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The Profile of Chinese female Entrepreneurs and the Factors of Success

Essay 2014 11 Pages

Business economics - Company formation, Business Plans

Excerpt

Table of Contents

1. Institutional level - A unique environment
1.1. Economic system change and industry restructuring
1.2. Legal and social change
1.3. Individual level – personal characteristics & influence of the eastern culture

2. Chinese female entrepreneurial motivation & perceived barriers
2.1. Evolution of Chinese women’s’ entrepreneurial motivation
2.2. Perceived barriers

Reference list

Chinese female entrepreneurs seem to be aged between 25 and 44 years old. The average age of female entrepreneurs in China is in fact younger than males while their education level is higher (Alon et al., 2011), whereas in the rest of the world, scholars agree that women start their own business later in life compared to men. They emphasize education and knowledge as being key resources to becoming an entrepreneur, they manage to balance their work and family life and their businesses are more service oriented (Shi, 2005). They are also very successful: out of the 20% of Chinese female entrepreneurs, 98% of them are successful (Shi, 2005).

1. Institutionallevel - A unique environment

The level of a country’s entrepreneurial activity can be regarded as being rooted in its institutional environment, such as its economic, socio-cultural and legal structure (Baughn, Chua, and Neupert, 2006). The deep change China has encountered in those fields since the transition period provide it with a unique institutional environment, in which Chinese women have been able to develop their entrepreneurial spirit and decisions.

1.1. Economic system change and industry restructuring

For a long time, the private sector was almost non-existent in China, opposed to the state-owned companies, which were the centre of the economy under the socialist government of Mao Zedong. It became a new area of opportunity since the great economic change and the reforms launched in the 80’s. In 1988, for example, a legal status under the constitution was granted to the private sector. In 1989, the government required the private companies to be registered by the State Administration for Industry & Commerce and 90 581 companies were registered in the same year (Alon et al., 2011). These governmental efforts, especially the Small & Medium Sized Enterprise Promotion Law, fostered a great growth in China and the fast development of the private sector, which became as of 1995 the fastest growing segment in the country (Fung et al., 2006a, b; Gordon et al., 1991). Entrepreneurship was gaining more and more prestige in China, and especially in the technology industry (Jonas, 2014). Between 1993 and 2007, the number of private companies enjoyed a 28,87% annual growth. And in June 2007, no less than 5 205 000 private firms were registered in China, which counts for 59,4% of the total number of companies in the country (State Administration for Industry and commerce of the P.R.C).

The development of the private sector deeply changed the business environment in China for female entrepreneurs and others. Economic reform has not only transformed China into a market-oriented economy where many new opportunities came to light, but has also fostered the entrepreneurial spirit. Thanks to these changing laws in favour of female entrepreneurship and the emergence of new opportunities, Chinese women were encouraged to leave the traditional mind-set and open their own companies (Alon et al., 2011).

Furthermore, China went from being an industry and agricultural society to a “knowledge-based economy”, leading to the increase of the service sector. 45% of the total number of female companies, according to a survey ACWE in 2005, was in the service business (medicine, social service, consulting, insurance, real estate, education, high tech…). This tendency to start companies in the service sector is higher among women then men because of their natural personal traits (Patel, 2000). Women also often enter growing traditional industries with lower technological barriers to entry, where they already have acquired some knowledge like the textiles industry (Alon et al., 2011).

This unique economical environment developed opportunities for Chinese women to start their own company, thus fostering their entrepreneurial motivation.

1.2. Legal and social change

Years ago, Chinese women were not allowed to work and were supposed to stay home to take care of their children and attend to the house shores. They were not expected to take initiatives or to be creative. Actually, those personality traits were not even promoted, especially in the important Confucian values directing the Chinese society. Women suffered strong gender discrimination and had no place in the political and economical sphere, consequently there were very few female entrepreneurs, and at least, they wouldn’t even think of having the idea or the motivation (Alon et al., 2011). As of 1949 though, when the People’s Republic of China was founded, legal, administrative and educational laws and measures allowed women to participate in the social system. Chinese women have been gaining more and more liberty, and playing an increasing role in the global economy (Orlova, 2004).

Entrepreneurship used to be regarded as a manly occupation, especially in the Chinese society. However, since the change in status of Chinese women, their entrepreneurial activity has been growing: according to the 2002 GEM, the TEA (Total Entrepreneurial Activity) of Chinese women is the 6th highest in the world. More surprisingly, between 2008 and 2012 their participation increased by 7%, whereas the proportion of men entrepreneurs decreased (Cheraghi, 2013). In fact, the number is tending towards equality with men’s one (Cheraghi, 2013). Thanks to the laws and regulations implemented, Chinese organizations, in the 90’s, offered greater gender equality than countries like Japan or the UK (Alon et al., 2011).

Moreover, since women have been offered full access to education, their entrepreneurial capabilities have been impacted positively, meaning that there exists a significant relationship between education and career intention for becoming an entrepreneur (Wilson et al., 2007; Autio et al., 1997). 45% of women entrepreneurs in China have education and foreign language skills (Shi, 2005).

At last, the existence of social organizations is an important factor for women’s entrepreneurial motivation. Knowing they are not alone and can have access to support, information, consulting, skills and capital to help them develop their business idea can be determinant in their idea of starting their own venture (Alon et al., 2011). The All-China Women’s Federation and the Association of Chinese Women Entrepreneurs lead all these organizations, created during the legal and social changes occurring in the 80’s in China. The Tianjin Women Entrepreneurs Center for example is considered as being a powerful Chinese female incubator (Alon et al., 2011).

1.3. Individual level – personal characteristics & influence of the eastern culture

Eastern cultural values and inherent personal characteristics of Chinese women have a big impact on the entrepreneurial behaviour of Chinese women (Alon et al., 2011).

Determining the human characteristics common to Chinese female entrepreneurs in the aim of drawing some trends is important as entrepreneurial motivations and decisions are highly related to an individual’s characteristics, especially in the early stages of development (Moore, 1990). However, it’s quite difficult as they vary greatly among women, which is why scholars have identified different personality traits in their research. Most have highlighted the importance and value of hard work and having the sense of potential opportunities. Indeed, all women entrepreneurs work at least 8 hours a day, and 50% of them work more than 10 hours a day. (Alon et al., 2011; Chu et al., 2011) Although they work a lot, women are self satisfied of their capacities and are confident in their work (Shi, 2005). Reputation for honesty, thinking through the customer service in the best way possible, having good managerial kills, a strong network named “guanxi”, and a good dose of business instinct are some other features and qualities that have been noted (Chu et al.,2011).

The Chinese culture and background has always had a profound impact on the Chinese society and the identity of its people, as well as on the entrepreneurial motivation and behaviour of women (Patel, 2000). Their core values are unique and consistent, shaped by a tradition of four thousand years of history and maintained by the same language. This cultural value system is uniquely Chinese and distinguishes itself not only from Western cultures, but also from other Eastern cultures (for example, Japanese culture).

Hofstede et al. (1988), distinguished four major eastern cultural values:

- Integration, which relates to moral values like tolerance, cooperation and dedication
- Confucian dynamism, which is expressed through persistence, thrift and self-respect
- Human heartedness, which also relates to gentleness, compassion, kindness and patience
- Moral discipline, which encompass personality traits like adaptability, prudence, moderation

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Details

Pages
11
Year
2014
ISBN (eBook)
9783668285064
File size
563 KB
Language
English
Catalog Number
v281677
Institution / College
Tongji University
Grade
16
Tags
profile chinese entrepreneurs factors success

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Title: The Profile of Chinese female Entrepreneurs and the Factors of Success