Culture Matters to
Entrepreneurship Policies :
Entrepreneurship Policies in the
U.S. versus China
CHINA
U.S.
CULTURE IS ...
Culture is defined as a shared public context or communityspecific ideas about truth, goodness, beauty, efficiency, etc.
Although individuals have diverse values, behavior, and
attitudes, the concept of “culture” captures the common
characteristics shared by individuals within a context.
THE CONCEPT OF ENTERPRENEURSHIP
exploring new technological possibilities
initiative taking
organizing and reorganizing social economic mechanisms
somewhat risk bearing
ENTERPRENEURSHIP POLICY
enhancing and important source to foster entrepreneurship
and to develope the economic in the society.
The enivornmental forces come from
(i.) the private sector
(ii.) social aspects including enterpreneurial culture
(iii.) the public sector such as macro policies, business
policies, and public safety
ENTERPRENEURSHIP POLICY
ENTERPRENEURSHIP POLICY
A Global Entrepreneurship Monitor (GEM) survey found out that both the
U.S. and china were among the countries with top scores for the
effectives of their entrepreneurship policies and the scores for these two
countries are very close.
The U.S. scored 3.36 and China scored 3.15
1,300 key informants, the participating national experts and
entrepreneurs were asked for their opinion as to whether government
policies and programs that aimed at supporting new and growing firms in
their countries were effective.
Chinese Culture and the U.S. Culture
U.S.
CHINA
Collective
- Collective culture
- Collective group interest
- Social harmony and social uniformity
vs.
individual
- Individualistic culture
- Emphasizes individual achievements and rights
- Social pluralism and social chaos
Chinese Culture and the U.S. Culture
U.S.
CHINA
Power Distance : Relationship between the government and people
-
High Power distance
Accept and welcome authority
Seldom express their disagreement
Unequal and hierarchical
-
Low Power distance
Everyone tends to have a voice
People work closely and may consult each other
Equal and independent
Chinese Culture and the U.S. Culture
U.S.
CHINA
Uncertainty Avoidance : the extent to which societies tolerate ambiguity
-
High uncertainty avoidance
Events clearly predictable
Have less leeway for negotiation
-
Low uncertainty avoidance
Face more uncertainties and ventures
More opportunity to negotiate
Chinese Culture and the U.S. Culture
U.S.
CHINA
High Context
-
Expect more of others than participants
Communicate less directly with each other
Tend to be more ambiguous, abstract, imprecise
v.s.
Low Context
-
High expectation among social members
Shared information
Need to be more direct, explcit, precise, and specific
Chinese Culture and the U.S. Culture
Culture matter : every corner of people’s life
Culture matter in Social economic societies
Culture influences social and economic development including policy formation.
Entrepreneurship policies are influenced by social and economic context including
history, culture, industrial structure, the current state of entrepreneurial activity, etc.
CULTURE is an important force to shape entrepreneurship policy.
Entrepreneurship Policy and Culture
Culture matter in Social economic societies
Culture influences social and economic development including policy formation.
Entrepreneurship policies are influenced by social and economic context including
history, culture, industrial structure, the current state of entrepreneurial activity, etc.
CULTURE is an important force to shape entrepreneurship policy.
Relationship between government and businesses
-
The entrepreneurial process in China is controlled by the government
Government economy
Big entry barrier - local protection :
“keep one eye looking at the market and the other eye at the mayor”
Confucian hierarchical administration mode and absolute power of the emperor
the entrepreneurial process in China is controlled by the government
-
Government play a small role in the development of Entrepreneurship
Partner
Enterprise or market economy :
government intervene only when market appears “failure”
Strong concept of equality from history of immigrant country
Importance of leadership and authority
-
Policies only from national leader
high power distance and high uncertainty avoidance make the social authority extremely powerful
not allow total pluralism yet but globalization are changing China into more pluralistic cultures
-
Policies not only from President
low power distance and low uncertainty avoidance - everyone have equally important opinions
Pluralism can motivate the growth of entrepreneurial miliu
Rule of Law
-
Lack a sufficient rule of law for good entrepreneurial milieu
Homogeneous society with Han culture
-
Many monetary and fiscal policies and rule of law to motivate entrepreneurship
and protect fair competition
low-context culture, where rules tend to be explained clearly
-
Small Business or Large Business
-
Focus on large or medium sized enterprise (LMEs)
Type2 “Techno-entrepreneurship policy”
Group benefits are emphasized more than that of individuals
-
Focus on small business (SBA)
Type1 “focuses social inclusion”
Market driven economy
Conclusion
CHINA
High Power Distance
Dominance of Government in Business and Entrepreneurship Policy
High Context
Lack of explicitly written laws for entrepreneurship development
Collectiveness
Policy focus on LMEs, not the small businesses
Conclusion
U.S.
Low Power Distance
Low Context
( by the immigrant culture )
Individualism
Smaller role of Government
Detailed written laws to regulate Entrepreneurial activities
Small Business extremely important / Entrepreneurship policy
focuses on benefiting SMEs
Globalization is transforming the global culture and this
change is dramatically affect entrepreneurship.
Entrepreneurs have to understand global market
mechanism.
China’s entrepreneurship policy therefore needs to
integrate Western style entrepreneurial milieu and
China’s unique culture perspectives. Instead of just
following developed economies entrepreneurship
development path.
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