The influence of culture in entrepreneurs’ opportunity exploitation decision in Tanzania

• Published in: Journal of entrepreneurship in emerging economies 2019-03, Vol.11 (1), p.22-43
• Main Authors: Liu, Jia, Pacho, Frida Thomas, Xuhui, Wang
• Format: Article
• Language: English
• Subjects: Behavior; Cities; Culture; Decision making; Discriminant analysis; Entrepreneurs; Entrepreneurship; Exploitation; Generalizability; Hypotheses; Hypothesis testing; Individualism; Innovations; Mediation; Mediators; Policy making; Power; Questionnaires; Religion; Risk behavior; Risk factors; Risk taking; Society; Uncertainty; Ventures
• ISSN: 2053-4604; 2053-4612
• DOI: 10.1108/JEEE-02-2017-0014

Purpose The purpose of this paper is to empirically explore the impact of culture (using individualism, power distance and uncertainty avoidance) on entrepreneurial risk taking behavior which leads to the opportunity exploitation decision. Moreover, it also uses risk taking behavior of entrepreneurial as the mediation variable between culture and opportunity exploitations decisions. Design/methodology/approach The study took place in Tanzania, which is allocated in East Africa and is one of under researched countries. In total, 140 entrepreneurs who own venture of 5-99 employees were able to be interviewed using a survey questionnaire. In this study, structural equation modeling (SEM) was used to examine the direct and indirect relationship of culture in entrepreneurial opportunity exploitation decisions. Findings After hypothesis testing, the empirical results showed that Tanzania’s culture has an impact on entrepreneurial risk taking behavior, which influences entrepreneurial opportunity exploitation decision. It also showed culture through individualism and uncertainty avoidance measurements affect entrepreneurial opportunity exploitation decisions. The empirical results on power distance were insignificant. Research limitations/implications This study is a wake-up call to policy makers and formal institutions such as government authorities, education institutions and religion institutions. Thus, culture has an ability to influence the behavior of entrepreneurs and so the performance of ventures if it is consistent and well structured. Therefore it should be not taken for granted. Data for our study are based on only two cities and therefore the results should not be generalized as the whole country’s inference. Generalizability is questioned because the data are from only two cities in Tanzania and therefore future research should include more cities to be able to validate the generalizability. Practical implications This study is a wake-up call to policymakers and formal institutions such as government authorities, education institutions and religion institutions. Thus culture has an ability to influence the behavior of entrepreneurs and so the performance of ventures if it is consistent and well structured. Therefore it should be not taken for granted. Data for our study are based on only two cities and therefore the results should not be generalized as the whole country’s inference. Social implications In the country which has well-structured cultur