Social embeddedness, entrepreneurial orientation and firm growth in ethnic minority small businesses in the UK

Abstract

Entrepreneurial orientation (EO) of ethnic minority small businesses (EMSBs) and its antecedents and consequences are under-researched. Grounded in ethnic entrepreneurship theory and the social embeddedness approach, this article examines the relationships of EMSBs’ access to various networks, their EO and firm growth. Drawing on quantitative data collected through 258 face-to-face structured interviews with Chinese- and Turkish-owned EMSBs in London, UK our findings reveal that family and co-ethnic advice and labour do not have a significant impact on firms’ EO. Instead, both access to co-ethnic products and access to co-ethnic suppliers of utilities and facilities have a significant impact on firms’ EO, which in turn has a significant positive effect on employment growth. Moreover, Chinese-owned EMSBs demonstrate a higher level of EO and pursue different paths to growth (that is, they are more likely to grow through acquiring more business premises) compared with Turkish-owned EMSBs. The findings have important implications for the understanding of growth patterns of EMSBs, particularly the role of EO in the EMSBs’ break-out strategies and growth.

Challenges and issues facing ethnic minority small business owners

“…To encourage new entrepreneurs this would suggest that the existing ethnic entrepreneurs needs to be retained, particularly in localities such as Aberdeen where the microsphere is relatively thin. However, Wang and Altinay (2012) find that co-ethnic advice had little impact on entrepreneurial orientation and employment growth. This is associated with the division of ethnic entrepreneurial activities into those described as middleman activities where the minority entrepreneurs supply the majority population with goods they cannot credibly provide themselves (Warde, 2000;Jones-Evans et al, 2011), and those undertaking enclave entrepreneurial activities, serving their own communities with speciality goods and services (Wilson and Portes, 1980).…”

“…Potentially, cost is the main reason for still focusing on co-ethnic labour (Ram et al, 2000), but could mean that the desire for co-ethnic labour is sometimes overplayed (Wang and Altinay, 2012).…”

“…Although studies have suggested that ethnic minority entrepreneurs benefit from the presence of ethnic resources (Ram et al, 2000;Levent et al, 2003;Wilson and Portes, 1980), even when operating outside traditional ethnic enclaves (Zontas, 2012), Wang and Altinay (2012) suggest that it is access to co-ethnic suppliers and projects, which lead to greater entrepreneurial orientation.…”

Empirical Study on Sustainable Opportunities Recognition. A Polyvinyl Chloride (PVC) Joinery Industry Analysis Using Augmented Sustainable Development Process Model

“…Entrepreneurial orientation has been the focus of systematic inquiry in the management literature [91]. Wang and Altinay [92] argue that it consists of three elements: proactivenesss, risk-taking and innovativeness. Proactiveness refers to the extent to which an organization anticipates and acts on future needs by seeking new opportunities, namely organizational ability to introduce new products and services to capitalize on market opportunities.…”

The Importance of Cross-Cultural Capabilities for Chinese Immigrant Entrepreneurs in Australia

“…Immigrant entrepreneurs who leave their home country and move to a new country are usually embedded in two or more cultures, where they may need multiple capabilities in order to adapt and leverage resources for better venture performance. This is particularly the case with immigrant enterprises that tend to be small businesses Collins, 2003;Collins & Low, 2010), or family businesses (Bird & Wennberg, 2016), where the entrepreneur must play multiple roles (Wang & Altinay, 2012) and develop cross-cultural capabilities. This is a challenge for immigrant entrepreneurs if their capabilities are limited (Ndofor & Priem, 2011).…”