dissertation sample for assessing entrepreneurship of pakistani community and the factors of success
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Assessing entrepreneurship of Pakistani community and the factorsof successByNadir I. AlviA dissertation submitted in partial fulfillment of the requirements for the degree ofMasters in Business AdministrationUniversity of Hertfordshire20081AbstractEthnic minority entrepreneurs are contributing significantly in the economicdevelopment in the UK. The studies (Barrett et al., 2001; Bank of England, 1999;Waldinger et al., 1990) have shown that the ratio of ethnic minorities is comparativelyhigher than the other start-up entrepreneurs in the UK. However, migrant entrepreneurshave been neglected by economic researchers (Williams et al., 2004). Keeble (1989).Among these entrepreneurs, Pakistani communities are also very active in theentrepreneurship activities especially in cloth trade as Pakistan produces about 10percent of the world cotton crop making it the fourth largest producer in the world. Thetextile industry currently accounts for almost 65% of Pakistan's exports, 20% of valueaddedproduction and employs 40% of manufacturing labor (Khan & Ghani, 2004).However, these entrepreneurs face many obstacles and barriers in the UK due tocultural and economical differences. The researcher aimed to analyze and explorethese barriers and obstacles especially focusing on the marketing strategies of thePakistani entrepreneurs doing cloth trading in the UK. For this purpose, the researcherutilized qualitative research method in order to collect primary data throughquestionnaire based surveys among 50 Pakistani entrepreneurs and the follow upinterviews with 5 of the participants to record their views about obstacles and theirmarketing strategies to overcome these obstacles. The result of the primary researchcoupled with the review of the literature has shown that ethnic minorities in the UK faceracial discrimination to some extent, lack of good knowledge of language hinder theireffective communication with the customers and the lack of funds through bank loansnegatively impact their performance.2Table of Contents1.1Introductio n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.2Problem Statemen t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91.3Research Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.4Objectives of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111.5 Structure of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111.6 Definition of Key terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Chapter II: Review of the Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132.2 Theoretical framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .TRANSCRIPT
Assessing entrepreneurship of Pakistani community and the factors
of success
By
Nadir I. Alvi
A dissertation submitted in partial fulfillment of the requirements for the degree of
Masters in Business Administration
University of Hertfordshire
2008
1
Abstract
Ethnic minority entrepreneurs are contributing significantly in the economic
development in the UK. The studies (Barrett et al., 2001; Bank of England, 1999;
Waldinger et al., 1990) have shown that the ratio of ethnic minorities is comparatively
higher than the other start-up entrepreneurs in the UK. However, migrant entrepreneurs
have been neglected by economic researchers (Williams et al., 2004). Keeble (1989).
Among these entrepreneurs, Pakistani communities are also very active in the
entrepreneurship activities especially in cloth trade as Pakistan produces about 10
percent of the world cotton crop making it the fourth largest producer in the world. The
textile industry currently accounts for almost 65% of Pakistan's exports, 20% of value-
added production and employs 40% of manufacturing labor (Khan & Ghani, 2004).
However, these entrepreneurs face many obstacles and barriers in the UK due to
cultural and economical differences. The researcher aimed to analyze and explore
these barriers and obstacles especially focusing on the marketing strategies of the
Pakistani entrepreneurs doing cloth trading in the UK. For this purpose, the researcher
utilized qualitative research method in order to collect primary data through
questionnaire based surveys among 50 Pakistani entrepreneurs and the follow up
interviews with 5 of the participants to record their views about obstacles and their
marketing strategies to overcome these obstacles. The result of the primary research
coupled with the review of the literature has shown that ethnic minorities in the UK face
racial discrimination to some extent, lack of good knowledge of language hinder their
effective communication with the customers and the lack of funds through bank loans
negatively impact their performance.
2
Table of Contents
1.1Introduction ............................................................................................................... 6
1.2Problem Statement .................................................................................................... 9
1.3Research Questions ................................................................................................ 10
1.4Objectives of the Study ........................................................................................... 11
1.5 Structure of the Study ............................................................................................. 11
1.6 Definition of Key terms ........................................................................................... 12
Chapter II: Review of the Literature ............................................................................. 13
2.1 Introduction ............................................................................................................. 13
2.2 Theoretical framework ............................................................................................ 18
2.3 Market Opportunities and Heterogeneity ............................................................... 25
Planning in Small Businesses ...................................................................................... 30
3.2 Research Framework ............................................................................................ 32
3.3 Sampling ................................................................................................................ 33
3.4 Data Collection tool ................................................................................................ 33
3.5 Collection and utilization of the Secondary data .................................................... 34
3.8 Validity .................................................................................................................... 35
3.9 Reliability ............................................................................................................... 36
3.10 Summary of the chapter ...................................................................................... 37
Chapter IV: Results ..................................................................................................... 38
4.1Introduction ............................................................................................................... 38
..................................................................................................................................... 38
4.2Demographics ......................................................................................................... 38
4.3Resources acquisition ............................................................................................. 39
4.4Entrepreneurship experience .................................................................................. 40 3
4.5Obstacles and barriers in UK .................................................................................. 42
4.4 Follow up Interviews ............................................................................................... 43
Dealing with Obstacles ................................................................................................. 45
The Essential Marketing Principles .............................................................................. 46
Experiencing Success .................................................................................................. 48
Advice for Entrepreneurs .............................................................................................. 50
Chapter V: Discussion and Conclusion ..................................................................... 51
5.1Introduction .............................................................................................................. 51
6.2 Limitations encountered ......................................................................................... 53
6.3 Implications for management ................................................................................. 53
List of Tables
Table 1: International experience and cost reduction ..................................................... 40
Table 2: Advantage over domestic competitors .............................................................. 41
Table 3: Planning for the future growth .......................................................................... 41
Table 4: bold, independent posture to exploit new opportunities .................................... 42
Table 5: Participants of the primary data collection ........................................................ 44
List of Figures
Figure 1: Marketing Organization Fit With Strategic Type and its Relationship with Marketing Performance ................................................................................................... 20
4
Figure 2: Business Strategy Debate ................................................................................ 23
5
Chapter I: Introduction
1.1Introduction
The purpose and intention of the researcher in this dissertation is to provide insight
into the nature of Pakistani entrepreneurship activities in clothing and the specific
barriers and difficulties they face being ethnic minority group in the United Kingdom. As
the researcher have been in the fielded since a past few years, it was my profound
desire to contribute my knowledge and experience in the field in order to improve
performance of Pakistani entrepreneurs in the UK.
Ethnic minority entrepreneurship in the UK has attracted considerable attention by
man researchers (Barrett et al., 2001; Ram and Jones, 1998; Waldinger et al., 1990).
The findings of these researchers suggest that ethnic minorities are over-represented
among start-up entrepreneurs in the UK (Bank of England, 1999) and the US (Kim et
al., 2003). However, migrant entrepreneurs have been neglected by economic
researchers (Williams et al., 2004). Keeble (1989) found that 70% of Cambridge (UK)
area high technology entrepreneurs were not from the local area, and Keeble and Tyler
(1995, p. 984) in a large scale cross-England study found that ‘‘most rural new-firm
founders are migrants from elsewhere’’.
Human migration is a significant economic issue for governments, particularly in
Europe, given the aging demographics of some European countries. Indeed, Florida
(2002) argues that the location decisions of creative people drive economic
development in the knowledge-based economy. Florida’s work focuses on cities.
6
However, the issue of regional and rural regeneration is also important and highly
sensitive in many countries. Policy decisions need to give due consideration to the
entrepreneurs from ethnic minorities who face specific challenges and difficulties for
establishing themselves in a new cultural and economic setup. Similarly, the policy
makers also need data on the activities of these entrepreneurs for better understanding
their unique requirements and removing barriers they face in the UK.
The UK economy largely depends on small business. The Secretary of State for
Trade and Industry recognised that ethnic minority communities are worth £32 billion a
year (Ethnic Minority Business Forum 2003). Ethnic Minority Entrepreneurship,
Smallbone, D) report shows London is the most ethnically diverse city in the UK and
one of the most ethnically diverse cities in the world. Throughout the UK more than a
quarter of a million ethnic minority enterprises are contributing around £13 billion a year
to the British economy (Ethnic Minority Business Forum ‘EMBF’ Annual Survey of Small
Business 2006). Recent research into the London economy has shown that there are
66,000 ethnic minority owned businesses in the capital, as well as around 93,000 self
employed people from ethnic minority communities, and that the ethnic minority
business sector employs half a million people, with a combined sales turnover of over
£90 billion(London Economy Research 2007). These results clearly indicate how much
ethnic minority businesses are important for British economy.
An increasing number of ethnic minority entrepreneurs are running successful
multi million pound companies in many different sectors, for example in financial
services, business services, media, fashion and in computer manufacturing, to name
just a few. (London’s Ethnic Minority-owned business, London Development Agency,
7
Jan 2008). Among these entrepreneurs, Pakistani community has especially focused on
the cloth trade as Pakistan produces about 10 percent of the world cotton crop making it
the fourth largest producer in the world. The textile industry in Pakistan currently
accounts for almost 65% of its exports, 20% of value-added production and employs
40% of manufacturing labor. The textile industry of Pakistani has concentrated in the
provinces of Sindh and Punjab, with Karachi and Faisalabad being the hubs of textile
activity in these provinces respectively. In the past ten years, growth in the number of
small firms entering the Faisalabad textile industry has been dramatic, particularly in
weaving. In this sector, small firms typically own 1 to 20 shuttle-less looms, medium
firms up to 50, and large firms over 50 (Khan & Ghani, 2004) .
Being a part of the clothing industry for the past three years I have come to know
the problems or barriers for the development of minority businesses especially the
Pakistani clothing trade in London. The motivation for this topic derives from a practical
challenge that provides the enthusiasm for the thesis and the research to proceed to the
stage of problem definition. This research topic actually relates to “Ethnic Business
Growth Barriers”. My study is to conduct research to help in identifying the current
features of Pakistani minority clothing businesses in London UK and to understand the
barriers and problems they are facing for the growth of their businesses. The primary
aim of helping to strengthen their evidence base in terms of better understanding the
diverse needs of “Pakistani Minority Businesses”.
8
I decided to conduct research, provide help by pointing out the issues also giving
suitable suggestion or recommendation to resolve these issues so that industry could
grow according to its potential.
One of the key barriers for Pakistani minority businesses and entrepreneurs
continues to be access to finance. There are signs that the financial needs of the
Muslim community have been recognized by the private sector. An Islamic Bank
(Islamic Bank of Britain) has been created and at least one international bank is now
advertising Sharia compliant financial products. This is an excellent start, but we must
Continue to investigate access to finance issues and how they affect small businesses
across ethnic minority business communities (Small Business Service Report 2007).
1.2 Problem Statement
The United Kingdom hosts a very diverse population coming from all over the world.
Among this diverse population, Asian migrants have contributed significantly in the
small business activities; especially Pakistani migrants have utilized their experience in
textile industry and have introduced a large variety of clothing. However, this population
has witnessed specific barriers in their effort to establish their entrepreneurship in the
UK due to their unawareness of the economic culture and practices of the native setup
(Bell, 2004). A variety of evidence clearly shows that economic and social issues such
as unemployment and social exclusion, poor health and housing and poverty in general
disproportionately affect ethnic minority communities to participate in the economic
activities. Thus, there is evidence of certain challenges and barriers which need to be
explored and addressed in order to maximize the business activities in the UK. It is
necessary, therefore, that those in control of the resources for development target these
9
communities for appropriate support for regeneration and neighborhood renewal
initiatives, including social enterprise, to be effective in promoting social inclusion and
reducing deprivation and poverty in our midst.
It is vitally important that the policy makers and the interested groups responsible to
promote entrepreneurship have a resource of reliable information about the
environment in which ethnic minority entrepreneurship operate and realize the barriers
that these groups encounter, to enable them provide appropriate support for expanding
their business opportunities in the UK. Hence, it is my intention through this research
study to make a small contribution towards availing such reliable source of information
about challenges to Pakistani entrepreneurs in London.
1.3 Research Questions
For this research study, the researcher has endeavored to answer some of the very
important and fundamental questions:
1. What are the major barriers in establishing Pakistani clothing business in
London?
2. How these barriers can be reduced?
3. What are the characteristics of Pakistani minority in terms of their business skills
needs?
10
1.4 Objectives of the Study
The most important objective of this research project is to deal with the problems of
Pakistani minority in business development. For this purpose, the researcher focused
the attention on two major growth barriers for business: Management and marketing.
Thus, the primary concern was to find out the main factors affecting the business
development in London UK. In this paper, I put forward to analyze the opportunities and
threats for Pakistani minority businesses in context of local and regional policies and
programs. Considering this primary aim of the research, the specific objectives were:
1. To analyze barriers facing the Pakistani minority in business development in
London.
2. To investigate how Pakistani minority business growth risk can be analyzed
3. To enhance the ability of ‘Management and marketing’ in the Pakistani Minority
4. Try to examine the characteristics of the Pakistani Minority in terms of their
business needs.
1.5 Structure of the Study
In order to investigate the barriers to Pakistani entrepreneurship in UK, this study will
review the current literature on ethnic minority entrepreneurship in broader sense to
cover all its aspects which are vitally important for the entrepreneurship development in
order to offer recommendation how the ethnic minorities can develop their the business
from their own limited resources. For this purpose, in the literature review chapter,
different theories relating to entrepreneurship especially focusing on the ethnic
11
minorities in the UK and the potential barriers that are faced in the course of its
development will be reviewed. Further, this study will explore the textile industry
opportunities to expand the business in the international market also highlighting the
entrepreneurship trends in the world. The methodology chapter will present philosophy
and methods of research undertaken for this study. It will also describe the sampling,
data collection tools and the method for data analysis. The fourth chapter will present
the results of the research in relation with demographic analysis of the respondents and
their perception of barriers to entrepreneurship in UK. Also the chapter offers
conclusions resulting from the data analysis. This researcher will offer recommendation
to the industry with due consideration to the results of the primary data and the review
of the literature.
1.6 Definition of Key terms
Based on the literature review in Chapter II, the following terms relevant to the study are
operationally defined below:
1. Entrepreneurs are defined as leaders who “create and manage innovative
entrepreneurial organizations or ventures whose primary mission is the social
change and development of their client group” (Prabhu, 1999, p. 140).
Entrepreneur is a person who likes taking risks, ever ready to look for and to
manage disorganized situation and to accept risks as well as able to avoid risks.
Entrepreneur assumed risks are related with disorganized situations and are not
insurable (Mitton, 1989, p. 10).
12
2. Obstacles . In this study, obstacles referred to “the barriers (both internal to the
individual, i.e., defeating thoughts; negative self image and external to the
individual, i.e., negative perceptions, lack of role models) having a negative
impact on entrepreneurial success” (Gravely, 1999, p. 5).
3. Organizational climate is described as configurations of attitudes and perceptions
by organizations members that, in combination, reflect a substantial part of the
context of which they are a part and within which they work. Climate perceptions
describe an individual’s organizational experience rather than characterizing his/
her affective or evaluative reaction to the experience.
4. Success . In this study, success referred to “a combination of longevity of the
business, ongoing achievement of business goals (i.e., growth, economic impact,
social impact), and profitability” (Gravely, 1999, p. 5).
Chapter II: Review of the Literature
2.1 Introduction
For literature review, the scope includes a review of academic and popular
literature on e-learning. Literature review provides a meaningful background on
corporate e-learning and is what has led to the need for this study. It uncovers what has
already been researched, identifies those experts who have studied it and indicates the
importance of follow up. Academic or scholarly literature is based on empirical studies.
These are based on controlled experiments, surveys or interview. Popular literature
represents the thoughtful reflection of e-learning experts or advocates.
13
The purpose of the literature review was to position this research in the context of
the current relevant literature (Creswell, 1994). From the current base of knowledge, the
literature review was not a compilation of facts and feelings, but a coherent argument
that lead to the description of a proposed study (Rudestam & Newton, 1992). This
review was done with special regard for the prior scholars who established and then
contributed to the growth of entrepreneurial studies.
Gravely stated
This review is done with respect for the prior scholars who founded and then advanced the field of entrepreneurial studies. The review reveals the gaps in knowledge and the rationale for current research. Although the review is at times critical, it should not be misunderstood as an assertion that previous stud In entrepreneurship has not provided scholarly enlightenment. (1999, p. 9)
Before the 1990s international business and entrepreneurship were two different areas
of study that seldom intersected (McDougall & Oviatt, 2000). While international
business researchers focus their studies on international activities of large multinational
corporations, academics in entrepreneurship concentrate their works on creation and
management of small and medium-sized enterprises. The globalization of the world
economy has changed all that and the emergence of the “born global” phenomenon
has made international entrepreneurship, an intersection of international business and
entrepreneurship, a new interesting and significant research topic (McDougall & Oviatt,
2000).
International entrepreneurship was first introduced in 1988 by Morrow as a new growth
opportunity for both new ventures and established firms (Zahra & George, 2002).
McDougall’s study of the “born global” firms was the first empirical work to support the
14
term “international entrepreneurship” as it showed significant differences between
international new ventures and domestic new ventures in terms of their strategy and
industry structure (McDougall, 1989). McDougall, who is a true pioneer in this field,
focused on “the development of international new ventures or start-ups that, from
inception, engage in international business, thus viewing their operating domain as
international from the initial stages of firm’s operation” (McDougall, 1989: 388).
The definition of international entrepreneurship has evolved over the past decade and
academics have tried to incorporate international business, entrepreneurship, and even
strategic management perspectives into their definitions of international
entrepreneurship. Wright and Ricks view international entrepreneurship as a firm-level
activity that crosses national borders and focuses on the relation between business and
the international environments in which they operate (Wright & Ricks, 1994). Zahra and
George offer “the process of creatively discovering and exploiting opportunities that lie
outside the firm’s domestic markets in the pursuit of competitive advantage” as their
definition (Zahra & George, 2002: 261). Oviatt and McDougall have recently defined
international entrepreneurship as “the discovery, enactment, evaluation, and
exploitation of opportunities, across national borders, to create future goods and
services” (Oviatt & McDougall, 2005: 540). Since there is still no agreement on a single
definition of international entrepreneurship, nevertheless, research that utilizes the
“international entrepreneurship” terminology necessitates an articulation of a definitive
domain of study.
Early research on international entrepreneurship mainly focused on international new
ventures or “born global” firms. Zahra, however, suggests that the study of international
15
entrepreneurship should include both new and established firms since entrepreneurial
activities are an ongoing process that unfolds over time (Zahra, 1993). This opinion was
agreed to by the task force on international issues within the Entrepreneurship Division
of the Academy of Management formed in the early 1990s which suggested that the
domain of international entrepreneurship be broad (Giamartino, McDougall, & Bird,
1993). An inclusion of “corporate entrepreneurship” as one major area of interest within
international entrepreneurship confirms the need to encompass established companies
in the study of international entrepreneurship. The definitions of international
entrepreneurship by Miller (1983) and Wright and Ricks (1994) suggest that
international entrepreneurship is an organizational-level phenomenon, however, Oviatt
and McDougall (2005) emphasize that actors who discover, enact, evaluate, or exploit
opportunities, across national borders, to create future goods and services can be either
organizations, groups, or individuals. Oviatt and McDougall also summarize the
previous works in international entrepreneurship into two major areas of study, one
focusing on the cross-national border behavior of entrepreneurial actors, and the other
focusing on the cross-national-border comparisons of entrepreneurs, their behavior, and
the circumstances in which they are embedded (Oviatt & McDougall, 2005).
In the past decade entrepreneurship scholars have completed numerous significant
studies of international activities by new venture firms (Oviatt & McDougall, 1995, 1997;
Bloodgood, et al., 1996; McDougall & Oviatt, 1996; etc.). McDougall and Oviatt (2000)
make the point that “Businesses in an increasing number of countries are seeking
international competitive advantage through entrepreneurial innovation (Simon, 1996).”
And the Academy of Management Journal (AMJ) recognized the increasing importance
16
of international entrepreneurship research by publishing a “Special Research Forum on
International Entrepreneurship” in its October 2000 issue. The leader in convincing the
AMJ editor to engage this Special Issue was Professor McDougall. Zahra, Ireland, and
Hitt et al. (1998) recount many of the measures of international entrepreneurship activity
that have been addressed: e.g., antecedents to international activity, processes for
moving into international markets, performance effects of new venture international
operations, the impact of regulations, industrial and organizational factors that enable or
constrain new venture international focus, and many other variables. In general,
international entrepreneurship is examined by the amount of international activities of
the entrepreneurial firm’s operation. Most researchers have studied these activities
utilizing three different dimensions, namely the extent, speed, and scope of
internationalization.
The extent or degree of internationalization is usually measured by the percent of sales
generated from foreign markets. However, some researchers prefer to use more than
one factor to measure this variable. Sullivan uses foreign sales as a percentage of total
sales, foreign assets as a percentage of total assets, and overseas subsidiaries as a
percentage of total subsidiaries to measure the degree of internationalization (Sullivan,
1994). Reuber and Fischer (1997) measure the degree of internationalization of
Canadian software firms using the percentage of foreign sales, and the percentage of
the employees that spend more than 50 percent of their time on international activities.
The speed and scope of internationalization has attracted less research attention than
the extent/ degree dimension. Speed of internationalization is defined as the length of
time from the inception of the firm to the time the firm generates foreign sales. Reuber
17
and Fischer look at the number of years the firm operated domestically before having
any foreign sales as a “delay” and treat it as an international behavior of the firm
(Reuber & Fischer, 1997). In another study of the globalization patterns of emerging
high-technology companies in the U.S., Roberts and Senturia also consider the timing
of initiation of global activities as one of their variables (Roberts & Senturia, 1996).
The scope of internationalization is measured by the number of foreign markets within
which the firm operates. These foreign markets are sometimes represented by the
countries and sometimes by regions. Zahra, Ireland, and Hitt call this dimension of
internationalization an “international diversity” and measure this variable by the number
of foreign countries to which the companies sell their products (Zahra et al., 2000). In
contrast, Reuber and Fischer look at the geographic scope of sales from a regional
viewpoint, e.g., North America, and outside North America (Reuber & Fischer, 1997).
2.2 Theoretical framework
Most businesses find it easier to formulate strategies that outline how they intend
to achieve their goals than how to implement them (Noble and Mokwa, 1999; Walker &
Ruekert, 1987). Theory posits organizing marketing activities in ways that fit the
implementation requirements of a business’s strategy which enhances performance.
The marketing theory posits that to enable strategy implementation and achieve
superior performance, managers should organize marketing activities in different ways
depending on their business strategy (Slater & Olson, 2000; Walker & Ruekert, 1987).
Marketing activities are organized in ways that enable business strategy
implementation with two different marketing performance outcomes. Within this
important domain, research makes good contributions. A major knowledge gap is to be 18
filled by providing empirical support for theorized links among the organization of
marketing activity, business strategy, and marketing performance. This helps managers
understand how to organize marketing activities to meet the implementation
requirements of different business strategies and why this is important in driving
performance.
Assessing whether a business’s marketing activities are organized in ways that
enable the implementation of its strategy and the impact this has on performance
requires the simultaneous consideration of multiple characteristics of the business
(Doty, Glick, & Huber, 1993). In addressing similar research questions, scholars in
organization theory and strategic management have used configuration theory-based
approaches (Miller, 1997; Veliyath & Srivanstava, 1995). Configuration theory posits
that for each set of strategic characteristics, there exists an ideal set of organizational
characteristics that yields superior performance (Van de Ven & Drazin, 1985).
Figure 1 combined insights from the configuration theory and the marketing
literature to develop a conceptual model that linked to the degree to which marketing
activities are organized in ways that enable the business strategy implementation with
marketing performance.
Marketing scholars have used many different terms—including “match,”
“alignment,” “congruence,” “complementary,” and “consistency” to denote holistic
relationships between multidimensional phenomena such as marketing organization
and business strategy. Although each of these terms can connote different meanings
and technical specifications, they are often used interchangeably.
19
From this perspective, the marketing organization fits with the business strategy
defined as the degree to which a business’s marketing organization profile differs from
an ideal marketing organization that achieves superior performance by arranging
marketing activities in a way that enables the implementation of a given business
strategy.
20
Marketing Organization Characteristics
*Structural characteristics
*Task characteristics Marketing Organization Fit with Strategic Type
Deviation from profile of an ideal marketing organization that produces superior performance in ways that enable strategy implementation
Strategic Type
*Prospector
*Analyzer
*Defender
Performance Effectiveness
Marketing Effectiveness
Marketing Efficiency
Figure 1: Marketing Organization Fit With Strategic Type and its Relationship with Marketing Performance
In the marketing domain, existing theory indicates some marketing organization
characteristics that may be appropriate for firms pursuing certain types of strategy
(Ruekert & Walker, 1987). In the context of marketing organizations fit with the business
strategy, this approach requires the identification of high-performing businesses
implementing a given strategy and a calibration of their marketing organization
characteristics as an ideal profile for implementing that strategy (Drazin & Van de Ven,
1985; Venkatraman & Prescott, 1990).
Figure 1’s configuration theory and the marketing literature suggested two major
constructs (Vorhies & Morgan, 2003) that are relevant to understanding and assessing
the marketing organization’s fit with the business strategy: business’s strategic type and
marketing’s organizational characteristics. Strategic type pertains to the planned
patterns organizational adaptation to the market through which a business seeks to
achieve its strategic goals (Conant, Mokwa, & Varadarajan, 1990).
Marketing’s organizational characteristics are the many important structural and
task characteristics that together constitute the way marketing activities are organized
within the business (Workman, Homburg, & Gruner, 1998). The structural
characteristics of the marketing organization pertain to how marketing activities and
related decision-making authority are arranged (Doty et al., 1993; Ruekert & Roering,
1985). The task characteristics of the marketing organization pertain to the nature of the
marketing activities undertaken and the ways they are performed (Ostroff & Schmitt,
1993).
21
Task characteristics indicate the ability of the marketing organization to perform
necessary marketing activities and the degree to which team-based workflows are
needed to accomplish them.
The marketing theory suggests that organizing marketing activities in ways that fit
the business’s strategic type is an important driver of marketing performance outcomes
(Walker & Ruekert, 1987). A resource-based view theory indicates the fit between
marketing organization characteristics and the strategic type may also exhibit the
inimitability and non-substitutability characteristics identified as essential for sustaining
competitive advantage.
The marketing performance may be a different business. For example,
organization theory posits that effectiveness, regarding the degree to which desired
organizational goals are achieved, and efficiency, regarding the ratio of organizational
resource inputs consumed to the goals achieved, are two important and distinct
dimensions of organizational performance (Bonoma & Clark, 1988).
A configuration theory suggests that the ideal marketing organization required to
fit with particular strategic types differs depending on whether the firm seeks to
maximize either effectiveness or efficiency (Tsui, 1990).
Marketing effectiveness pertains to the degree to which desired market-based
goals are achieved (Clark, 2001; Morgan, Clark, & Gooner, 2002). Theory suggests that
for effectiveness-maximizing business of each strategic type, an ideal marketing
organization exists in which the configuration of structural and task characteristics
22
enables the implementation of the business’s strategy in a way that leads to superior
marketing effectiveness (Ruekert & Walker, 1987).
Marketing efficiency is the ratio of marketing performance outcomes achieved to
resource inputs consumed (Bonoma & Clark, 1988; Morgan et al., 2002). Theory
suggests that for efficiency-maximizing businesses of each strategic type, there exists
an ideal marketing organization in which the configuration of structural and task
characteristics enables the implementation of the business’s strategy in a way that
leads to superior marketing efficiency (Ruekert & Walker, 1987).
This study indicated that organizing marketing activities in ways that fit the
business’s strategic type was associated with marketing effectiveness in each of the
three strategic types and with marketing efficiency in firms pursuing prospector and
defender strategies. This provided empirical support for the strategic marketing theory
predictions that linked the marketing organization, which fit with the business strategy
and marketing performance (Walker & Ruekert, 1987).
Debate in the field of entrepreneurship has sometimes focused on whether or not
the perfect competition model applies in explaining entrepreneurial behavior (Kirzner,
1997).
23
Customer Analysis
Competitor Analysis
Positioning (Product/Market Choice)
Company Analysis
Product Differentiation
Market Segmentation
Marketing Strategy Manufacturing
StrategyFigure 2: Business Strategy Debate
In the case of entrepreneurship the specialized knowledge is often knowledge
about opportunities created by the environment, a new product or even opportunities for
a potential new product (Alvarez & Busenitz, 2001). Alvarez and Busenitz continued to
expound on the limitation of the process and to utilize the information as research data:
As we uncover the phenomenon surrounding entrepreneurial cognition, it is becoming clearer why entrepreneurs see new discoveries more readily than their counterparts. Their heuristic-based logic appears to give them a competitive advantage in quickly learning about new changes and what the implication of those changes are for the development of specific discoveries. (2001, p. 760)
Kirzner (1979) developed the term “entrepreneurial alertness” as the ability to
see where products or services do not exist or have unsuspectedly emerged as
valuable. Alertness exists when one individual has an insight into the value of a given
resource when others do not. From this perspective, entrepreneurial alertness refers to
“flashes of superior insight” that enable one to recognize an opportunity when it
presents itself (Kirzner, 1997).
24
Alvarez and Busenitz offered a big description of the opportunity. They placed
the entrepreneurs’ story within the context of the whole process:
In the context of environmental change, those with an entrepreneurial cognition orientation often see new opportunities where others tend to be concerned with protecting themselves from emerging threats and changes. The cognition ability of entrepreneurs to frame situations in an opportunistic manner is a heterogeneous resource that can be used to organize other resources. (2001, p. 759)
2.3 Market Opportunities and Heterogeneity
Entrepreneurs have individual-specific resources that facilitate the recognition of
new opportunities and the assembling of resources for the venture (Alvarez & Busenitz,
2001) by focusing on the resources, from opportunity recognition to the ability to
organize these resources into a firm and then to the creation of heterogeneous outputs
through the firm that are superior to the market.
Resource heterogeneity is the most basic condition of resource-based theory and
it assumes at least some resource bundles and capabilities underlying production are
heterogeneous across firms (Barney, 1991). Resource-based theory suggests that
heterogeneity is necessary but not sufficient for a sustainable advantage. The notion
that entrepreneurs were somehow different from the rest of the population provided the
impetus for substantial research on the subject in the 1960s and 1970s. Most of this
research focused on a host of traits such as risk-taking and the need for achievement,
but unfortunately, the findings were disappointing (Low & MacMillan, 1988).
The research has generally assumed that individuals tend to make decisions
(and the use of heuristics) in a similar fashion and are susceptible to common errors
25
(Alvarez & Busenitz, 2001). However, recent research on cognition indicated that
entrepreneurs use heuristics in their decision-making more than their managerial
counterparts in large organizations (Baron, 1998). Consequently, they often made
significant leaps in their thinking leading to innovative ideas that were not always very
linear and factually based. Central to most models of learning is the issue of achieving
new understandings, interpretations and insights. Learning in the context of
entrepreneurship may also have some important links to the use of heuristics in
decision making. Sources of competitive advantage are thought to potentially evolve
around knowledge-creation and decision-making capabilities (Barney, 1991).
This heuristic-based logic enables entrepreneurs to more quickly make sense out
of uncertain and complex situations. Such decision approaches can lead to forward-
looking approaches perceiving new opportunities, faster learning and unorthodox
interpretations.
Resource-based logic identifies the kinds of resources and capabilities that
require specific investment in order for their full economic value to be realized-resources
and capabilities that are socially complex, path dependent, tacit, and so forth (Barney,
1995). These ideas suggest that conditions which require that efficient coordination of
and integration of knowledge are those in which entrepreneurial firms are likely to arise
in an economy (Kirzner, 1997).
The entrepreneur’s ability to convert creative insights and often homogenous
inputs into heterogeneous outputs make the firm a superior choice over the market
(Alvarez & Busenitz, 2001). The classic story is that profit maximization and efficiency
26
require the substitution of firms for markets to the cost of using markets becomes large
relative to the cost of the entrepreneur forming a firm (Coase, 1937).
Alvarez and Busenitz expanded on the importance of learning and knowledge in
the entrepreneurial process:
The learning, however, is a result of buyers and sellers learning to adjust their behavior over time to conduct their transactions at the optimal level. The entrepreneurial process in this sense is about information discovery of the market and the coordination of disparate tacit knowledge. (2001, p. 762)
The emergence of cognitive approaches to understanding how entrepreneurs
think and make strategic decisions is showing much promise (Baron, 1998; Busenitz &
Barney, 1997). If entrepreneurs do indeed have a unique mindset of orientation, then it
follows that their cognitive approaches are likely to have strengths and weaknesses in
various competitive environments and are a potential source of competitive advantage
(Barney, 1991).
Schumpeter (1934) described the entrepreneur as the one who combined
productive factors in some new way, a product, production method or a market. He
further maintained that innovation was driven by the entrepreneur (who is at the heart of
the firm) and not consumer driven (markets).
The focus of most current entrepreneurship research into opportunities has been
on markets (Kirzner, 1997). This is true whether the market is a product market or a
factor market. Once the discussion turns to factor markets (the creation of value through
27
the transformation of inputs into outputs) there becomes a need for the coordination of
numerous types of specialized knowledge.
Schumpeter suggested that new combinations of resources are new ways of
competing and that these ways of competing do not as a rule come from existing firms,
but rather from new firms that develop alongside established firms.
Alvarez and Busenitz stated
This is consistent with the notion of strategic complementarily that suggests that when the quantities of capital goods that are complements go up because of increased demand, the marginal productivity of the good is raised and the demand goes up. (2001, p. 765)
Alvarez and Busenitz shared their view of qualitative research in general and the
increased demand created by the lead entrepreneur in particular:
A familiar form of monopolistic competition characterizes the resulting equilibrium, though now instead of one large firm there is a large number of small firms. What has occurred is that total profits have likely minimized at the lowest level of uncertainty and we now have firms functioning efficiently where as before there might have been waste which occurred as a result of reorganizing resources. (2001, p. 765)
The innovative entrepreneurial act of once again recombining new resources
start a new cycle (Schumpeter, 1934). The entrepreneur’s ability to continuously
innovate is the primary competitive advantage of the entrepreneurial firm, sustainable
entrepreneurial firms, and sustainable wealth creation (Alvarez & Barney, 2001). Park
noted that “small business activities today are a symbol, perhaps the key symbol, of
Korean-American identity and success” (1997, p. 206).
28
Entrepreneurs use their “strength of weak ties” (Granovetter, 1982) to expose
themselves to a broader cross-section of people and situations that they in turn give
them the opportunity to extrapolate and make extensions regarding new venture
opportunities. While the nature of their social interactions tend to remain somewhat of
an enigma, the part of who they are is a resource and a potential advantage in new
venture creation (Alvarez & Busenitz, 2001). This interaction provided them with
substantial exposure to unusual and different ideas and resources.
In firms different people have different habits, thoughts, and models of the world
that present obstacles to the efficient coordination of their actions (Foss, 1999). A
collective knowledge base is required for coordination (Penrose, 1959). This collective
knowledge base coordinates existing distributed knowledge but also coordinates
intrafirm learning processes. Indeed, coordinated knowledge bases help the firm
organize a localized discovery process. To be successful for any length of time a firm
must innovate (Rumelt, 1987). Since innovation requires a certain amount of preexisting
capabilities firms need to be able to learn (Schumpeter, 1934). In order for firms to
incorporate the skills and resources to sustain, innovation must be present.
Some entrepreneurship scholars are seeking to better identify the distinctive
domain of entrepreneurship (Busenitz et al., 2003; Shane & Venkataraman, 2000).
Entrepreneurship scholars should not “shy” away from an area of research simply
because some researchers are examining a question or theory in another discipline. In
entrepreneurship we need to apply our own unique lens to the examination of these
questions and theories. This extends the efforts to better clarify the domain of
entrepreneurship.
29
Today, entrepreneurial activity has been accepted generally as supplying positive
and productive contribution to the economic development of the country. Entrepreneurs
are related as an essential movement model agent, using indigenous sources, to
produce market and to manage business (Pasual, 1990).
The most important characteristics of a successful entrepreneur depend on
imagination, effort, deliberation and maintenance of an individual who has the attitude
(Jumaat, Ishak, Fairuz, & Rohani, 2004). Positive attitude towards entrepreneurship can
give a person the ability to imagine, effort ability as well as deliberation and
maintenance in managing a business.
A business person or an entrepreneur has a certain quality personality. Quality
personality aspects consist of attitudes, values and the spirit to achieve success. Morris
(1989) regarded attitudes as one of the quality aspects that is important because the
attitude of a person plays an important role in determining whether a man or woman has
interest in a particular business.
Stewart and Roth explained, “As a result, divergent theoretical positions and
discordant empirical findings have culminated in confusion in the entrepreneurial risk
propensity literature and in an impasse in theory development associated with
dispositions and entrepreneurial risk behavior” (2001, p. 145).
Planning in Small Businesses
A number of studies have shown that small firms tend to place great emphasis
on operational planning (Nylen, 1985; Sharader, Mulford, & Blackburn, 1989).
Numerous articles in academic publications as well as practitioner-oriented journals
30
have emphasized the importance of planning for small businesses (N. A. Ibrahim et al.,
2004). Good planning is a key to the firm’s success (Aram & Cowen, 1990; Barton &
Hounsell, 1994) and is a major contributor to profitability (Schwenk & Sharader, 1993).
Rue and Ibrahim (1996) reported the results of a survey on 128 businesses.
They found that 59% of these companies had prepared written plans and that 96% of
these plans included one or more quantified objectives.
N. A. Ibrahim et al. stated
The two most frequently cited objectives were sales and earnings that were used by 84% and 71% of these firms, respectively. The study also examined the various planning tools used by these companies. They included the analysis of factors outside the operating environment that are used as inputs to the written plans, the development of plans and budgets for further growth and expansion of the business, and the use of various pro-forma financial statements. (2004, p. 53)
Planning can only be a useful managerial function if objectives are properly
chosen (N. A. Ibrahim et al., 2004). Without concrete objectives, the entire planning
activity can easily turn into a futile exercise. Objectives provide benchmarks for
evaluating progress (Richards, 1986). They represent a managerial commitment to
achieving certain results.
31
Chapter III: Methodology
3.Introduction
The research methodology is the set of processes used to collect and analyze data
(Leedy & Omrod, 2001).This chapter presents details about the methodology adopted
and elaborates the chosen research philosophy, approach and strategy used and the
reasons for their selection. Further, this chapter describes the sample population and
how the primary data was collected and processed. This chapter further explains the
data collection tool and highlights validity, authenticity and reliability of the data
collected.
3.2 Research Framework
Saunders et al. (2007) define an exploratory study as a valuable means of finding out
‘what is happening; to seek new insights; to ask questions and to assess phenomena in
a new light study. Further, they define interpretivism as a theory of knowledge that
depicts the methods, validity and scope of the research. This theory advocates that it is
necessary for the researcher to understand difference between humans as social actors
(Saunders, Lewis & Thornhil, 2007). ). Hence, the study was conducted in the
interpretivism philosophy, because the aim of the researcher was to understand
international entrepreneurship activities of Pakistanis in the United Kingdom in the
clothing trade. For this purpose, the researcher conducted questionnaire based surveys
which were distributed among 50 Pakistani entrepreneurs. Key informants in the survey
32
were the owners or general managers since they are knowledgeable about their firms’
characteristics, management style, and performance.
3.3 Sampling
In order to investigate the entrepreneurship activities of Pakistani entrepreneurs
engaged in cloth trading in UK, the researcher further chose 5 participants of the
survey for follow up interviews. From this population, the researcher collected primary
data through self administered semi-structured questionnaires and telephonic
interviews. The questionnaires were sent through email and the contact information was
sought from internet websites. A volunteer consent of the participants was sought to
participate in this research before emailing them the questionnaire. The respondents
were emailed questionnaire along with a cover letter (Appendix A) that explained the
purpose of the study. According to Creswell (2005), participation should always be
voluntary and confidentiality should be assured. In order to maintain the confidentiality,
the participants were assured of their anonymity.
3.4 Data Collection tool
In order to ascertain the views, opinions, and perception of the Pakistani entrepreneurs,
primary data was collected from the participants of this research as only they could offer
insight about the topic being explored. This specific information could not be obtained
from secondary data, as it would have been collected for other purposes. Therefore,
questionnaires used to allow the researcher to obtain this information. Data collected
was analyzed using SPSS in order to examine the three factors: (1) organizational
characteristics; (2) international entrepreneurship activities; and (3) firm performance;
33
and (4) barriers in the development of entrepreneurship. The first section asked the
participants to highlight general information about themselves. The second section
asked the firms about their strategic performance. The third section concerns firms’
management style, inquiring about their entrepreneurial orientation. The last section
asks respondents to provide information about the obstacles and barriers they faced in
development of their entrepreneurship activities in UK.
After all the questionnaires were received back from the respondents, the
responses were fed in SPSS version 14, the most reliable software for gendering
analytical results. SPSS for Windows offers with а variety of capabilities for the entire
analytical process. With SPSS, we can generate decision-making information quickly
using powerful statistics, understand and effectively present our results with high-quality
tabular and graphical output, and share our results with others using а variety of
reporting methods. Results from our data analysis enable us to make smarter decisions
more quickly by uncovering key facts, patterns, and trends.
Some of the construct were measured by some three to six Likert scale items.
Harrison and McLaughlin (1993) show that Likert-type scales tend to bias participants’
responses toward center point of the scale because participants implicitly assume that
the center point is the normal or average.
3.5 Collection and utilization of the Secondary data
There are two ways of finding the secondary sources related to the research: the
library and the internet. The literature search was conducted using both these
34
approaches. The researcher explored and scanned the secondary literature in the
books and journals of library accessing the online library portals like Athens ProQuest.
Internet was also explored extensively to find the relevant data required for this study.
This data was acquired through the Emerald website to which the Athens provides
access and has a link. Journals are a vital literature source for any research and the
articles are easily accessible (Saunders et al., 2007). In addition, books are written for
specific audiences and the material in them is presented in a more ordered and
accessible manner than in journals, pulling together a wider range of topics (Saunders
et al. 2007). All these resources were utilized and necessary and relevant data was
gathered in order to give weight, authenticity and validity to the literature review and
make the study topic more comprehensive and useful. . The literature review also linked
the different ideas found in the literature to form a cohesive and coherent argument,
which sets in context and justifies the research (Saunders et al. 2007).
3.8 Validity
Validity of qualitatively based questionnaire surveys refers to the extent to which
the researcher gains access to their participants’ knowledge and experience. It enables
the researcher to infer a meaning that the participant intended from the language that
was used by this person (Saunders et al., 2007). The survey questionnaire was
designed to gain access to the Pakistani entrepreneurs’ knowledge and experience
regarding their ventures to expand their business boundaries to the UK market and the
obstacles and barriers they face in that particular business environment. This
35
questionnaire was designed to help researcher to understand the deeper meaning of
the participants’ views and to infer the results this survey aimed at.
For all secondary data a detailed assessment of the validity and reliability will
involve an assessment of the method or methods used to collect the data (Saunders et
al., 2007). The secondary data collection methods have been described in section 3.5
(collection and utilization of the secondary data). The validity of secondary data can also
be assessed quickly by looking at the sources of the data (Saunders et al., 2007).
According to Saunders et al., (2007), Dochartaigh and others refer to this as
assessing the authority or reputation of the source. The main sources of secondary data
in this research study were books and journals from the Emerald online database. It is
important to discover the person or organization responsible for the data and to be able
to obtain additional information through which one can assess the reliability of the
source (Saunders et al., 2007). For data in printed publications this is usually
reasonably straightforward (Saunders et al., 2007). The persons or organizations
responsible for the data and the additional information can be easily accessed in the
secondary data sources used for this research study.
3.9 Reliability
Reliability refers to the extent to which data collection techniques or analysis
procedures will yield consistent findings. (Saunders et. at. 2007) Marshal and Rossman,
as cited by Saunders et al. (2007) state that one response to the issue of reliability is
that the findings derived from using non-standard research methods are not necessarily
intended to be repeatable since they reflect reality at the time they were collected, in a
situation which may be subject to change. Marshall and Rossman suggest that where 36
this approach is used, one should make and retain notes relating to the research
design, the reasons underpinning the choice of strategy and methods, and the data
obtained (Saunders et al., 2007). Reliability was also fulfilled in describing the
strategies and methods used in this chapter and the detailed findings in chapter 4.
3.10 Summary of the chapter
This chapter has highlighted the research philosophy, techniques and methods
used for this study. The study has relied questionnaire based surveys conducted with
selected Pakistani entrepreneurs developing their cloth trade in the UK. This was the
best available method to conduct survey. Although the responses of the employees may
be biased as their opinion may be influenced by their own individual experiences at the
time of conducting this survey, yet this research provides a lot of interesting information
regarding impacts of design changes on the cost and scheduled completion of the
project.
37
Chapter IV : Results
4.1 Introduction
In this chapter, the researcher will show the results of the primary data collected
through the questionnaire based surveys and telephonic interviews conducted with the
Pakistani entrepreneurs developing their cloth trading in the UK. In the first section, the
results of survey questionnaire will be discussed while the interview results will be
discussed inn the second part of this chapter. The purpose of this research was to
ascertain the conception of the Pakistani entrepreneurs about obstacles and barriers
they face while developing their entrepreneurship in UK which has a different business,
financial and cultural setup than the setup they are used to at their own country. In this
section, the researcher will present the demographic information of the respondents,
and will also discuss their response towards the questions asked about different
aspects of the entrepreneurship activities in the UK.
4.2 Demographics
The researcher invited 50 participants to take part in this survey which were sent to
them by emails. The participation ratio was 100% as all them returned the duly filled in
questionnaires. However, as some participants completed the questionnaire partially or
there were some blank responses, these responses were not counted. All of the
participants belonged to Pakistani ethnicity which represents their unique traits and
characteristics of a particular socio-economic culture. A prior consent was sought
before conducting this survey for participating in this research study. The data analysis
discusses the survey results using descriptive method. According to Gay and Airasian 38
(2003), when presenting the results of a questionnaire study, the response rate for each
item should be given as well as the total sample size and the overall percentage of
returns. This is because not all respondents will answer all questions. Each section of
the survey will be summarized as well as the comments and suggestions made by the
participants.
Interestingly, all of the participants of this study were male which shows the
particular characteristic of the Pakistani society. The majority of the participants were
within the 30-55 age range which shows they were well matured to start a business in a
diverse environment. The majority of them had been working in the current position
since 4-9 years and the majority of them were the administrators of their firms.
4.3 Resources acquisition
The participants were asked to disclose how they start the business to which the
majority (80%) responded that they started it through their own venture while only 10%
told they acquired the business from their family. However, the other 10% said they
bought the business from a non-family member.
The majority of the participants (70%) said their firm performance was very high in profit
while 60% of them said their firm had very big market share. Most of them (67%) said
they borrowed 25-49% of money for the entrepreneurship whereas 15% said they
borrowed less than 10% capital to start the business.
Similarly, the majority of the participants (82%) said they got load or equity from friends
or their relatives whereas only 14% of them said they were financed by the bank loan.
39
On the other hand, 35% of them said they had personal savings which helped them to
start the business.
Majority of them had mission statements (92%) while 75% had long term goals to keep
the business running in the UK. However, only 43% had their strategic plan which
shows they lacked enough marketing experience and skills.
4.4 Entrepreneurship experience
The next section was based on five likert-scale responses to various questions relating
to their entrepreneurship experience in the UK. The responses show that for the
majority of the participants the expansion to international market was a positive move
which helped them to reduce the cost (56.1% agreed, while 28.6% remained neutral).
However, eight participant disagreed with the statement showing that there are also
some risk factors involved which may increase the cost of labor or product (table 1).
Table 1: International experience and cost reduction
Frequency Percent Valid PercentCumulative
PercentValid Agree 28 56.0 56.0 56.0
Neutral 14 28.0 28.0 84.0Disagree 8 16.0 16.0 100.0Total 50 100.0 100.0
Another important factor that gives benefit to the international entrepreneurs is its
advantage over our domestic competitors. As shown in the next table, the international
venture positively impacts the image of the company. Thus, in this context, the results
shown in table 2 demonstrate that all the participants acknowledge that their
40
international entrepreneurship had given them an advantage over their competitors
(strongly agree 30%; agree 56%; and neutral 14.3%) whereas no participant disagreed
with this statement showing there is no negative signs or impact of venturing in
international market.
Table 2: Advantage over domestic competitors
Frequency Percent Valid PercentCumulative
PercentValid Strongly agree 15 30.0 30.0 30.0
Agree 28 56.0 56.0 86.0Neutral 7 14.0 14.0 100.0Total 50 100.0 100.0
Future planning involves insight and solid experience in order to meet success in
international competitive environment. Thus, the international entrepreneurship activities
help a lot in the direction of future planning and business improvement. The same views
were indorsed by the participants of this study who affirmed that their international
experience had taught them a lot about planning for the future (44% strongly agreed
with the statement while 56% agreed).
Table 3: Planning for the future growth
Frequency Percent Valid PercentCumulative
PercentValid Strongly agree 22 44.0 44.0 44.0
Agree 28 56.0 56.0 100.0Total 50 100.0 100.0
41
However, in order to succeed in international market, it is imperative that bold and
independent decisions should be taken to exploit any opportunities. For this purpose, a
clear mindset is required in by the Pakistani entrepreneurs. When the same statement
was given to the participants, there had mixed feelings. 56% agreed with the statement
while 44% disagreed which shows that the participants are still hesitant to take risk in
international market (table 4).
Table 4: bold, independent posture to exploit new opportunities
Frequency Percent Valid PercentCumulative
PercentValid Agree 28 56.0 56.0 56.0
Disagree 22 44.0 44.0 100.0Total 50 100.0 100.0
4.5 Obstacles and barriers in UK
Though the results discussed in the previous sections have demonstrated that the
entrepreneurship activities by the Pakistani cloth traders were fairly encouraging and
they were well established and good experienced, yet they were facing certain barriers
and obstacles which needed further attention and discussion.
As indicated in the questionnaire (appendix A), a section of it required the participants to
highlight various levels of obstacles and barriers that they faced. The responses to this
section show that the majority of them especially faced the start-up and financial
support which is evident from the fact that the Pakistani community is comparatively
smaller than the other ethnic minorities in the UK. Similarly, the other most notable
42
barrier came to be known as the business management skills. This is mainly due to the
fact that there are no training facilities that they avail for starting their entrepreneurship
activities in the UK market. The third ranked barrier by the participants was the
language skill and the racial bias which the Pakistani community faces in the UK. Thus,
to sum up, the Pakistani entrepreneurs mainly face the barriers of lack of finance, non-
availability of bank loans, lack of management skills and to some extent the racial bias
in the UK community.
4.4 Follow up Interviews
This section describes in detail the results from the follow up semi-structured
interviews with the participants of this study. These participants were selected as a
result of their consent sought through the questionnaires surveys. The respondents in
the end of the questionnaire surveys were asked if they were wiling to be interviewed
and the ones who showed their willingness were later contacted at their own chosen
time and there were sufficient intervals between each interview in order to enable the
researcher to transcribe the interviews and also to make suitable changes for the next
interview in the light of the previous interview experience and response. A table
detailing the population who participated in the interview and the details of their
respective occupation is given below:
43
Table 5: Participants of the primary data collection
Participant A Mr. Subtain Islam is an entrepreneur belonging to Faisalabad city of Pakistan. He came to the UK in early 80s and after changing many professions, started his own clothing importing trade.
Participant B Mr. Wajahat is Karachi-based UK settler whose parents came to UK in early 70. He inherited the cloth business from his parents and took many innovative steps to shape it to the present setup.
Participant C Mr. Ali came to UK as a student and after unsuccessful job attempts began cloth trading after acquiring substantial bank loans.
Participant D The participant D belonged to a middle class family of Pakistani city of Gujrat. He got a chance to become a manager in a cloth trader’s firm run by a Pakistani entrepreneurs.
Participant E Mr. Alvi is an experienced and well qualified entrepreneur from Faisalabad city of Pakistan. He imports different varieties of clothes from Pakistan and is very successful in his business.
For this interview session a total of 10 questions were prepared (see “Appendix
B” for detailed questions and answers). Like the questionnaire these questions intended
to ascertain the participants’ views on barriers of entrepreneurship activities in the UK
by the Pakistani cloth traders.
Below is the brief of the responses to the interview questions which were
transcribed and abridged in order to present the findings in concise format.
44
Dealing with Obstacles
Participant A: Money is always a problem. One obstacle I faced was with the bank.
Sometimes you have to have loans with the bank and you need to form a good
reputation. When I needed money, they would say we are not accepting your
organization’s collateral. That wasn’t an easy thing. I had to get around it. It took me a
while to get a loan from the bank because they had to see if I was able. (P) and I put in
a lot of hours with the business. 95% of our community puts in 60 hours a week.
Participant B: You have to know how to handle your finance. If you know how to
handle that, it is a lot easier. Employees are one big problem that businesses have. You
sometimes have more theft by employees than by your customers. You can have no
problems with your customers, but you can have problems with employees. You have to
be neat. (P) That is the key. When a customer walks in (P) and sees that the place is
clean and smells good, they like it and they will come back.
Participant C: When you first start your business, you are faced with financial
difficulties and that is the majority, especially, if you do not have enough money to start
a business. You are also looking through finances and renting if the business is not
making enough money. Once you start paying the bills and payments, you are doing
well. The first 3 or 4 years is very difficult because (PP) you have to try to support your
business and it’s a tough situation. Employees are a big expense. You have to hire
enough help to do the job. If you do not hire enough, you are doing more work than you
45
should and that will put a strain on your life. (PP) Inventory control is important too,
because you do not want to overstock or under stock. You have to watch your inventory
and it plays a big role in the business.
Participant D: You have to bring in employees that run the business when you are not
there. To be honest, (P) there aren’t too many employees that aren’t honest. Another
obstacle includes facing people that make fun of your accents even if you speak the
best English there is. People look at you and treat you differently. It’s all connected. The
way you want to emerge with the people and the way you want to know their culture
(PP), as well as the merchandise they want is very important.
Participant E: First off, I know how to take care of my customers. I also take care of my
employees. Each employee has his or her own job and duty. I also provide training for
my employees. (P) My prices range well and my customers are happy with them. The
customers like the employees and they like me. Some vendors do not deliver in this
area so therefore, I pick it up myself, so I can satisfy my customers.
The Essential Marketing Principles
Participant A: At first, I had a 1200 sq. ft store that did good business. The area was in
need of a bigger store, so I built a 5000 sq. ft store. Some marketing that was involved
was a sale paper that went out to nearly 10,000 homes. I used to do it every month and
a half. I did it for a few years to let people know of the expansion, (P) and we were
46
attracting a lot of people to come here. (P) If you don’t change your strategy, you are
going to keep going down.
Participant B: Your finance source is very important; (P) if you don’t have that, nothing
is going to happen. You must have a good location and treat the customer’s right. (P)
The right products are also important. You have to start giving things away, like buy
one, get one free. You have to use your intelligence and your experience. You have to
know how you are going to fight back with the big stores. Another strategy is ATM, Visa,
and money orders. These things are used to bring more customers here (P) and are
considered both long and short term strategies to me.
Participant C: The way I advertise is in the local paper. It is handed out on a weekly
basis and that paper goes to people’s houses. They look at your products and prices
and if they are interested, they are going to come to you. Advertisement helped me a
lot. Financing is the main source of it. You need to have inventory management and
have enough to sell. We price everything accordingly and reasonably. If I go too high, I
won’t be making money. I treat the customers with honesty and respect, (P) and that’s
the ticket.
Participant D: You have to show the people you have new ideas, you need to have
what they want, the hours they want, and when they see everything that has changed
and you do mean business. You deal with the people the way they want to be treated.
(PP) In small businesses, you have to light up the place because they notice that more.
47
I went around to all my competition and saw what they all had. (P) You have to see
what your customers want and provide that. If you are new in the area, you want to give
the same prices as your competition and you treat them with respect, are courteous,
and show honesty towards them.
Participant E: I put more stock where there are more sales. I order triple the amount,
put them in the backroom, and that makes my sales. I also have money orders available
to the consumers. I also provide Western Union. Whenever the customers ask me for
something, I bring it in right away. (PP) I’m always thinking of ways to make it more
convenient for the customers. A lot of customers ask me for it and I’m thinking of adding
it.
Experiencing Success
Participant A: I define a successful entrepreneur as having a good business. You can
owe money, but be comfortable enough to pay bills. You will have plenty of business. I
am pretty successful. I also saved money on the side. I saved for about 5 to 6 years. I
bought me a business. I did it all on my own. I saved my money for a business with a
good future in it.
Participant B: I have been in this location almost 20 years. I still have my first customer
from 10 years ago. Customers bring in other customers. This is one of reasons I have
lasted for about 20 years and how I know that I am successful. The confidence of my
customers helped me know I was successful. The bank was one of the sources to help
48
me get what I needed. My background was banking. Another background that assisted
me was that I am a business graduate. When I worked in sales, (P) I used to run into
different categories of stores. I have built good relationships with storeowners, and they
have discussed their problems with me. My community has also helped me build
experience.
Participant C: I define success as overcoming all the obstacles that are created, paying
all your payments, saving money on the side, and advancing to the next step.
Everything I have to do, I work for it. You have to work your way up.
Participant D: Success is when I see more people coming to my business. I see
success when my business is paying the bills, paying the taxes, and paying the
employees. I started working two jobs and worked until I felt experienced enough,
confident, and had good credit with the bank. That was enough to tell me it was time to
open a business.
Participant E: I define my success by the profit I make. I have more experience in
stores. Nobody ever gave me any money. I did this all myself. I did it with my own
money for my own business. I learned from wholesale, from other people I worked with,
and where I worked. I also worked with different people and I have learned from them,
which helped me get an outlook on being an entrepreneur.
49
Advice for Entrepreneurs
Participant A: Making displays and window signs in your stores helps bring the
products’ attention. You need to make sure you are putting good prices (P) because
that is very important.
Participant B: You need to make prices reasonable. You want to be reasonable and
fair. You have to give up things—like sales. The trust between you and your customers
is valuable and you must always respect them.
Participant C: Sometimes you can do displays and that helps push your product to a
good location in your establishment, like in the center of the aisle or close to the cash
the way of promoting a new product and to get the attention of people.
Participant D: You have to have an organized store and have what the customers
need. I am always in a continuous change. I keep my head above water. When the
vendors suggest something, (P) I ask all the customers. All the customers need is a
clean business and a well stocked one.
George Henry: I open early hours from 8 a.m.-12 a.m. I open late hours also. I get
more business by opening with these hours. I put extra hours to get the extra business.
You have to have a clean and big store. You must put out a lot of inventory and have
good management. You want to treat your customers well all the time.
50
Chapter V : Discussion and Conclusion
5.1Introduction
This chapter will present and discuss the results of this study as well as offer
conclusion and recommendations based on the review of the literature and the findings
of the primary research. In order to collect the primary data, the researcher conducted
the surveys and interviewed the Pakistani entrepreneurs in the UK engaged in cloth
trading. The main focus while conducting this research was to ascertain the perception
on the obstacles and barriers they face in the UK society. For this purpose, the
researcher designed a few preliminary questions which were the basis of this research.
These questions were:
1. What are the major barriers in establishing Pakistani clothing business in
London?
2. How these barriers can be reduced?
3. What are the characteristics of Pakistani minority in terms of their business skills
needs?
Based on these preliminary questions the researcher set the following specific
objectives before conducting this research:
1. To analyze barriers facing the Pakistani minority in business development in
London.
2. To investigate how Pakistani minority business growth risk can be analyzed
3. To enhance the ability of ‘Management and marketing’ in the Pakistani Minority
51
4. Try to examine the characteristics of the Pakistani Minority in terms of their
business needs.
The focus of this study was on two fundamental aspects of entrepreneurship. The
one was on the marketing strategies and the theoretical base while the second main
aim was to ascertain the barriers and obstacles that the Pakistani entrepreneurs face in
the UK. The framework and methodology presented were based on the view that the
market was the common denominator when developing functional strategies (Berry et
al., 1999). The views, similarities, and differences of many of these authors are
presented throughout this study. The fundamental meaning is that there is something
about successful entrepreneurs that permit them to defeat obstacles and go on to
entrepreneurial success.
This research effort used a qualitative design and methodology as a basis to
discover and understand the obstacles and barriers of Pakistani entrepreneurs in the
UK. Rudestam and Newton explained, “The reader needs to understand what you did
and how you thought about it in order to appreciate the links among the research
problem, the method, and the results” (1992, p. 90).
This study sought to understand the essential principles and importance of the
marketing strategy and mitigated obstacles that led to successful entrepreneurship. The
data were collected using semi-structured interviews and self-administered
questionnaire based surveys. The survey data was analyzed with SPSS while the
interview data were analyzed using content analysis procedures appropriate for a
qualitative study.
52
Two themes emerged as the essential principles from the details of the primary data
collected from the participants. The themes were: knowledge of customer service to
overcome obstacles, and planning success with a profit byproduct.
6.2 Limitations encountered
This study concentrated on Pakistani entrepreneurs of cloth trading in the UK. As it
was the only ethnic group the researcher conducted the primary research there was no
significant limitation encountered. All of the participants extended their full cooperation
during the process of collecting the data and too readily filled up the questionnaire sent
to them. However, time factor was a significant limitation to complete this study. If the
researcher had more time, the study could have been more valuable.
6.3 Implications for management
The findings of this study are thought provoking and have significant implications for the
management. There are many advantages and benefits of international
entrepreneurship activities as these not only help to generate more financial advantages
but also can significantly improve the firm’s performance through international exposure
and competitive environment. However, every entrepreneur has to face certain kind of
barriers in a new socio-economic culture which significantly impedes the firm’s
performance. In order to overcome these barriers and obstacles it is vitally important to
understand these barriers. This study has explored the international entrepreneurship
activities of Pakistani cloth traders in the UK in terms of their antecedents and
53
consequences; examined the barriers and obstacles and discussed the marketing
strategies they need to adopt. The research design (see Chapter III) offers potential to
provide strategic and operational recommendations to the Pakistani entrepreneurs and
policy guidance to both the Pakistani as well as the British government as the identified
barriers of language and racial discrimination, lack of sufficient capital support for the
Pakistani entrepreneurs and lack of necessary skills need further policy implementation
by these governments.
54
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Appendix “A”
Analyses of Barriers in the Development of Pakistani Entrepreneurs in the ‘Clothing trade’ in London
Note: All information will be treated as strictly confidential. Your company as well as
you will not be identified.
Please tick one of the boxes on the right.
A. Background personal information M F
1. Gender
2. In which of the following age categories do you belong?
18-24 25-29 30-35
36.40 41-55 56-64
65+
3. I have been working in my current position for:
Under 3 y 4-9y 10-19y Over 20y
4. Your Position
Director Manager Administrator Any other (please specify)
5. Years working for the company
Under 5y 5-10y Over 10y
6. Your nationality / ethnicity (please describe)
60
……………………..
B. General information about your company.
How did you acquire or start this business? Did you …
A1 – Buy or acquire it from a family member
� 2 – Buy or acquire it from a non-family member
� 3 – Start the business by yourself or with partners
4- Others (please specify)
Describe your firm performance in the last three years by circling the number
corresponding to your answer.
a). Market Share: 1. Very big; 2. Big; 3. Stable; 4. Small; 5. Very small
b). Profit: 1. Very high; 2. High; 3. Average; 4. Low; 5. Very
low
How much money was borrowed?
1. 1 1 – None
2. � 2 – Less than 10%
3. ; 3 – 10 to 24%
4. ; 4 – 25 to 49%
5. S 5 – 50 to 74%
6. ; 6 – 75 to 99%
7. ; 7 – 100%
Please indicate which of the following types of financing were used to start up your business and why did you use that
1 – Bank loans
61
2 – Overdraft
3 – Commercial credit cards
4 – Loans from business lending institutions.
5 - Credit from other government programs.
6 - Leasing
7 – Personal savings
8 – Loans or equity from friends or relatives
9 – Any other sources of financing, please specify:
C. Specific information about problem solving.
1. Do you have?
a). Mission statement
Yes No
b). Long-term goal
Yes No
c). Strategic plan
Yes No
For each statement below, please circle the number that indicates your agreement or disagreement about how it describes the characteristics of your company, ranging from 1 (Strongly Disagree) to 5 (Strongly Agree).
Statement Strongly agree
Agree Neutral
Disagree
Strongly disagree
Our international experience has…
improved the overall quality of our 1 2 3 4 5
62
products or services.
reduced the cost of our products or services.
1 2 3 4 5
made this company a stronger competitor for all customers we serve.
1 2 3 4 5
given us access to new production technologies.
1 2 3 4 5
increased our skills in using new technologies.
1 2 3 4 5
Our international experience has taught us a lot about how we can…
improve efficiency of our operations.
1 2 3 4 5
plan for the future growth 1 2 3 4 5
think about the competition facing our company.
1 2 3 4 5
When faced with uncertain situations, we adopt a bold, independent posture to exploit new opportunities.
1 2 3 4 5
It is not necessary to learn any foreign language to conduct international business at our company.
1 2 3 4 5
We do not spend much time trying to understand the cultures of our international customers.
1 2 3 4 5
It is easy to adapt to unique behaviors and practices of foreigners, especially when they are our customers.
1 2 3 4 5
63
We should not think of ourselves as just a Pakistani company but think of ourselves as a part of a “global community”.
1 2 3 4 5
We try to benefit from diversity in our environments by keeping our strategy somewhat flexible.
1 2 3 4 5
Our strategy emphasizes exploiting opportunities arising from changes in the environment.
1 2 3 4 5
Our strategy reflects a high flexibility in managing risks.
1 2 3 4 5
Against each phrase listed in the table below, please tick the column that shows how strongly you think this is a barrier to the entrepreneurship activities inUK. Please tick in the column
PHRASE Very strong Strong Fairy strong Not a barrierInadequate English language skillsLack of start-up & development financeBusiness experience from country of originLack of general and market informationRacial & ethnic bias and discriminationLack of business management skills
What difficulties did you expect while obtaining finance?
Please specify:
_________________________________________________________
_________________________________________________________
64
_________________________________________________________
Have your business ever been refused credit?
Yes No
Initially did you receive assistance with your business from government?
Yes No
Based upon your past experience, where would you look for help in the future and why
1 Banks
2 Finance Provider
3 Family and Friends
4 Other _________________
Why __________________________________________________________________
__________________________________________________________________
Thank you for completing this questionnaire. Your response will be kept strictly anonymous.
65
Appendix B
Obstacles:1. What were the internal obstacles you faced in early entrepreneurial
development?
2. What were the external obstacles you faced in early entrepreneurial
development?
Essential Marketing Principles
1. What are the essential marketing principles that helped you overcome obstacles
and lead you to entrepreneurial success?
2. What resources are needed in order to create a marketing strategy?
3. What are the entrepreneurship principles and practices necessary to create both
the short and long term strategy?
Successful Entrepreneur:
1. How do you define a successful entrepreneur?
2. Have people contributed directly to your success (in terms of money, fixture,
inventory, etc.)?
3. How did you learn the things you needed to learn to be successful in the
marketing strategy (from books, training, seminars, etc.)?
Developing Entrepreneurship:
1. What program will you suggest to bring your product to the attention of
prospective customers?
66
2. What additional thoughts, principals or practices came up as we talked regarding
what we will need to learn to be successful?
67