Cultural determinants of entrepreneurial emergence in a typical sub-Sahara African context

The Authors

Nnamdi O. Madichie, University of East London, London, UK

Anayo D. Nkamnebe, Nnamdi Azikiwe University, Awka, Nigeria

Ellis I. Idemobi, Anambra State University, Uli, Nigeria

Abstract

Purpose – With the increasing research attention given to the culture-entrepreneurship research, the need to explore the apparently neglected cultures has continued to escalate. The Nnewi culture of Anambra State in Nigeria is a culture known for high incidence of productive entrepreneurship, but unfortunately has received limited research attention. Using this as a point of departure, this paper aims to examine the influence of cultural traits of the Nnewi people that propel entrepreneurial emergence and success.

Design/methodology/approach – A survey of 30 owner-managers (chief executives) and 236 top management staff (cutting across gender, class, age and religious lines) of select Nnewi indigenously owned firms were surveyed.

Findings – Culture had a strong and positive impact on the entrepreneurial and managerial performance of the Nnewi people. The critical aspects of the Nnewi cultural traits that propel entrepreneurial zeal and managerial performance include prudence, individualism, innovativeness, trust, intimacy and openness in the workplace, submissive apprenticeship as well as perseverance. Furthermore, the results suggested that the “Afia Olu” and “Ikwu Aru” festivals celebrated yearly, are the basis for the industrious cultural attributes of Nnewi people.

Originality/value – The paper lends an “African voice” to the culture-entrepreneurship literature by providing an empirical basis for sub Saharan African (SSA) cultures to look inwards for the purposes of identifying social values, ethos, beliefs, and practices that could propel entrepreneurship development in the same manner the Nnewi community has evolved. Overall, the paper provides an update on a decade old enterprising community – Nnewi, drawing inspiration from other native communities such as the Taos Pueblo in North America and the Kibbutz communities in Israel.

Article Type:

Research paper

Keyword(s):

Entrepreneurship; Sub Saharan Africa; National cultures; Nigeria.

Journal:

Journal of Enterprising Communities: People and Places in the Global Economy

Volume:

Number:

Year:

2008

pp:

285-299

Copyright ©

Emerald Group Publishing Limited

ISSN:

1750-6204

Introduction

Numerous research have continued to support the wide held orthodoxy that entrepreneurial development is not restricted to any single determinant or location (Freytag and Thurik, 2007; Davidsson, 2004). Instead, the emergence of entrepreneurship is a concomitant complex mixture of psychological, contextual and socio-cultural determinants (Rutashobya, 1999; Katwalo and Madichie, 2008). In particular, the influence of culture as a crucial determinant of entrepreneurial development has received considerable confirmation in the literature (Wennekers, 2006; Freytag and Thurik, 2007). Many studies (Harrison and Huntington, 2000; Thomas and Mueller, 2000) have also indicated that some ethnic groupings did demonstrate greater entrepreneurial propensity than others. For instance, Davidsson and Wiklund (1995, p. 2) concluded that “cultural variation is a powerful determinant of regional or national variation in the ‘supply’ of entrepreneurship”.

Despite this obvious demonstrated interface between culture and entrepreneurship, limited research efforts have been directed towards proffering deeper explanations on this interface (Freytag and Thurik, 2007). Perhaps, the trifling research effort on culture and entrepreneurship – especially in the context of sub Sahara Africa (SSA), which has one of the world's most diverse cultures, could be argued to be among the worst. In the light of this, there have been numerous calls (Davidsson, 1995; Davidsson and Wiklund, 1995) for more intensified research activities in this direction. Perhaps, more urgent is the research in determining the extent cultural orientation of individual entrepreneurs drive their entrepreneurial propensity (Katwalo and Madichie, 2008). Following the tradition of Koenig et al. (2007), cultural orientation is interpreted to mean the “manifestation of culture at the individual level as opposed to manifestation at the aggregate level” (Freytag and Thurik, 2007, p. 2). However, no study has been undertaken to determine the influence of Nnewi culture on their known entrepreneurial impetus – save for Brautigam (1997). Paradoxically, the people of Nnewi are known to have unsurpassable stock of entrepreneurs in Nigeria (Imaga, 1990; Brautigam, 1997).

The people of Nnewi form the focal community of this work as the home of several economic wonders that have challenged informed predictions regarding economic and industrial development in a politically unstable (until May 1999) and economically hostile environment (especially between 1986 and 1988; and again between 1992 and 1999). Despite the development challenges of the Nigerian economy since the early 1980s, and the enormous material and human losses experienced by the people of Nnewi during the 30-month old Nigerian civil war (1967-1970), the people have demonstrated unprecedented growth that is impacting positively on Nigeria's economic development. The source of this growth is largely accounted for by the entrepreneurial resourcefulness of that community grouping (Akpala, 1984; Forrest, 1994; Nkamnebe, 2003) rather than as a result of any success associated with the state's support infrastructure, which has been rather appalling[1].

Consequently, Nnewi has emerged as one of the major business locations in Anambra State (and in particular amongst the Igbos) of eastern Nigeria. The population density of the state is among the highest in Nigeria (Ukwu, 1977) and comprises of highly motivated and commercially mobile people (Ewurum, 1991) with very strong entrepreneurial spirit, which makes them venturesome and daring in business risk taking (Ejiofor, 1987). They create new businesses anywhere in Nigeria and indeed anywhere in the world. For instance the “Anambra Handbook” (Ministry of Information, 2002) clearly observed that one of the special characteristics of Anambra State is the immense resourcefulness of its people who carry on a most animated relationship with people who come across them. By 2003, the State had a vibrant small and medium scale private industry composed of over seven hundred and ninety one firms/members with three hundred of these industries based in Nnewi according to information contained in the Anambra State Investment Guide (Ministry of Commerce and Industry, 2004).

These businesses are predominantly in the areas of motor spare-parts, agro- processing, mineral extraction, and engineering and fabrication (Alutu, 1983). The success of these small and medium enterprises (SMEs) and other businesses at Nnewi without significant government support is an indication of the potential ingenuity of the people waiting to be appropriately studied for replication elsewhere. In a study carried out by the Anambra State Ministry of Commerce and Industry in 2002, failure rate of industries in Nnewi was put at less than ten per cent whereas in Onitsha and Awka (with similar industrial clusters) failure rate was put at over 70 percent (Ministry of Information, 2002). What could be responsible for this success rate? We set out in this study to locate (if any) specific cultural traits in Nnewi indigenous people of Anambra State contribute to their well known entrepreneurial zeal and zest. We are poised therefore in this work to discover if cultural factors are responsible for this feat and what the cultural factors are and how they can be replicated elsewhere.

This paper is split in seven main parts. The general background of the study has already been highlighted in part 1. In part 2 a brief review of the literature is undertaken. The research method is presented in part 3 and this is closely followed by our findings in part 4. The role of part 5 is to discuss the findings, whose practical implications are highlighted in part 6. In our final part 7, the paper concludes that the Nnewi people are one major cluster of entrepreneurs whose activities are not only culturally embedded but emergent from the zest and social networking spirit that drives entrepreneurial communities worldwide.

Brief review of related literature

Defining and explaining culture has met with some resistance in terms of adopting a definition that is universalistic. This perhaps is as a result of the eclectic and multidisciplinary nature of the construct. Despite the obvious multiple shades of culture, Iguisi (2008, p. 1) summed the various characterisations of culture to include “historic, historically determined, related to anthropological concepts, socially constructed, soft, and difficult to change”. With the increasing interest in culture-entrepreneurship research, the focus has been on “entrepreneurial culture” as a potential cultural trait that could spur entrepreneurship development (Ajaekwe, 2008; Katwalo and Madichie, 2008). Gibb (1996) defined entrepreneurial culture as a conglomeration of values, beliefs and attitudes that are identical in a particular society, which has the propensity to drive entrepreneurial inclination of that society both at the micro (individual) and macro levels. Following this perspective, a number of cultural traits have been found to be crucial in developing entrepreneurship in a given social setting. In a recent review, Ajaekwe (2008) categorised the cultural attributes into:

family background;
religion;
history;
ideology; and
enterprise culture.

These are discussed in turn.

Family background and tradition in self-employment

It has consistently been upheld that the prevalence of business or enterprise notion in a family setting creates an environment where family members develop with mental condition that enterprise spirit is desirable and entrenched way of life. Such setting provides natural incubation for enterprise development as the family network would reinforce the enterprise orthodoxy by ensuring that members of the family have access to resources that would support their enterprise development efforts. The Nnewi cluster is characterised by strong family and ethnic ties which are as much embedded in geography as to historical and cultural roots (Oyeyinka, 2001, p. 10). According to him “ethnic and family ties are less important in the two Lagos clusters compared with Nnewi.” They are not the stereotypical micro enterprises for which Africa is known (Oyeyinka, 2001, p. 49). Embeddedness means that information travels more quickly through networks not only of producers, but the interconnected networks of distributors and also of ethnicity and family (Brautigam, 1997, p. 1075).

Religion

Religion provides a person's basic values and beliefs which in turn affect his/her disposition toward entrepreneurship (Weber, 1976). Accordingly, cultural traits that are known to be extremely religious starts early in life to develop ethos that in turn determines religious perspectives to entrepreneurship. For examples of two contrasting cases see Dana and Anderson's (2007) case study of the Taos Pueblo community in New Mexico and Heilbrunn's (2008) study on the Kibbutz communities in Israel (Table I). This plays a profound role in the life of members of that society. Citing Achebe's (1983, p. 46), The Trouble With Nigeria, Brautigam (1997, p. 1072) noted that:

The Igbo culture, being receptive to change, individualistic and highly competitive, gave the Igbo man an unquestioned advantage over his compatriots in securing advancement in Nigerian colonial society. Unlike the Hausa/Fulani, he was unhindered by a wary religion, and unlike the Yoruba, unhampered by traditional hierarchies.

Consequence of history

This has been argued to determine the extent to which social structures are designed to enable expression of individualism and communalism, conformity or deviancy, equality or hierarchy (Haggett, 1983). As such, social structure that is designed to be unbearably conformist in nature is likely to stifle creativity among younger members of that society. Such setting would foster personal attributes generally associated with entrepreneurship, particularly leadership, creativity, self-reliance and self-confidence (Ajaekwe, 2008).

Ideological practices

This refers to the pattern of thinking which is most characteristic of a population (Burrows, 1991). Some of the manifestations of ideological practices that could influence the practice relevant to entrepreneurship include a society's treatment of individuals' failure and reward for economic successes and advancement.

Prevalence of an entrepreneurial culture

An entrepreneurial culture is seen as a set of values, beliefs and attitudes commonly held in society which support the notion that an entrepreneurial life system is desirable, and thus strongly supports the search for effective entrepreneurial behaviour by individuals or groups (Gibb, 1996). An entrepreneurial culture nurtures individuals in significant ways (Joynt and Warner, 1996), and does not stigmatize entrepreneurs who have tried but failed, rather it recognizes the positive influence of entrepreneurs/entrepreneurship on society and serves as an incubator in the entrepreneurship initiation process (Johansson, 1993). Moreover, those economies and regions which have flourished in the late twentieth century have a common business culture which can be broadly described as entrepreneurial (Davidsson and Wiklund, 1995). The same applies in a cultural setting with negative attitudes towards entrepreneurship[2]. For instance, if entrepreneurship is tainted with charges of profiteering, speculation, corruption, violence and criminality, not only may it not flourish in such setting, but it may also further foster strong and lasting anti-entrepreneurial values (Bateman, 1997; Ajaekwe, 2008).

Methodology

Sample description

Nnewi is situated some 30 km South East of Onitsha in Anambra State in the southeastern part of Nigeria. This highly commercial town has undergone rapid urbanisation and industrialisation within the past two decades, since the end of the 1967–1970 Nigerian civil war.

Particularly unusual in the Nigerian context is the rapid, sustained development of a number of medium and large-scale, indigenous industries employing over 50 people, in a region outside of the main industrial centres of Lagos and Kano-Kaduna. As Brautigam (1997) once put it, together with Aba and Onitsha, Nnewi forms part of eastern Nigeria's new “industrial axis”. The Nigerian media regularly call attention to this unusual cluster of vibrant, modern new industries, dubbing the region “the Taiwan of Africa’, some are confident enough to call it Nigeria's “Japan.” Brautigam (1997, p. 1063) goes on to point out that “the development of an apparently healthy cluster of factories and related services in eastern Nigeria presents some puzzles”.

However, Anoliefo et al. (1998) have argued recently that although industrialisation has enjoyed priority status in this locality as a requirement for modernisation and economic progress – especially at the micro level, this rapid urbanisation, aggressive industrialisation, and the attendant uncontrolled population growth have had a deleterious impact on the environment. There is now a wide range of industrial wastes that are released daily into the environment. Nonetheless this matter is perceived as a subject for another paper as this study focuses on the entrepreneurial development of the Nnewi cluster over a decade from first widely reported by Brautigam (1997).

Sample selection

A sample of 295 among owner-Chief Executives and senior managers in 32 flourishing manufacturing firms owned and managed by Nnewi indigenes were surveyed. A decision on who is an Nnewi indigene was guided by the definition of Alutu (1983) in which a person is said to be of “Nnewi extraction”, if such person qualifies to be admitted into the “Nzuko Ora Nnewi” a body of Nnewi indigenes. The instrument was administered on the respondents by one of the researcher who was supported by two trained research assistants. Following the tradition of Yavas (1987), a drop-and-pick approach was used in the distribution of the questionnaire. This proved effective as over 90 per cent response rate was achieved. The studies rely heavily on the opinion of these entrepreneurs and managers to represent good approximation of the reality the study intends to measure. This perspective is consistent with the strategic management school. Katsikeas et al. (1996) captured the views of this school thus: “there is clearly a consistent thread in the literature of marketing and strategy that links decision-maker cognitive biases and values with perception of strategic situations and strategic outcomes”. The sample cuts across gender, class, age and religious lines in exploring the cultural characteristics and traits of Nnewi indigenous entrepreneurs and managers that propel entrepreneurial excellence amongst the people.

Findings

Two questions (Table II) were posed to assess entrepreneurs' and managers' beliefs and perceptions of the impact of Nnewi culture on their entrepreneurial development. From Table II also the responses to question 1 shows that 78.9 percent of our sample confirmed that “Nnewi culture” had a strong impact on the entrepreneurial pursuits of the indigenous community. However, about 18.8 percent of the respondents opined that the culture had no impact, while 2.3 percent remained undecided.

The high proportion of the respondents who answered in affirmative to the question of the people's culture playing a significance role in their business endeavours points to a possible evidence that the urge and desire to succeed, which are inherent in the people is as a result of their unique way of life. Again, the response to Question 2 (Table II) shows that 95.9 percent of the respondents agreed that the Nnewi indigenous culture encourages entrepreneurship thereby leading to the proliferation of manufacturing and service companies that were founded and managed by indigenes of Nnewi. However, about 4.1 percent were of the view that Nnewi indigenous culture did not encourage entrepreneurship. We could therefore infer that the proliferation of manufacturing concerns of the Nnewi people is culturally embedded – which encourages the spirit of entrepreneurship and “survival of the fittest”.

Table III shows that about 27 percent of the respondents believe that goal setting is a visible tool of Nnewi entrepreneurs and owner-managers as means for ensuring enterprise effectiveness. About 45.1 percent indicated that Nnewi entrepreneurs combine clear goals setting with prudence, individual self help, trust, intimacy, openness, confidence and submissive apprenticeship rooted in Nnewi model of master-servant relationship.

From Table III also it can be seen that about 8.6 percent of our respondents believed that the most effective way is constant check on goal attainment while 16.9 percent thought it was adequate motivation through good reward system focused towards achieving results in the organization. Furthermore, during oral interviews with randomly selected members of staff and observations at the shop/factory floors in the firms under study at Nnewi at peak periods, it was found that intimacy and openness between the rank and file and management helped to raise productivity and commitment to the organization. Discussions were free and frank in most cases and it is equally remarkable that in many of the firms visited, owner and top managers and other workers wore common uniforms.

The question and responses in Table IV examined the impact of two important festivals – “Afia Olu” and “Ikwu-Aru” – among the people of Nnewi that were perceived to have some impact on their entrepreneurial culture. The “Afia-Olu” festival, a predominant culture of the Nnewi people which encourages hard work, individual effort, perseverance and dedication to duty, accounts for 50.4 percent of entrepreneurial success. They see this aspect of their culture as the basis for ingenuity, shrewdness, attachment to everything of value, self-effort, determination to succeed, service to masters with absolute loyalty and submissiveness while on apprenticeship. But about 40.6 percent of the respondents would rather consider the virtues now being associated with Nnewi people to have their roots in “Ikwu-Aru” festival which is usually conducted to honour people who have come of age more so when it is accompanied by some enviable achievements. Only 9 percent of the respondents felt that the entrepreneurial successes of the Nnewi nationals are as a result of practices other than any cultural traits of the Nnewi indigenous people.

Discussion of findings

The results in Tables II-IV indicate that in the opinion of our sample respondents Nnewi culture has strong and positive impact on entrepreneurial and managerial performance of Nnewi people and that the critical aspects of Nnewi cultural traits that propel entrepreneurial zeal and managerial performance include prudence, individualism, innovativeness, trust, intimacy and openness in the workplace, submissive apprenticeship as well as perseverance.

We also noted that the annually celebrated “Afia Olu” and “Ikwu Aru” festivals by the Nnewi people epitomised the resounding entrepreneurial successes seen amongst that particular community. During these festivals the Nnewi people showcased their achievements during the past year. Responses from our study also indicated that the “Afia Olu” and “Ikwu-Aru” festivals were the background to the well-known attributes of shrewdness, ingenuity, hard-work, individualism and self effort. It also confirms the spirit of close relationship and intimacy in the workplace, competition, pperseverance, and respect for age that goes with achievement that are usually associated with Nnewi businesspersons. These attributes of the indigenous Nnewi people encouraged entrepreneurship and the “survival of the fittest” leading to the proliferation of manufacturing firms in Nnewi town. Thus, with this background, highly resourceful and industrious people of Nnewi have done demonstrated entrepreneurship with great energy and determination. Indeed owning a factory as part of what can be showcased during the “Afia Olu” festival tended to provide an unrivalled indication of “pride-of-place” in Nnewi culture.

These findings are collaborated by Ewurum (2001) where it was stated that traditionally agriculture was the chief occupation of the Nnewi people – who despised idleness at the same time as upholding the desire to work and record achievements. But the land was not fertile and as such did not offer encouragement. And yet one must show something as achievement. They began diversifying into other life pursuits such as trading, road transportation and cottage industries. Even in all these they still attached great importance to “Afia Olu” annual festival and always strived to show something of achievement in their great determination to succeed. Competition was very keen in all aspects of the life of Nnewi people. Age was of little consideration, as what mattered most was achievement.

As Oyeyinka (2001, p. 18) once pointed out, successful clusters were those that “have an indigenous growth potential to be resilient in the face of economic crisis and to be conducive to a process of sustained innovation”. This is also consistent with Brautigam's (1997, p. 1072) submission that the Igbo have long been known for their commercial dynamism, which translated into close knit trading networks that extended to all parts of Nigeria and even as far as into neighbouring countries. The Igbos were also singled out for their somewhat unusual tradition of socially mobile, acephalous (leaderless) societies, compared with more rigidly hierarchical groups such as the Yoruba on the western fringes of the country.

Only those who were able to showcase achievement were important personalities or were respected for their age in the culture of the people. However, attributes such as trust, intimacy and openness were also observed at the shop floor of most of the firms with everyone including owner-chief executives and very senior managers wearing common uniforms. This practice tended to put seniority considerations at the back door. As a result, discussions between owner-chief executives and the rest of the workforce on work related problems were frank and open. Everyone could air his or her views. This helped goal attainment, as the workers did not usually resist the goals set after discussions.

Practical implications

Nnewi indigenous culture of industry with base on the “Afia Olu” and “Ikwu-Aru” cultural virtues positively propelled entrepreneurial zeal and pursuits in the people. The proliferation of manufacturing firms of Nnewi ownership and management is a direct output of the Nnewi people's culture of industry. The culture of a people can therefore exact influence on their entrepreneurial zeal. Furthermore, in the Nnewi entrepreneurial culture, productivity was linked to trust, openness and intimacy in the workplace of Nnewi firms. Trust and openness are at the root of Nnewi management system and industrial success. Very often there is resistance to the idea that there can be, or should be a close familiarity with people in the work place. The bureaucratic ideal is that personal feelings have no place at work. In the Nnewi management system however, we found a successful industrial society in which intimacy occurs in the work place. Bureaucracy is low, as Nnewi organizations do not operate so much bureaucratic rules and formats. Indeed the Nnewi entrepreneurs and their senior managers are in our view following the Japanese as the miracle workers of our era.

Our finding of linkages between trust, openness and intimacy to industrial productivity is consistent with an earlier study (Ouchi, 1981 – thesis on theory “Z”) – suggesting that productivity and trust go hand-in-glove. In Ouchi's (1981) view, trust, integrity, intimacy and openness are closely interlinked as “essential ingredients” for effective management. When an organization relies on these principles, individual efforts are co-ordinated and employees are able to take a cooperative long-term view of the firm. The Nnewi management system is indeed another confirmation of Ouchi's (1981) postulations. The huge industrial success recorded by the Nnewi owned and managed manufacturing firms are partly linked by this study to trust, openness and intimacy in the workplace.

Conclusions

In this paper we have tried to provide some critical insight into the central characteristics of Nnewi management system that are embedded in Nnewi cultural imperatives that aid entrepreneurial success and managerial excellence among indigenous peoples. As Okpala (1984) once pointed out, the congruence between management practice and environmental factors is a major source of efficiency in the organization. We believe therefore that improved enterprise development incessantly follows successful integration of culture and other environmental factors (Katwalo and Madichie, 2008). This contrasts sharply with some observed trends in man African countries that tend to believe that indiscriminate adoption of Western models of enterprise development was the “ultimate” panacea for tackling the challenges of enterprise development in the region. This calls for renewed effort at inwardly searching for cultural ethos that could be exploited in unleashing the entrepreneurial potentials of African communities in general.

Indeed we have evidence to suggest that other cultures – both within and outside the African setting – have some lifelong practices that are culturally embedded – with the potential of having an impact on their entrepreneurial development (Dana and Anderson, 2007; Heilbrunn, 2008). Unfortunately, these aspects of the people's culture seem to have been inadvertently abandoned in the name of “modernity”. It is therefore imperative for other cultures to be studied more closely with a view to possibly identifying cultural ethos that could support the development challenges of these communities through nurturing vibrant entrepreneurship. As Brautigam (1997, p. 1078) once pointed out:

[…] in an environment of uncertainty and risk, with imperfect information and positive transaction costs, Nnewi traders had a number of institutional advantages. In many ways, Nnewi Township has been described as an authentic ‘manufacturing miracle’ […] but because manufacturing miracles tend to be measured by national level production, Nnewi and other areas like it are probably doomed to pass unnoticed by those who are trying to understand the reasons why some nations grow, others stagnate, and yet others decline.

Table IA tale of two enterprising communities

Table IICultural determinants at play

Table IIICultural traits of owner-managers that foster enterprise effectiveness

Table IVAspects of Nnewi culture that stimulate entrepreneurial emergence

References

Achebe, C. (1983), The Trouble with Nigeria, Heinemann, Oxford, pp.47-8.