a study on experiences of indian entrepreneurial

A STUDY ON EXPERIENCES OF INDIAN ENTREPRENEURIAL COMMUNITIES 1

VISHNU A. PATANKAR, 2NIKHIL K. MEHTA

1

Research Scholar (NITIE, Mumbai), 2Associate Professor (NITIE, Mumbai) E-mail: [email protected], [email protected]

Abstract— Max Weber and many western scholars criticized Hindu social systems and hold responsible for hindrances in Indian economic progress. However, the various Indian communities maintained the legacy of entrepreneurship and impression of their footprint left over on the Indian economy. This research manuscript aims to understand, are there any inter or intra differences in the way the entrepreneurs from different community of India approaches business? Are there any inter or intra differences in their entrepreneurial orientations (EOs) and what is the impact of socio-psychological antecedents viz. personal values and perceived entrepreneurial environment on their EOs. India's planned economy is exhibiting remarkable economic development. Like traditional form of Marwari-Gujarati entrepreneurship other Indian communities are also emerging in modern version of technological entrepreneurship. This study tries to identify the challenges facing by these communities and by its comparison their strengths and weaknesses. Index Terms— Entrepreneurial orientation, Personal values, Entrepreneurial Community

I. INTRODUCTION

II. REVIEW OF LITERATURE

Incredible India is one of the fastest developing countries in the world known for her vibrant cultures, customs, and diversity. India embodies entrepreneurs coming from several communities like Banias, Marwaris, Chettiars, Guajarati, Punjabis, Sindhis, Boharies, Shettys have been very prominent Indian entrepreneurial communities who have established their benchmark. Each community has its own environment which may affect the way its member think, feel, and interact socially.

The word entrepreneurship has been perceived differently since "entreprendre" got defined as connotation to do something, during last eight hundred years [1]. Meaning of the word 'entrepreneur' was transformed from "manager of the public musical company" [2] to "innovative & creative" ([3]-[4]), "risk manager" ([5]-[7]), "venture creator" [8], "Dynamo of economic system" ([9]-[10]) "resource manager" ([11]-[13]). Entrepreneurship is the ability to create and build something from practically nothing. It is a knack of sensing opportunity where others see chaos, contradiction and confusion [14].

These interactions creates specific settings in these communities exist. Entrepreneurs hence operate either in their natural settings or create new settings in which they can contribute and yield profits. In very short time span, Indian economy transformed from agricultural to industry-service oriented economy as entrepreneurship grew. Banias, Marwaris, Parsis, Chettiars, Gujaratis are the major to start industrial entrepreneurship in India. Other Indian communities also started following the entrepreneurial trends set by these communities and enter into the small scale sector. Nowadays, small scale sector played a vital role in developing the Indian economy.

It is an attitude of mind to seek opportunities, take calculated risks and derive benefits by setting up a venture. It comprises of numerous activities involved in conception, creation and running an enterprise. In the past review of literature on entrepreneurship establishes its association with several antecedents such as entrepreneurial traits, behavioral skills, orientations and have been found to be associated with entrepreneurial growth, performance, organizational strategies, entrepreneurial strategic posture (ESP), customers and marketing orientations [15].

The world Economic Forum summit held at Davos-Klosters discussed in depth about the progress made by Indian entrepreneurs in developing innovation and start-up culture in the country. The Indian government is also focusing on entrepreneurship development and appealing investors across the world to come to India and be part of the success story of Indian economy. This research paper tries to understand and learn from the experiences of various Indian entrepreneurial communities pursuing their businesses in the light of the global changes that are taking places in Indian economy.

In India a few communities with trading, money lending & financing background dominated in entrepreneurship [16]. Marwari, Gujarati, and Parsi communities are the dominant business communities in India [16]. About Parsis, though they are small in number but their entrepreneurial contribution to the country is enormous [17]. Other active communities also include the Punjabis, Chettiars, and Maharashtrians [17]. Marwari, from Rajasthan have the most geographically migrated business community; pursuing businesses all over the country controlling almost half the industrial assets [18].

Proceedings of 58th The IRES International Conference, London, United Kingdom, 18th-19th January 2017, ISBN: 978-93-86291-91-2 5

A Study on Experiences of Indian Entrepreneurial Communities

[19]. India has been characterized by religious diversity. Marwari, Gujarati and Parsis are leading entrepreneurial communities of India [17]. These communities collectively controlled 62 of the 100 largest companies in 1989. Punjabis, Chettiars, and Maharashtrians are among others active communities. These communities share their distinctive tenors. Gujaratis were traditionally traders with countries in the Middle East and East Africa. Parsis, from the small minority Zoroastrian community in India, and traditionally played the role of intermediaries with Europe. The Parsis of India are perhaps the world's smallest ethnic community whose entrepreneurial contribution to India has far exceeded their size in numbers . Marwari, a demographically small segment originally from the state of Rajasthan in western India, have been the most geographically spread business community, pursuing businesses all over the country. Das estimated that the Marwari controlled half the industrial assets of India [18]. The Chettiars the community from South India once upon a time were much bigger than the Marwari and the Parsis in terms of capital during pre-independence . These communities have contributed and brought some specific values in their entrepreneurial endeavor. In case of other Indian communities, the factors influencing entrepreneurship were found mostly in sociological, economical, cultural and psychological domain. In the present times, entrepreneurships research has move beyond big business to smaller firms, family business and network and diasporic community [21].

A. Entrepreneur & Entrepreneurship: As India has been characterized by social, cultural diversity and diversity of religions [19], it would be interesting to study how entrepreneurs coming from different entrepreneurial communities posit on necessary and sufficient conditions of business i.e. values, traits of entrepreneurs, perception of working entrepreneurial environment and entrepreneurial orientation. Based on these several definitions discussed above of entrepreneurship, the characteristics of entrepreneur include the followings:  Sensing and exploring opportunities,  innovativeness & creativity,  leadership and controlling qualities,  resource management  risk management,  strong achievement desires,  visionary thinking B. Entrepreneurship in Developing Countries: In any developing country entrepreneur is always at the centre of the economic development process and s/he has to play a major role in it. Bamfo in his dissertation indentified government of developing nation, education, financial institutions and entrepreneurs as main stakeholders of the entrepreneurship development [20].

D. Role of Personal Values in Entrepreneurship Values represent an individual's standard or ideal about what a person object even or activities ought to and affect one's attitude [22]. Role of personal values in entrepreneurship have received little attention [23]. Understanding personal values as drivers behind businessman's choice of success criteria has importance on health, well-being and profit [24]. Values regulate and guide human behaviour and action in our day-to-day life. Values are embedded in every word we select and speak, what we were, way in which we interact, our perception and interpretation of others reactions in what we are, say and or so on .

Figure 1: The Entrepreneurship Triangle: Source: Modified from [20]

Among developing countries India has always been compared to China, whether in terms of population, economics and entrepreneurial development. China has been requested to be far more involved in the lives of its citizens, and certainly far more intrusive with respect to civil liberties than India, but on the other hand, India is much more hostile to entrepreneurship compare to volume of its population. C. Entrepreneurship in Indian background India is known for its unique cultural dimensions which may have an impact on functioning of societies, groups, individual and businesses. Cultural practices and people's aspirations are influence by the religion

Values are formed on the basis of interacts, choices, needs desires and preferences. These comprise the nuclei of values formation. Values have selective or directional quality. Vitell et. al., in their study concluded that personal characteristics (values and beliefs) play an important role in ethical decision making in business [25]. Vinson et. al., while, analyzing the role of personal values in marketing and consumer behaviour explained the personal values in different point of views [23]. An anthropologist sees the values in life style and cultural patterns of the people. A sociologist focuses on ideologies and


A Study on Experiences of Indian Entrepreneurial Communities

customs, whereas psychologist examines it as attitude and motives standpoint. Values direct our thoughts and action [26]. Rokeach defined values as, "multifaceted standards that guide conduct in a variety of ways" [27]. Values lead us to take particular positions on social issues and they predispose us to favours one ideology over another. To review ourselves and others values are used standards. Lin studied entrepreneurial behaviour and characterized entrepreneurial behaviour at three levels highlighting entrepreneur's values and important dimensions [12]. Entrepreneurs' values play an important role in the business. Halis et. al., studied the personal features of entrepreneur and posited that values are the motivators and driving factors in entrepreneurial decisions [28]. Martin & Cullen in their Meta analytical study posited that personal belief and values constitute the one's moral reasoning and decision criteria [29].

these entrepreneurs belonging to the different communities. IV. RESEARCH METHODOLOGY An open-ended questionnaire shown in Table 1 was administered on small entrepreneurs from nearby industrial area and business premises of Mumbai city. The micro and small entrepreneurs, who are involved in various business activities like hotel, pharmacy-medical store, jewellery manufacturer and traders, grocery store, automobile stores etc., were interviewed. This questionnaire basically tries to identify the perceptions of entrepreneurs about the physical environment and to know how these entrepreneurs are facing challenges to sustain in the business. How the physical environment, their values, and abilities are helping them to develop innovativeness, risk ability and proactiveness to acquire the benefits of the market.

E. Entrepreneurial Orientation (EO) Entrepreneurial Orientation (EO) of an entrepreneur is psychological endowment which plays an important role in entrepreneurship development [30]. Miller reported that individual's entrepreneurial orientation and its' dimensions viz. innovativeness, proactivness and risk-taking ability may create an impact on entrepreneurial decision making [31]. Kreiser et. al., studied this psychometric properties of entrepreneurs and labeled it as entrepreneurial strategic posture (ESP) as degree of innovativeness, and risk ability of an entrepreneur's enable him/her to proactively take a strategic position in the business scenarios [32]. Aragon-Correa et. al., posited that EO plays major role in environmental strategy and it' practices [33], where Eggers et. al., pointed out that SME's characteristics can be distinguished with their EO and customer orientation [34]. A significant contribution has been made by numerous authors emphasizing on entrepreneurial orientation (EO) and linking it with growth, profitability and performance of SMEs ([7]-[8]; [35]). III.

Table 1: The Questionnaire used for Preliminary Qualitative Study

RESEARCH OBJECTIVES

This research paper specifically focuses on two of the communities, Marwari and Gujarati, which are well-known for their entrepreneurial knack and the other communities which are putting their efforts in entrepreneurial activities. This paper tries to identify what is the specialty about these established entrepreneurial communities? Secondly what triggers them to become successful entrepreneur, so that other upcoming communities can learn a lesson from these traditional entrepreneurial communities? The entrepreneurs from other communities are also included so that comparison can be made. Moreover, this article tries to understand how the entrepreneurial environment is perceived and the challenges faced by

The characteristics of the responses collected from various respondents are shown in following table-2. It distinguishes category of business, community of the respondents and gender.


A Study on Experiences of Indian Entrepreneurial Communities Table 2: The type of business, Communities and Gender of the Indian entrepreneurs

 Among these respondents Marwari & Gujarati were found equip with spring-board to jump further level of entrepreneurship. Probably community network, cohesiveness within community and entrepreneurial family background, entrepreneurial values inculcated from generation to generation may be helping Marwari and Gujarati entrepreneurs to be more successful and established. Other communities like South-Indian, North-Indian and Maharashtrian are to prepare on other fronts of entrepreneurial knack viz. networking, skill development and resilience while doing business.  Majority of the respondent replied that they have problem of finance except Marwaris. They always think due to lack of finance they are not able to do a business properly. Next to it, their main concern was lack of skilled manpower, then cut-throat competition. They have problem of adapting with technology changes too. But no one could reply for their own competitive advantages, their uniqueness, and abilities, innovativeness. They are just driving away with the environment. Prima Facie they feel the environment is good for business, but their expectations from government and their counterparts are more. For perceived environment we received mix responses. Some stated its’ a good, conducive environment for business while some said its' volatile, ups and downs.

The responses from 30 different micro and small entrepreneurs were interviewed with open-ended questions [36]. Their responses tabulated in four broad categories viz. their (i) perception about physical environment (ii) the ability to face the challenges, (iii) Values and emotions and (iv) entrepreneurial orientation i.e. innovativeness, risk taking ability and proactiveness. Base on these responses during the interview the following table 3 is created to distinguish the difference among various communities. V. DISCUSSIONS The table-3 distinguishes various influencing factors perceived by entrepreneurs from different communities. Based on this table 3 the following inferences are made:

Table 3: Indian Communities and differences among their entrepreneurial approaches

confused state of mind, one side they are not willing to pay to labor force well, but expect too much from them. No provisions were found to polish the skills of supporting staff

 During the entire process of interviewing these small entrepreneurs, researcher found lack of confidence among them. They are probably in


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also. Averse to invest in technology adoption, they want to quick fix improvisation to tackle life problems, very low on innovation, and developed unnecessary phobia that they cannot sustain in the front of big giant.  Particularly Muslims and Maharashtrians respondents showed that they were confused while answering to the question: "How do they take decision? Logically or emotionally". One of the respondent clearly stated that he was confused to answer this question. Others found that they deal with logics.  Across all the communities the respondents interviewed, the female participation in business found negligible. Out of these 30 entrepreneurs interviewed only two female entrepreneurs could found. While communicating with them their spouse's influence on their business also could be seen. This triggers to look into the gender biasness in entrepreneurship separately. India has to go miles all together to develop entrepreneurial culture in the country. India is following many successful policies of developed countries. Make in Germany was very old concept introduced and successfully implemented to develop Mittlestnd (SMEs/ Family let and ownership business) [37]. On these similar grounds India government also appealing and inviting world-wide entrepreneurs , dreaming for breakthrough innovation to be happened at every level of entrepreneurship [38], and other side their small and medium level entrepreneurs’ priorities are different. Entrepreneurs exhibits different values at different levels and very low on entrepreneurial orientation and emotional intelligence. In planned economy India is showing remarkable progress in the entrepreneurships. Most of the challenges are being faced by the entrepreneurs are in the area of finance, marketing, emerging technological changes, infrastructure, taxations, government policies etc. They are facing personal challenges viz. entrepreneurial values and community morale also. The severity is differing from community to community with reference to their ages and experiences in entrepreneurial endeavors. Further, in future study can focus on community values, culture and perceptions about entrepreneurial environment perceived by various entrepreneurs of different communities. As in this study there are only two female respondents, the gender biasness in entrepreneurship can also be studied. REFERENCES [1] Long, W., "The Meaning of Entrepreneurship", American Journal of Small Business, vol. 8 no. 2, pp. 47-59, Oct. 1983. [2] Oxford English Dictionary, 1897 [3] Hellstrom, T., Hellstrom, C. and Berglund, H., "The innovating self: exploring self among a group of


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