Female Entrepreneurship : A Research Agenda 9781845441241, 9781845447366

Citation preview

Volume 11 Number 2, 2005

ISSN 1355-2554

ISBN 1-84544-124-9

International Journal of

Entrepreneurial Behaviour & Research Female entrepreneurship – a research agenda Guest Editors Pauric McGowan and Colette Henry

International Journal of Entrepreneurial Behaviour & Research

ISSN 1355-2554 Volume 11 Number 2 2005

Female entrepreneurship – a research agenda Guest Editors Pauric McGowan and Colette Henry

Introduction ______________________________________

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Following the pathway of female entrepreneurs: a six-country investigation Emma McClelland, Janine Swail, Jim Bell and Patrick Ibbotson _________

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Entrepreneurial women and private capital: the New Zealand perspective Anne de Bruin and Susan Flint-Hartle _____________________________

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Biological sex, stereotypical sex-roles, and SME owner characteristics John Watson and Rick Newby ____________________________________

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Barriers to women achieving their entrepreneurial potential: women and risk Clare Brindley _________________________________________________

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No gender in cyberspace? Empowering entrepreneurship and innovation in female-run ICT small firms Lynn M. Martin and Len Tiu Wright ______________________________

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Book reviews_____________________________________

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CONTENTS

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Introduction Female entrepreneurship – a research agenda About the Guest Editors Pauric McGowan is the Director of the Northern Ireland Centre for Entrepreneurship (NICENT), based at the University of Ulster, Newtownabbey, Co. Antrim, Northern Ireland and a Senior Lecturer in Marketing and Entrepreneurship. He is responsible for the embedding of entrepreneurship in the curriculum of the University, particularly in faculties of Science, Informatics and Engineering. His research interests lie in the area of strategic marketing decision making in entrepreneurial firms and the role of networked relationships. Current research projects focus on “buyer-supplier relationships”, “networks in technology clusters”, “understanding knowledge processes in new technology based firms” and “the dynamics of networks utilised by male and female entrepreneurs”. He has lectured in the area of strategic marketing and entrepreneurship, published widely on the subject in many international journals, and has presented papers on the topic at research conferences in Europe and America. He is a member of the editorial boards of four international journals addressing issues of “entrepreneurship” and “enterprise development” and is a member of the MCB Literati Club. He is a co-author of an international text on marketing and entrepreneurship in SMEs, published by Prentice-Hall. He is a member of the Marketing Institute of Ireland. Prior to joining the University of Ulster, Pauric worked in education management, small business development, as a practitioner and as a business counselor, and in marketing consultancy. Colette Henry is the Head of Department of Business Studies at Dundalk Institute of Technology, Dundalk, Co. Louth, Ireland, where she is also Director of the Centre for Entrepreneurship Research. Colette is responsible for the development of both undergraduate and postgraduate courses within the Business Studies Department, and she is also course director for the Institute’s MBA and MBS programmes. Her research interests are in entrepreneurship education and training; enterprise programme design and evaluation, and female entrepreneurship, particularly the aspiring female entrepreneur growth perspective. She has published widely in these areas and has recently authored a research monograph (published by Ashgate, UK) on the topic of entrepreneurship education and training, with colleagues from Queen’s University Belfast. She is currently co-editing a new book on female entrepreneurship which is due to be published by Routledge later this year, and will also contribute to another female entrepreneurship text with international colleagues, to be published by Edward Elgar. Her other current research interests include entrepreneurship in the creative industry sector and entrepreneurial characteristics of firms in the software and bio-technology sectors. Colette is the Irish representative for the International DIANA project, as well as the European ELFE and ProWomEn projects, and the director of FemEnt.com – a new independent web-based research resource for those researching, teaching and promoting female entrepreneurship. Prior to her academic career, Colette worked in an industrial liaison role, supporting and advising aspiring entrepreneurs; as a commercial trader in the minerals and metals industry in Brussels, and also in sales and marketing roles in the leisure and textiles industries in Northern Ireland.

International Journal of Entrepreneurial Behaviour & Research Vol. 11 No. 2, 2005 pp. 80-83 q Emerald Group Publishing Limited 1355-2554

Over the last number of years, the promotion of female entrepreneurship has become a key area of debate among academics, policy makers and support agencies. This special issue on female entrepreneurship represents a significant contribution to the field, and is the first edited collection of articles which seriously address the challenges that women face in new venturing and enterprise development.

Recent studies (see, for example, Langowitz, 2001) have revealed some interesting facts about female entrepreneurship, dispelling some of the myths about women in business, such as the long-held notion that most women who start a business are motivated to do so by their desire to break through the glass ceiling. Such traditional beliefs are not only unfounded, but there is now evidence to show that female entrepreneurs are setting up and running the so-called new economy companies, with success in the high-technology and professional services sectors, as well as in other non-traditional (for women) businesses, such as construction and auto retail. Research has also shown that women-led businesses have strong growth aspirations, are customer oriented, value the human capital and cultural aspects of the business, and are geared towards financial performance. Women are also starting new business faster than their male counterparts, and in the USA today, female entrepreneurs are responsible for up to 38 per cent of all new businesses. However, elsewhere, figures are less impressive, with women accounting for between 7.5 per cent and 16 per cent of the entrepreneurial population in countries such as Greece (14 per cent); Austria (15 per cent); the UK (16 per cent); and Ireland (7.5 per cent)[1]. The contribution that female entrepreneurs can potentially make to any economy is significant and the importance of women as an untapped source of entrepreneurship is now widely accepted (Carter, 2000; GEM, 2001). However, the actual contribution that women make to the business sector was not fully recognised until the mid-1980s (Watkins and Watkins, 1984) when studies relating to gender-specific barriers (Hisrich and Brush, 1986), as well as comparisons with male entrepreneurs (Hisrich and O’Cinneide, 1985) started to appear in the literature. Since then, research into the female entrepreneurship phenomenon has broadened to focus on motivations and success factors (Moore and Buttner, 1997); characteristics and challenges (Langowitz, 2001); policy and support (Women’s Unit (UK) and Ministry of Industry, Employment and Communications (Sweden), 2001); management styles and characteristics (Mukhtar, 2002); theoretical constructs on women and self-employment (Marlow, 2002); networking (McGowan and McGeady, 2002); risk and performance (Watson and Robinson, 2003); barriers and development (Henry and Kennedy, 2003), and financing and growth strategies (Carter et al., 2003). By researching female entrepreneurs we can gain a better understanding of their particular background, motivation and needs, so that we are better positioned to fully exploit this largely untapped economic opportunity. The aim of this special issue is to challenge current thinking on the nature of female entrepreneurship and to contribute to ongoing debate in the area. As a consequence, we hope to not only inform the current female entrepreneurship research agenda, but also to influence its future direction. Thus, we have put together what we feel is a series of challenging research papers which deals with a range of pertinent and diverse topics. These contributions debate female entrepreneurship research at both national and international level; employ innovative quantitative and qualitative methodologies, and examine issues across different industry sectors and in different country contexts. Our first paper, by McClelland, Swail, Bell and Ibbotson, adopts an international perspective and deals with the growth and development of women-led businesses in six different countries. Key themes such as motivation to start-up and growth strategies, as well as gender issues and challenges faced by female entrepreneurs are discussed. By adopting an internet-based research methodology to collect data in

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chosen locations, the authors demonstrate threads of commonality between female entrepreneurs internationally. Using cross-national data rather than a single country perspective, the paper provides insights to the heterogeneous experiences of female entrepreneurs. In the second paper, de Bruin and Flint-Hartle explore the demand and supply perspectives of private capital for female entrepreneurs in New Zealand. The paper mitigates the research gap on growth finance for women-led businesses. Multiple approaches for data collection and analysis are adopted, including interviews, e-mail surveys and narrated experiences. The finding of the paper help to quantify the degree of women’s current participation in the venture capital industry in New Zealand, identifying key considerations in the investment decision making process. The third paper in this special issue, by Watson and Newby, debates the biological versus the stereotypical sex roles of SME owners. The data for this comprehensive study are drawn from a random sample of SME owner operators in Western Australia. The results of the research appear to confirm the belief that biological sex, i.e. male or female, may not be an appropriate discriminator when examining differences in the psychological attributes of SME owners. Rather the authors suggest that the use of stereotypical sex roles i.e. masculinity and femininity might prove more useful in future research of this nature. In the penultimate paper, Claire Brindley explores the barriers to women achieving their full entrepreneurial potential. Drawing on extant literature, and by dealing specifically with the issue of risk, the extent to which such barriers originate from structural or trait sources is discussed. The paper suggests that an understanding of the gender aspects of risk is required if policy measures are to be constructive in helping women entrepreneurs overcome barriers. By focusing on risk, the paper provides the foundations for a discussion on the potential policy measures that might encourage more women to behave entrepreneurially. The final paper we have selected for this special issue by Martin and Wright focuses on the specific context of women-led ICT enterprises. Using a qualitative research methodology comprising case studies and thematic grid analysis, the authors demonstrate the background of small firm development and innovation, as well as the significant contribution of personal networks and IT networking in securing critical strategic information and access to customers. The paper offers insights to the current challenges facing female entrepreneurs and, in particular, questions some of the constraints on ethnicity. The authors also acknowledge the strangely equalising role of technology in the overall economic contribution of female entrepreneurs. The edited collection of papers in this special issue is designed to challenge current thinking on female entrepreneurship by questioning some of the traditionally held beliefs and stereotypical views of women as entrepreneurs and as business owners, both nationally and internationally. In so doing, it is our intention to both contribute to and offer new dimensions on the current female entrepreneurship research agenda. Pauric McGowan NICENT, University of Ulster. E-mail: [email protected] Colette Henry Dundalk Institute of Technology, Dundalk. E-mail: [email protected]

Note 1. Some controversy over the actual level of female entrepreneurship in Ireland; disparities due mainly to the lack of gender desegregated statistics and the different ways in which the level is calculated. References Carter, N.M., Brush, C.G., Gatewood, E.J., Greene, P.G. and Hart, M.M. (2003), “Financing high-growth enterprise: is gender an issue?”, in The Centre for Economic Progress (Ed.), Critical Junctures in Women’s Economic Lives; A Collection of Symposium Papers, Minneapolis, MN, pp. 45-51. Carter, S. (2000), “Improving the numbers and performance of women-owned businesses: some implications for training and advisory services”, Journal of Education and Training, Vol. 42 No. 4/5, pp. 326-33. GEM (2001), Executive Report, Kauffman Centre for Entrepreneurial Leadership, Babson College, Babson Park, MA. Henry, C. and Kennedy, S. (2003), “In search of a new Celtic tiger: female entrepreneurship in Ireland”, in Butler, J.E. (Ed.), New Perspectives on Women Entrepreneurs, Research in Management and Entrepreneurship series, Vol. 3, Information Age Publishing, Hong Kong, pp. 203-24. Hisrich, R.D. and Brush, C.G. (1986), The Woman Entrepreneur: Starting, Financing and Managing a Successful New Business, Lexington Books, Lexington, MA. Hisrich, R.D. and O’Cinneide, B. (1985), “The Irish entrepreneur: characteristics, problems and future success”, working paper, University of Limerick, Limerick. Langowitz, N. (2002), The Top Women-led Businesses in Massachusetts: 2002 Results, Centre for Women’s Leadership, Babson College, Babson Park, MA. McGowan, P. and McGeady, C. (2002), “An investigation of networking practices of female entrepreneurs as an aid to their efforts to create and sustain new ventures”, Proceedings of the Promoting Female Entrepreneurship Conference, Dundalk Institute of Technology, Dundalk, November. Marlow, S. (2002), “Women and self-employment: a part of or apart from theoretical construct?”, International Journal of Entrepreneurship and Innovation, Vol. 3 No. 2, pp. 83-93. Moore, D.P. and Buttner, E.H. (1997), Women Entrepreneurs: Moving beyond the Glass Ceiling, Sage, Newbury Park, CA. Mukhtar, S.M. (2002), “Differences in male and female management characteristics: a study of owner-manager businesses”, Small Business Economics, Vol. 18 No. 4, pp. 289-311. Watkins, J. and Watkins, D. (1984), “The female entrepreneur: background and determinants of business choice: some British data”, International Small Business Journal, Vol. 2 No. 4, pp. 21-31. Watson, J. and Robinson, S. (2003), “Adjusting for risk in comparing the performance of maleand female-controlled SMEs”, Journal of Business Venturing, Vol. 18 No. 6, pp. 773-88. Women’s Unit (UK) and Ministry of Industry, Employment and Communications (Sweden) (2001), Women as Entrepreneurs in Sweden and the UK, Cabinet Office, London.

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The current issue and full text archive of this journal is available at www.emeraldinsight.com/1355-2554.htm

Following the pathway of female entrepreneurs A six-country investigation

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Emma McClelland and Janine Swail School of Business, Retail and Financial Services, University of Ulster, Coleraine, UK

Jim Bell School of International Business, University of Ulster, Coleraine, UK, and

Patrick Ibbotson School of Business, Retail and Financial Services, University of Ulster, Coleraine, UK Abstract

International Journal of Entrepreneurial Behaviour & Research Vol. 11 No. 2, 2005 pp. 84-107 q Emerald Group Publishing Limited 1355-2554 DOI 10.1108/13552550510590527

Purpose – There has been increased policy and research interest in the growing number of female entrepreneurs and their potential contribution to both the local and global economy. Nevertheless, the extant literature on female entrepreneurship is often limited to the start-up phase of business. An important gap in the literature is an enquiry into the development of these female-owned organisations from inception to maturity, and their growth in domestic and/or international markets. This paper therefore aims to address key themes such as motivation to start-up, growing the business, gender issues and the challenges faced by these women. Design/methodology/approach – An innovative, internet-based methodology was employed to collect the data in the chosen locations. Using internet resources such as online media, company web sites and other pertinent sites, a significant volume of information was gathered. Any information gaps or issues requiring further clarification were then addressed via e-mail exchanges with the individual entrepreneur. Findings – Initial findings demonstrate threads of commonality between female entrepreneurs in different countries. It also highlights differences in the experiences of these women, not only across countries but also within certain countries. A comprehensive discussion of these findings is contained in the paper. Research limitations/implications – This research has highlighted a number of issues which merit further investigation; however, the issue of social responsibility within this sample of female entrepreneurs would indicate that women have much more socially-oriented motives for starting and developing a business. The authors would like to investigate this further using qualitative investigation of a larger sample within one country before drawing any definitive conclusions. Originality/value – Given a limited understanding of such issues mentioned above, this contribution seeks to provide an insight into the heterogeneous experiences of female entrepreneurs using cross-national data rather than a one-country study. Keywords Women, Entrepreneurs, Business formation, Business development, Cross-cultural studies, International business Paper type Research paper

Introduction The global outlook for female entrepreneurs has never been more encouraging (Riebe, 2003). Internationally, one in ten women is self-employed, and it is estimated that

women own and manage up to one third of all businesses in developed countries. Nelton (1998) regarded this growth of female entrepreneurship since the 1970s (from 5 per cent to 38 per cent in 30 years, Hisrich et al., 1997) as one of the most significant, yet quietest, revolutions of our time. In addition, it is evident that the entrepreneurial activity of these female entrepreneurs is making a distinct difference in their communities and economies, in both the developed and developing countries. Yet despite the growing number of female entrepreneurs: . . . we know surprisingly little about women entrepreneurs’ business practices, survival and growth strategies, and their perceptions of their entrepreneurial careers (Starr and Yudkin, 1996).

In addition, despite the extent of female entrepreneurs involvement in new business formation, “the economic impact of women led businesses has been down-played” (Carter et al., 2002): Female entrepreneurship is an under-researched area with tremendous economic potential and one that requires special attention (Henry, 2002).

This paper, therefore, endeavours to address these issues through a six-country study of female entrepreneurs. It examines both the start-up and growth of these entrepreneurial firms and aims to provide insight to this under-researched area. Overview of literature Motivations for start-up Addressing the entrepreneur’s personal motivations for initiating start-up activities has received significant attention in the entrepreneurial literature (Carter, 2000a,b) and is considered one of the key components for entrepreneurial success (Timmons and Spinelli, 2003). The literature often reveals various “push” and “pull” factors as motivators for business start-up (Alstete, 2002) or alternatively negative and positive factors as discussed by Deakins and Whittam (2000). The “push” or negative factors are associated with the necessity factors that force the female into pursuing her business idea. These can be redundancy, unemployment, frustration with previous employment, the need to earn a reasonable living and a flexible work schedule, reflective of the family caring role that is still expected from women (Alstete, 2002; Orhan and Scott, 2001). Similarly, Welsh (1988) and Carter and Cannon (1988) found evidence of a “glass ceiling effect” that impede executive women from reaching more senior executive positions and thus pushes them from management positions into their own business. Consequently, Catley and Hamilton (1998) state that self-employment was in fact a last resort for some women involved in their study. Similarly, Deakins and Whittam (2000) emphasise that in this situation becoming an entrepreneur is not a first choice, but nevertheless argue that such negative, motivational factors are more important with entrepreneurs drawn from certain groups in society that may face discrimination, such as ethnic minority groups, younger age groups and women. Cromie (1987) in his comparative study of business start-up motivations among males and females suggests that men and women do differ in terms of the emphasis they attach to particular motives. Women in his sample were more dissatisfied with previous work

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experiences and saw self-employment as a means of catering for conflicting personal and work demands. Indeed, Fielden et al. (2003) emphasise that an overriding factor stated by those women with domestic responsibilities was the belief that business ownership appeared the only way that they could make a sustainable living around other family commitments. The “pull” or positive factors are those associated with factors of choice (Orhan and Scott, 2001) and the desire for entrepreneurial aspirations (Deakins and Whittam, 2000). These relate to independence, self-fulfilment, autonomy, self-achievement, being one’s own boss, using creative skills, doing enjoyable work, entrepreneurial drive and desire for wealth, social status and power (Alstete, 2002; Orhan and Scott, 2001; Schwartz, 1976). The need for independence and the challenge of business ownership are the most frequently quoted ‘pull’ motivators for women entrepreneurs (Simpson, 1991; Carter and Cannon, 1992). Furthermore, it has been suggested in the literature that women are motivated by the social contribution their business can make to society (Orhan and Scott, 2001). According to Still and Timms (2000a,b) women start their own businesses, with the objective of “making a difference,” which means being more client-focused than men (Brush, 1992), ethical in operations and making a social contribution in addition to pursuing economic motives. Rosa et al. (1996) further add that women do not enter business for financial gain, but to pursue intrinsic goals such as independence and flexibility to interface family and work commitments. Brush (1992) has advanced the “integrated perspective,’ the main premise of which was that many women business owners conceive of their businesses as a cooperative network of relationships rather than primarily as a separate profit-making entity. Background, education and experience A number of studies over the decades have attempted to develop typologies and profiles of the “typical” female entrepreneur (Hisrich and Brush, 1986; Goffee and Scase, 1985; Belcourt et al., 1991, cited in Grondin and Grondin, 1994), by studying her background, education and previous experience. Whilst these studies provide valuable descriptions of an entrepreneurial group who had been previously unobserved by the mainstream small-business research, it has to be emphasised that female entrepreneurs are not a homogeneous group (Carter, 2000a,b). However, Brush (1992) recognises that some demographic characteristics of women business owners are similar to those of men. For example, marital status (married), age (30-45), and birth order (first born) (Watkins and Watkins, 1984; Hisrich and Brush, 1983; Lee, 1996). According to Lee (1996), it has been recognised that first-born children have different values and attitudes than their siblings and are in fact more entrepreneurial. Statistics show that entrepreneurs tend to be the oldest children almost 70 per cent of the time. According to studies at Harvard and Columbia Universities, this can be attributed to the fact that the motivation to achieve is much higher among those born first (Mancuso, 2004). In reference to education it has been advocated that women have pursued undergraduate degrees in liberal arts as opposed to business, engineering or technical subjects (Watkins and Watkins, 1984; Hisrich and Brush, 1983). Similarly, with regard to previous work experience the literature highlights the predominance of women in the “traditional sectors” (i.e. service and retail) (Birley, 1989), teaching, office administration or secretarial areas (Hisrich and

Brush, 1983; Scott, 1986) rather than executive managerial, scientific or technical positions (Watkins and Watkins, 1984; Scott, 1986). Thus Birley (1989) argues that most women gain their first managerial experience in their own businesses and often lack many of the basic commercial networks associated with prior managerial employment.

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Growth There has been considerable academic attention paid to the development of models that seek to capture the nature of the organisational growth process and in particular, the distinct evolutionary stages (Poutziouris, 1993) from start-up to maturity. These include the Churchill and Lewis (1983) five-stage model which tracks the small firm from existence to maturity, the three-stages of growth model (Vozikis 1984) and the Gibb and Scott (1985) business development process model. Whilst this and other growth models are useful in that they simplify the complexities associated with small firm growth, there have been many criticisms of them and more importantly, very few of them are supported by empirical research (Burns, 2001). O’Gorman (2001) considers them to be inadequate for many reasons, namely, they assume a company must pass through all stages of development and do not allow for alternative growth paths such as skipping stages or progressing through the stages in a different order. He also proposes that these models fail to take into account the role of industry, technology and other situational variables which can alter or change the growth path significantly. A further underlying assumption in this type of research is that growth can be understood in gender-neutral terms, yet there is evidence to suggest that female entrepreneurs may perceive the need for growth differently than their male counterparts (Mitra, 2002; Still and Timms, 2000a,b). Indeed, Burns and Dewhurst (1996), agree that the main problem with growth models is that many firms do not experience growth at all, especially female owned firms. Although these diagnostic models may be useful in benchmarking progress, none of them are able to capture the process accurately. Given the short history and generally small size of most female-owned enterprises there has been little research on factors affecting this growth (Brush and Hisrich, 1991), therefore, this paper does not aim to identify the stages of growth of female entrepreneurial organisations, but rather to examine their progress in developing and internationalising their organisation.

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Internationalisation An important option for growth is for the organisation to seek out new markets (Ansoff, 1968). Indeed, international trade is an increasingly important avenue for economic growth for countries worldwide (Weeks, 1999). It is not only the province of large, multinational corporations as many smaller firms are also finding that the global marketplace offers amazing potential for business growth, and women are no exception to this. An OECD report (2001) however concluded that it is difficult to ascertain how many women entrepreneurs are involved in international trade, in what capacity, and in what countries. Indeed, Koreen (2001) argues that “comprehensive studies are lacking and there exist important gaps in statistics on the small firm in international trade broken down by gender”. Moreover, while it is possible to detect the level of female entrepreneurship in many countries using the Global Entrepreneurship Monitor (2002), this particular study does not indicate how many of these women trade

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internationally. Research conducted by the National Foundation for Women Business Owners (1998) indicated that a healthy share of women-owned firms in several developed and developing countries are involved in the international trade. These particular results revealed that between one in eight and one in three of the female entrepreneurs interviewed were currently involved in either importing or exporting goods or services: 38 per cent in Ireland; 30 per cent in Canada; 25 per cent in Sao Paulo, Brazil; 21 per cent in Mexico City and 13 per cent in the USA. While these studies do not describe the status of all women entrepreneurs around the world, they certainly provide a snapshot of several key countries (Weeks, 1999). Internationalisation as a growth strategy is important as firms owned by women that operate internationally have proven to be more successful and grow more rapidly than their domestically focused counterparts (McKay, 2001). Many of the extant models of firm internationalisation posit that firms gradually internationalise in an incremental manner through a series of evolutionary “stages”. (For comprehensive reviews of the literature see Leonidou and Katsikeas 1996). However, these conceptualisations have been challenged as “much too deterministic” (Reid, 1983). Indeed, (Andersen (1983) also contends that that stage theories lack clear boundaries and explanatory power, and that the models do not address the reasons for moving from one stage to the next. Recent research into “born global” firms have also contested the incremental processes of internationalisation as these firms skip many of the stages or move straight into international markets without a period of domestic activity (Hurmerinta-Peltomaki, 2001) or without activity in the domestic market at all (Bell et al., 2001). Although many of these theories form the basis of much research in the past, it has been recognised that they do not always reflect the realities associated with the global business environment of the twenty-first century. A firm does not necessarily follow any consistent organisational approach as they enter foreign markets and may choose different approaches on a market-by-market basis (Johnsen and Johnsen, 1999). Internationalisation may therefore be viewed as a chosen strategy, based on analysis of the firms capabilities, resources and opportunities, and may involve a company adapting its organisational form and market relationships to the unique character of each individual market and its own specific circumstances rather than following a structured path of international market development. Coviello and Munro (1995) suggest that network theory offers a fresh perspective on the theories of internationalisation, particularly for smaller organisations whose development tends to be dependent on relationships with others (Coviello and McAuley, 1999). Hill et al. (1999) acknowledge that the individual entrepreneur plays a focal role in building both formal and informal relationships with people within their society who are or may become material in assisting them to progress the growth ambitions of their enterprise. Researchers such as Rosa et al. (1994) as cited in Carter (2000a,b) have also argued that networking is both critical to, and should be greater among, female entrepreneurs than male entrepreneurs because women use networking as a common strategy to advance their business (Carter and Rosa, 1998). This particular strand of literature also suggests that formal and informal networks are without doubt different in both the value of the networks and how each sex uses them to their advantage, although due to societal factors pressures, women often do not have as much time for networking (Ibarra, 1993) particularly formal networking.

Gender challenges in start-up, growth and development Women confront a variety of challenges in developing and running a business (McKay, 2001) and many argue that significant barriers still remain for women establishing and growing businesses (Carter, 1997). However, Pellegrino and Reece (1982) found that the majority of women in their study did not face any formative problems when establishing their business in the service and retail sectors. Nevertheless, the literature does discuss a number of obstacles faced by many female entrepreneurs, which prevent or hinder the development and growth of the firm (O’Gorman, 2001; Orser et al., 1999). These challenges include acquiring appropriate training (Walker and Joyner, 1999; Hisrich and Brush, 1984) obtaining capital (Buttner and Moore, 1997; Carter, 2000a,b) and gender discrimination (Kleiman, 1998). Nelson (1987) believes that women approach the entrepreneurial experience with disadvantages rooted in education and experience and therefore they often lack the knowledge of skills required to develop their business. There is also literature to suggest that it is often resistance from family that proves the greatest barrier for female entrepreneurs (Babaeva and Chirikova, 1997) as well as the problems of overcoming cultural conditioning (Oeltjen, 1992) as cited in McKay (2001). This is often the case in developing countries were a woman’s primary role is as a wife and mother and traditional practices still restrict women to their maternal role and other family-bound tasks (McElwee and Al-Riyami, 2003). In fact, Neider (1987) referred to a “sense of guilt” among his sample of female entrepreneurs in Florida from neglecting their home life in preference for their business. Whereas Fielden et al. (2003) remark that some women felt that the added burden of a family restricted what they could achieve in their business activities. Gender stereotypes are also seen as a significant growth obstacle facing female entrepreneurs (Still and Timms, 2000a,b) especially for women in male-dominated sectors of business. However, it is not only gender issues that can hinder the start-up and growth phases of the small firm. The current literature emphasises the: Financial aspects of venture start-up and management are without a doubt the biggest obstacles for women (Brush, 1992, p. 14).

Furthermore, it is maintained that: . . . the most serious self-described barrier to growth among women-owned businesses, next to overall economic conditions, is the availability of capital (NFWBO, October, 1993; cited in Walker and Joyner, 1999).

Obtaining start-up financing and credit (Schwartz, 1976; Pellegrino and Reece, 1982; Hisrich and Brush 1984; Neider, 1987), cash flow management in early operations (Hisrich and Brush, 1984; Scott, 1996), and financial planning (Hisrich and Brush, 1984) have been noted in several studies. In addition to finance, other external barriers specific to growth are industry factors such as the level of demand and the intensity of competition (McGee, 1992); lack of knowledge of exporting (Leonidou, 1994) and customs and legal issues. Internal barriers may include the managerial skills and knowledge of the entrepreneur (El-Namaki, 1990 as cited in O’Gorman, 2001). Whilst these problems are common to all businesses regardless of owner gender it is argued that they are exacerbated for women particularly in the area of finance due to their lack of experience and networks in the field (Brush, 1992). Several studies have reported that women use only personal assets at start-up and employ no or minimal external

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funding (Neider, 1987; Birley, 1989). Moreover, because personal assets are often shared with a spouse, they are more likely to be asked for spousal co-signatures, rather than personal assets (Walker and Joyner, 1999). Methodological approach Sampling Participants involved in this study were identified entirely through internet-based research. The sample of female entrepreneurs was chosen using information available on online Women in Business Network association sites, female entrepreneurship award sites, online business papers and magazines, national government web sites and general search engines such as Google and Yahoo, which identified female entrepreneurs within the six countries. Non-probability, convenience and purposive sampling was then used, as suggested by Patton (1990) to ensure that each there would be sufficient information available on each of the entrepreneurs chosen, and that the information gathered would be as rich and informative as possible. The following selection criteria were applied to maintain consistency and enable comparability across the six countries: . The organisation must have been founded by the female entrepreneur. . The organisation is at least 51 per cent owned by one or more women, or, in the case of any publicly-owned business, at least 51 per cent of the stock is owned by one or more women; and the management and daily business operations are controlled by one or more women. . The organisation must be at least two years old in order to examine growth patterns. It was obvious that within the final sample, many of these women had been acknowledged within their industry or country in that, their details and information about their organisation was available publicly, and in an online form and 56 “shallow case” studies across the six countries were developed. In-depth data, which included reviews and case studies of the individual entrepreneurs and details of their organisations, were then collected using these various and wide-ranging online secondary sources. In some cases, these entrepreneurs also had a company web site and this was a tool to gain further in-depth information where possible. This form of “shallow case” data collection has been successfully developed and implemented by Ragin (1987) which has now been applied in social science research. This innovative method combines the intensity of information gathered through case study research with the additional advantage of examining a larger number of cases (Ragin and Zaret, 1983). Participants Fifty-six female entrepreneurs were selected as viable for the study once it was determined that sufficient online information could be found in order to meet the research objectives. The country breakdown of participants is: Canada 8; Singapore 11; South Africa 14 (8 white, 6 black);

Australia 9; New Zealand 5; Ireland 9; Total 56. Procedure According to Stanton and Rogelberg (2001) some of the advantages of conducting internet-based research include reduced costs, enlarged sample sizes, shortened data collection-analysis-presentation cycles, improved access to previously hard-to-reach populations, and enhanced interactivity of research materials. Using this research technique, the empirical work was undertaken by both the authors, and teams of students from the School of International Business at Magee College, between February and April 2004. Each student team was asked to examine a specific country using a pre-designed and tested template. This ensured that the data were accurately collected and recorded and also that there remained consistency between locations. Where information gaps existed in the data, a contingency method was employed that involved individually e-mailing the female entrepreneurs in order to “fill in the gaps.” In some cases this method was made redundant due to a non-reply, therefore the information was unobtainable and marked “UA” in the tables below. However, some of the women were keen to discuss in more detail their business activities through a series of e-mail exchanges. As a result the data collection in some countries was richer than initially anticipated. Research aims . To investigate and compare the cross cultural motivations of female entrepreneurs to start their own business within the six countries. . To examine and compare the growth and internationalisation patterns of female entrepreneurs within six countries. . To identify the obstacles, barriers or challenges (gender-based or other) faced by these women during the start-up, growth and internationalisation of their organisation. Analysis This research is exploratory in nature and the results were analysed using content analysis. The data collected were classified into pre-constructed coding units through designing a number of simple tables, as suggested by Silverman (1993). These tables served as an effective “filing system” for all data collected on the 56 individuals thus allowing ease of comparison and analysis across the six countries. The use of content analysis in this type of exploratory research offers a number of advantages as it reduces the pressures of time, cost and geographical distance associated with interviews and observations when carrying out a comparative, international study of this nature (Collis and Hussey, 2003). In addition, it is also a non-obtrusive measure requiring fewer research tools such as questionnaires or interviews. Therefore, the researcher is not fully dependent on the participant’s input and the entrepreneurs generally remain unaware that they are being examined (Collis and Hussey, 2003).

Female entrepreneurs

91

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Limitations of the methodology Certainly, it must be recognised that there are limitations to the methodology followed for this study. First, the small number of women who were involved in the study, 56 across six countries, may not be representative of a “stereotypical female entrepreneur” within the countries chosen. However, the purpose of this research is simply to highlight results which seem to be indicative of a trend in female entrepreneurship with the countries chosen based on the sample available. This sample may also be open to a certain degree of bias because the women chosen for this research have obviously been successful in their particular areas of business or within their country due to the fact that there are multiple sources of information regarding their organisations available in the public arena. However, our decision to access this information using online resources has no further implications other than, in some cases, there was limited information available from these public sources. This was particularly pertinent among the South African black women, as it proved difficult to source online information within this group. However, the emphasis of the research is not to test theory but to explore a subject that has not received much academic attention in the past and it is hoped that the issues raised will merit further investigation at a later date, using a larger sample within each country. Furthermore, using the internet as a research tool also has its limitations. It can be a difficult medium to use in conducting research as it can appear disorganised (Domegan and Fleming, 2003) and much of the information is volatile and dynamic as web sites disappear, move or mutate daily (NMSU Library, n.d.) From the authors’ experience, this research technique proved an excellent method of capturing a truly international sample, however it must be acknowledged that the richness and complexity of the information derived is less than it would be if a more in-depth, qualitative research was implemented. Results and discussion In order to fully understand these results and to put them in context for comparison, it is important to look at the level entrepreneurship within each country. Using the Global Entrepreneurship Report 2003 (Global Entrepreneurship Monitor, 2003), it has been possible to detail not only the level of entrepreneurial activity but also the level of female entrepreneurial activity within six of the countries. Gem’s primary measure of entrepreneurial activity is the Total Entrepreneurial Activity (TEA) Index, therefore, in 2003, Singapore had a TEA is 5.4 which means that approximately 5.4 out of every 100 adults in Singapore were starting or operating businesses less than 3.5 years old (see Table I). Within this GEM report, New Zealand lies within the group of countries which is considered most entrepreneurial. Australia, Canada, Ireland and Singapore are within the intermediate group with South Africa lies alongside a group of countries which have a below average level of entrepreneurial activity.

Table I. Level of entrepreneurial activity within the six countries

TEA index value Female TEA value

Singapore

South Africa

Australia

New Zealand

Canada

Ireland

5.4 3.5

5.7 UA

9.9 5.6

13.9 9.96

8.5 6.0

8.1 3.7

A further noteworthy element from these GEM statistics is the level of female entrepreneurship within each country, which is significantly lower than the national average in all six countries. Demographics There is a common perception that women primarily start small hobby-related enterprises, however, this was contradicted not only in the results of this research, but also in previous research with substantial evidence proving that women own organisations in all industry sectors (Carter et al., 2002). As can be seen from Table II, it is apparent from the results that there is a wide range of different types of organisations involved in this study. In Australia and New Zealand, the results indicate that the majority of the entrepreneurs own organisations in the retail/wholesale sector, mainly in the fashion industry. This is also true of the Irish sample, however, there is a more diverse range of organisations in Ireland including manufacturing, health and business related services. In contrast, over half the Canadian entrepreneurs operate in what might be considered to be predominantly male-dominated industries. In fact, the two largest grossing companies run by this selection of female entrepreneurs are involved in transport and shipping. This is also true of the Singaporean firms where there are a high number of women involved in the manufacturing sector. However, it is apparent that across countries there exists a strong link in the nature of businesses established by these women. These businesses can be described as “socially oriented”, designed to help the overall community, environment or disadvantaged groups in society. In many cases this research found that very often these entrepreneurs hold a strong belief when deciding to embark on their business venture; that it is possible to create something both socially conscience and economically viable (Orhan and Scott, 2001; Brush, 1992). In South Africa this trend appears most strongly across a diverse range of business sectors, with three different entrepreneurs citing the following reasons for their business activities: . held an interest in women’s issues and used her business as a promotional tool to fund and address the issue of abusive relationships; . felt compelled to use her business venture to create a strong community spirit; and . had a strong desire to address the gross inequalities, poverty, underdevelopment and the information drought experienced by women in business. Industry sector Manufacturing Construction Retail/wholesale Hospitality, tourism Business-related services Education/health Other Total no. of companies

Singapore

South Africa

Australia

New Zealand

Canada

Ireland

4 0 3 1 2 1 0 11

4 0 4 2 3 0 1 14

0 0 5 0 2 1 1 9

0 0 3 0 0 1 1 5

1 0 2 1 0 1 3 8

1 0 4 1 1 2 0 9

Female entrepreneurs

93

Table II. Company demographics

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Similarly in Canada, this social awareness exists for some of the businesses involved. For example, one entrepreneur’s business specializes in upgrading the skills of unemployed and/or injured adults, to facilitate their timely re-integration into the workforce, whilst another provides employment for “stay at home” mothers (50 per cent of total workforce). In Australia, one entrepreneur designed a network for women to support, encourage and promote women starting technology-driven businesses.

94 Motivations for start-up When addressing the motivations of the female entrepreneurs across the six countries (see Table III), it appears evident that few report “push” factors such as redundancy or being unhappy in their previous job as motivations for starting up their own ventures. This would conflict with Deakins and Whittam (2000) who report that such negative, motivational or push factors are more important with entrepreneurs drawn from certain groups in society that may face discrimination, such as women. This motivation is highest among the Singaporean women, with four out of 11 stating discontentment with previous employment and facing redundancy as reasons for start-up. Similarly, within this group six out of 11 state the potential to increase personal income as a strong motivation. Despite the fact that this financial motivation appears in all other countries apart from the South African black women, it should be noted that it is not a striking observation, with only one or two women from each country citing it. Both motivations of using a hobby to create a viable business opportunity and to develop a flexible working life are listed in all countries although once again their predominance is minimal. This is most apparent in Canada, where only one in eight women mentioned creating a flexible work/family life balance as a main motivation. This may be attributed to the fact that male and female family roles within Canadian society are less traditional than for example in Ireland and also childcare provision within the workplace is highly developed. All entrepreneurs involved listed a critical incident which acted as a major motivating factor for start-up, with a vast majority of 13 out of 14 in South Africa. However, the ambiguity of these “critical incidents” require more in-depth, qualitative research in order to draw any firm conclusions, as each entrepreneur’s experience is heterogeneous.

Motivations for business start-up

Table III. Motivations for start-up

Unhappy in former job Redundancy Earn more money Using hobby to create viable business Develop flexible working life Specific incident which confirmed decision Total no. of entrepreneurs

Singapore South Africa Australia New Zealand Canada Ireland 4 0 6

UA 1 1

1 UA 2

UA 1 2

1 0 2

1 UA 4

4 4

UA 1

4 2

1 2

5 1

2 1

4 11

13 14

3 9

1 5

1 8

UA 9

Note: UA – the information was unavailable

Finally, as discussed previously in relation to company demographics, what remains evident across all six countries are the strong, social motivations for starting up a business. Although this motivation has not been tabulated it was manifest among many of the women involved upon closer inspection of their individual profiles. It appears that these entrepreneurs hold a strong, altruistic desire to create a better environment for their family and greater community and are highly conscious of the social contribution their businesses can provide, which in turn, will motivate them to launch start-up activities. In South Africa, where this was documented most strongly, one woman identified an opportunity to create work for people in rural areas. In Australia, one entrepreneur was determined to find a depilatory product that did not hurt her daughter’s sensitive skin. This would support Brush (1992) who advocates that women blend their business relationships with other relationships in their lives including family and ties to the community and, consequently a key motivation among female entrepreneurs is an interest in helping others.

Female entrepreneurs

95

Background, level of education and previous experience Table IV shows female entrepreneuraial demographics. It appears that the average age of the entrepreneurs examined in the study was between 30-45. This corresponds with the literature although it should be noted that many of these businesses have been established more than two years and therefore the average age of the female entrepreneur at start-up may be lower. The majority of the entrepreneurs are married with children throughout each of the countries apart from Canada, where there was a minority of three out of eight. This finding goes little way to support the notion reported by Watkins and Watkins (1984) and Goffee and Scase (1985) that self-employment among women is an alternative to marriage or a dependence upon males. Singapore South Africa Australia New Zealand Canada Ireland Age of entrepreneur 20-29 30-39 40-49 50-59 þ Level of education Secondary only Tertiary Tertiary plus trade qualifications Marital status Single Married Separated/divorced Was this entrepreneur first born in family? Is there a history of business ownership within family? Total no. of entrepreneurs

0 4 3 4

0 3 5 2

0 5 1 3

0 1 3 1

0 1 3 2

1 4 3 1

2 5

4 7

3 6

3 2

1 6

1 7

4

0

1

UA

2

0 11

0 11 2

2 5 2

0 4 1

1 3

2 7 UA

UA

UA

1

UA

6

UA

2 11

1 14

1 9

UA 5

0 8

1 9

Table IV. Female entrepreneur demographics

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Most of the women display some degree of education, with a vast majority holding a tertiary level qualification, particularly in Australia, Canada and Ireland in the areas of education, fashion, teaching, counselling, nursing and social science. It was evident that a minority held degrees in business, engineering or technical disciplines, which would support previous findings (Watkins and Watkins, 1984; Hisrich and Brush, 1983). The research technique used did not prove effective when trying to determine more obscure information such as whether the entrepreneur was the first born. Canada and Australia were the only countries where this was documented successfully. Interestingly, the Canadian entrepreneurs reveal six out of eight as first-born, which would support the findings of Lee (1996) that first-born children are more entrepreneurial. As seen in Table V, virtually all of the women involved had previous industry experience, the only minority in New Zealand (two out of five). Furthermore, it appears that this experience is not solely limited to the “traditional sectors” as described by Birley (1989), with some of the profiles revealing a Canadian stockbroker, a financial and real estate expert in Singapore, and a marketing manager operating in the technology sector that went on to launch Microsoft in South Africa. Growth and internationalisation It is evident from the research carried out (Table VI) that all of the women involved in this research are experiencing some form of growth. In fact, not only are the majority of these organisations growing domestically, many of them are experiencing growth in terms of product development, taking on additional employees and also growth into new international markets. Probably the most significant results are the women in Australia, as 100 per cent of the women involved were trading internationally and growing through new international markets, and in Ireland eight out of the nine companies involved were expanding through international trade. This is particularly noteworthy as the literature and previous international studies would suggest that female entrepreneurial organisations are not experiencing growth at all (Burns and Dewhurst, 1996).

Table V. Female entrepreneur demographics

Does this entrepreneur have dependants? Children Older parents Previous industry experience Prior entrepreneurial venture Prior international experience? Lived abroad Studied abroad Was involved in international trade through prior job Total no. of entrepreneurs

Singapore

South Africa

Australia

6 2 10 0

12 4 10 5

4 6 7 2

3 4

4 1

2 11

2 14

New Zealand

Canada

Ireland

3 1 2 0

3 0 6 3

UA UA 9 UA

6 2

1 1

3 3

4 1

5 9

UA 5

1 8

4 9

Singapore What type of growth is the organisation experiencing at present? Product growth/innovation Domestic market growth International market growth Additional employees Experienced barriers to growth? Due to: Lack of capital Lack of knowledge or skill Market acceptance of product Customs and legal issues Problems with distributors Exchange rates/currency issues Payment issues Cultural/language barriers Gender issues Other Was the company international? Straightaway (within first two yrs) Gradual/step-by-step approach Through a series of networks Grant/fund incentives Which modes of entry were employed? Direct exporting Use of distributors in foreign market Subsidiary office in foreign market Joint venture or strategic alliances Manufacturing facility in foreign market

South Africa Australia

New Zealand

Canada

Ireland

9 6 9 5

10 6 9 UA

5 8 9 2

0 2 5 UA

6 4 5 5

2 4 8 4

2 1 0 0 3 0 2 2 1 1

4 1 0 1 1 0 2 1 1 3

3 UA 1 UA UA UA UA UA UA 4

UA 1 UA UA UA UA UA UA UA 1

UA UA 1 1 UA UA UA 1 UA 2

1 2 0 3 1 2 2 3 4 2

2 8 5 1

1 3 0 0

5 4 0 1

1 4 0 0

0 4 5 0

6 3 4 5

5 3 4 1

3 1 1 1

6 2 2 1

5 1 1 0

2 3 4 3

7 1 UA 1

1

0

0

0

2

UA

There is no doubt however, that there are significant differences throughout our sample, in the growth strategies employed by the women. For example, the majority of businesses in our Australian and Irish sample could be considered “born global” firms as they were trading internationally within the first two years of their initiation. Unfortunately due to the nature of this study, it is not possible to identify the personality traits of these women, as Mitra (2002) would advise; this might provide an understanding of the growth strategies chosen by these women. However, this unusual trend might be explained by the fact that all of these women, who have developed their organisation internationally within a short time period, had previous international experiences through work or study and therefore seem to be increasingly open to trade with different countries and cultures. In contrast, the South African sample demonstrates that these women prefer a gradual approach to international trade, as they were more concerned with developing their product ideas and taking advantage of niche markets within their own country. Like the South African women, the Singaporean firms also took a much more traditional approach to developing international contacts and trade using a

Female entrepreneurs

97

Table VI. Growth and business development

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step-by-step approach, it was found that only two of the Singapore organisations could be considered “born globals”. However, like the Canadian women, the Singapore entrepreneurs used a series of networks to develop contacts in new markets and capture international sales (Coviello and Munro, 1995). The Canadians have a highly-developed system of business networking and are able to use this to their advantage in making contacts, not only through women’s networking organisations but also with all other organisations, on both a formal and informal basis. In Singapore, this common strategy of informal networking to develop their business may be attributed to cultural influences, where informal social networks play an integral role, not only in society but also as a strategy for business advancement (Carter and Rosa, 1998). The role of both formal and informal networks was also a feature in the Irish sample, however, whilst the Singaporean and Canadian women use these as a method for business development and growth, the Irish women used networks as a support mechanism where they can gain knowledge and advice from fellow business owners, both male and female. Further to this, whilst the majority of all the firms in the sample used direct exporting as a method of internationalisation, the Canadians were much more proactive in forming joint ventures and strategic alliances. Whilst examining the export markets chosen by the women entrepreneurs (see Table VII) the patterns of export were reasonably predictable in that, the majority of the total sample of entrepreneurs choose to export to geographically close and culturally similar markets. For example, the largest export market of the Singaporean firms is Japan; similarly the Canadian organisations export mainly to the USA followed by Europe. The New Zealand and Australian firms trade mainly with each other followed by the USA and Europe whilst the Irish women export mainly to the USA and Europe. However, this is not the case with the South African women whereby their main export market is Europe and the USA. It is possible to contribute this to two factors; these women entrepreneurs have had previous international experiences either through a job, travel or study in a foreign country, and therefore did not hold preconceived ideas regarding cultural or geographical barriers; neighbouring African countries are considered to have developing economies, therefore, they may not be able to support these organisations’ exports. Although many of the entrepreneurs in the other five countries also had this type of international experience, we can conclude that the women of South Africa are willing to take on greater risk in order to locate appropriate foreign markets for their products. There is no doubt that in each of the six countries examined, some of the entrepreneurs did not choose culturally similar or geographically close markets and instead are drawn to countries which hold the best opportunities for the growth and development of their organisations. This risk-adverse trait, although quite unique within this sample of women, is something which is becoming more apparent amongst the modern female entrepreneurs. When we look at the motivations for growth there are perhaps two major findings within the countries in this sample. Only the Canadian women cited a perceived higher level of profitability as a main motivation for growth. The women in the other countries felt it was much more important to expand their customer base and identify new opportunities for themselves and their organisation. This was particularly

Singapore Length of time exporting (years) Export ratio (as per cent of total sales) No. of export markets Top export markets USA Canada Europe China Japan Middle East Australia/New Zealand Africa South America Other Motivations for internationalisation: Global vision/personal ambition Expand customer base Identified new opportunities Solicited orders Competitive pressures Saturated/inhospitable domestic market Perceived higher level of profitability Transferable product idea Tax benefits Spreading the risk Withdrew from any international markets due to problems?

South Africa

Female entrepreneurs

New Australia Zealand Canada Ireland

6-18

1-5

4-22

9-19

7-17

2-16

UA 1-25

1-33% 2-6

UA WW

UA WW

UA UA

12-100% WW

4 1 4 9 3 6 2 2 2 3

2 0 3 0 0 0 1 8 0 1

7 3 9 3 6 5 9 2 2 3

5 3 5 3 4 4 5 2 3 0

5 8 3 0 0 1 0 0 0 1

7 2 7 UA 3 6 3 1 1 1

10 10 9 0 2

2 1 2 0 0

3 3 4 2 0

2 2 3 1 0

5 2 3 0 1

7 4 9 6

0

0

2

0

1

2

2 3 0 0

0 1 0 0

5 0 0 0

0 0 0 0

4 3 0 0

3

1

0

0

3

Note: WW – world-wide international sales

predominant in Singapore and Ireland. However, one element, which united the majority of women in all six countries, was their motivation to fulfil personal ambition. Barriers to start-up, growth and internationalisation In terms of any barriers to the start-up, growth and internationalisation of these female entrepreneurial firms, the results showed a mixed response. After a close examination of the literature, it was predicted that the types of obstacles these women would have to overcome include financing the business (Pellegrino and Reece, 1982; Hisrich and Brush 1984; Neider, 1987; Brush, 1992), acquiring appropriate training (Walker and Joyner, 1999), overcoming cultural conditioning especially in the case of South Africa and Singapore when women often take the maternal role of raising a family (Oeltjen, 1992) and gender stereotyping (Still and Timms, 2000a,b). In South Africa, it was not possible to obtain this culturally sensitive information from the black entrepreneurs; however, the one white entrepreneur remarked:

99

Table VII. Internationalisation

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. . . the banks have entrepreneurial divisions run by consultants that do not have entrepreneurial minds and do not see a potential success so don’t help the entrepreneur.

Other South African women echoed this lack of support from financial institutions. In contrast, all the Singaporean entrepreneurs contracted a bank loan. It is evident that the majority of women across the six countries used their personal savings first and foremost to finance the start-up of their business. Other financial sources included venture capital, borrowing from family and friends, as well as spouse second income. Among the entrepreneurs in New Zealand and Australia, the lack of capital problems festered strongly into the growth stages. However, this barrier may be more pronounced for them considering how quickly these Australian firms were internationalising after start-up. In Canada, language was cited as a problem for one French Canadian, but she described how she overcame this through confidence and a motivation to succeed. The entrepreneurs in Singapore certainly felt that there were two major barriers to the growth and internationalisation and these were a lack of capital/resources and a problem with dealing with distributors in foreign markets. These, however, are the same issues that any small organisation faces when attempting to grow and develop. This was also a major issue for the Irish women and it was cited on more than one occasion that this was a major barrier to overcome, as they were totally reliant on the distributors in the foreign markets to attract and maintain business within that market. In fact, one of the Irish firms was forced to withdraw from the Indian market after serious problems with the distributors in this country. However, it was cultural and language barriers which had the largest effect on the Irish women. Some of these entrepreneurs even cited the USA as being culturally different in terms of the way business is carried out. However, these barriers were overcome in most of the cases after an initial period and their experiences in foreign markets were mainly positive. Additional barriers to business development highlighted by half of the white South African women included seeking advice and effective support, particularly in early start-up stages. Similarly, entrepreneurs in Canada and Australia listed finding suitable employees, as one Australian entrepreneur wrote in an e-mail exchange: One of the biggest barriers for me was getting good staff who were able to work in a start-up versus a corporate culture . . . Being a tiny company with global clients – trying to meet their expectations of delivery, quality and service.

Gender issues The final element of this study was to examine how gender affected the start-up, growth and internationalisation of these female entrepreneurial organisations and the results were quite significant (see Table VIII). Whilst all of the Singaporean women and six out of the nine Irish women were found to have experienced gender barriers to starting their business, only two of these followed by describing gender barriers to growth. In most of these cases, the women found that once they had established their organisation and in some cases, proven themselves as competent business women, the barriers they faced initially were no longer apparent. In South Africa, one woman described how she had experienced a narrow-minded mindset due to her gender, especially by older white males in management positions who perceive that because of her age and gender, they know better. However, in New Zealand, Canada and

South New Singapore Africa Australia Zealand Canada Ireland Did you feel that your gender hindered the progress of starting a business? Involved in networking activities? Formal Informal Heve these networks been beneficial in the establishment and growth of your business? Did you feel your gender hindered the growth of your business? Did you find that there were gender-specific barriers to internationalisation?

9

1

0

0

UA

UA

0 9

2 2

2 0

1 0

UA UA

3 6

9

0

1

1

UA

6

1

0

0

0

UA

1

1

0

0

0

UA

1

Australia, there were no significant results which indicated that these women had ever experienced gender-associated barriers. Conclusions Owing to the vast amount of information gathered, tabulated and analysed across the six countries, the following major findings are summarised below: . The demographics of the sample showed that there was a range of sectors and industries represented, however, the nature of the businesses investigated demonstrated a strong social orientation. These “socially oriented” businesses are designed to help the overall community, environment or disadvantaged groups in society. . The predominant factor identified in addressing the motivations for start-up amongst these women was the altruistic desire to create a better environment for their family and overall community. This research found that very often these entrepreneurs hold a strong belief when deciding to embark on their business venture; that it is possible to create something both socially conscience and economically viable. This was particularly evident in South Africa and least apparent in Ireland. . The majority of the sample demonstrated a high level of education (tertiary). However in many cases their educational discipline is not directly linked to the type of businesses initiated. . All of these organisations are presently experiencing some form of growth, although differences were identified in the type and pace of growth. The most notable findings were illustrated in Australia and Ireland where many of the organisations’ international growth patterns were both rapid and initiated within the first two years of start-up. This is contrasted in Singapore and South Africa where growth and development of these businesses is gradual and incremental. . The female entrepreneurs in Canada, Singapore and Ireland utilised networking as a means of business development; however, different reasons became

Female entrepreneurs

101

Table VIII. Gender and growth

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.

102

.

apparent as to the purpose of these networks. For example, the Canadian and Singaporean women used a series of networks to develop contacts in new markets and capture international sales, whereas the Irish women use networks as a support mechanism where they can gain knowledge and advice from fellow business owners. An overriding financial barrier was evident throughout the six countries at both the start-up and growth phases. In addition, it was identified that there were further “country-specific” barriers which occurred during the internationalisation process of some of these companies. For example, the women in Singapore and Ireland highlighted problems in dealing with distributors in foreign markets and one French Canadian found language as a major barrier to growth in international markets. However, what should be emphasised is that these women were capable of finding ways of overcoming any obstacles they encountered and did not let these challenges deter them from continuing and developing their international activities. This research found that gender-specific obstacles could not be strongly identified amongst the sample except in Singapore and Ireland where issues of gender posed a major problem for the majority of these women (100 per cent Singapore, 55 per cent Ireland). This trend was more apparent in the start-up phase of business and in fact tended to subside once their businesses had been established and the entrepreneurs felt they had proven themselves as competent businesswomen.

Future research This research has highlighted a number of issues which merit further investigation, however, the issue of social responsibility within this sample of female entrepreneurs would indicate that women have much more socially-oriented motives for starting and developing a business. The authors would like to investigate this further using qualitative investigation of a larger sample within one country before drawing any definitive conclusions. References Alstete, J.W. (2003), “On becoming an entrepreneur: an evolving typology”, International Journal of Entrepreneurial Behaviour & Research, Vol. 8 No. 4, pp. 222-34. Andersen, G. (1983), “Resource-based theory and international growth strategies: an exploratory study”, International Business Review, Vol. 7, pp. 163-84. Ansoff, H.I. (1968), Corporate Strategy, Penguin Books, Bungay. Babaeva, L. and Chirikova, A. (1997), “Women in business”, Russian Social Science Review, Vol. 38 No. 3, pp. 81-92. Belcourt, M., Burke, R. and Lee-Gosselin, H. (1991), The Glass Box: Women Business Owners in Canada, Canadian Advisory Council on the Status of Women, Ottawa. Bell, J., Crick, D., McNaughton, R. and Young, S. (2001), “Towards an eclectic model of small firm internationalisation”, in Jones, M.V. and Dimitrios, P. (Eds), Proceedings of the 4th McGill Conference on Entrepreneurship: Researching New Frontiers, University of Strathclyde, Glasgow, Vol. 1, 21-23 September, pp. 95-110.

Birley, S. (1989), “Female entrepreneurs: are they really any different?”, Journal of Small Business Management, Vol. 27 No. 1, pp. 32-7. Brush, C.G. (1992), “Research on women business owners: past trends, a new perspective and future directions”, Entrepreneurship Theory and Practice, Vol. 16 No. 4, p. 5. Brush, C.G. and Hisrich, R.D. (1991), “Antecedent influences on women-owned businesses”, Journal of Managerial Psychology, Vol. 6 No. 2, pp. 9-16. Burns, P. (2001), Entrepreneurship and Small Business, Palgrave, New York, NY. Burns, P. and Dewhurst, J. (1996), Small Business and Entrepreneurship, 2nd ed., Macmillan Business Press, London. Buttner, H. and Moore, D. (1997), “Women’s organizational exodus to entrepreneurship: self-reported motivations and correlates with success”, Journal of Small Business Management, Vol. 35 No. 1, pp. 34-47. Carter, N. (1997), “Entrepreneurial processes and outcomes: the influence of gender”, in Reynolds, P. and White, S. (Eds), Economic Growth, Men, Women and Minorities, Quorum Books, Westport, CT. Carter, N., Brush, C., Gatewood, E., Greene, P. and Hart, M. (2002), “Does enhancing women’s financial sophistication promote entrepreneurial success?”, paper presented at Promoting Female Entrepreneurship: Implications for Education, Training and Policy Conference, Dundalk Institute of Technology, Dundalk, 19 November. Carter, S. (2000a), “Improving the numbers and performance of women-owned businesses: some implications for training and advisory services”, Education + Training, Vol. 42 No. 4/5, pp. 326-34. Carter, S. (2000b), “Gender and enterprise”, in Carter, S. and Jones-Evans, D. (Eds), Enterprise and Small Business: Principles, Practice and Policy, Financial Times Prentice-Hall, London. Carter, S. and Cannon, T. (1988), “Female entrepreneurs: a study of female business owners, their motivations, experiences and strategies for success, Research Paper, No. 65, Department of Employment, London. Carter, S. and Cannon, T. (1992), Women as Entrepreneurs, Academic Press, London. Carter, S. and Rosa, P. (1998), “The financing of male- and female-owned businesses”, Entrepreneurship and Research Development, Vol. 10 No. 3, pp. 225-41. Catley, S. and Hamilton, R.T. (1998), “Small business development and gender of owner”, Journal of Management Development, Vol. 17 No. 1, pp. 75-82. Churchill, N. and Lewis, V.L. (1983), “The five stages of small business growth”, Harvard Business Review, Vol. 61 No. 3, pp. 30-50. Collis, J. and Hussey, R. (2003), Business Research, 2nd ed., Palgrave Macmillan, Basingstoke. Coviello, N.E. and McAuley, A. (1999), “Internationalisation and the smaller firm: a review of contemporary and empirical research”, International Business Review, Vol. 6 No. 4, pp. 63-85. Coviello, N. and Munro, H. (1995), “Growing the entrepreneurial firm: networking for the international market development”, European Journal of Marketing, Vol. 29 No. 7, pp. 49-61. Cromie, S. (1987), “Motivations of aspiring male and female entrepreneurs”, Journal of Occupational Behaviour, Vol. 8 No. 2, pp. 251-61. Deakins, D. and Whittam, G. (2000), “Business start-up: theory, practice and policy”, in Carter, S. and Jones-Evans, D. (Eds), Enterprise and Small Business: Principles, Practice and Policy, Financial Times Prentice-Hall, London.

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Domegan, C. and Fleming, D. (2003), Marketing Research in Ireland: Theory and Practice, 2nd ed., Gill and Macmillan, Dublin. Fielden, S.L., Davidson, M.J., Dawe, A.J. and Makin, P.J. (2003), “Factors inhibiting the economic growth of female-owned small businesses in North West England”, Journal of Small Business and Enterprise Development., Vol. 10 No. 2, pp. 152-66. Gibb, A. and Scott, M. (1985), “Strategic awareness, personal commitment and the process of strategic planning in the small business”, Journal of Management Studies, Vol. 22 No. 6, pp. 597-627. Global Entrepreneurship Monitor (2002), Total Entrepreneurial Activity by Country by Gender: Global Entrepreneurship Monitor Executive Report, available at: www.entreworld.org/ GEM2002 (accessed 26 March 2004). Global Entrepreneurship Monitor (2003), Total Entrepreneurial Activity by Country by Gender: Global Entrepreneurship Monitor Executive Report, available from: www.gemconsortium. org (accessed 6 December 2004). Goffee, R. and Scase, R. (1985), Women in Charge: The Experiences of Female Entrepreneurs, George Allen & Unwin, London. Grondin, D. and Grondin, C. (1994), “The export orientation of Canadian female entrepreneurs in New Brunswick”, Women in Management Review, Vol. 9 No. 5, pp. 20-30. Henry, C. (2002), closing remarks at Research Forum: Promoting Female Entrepreneurship Implications for Education, Training and Policy. Centre for Entrepreneurship Research, Dundalk Institute of Technology, Dundalk, 19 November. Hill, J., McGowan, P. and Drummond, P. (1999), “The development and application of a qualitative approach to researching the marketing networks of small firm entrepreneurs”, Qualitative Market Research: An International Journal, Vol. 2 No. 2, pp. 71-81. Hisrich, R.D. and Brush, C.G. (1983), “The woman entrepreneur: implications of family, educational and occupational experience”, in Hornaday, J.A., Timmons, J.A. and Vesper, K.H. (Eds), Frontiers in Entrepreneurship Research: Proceedings of the 1983 Conference on Entrepreneurship, Babson College, Wellesley, MA, pp. 255-70. Hisrich, R.D. and Brush, C.G. (1984), “The woman entrepreneur: management skills and business problems”, Journal of Small Business Management., Vol. 22 No. 1, pp. 30-7. Hisrich, R.D. and Brush, C.G. (1986), The Woman Entrepreneur, Lexington Books, Lexington, MA. Hisrich, R., Brush, C., Good, D. and De Souza, G. (1997), “Performance in entrepreneurial ventures: does gender matter?”, Frontiers of Entrepreneurship Research: Conference Proceedings, Babson College, Babson Park, MA, pp. 238-9. Hurmerinta-Peltomaki, L. (2001), “Time and internationalisation: theoretical challenges set by rapid internationalisation”, in Jones, M.V. and Dimitratos, P. (Eds), Proceedings of the 4th McGill Conference on Entrepreneurship: Researching New Frontiers, University of Strathclyde, Glasgow, Vol. 1, 21-23 September, pp. 494-518. Ibarra, H. (1993), “Personal networks of women and minorities in management: a conceptual framework”, Academy of Management Review, Vol. 18 No. 1, pp. 56-88. Johnsen, R. and Johnsen, T. (1999), “International market development through networks: the case of the Ayrshire knitwear sector”, International Journal of Entrepreneurial Behaviour & Research, Vol. 5 No. 6, pp. 297-312. Kleiman, C. (1998), “Women entrepreneurs are a big loss to corporations”, St Louis Post, Dispatch, C5.

Koreen, M. (2001), “Women entrepreneurs in SMEs: realising the benefits of globalisation and the knowledge-based economy: synthesis”, OECD Proceedings, 2nd OECD Conference on Women Entrepreneurs in SMEs: Realising the Benefits of Globalisation and the Knowledge-Based Economy, Paris, 29-30 November, pp. 23-64.

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Lee, J. (1996), “The motivation of women entrepreneurs in Singapore”, Women in Management Review, Vol. 11 No. 2, pp. 18-29. Leonidou, L.C. (1994), “Export barriers: non-exporters’ perceptions”, International Marketing Review, Vol. 12 No. 1, pp. 4-25. Leonidou, L.C. and Katsikeas, C.S. (1996), “The export development process: an integrative review of the empirical models”, Journal of International Business Studies, Vol. 27 No. 3, pp. 517-51. McElwee, G. and Al-Riyami, R. (2003), “Women entrepreneurs in Oman; some barriers to success”, Career Development International, Vol. 8 No. 7, pp. 339-46. McGee, R.W. (1992), “Ethical issues in acquisitions and megers”, in McGee, R.W. (Ed.), Business and Common Sense, Quorum Books, pp. 167-85. McKay, R. (2001), “Women entrepreneurs: moving beyond family and flexibility”, International Journal of Entrepreneurial Behaviour & Research., Vol. 7 No. 4, pp. 148-65. Mancuso, J.R. (2004), “Do you fit the mould for start-up success?”, Start-up Journal: The Wall Street Journal Center for Entrepreneurs, available at: www.startupjournal.com/forms/ printContent.asp?url ¼ http%3A//www.startupjournal (accessed 5 August 2004). Mitra, R. (2002), “The growth pattern of women-run enterprises: an empirical study in India”, Journal of Developmental Entrepreneurship, Vol. 7 No. 2, pp. 217-37. Neider, L. (1987), “A preliminary investigation of female entrepreneurs in Florida”, Journal of Small Business Management., Vol. 25 No. 3, pp. 22-9. Nelson, G.W. (1987), “Information needs of female entrepreneurs”, Journal of Small Business Management, Vol. 25 No. 1, pp. 38-44. Nelton, S. (1998), “Women’s firms thrive”, Nation’s Business, August, pp. 38-40. NMSU Library (n.d.), “Using the internet for academic research”, available at: http://lib.nmsu. edu/ital/research.html (accessed 9 August 2004). Oeltjen, H. (1992), “Breaking barriers: dismantling the glass ceiling”, Women in Business, Vol. 44 No. 5, pp. 20-22. O’Gorman, C. (2001), “The sustainability of growth in small and medium-sized enterprises”, International Journal of Entrepreneurial Behaviour & Research, Vol. 7 No. 2, pp. 60-75. Orhan, M. and Scott, D. (2001), “Why women enter into entrepreneurship: an explorative model”, Women in Management Review, Vol. 16 No. 5, pp. 232-47. Orser, B., Fischer, E., Reuber, R., Hooper, S. and Riding, A. (1999), Beyond Borders: Canadian Business Women in International Trade, Royal Bank of Canada, Ottawa, available at: http://198.103.104.42/businesswomen/beyond_borders/report-e.pdf (accessed 5 November 2002). Pellegrino, E.T. and Reece, B.L. (1982), “Perceived formation and operational problems encountered by female entrepreneurs in retail and service firms”, Journal of Small Business Management, Vol. 20 No. 2, pp. 15-24. Poutziouris, P. (1993), “A growth model of small manufacturing firms in Cyprus”, PhD thesis, Department of Economics, School of Management and Finance, Nottingham University, Nottingham.

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Ragin, C. (1987), The Competitive Method: Moving Beyond Qualitative and Quantitative Strategies, University of California Press, London. Ragin, C. and Zaret, C. (1983), “Theory and method in comparative research: two strategies”, Social Forces, Vol. 61, pp. 731-85. Reid, S.D. (1983), “Firm internationalisation: transaction cost and strategic choice”, International Marketing Review, Vol. 1 No. 2, pp. 45-55. Riebe, M. (2003), “Growth-orientated women entrepreneurs: making it their way”, International Council for Small Business Proceedings; Advancing Entrepreneurship and Small Business, 48th World Conference, Belfast, 15-18 June. Rosa, P., Carter, S. and Hamilton, D. (1996), “Gender as a determinant of small business performance: insights from a British study”, Small Business Economics, No. 8, pp. 463-78. Rosa, P., Hamilton, D., Carter, S. and Burns, H. (1994), “The impact of gender on small business management: preliminary findings of a British study”, International Small Business Journal, Vol. 12 No. 3, pp. 25-33. Schwartz, E.B. (1976), “Entrepreneurship: a new female frontier?”, Journal of Contemporary Business, Vol. 5, pp. 47-76. Scott, C.E. (1986), “Why more women are becoming entrepreneurs”, Journal of Small Business Management, Vol. 24 No. 4, pp. 37-44. Silverman, D. (1993), Interpreting Qualitative Data: Methods for Analysing Talk, Text and Ingteraction, Sage Publications, London. Simpson, S. (1991), “Women entrepreneurs”, in Firth-Cozens, J. and West, M.A. (Eds), Women at Work – Psychological and Organizational Perspectives, Open University Press, Philadelphia, PA. Stanton, J. and Rogelberg, S.G. (2001), “Using the internet/intranet web pages to collect organizational research data”, Organizational Research Methods., Vol. 4 No. 3, pp. 199-216. Starr, J. and Yudkin, M. (1996), Women Entrepreneurs: A Review of Current Research, Wellesley College Centre for Research on Women, Wellesley, MA. Still, L.V. and Timms, W. (2000a), Making a Difference: The Values, Motivations and Satisfaction, Measures of Success, Operating Principles and Contributions of Women Small Business Owners, discussion paper series, Centre for Women and Business, The University of Western Australia, Perth, pp. 3-18. Still, L.V. and Timms, W. (2000), “Women’s business: the flexible alternative workstyle for women”, Women in Management Review, Vol. 15 No. 5/6, pp. 272-83. Timmons, J.A. and Spinelli, S. (2003), New Venture Creation: Entrepreneurship for the 21st Century, 6th ed., McGraw-Hill, Singapore. Vozikis, G. (1984), “A strategic disadvantage profile of the stages of development of small businesses: an empirical investigation”, Review of Business and Economic Research, Vol. 20 No. 1, pp. 96-110. Walker, D. and Joyner, B.E. (1999), “Female entrepreneurship and the market process: gender-based public policy considerations”, Journal of Developmental Entrepreneurship, Vol. 4 No. 2, p. 95. Watkins, D.S. and Watkins, J. (1984), “The female entrepreneur: her background and determinants of business choice: some British data”, International Small Business Journal, Vol. 2 No. 4, pp. 21-31. Weeks, J.R. (1999), “International trade opens new doors for women entrepreneurs”, Economic Reform Today, No. 3.

Welsh, M. (1988), The Corporate Enigma: Women Business Owners in New Zealand, GP Books, Wellington. Further reading Carter, N., Brush, C., Gatewood, E., Greene, P. and Hart, M. (2001), The Diana Project; Women Business Owners and Equity Capital: The Myths Dispelled, The Kauffman Foundation, available at: www.kauffman.org/pdf/diana_project.pdf (accessed: 12 October 2004). Deakins, D. and Freel, M. (1998), “Entrepreneurial learning and the growth process in SMEs”, The Learning Organization, Vol. 5 No. 3, pp. 144-55. Johnson, S. and Storey, D. (1993), “Male and female entrepreneurs and their business: a comparative study”, in Allen, S. and Truman, C. (Eds), Women in Business, Routledge, London, pp. 70-85. Mattis, M.C. (2000), “Women entrepreneurs in the United States”, in Davidson, M.J. and Burke, R.J. (Eds), Women in Management: Current Research Issues, Vol. II, Sage, London, pp. 53-68. Weeks, J.R. (2001), “The face of women entrepreneurs: what we know today”, OECD Proceedings, 2nd OECD Conference on Women Entrepreneurs in SMEs: Realising the Benefits of Globalisation and the Knowledge-based Economy, Paris, 29-30 November, pp. 127-44.

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Anne de Bruin and Susan Flint-Hartle Massey University, Auckland, New Zealand Abstract Purpose – To explore the demand and supply of private capital for successful women entrepreneurs in New Zealand. To obtain and interpret fine-grained information in order to mitigate the research gap on growth finance for women-led businesses in New Zealand. Design/methodology/approach – Multiple approaches for data collection and analysis. Includes interviews with key decision makers in the private capital industry and an e-mail survey of venture capitalists (supply-side) and the narrated experiences of women entrepreneurs (demand-side). Findings – Quantifies the degree of women’s current participation in the venture capital (VC) industry and delineates key considerations in the private capital investment decision-making process. Confirms the absence of overt gender discrimination in the VC market but draws attention to the presence of other – some of which are more hidden – considerations which affect mobilisation of private capital by women entrepreneurs. Research limitations/implications – Highlights that a combination of supply-side (private capital) and demand-side (entrepreneurs) influences, as well as country-specific structural and policy factors, needs to be considered when seeking explanations for the lower incidence of private capital to women business owners. Originality/value – Mitigates the large research gap on women’s entrepreneurship in New Zealand and supplements the literature on the private capital and women’s business nexus. Signals the importance of policy considerations in growing the role of private capital. Keywords New Zealand, Women, Entrepreneurs, Business formation, Venture capital, Capital Paper type Research paper

International Journal of Entrepreneurial Behaviour & Research Vol. 11 No. 2, 2005 pp. 108-128 q Emerald Group Publishing Limited 1355-2554 DOI 10.1108/13552550510590536

Introduction Recent research on the supply of entrepreneurial finance for business growth has focused on the venture capital (VC) industry (Sapienza, 1992; Wright et al., 1997; Zacharakis and Shepherd, 2001). Women’s access to VC has also been highlighted, however, current estimates suggest that women only receive 5 percent of the available VC pool of $73 billion. This is despite the fact that women business owners in the USA are a significant entrepreneurial group (Greene et al., 1999). This paper reports on research intended to supplement the extant international literature on equity and VC as it relates to entrepreneurial women in New Zealand. It also seeks to provide a more balanced perspective by exploring the demand for private capital through the lens of the experiences of women business owners. As Carter et al. (2004) point out, very few The authors are grateful to all the research participants who gave so generously of their time and expertise and to Suzanne Histen for assisting with data collection. A grant from the Academy of Business Research Fund (ABRF) made this phase of the research a possibility.

studies have explored the women business-external finance issue from both the supply and demand sides. There is a paucity of research into aspects of women’s entrepreneurship in New Zealand (NZ). While access to capital and financing strategies is an important concern for entrepreneurs, especially in the start-up and growth stages of their businesses, generally what is known of this aspect of women’s entrepreneurship is anecdotal and/or dated, and not sufficiently in depth or robust for policy recommendations on improving women’s access to financing (Dupuis and de Bruin, 2004). The purpose of the research detailed in this paper was to mitigate the lack of information mainly on finance-related issues of women’s entrepreneurial activity. Despite being intuitively aware that VC funds catered only to a negligible number of NZ businesses, let alone women-led businesses, we decided to retain a focus on the VC industry for the supply-side aspect of our study. We believed, that such a focus would better align our research with that of the earlier research which investigated the reasons for the low share of women businesses in venture and equity capital investment (see e.g. Greene et al., 1999; Gatewood et al., 2003). Importantly, it would contribute to an understanding of NZ women-related issues for the sector, especially in light of the greater awareness of the importance of the VC industry for business financing in NZ and recent supportive government initiatives. However, on the advice of a key informant associated with the NZ VC Association, with whom we conducted a pilot interview, the supply-side scope and terminology used was altered from VC to “private capital”, to encompass a general understanding that private capital in NZ includes venture capital, private equity and angel finance.

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National context and background to the private capital industry Commencing in 1999, when the first Labour-led centre left Coalition Government came to power, NZ began a new era in policy reconfiguration and a clear move away from the earlier hands-off industry policy (de Bruin, 2003). Active industry policy and dedicated regional development is now firmly on the agenda, together with continued recognition of the critical importance of small and medium enterprises (SMEs) in the economy. In February 2002, the government announced a policy framework, Growing an Innovative New Zealand (Clark, 2002) to systematically bring NZ back into the top ranks of the OECD group of countries. The Growth and Innovation Framework (GIF) identified three key industry sectors: information and communications technology (ICT), biotechnology and creative industries (especially the screen production and design sectors), to strategically focus government resources and help raise NZ’s international competitiveness. Sector-led industry taskforces for the ICT, biotechnology, screen production, and design industries were formed and reported on how to grow and tap the global potential of each of these sectors and develop a framework of action. Funding issues were dealt with in the reports and generally encouragement and stimulation of the VC and private equity industry has now been acknowledged as an important facet in reaping the export potential of these sectors and enhancing New Zealand’s innovation system. It is commonly perceived that the VC sector in NZ is immature and limited in size. A Treasury-commissioned study (Infometrics, 2000) however, found no evidence of a lack of VC. The VC and private equity industry is growing rapidly, though prior to 2002/2003 investment flowed mainly to companies at later stages of development. This

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suggests a need to stimulate investment in early stage business and in line with this, the Government set up the NZ Venture Investment Fund (VIF). Incorporated as a Crown Owned Company, in July 2002, the VIF has a pool of $100 million in funds to invest. It contracts private sector Fund Managers to manage VIF seed funds to invest in early stage, (seed, start-up and early expansion) high growth potential, NZ companies[1]. Every dollar of VIF commitment must be matched by two dollars of private investment capital and the minimum fund size is $30 million. In response to the Biotechnology Taskforce Report, identifying access to capital as a vital factor in developing the industry, the VIF has allocated NZ$25 million for investment in the sector with the “Biotech Fund”. The NZ Venture Capital Monitor reports on the state of the VC and private equity sector on the basis of survey responses from the leading VC and private equity companies and provides commentary on initiatives and challenges for industry. The 2003 report underscores that the industry “came of age in 2003” and that this was “against a backdrop of growing awareness of the industry and its future” (Ernst & Young, 2004, p. 2). During 2003, NZ$81.6 million of new capital was raised with VIF fund managers raising approximately half of this. Since 2002, when the survey was first conducted, committed capital has grown by 16 per cent to NZ$1.12 billion at the end of 2003 (Ernst & Young, 2004, p. 2). With 51 per cent of this capital being available for investment in 2004, the outlook for industry in the near future is bright. An indication of the relatively small size of the overall market in NZ, however, is that in total only 51 deals were conducted in 2003, compared to 39 in 2002 (Ernst & Young, 2004, p. 3). Although the NZ VC industry is now gaining momentum, it is still very much in its infancy. The NZ Government’s very recent steps to promote market growth contrasts with Irish government support. Ireland, a country with a population size equivalent to that of NZ, initiated a seed and VC funding scheme similar to NZ’s VIF in the early 1990s, giving it a head-start on NZ. In fact Ireland is often quoted (e.g. Ernst & Young, 2004) as a model for NZ to emulate. Alongside the evolution and growth of the VC market, there has been a general growth of angel providers including private angel investor networks[2]. With the predominance of small and medium enterprises (SMEs) in NZ[3], the key role of “informal” investment, which includes business angel activity, in financing business start-ups must be highlighted (Ernst & Young, 2004; Frederick, 2004; Infometrics, 2004). The GEM report points out that 99.2 per cent of total investment in start-ups came from informal sources and stresses that more attention should be paid to “the critical role the four Fs – family, friends, founders and ‘foolish’ investors in start-up ventures” (Frederick, 2004). Research approach Our study aim was to explore the following broad research questions: what is the degree of women’s participation in the VC industry? To what extent do private capitalists invest in women’s business ventures and do they perceive women’s ventures differently from those of men? What experiences have women entrepreneurs themselves had in seeking financial backing for business growth and expansion? An overall objective of the study was to obtain and interpret fine-grained information in order to mitigate the research gap on growth finance for women-led businesses in NZ.

Although the dominant research focus was private capital issues, the research methodology adopted nevertheless enabled teasing out of other interesting aspects of the general experience of successful women entrepreneurs. A thematic approach was used to convey the richness and diversity of these experiences. Multiple approaches for data collection and analysis were used, as summarised in Table I. For the supply-side, as a first step to gauge the influence of women in the decision-making process and the extent of investment in women-led businesses in the venture and private equity market, we conducted six in-depth interviews with key informants in high profile private capital investment companies. All belonged to the New Zealand Venture Capital Association. The majority of these interviewees were CEOs of the VIF fund managers and other private equity funds. Utilising a semi-structured interview guide, details were gathered about the core business activity and scope of activities including the range of investment, types and profile of investors and investees and the gender breakdown of the decision makers in the organisation. All the interviews included a question on what initiatives would encourage more women to seek private capital or increase their knowledge of private capital. An e-mail survey of members of the VC association supplemented the six interviews. This survey was sent to 68 members, excluding the six with whom we conducted face-to-face interviews. The survey asked four straightforward questions: How many people are employed at the decision-making level? How many of these were women and their role? What was the company’s investment range and preference? How many women-led businesses had the company invested in over the last 12 months? Another component of our study was research into the venture catalyst industry. This research included two in-depth interviews with leading women operators in this market. We also interviewed three other key women informants from the supply-side. They included the chief executive/general manager of NZVIF Ltd, a leading woman from the banking sector as an expert interviewee on women’s business finance strategies and a member of the Biotechnology Taskforce. Choice of the latter informant was in light of the Taskforce specifically identifying access to capital as “the major hurdle facing the sector . . . biotechnology industry is distinct from most industries in that it has inherently high research and development costs and long commercialisation timeframes (typically 3-4 times longer than other high technology sectors)” (Biotechnology Taskforce, 2003). The Taskforce also called for its own dedicated Biotechnology Investment Fund. A story-telling approach was chosen for interviews of 40 “successful” women entrepreneurs. The chief reason for this choice was the hope that it would produce rich Supply-side

Demand-side

6 In-depth venture capital interviews E-mail survey 2 In-depth venture catalyst interviews 3 Industry informant interviews Secondary data analysis Metaphorical NZ construct

40 in-depth entrepreneur interviews “Window study” Thematic teasing Secondary data analysis

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Table I. Multiple approaches

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data not only on the reasons for entrepreneurial success of these women, but also on any facets of their entrepreneurial experience that they chose to share and reflect on. A further rationale was a subsidiary research interest of exploring career trajectories of women entrepreneurs. Choice of method is vitally related to the researcher. Thus, parallel research on copreneurship and an exploration of the “joint career” concept coupled with desire to promote cross fertilization between the domains of entrepreneurship and career research (see e.g. de Bruin and Lewis, 2004) played a role in the preference for the narrative interview. In contrast to entrepreneurship study, the use of story-telling in career studies, and in particular with respect to women, is common (see e.g. Mallon and Cohen, 2001; Marshall, 2000). There is nevertheless emerging use of the narrative approach in entrepreneurship research (Johansson, 2004). Furthermore our study was of successful entrepreneurs, and as Johansson points out: “Successful entrepreneurs have developed a reputation as ‘raconteurs’” (Johansson, 2004, p. 283). The interview dialogue probed experiences with respect to financial resources for the woman’s business. Additionally, a single page “Fact Sheet” was filled in at the conclusion of the interview. This ensured comparable detail from all interviewees in relation to their personal background and business (years in operation, business life cycle stage, export status, ownership structure and employee details). The sample comprised those entrepreneurs who might be considered successful. An initial sample was obtained from a list compiled of women who had been profiled in the publication Her Business. These women were contacted and some agreed to be interviewed. The snowballing technique was used and interviewees were asked to suggest to us appropriate women entrepreneurs to participate. Four of the women interviewed were Chinese immigrant entrepreneurs. To assist with these interviews we translated the information sheet into Chinese and used a translator to help in the interviewing as well. A large women-led business is profiled as a “window study” (Czarniawska, 1997, p. 65). Adopting Czarniawska’s terminology and adapting the approach, we present the business as a dedicated focal point to illustrate the use of varying financial capital requirements and solutions at different business stages and with evolving events in the owner’s personal life. We peer through this window to observe both retrospectively as well as prospectively as the finance strategies unfold and also to illustrate some dominant demand-side themes. We employed a selective sector-based approach in choosing entrepreneurs. In light of the Government’s targeting of the information, communications and technology, biotechnology, screen production and design industries for support within the Growth and Innovation Framework, we sought out women from these industries. For instance an internet search led us to the NZ biotechnology directory[4]. This directory yielded only two interviewees but in total we interviewed four women entrepreneurs from the biotech industry. All interviews were audio taped and transcribed. A few lasted as long as 1.5 hours though the average interview duration was an hour. All these interviews, including the supply-side ones, were conducted in the period March to early May 2004. In the following sections we discuss first the supply-side and provide imagery to describe the unique aspect and potential of the NZ VC industry. Second, we outline the demand-side themes and highlight as a window study, an internationally recognised natural cosmetics business. We conclude the paper with a synthesis of our findings and general comment.

Supply-side discussion The six interviewees from the VC Association were insistent that gender was not a consideration in the decision to invest in a business. A manager of a VC fund and a private equity fund emphasised that his company was only interested in commercial viability and growth orientation of the business and that the gender of the business owner was not a consideration. In this organisation, one out of a decision-making team of eight was a woman. Of 200 applications in 2003, approximately 3 per cent were from women-led businesses. The investment formula for this company was to create relationships with credible people who could execute a growth strategy. Confidence in the person was the crucial first and foremost factor and although the selection team was mainly male, there was little evidence of any predisposition towards gender bias in relation to investment selection. Another of the interviewees was from a male-only decision-making equity investment company that focused on companies in the manufacturing and tourism sector. This company made equity investments in mid-stage expansion NZ companies that could demonstrate acceptable rates of return – 10-15 per cent after tax. Again, it was emphasised that gender did not play a part in assessment of the viability of the investment. However, it is worth noting that less than 5 per cent of the 100 investment opportunities considered in 2003 were from women-led businesses. A partner of one of NZ’s leading technology VIF fund managers indicated that investments in the technology sector require an active involvement at all stages. It was clearly explained that there is no gender discrimination when committing investment funds. Rather, prior detailed due diligence was conducted to ensure not only return but also the matching of goals, aspirations and abilities of the key players in the venture. As in other instances, of crucial importance was the quality of the relationship between the entrepreneur and the investment company, as well as confidence in the venture’s potential. We interviewed the CEO of the NZ arm of a multinational public company investing substantially in NZ businesses. This organisation targeted high-end business expansion and management buy-outs and the number of women-led businesses in their targeted market was minimal. Of 300 applications in 2003, only five were from women but this lack of applications from women could not be adequately explained. It was claimed however, once again, that gender bias was not an issue and that applications from women would be welcomed and evaluated with the same criteria as used for men. It was asserted that any business with growth potential would be looked at favourably if a 20-30 per cent return was potentially feasible. Another company, specialising in expansion equity partnership, based their investment decisions on confidence in the people involved in the ventures, irrespective of gender. This was coupled with recognition of the need to ensure a mutual alignment of objectives between investor and investee. When questioned about how effective the venture capitalists felt the Government VIF scheme had been, there was a general consensus that it had “a really positive impact” on the accessibility of VC in NZ. This would naturally impact on women. Although possibly a somewhat biased viewpoint as the majority of those interviewed were directly associated with the VIF, it was believed that the VIF was a worthwhile supportive initiative of the Government and augured well for future industry growth. A dissenting voice nevertheless maintained that the strict parameters of the VIF

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criteria could tend to “a homogenising effect where investment is made to fit parameters . . . true entrepreneurial spirit cannot be pigeonholed.” On the positive side, however, it was believed that the VIF scheme had the potential to increase professionalism and maturity in the industry – again the spin-offs for women, even as a minority group are obvious. Another interviewee (a man in his thirties), when probed on the question of government initiatives commented that, in general, the way the industry communicated and especially through web sites, was too technical and did not necessarily tell stories of success in a way that women could easily relate to. Mentioning one government web site for example, he claimed that it totally “missed” women. He speculated that men set-up and maintained these web sites and so they inadvertently appealed to men. However, another interviewee personal viewpoint was that women in NZ were more advantaged in the business environment than their Australian counterparts in terms of their general acceptance in the business world. It was reiterated that there was no overt gender differentiation in NZ. This interviewee stressed that emphasis should be on developing a greater and more accessible pool of capital for all entrepreneurs, as well as mitigating any lack of knowledge in relation to utilising VC for both men and women. From our VC industry interviews some recommendations emerged that would assist in growing the non-gender specific, overall pool of VC and private funds. For instance, it was asserted that the NZ$5 billion dollar NZ Government Superannuation Fund failed to allocate funds for private capital investment and that this contrasted with the Australian situation. Australian superannuation funds, which are relatively bigger due to mandatory employee contributions, channel a significant portion into business expansion. To the contrary it might be argued, however, that VC is not an appropriate use for superannuation funds which have to meet specific future liabilities and should ideally be free from exposure to risk. We received 29 replies from the e-mail survey to the broader VC industry, accounting for a 43 per cent response rate. However, we report supply-side findings combining results from both the e-mail survey and the six interviews – 74 contacts and 35 responses in total – a 47 per cent response. These findings indicate that management team size ranged from 12 to one person and 13 of the companies had women in management positions including office manager and accounts manager. Yet only four companies had women in what might be classified as key decision-making roles such as director, principal or partner. There were five leading women in these four companies and one of these companies had two women partners resident overseas. Hence only 11 per cent of VC companies had women as key decision makers. This percentage moves even lower to 6 per cent, if we exclude the company with the two overseas resident women partners. These figures confirm an initial anecdotal hypothesis that the industry is male-dominated. Respondents had invested in a total of 11 women-led businesses. Although our e-mail survey did not seek to gather data on the total number of venture propositions seeking investment backing, (we were advised in our pilot that this could be considered commercially sensitive information and should not be probed as it would reduce the response rate) our in-depth interviews indicated that investment in women-led businesses accounted for only around 3 per cent of the total investment opportunities that arose in the course of the year.

The investment range was generally NZ$100,000 to 100 million, though one small company reported a NZ$25,000-250,000 range. For the majority of companies the median range was from NZ$1 million to 20 million. Overlaying our demand-side interview material we found that this higher range generally failed to capture the finance requirements or aspirations of the women in our sample. There was a perception amongst the women interviewed that VC was for big business and not appropriate for their operations. A leading woman from the commercial banking sector was interviewed as an expert informant on financing strategies of women-led businesses. She believed that woman generally tend to seek angel funding, use their own savings or borrow on their credit card. This was borne out in our demand-side findings. Contrary to the majority of successful women entrepreneurs in our sample who were oriented to global markets, she believed that women generally do not have aspirations to grow big and go global. The reasons she gave for this were personal and related to life style rather than any structural or resource deficiency. Her individualised judgement acknowledges a rather stereotypical view that women’s caring responsibilities and the wider life focus constrain growth aspirations. The perception that women are less entrepreneurial than men is not uncommon (Buttner and Rosen, 1989) and we take up the issue of women’s caring responsibilities in the demand-side themes discussed later in this paper. A strong thread that emerged from the supply-side interviews was that the potential of the business and the quality of the entrepreneur were the deciding factors for private capital investment. As support for the relative lack of investment in women’s ventures, it was asserted that the focus of VC funds was increasingly on the high-technology sector – mainly in the biotechnology, medical, and information technology sectors. Women-led, high-growth businesses were not currently prominent in these sectors. Consequently, it would seem that there is little opportunity to remedy the investment gap until this imbalance in participation is addressed. While the NZ VC industry did not indicate signs of gender discrimination, one of the demand-side interviews provided an interesting insight into how different cultural perspectives of overseas investors could have an impact on women. This interviewee, who was an entrepreneur of long-standing in the biotechnology sector, told of how a VC partner had been taken on for three years and then this VC company was sold into Asian hands. This had “created big problems because the investors were sexist and their involvement became untenable and was terminated.” Another demand-side interviewee was in fact an entrepreneur operating in the VC industry so we include her experience in this section as well. This interviewee had sold out of the business she had founded and was now using that money for VC/private equity investment. She had invested in three businesses operating in software, manufacturing and TV sectors – all demonstrating positive growth tendencies in the form of exporting. Because of her own similar experiences, she knew she had the ability to help business owners struggling to gain competitive advantage: . . . I saw it as my investment vehicle . . . I would go in and work with people to create . . . to turn the business into something and in that case I wanted to put my money where my mouth was, and I knew I wanted a job and I wasn’t going to work for someone else.

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This example demonstrates that any increase in women’s successful involvement in business ventures is likely to lead to an increase in the migration of women into the VC industry, thus diluting the concentration of men. An interesting part of the supply-side research was a brief excursion into examining the venture catalyst market. Venture catalysts are “matchmakers” between business and sources of private capital. It was termed by one industry interviewee as a “soft bank model” sourcing private capital from “seasoned or sophisticated investors”. A woman in the VC industry, however, believed that the venture catalyst term was a very general one. She claimed that the market was crowded with people including investment professionals and was “in an amorphous state”. Information from leading venture catalyst industry informants indicated that there is a concentration on the IT, retailing and biotech sectors mainly at the start-up stage. However, “fringe activities” investment in areas like boat building, fashion design and innovative property development opportunities were not precluded. In the catalyst industry contact from women-led business was much higher – estimated at around 50 per cent. Investments ranged from NZ$20,000 to 1.5 million. Networking amongst women, e.g. the WISE[5] women network was a major source of referrals. An interviewee criticised the VIF initiative in that it focused on growth companies and not true start-ups. A key initiative to enhance women’s access to private capital, recommended by a woman venture catalyst, was a privately-raised gender-specific fund.

Metaphorical New Zealand construct: the No. 8 industry We use the imagery of No. 8 to symbolise the current state, as well as the potential of the VC industry in NZ to underpin growth of innovative, high technology industries. No. 8 (number 8) fencing wire is the wire gauge that is used to fence NZ farm land and figuratively the “No. 8 mentality” has become an iconic description of Kiwi (NZ) ingenuity and national character. This stems from the pioneering days when the colonial settlers were forced to turn their hand to all practical tasks and signifies the versatility and innovativeness of the Kiwi, most especially that of the Kiwi male. It has been emphasised that this masculine imagery “continues to marginalise women in a range of industries . . . to reproduce masculine cultures which value hard technical skills most highly and discount soft skills . . . ” (Campbell-Hunt et al., 2001, p. 138). With the VC and private equity industry in NZ still largely male dominated, investing insignificant funds in women-led businesses, we thought No. 8 was appropriate imagery to describe this aspect of the industry as well as the industry itself. The sector focused on by the industry is also high technology, which once again is currently mainly a male domain. The predominance of men in the VC industry was attributed by a leading woman in the industry to the fact that like-minded people work together. Given that men had a very strong business network in this industry helped further explain their predominance. The literature too confirms that women are frequently unable to penetrate financial networks (Olm et al., 1988; Aldrich, 1989; Greene et al., 1999). In an immature NZ industry that has relatively few players, there are only a small number of women because there is a tendency for participants to come from a high-tech background – IT and biotech are areas where there are a high proportion of men worldwide. These men migrate from these companies to the VC industry.

The No. 8 image also signals innovation and entrepreneurship. As NZ’s No. 8 industry evolves and develops from its current fledgling stage to greater maturity, we feel the industry itself would be a driving force for innovation and entrepreneurship. We are sanguine that an improved gender balance in key decision-making positions in the industry will also result. Interestingly, “No. 8 Ventures” is the name of a leading venture fund management company in NZ – led by a woman!

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117 Demand-side discussion In this section we outline findings in relation to business financing and draw out some other broad themes that emerged from the interviews. To tease out these themes we used a traditional approach – hand coding the full transcripts with highlighter pens and margin notes. We wished to get a “hands-on”, strong sense of the interview material, working independently on the exercise and then meeting to discuss and reach consensus. Boje (2001, p. 133) also mentions that he preferred this approach in his Science Lab research as otherwise a “good deal of information” can be lost when there is reliance on computer software packages such as NUD*ST. Financial capital In general, we found that women used a mix of financial resources: personal and household savings, profit re-investment, angel funds – family and friend finance, bank loans, and government grants. Sources of finance often varied with the stage of their businesses. A couple of women interviewees had revolving credit facilities and had built up strong relationships with their bank. These are, however, not gender-specific findings. Traditionally in NZ across entrepreneurial gender, capital has been sourced from savings, the family, inheritance and the contribution of partners, the bank or some kind of private financier. Overall, there is a tendency to rely on self as well as the “three Fs” of venture funding – friends, family and fools (Hunter and Wilson, 2004). Women in our sample merely confirmed this tendency, as the most common source of capital was the entrepreneur’s own savings. Of the women, 40 per cent used this type of finance and 12.5 per cent used angel finance (family and friend finance); 22.5 per cent used bank loans and only 2.5 per cent (one entrepreneur) had sought venture capital. There was also a tendency to reinvest capital generated internally and “bootstrapping” (Brush et al., 2004) was evident. Some had a bad experience with borrowed funds in the past, or knowledge of a very similar company “going under after growing too fast and borrowing too much”, and this was often the rationale for self-reliance for financing. All four Chinese ethnic entrepreneurs interviewed indicated a strong belief in business financing from their own household savings and re-investment of earnings and profits. In most cases the sector entered, however, presented low entry barriers and could be financed on a relatively small amount of savings. Such small beginnings did not mean that there was low growth potential and aspirations: 25 per cent of the women business owners we interviewed now had operations employing over 20 full-time employees and 47.5 per cent were currently exporting. A further 30 per cent had intentions of entering the international marketplace. This tends to negate the comment of a supply-side informant (mentioned earlier) that women have low business growth aspirations. Research has shown that most women business owners have tended to seek debt capital in the first instance, to facilitate business growth and expansion mainly because this is the most obvious and common avenue available (Hutchinson, 1978; Johns et al.,

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1976; Dwyer et al., 1985). In our sample, as mentioned previously, bank loans were the primary source of finance for 22.5 per cent. Knowledge and comfort with using external private capital sources was linked to the expressed desire to grow, especially through exporting. Thus for instance, two women who had no immediate intention to grow their business had not felt the necessity to explore private capital sources, until the need arose. Only one woman entrepreneur had actually been the recipient of VC and her somewhat negative experience is reported earlier in the supply-side findings section. Very few women were open to VC involvement. Those inclined to consider VC were, as we expected, the larger-sized firms with further growth aspirations and usually also with a view to greater export growth. The following quote highlights, however, that in addition to financial capital considerations, the need for improving organisational capital went hand-in-hand with business growth: I have had approaches (from VCs) and I am in the throes of looking at my business now, so that it can expand to a much greater level, but like all companies that expand quickly or a lot of companies, I have a lot of structure that is not in place so I have just recently employed a CEO so that he can start putting in some of the structures.

When it came to considering VC there were in some instances a sense of caution and even unease: Aren’t they also called vulture capitalists? Then you go yes, who do I want to go into business with? . . . and I want to see the whites of their eyes, I want to talk to them. I want to tell them why I am doing this and ok, I understand that that is my passion and it doesn’t have to be their passion . . . I just don’t want to go into business with anybody and so I’m waiting for that person to come along, and we are meeting with venture capital people, absolutely, and I will know when that person comes along that they are right for us and we’ll take their money.

There was also a notion that entrepreneurs could fall prey to opportunists in the VC and private equity industry: . . . they are very vulnerable and they’re open to somebody with the capital coming in and taking that away from them and I heard of that happening a few times and you can see how fragile and how precious an idea is. In those early settling times they do fall prey to people who are not entrepreneurs but opportunists. And I think that opportunism and entrepreneurship are two different things. There are people with money in the bank that go and buy entrepreneurs and I’ve seen that happen where the hopes would be dashed for what was going to be something that was a dream . . . The matrix that power and control comes from an opportunist and a corporate opportunist being superimposed on an entrepreneur doesn’t stand up.

On a more positive side, a capital intensive private company, running a medium-sized business, emphasised that although currently the Board decision was to meet capital expenditure out of cash flow and the company’s own borrowings (overdraft), this may not always be the case. VC input may be a possibility in the future as long as the philosophical stance and company integrity was maintained. On the other hand a few of our entrepreneurs had been approached by venture capitalists but remained closed to this proposition as they preferred the independence of running their own business. They wished to maintain control and autonomy in their business – a theme highlighted later in this section.

Accessing capital for expansion through factoring was a novel means used by an entrepreneur in the fashion design industry to grow her business. This entrepreneur was rapidly expanding in the global fashion market and was a large sized business with 60 full-time permanent employees, a further 14 part-time and casual employees and a large pool of contractors of around 600-700 people:

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. . . how I have managed to expand because I have not been back to the bank since that last time which was some time back . . . how it works is that you produce your invoices for the goods you are sending and send your goods and then you give . . . your invoices are bought by the factoring company and they immediately pay you out 80 per cent of the invoices and then they retain the other 20 per cent until the customer has paid and that a simplistic view on how it works. . . . so factoring . . . what that means is that immediately you get 80 per cent of your money back again and then you can use it again and again and again.

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Some sectors, namely international language schools and the fashion industry, failed to attract any interest from funders, including banks, in the 1990s. Their entrepreneurial opportunities were unproven or too risky at the time. They could also have been viewed as “unfashionable” or less “sexy” investment sectors. As national awareness of their industry, however, had improved in recent years, so too had their ability to access finance. Supportive government grants had also made a positive difference to some entrepreneurs. Certain project-based industries, e.g. the screen production sector, have their own sector-specific project funding from government sources, e.g. the Film Commission, and their VC comes through familiarity with the institutions of their own industry, e.g. film markets. As the “NZ name” becomes better known in global markets for some industries, e.g. success of NZ directed films like the Lord of the Rings trilogy and Whale Rider, it was felt that the environment for obtaining private capital has and would improve further and the demand would simultaneously rise with awareness of such funding sources. Values, philosophy, business integrity Although not necessarily gender specific, preserving the values and principles of the entrepreneur are important: I had values driven business because everybody . . . had to share the same values . . .

Similarly reviving or maintaining family traditions could be an important consideration that overtakes profits as the goal. Thus the business of one of our interviewees involved reviving an original brand that her grandfather had started. Being true to the quality of this brand was a prime consideration: I am the custodian of the brand, that’s the way I see it.

Another entrepreneur who now had scaled down her operation from a small-sized to a micro-enterprise employing four full-time staff, was determined to be self sufficient and not constrained by being “a process driven organization”. Her aim was to create “a client outcome organization” and to focus on and grow her staff. She had also set up a new venture which clearly illustrates this philosophy. Interestingly, her newest venture is a angel investment vehicle. She has funded a firm in a different geographic location but in the same core business area and placed two bright young local women at the helm under her guidance. Unlike the VC investors we profiled in the supply-side

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section of this article, a minimum return is not required. She focuses not only on growing the business but also mentoring the women. In this way indulging her passion for watching staff grow: It’s not about money . . . you do everything right and the money will flow . . . If you go around flashing that around, it’s bad for the staff to see . . . it’s much better that they get rewarded with bonuses and . . . for their team work and the value they bring to the business, not for the fees you are earning . . .

This woman had also been approached by multinationals to buy-out her business but she had never been “tempted” because they did not share her values. Being truthful, courageous and caring underpinned the values of another businesswoman who operates a high-profile, middle-sized company, operating on a project basis and engaging a large number of contractors. She said she was advised early in her career to say “no” more often than “yes” to potential clients in order to preserve business integrity and her established values: . . . it feels quite scary doing that when you first start out because you think gosh who am I to say I don’t want to work with you and um that’s going to be quite reactive isn’t it? . . . Most others are willing to give them everything so very quickly.

Commitment to cultural values and background was another aspect. A woman in the screen production industry is a case in point. Feeling she was in a position to make a difference, she made a conscious decision to move away from mainstream production and focus on producing Maori language children’s programmes – with subsequent great accolade. Maintaining control, autonomy As mentioned in the earlier section in relation to VC, where approaches from venture capitalists had been rejected due to the preference for independence, we found several entrepreneurs placed high importance on preserving control and autonomy. One entrepreneur illustrated this when commenting about possible government grants: This is a private business and there is no government funding whatsoever. We don’t want government funding. We don’t want strings attached to government funding and we don’t need it.

She financed the business (a private education facility) out of personal capital in the first instance and was fully supported in this by her husband. Later as the business grew, she reinvested a major portion of the profits, thereby assuring on-going autonomy. Surpluses achieved during the growth period were immediately ploughed back into the business: . . . whenever we get more funding we put it back into the business, put it back into improving facilities, improving the products that we are giving the students.

Another woman spoke of the “desire to control her own destiny”. Personal crises and events: the 3Ds What may be termed the 3Ds – death, divorce (or relationship break-ups) and disease (or health and medical conditions and disabilities of the entrepreneur or family members) have a strong impact on the business. For instance, the story of the business

founder who had successfully built up her original business to eight specialist stores confirmed that personal events and in this case also often the lack of readiness to cope with personal crisis, was a business turning point: My mother’s death and then the marriage split it was more than I could cope with . . . My major supplier bought the business. . . . Looking back, my network should have been stronger, my ability to raise money should have been stronger and I should have been in a situation where there was a readiness for what was, I guess the . . . my own personal vulnerability. The business had rested on my shoulders and when I had run out, the business had run out.

With a hint of regret, this woman went on to say that: Looking back now and knowing what I know now . . . I am absolutely clear that a) there were enough people who were interested in buying the business that didn’t know it was for sale. It could have gone on in a partnership and b) there would’ve been enough in the networks and the relationships that appeared, after that time, to have gone to the banks with a really good deal.

Another woman threw herself into her new business after the loss of a close relative: I was nurturing myself . . . just throwing myself into work . . . I just set a good pace and I wasn’t trying to make money . . .

Caring responsibilities A number of women in our sample expressed opinions about their caring responsibilities, family obligations and issues around the necessity to multi task in managing work and home lives. For example, one woman told us that she was forced to take her young son with her on frequent overseas trips: I own a company . . . am a sole trader . . . at the same time I had a young family, so there were all those other things, I had to ensure I could pay a nanny, I had to have a housekeeper . . . I had to have all those other things on top of that . . . that a man may not face . . .

Another woman who was a sole parent and had primary care responsibilities for her child, and was at the mature stage of her business, was seriously considering selling her business as a result. There was also a link between the stage of growth of the business and the life cycle stage of the women themselves. Thus, women with young children and caring responsibilities often were holding-off growing their business during this period of their lives. The point was also made that NZ lacked the support that some other countries provided for families and women working and caring for children. The cases of Singapore and China were among the country policies mentioned. Working “in” the business Here we make a distinction between working “in” the business versus “on” the business. Our interviews demonstrated that the majority of women entrepreneurs had a preference for working “in” the business, in that their role was hands-on involvement in the core business activity. They were indulging a “passion” for that activity. Many were working in their businesses because they gained great enjoyment and satisfaction from the actual work they did and they felt they had a valuable skill to contribute. We

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distinguish this passion for their work as a preference for working “in” the business as opposed to “on” the business, like for example some venture capitalists who buy into a share of the business. This distinction perhaps also gives another clue as to why so many women interviewees were focused internally and less interested in seeking outside financial assistance. Passion for what they did and the special skills they offered the business was a frequent premise. Another common theme for most of these women entrepreneurs was that growth and making money as an end in itself was neither their sole nor prime motivation.

Window study: Living Nature, Suzanne Hall Living Nature is a natural skin care and cosmetics company that is one of NZ’s very few large, internationally competitive (recent winner of Trade NZ Export Award – see MarketNewZealand.com, 2003) successful women-led NZ businesses. We use this as a dedicated example to highlight some of the aforementioned themes. It also aptly illustrates the varying financial capital requirements and solutions at different stages of a business and their need to fit with both growth aspirations as well as the entrepreneur’s values and evolving personal circumstances. Living Nature is a woman-led private company, employing just under a 100 full-time permanent employees, currently exporting to around 12 countries and with offices in the UK and Germany. It has been operating for 14 years. Our interview with the founder Suzanne Hall[6] provides the main information for this discussion. At the initial stage of the business the company received a kick-start from a government Business Development Grant[7]. This $20,000 grant had to be matched by an equivalent sum from the business owner. Product development and operating costs meant a growing bank overdraft. In common with many other micro businesses at the early stage, income from other employment sustained her business: I just sort of traded along basically managing by doing other things to fund the business. So I would work a couple of days running a clinic and that would fund the sort of activities of the business.

The “3Ds” theme comes through strongly when Suzanne’s relationship split-up with her partner whose property had been the security for the overdraft, necessitated a new source of finance. Burdened with a large bank overdraft, she approached the Prometheus Foundation for a loan. Resort to this lender, illustrates another of our themes – that of values, philosophy and integrity. Prometheus Ethical Finance lends only to socially valuable or environmentally friendly, ecologically beneficial projects throughout NZ. A condition for a loan is personal guarantees as security and also evidence of community support. No one, however, is allowed to be a guarantor for more than three thousand dollars and there have to be twice as many guarantors as the funding: I had to find one hundred and sixty thousand dollars worth of three thousand dollar guarantors so it was horribly humbling . . . but it was a really nice exercise and I got a lot of support because a lot of people believe in what we are doing. A lot of the health stores that we were involved with knew about Prometheus and knew the concept of it and thought it was a really good ethical concept and that’s how I funded that part of the business.

As her venture grew there was a realisation that an injection of more capital was needed, but maintaining control and independence (yet another of our themes coming through here) in running the business was important: . . . so it got very quickly to a point of thinking I am just not going to grow without having any capital involved and I really thought that I would like a partner and I would like someone who wasn’t involved in the business. I had a really bad experience you know with my previous partner that had ended up with a big debt to me and someone interfering with what I was doing and it was pretty scary. So I was a bit scared . . . and I left getting a partner involved in the business quite a lot longer than probably was sensible . . .

After “specific meditation” on the problem which was “ . . . the same concept really as writing a business plan but it is slightly more esoteric but it always works”, Suzanne had three investment offers, one of which she took up. Her new business partner received a 20 percent share in the business. Though she believed in the principles and products of the business, she did not want to be directly involved. Some time down the track however, once again personal circumstances, in this instance that of her business partner, forced a re-think of finance. Her seriously ill partner now wished to exit the business, and her share was sold to a trusted mutual friend, who also provided a further capital injection: Bill had always helped out and he had always been there to ask advice in the past anyway . . .

This move also fitted in with Suzanne’s growth aspirations for the company: I thought, well really I want us to be the world authority on natural skin care, I want us to not be restrained by capital . . . I want us to be ready to represent New Zealand in the world and be superb and I’m not going to do that by myself . . .

Simultaneously, however, innovative ways of assuring maintenance of control and her company philosophy were devised. Further expertise was also brought formally into the company: Bill had been saying to me “hey you know we are really keen to have a bigger part” but I was pretty scared in terms of, you know, he has a merchant bank and so I said to him “look I’m interested in changing the situation, but you as an individual could invest. Not your bank and not your company and also Peter, who is his analyst, I would really like him to become a shareholder and work part time in the business and in a set role and coz Peter is incredibly smart in that area and I had a lot of respect for him and thought if he is an investor as well, you know he is in a different role . . . I actually changed the whole structure of the business and Bill became a sixty percent shareholder. . . . and then what we did was we created A shares and B shares. . . . the A shares were voting shares only, not profit shares, and then the B shares were all the profits. So I had twenty five percent of the profit shares, Bill had sixty percent and I had all the A shares which gave me the majority of voting shares so I still got to control the business.

Four years down the track and with the business growing and more capital required, the A and B share arrangement which had suited the stage of the business in 2000, needed to be re-examined. Once again an innovative solution is being thought through to preserve the philosophical integrity of the business. A covenant in the constitution of the company would ensure this:

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. . . the thing with A and B shares is that the philosophy of the company was maintained and or improved on and the aims of us to be an ecological and ethical business, and you know a lot of that sometimes involved making decisions that are a lot more costly and not as commercial um so that was my concern. . . . So I am happy to change the A and B shares things now coz I have a lot of trust in how our relationship has built and how we all work together . . . so we are going to covenant into our constitution what are the things that absolutely have to stay in this company Living Nature for it to be who it is.

Suzanne also demonstrates the working “in” the business theme that was highlighted. As she put it: I’m the director, I guess the things that I do are look after the branding research and development and the creative so I’m founding and creative director but I’m also the research director.

She emphasised that she saw no barriers for women in business in NZ. In fact she believed being a woman was a definite advantage. As she put it, it is all about ability not gender: . . . it is often for me been to my advantage . . . I have never really been in an environment where being female has been a disadvantage but then I don’t even think that way myself. I don’t think of people as a gender. I just think it’s important to focus on your capability and to be measured on your capability . . . Just get out and do it!

Concluding remarks and implications The 2003 NZ Global Entrepreneurship Monitor study, which focused on women entrepreneurs, shows that while the total entrepreneurial activity (TEA) of males remained relatively constant at around 17 percent over the period 2001-2003, female TEA declined from 13 per cent to 10 percent. This declining female TEA has been highlighted as possibly the emergence of “a disturbing trend” (Cruickshank and Eden, 2004). The findings of our study, however, lead us to believe that the picture and outlook for women-owned business in NZ is quite promising. Several of our interviewees who had been in business for a fair length of time and in business in less “enlightened times”, felt that conditions for NZ women in business had improved considerably: I believe that women in business in terms of their networks and their strengths have grown enormously.

Building the VC and private equity industry and an awareness of the industry and other private capital sources, will undoubtedly enhance the use of these sources of finance by female entrepreneurs. Albeit within the limitations of our sample, there does not appear to be any overt gender bias in the NZ VC industry and although few in number, there are encouraging trends with some high profile women in evidence in the industry. Overall growth in the size of the VC industry will no doubt spill over to increase the share of high growth oriented women-led firms being funded through VC/private equity deals. Gender considerations, nevertheless could enter the picture covertly as evidenced by some stereotyping among supply-side interviewees. Both on the demand-side and supply-sides, however, the quality of the relationship between the

entrepreneur and the investor, clearly emerged as a significant gender-neutral consideration. At present, within the constraints of the current relative immaturity of the VC industry and in light of the small total number of deals conducted in the industry, it is difficult to provide any robust comment. A woman entrepreneur in the biotechnology industry did for instance express strong opinions on the “naivety” of the NZ VC and private equity market, especially in terms of understanding the concepts of intellectual property and global markets. She pointed to financing difficulties encountered by NZ biotechnology industries because of this deficiency. In particular, mention was made of the lack of understanding of scientific ideas and scientists by the financiers. However, we might add that such a shortcoming of the industry, if true, could well be mitigated in the future with the dedicated government focus and VC allocation to the “Biotech Fund”. Moreover in 2003, Health and Biosciences was already the leading sector with 27 per cent of investment by value although this was mainly due to a single deal (Ernst & Young, 2004, pp. 4, 8). An image used by one of the woman entrepreneur interviewees who had moved from running her own business to being a hands-on investor, as did several other women interviewees in relation to their businesses, was that of nurturing children and then letting them go to fend for themselves. We might therefore speculate that this predilection for nurturing and caring in women, coupled with their increased wealth and business acumen, could be a driver in stimulating the entry of women into the VC and private capital sector in the future. Given that in NZ women comprise 58 percent or more than half of informal investors compared to the international female proportion of 32 percent (Frederick, 2004), such speculation is not unreasonable. We firmly acknowledge that VC and private equity investment is relatively large-scale investment, yet NZ is a nation of SMEs, most with only modest private capital requirements. The informal angel investor market is well suited to the needs of NZ’s SMEs. Over the last three years, NZ’s ranking in the rate of informal investment in new and growing start-ups has been at the top of the developed country league (Frederick, 2004). Supporting the growth, access and awareness of entrepreneurial finance from informal sources is therefore vital. In this connection, the more holistic approach of the New Zealand VC Association to focus on informal investment as well as more formal VC is commendable[8]. Systemic factors such as an expanding high technology sector in NZ and an education system that produce more high achieving females in this sector, and narrowing of the “entrepreneurial gender gap” (women’s lower rate of participation in entrepreneurship relative to male participation) are integral to increasing both the supply and demand for private capital in relation to women entrepreneurs. The success of wider government policies such as overall R&D policy, the promotion of growth of SMEs and entrepreneurship, and other more specific initiatives, e.g. the New Zealand Trade and Enterprise (NZTE) Beachhead Programme[9] to stimulate links with NZ companies and other overseas firms, are all vital to growing private capital for entrepreneurs. These initiatives could hopefully connect NZ businesses not only to global supply chains but also to financial resources including VC. Avnimelech et al. (2004, p. 44) suggest, “VC emerged in co-evolution with a start-up culture and specific industries, especially those in the IT sector”. Thus NZ’s sector specific growth initiatives and a wider innovation systems approach in the policy

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arena could be a fruitful way ahead for providing the foundations for enhancing the fledgling VC and broader private capital industry to the benefit of a strengthened entrepreneurial platform. This is likely to then result in positive spillovers to women entrepreneurs. However, we emphasise the prudence of thoroughly researched multi-country experiences to guide the growth policy of the private VC and broader private capital market in NZ. We reiterate that “. . . carefully planned government policies that draw upon previous mistakes and lessons learned in other nations can have a positive impact on the development of a VC industry” (Avnimelech et al., 2004, p. 47). Finally, we highlight the need for further research on the important area of growth strategies of women entrepreneurs. More detailed sector-specific approaches would be very useful here. The paucity of female entrepreneurs in those high-technology, science-based industries which attract large-scale private capital, merits further analysis. We also signal the usefulness of further research on the role of the venture catalyst market in financing women entrepreneurs.

Notes 1. See www.nzvif.com 2. See e.g. www.mine.org.nz/ which is a New Zealand angel investor network. 3. The definition of SMEs varies across countries and within countries. Differentiation is often on the basis of numbers of full-time equivalent (FTE) employees. In New Zealand, government agencies often define “small” enterprises as those with 6-19.5 FTEs, “medium” are those with 20-49.5 FTEs and “large” have 50 and more employees. Micro enterprises are those with less than six employees. Some 267,000 businesses (97 per cent of all New Zealand enterprises) are SMEs, and they employ 43 per cent of all employees and contribute 39 per cent of this nation’s GDP; 84 per cent are micro businesses with fewer than six employees. 4. An online Directory based on the 5th edition of the New Zealand Biotechnology Directory published in 2000 by the New Zealand Biotechnology Association. (www.biotech.org.nz/dir/) It is a database of New Zealand biotechnology companies, university departments and research institutes (accessed April 2004, this web information is currently being up-dated). 5. WISE – Women in Self-Employment. See McGregor and Tweed (2002) for the most recent research on women’s networking in NZ. 6. Suzanne Hall has consented to her name and that of the company being used. 7. Currently New Zealand Trade and Enterprise (NZTE) administers Enterprise Development Grants aimed to assist entrepreneurs and companies with less than 20 full-time equivalent staff to gain additional business skills and obtain external expertise and assistance in developing business projects. www.biz.org.nz/public/content.aspx?sectionid= 38&contentid=811 accessed 10 May 2003. 8. The NZVCA is looking at ways to build expertise in this area through an angel investor course and educational materials (Ernst & Young, 2004, p. 13). 9. The Beachhead Programme is designed to assist with setting up of overseas offices and intended to provide gateways to emerging NZ firms to gain a foothold in overseas markets. Thus, for example, the information, communications and technology industry has utilised the Beachhead scheme to establish an office in Silicon Valley and another office in Wales is being investigated. See hyperLINK, No. 37, 19 February, 2004, available at: www. canterburysoftware.org.nz/news04feb19.htm#feature2 (accessed 11 May).

References Aldrich, H. (1989), “Networking among women entrepreneurs”, in Hagen, O., Rivchum, C. and Sexton, D. (Eds), Women-Owned Business, Praeger, New York, NY. Avnimelech, G., Kenney, M. and Teubal, M. (2004), “Building venture capital industries: understanding the US and Israeli experiences”, Berkeley Roundtable on the International Economy, 1 March, paper BRIEWP160, available at: http://repositories.cdlib.org/brie/ BRIEWP160. Biotechnology Taskforce (2003), Growing the Biotechnology Sector in New Zealand: A Framework for Action, Report from the Biotechnology Taskforce, NZTE, Auckland. Boje, D. (2001), Narrative Methods for Organizational & Communication Research, Sage, London. Brush, C., Carter, N., Gatewood, E., Greene, P. and Hart, M. (2004), Clearing the Hurdles: Women Building High-Growth Businesses, Prentice-Hall, Englewood Cliffs, NJ. Buttner, E.H. and Rosen, B. (1989), “Funding new business ventures: are decision makers biased against women entrepreneurs?”, Journal of Business Venturing, Vol. 4 No. 4, pp. 249-61. Campbell-Hunt, C., Brocklesby, J., Chetty, S., Corbett, L., Davenport, S., Jones, D. and Walsh, P. (2001), World Famous in New Zealand: How New Zealand’s Leading Firms Became World-Class Competitors, Auckland University Press, Auckland. Carter, S., Shaw, E., Wilson, F. and Lam, W. (2004), “Bank financing of entrepreneurs: a six-stage qualitative methodology”, in de Bruin, A. and Palakshappa, N. (Eds), Proceedings of the Qualitative Research in Business Symposium, Massey University, Auckland, 3 December,. Clark, H. (2002), “Growing an innovative New Zealand”, available at: www.executive. govt.nz/minister/clark/innovate/innovative.pdf (accessed 11 August). Cruickshank, P. and Eden, S. (2004) , “Widening entrepreneurial gender gap in New Zealand?”, paper presented at AGSE-Babson Regional Entrepreneurship Research Exchange Forum, Swinburne University of Technology, Melbourne, 24-25 February. Czarniawska, B. (1997), Narrating the Organization: Dramas of Institutional Identity, University of Chicago Press, Chicago, IL. de Bruin, A. (2003), “State entrepreneurship”, in de Bruin, A. and Dupuis, A. (Eds), Entrepreneurship: New Perspectives in a Global Age, Ashgate, Aldershot, pp. 148-68. de Bruin, A. and Lewis, K. (2004), “Toward enriching united career theory: familial entrepreneurship and co-preneurship”, Career Development International, Vol. 9 No. 7, pp. 638-46. Dupuis, A. and de Bruin, A. (2004), “Women’s business ownership and entrepreneurship”, in Spoonley, P., Dupuis, A. and de Bruin, A. (Eds), Work and Working in Twenty-first Century New Zealand, Dunmore Press, Palmerston North, pp. 154-79. Dwyer, M., Rose, D. and Sowman, R. (1985), “Self employment and small businesses”, Planning Paper, No. 22, New Zealand Planning Council, Auckland. Ernst & Young (2004), The NZ Venture Capital Monitor 2003, NZ Venture Capital Association Inc., Newmarket, Auckland. Frederick, H. (2004), The Unitec Global Entrepreneurship Monitor 2003/2004: Toward High Growth Enterprise in New Zealand, Unitec New Zealand’s Centre for Innovation & Entrepreneurship Research Report Series, Vol. 3 No. 1, Unitec New Zealand, Auckland. Gatewood, E.J., Brush, C.G., Carter, N.M., Greene, P.G. and Hart, M.M. (2003), Venture Capital, Women’s Entrepreneurship and High Growth Ventures: An Annotated Bibliography, ESBRI, Stockholm.

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Greene, P., Brush, C., Hart, M. and Saparito, P. (1999), “An exploration of the venture capital industry: is gender an issue?”, in Reynolds, P.D., Bygrave, W., Manigart, S., Mason, C., Meyer, G.D., Sapienza, H. and Shaver, K.G. (Eds), Frontiers of Entrepreneurship Research, Babson College, Wellesley, MA. Hunter, I. and Wilson, M. (2004), “Tapping our entrepreneurial heritage”, University of Auckland Business Review, Vol. 5 No. 1, pp. 1-11. Hutchinson, P.J. (1978), “Financial assistance to small firms: the American experience”, National Westminster Bank Quarterly Review, November, pp. 50-62. Infometrics (2000), “New Zealand’s venture capital market, Working Paper, No. 00/19, New Zealand Treasury, Wellington. Infometrics (2004), New Zealand’s Angel Capital Market: The Supply Side, report prepared by Infometrics Ltd for the Ministry of Economic Development, June, Infometrics Ltd, Wellington New Zealand. Johansson, A.W. (2004), “Narrating the entrepreneur”, International Small Business Journal, Vol. 22 No. 3, pp. 273-93. Johns, B.L., Dunlop, W.C. and Lamb, K.M. (1976), Finance for Small Business in Australia: An Assessment of Adequacy, National Small Business Bureau, Department of Trade and Industry, Canberra. McGregor, J. and Tweed, D. (2002), “Profiling a new generation of female small business owners in New Zealand: networking, mentoring and growth”, Gender, Work and Organization, Vol. 9 No. 4, pp. 420-39. Mallon, M. and Cohen, L. (2001), “Time for a change? Women’s accounts of the move from organizational careers to self-employment”, British Journal of Management, Vol. 12 No. 3, pp. 217-30. MarketNewZealand.com (2004), “Overseas success of skincare products earn living nature an export award”, available at: www.marketnewzealand.com/mnz/News/Story. aspx?sectionID=4559&contentID=5536 (accessed 7 May). Marshall, J. (2000), “Living lives of change: examining facets of women managers’ career stories”, in Peiperl, M., Arthur, M., Goffee, R. and Morris, T. (Eds), Career Frontiers: New Conceptions of Working Lives, Oxford University Press, New York, NY. Olm, K., Carsrud, A. and Alvey, L. (1988), “The role of networks in new venture funding for the female entrepreneur: a continuing analysis”, in Kirchoff, B.A., Long, W.A., McMullan, W.E., Vesper, K.H. and Wetzel, W.E. Jr (Eds), Frontiers of Entrepreneurship Research, Babson College, Babson Park, MA. Sapienza, H. (1992), “When do venture capitalists add value?”, Journal of Business Venturing, Vol. 7 No. 1, pp. 9-28. Wright, M., Robbie, K. and Ennew, C. (1997), “Venture capitalists and serial entrepreneurs”, Journal of Business Venturing, Vol. 12 No. 3, pp. 227-49. Zacharakis, A.L. and Shepherd, D.A. (2001), “The nature of information and over-confidence on venture capitalists’ decision making”, Journal of Business Venturing, Vol. 16 No. 4, pp. 311-32.

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Biological sex, stereotypical sex-roles, and SME owner characteristics John Watson and Rick Newby

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The Department of Accounting and Finance, The University of Western Australia, Crawley, Australia Abstract Purpose – To investigate the relationship between biological sex (male or female) and stereotypical sex-roles (masculinity and femininity) and to determine which might be more appropriate to use when examining small to medium-size (SME) owner characteristics such as: locus of control (internal, powerful others and chance); need for achievement; risk-taking propensity; and preference for innovation. Design/methodology/approach – Data for this study came from 673 usable responses (517 males, 156 females) to a survey of the attitudes and expectations of a random sample of SME owner-operators in Western Australia. Findings – It was found that femininity was significantly higher for women compared with men, but that there was no significant difference for masculinity. Results also indicate that, unlike femininity, masculinity is highly correlated with all of the “traditional” psychological traits. As a result, only one significant difference between men and women (based on their biological sex) was found; men had a higher risk-taking propensity. Originality/value – The results presented in this study confirm the belief that biological sex may not be an appropriate discriminator when examining differences in the psychological attributes of SME owners. Results suggest that the use of masculine and feminine traits might prove more useful in future research on this issue. Further, given the masculinity bias inherent in most of the psychological attributes typically found in the SME literature, it is suggested that Norman’s Big Five (being more gender-neutral) might be more appropriate in examining differences in SME owner characteristics. Keywords Gender, Sex and gender issues, Psychological research, Risk management Paper type Research paper

Introduction Historically, gender has been considered a uni-dimensional construct measured on the basis of an individual’s biological sex. Men were expected to be the providers and women the care-givers. As such, Schein’s (1973; 1975) argument of think manager – think male was seen as a self-evident truth. The feminist movement of the 1960s helped change this common perception so that a lifetime working career and self-achievement became more acceptable for women (Helson et al., 1995). This led to a number of researchers challenging the belief that psychological gender and biological sex were equivalent. Arguments were made that maleness (measured by psychological masculinity or task focus “getting the job done”, O’Neill and Blake-Beard, 2002, p. 55) and femaleness (measured by psychological femininity or relationship focus “concern for the welfare of others”, O’Neill and Blake-Beard, 2002, p. 55) were two separate dimensions (Constantinople, 1973). The development of the Bem Sex-Role Inventory (BSRI, Bem, 1974) was based on this notion of gender being a multi- (rather than a uni-) dimensional construct. Empirical results supported this view, with Bem (1974) finding

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that psychological masculinity and femininity did not necessarily correlate with biological sex (men and women self-rated themselves as high or low on both scales). Bem (1974) subsequently classified her respondents into four groups: androgynous (high masculinity, high femininity); masculine (high masculinity, low femininity); feminine (low masculinity, high femininity); and undifferentiated (low masculinity, low femininity). Psychologically androgynous types were argued to be more effective given their high task motivation and relationship orientation (for example, see Baril et al., 1989; Powell and Butterfield, 1979), causing what Willemsen (2002, p. 385) described as “the feminization of management,” or calls for managers in modern organizations to become more collaborative, more feminine, in their leadership style (Kanter, 1989; Mintzberg, 1989; Peters, 1987). However, most studies on the relationship between gender and the psychological dimensions of small- to medium-size (SME) owners have only used biological sex as their discriminant variable (for example, see Bird and Sapp, 2004; Scherer et al., 1990). In addition, it has been suggested that many of the psychological dimensions studied have a task-oriented (masculine) focus; reinforcing the Schein (1973) stereotype and possibly invalidating any results. These two concerns with the majority of prior research (a failure to recognize sex-roles as an alternate measure of gender and a possible gender bias in the psychological dimensions commonly used in studies of SMEs) led us to the following research questions: RQ1. How well do the sex-roles of SME owners relate to their biological sex? RQ2. In terms of the “traditional” psychological scales often used in SME research (locus of control, manifest needs, risk-taking propensity and preference for innovation), will a measure of the SME owner’s psychological masculinity and femininity be likely to provide more insights than simply using biological sex; RQ3. Do these “traditional” psychological scales have a masculinity bias? RQ4. If so, will the use of different psychological concepts that are measured at a higher level of abstraction (Digman, 1990) remove this masculine bias? Reference to the current psychology literature suggests that Norman’s (1963) five-factor taxonomy of personality attributes could prove most useful in answering this last research question. Commonly referred to as the Big Five (see, for example, Barrick and Mount, 1991; de Fruyt and Merveide, 1999; Hurtz and Donovan, 2000; Judge et al., 2002; LePine and van Dyne, 2001; Lippa, 1991; Schmit and Ryan, 1993; Thoresen et al., 2004), the constructs of emotional stability (also known as negative emotion or neuroticism), extraversion (sociability, social adaptability, surgency), culture (intelligence, openness, openness to experience), agreeableness (conformity, empathy, friendliness, likability), and conscientiousness (achievement, orderliness, prudence, self control) have all been found useful even though they subsume “more specific personal attributes, dispositions, habits and behaviors” (Bateman and Crant, 1993, p. 106; see also Boudreau et al., 2001; Cannella and Monroe, 1997; Olver and Mooradian, 2003). Indeed, Roberts and Robins (2000, p. 1284) noted that the Big Five “generalize across many different cultures, and predict a wide range of outcomes, including job performance, occupational status [and] academic achievement.” This

suggests that the Big Five might be better suited (than the more detailed “traditional” psychological scales) to examining gender differences in SMEs. Gender roles Most observers in Western society would agree that the role of men and women in the labor force has changed noticeably since the early 1970s. Coupled with a dramatic rise in labor participation rates and higher educational standards (The Worklife Report, 1993; Blau, 1998; Henkens et al., 2002; Jaumotte, 2003; Konrad and Harris, 2002), women have increasingly become involved in previously male-dominated, task-oriented, occupations (Auster and Ohm, 2000). At the same time, male participation in previously female-dominated, relationships-based, occupations has also become more accepted (Cejka and Eagly, 1999; Goldberg, 1994); with men increasingly being concerned with daily domestic tasks (Bianchi et al., 2000), including taking more direct care of their children (Milkie et al., 2002). Not surprisingly, this movement in both the workforce and domestic roles played by men and women has been paralleled by a liberalization of gender roles; defined as “the attitudes, behaviors, rights and responsibilities that a society associates with each sex” (Konrad and Harris, 2002, p. 260). Using a highly homogenous (US undergraduate) based-sample of self-rating BSRI studies from 1973 to 1995, Twenge (1997) found that the masculinity scores for women showed a clear linear increase over time, significantly greater than a similarly clear linear increase in the masculinity scores for males. The femininity scores for men also increased over this period (consistent with the liberalized perspective that males can nurture) but the femininity scores for females remained virtually the same. The logical consequence of these movements, therefore, was an increasing similarity between the average BSRI scores for men and women (particularly on the masculinity dimension) over the period of Twenge’s (1997) meta-analysis. Indeed, the narrowing of the difference between males and females for masculinity was so marked that, in her last two samples, Twenge (1997, p. 316) reported that “men and women did not have significantly different mean scores on this measure.” However, the femininity scores in those samples were still significantly higher for women. Psychological attributes and gender The conceptualization of managers as male has resulted in modern management and organization theory being criticized for being based on masculine values and concepts (“men seem to be the norm and women are ‘the other’”, Lamsa et al., 2000, p. 203). As such, “business reverberates with the great male sagas of conquest of new markets and . . . campaigns to launch new products” (Gherardi, 1994, p. 591). Such viewpoints reflect Hofstede’s (1980; 1983; 1991; 1993; 1998) various works classifying Western cultures as individualistic and highly masculine, causing traditional social values to become “the importance of showing off, of performing, of achieving something visible, of making money, of ‘big is beautiful’” (Hofstede, 1983, p. 85). Our perspective of the successful business person has, therefore, been heavily influenced by these culturally dominant masculine principles, where size, growth and other economic measures of performance dominate. This pervasive masculine perspective of business may also have impacted SME research of the psychological antecedents of SME ownership and success. A review of

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the literature shows that many studies designed to identify psychological differences between entrepreneurial and non-entrepreneurial business owners have concentrated on personality aspects that reflect a masculine perspective (for example, see Begley and Boyd, 1987a,b; Begley, 1995; Collins et al., 2004; Cromie, 1987; Cromie et al., 1992; Cromie and O’Donaghue, 1992; Cromie, 2000; Shane et al., 2003; Stewart and Roth, 2001; Vecchio, 2003). This has the potential to cause studies examining the impact of gender on SME performance to be self-defeating. If gender is indeed a two- (or multi-) dimensional construct and not a uni-dimensional construct, then focusing on task achievement, goal accomplishment, assertiveness and self-interest (all masculine traits) is likely to ignore the potential impact of feminine traits on SME performance; resulting in the finding of no differences by biological sex (given the increasing similarity in masculinity scores for men and women). This potential problem with the “traditional” psychological traits commonly used in prior SME studies prompted us to check for gender differences in our sample of SMEs using Norman’s (1963) Big Five. The Big Five model has proved to be the most investigated psychological paradigm over the past two decades (“If a consensual structure of traits is ever to emerge, the five-factor model is probably it”: Judge and Ilies, 2002, p. 798). While it has its skeptics (see, for example, Block, 1995; 2001; McAdams, 1992), it now appears to hold pre-eminence in personality research (“there is widespread agreement about the five personality dimensions and their content”: Barrick et al., 2003, p. 46). Besides its popularity, we had three further reasons for using Norman’s (1963) Big Five. First, it has been shown to be free of any gender-role bias in the wider population (for example, see Lippa, 1991; Marusic and Bratko, 1998). Second, it has been shown to be free of any self-reporting or instrument bias (McCrae and Costa, 1987, 1992). Finally, the concepts measured in the Big Five are not arcane or academically obscure, but are interpretable in a general sense (Sneed et al., 1998) and, therefore, are likely to be easily understood by those with an interest in the SME sector. Methodology Sample selection Data for this study came from an “omnibus” survey of the attitudes and expectations of a random sample of SME owner-operators throughout Western Australia (based on a sampling frame drawn from “White Page” telephone directories). A total of 702 SME owner-operators responded to a mail questionnaire, 673 of which proved to be sufficiently complete for this analysis (517 males, 156 females). The survey instrument consisted of 16 pages and contained 247 items under the following headings: Your business’s performance (using single-item measures of satisfaction); Your business’s strategy (based on the Miles and Snow, 1978, typology); Your attitudes (Bem, 1977; Budner, 1962; Costa and McCrae, 1992; Jackson, 1976; Lumpkin, 1988; Steers and Braunstein, 1976; Weiss et al., 1967); Your goals and expectations (based on Cummins, 1997; Kuratko et al., 1997; and Woodliff et al., 1999); Your details (owner-operator demographics such as age, sex, highest educational qualification etc.); Your business’s details (firm demographics such as industry, business age, business location etc.); and Your business’s performance (revenue and profitability). The overall response rate of 19.6 percent was considered reasonable given the length of the questionnaire and the nature of the population. Tests for non-response bias were conducted using the usual proxy of comparing early and late respondents, with no significant differences detected.

Measurement of variables – gender Sex: respondents were asked to indicate their sex, with males coded 1 and females coded 0. Sex-roles: we assessed an individual’s masculinity and femininity using the short form of Bem’s (1977) Sex-Roles Inventory. This reduced version of the scale contained ten items for each dimension. As each item was measured by a seven-point Likert-type scale ranging from 1 (never or almost never true) to 7 (always or almost always true), the possible values for masculinity and femininity ranged from 10 to 70. Scale reliabilities, as measured by Cronbach’s (1951) alpha, were 0.84 for masculinity and 0.90 for femininity. Measurement of variables – “traditional” psychological attributes The “traditional” psychological scales used in this study were selected based on their prior use in the SME literature. In selecting the scales we concentrated on two types of prior studies, namely: those that explicitly sought to find differences between male and female SME owners (and their firms); and those that controlled for such differences by using owner-operator sex as a moderating variable. This review revealed seven common traits of interest: need for achievement (as used by Carland and Carland, 1991, in their analysis of differences between male and female entrepreneurs and managers); need for power (as applied by Lefkowitz, 1994, in his research of the general working population); risk-taking propensity (see the evaluation of SME owner-operators and managers by Masters and Meier, 1988); internal locus of control (as employed by Kalleberg and Leicht, 1991, in their investigation into the impact of owner-operator sex on business survival and success; see also Loscocco et al., 1991); powerful others locus of control and chance locus of control (see the study of entrepreneurs by Kaufmann et al., 1995); and preference for innovation (as used by Stewart et al., 1999, in their differentiation between the entrepreneur and the small business owner). Following is a brief description of how these various attributes were measured in this study. Manifest needs: theoretical justification for the inclusion of need for achievement and need for power, in examining SME owner-operators, comes from McClelland (1961, 1975). McClelland (1961, 1975) argued that while high need for achievement was a primary stimulus for an individual to become entrepreneurial (McClelland, 1961), the effectiveness of their organization also depended upon the individual’s level of power motivation (McClelland, 1975). Both need for achievement and need for power were assessed with the relevant items from the frequently used Steers and Braunstein’s (1976) Manifest Needs Questionnaire. Consisting of five items for each manifest need, measurement was by a seven-point Likert-type scale with responses ranging from 1 (strongly disagree) to 7 (strongly agree). The possible values for these two variables, therefore, ranged from 5 to 35. Cronbach’s (1951) alpha was 0.47 for need for achievement and 0.66 for need for power. Risk-taking propensity: “conceptualized as one’s orientation toward taking chances in a decision-making situation” (Sexton and Bowman, 1985, p. 13), risk-taking propensity has been defined in the SME literature as a willingness to take moderate risks (Begley, 1995). Following the lead of Busenitz and Barney (1997) and Stewart et al. (1999), risk-taking propensity was assessed using statements from the Risk sub-scale of the Jackson Personality Inventory (1976). Our data collection consisted of six items, each measured by a seven-point Likert-type scale ranging from 1 (strongly disagree) to

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7 (strongly agree), giving a possible value for this variable ranging from 6 to 42. Cronbach’s (1951) alpha was 0.50. Locus of control: refers to the degree to which a person believes they are in charge of their destiny. Locus of control has been applied in the SME domain on the assumption that entrepreneurs will presuppose they have a capacity to influence business outcomes through their own abilities, efforts, or skills. Originally conceived by Rotter (1966) as a uni-dimensional scale with “internal” (I’m in charge) and “external” (I’m not in charge) end-points, subsequent empirical work by Levenson (1974; 1981) suggested that locus of control comprises three dimensions; namely the internal perspective of Rotter (1966) and two separate “external” factors, powerful others and chance. Internal, powerful others, and chance locus of control were assessed with items from Lumpkin’s (1988) abbreviated version of Levenson’s (1981) Locus of Control Scale. This shortened version of the original scale contained three items from each of the internal, powerful others, and chance sub-scales. Measurement was based on a seven-point Likert-type scale ranging from 1 (strongly disagree) to 7 (strongly agree). Therefore, the possible value for each of the locus of control dimensions ranged from 3 to 21. Cronbach’s (1951) alpha for each of the three scales was 0.52 for internal, 0.49 for powerful others and 0.34 for chance. Preference for innovation: our conceptual justification for including this last variable in our list of ‘traditional’ psychological attributes was based on the belief that desire for innovation is central to the Schumpeterian view of the entrepreneur (Schumpeter, 1934) and of entrepreneurial endeavour (Carland et al., 1984). Consistent with previous SME studies (for example, see Mueller and Thomas, 2001; Stewart et al., 1999), preference for innovation was assessed using statements from the Innovativeness sub-scale of the Jackson Personality Inventory (1976). Our data collection consisted of seven items, each measured by a seven-point Likert-type scale ranging from 1 (strongly disagree) to 7 (strongly agree), giving a possible value for this variable ranging from 7 to 49. Cronbach’s (1951) alpha was 0.73. Measurement of variables – Norman’s (1963) Big Five personality traits Norman’s (1963) Big Five personality traits were measured by the short form of Costa and McCrae’s (1992) NEO-PIR scale. Previously applied in the SME setting by Morrison (1996; 1997) and Willock (1999), this short-form version measures traits named: neuroticism (comprising the facets of anxiety, hostility, depression, self-consciousness, impulsiveness, and vulnerability – higher values indicate higher levels of “negativity”); extraversion (warmth, gregariousness, assertiveness, activity, excitement seeking, and positive emotions – higher values indicate more “demonstrativeness”); openness to experience (fantasy, aesthetics, feelings, actions, ideas, and values – higher values suggest a greater “willingness to receive ideas”); agreeableness (trust, straightforwardness, altruism, compliance, modesty, tender-mindedness – higher values indicate increased “affability”); and conscientiousness (competence, order, dutifulness, achievement striving, self-discipline – higher values imply greater “assiduousness”). With 12 items for each trait and each item measured on a five-point Likert-type scale ranging from 1 (strongly disagree) to 5 (strongly agree), possible values for each trait ranged from 12 to 60. Cronbach’s (1951) alpha was: 0.81 for neuroticism, 0.73 for extraversion, 0.70 for openness to experience, 0.69 for agreeableness and 0.80 for conscientiousness.

Analysis and results Descriptive details for the sample, grouped by biological sex, are provided in Table I. The table shows no significant differences between men and women based on whether they founded their businesses or whether that business was in a metropolitan or regional location. However, there were significant differences between the two groups in terms of: age of the owner (the males were older on average); the length of time they had operated their firms (a greater proportion of women had operated their firm for less than five years and a greater proportion of men had operated their firm for more than ten years); and industrial classification (there was a higher proportion of men in construction, with more women in retail trade, accommodation, cafes and restaurants and other services). Male-owned businesses were also significantly larger than female-owned businesses, measured either in terms of total revenue or the number of equivalent full-time staff. Demographic variables

Men

Women

135

All firms

Age of owner-operator Mean (years)

48.3 42.9 t-statistic ¼ 5.899; two-tailed p-value ¼ 0.000 Years current owner has operated the firm Less than 5 years 140 27% 68 5 years to 10 years 135 26% 32 10 years and over 242 47% 56 Total 517 156 x2 ¼ 15.306; two-tailed p-value ¼ 0.000 Establishment status Founders 320 62% 86 Non-founders 197 38% 70 Total 517 156 x2 ¼ 2.293; two-tailed p-value ¼ 0.130 Location Metropolitan 367 71% 104 Rural 150 29% 52 Total 517 156 x2 ¼ 1.065; two-tailed p-value ¼ 0.302 Industry Manufacturing 42 8% 7 Construction 82 16% 8 Wholesale trade 29 6% 5 Retail trade, accommodation, cafe´s and restaurants 111 21% 47 Property and business services 113 22% 28 Other services 83 16% 45 All other industries 57 11% 16 Total 517 156 x2 ¼ 28.946; two-tailed p-value ¼ 0.000 Size (revenue) Mean (000s) $1,352 $575 t-statistic ¼ 3.521; two-tailed p-value ¼ 0.000 Size (equivalent full-time staff) Mean (full-time equivalents) 8.5 6.3 t-statistic ¼ 1.975; two-tailed p-value ¼ 0.049

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47.1 44% 20% 36%

208 167 298 673

31% 25% 44%

55% 45%

406 267 673

60% 40%

67% 33%

471 202 673

70% 30%

5% 5% 3% 30% 18% 29% 10%

49 90 34 158 141 128 73 673

7% 13% 5% 24% 21% 19% 11%

$1,194 8.0

Table I. Male/female demographic comparisons

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Table II provides the results of tests designed to answer our four research questions. Panel A reports the outcomes of independent sample t-tests of the sex-role differences (masculinity and femininity) between the males and females in our sample. We found that femininity was significantly higher for women compared to men, but that there was no significant difference for masculinity (a result consistent with Twenge’s (1997) meta-analysis). These results suggest that we could extend Schein’s (1973; 1975) argument of think manager – think male, to think SME owner – think masculine. Such a conclusion is consistent with the evidence of Kolb (1999) and Kirchmeyer (2002) that the display of masculine traits is considered necessary for career advancement. Panel B of Table II presents the results of our tests of the seven traditional psychological scales and their relationship both to biological sex and to masculinity and femininity. The results in the second and third column show that the male and female SME owners in our sample were significantly different on only one scale; the men had a greater propensity to take risks than the women. Somewhat unexpectedly (given the stereotypical view of men), the men in our sample did not have a significantly higher need for achievement, need for power, or internal locus of control than the women. If, therefore, we assume that these traditional scales measure appropriate psychological traits affecting SME ownership and success, then either gender has limited impact on these traits, or biological sex poorly discriminates across these scales (and hence the use of sex-roles may be more appropriate for this purpose). The results presented in Panel B support the latter interpretation. The Pearson correlations indicate that all seven “traditional” scales were significantly related to masculinity, with two of the scales (internal locus of control and preference for Means scores for Men Women

Table II. Sex, sex-roles and psychological attributes

Panel A: Sex-roles (Bem, 1977) Masculinity Femininity Panel B “Traditional” scales: (Jackson, 1976; Lumpkin, 1988; Steers and Braunstein, 1976) Internal locus of control Powerful others’ locus of control Chance locus of control Need for achievement Need for power Risk-taking propensity Preference for innovation Panel C: Norman’s (1963) Big Five (Costa and McCrae, 1992) Neuroticism Extroversion Openness to experience Agreeableness Conscientiousness Notes: *significantly different/correlated at 0.05a; *** significantly different/correlated at 0.001a

Pearson’s r for Masculinity Femininity

50.15 52.19

49.47 57.09***

17.21 9.05 11.82 25.54 25.07 27.99 32.24

17.38 8.58 11.63 25.02 24.55 26.72** 32.17

0.412*** 20.215*** 0.132*** 0.547*** 0.576*** 0.348*** 0.364***

0.182** 2 0.068 2 0.006 0.062 0.045 2 0.024 0.189***

29.36 40.87 37.59 42.72 46.58

30.24 42.26** 39.73*** 44.89*** 48.27***

20.199*** 0.348*** 0.128*** 20.351*** 0.274***

2 0.115** 0.319*** 0.195*** 0.424*** 0.274***

**

significantly different/correlated at 0.01a;

innovation) also significantly correlated with femininity. Therefore, in answer to our second research question, it would appear that (compared to biological sex) knowledge of an SME owner’s sex-role provides greater insight into their psychological make-up. However, given that all the psychological scales were significantly correlated with masculinity, while only two were significantly correlated with femininity, suggests that the ‘traditional’ psychological scales have a masculine bias. Furthermore, it should be noted that for the two scales that were significantly correlated with femininity, the correlation with masculinity was significantly higher (that is, the two correlations were significantly different at p , 0:001, not reported in the table). The high correlations between the “traditional” psychological scales and masculinity (but not femininity) and our earlier finding that there was no significant difference in the masculinity scores for the men and women in our sample, means that it is not surprising that there were few differences in these “traditional” psychological attributes by biological sex. Given these findings, we conducted further tests to see if the higher-level attributes captured by Norman’s (1963) Big Five personality traits avoided this masculinity bias. Panel C of Table II suggests they do, as all correlations reported in the fourth (masculinity) and fifth (femininity) columns were significant. For four of the Big Five traits the correlations with masculinity and femininity did not differ significantly (that is, p . 0:05 for each pair of correlations, not reported in the table), suggesting that negative emotion, extraversion, openness to experience and conscientiousness were not biased towards either masculinity or femininity. Agreeableness was the only attribute where there was a significant difference in the correlations; agreeableness was significantly negatively correlated with masculinity and significantly positively correlated with femininity. The first two columns of Panel C also report significant differences in the mean scores for each of the Big Five personality traits by biological sex. These results are consistent with the known outcome that females score each of the Big Five dimensions higher than males (Egan et al., 2000). Therefore, beyond confirming the validity of the Costa and McCrae (1992) scales, this result has no bearing on the findings of this study. Conclusion The results presented in this study confirm our belief that biological sex may not be an appropriate discriminator when examining differences in the psychological attributes of SME owners by gender. Our results suggest the use of masculine and feminine traits may prove more useful to future researchers interested in this issue. It would seem that over the last three decades the differences between men and women have narrowed such that, in today’s society, male and female SME owners score similarly in terms of their masculine traits. This is consistent with evidence indicating that female managers follow the Schein (1973) stereotype in treating the display of masculine traits as important for their career progression (Kirchmeyer, 2002; Kolb, 1999; Tharenou, 2001), and also with the suggestion that the same might be true for the female self-employed (Fagenson and Marcus, 1991). This was certainly the case in our sample of male and female SME owners, where we found no significant difference in their masculinity scores. A second conclusion from our results is that the “traditional” psychological attributes used in the SME literature appear to be biased towards masculinity. Given this finding, and the similarity in the masculinity scores for the males and females in

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our sample, it is not surprising that previous studies examining gender differences in psychological attributes within the SME setting have resulted in few significant findings. What is somewhat surprising is that the “traditional” constructs chosen by SME researchers have ensured that any impact of femininity on the psychological traits of SME owners has been largely ignored. This seems inconsistent with the argument that good managers should be androgynous, that is, high in terms of both masculinity and femininity (Powell and Butterfield, 1979), and suggests that the “traditional” psychological attributes used in SME research should be replaced by ones that are more gender-neutral. Based on our findings we would argue that Norman’s (1963) Big Five might be appropriate for this purpose; especially given the degree to which personality research has been impacted by this five-factor model over the past 20 years. Indeed, we believe that SME research to date has been atypical in its lack of use of the Big Five when measuring individual differences. We found widespread use of the Big Five in the leadership literature (see, for example, Cannella and Monroe, 1997; Judge and Bono, 2000; Kickul and Neuman, 2000) but not in the SME literature. We would expect that attributes that made for a good leader might also be important for success as a SME owner. In summary, our results suggest that using masculinity and femininity rather than biological sex, and using the Big Five instead of the “traditional” psychological scales of locus of control (internal, powerful others and chance), need for achievement, risk-taking propensity, and preference for innovation, might prove more useful in future research on issues concerned with SME owner characteristics and the relationship between these characteristics and SME owner objectives and firm performance. References Auster, C.J. and Ohm, S.C. (2000), “Masculinity and femininity in contemporary American aociety: a re-evaluation using the Bem Sex-Role Inventory”, Sex Roles, Vol. 43 No. 7/8, pp. 499-528. Baril, G.L., Elbert, N., Mahar-Potter, S. and Reavy, G.C. (1989), “Are androgynous managers really more effective?”, Group and Organization Studies, Vol. 14 No. 2, pp. 234-49. Barrick, M.R. and Mount, M.K. (1991), “The Big Five personality dimensions and job performance: a meta-analysis”, Personnel Psychology, Vol. 44 No. 1, pp. 1-26. Barrick, M.R., Mount, M.K. and Gupta, R. (2003), “Meta-analysis of the relationship between the five-factor model of personality and Holland’s occupational types”, Personnel Psychology, Vol. 56 No. 1, pp. 45-74. Bateman, T.S. and Crant, J.M. (1993), “The proactive component of organizational behavior: a measure and correlates”, Journal of Organizational Behavior, Vol. 14 No. 2, pp. 103-18. Begley, T.M. (1995), “Using founder status, age of firm, and company growth-rate as the basis for distinguishing entrepreneurs from managers of smaller businesses”, Journal of Business Venturing, Vol. 10 No. 3, pp. 249-63. Begley, T.M. and Boyd, D.P. (1987a), “A comparison of entrepreneurs and managers of small business firms”, Journal of Management, Vol. 13 No. 1, pp. 99-108. Begley, T.M. and Boyd, D.P. (1987b), “Psychological characteristics associated with performance in entrepreneurial firms and smaller businesses”, Journal of Business Venturing, Vol. 2 No. 1, pp. 79-93.

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Clare Brindley Department of Business and Management, MMU Cheshire, Manchester Metropolitan University, Crewe, UK Abstract Purpose – This paper provides a comprehensive summary of the academic literature with regard to risk and its role in the entrepreneurial experience of women. Entrepreneurial risk has an under-developed conceptual basis and distilling gender-specific aspects is difficult. Various academic disciplines have contributed to the topic of risk, e.g. economics, and often decision making is used to contextualise the topic. Though the literature does not always prove an association between the different facets of risk and entrepreneurship, there is general agreement that a number of factors, e.g. personal, political and social inter-relate to influence risk and subsequent behaviour. Design/methodology/approach – Uses a desk-based approach to data collection. An overview of the main issues concerning risk and entrepreneurship is given to contexualise the gender aspects to be discussed, drawing on the extant literature. Findings – The paper posits that an understanding of the gender aspects of risk is required if policy measures are to be constructive and help women overcome barriers and achieve their entrepreneurial potential. The conclusions drawn from the literature provide the foundations for a discussion of the likely policy measures that are required to encourage women entrepreneurs. Research limitations/implications – A summary is provided of the research and information gaps that remain in terms of women entrepreneurship and risk with the aim of encouraging further research in the area. Originality/value – Provides a comprehensive summary of the literature with regard to risk and the entrepreneurial experience of women, and discusses the likely policy measures required to encourage women entrepreneurs. Keywords Women, Entrepreneurialism, Risk management, Sex and gender issues Paper type Literature review

International Journal of Entrepreneurial Behaviour & Research Vol. 11 No. 2, 2005 pp. 144-161 q Emerald Group Publishing Limited 1355-2554 DOI 10.1108/13552550510590554

Introduction The aim of the paper is to explore the barriers to women achieving their full potential in the entrepreneurial sector and the extent to which these barriers are from structural sources or are the result of particular personality traits or perceptions. The research is exploratory in nature and has used a desk-based approach to data collection. Initially an overview of the main issues concerning risk and entrepreneurship is given to contextualise the gender aspects that are then discussed. The paper provides directions for further research by identifying the research and information gaps and provides suggestions for policy. One might speculate that gender-related differences are not significant within the entrepreneurial role in the SME sector and the problems encountered are not gender-specific but rather are related to the risks associated with new business development and growth. Previous research studies have evaluated the proposition that

gender-based experiences within entrepreneurship generate differences in the perceptiveness of uncertainty and risks and consequently differences in the preparedness to undertake risky decisions. An alternative proposition suggests that whilst the entrepreneur may enjoy degrees of freedom in decision making within their organisation a number of contextual factors, both internal and external, may impose gender-related barriers and constraints to the effectiveness of this decision-making ability.

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145 Overview of the research literature The growth in female entrepreneurship literature is evidenced by the identification by Carter et al. (2001) of over 400 academic references on the subject. Carter et al. (2001, p. 22) therefore argue that rather than their being a dearth of literature the problem “is a clear lack of cumulative knowledge and a failure to date to adequately conceptualise and build explanatory theories.” This problem is compounded if one investigates a topic that similarly has an underdeveloped conceptualisation – entrepreneurial risk. Yet risk theories have the potential to embrace several of the main themes categorised by Carter et al. (2001) such as motivations, start-up patterns and the management, performance and growth of SMEs. What is more difficult to distil is the gender specific aspects of entrepreneurial risk. By also contextualising the study in the area of risk perception, propensity and preparedness an attempt can be made to identify and isolate entrepreneurial risk and compare it to actual behaviour. For example, is it risk that is channelling individuals in particular directions or behaviours? It is recognised that for each individual, risk factors and the commercial opportunities they present will be contingent on the other factors and the general context within which the individual operates. The issue may not be that there are differences in risk propensity between individuals but the context of the individual decision to become an entrepreneur is contingent on other factors. Risk theories In the 1920s risk became popular in the economics field (Dowling and Staelin, 1994). Subsequent definitions of risk have reflected the academic disciplines they have emerged from. Thus, the management, environmental, insurance and psychology literature have each focused on a particular aspect of risk but all have tended to contextualise their definition of risk within the area of decision making. Commonalities in these paradigms relate to their definition of risk, which relate to the issues of unpredictability, decision making and potential loss. While technically, risk may be defined as the probability of incurring a loss (Knight, 1921) in reality this is a somewhat imbalanced definition given that most risky decisions in business are taken on the basis of generating a potential gain (Blume, 1971), whilst recognising that this may not be certain. Few if any business or investment decisions would be undertaken solely to avoid losses. The analysis of decision-making behaviour may be divided into three elements: risk perception, risk propensity and preparedness to take risks. Sitkin and Weingart (1995) define risk perception as a subjective interpretation of expected loss. This perception is affected by the individual’s view of the uncertainty of the decision and the consequence of the decision (Cunningham, 1967). This subjectivity or uniqueness is because “the internal interpretation of external events and circumstances are the key to risk perception, as each organisation or decision maker may view the same set of events and circumstances with

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different eyes, resulting in different perceptions” (Ritchie and Brindley, 2001, p. 31). Perceptions may alter as a result of internal and external factors. The approach to risk may be found on a continuum from being a risk seeker to a risk averter. The issues of perception and propensity seem then to impact on an individual’s preparedness to take risks. An individual’s risk preparedness may depend either on the uncertainty of outcomes because of imperfect knowledge or on the potential scale of losses or gains. Osborne (1995, p. 6) describes successful entrepreneurs as “adept at calibrating the level of risk that matches potential reward and their capacity to manage uncertainty.” The implication of the preparedness to take risks is highlighted by van Praag and Cramer (2001, p. 45) who argued that whether one becomes an entrepreneur depends on associated utilities which depend on “ability and on individual risk attitude, since entrepreneurship is a risky business.” Others such as Sparrow (1999) have adopted an exogenous perspective with owner-managers categorising risk under five headings: business environment, the particular competitive positioning of the business, business processes, events and liabilities. Therefore, the importance of risk in an entrepreneurial context has both an organisational and an individual facet. From an organisational perspective, Sparrow (1999, p. 122) posits that “[S]mall firms have faced an explosion in business risks.” Hence, for Sparrow (1999, p. 123) these small firms must be conversant with the process of risk management and “the interrelationship between the roles of risk avoidance, retention and transfer”. There appears to be some consensus that an appreciation or knowledge of risk is warranted in order that policy makers and indeed budding entrepreneurs themselves can make objective decisions about the enterprise (see Busenitz, 1999; Stewart et al., 1999; Forlani and Mullins, 2000). The literature appears to suggest that there are three sets of factors that are impacting upon entrepreneurial risk: the decision situation context, such as beginning a business during a recession, the personality traits of the individual, where the individual lies on the continuum range of risk seeking to risk averse and the personal context of the individual including, experience, dependents, income, etc. Entrepreneurial risk Busenitz’s (1999, p. 325) premise is that “the dominant theme running throughout the entrepreneurship literature is risk and how entrepreneurs are predisposed towards risky alternatives or how they should manage risk.” van Praag and Cramer (2001) argue that entrepreneurs are historically seen as risk takers, as shown in the works of, Knight (1921), Say (1803/1971) etc. Similarly, McCarthy (2000, p. 563) argues that “the risk construct dominates the literature on entrepreneurship and the ability to bear risk has been identified as the primary challenge facing entrepreneurs (Knight, 1921).” Several authors give support for this viewpoint including: Kent et al. (1982), McClelland (1987), Koh (1996), Bygrave (1989), Palmer (1971), Sarachek (1978) and Ho and Koh (1992). The ability to take risks as being an inherent attribute of the entrepreneurial venture or personality is summed up by Klein (1977) who stated that “. . . if an entrepreneur is to profit from an unexploited potential, he must almost inevitably deal with a greater degree of uncertainty” (Klein, 1977, p. 36 cited in Landrum, 1991). Support for this theory is evidenced in the work of Viscott (1979) and Landrum (1991). For Thompson (1999, p. 289) entrepreneurs “through insight and flexibility they

attempt to manage risk rather than become unnecessarily exposed.” It is therefore predictable that entrepreneurs are risk takers (Cox and Jennings, 1995). Others such as Mitchell (1995) have concentrated on the activity as the basis for the definition, e.g. entrepreneurs being defined as individuals who have created a new business venture. Such studies may give the impression that there is a common definition but other research suggests that there may be differences in situational or individual circumstances that impact upon entrepreneurial behaviour. This definitional dichotomy between entrepreneurs and owner-managers often obscures rather than illuminates research being undertaken in entrepreneurship. However, it is not in the remit of this paper to revisit these definitional tensions. A semantic divergence is seen in the work of Kets de Vries (1977, p. 38) who argued that: “the entrepreneur can be considered more a creator of risk than a taker of it. However, although the entrepreneur does not necessarily bear the financial risk of an operation, he is exposed to a considerable degree of social and psychological risks”. According to Liles (1974) entrepreneurs have to cope with four types of risk: financial, career, family/social and psychological. Whatever, the source of the risk, Jover’s (1992) premise is that the number of business failures that occur illustrate the considerable risk inherent in business start-up. Risk propensity of entrepreneurs The literature suggests therefore, that entrepreneurship and risk are inextricably linked and this has led to a number of studies that have attempted to measure the risk-taking propensity of entrepreneurs, e.g. Palmer, 1971; Begley and Boyd, 1987; McGrath et al., 1992 and Ray, 1994. For Brockhaus (1980) entrepreneurs are not gamblers but moderate risk takers. However, it is fair to conclude that there has not been uniformity in the conclusions from these studies. Sexton and Bowman-Upton (1984) and Begley and Boyd (1987) offer some modest support for differences in risk-taking propensity. Indeed, Busenitz (1999) argued that the higher risk propensity of entrepreneurs has not been supported empirically. He argued that the “cognitive perspective provides an important perspective with which to investigate why some entrepreneurs accept an inordinate amount of risk even though, on average, they do not apparently differ in their risk-taking propensity” (Busenitz, 1999, p. 326), i.e. “it may be that entrepreneurs take more risky paths because they perceive little risk in their proposed ventures” (Busenitz, 1999, p. 326). He postulates that it could be that it is not risk propensity that distinguishes entrepreneurs from managers in large companies but differences in the way they think about and perceive risk. McClelland’s (1961) influential work, which adopted a behavioural science approach, identified that successful entrepreneurs were moderate risk takers, which concurs with Brockhaus (1980). Busenitz’s (1999, p. 328) premise is that in an established business, approaches to risk may be different than at the start-up phase in that “we suspect that entrepreneurs in the founding process tend not to be sensitised to the risk they face.” The budding entrepreneurs therefore do not view what they are doing as risky. Indeed, entrepreneurs may accept risks in part because they do not expect to have to bear them (Low and MacMillan, 1988 cited in Busenitz, 1999, p. 328). Furthermore, Busenitz (1999, p. 329) argues that increasing “evidence indicates that individuals vary in the way they deal with risk.” For example, Shapira (1995) explored

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individual differences in risk taking. As Busenitz (1999) asserts at start-up there is much uncertainty and it is the individual’s use of biases and heuristics that can be the basis on which the decision to go into business is made. For example, overconfidence may be seen as a bias. Thus “individuals with a greater sense of overconfidence are likely to function better in an entrepreneurial setting because they will be less overwhelmed with the multiple hurdles they face” (Busenitz, 1999, p. 331). It may be postulated that overconfidence is a result of personality or social constructs and may for example be found more frequently in certain social groupings. Risk and new ventures Simon et al. (2000, p. 114) argue that researchers such as, Boyd and Vozikis (1994), Krueger (1993), Krueger and Brazeal (1994) and Busenitz and Barney (1997), have “called for studies explaining why individuals decide to start companies, even though it is very risky” As Simon et al. (2000, p. 114) state: “[E]ven if they do not have a high-risk propensity, individuals who perceive less risk than others might unknowingly take risky action.” Similarly, Palich and Bagby (1995) argued that risk perception rather than propensity may explain venture start up. While Simon et al. (2000) focused on the economic aspects of risk, they suggest that future research should look at other aspects of risks. Social risks are highlighted in the work of Amit et al. (1995) and Birley and Westhead (1994). Other factors impact on risk perception, i.e. changes in employment status, see Amit et al. (1995) and exposure to role models see Dubinin (1989) and access to business start up advice, e.g. Chrisman et al. (1987). Exogenous factors are also, identified by Athayde (1999) as risk influencers. According to social learning theory, risk-taking behaviour can be seen as a learned behaviour e.g. transmitted by parents or shaped by socio-cultural environment. McCarthy (2000) found that risk taking is not just a function of personality but seems to reflect organisational context and organisational history. McCarthy (2000, p. 571) speculates that perhaps the solution is to “distinguish between different types of entrepreneurs and to recognise that risk taking propensity may vary with time and tenure.” As the business develops and the entrepreneurs learn, the entrepreneurs’ risk perception may also alter. For McCarthy (2000, p. 571) “[E]ntrepreneurs may oscillate between risk prone and risk averse modes of behaviours over time.” For Stewart et al. (1999) an awareness of an individual’s risk behaviour could help not only existing entrepreneurs in their business planning but also help potential entrepreneurs assess their suitability for entrepreneurship. The idea of suitability is also developed by Forlani and Mullins (2000) who argue that if individuals are aware of their own risk propensities they are able to determine whether their assessments of new venture opportunities, are influenced by their propensity to take risks. This raises the issue that if propensities differ, as a result of say gender, but they are not aware of this then a mis-guided assessment of the ventures’ competitiveness may be made. Sources of risk If one takes the view that entrepreneurship is a risky activity (Say, 1803; Knight, 1921; Busenitz, 1999; McCarthy, 2000 and van Praag and Cramer, 2001) the next question that arises is what is the source of the risk? There appears to be no consensus on where the seeds of risk are located. The essence of the problem is the range of variables at the macro, micro and individual levels that are potential influencers, as well as the need to

recognise the process dimensions of entrepreneurship. The entrepreneurial process takes place against a backdrop of policies, structures and frameworks which may facilitate or inhibit entrepreneurship, e.g. the contextual setting will differ in terms of previous economic development, regional policies and local support mechanisms. The individual contextual factors include: family history and tradition of entrepreneurship, cultural influences relating to family and friends, family commitments and opportunities and educational opportunities. The individual characteristics influencing the propensity of the individual to engage and develop a career in entrepreneurship are the personal traits and characteristics such as attitudes to self-employment, risk-taking behaviour, age, self-confidence and gender. These may be influenced by the individual contextual factors detailed earlier. Entrepreneurial Processes would be contingent on the three other sets of elements. For example, the individual who originates from a background in which there is a strong tradition of entrepreneurship and family support may inherit the business or a part of an existing family business automatically. While another individual may need to undertake more of the initial stages of setting up the business, including determining the opportunity, persuading oneself and others about the viability, raising risk capital. It may be suggested in SMEs, where there is a tendency for less division of labour along functional lines that the link between the organisational and individual context is more pronounced. The literature in the risk management field (e.g. Ritchie and Marshall, 1993) indicates that the primary sources of risk to the business organisation may be categorised into exogenous (e.g. technology developments, changing consumer tastes) and endogenous (e.g. quality of internal financial control systems, effective management structures). The capability of the SME internal decision making to manage and respond effectively to the information and change signals received will be determined by the endogenous factors. MacCrimmon and Wehrung (1986) established that the preparedness of the decision-making unit to take risks may often be determined by the organisation’s financial position, as a firm being prepared to take greater risks when facing threats to its survival. These findings all support and are compatible with the classification of strategic risks derived by Ritchie and Marshall (1993). Indeed, the view that risk-taking may be less a factor of the individual personality traits and more a factor of the decision situation was supported by the research of Slovic (1972). However, this view is contradicted by Sparrow (1999, p. 123) who argued that “[S]ignificant differences have been identified between the risk conceptions and practices of businesses and individuals.” These differences may for example be due to ethnic, gender, class or age differences. Sparrow (1999, p. 123) acknowledges the studies that have been undertaken but concluded “there are no studies of the holistic manner in which small firms’ owner-managers construe and manage risk.” The lack of a holistic paradigm means that components or facets of risk within the SME context, e.g. “risk propensity” and “risk perception”, need to be the starting point of any debate on risk sources and its management. Gender-related attitudes towards risk and entrepreneurship There are few studies that have specifically focused on women entrepreneurs’ risk attributes. This is perhaps not surprising when Brush (1998) identified that research focussing on women or including women counted for less than 10 percent of all

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academic investigations (cited in Baker et al., 1997) and of 227 studies published between 1980-1987 only 6 percent investigated women and minorities (cited in Churchill and Hornaday, 1987). It has often been left to other academic disciplines such as consumer decision making (Ward and Sturrock, 1998), psychology (Fischhoff et al., 1977) or gambling studies (King, 1985; Bruce and Johnson, 1994) to focus on women and risk but again these studies often merely include rather than focus on women. Thus, as Brush (1998) found the extent that women create or manage differently SMEs is not well understood and in the new venture creation process one of the processes is the appropriate management of risk (Hofer and Bygrave 1991 cited in Brush, 1998). Moreover, gender, education (see Cuba et al., 1983; Decarlo and Lyons, 1979; Sexton and Bowman-Upton, 1990 cited in Stewart et al., 1999) age, industry sector, business size can all be seen as influencing risk propensity. Slovic (2000, p. xxxiv) posits that “[A]lmost every study of risk perception has found that men seem to be less concerned about hazards than are women.” Chung (1998) agrees, arguing that “both the marketing and psychological literature suggest than men tend to make more risky judgements than women.” Masters and Meier (1988) on the other hand found no significant difference in risk propensity, which in turn contrasts with Sexton (1989a) who found that females were more risk averse. For Chung (1998) this difference is seen as a result of differences in information processing styles, i.e. there is a difference in the approach to risk cues in that women assigned significantly more weight to risk cues. Indeed, Chung (1998) found that in fact women tended to assign more importance to all cues than men, which offered direct support to the issues that women are more detailed information processors than men. She also discovered that women made significantly more risk averse judgements than men. This supports the work of Sexton and Bowman-Upton (1990) who found that although male and females entrepreneurs have similar traits, there are noticeable differences in risk taking. Key determinants Social factors Slovic (2000) concluded that sociopolitical factors could be key determinants of gender differences in risk perception. He also argues that the differences in risk perception could be linked to issues of power and influence or rather women’s lack of access to them. Slovic (2000, p. 402) argues that “differences in perceptions and attitudes point towards the role of power, status, alienation, trust, perceived government responsiveness and other sociopolitical factors in determining perception and acceptance of risk.” Similarly, Brush (1998, p. 160) concluded that in all OECD countries “women encounter social structures in work, family and social life that influence development of human and social capital, different from their male counterparts. This argument is based on the premise that the entrepreneur starts with a set of endowments both “human and social capital” (Brush, 1998, p. 157). The influence of differences in these “endowments” (Brush, 1998) is explored by a number of authors. Ljunggren and Kolvereid (1996) found there was no gender difference in regard to complying with social pressure concerning business start-up but women perceived stronger social support at the start-up phase. Ljunggren and Kolvereid (1996) believe that this may be due to women spending more time building support for their idea and being reluctant to start before having social support or perhaps it is because it is the type of business that requires more support.

Brindley and Ritchie (1999) also found that choice of business has been based on their previous work experience, which may indeed help to minimise the risk of venturing into completely uncharted territory with a new business. Furthermore, during the female entrepreneurs’ start-up phase the main source of support and assistance came from family and friends, i.e. trusted sources of help that the women had previously experienced. It would therefore appear that by choosing a familiar business activity and by relying on a network of family and friends perhaps women are sub-consciously minimising the risk of the new business venture. Financial factors A more traditional view of capital as financial capital is included as a risk construct in a number of studies. Buttner and Rosen (1988) found that women were perceived by bank workers as less entrepreneurial than men and were evaluated lower on risk-taking propensity. In Sexton and Bowman-Upton’s (1990) paper female entrepreneurs scored significantly lower than male entrepreneurs on their risk-taking scale but were still higher than the risk-taking level recorded within the general public. “Although the risk taking scale was designed to measure four facets of risk (monetary, physical, social and ethical), it correlates with monetary risk” (Jackson et al., 1972 cited in Sexton and Bowman-Upton, 1990, p. 34). Sexton and Bowman-Upton (1990, p. 34) therefore conclude that female entrepreneurs “are less willing to get involved in situations with uncertain outcomes where financial gain is involved.” Ljunggren and Kolvereid (1996), who as well as exploring motivations to start up a business, also investigated the respondents’ experiences concerning profit and risk. In their findings, Ljunggren and Kolvereid (1996) found that women stressed autonomy reasons for starting a business more than men did but no gender differences were found in regard to challenge, risk or profitability. It could be suggested that as the study viewed risk as a financial construct there may have been different risks for the women, e.g. social risks that are ameliorated during the screening process. Jones’ (2000, p. 212) methodology also included a financial category “to capture financial responses such as risk and capital concerns associated with self employment.” Jones’ (2000, p. 213) findings revealed that Brazilian male and female entrepreneurs has similar dispositions and did not differ in their “business opportunity wants” and posits that cultural differences may over-ride biological sex conditioning. Buttner’s (1999) paper on business initiation fails to mention risk but suggests that there may be gender differences in how businesses are initiated which may impact upon their success. One of the key differences appears to relate to access to capital. Buttner (1999) argues that starting with a smaller capital base may disadvantage women SME owners, as a lack of working capital is one of the biggest problems for start-ups. Indeed, this poorer capital base may be reflected in survival rates and subsequent growth opportunities. Jones (2000) identified that the most distinguishing concerns between genders were centred on enterprise location and growth opportunities. It could be argued that these categories in themselves may still be viewed as financial measures and what they perhaps more carefully reveal is the differences in the sources or types of risk between men and women. Growth imperatives Cliff (1998, p. 525) cites authors who have shown that “small business performance is influenced by the motivations, aspirations, and intentions of entrepreneurs.” She

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identifies two contrasting viewpoints. First, Sexton (1989b) who found that there are no psychological reasons that predispose women to keep their enterprises small and second, social feminist theories which offer socio-cultural reasons for gender differences. Cliff (1998, p. 526) argues that “[W]omen who lack relevant experience may question their ability to manage a quickly growing enterprise and may therefore purposely limit the expansion of their firms.” Black (1989 cited in Cliff, 1998) believed that due to socialisation processes, women have different ways of thinking, different values, etc. which Cliff (1998, p. 527) argues is “a compelling argument for anticipating gender differences in growth intentions.” Growth is after all a risk. A risk which may be financial or social and may come from exogenous or endogenous sources. For example, changes in the marketing environment may require growth to maintain a SME’s market position. Cliff (1998) utilises the work of Goffee and Scase (1985, p. 70) who identified that women regard growth as “very risky” because it would deter them from achieving their goal of developing an “employer-employee relationship based upon trust and mutual respect.” Cliff (1998, p. 531) pronounced that “differences in the growth intentions of male and female entrepreneurs are not only surprising but also requires an explanation.” Cliff’s (1998) findings showed that 13 per cent of her mixed gender sample believed external factors, e.g. economic conditions, were the reason for their lack of growth. None of the women but a third of the men used this reason, which was a significant gender difference and Cliff (1998) believes it shows entrepreneurs wanted to grow but market conditions prevented this. She concluded that there are not any significant differences in whether men and women wanted to expand their firms but there were significant differences in the way they wanted to grow. “Female business owners appear to be more careful and conservative, purposely striving for a controlled and manageable rate of growth” (Cliff, 1998, p. 535). Cliff (1998, p. 535) goes onto argue that this “deliberately chosen slower pace reflects a concern about the risks and negative outcomes associated with expanding too quickly. These risks and negative outcomes tend to be personal rather than economic, such as the belief that fast-paced expansion will place inordinate demands on the entrepreneur’s time and energy.” Cliff (1998) proposed that SMEs set business size thresholds and advocated further research to determine “whether the observed gender differences reflect a true difference in the growth orientations of male versus female entrepreneurs, or merely a difference in the rhetoric used by men and women to describe their attitudes towards expansion” (Cliff, 1998, p. 539). Comparing women and men – a fair comparison? An exploration of the rhetoric used is supported by Mirchandani (1999, p. 225) who contends that “[M]uch of the literature on women and entrepreneurship does not address the consequences of adapting theories of entrepreneurship, developed through the analyses of men’s lives, to the experiences of women.” For Mirchandani (1999, p. 227) it is certain structures that “support, perpetuate and even create gender differences.” Mirchandani (1999) suggested that it appears it is women that have to adapt in order to equalise rather than the structures. Lee-Gosselin and Grise (1990 cited in Mirchandani, 1999) argued that women entrepreneurs challenge the presumption that SMEs should be growth oriented. Yet, for Mirchandani (1999, p. 228) “it is a pity that despite the research to date the focus remains on individualistic strategies that

allow women to mimic the male norm.” Adopting this viewpoint suggests that what is required is an understanding of the semantics used by men and women before making assumptions and to explore the influence these definitional cues have on behaviour. According to Mirchandani (1999) the focus of literature has been in comparing men and women in terms of entrepreneurship. Hisrich (1989) is used by Mirchandani (1999) to illustrate this point as Hisrich (1989) compared men and women in terms of demographics, personality and business type. The issue of language is taken up by Mirchandani (1999) who argues that Goffee and Scase’s (1985) typology mirrors the typical male roles exemplified by the Bem Sex Roles Inventory, where male items on the scale include ambition, independence, individualism, competitiveness, self-reliance, risk-taking behaviour and ease of decision making (cited in Eichler, 1980, p. 63). Thus, Mirchandani (1999) argues that comparison is really a judgement on whether women have adopted these masculine traits or whether they have not. Mirchandani (1999) summarises that some studies have found little differences between men and women entrepreneurs in terms of motivation, departure point or personality (cites Hisrich, 1989; Birley, 1989 and Smith et al., 1992 as examples of this). Similarly, Koh’s (1996) findings illustrated that those who were entrepreneurially inclined had a greater risk propensity but there were no significant sex differences. Whether this is because as Birley (1989, p. 37) anticipated that the profile of women entrepreneurs would move closer to men or because the comparative parameters are flawed is still being debated. If one accepts that “gender, occupation and organisational structure mutually influence one another in women’s experiences of small business ownership” (Mirchandani, 1999, p. 225) then what is required is research that “develops approaches which are able to document gender differences without obscuring all other points of difference amongst entrepreneurs” (Mirchandani, 1999, p. 229). Conclusions In summary, the literature has adopted a cross-disciplinary approach to risk and research and has tended to focus on a particular aspect of risk, e.g. propensity rather than taking a holistic view of risk. The relationship between preparedness, propensity and perception has not been given sufficient attention in the literature generally and even less in the context of women and risk. It would therefore be wrong to treat women entrepreneurs as an homogenous group. Perceptions may be influenced by the self-confidence levels of the individuals involved in the entrepreneurial venture. If an individual is confident the situation or decision maybe seen as less risky but if the individual lacks confidence then they may perceive more barriers and anticipate the decision to be more risky. Studies such as Bruce and Johnson (1996) and Li and Smith (1976) have suggested that women become less risk averse when they have more confidence and Slovic (2000) and Chung (1998) identified that although women and men had exhibited similar traits (i.e. in regard to propensity) there were still noticeable differences in risk taking. If the process by which entrepreneurs view risk and what is influencing their risk perception is not understood it is difficult to offer help and advice. Furthermore, an issue that relates perception with definitions goes back to what is categorised as a financial risk by individuals. For example, there is the issue of how financial risk or indeed “growth” as a financial risk indicator, is defined by the individual. Differences in attitudes to growth (see Chung, 1998) may have more to do

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with women not wishing to risk their home/work balance rather than an antagonism to growing the business per se. Moreover, it is argued by some (Ljunggren and Kolvereid, 1996) that women are better at self-screening and thus women reduce risk by doing what they know (which may ghettoise them to low-growth sectors) and using family support (in capital or in kind) at the start-up phase. The latter may also be related to the social structures that women encounter (Brush, 1998). From a feminist standpoint, women are never just women (Mirchandani, 1999) and it is thus the social structure that helps create or sustain differences in entrepreneurial behaviour. Promoting SMEs as growth oriented may be increasing risk perceptions towards entrepreneurship in certain demographic groups. As Athayde (1999) argued it maybe exogenous issues rather than psychological characteristics that determine whether a woman becomes self-employed. Similarly, Thompson (1999) argued that women, due to their lack of relevant work/management experience, limit their choice of sector for their business start-ups to those with low barriers of entry but with often high attendant risks, e.g. catering. The source of risk in this instance is therefore exogenous. Consequently, Athayde (1999) argued for entrepreneurial theory that is able to assess both personality and situational variables as well as interactions between the two. Indeed, Brush (1998, p. 58) found that gender differences based on motives or individuals’ characteristics are not conclusive and posits that psychological motives or traits, e.g. achievement, may combine with economic necessity or wealth seeking to motivate new business start-up in men and women. The fact that an individual may oscillate over time between being risk averse and risk prone also offers a challenge. A knowledge of risk or the ability to assess their own propensity and perceptions would aid potential entrepreneurs to determine whether they would be suitable entrepreneurs and indeed whether they would be able to sustain the business. It would also help entrepreneurs realise how they would be influenced by their own risk perceptions in managing their business. It seems apparent that risk is present in the decision situation context, the personality traits of the individual decision maker and in the specific decisions that have to be made. Few studies have shown how to affect change in or towards the entrepreneurial sector. Yet implicitly the studies on risk, albeit often in a wider decision making context than the small business sector, suggest that changes in the context or changes in access to opportunities and/or support mechanisms can facilitate change. The assumption that the changes in attitude/behaviour are simply a product of risk factors is misleading. There are obvious changes occurring within the gendered context, which influence the needs and behaviour patterns of women in the SME sector. Personality traits may possibly reinforce other risk influences, though it would be naive to assume that this would always be the case, for all SMEs and for all women. For example, the raised expectations of SMEs growth potential or business inputs/processes may not be deliverable by SMEs in certain sectors or those lacking a desire to put into place factors (e.g. time, staffing) to support such growth. The literature signifies a very complex set of inter-relationships between all of the factors involved. Thus, isolating particular sub-factors or variables for measurement purposes would be impractical and the bi-directional influences present would prevent any meaningful assessment of the strength and direction of the association. In terms of a coherent body of work the literature is playing catch-up, i.e. whilst acknowledging

changes in the decision-making context of women, the literature is not yet focused on women entrepreneurial context. Certain factors such as the changes in social structures (e.g. the family as primary social structure) or changes in the political climate leading to SME support will influence attitudes to risk and subsequent behaviour. Environmental changes in the gambling market in regard to access and opportunity have illustrated that such change can be introduced (Brindley, 2001).

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155 Implications for policy Identifying the most effective way of removing or reducing the barriers women face requires a number of initiatives. In terms of “business support” we need to know how women view risk and identify what influences their perceptions of risk before advice can be targeted. If agencies do not know how women view risk it is difficult to advise on strategies to help women cope with varying risks, managing uncertainty and appropriate risk management tools. The provision of such a tool kit would enable both the individual and the support networks to make objective decisions, removed from a reliance on stereotypes. It is a false assumption that all women are risk averse or that women owned businesses are not growth orientated. What has to be acknowledged is that “success” and “growth” may be defined by women in different ways than the usual criteria used to promote these terms. Underlying these issues is the suggestion by some research studies that women self-screen when deciding to begin a business, which often leads them to rely on family capital and to begin businesses based on what they know. Business support has the opportunity to widen horizons by reducing barriers, viz access to financing and by illustrating how women’s skills may be transferred into other business ventures that they may not have considered. However, this is only possible if business support networks move away from stereotypical definitions, understand that risk perception is not a uniform concept and identify ways in which women can access advice at the screening stage. This is important because studies suggest that as women gain confidence they become less risk adverse. If confidence can be instilled, effective businesses may be developed but confidence can only be engendered if support agencies understand how women view risk. Thus a knowledge of risk helps individuals to assess their suitability for an entrepreneurial career (their appetite for risk) and to assess best fit/choice of risk opportunities the business/individual may face. In addition, through the life cycle of a business the business owner may oscillate between being risk prone and risk seeking and support can help business owners identify/anticipate this oscillation. This would enable the SME owners to recognise their own risk perceptions in managing the business and the influence these may have on the business. Moreover, by managing the sources of risk, sustainability of the business becomes more likely. There appears to be a general training need for risk management within the sector that business support should provide. However, in terms of women-owned businesses or engendering potential women entrepreneurs this risk management training must be cognizant of the influence of social structures on women’s understanding and attitudes towards entrepreneurial risk. During the “start-up phase”, there needs to be a realisation that women do what they know to reduce risk and hence they may begin businesses that are located in low-growth sectors of the economy. Such a ghettoisation of women-owned start-ups

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makes them potentially more vulnerable to exogenous risk sources. This situation needs to be recognised and accommodated and there needs to be a policy recognition that women come to the SME sector with different “human endowments.” If entrepreneurship in itself is seen a risky situation, lack of confidence can further increase barriers to women considering entering self-employment. At the start-up phase, the question “Is SME ownership an opportunity for women?” has to be answered. Support is needed for individuals to help to screen themselves as potential entrepreneurs, to recognise the barriers they perceive, to create a dialogue and influence their risk perceptions. If Shaver’s (1995) view is adopted, i.e. that entrepreneurs can be made, then this validates schemes that re-train individuals to enter self-employment following redundancy and career breaks etc. It is important that support agencies do not leave the SME alone after the start-up phase, as an individual may go from being risk prone to risk adverse. There is a need to guide these new recruits through as their businesses develop. A scheme where the individual can recognise their own risk issues and how support agencies can help alleviate them is therefore proposed. As the business progresses the promotion of the premise that SMEs must be growth oriented has a potential detrimental effect by increasing the number of risk barriers. The definition of success used by outside agencies is more often a financial measure, which may mitigate against women. For self-employed women their maintenance of a home/work balance maybe deemed a success, as they can self-manage their time and collect their children from school. Agencies that only promote financial success may be guilty of promoting a male hegemony that supports a masculine view of entrepreneurship. The result may impact upon the financial support available from banks to support women-owned SMEs, which raises question about equal opportunity/access to capital. There is a need for a post-start-up tool kit to help women entrepreneurs recognise their own risk behaviour and then realise what growth opportunities may be avoided. How women-owned businesses are measured, the metrics used by outside agencies, e.g. banks, the issues that women businesses grow less quickly and that women may be more uncomfortable with growth have implications for advice and support given. There is a need to understand how women want to grow their business and a subsequent need that they are not castigated if their ambitions are different and if they see fast growth as risky. Currently, it would appear that women have to adapt to equalise and they may always be onto a loser if success is only defined in growth terms. Research and information gaps There appears to be a lack of empirically robust research on entrepreneurial risk and specifically on women entrepreneurs and risk. A number of research and information gaps have been identified. First, the definitional tension between entrepreneurs and owner managers has yet to be resolved and this impacts upon the establishment of cumulative knowledge. Second, the semantics used by men and women are different and it is yet to be fully explored how these semantic differences impact on risk behaviour. Specifically in terms of risk, the higher risk propensity of entrepreneurs has not been empirically supported and the risk propensity of entrepreneurs has not been adequately measured. Indeed, a measure of risk attitude and risk preparedness has not been established. Similarly, the influences that impinge upon risk propensity as a

construct needs further research. Without such research, the influence of contingency factors on the individual decision to become self-employed is difficult to establish. There also needs to be further information on the sources of risk and their inter-relationship with other factors, an inter-relationship that is likely to be different at the start-up phase than in an established business. In terms of women entrepreneur issues, how and why women create and subsequently manage SMEs is still not well understood. Women’s risk perception and how this is linked to issues of power and access to it has not been fully resolved. Thus, the influence of risk cues on women entrepreneurs at the start-up stage of the business and when managing an established SME needs further exploration. In 1999, Mirchandani called for research that identified gender differences without obscuring all other points of difference; an issue that is very relevant when considering the contingent nature of business start-up, where for example, cultural issues may over-ride gender. References Amit, R., Muller, E. and Cockburn, I. (1995), “Opportunity costs and entrepreneurial activity”, Journal of Business Venturing, Vol. 10 No. 2, pp. 95-106. Athayde, R. (1999), “Testing enterprise tendency in women business owners”, Small Business Research Centre, Kingston University, London, available at: http://business.king.ac.uk/ research/smbusres.html Baker, T., Aldrich, H.E. and Liou, N. (1997), “Invisible entrepreneurs: the neglect of women business owners by mass media and scholarly journals in the United States”, Entrepreneurship and Regional Development, Vol. 9 No. 3, pp. 221-38. Begley, T.M. and Boyd, D.P. (1987), “Psychological characteristics associated with performance in entrepreneurial firms and smaller businesses”, Journal of Business Venturing, Vol. 2 No. 1, pp. 79-93. Birley, S. (1989), “Female entrepreneurs: are they really any different?”, Journal of Small Business Management, Vol. 27 No. 1, pp. 32-7. Birley, S. and Westhead, P. (1994), “A taxonomy of business start-up reasons and their impact on firm growth and size”, Journal of Business Venturing, Vol. 9 No. 1, pp. 7-31. Black, N. (1989), Social Feminism, Cornell University Press, New York, NY. Blume, M.E. (1971), “On the assessment of risk”, Journal of Finance, Vol. 26 No. 1, pp. 1-10. Boyd, G. and Vozikis, G.S. (1994), “The influence of self-efficacy on the development of entrepreneurial intentions and actions”, Entrepreneurship Theory and Practice, Vol. 18 No. 4, pp. 63-77. Brindley, C. (2001), “ICT developments, the evolution of the amorphous supply chain and consequences for corporate strategies, risk and relationships”, PhD thesis, Manchester Metropolitan University, Manchester. Brindley, C. and Ritchie, B. (1999), “Female entrepreneurship: risk perceptiveness, opportunities and challenges”, 22nd ISBA National Small Firms Policy & Research Conference, Leeds, November. Brockhaus, R.H. (1980), “Risk-taking propensity of entrepreneurs”, Academy of Management Journal, Vol. 23 No. 3, pp. 509-20. Bruce, A.C. and Johnson, J.E.V. (1994), “Male and female betting behaviour: new perspectives”, Journal of Gambling Studies, Vol. 10 No. 2, pp. 183-98.

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Bruce, A.C. and Johnson, J.E.V. (1996), “Gender-based differences in leisure behaviour: performance, risk taking and confidence in off-course betting”, Leisure Studies, Vol. 15, pp. 65-78. Brush, C.G. (1998), “A resource perspective on women’s entrepreneurship: research, relevance and recognition”, Proceedings of the OECD Conference on Women Entrepreneurs in Small and Medium Enterprises: A Major Force in Innovation and Job Creation, Paris, April, pp. 155-68. Busenitz, L.W. (1999), “Entrepreneurial risk and strategic decision making: it’s a matter of perspective”, The Journal of Applied Behavioral Science, Vol. 35 No. 3, pp. 325-40. Busenitz, L.W. and Barney, J.B. (1997), “Biases and heuristics in strategic decision making: differences between entrepreneurs and managers in large organisations”, Journal of Business Venturing, Vol. 12 No. 1, pp. 9-30. Buttner, E.H. (1999), “A report on gender differences in business initiation in the US”, Proceedings of the 2nd International Euro PME Conference Entrepreneurship: Building for the Future, Rennes, October. Buttner, E. and Rosen, B. (1988), “Bank loan officers’ perceptions of the characteristics of men, women, and successful entrepreneurs”, Journal of Business Venturing, Vol. 3 No. 3, pp. 249-58. Bygrave, W.D. (1989), “The entrepreneurship paradigm (I): a philosophical look at its research methodologies”, Entrepreneurship: Theory and Practice, Vol. 14, pp. 7-26. Carter, S., Anderson, S. and Shaw, E. (2001), Women’s Business Ownership: A Review of the Academic, Popular and Internet Literature: Report to the Small Business Service, August, Small Business Service, London. Chrisman, J.J., Hoy, F. and Robinson, R.B. Jr (1987), “New venture development: the costs and benefits of public sector assistance”, Journal of Business Venturing, Vol. 2, pp. 315-28. Chung, J.T. (1998), “Risk reduction in public accounting firms: are women more effective?”, International Review of Women and Leadership, Vol. 4 No. 1, pp. 39-45. Churchill, N. and Hornaday, J. (1987), “Current trends in entrepreneurial research”, in Churchill, N., Hornaday, J., Kirchoff, B., Krasner, O. and Vespre, K. (Eds), Frontiers of Entrepreneurship Research, Babson College, Babson Park, MA, pp. 1-22. Cliff, J.E. (1998), “Does one size fit all? Exploring the relationship between attitudes towards growth, gender and business size”, Journal of Business Venturing, Vol. 13 No. 6, pp. 523-42. Cox, C. and Jennings, R. (1995), “The foundations of success: the development and characteristics of British entrepreneurs and intrapreneurs”, Leadership & Organization Development Journal, Vol. 16 No. 7, pp. 4-9. Cuba, R., Decenzo, D. and Anish, A. (1983), “Management practices of successful female business owners”, American Journal of Small Business, Vol. 7 No. 2, pp. 40-5. Cunningham, S.M. (1967), “The major determinants of perceived risk”, in Cox, D.F. (Ed.), Risk Taking and Information Handling in Consumer Behavior, Graduate School of Business Administration, Harvard University Press, Boston, MA, pp. 82-108. DeCarlo, J. and Lyons, P.R. (1979), “A comparison of selected personal characteristics of minority and non-minority female entrepreneurs”, Journal of Small Business Management, Vol. 17 No. 4, pp. 22-9. Dowling, R.G. and Staelin, R. (1994), “A model of perceived risk and intended risk-handling activity”, Journal of Consumer Research, Vol. 21 No. 1, pp. 119-25. Dubinin, P. (1989), “Which venture capital-backed entrepreneurs have the best chance of succeeding?”, Journal of Business Venturing, Vol. 4, pp. 123-32.

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Li, W.L. and Smith, M.H. (1976), “The propensity to gamble: some structural determinants”, in Eadington, W.R. (Ed.), Gambling and Society, Chapter 11, Charles C. Thomas, Springfield, IL. Liles, P.R. (1974), New Business Ventures and the Entrepreneur, Irwin, Homewood, IL. Ljunggren, E. and Kolvereid, L. (1996), “New business formation: does gender make a difference?”, Women in Management Review, Vol. 1 No. 4, pp. 3-12. Low, M.B. and MacMillan, I.C. (1988), “Entrepreneurship: past research and future challenges”, Journal of Management, Vol. 14 No. 2, pp. 139-61. McCarthy, B. (2000), “The cult of risk taking and social learning: a study of Irish entrepreneurs”, Management Decision, Vol. 38 No. 8, pp. 563-75. McClelland, D.C. (1961), The Achieving Society, Van Nostrand, Princeton, NJ. McClelland, D.C. (1987), “Characteristics of successful entrepreneurs”, Journal of Creative Behavior, Vol. 21 No. 3, pp. 219-33. MacCrimmon, K.R. and Wehrung, D.A. (1986), Taking Risks: The Management of Uncertainty, Free Press, New York, NY. McGrath, R.G., MacMillan, I.C. and Scheinberg, S. (1992), “Elitists, risk-takers and rugged individualists? An exploratory analysis of cultural differences between entrepreneurs and non-entrepreneurs”, Journal of Business Venturing, Vol. 7 No. 2, pp. 115-35. Masters, R. and Meier, R. (1988), “Sex differences and risk-taking propensity of entrepreneurs”, Journal of Small Business Management, Vol. 26 No. 1, pp. 1-35. Mirchandani, K. (1999), “Feminist insight on gendered work: new directions in research on women and entrepreneurship”, Gender, Work and Organisation, Vol. 6 No. 4, pp. 224-35. Mitchell, V.W. (1995), “Organisational risk perception and reduction: a literature review”, British Journal of Management, Vol. 6 No. 2, pp. 115-33. Osborne, R.L. (1995), “The essence of entrepreneurial success”, Management Decision, Vol. 33 No. 7, pp. 4-9. Palich, L.E. and Bagby, D.R. (1995), “Using cognitive theory to explain entrepreneurial risk taking: challenging conventional wisdom”, Journal of Business Venturing, Vol. 10 No. 6, pp. 425-38. Palmer, M. (1971), “The application of psychological testing to entrepreneurial potential”, California Management Review, Vol. 13 No. 4, pp. 32-8. Ray, D.M. (1994), “The role of risk taking in Singapore”, Journal of Business Venturing, Vol. 9 No. 2, pp. 157-77. Ritchie, R.L. and Brindley, C.S. (2001), “The information-risk conundrum”, Marketing Intelligence & Planning, Vol. 19 No. 1, pp. 29-37. Ritchie, R.L. and Marshall, D.V. (1993), Business Risk Management, Chapman & Hall, London. Sarachek, B. (1978), “American entrepreneurs and the Horatio Alger myth”, Journal of Economic History, Vol. 38 No. 2, pp. 439-56. Say, J.B. (1803/1971), A Treatise on Political Economy or the Production, Distribution and Consumption of Wealth, Augustus M. Kelley, New York, NY. Sexton, D. (1989a), “Growth decisions and growth patterns of women-owned enterprises”, in Hagan, O. and Sexton, D. (Eds), Women-owned Businesses, Praeger, New York, NY. Sexton, D.L. (1989b), “Research on women-owned businesses: current status and future directions”, in Hagen, O., Rivchum, C. and Sexton, D.L. (Eds), Women-owned Businesses, Praeger, New York, NY, pp. 183-93.

Sexton, D. and Bowman-Upton, N. (1990), “Female and male entrepreneurs: psychological characteristics and their role in gender-related discrimination”, Journal of Business Venturing, Vol. 5 No. 1, pp. 29-36. Shapira, Z. (1995), Risk Taking: A Managerial Perspective, Russell Sage, New York, NY. Shaver, K.G. (1995), “The entrepreneurial personality myth”, Business and Economic Review, Vol. 41 No. 3, pp. 20-3. Simon, M., Houghton, S.M. and Aquino, K. (2000), “Cognitive biases, risk perception and venture formation – implications of interfirm (mis)perceptions for strategic decisions”, Journal of Business Venturing, Vol. 15 No. 2, pp. 113-34. Sitkin, S.B. and Weingart, L.R. (1995), “Determinants of risky decision-making behaviour: a test of the mediating role of risk perceptions and propensity”, Academy of Management Journal, Vol. 33 No. 6, pp. 1573-92. Slovic, P. (1972), “Information processing, situation specificity and the generality of risk-taking behaviour”, Journal of Personality and Social Psychology, Vol. 22, pp. 128-34. Slovic, P. (2000), The Perception of Risk, Earthscan Publications Ltd, London. Smith, P., Smits, S.J. and Hoy, F. (1992), “Female business owners in industries traditionally dominated by males”, Sex Roles, Vol. 26 No. 11/12, pp. 485-96. Sparrow, J. (1999), “Using qualitative research to establish SME support needs”, Qualitative Market Research: An International Journal, Vol. 2 No. 2, pp. 121-34. Stewart, W.H., Watson, W.E., Carland, J.C. and Carland, J.W. (1999), “A proclivity for entrepreneurship – determinants of company success”, Journal of Business Venturing, Vol. 14 No. 2, pp. 189-214. Thompson, J.L. (1999), “A strategic perspective of entrepreneurship”, International Journal of Entrepreneurial Behaviour & Research, Vol. 5 No. 6, pp. 279-96. Van Praag, C.M. and Cramer, J.S. (2001), “The roots of entrepreneurship and labour demand: individual ability and low risk aversion”, Economica, Vol. 68 No. 269, pp. 45-62. Viscott, D. (1979), Risking, Pocket Books, New York, NY. Ward, P. and Sturrock, F. (1998), “She knows what she wants . . . towards a female consumption risk-reducing strategy framework”, Marketing Intelligence & Planning, Vol. 16 No. 5, pp. 327-36. Further reading Watkins, J.M. and Watkins, D.S. (1986), “The female entrepreneur: her background and determinants of business chaos – some British data”, in Curran, J., Stanworth, J. and Watkins, D. (Eds), The Survival of the Small Firm: Volume 1: The Economics of Survival and Entrepreneurship, Gower Publishing, Aldershot.

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The current issue and full text archive of this journal is available at www.emeraldinsight.com/1355-2554.htm

No gender in cyberspace? Empowering entrepreneurship and innovation in female-run ICT small firms

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Lynn M. Martin The University of Central England Business School, Birmingham, UK, and

Len Tiu Wright De Montfort University, Department of Marketing, Leicester, UK Abstract Purpose – To explore how information communication technologies (ICT) and the internet offer new opportunities for women to develop as entrepreneurs and innovators. To add to the literature and provide updated research to raise awareness about female-run ICT small businesses. Design/methodology/approach – Uses qualitative research methodology for case studies of female entrepreneurs and thematic grid analysis to form a major part of text analysis. The approach is influenced by the need to examine closely the nature of the enterprises or phenomena under investigation and to ask pertinent questions related to their particular mode of operations. Findings – Shows the background of small firm development and innovation as well as personal and company characteristics, personal contacts and IT networking in obtaining information and customers. Reflects also the concern of female entrepreneurs from ethnic minorities in gaining financial backing and recognition of themselves as committed and successful entrepreneurs. Research limitations/implications – The main limitation is the small size of the sample (ten firms). There are implications for further work on gender analysis. The sample, though small, has contributed insights into the challenges facing women entrepreneurs in business and questioned the constraints on ethnicity for others. Technology is a great equaliser and the research has added further discussion on the economic contribution of female entrepreneurs. Practical implications – Shows guidance on qualitative analysis using personal interviews and thematic grid analysis of textual data, as well as presenting findings. Originality/value – Contributes to the literature due to the scarcity of publications concerning female-operated ICT small businesses. The paper is useful for researchers wishing to pursue entrepreneurship and gender studies. Keywords Women, Entrepreneurialism, Communication technologies, Small enterprises, Empowerment, Sex and gender issues Paper type Research paper

International Journal of Entrepreneurial Behaviour & Research Vol. 11 No. 2, 2005 pp. 162-178 q Emerald Group Publishing Limited 1355-2554 DOI 10.1108/13552550510590563

Introduction The development of new information communication technologies (ICTs) over the last ten years has been accompanied by the development of diversity within related business sectors with “software” and “hardware” divisions including businesses such as virtual auction houses, virtual trading for traditional goods, and product-specific or sector-specific portal sites focussing on key niche markets. These new types of businesses have been the subject of increasing research to explore whether they The study was carried out as part of a larger project funded by the EU Asia IT & C programme, the EDECAD Task Force (www.edecad.info), which explores and develops knowledge issues in small firm e-development

operated similarly or in different ways to non-virtual business. One key expectation is that internet-based business might offer new opportunities to those currently under-represented in entrepreneurship and business ownership. Here the internet is seen as potentially providing a level playing field for businesses, where such factors as ethnicity and gender, for instance, may not be immediately obvious from a website presence or from purchase of goods in a virtual environment. Similarly, home working empowered via new technologies is seen as another way women may develop as employees and also entrepreneurs through ICTs (Goyal, 2001). Thus other issues in small firm development such as ethnicity and gender are focused upon in this paper, as well as the role of ICT in supporting women entrepreneurs in operating their businesses. The paper includes research with a sample of women entrepreneurs who “own, manage and run” small businesses. Hence the discussion does not differentiate between women business owners and women managers because the women entrepreneurs perform both of these roles. ICT in enhancing small business development and female entrepreneurship Business has been revolutionized by the ability to use the internet and the worldwide web to gather, exchange and disseminate information (McDonald and Burton, 2002), with clear gains for internet users (Koukova and Ratchford, 2001). Further, the importance of the potential of ICT to the small business sector cannot be underestimated since small businesses are in the majority in all economies in the world. Unlocking the potential of ICTs for small firms, e.g. reducing the number of intermediaries, search and transaction costs, along with the benefits of network externalization, would provide opportunities for radical change. Small firms, with their more limited human and financial resources, are disadvantaged when competing with big organisations with large-scale economies in production and marketing. Smaller firms therefore need to concentrate on strategies to apply their knowledge and expertise in providing products and services that successfully attract customers in their markets. The use of ICT is crucial and arguably unique in allowing small businesses and their entrepreneurial owners to sharpen their strategies in order achieve this success. In looking at generic competitive strategies Porter’s (1985) cost leadership, differentiation and focus strategies provide a useful starting point. Low-cost producers aim to exploit economies of scale in production to offer lower prices and maintain or maximise their profit margins. Differentiation requires higher prices because of developing services or products defined as superior or different and attracting more discerning customers who are looking for quality. Focus on particular market segments is influenced by insufficient resources to compete on all fronts. Traditionally, it has been very difficult for many businesses, large and small, to achieve all three types of strategies. ICT enables businesses in general to maintain a low cost structure in order to achieve higher returns per customer. With falling hardware and software costs in computing and greater multimedia accessibility, small businesses and women entrepreneurs, as in this study, have the abilities to become all three: in being low-cost producers; in being specialists to provide products or services to achieve differentiation; and to give greater focus via the internet to cover far more market segments than would have been possible through traditional distribution channels.

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There is a scarcity in the literature about female entrepreneurship or the female-run ICT small business. Examples of focus in previous small business literature have been about: resource limitations’ constraints where the small firms’ owners-entrepreneurs have lacked the necessary time or personnel to engage in strategic planning or marketing (Carson and Cromie, 1989); personal contact networks which expand the span of action of small firm managers (Aldrich and Zimmer, 1986; Johannisson, 1986); that could also be seen as largely unplanned, intuitive and chaotic with operational aspects oriented primarily to daily survival. The small firm entrepreneur is portrayed as thriving in circumstances of discontinuity and chaos with limited quality information and on the other hand, as an individual capable of making highly informed and competent decisions (Hill and Scott, 2001). While such issues form part of the small business discontinuity-continuity debate, the scarcity of literature points to a need to examine entrepreneurship from the perspectives of gender and the impact on the female-run ICT small business. Could the use of ICT help to establish the characteristics of female entrepreneurs-small business owners as being independent, highly centralized in their business efforts and highly personalized in being dependent on personal contact networks? Hill and Scott (2001) defined personal contact networks as fundamental to small firms, enabling entrepreneurial information-gathering techniques. Issues concerning female entrepreneurship In terms of companies set up and run by women, the literature has a focus on particular aspects, notably the start-up issues, business performance and comparison with male-run traditional businesses. Although this is a growing body of work, research into female entrepreneurship is still at a very early stage where established firms are concerned (Carter, 2000). Quite how long a company needs to be in business to be established is open to question. However, issues faced by those women running companies through various post-start up stages of the business life cycle have so far gone largely unconsidered. Few studies explore how female-run firms develop and grow or how women operate as small business owners and managers to the business exit stage (Martin, 2001; Catley and Hamilton, 1998). Similarly, although the level of research into female entrepreneurship has increased, it has done so in specific ways. One route might be described as the “deficiency” model related to: . under-performance (Watson, 2003; Mukhtar, 2002; Du Reitz and Henrekson, 2000); . under-confidence (Fielden, 2003; European Commission, 2003); and . under-representation across subject specialisms and business sectors (Chell, 2002; Carter et al., 2001; Rosa et al., 1996). Others (e.g. Fernandes and Cabral-Cardoso, 2003; Ljunggren and Alsos, 2001; Claes, 1999) have explored the role of the female manager and entrepreneur related to aspects such as ambition, aspirations or characteristics, comparing female entrepreneurs with their male counterparts (Walker, 2000; Cowling and Taylor, 2001; GEM UK, 2003). Other issues and factors such as the relationship between ethnicity and female entrepreneurship remain under-researched (Smith-Hunter and Boyd, 2004)

In the same way, although research into the internet and small firms in general is increasing, little work has been carried out to explore whether ICT encourages the entry of more female entrepreneurs. There is often a research focus on technology rather than its impacts on key groups, particularly small firms (JISC, 2002; Martin and Matlay 2001). There are also gaps in terms of research into the way both ethnic minority and female small firms relate to ICTs (Foley and Monder, 2002; Martin, 2003). In addition, as has been identified above, it would extend existing knowledge if such research on female entrepreneurs related to companies that were beyond their start up phase while focussing on the owner-manager. Although differing considerably with location, business sector, relative size and type of operation, the managerial competency of the key decision makers is seen as especially important to the way in which ICT implementation occurs (Martin and Matlay, 2001; Fallon and Moran, 2000; Chapman et al., 2000). In small firms, the entrepreneurial owner/managers are the main decision makers and risk takers, seizing the opportunity offered by the internet in their own business context and recognising opportunities and threats within their chosen target markets (Culkin and Smith, 2000). Research objectives The first research objective deals with the investigation of personal and company characteristics and the establishment of female-run small businesses. In order to explore the context of women entrepreneurship related to ICT, research into the female owners’ profiles, background and motivations are necessary given the critical role of the female entrepreneurial individuals in the success of ecommerce ventures, and as also identified by Feindt et al. (2002). The second research objective is concerned with the investigation of how ICT can have an impact in helping to establish the characteristics of female entrepreneurs-small business owners as being independent and highly centralized or organized in their business efforts. For instance, it has been suggested that men’s technology usage decisions are strongly influenced by their perceptions of usefulness, while women are seen to be more strongly influenced by perceptions of ease of use (Venkatesh and Morris, 2000; Venkatesh et al., 2000). The third research objective about the ongoing nature of female-run ICT businesses, investigates the ongoing personal contact networks and ICT association with the use of IT in fostering innovation and information, critical for business success. Previous e-business SME studies have identified barriers to adoption exploring characteristics such as: . environmental contexts, the organisation, the organisational leaders or decision makers together with the nature of the technological innovation itself (Raymond, 2001; Warren and Hutchinson, 2000); and . specific business sector, level of internationalisation, level of planning within the firm and current market forces (see Raymond, 2001; Martin and Matlay 2001, for alternative summaries). Gender has not emerged from such studies as a key avenue for research except when internet access and usage are studied on an individual user level. Finally, the fourth research objective looks at identifying what drives female entrepreneurs to succeed, given the barriers to female run-ICT small businesses

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including barriers to those from ethnic minorities. The economic contributions of women are bringing about changing norms in business with the growing presence of female entrepreneurs (Adler, 2004). In terms of research into the effects of the internet on ethnic small firms, previous studies have also shown that smaller ethnic firms are least likely to have internet access or resources (Foley and Monder, 2002). Methodology A qualitative research approach was adopted because the collaboration of female entrepreneurs was essential due to their sensitivity in divulging information relating directly to their small business circumstances, their perceived barriers to growth and the personal contexts of their entrepreneurial drivers for success. As Silverman (2005) indicated, effectiveness in qualitative research embraces sensitivity in the choice of research instrument and a flexible approach to data collection including the art of asking questions. Qualitative research is appropriate where small samples are concerned. The tradition of using small studies in qualitative research (Hill and Wright, 2002) is influenced by the need to examine closely the nature of the enterprises or phenomena under investigation and to ask pertinent questions related to their particular modus operandi. Over a six-month period, a series of semi-structured interviews was held with both owners and other staff in ICT industry companies run by ten female entrepreneurs. These interviews were held mainly on site at business premises and were supported by copies of company documentation such as plans, accounts etc., by online informational and activities and by observation. The object of the interviews was to develop a picture of the female ICT entrepreneur, her aims and aspirations for the future and her experience of entrepreneurship to date, and to develop a richer picture by including the views of key staff and family members where appropriate. Using the large amount of data from these semi-structured interviews, plus observed practices and copies of company documents etc. it was hoped to develop an in-depth view of each firm, as case studies. Via case studies it was hoped to provide an in-depth exploration of each entrepreneur and give rich insights into the entrepreneurial processes in such firms, recognising the complexity of business operations and the way in which social truths are embedded within organisations (Yin, 1994). Participants were encouraged to identify key stages and critical incidents given the value of this technique in exploring entrepreneurial learning and innovation (Cope and Watts, 2000; Martin, 2003). Where validity and reliability are concerned, the main strength of using the ten case examples of the female entrepreneurs are supported elsewhere in the literature. As a research method, case study research with in-depth interviews has a good foundation in their progressive and iterative nature with synergistic effects (Yin, 1994). Qualitative methods usually utilise modes of inquiry aimed at exploring and discovering “new relationships of realities” (Hunt, 1990; Perry and Coote, 1994). This means building understanding of the meanings of experiences and not pursuance of the objective in verifying predetermined hypotheses. Case examples and case studies rely on particular findings that can be generalised to some broader theory to establish external validation. As a contrast, it is unlike quantitative research, which uses surveys aimed at statistical generalisation to achieve external validity. In this study statistical techniques were not used to derive correlation etc., given the size and nature of the sample. Thematic grid analysis formed the major part of text

analysis along with other techniques linked to discourse analysis, given the usefulness of this technique to identify patterns and contradictions. Despite the small sample, the operations and procedures of the study in this paper can be repeated by other researchers thus enhancing the reliability of the research method adopted. For example, by keeping consistency in interviewing techniques and procedures, research findings could be replicated. Via discussion of these aspects business start up and the processes accompanying business development would also be explored but important themes included the following, with more focus given in this paper to the use of ICTs, innovation and access to finance than some of the other categories: . Personal characteristics of the female entrepreneur-owner manager; the role of ICTs in the entrepreneur’s route to owning and managing a small firm. . The company itself and its key company characteristics. . Business sources, i.e. the way in which new business was generated, sources for new customers and how the marketing process occurred from the perspective of the entrepreneur and her staff. . Aspects driving these entrepreneurs to be successful business people. Drivers here included ambitions and aspirations, role models, needs and barriers to success. . Innovation and entrepreneurship to assess whether these women saw themselves as innovators and entrepreneurs; what characteristics they felt were needed and what levels of importance might be attributed to these.

Sample Ten female entrepreneurs running ICT-related firms were identified as part of a two-stage process. They were located via web searches and with help from professional associations and business advisors, mainly focussed in the Midlands region of the United Kingdom. The increase in female entrepreneurship in the East Midlands and in both East and West Midlands, as well as the use of new technology is higher than in most of the other UK regions (Global Entrepreneurship Monitor, 2003). Hence this geographic area was expected to provide good examples of female ICT entrepreneurs. Following research and discussion, 41 firms were originally targeted to provide a group of ten for detailed interviews and analysis. Thirteen declined, then another 18 were found to be unsuitable for other reasons: they were not prepared to be forthcoming about the aspects agreed for exploration; they were one-person operations; they were not trading effectively or in a position of growth; and they were doing other jobs so this was not their main occupation. To allow for better comparisons these firms were initially selected on the basis of: Size Firms were included with between two and nine employees to fit within the “micro-enterprise” category, given that this is the most commonly occurring group of small firms (98 per cent of all firms are in this size category according to the European

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and UK governmental surveys). Hence it was hoped to provide insights into female firms within this grouping. Age of firm Firms should have been in business for at least three years to ensure that they had all moved through basic start up phases.

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ICT business sector Their businesses should fall within the ICT classifications and where possible from similar subsets. The firms in the resulting sample had a mean life of 4.3 years and were all micro-enterprises with nine or less employees. However, further discussion of company size also showed that in “company size” the owners sometimes included not only employees, but also those regular sub-contractors who provided key parts of the product or service. In one case this included a Californian programmer who wrote specific types of software “not found easily in the UK and much cheaper than we could get here”. In another, it included a web designer in Bangalore. All women taking part were ICT entrepreneurs, since four were web design businesses, three software companies and three hardware and cabling companies. In addition, six of the firms also had other web-based businesses, which they had developed alongside their mainstream businesses. The former were niche-businesses related to: . The provision of an information portal for specific groups as a route into purchase of related items. . The development of an auction site for specific groups. . The provision of an interest group portal for mutual trade and B2B components purchase. . Ebusinesses with physical products developed by the entrepreneurs and sold via the internet. Two entrepreneurs also worked with up to five other businesses to develop this business niche, e.g. web sites, as well as taking some of the equity. Efforts were made to include a range of participants. Given the evidence of co-preneurship in the sample, this was balanced to ensure similar numbers of non-co-preneurs. However, it was more difficult to find and include a range of those with different social, educational and ethnic backgrounds. This is perhaps unsurprising given that “whether male or female, entrepreneurs are likely to be white with higher income and educational levels” (GEM, 2003, p. 26). Here three had very few qualifications, five had first degrees and a further two had post-graduate qualifications, echoing earlier studies suggesting that women entrepreneurs have a higher educational standard (Cowling and Taylor, 2001). Results Personal and company characteristics By taking into account both types of characteristics a picture emerged of the build-up of the female-run small firms in the sample. As shown in Table I this was a mixed group, with varying ages, family background and family status. The average age was 37.8, ranging from 28 to 51 years. Half of the

0 2c 1b 1b 1b 0 2c 1b 1b 0d

29 28 43 51 37 39 28 30 44 49 37.8 51 28

1 1a 0 0 0 0 0 0 0 0

d

a

Co Sole Coe Sole Coe Coe Sole Sole Coe Sole

e

E-status 1 3i 3i 1g 2h 3i 1g 3i 1g 2h

g

Wk bckg 1 0 1j 1j 0 0 1j 0 1j 0

j

Family Eship M S M M M S M S S M

Family status

2 0 3 1 0 0 1 0 0 1

Children

Notes: a= ethnic minority member; b1 ¼ degree; c2 ¼ post degree; d0 ¼ no degree; eCo preneurs worked with husbands, same or different sex partners as joint owners; f0 ¼ no previous work; g1 ¼ managerial work; h2 ¼ professional work; i3 ¼ temporary/casual; j1 ¼ previous family experience of entrepreneurship, business ownership etc.

Case A Case B Case C Case D Case E Case F Case G Case H Case I Case J Average Max Min

Education background

Ethnicity

Age

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Table I. Personal characteristics – female entrepreneurs

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group were “copreneurs,” as they ran their businesses as a joint venture with their husbands or a “significant other” in their relationships. Five had children with a mean age of 11.2 years old. This aspect was included to try to explore the balance of work and family life experienced by these female entrepreneurs, seen to still be a key aspect for women developing successful businesses (Martin, 2003). Although the researchers would have preferred a richer ethnic mixture to try to provide insights into possible differences and similarities in business development emerging from this qualitative survey, only two of the group came from ethnic minorities. One was Afro-Caribbean and the other Asian. Family background differed. Four had a parent, grandparent or sibling already running a business when they set up their companies. In two cases these owners had each of them already run another company, which had not been successful. As identified above, in “company size”, the owners included not only employees, but also those regular sub-contractors who provided key parts of the product or service including overseas contacts who were found via the web. Despite being separate entities and geographically distant, these sub-contractors were considered to be part of the firm, with the owner having detailed knowledge of their family circumstances and their needs and ambitions. Exploring their current company location provided a good route to identify how the firms had been set up and why they were currently sited where they were, plus where they could be in future (see Table II). Here, only three owners had each set up an external office of their own. The majority (six out of ten) opted for working from home, often from a purpose-built extension or outbuilding funded via normal mortgage processes. This was seen as a “win-win” situation. The homes would increase in value as a result of their building additions, saving on rent and other costs by such extensions or outbuildings funded via normal mortgage processes. How important was the development of ICTs in enabling you to become an entrepreneur? When this question was raised, it was clear that these ten entrepreneurs all felt that ICTs had opened up the possibility of developing a business. The role of ICT in the women’s choosing to become entrepreneurs was seen as paramount. In each case the reasons given were ranked and the following emerged. ICTs are important because they: . offer a new field which is more open for female access than other fields – if they are prepared to work in terms of gaining new knowledge appropriate to the use of ICTs in business and to the technology surrounding ICTs, i.e. the “way ICTs work”; . require less resources in cash and physical terms than traditional alternatives for women; . empower home-based operation, leading to cost savings and to better family-work life balance since work can be done around family life, both where and when it fits best; . enable “invisibility” despite the business itself having a high profile, since with ICTs “people don’t realise you’re women and take you more seriously – they judge you as a business not as an individual”;

E F G H I

Case J Average

Case Case Case Case Case

Case B Case C Case D

Case A

External office Home office Home office External office Home office Home office Incubator External office Home office Home office

2.5 3 9

8 2.75 4 6 4

3 4.8

Where is the business located?

5

Company size

5 4.4

7 3 5 2.5 3

3 5 2.8

8

How long in operation?

2

3 2 4 1 1

1 2 2

8

Longest customer relationship Hardware and cabling Software developer Web site design Hardware and cabling Software developer Web site design Software solutions Software developer Hardware and cabling Web site design

Type of business

No

Yes Yes Yes Yes No

No Yes No

Yes

Other additional businesses

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Table II. Company characteristics – female entrepreneurs

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.

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provide a route to further personal development and growth via e-learning and via participation in eBusiness, since this allowed for “better understanding of how business works”, “better marketing”, “better information sourcing and use”; and provide a route to develop more than one business, to participate in the development of different types of business – virtual or otherwise – and to find suppliers for key services for the right price and at the right quality more easily than traditional means (such as the Californian programmer mentioned earlier).

All ten women felt that they had wanted to run their own business and that the right opportunity was all they had been waiting for. Here, ICT had provided that opportunity. The role of ICTs in empowering these women to become entrepreneurs was seen as crucial in each case. If they had not had this chance to start their own business they couldn’t imagine what else they might be doing, as the development of the internet accompanied their own development as entrepreneurs. They all saw the growth of new technologies including the internet as providing new opportunities for women to become entrepreneurs and to manage and run their own business successfully: This is new – new business, new medium, new ways for women like me to start and run a business (entrepreneur with five web-related businesses). People don’t have pre-conceptions with this the way they might in other business sectors. It is a new field and women have the chance to make it their own (software developer). In space no-one can hear you scream? In cyberspace no-one can tell if you’re male or female – you are another web presence (software developer with two e-businesses trading online for physical products). When I left school, they thought I might be a hairdresser or work in care because I was good with my hands, but I had not done so well. I worked on evening classes at computer studies and took a part-time job in a computer firm to understand the practical side. I began my business with one piece of equipment and low cash reserves – I couldn’t have done that in hairdressing! (hardware and cabling business).

In addition to the “level playing field approach”, women also made the point strongly that the use of ICTs also allowed home-based operation, which fitted better with their home and family situation. Two also explained that this home-based aspect enabled them to build a lifestyle which included a dynamic business without losing a family base – in comparison with their earlier high profile managerial jobs which required long hours away from home. Finance Finance had been found in each case both at start-up and to fuel specific actions to enable development. However, this had not always been an easy process, as explained by the Afro-Caribbean entrepreneur who had originally resorted to multiple credit cards as a way to get her business started: The bank look at me and say well – here is this big black woman, she got two children, no qualification and no husband . . . they were always polite but they didn’t want to give me their money. They think I have enough problems already without starting a business.

She had come to accept this, worked around the problem and after 18 months of perilous cash flows had gone back to the bank and been welcomed as a successful entrepreneur. She felt that she had to earn her acceptance by the profits generated and the growth she had demonstrated and by the more acceptable female role model she presented: It was precarious, continually keeping on top of the credit cards, so we didn’t go into big debts, paying one back and borrowing from another, but we were successful and in the end that speaks for itself whatever the colour or the position you’re in. I was married by then so maybe I fitted their profiles better. They used to bring out their special adviser who dealt with non-whites. He was Asian and I wasn’t sure he really approved of me before I got my wedding ring.

Despite her experience, borrowing from a bank had been an easier process for three owners, whose bank advisers were “excited about this sector [ICTs] already so didn’t take too much persuading. In fact they tried to get me to borrow more than I wanted”. “Raising money against the house” had provided key cash, as had support from friends and family, but no venture capital had been accessed. The three women who considered this option felt that they were a “bad fit” with the type of people operating venture capital schemes: I went to a meeting with four other businesses and these three guys from the venture capital company. Everyone else was male, over forty and they even seemed to be wearing the same suit! It was all very macho . . . although of course none of them had ever stuck their own necks out to start a company (hardware and cabling company). They couldn’t relate to me as a businesswoman, and my age seemed to be against me (oldest entrepreneur; software business).

Networking and associations Keeping up with change was seen as very important and one way to do this was by networking with other firms. This referred not only to physical networking via meetings, etc., but also to virtual discussion and e-groups. Earlier studies have identified networking as a key weakness for female firms (Martin, 2001). However, six of the women in this sample did actively network as part of their normal business operations. There was also good evidence of attendance at shows and exhibitions to make new contacts. Interestingly the most enthusiastic and active networkers were mostly co-preneurs, who went along to the male dominated groups as well as the female business associations: I don’t think I would go without my husband having been an established member already, although he hardly ever comes. Somehow, it isn’t an issue because people see me as [her husband]’s other half so it is fine for me to be there. I am sort of an honorary man so they will do business with me.

Part of the networking included forming loose associations to bid for work or to fulfil work, which had been successfully acquired. These associations were with other small firms, with sole traders and with professionals who had full-time jobs and worked occasionally on this type of work. The links with these firms had been built up over time, e.g. with past fellow university student links providing part-time professional services when needed. These personal contact networks were an essential part of the solicitation for information and customers.

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Similarly, links with other small firms had been developed over time, often via virtual links originally. The use of ICTs to form new links was a key part of information sourcing for these women, with the use of information sites such as the governmental information sites (e.g. for the DTI, www.dti.gov.uk) or specific gender-related sites (www.mumpreneurs.com). These led to exchange of e-mails or to registration on e-groups where discussion of topics was ad hoc and relevant to members’ needs.

174 Where do customers come from? After placing sources in rank order, “referrals” came highest, followed by “word of mouth”, “marketing” and “web site”. The separation of marketing and web site is perhaps indicative of the way in which these owners saw the web site in the context of their firms, despite their being all ICT-related firms. Their web sites, where necessary, offered key information about their firms, though these in themselves did not generate new business. Marketing meant other things, such as “targeting key firms to make them aware of us” or “establishing a reputation for reliability”. This was planned formally in seven out of the ten cases, with annual strategies adopted to try to develop successful new markets and successful new ideas for products and services. The mechanisms used varied, with the internet again seen as a back-up means to support the other range of activities. However, referrals were seen as the key way to access new business and from long-term trust-based relationships with customers, who were mainly other businesses themselves. In particular, if companies with whom they had a relationship or association, gained large contracts, they would devolve work to these owners and their firms: They have known us long enough now to know exactly how we work and our commitment to them. We have built up layers of trust with them so they know we won’t let them down. At the end of the day it comes to that. If they need to provide a good quality job and deliver on time they need for us to put the same emphasis on both these issues, which of course, we do.

Overseas contracts accounted for up to 25 per cent of the business generated in the four firms trading internationally. Three firms had up to 15 per cent overseas business, one 25 per cent and the others no overseas work. Where this had occurred it had happened as a result of “referral – word of mouth”. Here, the internet had provided a route: The first big overseas contract came because we were recommended to an Australian company via e-mail, as being the best ones in this particular software field. They corresponded with us by e-mail and we developed an understanding. Then they gave us a small piece of work as a sort of test, that was that really. We worked to time or earlier, with very good solutions to the business problems they needed solving with this particular software route (software developer). They had been trawling, looking at web sites to see how to develop their own and found two they liked. We designed both, so when they contacted the company involved asking who designed it, they were very pleased to find the same company providing the goods! We have designed four large-scale sites for them, together with ongoing development and maintenance and they have now put pressure on their supply chain to use the same approach so that is excellent follow-on business (Software developer).

However, it is also true to say that a characteristic of all these women entrepreneurs was their opportunism. New business ideas emerged, for example, at the school gate, while visiting a relative in hospital or while watching TV. It seemed that once the

“entrepreneurial switch” had been activated, these women found it difficult not to see business opportunities. Here, multiple businesses were being run with the original mainstream business and new virtual businesses developed to meet a particular need or to fit a particular business opportunity.

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Conclusions The qualitative methodology, which was adopted in this study, allowed for issues of relevance to emerge in an inductive manner. The underlying belief is that qualitative research lives and breathes through context. The study was effective in building a picture of female entrepreneurs operating in the new business sectors accompanying the growth of new technologies over the last ten years. The first research objective dealt with the investigation of personal and company characteristics, and the establishment of female-run ICT small businesses. In studying these firms the accent was on innovation and the development of the firm, including the role of ICTs in this process rather than a gender-specific perspective. However, the types of companies set up and the way in which they were run, inevitably relates to the gender of the entrepreneur, where deliberate choices have to be made to combine home and work needs. Of the two groups of sole and co-preneurs, female co-preneurs gained advantage by testing new ideas at home and additionally by accessing networks and associations more usually open to their male counterparts. This was a result of being seen as synonymous with their husbands or partners and hence as “honorary men”. Comparatively, few studies have been carried out into co-preneurship, so these findings indicate that key insights might follow on from further research in this area The second research objective related to ICT and the internet in enabling female entrepreneurs-small business owners to become independent and highly centralized or organized in their business efforts. Despite the points relating to operational and gender-related aspects of women-run small firms, both ICT and the internet did emerge as key enablers for female entrepreneurship. New opportunities for business development were identified. New aspects emerging from the study which differentiate them from earlier research on female entrepreneurship relate to: the consistently high level of profitability; the level of overseas work that was present in four out of ten firms with 15-25 per cent of business generated in the previous financial year; the outsourcing overseas of key work to specialists in all firms, e.g. outsourcing abroad to California and to Bangalore; and the accent on new ideas and innovation leading to multiple entrepreneurship. The home-based location for business operation, the co-preneurship and the way children were seen as part of the day’s operation, marked out these companies as having a gender component, since no studies carried out so far with male entrepreneurs reflect these issues. However, the ten participating entrepreneurs supported the idea identified earlier that they might be able to become low-cost producers, specialising for differentiation; and having wider focus via the internet to cover far more market segments than would have been possible through traditional distribution channels. Here the development of ICTs was a key enabler for the setting up and growth of their businesses. They had developed new ideas, new products and services around the first basic start-up point, all based on ICT products and services and with key functionality delivered by ICT (e.g. home-based working; e-commerce).

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The third research objective concerned ongoing personal contact networks and ICT association in fostering innovation and information, critical for business success. In order to identify whether these firms are typical of all ICT firms or of ICT firms run by women, a larger survey is recommended. However, by exploring the issues raised by women in terms of how and where business was conducted, the study gives insights into the possible outsourcing of work in the UK and overseas; the way innovation occurs, personal contact networks; and the development of multiple entrepreneurship. The fourth research objective included identification of the drivers for female entrepreneurs to succeed given the barriers to female run-ICT small businesses and also those faced by the women entrepreneurs from ethnic minorities. While it is recognised that the experiences of the latter are too limited to make generalisations, their experiences of not “fitting” the expectations of male business advisers or of the banks indicate that for ethnic female entrepreneurs, further research is needed. This echoes the need for work in ethnic entrepreneurship and small firms (Smith-Hunter and Boyd, 2004). The use of ICT and the internet allowed female entrepreneurs in the sample to go about their daily business in their breadwinning roles for themselves and their families and to defend their autonomy in managing their enterprises. Finally, the gender analyses in this study have contributed insights into the challenges facing women entrepreneurs in business and questioned the constraints on ethnicity for others. Technology is a great equaliser and the research has added further discussion on the economic contribution of female entrepreneurs. References Adler, N. (2004), “Women in international entrepreneurship”, in Dana, L.P. (Ed.), Handbook of Research in International Entrepreneurship, Edward Elgar Publishing, Northampton, pp. 30-40. Aldrich, H. and Zimmer, C. (1986), “Entrepreneurship through social networks”, in Sexton, D. and Sinclair, F. (Eds), The Art and Science of Entrepreneurship, Ballinger, New York, NY, pp. 3-23. Carson, D. and Cromie, S. (1989), “Marketing planning in small enterprises: a model and some empirical evidence”, Journal of Marketing Management, Vol. 5 No. 1, pp. 33-50. Carter, S. (2000), “Gender and enterprise”, in Carter, S. and Jones-Evans, D. (Eds), Enterprise and Small Business, Prentice-Hall, London, p. 326. Carter, S., Anderson, S. and Shaw, E. (2001), Women’s Business Ownership: A Review of the Academic, Popular and Internet Literature: Report to the Small Business Service, Research Report: RR002/01, available at: www.sbs.gov.uk/content/analytical/research/carter-report.pdf Catley, S. and Hamilton, R.T. (1998), “Small business development and gender of owner”, Journal of Management Development., Vol. 17 No. 1, pp. 75-82. Chapman, P., James-Moore, M., Szczygiel, M. and Thompson, D. (2000), “Building internet capabilities in SMEs”, Journal of Enterprise Information Management, Vol. 13 No. 6, pp. 353-61. Chell, E. (2002), “Women in science enterprise: an exploration of the issues, some policy implications and research agenda”, paper presented at the Gender Research Forum, Women & Equality Unit, London, 8 November. Claes, M.T. (1999), “Women, men and management styles”, International Labour Review, Vol. 138 No. 4, pp. 431-46.

Cope, J. and Watts, G. (2000), “Learning by doing: an exploration of experience, critical incidents and reflection in entrepreneurial learning”, International Journal of Entrepreneurial Behaviour & Research, Vol. 6 No. 3, pp. 104-24.

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Cowling, M. and Taylor, M. (2001), “Entrepreneurial women and men; two different species?”, Small Business Economics, Vol. 16 No. 3, pp. 167-75. Culkin, N. and Smith, D. (2000), “An emotional business: a guide to understanding the motivations of small business decision takers”, Qualitative Market Research: An International Journal, Vol. 3 No. 3, pp. 145-57. Du Reitz, A. and Henrekson, M. (2000), “Testing the female underperformance hypothesis”, Small Business Economics, Vol. 14 No. 1, pp. 1-10. European Commission (2003), Green Paper on Entrepreneurship: 21 January: Document Based on COM (2003) 27 Final, European Commission, Brussels. Fallon, M. and Moran, P. (2000), “Information communication technology and manufacturing SMEs”, paper presented to the Small Business Enterprise and Development Conference, University of Manchester, Manchester, 10-12 April. Feindt, S., Jeffcoate, J. and Chappell, C. (2002), “Identifying success factors for rapid growth in SME e-commerce”, Small Business Economics, Vol. 19 No. 1, pp. 51-62. Fernandes, E. and Cabral-Cardoso, C. (2003), “Gender asymmetries and the manager stereotype among management students”, Women in Management Review, Vol. 18 No. 1/2, pp. 77-87. Fielden, S. (2003), “Entrepreneurship and social inclusion”, available at: www. womenandequalityunit.gov.research_forum/grf_11_03_fielden.doc Foley, P. and Monder, R. (2002), “The use of online technology by ethnic minority businesses: a comparative study of the West Midlands and UK”, report commissioned by the UK Small Business Service, De Montfort University, Leicester, 26 May. GEM (2003), Global Entrepreneurship Survey, available at: www.sbs.gov.uk/default. php?page ¼ /analytical/publicationsbytheme.php Goyal, A. (2001), Developing Women: How Technology Can Help, Global Development Network, Washington, DC, available at: www.gdnet.org/pdf/842_Ashima.pdf Hill, J. and Scott, T. (2001), “The role of business intelligence and e-business in marketing decision making in knowledge-based and high tech start-ups”, Business Intelligence & E-Marketing Workshop Proceedings, IBM, Warwick, 6 December. Hill, J. and Wright, L.T. (2000), “Defining the scope of entrepreneurial marketing: a qualitative approach”, Journal of Enterprising Culture, Vol. 8 No. 1, pp. 23-46. Hill, J. and Wright, L.T. (2002), “Lifecycles and crises points in SMEs: a case approach”, Marketing Intelligence & Planning, Vol. 20 No. 6, pp. 361-9. Hunt, S.D. (1990), “Truth in marketing theory and research”, Journal of Marketing, Vol. 54 No. 3, pp. 1-15. JISC (2002), “JISC response to DfES e-learning strategy”, Joint Information Systems Committee, London, available at: www.jisc.ac.uk/dfes_elearning.html Johannisson, B. (1986), “Network strategies: management technology for entrepreneurship and change”, International Small Business Journal, Vol. 5 No. 1, pp. 19-30. Koukova, N.T. and Ratchford, B.T. (2001), “Something old, something new: a comparison of users and non-users of internet as an information source”, in Marshall, G.W. and Grove, S.J. (Eds), Enhancing Knowledge Development in Marketing: Proceedings of the American Marketing Association Summer Educators’ Conference, AMA, Chicago, IL, pp. 11-12.

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Ljunggren, E. and Alsos, G.A. (2004), “Male and female entrepreneurs”, available at: www. babson.edu/entrep/fer/Babson2001/IV/IVD/IVD/iv-d.htm (accessed 1 July). McDonald, F. and Burton, F. (2002), International Business, Thomson, London. Martin, L.M. (2001), “Are women better at organisational learning? An SME perspective”, Women in Management Review, Vol. 16 No. 6, pp. 287-97. Martin, L.M. (2003), “Thinking time: small firm owners and the internet, learning through reflection”, Reflective Practice, Vol. 4 No. 3, pp. 385-98. Martin, L.M. and Matlay, H. (2001), “‘Blanket’ approaches to promoting ICT in small firms: some lessons from the DTI ladder adoption model in the UK”, Internet Research; Electronic Networking Applications and Policy, Vol. 11 No. 5, pp. 399-410. Mukhtar, S. (2002), “Differences in male and female management characteristics: a study of owner-managed businesses”, Small Business Economics, Vol. 18 No. 4, pp. 289-311. Perry, C. and Coote, L. (1994), “Processes of a case study research methodology: tool for management development?”, presented at the National Conference of the Australian-New Zealand Association of Management, Wellington, pp. 1-22. Porter, M. (1985), Competitive Advantage, Macmillan Press, London. Raymond, L. (2001), “Determinants of web site implementation in small businesses”, Internet Research; Electronic Networking Applications and Policy, Vol. 11 No. 5, pp. 411-22. Rosa, P., Carter, S. and Hamilton, D. (1996), “Gender as a determinant of small business performance; insights from a British study”, Small Business Economics, Vol. 8 No. 6, pp. 463-78. Silverman, D. (2005), Doing Qualitative Research, Sage, London. Smith-Hunter, A. and Boyd, R.L. (2004), “Applying theories of entrepreneurship to a comparative analysis of white and minority women business owners”, Women in Management Review, Vol. 19 No. 1, pp. 18-28. Venkatesh, V. and Morris, M.G. (2000), “Why don’t men ever stop to ask for directions? Gender, social influence, and their role in technology acceptance and usage behavior”, Management Information Systems Quarterly, Vol. 24 No. 1, pp. 115-39. Venkatesh, V., Morris, M.G. and Ackerman, P.L. (2000), “A longitudinal field investigation of gender differences in individual technology adoption decision-making processes”, Organizational Behavior and Human Decision Processes, Vol. 83 No. 1, pp. 33-60. Walker, E. (2000), “Women in small business: a current perspective”, Proceedings of the 23rd ISBA Conference, Robert Gordon University, Aberdeen. Warren, L. and Hutchinson, W.E. (2000), “Success factors for high-technology SMEs: a case study from Australia”, Journal of Small Business Management, Vol. 38 No. 3, pp. 86-92. Watson, J. (2003), “Failure rates for female-controlled business; are they any different?”, Journal of Small Business Management, Vol. 41 No. 3, pp. 262-77. Yin, R. (1994), Case Study Research: Design and Methods, Sage, Thousand Oaks, CA. Further reading CURDS (2002) “How do innovating small and medium sized enterprises use business support services? A small targeted research study for the Small Business Service”, Research and Evaluation Section Final Report, Centre for Urban and Regional Development Studies, University of Newcastle upon Tyne, Newcastle, October. Nielson, S.H., von Hellens, L.A. and Beekhuyzen, J. (2004), “Challenge or chaos. A discourse analysis of women’s perceptions of the culture of change in the IT industry”, Issues in Informing Science and Information Technology: Proceedings of Informing Science þ IT Education Joint Conference, Rockhampton, ISI, Santa Rosa, CA, 25-28 June, available at: http://2004.informingscience.org/issuescoverTOC.pdf

Book reviews Taking Research to Market: How to Build and Invest in Successful University Spinouts Edited by K. Tang, A. Vohora and R. Freeman/PricewaterhouseCoopers Euromoney Institutional Investor Plc London 2004 £110.00 1 84374 132 6 Review DOI 10.1108/13552550510590572 Taking Research to Market: How to Build and Invest in Successful University Spinouts is a comprehensive step-by-step guide to exploiting intellectual property through spinouts. A highly informative text aimed at universities, academics, entrepreneurs, investors and indeed anyone involved in technology transfer, its key objective is to improve the reader’s ability to realise the potential benefits to be gained from the commercialisation of intellectual property through spinout companies. As an edited collection of expert contributions on the various aspects of developing successful university spinouts, the book is structured in four parts as follows. Part I (chapters 1 to 3) introduces the concept of spinouts; provides valuable guidelines on how to use the book; identifies the main components of university spinouts – emphasising the critical “team” element, and discuses the role of the university and the technology transfer office in the spinout and commercialisation process. Part II (chapters 4 to 8) deals with the preparation phase of the spinout, including achieving the all important “proof of concept”; building relationships with venture capital companies; generating and screening ideas; managing the intellectual property aspects, and finally selecting the spinout management team. Part III (chapters 9 to 14) focuses on the financial aspects of the spinout, including offering critical advice on developing an effective business plan; dealing with business angels; approaching investors and going through the due diligence process. Insights into the venture capital deal; how start-ups are valued by venture capitalists, and a discussion on term sheets and deal structures complete this section. Part IV (chapters 15 to 20) focus on the actual running of the spinout company. Here, critical issues such as mitigating against risk; sales and marketing; managing the investor relationship; further funding of opportunities, and building strategic corporate partnerships are discussed. A useful chapter on active portfolio management and the continued role of the technology transfer office completes the section. An interesting and extremely useful feature of this book is the “Relevance of chapters” table on p. 7 which, along with the “Timeline” table, helps to identify the most useful chapters for particular topics and audiences. Due to the comprehensive nature of the text, this early stage signposting allows the reader to focus on his/her particular areas of interest at a particular point in time. Thus, the text becomes a handbook or guide for ongoing reference.

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The inclusion of case studies not only adds to the practical nature of this book, but also renders it a valuable text book for those teaching and learning in the field of entrepreneurship, innovation, technology transfer and investment strategy. Students at postgraduate level and those pursing an MBA would find this text of most benefit. While the £100 þ price tag possibly makes the text a prohibitive purchase for the undergraduate population, libraries are advised to stock this book as a reference text for entrepreneurship students. The broad geographical scope of the book (Asia, Europe and the USA) provides a strong international dimension to the text as well as an appropriate context in which to discuss intellectual property, technology transfer; risk; investment decisions and the development of strategic alliances. Overall, the combined practical and academic content of the book reflects the knowledge and experience base of the expert team of contributors. This book is a welcome addition to the university spinout literature, providing invaluable practical advice for turning spinout potential into spinout reality. Dr Colette Henry Director of the Centre for Entrepreneurship Research, and Head of Department of Business Studies, Dundalk Institute of Technology, Dundalk, Ireland

Data Mining and Decision Support, Integration and Collaboration Edited by D. Mladenic, N. Laverac, M. Bohanec and S. Moyle Kluwer Academic Publishers Boston, MA 2003 ISBN 1402073887 Review DOI 10.1108/13552550510590581 The aim stated by the editorial board of this text is “to present a framework, methods and tools for the integration of data mining and decision support as well as their application to business problems in a collaborative setting”. This is an ambitious aim for this text, given that it is quite clearly a product of significant European research project, the European “SolEUNet” project, “Data Mining and Decision Support for Business Competitiveness: A European Virtual Enterprise”. The editors of this text appear to want to take the agenda further forward to address business and collaboration issues as well as the decision-making stage of the problem-solving process. I think they do well enough here, though it is difficult task and likely to have a relatively limited appeal. Data mining, for those who are unclear about it, deals with the solution of problems by analysing data that already exists in databases. Decision support on the other hand can be interpreted in many different ways. The view emerging in this text seems to be that it is a broad, generic term that encompasses all aspects related to supporting

people in making decisions. The key emphasis of the text, and its claim to uniqueness is its focus on integrating the two disciplines. So does the book do it? It certainly appears to present the wider research constituency in either of these core areas, data mining and decision support, and students of knowledge management with some useful material. Indeed it goes further to build at the interface between these two areas in a potentially exciting way, offering those researching the area with further scope for their efforts. The text is very much a product, I hesitate to say “by-product” of that substantial pan-European research project. Those involved present their findings on different aspects of that research project in short, highly focused chapters. Each of these is reasonably well integrated, but each chapter could also be read on its own as a discrete piece of research. I’m not so convinced just how useful this text will be to practitioners however. Attempting to meet the needs and expectations of academics and business practitioners is, in my experience, a very difficult balance to obtain when writing a text or organising a reader such as this. Practitioners want a very different type of book to read in my opinion and I feel that this one would prove hard to digest for many. The abstracts at the start of each chapter are useful in giving the reader insights to what they can expect in the chapter itself. The text is structured into four sections. Part 1 addresses “Basic Technologies” and is edited by one of the editorial team. In this section what are essentially introductory issues are developed. For example, in chapter one “Data Mining” is introduced and developed. Then chapter three considers “Decision Support” at its most basic level. Chapter 4 then introduces a discussion of the integration of the two subject areas. Part 2, edited by one other of the editorial team, considers papers under the theme “Integration Aspects of Data Mining and Decision Support. There are four “chapters” in this section, and one example is “Decision support for data mining: an introduction to ROC analysis and its application to decision support”. ROC stands for “receiver operating characteristics”. Another example is “Processing for data mining and decision support” which focuses on data processing that can benefit from software support using a particular piece of software, Sumatra TT. Part 3, again edited by a different member of the editorial board, deals with “Applications of data mining and decision support”. In this section the papers report on research carried in specific contexts. These range from traffic accidents in the UK, to web site access analysis for a national statistical agency, through to combining data mining and decision support to educational planning. There are in fact seven papers in this section, each giving brief insights to the work of the authors at the interface of the two core subject areas in this text – data mining and decision support. The final section, edited by the final member of the editorial board, considers “Collaboration Aspects”. The final chapter was the most interesting for me, given its focus on the university-industry relationship, but each of the five papers provides useful insights to other contexts such as prediction of resources for a health farm through to an environmental case study. The text includes 271 pages, providing 22 papers; it is tough to refer to them as “chapters”. The editors do provide a brief note to guide the reader on how they might approach reading this text to get the best out of it, which is quite useful. The authors

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come from right across Europe, though the majority are based in Slovenia and many of the case material originates there. I found it a useful read which gave me further insights to aspects of decision making that were useful. It does have to be studied with attention, particularly in the later sections. The diagrams are well presented in most of the chapters, though in a couple the authors have not translated the words to English, which is a bit confusing. A useful text for any university library perhaps. Pauric McGowan Director, The Northern Ireland Centre for Entrepreneurship, The University of Ulster, Newtownabbey, UK