Indigenous Entrepreneurship

I knew there was something wrong when the then director of the Kenya Institute of Management co-published an article claiming that ‘African’ culture was not conducive to entrepreneurship. I wrote in 2008:

Although some authors have argued that ‘African’ culture is not conducive to entrepreneurship (e.g. Dondo & Ngumo, 1998), this appears to belie the evidence. Dondo and Ngumo (1998) appear to impose a Western view of entrepreneurship when they examine the barriers of African cultural and societal characteristics to entrepreneurship in Kenya. They see entrepreneurship as a highly individualistic, wealth seeking activity, rather than a community-based activity. Hence, they see communal and collective values as a barrier because these encourage conformist behaviour and discourage individualistic wealth creation

I met him. He was definitely African, living in Nairobi and must have noticed the many markets, the craftsmanship, the many goods on sale, the entrepreneurial spirit of Africa. I think this is about the time I turned to Postcolonial Theory for some kind of explanation: the acceptance and internalisation of the West’s view of the colonisers by the colonised.

In an article in The Conversation Ademola Adenle makes an interesting point about the Young African Leaders Initiative established under the Obama administration, and now called the Mandela Washington Fellowship that is parachuted into Africa by USAID. Although having good intentions, it really misses the mark. Intended to develop the next generation of African leaders and entrepreneurs, it has a weak understanding of ‘the local context in which entrepreneurs have to function’, and ‘participation of key stakeholders, such as governments and the private sector, is limited’. In Adenle’s survey of this program, participants ‘questioned the limited understanding of local context of American instructors and training providers’ and a few ‘suggested that some professors focused too much on issues that are irrelevant to Africa’; that it essentially ‘neglected decades of experience and research in Africa’. USAID has channelled $10 million into this program.

The whole area of entrepreneurship studies is growing, with a number of good academic journals devoted to the study. It seems that this is another area that cross-cultural scholars should be sticking their critical noses into. But not just that. I think cross-cultural scholars can learn an awful lot by studying this areas in a critical fashion. Not least because if they don’t they are missing a big chunk of social reality out. One that is important to understanding alternative social and cultural contexts.

The vision of the self-made man (yes, normally a man), individualist, go-getter, achievement-oriented, self-motivated, appearing in front of Sir Alan Sugar/Donald Trump in The Apprentice just doesn’t stack up for those indigenous populations that Peredo and McLean (2010) suggest occupy around 20 per cent of the world’s landmass.

Despite the huge diversity across this population in terms of governance, family organization, sexual roles, work and recreational values and religion, these authors identify from the wider literature three generally held features of indigenous cultures relevant to entrepreneurial activity:

1. A collective or communal societal orientation;
2. Kin-based forms of social organization; and,
3. Employing forms of exchange more for social and cultural purposes rather than purely for personal material gain.

These are often inter-related, where community-oriented societal relations are more likely to engender a view by community members that their ‘status and well-being is a function of the reciprocated contributions they make to their community’ (Peredo & Chrisman, 2006: 313). The collective nature of indigenous societies is often based on kinship, forming the basis of governance and decision-making structures, as well as the social and economic structures of production, distribution and consumption (Peredo and McLean, 2010). Within this, trading and entrepreneurship are often based not on market needs, but on kinship ties (Dana and Anderson, 2006). This leads to Peredo and McLean’s (2010) third feature of indigenous societies, that of forms of exchange being based in social purposes. They quote Berkes and Adhikari (2006: 11) from their study of indigenous businesses in Central America in saying:

‘The individual profit motive no doubt exists but it seems to be subordinate to meeting community needs and objectives. The social role of many of these enterprises are apparent in terms of providing local employment, making use of talents and resources locally available, and sharing profits among community members.’

Peredo and McLean (2010) cite other studies in South Africa, Hawaii, and the Andes that suggest that the emphasis in these communities is not on wealth creation, but where economic goals are channeled towards social and community ends.

So, why should indigenous entrepreneurship be important to cross-cultural management scholarship? The simple answer is that cross-cultural scholars have an important role to play in disabusing the assumptions found in such work as that of Dondo and Ngumo (1998) and for overcoming the serious weaknesses of such programs as the Mandela Washington Fellowship. The more expansive answer is that a serious study of indigeneity is sadly missing from cross-cultural management studies as I’ve alluded to before: mostly indigenous management, for example in Africa, in the informal economy comprising entrepreneurial activity connected to local communities in the manner suggested by the studies cited above, where often the entrepreneur will be a woman.

I’ve already discussed the concept of indigeneity elsewhere, but I’m still troubled by the apparent closing off of this discussion even by scholars like Linda Tuhiwai Smith (1999: 7) whose scholarship appears based on ‘a recovery of ourselves’ on the assumption that ‘indigenous peoples represent the unfinished business of decolonization’, looking at this through the somewhat confining lens in this instance of Postcolonial Theory. Similarly, legal definitions based often on self-identification and on collective rights (Escarcega, 2010) being recovered from colonial incursions by their nature restrict the concept of indigeneity. This largely confines the study of indigenous people to the province of anthropology and human rights law. I think it needs to be more open, more in the mainsteam, and certainly an integral part of international and cross-cultural management studies.

The essentialist ‘freezing’ of culture in time and place leads to the marginalization of indigeneity as described above. A more constructive approach may be the one suggested by Novo (2003: 265) in analyzing culture ‘as a set of discourses, images, and ideas that emerge in the context of particular social struggles and political-economic processes’. Culture is an ongoing process (as well as an outcome – but continually changing and feeding into the process which is also changing), and this is the same for indigenous culture, the main site of study for management scholars being in entrepreneurial activity. So, back where we started from.

Serious study of indigenous entrepreneurship, from a cross-cultural perspective and integrated into mainstream cross-cultural management scholarship as an important stream of knowledge, will not just make up a deficit in scholarly work, but will also contribute to stopping international developers parachuting in irrelevant knowledge and practice.