entrepreneurial behaviour. Religion also shapes values and thus how the entrepreneurs manage the entrepreneurial activities of their rms. Highly religious entrepreneurs will tend to use religious criteria to inform their decision making, even if it harms their short-term commercial interests (Dodd and Gotsis, 2007). To conclude, experience, education and religion indicate the degree to which people consider entrepreneurial behaviours (such as risk taking, innovativeness and proactiveness) to be desirable. Although previous studies inform our understanding of the inuence of socio-cultural characteristics on a rms entrepreneurial behaviour in general, none of these studies empirically examined the relationship between these socio-cultural characteristics and a rms EO. Therefore, three variables were included in the studys framework to understand their potential inuence on EO. EO has emerged as a multi-dimensional rm-level construct within the strategic management and entrepreneurship literatures. Originally proposed by Miller (1983) and later modied by Covin and Slevin (1991), EO describes certain rm-level characteristics and management-related preferences and beliefs with regards to an organisations overall business operations, its response to customers needs and product offerings and interactions with competitors (Covin et al., 2006). It consists of three main factors, namely innovativeness, proactiveness and risk taking (Lumpkin and Dess, 1996). Innovativeness is connected with seeking creative solutions to problems and needs (Covin and Slevin, 1989). It involves promoting and supporting novel ideas, experimentation and creative processes that may lead to new products. Proactiveness involves shaping the environment by introducing new products, technologies, administrative techniques rather than merely reacting to market change (Lumpkin and Dess, 1996). Risk taking involves the willingness to commit signicant resources to opportunities that have a reasonable chance of success as well as costly failure (Lumpkin and Dess, 1996; Miller and Friesen, 1983). As a strategic choice, these dimensions of EO are embedded in an organisations philosophy that drives decision-making and behaviour towards creating new goods, pursuing new methods of production and/or offering services and entering new markets (Stevenson and Jarillo, 1990). EO could therefore be an important indicator of the way in which an organisation is structured and its potential ability to outperform the competition. In both theoretical and empirical studies of entrepreneurship in small businesses, researchers highlight the signicance of socio-cultural attributes such as the religion, education, and experience of the entrepreneur in explaining rm growth (Basu and Altinay, 2002; Smallbone and Wyer, 2000; Storey, 1994; Wiklund and Shepherd, 2003). However, these studies did not consider the EO construct in explaining rm-level entrepreneurship. Specically, although it is recognised that the owners of the small businesses determine the strategic direction, few studies examined the relationship between their socio-cultural attributes and the EO of their rms. The following section of the paper discusses the relationships between the socio-cultural characteristics namely education, experience and religion and the EO of a rm. Socio-cultural characteristics and entrepreneurial orientation Education and EO The empirical evidence of the Global Entrepreneurship Monitor project shows that the relationship between education and entrepreneurial activities is not unclear (Bosma

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and Harding, 2007). However, in theory, prior knowledge is a crucial antecedent of different dimensions of EO including innovativeness (Carneiro, 2000; Dove, 1999; Nonaka and Takeuchi, 1995), proactiveness (Clercq and Arenius, 2006) and risk taking (Knight et al., 2003; Xia et al., 2001). More specically, acquisition and exploitation of knowledge, knowledge dissemination and responsiveness to knowledge have been identied as the components that have the most impact on a rms ability to innovate, act proactively and take risks (Day, 1994; Fahey and Prusak, 1998; Grant, 1996; Teece, 1998). Following this line of argument, the educational background of the entrepreneur plays an important role in this endeavour. In terms of expanding a business, recent research found a positive effect of individual educational level on the likelihood to perceive entrepreneurial opportunities (Clercq and Arenius, 2006). A higher level of education develops both the analytical ability and the computational skill of the entrepreneur as well as communication skills. Those who attain a higher level of education are better equipped to communicate with customers, gather market intelligence and develop proactive strategies which then lead to higher growth (Casson, 1982). Education could also enhance an individuals capacities for creativity, exibility, self-direction and the ability to respond to widely different situations and thus contribute to innovative behaviour within a rm (Rauch and Frese, 2000; Collinson and Quinn, 2002; Shook et al., 2003; Llewellyn and Wilson, 2003; Walton, 2003). Empirical studies also conrm these assertions (Peters, 2002; Walker, 1988). In his study of Greek owned businesses in Sydney, Walker (1988) found that the businesses underwent expansion when university educated sons joined the rms. Similarly, Peters (2002) discovered that the Greek Kailis brothers attributed their success as exporters of lobster and other seafood to their educational attainments. Their qualications equipped them with the skills and mindsets to remain exible and open to market forces and opportunities. Conrming these, Levent et al. (2003) and Bachkaniwala et al. (2001) identied lack of education as an ethnic-based obstacle to entrepreneurship and argued that those entrepreneurs who are keen on breaking out into the mainstream market will need to attain higher levels of education. In addition, there are studies that found a positive relationship between educational attainment and risk taking propensities of entrepreneurs and business owners (Knight et al., 2003; Schwer and Yucelt, 1984; Xia et al., 2001). According to these researchers, education leads to risk taking with condence because critical thinking and reasoning skills acquired through education helps these individuals improve their understanding of what they know and more accurately predict the outcomes of their decisions. Based on these arguments, we propose the following hypothesis: H1. The level of educational attainment of an owner is positively associated with the EO of a small rm. Previous experience and EO Previous experience can also assist owners in identifying new market opportunities (Perez and Pablos, 2003). In particular, such experience contributes towards building up the entrepreneurs knowledge base, developing access to market information and business networks, improving managerial capability and thus diversifying products and services (Basu and Goswami, 1999; Westhead et al., 2001). Acquired experience by management has been found to be crucial to overseas expansion by identifying trends and exploiting the opportunities (Mughan et al., 2004; Williams, 1991; Treadgold, 1992).

In addition, in circumstances where the context of the new business is similar to the one where the entrepreneur gained earlier, s/he might be able to capitalise on the previous relationships with customers and suppliers in their operations (Haber and Reichel, 2007). In addition, it is emphasised that individual experience is paramount in generating knowledge (Huber, 1996) and can itself engender and encourage innovativeness (Haynes, 2003). Previous business experience in particular gained through dealing with customers/suppliers and other stakeholders provides valuable feedback in the shaping and development of innovation strategies (Bakhru, 2004). Grant and Romanelli (2001) argue that the prior experience of the founder of a rm is the source of the knowledge assets critical for the creation of new routines and capabilities to innovate new products. Prior business experience equips managers with the skills and knowledge of combining, organising and exploiting resources for innovation (Alvarez and Busenitz, 2001). An entrepreneurs previous work experience in the eld prior to opening a new venture is also an important factor that inuences how the entrepreneur handles the start up and the growth of the business (Hatch and Dyer, 2004; Goedhuys and Sleuwaegan, 2000). Previous business experience often equips decision makers with a positive attitude towards business risks and entrepreneurship (Brockhaus, 1980; Goedhuys and Sleuwaegan, 2000; Jones-Evans, 1996). For example, in the case of international business, prior exposure to or involvement in an international environment removes some of the fears and uncertainties inherently associated with the uncertain international market (Ibeh and Young, 2001). Decision makers thus focus less on risks and more on the exploitation of opportunities. An added bonus of business experience is a much improved personal network that reduces the risk of engaging in entrepreneurial activities (Basu and Goswami, 1999; Ibeh, 2004). Given these arguments, we have set our hypothesis as: H2. The previous business experience of an owner is positively associated with a small rms EO. Religion and EO Religion shapes the society by giving meaning to a societys ethical structures, encouraging or discouraging certain behaviours (Dodd and Seaman, 1998). In Muslim countries, which are usually dened as high-context cultures, people tend to be fatalist meaning that they do not believe that they have much control over events that affect them (Raven and Welsh, 2004). They strongly believe in destiny and events being controlled by fate. In Muslim culture, fatalism is characterised by the phrase InshAllah2, which means If God wills it (Rice, 1999). This means that a Muslim will do his/her best but the external outcome may not be under his/her control. No research has been found in the literature that attempts to test it but the extant discussion could imply that we should expect a negative relationship between the Islamic religion of a business owner and a small rms EO. For example, there is a widespread belief that strongly religious countries are not receptive to innovation and proactiveness (Herbig and Dunphy, 1998; Slowikowski and Jarratt, 1997; Tansuhaj et al., 1991). This is explained by the high fatalism shaped by the religion of these cultures. In Muslim countries, fatalism is generally associated with less willingness to try new technical and non-technical products and with higher levels of perceived product risk (Tansuhaj

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et al., 1991; Slowikowski and Jarratt, 1997). Conrming this, Farid (2007) advocates that Islam religion encourages a conservative culture that leads to risk-averse attitude among Muslim business people. Added to these values, is the concept of hellal (which can be translated as accepted by the religion) might discourage retail and hospitality business owners to sell alcohol and pork which are considered to be haram (which can be translated as not accepted by the religion) (Basu and Altinay, 2002). Based on these arguments, the following hypothesis has been set: H3. The religious background (Muslim) of a business owner is negatively associated with a small rms EO. Research design Research sample This study investigated the relationship between the inherent socio-cultural characteristics of small business owners and their rms EO. The sample was randomly drawn from a database of 1,200 Turkish speaking ethnic entrepreneurs who own micro (minimum two, maximum nine employees) and small businesses (minimum ten, maximum 49 employees) in different boroughs of London. The database was constructed by the researchers through ethnic minority business directories and unpublished lists of names obtained from Turkish high commissions. The researchers also managed to identify other businessmen via ethnic newspapers including Kibris Gazette, Toplum Postasi and Olay Gazetesi and also from Turkish Cypriot Chamber of Commerce in London. Turkish Business Guides (Londra Gazete, 2003, 2004, 2005, 2006) were also used to locate boroughs with a high concentration of Turkish speaking businesses for the study. Data collection In total, 139 face-to-face structured interviews were conducted with Turkish ethnic entrepreneurs who were working in different sectors including retailing, services and manufacturing. Turkish entrepreneurs were chosen as the focus of the study because growing phenomenon of Turkish entrepreneurship remains insufciently studied (Altinay and Altinay, 2008). Most of the interviews were conducted in English and lasted about one hour, on the basis of a detailed structured interview schedule (Please See Figure 1, for a set of sample questions). Informants were asked closed ended questions on a wide range of issues related to their previous experience, education and religious background, and the entrepreneurial orientation of their rms. Close-ended questions were used to collect quantitative data. Socio-cultural attributes are operationalised as independent variables in terms of: religion; education; and experience, since they all shape values and beliefs (Hayton et al., 2002; Morrison, 2000). The rms behaviours related to the extent of risk-taking, in addition to being innovative and proactive, are regarded as indicators of EO (Brown et al., 2001; Covin et al., 2006; Lumpkin and Dess, 1996). Since the knowledge accumulation around the construct of EO has been substantial and studies mainly used the measure initially developed by Miller (1983) and later modied by Covin and Slevin (1989), this study has also adopted this widely used measure which is sometimes referred to as the Miller/Covin and Slevin scale (Brown et al., 2001). In addition, following the suggestions of previous studies (see Wang, 2008), this study adapted two items from Miller and Friesen (1983) and one item from Hurt et al. (1977) in order to be

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Figure 1. Section I. Demographic information

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Figure 1.

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Figure 1.

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able to measure a rms overall propensity of innovative behaviour. In total, 13 items were included in the interview questionnaire to measure the EO construct using seven-point Likert scales. However, one item When there is uncertainty, our business typically adopts a wait and see posture in order to minimise the risk of making costly decisions was removed from the initial analysis because this item was insignicantly correlated to the other items on the scale. An exploratory factor analysis of the EO scale including 12 items was conducted based on the sample of 139. A principal components factor analysis together with a varimax rotation was used. The Kaiser-Meyer-Olkin (KMO) Measure of Sampling Adequacy index was 0.917 and the Bartletts Test of Sphericity was signicant ( p , 0.001), indicating the integrity of the resulting rotated components matrix. One factor was generated, explaining 59 per cent of variance. The factor loadings ranged from 0.422 to 1.00 (see Table I). The Cronbachs alpha of the EO scale was 0.902. The ndings are consistent with the single-factor solution in Frese et al. (2002) and Covin and Slevin (1986), but differ from existing studies that found several dimensions of the EO construct (see Wiklund, 1998). One explanation of our

Item 1. Our business undertakes market research in order to identify market opportunities 2. In the past ve years, our business has marketed a large variety of new products or services 3. In the past ve years, our business has introduced novel products or services (that did not exist in the market before) 4. Our business always looks for new businesses or markets to enter 5. Our business constantly introduces new products/services in order to serve new customers/markets 6. Our business often leads the competition (that our competitors have to follow) 7. Our business has a strong tendency to take on highly risky projects with chances of very high return 8. Because of the competition, our business must be very proactive in the marketplace in order to achieve our business objectives 9. When our competitors develop a new product or a new business method, our business quickly responds to it and adopts it 10. We are willing to try new ways of doing things and seek unusual, novel solutions 11. In our business, people are encouraged to think and behave differently 12. We constantly introduce new processes (e.g. technology, distribution, management systems, etc.) to improve our business

Mean 3.65 3.69 3.49 3.63 3.69 3.37 2.82 3.95 3.37 3.91 3.65 4.00

Standard deviation 2.46 2.36 2.33 2.42 2.44 2.28 2.11 2.22 2.07 2.33 2.40 2.49

Factor loading 0.909 0.545 0.465 0.482 0.563 0.589 0.462 0.493 0.422 0.588 0.482 0.582

Table I. The entrepreneurial orientation scale

Notes: n 139. A principal components factor analysis together with a Varimax rotation was used. The KMO index was 0.917 and the Bartletts Test of Sphericity was signicant ( p , 0.001)

ndings and those of Frese et al. (2002) is that in small rms (particularly micro rms) the founders and/or owners are often the managers of the rms, who are involved in the decision-making and implementation along all the dimensions of EO. Therefore, the 12 items were aggregated into an overall measure of EO when performing ANOVA analysis. A mixed approach incorporating quantitative data and qualitative analysis was necessary to get closer to the world of entrepreneurs, their cultural characteristics and how the socio-cultural characteristics of entrepreneurs inuence their SMEs response to changes in the dynamic environment (Lee and Jones, 2008). Therefore, open-ended questions were included in the in the structured interview schedule in order to collect qualitative data on how education, experience and religion of the entrepreneur inuence the EO of a rm. In particular, open-ended questions were used to collect qualitative data on a wide range of issues pertinent to how rms carry out market research, types of market intelligence gathered and acted upon and how inherent socio-cultural characteristics of business owners inuence these activities. Quantitative data analysis and ndings Analysis of variance (ANOVA) tests were conducted in order to test the difference of EO between groups by education (university degree or above vs. no degree), experience (with related experience vs. no related experience) and religion (those who practise religion, namely praying ve times a day and/or attending religious service on Fridays and/or practising fast vs. those who do not practise religion). Types of industry which have previously shown to have an impact on EO (Huges et al., 2007; Stam and Elfring, 2008) was also included as a control variable into the analysis. The results of the ANOVA analysis are presented in Table II. The results of the statistical analysis showed that the mean value of rms EO between was signicantly higher for those rms whose owners had a university degree or above (mean 4.34) and those whose owners had no degree (mean 3.30) (F 10.077, p 0.002). This suggests that the educational attainment of entrepreneurs contributes to their rms entrepreneurial orientation. This studys statistical analysis also demonstrated a positive relationship between these previous experience of the entrepreneur and the EO of the rm (F 6.231, p 0.014). Specically, the mean value of EO for rms whose owners had prior related experience was 4.33 compared with the mean value of 3.40 for rms who owners had no prior related experience. Religion did not appear as signicant in any of the models that explain EO. Qualitative data analysis and ndings Qualitative data was analysed by using the coding analysis which allows for constant examination of conceptual interactions and relationships, and the conditions under which they occur (Strauss and Corbin, 1990). A coding scheme was derived from the literature, which reected the research framework, highlighting key elements that emerged. This coding scheme was a three-by-three matrix with education, experience and religion as one axis, and proactiveness, innovativeness and risk-taking as the other axis. Much of the data analysis involved breaking down the answers to open-ended questions manually into manageable blocks in order to classify them under each code/grouping. This approach helped to cross-classify logically the variables and

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Source of variation independent variables (Constant) and mean values Practice religion mean value 3.53 No practice religion mean value 3.66 Graduate 1, University degree or Otherwise 0 above mean value 4.34 No degree mean value 3.30 Previous experience in Prior related experience mean the same line 1, Otherwise 0 value 4.33 No prior related experience mean value 3.40 Sector of operations Manufacturing mean value 4.84 (Manufacturing 1; Retailing mean Retailing 2; and Services 3) value 3.43 Services mean value 3.57 Practice religion 1 Otherwise 0

Sum of squares

DF

Mean square

Signicance of F

684

441.359

138

3.217

0.176

0.676

441.359

138

3.001

10.077

0.002

441.359

138

3.081

6.231

0.014

Table II. Socio-cultural characteristics and entrepreneurial orientation ANOVA test results Table III. Analysis matrix: the inuence of different socio-cultural characteristics on different dimensions of entrepreneurial orientation

441.359

138

3.158

1.874

0.158

Note: Dependent variable EO (R Square 0.294)

Education Dimensions of entrepreneurial orientation Proactiveness Innovativeness Risk taking

Socio-cultural characteristics Experience Religion

illustrate interrelationships (Table III). The qualitative data of the study presented further evidence to support quantitative data analysis. It provided insightful understanding of cultural and behavioural aspects of small enterprises by capturing the interface between the socio-cultural characteristics of the entrepreneurs and the economic, political and socio-cultural contexts in which their rms operate. Educational attainment and different dimensions of entrepreneurial orientation Qualitative data illustrated that the skills and knowledge with which managers have been equipped as a result of educational attainment help business owners to manage their organisations with a strong strategic forward looking vision. In particular, these skills enable them to systematically monitor customer needs and broader market trends and act upon them. One of the textile manufacturers explained the importance of educational attainment:

My university degree helped me to develop the skills of being able to carry out market research and identify the customers needs and wants, evaluate my competitors offerings and set a long-term oriented direction for my business.

Socio-cultural characteristics

In addition, one of the food manufacturers explained the importance of educational attainment in developing his ability to synthesise the market intelligence:
I read magazines, newspapers and watch TV programmes about the consumer eating habits. These give me an overall idea about what can work best but it is my educational background, being a university graduate which helps me to reect on the information, think it through and take proactive actions.

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In contrast to these views, there was a widespread view among those business owners who were either primary or secondary school graduates that they always lacked the skills and condence that a higher educational attainment would equip them with. This resulted in taking wrong strategic decisions about the market conditions. One retail shop owner illustrated:
We had done market research before we bought this place. We realised that there were many Turkish people living around in this area. We interpreted this wrongly. We thought we would succeed by solely depending on Turkish customer market. We never thought and even realised that in the long term Turkish customers shopping habits could change and they could go and shop from big supermarkets. We could not identify the roots of the problem because our skills did not help us to foresee these changes.

It was also found that the educational background could enable the owners to synthesise the market information and develop new products. In illustrating this, one university graduate, owner of a meat manufacturer stated that market analysis and the use of information helped him to introduce new products to the market on a regular basis:
We respond to the customers needs. They demanded a marinated product and now we sell marinated chicken and meat. We are also responding to healthy eating habits, which is now a trend. I told everyone a long time ago that McDonalds would lose its popularity because of the obesity and salt issues. I was able to do that because I could read the trends.

Another university graduate, fresh juice cafe owner, also explained how his university education helped him to innovate new products: Innovation is important, innovation in terms of introducing new products to the market, changing your product range very often. My university degree equipped me with the skills of identifying my learning needs and being able to identify those sources that can help me to learn. I constantly do market research on the internet and identify new natural juices, follow and observe other juice bars, their prices and actively follow them what they are doing. I learn from the others, combine my knowledge and innovate new mixes with the natural juices. I am now adding vitamin tablets in some of the juices, and very much in demand. In addition, another meat manufacturer highlighted the importance of identifying niche markets with niche and innovative products and explained how his university degree contributed to this success:
My degree gave me the condence and ability to foresee the opportunities in the market. I came up with this idea of developing hellal meat concept as a response to the market. I realised that Muslim community, teachers, professionals, they were all going home late like

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people from other communities. However, they could not buy hellal fast food products from the supermarkets so that they could cook quickly. I wanted to respond to this need by introducing hellal packaged fast food to the supermarkets.

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During the interviews informants who were university graduates and above also stated that their ability and skills to analyse the market conditions gave them the privilege to take what some of them called calculated risks. When explored further, it was found that they all had the condence to predict the outcomes of their strategic decisions accurately such as decisions associated with investment, introducing new products to the market and targeting new market groups.

Previous experience and different dimensions of entrepreneurial orientation Qualitative data provided further insights about the nature of this relationship. The ndings revealed that those business owners who acquired experience in the same line of business could exploit the accumulated knowledge in identifying customer needs and diagnosing market trends. Most of the informants who had experience in the same line of business stated that they did not undertake a systematic market research in order to identify the changing trends in the market. However, it was realised during the research process that they were well aware of broad issues and their likely impacts on their businesses. When they were asked how, it was found that most of them exploit their accumulated experience by actively engaging with the customers and closely watching their competitors moves. During the research process, it also became apparent that previous experience contributed to rms ability to respond to these needs and market trends by entering into new product markets. Those advocating the pivotal role of experience stated that their accumulated experience over the years equipped them with certain skills and gave them the courage to take certain decisions about the customers needs and competitors moves intuitively. One of a well established retail shop owners illustrated: One day I saw David Beckham was wearing certain ear ring, the following week I invested a lot of money in David Beckham style ear rings and made good money because of my alertness to the fashion. I seized the opportunity before everybody else in the sector. I can sense the expectations of customers because I am in this business for many years. Another one stated that accumulated experience can help them to interpret the global trends in the market: I follow the global as well as local trends carefully. For example, because of the climate change the weather was affected. We had ooding in the UK and the weather was very hot in Mediterranean countries. This meant that there would be no green products in either regions or parts of the world. The day after ooding I told my employees to store green products and groceries. I knew that the price for green products would go up. Look at the prices now. They have gone up. This is how the trends in the broader environment can affect your business and this is how you should take your precaution. Qualitative ndings also revealed that although small business owners who exploited their experience to identify market trends were willing to enter in new markets, they were not prepared to develop new products/services.

Religion and different dimensions of entrepreneurial orientation During the interviews, informants stated that religion affected them very much at personal values level and it encouraged honesty and strong work ethics rather than inuencing their business practices. Even those business owners who practised their religion stated that their business practices should be in line with the realms of the UK. Discussion and conclusions This paper aimed to investigate the relationship between entrepreneurs socio-cultural attributes and their rms EO. A number of conclusions can be drawn from the study. Firstly, the study responds to Hayton et al.s (2002) and Lumpkin and Desss (1996) call for research to investigate how an entrepreneurs socio-cultural characteristics inuence rm-level entrepreneurship. In particular, it provides empirical evidence about the relationship between different elements of socio-cultural characteristics, namely education, experience and religion and the EO construct. Findings demonstrated that educational attainment of an entrepreneur inuence a small rms EO. This nding supports the assertions made by Clercq and Arenius (2006) and Peters (2002) who state that the educational attainment of entrepreneurs contributes to their rms entrepreneurial ability. The results of the statistical analysis also showed that there is a positive relationship between the previous experience of the owner and the entrepreneurial orientation of the rm. Previous literature also suggests that there is a relationship between previous experience of an owner and the EO of their rms. Basu and Goswami (1999), Mughan et al. (2004) and Westhead et al. (2001) found that the previous experience of business owners contributes to the EO of a rm. Given the results of the statistical analysis, it can be concluded that a small rms organisational transformation and strategic renewal through creation and combination of organisational resources and competences are inuenced by different inherent characteristics of an owner. The strategic posture of a small business reects the inherent characteristics of a business owner. Second, the analysis of the qualitative data offered insights into the interface between different socio-cultural factors, namely education and previous experience and the different dimensions of EO, namely proactiveness, innovativeness and risk taking (Please see Table IV). It became apparent that educational attainment equips business owners with the skills and reective mindsets of understanding customers and responding to their needs. Educational attainment also places market intelligence gathering and synthesising and acting proactively very high on a business owners agenda. These lead to both informal and formal approaches to environmental scanning and creative and exible thinking of market conditions. These ndings support Cassons (1982) and Carson and Gilmores (2000) arguments that educational attainment helps to develop the skills of gathering market intelligence. Indeed, in the case of those entrepreneurs with higher educational attainment, there was evidence of both formal and informal approaches to monitoring the business environment. However, what was distinctive with these entrepreneurs was that educational attainment helped them to develop those skills that enable them not only to gather market intelligence and but also to synthesise the information and act upon it. The ndings also conrmed Levent et al.s (2003) arguments that lack of education hinders entrepreneurship and business owners need to achieve higher educational attainment if they are keen to break out into mainstream market.

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Education

Socio-cultural characteristics Experience Plays an important role in the rms ability to identify market trends and act proactively

Religion No inuence

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Table IV. The inuence of different socio-cultural characteristics on different dimensions of entrepreneurial orientation

Dimensions of entrepreneurial orientation Proactiveness Places market intelligence gathering and synthesising and acting proactively very high on a business owners agenda It helps to develop the skills of gathering market intelligence and the synthesis of market intelligence Innovativeness Contributes to entrepreneurs ability to think creatively, be exible and respond to widely different situations and thus enhances their rms innovativeness Risk taking Positive inuence on risk taking propensity

Does not appear to contribute to the development of new products No inuence

No inuence

No inuence

The qualitative ndings of the study also demonstrated that acquisition and exploitation of knowledge play an important role in innovating new products. Previous literature also indicates that there is a positive relationship between the educational attainment of entrepreneurs and their rms ability to innovate (Collinson and Quinn, 2002; Shook et al., 2003; Walton, 2003). More importantly, in line with the ndings of the previous studies (Carneiro, 2000; Fahey and Prusak, 1998), our ndings clearly revealed that the educational attainment of the business owners contributes to their ability to think creatively, be exible and respond to widely different situations. However, the innovations identied by this study do not reect the extent of uniqueness and originality of technological innovations mentioned by the studies of Collinson and Quinn (2002) and Llewellyn and Wilson (2003). In this study innovations are seen as original and unique business concepts in the eyes of the business owners of small ethnic minority rms and their development requires careful management of and responsiveness to knowledge associated with a capacity for creativity and exibility as identied by previous studies. In terms of the relationship between educational attainment and risk taking, the ndings of the study refute the argument of the earlier studies that education reduces curiosity, tolerance for ambiguity and increases risk aversion (Fallows, 1985; Shapero, 1980). On the other hand, the ndings corroborate the more recent empirical evidence (Knight et al., 2003; Xia et al., 2001) that educational attainment makes a positive impact on risk taking propensity. Previous experience equips small business owners with the skills of identifying and responding to customer needs and collecting market intelligence by intuition. Indeed, this studys qualitative ndings clearly showed that previous experience enables business owners to utilise market information by being in regular touch with customers. The ndings of the study also went further and identied that previous experience of an owner plays an important role in the rms ability to identify market

trends and act proactively. These ndings are in line with the arguments of Mughan et al. (2004) and Westhead et al. (2001) who also argued that the previous experience of owners gives small rms the privileged access to an accumulated knowledge base and market information and thus would allow rms to act proactively. However, what emerged from the ndings is that previous experience does not seem to contribute to a business owners ability to reect on and synthesise market intelligence. More importantly, it does not appear to contribute to creative and exible thinking and therefore to the development of innovative products. This nding contradicts with the arguments of Haynes (2003), Bakhru (2004) and Grant and Romanelli (2001) who advocate that previous experience stimulates innovation. Finally, although limited, those studies (Carson and Gilmore, 2000; Lumpkin and Dess, 1996), which acknowledged the relationship between the socio-cultural backgrounds of SME business owners and their rms EOs did not consider the ethnicity dimension. Therefore, they avoided the serious linkage between ethnic socio-cultural embeddedness and a rms EO. Accordingly, this paper initiates some points of discussion in seeking to provide a systematic body of knowledge relating to EO of ethnic rms. Our study did not nd a relationship between the religion of Turkish business owners and EO of their rms. This can be interpreted as Turkish business owners ability to break out of their ethnic enclaves and integrate to the social and economic realms of the UK. The contribution of previous experience to a rms proactiveness, but not to innovativeness, could be explained by the depth of ethnic networks that Turkish businesses created or were drawn into. Turkish business owners were traditionally pushed to self-employment because of their lack of skills and education (Basu and Altinay, 2002). Before they started up their own businesses, most of them worked for someone else in the same line of business in order to develop the skills and understanding of running a business in a particular sector. However, most of these businesses were the businesses of co-ethnic business owners targeting co-ethnic Turkish customers without considering wider issues in broader environment such as responding to the needs of mainstream customers (Altinay and Altinay, 2008). Therefore, although previous experience in the same line of business equipped them with the skills and intuition of gathering market intelligence and responding to customer needs and other market trends, it did not seem to equip them with the skills of exibility and creativity to innovate new products and services and thus achieve sustainable growth. It is educational attainment that plays an important role in this endeavour. Given this, rst generation Turkish immigrants, in particular business mens, growing positive attitudes towards their childrens education should not be seen as a surprise. The paper also provides several practical implications. First, it is important that business owners assess how their different inherent socio-cultural characteristics contribute to different dimensions of their rms EOs. Such an assessment could help them to identify their learning and training needs and attend relevant courses offered by the local councils and business support associations. Second, if they are reluctant or unable to learn because of their age and/or time constraints, they should move away from an autocratic centralised management style and delegate more responsibilities to those individuals who possess the experience and educational background. Finally, when it comes to developing succession plans, emphasis should be placed both on experience and educational attainment in terms of the development of their childrens skills and competences.

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