Impact of Religiosity on Entrepreneurial Success 

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           It is unanimously established that the enviable rate of fiscal intensification calls for hasty emergence of a multitude of enterprises in all walks of life. This requires the creation and maintenance of an environment that is conducive to sustainable growth of existing enterprises and would help to build up a wider base of population capable of successful entrepreneurial behaviour. Entrepreneurship is an old but living concept. The essence of entrepreneurship is the creation of new enterprises through innovation of value based product and services. Entrepreneurs virtually give birth of new enterprises. In recent times, the concept of culture of entrepreneurship has received prominence and social scientists have observed that an entrepreneur is a product of the socio-cultural milieu.

            Many economists now discuss the role of non-economic factors in economic growth, including concepts developed in Sociology and Psychology (Lipset, 20001). In the above context, a thesis suggested by Weber (1958)2 are that: Given the economic conditions for the emergence of a system of rational capital accumulation, whether or not such growth occurred in a systematic fashion would be determined by the values present. Structural conditions make development possible, while cultural factors determine whether the possibility becomes an actuality (Lipset, 20003). This means that a suitable socio-cultural environment is an important prerequisite for industrial or economic escalation of any region in particular and the country in general. The event of enterprise creation, the essential activity in entrepreneurship, can therefore, be seen as a consequence of congruence between environmental conditions and the entrepreneurial behaviour of individuals determined by their socio-cultural background. 

            Inspired by Weber's (1958)4 proposition that religion, norms and values, behavior, and economic development are all interconnected; a number of experts reported their views on this relationship. Mclelland (1961)5, Berna (1960)6, and Fox (1969)7 have also related economic progress with culture. They tried to explain the economic backwardness of India by linking it with the Indian culture. Some of these scholars argued that the spirit of enterprise was inhibited among the indigenous population of India by the religious philosophy of resignation embodied in the doctrine of karma. In India, there is an old saying that the Religion is the heart of this heartless world.

            In the word of Tripathi (1992)8, the Indian personality, by and large, remained 'un-entrepreneurial', if not 'anti-entrepreneurial'. In view of McClelland and Winter (1969)9, Indians lacked in Achievement Motivation due to the socio-cultural influences on them. On the contrary, a few other scholars like Saberwal (1976)10, Chadha (1986)11, Streefkerk (1985)12 have rejected Weber's thesis. They were of the opinion that structural conditions and not the cultural conditions determine whether entrepreneurship will flourish in a society or not. Therefore, as presented in the above discussion different researchers have arrived at contradictory conclusions regarding the role of socio-cultural factors in supporting and promoting entrepreneurship, particularly in India. At the same time empirical evidence regarding the role and the scope for structural interventions for influencing the socio-cultural factors for promotion of entrepreneurship is also inadequate and therefore inconclusive as well.

            However, it cannot be denied that there is growing need in this country to create and maintain an appropriate environment that is favourable to growth of existing enterprises and would help build up a wider base of population capable of successful entrepreneurial behaviour. Against this backdrop it would be meaningful to empirically examine the possible links between growth of entrepreneurship and Religiosity, a vital socio-cultural factor.

            It is common knowledge that the proportion of women in the entrepreneur population of India is miniscule. In this context it would be relevant to find out whether there are any differences between Indian male and female entrepreneurs with respect to the levels of success achieved by them. In case if any differences are observed; it would be interesting to find out whether these differences are due to socio-cultural factor, particularly the religiosity. 

OBJECTIVES AND SIGNIFICANCE OF THE STUDY

            The pattern of economic development of advanced Industrial Society suggests that the entrepreneurs, particularly, small enterprises owned by small entrepreneurs play a dominant role in the national fiscal growth, e.g. successful small businesses are critical in maintaining a robust U.S. economy. The statistical figures almost speak for themselves (Barreto, 200213):

99% of all American businesses are small;

Small businesses provide approximately 75% of the net new jobs added to the U.S economy every year;

Small businesses represent 99.7% of all employers;

Small businesses employ 50.1% of the private workforce;

Small businesses provide 40.9% of private sales in the country.

            In a labour-abundant and capital-scarce country like India, Small Scale Industries (SSIs) owned by small entrepreneurs have a very important role to play. In India, the Industrial Policy Resolution of 1956 favoured this sector with three arguments, viz., i] the employment argument (i.e., it helps in equitable distribution of income and wealth among the people), ii] the latent resource argument (i.e., the small entrepreneurs are able to tap latent resources like entrepreneurial ability, hoarded wealth, etc.) and iii] the decentralization argument (i.e., the dispersal of industries throughout the country helps in tapping local resources, avoiding unemployment, avoids the problem of environment pollution in towns and big cities). These arguments in favour of the SSI sector increased the responsibility of the government, banks and financial institutions in financing and promoting this sector. To achieve this cherished goal, the government started the process with clear-cut industrial policies and established many entrepreneurship development institutions and advisory bodies. The commercial banks are also started sponsoring the budding entrepreneurs. But statistics reveals that the entrepreneurial success rate is very much disappointing. In a study on Entrepreneurship Development Programmes in North Eastern States of India, it has been observed that the success rate in Tripura is only 13.2%; which is lowest among the North Eastern States (Mali, 199914).

           Looking at the various problems faced by small entrepreneurs like delay in loan sanction and disbursement, inadequate credit, sickness creeping in and severe competition from multinationals and large industries, various studies were conducted that focused mainly on the impact of government programmes, factors affecting entrepreneurial growth and roles of banks, financing and promotional institutions in the entrepreneurship development. However, there is a dearth of a comprehensive study on the impact of religiosity on entrepreneurial success. The present work is an attempt to fill this gap.

           Against this milieu an empirical study has been conducted on the randomly selected sample entrepreneurs of Tripura, a tiny north-eastern state of India with a view to observing the impact of religiosity on entrepreneurial success. Although the empirical study has been conducted in the state of Tripura, its findings may have equal relevance to the other parts of India in particular and the other countries of the world in general.  

METHODOLOGY

              The present study is a new of its kind. It attempts to examine the impact of religiosity on entrepreneurial success. The information essentially required for conducting such study is not readily available. As such, the present study heavily relies upon primary information collected through empirical approach. However, for contextualizing the problem to be investigated as well as determining the size of the population to be covered and framing the sample of the study there from to be investigated, a good number of secondary information such as the list of entrepreneurs, their addresses and other relevant information have been required and all those information have been collected from the District Industry Centers (DICs) of Tripura.

              For the purpose of framing sample, 120 entrepreneurs were randomly selected from the length and breadth of Tripura who have run their enterprises at least 5 years as on 31.03.2009. The sample consists of 80 Male entrepreneurs and 40 Female entrepreneurs. The primary information so required for the present study has been collected from the randomly selected entrepreneurs with the help of a semi-structured mailed questionnaire. In case of any doubt in the primary information so collected, clarification has been made over telephone and/ or through direct interview.

           Several measurement scales have been used to appraise the qualitative parameters of the study undertaken. The designs of the scales are based on review of relevant literature. The scales are described in the relevant places of the present paper.

SUCCESS OF THE ENTREPRENEUR

            Entrepreneurial success may be defined in different ways. Comparison of the levels of success achieved by entrepreneurs is a difficult task. One may use some quantified performance indicators like financial performance, awards won or intangible measures like happiness, satisfaction etc. that may be difficult to quantify.  On review of scales used for measurement of entrepreneurial success by various Indian researchers (Akhouri, 197915; Rao, 198616; Kumar, 199017), a set of 3 (three) key variables has been selected for measurement of success of the respondents of this study. These variables are: i] Net Profit (average of last 5 years), ii] Turnover growth rate (average of last 5 years) and iii] Diversification level of their enterprises.

             Net Profit and Turnover growth were used in almost all the above-mentioned scales and these are variables that are a function of some of the other measures like labour productivity, raw material productivity, etc. used in the scales referred above. Diversification level was included along with the other two financial variables because measurement of entrepreneurial success would remain incomplete without a measurement of the amount of innovation and risk taking exhibited by the entrepreneur, as these are two important characteristic features of entrepreneurship. This is as per a very widely accepted definition of the term 'Entrepreneur', given by Hisrich & Brush (1986)18. "Entrepreneur is a person who creates something different with value by devoting the necessary time and effort, assuming the accompanying financial, psychic and social risks, and receiving the resulting rewards of monetary and personal satisfaction".  Diversification decision of the entrepreneur is a suitable indicator of innovativeness and risk taking propensity of the entrepreneur.

            The findings regarding comparative levels of Net Profit, Turnover Growth and Diversification level achieved by the respondents is presented in Table 1, 2 and 3. Male respondents have managed to earn relatively higher levels of profit and Turnover Growth as compared to the female respondents. There is no significant difference in the level of diversification achieved by the two groups. As presented in Table - 4, there is some difference between the male and female respondents regarding their extent of overall Success in entrepreneurial venturing. Male entrepreneurs have been found to be more successful among the respondents. Hence, it may be inferred that entrepreneurial performance can be differentiated on the basis of gender.

            The reasons for this difference may be due to differences in the Socio-cultural attributes (e.g. Religiosity, Caste, Family support, Education, etc.) of the two sets of respondents, differences in their entrepreneurial traits or because of differences in access to infrastructure support for male and female respondents. However, in the present paper, the empirical study has been confined to the analysis of impact of Religiosity on entrepreneurial success among male and female entrepreneurs of Tripura.

Measurement of Success 

            The scale for Measurement of success was based on a study of scales used by S. Ashok Kumar (1990)19, Akhouri (1979)20, and Rao (1986)21. For measurement of success, three parameters were used:

            (a) Average percentage of net Profit per annum achieved during the last five years

            (b) Rate of Growth of Turnover during the last five years

(c) Level of Diversification (Diversification level was included along with the other two financial variables because entrepreneurial success is reflected by the amount of innovation and risk taking exhibited by the entrepreneur, as these are two important characteristic features of entrepreneurship).

            The performance of the unit of each respondent was rated on each of these variables on a 3- point scale as described below. A group of academicians having expertise in the field of Commerce, Business Management, Economics, and Statistics was consulted for deciding the cut offs for the different levels in the scales.

Profit - Information regarding Average percentage of Net profit per annum achieved during the last 5 years was obtained from each respondent. Scores were assigned to each entrepreneur as follows:

      Above 25 % - High - 3 points

             15% - 25% - Medium - 2 points

             Less than 15% - Low - 1 point    

Turnover - Information regarding Average rate of growth of Turnover achieved during the last 5 years was obtained through the mailed questionnaire. Scores were assigned to each entrepreneur as follows:

  Above 15 % - High - 3 points

             5% - 15 % - Medium - 2 points

             Less than 5% - Low - 1 point  

Diversification - Information regarding Number of diversifications made during the last 5 years was obtained through the said mailed questionnaire. Scores were assigned to each entrepreneur as follows:

            1 every year - High - 3 points

      1 every 2 years - Medium - 2 points

             1 every 3 years or more or no diversification at all - Low - 1 point

               So, the total scores were ranging from 3-9. Respondents were categorized as having Low, Medium & High level of success for scores ranging from 3 - 4, 5 - 7, 8 - 9 respectively. 

Table - 1

 

 

 

 

 

 

 

 

NET PROFIT

 

 

 

 

 

 

 

N=120

Gender

High

%age

Medium

%age

Low

%age

Total

Males

37

46.25

29

36.25

14

17.50

80

Females

17

42.50

13

32.50

10

25.00

40

Total

54

45.00

42

35.00

24

20.00

120

   Source: Compiled personally from responses received via mail questionnaires and direct interview 

Fig. 1: Comparative Status of Male and Female Entrepreneurs w.r.t. Net Profit 

 

 

 

Table - 2

 

 

 

 

 

 

 

 

TURNOVER GROWTH

 

 

 

 

 

 

 

N=120

Gender

High

%age

Medium

%age

Low

%age

Total

Males

41

51.25

24

30.00

15

18.75

80

Females

16

40.00

11

27.50

13

32.50

40

Total

57

47.50

35

29.17

28

23.33

120

   Source: Compiled personally from responses received via mail questionnaires and direct interview

Fig. 2: Comparative Status of Male and Female Entrepreneurs w.r.t. Turnover Growth

Table - 3

 

 

 

 

 

 

 

 

   LEVEL OF DIVERSIFICATION

 

 

 

 

 

 

 

N=120

Gender

High

%age

Medium

%age

Low

%age

Total

Males

20

25.00

28

35.00

32

40.00

80

Females

11

27.50

13

32.50

16

40.00

40

Total

31

25.83

41

34.17

48

40.00

120

   Source: Compiled personally from responses received via mail questionnaires and direct interview

Fig. 3: Comparative Status of Male and Female Entrepreneurs w.r.t. Level of Diversification

Table - 4

 

 

 

 

 

 

 

 

GENDER-WISE OVERALL SUCCESS IN ENTREPRENEURIAL VENTURING

 

 

 

 

 

 

 

N=120

Gender

Very Successful

%age

Successful

%age

Less Successful

%age

Total

Males

33

41.25

27

33.75

20

25.00

80

Females

15

37.50

12

30.00

13

32.50

40

Total

48

40.00

39

32.50

33

27.50

120

   Source: Compiled personally from responses received via mail questionnaires and direct interview 

Fig. 4: Comparative Status of Male and Female Entrepreneurs w.r.t. Overall Success in Entrepreneurship

Innovativeness

            The concept of innovation and newness is an integral part of entrepreneurship. It was Schumpeter who associated innovativeness with entrepreneurship for the first time. According to him Innovativeness involves doing something new. The newness can consist of anything from a new product to a new distribution system to developing a new organizational structure (Schumpeter, 193422).

            There is a lot of disagreement regarding the definition of innovation. Kirzner suggests that the process of innovation is actually that of spontaneous "undeliberate learning" (Kirzner, 198523). Thus, the necessary characteristic of an entrepreneur is alertness, and no intrinsic skills-other than that of recognizing opportunities, are necessary. Other economists of the innovation school claim that entrepreneurs have special skills that enable them to participate in the process of innovation. Leighton claims that the dominant, necessary characteristic of entrepreneurs is that they are gap-fillers: they have the ability to perceive where the market fails and to develop new goods or processes that the market demands but which are not currently being supplied. (Leighton, 196624)

            Peter Drucker referred to the process of innovation as it occurs in developed countries as, "creative imitation of innovations made in the developed countries." The term appears initially paradoxical; however, it is quite descriptive of the process of innovation that actually occurs in the developing nations. Creative imitation takes place when the imitators better understand how an innovation can be applied, used, or sold in their particular market niche (namely their own countries) than do the people who actually created or discovered the original innovation (Drucker, 198525).

            In the context of the present study, the innovativeness of the respondents was measured using a scale consisting of six indicators as detailed below. The innovativeness level was categorized as high, medium and low. Table - 5 presents the Gender wise distribution of the respondents in the 3 categories of innovativeness levels.

             From the Figure - 5 one can observe that a very low 18.75% and 20% each of male and female respondents are highly innovative. Perhaps, this is one of the reasons that why Indians are less successful in entrepreneurship.

            Most of the respondents are showing their trait of innovativeness by locating new ways to market their products either by identifying a new market away from the state or by identifying new types of channels. Some of the respondents identified new sources of raw materials, new ways of motivating their employees and new ways of keeping records. Innovations in the form of developing new innovative products or new ways of manufacturing or offering new kind of service were very few.

Measurement of Innovativeness

            A set of 6 indicators was used to assess the level of innovativeness of the respondents. Information on these indicators was obtained with the help of the following questions (through mailed questionnaire). In case of any doubt in the information so collected, clarification has been made over telephone and/ or through direct interview.

Questions:

During the last 5 years………………………

1. Did you find new market/ new buyers?          Yes/ No

     If Yes, Please give details…………………..

2. Did you adopt any new ways to manage the enterprise?               Yes/ No

      If Yes, Please give details…………………..

3. Did you locate any new sources for supply of raw materials?    Yes/ No

      If Yes, Please give details………………….

4. Did you establish any new channels of distribution?          Yes/ No

      If Yes, Please give details………………….

5. Did you adopt any new technology method for manufacturing/ offering service/ trading?  Yes/ No

     If Yes, Please give details…………………..

6. Did you launch/ produce a new product or service for an existing market?  Yes/ No

If Yes, Please give details…………………..

            Each 'Yes' answer to questions 1 - 6 was given 1 point.  The scores were ranging from 0 - 6.  Again a three level scale was used for measurement of Innovativeness. The respondents were assigned to different levels depending upon their scores as follows:

      0 - 2: Low, 3 - 4: Medium, 5 - 6: High

Table - 5

INNOVATIVENESS

N=120

 

High

%age

Moderate

%age

Low

%age

Total

Males

15

18.75

39

48.75

26

32.50

80

Females

8

20.00

15

37.50

17

42.50

40

Total

23

19.17

54

45.00

43

35.83

120

 

Fig. 5: Comparative Status of Male and Female Entrepreneurs w.r.t. Innovativeness 

Risk Taking Propensity:

            Taking decisions and acting on an uncertainty is understood as a risk-taking activity. Risk taking propensity is undoubtedly the most widely discussed entrepreneurial trait. Although it has not been empirically established that Risk taking is a distinguishing characteristic of entrepreneurs, there is almost universal agreement on the fact that it is an essential trait found among entrepreneurs all over the globe. (Hisrich & Peters, 199826).

            Risk taking, whether financial, social, or psychological, is an integral part of the entrepreneurial process. All recent definitions of entrepreneurship mention a risk-taking component. Cantillon, who was the first to formally define the term 'Entrepreneur', explained that the entrepreneur is a specialist in taking on risk. He "insures" workers by buying their products (or their labour services) for resale before consumers have indicated how much they are willing to pay for them. The workers receive an assured income (in the short run, at least), while the entrepreneur bears the risk caused by price fluctuations in consumer markets (Cantillon, 175527).

             The U.S. economist Frank H. Knight refined this idea. To Knight, "entrepreneurs bear the responsibility and the consequences of making decisions under conditions of uncertainty, that is, where the uniqueness of the situation denies an objective, qualitatively determinate probability"(Knight, 192128). He distinguished between risk, which is insurable, and uncertainty, which is not. Risk relates to recurring events whose relative frequency is known from past experience, while uncertainty relates to unique events whose probability can only be subjectively estimated. Changes affecting the marketing of consumer products generally fall in the uncertainty category. Individual tastes, for example, are affected by group culture, which, in turn, depends on fashion trends that are essentially unique. Insurance companies exploit the law of large numbers to reduce the overall burden of risks by "pooling" them. For instance, no one knows whether any individual, forty-year-old, will die in the very next year. But insurance companies do know with relative certainty how many forty-year-olds in a large group will die within a year. Armed with this knowledge, they know what price to charge for their life insurance, but they cannot do the same when it comes to uncertainties. Knight observed that while the entrepreneur can "lay off" risks much like insurance companies do, he is left to bear the uncertainties himself. He is content to do this because his profit compensates him for the psychological cost involved.

            In the present study to measure risk-taking propensity of respondents the Risk Attitudes Inventory designed by Gene Calvert (1993)29 was used. Along with Kogan-Wallach CDQ and Jackson Personality Inventory (JPI) this is another popular tool for measuring Risk Taking Propensity. The maximum Score was 15.  The higher the total score the more is the Risk taking Propensity. Therefore, all those who scored from 0 - 5 were categorized as having Low Risk taking propensity, those with scores between 6 - 10 as having moderate Risk taking Ability and those with 11 - 15 as High Risk Taking propensity.

            The Risk Taking Propensity of the Respondents is presented in the Table - 6. Overall it is observed that the major proportion of respondents (50.83%) have low level of Risk Taking propensity. The Female respondents are much more rigid in taking risk. This suggests that people in this region do not like to take high levels of risks for their ventures. Probably, this is the reason why the entrepreneurial profession is not a much sought after one among people of this region.

            It was observed that the majority of the respondents are engaged in Non-manufacturing types of enterprises which signifies that the preference of the respondents of this study for Non-Manufacturing types of enterprises is because of low level of risk Taking Propensity among them because non-manufacturing businesses are perceived to be less risky as they require lower initial outlay and have shorter breakeven period.

            The above observation regarding preference for Non-manufacturing businesses is consistent with the findings of a few other studies conducted in various other regions of the country. Some of these researchers have explained the reasons for this observation by linking it with the traditional approach of the Indian businessmen towards trade and commerce. A debate has ensued among researchers regarding the preference of Indian entrepreneurs for manufacturing or non-manufacturing type of enterprises. For example, According to Mario Rutten, studies conducted on Indian entrepreneurs emphasized the specific commercial style of Indian traders, which was said to stand in their way of establishing modern businesses. These studies argued that Indian moneylenders and traders consider the production process to be something fixed and static and are not prepared to invest more than the absolute minimum amount of capital in installations and machines. This preference for rapid profits closely parallels the traditional Vaishya ethic. (Rutten, 200230).

            James Berna, argued that Indian entrepreneurs with a background in trade are opportunistic businessmen with very short time horizons, interested only in fast turnover and quick profits, completely unconcerned with technology, unwilling to invest more than the bare minimum in fixed capital, and still preoccupied far more with trade than with industry (Berna, 196031).  This was also expressed by Leighton Hazlehurst , who concluded, on the basis of research among Banias in a Punjab town, that rural traders invested their capital in productive enterprises only very reluctantly (Hazlehurst, 196632).  Again Richard Fox, who studied Banias in another small North Indian town, also argued that these businessmen were more willing to accept smaller profits as long as they covered essential expenses, rather than to invest in more profitable long-term enterprises in which they risked losing their investment (Fox, 196933).

            At the same time Rutten also states that some studies done in the 70s and 80s (e.g. veen, 197634) argued that this short-term commercial orientation of Indian entrepreneurs does not have social origin. Rather, it was a response to structural factors such as imperfect markets or lack of an adequate institutional framework. These authors argued that, if the commercial climate is favorable -- that is, there is an availability of market incentives, governmental support, and sufficient banking and transport facilities -- industrial entrepreneurship is bound to develop.  In this approach the development of entrepreneurship -- that is, the employment of capital and other productive means for industrial production -- was placed in a broader political and economic frame.

            There is evidence of Indians, both males and females, setting up a host of manufacturing enterprises wherever structural factors favored such businesses. To a large extent this is true for the states of Delhi, Punjab and Gujarat that are a few relatively more industrially advanced states of India. This is shown in the study by G.K. Chadha, who described how artisans comprising blacksmiths, masons, and carpenters turned into good engineers who played a vital role in the regeneration of the agro-industry in Punjab. They set up small industrial workshops, many of which in due course grew into full-fledged industrial enterprises (Chadha, 198635).  In his study on small-scale industrialists in two small Gujarat towns, Hein Streefkerk also showed that artisan caste members, namely carpenters and blacksmiths, were the first to become actively involved in the transition to industrial production (Streefkerk, 198536). Satish Saberwal described in detail, how after 1930, carpenters and blacksmiths in a city of Punjab worked their way up to become industrial entrepreneurs (Saberwal, 197637).

Measurement of Risk Taking propensity

            For Measurement of Risk Taking propensity an instrument called Risk Attitude Inventory, designed by Gene Calvert (1993)38 was used. Along with Kogan-Wallach CDQ, this is another popular tool for measuring Risk Taking Propensity. This tool consists of a set of statements as presented below:

Answer Agree/Disagree

Taking management risks makes good sense only in the absence of acceptable alternatives.

I generally prefer stimulation to security.

I have confidence on my ability to recover from my mistakes no matter how big.

I would promote someone with unlimited potential but limited experience to a key position over someone with limited potential but more experience.

Anything worth doing is worth doing less than perfectly.

I believe that opportunity generally knocks only once.

It is better to ask for permission than to ask for forgiveness

Success in management is as much a matter of luck as ability

I would choose a three thousand rupees annual raise over a ten thousand rupees bonus, when I had about a one-in-three chance of winning the bonus.

I can handle big losses and disappointments with little difficulty.

If forced to choose between them, I would take safety over achievement.

Failure is the long road to management success.

I tolerate ambiguity and unpredictability well.

I would rather feel intense disappointment than intense regret.

When facing a decision with uncertain consequences, my potential losses are my greatest concern.

Scoring:

One point for each of the following questions on which the respondent Agrees

2, 3, 4, 5, 10, 13, 14

One point for each of the following questions on which the respondent Disagrees

1, 6, 7, 8, 9, 11, 12, 15

            The scale that was used for measurement of Risk taking Propensity consisted of three levels - Low, Medium and High. The maximum possible score is 15. The respondents were assigned to the three levels as follows:

      0 - 5: Low, 6 - 10: Medium, 11 - 15: High

Table - 6

RISK TAKING PROPENSITY

N=120

 

High

%age

Moderate

%age

Low

%age

Total

Males

15

18.75

29

36.25

36

45.00

80

Females

6

15.00

9

22.50

25

62.50

40

Total

21

17.50

38

31.67

61

50.83

120

 

Fig. 6: Comparative Status of Male and Female Entrepreneurs w.r.t. Risk Taking Propensity

RELIGIOSITY 

            Religion is an integral part of a cultural system. It is important because it promotes social solidarity and reinforces social norms and values. Religion makes people share common beliefs and thus a common value system.

            Religiosity, in its broadest sense, is a comprehensive sociological term used to refer to the numerous aspects of religious activity, dedication, and belief (religious doctrine) and in its narrowest sense, religiosity deals more with how religious a person is, and less with how a person is religious (in terms of practicing certain rituals, retelling certain myths, revering certain symbols, or accepting certain doctrines about deities and afterlife).

            It is widely held by some western observers like Max Weber (1958)39 that India's spiritualism, philosophy of renunciation; fatalism and asceticism constitute insurmountable obstacles to material progress of the country (Singer, 195640). Following this analysis of Weber a few other researchers like Dwijendra Tripathi, 199241, have also argued that, because of the religious philosophy of resignation embodied in the doctrine of 'Karma' and the rigid social organization of the caste system the Indian personality remained largely un-entrepreneurial if not anti-entrepreneurial. Similarly, McClelland was of the opinion that the presence of a specific motivational structure, the desire to achieve purely for the sake of achievement -- i.e. the `achievement motivation' -- is of critical importance to successful entrepreneurship and he said that Indian artisans lacked entrepreneurial values and motives, a conclusion he based on his experience with handloom weavers in Orissa and artisans in Kakinada in south India (Mclelland and Winter, 196942)

            But these assertions are contradicted at least on two counts. First, not all Hindu scriptures teach doctrines of self-denial or the cessation of desire in order to achieve personal salvation. Secondly, the secular doctrine abounds in works like Kautilya's, "Arthasastra", the "Rig-Veda" and "Bhagavat Gita" (Rao, 198643).

            Kunkel describes the reasoning of western observers who find the tenets of the Hindu religion as responsible for India's economic backwardness in the following words, "The sacred literature of India contains values which are internalized by the people who then act in accordance with these values, and thus India is economically stagnant, and there is little hope of economic growth" (Kunkle, 196544). However, he also points out that the above reasoning is based on an assumption for which there is no objective evidence.

            Contrary to the western view, Singer, 195345, Srinivas, 196246 and others argue that Indian population by and large is as materialistic in its daily life as its western counterparts. Singer states that, "The Indian world view encompasses both material and spiritual values, and these can be found in the behaviour of the ordinary Indian existing side by side and in functional interdependence. Further he points out: A society dominated by a philosophy of renunciation need not be a society of ascetics. In India, ascetics and holy-men have never constituted more than a tiny fraction of the population. There have always been a sufficient number of householders willing and able to do the world's work. And while the ideals of asceticism may indirectly influence the general population, not all of these influences oppose social reform and economic development" (Singer, 195347). 

            On the basis of an empirical study conducted by him in Madras, a metropolitan city of India; Milton Singer argued that Hindu industrialists in Madras compartmentalize their religious lives and their business activities (Singer, 197248).  Timberg (Timberg, 197849) and Saberwal (Saberwal, 197650) had altogether rejected Weber's thesis that religion, norms and values, behaviour and economic development are all interconnected. They were of the view that India's economic backwardness was due to certain structural conditions that were unsuitable for entrepreneurship and not because of social or cultural systems prevailing in the country.

            While the above arguments have been forwarded, nothing conclusive has emerged. The views of scholars regarding the influence of Indian religiosity on economic success are conflicting. However, the fact remains that Indian economy remained stagnant for centuries for which historically various explanations have been suggested of which religion is only one. Foreign rule extended over a long period is another. Lack of modern educational facilities and other structural facilities for growth of entrepreneurship is one of the consequences of foreign rule. Social and political institutions, which were not conducive to economic development, are the third and perhaps the most conclusive explanation (Rao; 1986, p-1951).

            As presented in the previous section, many scholars consider religion as an important socio-cultural attribute influencing economic development. Although a cause - effect relation cannot be tested between the two variables; it would be appropriate to examine the relation between religiosity and success levels achieved by the respondents of this study in a descriptive manner. The religiosity of each respondent was measured by seeking information on his religious habits. It was measured on a three-point scale with categories of high, medium and low. The measurement scale is explained below.

            The Table - 5 shows the respondents' religiosity and the extent of entrepreneurial success achieved by them. Over 85% very successful and successful entrepreneurs are found to have high religiosity or Medium Religiosity. Only a small minority of 10 - 15% are found to have low religiosity. Majority of the respondents said that they have faith in the power of God and almost all the respondents agreed that their religious functions, norms, practices and God's power helps them to be disciplined and gives them the confidence to overcome difficulties. It may be concluded that religion is definitely not a barrier to entrepreneurial success in India; rather it is a source of strength for entrepreneurs. This conclusion is valid for both Male as well as Female entrepreneurs.  

Measurement of Religiosity

A set of 6 indicators was used to measure Religiosity.  Information regarding the indicators were obtained from the respondents with the help of the following questions:

Q. Do you:

Have faith in God?      Yes/ No

Have a place of worship in Office?    Yes/ No

Worship daily?      Yes/ No

Celebrate all important festivals?    Yes/ No

Visit the Temple/public place of worship regularly?  Yes/ No

Perform any other specific rituals?    Yes/ No 

            The respondents were given 1 point for each affirmative answer. The scale that was used consisted of 3 levels of Religiosity. The scores were ranging from 0-6. Therefore the respondents were assigned to the three levels as follows:

0-2: Low

3-4: Medium

5-6: High 

Table - 7

 

 

 

 

 

 

 

 

 

 

 

 

 

RELIGIOSITY AND SUCCESS

 

 

 

 

 

 

 

 

 

 

 

 

N=120

Success Level in Entrepreneurial Venturing

Religiosity

High

Medium

Low

M

%age

F

%age

M

%age

F

%age

M

%age

F

%age

Very Successful

18

50.00

8

44.44

11

42.31

5

38.46

4

22.22

2

22.22

Successful

12

33.33

7

38.89

10

38.46

4

30.77

5

27.78

1

11.11

Less Successful

6

16.67

3

16.67

5

19.23

4

30.77

9

50.00

6

66.67

Total

36

100

18

100

26

100

13

100

18

100

9

100

Source: Compiled personally from responses received via mail questionnaires and direct interview

Abbreviations: M stands for Male and F stands for Female 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fig. 7:Comparative Status of Male and Female Entrepreneurs w.r.t. Overall Success in Entrepreneurial venturing and their Religiosity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONCLUSION

 

             The findings of the present study reveal that the level of success in entrepreneurial venturing measured with respect to Net profit, Turnover growth, and Level of diversification (considering both Innovativeness and Risk taking propensity) are more among the male entrepreneurs in comparison to their female counterparts. Female entrepreneurs are much more unyielding to be innovative in taking risk considering the uncertainty of the environment. The reason for such backwardness of female entrepreneurs may be their lacking in education and poor support from their family as observed in their profile. However, the core findings of the present study suggest that there is a positive co-relation between religiosity of the entrepreneurs and the level of success achieved by them. So, in India the religiosity is definitely not a barrier to entrepreneurial success; rather it is a source of strength for the entrepreneurs. 

 

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