Entrepreneur culture and entrepreneur activities ... - IEEE Xplore

2010 International Conference on Education and Management Technology（ICEMT 2010）

Entrepreneur Culture and Entrepreneur Activities, Symbiotic Developments in Chinese Societies Ji Li

Xinran Wang

Department of Management Hong Kong Baptist University Hong Kong, P.R. China [email protected]

School of Management Lanzhou University Lanzhou, P.R. China [email protected]

School of Management Huazhong University of Science and Technology Wuhan, P.R. China

opportunities that arose out of these developments were largely not taken up by local or indigenous people in Southeast Asia but by the Chinese immigrants there. Today many scholars believe that this success of the Chinese immigrants can be partially explained by the Chinese entrepreneurship, including the value of risk-taking, frugality and the willingness to withstand hardship [6]. The activities and successes of these Chinese entrepreneurs have helped the forming of an entrepreneur culture in their hometowns in South China. This cultural value or belief has been influencing the entrepreneur activities in South China for decades, and can still explain many activities in the South China communities even today. For example, irrational and illegal emigration activities still exist in these South China communities. Young men and women are still paying the snakeheads tens of thousands of dollars to be smuggled abroad for very risky overseas ventures. Although their hometowns, after its over 30 years of Chinese economic reform, can often offer these people with more opportunities and better life than those foreign countries where these Chinese know neither the local culture nor the local language, these young people still risk their lives to venture abroad illegally

Abstract - In this paper, we study the interactions between entrepreneur culture and entrepreneur activities by focusing on the evolution of entrepreneurship among Oriental Chinese societies. It is argued that the evolutions of entrepreneurship at the societal level can be considered mainly institutional processes, i.e., the processes of systematic changes shaped by social institutions, rather than the blind or random processes suggested by the BVSR dogma from Donald T. Campbell. However, the current institutional theory has some difficulties in explaining this evolution because both entrepreneur culture and entrepreneur activities are evolving. In other words, while the culture influences entrepreneur activities, the culture itself is also changing. To explain these processes, we propose an institutional symbiosis perspective based on research findings from modern biology research. The paper concludes with a discussion on implications of this new perspective for the research and practice of entrepreneurship.

I. INTRODUCTION This paper studies the issue of entrepreneur culture and its interactions with the entrepreneur activities among Oriental Chinese societies. It deals with the issue by focusing on the evolution of entrepreneurship among Oriental Chinese societies.

Now the issue is how to explain the evolution of entrepreneurship in China. In this paper, we try to develop a new perspective that can address these questions more clearly while remains consistent with the basic definitions and assumptions of institutional theory. Below we first provide a brief review of the symbiosis theory in biology.

II. LITERATURE REVIEW A. The Evolution of Entrepreneur Culture in Chinese Societies Many scholars have studied Chinese entrepreneurship. For example, Hofstede (1980) attributed the existence of a large number of small firms in Hong Kong, Singapore and Taiwan to low Uncertainty Avoidance [1]. Other authors studying the development of overseas Chinese enterprises in Southeast Asia and other parts of the world revealed consistent findings [2-4]. Below we discuss the Chinese entrepreneurship in Southeast Asia as an example. The Chinese in Southeast Asia mainly came from Southern China provinces, such as Guangdong and Fujian. Large-scale migration from these provinces began in mid seventeen century [5] because of the war and other environmental changes in China. Eighteen century saw the Industrial Revolution in Europe, coupled with the opening of the Suez Canal in 1869, which accelerated the penetration of the western countries in Southeast Asia. These developments created huge market demands for labor and industrial materials in Southeast Asia. However, these

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Zhiqiang Liu & Pengcheng Zhang

B. Relevant Arguments of Symbiotic Theory The word symbiosis derived from the Greek meaning “live together.” Margulis defined symbiosis “as the intimate living together of two or more organisms, called symbionts, of different species” [7]. In other words, symbiosis is a permanent or long-lasting association between two or more different symbionts. The co-existing of symbionts explains the birth of many new organisms or species. For example, former microbial symbionts play a direct role in the development and differentiation of animal and plant cells and tissues [8]. According to Abmadijian and Paracer (1986), there can be three types of symbiosis, i.e., commensalisms, mutualism, and parasitism, which imply that symbionts may benefit from, be harmed by, or not be affected by their

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association [9]. Specifically, an association in which one symbiont benefits and the other is neither harmed nor benefited is called a commensalistic symbiosis. A partnership in which both symbionts benefit is a mutualistic symbiosis. And, finally, a relationship in which a symbiont receives nutrients at the expense of a host organism is a parasitic symbiosis. All three types of symbiosis differ from the relationship of competition in the sense that the symbionts are not competing for the same resources. The most significant contribution of symbiotic theory seems to be the so-called Gaia hypotheses [10,11]. Gaia, an old Greek name for planet, is defined as a biosphere or the sum of all the other living organisms, other than any arbitrarily chosen organism embedded in its environment at the Earth surface [12]. For understanding institutional evolutions, such as the evolution of societal culture, the Gaia hypotheses have at least two important points: First, scientists traditionally have considered the environment a product of geological and physico-chemical processes to which living organisms have to adapt or perish. Gaia hypotheses challenge this view by arguing that the composition of the atmosphere, sediments, and aquatic environments is controlled by living organisms in their interactions with the environment. Present levels of atmospheric oxygen, carbon dioxide, and nitrogen and temperature ranges are products of life mechanisms. Accordingly, in the broadest sense, there is a coevolution of life forms the environmental conditions and each depends on the other for its existence and maintenance [13]. In social science, authors traditionally also viewed a given societal culture, such as entrepreneur culture, only as an independent environmental factor influencing individual and organizational behaviors. Applying the view of Gaia hypotheses, it is arguable that the societal culture actually persists in processes of interaction and co-evolution with individuals and organizations. “All beings influence the lives of others.” [13]. In other words, the societal culture is also influenced by actions of individuals and organization in its society. Because of the continuing evolution in human societies, the evolution of entrepreneur culture is understandable. Second, on the issue of selection and persistence of organisms or species, the Gaia hypotheses also make an important contribution. Traditionally, when explaining why some species die and some survive, evolutionists normally attribute their findings to environmental selection arguing that the fittest survive. However, what does “fit” really mean? Similarly, in studying the evolution of social institutions, including societal culture, authors normally adopt the same approach by asserting that an institution persists because it has legitimacy, and a certain institution is abandoned because it lost legitimacy. However, what does “legitimacy” really mean? Who or what decide this legitimacy? The existing literature has different opinions on these issues, but it remains unclear which of the opinions is more appropriate. Based on symbiosis theory, the Gaia hypotheses provide a new interpretation of fit or legitimacy --- Gaia

decides this legitimacy. Specifically, with continuing interactions and co-evolutions among all living beings relevant, Gaia is a self-regulating system determining what organism or institution is “fit” or “legitimate.” Relying on dynamic processes of interactions and selections, Gaia maintains itself as a persistent entity. Accordingly to this perspective, the fit or legitimacy of an institution is not decided by any single party, single environmental factor or single external movement. It is the Gaia, the sum of all the other institutions, other individual and organizational actors, that determines the fit/legitimacy of this institution. Gaia plays this role so that Gaia itself can persist as a self-balancing and self-maintaining system. Symbiotic theory has been supported by increased evidence of biological partnerships or associations. The importance of these partnerships or associations has frequently been overlooked in both natural and social sciences. This importance, measured by how much it increases or decreases the probability of survival of the partners involved, varies with a number of factors. In biological evolution, for example, it varies with genetic constitution, ecological setting, and other changing conditions [14]. In social science, however, it remains an interesting question for future research. In summary, according to symbiotic theory in biology, changes of organisms or institutions are not merely gradual processes based on random changes in the genetic code in light of natural selection and competition for resources, as suggested by neo-Darwinianism. It is not just a reaction to or a result from any single external movement/factor either. Continuing changes within an organism or a given institution, often through symbioses, are the real motor or force leading to evolutions or fast changes among living beings. Any given external movement/factor, on the other hand, can function only as part of a Gaia system helping to decide what species, being they pre-existing ones or the new ones, can persist and reproduce, and how they do so. III. A PERSPECTIVE OF ENTREPRENEUR SYMBIOSIS Based on the symbiosis theory, a new perspective about the evolution of entrepreneurship at the society or community level can be proposed. First, this new perspective emphasizes the strength of symbiosis as a force of evolution, which undermines the past notion of entrepreneur culture as something fixed and stable. According to the theory, all living things and their activities, including entrepreneur culture, persist through continuing evolutions and reproductions. Only those that pass the selection of Gaia, i.e., the biosphere or sum of all other interacting factors and conditions, can survive and reproduce. In the selection processes, one can observe more symbioses than competitions. Moreover, this symbiotic perspective stresses that human mind and human body cannot be separated, both of which are only part of the unified process of life [13]. Accordingly, entrepreneur culture, as part of the social institutions that cannot be separated from human-minds, can evolve or change following the same law or pattern

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identified by symbiotic theory. In other words, because social institutions, including entrepreneur culture, are structures or entities inseparable from human beings, we can see institutions as a kind of special organisms living in human minds symbiotically. These institutions, including societal culture, persist in a process of continuing reproduction and evolution. And Gaia, i.e., the biosphere in a given human society, decides the fit or legitimacy of a new version or a reproduction of entrepreneurship. In other words, Gaia, in a process of self-balancing and self-maintaining, can decide whether an institution has means of extracting resources, such as attention, compliance and adoption, from people. It is the forces of interaction, self-balancing and self maintaining in Gaia system that decide whether a give entrepreneur culture can be preserved and be passed from one generation of human being to another. In summary, according to this perspective of entrepreneur symbiosis, entrepreneur culture persists through continuing reproductions and evolutions, often characterized by symbioses, in light of the selection of Gaia. Take the evolution of Chinese entrepreneurship as an example. Based on some traditional viewpoints of institutional theory, the creation of the Chinese entrepreneurship is difficult to explain given the institutions existed in China traditionally. Specifically, the traditional Chinese cultural values, such as Confucianism, do not encourage people to venture overseas. According to this value, when one parents are still alive, this person should avoid traveling far away, and should stay close to the parents so as to take care of them. Consistent with the value, the Chinese governments did not want their people venture abroad either because it might threat their security and source of revenue. Therefore, historically, those who traveled outside China risked official prosecution. Legislation to discourage emigration existed as early as Tang dynasty (618 to 906 A.D.), continuing to many successive dynasties. The criminal law of the Manchus (Qing dynasty) not only prohibited emigration, but also imposed an immediate death sentence on Chinese who tried to return secretly, which was in effect until 1891 [6]. Given all these pre-existing institutions, the Chinese entrepreneurship was formed by integrating new cultural values from the European colonists or business people. Since Tang dynasty (618 C.E), the Southern China province According to this value, when one been the centre of China foreign trade [15]. The foreign and local merchants were able to achieve status through overseas ventures, which set examples for the local public and formed an institutional belief, during a process lasting hundreds of years, about the value of overseas ventures. It is the integration of this new value with the traditional Chinese culture that formed the Chinese entrepreneurship in Southern China provinces. However, as suggested above, this Chinese entrepreneurship is never static and stable. As a social institution in human minds, this Chinese entrepreneurship is actually evolving differently in different Oriental Chinese societies. In Singapore, for example, because of the great efforts by the Singapore government (such as the promotion of Confucian value), more cultural elements were integrated

or re-integrated into the entrepreneur culture in that society. As mentioned above, these elements include large Power Distance and Uncertainty Avoidance [16]. As a result of this re-integration, the entrepreneur culture in Singapore changed and the level of entrepreneur activities has been greatly reduced. Accordingly, we can propose, Proposition 1: Entrepreneurship is malleable in symbiosis processes by which it merges and re-merges with cultural elements from foreign societies or other sources. Also, according to this perspective, the real motor of evolution are not from outside but from within, i.e., from within human minds. Human minds can be seen as entities consisting of different cultural values or elements symbiotically. Different combination of cultural elements explains different types of entrepreneurship. For example, as mentioned above, symbiosis theory has identified three types of symbiosis, i.e., commensalisms, mutualism, and parasitism. They imply that symbionts may benefit from, be harmed by, or not be affected by their association. According to this identification, we can explain three types of entrepreneur activities. First, commensalisms of entrepreneurship can be found among entrepreneurs with a high level of collectivistic cultural values, such as those in Chinatowns throughout the world. In a given Chinatown, for example, one can observe many entrepreneur firms that co-exist without competing against each other for resources, such as a Chinese grocery store or a dry-washer operating next door to a Chinese restaurant. The combination of these activities or elements are often considered a single entity, i.e., the Chinese entrepreneurship. We can name the entrepreneurs that operate based on this relationship as commensalistic entrepreneurs. It is arguable that the emphasis on family and kinship value may help explain the forming of these entrepreneurs and the existence of Chinatowns throughout the world. Proposition 2: The more the cultural elements of collectivism, such as family or kinship value, in a given entrepreneur culture, the more likely the development of commensalistic entrepreneurs. Second, the mutualism of entrepreneurship is likely to be found in an entrepreneur culture emphasizing innovation and creativity. A typical example of mutualism is the interdependency between Microsoft and IBM when Bill Gates just started his venture. For Chinese entrepreneurs in Southeast, their relationship with the large firms set up by western colonialists in Southeast Asia can also be considered mutualism. We can name the entrepreneurs that operate based on this relationship as mutualistic entrepreneurs. As Aldrich and Kenworthy (1999) suggested, it requires creativity and innovation to identify opportunities for mutualistic entrepreneurship [17]. Accordingly, we propose,

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Proposition 3: The more the elements of innovation and creativity in a given entrepreneur culture, the more likely the development of mutualistic entrepreneurs.

IV. DISCUSSION AND IMPLICATIONS In summary, the change and evolution of Chinese entrepreneurship at the community or society level can be seen as a result of symbiotic processes. The creation and persistence of a new version of entrepreneurship depends on whether it can extract resources for the perpetuation of its own form, such as attentions, reproduction and compliance. Here the critical factor is the selection of Gaia, which is a self-balancing and self-maintaining system that selects a given institution for the persistence of the system itself. If an institution can pass the selection of Gaia, it will be preserved, otherwise it will discontinue. It should be emphasized again that, although entrepreneurship is not a piece of living organism, it cannot survive independently from living organisms, i.e., human beings. Societal entrepreneurship, and societal institutions as a whole, should persist in the mind of human being. And the theory of symbiosis suggests that we cannot separate human mind from human activities in studying human entrepreneurship. Entrepreneur culture and related activities are in the same process of co-evolution like living organisms. Based on this perspective, we believe that some authors today overly emphasized the effects of competition in studying. Moreover, by proposing that the motor of entrepreneur evolution is not from outside but from inside, this symbiosis perspective defend the consistency and basic assumptions of institutional theory. In recent years, some authors still attribute institutional change to environmental changes, which has been criticized by many authors. For example, DiMaggio (1988: 12) argued that attributing change to exogenous forces relegates institutional theory to explaining how successfully institutional practices diffuse and reproduce [20]. Scott (1994) pointed out further, “The mechanical metaphor of levels is misleading. Institutional environments are in organizations and inside individuals. How can our causal arguments and our statistical methods accommodate this more complex version of interdependence? ” [21]. Considering these comments, one can see that the perspective of entrepreneur symbiosis is helpful in explaining institutional evolution, including the evolution of entrepreneurship at the societal or community level. For example, with this symbiosis perspective, the differences in entrepreneur culture among the Oriental Chinese societies can be explained. Past research often attributed cultural change or evolution to some environmental movements, such as technological, social and economical developments. This approach cannot explain why, sharing similar historical and cultural heritages, and adopting similar technological resources, the entrepreneur cultures and related activities in Hong Kong, Taiwan and Singapore evolve in different directions. Based on perspective of symbiosis, we can attribute the differences to the fact that societal cultures in these societies merge with different new elements from Western societies and re-assemble the pre-existing elements in different ways. For example, in the societal culture in Hong Kong, one can

Finally, the parasitism of entrepreneurship is likely to be found in an entrepreneur culture with little elements of risk-avoidance and law-respect. An example of parasitism is the activity of an entrepreneur survives and succeeds by bribery of government official so that the firm can obtain some important resource, such as government orders or projects, or, avoid paying taxes or government fees. In recent years, a large proportion of corruption or fraud cases among government officials in China can be attributed to this kind of entrepreneur activities. Although the entrepreneur firm here does not compete for resources with the government or state-controlled firms, it is operating at the expense of the government or government firms. Lack of elements of risk-avoidance and law-respect in an entrepreneur culture is arguably an important reason explaining the forming of this kind of entrepreneur firms. As a society with a long history of “fief”culture [18], there exists a cultural tradition of disrespecting law and risk-taking among Chinese entrepreneurs. The saying that “heaven is high and the emperor is far far away”, as cited by Boisot and Child (1988: 512) when studying the cultural characteristic in China, actually reflects a great disrespect to government laws and regulations [18]. And this cultural element or belief still exists in the minds of many Chinese entrepreneurs even today. Accordingly, it is proposed, Proposition 4. The less the cultural elements of uncertainty avoidance and law-respect, the more likely the development of parasitistic entrepreneurs. Finally, symbioses produce new organisms as well as new institutions, including new entrepreneurship. Just as teamwork of different organisms enables life to spread on Earth [19], teamwork allows institutions, including new forms of entrepreneurship, to evolve and spread in human societies. In other words, the innovation or creation of new entrepreneurship can often result from an integration or re-integration between the pre-existing elements and new elements. Different from the case of a slow entrepreneur evolution or a RVSR cycle over a long period of time, new entrepreneurship or entrepreneur firms can emerge in a very short period of time through symbiosis. One example is those successful Chinese internet firms whose stocks are listed in New York Stock Exchange today. The creation and success of this entrepreneurship did not involve a long period of evolution. It is the integration of Chinese entrepreneur culture and the Western internet culture that created this new form of entrepreneurship in China almost overnight. Therefore, we propose, Proposition 5: Through symbiosis, new forms of entrepreneurship can emerge and succeed almost overnight without a long period of evolution or BVSR cycles.

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see more elements of the British institutions. In Singapore, one can find fewer elements of British institutions but more traditional Confucian cultural values, which has been promoted hard by the local government in recent years.

developments in many relevant areas, such as institutional change and organizational change. REFERENCES1 [1]. [2].

V. IMPLICATIONS The perspective of entrepreneur symbiosis has some important implications: For researchers, this perspective suggests the need to deal with the issues of entrepreneur culture with a more dynamic, more comprehensive and more timely approach. First, we need a more dynamic approach. The relationship between entrepreneurs culture and related activities needs to be addressed not only from the dominant institutional perspective of that studying the effects of institutions, including entrepreneur culture, on entrepreneur activities, but also from a symbiosis perspective that examines entrepreneur culture as a dependent variable which is evolving and influenced by entrepreneur activities with the selection function of Gaia system. This approach will improve our understanding on the evolution of entrepreneurship. Just as the cases in biology and ecology where evolutionary processes cannot be fully understood until the close interactions between organisms are understood [22], the evolutionary processes of societal culture entrepreneurship cannot be understood either without symbiotic relationships between the culture and the activities. Without this symbiotic perspective, it would be difficult to explain the important differences in the evolution of entrepreneurship across different Oriental Chinese societies. Second, we also need to have a more comprehensive understanding on the change or evolution of entrepreneurship. While past research has often attributed cultural changes to factors or processes at a micro level. Accordingly, examining societal culture and its effects should entail a more comprehensive approach that considers all major factors as well as major interactions in the whole Gaia system. In addition, we also need a more timely approach to cross-cultural approach. As a result of symbiotic processes, the change of societal cultures can take place in a short period of time rather than in a long period of evolution. Because of these fast changes, cross-cultural research faces a new challenge—the dated data. Finally, most importantly, it would be interesting to study how a Gaia system is re-balancing or self-maintaining given an institutional change. When a government initiates an institutional change artificially, for example, it may pay attention to some direct and short-term effects of this change only, and the results of re-balancing and self-maintaining by the Gaia system are often overlooked. However, as a result of re-balancing in the Gaia system, some important cultural values in the overseas Chinese community, such as entrepreneurship and self-reliance, decreased in the society. In other words, with an artificial insertion or enhancement of a cultural element into the Gaia system, there was a rebalancing or self-maintaining of the whole cultural system in the Singapore society. Studying the self-balancing or self-maintaining by the Gaia system should help theoretical

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Hofstede, G. “Culture’s consequences: international differences in work-related values” 1980. London: Sage Publications, Inc. Godley, M. “The Mandarin-capitalists from Nanyang: overseas Chinese enterprise in the Modernisation of China” 1981. Cambridge: Cambridge University Press.

A complete reference list is available from the authors.