concept of women entrepreneurship
TRANSCRIPT
A
Project Study Report
On
Contemporary Issues
Titled
‘Emergin concept of women enterpreneurs’
PARTIAL FULFILLMENT OF TWO YEARS FULL TIME COURSE IN
“MASTER OF BUSINESS ADMINISTRATION”
OF RAJASTHAN TECHNICAL UNIVERSITY, KOTA
Batch(2010-2012)
SUBMITTED TO: SUBMITTED BY:
FMS, MAIET JAIPUR Priyanka Sharma
MBA 1st YEAR
Faculty of management studies
Maharishi Arvind institute of engineering & technology, Jaipur
1
Acknowledgement
I express my sincere thanks to my project guide, Mrs.Suman Pareek - Lecturer, Department of
Faculty of management studies ,Maharishi Arvind institute of engineering & technology
for guiding me right form the inception till the successful completion of the project. I sincerely
acknowledge him for extending his valuable guidance, support for literature, critical reviews of
project and the report and above all the moral support he/she/they had provided to me with all
stages of this project.
I would also like to thank the supporting staff of Department of Management Studies, Maharishi
Arvind institute of engineering & technology, for their help and cooperation throughout our
project.
Priyanka Sharma
MBA 1st YEAR
2
PREFACE
Management education required close co –operation between business &institution. Theory
and practical are two inseparable parts of any type of education and are essential for management
study. Practice makes a man perfect .A student gets theoretical knowledge from classroom and
gets practical knowledge from industrial training, When these two aspects of theoretical
knowledge and practical experience together then a student is full equipped to secure his best. In
conducting the project study in an industry, student gets exposed and has knowledge of real
situation in the work field and gains experience from them. The object of the summer the
training cum project is to provide an opportunity to experience the practical aspect of
management in any organization .It provides a chance to get the feel of the organization and its
function.
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CONTENTS
1. INTRODUCTION
2. PUSH-PULL FACTORS AND WOMAN IN BUSINESS
3-METHODOLOGY
4.IMPEDIMENTS FOR WOMEN ENTREPRENEURSHIP DEVELOPMENT
5.WOMEN’S ENTREPRENEURSHIP: ISSUES AND POLICIES
6.CONCLUSION
7.Bibliography
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INTRODUCTION
It is a general belief in many cultures that the role of women is to build and maintain the homely
affairs like task of fetching water, cooking and rearing children. Since the turn of the century, the
status of women in India has been changing due to growing industrialization, urbanisation,
spatial mobility and social legislation. With the spread of education and awareness, women have
shifted from kitchen to higher level of professional activities.
Entrepreneurship has been a male-dominated phenomenon from the very early age, but time has
changed the situation and brought women as today's most memorable and inspirational
entrepreneurs. In almost all the developed countries in the world women are putting their steps at
par with the men in the field of business. Except some Islamic countries of the world the law of
the country has been made in favour of the development of women entrepreneurship.
This presentation is designed in four different sections. The first one which is continuing under
the head 'introduction' depicts a general view of women entrepreneurship and the organisation of
the article. The next section deals with the modern avenues of the women entrepreneurs. The
third section involves the study of new Central Government scheme for the women entrepreneurs
and the last section contains the conclusion of the study.
MODERN AVENUES OF THE WOMEN ENTREPRENEURS
The efforts of Udyogini an NGO may be cited here as an example for development and training
of women entrepreneurs. Udyogini was set up to co-ordinate and facilitate management training
for grassroots women's groups for the World Bank Institute-funded Women's Enterprise
Management Training Outreach Program (WEMTOP). This was a three-year participatory action
learning project aimed at strengthening the capacity of intermediary NGOs to deliver
management training to poor women micro entrepreneurs in 1992. The training program
consisted of Grassroots Management Training (GMT) carried out for women producers and the
Training of Enterprise Support Teams (TEST) for the trainers of GMT. The trainings were
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carried out through NGOs who were responsible for group formation and bringing together the
women. NGO staff was trained as trainers or Enterprise Support Teams (ESTs).
The project was based on a package completion approach. It was recognized that training alone
would not be sufficient for promotion of enterprises. A number of other linkages - forward and
backward - would be necessary. However it was thought that the field based NGOs will provide
these other linkages. During the WEMTOP phase, Udyogini worked with 21 Voluntary
Organizations (NGOs) in three states of Orissa, Bihar, and Rajasthan. A total of 130 trainers and
1,077 producer women were trained.
It was exciting that Udyogini was able to train so many women and NGOs that worked with
women. But more was needed—especially as the markets were getting more complex. To remain
strategic and inform its training programs for others, Udyogini needed to work directly at the
grassroots to understand what it takes to take women all the way through from 'mobilization to
market'. So, in 2002, Udyogini began direct implementation at the grassroots. It selected sectors
of the economy in which women were concentrated and in which depth and scale were required
to be demonstrated to make a difference. It selected regions that offered a resource base – skills
or natural resources that were required to be harnessed for enterprise and to empower women. It
selected locations that were challenging and where women were not being supported for micro
enterprise work in any significant measure by government or NGOs.
Udyogini has come a considerable distance since its inception and has acquired critical
knowledge of gender and micro enterprise promotion at the grassroots both through its support
work with partner NGOs and its programs in the field.
SCHEME FOR WOMEN ENTREPRENEURSHIP
In order to alleviate the problems faced by women entrepreneurs, Government of India launched
the scheme Trade Related Entrepreneurship Assistance and Development of Women
(TREAD) in 1998. The scheme envisages development of micro/tiny women enterprises in the
country both in the urban and rural areas. The main objective of the scheme is to empower
women through development of their entrepreneurial skills by eliminating constraints faced by
them in their sphere of trade. A revised scheme of TREAD was launched in May, 2004. It is to
be implemented by Small Industries Development Organisation. It also provides for market
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development and financial loans through NGOs, which are also provided grants for capacity
building. This assistance is to be provided for self-employment ventures by women for pursuing
any kind of non-farm activity.
The non-profit Vital Voices Global Partnership grew out of the U.S. government’s successful
Vital Voices Democracy Initiative. As Vital Voices continues the work of advancing women’s
economic, political and social status around the world, we speak to its CEO and President, Alyse
Nelson, on providing skills, networking and other support to women around the world.
Entrepreneur (E): What was the idea behind starting Vital Voices?
Alyse Nelson (AN): Vital Voices started as a U.S. government initiative in 1997 to look at the
condition of women around the world. We want to bring the voice of women to the decision-
making table, and inculcate the idea of leadership in them. Vital Voices has been continuously
focusing on three major areas—political participation, human rights and economic
empowerment.
Hillary Rodham Clinton, former U.S. first lady, was the founder and we became a non-
governmental bipartisan organization in 2000. By bipartisan, I mean that our organization has no
political party affiliation though we came out of one political party. In terms of administration,
we are completely independent.
When we became a non-profit organization, we felt that there was a real need to support
emerging women leaders through three key means. We first try to connect women leaders and
then build their capacity. Often, the women we work with are very successful and have
tremendous impact on their societies, though they do not have fancy academic degrees under
their belts. We help them by tweaking things a little bit in the areas of marketing, strategy
planning and communications to ensure effective results and help them better identify their
goals. We do give a few grants but for the most part, we invest in people’s human and social
capital, their hard skills and network.
We find that when we are building leaders, if we give them grants then the moment that grant is
over, they have to find another grant. Our concept is “rather than giving a woman a fish, we
teach her how to fish.” Vital Voices has trained and supported 8,000 women in 127 countries till
date.
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E: What do your programs strive to achieve?
AN: We create a long-term investment for the women we support. We support her in building
her connections, capacity and credibility. We believe strongly that we have the right focus. We
have seen again and again that when we invest in emerging women leaders, who may not be the
CEO of a company or the president of her country, these women definitely have the potential to
become someone special some day. Many of these women are social entrepreneurs, forging new
grounds in their countries.
E: Vital Voices does not have offices in the countries it operates in; doesn’t that hamper
your work?
AN: Though we don’t have offices in all the countries we work in, often enthusiastic women
entrepreneurs contact us directly. Many of them learn about us via our alumni members. We
have a very loyal network of alumni who are our best advocates. They have been the head-
hunters in finding the next generation of emerging leaders.
E: What has been your learning from working in India?
AN: We came to India through the NGO SEWA. My key learning has been that while women
are an extraordinary economic, political and social force here, there are many violent acts
committed against them. There are some women who are respected and hold important positions
while women’s human rights are still being violated. This is not unique to just India. However,
the gap could be a little larger here as you do have so many women in leadership positions in the
country.
E: Which is the most critical area where women entrepreneurs need attention?
AN: One of the most critical areas is mentoring, which is an important tool in grooming talent.
Imagine this: You are a woman living in Kolkata and have a small business.
You have never traveled out of India and your network is just your immediate community. All of
a sudden you are mentored by a senior woman executive working in a MNC in U.S.A. or may be
one of the Fortune 500 women like Beth Brooke, the Global Chairperson for Ernst and Young.
Beth enjoys a global network and can ask favors from a huge chain of people. If she mentors the
woman from Kolkata, her world would expand a hundred fold.
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E: What are the qualities a women entrepreneur must have to make the cut for Vital
Voices?
AN: We need a woman with great potential, who shows leadership skills, has the ability to go
beyond the point where she’s standing now and is willing to bring others along with her. After
working here for 15 years, it’s really easy for me to identify which woman will go far if we
mentor her.
As we work in more than 127 countries, our model is not to reinvent. There are women in each
of these countries who are making a real change to their environment and our model is to find
those women and invest in them.
E: Why doesn’t Vital Voices actively take part in financing?
AN: We are not looking at getting more involved in the funding part. First of all, we believe that
we don’t build leaders by giving them money but by making long-term investments that are
never going to change. If you help a woman find her leadership qualities and develop those, then
you can never take that away from her. That is a much greater investment than just funding.
E: What are the major pitfalls that women entrepreneurs face in India?
AN: The major constraint woman entrepreneurs face in India, and elsewhere in the world, is
limited access to capital. Hillary Clinton once said that some of the greatest innovations die at
bank parking lots.
Also, in many other countries women don’t have the right to property, and some of the legal
issues and violence against women also act as barriers. If women do not have equal rights,
support and protection, then their growth will be restricted.
These factors are absolutely necessary to turn women into successful entrepreneurs. Last but not
the least, education plays a very crucial role and there is a huge need to focus on women’s
education.
E: What are your goals and expectations from India?
AN: We would like to bring one of our successful programs to India called the Businesswoman
Network Initiative. It connects businesswomen to mentors, corporate ambassadors and trainers.
To create marketing opportunities, we are trying to develop a special program to support
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business leaders in India by 2011. We definitely realize that special attention has to be given to
India.
©Entrepreneur November 2010 by Entrepreneur Media, Inc. All rights reserved.
The scheme has three components;
(a) To provide assistance to women entrepreneurs through NGOs for non farm entrepreneurial
activity.
(b) To build up capacity of Entrepreneurship Development Institutions like National Institute for
Small Industry Extension & Training (NISIET), Small Industries Service Institutes (SISI), State
level EDIs, etc., by providing financial support in the form of Government of India grant.
(c) To create entrepreneurship development training facility through NGOs by providing
financial support for conducting training programmes.
MENTORING WOMEN ENTREPRENEURS IN EMERGING MARKETS: LEVERAGING
RELATIONSHIPS, BUILDING CONFIDENCE,
AND CREATING WEALTH
The presence of women around the world driving small and entrepreneurial organizations
has had a tremendous impact on employment and on business environments worldwide (Dianna
Project, 2005). The size and growth of this phenomenon has attracted significant attention from
academics, practitioners and policymakers. By 2003 women were clearly recognized as a driving
force in the US economy, whether measured by the number of businesses owned, the revenues
generated or the number of people employed (Brush et al., 2006). Other countries around the
world report similar numbers emphasizing the importance of these women and the businesses
10
they start in a variety of geographies (Diana Project, 2005). Nearly one-third of all the businesses
in the formal economy are women-owned, and women entrepreneurs are expected to be playing
an even larger role in informal sectors (NFWBO, 1999). The presence of women around the
world driving small and entrepreneurial organizations has had a tremendous impact on
employment and on business environments worldwide (Minniti et al., 2005). However, it is still
the gap in the research and dissemination of information about female entrepreneurship. What
country, venture and personal factors influence the growth experiences of women-led
businesses?
While there are a number of studies, identifying women SME success factors have been
carried out in advanced countries (Anna et al., 1999; Chaganti and Parasuraman, 1997; Lerner
and Almor, 2002), economic research on entrepreneurship in transition economies is less
developed and only a few studies have used a rigorous scientific approach (Tkachev and
Kolvereid, 1999). The lack of information on female entrepreneurs is especially apparent.
According to Ylinempåå and Chechurina (2000), Russian women have limited options to achieve
a leading position in industry, politics or other spheres of social production. Those limitations
serve as “push” factors for women to enter the entrepreneurial sector, where starting new,
smaller firms serves the double purpose of both generating additional family income, and
creating an arena for self-fulfilment. Results from cross-cultural studies indicate that women
from Eastern and Central European countries go into business ownership as a means of escaping
unemployment (Lisowska, 1998; Ben-Yoseph and Gundry, 1998). In the movement from a
centralized to a market economy, these women entrepreneurs must adapt and acquire knowledge
and information rapidly. Even as the number of women entrepreneurs worldwide is growing
steadily, the ability to survive and grow will require continual learning on the part of the woman
entrepreneur and her organization.
Research has shown that entrepreneurial learning is critical to the survival and growth
of entrepreneurial businesses, and, as Sullivan (2000) argues, mentors bring added value
interventions that make a difference in the long-term success of these businesses. Mentors may
provide the support entrepreneurs need when it matters most. Mentoring has been studied
largely in the context of the large corporation, and within the framework of career
development, training, and performance. There has not been a significant amount of research
conducted on the role of mentors in the development and growth of entrepreneurial
businesses. Studies have often looked at mentoring and networking together, although these
11
processes may be distinct from one another in the degree of formality, and the frequency and
type of interactions that distinguish mentors and protégés from activities that involve
participation in professional networks.
While contemporary research has shown that women entrepreneurs recognize the
precursors of growth and the importance of activities such as information seeking and planning
to their strategic leadership role, our study seeks to extend previous research by investigating
the influence of mentors on perceptions of entrepreneurial self-efficacy and its relationship to
the performance of women-led firm. Thus, we are investigating the direct and indirect role of
mentors in helping women entrepreneurs in emerging markets to achieve superior
performance.
With their need for knowledge and information about business development and
growth, mentors may be attractive resources to these women. We know that entrepreneurs
learn from a variety of incidents and experiences. Of interest is whether a sample of
entrepreneurs who are new entrants to a market economy can benefit from the presence of
mentors, and develop the confidence they need to make appropriate and effective
entrepreneurial decisions.
CONTEXT OF THE STUDY
The history of modern entrepreneurship in Russia began just over ten years ago, when in
1987 entrepreneurship was legally allowed. Until this, private enterprises were prohibited in the
Soviet Union. By the end of Gorbachev’s presidency of the Soviet Union in 1991, most forms of
private business had become legal (Tkachev and Kolvereid, 1999). Already in 2000, over
891,000 entrepreneurs operated in Russia (Russian SME Resource Centre). Over 25% of the
population of Russia is occupied today in SMEs, which account for 12-15% of GDP of the
country.
During the first years of development towards a market economy, the emerging
entrepreneurial sector in Russia by and large may be characterized by what Ageev et al (1995)
labelled as “speculative” or even “predatory” entrepreneurship. The dominant mode of
entrepreneurship was focusing on creating value and making profit from trade and financial
operations, exploiting weaknesses in the state legislation and taxation system, and even utilizing
illegal or unethical measures (Bezgodov, 1999). However, over the passing decade the situation
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has changed and contemporary entrepreneurship in Russia is oriented towards longitudinal value
and job creation (Ylinenpåå and Chechurina, 2000).
Little is known about entrepreneurship in Russia. Based on the albeit scant previous
research in this area, it is possible to begin to draw a “portrait” of the typical entrepreneur. The
average age of Russian entrepreneurs is between 30-50 years (Turen, 1993). Usually about 70-
80% of entrepreneurs from the samples have high levels of education (Babaeva, 1998). It should
be in kept in mind that almost all research on entrepreneurs previously done in Russia are taken
from the sociological point of view and data are gathered from urban areas. The number of
women among entrepreneurs is between 10% (Turen et al., 1992) and 30%, which is the lowest
share of women among all social groups of the population except the military (Bezgodov, 1999).
Characteristics of entrepreneurs working in small trade marketplaces are different. They are
mostly women (70%), and a huge part of them are either pensioners or students (Babaeva, 1998).
This social group is actually not investigated at all. Some of those marketplace workers are
registered as sole proprietorships, while others are not. In the present study over 90%
respondents are registered as sole proprietorships, which allows us to open the “black box” of
this phenomenon.
Based on previous research it is possible to conclude that most entrepreneurs perceive
external environment as highly unfriendly. High taxes, an inconsistent legislation system, high
dependence of economic life upon political turbulence, and inflation were mentioned as factors
prohibiting business in Russia (Iakovleva, 2001, Ylinenpåå and Chechurina, 2000). Lack of start-
up capital and prevailing business laws and the tax system are particularly challenging for
women’s entrepreneurship in Russia. Other barriers that greatly limit entrepreneurship
development that were mentioned by Russian female entrepreneurs in the Ylinenpåå and
Chachurina study included: high taxes (90% of respondents), inconsistency of laws (81%),
availability of capital (67%), banks’ instability (66%), inflation (66%), corruption (55%), and
criminality (39%). This is quite different from problems of American women entrepreneurs,
who tend to be more concerned about the functional sides of business – profitability of business,
management and growth, and innovation (Babaeva, 1998). Motivation to starting a business
varies, but in comparison with Western studies, Russian women have more tangible motives
such as the search for income or striving for financial rewards. In Ylinenpåå and Chachurina
study, it is explained by the problematic economic situation in Russia where the ambition to
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secure an acceptable standard of living is a high-priority issue. Thus, many of these women may
be characterized as necessity entrepreneurs.
While the profile of Russian entrepreneurs as well as their motivation to start the business
was explored in some studies during the last decade, there is an absence of studies examining the
combination of different factors in attempt to explain performance of Russian SMEs, especially
those headed by women. This study addresses this research gap by testing a model explaining the
performance of women SMEs in Russia.
THEORY
While the performance of new ventures is widely studied (see for example Chandler and
Hanks, 1994; Kolvereid and Shane (1995); Wiklund and Shepherd (2003), Westhead et al
(2005)), there is no consensus regarding the basic constructs that affect a new venture
performance. The personality of the entrepreneur is often perceived by practitioners as one of
the most fascinating topics in the field of entrepreneurship (Delmar, 2000). Some believe that a
successful entrepreneur is a result of the special set of personal abilities and characteristics,
rather than other factors. Often the human capital characteristics of the entrepreneur or of the
members of the founding team provide personal abilities that facilitate small firm growth and
performance (Bird, 1993; Brush and Chaganti, 1997; Chandler and Jansen, 1992; Davidsson,
1989). Human capital theorists argue that breadth of human capital resources will be
associated with higher levels of productivity (Becker, 1993). Human capital can be subdivided to
general human capital and specific human capital. General human capital characteristics, which
include founder’s years or level of education, years of work experience and management
experience, do affect new venture performance (Gimeno et al., 1997; Cooper et al., 1994).
However, the effect those general human capital characteristics have on enterprise
performance also ‘depend on its relative payoff in the venture versus alternative employment’
(Gimeno, 1997, p. 756). Specific human capital is mostly valuable when the context of those
characteristics similar to the new venture context. Business similarity, prior start-ups, years of
previous entrepreneurial experience and role models including mentoring was shown to have
positive effect on performance (Brown, 1990; Cooper et al., 1994; Graham & O’Neill, 1997)
14
.
The Influence of Role Models and Mentors
Social Learning Theory (SLT) proposes that one way learning can occur is vicariously,
through the observation of behaviors in others, referred to as role models (Bandura, 1977, as
cited in Scherer and colleagues, 1989). Adapting the principles of SLT to entrepreneurial role
models in the form of mentors would indicate that individuals having greater exposure to other
entrepreneurs are more likely to engage in entrepreneurial ventures and activities (Schaver and
Scott, 1991). Mentoring in the context of support to novice entrepreneurs has been defined as
a protected relationship between a veteran and a newcomer in which learning and
experimentation can take place, guidance is provided, and new skills can be developed in the
pursuit of personal goals and business success (Brown, 1990; Graham & O’Neill, 1997). In
addition to experienced entrepreneurs, entrepreneurial mentors may also appear in the form
of other family members, employers, teachers, or anyone whom the individual has had an
opportunity to observe (Sexton & Smilor, 1986). Indeed, private sector partnerships for
mentoring have been described as one of the determinants of success in new venture creation
(Lalkaka, 2003). However, Cope and Watts (2000) interestingly caution us to avoid the
assumption that mentoring is the most important form of learning, since experiential learning
in which entrepreneurs learn from their own mistakes as well as successes is very powerful
(Bechard & Toulouse, 1991; Cope & Watts, 2000).
Mentors typically support entrepreneurs as they start and grow their businesses by giving
expert help and assistance in problem solving, influencing behavioral and attitudinal change
(Sullivan, 2000). A mentor’s role can be strategic and developmental, calling attention to
specific events or critical incidents that have occurred in the history of the business and relating
them to the present circumstances, a process Cope and Watts (2000) refers to as “bringing
forward” the experience of the entrepreneur. Gibb (1997) termed this ‘generative’ learning,
described as “reflecting on the vision, performance, and capability of the business and the ways
in which new threats and opportunities impact upon it” (Gibb, 1997: 19). Based on their
involvement in a mentoring program for SMEs developed by Enterprise Ireland that has
produced over 5,000 assignments (Mattacks, 2004), Doyle and O’Neill distinguish mentoring
15
entrepreneurs from the mentoring that takes place in the context of larger organizations, in
that it may help reduce feelings of isolation, assist the business in meeting its goals, and help to
fill a knowledge or skill gap (Doyle & O’Neill, 2001). For women, the role of mentors as role
models may be particularly significant. The importance of a role model—someone who has
achieved goals to which they may be aspiring and is a source of strategies for both success and
survival—is critical to the career development of women. This is confirmed by the evaluation
study of the Community Entrepreneurs Program, a training program for women entrepreneurs
in Massachusetts, mentoring was reported as proving useful to program participants, enabling
access to new distribution channels for selling products and services, helping to grow the
business, and helping to generate revenue (Dumas, 2001). Thus our first proposition in this
study would be the following:
Hypothesis 1: Mentoring is positively associated with firm performance.
One More Time: The Role of Self-Efficacy
Theories trying to explain behaviour by individuals perceiving and interpreting the
information around them are cognitive theories. Within behavioural theories, cognitive models
offer the most sophisticated theoretical frame of reference to explain both entrepreneurial
intentions and performance, which incorporates the complexity of entrepreneurial behaviour, and
enables the actual test of the model (Delmar, 2000). The cognitive behavioural models explain
both highly complex behaviour and differences in choices and performance through entrepreneur
competencies. Often competencies of founder are found to be crucial to venture performance
(Brush and Hisrich’s (1991); Lerner et al. (1997)). Those competencies in turn depend upon both
general and specific human capital characteristics. Self-assessed competencies are the core of
individual’s self-efficacy beliefs about their personal “capabilities to mobilize the motivation,
cognitive resources, and courses of action needed to exercise control over events in their lives”
(Wood and Bandura, 1989: 364; Chandler and Hanks, 1994a). The concept of self-efficacy is
concerned with ‘people’s beliefs about their capabilities to produce performance that influence
events affecting their lives’ (Bandura, 1995, p. 434). Perceived self-efficacy has been proposed
as a central concept in entrepreneurship (Boyd and Vozikis, 1994) because it has been proven to
be associated with initiating and persisting in achievement-related behaviours (Wood and
Bandura, 1989). Perceived self-efficacy influences the strategies and performance of
16
entrepreneurs. It was found that entrepreneurs with higher perceived self-efficacy achieve higher
performance (Westerberg, 1998). One of the core entrepreneurial competencies is opportunity
competence – ability to recognize and develop market opportunities through various means.
We continue our examination with the fundamental hypothesis that persons with strong
entrepreneurial characteristics, in particular with high self-efficacy operationalised as
opportunity competence, are more likely to have successful and higher performing ventures than
are entrepreneurs that do not have these characteristics (Covin & Miles, 1999; Stewart, Watson,
Carland & Carland, 1998). Therefore,
Hypothesis 2: Self efficacy is positively related to firm performance.
Determinants of Entrepreneurial Self-Efficacy: The “Role” of Mentors
If, as has been shown, self-efficacy has a significant impact on choice of career path and
firm performance, then it is of interest to explore possible antecedents to self-efficacy. Boyd
Vozikis (1994) proposed that self-efficacy can be enhanced by some human capital variable,
such as previous work experience, entrepreneurial experience and role models. Bandura (1992)
posits that our confidence in our ability to perform certain tasks is developed in four key ways:
“mastery experiences,” “modeling,” “social persuasion,” and “judgments of our own
physiological states.” Research by Scherer et al. (1990) suggests that lower self-efficacy among
women, and their lower intentions for entrepreneurship, stem in part from a paucity of
personal or related experiences which are associated (at least by them) with being successful as
an entrepreneur. In addition, to the extent that mentors are role models, this result may be
due in part to the importance of “modeling” as a way of developing self-efficacy (Bandura,
1992). That is, in addition to the “mastery experiences” described above, self-efficacy can also
be enhanced through social persuasion, or the positive encouragement and feedback that
individuals are given by role models (Cox et al., 2002).
Additionally, many of the functions of the mentor relationship may increase
entrepreneurial self-efficacy, such as sponsorship, coaching, access to challenging work
assignments, and access to important informal social networks through which information and
new opportunities are exchanged (Kram, 1983). These aspects of mentoring have the important
impact of providing a road map to women as they are navigating their careers.
17
Finally, social support theory proposes that the support received from interpersonal
relationships has a positive effect on how a person copes with stress or life change. Individuals
rely on relationships to provide emotional reassurance, needed information, and instrumental
aid (Fisher, 1985). Mentoring has been shown to be a crucial source of social support. The
relationship has been connected to greater feelings of confidence, competence and credibility
(Thomas, 2001). Based on the research, the following propositions are provided:
Hypothesis 3: The greater the degree of mentoring influence, the higher the degree of
entrepreneurial self-efficacy.
Hypothesis 4: The greater the degree of entrepreneurial self-efficacy stemming from
mentoring, the higher the firm performance. That is, self-efficacy will serve as a critical
18
METHODOLOGY
Participants
We sampled 601 Russian women entrepreneurs that are associated with the Russian
Women’s Microfinance Network (RWMN). The mission of the RWMN is to support the
development of sustainable women-focused, locally managed microfinance institutions (MFIs)
throughout Russia by creating an effective financial and technical structure that provides high-
quality services to partner MFIs over the long-term. With assistance from Women's World
Banking (WWB), which has been active in Russian since 1994, several women-led organisations
and local microlending institutions formed RWMN, which was registered as a local non-profit
organization in October 1998. Today RWMN operate in 6 regions in Russia: Kostroma, Tver,
Kaluga, Belgorod, Vidnoe, and Tula with the head office in Moscow. Each division is an
independent local organization that provides micro loans for clients, with no less than 51% of
client’s being women.
After the questionnaire was constructed and pre-tested with the help of 7 Russian women
entrepreneurs that commented on each question, it was sent electronically to Moscow. RWMN
was responsible for printing it out, and distributing to its divisions. Data was collected by the
workers of local divisions during face-to face interviews with respondents. As a result we
received 601 questionnaires. Five of them were removed due to missing data, then the sample
was filtered on two controls – only women should be left (there were 5 male responses) and we
considered only decision-makers (positive answer to the question - are you responsible for the
main decisions taken in the enterprise?). That resulted in 555 questionnaires. Some descriptive
statistics are presented in Table 1 below. The sample mainly consisted of sole proprietorships
with 94% of businesses having no more than 10 employees (and 60% having just 2 employees),
woman-led and woman-owned (95%), operating mainly in the service industry (80%), with 56%
of enterprises being family businesses. One more interesting finding is that only 49% of
respondents have higher education, in comparison to 80% from previous findings (Grichenko et
al., 1992; Kofanova, 1997, Iakovleva 2005). This profile, as expected, differs from the typical
19
Russian SME profile with regard to industry structure, legal form, number of employees and
family business issues (see for example Iakovleva, 2005, Bezgodov , 1999).
While the sample is not representative of the general profile of Russian entrepreneurs, its
particular value is in providing a “portrait” of women-led small enterprises, with its specific
structure. While the governmental efforts focus on stimulating entrepreneurial growth in the
country and especially on women-led enterprises, it is important to understand the specific issues
of such enterprises.
20
Dependent Variable: Firm Performance
Performance is the multidimensional concept. There is little consistency in what is
meant by the term ‘performance’ in different studies. Three different measures are most often
associated with the concept of performance: survival of the firm, firm growth and firm
profitability (Delmar, 2000). It is advised that studies should include the multiple dimensions of
performance and use multiple measures of those dimensions (Murphy et al., 1996). In the
present study only existing firms are considered, and questions related to bough growth and
profitability are applied. A measurement of performance is extremely complex for young and
small firms. Such traditional financial measures as return on investments or net profits are
problematic when studying new ventures, since even successful start-ups often do not rich
profitability for a considerable period of time (Weiss, 1981). Traditional financial measures are
especially unreliable in the Russian context. Due to heavy taxation rates, small enterprises
seldom report true economical results in accounting. The other specific reason of not applying
such direct measures in the Russian context is that Russian statutory accounting norm and
practices differs greatly from international accounting norms and practices. Researchers
interested in the performance of emerging businesses must acquire data that meet the criteria
of relevance, availability, reliability and validity when the only attainable source of data is a self-
administrated evaluative questionnaire (Chandler and Hanks, 1993).
Performance is measured with the help of importance and satisfaction questions on
certain items (see Table 2). Respondents were asked to indicate the degree of importance their
enterprise attaches to the following items over the past three years: sales level, sales growth,
turnover, profitability, net profit, gross profit and to the ability to fund enterprise growth from
profits. Than, they were asked how satisfied they have been with the same indicators over the
past three years. A slightly modified version of questions used by Iakovleva (2005) were
applied. Originally questions were taken partly from Chandler and Hanks (1993) and partly from
Westhead, Ucbasaran, and Wright (2005) and transformed after the consultation with Russian
entrepreneurs. The questionnaire we used for the present study was pre-tested with seven
Russian women business owners, and some questions were reformulated after that. Based on
these 14 questions, the composite performance index was constructed following the principle
used in expectancy theory and later in Theory of Planned Behaviour (Ajzen, 1991). First,
21
importance questions were rescaled from a 7-point Likert scale (1 to 7) to scale (-3 to 3), and
than satisfaction and importance scores were multiplied. After that, principal component
analysis was done, which resulted in one factor which we called performance (α=0,95).
Independent Variables
Mentoring
Mentoring Roles and Functions was measured with a 6-item scale that was adapted
from Scandura, 1992. Table 3 includes the items and functions based on factor analysis results.
Entrepreneurial Self-Efficacy
Entrepreneurial Self-Efficacy was measured using De Noble et al.’s (1999) 6-item self-
efficacy measure that focuses on innovation and product development skills (e.g. “I can
originate new ideas and products”). The internal consistency (Cronbach’s alpha) was .83
RESULTS
Multiple regression analysis was used to test hypotheses (1) and (2). Mediated
regression approach recommended by Baron and Kenny (1986) was used to test our
hypotheses (3) and (4). In this approach, three separate regression equations are estimated.
First, the mediator (self-efficacy) is regressed on the independent variable (mentoring).
Second, the dependent variable (performance) is regressed on the independent variable
(mentoring). In the last equation, the dependent variable (performance) is regressed
simultaneously on both the independent (mentoring) and mediation (self efficacy) variable.
In conducting our analyses, we found support for hypothesis (1). That is, mentoring
(role models) was positively associated with firm performance (see Table 5). In addition, we
also found support for hypothesis 2, such that self efficacy was also positively related to the
firm performance (see Table 6). Moreover, results also revealed support for hypothesis 3 in
that the greater the degree of mentoring influence, the higher the degree of entrepreneurial
22
self-efficacy. However, in our final set of mediated analyses, we found partial support for
hypothesis 2. More specifically, self-efficacy partially mediated the relationship between the
mentoring and firm performance.
“So What?” Implications Based on Our Research
Results from our study suggest that mentoring is an important developmental
relationship for entrepreneurial women, especially for those in emerging and developing
markets. By understanding how mentors and role models support women in these tenacious
positions, we may be better able to create the support systems to nurture and propel women’s
entrepreneurial efforts.
Forthcoming research can build on our study by focusing on differential roles of “expert”
capital versus general social capital in the context of gendered entrepreneurship. Future
research could investigate how general social capital is instrumental to developing networks of
expert capital (or vice-versa). Women entrepreneurs may seek other women more often than
men for information, assistance, encouragement, or moral support (Smeltzer & Fann, 1989).
Yet, most of these resources derive from occupations dominated by males (e.g., banking,
accounting, & legal). The results of previous research regarding expert capital, therefore, beg
the additional question of whether this important form of capital comes more frequently from
men or women experts. All of this additional work has important implications for women
entrepreneurs in the start-up and growth phases of their firms, and especially for those in
emerging and transitioning economies.
Moreover, a challenge for many business owners lies in obtaining the appropriate
assistance and information needed to take the business to the next level of growth (Gundry et al.
2002). Particularly for women in emerging markets such as Russia, access to information and
knowledge is necessary and desired since most of them were raised and educated within a
centralized, planned economy. Additional research should examine how women entrepreneurs
across cultures access and leverage the importance of these resources, including information
seeking and specifically training and education, to further develop and grow their businesses.
Finally, our results hold implications for public policy initiatives, such as entrepreneurial
assistance programs supporting the development of mentoring programs for women
23
entrepreneurs. Thus, the results of our study and building on past work, offer information
pertinent to supporting the overall mission of programs that assist women entrepreneurs.
Mentorship programs provide women entrepreneurs with the opportunity to take what they
learn, apply it to their business strategy and get feedback from women who have been through
the arduous, but highly rewarding, process of starting their own business. These relationships
give women an outlet to test concepts and ideas and learn from the valuable past experience
(both positive and negative) of successful female entrepreneurs. Mentors can give
entrepreneurs a first-hand glance at the complexities of launching and managing a new
venture. This might include advice about the unique challenges faced by women entrepreneurs
such as raising capital, building credibility and forming strategic partnerships. Some
businesswomen may even offer the opportunity to intern or job shadow for an extended period
of time—providing a woman entrepreneur with the unique opportunity of gaining firsthand
experience with a venture in progress and harnessing additional knowledge about the role of a
business owner.
By understanding how mentors and role models support women in these tenacious
positions, we may be better able to create the support systems to nurture and propel women’s
entrepreneurial efforts. This would be immensely useful for women in emerging and
transitioning economies as they seek out, define, and leverage their own networks towards the
sustainability of their businesses, and the creation of wealth for themselves and their broader
local and global communities.
24
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30
Table 1
Sample Characteristics
Variables Number Percent
Respondents
Respondent status
Founders and/or owners (shareholders) 525 95%
Directors and/or managers (employees) 30 5%
Average respondent age 40 years
Higher education
Yes 252 49
No 271 51
Entrepreneurial experience of relatives
Yes 76 14
No 469 86
Enterprises
Subsidiary of another business
Yes 24 5
No 525 95
Family business
Yes 310 56
No 242 44
Average firm age 8
Average number of employees 4
Limited liability companies 33 6
Closed joint-stock companies 3 0.5
Open joint-stock companies 2 0.4
31
Sole proprietorships 514 93
Manufacturing 28 5
Trade and catering consumption 442 80
Service 81 15
Table 2
PCA for Composite Performance
Variables Factor loadings Communality
Composite Performance
Sales level satisfaction*importance 0,87 0,76
Sales growth satisfaction*importance 0,89 0,80
Turnover satisfaction*importance 0,87 0,75
Profitability satisfaction*importance 0,90 0,81
Net profit satisfaction*importance 0,88 0,78
Gross profit satisfaction*importance 0,88 0,78
Ability to fund business from the profit
satisfaction*importance
0,80 0,64
Eigenvalue 5,31
Percent variance explained 75,85
Chronbach’s alpha 0,95
32
Table 3
PCA for Mentoring
Variables Factor loadings Communality
Mentoring
F14 I exchange confidences with my mentor 0,781 0,611
F13 My mentor gives me special coaching as an
entrepreneur0,763 0,582
F12 I admire my mentor's ability to motivate others 0,752 0,566
F16 My mentor has devoted special time and
consideration to my entrepreneurial career 0,7430,552
F11 My mentor has taken a personal interest in my
entrepreneurial career 0,7070,500
F15 I try to model my behaviour after my mentor's0,684
0,468
Eigenvalue 3,278
Percent variance explained 54,639
Chronbach’s alpha 0,82
Note: Factor loadings 0,3 or smaller are suppressed. KMO =0,835, Bartletts’s test of Sphericity
App. Chi-Sq 498,425; df=15, Sig. 000.
33
Table 4
PCA for Self Efficacy
Variables Factor loadings Communality
Mentoring
G4 Design products or services that solve current
problems,869
0,755
G3 Identify new areas for potential growth ,861 0,741
G6 Bring a product concept to a market in a timely
manner,787
0,619
G2 Discover new ways to improve existing
products/services,779
0,607
G1 See new market opportunities for new
products/services,774
0,600
G5 Create product/services that fulfil customer unmet
needs,739 0,546
Eigenvalue 3,86
Percent variance explained 64,466
Chronbach’s alpha 0,87
Note: Factor loadings 0,3 or smaller are suppressed. KMO =0,858, Bartletts’s test of Sphericity
App. Chi-Sq 1782,433; df=15, Sig. 000.
34
Table 5
Result of MRA of Mentoring on Performance
†<0.1;*<0.05;
**<0.01;
***<0.001.
Table 6
Result of MRA of Self Efficacy on Performance
†<0.1;*<0.05;
**<0.01;
***<0.001.
Table 7
Result of MRA of Mentoring on Self Efficacy
35
St. Beta, listwise Unstd. Beta
Mentoring 0,267*** 0,258***
F 17,588
Adjusted R² 0,067***
Number of cases 232
St. Beta, listwise Unstd. Beta
Self Efficacy 0,361*** 0,365***
F 78,445
Adjusted R² 0,13***
Number of cases 524
†<0.1;*<0.05;
**<0.01;
***<0.001.
Table 8
Results of hierarchical MRA on Performance
Base model Mediated model
St. Beta,
listwise
Unst. Beta,
listwise
St. Beta,
listwise
Unst. Beta,
listwise St. Beta
Mentoring 0,271*** 0,263
Mentoring 0,207** 0,200
Self efficacy 0,279*** 0,289
F 18,189 19,713
Adjusted R² 0,07*** 0,14***
Number of cases 231 231
†<0.1;*<0.05; **<0.01; ***<0.001.
36
St. Beta, listwise Unst. Beta
Mentoring 0,270*** 0,256***
F 18,787
Adjusted R² 0,07***
Number of cases 240
Push-Pull factors and Women in business
Women in business are a recent phenomenon in India. By and large they had confide themselves
to petty business and tiny cottage industries. Women entrepreneurs engaged in business due to
push and pull factors. Which encourage women to have an independent occupation and stands on
their on legs. A sense towards independent decision-making on their life and career is the
motivational factor behind this urge. Saddled with household chores and domestic
responsibilities women want to get independence Under the influence of these factors the women
entrepreneurs choose a profession as a challenge and as an urge to do some thing new. Such
situation is described as pull factors. While in push factors women engaged in business activities
due to family compulsion and the responsibility is thrust upon them.
Problems of Women Entrepreneurs in India
Women in India are faced many problems to get ahead their life in business. A few problems
cane be detailed as;
1. The greatest deterrent to women entrepreneurs is that they are women. A kind of patriarchal –
male dominant social order is the building block to them in their way towards business success.
Male members think it a big risk financing the ventures run by women.
2. The financial institutions are skeptical about the entrepreneurial abilities of women. The
bankers consider women loonies as higher risk than men loonies. The bankers put unrealistic and
unreasonable securities to get loan to women entrepreneurs. According to a report by the United
Nations Industrial Development Organization (UNIDO), "despite evidence that women's loan
repayment rates are higher than men's, women still face more difficulties in obtaining credit,"
often due to discriminatory attitudes of banks and informal lending groups (UNIDO, 1995b).
3. Entrepreneurs usually require financial assistance of some kind to launch their ventures - be it
a formal bank loan or money from a savings account. Women in developing nations have little
access to funds, due to the fact that they are concentrated in poor rural communities with few
opportunities to borrow money (Starcher, 1996; UNIDO, 1995a). The women entrepreneurs are
37
suffering from inadequate financial resources and working capital. The women entrepreneurs
lack access to external funds due to their inability to provide tangible security. Very few women
have the tangible property in hand.
4. Women's family obligations also bar them from becoming successful entrepreneurs in both
developed and developing nations. "Having primary responsibility for children, home and older
dependent family members, few women can devote all their time and energies to their business"
(Starcher, 1996, p. 8).The financial institutions discourage women entrepreneurs on the belief
that they can at any time leave their business and become housewives again. The result is that
they are forced to rely on their own savings, and loan from relatives and family friends.
5. Indian women give more emphasis to family ties and relationships. Married women have to
make a fine balance between business and home. More over the business success is depends on
the support the family members extended to women in the business process and management.
The interest of the family members is a determinant factor in the realization of women folk
business aspirations.
6. Another argument is that women entrepreneurs have low-level management skills. They have
to depend on office staffs and intermediaries, to get things done, especially, the marketing and
sales side of business. Here there is more probability for business fallacies like the intermediaries
take major part of the surplus or profit. Marketing means mobility and confidence in dealing with
the external world, both of which women have been discouraged from developing by social
conditioning. Even when they are otherwise in control of an enterprise, they often depend on
males of the family in this area.
7. The male - female competition is another factor, which develop hurdles to women
entrepreneurs in the business management process. Despite the fact that women entrepreneurs
are good in keeping their service prompt and delivery in time, due to lack of organisational skills
compared to male entrepreneurs women have to face constraints from competition. The
confidence to travel across day and night and even different regions and states are less found in
women compared to male entrepreneurs. This shows the low level freedom of expression and
38
freedom of mobility of the women entrepreneurs.
8. Knowledge of alternative source of raw materials availability and high negotiation skills are
the basic requirement to run a business. Getting the raw materials from different souse with
discount prices is the factor that determines the profit margin. Lack of knowledge of availability
of the raw materials and low-level negotiation and bargaining skills are the factors, which affect
women entrepreneur's business adventures.
9. Knowledge of latest technological changes, know how, and education level of the person are
significant factor that affect business. The literacy rate of women in India is found at low level
compared to male population. Many women in developing nations lack the education needed to
spur successful entrepreneurship. They are ignorant of new technologies or unskilled in their use,
and often unable to do research and gain the necessary training (UNIDO, 1995b, p.1). Although
great advances are being made in technology, many women's illiteracy, strucutural difficulties,
and lack of access to technical training prevent the technology from being beneficial or even
available to females ("Women Entrepreneurs in Poorest Countries," 2001). According to The
Economist, this lack of knowledge and the continuing treatment of women as second-class
citizens keeps them in a pervasive cycle of poverty ("The Female Poverty Trap," 2001). The
studies indicates that uneducated women donot have the knowledge of measurement and basic
accounting.
10. Low-level risk taking attitude is another factor affecting women folk decision to get into
business. Low-level education provides low-level self-confidence and self-reliance to the women
folk to engage in business, which is continuous risk taking and strategic cession making
profession. Investing money, maintaining the operations and ploughing back money for surplus
generation requires high risk taking attitude, courage and confidence. Though the risk tolerance
ability of the women folk in day-to-day life is high compared to male members, while in
business it is found opposite to that.
11. Achievement motivation of the women folk found less compared to male members. The low
level of education and confidence leads to low level achievement and advancement motivation
among women folk to engage in business operations and running a business concern.
39
12. Finally high production cost of some business operations adversely affects the development
of women entrepreneurs. The installation of new machineries during expansion of the productive
capacity and like similar factors dissuades the women entrepreneurs from venturing into new
areas.
How to Develop Women Entrepreneurs?
Right efforts on from all areas are required in the development of women entrepreneurs and their
greater participation in the entrepreneurial activities. Following efforts can be taken into account
for effective development of women entrepreneurs.
1. Consider women as specific target group for all developmental programmes.
2. Better educational facilities and schemes should be extended to women folk from government
part.
3. Adequate training programme on management skills to be provided to women community.
4. Encourage women's participation in decision-making.
5. Vocational training to be extended to women community that enables them to understand the
production process and production management.
6. Skill development to be done in women's polytechnics and industrial training institutes. Skills
are put to work in training-cum-production workshops.
7. Training on professional competence and leadership skill to be extended to women
entrepreneurs.
8. Training and counselling on a large scale of existing women entrepreneurs to remove
psychological causes like lack of self-confidence and fear of success.
9. Counselling through the aid of committed NGOs, psychologists, managerial experts and
40
technical personnel should be provided to existing and emerging women entrepreneurs.
10. Continuous monitoring and improvement of training programmes.
11. Activities in which women are trained should focus on their marketability and profitability.
12. Making provision of marketing and sales assistance from government part.
13. To encourage more passive women entrepreneurs the Women training programme should be
organised that taught to recognize her own psychological needs and express them.
14. State finance corporations and financing institutions should permit by statute to extend purely
trade related finance to women entrepreneurs.
15. Women's development corporations have to gain access to open-ended financing.
16. The financial institutions should provide more working capital assistance both for small
scale venture and large scale ventures.
17. Making provision of micro credit system and enterprise credit system to the women
entrepreneurs at local level.
18. Repeated gender sensitisation programmes should be held to train financiers to treat women
with dignity and respect as persons in their own right.
19. Infrastructure, in the form of industrial plots and sheds, to set up industries is to be provided
by state run agencies.
20. Industrial estates could also provide marketing outlets for the display and sale of products
made by women.
21. A Women Entrepreneur's Guidance Cell set up to handle the various problems of women
entrepreneurs all over the state.
41
22. District Industries Centres and Single Window Agencies should make use of assisting
women in their trade and business guidance.
23. Programmes for encouraging entrepreneurship among women are to be extended at local
level.
24. Training in entrepreneurial attitudes should start at the high school level through well-
designed courses, which build confidence through behavioral games.
25. More governmental schemes to motivate women entrepreneurs to engage in small scale and
large-scale business ventures.
26. Involvement of Non Governmental Organisations in women entrepreneurial training
programmes and counselling.
42
IMPEDIMENTS FOR WOMEN ENTREPRENEURSHIP DEVELOPMENT
Several studies around the world have been carried out which throw light on the challenges faced
by women entrepreneurs. Though the three major stages in the entrepreneurial process – of
creating, nurturing and nourishing – are the same for men and women, there are however, in
practice, problems faced by women who are of different dimensions and magnitudes, owing to
social and cultural reasons. The gender discrimination that often prevails at all levels in many
societies impact the sphere of women in industry too, and a cumulative effect of psychological,
social, economic and educational factors act as impediments to women entrepreneurs entering
the mainstream. A study (Cooper, as quoted in Das, 2000) of women entrepreneurs in the
western world, proposed that three factors influence entrepreneurship – antecedent influences
(i.e., background factors such as family influences and genetic factors that affect motivation,
skills and knowledge), the “incubator organization” (i.e., the nature of the organization where the
entrepreneur was employed just prior to starting a business; the skills learned there) and
environmental factors (e.g., economic conditions, access to venture capital and support services,
role models). Research from the rest of the world indicates that women and men differ on some
of the above factors. While several of these challenges are in inherent to many countries, some of
them are more severe in South Asia.
Some of the important barriers faced by women are discussed below.
A. Access to finance
Access to finance is a key issue for women. Accessing credit, particularly for starting an
enterprise, is one of the major constraints faced by women entrepreneurs. Women often have
fewer opportunities than men to gain access to credit for various reasons, including lack of
collateral, an unwillingness to accept household assets as collateral and negative perceptions of
female entrepreneurs by loan officers. In South Asia, women are almost invisible to formal
financial institutions – they receive less than 10 per cent of commercial credits (Mahbub ul Haq
human Development Center, 2000). When women do have access to credit it is often in small
amounts, whether this suits their needs or not. Differential access to credit may of course be a
reflection of differences in the choice of sector, educational level or the amount of loan
requested. However, as sector choice and educational levels tend to be limited or influenced by
gender, one could say that any differential access based on this motive is indirectly caused by
43
gender perceptions. In addition to this, women entrepreneurs in developing countries continue to
suffer from poor overall assets, poor enforcement of financial rights and the existence of unequal
inheritance rights and consequently poor access to community and social resources. Gender-
based obstacles – conventional thinking, cultural and social values, lack of collateral – all
aggravate the difficulties faced by women. High transaction costs, the rigidity of collateral
requirements and heavy paperwork are further impediments to women entrepreneurs
(Charumathi, 1998; Tiwary, Ojha and Pain, 1998; Finnegan and Danielsen, 1997; Shayamalan,
1999).
Women, in particular the less educated ones, also find it more difficult to get financing from
banks because they lack information on how to go about securing a loan. Moreover, bank
managers are often more reluctant to lend to women than to men.
Shehla Akram, “Funds are a major issue for women entrepreneurs”, Daily Times, 30 December
1999, <http://www.dailytimes.com>.
Sometimes, credit may be available for women through several schemes but there are bottlenecks
and gaps, and the multiplicity of schemes is often not adequately listed nor is there networking
among agencies. As a result, clients approaching one institution are sometimes not made aware
of the best option for their requirements (Vishwanathan, 2001). In many countries, women face
unequal inheritance practices and laws, discriminatory laws on ownership of property or access
to bank loans, or discriminatory practices by banks. In the area of guarantees, several
discouraging habits have become ingrained in financial institutions and banks, such as requiring
male members to accompany women entrepreneurs for finalizing projects proposed by women,
as well as almost invariably insisting on guarantees from males in the family (Commonwealth
Secretariat, 2002).
A general lack of experience and exposure also restricts women from venturing out and dealing
with banking institutions. Those who do venture out often find that transaction costs for
accessing credit are high, and cannot be met by the cash available to them. Because of this, they
are dependent on the family members for surety or collateral and hence restrict the money they
borrow. This results in lower investments. Alternately they tend to find working capital at higher
rates of interest. The availability of finance and other facilities, such as industrial sheds and land
for women entrepreneurs are often constrained by restrictions that do not account for practical
realities. All these in turn affect the enterprise and its survival.
44
In one study in India (Kaur and Bawa, 1992), 54 per cent of women entrepreneurs had started
their business with their own personal savings and some financial assistance from their spouse,
23 per cent received finances from their parents, 13 per cent from relatives and friends and only
10 per cent from government agency and nationalized banks. Many other studies in South Asia
have substantiated these findings. Dr Shehla Akram, founder of Women Chambers of Commerce
in Lahore has also identified funds as a major issue of women entrepreneurs, quoting from a
study which showed that most middle-level women entrepreneurs in Pakistan were financed by
their own savings or borrowing from their relatives.4 Another study by Das (2000) shows that
more than 50 per cent of the women used their own funds or funds borrowed from their spouse
or family to set up their business. Though 43 per cent had taken loans from a financial
institution, for a significant proportion (38 per cent) this was only a small part of their original
investment and not the primary source of funds. A study from Pakistan showed that the
predominant source of start-up capital for women entrepreneurs was reported as personal savings
(73 per cent), while informal sources were in second position. Only 4 per cent of respondents had
access to formal sources of credit (Goheer, 2002).
A study from Nepal points out that all formal credit institutions seek tangible collateral for loans,
and that women are effectively sidelined from institutional credit since they have little access to
inherited property (Acharya, 2001).
45
B. Access to markets
The ability to tap into new markets requires expertise, knowledge and contacts. Women often
lack access to training and experience in on how to participate in the market place and are
therefore unable to market goods and services strategically. Thus, women-owned SMEs are often
unable to take on both the production and marketing of their goods. In addition, they have often
not been exposed to the international market, and therefore lack knowledge about what is
internationally acceptable. The high cost of developing new business contacts and relationships
in a new country or market is a big deterrent and obstacle for many SMEs, in particular women-
owned businesses. Women may also fear or face prejudice or sexual harassment, and may be
restricted in their ability to travel to make contacts.
Market liberalization leads to increased competition which demands swifter response to the
market. SMEs thus face competition from transnational corporations as well as from efficient
low wage, low cost producers in other developing countries, and need to engage in active
technology and skill upgrading, and more efficient quality management in order to stay
competitive. This may require fast and easy access to capital, something that women
entrepreneurs often lack. Unfamiliarity with the external world and lack of ease in moving
around in it also hampers women when it comes to dealing with a multiplicity of agencies in
setting up or running a business. Thus, even when they do have professional competence and
training, women are often forced to turn to male professionals for assistance.
C. Access to training
Women have limited access to vocational and technical training in South Asia. In fact, women
on average have less access to education than men, and technical and vocational skills can only
be developed on a strong foundation of basic primary and secondary education. South Asia is
characterized by low enrolment among women in education, high drop out rates and poor quality
of education. The table below shows female literacy levels as a percentage of male literacy as
well as average years of schooling of women and men, respectively. The figures are testifying to
the existence of gender discrimination in building capacity of women and providing them with
equal opportunities.
Source: Mahbub ul Haq Human Development Centre, Human development in South Asia 2003:
The Employment Challenge (Oxford University Press), 2003.
46
Of the already low vocational educational enrolment of less than 2 per cent in South Asia, female
students comprise only a quarter of one per cent. (Mahbub ul Haq Human Development Center,
2000). In Bangladesh, less than 13 per cent of the enterprise development programme trainees
are women (Finnegan, 2000). Even in countries, such as Sri Lanka, where more women than
men have a 10 +12 educational background, gender roles continue to confine women to a narrow
range of economic activity.
Figure 2: Percentage of females enrolled in second level vocational education
010203040PakistanNepalIndiaBangladeshMaldives
Source: Mahbub ul Haq Human Development Centre, Human Development In South Asia: The
Gender Question (Oxford University Press), 2000.
47
Women also tend to be less likely to have had education and experience relevant to starting and
managing a business and thus less potential for success. Gaining relevant skills and knowledge
can also be more difficult for women since they frequently have double work burden and
childcare responsibilities, thus making them less able than men to attend formal and informal
trainings. In addition, gender stereotypes, prejudices of teachers, and gender-based preferences
of parents and girls themselves tend to channel girls and women into the more general and social
rather than scientific or technical areas of education. As a result, women are educationally less
well equipped to manage some kinds of businesses and, in the less developed countries with low
overall levels of education, often less well equipped to manage business in the formal sector in
general. Such disadvantages affect their capacity to access formal sources of credit, technical
support as well as government small business programmes. When training is available, women
may be unable to access it because it is held at a time when they are meeting family
responsibilities, or the content and method of delivery may not be appropriate. This lack of
access to education and training opportunities mean that women start their businesses without
adequate skills. Besides, most technical trainings that are offered to girls at the post-school
levels, in the women polytechnic for instance are limited to traditional careers, such as secretarial
practice, dress designing, etc. Thus, the exclusivity of training acts as limiting factor itself.
D. Access to networks
Women have fewer business contacts, less knowledge of how to deal with the governmental
bureaucracy and less bargaining power, all of which further limit their growth. Since most
women entrepreneurs operate on a small scale, and are generally not members of professional
organizations or part of other networks, they often find it difficult to access information. Most
existing networks are male dominated and sometimes not particularly welcoming to women but
prefer to be exclusive. Even when a woman does venture into these networks, her task is often
difficult because most network activities take place after regular working hours. There are hardly
any women-only or women-majority networks where a woman could enter, gain confidence and
move further. Lack of networks also deprives women of awareness and exposure to good role
models. Few women are invited to join trade missions or delegations, due to the combined
invisibility of women-dominated sectors or subsectors and of women as individuals within any
given sector. As an example of this, at a recent SME Trade Fair in a country in Asia where it has
been estimated than women operate around half of all SMEs, less than 20 women were registered
among the approximately 250 participants, and most of those were civil servants rather than
48
businesswomen. Women’s businesses are not well represented in industry, trade or business
associations. Both the leadership and the membership of chambers of commerce, business,
traders and industry associations tend to be dominated by men, and few women join or reach
leadership positions in the mainstream business organizations. Although partly a reflection of the
low number of women entrepreneurs, it means that the different needs of women entrepreneurs
do not feed into policymaking through the lobbying and other activities of these organizations.
Many specialist organizations of businesswomen often do not counter this situation because their
activities tend to be oriented toward charity and social work, in contrast to the business
networking and policy lobbying orientation of the “mainstream” but more male-dominated
organizations. Part of the reason for women’s organizational invisibility is the difficulty of
finding sufficient time to attend meetings as well as manage their families
49
E. Access to policymakers
Most women have little access to policymakers or representation on policymaking bodies. Large
companies and men can more easily influence policy and have access to policymakers, who are
seen more as their peers. Women tend not to belong to, and even less reach leadership positions
in, mainstream business organizations, limiting their input into policymaking through lobbying.
Women’s lack of access to information also limits their knowledgeable input into policymaking.
Table 4 below provides an overview of challenges discussed above, showing both the challenges
faced by SMEs in general but which can pose a greater obstacle for women than for men
(women intensive) and those faced by women only (women exclusive).
Table 4: Competing in international markets: the challenges faced by
women-owned SMEs Challenges faced by SMEs
(women intensive)
Challenges faced by women-owned
SMEs (women exclusive)
Access to Finance
_ Service companies face difficulties due to the nature of
their businesses.
_ Cost of capital relative to other countries.
_ Discriminatory national laws
_ Prejudice against women and women-
owned businesses
_ Difficulty in providing collateral
(women do not own assets in their own
right)
_ Lack of credit / banking history (due to
past, informal nature of businesses)
_ Need for credit plus business planning
and advisory services
Access to Markets
_ Access to quality, up-to-date information
_ Contacts through personal networks
_ Small size of businesses
_ Prejudice against women
_ Difficulty in travelling to make contacts
_ Sexual harassment
50
Women’s Entrepreneurship: Issues and Policies
Women’s entrepreneurship needs to be studied separately for two main reasons. The
first reason is that women’s entrepreneurship has been recognised during the last decade as an
important untapped source of economic growth. Women entrepreneurs create new jobs for
themselves and others and by being different also provide society with different solutions to
management, organisation and business problems as well as to the exploitation of entrepreneurial
opportunities. However, they still represent a minority of all entrepreneurs. Thus there exists a
market failure discriminating against women’s possibility to become entrepreneurs and their
possibility to become successful entrepreneurs. This market failure needs to be addressed by
policy makers so that the economic potential of this group can be fully utilised. While without a
doubt the economic impact of women is substantial, we still lack a reliable picture describing in
detail that specific impact. Recent efforts initiated by the OECD (1997, 2000) are responses to
this lack of knowledge and have focused the attention of policy makers and researchers on this
important topic.
The second reason is that the topic of women in entrepreneurship has been largely neglected both
in society in general and in the social sciences. Not only have women lower participation rates in
entrepreneurship than men but they also generally choose to start and manage firms in different
industries than men tend to do. The industries (primarily retail, education and other service
industries) chosen by women are often perceived as being less important to economic
development and growth than high-technology and manufacturing. Furthermore, mainstream
research, policies and programmes tend to be “men streamed” and too often do not take into
account the specific needs of women entrepreneurs and would-be women entrepreneurs. As a
consequence, equal opportunity between men and women from the perspective of
entrepreneurship is still not a reality. In order for policy makers to address the situation the report
makes a number of recommendations.
51
Key policy recommendations
Increase the ability of women to participate in the labour force by ensuring the
availability of affordable child care and equal treatment in the work place. More
generally, improving the position of women in society and promoting entrepreneurship
generally will have benefits in terms of women’s entrepreneurship.
Listen to the voice of women entrepreneurs. The creation of government offices of
women's business ownership is one way to facilitate this. Such offices could have
programme responsibilities such as providing women's business centers, organizing
information seminars and meetings and/or providing web-based information to those
wanting to start and grow a business.
Incorporate a women's entrepreneurial dimension in the formation of all SME-
related policies. This can be done by ensuring that the impact on women's
entrepreneurship is taken into account at the design stage.
Promote the development of women entrepreneur networks. These are major
sources of knowledge about women’s entrepreneurship and valuable tools for its
development and promotion. Co-operation and partnerships between national and
international networks can facilitate entrepreneurial endeavors by women in a global
economy.
Periodically evaluate the impact of any SME-related policies on the success of
women-owned businesses and the extent to which such businesses take advantage
of them. The objective should be to identify ways to improve the effectiveness of those
that should be retained. Good practices that are identified in this way should be
disseminated and shared internationally.
52
BACKGROUND
Women’s entrepreneurship needs to be studied separately for two main reasons. The first reason
is that women’s entrepreneurship has been recognised during the last decade as an important
untapped source of economic growth. Women entrepreneurs create new jobs for themselves and
others and by being different also provide society with different solutions to management,
organisation and business problems as well as to the exploitation of entrepreneurial
opportunities. However, they still represent a minority of all entrepreneurs. Thus there exists a
market failure discriminating against women’s possibility to become entrepreneurs and their
possibility to become successful entrepreneurs. This market failure needs to be addressed by
policy makers so that the economic potential of this group can be fully utilised.
While without a doubt the economic impact of women is substantial, we still lack a
reliable picture, describing in detail that specific impact. Recent efforts initiated by the OECD
(1997, 2000) are responses to this lack of knowledge and have focused the attention of policy
makers and researchers on this important topic. In order to effectively and efficiently address this
topic, policy makers need more knowledge about women entrepreneurs. The aim of this report is
to extend these efforts and to further enhance knowledge about how women’s entrepreneurship
affects economic growth and development.
The second reason is that the topic of women in entrepreneurship has been largely
neglected both in society in general and in the social sciences (Brush & Hisrich, 1999; Holmquist
& Sundin, 2002). Not only have women lower participation rate in entrepreneurship than men
but they also generally choose to start and manage firms in different industries than men tend to
do (Duchénaut, 1997; Franco & Winqvist, 2002; Reynolds & White, 1997). The industries
(primarily retail, education and other service industries) chosen by women are often or have until
recently been perceived as being less important to economic development and growth than high-
technology and manufacturing. Furthermore, mainstream research, policies and programmes tend
to be “men streamed” and too often do not take into account the specific needs of women
entrepreneurs and would-be women entrepreneurs. As a consequence, equal opportunity between
men and women from the perspective of entrepreneurship is still not a reality. To facilitate
progress, more work needs to be done in order to:
53
Better understand the function of women’s entrepreneurship in society and
for economic development. We know that women entrepreneurs play a non-
trivial role in the economy, that they face challenges and obstacles different
from those faced by men and that they will act differently. The larger the
difference is between men and women in a society, the larger we can expect the
difference to be between men and women entrepreneurs and the more different
we can expect their relative contribution to economic development to be.
Better understand the impact of women’s entrepreneurship in different
economic contexts. By contexts we mean both the economic level of
development and the societal level of development when it comes to the role of
women in society.
54
Conclusion
Independence brought promise of equality of opportunity in all sphere to the Indian women and
laws guaranteeing for their equal rights of participation in political process and equal
opportunities and rights in education and employment were enacted. But unfortunately, the
government sponsored development activities have benefited only a small section of women.
The large majority of them are still unaffected by change and development activities have
benefited only a small section of women i.e. the urban middle class women. The large majority
of them are still unaffected by change and development. The reasons are well sighted in the
discussion part of this article. It is hoped that the suggestions forwarded in the article will help
the entrepreneurs in particular and policy-planners in general to look into this problem and
develop better schemes, developmental programmes and opportunities to the women folk to
enter into more entrepreneurial ventures. This article here tries to recollect some of the
successful women entrepreneurs like Ekta Kapoor, Creative Director, Balaji Telefilms, Kiran
Mazumdar Shaw, CEO, Biocon, Shahnaz Husain and Vimalben M Pawale, Ex President, Sri
Mahila Griha Udyog Lijjat Papad (SMGULP).
55
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