STRUCTURAL INTERVENTIONS FOR FAVOURABLE SOCIOCULTURAL INFLUENCES ON INDIAN ENTREPRENEURS

The study involved a comparative measurement of levels of salient entrepreneurial traits and entrepreneurial success achieved by male and female entrepreneurs, examining links between th

STRUCTURAL INTERVENTIONS FOR FAVOURABLE

SOCIOCULTURAL INFLUENCES ON INDIAN ENTREPRENEURS

Dr Shradha Shivani

Lecturer, Department of Management,

Birla Institute of Technology,

It cannot be denied that there is a growing need in this country to create and maintain a cultural environment that would help in building a wider base of population capable of successful entrepreneurial behaviour and willing to accept it as their profession

socio-In the above background an empirical study was conducted using a sample of 200 small entrepreneurs of Ranchi, the capital city of Jharkhand, one of the lesser-developed states of India The study involved a comparative measurement of levels of salient entrepreneurial traits and entrepreneurial success achieved by male and female entrepreneurs, examining links between these variables and socio-cultural factors like Caste, Religiosity, Family structure and Family support

The findings suggest that the socio-cultural factors definitely influence the entrepreneurial behaviour However, It is also observed that the nature of these factors and their influence is such that appropriate structural interventions can make all these sociocultural attributes play a favorable role for growth of entrepreneurship in the Indian society The authors have made some observations on the policy implications of the findings and they wish to share this information with the international community, such as the present forum for wider support

STRUCTURAL INTERVENTIONS FOR FAVOURABLE

SOCIOCULTURAL INFLUENCES ON INDIAN ENTREPRENEURS

I INTRODUCTION

Desirable rate of economic growth calls for rapid emergence of a multitude of enterprises in all walks of life This requires the creation and maintenance of an environment that is conducive to growth of existing enterprises and would help build up a wider base of population capable of successful entrepreneurial behaviour Lately the concept of culture of entrepreneurship has received prominence and social scientists have observed that an entrepreneur is a product of the socio–cultural milieu

Many economists now discuss the role of non-economic factors in economic growth, including concepts developed in Sociology and Psychology (Lipset, 2000) In the above context, the views

of Max Weber (1864-1920) are relevant A thesis suggested by Weber is that: Given the economic conditions for the emergence of a system of rational capital accumulation, whether or not such growth occurred in a systematic fashion would be determined by the values present Structural conditions make development possible, while cultural factors determine whether the possibility becomes an actuality (Lipset, 2000) This means that an appropriate socio-cultural environment is a prerequisite for industrial or economic growth The event of enterprise creation, the essential activity in entrepreneurship, can therefore be seen as a consequence of congruence between environmental conditions and the entrepreneurial behaviour of individuals determined

by their socio-cultural background

Inspired by Weber’s proposition that religion, norms and values, behavior, and economic development are all interconnected, a number of experts reported their views on this relationship Mclelland (Mclelland, 1961), Berna (Berna, 1960), and Richard Fox (Fox, 1969) have also related economic progress with culture They tried to explain the economic backwardness of India by linking it with the Indian culture Some of these scholars argued that the spirit of enterprise was inhibited among the indigenous population of India by the religious philosophy of resignation embodied in the doctrine of karma and by the rigid social organization of the caste system and the joint family For instance, it has been observed by some of them that the tradition bound Indian society offered little freedom of choice of profession to its population It is the

caste that determined the occupation for its members, especially in the tradition bound families

(Weber1958, Tripathi, 1992) Consequently, the social base of entrepreneurial growth has remained very limited in India

Tripathi has reported that the Indian personality, by and large, remained ‘unentrepreneurial’, if not anti-entrepreneurial', (Tripathi, 1992) McClelland argued that Indians lacked Achievement Motivation due to the sociocultural influences on them (McClelland, 1969) On the contrary, a few other scholars like Satish Saberwal (Saberwal, 1976), G.K Chadha (Chadha, 1986), Streefkerk (Streefkerk, 1985) have rejected Weber’s thesis They were of the opinion that structural conditions and not the cultural conditions determine whether entrepreneurship will flourish in a society or not Therefore as presented in the above discussion different researchers have arrived at contradictory conclusions regarding the role of sociocultural factors in supporting and promoting entrepreneurship, particularly in India At the same time empirical evidence

regarding the role and the scope for structural interventions for influencing the sociocultural factors for promotion of entrepreneurship is also inadequate and therefore inconclusive as well.

However, it cannot be denied that there is growing need in this country to create and maintain an appropriate environment that is conducive to growth of existing enterprises and would help build

up a wider base of population capable of successful entrepreneurial behaviour It would be meaningful to empirically examine the possible links between growth of entrepreneurship and sociocultural factors like Caste, Religiosity & Perceived Family support and to identify the Structural interventions that can be designed to make the influencing sociocultural attributes play

a favourable role for growth of entrepreneurship in India

It is common knowledge that the proportion of women in the entrepreneur population of India is

miniscule In this context it would be relevant to find out whether there are any differences between Indian male and female entrepreneurs with respect to the levels of success achieved by them In case if any differences are observed it would be interesting to find out whether these differences are due to sociocultural or structural reasons

II OBJECTIVES AND METHODOLOGY

In the above background an empirical study was conducted on the entrepreneurs of Ranchi, the capital city of Jharkhand, erstwhile a part of the state of Bihar in India The study involved a comparative measurement of levels of entrepreneurial traits and success achieved by male and female entrepreneurs, examining links between these variables and a few sociocultural factors like Caste, Religiosity, Family structure and Family support The scope for structural interventions for favourable influence of sociocultural factors was explored

Several measurement scales were used in the study The design of the scales was based on review of relevant literature and consultation held with a group of five judges who were representatives of Government support agencies, officials of the Ranchi chamber of commerce and one expert academician in the subject The scales are described in the annexure

A random sample of 200 entrepreneurs was selected from the directory of Small Scale Industries Association of Ranchi The sample consisted of 150 male entrepreneurs and 50 Female entrepreneurs Relevant information was collected from the respondents with the help of a semi-structured Interview Schedule The findings reported in this paper are from a larger project carried out during 2002-04

III EMPIRICAL FINDINGS

Success of the Entrepreneur

Entrepreneurial success can be defined in many different ways Comparison of the levels of success achieved by entrepreneurs is a difficult task One may use some quantified performance indicators like financial performance, awards won or intangible measures like happiness, satisfaction etc that may be difficult to quantify On review of scales used for measurement of entrepreneurial success by various Indian researchers (Akhouri 1979, Rao1986, Kumar 1990), a set of 3 key variables was selected for measurement of success of the respondents of this study

These variables are, Net Profit (average of last 4-5 years), Turnover growth rate (average of last 4-5 years) and Diversification level of their enterprises.

Net Profit and Turnover growth were used in almost all the above-mentioned scales and these are variables that are a function of some of the other measures like labour productivity, raw material productivity, etc used in the scales referred above Diversification level was included along with the other two financial variables because measurement of entrepreneurial success would remain incomplete without a measurement of the amount of innovation and risk taking exhibited by the entrepreneur, as these are two important characteristic features of entrepreneurship This is as per a very widely accepted definition of the term ‘Entrepreneur’,

given by Hisrich & Brush “Entrepreneur is a person who creates something different with value

by devoting the necessary time and effort, assuming the accompanying financial, psychic and social risks, and receiving the resulting rewards of monetary and personal satisfaction” (Hisrich and Brush; 1978) Diversification decision of the entrepreneur is a suitable indicator of

innovativeness and risk taking propensity of the entrepreneur

The findings regarding comparative levels of Net Profit, Turnover Growth and Diversification level achieved by the respondents is presented in Figure 1, 2 and 3 Male respondents have managed to earn relatively higher levels of profit and Turnover Growth as compared to the female respondents There is no significant difference in the level of diversification achieved by

the two groups As presented in Figure 4 there is a striking difference between the male and

female respondents regarding their extent of Success Male entrepreneurs have been found to be more successful among the respondents The chi square results agree to the significant difference between the two sets of respondents Hence one may conclude that entrepreneurial performance can be differentiated on the basis of gender

The reasons for this difference may be due to differences in the Sociocultural attributes of the two sets of respondents, differences in their entrepreneurial traits or because of differences in access to infrastructure support for male and female respondents This will be explored later in this discussion

Socio-cultural Attributes and Success

Religiosity

Religion is an integral part of a cultural system It is important because it promotes social

solidarity and reinforces social norms and values Religion makes people share common beliefs and thus a common value system

It is widely held by some western observers like Max Weber that India's spiritualism, philosophy

of renunciation, fatalism and asceticism constitute insurmountable obstacles to material progress

of the country (Singer; 1956) Following this analysis of Weber a few other researchers like Dwijendra Tripathi, have also argued that, because of the religious philosophy of resignation embodied in the doctrine of ‘Karma’ and the rigid social organization of the caste system the Indian personality remained largely unentrepreneurial if not anti – entrepreneurial (Tripathi,

1992) Similarly McClelland was of the opinion that the presence of a specific motivational structure, the desire to achieve purely for the sake of achievement i.e the `achievement motivation' is of critical importance to successful entrepreneurship and he said that Indian artisans lacked entrepreneurial values and motives, a conclusion he based on his experience with handloom weavers in Orissa and artisans in Kakinada in south India (Mclelland and Winter, 1969)

But these assertions are contradicted at least on two counts First, not all Hindu scriptures teach doctrines of self-denial or the cessation of desire in order to achieve personal salvation Secondly, the secular doctrine abounds in works like Kautilya's, "Arthasastra", the "Rig-Veda and Bhagavat Gita" (Rao, 1986, p-18)

Kunkel describes the reasoning of western observers who find the tenets of the Hindu religion as

responsible for India's economic backwardness in the following words, “ The sacred literature of

India contains values which are internalized by the people who then act in accordance with these values, and thus India is economically stagnant, and there is little hope of economic growth" (Kunkle, 1965) However, he also points out that the above reasoning is based on an assumption for which there is no objective evidence

Contrary to the western view, H.W Singer (Singer, 1953), Srinivas (Srinivas, 1962) and others argue that Indian population by and large is as materialistic in its daily life as its western counterparts Singer states that, "The Indian world view encompasses both material and spiritual values, and these can be found in the behaviour of the ordinary Indian existing side by side and

in functional interdependence Further he points out: A society dominated by a philosophy of renunciation need not be a society of ascetics In India, ascetics and holy-men have never constituted more than a tiny fraction of the population There have always been a sufficient number of householders willing and able to do the world's work And while the ideals of asceticism may indirectly influence the general population, not all of these influences oppose social reform and economic development" (Singer; 1953,p-83)

Milton Singer argued on the basis of an empirical study conducted by him in Madras that Hindu industrialists in Madras compartmentalize their religious lives and their business activities (Siger, 1972) Timberg (Timberg, 1978) and Saberwal (Saberwal, 1976) had altogether rejected Weber’s thesis that religion, norms and values, behavior and economic development are all interconnected They were of the view that India’s economic backwardness was due to certain structural conditions that were unsuitable for entrepreneurship and not because of social or cultural systems prevailing in the country

While the above arguments have been forwarded, nothing conclusive has emerged The views of scholars regarding the influence of Indian religiosity on economic success are conflicting However, the fact remains that Indian economy remained stagnant for centuries for which historically various explanations have been suggested of which religion is only one Foreign rule extended over a long period is another Lack of modern educational facilities and other structural facilities for growth of entrepreneurship is one of the consequences of foreign rule Social and

political institutions, which were not conducive to economic development, are the third and perhaps the most conclusive explanation (Rao; 1986, p-19).

As presented in the previous section, many scholars consider religion as an important sociocultural attribute influencing economic development Although a cause – effect relation cannot be tested between the two variables; it would be appropriate to examine the relation between religiosity and success levels achieved by the respondents of this study in a descriptive manner The religiosity of each respondent was measured by seeking information on his religious habits It was measured on a three-point scale with categories of high, medium and low The measurement scale is explained in the annexure

The Figure 5 shows the respondents' religiosity and the extent of entrepreneurial success achieved by them Almost 90 percent respondents were found to have high religiosity or Medium Religiosity Only a small minority of 10 percent respondents was found to have low religiosity All the respondents said they had faith in the power of God

There is no distinct relationship between religiosity and success level of the respondents The distribution of respondents in different levels of success for all religiosity categories is the same Although, statistically there is no significant relationship between religiosity and success but almost all the respondents agreed that their religious functions, norms, practices and God’s power helps them to be disciplined and gives them the confidence to overcome difficulties It may be concluded that religion is definitely not a barrier to entrepreneurial success in India; rather it is a source of strength for entrepreneurs This conclusion is valid for both Male as well

as Female entrepreneurs Cross cultural research involving a comparative study of performance

& success of entrepreneurs from two different cultures can throw more light on the relationship between religiosity or religion and entrepreneurial success

Caste

Among the social institutions that are held responsible for India's backwardness, the caste system

is considered the most prominent one All other social factors that inhibited development are only offshoots of or closely related to the caste system Since caste is an important sociocultural attribute, therefore information regarding caste of the respondents and success achieved by them has been analyzed to see the influence of caste level on success achieved by the respondents

The grouping of castes is explained in the annexure The caste composition and success level of respondents is presented in Figure 6.As per the Figure 6 in the forward caste male category a clear majority of 53.57 % are in the very successful category Whereas, only 31.25 % and 15.18% belong to the successful and less successful categories On the other hand among the male respondents of the backward caste category, largest number of cases are in the successful category i.e 47 % and only 23.5% and 29.4% are in the Very successful and less successful categories respectively Among the females, majority of them belong to the forward caste and are equally distributed in all categories of success Only a small minority of 8 respondents were of

the SC category, out of whom the majority are in the successful or Very successful category In the ‘others’ category also most of the males are in the very successful category, i.e.46.15%.

The above figures suggest that the male and female respondents belonging to forward caste are found in all categories of levels of success There are few respondents from backward, scheduled and others caste group but most of them are placed in the very successful and successful category

as per their performance Statistical results did not show any significant relationship between caste and success level for male or female entrepreneurs

Although these figures do not indicate any apparent relation between caste and success there are certain implications The data suggests that an overwhelming majority of respondents are from high caste while low caste respondents are very few in number In this context, it would be appropriate to point out one of the findings from general discussions with the respondents and also with some experts It was observed that high caste entrepreneurs are able to continue with their enterprise because of their caste orientation Even if they face failure at a certain stage they are able to overcome them because of the tacit support of caste groupings Whereas, the low caste entrepreneurs are unable to continue in such situations because of the lack of such caste support Hence their actual number is less

The findings of this study suggest that caste does not influence the success level that can be achieved but it does influence the supply of entrepreneurs and the survival of the enterprise in difficult situations Therefore these findings do not conclusively support or reject the views of Weber and other researchers who consider the Indian caste system as a hindrance to

entrepreneurship This requires a systematic study of those individuals who had the desire to

become an entrepreneur but could not do so and an investigation of the reasons for the failure of entrepreneurs who could not survive when faced with difficult situations

The findings of this study are consistent with the views of a few other researchers who have conducted their study in some other parts of the country and have presented evidences of individuals from lower castes emerging as successful entrepreneurs Holmström, observed that

`In some cases artisan castes of Delhi set up manufacturing units for light engineering products like ball bearings and motor parts ' (Holmström, 1985) This transition from artisan to industrialist occurred in other parts of India as well Satish Saberwal described in detail how, after 1930, carpenters and blacksmiths in a city of Punjab worked their way up to become industrial entrepreneurs (Saberwal, 1976) To a large extent this is true for the state of Punjab as

a whole, as is shown in the study by G.K Chadha, who described how artisans like blacksmiths, masons, and carpenters, turned into good engineers who played a vital role in the regeneration of the agro-industry in Punjab, setting up small industrial workshops, many of which in due course grew into full-fledged industrial enterprises (Chadha, 1986) In his study on small-scale industrialists in two small Gujarat towns, Hein Streefkerk also showed that artisan caste members, namely carpenters and blacksmiths, were the first to become actively involved in the transition to industrial production (Streefkerk, 1985)

Based on the above discussion one can reject the argument that members of artisan castes were, and are, unable for cultural and socio-psychological reasons to make a contribution to industrial development However, it may be concluded that caste influences entrepreneurial growth and

sustained entrepreneurial success and that there is need for designing appropriate structural interventions to deal with this influence.

During the exploratory interviews with the respondents, a hypothesis that emerged was that the moral and financial support received by them from their family was valuable for them and it played a significant role in enabling them to carry out their entrepreneurial activities To test this hypothesis, the level of Family support (Financial and Moral) received by the respondents (as perceived by them) was measured and the link between level of perceived family support and levels of success achieved by the respondents was explored The scale used for the measurement

is described in the Annexure Figure 7 & 8 present the level of family support and it’s relation with the level of entrepreneurial success achieved by the respondents

Overall we find from figure 7 that the largest proportion of respondents i.e 44.5 percent of them have received High level of family support for taking up entrepreneurship Some differences are observed between the male and female respondents with respect to family support Among the males a large proportion of them i.e 49.33 percent have said that they received high level of support from their families whereas the majority of the female respondents i.e 52 percent of them have said that they received only moderate support from their families According to the chi-square results this difference in the level of family support received by Male and Female respondents has been found to be statistically significant This difference could also be one of the reasons for lesser degree of success achieved by the Female respondents This can be confirmed

by analysing the relation between Success and Perceived Family support as given in Figure 8

It is obvious from figure 8 that the majority of the respondents received a lot of family support morally as well as financially to carry on their entrepreneurial activity But, the more successful respondents were found to have received greater family support as compared to the less successful ones Both chi square results and correlation between the family support received by the respondents and their extent of success show positive significant relationship

Another inference that can be drawn from the above information is that one of the reasons for less degree of success achieved by Female respondents could be because they received less degree of family support as compared to their male counterparts

In the context of Family Support it would be pertinent to point out that the majority of the entrepreneurs who have received high support are from extended families These respondents probably benefited more from the family because of the family structure Joint families seem to have encouraged entrepreneurship in this region This is contrary to the views of researchers like

Dwijendra Tripathi who came to the conclusion that ‘the joint family system of Indian society is

an important factor in explaining India's retarded economic growth and the unentrepreneurial personality of Indians (Tripathi, 1992)

On the other hand Milton Singer from his study of entrepreneurs of Madras concluded that the joint family organization plays a positive role in promoting industrial entrepreneurship (Singer, 1972) The findings of Singer suggested that joint family units provide financial, physical and social security to make entrepreneurial activity a success

Most of the respondents belonged to the extended type of families and only a few were of nuclear types Many of these nuclear families had also recently branched out from extended

families The respondents mentioned that they got all kinds of support from the members of their

extended families Thus, one of the important factors influencing the success of an Indian entrepreneur is the support from his family and the type of family he belongs to This observation indicates the social roots of Indian entrepreneurship

Education

Along with the informal learning in a family, the child undergoes formal learning through his education Education is considered an important socio-cultural factor that influences the performance of an entrepreneur It is believed that education received in schools and college inculcates the value of achievement and the value of equality of opportunity and also enables people to acquire various types of technical skills These values and skills have an important function in this advanced industrial society, as it requires a highly motivated achievement oriented work force, equipped with the required skills

Hisrich and Peters have observed that although formal education is not necessary for starting a new business, as is reflected in the success of many entrepreneurs who were high school drop outs, found through out the world, it does provide a good background particularly when it is related with the field of the venture (Hisrich and Peters, 1998) The Figure 9 presents the extent

of success in relation to the education level of the respondents of this study

As presented in Figure 9 the statistical results (chi square test) show a significant relationship between the educational level of the respondents and their level of success Respondents with Higher levels of education have been found to be more successful than those with lower levels of education

IV CONCLUSIONS: SOCIOCULTURAL ATTRIBUTES AND SUCCESS

The findings of this study suggest that there is a definite relation between sociocultural attributes

of entrepreneurs and the level of success achieved by them It is observed that caste does not influence the success level that can be achieved but it does influence the supply of entrepreneurs and the survival of the enterprise in difficult situations The representation of the lower castes in the entrepreneur population is very low Therefore these findings do not conclusively support or reject the views of Weber and other researchers who consider the Indian caste system as a hindrance to entrepreneurship

Perceived Family support and Education level are two very important factors influencing the success of entrepreneurs The more successful respondents were found to have received greater family support as compared to the less successful ones An inference that can be drawn from the above findings is that one of the reasons for less degree of success achieved by Female respondents is because they received less degree of family support as compared to their male counterparts Almost all those who have received high support are from extended families It is indicated that the joint family system of India has not hindered the growth of entrepreneurship Highly educated respondents and respondents with professional qualification were found to be more successful than the lesser educated ones

Religiosity doesn’t have significant correlation with success although all the entrepreneurs are found to have faith in God and religiosity was high among the entrepreneur population in general Indian religiosity is definitely not a barrier to entrepreneurial success; rather it is a source of strength for the entrepreneurs

The above conclusions indicate that there are certain sociocultural attributes like Caste, Perceived Family support and Education that influence the growth of entrepreneurship whereas others like Indian religiosity and the Joint family system have no influence but they definitely do not hinder entrepreneurial activities The implications of these findings for structural interventions will be presented in a later section of this paper

V ENTREPRENEURIAL TRAITS

Most experts have agreed that entrepreneurs possess certain distinctive qualities As reported by Joseph Schumpeter, John Stuart Mill claims that entrepreneurship requires "no ordinary skill,"

and he laments the fact that there is no good English equivalent word to encompass the specific

meaning of the French term ‘Entrepreneur’ (Schumpeter, 1951)

Alfred Marshall suggests that the skills associated with entrepreneurship are rare and limited in supply He claims that the abilities of the entrepreneur are "so great and so numerous that very few people can exhibit them all in a very high degree" Marshall, however, implies that people can be taught to acquire the abilities that are necessary to be an entrepreneur (Marshall, 1994)Various studies have been conducted to identify the important entrepreneurial traits There is a general agreement among writers that the four most important traits of an entrepreneur are his Risk taking propensity, Innovativeness, Achievement orientation and Managerial skills

If one tries to analyze how people acquire these traits, literature suggests that both structural as

well as sociocultural factors play a role For example, Max Weber (1958) suggested that: Given

the economic conditions for the emergence of a system of rational capital accumulation, whether

or not such growth occurred in a systematic fashion would be determined by the values present Structural conditions make development possible, while cultural factors determine whether the possibility becomes an actuality (Lipset, 2000)

This means that an appropriate socio-cultural environment is a prerequisite for industrial and economic growth The event of enterprise creation, the essential activity for entrepreneurship,

can be seen as the consequence of congruence between environmental conditions and the entrepreneurial behavior of individuals determined by his socio-cultural background (Robinson

et al 1991)

From the above discussion it can be inferred that an individual develops the above-mentioned entrepreneurial attributes through his upbringing as he undergoes the process of socialization in a given society and appropriate values and norms of social context support and promote entrepreneurship

Risk Taking Propensity:

Taking decisions and acting on an uncertainty is understood as a risk-taking activity Risk taking propensity is undoubtedly the most widely discussed entrepreneurial trait Although it has not been empirically established that Risk taking is a distinguishing characteristic of entrepreneurs there is almost universal agreement on the fact that it is an essential trait found among entrepreneurs all over the world (Hisrich & Peters, 1998.)

Risk taking, whether financial, social, or psychological, is an integral part of the entrepreneurial process All recent definitions of entrepreneurship mention a risk-taking component Cantillon, who was the first to formally define the term ‘Entrepreneur’, explained that the entrepreneur is a specialist in taking on risk He "insures" workers by buying their products (or their labor services) for resale before consumers have indicated how much they are willing to pay for them

The workers receive an assured income (in the short run, at least), while the entrepreneur bears

the risk caused by price fluctuations in consumer markets (Cantillon, 1755)

The U.S economist Frank H Knight refined this idea To Knight, “entrepreneurs bear the

responsibility and the consequences of making decisions under conditions of uncertainty, that is,

where the uniqueness of the situation denies an objective, qualitatively determinate probability.”(Knight, 1921)

He distinguished between risk, which is insurable, and uncertainty, which is not Risk relates to recurring events whose relative frequency is known from past experience, while uncertainty relates to unique events whose probability can only be subjectively estimated Changes affecting the marketing of consumer products generally fall in the uncertainty category Individual tastes, for example, are affected by group culture, which, in turn, depends on fashion trends that are essentially unique Insurance companies exploit the law of large numbers to reduce the overall burden of risks by "pooling" them For instance, no one knows whether any individual, forty-year-old, will die in the very next year But insurance companies do know with relative certainty how many forty-year-olds in a large group will die within a year Armed with this knowledge, they know what price to charge for their life insurance, but they cannot do the same when it comes to uncertainties Knight observed that while the entrepreneur can "lay off" risks much like insurance companies do, he is left to bear the uncertainties himself He is content to do this because his profit compensates him for the psychological cost involved

To measure risk-taking propensity of respondents the Risk Attitudes Inventory designed by Gene Calvert, (1993) was used (Ref Annexure) Along with Kogan-Wallach CDQ and Jackson Personality Inventory (JPI) this is another popular tool for measuring Risk Taking Propensity The max Score was 15 The higher the total score the more is the Risk taking Propensity Therefore all those who scored from 0-5 were categorized as having Low Risk taking propensity, those with scores between 6-10 as having moderate Risk taking Ability and those with 11-15 as High Risk Taking propensity

The Risk Taking Propensity of the Respondents is presented in the Figure 10 Overall we find that a substantial proportion of respondents (43%) have low level of Risk Taking propensity The difference between the Male and Female respondents was not found to be significant This suggests that people in this region do not like to take high levels of risks for their ventures Probably, this is the reason why the entrepreneurial profession is not a very sought after one among people here, as suggested by the officials of support organizations located in the district

It was observed that 66.5% of the respondents are engaged in Non Manufacturing types of enterprises while only 33.5% own a manufacturing enterprise One may conclude from the above that the preference of the respondents of this study for Non-Manufacturing types of enterprises is because of low level of risk Taking Propensity among them because non-manufacturing businesses are perceived to be less risky as they require lower initial outlay and have shorter breakeven period In this context one needs to examine whether there are any social origins of such low levels of Risk taking propensity

The above observation regarding preference for Non Manufacturing businesses is consistent with the findings of a few other studies conducted in various other regions of the country Some of these researchers have explained the reasons for this observation by linking it with the traditional approach of the Indian businessmen towards trade and commerce A debate has ensued among researchers regarding the preference of Indian entrepreneurs for manufacturing or non-manufacturing type of enterprises For example, According to Mario Rutten, studies conducted

on Indian entrepreneurs emphasized the specific commercial style of Indian traders, which was said to stand in their way of establishing modern businesses These studies argued that Indian moneylenders and traders consider the production process to be something fixed and static and are not prepared to invest more than the absolute minimum amount of capital in installations and machines This preference for rapid profits closely parallels the traditional Vaishya ethic (Mario Rutten, 2001)

James Berna, argued that Indian entrepreneurs with a background in trade are opportunistic businessmen with very short time horizons, interested only in fast turnover and quick profits, completely unconcerned with technology, unwilling to invest more than the bare minimum in fixed capital, and still preoccupied far more with trade than with industry (Berna 1960) This was also expressed by Leighton Hazlehurst , who concluded, on the basis of research among Banias in a Punjab town, that rural traders invested their capital in productive enterprises only very reluctantly (Hazlehurst, 1966) Again Richard Fox, who studied Banias in another small North Indian town, also argued that these businessmen were more willing to accept smaller

profits as long as they covered essential expenses, rather than to invest in more profitable term enterprises in which they risked losing their investment (Fox, 1969).

long-At the same time Rutten also states that some studies done in the 70s and 80s (For eg Van der veen, 1976) argued that this short-term commercial orientation of Indian entrepreneurs does not have social origin Rather, it was a response to structural factors such as imperfect markets or lack of an adequate institutional framework These authors argued that, if the commercial climate

is favorable that is, there is an availability of market incentives, governmental support, and sufficient banking and transport facilities industrial entrepreneurship is bound to develop In this approach the development of entrepreneurship that is, the employment of capital and other productive means for industrial production was placed in a broader political and economic frame

There is evidence of Indians, both males and females, setting up a host of manufacturing enterprises wherever structural factors favored such businesses To a large extent this is true for the states of Delhi, Punjab and Gujarat that are a few relatively more industrially advanced states

of India This is shown in the study by G.K Chadha, who described how artisans comprising blacksmiths, masons, and carpenters turned into good engineers who played a vital role in the regeneration of the agro-industry in Punjab They set up small industrial workshops, many of which in due course grew into full-fledged industrial enterprises (Chadha, 1986) In his study on small-scale industrialists in two small Gujarat towns, Hein Streefkerk also showed that artisan caste members, namely carpenters and blacksmiths, were the first to become actively involved in the transition to industrial production (Streefkerk, 1985) Satish Saberwal described in detail, how after 1930, carpenters and blacksmiths in a city of Punjab worked their way up to become industrial entrepreneurs (Saberwal, 1976)

One may therefore conclude that it is not the sociocultural context that is the determinant of this trait but the whole structural environment that has probably made the people of this region less inclined towards risk taking in general

Risk Taking and Environment Uncertainty

The above conclusion is further supported by the findings on the opinion of the respondents regarding the level of uncertainty in the general environment, i.e., the social, political, legal, and economic environment of this region When asked to rate the level of uncertainty in the general environment as perceived by them, the responses obtained were as presented in Figure 11

A large majority, that is, 75.5 percent of respondents considered the uncertainty in the environment to be high or very high The difference between male and female respondents is not found significant Considering the premise that higher the levels of uncertainty in a situation lower the propensity to take risks, one may interpret from the above findings that the Risk taking propensity of the entrepreneurs is low because the level of uncertainty in the general environment in which they exist is high as perceived by them

The concept of innovation and newness is an integral part of entrepreneurship It was Shcumpeter who associated innovativeness with entrepreneurship for the first time According to him Innovativeness involves doing something new The newness can consist of anything from a new product to a new distribution system to developing a new organizational structure (Schumpeter, 1934)

There is a lot of disagreement regarding the definition of innovation Kirzner suggests that the process of innovation is actually that of spontaneous "undeliberate learning" (Kirzner, 1985) Thus, the necessary characteristic of an entrepreneur is alertness, and no intrinsic skills-other than that of recognizing opportunities, are necessary Other economists of the innovation school claim that entrepreneurs have special skills that enables them to participate in the process of innovation Leibenstein claims that the dominant, necessary characteristic of entrepreneurs is that they are gap-fillers: they have the ability to perceive where the market fails and to develop new goods or processes that the market demands but which are not currently being supplied (Lieibenstein, 1966)

Peter Drucker referred to the process of innovation as it occurs in developed countries as,

"creative imitation of innovations made in the developed countries." The term appears initially paradoxical; however, it is quite descriptive of the process of innovation that actually occurs in the developing nations Creative imitation takes place when the imitators better understand how

an innovation can be applied, used, or sold in their particular market niche (namely their own countries) than do the people who actually created or discovered the original innovation (Drucker, 1985)

The innovativeness of the respondents was measured using a scale consisting of six indicators presented in detail in annexure The innovativeness level was categorized as high, medium and low Figure 12 presents the Gender wise distribution of the respondents in the 3 categories of innovativeness levels

From the Figure 12 one can observe that a very low 19 percent and 18 percent each of male and female respondents are highly innovative It is interesting to note that the chi square results show that there is no significant difference in the innovative traits of male and female entrepreneurs It was also observed that all those who are highly innovative have high level of education as well (having acquired 13 or more years of education) This probably means that education and training can help inculcate innovativeness also

Most of the respondents are showing their trait of innovativeness by locating new ways to market their products either by identifying a new market away from the state or by identifying new types

of channels Some of the respondents identified new sources of raw materials, new ways of motivating their employees and new ways of keeping records Innovations in the form of developing new innovative products or new ways of manufacturing or offering new kind of service were very few

Achievement Orientation

The need for achievement is also a very widely discussed characteristic of entrepreneurs High achievers are individuals “with high drive and high activity level, constantly struggling to achieve something, which one could call as their own accomplishment They like to be different from others and strive to accomplish goals which are not otherwise very easy to achieve” (Murthy; 1989)

According to David C McClelland and many other social scientists, entrepreneurs have been found to possess a relatively higher level of achievement orientation than other professionals McClelland developed a theory of needs of which the need for achievement was one He described this need as the drive to excel, to achieve in relation to a set of standards and to strive

to succeed He argued that the presence of a specific motivational structure, the desire to achieve, purely for the sake of achievement i.e the `achievement motivation' is of critical importance to successful entrepreneurship (McClelland, 1962)

McClelland differentiates ‘high achievers’ from ‘low achievers’ on the basis of certain characteristics According to him high achievers set moderately challenging goals for themselves – tasks of intermediate difficulty and those where the probability of success is 0-5.They are not gamblers and they dislike succeeding by chance High achievers also seek situations in which they can attain personal responsibility for the work performed by them They also want rapid feedback on their performance (McClelland, 1961)

To measure the achievement orientation of the respondents a scale was designed using statements based on the above-mentioned attributes of High Achievers as proposed by McClelland in his book “ The Achieving Society” The details of the scale are given in annexure The findings regarding this trait are presented in the Figure 13

As presented in Figure 13 almost half of the respondents i.e 49.5 percent of them have High level of Need for achievement and only a low 15.5 percent have low level of Achievement orientation This means that the overall level of need for achievement is relatively high among the respondents But there is a marked difference between the male and female respondents with respect to their level of this trait

Majority of the Male Respondents, i.e 54 percent of them have high level of achievement orientation whereas the majority of female respondents have medium level of Achievement orientation.Thus there seems to be quite a lot of variation in the achievement orientation between the Male and Female respondents This has also been statistically confirmed by the chi square results The likely reason for this difference was explained by analysing the level of family support as presented in the following section

Achievement Orientation and Perceived Family support

A person imbibes certain norms and values and the way of life practiced in a religion or society through his upbringing in the family Many sociologists have regarded family as the corner stone

of society "It forms the basic unit of social organization as in the society it's the responsibility of

family as a social organization to internalize the society's culture and hence structuring of human personalities" (Haralambos, 1992,).

Depth interviews conducted with a few female entrepreneurs during the preliminary investigation of the study had indicated that acceptance of their profession by the family seemed

to be an important precondition for them to opt for entrepreneurship At the same time it was also observed that the female entrepreneurs considered Moral and financial Support of the family as very important for them In the later stages a measurement of the levels of Family support received by the male as well as female respondents (as perceived by them) was undertaken The scale used for the measurement is described in the annexure The findings are presented in figure

14 It was observed that the female entrepreneurs were found to have received lower level of family support and this difference between Male and Female respondents is statistically significant

It was also observed that Family support and acceptance of their profession by the family is particularly important for females as 80 percent of the female respondents said that they would not have opted for entrepreneurship if their family had not agreed with their idea of becoming an entrepreneur Amongst the males only 55 percent had given this response

From the above discussions an indirect inference may be drawn regarding the reasons for relatively lower level of achievement orientation among female entrepreneurs Females probably

do not aspire for more and more professional success or achievement because they are not assured of getting the required support from the family

Managerial Skills

Managerial skills are also a very important trait of entrepreneurs Managerial skills are required for ensuring smooth operations of the firm, effective planning, successfully coping with competition and for long-term survival and growth of an enterprise These skills of the respondents were measured with the help of a specially designed scale using Robert Katz’s

classification of various types of managerial Skills (Katz, 1974) According to Katz there are

three types of managerial skills, technical, human and conceptual skills The measurement is explained in the annexure The skill level was categorized into three major categories as high, medium and low The findings regarding the levels of managerial Skills is presented in Figure

15 As presented in Figure 15 in case of this important skill required of entrepreneurs one finds that more than half of the respondents i.e 51.5 percent of them possess High level of Managerial skills Once again we can observe marked differences between the male and female respondents with respect to the levels of these skills among them Female respondents have been found to possess lower levels of this skill

The low level of managerial skills among Indian women, especially conceptual skills and technical skills like inventory management etc., may be attributed to lack of entrepreneurial training, and lack of awareness due to poor networking ability and staying indoors most of the time