Women in Entrepreneurship - Assignment Example

Women in Entrepreneurship Introduction Entrepreneurship1 is associated with the ability of the individuals to take the risks and successfully transform the risk into profitable business ventures. Entrepreneurship is however, characterized by strong will and ability to transform potentially risky ideas into commercially viable businesses. Thus the overall spirit of entrepreneurship requires seeing things which others cannot actually see and perceive. It is also therefore referred to as the process which requires strong inner struggle before one can develop the courage and the ability to take the risk and embarrass something which is totally unpredictable and uncertain. It is because of these reasons that the women may not be successful entrepreneurs because of their overall tendency to be risk averse. What is also significant to note that the increasing numbers of women are also becoming part of the overall entrepreneurship phenomenon? The era beginning after 1990s witnessed a growth in the number of women entrepreneurs and the overall change in their roles and leadership capabilities. What is also important to note that the increasing number of women entrepreneurs is radically changing the way the world economy tend to work. Most of the women entrepreneurs tend to focus on the development of businesses which create employment and given rise to the unique business models wherein the focus is on the development of businesses which can be run like a family. These differences between the styles of running the businesses therefore generally lead to the question of whether women are worse or better off than the men in running the micro and smaller businesses. This paper will therefore attempt to discuss and explore the question of whether the women are worse managers of micro and smaller businesses with special references to UK data for last 10 years. Women in Entrepreneurship It is argued that the data regarding the participation of women in the micro and small businesses2 is limited however, increasing number of evidence suggest that the number of women in smaller businesses is particularly increasing in US. (Lee-Gosselin & Grisé, 1990). There are number of factors or elements which indicate the essential differences and the reasons as to why the Women tend to have more presence in the small and micro businesses. It is argued that the women start new businesses because they are truly inspired by the enterpreueral idea and often start businesses which are either different from their earlier jobs or they turn their personal ambitions into the business. This is different from the case with male entrepreneurs who often tend to rely on their technical skills and knowledge to start a new business. Thus money is not essentially important for the women entrepreneurs as the key motivation for opening up new businesses and running and managing the existing business. But rather it is the passion about the experimentation with new ideas and personal ambitions which make it possible for the women to continue to work and successfully operate in the small business environment. (BIRLEY, MOSS, & SAUNDERS, 1987) One of the critical reasons as to why the women are increasingly entering into the small businesses is the relative bias towards the women in the contemporary business environment. It was generally believed that the women may not be able to climb the ladder of leadership in the organizations therefore in order to make their mark and achieve the relative degree of success women tend to engage themselves into the small businesses. It is also argued that the overall success and failure of women in the small and micro level businesses also depend upon their unique personality characteristics and their individual capacity to lead. As such it is believed that women enter into the business for potentially different reasons as compared to the male entrepreneurs. It is because of this reason that the women often do not succeed in developing more successful and enduring businesses with long term perspective. This can be due to the essential differences between the strategic perspectives taken by the women who tend to develop businesses which are based on different business philosophy as compared to men. Women often tend to focus on developing businesses which can generate employment and also provide sustainable level of profitability to the entrepreneurs. This line of thinking therefore suggest that the women entrepreneurs may not be focused too much on the development of businesses which can be sustainable in future and can offer opportunities for higher growth in future. However, despite the fact that the number of women are increasing in managing the businesses the overall attitude towards the women entrepreneurs is not satisfactory. The Problems faced by Women entrepreneurs One of the critical aspects of women entrepreneurs failing to manage their businesses is the lack of access to formal sources of money. Data indicate that British businesswomen tend to remain largely underfunded as compared to their male counterparts. It is also interesting to note that UK government also failed to provide the adequate support to the women entrepreneurs despite the fact that overall number of women entrepreneurs has increased over the period of time. Some studies suggest that the women entrepreneurs are normally of lower age as compared to their male competitors therefore the age and relative lack of experience remain one of the most important factors which push the women entrepreneurs behind the line in the race of competition between the male and female entrepreneurs. Lack of experience often therefore does not allow the women entrepreneurs to look for more opportunities and develop consistent business performance. (Henrekson & Du Rietz, 1990) Another important personal aspect of the women entrepreneurs is their laid back attitude which often does not allow them to growth their businesses at rapid speed. Most of the women do not want to grow their businesses at rapid speed and as such remain stuck and could not develop larger businesses and grow in size. This is probably the most important characteristics of as to why the women actually fail to develop better and bigger businesses. Apart from that it is also important to understand that the overall inexperience of the women entrepreneurs and their lack of knowledge and technical skills culminate into the restricted growth of their businesses in long run. Access to the informal networks Informal networks play critical role in the overall success of the small businesses however, if there is a general lack of access to the informal networks or channels may be restricting the path towards the success for the business. Women often have the restricted access to the informal networks therefore they tend to falter in terms of developing businesses which are highly profitable and sustainable also. (HRM Guide, 2001) Male Bias One of the strongest reasons as to why the women entrepreneurs fail to achieve the desired results is due to the male bias. It is argued that the formal channels which can be effectively utilized by smaller businesses tend to be more male dominated therefore women face the male bias when they operate their businesses in such an environment. (Neligan, 2003) Another important reason as to why the women fail to develop successful business in UK is due to their overall status in the labor market of the country. In UK, on average, women tend to earn lower as compared to male and mostly occupy the positions which do not require any skills or of semi-skilled in their orientation. This lack of experience of working in more skilled jobs therefore refrain the women from developing their own business acumen and develop and manage independent businesses which remain successful and sustaining in the future. Assessing the performance It is argued that the previous studies tend to focused on the assessment of the performance of men and women entrepreneurs based upon the notion of growth in sales, profitability, employment and income growth and the overall survival of the ventures under men and women. What is significant to note that most of such studies faced the survivor bias wherein only those organizations were surveyed which survived over the period of time. Studies conducted by Kepler and Shane (2007) suggest that there is a limited evidence which can indicate the differences in the performance of the businesses controlled either by the male or female entrepreneurs. (Kepler & Shane, 2007). However, the overall differences between the male and female entrepreneurs arise on factors such as the motivation, the reason to start the business and overall business philosophy. This suggests that the businesses run by the women entrepreneurs tend to be based on the deep personal philosophy of the women entrepreneurs. It is also significant to understand that women entprenuers though have the same level of education as their male counterparts when they start the business however; they tend to have higher household size as compared to the male entrepreneurs. This fact alone therefore indicates the inherent differences between the overall performance dynamics of the male and female entrepreneurs and some of the factors which directly affect the performance of the women entrepreneurs. Essentially however, the overall performance differences are small and may not suggest that the women entrepreneurs are actually underperformers in any sense. However, there are some differences in the way businesses are managed. Evidence from UK The overall success of the women entrepreneurs in UK is considered as good because the number of businesses being run by the women has increased. There is a general perception that over the period of time, women entrepreneurs in UK have been able to develop successful businesses and therefore are now considered as the part of the mainstream business. What is also significant to understand that the women entrepreneurs in UK continue to face some gender bias still and this is also one of the biggest reasons as to why the women entrepreneurs fail to achieve the desired level of success as compared to the male entrepreneurs? It is suggested that the access to capital and bank funding remains one of the critical factors in the success and failure of the women entrepreneurs. Traditional credit scoring models adapted by most of the UK based financial institutions tend to show an inherent bias towards the women entrepreneurs and resultantly restrict their access to the bank funding. Over the period of time, government has also recognized the importance of the presence of women in the business and attempted to provide more support to the women entrepreneurs in the country. As such there are very limited research studies which highlight the success and failure of the women entrepreneurs in UK. Most of the studies however, focused on the factors which can be significant in the overall success and failure of women entrepreneurs in the business. Conclusion Entrepreneurship is associated with the ability of the individuals to take the risks and successfully transform the risk into profitable business ventures. Entrepreneurship is however, characterized by strong will and ability to transform potentially risky ideas into commercially viable businesses. Over the period of time, the number of women entrepreneurs in the country has increased to a great deal. This increase however, can be attributed to various factors including the bias shown towards women in the traditional workplace as well as the tendency of the women to convert their personal interests into the business ideas. However, women entrepreneurs tend to perform differently from their male competitors in terms of their overall business philosophy and approach towards work and business. Traditionally women entrepreneurs tend to perform worse as compared to their male competitors on various grounds. However, the recent success of the businesses run and managed by women suggest that the women have overcome their traditional weaknesses and have been able to develop and perfect the business models which can offer them growth and new opportunities. Data from UK indicate a growing activity of the women in the business due to increased economic and family pressures to maintain a certain level of economic status. Apart from this, women entrepreneurs still seem to face the restriction in terms of their access to the formal channels of finance as well as their access to the informal networks which are considered as essential for the overall success of the micro and small businesses. Overall women entrepreneurs are not worse performers as compared to their male competitors. Bibliography 1. BIRLEY, S., MOSS, C., & SAUNDERS, P. (1987). DO WOMEN ENTREPRENEURS REQUIRE DIFFERENT TRAINING. Retrieved December 07, 2010, from University of Cranfield: https://dspace.lib.cranfield.ac.uk/bitstream/1826/401/2/SWP0687.pdf 2. Henrekson, M., & Du Rietz, A. (1990). Testing the Female Underperformance Hypothesis. Retrieved December 07, 2010, from Econ Papers: http://econpapers.repec.org/paper/hhsiuiwop/0521.htm 3. HRM Guide. (2001). Unequal entrepreneurs: Why female enterprise is an uphill struggle . Retrieved December 07, 2010, from HRM Guide: http://www.hrmguide.co.uk/diversity/female_entrepreneur.htm 4. Kepler, E., & Shane, S. (2007). Are Male and Female Entrepreneurs Really That Different. Retrieved December 07, 2010, from SBA: http://www.sba.gov/advo/research/rs309tot.pdf 5. Lee-Gosselin, H., & Grisé, J. (1990). Are women owner-managers challenging our definitions of entrepreneurship? An in-depth survey. Journal of Business Ethics , 9 (4), 423-433. 6. Neligan, M. (2003). Business prizes and the gender divide. Retrieved December 07, 2010, from BBC: http://news.bbc.co.uk/1/hi/business/3201445.stm Read More