Creating and Sustaining a Culture of Entrepreneurship

Joan Winn University of Denver Abstract The United States is fertile ground for entrepreneurial activity and new business development, boasting the highest growth in the number of patents worldwide since 1992 and among the top three high-GDP countries in the world for successful business startups. Despite lack of funding, relevant education, or well-researched business plans, most businesses start with a small group of enthusiasts who optimistically believe that they will be successful regardless of others perceptions of the riskiness of their undertaking. Where does this can-do entrepreneurial spirit come from? How are attitudes of independence and self-sufficiency learned? How does America create the Petri dish that encourages new venture development? This paper discusses the cultural factors that contribute to entrepreneurial behavior in the U. S. and presents a model of cultural and societal forces that impact entrepreneurial activity.

Introduction If you're not failing every now and again, it's a sign you're not doing anything very innovative. Woody Allen To an American, failing at something you strive to achieve is preferable to following someone passively, even at the expense of fame or financial success. American initiative has resulted in the highest growth in the number of patents worldwide since 1992. American initiative accounts for the nearly 12% of Americans engaged in new ventures each year (Bosma & Harding, 2006). Of the 170 American companies on the Global 500 list in 2006, more than one-third were founded after 1960, nearly one-fifth were founded after 1980. In contrast, of the 70 Japanese companies in the Global 500, only five 1 were founded after the post-World War II reconstruction that began in 1945; only one in the last 60 years. Since its highly unlikely that Americans are inherently more innovative or clever than other people, what cultural factors contribute to this high level of entrepreneurial activity? Americans are known for their individualism, optimism and resilience, but where do these values come from and how do they translate to entrepreneurial and innovative behaviors? At the macro level, prosperity begets prosperity; economic and societal forces create an environment that encourages initiative and independent business ownership. The United States Small Business Act of 1953 created a program (SBA) to provide financial and managerial assistance and help in obtaining government contracts as an explicit statement of support for and encouragement ofsmall business. This, and other regulatory legislation aimed at encouraging new venture development, is a mechanism through which specific core values have influenced small business aid (Anglund, 1998: 23). At the state and local level, there are chambers of commerce, public, private and university-based assistance programs for nascent entrepreneurs and small business owners. Independent business ownership reflects the American _______________________________ Under review: International Small Business Journal. This research was supported by the Shibusawa Foundation, the University of St. Louis, and the University of Denver.

ideology of individualism, equality and equality of economic opportunity that underlies our core values of independent business ownership as a time honored path to material success. The person who starts and grows a business, particularly the self-made man or woman, also manifests the self reliance and independence frequently associated with individualism (Anglund, 1998: 27). U.S. policies that support small business development reinforce the American mindset that independent business ownership epitomizes and symbolizes economic freedom, property rights, free entry, free opportunity, free competition [that] has often been associated with the democratic ideal (Anglund, 1998: 27). But most businesses do not benefit directly from government assistance or external funding sources (Aldrich, 1990). Most businesses start with a small group of enthusiasts, bootstrappedunderfundedand poorly researched. Entrepreneurs optimistically believe that they will be successful (Arenius & Minniti, 2005), regardless of others perceptions of the riskiness of their undertaking (Palich & Bagby, 1995) or of their own qualificationstraining or experiencein starting or running a business. Where do these attitudes come from? How are they learned? This paper will discuss the cultural factors that contribute to entrepreneurial behavior and present a model of cultural and societal forces that impact entrepreneurial activity. The Western perspective is centered around rationality and individualism, grounded in Enlightenment, Protestant and Anglo-Saxon traditions. Americans values of freedom (political liberty, free speech, etc.), individual rights (equality before the law), opportunity (to pursue ones chosen profession), and achievement (wealth creation from individual efforts) can be traced to the pioneers who boldly settled in the unchartered territories of the American continent. With land abundant and available for those who chose to apply their labors, immigrants came, settled and made their fortune solely by their own initiative. The family farm and the small town [were] historic incubators of American values of individualistic cooperation (Forman, 1997: 31). The nuclear family, in its isolation from heritage, tradition or external support systems, created an uneven patchwork of hard-working communities, engendering Protestant-ethic values of achievement and guilt, rather than shame and affiliation (Forman, 1997: 31), knit together by voluntary agreements between free and equal individuals, each responsible for his or her own acts and each seeking personal salvation within the group (Lindholm, 2001: 375). Faced with uncertainty and ambiguity, a hostile and unknown environment, and an unpredictable future with no guarantees of safety, security, or prosperity, Americans had little to cling to outside their own efforts. Ambitiousness required risk-taking. Those who succeeded were lauded and admired, not just for their ingenuity and success, but also for their philanthropy. Many cities and street names bear the names of those who charted new territories, founded businesses and communities, and contributed to building the infrastructure that connects the country today. But America has come a long way from its pioneer past, with suburbanization, mega corporations, and electronic (Internet) communities replacing town-hall meetings, family farms, granges and cooperatives. The twentieth century ushered in a transformation from small craft guilds to large industrial organizations that created mechanized and impersonal systems and differentiated managers from workers. Beginning with Frederick Taylors scientific management and refined by Henry Fords assembly line, organizations grew larger and more complex, setting off internal antagonism between managers and laborers and among fellow workers. Crafts and trades were pitted against unskilled workers, whites against blacks, Asians or ethnics against each other, and men against women. Latent racism and sexism could be cynically exploited in a system already based upon separations and barriers (Forman, 1997: 6162). Workers were given discrete tasks; cooperation was discouraged. These patterns learned 2

from our industrial past still deeply imbue our industrial culture, even in organizations that are trying with immense effort and goodwill to rise to the human, technological, and competitive challenges of their current environment (Forman, 1997: 62). This impersonal and dehumanizing view of large organizations, despite the security that modern corporations can offer in the way of employment protections and health and retirement benefits, has added to the glorification of the entrepreneur who forms a new enterprisethe David among the corporate Goliathswho breaks with the establishment and uses ingenuity to succeed against the odds. The Process of Acculturation The transmission of culture begins at birth. The first and most important agent of socialization is ones parents. Parents help instill cultural mores and values in their children, reinforcing these mores and values when they are learned and practiced well and correcting mistakes in that learning (Matsumoto, 2000:175). While culture does not dictate personality, the ways parents interact with children transmits cultural values at an early age. As children develop and form relationships with otherssiblings, friends, and peersdesirable behaviors are modeled and reinforced. Basic cognitive skills like perception, classification, and inference develop in individuals as ways in which[an individual] interacts with the contours of a particular kind of physical world (Shore, 1995:4). We learn behaviors and values through imitation and identification with role models and significant relationships. Matsumoto (2000) points out the difference between a culture that encourages independence and a culture that encourages interdependence. Behaviors which foster achievement and creativity promote an independent construal of self. Caudill (1973) studied styles of parenting among American and Japanese mothers, and observed that American mothers do more positioning of, and chatting to, their infants, while Japanese mothers do more carrying, rocking, and lulling of their infants. He concluded that American infants are more physically active, more given to exploring [their] environment, and more [happily] vocal as a result of these differences in conditioning. It is as if the American mother wanted a happily vocal, active, and exploring baby, and as if the Japanese mother wanted a quiet, inactive, and contented baby. [B]y 3 to 4 months of age infants in the two cultures have already learned to behave in culturally patterned ways, and they do so unconsciously and well before any development of the ability to use language. Thus, culture would appear to be built into the person, at least in nascent form, even by 3 months of age (Caudill, 1973: 254). American children typically sleep alone, have their own space (often their own private room), and engage in independent activities (television, puzzles, videogames, books) from an early age. American children expect to have their own toys, their own opinions. They often have their own incomes, money earned from doing chores for parents or neighbors. American infants are often left alone, since Americans tend to assume that children, as autonomous individuals, need privacyBut when the American child is with people, it is very likely to be the center of attention. This leads the child to be self-assertive, attention-seeking, and linguistically expressive. When children do disobey, American middle-class mothers tend to explain the rationale for the rules to them and try to persuade them to comply, in the faith that autonomous individuals should cooperate not out of coercion, but out of free will (Lindholm, 2001: 212). American families focus on achievement-oriented behaviors lead to an individuals desire for excellence, which is closely linked with an individuals tendency to push him- or herself ahead and actively strive for and seek individual successes, a notion that is widely shared in Western culture (Matsumoto, 2000: 61). Interdependency is promoted when behaviors are guided by expectations of relevant others, felt obligations to others, or the sense 3

of duty to an important group to which one belongs. Interdependent individuals strive to achieve for the sake of relevant others such as family members (Matsumoto, 2000: 62). Independent individuals must create their legitimacy by differentiating themselves from others. This is easily observed in American siblings who, with parents encouragement, seek different paths. Socialization for independence and competitiveness continues in school. American children are rewarded for standing out among their peers and for excelling at tasks. Class sizes in American preschools and elementary school are small; there is no universal curriculum between schools and often individual classrooms within a school cover different subject matter and employ different methods of instruction. On the other hand, there are standardized textbooks that paint a fairly standard view of American history, American heroes, and American family values. Membership in a group is temporary, with few students staying in a cohort from year to year. It is not uncommon for students to change schools as their parents seek opportunities and move to other localities within the country (often in other states), far from prior attachments or even family ties. Cultivation of loose ties, with few kinship obligations, has important consequences for the degree of commitment people have to different groups. In general, in exchange for belonging to fewer groups, people in collectivistic cultures have greater commitments to the groups to which they belong. They also identify more with the groups to which they belong; that is, the groups themselves become an integral part of each individuals self-concept and identity. This makes sense because, by definition, collectivistic cultures depend on groups to a much greater degree, and subjugating personal goals in favor of collective goals is a necessity. Individualistic cultures depend less on groups and more on the uniqueness of their individuals. The pursuit of personal goals rather than collective ones is of primary importance. As a result, individualistic cultures require less harmony and cohesion within groups and place less importance on conformity of individuals to group norms (Matsumoto, 2000: 405). Americans want to be liked, but do not need consensus or conciliation to earn respect or prestige. Instead, they gain prestige by standing out among their peers and gain influence by voluntary acts of cooperation and generosity. High achievers and team players are rewarded with accolades and leadership roles. American parents brag about their childrens accomplishments; Japanese parents avoid creating the impression that their children stand out in any way. Geographic mobility and casual membership in many groups fosters the ability to deal with a variety of ambiguous situations. From an early age, American children engage in whatif scenarios, preparation for dealing with uncertainty later in life. American organizations may have rituals and protocols, but each organization differs in its rules and expectations, fostering a flexible, adaptable behavior repertoire. This is evident in the first-week-of-school rituals of explaining the rules and procedures for each class to the new group of classmates. Icebreakersactivities of introductionare common, since many students will not have met each other before, thus teaching children how to engage in conversation and meet new people. Since entrepreneurs need networks to amass a team with diverse skills and connections, these early experiences are invaluable in instilling the confidence one needs to approach strangers who may become potential partners, customers, suppliers, or funders. Stories, movies and television provide examples of resiliency and ingenuity. Examples abound of the clever child (cat, coyote, bird, mouse, etc.), whose skills and virtues triumph over obedience to authority (parent, guardian, king, nemesis). Role models, for children and adults alike, are those who bucked the system, or stood above the group to achieve ambitious goals. Advertising campaigns reinforce the desirability of doing things your way, not being satisfied with the status quo. Rich and poor wear similar clothing; young and old often address each other 4

by first names (Twenge, 2006). Status and gender roles are not narrowly defined, thus setting the stage for introspection and examination of ones particular talents, preferences, and interests beyond ones family situation. Values are derived from ones membership in a culture. With attitudes, beliefs, and behaviors, values combine to form a continuous spiral of community culture (Adler, 1999). With the exception of Thanksgiving, which was institutionalized by President Lincoln as a way to unite the United States after the Civil War, there are few truly American holiday traditions. Holidays that are widely celebrated often include parties, games, and contests. Christmas rituals include gift-giving beyond family members or close friends (teachers, newspaper carriers, coworkers); non-intimates may expect flowers or candy on Valentines Day; Halloween provides an opportunity to dress up as a hero or villain (a far cry from its Druid origins). America has secularized many religious holidays, most notably Christmas, but also Easter. The [Easter] egg hunt is a competitive activity, in which prizes are awarded.To make the competition fair, the children are divided into age groups thus setting an early example of competition and categorization by ability (Bourguignon, 1979: 117). We are taught to concede defeat gracefully, but to put up a good fight, or at least a good show, to maintain our honor. [W]hen friction becomes too intrusive, middle-class Americans know they can simply pack up and move away, an option generally unavailable to those living in the spatially fixed, kinshipbased Asian societies where interdependence is a necessity (Lindholm, 2001: 205). In America the individuals role focuses on providing for oneself and learning to function independent of ones family. Language also conveys culture, in its particularist, context-laden conventions of expression. [L]anguage presupposes the existence of a socially-forged communicative medium: a set of shared social meanings against which alone any communicative act has its reality (Bakhurst, 1997:148). The English language, with few gender and status terms, adds to the egalitarian nature of the American culture. In the absence of linguistic conventions that convey status, Americans derive status from what they accomplish. Typical cocktail party questions asked of strangers are what do you do? and where are you from? Clearly, we are defined by our accomplishments and we expect few adults to live in the same place they were born. Family ties or lineage are all but irrelevant. A simple model, then, of the cultural learning environment that contributes to an individuals self-identity is presented in Figure 1. Unarguably, significant relationships early in our lives have a profound impact on how we learn to relate to others. The nature and degree of parental expectations and close ties with others sets the stage for the extent of differentiation and/or interdependence that we feel. Families and significant others teach us howor ifto talk, trust, confide in others. The rhythms and routines of our livesthe holidays and events we celebratesend strong messages about what is important, noticed, rewarded. Significant others reactions to public behaviors, thus communicating desirable and undesirable activities and distinctions, impacts our perception of high and low status activities and behaviors and shapes our attitudes toward future endeavors.

Figure 1:

peer group activities family dynamics Selfidentity myths and stories

language

role models

Significant relationships

Cultural Learning environment

The Entrepreneurial Environment In the American economic mythology, [the entrepreneurial] heroes occupy center stageProsperity for all depends on the entrepreneurial vision of a few rugged individuals. if the entrepreneurial heroes hold center stage in this drama, the rest of the vast work force plays a supporting rolesupporting and unheralded. Average workers in this myth are dronescogs in the Big Machines, so many interchangeable parts, unable to perform without direction from above. They are put to work for their hands, not for their minds or imaginations. Their jobs typically appear by the dozens in the help-wanted sections of daily newspapers. Their routines are unvaried. They have little opportunity to use judgment or creativity. To the entrepreneurial hero belongs all the inspiration; the drones are governed by the rules and valued for their reliability and pliability. The entrepreneurial hero and the worker drone together personify the mythic version of how the American economic system works. (Reich, 1987:3) Owning ones own company conveys status that few professions enjoy. The United States embodies a social and cultural environment in which achievement and wealth creation are held in high regard, encouraging entrepreneurial activity (Cullum, et al., 2006). While career aspirations among nascent entrepreneurs do not differ markedly from non-entrepreneurs, Kolvereid (1996) found that economic opportunity, authority, autonomy, challenge, selfrealization, and participation in the entire process were given as reasons for preferring selfemployment, whereas organizational employment offered more security and a predictable workload. Comparisons of entrepreneurs with non-entrepreneurs indicates that entrepreneurs are less influenced by external validation from others (Greene, et al, 2003). Among women entrepreneurs, independence has been given the highest rating, ahead of self-realization and profit potential. The World Values Survey, which queried people in societies around the world 6

about qualities that reflect autonomy, economic achievement, and social norms to construct an Achievement Motivation Index, revealed that Confucian countries (Korea, Japan and China) valued thrift and obedience over the western European and North American values of achievement and determination (Granata, et al., 1996). Organizations derive their legitimacy from the superordinate social system in which they operate and strive to conduct themselves in accordance with acceptable legal and societal norms of behavior (Dowling & Pfeffer, 1975). From the Sherman Act of 1890, which was the first federal government limit on monopolies (restraint of trade), to the Bureau of Corporations in 1903 (which became Federal Trade Commission in 1914) that protects consumers and competitors alike from unfair trade practices (including deception and collusion), to patent and intellectual property protections, the United States has created a legal environment that protects the Davids from the Goliaths. While small and large businesses cannot compete on a truly even playing field, these laws and agencies protect small and start-up enterprises from largecompany muscle that might otherwise prevent their existence and growth. Patent and copyright protections provide incentives for entrepreneurs to create because they are allowed to benefit from their creativity. Adler (1991) observes that Americans are dominated by a need to control their environment and circumstances. The American legal system acknowledges the binding nature of contractual agreements on all parties, yet the suspicion of undue influence protects individuals against the inherent power of large corporations. Because America is a low-context culture, written contracts become necessary in the absence of long-term trust relationships. Handshakes and verbal agreements may suffice for ongoing relationships or simple transactions, but few business agreements imply ongoing obligations. Longer-term relational exchanges may actually hinder competition, since these agreements come with established relationships, facilitating social collusion and the creation of cartels (Gundlach & Murphy 1993: 43). Employment protections, while providing safeguards for unjust dismissal, promote employment on the basis of skills and productivity, not personal relationships or seniority. New attitudes concerning gender, sexuality, and socialization, most of which challenge traditions linked to the core cultural values, emerge (Forman, 1997: 32) as firms hire employees at all entry points, creating some nontraditional reporting lines: older workers reporting to young MBAs, men reporting to women. The U.S. higher education system includes courses and seminars to enhance skills or change careers. It is not uncommon to see students in the same class whose ages span more than a generation. At times, students are older than their teachers! In Confucian- and Islamic-based societies, relations between superiors and subordinates in organizations take the same form as those between parent and child; organizations are families with distinct roles and hierarchies that take precedence over skills or competence (Rosser & Rosser, 1998: 219). Formation of a new business in the United States has low start-up requirements. While some enterprises require investment in equipment and inventory, there are few financial or legal requirements for starting a business (standard forms, speedy and inexpensive process, no staterequired equity or escrow requirements for most businesses). U.S. bankruptcy laws provide safety nets for those whose attempts have failed, making exit also a less difficult ordeal than in most countries. Rather than losing face from a business failure, many entrepreneurs start again, using this experience to achieve success in subsequent attempts. Having survived a bankruptcy may be seen as a badge of honor, not a catastrophe, depending, of course, on the magnitude and attributions of the loss. Levine (1998) observed that in countries with well-developed financial systems, industries that are naturally heavy users of external financing grow relatively faster than other 7

industries. Alternatively, in countries with poorly developed financial systems, industries that are naturally heavy users of external financing grow more slowly than other industries (598). In other words, economic growth and a developed banking system go hand in hand in perpetuating long-run rates of economic growth, capital accumulation, and productivity growth (Levine, 1998: 598). U.S. tax codes encourage investment, which promotes not just largecompany ownership but venture capital investment for smaller firms. Returns to owners and investors alike are treated favorably; gains and losses can be offset or amortized. Many state laws provide incentives for new business development, and/or preferential treatment for incorporations in certain locations; whether the business or founder has a physical presence within the jurisdiction may not be material. The fact that independent Venture Capital and Angel Investor groups are more active in the U.S. than other countries does not, in itself, explain the high rates of entrepreneurship in the U.S. On the one hand, venture backing of new companies is reserved for a select few rising stars, usually companies that already have gotten off the ground and are thus attractive to potential investors. On the other hand, [s]tudies show that formal [funding] sources are not very important in explaining founding rates, even for technology-based organizations (Hart & Denison, 1987). Most entrepreneurs use informal sources of funding, typically their own savings and funding from their families (Zimmer & Aldrich, 1987). Changes in credit requirements and availability have enabled entrepreneursnotably women who did not previously have access to creditto finance new businesses with bank lines of credit and credit cards (Cole & Wolken, 1995). The low capital requirements for service industries opens the floodgates to women and men of all ages, creating an attractive environment for career change and reentry as family situations change. While retail, hospitality, and service businesses have long been considered traditional female industries, technology and the decline of U.S. manufacturing has leveled the gender-role playing field considerably (Greene, et al., 2003). Observations of the technology boom in Silicon Valley indicate that start-up companies can, in fact, have a competitive advantage over large, established corporations in industries undergoing rapid change. Specialized skills require collaboration with networks of customers and suppliers that allow quick shifts in the marketplace (Saxenian, 1990). Large-company self-reliance can mitigate against innovation and flexibility. Media influences have a profound effect on changes in attitudes (Lachman, 1989) and innovative companies have capitalized on using multiple media to convey the benefits of their products in creating better lifestyles. Celebrities don chic clothing, eat trend-setting foods, and drive expensive cars. Sports heroes talk about how hard they worked to be the best. Entrepreneurs write books and give commencement addresses that show how they harnessed their creativity by working hard and doing things differently. Burger King tells us to have it your way, Nike dares us to just do it. Music and movies convey powerful images of new ways of doing things, dreams and possibilities, triumph over tragedy. Just as American consumers are willing to try new products, skilled workers are often willing to leave established jobs in favor of the opportunity to work for start-up companies that offer more excitement, innovation, or the potential for a share in the profits. Topel and Ward (1992) found that two-thirds of all first jobs last less than a year; it is typical for American employees to change jobs seven times within the first 10 years of their working lives, using the skills and experience gained to better their salary and position. As job requirements have changed over the past few decades, so too have educational requirements (Hamilton & Hamilton, 2006: 265) as companies demand workers who can adapt to more complex and less predictable workplace situations. In this competitive economic environment, career and economic 8

advancement requires self-improvement and visible accomplishments above loyalty and camaraderie. [High rates] of job changing and movement of workers between different employers in the U.S. opens up many opportunities for workers to explore the prospects of self-employment (Aldrich, 1990: 14). Educational institutions have responded to the increase in interest in independent business ownership, as evidenced by new programs and courses of study in entrepreneurship. More than 500 U.S. colleges and universities offered programs in entrepreneurship in 2005 (Hopkins, 2005), as educators respond to the need for business development skills over technical and management skills. Many universities house business incubators, startup space or laboratories for new venture development. Science research laboratories are fertile ground for discoveries or innovations that lead to new products and/or new organizations. Societal attitudes toward big business also foster entrepreneurship. A 2005 Roper poll in the U.S. reported that only two percent of respondents rated CEOs of large corporations very trustworthy. The previous year, a different survey showed only 20 percent of respondents strongly trusted business executives. This distrust of big corporations lends itself to a willingness to do business with small companies, even those that have not yet proven themselves over time. Consumers are only as loyal as their pocketbook will allow, with no fear that doing business with someone new will sever life-long friendships. There has been some debate as to the impact of the economy in new business development. For some, unemployment may trigger independent business ownership. In addition to providing income for the entrepreneur, availability of workers may allow the fledgling company to find suitable employees without incurring undue financial burdens. On the other hand, in times of economic prosperity, potential customers may have more discretionary income and thus may be more willing to try new products. A fundamental truth is that business cannot exist without society and that society cannot go forward without business (Joyner & Payne, 2002: 298). Thus, business must acknowledge societys existence and act in concert with societal expectations. As businesses respond to cultural changes, so too does the culture change in response to the business climate. While it is not clear whether cultural factors lead to economic growth or whether economic growth leads to cultural change, there is strong evidence that postmaterialist values emerge when a society attains relatively high levels of economic security. In this case, economic change reshapes culture. On the other hand, once these values become widespread, they are linked with relatively low subsequent rates of economic growth. Here, culture seems to be shaping economics (Granato, et al., 1996: 613). Figure 2 illustrates how the overlay of legal and social systems supports the acculturation process that contributes to the propensity for entrepreneurship in the United States. The congruence of institutional safeguards and early acculturation go hand in hand in reinforcing independence, rationality, and self-determination. On a societal or macro-level[t]he external climate, availability of natural resources, population density, available technology, and other factors [relating to] margin of survival help dictate the cultural practices that dominate and endure (Wines & Napier, 1992: 837). But while deep-rooted cultural attitudes are slow to change, the issues and stakeholders are not static; social issues are as dynamic as is society (Joyner & Payne, 2002: 301). [P]ersonality does not just unfold from the inside as a person grows older, nor indeed is it only responsive to pressures from the family and peers; it is also affected in direct and indirect ways by broader changes taking place in the social structure and culture of a country (Caudill, 1973: 246), in particular the social structure changes that have come with economic development and changes in family life throughout the decades. 9

Figure 2:

Education system Demographic shifts peer group activities family dynamics

Economic conditions Media influences language Technology availability role models Selfidentity

Kinship obligations

Institutions & affiliations

myths and stories Cultural Learning environment

significant relationships

Employment opportunities

Societal acceptance Legal system

Institutional support

Institutional learning environment

Embracing an Entrepreneurial Mindset Culture is not static. While core values may be slow to changeand, in fact, may be the bedrock of a stable and productive societythe institutional environment changes with economic and geographic mobility. As access to products, information, and international travel increases, the demarcation of ethnic or country cultures begins to blur. Whether one believes in the absolute or immutable nature of core values, the impact of societal changes on behaviors and attitudes cannot be ignored. Within the last generation, the United States has seen a greater acceptance of ethnic and lifestyle differences and a higher value placed on choice and individual expression, without sacrificing its core values of freedom and democracy (Yankelovich, 1994). Bird and Stevens (2003) have observed a convergence in attitudes and behaviors of those engaged in business or other trans-national activities. It is hard to deny that eating habits around

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the globe have been affected by McDonalds, KFC, Starbucks, and Coca Cola. Music and movies crossed the ocean even before the Internet. Porter (2000) suggests that economic culture is sticky and hard to change but that unproductive values do change over time (25). Lachman (1983) noted that intensive late life exposure to new social contexts (e.g., modern organizations) [can] bring about significant changes in personality (565). Warren Benniss study of over 40 American leaders uncovered intense, transformational experiences, many of which occurred in adulthood, that had profound changes on ones perception of self and which resulted in significant behavior and attitudinal changes. These crucible experiences resulted in actions that not only changed the persons leadership style, but provided a catalyst for social change (Bennis & Thomas, 2002). Tu (2000) implores us to confront our willingness and courage to understand radical otherness as a necessary step toward self-understanding (266). We need to recognize that culture has many layers and that change need not threaten core values and ethics. Lachman (1983) distinguishes core values which are a function of early socialization, from periphery values, which can be altered later in life. Grondona (2000) differentiates between values that are intrinsic, or moral, and those that are instrumental, or economic. Cultural transformations occur over time, some aspects being more detachable than others, depending, in part, on the degree of personal identity and social sanctions that accompany changes in behavior (Bourguignon, 1976). Some values are more central to the culture and need not change in order for others to be adopted and incorporated into the desired social/economic landscape. That having been said, we do not argue here that Western culture is superior to all others or that non-Western cultures need to adopt a more-Western mindset. However, it is worth examining those cultural aspects that foster or hinder economic and social progress. Dysfunctions are present in every society. Franke, et al. (1991) believe that individualism [is] a liability in a world in which group cohesion appears to be a key requirement for collective economic effectiveness (172). They believe that ...economic organizations benefit when perseverance tempered by flexibility and respect for hierarchy and thrift are accepted values (1991:170). Lovett, et al. (1999) observe that relationship marketing is representative of more general changes taking place in Western business practices. Another indication of a movement toward particular relationships is the recent interest in virtual integration, in which tightly coordinated relationships are maintained with only a few suppliers (241). Small and large organizations increasingly rely on long-term strategic alliances to fill the gaps in expertise that are needed to compete in todays complex and demanding marketplace. As stories of successful entrepreneurs gain public awareness, new ventures become the testing ground for new ideas. The astute entrepreneur must always assess the social acceptance of a businesss product/service offerings, employment practices, and promotion strategies. Educational programs must respond to the needs of trans-national organizations that need employees who can adapt to a wide range of environments. Modern management practices are being adopted around the globe, as Asian and post-soviet countries include Western-style business courses in their curricula. Skills and attitudes that help expats adjust successfully to an unfamiliar culture are the same as those that entrepreneurs need to succeed in business in a new industry or new political atmosphere. Kumagai (1996) sees cross-cultural experiences as the only way to recognize and learn the benefits that different cultures have to offer. Already there are examples of entrepreneurs in China and Japan (and elsewhere) who are having success penetrating the marketplace and gaining acceptance. Most of these new entrants are foreign-educated or foreign-born, yet their presence is evident that attitudes and behaviors do change. Computers and mobile phones have 11

become essential tools for communication all over the world, with Microsoft and Motorola leading the way. Education is the path to upward mobility and prosperity. Education systems that rely on rote, right-answer learning will never cultivate the skills needed to operate in ambiguous or unpredictable situations. Preventing individual expression only serves to thwart creative or entrepreneurial leanings. The legal support system for business, including availability of capital and technology, can help businesses grow, but the boldness that an individual must possess to create a new organization takes attitude and behavior shaping at an early age. Entrepreneurs are not born. But they are taught self-confidence and independence as they learn to talk and walk and interact with others. Confidence builds in incremental steps with experimentation and testing ones abilities in unscripted situations. Wealth-creation and respect are by-products of doing things well. Successful entrepreneurs are well-educated (Greene, et al., 2003; Taniguchi, 2002), but rigid education systems can thwart creativity and stifle entrepreneurial proclivities. Regardless of the stability of the social system, individuals are confronted with experiences in their lives that test their coping and adaptive behaviors. The U.S. has had its times of political and economic stability, its times of retrenchment, its times of outreach and its times of xenophobia. Nonetheless, we have retained certain core values that have served us well and helped us endure, and adapt, to the changes around us. Despite fierce individualism, Americans are generous (as evidenced by tipping behaviors and donations to charitable causes); despite our competitive nature, we are social and work well with others (as evidenced by high productivity and creativity in teams), forming loyal friendship bonds and effective networks. Despite a penchant for getting ahead and breaking the rules, Americans are, by and large, law-abiding (as evidenced, among other things, by high tax compliance and driving behaviors) and altruistic (as evidenced by civic engagement and volunteerism). In order to deal with the ever-changing, complex, ambiguous world that awaits, people of all countries and cultures must examine their attitudes toward change, risk, and status. Entrepreneurship is an intentional act. Almost by definition, innovation means breaking the rules and overturning conventional wisdom. Its the opposite of imitation and of business-asusual. For the new competitor who seeks to survive and succeed in a market where established competitors have the advantages of scale, long-standing customer relationships, reputation, and financial staying power, innovation isnt just a nice-to-have. Its a necessity. (Clifford & Cavanagh, 1985: 7)

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1

Excluding those formed by mergers or set up by the government (e.g. airline and utility companies that were founded 1951); Sony, Honda, Sanyo, Daiei (retail), Aeon (language schools) were founded, respectively, in 1945, 1946, 1947, 1957, and 1973.

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